Scarcity of plenty; the role of metal resources in the growth of the United States economy, 1860-1960, by Melvin W. Harju

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Scarcity of plenty; the role of metal resources in the growth of the United States economy, 1860-1960, by Melvin W. Harju
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xi, 212 leaves. : illus. ; 28 cm.
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Harju, Melvin William, 1941-
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Metal trade -- United States   ( lcsh )
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Thesis--University of Florida.
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Bibliography: leaves 203-211.
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Typescript.
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Vita.

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Scarcity or Plenty; The Role of Metal Resources
in the Growth of the United States Economy, 1860-1960










By

MELVIN W. HARJU


A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF
THE UNIVERSITY OF FLORIDA IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY


UNIVERSITY OF FLORIDA
1972




































Copyright by

Melvin W. Harju

1972
















ACKNOWLEDGEMENTS


I would like to express my sincere appreciation for the

aid and encouragement given by Dr. William Woodruff and

by my wife, Gwen, during the course of this undertaking.

Special thanks go also to Dr. R. H. Blodgett, Dr. P. E.

Koefod, Dr. T. A. Nunez, Dr. C. H. Donovan, and to the

many others who gave graciously of their time and

experience. Any errors or shortcomings are, of course,

entirely my own.














TABLE OF CONTENTS


ACKNOWLEDGEMENTS ........... .... iii

LIST OF TABLES .................. vi

LIST OF ILLUSTRATIONS .... viii

ABSTRACT .................. .... ix

CHAPTER I: PROSPECT: SOME ASPECTS OF ECONOMIC GROWTH
AND RESOURCES . 1

The Experience of Developed Countries and the
Idea of Progress (1)
Unique Characteristics of Economic Growth (11)
The Importance of Resources to Growth and
Production (14)

CHAPTER II: THE PROBLEM EXPRESSED: THE NATURE OF OUR
INQUIRY ..... 22

Intention (22)
Definitions (23)
Scope and Method (27)

CHAPTER III: THE COURSE AND CHANGING NATURE OF UNITED
STATES PRODUCTION AFTER 1860--AN OVERVIEW .. 29

Production in 1860 (29)
Changing Conditions and Changing Techniques
After 1860 (35)
The New Importance of Iron and Copper--Metals
in Relation to the General Economy (44)
The Changing Nature of Production after 1860 (40)

CHAPTER IV: THE DEMAND FOR IRON AND COPPER IN THE
UNITED STATES, 1860-1960 .. 55

The Changing Uses of Iron and Copper (55)
Growth in National Output and Growth in Metals (69)
The Efficient Use of Metals (73)
Increased Production and Increased Metals
Demand (78)








CONTENTS--continued


CHAPTER V: THE SUPPLY OF IRON AND COPPER AFTER 1860 81

Increased Production of American Mines (81)
Changing Location and Declining Ore Yields of
American Mines After 1860 (82)
Changing Techniques in American Mines (88)
Effects on Costs of Declining Ore Yields (94)
The Move to Foreign Metals Sources (104)

CHAPTER VI: THE RELATIONSHIP BETWEEN PRODUCTION,
EXTRACTION, AND GROWTH .. 110

Changing Production and Changing Resources (110)
Production and Natural Wealth (112)
Structural Materials and Economic Growth (120)
The Effects of Metals Scarcity on Growth (133)

CHAPTER VII: SUMMARY AND CONCLUSIONS ... 143

A Glance in Retrospect (143)
The Influence of Abundant Resources and
Increasing Scarcity on Growth (120)
Implications of Materials Scarcity for Rich and
Poor Nations (151)
Natural Resources and Material Progress (154)
A Balanced Perspective (160)

APPENDIX A: CHANGING PRODUCTION, 1860-1960 ... 163

Employment, 1860-1960 (163)
National Income by Source (167)
Physical Volume of Output, 1900-1960 (173)

APPENDIX B: COPPER, IRON, AND STEEL PRODUCTION AND
METALS IN USE, 1860-1960 176

B.1 Copper, Iron, and Steel Production,
1860-1960 (176)
B.2 Imports and Exports of Copper and Iron,
1900-1960 (182)
B.3 Copper and Iron Scrap (184)
B.4 Apparent Consumption of Iron and Copper and
Iron and Copper in Use, 1900-1960 (190)

WORKS CITED . .. .. 203

BIOGRAPHICAL SKETCH ... .212














LIST OF TABLES


Table Page

1. Representative Prices of Selected Commodities,
1860 . ... 32

2. World Iron and Copper Reserves .. .107

3. Projected Requirements and Availabilities of
Selected Metals to the Year 2000 .. .149

4. Labor Force Engaged in Raw Materials and Other
Industries in the United States, Total and Percent
Distribution, 1860-1960. .164

5. Agricultural Output and Productivity, 1910-1960. 165

6. Value of Sales and Home Consumption of Farm
Products and Value per Worker, 1860-1900 165

7. Farm Machinery and Equipment, 1900-1957. ... .166

8. Farm Machinery and Farm Labor Productivity,
1910-1960. .. .167

9. National Income by Industry Divisions, 1869-1960 168

10. Gross National Product by Type of Product, 1929
and 1960 . .. 169

11. National Income by Industries, 1929 and 1960 170

12. Share of National Income by Selected Industries,
1929 and 1965. . 171

13. Private Domestic Economy: Average Annual Rates of
Change in Physical Volume of Output, by Selected
Segment and Group, 1899-1953 ... 173

14. Capital-Output Ratio, 1850-1958. ........ 175








TABLES--continued


15. Rates of Growth in Domestic Copper Ore (Mine
Recoverable Content) Production by Decade,
1860-1960 .... .178

16. Rates of Growth in Pig Iron Shipments by Decade,
1860-1960 . 179

17. Rates of Growth in Steel Ingots and Castings
Produced, 1871-1960 .. 180

18. Average Annual Rates of Growth Between Decade
Averages for Copper, Pig Iron, and Steel Ingots
and Castings, 1861-1960 ... 181

19. Average Annual Rates of Growth of Copper, Iron,
and Steel Production and Gross National Product,
1900-1960 . .182

20. Apparent Consumption of Iron and Copper Relative
to Domestic Production: Selected Years 1900-
1960. . .. 183

21. Potentially Recoverable Iron Scrap, 1929 and 1960 188

22. Potential Recovery of Obsolete Copper Scrap,
1960. . .. 189

23. Copper--Apparent Consumption--Additions to Metals
in Use and Average Annual Addition by Decade,
1900-1960 .... .. .... .193

24. Iron--Apparent Consumption--Additions to Metals
in Use and Average Annual Addition by Decade,
1900-1960 .. .. 195

25. Total Iron and Ferroalloy Metals--Apparent
Consumption--Additions to Metals in Use and
Average Annual Addition by Decade, 1900-1960. 198

26. Copper and Iron in Use--Adjusted for 1860-1900
Production. . .. 201

27. Average Annual Rate of Growth in Iron and Copper
in Use Relative to Gross National Product,
1920-1960 and 1900-1960 ... 202


vii














LIST OF ILLUSTRATIONS


Figure Page

1. Consumption of Purchased Scrap in the United
States, 1915-1952 and Output of Pig Iron and
Steel, 1915-1962. Data for 1953-1962 Represent
Receipts of Purchased Scrap by Consumers ... .186

2. United States Production of Refined Copper from
Primary and Secondary Source Materials and
Production from Old Scrap, 1910-1960 .. .187

3. Copper in Use, 1920-1960 .. 194

4. Apparent Consumption by Five-Year Averages of
Iron, 1900-1960 ... 196

5. Iron in Use, 1920-1960 ... .197

6. Five-Year Averages of Ferroalloys Apparent
Consumption, 1900-1960 ... .199

7. Iron and Ferroalloy Metals in Use, 1920-1960 200


viii









Abstract of Dissertation Presented to the
Graduate Council of the University of Florida in Partial Fulfillment
of the Requirements for the Degree of Doctor of Philosophy

SCARCITY OR PLENTY; THE ROLE OF METAL RESOURCES
IN THE GROWTH OF THE UNITED STATES ECONOMY, 1860-1960

By

Melvin W. Harju

August, 1972

Chairman: William F. Woodruff

Major Department: Economics


According to a great deal of contemporary thinking,

the nations of the world might almost reasonably be

divided roughly into two groups, the rich and the poor,

or, more euphemistically, and more abstractly, the

developed and the developing. Much economic theory has

been generated, particularly since the Second World War,

to account for observed differences in relative material

wealth; and economic growth and development, with

industrialization as a goal, has come to be viewed as an

on-going process. With that end in mind, theorists have

attempted to generate, whenever possible, universally

applicable explanations of growth and development. While

such theories are valuable, they suffer from limitations

not always made explicit. The peculiarities of different

peoples and regions rarely are considered and theories

often are divorced almost entirely from any historical

or geographical consideration.








The argument presented in this thesis is that

economic progress can be viewed only as economic change

and that economic change cannot be divorced from the

particular circumstances of people, place, and time. In

this sense, the economic experience of the United States

during the past hundred years, from which so many develop-

ment schemes have been abstracted, must be viewed as

exceptional; not least because of its initial abundance

of natural resources; much of what has come to be called

economic growth really has represented nothing more than

the rapid exploitation of natural wealth; to a large

degree, production has represented extraction.

Demands for resources encompass a wide variety of

materials; but no resources have been more important to

the current machine age than metals. Of the various metals,

iron and copper have been particularly important, not only

because of their use in many different kinds of production,

but also because they are used in great quantity. They

represent the bulk metals used for production in a

modern economy. In this study an analysis of their

supply and disposition serves to illustrate the role metals

extraction has played in the growth of the United States

economy.

In analyzing the relation between production and

the extraction of metals, overall levels of output and

changes in output by categories are compared over the past

century. With the changing nature of production estab-

lished, metals needs relative to production are then








examined with particular attention given to the demand

for new metals inputs and for ores. Factors relating to

the supply of metals are then considered, and finally,

increases in production and produced wealth are related

to the available supply of metals to United States

industries during the century.

In the course of this study, the economic growth

of the United States during the past century is considered

from a new perspective. The same basic question asked

by other studies underlies this one: Why is the United

States so rich while much of the rest of the world is so

poor? But rather than asking what parts of the American

experience might be shared with others, the purpose here

is to examine to what extent the American experience might

have been fundamentally unique. The conclusion of this

study is that while other factors have been important to

United States economic growth, resources have been parti-

cularly so. By forgetting them and assuming instead that

the economic growth of the United States resulted

primarily from cleverness, prescriptions may have been

presented to poor countries for a kind of growth they may

not be able to achieve.
















CHAPTER I

PROSPECT: SOME ASPECTS OF ECONOMIC
GROWTH AND RESOURCES


According to a great deal of contemporary

thinking, the nations of the world might almost reason-

ably be divided into roughly two groups, the rich and

the poor; or, more euphemistically, and more abstractly,
2
the developed and the developing. Much economic theory

has been generated, particularly since the Second World

War, to account for probable causes of observed differ-

ences in relative material wealth. Economic growth and

development, with industrialization as a goal, has come

to be viewed as an on-going process; a new genus of

human activity begun by a few to be shared eventually by

all the peoples of the world in greater or lesser degree.


Cf. Barbara Ward, Lenore N. Anjou, and J. D.
Runnalls, eds., The Widening Gap: Development in the
1970s (New York: Columbia University Press, 1971).

Lacking analytical utility, these terms have
created more problems than they have solved. Cf.
Charles Bettelheim, Planification et Crossance accelere
(Paris: Francoismaspero, 1967), chap. iii, for a most
powerful criticism of the term "underdeveloped country."

Typical of the view that the world is engaged
in a race to a Western goal of industrialization is David
S. Landes, The Unbound Prometheus, Technological Change
and Industrial Develooment in Western Europe from 1750 to
the Present (New York: Cambridge University Press, 1969).
Like the work of Marx and Rostow, Landes' book is

1 -







2

With that end in mind, theorists have attempted to generate,

whenever possible, universally applicable explanations of

growth and development; alas, general theories have had to

rely upon specific experience for their support and while

such theories are valuable, they suffer from limitations

not always made explicit. The peculiarities of different

peoples and regions rarely are considered and theories often

are divorced almost entirely from any historical or geo-

graphical consideration.

Theories are indispensable in organizing thinking

so that sense can be made of an otherwise senseless

plethora of disassociated facts; they are vital to under-

standing. But theories are necessarily abstractions;

they involve ideal, disembodied concepts of complex and

real phenomena. Of necessity, they present reality in

an unreal light. The danger is that theories, meant to

describe the world in which we live, may take on the face

of reality and come to be mistaken for the reality they

only attempt to describe. As a result, the world may

come to be viewed as more ordered, rational, and

predictable than it really is.

Perhaps it is really a matter of the interminable

argument about first cause. Outside a totalitarian State,

we do not view economic development as arising primarily


essentially messianic in character. It knows the goal
which all societies should seek. Marx's "communism,"
Rostow's "self-sustained growth," and Landes' "industrial-
ization" are prophecies.








out of a theory, but theory out of economic development.

We like to think of theory not as creating experience,

but helping us to understand experience. At best, the

rationalist mind of pure theory is an imperfect medium to

solve a development problem, which is so very much based

upon unique historical experience and empirical data.

Similarly, numbers and trends should be viewed

with caution and accepted only for what they are--the

results of underlying phenomena, and not the phenomena

themselves.

one might suggest that the statistician needs
to be receptive to the results of the analytical
theorists, to the suggestions of the student of the
historical scene, and even to the claims and clamor
of the reformers. And he must beware especially of
the danger of identifying mechanically derived lines
with trends; calculated ratios with immutable and
natural laws of constitution, and correlation
coefficients with inviolable laws of causation and
association.(5)

In recent months all these fears have been re-

echoed by leading members of the profession. If economic


The contrast is most sharp in the two disci-
plines anthropology and economics. The former is still
essentially empirical; the latter has become the most
abstract and mathematical of all the social sciences. If
at the moment there is a certain disillusionment in the
economics profession, perhaps it is because we are
expecting of theory that which it cannot give.

5Simon Kuznets, Economic Change, Selected Essays
in Business Cycles, National Income, and Economic Growth
(New York: W. W. Norton & Company, Inc., 1953), pp. 294-95.

Cf. Wassily Leontief, "Theoretical Assumptions
and Nonobserved Facts," American Economic Review, LXI
(March, 1971), 1-7; John G. Gurley, "The State of
Political Economics," American Economic Review, Papers
and Proceedings of the Eighty-third Annual Meeting of the









growth could be considered in a timeless and spaceless

context with every element, including man himself, neatly

categorized and controlled, problems of economic growth

and economic change would be considerably less vexing.

But men and circumstances are not easily categorized or

controlled; history does not follow a predictable course;

nor is it inevitable. While production is a technical

process, economic change is more an historical process of

evolution than a theoretical or mechanical process of

change (indeed, how many of our problems arise because we

do think mechanistically). It may depend as much upon

strength of will and good fortune, concepts not generally

included in theoretical analyses, as anything else.7

Only in theory can mankind be viewed as "developing"

collectively along a known path to a known goal. In

reality each people is participant in and heir to its

own unique historical experience. The experience of

economic growth has been common to only a few. Perhaps

the one thing we may be sure about is not growth, not

decline, but change.


American Economic Association, LXI (May, 1971), 53-62;
F. H. Hahn, "Some Adjustment Problems," Econometrica,
XXXVIII (January, 1970), 1-11.

A technical view of man's actions in the world
follows closely in the Cartesian tradition, which works
very well when considering the properties of atoms or
the movement of stars. In part, men's actions also are
predictable, but only in given social and historical
contexts, and then not entirely. When one extends the
analysis to the predictability of changes in the contexts
themselves, the problem becomes still more difficult. It
is common prudence to look ahead, but who really can
predict the future?









Yet the extraordinary rate of what we have come

to understand as economic growth of a few wealthy nations,

particularly of the United States, probably has been more

important than any other single factor in stimulating

the idea of universal economic progress. The idea of
8
progress, Western in origin, found its greatest expression

and support in the United States as did its underlying

motive force, the belief in and the employment of applied

technology, exhibited principally in an ability to create

more and more from less and less. Technology and its

teachinghave come to be accepted almost without question

as a principal ingredient of material progress and the

key to its continuance, replacing or supplementing trade

and capital accumulation in that regard as a primum

mobile of economic growth. It hardly needs stressing

that technology--as such--can only be seen in a museum.

All these concepts, theoretical and abstract in

themselves, rest upon an equally abstract belief in


Progress may be thought of as change which is
directed or tends toward some ends or goals generally
believed to be "good." Progress and economic development
often have been considered as being synonymous, although
the recent reemergence of concern for ecology and for
the social quality of human existence have called that
view into question.

Cf. Albert O. Hirschman, The Strategy of
Economic Development (New Haven and London: Yale
University Press, 1958), chap. i. "Preliminary Explora-
tions," sec., The Search for the Primum Mobile, pp. 1-7.






6

progress; a belief that has not always characterized men's

thoughts. Greek and Roman writers thought that a cyclical

state (rather than continued progress toward a better

human condition) more closely described the affairs of

man. The passage of time was thought to yield deteriora-

tion, a descent from a golden age of simplicity that

could be reestablished only by divine intervention;

thence, again, from better to worse to better to worse--

the whole process yielding an endless series of identical

cycles. The accumulation of knowledge might allow philos-

ophers to free their thoughts and enjoy knowledge for its

own sake, but the application of that knowledge to the

betterment of mankind's condition was not generally

conceived.

While historical parallels are dangerous, it is

worth realizing that we are not the first to have held

an overwhelming belief in the power of technology to

improve and control our environment. Aeschylus also

believed "in man's unlimited capacity for controlling

nature, a confidence inspired by a spate of extraordinary

[technological: successes .. ." But the belief in the

power of technology soon waned. We find in Euripides

the doubt and pessimism of intellectuals
during the last third of the century in face
of the increasing exploitation of the new
technology by militarists and profiteers in wars
of conquest and plunder.(10)


lArthur D. Kahn, "The Greek Tragedians and
Science and Technology," Technology and Culture, XI
(April, 1970), 133.









To thinkers of the Middle Ages, life on earth was

an interlude standing between the vastness of eternity

and the final end of heaven or hell. The purpose of

this life was to prepare for the next. The end of the

world might be imminent.

A life of increasing material well-being for all

people was for the most part beyond comprehension;

although certain individuals might become wealthy and

powerful, or new wealth might be gained through fortuitous

discovery or conquest. The past revealed no process in

a material sense. The future, what little of it there

might be, looked no better. There was little reason to

believe it would be.

It was not until commerce, invention, and natural
science emancipated humanity from thralldom to the
cycle and to the Christian epic that it became
possible to think of an immense future of mortal
mankind, of the conquest of the material world in
human interest, of providing the conditions for a
good life on this planet without reference to any
possible hereafter. In due course, when conditions
were ripe, the idea of progress arose in the
Western World, (11)

As exploration in the sixteenth and seventeenth

centuries revealed the existence of new lands, and as

advances in science yielded new knowledge, conditions

were laid for the acceptance of continued progress as a

possible circumstance of human existence. Belief in

progress rests heavily upon experience; it represents a


J. B. Bury, The Idea of Progress: An Inquiry
Into Its Origin and Growth, intro. by Charles A. Beard
(New York: Dover Publications, Inc., 1955) p. xi.








favorable view of past changes projected optimistically

into an indefinite future. The accumulation of scien-

tific knowledge implied future progress in scientific

thought and there appeared good reason to believe that

such knowledge was capable of indefinite advancement.

The application of scientific knowledge in the form of

applied technology2 to the problems of physical

existence could yield progress for the whole of mankind.

Belief in the operation of fortune and the

intervention of Providence came to be supplanted by the

belief that man might determine his own destiny, or

even that he might be acting only as a role-player in

a deterministic system that would of its very nature

yield constant progress. A rational, mechanical,

technical view of man and his surroundings appeared

and flourished even as the wonder of science laid bare

the secrets of the physical world and as its counterpart,

technology, improved the material lot of man.

It is Cthe. dynamic character of technology that
makes it so significant for the idea of progress.
The latter assumes that mankind has been slowly
advancing from a crude stage of primitive civili-
zation; the former demonstrates what can be
accomplished by exhibiting its achievements and
disclosing its working methods. What was once
Utopian becomes actuality. What appears to be
impossible may be surmounted. The ancient theory

12
12Our purposes will be served by defining
technology as the "state of the arts" as they exist at
any one time, including both ideas and methods as well
as applied inventions.








that mankind revolves in a vicious circle is
destroyed by patent facts. The mediaeval notion of
a static society bound to rule-of-thumb routine is
swept into the discard by events. (13)

Encouraging this movement was the Industrial

Revolution which in the eighteenth and nineteenth

centuries affected much of Western Europe and the Northern

parts of the United States. The role of the machine in

increasing the wealth of the Western world was too

apparent to be disbelieved.4 The belief in progress

through a machine economy became widespread. The goal

of society came to be seen as further industrialization

and the idea of progress was elevated from the status

of belief to that of fact. Yet progress was not

necessarily continuous.

It is quite easy to fancy a state of society, vastly
different from ours, existing in some unknown place
like heaven; it is much more difficult to realize
as a fact that the order of things with which we
are familiar has so little stability that our actual
descendants may be born into a world as different
from ours as ours is from that of our ancestors
of the pleistocene age.

But if we accept the reasoning on which the dogma
of Progress is based, must we not carry them to their
full conclusion? In escaping from the illusion of
finality, is it legitimate to exempt that dogma
itself? Must not it, too, submit to its own negation
of finality? Will not that process of change for which
Progress is the optimistic name, compel "Progress"
too to fall from the commanding position in which it
is now, with apparent security, enthroned?(15)


13Ibid., p. xxiii.

But notice William Woodruff and Helga Woodruff,
"Economic Growth: Myth or Reality; The Interrelatedness
of Continents and the Diffusion of Technology, 1860-1960,"
Technology and Culture, VII (Fall, 1966).

15Bury, Idea of Progress, pp. 351-52.






10

Whether or not the idea of progress may someday

be dethroned, and perhaps with it our worship of technology,

cannot be predicted; progress is not necessarily an

established fact of nature, a trend to be carried into

the indefinite future. Progress resulting from specific

circumstances of the past does not imply progress in the

future. Views of the past may rest upon fact; views of

the future must rest upon speculation. The idea of

progress might die from one or more of several causes.

It might die from neglect brought on by the embrace of

some alternative idea based upon another view of what is

good and what is not; by a deep prevading pessimism or

by the imposition of physical, social, intellectual, or

spiritual constraints. Technology, upon which belief in

indefinite progress has been based, might be capable of

indefinite expansion, but progress itself may not.

The only thing known to history is change, not

necessarily of a progressive nature, and change in itself

cannot be separated, as the French historian Taine so

long ago said, from place, time, and people. There can

be little doubt that technology and science have changed

some lives substantially from what they might have been;

their use, economically speaking, has proved immensely

profitable to some and might prove so to others. But

this still does not permit the experience of the United

States, or of a few other nations, to be used as an

example of what might be wrought elsewhere. Those who








have experienced substantial economic growth in recent

times have done so in special circumstances and conditions.

No single factor will guarantee wealth; much depends upon

providence and circumstance.16

This is particularly true of the economic history

of our own country. When the United States, or what

was to become the United States, was settled by the

immigrants and their descendants who eventually populated

it, the land included wide fertile plains, a mild climate,

ample wood, clear water in abundance, and a vast mineral

store from which to erect a mighty machine culture

formed in iron and steel and powered by falling water

and burning fuels. Not only were resources extremely

plentiful and of good quality, but they were exceptionally

handy. Never in the history of mankind has any group

of men ever obtained possession of natural resources

on this scale. The wonder is not that the nation's

economy grew; given the people (especially their mental

attitudes), the land, and the times, it would have been

a greater wonder had it not grown.



Only very recently have we come to appreciate

the unique circumstances of America's growth; only very


How else shall we explain the richness of
certain economies south of the Sahara in recent history,
if not through chance? i.e., strikes of gold, diamonds,
copper, and other valuables.






12

recently have we come to appreciate the role of natural

resources in the development of the United States economy.

Compared to the emphasis placed upon income, saving, and

trade in conventional literature, the role of natural

resources has been a neglected subject.

The poor are poor, it would seem, because they

have low incomes. They have low incomes because they are

poor. Inadequate incomes generate inadequate saving

which produces inadequate investment in both physical

and human capital. These factors together conspire to

keep the poor nations poor, and whether the way out of

this dilemma lies in the engineering of a "big push"

for the economy or in "unbalanced growth" is anybody's

guess. The important thing for us is that the problem

is seen more from the side of effective demand than

from effective supply. The implication is that sufficient

resources are to be had if only they could be employed.

Swayed by the optimism engendered by a belief in

progress, perhaps as a result of Western experience,

we have come to focus attention more upon questions of

opulence than upon the time-honored question of scarcity.

Yet, until very recent times, it was scarcity and not

plenty that was at the center of economic theory.

If we may now direct attention from the

demand to the supply side of the picture, the neglect

of natural resources is still apparent. Although

production generally is thought to depend upon the

numbers and qualities of people, the quantity and quality






13

of capital, the amount, quality, and location of resources,

and upon the state of technology, in fact most attention

has been devoted to considerations of capital and capital

formation; and, to some degree, to questions regarding

technology. Almost any text in economic history, for

example, might include sections dealing with capital and

capital markets, with technology and industry, with

transportation systems, and to some extent, with people.

It would deceive the reader to pretend that

the importance of natural resources has been overlooked.

Many historians try to deal with it. The longer accounts

make the timeworn treatments of iron, copper, coal and

petroleum, and sometimes electricity. The customary

puddling, Bessemer convertor and open hearth treatment

is given to steel. The Gogebic, Vermillion, and Mesabi

iron ranges are given occasional and brief mention. The

necessity of adequate transportation facilities and the

fortunate juxtaposition of iron, coal, lakes, and fertile

farmland sometimes are noted. The change in the United

States trade position in recent times, from that of

being a net exporter of raw materials, is fairly common

knowledge; however, the reader is usually left with the

impression that the productive might of the United States

industrial machine has simply outstripped the ability of

the raw material producing sector to meet the nation's

needs; whereas a large part of the cause of the drift

actually lies in the relative exhaustion of the richest

domestic ores.








Somehow the connection between increases in

national output and wealth and consumption of resources

has been lost. It is almost as if an abundance of natural

resources were considered to be a "given datum," there-

after to be forgotten. The fact that we have on the one

hand accepted the existence of extensive resources and

on the other forgotten the relation of resources to

economic growth weakens our efforts to help the economic

growth of others.

It is our belief that the poor are poor because

they are poor, and the rich are rich because they are

rich; and that at least part of the answer to the

question of why some are rich and some are poor may be

found in the fact that some had more to work with than

others. It is impossible to make something out of

nothing; much better to live in a verdant land, or

claim the fruits of that verdant land, than to live in

a desert (unless there are natural resources, i.e., oil,

beneath the barren wastes). Our trouble in all this

is that we live in an abstract and rational age where

man and his mind are regarded as the principal instru-

ments of change; the fruits of men's efforts are thought

to be principally the products of thought and effort,

instead of the products of thought and effort applied

to nature.

Not that it is our intention to belittle the

role of man. It really is a matter of emphasis.








Obviously, economic activity is human activity and

resources taken by themselves come to nothing. They gain

importance only in reference to the ends to which they are

put; of course, there is truth in the statement that
17
resources are not, they become; of course, an abundance

of resources will not in itself lead to an abundance of

material wealth (any more than any other important

factor, taken alone, would). But in economic growth,

having more resources is better than having less. This

is particularly true of minerals vital to this mechanical

age. As one writer puts it:

The distribution of ores and minerals has had a
profound effect on the migration of peoples and on
the settlement of particular lands. It has been a
dominant element in the growth of states in which
possession or content of such deposits has led to
the creation of vast industrial enterprises.
Exploitation of these resources has resulted in
new patterns of life in many old regions, and
their exhaustion in some places has forced adjust-
ments of a far-reaching sort that at times have had
disturbing consequences.(18)

In 1902, at the time of the Census Bureau's

report, these consequences were, for the United States at

least, far in the future. Said the report:

This rapid rise of the United States to the first
position among manufacturing nations is attributable
to certain distinct causes, natural and otherwise,


17Erich W. Zimmerman, World Resources and
Industries (New York: Harper & Bros., 1951).

18Donald H. McLaughlin, "Man's Selective Attack
on Ores and Minerals," in Man's Role in Changing the
Face of the Earth, ed. by William L. Thomas, Jr. (Chicago:
University of Chicago Press, 1956), p. 852.








five of which may be definitely formulated as
follows:

1. Agricultural resources
2. Mineral Resources
3. Highly developed transportation facilities
4. Freedom of trade between states and
territories
5. Freedom from inherited and over-conservative
ideas.

A study of these causes affords an explanation of
the great development of manufacturing in the past,
as well as an indication of its possibilities in
the future .

In the second place, the United States produces
nearly every mineral required for manufacturing
industries. In most of these the supplies appear
to be sufficient for years to come, and are obtain-
able at prices which compare favorably with prices
in other parts of the world.(19)

But in the course of subsequent economic growth,

much of an initial abundance of natural wealth has been

consumed. The first official note of anxiety was

sounded by the President's Materials Policy Commission

to President Truman in 1952.

A hundred years ago resources seemed limitless and
the struggle upward from meager conditions of life
was the struggle to create the means and methods
of getting these materials into use. In this
struggle we have succeeded so well that today,
in thinking of expansion programs, full employ-
ment, new plants, or the design of a radical new
turbine blade, too many of us blankly forget to
look back to the mine, the land, the forest: the
resources upon which we absolutely depend. So


19U.S. Department of Commerce, Bureau of the
Census, Twelfth Census of the United States Reports,
Vol. VII, Pt. I, United States by Industries (Washington,
D. C.: Government Printing Office, 1902), pp. LVI-LIX,
reprinted in Louis M. Hacker, Major Documents in American
Economic Histor (Princeton, New Jersey: D. Van Nostrand
Co., Inc., 1961) pp. 146-47.






17

well have we opened our lines of distribution to our
remotest consumers that our sources are weakening
under the constant strain of demand. As a Nation,
we have always been more interested in sawmills than
seedlings. We have put much more engineering thought
into the layout of factories to cut up metals than
into mining processes to produce them. We think
about materials resources last, not first.(20)

A stronger note was expressed in 1968 by Charles

F. Park, Jr., a professor of economic geology, who wrote:

People have learned to use mineral resources
extensively only during the present century; they
have used them to establish a standard of living
undreamed of prior to World War I. But minerals
are present only in finite quantities. The world
cannot continue to use them at ever and rapidly
increasing rates without creating tremendous
problems. Whereas in the past many minerals were
at times in troublesome surplus, it now appears
that the world is about to enter a period when
shortages of minerals will become increasingly
common. Critical shortages of several minerals
may well develop within the next decade.(21)

And yet, in spite of these warnings, we find in

the 1970s that our focus remains upon production, capital

accumulation, changes in technology, and sufficiency of

demand, rather than upon extracting and using the

material wealth of the earth. When we talk about resources

at all we are concerned not with their scarcity, but with

the emergence of ecological and environmental effects.

This comes as a natural result of the emphasis in thinking

that has come to be placed upon rational, abstract


20President's Materials Policy Commission,
Resources for Freedom, I (Washington, D. C.:
Government Printing Office, 1952), p. 1.

2Affluence in Jeopardy (San Francisco: Freeman
Cooper & Co., 1968) p. vi.








processes. During the eighteenth century, lack of

capital was a very vital concern for development, as

it still is; capital has always been scarce. The

development of Great Britain made use of capital

furnished by merchants and used resources first from

home and then from abroad. The later development of

the United States received at least some help from the

British in terms of finance capital and was facilitated

by the utilization of vast amounts of resource wealth.22

Capital was scarce, resources were abundant. Small wonder

that the gaze of theorists has remained focused upon

capital accumulation and technology, impressive as the

changes have been in those fields or that resources

have not gained much attention until relatively

recently; nobody bothers with things that are abundant.23

But of late, capital has accumulated very rapidly in

some places, at least partly as a result of the very


22Not all money transfers represent transfers
of physical capital, of course. Cf. A. K. Cairncross,
"Investment in Canada, 1900-1913," in The Export of
Capital from Britain 1870-1914, ed. by A. R. Hall,
Debates in Economic History, gen. ed. Peter Mathias
(London: Methuen & Co., Ltd., 1968).

230n the other hand, things which are scarce may
receive almost reverential consideration such as that
given to water by Arabs. Until they invaded areas more
plentifully supplied, life had been a struggle to find
water. When they did, they left their mark with the
fountains of Andalusia.

"This fountain is like a believer in ecstacy,
rapt in prayer; and when the fountain shifts, it is the
worshipper who stoops to genuflect and resumes his prayer."
--Unknown poet of Andalusia

"Andalusia," Encyclopaedia Britannica, 1971, I, 887.







19

industrialization and productive advance it is thought to

have caused. At the same time, stores of natural wealth

have diminished until further advance may be limited at

least as much by resource scarcity as by sufficiency of

capital.

Now all that we have said about the natural

resources as a whole is doubly true when we narrow our

gaze to the mineral resources of the earth. Our machine

economy and our desire for ever greater progress have

combined to consume the mineral wealth of the earth at

a rate no longer feasible. There simply are not the

mineral resources available to allow the consumption

trends of the past exceptional century to continue.

The amount of bituminous coal taken out of the ground

in 1950 was two and a half times greater than the

amount taken out in 1900. For copper the figure was

three times more, for petroleum, thirty times more.

More metals and mineral fuels have been used since

1914 by the United States alone than the whole world

used in all of history prior to the First World War,

and that tremendous increase in materials demand has

begun to stretch the imaginations of those whose

business it is to find and take those raw materials

from the earth.

If stores of minerals were limitless there

would be no problem; nor would the question of their

employment in the productive process be one of interest









to us. But they are not limitless. A ton of iron

taken from the earth is gone from the earth. A barrel

of oil or a volume of natural gas once used is gone for

good.

The most disconcerting feature of minerals is their
exhaustibility. They are wasting assets. They are
completely consumed in use if they are fuels; they
are at least partially dissipated if they are
minerals. Therefore the questions, "How large are
the reserves? How much is left in the ground? What
will happen when it is gone?" are vital questions
of life and death. For ours is truly a mineral
civilization which stands and falls on its capacity
to produce staggering amounts of some minerals and
varying quantities of many others.(24)

The problem has not been lessened by increased

production of things other than minerals. The larger is

the amount of production undertaken for defense, manufac-

turing, and services, the greater is our dependence upon

minerals, not less. A large superstructure of activities

has been built by using minerals. It is maintained by

their production.

One significant thing about American experience

over the past century is the extraordinary extent of its

natural wealth, and the unprecedented speed with which

those resources have been (and are being) consumed. The

former helps to explain our wealth; the latter, our

growing concern with the exhaustion of natural resources.

In this respect the United States may have passed through

a unique phase of its history; so much of what it has

experienced may have been based on non-recurring phenomena.


24Zimmerman, World Resources, p. 439.






21

Certainly, the American people have passed into an era of

material progress the likes of which had never been seen

before (and might not be seen again). Material progress

of the kind known during the past century may have been

the result more of peculiar circumstance and natural

abundance than of general laws. We cannot be certain

that progress of the same kind can continue unabated;

nor is it certain that the same kind of progress can be

shared by others who find themselves less well endowed.
















CHAPTER II

THE PROBLEM EXPRESSED: THE NATURE
OF OUR INQUIRY


It has been our argument that economic progress

can be viewed only as economic change and that economic

change cannot be divorced from the peculiar circumstances

of people, place, and time. In this sense, the economic

experience of the United States during the past hundred

years must be viewed as exceptional; not least because

of its initial abundance of natural resources.

The United States was rich in natural resources

in 1860. By the 1960s, although the United States

remained a rich land, a great deal of its natural wealth

had been consumed. Its position with regard to some

very basic minerals, such as iron, which are needed to

maintain a high level of domestic output, had changed

dramatically. In fact, increased production had been

achieved through increased extraction. Herein lies the

aspect of economic history which it has been our purpose

to study. We are concerned to examine more closely the

relationship between production in general and the

extraction of certain materials, namely iron and copper,

within the United States during the past century, and to

determine the extent to which increases in production have

22 -






23
in fact represented consumption of irreplaceable wealth.

We have already said that nothing comes from nothing.

From what then, in terms of the consumption of our metal

resources, did our wealth come? By better understanding

the relationship between these aspects of production and

consumption, we might also gain further insight into the

potential ability of others to emulate the American

experience.



Before going further, it is necessary to take a

closer look at some important terms, such as "production,"

"resources," and "abundance."

Production is usually defined as the creation

of utility, the making of goods or services for the

satisfaction of human wants; but, "production" and

"productive activities" are very ambiguous terms with

which to deal. Production involves the creation of

utility but it ultimately is concerned with the manip-

ulation of materials. As such, production deals not

only with creation but with conversion. Utility is

created. Materials are converted. Substances are

rearranged to suit men's fancy through productive effort,

but the materials from which final items are made must

exist before any production can take place. Ideas and

skills, with nothing to embody them, remain ideas and

skills and nothing more.









Man cannot create material things. In the mental
and moral world indeed he may produce new ideas;
but when he is said to produce material things, he
really only produces utilities; or in other words,
his efforts and sacrifices result in changing the
form or arrangement of matter to adapt it better to
the satisfaction of wants. All that he can do in
the physical world is either to readjust a log of
wood into a table; or to put it in the way of being
made more useful, by nature, as when he puts seed
where the forces of nature will make it burst into
life. (1)

Almost all actions lead to the satisfaction of

wants, else they would not be undertaken; therefore, any

number of activities may be thought of as productive.

But some goods and services, and hence the types of

productive activities which generate them, are more

essential than others, and the most essential is the

provision of food. It has been said that man can be

neither prophet nor poet unless he has relatively

recently had something to eat.

A host of other goods and services comes to

mind as being essential to greater or lesser degree

after the provision of food. Goods that furnish shelter,

clothing, transportation, and protection from natural

disaster and from other people; and services that

provide social situations for enjoyment, education,

entertainment, and leisure are needed. But man the


1Alfred Marshall, Principles of Economics (8th
ed.; Toronto: Macmillan Company, 1966), p. 53.

2The importance of food apparently has been
partially forgotten by some who would place great emphasis
upon the production of manufactured goods, supposedly
because manufacturing is more "productive" in a monetary
sense.









animal must be provided for first, then man the man.

The provision of services ultimately relies upon the

"production" of goods and the production of goods

involves the application of men's energies to converting

the materials of the earth into useful forms.

Materials used in that production may be defined

for our purposes as resources. They can be divided into

three categories: those needed for food, for energy,

and for structure. Since not all materials are used in

production, not all materials are resources, and certain

materials used in production at particular points in

time may not be used as such at other points in time.3

The distinguishing characteristic of a resource, then,

is not just that it is a material, but that it is a

material used in production.

Finally, a resource is abundant or scarce

depending upon the demand for it relative to the amount

available. A given volume of material may be thought

of as abundant if the demands made for it are slight,

or scarce if the demands for it are great. Assuming

a given demand, however, a resource is scarce if it

exists only in small quantities and/or is difficult to

obtain, or abundant if it exists in relatively large

quantities easily obtainable. Without regard to ease


Examples of materials that only recently have
become resources are crude petroleum and radioactive
fuel.








of acquisition, a resource may be thought of as scarce

if the amount ultimately available relative to demands

is small.



Demands for resources encompass a wide variety

of materials including water, land, air, and the fertility

of the soil, woods and fibres and fuels, and many others.

The effects of production on each of these and their

effects on production would yield a separate story for

each; but no resource has been more important to the

current machine age than metals.

Increased dependence upon machines and other

heavy structures has resulted in an increased dependence

upon metals used in their construction. Because of this

increased dependence an examination of the relationship

between expansions in production and wealth and the

supply of raw metals taken over time is important and

may reveal the extent to which the prodigious rate of

economic growth of the United States during the past

century represented the extraction of initially abundant

but limited resources.

But not all metals are equally important, and

since we are concerned with a general relationship

between metal resources and production, our purposes

will be served by considering only the most important

metals. In terms of quantity and use some metals are

of only marginal importance, and their inclusion would








serve only as a supplement to the current undertaking.

Certain other metals, such as nickel, vital to the

production of jet engine parts, are employed in relatively

small quantities and their uses are specific enough to

be handled as particular problem areas.

Iron and copper, on the other hand, are repre-

sentative of two broad classes of metals, ferrous and
4
non-ferrous. They are important not only because of

their use in many different kinds of production, but

also because they are used in great quantities.

Iron is the material out of which most machines

and heavy structures are built. Copper has been an

important building block of our electrically oriented

technology, used in the production of electrical

circuitry and electrical parts. These metals represent

the bulk metals used for production in a modern economy

and careful analysis of their supply and disposition

will serve us well in determining the role metals have

played in the growth of the United States economy.



In analyzing the relation between production

and the extraction of metals, we shall first consider


Metals generally are divided into categories
which include the ferrous metals (those related to the
production of steel), and the non-ferrous metals. Non-
ferrous metals are further divided into the "base metals,"
copper, lead, tin, and zinc; and the "light metals,"
including aluminum and magnesium. The most important of
these in terms of volume are, of course, iron, copper, and
aluminum, with extensive use of aluminum being a relatively
recent development.








the ways in which production has changed within the

United States during the past hundred years. Overall

levels of output by categories can be compared over

that period to establish relative changes in the quantity

and types of production that occurred.

Having established the changing nature of

production over time, we shall then examine metals needs

relative to production with particular attention paid to

the demand for new metals inputs and for ores.

Next comes the problem of finding the sources

from which metals have been drawn, either domestic or

foreign.

The final problem is one of relating increases

in production and produced wealth, through the resulting

increases in the demand for metals to the available

supply of metals. A meaningful statement then can be

made concerning the role of abundant resources in

allowing the people of the United States to enjoy vast

increases in income and to accumulate great quantities

of produced wealth. That relationship and a look at

the current situation might yield a hint for the future.















CHAPTER III

THE COURSE AND CHANGING NATURE OF UNITED STATES
PRODUCTION AFTER 1860--AN OVERVIEW


It is difficult to grasp completely the amount

of economic change that has occurred within the United

States in the past hundred years or the speed at which

it has taken place. Only two adult lifetimes, put end

to end, have passed since 1860, while two thousand years

separates today's man from the birth of Christ and the

power of Rome, four thousand from the strength of the

Egyptian empire, and ten or twelve thousand from the

time when men first became husbandsmen and herdsmen.

Yet, in some respects, the lives men lived in 1860, the

sorts of things they produced, and the methods by which

they produced them were as similar to ancient modes as

to those of present day.

The economic progress of the United States since

1860 involved radically new products, machines, and

production methods as well as the production of greater

amounts of goods and services. Advances in quality, in

product types, and in production techniques complemented

increased production levels that put more of the staples

of life as well as luxuries into the hands of common

people.

29 -









The Gross National Product per capital for the

period 1869 to 1873 amounted to $165 compared to about

$4,500 currently. But problems associated with the com-

parison of GNP for any two years, especially when those

years are widely separated in time, are both great and

well-known.2 Changes in product type and quality since

1860 have alone been sufficient to reduce the validity

of such estimates considerably. A more meaningful

contrast might be accomplished by a simple sketch of

the incomes people earned in 1860 and of retail prices

they paid.

In 1860 less than four percent of the people

engaged in industry worked an eight to nine hour day.

Only ten percent labored less than ten to eleven hours,

and fully a third worked more than eleven hours.3 For

their efforts, common laborers might receive a daily

wage ranging from $ .65 to $1.50 depending upon the


1U.S. Department of Commerce, Bureau of the Census,
Historical Statistics of the United States, Colonial Times
to 1 (Washington, D. C.: Government Printing Office,
1960), p. 139, Series F 1-5, Kuznets estimates.

2See, for instance, George J. Stigler, Trends in
Output and Employment (New York: National Bureau of
Economic Research, Inc., 1947), for an interesting
discussion along these lines.

Joseph D. Weeks, Superintendent of the Census,
Report on the Statistics of Wages in Manufacturing
Industries; With Supplementary Reports on the Average
Retail Prices of Necessaries of Life and on Trades
Societies, and Strikes and Lockouts, Vol. XX (Washington,
D.C.: Government Printing Office, 1886), pp. xxix, xxxi.








section of the country and the industry in which they

worked. A dollar per day was most common. Carpenter's

wages ranged from $1.50 in some industries to as high as

$2.50 per day in ship carpentry. Blacksmiths could

expect to earn about $1.50 per day, and the wages of

mechanics ranged from approximately $1.10 to $2.50 per

day while the average was slightly under $2.

The money did not go far. Some idea of retail

prices of various basic commodities may be gained from

the data in Table 1.


Ibid., pp. 517-63.

Of the 10,530,000 working population in 1860,
some 6,210,000 (or 59%) were engaged directly in agri-
culture and 1,930,000 (or 18%) were engaged in manu-
facturing and hand trades and construction. Services
of various types engaged another 1,310,000 people (or
12%), and transportation, trade and finance accounted
for 780,000 (or slightly over 7%). Only 170,000 found
employment in mining. Historical Statistics, p. 74,
Series D 57-71.

In 1869, 22.2% of national income originated
in agriculture, 20.3% in manufacturing and construction;
and, transportation, communication, trade and finance
accounted for 37.6%. Services of all kinds, including
government, accounted for 18.4% of national income.
(It is interesting to note in passing the disparity
that exists between the proportion of the working pop-
ulation engaged in each field and the amount of income
arising in those fields. The distribution of workers
by industry was not radically different in 1869 from what
it had been in 1860.) U.S. Department of Commerce,
Bureau of the Census, Long Term Economic Growth, 1860-1965
(Washington, D.C.: Government Printing Office, 1966),
Part III, p. 79, Table 4.















TABLE 1

REPRESENTATIVE PRICES OF SELECTED
COMMODITIES, 1860a


Unit of
Item Measure Prices

Cloth
Cotton Flannel, medium quality yard $0.11-$ 0.15

Groceries
Tea pound .62- 1.00
Coffee, roasted pound .10- .30
Soap, common pound .05- .12

Flour, Meats, Provisions
Beef, roasting pound .08- .14
Beef, soup pound .03- .08
Pork, fresh pound .08- .12
Flour, wheat, super-fine barrel 7.00- 8.50b
Flour, wheat, extra-family barrel 9.25- 11.00b
Potatoes bushel .50- .75

Other
Men's Heavy Boots pair 2.00- 4.50c
Coal Oil gallon .30- 1.00
House Rent, four-room month 5.00-
House Rent, six-room month 10.O0d


aSource: Weeks, Statistics of Wages


in Manufacturing,


Flour prices ranged between $4 and $6 in the
wheat states.

cPrices of boots ranged upward to $6 in
Cincinnati.

dRents were as high as $10 to $15 in St. Louis.


passim.









A pound of tea, surely a luxury item, required

as much as a day's pay to obtain. A bushel of potatoes

might cost a half-day's wages, and a pair of boots from

two to five day's pay, an amount equal to a full month's

house rent.

In general, material life in the 1860s was

sparse by today's standards. The types of products

generally offered to consumers were plain and basic;

and if adequate in quantity, they were not available in

overwhelming abundance.

The United States of 1860 was, of course,

primarily an agricultural nation, although manufacturing

was growing rapidly and the nation had become something

of a sea power. Machines had been introduced into

several kinds of production, in the making of clothing

and shoes and in food processing, for example. Some

mechanization had taken place in agriculture, notably

with the introduction of the reaper, the thresher, the

cotton gin, and the all-steel plow. Steam had been

applied to water and land transportation. But the

products of the nation were products of the soil, in

the main. Hard manual labor and common sweat were the

principal instruments of progress, and the relatively

few machines in existence were in the hands of producers,

not consumers. Within the next century, the face of

the country and the nature of production would change

entirely.5


5Qualitative changes in the nature of production











Stirrings of change abounded in the United

States in the 1860s. If the present offered challenge

and hard work, the future offered the promise of

substantial increases in material well-being along almost

every line. Agricultural production was increasing

rapidly and innovations were making their presence felt

heavily.

It appears from the returns of the last census,
that the ratio of increase of the principal
agricultural products of the United States has
more than kept pace with the increase of population.
Indeed, there appears no reason to doubt the
continuance of an abundant supply of all the great
staple articles, equal to the necessities of any
possible increase of population or national
contingency for years to come.(7)

Agriculture also was becoming dependent upon

machines and upon the manufacturing industries. Future

increase depended upon further mechanization and the

interdependence of agriculture and manufacturing was

coming to be recognized.

are considered in the remainder of this chapter. Quan-
titative changes, which reflect the consequences of
changing conditions, are left primarily to Appendix A.

Figures showing changing agricultural
productivity and production after 1860 are included in
Appendix A.

Joseph C. G. Kennedy, Superintendent, U.S.
Department of Commerce, Bureau of the Census, Preliminary
Report on the Eighth Census, 1860 (Washington, D. C.:
Government Printing Office, 1862), p. 80.








It is also gratifying to note the evidences of
improvement in some of the most important agri-
cultural operations, proving that our farmers are
fully in sympathy with the progressive spirit of
the age, and not behind their fellow citizens
engaged in other industrial occupations. .

The increasing annual products of agriculture in
our highly-favored country, and the hay and grain
crops in particular, furnish striking illustrations
of the close interdependence and connection of all
branches of the national industry. Without the
improvements in ploughs and other implements of
tillage which have been multiplied to an incredible
extent, and are now apparently to culminate in the
steam plough, the vast wheat and corn crops of those
fertile plains could not probably be raised. But
were it possible to produce wheat upon the scale
that it is now raised, much of the profit and not a
little of the produce would be lost were the farmer
compelled to wait upon the slow process of the
sickle, the cradle, and the hand-rake for securing
it when ripe. The reaping machine, the harvester,
and the machines for threshing, winnowing, and
cleaning his wheat for the market have become
quite indispensable to every grower.(8)

Manufacturing, if anything was changing even more

rapidly than was agriculture.

The returns of MANUFACTURES exhibit a most grat-
ifying increase, and present at the same time an
imposing view of the magnitude to which this
branch of the national industry has attained
within the last decennium.

The total value of domestic manufactures, (including
fisheries and the products of the mines,) according
to the Census of 1850, was $1,019,106,616. The
product of the same branches for the year ending
June 1, 1860, as already ascertained in part and
carefully estimated for the remainder, will reach
an aggregate value of nineteen hundred millions of
dollars ($1,900,000,000). This result exhibits
an increase of more than eighty-six (86) percentum
in ten years!(9)


Ibid., pp. 81-82.

9Ibid., p. 59.








According to the Preliminary Report on the

Eighth Census, based upon figures for manufacturing output

and upon population figures, a per-capita product of

manufactures amounted to some $60.61 "for every man,

woman, and child in the Union." Nor was the increase in

manufacturing to be considered a mixed blessing.

who can justly estimate the influence upon
the general happiness and prosperity--upon the
progress in civilization of the sum total of
effective labor, capital and skill represented by
such an aggregate as we have stated? What an
amount of fixed capital--of labor, enterprise,
ingenuity--of resources, material and immaterial--
involved in the creation of nearly two thousand
millions worth of manufactures in a single year! The
addition of nearly one thousand millions to the annual
product of domestic manufactures--an amount almost
equal to the total home consumption thereof in 1850--
implies also vast additions to the permanent wealth
of the Union and to the elements of a progressive
civilization. The increased support given to ag-
riculture, commerce and the mining interests by
the consumption of hundreds of millions of men,
women, and children who would have been otherwise
unemployed, or forced into competition with the
farmer and planter, instead of being consumers of
their produce, form but a part of the benefits
conferred upon the community at large.(10)

But manufacturing industries in the United

States as elsewhere continued to depend mostly upon

organic and reproducible raw materials, as they had

for thousands of years; iron and copper had not yet

gained the importance they would. Water power still

furnished the primary source of energy and materials

handled in most manufacturing processes were the

products of the forests and of the field rather than the


lOIbid., p. 60.








mine. Of the leading manufactures of 1860, the

production of flour and meal held first place with an

annual value of products of $248,580,365. Next came

cotton goods, far behind at $107,337,783, followed by

sawed lumber at $93,338,606, boots and shoes at $91,889,298,

and men's and women's clothing at a combined gross value

of $87,211,594.

Cast, forged, rolled, and wrought iron combined

to a total gross value of $73,175,332 in 1860, not as

high as sawed lumber but higher than liquors which

stood at $56,588,166. Four hundred and four iron

furnaces consumed about 1,579,309 tons of ore and

produced about 564,755 tons of pig iron, to be used

principally in the production of various kinds of rail-

road eqiupment, iron wire, nails and spikes, rivets,

boiler plate, machinery, stoves and ranges and anchors.12

Steel, used in the production of various kinds of

tools, springs for cars, carriages, and locomotives,

steel wire, nails and spikes, bolts, nuts, washers and

rivets, scales and balances, and the various products

used in blacksmithing, was produced in smaller quantities

even than iron.


11U.S. Department of Commerce, Bureau of the
Census, Manufactures of the United States in 1860;
Compiled From the Original Returns of the Eighth Census
(Washington, D. C.: Government Printing Office, 1865),
pp. 733-42.
12bid., pp. clviii-cci.
Ibid., pp. clxxviii-cxci.








The number of steel furnaces in the United States
in 1850 was 5, all in Pennsylvania. They employed
a capital of $52,300 and 40 hands, consumed
materials of the value of $133,420, and payed for
labor $23,100, yielding a product valued at $172,080.

In 1860 returns were made of 13 steel-making
establishments, of which 9 were in Pennsylvania,
2 in New York, and 2 in New Jersey. Their total
capital amounted to $1,640,000. The number of
hands was 748, and the cost of labor $308,736. The
materials used cost $805,174, and produced 11,838
tons of steel, valued at $1,778,240, an average
of $150 per ton. (13)

In 1960, by way of contrast, more than 99

million short tons of steel ingots were produced. The

steel industry had a capacity to produce 148,571,000

short tons of ingots, and steel was fashioned into a

myriad of products.14 Pig iron production for all of

1863, at the height of the Civil War, would have

occupied domestic facilities in 1954 for five days,

and total steel output would have taken less than one

hour to produce.15

Whatever else the economy of 1860 might have

been, it was not an economy based heavily upon metals

nor dependent upon the consumption of great quantities

of mineral fuels. But conditions were particularly

appropriate for the development of what has come to be

called "mass production," a process dependent upon


13Ibid., pp. cxcil-cxcvi. Emphasis added.

14U.S. Department of Interior, Bureau of Mines,
Minerals Yearbook, 1960, I (Washington, D.C.: Government
Printing Office, 1961), p. 598.

15Earl Morgan Richards, The Iron Ore Outlook of
the United States (Lewisburg, Pennsylvania: Buckness
University Press, 1954), pp. 8-9.








mineral fuels and metals. Substantial quantities of

resources of almost every description lay ready to be

converted into man-made material wealth, and advances in

transportation and communications were drawing together

a large and rapidly growing population with both the

desire and the wherewithal to insure not only a national,

but an international market for large quantities of

standardized goods. Social systems and institutions

were amenable to the requirements of large scale

production and large scale enterprises, and a spirit of

industry and advance had gripped the people. Finally,

technology was yielding methods that would allow standard-

ized parts to be produced and assembled quickly by

mechanical means.

The subsequent evolution tof mass production and
mass consumption during the 19th century was the
result of advances in two major areas of American
economic and social development. One was progress
in invention and technology which affected the
rate at which improved machinery and equipment
became available for production. The second was
the growth and characteristics of a market that
provided an outlet for an expanding volume and
variety of standardized products.(16)

Mass production depended upon precise measure-

ment so that parts could be fitted together at random

as they were made. It depended upon the availability

of machine tools, upon timely utilization of power and

upon breaking down complex tasks into simple ones, the


6Harold F. Williamson, "Mass Production for
Mass Consumption," in Technology in Western Civilization,
I, ed. by Melvin Kranzberg and Carroll W. Pursell, Jr.
(London: Oxford University Press, 1967), p. 678.









repeated performance by a man or a machine of the simple

function, and, eventually, upon the movement of the work

to the worker or to his machine.17

Eli Whitney is recognized as one of the first

to have applied the principle of interchangeable parts

to manufacture in the production of firearms in 1798.18

By 1807 clocks were being made from interchangeable

parts and the application of the process subsequently

encompassed many other types of production including

boots and shoes and clothing, the sewing machine by

1850, and large agricultural machinery by 1867.19

Accuracy of measurement was advanced markedly

in 1851 with the introduction of the vernier caliper

by Joseph Brown, and by 1856 Joseph Whitworth had

produced a bench micrometer capable of measuring

accurately to within ten-thousandths of an inch.


17
Cf. Sigfried Giedion, Mechanization Takes
Command (New York: Oxford University Press, 1948), p. 49;
John W. Oliver, History of American Technology (New
York: Ronald Press Company, 1956.
18
1Some questions have been raised concerning
Whitney's contribution to interchangeable parts manu-
facture. His individual contribution to the process
may have been less than legend would indicate. Cf.
Robert S. Woodbury, The Legend of Eli Whitney and
Interchangeable Parts, Publications in the Humanities
(Cambridge: Massachusetts Institute of Technology,
1964).

19Giedion, Mechanization Takes Command, p. 49.









"We have in this mode of measurement all the
accuracy we can desire; and we find in practice
in the workshop that it is easier to work to the
ten-thousandth of an inch from standards of end
measurements, than to one-hundredth of an inch
from lines on a two-foot rule. In all cases of
fitting, end measure of length should be used,
instead of lines."(20)

Improvements in accuracy continued to be made,

and by 1896 a Swede, Carl Johansson, was able to make

blocks of steel, now called "Jo" blocks, accurate to

four-millionths of an inch, to be used for the cali-

bration of other measuring devices.

The assembly line found its first application

in pig processing in the 1860s. Pigs slaughtered at

the top level of a building were conveyed on hooks

past various workmen, each of whom removed an individual

part until the carcass was completely processed.21

Interchangeable parts, precision measurement,

and the assembly line, coupled with the increased


20
20Quote from Joseph Whitworth, cited by Robert
S. Woodbury, "Machines and Tools," in Technology in
Western Civilization, ed. by Kranzberg and Pursell,
op. cit., p. 621. Woodbury's article is an excellent
source for information concerning developments in
precision measurement and machine tools during the
nineteenth century, and their relation to mass production
by precision methods.

2Giedion, Mechanization Takes Command, pp.
239-45.

Henry Ford later reversed the same process by
assembling (rather than disassembling) parts as they
moved along a conveyor. In 1913 Ford's experiment using
the production line method on the assembly of magnetos
realized a substantial savings in labor and time; he
later successfully applied the technique to automobiles.
Eventually, of course, the system became commonplace.









application of power to production and transportation,

were the technical requisites for mass production. But

in 1850 little attention was given to power and power

machinery by official sources, and not until 1870 were

questions concerning power included among those asked
22
by the Census Bureau.2 Congress finally provided for

their collection officially in 1879 for inclusion in

the 1880 Census, with good reason. The total horsepower

of all prime movers in the United States more than

tripled in the thirty years after 1850, from 8,495,000

horsepower to 26,314,000 horsepower in 1880. Inanimate

horsepower increased from 2,535,000 to 14,734,000 during

that period, and surpassed animate horsepower in about

1870.23

Machine tools round out the picture of technical

changes important to mass production in the United States

after 1860.

22
2The questions for that year were included
because of interest on the part of the Superintendent of
the Census.
23
2Historical Statistics, p. 506, Series S 3-5.

By 1955 the total power of prime movers was
estimated to be 7,272,997,430 horsepower, more than 850
times that of 1850, a sizeable increase indeed. Histor-
ical Statistics, p. 501.

Power production and consumption have come to be
accepted as one of the best indicators of economic
advancement. Levels of total output correlate highly
with power production. Demands for electric energy in
the United States are expected to double over the next
ten years.









The years 1830 to 1880 marked the maturing of the
Machine Age born during the Industrial Revolution.
One by one, older technologies gave way to new ones,
based on power-driven machinery. Machinery was
enlisted to help the housewife, the office worker,
and the factory worker. Entirely new devices, such
as the sewing machine and the typewriter, were
invented, developed, mass-produced with specialized
machine tools, and then marketed. They soon became
indispensable.(24)

The introduction of the turret lathe and the

metal planer before the Civil War and subsequent improve-

ments of them and of drilling, milling, and grinding

machines, coupled with improvements in accuracy and in

knowledge of metallurgy advanced the machine-tools

industry; and advance in the machine-tools industry

was related intimately to advances in production for

the economy as a whole.

machine-tool manufacture, in particular, .
emerged into prominence as the very foundation of
mechanization. It provided the machinery and tools
for the expanding technology of mass production,
and, indeed, the "master tools" of all industry.(25)

24
2Carroll W. Pursell, Jr., "Machines and Machine
Tools, 1830-1880," in Technology in Western Civilization,
ed. by Kranzberg and Pursell, op. cit., p. 407. See
also, H. J. Habakkuk, American and British Technology in
the Nineteenth Century (Cambridge: The University Press,
1967); Nathan Rosenberg, "Technical Change in the Machine
Tool Industry, 1840-1910," Journal of Economic History,
XXIII (December, 1963), pp. 414-43.

25Samuel Rezneck, "Mass Production Since the War
Between the States," in The Growth of the American
Economy, ed. by Harold F. Williamson (New York: Prentice-
Hall, Inc., 1951), p. 502.









But mass production required more than changes

in technology; quite apart from the question of mental

attitudes, it also required new materials, especially

iron (because of its strength) and copper (because of

its electrical properties).

Until late in the eighteenth century, almost all

machinery had been made primarily of wood. Metal was

used chiefly in various steam engines and in machine

parts which were most subject to wear or which required

greater strength than could be afforded by wood. But

metal was hard to work and finished metal lacked many

desirable qualities. Cast iron, subject to breakage on

impact or twisting, was too brittle for many purposes;

and wrought iron, although tough and malleable, was

relatively soft. Steel was extremely expensive and

could be produced only in relatively small quantities.

The quality and uniformity of each of these forms of

iron was suspect as well.26

Mass production, heavily dependent upon the

interchangeability of parts, and in turn upon fine

accuracy, could not be adopted on a wide scale without

the development of a suitable material from which to

fashion slow wearing parts with precision. The material

had to be tough, yet easily worked into various shapes,

26
Cast iron, wrought iron, and steel are all forms
of iron, each having a different carbon content. Wrought
iron contains the least carbon, cast iron the most, and
the carbon content of steel lies in between.









bent, and planed. That material was steel, but a cheap

method of production and one which allowed greater

volume had to be found.

In Pennsylvania, William Kelley, an iron worker,

noticing that a piece of iron in his furnace had become

extremely hot, apparently without benefit of fuel,

concluded that steel might be made directly from iron,

using only air as fuel; oxygen in the air, when combined

with carbon in the iron, would burn away the carbon and,

hence, produce steel. An initial experiment in 1847

failed, but a similar experiment in 1850 yielded much

different results.

"We saw a middling-sized vessel," said one observer,
"that had a mouth open on one side and near the
top. The whole was shaped something like an egg,
only bigger than a barrel. We saw molten iron
poured into the vessel. Then, Kelley he turned on
a blast of cold air, blown from a rig he had
devised himself. The vessel set up a large noise,
a roaring like you don't often hear, and fire
belched furiously from its mouth, making many colors.
But only for a few minutes. The noise and fire
died down. We then saw a blacksmith take a small
part of the iron, which had cooled, and with a
merry ring of his hammer, he contrived and threw at
the feet of the amazed spectators, a perfect horse-
shoe.

next, the smith took some more of the cooled
metal, made it into nails forthwith, and shod the
horse of one in the crowd."(27)

Kelley unfortunately neglected to patent his

process until 1856, by which time the famous Englishman,

Henry Bessemer, had arrived on the scene with essentially


27Stewart H. Holbrook, Iron Brew, A Century of
American Ore and Steel (New York: Macmillan Company,
1940), p. 188.









the same process. There ensued a pitched battle over

patent rights, but, meantime, cheap steel had come to

the United States. First produced commercially on an

experimental basis in 1864, by 1867 steel was being made

into rails and being sold at $166 per ton. Ten years

later the price had dropped to $45 per ton.2

Steel had entered the scene at a most opportune

time (although probably not altogether by coincidence

since experiments in the production of iron and steel

had been vigorously conducted for many years). Vast

iron deposits in Michigan's Upper Peninsula just

recently had been discovered and even greater deposits

in Northern Minnesota would soon come to light.

Significant advancements had been made in measuring and

working materials with precision. A spirit of change

and progress had gripped the people. The wealth of great

portions of the immense new land remained to be tapped

and large expanses of land waited to be crossed by steel

rails.

Also important to the new technology, primarily

because of its electrical properties, was copper.

Although electricity was not used widely in 1860, the

properties of electricity, which was to become the

wonder of the new age, were not unknown by ary means;

experiments in the use of electricity for producing


28Ibid., p. 193.






47

heat, light, and motive power had been underway for some

time. The telegraph had been invented in 1845 and was

in general use for communications by the time of the

Civil War. The earliest electrical machinery had been

produced in the eighteenth century, and Sir Humphrey

Davy had succeeded in producing an electric light in 1809.

Experiments in electric lighting and power

continued throughout the middle of the nineteenth century,

but not until October, 1879, was a commercially success-

ful electric lamp developed, one that would burn many

hours and could be produced relatively cheaply. The

feat was accomplished, of course, by Thomas A. Edison,

who established the famous Peart Street generating

station in New York in 1882 and achieved wealth and

fame in the electrical industry.29 A description of the

subsequent expansion of the electrical industry as

anything short of phenomenal would be a serious under-

statement. In 1906 almost 50 million electric lamps

were sold in the United States; and that particular

application of electricity represented but one part of

the whole product of electrical and related industries.


29Fred A. Shannon, The Centennial Years, A
Political and Economic History of America from the Late
1870s to the Early 1890s, ed. by Robert Huhn Jones
(Garden City, New York: Doubleday & Company, Inc.,
1967), pp. 241-43.








The telephone was invented in 1876, and by

1896, 404,000 were in service. By 1905 the figure

had increased to 4,127,000 and by 1915 to 10,524,000.30

The first experimental electric streetcar line

was built in 1879. By 1888 the first commercially

useful line was in operation in Richmond, Virginia, and

by 1902, 22,576 miles of track had been constructed.

By then only 1 percent of the streetcars in use

were still horse-drawn.31 A streetcar with two 15

horsepower motors, considered adequate in 1890, by

1900 was outmoded by 40 horsepower motors. The demands

for power by this industry alone were great.

The requirements of the industry are enormous,
and the data in hand show that in the ten years
between 1890 and 1900, the railway power plants
of the United States had installed, available
for traction purposes, about 1,000,000 horsepower
of dynamos to feed current to motor cars of a
capacity somewhat over 2,000,000 horsepower.
iot all cars were used simultaneously, hence the
larger capacity of cars relative to generating
equipmentJ (32)

By 1900 the electrical industry had developed

so rapidly and along so many avenues that the Census of

Manufactures of that year listed separately twenty-seven


30Historical Statistics, p. 480, Series R-l.

31Harold R. Sharlin, "Applications of Electricity,"
in Technology in Western Civilization, ed. by Kranzberg
and Pursell, op. cit., p. 574.

32U.S. Department of Commerce, Bureau of the
Census, Twelfth Census of the United States, Manufactures,
Part IV (Washington, D. C.: Government Printing Office,
1902), pp. 164-65.








major categories of electric manufactures, among them

dynamos, transformers, fan motors, telephones, phonographs,

gramaphones, and electric heating apparatus, none of which

had existed on a commercial basis forty years before.



The standardization of products and processes,

simplification, the movement of materials from one work

station to another, and the widespread application of

power helped to expand production immensely after 1860.

Steel was adopted as a major construction material of

the new age; and, with the introduction of electrical

apparatus on a commercial scale, copper became

increasingly important. Great changes in the nature of

production took place within the period of a few years

and more innovations would occur, in air and ground

travel, and particularly on the road with the intro-

duction and widespread adoption of the automobile.3


33Technology found a particularly responsive
people in Americans who prided themselves not only on the
merits of their republic, but upon their "Yankee Ingenuity"
as well, which they chose to display at the various World
Fairs beginning in 1851.

it was maintained that the exhibition of
specimens of American industry at London would give
Europe 'a juster appreciation and a more perfect know-
ledge of what this Republic is, than could be attained
in any other way.'" Journal of the Great Exhibition of
1851, I (February 1, 1851), 14, cited by Merle Curti,
Probing Our Past (New York: Harper & Bros., 1955),P. 247.

Americans grew proud of their technology and their
country, and that pride became identified with progress in
technology and material wealth. Cf. Curti, Probing Our
Past, chap. x, "America at the World Fairs, 1851-1893,"
p. 246.









Where metals had found their first use in factories and

on the railroads, metal implements soon became available

in increasing amounts to consumers. Fans, irons,

toasters, and wringers entered the catalogues of mail

order houses in 1912, vaccum cleaners in 1917, electric

ranges in 1930, and electric refrigerators in 1932.

Radios, telephones, television sets, electric heating

units, air conditioning units, electric can openers,

power mowers, and a wide assortment of other metal

implements were produced in increasing quantities by

machines that employed great quantities of power. Farm

goods could be grown and harvested in greater quantities

by using farm machines, then transported to cities,

between cities, and within cities by mechanical means.

They could be weighed, their dollar value calculated by

machines, transported to the home by machines, and

cooked there by machines using power generated by other

machines. Machines and metals entered every part of life

and became important to the provision of essentials and

luxuries alike.

While the economy of 1860 was not heavily

dependent upon the use of metals, the economy of 1960

was, and figures purporting to show changes in Gross

National Product or in Material Wealth over the inter-

vening period perform an injustice to the amount of


Giedion, Mechanization Takes Command, p. 42.









economic change that occurred. The simple statement of

income or wealth figures, no matter how couched with

qualifications, cannot serve to reflect adequately the

scope of economic "progress."35

Nor can the increased importance of metals to

the economy be discerned easily from figures showing

increased rates of metals production and consumption.

The effects of increased metals use were pervasive; every

conceivable productive process, whether concerned with

manufacturing, agriculture, transportation, communications,

or services, was affected by the application of power

and machinery. In turn, mechanization and mass pro-

duction generated an increased dependence upon metals

and an increased metals demand, and while economic

progress in terms of quality was astonishing, changes in

quantity were astonishing as well.

Mechanization virtually revolutionized the

agricultural industry.37 Output per worker increased


35Changing volume of production as shown by
employment, income, and physical output figures is shown
in Appendix A.
36
6Figures for copper, iron, and steel production
are included in Appendix B, as are figures showing
apparent consumption of those metals.
37
7Whether the change was revolutionary or
evolutionary is a matter of definition. But agricultural
production and productivity increased very rapidly between
1860 and 1880; thereafter the rate of growth declined until
1940, after which a new revolution in the way of fertilizers,
insecticides, hybrid seeds took place. Cf. Wayne D.
Rasmussen, "The Impact of Technological Change on American
Agriculture, 1862-1962," Journal of Economic History, XXII
(December, 1962), 578-91.








substantially after 1860,38 and as it did, labor was

freed to go into manufacturing and services. In 1860,

58.9 percent of the working labor force was engaged in

agriculture; by 1900 the figure had fallen to 37.5

percent, and it continued to decrease thereafter until,

by 1960 only 6.3 percent of the labor force was so
39
engaged. More food with less people was certainly

"one of the great phenomena of economic history."40

The machine did not produce food, of course;

the producers were farmers working in the nation's rich

soil. Few regions in the world could compare with the

thick, black of earth of Indiana, Illinois, or Iowa when

it came to growing corn, for example; but machines,
41
especially the reaper, allowed farmers to make the

most of what they had.

As increasing farm production yielded food

enough for the domestic population and more, the nation

turned its energies to manufacturing.

As a nation we might of course have continued after
the turn of the century to devote our industrial
energies to agriculture in relatively the same
degree as formerly, utilize our surplus productive


8See Appendix A, Table 6.

39See Appendix A, Table 5.

40
4Clarence H. Danhof, Discussion of Rasmussen's
"Impact of Technological Change," Journal of Economic
History, XXII (December, 1962), p. 592.

41Harvesting is a critical point in farm
production. Reaping must be accomplished quickly or the
crop is lost.









powers in the feeding of other nations, and obtain
in return a variety of manufactures. This did not
happen because we found it more advantageous to
devote an increasing portion of our energies to
nonagricultural pursuits. On the one side, mech-
anized industry was making tremendous headway in
the United States. Our mineral resources were
exploited energetically, if only for the reason
that "in no other country can the mineral raw
materials as a whole be delivered to manufacturing
industry at lower prices." And as increasing progress
was made in the standardization, mechanization, and
mass production of commodities, the United States
advanced to the front rank among manufacturing
nations. On the other side, the agricultural map
of the world was changing. While the decline in
virgin lands was beginning to revise agricultural
costs in this country, certain other regions which
were experiencing the first flush of agricultural
expansion--Argentina, Australia, Canada, Russia,
and India--were offering severe competition to our
products in foreign markets.(42)

Between 1869 and 1900, while the share of national

income originating in agriculture declined from 22.2

percent to about 18.2 percent, the share of national

income originating in manufacturing increased from 14.6

percent to 18.6 percent. Between 1900 and 1960, the

share of agriculture declined further, to 4.3 percent,

while that of manufacturing increased to 30.5 percent.43

The rate of growth in metals producing-and metals-using


Arthur F. Burns, Production Trends in the
United States Since 1870 (New York: National Bureau of
Economic Research, Inc., 1934), pp. 68-69, citing
F. G. Tryon and L. Mann, "Mineral Resources for Future
Populations," chap. viii, in Population Problems in the
United States and Canada, ed. by L. I. Dublin (Pollak
Foundation for Economic Research, 1926), p. 112.

See Appendix A, Table 9. Yet never has a
people remained better fed.









industries was particularly impressive and generally

exceeded the rate of growth of the economy as a whole

and even of manufacturing in general.44

Thus, economic changes taking place in the United

States after 1860 represented nct only better, but more--

particularly more manufacturing; and "more" might almost

as easily have been figured in terms of weight or measure

45
as in terms of dollars. It is in terms of volume that

we now turn our attention more specifically to the

production of iron and copper and their products for the

century that followed 1860.

---- 44
4See Appendix A, Table 13.

45The value of services cannot be excluded from
production, of course. If that were done, some interesting
results would follow.

"According to this notion, classroom furniture
and equipment would all be part of national income, but
the instruction, through which these goods acquire
utility, would not be included." Paul Studenski, The
Income of Nations, Part II, Theory and Methodology
(Washington Square: New York University Press, 1961),
p. 22.

Nonetheless, national income figures have their
real counterpart, even if that counterpart is in terms of
man-hours of services. National income and changes in
national income measure volume as well as value,
especially when such changes are figured in real terms.















CHAPTER IV

THE DEMAND FOR IRON AND COPPER IN THE
UNITED STATES, 1860-1960


Although iron, copper, and steel were mutually

important to new kinds of production after 1860, their

stories, in some respects, are more conveniently told

separately.

As we have said, in 1860 iron and steel output

was small and markets were limited chiefly to railroads.

Between 1860 and 1880 both situations changed substan-

tially. First, iron and steel production grew very

rapidly, not only absolutely but also in relation to

other industries. Pig iron production increased almost

fivefold, from 920 thousand short tons in 1860 to 4.3

million short tons, and steel production showed a

tenfold increase, from 11.8 thousand long tons to 1.2

million long tons; increases that established the

production of iron and steel and their products in third

place among all manufactures in 1880 with a gross value

of products of $659 million, exceeded by food and


1Historical Statistics, pp. 365-66, Series M 207;
p. 416, Series P 203. The excess of pig iron over steel
production for 1880 illustrates the continued importance
of iron relative to steel at that time.

55 -







56

kindred products, $1,171 million, and by textiles with a

value of $971 million.2

Second, although the railroad industry still took

the bulk of iron and steel output in 1880, other markets

were gaining in importance. In all, 1,305,000 long tons

of rails were produced (31 percent of the tonnage of

all pig iron) along with 1,405 large steam railroad

engines, 46,200 railroad freight cars and 685 passenger

cars. But a sizeable amount of iron and steel also

was being devoted to bridge and building construction

where greater engineering sophistication and larger and

longer structures required increased amounts of strong

materials; 87 thousand long tons of structural iron and

steel shapes were produced in 1879.

A record span of 1,057 feet had been achieved

by a suspension bridge system over the Ohio River at


2Twelfth Census of the United States, Part I,
p. cxlv, Table LVIII. The Twelfth Census grouped
industries according to materials used and product.
Iron and steel and their products were one of fifteen
such groups. See pp. xcliii, cxliv, cxlix.

3Steel rails, produced since 1865 by the Bessemer
process, had gained increasing acceptance by the rail-
roads, especially where heavy loads and high speeds
prevailed, but were not at once accepted wholly. Debate
continued over the merits of iron and steel rails
relative to cost, but as increasing steel output caused
steel prices to fall, the relative merits of steel
became paramount and iron soon was virtually forced out
of the rail business except for sidings where light
traffic persisted.

Historical Statistics, p. 416, Series P 203-15.









Cincinnati in 1867, and the Eads Bridge, a magnificent

work crossing the Mississippi River at St. Louis,

completed in 1874, was made of chromium steel. The

Brooklyn Bridge, also constructed of steel, was completed

in 1883, its main span some 1,595 feet long.5

We are the foremost of all nations in the use of
iron and steel in bridge building for railroads
and ordinary highways, and the lightness and
gracefulness of our bridges are nowhere equaled,
while their strength and adaptability to the
uses for which they are required are nowhere
surpassed.(6)

Low price and quick delivery allowed the develop-

ment of a lively business in the export of steel for

bridges as well; but new demands for iron were not

confined even to railroads and great structures. As

one might suspect, the production of agricultural

implements also required immense quantities of iron and

steel.

We are the leading agricultural nation of the
world, and hence are the largest consumers of
agricultural implements; but we are also in
advance of every other nation in the use of
agricultural machinery. Our use of iron and steel
in agriculture takes rank next to their use in the
construction and maintenance of railroads.(7)


5Carl W. Condit, "Buildings and Construction,"
in Technology in Western Civilization, ed. by Kranzberg
and Pursell, oP. cit., pp. 387-92.

U.S. Department of Commerce, Bureau of the
Census, Report on the Manufactures of the United States
at the Tenth Census (Washington, D.C.: Government
Printing Office, 1883), p. 150.

7Ibid.






58

In addition, more iron stoves were constructed in

the United States in 1880 than in all the rest of the

world combined, and along with first place positions in

bridge building, agricultural implements, and stoves,

the United States could add fencing (the barbed wire

fence had just come into use) and telegraph wire.

The expansion in iron and steel production and

markets between 1860 and 1880 was considerable, and the

same trends continued between 1880 and 1900 as steel

production increased from 1.2 million long tons to 10.2

million long tons and pig iron production from 4.3

million short tons to 15.4 million short tons.8

By 1894 over 250,000 long tons of steel were

used in the production of nails alone, a like quantity

finding its way into the production of fencing;9 a

combined amount of more than 40 times what total steel

production had been in 1860. By 1895 steel production

had increased so substantially that it was cheaper to

let a dropped nail lie than to devote the time of a

skilled carpenter to picking it up.10 By 1900 the

production of iron and steel had attained first rank


Historical Statistics, pp. 365-66, Series M-207;
p. 416, Series P-203.

victor S. Clark, History of Manufactures in the
United States, Vol. III (New York: McGraw-Hill Book
Company, 1929), p. 122.

10Ibid., p. 126.






59
11
among the manufacturing industries, and the railroads

no longer consumed a majority of steel production.

By that date, other uses combined to take more
12
than twice as much steel as was used for rails. As

a result of the continued increase in the use of iron

and steel in large buildings and bridges, the output of

iron and steel shapes increased from 87 thousand long

tons in 1879 to 276 thousand long tons in 1889 and to

815 thousand long tons by 1900.13

The use of steel in agriculture increased rapidly

as well. During the period 1880-1900, the value of

farm implements and machinery employed in agriculture

tripled, from $406 million to $1,265 million, mostly

as a result of changes in quantity.14


11Twelfth Census, Manufactures, Part I, p.
clxiii, Table LX. This grouping included only iron and
steel, the various products of iron and steel being
noted separately.

12Clark, History of Manufactures, p. 65. Steel
for rails represented only part of the total demand for
steel by railroads, of course.

13Historical Statistics, p. 416, Series P-211.
14
4Farm implements had not changed greatly in
quality. That only 136,105 sulky or wheel plows were
produced in 1900 as opposed to some 819,022 walking
plows is sufficient to illustrate the state of advance-
ment in agricultural implements at that time. The Census
of 1900 listed fourteen different kinds of seeders and
planters produced, twenty different categories of
implements of cultivation, twenty-two types of harvesting
implements and ten types of seed separators. Between
1870 and 1900 the number of hand cord planters produced
per year had increased from 21.7 thousand to 129.5
thousand, the largest absolute increase among seeders
and planters, while the number of small cultivators









Steel production remained producer oriented in

the main as machinery for use in mines and factories,

and, to a lesser degree, shipbuilding were added to the

list of major users of steel by 1900. While the railroad

industry continued to take the lion's share of steel

output, accounting for 42.5 percent, and plant and equip-

ment held second place with 39.2 percent, consumer

durables accounted for only 2.8 percent and containers

for another 3.8 percent.1 But times were changing.

Between 1900 and 1929, while steel ingots and

castings produced per year increased from a little over

10 million long tons to more than 56 million long tons,

the volume being taken by railroads declined to only

16.7 percent of total steel output.16 The share of

steel going to buildings and equipment remained firm

at 35.6 percent, but the major new user of steel was

the automobile, the production of which was made possible

by the introduction of the internal combustion engine.


produced per year had increased from 88,740 to 206,982,
the largest absolute increase among cultivation
implements. Twelfth Census, Manufactures, Part IV,
P. 351.

15American Iron and Steel Institute, The
Competitive Challenge to Steel (New York: American
Iron and Steel Institute, 1963), p. 4.

6Historical Statistics, p. 416, Series P-203;
Hans H. Landsberg, Leonard L. Fischman, and Joseph L.
Fisher, Resources in America's Future, A Look Ahead to
the Year 2000 (Baltimore: Johns Hopkins Press for
Resources for the Future, Inc., 1963), p. 889, Table
A16-20.









The internal combustion engine revolutionized

transportation and power production on the roads and on

the farm. Automobiles changed from 2-1/2 horsepower, 5

mile-per-hour, horseless carriages of the 1890s to

multi-cylinder vehicles of increasing size and power.

The industry grew by leaps and bounds. Automobile sales

increased from only 4,192 in 1900 to 181,000 in 1910 and

to 1,905,000 in 1920. By 1929, when automobile sales

reached 4,455,178 units, the industry was consuming

18.7 percent of all rolled steel mill products, which

at the time amounted to over 47 million tons. For the

same year, other consumer durables and containers each

accounted for 4.9 percent of steel output so that

these three categories taken together accounted for

about one-fourth of all steel production.17

After 1929 both the absolute and relative

amounts of steel products going to the railroad industry

continued to fall, from 9.8 million tons and 20.8

percent in 1929 to only 3 million tons and 4.2 percent

in 1960. In the meantime, steel destined for use in

the production of machinery and industrial equipment

showed the largest relative increase among steel consuming

groups, increasing by 1960 to almost four times what it

had been in 1929. The second largest relative increase


17Landsberg, Resources in America's Future,
p. 869, Table A16-3.






62

was shown by appliances and other domestic and commercial

equipment and the third largest by automotive uses.

These latter three categories had taken 28.9 percent

of all steel mill products in 1929; by 1960 they accounted
18
for 47.1 percent of the total. In short, the needs of

the domestic private economy increased substantially

throughout the entire period.

On the other hand, the use of steel for ordnance

usually has constituted a rather small portion of the

total iron and steel market. Even though total pro-

duction of steel ingots and castings, for example,

increased from 31.3 million long tons in 1913 to 45

million long tons in 1917, a goodly amount of the

increase went into exports. After the lull of the

depression of 1921, steel production quickly recovered,

almost regaining the 1917 output level in 1923 during

peacetime, and surpassing it in 1925 with an output of

some 45,393,524 long tons. The highest level of steel

production attained during the Second World War, 79,318,314

long tons in 1943--of which only 13.9 percent was devoted

to ordnance and another 21.4 percent to shipbuilding,19


18These categories do not include steel destined
for use in building construction. Adapted from Ibid.,
pp. 869-70, Table A16-3.

19American Iron and Steel Institute, Annual
Statistical Report (Philadelphia: American Iron and
Steel Institute, 1944), passim.









which was proceeding with great haste at the time--was

matched by peacetime production of 79,143,277 long tons

in 1948.20 Remembering that a great deal of existing

machinery and equipment was devoted to war ends during

the 1940s, one readily can understand the consequent

assumption that wars have made exceedingly heavy demands

upon metal resources. But the diversion of metals from

domestic to war industries for short periods of time

did not constitute a significant drain on metal

resources when compared to the total metal demand exhib-

ited over the past hundred years for non-military uses.

The output of the steel industry during wartime has

come to be exceeded each year by the demands of the

domestic economy; even if all the metal produced during

the war years had been lost, the amount of metal lost

due to wars would not have begun to approach the amount

of iron mined, fabricated, and put to use in the economy

over the past hundred years. Between the two great

wars, the production of steel for use in ordnance was

insignificant. During periods of peace following World

War II, it amounted to only two or three hundred

thousand tons of steel per year, and even during the

Korean conflict it reached a maximum of only three
21
million tons.2


20Historical Statistics, p. 416, Series P-203.
21
2Landsberg, Resources in America's Future,
p. 870, Table A16-3.











Just as the production of steel increased remark-

ably after 1860, so too did the production of copper.

Only 112 short tons of copper were produced by domestic

mining operations in 1845 and only 8,064 short tons in

1860; but, by 1900 annual production had risen to 303,059
22
short tons. Unfortunately, the precise destination of

copper by market category cannot be readily determined.

The only certainty is that most copper was destined for

use by producers.

It would have been very interesting to know the actual
consumption of copper by the electrical industries,
but there are not data available as to the wire drawn
for that purpose, and if there were, the figures
would still be very incomplete, owing to the large
electrical use of copper rods, bars, drop forgings,
commutator segments, springs, leaf, etc.

On the other hand it may be here noted that
virtually the whole American industry of copper
refining is a branch of electrical manufacture, .

It is interesting and important to note that the
proportion of the electrical product reaching the
public directly is by no means large. (23)

After 1900 the amount of domestic copper going

directly to consumers began to take a greater share of

available supplies, like iron and steel largely because

of the introduction of the automobile. By 1921, 10

percent of domestic copper production was going to

automobiles, while 5 percent went to building construction


22Historical Statistics, p. 368, Series M-225.

23Twelfth Census, Manufactures, Part IV, p. 154.








65
and about 11 percent to manufactures destined for export;

slightly more than 50 percent was being devoted to elec-

trical industries (such as generators, motors, electrical

locomotives, switchboards, light bulbs, telephones and

telegraphs, light and power lines--transmission and

distribution wire and bus bars, and other wire and

receiving sets). The remainder was devoted to other

manufactures including wire cloth, ammunition, castings,

clocks and watches, coinage, copper-bearing steel, fire-

fighting apparatus, radiators, railway equipment, ship

building, water heaters, refrigerators, and washing
24
machines.

The percentages of copper going to each end

use remained remarkably stable throughout the 1920s and

1930s. Electrical industries accounted for 52 percent

of domestic copper consumption in 1939, automobiles for

11 percent, buildings for 11 percent, manufactures for

export 6 percent, and other manufactures for 20 percent.25

Even during the depths of the Great Depression in 1933,

the proportions going to each domestic end use remained

almost exactly the same.26


24Harold Barger and Sam H. Schurr, The Mining
Industries, 1899-1939, A Study of Output. Employment and
Productivity (New York: National Bureau of Economic
Research, Inc., 1944), p. 359, Table A-11.

2Ibid.

26Minerals Yearbook, 1932-33, p. 45.









In addition to furnishing copper to domestic

industries, by 1900 the United States had become engaged

in a booming export trade in copper with almost half of

domestic production being sent abroad for use in the

rapidly expanding electrical industries of other
27
countries.27 During the early 1900s, the United States

continued to do a lively copper export business as

domestic production, continuing to increase at a brisk

pace, was supplemented by imports of ores and concen-

trates for refining and reshipment abroad. In 1920,

for example, net imports of copper ores and concen-

trates by copper content amounted to 150,808 short tons

and refined copper exports to 221,241 short tons, the

excess reflecting the added product of American mines.

In 1925 refined net exports of copper amounted to

434,146 short tons compared to net imports of ore and

concentrates of 263,228 short tons, but the era of the

United States as a net exporter of copper was drawing

to a close. By 1929 imports of ores and concentrates

exceeded refined net exports by only 28,281 short tons,

and imports of copper ore by copper content remained

fairly equal to refined exports from then until the

eve of the Second World War.28

27Twelfth Census, Manufactures, Part I, p. Ivii.
Figures for copper production are shown in Appendix B.

28Historical Statistics, p. 368, Series 225-30.








Refined exports which had exceeded apparent

domestic consumption in 1904 did so five other times during

the period 1904-1914. But, while domestic production was

increasing, domestic consumption was expanding even more

rapidly, more than doubling between 1900 and 1910.

Refined exports exceeded apparent domestic consumption

for the last time in 1914; and, as the economy grew,

apparent domestic consumption of copper far outstripped

refined exports. By 1940, on the eve of America's entry

into the Second World War, apparent domestic consumption

was almost three times as great as refined exports,

1,008,785 short tons devoted to domestic needs compared

to 356,431 short tons of refined exports.29

Demands for copper changed radically when the

United States entered the Second World War; although

demand had increased prior to the war, domestic

supplies had been adequate to meet domestic needs. With

the war, the United States found itself squeezed for

resources; competing military and civilian demands for

the first time exceeded the amount of copper that could

be supplied.

The trend of events throughout 1940 and 1941 forced
many observers to revise their opinions regarding
the adequacy of copper supplies in the United
States. When the present World War began, few
would have believed that domestic production plus
unprecedented imports could fall so far short of


29Minerals Yearbook, 1945, p. 122.








68

satisfying all needs. The British Empire's position
as regards copper was then considered relatively
satisfactory, and when the tremendous resources of
the United States were added, no problem regarding
supplies of the metal was generally anticipated.
This opinion, of course, held before the United
States entered the war and before it was known that
this country must supply copper in fabricated forms
to virtually all the nations at war with the Axis
powers or preparing to resist them. The unbelieve-
able growth in plans for airplanes, tanks, and other
munitions made all previous ideas regarding consump-
tion requirements obsolete.(30)

As a result, copper was placed under mandatory

industry-wide control on June 1, 1941. Exports of

refined copper declined drastically as most of the former

European markets and Japan were taken out of the export

picture and imports of refined copper increased markedly

as South American copper formerly shipped to Europe was

diverted to the United States. Refined copper imports,

68 thousand short tons in 1940, peaked at 531 thousand

short tons in 1945, while refined copper exports declined

from 356 thousand short tons to 49 thousand short tons.31

Apparent domestic consumption reached peaks of 1,919

thousand short tons in 1941, and 1,948 thousand short

tons in 1943.32

With the end of the war in 1946, apparent

domestic consumption of copper temporarily declined to

30
30Minerals Yearbook, 1941, pp. 93-94.

31Historical Statistics, p. 368, Series M-229-30.
32
2Landsberg, Resources in America's Future,
p. 906, Table A16-38.










1,338 thousand short tons, but the decrease was tran-

sitory. By 1950, again bolstered by defense needs,

copper consumption reached 1,986 thousand short tons.33

Apparent consumption fell after 1950, and did not reach

its former high wartime levels until the early 1960s,

but apparent consumption reached 2,039 thousand tons per

year in 1965 and remained at very nearly the same level

through 1969.34

By 1960 the amount of copper going to building

construction had increased to approximately 19 percent

of total copper consumption. Communications construction

and electric power construction accounted for another 19

percent, and producer durables took approximately 32

percent. Motor vehicles maintained a share of about 9

percent and consumer durables accounted for 4 percent.35



We have looked at the changing nature of the

demands for copper and iron within the United States

during the past century. The demand for both increased

at a spectacular pace-between 1860 and 1900 as new metals-

oriented industries came into being and expanded.


33bid.

34Minerals Yearbook, 1969, p. 452.
35Ldsberg, Resources i Americ's Future, p. 912.
Landsberg, Resources in America's Future, p. 912.








Gross National Product, in constant prices,

increased approximately four times between 1870 and

190036 while pig iron production increased more than

eight times, and copper production thirty-eight times,7

so that increases in these were much greater than in

GNP. Since 1900 the rate of increase in copper and

iron production has been much lower, 1.4 percent for

copper and 1.8 percent for iron, while GNP has increased

at an average annual rate of 3.1 percent.8 Hence, at

first glance, GNP would appear to have increased much

more rapidly than metals since 1900, and based upon

these figures, the importance of metals to production

would appear to have decreased over time. But the

figures are misleading.

Reduction in apparent consumption of metals

relative to GNP has been noted by many writers who

have observed that progressively more has been made

from each ton of metal, which is true. But compari-

sons of levels of GNP with annual rates of apparent

consumption have understated the importance of metals

to production in general. Quite simply, the level of

of production for the whole economy in any given year

36
Historical Statistics, p. 139, Series F-3.

7Figures for iron and copper production and
consumption are included in Appendix B and are related
there to changes in GNP.

38See Appendix B.1, Table 19.








does not depend upon the amount of metal produced in

that year, but rather upon the amount of metal already

in use in machinery, buildings, and other equipment.

As such, current levels of production depend more upon

the rate at which meals production has occurred in the

past than upon the rate at which they currently are

being produced. Current levels of metals production

are more important to future levels of general pro-

duction, and hence are related to growth.

When stocks of metals in use are compared to

GNP, a different picture emerges. While real GNP in

1960 was approximately 7 times as great as it had been

in 1900, stocks of copper in use appear to have been

about 11.5 times as large and iron 11.4 times as large

as they were in 1900. Even after 1920, when metals

markets had become more diverse and metals were going

to uses for which there tended to be a larger value of

product per unit of metal, stocks of metals in use

continued to increase at a rate comparable to that of

GNP. Stocks of copper in use increased at an annual

rate of 3.4 percent and iron at a rate of 2.8 percent,

while GNP increased at an average annual rate of 3.2

percent.40


39See Appendix B.4, Table 26.

4oSee Appendix B.4, Figure 3, Figure 5, Table 27.







72

The higher rates of growth of metals in use than

of apparent consumption are to be expected. Stocks of

metals in use would increase even if annual additions to

the stocks (apparent consumption) were to remain exactly

the same for each successive year. Growth rates of

annual apparent consumption represent what is, in effect,

the first derivative of the rate of growth of stocks of

metals in use, to which growth in GNP is more directly

related. Comparing rates of growth in GNP to rates of

growth in apparent consumption of metals has caused

metals to have been viewed as less important than they

actually have been.

While rates of growth in annual production and

apparent consumption of metals can be compared only

indirectly to the rate of growth in GNP, these rates of

growth are important insofar as they reflect demands

made upon resources; the higher the rates of withdrawal,

the more rapid is the decline in the quality of metals

resources that remain, and the more difficult is their

acquisition. On the other hand, the greater is the

amount of value generated by production per ton of

metal, the greater is the value of production that can

be obtained from the use of any given metals supply.

Mining and metals resources will be considered in the

next chapter, but increased efficiency of metals can

be considered here.







73

Throughout the past century, minerals have tended

to be used with increasing efficiency. Greater efficiency

in fuel use, as is commonly known, has greatly increased

the amount of work that can be performed by burning a

ton of coal or a gallon of oil. Similar increases in

production per ton of iron and copper have occurred as

a result of improvements in the quality of the metals

themselves, and of changes in metals markets, and in the

complexity of final products.41 Greater production per

ton of new metal also has resulted from the recovery of

old scrap and from the substitution of other materials

for iron and copper in some processes. Each of these

influences will be considered in turn.

Improvements in quality have been particularly

important to iron and steel.42

As a matter of fact, it is rather misleading to
talk simply about "steel." This term may have
been justified in the early days of the industry
when plain carbon steel was its chief product,
but today there is actually a large family of
steels covering a wide variety of useful prop-
erties. Many of these steels are tailor-made
for a particular application. As one example,
silicon steels are specially designed to allow the
maker of electrical machinery to take full advantage
of their unique electrical and magnetic qualities.
Again, special alloy steels of high toughness at


Production of steel ingots per $1960 billions
of durable goods and construction fell from .93 million
tons in 1929 to .65 million tons in 1960. See Landsberg,
Resources in America's Future, p. 890, Table A16-21.
42
4This has been true in other industries as well.
Cf. William Woodruff, "Growth of the Rubber Industry of
Great Britain and the United States," Journal of Economic
History, XV (December, 1955), 376-91.









high strength levels have been developed for air-
craft landing gear. The stainless steels .
provide good corrosion resistance and are
useful in applications requiring strength at
elevated temperatures .

Today's steel line pipe, because of greater
strength and larger diameter, enables use of
greater pressure to transmit 60 percent more gas
than was possible a decade ago with the same
tonnage of pipe. The new A-36 grade of structural
carbon steel has a yield point 9 percent greater
than that of the A-7 grade which was the standard
for many years. This higher yield point allows
an increased design stress of about 10 percent in
both bridges and buildings and will result in
significant savings in the cost of fabricated and
erected structures.(43)

The effects of improved quality have been twofold.

First, because proportionately more special steels are

being used today, and because these are higher cost

steels, more value is added per ton of metal in the

production of steel itself. Second, the increased

quality of steel of all grades has decreased the amount

of steel needed per unit of final product and also has

increased the durability of the product so produced.

Increased durability has allowed machines to be operated

longer and at higher speeds, thus increasing the amount

of product produced per machine and per unit of metal

used in the machine's construction.

The trend toward increased value of production

per ton of metal also has been accentuated by the

changing nature of metals markets, and this influence


4American Iron and Steel Institute, The
Competitive Challenge to Steel, p. 14.









has been shared by both iron and copper. For example,

the production of rails was a relatively simple operation;

steel rails made right at the plant could be installed

without further processing. When steel left the plant

destined for use in automobiles and other complex

machinery, however, a large amount of additional value

was generated as the raw steel was worked into progress-

ively more complex shapes. Consequently a much larger

value of total production per unit of steel was generated.

The case for copper was much the same. As the

proportion of copper going into simple wire decreased

relative to the amount going into items requiring sub-

sequent manufacture, the value of final products per

unit of copper increased as well.

Not only have changing markets resulted in more

value produced per unit of metal, but increasing

complexity of products within each market category has

increased value per unit of metal as well. Thus, war

equipment, automobiles, machine-tools, and aircraft, as

examples, became considerably more complex, and increased

complexity has served to make them more valuable.

The substitution of other materials for iron,

steel, and copper also has tended to decrease the amount

of metal needed to generate any given level of output.

Aluminum and plastics have been particularly important

in that regard, not only capturing some former iron,

copper, and steel markets, but also denying markets that








under other circumstances would have been of importance

to those metals. Due to its electrical properties, alumi-

num has come to replace copper in many large transmission

lines and in other uses where added bulk is not a crucial

factor. Lightness and wearability have allowed it to

replace steel in a few uses, notably in containers.

Prestressed concrete has taken some of the market

formerly reserved for structural steel, and even plastic
44
warships now are being launched. Fibreglass automobile

bodies and aluminum engine blocks and radiators already

have been used and found successful in many instances

and might find more widespread use in the future were

price and technological advances favorable to such

substitution.

Finally, metals production has been affected

by the recovery of metal contained in obsolete imple-
45
ments.45 In 1910 production of refined copper from

scrap amounted to 17.5 percent of the apparent consumption

of new copper; by 1960 that figure had grown to 37.5

percent.46


44n 1971 two small plastic warships were
launched; pending success of the experiment, future plans
call for production of plastic warships to frigate size.
The principal difficulty at this time is one of cost.

45See Appendix B for data and information relat-
ing to scrap generation, availability, and use.

46Minerals Yearbook, 1945, p. 122; Minerals
Yearbook, 1965, p. 356.








Over the same period the use of scrap steel

increased substantially as well. In 1905, for example,

5.6 million tons of steel scrap were used in the

production of 22.4 million tons of steel. By 1960,

66.5 million tons of steel scrap were used along with

66.6 million tons of pig iron in the production of new
47
steel. The importance of scrap drawn from obsolete

sources was somewhat less, however; use of obsolete

scrap in 1960 amounted to only 19.9 million tons, the

remainder being made up of scrap originating in the steel

plants themselves and in the various places in which

steel scrap was a byproduct of further fabrication.

Although approximately 81 percent of old iron
49
and steel scrap could be reclaimed, for various

reasons only about 50 percent of all new supplies of

obsolete scrap steel is brought to the furnace. For

one reason, scrap steel prices tend to be more variable

than are pig iron prices and wide variation makes


4Minerals Yearbook, 1940, p. 502; Minerals
Yearbook, 1960, p. 635.

48Landsberg, Resources in America's Future, p. 874.

49Cf. U.S. Department of Health, Education and
Welfare, Bureau of Solid Waste Management, Comprehensive
Studies of Solid Waste Management (Washington, D.C.:
Government Printing Office, 1970), pp. 106-08; U.S.
Department of the Interior, Bureau of Mines, Automobile
Disposal, A National Problem (Washington, D.C.:
Government Printing Office, 1967); Institute of Scrap
Iron and Steel, Inc., Addresses and Proceedings, Annual
Convention (Washington, D.C., 1964 and 1965).









planning difficult. Second, the integration of steel

plants has made possible the immediate use of hot metal

from blast furnaces at lower cost resulting from

substantial heat (hence fuel) savings. Third, the

heterogeneous quality of steel scrap makes it difficult

to use under exacting conditions of quality steel produc-

tion. Fourth, steel in some old equipment has not been

collected because of the expense involved in transporting

it to processing centers. Finally, steel scrap is

difficult to process and much of the work must be done

by hand. Steel used in automobiles and containers is

particularly difficult to recycle, and the disposition

of these items has become a serious problem. As a con-

sequence, a stock of scrap steel has been building over

the years and would be available for processing into

new steel should the situation warrant.

Copper differs from steel and iron in that

regard since the amount of copper going into new

production shortly after its retirement is high

(although the amount potentially recoverable is lower

than steel), principally because copper retains its

pure form in many of its applications and can be reused

simply by melting and reshaping.

Each of the factors mentioned above has

contributed to an increased value of product per ton of

metal, or viewed from the other side, a decreased amount






79

of metal required to produce each dollars worth of product.

Nonetheless, demands for new metals have continued to

increase at a very rapid rate, and the amount of metals

in use relative to GNP has not changed markedly. Although

more is being made from each ton of metal, a greatly

increased volume of total production has swamped increases

in efficiency of metals use; the net effect has been a

continually increasing demand for new metals inputs.

These increases in the physical volume of

production often tend to be overlooked since changes in

production in the past century have improved product

quality so greatly. It is quite true that better

implements are being made of metal now than before; iron

used to produce a carriage wheel in 1860 might today be

converted into stainless steel used in a supersonic

aircraft. But that fact should not distort the picture

relative to increases in volume. Very few supersonic

aircraft, or anything else for that matter, could be

produced if the amount of metal available for their

construction now were the same as it was in 1860.

Improvements in quality have been the product of thought

and planning; increases in quantity have occurred

primarily as a result of increased extraction.

In the past, as projects for which metal was

destined were completed, the need for additional amounts

of the metal to satisfy those ends diminished, a

phenomenon best illustrated by the virtual






80

completion of the rail network by 1900, and the subsequent

decline in the amount of steel devoted to that end. One

might speculate about future needs for additional numbers

of automobiles, bridges, and buildings. To the extent

that production of these or other like items is increased,

the subsequent demand for steel and iron may be increased

as well. The same holds true for copper and its various

applications. In brief, the rate of metals demand for

any given year is tied to the needs of metals using

industries and modified by changes in markets, complexity

of product, and by materials substitution.

It is difficult to foretell just what the demand

for metals will be in the future but several of the

factors mentioned above tend to indicate that the ratio

of metals extraction to national product will continue to'

decline. Increased complexity of products, substitution

of other materials, and productive activity devoted to

non-metals using endeavors would lessen the rate of

increase in metals demand. But, while the rate of growth

in annual metals consumption has been less than that of

output as a whole, the annual demand for metals has not

stabilized; on the contrary, the amount of metals in use

has in fact continued to increase at an increasing rate.50


50See Appendix B.4 for information related to
rates of increase in metals consumption and metals in
use.















CHAPTER V

THE SUPPLY OF IRON AND COPPER AFTER 1860

Even though changing technology and expanding

production caused increased demands to be made for iron

and copper within the United States after 1860, domestic

mines proved more than equal to the task by increasing

their metals production apace. In 1860 United States

mines produced only 2.9 million long tons of usable

iron ore and 8.0 thousand short tons of copper. By

1900 iron ore production had increased tenfold to some

27.3 million long tons, and copper production to 303

thousand short tons. Rates of metals extraction

continued to increase rapidly, and by 1960 iron ore

production had reached 88.8 million long tons and

domestic copper production had grown to 1.08 million

short tons.


1Iron ore figures represent usable ore, the
iron content of which has varied from year to year,
generally ranging from about 40 to 60 percent.
Copper figures represent copper content of mined ores.

Historical Statistics, pp. 365-66, Series M
195-200; p. 368, Series M 225.


- 81 -









But even the vast metals deposits of the United

States were not limitless, and by the 1950s the United

States had begun to import substantial quantities of

iron and copper ores. Iron ore imports, which in 1900

had amounted to only 898 thousand long tons, reached 34.5

million long tons in 1960, an amount greater than total

domestic production had been in 1900, and whereas the

United States had been a net exporter of copper in 1900,

by 1959 apparent consumption of copper exceeded domestic

production by 258 thousand short tons,3 only 45 thousand

short tons less than total domestic copper production

had been in 1900. The metals position of the United

States had changed substantially over the years, from

one of abundance to one of scarcity. We will now deal

with that change and its implications.

In 1860 demands for metals relative to the

amounts of ore available were slight. The country was

so large, the produce so bountiful, that almost every

resource seemed inexhaustible. A typical comment of

the age is to be found in the Census of Manufactures of

1860.

This whole country C range extending from North
Carolina into Alabamaj possesses an incalculable,
inexhaustible abundance of the richest ores, while
its production of iron still remains at a minimum. (5)


3Ibid.

Figures comparing domestic production of iron
and copper to domestic consumption for 1900-1960 are pre-
sented in Appendix B.2, Table 20.

Manufactures of the U.S. in 1860, p. clxxvi.









Deposits of iron and copper were particularly

extensive in the Lake Superior region, and Michigan's

Upper Peninsula furnished the first real spurt in copper

and iron ore production. Copper's existence in the far

North country had been known by white men since as early

as the mid 1600s, but Upper Michigan was a forbidding

place, far distant from centers of civilization; and

little effort was made to investigate its resources.

Reports of extensive copper deposits continued

to filter back to the East, but it was not until 1841

that a substantive geological report of the region was

made by Douglas Houghton, one-time mayor of Detroit and

state geologist. Houghton's report led to a rush for

copper. In 1844 the first copper company was formed

and by 1845 copper production in Upper Michigan amounted

to 12 tons; by 1865 production had risen to almost

7,200 tons.7

Michigan copper was of exceptional quality,

occurring in an almost pure state as native ore. Huge

chunks of "mass" copper were taken from Michigan mines,

one a 420 ton monster some 46 feet long, 12-1/2 feet


Indians had employed a crude technology to
mine the region, and some of their shallow pits may be
found there today.

T. A. Rickard, A History of American Mining,
(New York: McGraw-Hill Book Company, 1932), p. 231.







8
wide and 8-1/2 feet thick. Nearly 70 percent of the

copper mined in Michigan in 1861 was mass copper, but as

time passed the copper content of Michigan ore fell; by

1890 mass copper had become quite scarce.

As ore ran thin and mines grew deeper,9 mines

were forced to close. Today most Michigan mines have

been abandoned; shaft houses that remain stand silent,

and only a small mine at White Pine remains in operation.

Rock piles are to be seen alongside almost every town,

and old company houses, now privately owned, remain; but

most of the people have gone or are leaving. The copper

country of Upper Michigan is a thing of the past; the

mines emptied of their rich ores.1 Mining has moved to

the West.

Arizona, which held third place in copper output

at the turn of the century, behind Michigan and Montana,

now is in first place by a wide margin. In 1969 Arizona

mines contributed 52 percent of domestic copper, Utah

was a distant second at 19 percent, Montana fifth at 6


8Ibid., p. 232.

9The Calumet and Hecla Quincy mine, whose shaft
house still stands atop a tall hill overlooking the
cities of Houghton and Hancock, would become more than
a mile deep by the 1930s.

10Significant deposits remain in the Upper
Peninsula and account for a substantial share of
remaining United States reserves; but because
mineralization is erratic and many of the outcrops are
concealed, exploitation of remaining deposits is
difficult.







85

percent, and Michigan operated only its one mine.11 The

richness of copper ores mined in all the states is not

nearly what it once was. The average copper content of

domestic ores fell steadily during the past century,

from an average of 3 percent in 1880 to 0.6 percent in

1969. The copper situation deteriorated so greatly that

a quota of 50,000 tons was established in 1968 on the

export of copper refined from domestic ores and a similar

quota of 60,000 tons by copper content of scrap also was

in effect.12



At about the same time as copper was first taken

from the Upper Peninsula, iron was discovered in the same

area, a little to the south and east, around what now

is the town of Marquette. The Soo Canal was completed

in 1855, and in August of that year the first ore

shipment was sent down Lake Michigan. Production

increased year by year as new mines were added, moving

always to the west along the base of the Upper Peninsula.

In 1860 the major iron ore producing states still

were in the East, however; New England states produced

51,700 tons of ore in that year and New York, Pennsylvania,

New Jersey, and Maryland combined for another 724,500


M1Minerals Yearbook, 1969, p. 453.

12Ibid., p. 451.









tons, of which Pennsylvania contributed 508,100 tons.

Michigan added 130,000 tons;13 Minnesota, of course,

produced none; but it was only a matter of time until

the vast deposits of Minnesota would be discovered and

mined.

The Vermillion range came into production in

1884, and the Mesabi, which was to become the most

productive source of iron in the world, came into

production in 1892.

During the period 1854-1892, while the uses of

iron expanded so rapidly in the United States, all of

the major ore deposits of the Lake Superior region were

discovered and tapped. By 1969 they had yielded 3.9

billion tons,4 almost 18 billion cubic feet of pure

iron, or approximately 80 percent of all the iron mined

in the United States, the Mesabi alone contributing

over 2.7 billion tons of that total.

The ore of the Mesabi remained rich for most

of that time, but increased demands of the wartime

economy of the 1940s, combined with domestic needs

during and prior to the war, exhausted the richest

ores. By the 1940s many of Minnesota's mines had been

closed and the mining towns abandoned, and Michigan iron

mines were growing deeper.


13Manufactures of the U.S. in 1860, p. clxxvii.

14Minerals Yearbook, 1969, p. 576.









During the 1950s, with the soft, rich iron

deposits of the Mesabi running low, a new method of

concentration gave the Mesabi renewed life. Some of its

very hard ore, called taconite, was magnetic, and after

the ore was finely crushed, the iron content could be

extracted magnetically and remolded into pellets suitable

for use in blast furnaces. But by 1969 still more of the

smaller mines of Minnesota and Michigan had been closed.

Mining activities, which had been called upon to

meet rapidly increasing domestic needs over the past

hundred years, reduced initially "inexhaustible" iron

and copper resources to amounts which appear not only

limited but quite capable of exhaustion within a very

short time. A definitive knowledge of the amounts of

iron and copper ore of relatively high concentration

still available in the United States is difficult to

determine, first because of difficulties associated

with exploration and proving of ore reserves, and

second because a great deal of secrecy is practiced

by mining concerns regarding exploratory operations and

their results.15 But the days of shipments of mass

copper from Michigan and high-grade copper from Arizona


15Data on copper and iron reserves are presented
in Table 2.









seem to be gone, and the end of the Mesabi's rich ore

is in sight.16

Although one can only speculate as to what the

future holds with regard to domestic ore availability,

it is rather disturbing that few discoveries of distinct

large ore bodies have been made in the United States

since shortly after the turn of the century; the major

copper and iron deposits now known were known then and

the richest ores have been taken from them. Mining

enterprises have managed to locate additional amounts

of lower grade ores around known areas of high metals

concentration on a fairly reliable basis in the recent
17
past,1 but the job of finding new domestic ores has

become progressively more difficult, and the ores have

become leaner.



Leaner ores, because they require more

processing, mean higher costs unless cost can be held

in check by technological advance, and, for most of the

period following 1860, the battle has been won by

technology.



6Domestic copper reserves are expected to be
insufficient to meet domestic needs through the present
century, and iron ore production is expected to be
supplemented greatly by foreign production for the
same period.

7Cf. C. K. Lerth, World Minerals and World
Problems (New York: Whittlesey House, McGraw-Hill Book
Company, 1931).









In 1860 almost all work in the mines was done

manually, and almost all mining was performed underground.

Men worked by light of candles or burning lamps, venti-

lation was poor and drilling necessary for the placement

of explosive charges was done by hand.18

In all, the miner's job required considerable

hard work and technical skill, both in mining and in the

selection of ores. Men labored on a piecework basis,

paid by the amount of ore brought to the surface, and

care was taken to work the richest veins of ore as

thoroughly as possible. Waste was minimized and subse-

quent refining made easier by precautions taken to insure

that the richest ores were not diluted by low-grade ore

or outright extraneous materials. To prevent the

addition of too much non-metallic substance necessitated

a minimum of blasting and a maximum of picking.

Once freed from its surroundings, ore was

broken, again by hand, into pieces of manageable size,

hand loaded and transported to the surface with the

use of animal power, usually mules, but not

infrequently by men. Iron ore at that stage generally

was of sufficient purity to be shipped directly to blast

furnaces; but with copper, the same happy situation did

not usually prevail, and as grades of copper ore became

18
Drilling required considerable skill on the
part of each member of the drilling team, since one man
held the drill in place, turning it occasionally, while
the others struck it hard with a hammer.




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