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W . G . Gude B . K . Pr ic e L . E . B ro w n e
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th e A ct o i Aiarch 3, 1879.
t o p jrig h t 1940 by th e P en to n Publishing Co.
a
ESTABLISHED 1882
entente
V o lu m e 107—No. 16 O c to b e r 14, 1940
R E A D E R C O M M E N T S ... 4
H IG H L IG H T IN G T H IS I S S U E ... 7 i N E W S British Steel Output Larger Than at W ar’s O utbreak... 73
Full Text of T o w er’s Statement on Steel Industry’s Preparedness... 75
Stettinius Outlines Position in Nonferrous M etals... 76
20,000,000 U . S. Dollars for Steel Plant in Fascist S ta te ?... 76
Scrap Conference Finds Supplies Adequate; Prices “ Reasonable” ... 77
Excess Profits T ax to Fall L ightly on Steel Producers... 78
Steelworks Operations for W eek ... 79
See “ Intense Industrial Activity,” “ Record Gas Consumption” ... 80
Industrial Safety Is Patriotic Duty, Chicago Convention T o ld ... 81
Men of Industry ... 85
Canada T o Build Engine, Plane Plants; Nickel Output at P e a k ... 90
Defense Contract A w ards ... 91
Obituaries ... 269
W IN D O W S O F W A S H IN G T O N ... 82
M IR R O R S O F M O T O R D O M ... 87
E D IT O R IA L — “ Each W ill Sacrifice for the O th er"... 94
T H E B U S IN E S S T R E N D ... 95
T E C H N IC A L Paint for Greater Efficiency— By James A . M eacham ... 98
Crane Inspection— A Maintenance “ Must” — B y F. L . Spangler 102 joining and Welding Welded Dies . . . Th eir Design, Fabrication, Part I— By A . R. Butler. . 106 Progress in Steelmakjng
N ew Custom Alloy Shop— By George R. R eiss... m
Between Heats with Shorty 122
Additional Bibliography References— By Paul J. M cKim m 139 Heat Treating
Truck Axle Parts— By Fred B. Jacobs...
Materials Handling
W eighing Stock Automatically W hile in Motion— By B. T . Connolly IN D U S T R IA L E Q U IP M E N T ...
M E T A L C O N G R E S S A N D E X P O S IT IO N S U P P L E \1I W M A R K E T R E P O R T S A N D P R IC E S ...
B E H IN D T H E S C E N E S ... : ; C O N S T R U C T IO N A N D E N T E R P R IS E .
IN D E X T O A D V E R T IS E R S ... 3
1 0
'114
124
>57 245 268
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
O c to b e r 14, 1940
298
U S E
69
KEEPIN G P R E S S ROLLS
B i * & ® s s - C m c k t s o s t
DOCT OR B L A D E S WO R K S M O O T H L Y ON B A N T A M B E A R I N G S
O sc illa tin g d o c to r b la d e s m u s t m o v e w ith c o m p le te f re e d o m — so T h e B la c k -C la w s o n C o. t u r n s to B a n t a m fo r s p e c ia lly d e s ig n e d r e c ip ro c a tin g b a ll b e a r in g s — b e a r in g s t h a t allo w t h e s h a f t to o sc illa te s m o o th ly , a n d to m o v e a x ia lly a s w ell.
T h is is j u s t a sin g le in s ta n c e o f B a n t a m ’s a b i lity to m e e t th e sp e c ia l b e a r in g p r o b le m s o f th e p a p e r i n d u s t r y . B a n t a m e n g i
n e e rs h a v e h a d e x te n s iv e e x p e rie n c e in a p p ly in g a n ti- f r ic tio n b e a r in g s BANTi t o p r a c tic a lly e v e r y t y p e o f p a p e r m a c h i n e — f o u r d r i n i e r s , j o r d a n s , cany
d r ie rs , c a le n d e rs . expf
anti-:
Y o u c a n p u t t h a t e x p e rie n c e t o t,al- m o st w o rk in y o u r o w n p l a n t — b y in s is t
in g o n B a n t a m B e a r in g s in y o u r e q u ip m e n t. Y o u r s u p p lie r w ill b e g la d t o f u rn is h t h e m — fo r B a n t a m ’s c o o p e r a tio n g iv e s h im a d d e d a s s u r a n c e o f y o u r s a t i s f a c t i o n . F o r d e p e n d a b l e b e a r i n g s , e q u i p m e n t m a k e r 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 i f a , S o u th B e n d , I n d ia n a
¡¡§8
CB e lo w ) SPEC IA L BEA RIN G S for drier!
h av e a n ingenious ro c k er design wluca elim in ates th e sliding frictio n necessary®
o th e r ty p e s to p e rm it self-alig n m en t-® ' o th e r in stan c e o f B a n ta m ’s skill in design-
(L e ft)BANTAM’S QUILL BEARING is id eal for securing th e a d v a n ta g e s o f a n ti - f r ic t io n o p e ra tio n in p a p e r m ill a p p lic a tio n s w here space is lim ited. A com p a c t , l o w - c o s t u n it, it h as excep
tio n a lly h ig h c a p a c ity in p ro p o r
tio n to its size.
t h r u s t b e a r i n g F L O A T
B E A R I N G
R O L L E R • N E E D L E • B A L L S T R A I G H T R O L L E R • TA
ü TT Q
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
H I G H L I G H T I N G
T H I S I S S U E
H L A ST w eek ste e l p ro d u c tio n m oved up a n o th e r p o in t (p. 79) to 94 Vi p e r c e n t o f in g o t c a p acity . D e sp ite th is h ig h le v el o f o u tp u t, new o rd e rs c o n tin u e to g a in , so t h a t d e liv e rie s in c e rta in p ro d u c ts te n d to g e t f u r t h e r in to a r re a rs. Som e b a r m ills (p. 245) a r e u n a b le to p rom ise sh ip m e n ts b e fo re D ec. 1. S ta in le s s steel sh e e ts a r e d iffic u lt to g e t in le ss th a n e ig h t w eeks. A t th e s a m e tim e , c o n s u m e rs have a s s u ra n c e fro m W a lte r S. T o w e r (p. 75) th a t no sy s te m o f p r io ritie s o r to n n a g e a llo c a tion is needed. P r e s e n t s te e l p ro d u c in g c a p a c ity of th e U n ite d S ta te s , he sa y s, is a m p le to m e e t all e s se n tia l n ee d s now in s ig h t a n d no la rg e - scale ex p a n sio n o f b asic f a c ilitie s is re q u ire d .
O vercom ing tr e m e n d o u s h a n d ic a p s , E n g la n d now is p ro d u c in g m o re ste e l th a n a t th e tim e of th e w a r ’s o u tb re a k , s a y s V in c e n t D e lp o rt, St e e l’s E u ro p e a n m a n a g e r.
H e te lls o f B r iti s h re lia n c e on th e U n ite d S ta te s . H e m e n tio n s in g e n io u s d evices (p. 74) t h a t m a k e i t p o ssib le to black o u t th e glow o f fu rn a c e s d u r in g a i r raid s. . . . S c ra p su p p lie s (p. 77) a r e h eld a d e quate, w ith no ju s tific a tio n f o r r u n a w a y p rice s.
M anganese su p p lies (p. 76 ) a r e e q u iv a le n t to m ore th a n tw o y e a r s ’ re q u ire m e n ts . T in sto c k s re p re se n t m o re th a n one y e a r ’s su p p ly . N ow u n d er review a r e e ig h t p ro p o s a ls f o r b u ild in g a tin sm e lte r in th is c o u n try . A lu m in u m p r o ducing a n d r o llin g c a p a c itie s a r e to be e n la rg e d .
E nglan d S peeds Up
T his y e a r ’s N a tio n a l M e ta l C o n g re ss a n d E x position (p. 157) h a s u n u s u a l sig n ific an c e in view o f th e p re s e n t e m p h a s is on p ro d u c tio n .
S cope o f th e te c h n ic a l ses-
M e ta l
sio n s (P- 225) a n d o f th e P sh o w (p. 237) a r e su c h a s to■ongress
m e rit la rg e a tte n d a n c e . . . . T h e ste e l in d u s tr y (p. 78) will n o t be se v e re ly b u rd e n e d b y th e new e x cess p ro fits ta x , a t le a s t th is y e a r, s a y s a n a u th o rity . T h e m a c h in e to o l in d u s tr y finds u n f a ir th e f e a tu re b y w h ich th e 5 -y e a r a m o rtiz a tio n p ro v isio n is re tr o a c tiv e o n ly to J u n e 10 w h e re a s th e ex c e ss p ro fits p ro v isio n is r e t r o active' to J a n . 1. . . . N ew h o u se b ill w o u l d . p ro v id e a 6 -m an eco n o m ic d e fe n se b o a rd to h a v e b ro a d p o w ers o f r e g u la tin g ta riff s a n d fo re ig n co m m erce . . . . C a n a d a (p. 90) w ill h a v e an a i r c r a f t e n g in e p la n t.
S e e in g ta s k s a r e m a d e e a s ie r w h e n p la n t w a lls a n d c e ilin g s (p. 98) a r e co v e red w ith w h ite o r h ig h -re fle c tin g p a in t, s a y s J a m e s A . M e ach am .
T h e r e s u lt ta k e s th e f o rm o f
W h ite W alls
b e t te r a n d in c re a se d p ro d u c- tio n . . . . C ra n e in sp e c tio n ,A n d C eilin g s
s a y s F . L . S p a n g le r (p. 1 0 2 ), is a m a in te n a n c e “ m u s t.” H e o u tlin e s p ro c e d u re a im e d a t a lw a y s h a v in g c ra n e s re a d y f o r se rv ic e w h en th e y a r e needed, also a t p r o m o tin g s a f e ty f o r m e n a n d e q u ip m e n t. . , . F re d B. J a c o b s (p. 114) d e s c rib e s a w id e ly a d a p ta b le ty p e o f h e a t- tr e a tin g e q u ip m e n t u se d by a tr u c k a x le m a n u fa c tu r e r . . . . T o n g s o f a new ty p e (p. 138) a r e d e s ig n e d f o r g r e a te r s a f e ty in u s in g c r a n e s a n d h o ists. . . . M uch n ew a n d im p ro v e d in d u s tr ia l e q u ip m e n t(p. 124) is a v a ila b le .
W e ig h e d in M o ti o n
A. R. B u tle r (p. 106) d isc u sse s d e s ig n of w elded dies, u s in g h a r d - fa c in g m e ta l d e p o s its a t c ritic a l p o in ts o f new dies, a s w ell a s in r e p a ir in g old ones. T h e te c h n iq u e c a n be v a rie d to m e e t p a r ti c u la r r e q u ire m e n ts . . . .
B. T, C o n n o lly (p . 118) d e
sc rib e s m a te r ia ls h a n d lin g s y s te m s in w h ich s to c k is w eig h e d a u to m a tic a lly w h ile in m o tio n . A p p lic a tio n s in c lu d e h a n d lin g a n d w e ig h in g o f coal, coke, b la s t f u rn a c e c h a rg e s , in g o ts a n d o th e r m a te r ia ls . . . . N ew b o oks (p. 140) in c lu d e le sso n s in a r c w e ld ing, a re v ise d lis t o f N ew E n g la n d m a n u f a c tu r e r s a n d (p. 138) a re v ise d v o lu m e on m e ta l
lu r g ic a l p ra c tic e . . . . U n u s u a lly low p ric e s a p p ly (p. 137) to a new lin e o f c e m e n te d c a rb id e - tip p e d s ta n d a r d c u ttin g tools.
O c to b e r 14, 1940
71.
a a
Air R aid D a m a g e to English, G e rm a n P lan ts Slight.
Domestic O re M ining In c re a se d , Offsets Lost Im ports.
Islan d A ided b y S hipm ents from A m erica, Dom inions.
Export T rade R estricted to M an u factu red Products.
L j III GEH jFhtajv I T W a B S OlJTBnEÆK
By VINCENT DELPORT E u ro p e a n M a n a g e r, STEEL
L O N D O N H AS A RESU LT of th e first y e a r ’s w ar operations, G erm a n y h a s ob
tained control of th e ste el reso u rce s of the m a jo r p a r t of C o n tin e n ta l E u rope. Excepted a r e R ussia, w hich u n doubtedly rese rv e s f o r h e rs e lf h e r own outp u t of som e 20,000,000 tons, and Sweden an d S pain w hose to ta l capacity fo r steel pro d u ctio n a t p re s en t is not likely to exceed 1,750,000 tons.
G erm any can o b ta in fro m th e tw o la st nam ed co u n tries a v a lu a b le con
tribution in th e fo rm of iro n ore.
The steel o u tp u t of A u stria, P olan d . Bohem ia-M oravia is now p a r t a n d parcel of th e reso u rces of th e g r e a te r reich. I ta ly ’s pro d u ctio n se rv e s th e common cause of th e axis, an d the la rg e com bined reso u rce s in ste el ol' F rance, B elgium and L u x em b u rg a re a t G erm any’s d isp o sal—fo r if th e invader does not sh rin k fro m d iv e rt
ing to his ow n purposes such a v ita l necessity as foodstuffs he c e rta in ly would not h e s ita te to p u t to fu ll con
tribution th e steel prod u cin g c a p a city of his subdued w e stè rn n e ig h bors.
T h at is one side o f th e pictu re, shaded by a c e rta in a m o u n t of de
stru ctio n caused in th e R u h r d is tric t by B ritish a ir offensive. H ow ever, special objectives a r e aim ed a t, m o re directly concerned w ith th e m a n u fa c tu re of a rm a m e n ts. E ffect on G er
m a n y ’s a c tu a l steel reso u rce s is o f no g re a t consequence. T h e re a r e o th e r industries, m o re v ita l to G e rm a n y ’s
w a r needs, th a t a r e m o re specially selected f o r a tta c k .
T h e re are , of course, obvious diffi
culties confi’o n tin g th e G e rm a n steel in d u s try in s h iftin g r a w m a te ria ls an d finished p ro d u c ts ac ro ss long d ista n c e s by m e a n s o f a so re ly trie d tr a n s p o r t sy stem .
T h e o th e r side of th e p ic tu re show s G re a t B rita in , s u s ta in in g alo n e th e fu ll b r u n t of m a sse d a i r a tta c k s aim ed a t h e r w hole p ro d u ctio n sy s
tem , a n d aim ed as w ell a t th e m o ra le of h e r people b y in d is c rim in a te —o r a s to n ish in g ly u n s k illfu l—bom bing.
A nd w h a t is th e r e s u lt? T he m o ra le of th e people, th ro u g h th e w hole cross-section of th e p o p u la
tion, is s ta n d in g th e te s t; th e s p irit of re s is ta n c e is in tensified by th e sa v a g e m e th o d s of w a r f a r e used by th e en em y an d is s h a re d m ore an d
El G re a t B ritain c u rre n tly is p ro d u c in g m o re iron a n d s te e l th a n w h e n th e w a r s ta r te d a n d p r o b a b ly m o re th a n a t a n y p re v io u s p e rio d , w rite s V in c en t D elport in th e a c c o m p a n y in g q u a r te r ly su rv e y . This is d e s p ite c u rta ilm e n t of iro n ore a n d se m ifin ish e d s te e l im p o rts from u s u a l s o u rc e s of s u p p ly , a n d d e s p ite m a s s e d a ir r a id s w h ic h fre q u e n tly in te r
ru p t p ro d u c tio n . The q u ic k r e s p o n s e b y A m e ric a n s te e l m ills to E n g la n d 's p le a to r se m ifin ish e d is c re d ite d in la r g e p a rt for th e I s la n d 's s u s ta in e d o u tp u t of
n e c e s s a r y w a r m a te ria ls .
m o re by th e o th e r m e m b ers o f th e B ritish c o m m o n w ea lth of n atio n s.
B ritish p ro d u ctio n o f ste el an d o th e r e s se n tia l p ro d u c ts is g r e a te r now th a n a t a n y tim e since th e o n se t of th e w a r, a n d th e tr e n d is to w a rd s still f u r th e r e x p a n sio n w ith a lm o st u n lim ite d re so u rc e s a v a ila b le fro m th e v a rio u s p a r ts of th e em p ire. Add to th is th a t th e u n im p a ire d efficiency of th e B ritish n a v y en a b le s th e su p plies c o n trib u te d by th e U nited S ta te s to re a c h B ritish sh o res. I t ca n also be said t h a t a ll o u tsid e c o n trib u tio n s to th e B ritis h effo rt a r e s ta m p e d by a n e n th u s ia s tic w illin g n ess to help ; no co m pulsion h a s to be e x e rte d o v e r people fo rc ed to su b m ission.
T h u s, a t th e b e g in n in g of th e sec
ond y e a r of th is w a r, B rita in is p ro d u cin g m o re ste el th a n w h e n th e w a r s ta r t e d —p ro b a b ly m o re th a n a t an y tim e in h e r h isto ry . N o d e s tru c tio n of iro n a n d ste e l p la n ts h a s so f a r been experienced. I t is tr u e t h a t p ro du ctio n is b ein g in te rfe re d w ith to som e e x te n t b y in te rru p tio n s d u e to th e occasio n al p ro x im ity o f a ir ra id e rs , b u t even so, th e lo n g e r h o u rs w o rk e d an d v a rio u s o th e r m e a su re s ta k e n to in te n sify o u tp u t m o re th a n m a k e u d fo r a n y loss due to such in te rru p tio n s .
B la s t fu rn a c e s, ste el fu rn a c e s, r o ll
in g m ills a n d th e ir s u b sid ia ry de
p a r tm e n ts a r e in o p e ra tio n d a y an d n ig h t, p ra c tic a lly seven d ay s a w eek.
S pecial a r r a n g e m e n ts a r e m a d e to affo rd th e w o rk e rs occasio n al p erio d s
O c to b e r 14, 1940 73
of r e s t an d to m a in ta in a n d re c o n dition p la n ts. In g e n io u s devices h a v e been fo u n d a n d a r e applied, w hich e n a b le th e glow of fu rn a c e s to be b lack ed out in a v e r y s h o r t tim e a t n ig h t w h en a n a i r ra id is a p p ro a c h in g .
T h e p o sitio n of r a w m a te r ia ls an d se m ifin ish e d ste e l h a d becom e c r iti
cal im m e d ia te ly follow ing G er
m a n y ’s in v a sio n of B elgium and L u x e m b u rg .
S u b se q u e n t collapse of F ra n c e w as a t th a t tim e a se rio u s blow to B ritish ste e l p ro d u ctio n . P a r tic u la r ly a s re-
• g a rd s se m ifin ish e d steel, la rg e su p plies th a t w e re b ein g o b ta in e d fro m th e se c o u n trie s w e re co m p letely sto p p ed . T he G e rm a n a d v a n c e a n d th e e n tr y o f I ta ly in to th e w a r on G ei'm an y ’s side also m e n ac ed th e su p p lies of iro n o re f ro m N o rth A fric a a n d S p ain , S w e d ish su p p lies h a v in g a lre a d y been stopped.
D esp ite th e d ry in g u p of th e s e so u rce s o f su p p ly , th e B ritis h s te e l
w o rk s now h a v e a t th e ir d isp o sal th e n e c e s sa ry to n n a g e s of r a w an d se m i
finished m a te r ia l to e n a b le th e m to m a in ta in th e ir m ills a t a p e a k and, in fa c t, a c c o rd in g to re lia b le r e p o rts, en o u g h coke a n d o re is a v a il
a b le to p e rm it som e re s e rv e s to be b u ilt up.
T h e iro n o re s itu a tio n its e lf w as overcom e la rg e ly by th e m e a su re s th a t h a d been ta k e n to in c re a se do
m e stic p ro d u ctio n . T a k in g a s a r e f e r ence th e y e a r 1937, w h ich w a s a y e a r of h ig h p ro d u ctio n , som e 20,000,000 to n s of iro n o re w a s co n su m ed f o r a p ig iron o u tp u t of 8,500,000 tons.
O f th e o re consum ed, a b o u t 14,000,- 000 to n s w a s of d o m e stic e x tra c tio n a n d ju s t o v e r 6,000,000 to n s w as im p o rte d . T h e a c tu a l o u tp u t o f o re in B r ita in in th a t y e a r w a s 14,215,000 to n s a n d im p o rts am o u n te d to ju s t u n d e r 7,00,000 to n s. Of th e s e im p o rts, 2,860,000 to n s ca m e f ro m c o u n trie s now c o m p letely u n d e r G e rm a n con
tr o l; 2,165,500 to n s f ro m F re n c h N o rth A fric a ; 1,115,000 to n s fro m S p a in an d S p a n is h N o rth A frica, a n d ab o u t 809,000 to n s f ro m o th e r so u rc e s w h ich a r e s till a v a ila b le .
D o m estic O re O u tp u t U p At p re s e n t no o re can be im p o rte d in to B rita in f ro m S c a n d in a v ia o r F ra n c e , b u t su p p lie s a r e b ein g r e ceived fro m S p a in a n d N o rth A fric a, a n d im p o rts fro m f re e so u rce s h a v e no doubt been in c re ase d , a lth o u g h th e c a p a c ity o f th e s e so u rce s does not a p p e a r to be such as to allo w a n y c o n s id e ra b le in c re a se , A m eric a does n o t a p p e a r to h a v e m a d e a n y s u b s ta n tia l co n trib u tio n , p rice being, no dou b t, an im p o r ta n t co n sid eratio n .
■ F ro m th is it w ould se em th a t th e in c re a s e of d o m e stic o u tp u t m u s t be s u b s ta n tia l a n d th a t, n o t o n ly h a s th e p ro d u ctio n of a c tiv e m in e s been in tensified, b u t lo n g n eg le c te d d e p o sits m u s t now be w o rk e d a g a in . H ow ever, fig u re s a r e n o t av a ila b le .
C oke su p p lie s a r e p le n tifu l an d
B r ita in does n o t dep en d up o n im p o rts f o r h e r coke. As r e g a r d s sc ra p , re c e n t e v e n ts on th e C o n tin e n t h a v e n o t m a te r ia lly c h a n g e d th e s itu a tio n a s m o st o f B r ita in ’s sc ra p im p o rts com e fro m A m eric a, an d h e r e x p o rts w e re m o stly co n sig n ed to c o u n trie s now u n d e r G e rm a n c o n tro l. H ow ev e r, a s a lw a y s a n d e v e ry w h e re , s c ra p su p p lies c o n s titu te a difficu lt pro b lem , sp e c ia lly d u rin g p e rio d s of in te n se p ro d u ctio n . H ig h g r a d e s c ra p is p a r tic u la rly difficu lt to o b ta in . T he h ig h p rice o f im p o rte d sc ra p h a s a n a d v e rse effect on p ro d u ctio n costs, b u t in 1937 B r ita in im p o rte d o n ly a b o u t 13 p e r c e n t o f h e r con
su m p tio n d u rin g th a t y e a r.
S c ra p R e so u rce s In v e n to rie d J u s t b e fo re th is a r tic le w a s w r i t
te n , th e m in is te r of su p p ly issu ed in s tru c tio n s to th e effect t h a t a ll n a tio n a l re so u rc e s o f s c ra p m e ta ls sh o u ld be in v e n to rie d , in c lu d in g d e re lic t b u ild in g s, condem ned brid g es, a b a n d o n e d r a ilro a d lines, etc. T his ste p in no w ay in d ic a te s a n y a c tu a l s h o rta g e , b u t it is ta k e n in o rd e r to k n o w th e e x te n t of w 'hat m u s t be a c o n sid e ra b le re se rv e .
T h e s itu a tio n , as r e g a r d s iro n o re su p p lies, h a s a c e rta in effect on m e th o d s o f p ro d u ctio n , fo r th e bulk o f th e o re a v a ila b le in G re a t B rita in c o n ta in s a n a v e r a g e o f b a re ly 30 p e r c e n t ii’on a n d it is r a t h e r h ig h in p h o sp h o ru s c o n te n t; th e g ra d e s of s c ra p a v a ila b le also d e te rm in e to som e e x te n t th e co m p o sitio n of th e c h a rg e s.
P ro d u c tio n o f p ig iro n is su fficien t
fo r c u rr e n t needs a n d is supplement
ed by im p o rts t h a t com e m a in ly from In d ia . T he g r e a te r p a r t of the out
p u t is b asic iro n f o r steelmaking.
E n o u g h pig iro n is a v a ila b le for the fo u n d rie s, th e lig h t c a s tin g s industry h a v in g h a d a sla c k tim e since the b e g in n in g of th e w a r. R eserves of h e m a tite pig iro n a r e b ein g broken in to b u t h e m a tite a llo c a tio n s are s tr ic tly c o n tro lle d a n d it would be p o ssib le to in c re a se production sh o u ld th e n e c e s sity a rise .
B e fo re th e G e rm a n a d v a n c e in the w est, G re a t B rita in w a s obtaining s u b s ta n tia l to n n a g e s o f semifinished ste e l fro m F ra n c e , B elgium and L u x e m b u rg . T h e su d d e n and com
p le te s to p p a g e o f su p p lies from th o se so u rce s se rio u s ly upset the p la n n in g of p ro d u c tio n o f B ritish re
r o llin g m ills; C o n tra c ts w e re immedi
a te ly p laced w ith A m eric an mills a n d b e fo re lo n g sh ip m e n ts w ere ar
riv in g a t B ritis h p o rts, si\pplemented by som e to n n a g e s fro m th e Do
m in io n s. T h a n k s to th e speed with w h ich A m e ric a n w o rk s m et the em ei’g ency th e positio n is now re
e sta b lish e d , a n d a c o n s ta n t source of su p p ly is a s su re d .
All th e p o in ts e n u m e ra te d above in d ic a te t h a t th e B ritis h iron and ste e l in d u s try ca n now proceed with p ro d u c tio n a t a n in c re a sin g rate.
M ain d ifficu lties a r e h ig h e r cost of p ro d u c tio n due to the. h ig h e r price o f im p o rte d m a te ria ls , a n d a certain a m o u n t of in te r fe re n c e d u e to occa
sio n a l d elay s o r in te rru p tio n s in the in la n d tr a n s p o r ta tio n sy ste m which a t a ll ev e n ts, a r e ra p id ly cleared up.
Willkie in D u q u e s n e Steel District
■ W e n d e ll L. W illk ie rid e s p a s t th e C a rn e g ie -Illin o is s te e l m ills in D u q u e s n e . Po..
e n ro u te to P itts b u rg h w h e re h e d e fin e d h is la b o r v ie w s . T he R e p u b lic a n pres1' d e n tia l c a n d id a te d e c la r e d h e fa v o rs c o lle ctiv e b a r g a in in g in the b e s t sen se of th e term , w a g e a n d h o u r le g is la tio n , a n d e v e n w o u ld fa v o r try in g to m ake the W a g n e r a c t w o rk u n d e r p ro p e r a d m in is tra tio n , b e fo re h e w o u ld re c o m m e n d modi
fy in g th e la w . N EA p h o to
T he steel control, w hich is re sp o n sible for th e d istrib u tio n of m a te ria ls and steel p ro d u cts to th e con
sum ing in d u stries, is w o rk in g s a tis facto rily and s u rm o u n tin g d a y to day difficulties.
O rd in ary com m ercial u s e rs a re n a tu ra lly s tric tly re s tric te d in th e ir supplies; to n n a g e s can be o b tain ed only by ap p lica tio n to th e co n tro l and a re g ra n te d only f o r e s se n tia l w ork, each case bein g tr e a te d on its m erits. Bulk of th e o u tp u t is r e served fo r w a r pro d u ctio n in ac c o rd ance w ith a p rio rity schedule e s ta b lished by th e m in istry of supply.
F o r the sam e reaso n s, e x p o rt tr a d e
is re s tric te d also, a lth o u g h g r e a t e f fo rts a r e m a d e to re le a se as m uch as possible. O nly c e rta in c lasse s of p ro d u cts a r e a v a ila b le fo r ex p o rt, m o stly finished p ro d u cts fo r w hich a re la tiv e ly h ig h p rice ca n be o b ta in ed . T hus, fro m th e point o f view o f to n n a g e only, e x p o rt figures w ould be f a r fro m sp e c ta c u la r, b u t fro m th e poin t o f view' of v a lu e th e y a r e n o t negligible.
L oss o f c o n tin e n ta l m a rk e ts h a s been p a r tic u la rly fe lt in th e tin p la te tra d e , e sp ec ially in connection w ith s u b s ta n tia l F re n c h c o n tra c ts th a t h a d to be canceled a f te r th a t c o u n try ’s collapse.
Full T ext o f T o w er's S ta te m e n t On Steel In d u stry 's P r e p a r e d n e s s
■ PR E SE N T prod u cin g c a p ac ity of the iron and steel in d u stry in the United S tates is am p le to m e et all essential needs now in sig h t, a n d no large scale expansion of basic f a cilities is needed, a c co rd in g to a statem en t issued la s t w eek by W a l
te r S. Tower, p resid en t, A m erican Iron and Steel in stitu te .
The sta te m en t w as based upon a survey of conditions in th e in d u s
try and w as au th o rized by th e in s ti
tu te ’s board of d irec to rs, m em b ers of which are heads of r e p re s e n ta tiv e steel com panies.
“The idea h a s been in c irc u la tio n recently th a t th e c o u n try is fac in g a steel sh o rta g e an d th a t th e de
fense p rogram m ay p re se n tly be a f fected by a ‘b o ttlen e ck ’ in ste e l p ro duction,” said Mr. T ow er. “T h a t idea is not su p p o rted by an a n a ly sis of the position o f th e in d u stry . However, it evidently h a s excited th e fears of som e ste el u se rs and encouraged sp ecu lativ e buying.
"The situ atio n a t p re se n t is th a t all national defense o rd e rs a r e r e ceiving v o lu n ta ry p re fe re n c e by th e steel com panies. C om m ercial cu s
tom ers a re g e ttin g all th e ste el they need w ithout an y se rio u s inconveni
ence. No sy stem of enfo rced p ri
orities or allocation of to n n a g e is now necessary.
“The steel in d u stry to d a y h a s an annual ra te d prod u cin g ca p ac ity of approxim ately 83,000,000 n e t tons of ingots, including ca p ac ity of new furnaces installed since th e first of this year. Steel r e q u ire m e n ts of the defense p ro g ra m a r e n o t ex
pected to exceed an a n n u a l m a x i
m um of 7,000,000 to 8,000,000 net tons of ingots. A ccordingly th e re ap p ears to be no p o ssibility of a sh o rtag e of ste el fo r th e a rm a m e n t p ro g ram in any of its ram ifications.
“F u rth e rm o re th e in d u s try ’s ra te d capacity fo r prod u cin g in g o ts a c tu a l
ly is a t le a st 10 to 12 % p e r cen t below its re a l ca p ac ity , th a t m a rg in being only th e allo w an ce f o r b re a k dow ns an d re p a irs of fu rn a c e s. W ith su ch a m a rg in a v a ila b le th e in d u stry in a n e m erg en c y could p u sh o p e ra tio n s to a n a v e ra g e o f 5 p e r cen t above ra te d capacity, th u s ad d in g so m e 4,000,000 to n s of in g o ts to y e a rly o u tp u t. T h a t w ould give th e in d u s try a to ta l p o te n tia l capaci
ty close to 87,000,000 to n s a year.
“L a rg e s u m s h av e been sp e n t by th e in d u s try d u rin g th e la s t ten
W alter S. Tow er
P re sid e n t, A m erican Iro n an d S teel in s ti
tu te , a n d liaiso n officer betw een steel in d u s try and d efen se com m ission
y e a rs fo r p la n t an d e q u ip m en t. It is in splendid p h y sic al sh a p e. T h e re is ev e ry re a so n to expect th a t th e in d u stry w ould be ab le to o p e ra te close to ra te d ca p ac ity fo r su sta in e d periods, an d to go beyond it fo r occasional periods. In 1917. fo r ex am ple, o p e ra tio n s w'ere m a in ta in e d a t c a p a c ity f o r seven co n secutive m o n th s.
“P re d ic tio n s of a com ing sh o rta g e
o f ste e l a p p a re n tly a r e b ased e n tire ly on th e a s su m p tio n th a t d efe n se a c tiv itie s w ill lif t th e p u b lic’s d e
m a n d f o r ste e l p ro d u c ts to levels a t le a st e q u a l to th e h ith e rto u n p rec ed en ted p e a k o f 1929.
“E v en if it w e re tr u e th a t th e 1929 p e a k of p e r c a p ita u se o f ste e l fo r n o n -m ilitary p u rp o se s is to be rea ch ed , p re se n t ste e l c a p a c ity still w ould be e q u a l to th e dem and. In th a t y e a r th e p e r c a p ita d o m estic co n su m p tio n o f ste el in th e U nited S ta te s w as less th a n 950 p o u n d s o f in g o ts. A p p ly in g th a t p e r ca p ita fig u re to th e c o u n try ’s p re s e n t p o p u la tio n gives a to ta l of 62,000,000 n et to n s of in g o ts, o r 25,000,000 n e t to n s m o re th a n th e a n n u a l a v e ra g e o f d o m estic co n su m p tio n o v e r th e la s t te n y ea rs.
“S hould th e d o m e stic u se o f s te e l r is e to th a t u n h e a rd of figure, w ith e x p o rts co n tin u in g a t th e c u r re n t rec o rd r a te o f 12,000,000 n e t to n s an d m a x im u m d efe n se n ee d s re a c h in g 8,000,000 n e t tons, all a t th e sa m e tim e, th e g ra n d to ta l of all re q u ir e m e n ts fig u red in te rm s of in gots, w ould be 82,000,000 n e t tons. T h a t co m p a re s w ith a ra te d ca p ac ity of n e a rly 83,000,000 to n s a n d p o te n tia l em e rg e n c y ca p ac ity of a b o u t 87,- 000,000 tons.
“In e s tim a tin g p ro b ab le re q u ire m e n ts f o r ste el it is im p o rta n t to re m e m b e r th a t n o t all th e elem e n ts of d em an d e v e r rise to th e ir p ea k s sim u lta n e o u sly , an d th a t a n y such p e a k is a p a s sin g ph en o m en o n w h ich soon recedes. T h a t is esp e cially tr u e of p e a k s in o rd in a ry civilian dem and.
E x te n siv e A dditions U n n ec essa ry
“A fte r a c a re fu l s tu d y of all a v a il
ab le fa c ts th e ste e l in d u s try fo re se e s no n ec essity fo r an y ex ten siv e ad d itio n s to its ca p ac ity f o r m a k in g its basic ra w p ro d u ct, in g o ts. O cca
sio n a l m in o r d islo catio n s of su p p ly an d d em an d m a y ap p e a r, to g e th e r w ith c e rta in deficiencies in ca p ac i
tie s f o r so m e c lasse s o f p ro d u cts.
B ut th e se can be c o rre c te d w ith o u t a n y m a jo r ad d itio n s to th e in d u s
t r y ’s over-all s te e lm a k in g capacity.
“S uch a deficiency a p p e a re d to be in th e m a k in g e a rly th is y e a r in e lec tric fu rn a c e ca p ac ity , th e o u t
p u t o f w hich is u sed la rg e ly fo r sp e cial alloy ste els. H ow ever, a n u m b e r of co m p an ies h av e b u ilt o r a re b uild in g new ele c tric fu rn a c e s and by th e end o f th e y e a r th e c o u n try ’s elec tric fu rn a c e ca p ac ity w ill hav e been in c re ase d by m o re th a n 40 per cen t to a p p ro x im a te ly 2,500,000 to n s a year.
"W h a t is tr u e o f ste a l in g o ts is tr u e also o f finished p ro d u cts. T he c o u n try ’s ro llin g m ill cap acity , in th e la rg e , is am p le f o r all possible re q u ire m e n ts. F o r a few sp ecial p ro d u cts, so m e ad d itio n s to fa c ili
tie s a r e a lre a d y b eing m ad e by v a ri
o us com panies, b u t th e need fo r ex te n siv e ad d itio n s to fin ish in g ca- O c to b e r 14, 1940
75
<pacityv does n o t a p p e a r probable.
"S h o u ld -^ th ere be a n y im p o r ta n t ch a n g e irf Conditions w h ich w ould r e s u lt in u rg e n t,n e e d f o r a c c e le ra te d 'd e liv e rie s an d la rg e ly in c re a se d r e
q u ire m e n ts f o r m ilita ry u ses, it m ig h t su p e rfic ia lly a p p e a r n e c e s sa ry to , ex p a n d p ro d u c tiv e c a p a c ity a s an em e rg e n c y m e a su re . U n d e r th o se c irc u m sta n c e s, ho w ev er, it w ould be f a r m o re p ra c tic a l to su p p ly th e g o v e rn m e n t's needs by d iv e rtin g p ro d u c tio n to th o se p u rp o se s im m ed i
a te ly a n d te m p o ra rily c u rta ilin g o th e r less v ita l fo rm s o f co n s u m p tio n . T h a t s te p w ould m e e t an y
■ IS B R A Z IL in re a lity a F a sc ist s ta te ?
D id th e U nited S ta te s aid a po
te n tia l en e m y in lo a n in g th a t c o u n tr y 320,000,000 w ith w hich to build a ste e l p la n t?
S in ce th e E x p o rt-Im p o rt b a n k r e c e n tly a u th o riz e d th e lo a n a book h a s been p u b lish ed in R io d e Ja n e iro , w hich, ac c o rd in g to a c a b le d d is
p a tc h to th e N e w Y o r k T im e s fro m its c o rre sp o n d e n t a t B uenos A ires, A rg e n tin a , h a s c re a te d a “s e n s a tio n ” in S o u th A m e ric a n c a p ita ls.
T h e book, e n title d T h e N a tio n a l S ta te , I ts S tr u c tu r e an d Ideological C o n ten t, w a s w ritte n b y F ra n c isc o C am pos, m in is te r of g o v e rn m e n t an d ju s tic e in P re s id e n t V a r g a s ’ ca b in e t.
e m e rg e n c y p ro m p tly , w h ile in s ta lla tion of e x te n siv e a d d itio n s to steel- m a k in g fa c ilitie s w ould r e q u ir e fro m 12 to 15 m o n th s .”
M r. T o w e r su b se q u e n tly sta te d c o n sid erab le re c e n t in g o t p ro d u c tio n h a s g o n e an d is g o in g into m ills’ an d c o n s u m e rs' in v e n to rie s in a n tic ip a tio n of av o id in g f u tu r e de
la y s in deliveries. T h is, he added, h a s c o n trib u te d to th e re c e n t h igh o p e ra tin g r a te .
T h e b u ild in g up o f sizable sto c k s is exp ected to reliev e p r e s s u r e on m ills in p erio d s of p e a k d em an d as th e d efe n se p ro g ra m develops.
“T he B raz ilian sta te , w hile d em o c ra tic , is a t th e s a m e tim e t o t a l i t a r ian, su p re m e a u th o r ity b ein g v ested in th e P re s id e n t o f th e rep u b lic, w ho e x e rcise s it in th e n a m e o f th e p eople in th e in te r e s t o f th e ir w e lfa re ,” he say s.
C o n sid e ra b le sp a ce is d ev o ted to e x p la in in g w h y th e n ew o rd e r in B raz il h a s ab o lish e d th e r ig h t of th e S u p re m e C o u rt to r u le on th e c o n s titu tio n a lity o f la w s o r to r e view a c ts of th e g o v e rn m e n t. In
“th e n ew s ta te ” P re s id e n t V arg a s is ab o v e th e S u p re m e C o u rt, th e fu n ctio n s o f w h ich a r e m e re ly th o se of th e h ig h e s t c o u rt of a p p e a l in th e land.
“T h e p a r lia m e n ta r y in s titu tio n s in
p o litica l life to d a y a r e n o th in g more th a n g a rb a g e , d e s titu te o f any spiri
tu a l c o n te n t o r sign ifican ce,” states th e a u th o r.
" T h e re is no c o u n try th a t is not lo o k in g f o r its m a n o f destiny, no people w ho a r e n o t clam o rin g fora C a e sa r. D em o c racy is a feminine p rocess, la c k in g th e m ascu lin e quali
tie s n e c e s sa ry f o r so lv in g the prob
lem s o f to d a y .” H e describes the w hole d e m o c ra tic p ro ce ss as “irra
tio n a l a n d o u t of d a te .”
“T he o n ly p e rso n s w ho can have a n y d o u b ts r e g a r d in g th e advance of th e to ta lita r ia n sy ste m are those w ho a r e liv in g in a fairyland of w ish fu l th in k in g .”
T h ro u g h o u t th e book th e author h a s r e f e r re d to d em o cracy in the p a s t tense.
D ip lo m a ts a n d o th e r inform ed ob
s e rv e rs of P an -A m e ric a n affairs at
tr ib u te u n u su a l im p o rta n c e to the book b ec au se of th e recognized in
te lle c tu a l le a d e rsh ip of Campos, w ho is th e a c k n o w led g e d ideologist b ehind th e V a rg a s reg im e. He wrote th e c o n s titu tio n c re a tin g the new o rd e r in B razil, now know n as the
“N ew S ta te .”
T h e book is said to confirm the opinion th a t “ C am p o s is a symbol of th e to ta lita r ia n d a n g e r in South A m e ric a .” I t e x p la in s t h a t it is neces
s a r y to keep th e m a sse s in a perma
n e n t s ta te of e x c ite m e n t so that at a n y m o m e n t th e y ca n be trans
fo rm e d f ro m a la te n t s ta te oí vio
lence in to a n effective force to be u se d in c ru s h in g a n v attem pt to b re a k dow n th e u n ity of political c o m m a n d — th e d ic ta to r.
2 0 , 0 0 0 , 0 0 0 (I. S. D o l l a r s f o r
S teel P la n t in F a sc ist StateV
S tettin ieis O u tlin e s P o s itio n in X o n íerro a is Metals
W A S H IN G T O N H S U P P L IE S of m a n g a n e s e on h a n d o r re a d ily a v a ila b le to th e U n ite d S ta te s a r e now e s tim a te d a s a d e q u a te f o r m o re th a n tw o y e a r s ’ re q u ire m e n ts , a n d tin sto c k s a r e e s
tim a te d a s e q u iv a le n t to m o re th a n o n e y e a r ’s su p p ly , it w a s an n o u n c ed la s t w eek by E. R. S te ttin iu s J r., in c h a r g e o f th e in d u s tria l m a te ria ls division, n a tio n a l d efe n se a d v iso ry com m ission.
T h e se e s tim a te s , w h ich ta k e in to a c c o u n t u n u su a lly h ea v y d em a n d s w h ich w ill re s u lt fro m th e d efe n se p r o g ra m , include sto c k s c u rr e n tly h eld by in d u s try an d th e a m o u n ts a lre a d y received o r a flo a t to th e U n ite d S ta te s u n d e r th e g o v e rn m e n t sto c k pile p r o g ra m . In th e c a se of m a n g a n e se th e q u a n tity a v a ila b le fro m C uba h a s been con
sid e re d , a s w ell a s a n a n tic ip a te d in c re a se in d o m e stic p ro d u ctio n , an d s u b s titu tio n o f low -grade d o m e stic o res fo r h ig h -g ra d e im p o rte d o res in c e rta in in d u s tria l uses.
E x is tin g sto c k s h a v e been p ro te c t
ed by p la c in g m a n g a n e se on th e ex p o rt licen se lis t an d n ew so u rc e s of su p p ly a n d m e th o d s o f p ro c e ssin g a r e c o n tin u a lly b ein g in v e stig a te d a n d en c o u rag ed .
A te ch n o lo g ic c o m m itte e on tin s m e ltin g h a s been ap p o in te d b y M r.
S te ttin iu s a n d th e M e tals R e se rv e Co., su b s id ia ry of th e R e c o n s tru c tio n F in a n c e C orp. C o m m ittee w ill re v ie w e ig h t p ro p o sa ls w hich h a v e been s u b m itte d to M e tals R e se rv e f o r b u ild in g a tin s m e lte r here.
M em b ers a r e : C lyde W illiam s, di
re c to r, B a tte lle M em o rial in s titu te , C olum bus, O., c h a irm a n ; W a lte r C.
S m ith , m e ta llu rg is t, C e rro de P a s co C o p p er Corp., N ew Y ork; Jo h n F. T h o m p so n , e x e cu tiv e vice p re si
dent, In te r n a tio n a l N ickel Co., N ew Y ork; an d F . W . W illa rd , p resid e n t, N a s s a u S m e ltin g & R e fin in g Co., N ew Y ork.
M r. S te ttin iu s also an n o u n c ed p la n s f o r f u r th e r in c re a se s in a lu m i
n u m p ro d u ctio n . A lu m in u m Co. of A m erica w ill ad d th r e e u n its to its B onneville, W ash., p la n t w hich w ill
in c re a se p ro d u ctio n b y 90,000,000 p o u n d s a n n u a lly . F ir s t u n it at the p la n t ca m e into p ro d u ctio n in Sep
te m b e r a n d a second w ill sta rt op
e ra tio n s in D ecem ber. Reynolds M etals Co. is p la n n in g to start im m e d ia te ly on a p la n t to produce a lu m in u m in g o ts a t Sheffield, Ala.
C a p ac ity w ill be 60,000,000 pounds a n n u a lly .
M r. S te ttin iu s said th is country h a s su fficie n t b a u x ite to supply its o w n needs, if n ec essary , although co n sid e ra b le a m o u n ts now are be
in g im p o rte d .
A lu m in u m fa b ric a tin g capacity also is b ein g expanded.
P ro d u c e rs ’ z 'n c sto c k s have de
c re a se d slig h tly m o re th a n 50 p?1' c e n t sin ce th e end of A pril, accord in g to L eon H en d e rso n , of the de- f e n s e com m ission. C o n s u m e r s
sto c k s in th e sa m e p erio d have de
clined o n ly 13 p e r ce n t, and no"
a r e 82,300 tons. T h is rep re sen ts co n sid erab ly m o re th a n one m onths su p p ly a t c u rr e n t r a te of consump- tio n .
Scrap C on feren ce F in d s S u p p lie s A dequate: P r ic e s “R e a so n a b le "
B SCRAP supplies fo r th e defen se p ro g ra m w ill be a d e q u a te a n d th e re exists no ju stifica tio n fo r a n y r u n aw ay price developm ent. T his w as th e consensus of a co n fe re n ce of r e p resen tativ es of th e n a tio n a l d efe n se com mission, th e ste e l in d u s try and the scrap in d u stry in W ash in g to n .
Leon H enderson, d efe n se com m is
sioner in c h a rg e of p rice sta b iliz a tion, sta te d : “O u r s u rv e y of s u p plies and prices show s th a t en ough scrap will be av ailab le, an d even a t the cu rren t ste el o p e ra tin g r a te o r a t higher rate s, th e prices f o r sc ra p should not exceed an d m ig h t be low er th a n th e p re se n t level.
“The discussions betw een r e p r e sentatives of th e co n su m in g and dealing tra d e and com m ission m e m bers have rem oved a n y m is u n d e r
standings of th e conditions of su p ply and w ithin a w eek w e hope to clear up th e e n tire s itu a tio n by d is
cussion w ith th e p rin c ip a l p ro ducers of scrap."
P rices of sc ra p iron an d steel, th e conference agreed, h a v e been risin g because som e s te e lm a k e rs h av e
su d d e n ly a p p e a re d as b u y e rs in te r rito rie s fro m w hich th e y fo rm e rly h ad n o t d ra w n . C o n ferees w ere con
fident th a t w ith h o ld in g of supplies a n d sp e cu la tio n ca n be avoided an d th a t a d e q u a te an d ste a d y sc ra p su p plies w ill be a v a ila b le a t re a so n a b le prices.
T he d e fe n se a d v iso ry com m ission now is m a k in g stu d ies on m e th o d s to o b ta in sc ra p fro m c e n te rs beyond th e n o rm a l collection a re a s.
R e p re se n tin g th e ste el in d u s try a t th e co n fe re n ce w ere: R. W. W olcott, p re sid e n t, L u k en s S tee l Co., C oates- ville, P a .; L. D. G reene, a s s is ta n t to p u rc h a sin g a g e n t, B e th le h em S teel Co., B e th leh em , P a.; W ilb u r M urphy, s e c re ta ry , W e irto n S teel Co., W e irto n , W. V a.; C. A. Ugen- fritz , m a n a g e r, p u rc h a se s a n d ra w m a te ria ls , R epublic S tee l Corp., C lev e lan d ; J. C. M iller, vice p re s i
d en t, A m eric an R o llin g M ill Co., M iddletow n, O.; T. R. A kin, p re s i
d ent, L acled e S tee l Co., St. L ouis;
L. B. Block, v ice-president, I n la n d S tee l Co., C hicago; W. W. M cM illan, N a tio n a l M a lle ab le & S teel C a stin g s
“ Board. o£ Strategy” for S W O C
■ W hile in d u stry s triv e s d e s p e ra te ly to build th e m a te ria ls fo r n a tio n a l defense th is in n e r council of SW OC sits in P itts b u rg h w e ig h in g possi
bilities of a “cra ck d o w n ” on a la rg e steel com pany w hose p ro d u cts a r e essen tial to th e a rm a m e n t p ro g ra m . The union received en c o u ra g e m e n t by te le g ra m fro m none less th a n D efense C om m issioner S idney H ill
m an, w ho su g g ested th e go v ei'n m en t
m ig h t help by w ith h o ld in g d efe n se o rd e rs fro m co m p an ies held by th e la b o r b o a rd to be in v io la tio n of th e W a g n e r act, a su g g e stio n th a t b ro u g h t quick an d a n g r y public p ro te st. L e ft to rig h t, sta n d in g , N oll B eddow a n d W illiam N itch , B irm in g h a m , A la.; C lin to n S. G olden, P itts b u rg h ; seated , D avid J. M c
D onald; P h ilip M u rra y ; a n d V an A. B ittn e r, C hicago. N E A photo.
Co., C lev e lan d ; D a rw m 'S ^ L u n v Ç > ^ L u n tz Iro n « JSteelyiCjD., t & n t o n ,/
O.; a n d W a lth é b » M a th « ù u s, Ü m ted S ta te s S teel C o r p ^ e W ’^ m - k .
Iro n a n d ste e l s q f f p desrt£rs wefe re p re s e n te d b y th e fo llo w in g # iÿ o sè p lQ V. M ichaels, H y m a n - M i c h a ^ 'C o ., A C hicago; Jo se p h E. Ja cp b so n , Ç&ria *'*' B ros. & Co., P itts b u r g h ; Jo e l KT3f£- m er, L u ria Bi'os. & Co., Philactf^P p h ia ; D avid J. Jo se p h , D. J. J o s e p h /^
Co., C in c in n a ti; M ichael V. B onom o Ç i a n d H e rm a n M oskow itz, S chiavone- B onom o Corp., J e rs e y C ity, N . J.;
E. C. B a rrin g e r, ex ecu tiv e s e c re ta ry , S c ra p Iro n & S tee l in s titu te , N ew
York. ^
896,961,146 F O R S H IPY A R D E X P A N S IO N A U TH O R IZ E D
S h ip b u ild in g a n d ste e l com panies la s t w eek w e re au th o riz e d by th e n a v y d e p a rtm e n t to sp en d $96,961,- 146 to e n la rg e p la n ts to speed con
s tru c tio n o f th e “tw o-ocean” navy.
N ew fa c ilitie s w ill be p aid fo r by th e g o v e rn m e n t.
C om panies a n d a m o u n ts th e y w ere au th o riz e d to sp en d :
B e th le h em S teel Co., Risdon-Un- ion p la n t, S an F ra n cisc o , $10,013,000 f o r site, w h a rv e s, sh ip b u ild in g slips, tools an d eq u ip m e n t; S an P ed ro p la n t, Los A ngeles, $2,756,000 fo r m a ch in e ry , e q u ip m en t, b u ild in g s and sh ip b u ild in g slip; F o re R iv er p la n t, Q uincy, M ass., $13,427,500 f o r slips, buildings, tools an d e q u ip m e n t;
S ta te n Isla n d p la n t, $2,706,000 fo r buildings, p ie rs, c ra n e s, m a c h in e ry an d eq u ip m en t. B e th le h em S teel Co. also w a s a u th o riz e d to spend
$23,607,700 fo r n ew fu rn a c e s, build in g s a n d m a ch in e tools.
N ew Y ork S h ip b u ild in g Corp., C am den, N. J., $10,500,000 fo r w ays, c ra n e s an d eq u ip m en t.
F e d e ra l S h ip b u ild in g & D ry D ock Co., K ea rn y , N . J., $5,500,000 fo r ex te n sio n of w ays, tools a n d w a r e house.
N ew p o rt N ew s S h ip b u ild in g &
D ry D ock Co., N e w p o rt N ew s, Va.,
$14,000,000 fo r w ays, p ie rs, p o w er m a c h in e shop a n d eq u ip m en t.
B a th I ro n W o rk s, B ath , Me., $1,- 600,000 f o r f a b ric a tin g shop an d m a ch in ery .
C arn eg ie-Illin o is S teel Corp., P itts b u rg h , $5,354,000 fo r fu rn a c e s, b u ild in g s an d m a c h in e tools.
C rucible S teel Co. of A m erica, N ew Y ork, $765,531 fo r m a ch in e tools.
C am den F o rg e Co., C am den, N.
J., $2,873,695 fo r fu rn a c e s, build in g s a n d m a ch in e tools.
S tru th e r s - W ells - T itu sv ille Co., W a rre n , P a., $907,720 fo r fu rn a c e s, b u ild in g s an d m a ch in e tools.
G ulf S h ip b u ild in g Corp., C h ick a
saw , Ala., $2,500,000 fo r w ay s, shops, b u ild in g s a n d eq u ip m en t.
Los A n g eles S h ip b u ild in g & D ry D ock Corp., Los A ngeles, $450,000 fo r ru n w a y s, cra n e s, b u ild in g s an d eq u ip m en t.
O c to b e r 14, 1940
E xcess P r o f it s T ax T o F a ll
*
L ight] y o il S te e l P r o d u c e r s
9 B EC A U SE of its h u g e in v e st
m e n t in ca p ita ] fa c ilities, th e steel in d u s try w ill not be se v erely b u r dened by th e new ex cess p ro fits tax , a t le a st d u rin g th e c u r r e n t y e a r, ac c o rd in g to F e n n e r & B eane, in d u s tr y an d s e c u rity s u rv e y c o rp o ra tion, N ew Y ork, in a n in te rv ie w w ith St e e l.
E sse n tia lly , th e new m e a s u r e p ro vides e x e m p tio n s on th e b asis e ith e r of S p e r c e n t o f in v e ste d c a p ita l o r 95 p e r c e n t of a v e ra g e e a rn in g s d u r ing th e period 1936 to 1939, inclusive.
I n view o f th e fa c t th a t th e s ts e l in d u s tr y e a rn e d only 6.2 p e r cen t of its in v e s tm e n t d u r in g 1937, th e b e st y e a r in th e p a s t decade, it is p ro b ab le th a t m o st le a d in g ste e l com p a n ie s w ill choose th e e x e m p tio n based on in v e ste d c a p ita l. In th e decad e 1931 to 1940, ste e l in d u s try e a rn in g s a v e ra g e d o n ly 2 p e r cent o f in v e ste d ca p ita l.
N o rm a l T a x H ig h e r
W h ic h e v e r m e th o d o f ex e m p tio n is used, th e ta x r a te is 25 p e r cent on th e firs t $20,000 o f ex cess p ro fits, 30 p e r c e n t on th e n e x t $30,000, 35 p e r c e n t on th e n e x t §50,000, 40 p e r c e n t on th e n e x t $150,000, 45 p e r c e n t on th e n e x t $250,000 a n d 50 p e r cen t on a n y excess p ro fits th e r e a f te r, in all cases a f t e r an in itia l ta x f r e e a llo w an c e o f $3000. In o th e r w ords, th e ta x on th e first
$500,000 of e x c ess p ro fits is $204,- 000 a n d th e ta x p a y e r m u s t s h a re a n y ad d itio n a l e x c ess p ro fits eq u a lly w ith th e g o v e rn m e n t.
T h e ac c o m p a n y in g ta b le illu s
tr a t e s th e m a n n e r in w h ic h r e p r e s e n ta tiv e ste e l c o m p an ie s w ill bo affec ted by th e ex cess p ro fits ta x d u rin g th e c u r r e n t y e a r. In th is conn ectio n it m u s t be em p h asized th a t e s tim a te s o f 1940 n e t incom e
a r e s u b je c t to a co n sid e ra b le m a r g in of e rro r, an d th a t th e m eth o d used by c o rp o ra tio n s f o r c a lc u la t
in g e a r n in g s fo r ta x p u rp o se s f r e q u e n tly v a rie s fro m th a t used to p r e p a re fin an cial re p o rts to sto c k ho ld ers.
On th e b asis o f th e ac c o m p a n y in g c a lc u latio n s, it w ill be o bserved th a t six o f th e co m p a n ie s an a ly z ed ca n sig n ific a n tly in c re a s e th e ir e a r n in g s above e s tim a te d 1940 n e t in com e b e fo re b eco m in g s u b je c t to th e excess p ro fits ta x . F iv e com p an ies w ill a p p a r e n tly be re q u ire d to p a y a n e x c ess p ro fits ta x . In o n ly one case, th a t of N a tio n a l S teel, w ill ex cess p ro fits ta x be ca lc u lated on th e b a sis o f 1936-1939 a v e ra g e e a rn in g s ex e m p tio n .
I t sh o u ld be noted, h o w ev e r, th a t th e n ew excess p ro fits ta x m e a s u re a lso p ro v id e s f o r an in c re a s e in th e m a x im u m n o rm a l c o rp o ra tio n in com e ta x fro m 20.7 p e r cent to 24 p e r cent. (T his w a s in c re a se d fro m 18 p e r cen t e a r lie r in th e y e a r).
F o r m o st c o m p an ie s in th e ste e l in d u s try , th is w ill be c u r r e n tly m o re im p o rta n t th a n th e im p o sitio n of an ex c ess p ro fits ta x .
TA X B IL L TO E N C O U R A G E TO OL P L A N T E X P A N S IO N
P a s s a g e of th e excise p ro fits ta x bill c o n ta in in g p ro v isio n f o r ra p id a m o rtiz a tio n o f d e fe n se fac ilitie s w ill sp e ed still f u r th e r th e p ro d u c tio n o f m a c h in e to o ls fo r n a tio n a l d efe n se, C. R. B u rt, c h a irm a n , d e fe n se c o m m itte e o f th e N a tio n a l M achine Tool B u ild e rs’ asso cia tio n , C leveland, a n d p re sid e n t, P r a t t &
W h itn e y division, N iles-B em ent- P ond Co., H a rtfo rd , C onn., said la s t w eek.
“F o r m a n y m o n th s ,” B u rt p ointed out, “th e m a c h in e tool in d u s try h a s
been in s ta llin g new equipm ent, hir
in g m o re m en, w o rk in g multiple s h ifts , an d e x p a n d in g its plants in th e k n o w led g e th a t in creased ma
ch in e tool o u tp u t w a s absolutely v ita l to n a tio n a l d efen se. T his was d one in sp ite o f th e fa c t th a t the in
d u s tr y did n o t k n o w w h e th e r or not th e cost of su c h ex p a n sio n could e v e r be reco v ered . T h e industry k n ew th a t th e re w as a jo b which h a d to be done a n d w e n t ahead.
"W ith th e p a s sin g of th e excess p ro fits p ro v isio n of th e new tax law , th e m a c h in e tool b u ild e r may p roceed on fa c ts in ste a d o f guesses, a s s u re d th a t h e m a y reco v er the cost o f p u re ly d e fe n se fac ilities over a five-year p erio d w ith o u t being as
se ssed ex cess p ro fits ta x e s on the c a p ita l so adv an ced . T h is concrete d efinition o f a m o rtiz a tio n te rm s will, I believe, p av e th e w ay f o r still fur
th e r p la n t e x p a n sio n a n d productivi
ty in th e m a c h in e tool in d u stry , and help to a s s u re th e in d u s try ’s capaci
ty to m e e t in fu ll th e n a tio n ’s ma
ch in e tool d e fe n se req u irem en ts.
“I t is indeed u n f o r tu n a te th a t the a m o rtiz a tio n p ro v isio n s o f this bill a r e re tro a c tiv e only to Ju n e 10 w h e re a s its excess p ro fits provisions a r e re tro a c tiv e to Ja n . 1. This un
d u ly p en a liz es th e v ery companies w ho h a v e lo n g sin c e step p ed for
w a rd in ex p a n sio n f o r n ational de
fe n se p ro d u c tio n —su c h as is the c a se w ith m a n y o f th e companies in o u r ow n in d u stry . T h ey are ac
tu a lly re q u ire d to p a y a price for h a v in g c o n trib u te d th e capital to a n tic ip a te th e needs of th e prepared
n e s s p r o g ra m . I t is to be hoped that th is b lu n d e r w ill in d u e tim e be rec
ognized a n d c o rre c te d .”
IS C o n s tru c tio n of a $2,100,000
“b la c k o u t" fa c to ry f o r Grumman A irc ra f t E n g in e e rin g C orp. has been s ta r te d at, B e th p a g e , L ong Island, N. Y., by th e A u stin Co., C lev e la n d .
G ru m m a n a d o p te d a windowless d esig n to m a k e th e b u ild in g invisible f ro m th e a i r a t n ig h t.
H o w Profits T ax Will Affect Selected C om panies
A lleg h en y L u d lu m S teel C orp.
A m eric an R o llin g M ill C o...
B e th le h em S teel Co...
C ru cib le S teel Co...
In la n d S tee l Co. ...
Jo n e s & L a u g h lin S teel C orp.
N a tio n a l S tee l C o rp ...
R epu b lic S tee l C o rp ...
R u stless Iro n & S teel C o rp ---- U n ite d S ta te s S teel C o rp ...
W h eelin g S teel C o rp ...
Y o u n g sto w n S h e e t & T u b e Co.
"In v e ste d
••A v e ra g e
A nnuat S% of 1939 E stim a te d E stim ated 1940
C ap ita l E a rn in g s In v e sted N et 1940 N et Excess Pro'Ks
12/31/39 1936-1939 C a p ita l Incom e Incom e Tax
$27,108,505 $1,974,507 $2,168,000 $2,093,518 $4,000,000 $S50,000
129,988,432 4,671,230 10,399,075 4,011,909 5,500,000
568,813,331 18,902,306 45,505,064 24,638,384 50,000,000 2,050,000
103,132,714 2,485,670 S,250,617 2,803,596 6,500,000
129,700,763 10,328,270 10,376,061 10,931,015 14,000,000 2,045,575
193,597,401 3,146,175 15,487,792 3,188,944 9,500,000
169,929,778 16,S47,168 14,394,382 12,581,635 16,500,000 " 201,835
300,654,726 7,325,603 24,052,378 10,671,343 16,000,000
5,549,592 558,957 443,968 1,090,876 1,500,000 433,4®
1,423,058,000 46,661,912 113,848,000 41,119,934 100,000,000
97,731,000 3,601,941 7,816,000 5,560,753 4,500,000
191,039,826 6,439,908 15,283,186 5,004,484 6,000,000
N ote: F ig u re s a re fro m co m p a n y re p o rts to sto c k h o ld e rs. E a rn in g s re p o rte d to b u re a u o f in te rn a l re v en u e a r e frequently cal
c u la te d on a d iffere n t base.
•C o n sists of s ta te d v a lu e o f com m on and p re fe rre d sto ck s, e a rn e d an d c a p ita l su rp lu s, an d 50 p er c en t of fu n d e d debt.
••E x e m p tio n is 95 p er c en t o f a v e ra g e e a rn in g s.
C om p ilatio n by F e n n e r & B eane. New York.
