More Money, More Zinc

Price Boss Leon Henderson has long held the theory that price increases which stimulate needed production are not inflationary. Last week he established his first price ceiling putting that theory into practice.

In the month before war began, the price of zinc was 4.72 a lb. and U.S. production was 41,000 tons. Then the price rose to 7.25-c-, where it has been pegged by voluntary agreement for a year. Production rose too--to an all-time high of 75,524 tons last August. But for civilian requirements, Lend-Lease and the Army (brass cartridge cases) the U.S. now needs about 97,000 tons a month.

So last week Henderson's Office of Price Administration announced a new ceiling: 8.25-c- for prime Western, highest published price for zinc (with brief exceptions) since World War I. The extra penny, said OPA, would bring out more low-grade ore, help hard-pressed mine owners in the Tri-State zinc region (Missouri/Oklahoma, Kansas) pay wages that would keep miners from shifting to other jobs. One estimate of the likely production boost: 10-15%.

A similar price increase is likely for lead (now pegged at 5.8-c-), which is frequently mined with zinc. But for metals like copper--where big producers can work profitably at capacity under the present 12-c- ceiling--Henderson favors a two-price system to bring out marginal production. His plan: the ceiling will stay at 12-c-, but defense agencies will buy from high-cost producers at a higher figure.

The first two-level ceiling of this type was established last fortnight over acetic acid. For acetic acid (familiar to housewives as the basic ingredient of vinegar) made by the inexpensive synthetic method, the maximum is 6.25-c- a lb. But for natural acid the maximum is 7.25-c-.

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