METAL BULLETIN CENTENARY: From rags to riches – the 1930s

For metals, the 1930s were a “rags to riches” decade, as the 1932 nadir following the Wall Street Crash gave way to the buoyant markets of the late 1930s and a couple of years of frantic preparation for war.

History books are preoccupied with the “on-again, off-again” diplomacy of 1938-39, but in the factories of Europe, activity was by then at a crescendo.
Japan was already on a war footing, setting itself against both China and the Soviet Union by first invading Manchuria and then pushing further into mainland China.

The USA was not left behind, even though it did not officially enter the second world war until Japan’s unprovoked attack on its Pearl Harbor naval base in Hawaii in 1941.

Quite separately from the war issue, the contribution of President Franklin D Roosevelt’s Keynesian New Deal in 1933 was of global significance. Metal Bulletin commented: “[It] has always appeared to be a gigantic gamble. A splendid gamble with a nation’s welfare at stake; but a gamble nevertheless.”

Conflict was not confined to the countries that were to be most prominently involved in the second world war. A bloody three-year civil war from 1936-1939 saw Franco’s fascists gain control in Spain. Revolutions and dictatorships were rife in Latin America.

In addition, there was the Chaco War involving Bolivia and Paraguay, which saw the latter gain territory. Italian colonialist actions in Libya and Ethiopia brought war to Africa.

A disaster not made by man was the flooding of the Yellow River in China, which caused millions of deaths. Mao Tse Tung led Chinese Communists on the Long March, but remarkably, the Communists and their Kuomintang adversaries were later able to join forces to oppose the Japanese invasion.

The British government responded to the extreme pressures of the early 1930s by again taking the pound sterling off the gold standard in September 1931.

It did not return until 1934; in the meantime, it collapsed against the dollar.

As late as 1936, unemployed shipworkers from Jarrow in north-east England marched to London to protest against unemployment levels of 75% in that traditional shipbuilding area.

In Germany, however, Hitler was building “pocket battleships”, to get round a prohibition on his country building larger warships contained in the Treaty of Versailles.

Protectionism
The other emerging trend in the 1930s was protectionism.

In the depressed markets of the decade, national industries around the world demanded the imposition of tariffs to protect their home markets from imports.

Often the problem was more one of currency than commodity, but the result was the same.

In the UK, the steel industry had been calling for protection since 1928. On the London Metal Exchange, there was a problem when Empire preference meant Australia and Canada were the only suppliers of lead and zinc with duty-free access to the UK, yet the LME contracts referred to metal in warehouses and in those days all the warehouses were in the UK.

A convention was introduced for a flat rate “Empire premium” equal to the import duty to be charged on physical deliveries of metal from these two sources.
This preserved a level playing field for LME trading, but also meant domestic consumers were paying above world prices.

The regulatory complexity that protectionism introduced made business even harder than it was already, as economies bumped along the bottom for much of the decade. Even after the industry had grasped the principles of market-changing tariffs, it then had to contend with hundreds of ad hoc decisions by customs officials about the detailed application of the hastily conceived charges.

It was not just a case of duty-on/duty-off, but also of which of several levels of duty applied and how the particular shipment was described.
In the metals markets themselves, copper suffered from the opening up of the Northern Rhodesian (Zambian) mines, enabled by US and South African investment committed before the Wall Street Crash, which aggravated a state of global oversupply in the early years of the decade.

But as is shown by the record of all LME base metals prices (see table), copper was not the worst hit. 

Technological advances
On the technology front, a major feature of the 1930s was the arrival of plastic mouldings as a serious item of commerce. Futurologists were predicting they would completely replace wood and metals.

In the face of this threat, in 1937 the Metal Information Bureau launched The Plastics Bulletin – a weekly.

From a Metal Bulletin background it was natural to assume readers would require price information. This, however, was not how the industry saw it, especially in the UK. The result was major difficulties both in selling advertising and gathering real information; the title folded within six months.

It cannot have helped that the directors eschewed the wanton extravagance of hiring an editor with expertise and introductions in the field, in favour of Leslie Tarring learning the subject at evening classes!

Technology also reached Metal Bulletin itself, with the first two-colour full-page advertisement in 1934, followed by the first double-page spread and then the first three-colour advertisement in 1938. In editorial, the two-column layout for the leader was first used in 1934.

Metal Bulletin had its own crisis when a trusted staff member drew the ready cash representing subscribers’ advance payments from the bank and absconded with it. A posse of directors gave pursuit through France and fortunately recovered it.

Another near-misfortune occurred in 1938 when the directors were inspecting their smart new unfinished offices in Ibex House in the City of London. These were situated on the eighth floor and featured a balcony that wrapped completely around the building, as in those days the ladders of London’s Fire Brigade did not reach higher than seven storeys. There were still no railings on the balcony. When FB Rice-Oxley leant on a stanchion bedded into concrete that had not yet set, only swift grabs by his colleagues prevented his fall.

The company’s tenure of Ibex House was short-lived. On the outbreak of the second world war in September 1939, all departments except advertisement sales left for temporary offices in Leatherhead.

LH Quin had died in 1934; Rice-Oxley then became md of Metal Information Bureau, while Tarring and Cordero became directors, as well as joint editors of Metal Bulletin. The latter unusual arrangement was continued beyond their lifetimes through their respective sons, and lasted 77 years altogether.

The late 1930s also saw the formation of Quin Press as a majority-owned subsidiary with responsibility for publishing the trade directories Metal Information Bureau had begun regularly producing.

As Quin aged and Metal Bulletin became more established, the language of its leaders became even more trenchant. The president of US Steel was pilloried in the following terms for a remark he made in 1931: “To suggest as he did that selling prices should be increased as demand decreased is to admit mental incapacity to grasp the elements of economics and ignorance of the fundamental principles of commerce and industry.”

Trevor Tarring 
editorial@metalbulletin.com