LANCASHIRE STEEL POLICY
After the very rapid recovery in iron and steel output during the first two months of 1939, the note of caution struck by Mr. John E. James, chairman of the Lancashire Steel Cor- poration, last week is wholesome. Mr. James pointed out that the rise in production was at least partly the outcome of the price cut which came into force on January 1st. Since the price cut itself was a gesture designed to secure larger orders, and was not based on a commensurate fall in the prices which the Corporation and other steel manufacturers have to pay for their raw materials, they must look to higher production and to possible working economies to recover in whole or in part the sacrifice. To this he adds a further very natural warning that the events of the last few days cannot fail to have an unfortunate effect on the revival of international trade.
It might be thought that the decision of the Corporation not to distribute interim dividends in future was part of the same reluctance to take the " bullish " view which the pro- duction figures seem to indicate. But Mr. James based that decision upon general grounds which have no special refer- ence to 1939. Part of the Corporation's business, he explained, is seasonal. Moreover, the industry is subject to considerable fluctuations within a short space of time, so that in some years the distribution of an interim dividend might be misleading.
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