Show UPS AND DOWNS OF STEEL Why It Is as Andrew Carnegie Says Either Prince or Pauper The steel corporation since Us formation fIe years ago has paid out more than 300000000 In bond Interest Inter-est and stock dividends nnd more than 550000000 to Its workmen out of gross sales of more than 2000000 000 writes Frank Fayant In Success Magazine The effect of declining prices and consumption on the profits of steel making is to wipe them out In a short time If a steel company for example exam-ple in good times makes a million tons of finished products at a cost of 50 a ton and sells Its tonnage at an average price of C8 a ton It makes 18 a ton or 18000000 on Its output out-put If In a reaction In the steel business the companys output declines de-clines to 750000 tons while prices fall only 25 per l cent with no reduction reduc-tion In operating costs tho profits are cut from 18000000 to 1000000 In 1802 the steel corporation received re-ceived 500000000 for 8200000 tons of products which cost to produce 420000000 It had a profit therefore of 140000000 Two years later although al-though Its output had fallen off only 17 per cent and the average selling price per ton had declined only 4 ½ per cent and the average cost had risen only 4 ½ per cent tho profits declined de-clined to 80000000 or a loss of 43 per cent The steel corporation is now producing 10000000 tons a year A variation of only five dollars a ton or seven per cent in the average ton price of Its product if unaccompanied by a variation In cost means a variation vari-ation of 50000000 a year In Ha profits This Is enough to pay ten I cent dividends on the half billion bil-lion per dollars of common stock This Is why Andrew Carnegie says steel Is either a prince or a pauper |