Never did year dawn so black for American industry as did 1915. The financial world, stunned by Germany’s unexpected attempt at world conquest, could see only the immense economic waste that war is. That the conflict in Europe could have a stimulating effect on American industry seemed unthinkable at that dark period, and industry as a whole seemed shaken to its foundations. Steel, the barometer of trade, naturally reflected this situation sharply.
At the close of 1914, as we have seen, operations of the Corporation’s subsidiaries reached the lowest point on record and the new year brought with it no sign of early betterment. Hence it was natural that all except the most confirmed optimists faced the future with doubt if not with dread.
This situation reflected itself plainly in the big company’s profits, which that January fell to $1,687,150. This proved to be the low point, however, a slight revivification of business beginning to make itself felt the following month, and being even more pronounced in March, when operations reached 60 per cent. capacity. But even then conditions were far from being satisfactory, earnings for the last month of the quarter aggregating only $7,132,081, and for the three months, $12,457,809.
But, difficult as it was to realize it at the time, the war was destined to bring to American business the biggest boom it had ever experienced. As the struggle developed the Allied powers had brought home to them sharply their great shortage of war materials. Germany, preparing years before for the struggle, had at the start an immense preponderance of guns, shells, automobiles, airplanes, and other articles, and there was no hope of crushing the Kaiser’s hordes unless and until the Entente could meet its foe on equal terms measured in material.
It had become a war of machines, a war largely of steel. And the Allies’ production of steel and machines could not be brought up to the point necessary to make victory certain. There was no country but America to turn to for the needed supplies.
Wire was the first product which felt the stimulus of the new demand. Before the beginning of 1915 both sides had settled down to the slow warfare of the trenches, and for the protection of these hundreds of thousands of miles of barbed wire were necessary. England, although until the beginning of the twentieth century the principal steel-manufacturing country in the world, had never devoted much of her capacity to wire products, and even before the war had been in the custom of importing a large part of her need of this commodity from the United States. And in their extremity both England and France looked across the Atlantic for more and more of this particular product, and the wire mills of the Steel Corporation and other producers here began to increase output and to show improving earnings.
Then came the demand for shrapnel bars, steel for explosive shells, guns, automobiles, trucks, and almost every article used in modern warfare. Russia, attempting to move immense armies with inadequate railroad transportation facilities, began to ask for locomotives and steel cars in large numbers, as well as steel rails to run them on, and the export steel trade of this country grew to unprecedented proportions.
Making a Steel Tube
Before the middle of the year the Corporation was operating on 90 per cent. capacity and was sending abroad one third of all the steel it produced. In the best pre-war year foreign shipments had amounted to only 18 per cent. of the output of the big company’s plants.