[116] The United States Metals Refining Co. was a subsidiary of the United States Smelting, Refining & Mining Co., sold, 1920, to the American Metal Co.
Therefore, the only copper controlled in 1918 by Vogelstein through selling was about 50,000,000 pounds a year, the output of mines owned by Consolidated Arizona Smelting Co. (about 5,000,000 pounds) and the imported copper, of which about 45,000,000 pounds was treated in 1917. The latter is controlled by Vogelstein not only by selling of the product but in part by smelting contracts and in part probably, as regards South America, by ownership of mines.[117]
[117] L. Vogelstein is reported to have sold his interests to the American Metal Co. and subsequently, early in 1920, to have acquired a fifth interest in that company.
Beer, Sondheimer & Co.
has never been a large factor in the United States copper industry, although much interested in zinc. But the firm does control the sale of some copper and owns a smelter at Norfolk. This smelter treats imported ores for the most part, but also obtains some copper from pyrites (sulphur ores) coming from the United States and Canada. Perhaps as much as 10,000,000 pounds of domestic copper was sold by Beer, Sondheimer & Co. in 1917. The company owns an important Cuban mine.
As American capital owns American copper mines, smelters and refineries, German interests were able to obtain a foothold only through selling organizations (trading in metals), which later they extended to close working arrangements with electrolytic refineries, which were naturally interested in finding a good cash market for their output. The fact that Germany prior to 1914 was the biggest foreign buyer of United States copper, made easy the successful development of the carefully laid German plans.
In the future such plans can be guarded against by encouraging copper producers to sell their own output. All the large producers already do this, a change in this respect having developed since 1914. Sales in foreign markets can now be properly managed under the provisions of recent legislation permitting copper producers to enter into a combination in the sale of export copper. This counteracts the old German system of a buyers’ combine against the sellers of copper, which was an important factor in forcing American producers to have German concerns sell their product. But it will be necessary for the electrolytic refineries to co-operate in this policy of American selling control of American copper. Producers whose output is only a few million pounds per annum probably cannot afford to establish their own selling agencies; such producers will include all who have no smelter but ship to custom smelting plants. The production can be sold by the large custom smelting plants, which are American owned, or these small producers could establish a common sales agency. Other larger producers, as those whose copper is now sold by the American Metal Co., should be enabled to do their own selling. In this they have been blocked by the lack of refining facilities, except on a basis that took away from them selling control of their product. This situation can be corrected by regulations that put electrolytic refineries on a recognized toll basis for all American customers. All refineries have about the same costs and their combined capacity is ample to treat all the blister copper that will be produced. They should receive good profits on the business, but it should be unlawful for refineries to refuse to treat blister copper on toll and insist that copper must be sold to them outright. The toll system is already in use at several refineries and has proved satisfactory.
As shown above, there are in the United States a few very large refineries whose ownership is in few hands. If these refineries control the sale of all the production of copper several objectionable features develop. The few sales agencies handle so much copper that there is a tendency to co-operate with representatives of foreign consumers who can buy in large quantities, and it is not difficult to manipulate the market temporarily, in disregard of actual conditions of demand and supply. Thus the entire output of copper, one of our great natural resources, is placed in the hands of groups who, while interested in mining, are more interested in refining. The best interests of the industry are more nearly those of the miner than of the refiner. Therefore, the most positive dislodgment of former German control of copper through selling will come from the breaking up of the former system and transferring each unit of that system to other hands; rather than transferring the old units in block to non-German hands. Sales of American copper should be handled by a large number of separate agencies actively competing for the domestic market; this is essential in the interests of the consumer and of the country. But export copper business should be handled through one agency or association representing all the sales agencies, as is now legal, and this should be done in the interests of the producer and of the country.
Reserves of United States Copper Mines.
—The developed reserves of United States copper deposits are fully equal, in proportion to output, to such reserves in foreign copper deposits. This insures the fact that for the next ten years, at least, the copper production of the United States will maintain its present relative dominance over all foreign countries.