At Last

Jeremiahs had predicted it. Last week they turned out to be right. OPM officially admitted that almost half the world's steel capacity was not enough for the U.S. It admitted an 1,000,000-ton shortage for the current year. Accordingly the No.1 defense metal was slapped under 100% mandatory priorities.

Thus ended the long Battle of Steel between U.S. defense and production men. Last summer, shortage-predictors looked like crackpots; few but New Dealers were for expansion of steel capacity. In December, OPM's William Loren Batt predicted rationing if expansion did not take place. Not until June did OPM and the industry agree on a 10,000,000-ton expansion program. Said American Iron & Steel Institute's Walter Tower only last month: "There is no sound factual basis for expecting shortage of steel for any essential use."

Yet the reason for last week's order was that defense manufacturers could not get enough steel. The demands of rearmament exceeded all expectations, especially the Army's and Navy's. Last week some 75% of steel production was going to defense--which means that current U.S. arms production, if steel is a criterion, is greater than Germany's ever was.

But nobody can buy that steel now without priorities. Other provisions:

> For the first time, steel companies must accept all defense orders (unless they are at capacity on earlier defense business). Heretofore no manufacturer had to accept an order with a high priority, which is one way the automakers have managed to get so much steel.

> Inventory accumulation beyond current needs is prohibited. OPM's ignorance of where there are excess supplies (see below) will at long last be corrected.

> To break into the closed circle of normal business relationships (where longstanding "connections" hold the whip hand) OPM may "require" a steel customer to place his order with "a particular producer."

The Government's control of steel was virtually complete.

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