Undeclared Truce

"The cut-throat competitive practices prevalent in the industry are leading the nation away from the objectives of recovery and into a devastating economic tailspin."

That worried comment--referring, ironically enough, to the steel industry, which scarcely three months ago headed the Anti-Monopoly Committee's list of suspects--was made last fortnight by Chairman Philip Murray of the Steel Workers Organizing Committee. Last week Philip Murray had reason to be reassured, for a two-month state of undeclared war in the industry was ended, temporarily at least, by an undeclared truce.

Big Steel, which once produced 90% of the nation's steel, now produces only 37% and is heartily tired both of being called monopolistic and of losing business to independent companies. Last summer, therefore, it abolished price differentials between its Pittsburgh. Chicago and Birmingham plants which had compensated independent mills for their competitive disadvantages.

Hopping mad, certain independents surreptitiously undercut the official prices Big Steel had set for the industry. For a while Big Steel ignored this as a petty annoyance, but fortnight ago the buying demand of the automobile industry forced even Big Steel to shade its prices some $4 a ton, lowering cold-rolled sheets to $62 compared with $73 last spring. When an independent then cut the price another $2, Philip Murray was not the only steel man to fret. With the industry working at only 53% of capacity, it was clear that such price-cutting, if continued, must mean heavy losses, possible wage cuts.

Last week prices suddenly returned to the official level. As usual, no steel company would comment, but it was clear: 1) that the automobile companies had completed most of their fall buying; 2) that by finally acknowledging and meeting the surreptitious price cuts, Big Steel had convinced its angry competitors that, even if it is not a monopoly, it is still too big for them to trade punches with.

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