Business: HOW A ROLL-UP BECAME A ROLLBACK

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The Key Word. White House telegrams went to all directors of all steel companies, and the Federal Trade Commission briefly threatened to open an investigation. Over the weekend, the heads of three big defense suppliers—Bethlehem's Martin, C. William Verity of Armco and Thomas Patton of Republic —were summoned to Washington for talks with Navy Secretary Paul Ignatius. Before long, their companies were issuing statements that across-the-board did not actually include shell steel, bomb casings, barbed wire and other military items. Defense, for its part, quickly claimed victory.

Nevertheless, steelmen were watching not the U.S. Government but U.S. Steel to see how prices would ultimately shake out. The industry leader, with 24.5% of total production, U.S. Steel had led off the price increases with a modest change in one item, tin plate, and the President publicly approved the "selective" move. When it came time to move again last week, U.S. Steel was as polite as its competitors had been imprudent. Cannily using the key word, it announced increases on "selected" products. All told, they covered 63% of the industry's output, included such important items as hot and cold rolled sheet, which is heavily used in the auto and appliance industries.

No Deal. Within hours, Bethlehem and smaller competitors stepped into line with selected price adjustments of their own. Rumors flew among metalmen that U.S. Steel's Blough, who had been John Kennedy's chief protagonist in the stormy steel rollback of 1962, had personally concluded that industry's peace with the President. Blough did, in fact, come in for earnest entreaties from Defense Secretary Clark Clifford about steel and the national interest, but the Administration denies that any deal was struck.

Actually, few steelmen ever expected Bethlehem's original price move to survive natural market forces, including inventories built up as a strike hedge and foreign imports, both of which are at record levels. As things stand, the effect of the new prices on consumer products is expected to be modest, amounting to an increase of about $6 in the cost of a new car.