Show Steel Points Cost of 1 Keeping Up NEW YORK May 21 CP- CP The high degree of obsolescence In Jn the steel industry necessitating the setting up tip of large tion ton reserves out of ot current earnIngs ear ear- earnIngs earn earn- Ings Is disclosed at length In th the prospectus accompanying the re recent recent re- re re cent sale of ot of ot United Unite States Steel corporation deben deben- tures I This Th discussion reveals reveal at least leas leat two things for the enlightenment of ot Investors One is i the grea great amount of money that must b be spent to keep kep even the leader inthe In Inthe Inthe the Industry abreast of its it com com- The other Is i the vas vast vat total tot of ot capital expenditures that tha can be made over a long period without the Introduction of much mud new flew capital Into the business New Nev Process Employed Use of ot hot finished fat flat fiat rolled role products product has ha been ben giving way constantly con con- during the last lat 12 years ears to cold reduced flat fiat rolled product products products prod prod- for br many purposes The rated annual capacity of United States Steel at the beginning o ot of 1940 for production of ot flat fat hot ho rolled products product was wa ne net tons ton as a compared with net tons ton on on January 1 1935 Certain Certain Car Car- tam tain of such products are further finished S In cold reduction mills mIl On January 1 last lat the rated annual capacity of cold reduction mills was wa tons of sheets sheet and tin tn plate as a compared with wih tons on January 1 1935 The capacity will wl be increased about net tons additional during 1940 and 1941 Modernization Cost Speaking of the cost of this thi modernization program the steel corporation prospectus says To cover the cost of s such ch continuous continuous con con- mills and generally to maintain and equip certain plants plant of subsidiaries with more efficient and economical machinery and facilities fa Ia- duties clies so as a to meet competition on certain products from other manufacturers having more modern modern mod mod- r odem od- od em ern facilities such subsidiaries during during during dur dur- ing the five years ended December 31 1939 expended for capital purposes purposes pur pur- poses poss approximately in modernizing extending and re replacing replacing re- re placing various manufacturing properties Including product by-product coke oven plants Other ther Expenditures Other expenditures for capital capia purposes made by subsidiaries during during during dur dur- ing this thi same period included approximately approximately ap ap- ap- ap proximately for new railroad equipment and boats boat and other rail raI and water transportation tion ton facilities and approximately for other properties not including stripping and development development development de de- de- de expenses at the Iron ore properties The mentioned above above gross gros expenditures expenditures ex ex- ex- ex for capital purposes aggregated aggregated aggregated ag ag- ag- ag approximately In comparison comparion with such expenditures ex ex- ex- ex depreciation and depletion depletion tion ton aggregating approximately were charged against consolidated income during the five years ended December 31 1939 |