The Iron Age 1933-02-02: Vol 131 Iss 5

4 “< rom all im ace eat the ion @ uc- ect od- per of eat rt ter re- le- - es Ser oy we ..THE IRON AGE... ESTABLISHED 1855 FEBRUARY 2, 1933 . Vol. 131, No. 5 What the Machine Has Done to Us ~~ mt HIS is the introductory article of a series by Walter S. Giele on the “trend of mechanization” in our manufacturing industries. Dealing exclusively with demonstrable facts, the author presents the most com- prehensive picture yet published of the actual long-term interrelations of employ- ment, wages, productivity and mechanization. Mr. Giele’s data are derived from unquestionable sources. His methods have been examined and approved by leading economists and statisticians. He has carefully and purposely avoided the danger of jumping at conclusions or setting up theories based upon partial evidence. As a groundwork for the diagnosis and correction of the faults in our present production system, Mr. Giele’s series will, we believe, represent a distinct contri- bution to the cause of sound thinking, especially so, since through the consideration of a complete series of facts, it effectively controverts the sketchy assumptions of Technocracy and other visionary cults. HIS study was begun about a year ago in an effort to learn whether such data in connection with this subject as might be avail- able and fairly considered reliable would show underlying trends and, if so, whether such trends could reason- ably be related to each other and to current events. At that time and, in large measure, up to the present a great deal of the discussion of the current depression seemed to be centered around a theory that this depression is no ordinary manifestation of the phenomenon of the business cycle, but that it is a wholly new situation resulting from conditions unprecedented in human experience and that it definitely marks the end of an era. The particular phase of the situa- tion that has, perhaps, been most dis- cussed has been the mechanization of manufacturing industry. Most of this discussion of mechanization in man- ufacturing industry either starts with or arrives at the conclusion that machines have displaced men with two-fold effect; first, vastly increased productive capacity resulting in over- production and second, vastly de- wrvyv By WALTER S. GIELE creased buying capacity resulting in under-consumption, the two, of course, interacting, each to aggravate the other. Vastly decreased buying capacity has, in general, been held to have re- sulted from a decreasing share of the proceeds of production distributed as wages. Thus the wage earner has been held to have been thrown out of employment by decreasing con- sumption, ending his own ability to buy and leading in turn to a progres- sive and cumulative effect as more and more wage earners find themselves with less and less buying power so that more and more other wage earners are disemployed by the consequent reduc- tion in consumption. A preliminary survey of the situa- tion suggested a number of angles of approach. First, basic trends might have been obscured by surface manifestations and old phenomena in a new environ- 187 ment might assume new aspects, with- out fundamental change. Second, the time element may have been a major or an incidental factor. Sequences of events and combinations of causes may have conditioned each other by reason of their relative timing. Secular trends and cyclical variations, each separately well estab- lished, may have been imposed, one on the other, in an unusual if not wholly new combination. Present events may not be the results of present causes but the results of the accumulated ag- gregate of many causes, some of which might reach back for a considerable distance in time. Third, manufacturing industry is but part of our vast and complex economic structure and social life. Mechanization in manufacturing in- dustry is therefore but a part of the broad picture of mechanization in our lives. Employment in the manufac- turing industries is only a part of the broad picture of the population as a whole earning its living by engaging in some form of gainful occupation. The money wage and the real wage which affects living conditions and ae ! | : social status are only a part of the perspective of the economic and social structure. The Material Material available for the study of the problem is to be found in the care- fully prepared data of the Bureau of the Census, United States Department of Commerce, and of the Bureau of Labor Statistics, United States De- partment of Labor, as welk as many private sources, business annals, news- papers, magazines, and so forth. Very complete data covering sub- stantially the entire modern industria] history of this country are available from these sources on: Total population, growth Distribution of population by age groups showing employability—and de- pendency. showing rate of Distribution of population by marital condition, showing employability and oc- cupation of women not listed as gainful. Distribution of population by environ- ment, showing availability for agricul- tural or non-agricultural occupation. Distribution of population by occupa tional groups, showing shifts in character of occupation Wage earners employed in manufactur- ing industry Wages paid to wage earners in manu facturing industry. Primary horsepower capacity installed in manufacturing industry. Value of industrial production. Value added by manufactur: Index of commodity prices at wholesale Index of the cost of living. Annals indicating historical backgrounds of events as they occurred. Method of Approach The method of approach is by com- parison of rates of change on a ratio basis largely by means of charts. Any change is significant only with relation to the base from which it starts and in relation to other changes which it may effect or by which it may be affected. In a dynamic aggregate of which the only constant is the constant condition of flux in all of its com- ponents, both with respect to each other and for each with respect to its own prior conditions, relative changes are significant in terms of the rate at which they occur. Changes in dissimilar quantities, as in numbers of men and numbers of dollars, are comparable only in terms of their relative rates. Relative rates can be compared only by isolating the elements, studying their separate rates of change and then relating those which have a bearing on each other. Having thus developed the relative rates of change, the net results may be appraised in the light of estab- lished fact. Outline of Steps in Analysis It is proposed, after having set forth the general method of analysis, to outline the steps in sufficient detail 188—The Iron Age, February 2, 1933 to enable the reader to check the com- putations or to extend them as addi- tional and later data become avail- able. The general method of analysis used will be that of visualizing the magni- tudes of the quantities involved and their relative changes and rates of change by means of graphic repre- sentation on charts. The logarithmic vertical scale is used in plotting the magnitudes with the arithmetic horizontal scale for plotting the time intervals, a form commonly known as the ratio chart. Thus the progressive changes in the magnitudes of any single _ series plotted can be visualized in terms of relative or ratio increase or decrease with respect to time, and the slopes of the lines serve to visualize the rates of change. If the line is straight, then the rate of change is in simple geometric pro- gression, i.e. increasing or decreasing by a uniform percentage or ratio with respect to time. If the line is ascend- ing and concave upward, then the magnitudes represented are increasing at an accelerated rate and each incre- ment of magnitude for an equal time interval is not only greater than the preceding increment but represents a larger percentage increase. That is, the rate of change is faster and ever faster. This is a relation that must be carried in the background of the men- tal image when visualizing the rates of change in quantities of such widely dissimilar magnitudes as are involved in this analysis, as, for instance, in picturing population growth over a period of 80 years. If the line is ascending and convex upward, then the magnitudes repre- sented are increasing at a retarded rate. This is the characteristic of the time series which are subject to the law of diminishing return. The curve becomes more and more nearly hori- zontal and is said to “flatten out”. If the line is descending and con- cave upward, the magnitudes repre- sented are decreasing at a retarded rate, that is, more slowly with each time interval. If the line is descending and convex upward the magnitudes represented are decreasing at an accelerated rate and the movement may, in colloquial language, be pictured as accumulating momentum, that is, the opposite of di- minishing return. If, then, two or more series are plotted on the same chart, it is very easy to visualize their relative rates of change, with respect to time and with respect to each other in their true significance even though the series represent quite dissimilar things as, for instance, persons and dollars. As the logarithmic vertical scale im- plies, vertical distances on the chart are proportional to the logarithms of the magnitudes they represent, just as on a slide rule the graduations are proportional to the logarithms of the numbers marked on the scale. When, therefore, two series are plotted on the same chart, the vertical] distance between points on any time ordinate represents the difference be- tween the logarithms of the quanti- ties represented, or the quotient re- sulting from the division of one by the other; that is, the ratio of one to the other. Such divisions are accomplished mechanically by stepping off the dis- tance with dividers in a _ process analogous to the setting of a slide rule, The ratio may be reversed; that is, ex- pressed in terms of reciprocals as the distances are stepped off upward or downward, and multiplications may be accomplished by addition instead of by subtraction of distances. Rates of change in geometrical pro- gression are indicated graphically on the ratio chart, the ratio which each term bears to the next following in the progression being represented by the angle between the “curve” or the trend line and the “X” axis. Thus, on the chart, we may select any two points “A” and “B”. The tangent of the angle at “A” is — when “a” represents the _ vertical height of “B” above “A” and “b” rep- resents the corresponding horizontal distance on the “X” or time axis. Since the vertical distances are on a logarithmic scale “a” becomes log “B” minus log “A” and the tangent is log B—log A b/ B . J > > or V = which is the formula for finding the constant ratio between the terms of a geometrical progression when any two terms and the number of terms be- tween them is known. therefore Elements and Relations Compared To establish an historical back- ground against which this whole pic- ture may be projected, an historical chart has been prepared with the events recorded so arranged that they will correspond in spacing with the time scale of the other charts, which will follow in the succeeding articles. In this way the historical chart may be set opposite any of the other charts and the varying changes in magnitude and rates may be related to the events with which they were coincident. It is to be kept in mind, however, that coin- cidence does not of necessity imply 4 causal relation. The component parts of the picture will be separately shown and related on the charts in the _ following manner: 1. Employment and Wages This will show, first, the broad view of the entire population and _ its growth, then subdividing the popula- tion as a whole into its groups as they relate to employment and employ- ability with respect to age, marital condition, environment, and occupa- tion, ploye then ment occu] whic wage turil of d earn com] num to t] wag age and var suc] the wag be de its 1s re od a a» & ALTER S. GIELE knows the machine and its works from first hand experience, as well as from observation and study. He has served apprentice- ship as pattern-maker, molder and machinist, and is a graduate of Allegheny College in Arts and Science, and of Cornell Univer- sity in Mechanical Engineering. While at the latter university, he was editor of the Sibley Journal of Engineering and was elected to the honorary society of Sigma Xi. His practical experience in the management of mechanized in- dustry has been noteworthy. He has been works manager and de- | signer of the Stoever Foundry & tion, The number of wage earners em- ployed in manufacturing industry is then isolated from the total employ- ment of all those engaged in gainful occupations, and on the same chart on which is shown the total number of wage earners employed in manufac- turing industry is the total amount of dollar wages paid to these wage earners, so that it is thus possible to compare the rates of change in the numbers of wage earners so employed to the total wages paid to these same wage earners, and to derive the aver- age annual earnings per wage earner, and in turn to readily compare the variations in the rates of change in such average annual earnings with the rates of change of numbers of wage earners and dollars paid. 2. The Price Level and the Cost of Living This will show, first, the variations in the index of wholesale commodity prices over the long period of years covered, together with the rates of change, that is to say, the rapidity with which prices have risen or fallen during this period, thus making pos- sible a comparison in terms of the changing purchasing power of the dol- lar unit. Second, the cost of living is shown in relation to the annual dollar wage per wage earner, thus making possible a comparison between the money actually received by the wage earner and the relative quantity of commodities he has from time to time been able to buy with that wage; that is to say, his real wage in terms of his living. Certain supplemental charts will be shown in connection with these charts, depicting on a larger scale relations between cost of living (involving re- tail prices of goods and services) and wholesale commodity prices. These supplementary charts show the rela- tive response in point of magnitude of the retail and wholesale prices in- volved and indicate the measure to which the index of wholesale prices may be applied where cost of living data are not available on a comparable basis. 3. Mechanization and Investment Charts are shown depicting the horsepower capacity of prime movers installed in manufacturing industry at the various census periods, com- pared with the number of wage earn- ers employed in utilizing this horse- power capacity, which makes possible not only a comparison of the rates of growth of these factors, but also makes possible the derivation of a curve depicting the average horse- power capacity per wage earner, and its relative rate of growth. A chart is also prepared showing the other side of the same picture; that is to say, the total primary horsepower capacity installed in manufacturing industry compared with the index of the physical volume of production as distinct from the pecuniary volume of production. The fluctuations in the price level are such that the pecuniary volume would in itself give no indica- tion of the relation between applica- tion of power to the processes of man- ufacturing industry and the physical volume produced. The comparison on this chart makes possible the deriva- tion of a curve representing the horsepower per unit of physical vol- ume, which is a measure not only of the mechanization of manufacturing industry, but also of that part of the investment in manufacturing industry actually applied to manufacturing. Supplementary charts will be shown representing estimates of money in- vestment in manufacturing industry. a & & Mfg. Co.; works manager and special engineer of the Harrison Safety Boiler Works; president and general manager, Lebanon Gear & Machine Works, and di- rector, Meadville Malleable Iron Co. Mr. Giele has been in con- sulting practice for some years and has officiated as receiver in reorganization or liquidation of a number of important manu- facturing properties. In addition to his preliminary academic and professional train- ing and his subsequent activities, Mr. Giele has studied corporate finance and business cycles at New York University and the University of Pennsylvania. These are supplementary charts by reason of the fact that it is very diffi- cult to allow for the changing volume of the dollar unit, and also exceed- ingly difficult, from the data avail- able, to separate that portion of the investment of any enterprise or groups of enterprises devoted spe- cifically to manufacturing as such from the portion of investment de- voted to other activities of the same enterprise, such as distribution. 1. Physical Volume and Productivity Charts will be shown depicting the dollar volume of production in the manufacturing industries and also the dollar volume of value added by man- ufacture. The definition of the Bu- reau of the Census is that the value of the product is the aggregate of the amounts for which it is sold by the manufacturer while the value added by manufacture is the money for which the product is sold less the sum of the items of cost of materials, of fuel, and purchased electric energy. Comparison of these two curves on the same chart visualizes the relation between the total value of the product and the value added by processing in the manufacturing plants. In this connection also will be shown a chart on which is derived a measure of these volumes on a per wage earner basis by comparison with the curve of the number of wage earners em- ployed in the industry studied. Charts will also be shown exhibiting the value of the product and value added by manu‘acture in comparison with the wholesale price index, from which comparison is derived a curve which is a measure of physical vol- ume and which can be compared with the index numbers of physical volume derived in other ways, as a cross The Iron Age, February 2, 1933—189 | ) . ) ) ' {ANCOR NONE A Nt PEI ET PR ART LE NOL TEGO IIE OLY IEE I ST | RE TEAS SEE check. These charts also make pos- sible a comparison of value of prod- uct and value added by manufacture on a dollar basis, and on physical vol- ume basis with total wages per wage earner, total horsepower, and total horsepower per wage earner. 5. Hours of Labor and Hourly Rates A chart will be shown exhibiting the total wages paid to all wage earn- ers in manufacturing industry on an annual basis, and the index of average hourly wage rates makes possible the derivation of a curve showing an index of the total average hours annually worked by the wage earners in earn- ing these wages, establishing a trend which is an index of the average annual hours of labor worked by the wage earners in all manufacturing in- dustries. 6. Finally, the component parts hav- ing been shown separately, a study will be presented of the inter-relations and the effects of the changes and rates of change of these component parts on each other, to be covered essentially by a comparison of: (1) Real wages with productivity (2) Mechanization (or investment) and productivity (3) Mechanization and employment (4) Wage earners’ share of the sales dollar (5) The wage earner’s producing power compared with his buying power, and (6) The effect of mechanization on working conditions, living condi tions, and hours of labor Historical Chart Referring to Chart 1, accompany- ing this introductory article, even a very casual reading of the events as they are recorded with the passage of the years and of the generations will at once impress the reader with the remarkable repetition in regulated cyclical order of almost the same se- quence of events, varying only in the setting of the times in which they oc- curred. In fact, if the dates and names were removed and the cards were shuffled, it would be extremely difficult to rearrange the events in their chronological order, so closely do they follow each other in typical character- istics. Thus we find in 1829, more than a hundred years ago, a rapidly grow- ing and widely extended country in which transportation was the great need most in the public mind. Accord- ingly we find in the canal building boom of that era an expansion of in- vestment in capital equipment such as has found expression in response to changing needs generation after gen- eration since that time. We find that the speculative excesses which came with that boom resulted in 1837 in a collapse during which every bank in the United States closed and six States repudiated their public debts, resulting in a depression which lasted five years. This depression, which in the environment of its day must surely have been comparable in its tragic effects with the severe depres- 190—The Iron Age, February 2, 1933 sion through which we are now pass- ing, was, however, soon forgotten. By 1857, only 20 years later, the canal had been succeeded by the railroad as a vehicle for the expansion of capi- tal investment and the excesses of the then very recent past resulted in another collapse. The country was swept by the first of its two great rail- road panics, in this case falling almost entirely on the rising manufacturing industries of the North and leaving the agricultural South practically untouched. The inequality of economic welfare served to intensify the grow- ing misunderstandings between two great sections of the country, sep- arated by diverse economic interests. This inequality of economic status probably overshadowed any differences over the questions of secession and of slavery and fanned the flames which were even then kindling the first sparks that were later to blaze out in the Civil War. Civil War Prostrates Industry In 1861, the conflagration swept the country—a struggle which was to last four bitter years. Little can we of this day, recalling the disruptions of an external war, picture the chaos of internal war. The South was deprived of the manufactured products of the North. The mills of New England were deprived of the cotton of the South. Every tie on which depended financial and commercial relations was torn asunder. Transportation was blockaded. Men on both sides left their businesses to join the combat. All peace-time activities gave way to the necessity for munitions of war. The end of the struggle found a nation prostrated though united. The South found itself not only impoverished by destruction of man power and of prop- erty but with its entire social and economic structure collapsed. Eighteen hundred and sixty-six was, nevertheless, marked by active busi- ness in the United States, with full employment of labor at increased wages. The recuperation from the war was rapid and the six years from 1867 to 1873 constituted a period of expansion in industry and transporta- tion during which 30,000 miles of new railroads were built. This expansion in railroads alone doubled the entire mileage that had been in service in the country in 1860. While commodity prices were fall- ing from their war time peaks, wages rose and physical volume of produc- tion increased. The iron trade was unusually prosperous. Speculation was active and railroad stock prices were on a high level. Industry was not greatly affected by the financial panic of “Black Friday”, Sept. 24, 1869. The Panic of 1873 In 1873, the third week in Sep- tember brought a financial panic accompanied by an industrial crisis which “left the country’s financial and commercial structure almost 4 ruin”.... “The most serious weak. ness was disclosed in connection with railroad building. ... Before the crisis construction had had to wait upon the slow sale of bonds or the venturesome advances of bankers, and after the crisis construction had to be discontinued altogether, leaving a large mileage connecting nothing in particular.” The crisis, which came as a surprise to the business community, was preceded “Ly the failures of the New York Warehouse & Security Co, and the banking house of Kenyon, Cox & Co. Other failures followed, among them that of the well-known house of Jay Cooke & Co. The prices of secur- ities fell violently, the New York Stock Exchange was closed for ten days, clearing house loan certificates were issued throughout the country, and the banks restricted or suspended currency payments. Real estate, wholesale prices, then retail prices and finally wages declined. The currency had been over-inflated, railroads were over-built, over-trading and extravagance were general on every hand. Cities and corporations had rising budgets and there were many scandals in the management and financing of railroads, banks and insurance companies. Thus the de- pression wore on with alternate hope and despair, apprehension and re- stored confidence. Finally, with a record volume of production in man- ufactures, minerals and crops and a good market abroad, the tide of the five-year depression was turned in 1878. In 1879, specie payments were re- sumed, restoring confidence and accom- panied by a rapid rise in commodity prices (though, as will appear later, the underlying price trend was still downward). The United States was still predominantly agricu'tural and a huge grain crop with high prices had a: buoyant effect on the production of minerals and of manufactured goods as well. In 1882, storm clouds again began to gather and 1883 was marked by many failures, a depression in the iron trade and declining prices. For- eign confidence was shaken and by 1884 there was a pronounced outward movement of gold, and foreign capital which had been invested in the en- thusiasm of the post-war reconstruc- tion period began to be withdrawn. A long series of important failures was followed by serious labor troubles. By 1887, the atmosphere had again cleared, railroads had been reor- ganized and railroad building resumed on a grand scale. The crop situation improved and prices were good. Tre- mendous construction programs were supported by an influx of British capi- tal and the circulation of national bank notes was contracted through government debt reduction. Currency difficulties, however, were working toward an acute situation of “silve passa pill i and ¢ and W lowed crops condi put d Fede! demp The 1892. ruptc The | led t tary Note had purp Th by a 1849 five lasted h pad begun in 1829. Depression tive excesses whic ted blic debts. ith which to t railroad panics fe ed following the speculsa eix States repudia supplied cheaper money oom collaps closed and State rnia Gold Rush € +he Country's two grea cansl building b 1649 The Califo eace aon... Sinat A 1857 The Ss t a weak. 1 with e the . Wait or the S, and to be ng a ng in me as unity, f the y Co, , Cox mong ise of ecur- York r ten cates ntry, nded state, 3 and ated, ding | on tions were nent and de- nope re- ha 1an- da in r'- ed re of Depression lasted five pn ti B. 2 public debts. 1849 The California Gold Rush supplied cheaper money with which to discharge d 18657 The canal building boom collapsed following the speculative excesses which nad begun in 15629. “silver saturation” by 1890, and the passage of the “free coinage” silver bill in 1891 disturbed sentiment here and abroad. A new outflow of gold and withdrawal of foreign capital fol- lowed. A high aggregate value of crops, combined with unfavorable crop conditions abroad, was a bright spot but deficits were accumulating in the Federal revenue and the “gold re- demption fund’ was being depleted. The Homestead strikes occurred in 1892. The Reading Railroad bank- ruptey occurred in February, 1893. The outflow of gold early in the year led to the announcement by the Secre- tary of the Treasury that Treasury Notes would be redeemed as long as he had gold “lawfully available for the purpose.’ There followed a panic punctuated by a series of disastrous failures of 1849 1859 1869 1879 1889 products and turned the tide of the depression. drawal, deficits in federal revenue, depletion gold fund. Currency had been over-inflated, railroads over-built; over- were built. For comparison, total miles in operation, 1860, 80,000 and 1870, 52,000. egislation, Government debt reduction. Currency saturated with silver and difficulties becom trading and extravagance was general, cities and corporations had rising budgets, there were scandals in failures elsewhere created demand for American railroads, banking and insurance. Period of deflation and struggle to resume specie payments. the South untouched, thus helping to split the Country prior to the Civil War. wholesale prices, retail prices and wages. 1886-1889 Tremendous railroad construction and influx of British capital. Contraction of Bank notes through 1857 The first of the Country's two great railroad panics fell on the rising industries of the North but left 1867-1875 Six years of expansion in industry and transportation during which 50,000 miles of new railroads 1875 Introduced a panic beginning a long period of declining values. Securities fell first, then real estate, 1882-1885 Heavy gold exports and foreign capital withdrawals. 1879-1882 Specie payments were resumed. 1861-1865 The Civil War. 1890 Silver currency 1878 Crop a Oe Z a ba v > eal oO oS o he 0 z 3 hy 8 et o D 5 cj “4 os Jee 3 a Q oO a aQ s a = g 3 73 a ° So j ~ oO > oa a 3 » a a qa a oO z - Oo ery 2 a, «© o @ et ,. 7 a ° 0 = ° et cee » 8 3 a § te Yo 4 wo Qo @ a 4 ws > ot 5 be & a o ee i Q, § Sal » 8 cet : Oo ue ° vo fo] vv o @o ea banking and commercial houses. There were, in a single year, 156 railroad receiverships, including such impor- tant roads as the Lake Shore (now part of the New York Central Sys- tem), Erie, Northern Pacific, Union Pacific and Atchison. In 1894, as had occurred in the 1870’s, hope revived, railroad reor- ganization plans were announced and the Government’s financial position improved. The year was, however, marked by the gravest of labor diffi- culties, including the bitter Pullman strike and the widespread strike of the American Railway Union. Federal troops were sent into Illinois to con- trol the situation. Coxey’s army of unemployed marched on Washington. In 1895, the outflow of gold again increased and the Government re- serve was decreased. I899 I909 I919 1929 2 o aa o - a 3 c x A decade of bumper crops 1925 Wage, price increases. 1924 Coolidge elected. Heavy financing. High farm product prices stimulate industry. g and manufacturing y prices. Era of consolidations. 1906 United States Steel Corporation resumes dividends. Railroad dividends are increased. and domestic bond issues. Relief Legislation. Large domestic stock issues. Stocks collapse. 1950 Large domestic and foreign bond issues. German loan, Austrian loan. Security prices again collapse. production in mini Dissolution many corporations.1915 Federal Reserve Act. ish-American War. High geregate value of crops. prices. 1898 Sp 1910-1912 Roosevelt splits Republicans. arm b Note-Adapted from chart of Statistical and Chronological Records, 1875-1950, prepared under direc- tion of Warren M. Persons, for Barron's, "The National Financial Weekly," and other sources. and of hig sued and foreign credits were extended. Armistice signed in November. 1919 Victory loan, wage increases, and strikes. Largest crop value. 1920 Gold outflow, rail wages increased. tion. 1897 Rising 1917 We declare war. British war loan. I and II Liberty Loans. Government grants coal and rail wage increases. 1918 Third and Fourth Liberty Loans. War Finance Corporation, Treasury certificates of indebtedness were is- t o ® ca oO a e q wd * * 5 aA < 2 > s a » a o e 4 »Y g © n o Oe a § ba o > 4 oO °o © tu 7 oe ° 5 oe o cs © i? 3 < a ° Oo © ° a 4 s °o 8 4 3 4 Ss o 7 & od ® ba ° be oO o @ a 1907 Tight money. Legislation against corporations and railways. No market for bonds. Banks fail. 1914 War panic. Stock Exchange closed. Gold exports. 1915 War orders. 1916 Anglo-French loans. 1921 Price declines, wage reduction. German mark collapses. 1922 Wage reductions. 1925 $2 wheat. England returns to Gold Standard. Large security issues. 1927 Building active. Grain high. 1908-1909 Acute panic passed. Rail baiting continues. Payne-Aldrich tariff enacted. 1928 Hoover elected. Increased mail order and steel sales. Large foreig 1929 Wage increases. This chronological chart of economic events is reproduced to the exact time scale which will -be used in the factual charts in Mr. Giele’s succeeding articles. It may, therefore, be super- imposed upon them as an aid to the interpretation of cause and effect. In 1896, there was renewed liqui- dation of foreign holdings and a further violent outpouring of gold. The Baltimore & Ohio and other im- portant companies went into receiver- ship and business sentiment was gen- erally unsettled by Bryan’s free silver campaign, McKinley’s election in No- vember brought improved feeling and business began to pick up. The long commodity price decline which had begun in 1866 ended in 1896, and 1897 saw rising prices and a large export demand for grain. The War with Spain In 1898, the tension over the Cuban situation culminated with the blowing up of the Maine in Havana harbor and the declaration of war with Spain on April 25. Mining and manufacture were further stimulated by the psy- chological effects of military successes and of abundant agricultural crops. In 1899, the American Steel & Wire Co. and numerous other large cor- porations were organized, inaugu- rating “big business.” In 1900, the “gold standard” was enacted and McKinley was reelected. Prices were good but there was a serious strike in the anthracite mines and the iron and steel industries were depressed. In 1901, the United States Steel Corpn. was organized and there were a number of large bank and railroad consolidations. A world-wide rise in commodity prices was gaining impetus and production was high. In 1903, labor troubles had become graver in many parts of the country and Colorado strikers were placed under martial law. In 1904, United States Steel passed its dividend and strikes continued in many industries, though the steel in- dustry had some stimulus from for- eign business as the year progressed. Theodore Roosevelt, of “Rough Rider” popularity, having previously suc- ceeded to the Presidency at McKin- ley’s death in 1901, was elected. Crops were abundant and crop prices high. “Trust Busting” Begins In 1905, “trust-busting” activities began with investigations and orders to distribute holdings. Wage rates con- tinued to advance. Charles Evans Hughes exposed life insurance scan- dals. In 1906, United States Steel re- sumed dividends and some of the rail- roads increased theirs. Labor diffi- culties were adjusted and laws regu- lating corporations, pure food and meat inspection were enacted. Crops reached a new record aggregate value. The year 1907 brought extensions of investigations and of suits hostile to railroads and other corporations. Judge Landis fined the Standard Oil Co. $29,240,000. There was no market for corporate or municipal bonds and there was a wave of important fail- (Continued on Advertising Page 16) The Iron Age, February 2, 1933—191 | i . Fig. 1.—General appearance of one of the locomotive wheel centers. OCOMOTIVE wheel centers, cross-heads and other castings subjected to severe shocks and stresses are purchased by the railroad companies under specifications calling for high physical properties, which until recently have made necessary the use of expensive alloy steels. Some of the railroads have been con- tent to specify only the physical prop- erties required, leaving to the man- ufacturers’ preference the alloy to be used. Other companies specify the alloy to be used as well as the physi- cal requirements, and various alloy steels have been tried in service, in- cluding nickel, chrome-nickel, chrome- vanadium, etc. The physical prop- erties called for by these “alloy” speci- fications vary with the different rail- road companies, but the great major- ity will fall within the ranges shown in the following tabulation: Ultimate tensile strength, 85,000 to 95,000 Ib. per sq. in. min. Yield point.. 55,000 to 60,000 Ib. per sq. in. min. Elongation in 2 in............. 22 to 25 per cent Reduction of area..... ...40 to 50 per cent Quenching in a liquid medium was formerly forbidden with the result New Heat Treatment for Carbos,,o| that annealing, or at best normalizing or normalizing followed by a draw heat, has been the rule for castings made under these specifications. All of the “alloy” specifications set up maximum allowances for phosphorus and sulphur contents, which are quite generally 0.05 per cent. One company establishes 0.045 per cent as the allow- able maximum for both elements, while another company permits 0.06 per cent of sulphur with 0.05 per cent phosphorus. Welding of minor blem- ishes is sometimes permitted, but only in localities not subject to stress, and then by special permission of the rail- road companies’ inspection depart- ments. Needless to say, inspection for castings made to these specifications is exceedingly rigid. During the last year or so, the rail- road companies have been consider- ing the use of carbon steel castings, heat treated by quenching and draw- ing, to meet the physical requirements of the “alloy” specification. This was considered to be quite a radical de- parture from existing practice, and occasioned a great deal of discussion between the foundries and the en- gineers and designers of the railroad companies. Several foundrymen of ex- perience expressed the opinion that carbon steel could not be heat treated to meet these specifications, and also that the design and size of wheel cen- ters, cross-heads and the like would make the quenching of such castings an extremely hazardous operation. Several months ago one of the largest and most progressive railroad companies placed an order with the ~~ & & NEW departure in the heat treatment of carbon steel castings for railroad locomotives is described in this article. The treatment involves quenching in water followed by drawing—a practice hitherto not permitted by the railroads for such castings. The adoption of this method was considered a radical departure. Details of the practice and equip- ment used and the high physical properties obtained are given. — Bonney-Floyd Co. of Columbus, Ohio, for large wheel centers for high-speed electric locomotives to be made of car- bon steel, heat-treated by quenching and drawing to meet the following specification : Ultimate tensile strength. 85,000 lb. per sq. in. BID Bas cis So's cca vtws 55,000 Ib. per sq. in. Elongation in 2 in... . 22 per cent Reduction of area......... 40 per cent For several years the Bonney-Floyd Co. has been advocating the use of heat-treated alloy and carbon steel castings and has installed modern heat-treating furnaces, quenching tanks and handling facilities which are essential if heat treatment is to be successfully carried out. The railroad company, in search of a dependable source of supply for castings of this character, thoroughly inspected the molding machines, melting and heat- treating furnaces and other equipment at the Bonney-Floyd plant before placing the wheel center order. One in Fig. rough hub is are 24 1% in. rim is casting pons Vv each ¢ bars. | electri capaci made a hea chemi as fol Carbon Mangar Silicon The ¢ made f averag¢ Only fe iG. 2.—The heat- treating furnaces and the quenching tank. Ry 192—The Iron Age, February 2, 1933 ‘be teel Locomotive Castings . eat reel ves hio, eed -ar- ing ing One of these wheel centers is shown in Fig. 1. The overall diameter in the rough is 56 in., the diameter of the hub is 18 in. There are 13 arms which are 2% in. at the top and taper to 1% in. at the bottom. The face of the rim is 5 in. and the weight of the casting is 1650 lb. in the rough. Cou- pons were cast on the hub and rim of each casting to be used for the test bars. The steel was made in an acid electric furnace of 3-ton per hour capacity. Three wheel centers were made per heat which also constituted a heat-treating furnace charge. The chemical composition of the steel was as follows: Per Cent Carbon , ..+- 0.28 to 0.35 Manganese eae tan a keane 0.85 to 0.90 Silicon .. rerio we edema 0.35 to 0.45 The average phosphorus content on all heats made for this order was 0.037 per cent. The average sulphur content was 0.030 per cent. Only four heats showed over 0.04 per cent phos- Fig. 3.—Appearance of one of the wheel centers after the drop test. phorus and only two heats over 0.035 per cent sulphur. All castings were quenched in water and drawn (or tempered). The fur- naces used are shown on Fig. 2. The quenching tank is shown at the right. Three wheel centers are shown on a tray resting on the piers of the fur- nace car. The tray is handled from the furnace to the quenching tank by an overhead crane carrying a semi-auto- matic latch which prevents delay in picking up the hot load. It is possible to have the castings in the quenching tank in 40 sec. from the time the door is opened. Movements of door and car are mo- tor driven and controlled by push buttons operated either from the floor or from the crane cab. The furnaces are gas-fired and controlled by re- cording automatic pyrometers. The temperature control equipment is shown at the left of the illustration. The design of the furnaces is such as to insure circulation of heat above and below the load and extremely uniform temperature throughout. Coupons for test bars were broken from castings after being stamped with the serial number of the wheel and the railroad company’s inspection mark. Test bars were pulled by the railroad’s testing laboratory and also duplicates were machined and pulled at the manufacturer’s plant. The aver- age results of all the tests pulled for the order, representing 47 heats and 94 test bars, is shown below: Ultimate tensile strength. ..94,020 Ib. per sq. in. Yield point....... . 69,480 Ib. per eq. in. Elongation in 2 in. ....+.+.26 per cent ..-61.0 per cent Reduction of artea.. The Brinell hardness results averaged 180 and the company which machined the castings reported them unusually uniform and_ readily machinable. Steel of this character shows 40 to 45 ft. lb. on the Izod machine. It will, of course, be understood that the physical characteristics of 0.30 per cent carbon steel can be varied to a remarkable degree by variation in the method of heat treat- ment. The tabulation below shows ap- proximately the limits for physical properties, between which limits these properties may be varied by changing the temperatures employed: 0.30 Per Cent Carbon Steel Possible Variation Ultimate tensile strength from 80,000 to 128,000 Ib. per sq. in. Yield point from 55,000 to 100,000 Ib. per sq. in. Elongation in 2 in.....from 30 to 8 per cent The Iron Age, February 2, 1933—193 By A. W. GREGG General Superintendent, The Bonney-Floyd Co., Columbus, Ohio Reduction in area.....from 63 to 16 per cent Brinell hardness number...... from 167 to 253 Izod impact test, ft. Ib....... from 50 to 14 Before starting production on the order three sample wheel center cast- ings were made and machined to de- termine solidity at all points. These castings were submitted for inspec- tion to the railroad company’s test- ing department. Because castings of this size and type had not been pre- viously furnished in a heat-treated condition, the railroad company’s engineers decided to conduct a drop test on the sample castings as follows: They desired the castings to show no signs of fracture when struck three times on the hub by a 5-ton ball falling 20 ft. with the rim supported at three points on a solid foundation. The drop test was conducted at the manufacturer’s plant ‘by the engineers of the railroad company’s testing de- (Concluded on Advertising Page 18) Fiz. 4.—A second wheel center which was subjected to three blows on one side of the hub. apeenpateennatdinaitineaeegineedh eae tt ane MAGNETOGRAPHIC AND X-RAY TESTS OF PIPE WELDS COMPARED HE work outlined in _ this article was undertaken as part of a general research being conducted on non-destructive test and inspection methods. At present, the program is being extended to include the examination of certain of these methods for locating defects common- ly occurring in cold-drawn and hot- rolled steel bars, billets, sheet bar, plate, and seamless and _ electric welded tubing. The tremendous growth of interest in welding and its applications, at- By F. B. DOANE Pittsburgh Testing Laboratory, Pittsburgh tended in some instances by skepticism and doubt as to its efficacy or safety, has aroused widespread interest in methods which, in advance, give prom- ise of revealing something of the soundness of a weld’s structure. In particular this is true where the welds in question are to be subjected to critical or unusual conditions of ser- 1G. 1.—Examination details of electric welded riser (Specimen No. 1, side A). No. 1 is original appear- ance of Specimen 1-A; No. 2 is faulty weld as indicated by Magnaflux; No. 3 is X-ray photograph showing lack of fusion; No. 4 is section taken through center of riser, and No. 5 is the preceding section (No. 4) cut in half. 194—The Iron Age, February 2, 1933 vice. It was, therefore, decided to confine the first portion of this work to the examination of outstanding non-destructive test methods as ap- plied to certain classes of welds. Selection of Methods Three representative methods were selected, the sonic, as exemplified by the stethoscope; the magnetographic, and the radiographic. The stethoscope at present is receiving a great deal of vogue and is finding particular favor in the case of welded structures where other non-destructive test methods may be, and usually are, either diffi- cult or impractical. The value of the radiographic examination of welds is well established and by now has amassed a_ considerable literature. Most of this literature has pertained to the X-ray and its technique. Re- cently, however, the results obtained by Dr. R. F. Mehl and his coworkers at the Naval Research Laboratory in the field of Gamma ray radiography give promise of great value. [THE IRON AGE, May 21, 1931.] In the case in hand, it was felt that, so far as results with this method were concerned, they would be little more than a duplication of the X-ray work; and, as facilities for the latter are somewhat more convenient, it was selected for the present purpose. X-ray equipment used for this work was the G-E type recently installed at the plant of the Union Switch & Sig- nal Co., and used by their courtesy. The magnetographic method, though old in principle, is somewhat newer in application, and the work of Major Hoke and more recent develop- ments and study by Dr. A. V. de For- rest [THE IRON AGE, May 14 and Sept. 17, 19381] and T. R. Watts have aroused general interest. Procedures adopted were along the lines developed by these men. Test Specimens Specimens for examination were made by courtesy of the Power Piping Co., of Pittsburgh, at its plant, and consisted of circumferential welds and welded risers on standard 4-in. lap weld pipe. Both gas and electric welds were used, and in some places they were intentionally made faulty, the rep the goo by of locatio to any the jo On tive te saw-Cl emery a lig! graph ‘ ' a & XAMINATION of outstanding non-destructive test methods as applied to certain types of welds was the aim of the investigation reported in this article. Three representative methods are included: the stethoscopic, the magnetographic and the radiographic. Differences in welds were detected by the stethoscope. Not only good and bad welds were differentiated but faulty areas were located by the magnetographic test. The X-ray gave a more exact indication of the nature and extent of the welds. different specimens. It was difficult, however, to determine with any de- gree of satisfaction to the operator local faulty areas in any given weld. It would be interesting to examine a quantity of this type of work, with a view to determining reliability of stethoscope indications on different sections of an individual weld. In this particular case, no reliable conclu- sions could be drawn from the small number of specimens available. | to re Ss Examination by the magnetographic ‘ork method at once revealed areas of lo- ling location of the faults being unknown removed from the weld area, were cut cal fault in certain welds, as evidenced ap- to any one except the welder who did by torch. by disturbances in the magnetic field the job. Test Results produced by passing a strong mag- On completion of the non-destruc- netic flux at right angles to the axis tive tests, all pieces were sectioned by As a comparison of similar types of the weld. (Circular magnetization ere saw-cuts and smoothed by file and of welds, preliminary tests made with was also tried, but results were infe- by emery cloth. They were then given the stethoscope revealed differences rior to the bi-polar method.) These hic, a light nitric acid etch and photo- in note pitch and clearness, indicating disturbances were easily located in two ope graphed. Unimportant portions, well real difference in structure between ways—one by dusting uncoated “Mag- | of vor ere ods ffi- the is 1a$ re, ed e- by at he ve )N t, Aa od le 1G. 2.—Examination of gas welded riser y (Specimen 2, side A). No. 6 shows original 7 appearance of Specimen 2-A; No. 7 is sound weld indicated by Magnaflux; No. 8 is X-ray Ss photograph revealing sound weld, and No. 9 2, is etched section showing sound weld. t vTvv , t f a. pe Fig. 3.—Examination of circumferertial electric weld (Specimen 3