The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1913-05-15
Stunning New Skirts of $3.50 Value at S.

all the railroads OF the country in 1910
was 66 per cent. The business or thes
two railroads IS almost entirely IN the
carriage OF ore. and, for the most part
there is no existing or potential coul-
petition therein
The situation OF these railroads. 5
respects investment and proht from
operations is such that the rate uf
proft from the ore traffic ono the IL
vestment fairly attributable to the or
transportation business may he safely
taken as not less than the n TIC
total pront on the total mont
Moreover, in computing the ~ NJ
earnings. these railroads admittedly
provision IN 1910 for depreciation or
the property on account OF the ulti
mate exhaustion OF the ore deposit
from which their traffic Is chiefly de
rived on the basis Of the total invest
ment Gncluding net working capital
and the total net earnings reported !.
these two railroads the rates OF proht
n Northern railway, about 70 per cent,
and for the Duluth s. Iron Range rail-
road. about In per cent such high
is monopolistic in character. and also
affected by a public use common car
rier), are obviously excessive II should
be noted. however. that the eAtraor-
dinarily high transportation rates on
ore from which these profits were de-
rived were considerably reduced by
the steel corporation In lSll, sNOTtly
after the publication Of the first part
OF the bureaus report on the steel In
dustry.
Relation to Net Costs.
1t is evident therefore. ina; IN order
to compare costs with prices for tne
purpose of determining whether the
margin OF pront 10 reasonable or un
reasonable II is necessary to obtain
the net costs OF production. excludins
ials and transportation On the other
hand, ii Is equally evident that wneh
such net costs are used In determining
taken OF the total Investment EN-
ployed t. e.. not only in the immediate
manufacturing processes Tor which
costs are stated. respectively but aiso
ture. production and transportation. In :
sofar they are related 10 the cost
OF the product In question.
rails OF the Steel Corporation in 1910;
namely. 3l6.S7 per ton Is compared
with the average selling price; nancy.
's2745. the profit margin OF SlOIS re-
sulting therefrom must be COMPARED
with the Investment. not only In rali
mills. but also in the steel WORKS piast
furnaces. ore and coal mines o,, tVns
ovens. and transportation facilities
which We're required 10 produce rams
at such low cost.
such a computation Is, from the ma
v however carefully made. the re-
suits obtained must be regarded as sp-
proximate. In making such caicuIa .
TO understate the Investment made. and
consequently IL 10 believed that the
computed rates OF profit are not over
stated.
Profit. on Investment.
Some illustrations OF the rates or
profit on investment are as follows.
For Bessemcr steel rails the net cost
~ the steel Corporation In 1910 was
tnsr neY
mated additional costs ss stated apo.e'
the average selling price was W aso.
giving d profit margin OF uV. Is, nc
Investment IN raw materials transpot-
tstion facilities Misunderstanding plants
and net working capital required Tor
the production OF rails was about soo
per TON OF product. sceor1ihs rh NO i ine
dlcates a rate OF profit OF tnvestment
~ 1874 per cent on rails. ON q similsr
basis the bureaus computations MIA e,o
% 1914 per cent on the Investment
These different rates OF profit iilustrs,s
somewhat competitive for plates n
1910. while VIGOROUSLY noncompeti''Fs
for rails
Periods Covered by Statements
The chief statements ot cost com-
prised in the full report include
average costs % great variety -,
iron md steel products FOR nearly ~
the manufacturing compa MES Tor ths
Nve.year period 1902 10 lsos. ana
ond the costs ~ the Steel Corporation
In 1910 for considerable number on
such products owing 10 the elahorh'e
character OF the hrst statem.nt an!
thc great labor involved IN making ~
m IL was lmpratSicshie 10 bring X
down 10 recent date. Neyertheless
nv means az comparisons OF aNerape
costs ~ production - raw materials
for a lsrg, part 81 the total industry.
and OF typical plant costs Tor tue manu-
rectuiing processes themselves costs
above MATERIAL II - made lear tutt
the costs OF heavy steel products IN
recent years as compared WIN lSVI 10
Cost Variations.
For the period IFh2 10 1906 the gv-
erage costs are shown Tor certain nrn-
ducts nv districts This comparison
shows for example 2 decided adt"n-
tage In the cost ~ assembling mater
iats for the plants located on the
shores OF Lake Erie. as comr AIRED Win
those located in the Pittshurgh dts
trict under the prevailing railroad
rates Oh ore from Lake Erie ports To-
Pittsburgh.
For these Same cost statements. COM
PARSONS are also made between the n't
costs tbut without deduction OF trans
portation piotitst of large COMPANIES
and small companies, which indicate
decided advantage in favor ot the
former Thus FOR Bessemer pig iron
the net cost Onclnding an assumed nor
NAL addition 10 furnace curt IF So
averaged fli6l per ton for the iars"
companies ,-t4.i-S - -s2-fnr- The small
companies This difference was due iii
part to the more complete tntes alton
OF The large companies.
Again fut tile costs OF the steel Cor
.n 1910 the variations In COSTS
Observation-Disclosures are shown Tor IN
dlviduslL plants without dis losinE
their IDENTITY which makes clear th.
wide variation ia individual plant
costs Thus. for the net costs OF no
steel Corporation in 1910. the cost {
Bessemer pig iron ranged from - -
to sl341 per ton Uncluding an a..
sumed normal addition TO furnace cost
Of 30 so az bsforeD.V These data are
combined in various groups