420
SIR ERNEST OPPENHEIMER
programmes
in the pre-depression years (specially heavy overseas loans by the
United States to Germany) and the expansion of the electrical and
motor-car industries, the world demand for copper expanded rapidly and
so did world production: in 1929 output was 2,100,000 short tons, and
it must be borne in mind that with the increasing degree of copper
utilization there was also a growth in the supply of'secondary' or
'scrap' copper. The course that prices took in these boom years was not
entirely 'natural'. On 12 October 1926 there had been established in
the United States an organization, 'Copper Exporters Inc.', which
comprised all the leading U.S. copper interests, but which had
important non-American 'associates', not only leading European metal
firms, but also producers such as the Rio Tinto Company and the Union
Miniere du Haut Katanga—the important Belgian Congo producers. It was
asserted at the time that about 90 per cent of the world production of
copper was represented by the firms and companies forming the
membership of the organization.21 The object was
to
eliminate in foreign countries the harmful speculation that causes wide
fluctuations in price, unwarranted by industrial features in European
markets. . . . The effort will be made to sell direct to consumers
except where conditions make it desirable, in facilitating export
trade, to sell to distributors. An effort will be made to eliminate
harmful speculation in copper.
A
little over a year later, practically the same group of American
producers founded the Copper Institute, primarily a fact-finding and
statistical reporting agency.
The
year 1928 was marked by abounding prosperity for the world's copper
producers: 'world production increased by 13-6 per cent, world
consumption by 13-9 per cent; U.S. mine production increased by 9-5 per cent and U.S. consumption by 19-2 per cent—U.S. prices rose from 12-92 to 14-57 cents per pound; net earnings of American producers increased 82-4 per cent.'22
In March 1929, copper prices reached the figure of 24 cents a pound,
but the pace was too hot to hold. In the middle of April, the price was
pegged at 18 cents by Copper Exporters Inc. Consumer resistance was
manifested even before the New York stock market crash; stocks mounted
and criticism of the new policy of the cartel became very manifest. For
the first time, European consumers were considering the organized
substitution of
21 The
text of the announcement of the formation of Copper Exporters Inc.
together with a full list of members and associates can be found in 3 5
Mineral Industry (1926), p. 156.
22 39 Mineral Industry, p. 123.
