became a significant problem, employment at this plant has fallen from 1,755 people to 1,340, a loss of 400 jobs. It urges that the company's efforts to meet foreign competition—

not be handicapped by giving foreign competition the unfair advantage of knowing our most intimate cost secrets.

Mr. Patton, have you offered for the record the Bethlehem Steel figures?

Mr. PATTON. I do not believe I gave the figures in the plant.

Senator KEATING. I do not mean to interfere with Senator McClellan.

Mr. PATTON. I can do it very quickly, sir.

Senator KEATING. Is the memorandum which you have in your hand suitable for introduction in the record?

Mr. PATTON. If you would care to.

Senator KEATING. That deals with the loss of jobs.

Mr. PATTON. Yes, it does.

Senator KEATING. In both your plant in New York State and the New England States

Mr. PATTON. Yes, in the Bethlehem plant.

Senator KEATING. Then I would ask that those two matters be made a part of the record.

The CHAIRMAN. They will be.

(The memorandum and telegram referred to are as follows:)

RESPONSE TO SENATOR KEATING'S REQUEST

In the New England-New York market area, served by New York State steel plants, there was an increase in imports of steel mill products of 345,000 net tons in 1961 over 1955. This is equivalent to full-time employment for more than 2,900 steelworkers for an entire year. At current rates the payroll and employee benefits for these 2,900 steelworks would total over $23 million annually.

The Colorado Fuel & Iron Corp., which operates at Buffalo the largest steel wire plant in the State of New York, respectfully urges that submission of steel production costs pursuant to the subpenas issued by the Subcommittee on Antitrust and Monopoly would greatly endanger employment in the Buffalo area. You have already heard testimony concerning the seriousness of foreign steel competition and the unfair advantage which foreign steel mills would enjoy if they were permitted access to traditionally secret production costs. We vigorously endorse that testimony. Steel wire such as we manufacture at Buffalo is one of the product groups which has been subjected to the most severe foreign competition. Although it is not possible to determine with mathematical precision the exact direct or indirect effect of foreign competition on employment

it is significant to note that average employment at our Buffalo plant was 1,755 in 1956 before foreign competition was a major factor. By June 30, 1962, when the effects of foreign competition were being felt employment had dropped to 1,340, a loss of more than 400 jobs. This loss in jobs affects the prosperity of hundreds of local businesses which serve our employees and is thus magnified manifold throughout the Buffalo community.

Today the jobs of the remaining 1,340 employees at our Buffalo plant are entirely dependent upon our ability to sell wire products in the face of increasing foreign competition. We are making every effort to meet that challenge and we urge that we not be handicapped by giving foreign competitors the unfair advantage of knowing our most intimate cost secrets. The situation at our Buffalo plant is repeated at our major plants and mines in seven other States and is typical of the problem throughout the steel industry.

Although the Colorado Fuel & Iron Corp. is not one of the four companies which are formally contesting the subpenas, we have a vital stake in the outcome of this matter. We have not joined in formally contesting the subpena which we received only because we feel that the issue is adequately raised by the test cases of the four companies which are already before you and because it appears that intervention of additional companies would serve merely to complicate the procedures and thus to delay a prompt decision on the question. Pending resolution of the test cases we have not submitted data pursuant to the subpena but we will be forced to do so if the final decision in the test case requires compliance.

We urgently solicit your assistance. If you deem it appropriate I will appreciate inclusion of the text of the telegram in the record of the steel hearings of the Judiciary Committee.

Respectfully yours,

LEONARD C. ROSE, President, Colorado Fuel & Iron Corp.

Senator MCCLELLAN. Mr. Chairman, I have just three or four questions so that I may have facts that I think I need for consideration. This may already be in the record, but if so, I would like you to state again how many different steel companies are there in the United States producing steel that would be affected or be involved in this issue?

Mr. PATTON. Twelve were subpenaed here, but there are in the neighborhood of, to the best of my recollection, about 90 steel companies in the country.

Senator MCCLELLAN. You mean 90 companies actually producing and manufacturing steel?

Mr. PATTON. In some form or other, that is my understanding, yes, sir.

Senator MCCLELLAN. The 12 that were subpenaed I suppose are the major companies?

Mr. PATTON. That is my understanding, sir.

Senator MCCLELLAN. Now then, which company-I do not care particularly for the name, I suppose it is United States Steel-which of the companies produce the most? First I will ask you what is the overall production in this country now.

Mr. PATTON. The overall production last year, sir, was roughly 98 million ingot tons, and it is anticipated, at least in our own company, that substantially the same tonnage will be produced this year.

Senator MCCLELLAN. All right, let me ask you then what is the total capacity? You say it is only running at about 50 percent of capacity.

What is the total steel capacity of this country?

Mr. PATTON. We have not had capacity figures as such for the last 2 years, but I would judge that the capacity of the country today is in the neighborhood of 160 million ingot tons.

Senator MCCLELLAN. Now how much of the present production or last year's production was produced by the company producing the most percentagewise?

Mr. PATTON. I would not be in a position to answer that. I would think that that would be the United States Steel Corp.

Senator MCCLELLAN. I would think so though I do not know.

Mr. PATTON. And I would have to look at their annual report, sir, to see what they produced, but that figure is a public figure that is available in their annual report.

Senator MCCLELLAN. I am sure these figures are available. I would like to have in the record at this point the total production which you have given of say 98 million tons last year, the 12 major companies, the names of the 12 major companies producing steel, the percentage of that total that each one of them produced, and then the percentage, the remaining percentage produced by all others.

Now there has just been handed me by counsel for the subcommittee, a memorandum showing that United States Steel produced 28 percent and that it was the largest producer.

Mr. PATTON. I would expect that to be the fact, yes, sir.

Senator MCCLELLAN. It had 28 percent of the total capacity in the United States. And then it goes on down, Bethlehem was next with 15 percent, Republic, yourself, I believe was 8 percent plus.

Mr. PATTON. Yes, sir.

Senator MCCLELLAN. Jones & Laughlin 5 plus, National 4 plus, Armco, 4 plus, Youngstown, 4 plus, Inland, 4, and then the others are all smaller. He advises me that these are the 12 companies subpenaed. Senator KEFAUVER. Yes.

Senator MCCLELLAN. They have a total capacity of 82 percent of the total capacity of production in the United States. Now I do not know this. Can you add to this, giving us the percentage of capacity of each of these 12 companies, that they have, then give us the percentage of the total production of last year that each one of them produced, and supply that for the record at this point. My though, that these figures will rather clearly indicate that there is no steel monopoly in this country unless there is agreement between the different steel companies with respect to selling price, because certainly there is no monopoly in production and no monopoly in capacity.

There can only be monopoly, it seems to me, in restraint of trade if these companies get together and undertake to fix a price. I may be wrong, but I thought this is important here if we are studying monop

olies.

(Subsequently, the following material was received for insertion in the record :)

At the hearing on September 14, in answer to a question by Senator McClellan (at p. 120-A of the transcript), Mr. Patton stated that there were to the best of his knowledge 90 steel companies in the United States. The facts are that the iron and steeel industry in the United States in 1961 consisted of 85 producers of raw steel for ingots and castings.

At page 122 of the transcript Senator McClellan asked Mr. Patton to furnish for the record the names of the 12 major companies producing steel, the total amount produced by each of them and by the entire industry in 1961, the percentage of that total produced by each one of those 12 and the percentage produced by all others.

At page 123 of the transcript Senator McClellan asked for similar information with regard to capacity.

Attached hereto as schedule A is a table giving the information requested at page 122 and attached hereto as schedule B is a table giving the information requested at page 123.

Source: The foregoing information has been derived principally from the annual reports of the named steel companies. The figure for "All other" has been calculated by subtracting the total figures for those 12 companies from the industry totals as published by American Iron & Steel Institute in its Annual Statistical Report, 1961.

SCHEDULE B

Capacity of U.S. steel industry in 1960 (steel for ingots and castings)

Source: "Annual Capacities of Coke Ovens, Blast Furnaces, and Steelmaking Furnaces," published as of Jan. 1, 1960, by American Iron & Steel Institute.

Senator MCCLELLAN. Now let me ask you one other thing. Do you, as President, or does your company know, let us say, the cost of production of these other 11 companies?

Mr. PATTON. We certainly do not.

Senator MCCLELLAN. Do you exchange that information? Is that a professional or industrial courtesy that each competitor extends to the other, telling how cheap we can prduce this and we have found a method of cutting here and so forth? Do you get all that information from each other?

Mr. PATTON. No, sir; we do not exchange that information.

Senator KEATING. There is no such courtesy between you fellows, is there?

Mr. PATTON. Each one is out to get all the business he can.

Senator MCCLELLAN. Of course, I can appreciate if Republic develops some technique of making better steel and making it cheaper, it might be some advantage to your competitors to share it with you. Does no proper ethics in business suggest that when you spend your money and develop something like that that you share it with your competitors?

Mr. PATTON. If we find something that we think is advantageous to us, it will be awfully difficult to get us to share it with any competitor that we are trying to compete with.

(At this point in the proceedings Senator Scott left the hearing room.)

Senator MCCLELLAN. In other words, competition means just that, that if you can develop something better you are entitled to the benefits from it.

Mr. PATTON. We certainly are. Unless we get a patent and they are willing to pay us a fee for using that approach.

Senator MCCLELLAN. Does that apply also to your foreign competitors?

Do you know their costs of production?

Mr. PATTON. We do not, sir.

Senator MCCLELLAN. And in England, I believe they cannot give it to you without committing a crime?

Mr. PATTON. That is right, sir.

Senator MCCLELLAN. Have you any way of getting their costs of production comparable to what is happening here to give them the benefit of your costs of production?

Mr. PATTON. We do not.

Senator MCCLELLAN. In other words, you contend that if you are compelled to make these disclosures that are requested here by the committee even though they may be grouped, that you will actually be compelled to give information to your competitor that your competitor can use to your adverse advantage.

Mr. PATTON. That is exactly our position, sir.

Senator MCCLELLAN. Now, tell me how your competitor is going to be able to take any information that is developed here by your giving your cost records and so forth to this committee. How can they take that and utilize it to an advantage for them and to a disadvantage to you and to the steel industry in this country?

Mr. PATTON. Let me give you an illustration. Take the case of concrete bars that was mentioned here. If they know what the cost to Republic of making concrete bars is, and there is a big job up, they know that Republic will not, if it is going to survive, be able to quote on that job at a price less than its cost. So they will know that if they come in and quote a price somewhat less than our cost, they are very likely to take that job away from us.

Senator MCCLELLAN. In other words, they are able to better anticipate what you are compelled to bid?

Mr. PATTON. Yes, sir.

Senator MCCLELLAN. And if they know that you are going to try to place a bid so at least you won't lose money, you hope you may make