THE object of this paper is to assemble and weigh the statistical evidence bearing on one phase of the pre-war history of pig-iron prices, namely, the amplitude or extent of pig-iron price movements. In effecting this object some very familiar and perhaps shop-worn data are employed but, it is believed, with new inferences. In previous studies,' these same data, the cycle figures for pig-iron prices, have been used to interpret business conditions and to illustrate the contrast in amplitude between production and consumption goods or between raw, semi-finished, and finished goods; but a conclusion that pig iron, because it is a production good and a raw material, is in the class of things subject to wide price movements, or that the general character of these movements is of unusual significance in the interpretation of business conditions, does not exhaust the meaning of the data. There are forces to be found particularly in tariff changes and in the rate of growth of successive stages of the iron and steel industry which exercise an important modifying influence on the course of pig-iron prices throughout the business cycle. It is toward a statistical analysis of these forces that this paper is directed. For the purposes of investigation, the selected period, I898-I9I4, is advantageous because of the stability in the art of making iron. Throughout the seventeen years, which cover five price cycles of varying intensity and duration, including one of unusual severity, the blast furnace has seen little modification in technique. Such changes as there have been may be quickly summarized: The industry has grown; blast furnaces have increased in size and in capacity; mechanical devices for handling the ore, coke, and limestone have displaced the older hand methods; and refinements in process have obtained a marked economy in fuels. Yet these changes have been no greater than might be expected in the history of any matured industry, and have been so gradually worked out that they have attracted no attention to their effect on the cyclical movements of the iron trade. The economic organization of the industry during the period demands more careful scrutiny than its technique. The most striking change known to haye taken place concerns the merchant furnaces which produce iron for sale in the open market (see Chart 3). With the growth and integration of large steel companies merchant furnaces have become a less and less. important factor in the production of iron. That part of the industry which makes iron principally for sale, the part represented by merchant furnaces, has expanded little during the period while the number of furnaces which produce chiefly for the maker's own use has increased at a very rapid rate. Since a price is quoted only on the iron which actually enters the market, this change in the organization of the industry is important. However, its consideration is postponed for the moment while a survey of the history of the period is undertaken.
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