Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-02-14
BY KENNETH S. VAN sTRUM.

BY KENNETH S. VAN STRUM.
NEW YORK, February 14.-The re-
cent rise in the price of copper to the
18-cent level was not expected nor de-
sired by many within the industry.
Many believed that a sterilization of
the price around II cents would result
in more permanent benefits to the in
dustrv as a whole. While producers
knew that a sharp rise in price was
entirely possible if the consumers sud-
denly became panicky about their sup
ply sources, the producers themselves
took steps to prevent rush to buy the
metal When copper was several cents
below present levels they followed the
very unusual practice of issuing warn
ing to purchasers that if their buying
tactics were continued their own ac-
tons would run up the price of the
metal. Since copper has advanced sew
eral cents since the warning, producers
are now hoping that the price is on a
permanently higher level.
Trade Associations.
Recent improvements in this indus
try again direct attention to the success
of efforts of several industries to pool
their knowledge for the benefit of the
entire industry. The Iron and Steel
Institute, the Petroleum Institute, and
now the Copper Institute, by publish
ing statistics showing conditions in their
industries, have done much to bring
about sterilization of prices. No longer
do important companies jealousy guard
figures which show buyers the exact
position of a commodity; they have
that IN wild ,rfo
fluctuations and that while they might
be temporarily benefited by higher
prices, they would sooner or later have
to pay for the false prosperity when the
price collapsed
Besides taking steps to see that COP
per production and consumption figures
are widely disseminated, the Copper
Institute has increased the demand by
advertising the uses and advantages
OF copper. This is shown by the fact
that whereas the demand from the
electrical industries, which have long
been considered the principal users of
copper, just about held its own in 1928,
the demand for copper sheets and
strips increased noticeably. Copper
sheets and strips represent raw ma
terial for such industries as railroads
and automobiles, which absorbed Is per
cent of the total amount of copper last
year. The high production of automo-
biles accounted for Is per cent of total
copper produced and was especially i'm
portant in creating a heavy demand for
the metal. But the advertising cam
paign Of the institute also increased
the demand for the metal for such uses
as roofing and piping. According to
many, it played an important part in
absorbing the marginal supply of cop
per, which has been largely responsible
for the present sharp run-up of prices
The opinion in the industry seems
to be that because of the increased
permanently lifted to a higher plane.
Today the industry is well fortified
against over production since 1t takes
large scale operations to make copper
eflciently. It would take several years
to build new plants and they would not
be undertaken unless copper prices
stayed at high leved for consider
able period Of time.
Copper Stocks.
The immediate trend of copper prices
is more closely dependent upon the
trend of general business conditions
The wide diffusion of the uses of the
metal has made 1t even more dependent
upon general conditions than hereto
fore.
If the trend of the price of copper is
compared with any statistics which
show the degree of business activity, 1t
will be seen that there is a very close
relationship between the two. Copper
rises while business activity increases
and falls as soon as its declines. Since
the price of copper securities fluctuate
very closely with the price of the metal
it is necessary to judge what the price
order to estimate the possibiHtieSs Of
copper stocks.
The advances In the metal has gone a
little further than was generally antici-
pated in trade circles, but even now 1t
is difficult to estimate how far the price
of copper will advance. One can only
say that it will probably remain firm or
advance as long as general business
conditions, improve, but at the first
signs Of hesitation, copper prices will
probably fall to lower levels.
Copper stocks should therefore do we'll
as long as general business conditions
improve and the price of the metal
rises. But If the business recession
which Is rather widely anticipated de-
velops sometime after the early months
of the year, the price of copper would
be expected to decline also. It may be
possible that the general level of copper
stocks has been permanently lifted to a
higher plane, but the immediate trend
depends to q greater extent upon the
trend Of business activity.
Copyright, 1929