E D IT O R IA L STAFF
E . L . S h a n e r E d ito r - in -c h ie f E . C . K r e u t z b e r o
E d ito r
Wm. M . Ro o n e y Ir w i n H . Su c h
N ew s E d ito r E n g in ee rin g E d ito r J . D . Kn o x Gu y Hu b b a r d
Steel P la n t E d ito r M a ch in e T o o l E d ito r D o n S. C a d o t
A r t E d ito r
A S S O C I A T E E D IT O R S G . H . M a n l o v e , W . J. C a m p b e l l G. W . B i r d s a l l , F . R . B r i g g s , D . B . W i l k i n
J . C . S u l l i v a n
N e w Y o rk : B . K . P r i c e , L . E . B r o w n e P ittsb u rg h : R . L . H a r t f o r d Chicago: E . F . R oss D etro it: A. H . A l l e n
W a sh in g to n : L . M . L a m m L o n d o n : V i n c e n t D e l p o r t
A S S I S T A N T E D IT O R S
R. W . S h e s t a g , A. J . F i n g u l i n , V a n c e B e l l , D o l o r e s K . B l a i i a
E D IT O R IA L C O R R E S P O N D E N T S R. W . K i n c e y L . C. F e l d m a n n B irm ingham , A la. Buffalo, N . Y.
G e o r g e R . R e i s s S a m u e l S . C a r r Y oungstow n, O . C in c in n ati, O.
F . S. T o b i n T o ro n to , O nt.
M a u r i c e B e a m 4 4 5 3 B el A ire D riv e , L a C an a d a ,
L os A ngeles, C alif, R o b e r t B o t t o r f f 4 1 5 B ush S t., S an F ran c isco , C alif.
R . C . H i l l
4 0 8 M ario n S t., S eattle, W ash .
B U S IN E S S STAFF
G . O . H a y s B usiness M anager
R. C. J a e n k e C. H . B a i l e y Advertising M anager A d v e rtisin g S ervice Hew Y o rk , E . W . K r e u t z b e r g , K . A . Z o l l n e r
P ittsb u rg h , S. H . J a s p e r , B. C. S n e l l C hicago, L . C . P e l o t t , V . W . V o l k C leveland, D . C . K i e f e r , H . G . R o w l a n d
L o s A n g e le s, F . J . F u l l e r J . W . Z u b e r C ircttlation M anager
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P en to n B u ild in g , C le v ela n d 13 , O hio
BRANCH OFFICES
Hew Y o rk 1 7 ...16 E a s t 4 3 rd St.
Chicago 11 5 2 0 N o rth M ich ig an Ave.
Pittsburgh 1 9 ... 2 8 0 0 K oppers B u ild in g Detroit 2 ...6 5 6 0 C ass Ave.
W ashington 4 ... 9 5 6 N a tio n a l Press B ldg.
Los A ngeles 4 . . . 1 3 0 N . N ew H a m p sh ire A ve.
London 2 C ax to n St., W estm in ste r, S .W . 1
Published b y T n E Pe n t o n Pu b l i s h i n g C o ., P e n to n f d ev ela n d 13, O hio, E . L . Sh a n e r, P re s id e n t and T re a su re r; G . O . Ha y s, V ice P re s id e n t an d G en era 1
•lanager; R . C . Ja e n k e, V ice P re s id e n t; F . G . St e i n e-
®*cn. Vice P re s id e n t a n d S e c re ta ry ; E . L . We r n e r, Assistant T re a su re r.
Member, A u d it B u rea u o f C irc u la tio n s; A ssociated business P a p e rs , In c ., a n d N a tio n a l P u b lish e rs’
Association.
Published ev e ry M o n d a y . S u b sc rip tio n in th e U n ited a ?itec anc* s e s s i o n s , C a n a d a , M exico, C u b a , C e n tra l sd South A m e rica, o n e y e a r $ 6 ; tw o y e a rs $ 10; all
; ^ e r co untries, o n e y e a r $12. S in g le copies ( c u rre n t 25c, E n te re d a s second class m a tte r a t th e tain SF a t C le v ela n d , u n d e r th e A c t o f M a rc h 3, C o p y rig h t 1945 b y th e P e n to n P u b lish in g Co.
T h e M a g a z i n e o f M e t a l w o r k i n g a n d M e t a l p r o d u c i n g
V O L . 11 6 . N O . 2 4 J u n e 11, 1945
--- N E W S ---
New Cutbacks May Free More Steel ... 91
Geneva Steel Operations Curtailed ... 94
W estern States Council Presses Campaign for Lower Steel Prices ... 95
Steel Men View Price Belief Inadequate ... 96
Bowles Defends OPA Price Control; Says Profits Top Peacetime Levels. . 97
Reconversion Planning Is Going Ahead Rapidly in C a n a d a ... 98
United Steelworkers' Policy on Organizing of Forem an Stated ... 99
State D epartm ent Seeks Power To Raise or Lower Rates of T a r i f f 104 Deferred Dem and Alone Insufficient To Maintain Prosperous Economy. . 113
— --- T E C H N IC A L ---
How W hite Motor Co. Checks Steel Analyses ... 120Low-power thermocouple system grades stock against a standard Controlling Quality of Products by Statistical M ethods ... 123
Rejections held to m inim um by inspection during manufacture D evelopment and F uture of Resistance W elding ... 125
Pressure range of standard equipment— 3 ounces to 300,000 pounds Making a “M ousetrap’' Firing Device from Stampings ... 126
Special jigs facilitate assembly of booby trap’s metal heart Im proved Materials and M ethods Aid in Preventing Corrosion ... 128
Study includes details on neutralizes and inhibitors Special Machines Provide Localized Annealing and H ardening ... 134
Production line units permit selective application o f heat ’ Four-Zone Conveyor Oven Affords D ust-Free Finishing ... 138
Full reheating and circulating system economizes on fuel W ire Rewinding E quipm ent Triples W ire Rope O u t p u t ... 144
Electronic control of drive steps up wire speed, holds it steady
FEATURES
As the Editor Views the News . 87 Men of Industry ....
n o Present, Past and Pending . . . 93 Obituaries ... . 112Transition Topics ... . 99 W ing Tips ... . 114
W indows of W ashington ... . 100 Industrial Equipm ent ... . . 152
WPB-OPA O r d e r s ... . 105 The Business Trend ... 196
Mirrors of Motordom ... . 107 Construction and Enterprise . . . 220
--- -M A R K E T S --- —
Industry Sees Less C ut Than Expected in Steel Production ... 201M arket Prices and Composites ... 202
I n d e x to advertisers ... 232
w m m m m m m zs
N E X T W E E K . . .
Mechanized Arc W elding Applied to Complex Part Factors in Designing for D ie Casting
“Tooling W ays” for Small-Scale Positioning Operations Evaluating Surface Finishes by Photoelectric Scanning Automatic Control Viewed as Dynamic U nit
T a k e P a r t in O ur C h a in P ro g ra m
It m a y be possible for you to be our star. For, our Chain Program is a cam p a ig n to ac q u ain t more chain buyers with Union Chains a n d the stars of such a program are, of course, our n e w customers.
So if you h a v e n 't used Union Chains, call us in on your next re
quirement. We'll do our best to m ak e it your m ost satisfactory chain contact. Our confidence is b a se d on our reputation a s chain specialists, ea rned be c a u se w e confine ourselves to the m an u fa c
ture of a complete line of steel chains, sprockets a n d flexible couplings. Then, too, w e do all w e c a n to be sure that our chain is used properly a n d that a d d s y ea rs of life. Whose life? Why the life of the chain a n d yours, too.
The Union Chain and Manufacturing Company . . . Sandusky, Ohio, U. S. A.
U nion Ch ain s for E v e r y A p p lic a tio n
Drive a n d Conveying Chains a n d Sprockets
B rid ge C h a in
C o m b in a tio n M a lle a b le Iron a n d Stool C h a in
H B (h ardened b e a rin g ) type ch ain
BP (b ar a n d p in ) typ e ch ain
Finished Steel Roller Chains a n d Sprockets
A l l m a n u fa c tu re r'! tla n d a rd , siz e Vt in. to 2Vi in. pitch S in g le a n d M u ltip le Strande Extended Pitch Series in siz es
I Vi in. to 4 in. pitch
SilentChainandSprockets
A l l siz e s V s in . lo l 1/, in. pitch
Flexible Couplings
R o lle r c h a in typ e Sile nt c h a in type C a t a lo g A - 2 c o v
ers D rive a n d C o n v e y in g C h a in . B-2 c o v e rs Fin ish ed Steel R o lle rC h a in .F C -1 c o v ers Flexible C o u p lin g s.
A s h fo r y o u r copies.
U n ion H B O ffset Side
b a r Roller C h a in is m a n u f a c t u r e d in a c o m p le t e r a n g e of strengths a n d in sizes from 1 % * to 6 " pitch.
R e c o m m e n d e d f o r h e a v y duty drives.
AS THE EDITOR VIEWS THE NEWS
Ju n e 11, 1945
Healthy for Industry?
R e p o rts fro m W a sh in g to n in d ic ate th a t th e H o u se S m all B usiness C o m m ittee is receiv in g a la rg e v o lu m e o f m a il fro m sm all m a n u fa c tu re rs a n d m e rc h an ts. A n analysis of th e le tte rs show s th a t th e w riters fe a r “th a t th e p o stw a r c o m p e titio n of la rg e d istri
b u tio n o u tle ts su c h as m a n u fa c tu re r-o w n e d re ta il sto res, c h a in a n d m a il-o rd e r houses w ill in crease a n d m ake it d efinitely h a z a rd o u s fo r m a n y sm all, lo cally -o w n ed , reta il firms to en g a g e in o r sta y in b u sin ess.”
M a n y in d u stria lists w ill rec o g n ize in this c o m p la in t th e fam iliar o u tc ry a g a in st th e c h a in stores b y in d e p e n d e n t m e rc h a n ts, b u t it m a y b e w o rth w h ile to c o n sid er w h e th e r or n o t it carries im plications for in d u stry . W o u ld circu m stan ces w h ic h te m p t sm all in d u stria l u n its to sell o u t to la rg e m a n u fa c tu re rs b e c o n sid ered w holesom e?
R e c e n tly a sm all fa b ric a to r w as re la tin g his difficulties. H e does a business of m ore th a n $ 2 ,5 0 0 ,0 0 0 an n u a lly . H is p u rch a ses o f ste e l a re sizab le en o u g h to m ake h im a v a lu e d cu sto m e r of tw o in te g ra te d p ro d u c e rs. D u rin g th e p a s t tw o d ec ad e s this fa b ric a to r h a s su ffered th e to rtu re of d ep re ssio n a n d en jo y ed sp u rts o f p ro sp erity . In re c e n t y ears h e h as b e e n p la g u e d m o re a n d m o re b y th e difficulties of c a rry in g on his business u n d e r g o v e rn m e n t reg u la tio n s. R ig h t n o w h e is c o n c ern ed b e c a u se h e , as ch ief ex ecu tiv e of th e sm all b u sin ess, is re q u ire d to sp re a d his a tte n tio n to o thin ly o v e r n u m e ro u s im p o rta n t m a tte rs. H e m u s t serve as g o v e rn m e n t c o n ta c t m a n , tax ex p ert, re n e g o tia tio n co n feree, em p lo y e rela tio n s concib'ator, W L B a n d salary sta b iliza
tio n ex p e rt, p rin c ip a l in c o n tra c t te rm in a tio n a n d in n u m e ro u s o th e r ca p ac ities re q u ir
ing h ig h ly sp e cia liz ed k n o w led g e a n d ex perience.
H e h as b e e n th in k in g th a t b ec au se th e size o f h is b usiness does n o t p e rm it h irin g executives to specialize in th e se jobs, a n d also in a sm u c h as h e sees steel com panies b u y in g u p o th e r local, in d e p e n d e n t e n terp rises, p e rh a p s h e m ig h t b e b e tte r off p ersonally if h e w e re to a c c e p t one of th e offers occasionally m a d e to h im b y ste el com panies to p u rc h a se his business. H e reasons th a t h e co u ld re m a in a t his p o st as a n em p lo y e, b u t w ith assistants to reliev e him of m u c h of his p re s e n t to o -th in ly sp re a d effort. H e w o u ld b e fre e of m a n y of th e h e a d a c h e s w h ich n o w c o n fro n t him .
W e d o u b t w h e th e r this p a rtic u la r m a n w ill sell his business. H e likes it too m uch.
H o w ev er, th e co nditions w h ich m ak e h im co n sid er selling are co n d itio n s affecting th o u sa n d s o f sm all m a n u fa ctu re rs.
A re circu m stan ces w h ich te m p t ow ners o f sm all in d u stria l u n its to sell o u t to th e b ig ones h e a lth y fo r in d u stry as a w hole?
tion a g re e m e n t o n a c o n tra c t involving $139 m illion.
T his fo re h a n d e d n e ss e n a b le d th e co m p an y to clear p la n t, disp o se of in v e n to ry a n d sh ift fro m p ro d u c tion on o n e w a r ite m to a n o th e r in 2 8 days. W ith o u t this te rm in a tio n p la n n in g , th e sh ift w o u ld h av e re q u ire d m o n th s.
T h e o th e r th in g to do is to ca n ce l ord ers fo r c o n tro lle d m a teria ls p ro m p tly as soon as a c u tb a c k oc
cu rs o r a c o n tra c t is te rm in a te d . B ecau se m a n y con
trac to rs h av e failed to do this, steel m ill o rd e r books show h u n d re d s o f th o u sa n d s o f to n s of steel for th ird -q u a rte r delivery w h ich are fictitious. T his is
(O V E R )
F O R E H A N D E D N E SS PA Y S:
M anyh e a d ac h es in c id e n ta l to rec o n v ersio n ca n b e avoided if w a r c o n tra cto rs w ill u se a little fo re sig h t in a n tic ip a tin g th e in e v ita b le. T h e re are tw o th in g s, am o n g o th e rs, th a t can b e d o n e rig h t n o w to m ini
m ize co n fu sio n la te r on.
O n e is to w o rk o u t a p re te rm in a tio n ag re em e n t w ith th e p ro p e r A rm y or N av y au th o rities. P re te r m in a tio n ag re em e n ts, sim ilar to th o se n o w b e in g n e g o tia te d w ith 19 ste el com p an ies, a lre a d y h av e p ro v e d th em selv es. T h e y save p rec io u s tim e. F o r exam ple, F o rd M o to r C o. e n te re d in to a p re te rm in a -
87
i
A S T H E E D I T O R V I E W S T H E N E W S
a serious th r e a t to th e reco n v ersio n p ro g ra m b ecau se it te n d s to o bscure th e a c tu a l a m o u n t o f steel av a il
a b le fo r civilian goods p ro d u ctio n .
C o -o p era tio n all along th e line now w ill fac ilita te reco n v ersio n m o n th s h en c e w h en th e going w ill b e
ro u g h . — p p . 92, 100
A M A T E U R S IN N E W ROLE:
A m erica’s positio n hi w o rld affairs follo w in g V -J D a y w ill d e m a n d a rea listic h a n d lin g o f th e p ro b lem s of in te rn a tio n a l trgd,©. T his n a tio n ’s re c o rd in th is r e sp e c t follow ing W o rld W a r I w as p re tty b a d a n d th e p ro sp e c t n ow is n o t too en co u rag in g . T h e chief difficult}' lies in th e fa c t th a t n e v e r h a v in g relied h eavily u p o n fo reig n tra d e a n d th e re fo re lack in g se aso n ed experience in it, w e n ow are seeking to g e t in to it h i a b ig w ay a t a tim e w h e n its pro b lem s are m ore c o m p lic ate d th a n e v e r before.
T h u s w e w itness efforts to ex ten d th e T ra d e A greem ents a c t to p e rm it g re a te r flexibility in raising o r lo w erin g tariff ra te s, pro p o sals to stockpile s tra te gic ra w m aterials as an aid in b a lan c in g exports and im p o rts a n d th e fortn h tio n o f “T h e B usiness a n d I n d u stry C o m m ittee fo r B re tto n W oods In c .” to ex
press in d u stry ’s view s on m o n e tary , financial a n d econom ic p ro b lem s involved in in te rn a tio n a l trad e .
W e n e e d all th e lig h t a n d ex p e rt counsel on fo r
eign tra d e w e can get. W e are am ate u rs in a new
role. — p p . 103, 104, 118
SU RVIVAL O F FITTEST:
O bservers of m a n u fa c tu rin g m e th o d s in th e a u to m o b ile in d u stry b elieve th e y d e te c t a lo n g -ra n g e te n d e n c y to w ard c u ttin g d o w n th e m a n h o u rs o f la b o r in v o lv ed in fo rging a n d m a ch in in g o p era tio n s, re d u c in g th e a m o u n t o f m e ta l w h ic h m u st b e rem o v e d a n d th e re b y slashing th e n e t cost of fa b ric a te d p a rts. T h ey conclu d e th a t th e industry' is tu rn in g a w a y fro m “expen siv e m ach in in g o p era tio n s” a n d of try in g to find o th e r, q u ic k er m eth o d s.
I t is tru e th a t th e se te n d en c ies are in ev id en ce, b u t it w o u ld b e a m istake to assum e th a t th e se efforts to ac h ie v e g re a te r efficiency w ill a lte r ap p re c ia b ly th e u se of fo rg in g a n d m a ch in in g e q u ip m e n t. T h e c o n sta n t rivalry' b e tw e e n various processes a n d m a chines forces im p ro v em en ts. P a st, p re se n t a n d f u tu re ad v a n ce s in fo rg in g an d m a ch in in g te c h n iq u e w ill te n d to offset inroads by a lte rn a tiv e o r co m p e tin g m eth o d s.
T h e law o f surv iv al of th e fittest o b ta in s in in d u s
try, b u t it seldom elim inates a w o rth y co n ten d e r.
— p . 107
P O ST W A R H O R IZ O N S :
W a r t i m e d ev e lo p m e n ts in je t p ro p u lsio n a n d gas tu rb in e s m a y b e p a v in g th e w ay for far-rea ch in g changes in tra n sp o rta tio n d u rin g th e n e x t d e c a d e .. A t a co n feren c e sp o n so red b y A T SC of th e A rm y A ir F o rces a n d G en e ra l E le c tric C o., th e consensus of opinion am o n g th e 2 0 0 en g in eers in a tte n d a n c e w as th a t je t p ro p u lsio n a n d gas tu rb in e s w o u ld d evelop sw iftly in to th e b asic p o w e r u n its of b o th m ilita ry a n d civilian aviation. O n e sp e a k e r (p. 114) envisioned low p ric e d p riv a te p la n es p o w e re d b y gas tu rb in e - d riv en p ro p e lle rs, h elico p ters w ith je t p ro p u lsio n gases e m itte d fro m th e tra ilin g tip s of th e p ro p e lle r b la d es a n d la rg e com m ercial f re ig h t a n d p a ssen g e r lines u sin g p la n es p o w e re d b y gas tu rb in e p ro p e lle r p o w e r p la n ts . . . . A t a n o th e r m e etin g , G. E d w a rd P e n d ra y , assista n t to th e p re sid e n t, W e stin g h o u sc E le c tric C orp. said (p. 116) th a t “n ew p o stw a r in d u stries w ill sp rin g fro m this enorm ous w artim e d e v e lo p m e n t of ro ck e ts, ro c k e t m o to rs, je t p ro p u l
sion p la n es a n d gas tu rb in e s. T h e size of th e n ew in d u strie s w ill d e p e n d la rg e ly on th e pro g re ss our en g in eers a n d scientists are a b le to m ak e d u rin g th e re m a in d e r of th e w a r” . . . . S oviet a rc h itec ts a n d en g in eers h av e o u tlin e d to A m erican co n tem p o raries (p. 104) R u ssia’s p ro g ra m fo r co n stru c tin g 2 5 m illion d w ellin g u n its in th e n e x t d e c a d e . . . . S tressing th e im p o rta n c e o f efficien t sales in th e p o stw a r p e rio d , L . S. H a m a k e r, assista n t g en e ral sales m a n a g e r of R e p u b lic S teel C o rp ., to ld W o rc es
te r sales executives (p. 113) th a t “a n y c o m p an y th a t has on h a n d o r w ith in re a c h 5 0 p e r c e n t of its p re w a r sales force is in an e x c ellen t p o sitio n ” . . . . T h ro u g h m ean s o f m e ch a n ica l im p ro v e m en ts on w ire re w in d in g lines a n d th e a d o p tio n o f elec tro n ic co n tro l o f drives (p. 144), G ilm ore W ire R o p e D iv i
sion of Jones & L a u g h lin S teel C o rp . h as trip le d p ro d u c tio n a n d g a in e d o th e r ad v a n ta g e s o v er th e fo rm e r g ro u p w ire rew in d e rs . . . . U nless an u n ex p e c te d in c re ase in th e d e m a n d for ste e l p la te s fro m W e st C o a st sh ip y a rd s dev elo p s soon (p. 94) th e G en ev a ste el p la n t is ex p e c te d to close in S ep te m b e r . . . . P o stw a r p ro g ra m o f G en e ra l E le c tric Co. w ill in c re ase its re se a rc h sta ff from 540 to 800 p erso n s (p. 119) a n d involve th e ere ctio n of a n ew re se a rc h la b o ra to ry to co st $8 m illion . . . . A n im p o rta n t re p o r t on “S teel E x p an sio n fo r W a r”, p re p a re d b y W . A. H a u c k of th e S tee l D ivision of W P B (p. 97), w ill b e d ig e ste d in n e x t w ee k ’s issue.
E D IT O R -IN -C H IE F
O n e o f the I n l a n d cold re d u c tio n m ills , tvhich re s tr ip to p r e c is e th ic k n ess a n d p ro d u ce s a lu s tro u s J
For Finer Steel Products .. .Tom orrow
C onsult Inland when plans are started for parts or products w hich m ust have th e strength, u tility , and b eau ty th a t can come on ly from steel sheets and strip.
Inland was am ong th e first to install m od em continuous m ills. I ts engineers and m etallurgists h ave contributed m any n otab le advancem ents to sh eet and strip
production m ethods and quality control
— resulting in unsurpassed uniform ity, w orkability, and finish.
Inland experts are ready to help you select th e right steel for finer products and econom ical fabrication—whether th e products are for w artim e use, or for th e m arkets th a t w ill follow V ictory.
Sheets . Strip . Tin Plate . Bars . Plates . Floor Plate . Structorals . Piling . Rails . Track Accessories . Reinforcing Bars
I N L A N D STEEL C O M P A N Y
38 S. Dearborn St., Chicago 3, 11!.
SALES OFFICES: C in cin n a ti • D etroit • In d ia n a p o lis • K ansas C ity • M ilw au k ee • New York • S t. L ou is • S t. Paul
W o r d s p r o u d l y s p o k e n b y m e n w h o k n o w , m e n w h o h a v e th e u tm o s t c o n f id e n c e i n t h e c r a f t th e y h a n d l e . T h e s e m e n k n o w t h a t A m e r ic a h a s g iv e n th e m t h e b e s t t h a t e n g i n e e r i n g s k i l l a n d m o d e r n m a n u f a c t u r i n g te c h n iq u e s c a n p r o d u c e . P A R I S H is p r o u d a l s o t o h a v e a p a r t in p r o d u c i n g t h e s e p la n e s . I l l u s t r a t e d a b o v e a r e e x a m p le s o f f i g h te r p la n e w i n g f ille t a n d a i r c r a f t c o w l i n g a s s e m b ly p a r t s p r o d u c e d b y P A R I S H to c o n f o r m t o r i g i d i n s p e c t i o n s t a n d a r d s . O u r m o d e r n p l a n t fa c ilitie s i n c l u d e e v e ry p r o c e s s f r o m o r i g i n a l d e s i g n a n d m a n u f a c tu r e o f d ie s , to th e c o m p l e t e d p r o d u c t . N o n - f e r r o u s a s w e l l a s f e r r o u s m e ta l s a r e a b ly h a n d l e d b y o u r s ta ff o f e n g i n e e r s a n d l a b o r a t o r y a n a ly s ts , a s s u r i n g q u a lity , e c o n o m y a n d s p e e d i n p r o d u c t i o n . P o s t - w a r p l a n n e r s w i l l d o w e l l t o c o n s i d e r t h e i m p o r t a n c e o f P A R I S H p l a n n i n g a n d p r o d u c t i o n in r e l a t i o n t o t h e i r p e a c e tim e r e q u i r e m e n t s . O u r g r e a tly e x p a n d e d p l a n t f a c ilitie s a r e a t y o u r s e r v ic e . W h y n o t w r i t e u s to d a y a n d s e e w h a t P A R I S H c a n d o a n d s a v e f o r y o u .
A R ISH PRESSED STEEL CO.
R E A D I N G , P E N N S Y L V A N I A
S c d U t c U a M f, O ff
SPI CER MA NU F AC T UR I N G C O R P O R A T I O N
W E S T E R N R E P R E S E N T A T I V E : F. S O M E R S P E T E R S O N , 5 7 C A L I F O R N I A ST., S A N F R A N C I S C O , C A l .
R E C O N V E R S I O N
First of th e 1946 m odel automobiles to be un
veiled is this hand-built m odel of the postwar Ford. Production will start in 60 to 90 days if
materials are available
New Cutbacks M a y Free More Steel
Allotm ents for civilian uses for third quarter in cre a se d 3 .6 p e r cent. S o m e "f r e e " m aterial to b e available. A u to m a k e rs u n veil first interim m odels. F ord expects to b e g in m a nu fa ctu re within 6 0 to 90 d a y s
HEAVY new cutbacks in military pro- } duction, reported to be in the making in Washington, are expected to free sub
stantial amounts of materials and man
power for civilian goods production by next month. The new cutbacks are said to involve $2.5 billion in tire Army Service Forces 1945 program and include most of the hard items used by the ground troops— trucks, tanks, guns, am
munition and communications equipment.
Manufacturers are scheduled to receive cancellation orders or instructions to re
duce production over the next ten days and actual output will begin to feel the effects of the cutbacks late in June and
<m a larger scale in July.
This is a development for which manu
facturers ready to resume civilian lines and W ar Production Board officials in charge of reconversion have been await-
®g. To date, reconversion has made slow
progress due to the scarcity of materials and manpower and many of the programs for civilian goods form ulated by WPB have been predicated on the expectation of large cutbacks by the arm ed forces.
WPB officials hope the forthcoming cutbacks, com bined with those already announced, will ease bottlenecks on the critical materials, especially steel sheet and strip, and that these materials can be released in greater volume for build
ing automobiles, refrigerators, washing machines, stoves and similar items.
In advance of announcem ent of the ASF cutback, third quarter allotments of steel for domestic nonmilitary end uses were increased 330,000 tons over such allocations for the first quarter this year, the last full quarter of the two-front war.
Although these allotments for civilian uses represent an increase o f . about 3.6 per cent over the first quarter level, they
do not represent any increase for most domestic programs. Only those programs where essentiality is clear have received the larger allotments. These include:
Farm machinery, containers, oil country goods, buses, trucks, railway passenger cars, construction components, such as plumbing, heating equipm ent and build
ers’ hardware.
The only two civilian items not pre
viously allotted steel which are included in the third quarter program are refrig
erators and washing machines. Pro
gramm ed production of 350,000 washing machines and 265,000 refrigerators for the third quarter have been authorized.
These allotments w ere based on WPB’s expectation th at the supply of steel for the third quarter will continue at about the same levels as in the tw o previous periods, roughly 14,309,000 tons of car
bon steel and 1,839,000 tons of alloy steel.
In addition to the steel allotted to essential production, there will be about 500,000 tons of “free” steel available to industry during the third quarter. “F ree”
steel may be purchased on th e open m arket w ithout priorities and subject.only to W PB’s inventory restrictions. This
June 11, 1945 91
R E C O N V E R S I O N
tonnage of “free” steel probably will be increased by the new cutbacks.
Small industries (those producing $50,- 000 worth of items each quarter) will be aided in the purchase of free steel by being allowed to place an AA-4 priority rating and a Z~3 allotment symbol on their purchase orders. This means that before any big purchasers can buy free steel, mills will have to fill the rated orders placed by the small manufacturers.
In the passenger automobile industry, regarded by many as the bellwether in reconversion, there exists an underlying optimistic tone over ability to obtain the necessary sheet and strip for initial re
quirements. Parts releases now in the bauds of suppliers call for first shipments around July 2, indicating confidence that basic materials will be in the plant by that time.
Now being circulated in Detroit are surplus property listings of the Detroit Loan Agency. One of the latest, list No.
33, covers semifinished steel only, and includes 16 mimeographed pages of some 350 separate items aggregating well over 3000 tons in all. Products available include nearly all forms of hot and cold- rolled carbon and alloy squares, wire rods, rounds, bars, strip, sheets, plate, tubing and tool steel.
I t is believed by some th at if this much surplus material is available in the Detroit region alone, the other 22 regional agencies must also have considerable quantities, w hich in turn could reflect an early easing of allegedly tight situations in new steel products, notably sheet and strip.
CHOKEPOINT
One of the greatest threats to the reconversion program is wide
spread failure of contractors to cancel orders for controlled m ate
rials no longer needed for war con
tracts which have been terminated or cut back. Mills have on their books for July, August and Sep
tem ber shipm ent rated orders for hundreds of thousands of tons of steel products no longer required due to terminations or cutbacks.
W ar Production Board officials report this is increasing the diffi
culty of finding steel for com
panies reconverting to civilian goods production. They feel if th e situation is not remedied it will delay reconversion a n d contribute to an acute unem ployment prob
lem soon. A “flying squad” of 400 men in WPB field offices will urge term inated and cut-back contrac
tors to cancel orders for unneeded m aterial promptly. The Army also is requesting its steel procure
ment officers to undertake a sim
ilar campaign.
Recognizing tire effects of progressive war m aterial cutbacks, the D etroit WMC Office has removed practically all m an
power controls, affecting workers in that area, making D etroit the first major war industry center to be so relaxed. Spe
cifically, the following have been re
moved: Em ploym ent ceilings on employ
ers; the priority referral procedure of USES; the 48-hour work week, and the need for statements of availability for anyone except a person leaving an essen
tial job. The latter exception may also be removed by June 15.
Packard has notified suppliers its orig
inal orders and shipping schedules are now released, with “X-day” specified as June 1, and shipments to start at various intervals from this date.
Ford officials have indicated produc
tion can be started in 60-90 days, with the proviso materials will be available.
This prediction is regarded generally as optimistic, although there is also a con
siderable volume of opinion leaning to the belief the industry will produce well over its initially assigned quota of 216,- 000 passenger cars during the remainder of diis year.
Ford was the first m anufacturer to release pictures of the new model cars, which show no radical departure from the past in styling, although differing ap
preciably from die last of the 1942 models. The trend toward styling ex
emplified in the 1941 Pontiac and certain Hudson models was unmistakable in the first hand-built 1946 Ford.
Various publicity men from other man
ufacturers are “sitting” on photographs of their interim models, in most cases awaiting approval of dieir company heads for releasing diem.
Steel producers generally are a litde less optimistic than m anufacturers of consumers goods concerning the avail
ability of steel for civilian goods. Mills generally are booked solid dirough the diird quarter on rated tonnage and in many instances well into the fourth quarter. Unless cancellations develop rapidly, the open-ending of the Con
trolled Materials Plan July 1 may not j perm it die delivery of any considerable ' tonnage of steel to civilian manufacturers. ;
F ull Rolling Capacity Used W here cancellations have been made j as result of cutbacks in the armament programs, the rolling capacity thus re
leased generally has been taken for some odier urgently needed material.
Inland Steel Co., Chicago, has out
lined the change in CMP regulations’ and its effect on the probable availability of steel in a letter to customers which fairly summarizes the situation for most mills:
“Controlled Materials producers are perm itted to deliver ‘unrated’ orders after June 3Q, 1945, if m aterial is avail- ; able after providing for all properly : authorized CMP orders.
“Controlled Materials producers must : defer delivery of ‘unrated’ orders to the extent necessary to make deliveries on time of all Authorized Controlled Mate
rials Orders or other orders which the!’
are required to accept. However, when an ‘unrated’ order is scheduled for de
livery w ithin less time than the lead ; times of Schedule 3 to CMP Regulation ; Joseph W . Frazer, chairman, Craham-Paige Motors, checks measurements on
a preliminary m odel of the company’s postwar car. Mr. Frazer says the car mill he entirely new and will seat six persons comfortably. N E A photo
92 f T E
E t
R E C O N V E R S I O N
1, the producer need not defer such an order.
“An ‘unrated’ order as defined in tire CMP am endm ent is any order other than an Authorized Controlled M aterial Order or an order a producer is required to accept by w ritten direction of WPB.
“Our backlog of CMP tonnage has not changed appreciably since V-E Day, and as a consequence our current schedules and those for the third quarter a t present contain only CMP tonnage. Our ability to deliver ‘unrated’ tonnage in this period will of course, depend on the extent to which this backlog of author
ized and directed tonnage in each par
ticular product is reduced and the rate at w hich this reduction materializes.
Similarly for the future it is impossible at this time for us to determine w hat our position will be, as it is entirely predi
cated on the requirem ents of the program covered by WPB allotments or priority protection.
“You may be assured th at it is our desire to co-operate with you to the full
est extent possible and that we will keep you informed of any changes which may influence our ability to produce ‘un
rated’ tonnage.”
Conversion Allotments Canceled WPB announced changes applicable to steel producers on and after July 1 when CMP will be open-ended. Direc
tion 71 to CMP regulation 1 outlines procedure for a producer to obtain steel for further conversion effective July 1. WPB will no longer issue fur
ther conversion allotments to producers not operating under production direc
tives for steel for further conversion which had been approved on Form CMP- 4b. All such allotments for third quar
ter and thereafter are canceled effec
tive June 1.
The directive explains how a producer not operating under production directive may use the further conversion allot
ment symbol to replace m aterial used in filling authorized controlled m ate
rial orders and that production directives under w hich certain producers operate will be adjusted to reflect only the order load of authorized controlled ma
terials orders.
Cutbacks in the munitions program and the slowness in getting started on civilian production are causing notice
able easing in the m anpower situation in some areas; in others, of course, the situation remains extremely tight.
The W ar M anpower Commission has shifted nine areas from group 1 to group 2 ratings as labor supply and dem and in these districts approach a balance.
The areas transferred to group 2 : Ft.
Wayne, Ind., Lima, O., Los Angeles, Morristown, N. J., Philadelphia, Pontiac, Mich., Santa Ana, Calif., South Bend, Ind., and W aterbury, Conn.
Seven labor m arket areas have Been shifted from group 2 to group 3 , where a moderate surplus exists or is anticipated;
They are: Detroit, Ft. W orth, Tex.,
Grand Island, Nebr., Kenosha, Wis., Providence, R. I., Talladega, Ala., Lin
coln, Nebr.
Muskegon, Mich., has been shifted from group 1 to group 3. Only area moved into group 1 was Asheville, N. C.
Decisions to retain or remove m an
power controls in the various areas will be made on an area basis under a pro
posal agreed upon at a conference of na
tional and regional labor-management committees w ith WM C officials in W ash
ington. This method, instead of direc
tives from the national headquarters, will place the prim ary responsibility for modification or elimination of controls upon the persons most directly affected.
Pocket unemployment has developed in some areas and revised work sched
ules have caused scattered strikes. Three plants of the Pliggins Industries Inc. ship
yards were closed down by dissatisfac
tion of employes over contract term ina
tions. Brier Hill works of Youngstown Sheet & Tube Co. suffered a ten-day stoppage as m aintenance workers pro
tested a new work schedule. Industrial and political observers expect the labor
situation will become more aggravated as munitions cutbacks and the transition to civilian production cause temporary unem ployment to increase.
Meanwhile war contractors last week were supplied with guideposts to aid them in distinguishing betw een recon
version costs which can be written off as operating expenses and those which must be capitalized for tax purposes.
T he Internal Revenue Bureau ex
plained that costs incurred by a contrac
tor in restoring his plant to prew ar lay
out will be treated as business expenses and allowed as deductions in measuring profits subject to income and excess profits taxes.
On the other hand reconversion ex
penditures which either enlarge or im
prove facilities as com pared with their prereconversion status will have to be capitalized and written off in subsequent years under the regular depreciation pro
cedure.
The same procedure will be followed by the Army and Navy in renegotiating excessive contract profits where reconver
sion costs are involved.
Present, Past and Pending
■ JE S SO P STEEL ORDERS W z -IN C H COLD STRIP MILL
Wa s h i n g t o n, Pa.—Jessop Steel Co. has ordered a 19%-inch Sendzimir reversing cold
strip mill under license agreement w ith th e Armzen Co., M iddletown, O. The new mill will have a capacity of 6000 tons annually and will be used primarily for cold rolling solid and composite stainless and other alloy steel. The mill is being con
structed by the W aterbury-Farrell Foundry & M achine Co., W aterbury, Conn.
H SENATE VOTES TO DISSOLVE FIVE WARTIME AGENCIES
Wa s h i n g t o n— The Senate last week passed-b y voice vote and sent to the House
legislation dissolving five wartim e agencies and transferring their powers and func
tions to th e Reconstruction Finance Corp. The agencies are: Defense Plant Corp., Metals Reserve Co., Rubber Reserve Co., Defense Supplies Corp. and Disaster Loan Corp.
■ GENERAL MOTORS DELIVERS 75 CIVILIAN C O A C H E S
De t r o i t— Truck & Coach Division of General Motors last week m ade its first big d e
livery of civilian passenger coaches since th e start of the w ar w hen it turned over to N ew York and Chicago coach operators 75 of the 45-passenger type vehicles. General Motors had orders on hand at th e end of April for 5632 coaches and expected to de
liver 3575 before th e end of the year.
■ FRANCE'S 20-YEAR MACHINE TOOL NEEDS SET AT 200,000
Wa s h i n g t o n— France’s requirem ents of m achine tools for renewal purposes over the
next 20 years is estimated a t 200,000 units. This will necessitate some importations pending development of the domestic industry. About 180 companies in France were engaged in the m anufacture of machine tools before the w ar of which only four employed more than 500 workers.
■ TOTAL O F 112 MERCHANT SHIPS DELIVERED IN MAY
Wa s h i n g t o n—D elivery of 112 ships of 1,120,594 deadweight tons in May brought
m erchant ship production foi first five months of 1945 to 586 ships of 5,948,735 dead
weight tons, Maritime Commission said last week.
■ FARM MACHINERY OUTPUT LAGS 1 3 % BEHIND SCHEDULE
Wa s h i n g t o n— Total farm machinery and equipm ent scheduled by 630 large producers
in the year beginning July 1, 1944, amounts to .$504,140,751. As of April 30, produc
tion was approximately 13 per cent behind schedule.
June 11, 1945 93
W E S T C O A S T
S H O W S H O U S IN G P LA N S: R. J.
Thomas, r i g h t , president of the United A u tom o
bile W o r k e r s - C IO , confers with H enry J. Kaiser in Sa n F r a n c i s c o with the avow ed intent to persuade M r. Kaiser to en
ter the autom o
tive field. Mr.
Kaiser declined comment on his intentions in the automotive field, but is pictured here show ing the union l e a d e r some of his plans for postwar pre
fabricated hous
ing units. N E A photo
Geneva Steel Operations Curtailed
Structural mill a lre a d y out of p ro d u ctio n a n d Se p te m b e r sh utd ow n o f p late mill a p p e a rs likely with o rd e r b a c k lo g sh rin king
BARRING an unexpected and unlike
ly increase in demand for steel plates from W est Coast shipyards w ithin the next few weeks, operations at the $200 million Geneva steel plant in Utah are expected to come to a halt in or about September.
Moreover, all indications are resump
tion of operations is unlikely until after the plant has been sold to private inter
ests and facilities have been expanded and converted to produce products for which there is a civilian market.
Operation of the structural steel unit at Geneva already has been discontinued.
The plate mill has enough orders to con
tinue in operation until August at a rate of 45,000 tons monthly. Plate orders have been dwindling sharply since early this year, and virtually no government orders have been received since V-E Day. Labor from the structural mill will be trans
ferred to tlie plate mill.
W ithout doubt the focus of most west
ern discussions of postwar prospects, the Geneva mill’s eventual fate probably will not be decided for several months. W est
ern observers believe there is a better than 50-50 chance that it will be operated by private interests after the war. However, how successful a venture it will be in peacetime is a m atter dependent on a great many factors, such as its competitive position with established eastern plants, m arket possibilities, readjustm ent of freight rates, th e trend of exports, the basis for recapitalizing the extremely high cost of construction, and th e conversion of production facilities.
R F C W a n ts P la n t To C o n tin u e Up to now th e Reconstruction Finance Corp., which holds title to Geneva, lias hinted th at it wants to see the plant continued in postwar operation.
As for disclosing actual procedure or terms for disposing of the plant, the RFC has done nothing. Indications are that it eventually will be sold at auction to the highest bidder. Thus far three interests have signified an intention to bid— U. S.
Steel, Colorado Fuel & Iron Corp. and Henry Kaiser.
Sale of the plant probably will be de
layed until after the RFC has analyzed a survey now being m ade by a private engineering firm. This appraisal will cover all phases of the western steel situation, both as concerns Geneva and Fontana, and the other steel production facilities.
Preparing Geneva and Fontana for postwar production will be cosdy. Esti
mates are d iat well over $100 million of new facilities will be needed. Various types of mills have been discussed, in
cluding expansion to make light sheet products including tin plate, pipes and tubes and die like. D uring the war, both Fontana and Geneva have been produc
ing ship plates chiefly, and Fontana has been making steel billets for artillery shells.
No definite figure has ever been cited for expanding and converting Geneva to postwar operations. However, Mr. Kaiser has estimated he will require about $52 million for th e shift-over at Fontana. The Bank of America and other western insti
tutions have m ade an offer of a $60 mil
lion loan to Mr. Kaiser for tiiis purpose, subject to refinancing of th e RFC loan which Mr. Kaiser borrowed to finance Fontana’s construction. This amount, originally $111 million, is expected to total $71 million w hen the w ar ends. Mr.
Kaiser believes b y that tim e he will have amortized $40 million of the total bor
rowing.
At conferences here recently between Mr. Kaiser and R, J. Thomas, president of the United Automobile Workers (C .I.O .), Mr. Kaiser again took the op
portunity to state th at an early decision on refinancing terms by the RFC is neces
sary for early conversion of the Fontana plant. H e said th at all of his postwar plan
ning hinges on the R FC action, and de
cried the present delay and uncertainty.
Mr. Thomas, following the conferences, said: “Kaiser should definitely get the Fontana steel plant.”
Mr. Kaiser also stated that he had a
$15 million eastern order for steel prod
ucts, contingent on th e plant’s conversion.
N e w Plants and Expansions Total $3,602,000 in Month
Eighteen new factories w ere established in Los Angeles county, Calif., during April, representing total investments oi
$.1,290,000 and employment capacity of 234 workers. Twenty-two expansions of existing factories took place during the same period, with investments for the latter of $2,312,000 and jobs for 406 workers.
Since January, new plant and expan
sion investments total $13,393,000.
The new industries engaged in metal working include:
Precision Oil Field Service Co., 8660 Atlantic boulevard, South Gate, to manu
facture oil field drilling equipm ent, and for m aintenance of a service department.
Pacific C utter & Reamer Co., 6611 S.
W estern avenue, manufacturing high
speed cutting tools.
Landgraf Helicopter Co., 8024 S.
Western avenue, making a small number of helicopters and continuing experimental work.
Sbeco Mfg. Co., 1913 E ast 64th street,
94 / T E E l
Western States Council Presses Campaign for Lower Steel Prices
C om m ittee h o ld s p rice s sh o u ld b e b a se d o n actual costs plus re a so n a b le profit. C o n fid e n t G e n e v a a n d F on ta n a Plants can b e o p e ra te d at levels c o m p a ra b le with p lants in other areas.
W ill seek reduction in freight rates has begun production of electric welding
and automatic burning equipment.
Exact-O Mfg. Co., 115% W. Arbor Vitae street, Inglewood, making dies and tools and doing experimental work.
Gear Engineering & Mfg. Co., 509 W.
Vernon avenue, making gears up to 12 inches in size.
Commercial M achine Shop Co., 720 N. Broadway, aircraft parts, dies, tools, jigs, fixtures and gages.
Fred W. Pickell & Associates 5701 York boulevard, will make dies and tools.
Chrisco Grinding Co., 2622 Hyperion avenue, external grinding.
Lorena Specialties Co., 1132 S. Lorena street, making screw m achine products.
Wes-Tex Engineering Co., 1711 Stand
ard street, Glendale, machine shop spe
cializing in grinding gage plugs.
Among plant expansions is th at of Har- shaw Chemical Co,, E l Segundo, which has authorization to construct an anti
mony smelter , and oxide plant for $350,- 000. Work is to be completed by July 1.
Doak Aircraft Co. Inc., Torrance, plant expansion.
Falcon Engineering Co., Los Angeles, additional 25,000 square feet for m anu
facture of aircraft parts.
California Cornice, Steel & Supply Co., 1620 N. Spring street, Los Angeles, will construct warehouse of about 20,000 square feet.
Barker Grinding Co., 5813 Wilmington avenue, Los Angeles, is constructing build
ing with 14,000 square feet floor space.
Star Radiator Co., 647 Cores avenue, Los Angeles; 12,000 square foot addition;
company makes air conditioning equip
ment.
Universal Metal Products, 2940 E.
Olympic boulevard, Los Angeles, maker of dies, tools, metal stampings and air
craft parts; plant addition of 6000 square feet.
Irwin W. Masters Inc., 3035 Andrita street, Los Angeles, maker of tube and pipe fittings for airplanes, 4600 square foot addition.
Bone Engineering & Tool Co., 701 W.
Broadway, Glendale, is erecting 3000 square foot addition for m anufacture of dies, tools, jigs, fixtures and special ma
chines.
Southwestern Machine Co., 316 Azusa street; constructing a 2800 square foot building at Los Angeles; maker of special automatic machinery.
Steel Distributor Plans New W arehouse at Seattle
Permission, to construct an office and warehouse building in Seattle has been granted to A. M. Castle & Co., steel dis
tributors, Chicago, by the W ar Production Board.
The company has operated a ware
house in Seattle for 30 years, and in 1942
*ts location was taken over by the gcy- ornment. Since then, th e company has been operating in rented property.
COM BINED thinking of steelmak
ers, consumers and other businessmen is reflected in recommendations framed by the W estern States Council’s Steel Committee at a recent meeting and now being sent to government leaders through
out the nation.
The committee statem ent is designed to bring about larger postwar quanti
ties of steel at lower prices for the 11 western states.
Kenneth T. Norris, president, Norris Stamping & Mfg. Co., Los Angeles, and chairman of the committee, has an
nounced that copies of the recommenda
tions are being sent to senators, con
gressmen, the Reconstruction Finance Corp. and Defense Plant Corp., as well as to railroads and steel produc
ing companies.
To achieve lower priced steel, the committee’s statem ent points out, “The greatest single contributing factor will be elimination of the premium paid by western steel buyers during the prewar period over prices paid in other indus
trial centers.”
The committee declares its confidence that the Geneva and Fontana steel plants can operate a t a production level as high, or higher, than the average for the steel industry as a whole.
W ould Include Price Policies Sale contract of the government- owned mill at Geneva and adjustm ent of the loan at Fontana should include dec
larations of price policies to be put into effect by the mill operators, the recom
mendations point out.
These price policies should be based on costs plus a reasonable profit and should not include phantom freights or other factors unrelated to actual costs.
On the fiscal futures of the two plants, the recommendations make clear, “If the government should attem pt to realize full 100 per cent return on its investments tlie mills would remain idle because the capital investment per ton of capacity would not permit operation in a com
petitive market.”
F or the Geneva mill to operate in the postwar period, the recommendations continue, freight rates on finished steel from ' the mill to western markets must be substantially reduced in advance of disposition of the mill.
In summarizing, the committee held:
“Studies as to possible production costs at the two plants lead to the con
clusion that lower western prices, with attendant industrial growth, can and will be attained.”
Job O p e n in gs Expected in Civilian Industry on Coast
Delegation of authority to the Los Angeles district office of Office of Price Administration to set prices on new civil
ian products m anufactured in Southern California will result in 75,000 new job openings for men and women work
ers recently laid off in war plant cut
backs, Harold W right, general manager of the Chamber of Commerce, predict
ed last week.
Heretofore, makers of an estimated 2000 civilian goods items have applied to the W ashington OPA for prices on both new and improved products.
O ther relaxations deemed necessary for return to peacetim e production com
mensurate with the continuance of need
ed w ar production are listed by the chamber as follows:
Classification of this region as a Group III stringency area instead of Group II as at present, so as to enable exist
ing plants and numerous new businesses to utilize workers.
Im m ediate release of materials for consumer production in plants now lo
cated here and in approximately 20 new industries which have com mitted them selves by investment to begin production when materials become available.
W e st C oast Ship-Repair Y ards N eed M o re W orkers
H iring rate in W est Coast government ship-repair yards has not kept pace with enemy attacks on naval vessels in the Pacific, although employment increased monthly during the first four months of 1945, Paul V. McNutt, chairman, W ar Manpower Commission, reported recently.
Employment in these yards, located in the Los Angeles, San Francisco bay and Seattle-Puget sound vicinities, rose from about 95,000 in January to more than 100,000 in April. This increase is not sufficient to repair battle-damaged ships, lines of which are waiting in the harbors of some W est Coast ports for repairs, and in all West Coast government shipyards thousands of additional workers are critically needed.
June 1 ], 1945
95
P R I C E S
Steel Price Relief Held Inadequate
Y E A R AFTER D -D A Y : W recked G erm an an d Am erican tanks stand side b y side in their gra ve ya rd off Utah Beach, N orm and y, a ye a r after Am erican forces stormed the beaches of France to open the western front. Disposal of the scrap is one of the m any reconstruction problems.
N E A photo In crea ses g ra n t e d w o rk out to
actual d ecrea ses for sm all n o n in te g ra te d mills. Industry g r o u p rep orted critical of O P A policy
CONSIDERABLE speculation as to the course of steel prices over coming months is following in the wake of the recent action of the Office of Price. Ad
ministration perm itting advances of ?2 to $7 per ton on 14 specified products.
W hether OPA will push its price study with a view to effecting compensatory price decreases on other products is un
certain since industry earnings are likely to be adversely affected over coming months by shrinkage in w ar dem and and increased costs attending reconversion.
Profit margins of most steelmakers have been due largely to volume war business.
W ith the change in product demand, continued high production costs and controlled prices, the profit position of tho industry may deteriorate rapidly.
Inadequacy of the price relief re
cently granted the industry is reported to have been voiced at a recent meeting of die OPA General Steel Products Ad
visory Committee. Tw o resolutions bear
ing on the price situation in die industry are said to have been adopted.
O ne resolution, it is reported, points out th e recent increases do not maintain the profit margins on the products speci
fied which prevailed between Oct. 1 and Oct. 15, 1941 as directed by th e price control act. Further, th e resolution is said to hold diat the increases fail to cover total costs of production of the products involved; that tiiey do not comply with the OPA product standard as outlined to Congress, being based upon an arbitrary modification of that standard, that is, being measured by average manufacturing cost rather than b y the out-of-pocket cost of the highest cost non-marginal producer.
T he resolution, it is reported, goes on to declare the increases were determined on th e basis of an understatem ent of average manufacturing cost, since no al
lowance was m ade for the estimated cost of th e elimination of intra-plant in
equities, ordered by the National W ar Labor Board. This cost, currently ac
cruing, is retroactive to around Jan. 1, 1944, and since, in contravention of the statutory m andate that costs be computed
in accordance w ith established account
ing methods, profits on raw materials w hich go into the manufacture of steel products within an integrated company have been credited against the cost of those steel products, and emergency amortization over normal has been ex
cluded from manufacturing costs though the writing off of such wartime invest
m ent is provided by statute.
Claims Price Increases Inequitable The resolution is understood to declare the price increases are not fair and equitable to many semi-integrated and nonintegrated companies in th at they are based on average costs arrived at by including the m aterial costs of integrated companies on an integrated basis, in
stead of being based on th e spread be
tween the ceiling prices of materials and finished products, upon w hich th e semi
integrated and nonintegrated companies must depend; also, that OPA failed to increase ceiling prices of certain finished products in relation to th e price increases granted on semifinished products as a result of w hich many nonintegrated com
panies have suffered tire effect of a price decrease instead of obtaining a price in
crease.
Concluding, the resolution is reported to hold th at th e increases leave the in
dustry in an untenable financial posi
tion to face th e reconversion period, since 70 p er cent of production will be selling at a loss, and the loss products wiH con
stitute the bulk of production for th e civilian market.
T he second resolution is understood to concern the threat of OPA to effect com
pensatory price decreases should a study
of the price structure indicate such ac
tion can be taken. Ordering of such com
pensatory decreases, the steel men arc reported to feel, would be unwarranted, unfair, inequitable and contrary to law.
The committee’s resolution, it is said, points out that steel industry earnings, as a whole, are unsatisfactory, that the prices of those steel products not cov
ered by tire recent price advances are not unfairly or inequitably high, but rather are in many instances unreasonably low, and that a reduction of prices which have not risen to prevent an increase in overall industry profits resulting from required price increases on odier prod
ucts, is profit control and not price control.
OPA has repeatedly stated to Congress its objective was control of prices, not control of profits.
The resolution is said to include a statem ent to the effect the m atter is not a question of reducing prices which have risen unduly or of preventing increases in prices which have threatened to rise, and, accordingly, there is no authority for j OPA to lower existing prices which, in th e case of the steel industry, have not risen from the depression levels of 1938.
Pointing out th at the price control act was designed to prevent unwarranted product price increases and not to con
trol average industry earnings, that even die industry earnings standard as pro
m ulgated by OPA is designed to put a floor under total earnings and not to re
quire th a t total earnings be held do"71 to any particular level, the resolution reported to state th a t if OPA were to superimpose a new compensatory price decrease formula, it would be granting
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