Turnabout

For Pennsylvania's Edward Martin, whose Senate subcommittee had been investigating the steel shortage for four months, the stage was set for a showdown. From scores of small businessmen, the committee had gathered plenty of evidence to show that the supply and distribution of steel were far from what they should be (TIME, June 9). Last week, the committee called the heads of the biggest steel companies up on the carpet.

Around the long table in the Senate's main conference room, the steelmakers assembled, with some unpleasant charges still ringing in their ears. The C.I.O.'s United Steel Workers had charged that present U.S. steel capacity (91 million tons a year) was about 20 million tons below future normal demands. The union demanded Government action to overcome the steelmakers' "smug and intransigent" hedging against a possible slump. Walter Reuther, president of the C.I.O.'s United Automobile Workers, had for months been accusing them of promoting "planned scarcity."

Senator Martin opened the hearing with what seemed to be stern words. "I realize that steel is a tough business," said he. "But in the steel business, or in any other business, management has no more right to adopt a public-be-damned attitude than labor or Government." Such an attitude, he warned, might lead to Government policing and even nationalization.

The Cue. But it was soon plain that Senator Martin was only sounding a rather obvious generality. Ed Martin, a longtime friend of steelmen, had allowed them to obtain advance notice of his remarks. As he spoke, newsmen already had copies of the steelmen's reply. Up rose U.S. Steel's President Benjamin Fairless to deliver it. "It is simply amazing to me," he said, "that anyone should suggest, by inference or otherwise, that U.S. Steel has a public-be-damned attitude. Our attitude is, and will always continue to be, just the reverse."

Then the steelmen nimbly turned the investigating committee into a sounding-board to broadcast their case. Bethlehem Steel's Eugene Grace deplored--but denied any responsibility for--the existence of a racketeering "grey market" in steel. Present extraordinary demands for steel could have been met, said Jones & Laughlin's Chairman Ben Moreell, if strikes had not caused a postwar loss of 18 million tons of production.

Ad Lib. What about expansion? Ben Moreell reported that the industry was currently engaged in a $1 billion program which would increase capacity by 2,500.000 tons by the end of 1948. Same day, Jones & Laughlin announced a large mine-development program "in order to produce more and better steel"; Columbia Steel, a Big Steel subsidiary, announced plans for a 300,000-ton-a-year sheet-steel mill near Los Angeles.

How were the industry's supplies of ore, asked Martin. That, replied Fairless, was a controversial subject. "Well, maybe that is a little too controversial," said Martin quickly.

But the hearing did uncover one shocking fact. Last spring, when it was firmly resisting pressure to expand, the industry had assured its customers that the worst of the steel shortage would be over by year's end. Last week Fairless, along with Grace and Republic's Tom Girdler, predicted that the shortage would last at least two more years.

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