The Economic Aspect of Geology Part 43

Mica.

Mon.a.z.ite.

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 cla.s.s, 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 compet.i.tion. 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 cla.s.ses named overlap to some extent, and it is to be expected that some of the commodities placed in one cla.s.s 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 a.s.sistance 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) outcla.s.ses all other European sources in grades of metallurgical coal, in quant.i.ties produced, and in cheapness of production. Both France and Belgium must continue to be dependent on this source for important parts of the c.o.king coal for metallurgical purposes, notwithstanding France's acquisition of the Saar Basin, which produces mainly non-c.o.king 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 c.o.ke, 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 quant.i.ty 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 quant.i.ty 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.

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 cooperation 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 a.s.sociated 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.

[59] Control is here used in a very general sense to cover activities ranging from regulation to management and ownership. The context will indicate in most cases that the word is used in the sense of regulation when referring to governmental relationships.

CHAPTER XIX

GEOLOGY AND WAR

GEOLOGY BEHIND THE FRONT

The experience of the great war disclosed many military applications of geology. The acquirement and mobilization of mineral resources for military purposes was a vital necessity. In view of the many references to this application of geology in other parts of this volume, we shall go into the subject in this chapter no further than to summarize some of the larger results.

As a consequence of the war-time breakdown in international commercial exchange, the actual and potential mineral reserves of nations were more intensively studied and appraised than ever before, with the view of making nations and belligerent groups self-sustaining. This work involved a comprehensive investigation of the requirements and uses for minerals, and thus led to a clearer understanding of the human relations of mineral resources. It required also, almost for the first time, a recognition of the nature and magnitude of international movements of minerals, of the underlying reasons for such movements, and of the vital inter-relation between domestic and foreign mineral production. The domestic mineral industries learned that market requirements are based on ascertainable factors and that they do not just happen. Large new mineral reserves were developed. Metallurgical practices were adapted to domestic supplies, thus adding to available resources. Better ways were found to use the products. Some of these developments ceased at the end of the war, but important advances had been made which were not lost.

One of the advances of permanent value was the increased attention to better sampling and standardization of mineral products, as a means of compet.i.tion with standardized foreign products. For instance, the organization of the Southern Graphite a.s.sociation made it possible to guarantee much more uniform supplies from this field, and thereby to insure a broader and more stable market. Such movements allow the use of heterogeneous mineral supplies in a manner which is distinctly conservational, both in regard to mineral reserves and to the human energy factors involved. In another war the possibilities and methods of meeting requirements for war minerals will be better understood.

In these activities, geologists had a not inconsiderable part. The U. S.

Bureau of Mines, the U. S. Geological Survey, state geological surveys, and many other technical organizations, public and private, turned their attention to these questions. One of the special developments was the organization by the Shipping Board of a geologic and engineering committee whose duty it was to study and recommend changes in the imports and exports of mineral commodities, with a view to releasing much-needed ship tonnage. This committee was also officially connected with the War Industries Board and the War Trade Board. It utilized the existing government and state mineral organizations in collecting its information. Over a million tons of mineral shipping not necessary for war purposes were eliminated. This work involved also a close study of the possibilities of domestic production to supply the deficiencies caused by reduction of foreign imports.

Other special geological committees were created for a variety of war purposes. In the early stages of the war a War Minerals Committee, made up of representatives of government and state organizations and of the American Inst.i.tute of Mining Engineers, made an excellent preliminary survey of mineral conditions. A Joint Mineral Information Board[60] was created at Washington, composed of representatives of more than twenty government departments which were in one way or another concerned with minerals. It was surprising, even to those more or less familiar with the situation, to find how widely mineral questions ramified through government departments. For instance, the Department of Agriculture had men specially engaged in relation to mineral fertilizers and a.r.s.enic.

Sulphur and other mineral supplies were occupying the attention of the War Department. Mica and other minerals received special attention from the Navy Department. The Tariff Board, the Federal Trade Commission, the Commerce Department, even the Department of State, had men who were specializing on certain mineral questions. All these departments had delegates on the Joint Mineral Information Board, in which connection they met weekly to exchange information for the purpose of getting better coordination and less duplication.

The National Academy of Sciences established a geologic committee, with representatives from the U. S. Geological Survey, the state geological surveys, the Geological Society of America, and other organizations.