Business: Fourth Round

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Even though they felt more confident, most businessmen hesitated to make long-range commitments until they could see the U.S. wage pattern. Nobody would know that until the steel wage dispute was settled. For both Steel and Labor, the crucial fight was for public support, and that would be decided in the hearings before the President's three-man fact-finding board.

As the board's hearings began in Manhattan last week, Big Steel's Chairman Irving S. Olds found himself in something of a psychological box. The hearings opened just as U.S. Steel issued its mid-year earnings report to stockholders. Since profits were 76% above 1948's first half, Olds had a hard time explaining that past profits were no remedy for the steel industry's present situation, with orders having fallen off so much that production had been cut back 30% in a matter of ten weeks.

Olds also boxed himself in worse than the situation warranted, by neglecting to point out one basic reason why the 1949 figures looked so much better than 1948's —because the steel industry had been forced to curtail production for six weeks in the spring of 1948 while John L. Lewis' coal strike was on. Instead, Olds contented himself with asserting that Big Steel's ability to pay had nothing to do with the case. Said he: "There is no justification at this time for a fourth round . . . I do not believe it would be good for the economy."

While the Manhattan hearings held the spotlight, the Administration itself struck an oblique blow for a fourth round of wage raises. Under the Walsh-Healey Act it has the power to set minimum wages on Government contracts of $10,000 and up. Last week Secretary of Labor Maurice J. Tobin used this power to boost the minimum rates in steel from 62½¢ an hour to $1.23 in the North, from 45¢ an hour to $1.08½ in the South.* Tobin cheerfully conceded that this would "have the tendency to raise wages in general."