Evening star., 1931-12-06
STEEL PRODUCERS
ARE CONSERVATIVE
Business Now Expected to
Follow Quiet Trend in
Near Future.
special Dispatch to The Star.

Special Dispatch to The Star.
PITTSBURGH, December 5.-Steel
producerc take very conservative
view Of the course of affairs in steel
over the next three months.
They are net particularly Influenced
b decrease in demand in the last two
weeks, which resulted in steel produc-
ton being lighter this week than in
any of the preceding four but are
greatly influenced by scrutiny Of the
general business situation and Of con-
ditionS in the respective consuming
lines.
False Starts Recalled.
Steel sellers are not impressed by
citations Of statistics showing that it
has been the regular thing for steel
production to increase after December
month by month for three or four
months, and that both last year and
this, during the depression, the in
Creases we're particularly marked
They regard the last two experiences
as false starts which buyers aIterward
regretted.
II there is any disposition to take
history as a guide, the very old ira
dition is cited, that when recovery
from depression starts In the first half
OF the year it is in March, and If In
the second half Of a year. in Septem-
Der or October This tradition was
well rooted when it had its last exem-
pltfication, in recovery from the de-
preston which centered in 1921.
1t Is considered quite sanguine, ie..
contrary TO the prevalent opinion, to
predict material steel Improvement be-
fore March. For substantial improve
ment to occur then would require vari-
Gus things to have occurred mean
while, one being a decided change of
heart on the part Of bankers. The
steel view is that, however sound the
banks may be made, by the function
ing Of the National Credit CORPORATION
or otherwise, that will not necessarily
loosen the purse strings even for ordi-
nary commercial credits, not to speak
OF financing construction projects in
volving fabricated structural steel or
pipe lines for gasoline and natural
ga:.
The railroad situation would need
Improvement, whereas lately Il has
been growing worse. Chances of there
being voluntary acceptance Of railroad
wage reductions are regarded as being
very slim and estimates have been that
about year would be needed to bring
about reductions by the machinery
provided by the present railroad labor
law. 1t is perfectly true that Con-
greSs could fix that in a few hours by
repeating that law, but it appears lust
about as true that Congress will not
do anything Of the sort in the near
future
Steel makers have indeed become
somewhat apathetic about everything
but reducing production costs. which
has proved to be a problem involving
very wide ramifcations. As recantIy
presented 1t has been virtually a prob
lem not only new but involving aban-
comment OF many prejudices and
habits During many years Of in
creaSlng demand cost production was
sought chiefly by improvements in
equipment and practice whereby ca
paclty was increased. The object was
to distribute overhead over more ton
mage, while nov the problem is to get
rid Of overhead. there being so little
over which TO distribute it. Also there
was Ter many years a tendency toward
mere and more specialization in rolling
units, whereby large mills were built
W,th great capacity, but making only
limited rcnge Of sizes or shapes.
Weakness in Prices.
1t costs a great deal TO start and
rrn THESE mills, much the same
whether the tonnage to be rolled is big
G. little. Now the producers are cast
ing about for means to roll steel on
small mills with more fiexibility as to
size and shapes they can turn out.
The finished steel price structure.
intact for so long that the subject Of