Steel from Slough

Last week the nation's steelmen stopped glaring at Labor's John Llewellyn Lewis long enough to take a hurried look forward to the future, a hasty glance back at what they had accomplished in the first six months of the fourth year of Recovery. As a whole, the steel industry earned more money than in any first-half period since 1930. It was employing more workers (500,000), paying them more per hour (67-c-), than in 1929. Individual pay envelopes were not so fat as in the New Era because the work was spread thinner, but the steelmasters were already preparing for longer hours. Fortnight ago U. S. Steel, followed by other companies, announced time-&-a-half pay schedules for overtime on an eight-hour day or a 48-hour week. Last year the average steel worker worked only 34 hours per week. Like vacations with pay, overtime pay came late to the steel industry, and then only as a tactical move in its defensive strategy against unionization.

Fear of strikes has continued to inspire steel consumers to buy more than they need at the moment, but the insistent and unseasonal demand for metal from U. S. industry has amazed the most sanguine observers. Operations entered August at 71 1/4% of capacity, highest level in six years. Prospects of a general business upsurge in the autumn are so bright that a brief reaction in steel operations, originally expected last month but now predicted before Labor Day, would probably clear up what little excess steel inventory there is. In Pittsburgh last week the price ol steel scrap forged ahead 50-c- to $15.25 per ton--a significant portent of good autumn steel news.

Meantime, in its ponderous ascent from Depression's slough, U. S. Steel Corp. reported profits of $16,233,000 for the first six months of 1936, about three-fourths of which was earned in the June quarter. From 1931 through July 1936 the Steel Corporation paid out nearly $175,000,000 more than it took in, even though no dividends were declared on the common stock and the preferred dividend was pared from $7 to $2 per share. In the June quarter this year the preferred dividend was fully earned, with enough left over to show earnings of 75-c- per share on the common. But the conservative directorate, having duly considered the past "draft on undivided surplus" and the vast program of plant improvement now under way, decided to husband their profits, voted a quarterly preferred payment of $1 per share, double the recent rate but still short of the regular $1.75.

Most of Steel's competitors, suffering less from the corporate stiffness which comes with age and size, have clambered even higher from their profitless slough. Bethlehem Steel was able to show a $1,193,000 profit even in the first six months of last year. This year its six-month earnings were $4,034,000. Bethlehem's unfilled orders at the end of June were $89,500,000, a peacetime high. At its Sparrows Point plant near Baltimore the country's No. 2 steel company has re-opened its shipyards after years of inactivity, is expecting big ship-plate orders from other yards. "There is a better demand in practically all lines," said Bethlehem's President Eugene Grace last week. "Buying has increased in heavy steel. The railroads are taking a few rails and some material for rebuilding equipment. The automobile demand is holding up for this year's models and leaders of the motor industry anticipate a good year in 1937."*

Other typical steel earnings:

P: Tom Mercer Girdler's Republic Steel Corp. showed a six-month net of $3,022,000. In the same period last year the No. 3 U. S. steel company reported $2,756,000.

P: Jones & Laughlin, biggest family-owned company in the industry, reported a slim profit of $182,000 for the first half, compared to a $750,000 loss for the first half of 1935.

P: Under the able management of Chicago's Block family, Inland Steel Co. made more money ($3,298,000) in the June quarter than in any other quarter in the company's history. The figure for the six months was $5,232,000 as against $4,858,000 in the first half of 1935.

P: Curiously, Ernest Tener Weir's National Steel Corp., which was able to show a profit in every year of Depression, reported a drop in six-month earnings from $6,558,000 in 1935 to $5,182,000 in 1936.

*Motor makers are doing pretty well in 1936. On the heels of record six-month profits reported fortnight ago by Chrysler Corp., General Motors last week announced that its June quarter was he best since 1929, with profits amounting to $88,000,000. GM's six-month profits were $140,000,000 as against $83,000,000 in the same period last year.

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