STATE OF BUSINESS: Reprieve in Steel

Through the medium of a calmly worded letter from the White House, the U.S. last week got a last-minute reprieve from a nationwide steel strike. The negotiations were deadlocked, and both sides were bracing for a June 30 walkout, when President Eisenhower wrote to United Steelworkers President David McDonald, giving the union a face-saving way to postpone a strike that neither labor nor management wants. Wrote the President: “I suggest to both parties to this dispute that they continue to bargain without interruption of production until all of the terms and conditions of a new contract are agreed upon.”

Within minutes after he received Ike’s letter, Dave McDonald announced that the union would stay at work until July 15. He also retreated from the stand that he would extend the contract only if any wage hikes in any new contract would be retroactive to July 1, an issue on which previous negotiations had floundered. U.S. Steel Chairman Roger M. Blough, the man who has most to say about bargaining matters, and the heads of eleven other steel companies agreed to the new terms. This week negotiations were resumed at Manhattan’s Hotel Roosevelt.

No Emergency. Ike’s letter was an answer to a letter from McDonald, who was so anxious to have the Administration take a hand in negotiations that he asked the President to appoint a fact-finding board to look into the issues. Arthur J. Goldberg, the union’s general counsel, phoned Labor Secretary James P. Mitchell in Washington while McDonald’s let ter was still on the way, told him what was in it. Mitchell, who had been keeping in touch with both sides, got together with Vice President Nixon and White House Counsel Gerald Morgan and worked out a reply. Then he called the union, told it what to expect. Ike turned down McDonald’s request for a fact-finding board because, he said, he has authority to do so only in emergencies (with steel inventories high, a steel strike would not immediately be considered an emergency). While Ike said he did not believe the Government should intervene, he did offer McDonald a way to continue negotiations “in the interest of the steel workers, the steel companies and the public.”

No Bargaining. The Administration’s peacemaking bid was based on a firm belief that the union does not want a strike. Key Administration officials feel that the steel companies’ insistence on no wage increase is an unrealistic policy, adopted entirely as a bargaining point—though they also feel that the industry is in a much better position to take a strike than in 1956. Up to now, both sides have spent so much time arguing the issues in public that they have not got down to any serious bargaining. The President’s letter was calculated to give them the time to do just that, and brought fresh hope for a no-strike settlement.

While the Administration’s action was forestalling a strike, Raymond J. Saulnier, chairman of the President’s Council of Economic Advisers, told a New York bankers’ convention that it is important that the steel negotiations be resolved in a way that is satisfactory for “the whole economy,” since steel will have a symbolic significance to negotiators for other industries, and thus influence the price and wage patterns. Wage rates generally have been rising for almost a year, only slightly less rapidly than before last year’s recession, said Saulnier. At the rate things are going, he said, a substantial squeeze will soon be placed on industry profits, and eventually on employment.