Evening star., 1942-08-05
Steel Black Market
Charges Will Bring
Two Investigations
OPA and House Group
To Toke Action After
President Hits Situation

NEW ORLEANS. Aug. 5.-Two
investigations were promised to-
day into charges made before a
congressional subcommittee here
that a black market" in steel
existed where immediate de-
livery was made" from "bulging
warehouses scattered over the
Nation"
Price Administrator Leon Hender-
son in Washington ordered an i'm
mediate inquiry by the OPA of
charges made yesterday by Frank
Higgins. associated with his father,
A. j. Higgins, in shipbuilding here,
thai his company bought steel from
such markets at higher premiums.
Before Mr.. Hendersons order,
President Roosevelt at a Washington
press conference said he thought
persons who sold steel in such mar
kets should go to Jail and that the
charges would be investigated.
When Mr. Roosevelt said he
thought those people ought to 60 to
jail, a reporter asked, including Mr..
Higgins?"
Mr.. Roosevelt laughingly replied
that Mr.. Higgins was not included,
since he was turning States evi-
dence.
No Definition Made.
There was no definition during the
press conference of what was meant
by black market. Under Govern
ment regulations, there is a price
ceiling on carload lots of 10000
pounds of steel, and higher ceiling
on less han-carload lots. The OPA
has complained that some persons
were selling at just under carload
lots, say 39,999 pounds, to get the
higher prices. 1t has denounced such
sales as an evasion but has not re-
ferred to them as black market.
The second investigation was
promised by Chairman Peterson OF
the House subcommittee investigat-
ing the Maritime Commission can
collation. last month of the Higgins
contract to build 200 Liberty ships
because of an alleged steel shortage.
This matter of steel black
market will be fully investigated ;"
Mr.. Peterson declared.
Pursuant to Mr.. Henderson's or
der, L. E. F'razar, district OPA man.
ager; c. r. Snider, acting chief at
torney, and members of the inspec-
ton staff, attended todays commit
tee hearings in the first step of an
inquiry to determine if the steel
transaction described by Mr.. Hig-
gins violated OPA rules.
Will Call Higgins.
The committee planned to call
Frank Higgins in executive session
to question him regarding steel
warehouses with which he said his
firm hao bought steel from black
steel market with bulging ware
houses over the Nation"
I'VE got the steel from warehouses
all over the country" Mr.. Higgins
said, They know even before we
do that we1l get certain contracts
and they send us lists of what we'll
need to fill the contracts. They send
us these lists before we know what
contracts we will get"
A. j. Higgins said there was no
way of knowing what the premium
price Of such steel would be, adding
that some times the bill carried "de-
livery charges" or charges for wear
and tear on tires"
Says Market Is Well Known.
II don't see what all the excite
ment is about" he asserted. Every
one who knows anything about steel
or building knows of this market,
and of the fact that warehouses are
oulglng with steel, which is sold in
slightly less than carlots at premium
prices and the buyers priority rat
ing used to replenish the supply"
Frank Higgins told the committee
there was nothing illegal in the
transaction.
Its legal profiteering. but it's as
black as the ace of spades he said.
Adding that priority ratings were
needed but that immediate delivery
was made, whereas ne said his COM
pany could not be sure OF delivery
on specific dates on War Production
Board commitments.
Capitol Hill Repercussions.
Meanwhile the Maritime Commits
slon's action in canceling the Hlg-
gins contract to build cargo ships by
mass production methods continued
to have repercussions on Capitol
Hill. Chairman Tolan of a commit
tee investigating defense migra-
tion,' declared the incident con-
stitutes another example of the in
evitabie consequences of lack of
planning in our production effort"