Furnaces & Gold

{See front cover} Should an ancient fire-worshipper, reincarnated, return to the contemporary U. S. scene, it is perhaps in a steel-mill that he would find his most congenial employment. For the heart of the steel-mill is the flame of its furnace, and the power of the steel-mill is the heat of that flame. Cold and solid is steel to the layman. Hot and liquid it is to the steelworker, who is essentially one of dozens of cooks attending a titan's kettle of boiling muck. To him, it seems, the fiery mess is continually boiling over from the kettle's snouty spout. First, a trickle of fat sparks. Then the trickle turns to a stream, the stream reaches the circumference of a man's body --a stream of molten steel with a long, sheer drop of 30 feet. The stream thuds into the pit, splashes out in a vast circle, flows like hardening lava across the floor. Should the hypothetical fire-worshipper, unused to these modern manifestations of his fire-god, permit himself to become engulfed in this onrush of liquid metal, he would speedily become one more product of combustion, most readily disposed of by being shoveled back into the furnace to be remelted with the rest of the slag. Yet, though the steel-worker dodges many a flying spark, many a molten stream, the liquid steel does not ordinarily waste itself on the pit floor. When steel-cooks know their business, the brew from the kettle furnace pours not into the pit, but into a many-tonned ladle. Filled to its brim and slobbering over, the ladle is moved along over a train of flatcars in which ingot-molds stand up some seven feet from the car-floors. From mold to mold the ladle hastens, filling each with its white-hot content. When the ladle has gone the length of the train, the row of ingot-molds glow in the darkness like monuments of hardened fire. Thus steel to the steelworker. But to the steel-tycoon, to U. S. business & finance in general, it is gold that melts in the furnace and earnings that spark from the spout. To Hoboken this week went the most potent of steelmen for the annual stockholders' meeting of the most gilded of steel companies. Had all U. S. Steel Corp. stock owners attended, those present would have totaled 100,000. Most, however, stayed at home; all knew that the main business of the meeting was to increase authorized common stock from $753,321,000 to $1,250,000,000 and reduce the preferred from $550,000,000 to $400,000,000. This was accomplished by the unanimous vote of the 200 (representing 2,783,890 shares preferred, 5,515,050 shares common) stockholders present. Thus U. S. Steel's giant capitalization mounted from $1,303,321,000 to $1,650,000,000.

Eagerly awaited was the result of Tuesday's smaller meeting of Steel's potent directors. By night every U. S. broker, most Steel stockholders, knew they could buy, at $140, one new share for every seven shares held. With Steel closing

Tuesday at 184 3/4, rights were worth exactly $5.59.

Among famed steelmen not at the U. S. Steel meeting was Charles M. Schwab, onetime (1901-03) U. S. Steel president, now board chairman of Bethlehem Steel, second largest steel producer. Chairman Schvvab and President Eugene Gifford Grace had held their stockholders' meeting earlier in the month. President Grace had at that time told Bethlehem stock-holders that Bethlehem's March output was greater than its rated capacity, that (recently resumed) dividends on common should continue uninterruptedly. U. S. & Bethlehem. Great is Bethlehem Steel; greater is U. S. Steel. Bethlehem has a capacity of 7,900,000 ingot tons; U. S. of 23,000,000 ingot tons. In 1928, Bethlehem earned $18,585,922; U. S. earned $114,173,775. Bethlehem earnings amounted to $6.55 per share; U. S. to $12.50. Both were running at or close to capacity during March. Independents. Erroneous is the impression that U. S. Steel plus Bethlehem Steel constitute The Steel Industry. Taking tons of ingot steel as a standard of measurement, U. S. Steel has a rated capacity production of about 43% of total U. S. steel capacity. Bethlehem can pro duce about 15% of the total, leaving about 42% for independent companies. Prominent among these companies are: Youngstown Sheet and Tube Co. Three-fourths of the plant, nearly all the directorate, in Youngstown, Ohio. Makes principally pipe, sheet and tube; therefore best customers are the oil and automobile companies. Merger with Inland Steel Co. (Chicago district) has been frequently reported, was once almost completed, is still rumored. Ranks as Third Largest (3,000, 000-ton capacity); earned $10,-466.300 ($9.54 a share) in 1928. Jones & Laughlin. Fourth largest; closely held stock traded in over-the-counter market; estimated 1928 earnings $20 a share; operating in Pittsburgh area. Crucible Steel Co. Largest maker of crucible steel; important producer of electric alloy steel; 1928 net income $5,634,-000; per share, $7.06; operating chiefly in Pittsburgh area.

A. M. Byers Co. Largest U. S. manufacturer of wrought iron pipe; is building a $10,000,000 plant for production of seamless pipe using a new process (Aston process) that reduces cost of wrought iron; affiliated with Oil Well Supply Co., which distributes Byers pipe to oil industry.

Republic Iron & Steel Co. Merged with Trumbull Steel Co., February 1928. In 1928 earned $4,710,400 ($4.25 per share). Under comparatively new management, E. T. McCleary, onetime vice president of Youngstown Sheet & Tube Co., succeeding T. J. Bray to the presidency in April 1928. Acquired Steel & Tubes Co. Inc., maker of electrically welded tubing, in September 1928. Republic now rates among larger independents.

Colorado Fuel & Iron Co. Largest steel producer west of the Mississippi. Main works at Pueblo, Colo. Strike in company coal mines lowered 1928 earnings (first nine months, $1.54 per share). Steel rails are its chief product.

Oth Steel Co. Cleveland's steel company earned nearly $4,000,000 in 1928, its $3.82 per share showing marked improvement over $1.02 in 1927. With the automobile industry a leading customer, the company has enjoyed a record first quarter and expects soon to resume common dividends.

In March 1929, U. S. steel production, for the first time in its history, topped the 5,000,000 ton mark (by 49,000 tons). At this rate, 1929 would be a 60,000,000 ton year, more than 10,000,000 tons over 1928, previous high year. Record-breaking activity in the automobile business (TIME, April 15), now the steel industry's best customer, helped make the outstanding March record. Resumption of large-scale purchasing by railroads (third best customer) also aided. Steelmen questioned, howeVer, whether record-breaking production could well continue; saw some slackening in even the near future. The building industry (second best customer) is in something of a slump, and the automobile second quarter cannot be expected to equal its first. Yet unfilled steel orders were unusually large and steel remains brightest as well as largest U. S. industrial spot.

Much as the late, great Carnegie picked Charles M. Schwab to manage Carnegie Steel, so the present, great Schwab picked Eugene Clifford Grace to be Bethlehem's bright, particular star. Born (1876) in Goshen, N. J., President Grace held a boyhood job of clerking in his father's grocery store. At Lehigh he played four years of Varsity baseball, captained teams that won from Yale, Pennsylvania, Harvard. Is still a baseball enthusiast. From Lehigh, Mr. Grace went to Bethlehem, ran a crane for $1.80 a day (12 hours). His first big job (1905-06) came when Mr. Schwab sent him to reorganize the Juragua Iron Co., a Cuban subsidiary. Then came many an advancement, culminating (October 1917) with Bethlehem's presidency. Tall, slender, impeccably attired, President Grace is known in non-steel circles as a collector of paintings and of golf-trophies. Of the Triumvirate which now directs the destinies of U. S. Steel Corp., the board chairman, J. Pierpont Morgan, is concerned with European reparations; the president, James A. Farrell, is concerned with the making of steel and the administration of 'the company, leaving the chairman of the finance committee. Myron Charles Taylor, most active triumvir. Long known as a "sphinx," never given to the interview habit, Financier Taylor genuinely possesses that dislike of publicity, that distaste for public display which, is so frequently attributed to tycoons in general. The door of his office is lettered simply "Mr. Taylor." Recent events, however, have made it difficult for Mr. Taylor to escape the public eye. When (TIME, March 4) Guaranty Trust Co. and National Bank of Commerce were combined, Guaranty & Commerce Stockholder Taylor was chiefly credited with having brought the merger about. When (TIME, March 4) the U. S. Steel bond redemption plan was first announced, to Myron C. Taylor went praise for having completed what the elder Morgan began, and for having made U. S. Steel completely Morgan, completely non-Carnegie. Last week Mr. Taylor went to Hamilton, N. Y., attended a special convocation at Colgate, became Dr. Taylor with an honorary law degree.* Speaking, Mr. Taylor talked not of steel, of success, of finance. Instead, he quoted St. Paul: "Ye men of Athens, methinks ye-are in many ways too superstitious." He added: "So if today St. Paul came to America and viewed the activities going forward in this great land of ours, he might well say: 'Ye men of America, methinks ye are in many ways too materialistic.' . . . The generation of middle-aged men . . . are perhaps on the whole too shackled to the creations which they have developed to rid themselves of ... their burdens. . . . But the generation to which you belong has every advantage, because you not only inherit the fruit of those immediately preceding you, but also, the accumulated effort and knowledge and experience of all humanity since the beginning of time. In the words of John Ruskin: 'All history is open to you; all high thoughts and dreams that past fortunes of men can suggest.' "

* He is a Cornell graduate (1894).