Business: The End of Capacity

The continued slide in steel production —down to 48.7% of capacity from 49% the previous week—last week brought an overdue change in the way the industry will announce its output. The steelmakers, who have been worried that the rate of capacity figure is not only discouraging these days but does not give an accurate picture of the industry (TIME, Nov. 14), decided to drop it. Many steelmen feel that the capacity comparison has made steel production look worse than it actually is, since the most profitable rate of production is around 80% of capacity instead of 100%. Much of the equipment included in capacity is obsolescent and usable only in times of emergency.

After Jan. 1, the American Iron and Steel Institute will issue only the actual tonnage output. The institute tried doing this several years ago, but outside experts went right on making their own computations by simply comparing the actual tonnage with capacity, thus forced the institute to start releasing the capacity figure again. Now the institute has a solution for that problem. Normally, in January, it publishes the increase in capacity during the past year, a computation that is made only once a year. Next month the institute will not release a new capacity figure, thus hopes that outsiders will not be able to make their own calculations.