Political and commercial geology and the world's mineral resources

by Unknown

THE FUEL MINERALS

Petroleum

is of the utmost present importance and its future importance will be even greater. Recently 98 per cent. of the world’s production has been contributed by the following countries in this general order of importance: The United States, Russia, Mexico, Dutch East Indies, Roumania, India, Persia, and Galicia. It is believed that the region around the Caribbean Sea and the Gulf of Mexico will be of increasing importance, as will also the Persian and Mesopotamian fields.

United States capital is supreme in the commercial control of the petroleum industry in the Western Hemisphere; while British and British-Dutch interests easily dominate the petroleum situation in the Eastern Hemisphere.

Commercial control of petroleum is determined mainly through ownership by operating companies of lands, leases, or concessions. State ownership is rare, although in Argentina the petroleum industry is owned and operated by the state. The British government controls by direct ownership of a majority of the voting stock, the Anglo-Persian Oil Co., which gives it a monopoly of the Persian field, through the concession of an area of 500 square miles from Persia to the company, and closes the field to the enterprise of the United States or other nations; moreover through ramifications of this company, the British government is extending its hold to other parts of the world.

In the United States the commercial control of the petroleum industry is in the hands of the “Standard Oil Group.” British and British-Dutch companies in the United States control a production of about 11,000,000 barrels a year, out of a total of 335,000,000. In the important region of Mexico, which now takes second place in production, the commercial control is entirely in the hands of foreigners: American interests control 65 per cent. and British and Dutch interests 32 per cent.

In the Eastern Hemisphere, the productive field of the Dutch East Indies is under absolute control of British-Dutch interests, the Royal Dutch-Shell Syndicate. Prospecting licenses and concessions are granted only to Dutch subjects and to Dutch companies, and this, with the economic monopoly of the controlling British-Dutch interests, prevents foreign enterprise.

The absolute and exclusive control of the great oil fields of Persia and Mesopotamia by the British government will be confirmed and extended by the extension of the British Empire over those portions of the Turkish Empire which she won by force of arms.

In Russia the commercial control of the great petroleum industry seems to be British, the predominant interests being British, Franco-British, and British-Dutch (Royal Dutch-Shell Syndicate). The principal producing areas in Russia are or were till recently under British military control.

The production of India (Burma) is entirely in British hands.

“The general policy of the British Empire seems to be to control all oil development and restrict operations by foreign capital.” Such restrictions by government regulations exist in Australia, Canada, India, Barbados, British Guiana, British Honduras, Trinidad and other colonies.

In the oil industry, then, we have a remarkable and striking division of the world’s wealth between the two great Anglo-Saxon nations, America and Great Britain. No mineral lends itself so readily as oil to transportation and hence to commercial control. According to the present production, American interests are largely in excess. However, the British control of the great fields of the Eastern Hemisphere, many of them only partly developed, together with her growing hold in the Western Hemisphere, indicates the likelihood that the British grip of the world’s oil resources and production may in the future become predominant.

Striking phases of the situation are that in the case of Great Britain the government and the oil monopolies are united, so that to all intents and purposes the control being obtained is by the British government direct; while in the United States the control is in the hands of purely commercial interests, operating without the control, assistance, or sympathy of the government. American companies may not own and operate oil lands in the British Empire, in the French possessions, or the Dutch colonies, but there are no American restrictions on foreign ownership or operation.

The policy of Great Britain, furnishing her petroleum and oil bunkering stations all over the world, and assuring her control of the seas, will further immensely increase her already extensive world domination.

The United States has no such program of imperial expansion, but she has her Monroe Doctrine, which is to a mild degree an assumed protectorate over the Western Hemisphere.

Coal.

—Next let us take up coal, among the most important of all minerals—source of power, light, and heat, and smelter of iron and other metals. Here again, as in oil, we find the United States wonderfully endowed by nature. She is credited with reserves of 3,527,000 million tons out of a total 7,909,000 million in the world, or practically half of the whole world’s supply. As the world’s coal reserves are large, the high-grade varieties, so situated as to have cheap transportation, are of most immediate importance. Great Britain has such coal close to seaboard, and so, until the war, controlled the export trade all over the world. The industries of America leave her little coal for export, and her coal is farther from seaboard. The efforts of Germany before the war to build up a coal-export trade were hindered by the long rail haul; and these deposits are now being handed over to France. Besides France, Great Britain, and the United States, only Canada, Australia, and China have sufficient reserves for extensive export trade. Of these countries, China is the one most likely to increase exports, on account of nearness to the coast, and good quality of coal.

Although the coals of the United States are not so close to the coast as in England, they not only constitute by far the largest reserves, as above stated, but are also most immediately available, owing to their shallow depth and the good railway transportation facilities.

No natural substance is so universally used, and so necessary to every individual, as coal, and hence every individual feels a natural right to it, and believes that it should be available at a minimum cost. This has resulted in several countries in the nationalization of the coal industry, as in parts of Chile, Bulgaria, Prussia, and Australia. In other countries, as in parts of the United States, the government retains the ownership of coal lands, leasing them to private operators. In England the present conditions point toward the nationalization of the coal industry. In France the coal lands belong to the government, which gives concessions for their operation, and receives a royalty or rental and a percentage of the net earnings of the operator.

Although the United States is pre-eminent among the world’s nationalities as regards coal, England has the advantage of having adequate supplies scattered all over the world, in her colonies of Australia, Canada, India, New Zealand, South Africa, Rhodesia, and Borneo.

Unlike petroleum, coal is a mineral which does not lend itself readily to control by commercial combination. The mining and marketing of coal is a simple matter, requiring relatively little skill or equipment, so that it is a business open to everybody; and the vast extent of coal lands assures a multitude of owners. Therefore the effect of the control of coal on the world’s commerce and history is almost entirely a matter of political control. Organization among producers exists in various countries, as in the case of the anthracite industry of the United States, but this does not as a rule extend to a central ownership, nor does it usually extend to foreign countries.

In coal, then, as well as in petroleum, we find the two dominating nations are the great Anglo-Saxon powers, England and the United States. The United States mines about 40 per cent., or two-fifths of the world’s annual production, while the British Isles have produced one-fifth of the production, making them second only to the United States. In neither case have the respective governments in the past attempted to control the mining and the sale of coal, but in England, at least, it is likely that some form of joint control, participated in by the government and the miners, will come.

The methods of mining necessary for maximum production of British coal mines during the war resulted in putting the mines in such poor condition that it will be a year or two before they can supply all of the former British export trade. The demands of British workmen for shorter hours (resulting in decreased production) will hinder still further a resumption of large exports. One of the important phases of this, to England and America alike, is the South American trade. England has always supplied this market, but the United States will probably do so for the present, and should take care to do so if she desires South American trade, and on the commercial theory of the Monroe Doctrine. Up till recently, the United States has exported by sea only about 4 per cent. of her production, whereas England sent out 25 per cent. Our own expanding industries have provided an ample market.

Aside from America and England, there is no dominating factor in the future control of the coal industry in the lands surrounding the Atlantic Ocean. Germany was a strong factor before the war, but the loss to France of the Saar coal district, and the possible loss, to Poland, of the Dombrova field, in Silesia, will deprive her of her importance; and the division among several nations of these resources will prevent any one of them from becoming a world’s factor in the coal trade.

In the lands about the Pacific Ocean, however, the most important future factor is the coal fields of China. No country except the United States has larger reserves of high-grade coal ready for development and not far from ocean transport. It is likely that the Japanese may attempt this development and the fostering of an export trade in the Orient. The high-grade coals of the United States are remote from the Pacific Ocean, and could only be available for Pacific trade by the long route of the Panama Canal. It is not unlikely, therefore, that Chinese coal may in the future be supplied to our own Pacific ports by the Japanese at a less price than American coal can be put there, and that through this development Japan may be able to dominate the Pacific trade, as England has dominated that of the Atlantic and the Pacific in the past.