The Iron Age 1930-01-09: Vol 125 Iss 2

THE IRON AGE New York. January 2, 1930 ESTABLISHED 1855 ilk cgi tite > Mrscatiis Record Steel Production of 1929 Was Supported by an Even More Diversified Demand Than That of Previous Year Exceeding expectations, 1929 made a new record in steel output, surpassing the previous peak year, 1928, by 8'4 per cent. The ingot total, 54.600,000 tons, was 4,275,000 tons higher than in the preceding 12 months. Earnings, the largest in time of peace, were accelerated by near-capacity op- erations in the first three-quarters, reaching their highest in the second quarter. Demand was well diversified. Railroads, utilities and miscellaneous users took larger shares of the finished steel made than in 1928. The proportions for the automobile industry and for building remained unchanged, although hoth took larger tonnages. Production and prices reached their low points in the fourth quarter, in con- trast with the previous year when they reached their peaks in that quarter. Additions to open-hearth capacity totaled 1,005,000 tons, by far the largest since the war. Plans for 1930 call for an increase of 4,690,000 tons, which exceeds the gain of 1916, the greatest ever made. ce ELVE months ago, following a year of record ere hard put pply their customers’ wants. Earl production and excellent earnings, ther¢ 1929 n leliveries b n to extend at rtag little expectation that 1929 would be a st ll bet emi-tinisne¢ teel developed ter steel vear. Yet the 1928 steel ingot tput was exceeded by 8!» per cent and steel company earnings Mill Deliveries Were Extended reached new peace-time peaks Steady output, stable prices and diversified de by the middl i me were Tully con mand, which marked the previous year, were eve! mitted for more than three mont} mn automobile more characteristic of the first three quarters of 1929 body sheets and for two months on all fini hes A The intervention of the stock market panic in October similar situation also obtained in hot-rolled erp steel, dried up buying and drove down consumer inventories in certain cases forcing users to turn to light plates in the final three months of the year—probably to a to supplement their strip stocks. A scarcity of crud much greater extent than it depressed the actual con- steel developed, becoming so acute that producers sumption of iron and steel. which ordinarily have a surplus entered the maruet Demand was even better balanced than in 1928, in an effort to obtain additional supplies. Several ~ in view of the increased requirements of the railroads orders for ingots were placed by integrated producers, and utilities and the further growth of miscellaneous the first important purchases of that product in sev- uses of steel, and for the major part of the year mills eral vears. Idle Bessemer equipment was put into ser- Januar , > laKerS then naces eratl , é ? hir Trié } \ V n (} 1930 tnat are own sup iron mal followed ns Y ne the wal crud ‘ Tol t g depart I ince lr Mar ne Y } ) ( produc ed at track While that y) nained unchanged at a record rate, was closely watched by the steel ndustry used much more tonnage than 1928, its proportion of all the finished steel made re 18 per cent. onstruction work, featured by record awards of struc- ( steel. also accounted for no larger share of the total the percentages for the two years having been identical 16 pel cent. The increased requirements of the railroads, which ere so conspicuous on account of large orders for cars ! motives, were also given more attention than they It is true that the railroads took more steel, ain in ratio was only 1 point—from 16 per cent f tl for 1928 to 17 per cent for 1929. O he other hand. the share the utilities and min ! imber companies, 10% per cent, showed a gain f ] nt. while the large miscellaneous group (“all ) ’ per cent iccounted Tor an increas¢ of Marked Increase in Exports of Manufactures hare exports d ne point to 5 per cent or} e total tonnage shipped abroad was undoubt reest nee 1920 However, an increasing ( al vent I manutacture tnat were lr I rs nine tns f ne Veal oth ma ito! le a iced Cottor is the leading ‘ The 1 } er of motor ehicles sol t I 29 (exy] rt ind utpu in Ame! { ! n piants) ( mated by the Nationa e! Commerce at 1,015,000, a gai 12s Machinery ey rt n 11 months > O00 001 val } ‘ ent over the total . irg thar ny previous full-year figure n months’ shipments abroad of farm equipment, at . { } ‘ Y nerease of 1% per cent over the n¢ por the previous year. ng dive fication of the steel industry is also 2 t I f leading finished products, ! All « he were large! : hich declines l i! ape Overstimulation of Steel Consumption? plat f i ma rast f irs raise ( } nsuming line é \Y ? er 1 t} née } muct the ’ Y i? a cy pied | ef I nowe ve tnat a as represented a speeding uj t ind I find reflectior ! I I r nig } ( | true that I £ ( nor? tor a higt e of industria ( he psychological de er e W Ss et par and it ma vere re tne inist I I I ( il I ! Vi el were rev ny ¢ rde} tnat were I re ! pl ( imeé were I! I U I re ! ning teature I the post-pani ne Line { al ror tne rail as ! eel industry, the hipbuilders and the ir makers. With the flow of steel into these ou! ! ng no diminu I the extreme caution among ivers tended to disappear Another source of en lrage met at the close of th« year was an upturn in th market, a barometer that is always closely watched Late in December heavy melting steel at Pittsburgh rose sizes and rather sharp increases on light-gage, narrow 50c. a ton, the first advance in that grade since Aug. 13. material. In April extras on metal furniture sheets were adv« . 1} } : . . advanced. In May alloy steel bar makers placed square Volume Spells Profits hil} ' gtigerd gr giaexcwk: — - Dillets under 4x4 in. and slabs of equivalent sectional Additions to open-hearth capacity in 1929 totaled 1,- area on a bar | l a base. Computed on a gross ton basis the 005,000 tons, comparing with a gain of 895,000 tons in hange represented an advance of $2.50 to $6 a ton. annual capacity in 1928, the previous post-war record. Welded iron pipe discounts were revised in January ar . . . g2 ve : .- « . . . S =} 1 { t ; ? : . Plans for 1930 call for a further expansion totaling 4, he first change since January, 1923 Some of the siz 690,000 tons, which will exceed the greatest Increase mad rackets were altered and in most cases the new dis during the war period. ints meant lower prices, the reductions ranging from In part this program undoubtedly reflects the faith of >2 to $20 a ton. Improvement in methods of manufa the industry in the continued growth of its market hut turing iron pipe and increased competition from seam it also indicates a striving for additional economies. Steel ess steel pipe were given as explanations of the revisio1 companies still see the possibility of making important reductions in producing costs, nothwithstanding the rathe1 Advances in Coke and Ore common impression that the opportunities fo rogress = ? y } , + tt + 1 hhy ‘ . ‘ . 5 2 ( \ nate a were al ( a b ne in that direction have been largely exhausted i} esieene . : ; ; ned pre ire on stee roducers during the first tw pressure for economies is also seen in the continued int , cers , . . . : nit ne veal January an unusual demand f gration of steel companies into larger units, w! ~— “ F . ee : iomestic ce, ouplied with extrs tue requirement ferred to in detail in a later paragraph. oe et . nn . ; ; ne Let con inies, started an advance n beehive tut The increasing importance attached t ree ral 1 : ’ , I ( ne e e 1 peal zations and large units of producing equipment tel ' . ; . 0 ear n Marc] Bv the middle of Ap! : by the greater emphasis placed on volun f it t | ; 1: . as ; Ul ul ha et ntirely wiped out 1929 a high rate of operations was found to have 5 ; ; A ginning he iVigation season Lake Supt greater influence on profits than prices. I . : 1 mn ! ( Va i ( ( i tor the first hang quarters prices, as measured by THE IRON AGI : ' nee ; ind the ny ncrease nee 1925 for finished steel, averaged less than 2 De ent highe ; aoe ca { emi-nnished eel, aS previou indicat than in the same period of 1928, but ste¢ ngot productio1 } * 199 I | ‘ x 5 ’ T? ig’? l t? fi t naif ot ; ; ’ et for the country showed a gain of 17 per cent and : ‘s ; F lal n advar ; n put billets and al i earnings of the Steel Corporation (afte) f ting , } S34 ind h e¢ hat ] . In Apri b et ind penses, taxes and interest) rose 44% per cent ' il vere 1ivanced 3} a ton and heet bat >l ft i Steel Prices Recede at Year-End mmon price of $36. By the middle of June, howeve1 ° ‘ - ‘ { market veakened s 1] a ton n all three product | it Steel prices for the entire 12 months of 1929, in ter n De ber prices receded another dollar to $34 of the finished steel composite, showed a gair I ss tna 2 per cent over 1928. The increases of the first and second Alabama Pig Iron Invades the North quarters, however, were more than lost in the last f : ' ig n price vere also influenced by th inusu; months of the year. Plates, shapes and bars advanced i mieaees?“ineliags, » - ) requirements of the ste ndustry This was especially the second quarter $1 a ton to 1.95: Pittsburg! it ; sae ‘ ; VV. ' Livi¢ t . ; . — : : , ’ rue nthe Vaile , DUt a number ol other mark centel toward the end of September bars and shapes de nea - ; > . > 23 reit the nteracting eftect of evere ompetitior Lror 1.90c.. and at the close of October plates fell to the ame ; ‘ npe I Nn ee ie Ss : Alabama furnace Merchant pig iron consumption in level. Various advances were made in sheets during the oe . . . 2) reflected tne reduced peratior ol ich iarge ise! year, but the higher prices were effective on a r¢ a | 4 ast n pipe, radiato anitary ware and heating small amount of business and at the year-en f the P , ae Sr "9 : : 5 lipment plants, and Birmingham producers were espe- different finishes were $2 to $4 a ton lower than at the , a , Sa ae : a ally hard hit because of their dependence on the cast beginning of 1929. Black sheets stood at 2.75c., compare: ; : ; areca a ; : ae vundrie Unsold stocks of Alabama furnaces piled with 2.85c., Pittsburgh; galvanized sheets at 3.40c., con ; ‘ a : : ip until they exceeded 500,000 ton As early as March pared with 3.60c.; and automobile body sheets at 4c., con ; : : a : oN : Soutnert ron began to invade other district arge pared with 4.10c. Wire products also lost ground. Plain : : = : ‘ ; ales were made at such widely separated points as San wire at the year-end stood at $2.40, Pittsburgh, compared : row : ‘= : 4 = Francisco, Kansas City, Chicago, New Jersey and New with $2.50 at the start of 1929; wire nails were at $2.40, ae = sat ; ere Fei a England The campaign of Southern producers reached compared with $2.65. Ona similar comparative basis cold : : , : ' peak late in August when a large tonnage of basi rolled strip steel showed a net loss of $2 a ton and hot- cee tees : ; “i vas sold in the Chicago district at $12, Birmingham, or rolled strip a net gain of $2. . ad 9 eel , ig at the beginning of Cold-finished bars advanced to 2.30c., Pittsburgh or Chicago, beginning with the second quarter, and held at — ee that level until November, when there was a decline of $2 a ton to 2.20c., the same price that prevailed in the first Pig iron production unquestionably reflected the i: quarter. During the year the Cleveland base price on this reased need f the steel industry, since it reached a product was reduced to a parity with the Pittsburgh and peak total of 42,700,000 tons, a gain of 5.8 per cent ove Chicago bases. Another development was the establish the previous record of 40,361,146 tons in 1923. It never ment of a new base price at Buffalo, also on the same thels fell nearly 12,000,000 tons short of the output of level as the other bases. teel ingots, indicating a large use of scrap. Although ! statistics are available, it is believed that the country Blue Annealed Sheets Divided into Two Groups total consumption of old material in 1929 may have been Among changes in the methods of quoting prices was as much as 25,000,000 tons the adoption, in May, of a new classification of blu Scrap prices were at their peak for the year in Janu annealed sheets, under which separate bases were es ary, when heavy melting steel at Pittsburgh rose t tablished for No. 12 gage and heavier and No. 13 gage $19.75 a ton, its highest level since February, 1925. Th and lighter. In February a new card of extras was grade advanced again in April and a third time, begin established for cold-rolled strip to bring net prices in ning in June. It reached $19.25 in the middle of Au- + closer conformity with production costs. The effect was gust, after which it underwent a steady decline until moderately large reductions on the wide and heavier late in the year, advancing 50c a ton to $15.75 on Dee. The Iron Age, January 2, 1930—3 IMPORTS 1,000,000 for the New York metropolitan area. than one-quart St upbuilding ? of the total for the entire eo, whole United States wa kir f fahby ited st) : New York district as 1 s il Steel Boar: . } 19 t f Q . ne Since 1924 - y : \ ‘YT ] ‘ ( Q rite Gas Lines ne nat \ctive Sines War ) he y t ed Tf reate I: her ¢ , y y “ n \y ‘ ne Vy ’ ’ nT - {) {) | . Non { Lar ‘ I * PIG [RON = QUANTITIES } \\ » 1é rve é il é \ The Iron A oe ’ r) t) ‘ ‘ I ( mpa Z ! ‘ yirminghan t é re onding period ir 28 | \ ' ! : ’ ellir the move ina atilor t the Ohio Rive ¢ ne ’ ments m Pittsburg! ; : j } , The Great Lakes carried larg: lantitis C mparag ed Outpourtng of Steel f ron and steel in 1929. The 1 ement I I PEI t ‘ nea Chicago exceeded 50,000 tons nciuding OU ! ! el in an veleisen and 2ZOUU tons oft ¥y phospnorou I n t ! tne ! t! 1 re naracte! Englanc Chicago producers, in turn, sl ( the fi nsidera ( it pig iron by boat to Muskegon, Mic! 28, wv tse ide a ne gh re The 1929 The movement of pig iron and bloon n the N ngot t emarkable r its 1 rd alec ' ‘ { —\—+— —+} ~— + + + + + . 4 7 = —— + — Prices — ——__\ Finiswed SreeL | Lc scknediedonia eit S cickiaon —— — f+ __—_ f= } a CENTS PER LB ; —t—"Pi6 IRON | ; | fee {i 7 The Iron Age. January 2, 1930 we Eee a * ae which had reached 12,400,000 tons, against no more than 7,500,000 tons in any preceding year. This year the gap is almost identical with that of 1928, being estimated now 12,200,000 tons. Both years indicate the use of scrap steel making on a scale never before experienced. We estimate the 1929 production of steel ingots at 54,600,000 tons and that of steel castings at 1,550,000 tons. These figures compare with 50,325,393 tons for ingots and 1,218,787 tons for castings in 1928. The ingot figure last ear was a record, which now is broken, and castings ave made a new record, displacing 1923 with 1,458,000 ’ VW gh 1 ng itpu hrough the sum I mente n in 1928 as noteworthy o r ning mpared with the perfor I September inclusive vith ‘ ed a higher dail a el een mad n tne I I re ng eal I maximun Vas y \ I Ving il il s laent = I rh I ras 12s i! cl pr eaing I I x I Apr n Marct Octobs 28 ntrary ill precedent rr . ne 4 pu I il Apr ng ‘ en the prod I g I ! t lia ( I ne \) e) [ron and Steel Ins ased upor s of open I Be SS¢ I \ I ] i n 1928 Veu Record in Pig lron Production tum! f that year and held a fairly uniform level throug! it Jid The w, which was touched near the nd of July, 1928, was $17.04 a gross ton (THE IRON AGE rol nposite price) The rise reached a peak of =18.59 at the end of November, following which a slow wnward movement brought the price, in March, t 8.29 Fairly steady gains during the next two months lade tne price I May $18.71, whict has since been reduced rregularly int rt Decembet 518.21 was each Contrasting 1929 with 1928 we find .in the first place that total production has gained more than 12 per cent, and that no 1929 month except December fell below 5,000,000 tons. This is the reverse of the situation in 1928, when the first two months were below 3,000,000 tons and all the other months above it. Nineteen twenty- 6—The Iron Age, January 2, 1930 nine made a new high record, being almost 6 per cent above the 1923 total, which was the previous record. Furnace Abandonment in 1929 Fewer furnaces were scrapped during the year because of being obsolete or uneconomical in operation than was I the case in 1928, but the number was none the less large. In place of the 23 of that year only 19 were retired in 1929. With no new furnaces put in blast, the net loss for the year was 19, bringing the total of furnaces on the potentially active list to 317, against 336 a year ago. Prescnt output is being achieved with a much smaller number of furnaces than a few years ago. For example, n 1926. with almost record-breaking production, the num- er of furnaces in plants never fell below 213 and reached a maximum of 237. In 1929, on the other hand, vith production more than 3,000,000 tons greater, the number of active furnaces reached a maximum of only 219 on June 1 and, toward the end of the year, when business conditions caused a sharp drop, went as low 177 on Dee. 1. As was explained last year, the reason for this is the greater unit capacity of the furnaces now in use. The aily rate per furnace in 1926 ranged from 460 to 497 yns on the first of each month. In 1927 this range was from 484 to 516 tons; in 1928, from 515 to 560 tons; in 1929, from 551 tons (January) to 576 tons (June). These gures are demonstrating more and more clearly every ar that the small-capacity furnace is no longer to be onsidered in our present and future pig iron history. ‘he uniformity of the rate through 1929 was noteworthy. Furnaces in blast at the beginning of each month in 1929, with the current operating rates, are shown in the mpanying table. Number Daily Rat Number Daily Rate nB 1 Gr Te 1929 in Blast Gross Tons 67 July 1 218 22,590 i 98 Aug. 1 216 121,965 2 15,770 Sept. 1 210 119,130 212 20,740 Oct l 205 116,405 215 22,98 Nov l 203 113,600 } 6,1 Dec. 1 177 98,450 { Notable Year for Mergers P to the time of the stock market crash the merging U f companies in all lines of business continued at the same high rate as in the previous year. This issue of [HE IRON AGF lists more than 50 such consolidations in the steel and allied metal-working lines. Despite the reversal of financial conditions, there were a good many in November and December, one, in fact, of outstanding importance—the bringing together of the Republic Iron & Steel Co., the Central Alloy Steel Corporation, the Don- ner Steel Co, and the Bourne-Fuller Co. Three of these companies had been engaged in prior merger develop- ments, Central Alloy having taken over the Interstate Iron & Steel Co. of Chicago and the Donner Steel Co. having acquired the Witherow Steel Corporation of Pitts- burgh, while the Republic company purchased the Union Drawn Steel Co. of Beaver Falls, Pa. Earlier in the year the Witherow Company had bought Dilworth, Por- ter & Co. of Pittsburgh, makers of spikes and tie plates. The Republic Steel Corporation, to be formed by a group- ing of all of these interests, will rank third in size among the steel companies of the United States. Its 5,000,000 tons of annual steel ingot capacity is exceeded only by that of the Steel Corporation and Bethlehem. A consolidation of the Weirton Steel Co., the Great Lakes Steel Corporation and the blast furnace and ore properties of the M. A. Hanna Co., was effected in Sep- tember under the name of the National Steel Corporation, which now is sixth in size, having about 2,000,000 tons of es Lana aE ene TNE: NTN NO “vo (Continued on page 123) Steel Consuming Industries Forecasting is a tool that business is trying more and more to use. To take it out of the hunch and clairvoyant class, THE IRON AGE for some years has compiled annually, through the cooperation of the steel makers, the takings of various forms of steel by important industries. The analysis given immediately at the conclusion of a year offers a basis for estimates by every manu- facturer of the promises of the year to come in his own business. To rate his continued activity he may modify, as need be, the performance of the recent past in the light of authoritative opinion re- specting particular outlooks. Accordingly, the pages immediately following are devoted to the prospects of 1930 in the major metal- working fields. The average industrial company is either directly or indirectly connected with one of these. What is likely to happen following recent unusual events is set forth in the several articles, all prepared for the help they may be in the individual case. i. ee ees Automobiles Took Most Steel Share, However, No Greater Than in 1928—Railroads Pass Buildings—High Production Records in Six Forms of Steel OLLOWING a large 1928, the production of increase in steel out 1929 put in , as has been known for some time, went far ahead of all predecessors. Re- turns from almost the entire industry show that prac- tically all the principal forms of steel registered gains, the only apparent loss being in wire products Production is estimated at 40,333,000 gross tons of rolled steel, which is much the largest total ever made in any year. The indicated tons, or 8.5 per cent. Last year’s estimate, made in the same manner, was 37,300,000 tons, which checked very closely with the final figures of the American Iron and Steel Institute, at 37,177,939 tons. gain over 1928 was 3,155,000 Estimates of production of rolled steel are based upon returns from 54 steel makers, accounting for a total of 37,688,000 gross tons, or about 94 per cent of the esti of the This high rate indicative of the spirit of cooperation of makers in providing, in confidence, information of broad value to the whole industrial field. The tonnage reported by these 54 companies was considerably greater than the aggregate tonnage made by all companies in any preceding year. More than this, a larger proportion of the provided detailed of shipments, or furnished the basis tribution could be made. This group 348,000 gross tons, or more than 90 per cent of output of the year. This is an improvement 83.4 per cent of last year and smaller ratios in pre- ceding years. The table at the bottom of pages 10 and 11 shows, as usual, a composite of the data furnished by the industry. mated total for the industry. return 1s stet l companies their h dis ounted for 36,- classification distribution of on which su act the total over the Motor Cars Retain Leadership in Consumption 16 per but the railroads increased from to 17 th required much larger tonnages of steel than before These little than half of the total production of the industry—51'*2 per cent, No other industry the receaing yt ar, cent ol Be the total per cent, taking second position three leaders absorbed a more one 1 with 50% per cent in 1928. of of these three. water, mining and lumbering companies, a con compare within reach Combining oil, gas, sumption of about 10% per cent of the total is shown. any Agricultural, including principally machinery and other implements, took 5% per cent. Exports took a like quantity; containers, in the form of tin cans, and of steel barrels and other carrying units, took about 5 per cent; while machinery took slightly more than 3 per cent. Miscellaneous industries not included in the above absorbed about 19 per cent of the total, compared with 18% per cent in 1928. This includes among other things shipbuilding, with about 1 per cent, electrical manufac- tures, 1% per cent, furniture and stoves, with 1% per cent, and pressed and formed metal products, 1 per cent. Consumption apparently accounted for by the several include estimated 7,239,000 automobile parts, 6,895,000 tons for railroads, industries tons for auto an mobiles and including trackwork, cars and locomotives, buildings and bridges; 6,539,000 tons for buildings and other construc tion, including building hardware and trim; 4,180,000 ton for oil, gas, water, mining and lumbering, of which the oil, gas and water absorbed approximately five-sixths; 2,170,000 tons for agricultural needs, 2,073,000 tons for containers of all sorts, and 1,283,000 tons for machinery ind hand tools. on the basis of returns from the steel checked the of the United States Department of Commerce for the first 11 months, Exports, com panies and against reports show about 2,270,000 gross tons of rolled steel products NALYSIS of all the returns indicates that the auto- shipped abroad during the year. Canada was, by far, Poa ; “GP our largest customer, with Japan sec , A mobile industry absorbed approximately 18 per cent ; oe So apan second ; > entire pr ‘t, as was > case a year earlier. It . of the entire product, as was the case a year eat i I acsndie Minin bs Geen eniede had been thought that this percentage would be higher, but the heavy slump in automobile specifications in the EW high production records have been made ap- last few months apparently returned the figure that N parently in steel bars, structural shapes, sheets, tin of 1928, but, of course, this represents an actual increase plate, strip steel, and pipes and tubes. All six of these of steel taken, show tonnages probably of the [———— = i} considerably in order of 750,000 ~ , } . . . . 9 9¢ | advance of any- , > sen by Leading Consuming Industries in 1929 oe ane | Steel Taken b: g g ~ | thing previously 1} j > = 1] W h ereas i} ( i ercentages oft / rincipal } orms ) recorded. building and Ba Shaps ate Shee Tin P! Strip Pipe Wire Steelbars . . . Railroads . 18 27.1 3 0.8 1.0 2.1 are estimated at construction :' ae ' ' 7 meus are estimated a s Construction ‘ 4.7 Ai.4 to 18.5 7 704 ( : was slightly Automobile 28.7 0 ‘ 29.2 ) 60.4 1.7 9.3 /,700,000 gross : . , r ) 1 ] 54.2 1.5 ahead of rail- Oil, Gas, Water : : . : 6. -s a | tons. The pre- : Mining, Lumbering 1. 2 I 2 0 4 i 2.9 1] 2 ; roads in ton- Agriculture 12.4 2 ‘ 1.5 ‘ 24.3 || vious record, . einer ( § 74.7 0.4 0.2 0.7 : 09 nage consumed ~ews a 4 as a aa | made in 1928, : Shipbullding A.A «.' 7 . : 2 “ese 7 9990 799 in 1928, the re- Machinery 8.7 3.2 1.7 1.4 0.2 2.6 1.1 1.9 was 7,229,723 verse is true in Exports 7 a9 13.4 1.2 . ; < : tons. That was 16.5 5.4 14.9 $3.5 6.5 25 2.3 $2. 1929, Building || “" °° the first time | ) 00.0 00.0 100.0 100.0 100.0 100.0 100.0 h hi h _ took 16% per the ig rec- cent, as in the — | ords of 1916 The Iron Age, January 2, 1930—9 W ITH Record Out pouring of Steel, Automobiles Held Their Year-old Lead in Stee! Consumption. Railroads passed building construc- tion to take second place. Mes : as in 1927, having been the leader befo hat 3 , = 10 The Iron Age. January 2, 1930 production and 1917 had been exceeded. Structural shapes appear to ac- count for a total of 4,600,000 tons. This compares with 4,096,143 tons, the previous record, made in 1928, a gain of about 12 per cent. Steel sheets have passed the §,000,000-ton mark, with an est nated 6,100,000 tons. This is 15 per cent above the previous record, 301,401 tons, which was made in Tin plate evidently will come ‘lose to 2,000,000 tons Che total in the previous year, which was the arlier record, was 1,791,021 tons. Steel strips are now estimated at 2,500,000 gross tons, which is 16 per cent higher than the previ- us record of 2,161,988 tons, made n 1928 The present estimated onnage is double any tonnage mad before 1927. Pipe and tubes show an increas of about 11 per cent over 1928, with an estimated total of 4,439,000 tons, compared with 4,002,837 ton in the preceding year. This again is a new record, exceeding the 1,177,844 tons of 1926, which was the previous high Distribution of Rolled Steel in 54 Companies Producing 94 Amount oT Each Form T alce nm, iw Thousands Hoops, Track Bands, Heavy Light Acces Structural Cotton I Rail orle Plates Shapes Bars Ties t ’ 1 $41.3 359.4 27.0 df 9.0 312.0 67.9 47 12.7 0.6 18 2.8 8.3 $6.2 ,86.0 15.9 hen 10 23.6 19.2 6 S 43.7 21.4 } 3 1,636.4 39.5 1.7 8.9 $1.3 11.0 ) 17. 11.4 8 2 18.3 6 16 0. } 31.3 Lee 5 J 65.8 12.1 04.1 6.7 x ef 7 ,.9 2 24 ) 0.1 . l 6.1 l f 14.9 9.8 8 30.7 2.610 10 1,400 1,600 7,700 int nd meen Lies Mate? Steel rails apparently will show an increase of about 4 per cent over 1928, the estimate being 2,- 750,000 tons, compared with 2,647,- 193 tons made in the previous year. This is nowhere near a record, as 1906 showed a total of 3,977,887 , tons. The most recent figure higher than the 1929 estimate was that of 1927, with 2,806,486 tons. Steel plates have gone beyond the 1928 total by perhaps 12 per cent. The estimate is 4,400,000 tons, compared with 3,913,628 tons in 1928. Both figures are consid erably below the high record of 5,119,908 tons, made in 1918, when the country was putting forth pro digious efforts in building up a merchant fleet to overcome the submarine menace. Wire products account appar- ently for 2,850,000 tons. This is the only major item showing a re- duction from 1928, when the total, on the wire-rod basis, was reported at 3,080,816 tons. The record was made in 1916, with 3,518,746 tons, a large part of which was made 7 into barbed wire for use in France and other theaters of war. 1929, According to Shipments of | Per Cent of the Year’s Output of Gross Tons, by Different Industries Ain Black All Other 7 Plate Black Tubes A Billet S| e : i for Plateand and Wire Strip Other nd — and a : Tinning Sheets Pipe Products Steel Finished Slabs Tin! , 4 72.5 13.6 7.8 9.1 199.8 } 6.8 1.5 8.9 yf < 0.2 1.5 18.4 24.7 . 0.4 194.1 52.9 55.2 13.8 26.8 6.¢ oe EW High Records Ge 258.8 13.9 307 aoo-d = aor 4 Were Made in Six 23.9 4.6 1,563.9 24-5 ss 23.¢ . of the Nine Forms of 0 , 7.0 _e +.4 : - . i 199.7 20.9 7" 5 31-2 7 Steel Shown in 1929. 39 9 0.7 - é ; 6 2.6 0.8 1.0 1.9 Bars easi'y maintained : 84.2 17.0 0.2 U.4 t e : q 1.0 43.9 21.0 17.6 38.7 their lead and sheets in- 3.7 10.0 ( i ~ . ‘ , " . 12.1 73.3 3.4 46.7 12 creased in ratio, both in 1.5 0.1 0.1 . 65 1524 2"1 0.4 92.4 et response to huge demand ; 54.1 334.7 1,365.5 138.4 4.1 I. 3.7 from automobile plants 1¢ 27.4 188.3 115.§ 11.5 { (4.9 7 7 877 129.1 173.7 230 _ 13.0 5,564.1 3,609.3 1,975.7 1,573.9 511.0 777.9 $21 632.4 36,347.6 205.9 66.1 135.0 144.5 7.4 1,340.¢ 2,000 6,100 2,850 2,500 The Iron Age, January 2, 1930—11 a HH AL |b Toes pS TT el aT ee } bibl bek icone tie : oe Vit | — ~> “et ° * i - ° Oo uilding Recovery Due By Spring _ Record for Year Should Equal and May Exceed That of } 7 - , | 1929, Says Economist of S. W. Straus & Co.— ; - i Recent Decline Sets Stage for Comeback BY W. C. CLARK OMI sts be hat we are now mpleting s now looked upon as the industry which will save us ma) isiness cycle whic egan in 1921; others, from business collapse, cushioning the decline in business ! ajority, contend that the present decline activity and stimulating the forces of recovery. r diate recessior mparable t Will construction be able to play this role effectively? 124 hich has split the last eight or nine years This is the crucial question which any forecaster of the nil I cely to be typica new year’s business must answer. Pra gree, however, that nprecedet period has Favorable and Unfavorable Factors eee e stimulus provided by two grea N this brief summary we can only touch upon the three } ‘ ding nstruction and t é nan I important favorable factors, (1) the readjustment — which has already taken place in the building industry, vVrigina gaining momentum as a resuit of a long (2) the stimulus of easy money, and (3) the prompt ce mand and thet eding upon the demand cause and aggressive mobilization, under the inspiration of vea h the vn activities wer President Hoover, of the campaign to use construction ; ; e, creating a market for the product as a balance wheel of industry. The stimulating effect 108 Gs nd ner ba naustries and pri \f these three forces will be somewhat retarded by (1) the —- Cee — indirectly in every haml loss of savings and paper profits in the stock market watiedrein ave ese tw ndustries have Co! debacle, (2) the depletion of funds in the savings banks tuted Db © Pp move and the cnier support and building and loan associations, and (3) the fact that ew See For th being, however, thi supply and demand conditions in some branches of the cru PUnC! ps Set nave ee! iilding industry have not been entirely readjusted. seiriatale In the first place, it is clear that the decline in build- During ng industry has lagged ng volume during 1929 has been extremely fortunate. ehind, sla ng pac me 12 or 13 per cent, a This slowing down has enabled the industry to correct mpared with 1928, me automovile industry Has put on most of the excesses which had developed in the last an astonish ng nie 7 oe d and left all its old record six or seven years of unprecedented construction activity, a foday the over-produced condition of thi but, coinciding as it did with unusual activity in the & latter industry constitutes perhaps the sorest spot in automobile and many other industries, its depressing ' the entire business, whereas the construction industry effect upon general business was largely counteracted ’ “aaa a ee ae see The readjustment which we are now experiencing in i Yor _ general business may be sharp enough; it would be 12—The Iron Age, January 2, 1930 more acute and more protracted had it not been for the year’s start gained by the construction industry. The second favorable factor, easy money, will un- doubtedly exert a powerful influence making for the resumption of normal activities in the industry. Com- parison of building volume with bond yields, commercial paper rates or other index of the cost of money ove the past two years reveals a very high inverse correlation. Cheap money has always been followed, after a lag of a few months, by an upward movement in building volume, whereas rising money rates have either checked expanding activity or brought about a decline. The build ing decline of the last year or more was due in large part at least to the “tight money” conditions with which even the man on the street is familiar. This tight money, had its earliest and most severe effect upon the building industry. Two factors were responsible for this result. Not only did money become “dear” but for some builders it became practically unavailable. In other words, the irresponsible builder who had managed to operate on a shoestring during the cheap money era found his supply of funds, chiefly for equity purposes, practically cut off. Speculative building, therefore, par ticularly the small project in the residential field. was the first to feel the pinch. The building industry found it more difficult to evade the effects of difficult borrowing conditions by switching its method of raising capital from funded obligations to capital stock. Real estat stock issues have of course been brought out in increasing number, but the relatively limited earning possibility of a single building did not provide the lure of unlimited profits which the public in its of its common stock investments. recent mood demanded In the industrial and public utility field, stock issues provided an easy means of raising cheap and abundant capital—this helps to explain why industrial building volume increased 15 pei cent in the first 11 months of 1929 over 1928 as con trasted with a 30 per cent decline in residential building Early Resumption of Building Indicated HE record-breaking decline in money market rates Ts a result of the stock market collapse and of Federal Reserve policy, and the bond market should make, therefore, for an early resum} tion of building activity. The effect of this stimulating influence, however, will probably be somewhat retarded resulting improvement in the by the present cash position of the savings banks and the building and loan associations. These two types of institutions, which have always been important in the real estate lending market, particularly in the financing of individual homes and small apartment hou factors and commercial projects, suffered severely, first, fron the withdrawal of savings by depositors or who desired to speculate in stocks, and later by the withdrawal of deposits or the demand for loans upor shares upon the part of such depositors or shareholde1 who had been caught in the stock market debacle and were attempting to protect their margins. With thes withdrawals and loans probably the heaviest in history it is not likely that these institutions will be able im- mediately to give vigorous stimulation to the building market. While deposits are already months must probably elapse before the normal process of public saving shall have wholly replenished their ré sources and enabled them to resume real estate lending on a normal scale. shareholders increasing, some Despite heavy policy loans and a possible slight de cline in new life insurance sales, the life insurance com panies will probably be both able and willing to continue a normal program of mortgage lending, while the strong real estate bond houses, the title and guaranty companies, and the general market bond houses which have developed a market for real estate securities will continue to lend where supply and demand conditions are in proper bal- ance and, with an improving bond market, will show a substantial improvement in business over 1929. The third favorable influence is important of all. probably the most For the first time in history we have seen at the very inception of a business recession the prompt mobilization of the business forces of the country in an aggressive campaign designed to minimize incipient unemployment and accelerate the slowing wheels of in- dustry before recession reaches serious proportions. For the first time in history we are seeing a deliberate endeavor made on a far-reaching scale to use the con- struction industry as the balance wheel of general busi- ness—an endeavor, moreover, made by a governmental leader who thoroughly believes in this policy as an in- strument of broad economic strategy and who has shown unusual capacity to rally behind him the nation’s business leaders. The coming year, therefore, will see an excellent test of the efficacy of this economic instrument — not a perfect test by any means, because the emergency has come upon us before a deliberately planned “prosperity reserve” of public works, etc., had been built up, but still a fairly adequate one because the present leadership is intelligent and aggressive and because the high money rates of the past year have created, in some lines at least, a “natural backlog” of building demand. Business Psychology Has Changed UBSTANTIAL results have already been accomplished. S Certainly of no mean importance is the right-about- face in business psychology, the change from the deep gloom so universal during the stock market crash to the general attitude of constructive courage and cautious optimism which prevails at present. Of importance also are the degree of organization among the business and civic authorities of the country which has already been achieved as a result of the Hoover conference at Wash- accleration given to the preparation of private ington, and the plans and specifications for major public and projects. The direct volume will vary, both as to extent and as to time of different construction material benefits in increased construction emergence, with the types of activity. Public works, both public buildings and general en- gineering projects, should show a very substantial and early increase, both because of the public interest involved in the mitigation of unemployment and the greater pos- long-range planning, and because the improve- market, already evidenced sibility of ment in the municipal bond a substantial increase in municipal flotations, should make it possible to raise the capital required at reasonable rates. The Federal Government has taken the necessary steps to expand its public building program, the expenditure now contemplated involving $495,000,000 over a 10-year period. The program for 1930 is being pushed with all The appeal made by the President for an “energetic but prudent pursuit of public works” by State, possible speed. municipal and county authorities seems to be meeting with hearty response. As instances of this response, the city of Philadelphia proposes to spend $65,000,000 over the next 18 months, St. Paul has accepted a $15,500,000 schedule of public improvements, and the Governor of Ohio reports that his State is “just now entering upon the greatest building program undertaken in many, many years.” Road building will be one of the greatest bene- ficiaries of this new public works program, an expendi- ture of over two billions being contemplated for State highway construction, county roads and city streets. Of great importance will be the speed with which the new work can be initiated. The earlier the program The Iron Age, January 2, 1930—13 can be got under way, the more important will be its effect in cushioning the decline and in causing a renewed stimulus to general building and business. Estate Boards also reports conditions normal for single family dwellings for 62 per cent of the 411 cities report- ing to them and normal for apartments in 55 per cent of such cities. Single family dwellings were overbuilt in : industial Corporations in Good Position 19 per cent of the reporting cities, and underbuilt in 10 — STRIAL and public utility building wil! also re- per cent; while apartments were overbuilt in 18 per cent spond substantially to the new stimulating influences and underbuilt in 27 per cent. In the residential field an [he rise of new industries and the steady growth of opportunity exists for a substantial volume of construc- he last few years had already absorbed all or most of tion in the repair and modernization of existing structures. ee the surplus plant capacity created during the war and Conditions of supply and demand in the commercial irly postwar years. This fact and the ease of financing eld are also, as a whole, not such as to warrant any ck issues were responsible for the increase in in- special stimulation of this type of building. Occupancy dustrial building during 1929. Today the great industrial conditions are still reasonably healthy in most cities, but rations are in excellent financial position to go for the amount of new space coming upon the market in the . ward with major development projects—their huge casl early future suggests a slowing down rather than an ac- surpluses and their low ratio of debt to total capitaliza celeration of this activity. In this connection, however, A tion enable them to respond to the President’s appeal it is of interest to the steel industry to note that the f erate their improvement programs. Hence we tendency of real estate development in the central high- nd the steel industry announcing expenditures “already land-value sections of our larger cities is in the direction horized and definitely planned” of approximately $500, f utilizing larger and larger plots, now frequently 00,000 and the American Telephone & Telegraph Co. entire city blocks, and erecting thereon very large and very roposing to spend for betterments and extensions $700, tall structures. This trend, chiefly in commercial building, 100,000 during 1930, as compared with $600,000,000 last but apparent also in high-grade apartment and apartment ear, while the elect ight ar owel mpanies, the hotel projects, is one of the reasons behind the record nu red and natural g panies and the elect lemand for structural steel shapes during the past year. nies 1 ! e¢ ! Q full steam — wtimanbien me 100.000.000. ar Recovery Should Be Apparent by Spring ! $110,000,000 } L dgets / HE sound conclusion to draw from an analysis of é { al « r re f $1,050,000,000 {ges conflicting forces seems to be that the total i 5680,000,000 ! ! ructures olume of construction activity during 1930 will closely i R ding I I é how approximate that of 1929. January and February, like S r is Wh he ll in res November and December, will probably be months of rin nore has serve sharp decline, but some time during the spring the f tl n tl lity, it stimulus of easy money and the pressure of the Hoover nd pa tabilization campaign will initiate a recovery which in apal the late months of the year should reach substantial pro- I ! re 1 entire ortions. In proportion as these two stimulants can be ! r il ( marke nade effective at an early date, the record for the year ! rH mplete as a whole will be gratifying. That record is practically Within the t in ertain to be not more than 5 per cent below that of 1929; ‘ rn I inlikely that it will equal last year’s figure and it : eed the latte: * _ Large Expansion of Motor Bus Transportation Calls for Improved Terminal Facilities as 14—The Iron Age, January 2, 1930 —-——— <a 7 . Fant rede 3+ —_ ancl eas acai wires | e % Sie Bus Transportation a Growing Industry No Branch of the Common Carrier Service Has Expanded So Rapidly and Further Increases Are Expected BY C. W. OTOR buses last year carried two billion passen gers over regular routes in city, suburban and inter-city service. The greatest percentage of this movement was in the city and suburban field, where the ride is short, averaging probably not more than three to four miles. To accommodate this patronage, 45,000 buses were required, with approximately 12,000 of them employed in purely local city service. The remainder wer engaged in suburban and long-haul inter-city and cross country service. In route mileage these 45,000 buses cov- ered 290,000 miles, more in fact than the total track mile age of the country of both steam and electric roads. Outside of this group of common carrier buses handling people, not only to and from their places of occupation but to seek enjoyment, are nearly as many that transport children to and from school, that serve hotel and apart ment guests, that show the sights of our principal cities and that serve in a variety of other needs calling for trans port facilities. While this non-common carrier grou; approximates in number of vehicles the common carrie? group, the business done by them, translated into dollars and cents, or measured in terms of miles operated, is on! «u small percentage of the entire industry. It is variously estimated that the common carrier grou} is now selling close to ten billion passenger miles of ser vice annually, and increasing each year at a rate of 5 per cent or 000,000. more. The annual revenue approximates $325, In addition, there are earnings from chartered or private party buses, tours, mail and express, amounting to at least 10 per cent more, giving the industry as at present constituted an earning power of $350,000,000 Large Expansion in Few Years HIS is a remarkable growth for less than a decad In 1922 there were 20,000 buses. a revenue of not more than $110,000,000, a traffic of 850,000,000, a rout mileage of 185,000. These figures indicate that the bus industry has estab lished itself as the country’s fastest transportation service. For another thing, the growing form of figures show the existence of a new and rapidly growing market of considerable size. Obviously, a very large portion of all current revenues must be paid out for labor, and operating supplies. When measured in terms of market possibilities, the equipment bus industry represents at present a buying power of $265,000,000, exclusive of payroll. This divides into $65, 000,000 for vehicles and $200,000,000 for maintenance and operating supplies. Analyzed in a different manner, the industry will grow in the future not as in the past, which was entirely from expansion, but through improvements which mean, first, the replacement of vehicles that have grown old in service, better garage and housing facilities and more modern up-to-date shop equipment that will reduce the time that vehicles are tied up in the shops for repairs. *Editor Bus Transportation, New York STOCKS Within the past two or three years maintenance has grown from a corner in the garage to a most important part of the job of bus operation. It is now a highly spe ialized business and no other single phase of the trans portation industry is so conscious of the value of an ade quate maintenance program. Such a program constantly demands the use of improved facilities and working condi tions for mechanics. The year just closed has seen many new garages constructed to carry on this maintenance program. The industry is maintaining itself, it is becom ng independent of outside public service stations, as 1s nown D purchases of modern machine tools and othe! yp equipment. Probably 175 garages have been built luring the year. More are under way or planned for early onstruction. Current investment in maintenance facili ies, shops, garages and tools, for common carrier buse Llone Is now hgured a being close to $110,000,000 City Bus Operations Grow f HE constantly growing popularity of the bus in city T, ransportation service is easily explained. In the cities the bus is proving itself a satisfactory mass transportatio! ehicle. my and flexibility lacking in equipment that must operat: It has certain advantages to the operator in econ yn fixed rails. Particularly striking is the growth in th ties in which buses are the only means of imber mass transportation. In 1922, only 15 cities with upward f over 10,000 population were served exclusively by bus: hile as of Sept. 1, 1929, there were 186 such cities. Thi imbe1 steadily increasing and will cross the 200 mark early in 1930. But this is not all, for buses are found in n connection with electric railways in ‘ther cities In nunicipalities in the United States 1oca service other words, 52.7 per cent of the 1032 having 10,000 or mors } nhabitants either have bus service exclusively or in con local electric railway service. In 1922, ther cities with similar bus services and long-haul service, the popularity of the bus rests in its ability to offer greater frequency of headway, with rates considerably lower than Backed wit} term