The figures show clearly how production rapidly increased up to May under the stimulus of the general spring trade, stocks declining steadily, how then the tide turned, stocks accumulating in May heavily followed by a rapid blowing out of furnaces. In midsummer, with developing confidence, production rose rapidly, the movement being emphasized by a steady drawing upon the reserve supplies. Since the opening of the current year this revival has continued, culminating in March and in April in a rate of consumption of fully 2,000,000 tons per month.

The apparent home consumption of pig iren during 1904 compared as follows with that of 1902 and 1903 and of previous years:

Consumption, therefore, declined over 1,300,000 tons below that of 1903, and over 1,700,000 tons as compared with 1902. In December, however, it had again attained proportions rivaling the best previous record, and initiating the marvellous development which has since followed during the current year.

For the first eight months of the year prices fluctuated within a narrow range, there being a keen struggle between the four principal districts, the South on the one hand, which sells in all competitive markets, and the Eastern furnaces on the seaboard and in New-England, the Buffalo district, which in summer reaches down to New-York, and at all times into New-England, the Central West and the Chicago district, which markets its tonnage chiefly in that section. This applies particularly to foundry iron, of which the Pittsburgh district produces but very little, and also to basic pig iron for the manufacture of basic open hearth steel, of which, however, Buffalo and Chicago produce little.

A review of the situation in the Birmingham district will serve to illustrate the course of events. After heavy buying at the close of 1903, on the basis of $9 per ton, Birmingham for No. 2 Foundry Pig Iron makers attempted to hold the market at $10 by agreement. Northern makers in the Central West were, however,

selling under stress at the relatively low price of $12.50, so that gradually prices receded in the South to the parity of $9 per ton. At the close of February, however, a buying movement was started by the purchase on the part of the United States Steel Corporation of about 200,000 tons of pig iron for steel making purposes.

There was a very lively movement which caused an advance to $9.25, and in the middle of the month of March sellers had worked themselves up to asking $10 per ton, which, however, checked the demand. With the middle of March came the report of cancellations on the part of the Steel Corporation, and May brought declining prices which culminated in $9 iron in June. The only relief was the heavy consumption on the part of the manufacturers of cast iron water pipe who were very busy.

July brought the strike of the coal miners in the Birmingham district, which hampered production of pig iron in that section during the balance of the whole year, in spite of the fact that a considerable quantity of coke was brought into the district from Virginia and West Virginia fields. While prices were put up to $9.50, the bulk of the iron was taken by local founders since the low prices at which pig iron was selling in competitive markets kept consumers from the Southern makers.

In September the market weakened to $9.25, but the bulk of the business was done by Northern makers who effected large sales on the comparatively low basis of $11.50 at Northern furnaces in the Central West.

A sudden radical change however took place in October, when prices of Southern irons jumped from $9.50 to $12, and Northern makes from $11.50 up to $13, the latter advancing more slowly under a very large business. The heavy movement continued throughout November, Southern iron gaining another $1.50 while Northern iron_rose from $13 to $15.50. Further headway was gained during December, Southern iron closing the year at $14 and Northern iron at $16.

The Eastern iron trade followed a similar course. Lehigh Valley pig iron started the year on the basis of $14.50 at Philadelphia for No. 2 Foundry and declined gradually to $14.25 in March. There was a recovery to $14.75 in April and May, but the metal weakened to $14.25 in June and July, and went off to $14 in August and September. The Eastern markets lagged behind the other districts during the early part of the revival, and it was not until November and December that quite a rapid rise took place, prices reaching $16 in December.

For a series of years the production of Bessemer and open hearth steel ingots and castings has been as follows:

PRODUCTION OF STEEL INGOTS.

1900.

1901.

1902.

1903.

1904.

Bessemer..gross tons, 6,684,770 8,713,302 9,306,471 8,592,829 7,859,140 Open Hearth. 3,398,135 4,656,309 5,687,720 5,829,911 5,907,666

Total..gross tons, 10,082,905 13,369,611 14,994,191 14,422,740 13,766,806

C

The product of Bessemer steel was very seriously affected by the decline in the requirements for rails, which were almost exclusively made, until the last year or two, of Bessemer metal. The Tennessee Company is now making a good record with basic open hearth steel rails.

While nominally the Billet Association was in existence during the first half of 1904, its official prices did not rule in the markets. They drooped steadily, and while the pool price was $23 they were in August down to $19. The hollowness of the association was made manifest when the Republic Iron and Steel Company accepted a contract for the manufacture of 100,000 tons of billets for the Pittsburgh Steel Company, a large plant rolling wire and some bands and hoops. This was a conversion arrangement the rolling mill delivering to the steel works pig iron purchased in the open market, which the steel works converted into steel at a tonnage price. The billet pool was reorganized in the middle of September, fixing the price at $19.50. In the middle of November, under the pressure of a large business, the pool advanced the price to $21, and before the end of the year premiums were being paid by buyers for prompt delivery.

During the summer some of the leading interests again entered the foreign markets and considerable quantities of steel were sold for forward delivery, notably in England. This is shown by the export returns, which show shipments to foreign countries during 1904 of 314,324 tons, as compared with imports of foreign steel of 261,559 tons in 1903, and 286,830 tons in 1902.

After a series of difficult negotiations the steel rail association agreement was renewed for 1905, two of the companies, however, the Tennessee Coal, Iron and Railroad Company and the Colorado Fuel and Iron Company not being members of the same. The agreement was modified in this respect that the price is at mill, and that freight to destination must be added. The former system of equalizing freights was thus done away with. Light rails were not included, so that while Standard rails were quoted steadily at $28, light rails at times sold down to and below $18 per ton.

The following table shows the production of rails for a series of years:

Taking into account the imports and exports of steel rails, there

is revealed an even larger falling off in the home requirements, than the production figures indicate. For the last three years there is thus shown an apparent consumption of 1,759,483 tons in 1904, as compared with 3,011,474 tons in 1903, and 2,872,149 tons in 1902.

In the heavier finished lines business was slack during the greater part of the year, and was complicated by special causes. The beam association which controls the heavy structural shapes maintained prices at a fairly even level during the first half of the year, but inequalities increased, it being particularly difficult to trace concessions made in fabricated work. The majority of the structural mills have bridge shops of their own, so that they may do fabricating even at a loss in order to create a market for shapes and plates. During the summer the large new mill of the Lackawanna Steel Company approaching completion, and not being a member of the pool, took contracts aggregating close to 150,000 tons at prices considerably below official figures. The result was that the pool was on the eve of disruption. The situation was met by putting prices down to 1.40 cents per pound at mill while plates were reduced to 1.30 cents per pound,the Lackawanna Company having under conconstruction plate mills also. The revival of the demand, however, late in December, encouraged the associations to advance the price of beams to 1.50 cents per pound, and that of plates to 1.40 cents per pound at mill.

In the lighter branches there were some interesting developments during 1904. The total tonnage of the sheet and tin plate industry is about 1,000,000 tons per annum, of which a growing proportion is controlled by independent companies. In the sheet industry at the close of the year 1903 there were 300 completed mills, of which 136 were in plants independent of the United States Steel Corporation. At the close of 1904, not less than 173 out of a total of 336 were operated by independent producers. In the tin plate industry the number of mills of the Steel Corporation was decreased during 1904 from 264 to 248, owing to the dismantling of some of the smaller plants. The number of independent mills increased during the same time from 71 to 83 mills.

During the year there was some complicated movements in the relations between the manufacturers and the union and non-union workmen. In April a reduction of about 18 per cent. was assented to by the Amalgamated Association in the sheet and tin plate scales, and in July it was decided that 14 per cent. instead of 3 per be deducted from the men's wages in order to aid the manufacturers to supplant imported tin plate for the re-export trade under the drawback clauses of the tariff.

The annual product of the United States Steel Corporation is shown in the table on the following page :

In 1903 the United States Steel Corporation produced 59.9 per cent. of the total production of plates and sheets, 73.1 per cent. of the wire rods and 29.8 per cent. of the bars, skelp, open hearth and iron rails and other finished rolled products made in this country. Of the total rolled products of all kinds the percentage credited to the United States Steel Corporation was 51.2 per cent. out of a total of 13,207,697 gross tons.

The falling off in the percentage of the United States Steel Corporation in the total product of Bessemer ingots and of steel rails is due largely to the fact that the Lackawanna and Colorado mills began to utilize in 1904 their new equipment. They will be factors of increasing importance in 1905. On the other hand the purchase of the Union and Clairton plants by the corporation has enlarged its tonnage in other important branches. During 1904 very important additions to plant were under way in connection with the plants of the Corporation in the Chicago district, and it is there that the most important developments are taking place. They embrace a large new open hearth plant, plate mills and structural mills.

Under the pressure of the conditions brought about by a sharp decline in the demand the imports of iron and steel declined heavily during 1904, the total valuation for that year having been $21,621,970, as compared with $41,255,864 in 1903, and $41,468,826 in 1902. The exports show, however, a striking increase, from $97,892,036 in 1903 and $99,135,865 in 1903 to $128,553,613 in 1904.

The swift changes which have taken place in some of the heavier branches are well illustrated by the following table, in which imports and exports of those articles of iron and steel for which. tonnage figures are available have been placed side by side :