EXECUTIVE OFFICE OF THE PRESIDENT OFFICE MEMORANDUM To: Mr. Leon Henderson From: Joseph L. Weiner Subject: Information on steel requested by Congressman Crawford' The most severe steel shortage is in plates, which are required for defense items like naval and merchant vessels, tanks and other combat vehicles, and essential civilian items like freight cars, locomotives, and steam boilers. Capacity for plates is now 6,168,590 net tons. Plans for expansion of this capacity are in progress, partly through conversion of existing sheet and strip mills, but mainly through new construction. 1939 (December). 1940 (December). 1941 (June).. Conversions now in progress are confined to three companies-Republic, Granite City, and Great Lakes. The total of these conversions will amount to 750,000 tons. The time necessary to convert a plant varies with the circumstances of the plant. In some cases, it is a relatively simple matter, and in others it is extremely difficult and necessitates additional construction. It also varies with the time required to obtain equipment from machinery builders. Present experience with these three plants indicates that about 8 months are required before full production of plates is under way. Table 25 shows recent capacity and production of sheet and strip steel, as compared with the total. Capacity for these products is 17,740,000 net tons. or more than 30 percent of total capacity. Production in recent years has averaged between 25 and 30 percent of total finished steel production. Table 26 shows the consumption of sheet and strip steel in 1940 by various steel-using industries. The automobile industry alone used almost 37 percent, or more than one-third of the total. The pressing, forming, and stamping industry, which consists primarily of consumers' durable goods industries, used over 12 percent of the total. Portions of the other industries' steel takings also go into such goods. 1 P. 566, supra. AUGUST 15, 1941. There will have to be some limitation on the use of this sheet and strip capacity, even if it is not converted and plate capacity is expanded by new construction. The final limitation will be ingot production, and if any type of finishing capacity cannot get its material in the form of ingots it will have to remain idle. Our concern is to see that preference as to ingot steel produced is obtained for the most essential uses. Curtailment of nonessential industries is not a matter of desire but of necessity. TABLE 25.-Capacity and production of sheet and strip steel and total finished steel CAPACITY TABLE 25.-Capacity and production of sheet and strip steel and total finished steel-Continued 1939. 1940. 1941: January February. April. May. June.. Sheet and strip Aircraft industry. Railroad industry. Oil, natural gas, and mining industry. Miscellaneous industries. Export, all industries. Total... 10, 341, 577 Source: American Iron and Steel Institute. TABLE 26.-Consumption of sheet and strip steel, by industries, in 1940 Source: American Iron and Steel Institute. 1,370, 016 1,303, 763 1, 407, 469 Agricultural and equipment manufacturers, including implements. Machinery and tools. Automotive industry. Sheet and 515, 538 1,615, 418 860, 028 1, 558, 664 228, 472 637,983 4,702, 260 9,547 307, 490 72, 278 738,521 936, 778 12, 841, 931 29.59 26.81 26.53 26.80 26.49 28.20 27.68 26.40 Percent of total sheet and strip steel consumption Average index number of prices paid by farmers, including interest and taxes, for the first 7 months of 1941__ Prewar price--- Total parity price---. 4.01 12.58 6.70 .29 12. 14 4.85 1.78 4.97 36.62 . 07 2. 39 .56 5.75 7.29 100.00 Mr. HENDERSON (continuing). I have also several memoranda on the sugar situation which were requested. One is on the Louisiana sugarcane income and the other on the sugar supply situation-an estimate of the Cuban situation and a preliminary report on the invisible supplies-all of which are ready for the record at this time. The CHAIRMAN. It will be incorporated in the record. (The matter above referred to is as follows:) MEMORANDUM ON LOUISIANA SUGARCANE INCOME IN 1941 For the 1941 sugarcane crop in Louisiana, payments will be made to sugarcane growers under the Sugar Act at the base rate of 60 cents per hundred pounds of recoverable sugar, equal to about $1 per average ton of sugarcane in Louisiana. Under their contracts with processors, growers are paid on the basis of the price of raw sugar during the period October to March. With raw sugar at 3.5 cents per pound, growers will receive $3.50 per ton for standard sugarcane. Total income per ton of sugarcane will be about $4.50 or 93 percent of parity, calculated as follows: 130 $3.73 4.85 The above figure of 93 percent of parity compares with 78% percent reallzed by Louisiana growers in the years 1937-40. The 17,000 Louisiana sugarcane growers, unlike the 60,000 sugar-beet growers, do not receive parity returns per ton at a 3.5-cent price for raw sugar, primarily because payments under the Sugar Act are based on recoverable sugar. Recovery of sugar from sugarcane in Louisiana is about 165 pounds per ton as compared with about 315 pounds per ton of sugar beets. The income of sugarcane growers per acre, however, assuming normal yields, is equal to that of sugar-beet growers. TABLE 27.—Statement on the sugar-supply situation for the United States, 1941 Short tons, raw value Stocks of sugar, Jan. 1, 1941: Stocks held by refiners, processors, etc-- "Offshore" quota supplies, 1941--- Continental sugar production, calendar year 1941 (estimated). Total supplies (excluding reserves in Cuba and elsewhere). Distribution by primary distributors---. Stocks of sugar, Dec. 31, 1941____ Add increase in invisible stocks during 1941 Total actual stocks in the mainland, Dec. 31, 1941, excluding 5, 399, 000 1 2, 035, 000 1 Including stocks by seaboard cane refiners, continental sugar processors, and importers of direct-consumption sugar, less "over quota" sugars held by refiners or importers. Department of Agriculture official figures cover 100 percent of the industry. 2 Stocks held by industries producing articles in which sugar is an ingredient, wholesalers and retailers. Above estimate is based on official data obtained by the Department of Agriculture covering firms who handle about half of the volume of sugar usage or distribution. 3 Represents the quota established under the Sugar Act for sugars from the Caribbean area (Puerto Rico, Cuba, Virgin Islands, Santo Domingo) as well as Hawaii. Philippine Islands, and Peru. Also a few minor sources of supply. Of the total, 3,840,000 tons were entered against quotas during the first 7 months of the year. Based on current crop estimates of the Department of Agriculture. 5 Assuming that distribution during the last half of the year is the same as in the last half of 1940, in view of the very heavy and abnormal "deliveries" of the first half year, and the establishment of the ceiling price which, in itself, is likely to prevent more than the normal movement of sugar in the last 5 months of the year. Actual consumption, viz., consumption by su tar-using industries and homes, including stocking up in the latter case, is estimated at 7.268.000 tons, on the basis of data covering the first half of the year. Therefore. 540.000 tons of the total distribution by primary distributors represents an increase in "invisible"stocks. NOTE. Other nearby reserves exist, the largest of which is approximately 1,000.000 tons of carry-over sugar in Cuba. This sugar is now divided into several categories: (1) About 400,000 tons reserved either for the United States or world market (which was financed by the Reconstruction Finance Corporation, in part), and (2) a reserve for the world market. With the limited world demand for sugar at present, most of these sugars could, no doubt, be made available for the United States market if required. ESTIMATE OF 1942 CUBAN SUGAR CROP1 Spanish long tons Estimated total cane supply for harvest_ Estimated sugar production from cane supply if all cane is ground for sugar at normal yields_-_ Anticipated needed molasses production (sugar equivalent). Estimated 1942 sugar production__- 1 Based on data contained in Consular Report No. 1148, from Havana. NOTE.-2,800,000 Spanish long tons are equal to about 3,200.000 English short tons. This compares with United States and United Kingdom takings from Cuba in recent years as follows: (Data from Sugar Division quota records and World Sugar Situation, June 1941, table 16.) PRELIMINARY REPORT INVISIBLES SECOND QUARTER, 1941 Full data for the second quarter, 1941, in this series of reports has not yet been issued, but a preliminary compilation from 967 firms shows an increase in their stocks from 426,367 tons to 471,288 tons during the second quarter. [U. S. Department of Agriculture-Information for the press] WASHINGTON, D. C., May 29, 1941. INVISIBLE SUGAR STOCKS AT RECORD LEVEL FOR FIRST QUARTER OF 1941 The Department of Agriculture today issued its summary of data on invisible supplies of sugar in the United States for the first quarter of 1941, together with a record of receipts and deliveries. The last quarterly report, issued March 13, 1941, covered the fourth quarter of 1940. The Sugar Division of the Agricultural Adjustment Administration pointed out that such stocks in the possession of wholesalers and retailers, public eating establishments, and sugar-using manufacturers, on March 31, 1941, were greatly in excess of the supplies reported by such firms at the end of any quarterly period since these reports have been published. The large deliveries or use shown in the table represents primarily heavy distribution by wholesalers. The data for the first quarter report were obtained from schedules received from 1,50 manufacturers, wholesalers, retailers, and others. The following table summarizes the data: TABLE 28.-Stocks of sugar held by 1,540 manufacturers, wholesalers, retailers, etc., on specified dates, together with receipts and deliveries of sugar, first quarter 19111 1 The first-quarter receipts by the firms reporting for this period on Form SS-33 were approximately 48.7 percent of the total deliveries of sugar by refiners, processors, and importers for the period Jan. 1 to Mar. 31, 1941. • Does not include sugar in transit, amounting to 139,198 tons, on Mar. 31, 1941. [U. S. Department of Agriculture Information for the press] WASHINGTON, D. C., March 13, 1941. SUGAR DIVISION ISSUES DATA ON INVISIBLE SUGAR STOCKS The Sugar Division of the Agricultural Adjustment Administration today issued its summary of data on invisible supplics of sugar in the United States for the fourth quarter of 1940, together with a record of receipts and deliveries. The last quarterly report of the Sugar Division was issued December 12, 1940, 64300-41-pt. 1- -42 and covered the third quarter of 1940. The data for the fourth-quarter report were obtained from schedules received from 1,295 manufacturers, wholesalers, and retailers. The following table summarizes the data: TABLE 29.-Stocks of sugar held by 1,295 manufacturers, wholesalers, and retailers on specified dates, together with receipts and deliveries of sugar, fourth quarter, 19401 [Short tons] 1 The fourth-quarter receipts by the firms reporting for this period on Form SS-33 were approximately 43.8 percent of the total deliveries of sugar by refiners, processors, and importers for the period Oct. 1 to Dec. 31, 1940. The 1940 receipts of sugar by the reporting firms were approximately 3,042,000 short tons, or 47 percent of the total 1940 deliveries of sugar. 2 Does not include sugar in transit, amounting to 34,227 tons, on Dec. 31, 1940. This is the first time complete data on such sugar are being reported. The Dec. 31, 1939, stocks of the 1,295 firms were 307,291 tons, excluding any sugar in transit to these firms. 3 Does not include any sugar in transit to these firms on Dec. 31, 1939. As of that date there was a known quantity of approximately 40,000 tons, representing an unusual transaction, in transit between the Pacific and Atlantic seaboards to these firms. [U. S. Department of Agriculture-Information for the press] WASHINGTON, D. C., December 12, 1940. SUGAR DIVISION ISSUES DATA ON INVISIBLE SUGAR STOCKS The Sugar Division of the Agricultural Adjustment Administration today Issued its summary of data on invisible supplies of sugar in the United States for the third quarter of 1940, together with a record of receipts and deliveries. The last quarterly report of the Sugar Division was issued August 31, 1940, and covered the second quarter of 1940. The data for the third-quarter report were obtained from schedules received from 1,302 manufacturers, wholesalers, and retailers. The following table summarizes the data: TABLE 30.-Stocks of sugar held by 1,302 manufacturers, wholesalers, and retailers on specified dates, together with receipts and deliveries of sugar, third quarter, 19401 (Short tons] 1 The 3d quarter receipts by the firms reporting for this period on Form SS-33 were approximately 46.3 percent of the total deliveries of sugar by refiners, processors, and importers for the period July 1 to Sept. 30, 1940. The 1939 receipts of sugar by the reporting firms were approximately 3,128,000 short tons, or 48.5 percent of the total 1939 deliveries of sugar. [U. S. Department of Agriculture-Information for the press] WASHINGTON, D. C., August 31, 1940. SUGAR DIVISION ISSUES DATA ON INVISIBLE SUGAR STOCKS The Sugar Division of the Agricultural Adjustment Administration today issued its summary of data on invisible supplies of sugar in the United States |