Evening star., 1938-01-22
BY JOHN C. HENRY.

BY JOHN C. HENRY.
Benjamin F. Fairless, president Of
the United States Steel Corp, in
formed the Senate Unemployment
Committee today that his company
plans expenditure of at least s80,o00.-
900 on plant modernization during
1898.
OF this sum- Mr. Fairless stated in
a letter read to the committee, about
100000 will be expended before
April /, with the remainder being used
during the second and third quarters
Of the year.
I'm addition" Mr.. Fairless' letter
said, 'if business conditions warrant,
there will be. undoubtedly. other ex-
penditures in considerable amounts
during 1888"
To Complete Huge Program.
Mr.. Fairless, prevented by illness
from appearing in person, wrote that
the contemplated expenditures would
complete a $3.50 100000 program au-
thorized in 1888
For the industry as whole, Walter
S. Tower. executive secretary Of the
American Iron and Steel Institute. tes-
titled that:
In the three years 1935-1937. ap-
proximately s65O,0o00 900 was spent by
companies in the iron and steel in
dustry for new plants and equipment.
OF the total amount spent by the in
dustry for new equipment and con-
struction during the past three years.
$500 100000 was spent in 1887; about
S216,000.00O in 1886 and sl40,000,000
in 1885,
Remarking on the dependence of
steel upon industries which buy from
it. Mr. Fairless indorsed efforts
to stimulate the durable goods in
dustries and housing construction. By
implication, also, he approved current
efforts of the railroads to obtain added
revenue by increasing rates.
The railroads have been out Of
the steel market for long period"
the steel executive wrote. Their
properties need in maintenance large
supplies of steel products. Without
money. the railroads cannot buy. They
must find the financial means to meet
their current maintenance expenses.
Housing Program Benefits.
Although there will be little direct
benefit to the steel industry in an en-
larged and proper housing program,
the benefit in the broad economic sense
to industry as whole should be great"
| There is some indication of some
present improvement" he added.
principally, as I view it now, in the
replenishing of stocks of material re-
quired by reason of the dimunition of
inventory stocks-a buying for imme-
diate necessities"
Touching on the question Of price
structure, Mr.. Fairless informed the
committee there are many views that
have been expressed
1T is clear that prices cannot be
reduced without a corresponding re-
duction in costs, of which wages is
the most important part"
Mr.. Fairless' company Is operating
under a wage contract with the Steel
|
affiliate of the Committee for Indus
trial Organization. The present con-
tract expires at the end of February
Mr.. Faidless wrote that export trade
in steel is holding up, but specified
that There is no indication of any
relation between the subsidiary COM
panies' export business and armament
preparations in European countries
and Japan"
Slight Pickup in Operation.
Mr.. Tower testified that there has
been a slight pickup in steel opera
tions in January from below 20 per
cent to 29.8 per cent of capacity.
Indications are for at least a mod
crate measure of further improvement
during the early months of the year."
he said.
Steel wages and employment were
at record high in 1887. Mr.. Tower
said under questioning. he admitted
that a 81 per cent increase In labor
costs alone would not justify the price
increase of 81 per cent in steel pro-
duced.
Mr.. Tower conceded the merit Of a
program of Government construction
planned to coincide with declines in
private work, but would not agree
that the steel industry might likewise
integrate its modernization plans to
spend most in slack times.
II would think that executives
would hesitate to sit around and
plan as you suggest" he said, "for
fear they might be charged with
agreeing on other things"
VERY timid about violating the
antitrust laws, aren't they?" Senator
Murray, Democrat, Of Montana OBJ
served.
| Alarm Called "Hysterical."
Describing as "hysterical' the alarm
which greeted the mild recession Of
private construction activity" Thomas
S. Holden, vice president Of the F.
w. Dodge Corp, said it was merely
the dissipation of false expectations
of a speculative housing BOOM"
| Mr.. Holden discounted estimates Of
great housing needs, saying that short.
age exists only for those Of low In.
(see UNEARI 0YMENT. Page A-l3.)