The Iron Age 1923-01-04: Vol 111 Iss 1

VOL. III, No. 1! 1922 Ends with Good Promise for Early1923 Production Increased 70 Per Cent Over 1921, in Spite of Coal Strike and Transportation Troubles—Prices Rose, but High Costs REVIEW of 1922 in the iron and steel indus- try is valuable in part as history, but more valuable for the light it throws on the yet unexplored region of 1923. was the smallest on record in proportion to capacity, and as prices steadily de- clined consumers used up their stocks to the last ton to avoid going to the mills. In 1922 the effort of the country to restock in steel was naturally a factor, and at the end of the year it would be worth knowing to what extent jobbers’ and consumers’ stocks have been rebuilt. The question has a bearing on demand in 1923. Railroad buying and new construction were the main props of the steel market in 1922. It is nat- ural to ask at the begin- ning of the new year whether they will make an equal call upon the indus- try in the next twelve months. Automobile builders made a new output record in 1922. Will that of 1923 be greater or less? Farm- er buying of implements and of machinery into which iron and steel enter was much below the aver- age in 1921 and 1922. Will there not be a compensat- ing increase in agricul- tural demand for iron and steel in 1923? Shipbuild- ing has required compara- tively little steel in the past two years. 1923? Comment will be made later on some of these phases of the outlook. They are mentioned here In 1921 steel output avennenenana: HULURARROU DONC Ls NonunenenONnOD EOD: | | | = . 1 LSHUADEEEDENENOEDENS OEDNG ARO REDDOUREBLLUONONIDNSLENROOEDERASEDDODOEAOHEN bannerneNtONTEStELN IE COST ADeDASEDECERDOCEDUCOUDORE ORAS TET eCRNDE Features of 1922 T was a year of wide swings in pro- duction and prices. As low as 1.30c. for plates and as high as 2.50c. Steel work operations ranged from 35 per cent of capacity in January to 80 per cent in December, with many fluctuations between. A coal strike lasting five months, making fuel scarce and high-priced, dominated the pig iron and steel mar- kets for most of the year. Premium prices for finished steel resulted, but costs rose more than average prices. Railroad buying was far beyond anything expected as 1922 opened, 170,000 freight cars being ordered against 23,346 in 1921. New construc- tion was another main factor, as was also replenishment of stocks. Steel works produced about 33,500,- 000 tons of ingots against 19,783,000 tons in 1921, an increase of 70 per cent. In terms of the country’s ca- pacity, 1922 was thus a 64 per cent year, while 1921 was a 38 per cent year. Pig iron production was about 26,800,000 tons, against 16,688,000 tons in 1921, an increase of 60 per cent. The number of active blast fur- naces doubled—125 on Jan. 1, 1922, and over 250 on Jan. 1, 1923. Is there encouragement for a larger rate of shipbuilding in | li 1 HARE LPMORANERONSLLLAEDETLLED DRGLNNAGENDERDESHERAEDEC DO DILDAEARLAALSEONA CERAON LEESENDAGS4 Fan bAEesaRON NEG: Left Little Profit and Often Loss essen to emphasize their relation to what happened in 1922, also to suggest that the history of the year just ended illustrates again how developments in iron and steel are influenced in a large way by what occurs outside the in- dustry, important as the industry is in itself, and much as it has been called the barometer of trade. First and last the coal strike and the railroad shopmen’s strike were re- sponsible for a good deal. They had much to do with the course of prices. These strikes and the advance in coal prices that resulted pushed up iron and steel production costs, led to premium prices for prompt delivery steel, limited out- put of merchant pig iron, led to the bringing in of over 300,000 tons of for- eign pig iron, and for a time caused such conges- tion of rolled steel at mills as threatened the continu- ous operation of consum- ing industries. Great Increase in Output In spite of its heavy handicaps, 1922 brought marked improvement in the volume of iron and steel business. December, traditionally the month of holiday slowing down, made the high production record of the year, and 1923 opens under a mo- mentum promising a good rate of activity through the first quarter at least. While the prophecies made as 1922 opened were generally hopeful, none of the leaders in the in- 1 dustry dared predict a demand on any such scale as the year developed. After going through the ig i j . we emg «doe en ne 2 THE IRON AGE deep depression of 1921, few had the courage to expect more than that at some time in 1922 produc- tion might get up to 60 or 65 per cent of capacity. Now that the record is made, it is seen that actual- ly the latter figure was almost reached as the aver- age for the year. Speaking in terms of steel in- got capacity, 1922 was a 64 per cent year, whereas 1921 was a 38 per cent year—an estimated steel ingot output last year of 33,500,000 tons, against 19,783,000 tons in 1921. The Factor of Replenishment In 1921 the amazing thing was the way in which consumers got along without going to the mills. The country never went through a year before on a 38 per cent operation of steel works, and would not then but for an almost miserly using up of every pound of the steel that figured in the disastrous inventories of Dec. 31, 1920. With prices steadily falling in 1921, buyers kept close to shore. When it appeared that steel prices had been reduced from the war level much more than those of other commodities, the effort of some large producers to get backlogs in plates, shapes and bars in February and March of last year found buyers willing to add to their stocks. What the movement would have gone to but for the coal strike will never be known. With the strike and later the going out of railroad shopmen, the scarcity factor came in and remained until nearly the end of the year. Jobbers succeeded fairly well, in spite of the coal and railroad strikes, in rebuilding their stocks after the drastic liquida- tion of 1921. But manufacturing consumers of steel often ran on short rations. In the last two ‘months of the year the high rate of steel works operation, which for several weeks was close to 80 per cent of the country’s capacity, gave some manufacturing buyers more finished steel than they were currently consuming, but in general in- ventories of consumers were not large. Reports from jobbing interests are that they sold more steel in the last two months of the year than they expected and therefore are not carrying large stocks over into the new year. Demand and Prices The greatest volume of construction work ever completed in a year is a large factor in the record of steel consumption in 1922. The F. W. Dodge Co. estimates put the total value of buildings erected at $4,300,000,000, as against $3,142,000,000 in 1921. The number of buildings of all types contracted for is put at 100,000. Railroads bought on an increasing scale through- out the year, the outstanding fact being in all the fluctuations in iron and steel output, that the trans- portation facilities of the country are inadequate and will continue to be a check upon industry. Any shortages in delivery of steel last year were due, not to insufficient supplies but rather to insufficient mo- tive power and freight cars. In what is more fully set forth elsewhere as to the railroad buying of the year, orders for a total of 170,000 freight cars and for not far from 2300 locomotives are outstanding features. The record consumption of steel in automobile building is one of the familiar facts of the year; equally familiar is the lack of agricultural buying power, which made the operations of implement and harvesting machinery plants much less than 50 per cent of what would ordinarily be expected. Low prices for oil over much of the year held back oil well drilling, so that the principal activity in pipe was in butt weld sizes, finding chief outlet in new January 4, 1923 construction. At the same time the disposition of oil producers to store rather than sell their product at low prices caused an unusual amount of oil stor- age tank building. Plate mills had a good year, with all the locomotive car and tank building, so that the lack of shipbuilding was not felt. The trouble was, however, that plate mill building was overdone in war time and there was not enough business for all. Sheet and tin plate demand was more than fair throughout the year, automobile plants and the canning industry being large factors. It was a good year for wire products, apart from agricultural uses, and for nails in particular, in view of the building boom. . The course of prices in the year is indicated fully in the statistical charts and price tables found elsewhere. High-priced coal made havoc of costs at some stages of the strike. In some cases $6 a ton, or $4 more than had been paid for coal from nearby mines, was paid for Kentucky coal, repre- senting nearly $10 increase in the cost of a ton of steel. As against 1.30c. to 1.40c. paid for plates, shapes and bars in February, March and early April, prices later rose to 2c. to 2.50c. Late in the year the premiums came off and the mills aimed at a 2c. market for the three heavy products, though 1.95c. and 1.90c. were done. Much of the car steel of the year was bought at 1.30c. to 1.40c., and it is probable that the bulk of the year’s shipments of plates, shapes and bars from leading mills averaged not more than 1.50c. The Coal and Railroad Strikes Prior to the strike of the union workers in the country’s bituminous coal mines on April 1, iron and steel producers were generally confident of their ability to keep up operations on a scale suffi- cient to meet all demands upon them. The steel in- dustry as a whole was running at that time at about 65 per cent of capacity. Buying in March had been at a greater rate than at any time since July or August, 1920. Reserves of soft coal were put at about 63,000,000 tons, or roughly about two months’ requirements for the country. Non-union mines, which it was then believed would not be affected greatly, were producing about 5,000,000 tons a week. The strike was not expected to last long. The miners’ demand for the $7.50 wage of the post-war boom, or more than they had in war time, was unpopular and was not believed to be enforceable, particularly as they were not thought to be financially able to maintain a long strike. As the strike went on, the earlier reckonings required to be revised. The steel companies in fact did keep up their production well, thanks to the coal stocks they had laid up. But the belief that non-union miners would not go out proved illusory. Few steel companies, the Steel Corpora- tion included, which depend on the Connellsville district for coal, were prepared for what happened there. Within two weeks the stoppage of mining in non-union fields had gone to the point of caus- ing the banking of a number of blast furnaces in Ohio and the Pittsburgh district, and plans that had been announced for the starting of other fur- naces were held in abeyance. The steel compa- nies made large purchases of coal in the West Vir- ginia and Kentucky fields, the Steel Corporation being particularly forehanded in getting a good share of the available coal from those districts. The increase in fuel cost per ton of steel was heavy, but the maintenance of steel output was counting strongly in the breaking of the strike. The hopes of the strikers were near the lowest when the suggestion came from the President that January 4, 1923 the miners go back = g»|_ to work at the wages for which they were fighting, 10 pending an investi- gation and report by a committee. The miners flatly rejected arbi- tration, and there was a division among the oper- ators over the President’s plan. The strike went on and ended late in August in a com- plete victory for the union. At the same time advances of 40 per cent and more were made at non - union mines. These latter ad- | vances, however, "ta 2 tan did not bring full resumption in the Connellsville district, many of the miners there continuing to hold out for recognition of the union, which operators there have steadily refused. A strike of railroad shopmen on July 1 against findings of the Railroad Labor Board and against the policies of various railroads in enforcing shop rules aggravated the effect of the coal strike upon iron and steel works operations. By a strange twist of fate the roads over which coal was mov- ing from Kentucky and West Virginia fields to help out the steel companies were the first to feel the shopmen’s strike, and congestion quickly en- sued. The worst situation was reached in the second half of August, when steel output went below 50 per cent of capacity. A sweeping order of the Interstate Commerce Commission, effective July 25, establishing priorities in all railroad traf- fic and in fuel distribution, imposed a new handi- cap on iron and steel companies, and its cramping effect on the output continued for a month or more. The ending of the coal strike late in August was the turning point. Fuel supply slowly in- creased in the first half of September and more rapidly in the second half, and eventually an 80 < 1920 per cent steel output was reached. That is ap- 160 a Diagram Showing the =< 40 Fluctuations in Daily 5 Average Production of FE 19 \ Steel Ingots and Pig = \ Iron in the Past Four 2100 1s Years. Based on =! ry monthly ingot statis- & \/ tics of American Iron = 60 ¥ and Steel Institute and us monthly pig iron sta- v 60 tistics of Tue IRon © Ace. The dotted ingot D 40 oe line in late 1919 is for & the period of the steel es strike, when statistics — were not reported a 1919 ~<- THE IRON Curves Showing Fluctuations in the Average of Bar, Beam and Prices, Pittsburgh, in 1919, 1920, 1921 and 1922, and for the Same Years the Fluctuations in the Pig Iron Composite (Basic Iron at Valley Furnace and Foundry No. 2 at Chicago, Philadelphia and Birmingham) AGE 3 parently the limit now possible, with present transporta- tion facilities and hated bent 390 ‘the present re- > stricted supply of £ | = common labor. oO t 4 2.50 S Production } £ Considering all & the handicaps un- 5 S der which blast furances and steel works labored, the output of the year represents a re- markable recovery from the depres- sion of 1921. We estimate pig iron production (apart from charcoal iron) at 26,800,000 tons. Steel ingot produc- tion may be esti- mated at 33,500,- 000 tons and steel castings at 850,000 tons, making the total of ingots and castings about 34,350,000 tons. Comparison with the six previous years is made in the following table: 199! aid 1997 _ wii Wee Plate Steel Ingots Pig Iron, and Castings, Gross Tons Gross Tons 1916.. 39,434,797 42,773,680 1917. 38,621,216 45,060,607 1918.. 39,054,644 44,462,432 1919.. 31,015,364 34,671,232 Rs £6 beak n wen 36,925,987 42,132,934 BE ava ke 16,688,126 19,783,797 1922. 26,800,000 34,.350,000° *Estimated. The variations in pig iron production appear in the following statement of the number and daily capacity of the furnaces in blast at the beginning of each month: Daily Daily No. in Capacity, No. in Capacity, 1922 Blast Gross Tons 1922 Blast Gross Tons Jan. 1 . 136 53,735 July 1.... 192 81,845 Ws Bu cee Bee 53,305 Me Bs wee Eee 70,605 Mar. 1.... 1388 59,080 Sept. 1.... 144 54,645 April 1 . 155 69,015 Oct. 1.... 189 77,005 May 1 162 72,875 Nov. 1.... 218 87,935 June 1 DOE Beice OS 97,135 .. 198 77,520 Se. U eNO RNRBE DPN OREEAD vERRONREE rRRaE TARE HF) 1 CANT VET DLAETRESASURRERERDEOAHRAE HEE LNT) HHn DN) CHTENITBON HrNLOOONO ISN cmMa (Continued on page 51) | | | | SS ——- The Trend of the Machine Tool Industry What Recent Experiences Mean for the Future—More Specialization, Yet General Purpose Machines Hold a Strong Place—Relation to Automobile Industry—Problem of Alloy Steels BY FRANK A. SCOTT* XAMINING the K machine tool industry at the close of 1922 re- veals many interesting facts and develops some questions which will be answered only with the progress of time. The great war, so largely mechanical in its character, made immense drafts upon the machine tool industries of the warring nations. Those countries which were machine tool producers at the beginning of the war ex- panded their facilities to the very limits of their power. Those not possessed of ma- chine tool industries estab- lished them and made some progress in production. The cessation of the war demand not only rendered idle the great productive facilities which had been supplying it, but at the same time there poured from thousands of government and privately-owned munitions plants such a volume of second-hand tools as the world had never seen before. Therefore, in every country the machine tool industry has been struggling against the meager demand consequent upon an industrial depres- sion, and the necessity for absorbing and reallocating the used tools released from war work. FRANK A. SCOTT Made Stronger by Adversity At the end of 1922 it is possible to say that, after two years of the worst depression in its history, the in- dustry not only has survived but has been strengthened. It is true that some of the weaker organizations and some that were the offspring of the war demand have fallen out. It is also true that many of the older and stronger concerns have met the financial strains of the post-war period by refinancing operations. Out of it all there emerges a machine tool industry vastly more ex- perienced in quantity production, in meeting new en- gineering problems, in utilizing unskilled labor, in work- ing metals but little used prior to the war, in supplying foreign demands and dealing with foreign customers. Less Than a 40 Per Cent Year In no part of the world was there a normal demand for machine tools during 1922. It is probable that the business of American manufacturers did not reach 40 per cent of their producing capacity. Substantially all of this modest demand originated in this country. The volume of foreign business, while a little greater than in 1921, was still so small as to be without influence on the American program. Most prominent among the causes of the light for- *President Warner & Swasey Co., Cleveland. Mr. Scott’s conspicuous war-time service at Washington as chairman of the General Munitions Board and later as chairman of the War Industries Board are well remembered. eign demand are the uncertain political and financial conditions in those countries, strikes, the vast volume of used tools available from unnumbered sources, and, on the Continent, the competition of new and good lower priced machines of German make, mostly copies of American designs. However, as one American ob- server of conditions in Europe phrased it, “The European metal-working industry is stumbling along.” Progress is being made; consumption continues, and production can not forever be deferred. Herein would lie the advantage to the American machine tool manu- facturer of American participation in European finan- cial rehabilitation. Prices Tend Upward The price trend of machine tools is now clearly up- ward. During 1921 and 1922 there was uncertainty caused by poor business, large inventories, and confident anticipations by the American producer that his ma- terial and labor costs would be lower. It is every day becoming more evident that anticipated reductions in these items are unrealized, and therefore the last quar- ter of 1922 has shown a steady advance in list prices of machine tools. The supply of finished machines in the hands of makers undoubtedly remained at about the same point throughout the year. While it is true that there has been production in somewhat increased volume over 1921, the sales volume has been so low as to result in little more than a general inventory reduction. Specialization More Marked American-made machine tools cover the entire field: simple forms which have few power and automatic movements and are adaptable to any operation within the group for which they are designed; highly special- ized and automatically operated single-purpose ma- chines intended for certain operations upon particular pieces; and highly developed automatic machines, flex- ible in their productive elements. For many years it was important, but not essential, that the machine tool manufacturer determine definitely the exact character and range of work which he proposed to cover by his design. The machine was so flexible that it could be used in any metal-working field, and its flexibility usu- ally could be made even greater by a tooling equipment specially designed to meet a particular purpose. Grad- ually this condition changed toward specialization. The trend of American metal-working has been to- ward concentration in larger units, with great produc- tive capacity and continuous work upon fixed designs. Small arms, the sewing machine, and the bicycle were among the early products which lent themselves to this kind of a producing plant. Plumbing supplies, many forms of electrical equipment, and other lines of manu- facture which were well developed at least 25 years ago all gave opportunity for specialized machinery. The automotive industry, however, is the one which forced consideration of specialization in metal-working and which has given opportunity for the finest accomplish- ments in the field of highly specialized automatic ma- a January 4, 1923 chinery for the rapid production of duplicate parts ac- curately machined. Three Main Groups of Users Therefore, American users of machine tools might now roughly be grouped into three classes: First, the manufacturers whose goods require large quantities of duplicate parts, or continuous production of duplicate parts with no changes in design. In this class would be included a few of the larger automobile plants, some producers of electrical equipment, some screw and bolt plants, the larger producers of plumb- ing supplies, etc. Second, the manufacturers whose goods require the production of parts in considerable number, but in- sufficient to justify a continuous run for more than per- haps a few days or weeks, this interruption necessarily involving changes in machine set-ups. Into this class would be put most of our automobile plants, producers of locomotives, substantially all the machine tool manu- facturers, agricultural machinery manufacturers, ma- chine shops at the great shipbuilding and navy yards, ete.—probably the bulk of American metal-working in- dustry. Third, the general machine shops which encounter frequent interruptions in their work and the necessity for constant changes in set-ups of machines, including perhaps in this class most of the railroad repair shops, most tool rooms of the larger plants, some of the ma- chine tool builders, and all the general machine shops and repair shops of the country. The Designer’s Problem It is clear that to serve these three classes of pro- ducers and metal-workers to the best advantage it is necessary for the American machine tool manufacturer to develop a product that will be either sufficiently uni- versal to be adaptable to the three phases of metal- working outlined above, or will be so altered in char- acter as to be especially applicable to one or more of these classes. The machine tool industry has built its engineering advances upon the solid foundation of experience. Neither the industry nor its customers have been in- volved in the losses which are the product of enthusi- asm untempered by knowledge. Acknowledging this, and acknowledging also that automatic machines are at times a costly experiment, what shall the machine tool designer do? The answer to this question concerns the machine tool users even more than the makers. The success of American metal-working depends absolutely on Ameri- can machine tool efficiency. The solution rests in the possibility of cooperation between the great users and the producers of these necessary equipments. The greatest users the world has ever seen are the automo- bile manufacturers. Relation to Automobile Development The automotive business of the United States has become the miracle industry of the world, and by its recognition of the power of quantity production enjoys world supremacy for its product. This success was possible only with the co-operation of the machine tool industry of the United States. By its ready recognition of the problems and its prompt response to the new de- mands and opportunities presented by the American automotive manufacturers and by supplying the latter from groups of apprentices a never failing source of highly trained mechanics, the machine tool industry played its part. Conversely, it must be acknowledged that the cour- age, resourcefulness and initiative shown by the en- gineers, capitalists and inventors in the automotive field, stimulated those similarly related to the machine tool industry, so that the latter have made greater THE IRON AGE 5 strides in the 10 years just past than in the 20 years preceding. Design and material both have been affected by the demands and examples originating from the automotive manufacturers. Their experimental labora- tories have developed much that benefited the machine tool industry as though intended especially for it. In compensation for his contributions, the automotive man- ufacturer has been the beneficiary of special engineer- ing work freely bestowed by the machine tool manufac- turer. To study a design with the view to developing a special machine, or a tool equipment, to lessen the cost of a particular part has become one of the every-day commonplaces with the American machine tool engineer. Perhaps there is a feeling in the machine tool in- dustry that these contributions made by it to the auto- motive industry have been taken too much for granted, and that they have been accepted too much as an ele- ment of the sales activity in the machine tool business, rather than as a professional service. There is much to evidence an increasing self-consciousness in the ma- chine tool industry, and the probability that professional services are more likely hereafter to be increasingly so classified. If this should develop to be the case, we would then see drawing to its close that era in the machine tool business during which it has been possible for a prospective customer to enjoy the best engineering and laboratory talent of the machine tool manufacturer, as applied exclusively to his own product, with no obligation except the possible purchase of a few ma- chines, at the going market price, when the studies had been completed. The new era of price competition in the automotive industry again brings the machine tool manufacturer into prominence. For a few years it appeared that the machine tool work in the automotive field had reached the topmost point of its ability to render service. The automotive industry seemed to be at the very peak of productivity in quantity, at low cost. The conclusion then would have been that the automotive man had passed the period of greatest need for the co-operation of his machine tool brother. The depression of the past two years has entirely changed this picture. The price competition in the automotive industry has again made essential to its welfare the utmost that can be done for it by the machine tool designer in the development of equipments that will produce quantity, good workman- ship and low cost. New Calls Upon the Machine Tool Manufacturer At the very moment, however, that this new need has arisen in the automotive industry, the machine tool producer is being beckoned into other fields by new customers, such as the manufacturers of electrical equipment and the many household appliances and con- veniences that have suddenly begun to flood the market. The railroads also have called upon the machine tool man for help in the much needed rehabilitation of the railroad shops to bring them up to a basis of modern efficiency. However, it is clear that the greatest metal- working industry which the world has ever seen must continue to receive the best help that can be extended to it by the American machine tool manufacturer. For- tunately, from the automotive field comes recognition of the desirability of this help. Some of the best points that have been made in relation to the mutual depend- ence of these two great industries are to be found in the addresses made by automotive engineers at their meeting in Detroit in October, 1922. New Importance of Apprenticeship System Mention has been made of the contributions of skilled men by the machine tool industry to the automo- tive industry. This brings forward for examination the apprenticeship system which has been followed for over half a century in the machine tool business. Young men who have had four years special training in ma- i oe ee na ene + thal sa tl Da 6 THE IRON AGE chine tool plants, this training in many instances in- cluding theoretical mechanics as well as practical work on all types of productive machinery, graduate not only as skilled mechanics, but with minds trained to appre- ciate the value of high standards in metal-working and the methods by which high standards may be attained. The quality of machine tools and of other metal prod- ucts as well rests upon this. A canvass of any organi- zation of superintendents and foremen in any of our great metal-working centers is rather astonishing in the numbers of machine tool apprentices who are shown to have reached eminence in other metal-working lines. At the meeting of automotive engineers referred to above, very frank recognition was made of this tre- mendous contribution by the machine tool industry to the automotive industry, and emphasis was laid upon the necessity for the latter industry now developing its own apprentice courses. Machines for Working on Alloy Steels Accompanying the demand for single-purpose ma- chines of automatic type, arising out of the new era of price competition and the high cost and scarcity of skilled and semi-skilled metal workers, have come new problems presented by the use of materials containing alloys, the use of alloy steel for cutting tools, and the use of other special cutting materials which admit of deeper cuts and faster speeds than those for which most machine tools were originally designed. It is natural that machine tool design must follow and cannot pre- cede the working up of alloy steels with the newer alloy cutters. The new alloys must first be developed and the market for them created before the machine tool manufacturer can visualize a machine to work up these alloys most efficiently. Very few machine tools on the market today will work up materials to the capacity of the cutters. It is true that in experimental work the cutters can be made to give way first, but in most in- stances the trouble can be located in the machine; vi- bration between the work and the cutters causes more cutters to break down than the action of the metal against the cutter. It is evident that this problem could be met more readily in a single-purpose machine than in one of more general design; but again the advantage thus attained is somewhat neutralized by the loss of flexibility in the use of the machine. The designing of machine tools, like the designing of a warship, neces- sarily is a compromise, and an effort to balance advan- tages against weaknesses or disadvantages. These points are mentioned only to emphasize the necessity for the machine tool manufacturer clearly electing the field which he proposes to cover. Special Machines and General Purpose Machines It is not the purpose of this article to endeavor to establish the course of action for the American machine tool manufacturer. Even superficial examination of the field, however, indicates a trend toward quantity production that immediately suggests automatic ma- chinery and single-purpose machines specially designed for particular uses. One might be inclined to conclude, therefore, that these two types of machines are the ones which hold the key to the future of metal-working in our country. But this conclusion would immediately be weakened by the fact that from the engineers of the very industry which has called most insistently for these types of machines, even so recently as October last, comes the suggestion that this demand should now be modified. Perhaps the best discussion of this particular phase of the problem which thus far has been presented for consideration by American manufacturers is to be found in the proceedings of the meeting of the automo- tive engineers in Detroit, heretofore referred to. Its solution will rest in following the Scriptural admoni- tion, “This ought ye to have done, and not to have left the other undone.” It is entirely probable that we shall January 4, 1923 witness a development of special machinery and at the same time an improvement in the design of general pur- pose machines; and it is altogether more than probable that, well beyond the life-time of the men now engaged in the industry, standard machines of the so-called gen- eral type will continue to be the backbone of all ma- chine shop installations. A High Place in Industry A survey of the machine tool industry opens a fas- cinating and inspiring field of study. It might be divided into sections, and so studied from the economic view, or its relationship to industrial progress; from the point of view of the engineer, or its place in the development of the mechanic arts; from the banker’s outlook, or its influence on trade, commerce and finance; from the standpoint of the philosopher, or its effect on civilization and the progress of man. In any case, it is obvious to the most casual that modern civilization would be impossible without the services of the “iron man,” and that, like most good servants, the machine tool industry has performed its service quietly and with a self-effacing competence that might easily result in being overlooked or discounted unreasonably. Little Luxemburg’s Big Steel Industry Immediately previous to the World War, Luxem- burg was the fifth largest iron producing country of the world, but the war led to a sharp decline in this output while political changes effected by the treaty of Versailles entailed a complete reorganization of the industry by the transfer of ownership of many of its plants, the regrouping of allied, and the adjustment of opposing interests, and by bringing about conditions which have forced the industry to seek new markets and adjust its business to entirely new conditions. The Grand Duchy has not yet reached its pre-war production either in mines or mills, but the fact that its furnaces and steel mills increased their out- put in 1921 over 1920 by nearly 50 per cent and that the output in 1922 shows a much larger increase indi- cates that the industry has regained its vitality and that its position in the iron and steel world merits the careful attention of all possible competitors, says Con- sul General George E. Anderson, Rotterdam, in a re- port to the Department of Commerce. This impression is deepened by the fact that Luxemburg is now ex- porting its ferrous products all over the world and is rapidly establishing the output of its factories in countries where its products have never before been known. On an average something like nine-tenths of the iron and steel products of Luxemburg are ex- ported. Two of the principal companies have formed a selling company to which they have conceded a mo- nopoly of the sales of their products while a third company is partly owned by the sales company. This organization in the past few months has completed agency arrangements over nearly the whole of the principal iron and steel consuming countries of the world. Sales to Germany and Austria have declined, but the purchases of Belgium, Holland, and Great Britain have increased materially. The chief develop- ment of the trade is through connections recently made in Brazil and the Argentine, the East Indies, Japan, and China. Variety of Electric Brass Furnaces Not less than 80 different types or different makes of the same type of electric furnaces have been used, tried or suggested for melting copper, brass or bronze, aluminum or nickel alloys. Descriptions of these differ- ent types of furnaces are contained in Bulletin No. 202, just issued by the Bureau of Mines. The American Industrial Furnace Corporation, 10 Post Office Square, Boston, has moved to 422-428 Unity Building, 185 Devonshire Street, that city. ° Present Adjustment and Trend of Wages Analysis of Railroad, Manufacturing and Coal-Mining Wages, Cost of Living and Wholesale Prices—Wage Trends Ever Upward BY CHARLES M. MILLS HE crux of the present industrial situation lies in equitable adjustment of wages in a period of gen- eral deflation. The question of collective agree- ments, working conditions, hours, and even seniority, while seeming to many as the most important feature of the present industrial crisis, are all, in reality, sub- ordinate to the wage problem. If one has read the industrial news carefully for past months, he has seen that the wage issue has predominated. The United States Railroad Labor Board reduced the wages of rail- road shopmen to levels showing net increases ranging from 39 to 78 per cent over 1917 levels, and the most disastrous shop strike of recent years resulted. The maintenance of way men, upon the very heels of the recent curtailment of their rates by the Railroad Board, petitioned for new increases ranging up to 100 per cent. The bituminous coal strike ended by means of the Cleveland agreement, which maintains the war-time Fig. 1. Trend of Hourly Wages from 1840 to .1950. The heavy line represents figures compiled on a currency basis throughout. The three light lines show trends based on 10-year, 20-year and 70-year averages rates of the last collective contract until April, 1923, and adds presumably a billion extra dollars to the coal bill of the public. The non-union operators accordingly an- nounced 40 per cent wage increases in their collieries. The anthracite coal strike terminated by carrying over war-time rates until Sept. 1, 1923. The textile strike in New England was settled by a continuation of the rate of wages paid in March, 1922. The United States Steel Corporation and prominent independent steel com- panies recently announced a 20 per cent increase in wages. The wage question, therefore, more than ever before, lies at the heart of the industrial world. The average member of the largest but entirely un- represented group involved—the public—is completely bewildered. What are the facts? Has the period of wage and price deflation ended? Have we entered a new period of inflation and, if so, what are the causes? Are the reactionary forces in capital and the radical groups in labor forcing an artificial economic issue upon the entire nation? Price Deflation An analysis of the official governmental figures cov- ering wholesale and retail prices in the United States 7 throws considerable light upon the situation.* The peak of wholesale prices was reached in May, 1920, when the index number stood at 247, or 147 per cent above 1913. A steady decline occurred from the peak down through January, 1922, when the index stood at 138, or 38 per cent above 1918. The total decline, there- fore, from the peak to the end of the decline in Jan- uary amounted to 44.1 per cent. Since January there have been a steady increase in wholesale prices, ex- pressed in index numbers as follows: WORUUOEY oc cc ccctucenctacuns 141 WOOD 2 cc cvvnaceseutdsueeaes 142 ee Pe ee ki 143 BAS nc spavds cuca bdévenwedsdne 148 EE nc babs cctheneeteberounan 150 SU netic 6c ctw neces Cnwees bee 155 PP ee 155 BemteMARe ck kee cnveccvsecens 154 OUSSOEE. oc cae eusccateeeusse es 156 In other words, the period of wholesale price defla- tion ended in January last, with a total decline of over 44 per cent from the peak, while steady increases have occurred since the beginning of 1922. Cost of Living The peak of retail food prices as determined by the Bureau of Labor Statistics was reached in June and July, 1920, when the index number stood at 221, or 121 per cent over July, 1914. A steady decline occurred down through May, 1922, when the index number stood at 140, or 40 per cent above 1914. The total decline, therefore, from the peak to May, 1922, amounted to 36.6 per cent. Since May the index numbers of retail food prices have been as follows: DOGG 2s. castes és dteadu eondae 141 SU icpachdeus cont svavemtume 142 DEE ind nde aoc wv ihe cehekea 141 CNG. 6 os kes covevtdbons 140 QO “egies coc vend cksuseen 143 did 4.4 60 p tte ted 145 We may conclude, therefore, that so far as wholesale *Bureau of Labor Statistics, Washington: Whole- Prices. sale Prices; Retail Food : t if 4 ' iy ee ere oy prices and retail food prices are concerned, the period of deflation temporarily ended during the first half of 1922, and that at present we are in the midst of a period of rising prices. The peak of the national cost of living, as deter- mined by the Bureau of Labor Statistics, occurred in June, 1920, when the index number stood at 216.5, or 116.5 per cent above 1913. By September, 1922, the index number had fallen to 166.3, or 66.3 per cent above the pre-war level. The total decline was slightly over 23 per cent. In passing, it is interesting to note that while whole- sale prices declined over 44 per cent and retail prices over 36 per cent, the cost of living has declined only a little over 23 per cent, and that the latter is practically stabilized in response to higher prices. So far as prices and the cost of living are concerned, we have definite- ly ended the period of deflation and have entered upon a new era of higher levels. Wage Deflation Available sources covering wage deflation are ex- ceedingly limited, as most data are given for specific periods only, and do not cover trends from the same sources over a period of years. The best sources for wage information dating from 1914 are the trends cov- ering 1648 New York State firms gathered by the New York Department of Labor and the reports of the Na- tional Industrial Conference Board. Data covering New York firms include only weekly earnings of both male and female workers combined. Based on June, 1914, the peak of weekly earnings in New York State was reached in October, 1920, when the index number stood at 228, or 128 per cent above June, 1914. Steady declines took place during 1920 and 1921, so that in February and April, 1922, the in- dex number stood at 190, or 90 per cent above June, 1914. The percentage of decrease during the period of deflation amounted to 16.7 per cent. Since April in- creases have occurred, so that the index numbers for the latest months are as follows: May, 194; June, 196; July, 195; August, 198; September, 202. So far as New York State figures are concerned, the period of wage deflation has recently ended, with a decline of almost 17 per cent from the peak, while recent months have witnessed increases. It must be remembered that these figures include the wages of both sexes, of both office and shop workers, and of workers in such large cities as New York, Buffalo and Rochester. Data published by the National Industrial Confer- ence Board cover hourly and weekly earnings of male common labor, male skilled labor and women, in 26 manufacturing industries. The data cover identical sources from 1914 and include over one million wage- earners. The reports are the most authentic and com- plete record of wages at the present time. The last study (Research Report No. 52) covers the period from July, 1914, to January, 1922. Figures from the latter period to the present are not included, but would unquestionably show status quo levels or slight in- creases. The peak of hourly earnings was reached in Sep- tember, 1920, when wages were 156 per cent above July, 1914. The decline up to 1922 amounted to 22.4 per cent, leaving hourly earnings 98 per cent above the 1914 level. The peak of weekly earnings was reached in July, 1920, when wages were 140 per cent above 1914. ‘The decline up to 1922 was 25 per cent, leaving wages 80 per cent above 1914. The last six months of 1921 show practically stationary levels in hourly and weekly wages, and point to the end of deflation. Résumé of Deflation in Manufacturing Wages If we may take the above sources as a guide for analysis we may assume that manufacturing wages have declined from 20 to 25 per cent from the peak. The period of decline in wage rates and earnings has come to a close, with rising scales marking the pres- ent situation. With these considerations in mind, it is interesting to pass on to railroad and mining indus- tries and examine their wage levels in relation to manu- facturing. The conditions of work, hours, training, availability of wage data, etc., in factories, mines and THE IRON AGE January 4, 1923 on the railroads, are so variable that direct comparison is impossible, yet there are certain general differences that may be emphasized. Wages of Railroad Shopmen The rail strike of shopmen arose as a result of wage reductions ordered by the Railroad Labor Board, effec- tive July 1, 1922. The shopmen struck as a result of their feeling that their wages were inadequate and below a reasonable standard of living. As the original issue over wages has since been overshadowed by the question of seniority, it is worth while to turn to De- cision 1036, Docket 1300, of the Railroad Labor Board and note the information carried in Table I. NUELONNONaGeeUONoOUONObODeCUHECOOOELAgEOOOOREORONDAOENREENRE onRenSONRpOceeeNOENOOeeRD CAROL OGOSN igcaooeG ct inesaanensnoNNeso teaaON Table I.—Comparative Purchasing Power, Earnings Common Laborers and Workers in Shop Crafts at Specified Times*® Per Cent Increase PerCent inCostof Per Cent Amount Increase Living Increase in of Over Over Purchasing Hourly December, December, Power of Common Labor: Rate 917 191 Earnings December, 1917.. 19.3c. cuss ape vere January, 1920.. 37.3 95.3 40 39.5 May, 1920.. 46.3 139.9 52 57.8 July, 95h... “eeee 95.3 26.7 54.1 Present decision... 32.7 69.4 17.2t 44.5 Shop Crafts, Machinists: December, 1917.. 50.5c. hig kon Lass ouvs January, 1920.. 72.3 43.2 40 2.3 May, 1920.. 85.3 68.9 52 11.1 July, Eeehes “Tie 53.2 26.7 20.8 Present decision.. 70.3 39.2 17.2¢ 18.8 Carmen: December, 1917.. 37.7c. exe os January, 1920.. 68.0 80.4 40 8.9 May, 1920.. 81.0 114.6 52 41.2 July, 1821.. 73.0 93.6 26.7 52.8 Present decision... 64.4 70.8 17.2t 45.7 *Reprinted in the Monthly Labor Review, July, 1922, page 95. +Latest available figure, March, 1922. vvNNNNNUNDULGUNDDOUENDTODOOONONDOTOOLAUOEOLONODILORDOCAEOUONODOGNEONOELAOONONAonOOONSDON NENA: OUSULONUNLIEDL ACAD AONBSUONEREOREOONRRED SONU OECEN OOOOH Li ieneenoNOeneNNONND It would not seem that, with percentage increases ranging from 39 per cent to 71 per cent over Decem- ber, 1917 (note that these are increases based not on 1914 levels, but on December, 1917) and with the in- crease of purchasing power of earnings ranging from 18 per cent to over 45 per cent, the railroad shopmen were unjustly treated or that the Railroad Labor Board had made an unfair decision. The National Industrial Conference Board, in Re- search Report No. 52, found the average hourly earn- ings of 143,274 skilled foundry and machine shop work- ers in 1353 plants in 42 States on Jan. 1, 1922, to be 56.1c. The wage rates of 70.3c. per hour for machinists and 64.4c. per hour for carmen, established under the present decision of the board, would therefore seem to be considerably above the general national average of skilled workers in foundries and machine shops. Un- questionably there might be instances were local rates would be higher than those established by the board, but the history of recent “farming out” methods em- ployed by the railroads would seem to refute such ex- amples. By comparison, therefore, with the rates established in 1917 with the national cost of living figures, and with such data as are available covering similar work in shops outside of the railroad shops, the present wage rates of railroad shop workers are at least fair and equitable. Coal Wages One of the most salient features of the recent coal strike was the lack of reliable wage data. A multitude of figures were presented by both sides, but the major- ity of such information was not generally considered satisfactorily representative—the data being generally of a selective nature. At least one factor is evident at present—the recent strike resulted in a continuation of old wage levels—status quo wages being continued until 1923. In comparison with widespread declines in manufacturing wages, and more moderate reductions on the railroads, the coal industry stands to-day on the highly inflated peaks of the war period. Sooner January 4, 1923 or later, the coal industry must submit to the inevitable, as no one basic industry can permanently occupy a falsely expanded position in the face of world-wide economic forces. The paucity of trustworthy information, the sea- sonal character of the industry, overproduction and overdevelopment make any discussion of wages in the bituminous industry impossible. The public must wait for such materia] to be gathered by the newly appointed United States Coal Commission. In the anthracite industry one company, operating 11 collieries and employing over 6300 men, stated that in October, 1921, average hourly earnings of all work- ers were 70.68c., an increase of 153 per cent over June, 1914.* At this time, the average hourly earnings of all inside labor were 75.2c., common labor receiving 61.5c., semi-skilled labor 67.8c., skilled labor 71.38c., and contract miners 88.76c. All outside labor received 57.1c., average, divided as follows: common labor 53.65c., semi-skilled labor 57.98c. and skilled labor 66.84c. If we may accept these figures as being fa