Evening star., 1948-03-02
Steel lPriceBoosi
||nf|ationary, Taft
sFairIess
Encourages Unions
To Ask More, Senator
Warns at Hearing
By ChoImers IA. Roberts

OnlO natly told benjamin f.
Fairless, president of the United
States Steel Corp, today that
the recent increase in the price
OF steel has decreased the hope"
of putting a stop to the imitation
spiral. The Senator also de-
clared that the higher steel
prices might touch off new wage
demands.
He made the statements as the
Senate-House Economic Committee,
which he heads, searchingly ques-
toned Mr.. Fairless about the price
increase. Mr. Fairless defended the
increase made on some types of
steel by declaring that the effect
is too small and unimportant" to
bring about higher prices for prod
ucts made of steel.
He testified that United States
Steel will make an additional ST.
100000 profit this year as q result
OF the increases, assuming tonnage
sales are the same as last year.
The new price would bring nearly
28,500, 900 in additional revenue of
which 81 per cent would be profit.
This amounts, he said, to something
less than So per share of common
stock.
Exaggerated, Fairless Says.
Mr.. Fairless said the "inflationary
influence of this price adjustment
has been grossly exaggerated" and
that much of the public criticism
has been emotional or political in
character
But Senator Taft appeared to ex-
press the feeling of many committee
members, both Republicans and
Democrats. when he said that every
labor union in the country" will be
encouraged by your action to ask
for more of a wage increase than
they otherwise would seek" The
Ohioan said this is "the inevitable
effect" of the price increase.
Senator Taft said he was fairly
critical of the increase because he
had hoped that, with the recent
break in the commodity markets,
the imitation spiral was being halted.
During a sharp exchange with
Senator O'Mahoney, Democrat, Of
Wyoming, Mr. Fairless revealed the
anticipated additional profits for
1s48. He had said earlier that
big STEEL lost 81, ,0o0, 900 in January
on the semifinished which it sells
to other concerns.
Not Taken to Board.
Senator O'Mahoney pointed out
that numerous leaders of the Ma
tions railroads, banks, insurance
companies and other concerns sit on
the United States Steel Board Of
Directors and he wanted to know If
they knew Of the price increase.
Mr.. Fairless said the board did
not pass on" the price increase be-
cause it was not felt important
enough to bring before the directors.
Senator Flanders, Republican, of
Vermont, pointing to part of Mr..
Fairless' testimony in which he said
that United States Steel is "a VIC
tim of imitation and not the cause
of it." said that the corporation
should make its price decisions in
the light of public interest
Senator Tobey, Republican, of
New Hampshire, asked Mr.. Fairless
whether he would not, If he we're
steel worker today, "feel justified in
light of the corporations profits
in asking for an increase to meet
the high cost of living"
Mr. Fairless replied that he was
''in favor of high wages but I'm
not in favor of raising wages at
this time and I don't think it's to
the best interests of the workers to
ask for increases now"
In a long discussion Of the cor
poration's profits, Mr.. Fairless said
they were s150,000,00O in 1947 be-
fore $23,000,000 was set aside in a
reserve leaving a profit after taxes
of about 127,oo0,0 900.
He said the corporation did 4
total business last year of $780,
00o, 900 on which the return was 6
per cent. He said the company
lost money on about Is per cent of
the products it makes and that the
price increase on semifinished steel,
tubular steel and structural steel
had been made to Offset part of the
loss.
Senator OMahoney wanted to
know how lin view of the sad pic
ture you've drawn" United States
Steel managed to pay an extra
81 dividend last December?'
New Upward Trend Started.
Mr.. Fairless said that the cor
poration actually had increased its
quarterly dividends from 81 to $1.25
and then paid special dividend OF
rs cents to bring the total dividends
for 1947 up to SIS per share of COM
mon stock
Senator Taft asked Mr.. Fairless
(See STEEL, Page A-4D