Steel and Wire* In this chart, also, the most noticeable fact is the very rapid increase in all prices during the year 1899. This increase in prices is to be chiefly ascribed to the enormous demand both at home and abroad for steel of all kinds, as was explained in connection with the chart showing prices of tin plate. If we note the line H, showing the margin between the price per hundred pounds of steel billets D, the raw material, and that of wire nails C, the finished product, we shall note that there was a steady decline in this margin from the year 1890 to 1895, in the early part of which the lowest point was touched. During the latter part of 1895, and until nearly the close of 1896, there was a very decided rise, not merely * The prices for the chart showing the crude and finished iron and steel were furnished by the editor of the "Iron Age," at the request of Mr. Gates, chairman of the American Steel and Wire Company. Prices of steel billets are Pittsburg prices; those of barb wire are those at mill; those of smooth wire and nails are New York prices. In this chart steel billets have been taken as the raw material: all of the other articles may be considered finished products. [Report of Industrial Commission, Vol. I., PP. 55, 56.] in the price of wire nails, but also in the margin. This great increase in the margin was due chiefly to the influence of the wirenail pool, which, during that period, secured substantial control of the market for a time, as is explained in detail in the chapter on Combination and Monopoly, p. 62. The sudden fall in the latter part of 1896 came at the time of the breaking of the wire-nail pool. It is also true that at about the same time there was a change of base for the fixing of the market prices of wire nails, but this change in the base did not modify materially the margin as it appears in the chart. It will be noticed, however, that after the break in the wire-nail pool the margin during the years 1897 and 1898 still remained considerably higher than it had been for three years before the formation of the pool, with, however, a steady though slight decline. The marked increase in the price of steel billets began in November, 1898; the increase in the price of wire nails followed in the succeeding month, and both have increased very rapidly during most of the time since. The American Steel and Wire Company, which controls from 65 to 95 per cent. of the output of wire nails, was formed January, 1899. In addition to the increase in the price of steel billets, there has also been a decided increase in the wages of the laborers engaged in the manufacture of wire and wire nails. The increase in the wages of the workingmen is not shown in the chart, but from testimony given, the increase in wages among the wire and nail workers has been greater than that among the workers engaged in the manufacture of steel billets, so that there would normally be, on that account, some increase in the margin. Another reason for an increase in the margin besides that of an increased profit is this: There is always a considerable waste in turning the raw material, steel billets, into wire or wire nails. If, for example, this loss were 5 per cent. in the case of steel valued at $15 a ton the loss would be 75 cents, whereas if steel were $30 a ton the loss would be $1.50. Steel has more than doubled in price; in consequence, with the same profit, the margin should have increased somewhat. On the whole, however, it seems, both from the chart and from outside testimony, that the margin, as represented by the line H, indicates also quite a decided increase in the profits. It will be noted that in the last two months of the year 1899 there was a decided falling off in this margin, showing that just at that time, at any rate, there was a check in the profits, the finished product having lost a little in price, while steel billets had gained. In October the fall in price of billets had increased profits. The presumption is here, as in the case of tin plate, that there would have been without any combination a decided increase, not merely in the price of the finished product, but also in the margin between the crude and the finished product, on account of the enormous demand. The testimony seems to be uniform on this point, that none of the manufacturers have been able to meet the demand; but in this case also it seems certain that the combination was able to take advantage of the opportunity better than individual manufacturers could have done. Another factor needs to be taken into account in the consideration of the chart. The figures represented are those furnished by the "Iron Age." It is probable that there are no other figures in this country that represent more nearly |