Two Sides of the Street

Before a Senate subcommittee investigating business profits last week sat U.S. Steel Corp.'s Ben Fairless, giving the Senators the facts on his company's high earnings. Midway in his testimony, Wyoming's hawk-browed New Dealing Senator Joseph C. O'Mahoney, veteran critic of big business, opened up on a favorite subject: the steel shortage.

Had Fairless given any thought to the steel shortage? "Are we going to sit here and see this [steel] demand fall," roared O'Mahoney, "or are we going to take action which will maintain the demand . . .? On every hand you find evidence of popular desire for things which are not being supplied . . . But you find also that because of inflation, people's needs are outrunning their income. Shall we just wait?"

"I have a little difficulty following on which side of the street you are," said Ben Fairless.

"That was your mistake, you see," O'Mahoney snapped back. "You just assumed that I am on some side of the street. I know the side on which you are, Mr. Fairless."

The Same Side of the Street. "I think that I am with you," said Fairless.

"You think my mind is made up before I come here," cried O'Mahoney.

"Oh no," said Fairless, "I am just as anxious or more anxious to talk to you than you are to talk to me."

"You cannot imagine how I just long for these conversations," said O'Mahoney ironically.

After this tiff, Fairless' statement that in 1949 the steel industry hoped to turn out 68 million tons of finished steel, 3,000,000 more than the past year's peacetime record, seemed like an anticlimax. His point: without the industry's high earnings, steel companies could never have built the plants for this expansion. In the first nine months of 1948 U.S. Steel had spent $198 million on property.

Another witness was General Electric Co.'s Charles E. Wilson. When he told the committee that G.E. would do $100 million worth of Government business next year (see below), O'Mahoney cracked: "That's pretty good business."

The Other Side of Profits. "In what way?" shot back Wilson. "It's rotten business. It only makes 1.2% net." G.E.'s rate of profit on civilian goods--7.2% on $1.3 billion in sales--was not enough, said Wilson, to pay for expansion and to protect G.E. against a sudden sales slump.

O'Mahoney was not convinced. He thought the hearings were merely staged so businessmen could "rationalize why taxes shouldn't be increased." He was in favor of an excess profits tax, and he has a good chance to head the Joint Committee on the Economic Report in the next Congress, a strategic spot from which to push such a tax.

The hearings ended, Vermont's Senator Ralph E. Flanders, subcommittee chairman, disagreed with O'Mahoney. Flanders, who said he had gone into the hearings with an open mind, concluded: "There seems to be better justification for profits than I had expected."

This file is automatically generated by a robot program, so reader's discretion is required.