Part 28

Cooperation in France among all manufacturers of iron and steel and in fact all other industrial works, is marvelous, and could well be imitated in our own country. The various special branches of metal trades have both local and national syndicate organizations for the discussion of their trade problems, and means of voicing the particular needs of their trade, on which a majority sentiment has been expressed. These chamber syndicates are in turn combined into a National Union. These national unions are members of the Comite des Forges de France, which is the cap stone of the trade organizations of the steel and iron industries. The most striking fact to an American regarding the personnel of the governing board and general committee of the Comite des Forges de France is that a considerable number of its members are in one or the other of the legislative bodies, and practically hold positions at the head of the Government Committees, organized to look after the very business in which they are engaged.

In spite of the fact that at the beginning of trench warfare, France had lost behind the German line 80 per cent of her normal pig-iron production, and 70 per cent of her steel production, it has been possible by the utilization of lower grade ore in other districts of France, and which were not exploited to any extent previously, to increase the steel production of the country 100 per cent over that of last year. The interesting fact regarding this is that of the production which has been cut off the larger part in pig iron is of so-called Thomas iron (non-Bessemer), and in the case of steel, mostly "Martin" or acid open hearth. Neither of these products enters to any considerable extent into the manufacture of projectiles. The plants in the center and southern part of France were already producing the special qualities of steel required for artillery use, hence the amount of special quality steel brought in from foreign countries, in both the raw and semi-manufactured state, was an immediate necessity for the country at outbreak of hostilities. It is also noticeable, and based on information obtained from leading steel manufacturers, that many idle and in some cases abandoned plants have been rehabilitated and utilized as far as possible. As a matter of fact, I am told that there is not a single idle plant of any kind formerly engaged in the manufacture of fabrication of steel that is not now in full operation, either in its original form or by being transformed into a munitions plant.

It is only too evident that the present pre-occupation of steel manufacturers is to bend every effort to assist in the final military victory of the Allies. However, I met steel manufacturers, conversing with them freely, and their mental attitude is that when the military victory has been achieved and France has again entered into possession of her own, they are determined to succeed in producing a close union with the British producers and thus prevent a rapid return of German industrial prosperity. With this fact in mind, it seems clear to me that the United States will have to make up its mind in which field it will choose to work. It certainly will be impossible to continue to hold a position of theoretical neutrality.

Welfare work in Le Creusot is in a high state of efficiency. Comfortable modern dwellings are furnished the employees at low rental. Hospital facilities are of the best and everything is done to bring the workman in close and harmonious relations with his employer.

It has been suggested that I embody in this report something with reference to the mines in France, but as the data concerning them has been printed in public documents of the French Minister of Mines, I will omit this detail with the single word that these reports include minerals of all kinds.

I am indebted to John Weare, representative of the United States Steel Products Company in France, for valuable information in the preparation of this brief report.

JOSEPH G. BUTLER, Jr.

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In the early part of December I was requested by the Financial editor of the New York Times to give my views on the present outlook and more particularly with reference to the condition of the American Iron and Steel industry, brought about by the war. This letter to Mr. Phillips is copied.

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December 20th, 1916.

Mr. Osmund Phillips, New York, N. Y.

My dear Mr. Phillips:--

I have before me your circular letter of the 8th instant and your kind favor of recent date.

In reply to your question--What is the outlook for business in the early months of 1917?

The outlook is good. Our mills and plants for several months could not nil the domestic orders even if the war orders were entirely withdrawn. I am told that all the recent orders placed are firm and are to be filled regardless of the ending of the war.

Will the end of the European war mark the end of the present period of prosperity?

This is a broad and doubtful question. I do not think the end of the war will end the present period of prosperity. There will be a temporary halt. I might add in this connection, that in my judgment the last overture from the Kaiser may result in the cessation of the war, but I believe this period to be quite a distance off. There are three parties in Germany. First, the Kaiser and the Prussian Military circle, who have been in charge and have carried their own way up to very nearly the present time. Second, there are the people of Germany who are the common people, the good substantial people, the majority of whom have been kept in ignorance of the real beginning of the war and the cause for its continuing. These people are commencing to get information and as time goes on will be in full possession of the facts. Third, the business men of Germany. There are no better nor more substantial business men any place in the world than those in Germany; these men are really responsible for the building up of Germany and it is my opinion that these people are now responsible for the pressure that is undoubtedly being brought on the Kaiser and the military party for the settlement of the war. I believe that this pressure will continue until a settlement is made. These business men recognize that the longer the settlement is put off the harder it will be for Germany.

In your opinion, what proportion of the country's total trade, both foreign and domestic, during the past year, was due to the war?

I think about one-half of the trade of the country is due greatly, directly and indirectly to the war.

Do you think that labor demands have exceeded labor's fair share of the increase in profits?

I do not think labor demands have exceeded labor's fair share. The high cost of living fully offsets the greater wages paid.

Do you think present wage rates can be maintained?

I do not think that present wages can be maintained indefinitely. There will undoubtedly be a reaction with a certain reduction in the cost of living and labor will have to share in the reduction.

What do you think of the important legislation passed in 1916 affecting business, including the eight hour day, increase in income tax, the shipping bill, retaliation against foreign trade interference, etc.?

The eight hour a day law was an abnormal affair undoubtedly forced through for political purposes, and never should have been passed and should be promptly repealed.

The increase in the income tax is all right.

The shipping bill will be valuable if the right kind of men are put on the Commission. Some of these under consideration are wholly incapable.