White House Press Release

80 HOLD FOR RELEASE HOLD FOR RELEASE HOLD FOR RELEASE March 12, 1948 CONFIDENTIAL: The following report to the President by the Secretary of Commerce on "Recent Steel Price Increases" MUST BE HELD IN STRICT CONFIDENCE until released. NOTE: Release is automatic at 6:00 o'clock P.M., Eastern Standard Time, tomorrow, Saturday, March 13, 1948, simultaneously with the report to the President by the Council of Economic Advisers on the same subject. The same release applies to all newspapers, radio announcers and news broadcasters. PLEASE GUARD AGAINST PREMATURE PUBLICATION OR RADIO ANNOUNCEMENT. CHARLES G. ROSS Secretary to the President The President has received the following report on "Recent Steel Price Increases" from Secretary of Commerce Harriman: DEPARTMENT OF COMMERCE REPORT NARA ON RECENT STEEL PRICE INCREASES MARCH 1948 This report deals with that portion of the President's request which has to do with the extent and nature of the rise in the price of certain basic steel products in relation to the over-all economic situation. The factual analysis here presented reviews the changes in steel prices and the resulting added costs to steel users; the changes in the more important elements of steel-making costs since the beginning of 1947; the trend of steel prices in relation to the general price pattern over the war and postwar period; the his- torical pattern of profits in the steel industry; the profit position of the industry in relation to the general level of profits in the economy; and the relation of current earnings to new capital invest- ment in the steel industry. Conclusions stated in this report relate to the factual background of the steel industry against which economic judgments should be made. Questions of the mechanics of price changes are not dealt with. The Department of Justice is reporting separately upon these and other aspects with which it is primarily concerned. Neither are the repercussions of the recent steel price increase appraised. The Council of Economic Advisers in its report is dealing ith these repercussions as they bear on the broader problem of inflation in the economy as a whole. Changes in Steel Prices Chart 1 and Table l show the changes in the prices of the principal semi-finished steel products since January 1947. For com- parative purposes the composite price of finished steel products is also included. Prices of semi-finished products participated fully in the general price advance of August 1947, when both finished and semi- finished products were increased about 10 percent. In February 1948 the semi-finished products, with the exception of wire rods, were advanced approximately another 10 percent but the increase in the composite index of finished steel products was comparatively small. (OVER)