Mr. HODGE. No, sir; not that I know of-from warehouses, yes.

Mr. McCULLOCH. Do you know that there has been a growth of selling agencies as subsidiary corporations of producing steel companies?

Mr. HODGE. I don't know of any.

Mr. McCULLOCH. Since VJ-day?

Mr. HODGE. I don't know of any. There may be, but I don't know it. Mr. McCULLOCH. You haven't been forced to buy from any such subsidiary since VJ-day?

Mr. HODGE. No, sir.

Mr. LEVI. Mr. Hodge, would it be fair then to say that the point you are making with respect to where you buy from steel companies, they might enter into competition with you the point you are making is this; That you could buy elsewhere if they raised the price to you, and as long as they did not have a monopoly over the supply, you would not be bothered by their being in competition; is that right? Mr. HODGE. I am not sure I got the whole question.

Mr. LEVI. You would not be bothered by the fact that your supplier raises the price, and at the same time goes into competition with you, because you could go elsewhere to buy your supplies?

Mr. HODGE. I would feel free to do so.

Mr. LEVI. If you couldn't go elsewhere, then that would cause a difficulty for you, would it not?

Mr. HODGE. If I could not go elsewhere, it would cause the difficulty; but in that case I would be dealing with a steel monopoly, and I don't think we have that.

Mr. LEVI. And if the prices charged by all the suppliers went up at the same time, but the prices charged by them to these competitors of yours did not go up, you would also be in a difficult situation, would

you not?

Mr. HODGE. We would have to rely on our efficiency. We believe that we live by efficiency.

Mr. LEVI. There might be a point where your efficiency might not

be sufficient.

Mr. HODGE. That is true; but let us cite our present situation: Our worst competition, our most competitive price competition, comes from shops that are owned by the automobile companies and by socalled railroad car shops that are owned by railroads. We don't think many of them know the first thing about their costs. We have to compete with them. We are a long way from worrying about the few steel companies that are in the fabricating business.

Mr. WILSON. Then you would say that the hypothetical question does not pertain to the steel industry today?

Mr. HODGE. That is my opinion, sir.

Mr. WILSON. In other words, you can go from one steel company that is in the fabricating business, or should go into your business you can go to other companies, you have other opportunities to buy steel?

Mr. HODGE. As it is today, yes.

Mr. WILSON. And if the question asked by Mr. Levi were true, then there would be a monopoly? If one party was selling raw steel, and he engaged in unfair competition, that would be a monopoly? Mr. HODGE. That would be monopoly; yes.

Mr. LEVI. Do you know whether that is the situation today with respect to suppliers of wire springs?

Mr. HODGE. I know nothing about the wire spring business.

The CHAIRMAN. We had testimony from a Mr. Brown of Kokomo, Ind., with reference to his fabrication of springs, mechanical springswhether they were automobile springs or not, I don't know-there are many different kinds of springs, and he didn't describe the use of the springs.

Mr. McCULLOCH. They were wire springs.

Mr. HODGE. I wouldn't know about that. I don't know the spring business.

If you regulate and fix the prices of steel products, can you long avoid regulating the prices of the things that go to make steel: iron ore, limestone and coal? Can you avoid fixing the prices of things made of steel-such things as automobiles and railroad cars, and then such things as drop forgings and farm implements.

The CHAIRMAN. I would say that I would resist with all the power at my command any attempt by Congress to regulate the prices of steel or the prices of steel products.

Mr. HODGE. That is fine, sir. That is one thing that was worrying me, and one reason why I was glad you invited me down here.

The CHAIRMAN. I am sure the committee doesn't want to do that. Mr. HODGE. I will go back feeling a lot better. You know, that is what scared the life out of some of us.

The history of the OPA certainly indicates that you cannot have partial price regulation. As I recall it, the OPA, or its predecessor, commenced business by regulating the prices of only a relatively few basic commodities. In a very short time, however, it became necessary, in order to preserve the businesses so regulated, to fix the prices of the things they had to buy. One thing led to another, and before very long the governmental agency had established prices for almost everything, including mousetraps, and another governmental agency had been set up, out of sheer necessity, to fix and control wages and salaries.

Mr. DENTON. If you have an industry where the prices of everybody are almost identical, isn't that a sort of private OPA or NRA? They all go together.

Mr. HODGE. I don't think so. There are things other than price, as I tried to point out in here, that govern the selling of an order of steel or forgings.

Mr. DENTON. All that OPA and NRA did was to fix codes and rules. Mr. HODGE. That was done by law and regulation.

Mr. DENTON. One was done by the Government, and now you have an industry where all prices go up together-you spoke about these identical prices: isn't that the same thing as NRA?

Mr. HODGE. Prices are not necessarily identical. We don't have an NRA, and we don't have an OPA.

Mr. DENTON. But with the language you just used, when prices are identical, isn't that the same thing?

Mr. HODGE. But we don't have that.

Mr. DENTON. Well, assuming the statement you made back there, that all prices are identical?

Mr. HODGE. If all prices were identical, naturally-if all sales were made at identical prices, naturally, you would have it.

Mr. DENTON. You would have the same thing, then?
Mr. HODGE. Yes, sure.

Mr. DENTON. That is all.

Mr. HODGE. That succession of causes and effects was all justified by the wartime situation of the country. But, speaking as a fabricator of steel, I can see no occasion to repeat the experience in a time of peace and relative prosperity. As I have just said, it would end competition in steel manufacturing, and only a little later in steel fabrication; and-what concerns me that kind of regulation, on a permanent basis, would mark the end of the kind of industrial growth we Americans have enjoyed in the past, and the kind of opportunity we were taught to expect in any free country. I hope you will give it no serious or favorable consideration.

In closing, I want to thank you most sincerely for your courtesy today, and for this opportunity to express myself before your committee.

Mr. DENTON. Let me ask you one other question: Suppose you had the prices all the same, practically the same in all respects as the NRA and OPA, do you think that would prevent the growth of the country as we have known it today?

Mr. HODGE. I think it would.

Mr. DENTON. If that was done privately, you think that would be the effect?

Mr. HODGE. Yes; I think that any arrangement-Idon't believe in cartels, insofar as business in this country is concerned.

Mr. McCULLOCH. I understand your company was organized in 1927?

Mr. HODGE. That is correct, sir.

Mr. McCULLOCH. And was that original organization a merger of several companies, or was it a new business that was started?

Mr. HODGE. The predecessor of this company was the Pittsburgh Forgings Co. When the new company was organized, I was president of that company, but in order to arrange for the division of an estate, I organized a new company and took over the plant.

Mr. McCULLOCH. How many people did you employ at that time, approximately!

Mr. HODGE. One hundred fifty.

Mr. McCULLOCH. How many do you employ now?

Mr. HODGE. Now, we are building no railroad cars now, but I would say that we probably have 1,500. If the railroad-car plant was running, we would probably have between 2,000 and 2,500.

Mr. McCULLOCH. Did I understand you in your testimony to say that your company has been in competition with some of the subsidiaries of the United States Steel Corp.?

Mr. HODGE. Yes, sir.

Mr. McCULLOCH. And you have been able to grow, as you have indicated, over this period, in competition with that corporation? Mr. HODGE. We don't know how long it will last, but we are still here.

Mr. McCULLOCH. And have you been able to finance your company from private sources?

Mr. HODGE. Outside of about $150,000 that was raised when we organized the company. We have never sold anything publicly.

Mr. McCULLOCH. You owe the United States Government nothing? I mean, does your company owe the Government any money? Mr. HODGE. Taxes.

Mr. McCULLOCH. I mean, borrowed money.

Mr. HODGE. No, sir.

Mr. McCULLOCH. In this period since 1927, have you experienced any unlawful or unethical or discriminatory acts on the part of your major steel suppliers?

Mr. HODGE. No, sir.

Mr. McCULLOCH. That is all.

The CHAIRMAN. Are there any further questions?

Thank you very much, Mr. Hodge.

Mr. HODGE. I thank you for your attention.

The CHAIRMAN. The committee will now recess, and we hope to conclude the steel hearings on Thursday, when we will meet at 10 o'clock. The committee, however, will meet tomorrow at 10:30 to conclude consideration of the triple damages bill.

We will adjourn until tomorrow at 10:30.

(Whereupon, at 4:30 p. m., the subcommittee adjourned to reconvene (on steel hearings) at 10 a. m., Thursday, May 11, 1950.)