Business: Squeeze on the Nation

The ten-week-old steel strike began to cramp the nation’s economy. The Federal Reserve Board reported that during August alone, industrial production declined on the basis of the 1947-49 average from the June alltime record of 155% to 149%.

Personal income in August was also nipped by the strike, and fell to a seasonally adjusted annual rate of $381.4 billion, $2.6 billion below the July level of the nation’s wage and salary payments. In five manufacturing industries closely allied to steel—primary metals, mining, transportation, fabricated metals and machinery—the August annual rate of personal income was down $3 billion from the July annual rate and $4.5 billion below the June rate. Since the steel strike started last July 15, an estimated 500,000 steelworkers and 155,000 workers laid off in allied industries have lost something like $700 million in wages.

Grey Market. Across the nation last week as manufacturers scrambled for steel, there was a growing grey market, with prices of some steels up to $250 a ton, almost double the list price. Layoffs caused by lack of steel continued to mount. General Electric Co. began laying off 1,400 workers in its heavy appliance manufacturing center at Louisville, said it will have to close down its entire operation employing 11,000 unless the steel strike ends within three weeks. Allis-Chalmers Manufacturing Co. last week laid off 521 workers at two Midwestern plants, will drop 1,200 more by the end of the month. At General Motors Corp.’s AC Spark Plug Division plant in Flint, Mich, and Harrison Radiator Division in Lockport, N.Y., 900 employees were put on a four-instead of a regular five-day week to conserve steel for use by divisions with less inventory. Some companies with big inventories were in trouble; they were running out of specific types, as shortages among suppliers cut off vital parts.

The nation’s railroads, among the outside industries hardest hit by the strike, have lost 1,340,000 cars of freight since the strike began. Last week the Association of American Railroads estimated that the strike has cost the roads $320 million in revenues through Sept. 12.

$ 1,000,000 a Day. Despite the strike’s worsening effects, chances for a settlement last week seemed more remote than ever. The steelworkers accepted, but the steel companies turned down, an offer by President Eisenhower to appoint a non-Government fact-finding committee. To aid workers, the U.A.W. sent $1,000,000, and at the biennial A.F.L.-C.I.O. convention in San Francisco the federation urged its 13 million members to give an hour’s pay each month to aid the striking steelworkers. If all workers contributed, the strike fund would be an estimated $1,000,000 a day, largest in labor history.

At the convention, Secretary of Labor James Mitchell said that the Administration would have “no alternative” but to invoke the Taft-Hartley Act—and send the strikers back to work for 80 days—if the strike did not end soon. He also warned the steel companies that they were being very “shortsighted” in not finding a means to end the strike. If the Taft-Hartley Act was invoked, and there was no settlement during the 80-day period, Mitchell said that legislation “inimical” to the steel companies might well be passed by Congress.