The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1921-12-23
LIGHT EARNINGS
ANTICIPATED in
FIRST QUARTER
Independents Find Com
petition With u. s.
Steel Difficult.
MERGER PROBABLE
Government Not Expected to
Oppose Billion Dollar
Combination.
MERGER PROBABLE

~ NEW YORK. Dec. 1..-No impreve-
ment in steel earnings is looked for
In the nrst quarter of 1922. They
may be smaller than in the current
quarter, as incoming business is
not expected to show enlargement
until early next spring. Manufac-
turers believe the second quarter
OF next year will show a good mar
GIN for common stocks after depre-
citation. interest and preferred divi-
bends This applies to the indus
try In general. Some companies will
show more rapid recovery than 9TH
.ers.
United States steel-on account
Of dfversincation OF its output, more
= advantageous shipping facilities,
railway and steamship sys-
TENS. and its $500, 100000 Of cash
In banks in a class by itself. 1t
may show its common dividend
earned over the next six months.
Earninss and Shipments.
The statement OF John A. Top
b ping before the Interstate Com
merce Commission that the steel In
uustry Is losing from IS to $40 a
ton on every ton of steel sold AZ
present prices evidently does not
apply to the United States Steal
corporation. as its report for thu
third quarter showed a compare
lively small deficit on steel shipped.
and 10 would not be surprising II
the common dividend Is earned in
the last quarter.
II United States Steel can main
% tain operations on a 50 per cent
basis In the hrst half of next year.
there may be a small surplus after
dividends of Z per cent on the pre-
ferred and per cent on the COM
mon
The head OF one Of the largest
Independent steel companies. to
IIustrate the advantage OF United
states Steel over the independents
IN costs. pointed out that a steel
concern in the Middle west was
shipping to Eastern points in COM
petition with the Atlantic Coast
companies. A merger of the indie
pendents will do away with this
loss. Steel will be shipped from
the plant nearest to the consumer.
Position Of Independeat..
II the independent steel compa-
MES continue to show deficits over
the next six months, some Of them
will be badly in need of cash be-
fore the close OF 1929. On the other
hand. IL business should revive and
production reach normal, there
would be little chance of the merg-
er goinE through. This was the
cause Of the failure Of merger ne
gotations two years ago. There
are certain independents, however,
that now fully realize that an alli-
ance with other companies is their
only salvation. The war has
brought about radical economic
changes that can be corrected only
through cooperation. A merger
involving as much as $1,000. o0o, 900
would not be regarded as a viola
ton of the Sherman antitrust act,
as IL would have less than one
half the capacity of United States
Steel.
For some time Dow, Jones & Co.
have referred to the coming year
as a period of mergers similar to
that of two decades or more ago.
No strenuous legislative action to
prevent combinations of capital Is
looked for. The United States gov
eminent is fully aware Of the great
changes wrought by the world war.
and the great difficulties that must
be surmounted to bring commerce
and industry back to normal. II
certain lines Of industry attempt
TO 90 IL alone. 1922 might be a year
of bankruptcies instead of a year
of mergers Mergers now under ne
EQUATIONS include the independent
steel companies, certain groups of
copper companies, and fertilizer
companies. And this Is only the
beginning.