Evening star., 1949-07-12
Nathan Steel Report
Says Pay Raise Would
Barely Dent Profits
By the kssoeiotsd Press

BY the Asseeiotsd Press
PITTSBURGH, July 12.-Rob-
ert Nathan, the economist, told
the CIO- United Steelworkers to-
day that substantial wage in
creases" would barely dent the
basic steel industry's profit struc-
ture.
The one-time Government
economist now retained by the CIOI
made his report to Steel Unions
Wage Policy Committee meeting
here.
Mr.. Nathan said:
80 The level of profits (Steel
Industry under June. 1949. prices
and costs is so high that substan-
tial wage increases would make
only q minor dent in the profit
structure of the steel industry
and the United States Steel Corp"
Yesterday in q more generalized
report to the CIO as a whole, Mr..
Nathan said corporations gener-
ally could afford wage increases.
Steel Earnings Cited.
Mr.. Nathan charged leaders of
the steel industry" have taken an
"unvarying position" that sales
cannot be stimulated by lower
steel prices. He declared that the
steelWorker:
80 Has not shared appreci-
ably in the probability of the
steel industry.
Owners of the steel industry
earned yield of 34 per cent on
their investment in 1899; by 1948
this had increased to 12.1 per
cent and by the first quarter Of
this year to a ecord-breaking 1874
per cent"
He put profits of 10 large steel
companies last year at five times
the 1899 earnings figure of $751;
100000.
Replies to Industry.
Replying to the industry's con-
tention that recent declines in mill
operating rates justifies refusal OF
contract demands, Mr.. Nathan
said:
If appropriate economic pol
icies are adopted by business, la
Dor and Government, it is rea-
sonable to expect that current
trends will be reversed and that
the steel industry will speedily
return to utilizing more than 80
per cent of its capacity"
Controversy followed fast in the
wake of the Nathan report issued
in Washington yesterday at a big
gathering of reporters, cabinet
members, Senators and others.
That report advocated wage
raises-of different sizes to fit the
industry-in all except severely
depressed" industries and COM
panies. 1t said many industries
can afford to raise wages and cut
prices at the same time.
Need Higher Wages.
That pleased labor unions but
ran in the teeth of the contentious
of those induStrialists who say
higher wages would force prices
up and be bad for the economy
in this period of decline.
Mr.. Nathan argued that higher
wages-greater purchasing power
is exactly what business and the
country need in order to reverse
the trend of decreasing employ
ment and production.
President Truman, in an eco
nomic report to Congress yester-
day, had urged against wage-cut-
ting, but had made no specific call
for big wage raises.
Many businessmen liked the
Presidents report better.
Emerson P. Schmidt. economic
research director for the United
States Chamber of Commerce,
told reporters: The Presidents
report has sound tone. The
Nathan report is anti-social in
that it will encourage the pricing
of labor out of the labor market"
Once OH NTD StdH.
Mr.. Nathan, before opening a
firm of consultants, was deputy
director of the Office of War Mo-
bilization and Reconversion. At
one time he was chairman Of the
Planning Committee Of the War
Production Board.
The Nathan report was far more
than an argument for higher
wages.
It included positive program"
for the Government to use in COM
batting unemployment and pre-
serving a healthy economy.
President Truman's report also
advocated a positive program in
stead of letting nature take it's
course" (they both used that ex-
pression).
But Mr.. Nathan went a little