i:!-,:-;.'!^'!' BfUanffiffil , :: fKKMKURHIl : UWTOIIHH 61FT GIFT OF : SOME GREAT COMMODITIES SOME GREAT COMMODITIES By Edith M./JMiller Robert M. Mclsaac Louis C. Taylor Beatrice Bulla Anna M. Michener Esther G. Tomkins Of the Statistical Division National Bank of Commerce in New York GARDEN CITY NEW YORK DOUBLEDAY, PAGE & COMPANY 1923 Add 1 / COPYRIGHT, 1922, BY DOUBLEDAY, PAGE & COMPANY ALL RIGHTS RESERVED, INCLUDING THAT OF TRANSLATION INTO FOREIGN LANGUAGES, INCLUDING THE SCANDINAVIAN PRINTED IN THE UNITED STATES AT THE COUNTRY LIFE PRESS, GARDEN CITY, N. Y. NOTE This book presents studies of ten great commodities which occupy an important place in the economic life of the United States and in the international trade of the world. Originally appearing in Commerce Monthly, a journal of commerce and finance published by the National Bank of Commerce in New York, these studies occasioned so much interest that they have been made the subject of more elaborate investigations which are now presented here in permanent form. Consideration has been given to government reports and recognized trade sources in making the exhaustive studies upon which these articles are based. M185569 CONTENTS PAGE COAL i COTTON 38 IRON AND STEEL 63 LUMBER 90 PETROLEUM AND PRODUCTS no RUBBER 140 SILK , . 160 SUGAR 185 WHEAT 213 WOOL 234 SOME GREAT COMMODITIES SOME GREAT COMMODITIES COAL ADEQUATE coal supplies are of fundamental im- portance to every industrial country. The whole structure of modern production has been built on coal as a cheap source of power. In spite of the develop- ment in the use of water power and of petroleum and its products, the position of coal as the main source of in- dustrial power is unchallenged. Coal is widely distributed throughout the world and few countries are without at least a small supply. The resources of the various countries, however, differ widely in commercial value because of variations in the quality of the coal and in the degree of ease with which it can be mined and marketed. Fairly complete surveys of the coal resources of Europe and of the United States and Canada have been made, but as to the remainder of the world, knowledge of both the extent of the fields and the quality of the coal is imperfect. So gradual is the evolution of coal through all the stages from peat to graphite that it is difficult clearly to define its different grades. The United States Geological Sur- vey, however, divides coal into six classifications, namely, lignite, sub-bituminous, bituminous, semi-bituminous, semi-anthracite and anthracite. For all practical purposes this classification is simplified into three groups, anthra- 2 SOME GREAT COMMODITIES cite, bituminous and lignite. The chief use of anthracite is for domestic purposes, the smaller sizes being used for steam coal. The great bulk of the world's coal is bitumi- nous or "soft" coal. It is the chief steam coal; it is es- sential for coke manufacture and consequently for the production of iron and steel, and it is also used widely as a domestic fuel. Lignite is commonly known as brown coal, although all deposits are not of this color. It is heavy in moisture when taken from the mines, the amount of moisture generally ranging from 30 to 40 per cent., and in consequence is of low heating value. This extra weight and inferior heating value make it impracticable to ship lignite any great distance. When exposed to the weather lignite dries and falls to pieces rapidly, and it is more likely than other coals to ignite spontaneously. COAL RESOURCES OF THE WORLD The world's known coal resources aggregate about 7,260 billion gross tons. Of this, 69 per cent, is in North America, 17 percent, is in Asia, n per cent, in Europe and 2 per cent, in Oceania. Africa and South America contain relatively unimportant deposits. The latest available figures for the resources of the world by countries, which are shown below in Table A, were compiled on the initiative of the Twelfth International Geological Congress and were published in 1913. Although the data were undoubtedly for a year or two prior to that date, the ex- haustion of coal which occurs in two or three years is relatively so small that the estimates may be considered approximately correct as of 1913. Since 1913 further deposits have been found in western Canada, Russia, China and in other countries but reliable COAL 3 data as to their extent are not available. Explorations are being carried on in South America, Asia, Africa and Oceania, and such activities have been greatly stimulated by the high price of coal and the difficulty of obtaining it in recent years. While definite data are not yet available as to the results of this recent work, it is certain that many valuable coal areas are as yet unknown or their possibilities uncalculated. The war has occasioned some important changes in the political distribution of coal resources. From Germany, France has obtained the coal in Alsace-Lorraine and the Saar Basin the former unconditionally, the latter for a period of fifteen years with the possibility (subject to a plebiscite) of repurchase by Germany at the end of that period. The extensive coal field lying at the juncture of the former German, Austrian and Russian Empires has also been redistributed. Those parts lying within German and Russian Poland and Austrian Galicia have gone to Poland. The remainder of the Austrian portion now lies in Czechoslovakia. The ownership of the richest portion of the field, which lies in Upper Silesia, is divided between Germany and Poland, the bulk of the reserves being as- signed to the latter country. The Austrian Empire has also lost the deposits in Dalmatia, Bosnia and Herze- govina to Jugoslavia. The data shown in Table A indicate the aggregate re- sources possessed by the respective countries prior to the war. For those countries (Germany, Austria and Russia) the reserves of which have been seriously diminished in consequence of the war, resources are given in detail to facilitate an estimate of their changed position. Quan- tities are stated in millions of gross tons and no allowance TABLE A COAL RESOURCES OF THE WORLD Country Australasia Australia New Zealand Total Austria-Hungary Bohemia and Silesia ( l ) Galicia ( 2 ) Dalmatia, Bosnia and Herzegovina ( 3 ) Hungary Other districts Total... Total Anthracite Bituminous (millions of gross tons) Lignite Belgium Canada and Newfoundland , Chile China Colombia Dutch East Indies France Germany Soar ( 4 ) Upper Silesia ( 6 ) Westphalia (Ruhr} Other districts Total... India Indo-China Japan Netherlands Persia Peru Russia, European Dombrova ( 6 ) . . . Other districts.. . Total.. . Russia, Asiatic Spain Spitsbergen Union of South Africa. United Kingdom United States ( 7 ) Other countries Grand totalO 162,928 649 130,161 32,118 3,333 897 2,436 166,261 649 131,058 34,554 15,400 3,422 11,978 24,507 ... 24,507 ... 3,632 3,632 1,690 111 1,579 13,105 12,406 699 58,334 40,446 17,888 10,826 10,826 1,215,268 2,124 279,673 933,47i 3,000 3,000 979,864 381,345 597,928 591 26,574 26,574 1,290 236 1,054 17,305 3,219 12,480 1,606 16,287 16,287 163,365 163,365 210,193 210,193 26,825 13,655 13,170 416^70 403,500 13,170 77,753 75,192 2,561 19,686 19,686 7,844 61 7,oi7 766 4,333 315 4,018 . 1,829 1,829 2,007 689 1,318 2,485 2,485 56,672 37,005 18,035 1,632 59,157 37,005 20,520 1,632 171,132 64,991 106,141 8,629 1,609 6,265 755 8,612 8,612 55,313 11,476 43,837 186,540 11,178 175,362 3,756,277 16,686 1,918,310 1,821.281 4,462 270 1,984 2,208 7,258,966 486,312 3,834,976 2,937,678 iNow included in Czechoslovakia. *Now included in Poland. 'Now included in Jugo- slavia. *Now under French control. 5 Divided between Poland and Germany; about 86 per cent, of reserves estimated as assigned to Poland and 14 per cent, to Germany. Now included in Poland. 7 Revised on basis of latest estimates by U. S. Geological Survey of original coal resources of the United States, and grand total revised correspond- ingly. COAL 5 is made for waste in mining or for quantities of coal not easily minable. COAL RESOURCES OF THE UNITED STATES More than half of the total coal resources of the world, it will be observed from Table A, are located in the United States. The long lead as regards quantity which its coal deposits hold over those of other countries is best illus- trated by the fact that while they constitute 52 per cent, of world resources, Canadian deposits, which rank next in size, are only 17 per cent, of the world total. Reserves of the United States at the beginning of 1919 are estimated at 3,752,044 million tons. While of the total available supply nearly one-half is lignite, this unfavorable factor is offset by the wealth of bituminous coal, so essential to industrial development. Reserves of bituminous in the United States constitute slightly more than half of the world's total of this class. Reserves of anthracite in the United States, on the other hand, are smaller than those of China, European Russia or Indo-China. Considered from the standpoint of quantity only, the western part of the United States contains far greater coal reserves than the eastern section of the country. The United States Geological Survey divides the coal- bearing areas of the United States into six main provinces. The total coal deposits of the three western areas desig- nated as the Northern Great Plains, Rocky Mountain and Pacific Coast provinces, far exceed the amount of coal in the two eastern provinces. However, it is in the eastern and interior provinces, with their relatively limited sup- plies, that the real wealth of coal lies. With the exception of a very small amount, all of the anthracite is in the East, 6 SOME GREAT COMMODITIES and, what is far more important, the best steaming coal is confined to these two eastern provinces. It is these valuable coals which are being exhausted most rapidly. In the two eastern provinces the exhaus- tion of coal to the end of 1918 is estimated at approxi- mately 13,828 million tons compared with 1,457 million tons for all the rest of the country. Table B, based on the most recent estimates of the United States Geological Survey, shows the original coal resources of the United States and resources at the beginning of 1919. RESOURCES OF OTHER COUNTRIES While Canada ranks second in aggregate coal resources,, the bulk of its deposits consists of lignite, which is of secondary commercial importance. Even so, its bitumi- nous reserves rank fourth in extent. China possesses unsurpassed stores of anthracite, while its bituminous reserves are second only to those of the United States. Exploitation of Chinese resources, however, has as yet scarcely begun and they constitute the great reserves of the more distant future. Asiatic Russia likewise has ex- tensive but almost unknown deposits. In Australia are rich supplies capable of extensive development. The major coal resources of Europe are comprised in four great fields, the political control of which is divided among a number of powers. These coal fields are first, the fields in the British Isles; second, the Rhine Valley fields in- cluding the Ruhr Basin in Germany, the Saar Basin, formerly German and now under French control, the Namur fields in Belgium and the fields in the Nord and Pas de Calais Departments of France; third, the fields at the juncture of Germany, Poland and Czechoslovakia, COAL TABLE B ESTIMATED ORIGINAL COAL RESOURCES OF THE UNITED STATES; AND RESOURCES AT BEGINNING OF 1919 1 Province Eastern Penn. and the Atl. Coast and Appal, re- gions, inc. Ohio, W. Va., eastern Ky. and parts of Ala. and Tenn. . . 18,795 Interior Mich., 111., Ind., western Ky., Iowa, Kan., Okla., Mo., Ark. and southwest. . . 357 Gulf Mined only in Tex., but found as far north as Cairo, 111., and east to Ala Northern Great Plains From N. Dak. and Mont., south to New Mex., inc., the Denver and Raton Mesa re- gions Rocky Mountains Bighorn, Wind River, Ham's Fork, Green River, Uinta, southwest Utah and San Juan regions 448 Pacific Coast Coals in extreme western part of country, chief field being in Wash 7 Total.. 19,607 ORIGINAL COAL RESOURCES Anthracite Bituminous Lignite Total (in millions of gross tons) COAL RE- SOURCES AT BEGINNING OF 1919 492,810 ... 511,605 500,762 472,767 ... 473,124 470,139 20,616 20,616 20,596 40,672 1,115,154 1,155,826 1,155,452 909,952 637,808 1,548,208 1,547,265 10,213 47,730 57,950 57.830 1,926,414 1,821,308 3,767,329 3,752,044 es deposits of coal within 3,000 feet of surface except that in the Rocky Mountain 595 billion tons of bituminous coal from 3,000 to 6,000 feet below surface have luded. 8 SOME GREAT COMMODITIES the richest portion of which lies in Upper Silesia; and fourth, the Donetz Basin, bordering the Black Sea, in Russia. It is only in the industrial countries of western Europe, which collectively possess less than 10 per cent, of total world reserves, that full utilization of coal re- sources is yet being made. UTILIZATION OF COAL RESOURCES There is a striking divergence among various countries as regards their relative utilization of coal reserves. This is indicated in Table C, which compares resources with production in 1913, the latest year of normal production. The United Kingdom, the coal production of which ranks second only to that of the United States, and which in 1913 supplied nearly one-fourth of the world's total pro- duction, possesses less than three per cent, of the aggregate coal resources. Germany, with deposits amounting to only 6 per cent, of the world's resources, in 1913 supplied over one-fifth of the total output of coal. Among Asiatic TABLE C UTILIZATION OF COAL RESOURCES PRODUCTION IN 1913 RESOURCES Country Millions Per cent. Millions Per cent, of tons of total of tons of total United States.. 509 38.6 3,756,277 51.8 United Kingdom 287 21.7 186,540 2.6 Germany 273 20.7 416,670 5.7 Austria-Hungary 53 4.0 58,334 .8 France 40 3.0, 17,305 .2 Russia (European) 33 2.5 230,289 3.2 Belgium 22 1.7 10,826 .1 Japan 21 1.6 7,844 .1 India 16 1.2 77,753 1.1 t China 14 1.1 979,864 13.5 Canada... 13 1.0 1,215,268 16.8 Australia 12 .9 162,928 2.2 Other countries 2.0 139,068 1.9 Total.. 1,320 100 7,258,966 100 COAL 9 countries, Japan possesses the smallest resources and pro- duces the most coal. Canada and China, on the other hand, with 17 per cent, and 14 per cent, respectively of the world's resources, each supplied but i per cent, of the total coal output. COAL PRODUCTION OF THE WORLD The steady and rapid expansion of world coal output prior to the war is a close index of the remarkable develop- ment of modern industrial activity. A half century ago, production aggregated 211 million gross tons; by 1900 it had increased to 755 million tons, and by 1913, to 1,321 million tons. While the annual increase in output varied considerably, it had been growing consistently and for some years prior to 1913 averaged more than 50 million tons per year. This expansion of world production was ended by the war. Since 1913 not only has the yearly increase been lost but there has been a positive decline in coal production. Estimated world production in 1920, a year of intense demand, was 25 million tons less than the output of 1913. The difference between the actual output of 1920 and the potential output had the pre-war rate of increase continued, amounts to nearly 400 million tons. This huge disparity is a graphic indication of the tremendous industrial disorganization wrought by the war, which reduced the world's capacity not only to produce coal but to consume it. Beyond such impairment, however, practically all in- dustrial countries were suffering from a shortage of coal below actual physical requirements, and this shortage by 1920 was reaching an acute stage when the abrupt reaction of commerce and industry further reduced coal consump- TABLE D WORLD PRODUCTION OF COAL* (INCLUDING Country 1913 1914 1915 North America Canada Coal i 10,253 Lignite 1,592 Total 13,404 12,176 11,845 Mexico 877 689 591* United States 508,890 458,502 474,658 South America Brazil 15 30* 59 Chile 1,263 1,070 1,153 Peru 270 279 286 Europe Austria Coal 16,200 15,301 75,529 Lignite 26,946 23,208 21,669 Total 43,146 38,509 37,495 Belgium 22,481 16,450 13,954 Bulgaria 352 415 525 Czechoslovakia Coal Lignite... Total France* 40,199 27,093 19,224 Germany* Coal 187,107 158,836 144,548 Lignite 55,855 52,372 85,559 Total 272,962 241,208 231,107 Greece 20 39 Hungary Coal 1,299 1,098 1,080 Lignite 5,5/3 7,932 8,035 Total 10,112 9,030 9,115 Italy Coal 11 9 Lignite 685 755 924 Total 687 767 933 Jugoslavia 306 197* 197* Netherlands Coal 1,843 1,898 2,226 Lignite Total 1,843 1,898 2,226 Poland s Portugal 25 29 39 Rumania 237 268 304 Russia (European) 33,280 32,665 30,167 Spain Coal 3,952 4,068 4,290 Lignite 273 257 323 Total 4,225 4,355 4,613 Spitzbergen 34 39 28 Sweden 358 361 406 Switzerland . . . . 39* United Kingdom 287,431 265,665 253,209 Asia British India 16,208 16,464 17,104 China 13,561 9,126 17,716 Chosen 126 180 225 Federated Malay States 12 Indo-China 423 610 634 Japan 21,397 22,402 20,673 Russia (Asiatic) 2,128 2,415 2,212 Turkey 829 651 489 Africa Rhodesia 243 349 410 Union of South Africa 8,801 8,478 8,281 Oceania Australia 12,418 12,445 11,415 British Borneo 98 99 115 Dutch East Indies 559 612 609 New Zealand 1,886 2,204 2,209 Estimated World Production 1,321,000 1,188,000 1,175,000 *In thousands of gross tons. iNot reported separately. * Estimated. Not available. Included in production for Austria and Hungary. Production in territory now included in Czechoslovakia was, in 1913, coal 14,046,000, lignite 22,653,000, total 36,699,000 tons. 5 Beginning with 1920, production of Saar district has been included with that of France. Saar output in 1920 was 9,261,000 tons and in 1921, 9,669,000 tons. IO LIGNITE) BY PRINCIPAL COUNTRIES, 1913 TO 1921 1916 1,265,000 1917 1918 1919 1920 1,329,000 1,312,000 1,150,000 1,296,000 Saar production excluded in 1920 and 1921. 7 Less than 1,000 tons. 8 Included with German, Austrian and Russian production 1921 10.904 10,056 10,492 9,602 11,626 10,468 2,028 2,486 2,881 2,613 3,224 2,873 12,932 12,542 13,373 12,215 14,850 13,341 492* 492* 424 683 526,871 581,606 605,543 494,598 576,745 441,515 98* 98* 98* 8 1,396 1,515 1,493 1,314 1,044 i 302 340 326 325 355 i 17324 16,465 14,084 89 131 135 22,833 21,284 17,825 1,975 2,371 2,360 40,157 37,749 31,909 2,064 2,502 2,495 16,597 14,696 13,672 18,191 22,035 21,463 630 749 662 568 745 738 4 4 9,710 10,967 11,464 4 4 4 16,811 19,629 20,718 4 4 4 26,521 30,596 32,182 20,974 28,459 25,844 22,087 34,162 38,187 156,656 165,098 155,755 114,864 129,273 133,641 92,693 249,349 94,034 259,132 99,010 254,765 92,167 207,031 109,871 239,144 121,068 254,709 115 155 1572 180 180 132 i 1,202 i i i i 7,490 i i i i 8,858* 8,692 7,874 3,840 4,885 5,948 18 45 32 109 149 110 1,263 1,631 2,084 1,111 1,547 1,003 1,281 1,676 2,116 1,220 1,696 1,113 197 10 1971 10 248> 2,458 3,173 3 2,614 2,960 3,346 3,484 4,050 4,102 42 1,459 1,852 1,374 120 2,614 3,002 4,805 5,336 5,424 4,222 8 8 8 6,164 6,555 6,995* 49* 59* 89* 144 166 i 295* 2952 2958 1,516 1,481 i 31,003* 27,951* 14,451 6,361 6,065 9,695 4,771 4,962 6,409 5,614 5,535 4,932 466 628 715 531 544 402 5,237 5,590 7,124 6,145 5,879 5,334 20 39 59 87 118 a 408 436 398 422 433 i 59* 89* 144 64 73 11 256,377 248,501 227,749 229,780 229,533 164,355 17,254 18,213 20,722 22,628 17,083 16,928 21,357 21,653* 21,653* 18,003 19,177 t 188 192 185 220 i 102 155 169 191 248 i 674 644 626 655 689 23,194 26,826 28,664 32,187 30,333 24,113 1,968* 1,968* 1,984 1,807 1,513 2,346 239 362 349 474 689 492 549 448 455 517 513 10,008 10,383 8,819 9,166 10,244 10,169 9,814 10,237 10,949 10,567 12,968 12,867 109 98* 98 s 9 i 737 819 820 934 1,078 2,257 2,068 2,034 1,848 1,844 i 1,100,000 1913 output of territory Silesia assigned to Poland in the autumn of 1921. "Serbia only; total production in territory now included in Jugoslavia was, in 1913, 3,551,000 tons. now Polish (not including Upper Silesia) was 9,022,000 tons. Not including that part of Upper Siles II 12 SOME GREAT COMMODITIES tion and converted the shortage into a surplus. As a result of world-wide industrial depression, the production of coal suffered still further curtailment. The output of 1921 is estimated at no more than 1,100 million tons, the smallest production of any year since 1909. The situa- tion is indicated by Table D, which contains production data as far as available for the leading coal-producing coun- tries for the period from 1913 to 1921. The countries listed in Table D, it may be noted, fall into two groups, as respects the influence of the war on coal output. One group is comprised of those countries in which the war, by destruction of mines, drains on man power and general economic disorganization, forced a serious curtailment of production. It includes the Euro- pean belligerents (with the exception of Italy) and such non-European countries as Canada and Australia. Of this group Belgium and Canada were the only important producers which had by 1920 succeeded in restoring their coal production to the pre-war level. The other group comprises countries in which the scar- city and high price of coal stimulated an expansion of out- put, in some cases at least beyond the point of profitable operation under more normal conditions. In this group are the European neutrals, Italy, and the majority of non- European producing countries, such as Japan, China, India, South Africa and the United States. As a net re- sult, the European production for 1920 the second year after the war and a period of urgent demand for coal was approximately 125 million tons below the 1913 output. The production of the rest of the world for 1920 exceeded its pre-war output by about 100 million tons; a net reduc- tion in production of 25 million tons. COAL 13 Three countries, it will be noted from Table D, hold a strikingly dominant position in coal production. These are the United States, with over 44 per cent, of world output in 1920, the United Kingdom, with 18 per cent, and Germany with 19 per cent, of the aggregate. The next country in rank is France, which produces less than 3 per cent, of the world's total. COAL PRODUCTION IN THE UNITED STATES The United States, with its unrivaled coal resources and tremendous industrial demand, assumed first place among coal-producing nations about the beginning of the twentieth century. Since then, its output has more than doubled. The mining of the two kinds of coal produced in the United States, anthracite and bituminous, constitutes two fairly distinct industries. Production of anthracite, which comprises, on the average, only 15 per cent, of the total output, is practically confined to a region in eastern Penn- sylvania having an extent of about 480 square miles. Mining is largely centralized in the hands of a few pro- ducers, and production has become fairly stable, fluctuat- ing between 79 million and 89 million tons in the period since 1913. The market for anthracite is also relatively stable. About 55 per cent, of the output is normally used for domestic consumption, 22 per cent, is employed in industry and the heating of large buildings, 7 per cent, is taken by railroads, 5 per cent, is exported and the bal- ance is consumed at the mines. Consumption of anthra- cite is centered in the northeastern part of the country. Aside from anthracite consumed by railroads, two-thirds of the output is used in the Middle Atlantic States; New England receives 15 per cent., the North Central States 14 SOME GREAT COMMODITIES 15 per cent., while the South and West take only 3 per cent. The limited extent of anthracite reserves and the increasing depths to which workings must be carried re- strict output and prevent its becoming a more important factor in the coal situation. Bituminous coal constitutes the bulk of the American output. It is mined commercially in thirty-one states; most of it, however, is produced within a comparatively limited area in the eastern part of the country. Over 65 per cent, of the total 1920 output was mined in the Appalachian region, extending from Pennsylvania to Alabama, a result in part of the quality and abundance of the coal, and in part of the concentrated industrial demand of the northeastern section of the United States. Table E indicates the current output of those states which in I92O 1 produced one or more per cent, of the total bitu- minous output. It also affords a comparison of their TABLE E PRODUCTION OF BITUMINOUS COAL BY STATES State 1909-13 1920 1921 (5 yr.-aver.) (in thousands of gross tons) Pennsylvania 137,267 150,074 100,000 West Virginia 55,616 79,867 63,571 Illinois 48,569 79,135 60,268 Ohio 29,221 40,208 28,571 Indiana 14,264 25,974 16,964 Alabama 14,038 14,411 10,893 Kentucky 13,478 31,722 26,786 Colorado 9,475 10,959 8,152 Iowa 6,756 6,942 4,464 Wyoming 6,327 8,592 6,652 Virginia 6,214 10,039 6,964 Tennessee 5,945 5,880 3,929 Kansas 5,763 5,213 3,214 Utah 2,423 5,362 3,571 Other states 25,249 28,739 19,394 Total 380,605 503,117 363,393 ^Comparisons are made on the basis of 1920 figures, because that year was one of active demand for coal, while 1921 was a year of serious depression. COAL 15 current output with pre-war average production. Penn- sylvania, it will be noted, is by far the leading producer, but its output is not now increasing at a rapid rate, the 1920 output being only 9 per cent, above its pre-war aver- age. Illinois' production in 1920 was no less than 63 per cent, in excess of its pre-war average. Among other im- portant producing states, Indiana increased its output 82 per cent., Ohio 38 per cent., and West Virginia 44 per cent., while Kentucky's 1920 production was 135 per cent, greater than its pre-war average. DOMESTIC COAL TRADE OF THE UNITED STATES Detailed information as to coal consumption in the United States is not currently available. The United States Fuel Administration, however, compiled informa- tion covering the several classes of consumption for the year 1917, and these data, presented in Table F, may be taken as indicating approximately the normal distribution of coal to different groups of consumers. The predomi- nance of industrial and railroad requirements is noteworthy; the export trade on the contrary is relatively insignificant. TABLE F CONSUMPTION OF COAL IN THE UNITED STATES BY CLASSES Consumption Claco of ,,e in 1917 Per ce nt. Class of use (in thouganda of total of gross tons) Industrial plants 155,900 32 Railroads 137,200 28 Coke, beehive and byproduct 74,800 15 Domestic consumers 51,000 10 Gas and electric public utilities 32,700 7 Exports 20,400 4 Power and heat at coal mines 10,800 2 Bunker, foreign 6,000 1 Bunker, domestic, including Great Lakes 3,200 1 Total... 492,000 "lOO 1 6 SOME GREAT COMMODITIES The distribution of bituminous coal from the different fields to various markets in the United States is highly complex. It is determined in part by the character of the coal and its suitability for particular requirements, and in very large part by the competitive position of other fields and by freight rates. The latter, because of the bulk of coal in proportion to its value, are of decided im- portance in influencing its markets. Much of the coal in the interior field is of inferior quality, and the competi- tion of better-grade Appalachian coals confines it to local markets where it has a considerable advantage in cost of transportation. In the west the coal of the Rocky Mountain fields supplies local needs and in good part the requirements of the Pacific States also. In the southwest coal faces the competition of oil, which for many purposes is the dominant fuel. The Appalachian fields extend from Pennsylvania to Alabama. Coal produced in the southern part of these fields, including Alabama, Georgia, Tennessee and south- eastern Kentucky, is largely consumed by railroads serving the region and by the iron and steel industries centering about Birmingham. Certain of the coals of southeastern Kentucky, however, enjoy a wide market by reason of their quality, and are shipped in good volume north of the Ohio and to lake ports and west of the Mississippi. Coals from the middle and northern portions of the Appalachian fields are predominant from the point of view of both quantity and quality. These coals furnish the bulk of coke produced, afford power for the concentrated industrial activities of the northern and eastern part of the country, move in large volume to the interior of the United States, constitute the bulk of shipments to Canada COAL 17 and provide most of the ocean-borne exports from the country. Rapid as has been the increase in consumption of coal in the United States, the area under exploitation and the mechanical equipment available the productive capac- ity of the mines have far outrun the growth of demand. The maximum actual production of bituminous coal was 518 million tons in 1918. The physical capacity of the mines has been estimated at from 600 million to 800 mil- lion gross tons per annum. This overdevelopment occa- sions a serious wastage of the capital and labor engaged in the industry. The average loss of time in the last thirty years has approximated 30 per cent., and even in 1918, the year of maximum activity, over 20 per cent, of the full working time was lost. In some measure this situation is due to daily fluctua- tions in output which, particularly at times of active de- mand, are occasioned by car-shortage. In good part it is due to the decided seasonal fluctuation, as between sum- mer and winter, in the demand for coal, and to the im- practicability of storing it at the mines in any sufficient quantity. The resulting fluctuations in the production of coal are shown in Table G. The average monthly out- put for the period 19131920 is used as a basis, from which are computed the percentages which the average output by months constitutes of this base. Beyond variations due to these causes, coal production is highly sensitive to changes in demand which are occa- sioned by the cycles of business activity and depression. The bulk of coal is sold on contract, and the concentration of a growing demand on the relatively limited volume of "free" coal often produces a substantial and sometimes a 1 8 SOME GREAT COMMODITIES spectacular rise in spot prices. This instability in price is in good measure the cause of the overdevelopment of American mining capacity. The reserves of coal, and the ownership of reserves, are so extensive that a period of comparatively high prices encourages the development of many new mines. After increased production or slack- ened demand has caused a lowering of prices, there are TABLE G SEASONAL FLUCTUATIONS IN COAL PRODUCTION IN THE UNITED STATES Quantity Per cent, (in thousands of of gross tons) base Base = Average Monthly Production 1913-20. . . . 37,129 100 Average Production 1913-20 for January 38,686 104 February 33,919 91 March 37,405 101 April 31,180 84 May 34,550 93 June 35,787 96 July 37,479 101 August 39,562 107 September 39,773 107 October 42,621 115 November 36,609 99 December 37,974 102 strong incentives to continue operations in order that carrying charges on the investment already made may be earned. Similarly, many concerns which for speculative purposes or to anticipate competition have acquired ex- tensive holdings of coal land, are compelled to develop the properties and open mines in order to meet charges on the investment. The result of these factors is an increase of idleness in times of slack demand, and a dilution of car- supply and consequent enforced idleness when demand is active, that constitute a serious loss to the industry and to the country as a whole. COAL 19 The course of coal prices in the United States for the period since 1913 is shown in Table H. Prices are quoted for anthracite stove coal, of importance as a domestic fuel, and for bituminous, Pittsburgh mine run, as represen- tative of industrial fuel. TABLE H WHOLESALE PRICES OF COAL IN THE UNITED STATES, BY QUARTERS, 1913 TO 1921 1 Bituminous Pittsburgh District Anthracite Stove v run of mine, f . o. b. mine f. o. b. mine January April July October January April July October (in dollars per net ton) (in dollars per gross ton) 1913 ... 1 30 1.30 1 35 1.40 4.00 3.50 3 80 4.00 1914 1 30 1.30 1 30 1.30 4.00 3.50 3 80 4.00 1915 1 15 1 05 1 00 1 05 4.00 3 50 ? 80 4 00 1916 1 ?5 1.05 1 30 3 25 4.10 3 60 4 ?0 4 40 1917 . . 4 ?5 3.25 3 00 2.00 4.40 3.90 4 ?0 4 70 1918 .. 2 45 2.45 2 35 2.35 5.05 4.75 4 75 5 05 1919 .. . ... 2 35 2.25 2 ?5 2.35 6.10 6.10 6 40 6 60 1920 2 35 4.25 10 00 9.00 6.60 6.60 7 65 8.00 1921 ... 2 75 2.75 2 50 2.25 8.00 7.40 7 90 8.50 1 Prices are for available dates nearest 15th of months specified. THE INTERNATIONAL COAL TRADE The number of countries which produce a net surplus of coal above their domestic requirements, which may be used to meet the fuel needs of less favoured nations, is extremely small. In the Western Hemisphere, the United States alone has a surplus of coal for export; and this, while it is large in comparison with the surpluses of most other nations, is of small proportions when compared with the tremendous domestic consumption of coal. The total output of South American countries in 1913 was less than 1,600,000 tons or about one-sixth of their consumption. In Asia, Japan normally has a surplus of approximately three million tons which is exported to Shanghai, Hong- kong, the Philippines and Singapore. China's output is 20 SOME GREAT COMMODITIES no more than sufficient to meet its own requirements. The bulk of Indian production is required by the railroads and growing industries of the country. Indo-China pro- duces approximately 650,000 tons of anthracite of which more than half is exported. Australia normally produces a surplus. New Zealand on the contrary has to import coal from the former coun- try. Australian coal is extensively used in bunkering in the Pacific, and is also shipped to the Dutch East Indies, Singapore, Colombo, the west coast of South America and in small amounts even to the west coast of the United States. The South African mines support a growing ex- port trade and some of their coals which are of good steam- ing quality are in demand for bunkerage at South African and Indian ports. In Europe, Great Britain and Germany are the only countries which are in a position to export coal in quantity. Other countries must import. Great Britain and Ger- many are the dominating factors, the former in the ocean- borne trade, the latter in the land trade of Europe. BRITISH COAL TRADE Coal is Great Britain's most important natural resource, and has been utilized to make that nation the world's greatest exporter of coal, both in the form of coal for bun- kerage, and exports in the strict sense. Table I affords a comparison of the pre-war and post-war exports from Great Britain. It will be noted that British exports to all countries have been reduced, in many cases most substantially, and the total for 1921 amounted to only 36 million tons, against 85 million for the pre-war average. This is a consequence COAL 21 of the decline of British production, which in 1913 was 287 million gross tons and in 1920 only 230 million tons. In 1921, a prolonged miners' strike reduced the output for the first six months to 55 million tons, the output for the TABLE I EXPORTS OF COAL FROM THE UNITED KINGDOM Country Countries around the North Sea Belgium Denmark Germany Netherlands Norway Russia and Finland Sweden Remainder of Europe, and Egypt Egypt France Greece Italy Portugal Spain South America Argentina Brazil Chile Uruguay Countries not specified above . . . Total Bunker, vessels in foreign trade. . Grand total. . 1919 1920 1921 1909-13 (5-yr. aver.) (in thousands of gross tons) 1,707 2,848 8,999 2,162 2,069 4,008 4,094 2,873 10,647 604 9,183 1,024 2,190 3,129 1,604 690 895 6,795 65,521 19,565 85,086 47,271 38,772 35,587 144 671 618 1,743 1,040 1,804 13 818 402 239 1,788 1,331 801 694 221 93 139 1,592 1,372 1,233 1,675 985 1,018 16,205 11,691 6,396 139 98 249 4,641 2,905 3,383 544 301 436 806 290 1,021 639 274 887 189 158 242 7 7 23 185 117 222 4,787 3,877 3,690 35,250 24,932 24,661 12,021 13,840 10,926 year being 164 million tons. Despite this handicap and the general depression in the international coal trade, British exports to other countries in 1921 were approxi- mately equal to exports in the preceding year. Should the curtailment of British coal exports prove permanent it would have no small influence on the future of the country's foreign trade. Upon ability to export 22 SOME GREAT COMMODITIES coal depends Great Britain's ability in large measure to import the raw materials necessary for the carrying on of her great industrial life. British exports, other than coal, are chiefly in the form of light manufactured goods. To produce these goods and to support a dense industrial population, it is neces- sary to import bulky raw materials and foodstuffs. Coal is the export ballast that makes British import trade pos- sible. Its use in balancing incoming and outgoing car- goes is of great effect in reducing the cost of ocean transportation, for example, on such commodities as grain from Argentina and iron ore from Brazil. Conversely, the curtailment of the surplus of coal for export has been felt in inability to secure ore supplies from overseas when desired, because it was not possible to provide inward ore ships with outward freights of coal. The decrease in production has occurred in spite of an increase in the number of miners employed, and the de- cline in output per man is a matter of serious concern to the British public. Output of coal per man in Great Britain, which was practically stationary during the four years preceding the war, and actually increased during 1915, has sharply declined since 1916, although tending to improve in 1922. In this, British experience is in marked contrast with that in the United States, where, with occasional recessions, output per man has been in- creasing steadily for a considerable period. Table J com- pares the two countries in this respect for the period from 1910 to 1920. There has been wide divergence of opinion as to where responsibility for declining British production and low output per man rests. In part it is due to partial exhaus- COAL 23 tion of mines and increasing depths to which workings must be carried. Shortage of underground equipment and railway cars has been a factor. 'Serious labor difficul- ties have accounted for much of the curtailment. A con- TABLE J AVERAGE COAL OUTPUT PER MAN, GREAT BRITAIN AND UNITED STATES VAO _ Great Britain United States (in gross tons) 1910. . 252 618 1911 255 614 1912 239 660 1913 258 681 1914 234 601 1915 265 647 1916 256 731 1917 243 768 1918. 225 794 1919 193 713 1920 182 743 siderable factor is the relatively small use of machine mining in Great Britain. For the five years 1909-1913 machine-mined coal averaged but 7 per cent, of total Brit- ish production, as compared with 37 per cent, for the same period in the United States. Since then machine mining has increased somewhat, particularly in the Scottish mines where about one-quarter of the coal is now machine- mined. In the Welsh coal fields, however, only 2 per cent, of the output is reported as machine mined. The slow progress of machine production in Great Britain is a result partly of hostility on the part of miners, who fear that its adoption would cause a dearth of work for many men now employed at the mines. In part it is a result of the fact that many British mines are physically ill-suited to machine methods. It may be questioned whether, in the pre-war period, 24 SOME GREAT COMMODITIES Great Britain had not reached the zenith of its position as a coal-exporting nation. Production was increasing only slowly in the period from 1907 to 1912 it fluctuated within the narrow range of 260 million to 272 million tons. Domestic requirements were growing and will in the future absorb a larger proportion of output, with the normal development of British industry. During the years 1907 to 1912 exports of coal were practically constant at from 62 million to 65 million tons. While in 1913 exports were substantially larger, the increase represented an abnormal rather than a normal development. As the coal require- ments of other nations expand, therefore, it is probable that they will have to be met from other sources, and that the future position of the United Kingdom in the interna- tional coal trade will gradually become relatively less dom- inant than it has been in the past. THE GERMAN POSITION Prior to the war Germany dominated the land coal trade of Europe. Its production had been growing steadily and with great rapidity, having more than tripled in the period from 1890 to 1913. Of the total 1913 output of 273 million tons, 187 million tons were bituminous coal and 86 million tons were lignite, much of which must be briquetted before it can be used. Lignite plays an unim- portant part in Germany's foreign coal trade but forms an increasingly important element in domestic consump- tion, a development which was hastened by Germany's isolation during the war. The volume and direction of pre-war exports of German coal and coke are indicated in Table K. Austria was the principal market for raw coal, while the Netherlands, COAL 25 Belgium, France, Switzerland and Russia also took sub- stantial quantities, ranking in the order named. The iron works of French Lorraine were by far the most important foreign takers of German coke. Austria, Belgium and Russian Poland also received considerable amounts. TABLE K AVERAGE ANNUAL EXPORTS OF COAL AND COKE OF DOMESTIC PRODUCTION FROM GERMANY, 1909 TO 1913 r . Coal Coke (in thousands of gross tons) Austria-Hungary. . 10,128 867 Belgium 4,685 539 Denmark 170 42 France 2,617 1,878 Italy 550 136 Netherlands 5,933 239 Norway 24 36 Russia and Finland 1,338 358 Sweden 70 138 Switzerland 1,414 150 Other countries 530 422 Total 27,459 4,805 Bunker, foreign vessels 247 1 Grand total 27,706 4,806 While in 1913 Germany exported more than 44 million gross tons of coal or its equivalent in coke and briquettes, it imported somewhat more than 18 million tons. This interchange is an illustration of the influence of freight rates on coal distribution, irrespective of political boun- daries. The greater part of the import consisted of Brit- ish coal marketed in the Baltic provinces, where, by reason of lower transportation costs, it could be sold more cheaply than coal from the Ruhr fields in Germany. Germany's position with respect to coal for the period from 1913 to 1920 is summarized in Table L. It will be noted that the practical elimination of imports during the war years was more than counterbalanced by a reduction of 26 SOME GREAT COMMODITIES exports from 44,202,000 tons in 1913 to 13,828,000 in 1918. Even so, there was some curtailment in domestic supplies of coal which was, however, in a measure offset by the growth in output of lignite, from 85,855,000 tons in 1913 to 99,010,000 tons in 1918. The further curtailment of domestic consumption of bituminous coal in 1919 and 1920 reflected in part the decreased output of those years, as well as compulsory reparations deliveries of coal to the allied nations. Year TABLE L GERMAN COAL SITUATION, 1913 TO 1920 Bituminous Coal Production Imports Exports* (in thousands of gross tons) 1913 187,107 1914 158,836 1915 144,548 1916 156,656 1917 165,098 1918 155,755 1919 114,864 1920 129,273 11,145 6,846 2,616 1,381 575 141 48 328 44,202 33,424 22,373 20,615 18,658 13,828 8,431 22,265 154,050 132,258 124,791 137,422 147,015 142,068 106,481 107,336 Lignite production* 85,855 82,372 86,559 92,693 94,034 99,010 92,167 109,871 ^Including reparations deliveries in 1919 and 1920. ^Consumed almost entirely in Germany. The Peace has affected the German coal position pro- foundly, as regards both production and domestic require- ments. Major territorial changes from the point of view of the coal situation were the cession to France of Alsace- Lorraine permanently and of the Saar mine fields for a period of fifteen years. Upper Silesia, the status of which was not determined until the latter part of 1921, has been divided between Germany and Poland, the latter receiving the bulk of the coal reserves. The effect of territorial changes on the German coal position is summarized in Table M, which compares the pre-war production and COAL 27 consumption of territories now German, as well as of the districts which are now separated from Germany. TABLE M COMPARISON OF GERMAN PRODUCTION AND CONSUMPTION OF COAL 1 IN 1913, BY DISTRICTS Production Consumption District in 1913 in 1913 (in millions of gross tons) Territory remaining definitely German 126 114 Upper Silesia Region allotted to Germany 11 Region allotted to Poland 32 Total 43 14 Alsace-Lorraine 6 11 Saar Basin 12 6 Other ceded territory 5 Luxemburg 3 4 Total "l8 ~26 Grand total 187 154 iNot including lignite, the bulk of which is produced and consumed in territory still German. J Not available. 'Formerly included in the German Customs Union. It will be observed that apart from Upper Silesia the territory definitely ceded by Germany consumed consider- ably more coal than it produced a result very largely of the heavy requirements of the iron and steel industries in Alsace-Lorraine. The situation with respect to Upper Silesia is different. That region produced a very sub- stantial volume above its local requirements, the loss of which may seriously curtail Germany's ability to export coal. Beyond such territorial changes, the treaty of peace made elaborate provisions for deliveries of coal 1 to allied countries. By its terms Germany undertook to deliver *Data respecting Treaty requirements are given in metric tons, which may, however, be taken as the practical equivalent of the gross ton, used elsewhere throughout the article. 28 SOME GREAT COMMODITIES to France 7,000,000 tons of coal per year for ten years, and in addition, for a period not exceeding ten years, an amount of coal equal to the difference between the annual pre-war production of the mines in the devastated regions of France and the production of those mines during each year of the ten-year period. Such delivery was not to exceed 20,000,000 tons per year in any one of the first five years, and 8,000,000 tons in any year of the succeeding five years. In addition, Germany agreed to deliver to Belgium 8,000,000 tons of coal per year for ten years, and to Italy an annual amount beginning at 4,500,000 tons for the year ending June, 1920, and gradually increasing to 8,500,000 tons per year for each of the six years 1923 to 1929. Germany further undertook to deliver annually to Luxemburg, if so directed by the Reparation Commis- sion, an amount of coal equal to the pre-war annual con- sumption of German coal in Luxemburg. Germany found it impossible to meet the payments called for by the treaty, her total deliveries from August, 1919, to the end of May, 1920, aggregating only 5,100,000 tons. This unsatisfactory situation led to the Spa con- ference, which resulted in the temporary suspension of treaty requirements. Germany in return agreed to place at the disposal of the allies for six months from August I, 1920, coal at the rate of 2,000,000 tons per month of which France was to receive 1,500,000 tons, Belgium 215,000 tons, Italy 200,000 tons and Luxemburg 35,000 tons. These deliveries have been made by Germany, total de- liveries in 1920 approximating 17 million tons of coal or its equivalent in coke. Since the termination of the period covered by the Spa agreement, the quantities to be de- livered have been fixed periodically by the Reparation COAL 29 Commission, the monthly quotas in the latter half of 1921 averaging about 1,700,000 tons and at the beginning of 1922, about 1,900,000 tons. Wholly apart from the reduction in output caused by the loss of territory, there was a marked falling off in coal production, occasioned largely by disorganization incident to the war and the revolution. Output of the Ruhr dis- trict, by far the major German producing region, dropped from 113 million tons in 1913 to 70 million tons in 1919, rising to 90 million in 1921. Upper Silesian output dropped from 43 million tons in 1913 to less than 26 million in 1919, and totaled 29 million in 1921. For all regions now German, and including Upper Silesia, output in 1913 was approximately 170 million tons; in 1919, 106 million tons and in 1921, 134 million tons. Lignite production made a steady growth from 86 million tons in 1913 to 121 million tons in 1921. While the reduced coal output has occasioned severe coal shortages in Germany and accounts for the difficulty had in making deliveries called for by the treaty, the gradual restoration of German out- put will place Germany in a fairly satisfactory position. Deliveries to the allied nations are essentially of the nature of exports. The loss of a considerable proportion of the Silesian output is a serious handicap, but it will not en- danger Germany's industrial future, since much of the Silesian output is consumed in the Silesian and Polish iron and steel industries, while Germany's iron and steel industry is dependent on and is located in close proximity to the Ruhr coal fields in the western part of the country. Of the new countries of Europe, Poland and Czecho- slovakia alone possess important coal reserves. Poland 30 SOME GREAT COMMODITIES has benefited substantially by the Upper Silesian parti- tion, and in the future, with the restoration of normal out- put from Polish and Silesian mines, it may become a considerable exporter of coal. Prior to the war, the nor- mal output of mines in territory now Polish (exclusive of Upper Silesia) was about 9,000,000 gross tons, while con- sumption approximated 19,000,000 gross tons, the balance being met by imports, chiefly from Upper Silesia. The pre-war output of the section of Upper Silesia allotted to Poland was over 32,000,000 tons. Under normal con- ditions of output, therefore, Poland should have available a total supply of 41,000,000 tons against total domestic requirements of about 30,000,000 tons. The acquisition of Silesian mines, moreover, assures the Polish iron and steel industry a supply of coking coal not available from domestic mines. The territory now included in Czechoslovakia had a pre-war output of about 37 million tons of which 14 millions were coal and 23 millions were lignite. Its output of coal was below domestic requirements, while it was an exporter of lignite. Its 1921 output was 32 million tons, of which 21 millions were lignite. COAL IMPORTING COUNTRIES OF EUROPE Average pre-war consumption of coal in France, the major importing country of Europe, was estimated at about 61,000,000 gross tons, production being about 40,000,000 tons. The remaining 21,000,000 tons were imported, principally from Great Britain. In 1913 France's actual imports were 18,416,000 tons, of which 11,079,000 were from Great Britain, 3,611,000 from Bel- gium, and 3,436,000 from Germany. COAL 31 The largest coal mines of France are located in the Valenciennes Basin, in the Departments of Nord and Pas de Calais. About these mines, which had a pre-war output of more than one-half of the total French produc- tion, was centered the iron and steel industry of France. These mines were destroyed during the war and it is estimated that their restoration to their former level of production will hardly be effected before 1926. Their output in 1913 was 18,367,000 tons; in 1919, 1,516,000 tons and in 1921, 5,280,000 tons. While, by the terms of the Peace Treaty, France has received Alsace-Lorraine and the Saar, with a combined production for 1913 of more than 17,000,000 tons, the consumption of these districts almost equaled that figure. Saar output, moreover, de- clined from 12,030,000 tons in 1913 to 8,839,000 tons in 1919 and 9,669,000 tons in 1921. These various factors have substantially increased the relative volume of coal in comparison with total require- ments which France must import. Exclusive of receipts from the Saar, total French imports of coal for 1920 were approximately 22 million gross tons, of which 12 million came from Great Britain, 5 million from Germany and 3 million from the United States. In addition France imported 4 million tons of coke, the bulk of which came from Germany, and 2 million tons of fuel briquettes, from Germany, Belgium and Great Britain. In 1921, French imports included 16 million tons of coal, 3 million of coke, and one of briquettes; the bulk of imports coming from Germany, Great Britain and Belgium, in the order named. Belgium, in 1913, consumed about 26 million tons of coal and produced 22 million tons. It is both an export- 32 SOME GREAT COMMODITIES ing and an importing country, shipping coal to France, Italy and Luxemburg, and importing it from Germany and, to a less extent, from Great Britain. For 1920, its imports totaled 2,244,000 tons while its exports aggre- gated 2,166,000 tons, including coke in equivalent terms of coal. In 1921, imports totaled 6,238,000 tons and ex- ports 7,788,000 tons. The Netherlands' pre-war production was about one- fifth of its requirements of approximately 10 million tons, the balance of which was supplied by Germany and the United Kingdom. The difficulty experienced in getting coal during the war led to the development of domestic resources by which production was raised from two million tons in 1913 to four million in 1920. Substantial quantities of coal were also imported from the United States in meeting the shortage. For 1920 total imports of coal (including coke in terms of coal) aggregated 3,417,000 tons, and for 1921, 5,317,000 tons. The Scandinavian countries, aside from approximately 400,000 tons produced in Sweden, rely on outside sources for their coal. Normally the bulk of it is gotten from Great Britain in return for iron ore and timber. The Scandinavian countries have also been importers of Amer- ican coal in meeting the abnormal shortage of recent years. Thus, in 1920, American coal constituted 44 per cent, of Swedish imports. The Mediterranean countries Spain, Italy, Greece, Egypt and Northern Africa normally de- pend on British coal but have become purchasers of Amer- ican coal during and since the war. Spain is the only one of the group which produces a substantial proportion cf its own requirements. COAL 33 THE UNITED STATES IN RELATION TO THE INTERNATIONAL COAL TRADE For the five years 1910-14, the average coal output of the United States, including anthracite, was 467,128,000 tons. For the five years ending June 30, 1914, the net ex- ports, including bunker coal, averaged less than 23,000,000 tons and of this amount, exports to Canada, which were not essentially different from the domestic trade, ac- counted for 13,500,000 tons. These figures indicate the relative unimportance of the pre-war coal exports of the United States as compared with its domestic coal trade. The development of the Ameri- can export trade during and since the war is summarized in Table N. From a pre-war average of 22,782,000 tons, exports including bunker coal gradually increased to 32,232,000 tons in 1917, then after falling off during 1918 and 1919, jumped to 47,450,000 tons in 1920, and declined to 31,248,000 tons in 1921. The bulk of the increase re- flected substantial takings by the countries of Europe TABLE N NET EXPORTS (TOTAL EXPORTS LESS IMPORTS) OF COAL FROM THE UNITED STATES, 1910 TO 1921 1 Bituminous Bunker, vessels Year Exports in foreign Anthracite Total trade (in thousands of gross tons) 1910-14 (5-yr. aver.).. 12,234 7,020 3,528 22,782 1915 15,245 7,471 3,537 26,253 1916 17,471 7,826 4,160 29,457 1917 19,997 6,883 5,352 32,232 1918 18,656 5,532 4,402 28,590 1919 17,057 7,343 4,369 28,769 1920 33,292 9,362 4,796 47,450 1921 19,532 7,548 4,168 31,248 Average relates to fiscal years ending June 30; other years are calendar years. Period from June 30, 1914, to January 1, 1915, omitted. 34 SOME GREAT COMMODITIES resulting from the disorganization of their normal sources of supply. Other countries, also, notably those in South America, increased their imports of American coal as British supplies were curtailed. The direction of exports from the United States, as well as the striking increase of the movement of American coal to European and other coal-importing countries in post- war years, is shown in detail in Table O. It may be noted that, substantial as was the increase in the volume of exports in 1920 as compared with the pre-war period, ex- ports still constituted a relatively small proportion of the total American production. At the same time, when foreign demand is concentrated principally on the rela- tively small volume of "free" (as contrasted with con- tract) coal, as was the case in 1920, it may occasion a rise in prices, and so have an influence on the entire do- mestic situation out of all proportion to its quantitative importance. In view of the over-development of American mining capacity, outlined in the discussion of the American domestic coal trade, the question arises as to the future position of the United States in the international coal trade, and the possible utilization of surplus capacity in putting coal into foreign markets. It is generally recognized that the bulk of the increase in American exports during recent years is f an emergency character, representing purchases in the United States because coal could not be had elsewhere. There are a number of factors which make it difficult to put American coal into European markets permanently. Only the best smokeless coals of the Appalachian region meet export requirements. These coals must be trans- COAL 35 TABLE O EXPORTS OF COAL FROM THE UNITED STATES BY COUNTRIES, 1910 TO 1921 1 1910-14 1918 1919 1920 1921 (5 yr. aver.) (in thousands of gross tons) Bituminous: Countries around the North Sea Denmark 89 967 153 Netherlands 1 17 722 2 147 Norway 1 160 736 42 Sweden 253 1,247 67 Remainder of Europe, and Egypt Eevot 58 38 627 476 France . . 50 7 523 3646 608 Greece . ... 3 48 231 96 Italy. 357 10 1,633 2388 1 549 Portugal 2 5 45 164 100 Spain 23 19 66 58 Switzerland 529 812 9 South America Argentina 78 179 483 1 718 7^3 Brazil 185 559 634 965 527 Chile 58 300 94 494 151 Uruguay 21 229 195 268 88 North America Canada 10,002 16,191 10,669 14483 11961 Cuba 1,051 1,440 971 1333 525 Mexico 469 163 102 203 172 Countries not specified above . 1394 853 752 1620 2QfiO Total 13750 19956 17959 34390 206^3 Bunker, vessels in foreign trade. . 7.020 5.532 7.343 9.362 7.548 Total bituminous 20,770 25,488 25,302 43,752 28,201 Anthracite: Canada 3,470 4,379 4,345 4,436 4,035 Other countries 63 57 98 389 141 Total anthracite 3,533 4,436 4,443 4,825 4,176 Grand total 24,303 29,924 29,745 48,577 32,377 Average relates to fiscal years ending June 30; other years are calendar years. Less than 1,000 tons. 36 SOME GREAT COMMODITIES ported by rail for 200 miles or more before they reach tidewater. British export coals are within 15 miles of the sea. After reaching tidewater, American coals have to bear ocean transportation charges across the Atlantic, while the United Kingdom and Germany are adjacent to the principal European markets. Moreover, the bal- ance of ocean freights between America and Europe is decidedly against the United States. This country im- ports manufactured goods from Europe, and exports bulky raw materials, such as cotton and grain, and heavy iron and steel products. Great Britain, on the other hand, imports bulk commodities and utilizes coal as outward ballast. The same in less degree is true of Germany. These factors made it impracticable to market American coal in Europe in substantial quantities prior to the war, and they will become increasingly effective as normal conditions of coal production are restored in Europe. The situation is somewhat different with respect to Central and South American countries. There, the physical balance of freights is more favorable to the United States. The same is true of the distance which the coal must be shipped, particularly as respects the countries in the Caribbean and on the west coast of South America. Prior to the war the bulk of American sea- borne coal exports went to the Caribbean region, and this trade did not differ essentially from the local coastwise shipments in the domestic coal trade. While the United States is in a position to compete for the South American coal trade on a permanent basis, that trade cannot comprise any considerable volume. The tropical climate of much of the country, its small popula- COAL 37 tion, and the limited extent of industrial development make the present South American requirements small. The conclusion seems inevitable that, apart from the provision of fuel to Canada, the foreign coal trade of the United States will not become of great importance. The United States is too far distant from the great coal- consuming markets. Probably its exports to Europe will continue permanently on a level considerably above the pre-war figure; nevertheless, they can hardly form more than a very small proportion either of Europe's require- ments or of American production. This is, on the whole, highly desirable. It is not eco- nomical to move so bulky a commodity as coal to support industries at distant points. The tendency is strongly in the direction of locating the industry where power is readily available. In Europe coal shortage has hastened and will continue to stimulate the development of water power. The industrial development of the United States has by no means reached its completion, and available resources are not at all excessive in comparison with future requirements. For this country, the export of coal in the shape of finished goods rather than in raw state constitutes the sounder industrial development. COTTON THE cotton trade is essentially international. Raw cotton forms the chief item both of American ex- ports and British imports. Before the war, also, it was the principal article imported into Germany and Japan and was among the leading imports into France, Belgium, and other important industrial countries. Cot- ton manufactures, moreover, regularly are the principal export from the United Kingdom and the chief import into India, China, Turkey, the Dutch East Indies and many other countries having little industrial develop- ment. In the years just before the war about 12,000,000 bales of raw cotton, or more than one-half of the total annual crop of 22,000,000 bales, were exported from the cotton- growing countries, thus enabling the countries of western Europe, Canada and Japan, although they did not grow any appreciable amount of cotton, to count cotton manu- facturing among their chief manufacturing industries. In addition, out of a total world production of 36,000,000,000 yards the annual exports of cotton piece goods were 10,000,000,000 yards, while large quantities of yarn, thread, wearing apparel and other cotton manufactures also passed into international trade. Exports of raw cotton were greatly curtailed after the war by unsettled conditions in Europe. Nevertheless, over 6,600,000 bales of raw cotton were exported from the 38 COTTON 39 United States in 1921. This amount compares, how- ever, with an annual average of nearly 9,000,000 bales in the period from 1909 to 1913. The United Kingdom has long played a leading part in the world's cotton trade. Obtaining the raw material chiefly from the American surplus, the British manufac- ture cotton goods to an amount second only to the Amer- ican output, and consume so little that before the war the United Kingdom exported 6,700,000,000 yards of piece goods as compared with only 400,000,000 yards exported by the United States, its nearest competitor. Imports of raw cotton into the United Kingdom in 1921 amounted to 2,300,000 bales, of which 1,600,000 came from the United States, whereas in the five years from 1909 to 1913 the imports averaged 4,500,000 bales a year, of which 3,400,000 were bought from the United States. Though India and Egypt, the second and third largest cotton producers, are both British possessions, they to- gether supplied only a little over a fifth of the needs of the United Kingdom both before the war and in 1921. The British, therefore, to assure themselves of adequate supplies, have been trying diligently to develop cotton- producing areas elsewhere among their possessions as well as to increase the yield and improve the quality of the crops in the regions already growing cotton within the Empire. Cotton has been known to western Europe since Alex- ander the Great introduced it from India, but it did not become a leading textile manufacture there until about the middle of the eighteenth century. Prior to this the world relied upon the primitive methods copied from the Hindus and had, in fact, imported much of its cloth from 40 SOME GREAT COMMODITIES India. After the invention of the fly-shuttle and the spinning-jenny cotton rapidly replaced wool as the chief English textile. Cotton had been discovered growing in the West Indies and on the mainland of America by Columbus and his followers, and the British turned to the New World rather than to the Old for their supplies. It has been estimated that near the close of the eighteenth century the West Indies furnished about 70 per cent, of the British supply, the Mediterranean countries 20 per cent., and Brazil 8 per cent. The quantity contributed by the United States and India was less than I per cent, and Egypt furnished none. PRINCIPAL PRODUCING COUNTRIES Cotton production is limited to warm climates, where ample moisture is assured either by rainfall or irrigation, but where there is little danger of excessive rain or early frosts. Average pre-war crops of the chief cotton-growing countries, according to the best estimates available, to- gether with estimates of the crops for each year from 1915 to 1921 are shown in Table A. Chinese production as indicated in the table refers to the amount of the spinning- mill consumption plus net exports, for although it is known that the crop greatly exceeds this amount there are no satisfactory data as to the total crop or the consumption of cotton in Chinese homes. The latest estimate of the Chinese Ministry of Agriculture was that in 1916 the crop amounted to 5,200,000 bales. Comparatively little of this cotton, however, became available to commerce. There has been a considerable falling off in cotton pro- duction in recent years, but although the world crop in 1921 was approximately 15,000,000 bales as compared COTTON 41 with 22,000,000 before the war, the decline was largely offset by the stocks of raw cotton that had accumulated during the war. In addition to the quantities shown in Table A the United States produced an average of 612,000 bales of linters from 1910 to 1914, and 441,000 bales in 1920, while in 1921 the output was 398,000. "Linters" is the term applied to the short fibers which adhere to the seed TABLE A COTTON PRODUCTION BY PRINCIPAL COUNTRIES Country 1910-14 1915 (5-yr. aver.) 1916 1917 1918 1919 1920 (in thousands of 500-lb. bales) 1921 United States . . . 14,259 11,192 11,450 11,302 12,041 11,421 13,440 7,954 British India 3,524 2,990 3,602 3,200 3,182 4,637 2,845 3,623 Egypt 1,513 989 1,049 1,304 999 1,155 1,251 684 Russia 1,023 1,465 1,065 578 550 420 80 50 Chinai 694 845 810 830 900 1,100 1,000 1,650 Brazil 346 250 309 400 524 536 430 560 Mexico 138 125 140 125 130 200 205 165 Persia 128 130 i 2 i t I t Turkey 119 100 s I a t t i Peru.. 104 93 108 110 114 165 150 146 Chosen 85 126 126 182 206 * i t Uganda 21 20 20 19 18 28 42 65 Other countries . . 144 204 304 199 201 432 328 310 Total 22,098 18,529 18,983 18,249 18,865 20,094 19,771 15,207 ^Commercial crop only. Not available. of the American upland and Indian varieties of cotton after it has been through the gins. These fibers are re- moved from the seed as a step preliminary to crushing the seed. They are of comparatively small value, being used chiefly for stuffing mattresses, horse collars, etc. During the war this cotton was in great demand also for the manu- facturing of guncotton. The growth of cotton as a cultivated crop in the United States is first reported as in Virginia in 1621 and in South Carolina and Georgia over a century later. The first exports to England were recorded in 1739 but until Eli 42 SOME GREAT COMMODITIES Whitney invented the cotton-gin in 1793 more was im- ported than exported. Production in the United States amounted to 3,138 bales of 500 pounds each in 1790, to 6,276 bales in 1792, to 10,460 in 1793, and to 16,736 in 1794. By 1835 it had grown to 1,000,000 bales; in 1879 it reached 5,000,000 bales; and in 1894, 10,000,000 bales. From about this time the American crop was hindered by the boll weevil which invaded the cotton belt from Mexico in 1890. Year by year this pest has extended its activities until now it has infested practically the entire belt and has done great damage to the crops. Nevertheless, the record crop of 16,135,000 bales was grown in 1914, when the weevil had infested nearly one-half of the cotton belt. Means for fighting the boll weevil have been developed, but they involve the use of more labor and materials than prior to the invasion. Cotton was the third most valuable American crop in 1921, having an estimated total value, including the value of the seed, of $783,000,000 and ranking only after corn and hay. Texas, with its large acreage and favorable climate, is the leading cotton state. In 1921 it was esti- mated to have produced 2,200,000 bales or over a quarter of the total crop. Mississippi with a production of 870,000 bales, Arkansas with an 86o,ooo-bale crop, Georgia with 840,000 bales, North Carolina with 800,000 bales, South Carolina with 760,000 bales, and Alabama with 635,000 bales were the other principal cotton-growing states. VARIETIES OF COTTON The relative quality of the various kinds of cotton grown in the different countries in 1920 is shown in Table B, COTTON 43 together with the approximate yield of each kind. The classification is based upon the length of staple, and ranges from Grade I, which has a staple of two inches or over, to Grade V, which has a staple of one inch or less. It TABLE B WORLD'S COTTON CROP IN 1920 ACCORDING TO GRADES Quality and grade I. Best Sea Island II. Best Egyptian (Sakel, etc.) American-Egyptian Sea Island III. Egyptian Peruvian Long Staple American IV. American Upland, etc. Length of staple Where grown (in inches) 2 and over West Indies Islands of South Carolina Total Egypt Arizona and California West Indies Florida and Georgia Total V. Indian, etc. iLess than 1,000 bales. Mississippi Delta, etc. British East, Central and South Africa Sudan Total United States Brazil India Mexico China and Chosen Turkey and Persia Russia British West Africa India China Russia Total Total Grand total Crops (in thousands of 500-lb. bales) 550 92 2 645 701 150 112 46 18 1,027 13,235 430 235 205 200 87 32 13 14,437 2,610 1,000 3,658 19,771 will be noted that the bulk of the world's cotton falls within Grade IV, which has a staple of from | of an inch to ij inches. Especial value is attached to long-staple cotton because 44 SOME GREAT COMMODITIES of its use in the manufacture of automobile tires, thread, and the higher grade fabrics. The best of this kind of cotton is that grown on the islands off Charleston, South Carolina, and also in the West Indies. Next come the Sea Island cotton grown in Florida and Georgia and the best Egyptian grades. As late as 1917 the United States produced 71,980 bales of Sea Island cotton. Unfortu- nately, as this cotton matures late, it is particularly vul- nerable to the attacks of the boll weevil. In 1918 this pest had so penetrated into the territory where Sea Island is grown that the crop was reduced to 40,900 bales. In 1919 it had fallen to 5,020 bales and in 1920 to 1,440 bales. A variety of long-staple upland cotton called Meade cotton closely resembles Sea Island but since it matures two or three weeks earlier it is not so liable to the ravages of the boll weevil. It was developed during 1912 and is reported as now established on a commercial basis. Another long-staple variety of cotton grown in the United States is the American-Egyptian cotton grown on irrigated land in Arizona and southern California. In 1912 the seed of this cotton was distributed to a number of farmers by the United States Department of Agricul- ture. The crop amounted to 375 bales of 500 pounds each. By 1917 the crop had grown to 15,966 bales, in 1918 to 40,343 bales, in 1919 to 42,374 bales, and in 1920 to 91,965 bales, but in 1921 this crop was reduced to less than 40,000 bales. The bulk of the American long-staple cotton is of the upland variety and is grown chiefly in the Mississippi Delta, Arkansas, Texas, Oklahoma, and South Carolina. In 1920 the upland crop having a staple of over I J inches COTTON 45 amounted to 112,000 bales, while 1,112,000 bales had a staple of from i| to ij inches. Of the total cotton crop in the United States in 1920, however, 12,123,000 bales or 90 per cent, had a staple of less than ij inches. PRINCIPAL EXPORTING COUNTRIES Exports of cotton are naturally made chiefly by the lead- ing cotton-growing countries. Table C shows the net exports, that is, the total exports minus the total imports, of cotton from the principal exporting countries in the five years from 1909 to 1913, in 1919, 1920 and 1921. TABLE C NET EXPORTS OF COTTON FROM THE PRINCIPAL EXPORTING COUNTRIES ~ 1909-13 1919 1920 1921 "*ry (5 _ aver } (in thousands of 500-lb. bales) United States.. *8,622 26,365 2 5,734 26,322 British India 1,820 1,443 1,937 2,010 Egypt 1,382 1,329 793 949 China 188 222 * Persia 104 4 4 * Peru 83 175 * Brazil 79 54 109 86 Dutch East Indies 36 13 4 4 Uganda 15 24 38 65 Including linters. 2 Excluding linters. "Net imports of 81,000 bales reported. Not available. The United States, British India, China and Brazil have considerable textile industries of their own, but the other exporting countries, Egypt, Persia, Peru, the Dutch East Indies and Uganda manufacture little or no cotton goods. Although there has been a tendency in recent years for cotton to be increasingly manufactured in the 46 SOME GREAT COMMODITIES cotton-growing countries, the main reason for the decrease in the amounts exported was the falling off of buying by the European industrial countries which furnished the chief markets for raw cotton. Large stocks were left on hand in all the important producing countries. The importance of export trade to the American cotton market is shown by the fact that prior to the war 60 per cent, of the crop was exported, only 40 per cent, being used at home. The destination of the shipments of raw cotton from the United States is shown in Table D for the five years from 1910 to 1914 and for 1919, 1920 and 1921. TABLE D EXPORTS OF COTTON FROM THE UNITED STATES BY COUNTRIES I Country 1920 '1910-14 1919 (5-yr. aver.) (in 500-lb. bales) "1921 United Kingdom . . . . 3,509,424 3,238,178 2,607,793 1,698,337 Germany . . . . 2,514,949 155,829 752,143 1,566,651 France .... 1,086,620 796,338 668,921 668,457 Italy 500,776 561,700 565,703 557,652 Japan 296,575 881,041 671,869 1,121,224 Spain 269,864 252,152 290,055 279,203 Belgium 183,783 163,789 201,811 193,766 Canada 153,418 166,811 220,658 176,721 Austria-Hungary 96,401 97,219 4 19,217 4 3,598 Russia 87,577 310 . Sweden 36,285 86,198 88,111 46,707 Netherlands 24,356 210,522 88,916 95,288 Mexico 21,202 692 47,940 27,598 Portugal 14,180 24,957 13,635 26,601 China 13,369 11,628 11,379 154,571 Other countries 30,825 87,992 110,476 61,852 Total 8,839,604 6,735,356 6,358,627 6,678,227 figures are for all domestic raw cotton exported, including linters. 'Fiscal years ending June 30. ^Calendar year. including exports to Austria, Czechoslovakia, Jugoslavia, Albania and Fiume. Of the American exports before the war the United Kingdom took 40 per cent., Germany 28 per cent., France 12 per cent., Italy 6 per cent., Japan 3 per cent, and the COTTON 47 remaining countries n per cent. Because of decreased purchases by the three leading customers the annual ex- ports since the war have been over 2,000,000 bales less than the average before the war. In 1921 the distribution was: the United Kingdom 25 per cent., Germany 23 per cent., France 10 per cent., Italy 8 per cent., Japan 17 per cent, and other countries 17 per cent. Except for the United Kingdom, Germany and France, the cotton ex- ports to most countries have been greater since than be- fore the war, the increase in exports to Japan and China in 1921 being especially noteworthy. India, the second largest grower of cotton, exported 56 per cent, of its crop before the war, 41 per cent, in the year beginning April i, 1919, 58 per cent, in 1920 and 66 per cent, in 1921. Forty-two per cent, of the average pre-war exports went to Japan, 69 per cent, in the fiscal year 1919-20, 45 per cent, in the fiscal year 1920-21 and 59 per cent, in the year beginning April I, 1921. The rest of the exports were sent principally to European countries, none of which took a very large amount. Germany, the second best customer in the years from 1910 to 1914, bought an average of only 280,012 bales. Exports to the chief European countries buying Indian cotton were considerably below the pre-war averages in 1921-22, but exports to Japan and China showed remarkable gains. Table E shows the exports of cotton from India in the five fiscal years 1909 to 1913 and in the fiscal years 1919, 1920 and 1921, by countries of destination. About three- fourths of the shipments were from Bombay. The quantities of cotton exported by Egypt in the five seasons from 1909-10 to 1913-14 and in the seasons 4 8 SOME GREAT COMMODITIES TABLE E EXPORTS OF COTTON FROM BRITISH INDIA BY FISCAL YEARS BEGINNING APRIL 1 Country Taoan 1909-13 (5-yr. aver.) 890678 1919 (in 500-lb. 1 325 852 1920 bales) 751 211 1921 1 408 212 Germany 280,012 38886 161096 187 793 Belgium 221,329 109,948 194 333 158 641 Italy 185 679 124 154 170 312 123 514 Austria-Hungary 134 162 7047 27319 26 781 United Kingdom 99885 119231 76805 28627 France 95,953 45754 30,764 45347 Spain 31,671 34,644 61,264 24 134 China 24,126 72,182 153,427 348 356 United States . 6568 14 197 7504 7343 Netherlands 4713 12096 9453 4292 Other countries 32,032 14,927 16,733 28,393 Total.. 1,925.808 1,918,918 1 .660.221 2.391.433 1918-19, 1919-20 and 1920-21 are shown by countries in Table F. The United Kingdom took 44 per cent, of the exports before the war, 47 per cent, in 191920 and 50 per cent, in 1920-21. Exports to the United States grew from 12 per cent, of the total in the pre-war period to 35 per cent, in 1919-20, but in 1920-21 declined to 12 per cent, again. This cotton is used in the United States to supplement the domestic supply of long staple. Its chief use is in the manufacture of automobile tires. As its cotton is of high grade Egypt, although a large purchaser of cotton goods, uses little of its own cotton. Practically all of it is exported, Alexandria being the port of shipment. Because of the falling off in this interna- tional demand, however, Egypt was able to export only a little over one-half of its 1920 crop in 1920-21. The business depression thus brought about emphasized the necessity of having more than one crop to rely on. Con- sequently, while the British Empire Cotton Growing Com- COTTON 49 mittee is making every effort to increase the supply of cotton grown within the Empire, Egyptian government regulations have been issued restricting the three crops from 1921 to 1923 so that no more than a third of the area of each holding may be planted with cotton. It was estimated that this restriction of acreage would reduce the crop by about a quarter. That the 1921 crop was 45 per cent, less than in 1920 was due to decreased use of fertilizer, activities of the pink boll worm, and other ad- verse conditions, as well as to reduced acreage. TABLE F EXPORTS OF COTTON FROM EGYPT BY SEASONS ENDING AUGUST 31 Country United Kingdom 1910-14 (5-yr. aver.) 605,958 1919 (500-lb. 691,500 1920 bales) 520,201 1921 335,831 United States 160,854 143,274 385,859 77,050 Austria , 151,340 1 9,779 France , 133,905 118,044 75,334 62,141 Russia 108,402 Italy. . 87,499 74,189 78,375 32,655 Spain 29,904 15,696 13,242 22065 Netherlands. 28,932 15 2,769 1,178 Japan 27,400 33,329 21,441 28,104 Germany 26,755 8,834 41,142 Other countries 10,990 ' 4,290 3,682 59,959 Total.. 1.371.939 1.080.337 1.109.737 669.904 ^Including 4,294 bales to Czechoslovakia. UNITED KINGDOM LEADING IMPORTER Table G shows the net imports of cotton, that is, the total imports minus the total exports, into the principal importing countries before the war and in 1919, 1920 and 1921 . The United Kingdom was by far the leading importer until 1921. Germany ranked second in the pre-war period, with Japan third, France fourth and Italy fifth. In 1921 50 SOME GREAT COMMODITIES Japan was the leading importer. This change from the pre-war position was due to a decrease of 49 per cent, in the net imports into the United Kingdom as well as a gain of 72 per cent, in Japanese gross imports. TABLE G NET IMPORTS OF COTTON INTO THE PRINCIPAL IMPORTING COUNTRIES 1909-13 1919 1920 1921 Country (5-yr. aver.) (in thousands of 500-lb. bales) United Kingdom.. 3,981 3,674 3,295 2,043 Germany 1,812 611 1,370 Japan 1,333 2,068 2,028 2,295 France 1,074 885 892 781 Italy 856 788 788 696 Austria 854 1 3 325 "505 Russia 847 * * l Spain.. 365 325 355 372 Belgium 221 227 447 190 Canada 150 171 230 174 Netherlands 126 104 110 113 Switzerland 108 110 93 109 Sweden.... 88 71 104 56 Portugal 75 33 ! l Finland 35 28 29 32 Denmark 25 30 21 16 Norway.. 16 21 11 7 Poland l 1 101 152 *Not available. ''Gross imports. 'Including Austria and Czechoslovakia. Three-quarters of the cotton imported into the United Kingdom from 1909 to 1913 was bought from the United States. Egypt, British India, Brazil, Peru and British East Africa came next in the order named. Table H shows, by countries, the quantities of cotton imported into and reexport ed from the United Kingdom from 1909 to 1913 and in 1919, 1920 and 1921. The figures for 1920 and 1921 are not strictly comparable with those for previous years because of a change in classification so that in those COTTON 51 years linters and cotton waste were excluded from the cot- ton item. On the old basis the total imports for 1921 were 2,407,166 bales, while the net imports were 2,094,134 bales. TABLE H RAW COTTON TRADE OF THE UNITED KINGDOM Item and country 1909-13 (5-yr. aver). Imports United States 3,417,058 Egypt...., 799,633 British India Brazil Peru British East Africa.. British West Africa. British West Indies. Other countries . . 148,445 60,300 53,017 16,062 8,061 5,453 31,454 Total imports 4,539,483 Reexports Russia United States Belgium British India Germany Portugal Sweden France Other countries .... Total reexports 207,440 186,109 40,870 28,866 21,150 16,268 19,783 10,039 28,419 558,944 1919 U920 (in 500-lb. bales) 2,741,481 2,780,667 842,740 575,408 127,207 148,435 10,261 46,336 92,971 130,606 19,965 30,888 12,329 12,982 4,023 5,016 65,596 64,107 3,916,573 3,794,445 18,555 41,084 104,656 209,035 12,936 25,373 1,444 14,666 72,022 6,395 11,757 4,748 11,375 35,019 53,572 45,288 73,683 242,263 499,345 U921 1,602,005 2 462,583 3 30,130 32,692 69,422 14,250 4 44,315 16,144 10,065 6,359 141,340 301,895 Net imports 3,980,539 3,674,310 3,295,100 2,043,209 ^Exclusive of linters and waste. Exclusive of imports from Anglo-Egyptian Sudan. Including small shipments from Ceylon and elsewhere in British East Indies. Not reported separately; included in "Other countries." Germany, like the United Kingdom, took by far the larger part of its supply of raw cotton from the United States before the war. In the five-year period from 1909 to 1913 the imports from America were 77 per cent, of the total. British India was the next leading source, while 52 SOME GREAT COMMODITIES Egypt and China ranked third and fourth respectively. The average annual imports into Germany from 1909 to 1913 and the average reexports for the same period are shown by countries in Table I. Details for later years are lacking, but in 1920 total raw cotton imports amounted to 614,000 bales and reexports to 3,000 bales, and in 1921 imports were 1,433,000 bales and reexports 73,000 bales. TABLE I RAW COTTON TRADE OF GERMANY 1909-13 Item and country (5-yr. aver.) (in 500-lb. bales) Imports United States 1,550,285 British India 261,328 Egypt 172,144 China 11,170 Dutch East Indies 5,504 Turkey 4,301 Other countries 12,294 Total imports. 2,017,026 Reexports Austria-Hungary 95,744 Russia 51,810 Netherlands 16,451 Switzerland 12,574 Italy 8,248 Denmark 4,944 Other countries 15,088 Total reexports 204,859 Net imports 1,812,167 Table J, which gives the imports of raw cotton into Japan by countries of shipment for the years from 1909 to 1913 and for 1919, 1920, 1921, shows that although British India holds the chief place as a source for Japan's raw cotton, the cotton bought from the United States is of increasing importance. For the average of the pre-war years India furnished 60 per cent, of the total cotton im- ports and the United States 22 per cent. In 1921, how- COTTON 53 ever, 51 per cent, came from India while 40 per cent, was imported from America. Reexports of raw cotton have grown remarkably, but they still constitute only a small part of the total imports. TABLE J RAW COTTON TRADE OF JAPAN 1 Country British India . . 1909-13 (5-yr. aver.) 794,584 1919 945,180 *1920 (in 500-lb. bales] 1,109,761 '1921 \ 1,165,815 United States 290,419 823,798 866,007 922,273 China . . 194,014 261,937 53,831 148,278 Egvot 27,403 32,333 3 18,493 3 39,613 Chosen 4,859 23,012 4 4 Straits Settlements . Dutch East Indies.. French Indo-China. Other countries 5,574 4,580 11,583 2,174 6,416 2,808 1,608 2,657 3,815 1,066 764 4 9,581 7,637 1,242 9,005 *1,554 Total imports. . Reexports. 1,335,190 1,703 2,099,749 31,849 4 2,063,318 35,390 *2,295,417 6 Net imports . . . 1,333,487 2,067,900 2,027,928 1 Unginned cotton reduced to ginned at ratio of 3 pounds unginned to 1 pound ginned. 2 Ginned and unginned cotton not reported separately by countries. Country distribu- tion estimated on assumption that all cotton from the Straits Settlements and the Dutch East Indies, and part of that from French Indo-China was unginned. Reported as from "African countries." 'Figures for Chosen are not available for 1920 and 1921, and are not included in the item "Other countries" or in the total for those years. Not available. Despite its preeminent position as the leading producer and exporter of cotton the United States imports a certain amount of cotton for special purposes. Table K shows the imports by country of production for the years 1913, 1919, 1920 and 1921. Most of the cotton imported is Egyptian, which is used on account of the strength imparted by its long staple for mercerizing or for the manufacture of thread or auto- mobile tires. Because of the ecru shade of some varieties they are used for the manufacture, without dyeing, of 54 SOME GREAT COMMODITIES TABLE K TOTAL IMPORTS OF COTTON INTO THE UNITED STATES BY COUNTRIES OF PRODUCTION 1913 1921 Egypt .......................... 167,801 203,006 359,789 145,787 China .......................... 14,505 18,391 58,823 3,582 Peru ........................... 12,786 46,985 50,913 25,961 Mexico ......................... 7,132 61,780 76,169 78,429 British India .................... 5,241 9,949 14,088 3,817 Other countries ................. 2,495 10,606 40,207 20,321 Total ...................... 209,960 350,717 599,989 277,897 balbriggan underwear and lace curtains. Considerable quantities of Mexican cotton are imported, principally be- cause of its proximity. At a number of border points, especially in the Imperial Valley, Mexican seed cotton is brought into the United States for ginning. Chinese and Indian cottons are distinctly inferior to the American variety, but are brought in for use, to some ex- tent at least, for mixing with the higher priced domestic cotton. The Peruvian cotton imported is largely "Rough Peruvian," used principally for mixing with wool. WORLD CONSUMPTION OF COTTON Even before the war there was a growing tendency for the cotton-producing countries to manufacture their own cotton goods. To an ever-increasing extent the United States, India, China, and Brazil were becoming independent of the cotton-manufacturing industries of Europe, espe- cially with regard to the coarser kinds of goods. The war accelerated this movement while at the same time it en- abled the Japanese greatly to expand their market. Table L shows estimates of the world's cotton consump- tion by leading countries in the seasons from 1909-10 to 1920-21. Satisfactory consumption statistics for the COTTON 55 individual countries of continental Europe have been lack- ing since the outbreak of the war. The average consump- tion in Germany during the five pre-war years from 1909 to 1913 was 1,741,000 bales, in Russia 1,589,000 bales, in France 984,000, Italy 841,000, and in Austria-Hungary 796,000 bales. For later years the net imports shown in Table G give an indication of the quantities that were available for consumption. TABLE L COTTON CONSUMPTION BY PRINCIPAL COUNTRIES 1909-10 Country 1913-14 1914-15 1915-16 1916-17 1917-18 1918-19 1919-20 1920-21 (5-yr. aver.) (in thousands of 500-lb. bales) United States. . . United Kingdom. Continental Europe ....... 5,099 4,049 6,949 5,678 3,890 6,250 6,469 4,000 6,400 6,840 4,030 4,616 6,598 3,280 3,050 5,831 2,725 2,975 6,474 3,700 3,660 4,955 2,040 4,400 British India .... Japan 1,704 1 250 1,607 1 400 1,660 1 650 1,764 1,850 1,775 2,000 1,627 1,870 1,646 1,825 1.840 1,800 Canada 128 185 208 191 250 198 220 150 Other countries. . 847 1,000 900 1,180 1,035 1,000 1,200 1,250 Total 20,026 20,010 21,287 20,471 17,988 16,226 18,725 16,435 The importance of a nation's cotton-manufacturing in- dustry is not to be measured solely by the quantity of raw material consumed. Too much depends upon the quality of the raw material and of the products made from it. In order to show the machinery equipment of the more important cotton-manufacturing countries Table M presents the number of spindles by countries for the season just before the war, 191314, and for the season seven years before and after, 1906-07 and 1920-21. The total number of spindles increased only 5 per cent, between the seasons ending in 1914 and 1921 although during the preceding seven years the increase was 19 per SOME GREAT COMMODITIES TABLE M COTTON SPINDLES IN THE PRINCIPAL COUNTRIES Country 1906-07 United Kingdom 50,680 United States 26,375 Germany 9,339 France 6,800 Russia 6,500 British India v 5,280 Austria-Hungary 3,616 Italy 3,500 Spain 1,850 Switzerland, [apan Belgium Canada China Poland Other countries. 1,484 1,483 1,300 1,140 800 750 2 2,436 1913-14 (000 omitted) 56,300 32,107 11,550 7,410 9,160 6,500 4,970 4,620 2,210 1,380 2,750 1,250 1,530 965 1,000 2 2,695 1920-21 56,140 36,620 9,400 9,600 7,100 6,770 '4,720 4,500 1,800 1,530 4,130 1,520 1,550 1,370 1,800 1,160 3,300 Total 123,333 146,397 153,010 Including Austria 1,140,000 spindJes and Czechoslovakia, 3,580,000 spindles. Not available. cent. Since the British mills, in general, spin finer counts of yarns than American mills the quantity of cotton consumed per spindle is less. Thus while America con- sumes the most cotton Great Britain has the largest num- ber of spindles in the world. Operation day and night and the manufacture of the coarser kinds of goods enable Japan to consume large quantities of cotton with relatively little equipment. That country, however, is rapidly adding to its number of spindles. TREND OF COTTON PRICES Through 1913 and in the first part of 1914 cotton prices at New Orleans, the principal spot market, ranged between 12 and 14 cents a pound for middling cotton. The ex- change was closed upon the outbreak of the war, but when COTTON 57 trading was resumed a low point of 6J cents a pound was reached on October 24, 1914. This prevailed until the 28th when the price began its gradual climb to 41} cents, which was the quotation from April 16 to 19, 1920. The course of prices is traced in Table N, which shows the closing quotations for middling cotton at New Orleans by months from 1913 to 1921. Middling is the grade which forms the basis for cotton quotations. American cotton with the ordinary length of staple is rated above or below middling according to the amount of leaf, dirt, sand, motes and other extraneous matter it contains, to- gether with its color. A bright creamy color is most de- sired, but weather and soil conditions often cause cotton to become "off color," "tinged" or "stained," so that it is reduced in grade. The length of staple is considered apart from the grade, cotton that averages if inches or more in length of staple usually being called "staple" cotton or "long-staple" cotton. The great bulk of this cotton is grown in the Mississippi or Yazoo Delta which forms the western part of the State of Mississippi. TABLE N CLOSING QUOTATION FOR MIDDLING COTTON AT NEW ORLEANS ON THE AVAILABLE DATE NEAREST THE FIFTEENTH OF EACH MONTH FROM JANUARY, 1913, TO DECEMBER, 1921 Month 1913 1914 1915 1916 1917 1918 1919 192 1921 (in cents per pound) January 12.50 12.88 7.75 12.19 18.00 31.75 29.00 40.25 1500 February 12.56 13.00 8.06 11.56 17.19 30.38 26.75 39.25 13.25 March 12.50 13.00 8.44 11.88 17.63 32.50 27.50 41.00 10.75 April 12.50 13.13 9.37 11.88 19.81 33.00 26.75 41.50 1125 May 12.31 13.25 9.00 12.75 19.63 29.25 28.13 4025 ll'88 June 12.50 13.94 9.38 12.69 24.19 31.00 31.63 40>5 ll!25 July 12.44 13.31 8.50 13.00 25.88 30.00 34.25 39.00 11 88 August 12.00 i 9.00 14.00 25.75 29.50 30.88 3450 1213 September 13.00 1 10.25 15.13 20.19 33.50 29.00 28.50 19^50 October 13.25 6.75 12.00 16.81 27.13 30.75 35.00 20.25 19.00 November 13.31 7.75 11.44 19.50 28.00 29.38 39.50 18.25 1600 December 13.00 7.00 11.82 18.00 29.00 29.00 39.75 14.75 16.75 No quotation, exchange closed. 58 SOME GREAT COMMODITIES INTERNATIONAL TRADE IN COTTON PIECE GOODS The United Kingdom, the United States and Japan are the chief exporters of cotton piece goods. Before the war France, Italy, Germany and the Netherlands were like- wise large exporters, but excepting France these countries had not recovered their pre-war position by the end of 1921. British India and China are the leading importers, although the development of domestic cotton manufac- turing is lessening their import needs, especially with re- spect to the coarser kinds of goods, which form the bulk of their purchases and which can readily be made from the short-staple native cottons. The world's average annual production, consumption, exports and imports of cotton piece goods by leading countries, for the pre-war years from 1910 to 1913, as estimated by the Research Committee of the National Council of Cotton Manufac- turers, are shown in Table O. No later compilation is available, but it is probable that Great Britain, though still the largest exporter, no longer furnishes as much as two-thirds of the world's total ex- ports. American and especially Japanese exports have expanded greatly while British shipments have fallen off since 1913. Table P, giving the quantity of piece goods exported from the United Kingdom in 1913, 1919, 1920 and 1921, by countries of destination, shows the decline in total ex- ports in 1921, as compared with 1913, to have been about three-fifths. The decrease was especially heavy in the trade with India and China, which were usually Great Britain's best customers. So marked was the decline in exports to China in 1921 that Egypt replaced China as COTTON 59 TABLE O AVERAGE ANNUAL PRODUCTION, CONSUMPTION, EXPORTS AND IMPORTS OF COTTON PIECE GOODS FROM 1910 TO 1913 Country Production United States .... 1,900 United Kingdom .... 1,400 Russia .... 678 Germany 650 China 604 British India 530 France .... 353 Japan .... 342 Italy .... 312 Austria-Hungary .... 295 Brazil 125 Spain 125 Netherlands 97 Belgium 77 Mexico. 66 Canada 50 Turkey 25 Dutch East Indies 4 Argentina Other countries 184 Consumption Exports (in millions of pounds) Total 7,817 1,812 304 657 579 819 998 263 287 227 271 150 115 31 75 74 74 140 94 66 781 7,817 99 1,120 30 88 22 94 70 92 27 12 73 12 1 is 1,755 Imports 11 24 9 17 215 490 4 15 7 3 25 2 10 8 24 116 90 66 612 1J55 the second leading buyer. Exports to the United States and Morocco, on the other hand, showed increases over 1913. TABLE P EXPORTS OF COTTON PIECE GOODS FROM THE UNITED KINGDOM Country 1913 1919 1920 1921 (in millions of yards 1 ) British India 3,057 768 1,374 1,092 China, including Hongkong 717 304 453 211 Turkey 361 333 263 56 Dutch East Indies 305 124 209 159 Egypt, including Anglo-Egyptian Sudan 267 185 297 220 Argentina 199 108 162 103 Australia 168 75 138 115 British West Africa 145 115 135 55 Straits Settlements 132 51 101 42 Morocco 60 57 43 65 United States 44 41 102 55 Other countries 1,620 1,363 1,158 730 Total , 7,075 3^24 4,435 2,903 for 1920 and 1921 are in millions of square yards. 60 SOME GREAT COMMODITIES In the year beginning April i, 1913, British India im- ported 3 , 1 59,000,000 yards of piece goods besides fents. Of this amount the United Kingdom supplied 97 per cent. Imports from the United States and Japan together made up less than I per cent, of the total. While important amounts were brought from the Netherlands, Italy, Switz- erland, Belgium, Germany and other European countries, America and Japan were destined to become, except for Great Britain, the principal sources of India's imports of cloth. Purchases from Japan grew from 9,000,000 yards in 1913-14 to 170,000,000 in 1920-21 and 90,000,000 in 1921-22. Imports from the United States showed no gain until 1921-22, when 21,000,000 yards were bought as contrasted with 10,000,000 yards in 1913-14. In 1921-22 the United Kingdom furnished 88 per cent, of the imports, Japan 8 per cent., and the United States 2 per cent. The imports of cotton piece goods into British India from the United Kingdom, the United States and Japan are shown in Table Q for the fiscal years 1913-14, 1919-20, 1920-21 and 1921-22. Total imports of fents, or rem- nants, which are not separated by countries in the later trade returns, are shown as a whole. TABLE Q IMPORTS OF COTTON PIECE GOODS INTO BRITISH INDIA BY FISCAL YEARS BEGINNING APRIL 1 _ 1913 1919 1920 1921 <"0untry ( in millions of yards) Total piece goods except fents United Kingdom 3,068 963 1,278 947 United States 10 6 9 21 japan. . 9 76 170 90 Other countries 72 19 34 Total. . .... 3,159 1,064 1,491 1,080 Fents _iZ _18 _10 Total piece goods 3,197 1,081 1,509 1,090 COTTON 6 i Japanese progress in the Indian market has been due, aside from cheap labor, largely to close cooperation be- tween the government, banks, shipping companies, mer- chants and manufacturers. The chief handicaps to Japanese expansion have been rising labor costs and lack of machinery and capital. India is Japan's second best customer for cotton goods, China ranking first in this re- spect. Indian mills furnish the principal competition which the British product encounters in India. They are becoming increasingly important in supplying the 'do- mestic demand as the quantity of their output improves. The piece goods turned out are mainly unbleached shirt- ings made from native cotton. Under war conditions the mills were able not only to compete more successfully in the domestic market, but to develop export markets in the Orient, on the Persian Gulf and the Red Sea, and in East Africa. Exports of cotton piece goods are not a particularly important part of the total export trade of the United States, as they constituted of late years less than 2 per cent, of the total value of exports. Though the second largest exporter, the United States exported in the years 1910 to 1913 less than one-eleventh of the British ship- ments. Home consumption was so large that only 5 per cent, of production was shipped abroad. Table R shows the exports of cotton piece goods from continental United States in 1913, 1919, 1920 and 1921. American strength in foreign markets for piece goods lies to a great extent in standardization of a narrow range of qualities, mostly unbleached cloths and prints, and the maintenance of a consistently good quality. These goods 62 SOME GREAT COMMODITIES can be made on automatic looms, of which there are some 400,000 in the United States, as compared with 15,000 in England. American manufacturers have specialized in quantity production and so far have left it to England to excel in furnishing large assortments of designs in rela- tively small quantities. TABLE R EXPORTS OF COTTON PIECE GOODS FROM THE UNITED STATES r U913 21919 21920 '1921 Country (in millions of yards) Philippine Islands. . 93 47 63 54 China 80 38 28 25 Aden 25 9 6 15 Canada 27 64 66 43 Mexico 3 28 20 49 Central America 33 55 57 71 Porto Rico 33 37 56 38 Cuba.., 22 67 161 23 Haiti 20 30 22 21 Dominican Republic 13 13 5 British West Indies 10 26 23 28 Argentina 2 32 46 25 Chile 10 19 19 21 Colombia 26 46 83 14 Venezuela 4 17 36 2 Other countries 86 197 161 165 Total 7. 487 "725 881 ~599 ^Fiscal year ending June 30. Calendar year. IRON AND STEEL IRON is the most abundant of the heavy metals, as well as the one most essential to civilization. The basis of modern industry is steel. Superior iron products and steel were made in medieval times, and the use of the metal dates back to the beginning of recorded his- tory, but the achievement of the nineteenth century was the development of processes which made possible the conversion in a large way of ore to iron and of iron to steel. Individual skill and hand labor are now largely superseded by chemistry and mechanical power. WORLD'S SUPPLY OF IRON ORE Metallic iron is usually found in combination with other substances, rarely in the native or pure state. The com- mercial value of iron ore for smelting depends primarily on the percentage of metal content. Ore containing as high as 72 per cent, of metal is known to exist, and ores which yield as much as 60 per cent, of iron are of a highly desirable grade. Such ores are, however, not plentiful, and by far the greater proportion of the world's supply contains a lower percentage of iron. The average metal content of ores mined in the United States at present is slightly over 50 per cent. The minimum for commercial use is now about 25 per cent, iron content. Quality may l\e of as much significance as metal content. Ore with a high percentage of iron is in some cases rendered too 63 64 SOME GREAT COMMODITIES costly to smelt by the presence of a small quantity of titanium, while in other ores a low iron content may be compensated by admixture of materials that render the ore self-fluxing. Methods for utilizing the abundant low- grade ores of the United States, which under present conditions do not pay to smelt, are under consideration. Only the roughest approximation can be made of the world's iron ore resources. Even in North America ex- plorations are by no means complete. According to figures presented before the International Geological Con- gress at Stockholm in 1910, the actual world reserves of workable ore conforming to the present standard of iron content were more than 10,000,000,000 tons of metallic iron content. Deposits of inferior and less accessible ores were placed at between 50,000,000,000 and 60,000,000,000 tons of metallic iron, and it was further estimated that unexplored regions would bring the entire world possession of actual and potential ore reserves up to 424,000,000,000 tons of metallic iron. These figures were based on detailed explorations in the United States and the greater part of Europe and Japan, partial explorations in certain other regions, and on estimates for the rest of the world. More recently the available resources of Europe and the Ameri- cas combined were estimated as 14,310,000,000 tons of metallic iron, this total including some low-grade ores. Limited areas are now being worked in northern and south- ern Africa, India, Australia, Japan, China, Chosen, the Philippines and other regions, and it is considered probable that extensive reserves, as yet undiscovered, exist in the continents of Asia, Africa and Australia, but too little is known to estimate their total ore content. On the basis of explorations up to the present time, the IRON AND STEEL 65 six important ore centers of the world are the Lake Supe- rior region, Lorraine, northern Sweden, Cuba, Newfound- land and Brazil. The Lake Superior region ranks first in the world as an ore producer containing, according to estimates presented at the Stockholm Congress, 2,020,000,000 tons of metallic iron in readily available reserves and 36,000,000,000 tons in potential reserves. A more recent estimate places the available reserves at 1,430,000,000 tons of metallic iron. These ores are chiefly hematite with an iron content aver- aging above 50 per cent., but because of the increasing percentage of phosphorus a decreasing proportion of the ores is suitable for the acid Bessemer process. The minette ores of Lorraine, extending into Belgium and Luxemburg, are second in importance to those of the Lake Superior region. Minette ore furnishes most of the raw material for France's iron industry and formerly, when Germany owned half of it, was also the principal source of ore for the German iron industry. Its available reserves amount to 1,850,000,000 tons metallic iron content. Not only is the iron content of minette ore low, from 27 to 36 per cent., but its phosphorus content is high and con- sequently pig iron made from it must be smelted by one of the basic processes. The largest known ore supplies which contain 60 per cent, or more of iron are in Sweden. This ore comes from the magnetic deposits of Lapland, largely north of the Arctic Circle, which were estimated in 1910 at over 673,000,000 tons metallic iron. Fields in the southern part of the country furnish ore of the highest quality with a slightly lower percentage of iron. Swedish ores have a wide range of phosphorus content. Cuba contains actual reserves of about 1,000,000,000 66 SOME GREAT COMMODITIES tons metallic iron and probably 500,000,000 tons in poten- tial reserves. The ore is of high grade with phosphorus content low enough to be within the Bessemer limit, but the mines have as yet been little developed. Newfound- land has enormous submarine deposits in Conception Bay, with small outcroppings on Bell Island. It is good ore, easily reduced. The available reserves are estimated at 1,750,000,000 tons metallic iron content. The Brazilian ore fields form perhaps the most impor- tant undeveloped iron area of the world and rank among the six most important ore centers. Estimates made of these ore deposits vary from 3,500,000,000 tons of ore to as high as 7,500,000,000 tons. The ore is very rich, a great proportion containing iron oxide up to 97 per cent. The deposits have not been developed sufficiently to jus- tify an exact statement as to the total metallic iron con- tent but the State of Minas Geraes alone is believed to have in its ore fields more iron than that in all Europe. An obstacle to mining development is the inaccessibility of the deposits under present conditions of transportation. Most of the Brazilian ore will have to be exported for smelting unless adequate supplies of coking coal are dis- covered in the country or hydro-electric developments, which are already begun, provide sufficient cheap power. British and American capital have for some time controlled certain important holdings in Brazil, and German and Luxemburg interests are adding to their smaller properties there. Brazilian ore will be especially valuable to the British industry which requires an ore low in phosphorus. The United States has, besides the Lake Superior region, three other main ore regions. They are the Eastern re- gion, containing the so-called Clinton ores, the Mississippi IRON AND STEEL 67 Valley and the Cordilleran or mountain regions of the West. American ore containing 60 per cent, or more of iron is insignificant in amount and is rapidly disappearing. The supply of 50 per cent, ore is sufficient for many years to come, and there are very large reserves of 40 per cent, and lower grade ore. Allowing for pig iron production at the rate of 70,000,000 tons a year, it is estimated that the available ore resources of Europe and North and South America will last 200 years, but with even a low rate of increase in annual pig iron production, the duration of the supply as at present estimated would be much shortened. There seems no doubt, however, that exploration will reveal vast additions to the present known supply. Table A summarizes the actual reserves in the leading countries of ore which con- forms to present standards of iron content and which would be considered workable by practical metallurgists. The estimates are those prepared for the International Geolog- ical Congress in 1910, together with later estimates for European countries published by the United States Geological Survey. No potential reserves or estimates for imperfectly explored areas are included. Thus it will be noted that Brazil does not appear in the list of countries. The geographical location of iron and steel industries is determined primarily by advantages in assembling raw materials and secondarily by advantages in distributing finished products in domestic and foreign trade. In ad- dition to ore supply, chief requisites for the establishment of a steel plant are fuel and limestone (or some other flux- ing material), labor supply and transportation facilities. Ii\ some favored regions, as in the British Isles, along the Rhine, and in the Birmingham, Alabama, district, coal 68 SOME GREAT COMMODITIES and ore deposits are found in close proximity. When this is not the case, the rule has been that "Iron goes to coal." Swedish and Spanish ores have for years moved to the fuel and blast furnaces of England and Germany. Foreign ores, chiefly from Spain and northern Africa, now TABLE A IRON CONTENT OF PRINCIPAL KNOWN IRON ORE RESERVES Pre-war estimates Post-war estimates 1 (Stockholm Congress, 1910) (in millions of tons) United States 2,305 ' 2,935 Newfoundland 1,961 1,750 t5> Cuba 857 ! 1,080 Great Britain 455 7 318 /v \ France 1,140 1,790 v Germany 1,270 256 \0 Luxemburg 90, 60 Sweden 740 T 443 / Russia 387 4 2 199 Spain 349 353 Norway 124 \ 86 Austria 90 77 ^Estimate for United States from Mineral Industry, 1918; Newfoundland and Cuba esti- mates adopted by F. H. Hatch, 1920; other countries from Bulletin 706, U. S. Geological Survey. ^Central Russia, Ural region and Caucasus, excluding the Ukraine and Finland. furnish about one-third of the supply used in the British industry, freight rates being kept at a minimum by utiliza- tion of ore-carrying vessels to take coal as return cargo. Lake Superior ores are handled three times and carried almost 1,200 miles by rail and water to the great coal fields around Pittsburgh, a distance longer than that from Spanish mines to British furnaces. While Minnesota and Michigan produce over 80 per cent, of all ore mined in the United States, their smelting industry is small and 60 per cent, of the country's pig iron output is made in Penn- sylvania and Ohio. Hydro-electric power as a substitute for coal in ore re- IRON AND STEEL 69 duction may bring about far-reaching developments in the steel industry if costs can be reduced. With the in- troduction a century ago of coke as fuel for blast furnaces, replacing charcoal, supremacy passed from Sweden to England. Electric smelting offers possibilities for the utilization of important ore fields for which no convenient coal supply exists. This method has risen to potential importance in comparatively recent years, one form of it having been developed in Sweden in 1910. Costs of elec- tric smelting have been found relatively high and thus far the coke-fired blast furnace has held its own in countries where fuel is readily obtainable. Brazil, with its unsur- passed water-power resources and rich ore deposits, has already made a small beginning in electric smelting and is using electric power in other lines of industry because of the insufficiency of domestic coal. As government policy definitely encourages domestic manufacture, it seems only a question of capital and time for installation until a steel industry may be created in Brazil independent of imported fuel. Labor can be transported to sparsely populated locali- ties when other conditions favor industrial development, and new enterprises in turn help to build up population. It is evident, however, that iron and steel manufacturing has thus far developed almost exclusively in well popu- lated countries which afford a market as well as a labor supply. While Japan, China, and British India lead Western nations at present in the available supply of cheap labor, the unsettled condition of the labor situation in the Orient points to the possible removal of this appar- enf advantage. A low wage scale, moreover, does not insure low labor costs per unit of output and it should 70 SOME GREAT COMMODITIES not be assumed that cost of production will be smaller in the East than elsewhere. Of hardly less importance in the geographical location of the industry than supply of raw materials and labor is the matter of distribution of finished products in domes- tic and foreign trade. Cheap water transportation by rivers and canals gives the steel industries of Great Britain, Germany, Belgium and northern France easy access to shipping ports and consequently to foreign markets, while steel products from Pittsburgh and Youngstown must bear the cost of a rail haul of several hundred miles to seaboard before they can be loaded for Europe or the Orient. In general the steel industry of Europe has better facilities for entering foreign trade than has the American industry. The latter, on the contrary, has a far more extensive domestic market than is the case in any Euro- pean country. The bulk of the steel manufacturing in the United States is carried on in the interior where finished products can be easily distributed in the home market, only a small part of the industry being at seaboard. Future development of the St. Lawrence Canal route may provide water transportation for an important steel district. For the future it is predicted in some quarters that more consideration will be given to accessibility of ore supply and markets than has heretofore been the rule. The movement of iron ore in international trade is usually subordinate to its consumption in the producing countries. Leading steel-making countries, with the ex- ception of Germany and Belgium, depend primarily on native ores and only secondarily on imported supplies. From the standpoint of ore-producing countries, the de- termining factor in the question of home manufacture IRON AND STEEL versus exportation of ores is cost. European ore move- ments will probably continue to be influenced by con- venience and cost of transportation more than by political boundaries and ore will generally be smelted where it can be done most cheaply, taking all elements of cost into consideration. The accompanying table shows produc- tion, imports and exports of ore of a number of countries TABLE B PRODUCTION, IMPORTS AND EXPORTS OF IRON ORE BY LEADING COUNTRIES, 1913, 1919 AND 1920 1913 1920 1919 (in tons 1 ) Production United States 61,980,437 60,965,418 67,604,465 United Kingdom 15,997,328 12,254,195 12,707,475 Germany 28,607,900 6,153,800 6,361,600 Luxemburg 7,333,372 3,112,472 3,704,390 France 21,918,000 9,340,000 13,871,187 Belgium... 150,450 4,820 17,260 Sweden 7,475,571 4,981,110 4,519,112 Spain 9,861,668 4,640,061 4,767,693 Imports United States 2 2,246,353 476,461 1,273,456 United Kingdom 7,442,249 5,200,696 6,499,551 Germany J 1/1 mo ruq 6,450,421 Luxemburg \ 14,019,045 61U39 1>016>0 . 79 France 1,410,424 303,853 404,725 Belgium 7,085,163 724,930 2,450,367 Sweden 2,909 . . 762 Spain 4 * < Exports United States 3 1,224,112 996,569 1,145,037 United Kingdom 6,378 2,364 2,095 Germany 5 9 IQ IKQ 3 160,520 Luxemburg } *ow,ioc 1,207,510 2,042,889 France 10,066,628 1,997,171 4,839,516 Belgium 724,765 15,520 152,808 Sweden 6,439,750 2,416,856 3,728,623 Spain 6 ... 8,907,309 3,702,648 4,630,662 *For United States and United Kingdom, gross tons of 2,240 pounds; other countries metric tons of 2,204.6 pounds. 'Fiscal year ending June 30, 1913; calendar years 1919 and 1920. Not available. ^Imports nil or negligible. 'Exclusive of pyrites. 72 SOME GREAT COMMODITIES before and after the war. The year 1913 is chosen for comparison with the post-war period as in many countries that year marked the culmination of a period of steadily increasing production. PRODUCTION OF PIG IRON AND STEEL The world's production of pig iron between 1800 and 1910 increased at an average of about 60 per cent, in each decade. Since 1910 it has increased very little and the record output in 1913 has not been equaled in the post-war period. Fundamental changes in the status of European countries were brought about by the redistribution of territory after the war. The commercial supremacy of steel over iron is a de- velopment of the nineteenth century, for until the inven- tion of the Bessemer converter process in 1855, the only steel available was that made in small quantities at high cost by the case-hardening, crucible and cementation processes. The open-hearth furnace, perfected by Siemens soon after 1860, brought further progress in the direction of economical quantity production, as it made possible the use of pig iron smelted from ores which were unfit for the making of Bessemer pig. By 1877 more steel rails were made in the United States than iron rails and as the demand for steel expanded the manufacture of iron prod- ucts has gradually assumed the position of a specialty business. The electric steel furnace, introduced at the close of the century, is used chiefly for making tool and special alloy steels because of the exactness with which its operation can be controlled. An important economy in steel manufacture is effected by the use of a large proportion of scrap with pig iron in IRON AND STEEL 73 the open hearth process. To this method is due the pro- duction in several recent years of an annual output of steel greater than that of pig iron. Scrap can also be used for steel making in the electric furnace. The utilization of old material and scrap from manufacturing to swell the vol- ume of steel is particularly valuable to industry at a time when the exhaustion of high-grade ore reserves is in pros- pect. The world's production of pig iron in 1800, 1850 and certain later years and steel production in a number of years beginning with 1870 are shown in table C. Figures for 1900 and earlier are rough estimates rather than exact totals. For later years official estimates have been used wherever possible in compiling world production. While production by the most important countries is in- cluded, a world total is of necessity only an approxima- tion. TABLE C WORLD PRODUCTION OF PIG IRON AND STEEL Year *** Iron Steel (in thousands of gross tons) 1800 ..................... 825 i 1850 ..................................... 4,750 i 1870 ..................................... 11,900 692 1900 ..................................... 38,973 28,273 1910 ..................................... 65,240 59,679 1911 ..................................... 63,013 59,783 1912 ..................................... 72,258 72,137 1913 ..................................... 77,717 75,424 1914 ..................................... 59,337 59,800 1915 ..................................... 59,294 65,715 1916 ..................................... 72,121 81,847 1917 ..................................... 70,481 83,634 1918 ..................................... 64,975 76,540 1919 ..................................... 49,628 54,918 V1920 ..................................... 58,713 67,995 1921 ..................................... 35,415 40,491 iNot available. 74 SOME GREAT COMMODITIES CHIEF PRODUCING COUNTRIES The foremost producer of iron and steel is the United States. This supremacy was won in 1894 when for the first time the quantity of pig iron and steel made in the United States exceeded the production of the United Kingdom. Except in two years of industrial depression the record has been held until the present time. From 1916 to 1920 the United States produced as much pig iron as all other countries combined. Germany, the United Kingdom, and France follow, the order given being that of standing in the post-war period. Belgium and Luxemburg are important not so much for the bulk of their output as for their relatively large surplus above domestic needs. The steel industry of Luxemburg was formerly closely connected with that of Germany. Austria and Russia have lost the pre-war pro- ductivity which represented a considerable contribution to the world's total, although production in those countries was principally for home consumption. In the succession states of the Austrian Empire rehabilitation of the iron and steel industry is going forward but in Russia, so far as can be learned, almost total paralysis of the industry has occurred. Ore exports overshadow Sweden's iron and steel manufacture, which is largely given over to specialties for export, while ordinary products are imported for home use. Spain is trying to increase the smelting of native ores. Canada has lately reached a position of significance and is ambitious for the future. Japan, British India and Australia have small industries, China and South Africa still smaller ones with the prospect of growth. The progress of India's manufacturing may well be considerable IRON AND STEEL 75 in view of the character and extent of natural resources. Italy maintains an industry by importing raw materials and scrap at heavy cost. In Brazil the manufacture of iron and steel has not advanced beyond the initial stages. From the international standpoint the chief factors in production are the United States, United Kingdom, France, Germany and Belgium. Interest centers, since the war, on the change in relative position of France and Germany which is illustrated by the reduced post-war pro- duction of the latter shown in tables D and E. Through the recovery of Lorraine Annexee, France completes her control of all the ore fields in the Lorraine basin except the small area held by Luxemburg. Lorraine ores, together with those of Normandy, Brittany, Anjou and other districts, place France next to the United States in ore reserves and foremost in all Europe. Fields retained by Germany contain known reserves amounting to about one- seventh of the French reserves. French ore-producing capacity is theoretically around 40,000,000 tons annually, which with sufficient blast furnaces and fuel would pro- vide for over 10,000,000 tons of pig iron a year. For the present, actual ore and iron output are far below these figures and large ore exports have disposed of part of the production of the mines since the war as in pre-war years. Germany's loss of Lorraine, comprising two-thirds of German ore reserves and 30 per cent, of her blast furnace capacity, leaves the country able to produce a maximum of 13,000,000 to 14,000,000 tons of steel a year if the neces- sary foreign ore is obtained. Actual output from 1919 to 1921 was much below that figure. The Luxemburg industry is to some extent controlled by French and Belgian capital. The recent economic 7 6 SOME GREAT COMMODITIES agreement between Belgium and Luxemburg links coal resources of the former to the productive ore fields of the latter. In case the opportunity for combination is embraced by the steel interests in both countries they will furnish active competition to Germany. The accom- panying tables show average annual production of iron and steel in the five years 1909 to 1913 by six countries, maximum production in any year, and production for 1919 and 1920. TABLE D PRODUCTION OF PIG IRON BY LEADING COUNTRIES United States M PRO Year 1916 AXIMXJM DUCTION Quantity 39,434,797 10,260,315 16,761,311 2,547,861 5,207,000 2,484,690 1909-1913 5-year ]qiq average (in tons 1 ) 27,488,335 31,015,364 9,616,427 7,417,401 14,042,243 5,654,408 1,981,589 617,422 4,447,600 2,412,149 2,060,070 250,570 1920 36,925,987 8,034,700 5,550,000 692,935 3,433,791 1,116,400 United Kingdom 1913 Germany. . . . 1913 Luxemburg 1913 France 1913 Belgium. . 1913 TABLE E PRODUCTION OF STEEL BY LEADING COUNTRIES MAXIMUM PRODUCTION Year Quantity United States 1917 45,060,607 United Kingdom 1917 9,716,544 Germany 1913 17,598,826 Luxemburg... 1913 1,336,263 France 1913 4,687,000 Belgium 1912 2,515,040 1919 1920 1909-1913 5-year average (in tonsi) 27,255,645 34,671,232 42,132,934 6,635,600 7,894,000 9,067,300 14,469,994 6,877,398 7,710,000 931,053 370,795 584,968 4,203,600 2,200,000 3,050,396 2,139,894 334,000 1,253,110 iFigures for the United States and United Kingdom are in gross tons of 2,240 pounds: for other countries in metric tons of 2204.6 pounds. STEEL MANUFACTURING Direct processes of producing steel from ore in a single operation are eagerly sought but their commercial applica- tion belongs to the future rather than the present. Under the present system in the United States about 60 per cent, of the pig iron output is delivered in molten condition IRON AND STEEL 77 from the blast furnace to the converter or open-hearth furnace to be made into steel without loss of heat. Fuel saving by this method is possible only to large industrial units operating both blast furnaces and steel plants and is one of the chief advantages of mass production. Quan- tities of pig iron delivered in molten condition and by other methods are shown in Table F covering production in the United States for the years 1913 to 1921. TABLE F METHODS OF DELIVERY OF PIG IRON PRODUCED IN THE UNITED STATES, 1913 TO 1921 1913 1914 1915 1916 1917 1918 1919 1920 1921 The open-hearth process was developed in England and on the Continent at about the period of the American Civil War, and its use has rapidly increased both in Europe and in the United States, until it now dominates the industry in the leading steel-producing countries. Table G, sum- marizes, by five-year totals and by processes, the produc- tion of steel in the United States from 1891 to the close of 1921. It will be seen that, while 82 per cent, of all the steel produced in this country during the five years from j 1 89 1 to 1895 was Bessemer and only 17 per cent, was open- hearth steel, in 1921 but 20 per cent, was made by the Bessemer method and 79 per cent, was made by the open- hearth process. Iten Condition 16,738,708 11,911,247 17,108,891 23,101,018 23,193,439 23,643,761 18,217,717 22,293,410 9,744,475 Sand Cast 6,689,680 4,814,959 5,076,469 6,584,152 6,238,567 5,672,387 3,962,162 4,612,446 998,898 Machine Cast Chill Cast (in gross tons) "6,522,171 1,000,171 5,854,661 738,018 6,969,108 740,413 8,278,357 1,442,576 7,649,684 1,506,394 8,312,549 1,387,946 7,985,710 819,554 9,203,174 784,480 5,736,347 195,239 Direct Castings 15,422 13,359 21,332 28,694 33,132 38,001 30,221 32,477 13,167 Total 30,966,152 23,332,244 29,916,213 39,434,797 38,621,216 39,054,644 31,015,364 36,925,987 16,688,126 78 SOME GREAT COMMODITIES TABLE G PRODUCTION OF STEEL IN THE UNITED STATES BY PROCESSES: FIVE-YEAR TOTALS, 1891 TO 1920, AND 1921 Per cent, of Total Period Open Bessemer All Total Open Bessemer All Hearth Other Hearth Other (in gross tons) 1891-1895 3,909,650 19,111,979 357,053 23,378,682 16.72 81.75 1.53 1896-1900 11,483,114 30,275,362 441,213 42,199,689 27.21 71.74 1.05 1901-1905 31,053,491 45,245,009 541,157 76,839,657 40.41 58.88 .71 1906-1910 61,365,323 48,803,689 664,905 110,833,917 55.37 44.03 .60 1911-1915 98,833,090 42,329,520 729,739 141,892,349 69.65 29.83 .52 1916-1920 159,644,300 47,069,884 2,386,701 209,100,885 76.35 22.51 1.14 1921 15,549,802 4,015,938 178,057 19,743,797 78.76 20.34 .90 By the open-hearth process the composition of steel can be better controlled than by the Bessemer method* The increase in the use of the basic open-hearth process in the United States and elsewhere has been accelerated by the fact that pig iron for use in this method may vary widely as to its phosphorus content, while the possible range of phosphorus content for pig iron to be converted either by the acid Bessemer or basic Bessemer process is limited. A very important feature of both the basic and acid open-hearth processes is the use of scrap in making steel. By the acid open-hearth process as much as 75 per cent, scrap has at times been used. In the United States, where by far the larger proportion of steel is produced by the basic open-hearth process, and in the United Kingdom it was formerly believed that good basic open-hearth steel could not be made if over 50 per cent, of the charge was scrap. During the war years both the presence of large quantities of scrap and, in some countries, a shortage of pig iron, greatly stimulated efforts to develop a technique by which the proportion of scrap to pig iron used in the production of steel might be increased. It has now been demonstrated that it is possible to use more than half scrap in the basic open-hearth process with satisfactory IRON AND STEEL 79 results. The price of scrap in relation to cost of produc- tion of pig iron will be a factor in future development, but there is every evidence that the limits of the use of scrap have been by no means reached. The technical changes which have taken place in steel making in the United States are clearly reflected in the ratio between pig iron output and steel production. Dur- ing the five years from 1891 to 1895, one and three-fourths tons of pig iron, including non-steel-making iron, were produced to every ton of steel. The ratio of pig-iron production to steel output fell very rapidly during the last decade of the nineteenth century. Since that time, al- though the decline has been less rapid, it has been con- sistent, until in 1921 less than nine-tenths of a ton of pig iron for all purposes was produced for each ton of steel. The manufacture of pig iron from ore is practically limited to a single process, smelting in the blast furnace. In the second stage, from pig iron to ingots, there is little variation; the two principal methods, using the Bessemer converter or the open-hearth furnace, account for the bulk of the output and the product is always an ingot for further working, or a finished casting. The tonnage of ingots and castings together measures the output of crude steel. After the ingot stage diversification begins. Semi-finished steel is in the form of blooms, billets, slabs, sheet bars, and tinplate bars, while all other rolling mill products are known as finished rolled steel. The rolling mill is the last division of the steel industry, as distin- guished from the manufacturing groups which produce locomotives and cars, automobiles, machinery and tools, etc. Domestic demand differs widely in the chief producing 8o SOME GREAT COMMODITIES countries. The American industry has at its very doors the greatest market in the world for steel. Development of this country as a manufacturing nation is not complete, and iron and steel are required for machinery and for all forms of plant equipment in increasing amounts for do- mestic uses. Large quantities are being used in the manu- facture of machinery for the export trade. The railroad mileage of the United States is over a third of the total mileage of the world, and it has been roughly estimated that consumption by railroads of the United States re- quires from one-sixth to one-third of the entire domestic steel output. The use of steel as a structural material, especially with concrete, has been carried further here than in any other country. INTERNATIONAL TRADE The international demand, as distinguished from the domestic demand, for iron and steel is created by import- ing countries which belong to three main classes. Those countries where industrial development is in progress but where the domestic production of iron and steel products is not commensurate with growing needs, are heavy im- porters. Australia, Canada and Japan are typical of this class. A second group of importing countries consists of those with relatively little industrial development. Iron and steel and their manufactures, including machinery, are frequently among the leading imports into countries of this group, which require steel for railways, for construc- tion and for the innumerable needs of an awakening economic life. Representative territories of this type are the Philippine Islands, the Dutch East Indies, and to a large degree, the Argentine Republic. IRON AND STEEL 81 A third group is made up of countries which are them- selves large producers. In the years preceding the war, Great Britain found better sale for her iron and steel in the United States than in many non-steel-producing coun- tries. Germany usually bought more iron and steel products from her competitor, Great Britain, than did British South Africa. The United States, while normally selling both crude and manufactured steel to the United Kingdom, buys British specialties also. International trade in iron and steel can be discussed statistically only within the limits imposed by official statistics themselves. Not all classes of commodities are reported quantitatively and statements of values for im- ports and exports are rendered useless for comparative purposes by the abnormal fluctuations of prices since 1914. Pig iron, raw steel and finished iron and steel are reported by quantities in statistics of most countries, while frequent- ly values alone are available for machinery, tools, imple- ments, certain hardware and other manufactures. For this reason it is impracticable to discuss international trade in machinery and other manufactures, although much of the output of the steel industry is exported in such forms as sugar-mill machinery for Cuba, agricultural implements for Australia, and locomotives for South America. The American industry has heretofore exported a smaller share of its output than have the industries of Germany and Great Britain. The exact ratio between exports and total production is difficult to determine. It is estimated, however, that prior to the war American exports averaged about 8 per cent, of the total pig iron production, and practically the same per cent, of total steel output. Dur- 82 SOME GREAT COMMODITIES ing the war the proportion of exports to total pig iron and steel output rose somewhat. In 1919, exports were esti- mated at about 14 per cent, of all pig iron produced, and in 1920 and 1921, 13 per cent. It is a commonplace that Great Britain lives by foreign trade. The imported food supply and raw materials for manufacturing are paid for largely in textiles, iron and steel and coal. In 1913 the volume of exports of iron and steel of all classes was about 50 per cent, of the weight of pig iron produced. Belgian dependence on foreign markets was still greater as the country's exports in 1913 were estimated at nearly 70 per cent, of production. Ger- many's exports absorbed over 35 per cent, of production in 1913. France had a smaller proportion of exports, around 20 per cent., in the same year. Raw and semi-manufactured products form a smaller total in foreign trade than finished iron and steel, as the former can be utilized only by countries able to carry out all the succeeding manufacturing processes. The larger share of the trade is in finished iron and steel, especially rails, bridge and structural iron, plates and sheets, pipes and fittings, bars and rods, etc. Under abnormal con- ditions during the war, large shipments of steel ingots, billets and blooms were supplied by the United States to England, France and Italy for munitions, but normally exports of this class form a relatively small total. In response to war demands exports of steel from the United States rose to unprecedented volume and for two years after the armistice remained above the pre-war level, but in 1921 steel exports reflected the world-wide trade depression. France alone of all the European countries exported more iron and steel after the war (1920 and 1921) IRON AND STEEL than in 1913. British exports from 1914 to 1921 were much smaller than in 1913, German foreign trade was im- proving to some extent in 1920 and 1921, while at the same time Belgian trade reached about half the volume of ex- ports maintained before the war. Although the foreign trade statistics of the five countries do not afford an ex- act basis of comparison, the following table, showing total exports of iron and steel (not including machinery) so far as they are reported by weight, will serve as an indication of the position of each country in 1913 and from 1919 to 1921. TABLE H EXPORTS OF IRON AND STEEL BY PRINCIPAL COUNTRIES 1913 1919 1920 1921 1919 1920 (in tons 1 ) United States 3,018,500 United Kingdom 4,933,704 Germany 6,497,262 France 1,144,946 Belgium 1,722,720 4,399,699 2,232,844 2 397,394 176,770 4,935,136 3,251,225 1,750,601 1,385,898 923,063 2,213,378 1,700,407 n,631,948 2,266,633 995,836 ^United States and United Kingdom, gross tons of 2,240 pounds; other countries, metric tons of 2,204.6 pounds. 2Not available. s Figures for May to December only; other months not available. The increase in American exports during the war years was due primarily to the furnishing of materials for muni- tions and supplies to the belligerent countries, and secon- darily, to expansion of trade with Far Eastern and South American markets. To a limited extent American iron and steel supplied the deficiency of European goods in those markets. The contraction of British exports seri- ously affected many of Great Britain's foreign markets and up to the close of 1921 no great progress had been made in regaining the pre-war volume of trade. A de- 84 SOME GREAT COMMODITIES termined effort was made to maintain the supplies usually sent to British dominions, but nevertheless, exports to British possessions fell from an average of about 1,950,000 tons in the five years 1909-13 to about 900,000 tons in 1914-18. The change in distribution of British exports from 1909 to 1920 (the latest year for which exports by countries are available) is shown in table I, and the pre-war and post-war distribution of representative products in American export trade is given in table J. International trade is influenced primarily by prices, secondarily by other factors, such as terms of sale, ship- ping connections etc. Since the excessive depreciation of Continental currencies makes comparisons involving French and German prices worthless, the following table includes only prices of American and British products, involving the smaller degree of decline in sterling exchange since the war. The prices quoted are for sales in the domestic market in each country, as no standard and uni- form quotations for prices in export trade are available. The world was making and using steel in 1913 at the rate of about 75,000,000 tons a year. In the four years which followed, industries strained to produce their max- imum output, much of which was reduced to scrap and rust. In 1919 and 1920 production amounted to less than 70,000,000 tons and in 1921 declined to about 40,000,000 tons. This indicates not so much reduced needs as reduced purchasing power and world-wide depression which rendered normal replacements and extensions im- possible. It is probable that there has not been over-expansion of productive capacity since 1913 in relation to the world's normal requirements for iron and steel. The temporary IRON AND STEEL iq re-. >rH^io;dc> COrH "LO 1 CO C2 CO rH < IS 8M ,O -LO < " I s 00 -a LO ^ 5 rH S5 00 & , i-H TJ< LO CVJ C> LO Ttf S a^^' 00 ^^ 1 ^ S IO~00 *T* b-COCVj'r-rcO"COCO~rHaJ'i-H OQCO ."* CO t> CO O rH CO t^ CO 00 LO 12 -i : Hi^i*win^ciii 1 ' l>rHrH i-Hi-l rt 00 rH LO | I Tj< rH CO T 00 CSI O5 C^ O rH CO ^ CM Q Oi LO OC O5C5COCNlCOOC^OC>.OOOOTtC^COrH^ i o? s 3 H^ 06 -3 w-o ^ ^s S3 sis ?J' CO 1 Ifi'S eo "tja- s? 185 CO i i!( s - III Tf g s _- : : > . <-! C fe! 5^i im "ill 86 SOME GREAT COMMODITIES LO rHrHCOTrHi r-roo > Lo"'ood'ot>i-rcD' ^ OOrHCDCD T-irHrH CM CM rH ^ S LO CD C^ ^D CD ^ SSI ! 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LUMBER THE forest lands of the world, according to the latest estimates, amount to about 4,020,000,000 acres, or 24 per cent, of the total land area. This does not include the forests of China, Korea, and the larger part of South America and Africa, for which even fair estimates are lacking. All figures for forest lands, how- ever, are more or less approximations. For Europe only can data be regarded as fairly accurate; but this accuracy does not extend to Russian figures. Table A shows as far as data are available the location of the main forest areas of the world. Political designations are those of 1910. TIMBER CLASSIFICATION Mere acreage, however, is not the sole determining fac- tor of a country's position as to timber supply, for all woods are not equally workable or serviceable. Thus, although large areas of Africa, South America and Australia are under heavy tropical forests, they produce mainly hard, dense, heavy woods unsuitable as lumber for general pur- poses and suited only for limited specialized uses. Trees from which timber of commercial value is obtained are of two broad classes : coniferous or cone-bearing trees, and hardwood or broadleaf trees. The former comprise what are ordinarily called softwoods, the principal species being the pines, spruce, fir, hemlock, larch, tamarack, cedar, cypress and redwood. They may invariably be 90 LUMBER 91 TABLE A DISTRIBUTION OF FOREST AREAS OF THE WORLD IN 1910 Country Total forest area (in millions of acres) EUROPE Austria-Hungary 53 Finland 53 France 24 Germany 35 Norway 17 Russia in Europe 465 Sweden 49 Other countries 54 Total Europe 750" ASIA India 149 Japan 58 Philippines 49 Russia in Asia 348 Other countries 7 Total Asia 611 AUSTRALIA 133 AFRICA Central Africa 224 Madagascar 25 Other countries 10 Total Africa 259 AMERICA Alaska 107 Canada 799 Mexico 25 South America (tropical) 528 United States 545 West Indies 43 Total America 2,047 Grand total 3,800 recognized by their needle leaves, resinous bark and cones, and in almost every case are evergreens. They are usually soft and light, from which qualities they derive the name softwoods. The broadleaf trees are the hardwoods, de- riving the name from the fact that as a class they are 92 SOME GREAT COMMODITIES heavier and harder than the softwoods, although there is a certain degree of overlapping of these qualities between the two groups. Poplar and basswood, for instance, are neither heavy nor hard, but are termed hardwoods. FOREST RESOURCES OF LEADING COUNTRIES Russia in Europe and in Asia contains almost half the world's timber stands of commercial species. So far, how- ever, the Russian lumber industry has developed in Euro- pean Russia, as there has been only an insignificant ex- ploitation of the forests of Siberia. Although the esti- mated forest area of European Russia is nearly 500,000,000 acres, the timber area is somewhat less than 300,000,000 acres, because of reductions that must be made for waste land, swamps, etc. Russia possesses vast coniferous for- ests and also large forests of hardwoods, mainly oak, poplar, elm and ash. At the beginning of the war the Rus- sian lumber industry had little more than started, the total cut of its sawmills being about eleven billion feet, compared with an American cut at that time of over forty billion. However, there was a large local lumber business that did not go through the sawmills, and which thus did not appear in the figures for the Russian cut. Before the war Austria-Hungary was one of the most important lumber-producing countries in the world. The annual cut of its forests, which were nearly all under care- ful management, amounted to about 2,827,000,000 cubic feet. The political dissolution of the empire, however, and the economic disorganization resulting have demoral- ized the industry, which will probably not be able to reach its pre-war efficiency for a considerable time. It has been estimated that the total area of commer- LUMBER 93 cially valuable timber in Canada lies somewhere between 200,000,000 and 300,000,000 acres and contains a stand of from 500,000,000,000 to 800,000,000,000 board feet. This has been cut into lumber during the last ten years at an average rate of about 4,000,000,000 feet board meas- ure per annum, with smaller cuts for the preceding years. Table B shows the lumber production in Canada from 1908 to 1920. TABLE B LUMBER PRODUCTION IN CANADA, 1908 TO 1920 Year M board feet 1908 3,348,176 1909 3,814,942 1910 4,901,649 1911 4,918,202 1912 4,389,723 1913. . . . 3,816,642 1914 3,946,254 1915 3,842,676 1916 3,490,550 1917 4,151,703 1918 3,886,631 1919 3,830,831 1920.} 4,302,625 TABLE C LUMBER CUT OF CANADA BY SPECIES Species 1913 1918 1919 1920 (M board feet) Spruce 1,274,216 1,142,777 1,335,044 1,490,098 Douglas fir 793,143 715,812 817,844 901,915 White pine 678,330 808,652 479,937 641,687 Hemlock 306,342 273,356 234,785 319,592 Red pine 144,320 102,105 89,198 96,253 Cedar 101,053 130,228 98,808 197,004 Tamarack 96,325 77,135 16,490 73,891 Balsam fir 64,957 94,774 140,834 132,390 Hardwoods 263,613 201,667 196,066 254,883 All other 94,343 340,125 421,825 194,912 Total 3,816,642 3,886,631 3,830,831 4,302,625 Of the softwoods, spruce, Douglas fir, white pine, hem- lock, cedar and balsam fir, which predominate in Canada's 94 SOME GREAT COMMODITIES timber, spruce is the most important and is the chief source for the manufacture of wood pulp. Table C gives the lumber cut of Canada by species for 1913, 1918, 1919 and 1920. British Columbia, Ontario and Quebec have the greatest quantities of standing timber, the central provinces being largely treeless prairies. Table D shows Canada's lumber cut by provinces for 1913 and from 1918 to 1920. TABLE D LUMBER CUT OF CANADA BY PROVINCES Province 1913 1918 1919 (M board feet) 1920 British Columbia. . 1 173 647 1 157 636 1 175 151 1443270 Ontario. . ... 1,101,066 1,110,062 940199 992901 Quebec . . . 630,346 841,084 884,612 916 422 New Brunswick 399,247 442,625 497,593 515785 Nova Scotia 274 722 176 332 225 074 273 987 Saskatchewan . 114,800 75,835 42,452 54371 Manitoba 71,961 54,047 30,353 58419 Alberta 44,462 22,388 26,173 41,229 Prince Edward Island. 6391 6393 8971 6241 Yukon. . . 229 253 Total 3,816,642 3,886,631 3,830,831 4,302,625 The United States originally possessed approximately 822,000,000 acres of timberland estimated to contain 5,200,000,000,000 board feet of saw timber, of which about 463,000,000 acres containing 2,215,000,000,000 feet remain. Of the amount removed about one-third has been lum- bered, one-third destroyed by forest fires and one-third wasted. The remaining virgin stands consist chiefly of various species of hardwoods in the Central and Southern hardwood regions, the yellow pine along the South Atlantic and Gulf coasts, and the Douglas fir, spruce and cedar of the far Northwest, with smaller stands of redwood, California sugar and white pine, western yellow pine and LUMBER 95 Idaho white pine in the Inland Empire region, the white pine in northern Minnesota and Wisconsin and spruce in Maine. Table E on page 96 shows the distribution of American standing timber by species and regions. The American lumber cut, which is several times that of any other country, reached its maximum, 46,000,000,000 feet, in 1906 and 1907. The total production of wood for all purposes including fire wood, pulp wood, etc. is known to be very much larger than the lumber cut, but statistics are not available. Table F shows the estimated total cut of lumber in the United States from 1904 to 1920. TABLE F LUMBER PRODUCTION IN THE UNITED STATES, 1904 to 1920 Year M board feet 1904 43,000,000 1905 43,500,000 1906 46,000,000 1907 46,000,000 1908 42,000,000 1909 44,500,000 1910 44,500,000 1911 43,000,000 1912 45,000,000 1913 44,000,000 1914 40,500,000 1915 38,000,000 1916 40,000,000 1917 36,000,000 1918 32,000,000 1919 34,550,000 1920 33,799,000 HISTORY OF INDUSTRY IN THE UNITED STATES One hundred years ago lumbering in the United States was confined to small sawmills on the coast and river courses of the East. Except for a small export trade the markets supplied were entirely local. Transportation was almost entirely by waterways. Although various "up- 96 SOME GREAT COMMODITIES in I-H > T 'S I 1 1 oT s, o LUMBER 97 and-down" sawmills were established on the Penobscot, Hudson and Delaware rivers early in the nineteenth century, the average sawmill up to 1880 was a small affair. As the Middle West became settled and railway trans- portation developed, the center of lumber manufacture shifted to the region of the Great Lakes. The famous white pine industry of the lake states began about 1850 and did not decline until the end of the eighties. The golden age of northern white pine was reached in 1870 in the State of Michigan. The lake states industry differed from the former industry of the eastern coast in being organized and capitalized on a large scale. It catered principally to the eastern and central markets. As the white pine industry declined toward the end of the century, owing to depletion of the virgin forest, the lumber market was diverted to pine from the southern states. In the eighties and early nineties southern pine first extended beyond local consumption. Owing to co- operation from the new railroads in the South, it became possible to supply the eastern and central markets of the United States with southern pine lumber. Central, eastern and southern parts of the United States depend mainly on the southern forests for their lumber, but in the course of a few years the southern pine industry will be able to supply only local consumption from its bits of virgin timber and second growth. The eastern and lake forests have had a similar history. The lumber industry of the Pacific coast, which has come to be important since 1900, is the large American industry of the future. Of the total available timber supply, over 50 per cent, is estimated to be in the Pacific Northwest. 98 SOME GREAT COMMODITIES Douglas fir is becoming important on the Atlantic coast and is sold extensively in the central market. The terri- tory from the Pacific coast eastward to the Missouri River and southward to western Kansas is now almost entirely dependent on the west coast mills for its lumber supply. The tendency is to extend eastward and southward. How- ever, for some time to come southern yellow pine will predominate in the central and eastern markets. DEVELOPMENT IN FOREIGN COUNTRIES Because of their vast timber resources Russia, Canada and the United States have been unusually wasteful of their forests. The dense population of the western Euro- pean countries, on the other hand, with the consequent reduction of forest areas, has made efficient forestry neces- sary there. In this regard Germany stood first, closely followed by France, Austria-Hungary, Denmark, Belgium, Switzerland, Norway, Sweden and Finland. The forest resources and the lumber industry of Norway, Sweden and Finland are of great importance particularly from the standpoint of the international market. Al- though the lumber is not naturally of such good quality as that from the United States and Canada, the methods of manufacturing are superior. Baltic products are gener- ally better sawed and planed. The material is carefully inspected and graded, is ordinarily seasoned for six months before shipment, and is usually branded. In Sweden, as the prosperity of the country is considered to be contin- gent to a large degree upon the existence of the forests, stringent laws against the depletion of timberlands have been enacted. Extreme care is taken in the sawmills to prevent the waste of even the smallest piece of lumber LUMBER 99 and close cooperation exists among producers. Swedish wood production is reported in cubic feet, and under normal pre-war conditions was about 950,000,000 cubic feet per year. Norway annually cuts about 345,000,000 cubic feet. Heavy inroads were made during the war on the timber stands and available stocks of lumber of Nor- way and Sweden by the large demands of the warring countries. For the immediate future in European inter- national trade the Finnish lumber industry is now the most important. Finnish forests are composed almost exclusively of pine, spruce, birch and to some extent alder, the most valuable species being pine. Forestry is con- ducted on a modern, scientific basis. Although less than 50 per cent, of the timber is government owned, the timber stands cannot be depleted, and cutting is done gradually so that the new timber grown annually is always at least equal to the annual cut. INTERNATIONAL TRADE With regard to trade in lumber, countries may be divided into five classes. First are those countries such as Russia, Canada and the United States which export more than they import. Second are those countries which, with a highly developed forest management and important forest possessions, themselves produce much wood but none the less have to import foreign wood to meet the requirements of their industries. Such countries were the German Empire before the war, France, Switzerland and Belgium. The third group comprises countries in which forest man- agement plays but a small part on account of the small forest area, representative countries being Great Britain, the Netherlands, Denmark and South Africa. Fourth joo SOME GREAT COMMODITIES are countries with only slightly developed forest manage- ment and little wood consumption, such as Italy, Spain, Portugal and Greece. The fifth group comprises countries with relatively large forest areas which are in large part not yet fully developed, are unequally distributed or are poorly managed. In this group, for example, are Serbia, Bulgaria, the South American countries and the West Indies. Countries which import their main timber and lumber supply may export small quantities of wood valued for special uses, while those countries on which the world de- pends for its wood usually import kinds not produced by their own forests. In the case of the United States, how- ever, as more than 80 per cent, of the lumber imports are from Canada, this trade does not differ essentially from domestic business. Importations from countries other than Canada, though not large in volume, are high in value, and consist chiefly of fine cabinet woods not found in Canada or the United States. Of these woods mahogany comes principally from Central America, Mexico and British West Africa and cedar from Cuba, Mexico and Brazil. Briar wood is imported from France, Italy and French Africa. The chief lumber-exporting countries before the war were Russia, including Finland, Austria-Hungary, Sweden, Norway, Canada and the United States. Table G shows approximate net exports from the leading exporting coun- tries for 1913. Because of the political realignments in Europe following the war, later comparable data are not available. Before the war Russia was the principal source of im- ported lumber for western European countries. Sixty- LUMBER 101 TABLE G NET EXPORTS OF LUMBER FROM THE CHIEF EXPORTING COUNTRIES IN 1913 Net exports (in millions of feet) Russia 7,500 Austria-Hungary 3,800 Sweden 3,300 Finland 2,600 Canada 2,200 United States 1,700 five per cent, of the output was for export, the majority of the sawmills being in the port cities. In 1913 Russia exported 7,500,000,000 feet of lumber, one-third of which went to Germany, one-third to the United Kingdom, one- sixth to Holland and the rest mainly to other European countries. According to recent reports, however, only a small fraction of the domestic demand at present is being supplied and it will probably be many years before Russia can regain any substantial part of her former importance in the world's markets. Austria-Hungary before the war was second only to Russia as an exporter of lumber. Its exports showed a steady increase, but even if the disorganization resulting from the war had not occurred, the increase would prob- ably not have continued for long; annual cut was greater than annual growth, and owing to the country's forestry policy its productivity was capable of only limited increase. Of exports from Austria-Hungary before the war, one- half went to Germany and about one-fourth to Italy. Of Sweden's exports of more than 3,000,000,000 feet per year, the United Kingdom has been accustomed to take nearly one-half, the remainder being distributed among other western European countries. Exports from Finland have been distributed in about the same way. 102 SOME GREAT COMMODITIES More than two-thirds of Canadian exports go to the United States, and most of the remainder is sent to the United Kingdom. The other regions of the world are lacking in lumber- cutting development, and do not contain the common softwoods, which are the chief staple timber product of international trade. Central and South American coun- tries now depend upon the United States, Canada and Sweden for most of their softwoods and are not likely to be factors as exporters for many years to come, if ever. Africa does not yet supply its own needs. China is be- coming an increasingly large importer. Japan does little more than supply its own requirements. Australia and New Zealand are now forced to import lumber from the United States and Canada. EXPORTS FROM THE UNITED STATES Though American lumber exports have a wider distri- bution through the world than the lumber of any other country, a comparatively small proportion of United States lumber has been exported. The average annual gross exports of lumber in the five years just preceding the war amounted to 2,221,000,000 board feet, in compari- son with the total average cut during these years of 44,200,000,000 feet. Though Canada and the United Kingdom are the largest single customers, it is the heavy importation of Canadian lumber into the United States which reduces the American gross timber and lumber pre- war export figure of nearly 4,000,000,000 feet to net ex- ports of less than 2,000,000,000 feet. Table H shows American exports of short lumber, i.e., boards, planks, scantlings, etc., for the average of the three fiscal years LUMBER 103 from July I, 1911, to June 30, 1914, and for the calendar years 1919, 1920 and 1921. TABLE H EXPORTS OF SAWED LUMBER FROM THE UNITED STATES BY SPECIES FOR THE FISCAL YEARS ENDING JUNE 30, 1912 TO 1914, AND CALENDAR YEARS 1919, 1920 AND 1921 Species 1912-141 (3-yr. average) Pine: White Yellow: Pitch (longleaf) 853,445 Shortleaf 37,325 Allother 208,857 Total pine 1,146,207 1919 1920 (M board feet) Fir. Oak Gum. . . . Redwood. Poplar. . . Spruce. . Cypress. . Allother. Total ),944 437,773 637,152 19,884 16,167 69,865 104,778 551,758 796,829 301,144 451,223 157,937 105,141 72,330 27,266 34,211 45,006 35,645 19,224 21,685 21,862 14,865 10,952 121,635 73,855 ,311,210 1,551,358 1921 '46,580 24,236 38,732 14,793 432,736 3,905 77,410 528,844 658,298 301,144 451,223 455,233 247,143 157,937 105,141 68,600 71,550 72,330 27,266 27,634 2 59,529 34,211 45,006 15,892 30,539 35,645 19,224 9,702 18,516 21,685 21,862 7,195 2 14,443 14,865 10,952 4,993 214,719 121,635 73,855 86,724 1,204,817 include joists and scantlings. Two-year average. Yellow pine, fir and oak constitute together about four- fifths of the total exports. Southern yellow pine, con- sisting chiefly of longleaf pine but including also shortleaf, loblolly, rosemary, slash and other yellow pines, is ex- ported principally to western Europe, the West Indies, the east coast of South America and eastern Canada. Douglas fir goes mainly to Australia, South Africa, Mexico, the west coast of South and Central America and the Orient. Oak is sent to all parts of the world, particularly to western Europe and Canada. Although Russia and Siberia probably will prove even- 104 SOME GREAT COMMODITIES tually to be the keenest competitors of the American lumber industry, the Scandinavian countries, including Finland, are the only countries besides Canada which can at present offer much competition to the United States in the inter- national market. The principal advantages of the Scan- dinavian and Finnish exporters of lumber are superior shipping facilities through native-owned tonnage, efficient marketing systems, cooperation among exporters, close connections between exporters and importers, proximity to the principal markets, elimination of many middlemen and established reputation. Canada will always be a competitor of the United States as a lumber exporter, but on account of its smaller production cannot export on as large a scale as the United States. For the United States, however, to increase its exports of southern yellow pine before the pine land best suited to growing this timber is placed on a permanent producing basis is a policy open to question. There is an increasing demand on the softwood forests of the Pacific Northwest as the end of the present stand of southern yellow pine and the eastern white pine comes in sight, and if there is much further increase of United States exports of Douglas fir, western white pine, sugar pine, western yellow pine and other softwoods it will seriously diminish the future domestic supply of raw materials. Likewise, in the hard- wood industry there is danger of exporting more than the surplus over and above domestic needs. Although this country possesses more valuable hardwood timber than any other temperate region in the world and, with the possible exception of the Carpathian region of eastern Europe, the largest temperate zone supply, yet the exportation of raw material for European furniture factories and LUMBER 105 other wood-using industries might in the future cause American industry to go without or to pay excessive prices. At present the timber supply of the world outside of the tropics is being used more rapidly than it is being renewed by growth. In the United States the annual timber growth is about one-third of the annual cut and the oncoming growth is ordinarily of inferior species and grade. On this account the lumber export business of the United States cannot be permanently enlarged without detriment to the national welfare until provision has been made which will secure a renewal of the forests of this country by the practice of scientific forestry. Heavy export sales of United States timber would mean that this nation, which is the largest wood-using country in the world, would be obliged to secure its timber supplies in a world market of increasing scarcity. If such a situation de- veloped, a drastic readjustment would be required, for the majority of the dwellings and farm buildings in this country are made of wood and more than half the total domestic consumption is used for construction. By prac- tical forestry methods, however, it would be possible to produce in the United States in the next half century an annual cut of many billion feet of lumber for export after meeting the demand for domestic needs without depleting the standing timber supply. ORGANIZATION OF UNITED STATES LUMBER INDUSTRY In the past the lumber industry of the United States has been characterized by violent and destructive competi- tion between different regions and between different mills in the same region, and speculative manipulation of timber 106 SOME GREAT COMMODITIES ownership produced sudden fluctuations in both output and price. Lack of sensitive adjustment of supply to demand has developed the lumber industry to such an extent that it is equipped to produce substantially in ex- cess of normal consumption. The organization of the lumber industry comprises five successive functions which are carried out in great diver- sity of combination by industrial units. These functions are the ownership or control of standing timber, logging, manufacturing of lumber, wholesale distribution and re- tail distribution. The most common industrial unit com- bines the first three functions, and often undertakes the distribution of its own lumber to the retailer, or even to the ultimate consumer. The lumber manufacturer ordinarily owns his timber. There has been a recent tendency toward consolidation of holdings in large tracts, which points to central control of the industry. Owing to the policy of the Government in selling its timberlands, there has been, since 1870, a vast speculative purchase of timberland far in advance of any possible use of the timber. Hence, it is generally recognized that the big profit in the North- west, and also to a great degree in the South, has not been in lumber manufacturing but in the increase in the value of timberlands. In certain regions logging, including the felling of timber and cutting it into suitable lengths for the sawmills and delivery of the logs by rail and water, has been a distinct industry. However, the majority of lumber manufac- turers have their own logging crews. In the early period o lumbering, there were separate companies of river "drivers." The technical processes of sawing and marketing lumber LUMBER 107 in the United States have been highly developed in the last fifty years. River drives have been superseded in the southern and lake states, principally through tempo- rary logging railroads or tap lines built into the woods. The most efficient modern methods have been introduced in the Pacific Northwest, the evolution being due largely to the increasing inaccessibility of timber. In contrast to the enormous mills cutting virgin timber in the Northwest and other parts of the country are the small mills which take over the lumber industry of a region after the original timber has been largely cut away. The result is a great diversity in the size and character of American lumber mills. There is every variety and style of sawmill, from the little stationary plant with sash saw, worked up and down by water power, to the large plant with its complement of main and secondary kilns and planers, which may turn out 250,000 feet of lumber every day. Mills classified as having an output of from 50,000 to 499,000 feet a year comprise about two-thirds of the total mills of the country. However, the largest mills, those having an output of 10,000,000 feet or more a year, though they constitute only about 4 per cent, of the total number of mills, now produce about 60 per cent, of the country's lumber. The proportion both of the largest sized mills and of their cut to the total has tended to in- crease in the last ten years. In 1870, when the United States began its policy of alien- ation of its timberlands, the Government owned approxi- mately three-fourths of the country's timber. Of the 2,215 billion feet of standing timber now in the United States the United States Forest Service estimates that about 30 per cent., or 659 billion feet, is publicly io8 SOME GREAT COMMODITIES owned, while 70 per cent., or 1,556 billion board feet, is owned privately. Of the 659 billion feet publicly owned the Federal Government has 600 billion of which about 498 billion feet or 22 per cent, of the country's timberlands is included in the national forests. State and municipal lands contain 59 billion board feet, or 3 per cent. About four-fifths of the timber in the national forests is con- tained in the five states of the Pacific Northwest, while only a very insignificant part of it lies east of the Rocky Mountains. The opinion has been expressed in the lumber trade that it may be desirable ultimately to double the present acre- age of the public forests. This could be done by the ex- tension of the national forests by purchase, by exchange of stumpage for other land and by placing under perma- nent administration the forest lands now in the unreserved public domain. State forests might also be enlarged. Some depleted and waste cut-over and burned lands should be rehabilitated. It is not advantageous always to reforest cut-over lands, since they may offer better re- turns for agriculture or other industry established on them. However, where through public and private cooperation and protection the replanting of cut-over timberlands promises a fair return, reforestation seems the logical course. A public survey of forest resources and a classi- fication of cut-over lands would facilitate a determination of whether they are more suitable for agriculture or for permanent timber growth. Tax accumulations, the cost of protection against fires, insects and disease and the fact that timber takes genera- tions to mature, all tend to discourage reforestation by private owners who too often take a short-sighted view of LUMBER 109 their functions. The responsibility for reforestation, however, rests upon private owners as well as upon the public at large, and the practice of forestry should be made effective both for public forests and for privately owned timber. PETROLEUM AND PETROLEUM PRODUCTS TTN THE sixty-odd years since American wells began production petroleum has found ever increasing world- * wide use until it has become an essential of modern civilization. Crude or semi-refined petroleum is used extensively as a fuel for locomotives and steamships and in a more limited way as a lubricant. Its principal use, however, is in the form of numerous refined products, among which gasoline, kerosene, gas and fuel oil, lubricants, paraffin, coke, asphalt and petrolatum serve to illustrate the variety and multiplicity of its applications to modern needs. PETROLEUM RESOURCES OF THE WORLD The United States has long been preeminent in the petro- leum industry, but it occupies the unenviable position of exhausting its resources much more rapidly than the rest of the world. Starting with a supply estimated at 14 billion barrels it has used up some 5 billion, leaving only about 9 billion barrels, or 64 per cent, of its original re- sources, still available. On the other hand, the world outside the United States is thought to have 56 billion barrels, or over 90 per cent, of its original supply of approx- imately 60 billion barrels. As the United States regularly produces three-fifths or more of the world's annual output, each year finds this country in a relatively worse position. While the using up of natural resources is deplorable, still the material gains resulting from their exploitation no PETROLEUM AND PRODUCTS 1 1 1 should not be overlooked, for in a large measure the grad- ual exhaustion of American petroleum has been offset by the advances of American industries thus made possible. Table A, which was prepared from figures compiled by the United States Geological Survey, shows an estimate of the petroleum deposits remaining in the different regions of the world. Any such table is liable to a wide margin of error, but it is believed that the figures understate rather than exaggerate the amounts. TABLE A PETROLEUM RESOURCES OF THE WORLD Estimated deposits Country or region (in thousands of barrels of 42 gallons) United States 9,000,000 Southeastern Russia, southwestern Siberia and the Caucasus 5,830,000 Persia and Mesopotamia 5,820,000 Northern South America, including Peru 5,730,000 Mexico 4,525,000 Southern South America, including Bolivia 3,550,000 East Indies 3,015,000 China 1,375,000 Japan and Formosa 1,235,000 Rumania, Galicia and western Europe 1,135,000 Canada 995,000 India 995,000 Northern Russia and Saghalien 925,000 Algeria and Egypt 925,000 Total known supply 45,055,000 Additional deposits probable 20,000.000 Grand total 65,055,000 The deposits of the United States are estimated as mak- ing up about one-fifth of the world's known supply and about one-seventh of the probable total stock. They are 2,245,000,000 barrels greater than the total for Russia, which has the second largest supply. In addition to these countries the petroleum resources of Persia and Meso- potamia and of northern South America, including Peru, ii2 SOME GREAT COMMODITIES are estimated to be greater than those of Mexico although that country is now second only to the United States in annual production. If an annual rate of 450,00x3,000 barrels, a figure nearly reached in 1920 and exceeded by 20,000,000 barrels in 1921, were to be maintained in the United States until the wells were exhausted, the known supply would run out in about 20 years. These oil fields, however, are likely to show long periods of declining productivity before they are completely exhausted. It is impossible to estimate when the United States will have used up its petroleum resources, but a period of constantly decreasing produc- tion with occasional increases as new wells are opened up and new methods of recovery are instituted may be ex- pected to begin within the next few years. To meet the emergency of a declining output of petro- leum the United States has in reserve huge deposits of oil shale from which great quantities of petroleum products may be obtained when it becomes economical to produce them. Enormous amounts of oil shale rich in oil are found in northwestern Colorado, northeastern Utah, south- western Wyoming and northern Nevada. Deposits of more limited extent and generally less rich are located in Pennsylvania, Indiana, Kentucky, Texas, Wisconsin, Michigan, West Virginia and elsewhere. Though the oil shale industry is of long standing in other parts of the world, notably Scotland, France and Australia, it has not yet passed the experimental stage in the United States. PETROLEUM PRODUCTION OF THE WORLD The petroleum output of the leading producing countries in the last five years is shown in Table B. Production in PETROLEUM AND PRODUCTS Russia, Rumania, Galicia and Germany was greatly cur- tailed as a result of the war and has not yet recovered. Mexico, on the other hand, showed a very marked gain during recent years, producing in 1921 about 26 per cent, of the world's total output. The figures for 1921, except for the United States and Mexico, are estimates by the American Petroleum Institute, while those for 1917-20 are as reported by the United States Geological Survey. Data for a number of the countries, especially for the more re- cent years, are subject to a considerable margin of error. The table should be regarded, therefore, as showing the best approximations available rather than accurate statements of production. Country TABLE B WORLD'S PETROLEUM PRODUCTION 1917 1918 1919 1920 (in thousands of barrels of 42 gallons) 1921 United States . . 335,316 355,928 377,719 443,402 469,639 Russia . . 69,960 40,456 25,498 25,430 28,500 Mexico . . 55,293 63,828 87,073 163,540 193,398 Dutch East Indies 1 . . 12,929 13,285 15,428 18,545 19,000 India 8,079 8,188 8,735 7,500 6,864 Persia 6,856 8,271 6,412 12,353 14,600 Galicia 5,965 5,592 6,054 5,606 3,665 Rumania 3,721 8,730 6,614 7,435 8,347 Japan and Formosa. . . 2,882 2,449 2,175 2,140 2,600 Peru 2,533 2,536 2,616 2,817 3,568 Trinidad 1,602 2,082 1,841 2,083 2,354 Argentina 1,145 1,321 1,183 1,666 1,747 Egypt 1,009 2,080 1,501 1,042 1,181 Germany 2 645 711 234 212 200 Canada 214 305 241 197 190 Venezuela 128 190 425 457 1,078 Other countries 3 59 36 1,136 429 433 Total 508,336 515,988 544,885 694,854 757,364 Including British Borneo, which in 1921 produced 1,000,000 barrels. 2 Production of Alsace included with that of Germany until 1919. Alsatian production estimated at 344,000 barrels in 1919, at 389,000 barrels in 1920, and at 392,000 barrels in 1921. 'Including chiefly production of Italy, Algeria, Cuba, England, and, in 1919, 1920 and 1921. Alsace. 114 SOME GREAT COMMODITIES The advance in the Mexican output has been very rapid ever since production on a commercial scale was com- menced in 1901. In that year 10,345 barrels were pro- duced. By 1907 the output had grown to 1,005,000 barrels, and by 1913 to 25,696,291. Total production from 1901 to 1921 was 730,000,000 barrels, or more than has been obtained in any of the other producing countries, excepting the United States and Russia, from the beginning of their production to date. Of the coun- tries shown in the table only Argentina, Trinidad, Egypt, Persia and Venezuela have had a more recent develop- ment of their oil resources than has Mexico. Rapid exploitation of Mexican petroleum resources has been due to the fact that the wells are all gushers. Pump- ing, which is required in most other fields, is not necessary there as the oil is forced out under a great hydrostatic pressure. As the pools become exhausted salt water fol- lows the oil to the surface, but it should be understood that the appearance of salt water in one pool has no sig- nificance as to the degree of exhaustion of separate and un- related pools. Many of the wells in the Amatlan pool, located in the Tampico-Tuxpam district, have recently been showing an increasing tendency to flow salt water. The approaching exhaustion of this pool may probably be traced to the competitive conditions under which it was developed. In this region there are many small hold- ings by competing companies, so that each company has felt it necessary to secure all the oil possible lest other wells draining the same pool get the supply. Most of the Mexican output is exported to the United States where it finds a market chiefly as fuel oil or asphalt, since only about 9 per cent, of gasoline and 4 per cent, of PETROLEUM AND PRODUCTS 115 kerosene are obtainable from the average grade. The bulk of this fuel oil is sold on the Atlantic coast of the United States where it is better able than Mid-Continent oil to compete with coal, since it enjoys an advantageous freight rate. PETROLEUM PRODUCTION IN THE UNITED STATES Although petroleum has been known and used since earliest times there was practically no development of the industry until oil wells came to be actively exploited in the United States. In 1859 Edwin L. Drake struck oil in a well drilled near Titusville in northwestern Pennsyl- vania. This well, which furnished 40 barrels at first and later only 15 barrels of petroleum a day, was the real be- ginning of the vast modern industry. The Appalachian field thus opened up furnished all the oil produced in the United States from 1859 to 1875, sup- plied over nine-tenths of the total until 1887, and over one-half until 1901. A maximum production of 36,295,000 barrels was reached in 1900 but by 1921 the output was reduced to 30,574,000 barrels, having been as low as 22,860,000 barrels in 1915. Table C, which shows the production of petroleum by states and fields in 1921, indicates the locations of the different fields as well as the relative importance of the states and fields in the quantity of oil produced in that year. To a great extent the separation of producing areas into fields is determined by the fundamental differences in the types of oil produced rather than by geographic boun- daries. The oils of the Appalachian field are mainly of paraffin base, free from asphalt and objectionable sulphur, n6 SOME GREAT COMMODITIES TABLE C PRODUCTION OF PETROLEUM IN THE UNITED STATES IN 1921 BY FIELDS AND STATES -,,, o~ c*o* Production Field and State (in thousands of barrels of 42 gallons) Mid-Continent Oklahoma 113,978 Central and northern Texas 70,892 Kansas 36,232 Northern Louisiana 24,793 Arkansas 10.190 Total 256,085 California. 114,709 Appalachian Kentucky 8,951 West Virginia 8,003 Pennsylvania 7,434 Central and eastern Ohio 5,194 New York 980 Tennessee Total. . 30,574 Gulf- Coastal Texas 32,430 Coastal Louisiana 1,730 Total 34,160 Rocky Mountain Wyoming 19,222 Montana 1,435 Colorado 108 Total. . 20,765 Illinois 10,044 Lima-Indiana Northwestern Ohio 2,139 Indiana 1,163 Total 3,302 Grand total 469,639 and yielding by ordinary refining methods high percent- ages of gasoline, kerosene and lubricants. In 1876 the California field began production on a com- mercial scale with an output of 12,000 barrels. Though still showing increased production from year to year, this field reached its greatest relative importance in 1913, when PETROLEUM AND PRODUCTS 117 with 97,789,000 barrels it supplied nearly two-fifths of the total for the country. The California oils as a rule have much asphalt and little or no paraffin. They have vary- ing proportions of sulphur and furnish chiefly fuel oils, lamp oils, lubricants and asphalt. Low percentages of gasoline are derived from certain of the lighter oils, espe- cially those in the southern part of the state. The Lima-Indiana field was the next to be developed. Starting with an output of 1,138,000 barrels in 1886 it reached its greatest production, 25,256,000 barrels, or slightly over two-fifths of the total for the United States, in 1896. These oils contain some asphalt although they are principally of paraffin base. They are contaminated with sulphur compounds which require special treatment for elimination. Commercial production in the Rocky Mountain field began with 76,000 barrels in 1887. Its relative as well as absolute importance is still increasing although its produc- tion was less than 5 per cent, of the total in 1921. The product is mainly of paraffin base suitable for refining by ordinary methods, but heavy asphaltic oils of fuel-oil grade are also obtained in certain of the Wyoming fields. One thousand barrels of oil were produced in the Illinois field in 1889, but less was obtained in the subsequent years until 1905 when 181,000 barrels were produced. The output reached its highest point in 1908 with 33,686,000 barrels. These oils contain varying proportions of both asphalt and paraffin, and differ as to specific gravity and distillation products. Sulphur is generally present but seldom in such form as to make necessary special treat- ment for its removal. The Mid-Continent field started production with 500 n8 SOME GREAT COMMODITIES barrels in 1889. Nearly every year since then has shown a marked increase and apparently the maximum has not yet been reached. It has been the chief producing field since 1915, taking rank over California in that year largely by reason of the development of the Cushing pool in Oklahoma. Petroleum from this field has widely varying characteristics. Sulphur is present in the lower grade oils, in certain of which, Healdton for example, it exists in a form necessitating special treatment for its elimination. Development of the Gulf field likewise started in 1889, when 48 barrels were produced. The Gulf production was negligible until 1901 when 3,593,000 barrels were obtained. The output of 36,526,000 barrels in 1905 has not since been equaled. Gulf oils have high percentages of asphalt and low percentages of the lighter distillation products. Con- siderable sulphur is present, but much of it is in a form easily removed before refining or using the oil for fuel. The annual production of each of the fields since 1918 is shown in Table D. The fields are named in the descend- ing order of the quality of their product. It is significant of the peculiar conditions prevailing in the production of petroleum that despite general busi- TABLE D PETROLEUM PRODUCTION IN THE UNITED STATES BY FIELDS . . 1918 1919 1920 1921 (in thousands of barrels of 42 gallons) Appalachian. . 25,401 29,232 30,511 30,574 Illinois.. 13,366 12,436 10,772 10,044 Lima-Indiana.. ... 3,221 3,444 3,059 3,302 Mid-Continent 179,383 196,891 249,074 256,085 Rocky Mountain 12,809 13,584 17,517 20,765 Gulf. 24,208 20,568 26,801 34,160 California 97,532 101,564 105,668 114,709 Total 1355,928 377,719 443,402 469,639 ^Includes 8,000 barrels produced in Alaska and Michigan. PETROLEUM AND PRODUCTS 119 ness depression accompanied by a fall in petroleum prices the output in 1921 showed an increase of 6 per cent, over 1920. The gain was shared by all but the Illinois field, in which production has regularly been falling off in recent years. When oil has been struck in a well production is maintained with little regard for the prices obtained for the product. Especially is this true where rival interests own wells draining a common pool. Not only must a producer continue to draw oil from his wells in order to get a maximum supply ahead of competitors, but this is necessary also lest the underground flow be diverted from his wells, should he shut down, with resultant loss in daily output when he resumes operations. Moreover, similar considerations compel producers on adjacent oil lands to vie with each other in drilling offsets. Depression in the petroleum industry does, however, limit to some extent the drilling of wells in known fields, and to an even greater degree the exploration of new ter- ritory. Since production is sustained only by drilling an increasing number of wells in any given field, and since new territory must be opened up to compensate for exhaus- tion of old fields, a decline in drilling is after a time fol- lowed by a falling off in production. Conversely, a period of prosperity brings increased production after a delay of months. Thus, while the increasing production in the first part of 1921 was probably a result of the prosperity in 1919 and the first part of 1920, there may be a period of declining output ahead which will reflect the depression of the first part of 1921. In this connection it should be recognized, however, that the drilling of a few very pro- ductive wells is equivalent to the bringing in of many wells I2O SOME GREAT COMMODITIES TABLE E SUPPLY AND DISTRIBUTION OF PETROLEUM IN THE CONTINENTAL UNITED STATES Item Production Net imports of crude oil 1 . Total Supplied to refineries Added to pipe-line stocks Added to other stocks, lost, or consumed in crude state. . 1917 1918 1919 1920 (in thousands of barrels of 42 gallons) 1921 335,316 355,928 377,719 443,402 469,639 23,858 31,852 46.474 96,881 115,680 359,174 387,780 424,193 540,283 585,319 306,400 330,136 358,914 442,032 448,664 2 16,355 2 24,315 6,140 5,823 54,454 69,129 81,959 59,139 92,428 82,201 1 Total imports minus exports to Alaska, Hawaii, the Philippine Islands, Porto Rico and foreign countries. 'Withdrawn. of only moderate capacity. The number of new oil wells completed each month fell off from about 1,830 in Jan- uary, 1921, to about 752 in October, the latter figure being the smallest in five years. December returns, how- ever, showed an increase to 1,110 wells. PETROLEUM TRADE OF THE UNITED STATES That the importation of the low-grade Mexican oils, as well as the takings of refineries, was sustained during the depression is shown by Table E, which likewise shows that the additions to pipe-line stocks in 1921 were enor- mous. Practically all the crude oil brought into the United States comes from Mexico. In view of the ever-increasing importance of the quantity of this oil in the total supply the only reason that the imports did not exert a more pronounced effect upon the domestic markets is that its quality is inferior. Exports of petroleum in crude con- dition are comparatively insignificant, going for the most part to Canada. Shipments of crude petroleum to Alaska, PETROLEUM AND PRODUCTS 121 Hawaii, the Philippine Islands and Porto Rico, though small, have been excluded from Table E in order to con- fine the consideration strictly to the continental United States. Notwithstanding large imports from Mexico it was only in 1920 and 1921 that the United States retained more petroleum than it produced, when the exportation of the refined products is taken into account. In other words, except for the last two years when imports of crude oil were especially heavy, the net position of the United States with regard to petroleum and petroleum products has been that of an exporter. By far the larger part of the crude petroleum stored above ground in the United States is held in large storage farms by the pipe-line and marketing companies. Oil thus held is described as pipe-line stocks. These stocks have a stabilizing influence upon the petroleum supply. When the demand exceeds production, as in 1917 and 1918, the shortage is met by a withdrawal of stocks from storage. In periods of overproduction, on the other hand, additions are made to stocks. Crude oil run to storage in 1919 and 1920 amounted to little over I per cent, of the current supply, but in 1921 the additions to stocks consisted of 54,454,000 barrels or 9 per cent, of the supply. The total gross pipe-line stocks at the end of December, 1921, amounted to 182,482,000 barrels. This quantity included 12,132,000 barrels of bottom settlings and water in the territory east of California that should not be counted as petroleum, but which have been included because the figures for the California holdings, 33,289,000 barrels, include an indeterminate amount of bottom settlings and water, some residuum and unfinished refinery products 122 SOME GREAT COMMODITIES that have been turned back to pipe lines, and also pro- ducers' stocks. Other stocks are those of Mexican oil held in the United States by importers. These aggregated 13,540,000 bar- rels on December 31, 1921, as compared with 7,442,000 on December 31, 1920. Statistics for these stocks are not available for previous years. The Mexican stocks include both crude oil and oil that has been "topped,'* that is, oil that has been subjected to a preliminary refinery proc- ess by which the lighter products, for the most part gaso- line, have been abstracted. On December 31, 1921, there were 11,125,000 barrels of Mexican crude and 2,415,000 barrels of topped oil in the hands of importers. The refineries regularly have a considerable store of crude petroleum but the supply varies somewhat from time to time. On December 31, 1916, the refineries held 20,370,000 barrels, but at the close of 1917 a low record of 11,638,000 barrels was established. At the end of 1920 the refinery stocks of crude oil consisted of 21,261,000 barrels. By the end of 1921 this stock had grown to 26,562,000 barrels. Most of the crude oil produced in the United States is bought by large marketing companies or purchasing de- partments of the big refineries at prices announced or "posted" by the purchasers. Some of the crude pe- troleum is bought direct by small refiners who often pay a premium on the posted price because of the limited quantities they are prepared to take. At times of over- production in a given field, however, the small refiners may occasionally be able to buy at less than the posted price. The posted prices of two of the leading grades of petro- PETROLEUM AND PRODUCTS 123 leum are shown for each month from 1913 to 1921 in Table F. TABLE F WHOLESALE PRICES OF CRUDE PETROLEUM AT WELLS FOR AVAILABLE DATE NEAREST THE FIFTEENTH OF EACH MONTH, 1913-21, IN DOLLARS PER BARREL OF 42 GALLONS Month 1913 1914 1915 1916 1917 1918 1919 1920 1921 Pennsylvania January .... 2.05 2.50 1.50 2.25 3.05 3.75 4.00 5.00 5.75 February .... 2.50 2.50 1.50 2.35 3.05 4.00 4.00 5.50 3.75 March .... 2.50 2.50 1.45 2.50 3.05 4.00 4.00 6.10 3.00 April .... 2.50 2.50 1.35 2.60 3.05 4.00 4.00 6.10 3.00 May .... 2.50 1.90 1.35 2.60 3.10 4.00 4.00 6.10 3.50 June .... 2.50 1.80 1.35 2.60 3.10 4.00 4.00 6.10 2.75 July .... 2.50 1.70 1.35 2.60 3.10 4.00 4.00 6.10 2.25 August .... 2.50 1.55 1.45 2.30 3.25 4.00 4.00 6.10 2.25 September. .... 2.50 1.45 1.65 2.30 3.50 4.00 4.25 6.10 2.25 October .... 2.50 1.45 1.75 2.50 3.50 4.00 4.25 6.10 3.25 November .... 2.50 1.45 1.90 2.60 3.50 4.00 4.50 6.10 4.00 December .... 2.50 1.45 2.10 2.75 3.75 4.00 4.50 6.10 4.00 Kansas-Oklahoma January. . .83 1.03 .55 1.20 1.70 2.00 2.25 3.00 3.50 February 88 1.05 .40 1.30 1.70 2.00 2.25 3.00 1.75 March 88 1.05 .40 1.55 1.70 2.00 2.25 3.50 1.75 April 88 .85 .401.551.702.252.253.501.75 May 88 .75 .401.551.702.252.253.501.50 June 88 .75 .401.551.702.252.253.501.25 July 93 .75 . 40 1.55 1.70 2.25 2.25 3.50 1.00 August 98 .75 .60 .951.902.252.253.501.00 September 1.03 .65 .80 .902.002.252.253.501.00 October 1.03 .55 .80 .902.002.252.253.501.50 November 1.03 .551.00 .902.002.252.253.502.00 December 1.03 .55 1.20 1.10 2.00 2.25 2.50 3.50 2.00 The depression of prices in the second half of 1914 and through 1915, shown in the table, was a reflection of the great overproduction brought about by the development of the Gushing pool. With the abrupt decline in the out- put of the Gushing pool toward the end of 1915 and the increased demand which followed, the price rose until in 1920 it reached $6.10 a barrel for Pennsylvania crude and i2 4 SOME GREAT COMMODITIES $3.50 for Kansas-Oklahoma crude. The posted prices slumped in 1921 but in the latter part of October and the first part of November were advanced to $4.00 for Penn- sylvania and $2.00 for Kansas-Oklahoma crude in spite of ever-accumulating stocks. Oil is carried from the producers' field tanks to the re- fineries or to storage tanks by pipe lines, a relatively small amount being transported in tank cars. As the refineries are located in places convenient to the markets for their products the pipe lines are often hundreds of miles in length. In fact, the pipe-line system, including trunk lines and branches, forms a vast invisible network extending thousands of miles. The steel pipes are laid near the sur- face of the ground and the main lines are generally eight inches in diameter. A pumping station which maintains the flow of the oil is located on an average of every 40 miles, although the distances vary greatly, depending on the quantity and grade of the oil, topography of the country, etc. Beginning with four miles of iron pipe laid down in western Pennsylvania at the close of the Civil War, these lines have gradually been extended to reach pool after pool and field after field as they were opened up. No lines extend eastward from the California or Rocky Moun- tain fields but the Mid-Continent, Illinois, Lima-Indiana and Appalachian fields all send their oil to the Atlantic seaboard by this vast transportation system. Lines also run from the Mid-Continent and Gulf fields to the Gulf ports whence shipments are made by tank steamers. The pipe lines are common carriers although the bulk of their business consists in carrying oil for the particular refining companies that own or control them. PETROLEUM AND PRODUCTS 125 The importance of refining to the petroleum industry is brought out in Table E, which shows that from 1917 to 1920 somewhat over four-fifths of the crude oil sup- ply in the United States was taken by the refineries. That the proportion was less in 1921 was due to the fail- ure of the demand for petroleum products to keep pace with the supply of crude oil. REFINED PETROLEUM PRODUCTS The products obtained in the course of refining depend upon the quality of crude oil and to some extent upon the completeness of the equipment of the refinery. From the better grades of oil four major "fractions" are dis- tilled; namely, gasoline, which includes all the lighter products, kerosene, gas and fuel oil, and lubricating oils. These fractions or distillates are driven off successively by heating the crude oil to different degrees, the lighter products passing off at the lower temperatures. Poorer grades of oil may be treated only to remove gasoline, which interferes with the use of the crude as fuel as well as being too valuable to waste in that way. Other grades are separated into three products: gasoline, kerosene and fuel oil. After the simple distillation the fractions are often sub- jected to complicated methods of purification and adap- tion to particular needs. The gasoline fraction may be further distilled into light, intermediate and heavy prod- ucts. These are purified by treatment with sulphuric acid and other chemicals and finally may be distilled or filtered through fullers' earth. The more volatile products include petroleum ether and gasoline used in aviation; intermediate naphtha is ordinary commercial gasoline 126 SOME GREAT COMMODITIES chiefly used for automobiles; and heavy naphtha com- prises benzine, cleaners' naphtha, and varnish makers' and painters' naphtha. Kerosene distillate is ordinarily distilled a second time principally to remove all traces of gasoline. It is further treated chemically to purify it for its use as a lamp oil. Gas and fuel oil is generally marketed without further treatment, the gas oil being used in conjunction with coal or alone for the manufacture of city gas. Fuel oil is widely used as a substitute for coal in steam raising, espe- cially on locomotives, in industrial plants and on steam- ships. By special "cracking" processes, by which the gas and fuel oil is heated under pressure, considerable quantities of gasoline are often obtained from this fraction also. The fourth fraction contains lubricating oils, greases and paraffin wax. The paraffin is separated from the rest of this distillate by chilling it so that the wax solidifies, and can be removed by filtering. Petrolatum, also known as "vaseline," is obtained from this fraction. Petroleum coke and asphalt are obtained chiefly from the heavier oils coming from Mexico and California. They form the residue after gasoline, kerosene and fuel oil are removed. In addition to these leading products there are many special products of petroleum manufactured by particular methods to adapt them to special needs. Table G shows the percentages of the principal refined products obtained from the crude petroleum run to refin- ery stills in the United States in the years from 1918 to 1921. PETROLEUM AND PRODUCTS 127 TABLE G PERCENTAGE OF REFINED PRODUCTS OBTAINED FROM CRUDE PETROLEUM RUN TO STILLS IN THE UNITED STATES Product 1918 1919 1920 1921 Gasoline 26 26 27 28 Kerosene 13 15 13 10 Gas and fuel 9 il 54 50 48 52 Lubricating oil 6 6 6 5 Other products, losses, etc 6^ 5 Total 100 100 100 100 To some extent changes in the proportion of the different products obtained probably reflect changes in the average quality of the crude oil refined, but they are governed chiefly by changes in the demand for the different products and by improvements in refining methods. Increased cracking of fuel oil and use of natural gas gasoline and the classification of more of the volatile part of the kerosene distillate as gasoline account for the gain in the propor- tional yield of gasoline in 1920 and 1921 which was in re- sponse to the increased demand for use in gasoline motors. The production of petroleum products together with the stocks at the close of the year has been reported for each year since 1916 by the United States Bureau of Mines. These figures when taken in conjunction with those for exports indicate the domestic consumption of each prod- uct. Table H shows these statistics from 1916 to 1921. The quantity of crude oil run to stills is also shown. Eighty-eight per cent, of the gasoline produced at the refineries in 1921 was consumed in the United States, 10 per cent, was exported and 2 per cent, was added to stocks. This compared with 87 per cent, consumed in 1920, 13 per cent, exported and less than i per cent, added to stocks. Although exports were relatively more important in the case of kerosene than in respect to any of the other prod- 128 SOME GREAT COMMODITIES TABLE H REFINERY STATISTICS OF PETROLEUM PRODUCTS IN THE CONTINENTAL UNITED STATES Item 1916 1917 1918 1919 1920 (in millions of gallons) 1921 Crude oil run to stills 10,374 13,236 13,693 15,184 18,224 18,621 Gasoline Production 1 2,059 2,850 3,570 3,958 4,882 5,154 Consumption 1 2 2,346 3,129 3,435 4,251 4,516 Net exports 364 419 556 373 616 514 Stocks at end of year 1 ... 327 412 297 447 462 586 Kerosene Production 1,455 1,727 1,825 2,342 2,320 1,945 Consumption 3 2 1,042 1,447 1,394 1,389 1,240 Exports 3 859 664 496 989 877 757 Stocks at end of year .... 477 498 380 339 393 341 Gas and fuel oil Production 4,664 6,513 7,321 7,627 8,861 9,664 Consumption 3 2 5,280 5,718 6,290 6,705 7,080 Exports 34 1,195 1,376 1,522 1,282 2,033 2,090 Stocks at end of year 721 578 659 714 837 1,331 Lubricating oil Production 625 754 841 847 1,047 878 Consumption 3 2 2 580 571 619 531 Exports 3 262 282 259 277 405 291 Stocks at end of year 137 139 138 161 217 *Not including gasoline made from natural gas except that bought by refineries. *Not available. 'Figures for these items take no account of the relatively small amounts of imports re- tained for consumption, figures for which were not reported separately. 'Includes fuel or bunker oil laden on vessels engaged in the foreign trade and in the case of shipments to Alaska, Hawaii and Porto Rico, shipments of residuum from refining. ucts, about three-fifths of the production were consumed at home both in 1920 and 1921. In both years nearly two-fifths were exported. In 1920 stocks increased 16 per cent., but in 1921 there was a slight decline. Produc- tion showed decreases in each of the years. Industrial and shipping activity failed to keep pace with the production of gas and fuel oil and lubricants in 1920 and 1921. Thus, while there was an absolute gain in the use of both products in 1920 over 1919, the consump- tion of gas and fuel oil fell from 82 to 76 per cent, of pro- PETROLEUM AND PRODUCTS 129 duction, and the use of lubricating oil fell from 67 to 59 per cent. In 1921 consumption of gas and fuel oil still showed a gain, but only 73 per cent, of the increased pro- duction was used. The production of lubricants declined at about the same rate as the use. Exports of gas and fuel oil were well maintained in proportion to production, but exports of lubricants decreased from 39 per cent, of production in 1920 to 33 per cent, in 1921. The accompanying chart shows the movement of the stocks of petroleum products by months from July, 1917, to December, 1921. As the curves are drawn on a semi- logarithmic scale their trends can be compared directly without regard to their relative positions on the chart. The seasonal movement in gasoline and the piling up of stocks of gas and fuel oil and lubricating oil in 1921 are strikingly shown. Production figures extending back to 1880 may be ob- *asr ^ t V \ Stocks of Petroleum Products Held at Refineries in the United States at the Close of Each Month from July, 1917, to December, 1921 130 SOME GREAT COMMODITIES tained from the records of the United States Bureau of the Census. Varying terms were used to designate the products from time to time, but in Table I the figures are shown divided as nearly as possible into the classifica- tion adopted by the United States Bureau of Mines. "Gasoline" includes naphtha and all the lighter products of distillation, the term "kerosene" is used in place of "illuminating oils", while "lubricants" includes paraffin oil, red or neutral oils, cylinder oils, other lubricating oils and greases. The amount of crude petroleum consumed by refineries in each of the census years is also shown. Comparison of Table I with Table H shows a disagree- ment between the two government bureaus as to the opera- tion of refineries in 1919. They are, however, essentially in agreement as to the proportions of the different pro- ducts obtained from the crude oil. TABLE I PRODUCTION OF PETROLEUM PRODUCTS IN THE UNITED STATES FROM 1880 TO 1919 AS REPORTED BY THE UNITED STATES BUREAU OF THE CENSUS Year petroleum Gasoline^ Kerosene SMP!^? Lubricants run to stills (in millions of gallons) 1880 732 75 2 551 19 1889 1,288 165 3 848 99 1899 2,184 281 1,259 305 199 1904 2,813 291 1,357 360 325 1909.. 5,073 540 1,675 1,702 544 1914... 8,033 1,460 1,935 3,734 532 1919 15,341 4,206 2,305 7,768 850 *Not including gasoline made from natural gas except that bought by refineries. ^Reported as "illuminating oils" but probably includes some gas and fuel oil. 'Reported as "burning oils." KEROSENE The first half century of the growth of the petroleum industry was characterized by a demand chiefly for illumi- PETROLEUM AND PRODUCTS 131 nating oil or kerosene. This product quickly displaced an illuminating oil originally obtained by the distillation of coal, which had been known as "coal oil." It likewise took the place of whale oil and other fats which had had wide use as illuminants. Even to-day it is the chief source of artificial light in districts not served with gas or electric- ity. As new uses for the other constituents of crude oil developed, however, illuminating oil has been relatively of decreasing importance. Much of the oil which would now be classed as fuel oil was evidently used for illumi- nating in the years preceding 1909. Since there was little demand for gasoline in these years as much as possible was left with the kerosene, while considerable quantities were used for lighting by means of special burners. In recent years much kerosene has been made to serve as a motor fuel. With the growing demand for gasoline increasing fractions of potential kerosene have been drawn into the gasoline supply. Kerosene engines on tractors and motor trucks also add to the consumption of kerosene for motive power. An export trade of large dimensions was an early de- velopment of the industry. In 1880 exports of illuminat- ing oil amounted to 286,131,000 gallons. In this and the following years for which production statistics are availa- ble, until 1917, over half of the American production was exported. Since 1917 the importance of the export trade has declined somewhat. The quantity of exports has likewise been decreasing since 1919. Shipments of kerosene are made to practically every country in the world. A short list of countries will suffice, however, to show the destination of the bulk of the exports. Table J shows the exports of kerosene from the United 132 SOME GREAT COMMODITIES States to foreign countries in the years from 1910 to 1914 and 1919, 1920 and 1921, by the principal countries of destination in each of these periods. Exports to Alaska, Hawaii and Porto Rico are not included. Although of considerable importance they were not nearly so large as the shipments to the countries shown separately in the table. TABLE J EXPORTS OF KEROSENE FROM THE UNITED STATES TO FOREIGN COUNTRIES Country United Kingdom. Netherlands Germany China Japan Belgium France British India. . . . Other countries . . U910-14 (5-yr. aver.) 21919 21920 1921 (in thousands of gallons) 178,288 166,630 173,595 123,526 129,695 45,530 58,224 61,162 106,808 15,193 24,930 14,759 81,235 164,366 116,407 108,048 80,221 31,700 41,236 18,638 50,960 17,594 22,723 21,225 48,267 82,400 83,365 57,181 42,263 56,608 44,820 38,474 337,776 399,134 305,365 305,946 Total 1,055,513 979,155 870,665 748,959 ^Fiscal years ending June 30. ^Calendar year. GASOLINE In the early years of the refinery industry gasoline formed from 10 to 13 per cent, of the petroleum refined. Between 1909 and 1914, however, the proportion increased from ii to 1 8 per cent, in response to the growing demands for its use in internal-combustion engines. At this time gasoline replaced kerosene as the most valuable product of crude petroleum and since then the principal concern of the refineries has been to obtain as large a fraction of gasoline as possible. In 1916 and 1917 gasoline was 20 and 22 per cent, respectively of the crude run to stills, PETROLEUM AND PRODUCTS 133 while in 1918 and 1919, due to additional production of cracked gasoline, it formed 26 per cent, of the crude. In 1920 it was 27 per cent, and in 1921, 28 per cent, of the crude oil distilled. Not all the gasoline produced in refineries is obtained by the distillation of crude petroleum, however. Casing- head gasoline, otherwise known as natural gas gasoline or natural gasoline, made from natural gas, is bought by refineries to add to the volatility of the gasoline refined from oil. In 1918, 1919 and 1920 the gasoline thus pur- chased constituted 3 per cent, of the gasoline output of the refineries. Allowing for the casinghead gasoline in the refinery output, gasoline from distillation alone made up 25 per cent, of the crude oil run in 1918 and 1919 and 26 per cent, in 1920. Later figures are not yet available. Gasoline is obtained from natural gas either by conden- sation or by absorption. The absorption process involves the dissolving of the gas in an oil heavier than gasoline and then recovering by distillation the gasoline that has been absorbed. The casinghead gasoline industry has had a remarkable development since its establishment on a commercial scale about 1909. The first report of the quantity produced was for the year 1911 when 7,426,0x30 gallons were obtained. By 1916, five years later, the production was 103,493,000 gallons. In 1920 it was 384,744,000 and in 1921 473,659,000 gallons. The total net output of gasoline from all sources in the United States in 1914 was 1,500,204,000 gallons; in 1918 it was 3,749,892,000 gallons; in 1919 it was 4,185,207,000 gallons; and in 1920 it was 5,134,868,000 gallons. Figures for other years are not available. The principal countries to which the United States ex- 134 SOME GREAT COMMODITIES ports gasoline are shown in Table K together with the amount shipped to each from 1910 to 1914 and in 1919, 1920 and 1921. The increase in the exports in recent years has been very marked, especially in the case of the United Kingdom, France, Italy, Australia and New Zealand. TABLE K EXPORTS OF GASOLINE FROM THE UNITED STATES TO FOREIGN COUNTRIES Country 21919 1920 '1921 (in thousands of gallons) Canada United Kingdom. France Argentina Germany Netherlands Italy Belgium Australia Brazil New Zealand Sweden Spain Other countries . . Total. 1910-14 (5-yr. aver. 33,316 24,866 17,223 12,025 11,057 9,385 6,811 6,105 5,577 4,567 3,702 1,296 26 11,376 147,332 372,133 641,310 533,090 31,245 54,637 43,886 112,203 146,954 149,059 74,810 180,554 95,362 16,008 18,464 25,789 4,230 17,060 13,244 4,683 4,720 14,280 24,300 33,437 15,011 4,616 12,072 16,509 11,987 13,664 20,651 9,038 13,070 13,809 8,513 19,447 19,411 4,830 16,376 8,923 3,581 11,664 16,056 62,089 99,191 81,100 fiscal years ending June 30. Calendar year. GAS AND FUEL OIL Although petroleum and its products were doubtless used for fuel from the very beginning of the industry, fuel oil was first reported as a distinct refinery product in the census for 1899 when it formed 14 per cent, of the crude run to stills. Since 1914, however, gas and fuel oil has constituted about one-half of the crude refined. Gas oil, which is classified with fuel oil, is a high grade of fuel oil which is used principally by public utilities for the manu- facture of gas for illuminating and heating purposes. PETROLEUM AND PRODUCTS 135 Fuel oil competes with coal. It is used extensively in the southwestern and western portions of the United States where coal is lacking, and its industrial use has even penetrated into the northeastern section. Although special devices are necessary to burn fuel oil the labor- saving in stoking and in avoiding the removal of ashes, added to the cleanliness of its use and the reduction in space required for storage, frequently are considered sufficient to offset the cost of installation and a somewhat higher unit cost than for coal. Because of the saving in bunker space and the ease of handling it fuel oil has come into wide use on shipboard. Time spent in port is greatly reduced with oil-burning ships, thus enabling them to make more voyages per year. Approximately three-fourths of the United States Ship- ping Board ships in operation in 1921 were oil burners. Fuel oil stations have been established at strategic ports on the established trade routes of the world and it will soon be possible, if it is not already so, for ships to circle the globe wholly by means of fuel obtained at these stations. It is estimated that the normal minimum requirements of the Shipping Board ships alone amount to 30,000,000 barrels. The fuel oil laden at ports of the United States on vessels engaged in foreign trade was reported first for the fiscal year 1915, when 2,898,000 barrels were so used. This increased to 5,908,000 barrels in the calender year 1917 and 6,603,000 in 1918. In 1919 there was a very marked increase to 14,031,000 barrels, and in 1920 to 26,335,000 barrels. During 1921, 27,076,000 barrels were furnished to vessels in foreign trade. These gains were all the more striking since the use of coal showed little change be- tween 1916 and 1921. 136 SOME GREAT COMMODITIES Railroads used 37,763,000 barrels of fuel oil in 1919, the latest date for which figures are available, and in the fiscal year ending June 30, 1921, the United States Navy con- sumed 6,689,000 barrels. Moreover, in 1918 239,000,000 gallons or 5,690,000 barrels of crude petroleum were used on producing properties, chiefly in the California and Gulf fields, as fuel for drilling and pumping. During the coal strike in Great Britain, manufacturers, hotels and railroads there turned to the use of fuel oil even though handicapped by lack of equipment for storing and burning the oil, the long haul from producing centers (chiefly the United States, Mexico and Trinidad) and the scarcity of railway tank cars for transportation from the ports to interior points. Since the settlement of the strike many of these firms have returned to the use of coal, but there are still some, especially food manufacturers and hotels where cleanliness is especially valuable, which find it economical to continue the use of oil. The exports of gas and fuel oil from the United States go mainly to industrial countries which do not have suf- ficient local fuel for their needs or to countries like Chile, Panama and the Philippine Islands which serve as impor- tant fueling stations for ships. The shipments of gas and fuel oil to the leading countries to which the United States exported before the war and in 1919, 1920 and 1921 are shown in Table L. The two-year period 1913-14 is taken as representative of pre-war conditions since exports of gas and fuel oil were not separately reported for earlier years. LUBRICANTS Lubricants constitute the smallest of the four principal fractions distilled from petroleum, making up only 5 Country United Kingdom. 11913-14 (2-yr. aver.) 162,192 Canada. 79,928 Chile. . 67,905 Panama 34,313 Netherlands 10,072 Italy. . 6,445 France 2,977 Egypt . 869 Mexico. 724 French Africa 571 Philippine Islands 10 Other countries 31,831 Total 397,837 Bunker, vessels in foreign trade 3 Grand total. . 3 217,929 304,729 187,420 105,700 55,272 24,188 20,558 19,615 50,673 36,887 55,461 29,729 40,361 52,758 17,626 2,330 20,559 45,826 8,330 35,661 23,163 17,797 130,242 169,841 827,594 845,061 PETROLEUM AND PRODUCTS TABLE L EXPORTS OF GAS AND FUEL OIL FROM THE UNITED STATES TO FOREIGN COUNTRIES 1919 1920 1921 (in thousands of gallons) 197,279 133,041 41,677 12,171 25,418 31,374 8,918 3,494 16,825 7,622 107,031 584,850 589,317 1,106,065 1,137,198 1,174,167 1,933,659 1,982,259 iFiscal years ending June 30. ^Calendar year. 'Bunker oil not reported. In fiscal year 1915 shipments were 121,733,000 gallons. per cent, of the total crude oil run to stills. The percent- age, however, varies widely in different sections of the country in accordance with the types of crude distilled. Lubricating oils and greases were 18 per cent, of the crude run in the Pennsylvania district in 1921, but only i per cent, of that run in Louisiana and Arkansas. The East Coast district, including New York, Philadelphia and Baltimore, which treats Mexican crude as well as oils from various fields of the United States, obtained 6 per cent, of lubricants from the oil refined in 1921. As this was the second largest proportion obtained, the preemi- nence of Pennsylvania crude as a source for lubricants is apparent. Despite the relatively small quantities of lubricants pro- duced the United States regularly exports about a third 138 SOME GREAT COMMODITIES of its output. Lubricants thus rank second to kerosene in the relative proportion of production exported. Table M shows the amount of lubricating oil exported to the chief foreign customers in the years from 1910 to 1914 and in 1919, 1920 and 1921. Lubricants were sent primarily to industrial countries lacking sufficient supplies of their own but shipments were made to almost every country in the world. TABLE M EXPORTS OF LUBRICATING OIL FROM THE UNITED STATES TO FOREIGN COUNTRIES Country *1919 *1920 United Kingdom. France Germany Netherlands Belgium Italy British India. . . . Argentina Sweden Other countries . . Total. . U910-14 (5-yr. aver.) (in thousands of gallons) 58,046 23,046 22,861 11,524 11,482 8,185 8,074 4,207 1,550 42,376 1921 191,351 69,889 118,908 61,181 42,510 65,940 38,781 8,194 34,530 50,168 10,561 7,008 4,446 19,285 27,031 20,624 13,958 22,931 20,478 9,376 9,374 10,275 6,495 10,094 7,923 8,805 10,300 2,383 85,722 96,005 73,058 274J95 402,121 289,317 fiscal years ending June 30. "Calendar year. Although exports of all petroleum products except gas and fuel oil fell off in 1921 as compared with 1920 the de- cline was most marked in exports of lubricants. The largest decreases were in shipments to the United Kingdom and France, but there were declines in the exports to all parts of the world except British India and Germany. Increased exports to Germany reflected in part the im- portation of lubricants into Germany in bulk for reex- portation in suitable containers, as well as increased in- dustrial activity in that country. The general falling off PETROLEUM AND PRODUCTS 139 of exports and the decrease in domestic consumption of lubricants were a measure of the world-wide industrial depression. The outstanding features in the markets for each of the principal petroleum products in 1921 were the increased production of gasoline to keep pace with the gain in con- sumption, the curtailed output of kerosene, the increased production of gas and fuel oil, and the decrease in the ex- ports of lubricating oil. RUBBER KIBBER was among the many substances dis- covered with the New World. Columbus and the Spanish and Portuguese missionaries who fol- lowed him reported a new material which they found the natives using for balls, ornaments, waterproof shoes and other clothing. Scientific studies of rubber were not undertaken, however, until French interest was aroused by specimens gathered by La Condamine in Ecuador in the first half of the eighteenth century, but in the latter half of the century many experiments were carried on in Great Britain and the United States as well as in France. At some time between 1770 and 1780 Joseph Priestly, the English chemist, discovering that rubber would erase pencil marks, gave it its English name from this property. In 1832 Ludersdorf found that sulphur added to a solution of crude rubber in turpentine rendered it non-adhesive. Seven years later Charles Goodyear discovered quite by accident that when heated to a high temperature such a solution changed the characteristics of the rubber from a sticky unstable material to the vulcanized rubber as it is known to-day. Although rubber-waterproofed garments and shoes had been made in Europe prior to this time, the vulcanization of rubber made it available for many additional uses. Rubber hose was originated by Charles Macintosh and Thomas Hancock of London. A patent on rubber tires 140 RUBBER 141 was taken out by Robert William Thompson in 1845, which was followed forty-three years later by a patent granted to Dunlop on a pneumatic rubber tire. To-day, from erasers to balloon fabrics and from spectacle frames to street paving, the uses of rubber are countless and are ever increasing. The United States consumes about two-thirds of the world's rubber, but except for a relatively small amount grown in the Philippines, produces none. Until 1913 Brazil was the chief source of rubber. Since then, how- ever, the cultivated trees in the Far East have come into bearing so that now the plantations furnish nine-tenths of the supply. Great Britain, through ownership either of the plantations or of the territories where estates are located, controls about four-fifths of the plantation output. Rubber plantations date from 1876, when a quantity of the seeds of the Hevea braziliensis was taken from Brazil to the botanical gardens at Kew, England, sprouted there, and later in the same year shipped to Ceylon. Most of the rubber trees which have spread throughout the East Indies owe their origin to these seeds, though rubber is also obtained from a number of other types of trees. India rubber is obtained from the latex or white milky fluid secured from rubber trees by a variety of methods of tapping. Different methods, also, are used to coagulate the rubber. In South America the rubber is ordinarily prepared by dipping a paddle in the fluid and turning it in the smoke from the burning of oily palm nuts. Planta- tion latex, on the other hand, is usually placed in large vats and acetic acid or lime juice is added. The rubber, separated in a spongy mass, is washed, dried, cut up and passed between rollers from which it issues in the form of 142 SOME GREAT COMMODITIES sheets or crepe. As a consequence of the more careful handling plantation rubber comes on the market contain- ing only about 3 per cent, moisture, dirt and other foreign matter, while the native rubber sometimes averages as much as 25 per cent, foreign matter. Nevertheless, the native Para rubber is considered superior to the plantation product and is preferred for many uses. Table A, which was compiled from figures published by W. H. Rickinson & Son of London, summarizes the world's rubber production from 1900 to 1921. The part played by plantation rubber in bringing about the remarkable increase in production from 53,890 gross tons in 1900 to 293,960 tons in 1921 is clearly shown by these figures. TABLE A WORLD PRODUCTION OF CRUDE RUBBER Plantation Brazil 1900. 1901. 1902. 1903. 1904. 1905. 1906. 1907. 1908. 1909. 1910. 1911. 1912. 1913. 1914. 1915. 1916. 1917. 1918. 1919. 1920. Native areas other than Total Brazilian (amounts are in gross tons) 4 26,750 5 30,300 8 28,700 21 31,100 43 30,000 145 35,000 510 36,000 1,000 38,000 1,800 39,000 3,600 42,000 8,200 40,800 14,419 37,730 28,518 42,410 47,618 39,370 71,380 37,000 107,867 37,220 152,650 36,500 213,070 39,370 255,950 30,700 , . . . 285,225 34,285 304,816 30,790 1921 271,233 19,837 iLess than 1 per cent. 27,136 53,890 24,545 54,850 23,632 52,340 24,829 55,950 32,077 62,120 27,000 62,145 29,700 66,210 30,000 69,000 24,600 65,400 24,000 69,600 21,500 70,500 23,000 75,149 28,000 98,928 21,452 108,440 12,000 120,380 13,615 158,702 12,448 201,598 13,258 265,698 9,929 296,579 7,350 326,860 8,125 343,731 2,890 293,960 Per cent plantation 1 1 3 5 12 19 29 44 59 68 76 80 86 87 89 92 RUBBER 143 PLANTATION RUBBER Twenty years ago practically all rubber in commercial use was what is known as "wild" rubber. It was pro- duced from native trees and vines of the tropical forests of South and Central America, East and West Africa and Asia. The development of the remarkably efficient plan- tations, however, has rendered cultivated rubber trees the dominant factor in the rubber supply. The best estates are in the Federated Malay States and on the east coast of Sumatra. Undertakings in Borneo also are very productive. Java, on account of its periodic and sometimes prolonged droughts, is less well suited to rubber production. Ceylon, which is now cultivated al- most to the limit, lacks the soil fertility of these other regions because of the cultivation of other crops there for years before the rubber tree was introduced. South India is still less adapted to rubber growing since it com- bines the handicaps of unreliable climate and partially exhausted soil. Nevertheless, in the Dutch East Indies, Ceylon and South India crops other than rubber are grown on the estates and by this means the cost of rubber pro- duction is reduced to a minimum. Table B shows the location and acreage of the rubber plantations on January i, 1920, together with the produc- tion and the yield per acre in 1920. It is to be noted that the production figures, being from an independent source, are 10 per cent, above the estimate shown in Table A for the same year. The table was prepared by a Royal Trade Commission that recently presented its report to the governor of the Straits Settlements. The high yield per acre accredited to Ceylon is probably to be at- 144 SOME GREAT COMMODITIES tributed chiefly to the age of the trees on plantations there. TABLE B LOCATION AND AREA OF RUBBER PLANTATIONS ON JANUARY 1, 1920, AND PRODUCTION IN 1920 Country Malaya Area planted (acres) 1,750,000 Area in bearing (acres) 1,250,000 Production (gross tons) 193,000 Yield per acre in bearing (pounds) 346 Dutch East Indies Ceylon . 885,000 398,000 570,000 267,000 85,000 42,000 334 352 South India. 65,000 43,000] Burma 45,000 17,500 7,000 259 Borneo and Sarawak. . . Other countries. 50,000 130,000 30,000 j 60,000 8,000 199 Total. . 3,323.000 2,237,500 335,000 335 Next to the British, the Dutch, who own nearly one- seventh of the plantation acreage, are the principal rubber growers. The French and the Belgians also have exten- sive holdings, and in recent years American rubber manu- facturers have entered the field, so that now they own about 3 per cent, of the total acreage. Of the American estates, 157,000 acres are in Sumatra and 2,000 acres are in Java, 46,200 acres being planted and in bearing, 22,800 planted but not yet in bearing, and 90,000 being held in reserve. A rubber tree begins to produce when about five years old and between the fifth and eighth years the annual pro- duction increases from three to four-fold. Although there probably is a limit to the productive power, experience has not yet demonstrated it. Apparently each year brings an increased yield. Conservative estimates place the ul- timate annual production likely to be attained at 350 pounds an acre. Due to the lapse of five years between the planting of RUBBER 145 the trees and their coming into bearing it is possible from estimates of plantings through 1921 to approximate the acreage of the rubber plantations in bearing up to the end of 1926. As no estimates are available as to the abandon- ment of acreage due to conditions brought about by the overproduction of rubber, no allowance can be made for decreases on account of this factor. Table C has been compiled from figures published by W. H. Rickinson & Son, and shows the acreage of plantation rubber trees in bearing at the close of each year from 1910 to 1926, planta- tion rubber production and yield per acre from 1910 to 1921 and estimated production at an assumed yield of 300 pounds per acre from 1922 to 1926. The table shows the extent to which production was curtailed in 1921 to meet the economic conditions which developed in that year. Estimates of future output are a measure of the rubber which might readily be obtained should the need arise, rather than forecasts of the amount which will ac- tually be produced. In fact, if demand becomes insistent the yield may be considerably greater than the estimates shown. PRINCIPAL RUBBER-CONSUMING COUNTRIES Although crude rubber, whether produced in South or Central America, Africa or the East Indies, is distinctly a product of the tropics, it is manufactured principally in North America and Europe. Much of the rubber is shipped directly to the United States, the chief user, but considerable quantities are sent also to the United King- dom, the Netherlands and other European countries which act as distributing centers. During 1919 and 1920 stocks of raw rubber accumulated in the United States, in the Far 146 SOME GREAT COMMODITIES East and in England far beyond current needs. In the second half of 1919 and the first half of 1920 imports into the United States were very heavy, while shipments re- tained in Great Britain were relatively light. In the second half of 1920 and the first half of 1921, on the other hand, the TABLE C ACREAGE AND PRODUCTION OF PLANTATION RUBBER Year 1910. 1911. 1912. 1913. 1914. 1915. 1916. 1917. 1918. 1919. 1920. 1921. 1922. 1923. 1924. 1925. 1926. Acres in bearing Gross tons pro- Pounds at close of year duced during produced per year acre in bearing 116,500 8,200 158 294,200 14,419 110 506,550 28,518 126 687,350 47,618 155 861,150 71,380 186 1,122,550 107,867 215 1,505,350 152,650 227 1,817,350 213,070 263 2,021,750 255,950 284 2,181,050 285,225 293 2,293,750 304,816 298 12,458,950 271,233 1247 12,611,350 2 349,734 2 300 12,759,950 2 369,636 2 300 12,910,750 2 389,833 2 300 13,020,750 2 404,565 2 300 13,069,750 2 411,127 2 300 *No allowance made for abandonment of acreage. 'Estimated. United States reduced its imports. As a consequence stocks in London and the six recognized public warehouses in Liverpool increased from 27,744 gross tons at the end of July, 1920, to 82,844 tons on August 31, 1921. Produc- tion was greatly curtailed on the plantations, and raw rubber was even used as fuel. The latter part of 1921 showed increased imports into the United States, decreases in the stocks in Great Britain, and a moderate rise in prices for crude rubber. Because of such changes in conditions the quantities of raw rubber retained by various countries RUBBER 147 give but a poor indication of the rubber consumption of those countries in any particular year. Nevertheless, the relative position of a country as a consumer of crude rub- ber can be approximated by its net imports over a period of years; that is, by its imports of rubber minus its exports. Table D, which was compiled mostly from official sources, shows the net imports of crude rubber into the chief con- suming countries from 1913 to 1920. Australia, which is not included in the table, imported about 3,000 tons in 1920. Later figures are not available. It should be recognized that the figures in Table D are not altogether comparable. Those for the United States relate to crude india rubber only, while those for the United Kingdom, as noted in the table, include reclaimed and waste rubber in the returns for 1913 and 1914, but for later years relate exclusively to crude rubber. Most of the countries on the continent of Europe, as well as Canada and Japan, combine figures for the trade in gutta- percha with those for the trade in india rubber. It is likely, moreover, that the commerce in the related sub- stances, balata, guayule and jelutong, which is stated separately in the trade reports of the United States, is re- ported in combination with that of india rubber in the statistics of other countries. Net imports of india rubber into the United States in 1921 were 69,000 tons less than in 1920 but were over four times as large as the net imports into the United Kingdom, the next largest importer. They were 61 per cent, of the total estimated production in 1921 as compared with 72 per cent, in 1920. The sources of the rubber imported into the United States in the calendar years 1919, 1920 and 1921, as com- i 4 8 SOME GREAT COMMODITIES *H {rt rH CO CSJ ^2 OO 00 C^I CO 00 ^H LO O") IO *"* ^H S ^S-H"5 OOC^OOt^-Oi-HO^OOLOTHC^l *> I rH S^SSS O^ H QO tn'rH' tO CO O rH LO t^ O < C^J CM t-H rH rH to O - SJ t^ 1 ^ C" 00 1> tOO rHLO LO'CO fH ! ^ W - ^-.^C.^* 1 " DL i-i tD tO CO C*- ^ 8 rHM rH (S w w 2 ^ I ^oj8 S?: w wWinB ^< LO '"i i I tO 3 rH j CO o G -^ co w . " rH*H^ rH Cs rH C\ rH rHrH W U5 O t^ OO 10 O oi 00 oo lili !~> X *J <" ;is ill. &&! RUBBER 149 pared with the five fiscal years from July i, 1909, to June 30, 1914, are shown in Table E. Of the total, 77 per cent, came directly from the East Indies in 1921, as compared with only 8 per cent, before the war. STABLE E IMPORTS OF INDIA RUBBER Country U910-14 (5-yr. aver.) Brazil United Kingdom British East Indies: British India Straits Settlements. Other... Total British East Indies 17,987 12,829 11 1,870 1,831 INTO THE UNITED STATES *1919 1920 1921 (in gross tons) 26,270 16,510 10,390 26,898 33,615 18,536 2,186 1,579 921 119,328 132,343 97,854 25,640 23,188 20,846 3,712 147,154 157,110 119,621 Germany. Belgium France Netherlands Dutch East Indies. Other countries. . Grand total. 3,244 2,796 1,482 262 59 4,833 642 1,076 1,602 1,178 395 600 261 9,215 27,348 32,310 23,666 9,335 10,738 3,105 47,204 239,259 252,922 185,394 fiscal years ending June 30. *Calendar year. The Rubber Association of America estimates that in all, 93 per cent, of the imports in 1921 were from planta- tions ; 6 per cent, were of the grades known as Paras and Caucho that is, rubber from the Amazon district of Brazil and rubber from Peru; and i per cent, came from Africa. Guayule rubber, derived from the guayule shrub of Mexico; Centrals from Central America; and Manicoba and Matto Grosso rubber from the southern states of Brazil made up less than i per cent, of the total. In 1913 plantation rubber made up 47 per cent, of the imports, Paras and Caucho 36 per cent., Guayule 5 per cent., 150 SOME GREAT COMMODITIES and Africans, Centrals, and Manicoba and Matto Grosso combined, 12 per cent. MANUFACTURES OF RUBBER Although rubber is manufactured into a great variety of different articles, one American concern alone being reported as making nearly 30,000 different products, over two-thirds, and at times over four-fifths, of all the crude rubber consumed in the United States enters into the manufacture of tires and tubes. In the course of rubber manufacturing, reclaimed rubber is utilized in combination with virgin crude rubber to an extent that varies according to the character of the product. Out of 503 questionnaires sent out during the war inquiring as to the quantity of crude and reclaimed rubber used in 1917 for different purposes, 448 replies were received. The results were as summarized in Table F. As the industry was operating under wartime difficulties it is probable that as much reclaimed rubber as practicable was being used. Since the prices of crude rubber later fell to less than one-third of those then prevailing the percentage of reclaimed used more recently may well be lower than in 1917. Reclaimed rubber, however, has a definite place in rubber manufacture. More recent but not so complete information as to the crude rubber used in the industry is available for 1921 through answers to questionnaires covering most of the industry. According to this report tires and tire sundries took 8 1 per cent, of the crude rubber used by the firms replying, mechanical rubber goods 6 per cent., boots and shoes 7 per cent, and other products 6 per cent. The. relative amount of rubber used for tires and tire sundries RUBBER showed an increase from 79 per cent, of the total as re- ported for the preceding year. The same report shows that the amount of crude rubber held by importers, dealers and manufacturers in the United States on December 31, 1921, was about 125,000 TABLE F CONSUMPTION OF RUBBER IN THE UNITED STATES IN 1917 BY ARTICLES PRODUCED Total Crude rubber Reclaimed rubber (amounts are in gross tons) Per cent, crude 91,161 17,144 14,717 5,583 76,336 16,762 11,686 2,815 128,605 107,599 46,121 28,810 11,189 7,843 14,171 12,824 2,684 2,176 3,908 3,328 1,470 3,824 3,732 1,165 1,462 1,800 !35,098 147,613 84 Article Tires and tubes: Automobile pneumatic casings Automobile pneumatic tubes Solid tires Motorcycle and bicycle tires and tire sundries Total Mechanical rubber goods (belting, hose, pack- ing, etc.) Boots and shoes Insulated wire and insulating compounds Waterproof clothing, cloth and sheeting Druggists' and stationers' sundries and surgical rubber goods Hard rubber goods Rubber cement Miscellaneous Grand total tons or nearly eight months' supply at the rate of consump- tion reported for the last half of the year. Four months' supply is regarded as a normal amount of crude rubber in the hands of traders and manufacturers under usual conditions. Since November, 1920, a varying number of manufac- turers have reported their production, shipments and stocks of tires and tubes to the Rubber Association of America. It is stated that the returns received for the later months are considered to cover over 80 per cent, of the industry. The reports for casings and tubes, which accounted for 57 and 16 per cent., respectively, of the rub- ber consumed in 1921, were as shown in Table G. 152 SOME GREAT COMMODITIES TABLE G PRODUCTION, DOMESTIC SHIPMENTS AND STOCKS OF TIRES AND TUBES IN THE UNITED STATES Month 1920 November. December. 1921 January. . . February. . March. . . . June ...... July ...... August. . . . September. October . . . November. December. 1920 November. December. 1921 January. . February. March. April May June July August. .. . September. October. . . November. December. Number of manufacturers reporting 36 43 45 45 46 63 63 66 63 64 64 64 40 43 47 46 48 51 57 60 61 64 62 64 63 64 Production upmesi (000 omitted) shipmer PNEUMATIC CASINGS 650 806 506 1,327 703 965 820 1,074 1,163 1,615 1,651 1,786 2,101 2,086 2,313 2,644 2,571 2,758 3,043 2,894 1,929 2,048 1,928 1,675 1,757 1,343 1,840 1,980 INNER TUBES 743 921 508 1,481 741 1,043 917 1,130 1,346 1,644 1,762 1,984 2,210 2,343 2,360 3,233 3,021 3,603 4,430 3,804 3,275 2,646 2,844 2,016 2,126 1,540 2,070 2,523 Stocks at end of month (000 omitted) 5,880 5,508 5,320 5,193 4,597 4,527 4.452 4,154 3.892 3,935 3,341 3,545 3,908 3,697 6,132 5,787j 5,586 5,415 5,045 4,917 4,752 3,835 3,123 3,649 3,828 4,732 5.204 4.731 The chemistry of rubber manufacture is very compli- cated, since many substances besides rubber enter into rubber products. The development so far reached is for the most part the achievement of the American rubber industry. The process of vulcanization, the basis of all rubber manufacture, calls for the use of sulphur, 2\ to 10 per cent, if soft rubber is to be made, or about 33 \ per cent, if hard rubber is desired. In addition different colors and qualities are obtained by using varying quan- tities of many different compounding ingredients. Raw rubber, especially that from native sources, must be washed to remove the impurities. It is afterward dried ?nd then put into a mixer where the compounding ingredi- RUBBER 153 ents are incorporated with it. The kind of further treat- ment depends upon whether the product is to be molded, hand-made from sheets, or dipped. The material may be shaped like dough and then vulcanized, it may be made into sheets which are later made into the desired articles, or it may be dissolved in benzine or gasoline for use in dipping. Surgeons' gloves, toy balloons and similar articles are made by dipping a form of the proper shape into such a solution. Many of the uses of rubber depend upon its being rein- forced by fabrics. Cotton fabric gives rubber belting its tensile strength and body. The framework of the auto- mobile tire is built up of cotton fabric or cords. Water- proof clothing is made of rubberized fabric. Rubber boots and shoes are made from rubber-coated cloth. The two processes of combining cloth with rubber are known as "frictioning" and "spreading." Frictioning forces the rubber into the cloth, while spreading lays a thin coat of rubber over it. The development of the rubber industry in the United States is far ahead of that in any other country. Conse- quently, the course of the American export trade in rubber goods reflects to a large extent the demand for rubber products throughout the world. The increase in value of products exported in 1920 over previous years was very marked, as was also the falling off in 1921 due to the world- wide industrial depression. The domestic market, however, absorbs the bulk of American rubber products. The latest census of manu- factures, that for 1919, showed that products to the value of $1,138,000,000 were manufactured, but exports in that year were valued at only $53,866,000 or less than 154 SOME GREAT COMMODITIES 5 per cent, of the production. The total value of prod- ucts was estimated at $896,000,000 in 1917 when the value of exports was $34,789,000 or less than 4 per cent, of the output. Table H shows by classes of goods the value of the ex- ports of rubber manufactures from the United States in the calendar years 1919, 1920 and 1921 as compared with the annual average for the five fiscal years from July i, 1909, TABLE H VALUE OF EXPORTS OF MANUFACTURES OF INDIA RUBBER FROM THE UNITED STATES Article U910-14 (5-yr. aver.) 1919 1920 1921 (in thousands of dollars) Automobile tires: Casings 3 3 43,899 13,422 Inner tubes 4313 i >2 32 Solid tires 3,332 1,300 Total.. *3M8 28,925 52,044 15,954 All other tires 4 579 1,557 1,030 359 Boots and shoes: Boots 3 715 1,012 568 Shoes 3 4,551 9,738 2,829 Total.. 1,652 5,266 10,750 3J97 Solesandheels 984 512 Belting, hose and packing: Belting 3 3,532 1,446 Hose.. 3 3 3,341 1,945 Packing 1,525 716 Total 2,284 6,100 8,398 4,107 Druggists' rubber sundries. . 3 1,271 1,891 875 Reclaimed rubber 792 840 829 155 Scrap and old rubber 712 809 788 424 All other rubber manufactures 3,376 9,098 8,723 5,003 Grand total 12,443 53,866 85,437 30,786 ipiscal years ending June 30. ^Calendar year. Not reported separately. Four-year average, 1911-14. RUBBER 155 to June 30, 1914. Over two-fifths of the value of the exports in 1921 was made up by the value of the exports of automobile tire casings, while about one-tenth was com- posed of the value of rubber shoes exported. Changes in the price level were, of course, a factor in the increase of 1919 and 1920 valuations over those for the five-year aver- age, and the decline shown for 1921 as compared with 1920. The value of automobile tire exports showed a larger decline in 1921 as compared with 1920 than the value of the exports of any of the other major rubber products. Much of the decrease was due to the lowered prices for TABLE I VALUE OF EXPORTS OF AUTOMOBILE TIRES FROM THE UNITED STATES Country Belgium Denmark France Germany Netherlands Norway Spain Sweden United Kingdom Canada Mexico Cuba Argentina Brazil British India Straits Settlements. . . Dutch East Indies. . . Australia New Zealand Philippine Islands. . . . British South Africa.. Other countries Total.. U911-14 (4-yr. aver.) 118 7 132 141 1 2 1 25 1,228 847 152 29 11 24 1 2 3 45 20 102 15 142 3,048 21919 21920 1921 (in thousands of dollars) 533 1,279 74 1,254 959 279 3,535 2,369 384 33 577 13 1,044 1,813 112 846 1,430 320 825 1,925 312 1,374 2,619 568 1,509 4,330 3,357 1,021 2,704 1,045 806 1,439 1,365 2,013 3,410 1,362 1,788 3,127 838 1,018 1,965 227 557 1,096 391 636 1,109 112 687 1,713 502 752 1,498 261 1,024 2,256 615 1,373 2,431 657 480 1,778 256 5,817 10,217 2.904 28,925 5^044 1^954 ^Fiscal years ending June 30. Calendar year. i 5 6 SOME GREAT COMMODITIES tires but it is probable also that the number of tires ex- ported to most countries decreased. The values of the automobile tire exports from the United States in the four fiscal years from 1911 to 1914, and in the calendar years 1919, 1920 and 1921 are shown by countries of destina- tion in Table I. The pre-war average is confined to four years because the exports for 1910 were not reported separately. Table J shows the number of pairs of rubber shoes ex- ported from the United States in the fiscal year ending June 30, 1913, and in the calendar years 1919, 1920 and 1921 by principal countries. Rubber shoes were first itemized separately in the official returns for the fiscal year 1913; therefore the statistics for the single year, rather than an average of a number of pre-war years, are shown. TABLE J EXPORTS OF RUBBER SHOES FROM THE UNITED STATES Country Denmark Finland France Germany Norway Turkey in Europe .... United Kingdom Canada Cuba Brazil Japan Australia Other countries Total.. U913 *1919 *1920 *1921 (in pairs) 52,776 500,219 414,933 105,634 48 73,852 448,011 124 54,252 75,281 426,158 7,030 237,409 1,007 17,937 94 28,735 951,146 1,412,739 259,418 109,790 427,887 546,488 36,219 757,404 1,053,842 2,073,418 194,910 82,624 131,222 119,966 33,221 1,386 350,159 1,229,909 292,810 76,031 92,834 269,023 54,153 46,717 393,679 400,880 257,779 340,938 151,673 60,334 8,558 443,357 1,591,687 2,668,715 1,418,900 2,231,467 5,794,488 10,088,511 2,668,850 fiscal year ending June 30. *Calendar year. TREND OF RUBBER PRICES The whole story of the development of the rubber in- dustry is reflected in the price quotations for the crude RUBBER 157 material. The prices of the leading grades of plantation and Para rubber in New York are shown by months from 1913 through 1921 in Table K. The table shows a de- cline in 1913 followed by fluctuating prices with a general trend neither up nor down during the war, a movement which was succeeded in turn by a decline in 1919, becom- ing precipitous in 1920 and the first part of 1921. This movement was followed by a moderate recovery toward the end of 1921. TABLE K WHOLESALE PRICES OF CRUDE RUBBER IN NEW YORK FOR AVAILABLE DATE NEAREST THE FIRST OR FIFTEENTH OF EACH MONTH, 1913 TO 1921, IN CENTS PER POUND Month U913 1914 U915 U916 U917 1918 *1919 1920 21921 January 11 February 104 March April May June July August September. . . . October November. . . . December Plantation First Latex Crgpe 86* 99* 79 57 55 58 56 55* 57 60 63 63 63 63 63 59 63 62* February 104^ 75 60* March 96 58? April 92^ 744 58 May 82^ 60 June 90J 70^ 61 July. 87^ 68 621 August 85^ \ 72 60i September October 77\ 57 57* November 73J 654 56J December. ..... 76j 71 68 Para Upriver Fine 87* 78 58 76 77 77* 80 74i 76* 70i 37 40 43 55 51 54* 52 60 55 56 56 55 53 52 47* Prices as of first of month. 2 Prices as of fifteenth of month. The fall in the price of rubber, which has been more or less steadily in progress since the high price of $3.00 a pound was reached in the spring of 1910, was checked at 158 SOME GREAT COMMODITIES the outbreak of the war by the uncertainty of receiving continuous supplies of crude rubber from overseas, and by the increased demand for rubber products for war pur- poses. At the close of the war the increased output of the plantations together with about 55,000 tons of the 1918 production, which had been kept in the Far East by the scarcity of shipping, came on the market and broke the price. In 1920-21 the business depression which was re- flected in the falling prices for other commodities also had its effect. The peak price for rubber reached in 1910 was due to its greatly increased use for automobile tires, a use which up to that time had developed much more rapidly than the output of the plantations. The years 1909 and 1910, moreover, were the period when the valorization scheme, familiar to Brazilians in the case of coffee, was applied to Para rubber, and an attempt was made to corner the rubber market. Great excitement prevailed in the rubber trade at this time because the plantations were proving so profitable that there was a great speculative boom in rubber planting, company after company being floated in London for this purpose. The price in 1910 was the culmination of a gradual upward movement which had been in progress since early in 1908, when a price of 67 J cents a pound for upriver fine Para had been reached in a gradual decline from an average of $i.28| in 1905. Although the low rubber prices prevailing in 1921 were partially due to the world-wide business depression and also were influenced by the lack of buying power in Europe, particularly on the part of Germany and Russia, both large consumers before the war, the slump was primarily due to overproduction. RUBBER 159 From the latter part of 1920 through 1921 prices for rub- ber at New York were below the cost of production on many plantations. To remedy this situation a voluntary scheme of curtailment of output by 25 per cent, was undertaken beginning November i, 1920, by a considerable group of plantation operators. Growers in Malaya went even further by requesting the local authorities for legislation to restrict production by 50 per cent. As there is a large acreage in Chinese and native hands it was felt that legis- lation was necessary to enforce reduction of output other than the restriction naturally brought about by the low price for rubber and the expense of storing it. The agree- ment for restriction of output lapsed at the end of 1921. Curtailed output may bring relief to the growers tem- porarily but the chief hope for permanent benefit lies in the fact that rubber is a comparatively new commodity for which new uses are constantly being developed. This extension is bound to progress as long as crude rubber remains relatively cheap. Already it is coming into use as a road paving and in the form of hard rubber wood it is being increasingly substituted for ordinary wood with satisfactory results. The time when common articles of furniture will be made from rubber may not be far distant. The next few years may also see sponge rubber widely used in upholstery, rubber in liquid form incorporated in paints, rubber used in linoleum, in paper, and in many other novel ways. At any rate, it should be borne in mind that rubber manufacture is a comparatively young indus- try which has wonderful possibilities. SILK SILK, which but a few decades ago was regarded as an article of luxury to be used only by the very wealthy, within a comparatively short period has assumed a prominent position among the important textile fibers. The increase in the world's supply of raw silk, from a total of approximately 45,000,000 pounds in 1900 to 77,000,000 pounds in 1919, tells graphically the story of the growing popularity of the graceful fabrics obtained from it. Asia and southern Europe are the sources of the world's raw silk supply. The chief silk-producing countries of the world are China, Japan, Italy, the Mediterranean coastlands of eastern Europe and of Asia Minor and Syria, commonly classed together as the Levant, and France. A small amount of silk is produced also in Spain, India, Austria and Hungary. The rapid rate of increase in Japanese production, and the surprisingly large proportion which it forms of the world total, are shown in Table A, which gives, by prin- cipal countries, world production of raw silk from 1910 to 1921. Amounts are for fiscal years ending June 30, except in the case of Japan, where production figures are available for the calendar year only. Japan's raw silk output reached its peak in 1919 when it formed more than two-thirds of the world's supply for that year, and showed a gain of about 23,000,000 pounds over the 1910-14 average. Because of world-wide condi- 160 SILK 161 tions of depression, production in 1920 decreased by about 4,000,000 pounds, and reports of silk production in 1921 show a further decline. TABLE A WORLD PRODUCTION OF RAW SILK FOR THE YEARS ENDING JUNE 30, 1909, TO 1921 Country 1910-14 (5-yr. aver.) 1915 1916 1917 1918 1919 (in thousands of pounds) 1920 1921 japan 1 29,318 33,448 37,367 43,962 47,914 52,578 48,230 45,642 China 8 Italy 17,643 8,523 12,880 8,951 16,475 6,349 16,612 7,963 15,267 6,217 14,474 5,942 19,278 4,045 12,379 7,330 Levant 8 5,832 3,935 2,293 2,293 2,293 2,293 2,293 1654 France 990 893 286 485 452 540 397 551 Austria 3 726 666 331 331 331 331 331 Spain 180 161 121 198 154 165 154 177 India* 434 110 220 194 243 254 320 110 Total 63,646 61,044 63,442 72,038 72,871 76,577 75,048 67,843 1 Calendar year. 2 Exports only. ^Production for 1916 to 1920 estimated. 'Estimated. It is known that Chinese silk production is extremely large, but there are no accurate statistics on the subject. Consequently, figures given are for exports only. After 1914 exports underwent an almost steady decline until 1920 when they exceeded the 1910-14 average by about 1,600,000 pounds. The amount of silk exported in the year ending June 30, 1921, however, fell below the pre-war level. The Chinese silk export is affected to a large extent by the price of silver. When this is low, the Chinese exporter appears to be at an advantage, but when silver is high, exports decline, and the slack is taken up by domestic consumption of silk, which is exceedingly elastic. It is estimated that the Chinese ordinarily consume over half of the silk which they produce. Production in Italy, France and the Levant decreased greatly during the war and has not yet regained its former volume, although the Italian output showed a marked 1 62 SOME GREAT COMMODITIES increase in 1921 . Even before the war, production in Italy and France was falling off in spite of governmental boun- ties. This was due in part to the generally lower price of silk which prevailed and in part to the competition of eastern silks coupled with an increasing difficulty of competing with cheaper labor. HISTORY OF SILK Silk was first produced in China. The mention of silk occurs many times in ancient Chinese history, dating back almost to time immemorial. Of the many legendary versions of the beginning of sericulture, perhaps the most interesting is that which attributes its discovery to Hsi- Ling-Shih, the wife of the Emperor W'Hang. This enter- prising young empress collected silkworms, fed them, learned how to reel silk from the cocoons, and even to make it into fabrics. For this she was deified, and was known as the "Goddess of Silkworms." Sericulture became a national industry, but the Chinese kept their method of obtaining silk a secret for over 3,000 years, although they sold woven silk to the Persians, who, without knowing how or from what it was made, carried it to the western nations. No one, on pain of death, was allowed to export silkworm eggs from China. The only form of silk manufacturing in countries other than China was accomplished by unravelling and reweav- ing silken goods brought from China. In 289 A. D. four Chinese girls went to Japan and taught the secret of silk making in that country. Seri- culture was first brought to India about 300 A. D. by a young Chinese princess, who at the time of her marriage to an Indian potentate carried to her new home silkworm SILK 163 eggs concealed in her headdress. From India, the indus- try gradually spread to Persia and central Asia. As late as 500 A. D. silk-making was still unknown in Constan- tinople. About 550 A. D., during the reign of the Em- peror Justinian, two Nestorian monks brought the secret to Constantinople, having concealed silkworm eggs in their staves. Silk was introduced into the remainder of southern Europe largely as a result of wars, the process being taught by prisoners of war. Sericulture has always been sought as a national asset. The value of the industry is suggested by the fact that during fifteen years in the middle of the last century losses caused by silkworm disease in France and Italy alone have been estimated at more than a half billion dollars. Al- though climate is an important factor in successful silk production, the overwhelming importance of a plentiful supply of cheap skilled labor becomes evident by a brief survey of the industry. For this purpose, the work may be divided into two general branches: the production of cocoons, and the reeling of silk from the cocoons into skeins of raw silk. PROCESS OF SILK RAISING The production of cocoons includes the raising of mul- berry trees in order to obtain the leaves as food for the silkworms, the care of the worms from the time they are hatched until the cocoon is spun and the producing of silkworm eggs for further reproduction. In parts of the world where undomesticated silkworms are numerous, much time is spent also in collecting these cocoons. Both in Europe and the East, cocoon production is carried on largely as a home industry by the farming population. 1 64 SOME GREAT COMMODITIES The silkworm known as the Bombyx mori produces the largest amount of the world's silk, as well as the silk of best quality. It has been domesticated for centuries. The cocoons of numerous species of wild silkworms found in Asia are also used, the silk being classed under the general name of tussah. The egg of the silk moth is about the size of the head of a small pin. Hatching is done artificially in order that it may be simultaneous. The worms are kept on trays for convenience in handling and require a great deal of attention. As the worms must have an even, mild temperature and plenty of ventilation, frequently at this period the farmer and his family move out into the courtyard, giving up the entire house to them. Fresh mulberry leaves must be supplied to the worms as soon as the old ones are eaten. These leaves are carefully selected, as the quality of the silk is directly affected by the kind of food consumed. The exacting work of cocoon production yields very little profit. Women who care for the worms from daylight until night earned, before the war, only six or seven cents a day in Italy; and in Japan and China the return for this labor was sometimes as low as two or three cents. Wages have risen since that time but are still low as compared with compensation received for similar types of work in many other parts of the world. In spite of constant care, silkworms are subject to several diseases. In Italy and France, and to a lesser extent in Japan, sericulture is highly specialized work. In Italy, particularly, it is said that the rearing of silkworms is as well developed an industry as is the breeding of fine horses in other countries. The Chinese, however, lose large numbers of worms each year through unscientific treatment. SILK 165 In a little over a month after hatching, having attained its full growth of about three and one-half inches in length and one-quarter inch in thickness, the worm begins the spinning of its cocoon. The silk fluid, in the form of a clear mucilage, is expressed from the underlip in two strands, which harden in the air, and unite to form the silk filament. In about three days the cocoon is com- pleted. It is tough, strong and compact, oval in form and about one to one and one-half inches long, with walls about one sixty-fourth of an inch thick of firm, con- tinuous thread. Within a fortnight after spinning the cocoon, the worm, which in the meantime has changed into a chrysalis, emerges as a moth. The cycle from first to last, including all transformations, is less than sixty days. The escape of the moth from the cocoon breaks so many threads that the cocoons are ruined for reeling, or the unwinding of the silk filament. Consequently, when a few days old, all the cocoons except those intended for reproduction are placed in heating ovens to stifle the chrysalides. After this the cocoons are thoroughly dried out, losing two-thirds of their weight, and the reeling may then be done at any future time. REELING SILK INTO SKEINS After the cocoons have been carefully sorted, according to size, etc., they are ready to be reeled. Reeling is a slow, tedious process. To obtain one pound of raw silk about four pounds of dried cocoons, equal to from 2,500 to 3,000 cocoons, must be reeled, and so delicate is the silk filament that a number of cocoons must be reeled together to make the strand of raw silk strong enough for any commercial purpose. As a rule, filaments from five or six 1 66 SOME GREAT COMMODITIES cocoons are combined, but the number varies from three to twelve or more, according to the quality of silk and the size of thread desired. The cocoons which are to be reeled together are put into a basin of hot water, in order to soften the natural gum with which the filaments are fastened together. The outer layers of loose, broken filaments are removed by brushing the cocoons with a brush of twigs as they float in the hot water. Then the ends of the reelable filaments, one from each cocoon, are gathered and run on the reel together. The silk filaments are squeezed closely together in reeling and cohere be- cause their natural gum fastens them together. This is assisted either by bringing the thread back and twist- ing it around itself about two hundred times in a seven- inch spiral before it passes to the reel, or by twisting the threads from the cocoons in two different basins around each other before they are passed on to their respective reels. The best raw silks are produced in steam filatures or reeling mills operated by power, but a number of Asiatic filatures still use hand power. Many years ago, the reeling of silk was entirely a home industry in both China and Japan, but the Japanese were quick to copy European filatures and methods of reeling, which enables them to produce raw silks more regular in size and with fewer im- perfections than can be reeled by the native method. China also has a large number of steam filatures of modern character. Reeling involves considerable skill. It takes a girl many years to become expert in this art, yet in Italy before the war the reeling girls were paid only about thirty cents a day at the most, and in the East the wage scale was SILK 167 much lower. It thus becomes evident that if compensa- tion for all the hand labor involved, even in the most modern methods of raw silk production, were paid accord- ing to the high wage scale of the United States, the price of the finished article would be raised to so high a point as greatly to restrict the market. In China, much silk is still reeled in the homes by primitive appliances. There, even very young children are pressed into service and sit for hours, turning a little handle, unwinding silk from the cocoons. Chinese "tsatlees" are reeled by hand from domesticated cocoons, which are not stifled. As the reeling must be done very rapidly, before the moth emerges, such silks are neces- sarily very irregular, although they have a wonderful sheen and are very " nervy" or elastic. It is necessary for most of this hand-reeled silk to be re-reeled before it is suitable for commercial use. In Japan the filatures control the silk culture. They distribute the eggs, keep a general supervision over meth- ods employed and purchase the cocoons. In France and Italy still more careful attention is given to the industry. In France the raising of cocoons is carried on by peasants in the southern part of the country. Marseilles is the great- est French cocoon market and the second largest market for cocoons in Europe, the first being Milan. In addition to the silk reeled from cocoons produced within their respective countries, Italy and France, par- ticularly Italy, reel silk from cocoons produced in other parts of Europe and in the Levant. Italy normally im- ported about 10,000,000 pounds of foreign cocoons, and France from 4,000,000 to 5,000,000. Japan imports about 2,000,000 pounds of cocoons, principally from China. 1 68 SOME GREAT COMMODITIES MARKETING RAW SILK Raw silk is sold in bales which vary in weight according to the country in which the silk is produced, Japanese and Shanghai bales weighing 133! pounds, Canton bales io6| pounds and European bales 22o| pounds. The Asiatic bales are made up of books, or bundles of silk, each containing a number of skeins. Eastern silks are graded according to a somewhat shift- ing classification. There is no fixed standard as in cotton and wool. Consequently, as the crops vary from season to season, the higher grades of one season may be no better than the poorer grades of the next season. Each filature usually produces a number of grades of silk which are sold under various "chops" or labels. In addition to these original or market chops, a number of private chops are used by the silk importer in order to insure to his customers that under a certain chop they shall always obtain an unchanging quality of silk. This could not be insured under the original chop owing to the shifting classification. Unfortunately, the use of private chops is sometimes abused to disguise the real quality of silk, and to dispose of a poorer kind under the label of a better grade. European silks are more systematically classified than are eastern silks. However, the Japanese Raw Silk Mis- sion during its visit to the United States stated that a committee of fifteen had been appointed in Japan to study the subject of classification. CONDITIONING SILK Under normal conditions, water makes up about 10 per cent, of the weight of raw silk, but at times the per- SILK 169 centage is higher. As silk is purchased by the pound, it is obviously essential to know just how much of this weight is water. To solve the difficulty the silk is put through a process called conditioning. This consists in determining the absolute dry weight, to which is added 1 1 per cent., the total being the conditioned weight, that is, the weight it should be if in its normal condition. Most of the large cities of the world where much raw silk is handled have conditioning houses. Besides condition- ing, these establishments make other tests for various purposes, such as ascertaining the boil-off, that is, the per- centage of weight lost in degumming silk, and tests for size, tenacity, elasticity, etc. For very many years past, European silk manufacturers have made a practice of having all their silk conditioned, finding it far more economical than to risk paying for an undue proportion of moisture. The usage is not as gen- eral in the United States, but is growing in an encouraging manner. In the year ending June 30, 1922, only 6,746,000 pounds of silk were conditioned in this country against 2 7>758,ooo pounds in Europe, the latter total being ab- normally low as a result of the war. WASTE SILK While raw silk forms the principal material used in silk manufacturing, waste silk is also an important factor in the industry. Waste silk is unreelable material, such as the coarse and broken outer layers of the cocoon and the inner layers which are too attenuated for reeling. Under this heading are also classed the webby material produced by the worm before spinning its cocoon, waste made in reeling, pierced and otherwise unreelable cocoons, and 170 SOME GREAT COMMODITIES waste produced in throwing and manufacturing. This material, which, unlike raw silk, is not in a continuous length, must be made into spun silk yarn by a process similar to that used in the spinning of cotton and flax. Waste has mixed with it, to a greater or lesser degree, a considerable amount of foreign matter. Chinese silk waste is particularly poor in this respect, owing to the fact that so large a part of the reeling is done at home on the dirt floors. It is said that the poorest grades of waste yield only from 25 to 30 per cent, of spun silk compared with a yield of from 55 to 60 per cent, from better grades. In addition to this disadvantage, the use of the poorer grades of waste, as well as of raw silk, involves a greater amount of time and labor than is needed when better material is used. For this reason American manufac- turers ordinarily find it necessary to employ the better grades of silk, although in Europe poorer grades can sometimes be used to advantage, and Japan and China even find it profitable to utilize silks not marketable in other countries. One of the most striking developments in the silk busi- ness during the war was the expansion of the spun silk in- dustry both in Europe and in America. This was caused largely by the war demand for coarse silk cloth with which to make powder bags for the big guns. The bags are made of silk, as it is essential to use a textile that will burn up quickly and completely, leaving no smouldering rem- nant. Spun silk cloth was chosen rather than cloth made of raw silk, because of the comparative cheapness of the former. This special demand, however, has ceased with the war, and such fabrications are not likely to be reproduced. SILK 171 CONSUMPTION OF RAW SILK IN THE UNITED STATES The United States predominates as a consumer of raw silk, consumption during recent years having averaged nearly half of the known world supply. This consumption is entirely dependent upon imports. Table B shows im- ports of raw silk into the United States, by principal coun- tries of origin, from 1910 to date. Japan is regularly our greatest source of raw silk. Of the total amount imported in 1921 about 70 per cent, came from Japan, about 20 per cent, from China, and less than 10 per cent, from the rest of the world. TABLE B IMPORTS OF RAW SILK INTO THE UNITED STATES BY PRINCIPAL COUNTRIES FOR THE FISCAL YEARS FROM 1910 TO 1917 AND THE CALENDAR YEARS 1918 TO 1921 Country (Shaver ) 1915 1916 1917 1918 1919 192 1921 (in thousands of pounds) Japan.., 15,592 18,217 22,915 26,342 27,075 33,727 22,904 31,704 China 5,134 5,097 7,420 7,007 5,751 9,099 5,932 9,587 Italy 2,605 2,611 2,546 467 6 1,866 1,111 3,085 France 230 50 127 36 4 50 33 686 Other countries. ... 238 56 63 17 29 78 293 Total... 23,799 26,031 33,071 33,869 32,865 44,817 30,058 45,355 Reexports 127 179 197 504 554 487 799 484 Net imports. .. 23,672 25,852 32,874 33,365 32,311 44,330 29,259 44,871 Formerly, European silks were used in this country for the better grade of manufactured products, but Japa- nese silks have improved to such an extent that they may now be employed in any kind of work. Japan imported French and Italian seed, reproduced it in considerable quantities, and obtains from these worms a yellow silk which has greatly facilitated the replacement of European silks in the American market. Even in its home market the French reeling industry has for some time felt the competition of the more cheaply produced eastern raws 172 SOME GREAT COMMODITIES and Italy is also somewhat affected, although to a lesser degree. Table C shows the distribution of Japanese ex- ports of raw silk from 1909 to 1913 and from 19 19 to 1921. TABLE C EXPORTS OF RAW SILK FROM JAPAN BY PRINCIPAL COUNTRIES OF DESTINATION FROM 1909 TO 1913 AND IN 1919, 1920 AND 1921 Country -" 1919 1920 1921 1909-13 (5-yr. aver.) (in thousands of pounds) United States 14,785 36,416 19,448 32,761 France 3,506 1,102 3,283 1,798 Italy 2,264 25 6 Russia 377 l * i United Kingdom 46 209 254 71 Other countries 209 109 116 30 Total 21,187 37,861 23,107 34,660 iNot reported separately. The Japanese manner of winding raw silk into skeins is well adapted to American needs. In making the skeins, the raw silk is crossed in a diamond shaped forma- tion, known as Grant reeling, which greatly facilitates manufacturing processes. Some Italian silk reelers have not yet realized fully the importance of having their skeins made up in this fashion, and this has acted against them to some extent in the American market. OTHER CONSUMING COUNTRIES Table D shows the amount of raw silk available for consumption in the principal silk manufacturing countries of the world from 1909 to 1913, and in 1919, 1920 and 1921. In almost every instance the figures shown practically coincide with consumption. The term consumption is here used to indicate the amount of silk used in the fac- tories of each respective country, regardless of whether or not the finished articles were consumed within that coun- try. In the case of Japan, although figures for 1919 are SILK 173 probably not appreciably larger than consumption in that year, figures for 1920 are rendered abnormally high by the presence of huge stocks of raw silk which began to accumulate in Yokohama after the break in the market early in that year. This large amount of 26 million pounds, therefore, does not represent Japanese consump- tion, which in all probability, like that of every other coun- try except Belgium and Switzerland, declined in 1920 to a point below the level of 1919. It must not be over- looked, however, that the amount of raw silk consumed in Japanese factories has increased tremendously since pre- war years, and that the Japanese silk manufacturing in- dustry has grown at a more rapid rate during that period than that of any other country. TABLE D RAW SILK AVAILABLE FOR CONSUMPTION IN PRINCIPAL SILK MANUFACTURING COUNTRIES FROM 1909 TO 1913 AND IN 1919, 1920 AND 1921 Country (aer.) 1919 192 1921 (in thousands of pounds) United States... 22,632 44,329 29,259 44,871 United Kingdom ................... 962 1,160 946 378 France ............................ 12,684 11,210 8,832 5,493 Italy .............................. 4,658 3,757 3,407 2,469 Switzerland 1 ....................... 1,105 853 973 655 Belgium 1 .......................... 1,090 227 1,106 76 Japan ............................. 7,117 17,314 26,008 2 12,566 Germany 1 ......................... 8,713 3 2,246 2,549* *Net imports. Production negligible and figures not available. ^Includes a small amount of reexported silk. Not available. 4 Eight months. In the United States, as well as in Japan, figures for the amount of raw silk available for consumption in 1920 ex- ceeded actual consumption by a greater amount than usual, although in this case the surplus was not so large. 174 SOME GREAT COMMODITIES Chinese raw silk consumption cannot be determined with any exactness, but it is probable that it is second to that of the United States. It has been estimated that in the five years preceding the war Chinese annual consumption was about 21,000,000 pounds. MANUFACTURE OF SILK The manufacture of silk goods is divided into two main divisions, the manufacture of silk yarns, and the manu- facture of finished silk products such as woven fabrics, braids and silk threads. There are two kinds of silk yarns : spun silk yarns, made by spinning waste silk, and thrown silk yarns, made from raw silks. As raw silk threads are composed of several filaments fastened together with nat- ural gum, they would become matted and unworkable if cleaned and dyed in that state. Consequently, all raw silk that is to be skein-dyed is first thrown, or twisted. Not only is the silk twisted in throwing, but it is often doubled, twisted, and combined again as often as is neces- sary for the special use to which it is to be put. Thrown silk yarns are of three kinds, namely, singles, organzine and tram. Singles are the single raw silk thread, either twisted or not; organzine is a heavier yarn, intended to be used as warp, by which is meant the strong threads which run lengthwise in the silk cloth; tram, the third kind of thrown silk yarn, is commonly used for weft or filling, that is, the threads which run crosswise in the goods. Silk yarns are ordinarily dyed in the skein before being woven into cloth. The preparatory step to dyeing thrown silk yarns is "boiling off," a process of which the name is descriptive. This frees the yarn of the natural gum which SILK 175 made it lustreless, and turns it out in skeins of brilliant, creamy white. The difference in the weight which various silks lose in boiling off is an important factor to be con- sidered in the purchase of raw silks. It is said that the boil-off of good Japan silk is comparatively small. In the case of spun silk yarn, gum is removed from the waste before the yarn is spun. If the silk is to be "pure dye," it is put through the coloring process, and, after drying, is ready for the final processes of manufacture. Before being put into the dye, however, yarn-dyed silk is usually "weighted." This means that it is dipped into a liquid solution of some sub- stances which the silk absorbs and retains, thus adding to its weight. At times various weighting agents, such as sugar, tannins of different sorts and salts of several metals, have been employed. If not carried to extremes, weighting does no injury to the ultimate consumer, as it makes possible the production of serviceable and attrac- tive materials at much lower cost. On the other hand, if weighting is not skillfully done, or is overdone, the wearing qualities of the silk are apt to be very poor. When goods are to be piece-dyed, the gum is boiled out after the cloth is woven. Then the cloth is dyed, usually without any weighting. Many mills do not include the whole process of manu- facture in their work. It is a frequent practice for a mill to buy the raw silk, and to send it out to an independent throwing firm, to be thrown on a commission basis. In the same manner, dyeing is often done by a special dyeing firm. The character and extent of the international trade in silk manufactures are indicated at the end of the chapter in 176 SOME GREAT COMMODITIES tables which show in detail the exports of silk products from the eight principal silk manufacturing countries, from 1909 to 1913 and for the most recent year for which data are available. FRENCH SILK INDUSTRY France, under normal conditions, is the foremost ex- porter of manufactures of silk, and the quality of French exports is very high. When Germany and Switzerland began to flood the market with a cheaper grade of silk goods, the only means by which it was possible for French manufacturers to hold their supremacy was by maintain- ing their standard of excellence. The French silk industry is very closely concentrated. The weaving of piece goods is located principally in the environs of Lyons, but the manufacture of heavy satins and pile fabrics is carried on at St. Etienne, which city is also the centre of the ribbon industry. Among the fabrics produced by French manu- facturers are many richly embroidered silks, and brocades woven with gold and silver threads. Much of this ma- terial finds a ready sale in eastern markets, but the United States also is a large purchaser of novelties not ordinarily made in this country. Because of the novel nature of much of the product, the French silk trade is particularly dependent upon fashion, and is therefore subject to serious fluctuations. JAPANESE MANUFACTURES The principal silk fabric manufactured in Japan is the famous "habutae." The name "habutae" means "soft as down." It is woven in the natural gum from raw silk which has not first been thrown or dyed. There are two SILK 177 classes of habutae, plain and figured, but the former is in by far the larger amount. The Japanese government has a system of inspection of habutae, for the purpose of prohibiting the exportation of any of this cloth that is not up to the standard. Low labor costs enable Japanese manufacturers to make habutae so cheaply that they are able to export large quantities at low prices. Some of the cheaper silks that are exported from France are in reality Japanese habutae, imported at an extremely low price, dyed, printed and shipped out as French cloth. In the United States as well, this material offers sharp competition to American fabrics of the same grade. In addition to the large amounts of habutae, Japan produces steadily increasing amounts of crepes, satins and a great variety of piece-dyed, printed and jacquard goods. Sales of some of these materials in the markets of the United States and Europe have been somewhat hampered by the fact that colors and designs were not well suited to western styles. This difficulty, however, is gradually being overcome. Silk yarns have formed the largest share of the product of Italian silk factories, and large quantities are exported each year. Fabrics of very fine quality are also produced and it is reported that since the war the number of weaving establishments has somewhat increased. Chinese production of manufactured silk goods consists mainly of pongees, woven in the gum from wild tussah silk. They are sold undyed, and are of the original tussah brown which cannot be bleached. Although little prog- ress in methods has been made, the Chinese skill in silk manufacturing is almost as old as the discovery of sericul- ture. It is said that there is hardly any weave used in 178 SOME GREAT COMMODITIES western countries to-day that was not known in Japan and China hundreds of years ago. PRODUCTION IN THE UNITED STATES Exports of silk goods from the United States are small as compared with those from France, but the amount of silk goods produced in the factories of this country ex- ceeds in volume the output of any other country in the world. Table E shows the growth made by the American silk industry since 1904. Although large-scale production of staple fabrics and articles is the leading characteristic of the industry, practically every variety of silk goods is produced in this country, with the exception of certain specialties made by France and other European countries. Many of these fancy goods are made on the small looms that still exist in the homes of French, Swiss and German weavers, and the return for this work is very small. In the United States the manufacture of such goods at a reasonable price would require the use of expensive ma- chinery, the cost of which would not be justified by the limited market and fluctuating demand for the product. TABLE E STATISTICS OF THE SILK MANUFACTURING INDUSTRY IN THE UNITED STATES, 1904 TO 1919 1904 1909 1914 1919 Number of establishments 624 852 902 1,369 Persons engaged in the industry. .. 84,153 105,238 115,571 126,782 Broad looms. .. 50,252 64.836 73,504 87,215 Ribbon looms 9,523 10,570 11,554 9,223 Producing spindles 1,197,408 1,777,962 2,159,271 2,669,459 Capital invested $109,556,621 $152,158,002 $210,071,679 $532,732,163 Wages and salaries ... . . $ 31,510,213 $ 46,097,364 $ 57,615,374 $134,597,292 Total value of production $133,288,072 $196,911,667 $254,011,257 $688,469,523 In 1919 the largest number of silk manufacturing estab- lishments in any one state was in New Jersey. Distribu- tion by states according to value of output was as follows: SILK 179 Per cent, of State total products of United States. Pennsylvania 33.6 New Jersey 31.2 New York 11.9 Connecticut 9.8 Massachusetts 4.9 Rhode Island 3.9 Other states 4.7 Total.. 100.0 CONSUMPTION IN THE UNITED STATES Of the $688,000,000 worth of silk goods produced in the United States in 1919, 97 per cent, was consumed at home, and this is not an unusual proportion. In addition to consuming so large a share of domestic manufactures, the United States imports from $25,000,000 to $75,000,000 worth of foreign silk products a year. Table F shows by principal countries of origin, the value of manufactured silks imported into the United States from 1909 to 1921. Under normal conditions, nearly half of the imports of manufactured silks come from France. From Germany and Switzerland are imported large quantities of spun silk TABLE F IMPORTS OF SILK MANUFACTURES INTO THE UNITED STATES BY PRINCIPAL COUNTRIES FOR THE FISCAL YEARS 1910 TO 1917 AND CALENDAR YEARS 1918 TO 1921 Country (5-y.) 1915 1916 1917 1918 1919 192 1921 (in thousands of dollars) France ......... $14,662 $11,286 $16,865 $17,240 $6,596 $13,689 $19,492 $15,517 Germany ....... 4,392 2,654 187 i ... 20 1,716 1,032 Switzerland ..... 3,433 2,556 2,830 3,883 3,548 4,393 9,402 3,805 Japan .......... 3,211 4,908 6,760 11,569 14,698 31,813 35,359 21,213 United Kingdom. 2,647 1,991 3,429 3,765 1,549 2,993 4,793 2,756 Italy ........... 798 1,022 843 1,870 655 657 1,654 1,335 China .......... 247 450 896 1,765 1,098 786 1,765 1,961 Other countries . 480 176 102 231 311 325 1,239 630 Total ...... $29,870 $25,043 $31,912 $40,323 $28,455 $54,676 $75,420 $48.249 Lewthan $1,000. i8o SOME GREAT COMMODITIES yarn. From Switzerland we buy also a fine gauze-like fabric known as bolting cloth. It is made especially for use in flour mills, and is not manufactured in this country. The enormous consumption of silk goods in the United States was greatly stimulated in the period of lavish spend- ing that followed the war. This, combined with the shortage of European raw silk, was the principal factor in creating a demand which at the time appeared greatly to exceed world supplies. The resultant effect upon prices is shown in Table G which outlines the price movement of Italian and Japanese silks in the New York market from 1913 to June, 1922. The high price level which has prevailed in the raw silk market during the greater part of the post-war period has caused many people to study the possibilities for increasing world supplies. Japan has shown what increases can be made with proper climate and plenty of cheap labor. With the silk industry more scientifically and systemati- cally organized, there should be almost no limit to the amount of raw silk that China could give to the world. In England much is being written with regard to develop- ing the sericultural industry in India in order to fill the demand of European manufacturers. Italian silk production could be increased by raising three crops a year in the southern part of the country instead of the present single crop. One obstacle to silk raising in southern Italy is the lack of sufficient housing space for the worms, Italian peasant quarters being as a rule very small and congested. This could be overcome, however, by the construction of cheap sheds capable of being heated. SILK 181 TABLE G TREND OF RAW SILK PRICES IN THE NEW YORK MARKET IN 1913 AND FROM 1919 TO JUNE, 1922 (Prices are for date nearest the fifteenth of the month) Year and month JSS' $3= JSe Classical Shinshiu Best No. 1 (dollars per pound) 1913 January $3.80 $3.50 $4.10 April 3.92 3.53 4.20 July 4.30 3.63 4.45 October 4.60 3.95 4.80 1919 January 6.45 7.35 April * 6.45 7.05 July i 9.60 10.10 October 11.20 10.25 11.35 1920 January 15.45 16.25 16.20 April 13.05 11.70 13.75 July 8.30 6.50 8.25 October 7.40 6.40 7.60 1921 January 5.75 5.85 6.05 February 5.80 5.60 6.20 March 5.90 5.75 6.20 April 6.75 6.05 6.70 May 6.25 5.35 6.45 June 6.00 6.00 6.55 July 6.15 5.90 6.65 August 6.20 5.69 6.35 September 6.30 5.87 6.60 October 6.70 6.05 6.90 November 6.90 6.50 7.00 December 8.00 7.50 8.00 1922 January 8.30 7.90 8.40 February 8.05 6.65 7.80 March 7.30 6.30 7.50 April 7.15 6.25 7.25 May 7.90 7.00 7.95 June.. 8.50 7.35 8.20 ^Nominal. 182 SOME GREAT COMMODITIES Because of large stocks and lack of demand, the ten- dency during 1921 was to decrease silk production. In Japan, particularly, an attempt was made to decrease output. Italian raw silks were not so much affected, be- cause the position of exchange made it possible to sell Italian silks in the United States at a point below the price level of eastern raws. With improvement in 1922 consumption has increased. It is an undeniable fact that silk has become a necessary commodity, and one for which in normal times there will continue to be a steady de- mand. EXPORTS OF MANUFACTURED SILKS FROM PRINCIPAL SILK-MANUFACTURING COUNTRIES Quantity w Value I. UNITED STATES Dress goods Wearing apparel All other manufactures Total. . . (thousands of yards) (thousands of dollars) 3,077 (c) 3,338 (c) (c) 3,612 (c) (c) 2,722 (c) 1,574 9,672 (a) Fiscal years ending June 30. (b) Calendar year. (c) Not available. II. FRANCE Thrown silk yarn Spun silk yarn Silk thread and embroidery silk. . . Fabrics of silk or waste silk Gauze or crpe of silk Silk tulle Velvet and plush Fabrics of waste silk for upholster- ing Silk muslin, grenadine, etc Knit goods Passementerie Embroideries on silk background. . Laces of silk or waste silk Ribbons of silk or waste silk Silk fabrics with gold or silver thread. . . 1909-1913 Average (thousands 2,879 2,269 53 5,616 11 78 54 3 18 123 196 5 431 1,504 3,653 1921 of Ibs.) 1,175 1,569 175 5,064 114 415 241 55 33 325 1,173 39 169 1,708 3,262 1909-1913 Average (thousands of francs) 49,986 78,649 56,388 10,416 595,686 11,937 43,271 15,821 1,044 178,394 525 4,064 1,830 84 720 7,561 3,344 628 19,912 48,333 23,525 5,274 2.913 35,076 51,893 32,740 25,964 219,859 56,685 295,907 SILK 1909-1913 ,, 183 1909-1913 iqoi A Lverage Average III. BELGIUM (thousands of Ibs.) (thousands of francs) Silk yarns 3,381 2,883 26,519 50,365 Thread and embroidery yarn (a) 404 (a) 7,292 3 5 32 285 Tulles, laces and blonds 4 1 368 214 Knit goods (b) 18 12 712 Other silk fabrics 28 122 341 5,060 (a) Not available. (b) Less than 1,000 Ibs. 1909-1913 100 t 1909-1913 1Q21 Average Average IV. ITALY (thousands of Ibs.) (thousands of lire) Thrown silk yarn 7,786 5,981 177,678 916,750 Spun silk yarn 2,469 1,353 80 99 25,888 73,738 1,773 6,616 Fabrics of silk or silk waste 3,047 2,419 81,476 299,798 Velvet and plush 7 26 303 3,020 Knit goods 1 14 23 2,188 Tulles and laces 3 394 170 64,699 Trimming and buttons 41 83 795 5,491 Fabrics of silk containing metal threads 3 11 197 2,125 Sewn articles 184 139 11,969 26,772 Galloons and ribbons 226 105 5,745 8,469 (a) Less than 1,000 Ibs. 1909-1913 1Q01 1909-1913 1Q01 Average Average V. SWITZERLAND (thousands of Ibs.) (thousands of francs) Thrown silk yarn 2,588 750 58,017 28,841 Spun silk yarn 2,697 1,698 28,146 29,039 Silk thread and embroidery silk. . . 218 178 3,302 5,496 Bolting cloth 69 65 5,078 10,299 Other articles of silk, waste silk and artificial silk, in the piece Fabrics of silk, waste silk and arti- 4,495 3,390 103,396 170,152 ficial silk, cut up and hemmed. . . 93 17 2,347 968 Ribbons 1,488 1,078 41,217 59,862 Passementerie 4 4 96 99 Embroideries 73 7 4,687 1,044 Laces (a) (a) 35 18 Table covers and bedspreads 1 6 (a) Less than 1,000 Ibs. 1909-1913 1Qon Average 1909-1913 1Q5 Average 192 VI. GERMANY (thousands of Ibs) (thousands of marks) Thrown silk yarn Spun silk yarn Thread 1,387 1,114 181 572 266 19,872 6,781 54,080 5,957 121,305 Silk, waste silk or artificial silk combined with metal threads . . . 35 292 Upholstery fabrics Fabrics of velvet and plush of silk . Fabrics of silk 85 18 \&\ 2.077 1,544 7,815 16,745 ) OC1 C01 67!l30( WM Ribbons 2,068 909 25,156 390,944 Tulle Bolting cloth Gauze, crepe and similar fabrics of silk m 'i 68 52) 257'j 57 1 34,408 659J Knitted silk 525 552 8,036 222,895 Lace & lace goods of silk Embroideries on silk %\ *> 3,875 ) , 77A 3,297 42 ' 774 Silk trimmings, buttons, etc 11,957 2,377 60,491 305,276 184 SOME GREAT COMMODITIES VII . UNITED KINGDOM 1909-1913 . q?1 1909-1913 Average Average (thousands of Ibs.) (thousands of sterling) 1921 Thrown silk yarn 65 (a) 55 1 Spun silk yarn 1,217 235 403 279 Broadstuffs entirely of silk(b) 4,661 1,515 455 459 Broadstuffs silk combined with other materials(b) 6,783 1,733 724 754 Laces, entirely of silk (c) (c) 79 69 Laces, silk combined with other materials (c) (c) 13 23 Ribbons, entirely of silk (c) (c) 15 59 Ribbons, silk combined with other materials (c) (c) 13 17 (c) (c) 426 623 (a) Less than 1,000 pounds. (b) Thousands of yards. (c) Not available. 1909-1913 Average 1921 1909-1913 Average 1921 VIII. JAPAN (thousands of units) (thousands of yen) Spun silk yarn (Ibs.) 419 271 1,280 2,091 Silk piece goods; habutae (Ibs.) . . 3,070 2,701 29,388 43,558 Kaiki, including cotton mixture (yds.) 774 65 269 76 Satins (yds.) 2.236 7,291 1,107 7,138 Taffetas (yds.) 1,353 655 917 758 Chiffon (yds.) 1,030 (a) 229 411 157 Silk and cotton pongee (yds.) . . . Crgpes (yds.) (b) 377 27,134 6,731 (b) 563 23,802 10,709 All other silk piece goods (pieces) . . 95 (b) 630 3,739 Silk handkerchiefs (doz.) 1,481 961 4,551 3,186 Silk nightgowns (no.) Silk shawls (no.) 158 393 5 35 *> 746 252 114 240 (b) 368 (a) Two-year average. (b) Not available. SUGAR SOMEWHAT more than a thousand years ago the western world learned from the East the use of crystallized substances from the juice of sugar cane and the era of the Crusades marked the beginning of trade in sugar between Europe and the Levant. Hun- dreds of years later the need for a substitute for cane sugar led to the production of sugar from the juice of beet roots. Except for a few sweetening substances such as honey, the West subsisted without sugar until medieval times, yet to-day more than 16,000,000 tons of sugar are distributed annually in the world's markets, and sugar has become one of the most valuable of foods. Practically all the sugar produced is used for food, either directly or in manufactured food products. In the United States per capita consumption averages about 85 pounds of sugar a year, and before the war British consumption was somewhat above this figure. In Australia the rate of consumption is more than 100 pounds a year. Per capita consumption of sugar is far smaller, however, in most European countries and in some parts of the world little or none is used. The dry, white granulated sugar of to-day is far removed from the dark, moist mass or the hard loaf which formerly were in everyday use. War conditions brought home the fact that sugars vary greatly in appearance and quality. Coarse yellowish sugars from Java and other countries were 185 186 SOME GREAT COMMODITIES an unwelcome substitute for the perfect product to which American consumers had been accustomed. The purity and uniformity of white granulated sugar are the result of years of experiment and scientific development. Chem- ically, sugars are carbohydrates, combinations of carbon, hydrogen and oxygen. Cane and beet sugars when fully refined are pure sucrose, differing in composition from glucose and other forms of sugar found in plants. From a dietary standpoint refined sugar is a highly concentrated food, containing practically no waste and consisting ex- clusively of energy-producing elements. CANE AND BEET SUGAR Sugar cane is believed to have originated in India or some other part of eastern tropical Asia. Knowledge of the cane plant was acquired from India by the Chinese, as is shown in Chinese writings of the eighth century B. C. Solid sugar was first known in the East about 600 A. D., so far as historical records show. The Arabs probably were responsible for the introduction of cane culture into Egypt and from there into Spain. However, it was not until after the return of the Crusaders from Palestine, where they found cane plantations, that trade in sugar began to spread throughout western Europe. Cane cul- ture was introduced into the West Indies from Europe soon after the discovery of the New World. After centuries of cultivation, cane remains a tropical plant, which is grown commercially no farther north than Georgia or southern Spain. Sugar beets are as dis- tinctively natives of the temperate zone, thriving best in western Europe and in the North American continent. The United States, Spain and Australia produce both SUGAR 187 sugar cane and beets, but only under widely different con- ditions. The value of rich tropical lands for the growing of sugar cane and other agricultural products made them eagerly sought by European powers in the period of colo- nial expansion; yet after rival nations had secured them- selves in the possession of East and West Indies, France under Napoleon created the beet sugar industry on Euro- pean soil in an effort to become independent of foreign supplies. From France and Germany beet culture spread eastward to Russia, southward to Italy, and northward to the Scandinavian countries. Although beet sugar has so recently entered the field it has proved a vigorous rival of cane sugar. The race between the luxuriant, self-renewing cane of the tropics and the carefully cultivated beet of the temperate zone has been an interesting contest in the past 80 years. The leading place was first won by beet sugar in the season 1882-83. Occasionally after this cane sugar production forged ahead but did not hold the lead. The chief Euro- pean governments used bounties, drawbacks on exports and other measures to encourage production of beet sugar, which thus was enabled to supersede cane sugar in the British market. The effect on the West Indian industry was disastrous. Finally the principal western European governments agreed, under the terms of the Brussels Con- vention of 1902, to do away with artificial aid to beet production. Cane sugar soon took the lead. Cane pro- duction in 1900-01 was 2,850,000 tons; by 1910-11 it had increased to 8,433,000 tons. The war disrupted beet sugar production so that its output fell from 8,635,000 tons in 1913-14 to 3,255,000 tons in 1919-20. At the same time expansion in the cane sugar industry brought the i88 SOME GREAT COMMODITIES crop to 1 1,914,000 tons in 1919-20. As normal production in Europe is restored the contest will again be active. Total sugar crops of the world at lo-year intervals from 1840 to 1910 and annually thereafter are shown in table A. The proportion of cane and beet sugar is also shown. TABLE A SUGAR CROPS OF THE WORLD AND PERCENTAGE OF CANE AND BEET, 1840 TO 1922 Percentage of total Cane Beet 96 4 86 14 80 20 66 34 54 46 41 59 32 68 50 50 57 43 51 49 53 47 55 45 63 37 66 34 71 29 76 24 79 21 72 28 71 29 "Estimate of production in British India is included in 1910-11 and later years. 'Estimate near close of harvesting season. Year Total crop Cane Beet (in gross tons) 1840 1,150,000 1,100,000 50,000 1850 1,400,000 1,200,000 200,000 1860 1,899,000 1,510,000 389,000 1870 2,416,000 1,585,000 831,000 1880-S1 3,659,000 1,911,000 1,748,000 1890-91 6,265,000 2,555,000 3,710,000 1900-01 8,800,000 2,850,000 5,950,000 1910-11 . . . 116,994,000 18,433,000 8,561,000 1911-12 . . . 16,064,000 9,175,000 6,889,000 1912-13 . . . 18,209,000 9,290,000 8,919,000 1913-14 18,436,000 9,801,000 8,635,000 1914-15 . . . 18,483,000 10,177,000 8,306,000 1915-16 . . . 16,882,000 10,627,000 6,255,000 1916-17 . . . 17,105,000 11,332,000 5,773,000 1917-18 17,415,000 12,408,000 5,007,000 1918-19 . . . 15,841,000 11,960,000 3,881,000 1919-20 . . . 15,169,000 11,914,000 3,255,000 1920-21 . . . 16,682,000 12,006,000 4,676,000 1921-22 . . . 2 17,423,000 2 12,446,000 2 4,977,000 THE WORLD S SUGAR PRODUCTION Maximum production of sugar was reached in 1914-15 when the world's crop, cane and beet combined, was 18,483,000 tons. Sharp curtailment in the European out- put of beet sugar during and after the war reduced the total to 15,169,000 tons in 1919-20. Since that year the trend has been upward. Prompt recovery from depres- sion has been a characteristic of the sugar crop. SUGAR 189 The limit of the world's output has not been approached. More sugar may be grown by putting additional land under cane or by increasing the yield per acre. Cuba and the Philippines, for example, can extend their cane fields. British India now produces about one ton of sugar to the acre, but by the use of improved methods, output can readily be raised to two or three tons. In the United States, Canada and elsewhere larger areas can be devoted to beet culture, whenever the price of sugar makes it profitable in competition with other crops. Supply can thus be increased whenever there is enlarged demand from consumers who are able to buy sugar. Labor shortage threatens to become a limiting factor in some localities but as an offset there is the possibility of more widespread use of machinery. Cane cutting and cultivation of beet fields still require considerable hand labor, while machinery has been applied to most of the later processes. Mechanical cane cutting seems not im- possible as a number of machines have been designed for that purpose, some of which may eventually prove prac- ticable. CANE SUGAR PRODUCTION IN CUBA Cuba is the leading producer and exporter of sugar. After the liberation of the island in 1898, this industry, which is by far the largest in Cuba, was greatly stimulated. The maximum crop under Spanish rule was 1,000,000 tons (1894) b ut by I 9 I tn is figure was almost doubled and in 1921-22 the record crop of 3,996,000 tons was made. Cuban crops in 1913-14 and from 1918-19 to 1921-22 are shown with those of other countries in table B on page 196. The area of land suitable for cane which was controlled 190 SOME GREAT COMMODITIES by producers in 1920 was estimated at over 4,000,000 acres or about one-seventh of the area of the island. More than half of this acreage is controlled by the "centrals," factories which as a rule are owned by large corporations. The central usually grinds not only the cane produced on its own lands but also some cane purchased from near-by "colonos" who own estates or farms. Of the entire investment in the Cuban sugar industry, estimated at over $950,000,000 in the fall of 1921, two-thirds are believed to be American capital. Cuba has almost ideal conditions for cane cultivation: a warm climate, plenty of moisture, and rich soil, much of which is underlaid with limestone. Future development of the industry will probably be greater in the east, where the land has not been cropped for so long a time and more virgin soil is still available, than in the west. The yield per acre is somewhat higher in the east and production costs consequently lower. Native labor is supplemented in times of high wages by immigration from Spain and from near-by islands. The cane plant belongs to the grass family and grows from 8 to 24 feet in height. There are several varieties, but much remains to be done in the development of new strains. New cane is grown from sections of stalk which are planted in the spring or fall and cutting begins nine months or more after planting. Old roots continue to produce new but less abundant growth, called ratoon crops. In Cuba it is often profitable to allow the cane to ratoon for ten years. Only simple cultivation and a moderate use of fertilizers are required. Cuban agricul- tural methods are not intensive, but they have proved adequate under present conditions. Fifteen or twenty SUGAR 191 tons of cane to the acre is an average yield, from which somewhat more than two tons of sugar are made. Grind- ing begins late in November and the greater part is com- pleted in June. Mechanical methods of handling cane and making sugar are highly developed in Cuba and are typical of progressive methods used in other cane-growing countries. Freshly cut cane is hauled immediately to the central where it is fed to the crusher which breaks and flattens the stalks. It then enters the mill and is passed between heavy rollers to force out the juice. From 12 to 16 per cent, of the weight of the cane consists of sugar, most of which can be extracted, although the maximum sugar content may be higher. The richness of the juice varies under different conditions of growth and maturity. Cane juice, after having been heated, settled, and filtered, is boiled first in multiple evaporators, then in vacuum pans in which it is almost completely crystallized. Most of the mother liquor or molasses remaining thereafter is driven off in centrifugal machines revolving at high speed. Frequently the crystals are subjected to steam treatment for additional drying. The product is a hard-grained, yellowish-brown raw sugar, practically dry and possessing good keeping qualities, which is sold as 96 centrifugal on the basis of a pure sucrose content of 96 per cent. The natural market for Cuban raw sugar is the United States and refineries from Boston to Galveston use this grade. Under the reciprocity treaty between the two countries, the United States grants a reduction of 20 per cent, of the duty on all imports from Cuba. The United Kingdom became a large buyer of Cuban sugar during the war, when European beet sugar was cut off. British i 9 2 SOME GREAT COMMODITIES imports from Cuba in 1918 increased almost fourfold over 1913, but after the war this trade declined, leaving Cuba with greatly increased crops for which purchasers were needed. Wartime prosperity had led to heavy invest- ments in new and costly installations at centrals. The close of 1921 found Cuba in a serious financial condition with abnormally large stocks of sugar, almost one-third of the year's crop. The problem of the surplus at the close of 1921 was largely solved by a tremendous buying movement in the United States and unusual European purchases in the first half of 1922. But the Cuban industry has demon- strated its ability to increase production at a more rapid rate than the normal increase of American consumption. It may eventually become necessary for Cuba to dispose of an increasing proportion of its product outside of the United States. As continental beet-growing countries will, in all probability, again supply their own needs with a surplus for export, Europe is only an uncertain market for Cuban sugar. The Orient has been suggested as an outlet, but in this connection a potential increase in pro- duction in the tropical areas of Asia, the Philippines, and the Malay Archipelago is not to be disregarded. OTHER CANE SUGAR PRODUCING COUNTRIES British India falls far short of its potential importance as a sugar producer. With nearly 3,000,000 acres under cane (1920-21) the country does not supply all of its domestic demand and regularly imports additional sugar, mostly from Java and Mauritius. The sugar crop of 2,500,000 tons or more represents less than the entire cane production, as some cane is used directly for chewing and SUGAR 193 other purposes. While information on the Indian crop is inexact owing to the non-commercial character of much of the production, the yield is known to be conspicuously low, averaging just over one ton of sugar to the acre. The bulk of the output is a crude raw sugar called "gur" which satisfies the native population. Efforts are under way to improve the methods of cultivation and increase output. A remarkable state of development has been reached in the cane sugar industry of Java. The Dutch government and the producers themselves have thoroughly utilized scientific methods of culture and extraction, with brilliant results. Abundant and cheap labor has also been an important factor in success. A crop averaging about 1,500,000 tons is produced and Java is the second largest exporter in the world. "Java white," the characteristic product of the industry, is an incompletely refined sugar especially adapted to the market in British India, where religious prejudice exists against sugars refined with animal charcoal. Other grades made in Java are "browns" and muscovado (raw sugar of a lower grade than centrifugal). British India, Japan and China take the bulk of Java's exports, but in times of high prices, as in 1920, exports to Europe and America are increased at the expense of the Orient. Cane is grown in many sections of the world other than those mentioned, but on the basis of a total cane sugar production of about 12,000,000 tons a year the crops of Cuba, India and Java, amounting to about 3,900,000 tons, 2,500,000 tons and 1,500,000 tons respectively, constitute nearly two-thirds of the world's supply. Hawaii furnishes the largest item of the remainder, with Porto Rico and Japan (including Formosa) as close competitors. Several 194 SOME GREAT COMMODITIES other regions, including Peru, Brazil, the Philippines, Mauritius, Argentina, Australia and Louisiana produce considerable quantities. Most of the larger islands of the West Indies grow enough cane to export at least a small quantity of sugar and in some cases the manufacture of molasses and Jamaica rum adds to the profits of the sugar industry. The Hawaiian Islands merit special attention as the most advanced development of the cane sugar industry. The highest yield per acre in the world is achieved there through the aid of natural resources, scientific knowledge and organization. In recent years the production of the islands has averaged 4.3 tons of sugar to the acre while individual plantations sometimes produce almost 12 tons to the acre. The cane is said to excel that of any other country in quality. But Hawaii can put little if any new land into cultivation and will have much to fear from the competition of countries where land is cheaper and wages lower. Under the favorable influence of the reciprocity treaty of 1876 with the United States, Hawaiian produc- tion made notable gains, reaching 200,000 tons just before annexation by the United States in 1898. The record crop was that of 1914-15, 577,000 tons. Free admission of Hawaiian sugar into the United States insures a market with preference over all foreign sugar, including Cuban. The Philippines are still far from full development of their sugar industry, and exports remain about the same as under the Spanish regime. Modern factories and equipment have been installed so that centrifugal raw sugar now predominates over muscovado. Exports are divided between the Far East and the United States. In Porto Rico most of the sugar is produced at centrals with SUGAR 195 modern methods and machinery. Since the island became an American possession, production has risen from an average of less than 100,000 tons (1900-05) to over 400,000 tons, marketed exclusively in the United States. Philippine and Porto Rican sugars are free of duty. Louisiana has produced cane sugar since the French colonial period, before 1800, and Texas produces a small crop. The quantity in the two States is not large enough to affect the world market. Although soil and rainfall are suited to cane culture, the growing season is sometimes shortened by frosts, and low yield per acre and high labor costs increase the cost of production. The crop averages about 200,000 tons a year, which is refined and used in the United States. Crops of over 300,000 tons are occa- sionally made, as in 1911-12 and earlier, but on the show- ing of the last ten years, Louisiana sugar production is a declining industry. Refining generally forms a separate branch of the cane sugar industry and is carried on in countries where the market for refined sugar exists. Eastern refineries of the United States use chiefly Cuban raws, filling in with Porto Rican, Philippine, and other grades, while San Francisco handles principally Hawaiian sugars. The British re- fineries draw their raw cane sugar from all quarters of the world Cuba, Mauritius, the British West Indies, South America and Java. Filtering through charcoal to re- move coloring matter is an essential part of the refining process. Raw sugar yields slightly less than an equal weight of refined owing to the removal of molasses and impurities. Table B shows cane and beet sugar production by lead- ing countries for 1913-14 and from 1918-19 to 1921-22. 196 SOME GREAT COMMODITIES TABLE B SUGAR CROPS OF PRINCIPAL PRODUCING COUNTRIES Country Cane Sugar United States: Louisiana Texas Porto Rico Hawaiian Islands Virgin Islands of the U. S. Cuba British West Indies French West Indies San Domingo and Haiti . . Mexico and Central America Argentina Brazil Peru Other South America .... British India Java Formosa and Japan Philippine Islands Australia Fiji Islands Mauritius Natal, Egypt, and other Africa 2 Spain Total Cane Sugar . . . Beet Sugar- Germany Austria and Hungary .... Czechoslovakia Russia and Ukraine Poland France Italy Spain Belgium Netherlands Other Europe United States Canada Total Beet Sugar Grand Total, Cane and Beet 1913-14 1918-19 1919-20 1920-21 1921-221 (in thousands of gross tons) 261 251 108 151 290 7 4 6 3 325 363 434 439 385 551 539 496 508 490 6 9 12 5 5 2,598 3,972 3,730 3,936 3,996 136 197 191 143 158 66 37 42 52 59 106 162 180 191 237 150 98 127 153 157 280 130 299 202 175 158 183 177 340 325 228 294 330 350 325 129 140 118 130 123 2,292 2,370 3,049 2,448 2,500 1,272 1,749 1,336 1,509 1,650 157 416 283 342 407 233 195 209 256 276 266 210 162 182 299 92 66 88 73 65 250 253 236 260 182 231 315 7 7 9,801 11,960 301 323 334 6 7 5 11,914 1^006 I%446 2,618 1,683 1,688 717 305 169 229 229 330 655 12 1,351 | 607 337 18^36 110 108 139 74 173 285 675 22 3,881 15,841 740 1,153 1,330 12 48 79 494 708 660 78 89 49 140 190 225 154 305 278 183 135 200 82 171 135 147 243 290 239 316 376 316 314 425 653 969 911 17 35 19 "3^55 4,676 1977 15,169 16,682 17,423 ^Estimates near close of harvesting season. 2 Including Mozambique and the island of Reunion. SUGAR 197 BEET SUGAR The growth of the beet sugar industry is a striking ex- ample of the application of science to agriculture. A German chemist, Andreas Marggraf, made the discovery about 1 7 50 that beets and other vegetables contain sucrose, white beets carrying about 6 per cent. In 1802 one of Marggrafs pupils operated in Silesia the first beet sugar factory in the world. Interest in the new enterprise spread to France and in 1811 Napoleon issued the famous decree by which beet culture and beet sugar manufacture were established in France. A domestic supply was ur- gently needed as imports from the West Indies were cut off by the British blockade. When the blockade was raised after Napoleon's defeat, cane sugar was again avail- able and all European beet sugar factories suffered tempo- rarily. The new industry revived after a few years, and great progress was made in improving the quality of the root. The maximum sugar content is now between 18 and 21 per cent. While the beet will grow in a large area in the temperate zone, its chief centers of production are France, Belgium, and the Netherlands, central Germany, Czechoslovakia, and southwestern Russia. Beet culture extends north- ward to the Scandinavian countries and southward to Spain and Italy. In the United States beets are grown from Ohio to California and as far north as Michigan and Washington. The largest crops are grown in Colorado and California. The sugar beet requires fertile soil, sun- light and moisture without tropical heat, and exceptionally careful cultivation and hand thinning. The method of manufacture is, in many respects, similar 198 SOME GREAT COMMODITIES^ to that used in cane sugar manufacture, but the juice is extracted by the diffusion process. Thinly sliced beets are placed in large tanks which are then filled with warm water. The sugar held in solution in the cells of the beet passes through the cell walls into the water. This operation is repeated until practically the whole of the sugar content of the beet has been removed. Later steps include satura- tion, evaporation and crystallization. For the refining process bone black or charcoal may be dispensed with or used to a smaller extent than in cane refining. In the United States most factories carry out all steps from slicing to refining, but in Europe many beet sugar factories turn out raw beet sugar which is later sent to separate refineries or exported. Formerly considerable quantities of raw beet were exported from the Continent to Great Britain for refin- ing at port-side refineries. Beet pulp is used for stock feed, and the molasses by-product, like cane molasses, may be re- worked for its sugar content, distilled, or used in cattle feed. BEET SUGAR PRODUCTION Most of the world's beet sugar is made in Europe, but since the war the United States has produced more beet sugar than any other single country save Germany. Canada's beet sugar industry is small but thriving, and Australia grows about a thousand acres of beets. Beet culture is also established in China. The European beet sugar industry reached its maximum production, 8,300,000 tons, in 1912-13 and fell as low as 2,600,000 tons in 1919-20. While there has been steady improvement since that season Europe is thus far unable to supply its own needs. Germany has been, since 1880, the largest producer of beet sugar and still holds first SUGAR 199 place although several German beet factories and a con- siderable area of beet fields were awarded to Poland. Austria retains only a fraction of its former capacity. Czechoslovakia, which fell heir to the greater part of the Austrian beet industry, now occupies second place among European countries and produces sugar for export as well as for home use. Russia as well as Germany lost to Po- land. For a time at least Russia cannot export sugar in significant quantities. Poland had 70 factories in opera- tion in 1921, but their output was only 30 per cent, of the pre-war output in the same area. The French industry suffered severely from the destruction of factories, and three years after the Armistice France was still importing more sugar than she exported. Belgium, the Netherlands, Spain and Italy hold practically the same position as be- fore the war. Production of beet sugar by countries for the seasons 1913-14 and from 1918-19 to 1921-22 is in- cluded in Table B on page 196. For many years British refiners of cane sugar waged a determined battle against the continental system of government bounties and other artificial aids to beet sugar production. In some countries the beet sugar industry was permitted to raise the price of sugar exorbitantly in the home market in order to undersell cane sugar in foreign markets. British refineries found their cane sugar busi- ness steadily declining and British colonies suffered severely from the depression in the cane sugar market. On the Continent the beet sugar refining interests profited liberally at the cost of consumers and beet growers. The Brussels Sugar Convention was finally signed by all the principal European governments except Russia in 1902 and became effective in 1903. By this agreement the 200 SOME GREAT COMMODITIES signatory governments bound themselves to collect coun- tervailing duties on imported sugar on which bounties were paid in the producing country. Accordingly bounty fed sugar from Continental countries could enter the British market only on payment of duties equal to the subventions received from the home government. Prac- tically free competition between cane and beet sugar was soon restored and the immediate result was cheaper sugar for Continental consumers. In 1920 the Convention came to an end but a revival of state aid to beet sugar is unlikely, both because of the financial difficulties of Continental governments and the probable opposition of consumers. Without such aid the industry is unlikely again to offer severe competition to cane sugar in the world's export markets. Its domestic position, however, is secure, as beet culture serves several purposes in the European agricultural system, such as providing cheap cattle feed and filling a place in an exact- ing system of crop rotation. In France the use of im- proved agricultural methods in the devastated regions and the future rebuilding of factories with modern equip- ment may lead to more economical production. The American beet sugar industry is a much larger contributor to the sugar market than the Southern cane industry. It was possible to increase beet sugar produc- tion 20 per cent, in the crop year following the opening of the war in Europe, but after the entry of the United States into the war some of the increase was lost. The outturn of the crop of 1920-21 showed a remarkable ex- pansion in production which was practically maintained the following year. Efforts to establish the beet sugar industry in the United States began in 1830 and met with SUGAR 201 many difficulties. In 1890 only three beet sugar factories were in operation in the United States and their combined capacity was only 10,000 tons a year. Progress has been rapid since that time. In the season 1919-20 there were 1 06 beet sugar mills in the United States, including those under construction. In 1920 from an area estimated at about 900,000 acres a crop just under 1,000,000 tons was produced. This is far less than the proportionate yield in Europe. Cost of production is high compared with that of Cuban cane sugar. The crop is marketed exclusively in the United States, usually no farther east than Buffalo and Pittsburgh. Beet sugar crops in the United States for the years 1890, 1900, 1910 and annually thereafter are shown in Table C. TABLE C BEET SUGAR CROPS OF THE UNITED STATES, 1890, 1900, AND 1910 to 1922 Year (gross tons) 1890-91.. 3,000 1900-01 77,000 1910-11 455,000 1911-12 541,000 1912-13 624,000 1913-14 655,000 1914-15 646,000 1915-16 780,000 1916-17 735,000 1917-18 683,000 1918-19 675,000 1919-20 653,000 1920-21 969,000 1921-22 911,000 DISTRIBUTION IN THE WORLD MARKET Countries important in the sugar trade may be divided into three groups: first, those which are regularly net exporters; second, those which cannot supply their own needs and are therefore net importers, and third, countries 202 SOME GREAT COMMODITIES which produce sugar primarily for their own use and in addition either export or import as circumstances in their own or in the international market require. Export trade since the war is carried on in large units principally by the cane-producing countries, Cuba, Java, Mauritius, Hawaii, Peru, Brazil, the Philippines, Domin- ican Republic, and Porto Rico. Other West Indian islands contribute a considerable quantity of sugar. Cuba and Java are the great sources of supply and their combined crops, which formed about 33 per cent, of the world's production in 1920-21 are almost wholly available for export. Ha- waii, Porto Rico, the Philippines, and Mauritius regularly devote 80 per cent, or more of their output to export trade. Prior to the war, Germany, Austria-Hungary, the Netherlands, Belgium and Russia were net exporters of beet sugar. Net exporters of beet sugar in 1920 included Czechoslovakia, Poland, the Netherlands and Belgium. Germany is nearing the point where export trade can be resumed. The prospects of present and former Russian territories are problematical. The great importing markets are the United States, the United Kingdom, and British India, which rank in the order given. By reason of the large domestic and insular pro- duction and the preference granted to Cuban sugar, the American market is not open to other producers save to a very limited extent. The United Kingdom gives prefer- ence to sugar from its own possessions which, however, supply very little of the demand. Competition between selling countries, therefore, centers upon the markets of the United Kingdom and India, and their annual pur- chases of about 1,300,000 tons and 500,000 tons, respec- tively, represent the great prizes in the international trade. SUGAR 203 The import trade of Canada and China is of considerable proportions and Japan has a large import balance after exporting nearly 100,000 tons of sugar annually. In the pre-war period, France was the outstanding rep- resentative of the third group. Its beet production was practically sufficient to meet domestic requirements. In addition, an extensive refining industry handled imported raw sugars, permitting considerable exports of the refined product. Exports and imports were in approximate balance, the net movement in either direction being de- termined by conditions in the international market. Since the war France has been a net importer, taking as much as 540,000 tons net imports in one year. This is abnormal, and as the domestic crop improves imports are being cur- tailed. In 1921 the imports were cut down by half and exports were increased. A general view of the international sugar trade is af- forded by Table D which shows average production, con- sumption, and net imports or exports of the principal coun- tries from 1909 to 1913. TABLE D PRODUCTION, CONSUMPTION AND NET IMPORTS AND EXPORTS OF SUGAR BY PRINCIPAL COUNTRIES AVERAGE FOR 1909 TO 1913 Country Consumption Production ^J^ j,^ (in thousands of gross tons) United States 3,391 788 2,603 British India 2,830 2,251 579 United Kingdom 1,814 ... 1,814 Germany 1,467 2,130 663 Russia , . 1,181 1,404 223 Austria-Hungary 683 1,417 734 France 646 671 25 Cuba 200 1,831 1,631 Netherlands 117 217 100 Java Ill 1,299 1,188 Porto Rico 31 311 280 Hawaii 10 495 485 2O4 SOME GREAT COMMODITIES The export situation is indicated in some detail in Table E, which shows the exports in 1913 of practically all sugar- producing countries whose output entered into interna- tional trade, as well as their exports in 1919 and 1920, so far as information is available. The table indicates graphically the disruption in European sugar trade oc- casioned by the war, and the expansion in the exports of most non-European sugar-producing countries. iGross exports. *Fiscal years. *Not available. 4 Net imports. Austria alone, net imports. November and December only. TABLE E NET EXPORTS OF SUGAR FROM PRINCIPAL EXPORTING COUNTRIES, 1913, 1919 AND 1920 Country Cuba Java and Madura Germany Austria-Hungary Czechoslovakia Hawaii 2 Porto Rico 2 Mauritius Philippine Islands Netherlands Peru Belgium Russia Poland Fiji Islands British Guiana France Dominican Republic. . Martinique Trinidad and Tobago . Reunion Guadeloupe Barbados Brazil Jamaica. . . 1913 1919 1920 (in gross tons) 2,409,625 3,960,485 '3,363,773 1,257,268 1,832,118 1,481,320 1,097,066 3 4 (84,368) 1,046,774 3 1 282,899 8 (58,251) '259,323 484,452 477,393 460,922 335,703 314,082 373,890 '184,804 '298,040 '179,581 152,870 129,502 175,090 131,167 4 (8,435) 33,483 1 140,643 267,734 '246,013 107,398 4 (26,628) 14,083 1 1145,018 3 6,194 3 10,597 94,366 '64,348 '72,985 87,246 '83,140 '83,765 84,428 <(540,057) '(531,675) '77,605 159,414 153,278 '39,527 '7,365 '15,907 32.230 37,775 47,909 '38,356 '49,179 '39,300 '26,215 '17,677 '23,243 9,774 1 2 44,797 '226,346 5,139 68,233 107,413 4,428 '38,000 '36,664 SUGAR 205 The direction of exports is determined primarily by location of markets, but may be influenced by political control, tariffs, or trade connections. The fact that Cuba receives tariff preference in the United States makes it advantageous to dispose of as much of the crop as possible in that market. This fact also restricts the sale of West Indian sugars in the United States except for reexporta- tion after refining. Sugar from British and French West Indian colonies receives preferential tariff treatment from the home governments. Good keeping qualities and the ease with which sugar can be shipped make the sugar trade very flexible. Philippine sugar bears the cost of shipment to New York and sells in competition with Porto Rican. Java sugar is marketed both in the East and in Europe. South American countries such as Argentina and Peru, in which British capital is invested, pay part of their trade balances in sugar shipped to the United Kingdom. Cuba is secure in the position of foremost exporter of sugar in the world. Distribution of Cuban exports in five pre-war years and from 1918 to 1921 is shown in Table F. TABLE F EXPORTS OF RAW SUGAR 1 FROM CUBA, 1909-13, AND 1918 TO 1921 Country (5-r.) 1918 1919 192 1921 (in gross tons) United States ...... 1,672,196 2,246,946 3,116,226 2,514,655 2,118,985 United Kingdom... 85,382 860,647 603,166 2661,584 2 340,800 Other countries.... 14,558 93,799 231,538 187,534 130,735 Total ......... 1,772,136 3,201,392 3,950,930 3,363,773 2,590,520 iThere are also small exports and imports of refined sugar. Includes amounts exported to other European countries. British India is normally the chief purchaser of Java sugar, but in 1920 exceptional prices in the United States 206 SOME GREAT COMMODITIES and Europe attracted increased quantities to the west. Javan exports, however, were not permanently diverted from pre-war markets. Shipments from the crop of 1921 show a return to Eastern markets. Table G shows aver- age annual exports for the fiscal years 1909-13 and exports from 1918 to 1921. TABLE G EXPORTS OF SUGAR FROM JAVA BY COUNTRIES 1920 1921 Country 1909-1913 (5-yr. aver.) 1918 (in 1919 gross tons) British India and Ceylon 1 466,823 370 919 355 716 260479 662 431 Hongkong. 194067 321 589 217 158 158 606 Q7Q Q6 Port Said and Suez, for orders 2 168,414 17788 121 203 306 720 3 Japan. 148 787 367 978 369 596 151 976 9fi4 QQ9 Straits Settlements, Siam, and French Indo-China 73,570 195 034 94763 39948 82 267 Australia and New Zealand. 46843 6273 112 556 85892 17542 United States. 29 151 8 103 1 898 245014 300 China 24,938 19,800 1 955 1638 33876 United Kingdom Other countries of Europe Other countries 22,224 18,427 34,882 73,877 64,520 68,261 209,264 272,528 75,624 55,321 142,669 33214 10,126 96,033 116 168 Total 1,228,126 1,514,142 1,832,261 1,481,477 1,656,671 ^Including exports to Pondicherry. ^Chiefly to Europe. 'Not separately reported. Total consumption of sugar was at a low ebb after the war. Reduced purchasing power in many consuming markets restricted the effective demand, and disorganiza- tion of industry in Europe curbed production. Although over 18,000,000 tons of sugar were made and used at the opening of the war, less than 16,000,000 tons annually were produced in the two years after the Armistice. Im- SUGAR 207 provement in 1920-21 brought the total up to 16,700,000 tons. In the United States per capita consumption from 1919 to 1921 was at about the same rate as in 1914 and net imports were larger than in either 1913 or 1914. Evidently reduction in sugar consumption occurred else- where; in Europe, which produced less than before the war, in the United Kingdom where industrial depression affected all markets, and in other countries which re- duced their purchases. Consumption expanded notably in 1921-22. The British market from 1914 to 1921 was controlled by the Royal Commission on the Sugar Supply. This body imported the entire sugar requirements of the coun- try, distributed to refiners and manufacturers and finally enforced rationing measures. The Commission closed its active operations in February, 1921, with a net loss of about 25,000,000, which was the cost to the public treasury of maintaining a non-speculative market during and after the war. From 1,000,000 to 1,900,000 tons of sugar are used annually for home consumption in the United Kingdom. Export trade is almost negligible. A radical change took place from 1913 to 1920 in the sources of imports. In 1913 sugar from Europe formed 81 per cent, of the imports, Cuban cane n per cent, and other sugar 8 per cent. In 1920 only i per cent, of the total was beet sugar, the Cuban share increased to 38 per cent, and the balance was other cane sugar. Return to pre-war conditions was well under way in 1921, when European sources furnished 20 per cent, of the imports and Cuba the same percentage. Table H shows imports into the United Kingdom by countries for 1913 and from 1919 to 1921^ 208 SOME GREAT COMMODITIES TABLE H IMPORTS OF SUGAR INTO THE UNITED KINGDOM FOR 1913 AND 1919 TO 1921 1913 1919 1920 (in gross tons) 1921 Country Raw sugar Germany Austria-Hungary Other countries in Europe . . . Java Cuba British West Indies 1 Peru Mauritius Brazil Other countries not in Europe Total 1,046,715 1,142,323 1,251,544 811,170 472,026 12,929 160,858 49,846 1,137 2,458 13,957 99 172,838 335,599 26,172 224,227 587,252 516,487 256,798 47,736 113,307 124,878 111,733 27,487 77,577 48,883 73,385 20,075 153,682 139,193 184,748 5,133 6,971 12,439 79,964 39,228 29,559 58,678 64,413 Refined sugar 2 Germany. 465 453 253 126 1 Austria-Hungary. . . . 198 064 990 102 138 Netherlands 178,567 20643 1066 91032 Belgium. 49764 5532 2068 42979 France. . 26572 33 294 3058 Other countries in Europe. . . . United States 3,448 385 712 222,083 103 102,273 107,371 171 816 Java. 117060 5014 4340 Other countries not in Europe 292 94,828 8,766 47,609 Total 922,545 462,134 119,812 468,344 Grand total 1,969,260 1,604,457 1,371,356 1,279,514 Including British Guiana and British Honduras. 'Including sugar candy. THE UNITED STATES MARKET Annual consumption of sugar in the United States amounts to about 4,030,000 tons, which provides nearly 85 pounds per capita. Sources of supply may be roughly divided as follows: Cuba furnishes about one-half, the domestic beet and cane production together about one- fourth, and insular possessions the remaining fourth. Any large increases which may occur in domestic production and that of Porto Rico, Hawaii and the Philippines are SUGAR 209 likely to narrow the market for Cuban sugar in this coun- try, although the Cuban product costs less to produce than American cane or beet. Total sugar consumption in continental United States and distribution according to sources of supply for the years 1913, 1919? 1920 and 1921 are shown in Table I. TABLE I CONSUMPTION OF SUGAR IN THE UNITED STATES AND SOURCES OF SUPPLY 1913 1919 1920 1921 (in gross tons) Total consumption 3,743,139 4,067,671 4,084,672 4,107,328 Sources of supply: Louisiana and Texas (cane) . . 207,708 154,034 81,625 272,773 United States (beet) 625,314 872,253 454,446 946,977 U. S. insular possessions (cane) Hawaii 1 506,555 514,824 390,552 482,322 Virgin Islands 8,286 10,490 5,170 Porto Rico 331,103 286,880 334,936 373,762 Philippine Islands 44,620 72,511 114,048 131,168 Miscellaneous 2 19,450 24,094 17,095 2,274 Cuba (cane) 1,990,831 2,077,051 2,127,461 1,866,153 Foreign countries (cane and beet) 17,558 57,738 554,019 26,729 Total, raw and refined. . . 37743,139 4,067,671 4,084,672 4,107,328 Consumption of refined sugar. 3,678,144 3,899,944 3,474,770 3,895,026 Deluding a small quantity of refined sugar. Maple sugar, etc. To a greater extent than any other country, the United States reexports imported sugar which has passed through domestic refineries. Practically no raw sugar enters into American exports. Europe's increased demands during the war caused great expansion in American exports, which rose from an average of 32,000 tons in the fiscal years 1910-14 to 700,000 tons in 1916. For the calendar year 1921 about 400,000 tons of refined sugar were ex- 2IO SOME GREAT COMMODITIES ported. Since early in the war the United Kingdom and France have taken over half the exports, the remainder being widely distributed. Government operation figured prominently in the sugar market, both local and international, during and after Average for the year TABLE J PRICES OF RAW AND REFINED SUGAR IN THE UNITED STATES Raw 96 degree centrifugal duty Pd. N. Y. Refined .o.h. New York (cents per pound) 1900 4 60 1901 4.00 1902 3.50 1903 3.70 1904 4.00 1905 4.30 1906 3.70 1907 3.80 1908 4.10 1909 4.00 1910 4.20 1911 4.50 1912 4.20 1913 3.50 1914 3.80 1915 4.70 1916 5.80 1917 6.30 1918 6.40 1919 7.50 Price on 15th of month or nearest available date. 1920 January 13.04 February 12.04 March 11.54 April 18.56 May 21.57 June 19.56 July 18.31 August 13.04 September 10.78 October 8.03 November 6.51 December. . 4.63 5.30 5.10 4.50 4.60 4.80 5.30 .50 .70 .90 .80 .00 .30 ,10 30 ,70 60 6.90 70 80 8.90 17.10 14.75 11.00 10.00 8.25 SUGAR 2ii 1921 Raw Refined) January 5.52 7.75 February 5. 77 7. 25 March 6.02 8.00 April 5.64 7.65 May 4.89 6.50 June 4.00 5.75 July 4.37* 5.20 August 4.75 6.00 September 4.00 5.60 October 4.11 5.30 November 4.11 5.20 December 3.67 5.20 1922 January 3.61 4.80 February 3.67 5.00 March 3.92 5.30 April 3.86 5.25 May 4.04 5.30 June 4.48 5.80 *No open market for refined sugar from January to August 11. Refiners allocated sugar to regular customers at non-competitive prices. the war. In 1917 the United States Food Administration supervised American imports of raw sugar, prices and dis- tribution. An international sugar committee was estab- lished later in the same year to procure supplies for the Allies as well as the United States. That body negotiated the purchase of the Cuban crop of 1917-18 from a Cuban commission. The United States Sugar Equalization Board, created by the President in 1918, with the Royal Commission on the Sugar Supply purchased the Cuban crop of 1918-19. Regulation of domestic trade was relaxed in 1919 and pur- chases for England, France and Italy were made by the Allied Provisions Export Committee. Reference has al- ready been made to the operations of the Royal Commission on the Sugar Supply. The purchase of the Cuban crop of 1919-20 was not authorized by the President of the 212 SOME GREAT COMMODITIES United States, and the Equalization Board passed out of existence early in 1920. The marketing of the Cuban crop of 1920-21 was placed in the hands of the Cuban Sugar Finance Committee which was established by decree of the President of Cuba in order to "sell the sugar production in an orderly manner and . . . so as not to permit the establishment of an artificial price." The Committee exercised its powers until the close of 1921, but its efforts to market the crop were only partly success- ful, as at the beginning of 1922 stocks of more than 1,000,000 tons of sugar remained in Cuba. With increased consumption after the Armistice there developed in 1919 a general belief in the existence of a serious shortage and the removal of government control was followed by excessive speculation. As the price rose, imports were attracted from all quarters of the globe. The year 1920 was the period of most marked fluctuations in sugar prices ever recorded in the United States. The spectacular fall from a maximum of 23.57 cents a pound duty paid, for raws (May 19, 1920) to 4.63 cents (Decem- ber 14, 1920) will long be remembered in the trade. Heavy stocks of sugar were carried into 1921, prolonging the period of price declines, and it was not until 1922 that re- covery began. Yearly average prices of raw and refined sugar from 1900 to 1919 and quotations on the fifteenth of each month or the nearest available date from January, 1920, to June, 1922, are shown in Table J. NOTE: Tables A, B, C, I and J are based upon statistical material from Willett and Gray's Weekly Statistical Sugar Trade Journal. WHEAT WHEAT is the main bread grain of all of Europe, North and South America and Australia, and of the white population of Africa, and is important as a food even in the rice-eating nations of the Orient, where its use appears to be increasing. It is successfully grown from the Tropics to the Arctic Circle and occupies nearly half as much area as all other reported cereal crops combined. In the years immediately preceding 1914 slightly over 260,000,000 acres were sown to wheat, and total world production averaged more than 3,500,000,000 bushels. The requirements of those countries whose domestic crops were insufficient for their needs were sup- plied chiefly from the surplus of Russia and the Balkan region of Europe, the United States and Canada, Argen- tina, Australia and India. The net movement from the exporting countries averaged 584,000,000 bushels, or about one-sixth of the total world crop. Before the war, the Russian Empire led the world both in acreage planted to wheat and in total production. The main wheat belt is in the southern and southeastern parts of European Russia, which are particularly well adapted in climate and soil, and are convenient for water transport. About one-fifth of the total Russian crop was exported before the war, being shipped primarily through Black Sea ports. Wheat has been the chief cash crop of the Russian peasant. Potential production of wheat in 213 214 SOME GREAT COMMODITIES Russia is very great. The average yield is only ten bush- els to the acre, due to unintelligent methods of farming as well as to erratic rainfall. Less than one-fifth of the total Russian crop prior to the war was produced in Asi- atic Russia, which is probably the greatest undeveloped wheat area of the world. The United States ranks next to Russia as a wheat pro- ducer, nearly one-fifth of the world crop having been grown here prior to the war. Wheat can be raised in practically all sections of the country, but the surplus which feeds the United States and plays a considerable part in making up the deficiency of the European supply comes from the great plains region west of the Mississippi River. In 1920 Kansas alone produced more than one-sixth of the total outturn of the country, and the seven plains states of Kansas, Nebraska, North Dakota, South Dakota, Minne- sota, Oklahoma and Missouri produced over half of the total crop. The proportion of the crop exported has varied considerably, averaging immediately prior to the war less than one-sixth. From August i, 1920, to July 3 1, 1921, exports amounted to nearly half the 1920 crop, a situation made possible by the large carry-over from the previous harvest. The best wheat areas of this country are now under cultivation, and in the normal course of events, as the United States becomes more and more an industrial country and population grows, wheat exports will tend to decline. India is third among wheat-producing countries. The main part of the crop is grown in the northwestern prov- inces, and nearly half the crop of the Punjab is grown under irrigation. Wheat is a supplementary cereal crop in India, and there is wide variation in the home demand, WHEAT 215 depending not only upon general prosperity, but upon the crops of rice and grain sorghums. Indian exports do not average more than one-sixth of the total crop, and the salability of the grain is somewhat impaired by lack of grading and by the inclusion of dirt from the threshing floor. The great importance of Europe as a wheat producer is commonly overlooked because of heavy European grain imports, which are due not to failure to recognize the importance of wheat growing or to lack of a suitable climate or soil, but to the existence of a dense population which has maintained itself by manufacturing, and has, therefore, become dependent in large part upon an im- ported food supply. Before the war, Europe, including Russia, produced half of the entire wheat crop of the world, and exclusive of Russia, the European crop was one-third of the world crop. The French crop alone from 1908 to 1912 was nearly half as large as the wheat crop of the United States, although the area of France is only four- fifths of the area of Texas. Canada, Australia and Argentina are all factors of great importance in supplying the international market. Cana- dian prosperity is to a large degree dependent on the wheat crop, since the value of this crop is equal to approximately one-third of the value of all farm crops. The plains region, extending northward from the great wheat-growing section of the United States, is the chief producing area of the Dominion. The large estates of Argentina and the shifting and irresponsible character of farm labor are a serious obstacle to the development of improved farming methods, while the scarcity of foreign capital during and since the war has militated against the extension of trans- 2i6 SOME GREAT COMMODITIES portation facilities and the opening up of new land. Thus there has been, of late, little tendency toward increasing the Argentine crop except as the chance result of favorable seasons. In Australia, two-thirds of the cultivated land is now in wheat. In each of these countries a small popu- lation accounts for the large exportable surplus. The consumption of wheat cannot be ascertained with any degree of exactness, because not only are crop figures estimates at best, but it is also impossible to secure com- plete information as to carry-over from one harvest to the next of grain in farmers' hands or of flour in consumers' hands. The problem of estimating consumption in ex- porting countries is distinctly different from that in im- porting countries. In the latter group, under ordinary circumstances, with no inducement to accumulate an ab- normally large surplus and no situation resulting in a depletion of reserves, the carry-over may be reckoned at substantially the same figure at the end of a given harvest year as at the beginning. In such a situation net imports added to production give an approximation of the amount of wheat required for seeding and for human consumption, together with the quantity used for feed. On this basis the apparent consumption of wheat in the chief importing countries prior to and since the war is presented in Table A, which shows also production and net imports for those years. It may be assumed that these countries, particu- larly the European ones, had but small reserves at the close of the harvest year ending July 31, 1918, nor does a normal reserve appear to have been accumulated up to August i, 1922. Western Europe is the chief area of wheat deficiency. The United Kingdom alone took prior to the war almost WHEAT 217 half the total imports of the countries enumerated, while Germany took nearly one-seventh, Italy and Belgium each about one-tenth and France one-fifteenth. Since 1918 the total production of the designated importing countries has been less than the pre-war average, and the quantity of wheat apparently available for consumption has likewise been less, although net imports in 1919-20 and 1920-21 were higher than before the war. In 1921, however, all the countries enumerated except Belgium and Germany estimated outturns greater than before the war, and the total estimated production was 25,000,000 bushels above the pre-war level. The population of Europe has increased relatively little since 1914. Wheat is consumed chiefly in the form of flour, and as indicated, the figures of trade in and apparent consump- tion of wheat in the above table and in that following include flour reduced to wheat equivalent. In most European countries a large part of the wheat required is imported in the form of grain and milled within the coun- try. In fact, prior to the war Austria-Hungary, Belgium, France, Germany, Italy and Spain, though importers of wheat, were customarily exporters of flour to varying degrees, supplying principally neighboring countries of deficiency or their own outlying colonies. The greater part of Africa, western Asia, some of the South American countries, the West Indies and the islands of the Pacific, where milling is little developed, receive their wheat sup- plies chiefly in the form of flour. Russia was, prior to the war, the chief wheat-exporting country of the world, furnishing to the international mar- ket an average of more than 150,000,000 bushels per year. The difficulties of transport during the war and the un- 2i8 SOME GREAT COMMODITIES TABLE A PRODUCTION, NET IMPORTS AND APPARENT CONSUMPTION OF WHEAT, COUNTRIES, FIVE-YEAR PRE-WAR 1908-09 to 1912-13 (5-yr. average) Production* im N rts , <*, Production' (in thousands of bushels) Belgium 14618 49 526 Denmark 4,868 5827 France. 317 070 32794 Germany 145 578 66 992 Italy Netherlands. . 171,114 4 887 53,027 20427 Norway 307 3347 Spain 131 948 3 784 Sweden. 7612 7091 Switzerland 3,303 8 16202 United Kingdom. . . . Japan 59,081 23 500 211,971 2 902 Egypt *33 205 7421 Tunis. 5327 926 Union of South Africa 5,454 5,930 Total of countries enumerated" 927,872 488,167 64,144 4,919 9 10,695 6,330 6266 349,864 225,715 71,455 212,570 93,274 3 224,141 183,277 92,614 25,314 5,274 11,812 3,654 1,087 6,804 135,732 135,697 11,452 14,703 8,887 4,733 819,505 5,232 86,443 271,052 96,078 171,631 26,402 31,013 6,815 40,626 32,137 980 6,253 11,941 53,574 11,384 8,337 1,467 1918-19 Net Apparent imports* consumption* 6,064 297,170 275,891 17,086 7,891 147,149 13,620 811,675 267,709 37,828 33,117 8,367 9,804 1,416,039 849,198 382,366 1,133,371 ^Harvests of 1908-12, 1918, 1919, 1920 and 1921, for countries in the Northern Hemisphere; 1908-09 to 1912-13, 1918-19, 1919-20, 1920-21 and 1921-22, for countries in the Southern Hemi- sphere. *European harvest years, August 1 to the following July 31, for countries in the Northern Hemi- sphere; calendar years 1909-13, 1919, 1920 and 1921 for countries in the Southern Hemisphere. Includes flour reduced to wheat equivalent on the basis of a 75 per cent, milling ratio. Not available. Net imports are for the period July 1, 1920, to June 30, 1921. WHEAT 219 INCLUDING FLOUR REDUCED TO WHEAT EQUIVALENT, IN THE CHIEF IMPORTING AVERAGE AND 1918-19 TO 1921-22 Production* 10,564 5,922 187,074 79,694 169,753 5,694 1,071 129,238 9,508 3,523 71,504 30,673 30,134 6,981 5,129 1919-20 Net imports 2 29,533 1,526 87,144 12,000 79,317 18,630 6,349 17,139 7,373 812,146 210,551 12,685 8,714 6864 6,825 746,462 509,068 Apparent consumption* Production 1 (in thousands of bushels) 40,097 7,448 274,218 91,694 249,070 24,324 7,420 146,377 16,881 815,669 282,055 43,358 38,848 6,117 11,954 1,255,530 10,274 7,389 236,908 82,575 141,324 5,765 999 138,592 10,527 3,586 56,834 28,406 31,707 5,228 8,112 768,226 1920-21 Net imports 1 32,168 334 67,626 734,583 98,020 18,717 3,786 19,778 6,535 813,781 198,108 5,737 8,976 "1,002 1,443 Apparent consumption' 42,442 7,723 304,534 U17.158 239,344 24,482 4,785 158,370 17,062 817,367 254.942 34,143 40,683 106,230 9,555 510,594 1,278,820 1921-22 Production* 14,494 11,206 322,738 107,789 192,819 8,685 972 145,137 12,576 3,799 73,800 26,918 37,007 10,622 8,688 977,250 Net exports. Estimated; net imports from January 1, to July 31, 1920, amounted to 7,680,000 bushels. 'Exclusive of net imports during the first four months of 1921, for which data are not available. Exclusive of net imports of flour for which data are not available. Four-year average. "Net imports are for the period from September 1, 1920, to August 31, 1921. "Exclusive of those for which data are not available, as noted. 220 SOME GREAT COMMODITIES settled conditions within the country since that time have eliminated Russia as an exporting country and have culminated in the present food shortage there, following the failure of the 1921 crop. The deficiency in the inter- national supply as a result of Russia's withdrawal has, however, been made up by increased production in other countries. The brunt of supplying the deficiency was borne by the United States and Canada, not only because of their facilities for increasing production but also because of the short haul in shipping to Europe. From a pre-war production of 666,877,000 bushels the yield in the United States climbed to the record crop of 1,025,801,000 bushels in 1915, and the average production for the war years was 85> o 53>oo bushels. Canada likewise increased its out- turn to an average during the war of nearly 270,000,000 bushels, as compared with a pre-war average of 173,247,000 bushels. Argentina and Australia increased production also. The former averaged during the war years, with the exception of 1916-17 when the yield was very poor, 186,505,000 bushels and the latter averaged 130,464,000 bushels, as compared with a pre-war outturn of 157,344,000 bushels and 82,340,000 respectively. The difficulty of re- leasing ships for the long haul required to transport the wheat to Europe, however, made it hard to use these supplies, and the close of the war found large accumula- tions of grain in both countries. This grain was later worked off in increased exports to Europe, and at the close of the 1920-21 harvest year reserves in all exporting countries had been reduced close to the normal carry- over. The average production, net exports and quantity of WHEAT 221 wheat available for consumption in the chief exporting countries prior to 1914 are shown in Table B, together with similar figures for the period since the close of the war. It must be remembered, however, that the quantity availa- ble for consumption includes carry-over, and in several of the exporting countries the figures give evidence of the backing up of supplies. Total production in the countries enumerated, exclusive of Russia, has not since the war reached the earlier level when that country was included, but because of the ac- cumulation of grain in the Southern Hemisphere and the fortune of favorable crops net exports have been above the pre-war figure. The requirements of the 1921-22 harvest year have been met entirely from current produc- tion, thus demonstrating that even without Russia the world's present bread needs can be met so long as harvests are reasonably good. Supply and demand are nicely balanced, however, and a serious crop failure probably would cause a world shortage of wheat. The flexibility of the wheat crop in meeting unusual con- ditions is well shown by the adjustments of the war years, but in general, allowance must be made for a certain lag in the response to altered circumstances. Almost a year intervenes before an increased or a decreased planting can affect world supply. The relative inelasticity of demand for wheat causes a quick reflection in price of any maladjustment between supply and demand. While other factors, such as inflation, must also be taken into account in following the course of the American wheat price since 1914, a fear of shortage in the main consuming centers, partly justified and partly the result of the specu- lative spirit of the time, was an underlying factor in the 222 SOME GREAT COMMODITIES TABLE B PRODUCTION, NET EXPORTS AND APPARENT CONSUMPTION OF EXPORTING COUNTRIES, FIVE-YEAR PRE-WAR 1908-09 to 1912-13 (5-yr. average) Produc- tion* Net exports 1 Apparent Northern Hemisphere Austria, Hungary and the Balkan States . . . Russia (in Europe and Asia, excl. Finland) . . . Algeria India Canada United States Estimated carry-over above normal at beginning of harvest year 1918-19 (in thousands of bushels) Produc- tion 1 1918-19 Net exports' 364,543 55,566 308,977 734,942 33,573 323,899 173,247 666,877 150,880 4,795 48,317 79,149 96,740 Southern Hemisphere Argentina 157,344 94,918 Chile 22,378 2,417 Uruguay 7,196 1,389 Australia 82,340 49,415 Total of countries enumerated 11 2,566,339 584,062 28,778 275,582 94,098 570,137 62,426 19,961 5,807 32,925 867,000 90,000 3 3 158,000 <63,878 49,232 370,384 189,075 921,438 8,873 13,585 95,849 276,868 171,586 123,874 20,278 2,509 6,890 1,373 78,021 109,999 583,586 1,982,753 181,000 1,870,782 632,930 'Harvests of 1908-12, 1918, 1919, 1920, 1921 for countries in the Northern Hemisphere; 1908- 09 to 1912-13, 1918-19, 1919-20, 1920-21, 1921-22 for countries in the Southern Hemisphere. *European harvest years, August 1 to the following July 31. for countries in the Northern Hemisphere; calendar years 1909-13, 1919, 1920, 1921 For countries in the Southern Hemisphere. Includes flour reduced to wheat equivalent on the basis of a 75 per cent, milling ratio. 8 Not available. 'Exclusive of Hungary and Jugoslavia, for which data are not available. 'Exclusive of Hungary, Transylvania, Slovakia and Sub-Carpathian Russia, for which data are not available. WHEAT 223 WHEAT, INCLUDING FLOUR REDUCED TO WHEAT EQUIVALENT, IN THE CHIEF AVERAGE, AND 1918-19 TO 1921-22 1919-20 1920-21 1921-22 Apparent consump- tion* Produc- Net Produc- tiom exports' "*!? tion* Apparent 40,359 356,799 93,226 577,570 (in thousands of bushels) '167.234 * 204,382 725,608 3 > 14,484 1,932 280,233 2,070 193,260 91,358 934,265 232,487 t 12,552 278,163 101,902 701,778 6,797 377,850 263,189 787,128 '5,578 15,052 165,784 302,948 '229,990 s 12,375 362,798 97,405 484,180 260,316 33,760 250,444 300,858 794,893 137,712 17,769 5,517 126,022 214,121 198,603 19,918 1,305 5,948 59 47,423 61,908 15,518 18,613 169,739 25,177 7,768 150,469 62,317 2,030 367 115,538 107,422 23,147 7,401 34,931 154,859 23,658 12,124 136,449 1,354,974 1,876,886 589,722 "1.134,415 1,992,499 632,850 1,359,649 1,967.361 Exclusive of net exports from Bulgaria from March 1 to July 31, 1921. 7 Net imports. 8 Short of average carry-over. Gross exports. "With carry-over from previous year of about 75,000,000 bushels, there were left for seeding and consumption about 60,515,000 bushels. "Exclusive of those for which data are not available, as noted. "Exclusive of Australia. 224 SOME GREAT COMMODITIES movement of prices during that period. Table C shows prices of representative grades of wheat on the fifteenth of each month, or nearest available date, from 1913 through 1921. The factors entering into demand are much more com- plicated than are those which determine exportable sur- plus, and the supply of other cereals and breadstuffs must also be taken into consideration. Rye is extensively used as a bread grain in most north European countries, and to a less extent elsewhere. A number of wheat-importing countries are important producers of rye. In such coun- tries, in times of dearth or when wheat is unduly expensive, it is always possible to consume more rye as a bread grain, if it is available, and thus to reduce wheat importations. It is significant that before the war, net exports of rye from Germany amounted to more than one-third of the net imports of wheat. While it is true that a large part of the rye crop is customarily used to feed animals, and measured in terms of net exports only a little more than one-twentieth of the total, or 80,000,000 bushels, entered into international trade before the war, nevertheless, con- ditions affecting the supply of and demand for rye are always of great importance in correctly appraising the wheat situation. World production of rye is almost half that of wheat. In Table D is shown rye production by countries in the pre-war years, and 1918, 1919, 1920 and 1921, so far as data are available. It will be noted that rye is raised principally in the north European countries. It will grow in a less fertile soil and in a more severe climate than wheat. Efforts to increase the rye crop in Canada have not been without effect, production in 1921 being eleven WHEAT 225 TABLE C PRICE OF WHEAT AT CHICAGO ON THE FIFTEENTH OF EACH MONTH FROM 1913 TO 1920 Month 1913 1914 1915 1916 1917 1918 1919 (in dollars per bushel) NO. 1 NORTHERN SPRING January 91 February March. . . April May June July August. . . September October. . November. December. 1920 1921 NO. 2 RED WINTER January 1 . 11 * February 1 .05 March 1.02 April 1.04 May 1.04* June 1.03 July. August September. October. . . November. December. .84{ .861 .91 .901 .94 .95| .96* .95i .94 .94 .96 .90 .78^ .90; 1.01 1.09 1.13 1 .53 .58 .60 1.281 1.26$ .131 .17J .11 .22 .03 .13 1.19 1.14} 1. 1.21* 31. 13 19 181 f 1 1.92 1.77 1.86* 2.62* 3.10 2.77 2.15 2.24 2.17 2.17 2.17 2.17 2.17 2.17 2.17 2.17 2.17 2.17 2.25 2.23 2.24* 2.24 2.24 2.30* 2.41 2.30 2.35 2.57 3.00 i 2.23 2.23* 2.23* 2.24 2.29* 2.45 2.65 2.40 2.47 2.75 3.06 2.95 2.85 2.56 2.49 2.39 2.11f 2.00 *No quotation. 2 Nominal. Quotation for seventh of the month. 1.98 2.01 1.65 1.24 1.54 1.40 1.31 1.25 1.27 1.22 1.15 1.14 times the pre-war average, and nearly double the outturn in any other year since that time. The 1921 crop of the principal producing countries for which comparable data are available was about 40 per cent, greater than that of 1920. Barley is also used for human food, alone or in combina- tion with wheat, in a number of countries. Moreover, the milling equivalent of wheat, which before the war was roughly estimated to be about 75 per cent., can be raised, and potato flour, corn flour and rice flour can be combined with wheat flour in the making of bread. Not the least important consideration in reckoning the supply of food- 226 SOME GREAT COMMODITIES TABLE D RYE PRODUCTION IN PRINCIPAL COUNTRIES 1908-12 (5-yr. aver.) 1918 1919 1920 1921 (in thousands of bushels) Austria, Hungary and the Balkan States Belgium Denmark Finland France Germany Greece Italy Luxemburg Netherlands Norway Poland Portugal Russia (in Europe and Asia) Spain Sweden Switzerland United Kingdom Canada United States Total of countries enu- merated 7 1,689,366 603,356 631,010 579,203 800,572 Exclusive of Hungary, Jugoslavia, Transylvania, Slovakia, and Sub-Carpathian Russia, for which data are not available. 2Not available. 8 1911 only; data for other years not available. Including maslin. 'Four-year average. Ireland only. 'Exclusive of those for which data are not available, as noted. 175,672 '54,314 '57,958 85,148 112,116 22,795 5,446 14,505 18,169 21,274 18,292 12,727 14,909 13,242 12,205 2 8,639 10,506 9,173 10,386 49,354 28,936 30,579 34,494 44,496 433,549 316,483 240,174 194,266 267,662 3219 1,012 1,123 1,360 4 3,152 6 5,264 5,232 4,571 4,539 5,634 622 387 368 338 488 15,973 12,954 14,290 14,246 16,646 952 1,012 983 970 1,043 2 2 103,049 73,663 167,224 2 4,838 3,856 5,154 2 877,705 2 2 2 2 27,336 30,446 23,297 27,831 29,119 24,734 19,293 23,074 23,056 27,813 1,665 1,850 1,575 1,622 1,800 246 ^242 143 "136 141 1,977 8,504 10,207 11,306 21,455 33,011 91,041 75,843 60,490 57,918 stuffs, particularly in the present situation in view of the impaired purchasing power of many European peoples, is the knowledge gained during the war of the use of sub- stitutes not only for wheat flour but for bread itself, and the extension of the habit of using them. Thus, aside from the use of potatoes in the form of potato flour, they are a wheat substitute to an extent perhaps only to be measured by the supply in relation to the supply and price WHEAT 227 of wheat, and the availability of other foods which can supply the food elements which potatoes lack. Corn- meal, widely used for food in the United States, is an ac- cepted article of food in some parts of the Danube Basin which normally export wheat, and also in Italy. Large crops of corn and other coarse grains may indirectly lessen the demand for wheat by rendering available ample sup- plies of animal products at relatively low prices. While in any one country the entire wheat crop, like that of other agricultural products, becomes available within a short time, the world supply is replenished at frequent intervals. Every month in the year finds wheat being harvested in some part of the globe, as is shown in the accompanying chart. This fact decreases the neces- sary cost of marketing wheat by lessening the time be- tween harvesting and consumption during which the sup- ply must be carried by some one. Moreover, climatic risks are scattered, so that both in time and quantity the danger of crop failure in one section has a reasonable chance of being offset by a particularly favorable out- turn elsewhere. Production in the Northern Hemisphere is, generally speaking, fairly reliable, but the Southern Hemisphere crops and those of India are subject to greater climatic hazards, and the outturn shows marked variation despite relatively constant acreage. For example, the Australian crop of 1914-15 amounted to only 25,000,000 bushels, and the country became a net importer during the following season, although the area planted was some- what larger than that of the previous year when over 100,000,000 bushels were produced. Apart from the unprecedented conditions arising out of the World War, the population of the world is far from 228 SOME GREAT COMMODITIES WHEAT HARVESTING SEASONS IN DESIGNATED COUNTRIES 1 COUNTRY JAN. FEB. MAR. APR MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. Argentina Australia Chile British India Egypt Algeria Tunis Morocco Spain Hnit**H ^totoft M^MMM MB i | ^M > > Italy Montenegro Hungary Austria Rumania Germany Belgium Luxemburg Norway Canada Russia Japan l^BHMl oweden Netherlands Switzerland Great Britain Ecuador Peru Bolivia Paraguay Brazil Union of & Africa New Zealand 1 *ATIC NAL BANH OF = = h-..-.i a MM ORK :oMrv E.RCE . IN I 1 mmim 1EW As compiled by the United States Department of Agriculture. WHEAT 229 pressing against its wheat supply. Large areas suitable for growing wheat have not yet been developed, notably in Siberia and Canada. A potential source of increased production probably still more important in the aggregate is the possibility of more intensive use of the land already devoted to wheat. There is wide variation among coun- tries in yield per acre, which is not altogether due to differ- ences in climate and the fertility of the soil. The "black earth" of southern Russia is one of the most fertile of soils, yet the average yield of wheat per acre prior to the war was only ten bushels, whereas Germany and the United Kingdom each produced about thirty bushels to the acre. Table E shows average yields of wheat per acre in principal producing countries before the war, as reported to the International Institute of Agriculture. The highest aver- age yield reported was forty-six bushels in Denmark. The selection and development of suitable high-yielding va- rieties of wheat frequently plays an important part in increasing production without extending acreage. The factors which make a favorable environment for wheat raising are numerous and their relative importance is not definitely known. A warm, humid climate encour- ages the development of injurious diseases and therefore is not desirable, while at least nine inches of annual rain- fall appear to be necessary unless irrigation is to be re- sorted to. Even more important than amount is the dis- tribution of the rainfall, to provide moisture during the growing season and warm, dry harvest weather. Silt and loam of high fertility and with large humus content seem to be the most successful soils for wheat. As a consequence, most of the great wheat areas of the world are rolling plains, and in Italy alone are the fields not 230 SOME GREAT COMMODITIES sufficiently level for the use of machinery in planting and harvesting. TABLE E AVERAGE YIELD OF WHEAT PER ACRE, 1908-12 (1908-09 TO 1912-13 IN THE SOUTHERN HEMISPHERE) IN PRINCIPAL COUNTRIES Bushels Bushels Country per acre Country per acre Austria 20.4 Switzerland . 2 31.1 Belgium 37.3 United Kingdom 31 .8 Bulgaria 15.3 Canada 18.0 Denmark 46. 1 United States 18. 1 France 19.6 British India 11 .6 Germany 30.8 Japan 20.2 Hungary 18.3 Algeria 9.5 Italy 14.4 Egypt 2 25.6 Netherlands 35.5 Tunis 4.3 Norway 24.7 Union of South Africa *8.2 Rumania 17.4 Argentina 10 . Russia (in Europe) 10.0 Chile 20. 1 Serbia n5.6 Uruguay 10.0 Spain 14 . Australia 12. 2 Sweden 28.5 New Zealand 30.5 ^Three-year average. *Four-year average. In a moist climate grow what are known as soft wheats, while a dry and severe climate favors hard wheats. Russia appears to have been the original home of hard wheat. From there it was introduced into the plains region of North America where its suitableness for the climate is rapidly winning it first place in popularity. These sec- tions constitute the two great hard wheat areas of the world. There is a difference in milling qualities of hard and soft wheats, but as American millers have become accustomed to handling the new varieties, hard wheats have tended to command a price equal to or somewhat higher than that of soft wheats, as they were accustomed to do in Russia. Wheat is not at present raised extensively where the WHEAT 231 growing season is less than ninety days in length. Severe winters, which are usually accompanied by a short growing season, make it impossible to raise fall-sown wheat, and extension of wheat raising into such areas depends upon the success of spring-sown varieties. The chief spring wheat areas of the world are in southern and eastern Russia, the northern part of the United States, and Can- ada, corresponding to the northern parts of the hard wheat areas. The development of hard spring wheat varieties has made it possible to extend into higher latitudes the area of wheat territory, and in Canada wheat has been grown at Fort Simpson, eight hundred miles north of Winnipeg, while in Alaska wheat has matured at Fair- banks, only two degrees from the Arctic Circle. The pos- sibilities of still further expansion of the wheat area, and of the increase of yield through better farming methods and improved varieties, give promise of increasing production to meet the demand of a growing population. Hand in hand with improved varieties of grain and better farming methods have been introduced economies in the handling of wheat and a more careful system of grading. No longer in the United States and Canada, for example, is any great proportion of wheat handled in bags. From the farms it goes to country elevators where it is stored in bulk. From there it is drawn loose into cars for shipment, to be unloaded into a terminal elevator for storage or into the hold of a ship for transport, or sent direct to the door of a flour mill. Loading and unloading are by gravity or suction and the wheat is transported from place to place by means of belt and spiral conveyors and other mechanical devices. Thus is eliminated the expense of bags and the cost of the additional manual 232 SOME GREAT COMMODITIES labor required for bagging and handling. In a modern flour mill, likewise, wheat passes through all stages from grain in the freight car to flour bagged for shipment with- out human intervention. Only here and there throughout the plant are men watching to see that nothing goes wrong with the machinery. The harbor of Sydney, Australia, has recently been equipped with a large terminal elevator and improved loading apparatus, and the first bulk ship- ment was made in the early part of 1921. With bulk handling and elevator storage of grain goes a system of government inspection and certification in the United States and Canada which makes it possible to buy and sell wheat by grade, on terms which do not permit the purchaser to go back of the government certificate. This method has not been followed in other of the chief export- ing countries. Russian grain is bought from a sample sent in ahead of the shipment. On Indian wheat allow- ance is made for more than an agreed percentage of dirt and Argentine wheat is sold on the basis of a guaranteed natural weight per bushel, with adjustment for divergence. In Australia a sample is made up by the authorities to represent the "Fair Average Quality'* of the crop and this sample is used as a basis for sales. The Great Lakes are an important American highway for transporting wheat, especially from the hard spring wheat area of northern United States and southern Canada. Thence export wheat is carried across New York by way of the Erie Canal or down the St. Lawrence River, or is shipped to the coast by train. Some wheat is sent down the Mississippi River, but at present the greater part of the crop for export moves eastward. Much of the Cana- dian crop is carried east by train but some of it passes out WHEAT 233 through the Pacific ports to points in the Orient, or via the Panama Canal to Europe. The opening of the Canal has given considerable impetus to the use of the western outlet for the Canadian crop. The importance of wheat in international economy can scarcely be overemphasized. Not only is it the principal cereal food for millions of people, but it is one of the world's chief ocean cargoes, affording before the war a tonnage nearly an eighth as great as that of coal and four times that of cotton. It flows from all quarters of the globe toward Europe and helps to balance demand for shipping by furnishing return loads for homeward-bound vessels. It is a large part of the currency in which the great agricul- tural regions pay for manufactured articles, both within and without national boundaries. Even before the war wheat and wheat flour were responsible for nearly a third of the total value of Canadian exports, and the proportion in Argentina was almost as great. In 1920 wheat repre- sented a tenth of the value of exports from the United States. Thus the banker, the manufacturer, the trader have a stake in wheat, as do also the vast body of pro- ducers of wheat and consumers of bread, and it is not surprising that each year news of the crop is eagerly watched, and that the "Wheat Pit" of Chicago and the Corn Exchange of London are close to the center of busi- ness life. WOOL THE world's annual wool clip has not varied far from 3,000,000,000 pounds during the last ten years. Although in terms of weight this is only about one-fourth of the total annual cotton crop, it is a question even yet as to whether wool is not the most im- portant raw material of the textile industry because of the great durability of the product and the need for wool fabrics in those colder areas of the world where modern civilization centers. The chief producing countries are those which have much pastoral land, the clips of Australia and Argentina together constituting about one-third of the total world supply. The highly industrialized coun- tries of Europe and North America are the largest con- sumers, although wool in large amounts is used in the domestic industries of many less developed countries. The international wool market is perhaps more compli- cated than is that for any other raw material. The sheep was domesticated in many different parts of the world before the beginning of history, and widely divergent types have resulted. Wool may be a major product, with mutton as a minor product, or sheep may be raised primarily for mutton, with wool reduced to the position of a by-product. Crossing of the many breeds of sheep with the object of securing maximum wool clip, or fine early lambs and superior mutton, or some combina- tion of these qualities, has resulted in bringing into exist- 234 WOOL 235 ence more than 200 types of sheep, each producing wool differing more or less from the others. The length and fineness of the fiber also differ on different parts of the body of the same animal. Differences in quality are of the greatest importance from the standpoint of the wool manufacturer. As a result, more than 640 different grades of wool are recognized among American dealers, while for Australia alone a price list for 848 separate grades was at one time drawn up in order to value Australian wool. A journal well known in the textile industry of the United States regularly carries quotations on more than 75 different grades. The remarkable range in quality in the raw material, and demand for specific grades in order to assure a desired quality in the fabric, have had pronounced effects on the character of the wool market, both in the wider, interna- tional sense, and in the local markets of the producing and consuming countries. The range of prices between the grades at the extremes of the scale is such that the markets for these wools may be regarded as almost inde- pendent of each other. Results of this complex situation are the absence of future trading and the development of varied and often indirect methods of marketing and financ- ing wool from the producer to the manufacturer. A further peculiarity of the international wool market which is in part the result of the double purpose for which sheep are raised, and which in part results from other conditions under which wool is produced, is the failure of supply and demand to adjust to each other promptly. Where sheep are raised primarily for mutton, wool con- tinues to be produced as a by-product as long as there is a market for mutton and lambs. A large proportion of the 236 SOME GREAT COMMODITIES sheep raised primarily for wool are in areas of the world in which it is at present difficult to raise any other animals or crops with much hope of profit. It takes years to de- velop a good flock. Hence, flockmasters in these countries cannot at once lessen production in the face of a falling wool market. Even adverse weather, as destructive as it has been at times to flocks, especially those of Australia which have been repeatedly decimated by drouths, has not as a rule greatly affected the world's wool supply. Sheep are raised in many countries. Hence, the wool supply as between different years is well equalized, and even shortage of special grades can be largely met in case of need by substitution. Variations in the price of wool over any ordinary period are, therefore, chiefly deter- mined by conditions on the demand side of the equation, by artificial barriers to free international trade, such as tariffs and embargoes, and by changes in the general price level. The United States is both a producer and an im- porter of wool, home production being equivalent to only about one-half of consumption by American mills. The domestic clip of fine wools is quite inadequate for the needs of the wool manufacturers of the United States, and has been difficult of expansion. This condition, together with an uncertain tariff policy through many years, has con- tributed to the unstable and artificial character of the American wool market. TECHNICAL CONSIDERATIONS Consideration of certain practical aspects of the sheep industry, together with some technical questions concern- ing the wool fiber itself, in relation to spinning methods and product, are requisite for general understanding of WOOL 237 the international wool market. Wool differs from hair in essential characteristics. It has superior spinning quali- ties. Certain fine wools are superior to any other animal fiber in this respect. The scales or serrations on the wool fiber give wool fabrics felting and shrinking properties of great value. No other important textile raw material has these qualities in any comparable degree. Wool is highly elastic, and can be readily dyed in fast colors. Wool fabrics are comparatively impervious to cold and absorb moisture. As a result of the combination of these various qualities, they combine comfort, desirable appear- ance and durability to a degree which has as yet never been equaled by any substitute. It is probable that sheep were valued both for food and for wool almost from the first stages of domestication. Until the development of refrigeration, by which fresh mutton and lamb can be conveyed great distances by rail and ship to consuming markets, sheep in frontier regions or other large areas of unoccupied land were usually pro- duced primarily for wool, while those in thickly settled countries were raised primarily for food, wool being a secondary consideration. Refrigeration has so altered conditions that the price relation has become well-nigh the only determining factor as between wool and mutton. From the standpoint of the sheep-raising industry, the sheep of the world fall into four broad classes. Least important of these groups are the so-called "native" sheep, the various unimproved breeds of many countries, all of which produce wool of grades below those used in the modern manufacture of clothing. Such wools are usually known as carpet wools. There are in Asia and southeastern Europe great numbers of such sheep, many 238 SOME GREAT COMMODITIES of them being of the fat-tailed varieties. The Karakul, a sheep of central Asia, also bearing wool of the carpet type, produces the furs known as Persian lamb, Astrakhan, and Broadtail. There are flocks of "native" sheep in Iceland, the fleeces of which have special value where a high luster is desired. The "native " sheep of other parts of the world have not infrequently served as the foundation on which modern flocks have been built, some of these breeds having qualities of special value. It is true in a general sense, however, that except as suppliers of carpet wool, all these "native" sheep have practically no importance from the standpoint of the international market, although they are of great value as sources of clothing materials and food for the semi-nomadic inhabitants of the countries where they are raised. The hair of the Angora goat, known commercially as mohair, and the hair of the alpaca, vicuna and camel have uses similar to those of wool, but they differ in essential qualities, are used only for special purposes, and the quantities produced are small. The flocks of western Europe, North and South Amer- ica, South Africa, Australia and New Zealand, which furnish the world's supply of wool suitable for the manu- facture of fabrics for clothing, and of mutton and lamb for food, fall into three classes, the result of centuries of careful breeding and selection : those sheep bred primarily for wool, those in the production of which mutton is the prime object, and crossbreds, the result of various meth- ods of crossing the two fundamental types. The basis of all the flocks of the world which are main- tained primarily for wool is the Spanish merino, the term "merino" and "wool type" having become almost synony- mous. The merino was developed in Spain centuries WOOL 239 ago, and from it special types have been developed in several countries. As compared with the mutton breeds, merinos are small, hardy, slow-growing, long-lived, and suitable for handling under range conditions. Although some breeds of merinos are good mutton sheep, in general the type lacks the evenness of line, fullness of outline, tendency toward early maturity, and disposition to lay on external fat, which are the essential qualities where pro- duction of mutton and lamb is the primary object. Types of merinos have been developed of which 20 per cent, of the weight of the live sheep is wool, and for which 30 pounds is not an uncommon weight in the grease for the fleece of a single ram. Merino wools now constitute between one-fourth and one-third of the world's supply. They are characterized by their softness and fineness, these qualities being combined with strength and elasticity. They are a necessity for the manufacture of the finest woolen and worsted yarns. The length of staple varies somewhat among the various merinos, but practically all are included in a range of from if to 3 inches. Merino wools in the natural state are loaded with grease, some varieties scouring out as much as 75 per cent., the usual range being from 50 to 60 per cent. The main merino flocks of the world are those of Australia, the United States and South Africa, although a number of European countries produce important quantities of merino wool. In the past Uruguay produced considerable merino wool, but is becoming predominantly a crossbred wool country. The ideal mutton sheep must have a deep, wide, sym- metrical body, set on short legs. This conformation en- ables the butcher to cut the carcass to the best advantage, with little waste, and furnishes the highest percentage 240 SOME GREAT COMMODITIES of desirable cuts. Consumption of mutton is declining in relation to the consumption of lambs. From 70 to 80 per cent, of the sheep which now reach the market are less than a year old, and this tendency has made rapid growth of lambs a requisite. It is also important not to neglect the shearing qualities of mutton sheep, as the wool is a valuable product of any flock, but breeding skill has been definitely concentrated on the question of meat pro- duction. There are many breeds of mutton sheep, but all of them, with the exception of the Tunis sheep, which is of little numerical importance, depend for their mutton qualities on the characteristics of the British breeds, of which 38 are recognized. These have always been bred pri- marily for mutton, quantity, quality and character of wool being only a secondary consideration. The British breeds originated from two general types, hence may be grouped into two main divisions. The long-wool breeds are characterized by great size, slow maturity and a ten- dency to coarseness of flesh, and by heavy yields of long wool, tending to coarseness. Wools of this type are known to manufacturers as luster or semi- or demi-luster wools. They are poor as to felting qualities and are used in the making of braids or of dress goods when luster is desired. Representative breeds of long-wool British sheep are the Lincoln, which grows a wool from 8 inches up to 15 inches in length, unwashed fleeces averaging from 14 to 18 pounds, and Cotswold, with fleeces ranging from 10 to 15 inches in length and weighing from 15 to 18 pounds. The long-wool breeds originated in low fertile lands, and are best fitted for such an environment. The other group of British breeds, known as medium- WOOL 241 wool sheep, are generally smaller than the long-wool type, and were developed on rolling downs, hills and thinner soils. According to character of wool, they are divided into the "down" and the "mountain. " The down breeds are noted for their fine mutton qualities, and they furnish the bulk of British medium wools. Down wools range in length from i to 5 inches. These wools are finer and softer than are those of the long-wool breeds, and they possess strength, elasticity and good felting properties. The down breeds are now popular in the chief mutton- and lamb-producing countries and are the leading type of England. The more important breeds are the South- downs, with unwashed fleeces ranging from 5 to 8 pounds in weight; Shropshires, the fleeces of which range from 8 to 10 pounds in weight; Oxfords, with fleeces of from 10 to 12 pounds, and Hampshires, which yield on the average about 8 pounds of unwashed wool. Of the "mountain" breeds of mutton sheep, only the Cheviot is well known. Wools of this class are not important. The development of crossbreeding between the various merinos and the mutton breeds by the application of modern principles has shown conclusively that it is possi- ble to secure good wool, as well as superior mutton and lambs, from the same flock. As a result of this develop- ment, the world's clip of crossbred wools now exceeds the production of merino wool. No domestic animal has proved more adaptable to vary- ing conditions as to climate and food supply than the sheep, which can be raised successfully either on lush pasture or on what is practically a desert, at sea level or almost to the limit of vegetation on mountains. This adaptability has determined the three main methods by 242 SOME GREAT COMMODITIES which sheep are now raised: (i) under farm conditions, i. e., when land-holdings are fairly small and where sheep are raised in connection with general farming of various types; (2) the paddock system, in which sheep are allowed to run practically at will, within large fenced areas; and (3) on ranges. This latter method is adapted to the fron- tier, where there are large areas of unoccupied land. Under range conditions sheep can be handled in large flocks by herders. Where sheep are raised under farm conditions, mutton and lamb are usually the major prod- uct, and sheep of the distinctive mutton types prevail, although there are important exceptions. Wool is usually more important than mutton and lamb where sheep are raised on ranges or in paddocks, and merinos or merino crossbreds are preferred, both because of the quality of their wool and their excellent herding qualities. As the frontier regions of the world are gradually settled, there is an inevitable tendency away from range methods, first toward the paddock system and then to farm condi- tions. It has been well demonstrated that except under very unusual circumstances, from the standpoint of profit, sheep raised under farm conditions for wool exclusively cannot compete with other farm animals and crops. Where there is a large consistent demand for superior mutton and lamb, sheep may be found very profitable in highly developed agricultural countries, as evidenced by the fact that in the United Kingdom, which has an area of 121,000 square miles, the number of sheep was officially estimated in 1921 as 24,000,000 with a clip of 100,000,000 pounds. American consumption of mutton and lamb, though increasing, is as yet limited, and in the same year, this country, with an area of 3,000,000 square WOOL 243 miles, had but 36,000,000 sheep, with an estimated clip of 273,000,000 pounds. In practically all countries except those of western Europe, there are large areas which are unsuited by reason of climate or other conditions for the more intensive forms of agriculture, and in such regions sheep will continue to be raised profitably for wool as the major product. It is nevertheless true that, considering the world's sheep in- dustry as a whole, the mutton types and crossbreds are gaining on the merinos. Thus, in New Zealand, pure merinos now constitute less than one-fifth of the pure-bred stock of the Islands, and only 4 per cent, of all sheep. Merinos have been practically displaced by crossbreds in Argentina, this process is under way in Uruguay, and fine wool sheep have long been of negligible importance in Europe, at least outside of Spain. In the United States the tendency is toward crossbreeding, except in a few localities. Although merino wool constitutes more than half of the total Australian clip, even there the merino appears to be losing ground. The only important wool- growing country where merinos are now the dominant type is the Union of South Africa, where, according to the latest information available, 72 per cent, of the total number of sheep are merinos. Wool manufacturers of those countries in which the making of high-grade fabrics is important have viewed the drift away from merinos with great anxiety. At the same time, if the demand for fabrics of those classes for which merino wools are essential is sufficient to maintain a price differential between them and other grades which will make the production of merino wools profitable, there is no doubt that their production will be expanded to meet it. 244 SOME GREAT COMMODITIES MARKET TERMS As wool reaches the market, it varies widely as to con- dition both as a result of the relative care or lack of care with which sheep and clip have been handled, and as a result of differing market customs. The wools of Aus- tralia and New Zealand are perhaps the superior of all others as regards care and skill in preparation for the market. Not only are they carefully sheared, but they are "skirted" by the removal of the poorer parts of the fleece. As it comes from the sheep's back, wool contains much natural grease and some other foreign matter. In this condition, it is said to be "in the grease." The process of removal of this extraneous material is known as "scour- ing," and wool which has passed through the process is described as "scoured wool." Loss in weight during scouring is called "shrinkage," which varies from 20 to 80 per cent., the heaviest loss being as a rule in the fanciest merino wools. On a basis of shrinkage, say, of 50 per cent., 100 pounds of wool in the grease would yield only 50 pounds of clean wool. Shrinkage varies, not only be- tween different breeds of sheep and between countries, but even in the same flock from year to year, so that com- parisons as to quantities and as to prices, if on a grease basis, are only the roughest approximations of facts, al- though it is often necessary to use such data for lack of better. The two main divisions of the wool manufacture are the woolen and worsted industries, in which two quite distinc- tive methods of manufacture are used. In the woolen system, the wool is carded, by which is meant that prior to spinning, the fibers, while separated to a certain extent, WOOL 245 are left crisscrossed, lying in no general order. In this condition, they are spun directly on the mule. In the worsted industry, the fibers are first carded and then combed. Combing produces a continuous strand of long, parallel fibers known as "top" from which the inferior fibers, those which are short, weak or tangled, are separated, being known as "noil." "Top" is spun into worsted yarn. "Noil" is a raw material of the woolen industry. In the United Kingdom top-making is usually carried on by manufacturers who are not makers of yarns or cloth, but this is not so customary in the United States. "Tops" and "noils" are regularly quoted on many mar- kets. GRADES OF WOOL The tariff schedule of the United States classifies wools as clothing or carding wools, combing wools, and carpet wools. In the trade, wools suitable for the manufacture of fabrics are separated into three main classes : clothing or carding wools, which are short wools suitable for woolen manufacture; French or baby combing wools of interme- diate length, of which grades J blood and above are suit- able for manufacture on the French system, and grades f and below ordinarily are used on the worsted system for knitting and weft yarns; and combing wools, suitable for manufacture on the worsted system for weaving and warp yarns. Grade names are further complicated by the use of different systems of classification in various countries, and by variations in usage even in different parts of the same country. There are special classes of wools which fall outside the main systems of wool classification in use, 246 SOME GREAT COMMODITIES the largest group being carpet wools. As heretofore noted, they come mostly from the countries of Asia and southeastern Europe, being grown on "native sheep." They are coarse and otherwise inferior, and by no means all grades are suitable for the manufacture of high-grade carpets and rugs. There is no hard and fast line between carpet wools and other grades, however. When the prices of other wools are very high, the better carpet wools may be used to mix with them in the manufacture of blankets, coarse overcoatings, and similar fabrics. On the other hand, much carpet wool comes from the inferior parts of the fleeces of other than the so-called "native" sheep, while another source of supply is "pulled wool," that is, wool from the skins of slaughtered sheep. Carpet wools are usually designated in market quotations by country of origin, and various descriptive terms. They are usually graded as coarse, common, medium and good. There are two systems of classification of those grades of wool used in the manufacture of worsted fabrics for clothing which may be said to be widely used : the Brad- ford system, and the American or "Boston" classification. The Bradford or foreign topmakers' system for classify- ing wool assumes that wool is of the same quality as the finest count of'yarn to which it can be commercially spun. The yarn unit is a hank consisting of 560 yards. If this hank weighs one pound, the yarn is "one count." If it takes two hanks to weigh one pound, the yarn is "two count." Wool that at its highest spin would make "one count yarn" or "two count yarn" would be desig- nated as "ones" and "twos" respectively, although as a matter of practice, yarns of such low counts are never made. If it takes 50 hanks of yarn to make a pound, the yarn WOOL 247 would be "fifties count yarn" and the wool that at its highest spin would make "fifties count yarn" would be designated as "fifties quality wool." Thus the finer the yarn which can be made from wool, the higher the "count" of the yarn and the higher the "quality" of the wool that is suitable for making this yarn. As a matter of fact, these designations are only approxi- mate. Climatic conditions vary the count of yarn that can be spun from wool of a given quality. The Bradford system originated at Bradford, England, but is now used in Australia, New Zealand, and at least to some extent in South America, South Africa, and on the Continent. The "Boston system" is chiefly in use in the United States, although a similar system is used in Canada, and a related terminology is also sometimes applied to South American wools. Originally the American wool market graded its wools on the so-called " blood classification, " i. e., according to the proportion of merino blood in the sheep producing the fleece. Although the significance of this terminology has now been lost, such terms as "f blood" referring not to proportion of merino blood but to the fine- ness of the wool, the terms themselves persist. Unfortu- nately, there are variations even in the terms applied to wools produced in different parts of the United States. Thus the wools of the eastern states, that is, those of the Ohio Valley, Michigan, New York, Wisconsin, Missouri, and New England, are designated as "domestic," while those of the Dakotas, Montana, Nevada, Utah, Colorado, Idaho, Wyoming, New Mexico, Arizona and eastern Oregon are known as "territory." There are special classes for Texas, California and western Oregon. 248 SOME GREAT COMMODITIES There are many other distinctions between grades than length and fineness of staple. Thus "pulled wool," that taken from the pelts of slaughtered sheep, differs in es- sential ways from the wool sheared from the living animal. The first fleece clipped from a sheep differs from later fleeces from the same animal, and is designated in the British market as hog, hogget, or teg wool. In localities such as Texas, where sheep are often sheared twice a year, the number of months' growth becomes a designation, while color, breed and an infinite variety of conditions may be embraced in grade terminology. It is thus clear that any attempts to present parallel grades by the different systems can give only the most general idea of the relation between them. Nevertheless, Table A, showing equivalents of some of the leading grades, may be of value in an understanding of current market quotations. It must be clearly understood, how- ever, that these grades are equivalent only in a general way, and especially that the counts spun in England from wools graded according to the Bradford system are higher than the counts spun from the corresponding grades in the United States. TABLE A EQUIVALENT GRADES OF WOOL AS CLASSIFIED ACCORDING TO THE BOSTON AND BRADFORD SYSTEMS Domestic Full blood (XX).... I blood (X) BOSTON SYSTEM Territory Pulled Fine AA Fine medium AA | blood A f blood B i blood B Low | blood C Common C Braid C BRADF( Foreign 66s to 74s 64s 60s 56s to 58s 50s to 56s 46s 40s to 44s 32s to 40s L blood.. I blood i blood x>w ^ blood Common. Braid.. Counts s spun U.S. 60s and lower 50s 40s 36s 32s 20s 16s 16s WOOL 249 The United States Department of Agriculture is now endeavoring to assist wool growers in standardizing wool grades in this country. Especially is it desired to establish definite physical standards, thereby eliminating to a large extent differences in grading which result from differences in judgment as between graders. A standard working set has been prepared and has been actually used for the grading of wool in Missouri, Virginia, and Texas, as well as in a number of other states. Grades as at present established are to be regarded as tentative, and their adop- tion is purely voluntary, whether by state authorities, local wool marketing associations or dealers. It is be- lieved that their use will widen. The government classi- fication at present is as follows: Fine clothing Low J blood baby combing Fine French combing Low J blood strictly combing Fine strictly combing Common ^ blood clothing Braid J blood French combing Burry, seedy and chaffy | blood strictly combing Cotted f blood clothing Dead and merrin f blood baby combing Kempy f blood strictly combing Damaged J blood clothing Black and gray J blood baby combing Pieces J blood strictly combing Tags Low J blood clothing DISTRIBUTION OF SHEEP IN THE WORLD Exact data as to the number of sheep and the annual wool clip of the world are not available, even for those 250 SOME GREAT COMMODITIES countries in which agricultural statistics are most highly developed, while estimates in use as to both sheep and wool for many countries can hardly be called more than guesses. Moreover, production data and figures for ex- ports and imports usually fail to distinguish between scoured wool and wool in the grease, so that all that can be done is to accept totals, regardless of the fact that they may contain widely varying proportions of scoured wool and of wool in a greasy condition. Satisfactory data for a number of countries, especially those of southeastern Europe, have not been available since the war, and changed boundary lines have further complicated the problem of comparability. The best information, however, comes from the main consuming and producing countries, while most of those areas for which only the most uncertain data are available play little part in the international market, except for carpet wool. Such data as can be had are therefore of TABLE B NUMBER OF SHEEP IN THE WORLD, BY PRINCIPAL COUNTRIES, FOR THE LATEST AVAILABLE DATES [Compiled from National Association of Wool Manufacturers Annual Review, 1921, and published data of United States Department of Agriculture] /-> V M , Number of sheep Country Year (in thousands) North America United States continental 1921 1 36,048 Canada 1921 3,676 Other countries 1,010 Total 40,734 South America Argentina 1921 37,000 Brazil 1921 12,000 Chile .'. ' 1918 4,434 Uruguay 1916 11,473 Other countries 11.830 Total. . 76,737 WOOL 251 r nw Vwr Number of sheep Country Year (in thousand8) Europe Bulgaria 1921 8,500 Czechoslovakia 1921 976 Denmark, inc. Iceland and Faroe Islands. . . 1920 2 1,192 Finland 1920 800 France 1920 9,406 Germany 1920 6,139 Greece 1918 5,468 Hungary 1921 1,284 Italy 1921 12,000 Jugoslavia 1921 6,836 Norway... 1918 1,208 Poland 1919 2,300 Roumania 1921 8,662 Russia in Europe 1916 363,833 Spain.. 1921 20,522 Sweden 1919 1,564 United Kingdom 1921 24,161 Other countries 4 11,149 Total *186,000 Asia British India 191S-20 21,984 Russia in Asia 1915 34,468 Turkey in Asia 1912 27,095 China 1921 25,880 Other countries 5,512 Total 114,939 Africa Algeria 1914 9,140 Union of South Africa 1921 34,573 Other countries 26,287 Total 70,000 Oceania Australia and Tasmania 1920 72,767 New Zealand 1921 23,285 Total Australasia (approximately) 96,052 Other countries 10 Total 96,062 Grand total World 584,472 United States Census figure. "Iceland and Faroe Islands year 1919. Goats included. No estimate for Turkey in Europe. 252 SOME GREAT COMMODITIES more value than might appear, in determining the situa- tion as to the world's supply of, and demand for, wool for the manufacture of clothing. It will be readily understood that because of diversity of breeds, the wool clip of a country is not necessarily commensurate with the number of sheep. Thus, the wool produced in the countries of southeastern Europe and of Asia is not only practically all of the carpet grades, but the quantity is small in relation to the estimated number of sheep, while the clip of such countries as Australia, New Zealand, and South Africa, where sheep-breeding is carried on with great skill, is heavy in relation to the reported number of animals. Table B shows the estimated number of sheep in the more important countries, for the latest year for which data are available, as well as estimates by grand divisions and for the world as a whole. The relatively large numbers of sheep reported in Euro- pean and Asiatic Russia and Asiatic Turkey are chiefly significant as indicating the extent to which climate and vegetation of these areas favor the pastoral industries. Whenever the need for new sources of wool supplies be- comes great enough, the wool clip of these countries can be tremendously increased, but such gains would mean the gradual encroachment of modern methods upon the semi- nomadic lives of the inhabitants. THE WORLD'S WOOL SUPPLY In 1921 the wool clips of Australia, New Zealand, Argen- tina, the United States, the Union of South Africa, Spain, Uruguay, and the United Kingdom amounted to nearly 2,000,000,000 pounds out of a total world clip of less than WOOL 253 3,000,000,000 pounds. The wool production of these eight countries constituted a much higher proportion of wools suitable for clothing. Average annual production for Australia and New Zealand together is about 800,000,000 pounds of wool. The entire product, with the exception of a certain proportion of waste from the inferior parts of fleeces, is suitable for the manufacture of clothing fabrics. The countries next in importance as wool producers are the United States and Argentina, each producing not far from 300,000,000 pounds per year. Almost the entire clip of Australia, New Zealand and Argentina passes into inter- national trade, while exports of wool from the United States are negligible. The annual clip of the Union of South Africa varies considerably, but has probably aver- aged not far from 1 50,000,000 pounds during the last ten years. Practically the entire clip is available for ex- port. Spanish wool production, which underwent re- markable expansion during the war, was about 142,- 000,000 pounds in 1920, and a large part of the clip was exported to neighboring European countries. In 1921 the Spanish clip was 165,000,000 pounds. Uruguay and the United Kingdom each produce about 100,- 000,000 pounds of wool annually. A large part of Uruguayan wool is merino, and practically all of it is exported. The wool grown in the United Kingdom is chiefly from mutton breeds and is used at home. Table C shows wool production by countries. Figures are for 1921 for those countries for which data are available for that year. For some other countries production for 1920 is shown. In a few cases, only estimates are to be had. 254 SOME GREAT COMMODITIES TABLE C WORLD PRODUCTION OF WOOL IN 1921 BY COUNTRIES I Country North America United States British North America Mexico Other countries Total South America Argentina Brazil Chile Peru Falkland Islands Uruguay Other countries Total Europe Austria Belgium Bulgaria Czechoslovakia Denmark, Iceland and Faroe Islands . . Finland France Germany Greece Hungary Italy Netherlands Norway Poland Portugal Roumania Russia Spain Sweden Switzerland Turkey United Kingdom Jugoslavia Total. . 1921 (in thousands of pounds) 273,064 24,050 500 750 298,364 300,000 60,000 26,000 12,000 3,200 110,000 5,861 517,061 1,840 1,226 17,637 4,294 3,508 3,250 39,600 42,975 16,000 11,023 58,000 5,500 4,409 6,724 6,245 38,192 150,000 165,347 4,720 800 2 100,000 26,372 707,662 WOOL 255 Country 1921 (in thousands of pounds) Asia British India 60,000 China 50,000 Persia 12,146 Russia in Asia 45,000 Turkey in Asia 90,000 Other countries 2,854 Total 260,000 Africa Algeria 33,184 British South Africa 120,000 Tunis 3,735 Other countries 12,505 Total 169,424 Oceania Australia and Tasmania 536,542 New Zealand 181,480 Australasia 718,022 Other countries 70 Total 718,092 Grand total 2,670,603 ^Computed on a greasy basis. Not available. WOOL CONSUMPTION Since wool production is seasonal, and since distance and other factors mean that a considerable time must elapse between the clipping of the fleece from the sheep's back and the first stages of manufacture, stocks of wool in the international sense are heavy at all times, although they may vary considerably with the seasons, and widely as between different years. Over a series of years, how- ever, it is obvious that the world's wool production and consumption must be in approximate balance. Normal, or average, world consumption since 1900 may therefore 256 SOME GREAT COMMODITIES be considered as about 3,cxx),ooo,ooo pounds of wool a year. From the standpoint of the wool market, a distinction must be made between those countries where woolens are woven by primitive methods for household use, largely in the homes of the people, and those countries which use large-scale factory methods. The wool consumption of such countries as British India, Asiatic Russia, Asiatic Turkey, and China is primarily for household industry. Rugs and carpets made from the native wools of these regions are important in international trade, and domestic consumption is at all times a factor in determining the amount of carpet wool which will be available for export, but such countries are not at present potential wool im- porters. Countries in which the wool textile industry is as yet little developed, and whose wool production is very large in relation to population, as Australia and Argentina, are chiefly factors on the supply side. Demand in the international sense is determined primar- ily by conditions affecting the woolen and worsted in- dustries of the United Kingdom, the other countries of northwestern Europe, including European Russia, and the United States. Stocks of wool in these countries are con- siderable at all times, but over a series of years commercial consumption of new wool may be measured by domestic production, plus imports, less exports. It is to be clearly understood that actual consumption by the inhabitants of a country may be quite different from commercial consumption. To determine actual consumption, account would have to be taken of the wool content of all exports and imports of wool manufactures, and this cannot be accurately done on the basis of existing statistics of foreign WOOL 257 trade. Throughout this discussion, the term "consump- tion" has reference only to consumption in the commercial sense. The presence of tops and yarn in considerable quantity in the foreign trade of some countries is a complicating factor in any attempt to determine the amount of wool which is actually consumed in the manufacture of wool fabrics. Wool for top-making and wool spun into yarn is included in the apparent wool consumption of any country, as determined by domestic production plus net imports of raw wool. From the standpoint of cloth manu- facture, wool consumption of a country which is a net im- porter of tops or yarn should be increased by the amount of raw wool required to make them, while from the stand- point of countries which are net exporters of tops or yarn, wool consumption for cloth manufacture should be cor- respondingly reduced. Existing data do not permit of the making of such corrections for foreign trade in tops and yarns, however. The war so greatly disturbed conditions in many im- portant wool-using countries that pre-war figures are per- haps a better indication of potential consumption than are data for the war years or since 1918. At the same time, it is to be remembered that in some important consuming countries there has been a sufficient increase in population to suggest permanently higher requirements. In others, some expansion in the capacity of wool-using industries occurred. On the other hand, there has been serious dis- organization of the wool textile industry in many Euro- pean countries, due to change of boundaries and unsettled political conditions, while shortage of raw wool, inability to buy it in pre-war quantities because of disadvantageous 258 SOME GREAT COMMODITIES exchange, and above all, the impoverishment of the ul- timate consumers of fabrics made of wool, have tended to curtail manufacturing activities. There are no grounds to justify the conclusion that the pre-war status will re- turn. With these reservations, Table D, showing esti- mated commercial consumption of wool in the thirteen chief wool-using countries from 1909 to 1913 may be of value. These countries are supplied from an equally small group of countries. Table D also shows for the same pre- war period net wool exports from the twelve countries which furnish most of the wool for the international market. Although transportation was greatly dis- turbed from 1914 to 1918, the war made no changes likely to prove permanent in conditions surrounding wool production in the exporting countries included in the table. Prior to 1914, the United Kingdom, France, the United States, Germany, Russia, Austria-Hungary, and Belgium, in the order named, were the leading wool-consuming countries. Total average annual consumption for the group was about 2,7oo,ocx>,ooo pounds, as compared with an estimated average world production for the five years before the war of 2,900,000,000 pounds. The war exerted widely varying effects on the woolen and worsted industries of these countries. The French industry fell almost entirely within the devastated area. Belgium was occupied and both Belgium and Germany were cut off from their customary sources of imported raw materials, as were also Austria-Hungary and Russia. During the latter part of the war, the British industry was handicapped by lack of labor, and restricted its prod' WOOL 259 TABLE D COMMERCIAL CONSUMPTION OF WOOL BY PRINCIPAL CONSUMING COUNTRIES FROM 1909 TO 1913 Country Production 1909-13 (5-yr. aver.) Net Net Available for Imports Exports consumption (in thousands of pounds) Exporting Algeria 35,221 . 17,554 17,667 Argentina 328,204 . 327,990 214 Australia and Tasmania... 728,198 . 676,378 51,820 British India 53,631 . 32,775 20,856 Chile 17,430 . * * China 50,000 . 42,684 7,316 New Zealand 192,147 . 190,231 1,916 Persia 10,023 . 8,056 1,967 Peru 9,333 . 9,155 178 Spain 52,000 . 26,059 25,941 Uruguay 139,178 . 139,178 Union of South Africa 164,651 . 164,651 Importing Austria-Hungary 41,600 63,942 . 105,542 Belgium 1,060 103,927 . 104,987 Canada 11,000 6,471 . 17,471 France 80,688 516,655 . 597,343 Germany 25,600 439,171 . 464,771 Japan 13 10,223 . 10,236 Netherlands 3,556 5,629 . 9,185 Norway 8,160 3,521 . 11,681 Russia 210,892 73,778 . 284,670 Sweden 6,060 7,118 . 13,178 Switzerland 1,049 10,873 . 11,922 United Kingdom 136,021 508,904 . 644,925 United States 313,648 203,289 . 516,937 Not available for sheep's wool separately. Total exports including hair of the vicuna and mohair were 27,533,000 pounds. uct primarily to those classes of fabrics required for mili- tary purposes. Wear and tear on machinery was great, and it is doubtful whether the physical productive capacity of the woolen and worsted manufacture of the United Kingdom more than held its own. The war was a powerful stimulus to the industry of the United States. Imports of wool manufactures were in large measure cut off, and domestic prosperity resulted in 260 SOME GREAT COMMODITIES an active demand for fabrics. In addition, in 1915 and 1916, American mills were in receipt of large orders from some of the Entente countries for uniforms and other military supplies requiring wool fabrics. Beginning with 1917, the woolen and worsted industry of the United States operated under intense pressure, until the Armistice, to provide for the army. The close of the war found both the United States and the United Kingdom badly overstocked with raw wool, which had been accumulated to provide for military re- quirements for a war the duration of which could not be foreseen. Large amounts of wool had accumulated in the chief producing countries because of disorganization of ocean transportation, and because of the elimination from the market of a group of consuming countries whose annual imports of wool had averaged nearly 1,200,000,000 pounds just before the war. It was expected that post-war demand for woolen and worsted goods at home and abroad would enable the United States and the United Kingdom to utilize their accumulated wool advantageously, and that those countries which had long been cut off from sup- plies would absorb the overstocks of wool accumulated in producing countries. Such did not prove to be the case. The amount re- tained for consumption during and since the war cannot, therefore, be accepted as a measure of actual consumption. In Table E, production of wool and net exports or im- ports are shown as far as available for the years 1919, 1920 and 1921 for those countries whose position in rela- tion to the international wool market from 1909 to 1913 was shown in Table D. No attempt has been made to arrive at a consumption figure. WOOL 261 -. -^o OCQt* ico Ij* -owco I C^ i I r ( r- 1 f-( Ol> t>- co ;iqrtoq S. oo OQ co rHrHCQ I I I CQCXJCO -O>ot^ g^ : 855 N " I C^ 00 QC^l C) ) i-H ' O^ ' O I t>to io~ icoi T 55 8 274 SOME GREAT COMMODITIES Oi N i I UQ Lf5 i 1 1 oo rH 3 C ,H -^0000000- H 8 8> LO a>c<5io 1 1* 1 oo oH C,H 10 o | g^ ^H O^ CQ ^ S8 OOi iQOi 2 ^^ to c^^c^ OO^-H -^5 -moooico ?"" : :gg- II | ss : : a ^ 10^ . .^H 2| ^?^g 8 ^3 ^i f^^o -COLO : : : g -g : .188 S3! Ill 2 I I * : ^^2 .3 7345 3 *" -^CO O?CO' lllf:::8 S |i W WOOL 275 'i-4LOt-lQ CO 3 3 i n i * Ol OO I CN CO O^ LO C** co ;co '2 I .a CD LO pS ?H co o^ t*** ^^ ^o ( H ;5-ICOLOrHI I ^T? 2 LOC^LOCvl^ 2 C^rH OOCSJrHOO ''- 1 $$&&$& 33. 2 7 6 SOME GREAT COMMODITIES part for reexport to other Continental countries. In 1921, Belgian purchases fell off and Germany took about one-third of total exports. Tables J, K and L show distribution of exports of wool from Australia, South Africa and Argentina in 1913, dur- ing the war, and for the post-war years as far as data are available. SOURCES OF THE RAW WOOL SUPPLY OF THE UNITED STATES In the years immediately preceding 1914, the woolen and worsted industry of the United States consumed annually about 500,000,000 pounds of wool (in condition in which purchased). Domestic wool production con- stituted about three-fifths of the total. While it is as yet too early to determine what part of the expansion in wool TABLE M IMPORTS OF CLOTHING WOOLS INTO THE UNITED STATES, 1909 TO 1921, BY PRINCIPAL COUNTRIES OF ORIGIN Country Belgium 11909-13 (5-yr. aver.) 1 471 France 184 Germany . ... 311 Russia in Europe Turkey in Europe. . . United Kingdom. . . . Canada 33,036 149 Argentina 24,503 Chile 132 Ecuador a Peru Uruguay 3,592 Australia 18,581 New Zealand 4463 China 1 British India. . . Persia Russia in Asia Turkey in Asia. . . . ' 22 British South Africa . Other countries 65 33 11914-18 (5-yr. aver.) 1918 *1919 *1920 1921 (in thousands of pounds) Total. 86,544 1,517 1,319 180 2 6 23,205 1,336 111,096 7,267 283 2,025 16,523 53,815 5,240 6,241 43 " 8 6 33,061 3,543 266,716 373,911 334,100 212,392 207,867 204 1,250 543 ' 117 379 587 378 1 445 I'.isi 180 318 27 "39 14,704 28,968 2l',406 2,718 12,067 7,629 3,089 203,238 118,854 71,910 68,198 10,887 11,959 14,514 8,107 1,162 176 46 3,900 17,656 2,273 49,931 884 29,768 'in 29,173 65,118 46,035 37,372 42,410 6,276 14,234 26 8,342 10,506 8,529 525 8,455 2 66 33 3 81 77 612 141 '"2 51.064 51,466 17,296 15,694 1,147 1,536 764 1,454 iFiscal years ending June 30. Calendar year. Less than 1,000 pounds. WOOL 277 consumption which took place during the war years will prove permanent, it seems a fair assumption that normal consumption of wool by American mills is now somewhat in excess of 600,000,000 pounds a year. The domestic clip of the United States has not varied far from 300,000,000 pounds in thirty-five years, so that increased consumption must be taken care of by increased imports. The sources of the foreign wools spun and woven in American mills are therefore of fundamental interest from the standpoint of the future of the wool- manufacturing industry. The tables which follow show separately for the three classes of wools as reported for tariff purposes, and for the three classes combined, average imports of wool into the United States from the more important countries, for the five fiscal years ending June TABLE N IMPORTS OF COMBING WOOLS INTO THE UNITED STATES, 1909 TO 1921, BY PRINCIPAL COUNTRIES OF ORIGIN Country Belgium. France. . Germany Russia in Europe Turkey in Europe United Kingdom Canada Argentina Chile Ecuador Peru Uruguay Australia New Zealand China British India Persia Russia in Asia Turkey in Asia British South Africa Other countries U909-13 (5-yr. aver.) 9 44 762 15,535 1,008 1,174 i '836 65 8 70 1 10 8 162 Total. 19,693 J1914-18 (5-yr. aver.) (in thousands of pounds) 29 129 5,020 6,174 3,060 31 12 206 73 124 '419 6 73 279 15,639 1918 1919 *1920 >1921 :;; "9 '33 59 6 '60 710 2,357 70 1,632 3,383 651 2,087 637 1,192 3,063 199 1,347 319 216 4,715 115 5,570 1,312 1,206 1,109 341 32 643 1,249 358 2 2,864 27 628 631 25 962 914 4,753 57 253 3,997 71 98 92 369 143 9'is 143 10,525 14,845 11,355 14,899 'Fiscal years ending June 30. 'Calendar year. Less than 1,000 pounds. 278 SOME GREAT COMMODITIES TABLE O IMPORTS OF CARPET WOOLS INTO THE UNITED STATES, 1909 TO 1921, BY PRINCIPAL COUNTRIES OF ORIGIN Country Belgium France Germany Russia in Europe Turkey in Europe United Kingdom Canada Argentina Chile Ecuador Peru Uruguay Australia New Zealand China British India Persia Russia in Asia Turkey in Asia British South Africa Other countries Total. . U909-13 (5-yr. aver.) U914-18 (5-yr. aver.) 1918 1919 1920 1921 (in thousands of pounds) 167 6 176 218 3,474 659 ' ' '378 140 1,275 2,338 662 968 13,520 3,991 '22 '411 324 1,751 540 2,932 2,3*9 'iis 24,915 12,248 ... 19,045 6,380 37,839 6 49 98 60 105 4,179 12,193 15,068 14,045 1,765 10,181 60 2,566 8,197 13,274 3,716 86 269 871 408 85 1,578 3,136 1,541 360 "'4 *80 1,064 1,026 7,031 488 2,352 ... 35 ... ... ... 16 33,282 31,885 31,198 29,814 11,763 37,183 4,191 1,426 10 66 366 1,374 956 110 511 4,692 2,360 2,718 I,'l29 2,327 10 7,267 1,584 1,353 2,810 400 137 3,135 4,442 2,386 674 1,517 4,083 4,370 2,604 3,037 2,087 3,748 105,098 80,730 iFiscal years ending June 30. Calendar year. 69,292 96,948 35,870 97,900 *Less than 1,000 pounds. TABLE P TOTAL IMPORTS OF WOOL INTO THE UNITED STATES, 1909 TO 1921, BY PRINCIPAL COUNTRIES OF ORIGIN Country Belgium France Germany Russia in Europe Turkey in Europe. . . United Kingdom. . . . Canada Argentina Chile Ecuador Peru Uruguay Australia New Zealand China British India Persia Russia in Asia Turkey in Asia British South Africa. Other countries. . . U909-13 (5-yr. aver.) 1,639 3,658 2,658 13,564 2,514 73,486 1,163 29,856 192 t 836 3,737 18,589 4,533 33,284 4,191 956 4,692 7,299 210 4,278 Total 211,335 ^Fiscal years ending June 30. 11914-18 , 1Q1R . 1Q1Q (5-yr. aver.) (in thousands of pounds) 1920 1921 1,523 204 1,426 820 1,982 ' 117 766 760 1,653 842 1 1,419 4,022 "22 1,562 504 675 4,882 3,568 '329 40,473 "99 37,132 38.411 63,960 7,559 3,428 12,816 7,888 3,309 126,349 220,663 134,986 75,022 83,949 9,864 19,154 25,870 18,549 8,193 564 2,033 584 131 3,809 8,348 4,923 2,493 *803 17,660 18,682 57,303 30,614 32,156 53,974 65,118 46,067 37,374 42,451 5,240 6,276 14,234 26 9,304 38,545 42,910 38,986 15,152 46,552 1,475 12 132 426 1,374 110 511 2,368 2,799 1,459 3,037 10 1,590 1,494 2,902 402 36,269 60,259 57,849 18,339 18,126 8,192 3,808 4,644 2,994 5,345 363,085 453,728 445,893 259,617 320,666 Calendar year. *Less than 1,000 pounds. WOOL 279 30, 1909, to 1913, average imports for the five fiscal years 1914 to 1918, and for the calendar years 1918, 1919, 1920 and 1921. It will be observed that imports for the first six months of 1918 are included twice in these tables. The same list of countries is shown for each class of im- ports, in order to facilitate combination into the table showing total wool imports of all classes. PRICES The wool market was violently affected, both by war conditions and post-war speculation Government con- trol of the British and Australasian clips was established at a fairly early stage of the struggle, and the Government of the United States established an effective control in the domestic wool market at the close of 1917. Formal price fixing began on May I, 1918. The effects of post-war speculation were accentuated by general disorganization in the international wool trade resulting from different dates of decontrol in various coun- tries; the accumulations of wool in producing countries as a result of the cutting off of nearly all the Continent from the sources of supplies, as well as lack of shipping space; the disruption of exchanges, and some other factors. Wool prices always vary as between countries, because of tariffs, transportation charges and other local condi- tions, but the general trend is of necessity fairly uniform. While prices in the various markets have differed even more than usual due to abnormal conditions, the price at the American seaboard is nevertheless a fair picture of the course of events in the international wool market dur- ing recent years. Table Q shows prices of two grades of domestic wool at Boston from 1913 to June, 1922, and 280 SOME GREAT COMMODITIES prices of a number of representative imported and domes- tic grades at the Atlantic seaboard from July, 1919, to June, 1922. All prices are on a clean basis. PRESENT CONDITIONS IN THE INTERNATIONAL WOOL MARKET Australasian Stocks. Consideration of the outstanding facts as to international supply of and demand for wool TABLE Q PRICE OF RAW WOOL AT THE ATLANTIC SEABOARD, 1913 TO JUNE, 1922 [Prices are for the available date nearest the fifteenth of each month.] PART I CLEAN BASIS BOSTON CLEAN BASIS BOSTON Ohio Ohio Ohio Ohio Year and fine blood month delaine blood r pound) (dollars per pound) Year and month fin dela (doll; 1913 January April .72 .66 July .58 October .58 1914 January .56 April .59 July .68 October .61 1915 January .66 April .73 October.'.' .' .' .' '. .73 .72 1916 January .76 April .85 July .82 October .86 1917 January 1.10 April 1.30 July 1.75 October 1.85 .54 .46 .42 .40 .39 .42 .47 .47 .52 .62 .66 .62 .66 .68 .71 .73 .85 ..01 ..29 1.31 1918 January. ..... 1.85 April 1.85 July 1.85 October 1.85 1919 January 1.65 April 1.75 July 2.02 October 1.98 1920 January 2.30 April 2.35 July 1.74 October 1.30 1921 January 1.05 April .92 July .83 October .86 1922 January 1.03 February 1.20 March 1.20 April 1.12 May 1.25 June 1.45 1.33 1.35 1.32 1.32 1.08 .93 1.14 1.10 1.07 L.10 .79 .60 .45 .45 .40 .44 .54 .70 .66 .62 .68 .76 WOOL 281 fi 88 9388 5838S $ SS 8838 8888 J| 8 883 8888 38888S tfjsl 38 KRS8 81888 P < 6 HfHHHfH* - g 2 Ms! ^^ ss ^? "J^'^CJ^ THr-1 CMC^rHr-J 8388 B888 i-JH CSJcVJrHrH H iH iH a 1 | * 4| 88 ^ O^^S < 3SS ttj jj_& 8 S8SS8 < 3*^ ",-irH H liii a 8: ' 282 SOME GREAT COMMODITIES makes it obvious that an accumulation of wool in the main producing countries from 1914 to 1921 was inevita- ble. Prior to 1914, annual net imports of wool into Austria-Hungary, Belgium, France, Germany and Russia averaged about 1,202,000,000 pounds. While these coun- tries undoubtedly received a certain amount of wool, at least during the earlier war years, they did not get much. The close of the war found their industries disorganized and their currencies depreciated, so that while they have all been buying wool since 1918, with the exception of Belgium their imports have remained below pre-war amounts. Meanwhile, from causes inherent in the wool- growing industry, already discussed, there has been no marked curtailment of production. The main accumulation of wool was in the United Kingdom and in the British dominions. Beginning with November, 1916, the British Government arranged to take over the Australian and New Zealand clips, and con- tinued to purchase them for three seasons thereafter. Although there was no arrangement for taking over the entire South African clip of any year, the British Govern- ment also bought large quantities of wool there. The growers had been paid for this wool but this did not alter the situation in the least, as far as stocks were concerned, the net result being that on June 30, 1920, the British Government was the owner of 2,905,544 bales. Although exact data are not available as to the origin of wools in- cluded in this total, apparently about 2,000,000 bales were Australian, 800,000 bales New Zealand, and the remainder South African and other wools. It was clear that in fair- ness to the British Government this wool would have to be sold, thus bringing it into competition with the WOOL 283 current clips, and it was arranged that any profits over the original purchase price should be divided between the British Government and the growers in equal shares. Although by December 31, 1920, these stocks had been reduced by about 300,000 bales, to 2,611,277 bales, of which all but 2,329 bales were Australian and New Zealand wools, at that date they represented nearly one-third of an ordinary annual world clip. In disposing of this wool, it was necessary to take ac- count of current clips. On June 30, 1921, it was estimated that including government-owned wools and the Austra- lasian clips of 1920-21 and 1921-22, there would be available to the market a total of 5,950,000 bales. It was believed that if this enormous quantity of wool, amount- ing to practically two-thirds of a year's clip for the entire world, were all offered on a free market, demoralization would result. To handle the situation, the British- Australian Wool Realization Association, Ltd., popularly known to the wool trade as "Bawra," was formed. In an effort to stabilize the market, not only was this organ- ization authorized to handle the government-owned wool, but after vain efforts to stabilize the price of the current clip by agreement among the growers, on May 9, 1921, the Commonwealth Government adopted a regulation for- bidding the exportation of wool at a price lower than a rate of 8d per pound for greasy wool. This regulation was to be effective for six months, or until November, 1921. On July 31, 1921, Sir John Higgins, speaking for "Bawra," outlined the situation as shown below. His estimates of the 1921-22 clip, and consequently the totals, have been revised according to later official estimates: 284 SOME GREAT COMMODITIES Bales "Bawra" carryover wools Australian 1,489,000 New Zealand 720,000 Total 2,209,000 Cape and other wools 200,000 Unsold balance of 1920-21 clip Australian 500,000 New Zealand 200,000 Total 700,000 Clip of 1921-22 (estimated) Australian 1,900,000 New Zealand 520,000 Total 2,420,000 Grand total 5,529,000 Throughout 1921, these old and new wools were persist- ently fed to the market through auctions in Australia, New Zealand, London and Antwerp, the war wools being offered chiefly in London and on the Continent. On December 31, 1921, "Bawra" carryover of Australian and New Zealand wools amounted to 1,810,000 bales, a reduc- tion of about 800,000 bales from December 31, 1920, and of 400,000 bales from July 31, 1921. In addition, "Bawra" held 80,000 bales of South African wool. Australasian estimates of stocks of Australian and New Zealand wools other than "Bawra" stocks are not available, but the United States Department of Agriculture estimated them at about 600,000 bales as of November 30, 1921. Appar- ently, the total stocks of Australasian wools at the end of 1921, including "Bawra" wools, the carryover from the clip of 1920-21, and the clip of 1921-22 were in excess of 4,500,000 bales or 1,500,000,000 pounds. Although an attempt was made to have wool control continued at the expiration, on November 9, 1921, of the WOOL 285 Commonwealth regulation forbidding the exportation of greasy wool at a price below 8d per pound, this was not successful, except for a temporary extension to Novem- ber 23. On that date, all forms of wool regulation expired in Australia, so that the Australian wool market is entirely free. "Bawra" stocks continued to decline rapidly during the first six months of 1922, being 1,291,000 bales on June 30. The organization will apparently continue to operate until this wool is finally disposed of. Australasian Merinos and Crossbreds. Notwithstanding an active demand for wool throughout the latter part of 1921, Australasian wool stocks are still very heavy. Both old and new merinos have moved well. On August 31, 1919, of the total stocks of Australasian wools held by the British Government, 1,202,023 bales, or 46 per cent., were merinos (including fine comebacks). On June 30, 1922, " Bawra" holdings of merinos were but 204,522 bales, or 16 per cent, of total "Bawra" stocks, and the organiza- tion expects that they will all be sold by the close of 1922. The movement of new wools has also been more active in the merino classifications than in other grades. The accumulation is primarily in crossbreds. " Bawra " stocks of crossbred wools on June 30, 1922, were 917,000 bales of which 18,000 bales were South African wools. Stocks in Other Producing Countries. Although during 1921 the British Government was compelled to purchase about 100,000 bales of the 1919-20 clip of South Africa to relieve the situation there, by June, 1922, the supply of fine grades in that country was practically exhausted. Wool stocks at the central markets of South America on January 1, 1922, were estimated at 37,000,000 pounds, com- pared with about 40,000,000 pounds on the corresponding 286 SOME GREAT COMMODITIES date of 1921. However, stocks at central markets are not total South American stocks, which may even yet be above normal, although much reduced from high levels. Stocks in Consuming Countries. According to the United States Department of Agriculture, stocks of wool in Great Britain, France, and Germany are small. Stocks of wool in the United States at the close of 1921, while adequate, were certainly not heavy. Table R summa- rizes government returns of stocks, reduced to grease equivalent, at the close of each year from 1917 to 1920, and on September 30, 1921. The government stocks were entirely disposed of in March, 1922. TABLE R STOCKS OF WOOL ON HAND HELD BY DEALERS, MANUFACTURERS, AND THE GOVERNMENT ON DECEMBER 31, 1917, TO 1921 Estimated equivalent grease wool Held by December 31 Dealers and Govern- Total manufacturers ment (in thousands of pounds) 1917 544,977 * ' 1918 272,062 * 2 1919 475,000 117,416 592,416 1920 508,778 64,403 573,181 1921'.. . 469,647 45,145 514,792 'Not reported. Total supply of grease, pulled and scoured wool estimated at 460,000,000 Its. 'Returns for September 30, 1921. THE OUTLOOK Including the clip of the Australasian wool year 1921-22, which ends on June 30, 1922, Australasian wool supplies available for the calendar year 1922 are more than half as large as the average annual amount available from all sources for the international market during the five years 1909 to 1913, and they do not fall far short of twice the average annual Australasian exports for that period. If available supplies from sources other than Australasia are WOOL 287 normal, and there is no indication that such is not the case, it is apparent that supplies for 1922 are far in excess of pre- war requirements, and there seem to be no grounds for a reasonable expectation that demand from Europe will return even to the level of 1909 to 1913 in the immediate future. Superficially, the conclusion might be drawn that further heavy declines in the price of raw wool might be antici- pated. However, the situation as regards the "Bawra" wools, which constitute a large proportion of total Austra- lasian supplies, is peculiar. The growers have been paid for this wool once, and the Association has now paid the last installment due on the outstanding priority certifi- cates which were issued to growers in anticipation of the sale of the wool. Under these conditions it seems fairly certain that this wool will never be sold in a way to de- moralize the market for the current or later clips. Until it is ultimately disposed of, however, it is a powerful factor in the international market. Another and equally powerful factor is the inability of consumers throughout the world to pay high prices for woolen and worsted goods. Apparently disposal of the world's surplus of crossbreds still constitutes a problem. There is no surplus of merinos but it does not follow that there is likelihood of a shortage. A sustained demand for them at advancing prices is de- pendent on purchasing power adequate to maintain the consumption of high-priced wool fabrics, and this is not assured. Only after the lapse of years will the interna- tional wool market return to a condition of relative stabil- ity such as prevailed prior to the outbreak of the World War. THE END LD21 , l0 Om-9,'48(B3998l6)476 M185569 THE UNIVERSITY OF CALIFORNIA LIBRARY