E D IT O R IA L S T A F F
E. L . SlIANER
Editor-in-Chiej
E. C. K r e u t z b e r g
Editor
A . J. H ain
Managing Editor
E. F. Ross
Engineering Editor
G u y H u b b ard
Machinę Tool Editor
D . S. C a d o t
Art Editor A S S O C IA T E E D I T O R S
G. H . Ma n lo ve J. d. Knox
W. G. Gude G . W . Bir d sa ll
W. J. C a m p b e ll
New Yorf;
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V in c e n t D e lp o r t A S S IS T A N T E D I T O R S
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w o 1 Qr e a s u r e r : G . O . H a y s . V i c e p r e s i d e n t . F . G . S t e i n k b a c h , S e c r e t a r y .c U U R d ' R m w J ł * „ B u r e f t u T o f C l r c u l a t ł o n s : A s s o -
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V o lu m e 106— N o . 22 M a y 27, 1940
» t ’ r f p v r t ^ . f e c o n i ! c l a s s m a l t e r a t t h e p o s t o m c e
CoTOr|2l t t i ii n 1' S e r }£c £ o t o t M a r c l 1 3 - 1 8 7 9 -
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R E A D E R S C O M M E N T S ...
A S T H E E D IT O R V IE W S T H E N E W S N E W S
Steel Institute Moves T o A id Defense Program ... 21 F . D., a Laggard in Defense, W hile Provoking Bad Foreign Relations 23
C razy Quilt of: Steel Mili Extras” Discussed at Warehouse M eeting G ear Makers Pledge Support to Governm ent’s A rm am ent Plan Steelworks Operations for W eek ...
A riation ...
W ar Reąuirements Increasingly Divert Canada’s Steel Output 38
Metal Trades G roup Stresses N eed for Operator T rain in g Program s. . . 39 Analysis of Tron and Steel Products for First Quarter
Men of Industry. . . . .
Obituaries ...
Analysis of 1939 Steel Produetion W IN D O W S O F W A S H IN G T O N
M IR R O R S O F M O T O R D O M ...
E D IT O R IA L — M anufacturers A re P u z z le d ...
T H E B U S IN E S S T R E N D ...
T E C H N IC A L
Steel Switchgear ...
Autom atic Bender Prcduces Rifle Part at Rate of 2000 Per D ay 56 M a c h in in g
D ie M aking in the Modern M an n er... 50 Machining Hard Alloy Steels... 74 Progress in S te e lm a k in g
Steel Powder for Iron ...
Tailored Firebrick Perm it Exact Circumferential D im ensions... 58 Between Heats with S h o rty... 62 L ow er Shell of J & L E liza Stack Replaced with Little T ro u b le ... 63 H e a t T rea tin g
F iring System H as W ide Tem perature R a n g ę ... 64 M aterials H a n d lin g
Dust-Tight Conveyors H elp Keep Boiler R oom .Spotless...
o :... 1 t j ... 11:__ r?_ .. n . iw i t?i- ■.» i i i
4 '9
2 5
27 29 33
40 4*
43 44 3°
35 46 47
Sim ple H an d lin g Facilities in Press W ork E lim inate H azards.
J o im n g a n d W e ld in g Electric W elded Chain
66
70 IN D U S T R IA L E Q U IP M E N T ...
H E L P F U L L I T E R A T U R E ... 81 M A R K E T R E P O R T S A N D P R I C E S ... 83 B E H IN D T H E S C E N E S ... I02 C O N S T R U C T IO N A N D E N T E R P R I S E ... 104 IN D E X T O A D V E R T I S E R S ... II 2
P R O D U C T I O N • P R O C E S S I N G • D I S T R I B U T I O N • U S E
May 27, 1940
MA5 Ł iWEU)ERco.
WARREN.OHIO U S A
"Ł s s r
P L A T E N S IN W E L D E R S S L I D E ON
B A N T A M B E A R I N G S
I n th is u n it, specially designed b y T h e F e d e ra l M ach in ę a n d W e ld e r C o m p a n y fo r fla s h w elding o f non-ferrous alloys, t h e e n tir e m e c h a n is m t h a t
clam ps th e w ork m oves forw ard 200 tim es an h o u r. M ass of m etal is h eavy, an d m ovem ent m u s t be a s fre e fro m f r ic tio n as p o ssib le . B a n ta m engineers designed special reciprocat- ing ball bearings for th is u n u su al a p p licatio n — a n d F e d e ra l rep o rts ideał results.
T y p ica l of B a n ta m ’s a b ility to m eet out-of- th e - o r d in a r y re ą u ire m e n ts , re c ip ro c a tin g b a ll b earings h av e m an y uses in applications where ro ta tio n m u st be com bined w ith reciprocation.
A nd th e y are only one o f th e m an y ty p es of c u sto m -b u ilt bearings w hich experienced B a n ta m engineers are read y to design to fit yo u r special needs. F o r successful solution o f y o u r to u g h est b earin g problem s, T U R N T O B A N T A M .
Ba n t a m Be a r i n g s Co r p o r a t i o n • So u t h Be n d, In d.a n a
(Left) BANTAM'S QUILL BEAR
ING is a d m ir a b ly a d a p tcd for h a n d li n g h e a v y lo a d s in a H m it e ć s p a c e . I t is e a s ily m o u n t e d , lo w in c o s t . For fu r th er in fo r m a tio n w rite for B u lle tin H -1 0 4 . F o r N eed le B e a r in g s t o b e u se d in lighter s e r v ic e , w r it e o u r a f filia te , T h e T o r r i n g t o n C o m p a n y , T o r r in g to n , C o n n ., and ask for C ircular 2 1 -H .
(Right) L A D D E R T Y P E BEA R IN G S, also u s e d o n F e d e r a l W eld ers, are sp e c ia lly d e sig n e d b y B a n ta m for a p p lic a tio n s w h ere fr ic tio n m u s t b e h eld t o a m in im u m in ser- v ic e in v o lv in g recip - [ r o c a tin g m o tio n . L
BANTAM’ S ENGIN EERIN G COUNSEL is u n b ia sed and a u th on ta- t iv e . B a n ta m m a k e s all ty p e s o f a n ti-fr ic tio n b e a r in g s - s t r a ig h t roller, ta p e r e d roller, n e e d le , a n d b a ll. B a n ta m en g in eers rec- o m m e n d th e t y p e t h a t b e st m e e ts y o u r r e ą u irem en ts.
" B a n t a m R I N G S
S T R A I G H T R O L L E R
•T A P E R E D R O L L E R
•N E E D L E
•B A L L
S TEEL
/ T E E L
P R O D U C T I O N • P R O C E S S I N G • D I S T R I B U T I O N • U S E
A s t h e E d i l o r „ j V i e w s
V I
■ E U R O P E ’S war continues to influence business here in various respects. Steel ingot output (p. 29) last week jumped 5 points to 75 per cent, stimulated both directly and indirectly by developments abroad.
First official move by the steel industry to co-operate in the government’s defense program was taken by the American Iron and Steel institute last week (p.
21) when it elected W alter S. Tower, recently execu- tive secretary, as full-time president in anticipation of extra duties that will be faced by the institute and member company heads. . . . Need for training m a
chine operators to meet defense demands was stressed (p. 39) at the annual convention of the N ational Metal Trades association.
Further upturn in steelmaking is im m inent (p. 83) as both export and domestic demand continues to increase. The latter is being stimulated by prospects for delayed m ili deliveries this sum
mer. Foreign purchases last week included 70,000 tons of shell steel for England and France. Pig iron buying has inereased sharply here, while scrap prices have advanced to the highest level sińce last December. Industrial and residential work is outstanding in building contruction gains. O ut
look for a revival in railroad eąuipment building is more favorable. . . . Building of 50,000 airplanes (p.
33) would reąuire only about 180,000 tons of steel.
S t e e l T r e n d Is U p w a r d
meeting (p. 25) of the American Steel Warehouse association. . . . Much loose thinking is current (p.
35) regarding influence of defense spending. . . .Sev- enty-fifth anniversary of rolling of the first steel raił in the United States (p. 38) will be celebrated June 10 at Chicago.
W ith war restricting supply of Swedish iron powder, research discovers source of steel powder (p. 54) possessing superior properties. . . . A utom atic bend
ing, followed by electrical resist-
S t e e l P o w d e r
ance stress relieving, of a tubular part (p. 56) is speeding productionD e v e lo p e d
of an army rifle. . . . Changing conditions as regards production of dies, tools, jigs and fixtures has brought independent specialists in this work into prominence (p. 50). . . . Electric welded, forged hoist chain (p. 70) is assured high strength by close control of fabrieating operations, heat treatment and prestretching. . . . A bility to machine alloy steels of exceptional hardness (p. 74) is m aking it profitable to use these steels for high- strength, light-weight applications.
Development of a new series of firebrick shapes (p.
58) makes it possible to lay up arches, domes and various circular structures with exactness heretofore unattainable. . . . Lower shell of a Pittsburgh blast furnace under- goes replacement (p. 63) without disturbing its upper structure. . . . New method of firing (p. 64) per
mits gas convection-type heat treating furnaces to operate through a temperature rangę of 600 to 2000 degrees Fahr., increasing fiexibility. . . . Economies and safety which can be achieved through mechanical handling facilities for power presses are welLillus- trated by a recent installation (p. 66) which doubles production. . . . Possessing definite advantages, steel is used more widely for electrical switchgear (p. 52).
R e f r a c t o r y S h a p e s N e w
The adm inistration has failed to provide proper national defense despite huge expenditures, the Am er
ican Iron and Steel institute (p. 23) was told last week by E. T. Weir, retiring presi
dent. A lthough pointing out the need for defense measures, Mr.
W eir voiced opposition to entangle- ment in the European war. . . . Steel distributors view various m ili extras as a crazy ąuilt,” it was declared at last week’s annual
H its U . S . D e f e n s e s
M ay 27, 1940
An Opportunity for Fabricators to I n c r e a s e Sales!
M anufacturers of m achinę tools long ago adopted the sound selling practice of proving to th eir custom ers that m achinę lools of new designs m ake b e tte r p ro d ucts at lower costs. T h e rew ard for these alert and u n tirin g sales efforts has been a vastly greater volm ne of m achinę tool orders.
F abricators of stru ctu ra l steel can take th at page from th e m achinę tool in d u stry ’s "suecess book. ’ Never before have fabricators had so m any good argum ents, including low in terest rates, w ith w hich to get new business. T housands of m anufacturing plants are doing business in buildings which are a handicap to efficient m anufacturing. T oday the in d u strial architect, con
tracto r and fabricator do far m ore th an sim ply build.
T hey can m ake stru ctu res th a t are really "tools” for m anufacturing, ive the m anufacturer
a yaluable advantage in low ered costs and h ig h er profits.
Y et, thousands of m an ufactu rers arc not fully aware of these facts. M any are struggling along in outm oded stru ctu res th at are a definite business handicap. F abri
cators who will step out and sell stru ctures in which better products can be m ade at low er cost m i l open a new realni of o pportunity. In lan d engineers are espe- cially equ ipped by many years of practical experience to give fabricators v aluab le engineering assislance. It is free for the asking.
I N L A N D S T E E L C O .
3 8 S . D e a r b o r n S t r e e t , C h i c a g o
S a le s O ff ic e s : M ilw a u k e e , D e tr o it , S t. P a u l, S t. L ouis, K a n s a s C ity , C in c in n a ti
SH E ET S • ST R IP • TIN PLATE • B A R S • PLATES • FLOOR PLATES STRU CTU RALS • PILING » RA ILS • TRACK A C C ESSO R IES
REINFORCING B A R S
S t e e l I n s t i t u t e M « v e s T o A i d D efense P r o g r a m
I n d u s t r y g e a r s i t s e l f t o h a n d l e r e ą u i r e m e n t s o f p r o g r a m a n d o j f e r g o v e r n m e n t f u l i c o - o p e r a t i o n . E l e c t f u l i - t i m e p r e s i d e n t i n a n t i c i p a t i o n o f e x t r a d e m a n d s o n c h i e f e x e c u t i v e ’s t i m e . S p o k e s m e n a t f o r t y - n i n t h g e n e r a ł m e e t i n g r e i t e r d t e o p p o s i t i o n t o U n i t e d S t a t e s’ e n t a n g l e m e n t i n f o r e i g n t c a r s
■ P R O B L E M S th a t w ill c o n fro n t in d u stry as r e j u l t o f th e w a r in E u ro p ę a n d o u r d o m e stic d efe n se p ro g ra m held th e s p o tlig h t a t th e fo rty -n in th g e n e ra ł m e e tin g of th e A m erican Iro n a n d S tee l in s titu te at th e W a ld o rf-A sto ria h otel, N ew York, M ay 23. A b o u t 1000 a tte n d e d .
T he in s titu te its e lf m oved to g e a r the in d u s try f o r fu li co -operation with th e d e fe n se p r o g ra m b y elect- ing W a lte r S. T o w er, ex e c u tiv e sec
re ta ry siń c e 1933, a s p re sid e n t, ch ief executive o fficer a n d a d ire c to r. Mr.
T ow er su c ce ed s E. T. W eir, c h a ir m an, N a tio n a l S te e l Corp., P itts burgh, w ho h a s se rv e d as p re sid e n t for th e p a s t y ea r.
In n a m in g M r. T o w er, th e direc- to rs ad o p ted a policy of e le c tin g a paid p re sid e n t. D u rin g th e p a s t seven y e a rs e x e c u tiv e s o f m e m b e r com panies h a v e se rv e d a s h ea d s of the in s titu te . In th a t p eriod, p re s i
dents in ad d itio n to M r. W e ir h av e been E. G. G race, p re sid e n t, B e th lehem S teel Co., B e th le h em , P a., an d T. M. G ird ler, c h a irm a n , R e p u b lic Steel Corp., C leyeland.
The election of a p aid p r e s id e n t of th e in s titu te , w ho w ill dev o te all his tim e to its a ffa irs, is r e g a rd e d as th e f irs t official m o v e b y th e in d u stry in g e a rin g its e lf to be in a position to eo -o p erate in th e f u lle s t m e asu re in th e g o v e rn m e n t’s h u g e n ational d efe n se p ro g ra m .
The d ev e lo p m e n t o f th a t p r o g ra m is expected to p la ce h e a v y d em a n d s upon th e tim e o f th e ch ief e x e cu tiv e of th e in s titu te in d e a lin g w ith p ro b lems of th e in d u s tr y a n d o f rela- tionships w ith o th e r in d u s trie s a n d with th e g o v e rn m e n t. M o reo v e r th e tim e and e n e rg y o f each ex e cu tiv e of th e m e m b e r c o m p an ie s w ill be
fu lly occupied in th e ir re sp e c tiv e p ro d u c tio n p ro b lem s. F o r t h a t rea- so n n o n e of th e m w ould be a b le to find th e tim e to g u id e th e in d u s try a s p re s id e n t o f th e in s titu te .
M r. T o w e r h a s been a s so c ia te d w ith th e ste e l in d u s try siń c e 1919 e x c ep t f o r th r e e y e a r s a f t e r th e w a r w h en h e w as co m m e rc ia l a tta c h e fo r th e U nited S ta te s d e p a rtm e n t of co m m erce a t th e A m e ric a n e m b a ssy in L ondon.
H is firs t a s so c ia tio n w ith th e ste el in d u s try w a s w ith th e C o n so lid ated S te e l C orp.; la te r h s w as a s s o c iate d w ith th e B e th le h e m S te e l Co.
A fu n d a m e n ta l c h a n g e in th e ad- m in is tr a tio n ’s a ttitu d e to w a rd in d u s try is th e firs t e s s e n tia l in th e c o u n try ’s h u g e d e fe n se p r o g ra m , d ec la re d M r. W e ir in h is presid en - tia l a d d re s s ( F o r a b s tr a c t se e p.
23).
H ołd L a b o r F o ru m
A n in n o v a tio n a t th e m e e tin g w as a n in d u s tria l re la tio n s se ssio n held u n d e r th e c h a irm a n s h ip o f G eorga T. F o n d a , a s s is ta n t to th e p re sid e n t, W e irto n S tee l Co., W e irto n , W . Va.
T h is co m p rised a p a n e l d isc u ssio n o f ą u e s tio n s on la b o r a n d in d u s tria l re la tio n s.
M e m b ers o f th e p an e l in c lu d ed : E. F . B lank, J o n e s & L a u g h lin S teel Corp., P itts b u r g h ; R. C. C ooper, W h e e lin g S tee l C orp., W h e elin g , W . V a.; L. S. H a rd in g , C ru cib le S teel Co. o f A m eric a, N ew Y o rk ; J. M.
L a rk in , B e th le h em S tee l Co., B e th le hem , P a .; J. E. L a u g h lin J r., T h o rp , B ostw ick, R eed & A rm s tro n g , P itts b u r g h ; C. A. M cL ain, C ra v a th , de G ersd o rff, S w a in e & W ood, N ew Y ork; C. H . M u rra y , A m e ric a n R oll
in g Mili Co., M iddletow n, O.; T. F.
P a tto n , R e p u b lic S te e l C orp., Cleve- la n d ; J. A. S te p h e n s, U n ite d S ta te s S te e l C orp., N ew Y o rk ; J. A. V oss, R e p u b lic S tee l C orp., C leyeland.
T h e in d u s tria l r e la tio n s fo ru m w as a n off-the-record sessio n .
E d w a rd L. R y e rs o n J r., c h a irm a n , I n la n d S te e l Co., C hicago, u rg e d a m o re in te llig e n t c o m p e titiv e sa le s policy. S p e a k in g a s a f o rm e r buy- e r o f ste e l a n d a s a p r e s e n t p ro d u c e r, M r. R y e rs o n d ec la re d th e re n e v e r h a s b ee n a n y d o u b t a b o u t th e a c tiye c o m p e titiv e n a tu r ę o f ste e l s e ll
in g policies b u t th a t h e h a d n o t fo u n d th e c o m p e titio n a s in te llig e n t a s it w a s keen.
A f a ir p ric e ba=cd u p o n a reaso n - ab le p ro fit m u s t be th e k e y n o te of s te e l sa le s, sa id M r. R y e rso n .
“In re c e n t tim e s w e se e m to h a v e deyeloped a r e ta il s to r ę sa le s policy o f o ffe rin g g r e a t s p r in g a n d fali b a rg a in sa le s to s tim u la te tra d e , in s p ite o f th e fa c t th a t a s f a r a s I c a n le a rn w e h a v e n e v e r m a in ta in e d a h a b it in th e s te e l in d u s try of b u ild in g u p la rg e m ili in y e n to rie s o f fin ish ed goods th a t cali f o r ą u ic k o r d is tre s s lią u id a tio n .”
M r. R y e rs o n added th a t “if we p e r s is t in th e s e so-called ‘b a rg a in s a le s ’ o f o u r p ro d u c ts it se e m s to m e th a t b efo re lo n g w e w ill h av e
‘b a r g a in s a le s ’ o f o u r p la n ts .”
S p e a k in g fro m h is e x p e rie n c e a s b o th a b u y e r a n d p ro d u c e r of steel, h e s to u tly d efe n d ed th e b a s in g p o in t s y s te m of p ric in g a n d sa id th a t th e in d u s try w a s in d e b te d to U nited S ta te s S tee l C orp. o fficials “f o r th e ir c o m p re h e n siy e p r e s e n ta tio n of th is d ifficu lt ą u e s tio n a t th e te m p o r a r y n a tio n a l ec o n o m ic c o m m itte e h e a r in g s.”
M r. R y e rs o n also w a rn e d th e ste e l May 27, 1940
in d u s try th a t it w as tim e fo r th e in d u s try to publicize j u s t w h a t "ex- t r a s ” m ean .
“T h e p u b lic g e n e ra lly a n d even m a n y o f o u r frie n d ly c u s to m e rs h a v e th e o p in io n t h a t e x tra s a r e
‘g ra v y ,’ added to th e b a s e p ric e fo r no r e a s o n w h a ts o e v e r b u t f o r in e re a se d p ro fit a n d th a t th is is a clev e r m e th o d th e s te e l in d u s try u se s to hide its r e a l p ric e .”
" I t is tim e ,” M r. R y e rs o n d eclared ,
“w e pu b licize th e f a c t w id ely th a t th is in d u s try m a k e s th o u s a n d s o f p ro d u c ts an d th a t o n ly th ro u g h a s y s te m o f b a s e p ric e s a n d e x tra s c a n w e av o id h a v in g th o u s a n d s of p rice s. W e m u s t so m e h o w o r o th e r conv in ce ev e ry o n e w ho ta lk s a b o u t th e s te e l in d u s tr y th a t th e e x tr a s ad d e d to o u r p ric e s a r e a d d ed so le ly b e c a u s e th e y p ro p e rly re- flect ad d e d c o sts th a t a r e involved in th e m a n u f a c tu r e o f th e ty p e of m e rc h a n d is e to w h ich th e e x tra s ap p ly . I f w e c a n n o t conv in ce th e m o f th is fa c t w e h a d b e tte r develop a n e n tir e ly new m e th o d o f p ric in g
s te e l p ro d u c ts .”
C o m m e n tin g on th e financial p ro b le m s o f th e ste e l in d u s try , F r a n k P u rn e ll, p re sid e n t, Y o u n g s
to w n S h e e t & T u b e Co., Y o u n g s
tow n, O., ad v ised th e s te e l m a k e o to c o n s id e r to ta l co st in ste a d of de- v o tin g so m u c h a tte n tio n to so-called m a n u f a c tu r in g costs.
E arnings H ave Dw indled
“ U nless a ll n e c e s sa ry ite m s of o u tg o su c h a s se llin g , a d m in istra - tiv e a n d g e n e ra ł ex p en ses, deprecia- tion, r e tu r n o n fixed in te r e s t b e a r in g o b lig a tio n s, ta x e s, a n d th e like, a r e k e p t in m in d a n d included in a ll c o it a c c o u n tin g th e re c a n n o t be a n y v e ry in te llig e n t a p p ro a c h to a s o u n d fin an c ial policy f o r a n y m em - b e r of th e in d u s try .”
Commenting on the poor rates of steel earnings in recent years, Mr.
Purnell said:
“W e m u s t a d m it th a t fo r 30 y e a rs th e r e t u r n on in v e ste d c a p ita l in th is in d u s tr y h a s b e e n ste a d ily de- clin in g . In th e decade, 1910 th ro u g h 1919, th e a v e ra g e a n n u a l r e tu r n on its i’n v e s te d c a p ita l w a s 8 p e r cent.
I n th e n e x t decade, 1920 th r o u g h 1929, it w a s 5 1/; p e r cen t. In th e d ec ad e c lo sin g w ith 1939, th e aver- a g e a n n u a l r e tu r n on c a p ita l in- v e s te d in th e ste e l in d u s try w-as 1.8 p e r cent.
“T h e r e a r e m o re th a n 500,000 s h a re h o ld e r s in th e v a rio u s ste e l co m p an ie s. In 1929 th e y rec eiv e d
$202,193,000 in dividends. By 1933 th e ir d iv id en d s h a d d w in d led to $14,- 500,000, a declin e o f 93 p e r cent. In 1939 d iv id en d s in e re a se d to approxi- m iitely $70,000,000 b u t even t h a t to ta l is a s m a li r e tu r n on th e a m o u n t in v e ste d .
“N ew m o n e y , u n le ss e a rn e d in th e b u sin e ss, h a s to com e in one of tw o
f o rm s —th r o u g h th e s a le o f s h a re s o r th r o u g h th e sa le of bonds. I f one considei's a n iss u e of p r e f e rre d sto c k a s c re a tin g a fixed o b lig a tio n in th e fo rm o f dividends, th e r e is little d if
fe re n c e in th e fin an c ial p ro b le m p r e s e n te d b y th e sa le o f p r e f e rre d sto c k a n d th a t p re s e n te d by th e sa le of a bond issue.
“T h e e ą u ity r is k in th e ste e l in d u s try h a s been u n d u ly h ig h b ec au se o f in a d e ą u a te e a rn in g s a n d f o r t h a t re a so n th e a v e ra g e ste e l c o m p an y w o u ld find it d ifficu lt u n d e r p re s e n t co n d itio n s to d isp o se o f a n is s u e of e ą u ity sh a re s.
“In th e fo u r y e a rs, 1927 th r o u g h 1930, n ew ste e l co m p a n y co m m o n s to c k issu es a p p ro x im a te d $475,000,- 000. I n th e n in e y e a r s th a t follow ed th e to ta l of su c h iss u e s ap p ro x i- m a te d only $18,000,000 a n d included s e v e ra l s c a tte r e d o ffe rin g s of rela- tiv e ly sm a li a m o u n ts each. E ą u ity s h a re s , th e re fo re , h a v e b ee n sup- p la n te d in fin an c in g n ew co n stru c -
J a m e s E . J . . O S C
M r. Lose, vice p re sid e n t, C arnegie- Illin o is S tee l Corp., w a s a w a rd e d th e in s titu te ’s m e d al fo r 1939 in recogni- tio n o f h is p ap e r, " P ro b le m s in th e M a n u fa c tu re an d U se o f S te e l in th e J n ite d S ta te s," d eliv ered a t th e 193y session.
M r. L ose b e g a n h is b u sin e ss c a re e r in 1910 w ith C a rn e g ie S te e l Co., an d h a s been a s so c ia te d c o n tin u o u sly w ith th a t co m p a n y a n d its suc- cesso r, C a rn e g ie -Illin o is S tee l C orp.
H e s ta r t e d a t C a rrie F u rn a c e s , R an- kin , P a., th e b la s t fu rn a c e d e p a r t
m e n t o f H o m e s te a d S tee l W o rk s, a s a tr a c e r in th e d ra w in g ro o m a n d p ro g re s s e d to s u p e rin te n d e n t of b la s t fu rn a c e s.
H e b e c a m e g e n e ra ł s u p e rin te n d e n t o f H o m e s te a d w o rk s in 1930;
th r e e y e a r s la te r he w as m a d e vice p re s id e n t in c h a rg e o f o p e ra tio n s, C a rn e g ie S te e l Co., an d re ta in e d th a t title w ith C arn e g ie -Illin o is w h en th e la t t e r w a s o rg a n iz e d in 1935.
tion b y o v e rh e a d d eb t w ith its b u r den o f fixed c h a rg e s.
“In o r d e r to a t t r a c t v e n tu re s o m e c a p ita l, th e r e m u s t b e a d efin ite im- p ro v e m e n t in e a rn in g s fo r th e in d u s try . W e a ll k n o w t h a t d u rin g th e p a s t d ec ad e re d u c e d vo lu m es, in e re a se d c o sts a n d in a d e ą u a te p ric e s h a v e h a m p e re d o u r in d u s try a n d o th e r in d u s trie s in effo rts to m a k e re a s o n a b le e a rn in g s . T h e cost f a c to r in p ro d u c tio n h a s b ee n grow - in g s te a d ily m o re se rio u s . C o st rig- idities, su c h a s ta x e s, f r e ig h t r a te s a n d w ag e s, h a v e becom e m o re pro- n o u n ced . T h e c o n tin u o u s ly in c re a s in g a g g r e g a te o f th e s e fixed b u rd e n s a n d th e ir effects on p ro fit m a rg in s h a v e le sse n e d th e a ttr a e tiv e n e s s of e ą u ity r is k s in th e in d u s try .
" A n o th e r in c re a s in g ly im p o rta n t f a c to r in th e fin an c ial p ro b le m s of in d u s try is ta x e s . T h e tre m e n d o u s g o v e rn m e n t sp e n d in g o f re c e n t y e a rs h a v e m a d e it n e c e s s a ry to find n e w so u rc e s of ta x re v e n u e , and th e end is n o t y et. S u ch sp e n d in g u ltim a te ly m u s t b e p aid f o r o u t of e a rn in g s of th e p eople a n d o u r tax b u rd e n w ill b e m u c h w o rs e b e fo re it b eco m es lig h te r. G o v e rn m e n t sp e n d in g a t b e s t is illu siv e ; it does n o t cre- a te n ew e n te rp ris e s o r n ew p ro d u c ts a n d th e e m p lo y m e n t r e s u ltin g fro m it is e n tire ly te m p o ra r y . I t know s no su c h th in g a s tu r n o v e r a n d re- duces its e lf to th e dole o r c o n s tru c tio n in a s h o r t c o n c e n tra te d period o f tim e of v a rio u s p u b lic w orks, w h ich sh o u ld be b u ilt o v er a long period.
T a x e s E xceed E a r n in g s
"A s sh o w n b y a c o m p ila tio n of th e in s titu te , co v e rin g 89 ste e l com p an ie s, th e ir to ta l ta x bill la s t y e a r w a s $141,123,000 a n d th e ir n e t e a rn in g s w e re $140,394,000. O f th a t tax bill, $89,000,000, o r m o re th a n 60 per cent, w ei'e s t a t e a n d local ta x e s, rep- r e s e n tin g a b u rd e n u p o n th e com p a n ie s w h ich is fixed re g a rd le s s of r a te s o f o p e ra tio n o r o f e a rn in g s.
“T h e m a tte r of r a te o f tu rn o v e r o f c a p ita l in th e in d u s try , a s com p a re d w ith o th e r in d u s trie s , also has a b e a rin g u p o n th e ą u e s tio n o f costs, p ric e s a n d p ro fits. T h e a v e ra g e c a p ita l tu r n o v e r in th e ste e l in d u s
t r y is a b o u t once in 24 m o n th s , as c o m p a re d w ith once in 12 m o n th s fo r c e rta in o th e r m a jo r in d u strie s.
T h e m a rg in o f p ro fit, in te rm s of g ro s s sa le s, n a tu r a lly sh o u ld b e sub- s ta n tia lly m o re , w h e re th e r a te of tu r n o v e r is le ss f re ą u e n t. A profit m a rg in on g ro ss sa le s a d e ą u a te fo r a b u sin e ss tu r n in g its c a p ita l once a y e a r, m a y be in a d e ą u a te to enable th e s te e l in d u s try , w ith its slow er tu rn o v e r , to m a k e a p ro fit.
“T h e f a ilu re of th e ste e l in d u stry to rec o g n iz e th a t b a sie fa c t a n d the n e e e s sity f o r a b e t te r p e rc e n ta g e of p ro fit m a rg in , in te rm s of gross
(P le a se tu r n to P a g e 28)
22 / T E E L
F.D., a Laggard in U efen se, W h ile Provoking Bad Foreign R elations
By E. T. WEIR
■ F O R th e seco n d tim e in th e his- to ry o f th e I n s titu t e w e h o łd o u r m e etin g w h ile th e w o rld is a t w ar. . . . To find a n y th in g ap- p ro ac h in g a p a ra lle l e x p e rie n c e w e m u s t go b ac k to th e o p e n in g s ta g e s of th e la s t W o rld w a r w h e n th e G erm a n a r m ie s w e re m a k in g th e ir h ead lo n g a d v a n c e to th e M a rn e .
So fa r, th a n k God, th e A m e ric a n people a r e n o t d isposed to r e g a rd this w a r a s o u r w a r. I t is p la in th a t th e y a r e f a r fro m b eliev in g th a t A m e ric a n in te rv e n tio n ca n con- trib u te a n y th in g m o re of la s tin g v alu e n ow th a n it did in 1917. D e
sp ite overvvhelm ing pro-A lly sym - pathy, d e s p ite th e e m o tio n a l im p a c t of ev e n ts in P o la n d , F in la n d an d N orw ay, a n d ev en th e in v a sio n of H olland a n d B elg iu m , th e re is no indication th a t o u r p u b lic w ould san ctio n o u r p a rtie ip a tio n . T h is com m onsense a ttitu d e o f r a n k an d file A m e ric a is o u r s u r e s t g u a r a n ty a g a in s t in v o lv e m e n t.
L a s t S e p te m b e r, I w a s a m o n g those w ho sp o k e o u t a g a in s t th is c o u n try ’s d o in g a n y th in g th a t held the fa in te s t p o ssib ility o f e n tan g le - m ent ln E u ro p e ’s w a r. I a m still ju s t a s firm ly convinced t h a t th e U nited S ta te s h a s no p lace in th a t w ar. O nly o n e re a s o n ca n ju s tif y w ar f o r A m e ric a —je o p a rd y to th e in te g rity a n d in d e p en d e n ce o f th e United S ta te s o r in v a sio n of th is hem isphere.
O nly O ne I n te r e s t I s P a r a m o u n t I t is n ow of e x tre m e im p o rta n c e th a t w e, a n d a ll A m e ric a n s, recog- nize c le a rly th a t A m e ric a h a s one p a ra m o u n t in te r e s t to w h ich all o th ers a r e se c o n d a ry . T h a t is th e p re se rv a tio n o f th e A m e ric a n w ay of life h e re in A m eric a. . . .
P re s e rv a tio n o f th e A m e ric a n ideals o f life inv o lv es a d e q u a te p re p a ra tio n f o r effectiv e d efen se.
A b s t r a c t o f a d d r e s s d e l i v e r e d b y M r . W e i r a s p r e s i d e n t o f A m e r i c a n I r o n a n d S t e e l i n s t i t u t e a t i n s t i t u t e ’s a n n u a l m e e t i n g , N e w Y o r k , M a y 2 3 .
W h a te v e r th e o u te o m e o f th e p r e s e n t w a r , th e r u th le s s n e s s o f its in- s ti g a to r s h a s im p re sse d u p o n u s th e n e c e s s ity o f th o r o u g h p r e p a r a tio n f o r d efe n se. W ith o u r u n lim ite d re- so u rce s, in d u s tr ia l p o w er, a n d n a t u r a l a d v a n ta g e s , it is in e x c u sa b le t h a t w e a r e n o t b e t te r p r e p a r e d a t th is m o m e n t, if c o m p e te n t o b s e rv e rs m a y b e b eliev e d — a n d I, f o r one, th in k th e y m a y — th is n a tio n could be a n o th e r F in la n d o r N o rw a y w e re it n o t f o r th e b a r r ie r s o f o ce an a n d d ista n c e .
M onroe D óctrine W orks Both W ays W ith a ll th e w a r n in g w e h a v e had , w h y h a s th e p r e s e n t a d m in is tr a t io n fa ile d so g la rin g ly to d is
c h a rg e one o f th e m o s t v ita l func- tio n s o f f e d e ra l g o v e rn m e n t—th e p ro v isio n o f p ro p e r n a tio n a l de
fe n s e ? F o r se v e n y e a rs, th e a d m in is tra tio n h a s h a d a t h a n d e v e ry th in g n e c e s sa ry f o r th e b u ild in g o f re a l d efe n ses. B illions h a v e b ee n ap p ro - p rla te d fo r th is p u rp o se . W h a t h a s been d one w ith th e m ? W h y , a f te r s p e n d in g a ll th is m o n e y , do o u r mili- ta r y an d n a v a l e s ta b lis h m e n ts la ck m o d e rn w e a p o n s, e ą u ip rn e n t a n d m a te r ia ł? W h y h a v e o u r a rm e d fo rc e s n o t been tra in e d in m e th o d s of m o d e rn w a r f a r e ?
T h is d elin q u e n c y ca n n o t be at- tr ib u te d to ig n o ra n c e . F o r y e a rs, p e rs o n s w h o se co m p e te n c e is n o t o p en to q u e s tio n h a v e b ee n p o in tin g o u t th e w e a k n e ss o f o u r n a tio n a l d e fe n se co n d itio n a n d u r g in g cor- re c tiv e m e a s u re s . A s h o r t tim e ag o G e n e ra l H u g h J o h n s o n w ro te th a t in 1933 h e trie d to s e c u re a p ro g ra m th a t w o u ld p ro v id e n a tio n a l d e fe n se a n d a t th e s a m e tim e giv e em p lo y m e n t a n d rec o v ery . H is e ffo rt failed . B u t in th a t sa m e y e a r, H a r r y H o p k in s w a s g iv e n th e b u lk o f a th r e e billion, th r e e h u n d re d m illio n d o lla r a p p ro p ria tio n fo r—a s th e g e n e ra ł s a y s —r a k in g leav es. W ith in th e p a s t y e a r, m e n w ho k n e w fro m ex- p e rie n c e in th e p re y io u s w a r h ow p o o rly th e c o u n try w a s p re p a re d
f ro m b o th m ilita r y and, in d u s tr ia l s ta n d p o in ts , u rg e d t h a t th e a d m in is tra tio n ta k e im m e d ia te a n d effec- tiv e s te p s to b u ild a r e a l d e fe n se s y s te m . A g a in th e a d m in is tra tio n did n o th in g .
A nd d u r in g th e s e se v e n y e a rs , w h e n th e a d m in is tra tio n h a s b ee n d o in g n o th in g to in c re a s e o u r de
fe n s e fa c ilitie s, it h a s b ro n pro v o k - in g b ad fo re ig n r e la tio n s . I n 1937.
th e P re s id e n t in h is "C Jnarantirie"
sp e e c h in C h ica g o ev id en c ed hoś- tility to c e r ta in f o re ig n p o w e rs, aiićt h e h a s b ee n o u ts p o k e n in h is o p ili' io n s r e g a r d in g th e E u ro p e a n cóh- tro v e rs y .
H e se e m s to h a v e c o m p le te ly for- g o tte n th a t th e M o n ro e d o c trin e is a tw o -w a y p ro p o sitio n . I t n o t o n ly d e c la re s o u r o p p o sitio n to fo re ig n a g g r e s s io n in th is h e m is p h e re b u t p le d g es u s n o t to in te rm e d d le w ith E u ro p e a n a ffa irs . G r a n tin g th a t a p r iv a te Citizen m a y fre e ly e x p re sś' his o p in io n s on f o re ig n m a tte r s , it is a v e r y d a n g e ro u s th in g f o r th e' P re s id e n t o f th e U n ite d S ta te s to' in fla m e fo re ig n n a tio n s a g a in s t u s by d e c la ra tio n s a n d sp e e c h e s, a n d 1 th is in u t t e r d efia n ce o f th e in te n t o f c o n g re s s in p a s s in g n e u tr a lity le g isla tio n .
D om estic S p en d in g M isdirected T h e a d m in is tr a tio n a ls o is re- sp o n sib le f o r th e c o u n try ’s w ea k - en e d a b ility to m e e t a n e m e rg e n c y in o th e r w a y s th a n b y n e g le c t o f d ir e c t m il ita r y p r e p a re d n e s s . I t h a s p la c e d th e n a tio n in t h e w o r s t fiscal p o sitio n in its h is to ry . D e sp ite a w a re n e s s o f th e d a n g e ro u s I n te r n a tio n a l s itu a tio n , th e a d m in is t r a tio n c o n tin u e d its la v is h d o m e stic sp e n d in g . I t n e v e r sto p p e d p o u r
in g b illio n s d o w n r a t h o le s o f politi- c a l w a s te , so c ia l e x p e r im e n ta tio n a n d o u r so c a lle d g o v e r n m e n t plari- n in g .
N o w w e f a c e th e n e e d f o r h u g e n e w e x p e n d itu r e s w ith a n a lr e a d y b a c k -b re a k in g b u rd e n o f ta x a ti o n a n d a f e d e r a l d e b t t h a t h a s s h a tte r e d
May 27, 1940 23
th e fo rty -fiv e b illion d o lla r lim it.
L ik e w ise o u r in d u s tria l s y s te m m u s t tr y to a c c e p t th e m o n u m e n ta l job th a t w ill be im p o sed on it b y de
fe n se p r e p a ra tio n s u n d e r th e han- d ic a p s th a t h a v e been a n d a r e now im p o sed on it b y g o v e rn m e n ta l re- s tr ic tio n s a n d in te rfe re n c e . A nd p e r h a p s m o s t se rio u s, th is a d m in is tra tio n is d ire c tly to b la m e f o r a d is u n ity a m o n g th e A m e ric a n people su c h a s n e v e r e x lste d b efo re .
A nd th u s b e c a u se of a d m in is tra - tio n inefficiency, b lin d n e ss, d evotion to its p e t b r a n d s o f so c ial a n d po
litica l p h ilo so p h y , a n d disinclina- tio n to a c c e p t a n y ad v ice f ro m b u s i
n e s s o r in d u s try , th is c o u n try is faced w ith th e p ro b le m o f doing o n a h u r ry - u p b a s is a jo b th a t sh o u ld h a v e been in n o rm a l prog- r e s s f o r th e p a s t s e v e n y e a rs.
I s a y th is n o t in a n y se n se of cry- in g o v e r s p ilt m ilk . T h e im p o rta n t th in g is th e le sso n th is re c o rd holds fo r th e im m e d ia te f u tu r ę . T h a t le s
so n is th a t th e m e th o d s a n d p e r so n n e l o f th e p r e s e n t a d m in is tra tio n ca n n o t s e t th is n a tio n to w o rk a s o n e m a n on th e g ig a n tic ta s k of b u ild in g r e a l d efe n se s. I n th is g r e a t p r o g ra m , w h ic h w ill co st billions, th e p eo p le o f th is c o u n try h a v e th e r i g h t to d e m a n d th a t it b e c a rrie d o u t effectiv ely , eco n o m ic ally and ' p ro m p tly . T h e firs t e s s e n tia l ste p to w a rd p re p a re d n e s s m u s t b e a fu n d a m e n ta l c h a n g e in th e a ttitu d e of g o v e rn m e n t— an d p a r tic u la rly in its a ttitu d e to w a rd in d u s try .
I n d u s tr y is a n a r m o f n a tio n a l de
fe n se j u s t a s m u c h a s th e a rm y , n a v y o r a i r fo rce. I n fa c t, in d u s tria l p r e p a re d n e s s m u s t p rec ed e d ire c t m ilita ry p re p a re d n e s s . I n d u s tr y m u s t p ro v id e th e w ea p o n s, th e e ą u ip m e n t a n d m a te r ia ł of a ll k in d s n eces
s a r y to th e tr a in in g an d m a in te n a n c e o f th e a rm e d fo rc es. In a d d ition, o f c o u rse , in d u s try m u s t be p r e p a re d to s u p p ly th e n o rm a l r e ą u ire m e n ts o f th e c o u n try .
I n d u s tr y N ow B asic D efe n se L a rg e -sc a le d e fe n se p re p a ra tio n w ill r e ą u ir e a n in fin ite a m o u n t of p la n n in g a n d r e a d ju s tm e n t th ro u g h - o u t th e in d u s tria l s y s te m . T h e sta g - g e r in g siz e of th e jo b h a s evoked fo re c a s ts t h a t it w ill be tw o y e a rs b e fo re in d u s tr y ca n fu n c tio n effec- tiv e ly . I t c a n b e sa id co nfidently th a t th e s e f o re c a s ts a r e e n tire ly too p e s sim is tic . I f g o v e rn m e n t w ill de- cide on a d efin ite d e fe n se policy; if it w ill le t in d u s try k n o w e x a c tly w h a t is w a n te d ; a n d th e n e n t r u s t to m e n w ho k n o w in d u s try th e ta s k of g e ttin g p e rfo rm a n c e f ro m in d u s try , th e c o u n try w ill be p le a s a n tly su r- p rise d a t th e sp e ed a n d efficiency w ith w h ich in d u s try w ill do its s h a re o f th e job.
A t th e p r e s e n t sta g e , in d u s try is o u r b a s ie lin e o f d efen se, a n d th e re m u s t be a m in im u m o f re d ta p e a n d
d elay in p e r m ittin g in d u s try to g e a r its e lf up to m e e t d e fe n se n ec essitie s.
T h e ste e l in d u s try , of co u rse , w ill be of m a jo r im p o rta n c e in a n y p ro g r a m to p re p a re th e c o u n try f o r de
fen se . N o t o n ly is it a d ire c t so u rce of m ilita ry a n d n a v a l re ą u ire m e n ts , b u t it also is fo u n d a tio n a l to all o th e r in d u s try . T o m e e t th e s e de- m a n d s, I a m h a p p y to sa y th a t o u r in d u s try is a t th e h ig h e s t s ta te of te ch n o lo g ica l d ev e lo p m e n t in its h is to ry . I sh a ll d isc u ss th is in g r e a te r d etail a little la te r. B u t first, a g a in s t th e b a c k g ro u n d of th e w a r an d o u r ow n d e fe n se need s, le t us co n sid er so m e o f th e im m e d ia te p ro b lem s faced by th e ste e l in d u s try .
S om e w a r-c re a te d p ro b le m s now on o u r d o o rste p s hołd p o te n tia ls of e x tre m e d a n g e r. O ne is th e m a in te n a n c e of a d e ą u a te ra w m a te r ia ł su p p lies. S even o f th e 12 p rin c ip a l n o n fe rro u s m a te r ia ls u se d by th e ste e l in d u s try com e la rg e ly o r e n tire ly fro m fo re ig n so u rce s. T he m o st im p o r ta n t a r e m a n g a n e s e and tin a n d th e la t t e r m e ta l com es a l
m o st e n tire ly fro m D u tc h an d B rit
ish te rrito r ie s . N ee d less to sa y , all ste e l c o m p an ie s a r e a w a re o f th e s itu a tio n a n d h a v e been d o in g w h a t th e y can to p ro te c t th e m se lv e s a g a in s t s h o rta g e s o f th e s e v ita l m a te ria ls .
L im it S c ra p E x p o rt
B ut, u n f o rtu n a te ly , no co m p a n y a n d no in d u s try ca n solve th is p ro b lem alone. N e g o tia tio n s w ith f o r eign g o v e rn m e n ts a r e involved.
T h e re fo re , th e a c c u m u la tio n of s tr a te g ie r a w m a te ria ls is a p ro b lem of n a tio n a l d e fe n se and, a p ro p e r fu n c tio n of fe d e ra l g o v e rn m e n t.
T h is se g m e n t o f th e p ro b lem , like th e w hole d e fe n se p ro b lem , h a s been b ad ly m ish an d le d . E e o n o m ists esti- m a le th a t w e need re s e rv e sto c k s of a t le a s t $800,000,000 w o rth o f v ita l m a te r ia ls th a t m u s t be im p o rte d . C o n g re ss a p p ro p r ia te d $100,000,000 to be s p e n t in f o u r y e a rs. T h a t p ro g ra m is in its se co n d y e a r. So fa r, less th a n $13,000,000 w o rth of th e se s tr a te g ie m a te r ia ls h a v e b ee n pur- eh ased . O u r p o sitio n in re s p e c t to th e se v ita l m a te r ia ls is one th a t ju s- tifies g ra v e concern.
O f a s im ila r n a tu rę , e x c ep t th a t it is su sc e p tib le to d o m e stic co n tro l, is th e s itu a tio n w ith r e g a rd to ste e l s c ra p . W ith th e b e g in n in g of 1939, th e re w a s a tre m e n d o u s in c re a se in th e e x p o rt of s c ra p to fo re ig n c o u n
trie s. D u rin g th e firs t n in e m o n th s of la s t y e a r, th e a v e ra g e to n n a g e of s c ra p e x p o rte d p e r m o n th w a s 229 p e r ce n t of th e m o n th ly a v e ra g e f ro m 1930 th r o u g h 1938. T h is av- e ra g e m o n th ly e x p o rt w as m o re th a n 13 p e r ce n t of th e to ta l ac
c u m u la tio n o f s c ra p ste e l in th e h a n d s of U n ite d S ta te s d e a le rs on S ep t. 30, 1939. S in ce th e n th e re
h a s b ee n a d ecline in s c ra p ex p o rt, b u t it is s till v e ry h ig h . L a te s t a v a ila b le fig u re s sh o w a m o n th ly av- e ra g e o f fo re ig n s h ip m e n ts e ą u a l to a p p ro x im a te ly 180 p e r c e n t o f th e a v e ra g e of th e p erio d 1930-1938.
A t v a rio u s tim e s, ste e l m e n hav e w a rn e d th a t it is a g a in s t th e in te r e s ts o f in d u s try .and th e n a tio n to p e rm it th is h e a v y e x p o rta tio n of s c ra p . T h e im p o rta n c e of s c ra p as a r a w m a te r ia ł in th e ste e l in d u s try is n o t fu lly re a liz e d b y th e public.
Y et it is so im p o r ta n t th a t it m a y b e c o n sid ered a v ita l “n a t u r a l re- so u rc e .” T on f o r to n it is a c tu a lly m o re v a lu a b le th a n iro n ore. I t can be ą u ic k ly co n v e rte d in to n ew steel b e c a u se i t h a s a lre a d y g one th r o u g h th e re fin in g process.
U n d e r n o rm a l co n d itio n s, a b o u t 50 p e r c e n t o f s c ra p is u se d in m a k in g new ste el. I t is u n w ise to allow too m u c h s c ra p to le a v e o u r sh o re s, bec au se su c h e x p o rts r e p r e s e n t th e d ep le tio n of a n e x tre m e ly v a lu a b le rc so u rc e . In m y o pinion, o u r sto c k s o f s c ra p ste e l a r e now too low . In th e in te r e s t o f n a tio n a l s a fe ty , a lim - ita tio n sh o u ld be p laced on ex p o rt.
T h e w o rld s itu a tio n h a s also a f
fected ste e l p ro d u ctio n . T h e w a r, of co u rse , w a s th e in d ire c t ca u se of th e e x tre m e ly h ig h r a te of o p e ra tio n s in th e la s t m o n th s of 1939, w hich re s u lte d in th e e s ta b lis h m e n t in th e finał ą u a r t e r o f th e ste e l in- du.stry’s all-tim e re c o rd f o r th e n u m b e r o f in g o t to n s p ro d u ce d . Ex- p o rts, h o w ev e r, w e re a m in o r in flu ence.
T h e r e a l d e m an d f o r ste e l w a s oc- casio n ed by d o m e stic b u y in g to pro- te e t in v e n to rie s a g a in s t ste e l sh o rl- a g e s su c h a s o c c u rre d in th e previ- ous w a r. S in ce th e firs t of th e year, th e re v e rs e h a s b ee n tru e . D o m estic b u y in g h a s d ec reased , a p p a re n tly w ith th e in te n tio n to red u c e inven- to rie s to n o rm a l levels. F o re ig n b u y in g , on th e o th e r h an d , h a s g r e a t
ly in c re ase d . D u rin g th e firs t ą u a r te r of th is y e a r, e x p o rts tre b le d th e v o lu m e of th e s a m e p erio d in 1939.
T h e y e o n s titu te d 14 p e r c e n t o f to ta l ste e l p ro d u c tio n a n d th u s helped im p o r ta n tly to o ffset th e decline in d o m e stic c o n su m p tio n .
E x p o rt D em a n d M ay R ise C o n tra ry to ex p e rien c e in th e la s t w a r, b e llig e re n ts h a v e n o t b e e n ta k in g th e m a jo r p o rtio n o f ste e l ex- p o rts. S h o u ld th e w a r continue, becom e even m o re e x te n siv e and m o re aetive, w e m a y a s s u m e th a t e x p o r t d e m a n d s w ill g re a tly in c re ase . S tee l c o n s u m p tio n of bel
lig e r e n ts w ill m u ltip ly b eyond th e ir c a p a c ity to p ro d u c e an d n e u tr a ls w ill tu r n in c re a s in g ly to th e U nited S ta te s a s th e m o s t im p o rta n t so u rce of ste e l fo r th e ir d o m e stic r e ą u ir e m e n ts a n d fo r re-ex p o rt.
S h o u ld th is com e to p a ss, th e re (P le a se tu r n to P a g e 28)
24 / T E E L
“ Crazy Q nilt of S teel M ili E x tra s”
DLscussed at W arehouse Meeting
■ “T H IS c ra z y ą u ilt o f m ili ą u a n tity an d ite m e x t r a c h a r g e s ”— a s it w as ex p re sse d by W a lte r S. D oxsey, ex ecu tiv e s e c r e ta r y — w a s th e m a in su b je c t o f d isc u ssio n a t th e A m e r
ican S te e l W a re h o u s e a s s o c ia tio n ’s th irty -firs t a n n u a l co n y e n tio n in N ew Y ork, M a y 21-22.
"T h is c ra z y q u ilt . . . " h e said,
“s ta n d s a s a c h a lle n g e to a ll in te r- ested in b rin g in g ste e l m ili p ro d u c ts to u ltim a te c o n s u m e rs th r o u g h w ell- conceived c h a n n e ls o f d istrib u tio n . F ro m th e e x p e rie n c e s a r is in g w ith th e se e x tra s , th e r e sh o u ld be a w e a lth o f in f o rm a tio n a y a ila b le b o th fro m th e m ills a n d f ro m th e w are- houses. I f w e w ill ta k e a d v a n ta g e of this in f o rm a tio n a n d a p p ly it to se rv e th e b e s t in te r e s ts o f a ll con- cerned w ith th e p ro d u c tio n , d is trib u tion, a n d u se o f ste el, th e m a rk e tin g m a c h in e ry of o u r in d u s try c a n be s tre a m lin e d a n d sy n c h ro n iz e d w ith th e p a c e -m a k in g a d v a n c e m e n ts in p ro d u ctio n p ro ee sses.
“T he ste e l m ills, a s a w hole, h a v e no policies to g o v e rn c o n s tru c tiv e ly th e ir r e la tio n s h ip s w ith d is tr ib u to r cu sto m ers. W ith v e r y fe w excep- tions, th e s te e l w a re h o u s e s m u s t p ay the sa m e p ric e f o r th e ste e l th e y buy fro m th e m ills as th e c u s to m e rs to w hom th e y m u s t re s e ll th e ir m e r
chandise.
E xtras M ay Handicap
“A nd f u r th e r , th e ste e l d is tr ib u to r m ust c o n ten d w ith a w e ird a n d fas- cin a tin g a r r a y o f m ili ite m e x tra s , o rd er e x tra s , le ss-c a rlo a d e x tra s , a n d a p e rp le x in g c o m b in a tio n o f a ll these, w h ich m a y h e lp h im in so m e in stan ces a n d s e rio u s ly h a n d ic a p him in o th e rs. T h e se m ili e x tr a s a r e of such b a sie im p o r ta n c e to th e in- dividual ste e l w a re h o u s e a n d to th e d istrib u tin g in d u s try a s a w h o le t h a t th e y w a r r a n t e a r n e s t c o n s id e ra tio n .
“F ro m m a n y a s p e c ts, th e gro- tesąue a r r a y o f m ili e x tr a s n ow ap- plied to y a rio u s ste e l p ro d u c ts a r e but g e s tu re s to m a n if e s t policies th a t a r e n o t a lw a y s p ra c tic e d n o r
en fo rc e d . As w e look a t th e m ili e x tr a s f o r e a eh in d iv id u a l p ro d u c t, b o th fa lla c ie s a n d good f e a tu re s a r e a p p a r e n t. I f w e e x a m in e th e m col- Iectively, th e c o m p le te a b s e n c e of u n ifo rm , sound, a n d c o n s tru c tiv e p la n n in g to a s s u re th e p ro d u c e rs e q u ita b le c o m p e n sa tio n f o r h a n d lin g c o s tly s m a li o rd e rs a n d to p ro m o te e ffic ie n tly a n d e c o n o m ic ally th r o u g h s e c o n d a ry o u tle ts th e d is trib u tio n of a ll ste e l p ro d u c ts is a m a z in g . . . .
"C o m p a re d w ith th e s im p le ite m e x t r a s a p p lie d to cold-rolled s trip , s ta in le s s sh e e ts, a n d cold-finished b a rs , th e ą u a n tit y e x t r a com bina- tio n s a p p lie d to h o t-ro lled sh e e ts a p p e a r tre m e n d o u s ly com plex.
V ariations A re Geographical
“F ir s t, th e r e a r e ite m e x t r a s on ą u a n titie s u n d e r 2000 p o u n d s; th e n th e r e a r e o r d e r e x tr a s on th e co m bined ite m s w e ig h in g le ss th a n 7000 p o u n d s; a n d fin ally , th e p u r c h a s e r m a y a d d to h is o rd e r a n y o th e r fla t ro lle d ite m s su c h a s g a lv a n iz e d o r cold-finished sh e e ts, a s w ell a s roof- in g a n d sid in g s, to m a k e u p a car- load.
“J u s t w h y th e fig u rę o f 2000 p o u n d s w a s se le c te d f o r ite m e x tra s no one k n o w s. T h e fig u rę o f 7000 p o u n d s s u g g e s ts a tru c k lo a d , an d le g e n d h a s it t h a t th is fig u rę origi- n a te d in T e x a s to f a c ilita te s h ip m e n ts o f s h e e ts to in la n d com m uni- tie s in tr u c k s th a t h a d d e liv e re d c o tto n to th e se a b o a rd .
“O f co u rse , th e s e e x tr a s m a k e it e a sily p o ssib le to m a k e u p a m ix ed c a rlo a d w ith o u t p a y in g a n y ite m o r ą u a n tit y e x tra s . S till, th e a m o u n t o f c o m p e n sa tio n to th e m ili f o r h a n d lin g u n d e s ira b le ą u a n titie s is p r a c tic a lly n il a n d so is th e d e g re e o f p ro te c tio n to t h e d is trib u to r a g a in s t below -eost m ili c o m p e titio n . T h e p o ssib ility o f co m b in in g roof- in g s a n d sid in g s w i t h fla t sh e e ts g iv es t h e s h e e t m e ta l d is tr ib u to r w ho se lls th e s e p ro d u c ts a lo n g w ith fla t s h e e ts a b u y in g a d v a n ta g e o v e r th e s te e l w a re h o u s e t h a t h a n d le s
fia t s h e e ts ex c lu siv ely . T h e ąues- tio n m a y w ell be ra is e d w h y r e in f o rc in g b a r s sh o u ld n o t be co m b in e d w ith cold-finished b a r s o r flo o r p la te s w ith s ta in le s s steel.
“I f w e a d d a fe w m o re flo u rish e s to th e e x tr a s f o r h o t-ro lle d sh e ets.
w e com e to th e e x tr a s f o r g aly an iz- ed sh e e ts. T h e ite m e x tr a s c o n s ist of th r e e b r a c k e ts in s te a d o f tw o a n d th e y a p p ly on ą u a n titie s o f 1500 in s te a d o f 2000 po u n d s. T h e o r d e r e x tr a s a r e in tw o b r a c k e ts in ste a d o f on e: U n d e r 7000 p o u n d s, a n d u n d e r c a rlo a d to 7000 p o u n d s. As w ith h o t-ro lled sh e e ts, o th e r k i n d s of sh e e ts a n d ro o fin g s a n d sid in g s m a y be in clu d ed to m a k e u p a c a rlo a d .
“H e re is a n in n o v a tio n — one se t of e x tr a s f o r o n e p a r t o f th e co u n t r y a n d another s e t f o r th e r e s t of th e c o u n try . T h e s e t u sed in th e Southern, m o u n ta in , a n d P acific coast s ta te s a p p lie s on ite m s o f less th a n 6000 p o u n d s. T h e b a se p rice is a y a ila b le on ite m s o f 6000 p o u n d s o r m o re. T h e e x tr a s u se d in th e r e s t o f th e c o u n try a p p ly to ite m s up to 40,000 po u n d s. In som e b r a c k e ts th e d iffe ren ce s b etw e en th e s e tw o sc h ed u le s a r e a s m u c h as
$10 a ton.
Critieizes S ellin g to Peddlers
“T h e o r d e r e x tra s on p la te s, floor p la te s , a n d s tr u e t u r a l s h a p e s a r e p re s e n te d h e re to d a y a s a d is tin c t ty p e o f m ili e x tr a s , in c o n t r a s t 1o th e o th e rs you h a v e a lr e a d y seen.
B o th in th e o ry a n d in p ra c tic e th e r e s u lt o f o rd e r e x tr a s o f th is k in d is to in v ite a n d e n c o u ra g e c u s to m e rs to co m b in e a s m a n y ite m s a s th e y ca n e n tie e a n y m ili to a c c e p t to m a k e u p a n o r d e r w h o se to ta l w e ig h t is 6000 p o u n d s o r m o re, a n d th u s o b ta in a ll th e d e s ire d ite m s r e g a rd le s s o f th e d im in u tiv e size of a n y s in g le ite m a t th e m ili b a se p ric e . T h e se o r d e r e x tr a s affo rd lit tle o r no p ro te c tio n to th e m ili f o r h a n d lin g s m a li o rd e rs a n d th e re is little ą u e s tio n a b o u t th e ir d iv e rt- in g f ro m th e w a re h o u s e to th e m ili
May 27, 1940 25
