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The Militant, 17 January 1949

The White House’s Steel Plan –
Is It ‘Socialistic’?

From The Militant, Vol. 13 No. 3, 17 January 1949, p. 2.
Transcribed & marked up by Einde O’Callaghan for ETOL.


The steel monopolists, organized as the American Iron and Steel Institute, and the capitalist press generally are screaming ‘‘socialistic!” at Truman’s proposals for government measures to force expansion of steel production facilities.

What provoked this wild clamor was the last part of Point 8 of Truman’s “anti-inflation” program in his State of the Union message. This called on Congress (1) “to authorize an immediate study of the adequacy of production facilities in critically short supply, such as steel”; (2) “if found necessary, to authorize Government loans for the expansion of production facilities to relieve such shortages”; and (3) “to authorize the construction of such facilities directly if action by private industry fails to meet our needs.”

On Jan. 7, two days after stating the above, Truman himself hastened to reassure the steel industry and other monopolies that he intended nothing remotely in the way of “socialization” or even “nationalization.” At a Washington press conference, he emphatically denied that he planned “to put the government into the steel industry.”

If a government study found steel plant capacity insufficient arid if the steel industry refused to expand even with government loans, then, Truman said, the government might have to build steel plants which would be “integrated” into the private steel industry. He illustrated his point by recalling that during the war the Defense Plant Corporation had spent $21 billion to build plants, most of which were built into existing privately-owned industries.

In view of this statement, it is nonsense to suggest that Truman has in mind anything more radical than what the government did during the war, when it built and owned 6% of the nation’s total steel ingot-making facilities, which were hired out to the steel corporations to operate for private profit. Only 28 of 285 such steel-producing facilities were independent units. Most of them were scrambled together with privately-owned plants and are usable only as part of these plants.

At this very time, Truman’s War Assets Administration is trying to turn over to the steel monopolies, through sale or lease, the iron and steel plants and other facilities still under government ownership. Some of these have already been sold at a third or less of the original cost. But the steel companies are holding out for rock-bottom prices on the rest with the intention of acquiring these plants for next to nothing.

Truman’s proposals are designed exclusively to put pressure on the steel companies to expand and increase their output. He has been driven to this pressure campaign by the needs of the militarization program and the tremendously inflated costs of that program due, in part, to the monopoly price-fixing policies of the steel industry, the key industry in peace and war. As Truman’s Council of Economic Advisers stated in the report on which his own Economic Report to Congress was based, “Steel has presented the outstanding shortage problem since the war, and would present grave danger in case of the need for a much enlarged defense program.”

The steel monopolists, headed by such giants as U.S. Steel and Bethlehem Steel, follow a calculated policy of limiting total steel production facilities to keep production behind demand and thereby maintain maximum steel prices. Competitive demand for steel between the government and private markets – between armaments and automobile producers, for instance – has enabled the steel industry to tack repeated big price boosts on steel in the past three years. The automobile monopolists have been yelling the loudest about the short supply and high prices of steel.

Truman’s proposals help throw light on the monstrous power of the steel trust, its strangulation of production in order to maintain monopoly prices even at the expense of the militarization program of which the steel industry is the greatest beneficiary. But Truman does not propose to in fringe on this monopoly, let alone destroy it. At most he proposes to build additional plants at public expense to be turned over to the steel monopoly.

This monopoly will never be broken until the handful of coupon-clippers who own and control the steel industry are expropriated, the industry taken over completely by the government and operated under workers’ control through democratically-elected committees of workers and technicians.

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