The Waterbury Democrat., 1941-04-17
16O Steel Companies Reused By Govt. Plan
Freezing of Iron, Steel Prices to Prevent Imitation,
 Will Cause Hardship, in Protest of Steel Cos.

Some of the smaller companies, said to be the hardest hit by the wage increase, were believed to have been about rady yesterday to announce price rises.
 A few hours before the price freezing order was circulated, a steel industry spokesman told ques- tioners that immediate price in- creases were urgently necessary and practically inevitable. He intimated that the small companies would move first. He estimated that the wage increase and the prospective higher cost of bituminous coal would increase steel production costs by approximately 8 a ton but did not suggest the industry ex- pected to pass the entire burden to consumers.
 Plan Is Scrapped
 Any plan smaller companies may have had to announce price in- creases was scrapped last night by Henderson's order unless individual units of the industry care to chal- lenge Henderson's authority either In the courts or before public opin- lon.
 But the price order, while insist ing that 6 general increase at this time could not reasonably be justi- fled, also acknowledged that the frozen level might be unjust to some companies and invited applications for modification in individual cases of extreme or disproportionate hardship"
 The emphasis Henderson put on the tentative nature of his price or der suggested to some observers here that 1t was hurried into effect last night to check the plans of individ- ual companies to raise prices to meet increased labor costs. He said he issued the order to prevent high CT steel prices flor the immediate present. and indicated that 1t was designed to be in effect until the government could determine the ef- feet of emergency boom time con- ditions on industry operation, pro- flts,production costs and related matters preliminary to possible change in the price level. Raise Cost of Living
 Steel price increases at this time," he said, might touch off a general increase in the cost of liv- ing and start the country off on the road to imitation. Presently the ul- timate consumer would find that he must pay more for what he buys and SO the foundation would have been laid for a dangerous upward spiral of prices in general-mean- ing, briefly, boost in the cost of living"
 But he said his order should not "be interpreted as fixing summarily a steel price ceiling for the dura- tion of the emergency or for any set period" Instead, Henderson said, the order establishes a cool ing of period during which the ef- feet of the defense program upon industry and It's cost factors may be nationally appraised"
 "This action" he continued, "also forecloses arbitrary or precipitate action on the part of any member or group of rnembes of the indus ty looking toward price boosting and 1t eliminates premiums for advance deliveries which a few companies have already begun to eract.
 We are immeoIately taking steps to resolve the prevailing uncertain ties as to cost factors production requirements and distribution, both as to defense and civilian needs. Meanwhile, prices should not be advanced.
 If facts are developed which show that an increase might be warranted, the necessary adjust ments can be made"