Previous to the war, Germany anticipated being deprived of Chilean nitrate by developing fixation and by-product processes, through which she supplied herself during the war. Other countries have not been so thorough. During the war, the danger of the United States being cut off from supplies of Chilean nitrates by the German submarine campaign, led to the Government projecting and starting four large and expensive plants for nitrogen fixation. They were unfinished when the war closed.
About five-eighths or less of the nitrogen consumed has been from various organic sources, including the by-production from coke making. By-product nitrogen in the United States is estimated at around one-eighth of the entire supply. The remaining three-eighths has been furnished largely by Chilean nitrates.
THE PRECIOUS METALS
Gold.
—In the group of precious metals, gold is of the most importance, mainly as the time-honored and unreplaceable measure of value and medium of exchange. This position it has sometimes shared with silver, but no country has ever refused to thus recognize gold.
Gold is found all over the world, but the British Empire produces 60 per cent. of it, while the United States produces 20 per cent. Political and commercial control are nearly identical in the case of gold, which is easily reduced to the metal state and thenceforth passes current, requiring no selling agencies. Due to the commerce brought on by the war, the United States now has a larger gold reserve than any other nation.
Silver.
—“Silver,” says our author, “is used both for money and in the arts, the former use being the more important and more essential. In some countries, especially those producing silver in large amounts, it is the money standard, either alone or with gold. In other countries on a gold standard silver is used for subsidiary coinage. In India and China it is used for the settlement of foreign trade exchange balances.”
In countries with elaborate financial systems, where paper currency is freely accepted, as in the United States and Europe, it is not such an essential money metal; but in other countries it directly replaces and conserves gold. On this account silver is not an article of luxury, but an essential. The coinage of silver increased in Europe as the war progressed, and was essential in bringing supplies from the Far East to the battle fronts. While the normal annual silver production is around 159,000,000 ounces, the demand during 1918 exceeded 500,000,000 ounces. Silver production adds to the stock of money, increases confidence in financial conditions, and furnishes, with and subsidiary to gold, a basis for credit. About half of the world’s silver output is as a by-product of the production of other metals, notably lead and copper; and accordingly the production of silver is largely independent of the price.
Of the world’s total silver production, over 80 per cent. comes from the mines of the Western Hemisphere. For many years Mexico was the leading producer, until all its industries became disorganized by revolution. The United States, always a close second, is now in a leading position. Canada, Central America, and South America are important. In the Eastern Hemisphere, Australia is the leading producer.