Another considerable group of conservational practices is possible only to governments or other public agencies. This group of practices on the whole requires some sacrifice of the immediate financial interest of the individual, in the interests of the community as a whole, or in the interests of posterity. In this group may be mentioned the compulsory use of methods of mining, sorting, and metallurgy which tend to conserve supplies but result in higher prices; the control of prices; the elimination or lowering of the so-called resource or royalty value (p. 375); and the removal of restrictions on private combination or coöperation, leading to more efficient methods, lessening of cost, and better distribution of the product; or, what might amount to the same thing, the acquirement by the government of the resources to be operated on this larger scale.
The most effective conservation measures yet in effect are the ones dictated by self-interest and instituted by private initiative. Governmental measures are not yet in effective operation. Illustrations of these two types of conservational effort are cited in relation to coal on later pages.
THE INTEREST RATE AS A GUIDE IN CONSERVATION
In striking a balance between the present and the future, economists have emphasized the importance of recognizing the interest rate as a guiding, if not a controlling consideration. It is obviously difficult for private capital to make investments of effort and money for the purpose of conservation which will not be returned with interest some time in the future. For the present, at least, this consideration furnishes the best guide to procedure in the field of private endeavor. So far as conservational measures, such as investment in an improved process of concentrating low-grade ores, promise return of capital and an adequate interest rate in the future, they are likely to be undertaken.
It is clear that governments are not so closely bound by this economic limitation. They can afford to carry their investments in raw materials and processes at a lower interest rate than the private investor. Their credit is better. Taxes do not figure so directly. They can balance losses in one field against gains in another. As a matter of insurance for the future of the nation, a government may feel justified in inaugurating conservational measures for a particular resource without hope of the interest return which would be necessary to the private investor. In appraising the iron ores of Lorraine taken over by France from Germany at the close of the war, the actual commercial value of these ores, as figured by the ordinary ad valorem method, was only ninety millions of dollars. It is clear, however, that to France as a nation the reserves were worth more. They could afford to pay more for them, and could afford to spend more money on conservational practice than under ordinary commercial limitations, because of the larger intangible and more or less sentimental interest.
The valuation of this larger interest, as a means of determining the limit to which conservational investments may be made, lies in the political field. It may be suggested, however, that a desirable first step in any governmental program of conservation is to ascertain the cost and the possibility of an adequate return of capital and interest. These determinations at least afford a definite point of departure, and a means for measuring the cost to the people of measures which are not directly self-supporting.
ANTI-CONSERVATIONAL EFFECTS OF WAR
Experience during the recent past indicates that the exploitation of mineral resources for war purposes is on the whole anti-conservational. It is true that the vast amount of war-time exploration and development, as well as the thoroughgoing investigations of the utilization of various minerals, have led to better knowledge of the mineral resources and their possibilities. It is also true that the war required a much more exhaustive census of mineral possibilities than ever before attempted. The immediate and direct effect of the war, however, was the intensive use of mineral resources without careful regard to cost, grade, or many other factors which determine their use in peace times. For instance, in ordinary times considerable quantities of high-phosphorus iron ores are mined; but, because of the fact that such ores require more time for conversion into steel, war-time practice concentrated on the higher-grade, low-phosphorus ores, resulting in an unbalanced production which in some cases amounted almost to robbing of ore deposits. In the case of coal, quantity was almost the only consideration; it was impossible to grade and distribute the coal to meet the specialized demands of industry. The results were a general lowering of the standards of metallurgical and other industrial practices, and increased cost. High-grade coals were used where lower-grade coals were desirable for the best results. In the making of steel, it is the custom to select the coal and coke with great care in regard to their content of phosphorus, sulphur, ash, and other constituents which affect the composition of the steel product; but during the war it became necessary to accept almost any kind of coal, with a resulting net loss in quantity and in grade of output.
For a considerable number of mineral resources, such as the ferro-alloys, foreign sources of supply were cut off during the war, requiring the development and use, at high cost, of low-grade scattered supplies in the United States. It was found possible to produce enough chromite in the United States for domestic requirements, but at two or three times the normal price of imported chromite. The grade was low and the loss in efficiency to the consuming interests was a high one. The extremely limited natural supplies were raided almost to the point of exhaustion.
With the post-war resumption of importation of minerals of this kind, producers naturally began a fight for a protective tariff, and the question is yet unsettled. The tariff, if enacted, would in most cases have to be a high one in order to permit the use of domestic supplies. The results would be a large increase in cost to other industries, decreased efficiency, and the early exhaustion of limited supplies in this country. Most of the mineral resources have been concentrated by nature in a comparatively few places in the world; and when the two elements of conservation are considered—the materials themselves and the human energy expended in obtaining and using them—it is clear that any measure which interferes with the natural distribution of the favored ores is anti-conservational from the world standpoint.