The Washington times., 1901-11-11
IRON AND STEEL PRODUCTS.
A Special Hcport Issued by Sbe In.
dustriaI Commission

iueut OF the cost and prices OF iron and
Asteel products from RsJ to 1901.
Information contained in this import
ant statement was obtained from four
OF the leading establishments in this
country. The report says =, Earding the
cost and prices OF iron aud s.ccI products.
IN part as follows:
The actual figures given for these costs
cover only the most recen; period. Be
yoad question, there has been steady i'm
prov ments in the methods ofm4nufacture
| tending to reduce the cost Of labor and
lncldentals per unit of product On the
| other hand. the advance OF wages from
HS9 TO 1901, especially. as compared with
the years Immediately preceding. no re-
sdrd to which has been given In making
up the figures. may IN part have offset
| the reduction through such improvements.
| In any case. the comparison as to costs
VIII not be greatly vidated by inaccu-
| Tdcles in the items of labor and incident
! ais. since these represent q comparatively
| small proportion Of the cost Of transform
| inS the respective raw materials into the
| Ilillshed preGacts- IL should, OF course, be
! Isntmbered that large part OF the cost
! .. tle original raw materials Of iron and
Siteel-ore, coke, etc.-is that for labor;
| but, since the raw materials have an as
cei tainable prsce. the margin OF cost and
I psoit IN turning them into pig iron or
| steel may be computed separately.
| . W hlie II can scarcely be hoped that
| the estimates Of cost presented from
| month TO month represent a strictly ac-
! eurate average for all establishments the
| information mas been gathered with sum
CitIt care TO give. II is believed, a fair
! representation of the general movement
| II may specially be noted that, even if a.
| given factor be wrongly computed. ii will.
| II treated as a fixed quantity throughout
IlS ehtlre term OF years. not prevent
| fairly correct gie@ ass the moveuent-of
| costs from time to time"
| Regarding the cost of the manufacture
| or pig iron the report continues:
| The three raw materials in the manu.
Iacture or pig iron are iron ore, coke
twhieh Is used in such large Quantities
rial rather than fueD, and limestone. Ac-
cording to the reports Of several estab.
hshments to the Industrial Commission,
the average quantity of Lake Superior
ore required to produce a long ton (2,2i0
poGndsl OF pig iron is 3S17 pounds: of
coke. 2.o25 pounds are needed and of lime
stone, LOIS pounds. The price OF limestone
has varied little during the past ten years.
and may be taken as approximately 40
cents per ton. plus freight to the mills.
which varies, according to the distance,
but Is comparatively small amount in
the aggregate. The average labor cost Of
making ton of pig iron from the ore as
reported by the several establishments is
~ cents, and the average outlay for ex-
tras and tnctdentals is 80 cents. In prepar-
ing the tables the three factors Of lime
stone. labor, and incidentals have been
treated as a fixed amount aggregating
cost of Sl6S per ton of product.
The average labor cost of turning pig
iron into a ton Of steel billets, as reported
BY the establishments above referred to,
Is $l62, and the average incidental ex-
pense 70 cents. These have been treated
rs fixed factors and added ir determining
the cost of steel billets from month to
month. The selling price of billets Is
that in the Pittsburg market, as reported
@ : 90 Nd hr~ Vfa ~
iron and Steel Association.
1t Is important to note, in considering
the movement of the prices of steel bill
lets and steel rails. that the margin be-
tween cost and price depends almost alto
gether upon the movement in the price OF
pig iron. The price of pig iron usually
follows largely the price Of finished steel
products, so that We find the margin be-
tween costs and prices of the finished
product varying less than the margin be-
tween the cost of pig iron and its selling
price. Amp change in the demand for steel
billets or steel rails quickly influences the
demand for pig iron and Is reflected in its
price. On the other hand, iron ore. the
chief raw material of pig iron, is much
further removed from the finished
product. 1t is produced-not in immediate
response to demand for finished product
but largely In advance of demand. In
deed as already pointed out the price
of ore is fixed for entire seasons II a
practically uniform rate.
1t should De noted further that while
an advance in the price of steel billets or
of steel rails may not materially increase
the margin above the cost, this does not
necessarily show that the manufacturer
of billets or rails derives little advantage
from an advance, and must turn over
practically all of the profit to the manu-
facturer of pig iron. II is a well-knOwni
fact that, at least at present. most of the
large manufacturers of billets and rails
produce also their own pig iron. so that
whatever profit arises in the entire pro-
cess Of manufacture from the ore to the
billet or rail goes into the same hands,
Under the title of steel rails, the report
says that the constituent materials used
in their manufacture are pig irOn-by far
the most important, sptegel. coke, and
coal. the report adds that a large eS-
tabliS!lment in the East reports the aver
age amount of pig iron required to pro-
duce a ton of rails at 2.761 pounds; OF
spiegel, 15f pounds; Of coke, - pounds.
and Of coal. so pounds. The cost of labor
IN transforming pig iron into ton OF
rails Is quoted at Sl.65 by the same firm.
Considerable space is devoted in the re-
port TO general CONNIE nts on the
causes of the Variousemovemcuts in costs.
prices, and margins Of iron and steel.
These often sudden and violent fiue-
tuatiouS show. among other indications.
the great changes in demand sor iron and
ste el products from time to time, and the
marked senSitiVeness of prices to such
changes in demand. No very large stock
of iron and steel is usually held in ad-
vance and when a period of prosperity
causes a great extension of the use OF
tho Sc products. the mills often find them
selves temporarily unable to keep pace
with the demand, while buyers under GER
tain conditions are willing TO pay almost
any price.
1T should be remembered. as regards
all three Of the products under consider
alton, that the published prices represent
the current quotations for cash sales or
future orders. and that large proportion
of the product at any given time is actu-
ally sold under contracts made at an
earlier date. in accordance with prices
then prevailing. Contracts are often
taken which require six months or even
"A year to hll,
changes in the cost of production can not
account for all the changes in prices
shown in the diagrams.
As already indicated, changes in the
demand and in the price Of pig iron can
not Immediately reflect themselves in he
price of iron ore. which is the chief le-
rntnt entering into the cost of pig iron,
since the prices OF iron ore are M silly
nXsd for yearly periods. We find. ac-
e0rslfD..ly in tho casa Of pig iron. very
marked fluctuations in the margin be-
tween prices and cost Of production
whenever prices vary suddenly. il seems
also that any great increase in the price
IF pig iron does not. even at q later time
,ause an equal increase in the cost OF
production. so as TO bring the margin
down TO its former level until the price
fails again
The report concludes with numerous
statements showing the cost
and selling price. with margin between
hem of steel and iron from 1880 to 1901
Pcstcrity's Approval sure.
CFrom the Chicago Chronicle)
The heroism and patriotism of that Off
,er throughout 4 long and active career.