POLITICAL AND COMMERCIAL CONTROL

The actual control of the world’s tungsten deposits differs considerably from that indicated by the production within political areas. Actual control is justly obtained through ordinary competitive buying, ownership by nationals (sometimes by governments) of deposits, and through commercial alliance. Control through ownership of banks and transportation lines may be just or it may be by coercion and commercial brigandage, seizing ports for coaling and repair stations—methods that are merely refinements evolved since the days when “They sought their fortunes as they pleased abroad, the crown annoying them with no inquiry to embarrass their search for Spanish treasure ships, or their trade in pirated linens and silks.”[86]

[86] Wilson, Woodrow. “A History of the American People,” vol. 1, p. 25.

Table 29.—Actual Control of the World’s Tungsten Output in 1917 and 1918.
In Short Tons of 2,000 Pounds

19171918
QuantityPercent-
age of
world’s
output		QuantityPercent-
age of
world’s
output
British:
Possessions
Burma and Shan States 4,600  4,870
Federated Malay States   853    920
Trengganu   350    350
Johore and Kedah   200    582
India    75     46
Australia 1,404  1,662
New Zealand   241    146
England   265    330
South Africa    24     37
 8,01228.4 8,943 24.9
Obtained through trade and political pressure
Japan and Korea (including ores for France)   790 None
China and Hongkong (including ores for France) 1,105    900
Siam   600    600
Billiton and Singkep    60     60
Argentina -(including ores for France) 2,035    950
Bolivia
Peru
Portugal   960    800
Spain (including ores for France)   446    425
 5,99621.3 3,735 10.4
Total ores under British control14,00849.712,67835.3
French:
France   182    180
Tonkin   422    450
Siam   170    190
Portugal   650    440
Bolivia (See [Great Britain])? ?
Argentina (See [Great Britain])? ?
 1,424 5.3 1,260  3.5
German:
Germany   200    200
Austria   150    150
Norway?
Portugal? ?
Spain? ?
   350 1.2   350  1  
American:
Mexico   340    326
Peru -  4,320  4,680
Bolivia
Argentina
Japan and Korea (including some Chinese ore) 1,010  1,650
China and Hongkong   395  9,300
Portugal   130     60
Siam    30     12
Domestic production 6,144  5,068
12,36943.921,150 59  
Japanese: (Quantity smelted only)
China?    300 - 1.3
Norwegian:
Norway    10     10
Russian:
Russia   110    150
Total28,178 35,832

Owing to the close relationships between some foreign governments and private firms—as illustrated by the German government’s interest in dye, potash, and shipping firms, and the British government’s participation in nickel mining and ferrotungsten-making companies—it is not practicable to draw a line between governmentally and privately controlled deposits. In countries with weak governments, the deposits owned by British subjects are to all intents and purposes British; but foreign deposits owned by Americans are not necessarily under American control; in fact, instead of helping and encouraging our pioneers in foreign trade we are apt to harass them and destroy their business with drastic tariff laws.

In effect, the preceding [table] merely shows where the ores of different countries go for treatment; it is, of course, only a generalization, for trade conditions constantly change. For instance, Japanese electric furnaces are beginning to smelt tungsten ores, though at present to the extent of only 10 to 15 tons of contained tungsten per month, but it is conceivable that the output may be increased greatly. Although Japan could control the disposition of its ore, it is given credit for control only of its smelted ores. The exact distribution of ores from Argentina, Bolivia, Peru, Portugal and Spain can not be given.

British Control.

—During the war the British government demanded and obtained all of the tungsten ores produced in its colonies and possessions. This restriction was later lifted as regards to Canada, and a new rule allowed Canada to ship tungsten ores to other Entente nations, but as Canada was not a producer the license granted amounted to nothing except as it eased the feelings of the Canadians. Scheelite deposits had been discovered in Manitoba, however, that for a time seemed to be potential producers. Nominally Siam has remained free from British control because more or less under the zone of influence of the French, but diplomatic pressure seems to have been exercised at Bangkok. The Siamese ores mostly contain some tin and have gone to Singapore for separation; and when once within the British possessions, of course they could not be exported. The English control of Siamese shipments, however, seems as complete as if the ores came from an English province. Mr. Nassuer, of the Siamese American Trading Co., testified before the Tariff Commission at San Francisco, June 28, 1918, that his company wished to ship ore to the United States but the British minister to Siam would give no permit. The company took the matter up with our State Department and finally got permission to ship 10 tons.

In February, 1918, the Chemical Products Co., of Washington, D. C., protested to the Department of State at Washington with reference to British interference with exportation of tungsten ore from Siam to the United States, stating that the company was working under conditions peculiar to itself in that it employed an expensive process developed to handle low-grade ores obtainable at a much lower price than the regular grades on the market; that it entered into an agreement with an American working tungsten mines in Siam for the purchase of his tungsten ore, only to find that through control of port privileges at Singapore and Hongkong the British effectually prohibited it or any other American firm from obtaining the material. Of course, this, like other incidents mentioned, took place under the shadow of a desperate war when strictness was to be expected, but the shipments asked were to an ally from a country not openly under control of Great Britain. Doubtless no such objections would be offered now, but the incidents show the efficiency of these methods of controlling commerce.

In southern China, Hongkong being the port for Kwangtung and Kwangsi, and parts of southern Kiangsi and Hunan, the British for a while exercised control over the export of ores produced in those districts,[87] refusing to allow the reshipment of ores unless they were sent to England.

[87] Anderson, George E.: American Consul General, Hongkong, China. “Tungsten from South China.” Commerce Reports, Nov. 9, 1917, p. 546.

Foreigners, including Americans of course, are not allowed to own mining property in Burma, the Federated and Unfederated Malay States, or Australia, territory producing nearly all the tungsten ores of the British Empire.

In Argentina small tungsten mines are owned by English companies.[88]

[88] Sharp, Ralston C.: “Wolfram Deposits in the Argentine.” Mining Magazine, London, vol. 18, May, 1918, pp. 230-233.

In Bolivia the English and French governments during the war leased mines directly, and came into direct competition with American business men engaged in buying or producing tungsten ores.

British traders are constantly striving to increase their control of Bolivian tungsten ores. At present the English seemingly have complete control of the financial system of Bolivia, so far as foreign exchange is concerned. An American interested in a tungsten mine in Bolivia has informed the writer that it is almost impossible to do business with English banks, because they insist that if they extend commercial courtesies, even for pay, the recipient must buy only English mining machinery. The buddle, which for dressing tungsten ore is obsolete in other countries, is said to be still used in Bolivian mills under English control. If miners do not wish to deal through English banks, they are compelled to cable money to and from New York at considerable expense. The American banking interests represented in Bolivia seem conservative in advancing money on ore shipments, whereas German and English representatives are said to advance up to 80 per cent. of the market value of ores shipped. Mining corporations controlled by English firms ship to England, and Americans can not compete for the production. Such a firm is Aramayo Francke Mines, Ltd., which produced 2,050 long tons of tin concentrates, 226 tons of wolframite concentrates, and a considerable output of bismuth in the year ending May 31, 1916. Control of the Bolivian mines by the English is not yet dangerous to American interests, except through the banking system, but entire control may be passed to them, to the Germans or the French, through American tariff legislation.

In Portugal, English companies control a number of the mines, and it has been alleged by at least two Americans[89] that the English government, through its representations at Lisbon, for a period of more than two years, prevented title passing to American companies. The Thermo Electric Ore Reduction Corporation, Ltd., seems to be the chief English owner of Portuguese tungsten mines.

[89] Personal communications.

In the Dutch East Indies, the British are understood to control the present wolframite production of about 5 tons a month.

French Control.

—French control of tungsten deposits is not large. It includes the production of France and of Tonkin, a part of that from Portugal, and a comparatively small interest in Bolivia. During the war, control in Portugal was attempted by England and France. The prices offered by the English and French were much below the market prices at New York, and the Portuguese government stepped in and raised prices to a point somewhat lower than those of the United States, but 20 per cent. higher than the prices offered by England and France.

Japanese Control.

—Japan has within her own borders a considerable number of tungsten deposits in the southern part of the islands, but all are small. In Korea important deposits have been discovered and actively worked, especially within the last two years. Deposits in Manchuria are said to be controlled by the Japanese; little is known of them, and if they exist they are probably small. Japanese ores have largely come to the United States for several years. As has been said, Japanese firms have erected electric furnaces in which a part of the tungsten ores are reduced, probably the equivalent of 25 to 35 tons per month of concentrates carrying 60 per cent. WO3.

American Control.

—The United States controls entirely the tungsten deposits within its own borders and Alaska. Americans operating in Mexico have produced 200 to 300 short tons of scheelite concentrates per year, from deposits in the Sahuaripa district, Sonora. Wolframite is said to have been shipped from Sinaloa to the United States, but its real origin is unknown. Contact metamorphic deposits about 60 miles southwest of Nacozari carry 0.7 per cent. WO3 and 1 to 2 per cent. copper. They are owned by Americans but are not now productive.

In Bolivia, Americans own some of the more important tungsten mines. The American firms known to own tungsten properties there are W. R. Grace & Co., local address, La Paz; Stewart, Wilson & Hepburn, Oruro; Easley Inslee, La Paz; and C. Dillon, Oruro. Their total output is estimated to amount to about 1,600 tons, out of a total output of more than 4,000 tons for the country.

In southern China, American firms have largely developed the tungsten trade, so that through this source the United States (or rather American capital) controls, unless hindered, a yearly output of perhaps 9,000 short tons of tungsten concentrates.

In Siam one or two United States companies have attempted to produce tungsten, but English influence during the war made difficult the shipment of even small lots of ores to this country.

Because it offered higher prices than other countries, and because the more direct and shorter trade route made trade with this country advantageous to the Japanese, the United States largely controlled the Japanese output of tungsten ore in 1918. This trade probably has been somewhat curtailed and will be further diminished through the erection of electric furnaces in Japan. The table following shows the tungsten ores imported for consumption into the United States in 1918, but gives a poor idea of the ores shipped from the countries of origin; Chinese ores lag three months and South American ores about two months. The table gives only the ores actually received during the year. [Table 29] shows more nearly the ores shipped to the United States during the year.

Chinese ores are treated as averaging 67.5 per cent. WO3 and other ores 65 per cent. WO3.

Table 30.—Tungsten-bearing Ores Imported into the United States in 1918, by Countries as Listed at Ports of Entry, and by Probable Countries of Origin

As listed at portsProbable origin and equivalent
in 60 per cent. WO3
CountryQuantity,
short tons		ValueCountryQuantity,
short tons		Value
Argentina536$730,722South America, including:
Argentina
Bolivia
Chile
Colombia
CostaRica
Ecuador
Panama
Peru
Salvador		4,181$3,746,299
Bolivia88122,357
Canada56115,863
Chile1,2511,209,864
China2,3842,068,636
Colombia5665,124
Costa Rica1819,081
Ecuador69,979China, including:
Hongkong,
“Other British East Indies;”
also Canada		6,811 5,708,616
France293,400
Hongkong3,5953,511,046
Japan1,3611,700,332Japan1,4741,700,332
Mexico264224,247Mexico286224,247
“Other British East Indies”1913,071Portugal,
including: France		6121,160
Panama3740,614
Peru1,8271,488,516Siam128,583
Portugal2717,760
Salvador4060,042Unaccounted for157142,981
Siam118,583
Unaccounted for145142,981
11,750$11,552,218 12,882$11,552,218

Unhindered by other governments, this country would have imported even larger quantities of ore, because of its paying higher prices and being more liberal regarding impurities.

The table shows that the United States imported 36 per cent. of the tungsten output of the world; this amount added to the domestic output makes a total of 17,921 tons, or 50 per cent. of the world’s production. Owing to the lag in shipments from South America and China the South American ores received in January and February were from the output of 1917, as were the Chinese ores arriving up to the end of March. Subtracting the ores arriving from the two regions during the first two and three months, respectively, of 1918, and adding the ores arriving during a like period in 1919, make the quantity of ore controlled by the United States in 1918 (as shown on [page 153]) equivalent to 21,131 tons of concentrates carrying 60 percent. WO3, or 59 per cent. of the world’s production. These ores were all controlled through the private initiative of American firms who offered better prices and better terms than could be obtained abroad. Probably a larger proportion could be handled in the future, should interference not come from within our own borders. It is now proposed to put a tariff of $10 a unit on tungsten ores without regard to purity or quality, with a correspondingly high tariff of $1 a pound, plus the 15 per cent. ad valorem duties now in force, on metal in any form—element, alloy or salt; and such a bill has passed the House of Representatives. Its advocates believe that the price, now about $7 a unit in New York, will be raised to $17 a unit.

Hereafter the quantities of tungsten ore handled will be much smaller than during 1916, 1917 and 1918; and will be confined to peace-time needs unless some unforeseen war arises. England, according to government estimates about January, 1920, had two years’ supply, and France is probably as well supplied. The United States probably had on hand an equivalent of quite 8,000 tons of ore carrying 60 per cent. WO3. Makers of tool steel figured on a consumption of 7,500 tons during 1919, but because of the lack of market for ore this was much too high; and probably 4,000 tons is large enough, so that there will likely be little market for new supplies for nearly two years, except as ore may be bought speculatively. During this time, mines everywhere must remain idle until a demand again arises, except for those mines required to furnish tungsten for Germany, Austria and Russia and the small quantity required by Sweden, Norway and Italy. If industries in Germany, Austria and Russia recover so that they can buy and use tungsten, Germany will have regained in the ores that will be eagerly offered by producing nations needing a market, a part of the trade she has lost. Traders of England, France and the United States will be glad to sell tungsten and ferrotungsten, but Germany will undoubtedly reach out for raw material in order that she may make as much use as possible of her abundant unemployed labor. Should a tariff law like that now proposed be passed, the United States will have cut off its foreign supplies and will have ended its control of any considerable part of them. However, should a high price be maintained, artificially or otherwise, the development of other alloy steels for use in multiple-edged tools may have reached a point where not so much tungsten will be needed.

German Control.

—Germany had no considerable tungsten deposits at home, and none in the foreign territory she held, but in 1913 her control through business alliances covered about two-thirds of the world’s output of tungsten ore. In that year, according to the German official figures, 5,295 short tons of tungsten ores were imported. Most of this probably carried 65 per cent. or more WO3, equivalent to, say, 5,736 tons of concentrates carrying 60 per cent. WO3. Adding the 106 tons of Saxon concentrates produced in that year shows that Germany treated a total of approximately 5,840 tons out of a world’s output of 8,864 tons, or about 66 per cent. of the total. The United States in the same year produced 1,537 tons and imported 449 tons of unknown content, but the whole was probably equivalent to more than 2,000 tons of ore carrying 60 per cent. WO3, leaving only about 1,000 tons for other countries, most of which seems to have been treated in France. This trade Germany lost when with Austria she started the World War. With the cutting off of all shipments by ocean to Germany, most of the foreign ores were denied her, but undoubtedly small quantities leaked in through Sweden and Norway for some time after the war began. The small output of Austria was always available, and it is said that a considerable quantity of ore was smuggled across the border of Portugal into Spain, thence by water to the western frontier of Italy, into Switzerland, and from there shipped direct to Germany. A considerable part of the Spanish production is said to have reached Germany in this way also, and the “crippled” submarines that ran into Spanish ports are reported to have carried out cargoes of tungsten for Germany. From available data it is impossible to confirm or to disprove these reports, and, in giving them, their doubtfulness is fully recognized, but such possibilities must be acknowledged.

In the Allied countries and the United States, the German interests were taken over by the governments, but in South America the German firms still hold some control of tungsten-bearing properties. In Bolivia four German firms are said to have an output of about 600 metric tons of ore a year. In Peru what is said to be the larger part of the tungsten deposits has been controlled by firms thought to be German, E. y W. Hardt and Carlos W. Weiss y Cia. In Argentina the Hansa Mining Co., a German concern, is the principal producer. Its output is said to be about 500 tons of concentrates a year, but even this output is said to have come to the United States during the war. If the United States is placed under a prohibitive tariff, Germany may easily recover a large part of her control of the world’s tungsten trade.