New-York tribune., 1921-06-04
Copper Depression
Shown in Report
Of Chile Company
Overproduction To Be Taken
Care of by World Re.
construction, Cuggenheim
Thinks; Earns 5.35 p. C.

Chile Copper gross gross sales in
1920 were S17,711,000, and after pay
ing expenses, taxes and interest on
bondse there was $5,O85,OO0 surplus
available for dividends on the s95,OOO,-
600 outstanding stock, equal to $50
per cent. From this surplus the COM
pany wrote off $2,755,000 depreciation
and S1,904,000 for depletion of ore re-
serves The combined balance sheet Of
the Chile Copper Company and the
Chile Exploration Company shows
total of current assets carried at s29,-
731 900, but of this only Silt 900 is
cash and $2,000,000 is Liberty bonds.
Materials, supplies and merchandise
are carried at S8,210,000 and ore and
copper in process carried at cost
$1,0l0,OO0 and copper on hand and in
transit is carried at cost S7,466,OOO.
The company is almost without cur
rent Liabilities. It's accounts payable,
not due, amount to S859,000, and its
drafts unpaid, not due, total S1,957,000.
The Chile company joined with other
copper companies in depositing copper
for export under the Copper Export
ASSOCIATION plan. A total of 400,000,000
pounds OF copper was deposited under
this plan, and of this 7.58 per cent, or
oo,5Z0,OOU pounds, was deposited by
the Chile companies.
In 1919 the capacity of the company's
plant was increased to $4,000 tons OF
ore a day, which is equal to pro-
duetion of from las 100000 to l55, ,0O0,-
0oo pounds of copper a year. II had
oeen planned to further extend the
plant, but conditions in 1920 were no.
thought to warrant it. President Dan
lel Guggenheim in his annual report
20 Chile Copper stockholders describes
at some length the conditions in the
copper industry. He says in part;
"For the last two and a half years,
eyer since the signing Of the srmistice,
5he copper industry, like most other
INDUSTRIES, has been in stats of re-
ao1ustment. In peace times the in.
crease from year to year Of the
worid's demand for copper has aver
aged approximately per cent. If this
average annual increased consumption
had gone on uninterrupted by the war,
then IN 1919 and 1920 the consumption
OF copper would have been, respective
~, 50 per cent and AZ per cent over
the consumption in 1913. For the
years 1919 and 1920 production
averaged about 5 per cent in excess OF
1918 production, an amount which in
all probability would have been taken
up by consumption but for the war.
Three factors have brought about the
present large accumulation Of the
metal.
Factors in Situation
"First-The refinery output, which
must always follow by a considerable
interval the production of the mines,
continued at the war rate for some
months 2ftar hui
sumption of the refined product de-
creased so rapidly Immediately follow
ing the armistice that about one-haf
OF TINS production went into stock.
oecond-Even with mine production
reduced to meet the conditions after
the armistice, the falling off of bust
ness beginning with September, 1928,
ADDED 80 per cent of this reduced pro-
duction to stock.
Ihlrd-The world has had to ABSORB
IN THIS two and a half years most OF
the vast supply of copper and brass
IN the form of munitions held by the
AIlles and the Central Powers at the
end OF the war. 1t is estimated that
the quantity of this metal so marketed
approximates the accumulated stock OF
copper, Indicating that the true world
consumption has just about equalea
the production of the mines.
beginning in June, 1899, and con-
tinuing through August, 1920, there
was strong demand for copper, SO
that during this period consumption
exceeded production by 10 per cent
The best estimates, based on exist
ing conditions but not including the
iaSSe increase in the demand for cop
perNwhich should come from Germany
and the rest of the world, are that the
consumption of copper is about 675,oVo
tons per annum, and the mine produe-
ton about $4,000 tons per annum. Al
this ratio it viii he seen readily thai
1t will not take long time TO ABSORB
the entire copper surplus and thus ptos
the industry again in splendid conoi-
ton"