STEEL SHORTAGE

Dominion, Volume 35, Issue 264, 6 August 1942, Page 6

STEEL SHORTAGE

Closing Of American Shipyards EVIDENCE OF WIDE BLACK MARKET (By Telegraph.—Press Assn.—Copyright.) (Received August 5, 7 p.pi.) NEW ORLEANS, August 4. Mr. Frank Higgins, general manager of the Higgins Corporation, testifying (before the sub-committee of the House of Representatives which is investigating the closure of shipyards, 'said; tiiat though his shipbuilding plant had been closed because of shortage of steel, there existed a country-wide black market in steel. Mr. Higgins said: “You have to pay a premium to get this black market steel. In tny opinion it is unethical to take advantage of the war crisis to make that kind of profit, but it is not illegal. It is iegal profiteering, as black as the ace of spades. “We have got steel from warehouses all over the country. They know before we do when we get certain contracts, and they send us lists of what we will need to fill the contracts. They send us these lists 'before we know what contracts we are getting.” . Mr. O’Brien, a member of the committee, asked if the reason for dealing in the black market was because the steel was wanted in a hurry. Mr. Higgins replied affirmatively. “If you order steel from a mill you wait months,” he said. “But bulging black market warehouses have it on hand for immediate delivery. We found enough to build 200 lighters.” Black market steel could be bought in less than 40,0001 b. car load lots on which the ceiling price operated, but there was no ceiling on lesser lots, and therefore it was possible to obtain in this manner as much as 39,0001 b. Said To'Be Small. A Washington message says that the War Production Board spokesman admitted the existence of a steel' black market, but discounted its size. “We have never argued that there is not a steel black market, but it is small,” he said. “You cannot get any appreciable amount of black market steel. It would take a whole army of policemen to prevent the development of such a market.” The Price Administrator, Mr. Henderson, has ordered an' immediate investigation of black market steel purchases by the Higgins shipyard in Louisiana to ascertain whether the Office of Price Administration’s regulations were violated. At the same time the sub-committee asserted that it will investigate the black market throughout.the country.