Evening star., 1948-06-22
Steel Officials Fear
New Authority for
Defense Priorities
BY ths Assoeiotsd Press

allocate steel for defense needs could
upset completely present schedules
Of the Nations steel mills, Eastern
industrial circles said today.
Priority" is frightening word to
the steel industry. with its delicately
balanced system of distribution.
Steel production for years has
been far behind demand. Recently
system Of voluntary ALLEGATIONS"
has been used to assure certain steel
users their proper proportion of
shipments.
The new plan, approved by Con-
gress in the final rush of adjourn
ment as an amendment to the draft
revival bill, would empower the
President, through the Secretary of
Defense, to direct steel producers to
supply certain percentages of their
output to manufacturers of steel
products or materials required by
the armed forces.
Seizure Power Provided.
The bill provides that industry
must give priority to military or
ders, and must fill the orders at
reasonable prices" The President
may seize plants If they fail to
comply.
This move caught many segments
Of the industry and steel-consuming
circles entirely by surprise. The
New York Journal OF Commerce
called it "one of the most far-reach-
ing economic control authorizations
of any peacetime."
Aside from steelmakers,' normal
distaste for any sort fsGovernment
control. there was considerable con-
Germ today over the extent to which
the new powers would be used.
Steel orders coming under the
defense priority would have to be
filled before producers could make
shipments under the voluntary allo-
cations of the Once of Industry Co.
operations program.
The steel industry. harried recent
ly by attacks on its basing point
pricing system, met the new prob
lem with a wait and see" attitude.
Spreading of Controls Feared.
Military requirements for the last
half of 1948 under the voluntary
program have been estimated at as
little as per cent of annual ship
ments Many in the industry be-
lieve, on the basis of wartime expe-
rience, that the very existence Of
defense priorities will result in a
wide expansion of their use.
The new authority "opens up a
Pandora's box" commented George
A. Renard, executive secretary Of
the National Association of Pur-
chasing Agents.
Noting that even in wartime rec
ignition was given to essential civil
ian uses as well as military needs,
Mr.. Renard said, "All the so-called
voluntary programs will demand a
place in the new setup."
II extensive use Is made Of the
priority authority, he predicted, 1T
will definitely mean the spreading
Of controls"
Control Of a single commodity has
not been successful. he pointed out
and when availability Of materials
is regulated, a demand arises for
price control as we'll.
Percentage Might De High.
An editor of The Iron Age, metal
working trade weekly, described pri-
ority programs as issuing tickets
for a show without regard to the
y41,y,e har ~ fc va Ia olo
While the tonnage affected by
priorities might be but small pro-
portion Of all shipments, he pointed
out, in the case of some individual
mill the proportion Of defense"
shipments might be very high.
This is the primary danger, he
said. Priorities can be issued for
the products of a mill without re-
gard to other demands on that par
ticular facility, or to what the COM
pany is producing.
One Of the programs that has
been operating under the voluntary
ALLEGATION plan is that to provide
steel for freight car output. Monthly
production of these cars has been
lifted above 5000 units.
The railroads long have stressed
the military preparedness angles
involved in their efforts to enlarge
their freight-carrying capacity and
to replace oyer-age, worn-out cars
and could be expected to- o>advance
a strong plea for inclusion in any
defense priority system.