Mr. WEIR. Well, they, of course, only fabricate in a comparatively few lines. I mean The CHAIRMAN. Who fabricates in a comparatively few lines? Mr. WEIR. Steel companies that fabricate. The CHAIRMAN. The steel companies that fabricate are only in a few lines? Mr. WEIR. Yes. The CHAIRMAN. I will ask some questions on that later. Mr. WILLIS. We have had considerable testimony here from independent fabricators complaining very bitterly that the steel companies, through their subsidiaries, were their competitors, and that in the matter of getting supplies they were at a disadvantage because they had to obtain their raw materials from their competitors. When times are hard and supplies are short, there is an inclination on the part of the steel companies to feed the material to subsidiaries rather than in equal proportion to independent fabricators. We have had such testimony here. Mr. WEIR. We sell to a lot of fabricators, of course, but in lines that, I think, the other companies don't touch. Some of them probably do. I don't know. It wouldn't have any effect on prices that we quote them, because, as I say, we are trying to keep these people in business because they are customers of ours. Mr. WILLIS. I understand that thoroughly. The point is that you do not discriminate in price between your various customers. Now, a witness here that preceded you some days ago testified, and I quote [reading]: In our case the problem of supply was further complicated by the refusal of several of our suppliers to sell us steel at all. This can be illustrated by the following: (1) We placed a large portion of our steel orders with the Weirton Steel Co., of West Virginia. After the war they sold us very little steel and finally refused to sell us any at all. Mr. WEIR. I think there was one case like that. They bought a commodity that we discontinued the manufacture of because we wanted to make more tin plate. We thought it was in more serious demand than that particular line of product. We had been telling these people, for probably 2 years before that, that that would come about; we intended doing it.1 1 (The following letter regarding this portion of Mr. Weir's testimony was subsequently received by the subcommittee :) L. O. KOVEN & BRO., INC., Jersey City 7, N. J., May 11, 1950. Congressman EMANUEL CELLER, House of Representatives, United States, Subcommittee on Study of Monopoly Power, Hon. CONGRESSMAN E. CELLER: I wish to thank you for sending me the transcript of the questioning of Mr. Weir in connection with my testimony. I believe that his comments were substantially correct. Naturally, he did not point out to you that the margin of profit on the tin plate is considerably higher than that on hot-rolled steel. He also did not answer the question of what is to become of his former customers in a market where supply is allocated when he cuts off their source of supply. As per your request, I am returning under separate cover the original transcript which you sent me. Sincerely yours, L. O. KOVEN & BRO., INC., Mr. WILLIS. That is all, Mr. Chairman. The CHAIRMAN. Mr. Weir Mr. WEIR. There was one case of that kind, and I have sort of looked into it, but I have not got a final report on it yet. But that is as I understand it. The CHAIRMAN. Mr. Weir, Mr. Fairless, of the United States Steel Corp., in answer to a question said that his corporation fabricates thousands of end products. I have before a partial list of their products. This is from the annual report for 1945, United States Steel Corp. Let me read this into the record: PARTIAL LIST OF PRODUCTS Appliances and household equipment.-Enameling, stainless, and other steel sheets for refrigerators, stoves, kitchen cabinets, washing machines, ironers, kitchenware, bathroom equipment, household and office furniture and fixtures. Galvanized and black sheets for garbage cans, trash cans, washtubs, pails, and other household ware. Spring wire for bedsprings, mattresses, and upholstered furniture. Garden tools. Wire clotheslines. Door springs. Steel tubing for various types of metal furniture. Pipe for awning frames and yard equipment. Seamless tubing for refrigerators and appliances. Bedstead tubing. Stainless steel for television cones. Building and construction.-Structural shapes, plates, and steel bearing piles for bridges, buildings, and similar structures. Steel sheet piling for retaining walls and cofferdams. Concrete reinforcing bars. Bridge flooring and cables. Culverts and sectional plates and corrugated or smooth sheets for culverts. Formed steel roofing and siding sheets for buildings. Hot and cold rolled strip and sheets for air-conditioning ducts, furnaces, and other heating equipment. Enameling sheets for porcelain enamel finish and trim. Stainless steel for architectural trim and related uses. Nails, spikes, staples, and tacks. Conduit, electrical wires and cables. Elevator, crane, and shovel rope. Wire fabric for concrete and stucco reinforcement. Telephone and telegraph wire. Wire screen and hardware cloth. Chain-link property-protection fence. Aerial tramways. Seamless pipe piles for foundation and construction work. Pipe for plumbing and heating. Portland cement and special cements for buildings, highways, and other construction uses. Fabricated structural-steel buildings, bridges, stadiums, tanks, towers, dam gates and valves, penstocks, and other structures. Manufactured homes. Transportation.-Rails, switches, crossings, and track accessories for railroadtrack construction. Locomotive side frames. Stainless and high-strength steels and wheels and axles for railroad and street-railway cars. Structural shapes, plates, sheets, and strip for freight- and passenger-car construction. Electrical wires for control signals and lights. Spring wire, rail bonds, and other wires and cables for railroad use. Seamless pipe for locomotive and train lines. Airbrake and signal pipe. Cold rolled strip and sheets for automobile bodies and parts. Carbon and alloy steel bars and special sections for automobile engines, transmissions, chassis, and other parts. Stainless steel for decorative trim uses. Special wire for tire beading and for heavy-duty tire cord. Axles, axle housings, and torque tubes. Tubes for steering columns. Alloy steel bars and seamless alloy steel tubing for aircraft frames, engines, and landing gear. Aircraft control cables and stitching wire. Plates, shapes, and poles and booms. Railing and deck piping. Power piping, fuel lines, bilge and ballast lines. Lighters, barges, and hulls for dredges. Agriculture.-Carbon and alloy bars, shapes, plates, sheets and strip, pipe and tubing for agricultural machinery such as harvesters, combines, plows, and other farm equipment. Water-supply lines and well casing. Formed roofing and siding sheets for farm buildings. Galvanized sheets and strip for silos, grain bins, brooder houses, and other farm structures. Wire bale and cotton ties. Woven wire fencing, netting, barbed wire, steel fence posts and gates. Welded fabric for pens. Diesel engines for farm use. Agricultural basic slag, limestone, and ammonium sulfate. Machinery and industrial uses.—Bars, shapes, plates, sheets, and strip for electrical and other machinery. Plates for boilers and pressure vessels. Special alloy steels for machine tools and related industrial equipment. Free-machining MX bar stock for screw-machine products. Stainless steel for food processing, chemical, paper, and textile equipment and machinery. Electrical wires and cables for motors and turbines. Wire rope for cranes and hoists. Welded mesh for machine guards. Welding and strapping wire. Wire tying equipment. Chainlink conveyor belting. Bookbinding and stitching wire. Mechanical tubing for machinery, tool parts, and equipment. Superheater tubes, boiler tubes, condenser and heat-exchanger tubes. Still tubes and high pressure piping. Pressure vessels. Commercial forging. Electrical furnaces. Cement kilns. Coal chemicals for the plastic, solvent, synthetic-rubber, wood-preserving, and a number of other chemical industries. Petroleum.-Oil country goods in the form of drill pipe, casing, and tubing. Large-diameter expanded pipe. Line pipe and gathering lines for long-distance transportation of petroleum products. Structural shapes for oil-field derricks. Plates for oil and gas storage tanks. Stainless steel for refinery vessels and equipment. Alloy steels for drilling tools. Wire rope for drilling and other oil-field operations. Ol-well cement. Storage tanks; liquefied petroleum gas cylinders and spheres; drilling engines and machinery; feed controls; hoists; traveling and crown blocks; sucker and pull rods; slush, oil, and subsurface pumps; central pumping units for operating a number of wells from a single power source; portable pumps; swivels; packers; bits; slips; elevators; hoses; valves; and other specially designed equipment used in oil and gas fields. Mining and quarrying.-Plates, shapes, bars, and sheets for mine tipples, hoists, and fan houses. Steel timbers and jacks for mine roof supports. Light rails, steel ties, and track accessories for mines and quarries. Mine cars. Plate linings and grinding balls for ball and tube mills. Wire rope and cable for hoisting and other mine and quarry uses. Heavy-duty electrical wires and cables for trolley wires. Pipe for pump and drain lines, processing, and water supply. Containers.-Tin, terne, and black plate for cans and closures. Sheets for shipping pails, steel barrels, and drums. Slack and tight barrel hoops. Steel drums, containers, cylinders, and shipping containers. Your company does not make all those products? Mr. WEIR. No, sir. As I say, we have a long list of fabricators to whom we can sell. Mr. WILSON. May I ask a question right there, Mr. Chairman? Mr. WILSON. Do you think it ought to be against the law for anybody else to be in the business of fabricating steel? Mr. WEIR. As I said in the beginning, I have had that feeling about that; it is something that we decided a long time ago; it is a matter of judgment with each company. I don't want to answer that. Mr. WILLIS. I will ask this question, sir. In your statement, in refuting the argument as to the setting of prices, you said that the fabricator sets the price and the steel company does not set the price. I asked you the question I did to show that, if the fabricators are in a position to set price, they would be in that position now. I was just using your own argument. Mr. WEIR. The fabricator really doesn't set the price; we set the price. Mr. WILLIS. That is what you state at page 811 in your testimony. Mr. WEIR. What I mean was that the fabricators eventually will work it down to where there is about one price in steel. Steel is a very important commodity. It is an amazing thing. If somebody in the steel industry makes a change in price, it is all through the steel industry before noon if it has been made that morning, the information coming from the customer. Mr. WILLIS. I want the record to show that I was not talking about the legality or illegality of entering into these fields. I was pointing out that, according to your own testimony, apparently steel companies going into the fabrication of these items at least are in a closer position to control price than you have advanced in your statement. Mr. WEIR. That is the point. If they control all the fabrication, maybe they can do that. I say they control a very small percentage as a total. Mr. WILLIS. I wasn't quarreling with you, sir. I just wanted to know your philosophy as to how far they should go. Mr. WEIR. Yes. Mr. WILLIS. You say now if they go the whole hog they would be in that position. I wanted your experience, and I see that you have much of it along that line. Mr. WEIR. I don't think they could do that. If they went the whole hog and took up all the fabricators there would be no fabricators, and what would we do? I am quite sure we would not go into the fabricating business. I think we would still continue to feel the same way. The CHAIRMAN. Mr. Weir, I am going to give you a statement of facts which was testified to by a number of fabricators, one from Indiana, two from California where, when the price of steel was increased, the price for the steel which was established was, naturally, increased to the customers of the United States Steel Corp., but the end product, the price of the end product, the fabricator's product, was not increased in price by the subsidiary of United States Steel, which was also a fabricator and competitor of the fabricating customers of United States Steel. Would you say that was fair? Mr. WEIR. Well, I don't see how the fabricator could pay a higher price and not be able to raise his selling price. That goes without saving, Mr. Celler. The CHAIRMAN. That was the result. Mr. WEIR. There may have been some delay about it. I never heard of that. Mr. McCULLOCH. Mr. Chairman, wasn't the very point that Mr. Weir has just made brought out by Mr. Fairless or one of the executives of United States Steel Corp., that there was some delay in the subsidiary of the United States Steel raising its price to the customer, but within 3 months, as I recall, the price was raised by reason of the fact that there was a price study and adjustment under consideration at that very time. That is my memory of the record. The CHAIRMAN. There was some explanation about the raise, but it was not in an equivalent amount; later on, subsequently. So that the time element was important, and many of these fabricators on the west coast and in Indiana as a result lost their customers, because they could not compete with the subsidiaries of United States Steel which were competitors of the fabricators. And, of course, those situations are found to arise where a concern like United States Steel, a supplier of its customers, becomes, in turn through a subsidiary, a competitor of its customers. Mr. WEIR. There may be a delay about it. There might have been a delay about it, because there are thousands and thousands of these articles. The CHAIRMAN. It wasn't only a delay. When the raise came afterward it was not as much as the raise that was directed toward the fabricators. There is where the difficulty arose. Mr. Weir, you say on page 803 of your statement: The fact that the corporation has 32 percent of total ingot capacity is frequently given as support for the claim that it dominates the steel industry. Of course, the converse must be true. 96347-50-ser. 14, pt. 4a-53 Does that tell the whole story, give the complete picture as to the potency and power of the United States Steel Corp.? What I mean is, does not the United States Steel dominate in other semifinished and finished products? For example, United States Steel is first of all companies not only in the manufacture of ingots and blooms and billets, it is first in the manufacture of blanks or pierced billets for seamless tubes; it is first in the manufacture of wire rods; it is second in the manufacture of skelp; it is first in the manufacture of structural shapes and rolled steel; it is second in the manufacture of bars for concrete reinforcement; it is first in hot rolled bars other than concrete reinforcement; it is second in sheets, cold-rolled galvanized; it is first in plates; first in strip, cold-rolled and galvanized; first in black tin and tin-plate; it is first in hot-rolled sheets; it is first in hot-rolled strip; it is first in strip; first in buttwell pipe; first in galvanized pipe; first in seamless pipe and tube; second in the manufacture of conduit; second in boiler tubes; second in mechanical tubing; first in plain and galvanized wire; first in wire products; first in rails; first in joint and spliced bars and tire plates, tie-plate; first in wheels, axles, rolled; first in hoops; cotton ties; baling band. So that although they make 32 percent, say, of the total ingot capacity, they have a very vast percentage in the manufacturing capacity to manufacture all of these products I have mentioned. Mr. WEIR. Well, in practically all of them there is a big production against them on the part of the other 68 percent. The CHAIRMAN. The percentages, in many of these instances, is very large percentagewise, in comparison of the total industry. For that reason, when we say simply 32 percent of the total ingot capacity, I don't think we give the full picture of the potency of the United States Steel Corp. Mr. WEIR. Well, they produce these products, but in practically all of them they have a large competition. I mean, they wouldn't be able to set up a price on their own. The CHAIRMAN. They are, nonetheless, first and second in amount of those articles I have mentioned, which are common, and which are sold by them and others. Mr. WEIR. For instance, in bars, there are a great number of producers of bars, and big tonnages of plates. We produce something like over 20 percent of the sheets produced. The CHAIRMAN. Mr. Weir, on page 803 you make this statement: Those who itch to bring the steel industry under Government control always rely on certain hardy perennials to prove that the industry is a monopoly and, therefore, noncompetitive. I want to state that I personally-and I am not speaking for the other members of the committee, of course-would oppose, with all the power within me, Mr. Weir, Government control of the steel industry. I want to make that clear. I hope you understand that. Mr. WEIR. I would certainly hope so. I couldn't see how you could do anything else, Mr. Celler. I mean, the facts are such. But we know that there has been legislation proposed controlling prices and controlling industry. The CHAIRMAN. There has been legislation of all character proposed. Mr. WEIR. There has been a lot of talk about putting Government money into the building of steel plants, and so on. That certainly is |