Evening star. [volume] (Washington, D.C.) 1854-1972, 1945-12-12
Steel Strike Call Seen
As Answer to Lewis

AS Answer to Lewis
Industry to Bear Cost of Stoppass
After New Year, Says Writer
By Dapid Laurence
When CLIO President Philip Murray
sets January IA rs tho date for q strike
In the steel, aluminium and iron ore in
dustr1es. he answers curiously enough a
point made by John L. Lewis, who ar
gued that automobile employers could
make more money by stopping produce
ton than by manufacturing cars.
The point. Of course, relates to excess
profits taxes which apply to the year
1855 earnings, but not to 1855. During
1S45 the rate OF taxes Is 50 high that
the Government in many instances gets
30 per cent Of the profits and hence
bears 10 per cent OF any losses
Beginning January 1, however, the ex-
cess profts tax goes on the statute
books, and, since the corporation rate is
about 40 per cent, the Government
thereafter bears only 40 per cent of the
losses and industry bears go per cent.
Thus the accusation, 30 often express
sed in labor circles and repeated by
John L. Lewis, will vanish into thin air
in few weeks, and the Nation will find
that. so far rs bearing the expenses of
work stoppages are concerned, industry
Is on the heavy end and certainly there
will be no financial reason for manage
ment to tolerate deadlocks In wage ne.
gotiations.
Example Of Irresponsibility.
The Nation has not yet walked up to
the true nature Of the labor crisis. The
employer group thinks, to be sure, 1t has
the labor unions in tight spot and that
If the strikes are prolonged labor Will
have to yield. Union officials, on the
other hand, especially in the larger or
CARNATIONS, are preparing for q long
battle and feel they cannot yield Hence
the spectacle Of two big economic groups
fighting their battles while the Ameri-
can people wait for 'reconversion to be-
gin Is tragic example Of irresponsi-
bility on every side and particularly will
this be true of Congress II 1t remains
indifferent.
Even 30 mild 4 legislative proposal ~
fact-nnding-which merely endeavors
to tell the public the truth about the
strike controversies bitterly opposed
by labor union leaders and by some
management spokesman. In other
words. the labor union view is that the
American people are not to be permitted
to get at the facts to make up their
own minds and the issues must not DO
investigated by impartial bodies.
What do the labor unions fear? An
exposure Of the inside OF their politics
and their claims? And do the man.
agement groups fear that perhaps 1t
will be discovered that some can pay
increased wages?
Small Industry to Suffer.
There is grave danger, on the other
hand, that in the melee some innocent
employers, especially in smaller bust
nesses will suffer Take, for instance,
the businessman in a certain segment
OF the steel industry who writes this
correspondent:
The unions, variously, are demand
Ing 80 per cent increase in pay or 81
per day or Is cents an hour. Such
an advance in wage rates would In
crease our annual outlay for wages APP
proximately $685., 900. II half the wage
increase were granted now, 1t would
result in an outlay Of $492, 500.
"On the basis of annual sales OF ST.
500, 900, IN per cent increase in price
would yield $685., 500. Deduct. If you
please, the increased wage bill OF 1922
500 from the s5625oo increase in sales
price and you have 4 gain Of 10000.
The gain does not allow anything
for increases in cost Of raw and other
materials. services, etc. Other COM
panies from whom we buy, increasing
prices, soon would wipe out the theo-
retical gain OF $4,000 and leave us
with heavy loss.
Companies that are earning a good
profit at the moment might be able to
stand an imposition of the higher rates
with higher prices, but those with small
margins, those breaking even and those
currently showing losses, would DO
sunk"
The foregoing is an interesting ex-
ample of the consequences of industry
wide bargaining with no allowance or
difIerential for the smaller company.
In the. end, If this course is persisted
in. the smaller company goes out Of
business, employment Is decreased and
the well-paved road to depression be-
gins to be travelled by suppliers as well
as service employees.
A fact-flnding tribunal might bring
out the truth about such cases and en-
able the Nation to benefit by the con-
tinued operation Of these small busi-
nesses. Clearly the American people
are in the dark as to the facts of the
labor crisis, and if the labor and man
agement partisans have their way, the
darkness will be continued while the
public interest suffers.
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