The Cordova daily times., 1917-11-06
CORONA, ALASKA, TUESDAY, NOVEMBER 6. 1917

confronted with conditions that may make the present price an unprofitable one. The mines of that district are still idle, their labor troubles not yet having been settled.
 Another direction in which the con. traction of copper supply may be fear ed is in the importation from South America. Some of the copper is me high-COst copper and natural difficul. ties have further enhanced by the de. preciation in those countries of the American dollar. Quite aside from that fact, however, is the fact that our business in crude copper with those countries has been built up by dint of hard effort and by the creation of complicated market machinery. That machinery cannot be wrecked. as it has been, without interfering with the supply.
 The feature in the economies of the situation that has been overlooked is 
 price also affects costs and in doing so widens the spread among the costs of the several producers. Thus, if be- fore the war one producer had a cost of 10 cents and another cost of 15 cents, their present cost might be 16 cents and 24 cents respectively. The high-cost producer would be losing money at 23la cents just as formerly he lost money at 1412 cents, but the low-cOst producer would be making 9 cents per pound profit against Az cents formerly. This illustrates how such companies as the Anaconda and Utah, and the other pOrphyries can properly regard 2312 cents as reasona- ble, and how they may continue to show earnings not very much short of their stupendous returns in 1916 when they got 25 cents for their copper. while a small producer who got PIP cents in 1916 and made a moderate profit may lose money at 231a cents and even be compelled to suspend pro- duction.
 If there was free market for cop per and if production had begun to ex- ceed demand, with the result that the prices were declining, small producers would begin to be extinguished and production trimmed down to fit the de- mand at figures that would still leave very fine margins for the big pro- cers. We mean, of course, margins expressed in dollars and distributed as such in dividends, not losing sight of the fact that the stockholders re- ceiveing those dividends would not be able to buy with them any more than with the smaller dividends of yore.
 It may be suggested that the big producers, who find 231a cents a sat isfactory price, will produce all the copper that is needed, increasing their output if necessary. It is very doubtful if they can. Early in this year it began to look as if they had reach cd the ilmlt or their capacity. Their plants and personnels had both been strained to the untmost, and their ability was showing signs of deterior- ation. Nine months ago it was fore casted accurately that consumers had overbought, but the other forecast of further increase in production was early known to be wrong. What ever be the contributory causes. and they are most complex, the plain fact remains that at the present tire we ceiving thoses dividends would not be estic consumers have been official ly told that during the next three months at least they must get along with curtailed supply-Engineerin and Mining World