THE NATION: A Two-Way Street?

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Outside the great U.S. Steel Corp. plant in Gary, Ind., the steelworkers union set up three tents so that strikers could sit down and watch TV when they got bored with marching in the picket line. "We may have to be here a spell," drawled one striker. "Might as well relax."

For the sixth time since the end of World War II, the United Steelworkers of America had walked out in a nationwide steel strike. Cold were the furnaces of two dozen steel firms that employ 500,000 workers and make 85% of the nation's steel.

Free But Grim. Although layoffs rippled outward to wash some 35,000 workmen out of their jobs in supporting mining and transportation industries, Washington deemed the strike no immediate menace to the economy's health; Administration economists predicted that upsurge would start right in again as soon as the strike was over. Piled up in warehouses were record steel inventories calculated to last two months or so (see BUSINESS). President Eisenhower said that he planned no drastic move to try to end the strike. "I believe." said he, "that we have got to thoroughly test out and to use the method of free bargaining," and when the Government starts pressuring, "then I believe it's not free." The "conditions are certainly not here at the moment," he added, for invoking the Taft-Hartley Act provision calling for a fact-finding board ("All the facts are pretty well known") and an So-day cooling-off period when a strike threatens to "imperil the national health or safety."

Instead, the President ordered the Federal Mediation and Conciliation Service's Director Joseph F. Finnegan to help work out a voluntary settlement. After separate sessions with the steelworkers and with the Big Steel negotiators, headed by U.S. Steel's Executive Vice President R. Conrad Cooper, Finnegan was grim, saw no hope for an "easy or early solution."

Basic & Bothered. The grimness came with the sudden realization by pickets and public that management had its teeth clenched. Setting a post-World War II precedent for a major industry, the steel companies let the negotiations sputter to an end without making even a minimum money offer for the workers to think about. The steelworkers had offered to settle for the same terms they won in 1956 after a 36-day strike: a three-year contract with a yearly raise of about 15¢ an hour, plus a cost-of-living escalator clause. Management's counteroffer: either 1) a one-year extension of the present contract with no wage boost and abolition of the present escalator clause that ties wages to the cost-of-living index, or 2) improved pension and insurance benefits, plus a "modest" wage increase next year, in return for union concessions on work rules.

Management's tough stand was no idle pose. Big Steel, led by U.S. Steel Corp.'s Board Chairman Roger M. Blough, was bent on halting steel's relentles's postwar trend: ever higher wages, ever higher prices—both up about 150% since 1945. With U.S.-made steel all but priced out of foreign markets and losing domestic markets to low-cost foreign steel (TIME. July 20), the steel industry finally decided to hold out against a wage boost unless the union conceded management more freedom to trim costs by cutting down on "featherbedding and loafing."*