Steel & Earnings

Year ago last week the prudent directors of U. S. Steel Corp. pared their preferred dividend from $7 to $2 a share. Big Steel had just piled up a staggering deficit of $91,891,867.85. Last week when the directors of the biggest U. S. industrial corporation met to ponder dividends at No. 71 Broadway, Manhattan, they had before them the annual report for 1933. Against an operating loss of $12,729,000 in 1932 was an operating profit of $18,439,000. To this was added special income of $1,335,000. But from that total was deducted $55,795,000 for bond interest, extraordinary expenses, and charges for depreciation and depletion. The result was net loss of $36,020.000. Preferred dividends and Federal capital stock tax took another $7,700,000 and 1933 footed up to a grand deficit of $43,724,000. Even so, the Steel directors decided to continue the 50-c- quarterly preferred payments. The New Deal, so far, has not been an unmixed blessing to the steel industry. "Due to the requirements of the steel code," declared U. S. Steel Chairman Taylor last week, "wages in the fourth quarter . . . averaged an increase of about 24% over the rates prevailing prior [to the code]." Although U. S. Steel was operating at less than one-third of capacity in the last three months, there were 190,000 people on the payroll--about 90% of the total number who normally look to Steel for employment.*

What was true of U. S. Steel, which is 40% of the industry, was true of the independents. Bethlehem reported a small profit for the last quarter but for the full year a net loss of $8,735,000. Its 1932 net loss was $19,404,000. Inland Steel turned a 1932 deficit of $3,320,000 into a nominal profit of $166,000. Jones & Laughlin cut a 1932 net loss of $7,910,000 down to $5,366,000. National Steel, only major steel company to earn a profit every year of the Depression, boosted its income from $1,662,000 in 1932 to $2,812,000 last year. Meanwhile the rest of U. S. industry added these earnings reports to the 1933 crop:

(ooo omitted)

1933 1932

(L=loss)

Air Reduction $3,192 $2,293

Atlantic Refining .... 6,556* 3,918

Auburn Automobile (year ended Nov.30) 2,307 (L) 974 (L)

Childs Co 223 (L) 203 (L)

Cluett, Peabody & Co. 508 271 (L)

Commercial Investment Trust 7,474 5,719

Commonwealth &Southern 8,496 13,242

Consolidated Gas (Baltimore) 5,717 6,152

E. I. duPont deNemours 38,895 26,234

Fuller Brush 118 21 (L)

General Cigar 721 2,058

Hercules Powder 2,363 889

S. S. Kresge 8,441 5,656

Liggett & Myers 16,731 23,075

Marshall Field 97 7,987 (L)

Minneapolis-Honeywell 831 190

National Distillers ... 6,127 522

Pacific Lighting 6,337 5,793

Standard Brands, Inc..15,048 15,001

Sun Oil 6,971 4,198

F. W. Woolworth 28,690 22,606

*Includes $1,320,000 profit from sale of assets.

*Encouraged by steelmen and not denied by motor makers is a persistent rumor that other automobile companies will take a tip from Henry Ford and buy or build their own steel plants. Steel's biggest customers resent the fact that under the steel code they no longer get discounts on their orders. Last week it was no sooner discovered that General Motors was dickering for an option on Corrigan-McKinney Steel Co., than it was learned that negotiations had been dropped.

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