Steel Accedes

We are no longer sellers of steel. The large industries tell us what they will pay. Our commodities are sold at too low a price. --James Augustine Farrell, 1931.

Prosperity, depression and a threatened investigation by the Government were unable to change the price of steel rails for a decade. Billets might go up (to $36 a ton in 1929) and billets might go down (to $26 last week), but the price of steel rails mysteriously remained at $43 a ton.*

Last week Myron Charles Taylor, chairman of United States Steel Corp., invited a group of railroad presidents representing the New York Central, Pennsylvania, Erie, Lehigh, Chesapeake & Ohio, New Haven, Lackawanna and Delaware & Hudson to lunch with him in his company's private dining room. He told them how concerned the steel industry was with the lack of orders from their industry, especially at the lack of rail orders. The rail-roadmen suggested that if the price of rails were a little lower they might be interested.

Next day the Steel Corporation announced a $3-per-ton reduction in rails. Bethlehem Steel Corp. as usual followed the leader and offered rails at $40-per-ton. Lest there be thoughts that a collusion existed, Bethlehem's Eugene Gifford Grace explained: "Whatever price for rails we find being asked ... we will of course meet."/- Although the cut amounts to only 7%, on the basis of the average for the past eight years' orders, will mean a saving of only $4,352,000 to the railroads, the steel industry sat back hopefully awaiting a deluge of orders that might soon send men streaming back to factories. First order was that of Illinois Central. It called for 6,000 tons of rails, lifting 1932's total orders to 187,000 tons.

On the prospects of such future developments, U. S. Steel proceeded to vote its regular preferred dividend despite a nine months' net loss of $54,542,431.

*Prior to 1922 rails fluctuated widely in price. Years & prices: 1899, $35; 1900, $30-26; 1901, $28; 1916, $33-38; 1918, $55; 1919, $45; 1920, $55-45; 1921, $40. From 1909 through 1920 open-hearth rails, contrasted to Bessemer rails, commanded an additional $2 per ton.

/-Rails are less competitive than other divisions of the steel industry. Only companies other than U. S. and Bethlehem making rails are Inland, National, Colorado Fuel & Iron.

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