The Big Experiment

It was a little like the old Blue Eagle days--without the fanfare. In Washington last week, the oil and steel industries quietly set up plans for voluntary allocation which they hoped would ease the nation's two greatest shortages. The first under the new anti-inflation law, the industry-wide agreements were exempt from the antitrust laws.

The 23 members of the Steel Advisory Committee needed only three hours with Secretary of Commerce W. Averell Harriman to work out their plan. The steelmen agreed to set aside up to 10% of the industry's production and see that the steel reached industries designated by Harriman. At the start, the steel will go to four industries--freight cars, oil refinery equipment, farm machinery and low-cost housing--where greater production is needed to break other shortages.

"There will be no general allocation [of all steel]," said Harriman, "only specific allocations of specific amounts for specific uses." He did not think the allocations would work a hardship on other steel users. The automobile industry, for example, would probably not be cut. The allocations would be met, he hoped, by asking the railroads and other big steel users to put off maintenance and construction work not absolutely necessary.

The Department of the Interior's J. A. ("Cap") Krug made the deal with the oil industry. In addition to reducing East Coast gasoline refining in favor of the more critically needed' fuel oils, the deal permits oil companies to pool and swap supplies, thus even up the flow of oil. (Because of the hue & cry over oil exports --actually a mere dribble--the Government also ordered an 18 1/2% cut in them.)

Soon Harriman and other department heads would try to set up similar schemes with the farm implements, petroleum equipment and construction materials industries. Harriman doubted whether the plans would turn out to be anything more than talky-talk. But industry, which knew that controls might be imposed if the voluntary ones fail, had a big stake in making the plans work.

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