The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1918-10-17
President Percival
Explains Details
of Action.
REFUSE CONCESSIONS
Contract Cancelled and Stock
Returned Output Sold
for Three Months

OF the dissolution OF all reia-
tions between the Consolidat-
ed Interstate Callahan Min
ing company and the American Metal
company has been made by John A.
Percival, president of the Interstate
Callahan, in a letter to the stockhold-
ers, copy of which has been receiv-
ed by the Miner. The 1Oyear con-
tract held by the American Metal
company for the output of the Inter-
state Callahan mine, has been can
celled in consideration of the return
of all stock in the mining company
held by the metal company, also the
stock held by individuals connected
with the metal company. The rea-
sons given by Mr.. Percival for the ac-
ton are the refusal of the directors of
the Interstate Callahan to make con-
cessions in the terms of the ore con-
tract to cover the increased cost of
treatment. He makes no reference to
the German ownership of the Ameri-
can Metal company which is popular
ly believed to be the real cause of the
dissolution Mr.. Percival's letter fol-
lows:
To the Stockholders.
"As you know, in April 1914, this
company sold it's entire mine and mill
output to the American Metal COM
pany for 10-year term, commencing
September %, 1916 Our product was
sold at st. Louis spelter prices, less
certain deductions for smelter charges,
freight, etc. At the time the contract
was made the world was at peace, and
normal prices obtained for labor and
material, and there was nothing to in
dicate that such prices would not con-
tinue. Since that time, extraordinary
conditions have resulted, in large part
revolutionizing all mining and smelt-
ing operations. Costs have in most
part more than doubled.
Since September, 1916, nearly all
our product has been taken by the
Metal company. Before the United
States entered the war there was
large demand for spelter and prices
rapidly increased, so that the earnings
of our company in 1916 were very
large. AS a result of the United
States entering the war, and virtual
" communicating all iron and cop
per- the galvanizing business in the
United States has been practically
suspended In consequence large
part Of the use of spelter has ceased.
Instead of increasing, as have all
items of cost of mining and smelling.
the price of spelter has decreased. At
the end of the war it is certain there
will be an increased use Of spelter,
and a consequent return to relatively
normal conditions in the zinc indus
try We assume that the stockhold-
ers are fully conversant with these
facts, but mention them as the. rea-
son why this company has not been
able to earn and pay larger dividends
Want Better Terms.
within a few months after the
metal company began receiving our
ores under the contract, it brought to
our attention the increased costs OF
labor and material for treatment op-
erations, and requested an additional
allowance therefor The increase in
labor and material have been contin-
utng and smelters and reflners in the
copper and zinc industries nave
doubled their charges for treatment
over the pre-war period. In addition
to these high costs of treatment, the
metal company has had strikes at lts
plants in Oklahoma and Pennsylvan-
ia, and has from time to time request
ed suspension Of shipments under the
contract during such strike PERIODS.
ter, and with a view of conserving our
property the directors, in the interest
OF the stockholders, for the last few
months have limited our production TO
about one-half> Of normal.
Directors Refuse Concessions.
Our directors have not considered
1t in the interest of the stockholders
to grant the metal company any con-
cessions or relief from the conditions
or high costs, for the reasons among
others, that the same high costs al
fect our own mining operations, ana
because the lessened price of speiter
Ad market conditions did not JUSTIFY
y IN increased output. They felt that
to give the metal company increased
charges simply would take that much
more out of the net values to be re-