XXVII. NITROGEN
BY CHESTER G. GILBERT
USES OF NITROGEN
Plant life requires nitrogen and gets it in the normal cycle of events. But when the occasion calls for stimulating the growth of plant life by feeding, by soil fertilization in other words, nitrogen in available form is indispensable. Further down along the channels of food supply it exercises another and equally important function in providing the chemical (ammonia) around which the modern practice of refrigeration is built. Likewise, the chemistry of explosives is basically the chemistry of nitrogen compounds. Nor is this all, for chemical operations in general--hence research and industrial chemistry in general--involve the employment of nitrogen compounds. Such, in brief, is its status. On each of three major counts, the interests of food production, of food distribution, and of national defense, it is indispensable; and of no less consequence is the retinue of less conspicuous agencies serving the interests of chemistry at every turn.
GEOLOGICAL DISTRIBUTION
The development of fixed nitrogen sources is conditioned by three simple chemical facts. With these three simple facts in mind the rest follows largely as a matter of inference. The facts are:
That under all ordinary conditions of temperature and pressure, free nitrogen is a gas.
That it is extremely inert and indisposed to participate with other elements in the formation of chemical compounds.
That such combinations when they do occur are characteristically soluble.
In consequence of these three governing principles, along with its relationship to organic matter, as alluded to under the preceding caption, nitrogen has four habits of occurrence, worth considering as at least potential sources of supply.
=Atmospheric Nitrogen.=--Being indisposed to participate in chemical combinations, nitrogen in the course of world evolution was left largely to itself; and since in the free state it is normally gaseous, it established its home in the atmosphere. Thus it comes about that the atmosphere today is approximately four-fifths nitrogen gas, and after all is said and done the atmosphere is bound to constitute the great source to which we must turn for our supplies. With a source so boundlessly ever-present, the question of supply at first glance looks simple enough. But atmospheric nitrogen, it must be remembered, is nitrogen uncombined, and the demand is not for nitrogen itself but for nitrogen-bearing compounds. Once in a state of combination, it may remain so indefinitely, and the form of combination may be changed more or less readily to suit the demand. Before it can be put to use, however, it must be induced to surrender its gaseous freedom and affix itself in some such state of combination. The free nitrogen must become fixed nitrogen--hence the terms fixed nitrogen, nitrogen fixation, and the like in common use. Toward this end it must be induced to do what it has not seen fit to do of its own accord, and the very trait of aloofness responsible for the inexhaustible resources of atmospheric nitrogen stands as an obstacle opposing their utilization. The obstacle has not proven insuperable, as will appear later; but it is sufficiently a source of trouble even to this day, so that the fixed-nitrogen situation may with peculiar appropriateness be characterized as distinctly in the air.
=Nitrate Ore Deposits.=--The disposition on the part of nitrogen to take up its abode in the atmosphere has an obvious result in minimizing the development of mineral nitrates. Atmospheric nitrogen is not entirely stagnant, however. Natural processes are constantly at work effecting substantial fixation. The processes are not obtrusively energetic, as in the case of atmospheric oxygen, whose fixation processes constitute the ever-present phenomena of oxidation. Still, in various ways, the most prominent among which is undoubtedly a form of bacterial action, nitrification and the building up of nitrate minerals everywhere in the soil goes quietly forward, and their concentration in ore deposits of more or less plentiful occurrence is thus to be looked for in the natural course of geologic events. In attempting to trace their further course, however, we are confronted at the outset by the principle of solubility. The nitrate minerals are in the nature of soluble salts. They leach from the immediate environment in which they form, just as do the soluble minerals in general. Mostly these latter are carried in solution to the ocean, adding themselves to its salinity; but under exceptional conditions of topography, where the drainage feeds into land-locked basins, the water finds itself entrapped with no avenue of escape except through evaporation. Here the salts accumulate, become concentrated, and finally give rise to deposits.
This, in outline, is the course set for the soluble mineral salts as a class, and it is along this course that we must expect to trace the development of nitrate ore deposits. But the ocean, with its 3¹⁄₂ per cent. of salinity, has only traces of nitrate minerals; and the same is true for the waters of land-locked basins, in all the various stages of concentration. Their solubility is such that they can not have escaped in substantial form along the way. There is only one inference to be drawn. Evidently the inherent trait of aloofness is not lost to nitrogen when it does combine. The compounds do not survive for any length of time, but undergo dissociation, releasing their nitrogen and returning it to the atmosphere even as other processes are slowly withdrawing it from the atmosphere.
With this the eternal cycle is closed for nitrogen, and closed without apparent provision for any considerable side-tracking, such as would be required in the building up of ore deposits. So much for the rule; now as to the exceptions: Mostly they are of minor consequence. Pockety enrichments in the soil are common. Accumulations tend to build up in caves, and may even grow to be of consequence in a small way, as during the Civil War, when they helped materially toward relieving the nitrogen troubles of the blockaded Confederacy. In arid country, too, they not infrequently assume sufficient prominence to be of interest, especially at the hands of the promoter. Finally, there are the Chilean nitrate fields, which far from being of minor consequence, go to the other extreme in catering to the needs of the entire world.
These occurrences, especially the last named, have served to keep alive the hope that others of economic importance await discovery. The Chilean deposits alone among them all deserve more than passing notice. The origin of these deposits is veiled in uncertainty. Just why or how the natural forces, which elsewhere as a matter of universal observation have been seen to oppose both the formation of nitrogen salts and the accumulation of such as do manage to form, should have failed in this particular instance remains wholly conjectural. A conclusive explanation would be of the utmost value in determining the likelihood of similar occurrences elsewhere. But none has been forthcoming, and nothing is to be gained to the present purpose from stopping to inquire into the plausibility of the various attempts that have been made. Confronting us on the one hand are the evidences of a nitrogen cycle established, seemingly, without affording any visible loophole of opportunity for the accumulation of extensive deposits; on the other hand stands the bare fact of enormous deposition. This fact of existence unquestionably carries with it the possibility of duplication elsewhere. However, the fact of occurrence merely suggests the possibility, but does not determine the chances of recurrence. These are recorded in the prevalence of the conditions requisite to extensive deposition. In the case of nitrogen they are unique beyond comprehension, and the prospect of recurrence is to precisely the same degree unlikely. Accordingly, to all practical purposes, a review of the world’s nitrate ore deposits, both real and potential, resolves itself down to a review of the Chilean occurrence.
The Chilean nitrate fields lie in the arid valley basin to the east of the lofty coast range and just south of the present Peruvian boundary line. They do not occur as a single expansive area of deposition, but as deposits scattered here and there along the desert land at the bases of the mountain slopes. The formation consists of a conglomerate or breccia of rock material from the adjacent slopes, cemented with a mixture of soluble salts in which sodium chloride, common salt, is the dominant member, with sodium nitrate ranking second. The formation is called caliche. It lies for the most part just below the surface of the ground and varies from a few feet to many feet in thickness. Only in scattered patches is the caliche high enough in content of sodium nitrate to warrant treatment. These patches are sought out and excavated, and the picked ore is loaded in carts, which haul it to the extraction plant for treatment. Here the soluble salts as a whole are extracted in solution, and the nitrate in turn is segregated from the other salts by crystallization. Aside from haulage, hand labor is used throughout.
The caliche regarded as worth treating contains not less than 10 per cent. nitrate and ranges up to 25 per cent. and over, with an average of around 18 per cent. The product marketed is of two general grades--the ordinary, listed as 95 per cent. nitrate, and the refined, a guaranteed 96 per cent. nitrate, low in sodium chloride. The deposits have been worked more or less consistently, and with steadily increasing output, since about 1830. Their importance in the scheme of nitrogen supply may be gathered from Figures 16 to 18.
=Organic Nitrogen.=--Another source of fixed nitrogen grows out of its relationship to life processes, and is consequent on the very requirements of organized society which earlier it is called upon to assist in meeting. In other words, fixed nitrogen participates in the material cycle of life. It enters into the material demands of life for food, and it is yielded up among the material discards available to absorption. All manner of residuum, animal and vegetable alike, affords at least a potential source of fixed-nitrogen supply. Some of these are in service; others for one reason or another are not. Prominent among those in the former class are animal excreta, the so-called tankage from animal rendering plants, slaughter-house refuse, fish scrap, and vegetable-product refinery refuse. Most prominent among those still largely potential are sewage and garbage disposal.
The nitrogen from these organic sources does not appear on the market as such. Instead, the products enter in bulk into the make-up of fertilizer. They are of miscellaneous character, and only part of what is contributed collects to pass through industrial channels where its flow may be measured. The industrial flow goes on record and the records are available, but even here the nitrogen content has never been systematically computed, so the record is inadequate. For the rest, the portion that does not reach the channels of industry, there is nothing whatever in the way of data to go by. Taken all in all, then, the significance of the organic nitrogen resources is largely conjectural. This is unfortunate. Approximate figures covering the use of organic nitrogen would be of value in various connections, as in the interests of intelligent allocation in times of nitrogen shortage, as helping to determine the extent to which the growing demands of agriculture incident to the growth of population may be discounted from the consequent expansion of scavenging opportunity, or as affording a basis for estimating the very considerable influence of motorization toward increasing the demand for chemically prepared fertilizers.
As things stand, all such questions of relationship lead only to profitless speculation. Even the relative importance of the organic sources as a whole in the economics of nitrogen supply is uncertain. What they have to offer of undeveloped reserves, now taking the form of wasteful sanitation procedure, will be taken up later. Under existing conditions, it is probably fair to assume that 40 to 50 per cent. of the nitrogen normally put to use in the United States is organically associated.
=Carboniferous Deposits.=--Nitrogen in its organic relationships is bound up with carbon, of which organic matter is largely composed, and the bond between the two is entirely disestablished only as the carbon itself loses its substantial form through oxidation. In consequence of this enduring alliance, nitrogen is characteristically present in carboniferous deposits, a form of occurrence giving rise to still another, a fourth type of nitrogen resource. Coal and oil-shale loom up as the outstanding representatives of this class. In each, the nitrogen content is variable, but amounts to 1 per cent. or over. With so low a percentage of nitrogen, it goes without saying that neither of these is to be regarded as a possible source of direct supply. The cost would be prohibitive, even under the stress of the most extreme emergency. The nitrogen in a coal bed or an oil-shale formation is as worthless as the iron in any ordinary rock. But coal has other uses, and so has oil shale, or at least will shortly. The nitrogen does not have to be extracted; it gets released incidentally, and when its release is effected under conditions that prevent its escape, the result is a productive nitrogen resource. The nitrogen from this type of resource is in the form of ammonia, the relative importance of which is shown in Figures 16 to 18 and Table 66.
GENERAL ASPECTS OF CONTROL
Such is the nature of the nitrogen resources. The resource situation as a whole is represented graphically in Figure 15. None other can compare with it for inclusiveness. Its sources are animal, vegetable, mineral, and atmospheric, which is to say, universal; and out of this unparalleled diversity has grown an industrial development as complex as it is diversified, and, incidentally, in view of its bearing on food and munitions supply, as important as it is complex. The situation at best can be but imperfectly grasped, for it has been but inadequately studied. In transgressing all set rules of resource occurrence, it transgresses the limits set for organized investigation. Geologists have studied one phase of the situation, electrochemists another, sanitation experts another, and so on; and the various commercial interests involved have seen to the giving of publicity where publicity would do the most good.
TABLE 66.--STATISTICS OF NITROGEN PRODUCTION
----+-----------+-------------------------- | Organic | Chemical nitrogen | nitrogen +-------------------------+ +-----------+ Sodium | | | nitrate | | Dried +---------+-----+---------+ | blood; | | Do- | | | tankage; | | mes-| | | guano; | | tic | + |fish scrap;| World’s | pro-| | |cotton seed| pro- | duc-| | | cake and | duction,|tion,| Imports,| Year|meal; etc. | tons | tons| tons | ----+-----------+---------+-----+---------+ 1900| | ...| ...| ...| 1901| Data for |1,328,664| ...| 203,960| 1902| organic |1,349,300| ...| 205,245| 1903| nitrogen |1,485,279| ...| 272,947| 1904|indefinite,|1,559,091| ...| 228,012| 1905| but |1,754,605| ...| 321,231| 1906| probably |1,800,500| ...| 372,222| 1907| about |1,846,036| ...| 364,610| 1908| equal to |1,970,974| ...| 310,713| 1909|the total |2,110,961| ...| 428,429| 1910| for |2,465,415| ...| 529,172| 1911| chemical |2,521,023| ...| 544,878| 1912| nitrogen. |2,585,850| ...| 486,352| 1913| |2,772,254| ...| 625,862| 1914| |2,463,356| ...| 541,715| 1915| |1,755,291| ...| 772,190| 1916| |2,912,893| ...|1,218,423| 1917| |2,950,000| ...|1,555,839| 1918| |2,900,000| ...|1,845,192| ----+-----------+---------+-----+---------+
----+--------------------------------------- | Chemical nitrogen |---------------------------------------+ + Fixation | | compounds | |--------------------------+-----+------+ | | Do- | | | World’s production | mes-| | |--------+-------+---------+ tic | | | Ammon. |Calcium| | pro-| | | sulph. |nitrate|Cyanamid,| duc-| Im- | |(Haber),|(Arc), | tons |tion,|ports,| Year| tons | tons | | tons| tons | ----+--------+-------+---------+-----+------+ 1900| ...| ...| ...| ...| ...| 1901| ...| ...| ...| ...| ...| 1902| ...| ...| ...| ...| ...| 1903| ...| ...| ...| ...| ...| 1904| ...| ...| ...| ...| ...| 1905| ...| ...| ...| ...| ...| 1906| ...| ...| 386| ...| ...| 1907| ...| ...| 1,874| ...| ...| 1908| ...| ...| 2,767| ...| ...| 1909| ...| 45,450| 12,734| ...| ...| 1910| ...| ...| 22,596| ...| 764| 1911| ...| ...| 59,479| ...| 5,617| 1912| ...| ...| 115,688| ...| 7,134| 1913| 20,000|181,800| 173,026| ...|14,656| 1914| 60,000| ...| 208,070| ...|29,536| 1915| 150,000| ...| 845,388| ...|20,564| 1916| 300,000| ...|1,053,439| ...|38,023| 1917| 500,000|300,000| 954,765| ...|44,146| 1918| ...| ...| ...| ...|43,070| ----+--------+-------+---------+-----+------+
----+------------------------ | Chemical nitrogen |------------------------ + By-product | ammonium sulphate |---------+-------+------ | | Do- | | | mes- | | | tic | | World’s | pro- | | pro- | duc- | Im- | duction,| tion, |ports, Year| tons | tons | tons ----+---------+-------+------ 1900| 540,000| 27,600| 8,411 1901| 580,000| 29,279|14,486 1902| 600,000| 36,124|18,146 1903| 640,000| 41,873|16,777 1904| 650,000| 54,664|16,667 1905| 694,575| 65,296|15,288 1906| 778,365| 75,000| 9,182 1907| 906,255| 99,300|30,114 1908| 970,200| 83,400|38,238 1909| 987,840|106,500|42,914 1910|1,104,705|116,000|92,342 1911|1,206,135|127,000|94,633 1912|1,356,075|165,000|59,542 1913|1,532,475|195,000|65,775 1914|1,320,000|183,000|75,010 1915|1,690,000|249,000|36,370 1916|2,000,000|285,000|12,962 1917| ...|325,000| 1918| | | ----+---------+-------+------
But an investigation working on the basis of geology alone can not cope with the situation; neither can one on the basis of technology alone; nor one on the basis of organic chemistry, or bacteriology alone; nor yet one prepared to employ any or all of these means, but only with a view to some special end. Nor yet again does the discordant grinding of many axes make a noise from which it is possible to gather an adequate comprehension. The nitrogen situation has been inadequately treated because it has been inadequately studied. It has been studied piecemeal, always through the medium of limited means or with some special end in view. It is not a series of technical problems in geology, in bacteriology, in fixation, in munitions supply, and the like. It has to do with a composite economic structure, building for the dependence of society in peace and war alike. Until treated as such, the needs of the situation are bound to be inadequately met and its control a matter of perilous uncertainty. The present discussion makes no pretense of supplying this deficiency or of doing much of anything more than to show the extent to which it exists.
Figure 15 is designed to show not so much the scope of the resources as their composite functioning in the system of nitrogen supply. The influence of geography in the control of resources so universally available is bound to be subordinate. True, it enables Chile to exercise monopolistic control over the mineral nitrate supply, but it leaves the way open for the development of others; and while acknowledging the fullness of our dependence, as shown in Figures 16 to 18 and Table 66, we must not lose sight of the fact that it is so not of necessity, but because we have been content to leave it so rather than undertake to develop supplies of our own. So, too, with political control; what is gained in one direction is, potentially at least, offset by the possibilities opening up in others. Control of the sea gives a control over the mineral nitrate supply as absolute as that in Chile’s territorial monopoly. Yet in the recent great war, Germany, with her shipping obliterated at the outset, was not made to suffer materially from a nitrogen shortage. Britain’s supremacy of the sea went for naught. In the years before the war the force due in season to exercise control over the nitrate supply served only to stimulate the development of domestic potentialities, with the result that when the test came Germany’s proved actually to be the more advantageous equipment.
So it goes. Control over the nitrogen resources themselves is impossible. They are too universally available. Their only susceptibility to control is in the shaping of their development. This is too important a matter to be disregarded with impunity and left to develop without guidance. The modern nation that does so courts the irrepressible disaster of a nation at war but bereft of the means not only of waging war but of maintaining a food supply as well. From Figure 16 may be gathered the quality of attention given the matter of domestic supply by the different nations immediately before and during the war. Germany, it will be observed, heeded the call to give the matter special attention well before the war and had an independent system of supply developed in readiness, drawing upon the atmosphere and coal-product nitrogen with the results already chronicled. Great Britain did not ignore the importance of nitrogen, but placed reliance on her supremacy of the sea and paid little or no attention to shaping the course of developments. Nor did its importance go unheeded elsewhere abroad, and the foothold gained for fixation in France, Italy, Austria, Russia, and Japan was, it is safe to say, not wholly automatic. The United States alone among the great nations up to the outbreak of hostilities in Europe in 1914 neglected to take any special precautions whatever.
The war, when it came, far exceeded all expectations as to magnitude, and so in consequence did the demand for specially developed nitrogen supplies. To meet the emergency, some could be deflected from agricultural channels, but nothing like what was required, for food was just as important as munitions. The organic sources offered no help. Rather they were a hindrance; for organic nitrogen, broadly speaking, comes as a by-product of sanitation, and as such develops as the outgrowth of civilization’s refinements. There was a measurable response from the carboniferous sources, but these could not be made to meet the emergency, for, being of by-product order, the supply is determined not in response to the demand for nitrogen but for the major products. Dependence on the native mineral source in Chile was out of the question, or at least precarious for any country except Great Britain. Accordingly, of the four great sources it remained for atmospheric nitrogen to meet the emergency. Thus, the war in bringing the nitrogen situation emphatically to the fore, communicated practically the whole weight of its tremendous impetus to development in the one direction of fixation. The result is shown in Figure 18.
Roused by the nightmare of war in 1914, even the United States awoke to the perils if not to the real needs of the domestic situation. It is a striking and highly significant fact that despite the fundamental importance of nitrogen, the awakening found us absolutely without any formulated program of action, even military or agricultural, let alone anything of comprehensive economic scope. A hysterical effort at improvising a program ensued. We were not yet in the war, and public interest was just roused to the gullible stage. The opportunity for private pickings from public favors was too promising to go by the board. The only prospect opening up lay in the direction of fixation developments, and fixation in the hands of the promoter is one of the most appealing propositions imaginable. Its major requirements are nitrogen and power. With the former inexhaustibly present in the air and the latter inexhaustibly available in the wasting waterpowers of the country, nothing it would seem, could offer greater promise. Add to this the reflection that cheap nitrogen means cheap fertilizer, and cheap fertilizer means lowered cost of foodstuffs, and the proposition broadcasted over the country is complete. Out of the confusion of interests, public, political, and private, a program was finally evolved, following our entry into the war, calling for the erection of a series of fixation plants with an aggregate producing capacity of around 85,000 tons of fixed nitrogen annually. For the present is must suffice to say that the war ended before any of these had reached the producing stage, and the United States, like Great Britain, depended on imports.
The charts comprising Figure 16 show the influence of the war in the development of nitrogen distributively among the countries concerned. The Scandinavian developments, while actuated from wholly commercial motives, were so largely influenced by the politically stimulated market that they may well enough be included in that general class of politically controlled developments. The same is true for the neutral countries in general. Figure 18, based on the best information obtainable, is designed to bring out the collective influence of the war in contributing to the world’s supply. Organic nitrogen is disregarded both because it involves too many uncertainties and because the wartime emphasis was all in the direction of chemical nitrogen. This figure takes into consideration only the actual production and leaves out what was in process of construction when the war ended. Accordingly, while in one respect it overrates the effect of the war by including strictly commercial operations that very possibly might have transpired anyway, in another it underrates the situation by disregarding developments like those in this country. The best that can be done is to consider these as balancing each other, which, all things considered, is probably fair enough for all practical purposes. Taken on this basis, the net effect of the war, it will be observed, was to swell the production of fixed nitrogen some 40 or 50 per cent. above the figures indicated for the normal rate of expansion.
Thus the wartime shortage was made up; but all this is history. Now that the war is over, the question arises as to whether the world is due to face the situation in reverse. In making ready for war, and finally in meeting its demands, has the world been building up a 50 per cent. over-production beyond the needs of peace? Offhand, the answer would seem to be in the affirmative, but the question is not one that can be answered offhand. Agriculture is capable of absorbing an indefinite amount of nitrogen, and the war has wrought a lasting change in the agricultural situation. The changed agricultural conditions make room for much, perhaps for all, of the increment to nitrogen production. The development cannot be sustained, however, on its present arbitrary preferential basis of political expediency. Least of all can it be sustained on that basis in this country. Normally, we do not and can not be made to think in terms of war. The reason is evident enough, and its recurrent force is already apparent. Distasteful as the fact may be in some of its extremes of application, the only rational procedure is to accept it and fashion our measures of economic preparedness so that the normal activities of peace will keep our economic forces exercised and in trim for the test of war. It was recognized all along before the war that without an assured source of nitrogen supply, our system of defense was hollow; but we succeeded in building up no means of supply in direct response to political needs. We managed to get comfortably started during the war, but it remains to be seen to what extent this artificially nourished development is fitted to withstand the bitter strife of competition ahead.
COMMERCIAL ASPECTS OF NITROGEN CONTROL
Free nitrogen, it will be recalled, has no economic significance. To be available in the industrial arts it must be in a state of chemical combination. The form of compound is of secondary importance, since this may be modified more or less readily to suit the need, but its value is conditioned in terms of its availability in the form of nitrogen compounds. In consequence, the several sources are classifiable industrially under three heads:
Natural compounds--nitrogen occurring naturally in the form of marketable compounds.
By-product compounds--nitrogen rendered available incidentally in the course of operations otherwise directed.
Fixation compounds--nitrogen whose availability is dependent on special fixation treatment.
=Natural Compounds.=--Chile nitrate is the outstanding representative of the natural compounds. The guano industry, or what there is left of it, and a few other odds and ends of production from organic sources, belong here as well, but their combined output is so relatively small that the Chilean industry comprises what amounts to a monopoly of the natural resources. It is not operated as such, however, but by private capital, which owns and operates the oficinas, paying the Chilean government a royalty or export tax amounting to about $11.20 per ton. British and Chilean interests share about equally in making up the far greater part of the capital invested. The balance is largely German and American. The total capitalization in 1909 amounted to approximately $134,000,000, representing an actual valuation of about $30,000,000. Various efforts on the part of the commercial interests involved to effect combinations for the purpose of stabilizing production have been attempted, but have not been entirely successful, and the general tendency has all along been toward overproduction.
The operations, as already outlined on page 424, are crude, and the cost of production is correspondingly high, amounting to around $25 to $30 per ton at seaboard, inclusive of the $11 export tax. The nitrate is marketed largely through commission houses. The American situation is mostly in the hands of three companies, W. R. Grace & Co., E. I. du Pont de Nemours Powder Co., and Wessel, Duval & Co. The magnitude of the Chilean industry as a whole and its relative importance are shown in Figures 16 to 18 and Table 66.
=By-product Compounds.=--To this class of compounds belong, with the few minor exceptions already noted, the nitrogenous products of organic derivation as a whole, and those from carboniferous sources such as coal and oil shale. From the former source comes a miscellany of organic refuse resulting from activities dealing with animal, vegetable, and fish products, and carrying nitrogen in the form of organic ammoniates commonly left as such for use in agriculture. From the latter the nitrogen recovered is all chemical nitrogen in the form of ammonia or ammonium salts, mostly ammonium sulphate, and is available in all capacities.
The organic production is impossible of definite analysis from any angle. The lack of systematically compiled records, and back of that the miscellaneous largely decentralized character of the output, along with the fact that the producing costs are for the most part indistinguishable, leaves altogether too much to the imagination. Much of the supply is derived from connections of sanitation, especially of local sanitation, such as the rural practice, for which there is no measure whatever. Another prominent source of supply is represented in what is known as tankage, the refuse from animal-rendering plants; but here too the issue is lost in the scattering of the production, the indefiniteness of composition, and the fact that not all of the product is used as a source of nitrogen, some of it going into the preparation of animal food. The same is true of cottonseed meal and various other less prominent forms of organic waste resulting from industrial activities. Fish scrap and slaughter-house refuse from meat packing also contribute prominently and at the same time rather more definitely to the supply of agricultural nitrogen; but even here adequate figures are not available. The Federal Trade Commission undertook to analyze the 1913 consumption, with results given in the following table:
ESTIMATED CONSUMPTION OF NITROGEN IN COMMERCIAL FERTILIZERS FOR THE YEAR 1913
-------------------+-----------+-----------+-----------+------------- |Fertilizing|Consumption| Content | Units Materials | substance | (tons) |(per cent.)|consumed[157] -------------------+-----------+-----------+-----------+------------- Nitrate of soda | Ammonia | 260,000 | 18.0 | 4,680,000 Sulphate of ammonia| Ammonia | 130,000 | 25.0 | 3,250,000 Cyanamid | Ammonia | 15,488 | 18.0 | 278,784 High-grade tankage | Ammonia | 210,000 | 10.5 | 2,205,000 Concentrated | Ammonia | 18,351 | 14.5 | 266,090 Dried blood | Ammonia | 40,000 | 17.0 | 680,000 Dried fish scrap | Ammonia | 50,000 | 11.0 | 550,000 Cottonseed meal | Ammonia | 660,000 | 7.5 | 950,000 -------------------+-----------+-----------+-----------+------------- Total | ... | ... | ... | 16,859,874 -------------------+-----------+-----------+-----------+-------------
[157] A unit is 1 per cent. of a ton, or 20 pounds.
This estimate, however, takes into account only the more strictly industrial sources, leaving rural sanitation and the like out of the reckoning.
Aside from the conversion of organic ammoniates, which is practiced on a large scale only in a few instances, notably that of the Paris system of sewage disposal, four general types of industrial operation figure more or less in the production of by-product ammonia. They include coal distillation, bone carbonization, oil-shale distillation, and blast-furnace operations. The American production, however, is all derived from the first two types. Both the others are active producers abroad, especially in Scotland, but neither of them has as yet obtained a foothold in this country. The American recovery in connection with bone carbonization is of minor consequence. Practically the whole supply comes from gas works and by-product coking operations. Figure 17, in the shaded area bearing the designation “ammonium sulphate production,” shows the magnitude and trend of the production from year to year since 1900.
The organic nitrogen recovered in all of the various by-product connections taken together probably constitutes 40 to 50 per cent. of the total supply. Coal product ammonia in this country adds another 12 to 15 per cent. So over half of our supply is of by-product derivation. The domestic output is supplemented in the case of the organic form by considerable importations from South America, and, until interfered with by the war, small amounts of ammonium sulphate were imported annually from Europe. Essentially, however, the by-product supply is of domestic origin. Despite its magnitude, it occupies an anomalous sort of position industrially. It is recovered incidentally for what it is worth, and sold for what it will bring. The cost of production is largely charged off against the major operations with which its recovery is associated, and the returns are credited in conformance, as a saving in the cost of the major operations. This is equally true whether the source be that of the domestic animal on the farm, a coke oven, or a packing house.
The industrial output is built up as a sequence to industrial concentration. This is evidenced all down the line, notably in the output of coke-oven ammonia from the steel industry and in that of organic ammoniates from the meat-packing industry. It is this influence of co-ordinated industrial concentration, along with the call for the major operations, that controls the supply of by-product nitrogen; so the development and handling of the industrial output comes naturally to be largely in the hands of trade combinations. Thus, the coal-product ammonia situation is largely at the disposal of the Barrett Co., the tankage and other animal-product ammoniates gather for disposal at the hands of the packing interests, and the nitrogenous fertilizers from cottonseed are for the most part prepared and marketed by interests subsidiary to the Cotton Oil Co.
The manufacturing interests involved are concerned primarily in the manufacture of other than nitrogen products. The by-product nitrogen recovered has to compete for its market against what comes from the other two industrial classes of supply, and its price goes just low enough to enable it to do so. The limits set in the incidental character of the output leave no special incentive to carry the price competition further. Whatever additional latitude of advantage as to cost of production it possesses goes not to promoting a further reduction in the price of nitrogen but to lowering costs with reference to the major theme of production. Gas-house ammonia, for instance, does not affect the nitrogen market so much as it does the cost of gas, and the organic ammoniates recovered in connection with meat packing have not lowered fertilizer costs so much as they have kept down the cost of meat to the consumer. Thus the by-product class of supply, though the leading one in the point of magnitude, and by far the cheapest to produce, has little to do with determining the price of nitrogen. The selling price of by-product nitrogen is determined by the price the product from competing sources brings. In this country it is controlled by the price of Chile nitrate, and not, as commonly imputed, by the trade combinations that develop and handle the output.
=Fixation Compounds.=--Nitrogen has five general habits of combination: with oxygen, giving rise to nitric acid and its retinue of nitrate salts; with hydrogen, giving ammonia and the ammonium salts; with carbon, to form cyanogen and the cyanides; with basic elements, yielding nitrides; and organically, in the form of organic ammoniates. Various projects have been advanced for turning these to account in the fixation of atmospheric nitrogen. For the most part they have met with little or no practical success, but there are exceptions to the rule of failure in all five directions.
Direct Oxidation--Arc Fixation.--Nitrogen does not oxidize at all readily under any ordinary conditions, but its natural indisposition to combine with oxygen may be overcome by passing a mixture of the two gases through an electric arc. The atmosphere furnishes the nitrogen and oxygen ready mixed, so all that is needed in the way of raw materials is an abundant power supply. Arc fixation was developed in Norway, where the possibilities in the way of hydro-electric power give the best setting to be found anywhere in the world. Efforts to introduce it elsewhere have resulted unsatisfactorily, and arc fixation has made relatively little headway, as may be deduced from Table 66 and Figure 18. The reason is two-fold. So far, its use of power has proved uneconomical, and its product unsatisfactory. The former of these two objections depends for its force on the demand for power, but the latter is more decisive. The immediate end product is nitric acid, which is both difficult to transport and limited as to use. To be put in shape for agricultural use it must be neutralized in the form of a nitrate salt. Limestone is the only cheap neutralizing agent. This gives a salt, calcium nitrate, which absorbs moisture, cakes, and is thus unsuited to the American agricultural practice of machine drilling. An experimental plant near Seattle, Wash., aims to overcome this difficulty by turning out its arc product in the form of sodium nitrate, but the project is of no commercial significance as it stands.
Ammonia Fixation.--Nitrogen is no more disposed to combine of its own accord with hydrogen to give ammonia than with oxygen to give nitric acid. In the case of the Haber process, the only synthetic ammonia process that has stood the test of industrial application, the native indisposition to combine is overcome by subjecting a properly proportioned mixture of the two gases to heat and pressure in the presence of a catalyzer. This process was instituted in Germany shortly before the outbreak of the war, and as shown in Figure 16 and Table 66 has developed steadily since then. Little seems to be known as to the efficiency of the German Haber practice. Apparently, careful manipulation is necessary to obtain results. This means a skilled attention, which is incompatible with mechanical volume production and is thus unsuited to American practice. What aims to be an adaptation to American conditions was worked out by the General Chemical Co., and a plant with a rated capacity of 60,000 pounds of anhydrous ammonia per day was projected at Sheffield, Ala., at the instance of the Government. The plant was completed, but before it could be tuned up for actual production the war ended.
Cyanide Fixation.--Nitrogen, in passing through a red-hot mixture of finely divided soda ash, coke, and iron, reacts with the sodium and carbon to give sodium cyanide. This principle of fixation is being extensively experimented with, but has not been developed commercially, except in a small plant with a rated daily capacity of 10 tons of sodium cyanide at Saltville, Va.
Cyanamid Fixation.--Hot calcium carbide will absorb nitrogen, forming a compound of calcium, carbon, and nitrogen, according to the formula Ca CN₂, known as cyanamid. The cyanamid process, based on this reaction, has been extensively developed, far more so than any other of the various processes, as will be seen by referring to Figure 16 and Table 66. Offhand, it looks to be the most adaptable and consequently the most promising of the lot commercially. In this connection, however, it is interesting to examine the several charts of its growth in the warring countries given in Figure 16. In none of these is the showing indicative of a strong, healthy development. Worst of all is the case of Germany, with the contrast offered in the Haber and cyanamid charts. Until the war, cyanamid manufacture was unable to obtain a competitive foothold in the United States, although a small plant has been in operation at Niagara Falls in Canada for some years. The problem it has faced is similar to that already chronicled for arc fixation, in that it draws heavily on power in the preparation of the necessary carbide, and the cost of power in this country has been prohibitive. Under the stress of the wartime demand for nitrogen, however, the Government contracted for the erection of three plants--one at Muscle Shoals, Ala., one near Toledo, Ohio, and one near Cincinnati, Ohio, with a total rated capacity amounting to 220,000 tons of ammonium nitrate per year. The work on all three was well under way, but none of the plants had reached the producing stage when the signing of the armistice brought the nitrate activities of the War Department to an end.
Nitride Fixation.--The only process of any prominence aiming to fix nitrogen in the nitride form is one developed by the Aluminum Company of America. This has for its working principle the fact that a mixture of alumina and carbon, highly heated, will absorb nitrogen by reacting to give aluminum nitride. The nitride when heated with caustic soda gives its end product in the form of pure ammonia. The outstanding difficulty encountered in applying this process commercially seems to be that of providing a furnace capable of standing the temperature requirements. At all events the process has not succeeded in making good industrially.
Bacterial Fixation.--The artificial attempts at fixation have been directed almost wholly toward employing chemical principles. In view of the difficulties experienced and the uncertain value of the results as a whole, it is interesting and perhaps highly significant to reflect that after all, as indicated in Figure 15, inorganic chemical principles seemingly have little to do with developing the natural supply, probably because of the activities of nitrifying bacteria. Little attention has been given to the possibilities in this direction. This is only natural so far as commercially actuated research is concerned, since it does not lead in the definite direction of patent rights; but the failure to institute an adequate investigation governmentally can be attributed only to lack of comprehension with reference to the scope of the nitrogen issue as brought out under “General Aspects of Control” on pages 425 to 433. The subject has received just enough attention to show that bacterial fixation represents a tremendous field of grossly neglected possibilities.
RECENT DEVELOPMENTS AND CHANGES IN PRACTICE
The whole matter of fixation must be regarded as in process of development. True, it was instituted some fifteen or twenty years ago and has grown to represent the largest producing source of chemical nitrogen, with operations in practically all the important industrial countries in the world and with responsible financial backing. But no one can examine the charts in Figure 16 without recognizing the premature, mushroom quality of the upgrowth, induced primarily in response to the political conditions leading to and through the war. This is especially true for the American situation. When the war broke out, fixation here was confessedly still in the dependent stage of its development, unable in every effort it had made to stand alone industrially. In the main, the developments that have transpired subsequently have followed along pre-existing lines. In so far as they have done so, little actual economic significance is to be attached to them. For the rest, the new developments, all that can be said at this juncture is that they are disappointingly meager.
Just one wartime achievement, the oxidation of ammonia, stands out as affording a worth that is unmistakably clear. The nitrogen situation, it will be recalled, has two aspects, the military and the agricultural. The military focus is on nitric acid, and the readiest means of insuring a supply; the agricultural focus is on ammonium compounds or their equivalent in neutral nitrogen salts and the most economical means of supply. Here, then, is a parting of the ways to expediency, and it is at this juncture that with military influences to the fore the nitrogen developments of the past few years were led off on an uneconomical tangent of military control. The Bureau of Mines, however, taking up the work of others, has perfected a simple, effective means for oxidizing ammonia to nitric acid. This, beyond question, is the most important contribution of the day. Its significance may perhaps best be brought out graphically in the accompanying sketch.
Ammonia oxidation, it will be observed from the foregoing sketch, gives a means of supplying the military requirement from the direct line of agricultural efficiency. From the strictly military viewpoint, it has the objection of being a roundabout procedure. The dotted line of direct military procedure, however, has no peace-time function, and consequently cannot be maintained in time of peace in trim for war, but must instead be built up expressly to meet wartime exigencies. We have had an illustration of what this means in the way of time and money, and this one ought to suffice. The agricultural channel, once built up on a basis of economic efficiency, is open at all times. At the most, all that is required is to keep an eye to the emergency needs in the way of oxidation equipment, a relatively simple matter. Thus, instead of the precarious procedure of trusting to luck which characterized our pre-war attitude toward nitrogen on the one hand, or of attempting the impossible in the way of maintaining a military program of industrial procedure in time of peace on the other, all that is needed is a constructive program devoted expressly to the interests of economic efficiency.
THE NITROGEN OUTLOOK
There is no import duty on nitrogen, nor is there likely to be any, for nitrogen is an important cog in the mechanism of food supply, and the peacetime emphasis, reversing the wartime order, is primarily on cheapness and only secondarily on the point of origin. Accordingly, looking ahead, the American market conditions, once world trade is fully restored, are due to reflect the world conditions. As indicated in Figure 18, the sudden ending of the war, with its calling off of the military requirement which had been building up steadily since even before the outbreak of hostilities in 1914, left the world with a producing capacity 30 to 40 per cent. above normal. To what extent this apparent overproduction, amounting to some half million tons of nitrogen, will prove real is impossible to foretell; not all of it certainly, for under the stimulus of a food shortage the curve of normal consumption will doubtless bend upward. On the other hand, however, there is the producing capacity of the plants not yet in operation to be taken into consideration. Whatever may be the capacity of agriculture to absorb from the surplus, it cannot be expected to take up the full amount immediately or without special inducement. The inference follows that price and production will come down, to stimulate and co-ordinate with the increase in demand. Where the meeting point will be between the upcurve of demand and the downcurve of production it is impossible to predict. It is of interest, however, to figure in review on how the three types of industrial source, the natural, the by-product, and the fixation types, are equipped for the very evident strife of competition implied in the situation.
With the development of fixation, there have been a lot of unfounded statements to the effect that the day of Chile nitrate is passing. Whenever a synthetic development comes to the fore, a peculiar fallacy of reasoning is indulged in which ignores the fact of inherent natural worth, disregards the inescapable cost of its duplication, and regards the synthetic achievement as giving open sesame to the natural treasure. By way of substantiation in the case of nitrogen, the cost of producing Chile nitrate is high, amounting to around $30 per ton. This, however, is largely contributed to by the unsystematized crudity of the operations, by the high export tax, and by overcapitalization. But these, it will be observed, are variable factors, susceptible of indefinite modification in keeping with the need. Chile nitrate has never made any pretense of competing against by-product nitrogen, with its advantages in the way of low incidental producing costs and proximity to the market. The discrepancy between the by-product supply and the total demand for nitrogen has all along comprised the field of opportunity opening to Chile nitrate. In this its only noteworthy competitor is the fixation industry.
The fixation sources are impossible of analysis on a definite basis of cost. Too many variable factors and uncertainties are involved. Repeated attempts have been made, but all they have served to bring out is that under certain conditions, as for instance of power supply, and for certain express purposes, one form of project has an apparent margin of advantage over another, and vice versa for other conditions; but that at best the cost of production, if not actually prohibitive, is dangerously close to the normal pre-war price of fixed nitrogen. Back of it all is the fact that fixation has to deal with the problem of overcoming the native chemical inertia of nitrogen, and the problem has not yet been solved at all convincingly. Always the solution advanced has called for some special measure of relief from industrial competition, whether natural, as in the case of the Scandinavian power supply, or political, as in the case of the American and German projects.
Fixation has been widely heralded of recent years as due not only to emancipate the world from its dependence upon the Chilean source, but to reduce materially the cost of nitrogenous fertilizer, hence the cost of food production, to the marked betterment of living conditions as well. In its promise of political and economic betterment in one, it has claimed the attention of all. However, the claim of special economic advantage coming from an industry barely, if at all, able to meet conditions even as they are, has been overdrawn.
This does not aim to imply that there is nothing but failure ahead for fixation in the test of competition. It has its possibilities of development into something commercially and economically as well as politically worth while, but the existing hothouse order of upgrowth is unquestionably due for a lot of training down, and much that is worthless is as certainly due to go. The American developments have a particularly inauspicious economic setting in the prevailing scale of costs. The only saving alternative for them would seem to be in one form or another of federal provision for their continued support on some such basis as that on which they were projected, and this is unlikely, for there is no apparent reason. True, lowered nitrogen costs tend to make for a lowering in the cost of foodstuffs, but so, for that matter, would a lowering in the cost of agricultural implements, and any arguments that apply in the case of nitrogen apply as equally for potash, for phosphate, for agricultural implements, for coal--in fact for industry in general.
With reference to by-product nitrogen the situation is very different. In general, the by-product sources are of an order such that they were not materially affected one way or the other by the war, and consequently are not due to be materially affected in the process of readjustment, except in the case of coke-oven ammonia, where the temporary slump in the steel industry will result in a temporary slump of probably 15 to 20 per cent. from the 1918 output. Of special significance in connection with what lies on beyond for the by-production of nitrogen is its relationship to the progress of industrial co-ordination. The whole current trend of industrialism, as represented in integration, volume production, and the like, is actuated in the interests of co-ordination and the overcoming of lost motion; and nitrogen comes in for an important share in these developments.
With reference to the organic group of compounds, the outlook for the future is as uncertain as are the actual conditions of today. The centralized development of meat packing, of animal-rendering establishments, and of cotton ginning gave rise in their time to highly important recoveries of nitrogenous waste; but with the forward progress of developments this usage in turn is giving way to a more advanced order. Cottonseed as a fertilizer is giving place to a cottonseed-products industry; tankage as a fertilizer is giving place to the artificial compounding of animal food; horses, an important contributor of agricultural nitrogen in times past, are yielding much of their place in the sun to the automotive engine. Meanwhile, with the factor of dilution to be overcome, our sewage disposal is employed to pollute streams and destroy the fish supply instead of being put to useful ends. So it goes. Developments are on foot that lead in both directions, and there is no telling how the balance is due to shift. Probably the best guess is that relatively at least it will be downward rather than upward.
The outlook for by-product ammonia is more definite. Ammonia is the end point of material refinement; so here the nitrogen developments hold all they get, rather than go on to lose out again in a further refinement of usage, as in the case of the organic group. The output has increased consistently and rapidly, owing to the transition from beehive to by-product coking operations, to the progress of centralization and co-ordination; in other words, with reference to coke manufacture. Even now, less than half of the coal coked is treated in the retort oven; but the beehive oven is out of the line of progress and is due to be entirely displaced. Also, the industry is still expanding as the process of transition, with its separate potentiality for doubling the present output of coal-product ammonia, goes forward.
So far, the recovery of by-products in connection with the use of coal has been confined in the one direction of coke making, along with the analogous procedure of gas manufacture. But the development which has thus started in the coke industry will not stop there. The loss of motion resulting from lack of co-ordination in the use of coal is just as great in other directions as in that of coke making, and the advantages of integral usage may confidently be expected to assert themselves. Already projects of the kind are coming under serious contemplation in proposals such as those for furnishing gas to cities, for employing by-product operations located at the mine in support of the waning natural-gas supply, and for integrated heat, light, and power projects operating on coal with by-product recovery. Meanwhile, the motor-fuel situation is suggestive of interesting developments ahead. There is every reason to believe that the petroleum resources can not continue to meet the growing demand, in fact, that the occasion for support is already at hand. Whatever the nature of these supporting developments, whether they take the form of a shale-oil industry or what, it seems certain they will usher in an important source of by-product nitrogen.
Figure 17 summarizes the American situation with reference to chemical nitrogen, as does Figure 18 in less detail that for the world. Organic nitrogen is omitted, partly because of the lack of information, partly because the issues more directly involved in the situation as it stands are those of chemical nitrogen.
SUMMARY
Nitrogen, itself, is an inert gas of no particular use, but nitrogenous compounds are necessary to agriculture, to refrigeration, to munitions manufacture, and to the applications of chemistry in general. In the native gaseous state, it makes up about four-fifths of the atmosphere, and combined it occurs as nitrate minerals, as organic compounds, and in carboniferous deposits. Atmospheric nitrogen is of use only after it has been artificially compounded or fixed, a proposition which the natural inertness of nitrogen renders difficult and expensive. The only mineral deposits of consequence are those comprising the nitrate fields of northern Chile. The organic resources include all manner of animal and vegetable refuse. Coal-tar ammonia from retort-coke and gas manufacture, along with some shale-oil ammonia, makes up practically the whole supply derived from the carboniferous sources. This range of associations, including animal, vegetable, mineral, and atmospheric sources, transgresses all established rules of resource occurrence, and consequently all regularly constituted research. As a result the nitrogen resources and their needs for attention have never been comprehensively investigated. This became strikingly apparent when the war, threatening swift disaster in the guise of a nitrogen shortage, showed us up to be quite devoid of any systematic nitrogen program and precipitated an hysterical effort to devise a makeshift one instead. The atmosphere was found to provide the only independent source of supply available on an emergency rating; so, following the lead of the European countries, several plants for the fixation of atmospheric nitrogen were projected governmentally.
Industrially, the nitrogen sources may be classified as natural, by-product, and fixation. The natural supply is almost wholly in the form of sodium nitrate from the Chile nitrate deposits. These are controlled and operated by British, Chilean, German, and American capital. The American imports are largely handled by three companies, whose system of control is effected through the medium of shipping and warehouse facilities.
The by-product sources include nearly all of the organic nitrogen used, and the nitrogen from coal and oil shale as well. The supply is governed as to magnitude by the progress of industrial co-ordination through the medium of centralization in the preparing of animal, vegetable, and coal products. Thus the development and marketing of the by-product supply tends naturally to gather to industrial combinations. These, however, are natural developments, not developments artificially created in the interest of price control. The price of by-product nitrogen is controlled not by trade combinations, but by the price of the product from other sources, which is to say, by the price of Chile nitrate. Beyond that, the advantages accruing in the way of low-producing costs do not go wholly to commercial profit but to the saving of costs with reference to the major production, as for instance in the case of gas-works ammonia, which makes its chief contribution toward lowering the price of gas to the consumer. The rapid development of fixation is attributable largely to political influences, activated by conditions leading to and through the war. There are a number of projects for fixing nitrogen, but only three have any genuine measure of industrial achievement to their credit, are fixation in Norway, Haber synthetic ammonia fixation in Germany, and cyanamid fixation in a number of places. Three of the four large American plants are of the last-named order; the other is a synthetic ammonia proposition. All four were contracted for by the Government, and so far as fixation can be said to have gained an industrial foothold in the United States it is wholly in response to the dictates of political control.
Probably rather less than half of the nitrogen consumed is organically associated, and rather more than half of it chemically combined. Practically all of the organic nitrogen and around one-fourth of the chemical nitrogen is of domestic by-product derivation. So far, the balance has been supplied from Chile nitrate, supplemented by small imports of guano, animal refuse, by-product ammonia, and cyanamid from abroad.
There is no apparent likelihood of this adjustment being materially affected as an immediate outcome of developments with reference to fixation. These have shown themselves to be of the utmost political significance as affording an unlimited, independent source of nitrogen supply. Their genuine economic significance at the present stage of enforced expansion, however, is questionable. In this country, especially, the scale of costs gives an unpromising setting. The by-product sources growing out of centralized industrial co-ordination are in line with the trend of modern industrialism and may be looked to as assuring a steady increase in yield, especially if the process of industrial evolution in the direction of co-ordinated economic efficiency is adequately cultivated instead of being interfered with. In this same connection the most significant accomplishment recorded for nitrogen, lies in the working out of a means for the oxidation of by-product ammonia, thus rendering the growing by-product supply available for the full range of nitrogen uses.
With reference to the economic and political aspects of the outlook ahead, all else is obscured and lost to view in the pressing need for a constructive program worked out on a comprehensive basis, in keeping with the comprehensiveness of the resources themselves, with which to supplant the uneconomical makeshift program brought into being by the war. The program called for is one calculated to bring out, and bring out co-ordinately, the best there is in bacterial as well as chemical fixation, in the industrial by-product sources of organic and chemical nitrogen, and in the province of sanitation.
XXVIII. PYRITE AND SULPHUR
BY A. G. WHITE
USES OF PYRITE AND SULPHUR
Pyrite and sulphur are closely related in their most essential uses, and one material can in many cases be substituted for the other. The largest and most important use of these minerals is in the manufacture of sulphuric acid, which is an essential material required for a very wide variety of purposes, including the production of acid phosphate for fertilizer, the manufacture of modern high-power explosives, the refining of petroleum, pickling of iron and steel, and for a vast number of chemical industries. The competition between pyrite and sulphur for this purpose has gone through several stages. With the large-scale development of Italian deposits sulphur was largely used for acid manufacture. As the prices of sulphur were increased it became cheaper to use pyrite, which in many localities then displaced sulphur, for this purpose. With the rapid expansion of the American production, and particularly with the tremendous increase in the capacity of sulphuric acid plants for war purposes, sulphur has again been very largely used for the manufacture of acid. The prospects since the close of the war are that, due to the tremendous capacity of the sulphur mines of the United States, sulphur may continue to compete with pyrite in this use.
Probably the second most important use of these materials is in the manufacture of sulphite wood pulp. In Europe pyrite is largely used for this purpose, while in the United States and Canada sulphur is the principal material used. For every ton of sulphite pulp manufactured, under the best practice, about 250 pounds of sulphur is required. In the United States and Canada about 175,000 tons of sulphur is used annually for this purpose, representing about 50 per cent. of the total sulphur consumption of these countries. There are also a number of other important purposes where sulphur is used rather than pyrite, the most important of which are in the manufacture of agricultural sprays and insecticides, and in the hardening of rubber. Sulphur is a primary ingredient of black powder, and considerable quantities are still used for that purpose. While most of the explosives used in modern warfare require the use of sulphuric acid in their manufacture, they do not use sulphur in its elemental form. There are many other minor chemical uses.
=Substitutes for Sulphur and Pyrite.=--Because of the large deposits of sulphur now available, and of the extent and wide distribution of pyrite deposits, and of the cheapness of both these materials, there are no adequate commercial substitutes for them. The increase of by-product acid, from the copper and zinc smelters and possibly the nickel smelters of Sudbury, might be considered as the most important factors in replacing pyrite and sulphur. As a general thing, the factors of cost and transportation are the governing ones rather than any present or probable scarcity of materials.
GEOGRAPHICAL DISTRIBUTION OF PYRITE
While pyrite is a very widely distributed mineral, there are relatively few deposits which are of sufficient importance to enter into the world’s commerce. This is generally due to the relatively small value of its sulphur content per ton, usually from 40 to 45 per cent. of recoverable sulphur; which means that it takes almost 2¹⁄₂ tons of pyrite to be equivalent to the ton of sulphur which competes with it for many uses. Consequently pyrite seldom moves far, unless it is so situated as to take advantage of cheap ballast rates where little other freight is available for ships, or unless it carries important copper or gold values, which can be recovered after the sulphur content has been utilized. Many known deposits, such as those in Mexico and the Western United States, remain undeveloped because of their distance from market. In countries such as Russia, France, Italy, Germany, Sweden, Japan, and the Eastern United States production is absorbed by the local market. Spain and Portugal, the most important source of world supply, are favorably located to ship to near-by European countries or to secure cheap ballast rates to the United States, and in addition much of the ore carries several per cent. of copper.
Norway is second in export, with a high-grade pyrite carrying copper values, which is shipped to Sweden or across the Baltic to near-by countries. Canada ships considerable pyrite to the near-by markets of the United States, the Quebec product having copper values, while the product of Ontario takes advantage of boat shipments on the Great Lakes.
=Spain and Portugal.=--The deposits of Spain and Portugal are the largest and most important in the world, furnishing approximately two-thirds of the world supply. The district is essentially a unit, and the principal deposits occur in a zone extending from Rio Tinto, Spain, to San Domingo, Portugal. The combined annual production of iron and copper pyrites for the two countries is normally almost 4 million metric tons, 90 per cent. of which is furnished by Spain and 10 per cent. by Portugal. About two-thirds of the total output carries copper values, which may be recovered before the pyrite is roasted for its sulphur value or after. When copper is to be recovered at the mine the ore is leached by spreading it out in beds exposed to the weather and frequently stirring it and wetting it down. The copper goes into solution and is precipitated on scrap iron, forming cement copper. The process takes about 3 years and the pyrite residue is shipped as washed ore. The ore is compact and finely crystalline and carries from 48 to 51 per cent. sulphur. Conservative estimates of ore reserves for the district give it from 300 to 400 million tons, or enough to last for one hundred years at the present rate of production. Consequently this district is destined to long remain the chief pyrite-producing center of the world.
The Rio Tinto Co. is the principal producer, contributing about one-third of the total output of the whole district (Spain-Portugal). It is owned by British and French capital. Mining is largely by open-pit methods, and the company employs 25,000 men. The ore carries about 2 per cent. copper, making this company the largest European producer of that metal. The reserves are estimated as 250 to 300 million tons, representing the major part of the whole district. The Rio Tinto Co. furnishes about 60 per cent. of the 1,000,000 tons of Spanish pyrite normally imported by the United States.
The second principal producer is the Tharsis Sulphur and Copper Mines (British), with about one-eighth of the total production. British capital is predominant in the district as a whole, with the balance French and Spanish. Huelva, Spain, is the principal point of export, located from 30 to 40 miles from the mines. Under normal conditions the pyrite moves at cheap ballast rates, and has been sold at from $6 to $7 per long ton (12 to 16 cents per unit of sulphur), delivered in United States ports. Normally this Spain-Portugal district exported one-quarter of its output to the United States, one-eighth to England, one-eighth to Holland, one-eighth to Germany, and most of the balance to France and Belgium.
=Norway and Sweden.=--Norway produces from 400 to 500 thousand tons of pyrite per year (about 8 per cent. of the world’s total), and her output is steadily increasing. The ore usually carries from 1 to 3 per cent. copper and from 42 to 49 per cent. sulphur; and is free from arsenic. Seven-eighths of the output is exported to Sweden, Germany, England and Russia. When Sweden’s import of sulphur (about 40,000 tons) was cut off during the war, she changed the equipment of her cellulose plants to burn pyrite instead of sulphur and took about one-half of the Norwegian output, since her own production of pyrite (about 30,000 tons) was of minor importance.
The Norwegian deposits are widely distributed from south of Bergen to the extreme northern end of the peninsula. The ore is generally massive cupriferous pyrite, occurring in flat lenses in chlorite schists in areas of regional metamorphism. About 250,000 tons comes from the Trondhjem district, where the Lokken mines of the Orkla Mine Co. are the largest producers.
The northern district is second in importance, with about 150,000 tons annual production, chiefly from the Sulitjelma mine at the Swedish frontier, near the Polar Circle. In the eastern district the Fodal Copper & Sulphur Co. has a production of from 75,000 to 100,000 tons. Norway has sufficient known reserves to last for thirty years at the present rate of production and probably for much longer. The largest reserves are in the Trondhjem district. Sweden is also reported to have large reserves, although there has been little development so far.
The commercial control of the mines is principally English and Norwegian. It was reported that mines with large reserves near Narvik were owned by German interests, but were purchased by Swedish interests during the war.
=France.=--For many years France has produced about 300,000 tons of pyrite per annum, or about 5 per cent. of the world output. The principal deposits are at Sain-Bel, near Lyons, in the Department of Rhône. The product is high in sulphur. The known reserves are probably from ten to twelve million tons. The output is used for home consumption, and in the past was supplemented by the import of Spanish pyrite, and Sicilian and United States sulphur.
=Italy.=--In addition to her large sulphur production Italy has produced a considerable quantity of pyrite, which has been used locally in the manufacture of sulphuric acid. Pyrite production was about 300,000 tons before the war and increased to 400,000 tons in 1916, so that Italy produces about 6 per cent. of the world output. The pyrite contains about 45 per cent. of sulphur and a small part of it carries copper values. The principal production comes from a district near Florence, although a number of smaller mines are widely scattered.
=Russia.=--Russia has large pyrite deposits located in a belt parallel to the eastern slope of the Ural Mountains. The Kyshtim and Sissert districts furnish the principal output. Reports indicate a good grade of pyrite with high sulphur content. The production has been in the neighborhood of 150,000 tons, or about 2 per cent. of the world total. Production had been steadily increasing up to the time of Russia’s economic collapse, but has been limited, due to the remote location of the deposits from the chief centres of consumption at Petrograd, Moscow, and Odessa. It is to be expected that Russia, after she regains her balance, will continue to import pyrite to a considerable extent, as she has done in the past.
=Germany, Austria and Hungary.=--The pre-war German production was from 200,000 to 250,000 tons of pyrite per annum, or about 4 per cent. of the world output. About two-thirds of the output comes from deposits near Meggen. The pyrite is estimated to run about 43 per cent. sulphur. It is reported that the pyrite output was largely increased during the war, as Germany had been importing from 800,000 to 1,000,000 tons of pyrite. She continued to import some Norwegian pyrite, which is especially desirable because of its recoverable copper content. Germany secures a considerable amount of sulphuric acid as a by-product from zinc smelters, which helped to make up the deficiency in her sulphur resources.
Hungary normally produces about 100,000 tons of pyrite per annum, chiefly from the deposits of Schemnitz.
=Cyprus.=--An important deposit of cupriferous pyrite is under development in an old copper-mining region on the northwest coast of Cyprus. Several million tons of ore are reported, containing a high sulphur content and high copper values. It is being developed on a large scale by the Cyprus Mines Corporation, representing United States capital, and may be expected to become an important factor in pyrite export.
=The United States.=--The pre-war production of the United States was about 350,000 long tons, or 6 per cent. of the world’s production, compared to an import of about 1,000,000 tons. About 40 per cent. of the total was produced in Virginia and largely sold for use in acid-phosphate plants from Maryland to Georgia; about 25 per cent. was produced in California and used for local acid manufacture in the vicinity of San Francisco; about 15 per cent. was produced in New York State; and the balance was scattered, coming as a by-product from coal mines in Ohio, Illinois, and Indiana, and from the zinc-mining region of southern Wisconsin. During the war, production was increased by about 50 per cent., but with no discoveries which promise to greatly increase the permanent production of the country. On the whole the deposits are not of very high quality, averaging about 40 per cent. sulphur content. Very large reserves of pyrrhotite are located in western Virginia and eastern Tennessee, but have not been very extensively utilized. Large reserves of pyrite exist in Colorado, Arizona, Utah and other western states, but are too far from the acid plants located in the East and South to compete. On the whole, the scanty development of pyrite in the United States is due to the competition of high-grade Spanish pyrite coming in to the Atlantic ports at cheap ballast rates; to the import of Canadian pyrite either to near-by points in New England or to the Great Lakes ports; to the large production of cheap sulphur from Louisiana and Texas, which has monopolized the sulphite pulp trade; and to the recovery of by-product acid from copper and zinc smelters. The great increase in the production of sulphur during and since the war is very likely still further to curtail the market for pyrite. The production of pyrite has been in the hands of American companies, several of the larger operations being controlled by concerns either in the acid or fertilizer business.
=Canada.=--The production of pyrite in Canada has increased rapidly, particularly during the war, to about 300,000 tons. This is due to an increased export to the United States, principally to sulphuric-acid plants. The principal producing areas in Canada are: (1) The district in Quebec, not far north of the Vermont border, where there are two operating mines and a number of promising prospects. There are large ore reserves and the ore carries considerable copper. The principal mines are controlled by American capital. (2) The Goudreau district, located some 40 miles north of Sault Ste. Marie, has large ore reserves, but of rather low grade. Thus far an American company is the principal producer. (3) The North Pine district near Graham, Ontario, and a considerable distance west of Port Arthur, has been a large producer of good-grade pyrite. The principal producer was a subsidiary company of the General Chemical Co.
There is a large reserve of pyrrhotite, estimated at about 50,000,000 tons, much of which will average over 25 per cent. sulphur, in connection with the Sudbury nickel deposits. At present it is not commercially important. There are considerable deposits of pyrites in various parts of British Columbia, but these are unimportant commercially because of their distance from any available market. The larger part of the Canadian product is controlled by American interests, chiefly the American Chemical Co., whose headquarters are in New York City. A large part of the Canadian output is imported to the United States through Chicago, Cleveland, and Buffalo; and by rail through Vermont, Boston and to New York City.
=Cuba.=--An important pyrite property is being developed about twenty miles from Cienfuegos, Province of Santa Clara, Cuba. It is reported as containing several million tons of good-grade ore, which will average at least 40 per cent. sulphur and may contain a recoverable copper content. The property is being developed by United States capital, interests connected with the Davison Chemical Corporation, of Baltimore, Md., who are one of the largest producers of sulphuric acid on the Atlantic Coast. This property promises to be an important near-by source of pyrite for the United States.
=Mexico.=--Important pyrite deposits are known to exist in Mexico, but they are of no present commercial importance because of inaccessibility and high freight rates, and unsettled political conditions. A large deposit is reported about 30 miles inland in the State of Guerrero, containing several million tons of high-grade pyrite of approximately 48 per cent. sulphur content and free from arsenic.
There is no prospect that Mexico will be of any immediate importance in the world pyrite situation.
=Japan.=--Japan has a small pyrite production of from 75,000 to 100,000 tons per year, or about 1¹⁄₂ per cent. of the world output. Much of it carries copper values. The production comes from several scattered localities. The state has reserved the ownership of the original mineral rights, and the operators to whom they have been leased appear to be entirely Japanese. Japan consumes her pyrite for local purposes, and exports most of her sulphur.
GEOGRAPHICAL DISTRIBUTION OF SULPHUR
=Italy and Sicily.=--Italy had practically a monopoly of the world’s sulphur supply until 1904, when large-scale production began in the United States. The importance of sulphur as a world mineral began with the use of gunpowder in the fourteenth century. Considerable export trade was early developed and has been of increasing importance since 1830. Ninety per cent. of the Italian production has come from the Island of Sicily.
The sulphur-bearing district of Sicily is a central belt running across the island, extending about 100 miles east and west and 50 miles north and south. The richer deposits are scattered as irregular lenses or basin-like bodies, in this extensive area. The deposits of commercial value are of sedimentary type, occurring as stratified beds or sheets in limestone, associated with gypsum and bituminous marl. There are generally three or four sulphur-bearing layers, separated by a few feet of barren rock. The average thickness of the sulphur beds is from 10 to 15 feet, although in a few places they run as high as several hundred feet. The sulphur occurs as incrustations, pockets, or thin bands intimately associated with the limestone. The average sulphur content of the ore mined is from 20 to 25 per cent., with a range from 8 to 50 per cent.; and in a few places it reaches up to 90 per cent. Estimates as to the reserves of ore vary greatly, but seem to indicate that there is from 40 to 60 million tons of ore still unmined, which will average about 23 per cent. of sulphur content.
Mining has been mostly by hand and the ore brought out on the backs of men. A few mines had modern hoisting machinery and trams. The shortage of labor during the war has increased the introduction of modern appliances in some of the newer mines. With increasing depth the cost of mining has increased to the point where American sulphur can compete in European markets.
The methods of extracting the sulphur from the ore have also been extremely crude and wasteful, but in the last few years better types of ovens have been installed, giving a much higher recovery through improved distillation and the use of superheated steam for melting the sulphur.
The sulphur industry of Sicily furnishes a notable example of an attempted commercial control which developed into a governmental control of the industry. The recent history of the industry falls into three periods. The first extends from 1875 to 1895 and is characterized by a rapid increase in production, from 200,000 to 400,000 tons a year, with a corresponding decrease in selling price from $25 a ton to as low as $12 a ton. It was a period of overproduction, due to the ease with which shallow mining could be carried on and to the abundant supply of cheap labor available. These conditions resulted in the development of a great number of small mines, whose competition reduced prices. The second period, from 1896 to 1906, begins with the formation of the Anglo-Sicilian Sulphur Co., financed by English capital, which entered into a five-year agreement with the principal producers, which was later extended for an additional five years. It was primarily a marketing organization, formed by the union of Italian and English interests to control production, stabilize the industry, and maintain prices. It eventually controlled from 75 to 85 per cent. of the industry. All sulphur was purchased at about $16 per ton f.o.b. ship and the selling price remained practically stable during the ten-year period, at an average of $18 to $19 per ton. In spite of efforts to restrict production, the annual output reached 550,000 tons during most of this period. At the same time the higher prices maintained for sulphur had stimulated the use of pyrite as a substitute. In order to maintain prices under these conditions the excess production had to be purchased and stored, so that in 1906 a stock of over 500,000 tons of sulphur had been accumulated in Sicily. Toward the end of this period large-scale production began in the United States (1904). In 1903 the United States produced less than 10,000 tons of sulphur and was Italy’s best customer, buying over 170,000 tons in that year. Within three years the United States was producing more than enough to supply its own needs and was accumulating a large reserve stock. The sudden loss of the American market and the threat of competition in other markets brought on a crisis in the Sicilian industry, which was intensified by the large number (30,000) of people employed in the industry. At the termination of the agreement with the Anglo-Sicilian company (July 31, 1906) steps were taken by the Italian government to control the situation. The third period, from 1906 to the present, is one of government intervention and control of the industry. All the producers were compelled to join a company called the “Consorzia Obbligatoria per l’Industria Solfiefera Siciliana,” organized under a law passed in the Italian Parliament. The organization was managed by a commission appointed by the government, and had complete control over exports and prices. All sulphur had to be sold at fixed price to this organization. A minimum interest was guaranteed on the capital invested; local freight rates on sulphur for export were reduced; sulphur stocks accumulated by the Anglo-Sicilian company were taken over; and a campaign of price-cutting was started in the American market, which resulted in a decrease of several dollars a ton in the selling price of sulphur. A market agreement was soon reached and prices recovered. A number of the smaller mines closed down and a law was passed controlling and restricting the granting of new concessions. Production declined to 350,000 tons in 1913. At the opening of the war the principal United States producer was preparing to enter into more active competition with Italian sulphur, particularly in the French markets. As a result of the war, Italian production dropped to only 180,000 tons in 1917, largely due to labor shortage; about half of the surplus stocks were used up, leaving only 160,000 tons on hand at the end of 1917; and prices increased so that refined sulphur sold at about $80 per ton and inferior grades at $55 per ton, f.o.b. Sicilian ports. The increasing cost of producing sulphur, due to deeper mining and increased labor costs, will make it difficult to compete in the European markets with the greatly expanded production of the cheaper American article.
Sulphur has been produced in several districts in the Italian peninsula, particularly Romagna, Marches, Campania and Calabria. The yield from these districts has been decreasing in recent years and has generally been only from 25,000 to 30,000 tons. The sulphur content of the ores ranges from 20 to 30 per cent. The deposits are of limited extent and are being mined at greater depths. The production has been largely used for local agricultural purposes, in preparations for use against vine diseases.
=The United States.=--Until 1904, the production of sulphur in the United States was considerably less than 10,000 tons per year and the bulk of our requirements had to be met by import from Sicily. From 1904 to 1914 the United States produced enough for its own use and at the end of this period was supplying Canada, had begun to actively enter the French and German market, and in addition had accumulated a reserve stock, in the hands of the producers, of approximately one million long tons. Figures recently made public in connection with litigation over patent rights show that half of this stock was accumulated in a single year, 1912, when production reached 790,000 long tons, of which only 300,000 tons was marketed and the balance of 490,000 tons went into storage. The United States production has exceeded that of Italy since 1912, although the sales have been less, because sulphur was being withdrawn from stocks in Italy while stocks in the United States were being increased. The net effect of the war was a four-fold increase in the amount of sulphur sold in the United States, without any reduction in stocks; while in Italy production fell off 50 per cent. and stocks on hand were reduced by the same percentage.
From 98 to 99 per cent. of the United States production has come from the Gulf Coast region of the states of Louisiana and Texas. A number of other localities in West Texas, Colorado, Wyoming, Idaho, and Nevada have surface deposits, usually of limited extent, which have been worked on a small scale, but have declined in importance with the development of the better-grade and more accessible deposits of the Gulf Coastal region.
The occurrence of sulphur in the Gulf Coast region is in connection with a peculiar formation known as “Saline Domes” or “Mounds.” Over twenty of these domes have been located, scattered in an area 200 miles long, extending through western Louisiana and eastern Texas, and generally within 50 miles of the Gulf of Mexico. Commercial deposits of petroleum, sulphur, and salt have been developed in connection with these domes, but so far not more than one of the minerals has been developed to commercial degree in a single dome. Sulphur was discovered when drilling was being carried on for oil. So far, three domes have been developed for sulphur, namely that owned by the Union Sulphur Co. at Sulphur, La. (1903), that owned by the Freeport Sulphur Co. at Freeport, Texas (1912), and that of the Texas-Gulf Sulphur Co. near Matagordo, Texas (1919). Two other domes are under exploration and a number of others may possibly contain sulphur.
The sulphur occurs at a depth of 300 to 1,200 feet and is associated with limestone and underlain by gypsum. The surface area of the producing domes varies from 200 to 1,500 acres. Exploration is done by drilling at a cost of $200,000 to $300,000, and the cost of a complete plant is several million dollars. The sulphur cannot be mined by shafts, due to the quicksands and the poisonous gases encountered. The deposit at Sulphur, Louisiana, remained unworked for almost 40 years after its discovery before a satisfactory process was developed to mine it. This is known as the “Frasch Process” and consists of the sinking of wells to the sulphur deposit, each well being lined with a 10 to 12 in. pipe. Smaller pipes are placed inside, so that superheated water can be brought in contact with the sulphur ore, which is melted and forced to the surface by compressed air. The sulphur on cooling is ready for market and is over 99 per cent. pure. Each of the three plants in operation is equipped with a boiler capacity of over 20,000 h.p. for superheating the water, and requires about a million and a quarter barrels of fuel oil per year. The origin of these domes is believed to be due to deep-seated igneous intrusions, resulting in the alteration of gypsum and the crystallization of salt and sulphur, which has caused an upbowing of the strata. Because of the nature of the formation and the irregularity of the deposits it is impossible to accurately estimate the reserves of sulphur.
With the addition of two new plants since 1912, the United States now has a sulphur-producing capacity of about 1¹⁄₄ million tons per year, or four times the normal sales before the war. If an outlet is to be found for this excess sulphur, it must compete with pyrite in the domestic market or with Sicilian sulphur in the European markets. In the latter part of 1919 prices of $14 to $15 per ton f.o.b. mines were quoted, which indicated that an effort was being made to secure part of the acid trade which formerly used pyrite.
There is no element of political control in the United States sulphur industry, beyond the temporary measures taken during the war in licensing export and allocation of consumption. The commercial control is entirely in the hands of American companies. The Union Sulphur Co. has been endeavoring to prevent the use of the improved “Frasch Process” by the other companies which are competing with it. If the claim of infringement of patent rights should be sustained, it would give the Union company control of the situation similar to that which it had before the development of the two newer companies, and might result in the restriction of output and maintenance of prices.
=Japan.=--Japan takes third rank in the production of sulphur, although it is of minor importance, compared to either the United States or Italy. The production of sulphur in Japan has slowly increased from 15,000 long tons in 1900 to 60,000 tons in 1913, or about 7 per cent. of the world output. The domestic consumption is very small and about 90 per cent. of the output was exported, chiefly to Australia, the west coast of the United States and Canada, and to China and India. During the war the output increased to a maximum of about 100,000 tons, but in 1918 production was considerably curtailed by the great advance in freight rates to Australia, which had been purchasing about one-half of the Japanese output.
The sulphur occurs in surface deposits of limited extent and seldom reaches 100 feet in thickness. The deposits are generally of the solfataric type and occur in the numerous areas of volcanic activity. The majority of the productive areas are nearly circular in outline, and indicate that they were formed by deposition in crater lakes. In some cases they are stratified and overlain by fine brown clayey or tufaceous material derived partly from the surrounding rocks and partly from the sulphur itself. Other deposits of minor importance may have been produced by impregnation. The ore mined runs from 50 to 60 per cent. sulphur. Deposits below 40 per cent. sulphur are seldom worked.
Approximately two-thirds of the production has come from the southwestern section of the Island of Hokkaido. Four mines average about 10,000 tons production each per year, and the remainder of the production comes from 10 to 12 smaller operations, ranging from the vicinity of Mount Daiton, in Taiwan (Formosa), to the Kurile Islands.
There is no accurate estimate of ore reserves available. One of the most important mines was estimated as containing several million tons of 50 per cent. ore. The reserves are probably sufficient to maintain present production for many years. The lack of shipping facilities has handicapped production, and there seems little likelihood that the relative importance of Japan in the sulphur industry will increase to any great extent.
The sulphur mines are all operated by Japanese. The state reserves the right of original ownership of all minerals, except a few placer deposits. Right of working is granted to Japanese companies or individuals according to priority of application. The mining law, however, acknowledges the rights of any corporation organized by aliens under Japanese law.
=Great Britain.=--Great Britain has an estimated annual by-product recovery of from 30,000 to 40,000 tons of elemental sulphur. The process of recovery is known as the Chance-Claus process, and is applied in connection with the Le Blanc soda process. It is based upon the decomposition of calcium sulphate in vat waste by means of carbon dioxide, and the recovery of sulphur from the sulphuretted hydrogen gas thus generated.
=Other Countries.=--The production of sulphur outside of the United States, Italy and Japan is of minor importance.
Northern Chile has a small production of sulphur from the volcanoes of Tacora and Chupiquina. The reserves are estimated as quite large, but the high elevation (14,000 to 20,000 ft.) and poor transportation have restricted production to local uses in the vineyard districts of Chile. The production as reported had gradually increased to about 6,000 tons in 1913 and is reported to have doubled since then.
Spain produces about 10,000 tons of sulphur annually, from low-grade deposits located in the neighborhood of Almeria. The larger figures often reported are in terms of low-grade ore mined.
Austria is credited with a production of from 10 to 15 thousand tons of crude sulphur ore, probably representing only 2 or 3 thousand tons of actual sulphur.
The largest sulphur mine in Mexico is located at Cerritos, 25 miles south of Guadalcazar, San Luis Potosi. Fifteen years ago it was purchased by an American company, the Virginia-Carolina Chemical Co. It was later leased to German interests. The small output of a few thousand tons was shipped to Germany before the war. There are a number of deposits in San Luis Potosi in addition to the one at Cerritos.
It has been reported several times that a British company was about to operate the sulphur deposits of the Mexican volcano, Popocatepetl, near Mexico City. Statements regarding the deposits in the volcano are conflicting, but investigations indicate that their magnitude has been much exaggerated. Many other deposits occur in connection with local volcanic areas, but so far are of little economic value because of inaccessibility.
There are a number of deposits of sulphur in the Aleutian Islands (Alaska), probably containing considerable sulphur, but partially covered by glaciers and difficult of access. It is doubtful whether they could be developed in the face of the competition of the cheap sulphur from the coastal plain district of the United States.
CHANGES IN PRACTICE
No very far-reaching changes in practice are likely to occur in the near future. The exhaustion of the surface sulphur deposits in Italy and the necessity for deep mining is making necessary improvement and installation of more modern methods there. Improved methods in the refining of sulphur are also being installed whereby the losses under the old calcarone method will be largely eliminated. The consumption of sulphur for sulphite wood pulp can be considerably reduced by the general utilization of the improved practice which is already used by the best plants. In localities where pyrite is available this material may be used in the pulp industry to replace sulphur. In case competition develops between the three large sulphur companies in the United States, and the price of sulphur is considerably reduced, it may result in the use of this material to a larger extent in the sulphuric-acid industry. The sulphur burners can be installed much more quickly and cheaply than the furnaces required to roast pyrite, and after once being installed the amount of labor and care required in their operation is less. The increased recovery of sulphuric acid as a by-product from copper and zinc smelters will probably represent an increasing factor in competition with acid made either from pyrite or sulphur. The further increase of this source in the United States is handicapped by the location of many of the copper smelters in the west, at long distances from the market for sulphuric acid, which is largely in the eastern and southern states. New processes are being experimented with, for the production of elementary sulphur from these sulphur fumes. If these are successful on a large scale, material from this source may supply any future markets located in the west, and might compete with the Japanese sulphur which has formerly been imported in our Pacific Coast States.
POLITICAL CONTROL OF SULPHUR AND PYRITE
The political control of the important sulphur deposits of the world primarily corresponds to the countries in which they are located. In the case of the United States, the deposits are controlled by private companies. As a strictly war measure, control was exercised over the allocation and distribution of the output. In Italy the government had assumed control of the output and marketing of sulphur. This was largely brought about by the competition of American sulphur and the consequent depression of the Italian industry. In 1906 what was known as the Consorzia Obbligatoria was organized under a law passed by the Italian Parliament, which provided that this company should be administered by a royal commissioner appointed by the Italian government. Under this law producers were obliged to sell their output to this company, which had control of prices and exports. In 1910 restrictions on the granting of new concessions were made. The arguments recently presented for the continuance of government control were the increasing foreign competition, the large war increase in United States production, the minor increase of Japanese production and the possibilities of developments in northern Africa. The intent of this governmental control of the industry is to combine and regulate the efforts of individual producers in order to effectively meet future competition.
COMMERCIAL CONTROL OF SULPHUR AND PYRITE
Before 1906 the Italian deposits were largely controlled by the Anglo-Sicilian Sulphur Co., representing English capital, but since that time, when the Italian government undertook to control the industry, the commercial control has been primarily Italian.
In the United States the commercial control of sulphur output is in the hands of three companies, one of which started producing just about the time of the outbreak of the European war and another whose production was just beginning in 1919. So far as is known, there is no combination among these three interests. The Union Sulphur Co., which was the first and principal producer, controls certain patents covering the “Frasch Process.” During the war period an agreement was entered into by which alleged infringement of patents was not pushed. Since the close of the war it remains to be seen to what extent the patent rights involved may affect the production of the other two companies, the Freeport and the Texas Gulf, which in general use a similar process.
The production of sulphur in Japan is commercially controlled by Japanese interests.
An American company, the Virginia-Carolina Chemical Co., owns a sulphur deposit in Mexico, which was leased, before the war, to German interests. Several other deposits in Mexico and South America were reported as controlled by German interests, but thus far the production from all these sources has been relatively of minor importance and there is no immediate prospect of any great change.
The significant factor of commercial control in the pyrite situation is the large investment of British capital in the Spanish deposits and to a less extent the investment of French capital. United States capital controls the principal pyrite developments in Canada, Cuba, Mexico and Cyprus. English, French and Swedish capital is invested in Norway.
POSITION OF THE PRINCIPAL POWERS
The United States is the most favorably situated of any nation in its supply of sulphur. In the years preceding the European war it produced about one-half the world’s supply. Since that time its production has increased several fold and it is now the dominating factor in the world situation.
The relative position of Italy, which was formerly of equal importance with the United States, is declining. Her cost of production is increasing, and American sulphur will enter into keen competition with the European markets. The resources of Japan are comparatively small and the larger part of her production has been exported. The post-war conditions will probably curtail the markets for Japanese sulphur, and there is no likelihood of any increase in Japan’s position. England, France and Germany must primarily rely upon other countries for their supply of both pyrite and sulphur. England secures a part of her sulphur supply from a by-product source known as the Chance-Claus process, which produces from 30 to 40 thousand tons annually. In addition she secures large amounts of pyrite from Spain. France produces some local pyrite, but imports large quantities of this material from Spain; and before the outbreak of the war was securing increasing amounts of sulphur from the United States. Germany and Austria have some resources in pyrite and probably had considerable stocks of sulphur at the opening of the war. It has been stated that in order to secure her needs of these materials Germany was forced to use expensive processes, to reduce the sulphur content of gypsum, to expand her pyrite production, and to increase the output of smelter acid. Under normal conditions she will probably have to return to imports of pyrite from Norway and Sweden, or sulphur from the United States and Italy.
XXIX. GOLD
BY JOHN E. ORCHARD
USES OF GOLD
The physical properties of gold and the difficulties connected with obtaining it have made gold through all the ages one of the most precious of the metals. Because of its luster, its color, and its indestructibility, it was shaped by primitive man into rings, bracelets, and other ornaments. These same properties, together with its divisibility, early led to the use of gold as a trading counter, and in all but the most primitive societies it has been regarded as a measure of value and a medium of exchange. The earliest known reference to gold is a reference to its use in trade, and is contained in an edict of Menes of Egypt (perhaps 3800 B. C.) fixing the ratio of the value of gold to silver at 2¹⁄₂ to 1.
As a medium of exchange gold is used in a variety of forms. The primitive trader accepted and gave ornaments of gold in exchange for commodities. In mining camps, gold dust and nuggets have been the circulating medium. In a settled community under a government possessing the confidence of the governed, gold coined into counters of convenient denominations by the government is accepted without question in all transactions. For the settlement of balances in international trade, gold bullion is used, its value being determined by weight. Today practically all nations are on a gold standard, and even those on a silver standard in domestic trade have adopted the gold standard for foreign trade.
But gold, though it has many excellent qualities, is one of the heaviest of metals, and carrying it on the person is inconvenient, especially in amounts sufficient for large transactions. Also, through constant handling, gold wears away and coins deteriorate in value. Accordingly a large part of the coins or the gold bullion is kept in the national treasury or in the vaults of a bank, and some form of paper currency is used as the circulating medium. Upon this reserve of gold, seen only by a few employees of the government or bank, who have no ownership in it, is built an intricate system of credits and trade.
It is true that little gold is in actual circulation and that for domestic trade mediums of exchange secured only in part by gold are being used in increasing amounts. Even international exchange is no longer on the gold standard, but this situation is undoubtedly temporary and with the improvement in financial conditions in Europe gold will be restored to its position as foundation of trade and finance, national and international. The circulating medium, whatever its nature, must be freely convertible, and credit, to remain sound, must be founded upon an adequate gold reserve.
It has been officially estimated that between the years 1492 and 1894 the world’s production of gold equaled about $8,000,000,000. Of this amount a little less than $4,000,000,000 was held as gold reserve in 1894, the remainder having been lost or absorbed in the arts or in the manufacture of jewelry. Since 1894 the consumption of gold in the arts has been between $50,000,000 and $100,000,000 annually, or for the 27 years about $2,100,000,000 out of a total production of $9,000,000,000--almost 25 per cent.[158]
[158] JENNINGS, HENNEN: “The Gold Industry and Gold Standard,” 1919.
GEOLOGICAL OCCURRENCE
Gold is widely distributed, both geographically and geologically. It is found in about 60 countries in all parts of the world and occurs in rocks of all ages, from Archean to Quaternary, often in association with other metals, as silver, copper, tellurium, lead, and iron.
Gold deposits may be broadly classified as lodes and placers. Lode deposits are also known as vein or quartz deposits; and in them the gold is found with silica or quartz in irregular masses, strings, scales, plates, and crystals, or more often in microscopic particles in the sulphide minerals or the gangue. Much the same methods are used for extracting the ore as are used in mining silver, lead, or zinc.
Placer or alluvial deposits are sedimentary beds of gravel or sand in which the particles of gold, washed from the mother lode, have been concentrated by the action of water. Most of the placer deposits lie in the open, along the bed of a river, but some are covered by a sheet of lava or other non-productive rock. The gold occurs as scales, grains, slugs or nuggets. A number of large nuggets have been found, the largest being the Australian “Welcome Stranger,” weighing 2,520 ounces and valued at about $42,000. Usually, however, the particles of gold are minute.
Placer deposits are worked by one of the following methods, depending on the nature and richness of the alluvium: sluice mining, hydraulic mining, dredging, or drift mining.
During the early years of what has been called the modern era of gold mining, beginning with the discovery of gold in California in 1848, most of the world’s annual production came from placer deposits. De Launay estimates that from 1848 to 1875 placers contributed 87 per cent. In more recent years, with the exhaustion of the easily discovered and the easily worked placer mines, the proportion has decreased and at present it is probably not more than 10 per cent. Today the great gold mines of the world are lode mines. The world’s deepest gold mine has attained a vertical depth of 5,900 feet.
After making all allowances for further discoveries, students of the subject are of the opinion that the world’s gold production has already reached its zenith and that a decline may be expected.[159]
[159] The above discussion of the geological occurrence of gold is based mainly on “The Gold Industry and Gold Standard” and other articles by HENNEN JENNINGS, consulting engineer, U. S. Bureau of Mines.
GEOGRAPHICAL DISTRIBUTION
Commercially important mines are found in every continent, and there are few regions on the earth’s surface that do not contain deposits profitably worked now or formerly. The distribution of gold has played an important part in the settlement of new lands, notably California, western Canada, Alaska, Mexico, Australia, and South Africa, and will undoubtedly greatly influence the future movements of peoples. Yet although gold is distributed thus widely, $323,950,000, or over 75 per cent. of the total amount of gold produced in 1917, came from four countries, Transvaal, United States, Australia and Russia.
The outputs of the chief producing countries are given in Table 67 and Figure 19.
NORTH AMERICA
=United States.=--Although at present surpassed by the Transvaal, the United States formerly led the world as a producer of gold. It is estimated that this country since 1792 has contributed about $3,913,000,000 to the gold supply of the world, a little less than 25 per cent. of the total produced, and an output greater than that of any other nation.[160] The United States first became an important producer in 1850, following the discovery of gold in California. Previous to that time some gold was mined in the Appalachian states, the total probably reaching $50,000,000.
[160] Report of the committee appointed by the Secretary of the Interior to study the gold situation.
In 1915 the output of the United States was $101,035,000, the highest mark so far reached. Since that year there has been an annual drop of about $8,000,000 in output. The yield in 1918 was $68,646,700 and in 1919, $58,488,800.
During the past four years, eight states, California, Colorado, Alaska, South Dakota, Nevada, Arizona, Montana, and Utah, have produced more than 90 per cent. of the gold mined in the United States.
TABLE 67.--GOLD PRODUCTION OF THE PRINCIPAL PRODUCING COUNTRIES, 1880-1917[161]
----+------------+-----------+-----------+----------------+----------+ | United | | Transvaal | Russia- | Rhodesia | Year| States |Australasia| [162] | Siberia | [162] | ----+------------+-----------+-----------+----------------+----------+ 1880|$36,000,000 |$28,765,000| $1,993,800|$28,551,028 | ...| 1881| 34,700,000 | 30,690,000| 1,993,800| 24,371,343 | ...| 1882| 32,500,000 | 31,955,017| 1,993,800| 23,867,935 | ...| 1883| 30,000,000 | 27,150,000| 717,000| 20,119,000 | ...| 1884| 30,800,000 | 28,284,000| 830,000| 21,874,000 | ...| 1885| 31,801,000 | 27,439,000| 1,384,000| 25.338,000 | ...| 1886| 34,869,000 | 26,425,000| 1,438,000| 20,518,000 | ...| 1887| 33,136,000 | 27,327,600| 1,919,600| 20,092,000 | ...| 1888| 33,167,000 | 28,560,660| 4,500,000| 21,302,000 | ...| 1889| 32,967,000 | 33,086,700| 7,788,372| 23,905,600 | ...| 1890| 32,845,000 | 29,808,000| 10,438,356| 25,484,000 | ...| 1891| 33,175,000 | 31,399,000| 14,885,639| 24,162,500 | ...| 1892| 33,015,000 | 34,159,000| 23,220,108| 24,806,200 | ...| 1893| 35,955,000 | 35,688,600| 28,293,831| 27,808,200 | ...| 1894| 39,500,000 | 41,760,800| 39,696,330| 24,133,400 | ...| 1895| 46,610,000 | 44,798,300| 43,893,300| 28,894,400 | ...| 1896| 53,088,000 | 45,181,900| 43,779,669| 21,535,800 | ...| 1897| 57,363,000 | 52,665,700| 57,633,861| 23,245,700 | ...| 1898| 64,463,000 | 64,860,800| 79,213,953| 25,463,400 | 444,617| 1899| 71,053,400 | 79,321,600| 71,384,561| 22,167,100 | 1,129,773| 1900| 79,171,000 | 73,498,900| 6,124,226| 20,145,500 | 1,158,815| 1901| 78,666,700 | 76,880,200| 5,333,994| 22,850,900 | 2,974,943| 1902| 80,000,000 | 81,578,800| 34,901,140| 22,533,400 | 3,366,561| 1903| 73,591,700 | 89,210,100| 61,454,439| 24,632,200 | 4,065,489| 1904| 80,464,700 | 87,767,300| 78,004,559| 24,803,200 | 4,794,208| 1905| 88,180,700 | 85,926,500|101,489,199| 22,291,600 | 7,337,211| 1906| 94,373,800 | 82,391,400|119,618,507| 19,496,500 |10,082,747| 1907| 90,435,700 | 75,677,700|133,361,943| 26,684,300 |11,199,181| 1908| 94,560,000 | 73,327,300|145,862,971| 28,052,200 |13,022,460| 1909| 99,673,400 | 71,007,900|150,799,880| 32,381,300 |13,223,955| 1910| 96,269,100 | 65,470,600|155,597,202| 35,579,600 |13,590,658| 1911| 96,890,000 | 60,184,200|170,566,159| 32,151,600 |13,823,733| 1912| 93,451,500 | 54,509,400|188,293,100| 22,199,000 |14,226,900| 1913| 88,884,400 | 53,113,200|181,885,300| 26,508,700 |14,274,700| 1914| 94,531,800 | 47,569,023|173,559,940| 28,586,392 |17 663,686| 1915|101,035,700 | 49,397,797|188,033,156| 26,322,745 |18,915,324| 1916| 92,315,363 | 38,213,328|192,182,900| 22,300,000 |19,232,200| 1917| 84,456,600 | 35,275,000|186,254,256| 18,000,000[164]|14,988,600| ----+------------+-----------+-----------+----------------+----------+
----+---------------+----------+----------+------------ | | | British | Year| Mexico | Canada | India | World[163] ----+---------------+----------+----------+------------ 1880| $989,160 | $815,089| ...|$106,436,800 1881| 858,909 | 1,094,926| ...| 103,023,100 1882| 936,223 | 1,094,926| ...| 101,996,600 1883| 951,000 | 954,000| ...| 95,392,000 1884| 1,183,000 | 954,000| ...| 101,729,000 1885| 867,000 | 1,116,000| $135,000| 108 435,000 1886| 614,000 | 1,330,442| 421,600| 106,163,000 1887| 824,000 | 1,178,637| 320,000| 105,774,900 1888| 974,000 | 1,111,959| 685,720| 110,196,000 1889| 700,000 | 1,295,000| 1,502,600| 123,489,200 1890| 767,000 | 1,666,000| 2,000,000| 118,848,700 1891| 1,000,000 | 930,666| 2,495,000| 130,650,000 1892| 1,129,200 | 907,600| 3,318,300| 146,651,500 1893| 1,305,300 | 927,200| 3,813,600| 157,494,800 1894| 4,500,000[164]| 1,042,100| 3,882,900| 181,175,600 1895| 6,000,000[164]| 1,910,900| 4,656,200| 198,763,600 1896| 8,331,700[164]| 2,810,200| 6,130,500| 202,251,600 1897| 7,500,000[164]| 6,089,500| 7,247,200| 236,083,700 1898| 8,500,000[164]|13,838,700| 7,781,500| 286,879,700 1899| 8,500,000[164]|21,324,300| 8,658,800| 306,724,100 1900| 9,000,000[164]|27,880,500| 9,435,500| 254,576,300 1901|10,284,800 |24,128,500| 9,395,900| 260,992,900 1902|10,153,100 |21,336,700| 9,588,100| 296,737,600 1903|10,677,500 |18,834,500|11,428,900| 327,702,700 1904|12,605,300 |16,462,500|11,722,900| 347,377,200 1905|16,107,100 |14,610,400|11,950,200| 380,288,700 1906|18,534,700 |12,023,900|12,087,700| 402,503,000 1907|18,681,100 | 8,382,800|10,383,600| 412,966,600 1908|22,371,200 | 9,842,100|10,598,500| 442,476,900 1909|23,842,900 | 9,382,200|10,358,600| 454,059,100 1910|24,910,600 |10,205,800|10,718,400| 455,239,100 1911|24,880,100 | 9,762,100|11,054,100| 461,939,700 1912|24,500,000 |12,648,800|11,055,700| 466,136,100 1913|19,308,800 |16,598,900|12,178,000| 459,941,100 1914| 4,788,175 |15,983,004|11,378,400| 439,078,260 1915| 6,559,275 |18,977,901|11,522,457| 468,724,918 1916| 7,690,700 |19,235,000|11,206,500| 454,176,500 1917| 9,000,000[164]|15,449,426|10,756,800| 423,590,200 ----+---------------+---------------------+------------
[161] Compiled from reports of the Director of the Mint, 1880-1917.
[162] Previous to 1898 production of Rhodesia and Mozambique included in Transvaal returns.
[163] Total production of world, 1492-1917, $16,916,735,394.
[164] Estimated.
With the discovery of gold in a mill race at Coloma, Eldorado County, California, by J. A. Marshall in 1848, the history of modern gold production began. The great rush to California followed and the state became the leading gold-producing region of the world. The output for 1860 amounted to $45,320,000, as compared with a total output of only $1,000,000 for the remaining states. For many years the gold production of California has been declining, the total yield in 1917 amounting to only $20,000,000, a decrease of almost $2,000,000 from the output of 1916. About three-fifths of the output comes from lode mines and the remainder from placers.
For a number of years Colorado was the leading gold-producing state, principally because of the output from Cripple Creek, Teller County, which was from 1893 to 1908 the leading gold camp in the United States. Recently the output has fallen below that of California. Over half of the yield of the state in 1916 came from Teller County.
The earliest discovery of gold in Alaska was probably about 1849 along the shores of Cook Inlet. In 1879 the gold-quartz veins near Sitka were discovered, and a year later the placers of Juneau. The discovery of the gold placers in the valley of the Yukon was made in 1886 and of those in the Klondike in 1896. Most of the Alaskan output is obtained from placer deposits, the richest being in the Seward Peninsula near Nome and in the Yukon basin. The largest producing lode mines have been those near Juneau; of these the Treadwell was for long the greatest gold mine in the world, but it is now inactive. During the past few years the working of large low-grade disseminated deposits of the Treadwell type near Juneau has been undertaken on a scale hitherto undreamed of, but thus far these ventures (Alaska Gold and Alaska Juneau mines) have not been financially successful.
The gold-producing area of South Dakota is confined to an area of less than 100 square miles, lying in the Black Hills. The gravels of Whitewood and Deadwood gulches were first washed in 1875, and in 1876 the famous Homestake lodes were discovered. At present about 94 per cent. of the total output of the state is controlled by one company, the Homestake Mining Co., the largest producing company in the United States.
Following the exhaustion of the famous Comstock lode, demarcated in 1851, Nevada was of little importance as a gold-producing state until the discovery of the rich deposits of Tonopah in 1900. At present practically all the gold obtained in the state comes from the vein deposits of Tonopah and Goldfield. Divide is a newly developed camp between these two.
There are three main auriferous areas in Arizona: the vicinity of Bisbee and Tombstone, Cochise County; the Oatman district, Mohave County; and the Verde district, Yavapai County. Arizona was one of the few states to show a larger output in 1917 than in 1916. The United Eastern mine, a new property opened in 1913 in the Oatman district of Mohave County, produced heavily and was responsible for the increase. The gold output of Cochise and Yavapai counties is obtained largely from copper ore.
During the sixties and seventies, Montana was second only to California in its yield of placer gold. The most famous placers were those of Bannack and Alder Gulch and later Helena. Much of the present output is obtained as a by-product from copper ores.
Few mines in Utah are worked exclusively for their gold content, the greater part of the yield of the state being derived from copper and lead ores.
Gold is also mined in Idaho, New Mexico, Oregon, and Washington. Small amounts were produced in 1917 in a number of the Appalachian states. Before the discovery of gold in California, practically all of the gold coined in the United States mint came from the mines of Virginia, Maryland, Alabama, Georgia, and the Carolinas, but since the Civil War their output has not been important. The gold production of the Philippine Islands in 1917 amounted to $1,404,000.
=Canada.=--The total gold yield of Canada in 1900 amounted to $28,000,000, but with the exhaustion of the placer deposits it declined to $8,382,000 in 1907. With the development of vein deposits, production increased steadily from this low point, and reached $19,235,000 in 1916, and $15,272,992 in 1917, placing Canada sixth in the list of gold producers. Three provinces, Ontario, British Columbia, and the Yukon Territory, yield most of the gold, the remaining provinces producing less than 1 per cent. of the total.
More than one-half of the Canadian production comes from the Porcupine district in Temiskaming, Ontario, developed in 1912. Other producing districts, though of minor importance, are Kirkland Lake and Munro Township, also in Temiskaming, and Long Lake, near Naughton, Sudbury district.[165]
[165] “Production of Copper, Gold, Lead, Nickel, Silver, Zinc, and Other Metals in Canada, 1916.” Canadian Department of Mines, Mines Branch, 1917.
At one time most of the gold output of British Columbia was derived from placers, chiefly from those in the Atlin and Cariboo districts, but less than 5 per cent. came from that source in 1917. The main lode mining districts are West Kootenay and Yale, in the southern part of the province.[166] Gold production in 1917 amounted to about half of the total for 1916.
[166] “Production of Copper, Gold, Lead, Nickel, Silver, Zinc, and Other Metals in Canada, 1917.” Canadian Department of Mines, Mines Branch, 1919.
Gold has been known in the Yukon Territory since 1869 and the deposits have been actively worked since 1881. The greater part of the placers of Forty-mile River and all of Sixty-mile River are within Canadian jurisdiction. In 1897 came the discovery of the Klondike. Gold production reached its height in Yukon Territory in 1900, when the output was 1,077,649 fine ounces, valued at $22,000,000. Practically all of the 1917 production was derived from placer deposits.
Gold was mined in Quebec as early as 1823, but Canada was of little importance as a gold-producing region prior to the discovery of the British Columbia placers in 1857. Gold deposits of little economic value are still worked in Quebec, New Brunswick, Nova Scotia, and Newfoundland. Prospecting and development work in Manitoba, Saskatchewan, and Alberta indicate that these provinces may become important producers of gold.
=Mexico.=--For many years Mexico ranked fourth among the gold-producing countries of the world, being surpassed only by the Transvaal, the United States, and Australasia. Revolutions and bandit warfare have seriously interfered with mining operations since 1911, and the output of gold in 1917 was little more than one-third of the normal annual yield. With the establishment of a stable government, able to protect foreign investments, Mexico will no doubt regain its former position.
A large part of the gold output of Mexico is obtained as a by-product from lead, silver, zinc, and copper ores. The only true gold-mining district is the El Oro district of the states of Mexico and Michoacan. The chief producing mines are the Esperanza, El Oro, Mexico Mines of El Oro, and Dos Estrellas. In 1906 the Esperanza was considered, in respect to both actual output and profits earned, the most productive gold mine in the world. Since then it has been surpassed by mines of the United States and the Transvaal. Another famous gold mine of Mexico, the Dolores, situated in western Chihuahua, yields ore whose silver content is almost equal in value to the gold. Lower California, Sonora, Durango, Hidalgo, San Luis Potosi, Guanajuato, and Chiapas are all gold-producing states.
=Central America.=--At the time of the discovery of America, the Spanish were attracted to the region now included in the states of Central America by reports of fabulously rich mines and of the wealth of the Indians. A number of expeditions were sent out in search of the gold and some rich mines were discovered and worked. Gold is still produced in Central America, but the total amount is small, being less than 1 per cent. of the world total in 1913. Honduras is the richest of the states in production and Nicaragua ranks second, the principal centers of the gold-mining industry being in the Departments of Matagalpa and Chontales, and in the district of Cabo Gracias and Prinzapolka.[167]
[167] U. S. Commerce Reports, Supplement 34_a_, 1915, p. 4.
SOUTH AMERICA
South America was also an important source of gold during the years following the discovery of America. The early conquerors obtained gold by plundering the temples, churches, and even the graves of the natives. Following the conquest, the Spaniards by means of their slaves systematically searched much of the continent for gold deposits. About 15 per cent. ($2,266,000,000) of all the gold produced between 1492 and 1917 came from South America.
Today South America is of little importance as a gold producer, the combined yield of all the countries for 1913 being about 2.5 per cent. of the world total. The great bulk of the South American production has so far been alluvial gold. With the establishment of more stable governments and the improvement of transportation facilities it is likely that the production of South America will increase.
According to Maclaren[168] the gold fields of South America are disposed in three somewhat sharply separated areas. The chief area is that extending the length of the Andes from the Isthmus of Panama to central Chile and including the deposits of Colombia. The second area is contained in a well-marked petrographic and metallographic province extending across the rearland of the Guianas and including also the mines of Venezuela and northern Brazil. The third area is contained in the province of Minas Geraes, Brazil. Some gold is obtained from Chile, Argentina, Bolivia, Peru, Ecuador, and Uruguay. The chief gold-bearing areas of Colombia are Choco, the Department of Antioquia, and the district lying between the Cauca and Magdalena rivers. Fairly rich deposits have also been found in Colombia near the Ecuadorian border.[169]
[168] MACLAREN, J. MALCOLM: “Gold: Its Geological Occurrence and Geographical Distribution, 1908,” p. 619.
[169] U. S. Commerce Reports, Supplement 42_b_, 1915, p. 12.
The principal mines of Brazil are the St. John del Rey mine, and the mines owned by the Ouro Preto Gold Mines of Brazil, Ltd., both in the State of Minas Geraes. The former mine is said to be the deepest in the world.
EUROPE
Although Europe in the past has played an important part in the production of gold, very little is mined at the present time. Previous to the discovery of America, much of the gold in use came from the Alps and from Hungary. Deposits were also worked in England, Ireland, Wales, Spain, and Germany.
The only gold mines in Europe of any present economic importance are in the former empire of Austria-Hungary, France, and the Urals of Russia. In the south of France gold has been produced along the streams flowing from the Pyrenees, and also in the eastern provinces. At present only three mines are in operation, which in 1911 produced 2,554 kilograms of gold. The Hungarian deposits are very old, as they were worked by the Romans 2,000 years ago. Most of the producing mines of today are in Transylvania. Russia is credited with producing 5.8 per cent. of the world total in 1913. A small part of this production came from the Urals of European Russia, chiefly as a by-product from other ores, but the greater part was obtained in Siberia. The Siberian deposits are discussed below, under Asia.
ASIA
Since the decline in the Mexican production, Russia ranks fourth among the gold-producing countries. Most of the output comes from Siberia, which has long been a source of gold, the mines of the Altai Mountains being considered among the oldest in the world. The production of gold in Siberia from 1830 to date has been estimated by Russian authorities at approximately $1,000,000,000.
Maclaren[170] has divided the auriferous areas of the country into two distinct regions, the eastern and western. About four-fifths of the country’s production is derived from the former region, which extends in one fairly narrow auriferous belt from Lake Baikal to the southwestern shores of the Sea of Okhotsk.
[170] MACLAREN, J. MALCOLM: “Gold: Its Geological Occurrence and Geographical Distribution,” p. 210.
A number of dredges have been operated in the Ural district. The most promising property is the Riderlinsky, east of Omsk. In the southern Urals, most of the mines produce copper, pyrite, or zinc, the gold by-product making the profits. The Ridder mine, in the Altai Mountains, is the best-known lode mine in Siberia.
Placers are located along the Manchurian frontier on the Onon and Amur rivers. They are among the most important in Siberia and have produced over $100,000,000 in gold. The deposits of Irkutsk along the Lena River are the most important deposits so far exploited in Siberia and are probably the richest placers ever discovered. The district produces about one-third of the Siberian output. The placers are at present about worked out as drift mines, but will continue to produce with the installation of dredges.
Many engineers believe that Siberia is the richest remaining potential source of gold in the world. It has been estimated that the country will produce in the future, say in the next 30 or 40 years, about $6,000,000,000. The unsettled political conditions have greatly interfered with mining. Many of the mines were taken over by the Bolshevists, and although it is unlikely that any attempt at systematic mining will be made, they will probably be robbed of the richer exposed ore before they can be recovered by the owners.
India has long been regarded as a land of riches. Philologists have proved, to their own satisfaction, that Ophir, the source of the stores of gold of Solomon, was located there. In the deserts of northern India lived the gold-digging ants, described by the Greek historians and later writers and as yet unexplained. Present facts do not bear out legend and tradition. In 1913 India contributed only 2.6 per cent. of the world’s total production of gold, an amount hardly proportionate to the extent of the country. The land offers to the prospector an extremely uninviting field. It has been carefully prospected and its deposits have been worked assiduously for at least twenty-five centuries by a people possessing great patience and considerable mining skill.[171] The principal modern producing gold mines of India are in the Kolar field, where the main reef carries five large mines along its strike.
[171] MACLAREN, J. MALCOLM: “Gold: Its Geological Occurrence and Geographical Distribution,” p. 238-240.
Japan was one of the chief contributors to the stream of gold that poured into Europe during the sixteenth century. Portuguese and Dutch traders came to the islands to exchange European products for the gold mined by thousands of natives. The Japanese finally revolted against this domination of their trade and expelled the last of the Portuguese in 1624. A few Dutch were permitted to remain and to trade through certain ports, but under most humiliating conditions. Between the years 1601 and 1764, it is estimated that about 3,763,572 ounces of gold was exported from Japan. At the present the annual gold production of Japan, including Formosa, is about $6,000,000.
Most of the gold-quartz veins of Japan have been worked for many generations and only the poorer sulphide zones remain.
The Island of Formosa, which was acquired by Japan in 1895, had been represented by early European travelers as a storehouse of untold riches. Not until 1890 were the sites of the old workings rediscovered, the discovery of flakes of gold during the construction of a railway precipitating a rush of Chinese miners to the island.[172]
[172] “Mining in Japan, Past and Present,” the Bureau of Mines, Department of Agriculture and Commerce, Japan, 1909, pp. 17 and 64.
The total output of gold in Chosen (Korea) in 1914 approximated $5,000,000, but at present the output is declining because of the abnormal rise in the price of chemicals and materials necessary for mining. The yield for 1918 will probably not exceed $3,500,000, 60 per cent. of which will be obtained from three mines operated by foreign capital. The chief gold-quartz mines of Chosen are included in the American concession at Unsan in North Pyong-an Province, northwestern Korea. From these mines is derived about half of the annual gold production of Chosen. Korea also contains a large number of placer deposits, mostly small, that have been extensively mined by Koreans. The placer deposits of the Unsan district have not yet been worked, but those of the Chiksan district are being exploited by the Japanese.[173]
[173] U. S. Commerce Reports, February 26, 1914.
The small, scattered gold deposits of China, both vein and placer, are worked almost exclusively by the Chinese, as none has been discovered of sufficient richness to attract foreign capital. On the Island of Hainan, southeast of the mainland, the Chinese government is operating mines.
Exploration work carried on in China up to the present does not indicate that the country will ever become an important producer of gold. Even in the provinces contributing most of the present output--Manchuria, Yunnan, and Szechuen--the gold industry gives little promise of growth. During the years 1911, 1912, and 1913, 700 streams were examined in the last two provinces and gold was found in 430, but in no case in sufficient quantity to pay for working.
There have been many rumors concerning the gold deposits of the vast and unexplored territory of Tibet since the very earliest expeditions to that country but the field is still closed to modern enterprise and even to careful scientific examination. Despite previous reports, it has been stated by the geologist accompanying a British expedition about 10 years ago that the mineral value of Tibet was not easily apparent. Near the frontier of the State of Bhutan there are many colonies of gold washers. The Tibetan gold is found in nuggets as well as in spangles and dust, but the Tibetans are said to be careful to leave the nuggets intact, or to replace them if disturbed, under the belief that they are living and are the parents of the spangles and dust, or the roots from which new gold grows, which latter would disappear were the lumps removed.[174]
[174] U. S. Commerce Reports, February 26, 1914.
Siam, Burma, Indo-China, and the Federated Malay States at present contribute only a small part of the gold production of Asia. Exploration and prospecting are proceeding actively and the results to date are favorable. Future developments may substantiate the statements of the ancient writers and cartographers that there was much gold in this region. Gold and other minerals are known to exist in Afghanistan, but with the exception of a gold mine near Kandahar, in charge of a European, the mineral resources are almost entirely undeveloped.
AFRICA
Since 1905 South Africa, including Transvaal, Cape Colony, and Natal, has been the leading gold producer of the world, a position that would have been attained several years earlier had not the Boer War interfered. In 1917, gold valued at $186,255,000, or nearly half of the world’s output, was produced, the greater part being derived from the Witwatersrand, or Rand, near Johannesburg, Transvaal. Production in 1918 fell to $174,068,000.
Gold was first discovered in the Transvaal in 1870, but production was not important previous to the discovery of gold on the farm Langlaagte, Witwatersrand, in 1885. The mines are spread along a belt extending some 62 miles from Randfontein on the west to Holfontein on the east. This belt contains the largest deposit of gold that has ever been found in one place, and its gold content probably equals that of all the other known gold fields of the world combined. The ore is not exceptionally high grade, but can be economically treated in large quantities. The deposit, it has been estimated, may represent $3,000,000,000 to $4,000,000,000 from about 40 square miles, of which about half had been extracted by 1916.
Gold occurs both in vein and placer deposits in Natal and Cape Colony, but the output is small.
Rhodesia, in seventh place in 1913, has developed rapidly in recent years as a producer of gold and now outranks Mexico. According to Portuguese records, gold was mined in Rhodesia as early as 1788. The discovery in 1866 of ancient ruins and of ancient gold mines at Zimbabwe gave rise to the hypothesis that Rhodesia was the Ophir of the Scriptures. Although numerous attempts were made to open the gold fields, no measure of success was obtained until 1891, and only during the present century has the true character of the Rhodesian gold-quartz veins been recognized. The settlement of the country and the development of the mines is the result of the efforts of Cecil Rhodes and the Charter Company.
The gold is widely distributed and most of the mines are small. The future of the country as a gold producer would seem to depend upon the operation of the lower-grade ore bodies by large companies. The Shamva mine is a conspicuous example.
West Africa, especially the Gold Coast, is the only region of Africa, other than the Transvaal and Rhodesia, producing gold in important quantities. The output of the British West Africa colonies in 1917 amounted to about $7,500,000. The unhealthful climate of the region will probably prevent for some years any extensive mining operations by white men.
Gold mines are also worked in Abyssinia, Belgian Congo, Egypt, French East Africa, the former German East Africa, Madagascar, and the Sudan, but the total annual production from all these countries is little more than $2,000,000. The rock carvings and the hieroglyphics of ancient Egypt indicate that northern Africa and the region along the Nile River were important sources of the gold of the ancient world.
AUSTRALASIA
For many years Australasia was a close rival of the United States as a gold producer, frequently outranking this country. Since 1903 there has been a rapid decline, and Australasian production in 1917 was less than one-half the production of the United States. However, Australasia still ranks third and produced 11.3 per cent. of the world’s output in 1913 and about 8.3 per cent. in 1917.
=Australia.=--Gold was discovered in Australia in 1839 and perhaps even as early as 1823. Fearing the unsettling effect of gold-seeking on the progress of the colony, the government authorities kept these early discoveries a secret for a number of years. In 1851, however, a miner recently returned from California, discovered gold near Bathurst, in New South Wales, and a rush similar to the Californian rush began. Discoveries in other parts of the country followed. The vein deposits of Australia occur in two distinct areas, well separated both geographically and geologically. The first includes the gold fields of the west and northwest and the other lies along the great Eastern Cordillera of Australia and stretches northward from Tasmania through Victoria, New South Wales, and Queensland.
For many years Victoria, the smallest of the states, was the largest producer of gold, and up to 1908 had produced about half of the total output of the commonwealth. Among the earlier returns were some of the largest nuggets known. With the discovery in 1892 of the sensational field of Coolgardie, in Western Australia, a state previously believed to be without mineral wealth, Victoria dropped to second place. Kalgoorlie is the chief town and center of the gold-mining area in Western Australia.
Queensland ranks next to Victoria. A disastrous rush occurred in 1858, and 15,000 to 20,000 men were left starving on the banks of the Fitzroy River. The men were rescued by steamers sent by the governments of New South Wales and Victoria. A few years later alluvial gold was found near Peak Down, Clermont, to the present day the principal placer region of Queensland. Charters Towers, the present leading field of the state, was discovered in 1872. The Mount Morgan mine is an isolated mine lying not far from the scene of the ill-fated rush of 1858. It is by far the most productive mine of Queensland, both in gold and copper. New South Wales, although the first Australian state to yield gold in any important quantity, now ranks fourth. Tasmania and South Australia produce only a small amount of gold.
=New Zealand.=--In 1852, the year following the rich discoveries in Australia, gold dust and gold enclosed in quartz were found in New Zealand, about 40 miles from Auckland, but this discovery proved to be of little importance. Ten years later the rich placers of Gabriel’s Gully were discovered, a discovery which attracted a rush from the Australian fields. The gold fields of New Zealand may be divided into three well-defined and well-separated areas: the Huaraki gold field, which contains valuable vein deposits but no placers; the West Coast area, in which the vein and alluvial occurrences are of equal importance; and the Otago area, in which the auriferous alluvial gravels are important and the few known quartz veins have little economic value.
Some gold is produced in other parts of Australasia, notably in the British and Dutch East Indies, and in British New Guinea. Deposits of little importance are reported in New Caledonia, the Fiji Islands, and in the former German New Guinea.
PROBABLE CHANGES IN KNOWN GEOGRAPHICAL DISTRIBUTION IN THE NEAR FUTURE
Specific predictions regarding changes in the geographical distribution of the sources of the world’s gold seem valueless. During the last few years the gold production of the principal fields has decreased. Aside from any decline due to the war and the attending scarcity of labor and high mining costs, it seems probable that the gold output of the world has reached its zenith and that further decline is to be expected unless new ore bodies are added to known reserves or unless some revolutionary method of extracting gold from the low-grade ores is discovered.
Although the leading fields, South Africa, the United States, and Australia, seem to have reached or passed their period of greatest output, there are a number of fields in unsettled and unexplored regions of the world which may be expected to show increased production. The possibilities of Siberia have already been mentioned, and it is the opinion of many engineers that this region will eventually rival South Africa. South America has produced an enormous quantity of gold, chiefly alluvial, and is expected to yield an increased output in the future. The future of South Africa is problematical.
During the last half century the greatly increased gold production has been due largely to the exploitation of the low-grade properties, this being made possible by improvements in mining and metallurgy. It seems, however, that this development has reached a point where excessive labor costs prevent the use of ores of a still lower grade.
In general, therefore, the gold output of the world may be expected to remain static or to decline, at least until the level of prices is so changed that it is considered profitable to expend capital in the prospecting and developing of regions hitherto unexplored.
POLITICAL CONTROL
The political control may be summarized as follows:
Percentage of Country 1913 production British Empire 62.9 United States 19.3 Russia and Siberia 5.8 Japan 1.8 France 1.4 Belgium 0.2 Central Power 0.55 Mexico 4.2 Other Countries 3.7
Great Britain controlled politically 62.9 per cent. of the 1913 production, through state sovereignty over the Transvaal, Australia, Rhodesia, Canada, and India. Other British possessions contributing small amounts to the world output are British Honduras, British Guiana, British West Africa, British New Guinea, New Zealand, British East Indies, Egypt, and the British Isles. All gold produced in the British Empire must be sent to England.
The United States controlled politically 19.3 per cent. of the 1913 output, practically all of which came from continental United States. The Philippine Islands and Porto Rico produced small amounts.
Russia is one of the principal contributors to the world’s gold supply, producing 5.8 per cent. of the 1913 output. Most of this 5.8 per cent. came from the mines of Siberia, and the political control of that region is still unsettled. Mexico, with an output equal to 4.2 per cent. of the world total, was the largest producer among the neutral powers during the war. France controlled 1.4 per cent. of the world total, a third coming from the mines in France and the remainder from the French colonies in South America and Africa. Japan controlled 1.8 per cent., 1 per cent. coming from the Japanese islands and Formosa, and the remainder from Korea. The rest of the 1913 production, amounting to about 4 per cent., was widely scattered, and was controlled by a number of nations of South America, Europe and Asia.
It should be pointed out that although Great Britain and the United States control politically the important producing fields of the present, all of which seem to have reached their maximum output, the control of the fields expected to be important producers in the future is in different hands.
During the war, particularly during its later months, most of the belligerent nations and some of the neutrals placed restrictions on the exportation of gold, either as bullion or in manufactured form. In normal times gold is allowed to flow freely between nations, as needed to settle international trade balances.
COMMERCIAL CONTROL
The commercial control of the gold resources of the world is shown in Table 68 and in Figure 20. In examining the table and the diagram the reader should remember that the figures and percentages are at best only estimates. Most gold mines are owned by companies whose shares are bearer’s shares; these are bought and sold in the stock markets of many financial centers. Today the control may be in the hands of one group, tomorrow in the hands of another. Because of this ever-changing ownership, it is difficult to determine the nationality of the commercial control, particularly when there is any attempt to conceal the nationality of the capital invested. Table and diagram, however, are believed to be approximately correct. The information upon which they are based was obtained from mining manuals, the reports of mining companies, the reports of consular agents in the various countries, and by personal interviews with mining engineers.
Table 68 may be summarized as follows:
COMMERCIAL CONTROL OF GOLD RESOURCES
Percentage of Country 1917 production British Empire 63.0 United States 23.0 France 5.6 Russia 2.1 Japan 1.7 China 0.84 Belgium 0.5 Brazil 0.07 Germany 0.81 Mexico 0.21 Unclassified 1.9
It is interesting to note that political control and commercial control are closely identical in the case of the British Empire and the United States. French control is much more important commercially than politically. In other countries, little domestic capital is available, and political control is much greater than commercial control.
Commercial control, if different from political control, joins in a test of strength with it in periods of emergency or unrest, with the result that the stronger subdues the weaker. As regards governments that are strong and stable enough, the recent war has demonstrated that the elimination of foreign capital invested in a country is easy. The United States and Great Britain, in particular, have taken over a great number of companies formerly owned by German interests. Where the government is not so strong, however, the commercial control, backed in many instances by the more vigorous home governments from which the invested capital comes, wins the day, and political events are thus determined, even to the extent of overturning the weaker government. Thus the overturning of the Boer government and the birth of British South Africa was the result of the clash between British commercial control and Boer political control.
The question of the control of gold stocks is discussed in the report of the gold committee of the Department of the Interior.[175] The control of stocks in 1916 is shown graphically in Figure 21 and is discussed more in detail in the section following, “Position of Leading Commercial Nations.”
[175] Report of the committee appointed by the Secretary of the Interior to study the gold situation.
The gold mines of the United States are controlled mainly by American capital. A few of the mines are predominantly British, and shares in other mining companies are undoubtedly held in London, but the total production controlled by Great Britain is small. It has been estimated that in recent years 95 per cent. of the annual output was controlled by Americans and the remainder by British.
Over half of the gold mined in Canada comes from the Province of Ontario, chiefly from the Porcupine district. In 1917 and 1918, the Hollinger mine, owned by the Hollinger Gold Mines, Ltd., was the main producer. It is one of the greatest gold mines in the world, having paid over $9,000,000 in dividends up to the end of 1918. The control of the company is held in the United States. Another mine of importance in the Porcupine district is the McIntyre, owned by the McIntyre Porcupine Mines, Ltd., also American. In the Province of British Columbia, the greatest producing camp is Rossland, operated by the Consolidated Mining & Smelting Co., controlled by United States and Canadian capital. It has been estimated that about two-thirds of the gold mines of Canada are controlled by United States capital and the remaining one-third by British capital, including Canadian.
TABLE 68.--FINANCIAL CONTROL OF THE GOLD PRODUCTION OF THE WORLD, 1917
(Percentages are only approximate)
-----------+------------+------------------------------------- | | 1917 Production controlled | | financially by... | Production +-----------+------------+-----------+ | 1917 | United | United | | Country |(in dollars)| States | Kingdom | France | -----------+------------+-----------+------------+-----------+ North | | | | | America: | | | | | United | | | | | States | $83,750,700|$79,563,165| $4,187,535| ...| Canada | 15,200,000| 10,000,000| 5,200,000| ...| | | | | | Mexico | 9,000,000| 2,700,000| 3,600,000| $900,000| | | | | | | | | | | | | | | | Central | | | | | America | 3,122,000| 750,000| 750,000| ...| | | | | | South | | | | | America: | | | | | Argentina| 4,600| ...| ...| ...| Bolivia | 115,000| ...| ...| ...| Chile | 200,000| 200,000| ...| ...| Brazil | 2,958,000| ...| 2,662,200| ...| Colombia | 6,200,000| 620,000| 3,000,000| 900,000| | | | | | | | | | | | | | | | Guiana: | | | | | British| 600,000| ...| 600,000| ...| Dutch | 400,000| ...| 125,000| 125,000| French | 1,500,000| ...| ...| 1,500,000| Peru | 1,300,000| 1,300,000| ...| ...| Other S. | | | | | America | 1,357,000| ...| ...| ...| | | | | | Europe: | | | | | Austria- | 2,179,000| | | | Hungary | [176]| ...| ...| ...| France | 700,000| ...| ...| 700,000| Germany | 135,600| ...| ...| ...| | [176]| | | | Great | | | | | Britain | 5,000| ...| 5,000| ...| Italy | 2,000| ...| ...| ...| Russia | | | | | and | | | | | Siberia | 18,000,000| ...| 9,000,000| ...| | | | | | Serbia | 328,000| ...| ...| ...| | [176]| | | | Sweden | 10,000| ...| ...| ...| Turkey | [176]500| ...| ...| ...| | | | | | Asia: | | | | | China | $3,600,000| ...| ...| ...| | | | | | Chosen | | | | | (Korea) | 4,444,000| $2,500,000| ...| ...| Dutch | | | | | East | | | | | Indies | 2,818,000| ...| $2,100,000| ...| Federated| | | | | Malay | | | | | States | 342,300| ...| 342,300| ...| French | | | | | Indo- | | | | | China | 50,000| ...| ...| $50,000| Japan and| | | | | Formosa | 5,595,200| ...| ...| ...| India and| | | | | British | | | | | Indies | 10,756,800| ...| 10,756,800| ...| Australa-| | | | | sia | 35,945,500| ...| 35,945,500| ...| | | | | | Africa: | | | | | Belgian | | | | | Congo | 2,000,000| 500,000| ...| ...| Egypt and| | | | | Sudan | 150,000| ...| 150,000| ...| German | | | | | East | 253,200| | | | Africa | [176]| ...| ...| ...| Madagas- | | | | | car | 1,000,000| ...| ...| 1,000,000| Rhodesia | 14,988,600| ...| 14,988,600| ...| Transvaal| 186,254,256| ...| 167,629,256| 18,625,000| | | | | | West | | | | | Africa | | | | | (British)| 7,435,488| ...| 7,435,488| ...| | | | | | Undis- | | | | | tributed | 2,785,656| ...| ...| ...| -----------+------------+-----------+------------+-----------+ Total | | | | | (1917) |$422,590,100|$98,133,165|$268,477,679|$23,800,000| Total (in- | | | | | cluding | | | | | 1913 | | | | | figures) |$425,486,400| | | | -----------+------------+-----------+------------+-----------+ Per cent. | | | | | of world | | | | | production | 100 | 23 | 63 | 5.6 | -----------+------------+-----------+------------+-----------+
---------------------------------------------------------------- 1917 Production controlled financially by... +----------+----------+----------+----------+--------+ | | | | | | Country | Belgium | Japan | China | Russia | Brazil | -----------+----------+----------+----------+----------+--------+ North | | | | | | America: | | | | | | United | | | | | | States | ...| ...| ...| ...| ...| Canada | ...| ...| ...| ...| ...| | | | | | | Mexico | ...| ...| ...| ...| ...| | | | | | | | | | | | | | | | | | | Central | | | | | | America | ...| ...| ...| ...| ...| | | | | | | South | | | | | | America: | | | | | | Argentina| ...| ...| ...| ...| ...| Bolivia | ...| ...| ...| ...| ...| Chile | ...| ...| ...| ...| ...| Brazil | ...| ...| ...| ...|$295,800| Colombia | $620,000| ...| ...| ...| ...| | | | | | | | | | | | | | | | | | | Guiana: | | | | | | British| ...| ...| ...| ...| ...| Dutch | ...| ...| ...| ...| ...| French | ...| ...| ...| ...| ...| Peru | ...| ...| ...| ...| ...| Other S. | | | | | | America | ...| ...| ...| ...| ...| | | | | | | Europe: | | | | | | Austria- | | | | | | Hungary | ...| ...| ...| ...| ...| France | ...| ...| ...| ...| ...| Germany | ...| ...| ...| ...| ...| | | | | | | Great | | | | | | Britain | ...| ...| ...| ...| ...| Italy | ...| ...| ...| ...| ...| Russia | | | | | | and | | | | | | Siberia | ...| ...| ...|$9,000,000| ...| | | | | | | Serbia | ...| ...| ...| ...| ...| | | | | | | Sweden | ...| ...| ...| ...| ...| Turkey | ...| ...| ...| ...| ...| | | | | | | Asia: | | | | | | China | ...| ...|$3,600,000| ...| ...| | | | | | | Chosen | | | | | | (Korea) | ...|$1,944,000| ...| ...| ...| Dutch | | | | | | East | | | | | | Indies | ...| ...| ...| ...| ...| Federated| | | | | | Malay | | | | | | States | ...| ...| ...| ...| ...| French | | | | | | Indo- | | | | | | China | ...| ...| ...| ...| ...| Japan and| | | | | | Formosa | ...| 5,595,200| ...| ...| ...| India and| | | | | | British | | | | | | Indies | ...| ...| ...| ...| ...| Australa-| | | | | | sia | ...| ...| ...| ...| ...| | | | | | | Africa: | | | | | | Belgian | | | | | | Congo | 1,500,000| ...| ...| ...| ...| Egypt and| | | | | | Sudan | ...| ...| ...| ...| ...| German | | | | | | East | | | | | | Africa | ...| ...| ...| ...| ...| Madagas- | | | | | | car | ...| ...| ...| ...| ...| Rhodesia | ...| ...| ...| ...| ...| Transvaal| ...| ...| ...| ...| ...| | | | | | West | | | | | | Africa | | | | | | (British)| ...| ...| ...| ...| ...| | | | | | | Undis- | | | | | | tributed | ...| ...| ...| ...| ...| -----------+----------+----------+----------+----------+--------+ Total | | | | | | (1917) |$2,120,000|$7,539,200|$3,600,000|$9,000,000|$295,800| Total (in- | | | | | | cluding | | | | | | 1913 | | | | | | figures) | | | | | | -----------+----------+----------+----------+----------+--------+ Per cent. | | | | | | of world | | | | | | production | 0.5 | 1.7 | 0.84 | 2.1 | 0.07 | -----------+----------+----------+----------+----------+--------+
-------------------------------------------------------+ 1917 Production controlled | financially by... | +------------+----------+---------+---------+ | | | | Un- | Country |Total Allies| Germany | Mexico |classified| -----------+------------+----------+--------+----------+ North | | | | | America: | | | | | United | | | | | States | $83,750,700| ...| ...| ...| Canada | 15,200,000| ...| ...| ...| | | | | | Mexico | 7,200,000| $900,000|$900,000| ...| | | | | | | | | | | | | | | | Central | | | | | America | 1,500,000| ...| ...|$1,622,000| | | | | | South | | | | | America: | | | | | Argentina| ...| ...| ...| 4,600| Bolivia | ...| ...| ...| 115,000| Chile | 200,000| ...| ...| ...| Brazil | 2,958,000| ...| ...| ...| Colombia | 5,140,000| ...| ...| 1,060,000| | | | | | | | | | | | | | | | Guiana: | | | | | British| 600,000| ...| ...| ...| Dutch | 250,000| ...| ...| 150,000| French | 1,500,000| ...| ...| ...| Peru | 1,300,000| ...| ...| ...| Other S. | | | | | America | ...| ...| ...| 1,357,000| | | | | | Europe: | | | | | Austria- | | 2,179,000| | | Hungary | ...| [176]| ...| ...| France | 700,000| ...| ...| ...| Germany | ...| 135,600| ...| ...| | | [176]| | | Great | | | | | Britain | 5,000| ...| ...| ...| Italy | ...| ...| ...| 2,000| Russia | | | | | and | | | | | Siberia | 18,000,000| ...| ...| ...| | | | | | Serbia | ...| ...| ...| 328,000| | | | | [176]| Sweden | ...| ...| ...| 10,000| Turkey | ...| ...| ...| [176]500| | | | | | Asia: | | | | | China | $3,600,000| ...| ...| ...| | | | | | Chosen | | | | | (Korea) | 4,444,000| ...| ...| ...| Dutch | | | | | East | | | | | Indies | 2,100,000| ...| ...| $718,000| Federated| | | | | Malay | | | | | States | 342,300| ...| ...| ...| French | | | | | Indo- | | | | | China | 50,000| ...| ...| ...| Japan and| | | | | Formosa | 5,595,200| ...| ...| ...| India and| | | | | British | | | | | Indies | 10,756,800| ...| ...| ...| Australa-| | | | | sia | 35,945,500| ...| ...| ...| | | | | | Africa: | | | | | Belgian | | | | | Congo | 2,000,000| ...| ...| ...| Egypt and| | | | | Sudan | 150,000| ...| ...| ...| German | | | | | East | | 253,200| | | Africa | | [176]| ...| ...| Madagas- | | | | | car | 1,000,000| ...| ...| ...| Rhodesia | 14,988,600| ...| ...| ...| Transvaal| 186,254,256| ...| ...| ...| | | | | | West | | | | | Africa | | | | | (British)| 7,435,488| ...| ...| ...| | | | | | Undis- | | | | | tributed | ...| ...| ...| 2,785,656| -----------+------------+----------+--------+----------+ Total | | | | | (1917) |$412,965,844|$3,467,800|$900,000|$8,152,756| Total (in- | | | | | cluding | | | | | 1913 | | | | | figures) | | | | | -----------+------------+----------+--------+----------+ Per cent. | | | | | of world | | | | | production | 96.81 | 0.81 | 0.21 | 1.9 | -----------+------------+----------+--------+----------+
-----------+---------------------------------------------------------- | | + | Country |Remarks -----------+---------------------------------------------------------- North | America: | United |95 per cent. by United States capital; 5 per cent. by States |British. Canada |66 per cent. by United States capital; 33 per cent. by |British. Mexico |Capital control: British 40 per cent.; United States 30 |per cent.; French 10 per cent.; German 10 per cent. and |Mexican 10 per cent. | Central |50 per cent. by natives; 25 per cent. each by United America |States and Great Britain. | South | America: | Argentina| Bolivia | Chile | Brazil |90 per cent. by British capital. Colombia |Capital control: 50 per cent. British; 15 per cent. |French; 10 per cent. Belgian; 10 per cent. United States; |and 15 per cent. local. | Guiana: | British| Dutch | French | Peru | Other S. | America | | Europe: | Austria- | Hungary | France | Germany | | Great | Britain | Italy | Russia | and |Large part of Russian production probably controlled by Siberia |German capital. Situation uncertain. | Serbia | | Sweden | Turkey | | Asia: | China |Probably controlled largely by Japanese and other foreign |capital. Chosen |Part of production credited to Japan controlled by (Korea) |British. Dutch | East | Indies | Federated| Malay | States | French | Indo- | China | Japan and| Formosa | India and| British | Indies | Australa-|Before war considerable capital controlled by Germans. sia |Small blocks now owned by Dutch and Belgians. | Africa: | Belgian | Congo |25 per cent. by American capital. Egypt and| Sudan | German | East | Africa | Madagas- | car | Rhodesia | Transvaal|Before war controlled in large part by German interests. |At present: British, 90 per cent.; French, 10 per cent. West | Africa | (British)|Probably all controlled by British capital. | Undis- | tributed | -----------+---------------------------------------------------------- Total | (1917) | Total (in- | cluding | 1913 | figures) | -----------+---------------------------------------------------------- Per cent. | of world | production | -----------+----------------------------------------------------------
[176] Production in 1913. Later figures not available.
The gold mines of Mexico are owned by British, American and French capital in the order named. The principal mining companies of the El Oro district, the leading gold district of the republic, are El Oro Mining & Railway Co., Ltd., Esperanza, Ltd., and the Dos Estrellas Mining Co. British capital controls El Oro Mining & Railway Co., Ltd., and 51 per cent. of the shares of Esperanza, Ltd., the remaining 49 per cent. being controlled by Americans. The French have been acquiring control of mining properties in El Oro district in recent years. They now own Dos Estrellas Mining Co., and the Mexico Mines of El Oro, Ltd. Both companies were previously controlled in London. The Dolores mine, in the western part of the State of Chihuahua, one of the famous gold mines of Mexico, is owned by the Mines Company of America, an American corporation.
In the State of Durango, the gold mines, most of which also produce silver, are owned by the American Smelting & Refining Co. (American), the Bacis Gold & Silver Mines Co. (British), and the Inde Gold Mining Co. (American). Most of the gold-silver mines of the State of Guanajuato have been developed by American capital. The State of Sinaloa is becoming a gold-producing region; the Palmarito mines of the Mocorito district and the Minas de Tajo at Rosario are owned by American interests. Gold is found in the copper ores of Sonora. Most of the mines of the district are controlled by Americans.
The mines of Chihuahua, Hidalgo, and Zacatecas are primarily silver mines but their ores carry some gold. In Chihuahua, American capital is probably predominant, with British ranking second. During recent years, German interests, through the American Metal Co. and its subsidiaries, have been acquiring control of properties in Chihuahua and in other parts of Mexico. German capital is also invested in Zacatecas, the main company being controlled by A. Goerz & Co., Ltd. The mines of the State of Hidalgo, the leading silver-producing district of Mexico, are owned by American, British and Mexican capital.
The gold mines of Central America[177] are of some importance at present, and production may increase somewhat in the future. The mines are owned for the most part by American and British capital, in the order named. Subsidiaries of the United Fruit Co., and the Tonopah Mining Co., both American, operate properties in Costa Rica and Nicaragua.
[177] “Investments in Latin America and the British West Indies,” Special Agent Series No. 169, Bureau of Foreign and Domestic Commerce, U. S. Department of Commerce, 1918.
In Colombia, the leading gold-producing country of South America, most of the large companies are British, the most important being the Pato Mines, the Nechi Mines, and the Frontino and Bolivia Mines. A Belgian company, the Platinum & Gold Concessions of Colombia, Ltd., and a French company, the San Antonio Gold Mines Co., Ltd., have recently acquired gold-mining concessions. American capital is also invested in the industry.
The two most important mining companies of Brazil, the St. John del Rey Mining Co., Ltd., and the Ouro Preto Gold Mines of Brazil, Ltd., are under British management. Some French capital is interested in the latter property. Most of the mines of French Guiana are controlled by French companies. In the remaining South American countries gold mining is of comparatively little importance. Production is controlled largely by British and American capital.
The foreign capital invested in the mines of Siberia and Russia is mainly British, though Germany is known to have been much interested in the industry. Some Russian capital, especially that furnished by the large Russian banks, was invested in Siberian mining properties. The mining laws of the old Russian Empire provided that mineral properties could be held both by foreign and Russian companies under concessions or leases granted by the crown or under leases from Russian estates. In many cases foreign capitalists formed holding companies to acquire a controlling interest in a Russian company in whose name the property was held and operated. Most of these holding companies had their main offices in London and most of the directors were British citizens. Control was apparently British. The shares of the companies were bearers’ shares, however, and were traded in extensively on the Petrograd exchange.
The most important gold-mining district of Siberia is in the Province of Irkutsk, on the Lena River. A Russian company, the Lenskoie Gold Industrial Co., has been operating the principal properties of this district since 1863. The directors of the company are Russian Jews. A British company, the Lena Goldfields, Ltd., held 70 per cent. of the shares of the Lenskoie Co., but in 1917 completed the sale of 51,000 shares of stock to a Petrograd group including the Imperial Foreign Corporation, Ltd., and the Russian and English Bank. The Lena Goldfields, Ltd., now owns less than 10 per cent. of the Lenskoie stock.
A pyrite-copper mine yielding enough gold as a by-product to make the profit is located in the government of Perm, southern district of the Ural Mountains, and is owned by the Kyshtim Mining Works, a Russian company controlled by the Kyshtim Corporation, Ltd., of London. The company holds a large concession, including forests, farms, and mineral land. The control of the Kyshtim Corporation is apparently British.
The Tanalyk Corporation is controlled by practically the same interests as those controlling the Kyshtim Corporation and was organized to acquire entire control of the South Urals Mining & Smelting Co. The property of the company, situated in the County of Orsk, Orenburg government, southern Urals, is only a prospect and has not been fully developed. It includes a total area of 28,350 acres of timber and mineral land. The ore contains copper, gold, and silver, the copper content being the most valuable. During 1917, the shares held in the Kyshtim Mining Works and the South Urals Mining & Smelting Co. were vested in the Canadian Development Corporation, Ltd., a company registered in Canada, probably for the purpose of escaping the high British income taxes. The transfer involved no change of control, as the two British holding companies, the Kyshtim Corporation and the Tanalyk Corporation, Ltd., control the Canadian company.
The Kolchan placer property, in the Okhotsk mining province of Eastern Siberia, has been leased, for a royalty based on the gross output of gold, by the Orsk Goldfields, Ltd., a British company, from the Russo-Asiatic Bank. The Orsk Goldfields, Ltd., originally controlled a gold-mining property in the Province of Orenburg, southern Urals, but abandoned the lease and option.
A great deal of gold is produced in Siberia as a by-product of copper, lead, and zinc mines. The control of these mines is much the same as the control of the above-mentioned gold properties--British with Russian shareholders, chiefly representative of Russian banks.
Japanese control is being expanded, especially in eastern Siberia. It was reported in the Japanese press, in November, 1918, that the Japanese special financial mission was planning the establishment of a Japan-Russian partnership enterprise similar to the Japan-China Industrial Association for the purpose of obtaining from the Russian authorities rights in the Siberian mining and forest areas and of exploiting the natural resources of Siberia. It was proposed that among the investors in the partnership should be included Russian capitalists, the South Manchurian Railway, the East Asia Development Co., the Japan-China Mercantile Association, and capitalists of the Entente countries.
Practically all of the output of India comes from the mines of the Kolar reef of Mysore. There are six large producing companies, as follows: Champion Reefs Mining Co., of India, Ltd.; Gold Fields of Mysore and General Exploration, Ltd.; Mysore Gold Mining Co., Ltd.; Nundydroog Co., Ltd.; Balaghat Gold Mining Co., Ltd.; and Ooregum Gold Mining Co. of India, Ltd. The companies are all British and are owned by closely connected interests. Other operating companies in India are the Hutti (Nizam’s) Gold Mines, Ltd., of Hyderabad, southern India; and the Northern Anantapur Gold Mines, Ltd., and Jibutil (Anantapur) Gold Mines, Ltd., Madras Presidency, all being British companies.
In Japan the state reserves to itself the right of original ownership in all ores, and grants to individuals or companies the right to work the deposits. Under the law of 1890, a foreigner was disqualified from working a mine and was not permitted to become a member of a mining establishment, so that the right of working mines was exclusively reserved for Japanese subjects. By an amendment of the mining regulations in 1900, business establishments organized by Japanese or foreigners or by both are now permitted to work mines, provided such establishments are placed under Japanese laws. A bill was recently introduced into the Japanese Parliament proposing to grant the privilege of mining and property rights to foreigners. Japanese capital has almost complete control of the gold mines of the empire.
The principal gold mines are owned by the following companies: Tanak Chobei (Formosa), Mitsubishi & Co. (Sado), Shimadzu Tadashige (Satsuma), Fujita & Co. (Rikuchu and Formosa), Kimura Kintaro (Formosa), and Ushio Gold Mine Co. (Satsuma).
The most valuable of the mineral concessions of Chosen (Korea), including gold, are in the hands of foreign companies, the majority of which are American. The Oriental Consolidated Mining Co., an American company, controls the Unsan mines in North Pyong-an Province, northwestern Korea, the most important gold-producing property of the country. The concession includes 600 square miles on the Anju River and has about 21 years to run, with the option of renewal for 15 years. The operating company pays $15,000 annually to the Korean government. Ore reserves were estimated on July 1, 1916, at 852,000 tons, valued at $4,823,000.
The Chiksan mines, in South Choonchong Province, are also managed by American capital. The Suan mines, in Whanghai Province, were originally controlled by a British company but have been leased to an American company. An Italian company owns mines in North Pyong-an Province, and a British company is operating in North Choonchong Province. A German company owned mines, not in full working order, in North Pyong-an Province, but the properties have doubtless been seized by the Japanese government. Japanese and Korean miners own and operate the smaller mines of the country, the output of which has decreased greatly during recent years.
Although the gold output of China in 1917 amounted to $3,600,000, the deposits are small and widely scattered and are owned and operated almost exclusively by the native miners. Some of the larger mines have been financed by the governments of the provinces. In some provinces the owners of mining property are not permitted to seek investments of foreign capital unless they are unable to finance the property within the province. Prospecting has been carried on in many parts of the country in recent years, but no deposits have been discovered sufficiently promising to attract foreign investors. In view of their activity in developing the other natural resources of China, it is probable that the Japanese will attempt to control the industry should any important deposits be discovered.
In the Transvaal all minerals belong to the government and not to the owners of the surface of the land. When gold, or any other mineral, is discovered, a part of the territory (less than half) is reserved for the owner of the land, another part for the discoverer of the mineral, and the remainder is open to location. At present the ownership of mineral lands is being retained by the government. The right to exploit the mineral wealth is granted on a lease to the highest bidder, the bids being based upon a percentage of profits, graded according to working costs and grade of ore. A tax of 10 per cent. on profits, allowing for amortization of capital, is levied on all gold-mining properties.
Before the war, practically all the gold mines of the Witwatersrand were controlled by British and German capital. The first American company entered the field in 1917 and some French capital has also been invested. The German position was strong, as the German companies controlled half, and perhaps more, of the capital invested in gold mines. The report of the South African Custodian of Enemy Property issued early in 1918 showed that no less than 26,000 enemy shareholders in gold, coal, and other mining concerns in the Union owned stock to the aggregate nominal value of $37,500,000. As gold is by far the most important mineral of the Transvaal, it is probable that the greater part of this German capital was invested in gold mines. The enemy firms were wound up or went into voluntary liquidation, and enemy shares in mining corporations to the face value of $24,000,000 were taken charge of by the Custodian of Enemy Property.[178]
[178] “Engineering and Mining Journal,” May 11, 1918, p. 888.
The control of the gold mines of the Transvaal is centered in the following six companies: Central Mining & Investment Corporation, the Consolidated Mines Selection Co., Johannesburg Consolidated Investment Co., the Consolidated Goldfields of South Africa, the Union Corporation (formerly Ed Goerz & Co.), and the General Mining & Finance Corporation. The last two companies were absolutely German before the war. The Central Mining & Investment Corporation controls probably 50 per cent. of the output of the district. American capital is interested in the Consolidated Mines Selection Co. Another American company, the Anglo-American Corporation of South Africa, Ltd., was registered at Pretoria on September 25, 1917, with an issued capital of £1,000,000. The immediate object of the corporation is to participate in tendering for leases of certain Far East Rand gold-mining areas.[179]
[179] U. S. Commerce Reports, December 15, 1917, p. 1033.
It has been reported that French capital controls about 10 per cent. of the annual output. For many years the majority of the mining engineers in the Transvaal were Americans.
The Germans had not only acquired a considerable control through the investment of capital in mining properties, but they also exercised control through their trade in mine supplies. Orenstein-Arthur Koppel Co. had established an important trade in rails, mine trucks, and similar supplies, and continued to do business even after the beginning of the war. Soon after the sinking of the Lusitania, a mob destroyed the offices of the company in Johannesburg and burned a stock of much-needed supplies. At the outbreak of the war it was feared that there might be serious obstacles in the way of the gold-mining industry continuing a normal course, because of the possible difficulty in obtaining enough of the cyanide, mercury, and zinc used in gold extraction, much of which had been previously supplied by Germany. The necessary materials were obtained from other sources, however.
Rhodesia is controlled by the British South African Co., organized by Cecil John Rhodes, for whom the colony was named. The company is entirely British; it is the government, levies the taxes, administers the laws, and controls the mining industry. Companies and individuals are permitted to locate mining claims much the same as they are in California. The Goldfields Rhodesian Development Co., which has large Rhodesian mining interests, is an offshoot of the Consolidated Goldfields of South Africa. It is safe to say that the gold mines of Rhodesia are owned and worked entirely by British capital. A percentage tax is levied on the output of the gold mines.
In Australia, before the war, much the same conditions existed as in South Africa. The large gold-mining companies were seemingly British; their headquarters were either in Australia or in London and their directors and managers were British. It is certain, however, that a considerable amount of German capital was invested in the companies. Among the important producing companies are the Associated Gold Mines of Western Australia, Great Boulder Proprietary Mines, Ltd., Golden Horseshoe Estates Co., Ltd., Ivanhoe Gold Corporation, Ltd., all of Western Australia; the Mount Morgan Gold Mining Co., of Queensland; the Mount Boppy Gold Mining Co., and the Mount Lyell Mining & Railway Co., Ltd., of Tasmania.
Through the vigorous action of the Australian prime minister, William M. Hughes, German capital was expelled early in the war from all the industries of the commonwealth, including gold, lead, and zinc mines, smelters and refineries, and buying organizations. In January, 1916, to safeguard the financial position of the commonwealth, the prime minister issued decrees providing that no new flotations of companies or increases in the capital of existing companies would be allowed without the consent of the treasurer of the commonwealth; that companies incorporated in Australia would have three months to discontinue the holding of their shares by persons of enemy nationality or origin, whether naturalized or not; and that in the future no transfers of shares to persons of enemy nationality or origin would be permitted.[180]
[180] U. S. Commerce Reports, February 21, 1916, p. 733.
The remaining countries of the world are of little importance as gold producers; hence a discussion of the commercial control of their mines would be of little value. In most of them the mining properties are owned and operated by domestic capital, the former Empire of Austria-Hungary being one exception to this general statement. Prior to the war, British capital controlled gold mines in Transylvania.
The ownership of smelters and reduction plants has little influence upon the commercial control of the gold industry. Most of the large gold-mining companies have their own refineries at the mines, and smelter control is therefore identical with mine control. Some gold is produced as a by-product in the smelting of lead, silver, and copper, particularly in the United States, where the smelters are controlled almost entirely by American capital. Further discussion of the commercial control of smelters and refineries will be found in Chapters XIV, XV, and XXX.
The control of secret processes and patents is of less importance in the commercial control of the gold-mining industry than that of any other mineral. The industry is peculiar in that the price of gold is always fixed and there is no competition for a market. Control of an improved method of extracting or refining gold might enable one company to reduce mining and refining costs and thus insure a larger profit, but giving the improved process to a second company would not necessarily reduce the profits of the company that had discovered it.
POSITION OF LEADING COMMERCIAL NATIONS
The United States controlled politically through state sovereignty 19.3 per cent. of the gold production in 1913, ranking next to Great Britain. Commercial control was somewhat greater, amounting to approximately 23 per cent. of the 1917 production. The mines of the United States are owned almost exclusively by Americans, and American capital is invested in many foreign fields. Over half, perhaps as much as two-thirds, of the mines of Canada are owned by United States corporations. The largest of the Korean companies are owned or managed by American capital. Two American companies were established recently in the Transvaal. Probably 30 to 40 per cent. of the gold produced in Mexico in normal times comes from the United States owned mines. The production of Central and South America, although at present relatively unimportant, is largely controlled by Americans.
Although outranked in production by Great Britain, the United States controls by far the largest stocks of gold coin and bullion of any nation. In 1916 there was in the banks, the national treasuries, and in circulation in the United States $2,299,454,000, or almost twice the amount possessed by any other nation. In 1918 this amount had increased to $3,050,000,000. The monetary reserve probably exceeds the total gold output of the United States since the recording of statistics of production began.
In view of the fact that the national debt of the United States is low as compared with the debts of the other principal nations, the financial system of this country is on a relatively sound basis. When the time comes to redeem the outstanding bonds and other forms of indebtedness that have accrued during the war, the United States will undoubtedly be in a more favorable position than any of the other belligerents.
The stocks of gold in the chief gold-producing countries in 1916 are shown diagrammatically in Figure 21.
Great Britain is the leading gold-producing nation of the world. The British Empire controlled politically 62.9 per cent. of the 1913 production, and British commercial control approximated 63 per cent. An insignificant amount of gold is produced in the British Isles, but the empire includes such important gold producers as South Africa, Australia, Rhodesia, India, and Canada. British capital also controls gold mines in Siberia, in Mexico, in South America, and in the United States.
Despite the large political and commercial control exercised by the British, the gold stocks of the British Empire have been much smaller than those of the United States and in 1916 were surpassed by those of France.
The lands under French control produce little gold, the output in 1913 being only 1.4 per cent. of the world’s total production. Less than 0.5 per cent. came from France itself and the remainder was obtained from French Guiana and Madagascar. French capital has not stopped at national boundaries, however, and has been invested in many of the principal fields, as is shown by the fact that commercial control amounted to 5.6 per cent. of the 1917 production. In Mexico at least 10 per cent. of the capital controlling gold mines is French, and the amount is steadily increasing. In South America--particularly in Colombia, and Dutch and French Guiana--some of the large companies are French, but most of the gold controlled commercially by the French comes from the Transvaal. It has been estimated that French interests control about 10 per cent. of the production of South Africa since German control has been eliminated. The gold reserve of France was large before the war and ranked second to that of the United States in 1916. It is now (1920) reduced to very small proportions.
Although Russia, with Siberia, is one of the most promising potential sources of the future gold supply and produced 5.8 per cent. of the total in 1913, Russian capital seemingly controls only a small part of the gold production of the world. The British are most active in Siberia, and French interests are known to have acquired property there. So far as is known, Russian capitalists control no gold deposits in foreign countries. In 1916 the gold reserve in Russian banks, treasuries, and in circulation amounted to $1,058,000,000, but it is not known what has become of this stock since the Bolshevists have been in control. At present the total is probably much smaller.
Japan controls only a small part of the gold output of the world, either politically or commercially. Some gold is obtained from Japan and Formosa, all of which is probably under Japanese financial control. The output of Korea, claimed by the Japanese as a part of their empire since 1910 and at present attempting to secure its independence, is controlled by Americans and other nationalities. The smaller mines are owned by Japanese, but the larger concessions were granted to foreigners by the old Korean government prior to 1910. Gold stocks of Japan were estimated at $143,128,000 in 1916. By December 26, 1918, they had increased to $225,820,000. In addition Japanese had on deposit in London, New York, and Paris a total of about $550,000,000.
The gold production controlled, either politically or commercially, by Germany and the countries of the former empire of Austria-Hungary is relatively insignificant, amounting in both cases to less than 1 per cent. Germany has produced annually in its European territory a little over $100,000, and its only colony yielding an appreciable amount was German East Africa, lost during the war. The mines of Austria-Hungary have been important in the past, but they are now very old and in 1913 produced only 0.5 per cent. of the world’s total production. It is understood that one of the largest operating companies in Transylvania before the war was British.
SUMMARY
The principal and most essential uses of gold are as a measure of value and a medium of exchange. Gold is also used in dentistry, and in the arts for jewelry, gilding, and other forms of ornamentation. In an emergency other materials can be substituted for the latter uses, but any considerable substitution for the principal uses would involve radical changes in our monetary and financial system.
Gold is found in rocks of all geological ages from Archean to Quaternary, and also in minute quantities in ocean water. Only the more concentrated deposits can be worked profitably. It is believed that the production from the present main deposits has reached its zenith, but further important discoveries will probably be made in the Arctic regions, in the tropics, or in other regions hitherto unexplored by man. Siberia, South America, and perhaps China are the most promising regions, as the more settled lands have been already thoroughly prospected.
Gold is widely distributed geographically. It is found in all parts of the world and commercially important mines are worked in every continent. Over 75 per cent. of the total annual output of the world comes from four countries, the Transvaal, the United States, Australia, and Russia. Other important producers are Rhodesia, Mexico, Canada, India, West Africa, and New Zealand. Little gold is produced in Europe or in South America. The deposits of the former continent, at one time important, are becoming exhausted. With improved transportation facilities and with further exploration work, the production of South America is expected to increase materially.
Great Britain controls politically over 60 per cent. of the annual gold production of the world, through state sovereignty over South Africa, Australasia, Rhodesia, Canada, and India. The United States ranks second, controlling about 20 per cent. Russia controls about 6 per cent. and Mexico 4 per cent. The remaining 10 per cent. is controlled by many countries, among them being Japan, France, Belgium, and the Central Powers.
The extent of British political and commercial control is almost identical, British interests controlling over 60 per cent. of the production and owning in addition to the mines in the empire, property in Siberia, South and Central America, Mexico, and the United States. United States interests control financially about 23 per cent. of the world’s production. The Korean deposits are predominantly American owned. United States capital is also invested in Canada, Mexico, Central and South America, and recently in the Transvaal. Although the gold controlled politically by France is of little importance, French interests control commercially about 5.6 per cent. of the total annual production, owning mines in the Transvaal, in Mexico, and in Central and South America.
Before the war, German interests had extensive holdings in South Africa and Australia.