Good Humor Man

Franklin Roosevelt, by nature ebullient, loves good news. All White House veterans know he will seize any chance to publish an optimistic report. Last week he did just that.

The report was on the capacity of the steel industry, made by Gano Dunn, 70, president of J. G. White Engineering Co., now an OPMite in the production division. Awaited for weeks, Engineer Dunn's report was expected to settle a hot defense controversy over steel: how much (if any) should the industry expand? Beaming cheer, the President said there had been a lot of loose talk about the adequacy of steel capacity; that the Dunn report showed ample facilities for all domestic defense and civilian needs, as well as for those of the nations defending democracy.

He added that no priorities need be established at present for steel: that present production could even be increased if needed; and that anyone who can't get enough steel need only come to Washington. He did note a "small" shortage of coke, a "slight" shortage of pig-iron ingots, and a need to shorten the closed-for-repairs periods normal in steel furnace operation.

Dazzled by the happy tidings, newsmen turned to the Dunn report. But in Mr. Dunn's blend of statistics and technical language, they found no such rose-colored picture. In 1940 the U. S. produced 66,674,000 net tons of steel ingots--a record. But during December the industry was working at a yearly production rate of 77,496,000 tons. Dunn figures that present U. S. steel capacity can be upped to a "reliable capacity" of 87,576,099 tons, merely by cutting down the closed-for-repairs period by 25% and adding excess capacity not now included in estimates. In addition, present expansion plans will bring "reliable" capacity to 91,124,718 tons by this year's end. Mr. Dunn also figured that if the national income is $80 billions in 1941 and $90 billions in 1942, and if certain measures are undertaken there will be an excess of ingot-producing capacity over total requirements of 10,100,000 tons in 1941, and 2,100,000 in 1942.

The "ifs" were the part of the report the President had skipped. First "if" was pig iron. Pig output must be increased by 1,675,000 tons in 1941-42. Second "if" was coke: its output, already a bottleneck, must be increased by 8,031,000 tons. Third "if" was allocation of orders: maximum production, said Dunn, can be reached only if orders are spread evenly throughout the industry. Fourth "if" was a shift back to Bessemer steel: little-used old Bessemer ovens should be put to making steel for barbed wire, nails, low-grade pipe, etc.

But the "ifs" of steel did not end there. Although Dunn did not say so, England, because of her shipping troubles, has been taking delivery on less & less U. S. steel. If she had continued taking steel at the August 1940 rate (1,000,000 tons), there would be no margin between U. S. production and consumption (including exports) now.

An enormous "if" was Engineer Dunn's major premise: that the national income (which was $74.3 billions in 1940) will be $80 billions in 1941. Such New Dealers as Leon Henderson and such a middle-reader as Jesse Jones both agree the figure will be higher. If it is much higher, if exports to England increase, if any of the numerous Dunn "ifs" break down, there will be a real steel shortage soon.

A glummer President, reading the reports to the press, might just as honestly have emphasized the bottlenecks, the shortages at hand and to come. But Franklin Roosevelt, beaming like Jack Horner with a plum on his thumb, dismissed his press conference in high humor, with an air of bring-on-the-next-problem, haul-this-one-away.

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