Show s' s Mr Ar r. r Kaiser Wants to Have His Cake and Eat It Too i Henry Henry Kaiser has made another plea pica to the Reconstruction Finance c corporation for a scaling down of his debt pui his 1113 Fontana steel plant Of itself that is Kaisers Kaiser's business and the business of the theR R F Fe C although the public will certainly be interested i in any financial loss ultimately suffered by the RP RF R Fe C and the taxpayers if it develops that this loan wasa bad loan But But Utah has an immediate and direct interest in this proposal because Mr Kaiser as cited our Geneva steel plant as s the basis for his request for forB forar ar B 79 per cent cut in II- his indebtedness w iii Mr Kaiser contends that Fontana and Geneva are similar situations Because Geneva was sold by the government to the United States Ste Steel l corporation for per cent of its original ost believes he he should get a scaling down of his debt de t for for I to per cent of the face value of his R F C obligation i i a Kenneth T T. Norris of Los Angeles chairman of or the western 8 states tes councils council's steel committee in supporting the Kaiser request said it Is a a. a fair fair and equitable proposal in that it follows the established in the sale of the Geneva mill by the federal government He argued that both Geneva and Fontana were built by public tax funds I J While tah Is anxious to cooperate with the western states council which has pl played ball with us on Geneva and we are not Dot opposed to Fontana and its establishment on a a. sound Bound and Businesslike Businesslike siri basis we do object to a proposal to make an arbitrary arbitrary arbitrary arbi arbi- cut in Fontanas Fontana's capital cost structure on a a. basis of comparison comparison comparison com com- parison with Geneva There is in fact nothing fair and equitable in ih such a comparison u ur J r Gen Geneva va was built by the federal government entirely and owned by it After the war it was put on the auction block and andt t Bold to the highest and best bidder Fontana was built by Kaiser personally as his own private enterprise It was wasa a a business trans- trans transaction action like thousands of other transactions financed by a private an from the R F Fe C. C No one one he contemplated that the taxpayers would ultimately have to pay any part of the bill for Fontana v I Mr Kaiser has not offered to put Fontana on the auction block blo block k On the contrary he is very insistent that it is his plant and nd everybody else eise should keep hands off t j It is ridiculous to compare the two situations It is ridiculous to say that ha G Geneva's neva's disposal has established a yardstick for settlement of f Mr Kaisers Kaiser's obligations to the government t Utah has n no desire to ruin min the Fontana steel plant We hope i 1 isable to ope operate te successfully on a fair competitive basis with Geneva Geneya and all other steel operations in the country But we wedo wedo do not ot think it is fair competition to arbitrarily slash Fontanas Fontana's capital cost on the basis of a mythical Geneva yardstick and without consideration of Fontan Fontanas Fontana's s 's true value Geneva's true Value alue was arrived at by the process of open competitive bid- bid bidding ding cling bidding in which Mr Kaiser and all other steel manufacturers manufacturers manufacturers manu manu- were invited to participate But you cannot arbitrarily arbitrarily arbitrarily arbi arbi- take the same percentage of cost reduction which was the Geneva settlement and apply it to Fontana without regard to the relative costs and values of the two plants Mr Kaiser borrowed money from the R F C to build his Fontana plant It was a business transaction like thousands of other such loans from the R F C banks or individuals If such sucha a loan is a bad loan and the borrower cannot pay the common procedure is for the lender to foreclose take over the bankrupt company and sell it for what it will ill bring on the open market Such a method establishes a fair value and holds the lenders lender's loss lOBS to a minimum Mr Kaiser has fought Geneva from the very beginning We Wein Wein Wein in our turn have no intention of fighting Fontana but we do not riot think Mr Kaiser should expect to have his cake and eat it too He cannot demand both exclusive private independent ownership and government tax-paid tax subsidy x As a high R F C official pointed out in reply to Mr Kaisers Kaiser's request to have his loan slashed to cents on the dollar Mr Kaiser hasn't any kick coming After all he only put up of his own money for a loan of more than and was able to pay payoff off part of his obligation with tax-free tax fees obtained from the maritime commission for building Liberty ships |