Evening star., 1947-09-12
Steel Is Warned
To End Abuses
0rFaceCurbs
Foirless Says Supply
And Demand Will Be
Balanced in z Years
By J. A. OLeory

HEADS OF tne dig steel COM
panies were warned today by
Senator Martin, Republican, of
Pennsylvania they may face
Government controls unless the
gray market" and other abuses
in steel distribution are checked.
Senator Martin also declared
management has no more right to
adopt "a public-be-damned" attitude
than labor or Government, and said
such an attitude in the steel indus
try would be downright stupid" in
the face of growing pressure for
naturalization of steel, coal and the
railroads.
The Pennsylvania said the Steel
Subcommittee of the Senate Small
Business Committee has sound es-
Inmates of well above 100000 tons
of steel which have been diverted
into the gray market this year"
Speaking as chairman of the sub
committee, Senator Martin added
that he knows many small fabrica-
tors of steel products have been
pushed through the wringer by the
pressure of the gray market opera
tors"
The gray market is described by
committee aides as sales above pub
lished prices and also involves dis
tribution through unusual channels
Sees Corrective Power.
Senator Martin minced no words
In the prepared statement he read
to the steel magnates, who gathered
around the conference table in an
effort to bring about greater self
regulation in the industry
From Benjamin F. Fairless, presi-
dent of the United States Steel
Corp, came the prompt reply that
the industry is doing its level best
to meet the extraordinary demand
for its product.
Mr.. Fairless predicted that supply
and demand of steel for the domes-
tic needs of this country will be in
balance in two years.
E. G. Grace, chairman of Bethle-
hem Steel Co., went a step further
by forecasting the normal export
trade as we'll as the domestic need
could be met within that time.
The steel leaders told the sub
committee the industry has been
spending more than a billion dol
lars since the close of the war to
expand production, but the whole
trend of their testimony was that
any such far-reaching expansion of
facilities as the CIO suggested
yesterday would be unwise eco
nomically.
Higherups Not Accused.
In summarizing the gray market"
price complaints that have come
to the subcommittee during the past
six months, Senator Martin said the
subcommittee "has not accused any
of the higerups in the big steel COM
panies."
The steel officials assured Senator
Martin they have not knowingly
permitted steel to go into the grey
market" and that when they have
found buyers diverting shipments,
steps have been taken to shut off
their supply
Without mentioning the CIO ~
name, T. M. Girdler, chairman of
Republic Steel Corp, said such sub
stantial increases in tonnage capa-
city as were advocated yesterday
could not be attained simply by i'm
proving existing plants.
In the case of Republic, he said,
1t would mean the building of COM
pletely new integrated steel plants
and the development of additional
sources of raw materials.
Return to Normal Declared Near.
A significant passage from Mr.
Girdler's testimony follows:
Recently our company completed
a study of long time trends in the
major steel-consuming industries.
This study shows conclusively that
when the present temporary boom
has passed, demand for many of the
products of these industries will
either resume their prewar levels or
will enter a period of gradual de-
cline. In item after item now being
manufactured, the peak demand has
passed and return to normal levels
is fast approaching.
Suppose steel to build 100000
automobiles in 1948, and a like num-
ber in 1949, could be provided? How
many would be needed in 1850 with
20.000000 virutlaly new automobiles
on the road? We learned during
and since the war that a car could
last several years longer than pre-
viously considered possible With the
older cars which would be on the
road we would have one automobile
for nearly every family in the United
States.
"Refrigerators and stoves are items
(See STEEL, Page A-4.)