Evening star. [volume] (Washington, D.C.) 1854-1972, 1961-09-07
STEEL


that a steel price increase of
81 to IS a ton, once its effects
famed out through the econ,
omy, probably would raise
military procurement costs by
$500 million per year or more.
Declaring that "our economy
has flourished in freedom" Mr..
Kennedy told the steel pro-
ducers: Let us now demon
strate again that the responsible
exercise of economic freedom
serves the national welfare. 1
am sure that the owners and
managers Of our Nations major
steel companies share my con-
viction that the clear call Of
national interest must be
Needed"
The President blamed sharp
ly rising steel prices and steel
wages in the years before 1858
for much of the impetus to a
damaging initiation in the
American economy"
He recalled that from the
beginning Of 1947 to the end
Of 1858 steel mill product
prices rose 100 per cent while
industrial prices as a whole
were rising only 80 per cent.
Steel wage rates also rose
rapidly during this period.
Mr.. Kennedy recalled that
the international competitive
position of American producers
was impaired and the Nations
balance of payments was
weakened. He said Americas
share of world exports of iron
and steel fell from 19 per cent
to IA per cent.
Since 1858, he said, steel
prices have been stable and
so has the wholesale price in
dex, with the rise in consumer
prices being held within toll
cradle limits.
Stresses Unemployment
This record of price sta
bility was purchased, however"
he said, at the cost of per-
sistent unemployment and I'M
der utilized productive capac-
ity. Many persons have
come to the conclusion that
the United States can achieve
price stability only by main
tanning a substantial margin
of unemployment and excess
capacity and by accepting a
slow rate of economic growth.
This is a counsel of despair
which we cannot accept"
Mr.. Kennedy pointed out to
the steel producers that they
have Jared we'll in recent years.
Since l947, he said. iron and
steel common stock prices have
risen 393 per cent, and divi-
bends on iron and steel securi-
ties have risen from $235 mil
lion in 1947 to $648 million in
the recession year of 1860, an
increase of l76 per cent.
Mr.. Kennedy'S letter went to
the presidents or board chair
men of United States Steel,
Republic. Armco,
Colorado Fuel and Iron, Inland, /
Jones & Laughlin, Kaiser, Nc
Louth, National, Wheeling, and
Youngstown companies.
Restraint Urged
Senator Javits, Republican
Of New York, said meanwhile.
he doesn't want to see man.
agement made a whipping boy
in any steel price rise.
Senator Javits said in
speech prepared for the Senate
he doesn't want to see any
steel cost increase or any gen.
eral price rise.
But l believe that to sta
billie steel prices, management
self-restraint in itself is an
inadequate basis on which to
rely" he said. 1T also calls for
greater responsibility by labor
union leadership and Federal
Government cooperation"
Several Democratic Senators
had arranged to back up Presi-
dent Kennedy'S first plea to the
steel companies last week not
to increase prices.
Senator Javits urged Mr..
Kennedy to seek an agreement
that management would hold
its price line if labor would
switch from demands for wage
increases in 1862 to negotia-