Big Steel Buys a Plum

The West Coast last week quietly celebrated the marriage of the world's biggest steel company to the nation's largest surplus plant. And it had the blessing of Attorney General Tom C. Clark. U.S. Steel Corp. bought the $190 million Geneva Steel plant for $47,500,000. Big Steel will sink another $25 million in expanding its western subsidiary, Columbia Steel, along with $18.6 million in Geneva itself.

In this way the Administration, which has posed as the foe of bigness in business, settled one of the hottest politico-economic questions of the year in favor of bigness.

The issue boiled down to this: Should Geneva go to a subsidy-free private operator, i.e., Big Steel, with the overtones of monopoly this entailed, or to a small company dependent on some kind of Government subsidy? Tom Clark held that, since U.S. Steel and Geneva together will produce only 32.7% of the nation's steel capacity, the combination cannot be called monopolistic.

But inside the Department of Justice there were murmurs of indignant disagreement. Now Big Steel and Bethlehem Steel will control about 45% of the nation's capacity, 75% of the West Coast's supply. They have the power to exclude and control West Coast competition if they wish. Their position is roughly the same as that of the Big Three of tobacco (TIME, June 24) which the Supreme Court held were a monopoly.

In the far West itself, reaction was largely of the wait-&-see variety. General Manager Louis Lundberg of the San Francisco Chamber of Commerce commented: "In the long run the West Coast will have more abundant steel and finally cheaper steel." But Denver Post Editor E. Palmer Hoyt came closer to what was in the public mind. Said he: ". . . Westerners now should back the Attorney General with watchfulness against any attempt at monopolistic practices."

In short, if the monopoly in theory becomes a monopoly in fact, and the West does not get cheaper steel, it will be Tom Clark's fault.

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