The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-08-10

and doubtless it will not down unit time and
experience have proved the ability Of the
great Steel Trust to deal with the conditions
shat conYrontit.
One thing that it has already accom-
pllshed in the iron regions ia to give stability
to all the collateral enterprises that are
based upon the iron industry and to rid
the trade Of the greatest curse and blight
that ever fell upon any trade-the secret,
corrupt and preferential rebate Every
man knows now where his business stands.
He no longer suspects that his neighbor
in trade has the power secretly to under
sell him and ruin his business by virtue
of the possession Of secret rebate. The
railroad tariffs are alike to all shippers, and
trade has to face only natural conditions
This alone liz an inestimable boon and ia
worth the price OF all else.
The vicissitudes of the money market
have run the price of the Steel securities
down very low. Probably the causes of
this are not generally apprehended . The
trade conditions do not explain it. The
United States Steel Corporation is far from
being a monopoly, but it has certain in
herent and individual elements Of strength
which sharply differentiate it from the
iron trade as the latter existed before the
Steel Trust was created. When trade
slackens it has not to confront the cut
throat competition Of the old times II
can lessen production and reduce expenses.
Formerly, when trade slackened, production
kept on apace, and the result was that prices
went to zero, unmarketabe stocks piled
UP and bankruptcy ensued. Its most
prominent competitors, like the Lacka-
wanna Steel Company, for instance, have
their own fields and are organized like the
Steel Corporation upon the modern economic
basis. Stability Of prices and stability
OF output are the best guarantees the in
dustry has to offer. The consumers of
iron throughout the country understand
this and they no longer rush in to buy for
fear that the market will run away from
them, any more than they procrastinate
in the hope or belief that the market will
fall. Iron, for the first time in its history.
is becoming a standard commodity, regu-
lated as TO its price by the scientific applica-
ton Of the law of supply and demand.
The United States Steel Corporation is not
n monopoly, but it owns all the raw material
there is outside of that already controlled
and in process of working by it's competitors.
There is only sixty-siH years stock of iron
ore--that is, economic iron ore, Gre that
can be brought to market under the con-
ditions that are to-day essential to profitable
manufacture-n the United States. At
the present rate Of consumption, this vast
deposit of ore will have been exhausted
in sxty-six years. Who is willing to assert
that the annual production of iron has
reached its maximum? Who will venture
the assertion that the tonnage of 1904 will
not be greater than that Of 1903?
Looking back over the history OF the
Pennsylvania iron trade. especially in and
about Pittsburg, for the last quarter Of
century, or since Mr.. Carnegie really came
upon the scene, it becomes q very interest
ing problem as to how the Steel Corporation
will maintain its earnings. Can it con-
tinue to pay per cent. upon its common
stock? Is it beyond reasonable doubt
that It can go on indefinitely earning tho
dividend on it's preferred? 1t is paying
20 per cent. per annum now on the mar
ISet price 81 it's common stock, approx
imately Suppose that $40 were the real
ana uCttpitu Ndllc vi oIcti COulitlOu ana
that 81 was paid on II annually, as at pres
ent, what in the light Of the past, Of the
old era of reckless and ungovernable COM
petition. would its reasonable expecta-
ton Of dividends be2 Its expectation
would be probably about 10 per cent. per
annum. Taking the years when steel was
paupcr with those when steel was king,
estimating the average arbitrarily, be-
cause there is no other way to do it, Steel
common Cat 20) should earn 10 per cent.
Will it do better or worse under the new
and so-called scientific conditions of modern
management? Will stability Of method,
control Of output, economy OF production.
unifcation of processes, and all the rest OF
it, avail to secure a steadier and larger
return upon tho nominal capital? Or will
it be less than it was In the old days Of the
great ironmasters Of the State before the
genius Of Andrew Carnegie dawned upon
the industry? Time alone can determine.