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When Kennedy Stood Up To Wall Street

In 1962, President John F. Kennedy stood up to Wall Street in a big way. Kennedy denounced the steel industry for raising prices on steel. His action followed a deal — a contract with the United Steelworkers and big steel. The initial agreement was that wages for steel workers would be held if the prices of steel would be kept low.

The major steel companies announced in April of 1962 that there would be a price increase of 3.5%; the first price increase in three years. This came within a few days after the companies had reached a settlement, providing a wage increase of 2.5%.

Kennedy was enraged by big steel’s retraction. In fact, Kennedy started a personal campaign against the industry.

At that time, Roger Blough was the president of U.S. Steel, a major player in the steel industry. It was with U.S. Steel that Kennedy had made a deal with. On April 6, 1962, an agreement was signed.

Four days later, Roger Blough had a meeting with President Kennedy. In the meeting, Blough told Kennedy that U.S. Steel was going to raise its prices on steel. An angry Kennedy scorned Blough and he immediately began to take fiscal steps to punish the company for the showdown. The bold president would eventually get in a bit of hot water over this aggressive stance.

On April 11, 1962, President John F. Kennedy gave a speech at a press conference. Here’s an excerpt from the conference:

Simultaneous and identical actions of United States Steel and other leading steel corporations, increasing steel prices by some 6 dollars a ton, constitute a wholly unjustifiable and irresponsible defiance of the public interest.

In short, at a time when they could be exploring how more efficiency and better prices could be obtained, reducing prices in this industry in recognition of lower costs, their unusually good labor contract, their foreign competition and their increase in production and profits which are coming this year, a few gigantic corporations have decided to increase prices in ruthless disregard of their public responsibilities.

Some time ago I asked each American to consider what he would do for his country and I asked the steel companies. In the last 24 hours we had their answer.

In this serious hour in our nation’s history, when we are confronted with grave crises in Berlin and Southeast Asia, when we are devoting our energies to economic recovery and stability, when we are asking Reservists to leave their homes and families for months on end, and servicemen to risk their lives — and four were killed in the last two days in Vietnam — and asking union members to hold down their wage requests, at a time when restraint and sacrifice are being asked of every citizen, the American people will find it hard, as I do, to accept a situation in which a tiny handful of steel executives whose pursuit of private power and profit exceeds their sense of public responsibility can show such utter contempt for the interests of 185 million Americans.

If this rise in the cost of steel is imitated by the rest of the industry, instead of rescinded, it would increase the cost of homes, autos, appliances, and most other items for every American family. It would increase the cost of machinery and tools to every American businessman and farmer. It would seriously handicap our efforts to prevent an inflationary spiral from eating up the pensions of our older citizens, and our new gains in purchasing power.

The facts of the matter are that there is no justification for an increase in the steel prices. The recent settlement between the industry and the union, which does not even take place until July 1st, was widely acknowledged to be non-inflationary, and the whole purpose and effect of this Administration’s role, which both parties understood, was to achieve an agreement which would make unnecessary any increase in prices.

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