The Washington times., 1921-04-14

frequently declared tnat no reuuction
could be made in prices without a
production in wages.
According to trade calculations the
reductions announced average 81 a
Hon on the products affected.
The response of automobile manu-
,facturers, machinery manufacturers,
builders. the railroads and other large
consumers of steel will be awaited
with very knee interest. IL buyers ac-
cept the changes as registering the
kabsolute bottom of the steel market
and decide to go ahead and place or
ders without further misgiving, then
III may be well that the Steel Corpora
tion's action will mark the turning
point of industry and business and
start a broad movement toward pros
perity
; The next move is now squarely up
to the buyers.
Some weeks ago i made the en-
phatic prediction that, despite Judge
Gary's statement that he saw no ne
'ccssity for reducing either steel
prices. or wages, conditions would
= force the lowering of prices and that
later on, wages would also be read
1usted.
The hrst part of this prediction
has been fulfilled.
The second, have every reason
for announcing, will be.
Apparently, something very un-
usual has. happened in connection
with Judge Gary's handling of the
Steel CORPORATION. Usually the di-
rectors and Judge Gary see eye to
icye. But it appears that this time
the most influential directors, those
composing the Finance Committee,
,iIisisted upon the Judge acting at
Once, whereas he had not intended
to do so, according to all accounts.
a Also, Judge Gary's earlier state
ments that it would be impossible. to
cut prices without at the same time
cutting wages were not born out by
events. The leading directors appar-
entity were insistent that prices be
lowered forthwith. but concluded that
readjustments in wages be gone
about with very great circumspec-
tion. and that it would be advisable
to take plenty Of time to formulate
rev wage scales.
You can safely assume, however,
that wages will be lowered in the
very near future-probably about the
end of May.
reductions announced, and also those
yet to be announced on tubular prod
ucts sheet steel products and vari-
Gus wire products.
I understand that the average re-
duction will finally figure out at ap-
proximately $40 a ton. This follows
two postwar reductions, one of IS
and another of 81 a ton, making a
total cut OF s22 ton from the war
level.
Large consumers OF steel yester-
day expressed themselves as satis-
he'd with the extent of the latest re-
ductions.
y Much comment was caused by
failure to lower the SAT price charged
for steel rails.
Well, here's an interesting and
illuminating piece of information on
that point: There is only one mill
that can to-day make rails at SAT a
ton without losing money.
That's authentic.
This is not encouraging, but it is
the \truth There is hardly any, If
any, independent steel company that
has not been running at a loss dur
ing recent months.
To attract business, they had to
slash prices, and as they have been
running only about ne-third of ca
pacity, costs were ruinously high.
What happened was this: Inde-
pendent companies charged fancy
premiums for prompt delivery when
steel was clamorously sought at any
figure. When the collapse suddenly
occurred their order books were
practically empty. Then they fran
ha
tion to get some sort of tonnage to
save them from having to shut down
tompletely. AS a matter of fact,
numbers of large independent mills
~haye had to close.
- All during the hectic boom In steel
prices Judge Gary ,religiously ad-
hered to the scale agreed upon at
washington in March. 1919. No pre-
miums were charged or accepted for
prompt deliveries, whereas the inde-
pendents' prices scared $50 ton
above the steel Corporations!
But here is a sample of how this
nolicv Is now working out: The city
Of Detroit recently called for bids or
900 tons of rails, and the order
was placed with the Steel Corpor%
tion, although its quotation was
small fraction higher than the low
ct independent bid. Why? Because
when Detroit needed 10000 tons OF
rails year ago the lowest price
auoted by an independent was S2i
a ton above the Steel Corporation s
4 case OF bread cast on the waters
returning.
what you want to know Is: VII.
the reduction in steel prices stimu
late activity and, therefore. employ
nent In the steel industry. in build
ing. in machinery manufacturing ano
In general busiess?
Frankly. the prospects are that Inn
provement will not be Immediately
notable. There will be some-pcr'
aaps OBSERVATION-DISCLOSURES of held