For the immediate future, there is little to be feared from shortage of mineral supplies in the ground. The difficulties are more likely to arise from the failure of means to extract and distribute these supplies fast enough to keep up with the startling acceleration in future demand indicated by the figures of recent years. The speed and magnitude of recent material developments in many lines cannot but raise question as to whether we have the ability to understand and coodinate the many huge, variable, and accelerating factors we have to deal with, or whether some of the lines of development may not get so far ahead of others as to cause serious disturbance of the whole material structure of civilization. Coal alone, which now constitutes a third of our railway tonnage, may with increased rate of production require two-thirds of present railway capacity. Will railway development keep up? It may be noted that national crises and failures in the past history of the world have seldom, if ever, been due to shortage of raw materials, or in fact to any failure of the material environment.

In its early stages the conservation movement in this country concerned itself principally with the raw material. Later there came the recognition of the fact that conservation of raw materials is closely bound up with the question of conservation of human energy. The two elements in the problem are much like the two major elements in mineral resource valuation (see pages 329-330). If in saving a dollar's worth of raw material, we spend two dollars worth of energy, it naturally raises question as to the wisdom of our procedure. It might be wiser in some cases to waste a certain amount of raw material because of the saving of time and effort. It might be better for posterity to have the product of our energy multiplied into raw material than to have the raw material itself. The valuation of these two major elements of conservation is again almost impossible of quantitative solution. We do not know what is the best result to be aimed for. We cannot foresee the requirements of the future nor the end toward which civilization is moving—or should move. The extravagance of the United States is often contrasted unfavorably with the thriftiness of Europe. When considered in relation to raw materials alone, there seems to be basis for this charge. When considered in relation to the product of human energy into raw materials, the conclusion may be far different; for the output per man in the industries related to mineral resources is far greater in the United States than in Europe. In the case of iron, it has been estimated that the output per man in the United States is two and one-half times as great as in the rest of the world. Which is best in the true interests of conservation, we are not yet able to see.

Our view of what is desirable in the way of conservation depends somewhat on the limitations imposed by self-interest or location. By devoting ourselves exclusively to one mineral resource, we might work out a conservation program very disadvantageous to the best use of some other mineral commodity. We might take steps to conserve chromite in the United States which would have a disastrous effect on the iron and steel industry. We might conserve coal by the substitution of oil, when the procedure is hardly warranted by the supplies of oil available. We might work out a program for the United States which would not be the best conservational plan for the world as a whole, and which would ultimately react to the disadvantage of the United States. The wisest and most intelligent use of mineral resources seems to call unquestionably for their consideration in their world relations, rather than for a narrow interpretation of local requirements.

DIFFERENCES BETWEEN PRIVATE AND PUBLIC EFFORTS IN CONSERVATION

It appears that a wide range of effective conservational practices has resulted solely from the effort to make more money through more efficient operations, and this is likely to be true in the future. Many improvements in mining, grading, sorting, concentration, and metallurgy of minerals, to yield larger financial returns, are coming naturally through private initiative, under the driving power of self-interest.

Another considerable group of conservational practices is possible only to governments or other public agencies. This group of practices on the whole requires some sacrifice of the immediate financial interest of the individual, in the interests of the community as a whole, or in the interests of posterity. In this group may be mentioned the compulsory use of methods of mining, sorting, and metallurgy which tend to conserve supplies but result in higher prices; the control of prices; the elimination or lowering of the so-called resource or royalty value (p. 375); and the removal of restrictions on private combination or cooperation, leading to more efficient methods, lessening of cost, and better distribution of the product; or, what might amount to the same thing, the acquirement by the government of the resources to be operated on this larger scale.

The most effective conservation measures yet in effect are the ones dictated by self-interest and instituted by private initiative. Governmental measures are not yet in effective operation. Illustrations of these two types of conservational effort are cited in relation to coal on later pages.

THE INTEREST RATE AS A GUIDE IN CONSERVATION

In striking a balance between the present and the future, economists have emphasized the importance of recognizing the interest rate as a guiding, if not a controlling consideration. It is obviously difficult for private capital to make investments of effort and money for the purpose of conservation which will not be returned with interest some time in the future. For the present, at least, this consideration furnishes the best guide to procedure in the field of private endeavor. So far as conservational measures, such as investment in an improved process of concentrating low-grade ores, promise return of capital and an adequate interest rate in the future, they are likely to be undertaken.

It is clear that governments are not so closely bound by this economic limitation. They can afford to carry their investments in raw materials and processes at a lower interest rate than the private investor. Their credit is better. Taxes do not figure so directly. They can balance losses in one field against gains in another. As a matter of insurance for the future of the nation, a government may feel justified in inaugurating conservational measures for a particular resource without hope of the interest return which would be necessary to the private investor. In appraising the iron ores of Lorraine taken over by France from Germany at the close of the war, the actual commercial value of these ores, as figured by the ordinary ad valorem method, was only ninety millions of dollars. It is clear, however, that to France as a nation the reserves were worth more. They could afford to pay more for them, and could afford to spend more money on conservational practice than under ordinary commercial limitations, because of the larger intangible and more or less sentimental interest.

The valuation of this larger interest, as a means of determining the limit to which conservational investments may be made, lies in the political field. It may be suggested, however, that a desirable first step in any governmental program of conservation is to ascertain the cost and the possibility of an adequate return of capital and interest. These determinations at least afford a definite point of departure, and a means for measuring the cost to the people of measures which are not directly self-supporting.

ANTI-CONSERVATIONAL EFFECTS OF WAR

Experience during the recent past indicates that the exploitation of mineral resources for war purposes is on the whole anti-conservational. It is true that the vast amount of war-time exploration and development, as well as the thoroughgoing investigations of the utilization of various minerals, have led to better knowledge of the mineral resources and their possibilities. It is also true that the war required a much more exhaustive census of mineral possibilities than ever before attempted. The immediate and direct effect of the war, however, was the intensive use of mineral resources without careful regard to cost, grade, or many other factors which determine their use in peace times. For instance, in ordinary times considerable quantities of high-phosphorus iron ores are mined; but, because of the fact that such ores require more time for conversion into steel, war-time practice concentrated on the higher-grade, low-phosphorus ores, resulting in an unbalanced production which in some cases amounted almost to robbing of ore deposits. In the case of coal, quantity was almost the only consideration; it was impossible to grade and distribute the coal to meet the specialized demands of industry. The results were a general lowering of the standards of metallurgical and other industrial practices, and increased cost. High-grade coals were used where lower-grade coals were desirable for the best results. In the making of steel, it is the custom to select the coal and coke with great care in regard to their content of phosphorus, sulphur, ash, and other constituents which affect the composition of the steel product; but during the war it became necessary to accept almost any kind of coal, with a resulting net loss in quantity and in grade of output.

For a considerable number of mineral resources, such as the ferro-alloys, foreign sources of supply were cut off during the war, requiring the development and use, at high cost, of low-grade scattered supplies in the United States. It was found possible to produce enough chromite in the United States for domestic requirements, but at two or three times the normal price of imported chromite. The grade was low and the loss in efficiency to the consuming interests was a high one. The extremely limited natural supplies were raided almost to the point of exhaustion.

With the post-war resumption of importation of minerals of this kind, producers naturally began a fight for a protective tariff, and the question is yet unsettled. The tariff, if enacted, would in most cases have to be a high one in order to permit the use of domestic supplies. The results would be a large increase in cost to other industries, decreased efficiency, and the early exhaustion of limited supplies in this country. Most of the mineral resources have been concentrated by nature in a comparatively few places in the world; and when the two elements of conservation are considered—the materials themselves and the human energy expended in obtaining and using them—it is clear that any measure which interferes with the natural distribution of the favored ores is anti-conservational from the world standpoint.

CONSERVATION OF COAL

In the sections on mineral resources, there are many casual references to conservation of specific minerals. Here we shall not go further than to introduce a brief discussion of the conservation of coal as illustrative of the general problem of conservation of mineral resources.

It has been estimated that the United States possesses, to a depth of 3,000 feet, in beds 14 inches or over, 3,538,554,000,000 tons of coal, and an additional reserve between 3,000 and 6,000 feet of 666,600,000,000 tons.[42] If all the unmined coal to a depth of 3,000 feet could be placed in one great cubic pile, the pile would be 18 miles long, 18 miles wide, and 18 miles high. Of the original amount of coal to this depth only about 0.4 of 1 per cent has been mined or wasted in mining. The wastage is estimated at about 50 per cent. If the annual production of coal were to remain the same as in recent years, the total life of the coal reserves (to a depth of 3,000 feet) would be between 4,000 and 6,000 years; but if the acceleration of production of recent years were to be maintained in the future, the life would be but little over 100 years, and the life of the highest-grade coal now being mined might not be over 50 years. All agree that the acceleration of production is not likely to continue indefinitely, which will mean that the life of coal reserves to 3,000 feet will be somewhere between the two extremes named. It seems clear that actual shortage of coal will not be felt for some hundreds of years; but this period of years is short as compared with the probable life of the race.

MEASURES INTRODUCED OR PROPOSED TO CONSERVE COAL

The following list of measures for conservation of coal is taken from several sources. The exhaustive report of the British Coal Commission,[43] published in 1905, contains a considerable number of specific recommendations for conservation of the coal of Great Britain. The reports of the National Conservation Commission[44] of the United States, published in 1909, treat of the conservation of the coal of the United States and naturally follow some of the recommendations of the British report. The coal section of the National Conservation report was prepared by M. R. Campbell and E. W. Parker of the U. S. Geological Survey, and is contained in U. S. Geological Survey Bulletin 394. The recommendations there given are amplified and developed by Van Hise[45] in his book on Conservation, published in 1910. Since that time the subject has been discussed by Smith, Chance, Burrows, Haas,[46] and others, and certain additional conservational methods have been proposed. A considerable number of men have also discussed the sociologic and economic aspects of the question. The report of the Conservation Commission of Canada,[47] published in 1915, treats rather fully of the conservation of mineral resources.

It will suit our purpose, and avoid some repetition, if we group most of these recommendations without regard to authorship. In general, these recommendations can be grouped under the heads: (A) Methods of mining and preparation of coal; (B) Improvement of labor and living conditions at the mines; (C) Introduction or modification of laws to regulate or to remove certain restrictions on the coal industry; (D) Distribution and transportation of coal; (E) Utilization of coal; (F) Substitutes for coal as a source of power.

(A) Mining and preparation of coal. Under this heading may be included a large number of proposals which concern primarily the engineering treatment of the coal underground and in the mine plants. Some of the more important measures are:

1. Introduction of the long-wall system of mining in places where the conditions allow it, in order to minimize the waste underground.

2. Modification of the room-and-pillar system of mining, by which larger pillars are left while the mine advances, and are recovered in the retreat,—thereby recovering a larger percentage of coal than under the old system, where small, thin pillars were left, which failed and were permanently lost.

It has been argued that the great loss of coal by leaving it in pillars could be saved by using other material to support the roof; but an elementary calculation of the cost of this procedure shows that it is cheaper to use the coal. Chance[48] says:

The coal left as pillars to support the roof is thus utilized and performs a necessary and useful function, yet the principal part (perhaps two-thirds) of the 200,000,000 tons our friends the conservationists claim is wilfully and avoidably wasted every year is this coal that is left in pillars to support the roof. I think we can safely claim that this is not waste, but, on the contrary, is engineering efficiency of the highest type, in that it utilizes the cheapest and least valuable material available to support the roof and saves the whole labor cost of building supports of other materials. Investigation as to what becomes of that part of the 200,000,000 tons claimed as wasted, which is not utilized as pillars to support the roof, will disclose the fact that a very large portion is coal that is left in mine workings that are abandoned because the roof is unsafe and because a continuance of operation would result in injuries or loss of life. Coal left in the mines in order to conserve human lives cannot be classed as avoidable waste. A small part of the 200,000,000 tons is lost because it is intimately mixed with refuse and because the labor cost of recovering it and separating it from the refuse would be greater than its value.

3. Mining of shallow bituminous beds by means of the steam shovel. Progress has been made along this line in the last few years, and valuable deposits are thus mined which can be mined profitably by no other method.

4. New methods of filling mined-out spaces with sand, and new methods of mine survey and design. According to Haas[49]

the greatest advance in the question of method was the system of mine survey and design perfected in both the anthracite and bituminous fields. The relatively new method of filling old spaces with sand, etc., has also achieved success.

5. Use of methods by which coal is not left in the roof for the support where the roof is weak, and by which coal of inferior quality is not left in the roof.

6. Wider use of coal-cutting machines by which the wasting of thinner beds may be avoided.

7. Where conditions allow it, the working of the upper beds before the lower, in order not to destroy the upper ones by caving. The mining of a lower coal seam has often so broken up the overlying strata as to render it impossible to recover the upper coal seams contained therein. There are certain difficulties, however, in the way of this conservational measure. In some localities the seams are under separate ownership, and there is a resulting conflict of interests. Also, if the better coal seam happens to be below and the poorer seams above, market conditions may require that the lower seam be mined regardless of the destruction of the upper ones.

8. Elimination of coal barriers to mark the limits between properties. This involves more cooperation.

9. Improvement of mining machinery, power drills, etc.

10. Centralization of power stations, rather than the use of many small units.

11. Elimination of the wasting of slack or fine coal, through more careful methods of mining, through limitations on the excessive use of powder and larger use of wedges, through the abolition of laws for the payment of miners on a run-of-mine basis, and in the case of anthracite through recovery of the "silt" or dust caused by mining and sorting. It has been argued that the excessive use of powder ("shooting from the solid") means loss of coal, owing to the fact that it shatters the coal and makes a relatively large amount of slack, besides being accompanied by increased danger from fire and explosion and from weakening of the roof. Although the excessive use of powder makes a large amount of slack, it does not necessarily result in waste, for this fine coal is carefully saved and for certain purposes is as valuable as the lump coal. So far as the procedure endangers life, it is of course objectionable.

12. Better use of fine coal. It has been recommended that infirm and finely broken coal be washed and compressed, thus avoiding the wasting of slack coal, which was formerly thrown away or burned. However, in recent years there has been comparatively little waste of this kind, for slack coal in general finds nearly as ready a market as lump coal and the use of slack is increasing. There has been much discussion also of the possibilities of using the coal waste on the ground to make power for electric transmission.

13. More careful attention to sorting and sizing of all grades of coal coming from the mine and to preparation of coals for special uses. On the other hand, some operators say that the ends of conservation will be best met by limiting the sorting and sizing now practiced. The large number of sizes now put on the market greatly increases the cost of production.

14. Wider use of the lower-grade fuels of the west, particularly with the aid of briquetting.

Progress in above methods. Methods of mining and preparation of coal have been improved. Campbell and Parker state:[50]

A much greater proportion of the product hoisted is now being sent to market in merchantable condition. Part of this is due to better and more systematic methods of handling, and part to the saving of small sizes which formerly went to the culm banks. The higher prices of coal and the development of methods for using these small sizes have also made it possible, through washing processes, to rework the small coal formerly thrown on the culm banks, and these are now furnishing several millions of tons of marketable coal annually.

In general there is increase in the percentage of recovery of coal. Whereas in the past the loss in mining was said by Campbell and Parker[51] to average 50 per cent, now an extraction of 70 to 90 per cent may be looked for.

Quoting from Smith and Lesher:[52]

Observation of the advances made in mining methods in the last decade or two affords slight warrant for belief in any charge of wasteful operation. As consumers of coal we might do well to imitate the economy now enforced by the producers in their engineering practice. In the northern anthracite field machine mining in extracting coal from 22- and 24-inch beds, and throughout the anthracite region the average recovery of coal in mining is 65 per cent., as against 40 per cent. only twenty years ago. Nor are the bituminous operators any less progressive in their conservation of the coal they mine.

In anthracite mining, powdered coal or "silt" has accumulated in stockpiles and in stream channels to many tens of millions of tons. It is estimated that this constitutes nearly 6 per cent of the coal mined. Significant progress has been made recently in the recovery and use of this silt as powdered fuel for local power purposes.

However, physical and commercial conditions do not in all cases allow of the full application of these new methods. Once a mine has been opened up on a certain plan, it is difficult to change it. As a whole the longer and better organized companies are better able to change than the smaller companies.

Conservation measures of the above kinds, as so far applied, have come mainly from private initiative based on self-interest,—though the cooperation of the government has been effective, particularly along educational and publicity lines.

(B) Improvement of labor and living conditions at the mines. Under this heading should be mentioned the improvement of housing, sanitation, and living conditions; improvements in the efficiency of labor, through making living conditions such as to attract a higher-grade labor supply and through educational means; the introduction of safety methods; the introduction of workmen's compensation and insurance; and other measures of a similar nature. All these measures as a class are sometimes grouped under the name of "welfare work."

Much thought and discussion have been devoted to the possibilities of improvement of labor and living conditions from the standpoint of conservation of human energy. In some quarters this subject has been treated as being independent of the physical conservation of mineral resources, and it has been the tendency to assume that conservation of human energy might be more or less inimical to conservation of mineral resources. Certain of the changes already introduced have undoubtedly increased the cost of mining; and, until there was a general increase in selling price, this increased cost may have had the effect of eliminating certain practices of mineral conservation which might otherwise have been possible. For instance, according to Smith and Lesher:[53]

The increased safety in the coal mines that has come through the combined efforts of the coal companies, the state inspectors, and the Federal Bureau of Mines necessarily involves some increase in cost of operation, but the few cents per ton thus added to the cost is a small price to pay for the satisfaction of having the stain of blood removed from the coal we buy. That form of social insurance which is now enforced through the workmen's compensation laws alone adds from 2 to 5 cents a ton to the cost of coal.

On the other hand, there can be no doubt that large advances have been made in welfare movements which were introduced for the purpose of insuring a steadier, better, and larger supply of labor, and that the general gain in efficiency of operation thereby obtained has absorbed a large part of the increased cost.

In general, conservation measures of this class have been developed cooperatively by private and public efforts, without important sacrifice of private interest. There is obviously room for much wider application of such measures, especially in some of the bituminous fields where conditions are still far from satisfactory.

(C) Introduction or modification of laws to regulate or to remove certain restrictions on the coal industry. It has been proposed:

1. To modify the laws so as to take care of situations where vertically superposed beds are owned by different parties, preventing the proper mining of the coal by either party.

2. To modify the laws so as to eliminate conflict in mining practice in cases where the coal is associated with oil and gas pools.

3. To allow larger ownership by companies utilizing the coal (now only 3 per cent owned by such companies).

4. To place restrictions on over-capitalization, which leads to wasteful mining in order to secure quick and large returns on large capital.

5. To remove restrictions on concentration of control. This means, as a corollary proposition, virtual restriction of competition. Concentration of control into comparatively few hands has undoubtedly favored conservation. It is easy to see that the stronger financial condition of the large companies makes it possible for them to take fuller advantage of modern methods of extraction, distribution, and marketing.

This proposal was especially urged for the bituminous coal industry before the war in order to avoid over-production and over-development. The very wide distribution of the bituminous coals, their enormous quantity, and their exceedingly diversified ownership had led to over-development of coal properties. Quoting from Smith and Lesher:[54]

In estimating the aggregate losses incurred by society by reason of the large number of mines not working at full capacity, the facts to be considered are that the capital invested in mine equipment asks a wage based on a year of 365 days of 24 hours, while labor's year averaged last year only 230 days in the anthracite mines and only 203 days in the bituminous mines, with only five to eight hours to the day.

These conditions prevented in some cases even the most modest introduction of better methods, or of changes that would enhance the average profits through a relatively short period of ten or fifteen years at the expense of the present year. It was necessary to get at the best of the coal available in the cheapest possible way, regardless of the losses of coal left in the ground.

To some extent the force of this argument was minimized by war and post-war conditions, but even yet development of coal mines is ahead of transportation and distribution.

6. To allow cooperation in the limitation of output, in the avoidance of cross freights, in gauging the market in advance, and in division of territory, all of which would allow cheaper mining and thus give larger leeway to conservational measures. This necessarily would be accompanied by government regulation. According to Van Hise,[55] who was active before the war in advocating this conservational measure, such a procedure

is neither regulated competition, nor regulated monopoly; but the retention of competition, the prohibition of monopoly, permission for cooperation and regulation of the latter. In Chicago there cannot be one selling agency for the different coal companies which operate in Illinois, but there must be many selling agencies, and the coal of Pittsburgh must come into Illinois and the Illinois coal go toward Pittsburgh; every one of which things makes unnecessary costs, but all of which are inevitable under the extreme competitive system. Because of these facts it is necessary to waste the coal. If at the very same prices the different mines could cooperate in the limitation of the output, avoidance of cross freights, gauging the market in advance, and division of territory, they could mine their coal more cheaply, have a greater profit for themselves and conserve our resources.

To some extent the plan here advocated was put into effect during the war by the United States Coal Administration; but the conditions of this trial were so complicated by special war requirements, that the conservational advantages of unified control were not demonstrated.

7. To reduce the excessive royalties paid to fee owners. Smith and Lesher[56] have recently called attention to the relatively high resource cost in some of the coal fields, represented by the payment of royalties to fee owners. In the case of anthracite the payment averages 32 to 35 cents per ton, and exceptionally runs as high as a dollar per ton. For the bituminous coal the average resource cost is probably not much over five cents a ton. They suggest the possibility of lowering this cost by governmental regulation; and make an especially strong argument for not allowing the government-owned coal lands to go to private owners, who in the future, with the accumulation of interest on the investment, will feel justified in asking for a large "resource" return in the way of royalty.

If the resource cost could be lowered, further introduction of conservational methods by the operators would be possible without greatly increasing the cost to the public.

8. To require or allow, by government regulation, a raising of the price of coal to the consumer, thereby allowing wider application of conservational practices. Some of the increased recoveries of coal above noted have been made possible only by increase in the market price. If cooperation were permitted in the manner described in paragraph 6, the same results might be accomplished without increasing the price. Recent high prices caused by the war situation are reflected in the introduction of many conservational changes which were not before possible. However, in some cases the demand for quick results under present conditions has an opposite effect, because of the desire to realize quick profits regardless of conservation.

9. The local conservation of coal at the expense of heavier drafts on coal of other parts of the world, by imposition of export taxes and preferential duties, has been discussed. While the effect of such a measure would doubtless be conservational from the standpoint of the United States, it is doubtful if it could be so regarded from the broader standpoint of world civilization. Under present world conditions such a step would be disastrous.

10. Government ownership has been proposed as a means of facilitating the introduction of conservation measures. In the United States there is yet no major movement in this direction. In England the question of nationalization of coal mines is an extremely live political problem (see pp. 343, 345-347).

Little progress has been made in conservation measures which involve legal enactments of the kinds above listed.

(D) Distribution, and transportation of coal. It has been argued that conservational results would ensue from:

1. Cheaper transportation.

2. Larger use of waterways.

3. Improvement in distribution of the product by partition of the market and by larger use of local coals. For effectiveness this proposition would have to include control of the agencies of distribution, in order to minimize excessive profits of middlemen.

4. Purchasing and storage of coal by consumers during the spring and summer months in anticipation of the winter requirements, in order to equalize the present highly fluctuating seasonal demands on the mines and railroads, and to eliminate the recurring shortages of coal in the winter months. This was particularly recommended by the United States Bituminous Coal Commission in a recent report.[57]

5. Where conditions allow it, conversion of coal into power at the mine and delivery of power rather than coal to consuming centers. This type of conservation is being put into practice on a large scale above Wheeling, on the Ohio River, where there has recently been built a two hundred thousand kilowatt installation for steam-generated electric power. Some of the power will be delivered to Canton, Ohio, over fifty miles away. This plant uses local coal and the cost of coal is figured at two mills per kilowatt-hour.

Under this heading of distribution and transportation of coal, might be considered certain international relations. The international movements of coal are summarized in another place (pp. 115-117). Anything in the way of tariffs or trade agreements which would tend to interfere with or to limit the great natural international movements of coal—which in a free field are based on suitability of grade, cost, location, transportation, etc.—would be anti-conservational from the world's standpoint, although they might be of local and temporary advantage. For instance, the coal exported from England, which has heretofore dominated the international trade of the world, is of a high grade. American coal available for export is on the whole of considerably lower grade, being higher in volatile matter. Unless this coal is beneficiated at home, it can replace the English coal in the export field only at increased cost of transportation and lower efficiency in use. The time may come when it will be desirable to ship lower-grade coals long distances; but when the two factors of conservation are considered—the intrinsic qualities of the coal, and the efforts necessary to utilize it—it would seem to be conservational at this stage to ship to long distances only the coal which nature seems specially to have prepared for this purpose.

(E) Utilization of coal. Conservational proposals of this kind are:

1. Substitution of retort coke-ovens for beehive ovens, to save not only a larger quantity of coke but also valuable by-products (see pp. 118-119). Additional improvements in coking ovens may make possible the manufacture of some sort of coke from a much wider range of bituminous coals than can be used at present.

2. Larger use of smoke consumers and mechanical stokers.

3. Larger use of central heating plants, with higher efficiency than many local plants.

4. Substitution of gas engines for steam engines, and improvement of the steam engine.

5. Improvement in methods of smelting, leading to larger output of metal per ton of coke used. Also the development of electric smelting for certain metals.

6. More careful study and classification of the qualities of coals, in order to avoid use of higher-grade coals where inferior coals would serve the purpose.

7. More consumption at the collieries.

8. Larger use of powdered coal as fuel.

9. Improvement of force-draft furnaces.

10. Larger use of gas, a by-product of coal mining, and extraction of other by-products.

11. More efficient transformation of peat and coal into power and light.

12. The possible use of oil flotation to eliminate foreign mineral matter.

Most of the conservation measures above proposed have already been applied with good results, and with promise of large results for the future. The stimulus has come largely from self-interest. War conditions in some ways aided and in others hindered these developments. One of the conspicuous gains was the building of many by-product coke plants, under the necessity of securing the nitrates and hydrocarbons for munition and other purposes.

(F) Substitutes for coal as a source of power. Some of the more prominent measures along this line which have been discussed are:

1. Larger use of water power. This has sometimes been popularly assumed to be, at least potentially, a complete solution of the problem; but nevertheless it has its distinct limitations.

Water power has the advantages that its sources are not exhausted by use, and that the relatively greater initial cost of a hydro-electric plant is frequently more than compensated for by the saving in man power required and by the lower operating expense. However, the total amount of water power which can be developed on a commercial basis is rather closely limited, and much of the available power is so distributed geographically that it cannot be economically supplied to the industries which need it. Of the total water-power resources of the United States which have been estimated by the Geological Survey to be available for ultimate development, over 70 per cent is west of the Mississippi,—whereas over 70 per cent of the horse-power now installed in prime movers is east of the Mississippi. Electric power cannot at present be economically transmitted more than a few hundred miles. Furthermore, for many uses of coal, as in metallurgical and chemical processes which require the heat or reducing action of burning coal, and in its use as fuel for ships, hydro-electric power cannot be substituted. It seems clear that while the use of water power will increase, particularly as rising prices of coal make possible the development of new sites, it can never take the place of the mineral fuels in any large proportion.

For the immediate future, measures which have been suggested to extend the use of water power include: the more complete utilization of water powers already in use through more efficient machinery and methods; a certain degree of redistribution of industries, so that those requiring large amounts of power may be located in areas where water power is cheap and abundant; and the interconnection of hydro-electric plants so that their full capacity may be used. Some water powers which have been developed are not being fully utilized because the plants are not connected with distribution systems large enough to use all the power. During the war the United States Geological Survey, in cooperation with the Fuel Administration and the War Industries Board, collected the information required to prepare maps showing the locations and relations of power stations and transmission lines throughout the country. This survey of the situation showed many possibilities, which had before been but vaguely realized, of interconnections which would increase the efficiency of the plants.

2. Substitution of lower-grade coals—of bituminous for anthracite, and of low-grade bituminous for high-grade bituminous coals. Larger use of low-grade western coals. War and post-war conditions have shown Germany the way to a wide and effective use of its lignites. This has been accomplished by cooperation of the government and private interests. This vast improvement in methods of treatment and recovery of heating elements and by-products will doubtless have a widespread effect on utilization of lignites in other parts of the world.

3. Substitution of alcohol and natural gas, oil, oil shales, peats, etc., as a source of power. This merely concentrates the conservation problem more largely on these minerals, in some of which, at least, it is already considerably more acute than in the case of coal; it is not a solution of the problem, but merely a shifting of emphasis.

Business conditions have limited private enterprise in this class of measures, but some progress has been made. More rapid introduction of these measures would require sacrifice of private interest and probably may be accomplished only by application of public power.

DIVISION OF RESPONSIBILITY BETWEEN GOVERNMENT AND PRIVATE INTERESTS IN THE CONSERVATION OF COAL

A review of the conservation measures above listed indicates that many of them are already in operation, and that the initiative for such measures has been largely supplied by private ownership endeavoring to advance its own interest. In this category are to be included most of the improvements in physical methods of mining, preparation, and utilization of coal, the use of substitutes for coal, the concentration of control into larger groups better able to introduce new methods, and the improvement of labor and living conditions; also, under recent conditions, the increase in selling price, allowing for a wider application of these measures. Another group of conservation proposals, which have not yet been put into substantial effect, are obviously beyond the power of private interests; and must be introduced, if at all, by the application of government power. These include the elimination of resource or royalty costs, the control of over-capitalization, the removal of restrictions on concentration of control, the granting of permission for cooperation among competitive units, the regulation of selling price minimums in order to insure during normal times the use of better physical practices, and the control of distribution. In short, it appears that there are two great spheres of conservational activity—one within the field of private endeavor, and the other possible only by collective action through the government. The principal advances thus far made have been in the field of private endeavor.

The government has aided greatly in the advancement of conservation measures arising within the field of private endeavor. One need only refer to many governmental investigations, to the spreading of information as to best methods, and to local compulsory requirements that the best practices be made uniform and that backward interests thereby be brought into line.

Recognition of the fact that there is a large body of sound conservational practice in the coal industry which falls within the range of self-interest seems essential in planning further changes in the direction of conservation. Conservational measures do not all require sacrifice of the individual to the public, nor of the present to the future generations. An exercise of public power is not in all cases essential to the advancement of conservation. The respective limits of the fields of public and private endeavor are not sharply defined, and vary from place to place and time to time, depending upon local conditions and special requirements.

In general, the sphere of private interest includes measures which will bring adequate commercial return. The interest rate is the limiting and controlling factor. When it is possible—by improvement of methods of mining, better planning, better preparation of coal, better transportation and distribution, or better utilization—to secure a larger average return on the investment, or to insure return through a longer period of years, self-interest naturally requires the introduction of such methods as rapidly as financial conditions allow. Even some of the improvements in labor and welfare conditions have been introduced in this way, with a view to securing a more permanent and more efficient labor supply, and thereby aiding the enterprise from the commercial standpoint.

Within the sphere of government activity lie the removal of unnecessary restrictions on private initiative, and such conservation measures as involve some sacrifice of individual returns—in other words, a reduction of the normal interest rate. Exercise of government power may be directly helpful within the field of private endeavor without materially sacrificing private interests; but beyond this point there are additional large possibilities of conservational activity which are clearly beyond the control of private interests. The introduction of any of these latter changes would evidently be so far-reaching in effect, and would require such broad readjustments not only within but without the mineral industry, that the necessity or desirability is not in all cases so clear as in the case of measures already introduced for private interest.

The most obviously helpful step possible to the government in the immediate future is to permit cooperative arrangements under private ownership,—which would make it possible to use common selling agencies, thereby reducing the cost of selling; to divide the territory to be served, thereby avoiding excessive cross freights; and to allot the output in proportion to the demand from various territories, thus eliminating excessive competition and over-production. All of these measures could be accomplished without detriment to the public if properly regulated by the government. The very large saving possible by this means would allow the introduction of conservational methods at the mines without raising the cost to the public.

War conditions required even more immediate and sweeping application of government power than above indicated, but conservational purposes were quite overshadowed by other considerations.

Where the mineral resources are already owned by the government, or can be acquired by the government, some of the troublesome factors in the problem are removed. In such cases it is possible to work out an intelligent plan for government control without the difficulties which arise in dealing with private ownership,—although, of course, new difficulties are introduced (see also pp. 345-347.)

The fact that there are conservational measures possible only to governments has been widely used as an argument for introducing government ownership or control. Recent vigorous demands for the nationalization of natural resources in Europe, and the increasing discussion of the subject in this country, may be regarded as phases of the conservation problem. It is not the purpose here to argue either for or against the drastic exercise of government power in the conservation of natural resources, but merely to call attention to the measures which are being discussed.

CONSERVATION OF MINERALS OTHER THAN COAL

The discussion of conservation as applied to specific minerals might be extended almost indefinitely; but perhaps enough has been said to indicate the general nature of the field. Before the war careful estimates of world supplies had been made for comparatively few minerals, although these included some of the most important, such as coal, oil, and iron. War conditions required a hasty estimate of world reserves of most of the mineral products. The reader interested in the problem will find an extremely interesting body of literature issued by the various governments on this subject. Of especial interest to the American reader will be the reports of the U. S. Geological Survey and of the Bureau of Mines.

In recent years there has been increasing recognition of the possibilities of conservational saving by concentration, refinement, and even manufacture of mineral commodities at or near the point of origin,—thus lessening the tonnage involved in transportation of the crude products. Limitations of fuel and other conditions often make this procedure difficult; but considerable progress is being made both through private initiative and, especially in international trade, through governmental regulations of great variety.

FOOTNOTES:

[42] Campbell, M. R., The coal fields of the United States: Prof. Paper 100-A, U. S. Geol. Survey, 1917, p. 24.

[43] Final report of the Royal Commission on coal supplies: House of Commons, London, vol. 16, 1905.

[44] Report of the National Conservation Commission: Senate Document No. 676, 60th Congress, 2d session, Govt. Printing Office, Washington, 1909.

[45] Van Hise, C. R., The conservation of natural resources in the United States: Macmillan Co., New York, 1910.

[46] Haas, Frank, The conservation of coal through the employment of better methods of mining: Abstract of paper presented to Pan-American Scientific Congress, Washington, Dec., 1915-Jan., 1916.

[47] Adams, Frank D., Our mineral resources and the problem of their proper conservation: 6th Ann. Rept., Commission of Conservation, Canada, 1915, pp. 52-69.

[48] Chance, H. M., Address before the mine engineering class of the Pennsylvania State College, Quoted by F. W. Gray, The conservation of coal: Bull. 47, Can. Mining Inst., 1916, p. 201.

[49] Loc. cit.

[50] Campbell, M. R., and Parker, E. W., Coal fields of the United States, Papers on the conservation of mineral resources: Bull. 394, U. S. Geol. Survey, 1909, p. 12.

[51] Loc. cit. p. 12.

[52] Smith, George Otis, and Lesher, C. E., The cost of coal: Science, vol. 44, 1916, p. 768.

[53] Loc cit., pp. 768-769.

[54] Loc. cit., p. 771.

[55] Van Hise, Charles R., Cooperation in industry, pp. 7-8, Address given before annual meeting of the National Lumber Manufacturers' Association, Chicago, Illinois, May 31, 1916.

[56] Loc. cit., p. 767.

[57] Stabilization of the bituminous coal industry, Extracts from the award and recommendations of the United States Bituminous Coal Commission, Government Printing Office, Washington, 1920.



CHAPTER XVIII

INTERNATIONAL ASPECTS OF MINERAL RESOURCES

WORLD MOVEMENT OF MINERALS

Of the annual world production of minerals about two-thirds are used within the countries where the minerals are produced and one-third is shipped to other countries. In this chapter we are concerned primarily with the part which moves between countries. It may be assumed that the consumption within the countries of origin is a matter of national rather than international concern.

In pre-war times minerals constituted about 33 per cent[58] of the value of the total foreign trade of the United States, and 28 per cent of the foreign trade of Germany. Figures are not available to show the proportion of mineral tonnage to that of other commodities.

One of the several interesting facts in this world movement of minerals is that the movement of most of them shows a rather remarkable concentration. For instance, manganese moves from three principal sources to four or five consuming centers. Chromite moves from two principal sources; tungsten also from two. Even for certain commodities which are widely distributed and move in large amounts, the concentration of movement is rather marked; for instance, the world movement of coal is controlled by England, the United States, and Germany. In other words, although the world movement of mineral commodities is widespread and exhibits many complex features, most of the individual minerals follow two or three salient lines of movement. This means in general that for each mineral there are certain sources of limited geographic extent, which, because of location, grade, relation to transportation, cost—in short, all the factors that enter into availability—are drawn upon heavily for the world's chief demands. The convergence of these materials toward a few consuming centers indicates generally concentration of coal production necessary to smelting, high development of manufacturing, large per capita use, concentration of facilities, strong financial control, and, not least, a large element of enterprise which has taken advantage of more or less favorable conditions.

If a nation were fully supplied with mineral resources, without excess, the mineral problem might be almost exclusively domestic in its nature. But no country is so situated. For most of the mineral products the dominant supply is likely to be controlled by one or two nations, the other nations being correspondingly deficient and dependent. Even the United States, which is more nearly self-sustaining in mineral resources than any other country, is almost wholly dependent on other countries for certain mineral supplies; and in the case of minerals of which it has an excess it is dependent on other countries for markets. The view that the mineral resource problem is solely a local and national one, of no concern to outsiders, ignores this fundamental fact of distribution of raw materials.

Control of smelting facilities makes it possible for certain countries to exercise considerable influence over the production and distribution of minerals in other countries, and thus presents many difficult international questions. Even more difficult are the international problems created by the commercial ownership and control of minerals in the ground by nationals of other countries.

The national and international aspects of mineral resources are difficult to separate, so intimately do they react on each other. To some extent there may be conflict of interest between the two, but in the main the international questions may be logically approached from the standpoint of national self-interest; for, in the conduct of the national industry along broad and enlightened lines, world conditions must necessarily be considered. A clearer comprehension of the world mineral relations, and an understanding of our own opportunities and limitations in comparison with those of our neighbors, cannot but eliminate some of the unnecessary handicaps to the best use of the world mineral resources, and result in a lessening of causes of international discord.

A brief survey of the mineral conditions preceding, during, and following the war may serve as a convenient means of approach to a study of the present international aspects of the mineral problem.

MOVEMENT OF MINERALS UNDER PRE-WAR CONDITIONS OF INTERNATIONAL TRADE

If the world pre-war movement of minerals is considered broadly, it may be regarded as conforming essentially to normal trade conditions of supply and demand. There have been barriers to overcome, such as tariffs and trade controls and monopolies of various kinds, but these barriers have not prevented the major movements between the best sources of supply and the principal consuming centers. These movements may be regarded as a more or less spontaneous internationalization of mineral resources by private enterprise. The aim of free trade or unrestricted commerce was equality of trade opportunities; but such conditions of unrestricted competition tended to concentrate trade in the hands of the strongest interests and to prevent equality of opportunity.

The efforts made to promote or hinder international mineral movements by tariffs, bonuses, embargoes, subsidies, transport control, patents, government management, financial pressure, and other means have been incited mainly by national or imperial self-interest, and have thus been to some extent inimical to an internationalization based on the principle of the greatest good to the greatest number. It may be supposed that, in any effort to attain supernational or international control, motives and measures based on national self-interest of the sort here mentioned will continue to play an important part.

CHANGES DURING THE WAR

The war wrought fundamental changes in the world movement of minerals. The character and distribution of the demands changed. Customary sources of supply were cut off. Financial disturbances and ship shortage profoundly modified the nature, distribution, and extent of the world movement. Our domestic mineral industry was abruptly brought to a realization of its vital relations with international trade. To illustrate, the large movement of manganese from India and Russia to the United States was abruptly stopped, and we had to develop a source of supply in Brazil. The stoppage of pyrite importations from Spain as a means of saving ships required the development of pyrite and sulphur supplies in the United States. The export of oil from the United States to European countries was greatly stimulated, and the export to other countries was correspondingly decreased. The world movements of coal were vitally affected, principally by the limitation of the coal shipments from England and the United States to South America and the concentration of shipments to European countries. The closing of German coal supplies to nearby countries also had far-reaching consequences. The cutting off of the German potash left the world for the time being almost unsupplied with this vital fertilizing ingredient. The Chilean nitrates, on which the world had relied for fertilizer purposes, were diverted almost exclusively to the manufacture of powder. The total annual imports of mineral commodities into the United States were reduced by 1,200,000 tons. Our exports, though they continued in large volume, were mainly concentrated in Europe. The story of these disturbances in the world movement of minerals, though highly interesting, is too long to be told here.

Out of these sweeping and rapid changes in the world movement of mineral commodities there arose, partly as cause and partly as effect, international agreements for the allocation of minerals, as a means of insuring the proper proportions of supplies to the different countries for the most effective prosecution of the war. Inter-Allied purchasing committees in London and in Paris found it necessary to make an inter-Allied allocation of the output of Chilean nitrate, because the sum of the demands exceeded the total supply by a considerable fraction, and to agree on the distribution and prices of the world's supplies of tin, tungsten, and platinum. For many other commodities agreements of various sorts were made. For instance, the United States entered into an agreement with England and France for the purchase of iron ore and molybdenum from Scandinavia to keep it out of Germany. The United States and England agreed as to supplying Canada with ferromanganese. New problems of world allocation came up almost daily.

Another war change in mineral conditions, of a more permanent nature, was the liquidation of German ownership and control of minerals in allied countries, and in some cases even in neutral countries.

POST-WAR CONDITION OF THE MINERAL TRADE

The mineral industry has by no means reverted to its pre-war condition. The old movements have been only partially resumed, and new elements have entered. Shipping is still disturbed. Governments have been cooperating in various ways in the liquidation of government stocks of minerals. The German commercial control of minerals outside of its boundaries, as noted above, has been much weakened. The Reparations Committee created by the Peace Treaty has enormous powers over the use and distribution of the mineral resources of Germany, which directly and indirectly affect the mineral supplies of Europe and all the world. The terms of the Peace Treaty changed in fundamental ways the international channels of mineral movement.

The mineral situation of Europe is in such a state of chaos that the combined efforts of governments will be necessary for many years to bring order. This will be accomplished partly through the Reparations Committee, but may require other forms of cooperation. An international coal commission has already been formed to look after the distribution of coal through Europe. International cooperation in mineral distribution is not merely a theoretical possibility for the future,—it is now the outstanding fact with reference to the European situation.

The recognition of their dependence on neighbors for important mineral resources has led to earnest efforts on the part of nations to supply deficiencies. The great activity of the British government in acquiring oil is one example. The falling off of gold production the world over, together with the increased disparity between gold reserves and the currency issued against them, is causing serious consideration of government action to encourage the gold industry by financial measures tending to increase the profit of the miners (see pp. 224-225).

Before and since the war most countries of the globe, outside of England and the United States, have gone far in the exercise of the right of eminent domain over mineral resources within their own boundaries. Even in England the recent movement to nationalize the coal and oil resources is an indication of the general tendency. In the United States the movement has manifested itself thus far only in the increasing reluctance on the part of the government to part with mineral resources on the public domain,—as is clear from the terms of its new leasing law to cover oil, coal, gas, potash, and phosphates on public lands.

Before the war only the German government was clearly identified with private interests in international trade and in the acquirement of mineral reserves. Since the war all governments except that of the United States are taking an active part in these fields, both directly and in cooperation with private capital. The British government has taken a direct financial interest in certain companies, such for instance as the Anglo-Persian and Shell Oil Companies, and in some cases is actively interested in the acquirement of selling contracts. In England there is a wider use of voting trusts in controlling private companies, with the purpose of preventing the control from falling into alien hands. Government control of shipping in certain countries is involving various degrees of control of mineral movements. Also, through loans and bonds, mineral resources in certain countries have been tied up by the loaning governments. There has been wide extension of government control of minerals in mandatory territories and elsewhere through many new loans and regulations. These steps are in effect closing important parts of the world to private initiative, and particularly to nationals of other countries. Whether these activities of governments are economically desirable or not, they are the actual conditions, not theories.

If this situation continues, it raises the question whether our government will not be forced, in protection of its own mineral industries, also to take a direct part; for under present conditions, our importers and exporters find themselves dealing single-handed with governments or with private groups so closely identified with governments as to have much the same power. In matters of shipping, credits, exchange, tariffs, embargoes, and opportunity to acquire foreign reserves, the actual and potential disadvantage to American interests is obvious.

TENDENCIES TOWARD INTERNATIONAL COOPERATION AND POSSIBILITY OF INTERNATIONAL CONTROL[59] OF MINERALS

Under the pre-war conditions, unrestricted competition in world trade by private enterprise had led to a certain kind of internationalization of mineral deposits based on natural conditions of availability. There is a natural tendency to work back as quickly as possible to this condition, but new elements have entered which seem to make it difficult for governments to keep their hands off. The participation of governments in world mineral trade, when not modified by international cooperation or some other higher form of control, seems to be having a tendency in the opposite direction—to be closing the doors of equal opportunity and preventing the natural world use of the world's resources.

These new conditions, together with others outlined in the preceding section, have made it necessary to pay more attention to the possibilities of international cooperation than ever before,—not as a restrictive measure, except temporarily in regard to the Central European powers,—but as a means of insuring open channels of movement for raw materials, and of insuring equal economic opportunities to all. Many of our mineral industries have already appealed to our government for cooperation and aid in their international dealings. Further, mineral industries in private hands in the various Allied countries have attempted to get together to arrange for private cooperation, and appealed to the Peace Conference for authority to do so. In certain cases the necessity for cooperative action became so apparent that pressure was brought to bear on the Peace Conference for the forming of some sort of international economic body which would make possible some of these steps. These movements were all dictated by considerations of self-interest, but self-interest broadened and educated by a knowledge of the world's situation.

Just as the increasing size of the units engaged in the mineral trade within national boundaries has led to discussion of the possibilities of government control in the interest of the public, so the increasing size of the units in the international mineral trade, the units in many cases being governments, is leading to discussion of the possibility of some international or supernational control in the interest of the world good. Just as national interest is the lengthened shadow of individual interest, so international interest may be regarded in some aspects as the lengthened shadow of national interest.

The general purpose of the suggested control is to minimize international friction; but more specifically it has been suggested that some sort of international cooperation is necessary in order to insure equality of opportunity among nations, both in supplies and in markets, and thereby to prevent the crowding of the weaker by the stronger nations. This is the gist of one of the famous fourteen points. The purpose might be accomplished by direct allocation of supplies or by control of tariffs and exchange.

One of the conditions which seems to require international cooperation is the exploitation of mineral deposits in backward countries. Unrestricted competition among nations in such exploitation has been an important cause of international controversy. It was planned at Peace Conference that the mineral resources in countries taken over by the great powers under mandatories should be developed and used in the interest of the group of nations, rather than for the special interest of the nation taking the mandatory. One of the natural functions of any international or supernational organization would be the adjustment and settlement of difficulties arising from this provision.

This topic brings up the question as to the right of any nation or group of nations to exert any force on weaker nations in the exploitation of mineral resources. On the principal of self-determination and of the complete freedom of action of nations, this procedure seems unjustified. On the other hand, whether rightly or wrongly, civilization has created great material demands which must be satisfied. The individuals, companies, and governments which use force to exploit resources in weaker countries are merely the agents in supplying the demand created by all of us. While their methods are often indefensible, the exploiters cannot be regarded merely as irresponsible buccaneers who are projecting themselves unnecessarily into somebody else's business. Whatever the sentimental and ethical aspects of the question, it seems almost inevitable that the demands of civilization will continue to require the exploitation of weaker countries; and in proportion as these countries are backward in cooperating, they must feel the world pressure. An agreement for international cooperation in such matters, therefore, is not to be regarded as merely a cold-blooded attempt to rob weaker nations,—but rather as a means of improving methods in satisfying the actually existing material demands of civilization. For illustration, the criticism of England's attempt to develop the oil industry of Mesopotamia and Persia has to a large extent confused the methods with the aim sought for. It is the writer's view that development of these resources is inevitable, and that criticism should not be directed toward nations and groups attempting to attain these results, but rather to the methods applied. For the purposes of this discussion, it is not necessary to go beyond the acceptance of the fact of demand, nor to argue the question as to whether the material demands of civilization should be curbed and progress restricted to matters of mind and human happiness.

METHODS OF INTERNATIONAL COOPERATION

The first step in international consideration of minerals is obviously one of fact-finding. This became painfully evident during the great war, when the sudden cutting off of outside supplies and markets brought home the fact that the mineral question is only in part a domestic one. The average mining man had come to take the established marketing and commercial conditions more or less for granted, and had not looked into the underlying factors. There had been a tendency to assume that a kind Providence was in some manner looking after these elements in the situation. The nearest approach to Providence, as a matter of fact, was a small group of importers and exporters, possessing special knowledge of the international movements of certain commodities,—which knowledge was of unsuspected importance to the mineral industry. War conditions showed that neither the general public nor the mineral industry as a whole, much less the government, had even an elementary grasp of the important elements of the world mineral situation. The mobilizing of this information under high pressure, through the cooperation of government and private agencies, was an interesting and important feature in the complex activities back of the firing line. It is vastly to the credit of the men interested in the mineral industry in this country, and presumably also in other countries, that almost without exception they contributed their bits of knowledge to the common pool, even though these bits had been in a sense their private capital. Certain importers, who by their knowledge of international phases of the mineral situation had been able to exercise a profound influence on domestic markets, voluntarily sacrificed their own interest for the common cause and pointed out ways in which reductions of imports could be made.

The problems of the Peace Conference, and of other international agreements now pending, have required a still further systematizing of international information. One of the results has been the establishment of organizations of an international fact-finding character in our own and in certain other governments. In the chapters on the several minerals in this book, are summarized some of the salient features of the international situation developed by study of the kind indicated.

Knowledge of the physical facts of the world mineral situation is only a first step. Their interpretation and correlation, the study of the underlying principles, the formulation of the necessary international agreements and regulations, constitute even more difficult problems, which are far from solved.

There always has been some cooperation of governments in the mineral trade through the ordinary diplomatic channels. The question is now prominent whether, in view of the new conditions, it may not be necessary to develop better machinery—in the form of some international or supernational organization, possibly patterned on war procedure—in order to expedite the negotiations and to minimize possibilities of friction.

During the war, when the world demand exceeded the total world supply of certain commodities, such as nitrate and tin, international commissions were formed in order to make an equitable distribution of these minerals and prevent favored strong nations from taking too large a proportion of the total. This procedure presented no insurmountable difficulties. A canvass of the total supplies available and of the demands of the various countries ordinarily led to voluntary compromise in the allocation of supplies. Most of the regulations of these commissions were applied to mineral industries which were unable to meet the total demand. They were not tried out in cases where there were excess supplies; this process obviously would have been much more difficult, though perhaps not impossible.

The general success of international attempts to allocate mineral supplies during the war suggests the lines along which results might be accomplished during peace. The process is essentially a matter of getting at the facts, and then discussing the situation around a table,—thus eliminating the long delays and misunderstandings arising from the procedure through the older established diplomatic channels. How far such a procedure might be possible without the compelling common interest of war is debatable.

The great powers of the Reparations Committee, previously noted, and of the recently formed European coal commission, already indicate the general nature of the machinery for international control which might be exercised through a league of nations. It is not our purpose to argue for international control or for any specific plan of control, but rather to outline the problem. The question is not an academic one. Various kinds of international control are present facts, and the problem relates to the possibilities of more effective organization of existing agencies.

CONSERVATION IN ITS INTERNATIONAL RELATIONS

The interests of conservation, considering both its physical and its human energy phases (p. 362), seem to call for an international understanding in the use of mineral resources which will result in the minimum hindrance to their free movements along natural channels of trade. The essential fact of the concentration of mineral supplies in comparatively few world localities, and the fact that no nation is supplied with enough of all varieties of minerals, mean that artificial barriers to their distribution cannot but impose unnecessary handicaps on certain localities, which may be anti-conservational from a world standpoint. If the few countries possessing adequate supplies of high-grade ferro-alloy minerals, for instance, were to restrict their distribution by tariffs or other measures, the resulting cost to civilization through the handicapping of the steel industry would be a large one. Or if, for the general purpose of making the United States entirely self-supporting in regard to mineral supplies, sufficiently high import tariffs were imposed on these minerals to permit the use of the low-grade deposits in the United States, earlier exhaustion of the limited domestic supplies would follow, and in the meantime the cost to the domestic steel industry would be serious. Cost may be taken to represent the net result of human energy multiplied into raw material. The movement would therefore be anti-conservational. If each state in the United States were to start out to become entirely self-sustaining in regard to minerals, and by various regulations were able to prohibit the use of minerals brought in from without, or the export of its excess of minerals, the waste in effort and materials would be obvious. Nature has clearly marked out fields of specialization for different localities, and the effective use of mineral supplies is just as much a matter of specialization as the effective use of man's talents. If the United States, because of its vast copper deposits, is in a position to specialize in this line and to aid the world thereby, this should involve recognition of the fact that other countries are better able to specialize in other commodities,—thereby forming a basis for mutual exchange, which is desirable and necessary for world development.

This conservational argument against artificial barriers does not necessarily imply complete elimination of tariffs or other restricting or fostering measures. Within limits these may be necessary or desirable in order to maintain differences in the standard of living, or in order to permit the growth of infant industries; but to carry these measures to a point where they interfere with essential mineral movements determined by nature is obviously anti-conservational.

For some mineral commodities, international cooperation may prevent duplication in efforts and the development of excessive supplies in advance of the capacity of the world to use them. Partly because of lack of such cooperation, certain mineral commodities have been developed in such large quantities in various parts of the world that it may be many years before demand catches up with development. In the meantime, large and unnecessary interest charges are piling up. This financial loss measures the loss in effectiveness of collective human effort.

In the above discussion, little reference has been made to shortage of total world supplies as an argument for international cooperation. This is an argument often cited, and with some effectiveness during the war. It is the writer's view that this phase of the problem has been much exaggerated. Except for certain periods during the war, in considering the world as a whole adequate supplies of all mineral commodities have been available at all times. They have been developed as rapidly as needed, in some cases more rapidly; and geological conditions seem to indicate that this condition will continue for some time in the future, through national and individual effort. Combined efforts of governments seem hardly necessary as yet to accomplish this purpose. In fact, there is rather more danger of over-development, without due regard to the working of the interest rate, which might be prevented by international cooperation. The main problem now is not one of total supplies, but of their effective and equitable distribution.

EXPLORATION IN ITS INTERNATIONAL RELATIONS

When an explorer or prospector leaves his own country to discover and acquire minerals in other countries, with a view to exportation, it is reasonably obvious that he must first acquire a sound knowledge of at least some of the elements of international trade in minerals,—such as shipping facilities, rates, tariffs, attitude of the government toward ownership, toward export, etc. For example, the prospector for oil in foreign countries will not get very far without considering the recent steps taken by foreign governments, and mentioned on pp. 131-132.

The necessity of study of the international situation in conducting domestic exploration is not so generally recognized; and yet anyone today who confines his attention solely to the local physical facts of the situation, and who ignores international considerations, may find himself in difficulties. The investigation of international questions is not merely desirable from the standpoint of general information, but may be vital to the business or professional success of the explorer. For instance, he might take up the exploration and development in the United States of fertilizers and ferro-alloy minerals which are ordinarily imported; and without understanding the severe limitations imposed by the foreign situation, he might find himself with a property, sound from a physical standpoint, but financially a failure. It is comparatively easy, by running over the long list of mineral commodities used in the United States, to eliminate, on international grounds, a considerable number from the field inviting financial success, and to concentrate on others whose economic relations are sound. In the rapid changes during and since the war, the necessity for consideration of world conditions has been brought home at heavy expense to many business and professional men engaged in the mineral industry.

VALUATION IN ITS INTERNATIONAL RELATIONS

For mineral commodities of limited supply and steady demand, market conditions may be more or less taken for granted, and valuation may be based on local considerations. For a large number of mineral resources, however, the competitive market conditions are anything but stable, because of foreign competition. It is necessary not only to know the basis for this competition, but also to be able to follow intelligently its various changes. The value of many of our mineral deposits in recent years has varied widely with changes in the foreign situation.

RELATIVE POSITION OF THE UNITED STATES IN REGARD TO SUPPLIES OF MINERALS

The United States is more nearly self-sustaining in regard to mineral commodities as a whole than any other country on the globe. The following statement summarizes qualitatively our position:

1. Minerals of which our exportable surplus dominates the world situation:

Copper. Petroleum has belonged in this class until recently. In the future imports will be required (see 5 following).

2. Minerals of which our exportable surplus constitutes an important but not a dominant factor in the world trade:

Cement. Coal. Iron and steel. Phosphates. Silver. Sulphur. Uranium and radium.

3. Minerals of which our exportable surplus is not an important factor in world trade. Small amounts of most of these minerals have been and will doubtless continue to be imported because of special grades, back-haul, or cheaper sources of foreign supply, but these imports are for the most part not essential as a source of supply:

Aluminum and bauxite. Arsenic. Artificial abrasives and emery (except Naxos emery). Asphalt and bitumen. Barite. Bismuth. Borax. Bromine. Building stone (except Italian marble). Cadmium. Feldspar. Fluorspar. Fuller's earth. Gold. Gypsum. Lead. Lime. Magnesite. Mineral paints (except umber, sienna, and ocher from France and Spain). Molybdenum. Pyrite. Salt (except special classes). Talc. Titanium. Tripoli and diatomaceous earth. Zinc.

4. Minerals for which the United States must depend almost entirely on other countries:

Cobalt. Nickel. Platinum and metals of the platinum group. Tin.

5. Minerals for which the United States will depend on foreign sources for a considerable fraction of the supply:

Antimony. Asbestos. Ball clay and kaolin. Chalk. Chromite. Corundum. Diamond dust and bort. Garnet. Graphite. Grinding pebbles. Manganese. Mercury. Mica. Monazite. Naxos emery. Nitrates. Petroleum (see below). Potash. Precious stones. Pumice. Tungsten. Vanadium. Zirconium.

In the past the production of petroleum in the United States has dominated the world petroleum situation; but domestic consumption has now overtaken production, and unless discoveries of oil come along at a rapid rate the domestic deficiency seems likely to increase, with corresponding increase in our dependence on foreign sources (see pp. 128-132).

Some of the minerals of this last class, such as potash, manganese, and chromite were developed under war conditions in the United States to such an extent as to materially lessen the demand for importation; but in normal times domestic sources can supply a considerable fraction of the demand only at high cost and with the aid of a protective tariff.

No attempt will be made here to present the detailed figures on which the above generalizations are based. In view of the present disturbed conditions of production and consumption, any judgment as to future demands or available surplus must take into account several factors which cannot be accurately measured,—such as financial control in foreign countries, possible tariffs, and foreign competition. For this reason the above statement should be regarded as only tentative, though it is the result of a rather exhaustive study of conditions in relation to the world control of shipping. The classes named overlap to some extent, and it is to be expected that some of the commodities placed in one class may in the near future be transferred to another.

In terms of value, the United States has a potential export surplus of minerals about twice as large as that of all the rest of the world put together. Countries which were neutral during the war have the remaining export surplus. Great Britain, France, and Italy have net import requirements considerably in excess of their exports. Germany has almost as large a deficit of minerals as the United States has a surplus.

From the above facts it is clear that, in any scheme of international control or cooperation, the United States would have by far the heaviest stake, and perhaps the most to lose by restriction. It seems equally clear that the preponderance of exportable surplus of minerals over necessary imports justifies the United States in taking a broad and liberal view of the importation of needed minerals. The war-time necessity of making our country as nearly self-sustaining as possible does not seem to obtain in peace times. To carry that principle to an extreme means not only the expensive use of low-grade domestic supplies, but the elimination of the imports which are so necessary to balance our export trade.

These facts also raise the question as to how far the United States is justified in exploiting the rest of the world to add to its already great preponderance of control,—as, for instance, in copper. Any further aggrandizement of our position in regard to such minerals may be directly at the expense of neighbors who are already far less well supplied than ourselves, and is to be justified only on the basis of adding to the world's supply for common use, and of lending our expert assistance to neighbors to make them more nearly self-supporting. To carry out our campaign in these cases without regard to the needs of other countries will obviously not hasten the ideal of a democratic world with equal opportunity for all. On the other hand, the great freedom allowed by our laws in regard to foreign commercial control of our minerals, as compared to the restriction on such control in other countries, suggests the desirability of exerting our pressure for the open door policy in all parts of the world, in the interest of desirable reciprocal relations.

In this connection there has been a tendency to criticise England's post-war activity in securing oil reserves for the future. Self-interest has clearly dictated the necessity for improving England's weak position in regard to this vital energy resource. The success of this movement obviously means a lessening of the future preponderance of the United States in the oil industry, and calls for increased activity on the part of the United States in maintaining the desirable leading position it has long held. From the writer's viewpoint, however, the fair success of a rival does not call for criticism of motives. If there is any just criticism, it applies to methods (see pp. 390-391).

Whatever action may be taken by the United States in regard to international mineral questions, it is clear that the war has brought this country into such world relations that it has become imperative for us to study and understand the world mineral situation much more comprehensively than before,—in the interest not only of intelligent management of our own industries, but of far-sighted handling of international relations. Under the stress of war the government, especially through the Geological Survey, the Bureau of Mines, and the several war boards, found it necessary to use extraordinary efforts to obtain even elementary information on the international features of mineral trade. Much progress has been made, but only a start. The geologist or engineer who fails to follow these investigations may be caught napping in the economic phases of his work.

THE COAL AND IRON SITUATION OF WESTERN EUROPE UNDER THE TERMS OF THE PEACE TREATY

A mineral problem of special international importance at the present time relates to the disposition of the coal and iron resources of Germany. Germany's coal and iron have been the basis for its commanding position in industry and commerce. In fact, its development of these resources has been probably the most vital element in the European economic situation. The terms of the Peace Treaty in regard to these commodities have far-reaching consequences, not only for Germany but for all Europe, and indirectly, for the world.

Germany (Westphalia) outclasses all other European sources in grades of metallurgical coal, in quantities produced, and in cheapness of production. Both France and Belgium must continue to be dependent on this source for important parts of the coking coal for metallurgical purposes, notwithstanding France's acquisition of the Saar Basin, which produces mainly non-coking coal, and the development of new reserves in Belgium. Germany's command of coal is wrecked in several ways. The French take over full and absolute possession of the coal of the Saar Basin, though Germany has the right to repurchase it at the end of fifteen years, in case this territory then elects for union with Germany. The coal of Upper Silesia, with a production of about 23 per cent of the total of all German hard coal, is to be ceded to Poland, subject, however, to plebiscite. Germany undertakes to deliver to France each year, for not to exceed ten years, an amount of coal equal to the difference between the annual pre-war production of the French coal mines destroyed as a result of the war, and the production of the mines of the same area during the years in question,—such delivery not to exceed 20,000,000 tons in any one year of the first five, nor 8,000,000 in any one year of the succeeding five years. In addition, Germany agrees to deliver coal, or its equivalent in coke, as follows: to France 7,000,000 tons annually for ten years; to Belgium 8,000,000 tons annually for ten years; to Italy an annual quantity rising by annual increments from 4,500,000 tons in 1919-20 to 8,500,000 tons in each of the six years 1923-24 to 1928-29; and to Luxemburg, if required, a quantity of coal equal to the pre-war annual consumption of German coal in Luxemburg.

The total pre-war coal production of Germany in 1913 was 191,500,000 tons. The diminution of production due to loss of territory in Alsace-Lorraine, in the Saar Basin, and in Upper Silesia amounts to about 61,000,000 tons. The further required annual distribution of coal to France, Italy, Belgium, and Luxemburg amounts to about 40,000,000 tons. This leaves about 90,000,000 tons for Germany's domestic use, as compared with a pre-war domestic use of 139,000,000 tons. Even then, these calculations make no allowance for coal to be used in export trade to neutrals or other countries, some part of which seems vital to Germany's trade. They make no allowance for the deterioration of plant and machinery in the mines, which will delay resumption of coal production. They make no allowance for the diminution in working hours and the lack of transportation. In short, unless there is a miraculous recovery and development of Germany's coal industry, impossible conditions have been imposed. Some recognition of this fact appears in the great powers to adjust terms which have been vested in the Reparations Committee. Successive revisions of requirements by the Reparations Committee have already reduced the direct contributions of coal from Germany nearly fifty per cent. The entire European coal situation is in a state of chaos. It was found necessary in 1918 to appoint a Coal Commission under international control, to attempt to allocate and distribute supplies. It seems inevitable that the physical facts of the situation will prevail, and that the control of the Allies will resolve itself into efforts to distribute and coordinate supplies so as to keep the European machinery going, more or less regardless of the terms of the Peace Treaty.