Democratic Sentinel, Volume 15, Number 26, Rensselaer, Jasper County, 17 July 1891 — FIGHTING FOR PROFITS. [ARTICLE]

FIGHTING FOR PROFITS.

TH£J STEEL BAIL MAKERS AND THEIR METHODS. How They Pot Up Prices When Many Railroa js Are Building—Using the Tariff Duty to t queeze the Railroads—A Case for Domestic Tin Plate Gunners. One of the best known among all the laws of trade is that a large demand for any commodity will cause prices to rise; and it is equally well known that a light demand will cause prices to decline. A familiar case in point just now is that of tin plates. As scon as the McKinley bill became a law last fall, with its increased duty on tin plates after July 1, 1891, our dealers began at once to lay in enormous stocks. The largo orders received by ‘ the* Welsh manufacturers Showed them that consumers were determined to have tin plates, even at higher prices; and hcncepri.es began to rise. But pr'ces do not mote themselves; they are the'result of the conflicting interests of buyer and seller. The buyer beats trices down to the lowest jossib o point; the seller demands all that he thinks the buyer will give. There is no ■question on either side of benevolence or ■of favoritism; it is purely a matter of self-interest —a struggle for the pound of flesh. But the rise in price of t'n plates in Wales has had a peculiar efiect upon the protectionist mind in America. Our high tariff tin plate organs and our prospective tin plate manufacturers hasten to point out to us that we are exposed to the tender mercies of a foreign monopoly. Prices, they tell us, are fixed by this grasping foreign monopo y, and are always screwed up to the highest possible point. Such is is the picture that our protected manufacturers and their newspapers see in cases where foreign trade is concerned. Why do they fail to see that in the home market precisely the same state of things prevails? Why do they strain at a foreign gnat and svva.low a home market camel? They even pretend that there is a tin plate trust in Wa es, though such a thing has never existed there. But why do they raise their hands in holy horror at a phantom tin plate trust in Wales, whiio our own blessed homo maiket is overrun and trampled upon by trusts as uo other land ou earth? In pointing out how the foreign tinplate makers have raised prices under the influence of a brisk demand iron this side, they overlook tho fact that American manufacturers, that all manufacturers, are governed by the same Tule in their business. If these people reallv have sueh a righteous indignation against the foreigner, they might find an even more worthy object of their wrath in our steel-rail industry. For many years our rail men have been in combinations to. control both prices and output. Whenever there has been much railroad building, they have shoved prices up and made enormous profits, lowering prices again when times were dull, and contenting thonnelves with smaller profits. At present they are soiling at prices fixed last Jauuary (s3l at Chicago, 830 at Pittsburg;, and firmly adhered to over since. The steel rail combination has always pursued the policy of raising prices when railroad building was most active. In fact, they have often made use of their combination for the purpose of squeezing the largest possible profits out of tbo railroads, bleeding them to she full extent which tho high duty would permit Thus about ten years ago there was a tremendous boom in railroad building. The demand was so great that our domestic mills turned out.in the three years, 1880-’B2, an average of 1,106,000 tons per year, and an average of 178,000 tons ier year wero imported in addition. The duty on rails was then S2B per ton, and tho average price of domestic rails was for these three years ,$28.67 above tho like average in England, the price here averaging $59. During the preceding three years the domestic manufacturers had to content themselves with a much lower price, the average being $44.50 per ton, or only $17.50 per ton above ttie English price. Again, the two years, 1884-’BS. were years of depression, and the demand for ?ails fell off to 980,000 tons a year. During these two years our rail makers had to take $29.60 on an average for their rails, or only $<5.47 above the English price. In the two years, 18S6-’B7, there was another boom in railroad building, the yearly consumption rising to 1,836,000 tons of domestic and 89,500 tons of foreign rails. The tariff had meanwhile been lowered to sl7 a ton, and the enormous profits already noticed were no longer possible. Still the rail-makers succeeded in squeezing out nearly the last drop of profit there was in the new duty, the average price for the two years being $35.80 a ton, or $16.60 above the price in England. In view of these facts it is clear that our rail makers use the tariff to get as much profit as the market will bear. The price of rails has been manipulated in a very arbitrary manner, and has varied much more than tin plate prices have. Notwithstanding this fact our high-tariff organs deny even that there Is a steel-rail combination In America, and go gunning rather for a mythical tin-plate trust in Wales, although the prices in plates showed an almost unbroken downward movement until the McKinley law was enacted. Tho apologists for the rail makers may claim that the great rises and falls in rail prices are due to a varying Cost of production. But this will not do. A varying cost of production thero undoubtedly is; but the price of rails doe* not rise or fall with the cost of making. Indeed, the contrary is often the ■case. Thus, in February and March, 1887, the cost of making rails at one of our largest mills, as shown from Its books, was $29.93 a ton, and the selling price was $39.50, a net profit of .$9.57 per ton. In December of the same yera, however, the cost of production had risen to $30.83, while the selling price had fallen to $32, a profit of only *l.rf pbr ton. The conditions of the market had changed, and rails could not bo sold st the former large profits. The manufacturers were forced to adjust themselves to an unfavorable market •and tempt It with lower prices, when naturally some protectionist organ would rise and remark. What woEdeys protection hath wrought? “Protection to American labor” has nowhere failed more dismally to make laborers contented and happy than in -4he great coke and coal Industry of Pennsylvania, where a long strike of some 15,000 men has only recently been settled after a loss of millions of dollars to both sides. But the evil star whi: h presides over the destinies of the coal

Industry seems to follow it to tha remotest West. The protected coal operators of the State of Washington are able to export considerable quautitlrs of toal, but they have just been having a genuine -Pennsylvania quarrel with labor, terminating-at. length in a riot. Now, however, then will be peace. It has just been announced that, “Tho presence of mi itia, it is thought, will prevent any further bloodshed."