Evening star., 1947-09-11
Wallace Says Steel
Plans Output Cut;
Industry Denies Il
By the Associated Press

By the Assoeioted Press
NEW YORK, Sept. 11.-Henry A.
Wallace said last night that the
steel industry's high command"
plans a production drop that will
make a depression inevitable" and
almost at the same time a spokes-
man for the industry announced 1t
Is completing this year a billion
dollar program to increase output.
Walter S. Tower, president of the
American Iron and Steel Institute,
described in prepared statement
an expansion and Improvement pro-
gram Involving record-breaking
peacetime. expenditures totaling
more than $1,000, ,000, 900" and said
expenditure of several hundred mil
lions more was planned.
Mr., Tower said the statement was
issued sin view of the current dis
cussion in the press and on the
radio regarding the question of steel
capacity The institute has 101
steel producers as members.
Mr.. Wallace, former Vice Presi-
dent, who now edits the New Re
public magazine, made his remarks
during a radio program sponsored
by the CIO Electrical Workers.
Olds Answers Wallace.
ME-. Wallace's remarks brought
from Irving S. Olds, chairman of the
board of the United States Steel
Corp, a statement that his firm has
a half- billion dollar building pro-
gram, about 40 per cent complete
He cited this as an answer. to any
charge that we expect a major de-
preston in the near future"
On the radio program, Mr.. Wal
lace was asked by Leland Stowe, pro-
gram commentator, to give his views
on the steel situation. and Mr.. Wal
lace replied:
Il dc not accuse all steel men of
believing in scarcity. There are some
who believe in using new methods
and creating greater production.
But the high control-Big Steel-is
planning for reduction in steel
production that will make depres-
sion inevitable for us all.
Il certainly hope We do not have
depression. But I know that a
great depression would cause the
American people to move with great
speed either to the extreme right
or the extreme left.
To-day the steel. automotive and
other great industrial concerns have
capital-available for investment
amounting to some $4,000 900 900 or
500 ,O00, 100000.
Huge Losses Declared Possible.
I'VE now face the danger that
this vast reservoir of dollars won't
be released-that no major portion
of it will flow with sufficient cour-
age to meet the peacetime needs
of the United States and the world.
without courage on the part
of big businessmen, without fight
ing leadership on the part of labor
and without intelligent planning
on The part of Government, the
losses from a major depression in
the SOS could easily total $500,000,-
600, ,000."
Mr.. Towers statement said that
2,500,000 tons of new ingot-making
capacity would result from projects
being completed in 1947 and 194S.
I'm addition early 100000 tons
Of new coke oven facilities, 5000, 900
tons of new blast furnace capacity
and 100000 tons of new sheet
and strip capacity also are under
construction" the statement said.
This program, Mr.. Tower said,
together with record breaking
peacetime production this year, is
the best answer to statements that
steel companies are holding back
both production and expansion.
"The current tightness in the
market for steel has resulted from
various abnormal conditions, in
cluding the loss of 100000 tons of
steel ingots from strikes since the
end of the war-more than 10 per
cent of actual output during the
period.
IF this lost tonnage had been
available, it is a safe assertion that
there would be few complaints
about steel shortages today"
Heavy demand to fill war-de-
pleted inventories, coal strikes and
"the critically short supply and
poor quality Of scrap" were among
other reasons cited by Mr.. Tower
for current SHORTAGES