British Iron & Steel

In Great Britain the shipbuilding, armament and heavy engineering industries still suffer the after-effects of the War. As result the British iron & steel trade (notably Vickers Ltd., and Armstrong, Whitworth & Co.) has suffered. Last year and the year before Armstrong, Whitworth had heavy losses. Vickers's earnings have been so poor that the company two years ago reduced its capital from $128,420,000 to $88,396,287, in order to make its dividend rate look respectable.

These companies, as well as other British iron & steel concerns, might have joined the European Steel Entente formed a year ago (TIME, Oct. 11, 1926), and prospered. That entente, which lasts until April 1, 1931, includes iron & steel industries of France, Germany, Belgium, Luxembourg and the Saar. They agreed to limit their production in accordance with the volume of demand; they have made money. Whereas until 1924 Great Britain exported more iron & steel than any other European country, in 1925 France took the lead. Last year Germany became leader (5,348 metric tons). However, England's coal strike last year (TIME, May 10, 1926 et seq.) had a disastrous effect on her trade.

In this situation Vickers Ltd. and Armstrong, Whitworth & Co. recently decided to help themselves by amalgamating their naval shipbuilding, armament and heavy and special steel business as a separate company. This new company the parent concerns will control jointly. Last week they had practically completed details of the new company's organization and exchange of stock. On Jan. 1, it begins to function.