Steel tipped

On April 9, 1908, steel production was running at a rate barely half of that which had marked 1907. But on that day the late Judge Elbert Henry Gary assumed an unusual position. Said he: "The mere fact that the demand is greater than the supply does not justify an increase in price, nor does the fact that the demand is less than the supply furnish an argument for lowering the price." For the rest of 1908 the composite price of finished steel remained virtually unchanged. In January 1909 it was 1.82-c- a pound. Prices for succeeding months were: 1.772-c-, 1.599-c-, 1.577-c-, 1.506-c-. Last week U. S. Steel Corp. again took a stand. A few weeks prior Carnegie Steel had announced its quotations were "min-imums." But last week's prices for finished steel products were upped on the average of $1 a ton.* A typical example was steel bars, previously quoted in Pittsburgh at 1.60-c- a pound, now quoted at 1.65-c- against 1.90-c- a year ago. No impetus of buying caused this move, in which practically all the steel companies promptly followed-their-leader. Indeed, steel ingot production last week was slowed down to 39% of capacity. With prices so low, business so dull, few steel companies are covering their dividends, many more are not even earning profits. At last week's new price-scale, profits will run $2 to $4 a ton higher. Thus unless the volume of steel business drops even lower, last week's price maneuver was decidedly bullish for steel companies. Confident were steelmen that the law of supply & demand will not work in their case. Rather, they contended that many a prospective buyer of steel has awaited lower prices, now will see he cannot get them, will rush into the market. Thus they viewed their move as a step toward new business activity. Not for some time will the steelmen's reasoning be submitted to the actual test of orders received. Many a financial writer last week looked back at 1921-22 when the rise of iron and steel prices presaged a business recovery. Apparently forgotten, however, was the fact that in 1922 steel prices rose sharply only after production had commenced a rise as pronounced as its previous fall. Said Lewis H. Haney, director of New York University Bureau of Business Research in Iron Age last week: ". . . Production is above the indicated demand and is still declining. ... It may be that shortages are in the making in other industries, but our measurements do not indicate that is the case in the steel industry."

* A few days later, the price of milk was lowered 1-c- per quart in New York City.

This file is automatically generated by a robot program, so reader's discretion is required.