THE ADMINISTRATION: Deadlock & Compromise

In the week following the Ford and Chrysler wage settlements, not a single other important agreement was reached between labor and management. The steel strike entered its third week, the General Motors strike its third month.

Even so, there was no violence, hardly even a rise in tempers. In Pittsburgh, a judge issued an injunction limiting pickets at Carnegie-Illinois’ Homestead plant to ten at each gate. The union protested, but obeyed. In Manhattan, Novelist Elizabeth Janeway (The Walsh Girls) formed a committee to raise funds for G.M. strikers, got $35,000 in three days from a heterogeneous list of contributors who agreed with the slogan “Hunger Must Not ‘Be a Weapon.” The committee promptly began sending the money out to buy food and pay rents. In New York, the city’s Welfare Department agreed to aid Western Union strikers who were in need.

G.M. and the United Auto Workers were brought together again by labor conciliator James F. Dewey, an old hand at composing Detroit strikes, but the question of wages was still a stumbling block. Day after day the headlines radiated optimism, but there were few facts on which to base it.

The scene had shifted to Washington. The issue now was prices.

Change of Opponents. By now Harry Truman was firmly committed to wage increases of 18½¢ to 19½¢ an hour. Labor, all down the line, had accepted the President’s figure. The battle was now joined between Government and industry on how high prices should go to compensate for the wage increases. Harry Truman had not long to wait to hear industry’s side.

Irving S. Olds, board chairman of United States Steel, stepped up to demand a steel price increase “greatly in excess of $6.25 a ton.” (The Government had been willing to agree to $4.)

Henry Ford II, having committed his company to a wage increase of 18¢ an hour, called for the abolition of all automobile price controls. Said he: “Nobody wants runaway inflation. Inflation grows out of scarcity.”

Faced with this impasse, the Administration, at first divided on policy, was busy talking itself into a compromise. All week long Harry Truman conferred with OWMR Boss John Snyder and Stabilization Administrator John Caskie Collet, who leaned toward the theory of increased prices to get production going. Then the President summoned (from a Southern vacation) Price Boss Chester Bowles, who was determined to hold the line.

Emerging from a 45-minute White House conference, Chester Bowles was mum. But two days later he was back at the White House; rumors of his resignation suddenly died down.

Chester Bowles had apparently been persuaded to go along with a steel price rise now (some said it would be about $6 a ton), with the promise that he would get full backing to hold the price line in the future. In effect, he had been given the assignment of working out with John Snyder a new price-wage structure—at a higher level.