Evening star., 1941-04-17
Steel Firms Prepare
To Show Need for
Higher Prices
Some Means of Meeting
Increase in Labor
Costs Held VituI

B. the Associated Press.
NEW YORK, April 17.-Authorities
in the steel industry indicated today
that probably every steel manufac-
turer in the Nation was preparing
evidence to show the need of charg-
ing increased prices for some steel
products.
This activity followed the wide
spread granting of lo-cent-an-hour
wage increases and the announce
ment by Leon Henderson, Govern
ment price administrator, that steel
prices for the time being would have
to remain at their present levels.
some steel men in New York took
of labor were so heavy they would
have to obtain higher prices for
many products in order to continue
soundly economic operations.
Meantime Wall Street stock trad
ers recognized the uncomfortable sit
uation of the steel makers caught be-
tween their decision to hike wages
and the Governments's ban on price
increases.
Stocks Move Down.
The steel stocks led a quiet re-
treat in the stock exchange. getting
down from few cents to more than
81 share, but the dip appeared
checked by midafternoon and the
steels and the whole list came back
to present a mixed appearance.
One source estimated that steel
making costs, by the new labor con-
tracts, had been increased from So
to more than IS a ton.
On basis of ingot production,
1t was asserted, the steel industry
earned little more than 81 a net
ton in 1910 and only s2.54 a ton in
1889.
The minimum average cost in
crease, So a ton, was calculated on
the basis Of the requirement of 80
man hours to produce a ton of sheet
steel. At 10 cents extra an hour, the
new pay rate adds $3.50 to the
former cost. Tin plate, which re-
quires 50 man hours per ton, would
cost $500 more per ton to produce.
Running well below these averages
is the making of steel shapes, which
requires only Is man hours a ton,
or $3.50 extra.
Earnings of the Nations IS non-
integrated steel manufacturers
that is, companies which do not
own their raw materials facilities
were regarded as likely to be the
most quickly affected by the new
labor costs.
Views 10 Be Presented.
At least some of these companies,
as well as the bigger, integrated or
ganizations, were expected to pre-
sent their views of the fixing
to Washington authorities next
week.
Some trade sources. however,
pointed out that the increased labor
costs did not show the whole steel
company earnings picture.
1t was suggested, for example,
that company savings on ls41 Fed
eral excess profits taxes would
amount to about 10 per cent of their
labor payments, since the labor costs
would eat up much of the excess
profits.
There was also the fact that the
Government has frozen" the price
of scrap metal, a vital necessity to
the making of steel, thereby assist
ing the industry immensely in its
present close-to-capacity operations.
The steel industry, being the heart
OF the Nations rearmament effort.
is being given every right of priority
in its demands on raw materials and
transportation.
Industrialists say they believe it
likely that price rises may be per-
mitted by the Government for such
products as sheets and tin plate,
but they expect period Of study to
elapse before such concessions are
granted.