Family's Fourth

Having been delayed a fortnight while the borrower took stock of damage done by Pittsburgh's floods, a notable bond offering occurred last week.* The issue was backed by a first mortgage on the fourth largest aggregation of steel properties in the U. S. The company was by all odds the biggest family-owned steel business in the land. The money--$30,000,000--was for expansion, not refunding. Jones & Laughlin Steel Corp. was ready to build in its Pittsburgh works a new continuous strip-sheet mill, which is an exceedingly expensive chunk of machinery.

As Mellon Securities Co. and the other Jones & Laughlin bankers scrupulously pointed out in their prospectus, flood damage amounted to perhaps $1,000,000. But weather played another trick on J. & L. this year. At a tremendous saving over rail-carried fuel, the company barges coal by rivers to Pittsburgh and Aliquippa, site of its other big plant 19 miles away. There was more ice in Pittsburgh's rivers last winter than at any time since 1918. For 33 days no water-borne coal was delivered to the Aliquippa works. Costs were increased so much that the company estimated that operations in the first two months of 1936, when other companies prospered, resulted in a $900,000 loss.

Water transportation is the most important single factor in J. & L. economy. A stanch supporter of inland waterways development, the company pioneered in shipping steel by river in the early 1920's, now has a fleet of 250 barges, six tugs, plying the waters of the Mississippi River basin. On an average, J. & L. dispatches two tows per month, each loaded with 10,000 tons of finished steel destined for Southern and Southwestern markets. Export steel is transshiped at New Orleans. Water transportation saves J. & L. as much as $4,000,000 per year.

J. & L.'s determined advocacy of in land waterways is none too pleasing to U. S. railroads. Yet this does not worry J. & L. because it makes no heavy rails. However, 70% of its capacity is in other heavy steel products, such as pipes, mer chant bars and structural shapes. Though J. & L.'s plants are the envy of the industry, this preponderance of heavy products, which slumped worst in Depression, was what inspired last week's bond issues. A big modern strip-sheet mill will help balance its output.

Jones & Laughlin history dates from 1851 when Benjamin Franklin Jones, a onetime barge-line operator, bought an interest in an iron works on Pittsburgh's South Side. He was joined a few years later by James Laughlin, an Irish immigrant who had prospered in a slaughtering and provisions business. Succeeding generations of Joneses and Laughlins have been cast with remarkable regularity in the mold of the founding partners. The Joneses went for steel, the Laughlins for culture. Founder Jones was already a bigwig in .he steel industry when Andrew Carnegie was a local telegraph boy. When Carnegie succeeded in delivering a message to Mr. "ones personally, Mr. Jones would tip him 25-c-. His son, Benjamin Franklin Jones Jr., was a crack steelman and J. & L.'s lead until his death in 1928. In his later years active command was in the hands of his first cousin, William Larimer Jones, regarded in his day as the ablest operating man in the industry. Benjamin Franklin Jones III and William Larimer Jones Jr., their respective sons, are today young vice presidents, directors and executive committee members.

The Laughlin line, more prolific of heirs, has generally left company management pretty much to the Joneses. Founder James Laughlin was a good Presbyterian who served as first president of Western Theological Seminary and founded Pennsylvania College for Women. Grandson Irwin Boyle Laughlin was a career diplomat and onetime Ambassador to Spain. Philadelphia's Rev. Edward R. Laughlin is also a grandson. James Laughlin IV is the member of the Harvard Advocate board who was largely responsible for the ban placed on an issue of that magazine last autumn by Cambridge police. Great-Granddaughter Alice Denniston Laughlin is a stained-glass artist. And Board Chairman George McCully Laughlin Jr. was in step with the family tradition when he retired last week at 63. Then, for the first time in its history, Jones & Laughlin was left without either a Jones or a Laughlin in the two top executive offices.

New chairman is Horace Edward Lewis, an up-from-the-mill steelman, who was born in Wales 53 years ago. For 24 years he was with Bethlehem Steel, rising to executive vice president. Then, reputedly because Bethlehem was not big enough for both Eugene Grace and himself, he went to Jeffrey Manufacturing Co., big Columbus, Ohio machinery maker. Harddriving, dynamic, he is a smart salesman as well as an able operating executive.

Since the death of the last Jones president in 1926, J. & L. has had no less than four presidents from outside. Most famed was Tom Mercer Girdler, now head of Republic Steel. It was during Mr. Girdler's term that Aliquippa became known to steelmen as the "perfect company town" and to labor agitators as the "Siberia of America." And it was under Mr. Girdler that J. & L.'s profits reached $20,800,000 in 1929. During Depression the company accumulated nearly $18,000,000 worth of deficits. Even under President Samuel E. Hackett, a master salesman, J. & L. lost a little money last year on total sales of $62,000,000. With total assets of $184,900,000 and 20,000 employes, J. & L. is geared, like all steel companies, for boomtime production. And with its new strip-sheet mill and the steel team of Lewis & Hackett to sell its output, Jones & Laughlin is ready for whatever boom may develop.

*Another notable bond offering last week was a $40,000,000 issue of New York Central bonds, proceeds of which, together with $22,900,000 of short-term notes, will be used to fund Central's colossal bank loans (TIME, Oct. 14).

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