The Iron Age 1929-01-03: Vol 123 Iss 1

EDITORIAL STAFF Editor Managing Editor EB RO A CE c. Baur General Advertising Manager Chicago . E. Wricut E. F. Coxe ESTABLISHED 1855 Pittaburgh i R. G . H. GERKEN " Pittsburgh Associated Business Pape:s, Inc. CHARLES LUNDBERG Detroit and 239 West Thirty-ninth Street, New York San oston Frank, President Griffiths, Secretary New York St. Contents for JANUARY 1929 Steel Industry’s Progress Last World Iron and Steel Will Satisfied This Year with Volume New Record for Ingots and Castings, with and Stability 1928 Share United States Per Cent Where Steel Went Last Additi cording States and Industries That Steel Making Increased 830,000 Tons—Considerable Expansion Forecast Economist Looks for Less Dr. Haney Some Recession from Record Canadian Output Greatest Since Heights 1928 What Consuming Channels Chronology Metal Trades for 1928.. Buildings and Construction, Automobiles, Airplanes, Export, Dirigibles, Agriculture, Jobbing, Shipbuilding, Railroads, Oil Pro- ducing, Ete. Metallurgy, Machining, December Pig Iron Production........ Developments Steel Research and Steel Making, Blast Furnace Practice, Gray Iron and Steel Iron and Steel Foundries, the Machine Tool Field, Drop Forgings, Die Castings and Stampings, Non-ferrous Metallurgy This Week’s IRON AGE Brief.... Management and Self-Government Business, Sales Forecast- Non-ferrous 109 ing, Position Smaller Companies, Water Shipments Iron and Steel, Market Re- search, Stability Training Foremen, Trends Non-ferrous Markets, PRICES FOR SIXTEEN YEARS, with Owned the United Publishers Corporation, 239 West Building. Detroit: 7338 Woodward Ave. Cincinnati: 408 39th Street, New York. Pearson, Chairman. Union Central Building. Buffalo: Ellicott Square. Frank, Pres. Musselman, Washington: 536 Investment Building. San 320 oe Stevens, Secy. aad Treas. Market Street. BRANCH OFFICES—Chicago: Otis Building. Pittsburgh: Subscription Price: United States and Possessions, Mexico, f Park Building. Boston: 425 Park Square Building. Phila- Cuba, $6.00; Canada, $8.50; Foreign, $12.00 per year. delphia: 1402 Widener Building. Cleveland: 1362 Hanna Single Copy cents. Copyright, 1929, Iron Age Publishing Co. mre we | i. a = | ‘ ra ~ ‘ = Air chucks release THE IRON AGE January 1929 Tool rotating type. Individual spindle Feeds and corporated turret with ESTABLISHED 1855 THE IRON AGE New York, January 1929 VOL. 123, No. Steel Industry Will Well Satisfied 1929 Maintains the Volume and the Market Stability That Have Made 1928 Wonderful Year Giving repeated surprises the volume and wide scope demand, 1928 made new peak steel. Its ingot output 50,400,000 tons was nearly 3,500,000 tons above that 1926, which had been the record year. Reversing the movement 1927, prices advanced, though unevenly. bars, shapes and plates, which together are over per cent the total output, the average price the year end was about ton above that the opening. Each quarter saw definite effort producers lift the market—with better success the heavier than the lighter products. Earnings improved, but owing the large carry-over low-priced tonnage from 1927 most the betterment was the second half-year. year since the war has had well sustained operation mills. Summer output kept remarkably. The year’s earnings owe much the lowered peaks and raised valleys the production curve. pig iron, after the decline $2.50 ton 1927, there was little room for more, but the market kept sagging until mid-August, when THE IRON AGE com- posite was $17.04 (the lowest since November, 1915) against $17.54 Jan. Under large buying August and later, prices rallied, and December were $1.50 above the low. Output was 38,000,000 tons; for 1927 was 36,566,000 tons. its forecast 1928 steel year THE IRON AGE said the issue Jan. that was expected compensate for some the recession 1927. And 1928 met that expectation and more. goes down annus mirabilis the American steel industry—wonderful its high production peak, the stability the market under increased output, steadiness demand which permitted unusually uniform and thus more economical operation mills, and finally the almost unprecedented scale steel output the summer months. Rated figures, 1928 was per cent production year, while 1927 was per cent year and 1926 per cent year. For the greater part the year the industry showed degree prosperity that distinguished from most others, causing repeated references business reviews its exceptional position. that connection mention should not omitted the fact that 1928 made new record output spite poor railroad demand; but that respect simply emphasized what has been seen other recent years the growth steel uses constantly widening circle. Promise for the New Year Entering 1929 the steel trade looks for continu- ance large-scale demand. December production has been beyond expectation and business sight points active four months. none the lines consumption that have made heavy demands upon the mills the past year any falling off now in- dicated apart from construction. The railroads may make for any decline there, seeing that for four consecutive years their equipment purchases have been disappointing. the late weeks 1928 car & | | | orders and car-building programs came out the way that many had looked vain see months. The compensation 1928 for the shortcomings 1927 steel year was notable the automobile industry, which took per cent last year’s output, whereas its highest previous percentage was 14.5 1926. view that high record and the way the steel industry has halting receding somewhat after new peak, there little expectation that 1929 will exceed the year just ended. Steel Demand More Uniform One factor steel producers’ expectations 1929 the confirmation the past year has given the belief that the industry has been outgrowing old habits; that steel has taken such place modern life that, barring panics and calamities nature, demand for will well sustained under ordinary conditions. same time the conviction has grown that further guard against the old-time fluc- tuations there must concerted effort steel makers extend the uses their products, study what they and their customers can increase the demand for the manufactures the latter. President Schwab and Direc- tor George Verity both broached this subject the October meeting the American Iron and Steel Institute. More steel producers than formerly are alert the possi- bilities such effort, and that fact one the grounds for optimism regarding 1929. Price Changes Much the Fore feature 1928 that distinguishes iron and market annals the large part taken price advances and attempted advances. year since the “feast and famine” régime steel, when booms brought many ad- vances and depressions brought many declines, have the market summaries THE IRON AGE revolved such extent about the price factor. Producers set out get prices with profit them, after the other sort experience 1927. The expedient most resorted to, and one that former times was now and then used good effect, was the announcement advance and then the free booking immediate business the price pre- viously prevailing, putting time limit the receipt specifications lower-priced business. There was varying success getting prices this way. Producers were helped more than they expected, their efforts mend the market, the way which demand held up. The psychological effect giving out that for coming quarter prices would ton higher heightened when the buyer finds that other consuming lines than his own are taking steel freely. That quite different from situation which steel production goes because sellers are pushing output get cost down ADVANCES THE “BIG PRODUCTS Interest naturally was greatest the advances plates, shapes and bars. They are widely used, and to- gether have made per cent the total output rolled steel the past half dozen years. Commonly they sell the same price, though bars times bring more than the other two, and there any weakness more pronounced plates, plate capacity over- built. the opening the year the market for the three products was 1.80c, the latter price having been announced the Carnegie Steel Co. Nov. 10, 1927. Each quarter saw new and higher price. Together the advances announced totaled ton and the net obtained was about ton. UPS AND DOWNS SHEETS Sheets also were conspicuous the price comment the year. There had been sagging market most 2—January 1929, The Iron Age 1927, and its close was the common basis for No. black sheets. early February automobile body sheets stock strips also went $3. black sheets 2.90c be- came the minimum good many mills. March showed weakening. early April 2.80c was done and the middle the month Business fell off April and further declined May, and prices suffered. June, for No. 24, the market was lower than any time since March, 1916. the fall was established and early December was announced number mills the basis for the first quarter business. notable change the sheet trade was the reduction from per cent per cent the discount allowed the mills for payment days. The new discount, though protested many buyers, became effective Oct. The large call for sheets from the automobile industry, well from agricultural implement works, made 1928 unusual sheet year. Output was close that the record year 1916, exceeding that both 1923 and 1926, which came next the war year. The prophesied inroad wide strips upon the sheet trade has not been realized. Strip competition has had more effect sheet prices than tonnage. WIRE, PIPE AND OTHER PRODUCTS Wire prices showed little irregularity. March appeared that distributers nails were underselling the mills, which late 1927 had raised prices and re- vised extras. the second quarter there was widening spread quotations different producers 10c. more keg below the $2.65 basis the opening the year. August demand picked and wire plants operated per cent, the highest rate months. December wire mill prices were advanced ton buyers other than jobbers and new schedule was intro- duced which makes jobbers’ prices ton less than those other carload buyers. merchant pipe the market was subject more weakness and price variation than the previous year, but the only formal change came April, when the Na- tional Tube Co. withdrew the extra discount per cent which was made effective Oct. 1927. Strip prices were advanced the first quarter ton. March some cold-rolled strip mills got high ton more current business than the De- cember, 1927, basis for early 1928 delivery. May, sheets weakened, hot-rolled strips declined ton. November large buyers hot-rolled placed first quarter contracts concessions, though previously new bases and extras had been adopted representing ton advance from third quarter prices. Cold-rolled strips were established about the same time 2.85c., Cleveland and Pittsburgh, but buyers covered before the advance. Cold-finished bars and shafting, after some shifting the first and second quarters, were advanced ton August, restoring the base 2.20c., Pittsburgh. Full Demand, Widely Distributed indicated introductory paragraph, the breadth the demand for steel and the way which held from month month, especially the summer, exceeded the most optimistic estimates the year’s opening. Railroad and oil tonnages were not satisfactory. But the building volume was remarkable, the year being notable for the number large contracts for structural steel. The total fabricating contracts closed the months was 3,041,250 tons, which compares with 2,805,000 tons 1927 Nov. 30. Estimating December, the year showed approximately 3,250,000 tons, per cent above the high record 3,060,000 tons 1927. Business 7 reinforcing bars was considerably greater than 1927 and also went quite beyond that 1926. Frequently the market reviews the year the large steel orders from agricultural implement works were mentioned one the compensations for the re- stricted buying railroads. was probably the best year the steel industry has known for that trade, and with legislation the making that expected add materi- ally the farmer’s buying power, the consumption steel farm equipment should large 1929. CHANGES THE PIPE TRADE Pipe mills fared badly, the oil industry, spite large orders for pipe lines and oil storage tanks, making even smaller demands upon the steel companies than 1927. For considerable period mills supplying the oil THOUSAND GROSS TONS PER WORKING DAY record. appears that the combined sheet and tin plate production 1928 also made new record. Not alone did the automobile industry take more sheets than ever, partly because the average per car has increased, but the sheet mills have profited increasingly their propaganda work recent years extend the use their product both new and old fields. this respect the sheet manu- facturers have set example that may well followed other steel lines. For the greater part the year the National Associa- tion Sheet and Tin Plate Manufacturers (now part the National Association Flat Rolled Steel Manu- facturers) showed production running well capacity. March, September and October was slightly above rated capacity. Unfilled orders, which were 745,000 tons the beginning the year, ranged from 500,000 by rili 1925 192 1928 Fluctuations Daily Average Production Steel Ingots and Pig Iron, During the Past Eleven Years. While generally parallel, the curves are farther apart than formerly, much farther than 1921, for instance. They are based monthly ingot figures the American Iron and Steel Institute and monthly pig iron figures gathered IRON Ingots have gone into new heights, far above the great record 1926. Pig iron 2.6 per cent above the average the five years 1923-1927 country trade ran about per cent capacity. Prob- ably year has seen many line-pipe contracts large size. The total those made public was 756,000 tons and the aggregate probably ran close 1,000,000 tons. notable feature this business was the large amount electrically welded pipe. Three orders for this product were for more than 100,000 tons each. diameters in. and larger seems have taken permanent place the pipe field. The speed the process permits outputs several times those possible furnace lap- welding. Another development the year was the increasing volume orders for seamless pipe for oil lines and for oil well drilling, the displacement the lap-welded product, indicating closer approximation than hereto- fore the production costs the two products. More marked than previous years was the lessened demand for wire nails. Productive capacity evidently more than twice great needed for present-day re- quirements, since paper cartons have displaced wooden boxes for many uses. ACTIVE YEAR SHEETS The prosperity the automobile builders and the ex- ceptional activity manufacturers agricultural ma- chinery did much for the producers sheets. Likewise was great year tin plate owing the exceptional pack canneries. The sheet output made new record wide margin, close 5,000,000 tons, against 4,565,000 tons, the production 1926, the previous high 550,000 tons after the first quarter and were 565,000 tons the end November. RAILROAD BUYING DISAPPOINTING Capital expenditures the railroads for new equip- ment and additions and betterments totaled $650,000,000 1927, and that year was about per cent below 1926. The amount devoted new equip- ment 1928 was $215,000,000 compared with $288,700,- 000 1927, decrease $73,700,000, 25.5 per cent. The number freight cars ordered for domestic rail- road service the past year was 51,200, decline about 20,800 from the previous year. Locomotive sales for domestic service also suffered, totaling only 503, against 734 the year before. The railroads 1928 in- stalled service 57,582 freight cars and 1333 locomotives compared with 75,386 freight cars and 1955 locomotives 1927. More specific reference stee] demand 1928 im- portant lines consumption made articles other pages covering construction, railroads, and the oil and automobile fields. The automobile percentage the total steel output indicated graphically the columnar exhibit pages and was the highest record, the estimated output motor cars and trucks being 4,380,000, comparing with 3,393,887 1927 and 4,298,759 1926. Unparalleled Outpouring Steel Steel production last shown the heavy black curve above, has parallel any the post-war years The Iron Age, January | shown the graph. The 1928 ingot output was not only remarkable for its record size, but also for exceeding unprecedented amount the output pig iron. against about 7,500,000 tons the largest gap between the two other years, the difference last year was about 12,400,000 tons, indicating the use scrap mak- ing scale never before known. estimate the 1928 production steel ingots 50,400,000 tons and that steel castings 1,250,000 tons (against 44,935,000 tons 1927), making the 1928 total ingots and castings about 51,650,000 tons. The high rate steel production the summer months noteworthy feature the ingot curve. The March, 1927, output ingots was outstanding record until October last year, when new peak was reached 4,647,891 tons. This about half the entire twelve months’ output Great Britain good year. the following table given the production ingots month month, according the statistics the Amer- ican Iron and Steel Institute. crucible and electric steel ingots being excluded: Daily Ingot Daily Ingot Months Production, Months Production, 1928 Gross Tons 1928 Gross Tons 166,945 September ....... 165,903 155,674 November ....... 163,822 Outputs steel ingots and pig iron are given below for 1928 and the preceding years: Steel Ingots Pig Iron, Steel Ingots, and Castings, Gross Tons Gross Tons Gross Tons 39,054,644 43,051,022 44,462,432 36,925,987 40,881,392 42,132,934 37,219,904 34,568,418 35,602,926 43,485,665 44,943,696 36,700,566 44,140,738 45,393,524 39,372,729 46,936,205 48,293,763 36,565,645 43,776,717 44,935,185 1928 (est.). 38,000,000 50,400,000 51,350,000 Lowest Pig Iron Price Since 1915 Pig iron made some unique records 1928. Its total production about 38,000,000 tons (including charcoal iron, ferromanganese and spiegeleisen) was the sixth size the history the industry, despite first quarter output which was the smallest for any first quarter since 1922. month except the first two did the output fall below 3,000,000 tons. The midsummer production was ex- ceptionally high, and the tapering off the end the year was less pronounced than usual, evidence which was the fact that the November daily output was the highest for any month since April, 1927, and was the largest any November since 1918. only five previous years was the 1928 production exceeded, and three these were the war years 1916, 1917 and 1918. Last year’s total compares with 40,361,146 tons, the all-time record 1923, and fell only about 1,400,000 tons below the next highest yearly production, 1916. Prices mid-year went the lowest since 1915, but recovered the late months point higher than any since the first half 1927. AGE composite average for July, 1928, was $17.10 (the low week being $17.04), declining from $17.73 February and March, ascending slightly August and more accelerated pace the succeeding months, reaching $18.59 Decem- ber, which was the year’s peak. However, the composite average for the year, $17.67, was the lowest for any year since 1915. TWENTY-THREE FURNACES ABANDONED Another development the year was the large number obsolete uneconomical furnaces scrapped. Twenty- 4—January 1929, The Iron Age three were taken off the list, many them sold scrap dealers. With gain only two new furnaces, the net loss for the year was 21, bringing the total furnaces the potentially “active” list 336 against 357 year ago. Present output being achieved with much smaller number furnaces than few years ago. For example, 1926, year almost record-breaking production, the number furnaces blast never fell below 213 and reached maximum 237, while 1928, with pro- duction only about 1,400,000 tons smaller, the fur- naces blast never was more than 198 and ranged from that figure down 169. The explanation, course, the greater capacity most the furnaces now use. The daily rate per fur- nace 1926, taking those active the first day each month, ranged from 460 497 tons; 1927 the range was from 484 516 tons, while 1928 the daily rate per furnace was from 515 560 tons. These figures demonstrate that the small-capacity furnace pig iron production longer the race. the 336 furnaces now remaining the active list THE IRON AGE, more than are considered obsolete and probably will not operated again except emergency. the furnaces abandoned 1928, were mer- chant and eight were steel company stacks. the merchant furnaces were the eastern Pennsylvania dis- trict, two Virginia, two western Pennsylvania, two Tennessee and one Chicago. the steel plant furnaces, two were Buffalo, two Youngstown, one eastern Pennsylvania, one the Shenango Valley and two Alabama. LITTLE NEW FURNACE CONSTRUCTION Aside from two new plant stacks and the re- building larger size merchant furnace, all the Chicago district, new blast furnace construction present contemplated. The two new furnaces added the list 1928 were the Fairfield stacks the Tennessee Coal, Iron Railroad Co. Fairfield, Ala., with rated 440,000 tons annually. The Hamilton the Hamilton Coke Iron Co., Hamilton, Ohio, was re- built and enlarged serve the plant the American Rolling Mill Co. Middletown, Ohio, with hot metal. The Neville Island furnace the United States Steel Corpo- ration was sold September the Davison Coke Iron Co. and will operated merchant producer. accompanying table gives the number and daily rate furnaces blast the beginning each month. The largest number was 198 June with daily rate 104,015 tons, and the smallest, 169, Jan. with daily rate 86,835 tons: Number Daily Rate, Number Daily Rate, 1928 Gross Tons 1928 Gross Tons Jan. 169 86,835 July 189 100,855 Feb. 185 96,640 Aug. 1... 186 98,445 Mar. 187 100,060 Sept. 1... 185 98,730 Apr. 197 103,215 106,755 May 195 106,145 Nov. 197 108,800 June 198 104,015 Dec. 194 108,575 merchant iron sales, the year made poor start. Competition was keen among merchant producers adjacent districts, and during considerable part the year steel producers with surplus iron disposed prices which many merchant competitors could not meet. This situation was pronounced the late spring. The growing dominance steel company iron the Val- ley district was shown sale large ton- nage basic iron drop 65c. ton, bringing the price down furnace, the lowest since 1915. Later the year, the steel companies Pittsburgh and the Valleys virtually withdrew from the pig iron market conserve metal for steel manufacture, and was this period that pig iron prices made their greatest | | J 4 te, ns covery, not only those districts but all sections the country. FURNACES WENT FAR AFIELD Furnaces nearly all districts reached out for more distributing territory, thereby adding price demoraliza- tion the first half the year. Buffalo furnaces invaded the eastern Pennsylvania district; Cleveland producers sold iron the Cincinnati district competition with Alabama, Tennessee and Ironton, Ohio, makers, and Lake Erie iron, shipped boat, was sold Chicago and other Lake Michigan ports. Water shipments increased. The movement from Buf- CENTS PER LB. July. Following slight dip November, the market turned strong again December, with prices ranging from $18 $18.50 Pittsburgh and $16 $16.50 eastern Pennsylvania. the West the price movements were less erratic. good deal the strength that extended all mar- kets the Eastern section the country had its begin- ning Pittsburgh. Steel companies that ordinarily have surplus pig iron sell virtually withdrew one time from the pig iron market, not only needing all their own production iron, but supplementing scrap large extent possible. Pittsburgh brokers reached out into all outlying districts for scrap, even competing 1919 1920 1922 1923 1924 1925 19% Fluctuations Over Post-War Years IRON Composite Prices Pig Iron and Finished Steel. The relative stability finished steel prices, when compared with pig iron, continues demonstrated. The highest finished steel composite figure during 1928 was per cent above the lowest; pig iron the divergence was 9.1 per cent. Since the peak early 1923, both trends have been downward. Finished steel has lost 15.3 per cent and pig iron 40.2 per cent falo New York State barge canal New England and the New York City district amounted 122,456 tons the season. Boat shipments from Lake Erie fur- naces Chicago totaled 25,000 tons and those Mil- waukee were about 15,000, and addition six cargoes were unloaded Muskegon, Mich. Pig iron imports, which declined considerably 1927 from the preceding years, may have increased slightly 1928, the total for the eleven months amounting 129,819 tons, compared with 133,068 tons 1927 and 445,773 tons 1926. Low prices this country and higher prices abroad were responsible large measure for the decline the past two years, though less degree the per cent increase the tariff, which went into effect 1927, and the anti-dumping duty assessed against German pig iron and only recently revoked, influenced the down- ward trend. unusual feature the import movement was the receipt Chicago English hematite iron, brought boat across the ocean and through the Great Lakes. Scrap Recovered From Early Depression Serap prices during most the year were low level, and the supply the first eight months seemed ample for all requirements. August and September, mills began demanding heavier shipments low-priced orders, and brokers scrambled buy, with the result that prices turned sharply upward. Oct. heavy melting steel had reached $17 Pittsburgh and late that month rose $18, gain from the low point $14 with Buffalo mills for some the production that dis- trict. While some extent the apparent scarcity the lat- ter months the year was created brokers their rush cover orders against further rises, two new factors entered the situation. One was increased purchases Steel Corporation plants, which previous years had not been regular users outside scrap, and the other was the extraordinary demand from abroad. the months ended Oct. 31, 462,700 tons had been exported, compared with 201,055 tons the corresponding period 1927. the end 1928 heavy melting steel and compressed sheet steel were selling the Pittsburgh district de- livered prices equal higher than basic pig iron, condition which probably will furnish its own corrective. Water Shipments Increase effort surmount barriers set the aboli- tion Pittsburgh plus, steel producers took greater ad- vantage water transportation 1928. Among the un- usual cross movements were shipments steel from Buf- falo Chicago and Detroit the Great Lakes; trans- portation wire products from Pittsburgh Minne- apolis via the Ohio and Mississippi rivers and heavy load- ings pipe and other products from Pittsburgh mills Memphis and New Orleans. Iron and steel shipments the Ohio River the months ended Nov. were 1,162,445 tons, about 000 tons excess the tonnage moved during both 1926 and 1927. Some this was inter-plant movement, The Iron Age, January 1929—5 * 705 rt. he al- cet re- but three Pittsburgh companies shipped approximately 300,000 tons pipe alone Memphis and New Orleans during the year. With storage facilities Memphis, which center for nine railroads, steel companies have been able serve the South and Southwest more expe- ditiously. The cost transporting steel water from Pitts- burgh Memphis, including both the handling and in- surance charges, per ton against all-rail rate $11.20, but the difference not clear saving, since many the barges come back empty. However, there has re- cently been some return haul fluorspar from southern Illinois One the striking water shipments the year was nearly 40,000 tons structural steel from Buffalo Chi- cago. Detroit automobile manufacturers received entire steel bars rolled Buffalo mills. Pig iron shipments water also increased. Cargoes from Buffalo and Cleveland furnaces, totaling least 50,000 tons, were received Chicago, Milwaukee, She- boygan, Wis., and Muskegon, Mich. Official figures give the total pig iron moved down the New York State barge canal 122,456 tons, which all but small portion originated Buffalo, the remainder Cleveland. ad- dition, about 100,000 tons was shipped water routes other than the New York State canal from Eastern fur- naces. The Everett, Mass., furnace sent several ship- ments large consumers the Delaware River near Philadelphia. Upward 125,000 tons scrap was shipped from Detroit Buffalo boat. Large-Scale Consolidations More consolidation steel companies was expected 1928 than actually came pass. the last day 1927 was announced authority that the Youngstown Sheet Tube Co. would merge with the Inland Steel Co., long the conspicuous independent the Chicago district, which Eastern interests had more than once sought acquire. However, March, when negotiations were thought about completed, developed that the parties interest could not agree some important features the pro- posed merger and therefore the plan was abandoned. its issue Jan. 1928, THe AGE told the forming the Empire Steel Corporation and its acquisi- tion six northern Ohio sheet mills—one each Mans- field, Cleveland and Ashtabula and three Niles. The new company has four 75-ton open-hearth furnaces, blooming mill, sheet bar mill, sheet mills and two jobbing mills, with annual capacity 400,000 tons finished products. Spang, Chalfant Co., Inc., which for just 100 years has operated the Etna Iron Tube Works, Etna, Pa., and the Standard Seamless Tube Co., Ambridge, Pa., were consolidated January under the name Spang, Chal- fant Co. Each has capacity 300,000 tons year. July the American Rolling Mill Co. acquired the plant the Ashland Steel Co., Ashland, Ky., adjoining the blast furnace the Norton Iron Works Co., which Armco had bought 1927. The two plants had long been operated jointly, the Norton furnace supplying hot metal for the Bessemer plant Ashland, which was connected with rod and wire mills. FURTHER MERGING PROBABLE The Republic Iron Steel Co. acquired August majority the stock Steel Tubes, Inc., the successor the Elyria Iron Steel Co., Elyria, Ohio. The Elyria plant had its principal product electrically welded steel tubing and also rolls strip steel. has bought 3000 4000 tons steel month, largely billets, the merger gives the Republic company outlet for that much its semi-finished product. Consolidation the steel industry may expected 6—January 1929, The Iron Age further. The present year, not unlikely, will see additional mergers, including the linking the Inland company with some Central Western Eastern interest. Today the Steel Corporation and four leading independ- ents control two-thirds the country’s output. Add seven more the list and the control per cent. not improbable that the will come down ultimately six or seven. Exports Increase, with Imports Stationary Last year this time were able report moderate increase iron and steel shipments from the United States foreign countries compared with the preceding year, and the same time report decline incoming shipments, owing mainly considerable drop imports pig iron. This year can show considerable increase exports, only portion which due the largely augmented outgoing shipments scrap. Imports have remained approximately station- ary, the gain months having been about per cent. Figures for the months show exports aggregating 2,384,301 gross tons, compared with 1,836,730 tons the corresponding period 1927; the gain has been cent. exclude scrap, which has reached 462,700 tons this year, against 201,055 tons last year, there still remains total 1,921,601 tons other iron and steel products exported this year, leaving gain nearly per cent. Correspondingly, imports have reached 629,301 tons the first months 1928, against 623,922 tons year earlier. Scrap was approximately the same the two years. Comparing the figures for rolled and finished steel, find the first months 1928 outgoing shipments amounting 1,607,239 tons, against 1,429,017 tons last year; the gain here almost per cent. imports about standoff, with 335,039 tons coming this year and 339,406 tons last year, drop per cent. Principal among the increases exports the first months 1928 are steel bars, including alloy steel bars, which showed gain 40,000 tons; plates, with 14,000 tons; black sheets, 20,000 tons; hoops, bands and strip steel, 11,000 tons; plain structural material, 38,000 tons; fabricated structural material, 19,500 tons; steel rails, 19,000 tons; barbed wire and woven wire fencing, 18,000 tons. Import items the months showed smaller changes than for exports. brought 9000 tons more structural shapes, 3500 tons more boiler and other plates, 7500 tons more sheets. One development the year was the beginning joint effort, large scale, develop American foreign trade iron and steel. cultivate markets abroad more effectively, the Steel Corporation and the Bethlehem company formed common export organization, the Steel Export Association America, thereby providing single outlet for per cent the rolled steel shipped out this country. WHERE THE CHIEF EXPORTS WENT has been the case for many years, Canada wes the largest buyer our products last year, taking per cent the total, against 38% per cent 1927 and per cent 1926. Shipments Canada the first months totaled 970,391 tons, against 700,486 tons the corresponding period 1927. This gain represented almost per cent. Japan took much more steel from this year than the year before; the total months was 345,913 tons, against 227,445 tons months 1927. This represents gain per cent. Japan took 14% per cent all our exports 1928, com- pared with 12% per cent the smaller total 1927. (Concluded page 118) 7 Industries and States Receiving Steel 1928 UBSTANTIAL gains were made 1928 almost all the principal categories steel production. Only rails was loss indicated, returns from com- panies making over 93.8 per cent the entire year’s out- put the United States, Production estimated 37,300,000 gross tons rolled steel, which the largest total ever made any year. This displaces the high-record 1926 total 34,819,- MILLIONS GROSS TONS 038 tons, which exceeds little more than per cent. other year has reached 33,000,000 tons finished steel. Estimates production are based returns from rolled steel makers, accounting for total 35,003,000 gross tons, about 93.8 per cent the estimated year’s total. This high rate returns indicative the spirit cooperation the industry providing, confidence, information broad value. The tonnage reported Diagram tribution Shipments from Steel Producers’ Plants 1928, (Rails Not Included) —-e_-_ Destination Steel Shipped 1928 (In Thousand Gross Tons) Tin Wire Bars Plates Plate Pipe Products OKLA. New England.......... 393 152 210 128 253 1,060 316 292 939 132 280 305 Pennsylvania ...... 1,440 1,113 934 646 109 521 258 3,309 1,954 1,949 2,360 959 1,343 910 1,157 325 414 556 402 289 278 Indiana ........ 182 226 167 107 Wisconsin ......... 286 213 North Central.......... 2,896 786 1,045 2,241 570 709 1,160 Southeast ............. 128 135 140 100 118 140 . 31 97 20 721 104 N.DAK South Central.......... 146 114 171 124 181 361 131 251 135 159 268 409 203 The Iron Age, January i Year Greatest Output, Took Lead Steel Consumption, With Per Cent, Against Per Cent Last Year. Railroads, formerly the largest outlet for steel, fell third place those companies was considerably greater than the aggregate tonnage all com- panies any preceding year. Moreover, larger proportion than ever before provided detailed classification distribution their shipments. This group accounted for 31,103,000 tons, 83.4 per cent the aggregate output, compared with per cent last year, 73.3 per cent for 1926 and only 65.5 per cent for 1925. The table the bottom these pages shows compos- ite the data furnished the industry. Territorial Distribution has been found possible this year indicate clearly the destinations large quantities steel products, not only general geographic divisions the coun- try, but even States. This has been shown both diagram for the total steel output (aside from rails) and table showing seven the most important prod- ucts. While complete accuracy cannot claimed for this territorial distribution, believed accurately indicative the destinations the various tonnages shown. One word comment should made. The analysis shows where the steel shipped from the steel mills went, but does not show the ultimate destination. Those States having large numbers intermediate mills working semi-finished steel, produced plants containing open-hearth Bessemer capacity, show disproportionately heavy amount compared with States having fewer none the intermediate plants. This Distribution Geographically Bars Shapes Plates New 5.6 4.2 North Central..... 41.3 29.0 23.4 1.3 1.9 1.5 Southeast ......... 1.8 3.9 4.0 South Central...... 3.1 2.9 Distribution Rolled Steel 1928, According Shipments Railroads (cars and locomotives) (track work).......... Fabricators and bldg. contractors. Concrete reinforcing Bldg. hardware and trim companies Automobile and parts mfrs....... gas and water Mining and lumber Agricultural equipment.......... Boiler and tank mfrs............ Machinery and hand tools....... Bolt, nut and rivet makers...... Pressed and formed metal mfrs... Furniture and stove makers..... Jobbers and warehouses......... Totals, companies fully Eight companies, not distributed. Amount Each Form Taken, Thousands Hoops, Track Bands Heavy Light Acces- Structural and Cot- Rails sories Plates Shapes ton Ties 0.1 538.6 226.1 235.0 8.4 0.1 101.9 202.3 144.7 1.5 1,964.5 1.6 688.3 16.2 2.5 32. 0.3 2.3 0.9 0.2 1,795.5 202.5 20.1 1.8 12.5 453.3 11.6 2.4 21.2 33.5 12.6 0.1 0.1 162.7 29.0 1,587.3 460.0 0.8 0.4 125.5 35.8 10.3 16.1 57.4 11.1 16.8 11.7 27.5 0.9 0.1 0.1 42.6 59.7 618.1 58.3 1.7 1.4 3.5 60.5 53.1 28.0 11.9 0.2 455.1 43.8 21.9 0.6 0.5 1.3 0.1 69.2 62.3 407.1 8.8 1.4 0.7 389.8 4.3 0.1 28.1 14.8 29.4 17.7 3.7 0.1 1.4 6.8 14.9 181.6 305.9 418.8 45.5 160.0 9.7 25.6 221.5 168.4 152.7 18.8 37.7 3.3 8.3 145.7 137.4 503.9 68.9 2,184.6 81.1 749.1 2,779.1 3,154.8 219.8 72.3 349.2 273.8 990.5 3.9 2,404.4 81.1 821.4 3,128.3 3,428.6 843.2 2,404 3,354 3,607 7,017 Var eral whi i ‘. d because the returns are based upon ship- ments the steel-producing companies and not upon shipments the final finishing mills. Motor Cars Took More Steel Than Railroads Automobiles, for the first time the history the industry, have taken the lead- ing place consumption steel. Careful estimates, added direct returns the manner described above, place the tive consumption per cent the huge total the year. This approxi- mately 6,700,000 tons steel. Building and other construction all kinds (except- ing that for the railroads) accounted for 16% per cent the total, about 6,150,000 tons. The railroads, which had held first position year after year until they were displaced building and construction last year, have now been relegated third posi- tion, with per cent the aggregate ton- nage, approximately 5,950,000 tons. Among the smaller but none the less im- portant outlets for steel production, first place after the “big three” taken the combination oil, gas, water, mining and lumbering, with per cent the total. This larger ratio than last year and equivalent that the large 1926 produc- tion. This indicates approximately 3,600,- 000 tons steel products. Exports last year were exceptionally large, reaching per cent the total output. estimated that the exports aggregated 2,200,000 tons. Agriculture, which placed per cent, was re- sponsible for similar tonnage. Various Forms Steel eral Groups States Wire Sheets Tin-Plate Pipe Products 3.9 3.2 2.8 43.8 48.7 29.5 29.0 28.9 15.6 37.0 0.7 6.6 5.4 1.7 2.6 4.5 4.2 3.2 33.9 9.7 2.9 13.6 9.0 6.4 Companies Producing 93.8 Per Cent the Year’s Output Gross Tons, Different Industries Black All Other Plate Black Tubes All Billets for Plate and and Wire Strip Other and Tining Sheets Pipe Products Steel Finished Slabs Tin Bars 207.7 73.5 25.2 3.7 144.1 6.8 5.2 0.8 7.5 18.0 149.3 49.2 133.0 43.3 50.7 0.1 5.0 117.2 9.1 46.7 19.6 0.2 81.3 159.8 760.4 88.5 187.2 45.1 1,165.2 22.0 27.9 0.9 12.6 4.4 11.4 5.3 0.2 88.9 21.7 495.1 20.3 10.6 2.0 1,224.1 4.0 30.3 0.8 29.4 2.0 12.3 3.9 7.4 46.1 10.6 0.4 0.3 57.6 29.2 19.8 26.0 20.9 37.0 0.4 95.4 12.5 0.1 27.2 226.0 63.2 2.0 6.1 0.2 4.7 46.5 1.9 0.4 86.7 5.0 0.6 264.8 11.0 30.7 30.5 54.3 389.9 932.2 371.9 26.2 24.9 24.4 327.9 237.2 200.5 138.4 10.5 99.0 6.6 113.1 797.3 143.7 419.6 205.9 51.9 654.0 91.9 544.9 641.9 228.5 66.3 128.4 1,867.0 2,266.2 1,252.5 667.4 1,140.6 1,081.6 5,389 4,548 3,139 Sheet and 918.4 163.2 +, for} Lom w mrt “1000 we Bars Maintained Their Leadership from Previous Years— Together with Sheets, Both Affected the Huge Motor Car Pro- duction, tered Gains, While Some Other Forms De- clined 1 4 = Skelp Totals 106.6 Less Activity Forecast for Steel Trade 1929 Some Recession From Record Heights Anticipated Economist—Year Starts Generally Excellent Basis DR. LEWIS HANEY Director, New UNIVERSITY BUREAU BUSINESS RESEARCH the year just closed, which business ac- tivity showed generally rising trend, there was fairly good recovery from the recession 1927. Expansion the automobile and copper industries was particularly notable. Industrial activity during 1928, however, averaged rela- tively little above the average for 1927. industrial production was about per cent larger than the pre- ceding year. Manufacturing production, largely influenced the automobile industry, averaged per cent higher; automobile production was actually per cent greater than the preceding year. The volume trade showed little change; wholesale sales were about per cent lower 1928 than 1927, and department store sales varied less than per cent. Two standard indexes business activity averaged lower than 1927—factory employment during the year ran 3.2 per cent behind, and railroad freight tonnage was least per cent smaller (see Fig. 1). While changes business methods may explain part these reductions, they are sufficient indicate that activity was not much above the preceding year many have supposed. Summary Year’s Developments Outlined Doctor Haney 9 The year 1928 was one upward trend business activity and earnings. the end the year industrial activity was peak levels. This true also and Those who form opinions from newspaper headlines may surprised this showing, but they are the same ones who saw recession 1927. The explanation lies the relatively low point which the year 1928 began and the rather moderate amount the expansion itself. October, 1927, manufacturing production was only 107 per cent the average for the years 1923-1925. During the next months increased 11.8 per cent. November, 1927, factory employment was only per cent the aver- age for 1923, and increased only per cent during the year. Car loadings rose 7.5 per cent 1928 and wholesale trade 4.4 per cent; department store sales actually decreased and November, 1928, were about 0.3 per cent lower than year ago. The biggest expansion occurred credit and specula- tion, which the more remarkable that there was already extended position the beginning the year. Total loans and discounts the member banks increased per cent. Brokers’ loans increased per cent. Stock prices rose from per cent. The volume trading stocks increased enormously, the number shares (51,000,- 000) traded November, 1927, being less than one-half the steel production. this high activity was accompanied strained credit and high money rates, while commodity prices were tending sag (notably farm prices), the coming some reces- sion 1929 indicated. The year 1928 was marked great inflation the stock market, while business was prac- tically free from this malady. The outstanding feature the year was the extraordinary activity stock speculation and the most extensive bull market history, together with abnormal diver- sion funds into loans brokers and dealers securities. notable characteristic was the low return invested capital, measured yields high-grade bonds, and the high cost short- term money. the second half declining trend bond prices and two violent breaks stocks, with demand loans running per cent and over, indicated that the final stage was near. The outlook the beginning 1929 less favorable than was year ago, for business peak and not the beginning recovery, was January, 1928. Some time during the year there probably will come business recession, the degree depending the promptness with which the necessary readjustments are begun. Reduced building activity and over-produc- tion automobiles seems likely. Over-production pig iron near. The absence inflation business, however, should make any recession moderate and should facilitate recovery. = = 10—January 1929, The Iron Age t 7 7 | 7 7 | q = | 115,000,000 shares bought and sold November, 1928. Along with expansion the volume bank debits soared, amounting November, 1928, nearly per cent more than the same month year ago the same time with this fearful enlargement the brokers’ loans account, commercial loans increased $485,000,000. And the country lost about $500,000,000 gold. is, therefore, wonder that money rates rose toward the end the year levels which had not been attained since the crisis year 1920. the end, spite sharp reaction the stock market, find industrial activity, even allowing for normal growth, approximately the peak levels 1923 and 1926. Stock prices are still very high, judged any important step toward the redistribution the world gold supply was effected. This marks prog- ress toward the adoption the gold standard dis- tinguished from the gold exchange standard. Much, however, remains accomplished this direction. 5.—Great progress was made methods produc- tion and marketing. Operating expenses were re- duced, allowing profits made lower prices. The increased efficiency railroad operations was notable. Farmers Received More Goods for Crops the calendar year 1928 the farmers made better living than 1927 (Fig. 3). During the first half the year farm prices advanced and the farm dollar gained normally large volume credit, and money rates promise remain tight for some months. Better Business Bases Evolved URING the year, considerable progress was made toward improving business fundamentals, although important unsolved problems credit and banking practice developed. Among the business improvements may list the following. 1.—Increased control trade organizations, copper, sugar, textiles and several others. Many merg- ers were effected, some which probably are desir- able. may also said that more efficient govern- ment cooperation with business was displayed. 2.—Further recovery was made number the nation’s backward industries, including oil, cotton textiles, rubber tires and railroad car building. The copper industry completely recovered and became one the more profitable lines. this connection may said that the basis for récovery the more de- pressed sections the country was laid, and near the end turn for the better appeared the Southeast and New England. contrary the expectations good many observers, showed rising trend (Fig. 2), and export markets were important factor the pros- perity the automobile, machinery and electrical appliance industries. past standards. The security markets still retain ab- purchasing power. Marketings were large, also. the 160 H for the First Lower Than 1927, bank 130 BANK specula- made the high- est record ever w known, averag- Average RAILROAD ing per cent TONNAGE 1926 1927 1928 second half, however, the price situation became less favor- able, particularly the case grain and hogs. The total value the chief crops for 1928-1929 less than for the previous season, but dairy products increased value. The farm condition now neither good nor bad. the other hand, remains true that important mal- adjustments either developed were intensified during 1928. Among these, the outstanding one occurs the field credit. Excessive Speculation Securities heard more about “brokers’ loans” 1928 than ever before, and justly so. During the year there was increase about billion dollars, marking leled diversion funds into stock-market channels. More- over, the proportion these loans drawn from other than banking sources increased notably, did the percentage the loans made demand rather than time. Exten- sive purchases bankers’ acceptances the Federal Re- serve Banks were made the means pumping credit into the stock market. Inflation this same quarter was intensified the ex- pansion deposits connection with foreign loans, which was made possible the gold exchange standard. the end the year, the ratio loans and discounts net de- mand deposits was over 120 compared with 109 year ago. The ratio loans and investments total deposits was 113, against 108 the beginning. All this found ex- The Iron Age, January 7 re 7 | 7 7 7 INDEX NUMBERS GOLD BALANCE DOLLARS + Fig. Imports, Which Are Re- garded Good Index Indus- Were Lower 1928 Than 1927. Exports, contrary expec- tations, rose con- siderably during the year. Gold flowed outward heavy volume ~ 1927 Fig. 4—Commodity Prices Have Been Slowly Declining for Several Months. Finished steel prices have been better re- cently, but pig iron during the year averaged lower than any year since 1915. since early 1926 2—January 1929, The Iron Age Scrap has been recently much higher than Fig. 3—While the Purchasing Power the Farmers’ Dollar Has De- clined Since May, Has Averaged Well Above 1927. The gross income from farms was much higher, ow- ing largely bet- ter prices for most things the farmer produces 140 ‘ 1923 1924 1928 FINISHED Gross INCOME farm DOLLAR Fig. Finished Steel Prices Were Higher Decem- ber Than Any Time Since Early 1927. Production made new high record. Unfilled a PRICE SCALE orders were high, but have dropped recently UNFILLED ORDERS AND PRODUCT