Eckstein Says Kennedy Will Try To Stop General Steel Price Rise

Otto Eckstein, professor of Economics, predicted yesterday that President Kennedy will take strong action if the steel industry follows Wheeling Steel Corporation in its recent price increase.

"If the top steel companies follow Wheeling it will present the same type of challenge to the country that last year's price increase did," he said.

Eckstein feels that President Kennedy is mainly afraid of the bad effect that a price increase would have on the balance-of-payments situation. An increase might put American steel companies in a position where they could not compete with foreign producers.

In agreement with the President's view that the steel industry does not need more business at higher prices," Eckstein, a government consultant, stated, "President Kennedy hit it right when he said that the industry needs more business at lower prices rather than less business at higher prices."

Effect on Steel Products

Wheeling's new prices represent an across-the-board increase, Eckstein said, and not merely a "selected products" price increase, as some industry spokesmen have claimed. He pointed out that if the entire industry follows Wheeling's increase, the prices of more than half of all steel products will be affected.

Eckstein labeled as "sheer speculation" any attempt to guess whether all the large steel companies would now hike their prices. But the fact that the other companies have done nothing yet is a "good sign" that they plan to hold the line, he said.

Wheeling's price increase is "mysterious" to Eckstein because it is only the 11th leading producer. In the past U.S. Steel has usually been the first to raise prices. He said that perhaps the industry is trying something new after what happened in last year's attempted price hike.