Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-06-30
OPTIMISM IS FELT
T IN STEEL INDUSTRY
Melon Cutting Not the Whole
Reason for Rise in Principal
Metal Shares.
BY j. c. ROYLE.
Special Dispatch to The Star.

Speclal Dlspatcn 10 Inc star.
NEW YORK, June 30.-June pro.
duction and sales of steel and steel
products have shown only a barely
perceptible dip, although decided
seasonal recession is always expected
at this time Of year. That is of far
more Importance to the country as a
whole than the fact that United States
Steel common stock has got Wall
Street ''all steamed up" over its ad.
vance to a new high figure for all
time.
Men actually engaged in steel pro-
duction say Wall Street Is giving
another proof of the saying that 1t
can see no farther westward than
the shadow cast by Trinity steeple.
which extends just about as far as
the New York Curb Market, on
Church street.
MelOn.C Cutting Rumors.
All sorts Of rumors. including fore
casts of melon cuttings and stock divi-
dends. have been circulated in the
financial district to account for the
steel advance. Steel executives of
Pennsylvania and Ohio, in kilograms
to the writer received today. point
first to the fact that June pay rolls
in the mills of those sections will be
the largest for any June for years.
They say the same is true Of the ILL
noiS, Indiana, Alabama, Colorado and
Pacific Coast plants. The consensus
of their comment is, Conditions are
satisfactory and prospects encourag.
ing"
The public, including Wall Street,
has scarcely realized the extent to
which costs have been reduced in the
industry by increased efficiency and
yo1 n One
pany president says that the output
per man in his mills has increased
over so per cent in the last two years.
New electrically operated mills have
been put into commission since the
first of this year. Better understand
ing exists between employers and en-
ployes than ever before.
In this connection the United
States Steel Corporation has made
stockholders out of thousands of its
employees. Since 1918 workers have
bought under the stock subscription
plan of the management 1.140,SS1
shares of common stock. Labor'S
share in the steel dollar now is about
IS per cent, as against nearly 40 per
cent two years ago, although wages
per worker have advanced.
Whether or not there is a stock
dividend, the fact remains that there
will be only the difference between the
cost of production and distribution
and the sales prices. which is profit,
to be distributed to stockholders.
Therefore. the activity and condition
of the mills Is Of more importance to
the country than the fiuctuation of
the stock on the exchange.
Profit and Loss Surplus.
The profit and loss surplus of the
company on January / totaled SG22,-
100000 whereas the par value of the
common stock was $500, 3O2.500. Net
tangible assets applicable to the com
mon stock were above $3.50 a share
If there should be a stock split-up it
would bring no continued benefit to
stockholders unless profits were such
that an increased rate of dividends
could be maintained. Steel prices
seem exceptionally we'll stabilized, so
there is no immediate prospect of
sharp advances. The volume of bust
ness has been high but 1t is from eff
cheney and economies that most steel
experts expect addition profits to
come.
Demand for tubing from the oil dis
tricts has been one Of the bright
spots IN the Industry. Now mills are
beginning to get large orders for wire
fabric for road reinforcement and
other construction work. Changes of
models by automobile manufacturers
have spurred orders for sheet steel
and other products used in motors.
Railroads are sending in large in
quiries for steel requirements and
many are placing orders for Summer
requirements in right of way and
shop work.