World Code

For half a century the copper industry has been notoriously unsuccessful in keeping order in its own house by world agreements. Once in the 1880's coppermen tried to break the cycle of overproduction, price declines and ruin with a cartel called the Secretan Syndicate. It failed. Next they tried hiding copper in mud warehouses in China to raise the price by reducing the visible supply. This, too, failed. Nine years ago they formed Copper Exporters, Inc. to peg the world price around 18-c- a Ib. That cartel broke up in 1932 when African coppermen refused to cooperate and hard-driving Louis Shattuck Gates and his Phelps Dodge Corp. had withdrawn.

Last month, after nearly six years of Depression, a small but potent group of foreign copper producers was ready to try again. They had before them as a model for copper control the successful NRA code under which U. S. copper companies have kept surpluses off the market, brought domestic production and consumption roughly into balance. What copper needed, said they, was a world code. Let copper producers outside the U. S. draw up a working agreement which, while avoiding price fixing and sales pools, would give world copper markets the stability now enjoyed in the U. S. When President Cornelius Francis Kelley of Anaconda Copper Mining Co. invited his competitors in Rhodesia, in the Belgian Congo, in Spain and Mexico to put such a code in writing, they hastened to accept. Three weeks ago they assembled in Manhattan, began to confer.

Lest their privacy be disturbed by dutiful newshawks the delegates used a half-dozen different meeting places all over the city. The best the Press could get was a list of those present. This was impressive. Mr. Kelley had assembled ambassadors from companies producing 75% of all the copper outside the U. S., Russia and Japan. Rhodesia was represented by Managing Director Arthur D. Storke of Roan Antelope Copper Mines and Managing Director Stanley Shelbourne Taylor of Rhokana mines. Belgium sent Managing Director Edgar Sengier of famed Katanga mines in the Belgian Congo and Fernand Pisart of Societe Generate des Mineraux. From Czechoslovakia had come Engineer A. J. Bellanger of the Bor copper mines, from England Col. R. M. Preston of Rio Tinto, Ltd. U. S. delegates were President Kelley of Anaconda and Earl Tappan Stannard of Kennecott. They were present not in their capacities as domestic producers but as the operators of great copper mines in Chile, Peru and Mexico. President Gates of Phelps Dodge stayed away because Phelps Dodge owns few foreign mines. Russia and Japan sent no delegates, made no promises to cooperate.

No newsmen needed to get into the conference to know what facts were shaping the talk. World copper production, excluding the U. S., is roughly 1,130,000 long tons a year. To that must be added about 75,000 tons exported from the U. S., making a total available for foreign consumption of 1,205,000 tons. World consumption, excluding the U. S., is only 970,000 tons a year, leaving a yearly surplus of 235,000 tons, enough to keep the market perpetually upset. Since no great advance in world consumption may be expected (Britain, France and Germany use only 5% more copper today than they did before the War) there was plainly only one thing for coppermen to do: cut production down to consumption.

Last week the conference was ready to announce an agreement whose terms had been approved by all parties. It applied only to markets outside the U. S. Principal points:

1) Signatories agree to cut their combined production 240,000 tons a year beginning June 1.

2) A statistical bureau will supply all companies with production and consumption figures, work to keep excess stocks from accumulating.

3) Uniform trade practices governing sales, deliveries and terms of payment will be adopted, but there will be no price-fixing or pooling of sales.

4) The agreement will expire July 1, 1938.

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