Changes During the War
The war wrought fundamental changes in the world movement of minerals. The character and distribution of the demands changed. Customary sources of supply were cut off. Financial disturbances and ship shortage profoundly modified the nature, distribution, and extent of the world movement. Our domestic mineral industry was abruptly brought to a realization of its vital relations with international trade. To illustrate, the large movement of manganese from India and Russia to the United States was abruptly stopped, and we had to develop a source of supply in Brazil. The stoppage of pyrite importations from Spain as a means of saving ships required the development of pyrite and sulphur supplies in the United States. The export of oil from the United States to European countries was greatly stimulated, and the export to other countries was correspondingly decreased. The world movements of coal were vitally affected, principally by the limitation of the coal shipments from England and the United States to South America and the concentration of shipments to European countries. The closing of German coal supplies to nearby countries also had far-reaching consequences. The cutting off of the German potash left the world for the time being almost unsupplied with this vital fertilizing ingredient. The Chilean nitrates, on which the world had relied for fertilizer purposes, were diverted almost exclusively to the manufacture of powder. The total annual imports of mineral commodities into the United States were reduced by 1,200,000 tons. Our exports, though they continued in large volume, were mainly concentrated in Europe. The story of these disturbances in the world movement of minerals, though highly interesting, is too long to be told here.
Out of these sweeping and rapid changes in the world movement of mineral commodities there arose, partly as cause and partly as effect, international agreements for the allocation of minerals, as a means of insuring the proper proportions of supplies to the different countries for the most effective prosecution of the war. Inter-Allied purchasing committees in London and in Paris found it necessary to make an inter-Allied allocation of the output of Chilean nitrate, because the sum of the demands exceeded the total supply by a considerable fraction, and to agree on the distribution and prices of the world's supplies of tin, tungsten, and platinum. For many other commodities agreements of various sorts were made. For instance, the United States entered into an agreement with England and France for the purchase of iron ore and molybdenum from Scandinavia to keep it out of Germany. The United States and England agreed as to supplying Canada with ferromanganese. New problems of world allocation came up almost daily.
Another war change in mineral conditions, of a more permanent nature, was the liquidation of German ownership and control of minerals in allied countries, and in some cases even in neutral countries.
Post-war Condition of the Mineral Trade
The mineral industry has by no means reverted to its pre-war condition. The old movements have been only partially resumed, and new elements have entered. Shipping is still disturbed. Governments have been coöperating in various ways in the liquidation of government stocks of minerals. The German commercial control of minerals outside of its boundaries, as noted above, has been much weakened. The Reparations Committee created by the Peace Treaty has enormous powers over the use and distribution of the mineral resources of Germany, which directly and indirectly affect the mineral supplies of Europe and all the world. The terms of the Peace Treaty changed in fundamental ways the international channels of mineral movement.
The mineral situation of Europe is in such a state of chaos that the combined efforts of governments will be necessary for many years to bring order. This will be accomplished partly through the Reparations Committee, but may require other forms of coöperation. An international coal commission has already been formed to look after the distribution of coal through Europe. International coöperation in mineral distribution is not merely a theoretical possibility for the future,—it is now the outstanding fact with reference to the European situation.
The recognition of their dependence on neighbors for important mineral resources has led to earnest efforts on the part of nations to supply deficiencies. The great activity of the British government in acquiring oil is one example. The falling off of gold production the world over, together with the increased disparity between gold reserves and the currency issued against them, is causing serious consideration of government action to encourage the gold industry by financial measures tending to increase the profit of the miners (see pp. 224-225).
Before and since the war most countries of the globe, outside of England and the United States, have gone far in the exercise of the right of eminent domain over mineral resources within their own boundaries. Even in England the recent movement to nationalize the coal and oil resources is an indication of the general tendency. In the United States the movement has manifested itself thus far only in the increasing reluctance on the part of the government to part with mineral resources on the public domain,—as is clear from the terms of its new leasing law to cover oil, coal, gas, potash, and phosphates on public lands.
Before the war only the German government was clearly identified with private interests in international trade and in the acquirement of mineral reserves. Since the war all governments except that of the United States are taking an active part in these fields, both directly and in coöperation with private capital. The British government has taken a direct financial interest in certain companies, such for instance as the Anglo-Persian and Shell Oil Companies, and in some cases is actively interested in the acquirement of selling contracts. In England there is a wider use of voting trusts in controlling private companies, with the purpose of preventing the control from falling into alien hands. Government control of shipping in certain countries is involving various degrees of control of mineral movements. Also, through loans and bonds, mineral resources in certain countries have been tied up by the loaning governments. There has been wide extension of government control of minerals in mandatory territories and elsewhere through many new loans and regulations. These steps are in effect closing important parts of the world to private initiative, and particularly to nationals of other countries. Whether these activities of governments are economically desirable or not, they are the actual conditions, not theories.