German Control.
—Germany had no considerable tungsten deposits at home, and none in the foreign territory she held, but in 1913 her control through business alliances covered about two-thirds of the world’s output of tungsten ore. In that year, according to the German official figures, 5,295 short tons of tungsten ores were imported. Most of this probably carried 65 per cent. or more WO3, equivalent to, say, 5,736 tons of concentrates carrying 60 per cent. WO3. Adding the 106 tons of Saxon concentrates produced in that year shows that Germany treated a total of approximately 5,840 tons out of a world’s output of 8,864 tons, or about 66 per cent. of the total. The United States in the same year produced 1,537 tons and imported 449 tons of unknown content, but the whole was probably equivalent to more than 2,000 tons of ore carrying 60 per cent. WO3, leaving only about 1,000 tons for other countries, most of which seems to have been treated in France. This trade Germany lost when with Austria she started the World War. With the cutting off of all shipments by ocean to Germany, most of the foreign ores were denied her, but undoubtedly small quantities leaked in through Sweden and Norway for some time after the war began. The small output of Austria was always available, and it is said that a considerable quantity of ore was smuggled across the border of Portugal into Spain, thence by water to the western frontier of Italy, into Switzerland, and from there shipped direct to Germany. A considerable part of the Spanish production is said to have reached Germany in this way also, and the “crippled” submarines that ran into Spanish ports are reported to have carried out cargoes of tungsten for Germany. From available data it is impossible to confirm or to disprove these reports, and, in giving them, their doubtfulness is fully recognized, but such possibilities must be acknowledged.
In the Allied countries and the United States, the German interests were taken over by the governments, but in South America the German firms still hold some control of tungsten-bearing properties. In Bolivia four German firms are said to have an output of about 600 metric tons of ore a year. In Peru what is said to be the larger part of the tungsten deposits has been controlled by firms thought to be German, E. y W. Hardt and Carlos W. Weiss y Cia. In Argentina the Hansa Mining Co., a German concern, is the principal producer. Its output is said to be about 500 tons of concentrates a year, but even this output is said to have come to the United States during the war. If the United States is placed under a prohibitive tariff, Germany may easily recover a large part of her control of the world’s tungsten trade.
PRODUCTION PLANTS AND PROCESSES
The spread of knowledge, particularly that regarding electric furnaces, makes the control of the tungsten trade through secret processes or superior skill extremely difficult, and so far as the United States, Great Britain and France are concerned, gives little advantage to any one. Japan is perhaps somewhat less advantageously placed. Smelting plants are so easily, quickly and cheaply erected that they do not offer any great chance for monopoly. Cheap power, high technical skill and knowledge, originality and boldness in experiment, excellence of organization, generous dealing with producers, an honest product honestly sold, good transportation facilities, and broad sane laws are the elements that will give control. The United States may have this control through reasonable effort, but selfish laws may still more easily wreck control of the larger part of the world’s trade, reduce our tungsten business to a provincial scope, and make the product high priced for all time.
WHAT CONTROL MEANS IN THE UNITED STATES
In years of good business before the World War, the United States used an equivalent of 3,000 to 4,000 short tons of concentrates, carrying 60 per cent. WO3 per annum. When the war began there was a lull while the attacked countries caught their breath and prepared for a long struggle. After plans had been made, and the manufacture of munitions had begun on a grand scale, the demand for tungsten rose enormously. All kinds of ores were taken at fabulous prices. Ores carrying tin, phosphorus, sulphur and bismuth, that before would not have been considered by steel makers, were taken with avidity, and there was a great scramble for deposits. In October, 1918, the United States was using tungsten ores at the rate of 20,000 tons per annum. Meanwhile prospecting had uncovered so many new deposits and they were so actively exploited that great stocks of ores were accumulated in the Entente countries. On the other hand, in this country many of the known deposits showed signs of impoverishment, a number after being worked profitably for a short time became wholly inoperative, and it is likely that some of the deposits that have seemed to be the richest will never again produce largely. Among the new discoveries were the contact metamorphic deposits of the Great Basin, in California, Nevada and northeastern Utah. They were partly developed, and several promise well, but the irregularity of contact metamorphic ore deposits is notorious.
In 1916 with prices ranging from $15 to $93.50 per unit, the United States produced 5,969 tons of concentrates; in 1917 while still under the impetus of the 1916 boom, with prices ranging around $25 per unit, 6,144 tons; and in 1918, with prices still averaging about $25 per unit, 5,041 tons, although little was produced in December. Under a price of $17 per unit, which tariff advocates think can be reached by means of a tariff of $10 per unit, it seems improbable that the United States can depend on a production of more than 3,000 tons per annum for the next three years. There are, of course, possibilities of a larger production and there are equal possibilities of a smaller. Should another great war take place, an event that is not beyond the range of imagination, the United States would probably begin by using tungsten at the rate of 20,000 tons of concentrates per annum. Unless the price were even more extravagant than the highest price in 1916, $93.50 per unit, the United States could not produce half of its needed concentrates, and the time required to reach even that output would be far too long for safety. Of course, such a production would be much better than none, but the United States should, for safety, have within reach at least a year’s supply.
The Pacific, around the borders of which are the largest tungsten deposits, is by many looked upon as the next large theatre of war, and however vitally they were needed, the obtaining of supplies of tungsten ores might become impossible though the blocking of trade routes. It would, therefore, seem vastly better that, instead of putting a premium on the quick depletion of our own supplies, which are already too meager, we should use the rich low-priced ores now being mined in the Orient. These cheap ores we may have in trade for the asking, and it would be one of the best forms of national life insurance for the government to store 10,000 tons of these ores while they may be had.
The argument is often made that by putting a high tariff on tungsten ores we would have our own deposits so developed that quick production could be made when needed; also that with the need we would find more ores. Both arguments are specious. What is meant is not development but removal. No one will open a tungsten mine to let the ores stand against the country’s day of need. The finding of new ores is a probability, but the quantity is wholly a question. Few tungsten mines of the United States can be profitably worked at the present price of about $7 per unit, and the mines are now closed. The number of persons dependent on the mining of American tungsten ores is small, probably less than 900 in peace times. At present most tungsten miners have already obtained other employment, and practically all could obtain employment fully as profitably in other mines, many of which are short handed, so that no great hardship would be worked. As a matter of national economy, the United States can not afford to throw away its chance to buy cheap tungsten ores while they are available. Aside from the question of insurance and even of existence during another war, not to buy South American ores is to throw away South American trade. In a degree this is also true of Chinese and Japanese ores.