Last Licks

Philip Murray waited for silence. The C.I.O. Steelworkers' president was concluding his final plea for a 30-c- -an-hour package of wage increases, pensions and social insurance. Across the oak-paneled hearing room sat Enders Voorhees, chairman of U.S. Steel Corp.'s finance committee, who had presented the core of Big Steel's arguments. Voorhees, snapped Murray, did not understand the working man: "He's lived a ... juicy life . . . [this] fat, sassy and very opulent man." And if Voorhees did not believe in pensions, asked Murray, "why does he not mention his own $70,323 pension?" The union rested its case.

This week the steel companies got in their last licks. Said Robert Patterson, ex-Secretary of War and now a lawyer representing the small companies: "The facts brought out . . . make it plain that there is no fair basis for any increase in labor cost at this time."

After three weeks and 800,000 words of testimony, the cases for & against a raise for the nearly 1,000,000 members of the

United Steelworkers of America had been made before President Truman's fact-finding board.

Wives & War Bonds. The union's case, argued chiefly by Murray and Labor Economist Robert Nathan, was based mainly on the claim that the workers needed more money. Said Murray: "To the wife of any steelworker the high cost of living is a household reality . . . Savings have been depleted. War bonds have been cashed in."

Furthermore, said Nathan, the workers had earned a raise: "The buying power of hourly rates of pay ... in the steel industry increased one-seventh between 1939 and 1949, whereas productivity per man-hour rose by 50% ... In the short run, changes in productivity are more affected by changes in ... labor skill than by technology." (Another labor witness later conceded that "it is almost impossible to separate the contributions made by the worker, the machine, or management to increased productivity.")

According to union statistics, the steel companies could afford to pay. For the first half of 1949, the union said, profits of the 19 leading companies were estimated at $301 million, up 54.6% from 1948's first half (when operations were slowed down by a coal strike). In fact, said Nathan, profits had been even larger; many companies had hidden them in swollen depreciation funds. In the end, he argued, the raise would be good for the entire U.S., since "higher wages are proposed as a means of lifting buying power."

Suspicions & Possibilities. In their turn, the steel companies bitterly denounced the whole idea of a fact-finding board as an abrogation of collective bargaining. They suspected, with reason, that the Steelworkers had played for a fact-finding board from the start, hoping that their friend Harry Truman would appoint friends of labor to such a board.

But when the steelmen tried to say so, they put their foot in it. "[The] irregular procedure," said Bethehem Steel Corp.'s President Arthur B. Hgmer, "appears to be designed merely as a vehicle for forcing upon us important concessions." He was cut short by Board Member Samuel Rosenman, ex-New Deal brain-truster.* "Am I to understand," he asked, "that because other boards recommended an increase, you assume that we necessarily were set up for [that] purpose?"

Replied Homer: "Having nothing to the contrary, we could only assume that there was a good possibility of it going the same way." Rosenman snapped back: "Personally, I think that there ought to be an apology to this board."

Pensions & Profits. To many businessmen it looked as if steel had botched the job. Said Barren's Business & Financial Weekly: "Unfortunately . . . few steelmen have seen fit to use rational arguments in presenting their case ... It would be amazing if [the fact finders] did not develop the strongest possible resentment against the steel companies." Actually, to anyone who read all the arguments, the steelmen had built up a good case, answering the union point by point.

They contended that the union should not even be allowed to discuss pensions at this time: the contract permitted negotiations to be opened only on wages, and pensions were not wages. (The union countered with a recent federal court decision holding that pensions could be considered part of wages.) As for wages, said

Republic Steel's Charles M. White, steelworkers have done all right for themselves in the last decade. "Their average hourly earnings [at Republic] have increased --97% [v.] a rise of approximately 70% in the cost of living."

Steel had made good profits, the steelmen conceded, but they had been poured into new equipment and modernization programs. This, and not increased labor efficiency, was the reason for higher productivity, they said. Furthermore, the rate of steel production had dropped 15% in the last six months and profits were down. Some small companies, like Lukens Steel Co., insisted that they could not afford to pay increases at the current rate of earnings. Said Lukens' Robert Wolcott: "Wage increases can't be paid out of past profits . . . [In] the four-week . . . period ending July 9, 1949 . . . Lukens . . . showed a net loss of $13,081."

Effect & Pattern. With all the testimony in, the board retired for a fortnight to draft its recommendations. Though neither side has to accept the findings, they are bound to have a potent effect; the side that flouts them may well have to fight public opinion in case of a strike. The steelworkers have set a Sept. 14 deadline for an agreement--or a strike.

An agreement would set a fourth-round wage pattern for all industry. The C.I.O. autoworkers, already set to strike against Ford for similar demands, are dragging their feet. So are John L. Lewis' mineworkers, whose contract has expired. All told, more than 1,500,000 unionists are watching to see if it is peace or war.

*Other members: David L. Cole, onetime head of New York State's mediation board; Carroll P. Daugherty, labor-minded economics professor from Northwestern University.

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