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In the McClintic-Marshall-U.S. Steel rivalry is the nucleus of last week's deal. Competition between U. S. Steel and Bethlehem has lately become more intense. Steelmen are especially aware that in 1926 U. S. Steel began to manufacture solid flange beams by the so-called Gray Process, which Bethlehem controlled. A $250,000,000 patent suit followed, was settled out of court in 1929, with Bethlehem granting U. S. Steel the right to use the process. This enabled American Bridge to compete better with other fabricators who bought Bethlehem's beams in which the Gray Process was used. The competition became more visible when Bethlehem sought to acquire Youngstown Sheet & Tube, leading independent in a territory reserved for U. S. Steel by a gentleman's agreement.
For more than two months wise Pittsburghers have been aware of the imminence of last week's deal. Bethlehem officials have been seen in McClintic-Marshall's offices, lunching with McClintic-Marshall men at the Duquesne Club. Hence when the announcement was made Pittsburgh was ready to judge its significance.
To Bethlehem the deal (accomplished by issuing treasury stock and notes) means an assured outlet for structural steel. It also means that the Mellon interests, now represented on the McClintic-Marshall board by Richard Beatty Mellon, will become relatively big Bethlehem stockholders, as occurred in Pullman when it acquired Standard Steel Car Corp. No small thing is a Mellon connection. Mr. McClintic and Mr. Marshall invested in the Koppers Co., have never missed a Koppers contract. McClintic-Marshall also owns securities in Aluminum Co., gets Aluminum's business. To Pittsburgh, the deal means the passing of another close family corporation.
Mr. Marshall will be elected to the Bethlehem Board, while George Henry Blakely, vice president of Bethlehem and known for his work in developing the Gray Process beam, will head McClintic-Marshall, to be reincorporated as a wholly-owned Bethlehem unit. Included in the deal is McClintic-Marshall's investment in Steel Frame House Co., of which E. H. Millard is president and young Robert H. McClintic vice president. Steel Frame House Co. is pioneering in perfecting small beams for residential purposes.
Greatly concerned by the deal were five independent fabricating companies each of which had piously hoped to be included in the Bethlehem purchase. Last week officials of these companies held a luncheon, decided mergers are now essentially in order.