This article first appeared in Eletrochemical and Metallurgical Industry 1907 . The information that is contained within this article is therefore valid as of 1907. The article historical events affecting Industry at the time.
High Metals Prices
The upward swing of the pendulum has carried the price of metals to an undreamed of high level. Copper, due to the immediate causes outlined in our notes on car shortage in our January issue, has risen to full 25 cents, and the copper supplies are so closely held that if large producers so desired copper would go to 28 or 30 cents: Pig iron is selling so high that importations of Scotch iron are being made. Lead is absolutely controlled marketwise by the dominant interests. Silver is low relative to prices before 1893, but has risen nearly 40 per cent over panic prices. There seems to be good reason for looking for a healthy recession. Too high prices curtail consumption and also teach the use of cheaper substitutes to the trades. The capital cost of all new constructions is now charged to succeeding generations at a figure that is so high that the railways and industrial companies wisely are planning to curtail new work. Spelter is selling relatively high, but based on cost of production its price is low as compared with copper, lead and iron. This is due to the fact that the zinc business has not yet been "trustified." Due to high price of lumber, with which galvanized iron competes, and high price of copper with which sheet zinc and galvanized sheets also compete, when the reaction comes hard, spelter is less apt to feel the downward force than other metals.
Possible Short Run Threat of Recession but American Industry Bullish in the Long Run
It would appear that the recession in business—slight though it may now appear, and to some observers only confined to the stock market is liable to grow greater. First of all, next year is a presidential year, and supersensitive finance discounts all uncertainty a long time in advance. Then too—car shortage and lack of railway facilities, of which Mr. J. J. Hill has spoken so clearly—hamper expansion. Undoubtedly good crops next Summer would diminish the intensity of the reaction. Considering the present high levels of metals in relation to this tendency for business to draw in its horns because of high prices, we would infer that consumption will not increase, or in other words, relatively be decreased, and normal rate of growth be reduced. The near increase of metal production, due to starting up of new metallurgical works, will increase absolutely the production, consequently lower prices for metals during the Winter of the year 1907-1908 seem probable. This will be an unmixed blessing, for growth has been too rapid to be altogether healthy. There is no great apprehension of a real serious panic, but such a slowing down will do us good and allow plans to mature. As the French may say, it is a case of "reculer pour mieux sauter"—to draw back in order to get a running jump. In the long run, no sane man can help but be a bull on American industry.