The Waterbury Democrat., 1938-08-06

partment.
 It has just finishcd . hearing on which depends not only the earnings of several million workers but perhaps the November elec- tons.
 Nominaliy, the board will rule only on the prevailing wage scale for common labor in the steel in- dustry. Actually. that b only one- part of the picture. Behind the scenes is the dramatic life-and- death struggle between the great steel operators. Tn fact, this is the real root of the wage dispute. Here is the background of the crisis:
 Between the years 1029-33 the so-calIed Little Steel" corpora uons--InIand, Bethlehem, Na- tionaI, Republic, Otis--modern- ized plants with the continuous strip mill process and undersold U. s. Steel. For years under the late Judge Gary, U. S. Steel had dominated the industry, but now Little Steer wrcsted away large hunks of Big steeI's" market.
 When Myron Taylor, now U. 8. envoy to the Refugee Conference, took command of U. 8. Steel, however, he launched a vast pro- gram of modernization; SO that when he retired last year the cor- poration had the most modern plants in the world. and had been decentralized to meet every con- ceivable competition from the in- dependents.
 With its plants strategically lo- cated in Birmingham, Chicago and Pittsburgh, Big Steel" was ready to go after Little gteep and recapture its markets.
 The Attack
 First move in this campaign was the price cut announced by U. 8. Steel last spring.
 This was a competitive attack in every sense of the word. Beth lehcm, whose Eugene Grace is the real brains of Little Steel" had indicated plans for a moderate price cut. U. s. Steel immediate ly answered the challenge.
 It not only undercut Bethle- hem's proposed cut but even more important, wiped out the long g-standing regional price dif- ferentials under which steel, no matetr where purchased, was aI- ways priced r. Q. E. Pittsburgh.
 This move was one of the most revolutionary in the history of the steel industry.
 What 1t meant was that by one stroke U. s. Steel. through its strategically located plants, once again dominated the markets of these key industrial areas.
 No longer could the independ- ents. bulwareed by the "Pitts- burgh Plus" price system. compete freely with U. 8. Steel in the South and West. Henceforth when they attempted to sell in these rapidly expanding manufac- turing sections, they had to meet price competition plus freight costs practically insurmountable com- bination.
 U. g. Steel had declared war with vengeance.
 CIO Counter-M0ves
 The answer of the independ- en1 was to start agitation for a wage cut.
 Under the leadership of Taylor, U. 8. Steel had made industrial history by entering into a con- tract with the 0. I. o. The inde- pcndents, at the cost of much blood and money. successfully re- sisted the unionization of their plants. But they had had to raise teir pay scales to the Big Steel" level.
 It was at this point that the 0. I. o. entered the arena and by surprise flank attack brought the federal government squarcly into the fierce conflict.
 CIO strategy was the use Of the Walsh-H -Healy Act which set up the Public Contracts Board with power to ike prevailing wage scales on government work. The CIO went before the Board and formally demanded that 1t fix steel wages.
 AS h large portion of current steel output is under government contract. the pay rates fixed by the board automatically will apply to all steel production.
 Today the prevailing wage in all areas. except the Atlantic coast where Bethlehem domin- ates, is 62N cents an hour. The Bethlehem rate Is 58M cents.
 So c. I. O. asked the Contracts Board to make the e2H cent rate universal and that Bethlehem be required to accept 1t. The unions argument was that by allowing fha nAeSArn u,nAa AtffAe-