Political and commercial geology and the world's mineral resources

Chapter II: Coal (2)

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Since the war began the development of industries based on coal tar has been remarkable. There are signs, however, of an unhealthy competition in this country, and the government should be careful that internal squabbles do not open the door for German control again.

=England.=--The British Isles have only one-fortieth of the total world’s supply of coal, but this is of better than average quality. High-grade steam coal is abundant and there is a fair supply of coking coal. The annual production, 300 million tons, is about one-fifth the world’s production, and is second only to that of the United States. England before the war exported about one-fourth of the production, overseas exports from England being six times as much as from any other country in the world. Coal has constituted about three-fourths of all English exports. The coal mines are near seaports, and ocean freight rates are low, because the demand for imports gives return cargoes to England from all parts of the world. There are large supplies of coal also in the colonies, especially India, Australia and South Africa.

The coal business and shipping of Great Britain grew up together. About one-fourth of the coal shipped goes for bunkering. In 1916 England owned 40 per cent. of the world’s shipping and exported nearly 70 per cent. of the world’s sea-borne coal. The maintenance of the shipping requires bunkering ports all around the world. Coal from Wales and British colonies was sufficient to supply them all, and they constitute by far the most strategic system that any country possesses.

England, Gibraltar, Greece, Malta, Suez, Port Said, Aden, Maskat, Colombo, Singapore, Bombay, Hong Kong, Shanghai, Sydney, Fiji Islands, Vancouver, Valparaiso, St. Lucia, Jamaica, Halifax, Newfoundland, St. Helena, Bermuda, Cape Town and Durban, and others encircle the globe. France, Japan, Holland and the United States have each a few stations, but no such comprehensive system. The German proposals of terms of peace (during the war) recognized the importance of these stations by specifying that England should give up Aden, Malta and similar ports.

Trade arrangements between Great Britain and other countries have been such as to grant “most favored nation” treatment to both parties, even with Germany, where no formal treaty was in force. The free-trade policy of England is well established, and on that basis England’s commercial growth has been very great. Studies since the war began show that Germany took advantage of the freedom in British countries and the protection at home. For example, German capital controlled some collieries in South Yorkshire, through Mr. Stinnes, one of the largest components of the German Kohlen Kontor. This organization had branches in Newcastle, Cardiff, Glasgow, Hull, and many foreign ports. The French also had purchased an English colliery before the war, the Stonehall colliery, at Lydden, near Dover.

The Australian colonies and probably others found that German financiers owned and controlled most of the mines when war broke out. It took some time to destroy this influence. Early in the war, British sentiment seemed to call for action against all such German commercial aggression, and at an Allied Economic Conference at Paris in June, 1916, plans were suggested for protection by tariff and exclusion of alien ownership in allied countries. More recently it seems that the British plan is to keep British certain key industries at all hazards and at any expense, but not to abandon free trade or in any way decrease the amount of trading done.

Commercial control of the Welsh steam-coal export trade is largely in the hands of the Cambria Coal Combine, but in the trade there are several other large combinations. The anthracite industry of England is not as well organized as that of America.

Commercial control of coal exported from Wales is largely in the hands of the large combinations of British shippers, in agreement with the Cambria. Even when the war interfered with shipping, it is estimated that two-thirds of the South American coal trade was in British control.

Many instances of British financial control of coal in countries other than British colonies have not been noted. British capital is invested in a few mines in Siberia and there are extensive holdings in China.

=Germany.=--The reserves of coal in Germany before the war were greater than those in England, counting possible reserves, and of fair quality. Germany formerly controlled 70 per cent. of the coal on the Continent. Austrian coal was controlled, and the coal of Spitzbergen has been claimed, though now in British and Norwegian control.

Although the most important deposits of coking coal of the Continent are in Westphalia, those of Belgium and northern France are very important to a general control of the coal situation. It cannot be assumed that these important coal fields were seized by the Germans for other reasons, or that the Germans included coal and iron by accident. In 1911 the Rhenish Westphalian _Zeitung_ advised that French Lorraine and Luxemburg should be dominated as thoroughly as Westphalia was. In 1915 the six greatest associations of business men in Germany petitioned the Chancellor to consider the control of the coal (and iron) of northern France as a military as well as economic necessity.

The annual production of coal in Germany before the war was about one-fifth of the world’s total output, closely approaching the production of Great Britain. In the first years of the war the coal output declined somewhat. In coal exports, Germany has been second only to the British Isles, but no country exports by sea one-sixth as much as Great Britain. Before the war Germany had established some fourteen “Kohlen depots” abroad and had a large amount of shipping. These bunkering ports were taken by the Allies.

An example of German industrial penetration is furnished by the case of Kiau Chau, China. In 1899 the Shantung Eisenbahn Gesellschaft was formed in Berlin with headquarters at Tsingtao. It acquired exclusive rights for 5 years to search for minerals in a zone 10 miles each side of the railway and to acquire claims. Chinese mines were not to be allowed to adopt modern methods and compete, unless they bought German material and employed German men. The mines that were developed produced good steamship coal and good enough coke, so that a blast furnace was planned. The Germans lost their control when war broke out, and these rights have passed, under the terms of the peace treaty, to Japan. German capital that had been invested some years ago in the Chung Hsing Coal Co. was bought out in 1908.

=France.=--Before the war France was fifth in the list of world’s coal producers, but for many years needed more coal than she produced. Possibly enough coal could have been mined in France by greater developments, but to import it was cheaper. French capital was invested in some foreign coal deposits. A company of French control owned the Stonehall colliery, near Dover. Before the war a French company was one of the largest operators in Turkey and was steadily acquiring new mines. A French company owned an important colliery in the Dombrova field, now part of Poland.

France has maintained government coaling stations for shipping in Indo-China, Tahiti, Society Islands, Martinique, and Madagascar; but no attempt is made to supply them wholly with French coal, or to be independent of other coaling stations.

=Italy.=--Italy has a poor supply of low-grade coal, and the normal production is insignificant. Imports have been large, those from Great Britain amounting in 1914 to 10,000,000 tons.

=Russia.=--Russia has several important coal fields. The production was 31,000,000 tons in 1915 and 23,000,000 in 1916, so that Russia, including the province of Ukraine, has ranked fifth or sixth among the world’s producers. If the demand for coal develops under the stimulus of industrial stability, the output will all be consumed in Russia. About two-thirds of the production has been raised in the Donetz basin. Half of this is coking coal.

=Japan.=--Japan has on the main island, Hondo, enough coal to permit considerable exports. Supplies in Korea and Formosa are less abundant. In all Japan’s coal there is very little of good coking quality.

When the war reduced the amount of British shipping in the North Pacific, Japanese ships supplied Japanese coal to a number of new coaling stations, and the British may find it difficult to regain their former prominence in bunkering there. Japanese coal now gets as far west also as Colombo, Ceylon.

Japanese law specifies Japanese control of the policy of mining companies, though some foreign financial interests are allowed. Japan controls a part of the coal produced in China, and by presenting insistent demands is increasing her control in that country. If given a free hand, Japan is in a position to exercise industrial and military control in Asia almost as thoroughly as the United States can in America. English and Belgian interests have some Chinese coal, and thus are about the only real competition at present with Japanese control.

=China.=--Outside the United States, China has the largest coal reserves of any country in the world. The coal varies in quality and grade; some of it is excellent, but the production has reached only about 18,000,000 tons a year. Some districts export and others import coal. The country could easily be independent if there were internal means of distribution. There might even be large exports if production began in advance of other industrial development. Coking coal is available only in certain areas, mostly in the south.

The largest and best-equipped producer is the Kailan Mining Administration, operating British and Chinese properties. The ownership of the company is mostly in Belgian hands, but the incorporation is under Hong Kong law, so that the company is under British control.

The chief producers in China are:

TABLE 6.--CHIEF PRODUCERS OF COAL IN CHINA

The Mining Company of Shantung, producing 400,000 tons a year, formerly owned by the Germans, is now run by the Japanese military organization. Thus only one of the large producers is under Chinese control, though many smaller mines are worked by Chinese. The Chinese law designed to prevent foreign control of this sort is not effective. It requires that the share of a mining industry held by foreigners shall not be over one-half; but if a foreign company owns half the shares and finances the Chinese half by a loan, the foreign control may be complete. There is a further control of mining, through the ownership of railways. All the larger producers must ship coal by rail, and foreign nations are allowed to finance railways. The difficulty of a government exercising adequate political and commercial control when it grants concessions in this way is evident.

General mining affairs in China are supervised by a Bureau of Mining Affairs. Any specific enterprise is controlled by a commissioner of finance in each province. It is questionable, however, whether governmental control will be strong enough to overbalance commercial and financial control, and diplomatic pressure from outside. Those companies incorporated under Hong Kong law can count on British protection. Japanese demands on China have been very insistent, and it is said that about a third of the production of the country is now controlled by Japan.

As a whole, China seems to take a small part in the control of her own coal. The opportunity for other powers to get financial, and, through that, industrial favors may be involved in the problem of financing the central government.

TABLE 7.--PRODUCTION, EXPORTS AND IMPORTS FOR 1913[8]

Millions of metric tons

---------+------------+----------+-------+-------+--------------------
Country |Kind of coal|Production|Exports|Imports|Remarks (1919)
---------+------------+----------+-------+-------+--------------------
United |Anthracite | 85 | 4.1 | ... |Resources greater
States |Bituminous | 432 | 18.0 | 1.4 |than those of any
|Coke | 42 | 1.0 | 0.1 |other country; can
|Bunker coal | ... | (7.7) | ... |easily increase
| | | | |ocean exports with
| | | | |more shipping
| | | | |available. Present
| | | | |exports chiefly to
| | | | |Canada. Value of
| | | | |coal-tar products
| | | | |imported in 1913,
| | | | |$10,962,000.
---------+------------+----------+-------+-------+--------------------
Great |Anthracite | 5 | | ... |Chief coal-exporting
Britain |Bituminous | 282 | 73.4 | ... |country; before war
|Coke | 20.5 | 1.2 | ... |had virtual monopoly
|Briquettes | ... | 2.1 | ... |of ocean exports.
|Bunker coal | |(21.0) | ... |Export control
| | | | |imperiled by
| | | | |shortage from labor
| | | | |conditions.
---------+------------+----------+-------+-------+--------------------
German |Bituminous | 191 | 34.6 | 10.5 |Coal needed for
Empire |Lignite | 87 | ... | 7 |Central Europe.
|Coke | 32 | 6.4 | 0.6 |Exports by rail and
|Coal | | | |canal. Distance from
|Briquettes | 5.8 | 2.3 | 0.3 |seaports prevents
|Lignite | | | |oversea exports.
|Briquettes | 21.4 | 0.9 | 0.1 |Westphalia has
---------+------------+----------+-------+-------+largest coking coal
Saar |Bituminous | 17.0 | | |resources in Europe.
District |Coke | 2.0 | | |Ownership of Saar
(Included| | | | |mines transferred to
under | | | | |France by Treaty of
German | | | | |Peace.
Empire, | | | | |
above) | | | | |
---------+------------+----------+-------+-------+--------------------
Upper |Bituminous | 49.1 | | |Nationality of Upper
Silesia |Lignite | 2.3 | ... | ... |Silesia to be
(Included|Coke | 3.1 | ... | ... |determined by
under | | | | |plebiscite; coal
German | | | | |production vital to
Empire, | | | | |eastern Germany,
above) | | | | |Poland and Austria.
---------+------------+----------+-------+-------+--------------------
Austria- |Bituminous | 17.6 | 0.7 | 13.7 |Austria, already
Hungary |Lignite | 36.4 | 7.0 | ... |deficient in
| | | | |bituminous coal,
| | | | |under the Peace
| | | | |Treaty loses
| | | | |practically all coal
| | | | |fields to Poland and
| | | | |Czecho-Slovakia.
---------+------------+----------+-------+-------+--------------------
Austria |Bituminous | 16.3 | ... | ... |Hungary always
(Included|Lignite | 27.4 | ... | ... |lacked enough
under |Coke | 2.6 | ... | ... |bituminous coal, and
Austria- | | | | |under any political
Hungary, | | | | |control must
above) | | | | |continue to import
| | | | |coal from Upper
| | | | |Silesia.
---------+------------+----------+-------+-------+--------------------
Hungary |Bituminous | 1.3 | | |
(Included|Lignite | 9.0 | | |
under |Coke | 0.2 | | |
Austria- | | | | |
Hungary, | | | | |
above) | | | | |
---------+------------+----------+-------+-------+--------------------
France |Bituminous | 40.0 | 1.3 | 18.7 |France consumed in
|Lignite | 0.8 | ... | ... |1913 (millions of
|Coke | 4.0 | 0.2 | 3.0 |tons)
|Briquettes | 3.7 | 0.1 | 1.1 |Coal 51.2
| | | | |Coke 6.9
| | | | |Briquettes 4.8
| | | | | ----
| | | | | 62.9
| | | | |
| | | | |Deficit 21 millions
| | | | |tons in 1913.
| | | | |Addition of Saar
| | | | |production
| | | | |(17,000,000 tons)
| | | | |will not cancel the
| | | | |deficit, as the
| | | | |needs of the local
| | | | |district and those
| | | | |of former German
| | | | |Lorraine will absorb
| | | | |that or more. Mines
| | | | |wrecked by Germany
| | | | |produced 20,000,000
| | | | |tons; Germany to
| | | | |supply equivalent
| | | | |amount until mines
| | | | |rehabilitated.
| | | | |France must continue
| | | | |indefinitely to
| | | | |import coal and
| | | | |coke.
---------+------------+----------+-------+-------+--------------------
Russia |Bituminous | | | |Russia, with poorly
(Included|chiefly | 32.3 | ... | 8.1 |developed fields and
in above |Bituminous | | | |great future needs,
is the |(Some brown | | | |has imported from
Dombrova |coal) | 7.0 | | |Great Britain and
field of | | | | |Germany; through
Poland) | | | | |loss of the Dombrova
| | | | |field (extension of
| | | | |Upper Silesian
| | | | |basin) needs more
| | | | |coal than can
| | | | |produce and is
| | | | |unlikely ever to be
| | | | |an exporting
| | | | |country.
---------+------------+----------+-------+-------+--------------------
Belgium |Bituminous | 22.8 | 4.9 | 8.9 |Belgium has high-
|Coke | 3.5 | 1.1 | 0.4 |grade steam coals
|Briquettes | 2.6 | 0.6 | 1.1 |and some coking
| | | | |coal; beds are deep
| | | | |and difficult to
| | | | |mine. Its exports to
| | | | |Holland and France
| | | | |probably will in
| | | | |future continue to
| | | | |be exceeded by
| | | | |imports from
| | | | |Westphalia and Great
| | | | |Britain.
---------+------------+----------+-------+-------+--------------------

[8] Compiled by George S. Rice.

TABLE 8.--COUNTRIES IN EUROPE LARGELY DEPENDENT ON IMPORTS OF FUEL. PRODUCTION AND IMPORTS, 1913[9]

Millions of metric tons

[9] Compiled by George S. Rice.

=Conclusions.=--As regards political control, three great national or race factors loom in the future of the coal industry and in the development of wealth and power: the European, dominated by England; the American, by the United States; and the Asiatic, by Japan. The efforts of England during the war temporarily prostrated her, and diminished the grip of her export coal and bunkering trade, but conditions late in 1919 indicated that recovery might be rapid. The immediate growth in the mining of coal for use at home, with consequent progress in steel and other industries, however, will be greatest in the United States, because of our gigantic resources. In the East, however, are indications of a development of China’s coal and the growth of attendant industries on a scale which may in time outstrip those of any country except America, and transfer the bulk of wealth and power to the two great civilizations, on either side of the Pacific--the newest, that of America, and the oldest, that of China and Japan. The war and the settlements after the war proved an unmixed benefit and opportunity to Japan, and enabled her so to strengthen herself in China and Korea that she is not only the preponderating power in the East, but may claim a sphere of influence and a wide protectorate for Asia, far more effective than the American Monroe Doctrine.

Having regard to national internal economy and external and internal effectiveness, the United States will clearly neglect the main function of government if it fails to exercise an effective supervision and regulation of the coal industry. This industry is national; every citizen has an interest in it, and a right to expect its administration for the highest benefit of all.

TABLE 9.--PRODUCTION AND IMPORTS OF FUEL OF SOUTH AMERICAN COUNTRIES IN 1913[10]

Millions of metric tons

[10] Compiled by George S. Rice.

TABLE 10.--1913 PRODUCTION, EXPORTS, AND IMPORTS OF COAL OF PRINCIPAL COUNTRIES OF ASIA AND AUSTRALIA[11]

Millions of metric tons

[11] Compiled by George S. Rice.

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Political and commercial geology and the world's mineral resourcesChapter II: Coal (2)

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