It was reported that the American Group were unwilling to accept the Committee's recommendation in regard to SOUTH AFRICA (i. e. that Gazette prices should be quoted until further notice) while Proclamations Nos. 1335 and 218 continue in force. It was resolved that the Committee adhere to their previous Minute and that the Comptoir be asked to examine this matter further and report to this Committee. It was reported that the American group do not agree to the British Group's differential in CANADA being increased from 10 cents to 20 cents per 100 lbs. The British Group stated that they already had authority from the Comptoir, which had jurisdiction in this matter, and that they therefore proposed to act on that authority. It was resolved that the Minute of the previous meeting be confirmed and that the American Group be requested to adhere, in accordance with the agreement, to the prices agreed with the Comptoir. TUBE STRIP It was reported that as a special arrangement already exists between the Cartel and the American Group in regard to CANADA the Cartel desired that an arrangement should now be settled in regard to the OTHER MARKETS. On behalf of the British Group a request was made that full particulars of the existing arrangement in regard to Canada be furnished to this Committee. This was agreed and further consideration was deferred until the next meeting. OTHER HOOP AND STRIP (HOT ROLLED) The Committee noted the terms of the memorandum which had been received from the Cartel in regard to the acceptance of an order in EGYPT at £13.10.0 per ton as discussed at the previous meeting. In regard to the Cartel's request for full protection from the American Group in Egypt, the American representative reported that he had received a cable to the effect that his Group would adhere to the price of £13.10.0 per ton but could not protect it. A suggestion was reported from the Cartel that as the American Group's tonnage in Hoop and Strip refers almost exclusively to Canada, the arrangement with the Americans should be broken up into one agreement for CANADA and one agreement for the whole of the OTHER MARKETS. It was agreed that this matter was not within the competence of the London Committee and that it be referred to the Groups for consideration. MERCHANT BARS It was reported that in regard to the EUROPEAN MARKETS the American Group, instead of withdrawing, were prepared to protect the Cartel's quotations. On the understanding that this meant that the American Group were prepared to protect the official Cartel prices, it was resolved that this suggestion be agreed to on the same basis as had been decided for Plates, i. e., that the prices be fixed by the Comptoir and protected by the American Group while they are in excess and that the Comptoir quote such prices as would meet outside competition, the advice of the American Group being welcome on all occasions as to the price level which would meet outside competition. It was reported that the American Group wished NORTH CHINA, KOREA, MANCHUKUO AND JAPAN to be free from quota control, penalties and bonuses and free as regards prices. It was agreed that the American suggestion was without the powers of the London Committee. The Committee reaffirmed (the American representative dissenting) the decision which they had made at the previous meeting, and the matter was referred to the Joint Coordinating Committee. It was agreed that ALL MARKETS EXCEPT EUROPE should be covered by the decision at the previous meeting that the American Group should propose prices and that the other Groups should have the right to quote 7/6d, gold (12/6d, sterling) per ton below these prices as the differential between open hearth quality and Thomas quality so long as the American Group are in excess. It was agreed that the question of principle of the differential be left over for further discussion. SEMIS The American representative stated that his Group were prepared to advise the Cartel as to the price necessary to eliminate nonmembers in the EUROPEAN MARKETS, and he confirmed that his Group accepted for this market the Minute of the previous meeting, i. e. that the American Group would refrain from quoting except with the permission of the Comptoir. It was reported that the American Group wished NORTH CHIna, Korea, MANCHUKUO AND JAPAN to be free from quota control, penalties and bonuses and as regards prices. It was agreed that the American suggestion was without the powers of the London Committee. The Committee reaffirmed (the American representative dissenting) the decision which they had made at the previous meeting, and the matter was referred to the Joint Co-ordinating Committee. In regard to GREECE the E. I. A. representative urged that the American Group should not supply Semis to D. & A. Starianos of Piraeus and to Caravanos and Papoulias, but the American representative stated that his Group were unable to agree to this, for if they refused to quote, the business would go to outsiders. SHAPES (JOISTS, CHANNELS, AND BROAD FLANGED BEAMS) It was reported that the American Group wished NORTH CHINA, KOREA, MANCHUKUO AND JAPAN to be free from quota control, penalties and bonuses and as regards prices. It was agreed that the American suggestion was without the powers of the London Committee. The Committee reaffirmed (the American representative dissenting) the decision which they had made at the previous meeting, and the matter was referred to the Joint Co-ordinating Committee. It was agreed that ALL MARKETS EXCEPT EUROPE should be covered by the decision at the previous meeting that the American Group should propose prices and that the other Groups should have the right to quote 7/6d. gold (12/6d. sterling) per ton below these prices as the differential between open hearth quality and Thomas quality so long as the American Group are in excess. It was agreed that the question of principle of the differential be left over for further discussion. WIRE RODS The Committee considered certain points raised by the Comptoir arising out of the Minutes of the previous meeting: (a) American Group's right to underquote In regard to the suggestion of the Comptoir that the Committee's recommendation that the American Group be permitted to underquote 10/- sterling per ton while in deficit was too rigid, it was agreed that this was intended only to be a general recommendation. (b) Fighting prices It was agreed that the authorisations of fighting prices should be given to the American Group while they are in deficit. (c) Extra charge for quality The American representative stated that his Group were prepared to apply extra for quality only when they are in excess. (d) Responsibility for American outsiders The American representative stated that he was unable to agree the Comptoir's statement that the American outsiders had 66% of the total cross-Atlantic exports, and he was asked to look into the matter and enquire into the Department of Commerce figures on which the statement was based. In regard to GREECE the E. I. A. representative urged that the American Group should not supply Wire Rods to D. & A. Stavrianos of Piraeus and to Caravanos and papoulias, but the American representative stated that his Group were unable to agree to this, for if they refuse to quote, the business would go to outsiders. (a) Statistics SHEETS On behalf of the Comptoir it was stated that it had always been clearly understood between the parties to the agreement that the actual 1934 and 1936 tonnages should form the quota basis, but that the American representative now maintained that he had been of the view that the American maximum rights had been definitely fixed at 20% for Black and 15.4% for Galvanized. The Comptoir pointed out that the principle that the 1934 and 1936 figures would be the basis had been recorded in many instances, and in this connection reference was made to a letter from Mr. Elliot to Mr. Todd of the 18th October 1938 in which it was stated that the quota percentages were approximate only and would have to be established exactly in accordance with the principles applicable thereto. It was further stated on behalf of the Comptoir that it had now been ascertained that the American Department of Commerce statistics used in respect of the reference years in the absence of the American works figures, included home trade which was not in the current statistics; the reference figures would therefore have to be brought into line with the current statistics, thus reducing the American rights both for Black and Galvanized Sheets, or alternatively the current statistics would have to be brought into line with the reference figures by including the same home trade. A further discrepancy regarding which the Comptoir required an adjustment to a common basis was that, as confirmed by the American representative, the Department of Commerce statistics included all Sheets below 4" whereas the Comptoir figures included Sheets below %'. It was remarked that this factor also accounted for an overstatement in the tonnages estimated as having been taken by American outsiders. The Committee noted the position and agreed that the matter be referred to the Joint Co-ordinating Committee. (b) Prices It was reported that the Comptoir's recommendations in regard to Black Sheet prices were that while the American Group were in excess 1. The American Groups retire from the EUROPEAN MARKETS or alternatively quote 25 cents per 100 lbs. higher in Europe. 2. The American Group increase their price to ALL OTHER COUNTRIES EXCEPT CENTRAL AMERICA to the extent necessary to make their prices 15 cents per 100 lbs. above the European c. i. f. prices. 3. As the American gauge differentials in the case of Heavy Sheets result in a greater reduction below the basis than the European differentials, the American gauge differentials be brought into line for all Sheets below 24 gauge. 4. The Comptoir meet all competition encountered at prices lower than those resulting from the application of the above principles and that they be authorised to quote what is necessary to meet this competition. The Committee noted and approved the Comptoir's suggestions in order to rectify the quota position and the American representative stated that he would pass on these recommendations to his Group for their consideration. NEXT MEETING It was agreed that the Committee's next meeting should be held the day before the next Joint Co-ordinating Committee Meeting. EXHIBIT S-99 [Private and confidential-third meeting] E. I. A./U. K./U. S. A. AGREEMENT, 20TH APRIL 1939 MINUTES OF THE MEETING OF THE LONDON COMMITTEE HELD AT STEEL HOUSE, TOTHILL STREET, WESTMINSTER, LONDON, S. W. I, ON MONDAY, 17TH APRIL 1939, AT 4 P. M. Present: Mr. R. M. Peat (In the Chair) M. H. Dieudonné, Continental Group Mr. I. F. L. Elliot, British Group In attendance: Mr. S. J. Summers Mr. V. Malcolm Mr. J. H. Lascelles British Group M. E. Conrot, Continental Group Mr. R. V. Kennard, American Group Mr. J. R. Mackay; Peat, Marwick, Mitchell & Co. CONFIRMATION OF THE MINUTES OF THE MEETING HELD ON THE 29TH MARCH 1939 The Minutes of the previous meeting, held on 29th March, were formally confirmed, and were signed by the Chairman, subject to the following amendments suggested by the British Group: PLATES The Minute in regard to CANADA (paragraphs 2 and 3 on page 8) was amended to read as follows: "It was reported that the American Group do not agree to the British Group's differential in CANADA being increased from 10 cents to 20 cents per 100 lbs. "The British Group stated that they had therefore terminated the arrangement under which British prices were agreed with the Americans for Central Canada. "It was resolved that the Minutes of the previous meeting be confirmed, and that the American Group be requested to maintain their prices 20 cents per 100 lbs. above the British price so long as the American Group were in excess." MERCHANT BARS Paragraph 2 on page 10 was amended to read as follows: "It was agreed that CENTRAL and SOUTH AMERICA (excluding the ARGENTINE), CHINA, KOREA, JAPAN and MANCHUKUO should be covered by the decision at the previous meeting that the American Group should propose prices and that the other Groups should have the right to quote 7/6d. gold (12/d. sterling) per ton below these prices as the differential between open hearth quality and Thomas quality so long as the American Group are in excess. "FOR ALL OTHER MARKETS the American group would observe the prices fixed by the Comptoirs and protect these prices so long as the American Group are in excess." SHAPES (JOISTS, CHANNELS AND BROADFLANGED BEAMS) Paragraph 4 on page 11 was amended to read in the same way as the above Minute for Merchant Bars. ARRANGEMENTS WITH THE AMERICAN GROUP-ALL PRODUCTS The Committee discussed the memorandum of proposals dated the 14th instant submitted by the American Group, together with the memorandum prepared by Mr. Elliot following his discussions with Mr. Todd in regard to these proposals. (a) The Committee agreed to recommend to the Joint Co-Ordinating Committee Mr. Elliot's suggestion that the excess/deficit figures at 28th February might be held in suspense for later consideration and that a fresh start in regard to statistics be made as at 1st March for the trial period of four months to 30th June 1939 proposed by the American Group. (b) In regard to the American proposal that the S. E. A. members should advise the London Committee of the schedule of minimum prices, by markets, considered necessary to prevent business being taken by outsiders and that members be authorised to meet any lower outsider prices which they encountered-details to be reported to the London Committee immediately in each case the British and Continental representatives expressed the view that such procedure might be applied to markets selectively. The American representaLive agreed to discuss this point further with his principals. (c) In connection with the question of debits for orders taken at fighting prices, the Committee considered Mr. Elliot's suggestion that the penalties due by the American Group as at 28th February might be used as a common Fighting Fund for such orders during the four months trial period. The American representative expressed the view that it would be illegal for his Group to partici pate in a Fighting Fund and it was therefore suggested that this position might be overcome if the matter were dealt with by say, the Cartel remitting part of the American penalties, or by the scaling down of penalties or the fixing of special penalties on orders taken at fighting prices. As it was felt that if this procedure could be applied the question of debiting such orders against quota taken did not assume the same dimensions, the matter was left open for further discussion. (d) In regard to the American proposal that separate quotas and prices should be established for "BREAKDOWNS" (which at present come under the SHEET quota) and ALLOY STEELS (which are included with MERCHANT BARS) outside the existing quotas, the Continental representative stated that he was agreeable to this, although he felt that until these separate quotas were established this business must be debited against the existing quotas, but he added that he would not press this if the other points were settled. (e) The Committee left over for further discussion the suggestion that in regard to SHEETS the American Group might be given the right to go up, without penalty, to the quota figures in which the Philippine Islands business was included. TUBE STRIP The Committee considered the special agreement between the American and Continental Groups in regard to the Canadian market. No objection was raised to this agreement on the understanding that it does not upset the main quota. OTHER HOOP AND STRIP (HOT ROLLED) In regard to the query raised by the Comptoir as to the limit of the American Group's responsibility for tonnage taken by an outsider, the Committee confirmed that the American responsibility was limited to 15% of the S. E. A. members' shipments in the event of these shipments being below the members' rights. SEMIS The American representative stated that his Group were unable to agree to the Cartel's request that they should not quote to Ung. Staatliche Eisen-und Maschinenfabriken Budapest, on account of these works being in keen competition with the E. I. A. in finished products, as his Group felt that such a course would benefit the American outsiders. The matter was referred to the Joint Co-Ordinating Committee. WIRE RODS The Committee considered the report which had been received by the Comptoir in regard to the Committee's decisions at their previous meeting. (a) American Group's right to underquote It was noted that the Comptoir had not seen fit to accept the London Committee's decision that the American Group should be protected and the matter was therefore referred to the Joint Co-Ordinating Committee. (b) Fighting prices In regard to the point raised by the Comptoir that the American Group had not submitted to the Central Office any request for fighting prices, the American representative stated that it was impossible for his Group to submit individual enquiries. The Committee confirmed the previous Minute, i. e., that the authorisations of fighting prices should be given to the American Group while they are in deficit. (c) Extra charge for quality The Committee confirmed the attitude of the American Group that they could not charge extra for quality in zones of European influence unless they were in excess, and it was agreed that the Comptoir be informed that if and when they are in deficit the Committee will consider the matter further. (d) Responsibility for American outsiders The American representative stated that he was at present investigating the figures in regard to the proportion of business taken by the American outsiders and would report the matter in due course, SHEETS The American representative stated that he had not yet received the reply of his Group to the Comptoir's recommendations in regard to prices. |