New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-02-11
ANOTHER POOL ABANDONED.

The collapse of the Steel Rail Pool shows that
important ramakng works believe they can
secure larger and more profitable business
through competition in years Of general pros
perity which are expected. than they could
possibly secure through division Of a bust
ness curtailed by arbitrary fixing Of prices
and restriction of production. This Is the
only combination in the iron and steel indus
try which did not come into existence dur
ing the two disastrous years under the Wilson
tariff. In one form or another 1t has existed
for many years, with occasional intervals of
open competition When the maximum output
of steel rails was reached in 1887 the price
dropped from $50 80 during several months
early in the year TO $50 in December, and the
next year to S27 so; it was lifted again to $50
by the end Of 1885, but dropped to $50 the month
the Mckinley tariff went into effect in 1890, and
was maintained at that point until 1893, when 1t
opened at 500 and fell to S24, and in 1895 TO SOD.
In September 1885, it was suddenly raised to
S2S which price was held in spite Of many pro-
tests until January l. when 500 was asked
A rough idea of the profits may be reached
by comparing prices of rails and biets at differ
ent periods presuming that rails have not for
any long time been sold below the cost Of bill
lets, and Of transforming bets into rails. The
difference was about s. per ton In 1887, when
2,101 .904 tons of rails were produced; was about
SO 30 in 1892, when only 1887 SS tons were
made: about 81 80 in 1894 when only 1,016,010
tons were made, and about SO in 1895, with
larger production OF rails by nearly 100000
tons Last year the difference was in some
months more than so, and since the decline to
S24 in January the difference has been nearly
50 per ton. Several Of the great steelmaking
concerns which have not been producing rails
have threatened to break up or break into the
combination by entering the business, and, final
w. the struggle between the great opposing COM
bnaiOns in iron ore and steel resulted in the
withdrawal of the Lackawanna Company, and
in large sale by the Illinois Steel Company at
the equivalent of $40 or less. The difference
between billets and rails at that price Is again
slightly less than 81 per ton. as it was ten years
ago.
The production of rails has been curtaed
from a third 70 One-half, In part because the
substitution of steel for iron rails has covered
from five-siXths 10 seven-eighths OF the entire
mileage. in part because hard times have forced
railroads TO econOmize, and in part because the
difference I'm price between rails and billets was
considered excessive last year and too large to
last so that purchases were deferred as far as
possible. The companies now believe that bet
ter times coming will give them all a chance
for nearly full employment In rail production, If
prices are reduced, and each wants to contend
for larger share Of the Increase than COM
bination will give. Besides. there are the threat
ening outsiders, who would have begun railmak-
ing quickly had the difference between rails
and billets been held at 50 or so per ton, but
will be more slow to undertake the new work
If the difference Is reduced by half, and the
margin for profit much more than half. Whether
so intended or not, the collapse of the pool ap-
pears to be the course offering the largest chance
OF preventing new competitors from entering the
field ard rendering 1t permanently less profit
able.
The history Of this oldest and most successful