The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-08-06
TUESDAY. AUG 8 1855.
BIGNESS-III
a scRIPPs-HOwARD NEWSPAPER

We pOaataotN the power OF persuasion LNdL
Il God gave Charlie Schwab, that super-sales-
man Of steel, we believe We could sell steel
itself bill Of goods It would be that mass
production theory we have been discussing in
IN these articles on bigness
II steel would only put that theory into
effect, steel itself. we are sure. would benefit,
and We know the public would
Steel is big II is among the biggest But
# has never accepted the mass production
formula. "A partial exception being found in
the fabrication as distinct from the heavy
steel industries
Let's re-state the formula Increasing
quantity, increasing quality, accompanied by
decreasing price. and a broadening market re-
sultant from decreasing price.
Steel's price policy is rigid. That is where
steel collides with the mass-production prin-
ciple Steel rails for example. Steel has stood
pat on about $40 a ton. For a decade through
good times and bad. When business was
booming during the lush Of 2Os. steel cleaned
up. But when the slump came, steel went
comatose. Production dropped 83 per cent with
no corresponding drop in price. rails we're SAB
in 1923. held at that until 1882, then went to
$40. and finally. under government pressure
because the government was lending money to
the railroads. conceded to $3.50 in 1881
Steels profits in 1929 were. in round num-
bers. 1913 millions. They fell out of sight with
the fall in production that followed the big
crash, to a loss of SO millions in 1888.
CTEEL is sheltered by a tariff. ranging from
~ l8 to 80 percent. Steel is even now COM
planning Of unfair foreign competition in pub
lie construction because PWA allows only IS
per cent over the tariff before the foreign bid
der can get in.
Steel grew up with the country, striving
always for the high price As the nation was
expanding into new frontiers railroads,
bridges. Office buildings and factories, all de-
handing steel and more steel. the industry be-
came tremendous. 1t became also a virtual
monopoly. And never along the line did it
try the formula which, for example, was so
successfully tried by that newer industry, the
automobile Unprotected by tariff and start
ing from nothing at the turn of the century,
the automobile became greater within single
generation than steel itself. Incidentally, let it
be noted. automobiles never went into the red
in the depression.
Now what We are contending for is that
steel would do better for itself if it would take
a leaf out of the mass production book; that
1t would sell more of its product; that it would
make more money; that it would avoid those
desperate valleys which result from the very
rigidity Of its price policy.
to
production. 1t has plants that can produce
the mass. Its quality is fine. What it needs is
quantity 1t can get the quantity by lowering
its price and broadening its market. When
that is done there will be no more IS per cent
idleness. and. we are firmly convinced, there
will be bigger profits over the long haul Steel
is like the actor who once got 5000 a week.
Though he had been out of work for years. he
wouldn't take a job at less than $780,
IF steel. by lowering its prices, could keep its
Il production up and its turnover going, it
would not only be better off in the longtime
profit column, but it would be much less wor-
ried about foreign competition, and much less
vulnerable to attack by those who would break
down bgnesS and revert to smallness.
And. from the point Of view of industry in
general the public as whole. unemployment.
and all that-what a blessing steel could
bestow! How much more building. how much
more automobile construction, how much more
direly needed replacement-the benign ranai-
fications Of lower-priced steel are impossible to
estimate.
Yes We urge steel to take new look at it
self. and to give heed to the economic phi
losophy that more folk have got dime than
have got a dollar"
And what goes for steel goes for other Of
the big ones Aluminium for example. And
railroad rates. And agricultural implements
those things the farmers use, which dropped
so per cent in production from 1928 to 1888
and only per cent in price. while the pur-
chasing power of the "msrket"-the farmer
was falling 90 per cent
We by no means think the cue to future
prosperity in this natioTi 5 to so back to the
peddlers pack. But We do believe tina: in those
cases where bigneSs does beget monopoly, and
where. as result of monopoly the public is
denied the benefits that bigneSS can provide.
there is every reason from the public point Of
view to take good critical look at bignesS and
challenge the manner in which it is conducting
its stewardship.