Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1890-11-29
THE PIG IRON INnIsrRY.

The declaration of the furnace proprietors
of the Mahoning and Shenango Valleys,
that they must shut down their establish
ments at the beginning of next year unless
they can obtain material concessions in
freight charges and the price of coke, in
PRODUCES an interesting and important
question. For the past year or more the
activity of the iron trade has been such that
the interests which furnished the furnaces
with transportation have enjoyed good rates.
While prices were by no means inflated, they
permitted the makers of pig iron to pay fair
prices for their fuel and remunerstive rates
for the transportation of their raw material
and product. The result has been a season OF
prosperity and activity for the railroad, pig
iron and coke interests in common.
1t has been obvious, however, that the
margin above cost of production in the pig
iron industry was not so great that any
material reduction of prices could be borne
without a corresponding reduction in the
cost of prod uction. The pig iron producers
claim that the time has arrived when these
factors of cost must be calculated on a
closer scale. 1t is evident that such a claim
is not one to be lightly made or contemptu-
ously refused hearing. If it is properly
founded in tine course of the market it will
compel the attention of the interests which
rely on the pig iron producers. The rail-
roads and coke companies have shared the
prosperity of the pig iron interests, and it is
no more than fair that, if for the steady pro-
duction of the industry contraction of the
elements of costs is necessary, they should
share that also. Not only is this fair, but
there is compulsion in the fact that, if the
blast furnaces are not enabled to run, the
railroads and coke manufacturers will lose
more, in the obliteration of q part of their
market, than they would by moderate con-
cessions in their charges.
But there is ground for suspecting that
that announcement is aimed more especially
at an object not specified than at those that
are. The railroads getting remunerative
business from the pig iron interests can
doubtless pay expenses, fixed charges and
dividends, much more easily out OF reduced
rates than they can by keeping up the rates
and losing traffic. The same can be said of
the coke interests. But factor in the
cost of pig iron manufacture. as important
as railroad freights and coke put together, is
the price of ore. 1t is also the fact that the
increase in the price of the ore necessary to
make ton of pig iron, on account of the
improvement year or more age, was greater
than that in railroad treights and ore.
Under those circumstances it is possible to
think that, although the blast furnace man
ayers do not say so, their movement will be
be more urgently levelled in the direction
of reduction in the price of ore than on
the price OF coke or the railroad freight
rates.
This opinion is strengthened by the talk
of an agreement to shut down on the 1st of
January. If the pig iron business were
absolutely at losing level, no agreement to
shut down would be necessary. The furnace
that shut down first would lose the least. and
get in the best shape for resumption when
the market revived. On the other hand. if
there is any profit on production such an
agreement would be valueless, simply be-
cause it would not be kept But the agree
ment might be well suited for negotiations
with the ore companies, which are generally
made at about the first of the year, and the
presentation of a united front by the large
buyers of ore might De of decided influence
on the price in the contracts of 1891.
Naturally if the furnacemen can get
moderate concessions on the cost Of ore,
freights and coke, they will very much i'm
fhair hn
No one can blame them for earnest efforts to
secure that position; but We do not appre-
hend that either their efforts or the necessi-
ties of the case, will require the general
snsnension of production that Is talked of.