Chapter XIX: Introduction (1)

One country stands pre-eminent as the world’s great producer of copper, and that is the United States, whose production was 60 per cent. of the total world output in 1917. Iron, coal, oil and copper are fundamental raw materials of which the United States produces more than any other country, but only in copper and in oil is the output greater than that of all other countries together. In copper this has been true since the early nineties. American copper, English gold, Russian platinum and Chilean nitrate are common phrases in world markets; as common as the commodities themselves.

No other country produces or has for many years ever produced one-sixth as much copper as the United States. While the world output of copper has been increasing, at the average rate of 5 per cent. annually for 10 years up to 1914 and three times as rapidly since then, the relative importance of the United States has not declined. On the contrary it has increased at a greater rate than the total world output. Certain individual countries, it is true, have since 1914 increased their output faster than the United States, but there is no indication that the United States will lose its present dominating leadership.

Because of the magnitude of the copper industry of the United States, great refining plants have been built up here. American capital also has gone largely into Canadian, Mexican and South American copper properties. As a result the United States now imports nearly one-third as much copper as is produced (18 per cent. of the total world output in 1917). Thus American capital controls, through refining in addition to ownership of mines, 78 per cent. of the world’s copper production. This control should also be equally strong as regards selling. Obviously, a large part of our domestic, and, as regards statistics, all the imported copper, is exported in finished form--copper ingots and bars, brass, electrical machinery, etc. But as regards selling and even mine ownership in Mexico and South America, there is considerable German control; although the important mines of Canada, Mexico and South America are owned by either American, British or French interests, except those owned by local foreign capital.

TABLE 35.--GEOGRAPHICAL AND FINANCIAL CONTROL OF THE WORLD’S COPPER MINES

(Production in Metric Tons)

-----+---------+------------------+---------+-----+---------+
Per-| | | | Per-| |
cent-| | | |cent-| |
age | Average | |Estimated| age | |
of |1916-1917| | capacity| of | Owned by|
World|output of| |output of|world| U. S. |
total| copper |Country of origin | copper |total| capital |
-----+---------+------------------+---------+-----+---------+
| |_Western | | | |
| |Hemisphere_ | | | |
59.2| 868,903|United States | 928,000| 57.5| 899,000|
3.3| 49,168|Canada | 58,000| 3.6| 28,000|
3.4| 49,478|Mexico | 65,000| 4.0| 49,000|
1.0| 14,000|Cuba | 10,000| 0.6| ... |
0.2| 2,000|Venezuela | 2,000| 0.1| ... |
4.8| 70,000|Chile | 110,000| 6.8| 86,000|
3. | 43,620|Peru | 45,000| 2.8| 45,000|
0.4| 6,000|Bolivia | 12,000| 0.8| 6,000|
-----+---------+------------------+---------+-----+---------+
75.4|1,103,169|Total Western | | | |
| |Hemisphere |1,230,000| 76.2|1,113,000|
| | | | | |
| |_Eastern | | | |
| |Hemisphere_ | | | |
3.2| 47,500|Africa | 58,000| 3.6| ... |
2.5| 36,550|Australia | 43,000| 2.7| ... |
7.9| 112,900|Japan | 125,000| 7.7| ... |
2.9| 42,000|Spain and Portugal| 42,000| 2.6| ... |
1.3| 18,500|Russia (estimated)| 18,000| 1.1| ... |
4.8| 71,000|Central Powers | | | |
| |(estimated) | 71,000| 4.4| ... |
1.4| 19,000|Norway | 19,000| 1.2| ... |
0.1| 1,000|Sweden | 1,000| 0.1| ... |
0.4| 6,250|Other countries | 6,250| 0.4| ... |
| | | | | |
-----+---------+------------------+---------+-----+---------+
24.6| 354,700|Total Eastern | | | |
| |Hemisphere | 383,250| 23.8| |
-----+---------+------------------+---------+-----+---------+
World| | | | | |
Total|1,456,869| |1,613,250|100 |1,113,000|
100%| | | | | 69[106] |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
-----+---------+------------------+---------+-----+---------+

-----+---------+------------------+------------+-----------+
Per-| | | | |
cent-| | | | |
age | Average | | | |
of |1916-1917| | Owned by | Owned by |
World|output of| | British | German |
total| copper |Country of origin | capital | capital |
-----+---------+------------------+------------+-----------+
| |_Western | | |
| |Hemisphere_ | | |
59.2| 868,903|United States | 29,000 | |
3.3| 49,168|Canada | 30,000 | |
3.4| 49,478|Mexico | Idle | 2,500 plus|
1.0| 14,000|Cuba | ... | 2,000 plus|
0.2| 2,000|Venezuela | 2,000 | |
4.8| 70,000|Chile | 2,500 | 4,500 plus|
3. | 43,620|Peru | | |
0.4| 6,000|Bolivia | | ... |
-----+---------+------------------+------------+-----------+
75.4|1,103,169|Total Western | | |
| |Hemisphere | 63,500 | 9,000 |
| | | | |
| |_Eastern | | |
| |Hemisphere_ | | |
3.2| 47,500|Africa | 58,000[105]| ... |
2.5| 36,550|Australia | 43,000 | |
7.9| 112,900|Japan | ... | ... |
2.9| 42,000|Spain and Portugal| 40,000 | ... |
1.3| 18,500|Russia (estimated)| ... |18,000(?) |
4.8| 71,000|Central Powers | | |
| |(estimated) | ... |71,000 |
1.4| 19,000|Norway | 10,000 | ... |
0.1| 1,000|Sweden | ... | ... |
0.4| 6,250|Other countries | 250 | ... |
| | | | |
-----+---------+------------------+------------+-----------+
24.6| 354,700|Total Eastern | | |
| |Hemisphere | | |
-----+---------+------------------+------------+-----------+
World| | | | |
Total|1,456,869| |212,750 |98,000 |
100%| | | 13.3[106] | 6.1[106] |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
-----+---------+------------------+------------+-----------+

-----+---------+------------------+-----------+--------+--------------
Per-| | | | |
cent-| | | | |
age | Average | | | | Owned by
of |1916-1917| | Owned by |Owned by|local capital
World|output of| | French |Japanese|in producing
total| copper |Country of origin | capital | capital| countries
-----+---------+------------------+-----------+--------+--------------
| |_Western | | |
| |Hemisphere_ | | |
59.2| 868,903|United States | | |
3.3| 49,168|Canada | | |
3.4| 49,478|Mexico |13,500 | |
1.0| 14,000|Cuba | ... | ... | 8,000
0.2| 2,000|Venezuela | | |
4.8| 70,000|Chile | 9,500[105]| ... | 7,500
3. | 43,620|Peru | | |
0.4| 6,000|Bolivia | 6,000 | |
-----+---------+------------------+-----------+--------+--------------
75.4|1,103,169|Total Western | | |
| |Hemisphere |29,000 | ... |15,500
| | | | |
| |_Eastern | | |
| |Hemisphere_ | | |
3.2| 47,500|Africa | ... | |
2.5| 36,550|Australia | | |
7.9| 112,900|Japan | ... | 125,000|
2.9| 42,000|Spain and Portugal| ... | ... | 2,000
1.3| 18,500|Russia (estimated)| | |
4.8| 71,000|Central Powers | | |
| |(estimated) | | |
1.4| 19,000|Norway | ... | ... | 9,000
0.1| 1,000|Sweden | ... | ... | 1,000
0.4| 6,250|Other countries | 2,000 | ... |(3,000)(Italy)
| | | | |(1,000)(China)
-----+---------+------------------+-----------+--------+--------------
24.6| 354,700|Total Eastern | | |
| |Hemisphere | | |31,500
-----+---------+------------------+-----------+--------+--------------
World| | | | |
Total|1,456,869| |31,000 | 125,000|
100%| | | 1.9[106] |7.7[106]|2.0%, divided
| | | | |as follows:
| | | | |Cuba, 0.5;
| | | | |Spain, 0.1;
| | | | |Norway, 0.6;
| | | | |Sweden, 0.05;
| | | | |Chile, 0.5;
| | | | |China, 0.05;
| | | | |Italy, 0.2
-----+---------+------------------+-----------+--------+--------------

[105] Includes Belgian capital.

[106] Percentage of ownership.

TABLE 36.--BUSINESS CONTROL OF THE WORLD’S COPPER MINES

All figures metric tons

------------------------+----------+---------+---------+-------+
| Estimated| | | |
| capacity | | Refined | |
| output of| Refined | in |Refined|
| refined | in | British | in |
Country of origin | copper |the U. S.|Dominions|Germany|
------------------------+----------+---------+--------+--------+
_Western Hemisphere_ | | | | |
United States | 928,000 | 928,000| ...| ...|
Canada | 58,000 | 28,000| 30,000| ...|
Mexico | 65,000 | 52,000| ...| ...|
Cuba | 10,000 | 10,000| ...| ...|
Venezuela | 2,000 | 2,000| | |
Chile | 110,000 | 43,000| 2,500| ...|
Peru | 45,000 | 45,000| | |
Bolivia | 12,000 | 6,000| ...| ...|
+----------+---------+---------+-------+
Total Western Hemisphere|1,230,000 |1,114,000| 32,500| 0|
Percent of total |76.2%[107]| 69 | 2 | ...|
| | | | |
| | | | |
| | | | |
| | | | |
_Eastern Hemisphere_ | | | | |
| | | (or in| |
| | | Belgium)| |
Africa | 58,000 | 5,000| 53,000| ...|
Australia | 43,000 | ...| 43,000| ...|
Japan | 125,000 | 3,000| ...| ...|
Spain and Portugal | | | | |
(estimated) | 42,000 | 2,000| 35,000| ...|
Russia (estimated) | 18,000 | ...| ...| ...|
Central Powers | 71,000?| ...| ...| 71,000|
Norway | 19,000 | ...| 19,000| ...|
Sweden | 1,000 | ...| 1,000| ...|
Other Countries | 6,250 | ...| 250| ...|
| | | | |
| | | | |
| | | | |
+----------+---------+---------+-------+
Total Eastern Hemisphere| 383,250 | 10,000| 151,250| 71,000|
Percentage of total | 23.8 | .7| 9.3| 4.4|
Total percentage | 100% | 69.7| 11.3| 4.4|
------------------------+----------+---------+---------+-------+

------------------------+-------+-------+--------------+---------
| | | |
| | | | Formerly
|Refined|Refined| Refined | sold
| in | in | in other |by German
Country of origin | France| Japan | countries | houses
------------------------+-------+-------+--------------+---------
_Western Hemisphere_ | | | |
United States | ...| ...| ...|( 73,000)
Canada | ...| ...| ...|( 21,000)
Mexico | 13,000| ...| ...|( 2,500)
Cuba | ...| ...| ...|( 10,000)
Venezuela | | | |
Chile | 9,500| ...| 55,000|( 20,000)
Peru | | | |
Bolivia | 6,000| | |
+-------+-------+--------------+---------
Total Western Hemisphere| 28,500| 0| 55,000 |(134,500)
Percent of total | 1.8 | ...| 3.4 | (8¹⁄₄%)
| | |(Chili copper)|
| | |(U. S. owned) |
| | | |
_Eastern Hemisphere_ | | | |
| | | |
| | | |
Africa | ...| ...| ... |( 5,000)
Australia | ...| ...| ... |( 43,000)
Japan | ...|122,000| |
Spain and Portugal | | | |
(estimated) | 5,000| ...| ... |
Russia (estimated) | ...| ...| ... |?
Central Powers | ...| ...| 18,000 |?
Norway | ...| ...| ... |?
Sweden | ...| ...| ... |?
Other Countries | 2,000| ...| 3,000 (Italy)|
| | | 1,000 (China)|
+-------+-------+--------------+---------
Total Eastern Hemisphere| 7,000|122,000| 22,000 |( 48,000)
Percentage of total | .4 | 7.6 | 1.4 | (3%)
Total percentage | 2.2 | 7.6 | 4.8 | (11¹⁄₄%)
------------------------+-------+-------+--------------+---------

[107] The United States controls the sale of substantially all this
copper.

TABLE 37.--FUTURE IMPORTANCE OF PRESENT COPPER-PRODUCING COUNTRIES AS INDICATED BY KNOWN RESERVES OF COPPER ORE, AND CAPITAL CONTROLLING THESE RESERVES

-------------------------+---------+-----+---------------------
| | |Developed reserves in
| | |terms of years’ life
| | | at capacity output
-------------------------+---------+-----+-----+-------+------+
| | | | | |
| | | | | |
|Estimated| Per-| | | |
|capacity |cent-|Owned| | Owned|
|output of| age | by | Owned | by |
| copper | of |U. S.| by |German|
| (metric |world|capi-|British| capi-|
Producing country | tons) |total| tal |capital| tal |
-------------------------+---------+-----+-----+-------+------+
W. Hemisphere: | | | | | |
United States | 928,000| 57.5| 12.4| 12.4 | ... |
| | | yrs.| yrs. | |
Canada | 58,000| 3.6| 15 | 20 | ... |
Mexico | 65,000| 4.0| 5 | large | large|
Cuba and Venezuela | 12,000| 0.7| ... | ... |3 yrs.|
Chile | 110,000| 6.8| 150 | 3 | ? |
| | | | | |
Peru | 45,000| 2.8| 4 | ... | ... |
Bolivia | 12,000| 0.8| ...| ... | ... |
-------------------------+---------+-----+-----+-------+------+
Total |1,230,000| 76.2| ...| ... | ... |
Percentage total reserves| ... | 76.8| 73.6| 2.4 | 0.1 |
| | | | | |
Eastern Hemisphere: | | | | | |
Africa | 58,000| 3.6| ...|66[110]| ... |
Australia | 43,000| 2.7| ...| 7.2 | ... |
Japan | 125,000| 7.7| ...| ... | ... |
Spain and Portugal | 42,000| 2.6| ...|50 | ... |
Russia | 18,000| 1.1| ...|18(?) |18(?) |
Central Powers | 71,000| 4.4| ...| ... | ? |
Norway | 19,000| 1.2| ...|10 | ... |
Sweden | 1,000| 0.1| ...| ... | ... |
Other countries | 6,250| 0.4| ...| ... | ... |
-------------------------+---------+-----+-----+-------+------+
Total | 383,250| 23.8| ...| ... | ... |
Percentage total reserves| ... | 23.2| ...|18.4 | 0.95 |
World total |1,613,250|100 | ...| ... | ... |
Percentage of world total| | | | | |
reserves | ... | ... | 73.6| 20.8 | 1.05 |
-------------------------+---------+-----+-----+-------+------+

-------------------------+----------------------+-------+-------
| Developed reserves in| |
| terms of years’ life | |
| at capacity output | |
-------------------------+------+------+--------+-------+-------
| | |Owned by| | Per-
| | | local | |centage
| | Owned| capital| | of
|Owned | by | in | | total
| by |Japan-| produc-| | re-
|French| ese | ing | Exten-| serves
| capi-| capi-| coun- | sion | of
Producing country | tal | tal | tries | [108] | world
-------------------------+------+------+--------+-------+-------
W. Hemisphere: | | | | |
United States | ... | ... | ... | 713 | 34.
| | | | |
Canada | ... | ... | ... | 63.3| 3.
Mexico |6 yrs.| ... | ... | 20.8| 1.15
Cuba and Venezuela | ... | ... | 3 yrs. | 2.1| 0.10
Chile |5 | ... | consid-| 795.8| 37.9
| | | erable | | [109]
Peru | ... | ... | | 11.2| 0.55
Bolivia |4 | ... | ... | 2.8| 0.10
-------------------------+------+------+--------+-------+-------
Total | ... | ... | ... |1,609.0|
Percentage total reserves| 0.4 | ... | 0.3 | ... | 76.8
| | | | |
Eastern Hemisphere: | | | | |
Africa | ... | ... | ... | 237.6| 11.3
Australia | ... | ... | ... | 20 | 0.95
Japan | ... | 6 | ... | 46.2| 2.2
Spain and Portugal | ... | ... | 50 | 130 | 6.2
Russia | ... | ... | 18 | 19.8| 0.95
Central Powers | ... | ... | ? | 20 | 0.95
Norway | ... | ... | 10 | 12 | 0.55
Sweden | ... | ... | 10 | 1 | 0.04
Other countries | ... | ... | ? | 1.4| 0.06
-------------------------+------+------+--------+-------+-------
Total | ... | ... | ... | 488.0|
Percentage total reserves| ... | 2.2 | 1.65| ... | 23.2
World total | ... | ... | ... |2,097.0|
Percentage of world total| | | | |
reserves | 0.4 | 2.2 | 1.95| ... | 100
-------------------------+------+------+--------+-------+-------

[108] Extension is the product of “Percentage of World Total” and
“Developed Reserves in Terms of Years Life,” and gives total ultimate
relative importance of different countries.

[109] In so far as it affects production this high figure must be
discounted because of the large reserves being compact, the distance
from market and the unfavorable mining conditions of a thinly settled
country.

[110] Katanga equals ⁶⁵⁄₆₆ of this.

NOTE.--Not much weight is to be attached to figures showing more than
10 years of life. Total full future value over long number of years
is greatly reduced when expressed in terms of present value on normal
interest discount. All countries with reserves good for ten or more
years may be considered as being on an equal footing so far as copper
resources are concerned. But, large reserves may mean expanding
production (as in Chile and Africa) and be important on that account
and only on that account.

To weigh ore reserves they have been taken in toto, but Spain would
be no worse off as compared to the United States if her reserves
were put at 10 years instead of at 50 (as calculated above). Her
reserves happen to be of a kind easily blocked out, but her output is
stationary.

Table 35 shows the different copper-producing countries of the world and the chief features of financial control of the producing mines. Table 36 shows the chief features of business control (refining and selling control) as distinct from control by mine ownership. In both tables a forecast for future conditions is made by using estimates of 1918 and 1919 production. These figures are followed out to the different forms of control. The actual outputs of 1916-17 are given as a reference and check. Table 37 shows reserves, largely those of producing mines. Plate VIII shows the location of the principal copper deposits of the world.

NORTH AMERICA

UNITED STATES

=Production.=--The maximum output of copper from mines within the borders of the United States was in 1916, and amounted to 1,927,850,548 pounds. In 1917 the output was less, because of labor troubles, but six leading states showed an increase, and if Montana had equaled the output of 1916, the 1917 output would have been 1,962,034,512 pounds. Without good markets and favorable labor conditions, the United States production cannot reach anything like 2,000,000,000 pounds a year.

Commercial Control

_Control Through Ownership of Mines._--All the productive bodies of copper in the United States are owned by Americans, except a small number controlled by English capital. Before the war, there was evidence of German affiliation and potential control in the copper industry, but this centered in refining and selling the metal. Accordingly, the German grip on the industry was highly centralized, and direct and effective measures were used in breaking it.

Five leading groups are in control of copper production in the United States. Certain of these have additional important ownerships in South America and Mexico, which will be discussed under those countries.

TABLE 38.--LEADING FINANCIAL GROUPS IN CONTROL OF COPPER PRODUCTION IN UNITED STATES

Pounds
_Group 1. Hayden-Jackling “porphyries”_ (closely
affiliated with group 2) Utah Copper, Ray Consolidated
(Ariz.), Nevada Consolidated, (Nev.) Chino (N. Mex.) and
Butte & Superior (Mont.); 1917 output (custom ore not
included) 448,887,253

_Group 2. Morgan-Guggenheim_ (American Smelting &
Refining Co). Kennecott (Alaska) and a large number of
smaller mines owned by Americans which have their ore
treated at plants controlled by this group. The 1917
output of Kennecott and eleven of the chief customers of
American Smelting & Refining plants (smaller custom
shipments to smelters must be added) was 156,954,722

_Group 3. Rockefeller-Ryan_: Anaconda, Inspiration,
North Butte, Utah Consolidated, Mountain Copper (Cal.),
Balaklala (Cal.), Walker mine (Cal.), and Arizona Copper
Co., 1917 output (custom ore not included) 357,308,558

_Group 4. Phelps-Dodge and affiliations_: Arizona and
New Mexico only. Copper Queen, Detroit, Burro Mountain,
Commercial Mining Co. (Phelps-Dodge); 1917 output 123,000,000

Calumet & Arizona--New Cornelia (Briggs-Congdon); 1917
output 79,360,000

United Verde Extension (affiliated with each of above);
total 1917 output 63,242,784

To which must be added custom business which is
important, _e.g._, Arizona Commercial mine, etc.; 1917
business (other custom ore not included) about 10,000,000
-------------
Total for group 4 275,603,113

_Group 5. Calumet & Hecla_: 1917 output, Calumet & Hecla
mine and subsidiaries 168,765,033

Total 1917 output of these five leading groups[111] 1,407,518,679

[111] Exclusive of the small mines (shippers of custom ore) partly
controlled through smelting and refining contracts by same interests.

Important smaller groups may be listed as follows:

_Group 6. W. A. Clark_: United Verde, Elm Orlu (Mont.)
and Ophir Hill (Utah); 1917 output 88,390,038

_Group 7. Adolph Lewisohn_: Miami and, by sale of
output, Shattuck-Arizona; 1917 output 57,058,666

_Group 8. U. S. Smelting, Refining & Mining Co._ Custom
ore and Mammoth mine, Cal., Utah Apex, and Tintic (Utah)
mines; 1917 output 22,600,000

_Group 9. Lake mines_ (other than Calumet & Hecla):
Copper Range Co., Mohawk, Quincy, etc.[112]; 1917 output 99,700,000

[112] Ten different interests.

There is also a group, discussed later, of uncertain or unclassifiable affiliations, owned by Americans, but in many instances worked under smelting and refining contracts that merit special mention:

1917 output,
pounds
Old Dominion (Ariz.), (perhaps group 4) 25,758,381
East Butte (and custom ore), (perhaps group 9) 18,000,000
Shannon Copper Co., (Ariz.), (independent) 6,138,219
Penn. Mining Co. (Cal.) (independent) 3,400,000
Cons. Arizona Smelting Co. (independent) 5,000,000
Ducktown Sulphur, Copper & Iron Co., Ltd. (Tenn.),
(English) 5,523,573
--------------
Total unclassifiable and uncertain 63,820,173
Total of groups 1 to 5 1,407,518,679
Total of groups 6 to 9 267,748,704
--------------
Total of all interests 1,739,087,556
Total 1917 United States copper production (from
domestic mines only) 1,873,546,171
Balance (custom ore from small shippers)[113] 134,458,614

[113] This balance includes copper produced as by-product in mining
of other metals in Colorado and the East, estimated at 50,000,000
pounds, and custom shipments from 1,000 small operations, chiefly
to smelters controlled by groups 1, 2, 3, 4 and 6, estimated at
84,458,614 pounds.

Certain mines in the above groups are owned in England, but are classed with that interest which refines and sells the production. In group 2, for example, is listed the Tennessee Copper Co., whose copper is refined and sold at the American Smelting & Refining plant in Baltimore. In ownership, however, this property should be placed in group 7, (output 10,547,704 pounds).

In group 3 are two English-owned mines: Arizona Copper Co. (Scotch) and Mountain Copper Co., (English). Ducktown Sulphur, Copper & Iron in the last group (uncertain and unclassifiable) is also English-owned. The combined output of these three English-owned properties is 48,000,000 pounds. This comprises all properties not owned by American capital. Ducktown Sulphur, Copper & Iron Co., Ltd. is English-owned, but all its production (copper matte) is sold to the American Metal Co. The others in the group designated above as uncertain, or unclassifiable, are entirely American owned, although their production has been marketed by the American Metal Co. or L. Vogelstein, as discussed later.

None of these groups actually own the mines outright, the mines being owned by hosts of stockholders scattered all over the country. Of many companies the president and directors own a very small percentage of the stock. As regards group 6 and to a less extent group 4, however, the actual ownership is in very few hands; but this is exceptional. The copper mines of the United States, like the railroads and the largest industrial enterprises, such as the United States Steel Corporation, etc., are, in the last analysis, controlled by their stockholders.

Summarized on the basis of the 1917 output, one finds that the ownership of American copper mines is as follows: American 97¹⁄₂ per cent., English and Scotch, 2¹⁄₂ per cent.

_Control Through Ownership of Smelters and Refineries._--Ownership of smelters that treat domestic ore is substantially identical to the mine ownership given above. Interests owning active smelters are less numerous than interests owning mines, because efficient smelting requires large-scale operations.

The electrolytic refineries are all American owned. Large-scale units, representing heavy capital investments, are essential in electrolytic refining. A small refinery cannot compete successfully with large ones. The average important copper mine produces enough ore to make about 25,000,000 pounds a year, whereas the average smelter produces three or four times as much blister or casting copper, and the average electrolytic refinery can produce over 250,000,000 pounds annually. Consequently, there are only six groups (Hayden-Jackling, Morgan-Guggenheim, Rockefeller-Ryan, Phelps-Dodge, Calumet & Hecla, and U. S. Smelting, Refining & Mining Co.) interested in refinery ownership. No small producer has the capital or the size to be able to enter this field. Table 39 shows electrolytic copper refineries of the United States and their ownerships:

TABLE 39.--OWNERSHIP AND CAPACITY OF AMERICAN COPPER REFINERIES

------------------------------------------+----------+---------------
|Ownership,| 1917 capacity
Works | group-- | (pounds)
------------------------------------------+----------+---------------
Baltimore Copper Smelting & Rolling Co. | 1 and 2 | 720,000,000
Nichols Copper Co. Independent and in part| 4 | 500,000,000
Raritan Copper Works | 3 | 460,000,000
American Smelting & Refining Co. | 1 and 2 | 288,000,000
United States Metals Refining Co. | 8 | 250,000,000
Tacoma Smelting Co. | 1 and 2 | 204,000,000
Anaconda Copper Mining Co. (new plant) | 3 | 180,000,000
Calumet & Hecla Mining Co. | 5 | 65,000,000
Anaconda Copper Mining Co. (old plant) | 3 | 65,000,000
Balbach Smelting & Refining Co.[114] | |
(former German affiliations) | ... | 48,000,000
| +---------------
Total capacity | | 2,780,000,000
| |
| |1917 production
| | (pounds)
Electrolytic copper | ... | 1,452,744,593
Secondary electrolytic copper | ... | 66,337,771
Imported copper made into electrolytic | ... | 555,000,000
| +---------------
Total 1917 refinery production | ... | 2,074,082,364
------------------------------------------+----------+---------------

[114] This company treats copper scrap and imported copper ores and
matte.

The refineries control the situation to a very considerable extent. A copper producer must obtain electrolytic refining in order to market his product. Lake copper and casting copper do not require electrolytic refining, although producers of casting are often at a disadvantage when there is a big premium on electrolytic copper and casting can only be sold at a large discount.

The smelters do not control the situation in the same way. In the United States are a large number of custom smelters--32--that actively compete for ores; some have many branches. Moreover, a mine of any size will have its own smelter, as the capital investment is far less than that required for an electrolytic refinery. As the table shows, there are only seven groups (the six above enumerated and the Balbach Smelting & Refining Co.) interested in electrolytic refining, and one of these (the smallest) is to a considerable degree interested in the treatment of secondary or scrap copper.

The electrolytic refinery control of the copper production of the United States is shown by the 1917 figures. In that year the production of electrolytic copper was 1,452,744,593 pounds; of Lake copper, 238, 508,091 pounds; and of casting copper, 152,293,487 pounds. Electrolytic copper thus constituted 77¹⁄₂ per cent. of the total.

_Control Through Selling and Distribution of Copper in Finished Form._--Groups owning mines, smelters, and refineries invariably also control or own the selling agencies that distribute the product to the consumer. In these cases, control through selling is the same as control through mine ownership, but is increased by the copper in ores received at custom smelters.

Control through selling, then, is identical to the control shown in Table 38, so far as groups 1, 2, 3, 4, and 8 are concerned, if certain additions at the expense of the other groups are made. But every producer of Lake copper controls the sale of its product, because Lake copper needs no electrolytic refining. Hence in groups 5 and 9 mine ownership and control through selling are identical. This is a fact of considerable interest and confirms the fact of control through refinery ownership. Groups 6 and 7 (Table 38) are large producers, and although they do not own refineries they are able to control the sales of their product. The refineries are willing to refine their copper on toll and return the marketable copper to the mine owners, who make sale to the trade. Groups 2, 3, and 7 now control copper even further, as they own brass mills, wire and rod mills, etc. They manufacture a part of their production and sell it as copper wire, finished brass, etc., instead of making sales to the brass and wire mills of ingots, bars, cakes, etc., which is and has been always the general practice.

There remains to consider the control, through selling, of the six uncertain groups (total production 63,820,173 pounds) and some of the 134,458,614 pounds of copper produced from custom ore. A large part of this, as noted, is lodged in groups 1, 2, 3, 4 and 8.

For many years three concerns affiliated with the German metal combines (Merton Co. and Metallgesellschaft, of Frankfort-on-the-Main, and Aaron Hirsch, of Halberstadt) have been active in the copper business of the United States. Their activity has been confined to selling of copper produced in this country, and to ownership and selling of copper produced in foreign countries but brought to the United States for smelting and refining. One small refinery is or was owned by this group in the United States, and two smelters, treating mainly foreign ores. It also owns smelters in Mexico and South America, and had close connections with two large refineries in New Jersey, so that it sold all the electrolytic copper produced by one plant and an important part of the production of the other plant.

_German Control of American Copper._--The exact German ownership of these concerns was disclosed during the war by the work of the Alien Property Custodian, and was as follows: (1) American Metal Co., with an issued capital of $7,000,000, of which the German holdings amounted to $3,336,000, or close to 50 per cent.; these holdings were taken over by the United States authorities; (2) L. Vogelstein & Co., of which 80 per cent. of the stock was held by Germans (A. Hirsch & Sohn) and 15 per cent. by L. Vogelstein, a naturalized American citizen; (3) Beer, Sondheimer & Co., entirely German owned. The government seized the two last-named concerns.

The _American Metal Co._ markets the copper of the Old Dominion, East Butte, Shannon, Penn. Mining Co. and Ducktown Sulphur, Coal & Iron companies. Blister copper 99 per cent. pure is purchased on contract from the first-named four companies by the American Metal Co. This copper is refined for the American Metal Co. by the Nichols Copper Co., and the finished product sold to the trade by the American Metal Co. The Ducktown Sulphur, Copper & Iron Co. sells all of its production, as copper matte, to the American Metal Co., which has it treated and sells the finished product. In this manner 58,820,173 pounds was controlled through sale by the American Metal Co. in 1917. In addition, considerable domestic custom ore and a large amount of copper imported from Canada (Granby), South America and Mexico is handled by the American Metal Co. in the same way. Such imported copper totals up to three times as much as the domestic copper so controlled.

So far as domestic copper is concerned this situation will be corrected. The Nichols Copper Co. is free to refine this copper and sell it or turn it back to the producers for sale; it does this latter for Phelps-Dodge and Miami. It can be assumed that control through selling will cease as regards the 58,820,173 pounds cited above and also as regards Granby’s production--about 50,000,000 pounds.

The American Metal Co. may be sold to American interests,[115] thus clearing up the situation in imported copper to some extent. Certain Mexican and Chilean properties owned by the American Metal Co. will perhaps not be sold, and such properties can be considered as likely always to be German owned.

[115] The German holdings in the American Metal Co. are reported sold
to an American syndicate in which L. Vogelstein participated.

The American Metal Co. owns the Balbach electrolytic refinery, and from treatment of scrap and imported copper (Chilean and Japanese blister and copper) at that plant obtains and sells about 50,000,000 pounds of refined copper per annum.

The concern of _L. Vogelstein & Co._ lost its chief hold on American copper production in 1915. Up to that time L. Vogelstein & Co. worked very closely with group 8 (United States Smelting, Refining & Mining Co.). The output of the United States Smelting Refining & Mining Co. mines and smelters was sold by Vogelstein as well as the output of its electrolytic refinery. But since 1915 this American-owned enterprise itself sells all the copper produced by its own mines and smelters.

But Vogelstein still controls the sale of the copper treated at the plant of the United States Metals Refining Co.,[116] over and above what is produced by the United States Smelting, Refining & Mining Co. from its own mines and smelters. This remaining copper consists in part of imported copper, and in part of the output of the Consolidated Arizona Smelting Co., which is an American-owned enterprise. The output was large in 1917 (about 20,000,000 pounds) but three-fourths of it was ore from the United Verde Extension mine. The United Verde Extension has since completed its own smelter and no longer turns over a part of its copper output to Vogelstein through the Consolidated Arizona Smelting Co. The output of United Verde (group 6) also was formerly sold by Vogelstein, but now is sold by the owner of the mine.

[116] The United States Metals Refining Co. was a subsidiary of the
United States Smelting, Refining & Mining Co., sold, 1920, to the
American Metal Co.

Therefore, the only copper controlled in 1918 by Vogelstein through selling was about 50,000,000 pounds a year, the output of mines owned by Consolidated Arizona Smelting Co. (about 5,000,000 pounds) and the imported copper, of which about 45,000,000 pounds was treated in 1917. The latter is controlled by Vogelstein not only by selling of the product but in part by smelting contracts and in part probably, as regards South America, by ownership of mines.[117]

[117] L. Vogelstein is reported to have sold his interests to the
American Metal Co. and subsequently, early in 1920, to have acquired
a fifth interest in that company.

_Beer, Sondheimer & Co._ has never been a large factor in the United States copper industry, although much interested in zinc. But the firm does control the sale of some copper and owns a smelter at Norfolk. This smelter treats imported ores for the most part, but also obtains some copper from pyrites (sulphur ores) coming from the United States and Canada. Perhaps as much as 10,000,000 pounds of domestic copper was sold by Beer, Sondheimer & Co. in 1917. The company owns an important Cuban mine.

As American capital owns American copper mines, smelters and refineries, German interests were able to obtain a foothold only through selling organizations (trading in metals), which later they extended to close working arrangements with electrolytic refineries, which were naturally interested in finding a good cash market for their output. The fact that Germany prior to 1914 was the biggest foreign buyer of United States copper, made easy the successful development of the carefully laid German plans.

In the future such plans can be guarded against by encouraging copper producers to sell their own output. All the large producers already do this, a change in this respect having developed since 1914. Sales in foreign markets can now be properly managed under the provisions of recent legislation permitting copper producers to enter into a combination in the sale of export copper. This counteracts the old German system of a buyers’ combine against the sellers of copper, which was an important factor in forcing American producers to have German concerns sell their product. But it will be necessary for the electrolytic refineries to co-operate in this policy of American selling control of American copper. Producers whose output is only a few million pounds per annum probably cannot afford to establish their own selling agencies; such producers will include all who have no smelter but ship to custom smelting plants. The production can be sold by the large custom smelting plants, which are American owned, or these small producers could establish a common sales agency. Other larger producers, as those whose copper is now sold by the American Metal Co., should be enabled to do their own selling. In this they have been blocked by the lack of refining facilities, except on a basis that took away from them selling control of their product. This situation can be corrected by regulations that put electrolytic refineries on a recognized toll basis for all American customers. All refineries have about the same costs and their combined capacity is ample to treat all the blister copper that will be produced. They should receive good profits on the business, but it should be unlawful for refineries to refuse to treat blister copper on toll and insist that copper must be sold to them outright. The toll system is already in use at several refineries and has proved satisfactory.

As shown above, there are in the United States a few very large refineries whose ownership is in few hands. If these refineries control the sale of all the production of copper several objectionable features develop. The few sales agencies handle so much copper that there is a tendency to co-operate with representatives of foreign consumers who can buy in large quantities, and it is not difficult to manipulate the market temporarily, in disregard of actual conditions of demand and supply. Thus the entire output of copper, one of our great natural resources, is placed in the hands of groups who, while interested in mining, are more interested in refining. The best interests of the industry are more nearly those of the miner than of the refiner. Therefore, the most positive dislodgment of former German control of copper through selling will come from the breaking up of the former system and transferring each unit of that system to other hands; rather than transferring the old units in block to non-German hands. Sales of American copper should be handled by a large number of separate agencies actively competing for the domestic market; this is essential in the interests of the consumer and of the country. But export copper business should be handled through one agency or association representing all the sales agencies, as is now legal, and this should be done in the interests of the producer and of the country.

=Reserves of United States Copper Mines.=--The developed reserves of United States copper deposits are fully equal, in proportion to output, to such reserves in foreign copper deposits. This insures the fact that for the next ten years, at least, the copper production of the United States will maintain its present relative dominance over all foreign countries.

A large proportion of all copper deposits are of such a deep-seated character that at no time can large reserves be positively developed, even when they exist. On the other hand, all over the world the mines with large known reserves are horizontal deposits, lying near the surface, because only in such occurrences is it possible to block out easily and cheaply big tonnages of ore. There are in the United States six very important deposits of this type, the so-called “porphyries.” These are:

TABLE 40.--“PORPHYRY” COPPER MINES IN THE UNITED STATES

---------------------------+-----------+----------
| | Years of
| | life at
| Reserves| present
Mine | (tons) |production
---------------------------+-----------+----------
Utah Copper Co. |200,000,000| 31
Ray Consolidated Copper Co.| 90,000,000| 30
Chino Copper Co. | 80,000,000| 27
Inspiration Consolidated |120,000,000| 20
Nevada Consolidated | 80,000,000| 20
Miami Copper Co. | 50,000,000| 20
+-----------+----------
Total |620,000,000| 26
---------------------------+-----------+----------

These mines in 1917 produced 31.5 per cent. of the total United States output.

The New Cornelia mine is of similar type and has already developed 75,000,000 tons, but as it is new its 1917 output was small. The Arizona Copper Co., Ltd., is also of this type, as are certain new developments in the Phelps-Dodge properties.

These “porphyry” deposits occur in or near intrusive igneous rocks of various ages. Fully one-third of the United States production is now and will continue to be obtained from such deposits. On the average, about 1 per cent. copper is recovered from the ore.

Distinct from the shallow and horizontal-lying disseminated ores or “porphyry coppers,” are the deep mines. The two oldest and most important deep-mine districts in the United States are Butte, Montana, and the Keweenaw Peninsula, Michigan. The mines of Butte work steeply dipping veins. It cannot be considered that over five years of ore reserves are known, and probably not over 2¹⁄₂ years of reserves are actually blocked out on three sides. However, there are no indications of early exhaustion, as the veins are profitable at more than 3,000 feet, the greatest depth to which mining has yet progressed. The deposits of northern Michigan are in pre-Cambrian rocks. They have been important producers of copper for over 50 years, and several mines have reached a vertical depth of more than 5,000 feet. Certainly not over five years of ore reserves are fully developed, but there are no signs of early exhaustion. These two districts, Butte and Michigan, now produce about 30 per cent. of the total United States output, a smaller proportion than before the development of the “porphyries.” The average copper content of the Michigan deposits ranges from 0.5 per cent. to 2 per cent. and of the Butte deposits 2.5 to 5 per cent.

Certain ore deposits (usually massive but irregular) which are situated mainly in Arizona constitute the third important general class. These deposits produce about one-quarter of the total United States output. Bisbee, Jerome and Globe (Arizona), and Kennecott (Alaska), are the main localities. Owing to the irregular nature of the deposits and the distance from the surface at which the ore is found, large developed reserves cannot be blocked out in advance. Such reserves are assumed to be five years.

Apart from the three classes of deposits described above are many smaller deposits, of which the most distinct class are the pyritic bodies, notably those of Tennessee and California. Such deposits are often profitable even when of low grade, because the sulphur as well as the copper is recovered. Reserves in such deposits are large: equal, say, to ten years’ life. Deposits of this class are important in Spain, Norway and in part in Japan. Mines producing copper as a by-product should also be grouped here.

From the above outline the table below has been compiled:

TABLE 41.--DEVELOPED RESERVES OF UNITED STATES COPPER MINES

------------------------------------+----------+--------+-----------
|Percentage| |
| of | |
| total |Years of|Extension
General group | output | life | [118]
------------------------------------+----------+--------+-----------
The “porphyries” | 35 | 26 | 9.10
Deep mines | 30 | 5 | 1.50
Rich ore bodies (Arizona and Alaska)| 25 | 5 | 1.25
Pyritic ore bodies | 5 | 10 | 0.50
Others | 5 | 2 | 0.10
+----------+--------+-----------
Average | 100 | 12.4 | 12.45
------------------------------------+----------+--------+-----------

[118] “Extension” is the Percentage of Total Output multiplied by the
Years of Life, giving the relative importance of each group.

The known ore reserves serve as a basis for the assumption that the production of copper in the United States will continue at the present figures for at least ten years.

CANADA

Canadian copper-producing properties are entirely controlled by American and British capital in about equal proportion, changes involving construction of new refineries and a shift in selling control being assumed to be already effective. Up to the present time the natural development has been for Canada to depend largely on the United States for refining facilities. It is likely that in the future local or English control in this field will be closer than heretofore, although the Canadian copper industry will always be closely identified with that of the United States.

There are three chief copper properties in Canada which are controlled by United States capital, all in British Columbia, as well as several small mines in this province and in others. By far the largest is the Granby Consolidated Mining, Smelting & Power Co. This company has mines in two districts. One of these properties is nearly exhausted; the other is a new and vigorous producer. Smelters are operated at each place. The Granby company is controlled by the same interests that own the Nichols Copper Co. (electrolytic refinery). Considerable custom ore is treated by Granby, a large amount coming from Alaska. The other two mines are those of the Canada Copper Co. and the Howe Sound Co. Their production is refined and sold in the United States by American concerns. The developed reserves at these three mines are all large, being fully adequate for fifteen years at the present rate of production.

The only property in Canada which has established facilities for producing copper ready for the consumer is the Consolidated Mining & Smelting Co., of Trial, B. C. This Canadian company owns and operates its own mines, smelter and electrolytic refinery. The capacity of the refinery is now 14,000,000 pounds refined copper annually. The ores are massive pyritic bodies without great developed reserves, but the probable reserves are large.

The English and American properties at Sudbury yield nearly as much copper as the Granby company, although their main business is nickel production. A small part of the output is refined in Wales, producing copper sulphate; but the largest part has been refined in New Jersey. A refinery is being completed in Canada that will treat these copper-nickel mattes and produce refined copper. These copper-nickel deposits occur in pre-Cambrian rocks, and the known or potential reserves are very large. They are described in more detail in Chapter VI.

In Ontario and Quebec there are a number of pyrite mines where some of the pyrite contains considerable copper. Most of the pyrite is shipped to the United States, where the copper is recovered, refined and sold.

The production of Canada is growing, and the country will become of increasing importance as a source of copper. Known reserves are larger in proportion to output than in the United States and there will probably be important developments of new districts. The northern British Columbia region is of exceptional promise.

CUBA AND THE CARIBBEAN

The copper output of Cuba has increased in an extraordinary degree during the past few years, but there are no indications that this increase will continue. Two mines are responsible for nearly all the production. One is an old mine near Santiago, the El Cobre, which yielded about one-quarter of the total output. It is owned by the German metal combine, which ships the ore and concentrates to Norfolk, where they are treated by the smelter owned by Beer, Sondheimer & Co., who have always marketed the production. The Matahambre mine, in Pinar del Rio Province, yields nearly the entire remaining Cuban output; it is owned by Cubans. Ore is shipped to the United States Smelting, Refining & Mining Co., of New York, and is believed to be sold by L. Vogelstein & Co. The reserves of copper ore in Cuba can not be considered large. Statistics of Cuban output are conflicting: producers’ reports, statistical authorities and United States commerce reports not being in agreement. All production is shipped in crude form to the United States for refining.

There are copper deposits in Central America,[119] and at one or two points in the West Indies outside of Cuba. To date production has been insignificant, although future possibilities are considerable.

[119] The Rosita mine, in Nicaragua, has 1,500,000 tons of ore
blocked out, running over 5 per cent. copper. It has not been
equipped.

MEXICO

The future importance of Mexico as a producer of copper or of other metals will be determined not only by the character of her natural deposits but by political conditions. The latter have materially decreased the output during the past few years, so that in 1917 production was about 100,000,000 pounds, probably not much over half what it would have been had normal conditions been continuous since 1912.

=Commercial Control.=--Three companies now produce about three-fourths of the total copper. Two of these are owned by _American capital_ and their product is refined and sold in the United States. Situated near the Arizona border, they have not suffered from the revolution as much as the properties farther south. These two companies are the Greene Cananea Copper Co. (Ryan-Rockefeller, group 3 of Table 38) and Montezuma Copper Co. (Phelps-Dodge, etc.; group 4 of Table 38). The developed reserves at the Montezuma Copper Co. are equivalent to five years at present production and those at Cananea can be considered about the same. Both districts have important possibilities. Near Greene Cananea is another American property, Democrata Cananea, which is a producer of moderate size. The Cananea district is now producing at the rate of over 50,000,000 pounds per annum. Another American property of note is the Teziutlan Copper Co., Puebla, now idle due to revolutions. It has a smelter which normally ships 12,000,000 pounds of blister copper annually to the Anaconda company’s electrolytic plant. Considerable copper is produced at the plants of the American Smelting & Refining Co., which has three copper smelters, one at Matehuala, San Luis Potosi; one at Asarco and another at Aguascalientes, Durango.

_French capital_ controls the third important property (among the three most important in Mexico), which is on the peninsula of Lower California. This is the Boleo, owned by the Rothschilds; as it is far removed from the heart of Mexico, operations have not been greatly disturbed. The mine is an old producer with large potential reserves, and the actual developed reserves will maintain present output for six years. The Boleo ore deposits, which are of an uncommon type, are Tertiary sediments that contain 3.5 per cent. copper ore, usually as oxides. Smelters near the mine produce blister copper and matte, which normally is shipped to France. During the war a large part of the blister and matte came to the United States and passed into the hands of the American Smelting & Refining Co. French interests also own the Compagnie d’Inguaran, near Ario, Michoacan. There are large developed reserves, but the property is idle because of political conditions and absence of equipment or rail connections. French capital also controls the Magistral Ameca Co., in Jalisco, where large ore reserves have been developed. This property is also idle due to political conditions.

_English capital_ controls the Mazapil Copper Co., which has large plants, including smelters, in Zacatecas and Coahuila. This is one of the largest copper companies in Mexico as well as one of the oldest important mines. It was idle for some time because of the Mexican revolutions, but has been reopened recently.

To sum up, the production in Mexico at present is three-quarters American controlled (of which one-half may be assigned to group 3 and one-quarter to groups 2 and 4), while the remaining one-quarter is French controlled. But present output and known reserves give no true picture of future possibilities. Mexico can become of first importance as a copper producer, ranking possibly second only to the United States or equaling Chile and Japan among the world’s producers. The natural resources are there and in the future will surely be developed much more extensively than ever before.

_German capital_ must be taken into consideration, and especially the activities of the American Metal Co. in Mexico, notably more vigorous since 1914 than before. It is believed that the company has made substantial profits from Mexican mining investments in this period and has obtained a very strong foothold. The Compañia Metallurgica de Torreon is one of the American Metal Co. subsidiaries, owning promising mines, chiefly in the development state, and smelters already equipped to produce 20,000,000 pounds of copper yearly. The Mapimi smelter is also owned by the American Metal Co., as are many other companies. What is the future Mexican political situation to be and what part will the American Metal Co. or the German metal combine play in the Mexican copper industry? There is no more pertinent question in the entire field of the political and commercial control of the copper resources of the world, particularly as American capital is largely interested in Mexican copper mines and has made enormous investments there. Also the natural tendency is for most of the Mexican copper to be shipped to the United States for refining and marketing. American refineries, with cheap fuel and efficient methods, are the natural destination for Mexican raw copper.

SOUTH AMERICA

South America is the second largest copper-producing continent of the world, but at present stands far behind North America. The copper-producing countries of South America, in the order of their importance, are Chile, Peru, Bolivia, Venezuela and Argentina.

CHILE

Chile is a copper producer of rapidly increasing importance, as indicated by production records of recent years.[120]

[120] According to Chilean statistics, and estimate for 1917.

1914 1915 1916 1917
Metric tons 44,665 52,341 71,288 95,000

The largest mines of Chile are controlled by _American capital_. Group 2 of Table 38 (the Morgan-Guggenheim interests) controls the Chile Copper Co., Braden Copper Co. and the Caldera and Carrizal custom smelters. The developed ore reserves of the Chile Copper Co. are the largest in any known copper deposits in the world and the reserves of Braden are among the largest known. Group 3 of Table 38 (Anaconda Copper Co.) has a property with large developed ore reserves--the Andes Copper Co. This mine is not yet (1918) producing.

Table 43 (p. 243) gives data concerning these American-owned mines.

These three mines are allied to the “porphyries” of the United States in character, but they are less profitable because the external conditions make operation more difficult.

TABLE 42.--CHIEF COPPER PRODUCERS OF CHILE. THEIR OWNERSHIP AND RELATIVE IMPORTANCE