Yerington times. [volume] (Yerington, Nev.) 1907-1932, 1907-10-12
BREEZY COMMENT ON
The SITUATION OF
COPPER

WI ] Ill
Copper is having a sinister influence
on the stock market because note
worthy portion of the recent speculative
debauch took the form of gambling in
copper mining shares. We are now
having the reaction, says the Mining and
Scientific Press. Apart from this, a
collapse i'll the price of the metal was
bound to come i'll consequence of the
wholly irrational attempts to peg copper
at price determined by one or two
metal selling agencies This has been
tried before, with like results. During
the European trade reaction in 1891 the
Amalgamated people tried to keep cop
per at IL cents, only to find that the law
of supply and demand was too much for
them; they resembled Mrs. Partingdon,
who tried to mop the incoming tide,
same spirit in the early part OF this
year, copper was marked up by
handful of metal spectators to rs cents;
when the production began to increase
faster than the consumption, they re-
fused to bulge until the market ran
away from them, so that i'll August the
this was done II. II. Rogers of the
Amalgamated company had made pub
lie statement that the price was fixed
at p cents. At the date, not two months
ago Phelps, Dodge & Co We're quoted
as saying that Is cents was bedrock
price and that the market would strength
Ell. The Paris Temps said oracularly
that the price of metal is not likely to
fall below $50 per ton" this being the
equivalent of Is cents per pound. The
Economist Franchise echoed this
assertion.
Meanwhile excessive speculation all
over the world caused temporary fnan
cial stringency, preventing the expan-
sion of enterprise and causing de-
crease i'll the demand for the metal.
This economic fact made the metal au
thorities look foolish. Unable any longer
to stem the tide, the Analgamated sold
a lot of metal at Is cents when it was
quoted at about II, and, finally realizing
the condition of the market, the direct
ors ordered a curtailment of production
at the mines. The daily press stated
that the mines at Butte were to be
closed down, but this, of course, was an
exaggeration, for to close all the mines
of Amalgamated would ruin the State OF
Montana and create a disaster OF the
first magnitude. Nor would it restore
the balance, for the trouble is not so
much with an excessive production OF
the metal as the accumulation of stock
due to a mulish insistence OH a price
not warranted by the condition OF busi-
ness. Even at Is cents the Amalga-
mated will make a profit, although 1t
NAV not pay all the dividends expected
on an inflated capitalization. 1t costs
II "a cents per pound to produce cop
Hecla has decreased its quarterly divi-
dend from $40 to SIS. AS it produces
"a, 600, 900 pounds per annum at 8 Ia
cents per pound, there is still lordly
profit. This is also true of Wolverine,
which produces 5000, 600 pounds per
annum at a cost of IL cents per pound
a., fnr la Or
lation, unmindful of the limited, though
large, reserve of ore and oblivious OF
any such considerations as are involved
in the amortization of capital.
The worlds production OF copper III
1906, was us, 900 tons, as compared to
700 600 tons in 1905 The normal in
crease is 8 per cent per annum. Expand
ing industry made big demands on the
supplv and this led to rapid rise in the
price of the metal, so that i'll January,
1902. it was II IA cents and i'll March,
1907. it was 1858. This violent rise
was due in part to economic conditions
but in its extreme phase it was directly
traceable to manipulation, that is, an
effort to create scarcity by withholding
supplies in the expectation OF forcing
consumers to pay maximum price.
During the first half of 1907, the buyers
and sellers kept apart, they tired to blum
each other, and the buyers got the best
of it, because industrial exuberance be-
pan to wane in consequence OF exorbit-
ant demands on the resources OF capital,
while concurrently the slowly increasing
output of copper finally produced sur
plus fatal to any attempt to 'hx'' the
nrice of the metal At the beginning OF
canten,ber there were about $50, 600, 900
pounds of unsold copper, refined and
ready for consumption, as against about
10, 900, 600 pounds at the end of 1906.