Evening star., 1947-12-14
Nails
Continued From First Page.)

leans and a machine tool company
in New Jersey have disposed of sup
plies in gray market deals, the SUBJ
committee disclosed.
100000 Kegs Reported Held.
Senator Flanders said that one
new operator dealing in nails is
reported to hold 100000 kegs at
gray-market prices an amount
representing IS per cent of an en-
tire months countrywide produc-
ton.
High officials of the 26 nail man.
ufacturing firms will attend the
conference here, including Admiral
Ben F. Moreell, president of the
Jones & Laughlin Steel Corp, Pitts
burgh, who has notified the SUBJ
committee on the High Cost of
Housing-a part of the Joint Con-
gressional Committee on Housing
that he will be present.
Others invited include Eugene G.
Grace, president of the Bethlehem
Steel Corp; Charles r. Hook presi-
dent of the American Rolling Mills
Co.; Ben F. Fairless, president of
the United States Steel Corp, and
other prominent manufacturers.
The subcommittee also will seek
to obtain a sharply-accelerated rate
of nail production to prevent a
showdown of home building, a.
spokesman said.
Output Is Below Capacity.
Production of nails is now at
yearly rate of only 66 per cent of
capacity, the subcommittee source
said. Production this year is at the
rate of $4,000 tons, whereas the in
dustry's capacity is 1,266,870 tons a
year, according to the American
Iron and Steel Institute, he ex-
planned.
Senator Flanders defined the diff
ference between a 'black market
and gray market" as follows:
BLACK market sales are sales
which directly break a law. Gray
market sales are sales which are not
in obvious or direct violation of the
law"
Generally considered to be gray
market sales in nails are those in
which the price is higher than the
prevailing market price through
regular channels. In Washington,
builders say the prevailing market
price is between ST an SO per 100
pound keg for 8, 10, IL and 16 penny
nails when you can find them"
Mill Price s4.63 Per Keg.
The prevailing basic mill price at
Birmingham, Ala, a typical nail
producing center-was $4.63 per keg,
the subcommittee spokesman said.
Gray market prices average $12
or $14, and have been quoted as high
as $40 and $22 a keg, the spokesman
said.
The subcommittee investigation
has touched off series of inquiries
by other government agencies, 1t
was reported.
The anti-monopoly division of
the Federal Trade Commission has
an investigation under way, and
income tax investigators for the
Bureau of Internal Revenue are re-
ported to be checking to find out
whether gray market operators are
reporting their profits.
Flanders Issues Warning.
In his telegram to the 26 principal
nail manufacturers inviting them
to this weeks conference, Senator
Flanders said:
Although business has constantly
asked the Government to free 1t
from restrictions, business has
failed in its responsibility to police
its own operations in nails.
UNLESS this responsibility is as
sumed voluntarily, Government con-
troll is inevitable AS a business
man, I feel it would be an admission
of failure of our system of free
enterprise if we were forced to resort
to such controls"
The closed session, Senator Elan
ders said, will open at $50 am.
Wednesday in the Senate Banking
and Currency Committee room in
the Senate Office Building.