50
YEARS IN STEEL
THE STORY OF

The Youngstown Sheet and Tube
Company

THIS IS AMERICA

Copyright 1950

The Youngstown Sheet and Tube Company
Youngstown. Ohio
This is America

   The Youngstown Sheet and Tube Company surveys its fifty years of vigorous growth with a feeling of thankfulness that under our system of free enterprise the Company has been afforded the opportunity to grow, expand and develop. It faces the future with the profound hope and belief that the American people will preserve their liberties and maintain intact their government and all of its constitutional prerogatives. This Company looks forward to another fifty years, and then another, ad infinitum, of continued service to its buying public, its employees, its shareholders and its country. The management, confident in its hope for, and firm in its belief in America, salutes them all.

To Employees, Shareholders and Friends of The Youngstown Sheet and Tube Company:

   Articles of Incorporation of The Youngstown Iron Sheet and Tube Company were filed with the Secretary of State of Ohio at Columbus on November 23, 1900 and the Company’s existence became effective as of that date.
   The purpose of the corporation as stated in the Articles of Incorporation was:
"Said corporation is formed for the purpose of manufacturing and selling sheet iron and steel and other iron and steel products.
   The word "Iron" was eliminated from the corporate name in1905.

   Fifty years is not long in the history of America or of the iron and steel industry but our fiftieth anniversary seems an appropriate occasion to examine briefly the Company’s record. The changes in its structure from year to year were important but obviously cannot be reported in detail in a brochure of this size. We never shall forget the vision, courage, persistence and hard work of the founders and builders of the Company. The problems of today differ drastically from those of the first quarter of the century but today’s management is struggling with equal determination and persistence to find the answers and overcome the difficulties presently being encountered. The attributes that brought success to the Company’s management in its early days are equally important in today’s management. A study of the Company’s progress may make us realize more fully that free America is the best place in which to work and live. Let us accept with confidence the opportunity and challenge of our own future.

 CHAIRMAN OF THE BOARD OF DIRECTORS.

The Youngstown Sheet and Tube Company

   The STORY of any industrial organization would be incomplete without a short history of the community it calls home. One hundred and fifty years ago the Mahoning Valley in eastern Ohio was a dense wilderness. It lay beyond the frontiers of civilization. It was known only to a few adventurous men who visited it occasionally for hunting and trading.
   The first white settlement this district, from which this great industrial area grew, was made about 1790. The Valley has since become one of the most populous and important areas in America; it is particularly important as a steel-producing center.
   Youngstown is about 65 miles from Lake Erie and about 35 miles from the Ohio River. People frequently ask why steel plants were started so far from water transportation and where none of the natural resources existed.
   Most of the original settlers in the Valley were farmers but it was soon discovered that the district had surface iron ores, limestone and timber from which charcoal could be produced. Such discoveries led to construction of the first blast furnace in the

Mahoning Valley district on Yellow Creek near the place where the creek empties into the Mahoning River. This furnace was built about 1803 and was called "Hopewell." Other furnaces were built and operated during the next forty years but the greatest impetus to the iron industry here came about 1845 with the discovery in the Valley of deposits of black band iron ore and a bituminous coal useable in blast furnaces without preliminary treatment.
   These discoveries of raw materials near at hand were made when the supply of surface ores was about depleted and when timber for charcoal was becoming extremely scarce. They antedated the discovery of substantial iron ore deposits in the upper Great Lakes area.
   From 1845 on the iron industry grew rapidly. From 1845 to 1875 no less than 21 blast furnaces, with a combined capacity of approximately 250,000 tons per year, were erected in this district. The growth of blast furnaces from 1875 to 1920 was chiefly in the increased capacity of the furnaces; their number was increased during this period only from 21 to 25 but their rated capacity was increased to 4,000,000 tons per year.
   While the iron industry was developing in the Valley prior to 1900, the industry also was converting pig iron into wrought products such as bars, rods, sheets, nails, hoops, pipe, etc.
   Throughout the nineteenth century the iron business was uncertain and spotty and steel was just beginning to be made. Wherever iron, coal and limestone were found in proximity to each other furnaces were certain to be built. That was the situation in the Mahoning Valley. The supplies of such raw materials were scarce but, until the iron ore from mines in the upper Great Lakes district was made available by less expensive water transportation through the Great Lakes, the availability of such materials in the Valley was of great importance and great value. When the local deposits had been consumed there remained some plants and equipment and the men with the "know-how" of converting iron ore into steel and steel products. These men were blessed with great skill, great vision, great courage and indomitable determination, In 1895 and 1900 several small iron producing companies in the Valley were sold to the larger corporations that were being created.

Underground iron ore mining, Newport Mine Ironwood, Michigan

A New Company is Born

   The year 1900 was an active one throughout the country and was a year of high employment, expansion and prosperity. It was particularly an active year in the iron and steel industry because of such combines and mergers already mentioned. Business in the Mahoning Valley with Youngstown as its center was unusually brisk. Several of its pioneer families had sold their holdings to the newly created large steel combines and had surplus funds which they were desirous of putting to work. Following many weeks of discussion and planning, in November 1900 a group of 55 local citizens subscribed $600,000 and the Articles of Incorporation of this Company were signed and duly filed. (In 1950 a total of more than 12,574 persons own the 3,350,016 common shares of the Company issued and outstanding; many hundreds of owners of shares are not included in this figure because they register their shares in the names of brokers or nominees). The first officers of the Company were George D. Wick, president and treasurer, James A. Campbell, vice president and manager, Robert Bentley, secretary, and William C. Reilly, auditor. Land along the Mahoning River was acquired at $100 per acre and the first plant was constructed there; a part of the Campbell plant now occupies this land. The first plant consisted of a puddle mill, a sheet mill and three tube mills.

Pushing charge of coke into quenching car.

Casting pig iron at blast furnace

   In December 1901 the first contract for iron ore was made and close business relations with Pickands Mather & Co., a partnership of Cleveland, Ohio, thus were established. In 1902 the Company bought from Pickands Mather & Co. the "Little Alice" blast furnace at Sharpsville, Pa., and paid $300,000 in common shares for it. Mr. Samuel Mather and Mr. Henry G. Dalton, members of the Pickands Mather firm, thus became financially

interested in the Company. These men played important parts in the Company's development as long as they lived. Mr. Dalton later became a director and first-vice president of the Company and was chairman of the board of directors from 1933 to 1939.

JAMES A. CAMPBELL
President July 1904 – December 31, 1929
Chairman of the Board January 1, 1930 – September 1933

   At the board meeting in May 1902 Mr. Wick resigned as president because of ill health. Mr. Campbell acted as manager while a new president was being sought and by July 1902 the new plant was getting into production. In July 1904 Mr. Campbell was elected president of the Company. He continued as president until January 1, 1930. He then was elected the first chairman of the board of directors and remained chairman until his death in September 1933. He was born near Youngstown of Scotch-Irish ancestry in 1854 and in his youth taught school and attended Hiram College. He prepared for West Point but financial necessities prevented his going there. Prior to organization of the new Company Mr. Campbell had worked in the iron industry for other companies and had acquired considerable knowledge of it. His tremendous capacity for hard work enabled him to accomplish an unbelievable amount. He was a gentleman of inflexible integrity, great tenacity and firmness and his honesty and fairness endeared him to important people in the steel industry.
   At the Company's inception there was much demand for iron sheets and iron pipe. When very soon thereafter the chemical and physical properties of steel demonstrated its superiority, steel gradually supplanted iron and the Company early converted its operations so as to produce steel sheets, steel pipe and other steel products.

Steel Supplants Iron

   In 1905 the Company commenced construction of a Bessemer steel plant consisting of four cupolas, two 17-ton converters, soaking pit furnaces, blooming mill, billet mill, sheet bar mill, skelp mill, universal plate mill and auxiliary equipment and buildings. During the intervening years the capital had been increased substantially and in 1905 consisted of $4,000,000 in authorized common shares. Each subsequent year in the Company's history has shown substantial growth in its plants, equipment and facilities. Expenditures for them have varied from $2,000,000 to as much as $24,000,000 per year. New units for making new products have been installed, obsolete or worn-out units have been replaced with machinery and equipment of the latest design and additional capacity has been created from year to year.
   In 1923 the Company acquired the property and assets of The Brier Hill Steel Company with plants located in Youngstown, Ohio. It also acquired the property and assets of The Steel and Tube Company of America with principal plants and properties located in the Chicago district.

Teeming steel from open hearth ladle into ingot molds, Campbell Works

Removing heated ingot from soaking pit, Campbell Works

   The Brier Hill purchase included furnaces and mills in Youngstown and Girard; one unit consisted of a heavy plate mill installed during the first World War and very soon the Company built at Brier Hill electric weld pipe units and mills to produce full finished steel sheets, its electrically welded pipe now is made at this plant. Valuable iron ore properties with substantial reserves also were acquired from the Brier Hill company.
   The Steel and Tube company owned a valuable plant site, with blast furnaces, fronting on Lake Michigan in the southern part of the City of Chicago and an important steel manufacturing site and plant just outside Chicago in Lake County, Indiana. This property now is known as the Company's Indiana Harbor plant, is located on Lake Michigan and includes valuable riparian rights. Each year since such acquisition the Company, acting under federal and state grants, has filled in along Lake Michigan and has reclaimed many acres of submerged lands. Probably the most important asset of this acquisition was the Chicago district location.

Blast furnaces and coke plant, Campbell Works

Unloading ore boat at lower lake port.

   The Company proceeded to integrate the manufacturing properties of these two companies with its previously owned facilities and each year has expended substantial sums of money to modernize the plants and equipment in the Youngstown and Chicago districts, to diversify their production and to expand their steel producing capacity. During the years 1924 to 1928 a new blast furnace, the tin plate and bar mills, ore bridges and sintering plant were installed in the Chicago district. Additional open hearth furnaces, larger blooming mill, a 54-inch continuous hot rolled strip and sheet mill and continuous cold reducing mill were added in the district when the pre-war defense program was started. The demand for steel and steel products in the Chicago district exceeds the steel producing capacity there and at the present time the Company is planning additional improvements which probably will cost several score millions of dollars.
   From the first days of its existence until the present time the Company has encountered problems and vexations of various kinds. These included the difficulties of the recessions in 1907 and 1921 and of the disastrous depression of the 1930s. The two most destructive wars in all history occurred and there was industrial strife in the nation. Because of these vicissitudes it has been the policy of the board of directors from the early days of the Company's history to conserve its earnings and use a part of them for replacement of worn-out and obsolete facilities and equipment, for diversifying the Company's products and for expanding its capacity. The directors have been conscientious in the declaration of dividends but have had the foresight to realize that the Company, in order to survive, must meet its competition and always be in position to manufacture and market its pro- portion of the country's steel production. As a result of this policy the plants, properties and raw material reserves of the Company have been increased and extended over the years so that the earning power of the Company has been developed substantially and thus the equity of the shareholders has been increased.

FRANK PURNELL
President January 1, 1930 – April 25, 1950
Chairman of the Board April 25, 1950-

The Last Two Decades

   In December 1929 Mr. Campbell suggested to the board that Frank Purnell be elected president. In 1902 young Purnell, a native of Youngstown, had taken a minor position in the Company's city office. By diligence he had advanced rapidly and at the beginning of World War 1, upon Mr. Campbell's recommendation, he became a member of the government's steel division in Washington. In 1923 he was elected vice president. He was elected assistant president in 1926 and for the next three years he relieved Mr. Campbell of many burdens and responsibilities.
   When Mr. Purnell became the third president of the Company on January 1, 1930, he found himself at the head of a large and growing company in the beginning years of the worst depression any of us can remember. In 1932 operations reached a low point of 13.4% of rated capacity. Problems of management became increasingly complicated and difficult. As an illustration, on December 31, 1933 the Company had about $14,000,000 in cash and U. S. Government securities and it had fixed obligations to pay in 1934 the sum of $2,000,000 in cash or bonds for sinking fund requirements and almost $4,400,000 in cash for interest on its bonds. It had more than $5,400,000 of other current liabilities. Altogether it was a difficult situation.
   Mr. Purnell saw a great need for increased diversification of the Company's products. It was in this same bad depression year of 1934 that, after having made exhaustive market and engineering surveys and studies, he recommended the installation of a new 79-inch continuous hot rolled strip and sheet mill at the Campbell Works. He was loyally supported in this program by the other officers of the Company and by Mr. Dalton, chairman of the board, and the other directors. The wisdom of the venture became evident when demands for automobiles and other commodities revived. By that time the new mill was ready to produce. Mr. Purnell is familiar with all phases of the steel industry, and the Company and its problems have been in his thoughts almost constantly since he became president of the Company. On April 25, 1950 he retired as president and was elected chairman of the board of directors and in that position will continue to play an important part in shaping the Company's policies.

Tapping heat of open hearth steel

Bessemer steel plant

   The twenty years from 1930 to 1950 included not only the depression but also the second World War, with its unprecedented demands for raw materials and products and the difficult so-called post-war recovery period. During these twenty years, in addition to the continuous hot and cold strip mills, the Company has developed its electric weld processes, installed facilities for improving seamless pipe, enlarged its tin plate facilities, generally increased its steel ingot capacity, enlarged and extended its finishing departments and diversified its products. During these 20 years the Company expended $188,700,000 on such additions, betterments and improvements.

   Messrs Campbell and Purnell, two men of strong personalities and great acumen, have directed this Company through all of its 50 years. Their ability in shaping its policies and in guiding its steady growth and expansion has been recognized generally. Their vision and courage in facing ever problem and difficulty have inspired their associates and the entire management personnel. Their affection for the Company has been genuine. These two men are outstanding examples of the type of executives America can produce. An epic could be written about the opportunities here in America for those willing and eager to work and plan and dare. Throughout this country, while this Company's executives were developing and expanding its capacity and increasing its production, other fine leaders were developing other companies in the same and in other industries and those companies too were making fine progress and building up each of the communities wherein they operated.
   On April 25, 1950, Mr. J. Lester Mauthe became the fourth president of the Company. Mr. Mauthe was born in 1890 in Turkey City, Pennsylvania; he worked after school and in vacations in order to graduate from Pennsylvania State College where he specialized in metallurgy. He had important training and experience with various subsidiaries of United States Steel Corporation and came to "Youngstown" in 1935 as assistant general superintendent for the Youngstown district. In 1943 he became vice president in charge of operations. Mr. Mauthe has had all- around experience in steelmaking and has kept in close touch with the ore and coal mining industries and the demands for their raw materials.
   From the early days of its history the Company's management has been active in the acquisition of raw material reserves. It now owns in fee or operates under long term leases very substantial acreages of bituminous coking coal particularly in Pennsylvania and West Virginia. It is believed that these reserves will fill a substantial part of the Company's needs over a long period of time.
   The iron ore situation has been a problem and worry to all of the larger steel companies. The consumption of iron ore to meet the demands of World War II was enormous and reserves of open pit ore were reduced substantially. In line with its fixed policy of 50 years, the Company has sought energetically for additional iron ore reserves. It is a joint owner with two other companies of very substantial tonnages of taconite in Minnesota. Taconite is iron-bearing rock which usually contains 30% to 32% of iron and which has to be specially treated in order to prepare the ore and process it for furnace use. Considerable progress in developing these low grade ores has been made but many problems remain for solution by constant study, experimentation and investigation.
   The Company has contracted for a share ownership in the newly discovered Labrador iron ore field. Contracts have been entered into and it is expected that very soon work will commence on the construction of a railroad to bring the ore to a port for shipment via water, and port facilities are being installed. Substantial capital expenditures  will be necessary in connection with the transportation facilities and later on for mining operations, before the property finally is opened for the production and transportation of the ore.
   Other projects in contemplation are the sinking of a new shaft at the Puritan mine in the Gogebic range in Michigan, in which the Company owns a one-half interest. It is expected that about six years will be required for completion of the new shaft and for the development of this property.
   These various acquisitions and their development are designed to supplement the Company's present iron ore reserves and are very important in the economy of the nation.

Expansion Plans

   Every good citizen views with alarm and extreme dislike the possibility of another war. It is the policy of our government, however, to prepare itself and it is highly essential that the steel industry be prepared to produce any required raw materials and to manufacture whatever may be needed in the defense program. These raw material reserves and facilities for mining and processing would be extremely important if there should be another war and, whether or not we have another war, they will be very important in our long range national development and growth.
   As already has been indicated, the Company's principal producing plants are in the Youngstown district and in the Chicago district. Reference is made to the list of plants and products shown in other pages hereof. The Youngstown district plants are located in the cities of Campbell, Youngstown, Struthers, Girard and the village of Hubbard, Ohio. In the Chicago district certain of the other products shown in the schedule are manufactured at its Indiana Harbor Plant and coke and pig iron are produced at the plant in South Chicago.
   The directors have approved recommendations of the officers that additional betterments and improvements be made in the Chicago district, as previously mentioned. Such installations will be principally at the Indiana Harbor Works, which is a self- contained, integrated, large steel manufacturing plant.
   The proposed expansion includes the erection of eight 250-ton open hearth furnaces, with all modern facilities for the handling of materials and stripping of ingots.
   The present Bessemer plant will be abandoned and the net annual increase in capacity will be 925,000 net tons of ingots.
   To roll this product, a new high-lift blooming mill, with 'six 3-hole recuperative soaking pits and necessary handling equipment for ingots and product, will be erected.
   A new battery of seventy-five coke ovens, having a capacity of 430,000 net tons of coke annually, with necessary additions to the coal handling, by-product, and benzol plants also will be erected. These ovens will produce approximately 10,000,000 cubic feet daily of surplus gas available for use in the steel mills.
   One 28 foot hearth blast furnace, complete with stoves, stock house, and gas cleaning equipment, will be built and an extension of 675 feet to the ore yard and dock, with the addition of one ore unloader and one ore bridge to handle raw materials, will be erected Necessary blowing equipment, one new boiler, one high-back pressure turbo generator, and water facilities to take care of. all of the expanded plant will be installed. These additions will produce 500,000 net tons of pig iron annually.
   The added furnace at the hot strip and sheet mill with other finishing facilities will increase the annual capacity of hot strips and sheets by about 600,000 tons per year. These various additions also will permit the Company to operate its bar and tube mills to their rated capacity.

Principal Properties

IRON AND STEEL PRODUCING, MANUFACTURING, AND FINISHING PLANTS

Youngstown District

Campbell Works ...... Youngstown-Campbell-Struthers Ohio
Brier Hill Works .............………... Youngstown-Girard, Ohio
Hubbard Works ..................……………...... Hubbard, Ohio

Chicago District

Indiana Harbor Works ............... East Chicago, Indiana
South Chicago Works …..................... Chicago, Illinois

EQUIPMENT AT ABOVE PLANTS
Youngstown District

   Campbell Works: 306 by-product coke. ovens; one by-product recovery plant; one sintering plant; four blast furnaces; two bessemer converters; twelve open hearth furnaces; one blooming mill; one continuous billet mill; one continuous skelp mill; two merchant bar mills; two track spike machines; one wire rod mill; one wire department; one wire galvanizing department; one 79-inch continuous hot rolled strip and sheet mill; two continuous cold reduction strip mills; six temper mills; two butt weld pipe mills; two seamless pipe mills; one pipe coupling department; one pipe galvanizing department; three electric weld metallic and mechanical tubing units; one rigid conduit department.

   Brier Hill Works: 84 by-product coke ovens; one by-product recovery plant; two blast furnaces; twelve open hearth furnaces; one blooming mill; two round mills; one resistance electric weld pipe mill; one cold drawn bar department; one stamping and pressed steel products department (operated by a subsidiary).

Hubbard Works: one blast furnace.

   Indiana Harbor Works: 120 by-product coke ovens; one by- product recovery plant; one sintering plant; two blast furnaces; two bessemer converters; nine open hearth furnaces; one blooming mill; one continuous billet mill; two continuous skelp mills; two merchant bar mills; two track spike machines; two butt weld pipe mills; one pipe galvanizing department; one 54-inch continuous hot rolled strip and sheet mill; one reversing cold reduction strip mill; one continuous cold reduction strip mill; two tandem temper mills; two electrolytic tinning lines and 20 tinning pots. There is a dock on Lake Michigan for receiving and unloading vessels carrying iron ore, coal or limestone.

   South Chicago Works: 70 by-product coke ovens; one by-product recovery plant; three blast furnaces; there also is a dock on Lake Michigan for receiving and unloading vessels carrying iron ore, coal or limestone.

   All of the plants presently have an estimated combined annual capacity of 3,616,000 net tons of pig iron. They also have facilities for converting the iron so manufactured (exclusive of pig iron made at merchant furnaces for sale to customers) into an estimated annual capacity of 4,250,000 net tons of steel ingots. After the proposed betterments and improvements are completed, the plants will have a combined estimated capacity annually of 4,116,000 net tons of pig iron and 5,200,000 net tons of steel ingots. The plants also are equipped with facilities for rolling the ingots into the various semi- finished and finished steel products which the Company manufactures.

Youngstown Sheet and Tube Company

DIRECTORS		EXECUTIVE OFFICERS
Leon A. Beeghly George C. Brainard John W. Ford S. Livingston Mather J. Lester Mauthe	Rollin C. Steese John Tod Walter E. Watson Lewis B. Williams John P. McWilliams Frank Purnell	Frank Prnell J. Lester Mauthe Walter E. Watson A. S. Glossbrenner J. C. Argetsinger James E. Bennett W. N. McDonald John H. Hall Joseph B. Sugden Arthur C. Joaohim Floyd D. Hunter	Chairman of the hoard President First vice president Vice president Vice president General counsel and secretary Comptroller Treasurer Assistant treasure Assistant secretary and assistant treasurer Assistant secretary
EXECUTIVE COMMITTEE
John Tod. Lewis B. Williams	S. Livingston Mather Rollin C. Steese Frank Purnell

General view of Brier Hill Works, Youngstown

General view of Campbell Works,  Youngstown

Community Relations

   The Youngstown district, as described by American Iron and Steel Institute, includes Newton Falls, Warren, Niles, Girard, Hubbard, Youngstown, Struthers and Campbell on the Mahoning River in Ohio and Sharon, Farrell and New Castle on the Shenango River in Pennsylvania; it stretches about 35 miles east and west along these two rivers. During the years of World War 11 about 57,000 persons were employed in this district in steel plants of this and other companies and 219,000 were gain- fully employed and approximately the same numbers are now employed therein. This district makes about eleven per cent of all of the steel produced in the United States and produces more steel than Japan or France manufactured in their best years (Japan's top production was 9,600,000 tons, and the best year for France was 10,000,000 tons.) The Chicago district, of which this Company's Indiana Harbor and South Chicago plants are a part, is the second largest steel producing center in the country.

   The expansion and growth of any industrial unit is important to the areas wherein it operates. The City of Youngstown and the neighboring villages and cities have grown as this Company has grown. As the numbers of employees of the Company and other companies have increased, the population of the cities and villages in the Valley also has increased. In 1900 the population of Youngstown was about 45,000 and the population of the district, so-called, including Youngstown, was about 115,000.
   In the same manner the city of East Chicago, Indiana (where the Indiana Harbor plant is located) and neighboring cities have increased in population. In 1950 the population of Youngstown is 168,000 and the population of the district including the City of Youngstown exceeds 500,000. When the Company started operations in 1901 it employed about 600 people. These employees with their families became an important segment of the City's population. In 1950 in the same district the Company employs about 15,000 people and they with their families are a substantial part of the district's population. They create the need for transportation facilities, food, clothing and other supplies and services, churches, schools, professional services such as medical, dental, insurance, real estate, legal, etc. Since 1900 the total number of the Company's direct employees has increased until in 1950 the number exceeds 27,000.
   These are located in the many districts where the Company's plants, mines and other operations are situated. There are about 10,000 employees in the Chicago district, mostly in Indiana Harbor.
   These employees with their families are a part of the community life of each village or city and the distribution of pay- rolls is very important in each area. During 1950 the Company paid in direct employment costs approximately one hundred million dollars. At the present time the Company has an average of approximately $11,000 invested to provide a job for each employee. Because of the increased costs of plants, machinery and equipment, however, an investment of approximately $30,000 now is necessary to create each job for each employee. Constant effort is being made to diversify products and develop markets in order to bring about greater continuity of operations and more steady employment.
   The Company's employees include 53 nationalities; 3,591 employees have been with the Company more than 25 years and 140 are more than 69 years old. This indicates the continuity of service and employment and is one of the reasons why efficiency and skill have become so highly developed.
   Like other steel companies, over the years the Company has installed machinery and equipment to provide safer methods of operation and to eliminate the tough, hard, back-breaking labor of the earlier days. The modernization of plants and the installation of more efficient and modern machinery have greatly improved working conditions in all steel plants. These improved working conditions, the constant attention to elimination of safety hazards, the strict following of safety practices by the management and the employees, themselves, have been part of industrial progress over the half century.

   This brochure would not be complete and would not properly express the feeling of management, if it did not mention the services of employees in the two world wars. In the first World War, 2,753 employees of "Youngstown" enlisted and served in the armed services. In the second World War, 9,582 employees of the Company and its subsidiaries joined the armed forces; this was a force larger than the entire army of 7,000 men under General Washington when he ended the Revolutionary War at Yorktown. After the first World War, 2,000 employees came back to the Company. After the close of the Second World War, 5,739 former employees returned to the Company, and 19,856 ex-servicemen sought and obtained employment with the Company.

In Memoriam
The world will little note, nor long remember what we say here, but it can never forget what they did here… From these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion…

—Lincoln’s "Gettysburg Address"

ON THE FIELD OF HONOR
"that the Nation might endure"

World War I          30
World War II       211

Subsidiaries

   Over the years of its history the Company has organized or acquired a number of subsidiary corporations to aid in the operation of its raw material properties and to merchandise its products.
   The Continental Supply Company with a capital of $12,000,000 and a substantial surplus is engaged principally in the merchandising of oil country tubular products manufactured by the Company and various items of oil country machinery and equipment manufactured by other companies. Its principal office is in Dallas, Texas, and it is licensed to do business in the principal petroleum producing states of the midcontinent field. The company operates about 55 stores in these states and also operates stores in western Canada. It has an export department doing business in practically all foreign oil fields. The Company operates in a highly competitive field with its own fully informed, alert and aggressive organization.
   The Youngstown Steel Products Company is licensed to do business in all of the states of the United States which have such requirement and it merchandises products manufactured by the Company. The Youngstown Steel Products Company of California sells the Company's principal products in California, Oregon and Washington.
   The Company has a substantial export business which is handled through a New York City office.
   The Buckeye Coal Company owns coal reserves and operates coal mines at Nemacolin in Greene County, Pennsylvania. The Youngstown Mines Corporation operates under a long term lease coal properties in Logan County, West Virginia, and also operates certain iron ore mines in Gogebic County, Michigan, and in Minnesota.
   The Company also owns a two-thirds interest in the Ontario Mining Company, which operates other coal properties in Pennsylvania and a majority interest in Olga Coal Company, which operates coal mines in West Virginia.
   Youngstown Metal Products Company, located at Youngstown, Ohio, manufactures and sells pressed steel products.
   The Biwabik Mining Company mines iron ore on the Mesabi range in Minnesota and Vinegar Hill Zinc Company operates a zinc ore concentrating plant near Cuba City, Wisconsin.
   The Company and The Continental Supply Company own about 85% of the issued capital shares of Emsco Derrick & Equipment Company which manufactures oil well drilling equipment and machinery at plants in Houston and near Dallas, Texas and in Los Angeles, California.
   All of the officials and members of management and staffs in these companies are progressive and experienced with a high degree of loyalty and enthusiasm.
   The Company also has interests varying from 8% to 80% in a number of other companies; most of these companies are engaged in mining ore but one manufactures heavy chemicals, another operates iron ore carriers on the Great Lakes and others quarry limestone or mine coal.

Press department, Youngstown Metal Products Company

Policies

   The growth of the Company to the present time, 1950, has greatly exceeded the hopes and plans of the men who founded it in 1900, and the Company's steady output over the years has contributed appreciably to America's welfare, strength and wealth.
   Realizing that the Company constitutes an important segment of our country's production facilities, the Company's management always has kept in mind four major responsibilities. These are:
1. Responsibility to its employees, whose labor produces steel -to provide employment as regular as possible at good wages and with good working renditions.
2. Responsibility to its customers, who need and use its products-to supply the highest quality of steel- and services at prices that are fair and competitive.

Piercing unit, seamless tube mill Campbell Works

3. Responsibility to the Company's shareholders whose confidence and savings have made the business possible; their faith in free enterprise has aided the Company's development, expansion and growth and has contributed to its steady accumulation of strength. The Company's obligation to them is to preserve and protect their investments, to employ such investments in national progress; and to pay such owners a fair, honest and decent return for the use of their money.

4. Responsibility not only to the community but to the entire nation to maintain an invigorating climate of free enterprise, to foster good citizenship, to provide the strength which will help to bring about a better nation and a better world and which should be conducive to lasting peace.
   If all American industry observes these responsibilities, it will assist greatly in keeping America the land of opportunity it now so truly is.

This is America.

Items of Financial Interest

   The COMPANY'S COMPTROLLER has prepared some interesting figures about its receipts and their distribution over the fifty years of its history. The president, Mr. Mauthe, has drafted the following memorandum showing the importance of the various distributive items. The statements include the Company's first balance sheet of February 28, 1902; its financial position at December 31, 1949 (the last audited statement at this date), the investment in properties and the distribution of its total revenues of over 5 billion dollars from November 23,1900 to December 31, 1949. Total revenues to November 23, 1950 were just about 5-1/2 billion dollars!

WHERE ARE WE Going?

   In the fifty-year period total income, including income from sales, interest, dividends on investments in affiliated companies, discounts taken, etc., amounted to $5,198,770,497. Of that total $2,766,354,971 was used to buy raw materials, supplies, repair parts, electric energy, insurance, services, and to pay certain other expenses of doing business. Interest on money borrowed from time to time including dividends and premiums on preferred shares amounted to $117,724,128. During this period taxes for the support of the American form of government required $267,462,953. Provisions for wear and tear of machinery, equipment and facilities and for replacements and to make up for the exhaustion of raw materials (generally described as depreciation and depletion) amounted to $270,852,769.
   These charges aggregated $3,422,394,821, and left the impressive amount of $1,776,375,676 for the employees, the owners of the Company and for retention in the business. In this fifty year period the employees received for direct services $1,474,693,687 of the aggregate amount remaining from gross income and available for distribution to workers for direct labor and to owners and for retention in the business. After this payment of employment costs there was left for shareholders and for retention in the business $301,681,989.
   Through actions of boards of directors from time to time, the shareholders, owners of the common shares of the Company and thus owners of the business, were paid in cash dividends a total of $125,126,950 in fifty years, being 7.04% of the full amount left over for division among employees and owners.

   After this distribution of dividends to shareholders for the use of their investment money, there was left $176,555,039 or 9.94% of the total amount. This sum was left and retained in the business by the shareholders. It was used to acquire reserves of raw materials, to expand or purchase plants and equipment, to maintain inventories, extend usual credits to customers, etc. All of these uses contributed directly to the ability of the Company to provide reasonably steady work for its employees.
   Two items are of special significance in connection with these figures showing results of operations over a fifty-year span by one of the moderately sized companies in one of the nation's major industries. The first item to be noted is that, after payment of the necessary and usual costs of operation, including costs of raw materials and supplies, indirect labor, depreciation and depletion, taxes, interest and direct labor, there remained 6-1/3% of the total gross income as profit for the owners of the enterprise. The fact is interesting because public opinion surveys have indicated that the public generally believes corporations make profits of 25 per cent or greater on their sales. Experience shows that the average well-informed person thinks and agrees that an average profit of 6-1/3% over 50 years or in a year is too low in a competitive free enterprise system and is inadequate to provide sufficient funds for the expansion of industry, improvement of the standard of living and an increase in the employment of people.

   The second item of special significance is that employees, direct and indirect, were paid a very substantial portion of all income. It is not possible to determine the amount represented by indirect labor in the cost of raw materials, supplies, equipment, transportation, etc., but it is probable that the percentage paid to labor in these items is equal to the percentage of total income paid to labor directly employed. Direct labor payments were nearly 30% of total income and were 83% of the amount remaining after the payment of the other necessary costs ofdoing business.
   The Company acquired during the 50 years fixed assets costing $440,497,448. These included real estate, coal mines and iron ore mines, manufacturing plants, buildings, machinery and miscellaneous service equipment and facilities, and various miscellaneous properties operated or held for use in the future. These costs were paid by moneys left in the business and from capital investment. Of this amount $113,635,740 has been writ- ten off because of property retirements.

   On December 31, 1949 the Company had a depreciation and depletion reserve of $235,244,441. Funds provided by this re- serve have been used over the years to replace plants that became obsolete and to provide in part the necessary funds to replace plants as they wore out.
   As of December 31, 1949 the Company also owned $124,075,452 in United States government securities and cash and had $103,098,847 in other current or quick assets including accounts receivable, inventories of materials, supplies and products, prepaid items and investments in affiliated companies.

   The Company had invested in lands, mineral properties, plants, buildings, machinery and equipment $91,617,267 after deduction of the reserves for depreciation and depletion of $235,244,441. These items together accounted for the Company's total assets of $318,791,566.
   As of the same date, December 31, 1949 the Company owed current debts of $46,065,651. The working capital was $166,936,851. The company also owed a long term debt of $30,000,000 bearing interest at 2-3/4% per annum; beginning on July 1, 1951 the Company will pay this debt at the rate of $1,500,000 per year.
   During recent years inflation has been advancing until today the dollar will purchase in ordinary goods only about 54% of what it would have purchased just before the last war. In the construction of manufacturers' buildings, equipment and machinery, about two and one-half to three times as many dollars are required now to construct a steel plant as were required when the present plants were built.
   These facts show that rates of depreciation presently allowed for income tax purposes are woefully inadequate.
   The present law permits deduction of depreciation reserves only to the extent they are accumulated on original cost. This is in accord with what has been standard bookkeeping practice for many years but obviously such allowances for depreciation are entirely insufficient to provide for replacement of equipment and plants which have worn out and which must be replaced at present-day costs. The manufacturers find themselves with low- cost plants nearly depreciated on their books of account and with reserves which are insufficient to replace, improve or modernize such plants or machinery. The management then must find from other sources the additional funds required for replacements, betterments and improvements and that is why a very substantial part of earnings must be retained in the business. The market for bonds and shares of stock has not been sufficiently strong to guarantee the sale of new securities on a basis equitable to issuers.
   For these reasons it seems to be generally recognized among economists, industrialists and business groups that what are being called profits of the business today, when inflation is in control to a greater extent than ever before, are not the kind of profits they seem to be. When the purchasing power of the dollar today is applied to profits, in order to ascertain their worth as compared with the same number of dollars of profit of ten or twenty years ago, there is an alarming shrinkage. Reserves of raw materials, plants and equipment actually are being used up, are melting away, under the misapprehension that depreciation and depletion provisions are sufficient to replace their units as they become exhausted and that "profits" are real and may be distributed thoughtlessly among shareholders. These latter suffer along with employees and the community when the cold realities of economics overtake our activities.

   It has been said that steel is either a prince or a pauper but over the last two decades tax provisions have nullified any princely attributes. In order to earn six per cent gross on a billion dollar investment substantial increases in practically all steel prices would be required. If another company were to be created -today at today's costs and prices with the same type and kind of plants, mills and equipment, with the same reserves of raw materials and the same working capital that this Company now has, a billion dollars would have to be expended. To earn a fair and adequate return on such an investment would require such company substantially to increase the prices of practically all its products. It is well to keep these thoughts in mind when construction of new steel plants is proposed and being discussed or other proposals involving competition with existing industry are made.

L. MAUTHE,
President