Evening star. [volume] (Washington, D.C.) 1854-1972, 1952-04-09


they produce. On top of that, they
can get a price increase of close
to So a ton under the Capehart
Amendment to the price control
law. They don't need this, but
we are going to have to give it
to them, because the law re-
quires it..
Now add this to the $3.50 a
ton they are already making and
you have profits of better than
1922 q ton.
Now what would the wage
boards recommendations do to
lsteel profits? To hear the steel
companies talk, you would think
the wage increase recommended
by the board would wipe out their
profits altogether Well, the fact
tof the matter is that if all the
recommendations of the wage
board were put into effect, they
would cost the industry about 81
Ior SIS a ton.
In other words, if the steel COM
panies absorbed every penny of
the wage increase. they would
Istill be making profits of SIT or
$18 a ton.
Extremely High Profit.
Now, a profit of SIT or $18 a
ton for steel is extremely high.
During 1947, 1948 and 1949. the
three years before the Korean
outbreak, steel profits averaged a
little better than $11 a ton. The
companies could absorb this wage
increase entirely out of profits
and still be making much higher
profits than they made in the
three prosperous years before
Korea.
The plain fact is-though most
people don't realize 1.-THE steel
industry has never been so profit
liable as it is today-at least not
since the "prof1teering" days of
World War I.
And yet, in the face Of these
facts, the steel companies are now
saying they ought to have a price
increase of SIP a ton, giving them
Ia profit of 500 or $27 a ton. That's
Iabout the most outrageous thing
1 ever heard of. They not only
want to raise their prices to cover
any wage increase; they want to
double their money on the deal.
Suppose We were to yield to
these demands. Suppose we broke
our price control rules, and gave
the steel companies a big price in
crease. That would be a terrible
blow to the stability of our econ
omy.
A big boost in steel prices would
raise the prices of other things
all up and down the line. Sooner
or later, prices Of all the products
that use steel would go up-tanks
and trucks and buildings, automo-
biles and vacuum cleaners and
refrigerators, right on down to
canned goods and egg heaters.
But even worse than this, if we
broke our price control rules for
steel, I don't see how we could keep
them for any other industry.
Others Turned Down.
There are plenty of other in
dustries that would like to have
big price increases. Our price con-
troll officials meet every day with
industries that want to raise their
prices. For months they have been
turning down most of these re-
quests. because most of the COM
panies have had profits big enough
to absorb cost increases and still
leave a fair return.
The paper industry has been
turned down. So has the brass in
dustry, and the truck industry,
and the auto parts industry, and
many others.
All these industries have taken
mo- for an answer, and they have
gone home and kept right on
producing. That's what any law
abiding person does when he is
told that what he'd like to do is
against the rules.
But not the steel companies.
The steel industry doesn't want to
come down and make its case, and
abide by the decision like every