The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1918-04-25

Smelling and Refining company, Dan
lei Guggenheim. it's president, Is very
outspoken when he says the following
1T has always been the policy of the
company to make long time contracts
for ore and bullion. at fixed price
for smelling and refining. which has
permitted continuous running of ouI
works, and plans could always be
made intelligently and without risk
for enlargement or of making expen-
ditures to reduce costs While the
charge in such contracts was fixed
the company had a certain interest in
the metal recoveries. Under econ
omic laws. If costs of operation in
creased. it would be on account Of
generally increased values, and the in
terest of the company in the metal re-
coveries would equal the increased
cost Of smelling and refining.
1.-The company is now suffering from
the entire lack of economic law, and is
operating under the direction of gov
ernmental commissions. whereby the
value of the metal products of the
company is fixed. But the cost of
labor and supplies is not fixed; in fact
owing to the various governmental
contracts for shipbuilding and othor
construction of great magnitude. which
have been made on the basis of cost
plus commission, the contractors
have no interest in holding labor costs
at point where profit can be made,
and, in fact. their own interests are in
favor of as high cost as can be in
any way justified
by these two governmental actions,
first, by reducing the value Of our
product, and, second. by constantly
Increasing our cost, this great corpor-
alton, producing what is absolutely
necessary to the government in carry
ing on the war, is having it's ability to
pay fair return to its stockholders
seriously jeopardized While it may
be said that the previous profits We're
excessive, had it not been for such
profits, the company would not have
been able to enlarge it's works, and in
crease its output, all of which has
been of vital necessity to the govern
ment. These engagements have been
effected at cost of fully $15,000,0OO,
all of which has been taken out of the
earnings of the company. and the en-
larged capacity will doubtless be en-
tirely useless 'after the war demand
ceases"
The casual reader will be mystified
by this when he turns to the accounts
of the company and observes the re-
cord of its large earnings in 1917, but
the expert will understand that Mr..
Guggenheim had in mind not the re-
suits of 1917. but the situation existing
today.
We know that the entire smelling
and refining industry is today in des-
perate condition, especially the refin-
ing Both branches have been in
the past based on long time contracts,
Q0 20. and 25 years., conservatively
as it was thought, but this is now
proving to be their undoing. For
while tolls remain fixed, costs have
risen enormously, even 100 per cent in
some cases. To the plight of the re-
finers the government has been dir
ectly contributory, in it's competition
with them for labor. nearby contrac-
tors operating on the cost plus 10 per
cent principle calling away their men
or forcing them to meet the reckless
offers that the cost plus 10 per cent
system permits. The government fur
ther cripples the refiners by fixing the
price for copper and precluding any
chance Of their recouping themselves.
The smelters are more or less in the
same fix.
II 1t were not for collateral inter-
ests, the custom smelling and erfining
industry would today be bankrupt.
Yet so important is this industry that
let it be checked and both Europe and
America will cease to get copper. The
and refiners have made rep
in Washington, but how