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steel industry. The principal additions to the Nation's steel-making capacity authorized in these projects were as follows:

Coal

Iron ore and concentrates_

Sintered concentrates

Coke____

Pig iron__.

Open hearth ingots---.
Electric ingots----

Rolling mill products-

Annual capacity (tons)

6, 646, 000

9, 766, 120 7,067, 400 7,828, 500 10, 003, 500 5, 200, 613 1,271, 240 5, 915, 217

In addition to those listed, facilities also were provided for the production of ferromanganese, tubing, malleable and gray iron castings, steel castings and forgings, etc. Approximately a billion dollars was expended by DPC in the erection of steel facilities. All of the DPC projects were under the sponsorship of some Government agency directly concerned with the prosecution of the war. For details on the facilities included, your attention is invited to reports of the war agencies, especially "Steel Expansion for War," prepared by W. A. Hauck, of the War Production Board's Steel Division. The postwar disposition of DPC's steel facilities has been noted in reports of the Surplus Property Board, the Surplus Property Administration, and War Assets Administration (now General Services Administration).

From about the time of the war's close until June 9, 1950, the Reconstruction Finance Corporation authorized 17 loans for $75,040,000 to steel companies. In most instances, these loans were made for the purpose of assisting in the conversion of wartime facilities to civilian-type production. More than 80 percent of the loan funds authorized to steel concerns since January 1, 1945, have been designated for capital expenditures.

While this Corporation has no restrictions placed on the size of concerns to which it may lend funds, you will note that only two loans were authorized to companies which might be considered as being among the major steel producers. Both of these loans were made under wartime directives to subsidiaries of Armco Steel Corp. (Sheffield Steel Corp. of Texas and Rustless Mining Corp.). As far as funds for future expansion of the industry are concerned, it would seem that the leading producers should have little difficulty in obtaining any outside capital they may require from private lenders or from the sale of securities. This may not hold true, however, for smaller companies, and if any future requests for loan funds are made to RFC by steel concerns, it is most likely that they will come from the smaller members of the industry whose prestige is insufficient to assure a public market for their securities, or whose immediate earning prospects may make it necessary for them to borrow funds for longer periods of time than private lenders are willing to commit.

In a general sense, all loans made by RFC to business enterprises result in the strengthening or preserving of the borrowers' financial and competitive positions.

I trust that this letter, together with the tables submitted, will supply you with the information you desired and will prove helpful to your committee.

With kind regards.

Sincerely,

HARLEY HISE, Chairman.

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TABLE III.-Detail of loan authorizations to companies in the iron and steel industry, July 1, 1940, to Dec. 31, 1944

Name and address of company

Products

Amount
authorized

Eastern Stainless Steel Corp., Stainless-steel sheets.
Baltimore, Md.

$1,500,000 September 1944..

ingots, hot-rolled

26,050,000

700,000

48,700,000

8, 619, 000

Kaiser Co., Inc., Oakland, Calif.
(now Kaiser Steel Corp.).

Coke, coal chemicals, pig

iron,

products, cold-rolled strip, and pipe.

21, 736, 000

4, 000, 000

1, 000, 000

1,000,000

Kilby Steel Co., Inc., Anniston, Open-hearth and electric-
Ala.

100,000

furnace ingots, rolling-mill
products, steel castings,
and forgings.

200,000

Lebanon Steel and Iron Corp., Electric steel ingots and hot-
New York, N. Y.

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Pacific States Steel Corp., Niles, Forging ingots, merchant
Calif.

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To assist in the financing of a new steel plant. See note B.

For working capital.

Direct loan; repaid in full in July 1943 from proceeds of a privately-sold bond issue.

Direct loan; no disbursements were
requested, and the authorization was
cancelled in May 1943.

26-inch continuous cold-strip mill..

18,000 18,000

Additional facilities include a coal chemical plant and Koppers benzol plant (annual
capacity for 2,500,000 gallons of light oil), three 114 feet 6 inch by 25 foot stoves, two turbo
blowing engines, a double-strand pig-casting machine, an ore-sintering plant (annual

capacity for 547,000 tons), six two-hold soaking pits, six preheating pits, five continuou
regenerating heating furnaces, a continuous pickler, a galvanizing pot, and a continuous
buttweld pipe mill.

Also included in the facilities were iron-ore properties at Kelso, Calif., (annual capacity
900,000 tons), and coal-mining facilities at Sunnyside, Utah (annual capacity 600,000
tons).
NOTE B.-Sheffield Steel Corp. of Texas: The original plan of American Rolling Mill
Co. (now Armco Steel Corp.) was to erect a plant at Houston, Tex., to manufacture steel
products wholly from scrap. The Sheffield Steel Corp. of Texas, a wholly owned subsid-
iary of Armco, undertook this project. Construction of the plant started in April 1941
and the first steel was made a year later. The $12,000,000 loaned by RFC represented the
entire estimated cost of the project; working capital for the plant was supplied by Armco.
The principal facilities included were: three 100-ton open hearth furnaces; 24-inch combina-
tion billet and structural mill; 10-inch road mill; wire mill, merchant-bar mill, 14-inch and
10-inch; 112-inch plate mill.

Later, due to uncertainty about the supply of scrap, the company proposed to add coke
ovens and a blast furnace to the plant to make it self-supporting, and to include another
plate mill. These facilities were financed by the Government under DPC Plancor 346,
along with the other facilities listed below: Ore mines and washing plant; coal mines,
byproduct coke oven plant, 47 ovens; one 700-ton blast furnace; two 100-ton open hearth
furnaces; hot-topping facilities; one 35-inch bloom mill; five 20-foot circular soaking pits;
one 110-inch heavy plate mill.

These facilities were subsequently purchased from the Government.

Source: Industrial Analysis Branch, Budget and Reports Division, Office of the
Controller.

TABLE IV.-Detail of loan authorizations to companies in the iron and steel industry through June 30, 1940

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Direct loan; authorization reduced to
$100,000 in March 1935 at request of
borrowers; disbursements totaled
$60,000; undisbursed portion of au-
thorization canceled; repaid in full,
January 1940.

(The first loan was an immediate par-
ticipation in which the bank's share
was $10,000; the second and third
loans were direct loans; all loans were
fully disbursed; the borrower was
placed in receivership in December
1937; the collateral securing these
loans was acquired by RFC at fore-
closure sale and subsequently sold
for more than enough to recover the
funds advanced.

The first loan was an NRA loan made
to Pennsylvania-Maryland Mort-
gage Corp. for relending to borrower
named; the note was transferred to
RFC in January 1937 and was re-
paid in full in April 1937, the second
and third loans were direct loans,
and were fully disbursed; company
was placed in receivership in Decem
ber 1938; the collateral was sold by the
receiver and a loss to RFC resulted.
Deferred participation loan; bank's
share $250,000; repaid in full in April
1945.

Direct loan; no disbursements were
made on this loan and the authoriza-
tion was canceled in May 1936.

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Kilby Steel Co., Inc., Anniston, Ingots, hot-rolled bars, and Ala.

160, 000

June 1938.

McLouth Steel Corp., Detroit, Mich.

forgings. Hot- and cold-rolled strip..

250,000 July 1938.

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Rotary Electric Steel Co., De- Ingots, hot rolled products,

750,000

troit, Mich.

and cold finished bars.

To provide working capital and to assist in financing the purchase of plant facilities.

To refund debt, to purchase new
machinery, and for working capital.
For payment of delinquent taxes and
for working capital.

To assist in reorganization plan..

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Direct loan; $176,250 of this authoriza-
tion was disbursed, balance was
canceled; disbursed portion repaid in
April 1939.

Direct loan; borrower was in receiver-
ship at the time loan was authorized;
unrepaid balance of $75,000 was
refunded by second loan.
Deferred participation; bank's share
$50,000; bank requested termination
of participation agreement in August
1942.

Direct loan; authorization reduced to
$315,000 in Feb., 1937; disbursed por-
tion of loan repaid in full in Septem-
ber, 1943.

Direct loan; $22,500 disbursed; balance
of authorization cancelled; disbursed
portion repaid in full in Oct. 1939.
Deferred participation; bank's share
$150,000; repaid in full in Oct., 1939.

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