Into the Third Week

Steelworker Chief David McDonald bounced into a Washington cocktail party one afternoon last week in an angry mood. He told listeners that the steel companies had welcomed the strike of the 650,000 steelworkers as a chance to work off heavy steel inventories, and concluded: "If that's the kind of game they're going to play, I think I'll keep the men out after the inventories are exhausted."

If McDonald kept his impetuous threat, the strike might last another month, possibly longer. Last week Steel magazine reported that most companies had at least a 30-day inventory on hand, with Detroit, the biggest user, holding enough steel to complete the 1956-model run and make a slight start in 1957. So far, most of the steel-using industries seemed to be feeling little pain. Steel warehousemen jacked their prices $5 to $12 a ton but reported no appreciable run on stocks.

Here and there, however, the strike was hurting. Some 40,000 soft-coal miners, returning to work in steel industry mines after a twelve-day industry vacation, were furloughed; with haulage revenues off as much as 75% in some instances, railroads slashed their work force heavily. The Pennsylvania not only laid off 18,000 men but cut nonunion wages 10% from the president on down. Rail-equipment makers began slowing down, with Westinghouse Air Brake and Pullman-Standard scheduling layoffs. Builders and oil companies, which had been fighting for steel even when the mills were operating, began cutting production schedules. Dallas' Magnolia Petroleum planned to slash drilling starts 75% in the next few weeks.

Toward week's end, prodded by Federal Mediator Joseph Finnegan, the two sides met in the same room for the first time in twelve days since the strike started, emerged after two hours with no signs of progress. McDonald announced he would no longer pose for pictures* with management representatives. Said he: "I don't want anybody to get false illusions."

* He also banned pictures showing him smoking a pipe. A "down-East" organization had written accusing him, he said, of being "a tool of the tobacco industry" and "demoralizing the youth of the nation." Said McDonald: "This pains me greatly."

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