$ 120 Million for Dave

In a televised ceremony at Pittsburgh's William Penn Hotel last week, U.S. Steel Vice President John Stephens and President Dave McDonald of the 1,200,000-man United Steel Workers (C.I.O.) signed a new contract with surprisingly generous terms. The industry generally fell in line.

Wages went up 5-c- an hour (to an average $93.60 for a 40-hour week), medical benefits 2-c- an hour, and top pensions from $100 monthly to $140. Total benefits: 9 to 12-c- an hour, adding at least $120 million to steel's annual $3.6 billion wage bill.

To help pay the expense, the industry forthwith upped basic steel prices $3 a ton. As usual, steel will probably set a national pattern for the year: peaceful labor agreements, with 5-c--an-hour wage raises, more fringe benefits and slight price rises.

With production down to two-thirds of capacity--and with ample inventory--steel management might have been expected to ride out a strike rather than cut narrowed profit margins any further. Why did the managers agree without a fight? Partly because they acknowledged an obligation to increase fringe benefits, frozen by contract since 1949. But a more significant reason was their high regard for U.S.W. President McDonald. By giving him a fat new contract without trouble, management also gave him increased prestige and power to match up against his old antagonist, C.I.O. President Walter Reuther. Said one top steel executive: "The steel industry knows that it is going to have to deal with the union problem on a permanent basis. It therefore wants a sober, responsible, conservative man running the union, and not some Socialist element."

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