The Birmingham age-herald., 1914-10-30


 the greater portion of southern pig iron produced has been sold in the northern market; and this fact has been used many times as evidence of the won derfully low cost of production of the southern product. Does foundry iron sell at sls.oo Birmingham and at the same time sell at S17.35 in Chicago be- cause 1t has been produced $l.ab cheap CT in Birmingham than in Chicago? Not necessarily Birmingham makes more iron than it can use, and the surplus must be marketed. Chicago needs more iron than if makes and can use the surplus Birmingham product at her price. but that the profit on iron used in Chicago which was made in Chicago is greater than the profit on iron made at Birmingham and freight paid to Chicago. Is shown by the figures in pig Iron production in Chicago as against the stationary production in the south ern district. It is too much to expect of one iron making district that 1t can pay sf.35 per ton, or about 25 per cent of the total selling price as freight, to foundries situated close to the furnaces of another good iron producing district and make as large profits-the handi- cap is too great.
 But what Is the natural market for southern iron? It is the south itself. supplemented by export trade. Put the surplus pig iron produced in the south into steel. The larger portion of the steel used In the south is shipped in from the northern district. On the prin- cipal steel products Birmingham can reach with freight no higher than Chi cago or Pittsburg, a territory inhab- ited by 30 per cent of the population tIaI lott Gtnf Co, ida- water are lower than from either Pitts burg or Chicago. True the population of this territory uses less steel per capita than the average population of the United States, but an increase in this respect is noted. It is true, too. that during the transition period the orders will be for small lots and of a diversity of sizes that will initiate against the highest mill efficiency; but these conditions will steadily im- prove as the small industries grow larger. The production of steel ,ingots in the south is steadily incree sing Plants are now being constructed which will increase the production materially. The merchant furnaces will find an increased local market for their iron products as the quantity of the steel made in the south increases. for with 1t there will be an increase in the fabricated steel products which use cast iron parts as well as steel parts.
 Future of South
 As to the future of the iron and steel trade in the southern district. the past marks a period where the splen- did vitality of the iron trade not only kept out irons of other districts but shipped iron into them. while the problem of making steel from south ern iron was being worked out. It has been conclusively demonstrated that from it steel for rails. plates. sheets structural shapes and bars and wire products can be made of as good uniform quality as Is made today anywhere in the world.
 How is it that Birmingham with its reputed possibilities of making the lowest cost pig iron, presents such a poor showing in the growth of it's iron industries when compared with the northern district? An analysis of the south discloses the following facts:
 CD That the low cost which had been claimed for making pig iron in the Birmingham district had been due In part to slximming the cream instead of taking the average cost, in part to improper cost methods of bookkeep- ing and in part to the low cost of la Dor which prevailed here.
 "A limited quantity of pig iron can De NtiJ thOePis f'f e'~ Birmingham district.
 with the present equipment of mines, transportation methods and fur naces in the Birmingham district, the average cost of making pig iron is not very different from the average cost of making pig iron in Youngstown and Chicago, and Pittsburg might also be included by those companies which, like the companies here. own all their raw material supplies.
 This statement will probably come as a surprise and disappointment to those who are familiar with the so- called wonderful advantages of the Bir- mingham district. It is borne out, how ever, by statistics showing how our southern production has remained all most 8 constant, while in the northern district production has rapidly in- creased For the southern merchant furnace to be as big a money maker and as prosperous as northern mer- chant furnace. it will have to have over a period of years nearly the same average price for pig iron as the northern furnace. and it is erroneous to think that Birmingham regulates or even will regulate the pig iron mar ket of the world. It makes low prices on it's pig iron because 1t has to make low prices in order to sell it in north ern territory. and the southern fur naceS will never prosper as they shoulo until market is developed for theii output in the south; nor is there the slightest hope that steel Is ever going to be made in this distict so cheap1y that 1t can be shipped to Pfttsburg and Chicago and return as much profit of the investment as money invested if iron manufactories in those districts Our prosperity is dependent upon find ing a market for our steel products ir the south and upon export trade.
 Influence of Steel Corporation
 "A few years ago the United States Steel corporation became interested IT the Birmingham district. and since that time has spent many millions of dol lars in rebuilding and developing the properties of one of it's subsidiaries Only recently 1t has completed for an other one of its subsidiaries what II said to be one of the most modern nal and wire plants in this country. To m, mind this is perhape one of the mos important developments that has evel taken place in this district. and 1t II |, destined to do more for It's future wei fare than any other one factor. Thil may sound a little bit strange cominf from a competitor. but nevertheless believe 1t to be true. trust that jus in this connection you will pardon personal reference. In 1907 the write, asked the president of one of the cor poration's subsidiary companies wha'