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 coÖperating 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 coÖperation. An international coal commission has already been formed to look after the distribution of coal through Europe. International coÖperation 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 coÖperation 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 COÖPERATION 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 coÖperation 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 coÖperation 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 coÖperation 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 coÖperation, and appealed to the Peace Conference for authority to do so. In certain cases the necessity for coÖperative 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 coÖperation 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 coÖperation 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 coÖperating, they must feel the world pressure. An agreement for international coÖperation 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 CoÖperation

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 coÖperation 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 coÖperation 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 coÖperation 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 coÖperation, 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 coÖperation. 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 coÖperation. 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:

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

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:

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

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

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 coÖperation, 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 coÖrdinate supplies so as to keep the European machinery going, more or less regardless of the terms of the Peace Treaty.

One of the important outcomes of this situation has been the recent rapid development of German lignite production, based on newly worked-out methods of treatment and utilization.

By taking over Alsace-Lorraine, France acquires about 70 per cent of the iron ore reserves and annual production of Germany. This production was in minor part smelted locally,—the larger part moving down the Rhine to the vicinity of the Ruhr coal fields, and Ruhr coal coming back for the smelting in Lorraine. This great channel of balanced exchange of commodities has been determined by nature, and is not likely to be permanently affected by political changes. For the time being, however, the drawing of a political boundary across this trade route hinders the full resumption of the trade. Self-interest will require both Germany and France to keep these routes open. France requires German coal to supply the local smelters near the iron fields, and German markets for the excess production of iron ore. On the other hand, Germany's great smelting district in the Ruhr Basin is largely dependent on the Lorraine iron ore, and the movement of this iron ore requires coal from down the Rhine as a balance.

The intelligent handling of this great coal and iron problem is of far-reaching consequence to the mineral industries of the world.

CONCLUSION

In the foregoing discussion it is not our purpose to argue for any specific national or international plan or procedure, but rather to show something of the nature of the problem,—and particularly to show that intelligent and broadened self-interest requires a definite national policy in regard to world mineral questions. Realization of this fact is a long step toward the solution of the international problems. No geologist, engineer, or business man is safe, in the normal conduct of his affairs, without some attention to these matters.

It is our purpose further to bring home the fact that international coÖperation in the mineral field is not merely an academic possibility, but that in many important ways it is actually in existence. The terms of the Peace Treaty alone have far-reaching consequences to the explorer or mining man in all parts of the world. The modifications of these terms, which are inevitable in the future, will not be of less consequence. It is necessary not only to know what these are, but to aid in their intelligent formulation.

LITERATURE

A vast new literature on the subject of international mineral relations has sprung into existence during and following the war, and anyone may easily familiarize himself with the essentials of the situation. Some of the international features are noted in the discussion of mineral resources in this book. For fuller discussion, the reader is especially referred to the following sources:

The reports of the United States Geological Survey. Note especially World Atlas of Commercial Geology, 1921.

The reports of the United States Bureau of Mines.

Political and commercial geology, edited by J. E. Spurr, McGraw-Hill Book Co., New York, 1920.

Strategy of minerals, edited by George Otis Smith, D. Appleton and Co., New York, 1919.Coal, iron and war, by E. C. Eckel, Henry Holt and Company, New York, 1920.

The iron and associated industries of Lorraine, the Sarre district, Luxemburg, and Belgium, by Alfred H. Brooks and Morris F. LaCroix, Bull. 703 U. S. Geological Survey, 1920.

The Lorraine iron field and the war, by Alfred H. Brooks, Eng. and Min. Journ., vol. 109, 1920, pp. 1065-1069.

Munitions Resources Commission of Canada, final report, 1920.

FOOTNOTES:

[58] Umpleby, Joseph B., Strategy of minerals—The position of the United States among the nations: D. Appleton and Co., New York, 1919, p. 286.