Montana labor news., 1937-10-28
MARKET COLLAPSE
hUGURy OFFENSIVE
AGAINST LABOR
By ELIOT JANEWAY

The collapse in the stock market
is the prelude to a general offensive
against the new wage standards
established by labor under the New
Deal
How the panic in Wall Street was
in good part precipitated by the
rapid decline in the rate of steel pro-
duction, this column made clear in
earlier weeks. Now, after the panic
has blown over, recovery is still
faced with the crucial problem of re-
viving steel production if the current
slump is not to grow into a full
fledged depression.
But the problem of steeTs future
has been turned by steePs customers
into a problem of steel prices. And
the steel companies, in turn, are JUS
tifying the exorbitant prices they are
demanding by pointing to the fanil-
lar bogey of high wages.
Principal, indeed sole, present Gus
toner of the industry are the auto
makers; and the auto industry is the
one basic industry which, despite its
recent price boost has yet to feel
the slump
The auto companies, however, are
one and all holding off on their steel
buying for the 1888 assembly year
currently under way. They have de-
manded sharp price reductions and,
after being refused, they have re-
duced their orders to the barest pos
sible minimum. Such steel as they
have bought has come from the
smaller companies which, it is be-
lieved in the trade, have paid for
the consideration shown them with
price rebates. Ford particularly has
made no secret of his dissatisfaction
with the steel price structure, and
his recent $45,O00,O00 plant expan-
sion program is intended to accom-
plish one long-sought Ford objective,
and one only, namely, to make him
so per cent independent of the steel
industry.
Other industries, faced with de-
clining orders and production, have
of course lowered prices. The metal
and textile industries are two timely
cases in point. The price of copper
was boosted to II cents a pound at
the time of the great price initiation
last spring, but when copper con
sumption fell off this autumn, the
great mining combines cut the price
to IL cents without a word about
the need to cut wages in metal mines
and refineries.
That the steel industry will also
have to lower its prices is conceded.
What remains to be seen is whether
steel will be able to use the newt
able price cuts as an excuse for
slashing wages.
Steel's assertion that the current
price level was made necessary by
wage increases is simply untrue. The
spring wage increases raised the la
Dor cost per ton of steel by only
$3.50. But the industry used this
Jas pretext for advancing prices by
well over So a ton. And, allowing
for increased costs of all kinds (ac-
tually compensated for by the in
creased volume of steel production,
which is itself potent cost-cutting
factor), the profit margin of the in
dustry on each ton of steel produced
rose by about 65 cents in spite Of
the wage advances. Prices can come
down considerably without any
necessity for wage cuts.
The average price of finished steel,
at 2.605 cents a pound, is well over
the 1929 high of 2.317 cents. The
steel industry can certainly afford
to go back to 1929 prices levels. If
it does, steel orders will come in
again, and recovery will be able to
60 forward. But if Girdlerism and
Weirism take over the helm of the
entire industry, and if a concerted
attack begins on the dearly-won
wage levels of basic industry No. /,
more than industry's precious labor
peace" will be jeopardized.
AS ever, the community of inter
est between labor and the nation as
a whole will assert itself and, if
labor suffers, recovery will newt
ably end to the irreparable loss of
the American people. And as ever,
the full responsibility for such
catastrophe will rest upon the shoul-
ders of labor's implacable enemies,
the masters Of steel and iron.