CEC

1

On April 10, 1962, as the United States was emerging from a recession, the nation’s largest steel companies raised
steel prices by 3.5 percent. President John F. Kennedy, who had repeatedly called for stable prices and wages as part
of a program of national sacrifice during a period of economic distress, held a news conference on April 11, 1962,
which he opened with the following commentary regarding the hike in steel prices. Read Kennedy’s remarks
carefully. Then write an essay in which you analyze the rhetorical strategies President Kennedy uses to achieve his
purpose. Support your analysis with specific references to the text.

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
5 defiance of the public interest.
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
10 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
Viet Nam—and asking union members to hold
down their wage requests, at a time when restraint
15 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
20 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rest of the industry, instead of rescinded, it would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
25 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
30 older citizens, and our new gains in purchasing
power.
It would add, Secretary McNamara* informed me
this morning, an estimated one billion dollars to the
cost of our defenses, at a time when every dollar is
35 needed for national security and other purposes. It
would make it more difficult for American goods to
compete in foreign markets, more difficult to
withstand competition from foreign imports, and
thus more difficult to improve our balance of
40 payments position, and stem the flow of gold.
And it is necessary to stem it for our national
security, if we are going to pay for our security
commitments abroad. And it would surely handicap
our efforts to induce other industries and unions to
45 adopt responsible price and wage policies.
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
50 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.
55 Steel output per man is rising so fast that labor
costs per ton of steel can actually be expected to
decline in the next twelve months. And in fact, the
Acting Commissioner of the Bureau of Labor
Statistics informed me this morning that, and I quote:
60 “Employment costs per unit of steel output in 1961
were essentially the same as they were in 1958.”
The cost of the major raw materials, steel scrap
and coal, has also been declining, and for an industry
which has been generally operating at less than two65 thirds of capacity, its profit rate has been normal and
can be expected to rise sharply this year in view of
the reduction in idle capacity. Their lot has been
easier than that of a hundred thousand steel workers
thrown out of work in the last three years. The
70 industry’s cash dividends have exceeded 600 million
dollars in each of the last five years, and earnings in
the first quarter of this year were estimated in the
February 28th Wall Street Journal to be among the
highest in history.
75 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
80 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.
The Steel Workers Union can be proud that it
85 abided by its responsibilities in this agreement, and
this government also has responsibilities, which we
intend to meet.
The Department of Justice and the Federal Trade
Commission are examining the significance of this
90 action in a free, competitive economy.
The Department of Defense and other agencies
are reviewing its impact on their policies of
procurement, and I am informed that steps are
underway by those Members of the Congress who
95 plan appropriate inquiries into how these price
decisions are so quickly made, and reached, and
what legislative safeguards may be needed to protect
the public interest.
Price and wage decisions in this country,
100 except for very limited restrictions in the case of
monopolies and national emergency strikes, are
and ought to be freely and privately made, but
the American people have a right to expect in
return for that freedom, a higher sense of business
105 responsibility for the welfare of their country than
has been shown in the last two days.
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.