Mr. FORISTEL. They have been taking anywhere from 30 to 60 days to decide whether those agreemnts should be entered into. Not longer than 60 days. I would sugest that you have your entire membership write to the Commerce Department and stress the importance to some action. We are helping now. We have been helping you. We have urged it. Mr. HAGEN. We have affiliated ourselves with the National Association of Small Business Men for the particular reason of being helped. Mr. BALLINGER. The National Association or National Federation? Mr. HAGEN. The National Federation of Small Business for the specific purpose being helped in this matter of obtaining steel. Mr. STEVENSON. Is that all? Mr. HAGEN. That is all, unless there are some questions. Mr. STEVENSON. We thank you for bringing this to our attention. We are glad we have already started to help you in this problem. Mr. HAGEN. I am very happy to have had the opportunity of saying this much. Probably if I were questioned, or sat here long enough, I could tell a lot more, but that is the general idea. Mr. DAWSON. I think your story pretty well ties in with the pattern we have picked up all over the country. The questioning would be about the same, would it not, Mr. Chairman? Mr. STEVENSON. That is right. Mr. HAGEN. I think I can add this: We are faced with dissolution unless we can find some other means of increasing our sale, unless we can get the metal for the duct work. You can see it, it is so obvious. Mr. STEVENSON. We thank you. (Witness excused.) Mr. STEVENSON. Are there any other gentlemen who would like to testify? STATEMENT OF G. T. McSHARRY ON BEHALF OF EIGHT, INC. Mr. BALLINGER. State your name. Mr. McSHARRY. My name is G. T. McSharry. I am manager of Eight, Inc. Our business is supplying sheet metal in this part of the country. What I would like to say is an elaboration on what Mr. Hagen has testified. We do not sell furnaces. We sell sheet metal only. The biggest field for our metal is in the sheet metal industry, largely as duct work for furnaces. Up until a very short time ago, we, as well as some other dealers similar to ourselves, were able to alleviate Mr. Hagen's problem to some extent by independent supplying dealers of furnaces as well as other dealers with metal, but as of the 1st of October of this year, we who formerly had a definite contract, subject to 90-day dissolution with a metals company, had been getting a carload of aluminum a month, which alleviated the situation somewhat, but now they have canceled our contract. After October we will no longer be able to supply aluminum. Aluminum was widely used because it was good and light. Mr. Hagen's position, I can guarantee, will be very much more serious in October unless alleviation is found. Also, as an independent dealer in metals, having no connection with furnaces or with the ultimate use of the metal, have found the same situation to exist in connection with flat galvanized sheet iron and so forth. I placed an order with the manufacturer and the order is returned, saying they can only honor orders from their old customers that they had before the war. Obviously, we were not in existence before the war so we cannot buy any. We are out in the cold as far as iron is concerned. Now, we are about to be out in the cold as far as aluminum is concerned. Here is another situation that developed some days ago, on August 25, to be exact. We represented the Crucible Steel Co. in the sale of stainless steel sheets that we were able to get. We had favorable contracts and on a regular distributor's commission. As of August 25, that has been discontinued. Now, there is no stainless steel available to us unless we buy 10,000 pounds of a gage which means we would have to have an average inventory of $150,000 in order to but it at a price at which we can make a profit, while the whole potential market in this area for all we distributors is about $90,000 a year. We would have to maintain a stock of about $165,000 a year in order to buy at a price at which we can make a profit, because the steel industry discontinued discounting to their distributors of stainless steel. Mr. DAWSON. Do you have any black market on sheet steel in this area? Mr. McSHARRY. I have not found any in this area, although I was offered 20 tons out of Los Angeles of flat black iron at 13 cents a pound, f. o. b. Los Angeles. I was not interested in that because that is obviously black market, and by the time I bought it and added a profit, it would be very black. However, one of my customers needed some of this and I put him in contact with the situation. He followed through on it and by the time he got to them the price had gone up to 18 cents, f. o. b., Los Angeles. The proper price at the mill would be 6.70 cents, f. o. b., Salt Lake. They were offering it at 18 cents, Los Angeles. Mr. BALLINGER. Have you found any black market, Mr. Hagen? Mr. HAGEN. Only on piping, not on steel, and that just in small bundles, not in any great qualities. Mr. VALENTINE. May I say that while I was in Denver during the past week I called one of my jobbers and he told me he was compelled to pay 19 cents a pound for galvanized iron in carload lots. He bought two carloads to supply commitments he had. The regular price is about 7 cents. Mr. HAGEN. I hear every day of dealers paying exorbitant prices in order to complete jobs, or else they take a loss on their jobs. They are not even making wages. Mr. STEVENSON. If we go into the black-market situation, we are going into something. Mr. HILL. Some time ago, through Mr. Foristel, we went into some of this black-market operation. I put in the Congressional Record two advertisements. One was from Belgium and the other from Sweden, advertising to deliver black-market pipe, I believe, into the United States. Their date of delivery was September and October of this year and in shipload lots. Mr. DAWSON. And probably some of our steel. Mr. HILL. There was not anything hidden. The name of the company was right in the advertising in the New York Times. Mr. DAWSON. I would like to inquire of some member of the committee how much steel we are exporting this year. Mr. FORISTEL. Six million six hundred thousand tons. Mr. HILL. It is not supposed to be over 10 percent of our output. Mr. DAWSON. What percentage of that is under the Marshall plan and going over there free of charge? Mr. FORISTEL. Just about all of it. Mr. DAWSON. About 600,000 tons? Mr. FORISTEL. Six million six hundred thousand tons per year, 10 percent of our total production. Our total production will run about 64,000,000 tons of finished steel. Mr. DAWSON. Has any effort been made by this committee to exercise his powers under the export-license law to stop that steel from going over there? Mr. STEVENSON. Not only this committee but every Republican in Congress has tried to induce the President to do something. Mr. HILL. We had a few Democrats to help us, too. Mr. STEVENSON. That is right; a few Democrats helped, but we could not get him to move. Mr. HILL. Only in one direction. (Witness excused.) Mr. STEVENSON. Yes. Salt Lake City is closed. If there is nothing further the hearing at (Whereupon, at 12: 15 p. m., the hearing was closed.) 83019-49-12 MONOPOLISTIC AND UNFAIR TRADE PRACTICES WEDNESDAY, SEPTEMBER 15, 1948 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE No. 2 oF THE SELECT COMMITTEE ON SMALL BUSINESS, Kansas City, Mo. The subcommittee met in the United States district court room, Federal Courthouse Building, Kansas City, Mo., at 9 a. m., the Honorable Walter Ploeser (chairman) presiding. Present: Representatives Walter Ploeaser (chairman) presiding, Cole, Scrivner, Reeves, Bell. Also present: James V. Foristel, executive director, and Willis J. Ballinger, economic counsel. Chairman PLOESER. The committee will come to order. May I explain that this is the fourth of a series of planned and scheduled hearings of 12 on a subject which interests small business, namely, unfair trade practices and monopolistic tendencies. The previous meetings have been held at Butte, Mont.; Casper, Wyo.; Salt Lake City, Utah, and, as I stated, this is the fourth. The committee goes from here to Omaha, then to Minneapolis, Minn.; Madison, Wis.; South Bend, Ind.; Detroit, Mich., then into Kentucky, Oklahoma, and Texas. We want these small-business people to come and tell us their problems, as they understand them. It is the intent and purpose of the committee to be helpful in every way that we can. If the present laws are not sufficient to guarantee the freedom of the economy and opportunity for the successful life of small enterprise, then it is our job to find that out and to make whatever remedial changes may be required. This committee was created by the Congress for the purpose of serving the smaller entities of commerce in America. In that sense it is probably a prejudiced committee. Small business is one particular group which this committee fathers, if you please. The purpose of the committee in being here is to be friendly. We are not out trying to probe into anyone's lives. We are trying to learn the problems and if in some way we can help solve them, that is our intent and purpose. So we want you to feel perfectly free to state your problems before the committee. Mr. Ballinger, you may proceed. 171 |