Maybe . . .

STEEL Maybe . . The West Coast heard some lively news last week: U.S. Steel was ready to dicker with the Defense Plant Corp. to buy or lease the $200,000,000 Geneva steel plant near Provo. Utah.

Geneva, now run for the Government by Big Steel, is fondly regarded by Westerners as the best bet to bring them cheap postwar steel, let them grow into their industrial long pants. But until Big Steel broke its toplofty silence, no one was willing to gamble on the prospects of Geneva doing the job.

The offer to talk turkey came from Big Steel's President, Benjamin F. Fairless, as Western steel users prepared to meet this week in Salt Lake City to discuss the postwar fate of Western steel. In letting out the news, Fairless gave them a surprising new item to chew over. Big Steel, he said, is also ready to dicker with DPC to buy or lease the $110,000,000 steel plant at Fontana, Calif., built and operated by Shipbuilder Henry J. Kaiser.

Hands Off Fontana. This pass at Fontana made Henry Kaiser roar. Fontana has long been the apple of his eye. He built it in 1942 despite all that the War Production Board could do to stop him, now looks on it as the keystone of a Kaiser postwar empire. Said he: "Fontana is not and will not be for sale." Kaiser repeated an old promise. He plans to operate Fontana himself after the war, would sink another $37,000,000 into Fontana to convert it to peacetime steelmaking.

Henry Kaiser added that furthermore, he and not DPC, owns Fontana, even if the Reconstruction Finance Corp. holds a $110,000,000 mortgage. Although RFC lent him the cash to build the plant, it cannot take over unless he stops paying it back. This he does not intend to do.

Through a canny deal with RFC, Kaiser now takes the profits from some of his shipyards and applies them on his Fontana loan. If he could not use it this way, most of the money would probably go to the Government anyhow in excess-profits taxes. He has already paid off $7,500,000 has another $8,000,000 set aside to pay. The balance is still big. But he warned Big Steel that he is in Western steelmaking to stay. As a matter of fact, said Henry Kaiser, his men are now inspecting Geneva. He may buy that, too; Big Steel has no option on the place.

How Much for Geneva? All this had one good effect. DPC Boss Sam Husbands' engineers are at work figuring out a price for Geneva. It will probably be well under its cost. Allowance for depreciation and high wartime construction costs may knock off as much as $50,000,000 of the original $200,000,000. And DPC may also take into account the fact that Geneva is still an expensive place for steelmaking. In the 'first six months last year, it earned only $2,689,386, with no allowance for depreciation, interest, etc., which would have put it in the red.

Big Steel hopes to do better when all the bugs of the new plant are out. But it has still to prove that Geneva can turn out steel as cheaply as Eastern plants, as its backers claim, or whether rail rates will be low enough to let it undersell Eastern mills on the West Coast.

There is one more obstacle in Big Steel's way. The Antitrust Division might turn down any deal, on the grounds that Big Steel is big enough already. For the same reason, there are many Westerners who would rather see Geneva operated by someone else. But Big Steel's offer gave them the first concrete reason to hope that Geneva would be operated, somehow.

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