Price Hikes Ahead?

"The clear fact is that we do not make a satisfactory return on the vast sums of money invested. Surely one of the most important misconceptions in the public mind is that a rise in the price of steel--and only steel--can trigger inflation."

The speaker was not U.S. Steel's Roger Blough, from whom the words would have seemed familiar, or any of the other usual spokesmen for the steel industry. It was Joseph L. Block, chairman of Chicago's Inland Steel and the man who, at President Kennedy's bidding, held the price line in 1962, thus forcing his colleagues to rescind their controversial price hikes.

Joe Block's statement was a clear indication that some sort of overall steel-price increase is in the offing. It came after months of similar rumblings. Roger Blough first broke a long silence on the subject last July by stating flatly that prices are "not as high as they should be." Next, Bethlehem's Chairman Edmund F. Martin expressed dissatisfaction with the earnings of the second-biggest steel firm and planted a broad hint: "We are still looking at the price situation."

The steelmen have many facts on their side. The industry made a 7.2% return on its net worth last year v. an 11.5% return for U.S. manufacturers as a whole, and demand for steel has grown so strong that there are shortages and long delivery lags for some kinds. All the steelmen have to do now is convince Lyndon Johnson, who two months ago took note of the steel industry's rising profits and diminishing costs, and warned of the effect that a general steel-price increase would have on price stability.

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