The New York herald., 1921-04-21
CUTS IN STEEL FAIL
TO SPUR BUILDING
Lower Wages and Freight
Must Come Also to Urge In
vestors, Say Contractors.

The new schedule Of prices announced
by the United States Steel Corporation
is not regarded by construction COM
panies as holding out a golden oppor-
tunity for undertaking new projects at
decreased cost. They believe the
schedule will have little or no apprecia-
BILE effect in the way of stimulating
erection of new apartment and office
buildings or the projection of new sub
ways.
An investigation concluded by THE
NEW YORK HERALD yesterday showed
that the big contractors are convinced
lower wages in the steel industry and in
the building trades, lower fabrication
costs and lower freight rates must come
before investors will feel the urge Of an
optimistic programme.
An officer of the National Erectors
Association pointed out to begin with,
that the steel corporations new price
on steel plates and structural shapes is
higher than that quoted during the last
year by many independent companies
which have been supplying good share
OF the steel for construction purposes
The effect of the corporations cut is
now to bring all prices UP to its new
level
l.. j. Fisher general manager of the
Thompson Starrett Company. called at
tention to the fact that the prices an
nounced by the steel corporation are
base prices and do not include the cost
Of fabrication into the forms in which
the steel is delivered to the contractor.
For that reason" he declared. 1T Is
| difficult to determine whether the cut
will make any appreciabe difference in
the price OF steel. The cost of fabrica-
ton varies considerably"
Cost to Builder 500 a Ton.
| The steel corporations new base price
4 on plates and structural shapes is $3.50
the hundred. or s44 the ton. What the
contractor actually pays for the steel he
uses in his building approaches nearer
| 500 the ton. Approximately the base
| price is only half the price Of the de-
livered steel The old base price on
plates and structural material was S2.65.
so that the contractor gets the benefit
/ Of about 10 per cent decrease.
This saving applied to the various
types OF construction will make only
| slight difference in the total cost. The
4 steel frame of a large office building
represents about 10 per cent. OF the en-
/ tire construction cost. so that the new
| steel price effects a saving OF only 1.5
on the building. In the caae Of an
4
the steel construction might represent
/ 90 per cent. OF the total cost at most.
! The new price allows q per cent. saw
4 ing And even these slight savings are
insured only in case there Is no jump In
\ fabrication costs, which fluctuate con-
| sderably.
Prospective subway construction bene-
| fits least OF ALL There the steel amounts
| to only about per cent. of the total
TiNa faa
cut doesn't offer much percentage there.
views OF Trade Experts.
Despite price cuts by the steel cor
pcration there has been no furry OF
buyers to jump into the market, accord
Ing to journals OF the trade The big
corporation Is reported to have been
helped by the reinstatement OF business
which had gone off it's books at lower
levels.
The Iron Age says: There Is no in
dication that consumers VIII change
their policy OF limited buying. Gencr-
ally they count on further revisions OF
prices as the result OF the expected re-
duction in freight rates In addition
the steel corporations policy in respect
to wages is admittedly factor In the
determination OF future prices"
The Iron Trade RevieW says:
THE composite market average this
week Is virtually unchanged at Ss3.s2,
which compares with Si3.90 last week.
Production Of merchant pig iron, 80
drasticaliy reduced. has reached an ar
proximately unbalanced condition. while
current shipments and stocks are more
stationary.
"A request for 100000 tons Of basic
from a Canton (Ohio) steclmaker Is an
cxceptional inquiry. Price strength \
lacking. American mills and fabricators
will compete on a large riveted water
line for Bombay. India, now up for bids.
which, IT Is estimated. will require
~. 900 tons or steel plates.
Mexico has inquired for s20.00O,00O
worth OF railroad equipment and $4,000
tons OF rails. British mills are reported
to have taken 100000 tons OF structural
material from the Russian Soviet Cow
eminent. Germany IL said TO have SOLD
Russia 100, 900 tons OF rails"