Rolling Back Steel

Maybe the Council on Wage and Price Stability is not the 90-lb. weakling in the Administration's anti-inflation lineup after all. Established 4 1/2 months ago with a mission to "monitor" prices but no authority to order rollbacks, the council seemed pusillanimous in its first effort of consequence: an unsuccessful attempt to jawbone big price reductions from sugar refiners early in December. But last week the council made a modest comeback. It got U.S. Steel to trim its recent price increases and pledge publicly to do its best to impose no new ones for at least six months.

Big Steel's small but still significant retreat came one week after its announcement of price increases ranging as high as 8% on some basic steel products. Much as he did when General Motors sprang some hefty car price increases on his brand-new Administration last August, President Ford issued a statement that he was "very disappointed" at the news and doubtful that the price hikes were justified. As it happened, the Wage and Price Council had already taken it upon itself to fire off a telegram to U.S. Steel's New York headquarters asking the company to explain the increases. Three days later, a covey of U.S. Steel executives led by Board Chairman Edgar B. Speer arrived in Washington. Although U.S. Steel had raised prices by 23% earlier this year, the officials insisted that the new increases were needed to help the company "catch up" with recent run-ups in the cost of coal, iron ore and other materials--all of which have added up to a $20 rise in the cost of producing a ton of steel in just five months.

Council Director Albert E. Rees agreed that "part" of the increase was justified, but pointedly left it up to the company to do something about the rest. At a meeting in Philadelphia last week, Speer told Rees of his plan for an inch-back: a series of reductions that would have the effect of cutting the size of the original increase from 4.7% overall back to 4%, plus a promise to hold the price line for at least six months, barring "major unforeseen economic events."

Invitation to Explain. The move created pressures for similar reductions on the part of Bethlehem Steel, the U.S.'s second biggest producer, and smaller Wheeling-Pittsburgh Steel Corp., both of which had followed U.S. Steel's original announcement with price hikes of their own averaging 2 1/2 to 5%. At the council's invitation, Bethlehem officials arrived in Washington at week's end to explain their increase.

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