Steel--The Hard Sinews of Defense

"Steel--The Hard Sinews of Defense." By Irving S. Olds. Greater Pittsburgh, October 1940, pp. 14-15. An address delivered by Mr. Irving S. Olds, chairman of the board of directors of the United States Steel Corporation, at the William Penn Hotel September 18, 1940.

Pittsburgh and the steel industry are almost synonymous terms to most people. To the steel man, this great city has advantages possessed by only a few other districts in this broad land. It is hardly necessary, or even appropriate, for me to mention to this gathering Pittsburgh's ready accessibility to the sources of supply of the essential raw materials used in the manufacture of steel, her proximity to important consuming markets, her adequate supply of skilled labor, or her available transportation facilities. The Pittsburgh district embraces 28 per cent of the steel producing capacity of the nation. About 36 per cent of the total steel making capacity of United States Steel is located here, not to mention numerous and important finishing facilities.

Pittsburgh Steel Vital to Defense.
Pittsburgh as a steel manufacturing center must inevitably be a vital factor in the successful completion of the present preparedness program. Steel is the most important single war material. Our battleships, cruisers, and other naval vessels are built of steel; their sides and decks carry protective steel armor plate. The same is true of the armored tank, a sort of "land cruiser" which seems to have been so effective in the German invasion of Holland, Belgium, and France. And I could go down the long list of aircraft, ordnance, anti-aircraft guns, rifles, shells, bombs, torpedoes, and the many other items of military and naval equipment, and point out in each case the extent to which steel enters into their manufacture. Of course, any such list should be expanded to include structural steel, railway materials, tin plate, sheets, and other steel products for trucks and automobiles, and numerous other commercial products used for military purposes, for all of which vast productive capacity exists in the Pittsburgh district.

These facilities can be most effective in carrying forward the national defense program only if employed by those who are best qualified to use them. To my way of thinking, there can be no question but that the peak of mass production will be attained at an earlier date and the full quantity of the desired materials of war delivered within a shorter period and at a lower cost to the government if under its own management. I am certain that generally speaking the personnel of American business is both experienced and competent and as patriotic as any other group of American citizens. And it is also with assurance that I promise the wholehearted loyalty to the common cause of all of our officials and associates, both in management and in operations.

Steel Industry Cooperating.
We have read in the newspapers recently of a "sit-down strike of capital" and of industry's "refusal" to cooperate with the government. There is no basis for any of these stories. Unfortunately, we have about us critics who appear only too willing, by reason of ignorance or otherwise, to point a condemning finger toward business without attempting to ascertain the underlying facts. President Roosevelt and Mr. Knudsen of the Defense Commission recently gave the lie to these false reports by informing the American people that there is no evidence of any attitude on the part of American industry other than thorough cooperation. Confining myself for the moment to the steel industry, I am positive that this industry will not be found lacking in cooperation or in zeal or in patriotism. It will acquit itself creditably and honorably in any task which may be assigned to it in the defense program as was true in 1917 and 1918.

Expansion at Homestead.
If I may be permitted to speak more specifically and to give you a summary of what is already being done by the subsidiaries of the steel corporation, I should mention the expansion of our facilities at Homestead and at Mingo Junction, Ohio, for the production of armor plate; a considerable enlargement of the government's armor plate plant at Charleston, West Virginia, which is operated under lease by Carnegie-Illinois Steel Corporation; the installation of new equipment in the Pittsburgh district by National Tube Company for the manufacture of unloaded bombs and shells of different sizes; and a substantial increase in the facilities of the Federal Shipbuilding and Dry Dock Company at Kearny, New Jersey, so as to undertake the construction of additional vessels for the Navy. In passing, I mention that this shipbuilding subsidiary recently delivered to the Navy two completed destroyers seven months ahead of the contract delivery date.

These undertakings are all under direct government contract. In addition, our subsidiary manufacturing companies are executing contracts for the supply of steel in one form or another to outside concerns who have made their own contracts with the Army or Navy for the delivery of war materials. I hope that I shall not be considered boastful or presumptuous when I say that United States Steel has met without delay every requirement of the government in the national defense program and that the policy of United States Steel is to continue to cooperate fully and unqualifiedly in carrying to completion a program which should have the hearty support of every American citizen who respects this country and its democratic institutions. Defensively the United States must be equipped and ready to resist successfully an attack from any quarter.

We hear a lot these days of the activities of the members of the Defense Commission; of large orders placed by the Army or Navy; and of this or that company installing facilities for the building of aircraft, or for the construction of tanks or anti-aircraft guns, or for the production of explosives. Undoubtedly, this represents substantial and most creditable progress. But I wonder whether the average citizen has yet been sufficiently informed and whether he fully realizes that in some instances months must elapse before deliveries in any quantity will be forthcoming under these contracts; that a particular article "on order" may be many months away from utilization as a weapon of defense. Modern instruments of war are not simple either of design or of actual construction, and an extended period must elapse before production in any quantity can be realized. Hundreds or even thousands of drawings may be necessary for the building of the weapon so as to incorporate what has been learned from the present war. Then follows the installation of the special equipment required for the actual work of construction. This is all in the nature of things; and it will not be surprising if many insufficiencies in military equipment and supplies still exist a year hence. But American industry must not be held responsible for delays in the commencement of the program, or for the time necessarily required to carry out the program. Business is just as desirous as anyone else of speeding output, of completing contracts, and of clearing the decks for still further production in the public interest.

96.6 Per Cent of Capacity.
These words of caution as to what reasonably may be expected from the nation's preparedness effort may seem to some of you as not being borne out by the present high operating rate in the steel industry. Last week United States Steel operated at 96.6 per cent of ingot capacity. The industry as a whole operated at about 92 per cent of ingot capacity. As you know, steel operating rates have been high for many weeks. Unquestionably the war abroad and our own defense program have played an important part in bringing about the heavy demand for steel products during recent months. However, the quantity of steel sold directly to the government or to contractors who are known to have taken national defense contracts still accounts for only a small percentage of the present production of steel. I should add that it is not always easy to trace the ultimate disposition of a piece of steel which is sold in what appears on the surface to be a purely domestic commercial transaction in no way connected with national defense. I do not mean to convey the impression that when steel in greater quantities is required at some later date for the national defense program the steel industry will be found unequal to the task imposed upon it. On the contrary, I believe that the elasticity within the steel industry will permit an ample supply of steel when needed for the requirements of the Army and Navy, although some system of priorities may be found necessary. In the present emergency, it is fortunate that the industry has not taken too seriously the charges of excess capacity made not so many months ago by certain critics.

In conclusion, just a few words more about Pittsburgh, which has honored the steel corporation by the splendid attendance of its leading citizens at this luncheon. Statistics are uninteresting--still I hope you will bear with me when I mention that the annual steel producing capacity of the steel corporation companies in the Pittsburgh district aggregates about l0,000,000 tons; and that at the present time these facilities employ more than 60,000 men and women.