The Economic Aspect of Geology

by C. K. Leith

No attempt will be made here to present the detailed figures on which the above generalizations are based. In view of the present disturbed conditions of production and consumption, any judgment as to future demands or available surplus must take into account several factors which cannot be accurately measured,—such as financial control in foreign countries, possible tariffs, and foreign competition. For this reason the above statement should be regarded as only tentative, though it is the result of a rather exhaustive study of conditions in relation to the world control of shipping. The classes named overlap to some extent, and it is to be expected that some of the commodities placed in one class may in the near future be transferred to another.

In terms of value, the United States has a potential export surplus of minerals about twice as large as that of all the rest of the world put together. Countries which were neutral during the war have the remaining export surplus. Great Britain, France, and Italy have net import requirements considerably in excess of their exports. Germany has almost as large a deficit of minerals as the United States has a surplus.

From the above facts it is clear that, in any scheme of international control or coöperation, the United States would have by far the heaviest stake, and perhaps the most to lose by restriction. It seems equally clear that the preponderance of exportable surplus of minerals over necessary imports justifies the United States in taking a broad and liberal view of the importation of needed minerals. The war-time necessity of making our country as nearly self-sustaining as possible does not seem to obtain in peace times. To carry that principle to an extreme means not only the expensive use of low-grade domestic supplies, but the elimination of the imports which are so necessary to balance our export trade.

These facts also raise the question as to how far the United States is justified in exploiting the rest of the world to add to its already great preponderance of control,—as, for instance, in copper. Any further aggrandizement of our position in regard to such minerals may be directly at the expense of neighbors who are already far less well supplied than ourselves, and is to be justified only on the basis of adding to the world's supply for common use, and of lending our expert assistance to neighbors to make them more nearly self-supporting. To carry out our campaign in these cases without regard to the needs of other countries will obviously not hasten the ideal of a democratic world with equal opportunity for all. On the other hand, the great freedom allowed by our laws in regard to foreign commercial control of our minerals, as compared to the restriction on such control in other countries, suggests the desirability of exerting our pressure for the open door policy in all parts of the world, in the interest of desirable reciprocal relations.

In this connection there has been a tendency to criticise England's post-war activity in securing oil reserves for the future. Self-interest has clearly dictated the necessity for improving England's weak position in regard to this vital energy resource. The success of this movement obviously means a lessening of the future preponderance of the United States in the oil industry, and calls for increased activity on the part of the United States in maintaining the desirable leading position it has long held. From the writer's viewpoint, however, the fair success of a rival does not call for criticism of motives. If there is any just criticism, it applies to methods (see pp. 390-391).

Whatever action may be taken by the United States in regard to international mineral questions, it is clear that the war has brought this country into such world relations that it has become imperative for us to study and understand the world mineral situation much more comprehensively than before,—in the interest not only of intelligent management of our own industries, but of far-sighted handling of international relations. Under the stress of war the government, especially through the Geological Survey, the Bureau of Mines, and the several war boards, found it necessary to use extraordinary efforts to obtain even elementary information on the international features of mineral trade. Much progress has been made, but only a start. The geologist or engineer who fails to follow these investigations may be caught napping in the economic phases of his work.

THE COAL AND IRON SITUATION OF WESTERN EUROPE UNDER THE TERMS OF THE PEACE TREATY

A mineral problem of special international importance at the present time relates to the disposition of the coal and iron resources of Germany. Germany's coal and iron have been the basis for its commanding position in industry and commerce. In fact, its development of these resources has been probably the most vital element in the European economic situation. The terms of the Peace Treaty in regard to these commodities have far-reaching consequences, not only for Germany but for all Europe, and indirectly, for the world.

Germany (Westphalia) outclasses all other European sources in grades of metallurgical coal, in quantities produced, and in cheapness of production. Both France and Belgium must continue to be dependent on this source for important parts of the coking coal for metallurgical purposes, notwithstanding France's acquisition of the Saar Basin, which produces mainly non-coking coal, and the development of new reserves in Belgium. Germany's command of coal is wrecked in several ways. The French take over full and absolute possession of the coal of the Saar Basin, though Germany has the right to repurchase it at the end of fifteen years, in case this territory then elects for union with Germany. The coal of Upper Silesia, with a production of about 23 per cent of the total of all German hard coal, is to be ceded to Poland, subject, however, to plebiscite. Germany undertakes to deliver to France each year, for not to exceed ten years, an amount of coal equal to the difference between the annual pre-war production of the French coal mines destroyed as a result of the war, and the production of the mines of the same area during the years in question,—such delivery not to exceed 20,000,000 tons in any one year of the first five, nor 8,000,000 in any one year of the succeeding five years. In addition, Germany agrees to deliver coal, or its equivalent in coke, as follows: to France 7,000,000 tons annually for ten years; to Belgium 8,000,000 tons annually for ten years; to Italy an annual quantity rising by annual increments from 4,500,000 tons in 1919-20 to 8,500,000 tons in each of the six years 1923-24 to 1928-29; and to Luxemburg, if required, a quantity of coal equal to the pre-war annual consumption of German coal in Luxemburg.

The total pre-war coal production of Germany in 1913 was 191,500,000 tons. The diminution of production due to loss of territory in Alsace-Lorraine, in the Saar Basin, and in Upper Silesia amounts to about 61,000,000 tons. The further required annual distribution of coal to France, Italy, Belgium, and Luxemburg amounts to about 40,000,000 tons. This leaves about 90,000,000 tons for Germany's domestic use, as compared with a pre-war domestic use of 139,000,000 tons. Even then, these calculations make no allowance for coal to be used in export trade to neutrals or other countries, some part of which seems vital to Germany's trade. They make no allowance for the deterioration of plant and machinery in the mines, which will delay resumption of coal production. They make no allowance for the diminution in working hours and the lack of transportation. In short, unless there is a miraculous recovery and development of Germany's coal industry, impossible conditions have been imposed. Some recognition of this fact appears in the great powers to adjust terms which have been vested in the Reparations Committee. Successive revisions of requirements by the Reparations Committee have already reduced the direct contributions of coal from Germany nearly fifty per cent. The entire European coal situation is in a state of chaos. It was found necessary in 1918 to appoint a Coal Commission under international control, to attempt to allocate and distribute supplies. It seems inevitable that the physical facts of the situation will prevail, and that the control of the Allies will resolve itself into efforts to distribute and coördinate supplies so as to keep the European machinery going, more or less regardless of the terms of the Peace Treaty.