Evening star., 1949-01-02
Record Steel Output
lis Short Of Demand;
ALLEGATIONS Feared
By WiIIiom 6. Smock
Associated Pres, Bv,in.,, Writer

SSsoS'oIeo FFet1 DUStnebt WEII0F
PITTSBURGH, Jan. 1.-Ameri-
can steel mills broke all peacetime
production records this year. But
their inability to meet a bowling
demand may confront them with
a dreaded spectre-compulsory allo-
cations.
President Truman hasn't said
he'll ask the Eighty-flrst Congress
for power to control the flow of
steel from mills to customers, but
producers think 1949 will bring new
attempts to earmark part of their
output for uses the Government
deems essential
The past year opened with bang,
and mills kept up the pace through
out the II months, slowed only by
two coal work stoppages.
The 1948 production is estimated
by various sources at 88,50O,OOO
tons. That's only 100000 tons less
than the all-time high set in the
war year Of 1914, when mills poured
out steel regardless Of needed re-
pairs to furnaces and other equip
ment.
Old Plants Modernized.
This 1948 production was accom-
plished with little in the way of
new steel-making facilities. It was
done by undermining and improv-
ing existing equipment in most in
stances.
Shipments Of finished steel prob
ably will reach 100000 tons, SO
per cent more than the 1899 output
and an all-time peak.
But the cry for more steel con-
tinued without letup. Every ton
produced was snapped up by max
ers Of everything from bobby pins
to autos.
Shortages Of scrap, manpower,
good quality coke and other mate
rials showed no slackening. A
trickle Of battlefield scrap from Eu-
rope began arriving late in the year
but each shipload Of 5000 or 5000
tons brought only enough to keep
big mill going a relatively few
hours. Shortages forced the scrap
price up to $43.
The big bogeyman of the industry
was ALLEGATIONS. After Mr.. Truman
failed to get Congress approval
for compulsory ALLEGATIONS, score
OF steelmen went to Washington
and worked out system of volun-
tary ALLEGATIONS with the Commerce
Department.
Under the program, about 10 per
cent Of production was earmarked
for such uses as the armed forces,
the Atomic Commission and the
National Advisory Committee on
IAeronautics. Also specified amounts
were guaranteed the manufacturers
Of railroad freight cars, heating
equipment and prefabricated houses.
In october--before the Truman
election victory-steelmen met with
Commerce Department officials to
discuss ALLEGATIONS. They accepted
only one of nine. proposed set-aside
programs, rejected four and post
poned action on four.
But in November-after the elec :.
tion-another session was held and
steel producers: Cd Approved pro-
grams for five uses for six months
beyond the scheduled February 23,
l949, expiration date; t2) agreed to
new programs covering mining ma
chinery ana certain equipment for
use abroad and 90 went beyond
Government requests in planning
other programs.
Complain Of Rising Costs.
Although steel profits climbed in
l948, steel executives complained of
rising costs Of materials and said
fat earnings were necessary to Off
set mounting costs in the future.
Size Of the earnings stirred specu-
lation over q possible demand for
fourth round" of wage boosts next
spring.
One Of the years high lights was
Steels decision to abandon the ira
Iditional practice of absorbing part
of freight charges. Known as the
"basing point" system, that pricing
policy was dropped last July in line
with a United States Supreme Court
decision.
The steel companies began charg-
ing customers prices that reflected
full freight costs. officials like Pres
idents Benjamin F. Fairless of the
United States Steel Corp. and Ben
Moreell of the Jones & Laughlin
Steel Corp. and Board Chairman
Ernest T. Weir of National Steel
Corp. said the courts decision would
hurt not only their industry but the
economy of the Nation.
The decision to sell steel free on
board had one predicted result. Just
as some stel masters forecast, fab
ricating companies began to nestle
closer to big producing centers.