Study of Monopoly Power

of the Clayton Law remain applicable as to all combinations which are not organized solely for the business of exporting to foreign nations. The business of exporting to the Philippine Islands, to Puerto Rico, or to Hawaii, seems clearly to be domestic and not foreign trade, and the provisions of the Sherman Law and Section 7 of the Clayton Law seem to continue in force as to any Association or export corporation which engages in such business."

Furthermore, the Solicitor of the Department of Commerce in a ruling published in Commerce Reports, August 30, 1918, states that "in my opinion the Act of April 10, 1918, (Webb Act) does not apply to associations whose business may be confined to within the United States and its territorial possessions, such as the Philippines, Puerto Rico, Hawaii and Alaska."

EXHIBIT S-90

BRITISH IRON AND STEEL FEDERATION

AMERICA

The American Representatives, Mr. Bash and Mr. Mundle, arrived in England two weeks ago, and have had three meetings with Mr. Elliot on the subject of the U. S. A. participating in the Cartel Agreement.

The following is the general basis on which the Americans are prepared to negotiate:

1. The Americans cannot accept rigid export quotas based on their performance in 1934. They are, however, prepared to accept them as basis quotas if a reasonable margin is allowed up to which they may exceed without penalty, assuming they are able to do so within the normal price regulation, and without being required to quote protective prices: should their deliveries fall below the basis quotas normal compensation would be payable to them. By “protective prices" it is understood that the Americans would observe such price differentials as may normally be agreed, but that they would not be asked to afford protection, as provided for in the EIA/UK agreement, in order to adjust the statistical position between Groups.

2. Since the preponderating American share of Canadian Imports on a number of products might, in the event of a real recovery in Canada, altogether swamp their general quotas, they require liberty to exceed their basis quotas through sales in that market without any upper limit, thus providing the margin allowed for in (1) above.

3. In view of their expectation that the products of wide Strip Mills, which at present exist only in America, will tend to displace a number of other forms of steel products, and will create many new demands, a reasonable margin must be provided in their products to enable them to meet this anticipated demand without penalty.

The details which the Americans propose are as follows:

A. SEMIS, HOOP AND STRIP, WIRE RODS

As shown on the attached Schedule the American 1934 basis quotas are:

1 A special provision is required for Canada under which the Americans supply the total Canadian Imports of Skelp (Tube Strip) except for 5,000 tons per annum.

A separate arrangement will be made within this category for baling and barrel hoops, based on 1934 quotas with some latitude for the Americans, who ask for suggestions from the British Group.

They suggest liberty to exceed their plate quota up to 8% without penalty. On Joists and Merchant Bars they require liberty to exceed by sales in the Canadian market without upper limit as long as their sales in markets other than Canada do not exceed the 1934 basis quota.

C. SHEETS

The American 1934 basis quotas are approximately: Black

Galvanized

They suggest liberty to exceed without penalty up to: Black

Galvanized

14%

15%

19%

18%

The Americans find it impossible to obtain figures of defective Skelp, Sheet Bars, Bar Slabs, and such other material as Plate cuttings, Bar and Structural ends, etc., since their Trade Returns class all this material as "Scrap." They suggest, therefore that these items should be completely excluded from the Agreement.

The Americans also make the reservation that no penalty shall be applicable to them if they go into excess as a result of other groups being unable to deliver under the agreement.

17/2/37.

EXHIBIT S-90A

Steel exports in 1934-E. I. A. to markets other than cartel countries and U. K. and U. S. A. and U. K. to all markets

EXHIBIT S-90B

Steel exports for the 12 months ending 31.7.1936-E. I. A. to markets other than cartel countries and U. K. and U. S. A. and U. K. to all markets

Steel exports—Annual rate based on 5 months August to December 1936—E. I. A. to markets other than cartel countries and U. K.—U. S. A. and U. K. to all markets