Date of Award:

1950

Document Type:

Thesis

Degree Name:

Master of Science (MS)

Department:

Economics and Finance

Advisor/Chair:

W. Swardass

Abstract

The production of iron in America began in a limited area east of the Aleghenies, centered around Philadelphia, which was also a principal port of entry for foreign iron. As early as 1750, pricing was done on a rudimentary basing point structure. Apparently, all prices on domestic iron were quoted on a Philadelphia base and were higher in the outlying territory where the iron was actually made. The manufacturers absorbed freight in order to move their iron to the central market, where it competed with foreign iron. This study will be confined to a discussion of the possible implications of the abandonment of the basing point system of pricing by the steel industry in Utah. For purposes of comparison, a rather detailed discussion of the basing point system will be included, and to clarify the present legal status of delivered pricing, some court history will be summarized. Without doubt, a new pricing policy in the steel industry will have some rather far reaching effects, both on other industries and upon the economy of this region. These possible effects will be discussed. The abandonment of the basing point system of pricing by the steel industry creates many problems as to the adjustments which will be necessary under the new pricing systems. It will be the aim of this sutdy to ascertain the possible nature and extent of these adjustments, and their effect, both upon the Utah steel industry and upon the economy of this area. Since the abandonment of basing point pricing is a rather recent development, this thesis, of necessity, will be in the nature of a prediction as to some of the possible economic implications of this action.

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