Evening star., 1949-12-22

u. 8. Steel Corporation alone, is q figure
far higher than any other estimate which
has come to my attention. Neither the
union nor the companies have suggested
what the total cost Of the pension and well
fare plans will finally amount to-but the
probability Of its even approaching $780,
100000 Is remote.
The fact is that profits Of almost every
steel corporation have been at high, II not
record-breaking. levels The steel industry
has gained further benefits through sharp
decreases in the price of scrap steel, which
constitute q major element In the cost Of
making steel. Clearly, the pension and vel
fare program under these circumstances
cannot be blamed for price increase
which industry sources estimate will bring
u 8. Steel alone increased revenue Of be-
tween $50 and $50 million during the next
IL months.
Unfortunately these aspects Of the steel
industry's economic position are not made
clear to the reading public in the gyrating
interpretations of David Lawrence. His
readers should be aware Of the incon-
sistencies in his columns on the policies
and actions Of the CIO Steelworkers Union.
HENRY c. FLEISHER,
Assistant Director Of Publicity, Congress
of Industrial Organizations.
Differs With Senator O'Mahoney
On Steel Industry Economics
TO the Editor Of The Star:
The steel price increase was the occasion
for demand by Senator Joseph c. O'Mah-
oney for an Investigation Of United States
Steel so that other companies may be de-
tered from raising prices. In this inquiry
the leaders in the steel industry may be
called to Washington to LAY the case on the
table,"
Senator O'Mahoney's denunciation Of the
steel leaders seems gratuitous. His easy
generalizations are unrealiStic. He turns
the spotlight on prices and profits but has
q blind spot for costs. What sort Of book
keeping is it which permits posting credits
and prohibits posting debts? Does the
Senator believe that the marginal companies
can be discouraged from raising selling prices
to cover costs? Many Of them earned moth
ing for q decade before the war and some
showed losses even for the first quarter of
1949.
The situation calls not for denunciation
but for analysis not for political slogans but
for economic data. It Is earnestly to be
hoped that the Senator will seek the facts.
Indeed, the industry leaders should welcome
the opportunity to present detailed figures
which are summarized herewith.
Steel prices are not high. Since 1899. they
have risen less than the BIS Index Of Whole
sale Prices and less than other metals. But
steel wages. even including pensions, are by
far the highest in history.
The steel industry huctuates widely In
demand and in production and even more
widely in profits. It is a prince and pauper'
industry. Therefore, If the average return
is to be fair, then the peak return in pros
perity should be high enough to offset the
return In depression years, when it is either
low or deficit.
Increase in Wages Great.
The facts are clear and available for any
one who seeks to know, Compared to 1910.
the increase in annual dividends was ST.
O00, 900 but the increase In wages and other
employment costs was $570, 100000 or So
times as great Senator O'Mahoney sees the
record profits. But he ignores the record
wages The wages per ton rose froEn $21
in 1923, 1926 and 1887 to $44 In 1913. But
the profit per ton declined from $50 in
1926 to $3.50 in 1887 and $3.50 in 1948. Both
reflect depreciation of the dollar. as do also
record loans, deposits and currency in cir
culation.
One can eliminate the influence Of the
cheapened dollar by using data Of the same
year. For example, the percentage of profits
to wages was 1873 per cent in 1948, against
20 per cent in 1887, and about "a per cent in
1926 and 1928.
Stockholders Number Thousands.
Senator O,Mahoney concentrates his fire
on Mr.. Fairless but he Is shooting at the
wrong target. The United States Steel Corp.
had in 1947. (the latest data available) 229,-
900 individual stockholders and additional
tens of thousands of stockholders proxied by
$50 banks and brokers, representing about
one-fifth of the stock outstanding. OF the
individual stockholders, 80 per cent held less
than 10 shares, 66 per cent held less than rs
shares and SO per cent held less than so
shares. If stockholders were organized In
great unions. they also would have political
spokesman. stockholder could answer Sem
ator O,Mahoney for he would represent the
democratic" influence Of 10000 900 to 15,-
600 900 voters-the number Of stockholders
estimated by DR.. Rufus Tucker.
Stockholders also are people. but their
voice is not heard in the land because they
are unorganized. II they were organized like
labor unions by companies, by industries
and nationally. they could be an effective
force The labor unions raised over $780,
900 900 in union dues. A checkof OF stock
holders dues Of cent a share would yield
$1,000, ,000 Such sum could make the
mute meek and MIXED middle class heard
and needed