The Atlantic Report on the World Today: Washington

AT the base of the trouble in the steel dispute were two simple facts: 1) the Administration was panicked at the thought of a steel strike; and 2) there was no coördination within the Administration between wage and price policies. Part of the difficulty arose from the tripartite composition of the Wage Stabilization Board. The board consists of eighteen members, six each representing the public, labor, and industry. Four members from tsach group usually sit on cases. Most public members have backgrounds as arbitrators or impartial umpires in labor negotiations. Nathan P. Feinsinger, the chairman, is a law professor on leave from the University of Wisconsin.

The flaw is that a determined stand by one group can often mean a settlement by a sort of polite blackmail on the lowest common denominator, and the public members become compromisers instead of defenders of the public interest. For example, the public members wanted to return the union shop issue to the steel companies and the union for further bargaining. But for differing reasons the industry and labor members would not go along. So the public members caved in and supported the labor members in order to get a decision.

Varying interpretations of Stabilization Board regulations placed the permissible wage increase anywhere from 9 to 34 cents an hour. Most persons who had been following the board, however, expected it to come up with a “package” recommendation totaling 15 to 18 cents. When the board finally announced recommendations totaling 26.1 cents, plus the union shop, the Capital was dumfounded. These recommendations included a 12½ cents an hour wage increase retroactive to January 1; 2½ cents additional beginning July 1; 2½ cents more next January (the recommended contract would run eighteen months); and fringe adjustments bringing the eventual total to 26.1 cents.

Wilson vs. Putnam and Arunll

Among the most dumfounded was Defense Mobilizer Charles E. Wilson. Although the Stabilization Board came within his purview, Wilson had kept hands off, on the theory that it was a quasi-judicial body performing a task assigned by the President. Both Economic Stabilizer Roger Putnam and Stabilization Board Chairman Feinsinger, however, undertook to keep Wilson informed. The day before the announcement, Putnam called Wilson to tell him that the wage dispute could not be settled for 15 cents. Wilson agreed to 16 cents, but said that he would rather take a strike than go above that figure. Thereupon ensued a tragedy of errors.

Wilson was under the misapprehension that fringe benefits were included under the wage ceiling. When he learned otherwise, he immediately charged that the recommendations were “unstabilizing” and flew to Key West to consult the President, Truman reportedly was sympathetic to Wilson’s insistence that the steel companies would need price relief and authorized Wilson to tell them that a price increase would be permitted.

In the meantime Putnam, who initially had agreed with Wilson, changed his mind. Putnam and Price Stabilizer Ellis Arnall went to see the President on his return from Key West to plead that no price increase would be necessary beyond that under the Capehart Amendment. (This amendment permits the steel companies to recover additional costs incurred before last July 25.)

The upshot was that the President decided against the price increase requested by the steel industry. When Wilson protested that Truman had authorized him to dicker with the steel companies, the President retorted bluntly that he had not told Wilson to let the companies walk all over him. At that point Wilson resigned.

Everybody wants inflation

The very flexibility of the WSB’s formula invites arbitrary decisions. Generally the board has permitted wage increases of 10 per cent plus a sum equivalent to the percentage increase in the cost of living since January 15, 1951. Fringe ad justments are considered separately on the basis of industry area practices. But the WSB is free to ignore its own formula. For example, instead of taking the base date of January 15, 1951, for the steel award, it went back to October, 1950, because the last steel contract had been figured on the October cost-of-living index. This “justified” 3½cents an hour more.

The real difficulty, of course, lies in the Stabilization Board’s frame of reference. Many situations arise in which it simply is not possible to be completely fair to labor, industry, and the public. The “catching up” formula is a formula for builtin inflation. Invariably it results in a kind of leapfrogging in which no one is ever caught up.

Actually, the whole philosophy of the controls program has been to permit a creeping wage inflation. The fact is that inflation is popular. In an expanding economy, induslry can of course be expected to absorb some wage increases because of greater productivity. But rather than impose a real brake on wages, the Administration has been trying to place most of the burden on industry.

It is hard to avoid the conclusion that the Administration’s policy is based on the obvious fact that there are more steel workers than steel companies and more union members than stockholders. The very existence of super boards such as the WSB acts as a deterrent to real bargaining and tends to throw disputes to the government for solution.

Acheson visits a GOOD Neighbor

Secretary Aeheson’s first trip to Brazil was a carefully planned effort to mend some fences in bad disrepair. As the United States’ biggest and oldest friend in Latin America, Brazil has felt badly neglected since the days of World War II when this country was anxious for bases and Brazil’s raw materials. Moreover, in contrast to Achcson’s near-contempt for most Latin American diplomats, he has a real affection for Brazil’s capable Foreign Minister, Joao Xeves da Fontoura.

When Acheson attended the funeral of King George VI in London, by accident he was placed in the procession along with three Latin American representatives. These gentlemen seized the occasion to belabor Acheson about United States neglect, and their complaints continued during the entire procession. Acheson was fit to be tied, and Prime Minister Churchill had to send Foreign Secretary Eden to apologize personally.

Actually, the Secretary of State’s visit to Brazil coincided with a marked change of policy in Latin America. There is a belated conviction that no effort to appease the Perón government of Argentina will work. For a number of months the State Department has become progressively more bitter about Perón and his attempts to build an antiUnited States bloc in the hemisphere.

So obsequious was the fawning of two American Ambassadors in Buenos Aires, George Messersmith and Stanton Griffis, that Perón was advised that State Department protests meant nothing. The peak of the appeasement policy was reached when Assistant Secretary Edward G. Miller, Jr., negotiated a $125-million Export-Import Bank loan for Perdn in 1950.

This loan, however, made no difference. The murder of La Prensa — on which the State Department pussyfooted at first—at last convinced the department that Perón could not be bought. In the meantime, Perón’s alliance with the Communists has caused the department more and more concern. In contrast with his predecessors, the currently retiring Ambassador, Ellsworth Bunker, has been a model of correct, restrained deportment. The policy now is to let Perón slew in the economic ruin he has brought to Argentina.

But Perón has won a victory which may be very costly in the upset in Bolivia conducted by the MNR, or National Revolutionary Movement. This placed in power Victor Paz Estenssoro, a long-time chum of Perdn and the Communists.

The United States itself bears considerable responsibility for this coup. Reconstruction Finance Corporation Administrator W. Stuart Symington adamantly refused to negotiate a tin contract with Bolivia at a price the Bolivians would accept — even though this could have been done for the same price ultimately given other tin producers. Hacked by Senator Iondon Johnson, Symington sal tight while the tin piled up. The discontent of course played into the hands of Paz Estenssoro. The Bolivian coup is a prime example of the need to make Ended States international economic policy serve its diplomatic aims.

Women in the serviees

Petite, pert Anna Rosenborg has conducted a minor revolution of her own in the Pentagon. As the Assistant Secretary of Defense in charge of manpower, Mrs. Rosenberg has introduced many personnel methods found successful in private business. Her indefatigable energy for unification has won admiration on Capitol Hill. Now she is embarked upon a special crusade to enlist more women in the armed forces. The goal is to enroll 72,000 more women in the women’s components and various medical specialist corps of the Army, Navy, Air Force, and Alarums.

Defense officials have concentrated on quality, and they are pleased with the growing recognition of the need and social acceptance of women in the armed forces. Officials are stressing the point that it is unfair to compel a man to serve more than once, and that there are many jobs in which women can release men for more specialized duties.

Mood of the Capital

President Truman’s decision not to run again brought much speculation that he would have a second honeymoon with Congress. With no responsibility for the election, the reasoning went, Truman could he a statesman instead of a politician. Unquestionably relations between the President and Congress have improved. though Truman’s partisan handling of the steel dispute dissipated some of the good will.

General Eisenhower’s return makes him fair political game. Efforts have been made by Senator Taft and his supporters to embroil Ike in controversy, but so far Eisenhower has been adroit. In a sense, so long as he was at SHAPE he was immune from the usual attacks. Some of his supporters here are operating on the theory that the time for political speeches is after the convention, and that the less Eisenhower says before then, the better.