221
MINING A N D METALLURGY
May, 1931
They could have done so, because the present crisis
is lasting two years and within two years there was
p l e n t y of time to apply t h e brakes smoothly. They
ought to, for several reasons. First, because indusfry suffers from over-production and i t i s just a s unBy PAUL
AUDIBERT~
reasonable to work new rich mines now a s to plant
HE downward trend of metal prices seems to new corn fields while the American farmers are using
act something like a reagent that precipitates corn a s fuel. Second, because of the tremendous plea
selfishness in most business men's hearts; in of unemployment. People should realize what unemthe same way the upward trend precipitates altruism.' ployment means if oldel. and poorer mines have to
Operators do not say: "I continue working my mine shut down. They must not say that the law of supply
without curtailment because 1 Can afford the present and demand has to operate freely for t h e benefit of
prices while my neighbor cannot and thus will give humanity. Humanity benefits more' from providing
me way." They say: "I continue working my mine work for all the.people who want t o work than it does
because 1. consider it a service for consumers. They from low ,commodity prices. I s there anybody who would
will get better prices on a free market. Any curtail- refuse to pay something
f o r all commodities if
ment would be a n attempt to raise prices artificially, he knew that this little increase of price would prothat is to say, bad economics."
vide work for all people willing to work?
Copper ~ r o d u c e r shave learned how fallacious is
It would have been better for them, and there are
such a n opinion. It perhaps was not fallacious in many reasons to support this opinion. When people
olden times when all mines were worked on a small spent so many millions of dollars' in getting huge
scale even if operating on a big deposit. At that time mines ready to work their objective was twofold: to
the supply and demand law played fail-. When prices get low costs, and t o work out the mine rapidly, thus
were too low and profits were vanishing f o r many giving it more value. This second objective would
mines, they wouldoshut a t once, then little by little always be right if metal prices were unaltered.. We
the metal scarcity would induce prices t o climb UP all know that this is true only for a n average price
again; finally these prices would reach the point over a long period of time, including two o r three
when it became profitable to again work the
cycles (each cycle of approximately 10 years). Theremines. ~ e - o p e n i n g and shutting down mines was fore huge output and short life cannot rely upon metal
then a normal custom. Workers and operators' weak- prices. 1f the life of a deposit is five years, for inly deplored this unstability, but there was nothing stance, and if these five years fall in a period of deeffective they could do about it.
pression, it would havebeen better for t h e huge mine
Later the supply and demand law began to produce to have a smaller output and last ten years, than to
worse results. The mines were becoming bigger and wait f o r a n upward trend of prices. European longbigger, so that they could not stop operating a t the lived mine5 are like long steamers, which are not
price when their profits began t o vanish. It is a ve1.Y markedly affected by the ordinary undulations of
expensive job to shut down a big mine and the re- ocean waves. On the contrary, new huge mines in
sult was that many mines continued operating while ~
~&ia, ~ ~
f or Australia
~~
i i will~be ~very
~ sen~
prices indicated that consumption was being exceeded. sitive to price waves, because their length of life is
The subsequent result was a drasti'c fall of prices. shorter than the length of the waves. Consequently .
lnstead of smoothly undulating price curves we had the difference of their profits, whether thky work in
h
steep slopes up and down. Shutting down s ~ huge
a depressed market or .in a booming market, will be
mines appeared a s something very difficult because enormous. This difference can be of much more imof big appropriations becoming "inactive," be'cause portance than interest on invested capital during the
of a crowd of good workers being ~~~~~~~~ed unem- preliminary waiting period, if they are so wise a s to
ployed, and because of the tangled structure of mines wait.
and by-product industries.
Another noteworthy point for business men is that
Nowadays things appear to be even worse. Mass the present sharp competition brings about high and
production has become a n axiom of producers Just as higher protective tariffs and makes state intervenprogperity has become an axiom of all business men. tion more and more frequent. Both these things are
Mining men with huge deposits have been waiting f o r adverse to business; t h e l a t t e r is especially detrimenyears before beginning t~ operate their mines. This tal because state intervention is contagious from state
waiting time was not, however, f o r the sake of sav- t o state. A third consideration is that a big operating
ing mineral resources. 1t' was to develop their decan get many more tons per worker than an
posits on a gigantic scale, thus giving them the Possiordinary mine. This is a good thing when
bility of mass tonnages and consequent low costs.
workers .are lacking and when consumption i s active,.
: NOW,a t the beginning of the present crisis, could' b u t : i t turns :into a very bad thing when there is an,
these operators stop their development work, could o~er-supply,-of labor and when consumption is sleepthey reabsorb without damage the tremendous accumu- ing
the shadow of huge piled stocks. I t is a
iated kinetic energy?
. .
1: think they could.' not. B u t . bad-thing not ogli;;from the social viewpoint but from
@uld they not;+refrain from operating the:minesafter )iqithe,
. .
e c o r ~ m i c viewpoint as well. Unemployment
$evelopment? I . think they could have: donezso; . 1'' deans,.+w taies
.to .,permit,thes t a t e to support idle
think they ought t o ; .I think it would have .been.vbettei". .people.'' ' ~ ~ ~consumption
e t i ~ means
~
many dollars in, .
for t h e q if they had done,it.
.
,"
.,,,,
;
.??stid
-:in j uqsbld
stocks.
Is!.tbis
not
worth careful?
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=.ector,
~ocieta'~inerari?'&
Metallurgica di P e h " ' Z l a ; Italy..' co'nsideration'?~;
Enlightened
Selfishness
In ]3usiness
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