PresidentJohnF.

Kennedy
StateDepartmentAuditorium,Washington,D.C.
Wednesday,April11,1962,3:30p.m.

SimultaneousandidenticalactionsofUnitedStatesSteelandotherleadingstealcorporationsincreasing
steelpricesbysome$6atonconstituteawhollyunjustifiableandirresponsibledefianceofthepublic
interest.InthisserioushourinourNation'shistorywhenweareconfrontedwithgravecrisesinBerlin
andSoutheastAsia,whenwearedevotingourenergiestoeconomicrecoveryandstability,whenweare
askingreserviststoleavetheirhomesandtheirfamiliesformonthsonendandservicementorisktheir
livesandfourwerekilledinthelasttwodaysinVietNamandaskingunionmemberstoholddowntheir
wagerequestsatatimewhenrestraintandsacrificearebeingaskedofeverycitizen,theAmericanpeople
willfindithard,asIdo,toacceptasituationinwhichatinyhandfulofsteelexecutiveswhosepursuitof
privatepowerandprofitexceedstheirsenseofpublicresponsibilitycanshowsuchuttercontemptforthe
interestsof185millionAmericans.

Ifthisriseinthecostofsteelisimitatedbytherestoftheindustry,insteadofrescinded,itwouldincrease
thecostofhomes,autos,appliances,andmostotheritemsforeveryAmericanfamily.Itwouldincrease
thecostofmachineryandtoolstoeveryAmericanbusinessmanandfarmer.Itwouldseriouslyhandicap
oureffortstopreventaninflationaryspiralfromeatingupthepensionsofouroldercitizens,andournew
gainsinpurchasingpower.

Itwouldadd,SecretaryMcNamarainformedmethismorning,anestimated$1billiontothecostofour
defences,atatimewheneverydollarisneededfornationalsecurityandotherpurposes.Itwouldmakeit
moredifficultforAmericangoodstocompeteinforeignmarkets,moredifficulttowithstandcompetition
fromforeignimports,andthusmoredifficulttoimproveourbalanceofpaymentsposition,andstemthe
flowofgold.Anditisnecessarytostemitforournationalsecurity,ifwe'regoingtopayforoursecurity
committmentsabroad.Anditwouldsurelyhandicapoureffortstoinduceotherindustriesandunionsto
adoptreasonablepriceandwagepolicies.

Thefactsofthematterarethatthereisnojustificationforanincreaseinsteelprices.Therecent
settlementbetweentheindustryandtheunion,whichdoesnnoteventakeplaceuntilJuly1st,waswidely
acknowledgedtobenoninflationary,andthewholepurposeandeffectofthisAdministration'srole,which
bothpartiesunderstood,wastoachieveanagreementwhichwouldmakeunnecessaryanyincreasein
prices.Steeloutputpermanisrisingsofastthatlaborcostspertonofsteelcanactuallybeexpectedto
declineinthenext12months.Andinfact,theactingCommissioneroftheBureauofLaborStatistics
informedmethismorningthat,andIquote,"employmentcostsperunitofsteeloutputin1961were
essentiallythesameastheywerein1958."

Thecostofthemajorrawmaterials,steelscrapandcoal,hasalsobeendeclining,andforanindustry
whichhasgenerallybeenoperatingatlessthantwothirdsofcapacity,itsprofitratehasbeennormaland
canbeexpectedtorisesharplythisyearinviewofthereductioninidlecapacity.Theirlothasbeeneasier
thanthatofonehundredthousandsteelworkersthrownoutofworkinthelast3years.Theindustry's

cashdividendshaveexceeded$600millionineachofthelast5years,andearningsinthefirstquarterof
thisyearwereestimatedintheFebruary28thWallStreetJournaltobeamongthehighestinhistory.
Inshort,atatimewhentheycouldbeexploringhowmoreefficiencyandbetterpricescouldbeobtained,
reducingpricesinthisindustryinrecognitionoflowercosts,theirunusuallygoodlaborcontract,their
foreigncompetitionandtheirincreaseinproductionandprofitswhicharecomingthisyear,afew
giganticcorporationshavedecidedtoincreasepricesinruthlessdisregardoftheirpublicresponsibilities.

TheSteelworkersUnioncanbeproudthatitabidedbyitsresponsibilitiesinthisagreement,andthis
Governmentalsohasresponsibilitieswhichweintendtomeet.TheDepartmentofJusticeandtheFederal
TradeCommissionareexaminingthesignificanceofthisactioninafree,competetiveeconomy.The
DepartmentofDefenceandotheragenciesarereviewingitsimpactontheirpoliciesofprocurement.And
IaminformedthatstepsareunderwaybythosemembersoftheCongresswhoplanappropriateinquiries
intohowthesepricedecisionsaresoquicklymadeandreachedandwhatlegislativesafeguardsmaybe
neededtoprotectthepublicinterest.

Priceandwagedecisionsinthiscountry,exceptforaverylimitedrestrictioninthecaseofmonopolies
andnationalemergencystrikes,areandoughttobefreelyandprivatelymade.ButtheAmericanpeople
havearighttoexpect,inreturnforthatfreedom,ahighersenseofbusinessresponsibilityforthewelfare
oftheircountrythanhasbeenshowninthelast2days.

SometimeagoIaskedeachAmericantoconsiderwhathewoulddoforhiscountryandIaskedthesteel
companies.Inthelast24hourswehadtheiranswer.