Go & Stop

With a hefty swipe of a stainless steel shovel, President Benjamin F. Fairless started work last week on U.S. Steel Corp.'s new $400 million plant near Morris ville, Pa. The "Fairless Works" will pour 1,800,000 tons of steel a year, add about 5% to Big Steel's capacity. But the Morrisville plant was just the start of a rush; Jones & Laughlin, Armco Steel and Bethlehem were also hustling to multiply their capacity, along with a swarm of hastily formed new steel companies.

The pistol shot that started the stampede was the clause in the Revenue Act of 1950, allowing companies to write off the cost of defense plants in five years, instead of the usual 20. Last week the Congressional Joint Economic Committee reported that of $1.8 billion of emergency amortization certificates issued, more than 90% had been given to the steel industry. The Government, which had grumbled only eight months ago about the steelmakers' failure to expand fast enough, last week worried that the industry might be expanding too fast. At the present rate, U.S. steel capacity will increase about 14% by the end of 1952, almost up to the 120 million tons which the President's Committee of Economic Advisers hoped might be reached in four years. Since it takes three-quarters of a ton of finished steel to build one ton of steel capacity, Defense Mobilizer Charles E. Wilson worried that the industry might be using more metal than the arms program can afford. Last week the flow of amortization orders from the Defense Production Administration slowed down to a trickle. Steelmen predicted that Wilson would soon stop them altogether to let the country catch up with the industry.

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