Steel's Unfilled Orders

The unfilled orders of the U. S. Steel Co. have long been considered by economists as a reliable index to the trend of business, for reason that iron and steel are the most fundamental raw materials and that the U. S. Steel Co. is the largest unit in the industry.

Accordingly, publication of the company's unfilled tonnage as of Aug. 31 was eagerly watched for in Wall Street. The future business revealed by the Company's report was 5,414,663 tons, as against 5,910,763 for July 31; 6,386,261 for June 30; and 7,403,332 for the peak of demand on March 31, 1923. The high record since the War is 11,118,468 tons on July 31, 1920. This decrease of 496,000 tons, though not unexpected, was nevertheless disappointing.

The business now on the Company's books is the lowest in 16 months, and at the current rate of production is enough to keep the plants going about five months. The new orders received during the month amounted to about 700,000 tons, of which 200,000 tons were railroad orders. At this rate, should it persist, plants could be operated at only about 50% of their present capacity. The company has accordingly reduced operations to about 85% capacity, as compared with 70 to 75% for the independent companies.

Bidding by Japan for building materials should to some extent improve the situation. Yet, if the unfilled orders are the reliable barometers which they have proved in the past, we are undoubtedly entering a period of declining production and decreasing prosperity.