End in Sight?

The last great shortage--steel--showed unexpected signs of coming to an end. Steel plants piled up their tenth consecutive week of overcapacity production; there was a drop in orders for such essential products as freight cars. Last week the Department of Commerce took official note of the increased supply. It announced that in June it would reduce the amount of steel allocated for essential uses, thus making another 95,000 tons a month available to everyone.

The increased supply brought other changes. The roundabout and expensive conversion deals, through which consumer-goods manufacturers obtained about 1,000,000 tons of steel last year, were no longer necessary. As a result, Republic Steel Corp. closed down three of its Canton, Ohio furnaces used for conversion work. Demand for special steels had also slumped enough to cause Allegheny Ludlum Steel Corp. and Crucible Steel Co. to shut down three furnaces each.

There were even some price cuts. The first postwar dip in the price of zinc (from 17 1/2-c- to 16-c- a Ib.) was quickly passed on with lower prices on galvanized steel products. What few premium prices remained were gradually being dropped. Henry Kaiser cut the price of steel from his Fontana, Calif, plant $10 to $39 a ton, thereby wiping out increases made last August.

Steelmen were not sure how long they could keep up their overcapacity production; the normal summer letdown was sure to cut output somewhat. But they thought that, barring a long coal strike, all industries would be able to get all the steel they wanted within six months.

Overall U.S. production was slackening a bit. The Federal Reserve Board's production index (1935-39 average 100) dropped two points in February to 189, five points below a year ago. The Bureau of Labor Statistics' cost of living index slipped 1.1% between Jan. 15 and Feb. 15 to 169--the greatest monthly drop in nine years (but the index was still 27% above June 1946, when OPA was killed).

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