Help for Henry

To California's businessmen, it often seemed as if Henry J. Kaiser might be the New Deal's own private Paul Bunyan. Back in 1942 when the Defense Plant Corporation turned him down emphatically, the RFC loaned Kaiser $123,305,000 to build his Fontana steel mill. And he was permitted to use his shipbuilding profits (most of which would have gone to the U.S. in taxes anyway) to help pay the RFC loan. In this way he paid off $17 million.

But even Paul Bunyan himself could not do without Johnny Inkslinger, the master figurer who kept a piece of rubber as big as a barrel on the end of his nose. With three shakes of his head, Johnny Inkslinger could wipe a page clean of figures. Last week Henry Kaiser tried the same vast trick.

He asked the RFC to write off $85,329,544 of the $105,452,160 he still owes on Fontana. He asked that payments of $9,000,000 in interest and a $1,358,195 wartime operating loss be applied against the loan. The rest, $74,588,261, should be written off as "excessive wartime costs of construction." Kaiser was willing to pay the remainder--some $15 million he still has coming from the U.S. Maritime Commission in shipyard earnings, and $5,000,000 to be raised by private or public financing.

Gall from Henry. Under this plan, the bookkeeping cost of Fontana to Kaiser would be $44 million. But his out-of-pocket cost would be only $12 million. That was all he would have left from the $44 million shipyard profit after taxes, if he could not apply the sum against Fontana.

At Kaiser's proposal, New Hampshire's Senator Styles Bridges cried "unutterable gall." But Kaiser had a case of a sort. The Government, he pointed out, had sold the $200 million Geneva steel mill to U.S. Steel Corp. for 20.9-c- on the dollar--a loss of $162 million. (The other side of this argument was that Geneva had been auctioned off--and Big Steel got it because no one else wanted to pay the price it offered.)

Backing for Henry. For once, Kaiser's plan had the backing of the West's industrialists, represented by the Steel Committee of the Western States Council which lias long blamed him for driving up wage scales with his high, wide & handsome bidding for wartime labor. Chairman Kenneth T. Norris, president of Los Angeles' Norris Stamping Co. and director of the Chamber of Commerce, and other steel-committee members like cheaper steel more than they dislike Kaiser. If Kaiser would promise to "substantially reduce" Fontana's prices, they would back him. Kaiser, who now has to add $16.40 to the price of every ton to apply on the RFC loan, readily agreed.

So Chairman Norris and Morris Pendleton, president of Los Angeles Plomb Tool Co., went to Washington, buttonholed Congressmen, talked to RFC officials, pleaded the case of Henry Kaiser. Henry lay low. So did the RFC. The timing could scarcely have been worse. The RFC itself is fighting for its life and is in no position to agree to Kaiser's proposal, even if it wanted to. Nevertheless, there was a chance that Kaiser would eventually work out a deal for Fontana if only because the probable alternatives looked worse to the West's politicians. If Kaiser lost Fontana, it might shut down or fall into the hands of eastern steel interests.

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