Dead End Ended

One of the oldest U. S. steel companies and first manufacturer of boiler plate, 128-year-old Lukens Steel Co. is located at Coatesville near the hard coal country of eastern Pennsylvania. With total assets of $16,000,000, it is 14th largest in the industry, specializes in making steel plates for steamships and locomotives, nickel and chrome quality alloys. Last fiscal year, Lukens' net income was $158,218, biggest since 1929. But its operating costs also increased. When Depression II cut production as low as 35% of capacity, the company cut its payroll almost in half, laid off 1,100 of its 3,600 workers, still lost about $250,000 in fiscal 1938's first six months. Most of this loss, thought President Robert Wilson Wolcott, might have been avoided had the company been using natural gas instead of coal and oil. For years Lukens has been wanting to use natural gas; for years it has been just 3 1/4 miles away from it.

In 1930, a Columbia Gas & Electric Corp. subsidiary extended a 20-inch natural gas pipe line originating in Kentucky to the outskirts of Coatesville. There it came to a dead end at Poor House Road, 31 miles from Lukens' plant. Philadelphia Electric Co., which holds a franchise to distribute gas in Coatesville, was reported to have wanted to charge Lukens some $100,000 annually as commission for linking it to the Columbia pipe line. After several years of political fencing, Columbia's subsidiary this year dug in for a finish fight with the State's powerful coal interests, who were backed by a temporary decree instigated in 1936 by Governor Earle against further introduction of natural gas in the State.

Pennsylvania Railroad Co., which gets fat freight income from coal, asserted that State industries might be robbed of much-needed revenue. Steelman Wolcott replied that he bought only 55,000 tons of Pennsylvania coal a year, anyway (plus 20,000 tons from West Virginia), would continue doing so--unless continued losses forced him to close the plant. Coatesville townsfolk, about 90% of whom depend on Lukens for a living, backed his plea and last week Pennsylvania's Public Utility Commission decided Lukens could buy its gas direct from Columbia's subsidiary. Henceforth, instead of the 20,000 tons of West Virginia bituminous and 25,000,000 gallons of fuel oil it has been buying annually, the company will use 15 million cu. ft. of gas a day, thereby lop about 20% off its yearly $1,250,000 fuel bill.

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