STEEL PRICE RISES

Press, Volume CI, Issue 29798, 14 April 1962, Page 11

STEEL PRICE RISES

Anti-Trust Inquiry Ordered In U.S.

(A Z. Press Assn.—Copyright) WASHINGTON, April 13. Ihe Kennedy Administration yesterday opened a wideranging offensive against the United States steel industry, spearheaded by a grand jury investigation of possible violations of anti-trust laws.

The Attorney-General (Mr Robert Kennedy) announced that he had ordered the grand jury investigation of whether a new round of steel price increases involved criminal violations of the anti-trust laws.

The increases in steel prices were announced on Wednesday, and President Kennedy immediately condemned the move.

The President. visibly angry, told a press conference that the increase of six

dollars a ton was "unjustifiable and irresponsible defiance of the public interest.” He went on to speak of the

‘utter contempt” shown by steel executives for the interests of 185 million Americans.

Yesterday the chairman of the United States Steel Corporation. Mr Roger Lough, defended the industry’s increased prices.

In a direct denial of the President’s statement. Mr Lough maintained "there was nothing irresponsible” about it. No-one could properly question United States Steel’s concern for the "welfare. strength and vitality of this nation.” he stated. United States Steel had no understanding with anyone on prices in its negotiations with the United Steelworkers’ Union which resulted in a new labour contract. His corporation felt it was fulfilling its responsibility to the nation and its stockholders.

Yesterday, the Secretary of Commerce. Mr Luther Hodges, said that a handful of men said in effect, that

United States Steel came first, the United States of America second. He said: "I am shocked and disappointed at th s totally unexpected development. “I do not enjoy criticising a major American industry. I am a confirmed supporter of our free enterprise system. I do not want to see any encroachment by Government on private decision-making which can be avoided "But I think there is a clear responsiblity for the Federal Government to speak out when private actions are taken which may well jeopardise the continuation of a healthy free enterprise system.”

If indicted and convicted on criminal anti-trust charges the steel companies would face fines of up to 50.000 dollars for each offence. Company officials involved could be sentenced to one year in prison and fined 50,000 dollars.

If the Government should decide to try to break up United States Steel into smaller units it w’ould have to file a separate civil suit under the Sherman anti-trust law. This would not involve punitive penalties. Any anti-trust suit would

be based on charges that United States Steel holds excessive control over the industry because of its 40 per cent, share of the market and its power over pricing. Other firms fell in line after United States Steel announced the first price increase.

America's fifth largest steel producer, the National Steel Corporation, announced yesterday that it will increase prices by about six dollars a ton from today. The same increase has already been announced by six other major steel companies. The chairman of National Steel. Mr Thomas Mills Op. said: "There can be no doubt that the several increases in costs since the last price increase in August. 1958, abundantly justify even greater price adjustments than are now being made.

'However, the severe competition that we now must meet both from within and from without the domestic steel industry in the sale of our products limits the amount of increase that can be sustained.”

The acting White House press secretary, Mr Andrew Haitcher, said in Washington yesterday that almost threequarters of a total of 500 telegrams received had supported President Kennedy’s attack on the steel industry. Some of the telegrams were from stockholders of United States Steel “praising the President for his courage,” he said. The President was present for 15 minutes at a 45-oninute conference at the White House yesterday, when Cabinet members discussed the probable effects of the price increase on toe defence budget and the economy. Mr Hatcher said that one of the major problems involved was the estimate that the steel increase would boost defence spending by 1090 million dollars.

Asked if today's meeting thourlht there had been collusion between the steel companies, which followed each other within hours in announcing the increases. Mr Hatcher said the meeting “never got into a study of collusion.” This was a matter for the Justice Department.