Smiting the Foe

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As he spoke, his voice was hard. His hands kept clenching and unclenching; he thumped on the rostrum for emphasis and pointed his forefinger at his audience. He accused the steelmen of "irresponsible defiance of the public interest" and "ruthless disregard of their public responsibilities." There was, he insisted, "no justification for an increase in steel prices." Under the free-enterprise system, he conceded, wage and price decisions "ought to be freely and privately made. But the American people have a right to expect, in return for that freedom, a higher sense of business responsibility for the welfare of their country than has been shown in the last two days.

"Some time ago I asked each American to consider what he would do for his country, and I asked the steel companies. In the last 24 hours we had their answer." The Vast Arsenals. Kennedy continued the assault. Struck by the fact that five other companies had already followed U.S. Steel's lead, he hinted darkly of illegal collusion. And he brandished aseries of possible retaliatory measures against price-hiking steelcompanies—scrutiny by the Justice Department and the Federal TradeCommission, loss of Defense Department business, investigation by congressional committees, possible discrimination in the Treasury'sforthcoming revision of tax-depreciation schedules.

During the next two days, the President showed that these threats were backed by power and a willingness to wield it. Set in 24 motion by Kennedy's anger, the vast administrative arsenals of the Federal Government rolled into battle against the offending steel companies. FBI agents from Bobby Kennedy's Justice Department waked newsmen in the early morning to check on a reported statement by a steel company president (see PRESS). FBI men armed with subpoenas descended on the executive suites of steel companies to interrogate officers and carry off possibly incriminating documents (seven patrolling the U.S. Steel offices in Pittsburgh).

The Justice Department announced that it would start a grand jury investigation to see whether the steel industry had violated antitrust laws through collusive pricing. Bobby Kennedy declared that the Department of Justice was going to consider whether U.S. Steel ought to be "broken up" on the legalistic grounds that it had monopoly power to set industrywide prices.

The Council of Economic Advisers set oft" on a round-the-clock push to get out a "white paper" that would smother the steel companies' arguments for price increases. Administration lawyers got to null drafting an Emergency Steel Act that would roll back the announced increases for go days.

Congressional Democrats joined in the hue and cry. Brooklyn's Representative "Manny" Celler said that his Antitrust subcommittee would hold hearings on steel pricing beginning in early May. Tennessee's Senator Estes Kefauver, that intrepid investigator, said that his Antitrust and Monopoly subcommittee also would probe the steel industry.

Dried-Up Source. The Administration's massive attack brought a countereffort by U.S. Steel. But it was too late, and too little. Kennedy had already corralled public opinion; even among businessmen, there was an overwhelming sense that U.S. Steel, in its timing and its tactlessness, had been fantastically stupid in its public relations.