While the U. S. Supreme Court was pondering the gold cases, the upward surge of business that started last autumn slackened appreciably. It was generously predicted, however, that once the gold decisions were out of the way, a flood of orders, contracts, financing and refunding would be promptly released.
True, the stockmarket greeted Chief Justice Hughes's pronouncements last fortnight with a skyrocketing rally but prices soon relapsed and trading dropped back into its old rut. Bonds, notably Governments, climbed to new records but as a business shot-in-the-arm the gold clause decision was a notable flop—with one exception. The two biggest U. S. steel companies perked up enough to announce for 1935 big programs of expansion and improvement.
Paced by smaller units like Jones & Laughlin, Republic and Northwestern Barb Wire Co., which had laid their 1935 plans long ago, U. S. Steel's directors authorized its subsidiaries to spend $47,000,000 for new construction and equipment within the year. And Bethlehem Steel announced a new $20,000,000 hot and cold rolled strip plant at its Lackawanna works near Buffalo.
Steel is proverbially the heaviest of heavy industry but even heavier is that part of the machinery industry which makes the thunderous tools for the steelmakers—blooming mills, slabbing mills, rail mills, tube mills, hydraulic shears, hot saws, cooling beds, forging presses, pickling equipment, etc., etc. Companies like Westinghouse and General Electric share hugely in the construction of steel mills, for almost all steelmaking machinery in electrically operated, but the machinery itself is produced by highly specialized concerns. And in this subcellar of a steel civilization are two companies that together supply most of the biggest and toughest machinery made in the U. S.: United Engineering & Foundry Co. and Mesta Machine Co., both of Pittsburgh.
Both, as U. S. corporations go, are small (United's assets are about $10,000,000, Mesta's $9,000,000). Though both are largely management-owned, both have stock outstanding with a public to which they are virtually unknown. United's contracts for last year included rolling mills for Henry Ford and Carnegie Steel. But it was Mesta that got the Bethlehem contracts last week.
Mesta boasts that the only limit to the size of a machine part that it can turn out is the carrying capacity of any of the three railroads which spur into its West Homestead plant outside Pittsburgh. Castings weighing 165 tons have been poured in its foundries and machined in its shops. One of its prides is a gigantic press built for a Navy armor works that will exert a pressure of 14,000 tons. It has gear nobbing and planing machines for finishing gear wheels up to 17-ft. in diameter.
Mesta makes money as well as machines. Its peak was 1930 when it reported a profit of $2,500,000. More notable, it continued to make profits throughout Depression, touching a low of $327,000 in 1932. Mesta has yet to report for 1934 but in the first half it made $400,000. And in the last half it boosted its dividend, paid a 66% stock dividend and retired $1,000,000 of preferred stock.