Iron & Steel

There are in the world just two exploited regions where vast iron ore deposits are so proximate to those of coal that cessation of iron and steel production at either one would--at least temporarily-- wreck civilization. One of these regions is in the U. S.--iron ore at the head of Lake Superior, coal in Pennsylvania, West Virginia, Ohio and Kentucky.* The other is in the Rhine valley, where Alsace-Lorraine ore abuts on Ruhr coal./-

Last week the Rhineland coal and iron magnates, after two years of fitful dickering and two months of sharp haggling, agreed, at Brussels, to pool their mineral resources, and to restrict their productions of steel ingots to certain, specific proportions, the one to the other. They call themselves the western European steel consortium.

The Consortium represents French, German, Belgian and Luxembourg iron and steel interests. British interests did not participate. Nor were U. S. producers represented officially.

Two months ago the Western European representatives met at Paris to form such a consortium. But they could not agree on the division of European steel trade. Three weeks ago French Premier Aristide Briand and German Minister of Foreign Affairs Gustav Stresemann lunched together on trout at the town of Thoiry in France, and came away from there with many an expression of mutual esteem (TIME, Sept. 27). Now, last week, international animosities cleared away by politics, or for politics, the businessmen concerned agreed on the German plan of establishing 27,528,000 tons as the base production for the entire group. Germany may make and sell 43.18% of this, France 31.19%, the Sarre Basin nearly 5.77%, Belgium 12.56%, and Luxembourg a little more than 8.23%. Each member is to pay into a pool $1 for each ton he is permitted to make. If he makes more than his quota he pays $4 for every extra ton. If he makes less than his quota, the pool pays him $2 a ton bonus for his continence. Accounts will be cleared yearly. There is a German-French provisional commercial treaty, soon to be signed, which specifically refers to such an entente.

European Repercussions. In the countries whose industrialists have agreed to this consortium there was exuberance and a hope that post-War vituperations might cease. All insisted that the consortium permitted each nation to set its own selling price of steel, that there was no intrnt towards monopoly.

None the less Czechoslovakian and Austrian steelmongers immediately clamored to get into the consortium. It is probable that they will be admitted and restricted to a 2,000,000-ton maximum yearly output.

In Sweden, where remarkably pure steel is made, the Swedish Steel & Iron Trust took form, a 127,000,000 kroner ($34,000,000) organization. No Swedish steel concern will henceforth compete with a compatriot organizer.

*Lesser U. S. coal-iron districts are in Colorado, Tennessee and Alabama. /- Compared to Rhineland iron ore production, that of Great Britain is about three-tenths, of Sweden (important because smelted by low-cost electric furnaces) one-sixth, Spain one-ninth, Czechoslovakia, China, India and Algeria, each one-thirty-eighth.