Evening star., 1962-04-12

stockholders of y. S. Steel,
praising the Presidents cour-
age"
Officials participating in the !
White House meeting were At |
torney General Robert Ken
nedy, Defense Secretary Nc
Namara, Commerce Secretary
Hodges, Labor Secretary Gold
berg, Treasury Undersecretary
Henry Fowler, FTC Chairman
Paul Rand Dixon, Chairman
Walter w. Heller of the Coun-
Gil of Economic Advisers and
Theodore C. Sorenson, preSi-
Dental assistant.
Higher Cost Inevitable
The expected Defense Depart
ment statement could be a
follow-through on discussions
within the administration about
trying to freeze price-raiSing
companies out of Government
business. But even if a few
companies hold prices down,
they probably could not meet
the Governments steel needs.
Officials presumably were
trying to use their influence to
discourage price increases by
companies that so far have
withheld their decisions.
One of these steel companies. !
the Kaiser Steel Corp, said it .
was studying the situation with
a view to its special competitive
problems and advantages as
the biggest steel producer on
the West Coast.
A Kaiser spokesman noted
that his company for many
years has had a reputation as
a maverick" in the steel
industry.
Inland Delays Move Il
Inland Steel Corp. was an
other of the major producers =
withholding its price decision. .
1t is headed by Joseph L. Block,
who is member of the PreSi-
dents Advisory Committee on
Labor Management Policy.
That committee has been +
working on a policy statement :.
about wage and price policies. :
Members could provide contact !
between the administration and '
the steel industry.
Administration contacts with i
companies that have announced f
price increases were difficult, I
one official noted, because Of \
the Presidents anger.
Another official said the J
price increases may blow the
advisory committee sky high"
He also said the White House
Economic Conference planned
for late next month may be
called off.
But, he added, the admins
tration may try to use the COM
mlttee and the conference as
tools in trying to salvage some ,
of the program for wage and !
price stability. :
Tax Move Sidetracked
Treasury officials said the
administration had considered
retaliating against the steel
panies by withholding c
planned tax concessions. But he a
said this idea was abandoned. t
In addition to United States f
Steel and National Steel, COM i
panies announcing price in S
creaSeS were Bethlehem Steel T
Corp, Republic Steel Corp,
Jones & Laughlin Steel Corp, i
Youngstown Sheet & Tube Co. v
and Wheeling Steel Corp. l
The increases all were approx 6
mately Sc a ton, equivalent to
a 3.5 per cent boost in the
$l50-per-ton price. !
In announcing the price in
crease. United States Steel {
President Leslie B. Worthing-
ton gave as the reason a con-
tinuing cost-price squeeze on
profits since 1858, when prices
last were raised. Mr.. Worth
ington said these costs have
continued to rise without even !
considering higher labor costs
after July l under new con-
tracts signed last week.
Mr.. Kennedy spoke yesterday
of the price increase in cold
anger and disdain. He charged
the steelmakers with utter
contempt for the interests Of I
1876 million Americans"
Profits Mounting
Even without a price rise, !
steel profits were likely to in
crease an estimated S125 mil s
lion to $3.50 million this year
under various tax proposals j
advanced by the adminiStra- !
ton in an effort to spur in 1
dustrial expansion.
Liberalized depreciation al
loWances now being prepared
by the Treasury would add an ,
estimated $25 million to steel ,
profits. Another $100 million
to S125 million in benefits
would come steel's way if Con-
greSs passes an administration
bill giving investment tax
credits to firms that modernize.
Even friends of the tax
credit agreed with Senator
Harry F. Byrd of Virginia that
Congress now will hesitate to
bestow tax benefits on industry,
in view of the profit boosting
potential of the price advance. {
The FTC said it is investi-
eating. among other things, {
whether any companies have {
violated a 1851 consent order {
prohibiting steel price-fixing
conspiracies.
More than 70 major steel I
corporations agreed in that {
case to refrain from price
fixing, although none admitted {