Savannah morning news. [volume] (Savannah) 1868-1887, 1883-02-09
The Big Chicago Failure.

The Union Iron and Steel Company, OF
Chicago, which began in 1868 with capl-
tai of 100000, and that year rolled lts
first iron rail, continually expanded It's
business so that in 1871, when it first COM
menced making steel, its capital had IN
creased to $500, 1000. By successive en-
larcements at various times its stock had
reached s.. OOO, 900, which was the figure
at the time of its recent stOppage OF bust
ness. There were employed about l,SOO
men. who worked four blast furnaces with
a producing capacity soon TO equal 100000
tons year, while the rail mills could pro-
duce about 100000 tons a year, the iron
works some seventy-five tons day; and
the plate mill about thirty tons day.
Naturally enough the suspension Of
such. an establishment provoked comment,
and it would be unusual, at least, If there
were no speculation. as to its causes.
The Chicago Inter- Ocean, which is so far a
pTotectionist paper as to be entirely I'M
reasonable, thinks that the disastrous re-
suit is due to the fact that the company
was taxed too heavily, and that the only
relief is a little more protection, which
''can only enhance the price, while it is
promoting a production which otherwise
could not be conducted at ALL" If this be
true-if it be a fact that, in spite OF the
enormous protection which our tariff has
for series of years afforded the
iron and steel interests of the cOun-
try, this vast industry was compelled
TO stop business simply because the tariff
was not high enough, it does not require
a prophet or the son of one to fOretell
that the unfortunate company is dead
beyond the hope of resurrection, as it may
safely be said that the iron and steel busi-
ness is the one industry which has reached
the extreme limit of protection.
But although a great many thinking
men in the country believe that if this
company cannot live without more pro-
lection it ought to die, yet they insist
the trouble is that it has been protected
too much instead of too little. Congress
man Hewitt, himself no mean authority,
SAYS in his recent letter to Congressman
Cox that the iron manufacturers in this
country need cheap foreign ore used for
Bessemer steel and cheap scrap iron, and
=
being an obstructive and unnecessary i'm
pediment to the cheapening of the cost of
iron. He says furthermore that the de-
preston in the iron business is due solely
to domestic competition, localities in
which iron cannot be made cheaply yield
ing to the superior advantages of other
regions where the conditions of prOduc-
ton are more favorable. Again, the New
York Times, speaking generally, but
probably with this corporation in view,
says:
'There is a plethora in production and
| sales are practically confined to the home
\ market, which is too restricted for their
| needs. Under the stimulus of few years
of success following long period of de-
| preston, appliances and facilities have
| been extended with the inevitable result
! of 'Over-prOductiOn.' For this there is no
| outlet. and stocks have accumulated until
| there is a strong pressure on prices. But
| prices cannot 90 down to the point which
| would relieve the market by expectation
without entaiIing loss, because there is
no chance for corresponding decline III
| the cost of production. The cost of inn
/ ported material is beyond the control of
! our manufacturers. 1t is fixed in the first
| instance in the producing country,
and is greatly enhanced by duty which
| Congress refuses to remove. This holsters
| up the price of domestic materials"
The conclusion which revenue reform
ers arrive at, so far as the tariff laws have
| had any effect upon this corporation, not
taking into consideration bad manage
ment of its affairs or any other conditions,
| is that it has paid more for its raw ma
terials than it ought, that it has been
obliged to face too much competition from
establishments allured into business by
the hope of enormous profits it may have
been one itself andsthat it could not
stand fall in prices, 1t is much more
easy to show that the failure was the re-
suit of too much rather than too
| little protection. if the tariff policy
of the government is to be held accOunta-
| BILE for the misfortune, but as it is a sOli-
tary instance of its kind, perhaps it is as
well to conclude, with the Chicago 1ri-
| bule, that bad, weak, headless business
management did the business for the con-
! corn