Statement by the President on the Need for Price and Wage Stability in the Steel Industry.

THIS administration is watching closely the possibilities of a general across-the-board price increase in steel. I opposed such an increase last year--I oppose such an increase now.

This administration is not interested in determining the appropriate price or profit levels of any particular industry. We are interested in protecting the American public-and it is the American public which would suffer most from a general increase in steel prices.

It would invite another inflationary spiral in place of the present wage price stability. It would hamper our export expansion and increase import competition. It would adversely affect our balance of payments position on which our worldwide commitments depend. It would reduce the gains of our economic growth and reduce job opportunities in this country.

This Government in the past year has taken major steps to improve the economic position of the steel industry and assist in its modernization. Depreciation and investment tax benefits of some $100 million were provided in 1962 to the steel industry alone; and its increased cash flow has made possible a planned increase in plant and equipment investment more than twice the national average. Additional tax gains will be realized in this year's tax reduction program.

I therefore strongly urge the leaders of the steel industry to refrain from any across-the-board price increases which will aggravate their competitive position and injure the public interest. The steel industry--which has been hard hit by competition from lower priced substitute products and foreign producers-has been operating far below capacity. What it needs is more business at competitive prices, not less business at higher prices.

I urge similar restraint on the Steel Workers Union. With over 100,000 steel workers still unemployed, their need is for more jobs with job security, not fewer jobs at higher wages. Across-the-board price increases could precipitate labor demands and unrest that would cause great difficulties for the country.

I realize that price and wage controls in this one industry while all others are unrestrained would be unfair and inconsistent with our free competitive market--that unlike last year the Government's good faith has not been engaged in talks with industry and union representatives--and that selected price adjustments, up or down, as prompted by changes in supply and demand, as opposed to across-the-board increases, are not incompatible with a framework of general stability and steel price stability and are characteristic of any healthy economy.

In a free society both management and labor are free to do voluntarily what we are unwilling to impose by law--and I urge the steel industry and the steel union to avoid any action which would lead to a general across-the-board increase. I urge this in their own enlightened self-interest and in the public interest as well.