Political and commercial geology and the world's mineral resources

by Unknown

Most of these mines are privately owned under a variety of laws in the several German states and provinces. Originally the developments are said to have taken place under various local regulations; for example, in Hanover the mining rights belonged to the property holders, in Saxony the prospecting rights were free and the mining concessions belonged to the first discoverer of the deposits without regard to the owner of the surface soil, and in Anhalt mining was at first declared to be a state monopoly, which was later contracted to a few private companies. Some properties are, however, owned and operated by the state. The Prussian government owns mines at Stassfurt, Bleicherode, and Vienenburg; the Duchy of Anhalt has large works at Leopoldshall; and the Duchy of Brunswick holds interest in some potash properties.

Two instances of participation by American concerns in the German industry are known. The International Agricultural Corporation, an American company organized in 1909, was for a time the owner of all the capital stock of the Sollstedt Works in Germany. Later, one-half interest in this American corporation was transferred to the Kaliwerke Aschersleben, another German concern, under conditions which seemed to complicate the matter of ownership. The Virginia-Carolina Chemical Co., of Richmond, Virginia, is reported to have purchased a controlling interest in the Einigkeit Works, presumably by a direct cash transaction.

Under a law of the German Reichstag, known as the potash act of the 25th of May, 1884, an obligatory control of the potash industry in Germany was ordained. A common agency, known as the Kalisyndikat, was established, to represent all of the mines, with power to control the opening of new mines, the output of each mine, and the selling prices of potash salts. The industry has thus become a trust re-enforced by the German government, although the private ownership of individual properties remains. This syndicate differs from an American syndicate in that it is formed for a limited period of time, in the present case 5 years, and its working capital is small, only enough to provide for the actual working needs of the organization. The object of the syndicate is to prevent disastrous competition, to insure that the supply will conform to the demand, and that reasonable profits may be obtained by producers.

The mines or works composing the potash syndicate, as with most mining syndicates in Germany, may be either of the limited liability sort, the shares of which are not assessable, or those whose capital stock is divided into shares called “kuxe,” which are assessable at anytime and are of unlimited liability. The shares of both kinds are dealt in on the exchanges in the large cities of Germany.

Each company that is a member of a German syndicate has its representative on the board of management of the trust, and this board fixes the quota of production allowed each mine, and generally administers the affairs of the entire combination under its constitution and by-laws (statuten).[156] The constitution and by-laws must be signed by each concern entering the syndicate and the provisions therein contained strictly observed under penalties enforceable in courts of law.

[156] Abstract from Daily Consular and Trade Reports, No. 265, vol. 4, Nov. 11, 1911, p. 760.

The weak point in this form of organization is the dissension that often arises over the quotas allowed the different members. Each company wants as large an allotment as it can get. Upon the expiration of the life of a syndicate there is always uncertainty as to whether it will be renewed, owing to competition among the various constituent firms.

Before the war, under the terms of the contracts of the five large fertilizer companies with the German potash syndicate, one-half of the maximum discount allowed was deducted from the amount of the invoice covering each shipment, and the remainder was paid to the buyer at the end of each half year, provided he made a statement in writing to the syndicate to the effect that he had purchased his entire requirements of potash from the syndicate. Thus by allowing maximum discounts to the large buyers, and preventing them from dealing in potash from any source except the syndicate, this provision aimed to stifle the development of any competitive sources of supply.

Alsace.

—The potash deposits of Alsace were developed under the German mining law for Alsace-Lorraine of December 16, 1843, amended July 14, 1908, with specific reference to potash. Since the armistice the German mines have been operated under the sequestration régime, under charge of the French military authorities, directed by the ministry of industrial reconstruction in France. Now that the treaty of peace has been ratified by Germany, Alsace may be regarded as having formally and finally passed into the possession of France, and with this naturally the political and commercial control of the Alsatian potash deposits. It remains therefore for the French Parliament to determine what the final disposition of the former German ownership of these properties shall be, and questions such as nationalization or French-Alsatian control were being discussed in the summer of 1920.