THE PRECIOUS METALS

Gold.

—In the group of precious metals, gold is of the most importance, mainly as the time-honored and unreplaceable measure of value and medium of exchange. This position it has sometimes shared with silver, but no country has ever refused to thus recognize gold.

Gold is found all over the world, but the British Empire produces 60 per cent. of it, while the United States produces 20 per cent. Political and commercial control are nearly identical in the case of gold, which is easily reduced to the metal state and thenceforth passes current, requiring no selling agencies. Due to the commerce brought on by the war, the United States now has a larger gold reserve than any other nation.

Silver.

—“Silver,” says our author, “is used both for money and in the arts, the former use being the more important and more essential. In some countries, especially those producing silver in large amounts, it is the money standard, either alone or with gold. In other countries on a gold standard silver is used for subsidiary coinage. In India and China it is used for the settlement of foreign trade exchange balances.”

In countries with elaborate financial systems, where paper currency is freely accepted, as in the United States and Europe, it is not such an essential money metal; but in other countries it directly replaces and conserves gold. On this account silver is not an article of luxury, but an essential. The coinage of silver increased in Europe as the war progressed, and was essential in bringing supplies from the Far East to the battle fronts. While the normal annual silver production is around 159,000,000 ounces, the demand during 1918 exceeded 500,000,000 ounces. Silver production adds to the stock of money, increases confidence in financial conditions, and furnishes, with and subsidiary to gold, a basis for credit. About half of the world’s silver output is as a by-product of the production of other metals, notably lead and copper; and accordingly the production of silver is largely independent of the price.

Of the world’s total silver production, over 80 per cent. comes from the mines of the Western Hemisphere. For many years Mexico was the leading producer, until all its industries became disorganized by revolution. The United States, always a close second, is now in a leading position. Canada, Central America, and South America are important. In the Eastern Hemisphere, Australia is the leading producer.

The principal silver deposits of the world are controlled politically by the United States, Mexico, and Great Britain, these three controlling 85 per cent. of the total production in 1913.

Platinum.

—Platinum is controlled chiefly by Russia, being produced otherwise in important quantity only in Colombia. American interests predominate in Colombia. Before the war there was an interlocking of the interests of the platinum refiners of the United States, Germany, and Great Britain, with the German influence very marked.

Fig. 23.—The control according to political sovereignty (territorial ownership) of the world’s mineral production.
(Facing page 540)

POLITICAL CONTROL (TERRITORIAL)

Prepared by: John E. Orchard,
Assistant Mine Economist,
U.S. Bureau of Mines, May 1, 1919

[191] Recent

Fig. 24. The control, according to commercial or financial ownership of the world’s mineral production. (Insert following Fig. 23)

COMMERCIAL CONTROL (FINANCIAL)
(Percentages are Estimated)

Prepared by John E. Orchard
Assistant Mine Economist
U.S. Bureau of Mines, May 1, 1919

[192] Recent

Who Owns the Earth?

—The answer to our inquiry at the head of this chapter, “Who Owns the Earth?” is therefore answered by these summaries, and is further set forth in the accompanying charts, one showing political (or, rather, in this case, strictly territorial) control, and the other commercial control, [Figs. 23] and [24]. As based upon the territorial and commercial control of the fundamental minerals, it appears that the earth is owned by the two great Anglo-Saxon nations, the United States and the British Empire: the former by destiny and good fortune and without political plan or policy, in that such a vast store of mineral wealth was found in the great sparsely populated wilderness of America which it occupied; the latter through the imperial policy of Britain, developed through hundreds of years by the need of extending commerce and the flag into far-off lands to supplant the slender resources of its own limited islands. Of the two, the United States is rather in the lead, and possesses and controls more of the world’s mineral wealth than any other nation; but Great Britain is a close second.

Rapid changes occur, however, in these days, and the future must be inspected. The imperial policy of expansion and increasing political control has become a tradition and an instinct with Great Britain; she learned since the loss of her American colonies to give full autonomy to her more intelligent colonies, so that she strengthens her dominion thereby, and persistently goes on her way putting more and more of the earth under the British flag. The wealth and resources of the United States being so far greater than its necessities, foreign problems have resolved into occasional questions of self-protection; and from this condition a directly resulting theory has sprung, of non-interference in the rest of the world. Like China, we declare ourselves apart from the world, and simply ask to be left alone, in consideration of which we agree to leave the world alone. Our Monroe Doctrine as originated is part of that theory—we wanted the world to leave all the Americas alone, but took no responsibility for the Americas otherwise—a selfish and one-sided position.

The manner in which we cling to this doctrine is stupid and ineffective: while we have conceived of it only as applying to military or political encroachment, we have overlooked the modern phase of commercial conquest. Thereby we gain the suspicion of our Latin-American neighbors, who accordingly welcome more gladly European or Japanese rather than American capital; and thus we encourage the very encroachments we have thought to prevent. We should either abandon the Monroe Doctrine entirely, or define it also in terms of political control.

Therefore, as regards our great industries, and, more specifically, our mineral industries, we have never had any definite policy; our troubles and problems were purely internal, and the Government’s efforts were largely directed to preventing such solidarity of any one industry that its power should be too great, although American organizing genius first successfully developed these colossal business combinations, rising without government support. England, too, and France, with their democratic traditions, tended to resist the overwhelming power of great business organizations, as leading to the destruction of equal opportunity and threatening the power of the state. It remained for Germany, pressing impudently toward the conquest of the world, to see the advantage of combining the powers of the state with those of business monopolies, as a means of regulating industry at home and overpowering other nations. Thus the old question of the union or separation of Church and State becomes one of Business and State.

The success of this plan of German penetration was most clearly and disagreeably brought home to the British mind, as well as to the French and the American perception, by the war, and during the war England took under government control her mineral industries more definitely and systematically than did we. Moreover, perceiving the success of the German system as a means of penetration and as a method against competitors, she has adopted it, there being a striking tendency to put her key industries under syndicates, unions, cartels, or trusts controlled directly by the state.

A system of state socialism thus takes the place of the freedom of individual competition. As regards the mineral industries, much the same action has been taken by France. But in America, dropping all the problems and half-learned lessons of the war, we return to the status quo ante. If this difference continues, it is certain that British control of the earth—whereby we mean its minerals—will eventually preponderate. As far as we are concerned, we should perhaps rather see it in the hands of Great Britain than of any other power, but must we not decide upon our own course as a rich and populous nation of an increasingly close-packed but seething and yet unorganized globe?

Our statesmen, newspapers, and financiers proclaim to the world that we intend to take the lion’s share of the world’s shipping and commerce. England says nothing, but puts her government directly behind her own industries, while the American Government still holds aloof from them. Nationalism has been revived in Europe, and especially in England and France, as the result of the struggle to prevail against the intense German nationalistic spirit, which all but subjugated a world drifting comfortably into internationalism. It is conceivably a step backward, a reversion, but what attitude shall America take? The British and French nationalism need not disquiet us so much as that of the Japanese, still more intense and purposeful, and working with the same German tools (not invented in Germany, but in America, but, like most German arts, successfully copied and utilized), now adopted by England and France in self-defense. America also has had a rebirth of nationalism, quite necessary in the existing state of affairs.

As the case now stands, the United States largely predominates in the petroleum industry, with 71 per cent. of the world’s production in 1917; England, far behind, is in a way to overtake us with giant strides under her new system. In the basic necessities of coal and iron, the United States also leads. The second place in the steel industry, held by Germany, was presumably lost as a result of the war, and probably passes to England, already second in coal and with her iron industries in charge of a government-controlled syndicate for purposes of protection and expansion.

In copper, the United States is far away in the lead, with England a long second, and in lead, also, with half the world’s production, with England second. Before the war England and Germany were about tied for second place, and the latter was rapidly drawing ahead through her state-controlled commercial methods; but the war will set her back greatly. In zinc, the United States had the greatest production (32 per cent.) before the war, slightly more than Germany (28 per cent.), but German methods gave it the preponderance of actual commercial control. The result of the war will restore the commercial supremacy to the United States, and the importance of England will increase. In silver, the United States now leads in production and in both territorial and commercial control, and, by her commercial control over Mexican production, controls one-half of the world’s output, with Great Britain a strong commercial second, having nearly 40 per cent. of it.

In the production of the important mineral, sulphur, the United States is far in advance of the world, with 65 per cent. of the world’s production in 1916. Italy is second, Japan third, and England is practically unrepresented. Phosphate rock is dominated, both territorially and commercially, by the United States, but there are other supplies for England, and France has abundance in her own territory. Vanadium is commercially controlled by the United States, although territorially by Peru. Molybdenum has very lately come to be controlled by the United States, with Great Britain, formerly first, now second. In uranium and radium the United States also has first place, with Austria a long second. The aluminum industry is strongest in the United States, although very important also in France.

In the following, however, Great Britain has control: the important “key industry” of tin, where her territorial control is one-half and her commercial control absolute, whereas the United States is not represented; in the important nickel industry, by territorial control of 80 per cent., and by a commercial control that is now probably predominant over the strong American interests, as a result of an active government policy; in tungsten, where she controls territorially the greatest production (34 per cent.), and where she has commercial supremacy, controlling 54 per cent. (1917), the United States being second, with a commercial control of 35 per cent. (although its territorial control is only 17 per cent., about equal to that of Bolivia).

In manganese, Russia nominally leads, with 36 per cent. commercial control (55 per cent. of the world’s production in 1913); but under present conditions the effect is to give England the lead, with the United States in a position of minor importance. In chromium, Great Britain and France control through a syndicate, in which the British interest is in the majority, and the United States occupies a subordinate position with regard to both these countries. In gold production the British Empire controls 63 per cent.; the United States 23 per cent. In graphite in 1913 the British Empire was second to Austria-Hungary. It will now take the first place, and the United States will be a competitor. In asbestos, the British Empire produces 87 per cent. and controls commercially 63 per cent. of the world’s total, the United States being negligible in production, but second in commercial control (of Canadian asbestos). Mercury, territorially, is mainly in the hands of Spain, but the industry is actually dominated by England, under selling arrangements. Antimony has long been controlled by England, but control may revert to China, which means the possibility of its becoming Japanese. Mica, essential for electrical work, is controlled by Great Britain.

Only a few minerals remain in which most of the industry is not in the hands of either the United States or England: potash, formerly a German monopoly, and now divided between Germany and France, with Germany likely predominant; and mineral nitrates, in Chilean territory, with no marked national commercial control other than that of Chile.

Both America and England are strong in their grip on the world’s mineral industries—England much stronger than before the war and with a freshly set purpose to expand. A combination of these two countries would amount to a practical world control of minerals, and, with France, a little stronger control. This much for the present, but uncertain quantities loom shadowy, in the destiny of Russia, the future of Asia, and the progress of Japan. Japan is intently embarking on a course toward the domination of Asia, politically and commercially. Her present position is not so significant as the consideration of her rapid progress, the knowledge of the rich field in which she is to work, and a study of her militaristic methods, which remind one of those of Germany. Japan holds to no ally that will not (temporarily) aid her in her forward march, and in the weakness of Russia, China, and Korea she sees her opportunity. The war to her was an unmixed blessing. She took no chances, and seized enormous advantages.

There are three great figures of nations which seem to have been destined to be, in these times, of critical importance to the United States: in the past Germany; in the present, Great Britain; in the future, Japan. The German question was settled in the only possible way; for England the only sane solution is a closer-knit alliance; and for Japan, watchfulness and friendly intentions.