Democratic Sentinel, Volume 17, Number 2, Rensselaer, Jasper County, 27 January 1893 — The Steel Rail Trust. [ARTICLE]

The Steel Rail Trust.

The policy of the i powerful combination of the manufacturers of steel rails has at last caused a considerable quantity of rails to be imported, in spite of the heavy ’ tariff duty. The Iron Age of the 22d ult. reports the sale of 10,000 tons of foreign rails to be delivered at Seattle for use on the Pacific coast. The price of such rails at Liverpool, free-on board, is now $19.44 per ton. The duty is $13.44. and the ocean freight charges must make the total cost-at Seattle about S4O.

The conditions which permit these rails to be imported profitably are exceptional. There are no rail factories west of the Rocky Mountains, and there is only one small one west of Chicago. Consequently, the cost of domestic rails to consumers on the Pacific Slope is largely increased by the overland freight charges. It would not pay to import rails for use on lines this side of the Rocky Mountains, for foreign rails cannpt he laid down qt this port, duty paid, for less than $36 per. ton; but the high cost of transportation, added to the high price exacted by the combination, makes it possible now for railroad companies whose lines are near the Pacific coast to save something by bringing rails from Europe by water. If prices were determined here by competition, even the high cost of overland transportation would not prevent the purchaseof domestic rails for use on the Pacific coast. But for for more than two years the domestic manufacturers, under the shelter of a duty which is 69 per cent of the selling price of foreign rails in Liverpool, have suppressed competition and have exacted a uniform price of S3O per ton at the Eastern $32.50 at the Illinois mills. In the meantime the cost of their raw material has beem reduced by $3 to $4 per ton', but the effect of the combination agreement has been to deprive consumers of any benefit on this account. This is one -©tf the most familiar examples of the manner in which a trust ora similar combination uses a high-tarilf duty as an “instrument of extortion, ” aaa the words applied to this process by the New York Tribune in an unguarded utterance. The duty is three and one-half times the difference between the labor cost here and the lapor-oost abroad, as shown clearly by Mr. Harrison’s Commissioner of Labor, and the manufacturers seized upon it as an instrument that would enable them to exact huge profits from the people, for it is upon the poo,pie that the cost of railroad equipment finally falls. The price was s® fixed by the combination that Importations for any pirt of the country except the Pacific coast would be unprofitable, am cl not until mow has it been profitable to import for roads there, for ittoe quantity of rails imported is aho«wm by the Treasury reports to have been only 433 tons in the last two years- for the whole country. A jcduction of the combination price is mow predicted.