Secular and Cyclical Movement in the Production and Price of Copper [Reprint 2016 ed.] 9781512817348

Table of contents :
Acknowledgments
Contents
Tables
Charts
I. Introduction
II. Secular Trends in the Production and Price of Copper
III. Characteristics of Cycles in Copper Production and in Copper Prices
IV. Factors Affecting the Characteristics of Cycles in Copper Production and in Copper Prices
V. Summary of Conclusions
Appendix
Bibliography

Citation preview

PRODUCTION AND PRICE O F COPPER

SECULAR AND CYCLICAL MOVEMENTS IN T H E PRODUCTION AND PRICE OF COPPER

By Charles Louis Knight

U N I V E R S I T Y OF P E N N S Y L V A N I A

PRESS

Philadelphia 1935 London.

Humfkrey

Mil ford:

Oxford

University

Press

Copyright

1935

UNIVERSITY OF P E N N S Y L V A N I A Manufactured

in the

Vnttei

States

of

PRESS America

ACKNOWLEDGMENTS THE WRITER appreciates and acknowledges gratefully the aid of many persons who by suggestions and in other ways have contributed immeasurably to making this a better product than it would have been otherwise. Especial acknowledgment is due Dr. Simon S. Kuznets who superv ised the statistical work, guided the writer in its organization and presentation, and performed the laborious task of reading and criticising the manuscript. Dr. J. Parker Bursk and Mr. E. Douglas Burdick assisted in the determination of the cycles and offered many helpful suggestions. Miss Mary E. Leinbach assisted in the statistical computation. Mr. Walter R. Ingalls, Director of the American Bureau of Metal Statistics, Mr. E d w a r d H. Robie, Assistant Secretary of the American Institute of Mining and

Metallurgical

Engineers, Mr. S. P. Trench, Vice President of the American Metal Market and others familiar with the copper industry gave freely of their time in discussing with the writer various phases of the industry. Friendly advice and encouragement have been received

from

various members of the faculties of the Graduate School and of the Wharton School of Finance and Commerce of the University of Pennsylvania. Finally, the writer was greatly assisted by the staffs of the Lippincott and Lea Libraries of the University of Pennsylvania. T o all of those whose kindly help was so freely given the writer expresses his sincere thanks. C. L . K . November, 1934.

ν

CONTENTS Chapter

Page

I

INTRODUCTION

II

SECULAR

TRENDS

I IN

THE

PRODUCTION

AND

PRICE OF C O P P E R III

II

C H A R A C T E R I S T I C S OF C Y C L E S IN C O P P E R

PRO-

D U C T I O N A N D IN C O P P E R P R I C E S IV

FACTORS

AFFECTING

THE

42

CHARACTERISTICS

OF C Y C L E S IN C O P P E R P R O D U C T I O N AND IN COPPER PRICES V

SUMMARY

96

AND CONCLUSIONS

130

APPENDIX

137

BIBLIOGRAPHY

153

vii

TABLES Table ι

Page A v e r a g e A n n u a l Rates of C h a n g e in the Secular T r e n d s of the M i n e P r o d u c t i o n of C o p p e r D u r i n g Quinquennial

Periods

in V a r i o u s

Successive

Countries,

1880-

1929 2

22

R a n k s of V a r i o u s Countries A c c o r d i n g to Rates of Growth in the Mine Production of C o p p e r , 1880-1929

3

A v e r a g e A n n u a l Rates of C h a n g e in C o p p e r

23

Production

During Twenty-five Y e a r Periods 4

26

D e v i a t i o n s of the A v e r a g e A n n u a l P e r c e n t a g e

Rates of

C h a n g e in the Secular T r e n d s of the M i n e Production of C o p p e r in V a r i o u s Countries from the O r d i nates of the Straight L i n e T r e n d s 5

32

A v e r a g e A n n u a l P e r c e n t a g e Rates of C h a n g e in the Secular T r e n d s of C o p p e r Prices in N e w Y o r k , London, and H a m b u r g , 1860-1929

6

37

A v e r a g e D u r a t i o n of Specific Cycles in the Mine Production of C o p p e r

7

44

Frequency Distribution of C o p p e r - P r o d u c t i o n Cycles and P e r i o d s of

Expansion

and Contraction

in

Various

Countries, A c c o r d i n g to Duration, 1879-1930 8

45

A v e r a g e Durations in Y e a r s of Specific Cycles in the Mine Production

of

Copper

During

Various

Periods

in

D i f f e r e n t Countries 9

48

N u m b e r of C y c l e s in the Mine Production of C o p p e r in V a r i o u s P e r i o d s in D i f f e r e n t Countries and Percentages of the F u l l C y c l e s I n c l u d e d in the E x p a n s i o n and Contraction Periods, Respectively

10

53

D u r a t i o n s of Cycles in C o p p e r Consumption in the U n i t e d States, 1893-1930

11

55

A v e r a g e D u r a t i o n of C o p p e r - P r i c e Cycles in N e w

York,

L o n d o n , and H a m b u r g , D u r i n g V a r i o u s P e r i o d s ix

56

χ 12

13

14

15

16

17

18

19

20

TABLES Average Duration in Years of Cycles in the Price of Copper During Various Periods in New York, London, and Hamburg

58

Percentages of the Average Duration of Cycles in Copper Prices in New York, London, and Hamburg During Various Periods Included in the Expansion and Contraction Periods, Respectively

59

Average Duration in Years of Business Cycles in the United States, England, and Germany, During Various Periods

61

Average Standings at Cyclical Turning Points, Expressed as Percentage Deviations from Their Base Lines, of Cycles in the Mine Production of Copper, 1879-1930 and 1 8 7 9 - 1 9 1 4

63

Average Amplitude of Cycles in the Mine Production of Copper, 1879-1930. Average Rise from Trough to Crest ; Average Decline from Crest to Trough ; Average Rise and Decline

65

Average Amplitude per Year of Cycles in the Mine Production of Copper, 1879-1930 and 1 8 7 9 - 1 9 1 4 ; Average rise per Year from Trough to Crest; Average Decline per Year from Crest to Trough; Average Rise and Decline per Year

66

Coefficients of Rank Correlation Between Average Amplitude per Year of Cycles in Copper Production in Various Countries and Average Duration, Average Annual Rate of Growth, and Relative Importance of the Various Countries in Copper Production During 1879-1930

68

Average Amplitudes of Specific Cycles in the Mine Production of Copper in Various Countries During 18791896 and 1 8 9 7 - 1 9 1 4 .

71

Average Cyclical Values, Average Total Change, and Average Change per Year in Specific Cycles in the Mine Production of Copper in Various Countries, 1879-1930

73

TABLES 2i

22

23

24

25

26 27

xi

Average Standings at Cyclical Turning Points, and Average Total Amplitudes and Average Amplitudes per Y e a r of Cycles in Copper Prices in New York, London, and Hamburg, During Various Periods

76

Comparison of the Average Durations and the Average Amplitudes of Cycles in Copper Prices in New York, London, and Hamburg, Relative Standings Ranked in Ascending Order

79

Average Amplitudes of Specific Cycles in Copper Prices in New York, London, and Hamburg During 18791897 and 1897-1914

80

Average Cyclical Values, Average Total Change, and Average Change per Year in Specific Cycles in Copper Prices in New York, London, and Hamburg, During Various Periods

83

Relationship Between the Average Rate of Increase per Year in Copper Production and Average Duration and Average Amplitude of Specific Production Cycles in Various Countries, 1879-1930

86

Duration of Specific Price and Production Cycles in the Cycles in the Trends

91

Percentage of the Copper Exports Which Each of the Surplus-producing Countries Shipped to Its Principal Foreign Market in Various Years

98

28

Indices of Conformity of Cycles in the Mine Production of Copper in Surplus-producing Countries with Reference to Cycles of Refinery or Smelter Production in the United States and Great Britain, 18791930 105

29

Time Relationships Between the Cyclical Turning Points in Copper Production in the Surplus-producing Countries and Corresponding Reference Dates in the United States and Great Britain 107

30

Time Relationships Between the Cyclical Turning Points in Copper Production in the United States and in Various Other Countries

108

xii

TABLES

31

Time Relationships Between the Cyclical Turning Points in Copper Production in Great Britain and in Various Other Countries 109

32

Years in Which High and Low Points Occurred in Copper Mine-Production Cycles

HI

Periods of Concentration Observed in Table 6

113

33

of

Cyclical Turning

Points

34

Total Number of Cyclical Turning Points in Each Country and the Number and Percentage Included in the Concentration Periods, 1879-1930 115

35

Indices of Conformity of Cycles in the Mine Production of Copper with Cycles in Copper Prices in Various Periods 117

36

Changes in the Price, Production, Stocks, and Consumption of Copper, 1906-1929 121

37

Years in Which Cyclical Turning Points Occurred in the Price, Production, Consumption, and Stocks of Copper in the United States, 1900-1930 124

38

Comparison of Stocks of Copper as of December 3 1 s t with Three Months' A%'erage Consumption in The United States and the World 126

39

Cyclical Turning Points in Copper Prices in New York, London, and Hamburg, and in Business Conditions in the United States, England, and Germany, 18601930 128 APPENDIX

ι to 1 1

Original Production Data, Ordinates of the Lines of Primary Trend, and Original Data Expressed as Percentages of the Ordinates of the Lines of Primary Trend for Various Countries 138

1 2 to 14

Original Price Data, Ordinates of the Lines of Primary Trend, and Original Data Expressed as percentages of the Ordinates of the Lines of Primary Trend 149

CHARTS Chart ι to 4 5 6 7 to 9

Page Original Production Data and Lines of Trend, Various Countries

Secular 12-15

Original Price Data and Lines of Secular Trend, New York, London, and Hamburg

28

Average Cyclical Patterns of Copper Prices in New York, London, and Hamburg

82

Average Cyclical Patterns of Copper Production in Various Countries, and Average Reference Cycle Patterns 101-3

xiii

I

INTRODUCTION P U R P O S E OF S T U D Y

deals with the analysis of the secular and cyclical movements in copper production and copper prices in various countries since i860. Such a study may be purely historical in nature, and conducted primarily with the objective of merely tracing the secular and cyclical movements in the data throughout the periods for which they are available, discovering whatever relationships have existed and explaining them. While the subject of the investigation necessarily involves journeys of discovery into the history of the copper industry, an alternative to random wandering lies in the possibility of directing our inquiry with a view to testing certain hypotheses. The latter course is adopted in the present study.

T H I S STUDY

There are several features of the copper industry that make the secular and cyclical movements in copper production and prices an interesting subject for special study. Some of the features are found also in other industries, while some of them are peculiar to the copper industry, but at any rate the combination of features is hardly to be frfund in any other industry. The total supply of copper is drawn from all parts of the world, with each of the hemispheres and every continent contributing an important share. Copper is a commodity in the production of which important economies may be realized through large-scale operations, and in which absentee ownership and control apparently are not obstacles to success. Consequently we find the industry dominated by a few highly integrated organizations which are controlled by a few financial groups, with American capital controlling between one-half and three-fourths of the world's copper-producing capacity. ι

PRODUCTION AND PRICE OF COPPER The production of copper is subject to a high degree of technical control. Being a mine product, the production operations are generally affected very little by weather conditions. The output can be increased or decreased at any time of the year within a comparatively short period of time whenever conditions warrant changes in output. With adequate capital and labor available, the increase in output is subject only to the physical limitations of the extent and character of the ore bodies and, in the case of underground vein mines, to spatial limitations. The decrease in output is limited largely by the economic factors of overhead costs and the cost of reopening a mine which has been closed down, both of which factors make for a continuation of production, probably on a considerably reduced scale, even when the price of copper and other conditions indicate the advisability of further curtailment. Copper is sold in a world market in which there are comparatively few and unimportant obstacles in the way of its free movement from one area to another in response to price differentials. The greater part of the world's copper production is sold by a small number of sales agencies, most of which are integral units in the producing organizations, concentrated within an area of about one square mile in lower Manhattan. Despite the high degree of concentration of control over production and sales, however, the copper market has been characterized by varying degrees of competition during the greater part of the period covered, and anything approaching monopoly control over price has occurred only on rare occasions and has been generally short lived. Copper is used primarily as an industrial raw material in the production of producers' and consumers' goods. The nature of the demand for copper is indicated by the marked cyclical fluctuations in its production and prices. I t finds its principal uses in the electrical power, light, and communication industries; and in the automobile, engineering and construction, and radio industries. Long durability is one of the outstanding characteristics of copper, and it is of great concern to the copper industry for two reasons. I n the first place, the great durability of copper results in the replacement demand for copper being negligible. The development of new uses for copper and increasing its use in old uses are, in consequence, factors of first importance for the industry. Secondly, many millions of pounds of copper are recovered every year from

INTRODUCTION

3

previous uses and enter the market again in competition with the primary, or virgin, copper. T h e quantity of copper so recovered is rapidly increasing. I t is easily apparent that the copper industry is confronted with a condition of demand such as confronts few, if any other industries. Enterprisers in most other lines of industry rely upon the replacement demand to constitute a large part, and in some cases, the greater part of the total demand for their products. I t is obvious that the replacement demand for coal and petroleum and their products,

f o r cement, fertilizer, and building materials

in

contrast to that f o r copper, constitutes the greater part of the total demands

for these products.

T h e recovery of

large

amounts of

copper from previous uses constitutes a variable factor which has considerable affect upon copper prices but over which the producers of primary copper have little control. It presents a situation which is found in few, if any other industries, and increases the difficulty confronting copper producers in their efforts to stabilize the price of copper. Preliminary observation of the statistical data on the production and price of copper suggests certain hypotheses towards the testing of which we may direct our analysis. We may state the hypotheses as follows : ι . That the secular movements in the mine production of copper in the various countries included in this study establish

similar

trends ; and that they show in common a tendency of copper production to grow at declining rates ; 2. T h a t

the secular

trends

of

copper prices

in the

principal

markets have followed similar patterns, which have been closely associated with the movements in the general levels of wholesale prices in the respective countries; 3. T h a t the varying rates of change in the secular movements of copper production have been directly associated with the rates of change in the secular movements of copper prices; 4. T h a t the cycles in copper production in the various countries differ in respect to average duration and average amplitude, but that the average patterns of cyclical movements are s i m i l a r ; 5. T h a t the average total amplitude of the production cycles is but little affected by variations in the average duration;

PRODUCTION

4

AND

PRICE

OF

COPPER

6. T h a t the cycles in copper production are d e t e r m i n e d more by common c a s u a l factors of u n i v e r s a l effect than by f a c t o r s of localized effect; 7. T h a t the cyclical movements in copper prices in the p r i n c i p a l m a r k e t s show a high degree of similarity in respect to their a v e r a g e durations

and

average

amplitudes,

and

also in

respect

to

their

average patterns; 8. T h a t the cycles in copper prices are determined more by common c a s u a l factors of u n i v e r s a l effect than by factors of

localized

effect ; 9. T h a t d u r i n g the expansion phase of the cycles in the trends of copper production and of copper prices a l a r g e r p e r c e n t a g e of the d u r a t i o n of the specific cycles is i n c l u d e d in the e x p a n s i o n period, and a s m a l l e r percentage in the contraction period than d u r i n g the contraction phase of the cycles in the trends ; 10. T h a t cycles in the mine production of copper in a copperexporting

country,

which

is

unimportant

in

the

consumption

of

copper, are more closely related to cycles in the smelter or refinery production

of

copper

in the c o n s u m i n g

country

which

takes

the

g r e a t e r part of its copper exports than to those in other countries. I t is possible that studies directed a l o n g the line s u g g e s t e d by the f o r e g o i n g hypotheses can contribute to b r o a d e n i n g our u n d e r s t a n d ing

of

the

secular

and

cyclical

movements

in

business

activity.

C y c l i c a l movements in business activity have e n g a g e d the attention of students for many years. F l u c t u a t i o n s in the production and prices of most commodities constitute the most prominent f e a t u r e s of business cycles and are, in fact, commonly recognized as essential indices of cyclical movements in business activity. I n m e a s u r i n g and s t u d y i n g the

fluctuations,

however, attention has been centered f o r the most

part upon the common phenomena in an attempt to discover g e n e r a l u n d e r l y i n g causes of the

fluctuations,

while

little attention has been g i v e n to s t u d y i n g the cyclical

the

comparatively fluctuations

in

the production a n d prices of s i n g l e commodities. F u r t h e r m o r e , the problem of cyclical

fluctuations

has been approached chiefly f r o m the

point of v i e w of a national economy rather than of an i n t e r n a t i o n a l economy, a n d , as a consequence, c o m p a r a t i v e l y f e w attempts

have

been m a d e to distinguish b e t w e e n c y c l i c a l movements in the p r o d u c tion a n d prices of commodities which are p r o d u c e d in m a n y d i f f e r e n t parts of the w o r l d and which are sold in a w o r l d m a r k e t , and those

INTRODUCTION

S

"which are consumed chiefly in the country in which they are produced. T h e study of secular movements in the production and prices of single commodities, and the relationship between the secular and cyclical movements, have been similarly neglected. 1 It is with a belief in the possibility of shedding light upon the broad problem of understanding the nature and causes of business cycles through studying the secular and cyclical movements in the prices and production of single commodities in different countries that this study is attempted. It is not to be expected, of course, that definite conclusions in this connection can be established upon the basis of a single study. T h i s result can be achieved only when a large number of similar studies have been made and their results so classified as to permit the observation of significant relationships. Just as our understanding of the nature and significance of the movements of various price levels has been increased by supplementing the study of the general averages of prices by studies of the changing

interrelationships between the prices of

individual

commodities, so our understanding of business cycles may be increased by supplementing the study of the general phenomena by studies of the secular and cyclical movements in the production and prices of individual commodities. SCOPE

OF

STUDY

Copper was one of the first metals used by the human race, and although its service to man antedates written records, its rise to eminence among industrial raw materials used in satisfying human wants awaited the coming of the electrical age and is a matter of the past century. T h e statistical data on copper prices and production upon which this study is based cover practically the entire period during which the copper industry has grown rapidly to occupy a place in the front rank of our major industries. N e w York, London, and Hamburg are the principal copper markets of the world, and the analysis covers the secular and cyclical movements in copper prices in these cities during the period 18601930. 'See Prices;

however, Their

Simon

Nature

S.

ani

Ion M i f f l i n C o . , N e w Y o r k ,

Kuznets, Their 1930.

Secular

Bearing

Upon

Movements Cyclical

in

Production

Fluctuations,

and. Hough-

6

PRODUCTION

AND PRICE OF

COPPER

T h i s study deals with secular and cyclical movements in copper production in all of the countries which produced one per cent, or more of the world's copper production during the decade 1920-1929. 2 T h e ten countries included in this category, in the order of their relative importance as copper producers during the period, are the United States, Chile, Belgian Congo, Japan, Canada, Mexico, Peru, Spain and Portugal, Germany, and South A f r i c a . Spain and Portugal are treated as one country since a large part of their copper production is obtained from the same geologic formation, and the production statistics for the early part of the period covered do not distinguish between the production in each. A study of the world's production is also included, and, in this connection, the world is referred to as a producing unit. I n most instances the production data cover the period 1879-1930. Exceptions are found in the case of

Canada,

1881-1930,

South

A f r i c a , 1879-1929, and Belgian Congo, 1911-1929. Copper production began in the last named country in 1911. Although copper was mined in most of the other countries many years prior to 1879, reliable production data for most of them begin about that year, so for the sake of uniformity 1879 was chosen as the initial year of the production period. Unfortunately for our purpose, data on the recovery of secondarycopper in all of the principal countries are not available. Only in the United States do we find data on the subject compiled as far back as 1906, and the lack of similar data for other countries prevents their inclusion in the production data from which the secular trends and cycles are derived. Secular trends in copper production and prices in different countries are studied in Chapter I I , and cyclical movements in Chapters I I I and I V . T h e relationships between the copper supply and demand factor as reflected in production and price data are summarized in Chapter V . "Kor the purpose of this study we m a y define secular movements as " c o n t i n u ous, irreversible changes which underlie the c y c l i c a l fluctuations of a time series." ( S i m o n S. K u z n e t s , of.

cit., p. 60.) C y c l i c a l movements m a y be defined as r e -

c u r r i n g movements in time series of i r r e g u l a r periodicity with a m i n i m u m d u r a tion of two years.

INTRODUCTION

7

SOURCES AND E V A L U A T I O N OF DATA

The quotations of the average yearly copper prices in New York, in cents per pound, are those of the Engineering as tabulated in T h e Mineral

Industry,

and Mining

Journal

both of which are published

by the M c G r a w - H i l l Book Company, the former appearing weekly and the latter annually. T h e quotations for the period

1860-1899

are prices in New Y o r k of lake copper, i.e. copper mined in the Keeweenaw Peninsula, Michigan, Lake Superior region, which until about 1880 was the principal copper-producing region in the United States. T h e quotations for the period 1900-1930 are for electrolytic copper f.o.b. eastern seaboard refinery equivalent. The Engineering

and Mining

Journal quotations are widely used

in the copper trade as the basis for the settlement of contracts. T h e average

annual prices are arithmetical

averages of the

monthly

averages, which are arithmetical averages of the daily quotations, which are weighted by the tonnage sold.'' The annual average prices of copper in London used in this study are based upon the London Metal Exchange quotations. They were compiled by Augustus

Sauerbeck until

1912 and by The

Statist

thereafter, and published in various issues of the Journal of the Royal Statistical

Society.

The price of copper in London is quoted in terms of

pounds

sterling per ton of 2,240 pounds of standard copper. Standard copper includes several different grades of copper, and the grade which is the basis of contracts on the London Metal Exchange analyzes from 99 to 99.3 per cent copper as compared with 99.9 per cent or higher in prime lake and electrolytic copper. T h e New York and London quotations are not strictly comparable, therefore, even when

ex-

pressed in terms of the same monetary standard, since they represent prices of

different grades of

copper.

Furthermore,

prior to the

revamping early in the twentieth century of the Exchange's standard contract specifications, a wide variety of loosely defined grades of copper known

as Chile

bars

and

"Good

merchantable

brands"

( G M. B ' s . ) were traded in, and, as a result, the London price quotations for different years during the latter half of the nineteenth Kor a description of the method of c o m p i l i n g the quotations see E d w a r d Robie, " T h e M a r k e t i n g of C o p p e r , " Engineering 1923 ; pp. 7 0 7 - 7 0 8 .

and Mining

Journal,

H

A p r i l 21

8

P R O D U C T I O N A N D P R I C E OF C O P P E R

century probably refer to different grades of copper. The lack of uniformity in the data is a defect which cannot be remedied now, but fortunately for our purpose it is not a serious objection, since we are interested primarily in the secular and cyclical movements of copper prices, and the prices of all grades of copper usually move together in the same direction. The average annual prices of copper in Germany are quoted in terms of marks per 100 kilograms (220.46 pounds avoirdupois), and were obtained from three different sources. Those for the period 1860-1878 are based on the prices of copper at Hamburg and Frankfurt, compiled by L. Hertel in Die Preisentwicklung d. Unedlen Metalen u. Steinkohle seit 1850, as given by Dr. Simon S. Kuznets in Secular Movements in Production and Prices.4 Those for the period 1879-1918 are from Vierteljahrshefte zur Statistik des Deutschen Reichs, various volumes; and those for the period 19191930 are from the Statistiches lahrbuch für das Deutsche Reich, various volumes. Prices during 1879-1914 are for "English, best selected" copper, averaging about 99.75 per cent copper, at Hamburg; those during 1916-1919 are for "English, best selected" copper at Frankfurt am Main; and those for 1920-1930 are prices in Berlin of electrolytic copper, analysing 99.9 per cent and up, "prompt, c.i.f. Hamburg, Bremen, or Rotterdam." The comments relating to the London price quotations are applicable also to the German quotations. The data on copper production in the various countries during the period 1879-1929 were obtained from Mineral Resources of the United States, part 1, successive volumes, formerly compiled by the United States Geological Survey but in recent years by the Bureau of Mines. The 1930 production figures were obtained from the American Bureau of Metal Statistics, Yearbook, 1930. For the period 1879-1907 the data for countries other than the United States are based upon statistics gathered by Henry R. Merton & Co., London. Beginning with 1908 they were compiled by the United States Geological Survey from official publications of the various countries, as were also the data on copper production in the United States since 1845. All production figures are for the calendar year. 'Houghton Mifflin Co., Boston, 1 9 3 0 ; p. 477.

INTRODUCTION

9

The data represent either smelter production of copper from domestic ores, or mine production as computed either on the basis of the estimated average percentage copper content of the ore or by crediting to the countries of origin the smelter production from imported ores, except as otherwise stated. The actual production of primary copper is shown only by the refinery figures plus the relatively small proportion of the blister copper output of the converters which is used for casting purposes and in the manufacture of copper sulphate. Some of the copper is also lost in the reduction processes so that not all of the copper content of the ore is obtained as refined copper. It would be desirable, if it were possible, to estimate a country's copper production on the basis of the refinery output. By the time copper goes through the refining process, however, it is no longer possible to identify its source, copper from several different regions being refined together. Since a large proportion of the copper mined in some countries is refined in other countries it is necessary that the mine output be measured before it reaches the refinery if the amounts obtained from different regions are to be ascertained. The copper content of copper matte, the product of the blast or reverberatory furnaces ; of copper precipitate, the product of the leaching process of reduction ; and of copper concentrates can be measured more accurately than can that of the ore. It is preferable, therefore, to estimate a country's mine production of copper on the basis of the smelter and leaching products wherever possible rather than on the basis of ore content. This has been done in the case of most of the countries for all or part of the period covered. The United States production figures represent smelter production from domestic ore. I n the other countries the production figures represent smelter output from domestic ore in some years and the estimated copper content of domestic ore in other years, the copper content of matte obtained from imported ore being credited to the country in which the ore was mined. The former practice seems to have been generally followed within recent years, but the production data for the earlier years of the period covered do not distinguish between the two methods of estimation. Furthermore, one to three months usually elapse between the mining and the smelting and refining of copper. There is consequently a time lag between the mining, smelting, and refining processes which should be borne in mind when comparing production

IO

PRODUCTION

figures

A N D P R I C E OF

COPPER

estimated on the basis of mine, smelter, and refinery output.

Some of the copper appearing in the mine production figures of one year appears in the smelter production figures of the following year, and that appearing in the smelter production figures of

December

will probably appear in the refinery production figures of the following J a n u a r y or February. While recognition of these factors is desirable in accounting f o r differences in the three sets of production figures, they are of little consequence in the study of secular and cylical movements in production since they affect only the timing of the cycles and that only slightly. I t is more important f o r our purpose to recognize that the production figures are only close approximations rather than accurate statements of

production.

The

work of

the statistical

gathering

agencies of the federal government has suffered at times from inadequate appropriations and possibly from political interference, but the data on copper production presented in the publications of the United States Geological Survey and the Bureau of Mines are probably as close approximations to accuracy as any other covering the same period. The approximation to accuracy is probably closer in recent years than in the earlier years of the period as a result of improvements in the facilities for collecting data. T h e data on imports, exports, and consumption of copper

are

incidental to the study of those on production and prices. T h e sources of these data are given with their presentation, and are subject to the foregoing observations as to their reliability. T h e short ton of 2,000 pounds is used throughout this study as the unit of weight except as otherwise noted. Annual data are used throughout the study. Although average monthly prices in all three markets

are

available for all or the greater part of the period, monthly data on copper production are available in the U n i t e d States f o r only a f e w years during the period, and not at all in most of the countries.

II

S E C U L A R T R E N D S IN T H E PRODUCTION AND PRICE OF COPPER S E C U L A R T R E N D S IN C O P P E R

PRODUCTION

S E C U L A R trends in copper production in the various countries included in this study are shown in Charts I to I V . The trend lines were carefully fitted to the original data by the freehand method, and were checked for goodness of fit by the computation of firstdifferences and by independent observers. The original data and the ordinates of the trends are given in Appendix 2. It should be remembered that the plotting of secular trends of time series, whether by the freehand method or from ordinates computed by mathematical formulae, is at best only an attempt at the visual representation of long-period movements. THE

The reliability of a trend line diminishes at both ends of the series, since it is not affected by preceding and succeeding data. Future data may change materially the direction of the trend line at the latter end of the series, and the projection of a line of trend into the future is warranted only when it is justifiable to postulate a continuation of existing conditions affecting the data. When the subject-matter of the series is governed in its growth or decline by ascertained laws, these afford a basis for the projection of a defensible line of trend. The production of copper, however, is not governed apparently by any law. It depends upon a large number of independently variable factors, including chiefly unpredictable changes in the conditions affecting the demand for it and its supply. It is, consequently, subject to erratic fluctuations over short periods of time and unpredictable changes in the rate and direction of growth over long periods. This statement applies with particular force to production within any given area. 11

i6

PRODUCTION AND PRICE OF COPPER

During short periods of time changes in the demand for copper are visually reflected in changes in its price in the same direction. Copper is sold in a world market and, despite trade restrictions, there have been but few occasions, and these of fairly brief duration, when a sufficiently large part of the total supply was under such unified control as to make possible an adjustment of the market supply to changes in demand quickly enough to prevent a change in price. There is, of course, no disposition on the part of producers to prevent rises in price, and decreases in price have more often been retarded than prevented. Prices that are above costs of production are an incentive to increased production, and during a period in which new uses for copper are being rapidly developed, as during the past half-century, this may become the usual condition. As a result, demand is an important factor in accounting for sharply inclined lines of trend in production, since in an economic order in which production is directed chiefly by the opportunities for profit, we should not expect increases in production where such opportunities are not apparent, regardless of how abundant the raw materials of production may be. Conditions affecting the supply of copper are more important than those affecting demand in determining the secular trend of copper production in different countries. The direction of the trend line and the rate at which production increases or decreases during different periods depend primarily upon the discovery and development of new ore deposits and the exhaustion of old deposits ; the development of new and improved processes of mining and metallurgy that make possible the working of ores that were formerly considered too poor to work, or that increase the percentage of copper extracted from the ore; improvements in the means of transportation that lower the cost of bringing the copper to market, and thereby stimulate production in old as well as in new producing areas; and the adoption into the copper industry of the fruits of scientific research, engineering progress, and invention, such as the electrification of mines, improved ventilation, improved pumping apparatus, and other devices that make it possible to carry mining operations to greater depths, and reduce the costs of production. Secular trends of production reflect the combined influence of all of these factors, but since improvements in mining, metallurgy, and transportation, and the fruits of research and invention are available to all pro-

SECULAR

TRENDS

17

ducing areas, although their adoption in some may be delayed, d i f ferences between secular trends of production in different countries may be explained chiefly by the exhaustion of some ore deposits and the development of others, of which a few instances may be cited. T h e sharp upturn in the trend of production in the United States a f t e r 1 8 8 0 was caused by the development of ore deposits in Montana and Arizona. Further stimulus to production was supplied by the rapid development of ore deposits of low grade in Utah about the turn of the century, as improvements in mining and metallurgical methods made possible the profitable working of low-grade ores, and in N e v a d a a f t e r 1906. T h e trend of production in Chile declined as a result of the exhaustion of the higher grades of oxide ores in the mines then being worked.

Most of the mines were owned by native

English

capitalists,

and

were worked

families and

by small-scale

production

methods which did not encourage the rapid adoption of

improve-

ments in mining and metallurgical processes. T h e decline in the production trend continued until the trend of copper prices turned upward about 1894, after which it rose gradually as improvements in wet reduction processes, particularly the flotation process, made possible the profitable mining of

low-grade sulphide ores

which

are found in abundance in Chile. T h e rapid development of the Chuquicamata ore body a f t e r 1 9 1 0 turned the trend line sharply upward. T h e Canadian copper industry dates from about 1 8 8 2 , and until 1896 the nickel-copper deposits around Sudbury, Ontario, supplied the bulk of C a n a d a ' s copper production. A f t e r 1896 the ore deposits in the T r a i l and Boundary districts of British Columbia were developed rapidly, and within a few years these districts were producing about three-fourths of the Canadian output. A f t e r 1 9 2 3 copper ore deposits in Quebec were developed rapidly, the production in the province increasing from a little less than two million pounds in 1 9 2 4 to more than 55 million pounds in 1 9 2 9 , and increased attention was given to increasing the production in the Sudbury district, a l l of which is reflected in the Canadian production trend. 1 T h e phenomenally rapid increase in Mexican copper production a f t e r 1 8 8 7 is due chiefly to the development of the 'TAe Mineral

Industry,

1 9 2 4 . p. 201 ; 1929, p. 147.

Rothschild-

i8

PRODUCTION AND PRICE OF

COPPER

controlled Boleo mine, which accounted for about 90 per cent, of the country's output until 1900, and to the development after 1900 of the Moctezuma and Cananea mines in Sonora, which soon became one of the world's leading copper-producing regions. T h e decline in the price of silver during the last quarter of the nineteenth century diverted attention in Peru from silver production to copper production, and this factor, together with the development of transportation facilities, accounts to a large extent for the sharply inclined trend of production after about 1885 as the copper deposits of the Cerro de Pasco region were developed rapidly. I n Spain, the Rio Tinto mine, which has always supplied the bulk of the Spanish copper production, had been worked intermittently and by crude methods for about three thousand years by Phoenicians, Carthaginians, Romans, Goths, Moors, and Spaniards, when it was purchased in 1873 by a London firm, Matheson & Company, which organized the Rio Tinto Co., Ltd. 2 T h e enterprise and aggressive policies of the English firm in developing its resources are reflected in the production trend which rose rapidly until about 1890. Development of the rich copper ores in the K a t a n g a Belt of Belgian Congo by the Union Minière du Haut Katanga, in which the Belgian Government owns about 55 per cent, of the issued stock and a British Company ( T h e Tanganyika Concession) owns about 45 per cent., has been pushed since about 1 9 1 1 , with the result that since 1925 the region has been surpassed in copper production only by the United States and Canada. Its production trend line pictures the rapid increase in production, at the rate of 30.2 per cent, per year, from 1,113 short tons in 1911 to 151,006 tons in 1929. Improved transportation facilities have been an important factor in increasing production. T h e shading off of a trend line towards a horizontal or declining direction reflects three conditions, either singly or in combination; namely, the exhaustion of some ore deposits, the depletion of some of the high-grade ores, and the unprofitability of further expansion of production.

Usually, but not always, the copper content of

ore

diminishes with increasing depth, a circumstance which results from the geologic processes of ore formation. A s the development of the ore deposits of a region is pushed, a larger amount of ore must be "The

Copper

Handbook,

Vol. V I I I ,

1 9 0 8 , p.

1180.

SECULAR

TRENDS

19

mined and smelted, therefore, in order to recover a given amount of copper. Also, the expense of bringing a ton of ore to the surface increases with the depth to which mining operations are carried. Unless the development of an ore deposit is accompanied by marked improvements in mining and metallurgical methods, the cost of producing copper will increase. Even in the face of such conditions the output of copper may be maintained or increased for awhile by expanding the scale of operations through the use of more capital and labor. Large annual increases in production, giving a sharply inclined line of trend, appear to be a characteristic occurrence when the development of ore deposits, newly discovered or hitherto neglected, is undertaken by aggressive management intent upon obtaining the maximum profit. The period of large annual increments apparently extends over fifteen to twenty years, and sometimes longer, following the beginning of development. This is exemplified in the trend of production in Spain and Portugal until about 1 8 8 7 ; in Mexico, 1 8 8 7 - 1 9 0 2 : in Peru, 1 8 9 8 - 1 9 1 5 ; in South Africa, 1 9 1 0 - 1 9 2 4 ; in Belgian Congo beginning in 1 9 1 1 and still continuing; and in Chile, beginning about 1 9 1 0 and continuing. Starting off with a small output the mining companies find that, by expanding their scale of operations through the use of more labor and capital, costs of production may be lowered. For awhile the mechanization of operations reduces the labor cost per unit of product by a greater amount than it increase capital charges. Increased production justifies the construction of smelters and refineries near the mines, reducing transportation costs and bringing further savings through the continuity of operations made possible. The desire to capture as large a part as possible of an expanding market is a further stimulus to increase production rapidly. But there is a limit to which such procedure may be carried profitably. The point of diminishing returns, at which the average amount of physical product per unit of capital and labor used begins to decrease, is reached sooner or later in mining as in other lines of industry, and expansion of the scale of operations beyond this point may be achieved only at an increasing cost of productions per pound of copper. This would occur even if the richness of the ore were maintained, if there were no exhaustion of ore deposits, and if the disadvantages of mining at lower depths were entirely offset by

P R O D U C T I O N A N D P R I C E OF

COPPER

progress in mining methods and machinery. Three factors, therefore, operate to increase the cost of copper production in the absence of offsetting improvements in the methods of production; namely, impoverishment of the ore bodies, the higher expense per unit of product in mining at lower depths, and diminishing returns of largescale organization. As increasing cost of production meets selling price, the point is approached at which profitable operation, and therefore the incentive to expanding operations, ceases. Unless the development of other ore deposits in the region is started while the foregoing processes are in progress, the line representing the trend of production in the region will bend towards the horizontal position, after which it will decline. The pattern of change here described finds an apt analogy in the growth of organisms. The individuals of most species of plant and animal life grow more rapidly during the early years of life. The annual increments to the stature of human beings, for example, usually attain a maximum before the age of *y, after which they become progressively smaller until increase height ceases altogether. This is followed by a period of fairly constant height, and at some time past middle age the stature sometimes diminishes. In keeping with the foregoing hypothesis, the slope of the trend line should indicate the stage of development of a country's copper ore deposits. The moderately inclined straight line trend of German production since 1879 would indicate the steady development of ore deposits that have been worked for many years, the production from which has not been augmented by the opening within recent years of any new deposits of outstanding importance. This is in accord with the known facts, the Mansfeld mines having been for centuries the principal source of Germany's copper production. The same is true of the trend line of Mexican production since about 1907, and of Peruvian production since about 1 9 1 8 . Production in South A f r i c a is apparently entering this stage. The trend lines of production in the United States, Canada, and Japan register the impulses given to production by the successive development of new ore bodies before the development of the older workings had reached its maximum, although the Japanese trend line indicates that the impuse imparted by the latest of the developments is spending its force, and that no new deposits are being developed to maintain the former annual increases in production.

SECULAR

TRENDS

21

T h e trend line of world production has changed its direction twice since 1879—about 1894 and again about 1905. T h e world trend, during the period covered in the chart, has been governed primarily by the trend in the United States, the principal copper-producing country, and since about 1895 there is a near parallel between the two. The world trend is, of course, a composite of the trends in the various countries. Its smooth regularity and freedom from abrupt changes in direction is in marked contrast to the trends in most of the countries. T h e fact that it has continued upward without interruption, and that it has been more steeply inclined after every change in direction, indicates that declining production and diminishing annual increases in production in some countries have been more than offset by increases in production in others. AVERAGE ANNUAL TRENDS

OF

R A T E S OF G R O W T H

THE

MINE

IN T H E

PRODUCTION

OF

SECULAR

COPPER

T h e average annual rate of change in the trend of copper production has differed widely in different countries, and also in different periods within each country. Table 1 shows the average annual rates of increase, or decrease, in the various countries during successive quinquennial periods. T h e ranking of the countries according to the rates of growth in the mine production of copper during the various quinquennial periods is shown in T a b l e 2. The ranks of most of the countries varied considerably from period to period, the smallest variations occurring in the cases of Germany, Canada, and the world. Considering the past fifty years as one period, and

excluding

Belgian Congo in which production began in 1 9 1 1 , we find the largest rates of increase to have occurred in Canada, Mexico, the United States, and Japan, in the order named. I n no other country was the rate of increase in production throughout the

fifty-year

period,· 1879-1929, as high as five per cent. T h e exceptionally high rate of increase of 35.6 per cent in production in Belgian Congo during 1911-1929 is higher than that in any other country during a period of like duration. T h e relatively high rates in these countries are due chiefly to exceptionally low production at the beginning of the period, as well as to large increases in production in later years.

PRODUCTION AND PRICE OF COPPER

22

PIJOM

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'53

U

υrt l··

4)

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\

!

Mea» Deviation From Average Duration

0 'm G

JÜ

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1 1

! ! 1

υ s h

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II 10 13

2.82 2.60 2.38

3-I8 3-90 2.54

6.00 6.50 4.92

1.29 1.00 1.50

».29 j 1.4s 1.70 j 2.20 1.52 ! 2.60 I

9

2.56 2.7s 2.20

2.89

5-44

1.28 1.06

1.23 1 2.05 ι . 3 1 , 2.25 1.65 J 2.67

c

O

Percentage of Duration of FuU Cycle /ncluded m : c 0 '5 w

υ e a υ

47

S3

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a

j

1879-1930

New York London Hamburg

1

υ

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1860-1930

Ne* York London Hamburg

g

c & W

£

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40 48

6o

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1 8 10

3-2S 2.60

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I.I I

47

46 46

53 54 54

while the prices in N e w Y o r k and London continued to decline. These two factors account for the larger number of cycles occurring in H a m b u r g prices than in either New Y o r k or London prices. T h e price of copper declined in all three markets in 1899 following the collapse of the Secretan Syndicate, but the concerted action on the part of American producers in preventing the accumulated stocks of the syndicate from being thrown on the market by the French bankers, to whom the title to the copper passed, resulted in a quick recovery of copper prices in New Y o r k to a cyclical peak in 1890 which has no counterpart in the other two markets. T h e foregoing factors which resulted in a larger number of cycles in copper prices in N e w Y o r k than in London, and a larger number in H a m b u r g than in N e w Y o r k , account largely for the differences m the average durations of the cyclical movements in the three markets, which, of course, vary inversely with the number of cycles. T h e average durations of the cycles in the three markets were fairly evenly divided between the expansion and contraction phases,

CHARACTERISTICS

OF

CYCLES

57

the a v e r a g e contraction p e r i o d e x c e e d i n g s l i g h t l y the a v e r a g e e x p a n sion period

in all instances. T h e

greatest difference between

the

a v e r a g e d u r a t i o n s of the t w o p h a s e s occurred in the L o n d o n price cycles, in which the a v e r a g e of the e x p a n s i o n a n d of the contraction phases represented 40 a n d 60 per cent, r e s p e c t i v e l y , of the a v e r a g e duration of the cycles in 1860-1930. I n no other instances d i d the difference between the p e r c e n t a g e s of the a v e r a g e d u r a t i o n of the cycles included in each o f the phases exceed e i g h t per cent. T h e percentage of the a v e r a g e d u r a t i o n of the f u l l cycles i n c l u d e d in the expansion phase in 1860-1930 w a s highest in H a m b u r g and lowest in London, while in 1 8 7 9 - 1 9 3 0 it w a s the same in H a m b u r g a n d N e w Y r ork and lowest in L o n d o n . T h e percentages of the v a r i o u s specific cycles represented by the e x p a n s i o n phase r a n g e d f r o m 20 to 75 per cent in N e w Y o r k , f r o m 22 to 67 per cent in L o n d o n , and f r o m 20 to 78 per cent in H a m b u r g . T h e mean d e v i a t i o n s f r o m the a v e r a g e durations, as shown in T a b l e 1 1 , indicate that the a v e r a g e s are f a i r l y representative of the specific items. CHANGING

AVERAGE DURATION

OF

PRICE

CYCLES

T h e a v e r a g e d u r a t i o n s of the cycles in c o p p e r prices in N e w Y o r k , London, and H a m b u r g d u r i n g v a r i o u s periods are shown in T a b l e 12, and the percentages o f the a v e r a g e d u r a t i o n s of the f u l l cycles included in the e x p a n s i o n a n d contraction periods, respectively, are shown in T a b l e 13. T h e periods d u r i n g which the a v e r a g e durations are to be c o m p a r e d are d i v i d e d into three groups. G r o u p 1 includes the cycles o c c u r r i n g in the first a n d second h a l v e s of the p r e - w a r period

1879-1914,

and

those o c c u r r i n g

in the

war

and

post-war

periods 1 9 1 5 - 1 9 3 0 . G r o u p 2 i n c l u d e s the first and second h a l v e s of the total

number

o f cycles o c c u r r i n g d u r i n g the p e r i o d

1860-1930,

and also a g r o u p in the m i d d l e of the series i n c l u d i n g either the same number of cycles as is in each of the other g r o u p s or w i t h i n one of the number. I n G r o u p 3 the cycles are d i v i d e d as in G r o u p 2, except that only the p e r i o d 1 8 7 9 - 1 9 3 0 is covered. T h e a v e r a g e durations of the price cycles i n c l u d e d in the first t w o p e r i o d s in G r o u p ι

are directly c o m p a r a b l e

with those of the p r o d u c t i o n cycles

in

G r o u p s 4 and 5, a n d those of the price cycles in the three periods in G r o u p 3 are c o m p a r a b l e

with

those of

the p r o d u c t i o n

cycles

in

G r o u p s ι , 2, and 3. T h e g r o u p i n g of periods in this f a s h i o n has the

P R O D U C T I O N

A N D

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i 1

P R I C E

O F

C O P P E R

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72

PRODUCTION AND P R I C E OF

COPPER

A V E R A G E P A T T E R N S OF C Y C L E S IN T H E M I N E PRODUCTION OF C O P P E R IN V A R I O U S C O U N T R I E S

DURING

1879-I93O

The rise or decline in production tends to be retarded during the longer phase of the cycle. Observation of the deviations of the original data from the trend lines as shown in charts ι to 4 in Chapter 2, reveals great variability in the behavior of the specific cycles in the various series. In the case of two-year cycles the total rise and the total decline were, of course, the same as the rise and the decline per year, but when the cyclical phases were two or more years in duration, changes in the magnitude of the increases or decreases in production from year to year occurred during various phases of the expansion and contraction periods. Sometimes the retardation occurred near the trough of the cycle, sometimes near the crest, sometimes near the middle of the upswing or the downswing. A certain regularity of movement appears, however, when we observe the average patterns of cyclical behavior in the respective series as shown in Charts 7, 8, and 9, in Chapter 4, and in Table 20 in this chapter. In Japan, Canada, Belgian Congo, and Spain and Portugal, the average change per year was greater during the second half of the average expansion period than during the first half, and during the first half of the average contraction period than during the second half. Stated differently, the average annual increases and decreases in production were larger near the crests of the cycles than near the troughs. The average recovery from the cyclical low points was slow as compared with subsequent increases in production but, when once begun, production increased with apparently accelerating momentum to the cyclical crests. The rapid upward movements were, in general, followed by correspondingly rapid downward movements, which encountered increased resistance to further decreases in production as the cyclical troughs were approached. I n the average cyclical pattern of production in the United States, the foregoing relationships were reversed. The average rise per year was greater during the first half of the expansion period than during the latter half, and the average decline per year was greater during the latter half of the contraction period than during the first half. Recovery from cyclical low points was apparently more rapid, and resistance to declines in production greater, than in the foregoing countries. Production was maintained around the crests longer, on

CHARACTERISTICS OF CYCLES .ttO'i oj juiod-ptp^

rx •3 oc ο , Η Ζ Ρ C υ ΙΛ D Ο

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Ζ C Η υ D α c χ Β. Μ Ζ

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luiod-pij^ o\ OS.

73

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74

PRODUCTION A N D P R I C E OF

COPPER

the average, than in the foregoing countries, and the periods of wallowing in the cyclical troughs were briefer. The large-scale organization of the copper industry in the United States, and the fact that the total production has, since 1880, been drawn from several important producing regions are probably the most important factors in accounting for this situation. Average costs of production in the different regions differ widely and the large low-cost producers, such as the Utah Copper Company, are the first to respond to an improvement in conditions which induces an expansion in production, and the last to feel the necessity of curtailing production when conditions become unfavorable. Producers with successively higher costs of production join in the procession of production expansion and lead in the curtailment procession. The situation is different from that in most of the other countries in which production during the greater part of the period 1879-1930 was obtained chiefly from one or two important producing regions, and in which also the scale of operations was much smaller than in the United States. The influence of large-scale operations in making for resistance to decreases in production has been explained previously in the discussion of the duration of the cycles. I n Germany, Mexico, Chile, and South Africa, the average rise per year was larger during the second half of the expansion period than during the first half, conforming in that respect with the average production cycle patterns in the first group of countries named above; and the average decline per year was also greater during the second half of the contraction period than during the first half, conforming in that respect with the average production cycle pattern in the United States. The cyclical patterns indicate, in general, comparatively slow recovery from the cyclical troughs and resistance to influences making for decline from the crests. The slow recovery, in comparison with subsequent increases in annual production, is in keeping with the preceding hypothesis that rapid recovery in the United States has been due in part to the fact that several important regions, with widely differing average costs of production, contributed to production, since this situation does not exist in the countries included in this group. The resistance to decline is also in keeping with the hypopthesis of the effect of large-scale production, with the large proportion of indirect costs to total costs which it involves, and which make for resistance to declines in production. We should not

CHARACTERISTICS OF

CYCLES

75

fail to notice, however, that by the same hypothesis the average patterns of contraction in the first group of countries mentioned should be the reverse of what they are. We find in the case of Peru, also, a cyclical pattern of production which does not fit in with our hypotheses. The average rise per year and the average decline per year are larger during the first half of the expansion and contraction periods, respectively, than during the latter halves. In view of the fact that the Cerro de Pasco region is the only copper region of outstanding importance in Peru, our hypotheses would lead us to expect a cyclical pattern the reverse of what we actually find. The cyclical pattern of world production is unique in that the average rise per year was the same during the first half of the average expansion period as during the latter half, and the average decline per year was the same during the first half of the average contraction period as during the latter half. AVERAGE A M P L I T U D E S OF C Y C L E S IN COPPER PRICES IN NEW Y O R K , LONDON, AND H A M B U R G DURING VARIOUS PERIODS

Average Standings at the Cyclical Turning Points as Percentage Deviations from the Base Line The average standings at the cyclical turning points, expressed as percentage deviations from the base line, of cycles in copper prices in the three principal markets during various periods are shown in Table 21. With only a few exceptions, there is very little difference among the average standings of the cycles in the three markets. The outstanding exceptions occur in the case of the Hamburg price cycles during the period 1860-1930, the average standings of which are considerably lower than those of the New York and London price cycles, and in the case of the New York price cycles during the period 1879-1896, the average standings of which are considerably lower than those of the London and Hamburg price cycles. Average Total Amplitudes

of Cycles in Co-pfer

Prices

The average total amplitudes of cycles in copper prices in New York, London, and Hamburg, during various periods, are shown in Table 21. Considering the entire period 1860-1930, we find that in average total amplitudes of copper prices in New York and

P

7 6

R

u o

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-

CHARACTERISTICS

OF

CYCLES

77

London were approximately the same, the average total rise from trough to crest being slightly higher in N e w Y o r k than in London, and the average total decline slightly less, while the average total rise and decline was the same in both markets. T h e average amplitude of the cycles in copper prices in H a m b u r g was considerably less than in either of the other markets. During

1879-1930 the price cycles in London had the highest

average amplitude and those in H a m b u r g had the lowest. D u r i n g the pre-war period, 1879-1914, and during the first half of the prewar period, 1879-1896, the price cycles in London had the highest average amplitude and those in New Y o r k had the lowest. During the second half of the pre-war period, 1897-1914, the price cycles in New York had the highest average amplitude and those in Hamburg had the lowest. Average.· Amplitudes

fer

in New York,

Year of Cycles London,

and

in Copper

Prices

Hamburg

The average amplitudes per year of cycles in copper prices in New Y o r k , London, and H a m b u r g during various periods are shown in T a b l e 21. Comparison of the average amplitudes per year during the various periods reveals that during the pre-war period,

1879-

1914, the average rise per year was greatest in Hamburg prices and least in London prices ; the average decline per year was greatest in New Y o r k prices and least in Hamburg prices, as was also the average rise and decline per year. T h e same relationships held during the first half of the pre-war period, 1879-1896, but during the latter half, 1897-1914, the average rise per year was greatest in London prices and least in H a m b u r g prices, the other relationships remaining unchanged. D u r i n g the war and post-war periods, the greatest average rise per year occurred in Hamburg prices and the least in New Y o r k prices. T h e relationships between the average declines per year and the average rises and declines per year were the same as during the pre-war period. During most of the periods there were only small differences between the average amplitudes per year of the price cycles in the different markets, the relationships in this respect being closer than in the case of the average total amplitudes. T h e differences between the average amplitudes per year of the New Y o r k and London cycles were generally smaller than those between the average amplitudes

78

P R O D U C T I O N A N D P R I C E OF C O P P E R

per year of the Hamburg cycles and the cycles in either of the other markets. This indicates apparently that copper prices in New York and London are affected more by common influences than is the case with Hamburg prices, despite the fact that the marketing organizations and practices in London are more nearly similar to those in Hamburg than to those in New York. New York and London are much more important as copper markets than is Hamburg, and apparently relative importance in this respect is a more important factor in determining similarities in the cyclical behavior of prices than is similarity of marketing organization and practices. Relationship Between the Average Duration and the Average Amplitude -per Year of Cycles in Copper Prices Table 22 shows that with only a few exceptions there was an inverse relationship between the average duration and the average amplitude per year of cycles in copper prices in the three principal markets. Considering together all five of the periods shown in the table, we find that in nine of ten instances the lowest average amplitudes per year were associated with the longest average durations ; in nine of fourteen instances the highest average amplitudes per year were associated with the shortest average durations ; and in seven of ten instances the average amplitudes per year of the second rank were associated with average durations of the second rank. Excluding the last category of relationships, we find inverse relationships between average durations and average amplitudes per year in eighteen of twenty-four instances. The relationships between the average duration and the average amplitude per year of price cycles are similar to those which we found in the case of production cycles. There are apparently "tops" and "bottoms" also to the cyclical swings in copper prices which set limits to the percentage deviations from the trend-normals regardless of the duration of the cycles. Comparison of the Average Amplitudes of Specific Cycles in Copper Prices in New York, London and Hamburg in 1879-1896 and 1897-1929 Are the average amplitudes of the specific cycles in copper prices in the three principal copper markets changing? The average ampli-

CHARACTERISTICS

OF

79

CYCLES

Table 22 COMPARISON OF T H E AVERAGE DURATIONS AND T H E AVERAGE A M P L I TUDES OF C Y C L E S IN COPPER PRICES IN NEW Y O R K , LONDON, AND H A M B U R G , RELATIVE STANDINGS RANKED IN ASCENDING ORDER !

!

Average Duration (Rank)

i i

Market

I I 10 13

3 2

2 3

2 3 I

1879-1930 New York London Hamburg

9

2 3

2 3

2 3

1879-1914 New Y o r k London Hamburg

6 5

2

s

3

1 2 3

\

I 3

I

1860-1930 New Y o r k London Hamburg

1879-1896 New Y o r k

2 3

2» 2* '

1 2

2 3

2 3 I

2 3

1 2 3

1 3 2

1 3 2

I 2» 2»

I

I

Rise

.2 at

i

'

3 2

8

1897-1914 New Y o r k

V in ¡2

2

1 2

2 I

I* I* 3

1 3 2

2 I 3

3 2 I

3 2

I

2 I

3 2 I

3

3 2 I

3 2 I

2

3 3 3

ri

2 I 3

i

τ

Hamburg

υ


j < u j

> υ υ M o oí M

κ Q

ι

o

s .s -

fcû r ^ l·00 o

3

D O= o ™ JÜ3 £ J Ï

->

c- ^

te t^ ts3 00 • >

ε

* Ξ0 « » 2 J 33

* ¿

g = j

• ovjí bC ÍN ' i-oo.o i ¡s

4 S • βe ε O rt £ J

«^

Z

β O ηi J E

84

PRODUCTION AND PRICE OF

COPPER

With only a f e w exceptions, similar relationships are found to exist in respect to the average changes per year during different periods of the expansion and contraction phases. T h e average rises per year were greater during the second half of the expansion phases than during the first h a l f , except in the case of the London price cycles in 1 8 7 9 - 1 8 9 6 , in which period the opposite is true. I n the case of the average declines per year during different periods of

the

contraction phases of the cycles the results are not so conclusive as the foregoing. During the period 1 8 6 0 - 1 9 3 0 the average decline per year during the first half of the contraction phases was greater in all of the markets than during the latter h a l f , but exceptions are found in all of the other periods. T h e London price cycles are the most consistent in this respect, the average decline per year during the first half of the contraction periods exceeding that during the latter half in all of the periods, except 1 8 7 9 - 1 8 9 6 . I n the New Y o r k price cycles, however, the average decline per year during the second half of the contraction periods exceeds that during the first half in 1 8 7 9 - 1 9 3 0 , 1 8 7 9 - 1 9 1 4 , and 1 8 7 9 - 1 8 9 6 ; while in the case of the Hamburg price cycles this relationship is found in the first two of the foregoing periods, and also in 1 8 9 7 - 1 9 1 4 . I n general, the greatest average change per year occurred during the second half of the expansion periods, and the smallest during the first half of the expansion periods. Our analysis of the average amplitudes of the price cycles leads to the conclusion that their various relationships are closely similar to those disclosed in our analysis of the average amplitudes of the copper production cycles. T h i s is especially true with reference to the expansion phases of the average cyclical patterns of prices and production. I n both production and prices, the average rise per year during the first half of the expansion periods was less, with a few exceptions, than during the second half. T h e cyclical behavior of production and prices was not as similar during the contraction phases of the cycles as during the expansion phases. I n most of the production series the change per year during the second half of the contraction phases exceeded that during the first half. We have seen that the opposite was generally true in the case of the London price cycles, while the change per year during the contraction phases of the New York and H a m b u r g price cycles is almost the same during the first half as during the second half.

CHARACTERISTICS

OF

CYCLES

R E L A T I O N OF A N N U A L TREND GROWTH TO

85

CYCLICAL

CHARACTERISTICS

Is there any apparent relationship between the average rate of growth per year of copper production and the average duration and average amplitude of the production cycles in the various countries? In T a b l e 25 the average annual rates of increase of copper production during 1879-1929 in the various countries are arranged in ascending order, and the relative standings of the various countries in respect to the average duration and the average amplitude of the copper production cycles are indicated in the various columns. Coefficients of rank correlation of the average annual rates of increase in production with the items in the various columns were computed in order to obtain a numerical measure of the relationships between the different rates of increase and the different average durations and average amplitudes of the copper production cycles. Inspection of the results reveals that no highly significant correlations were obtained, the highest being + 0 . 4 9 7 in the case of the average durations ; although in the other instances there is a slight tendency towards association. There is every reason to expect to find the more sharply inclined upward trends associated with larger cyclical amplitudes, whether total or per year, and longer cyclical durations, especially

when

studied from annual data. The grounds for this expectation have been clearly analyzed by Dr. Simon S. Kuznets. 2 "There is something very reasonable in the statement that wherever we observe rapid growth, we expect rather considerable fluctuations around the 'normal.' In an attempt to put one's finger on this reasonableness, in an attempt to specify this vague general knowledge of economic reality which gives rise to the expectation, one finds a basis in a conception of an identity of economic forces that make for the growth of industry with those that make for its

fluctuations.

industrial growth

is a manifestation of

men's economic

motivated

by desire

mainly

A process of activity,

for profit and the accumulation

of

wealth, whatever the final urges may be which underlie these obvious motives. Rapid growth may thus be conceived as a vigorous response by these human economic forces to a given situation. But with ? 2 Simon

S . K u z n e t s , Secular

Movements

H o u g h t o n Mifflin C o . . ¡030, C h . V I

in Production

anJ Prices,

Boston.

86

PRODUCTION

AND

PRICE

OF

COPPER

T a b l e 25

RELATIONSHIP IN COPPER

BETWEEN

THE

AVERAGE

PRODUCTION, AND T H E

AGE A M P L I T U D E

OF

SPECIFIC

IOUS C O U N T R I E S ,

(Ranked

OF

PRODUCTION

1879-1930,

EFFICIENTS OF RANK

INCREASE

BY

VAR-

CO-

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Average Amplitude fer Year (Rank)

1

Amplitude (Rank)

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PRODUCTION

AND P R I C E OF

COPPER

in the smelter production cycles in Great Britain. T h e movements of the other reference-cycle patterns indicate a f a i r l y close connection between the mine-production cycles in the surplus-producing countries and the refinery or smelter production cycles in the United States and G r e a t Britain, with the exception of that in Spain and Portugal, which shows that the cyclical movements in mine production were, f o r the most part, the reverse of those in smelter production in G r e a t Britain. With a few exceptions, the indices of conformity between the mineproduction cycles in the surplus-producing countries and the refinery or smelter-production cycles in the United States and Great B r i t a i n are positive, and are in keeping with the relationships shown in Charts 7, 8, and 9. Exceptions are found in the case of C a n a d a , Mexico, Chile, Spain and Portugal, and South A f r i c a , in each of which there are one or more negative or zero indices. T h e data that we have examined thus f a r show that the relationships between the cyclical movements in the mine production of copper in the surplus-producing countries and those in the refinery or smelter production in the United States and Great Britain, which have been the principal destinations of the copper exported from the former countries, have been f a i r l y close. T h i s fact, however, does not constitute conclusive evidence of a causal relationship, since both sets of cyclical movements may have been the result of a common set of causes. I t is necessary to show, not only that the cylical movements in the mine production of copper in the surplus-producing countries exporting chiefly to the United States were closely related to those in refinery production in the United States, but also that they were more closely related to the latter than to those in smelter-consuming countries. Furthermore, we should expect to find the cylical movements in the mine production of copper in countries exporting chiefly to the same principal consuming country

more

closely related to one another than to those in countries exporting chiefly to another country. We may thus analyze the time relationships between the cylical turning points in copper production in these countries for the purpose of determining:

(1)

whether the turning points in produc-

tion in the surplus-producing countries whose copper goes principally to G r e a t Britain are more closely related in time of occurrence to those in G r e a t Britain or to those in the United States, and vice

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PRODUCTION AND PRICE OF

COPPER

by our criteria as a concentration period. T h e same is true of the cyclical points in Japan's production. T h e foregoing array does not indicate any relationship between a country's importance in the consumption or production of copper and the percentage of its turning points occurring in concentration periods. Japan, an important consumer and producer, leads the countries in the array, and is followed by Chile, the world's second largest producer; but the United States, which leads in production and consumption, is in the

fifth

place and Canada is in the eleventh. R E L A T I O N S H I P S BETWEEN C Y C L I C A L M O V E M E N T S IN T H E PRODUCTION OF COPPER AND IN COPPER

MINE

PRICES

T h e preceding analyses have led to the conclusion that the characteristics of cycles in the mine production of copper are affected more by common causal factors of universal operation than by specific causal factors of localized effect. It is now our purpose to inquire into the identity of these common causal factors. Since the profit motive is the principal factor in determining production policies in the various countries which are included in this study, and since the opportunities for profit are reflected in price relationships, we should expect to find a fairly close relationship betyeen cyclical movements in copper production and in copper prices. T h i s relationship is shown in respect to the cycles in the mine production of copper in the various countries in Charts 7, 8 and 9. These charts show the average patterns of copper production in the various countries and the corresponding reference price cycle patterns. T h e values of the reference patterns represent the averages of the cyclical values of mine production at the turning points of the price cycles and at the midway points of expansion and contraction. T h e indices of conformity uf the copper-production cycles and the cycles of copper prices are shown in T a b l e 35. Observation of the figures in Charts 7, 8 and 9 reveals that the cyclical

movements

in copper

production

in the

United

States,

Mexico, Chile, Spain and Portugal, and the world, as shown by the average patterns of copper-production cycles, were fairly

closely

identified with those in copper prices, as represented by the reference cycle patterns. I n the case of the United States and the world the similarity of the movements was very close. I n Peru, and Japan the cylical expansion and contraction in production lagged slightly

FACTORS AFFECTING THE CHARACTERISTICS

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^ f) W f) OMΠI·)fJCJΌfOí*5OOΌ ++ I + | + + + +

uoiptijuo^

O ΟΌ ΌΌ ^ O^Ό PO Ό fO Ό ^ Όf^^ Ό ++I II++++

uo;suïd*3

I·) ^ ^ ΟΌη Ό ^ 0Ο«ΌΟ OΌfî ++1 +1++++

Iln.i

Ν O « Ν βΟ Ά O OOOO Q Ν+^+οο+ +«λ +»λ +O +

«

S

oooooooooo 0 1 vo VO 0 Ό ti VO Ό Ό ++++++1 + 1 +

¡»PO IInJ

υ 5 α. Χ w P. a. c u H J υ > υ S H

117

uoip«.ijuo3

+ ι ι+++++

+

uoisu«dx3

^ a e-

ti «Η

S3

c4 O Ζ •O &ti e "β ' 2.2 e ΰ rt «gJ¡I -βe V'Sa O. o£.> DÛ

i

118

P R O D U C T I O N A N D P R I C E OF

COPPER

behind that in prices. In Germany the contraction in production lagged behind that in prices. In Canada and South Africa the expansion in production lagged behind that in prices, but there was little relationship between the contraction phases of the production cycles in the latter country and those of the price cycles. In Belgian Congo the average cyclical values of production declined during the expansion phases of the price cycles and during the first half of the contraction phases, and increased during the latter half of the contraction phases. Table 35 shows that with only a few exceptions the indices of conformity of the copper-production cycles with the reference price cycles are positive, and on the whole, indicate a fairly close relationship between the cyclical movements in copper production and in copper prices. The conformity of cyclical movements in production and in copper prices in most of the countries was closer in 1903-1927 than in either 1879-1902 or 1879-1927. Peru and South Africa were the outstanding exceptions to this general relationship, the indices of conformity in these countries being higher for the period 1879-1902 than for either of the other periods. In the United States, Spain and Portugal, and the world, the indices of conformity of the contraction periods of the production and price cycles are smaller for the latter half of the period 1879-1927 than for either the first half or the entire period, and likewise in the case of the expansion periods in Germany. The index of conformity of the contraction phases of the production cycles in Germany with those of the reference-price cycles is slightly lower for the latter half of the period 1879-1927 than for the first half, but it is higher than that for the entire period. With these few exceptions, the indices indicate that apparently the relationship between cyclical movements in copper production in most of the countries and in copper prices in the principal copper markets is becoming closer. This conclusion is in keeping with what would be logically expected, as the progress of mergers and integration in the copper industry brings under common control producing and marketing units and, in some instances, fabricating plants. The close similarity between the cyclical movements in copper production and in copper prices leads to the conclusion that the former are chiefly indirect responses to the factors that cause the latter. The fact that copper is sold in a world market that is characterized by a fairly high degree of competition among buyers and sellers,

FACTORS AFFECTING THE CHARACTERISTICS

119

and that trade relationships between copper importers and copper exporters are subject to shifting whenever the economic advantage of any of the parties to the transactions may be served thereby, means that the effects of the factors affecting the price of copper in any part of the world are transmitted to production areas throughout the world and are reflected in changes in copper production. Production in different producing areas differs in the quickness of response to changes in price, the sensitiveness of production in this respect being affected by differences in the costs of production, and in the degrees of integration and centralized control of the industry; by governmental subsidy of copper production, as in Germany; by governmental ownership interests in the mines, smelters, and refineries, as in Belgian C o n g o ; by nearness to the principal markets, and other factors affecting transportation costs ; by import and export duties ; and by other factors. The effects of all of these factors are inextricably intermingled and cannot be isolated for separate measurement and study. F A C T O R S IN" E X P L A I N I N G D I S C R E P A N C I E S B E T W E E N C Y C L E S IN M I N E PRODUCTION

OF C O P P E R

AND C Y C L E S

IN C O P P E R

Observation of the various tables in Chapter I I I

PRICES

and in this

chapter reveals that there are discrepancies between the cycles in copper production in the various countries and those in copper prices in the three principal markets in respect to average duration, average amplitude, and timing, although the similarities are close in several instances. T h e discrepancies arise out of the lags and leads that occur

in

a dynamic

economic

order whenever

related

economic

phenomena change at different rates. Many factors are involved in accounting for the imperfect adjustment between the cyclical movements in copper production and in prices. D u r i n g a period of rising copper prices producers are encouraged to expand production, but the output of refined copper cannot be materially increased immediately. There are several steps in the production process, and the trip from ore in the mine to ingots or bars at the refinery usually requires from two to three months. Even if the mine output of copper ore could be increased immediately in response to a rise in price, there would be ordinarily a lag of several weeks between the price rise and the increase in the production of refined copper which it stimulated.

120

PRODUCTION AND PRICE OF COPPER

The mine production of copper, however, cannot be increased immediately. Even after the management has reached a decision that the rise in copper prices is of such a character to justify an expansion of output, it is faced with the necessity of putting the plant, equipment, and labor force in shape to give effect to the decision. During the preceding period of cyclical contraction in copper prices and production the labor force has been reduced and considerable capital equipment taken out of use. Some mines have probably been closed down or kept open with only a maintenance crew, while maintenance of some of the plant and equipment has probably been neglected. The assembling of a larger labor force and putting the plant in order for a program of increasing production takes time, and the process of stepping up production proceeds slowly at first. Increases in production are probably initiated in the lowest-cost mines, with the producers with successively higher costs falling in line as the price of copper continues to rise. This description is supported by the shape of the average patterns of the copper production cycles in most of the countries which, with only a few exceptions, show that the average amplitudes were greater during the second half of the expansion periods than during the first half. The average patterns of the cycles in copper production and in copper prices are similar in this respect. The factors which retard the decline from the peaks of the production cycles have been discussed in explaining the changing average duration of the production cycles. While recognizing the possible effects of the foregoing factors in accounting for the discrepancies between the cycles in copper production and in copper prices, the lack of monthly production data during the greater part of the period covered prevents a more exact measurement and statement of the relationships. There are other factors involved in this connection whose influence is more clearly apparent. One of these is the rapidly increasing production of secondary copper which, as was pointed out in Chapter I, is a situation confronting the copper industry which in magnitude, hardly has a counterpart in any other industry. Some idea of the effect of secondary copper production in accounting for discrepancies between the characteristics of the cycles in copper production and in copper prices may be obtained by observing the relationships between changes in the production of secondary copper, on one hand, and in

FACTORS AFFECTING THE CHARACTERISTICS

121

Table 36 CHANGES IN T H E PRICE, PRODUCTION, STOCKS AND CONSUMPTION

OF COPPER, 1906-1929 I β* ! ^ *9 Vi O 1I 9 t>

•su, • :β $* Y tar

TS ÎS

55

1906. 1907. 1908. 1909

+ +

1910. 1911 1912 1913 1914 •9"S 1916. 1917 1918 1919

+

+

±

+ +•

Τ + .—

—

'

1920 1921 19 22 1923 1924 1925 . 1926 1927 1928 1929

τ i

-

+

—

•

+ —

•+— .— + +

+ + + +

+

—

+

+

hκ * «« I 'oíü 55 ν V-ο. Κ «

+ + — + +

+ — +

+ + + + + + -— +

+

tτ + + — + + +

.— +

+ + + + + 4+ +

+

—

+

+ + + — -t + +

+

— —

+

— -—

+

+ +

+

—

+ +

+ +

+

± + + + + 1

. + + +

—

+

+ í +

+ + 1

+ + + + + + +

• No changre.

primary production, consumption, stocks, and prices of copper, on the other, as shown in Table 36. Summarizing the results of Table 36, we see that significant, positive relationships exist between changes in the production of secondary copper in the United States and in: ι. the average annual price of electrolytic copper in New York;

122

PRODUCTION A N D P R I C E OF COPPER

2. the total deliveries of copper into consumption in the United States; 3. the ratio of secondary copper production to the total deliveries into consumption; 4. the ratio of secondary copper production to copper stocks in the possession of producers December 31 ; 5. the production of primary copper; 6. the production of primary copper and the price of copper considered together. Apparently no definite relationships exist between changes in the production of secondary copper and in: ι. the visible stocks of copper in the possession of producers December 31 ; 2. the ratio of copper stocks to deliveries into consumption; or between changes in the ratio of secondary copper production to consumption and in the average annual price of copper in New York. The relationship between secondary copper production and the price of copper indicates that the former responds more readily to increases in price than to decreases. The relationships indicated in items 2, 3, 4, 5, and 6 of the first group are significant in indicating some of the difficulties confronting the producers of primary copper in attempting to control the price of copper. The larger the ratios between secondary copper production and the total deliveries of copper into consumption, and to stocks of copper in the possession of the producers at the end of the year, the smaller will be the degree of control which the producers of primary copper alone can exercise over price, especially to the extent that a considerable proportion of the total secondary copper is recovered by other than the primary refineries and smelters. The relationship between the price and consumption of copper and the production of secondary copper can be shown by a further comparison. In ten years in which price increased, production increased in all ten years, consumption in nine years, and both production and consumption in nine years. In twelve years in which price decreased, production decreased in seven years, consumption in seven years, and both production and consumption in five years. These facts substantiate further the hypothesis that the production

FACTORS A F F E C T I N G T H E C H A R A C T E R I S T I C S

123

of secondary copper responds more readily to increases in price than to decreases, and, together with the positive relationships between the changes in the production of secondary copper and in the ratio of secondary copper production to consumption, they lead to the conclusion that secondary copper production serves as a buffer in reducing the amplitude of the cyclical fluctuations in the production of primary copper. This conclusion is substantiated by the close relationship which is observed between changes in the production of secondary copper and in the production of primary copper. The fact that the former increases and decreases generally with the latter, and apparently responds with equal facility to the same price influences, indicates that the total amplitude and the amplitude per year of the cycles in primary production have been less than they would have been if no copper had been recovered from previous uses, or if the relationships between the two factors had been the opposite of those shown by the table. Apparently the production of secondary copper is one of the most important factors in accounting for the smaller amplitude of copper-production cycles as compared with that of cycles in copper prices. The second important discrepancy to be explained is that between the change in the average duration of production cycles and that of cycles in copper prices. It was pointed out in Chapter I I I that while the average duration of cycles in copper prices and in copper consumption is apparently decreasing, that of cycles in copper production in most of the important copper-producing countries is increasing. Table 37 shows that increases and decreases in copper consumption and copper stocks occurred more frequently during 1900-1930 than increases and decreases in primary and secondary production and in the price of copper. This fact suggests that stocks serve as a buffer between changes in copper production and in consumption. Copper stocks increase or decrease in accordance with changes between production and consumption. When production increases more rapidly than consumption, or increases while consumption decreases, stocks increase; when the reverse occurs, stocks decrease. Production, consumption, and stocks are three variables whose changing relationships are reflected in changes in copper prices. With stocks serving as a buffer between the production of copper and changes in consumption and in price, production is made less responsive to changes in price than it would be otherwise. The large

124

PRODUCTION AND PRICE OF COPPER

Table 3 7 YEARS IN W H I C H CYCLICAL T U R N I N G POINTS OCCURRED IN T H E PRICE, PRODUCTION, CONSUMPTION AND STOCKS OF COPPER IN T H E UNITED STATES, 1 9 O O - 1 9 3 O 1

1 (Nm

Prict York)

Primary Production

Stocks Dec.

31

Y tar,

Hieh Low 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 • 9>* Ι9·3 I9U 1915 1916 • 917 1918 • 919 1920 1921 1922 • 923 1924 1925 1926 1927 1928 1929 Total

L H

Hiffhj Low High Low H ; 1L 1 H 1' , L

H

Ι1

H

I.

H

1, H

H H

!

H

:

1 I H ! Ι1

L

I.

1L 1

L

I

L

H

,1

1 HI 5 14

I. I.

H H H H

L L I. L L

I

Hiffh; Low HiffhJ Low H H H H H H H

!1

L L L L L L L

H H

H

Secondary Production

L

1 1 H: i '· 1 ! H! I ! 1. ι H 1 1 IH: 1 H 1

,

I, L

H

I,

1 ;

1 1 1 8 10 10 9 6 6 ! s 1 1 Letters represent hijh and low points of actual production, rather than of the percentages of the trend. 2 SmeIter production, 1900-1905; refinery production, 1906-1930. H 6

H

H

financial resources of the huge integrated copper-producing organizations probably make it possible for them to carry larger stocks of copper in the aggregate than could be carried if the various producing units were under separate control. This makes it possible for them to maintain or increase production for a longer period before being forced by adverse conditions to curtail production than would be possible otherwise, and is probably an important factor in explaining not only the opposite changes in the average duration of the pro-

FACTORS A F F E C T I N G T H E C H A R A C T E R I S T I C S

125

duction and price cycles, respectively, but also the increasing average duration of the expansion period of the production cycles both in years and as a percentage of the average duration of the f u l l cycles. It should not be assumed from the foregoing discussion that the function of copper stocks in serving as a buffer between changes in production and in consumption involves the accumulation of excessively large stocks. Since the production period for copper is two to three months long, stocks equivalent to two to three months average consumption are looked upon as "normal" in the industry. In Table 38 the stocks of copper in the possession of copper producers in the United States and in official warehouses in the United Kingdom as of December 31 are compared with three months average consumption of copper in the United States and in the world in various years. Data on world consumption prior to the World War are not available, so that part of the comparison begins with 1920, while data relating to stocks and consumption in the United States begin with 1900. In only ten of the thirty years were copper stocks at the end of the year in the United States above normal, as indicated by a percentage of stocks to three months' average consumption in excess of 100 per cent, and in some of those instances the excess was slight. The largest excesses occurred during the immediate post-war period when the industry was confronted with the return to the market of the stocks of copper accumulated by the allied governments for war purposes, a situation which was aggravated by the slump in business in 1 9 2 1 . In twelve instances the stocks on hand in the United States at the end of the year were equivalent to less than two months' average consumption, sometimes falling so low that the market was considered almost bare, a situation as disturbing to copper manufacturers as excessive stocks are to copper producers. On the whole, the ratio of stocks to consumption during the period covered, and especially since 1 9 1 0 , indicates what might be considered a satisfactory adjustment of production to consumption. The great increase in the ratio of copper stocks to consumption in 1 9 2 1 , and in the period of declining business activity that began in 1929 indicates that the degree of control exercised over copper production is as yet inadequate to maintain the adjustment in a period of rapidly decreasing consumption, despite the operations of the international producers' cartel, Copper Exporters, Inc. I t is impossible, of course,

126

PRODUCTION AND PRICE OF COPPER Table 3 8

COMPARISON O F S T O C K S O F C O P P E R AS O F D E C E M B E R 3 I S T W I T H M O N T H S ' AVERAGE C O N S U M P T I O N

IN T H E UNITED

THREE

STATES

AND T H E WORLD

*

.a h

^

(.)

"•Ϊ-β . AS5S

Percentage of U. S. Stockt to U. S. Consumption

(Production and consumption data in short tons)

(a)

*

•s

-

0

1 j

ÎU- 8909

45.608 141,007 77.833 87.537 59,608 S9.ua »3.349 6a,873 60,938 70,743

44,611 47,845 68,961 65,804 6o,a74 72,626 84,680 60,97a 59.995 86,071

102,2 294-7 113-9 133.0 98.9 81.4 37-5 103.1 101.6 82.2

1910 1911 1912 >9'3 1914 1915 1916 1917 1918 1919

61,40a 44.186 5a.749 45.193 86,8ao 41.315 64,028 57,000 90,000 315.500

9*.55* 85.3:9 96,997 101,534 87.703 •43,077 184,860 «74.353 207,709 142,470

67.1 51.8 54.4 44-5 99.0 29.0 34-6 32.7 43-3 221.5

igao 1931 19 22 1923 1924 «925 1926 1927 1938 >9*9

339.500 229,500 108,000 132,000 131,500 6a,000 73,000 85.500 57,000 153,000

166,878 81,842 138,012 182,682 Ι89,Ϊ45 203,374 226,054 206.296 245,868 279.847

197.4 280.4 78.3 72.3 64.2 30.5 33.3 33.2 54-7

13,044 18,654 39.994 34,754 43.039 63,773 38,793 12,221 7,627 7,284

1930

307,500

202,189

153.1

8,596

41.4

« •S *

332,76o

S O U R C E S A N D M E A N I N G O F DATA ( 1 ) U . S. Geological Survey a n d Bureau of Mines, Mineral Resources, various volumes. Includes refined copper in possession of producers, December 31st ; excludes blister copper a n d m a t e r i a l in process of refining. (2) 1900-1918, U . S. Geological Survey, Mineral Resources, various volumes; 1919-1930, American Bureau of M e t a l Statistics, Yearbook, 1931, p . 36. D a t a represent deliveries to f a b r i c a t o r s . ( 3 ) London M e t a l E x c h a n g e , a s reported by American M e t a l M a r k e t in Metal Statistics, 193*. P. 259. D a t a represent copper in refined a n d o t h e r f o r m s in official warehouses, December 31st. ( 4 ) Includes stocks in U n i t e d States a n d U n i t e d K i n g d o m only. ( 5 ) American Bureau of M e t a l Statistics, Yearbook, 1931, p. 36. D a t a represent deliveries t o f a b r i c a t o r s .

FACTORS AFFECTING THE CHARACTERISTICS

127

to measure the extent to which the Cartel's activities have diminished the extent of the maladjustment of production and consumption as compared with what the situation would have been otherwise, but it is probably considerable. FACTORS A F F E C T I N G C Y C L I C A L MOVEMENTS IN COPPER

PRICES

Since there is apparently a close relationship between

cyclical

movements in copper production and in copper prices, the next step in our inquiry is to ascertain what are the principal factors affecting cyclical movements in copper prices. T h e price of copper is determined by the relationship between the supply of and the demand for copper. The fact that during various periods of the past half century there have been varying degrees of centralized control over various percentages of the world's copper-production capacity does not alter this fundamental proposition. A monopolist influences price chiefly through regulation of supply, but his ability to control the demand for his product is no greater than that of a producer under competitive conditions. This fact in no way contradicts the conclusions in Chapter I I I , that integration and centralized control in the copper industry have been factors affecting the characteristics of copper-production cycles. As we have seen, these factors have been accompanied by increasing duration in the production cycles in most of the countries included in this study, and by a decrease in the amplitude of the cyclical movements in some of them. T h e cyclical movements in production have not been eliminated, however, which indicates that there are some factors affecting the price of copper which are beyond the control of the copper producers. Since copper is primarily an industrial raw material, the greater part of which is used in making capital or producers' goods rather than consumers' goods, we should expect the demand for copper to vary with cyclical movements in business activity which affect the price at which copper can be sold. What has been the relationship, then, between cyclical movements in copper prices and in business activity? T h e years in which turning points occurred in copper-price cycles in New Y o r k , London, and Hamburg, and in business cycles in the United States, England, and Germany, are shown in Table 39. Observation of the data in this table reveals a close correspondence between the years in which cyclical turning points have occurred in copper-price cycles and in business cycles. I t is significant that the

128

PRODUCTION AND P R I C E OF COPPER

Table 39 LONDON, IN

POINTS IN COPPER

AND HAMBURG,

THE UNITED

STATES,

ENGLAND,

1860-1930 1

Cyclical Turnint

1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930

è s ζ

' L '

Hamburg

I J

Businas

M London

London

New York

M

CONDITIONS

AND GERMANY,

Points In

Copper Prices in Years

PRICES IN N E W YORK,

AND IN BUSINESS

13 *Λ OB

Conditions in

1 1

United sut«

CYCLICAL T U R N I N G

J

H

H

L Η Η H

L

Η

Η

H

Η

H

' L ' Η

' L' Η

Η

L '

H

Η

L

L '

' L'

Η

Η

' L

H L

Η

Η

H

' L ' Η

Η

Η

Η

H

' L '

H H

' L Η

Η

Η

Η

Η

Η

H

' L '

H

' L H

H

>» α

Ycari

j 1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1002 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 192a 19V)

ι Cyclical turning polliti In busine« condition· are thoee Indicated by the standard Reference Data far Butinai Οικία, annual aerto, oí the National Bureau of Economic Research, New York.

FACTORS AFFECTING T H E CHARACTERISTICS

129

correspondence between the two sets of data is closer within recent years than during the earlier years of the period covered. This probably is due in part to the fact that business indices and annals of business conditions make it possible to locate more definitely the dates of turning points in business cycles within recent years than is possible for business cycles of several decades ago. I t is probable also that the same situation exists in respect to copper prices, since the work of statistics gathering agencies has been greatly improved in respect to scope and accuracy during the past three decades. Factors other than cyclical movements in business conditions have been involved, of course, in determining the cyclical movements in copper prices, although the available data indicate that they have been of secondary importance. The operations of the Secretan Syndicate, for instance, resulted in pushing the price of copper to a cyclical peak in 1888, which was two years ahead of the cyclical crest in business conditions in the three countries. The operations of the Amalgamated Copper Company during the first decade of the twentieth century were doubtless the principal factor in preventing a decline in copper prices in 1904 and 1905, when cyclical low points in business conditions occurred in the United States, England, and Germany. All of the outstanding attempts to maintain copper prices in the face of decreasing sales, however, have failed, chiefly because of the financial difficulties involved in carrying the stocks of copper that accumulated rapidly. Production control that makes possible curtailing production when the demand for copper decreases is the only remedy for such a situation, and such a curtailment of production would itself appear as a cyclical contraction. We are led to the conclusion, therefore, that while the characteristics of specific cycles in the mine production of copper in the various countries are affected by many factors, they are primarily the result of causal factors of universal effect rather than of localized effect ; and that the factors of universal causation are cyclical movements in business activity in the principal copper-consuming countries whose effects are transmitted to copper production through copper prices, which reflect the changes in the relationship between the demand for and the supply of copper.

ν SUMMARY OF

CONCLUSIONS

IN THE FOREGOING analyses attention has been centered upon testing the hypotheses that were stated in Chapter I. The amount of historical material included has been kept to the minimum requisite to an intelligent interpretation of the problems and the results. We are now in a position to summarize the conclusions to which our analyses lead. ι. With only a few exceptions, the secular trends in the mine production of copper in the various countries included in this study exhibit a tendency of copper production to grow at declining rates. The direction of the lines of secular trend is apparently determined primarily by the discovery and development of new ore bodies and the gradual exhaustion of old deposits. It has also been influenced by improvements in mining and metallurgical processes that have lowered costs of production and have made possible the profitable working of low-grade ore, and probably by the secular trend of copper prices, but the influence of these factors has been less important apparently than that of the factors first mentioned, and their relative importance cannot be separately measured. 2. The secular trends of copper prices in the three principal markets have followed similar patterns, those in New York and Hamburg having been affected at different periods by fiat money inflation, and have been closely associated in direction of movement with the general levels of wholesale prices in the respective countries. Apparently there has been nothing in the financial or technical control of the copper industry to offset the operation of the factors that determine the long-run changes in the value of gold. 3. The relationship of the rates of change in the secular movement of copper prices to those in the secular movements in copper produc130

SUMMARY OF CONCLUSIONS

131

tion is not apparent when we consider the secular movement in the production of any single country, but it becomes apparent when we consider the deviations of the rates of change in world production from the ordinates of the straight line trend fitted to the rates by the method of semi-averages. The data indicate that although the secular trend of world copper production has been continually upward throughout the period covered by this study, the rate of growth in production has been retarded by a declining trend of copper prices and accelerated by a rising price trend. 4. The cycles in copper production in the various countries differed widely in respect to average duration and average amplitude, as did also the average patterns of the cyclical movements. This indicates the influence of factors of localized effect in determining the characteristics of production cycles. The variety of such factors is great, although only a few have been mentioned in the preceding pages, and the relative importance of their influence varies from time to time within the same country and as between different countries. The cyclical movements in copper production in any country are the net resultants of a varying number of interacting factors, some of which are working together in the same direction while some of them are exerting opposing influences. The discovery and explanation of all the various factors that are possibly involved in accounting for the succession of cyclical swings is a matter of voluminous detail, beyond the scope of this study, and even after they are discovered they are susceptible of qualitative evaluation only since there is no known means of measuring quantitatively the relative importance of each of them separately. Our interest in this connection is centered upon recognizing the common causal factors which have been indicated. 5. The cylical movements in copper prices in New York, London, and Hamburg, show a high degree of similarity in respect to duration, amplitude, and average patterns. This is in keeping with what would be expected in view of the fact that copper is sold in a world market in which there are comparatively few and unimportant restrictions upon the movement of copper from one place to another in response to price differentials. The close similarity between the characteristics, average patterns, and timing of the cycles in copper

132

PRODUCTION AND PRICE OF COPPER

prices in the three principal markets indicates that they are determined more by common causal factors of universal effect than by factors of localized effect. This conclusion is further substantiated by the fact that the changes that have occurred in the cyclical characteristics have been similar in the three series. Cyclical movements in business activity are apparently the principal common causal factor. 6. The cycles in copper production in most of the countries have shown an increasing duration. Among the probable factors involved in accounting for this condition are: ( i ) an increase in the number of localities which contribute to the total production of a given copper-producing region, thereby lessening the effects of accidental and random factors in causing "cyclical" fluctuations; ( 2 ) the progress of integration and concentration of financial control in the copper industry; ( 3 ) the increasing production of secondary copper; and ( 4 ) the use of copper stocks as a buffer between changes in consumption and in production. 7. The cycles in copper production in most countries have shown a tendency towards decreasing amplitude, although there are a few more exceptions to this general tendency than in the case of the increasing average duration. The tendency is more marked in the case of the old producing countries which obtain their total copper output from several important localities, as in the United States, Canada, and Japan, than in countries, old or new, which obtain the greater part of their output from a single locality, as in Germany, Chile, Spain and Portugal, and South Africe. This suggests that the principal reasons for decreasing amplitude of cycles in copper production are : ( 1 ) increasing number and importance of the localities contributing to the total production of a given region; (2). progress in integration and concentration of control in the copper industry which has been associated with increasing production, both of which factors appear to have a stabilizing influence in lessening the cyclical movements in production; and ( 3 ) the increasing production of secondary copper which, by changing with changes in primary production, apparently is a factor in decreasing the amplitude of the cyclical movements in the latter. 8. The cycles in copper prices in the three principal markets have shown a decreasing duration, which has been associated with a decreasing duration of cycles in copper consumption. These changes are apparently due chiefly to the decreasing duration of cycles in

S U M M A R Y OF

CONCLUSIONS

133

business conditions in the United States, England, and Germany, and possibly in other important copper-consuming countries also; but the fact that the average duration of the cycles in copper prices during the various periods studied has been more closely related to that of the cycles in business conditions in England than to that of the business cycles in either of the other two countries named indicates, first, the predominant importance among copper markets of the London Metal Exchange, which is the world's principal free speculative copper market, and, secondly, that the factors affecting the cyclical movements in copper prices are more nearly universal in their operation than are those affecting cyclical movements in general business conditions in different countries. 9. The amplitude of the production cycles has been somewhat a f fected by variations in the duration, as indicated by the negative coefficients of rank correlation between average amplitude per year and average duration. This indicates that there is somewhat of a "top" and a "bottom" to cyclical swings, and that the rise and decline are likely to be just as sharp in a cycle of short duration as in a longer one. 10. Cycles in the mine production of copper in the surplus-producing countries do not appear to be more closely associated with cycles in the smelter or refinery production of copper in the consuming countries which constitute the principal destinations of their copper exports, respectively, than to production cycles in other countries, which is also in keeping with our hypothesis of the primary importance of determining factors of universal causality. 1 1 . Although the cycles in copper production in the various countries differ considerably in respect to their characteristics, they are apparently determined more by common causal factors of universal effect than by factors of localized effect. This is indicated by the high degree of conformity of the average cyclical movements in production in most of the countries with a common set of reference dates of copper-prices cycles, and also by the fact that they show similar changes in average duration and average amplitude. The common causal factors seem to be summarized in the cyclical movements in copper prices and in the factors which we have previously explained as accounting for the changes in duration and amplitude. 1 2 . I n most of the copper-producing countries the relative duration of expansion and construction in the specific cycles shifts in

P R O D U C T I O N A N D PRICE OF

COPPER

favor of expansion during the expansion phases of the cycles in the trends of copper production, and the reverse occurs during the contraction phases. The only exceptions to this general tendency occurred in the case of production in the United States and in the world as a whole. The same tendency is observable in the case of the specific cycles in copper prices in New York and London, the two leading copper markets, while the reverse occurs in the case of the Hamburg price cycles. The high degree of uniformity in the action of the production cycles in the different countries and of the price cycles in the principal markets is further vertification of the hypothesis that the specific cycles in copper production and prices are determined more by common causal factors of universal effect than by causal factors of localized effect. Our conclusions indicate the verification, wholly or partially, of nine of the ten hypotheses which we set out to test. Only in the case of hypothesis number 10, as stated in Chapter I, do the available data lead to a conclusion which is the opposite of that implied in the hypothesis. SUGGESTIONS FOR F U R T H E R

STUDY

The necessity of limiting the field of investigation and the lack of certain sorts of data at the present time that might become available in the future have resulted in several related topics of interest for future study having been either left out of the present study altogether or merely touched on. The most important of these may be briefly stated. ι. The study of the relationships between cyclical movements in copper production and prices and those in the production and prices of other minerals was suggested in Chapter I as a means to a broader understanding of the cyclical movements in business activity by throwing light on the timing, duration, amplitudes, and rates of change of the cyclical movements in the different production and price series. Such a study might well be based on the conclusions developed in a series of studies similar to this, in which case it must await the making of the studies ; or a beginning might be made by setting out to analyze a limited number of specific aspects of the cyclical movements in a number of different production and price series.

S U M M A R Y OF

CONCLUSIONS

135

2. No attempt has been made in this study to discover and measure the leads and lags in the cyclical movements in copper production and copper prices because continuous monthly production data are not available over a sufficiently long period of time to serve as a basis for definite conclusions. Such data have been collected and published during three different periods of a few years each during the period covered by this study, but the gaps in the series made by the intervening years between the periods when the data were not gathered destroy in a large measure the usefulness for our purpose of the monthly data that are available. This is an interesting subject for future study when the necessary monthly data are available. 3. Monthly data on copper prices in the three principal markets are available over a period of sixty years or longer, and may be made the basis of a study to ascertain the effects on copper prices of changes in the organization and financial control of the copper industry. A similar study might be made of the effects of these factors on copper production when monthly production data have been collected over a longer period of time than at present. Such studies might be made for the purpose of testing the hypothesis that integration and concentration of financial control in the industry have a greater effect on the short-run movements of production and prices than on the cyclical and secular movements. 4. The effects of the increasing secondary production of copper on the secular and cyclical movements of primary production and tff copper prices is an interesting subject for investigation in the future when the necessary data are available. Reliable data on the recovery of secondary copper over any considerable period of time are available only for the United States, but the nature of the subject requires that similar data be obtained for the other principal consuming countries. Even in the case of the United States the secondary copper production series extends back only to about 1906. The data for the earlier years of the series are probably less reliable than those for the later years, and the period covered was so broken up by the World War and the post-war period of economic and political readjustments as to vitiate for the purpose of the contemplated study the greater part of the data.

APPENDIX T A B L E S OF S E R I E S ON C O P P E R PRODUCTION A N D C O P P E R

PRICES

THE STATISTICAL data presented under the various column headings in the following tables are as follows: I. The original data II. The ordinates of the line of primary trend I I I . The original data expressed as percentages of the ordinates of the line of primary trend Sources of production data: To 1929, United States Geological Survey and Bureau of Mines, Mineral Resources of the United States, Part I, successive volumes; 1930, American Bureau of Metal Statistics, Yearbook, 1930, p. 38. All production data expressed in tons of 2,000 pounds. Sources of data on prices given in connection with tables. The following tables are illustrated by Charts 1 to 5 in Chapter I I .

137

138

PRODUCTION AND PRICE OF COPPER

Table ι COPPER PRODUCTION, SMELTER, DOMESTIC ORE, UNITED STATES, 1860-1930

r«r

/ "

-

Y—r

/

//

///

i860 1861 186a 196} 1864 186s • 866 1867 1868 1869

8,064 8,400 io,s8o 9,5« 8,960 9.520 9.968 11,200 11,99* 14,000

8.000 8,500 9.000 9.5OO ΙΟ,ΟΟΟ !0»500 t Ι,ΟΟΟ 11,500 12,000 ia.750

100.8 98.8 117.6 100.2 89.6 90.7 90.6 97.4 108,3 109.8

1900 1901 1902 1903 1904 1905 1906 1907 1908 1909

303,059 301,036 329.754 349,022 406,269 444,39' 458.903 434.498 471,285 546,476

288,000 312,000 338,000 364,000 390,000 416,000 442,000 468,000 494,000 520,000

105.2 96.5 97.6 95-9 104.2 106.8 103.8 92.8 95-4 105.1

1870 1871 1871 1873 1874 • 875 1876 1877 1878 1879

14,113 14,560 14,000 17,360 19,600 20,160 21,280 »3,5*0 24,080 25,760

13,500 14.300 15,150 16,iso i7.»50 18,650 20,S00 32,500 34,600 26,800

104.5 101.8 92.4 107.5 114.3 108.1 103.8 104.5 97-9 96.1

1910 1911 1912 1913 1914 1915 1916 1917 1918 1919

540,080 548,616 621,634 612,242 575.069 694,00s 963.925 943,060 954·267 643.210

546,000 570,000 591,000 609,000 627,000 645,0.00 663,000 681,000 699,000 717,000

98.9 96.2 105.2 I00.5 91 -7 107.6 145-4 138.5 136.5 89.7

1880 1881 1881 1883 1884 1885 1886 1887 1888 1889

30,240 35.840 45.323 57,763 72,473 82,938 78,882 90.73» 113,181 113,359

39.500 33,000 40,000 53.SOO 65,000 77,500 90,000 102,500 115,000 127,500

102.5 108.6 113.3 110.0 111.5 107.0 87.6 88.5 98·4 88.9

1920 1921 1922 1923 1924 1925 1926 1927 1928 1929

604,S31 252.793 47S.143 7'7.500 817,125 837.435 869,811 842.021 912,950 1,001,432

735,000 7S3.000 771,000 789.000 807,000 825,000 843,000 861,000 879,000 897,000

82.2 33-6 61.6 90.9 101.3 101.5 103.3 97-8 103.9 in.6

1890 1891 1891 1893 1894 1895 1896 1897 1898 1899

129,882 142,061 172,499 164,677 177,094 190,307 230,031 247,039 263,257 284,334

140,000 153,500 165,000 177*500 190,000 302,500 216,000 234,000 252,000 270,000

92.8 93-2 104-5 92.8 93·* 94-0 106.5 105.6 104.5 10«. 3

1930

710,69s

915,000

771

APPENDIX

1 3 9

Table 2 COPPER

Ytmr

/

PRODUCTION,

//

MINE,

III

1879

10,086

• 5.000

67.3

1880 1881 1882 1883 1884 188s 1886 1887 1888 1889

13,096 14,^71 16,898 18,146 16.556 17,080 16,301 16,660 17,058

I5.J45 15.690 16,035 • 6,380 16,735 • 7,070

78.8 91.0 105.4 110.8 99.0 100.1 93.0 93-8 94-3 105.4

1890 1891 1892

19.740 • 8.088 19.370 18.088 19,»64 18,543 33,473 33,563

19,48s 1 9 ,8 3 0 30,175 30,530 30,865 31,310

33,494 36,375

31,555 31,900

33,859 34,336 34.198 33.750 33.570 34,819 33,781

33,345 33,590 33,935 33,380 33,635 33.970 34.315 34,660 35,005 3S.350

1893 1804 1895 1896 1897 1898 1899 1900 1901 190a 1903 1904 1905 1906 1907 1908 1909

19*439

33,949 33,597 35,133

17.415 17.760 18,105 • 8.4SO 18,785 19,140

103.8 107.7 IOS-5 103.0 99.8 103-5 93-7 93·« 90.4 99··

/

II

///

1910 1911 1913

37.668 34.693 38,319 54,454 50,937 38,581 56,59" 49,6o4 38,581 • 7.484

35.675 3S.9Í0 36,335 36,500 36,750 37,000 37.335

• 07.8 95-3 107.6 205.S

1930 1931 1933 1933 1934 ;

1

1 8 7 9 - I 9 3 O

Ys.r

•913 1914 • 9IS 1916 1917 1918 1919

105.0 94-S 99-4 91.3 95*S 90.4 107.7 106.4 •04.4 130.0

GERMANY,

1935 1926 1937 1938 1939 1930

37.450 37,67s 27,900

190.4 143.9 207.9 180.7 139-4 62.7

16,508 I7.10I

38,12s 38,350

19.547 30,350 35.391 36,947 30,519 30,061

38,575

38,895 31.967

39.935 30,150

58.7 60.3 68.4 70.7 87.1 93.1 103.5 101.2 96.6 106.0

39,763

30,375

98.0

38.800 29,02s 29,250 39.475 39,700

140

PRODUCTION AND PRICE OF COPPER

Table 3 C O P P E R PRODUCTION, S M E L T E R , DOMESTIC O R E , J A P A N ,

Y tar

I

II

HI

1879

4,368

3,300

132.4

1880 1881 1882 1883 1884 1885 1886 1887 1888 1889

4,368 4,368 5.376 8,512 I 1,200 11,612 10,862 12,293 14,620 18,060

4,550 5,800 7,050 8,300 9,550 10,800 12,050 13,300

96.0 75-3 76.3 102.6 117.3 107.S 90.1

14,5 ^0 15,800

100.5 114.3

1890 1891 1892

20,129 20,720 21,280 20,l6o 22,456 20,642 23,520 25,760 28,196 30,868

17,050 18,300 19,550 20,800 22,050 23,300 24,550 25,800 27.050 28,300

118.1 11..2 I08.8 96.9 101.8 88.6 95-8 99-8 104.2 109.1

1900 1901 1902 1903 1904

31.497 30,772 33,348 ^5,123 39,032 40,219

106.6

1906 1907 1908 1909

47,869 54,8o7 44,812

29.550 30,800 32,050 33.750 36,200 40,200 44,400 48,600 52,800 57,000

1893 1894 1895 1896 1897 1898

1899

1905

SO.53I

84.9 88.7

/

1910 1911 1912

54,370 58.866 68,809 73,305 77.672 83,132 110,932 119,091

1913 1914 1915 1916 1917 1918

92.4

99-9 104.0 74-4 107.8 100.0 107.8 112.8

Y tar

1919 1920 1921 1922

!

HI

61,200 65,000 67,800 69,800 7I.50O 73,000 74.500 76,000 77.2SO 78,250

88.8 90.6 IOI.S 105.0 108.6 113.9 148.9 156.7 128.9 III.7

1929

77,31S 89,574

79,250 80,250 81,250 82,250 83.250 84,000 84,700 85,300 85,800 86,200

90.9 89.1 90.1 103.9

1930

87,921

86,500

101.6

1923 1924

1 1

99,584 87.444

1879-1930

1925 1926 1927 1928

75,491 60,946 60,872 66,197 69,236 74,515 77,007 76,014

95.3 75.9 74-9 80.5 83.2 88.7

APPENDIX

1 4 1

Table 4 C O P P E R PRODUCTION, MINE, CANADA,

Year

/

11

HI

1880 1881 1882 188] 1884 1885 1886 1887 1888 1889

560 560 I,l8l ¿64 2,800 1,753 1,630 2.782 3,406

250 325 600 900 1,300 1,790 2,100 2,500 2,900

224.0 172.3 196.8

ΐ8θ·; 1896 1897 1898 1899

3.098 4,766 3.544 4.055 3,868 4.395 4,696 6.649 8,871 7,538

3,300 3,7.oo 4,100 4,500 4,900 5,400 6,000 6.7SO 8,000 9.500

I9OO I90I 190a 1903 1904 •90S 1906 I907 1908 1909

9,467 18,910 19,398 a·,337 21,493 23,805 28,509 28,687 3>,85> 26,247

11,250 13,250 15,250 17,250 19.250 21.250 23,250 2S.250 27.250 29,250

1890 189t 1893 >893 180 ;

1881-193O

Year

1

11

111

1910 τ 9 τ 1 1912 19*3 1914 >9'5 1916 • 917 1918 "9>9

27,846 27,833 38.9*7 38,499 37.879 50.394 58.575 54.612 59.383 37,5*6

31.250 33.250 35,250 37,250 39,250 41,250 43.250 45,250 47.250 49.250

89.1 837 35-4 120.7 126.3 76.2

91.2 128.8 86.4 90.1 78.9 81.4 78.3 98.5 110.9 79-3

1920 I92I 1922 1923 1924 1925 1926 1928 1929

40,801 23,810 21,440 43.442 52,240 5S.725 66,171 70.073 101,348 124.053

51.250 53,250 55,2SO 58,000 62,250 70,750 79,000 87,000 95,000 103,000

79.6 44-7 38.8 74-9 839 78.8 83.8 81.3 106.7 120.4

84.2 142.7 127.2 123.7 111.6 112.0 122.6 1136 116.9 89-7

1930

I5>,675

I 11,000

136.6

|

! 1

1 ι

215.4 103.1 77.6 III.J 117.4

1 : ! ;

107'

142

PRODUCTION AND PRICE OF COPPER

Table 5 COPPER PRODUCTION, M I N E , MEXICO,

Y Mr

I

II

1879

448

450

100.0

1880 1881 1882 188] 1884 188s 1886 1887 1388 1889

448 373 449 548 326 420 280 2,296 3.098 4,234

450 450 4SO 450 450 800 1,200 2,000 2,900 4,000

100.0 833 100.2 122.3 52.5 23.3 114.8 106.8 105.9

1890 1891 1892 1893 1894 1895 1896 1897 1898 1899

4,844 5,824 8,193 9,497 13,182 13,014 12,488 16,094 18,407 21,655

5,200 6,400 7,700 9.200 10,790 12,690 14,700 16,800 18,900 22,000

93.2 91.0 106.4 103.2 12}.2 IO3.3 85.O 95-8 97-4 98.4

1900 1901 1902 1903 1904 1905 1906 • 907 1908 • 909

24,696 34,082 4S.679 56,538 68,258 78,607 67,900 63,353 33,525 48,059

25,000 33.500 40.S00 42,0£0 43.200 44,050 44.7OO 45.39O 45.75O 46,200

98.8 94-7 112.8 134.6 158.0 178.4 151.9 139-9 73-3 104.0

1910 1911 1912 1913 1914 1915 1916 1917 1918 1919

S8.II7 65,500 60,702 58,202 40,058 22,705 31,318 56,222 77,407 61,919

46,600 47.000 47.400 47,800 48,200 48.600 49.0OO 49,400 4Q,800 50,200

124.7 139.4 128.1 121.8 831 46.7 63.9 1138 155.4 123.3

111

72.8

1879-I93O

111

Ytar

/

11

1920 1921 1922 1923 1924 1925 1926 1927 1928 1929

54.22S 16.786 29.738 58.832 55.183 60.181 62,111 66,000 74,216 86,760

so,600 51,000 51,400 51,800 52,200 52,600 53,000 53.400 53,8oo 54,200

107.2 32-9 57-9 113.6 105.7 114.4 117.2 123.6 137.9 160.1

1930

75.365

54,600

138.0

APPENDIX

143

Table 6 COPPER PRODUCTION, MINE, C H I L E , Year

1

11

/// 106.7

1879

5S.227

51.750

1880 1881 1882 1883 1884 1885 1886 1887 1888 1889

48,065

49,500 47,250 45,000 42,750 40,500 38,250 36,000 33.750 31,500 29,250

43,547

48,058 46,031 46,646 43,130 39,"8

32,648 34,989

27,160

1890 1891 1892 1893 1894 1895 1896 1897 1898 1899

23,901

1900 1901

28,784

1903

• 903 1904 1905 1906 1907 1908 1909

29,254

22,260 25.273

23,912 24,724 26,320

24,528 27,832 28,000 34.474

32,402 34,642 33.723

32.665 28,834 29,887

47,396 47,097

27,000 26.000 25.250 25,000 25,000 25,250 35.500 25.750 26,250 26,800 27,500 28,250 29,000 30,000 31,500 33.640 36,080 38,520 40.960 43,400

97-1

90.0 106.8 107.7 115.2 112.7 109.0 96.7 I 1 I.I

;

92.9

! i

108.3 85.6

I

100.1 9S.6 95-6 97-9

103.2 95-3

106.0 104.5 104.7 122.0 III.7 115-3

107.1

97.1 79-9 77.6 115-7

108.5

!

1 !

1879-I93O

Year

/

1910 1911 1912 1913 1914 1915 1916

42.144 40,146

1917

1918

1919

4S,9o8

46,587 49.235 S7.696

78,581 • 13,017 126,766 87,722

11

45.840 48,280 50,720 53.160 S 5,600 60,000 67,000

117.3

86.000

147-7 • 47-4

76.SOO

95.500

268,100 268.474 267.418 316, ¿40

1929

352,516

105,000 120,000 143,000 172,000 201,000 230,000 254,000 276,000 293,000

1930

244,684

327,000

1920 I92I 1922 1923 1924 1925 iga6 1927 1928

109,076 65.300 142,382 227,099 235,733

111

310,000

91.9 83.» 90. S 87.6 88.6

96.3

91.9 103.9 57-0

99.6 132.0 117.3 116.6 105.7 96.9 107.9 II3-7

74.8

144

PRODUCTION A N D PRICE OF COPPER

Table 7 c o p p e r

/

p r o d u c t i o n ,

It

M I N E ,

111

P E R U ,

1879-1930

Ytar

/

11

111

1879

67»

725

92.7

1880 1881 1882 1883 1884 188s 1886 1887 1888 1889

672 689 493

650

103.4 119.8 98.6 110.5 135.0 106.7 40.0 27.3 140.0 150.2

1910 1911 1912 1913 1914 1915 1916 1917 1918 1919

30,17s 30.S73 29,728 30,618 29,862 38,281 47,48s 49,798 48,958 43.244

26,100 28,500 30,900 33.750 36,600 38,600 39.750 4O.5S0 41.250 41,800

115.6 107.3 96.2 90.7 81.6 99.2 119.5 122.8 118.7 103.5

1890 1891 1892 • 893 '894 • 895 1896 1897 1898 1899

168 314 SIS 493 504 829 I ,120 3.405 5.785

725 1,000 1,350 1,775 2,375 3,000

78.1 125.6 108.3 105.1 68.0

1920 1921 1922 1923 1924 1925 1926 1927 1928 1929

36,356 36,689 40,133 48,685 37.410 40,613 46,860 61,032 62,233 61,856

42,250 42.700 43.150 43.600 44,050 44.500 44.950 45.400 45.850 46,300

86.0 85-9 93.0 111.7 849 91-3 104.2 134-4 135.7 133-6

1900 1901 1902 >903 1904 1905 1906 1907 1908 • 909

9,200 10,662 8.792 10,636 10,644 9,660 9.526 11,844 21,885 22,121

3.750 4,800 6,200 8,000 10,275 12,600 15,000 17,700 20,700 23,700

1930

52,476

46.750

II 2.2

44»

405 256 84 S6 280 308

32S

S75

500 400 300 240 210 20s 200 »05 215 250 300 490

S0..4

61.4 63.1 143.4 192.8

245-5 222.1 .41.8 USO I03.6 76.7 63.5 66.9 IO5.7 933

1

APPENDIX

145

Table 8 COPPER

PRODUCTION,

MINE,

Y tar

I

//

I/I

1879

SPAIN

AND

PORTUGAL,

1879-I93O

Year

I

II

III

1910 1911 1912 1913 1914 1915 1916 1917 1918 1919

61,213 62,513 74,426 40.838 33.374 42,978 40,99s 47,208 54.128 56,53'

49.IQO 47.500 45.900 44.300 43,000 42,200 41.600 41,250 40,950 40,700

124.7 131.6 162.1 92.2 77.6 101.8 98.5 114-4 132.2 • 38.9

36,621

36,500

100.3

1880 1881 1882 1883 1884 1885 1886 1887 1888 1889

39,720 43,220 43.427 48,893 51,984 53,6I8 55,6II 58,093 67,704 60,782

39,286 42,072 44,848 47,644 50,430 53.21.6 56,002 58,000 58,750 59,225

IOI.I 102.8 96.8 102.7 103.1 100.7 99-3 100.2 115.2 102.7

1890 1891 1893 •893 1894 1895 1896 J897 1898 1899

57,68ο 60,863 63,010 61,431 58,505 60,967 61,405 59,453 58,660 58,428

59,600 59,850 60,075 60,225 60,240 60,225 60,100 59,950 59,750 59,500

96.8 101.7 104.9 102.1 971 101.2 102.1 99.2 98.1 98.2

1920 1921 1922 1923 1924 1925 19.26 1927 1928 .929

25,858 41.827 28.372 50,338 31.185 55.225 56,768 60,351 54,605 53,599

40,510 40,420 40,390 40,390 40,420 40,500 40,600 40,760 41 ,894 1845 1896 1897 1898 1899

7.J24 6,7 20 6.854 6,821 7,28o 7,930 8.344 8,333 7.907 7.269

7,650 7,700 7.750 7,800 7,800 7,800 7,800 7,800 7,800 7.750

94-4 87.3 88.4 874 92.3 ΙΟΙ.7 107.0 106.8 ΙΟΙ.4 93-8

1920 1921 1922 1923 1924 1925 1926 1927 1928 1929

6.001 7.*98 7.6S4 18,765 17,777 17,805 19,625 21.539 22,651 22,717

14.700 15.500 16.300 17,100 17,900 18,700 19,200 19,500 19,700 19,800

40.8 47-1 47.0 109-7 99-3 95.2 102.2 110.5 115.0 114-7

1900 1901 1903 1903 1904 1905 1906 1907 1908 1909

7,526 8,369 4.984 S,858 8,708 8,204 7.325 7.538 3,836 4,354

7,700 7,625 7,550 7,450 7,350 7,200 7,000 6,800 6,750 6,900

97-7 I09.8 66.0 78.6 118.5 113.9 104.6 110.9 56.8 63.1

APPENDIX

147

Table io COPPER PRODUCTION, SMELTER, WORLD, 1 8 7 9 - I 9 3 O Y*ar

/

1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 >891 1892 1893 1894

11

111

168,962

167,000

101.2

173.348

180,000 193,000 206,000

96.3 94.0 98.1 102.4

181,343 202,037 224,307 245,005 253,121 241,088

291,018

297,000

305,334 316,672

310,000 323,000 336,000

98.5 98.0

1920 1921

104.8

1922

350,000 366,000

95-7 96.6

1923 1924

388,000 424,000 460,000

95-1 9 9 7 98.8

1925 1926 1927

496,000 532,000

97.0 97.6

1928

568,000 604,000 640,000

96.0 96.0 96.0

676,000 712,000 748,000

102.1

352,250 334.928

1897 1898

454.531 480.904

1899

519.336

1903 1904 190S 1906 1907 1908 1909

103.3

1913 1914 1915 1916 1917

258,000 271,000 284,000

3S3.493 368,963 422.838

1951 1902

105.6

1910 1911 1912

230,538 294,804

1895 1896

1900

219,000 232,000 245,000

Year

545.439 580,009 614.436 656,480 727.216 785.402 797.777 794,705 820,100 912,238

784,000 324.000 864,000 904,000

93-4 92.4 103-8 98.0

971 105.0 101.8 96.4 94-9 100.9

1918 1919

/

961,318

11

III

944 000 984,000

101.8 IOI.3 107.7 102.5

1,165,443 I.499.340

1,024,000 1,064,000 1,104,000 1,144,000 1,187,000

1.574,593 1.579.296 1,095,686

1,230,000 1,273.000 1.316,000

128.0 124.1

1,057.164

',359.0°° 1,402,000 1.445,000

77.8

996,507 1,102,506 1,090,627 1,027,045

614.633 952,387 1.341,499 1.493.612

1,488,000

9J.0 101.9 126.3

83.3

43-8 65.9 90.2 98.3 99-5 100.9

1929

1.674.394 1,878,319 2,099,882

1,531.000 1,574,000 1,617.000 1,660,000 ι,703 000 1.7 Jb.000

110.3 120.3

1930

1.749.972

ι ,789,000

97-8

1.546,527 1.608.256

97-6

148

PRODUCTION AND PRICE OF COPPER

Table COPPER

PRODUCTION,

Year

SMELTER,

7

n BELGIAN

CONGO,

191I-I929

Hi "

1910 1911 1912 1913 1914 1915 1916 1917 1918 1919

1,113 2,789 8,300 12,004 15,741 24,802 30,754 22,309 2S.374

SCO 4*500 8,500 12,500 16,500 20,500 24.500 38,505 32.500

222.6 62.0 97-6 96.0 95.4 121.0 12.5.5 78.3 78.1

1920 1921 1922 1923 1924 192s 1926 1927 1928 1929

20,902 33.581 47,798 63,808 94,325 99,322 88.888 98.277 123,960 151,006

39,000 47,000 57,000 67,000 77,000 87,000 97.000 107,000 117,000 127,000

53.6 71.4 83.9 95-2 122.5 114.2 91.6 91.8 105.9 118.9

149

APPENDIX

Table 12 PRICK OP COPPER, NEW YORK, 186O-I93O 1

(Lake, 1860-1899; Electrolytic, 1900-1930) / X

22.3 19.ι 22.7 22.7 22.8

3

2J.O 22.5

25-8 32.9 46.3 36.3 31.8

18.2 16.9

25·Ι 23.6

17.6

23-4

17.9 20.2

20.6 22.6 33.0

29.4

il

21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 2I.O 21.0 2I.O 21.0

20.9

25.5

29.0

20.8

20.9 I9.6

23-3 22.5 21.0

20.7 20.5 20.2 19.8

18.9 17.8

16.4 17.ι 20.I

18.I 18.5 15-9 13-9

11.1 11.0 11 -3 >6.7

IJ.8 ις.8 12.9 11-5 10.8 9.6

10.8 10.9 II.3 12.0 17.6

18.6 16.5

I9.3

18.6

Year

///

I06.I 9I.O 108.1 I 108.· 108.6 109-5

107.1

!

86.7

80.5 83.8 85.2 96.2 140.7 122.6

! 1 1

: ¡

IOI.O 95-6 93-6

1 j j :

89-9 85.0 919

. ! ;

17-9 172 16.5 159 15.4

112.3 ¡ 105.2 1

15.0 14.6 14.2 13.9 13.6

74·ο 75-3 79.6 120.1 ιοί.5

.34

ΙΙ7-9 97-7

13.2 13.0 12.9 12.8 12.8 I 2.0 13-e I3.3 13-4

112.1 lOO.O

j ,

90.3

i i ,

¡ ;

1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913

/

//

111

16.2 16.1 11.6 13.2 12.8 156

13.6 13.8 14.0 14.3 14-5 14-8 15.1 15-3 15-5 15-7

119.1 116.7 82.9 93·° 88.3 105.4 127.8 130.7 85.2 88.5

• S -9 16.1 16.2 16.3 16.4 16.5 16.S 16.S 16.5 16.5

79-9 77.0 100.6 93-9 82.9 104.8 164-8 164.8 U9.I 113.3

18.1

16.5 16.4s 16.4 16.3s 16.3 16.25 16.2 16.1 16.0 159

106.1 76.0 81.7 85.1 79-8 86.2 85.2 80.1 91-3 113.8

130

15.8

82.3

19-3

20.0 13.2 13-9

12.7 12.4 16.3 • 5-3

Ι9Ϊ4

13.6

1915 1916 1917 1918 1919

17-3 27-2

1920 1921 1922 1923 1924 192S 1926 1927 1928 1929 1930

272 24.6 18.7 17-5

12.5 13.4

14.4 13.0 14.0 11.8 12.9 14.6

88.5 83.7

!

75 0

;

84.4

;

84.5

:

86.9 90.9 131-3

! ι i

1 Source of data: Tks Minsral Industry, various volumes, published by McGraw-Hill Book Company, New York. 1 Average annual price in cents per pound to the nearest tenth of a cent ; Atlantic seaboard refinery equivalent. Prices for 1862-1878 were converted to a gold basis on t h · basis of the average annual price of Greenbacks in gold in New York. 1 Average annual prices in cents per pound in terms of inconvertible Greenbacks.

150

PRODUCTION AND PRICE OF COPPER Table

13

PRICE OF STANDARD COPPER, LONDON, 1 y Mr

1860-I9301

1

11 111

Yiar

s

a

s

»

i860 1861 1863 186 j 1864 i86j 1866 1867 1868 1869

95 89 87 86 89 83 81 71 70 69

20.6 «9-3 >8.9 18.7 »9-3 18.0 17.6 >5-4 15-2 15.0

92.0 90.5 89.0 87.5 86.0 84.5 83.0 81.S 80.0 78.5

20.0 '9-7 19.3 19.0 18.7 18.4 18.0 •7-7 17.4 17.0

103.0 98.1 97.7 98.4 103.3 98.1 97.7 87.1 87.6 88.1

1900 1901 1902 1903 1904 1905 1906 1907 1908 1909

1870 1871 1873 1873 1874 1875 1876 1877 1878 1879

65 69 93 84 79 83 76 68 62 58

14.1 15.0 20.2 >8.2 17.2 17.8 :6.s 14.8 I3.S 12.6

770 75-5 740 72.5 71.0 69.S 68.0 66. s 65.0 63.5

16.7 16.4 16.0 15.7 15.4 15.1 14.7 14.4 I4.I 13-7

84-4 91.6 125.9 115.8 111.8 118.3 112.I 102.8 96.0 91.8

1910 1911 1912 1913 1914 1915 1916 1917 1918 1919

1880 1881 1882 1883 1884 l88s 1886 1887 1888 1884

63 62 66 63 54 43 47 49 74 52

13.7 13-5 14.3 13.7 II.7 9.3 10.2 10.6 I6.I II.3

62.0 60.5 59.0 57-8 56.8 56.0 55-3 54-7 54.2 539

I3.4 131 12.7 12.5 12.3 I 2.1 I2.0 I 1.9 II.8 II.7

102.2 103.3 112,2 109.6 95-1 76.9 85.0 89.0 136.4 96.6

1890 1891 1893 •893 1894 1895 1896 1897 1898 1899

54 Si 45 44 40 43 47 49 52 74

II.7 I 1.1 9.8 9.6 8.7 9-3 10.2 10.6 II.3 I6.I

53-7 53-6 53-5 53-6 53-8 54· ι 54-7 55-5 56.S 58.0

II.7 II.6 li.6 il.6 il.6 II.7 I 1.9 12.1 12.4 I2.7

100.0 95-7 84.5 82.8 74-4 78.8 85.7 87.6 91.5 126.8

It 111

s

f

s

15.9 14.3 11.5 12.6 12.8 15.2 I9.I 18.9 13.0 12.8

60.2 62.2 64.0 65.7 67.0 68.1 69.0 697 70.3 80.8

13.1 13.5 13.9 »4-3 14.6 14.8 15.0 15.ι 15.2 15.3

I2I.4 105.9 82.7 88.1 87.7 102.7 127.3 125.2 85.S 83.7

57 56 73 68 59-5* 71.0 113.2 122.0 112.9 837

12.4 12.2 15.9 14.8 I2.94 IS.« 24.6 26.S 24.5 18.2

71.2 71.4 71.6 71.8 71-9 71.9 71.9 71.9 71.8 71.7

15-4 IS-S 15.6 • 5.6 IS.6 15.6 15.6 15.6 15.6 15.6

80.5 78.7 101.9 94-9 82.7 98.7 157.7 169.9 157.ι 116.7

1920 1921 1922 1923 1924 1925 1926 1927 1928 1929

72.8 54.8 58.0 61.9 57-4 61.8 58.3 55.8 63.8 75-6

15.8 11.9 12.6 13.4 12.5 13.4 12.7 12.1 13-9 16.4

71.5 71.2 70.8 70.4 70.0 69.5 68.9 68.3 67.7 67.1

15.5 IS.S IS.4 IS.3 IS.2 IS.I 15-0 14.9 14.8 14.6

101.9 76.8 81.8 87.6 77-6 88.7 84.7 81.2 93-9 112.3

1930

54-7

I 1.9

66.5

14.4

82.6

s

73 66 53 58 59 70 88 87 60 59

1 Source of data: Augustus Sauerbeck, "Prices of Commodities and the Precious Metals," Journal of the Royal Statistical Society, various volumes. Beginning in 1913 The Statist took over and continued Sauerbeck's index and compilation of prices. Standard copper is also known as "Chile Bars" and "good market brands" (G. Μ. Β's). 3

Prices in pounds sterling per long ton of 2,240 pounds

Prices in cents per pound, converted on the basis of the gold parity of exchange, except for 1915-1924 when the conversion was based upon the average annual rate of exchange between the gold dollar and the inconvertible paper pound sterling. s

4 Average of nine months' quotations only. No quotations during August, September, and October, 1914; London Metal Exchange closed.

Prices of Standard copper in terms of inconvertible paper pounds sterling: 1915— 72.8 1916—Σ 15.8

1917—124.8 19:8—ιι$. 5

1 9 x 9 — 92.0 1920— 97.2

1921— 69.3 1922— 63.7

1933— 65.9 1924— 63.2

APPENDIX Table

14

PRICE OF COPPER, HAMBURG,

1 s

i860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870

203.1 100.7 188.4 177-9 195.8 174.3 187.0 169.4 154.9 156.8

1871 1872

150.8 156.0 190.8

1873 1874 >875 1870

191.5 178.1 183.1 181.4

1877 1878

167.7 151.5 134.1

1879 1880 1881 1882 1883 1884 1885 1886

140.7 136.4 150.2 140.8 126.1 97-6 88.1

Ǥ87 1888 1889

92.9 1 5 7 0

1890

122.3 I 16.0 101.8

1891 1892 1893 1894 1895 1896

" 5 · 4

97-9 88.5

1897 1898

95-4 103.2 105.2 11 I.I

1899

155-9

m

11 1

21.9 20.6 20.4 19.2 21.2 18.8 20.2 18.3 16.7 16.9 .6.3 16.9 20.6 20.7 19.2 19.8 19.6 20.3 16.4 1 4 5 15-2 14-7 16.2 15.2 13.6 10.5 9-5 10.0 17.0 12.5

s

192 190 188 186 184 182 180 178 176

20.6 20.4 20.2 20.0 19.8 19.6

174 172 170 168

18.6 18.4 18.2

165 162.8 160.0 157.2

>7-3 17.0

154-4 151.6 148.0

16.7 16.4 16.1

144-0 139-0

15.7 15-3 14.9 14-4 14.0

13-2 12.5 II.0 •0.6

i n . 6 111.4

9-6 10.3 11.2

113-3 115.0 I 18.0

11.4 12.0 16.8

124.7 131.0

111.4 I 12.0

135-5

/ t

s

I9.4 19.2 19.0 18.8

132.7 126.4 120.1 116.7 115.0 I 13.8 112.9 1.2.2

1860-I9301

17-9 17.6

13-7 13-3 1 3 0 12.9 12.8 12.7 12.6 12.5 12.5 12.5 12.6 12.8 13.0 13-3 13-7

106.3 lol.o IOI.O 96.0 107.1

I9OO I90I I902

140.4 142.0

146.7 182.3 182.0 126.9 124.5

15.9 19-7 19-7 13-7 13-S

•47-4 148.0

120.9 118.6

1 3 1 12.8

148.5 149.0

153-1 142.3 132.1

16.5

149-5 149.9 I 50.1

16.4

1917 1918 1919

I5I-5' 127.4" 183.6s 148.6»

I920 I92I I922

175-4 123.0 133.6

19.0 13.3

I923 1924 1925 1926

173-7' 128.0

87.6 91.8

1910 I9II I912 I913 I9I4

96.8 96.1 108.7 105.6 97.1 76.9 71.4 76.9 131.8 97-7 103.9 90.2 88.0 84,8 76.8

• 4-1 14.5 • 4-S I5-I

138.3

15-9 12.3 13.5 13.6

I907 1908 1909

90.3

a

17.0

95-3 87.9 89.9

109-1 114-5 II5-3 121.6 100.0

Ì

156.9

95-9 104.1

1915 1916

1927 1928 1929 I93O

135-7 133-5 126.6

111

»

147-3 113.9 125.1 125.8

1903 1904 1905 1906

113-5 115.6

11

15-4 •4-3 4 13-8 19.8 16.1

14-4 18.8 13-8

140.5 173-9

14.7 14-4 13-7 15-2 18.8

127.4

.3-8

I43.I 144.1 145.0 145-9 146.7

150.3 150.5 150.7 150.8 150.8 150.8

15-3 15.6 15-8 15-9 16.0 16.9 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.9 16.0 16.0

120.6 109-7 83.1 89-4 88.9 101.9 124.7 123.9 85.6 84-4 81.9 80.0 103.1 96.3 894 « 102.5 86.3 123.8 100.6

148.3 147.5

16.0 16.0 16.0 16.0 16.0 16.9 16.0 16.0 16.0 16.0

95 0 117-5

146.5

16.0

86.3

150.7 150.6 150.4 150.2 150.0 149-5 149.0

I 18.8 83.1 90.0 117-5 86.3 91.9 90.0 856

81.7 87.5 87.7 90.2 122.6

1 Sources of d a t a : 1860-1878, Hamburg: and Frankfurt prices, from L. Hertel, Dis Preisentwicklung d. Unedlen Metalen ». Steinkohle seit 1850, Halle a. Saale, 1911, p. 11.4 (Schlesien), as given by Simon S. Kuznets in Secular Movements in Production and Prices, Houghton Mifflin Co., New York, 1 9 3 0 ; p. 4 7 7 ; 1 8 7 9 - 1 9 1 8 , VierteljaArshefte zur Statistik des Deutschen Reicks. Vol. 6, part 1, p. 18; Vol. 9, part 1, p. 18; Vol. 28, part χ, p. 101 ; 1 9 1 9 - 1 9 3 0 , Statistisches Jahrbuch fur das Deutsche Reich, various volumes. Prices during 1879-1919 are for " E n g l i s h , best selected" copper at Hamburg or Frankfurt, 1920-1930, prices in Berlin for electrolytic copper, "prompt, c. i. f. Hamburg, Bremen, or Rotterdam/' 2

Prices in marks per

100

killograms

(220.46

pounds A v d . )

Prices in cents per pound, converted on the basis of the gold parity of exchange between the mark and the dollar, except during 1 9 1 4 - 1 9 2 3 when the conversion was based upon the rate of exchange between the gold d o l l a r and the inconvertible paper mark (average annual rate, 1 9 1 4 - 1 9 1 9 ; average monthly rate, 1 9 2 0 - 1 9 2 3 ) . 3

4

Data not available.

5

Price at Frankfort a Main.

• Average of ten months quotations, January to October, 1923, inclusive.

BIBLIOGRAPHY The following sources have been used in making this study. P R I M A R Y SOURCES

Annual

Publications

United States Bureau of Mines, Mineral Resources of the United States, Part I, various volumes. American Bureau of Metal Statistics, Yearbook, various volumes. Statistisches Jahrbuch fur das Deutsche Reich, various volumes. Vierteljahrshefte

zur Statistik des Deutschen Reichs, various volumes.

The Mineral Industry. McGraw-Hill Book Co., New York, various volumes. The Coffer Handbook, Horace J. Stevens, Houghton, Michigan, various volumes, succeeded by The Mines Handbook, Mines Information Bureau, Inc., Suffern, N. Y., various volumes. Miscellaneous Bureau of Standards, Circular No. 73, Copper, 1922. United States Tariff Commission, Report to the United States Senate on Cof-per, Report No. 29, second series, 1932. Augustus Sauerbeck, "Prices of Commodities and the Precious Metals," Journal of the Royal Statistical Society, various issues. SECONDARY

SOURCES

Books Simon S. Kuznets, Secular Movements in Production Houghton Mifflin Co., New York, 1930.

and

Prices,

S. W. Dowling, The Exchanges of London, London, Butterworth and Co., 1929. Nicol Brown and Charles Corbett Turnbull, A Century of Coffer, London, Effingham Wilson, 1906. 153