The Washington times., 1928-01-30

A modest advance in prices,
about 81 a ton for steel products
and SO cents a ton for pig iron,
has been made possible because,
first, the industry was operating
on an utterly Inadequate profit
basis, and second, Improvement in
demand has set In.
This is distinctly encouraging
news, not only in itself, but be-
cause it reflects Quickening in
many lines Of industry into which
steel enters.
Mr.. Farrell is noted for the
soundness and conservatism of his
statements. He Is not a perpetual
spouter of sunshine. He believes
that it is best in the long run to
stick to facts, to the exact truth.
So unsatisfactory have steel
profits been for some time, due
to overproduction, that even
Charles NJ. Schwab, who frankly
declares, everybody knows I am
always an optimist," has been
emphasizing the need for improv-
ing the return of the billions Of
capital invested in steel plants
and properties.
The moderate recovery In steel
prices il, therefore, to be vel
coined as q desirable economic
development. No responsible steel
master has been anxious to see
wages reduced, a step which has
been resorted to by the textile
industry.
Steel The Cheapest
''The cheapest thing in the
modern skyscraper Ia the steel.
observed Mr.. Farrell. And by
far the biggest item in the cost
OF steel il wages. Notwithstand-
ing all the raw materials which
enter into steel.mal1ing, and not
withstanding the high transporta-
ton costs. the main determining
factor In the final cost IL labor.
Yet. in face OF the tremendous
rise In the price Of practically
all raw materials and the doubling
of wages in recent years, steel ID
selling today at &c = pound or =
trifle less.
Discussing the latest develop
ments, Mr.. Farrell said:
There has been substantial Inn.
provenent in demand for steel.
IT set in last October and mas
already been sufficient to increase
production from SIS per cent to
better than so per cent Of ca
pacity today.
Prices for the heavier products
have advanced about ~ . ton
since october and pig iron has
advanced about SOC q ton, which
Is :. fairly relative advance.
aft had become absolutely nee
essary to secure better prices IN
order that the steel companies
should live and be able to earn
anything IKE reasonable return
"What sources has the better
demand come from?" ! asked.
CONSTRUCTION is keeping up re-
nnarkabIy well--office buildings,
railway stations, commercial build
ings. etc." replied Mr.. Farrell.
"There has been some increase
in ordering by automobile manu-"
facturers. The railroads are or
dering larger quantities, espe-
cially for new freight cars, az
well as for passenger cars. OH
demand is fairly good for tankage
and also for pipe lines.
"The national gas industry 10
growing remarkably. Decidedly
heavy demand has come from this
source.
"Tin plate business promises to
be very good. The canning indus
try was curtailed to some extent
by small crops in certain places
last year. The indications are
that large acreage will be planted
this year and 4 larger business
done.
Agricultural implement buying
ie running 10 per cent better than
last year.
Altogether. We are looking for
ward to good business during the
first half Of this year"
Coming from 50 authoritative
and dependable a source, the fore
going assurances should have a
very beneficial effect upon bust
ness sentiment throughout the
country.
Faith In Industry
One gathers in talking with
James A. Farrell, the ex-laborer
who at AZ became president of the
biIlion.dollar Steel Corporation and
who recently succeeded Judge
Gary as the chief executive officer,
that he has infinite faith in the
industry to which he has given
his life. Jim Farrell il a solid.
matter-of-fact citizen who feels
safer in being connected with 80
basic a product as steel than IL
he were identified with any OF
the so-called luxury" industries.
Luxuries come and go In popular
ity, but steel, like Tennyson's
brook. goes on forever. There
fore, Farrell can say, with Roose-
welt when he was President of
the United States, II like my
job"
May I add that there is no
foundation whatever for the Wall
Street talk Of plans for q United
States Steel stock dividend or
anything else of the kind?
Copyright, 1928, by r. G. Forbes)