Show I. I I-C I Why Inflation I Hurt Developments in 1968 in the steel industry show clearly clearly- to all who would take the t time timeto me meto to understand understand how how constant inflation both imperils the stability stability stability sta sta- sta- sta of the dollar and makes it more difficult for Washington Washing Washing- ton to attain a balance in international international international inter inter- national payments TilE THE STEEL industry granted grant grant- ed wage increases earlier in inthe inthe inthe the year and immediately set about to pass on the costs to the consumer by announcing price increases in the ton per-ton cost of steel President Johnson fought the increases actively and succeeded in having some of the increases rescinded Looking at the latest survey of conditions in the industry at the present time one can readily see how inappropriate steel price hikes and attempted hikes were this year Shipments Shipments Ship Ship- Shipments ments are now running a million million million mil mil- lion tons below estimates monthly TOTALS ARE far below record record record rec rec- ord shipments in the early part of the year Foreign imports of steel are rapidly increasing And US U.S. steelworkers are being laid off in many steel steel- producing areas While some of the present situation situation situation sit sit- is due to precautionary stockpiling in the first half of the year in anticipation over overlabor overlabor overlabor labor trouble some is due to the importation of an expected 17 million tons of steel from foreign foreign foreign for for- eign countries this year The US U.S. price is already so high foreigners can produce steel absorb heavy shipping costs costs costs' pay a protective tariff and andI and I still make a profit OBVIOUSLY when US steel is priced that high relatively y little can be sold on interim interim- markets The same is true for US U.S. U S automobiles refrigerators re- re refrigerators and everything else else else-as as they go up In m price fewer foreigners can buy them and we therefore fail to earn foreign currencies we otherwise other otherwise wise could use to balance our our international payments j |