The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-12-19
TO CHANGE STEEL
CONTRACT FORM
Institutes Plan Will Prevent
Cancellations on Decline
of Prices.
BINDING ON BOTH SIDES
"Iron Age" Analyses Revision
of Rate Schedule-Market
Again Open.

A new form OF steel contract which
will bind the buyer as we'll as the seller
will be adopted within a few weeks, ac-
cording to an announcement made yes
terday. The matter OF changing the con-
tract form has been under consideration
for long time, and will be consum-
mated by the committee on contract OBJ
liGyations OF the American Iron and Steel
InNtitute. This committee is not one OF
those about to be abolished, as II Is not
an outgrowth OF the war. but has been
ono OF the active committees of the in
stitutc for a number Of years.
The objection on the part OF steel pro-
ducers TO the present form OF contract
arises out of the fact that the buyer con-
Adered his order more in the light Of an
option on a certain amount OF steel ton
mage which he considered he had a right
to cancel on a decline in the market
price of steel. On the other hand. the
producer was obliged to All his contract
regardless of market conditions. With
the enforcement of the new form OF con-
tract the Objectionable feature will be
eliminated. seller who fails to carry
out his part of the proposed new contract
will be penalized. while the buyer will be
compelled to take the products as
shipped, whether or not the market Is
favorable to him.
y II is understood that the contract
matter was brought to a head by the
recent efforts OF certain consumers, who
were dealing with the smaller independ-
emit steel manufacturers, to cancel their
contracts because of the drop in the
prices Of various steel products.
Lower Prices for steel.
This reduction in prices was provided
for in the price schedule which the gen.
eral committee of the American Iron and
Steel Institute submitted to the War
Industries Board In its conference on
December IL at Washington. As a con-
sequence a practically open market for
steel ,has again come into existence
within the past few days some forms OF
finished steel having sold at from 81 TO
Sc a ton below the maximum price es-
tablished by the Government for the
fourth quarter of the year. Commenting
or this change in price the Iron Age
says:
The new prices were not announced
at the conference, az the Government
representatives had decided beforehand
sthat no discussion OF prices would take
place. They were given out after the
meeting. however. and on the day fol-
lowing Youngstown company offered
TO sell No % black sheets at 400.
galvanized sheets at 6.05c.. plates at Sc
sand standard black pipe at 4.20c.. repre-
senting reductions OF So. 81. IS and Sc
per net ton respectively. The same
lower prices were named later by sew
eral other producers
"The reduction In steel bars is 81. OF
to 2.7oc., while common iron bars which
~have been $l2 ton higher than steel
are as yet unchanged. Blue annealed
sheets are reduced 81 per net ton. shapes
IS and light rails So. Tin plates are
$7.35 a box, a reduction OF 40c. Billets
are reduced 81. or to $43.50. while sheet
bars are $47. as against ISL. STANDARD
yBessemer rails are put at $55. but nc
price was announced fors open hearth
rails. Some sales of spikes have beer
made at 1910 a keg reduction of zoe
Wire rods and wire products are lef
unchanged. reduction of SO ton II
pig iron, or to $40 for basic and $31 fol
No. 2 foundry. was included IL the sched
,ule the steel manufacturers took tC
Washington.
Mills sIacken, Labor increases.
ut Is to be said that the reduced
prices have brought out no large anoun
OF new business. In the East 5000
ton plate contract was put through a
Sc, the new figure. though some produc
ers quoted the Government price. Nov
that the market Is open the possibilit,
for further reductions is distinctly {
factor. Mill operations are Stacking VI
in some directions and laltor supply L
increasing. Long needed repairs 10 bias
furnaces and steel plants will take NJ
some OF the surplus.
November records show structural &C
tivity at low point for the year, the low
est also in four years. the business takel
representing but 81 per cent OF the ca
pacity of the fabricating shops. The of
feriug of she'll steel as scrap has begul
and vast amounts are to come upon tn
market
Regarding the return ~ oren marke
conditions the Iron Trade Repie,o says
after having been denied the expert
ience for more than a year, something
like open market conditions have re
turned to the iron and steel industr'
during the last week AS yet It has bee
no more than a very modest beginning
Some sales have been made at the re
duced prices but these have been neithe
largo nor numerous, Both buyers an
sellers apparently believe II is time I
move with the tide. The whole industr
is engrossed in digesting completely tn
changed situation and Is endea voring I
formulate policies TO meet a number O
Important questions which quickly hav
been brought to the front. In the wax
of the new price announcement has com
a flow of requests for cancellation an
suspension OF orders placed at highe
prices"