U.S. Steel Corp., the nation's largest steel maker, announced price increases yesterday that were immediately attacked by the Carter administration as excessive and "clearly inconsistent with efforts to control and reduce the rate of inflation."
Less than three hours after the steel giant said it would raise prices on tin mill and structural products on Sept. 4, Charles L. Schultze, chairman of the President's Council of Economic Advisers, called a small group of reporters to his office to denounce the boost.
It was the six-month-old administration's strongest use of public criticism to try to hold down price increases and was aimed at pressuring other steel makers not to follow U.S. Steel's lead.
Schultze said he had discussed the U.S. Steel price increases with President Carter. "He too fully agrees with what I have said and he expressed sharp disappointment at today's developments," Schultze said.
If the price increases should be followed by the rest of the steel industry, overall steel prices would be 12.5 per cent higher than they were last September, which Schultze said is much higher than the rise of all industrial products, about 7 per cent.
The steel industry has raised prices four times since December, with the latest rise a 6 per cent boost on sheet steel products that took effect in June. Sheet steel is used to make appliances and cars, among other things, and is the industry's most important product.
Tin mill products are used to manufacture beverage containers and cans, while structural steels are used in building.
Schultze said that U.S. Steel Chairman Edgar B. Speer called him several days ago about the prospective increase. Schultze said he called back and told him the increase was inconsistent with the administration's efforts to restrain inflation.
He said he did not ask Speer to justify the increase nor did Speer try to. "They'll felt they had to do it,"Schultze said.
Administration officials have not had any further contact with Speer not with any other steel comapny executives. Bethlehem Steel Corp., the second biggest steel maker and a major producer of structural and tin mill steel, had no comment on U.S. Steel's action.
U.S. Steel said yesterday it planned to raise tin mill product prices 7 per cent and structural prices 6 per cent. It raised tin mill prices 4 per cent last March. Its last increase on structural products was in July, 1976.
U.S. Steel said that the increases announced yesterday will take effect Sept. 4 and will raise total revenues by 1 per cent.
Schultze said the administration has no power to change the U.S. Steel price increase and "seeks no power to do so." But Schultze said it is the administration's obligation to inform the public that these actions are inconsistent with reducing inflation and let the public "know of the need for moderation."
Schultze said yesterday's increase follows four others since December and comes at a time when the demand for structural steel is weak.
The steel industry is operating at less capacity than a year ago, the presidential adviser said. He also noted that imports of structural steel and tin mill products are up for more than imports of steel in general.