Evening star., 1933-03-12
BY DONALD WILHELM,

BY UONALD WILHELM.
Author OF ''The Story Of Steel" THE Book
OF Metals" Etc.
n A s steel goes, so goes the
Ss n nation" land often the stock
II market, too) is a proverb
1 \ that might better be: "As
the nation goes, SO goes the
steel industry" 1t Is important to
know how this great industry is faring
how hard it has been hit by the de-
pression-what are its hopes and plans
for the future-what are the next great
steps that will be taken in the industry.
1 went to Myron C. Taylor, chairman
Of the beard Of the United States Steel
Corporation, the largest unit in our
most basic and most barometric in
dustry, and asked his views.
I'VE are passing through, and I feel
confident that we will presently emerge
from, period of the widest depression
Of industry" he said. THE economic
balance that ordinarily exists between
nations and between industries has
been shattered by the stupendous shock
Of war and its aftermath. Everyone
knows that. We are all facing reality
again. And what is that reality? The
things that were conceived IN SELFISH
ness and born of arrogance have re-
turned to the dust from which they
came. But, no less to the point, certain
fundamental principles Of business
remain"
For example?"
1.-THE consuming power Of any people
fundamentally depends upon their
normal standard Of living. Americans
are accustomed to a higher general
standard of living than has ever pre-
vailed anywhere else in the world. For
one thing this means-at any rate 1t is
true-that we normally use more steel
than any people in the world. For US,
at least, steel is indispensable. That Is
why, even as we rise from the very
bottom Of this slough of despair, there
is an irreducible minimum necessity for
steel which is not by any means incon-
siderable. That irreducible necessity
has not as yet inspired sufficient de-
mand to assure the industry as whole
satisfactory operation. But in any case
it makes my point-that steel Is at all
times essential to our way Of life, Can
you look out Of that window there-can
you look about you anywhere-and ar
rive at any other conclusion?
Obsolescence Of Steel.
"Steel does wear out ObsoleScence,
now stimulated as never before by tech
nology, implies tearing down, building
up. In the humblest homes people have
had to deprive themselves during these
three bitter years of items made Of
STEEL and the sum total of even such
items mounts TO formidable proportions.
Moreover, that accumulated need ex-
tends all the way from homes and shops
to the far greater needs of our railroads,
our automobile industry, nearly all
others of our 100000 manufactures.
In due course all such needs must
manifest themselves We know that
they will or life in America would stop
and it will not stop"
Thus one gets a picture Of this giant
among our industries Tin war as in
peace our most essential industry tax
ing a licking, perhaps, but, like Uncle
Sam himself. by no means licked.
Steel production is at all times good
no doubt the best, index of all produc-
ton in America-steel is that basic to
nearly all of our Industries. And it is
all the more good index because steel
is an industry which operates on order
almost entirely.
Steel production naturally was given
tremendous boost by the World War.
The industry expanded its productive
capacity frantically, until, in 1917, 1t
turned out its wartime peak of 43,619,-
600 ingot tons. There was a slump after
the war, but, with the boom, production
began climbing again. In 1929 the in
dustry hit its all-time peak of 54,850, 900
tons and had facilities for turning out
additional millions Of tons had there
been market for them.
Since then production, in answer to
heavy decreases in both domestic and
foreign demand, has ebbed steadily. In
1880 the leaders Of the industry were
wondering if it could operate profitably
at 80 per cent of capacity. In 1881 they
were wondering II it could carry on at
25 per cent! Then at 20 per cent! Then
at Is per cent! Until. in August, 1882,
our production of steel was down to its
au-tlme low Of only 14.3 per cent.
Obviously Losing Money.
AS an industry. steel obviously was
losing money, in general was not even
meeting the fixed charges on its enor-
nous investment; and many thousands
OF wage earners dependent on it were
thrown out of work.
But then there came a more hearten-
ing picture. Since last August the
curves used to indicate steel production
have inched upward to above % per
cent of capacity. Now, near the end,
it is hoped, of what has been the longest
and most costly hiatus in production
that steel has experienced, the leaders
OF the industry are hoping that it will
again get into stride and enjoy much
more than the irreducible minimum de-
mand described by Mr.. Taylor.
Yet, as they hope, Mr.. Taylor and
other leaders acknowledge that the in
dustry today finds itself in a period of
profound change. This change Is only
partly due to the depression. There
have been increases and decreases in the
demand for steel, in its markets at home
and abroad, that have been reflected by
the fact that the industry Is entering
upon new phase Of its development.
Exports, for instance, have dropped
more rapidly than total steel produc-
ton. In 1929 exports amounted to SIS
per cent Of the total production, or
100000 tons. But In 1882 the AZ, 900
tons OF exports amounted to only per
cent OF the industrys total production.
Mr. Taylor commented on this de-
crease
with the rapid extension of tariff
barriers, which in the case Of the United
bSCil dullOct
from the beginning to safeguard our
higher standard Of living, I look to
our exports to settle at about the level
existing before the World War" he
said "Perforce, we shall need to look
more than ever to domestic markets.
And by the same and other tokens
we shall have larger need-and In q
sense larger opportunity-to get our
bearings, to put our house In order"
What are these domestic markets.
How have they been affected by the
decrease in business-by the change
in the steel industry itself? Which
OF the old markets will loom large in
the future? What new markets are
being developed to take large shares of
the Nations steel production?
In 1929 our automotive industry,
steers biggest customer, used 1885,
600 tons Of steel, 18 per cent of our
total rolled steel. In 1881. it used a.
800 200 tons; in 1882 still less. As
this Is written our automobile industry