Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-07-01

AS the deadline neared last night
for strike by $4,000 United
Steelworkers whose old contract was
to expire at midnight, exhausted
negotiators of both union and
management remained in a dead
lock, as far from solution on basic
issues as they we're at the begin
ming of the week.
If there was to pc strickland
it appeared inevitable that there
would be-both sides were more or
less resigned to a long one. The
industry was still insisting on a
long-term contract. At first it had
demanded a five-year pact. but
last week scaled this down to four
years and four months, an offer
the union regarded as hardly
compromise. The union was said
to be willing to accept three-year
contract, but only if management
came through with substantial
wage, time and pension benefits.
The steelworkers themselves.
whose financial condition generally
is far from shaky. seemed quite
willing to sit it out during Julys
hot days and wait for manage
ment to begin to feel the pinch
enough to relax its position. The
issues were much like those in
Westinghouse Electrics union talks
last year. Unresolved, these led TO
a five-month walkout.
The situation with the industry,
too, was one that invited a long
strike, once the men leave their
jobs. The companies have been
turning out steel at record rates
to purchasers building up lnven-
tories in anticipation Of a strike
or a price-boosting contract. Con-
sequently, there are few pressing
orders to fill now. From the in
dustry viewpoint, a strike of three
weeks or a month would restore de-
mand to the peak levels of earlier
this year. and also make purchasers
more amenable to hefty increase
in the price of steel.
Price Rise Coming
The steelmakers for months have
been talking about a price in
crease, and would appear to have
made a substantial case for one. A
new contract. even after strike,
is certain to bring labor cost in
creases. Raw material prices nave
risen. Freight costs are up. And
the companies maintain that their
products have been underpriced for
years. But in pointing to its need
for price increases, the industry,
quite naturally, has not been in
clined to show the other side of the
coin. While it is true that costs
have been rising, so have profits
and at an unparalleled rate. Profits
of the IL companies now negotiat-
ing with the union are running at
a rate of 40 per cent above last
years figures. and those of dozen
smaller companies are up 81 per
cent. Net earnings in the first
quarter of 1856 for United States
Steel alone were S257 $4,000 In
addition. much of the plant eX-
pansion in recent months and years
has been made possible through tax
benefits.
Whether the strike. if there is
to be one. lasts hours or weeks, an
increase in the price of steel is an
absolute certainty. And there is
talk now on Capitol Hill of con-
gressionsl inquiry into steel profits
but only after the present squabble
is settled
Widespread Effects
Any settlement will point the way
for terms in other contracts
throughout industry. The railway
unions, for instance. are prepar-
ing to ask for another round of
increases and are holding of on
specific demands until they see
what the steelmen get. Coal will
be influenced Immediately. as will
metal industries other than steel
zinc, aluminium, tin, for instance.
And over the long term a steel
settlement will lead the way for
new demands in every industry that
uses steel-autos, farm equipment
and appliances. This, of course.
means higher prices and another
Jump in living costs. (The con-
sumner price index last week climbed
to the record set in october, 1882
There would be considerable