Board of Youngstown Sheet & Tube Company and no officer or director of Youngstown Sheet & Tube is a director of Cleveland-Cliffs or any of its subsidiaries. Mr. S. L. Mather who was a director of Lake Superior & Ishpeming Railroad Company at the time the chart was introduced in evidence is no longer a director of that railroad.

Cleveland-Cliffs owns no stock of National City Bank of Cleveland, Ohio, the tame of which appears on such chart and has no director on its Board. The Cart seems to imply a tie-in between the two which does not exist. As previously stated, it is submitted that the implications drawn from such chart without explanation are grossly misleading.

I also wish to emphasize what I touched upon in my testimony, that when the Board of Directors of The Cleveland-Cliffs Iron Company meets, the directors consider an act upon the business affairs of The Cleveland-Cliffs Iron Company, not the business affairs of the steel companies. Further, as I pointed out in my testimony, The Cleveland-Cliffs Iron Company which sells iron ore, not iron and steel products, is not in competition with any of the steel companies mentioned, which are engaged in the sale of iron and steel products, not iron ore, and therefore, such directors are not considering the business matters of competing concerns and, further, as I stated in my testimony, this matter has been fully gone into with the Department of Justice. Many of the Cleveland-Cliffs directors are directors of numerous other companies, such as insurance companies, railroads, manufacturing concerns, etc., which are not in competition with Cleveland-Cliffs. Many of such directors individually are directors of several business concerns. It is submitted that this is a situation that exists in many corporations, large and small. It is further submittted that it should be the concern of the antitrust laws to prevent restraints upon competition, not to provide restraints upon the selection of directors who by reason of their business judgment and ability are selected as directors by numerous business concerns. It is respectfully submitted that an act of Congress designed to prevent two individuals who happen to be directors of competing concerns from sitting on the Board of a third company which is not in competition with either of the other two would not be an act to prevent restraints of competition, but an act to restrain an individual business in the selection of its directors. Such directors might also be members of the Boards of Trustees or Directors of charitable institutions, clubs, educational institutions, Chambers of Commerce, business association, etc. They might also be good friends and occasionally lunch together, meet at social functions or otherwise come in contact with each other. It is respectfully submitted that any effort to restrain directors of competing concerns from coming in contact with one another under conditions not directly involving consideration of competition between such concerns would not be effected by legislation directed at keeping them off the boards of companies not competing with such other companies on which they are then directors and that legislation going to the extent of preventing them from ever coming in contact with each other, however legitimate the purpose, would be an absurdity.

I also wish to call your attention to the following inaccuracies in the chart: On the left side of the chart there is a statement “holds about 10% of stock” without any explanation. According to information furnished to us in connection with the Cleveland-Cliffs proxy statement by Mr. Cyrus Eaton, Chairman of the Board of Directors and President of Portsmouth Steel Corporation, Portsmouth Steel does own beneficially, but does not hold, about 10% of the common stock of The Cleveland-Cliffs Iron Company, but owns or holds none of the company's preferred stock.

Jones, Day, Cockley & Reavis are shown on the chart as attorneys for Portsmonth Steel Corporation. I am advised by that firm that they ceased to be attorneys for Portsmouth Steel Corporation more than a year ago.

The chart states that The Cleveland-Cliffs Iron Company owned 6,361 shares of preferred stock and 74,247 shares of common stock of Jones & Laughlin. As of the time the chart was introduced into the record, Cleveland-Cliffs owned 4141 shares of preferred stock and 77,959 shares of common stock of Jones & Laughlin. Also the chart states that J. W. Reavis is a partner and director, but does not indicate of what firms or corporation. Mr. Reavis is a partner in the firm of Jones, Day, Cockley & Reavis and is a director of Jones & Laughlin. He is not a director of Cleveland-Cliffs.

The chart indicates that Mr. William G. Mather is a director and Honorary Chairman, but does not indicate the company referred to. Mr. Mather is

Honorary Chairman of Cleveland-Cliffs, an honorary position without responsibilities or compensation created by the Board of Directors of Cleveland-Cliffs. He has not been a director of Cleveland-Cliffs since April 1947. He is not and never has been Honorary Chairman of Republic Steel Corporation and has not been a director of Republic Steel Corporation since May 1950 when, because of advanced age, he asked not to be re-elected. The number of shares of common stock owned by Cleveland-Cliffs in Republic Steel Corporation is stated on the chart to be 391,416, whereas the number of such shares owned by ClevelandCliffs at the time the chart was introduced was 373,114.

The chart states that Cleveland-Cliffs owned 1,429 preferred shares of Wheeling Steel Corporation. All of such preferred shares had been sold and were no longer owned by Cleveland-Cliffs at the time the chart was introduced in evidence.

I appreciate your providing me with an opportunity to comment upon the enclosed chart. I request that this letter be placed upon the record of the hearings before such Special Subcommittee, together wtih such chart, at the place in the record where such chart appears.

Very truly yours,

J. H. KERR, Secretary.

EXHIBIT S-207

ADDITIONAL STATEMENT OF SENATOR ARTHUR V. WATKINS-PORTION OF MINORITY REPORT OF THE JOINT COMMITTEE ON THE ECONOMIC REPORT HEARINGS ON DECEMBER 1949 STEEL PRICE INCREASES-RE: ACQUISITION OF GENEVA STEEL PLANT

Even though I heartily endorse the minority report which comments briefly on the reference in the majority report to the purchase of the Geneva, Utah, steel plant by the United States Steel Corp., I feel impelled to make additional comments on that stiuation as well as on some other aspects of the majority report.

I am at a loss to understand why the purchase of the Geneva steel plant was brought into the discussion at all. There seems to have been no reference to it in the testimony before the committee. If the majority had in mind that it emphasizes the bigness of the United States Steel Corp., and its alleged influence in determining for the industry future price of steel productions, I think they have spoken without evidence to support the claim.

The price paid for Geneva steel plant was $47,500,000. United States Steel Corp. also pledged that it would, in the event of the acceptance of its bid, use $18,600,000 additional of its own funds for the peacetime conversion of the plant. It is a matter of record that the corporation has kept its part of the agreement. In fact, it has gone far beyond the sum pledged for the conversion of the plant facilities.

Under the Surplus Property Act, the Surplus Board was set up to recommend to Congress a policy for the disposal of the property owned by the Government that was declared surplus and that the Government would want to sell. In the fall of 1945, Mr. Fairless, president of the United States Steel Corp., addressed a letter to the Defense Plant Corporation that had supervised the building of the Geneva steel plant, saying that the steel corporation was ready to discuss the purchase or lease of the Geneva steel plant when it was no longer needed for war production.

Some members of the War Surplus Board expressed opposition to the disposal of the Geneva plant to the United States Steel Corp.

In August 1945 the steel corporation wrote to the Defense Plant Corporation: "After full consideration of the whole situation, including the various problems which seem to be involved in the attempt to establish Geneva mill after the war as a sound and successful commercial enterprise, the directors of the United States Steel Corp. have decided that no further action to acquire the Geneva plant be taken.

This action of the United States Steel Corp. brought deep disappointment to the people of the Intermountain and Pacific Coast States. There began then in this section a concerted movement which in fact took on the proportions of a crusade to get the United States Steel Corp. to reconsider and offer a bid for Geneva. Chambers of commerce, trade associations, labor organizations, civic groups,

church leaders, and the press in general made strong pleas to the steel corporation to reconsider its refusal to bid on Geneva.

It was reported at the time that even the President of the United States interceded with the steel corporation. Numerous United States officials added their urging to the voices of the West. In Utah the movement was led by the Governor and all members of the Utah congressional delegation (all Democrats) and substantially all civic organizations of the State joined in. In fact, the western feeling was almost universal that only a strong company, with ample resources and the know-how, could take over and successfuly operate a plant as huge as Geneva.

It should be remembered also that the economists of the country had predicted that immediately following the end of hostilities in World War II, there would be a great deal of unemployment and that in general business would have a slump. There was also considerable speculation on the ability of the West to absorb the output of a plant as large as Geneva. In fact, a number of experts had predicted that the plant could not operate successfully because of its distance from heavy consumers of steel. In other words, whether or not Geneva could be a success being so far away from markets was considered highly speculative. In view of this over-all situation, the statement in the majority report that the United States Steel Corp. was "allowed" to purchase certain Government plants is anything but expressive of the real situation. It goes far beyond being merely amusing to the people of Utah and the West generally.

The fact is that the United States Steel Corp. was really "dragged" into the bidding. When the bids were open, it was the only bidder who made a firm offer of its own money; it was, in every respect, far and away the best bid. About this time the Surplus Property Administrator made the following statement (this was before a joint committee of the two Houses of Congress): "The Surplus Property Administration feels that the best company to purchase this plant will be the United States Steel Corp. We believe that they may be the only company in the steel industry that can carry on this operation unless the Government subsidizes."

And then later the War Assets Administration, which was given the responsibility of disposal of surplus war property, made this comment in accepting the bid:

"It will foster the development in the West of new independent enterprise. The operation of the Geneva steel plant as a part of the integrated operations of the United States Steel Corp, should tend to foster the development of the steel-consuming manufacturing plants in the Western States."

And, in addition, the Attorney General of the United States, who was required by the Surplus Property Disposal Act to investigate any possibility of a monopoly being created by the disposal of surplus war plants, added his approval to the sale of Geneva to the United States Steel Corp.

It should be added that at the time, the United States Steel Corp. announced that it would make Geneva a basing point for the purpose of pricing steel. What happened as a result of this pledge and of the taking over of the mammoth plant is a matter of history that should be well known to the committee and certainly to the chairman who represents the State of Wyoming.

But our memories are short, so I think it is well worth repeating, even though I follow the majority precedent and go outside the hearing record for the facts. Here's what happened to steel prices in the West:

Prices for steel plates and structural shapes (the only kind of steel produced at that time at Geneva) were set in May 1948 at the same level as at Chicago, Pittsburgh, and Birmingham where the country's lowest prices for steel prevail. This action resulted in a reduction in the delivered price of steel plates which amounted, for example, at Salt Lake City, Utah, of $19.16 per ton, and to $18.54 per ton at Ogden, Utah; $14.02 at Pocatello, Idaho; $12.36 at Boise, Idaho; $12.36 at Reno, Nev.; $7.50 at Eugene, Oreg.; $10.30 at Spokane, Wash.; $6.64 at Sacramento; $3.64 at Los Angeles; and $3.44 at San Francisco, Calif., points. Reduction in structural steel followed the same pattern.