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SuiweM evieut MONTHLY IN FE DERAL RESERVE BANK of CLEVELAND Octo&en t9 5 4 THIS ISSUE Steel Finishing C a p a c i t y ................... 2 O u tlays b y State Governments . . . . A N ew Frontier in M e t a l s ................... 12 ANNUAL CAPACITIES OF MAJOR HOT ROLLED STEEL PRODUCTS M il lio n s of N e t Tons SHEETS BARS V FOURTH DIST R IC T PLATES WIRE RODS COILS FOR C OLD R ED U C ED BLACK PL ATE a TIN PLATE STR U CT U RA L S H A P E S SKELP S TR IP BLANKS, TU BE ROUNDS OR P I E R C E D B I L L E T S FOR SEAMLESS TUBES RAILS F o u rth D is t r ic t ste el m ills s h a p e two- f i f t h s of the n a t i o n ' s s t e e l p r o d u c t s , s p e c i a l i z i n g m ore in l i g h t , f l a t - r o l l e d p r o d u c t s a n d t u b u l a r g o o d s th an m i l l s in the r e s t o f t h e c o u n t r y . 7 Steel Finishing Capacity Fourth District T he F o u rth F ed eral R eserve SELECTED FOURTH DISTRICT STEEL F IN IS H IN G C A P A C IT IE S— 1954 D is tr ic t encompasses two-fifths of the nation’s capacity for making steel ingots and steel for castings, with mills clustered around Pittsburgh, Youngstown, Cleveland, Wheel ing and along the Ohio River.(1) On a prod uct basis, however, District mills are equipped to turn out more than one-half of the coun try’s pipe, tubing and galvanized flat prod ucts and 45 percent of such important finished mill products as cold finished bars and hot and cold rolled sheet and strip. On the other hand, the District contains a far smaller share of the nation’s capacity for making rails, structural shapes, plates and wire. Steel plays an important role in the Dis trict’s industrial economy. In some cases, steel finishing capacities of District mills reflect the raw material needs of the major steel-consuming industries in the District. In other cases, they indicate surplus (or deficit) productive capacity. Also, it should be borne in mind that estimates of steel-finishing capacity cannot give an accurate gauge of the outputs of particular product lines which may be expected to flow from the mills, par ticularly because a considerable variety of alternative products can oftentimes be pro duced on the same rolling equipment. In any event, steel mill product capacities, as discussed below, do provide a general picture of the difference between the “ product mix” characteristic of the mills in the District and that which exists in other steel producing centers of the nation. (Capacities in thousands of net tons) Product Hot Rolled Steel Products1 Ca Percent pacity of U.S. Rails........................................ 219 Structural shapes................... 1,449 Plates ..................................... 2,553 Sheets and Strip2 ................. 19,129 Bars........................................ 5,607 Steel for further conversion into wire and tubular products3 ......................... 9,948 All other hot rolled............... 551 57 21 Total—hot rolled............... 39,456 41 10 23 30 44 35 Other Finished Steel Products4 Pipe and tubing..................... Plain Wire............................. Cold finished bars................. Cold rolled sheets and strip. . Galvanized sheets and strip. . Long terne sheets.................. Tin and terne plate............... 7,883 2,008 1,755 9,306 2,188 232 2,834 55 30 47 46 58 80 39 Source: Basic data from D irectory of Iro n and Steel W orks of the United States and Canada, Twenty-Seventh Edition (N ew York, Am erican Iron and Steel In stitute, 1 9 5 4 ) ( !) (2) Capacities of hot rolled products are limited to steel available from mills’ own ingot capacity plus estimated steel normally obtained from others. Includes coils for cold reduced black plate and tin plate. See M onthly B u siness R eview , June 1 9 5 4 . 2 W ire rods, skelp, and blanks, tube rounds billets for seamless tubes. (4) ( !) (3) or pierced Capacities of other finished steel products are annual capacities without regard to available supply of ingots or semifinished steel or hot rolled products. Sheet and Strip About 45 percent of the nation’s sheet and strip producing capacity — both hot rolled and cold rolled— is located in the Fourth District. On a tonnage basis, one-half of the District’s hot rolling capacity is devoted to making sheet and strip (including coils for cold reduced black plate and tin plate). The cover chart compares District capacities of the major hot rolled steel products with the rest of the country’s mills. An accompany ing table gives District capacities for selected steel products, expressed both as tonnages and as percentages of total United States capacity. The concentration of sheet and strip ca pacity in this District reflects the fact that stamping and sheet metal work weigh heavily among its industries. No recent measurement of the exact extent of the concentration of metal consuming industries in the District is available. Nevertheless, an indication of the importance of some major metal-using industries in the District may be obtained by comparing employment figures for Ohio with U. S. totals. During 1953, one-fifth of all nonagricultural workers in Ohio were engaged in the fabricated metals, automotive and electrical and nonelectrical machinery industries, as compared with 10 percent so employed in the country as a whole. Nearly one-sixth of the nation’s workers in these four groups of industries were employed in Ohio during 1953. For each industry, and for some of their major components, Ohio firms employed the following percentages of all U. S. em ployees during 1953: Fabricated metal products 12% Machinery (except electrical) 16 Metalworking machinery 19 Industrial machinery 14 Service industry and household machines 24 Electrical machinery 9 Motor vehicles and equipment 10 This showing is significant, especially when coupled with the fact that the state of Ohio employs only 6 percent of the nation’s non farm workers in total. Adding in the metal working industries of Western Pennsylvania would, of course, raise even further the esti mate of the District’s participation in these four major durable goods industries. The fabricated metals, automotive and electrical and nonelectrical machinery indus tries take three-fifths or more of the sheet and strip output. Insofar as it is possible to trace mill shipments to the ultimate con sumer(2), roughly two out of every five tons of sheet and strip shipped in 1953 went to the automotive industry. Another one-fifth or more went directly to producers of ma chinery, industrial equipment, electrical ma chinery, appliances and other domestic and commercial equipment. In other words, the industries that consume 60 percent or more of the nation’s sheet and strip employ approximately 20 percent of the District’s nonfarm workers. The other major users of sheet and strip are the construction industry (including the makers of contractors’ products) and the container industry; these two groups re ceived 12 percent and 6 percent, respectively, of the mill shipments of sheet and strip made in 1953. Demand for sheet and strip has risen rapidly during the past fifteen years. Rela tive to the output of all other steel mill prod ucts, sheet and strip production shows the sharpest uptrend during the 1940-53 period. In fact, when the output of separate mill items is expressed as a percentage of the production of all other steel mill products, tin mill products and pipe and tubing are the only other two major steel product groups showing relative growth trends dur ing this period, according to an analysis of national trends made by one of the District’s major steel companies. Other product ca pacities have been expanded during this time, of course, but not so fast as that of sheet and strip. (2) Steel shipments, as reported by the American Iron and Steel Institute, show large tonnages going to jobbers, dealers and distributors, thus making it impossible to determine directly the end use of this tonnage. In 1 953 , warehouses and distributors received 14 percent of mill shipments of sheet and strip. 3 LOCATION OF FLAT HOT ROLLING CAPACITY IN THE FOURTH DISTRICT, 1954 to the relative smallness of the District’s shipbuilding industry, since that industry is one of the large users of plate. But, plate has many applications. In 1953, for example, nine-tenths of the plate shipments went to the following users: Construction Machinery and industrial equipment Warehouses and distributors Ordnance and military Rail transportation Shipbuilding 23% 16 15 15 13 8 During wartime, of course, plate is extremely important for ordnance and shipbuilding. The geographical distribution of flat hot rolling capacity in the Fourth District is shown by the accompanying chart. Each dot represents 100,000 net tons of capacity for rolling sheet, strip, plate and flat break downs for other plant finishing (except skelp). The dispersion shown by the chart follows closely the grouping of steel-making furnaces in the District. About one-third of the District’s flat hot-rolling capacity is in the Pittsburgh area, about one-fifth is in the Youngstown vicinity and the remainder is split about evenly among the Cleveland, Wheeling and South Ohio River producing areas. There has been no new plate capacity added to the nation’s total for quite a while, but 7 million additional tons of light plate could be rolled on strip mills now producing sheet and strip without major changes of mill equipment, according to one industry source. For example, although the nation’s plate capacity was reported as less than 9 million tons this year, more than 13 million tons of plate were rolled during both 1943 and 1944, and 9.9 million tons were turned out in 1953. Structural Shapes and Rails Fourth District mills are relatively low in structural and rail rolling capacity, account ing for less than one-fourth of the nation’s structural shape rolling capacity and less than one-tenth of its rail capacity. Both are specialized products catering to a limited market, with production centralized in a relatively small number of companies. Pres ent rail capacity is more than sufficient to meet foreseeable market demand. Plate Bars Fourth District mills reported only about 30 percent of the country’s plate capacity(3) at the beginning of this year. The fact that this share is no larger may be due, in part, About one-sixth of the nation’s hot rolling capacity is devoted to making bars and 35 percent of this capacity is located in the Fourth District. However, nearly one-half of the nation’s facilities for cold finishing bars is in the District. The accompanying map shows that hot bar-making capacity is clus- ( 3) Plate is thicker than sheet and strip. In general, sheet and strip are up to about 0 .2 0 inch thick, while plate is over 0 .2 0 inch in thickness. A ll have a high ratio of width to thickness. 4 LO C A T IO N OF HOT ROLLED BAR C A P A C IT Y IN THE FOURTH DISTRICT, 1954 ------------------------------------------------------------ - cold finished bar output on a national basis, thus helping to explain the District’s predominance in cold finished bar capacity. Pipe and Tubing tered around the Pittsburgh, Youngstown and Cleveland industrial centers. The bar classification covers a wide va riety of mill products used by many indus tries. Generally speaking, bars may be grouped into three main categories; hot rolled, cold finished(4), and tool steel. The latter, as the name implies, is a specialty product, accounting for a very small pro portion of total bar tonnage. The large con sumers of hot rolled bar shapes are the automotive, construction (mainly for con crete reinforcement and for light structural applications), m a c h i n e r y and industrial equipment, ordnance, fastener (bolts, nuts, rivets, screws) and forging industries; al together, these groups took over 60 percent of 1953 mill shipments of hot rolled bars. The automotive and machinery industries are important District users. These two industry groups also use 40 percent or more of the (*) A cold finished bar is a hot rolled bar that has been fu r ther processed (without heating) by drawing, turning or grinding in order to improve its surface or mechani cal properties. Fourth District mills are capable of pro ducing more than one-half of the country’s pipe and tubing, on a tonnage basis, and a much larger proportion on a linear basis. Most of the nation’s small diameter pipemaking facilities are located in the District. However, electricweld facilities for making the large diameter (24 to 36 inch) pipe used in gas transmission lines are mostly located near the markets in the Southwestern gas fields. In terms of tons, large diameter pipe capacity weighs heavily in the total. The concentration of pipe and tubing mills in the District may appear somewhat sur prising, from certain points of view. Al though pipe mills must be located near their raw materials (skelp, tube rounds, sheet, strip or plate) consideration of markets would also appear to be in order.(5) It is hard to pinpoint these markets from the data on mill shipments, as provided by the Ameri can Iron and Steel Institute, because about half of the pipe and tubing shipments go to warehouses and distributors. But, some idea of the many applications of pipe and tubing can be gleaned from total mill shipments by product classification. Mill shipments of pipe and tubing(6) dur ing 1953 were split among the five major product classifications as follows: 36% 21 28 11 4 Line pipe Oil country goods Standard pipe Mechanical tubing Pressure tubing Line pipe is mainly the heavy, large diame ter pipe used in cross-country gas and oil ( 5) Electricweld mills for m aking large diameter gas trans mission pipe have been located near their markets. In this instance, it is easier to ship the plate than the finished pipe. Most of this capacity has been added since the end of W orld W a r I I . (6) Pipe is differentiated from tubing tubing has the thinner w all. by wall thickness; 5 LOCATION OF TUBULAR GOODS CAPACITY IN THE FOURTH DISTRICT. 1954 press rolls, bushings, shaftings, and bridge and roof trusses, to name a few. The auto motive, machinery, appliance, and other in dustrial and commercial equipment industries are the major consumers of pipe and tubing in the District. All are large users of tubular goods and important District industries. The location of 55 percent of the tubular goods capacity of the nation is shown by the accompanying map. It is clustered around steel facilities in Lorain, Youngstown, Mc Keesport and Aliquippa. W ire Providing a sharp contrast with the Dis trict’s predominance in pipe-making is its relatively small share of the nation’s wire drawing capacity; only 30 percent of the latter is located in the Fourth District, ac cording to A.I.S.I. data. Wire is an impor tant raw material of the automotive, ma chinery, and equipment industries, and to the producers of fasteners — all of which are important industries locally. transmission and is made largely at mills outside the District. It is in the production of the remaining four groups of tubular products that the District leads the rest of the country. Oil country goods are a spe cialized product, used largely outside the District. The last three kinds of pipe and tubing cover a wide variety of tubular goods, however, having many different industrial applications. These range from the more familiar plumbing applications to furniture, automobile exhaust pipes, conduit, fence posts, high pressure steam lines, printing 6 • • • The emphasis placed upon sheet and strip rolling capacity and upon tubular goods augurs well for the District’s industrial future. These two groups of products— along with tin-mill products—have been the major areas of steel industry growth in recent years. Whether or not the District can main tain its position in sheet and strip capacity depends, in large part, upon the expansion of major steel-consuming industries in the District. Outlays By State Governments 48 state governments in the United units, dependent upon the financial resources States make up a significant group of available to the various administrations. customers for the nation’s output of goodsComparative data on state government reve and services. Outlays by these administrative nues, outlays, debt, etc. for the fiscal year units in the aggregate totaled nearly $17 1953 are available from a recently published billion during the fiscal year 1953.(1) Such a study.(2) From these data, the four states sum represented an increase of 6 percent included in whole or in part within the from the preceding year. It was more than Fourth Federal Reserve District have been four times as great as the total of expendi singled out for special attention in the ma tures by state governments in 1939, although terials below. in the interval, the rise in the wholesale General Revenues and Expenditures price level had been considerably less than threefold. In recent years, the total of out General expenditures by all state govern lays by state governments has actually ments in the aggregate exceeded general exceeded expenditures by the Federal Gov revenues by a margin of 1 percent during the ernment for all purposes other than national fiscal year 1953.(3) This is illustrated by a defense. pair of bars on the accompanying chart State government outlays, along with ex penditures by certain other segments of the For O h io , general revenues exceeded general expenditures during fiscal 1953; for Pennsylvania, economy, have been receiving an increasing West Virginia and Kentucky, expenditures exceeded share of attention among business observers, revenues. at a time when announced reductions in Dollars Federal spending for national defense have Per Capita HM lOOr been put into effect. Among the possible sources of increased demand for the nation’s potential output, state governments rank high, especially in view of the pressures exerted by rapidly expanding populations for such characteristic state functions as edu cational facilities and highways. The extent to which state governments can provide for the increasing requirements of their residents is, as with all economic T h e ( !) The fiscal year for state-govem m ent accounting ends on June 30 in 42 of the states, including three of the four states specially considered here. The fiscal year for Pennsylvania ends on M ay 31. (2) Com pendivm o f State G overnm ent Finances in 1 9 5 3 , U . S. Department of Commerce, B ureau of the Census. (3) General revenues and general expenditures refer to all state government revenues and outlays except those in volving borrowing and debt redemption, and transac tions in connection with state liquor stores and insur ance trust funds. STATES 7 which shows per capita general expenditures and general revenues for each of the four states with which the Fourth District is identified, as well as per capita amounts for the 48 states in the aggregate. The gap be tween expenditures and revenues in 1953 was smaller than in any of the three preceding years. During 1950, for example, outlays totaled nearly 9 percent more than revenues. Revenues failed to match expenditures dur ing 1953 in three of the four states shown separately on the chart. The imbalance for that year was largest for West Virginia, where expenditures exceeded revenues by 17 percent. Of the states shown on the chart, only Ohio had a surplus of revenues over expenditures for the year. General expenditures were smaller than the national aggregate, on a per capita basis, in three of the four states. In fact, per capita outlays by these three states, Ken tucky, Ohio, and Pennsylvania, ranked among the six lowest in the nation during 1953. For West Virginia, however, per capita outlays in 1953 amounted to $103.23 as compared with a national average of $94.73. An important consideration to bear in mind in interpreting the above information on expenditures is the fact that the differ ences in the level of expenditures by the various states may result from differences in the distribution of responsibilities for cer tain functions as between state and local governments. The details of such differences in responsibility are too complex for specific treatment here. Sources of General Revenue General revenue by all state governments amounted to more than $14.5 billion in 1953. Almost three-fourths of this total was ob tained from various taxes as indicated by the right-hand circle on the chart. The bal ance of revenues consisted largely of inter governmental revenues from the Federal Government for such specific functions as public welfare, highways, and education. Grants to states from the Federal Govern ment amounted to more than $2.5 billion in 1953. The most important sources of tax reve nue to the state governments are the sales and gross receipts taxes. Last year, these taxes (which include retail sales taxes, motor vehicle fuel taxes, and taxes on alcoholic beverages and tobacco products) accounted for 43 percent of total revenues by all state governments. In those states which had a general retail sales tax, for example Ohio and West Virginia, sales and gross receipts tax collections brought in well over half of all general revenues. License tax revenues made up 11 percent of general revenues by all state governments in 1953. These taxes, the most significant of which are the motor vehicle license fees and Sales and gross receipts taxes accounted for well over half of Ohio's revenues in 1953; other types of taxes were relatively more important in Pennsylvania and Kentucky. ( Each circle re p re se n ts tota l ge n e ra l reve nu e for the sta t e .) SA LES 8 G RO SS> R E C E IP T S TA XES O TH ER .R E V E N U E OHIO PE NN SY LVAN IA $ 636,174,000 $ 772,555,000 8 KENTUCKY $20 1,613 ,0 00 WEST VIRGIN IA $172,2 4 3 ,0 0 0 48 STATES $ 14,51 1,307,0 00 corporation licenses, were relatively more important in the highly industrialized states of Ohio and Pennsylvania than was the case for the aggregate of all states. In Pennsylvania and Kentucky, which had no general retail sales tax in 1953, taxes of other kinds made up a larger share of gen eral revenues than was the case for Ohio and West Virginia. For Pennsylvania, the cor poration net income tax yielded a substantial proportion of general revenues, while in Kentucky, the individual income tax was an important source of revenue. Although it is too early as yet to deter mine accurately what effects the recent de cline in business activity may have had on state government revenues, various reports indicate that tax collections have fallen off somewhat as a result of the reduced pace o£ retail sales and other business activity dur ing the latter part of 1953 and early 1954. So long as the decline in revenues is not too severe, it does not seem probable that out lays will be reduced appreciably in the near future, especially in view of the relatively inflexible nature of numerous commitments by the administrations. Distribution of Outlays Highways and educational facilities to gether accounted for more than half of all general expenditures by state governments during 1953. Outlays for highways alone made up about one-fourth of the total for all state governments, as may be seen from the accompanying chart. Expenditures for highways took a larger share of the budget in each of the four states than was the case for all states in the aggre gate. The proportion of total outlays allotted to highways by the four states ranged from 27.4 percent in West Virginia to 31.3 percent in Kentucky. (Of all the states in the na tion, Nevada devoted the largest share of outlays to highways, allotting 44.0% of its budget for this purpose in 1953.) Outlays for highways have risen faster than any of the other major items in state government budgets during recent years. In 1953, highway expenditures totaled over $3.5 billion, an increase of 34 percent since 1950. In spite of the growing emphasis on toll expressways during the post-war period, more than $2.6 billion, or 72 percent of all highway expenditures by state governments in 1953, was spent for regular highway facilities. Toll highway facilities assumed relatively greater importance in highway expenditures in the Fourth District areas than was the case for most of the other states. In Penn sylvania, outlays in connection with toll high ways amounted to over $17 million in 1953, while in West Virginia, almost $12 million was spent on toll highway construction. Out lays for toll highway facilities in Ohio H ighw a ys and educational facilities together accounted for more than half of all g en eral expenditures by state governments during 1953. ( Eoeh circle re p re se n ts total ge n e ra l e x p e n d itu re s for the s t a t e . ) OHIO $ 6 0 6 , 968,00 0 PE NNSYLVANIA $802,576,000 KE N T U C K Y WEST VIRGINIA $ 208,324,000 $201,410,000 48 STA T ES $14,677,301,000 9 amounted to somewhat less than $6 million during the fiscal year 1953 as initial work on a $300 million project got under way. Highway expenditures appear to be due for further increases in the years to come. Estimates by the Federal Government indi cate a need for annual outlays of at least $5 billion over the next decade to provide for adequate highway facilities for the nation’s expanding population. The achievement of such a rate of highway expenditures would provide considerable additional stimulus to general business activity. Expenditures for education by the 48 state governments in 1953 amounted to $4.4 bil lion or 30 percent of all general expenditures. The share of total outlays allotted to edu cation was somewhat smaller than the national average in three of the four states shown on the accompanying chart. In West Virginia, however, the proportion of the budget spent for education was slightly larger than the national figure. For the most part, state government out lays for education take the form of grants to local units of government charged with the responsibility for actual operations of public schools. In 1953, such grants to local governments by all states totaled $2.7 billion. State institutions of higher education ac counted for most of the balance of education expenditures. Outlays in connection with state colleges and universities totaled $1.3 billion last year. Expenditures for education seem bound to increase appreciably in the coming years if adequate standards of public education are to be maintained. The full impact of post war population gains has yet to make itself felt upon the nation’s public schools. Esti mates based upon birth rates of recent years indicate that substantial increases in the school-age population will continue for a number of years. Although only about a third of the total cost of operating public elementary and secondary schools in fiscal 1953 was assumed by the state governments, increases in educational costs such as can be anticipated for the near future will call for 10 a considerable expansion in state-government outlays for this purpose. Another important group of state-govern ment functions is summed up under the heading of public welfare. Such outlays, which include old-age assistance, aid to de pendent children, aid to the blind, etc., totaled over $2.5 billion, or 17 percent of the total budget of all states in 1953. Ohio and Kentucky, as may be seen from the chart, allotted a slightly higher proportion of gen eral expenditures to public welfare than the national average, while Pennsylvania and West Virginia spent a smaller share of their outlays for public welfare. More than half of total public welfare expenditures by state governments consists of funds obtained from the Federal Govern ment in the form of grants for specific wel fare functions. This is the only major area of state government administration where Federal aid provides such a substantial pro portion of outlays. Debt Total debt outstanding by all state govern ments amounted to $7.8 billion at the end of the fiscal year 1953. This includes both M o re than half of the total debt ou tsta ndin g in O h io and W est Virginia at the close of fiscal 1953 had been incurred for highways. O U T S T A N D IN G D E B T , F IS C A L 1953 M illio n s 0 -------1 200 of 400 D o lla rs 600 800 1.000 * --------- ' --------- ' --------- ' - OHIO PENN SYLVANIA 0E87 OTHER D E B T KENTUCKY WEST VIRGINIA (1) End of fiscal year. No against outstanding debt. (2 ) $ 1 0 , 1 8 8 , 0 0 0 . allowance made for reserves short and long-term debt and makes no allowance for reserves held against the obli gations. Highway debt alone accounted for over $3 billion, or more than a third of total obligations. An accompanying bar chart shows the volume of debt outstanding at the end of the fiscal year 1953 by each of the four states with which the Fourth District is identified.(4) The colored portion of each bar indicates the amount of debt for purposes of highway facilities. Pennsylvania, with obligations to taling $952 million, had the largest volume of debt outstanding at the end of the fiscal year of any of the four states shown. No single function accounted entirely for the relatively large total debt; indebtedness for each of several functions was larger than for the other states. More than half of the total debt outstand ing by Ohio and West Virginia represented indebtedness in connection with highway facilities. The state of Ohio issued $326 million of long-term debt during fiscal 1953 for purposes of construction of a toll high way across the state. This issue accounted for the major portion of the state’s total outstandings. Employment The 48 state governments employed nearly one million persons out of a total of about six million public employees in all types of government during 1953. As shown on the accompanying chart, this amounted to about 64 full-time state government employees per 10,000 population. West Virginia had a larger number of employees relative to its population than the average for all states. In Pennsylvania, Kentucky and Ohio, the state governments had fewer employees in relation to popu lation than the national average. Almost every phase of state government finance, both income and outlay, has shown (■*) It must be understood that the capacity of various states to sustain successfully a large debt varies for many factors not discussed here, — including population, in come of individuals and corporations, statutory debt limits and many other circumstances. Ohio had a relatively small number of state em ployees in relation to population, as of Octob e r 1953. State Employees Per 10,000 Population 80p STATES substantial increases during the postwar years. Outlays have been rising both as a result of increased requirements by a larger population for the services provided by state governments and as a result of higher costs for these services. Tax revenues have in creased also, along with the expanding pace of general business activity. For a number of years to come, state governments will be under pressure to pro vide more and more facilities for their resi dents. These demands result from a backlog of needs built up during the depression period of twenty years ago when lack of adequate funds prevented keeping pace with the needs of the states; the backlog also stems from the war and immediate postwar period of scarcities of materials and from the population growth of the last decade. How well the state governments will be able to provide the required facilities, especially in the area of public education and public highways, will depend on revenues available in the years ahead — the prospect of which revenues makes possible today’s borrowing power and spending power. 11 A New Frontier in Metals By DR. BRUCE W . GONSER, Battelle Memorial Institute are probing more deeply into the effects o f extremely small or trace amounts o f impuri ties on the properties o f metals. By so doing, they hope to find ways to create new materials, make “ unusable” metals usable, extend markets for com monplace metals, and open avenues for further engi neering progress. Purer metals have already brought new and better alloys for use in making automobile valve springs, ball bearings, jet turbine buckets, nuclear power plants, tool steels, transistors, vacuum tubes, and watch springs. Most metals have been refined to a state pure enough to determine their principal properties. Pur ity, in this sense, usually means about 99.9 percent purity. The new frontier in metals is that remaining 0.1 percent before absolute purity. Trace impurities may involve any element in the periodic table. Not only the common impurities, like carbon, manganese, phosphorus, sulphur, and silicon, must be considered, but also those normally in the gaseous state, oxygen, nitrogen, and hydrogen, and the rarer metallic elements, such as cerium, lantha num, and thorium. That trace impurities can control, or even obscure, the true properties o f metals is now well demon strated. A classic example is, o f course, titanium, which was brittle and practically useless until a practical method was found to remove the oxygen and nitrogen below the last tenth o f a percent. Other metals, like chromium, that are regarded as brittle, are actually ductile in pure or near-pure states. Removing trace impurities from metals frequently leads to new or improved properties and expanded uses. Zinc is a case in point. The earliest market for zinc was in galvanizing operations. Successive im provements in production processes led to the devel opment o f 99.99 percent pure zinc and greatly ex panded use o f the metal in making die cast alloys for a wide variety o f parts. In some cases, the addition o f controlled amounts o f trace impurities to metals can lead to desirable properties. For example, the addition o f from 10 to 60 parts o f boron to every million parts o f steel can improve the capacity o f certain steels to harden with out adversely affecting their physical properties or safe performance. In the making o f transistors, germanium and other semiconductor materials, such as silicon and aluminum-antimony, must be refined to an extremely pure state. Control o f electrical properties in the tran sistor is then obtained by adding to the semiconduc tor material a very tiny, measured amount o f arsenic, indium, or gallium. Strict control o f residual atmospheric gases must be exercised in metals used for oxide cathodes and c ie n tis ts S Editor’ s Note— W hile the views expressed on this page are not necessarily those of this bank, the Monthly B u siness R eview is pleased to make this space available for the dis cussion of significant developments in industrial research. 12 other electron tube parts. Even after metals o f low gas content have been formed into tube components and joined together, further removal o f gases is necessary to eliminate traces o f oxygen that can “ poison” the cathode. Such extreme control o f gas eous impurities is required i f electron tubes are to operate at peak performance for long periods o f time in radios, television sets, and military signal equip ment. Aluminum, refined to 99.99 percent purity and elec tropolished, permits a wide variety o f finishes hav ing a more brilliant, more permanent lustre than is possible with lower grades o f the metal. The same type o f aluminum, strengthened by alloying with small amounts o f magnesium, has given rise to a new series o f alloys. Possible applications for these alloys include ornamental trim for automobiles, re frigerators, television sets, and other items where light weight and attractive finish are desirable. Iron has been used for hundreds o f years but there is still much to be learned about it. Studies, for example, show that iron containing less than fifteen parts o f impurities for every million parts o f iron is unusually soft, workable, and corrosion resistant. The market for this quality iron may never be calculated on a tonnage basis. However, the information gained from its production should be o f permanent value in the development o f better iron and steel products. Molybdenum and chromium are both o f potential interest as materials o f construction in high-temperature applications. Commercially available grades o f the two metals, however, contain trace impurities that cause brittleness which may render them unsuitable for such purposes. The preparation o f high-purity grades o f molybdenum and chromium in the labora tory has brought noteworthy progress towards over coming brittleness. This progress could lead to in• creased use o f these metals in high-temperature applications. The mechanical properties o f commercially avail able grades o f high-purity titanium and vanadium are sensitive to minute variations o f trace impurities o f oxygen, carbon, nitrogen, and hydrogen. For ex ample, it has recently been found that the presence o f hydrogen in quantities above about 50 parts per million has a very detrimental effect on the impact or shock resistance o f certain titanium alloys. Future development o f titanium for existing and new appli cations will require closer control o f impurities. The same applies to high-purity zirconium, which is about as sensitive to oxygen, carbon, and nitrogen as titanium. Enough has been learned about the effects o f trace impurities on metals to convince scientists that the full potentialities o f metals are still to be realized. As more knowledge is acquired about the effects o f trace impurities and as better methods are developed for removing and controlling them, expanded versa tility for both old and new metals should result.
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