The Iron Age 1937-02-18: Vol 139 Iss 7

CHESTNUT AND 56TH STREETS, PA. Sales Offices 239 WEST 39TH STREET Owned and Published by CHILTON COMPANY (Incorporated) Executive and Publication Offices, Chestnut and 56th Sts., Philadelphia. Pa. MUSSELMAN, President FRITZ Executive Vice-President FREDERIC STEVENS, Vice-President JOSEPH HILDRETH. GEORGE EVERIT TERHUNE, ERNEST WILLIAM BARBER, Treasurer JOHN BLAIR Secretary NEW YORK, FRITZ FRANK President VAN DEVENTER Editor Editor Emeritus Metallurgical Editor Managing Editor Machinery Editor Art Editor Associate Editors JURASCHEK Consulting Resident District Editors Washington Chicago Cleveland Detroit Pittsburgh MACMILLAN Editorial Correspondents London, England Cincinnati Boston Germany Milwaukee San Francisco SANDERSON ASA ROUNTREE, JR. ALLISON Toronto, Ontario Birmingham Newark, St. Louis Buffalo Contents February 18, 1937 Cutting Malleable Annealing Cycle ........... Economics the and Steel Industry ...... Self-Powered Mobile Handling Equipment ............. Index Advertisers 1937 Chilton Company (Inc.) BAUR. General Advertising Manager DIX, Manager Reader Service ADVERTISING STAFF Emerson Findley, 621 Union Bldg., Cleveland B. L. Herman, Chilton Bldg., Chestnut & 56th Sts., Philadelphia, Pa. H. K. Hottenstein, 802 Otis Bldg., Chicago Published every Thursday. Subscrip- Leonard, 239 39th New York tion Price: United States and sessions, Mexico, Cuba, $6.00; Can- Peirce Lewis, 7310 a Detroit ada, $8.50, including duty: Foreign Ober, 239 39th St.. New York $12.00 year. Single copy. cents. Robinson, 428 Park Pittsburgh Member. Audit Bureau of Circulations Member Associated Business Papers Indexed the Industrial Arts Index. | i cake ¥ . . . Plant Expansion and Equipment Buying ....... \ » 3 | Call RYERSO When hurry for steel, gets quick action Ryerson. Meeting rush requirements quickly and accurately has long been feature Ryerson service. have the steel Experienced organization with unusual facili- ties for cutting, bending forming and special dispatching methods assures fast shipment. When you need steel, draw Ryerson stocks—the largest and most diversified the country. You are sure find the exact kind, size and shape required. you not have the current Ryerson Stock List, will glad send it. Ryerson Stocks Include: Beams and Heavy Structurals Channels, Angles, Tees and Zees Rails, Splices, Spikes, Bolts, Etc. Plates—Sheets Strip Steel, Flat Wire, Etc. Stainless Steel Hot Rolled Bars—Hoops and Bands Cold Finished Shafting and Screw Stock Extra Wide Cold Finished Flats Alloy Steels—Tool Steels Heat Treated Alloy Steel Bars Boiler Tubes and Fittings Welding Rod—Mechanical Tubing Rivets, Bolts, Nuts, Washers, Etc. Reinforcing Bars Babbitt Metal and Solder Ryerson Son, Inc., Chicago, Milwaukee, St. Louis, Cleveland, Cincinnati, Detroit, Buffalo, Boston, Philadelphia, Jersey City 26—THE IRON AGE, February 18, 1937 Y 4 | y ESTABLISHED 1855 ... THE IRON AGE... FEBRUARY 18, 1937 Big Money Contests encouraging note that being offered for brains. Not long ago, the chief reward for exceptional skill and ability along specialized lines endeavor was found the field pugilism. Even years ago, one who was notably proficient projecting his fist another man's chin might realize, fistic combat, opportunity secure prize $200,000 more. Within the past few weeks, similar total rewards have been offered two con- cerns for contests which mental ability and not physical prowess the deciding factor. One our well known makers cigarettes conducting contest popularize its brand, which the total prizes aggregate $200,000. may error, but our belief that this sum represents just about the far merchandis- ing promotional contest. course, expect bold merchandising strokes from the tobacco people, who tap such broad section our American consumer demand. They will probably get their worth increased sales, but the contest not particularly de- signed improve the quality their product. the industrial field and the intellectual contest line undoubtedly represented the $200,000 prize offer the Arc Welding Foundation established for the metal-working industry, not only dollars but purpose, for its purpose draw out ideas and experience that will improve and enlarge the useful applica- tion arc welding. While fundamentally devoted the purpose improving the art welding, this contest has splendid possibilities from the apparatus merchandising stand- point, for the soundest and surest way expand the use functional product broaden its inherent usefulness application disclose its usefulness fields not already known. Incidentally, this broad gage contest which will aid the whole industry. You not need inclose the packing case from Lincoln welder order qualify your entry! More such contests should help the metal-working industry. Vol. 139, No. | ity | is ae } 4 eal > a j various conditions which affect the an- nealability our iron has been the subject investiga- tion for number years. naturally necessary understand thoroughly all the factors which in- fluence the annealing our iron satisfactory casting the shortest possible time. The slightest varia- tion one the factors affecting the annealing sufficient pro- duce unsatisfactory casting. Before the new furnace was con- structed, great deal work was conducted the laboratory electric experimental furnace with program control. The various phases the annealing cycle were studied, which included, bringing temperature, holding tempera- ture, rapid cooling and slow cooling time. The minimum time each these periods was plotted the annealing cycle, and the di- visions the new furnace laid out This work was con- ducted many irons made under various conditions, and finally led what called standard anneal- ing cycle. Periodically, iron checked the laboratory furnace check against the operation the large furnace using the stand- ard cycle. This gives check the factors which affect the rate graphitization, such as, chemical composition, raw materials, change casting, pouring and melting conditions, together with the tem- perature control and cycle used the production furnace. The Saginaw Malleable Division pioneer shortening the annealing cycle the produc- tion regular malleable iron. 1920, the first tunnel kiln for an- nealing malleable iron was built Saginaw, replacing the old type periodic ovens. This reduced the annealing cycle from days. During 1922, the annealing time bend radiant heating tube before alloy rails were installed. 28—THE IRON AGE, February 1937 and develop- ment work during the past few years has resulted reducing the time graphi- tization white cast iron the production malleable iron. This generally re- ferred the annealing process. Malleable foundrymen have long felt the desirability reducing the time required anneal their product. The former 9-day annealing time was far too time con- suming, and naturally very was cut days, and 1926, more rigid control the heating and cooling zones, and slightly changing the original kiln con- struction, the time was again cut 4-day cycle. 1931, new kiln was con- structed, embodying modern prin- ciples heat recirculation and providing flues the cars under- neath the loaded pots. The anneal- ing cycle our iron was further reduced hours. that time, nowhere the country was mal- leable iron annealed tion basis much less than 100 hours. Again, 1936, the Saginaw Malleable leads the malleable in- dustry annealing regular malle- able iron 30-hour cycle. This accomplishment was made econom- ically possible commercial basis mainly the perfection the radiant heating tube creased knowledge controlled atmosphere. The improvement furnace design has gone hand hand with the metallurgical control melting and annealing, and the latter greatly responsible for assisting reducing the annealing cycle. Ts. ‘ 4 \ | Per Cent costly. Saginaw Malleable tors for many years has operated continuous anneal- ing furnaces. Not satisfied with the 59-hour cycle de- termined further reduce the time. The new radiant tube furnace, with controlled atmosphere, described this article, the first its kind the industry. pro- duces standard commercial cycle. The table top page shows comparison annealing time during the past years Sagi- naw. The furnace just installed the Saginaw Malleable roller rail type continuous annealing furnace. handles four individual rows work loaded trays approxi- mately ft. ft., which carry the castings through the furnace, Each row holds trays within the inner doors, measuring 101 ft. The four rows trays ride roller rails and each row has separate hydraulic pusher mechanism. All exposed parts within the furnace, together with the trays and side liners, are made 35-15 Ni-Cr and 12-15 Ni-Cr alloys. order prevent scaling the casting, also provide the proper atmosphere for annealing, not carburize nor decarburize, the atmosphere must controlled within very close limits. The atmos- phere present around 12.5 per cent and 6.5 per cent The entire structure encased welded gas tight casting. Remov- able top plates provided with oil seals supply the entire roof with ° CARL JOSEPH Metallurgist, Saginaw Malleable Divi- sion, General Motors Corp. ° gas tight seal. Each end the furnace provided with vesti- bule, having inner and outer doors, one which always closed prevent air infiltration when charg- necessary maintain the desired bules purged with gas con- taining 1.5 per cent about min. before each “push.” Also, about 3000 cu. ft. per hour gas allowed flow into the furnace atmosphere. The overall dimensions the kiln are 115 ft. ft. The trays are loaded maximum height the center in. About 750 castings are charged per tray, with the trays and liners weighing additional 325 lb. Every min. “push” made, when op- erating 30-hr. cycle, giving daily production about tons castings. From the charge end through the rapid cooling section, the con- struction the furnace fol- lows: WALLS: in. insulating re- fractory, plus in. block insulation, plus in. Magnesia block, total FLAT ARCH: in. insulating fire brick, plus in. insulating powder. The refractory suspended heat- resisting alloy hangers attached overhead supports steel. in. fire brick, plus in. insulating brick between the piers. The slow cooling zone consists of: in. fire brick, plus in. block insulation. FLAT ARCH: in. insulating fire brick. in. insulating brick. There refractory muffle between the tubes and the work which disperses the heat evenly, giving very uniform cooling. The firing the furnace ac- complished U-shaped radiant tubes and low-pressure natural gas burners. These tubes are made view burner equipment for one radiant tube. THE IRON AGE, February 1937—29 ws € | | | 3 \ heat corrosion resisting alloy in. and in. diameter. These tubes are arranged above and below the work and distributed throughout the entire length the furnace follows: ZONE above and below the work. The lower tubes are larger type, having in. diameter firing leg and in. diameter exhauster return leg. The first three upper and first three lower tubes are so mani- folded that they are fired capacity continuously. ZONE above and below, all tubes in. inside diameter ZONE tubes in. inside diameter. above and below, all ZONE all tubes in. inside diameter. Each radiant tube with specially designed combina- tion premix and diffusion type burner that each tube can controlled independently. The spe- cial function this burner produce long radiant flame inside the tube, producing uniform temperature along the walls the tube. Each tube equipped with exhauster which creates negative pressure inside the tube, thereby preventing any leakage products combustion into the furnace chamber case tube failure leakage welded joint. The furnace operated maximum temperature 1750 deg. the holding zone, with temperature variation less than deg. across the hearth. Heat resisting alloy pipes are arranged above and work. Air circulated means fan through the cooling tubes. The temperature automatically controlled that the end the rapid cooling zone maintained 1400 deg. The drop tem- ANNEALING TIME PAST YEARS Periodic First Second Third Radiant Ovens Prior Tunnel Tunnel Tunnel Tube Fur- to 1920 Kiln—-1920 Kiln—1926 Kiln —1931 nace—-1936 Hr. Hr. Hr. Hr. Hr. Min, 80 7 55 13 10 24 Per cent increase anneal- ing time over 1936...... §26 470 340 192 perature 350 deg. six feet accomplished 1.5 hr. The kiln may operated either automatically manually. The normal operation automatic, complete cycle being accomplished means electrical relays and limit switches, follows: the beginning new cycle, Four loaded trays leaving discharge vestibule. 30—THE IRON AGE, February 1937 the inner and outer doors are both closed, the outer doors being locked tight air cylinder locking mechanism, and the. discharge being purged. this time red signal light glows the charge end notify the operator that everything readiness for load- ing the charge vestibule. The operator unlocks the outer charge door means push button, and upon raising the door manu- ally, the red signal light goes out. then rolls the trays manually into the charge vestibule, and upon lowering the door, automatically locks and the purge valve the charge vestibule opened simul- taneously. timer, which may set for any desired purging time, operates green signal light the end the purging interval and signals the operator start the “push.” Upon pressing the button start the “push,” the purge ~, | | — _ ENERAL view furnace looking the charge end. Note ejectors along left side furnace. RIGHT ELDED stee! case and alloy stools for anchoring alloy rails. valves both ends the kiln close, the green signal goes out and the inner doors raise. When both inner doors are completely open, the four pushers start push the rows trays forward. Within five minutes the four trays the ends the rows operate their respective limit switches, located the dis- charge vestibule, which reverse the pushers return them their original position. Power driven rolls the discharge vestibule then move the trays completely into the vestibule that they are clear the inner discharge door. This 4 inner door then lowers, and upon Leing completely closed, unlocks and raises the outer door. When the outer discharge door com- pletely open, the discharge rolls again turn and roll the trays out the vestibule onto receiving table. the trays pass beyond the outer door, they pass over limit switches, which lower the outer discharge door and stop the dis- charge rolls. The door being com- pletely closed, locks itself, and opens the valve for purging the discharge vestibule. the mean- time, the pushers having returned THE IRON AGE, February 18, their original position, lower the inner charge door, and the red light again signals that the cycle has been completed and everything readiness for new charge. anticipated that the cycle may shortened even further due the fact that possible ac- curately control the heating and cooling rates thin layer work, without heavy pots, em- ploying heating and cooling tubes both below and above the work. Furthermore, all the advantages the atmosphere control have thus far been realized. ABOVE | The Economics the lron and IRON AGE permit- ted present this issue summary the findings the Bureau Business Re- search the University Pittsburgh research inves- the and Steel Industry, which will presented book form (two volumes) this month the McGraw-Hill Book Co., New York. The report was written Dr. Carroll Daugherty, pro- fessor economics, Univer- sity Pittsburgh; Dr. Melvin Chazeau, associate professor commerce, Uni- versity Virginia, and Dr. Samuel Stratton, associate professor business eco- nomics, Graduate School Business Administration, Har- vard University, under the supervision and editorship Setting the Study agreeing investi- gate the economic ef- fects the Steel Code took upon ourselves heavy responsibility, responsi- bility analogous that assumed court law when adjudicates complex economic issue affecting the pecuniary interests and emo- tional reactions many conflicting groups. There is, however, one im- portant distinction between judicial responsibility and research respon- sibility. The findings court carry with them the sanction law and, through the executive arm government, the means en- forcement; whereas the findings research group carry sanc- tions and weight except they operate through public opinion, ex- cept they appeal the minds men fair, reasonable, and com- petent. discharging our quasi- judicial function, have sought get the evidence and explore the issues spirit objective inquiry. The findings are now in- corporated two-volume work released February the 32—THE IRON AGE, February 1937 McGraw-Hill Book Co., New York, under the title, The Econom- ics the Iron and Steel Industry. There the reader will find summary statements the findings well detailed presentation the factual and logical basis those findings. the short period avail- able can more than sketch broad outline few the con- clusions from the investigation. will appreciated, then, that possible such sum- mary avoid oversimplification and seemingly dogmatic statements. Our defense must refer you the published work for the sup- porting evidence and analysis well for summary the many other conclusions not discussed this paper. Merely for convenience this presentation shall speak “our findings” and say that “we” found this and “we” found that. want make clear, however, that the three authors the work are due full credit for the analysis made and the conclusions drawn. Dr. Carroll Daugherty, the Uni- versity Pittsburgh, conducted the phases the inquiry; Dr. Melvin Chazeau, the Uni- versity Virginia, the price and distribution phases; and Dr. Sam- uel Stratton, the Graduate School Business Administration, Harvard University, the phases re- lating costs, profits, and produc- tion. responsibility director the Bureau Business Research was limited general supervision and the editing the manuscript for publication, and task here merely that presenting select- items from the authors’ findings. Let say, also, that limitations time and the complexity the industry dictated division re- sponsibility among the authors, primarily between those phases the industry’s economic structure which have their direct incidence price and those affecting labor. Dr. Chazeau and Dr. Stratton are responsible for the conclusions price and related problems, and Dr. Daugherty responsible for the conclusions problems. Financial support came part from the Brookings Institution but | 4 : resume Dr. Ralph Watkins, Director the Bureau Steel Industry University Pittsburgh Dr. Ralph Watkins, direc- tor the Bureau Business Research. The first summary the findings the com- mittee were made public Monday evening, Feb. 15, Dr. Watkins talk before Maurice and Laura Falk Foun- dation Pittsburgh, and ex- cerpts are published here- with. Some the findings ticularly those relating labor matters the iron and steel industry, but are pub- lished because the wide- spread interest that probably will greet this work time when labor relations indus- try are much the public eye. The publication some statements does not imply that THE IRON AGE agreement with the position are highly controversial, par- primarily from the Maurice and Laura Falk Foundation. view the highly controversial nature the subject matter this in- quiry, early the conduct the investigation was agreed, the suggestion Mr. Steele Gow, executive director the Falk Foundation, that parts the manuscript should seen prior publication anyone connected with the foundation. That agree- ment was scrupulously observed. Therefore, this presentation repre- sents the first view our findings the foundation. Although the Brookings Institution suggested the study and was helpful with advice throughout its conduct, has responsibility for the analysis made for any the conclusions reached. Finally, this statement would not complete without mention the Buhl Foundation under grant from which extensive program regional economic research has been under way the Uuniversity Pittsburgh since 1929. This study the steel industry would not have been possible had not been for the research facilities al- taken the authors. ready existence and the contacts with the steel industry which the bureau’s regional program had provided. presenting the findings our study shall attempt two things. First, shall outline some the conclusions which have close bearing current problems the industry, and, second, shall direct your attention certain broader questions public policy concerning which inferences may drawn from the study whole. These questions public policy are dealt with the pub- lished work brief epilogue the end Volume II. Il. Some Conclusions from the Study The conclusions will discussed under three heads follows: (1) Conclusions concerning the Steel Code effective instrument for solution the problems the in- dustry and concerning its adminis- tration; (2) Conclusions pertain- ing the price problems the tonnage steel industry; and (3) Conclusions relating collective bargaining the industry. The Code and Its The Steel Code was not only experiment industrial self-gov- ernment, was also bargain. return for undertaking increase the rate wages, reduce hours, and spread employment the face severe pecuniary losses, the in- dustry received mandate set rules and regulations that would eliminate secret price-cutting and preserve and perfect artificial system determining delivered prices. The Code may said have achieved its primary objectives— improvement the conditions labor and elimination “de- structive” competition. But medium for the permanent control the industry its administration disclosed certain vital weaknesses. Products were chosen for adminis- THE IRON AGE, February 18, 1937—33 usiness 4 ad e | J ool | Photo by Robert Yarnall Richie tration under the Code without adequate consideration their economic characteristics, with the result that many products which did not require basing-point sys- tem pricing, and had never been priced, were forced arbitrarily conform. Basing points were designated the basis tradition and compromise without adequate analysis their repercussions upon the interests consuming groups. attempt was made minimize price discrimination the selection these points, and alterations basing points conform with changes production and demand were made difficult rather than easy. But these are errors form which might corrected scheme codification adopted un- der less pressure and more deliberation. The fundamental weakness the Code, experi- ment industrial self-government, discovered the industry’s dom- inant philosophy. The industry was given almost unrestrained grant power regulate its own affairs. The Code Authority—the board directors the American Iron and Steel made the supreme arbiter the industry and vested with powers once 34—THE IRON AGE, February 1937 legislative, judicial, and adminis- trative. These powers were used not reduce price discriminations minimum and stimulate effi- ciency production and distribu- tion, but ferret out practices that permitted price concessions and eradicate them with new regula- tions. The domination few concerns led rigorous control the pricing mechanism, some- times the detriment smaller members the industry, often the disadvantage consuming in- dustries and distributers. Little evidence anything that could interpreted broad economic plan- ning was discernible. short, the industry’s experience Code demonstrates the futility expecting economic reorganiza- tion industry’s policies and practices centering authority group whose financial interests may adversely affected the alteration. Industrial self-govern- industrial body unchecked some impartial agency, cannot ex- pected protect the interests industrial minorities, consuming groups, the general public. Without any reflection the good faith and public spirit the members the Code Authority, may said without qualification that the checks imposed upon that body were entirely inadequate secure proper protection and con- trol. The deputy administrator’s office the National Recovery Ad- ministration had neither the power nor the staff secure active supervision the public interest. The fundamental theory that, return for certain minimum wage and hour standards and for the expectation that employement may increased and that the bargain- ing position labor may im- proved, industry may per- mitted determine its own “fair trade practices,” determine its own pricing mechanism, and en- force its determinations with pro- hibitive fines collectable law contrary all experience and in- consistent with all democratic pre- cepts. There assurance equity social economy such bargain. code authority, matter what its lineage, must regarded exercising public, not private trust. the theory industrial self-government, was put into practice under the Steel Code, that subject grave eral principle that body with its own financial interests stake and with wide powers develop and enforce its own prescriptions not safe defender the public interest. The Price Problem the Tonnage Steel Industry (a) Theoretical has been emphasized this study that the method pricing which socially desirable for any given product cannot ascertained priori grounds nor can re- signed uncritically the repercus- sions those much abused and widely misunderstood forces, supply and demand. Only careful anal- ysis the economic forces which impinge upon the production, dis- tribution, and demand for given product may expected indicate the type pricing system which will secure desirable results. Under free competition the bene- fit improvements industrial technique and shifts produc- tion from the inefficient producer the efficient producer will re- flected improved quality the product and lower price the consumer. follows that free com- petition the public interest, for results the largest possible aw , production and widest distribution the lowest prices justified marginal costs. But the evolution capitalism, although has increasing efficiency production, has tended develop the direction rigidity rather than flexibility costs. Capital equipment not only fixed the sense that, once the investment incurred, total capital costs vary but little with the rate utilization and the sense that machine adapted one product type products can seldom used the production another, but modern capital equipment violates another major principle will not permit the addition sub- traction small increments productive capacity. These elements inflexibility are particularly evident the steel industry, espe- cially the production tonnage products. The investment required integrated steel plant, together with the tendency concentrate those plants well-defined areas low assembly costs and pro- vide efficient utilization steel- making capacity the contiguous building rolling mills, limits the number independent units companies that integrated steel producer can ignore the reper- cussions his own actions upon his competitors. prerequisite simple competitive price—that each producer may disregard the con- sequences his own acts—is ab- sent. has assurance that price cut will increase his share the business. Indeed aware that his competitors, rather than withdraw from the market, can and will meet his price undercut it, irrespective total costs. The beneficent influence free competition even more dubious the steel industry because the inelastic demand for its products. That is, although the quantity that will taken off the market may increase price lowered de- crease price raised, the change quantity demanded never pro- portional the change price but determined primarily general business conditions. Thus, the pressure reduce price confined the desire capture larger proportion the existing market. When this possibility price-cutting, exercised all, tends discriminatory. Retali- ation may avoided price dis- crimination product basis, customer basis, geographic basis. Such price concessions may take one two forms. First, the mill may quote price lower than that quoted its competitors shading the base price, waiving extras, granting rebates. the hands dominating cus- tomer, the “secret” price concession seldom remained secret the trade but was used weapon play one mill against the other. Where very few customers may account for more quarters the entire industry’s output given steel product and where overhead costs are high proportion total costs produc- tion, such breach the pricing structure may widened into price disorganization. That this result has not been frequent one the steel industry suggests the possi- bility that the concessions facili- tated general discrimination be- tween large buyers buyers under the basing-point sys- tem without any serious price competition among the important producers steel. The second type discrimination that in- herent any delivered price sys- tem, unless all productive capacity concentrated single point. Without shading the delivered price any given point, the mill may take business far afield, requiring variable amounts freight absorp- tion its part, and therefore re- ceive varying mill-net prices for its steel. This practice permits mill select its losses with respect its own operating ratio and the de- sirability the particular order taken, without risking price war that would threaten its financial stability irrespective its produc- tive efficiency. With small number impor- tant producers, the larger the over- head costs, the greater the fixed capital necessary production, the less mobile the sources supply, and the less elastic the demand for the product, the more inevitable pricing system that discrim- inatory this geographic sense. All these conditions apply force- fully tonnage steel. tive the presence absence monopoly, the popular sense combination producers banded together fix price, ineradicable economic factors preclude simple competitive price for tonnage steel. “Cut-throat” competition and its sequel—price and market disorgan- ization—might forced the in- dustry for time (i.e., until finan- cial control price leadership became operative), but never pure competition. therefore futile and irrelevant hazard guess what the price given tonnage steel product any given point might “under conditions free for these conditions not exist and could not im- posed the industry. perti- nent inquire the price fair and reasonable and the pricing system designed promote the long-run interests the industry, consumers, and the public. And important require that these interests protected against the monopolistic manipulations sellers. this analysis accurate, clear that the requirements producers, consumers, and the pub- lic, taken conjunction with the economic conditions under which finished rolled tonnage steel must produced and distributed neces- sitate pricing system which will permit freight equalization among mills, stability the published base price, and reasonable simplicity the price structure. The economic fact, which cannot legislated away, that are dealing with industry which free com- petitive price equilibrium not economically Whatever the pricing mechanism used, the public interest may require some degree supervision. (b) Pricing Iron and Steel un- der the Code The outstanding feature the price records ex- amined the absence monthly fluctuations. Price changes were made orderly manner, and for long periods change quoted price was registered. This inflexibility the face varia- tions production and demand, different from the traditional behavior wholesale prices, doubt exaggerated the nominal character published price quota- tions, especially for the pre-Code period. Neverthless, doubtful any amount correction for actual conditions would materially alter the general aspect the curves. The comparative results are harmony with the preceding theoretical analysis. The economic conditions under which tonnage steel produced and sold dictate administered prices, and fewness important sellers maximizes the probability that these administered prices will identical. The marked characteristic THE IRON AGE, February 18, 1937—35 : | ‘hee } the analysis price filings under the Code, the absence inde- pendent action the smaller pro- ducers steel and, indeed, even most the large integrated firms. With few exceptions, fixed basing- point differentials were maintained whether prices were raised low- ered. Price uniformity vidual basing points was the rule rather than the exception. These phenomena occurred during peri- exceptionally low utilization capacity. These findings are inconsistent with the existence pure competition either be- tween basing points. Under the conditions which mark the production and sale tonnage steel, they are inadequate prove collusion, but the absence well- established price leadership the face simultaneous and identical action among groups indepen- dent companies establishes pre- sumption that prices were altered under the Code some measure predetermined agreement. The conviction that the benefits free price competition are eco- nomically unattainable the ton- nage steel industry has developed from theoretical and practical study the case. With few quali- fications, the evidence indicated general price control; whether this control was through agreement through price leadership inconse- quential. The practice compati- ble, even the absence collu- sion, with the economic conditions that characterize the production and distribution tonnage steel. the analysis this study sound, the problem not how force unre- stricted price competition steel mills—an undesirable condition and impossible task the long run —but rather how curb those monopoly elements necessary for efficiency and how afford the maximum protection from the po- tential evils associated with monop- oly. collusion were the core price control, would logical recommend methods price filing calculated hinder agree- ment. But the economic structure itself responsible. Price control steel cannot uprooted legis- lation, and cannot appraised intelligently without knowledge comparative costs. This broad conclusion avoidable: the tonnage steel indus- try represents problem monop- 36—THE IRON AGE, February 1937 oly and monopolistic competition— scattered the courts the Federal Trade Commission but economic structure inherently monopolistic. fair price for steel and the elimination pre- ventable social waste can as- sured under private ownership only some form control can made effective. Collective Bargaining the Industry The labor provisions the Steel Code were settled, during period inexperience and emergency haste and stress, through bargain- ing process which the industry held most the power and most the strategic positions. The industry agreed raise certain its labor standards and make labor contributions financial nature the objectives the Re- covery Act. But openly an- nounced its intention preting section the Code according its own lights. These provisions repre- sented the relative economic strengths the parties the Code; they were the resultant com- ponent the pulls and pressures exerted powerful, experienced industry, less powerful, less experienced Government, and weak, unprepared labor groups. With regard the collective-bar- gaining provisions the Code, the Government labor boards, faced with weak unions and with obdur- ate, powerful anti-union employers standing their constitutional rights, failed, spite notable attempts, resolve the major issues collective bargaining and union recognition. With respect employment se- curity under the Code, certain changes hiring and welfare prac- tices undoubtedly did something relieve the feeling insecurity. The suspicion paternalism, more- over, appeared less prevalent because the introduction em- ploye-representation plans, which were advances beyond the one-sided autocracy pre-Code days. The movement for independent union- ism the industry, which first the Recovery Act fostered, was for while potent threat against arbitrary action management, and Section 7(a) the Act oper- ated prevent and curb manage- ment from wide use retaliation measures (chiefly the discharge weapon). There was, thus, net gain the direction employment secur- ity. Although significant, the possible beginning important trend, this advance, nevertheless, was not great far-reaching justify the conclusion that the iron and steel companies had re- linquished any basic element their control over employment re- lations and over the determination employment security. Some the methods were changed, but not the objectives. There can little doubt that passage the Recovery Act June, 1933, marked the beginning new period labor relations brought the surface certain attitudes that had been developing the minds and emotions American workers and that brought the fore the issue organization. objective analyst labor events under the Recovery Act can fail convinced that most the country’s wage earners were ready for collective group action and that the main issue was over the form which was have. The immediate question was whether the existing unions the “in- side,” company unions were better suited, structurally and function- ally, meet the workers’ urge and need for collective action. Before the Code period only per cent the iron workers were covered trade agreements developed through the practice collective bargaining between independent unions and managements; about per cent the workers were covered em- ploye-representation although failing function collective-bargaining agents for the determination basic employment conditions, served more less satisfactory media for the adjust- ment individual grievances. Con- sequently, not only were about per cent the workers the in- dustry without true collective-bar- gaining facilities, but almost per cent them lacked any organized means whatever for democratic protection against possible arbi- trary actions foremen and other immediate supervisors, against pos- sible paternalism company policies, and against possible un- favorable exercise, company i ~ J q executives, untrammeled nomic (and power. Under the Code, however, more than per cent the workers had opportunities for grievance settlement through employe-repre- sentation plans. Perhaps per cent, the average, were organ- ized outside unions. All all, granted the extenu- ating circumstances haste, com- pany opposition, insufficient funds, one nevertheless justified concluding that the Amalga- mated Association Iron, Steel and Tin Workers during the Code period was unable make the structural and functional adapta- tions required the Code environ- ment and that its constitution was general unsuited meet the needs industrial unionism the iron and steel industry. Most these adjustments were long over- due, but with the financial and leadership resources available the Code period would have been expecting too much that the adap- tations made within the short space two years. The great increase the num- ber employe-representation sys- tems must attributed the Steel Code its Recovery Act setting, e., the impetus given unions the Recovery Act. The evidence shows conclusively that the great majority the plans were favored and fostered the companies order forestall out- side unionization. actual operation the plans continued used most the companies achieve this objective. the plans developed, however, there came sincere recogni- tion many executives the value the plans for the discovery workers’ grievances and the im- provement labor relations. aggressiveness developed among employee representatives, and this factor, together with Government suggestion and measure success following the outside ganizing work, led the companies agree certain liberalizing amendments. Nevertheless, the amended plans still fell short the democratic ideal; they still did not function adequate agencies for collective bargaining between man- agement and men, that term has commonly been defined students labor relations. Ill. Inferences Concerning Public Policy come now broad questions public policy concerning which the conclusions our study, to- gether with inferences that may drawn from them, have direct indirect bearing. shall consider first the labor problem and then the price problem. The Labor Problem has been shown this study (a) that, for many years the Code period, the industry had ex- ercised unilateral control over labor and that that control mainly autocratic paternalistic and frequently harsh and repres- sive and destructive those qual- ities citizenship that are aspired democracy and (b) that under the Code and the Code milieu there was definite improve- ment with respect labor’s right self-expression and provisions for settlement grievances and the discontinuance many repres- sive measures but (c) that there was essential change the aim the face one-sided control labor the industry. precious and freedom associate one’s self with one’s fellows for the purpose serving mutual in- terests and participating deci- sions affecting those interests elemental that one whose concern for the public welfare cannot consider these things subject debate. The problem, however, manner. So-called “rights” not practice exist until they are won. general may said that economic groups secure only those rights which the basis their economic strength they can command. Thus, unlikely that the steel industry will accord its workers the right self-organiza- virtue the workers’ own power. those who wield great power that that power not shared volun- tarily. likely, then, view the forces set motion under the National Industrial Recovery Act and under the various Federal labor relations measures, that shall see bitter struggles for labor organization the iron and steel industry. The Price Problem cannot too strongly urged that almost any generalization re- garding the iron and steel industry will oversimplification and therefore erroneous dis- associated from the analysis from which was derived. Examina- tion the conditions under which Photo Republic Steel Corp. THE IRON AGE, February 1937—37 > SATE ‘ ° | A a Se iron and steel are produced and dis- tributed and detailed study pre-Code prices and filed prices under the Code have shown that here have deal with com- plicated mixture monopolistic and competitive forces which may produce somewhat different results different times. This complexity has its origin not only the vari- ability managerial policy but also, and primarily, fundamental economic conditions. seller tonnage steel prod- ucts, especially generally undif- ferentiated products, can ignore material influence his own actions supply and price. Since the price policy each seller must adopted with due regard its quoted and the policies followed his competitors, ordinarily there will tendency toward monop- oly price, even the absence any agreement among sellers. Im- perfect knowledge the market and uncertainty with respect the effect the seller’s action com- petitors’ policies, however, may lead price competition from time time, especially during years depressed demand. further check simple monopoly price policies found the power inherent the small number important buy- ers some markets, such those for automobile sheets. Despite monopolistic tendencies, therefore, the long-run adjustment ca- pacity demand and the devel- opment new products and proc- esses competitive forces are strong. result this interaction monop- olistic and competitive forces the iron and steel industry, there had developed reasonably flexible price structure for all major prod- ucts; could demonstrated further that price changes approx- imated, without serious time lags, changes the marginal costs these products; then, presumably, there would case for Govern- ment intervention this industry. Our analysis suggests that the bur- den proof rests upon the indus- try. Gordian knot discriminations and conflicting sented the existing price struc- ture for steel enforcing system pricing with quoted prices the mill uniform for all buyers under like condi- tions. This the position taken 38—THE IRON AGE, February 1937 the Federal Trade Commission. The logic this attitude either (1) that pure competition can at- tained the industry even under its present organization collu- sion prevented law (2) that can attained the dis- solution existing corporate en- tities. This study demonstrates that there economic justifica- tion for either these contentions. Our analysis indicates that any standard fair price defined terms equality the mill net violates the economics produc- tion and distribution tonnage steel. conclude, then, that the traditional attitude the Govern- ment, has been expressed the anti-trust laws and the Fed- eral Trade Commission, incon- sistent with the economics the steel industry and therefore the long run doomed futility. Some form basing-point system with the right absorb transpor- tation meet competition quired for most tonnage-steel prod- ucts. is, however, not possible the basis the analysis contained this study formulate defi- nite program public policy to- ward the iron and steel industry. necessary prelude intelligent social control even any rational policy must knowledge. Throughout this analysis the economics the iron and steel in- dustry the authors have labored under the supreme handicap in- adequate data. Available informa- tion such vital problems costs, actual prices, and distribution are inadequate for definitive analysis. The Federal Trade Commission, under delusions bred the anti- trust acts, has used its powers accumulate evidence listic” practices rather than ex- amine the under which iron and steel are pro- duced and distributed. dustry itself, secure its own might, economic sophistry the risks impartial analysis, and, behind screen inadequate data, has conducted its affairs fundamental secrecy. Under these would without warrant draw inference from the conclusions this study that some sort Government regulation should imposed the iron and steel in- dustry. One cannot recommend Government regulation until one has first defined the scope its jurisdiction and evaluated its po- tential effectiveness deal with the issues raised this analysis, and, second, appraised the further problems that regulation would occasion. have shown this study that the so-called pub- lic “supervision” Code adminis- tration the National Recovery Administration inadequate even ascertain, let alone pro- tect, the interests minority groups, aggrieved consumers, the public. But fashion this negative conclusion into positive powers and jurisdiction would blind one’s self alike the com- plexities the industry and the obstacles that beset the attain- ment effective regulation pub- lic utilities this country—funda- mentally simpler problem. More important, must appreciated that the iron and steel industry cannot considered vacuo. highly probable that the eco- nomic conditions that have been found characterize this industry may approximated dupli- cated many other basic indus- tries. Government regulation the steel industry cannot em- barked upon intelligently without consideration the economic, social, and political implications the initial step. refusing recommend any one the alternative forms Government intervention super- vision, the authors must not understood having justified, even implicitly, unfettered private initi- ative the industry. All that maintained that intelligent policy requires further information and lems involved. This task clearly beyond the scope the present study, part because the limi- tations time and funds but pri- marily because there are not avail- able, either inside outside the industry, data adequate for defini- tive analysis. The authors have sought throughout the published work point the issues presented the problems the industry and in- dicate the data necessary their analysis. cannot indulge our preconceptions through tions that carry beyond the limits the data available us. have fore, that Federal impartial and (CONCLUDED PAGE 86) > 4 > the first section this article, published Feb. the author reviewed the his- tory iron ore mining New Jersey. listed the reserves and possible markets this ore, and discussed the role Lake Superior and foreign ores domestic steel production. This concluding section the article emphasizes the metal- lurgical value, future markets THE metallurgical value iron ores determined the iron content, the composi- tion the gangue, the presence metallic and volatile impuri- ties and the physical character- istics the ore. New Jersey mag- netic crude-ores range from per cent iron and the gangue silica, alumina, magnesia and lime. Silica most ores usually low, and there commonly fair quan- tity magnesia and lime present. Contribution No. 105, Class Metal Mining; presented before the Committee Eastern Magnetite Mining and Milling Methods, annual meeting American Institute Mining and Metal- lurgical Engineers, New York. Feb. 15, 1937. The Ores ° ° ROCHE Consulting Engineer, Dover, ° and mining costs Jersey ores. Mr. Roche's thesis that industry can profit both metallurgically and econom- ically through greater use orebodies are yet prac- tically unexploited, and con- stitute valuable national re- serve fully worthy careful consideration Mid-West- ern steel makers. Phosphorus present all ores, ranging from per cent low 0.005 per cent. Impurities, such sulphur, chromium, titanium, manganese, nickel, barium, arsenic, lead, zinc and copper are not found these ores or, present, are such small amounts that the value the ore not affected. The ore mined contains from per cent moisture. All New Jersey iron ores are beneficiated before furnaces, and this operation in- sures uniformity grade and siz- ing. All grades concentrates are made and ores are suitably sized ° for direct charging into furnaces for sintering. The beneficiation process employed Jersey mines magnetic separation, and the present co