Evening star., 1948-01-04
Steel Firms Officials
Testify Tomorrow in
Gray Market Probe

panies were asked by q congressional
investigating committee yesterday
to testify tomorrow on alleged
black market" operations in steel
involving an estimated 81, 900 .000. 900
q year.
The steel inquiry will mark only
the beginning Of what Is planned
to be q sweeping investigation into
so-called black" or gray market"
conditions generally. as voted by
Congress at last months special
session.
The idea is to learn details of
transactions, outside normal trade
channels, at prices far. above the
open market.
Probe to Have Wide Scope.
Subsequent hearings are expected
to delve into many allied fields, In
cluding the automotive industry,
housing and public works, with the
aim Of exposing the sources Of semi
secret supplies and driving scare
materials back into normal chan
nels.
Representative Macy, Republican,
Of New York, chairman Of a House
Publics Works subcommittee, said
the steel inquiry will get under way
at 2 pm. tomorrow with high OIL
cials Of the following companies
scheduled to testify:
U. s. Steel, Bethlehem Steel, In
land Steel, American Rolling Mills,
Jones g. Laughlin, National Steel.
Republic Steel and Youngstown
Sheet and Tube.
Macy Issues Statement.
Mr.. Macy, blaming more or less
furtive under-the-counter dealings
for many disruptive aspects Of the
Nations economy, including short
ages and high prices, said In q
statement
BLACK marketing has reached
unconscionable proportions. Certain
persons are taking advantage OF alb
normal market conditions resulting
from the war to enrich themselves
unjustly.
"Their activities tend to keep
many essential items in short sup
ply, thus adding to the burden OF
inf1ationary prices.
"Some sources have estimated
that between 4 and IL per cent Of
the total steel output Of the cour1-
try finds its way into this vicious
market. At average black market
prices, this would amount to a
81 ,000, ,00o, 900 business.
Not Genuine 1Black Market"
Mr.. Macy said his committee has
received reports Of steel selling In
the "black market" at six to seven
times above mill prices. Actually,
the term "black market" is q mis-
nomer since OPA ceiling prices have
Rone by the board and the words
were stricken from Mr.. Macy's own
House resolution calling for the In
vestigation.
since oPA expired, the generally
accepted label has been gray
market" along with this definition:
Where extra money changes hands
to influence the delivery Of scarce
goods.
Because such transactions are no
longer illegal. Mr.. Macy's COM
mittee must seek other means to
| check practices which his House
approved resolution declares are
seriously undermining and threat
ening the national economy Of the
United States" -
Two Likely Courses.
Committee aides suggested two
}jlkaly courses Of. action may beses
N y 70 check the Ancpme tax ne
turns Of suspected get-rich-quick
operators.
/ An operator who listed only the
| Legitimate" profit on transaction
instead of the actual gray market
profit, thus would be subject te
prosecution for tax evasion.
! 2. To investigate possible viola
1 ton Of the, antitrust laws.
Under the. second method, con-
gressional investigators would dig
into any tieup between sources o1
supplies and their outlets, to de-
termine If there has been any
restraint of trade.