Bisbee daily review., 1919-06-29

the ATlZOna Mlnlng JOufnal.
 PHELPS DODGE CORPORATION Office of Assistant to the President
 Douglas, Arizona
 MT Robert A. Watkins,
 Arizona Mining Journal,
 Ph0enix, Arizona.
 Dear Mir. Watkins:
 have received your letter of April 3rd and I am glad to comply with your request to furnish you Q brief article on the copper situation at the present time as I see it.
 The Copper Situation
 Since the beginning of the Great War in August of 1914, the copper industry has passed through extraor- dinary periods of depressions and prosperity, curtailed production and record outputs On the declaration of hostilities the price of the metal, while below the average of the pre- vious year, permitted or a small prof it under the then existing production costs, but with the elimination of the demand from the Central Powers, the price rapidly fell to Il cents per pound, forcing the suspension of many mines and the curtailment of operations of those which continued to produce. It was not then realized what extraordinary. demands modern warfare would make on commodities for the manufacture of munitions. The year 1915 opened with copper at 12 3-4 cents and then end of the same year recorded 22 1-3 cents From that time and until September, 1917, the Price Fixing Committee of the War Industries Board assumed, with the consent of the producers, the power to determine the maximum price at which the metal could be sold-the price reached the high figure of 33 1-4 cents. Whatever may be the opin- ion of economists as to the wisdom of ignoring the natural law of supply and demand by the f;xation of an ar bitrary price for a raw material, it must be recognized that an abnormal  the consumers in this case the allied government, suffering through the high and violently fluctuating prices, but the producers were likewise great ly embarrassed as their producing costs were to a great extent based on the quotation existing in the previous month. Exemplifying this uncertain ol4 C. &l, oI varied in 1915 from 12 3-4 cents to 22 1-3 cents, in 1916 from g 1-2 cents to B If cents and in 1917 from 23 1-2 cents to B cents. During the period under consideration the United States production increased from 525,529 me tric tons in, 1914 to S72,O65 tons in 1917. It is obvious that nothing can be more detrimental to a great indus try both from the point of view of the stockholder and the employee, than violent fluctuations in price and output, necessitating, as they do. pc riods of great prosperity and high wages and correspondingly bitter de- pression and unemployment. The copper industry has been peculiarly susceptible to these fluctuations in the past and we are today experienc- ing one of the alarming extremes.
 Up to the actual date of the signing of the armistice our government con tinued to urge on the mining com panies that every effort be put forth to maintain and if possible increase their output. Conseque ently, when the war ended. the producers found them selves with hundreds of millions of pounds of copper in transit and in refineries which had been produced at a maximum cost and for which there was no sale at any price. Since the first of the year perhaps couple of hundred million pounds have been sold to domestic consumers at prices as low as IA 1-2 cents, representing a heavy loss, it being estimated that the copper stock on hand on January 1st had actually cost IS cents to pro- duce.
 There has as yet been no copper exported to Europe, which before the war required from 40 to SO per cent of our output, as the governments of England. France and Italy have large stocks on hand and will probaly not be in the market until autumn. As soon as the Peace Treaty is signed, Germany and Austria Hungary, who are absolutely denuded of the red metal, will be heavy buyers, provided their labor difficulties are satisfacto- rily adjusted. Were I a pessimist on the future of copper, I should feel that there was no justification in con- tinuing the operation of several of our high cost properties which are today losing money on every pound of cop per which they produce. Not only, however, do I believe that after the next few months We will see a mate rially better demand when Teadjust- ment from war to peace conditions has been accomplished, but with many others in the same position as I, feel that, where financially possible, op- erations should be continued in order to prevent distress in the mining aounnunifiac and fn nr0vida pTnnIOv-