The Washington herald., 1918-12-24
Financial NelJ.--Stock Market Prices
U. S. WELCOMES
WORDS OF GARY
Confidence Felt in His
Price Prediction, Hol-
land Says.

Many communications. verbal and
written. have been received oy ene
United States Steel Corporation that
exnrea. the qualification which is felt.
apparently everywhere in the country
at the recent address by Judge Gary
chairman Of the board of that COT
poration. Yet although 1t seems al
most paradoxical that high wages are
TO be maintained while at the same
time a cut in prices Is to De oeguh
with the result that activity and pros
perfty IN the steel business VIII De
continued in the view OF Judge GARY
for at least Eve years. yet It is GER
tain that there Is confidence tat
Judge Gary and his associates nnd
nothing like a paradox In that pofcy'
rAe orxanixation and policy of this
corporation are frequently referred TO
by men who are industrial leaders al
though not occupied in the steel in
dustry, as the most efficient organiza-
tion yet established anywhere, repre-
senting the highest type OF organiza-
ton and efficient production Of any
Industry in the world excepting pos
sfbly the Standard Oil industry as that
was before the mandate of the Su-
preme Court caused 1t to be DIS
jotnted.
So a. ia also said that today the
plants, some OF which are new, wh'cn
and steel corporation has established
and the machinery to operate in y e 'e
plants and all of the overhead meth
ods represent the highest peak Of in
dustrial efficiency Unless there be
Invented new machinery better than
any now in use, and that Is today
the best which the manufacturers
throughout the world can furnish to
the steel plants. it does not seem
possible that this corporation can
reach any greater heights so far as
perfection of plants and operation Is
concerned than the one upon which
il now stands.
The plants NEST recently established
by the corporation, especially at Gary
and Duluth and in some other places
of the West. are spoken of as aoso-
IuteIy perfect Therefore 1t Is not
to be presumed that Judge Gary looks
for greater efficiency and more high
ly perfected plants or more skillfully
established overhead charges than
those which now distinguish the cor
poration operations He must there
fore look in another direction for sue
cessful maintenance of high wages
while at the same time there is a
reduction in the price charged for
steel commodities.
War and Peace Earnings-
In normal times a fair price for
steel was this morning said to stand
at or about Ia cents a pound. Meas
ured by tons, IS a ton was the
normal price in days of peace. But
since the steel corporation began TO be
almost exclusively occupied with war
work the government being its chief
and In many lines its, only customer,
prices rapidly increased. Sometimes
the increase was as much as 800 per
cent and in some cases even more
and it has been assumed that the
average amount paid by the govern
ment to the steel corporation was
about SO a ton
Judge Gary IL Is assumed has in CO.
operation with his associates. well
worked out the methods by which
prices can be cut while wages are
maintained. 1t will bes necessary 10
secure and maintain operation to the
full capacity Of the plants This has
been substantially accomplished while
the corporation was selling its steel
to the government. In order to be
successful hereafter there must be a
reduction OF prices, this being accom-
panied, certainly while the price of
the necessaries OF life are maintained
at a high level without any reduction
in the wages and salaries paid to sub
ordinate officers and skilled artisans.
The assumption is made, however.
that in view Of the normal before
the war prices and in view of the
very great increase in those prices
when the plants were occupied to
their capacity with our own and for
eign government work IT will be pos
sible to reduce the price of the COM
modities to a much lower figure than
those which the governments accepted
as reasonable and paid II would be
hard to obtain from any OF the ex-
ecutives of the steel corporation a
statement which would show what the
first contemplated cut in prices will
be. But there seems to be an i'm
preston that the corporation con-
templates a speedy cut of at least %
per cent.
II that cut be not sufficient to sta
bilize the relation between demand
and the supply then another cut in
prices will presumably be made. So
this VIII continue until at last the
lower prices create demand for steel
and Its related commodities like steel
rails and this demand will in fact
be so large as to occupy all the plants
to their capacities So, therefore, the
presumption is strong that Judge
Gary had in mind when he stated a
few days ago that wages and SUBJ
ordinate salaries would be maintained
at the present high figure while prices
for the commodities would be cut
the creation of a great demand for
steel and steel commodities sufacieny
for the capacity of all the plants and
sufficient to maintain dividend rates
and surplus and sufficient also To
provide for very large export
trade.
The government tax upon excess
profits has been undoubtedly under
consideration and the tax will con-
tfnue to be large. but II the excess
profits are reduced by reason of the
cut in prices then the aggregate
amount paid on excess profit tax ac-
count will also be reduced so that
the two conditions will even up. 1t
Is with the intent of quoting prices
for steel and steel commodities at
such a figure as will create a de-
nnand which viii occupy the various
plants to their capacity that the policy
Is to be adopted.
frequently this presumed policy is
referred to by Industrial leaders and
BY those who are of influence in the
world of bankers as reflectinv the
far-sighted and the wise policy wbich
a ~.