Business: Scrap

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One of the most lowly looking businessmen in the U. S. is the junkman with his knobby old horse and ramshackle wagon, collecting old rags, old bottles, bones and scrap iron. Yet when Junkman Bill Kearns of Chicago died, it was found he had accumulated more than $1,000,000 (TIME, Aug. 15). There are 150,000 itinerant junkmen in the U. S. From their humble beginnings has come the half billion-dollar scrap iron and steel industry. Founded by Russian Jews who swarmed to the U. S. in the last century, it now supplies the steel industry with over 50% of its raw material. To finance large scrap dealers who have been unable to obtain adequate bank loans, Director General Benjamin Schwartz of the Institute of Scrap Iron & Steel last week sought $15,000,000 credits for his members from the R. F. C.

Though the importance of the itinerant junkman, picking up rusty chunks of iron & steel wherever he can, has dwindled, he still supplies over 10% of the total tonnage. What he collects in his backyard, he sells to the dealer for cash. Thus, dealers large & small require bank credits to carry their huge junk piles until sales in big shipments are made to the steel mills. Large dealers are generally college-bred sons of junkmen who found the picking particularly good, have considerable investments in machinery to handle and break up junk. Despite the size of the industry, there are no large units.

Every ton of steel manufactured is potential scrap. Big users of steel are big sources of scrap. Railroads, buildings, old automobiles supply immense quantities. Old rails, cars, locomotives, machinery, pipes, automobiles pour into the big scrap yards to be cut or broken up, carefully sorted. Giant shears leisurely chomp a steel freight car into bits. Oxyacetylene torches slice up rail's, girders, beams. "Skull-crackers" shatter cumbersome castings. Twisted sheets and waste are bundled by hydraulic presses. Great electric magnets on overhead cranes pile the fragments into heaps or load them in gondola cars for the blast furnaces.

All junkmen love a big scrapping job. After the Washington Naval Conference Henry A. Hitner's Sons Co., potent Philadelphia dealers, had tied up at their waterfront yard awaiting the torch three battleships, 26 submarines and destroyers, 55,000 tons of auxiliary vessels. Ingenious British junkmen picked the best ships of the German navy off the floor of Scapa Flow, sliced them into $13,000,000 worth of scrap. An abandoned railroad is always a juicy plum. A big deal that junkmen missed was the sale of 199 World War vessels to Henry Ford for $1,600,000. He towed them through the Great Lakes to Detroit, melted them down into Fords. One smart junkman bought 100 locomotives, but instead of cracking them up he repaired and sold them to big construction firms, to cinema companies to be used in railroad wreck scenes.