STATE OF BUSINESS: Another Round?

“We’re getting behind again and haven’t any meat on our bones. We’re studying a price increase carefully and see it coming—it has to come.” Thus Bethlehem Steel’s Eugene G. Grace broke the news last week that the U.S. would probably have to swallow another general steel price rise. Noting that Bethlehem Steel’s nine-month net earnings tumbled (from $122.6 million to $99.6 million) along with those of other companies, because of the steel strike, Chairman Grace said that spiraling costs for scrap, ore and transportation had more than gobbled up the $8.50-a-ton price rise of last August.

Steelmen are in a good position to boost prices. With furnaces operating at better than 100% of capacity, they have more orders on their books than they can handle. Detroit’s automakers alone will need enough steel to build an estimated 6,500,000 new cars in 1957, are already cranking up to top production speed. After a two-month lull for model changeover, the auto industry is working overtime to build 38 new cars each minute, plans to work overtime and Saturdays throughout November and December to keep pace with optimistic forecasts of fourth-quarter business.

There is a pattern of price increases in other industries. With increasingly severe railroad car shortages, the freight industry announced that it wants a 20% package boost in freight rates, will ask the Interstate Commerce Commission for approval in mid-January. Price boosts in other industries pushed the cost of living in September up another .3% to an all-time record 117.1% on the Labor Departments 1947-49 index of consumer prices.

In the batch of third-quarter earnings that came out last week there were almost as many downs as ups.

¶ In autos: General Motors’ earnings of $136,113,576 were down 42% in the third quarter under last year’s third quarter; Ford’s third-quarter profits declined 82% to $13.5 million.

¶ In oils: Shell at $30,702,649 dropped about half a million in net profits for the third quarter; Phillips Petroleum was 12% lower; Richfield Oil declined from $8,029,540 to $6,236,962; Atlantic Refining raised its net 92%, and Gulf and Sinclair also boosted profits during the quarter.

¶ In utilities reporting net earnings for the full year ending Sept. 30: the Southern Co.’s net income was up 17% to $29,502,657; Pacific Lighting Corp. up 20% to $21,086,497; Consolidated Edison of New York year’s profits of $52,605,480, up 2% over the previous year.

¶ In railroads: Union Pacific’s first nine-months’ earnings of $54,799,233 dropped nearly $3,000,000 below 1955’s; Southern Pacific was down 11% for the first nine months to $42,633,167; Norfolk & Western rose 9% to $28,674,331; Pennsylvania dropped 3% to $31,291,852.