Evening star. [volume] (Washington, D.C.) 1854-1972, 1949-10-15

for social equality at this point is to put
the cart before the horse.
MEMBER OF THE PUBLIC.
Steel Strike Brings Warning
OF Townsendism' Run Riot
To the Editor of The Star:
The recommendations Of the steel fact
finding board for a non-contributory plan
run against the Federal Social Security Act
initiated by President Roosevelt as q con-
tributory plan and ignore legislation pro-
viding for substantially increased benefit
payments.
The board stated that its findings and
recommendations are not binding in any
way" and President Truman gave similar
assurances; yet by its strike the union re-
jects this principle but not the boards
suggested 10-cent increase. The board
urged collective bargaining after full study.
but the union demanded the acceptance OF
its terms before, /. e.: without collective bar
gaining.
The boards report contains contradictions
and inconsistencies. 1t gave closely rea-
soned justification for stabilizing prices and
wages and in the public interest but that
reasoning is equally valid for not increasing
disbursements to employees for any other
purpose, as for pensions and insurance. The
board urges collective bargaining after an
exhaustive study and yet set 10 cents an
hour before any study.
The board admits mo one can state with
certainty what they (companies) can af-
ford now for social insurance.. Much de-
Ponds on future conditions" Why did the
board fix any rate now? Again, THE board
Is scarcely in a position after this concen-
trated hearing to say precisely what should
be done on pensions" Why then did the
board promptly recommend cents per hour
as pension charge?
Employe Contributions Favored.
Furthermore, the board favors insurance
by government but recommends insurance
by industry. That Social insurance. could
be done only by Government itself, but there
would probably still be inadequacy" The
obvious conclusion, therefore, should be that
the Government increase payments ade-
quately and not as the board proposes, to
shift the burden, with the evil consequences
which the board itself points out
The board deprecates private programs
1T should be cause of great concern that
there Is growing up haphazardly unequal
and unco-ordinated insurance funds with
little or no public control" Yet the board
will add to this evil. Why should the mem
bers of the Lewis or Murray unions have
pensions and not the low-wage workers in
logging, sawmills and canneries? The
boards approach is fragmentary and re-
lates only to the beneficiaries and ignores
stockholders and consumers.
What Is industry's position? The post
war increases in steel were 1875 cents Q946),
$50 cents 1947, and 1870 cents u948) and
now 10 cents is recommended. On this de-
clining scale 10 cents would have been q
corresponding fourth-round increase On
the company's books this debit is identical
with wage increase. The purpose of the
payment can disguise, but not change, its
true nature
Shall the beneficiary contribute? Even
union leaders favor employe contributions
Mr.. Murray signed the report Of the Gov
eunment's Advisory, Council on Social Sc
curity in 1888 and changed his mind only
recently. William Green of the AFL strong
House Ways and Means Committee In
April. 1949
The Government view is that "the con-
tributory principle is the cornerstone Of So
clal insurance" according to the report of
the Social Security Advisory Council (1948).
The House Ways and Means Committee has
enunciated 1.-The basic principle that a con-
tributory system is the most satisfactory
way OF preventing dependency and insecurity
while preserving self-reliance and initiative"
AS for industry, leading insurance COM
clients, the basis is contributory in IS per
cent of the cases. In 10000 contracts ana
lyzed by the Institute of Life Insurance,
about 80 per cent are contributory.
The unions estimate of pension costs are
below actuarial calculations. The country
discovered this in the coal industry. To
start pension plan requires more money
than merely to keep it going. For individ-
uals to obtain pension of 500 month at
IS requires an annual premium of s499 at
rs, 81 1896 at IS and lump sum of $4,000
at IS. The same principle would apply to
1000 men or 100000 men.
Paupers to Help Princes!
Who will pay for the increased costs which
constitute about per cent of the hourly
wage? Can the steckholder do so? In United
States Steel. for example, the stockholders
dividends were a smaller percentage Of the
wage, about as per cent for 1941-48 and 81
per cent for 1932-48 Therefore, the rest of
the community, through higher prices, must
substitute the steel workers who are now
among the highest-paid employees in the
country. Paupers may be paying tribute to
princes.
The board states that steel has Jagged be-
hind the coal and railroad industries. But
these are sick" Industries. In many COM
panies the shares are selling at less than the
net current assets. Thus the fixed assets"
are liability. Even the bondholders fee
A 10-cent demand seems small The dime
is symbol of cheapness as in the 5-and-10-
cent store. But for the industry the in
creased cost is about 5000 900 900 per an
mum or about So a ton even at full capacity
Such rise In prices may drive consumers to
competing products, and that has been the
fate Of the two "basic industries" regarded
as models by the board. Coal has been re-
placed by gas oil and electricity increas-
ingly. Railroad traffic is being diverted to
trucks, buses and planes
To compare the pension of Mr.. Farless
with the mill laborer makes little sense.
The Government pays much larger pension
to a Supreme Court justice than to the
court janitor. Besides, If the management
worked for nothing, the stockholders divi-
dends could hardly be increased. But a