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By G. Reinberg, C. D. Clarke

Most underground mining operations are dependent on pumping installations to keep the mine unwatered. The reliability of such installations is obviously of paramount importance. The volume of water to be handled is often considerable, and the total head is relatively high. In these cases, both capital cost and operating expense of the pumping installations will become significant factors in overall mining costs. To insure reliability and to keep efficiencies, and hence operating costs, within acceptable limits it goes without saying that mechanical maintenance of a mine pumping installation must receive scrupulous attention at all times. Large mine pumping installations today almost invariably use multistage centrifugal pumps, since positive-displacement units would not be economically competitive except under very unusual conditions of small volume combined with extremely high heads. Centrifugal pump maintenance, under ideal circumstances, would be confined to parts subject to normal running water, i.e., bearing surfaces, stuffing box packing, and shaft sleeves. Under adverse conditions, however, metal may be lost from the wetted surfaces of a pump by erosive or corrosive action of the pumped fluid, and maintenance costs can easily attain enormous proportions.

Aug 1, 1956

By Henry G. Morris

The use of compressed air for the transmission of power has reached so great a development that we find numerous large establishments devoted to the manufacture of machinery for its production and application, and special periodicals published for the dissemination of information on the subject. Moreover, its employment is so general in mining operations that no apology is needed for the presentation to the Institute of such a paper as the present. The admirable articles of Mr. E. A. Rix, published in Conzpressed Air, show a wide range in the mechanical efficiency of air-compressors, varying, under different conditions, from 15 to 60 per cent.; and it is evident that any

Jan 1, 1902

By William F. Boericke

KIRKLAND LAKE and Porcupine in 1931 accounted for more than $41,625,000 of Ontario's total gold production of $43,117,688. For the first time, the younger camp surpassed the older in gold output, producing $21,734,000 against $19,891,000 for Porcupine. Present output of both camps is increasing, and should pass the record figures of 1931 before the year is out. In May of this year, Porcupine mines milled 285,759 tons, with a bullion value of $1,810,009; the corresponding figures for Kirkland mines are 149,188 tons and $2,104,757. A much higher average value per ton for Kirkland ore, $14.10 against $6.33 average for Porcupine accounts for the difference. The two fields are about 100 miles apart by rail, and there are important differences in the character of the ores, which accounts largely for the difference in milling costs and in final tailing values, despite excellent metallurgical work in both the fields.

Jan 1, 1932

By George Otis Smith

WHAT American can enter this Western empire without his imagination being stirred by the stories of its past-yes, and even more by visions of its future! Whether we travel by rail or by auto, our pathway has its traditions of exploration and its records of early settlement. The mountain passes and the routes used by today's commerce are lasting memorials of the pathfinders whose unconquerable purpose was to search out a way-Lewis and Clark, Bonneville, Pike, Long, FrBmont, their names still live in your rivers and lakes and peaks. It was the glory of these adventurers that they spied out the land so that others might follow that long pro- cession of pioneers who occupied the new country- fur traders, gold miners, cattlemen, and homesteaders. Each of these pioneers attacked the problem of transportation in his own way, and each sought by his own method to win the resources whose richness had been reported by the pen of the Government explorer or by the swift rumor of the unnamed and unfamed adventurer. Trails were worn deep by these home or fortune seekers as they passed through the mountain barriers in successive waves-and these were waves that did not ebb, for this was an army of occupation. Along these main pathways of the West, as one historian has pointed out, the figure of chief interest was the sad- faced woman sitting on the front of the covered wagon.

Jan 1, 1926

By SIDNEY ROLLE

ACURSORY glance through the literature on the subject reveals that the ablest minds in the land are devoting themselves to the great question of labor, of which employment is one of the fundamentals. Volumes have been written and the end is not in sight. Employment management is today about in the position that efficiency was 15 years ago. During the early days of the war, and perhaps for a year or so before, labor was plentiful. As the war progressed and Europe drew on us for munitions, employers began to compete with one another for', all, classes of labor. Labor was difficult to obtain, wages rose, the labor turnover increased, and employers began to install employment departments, welfare plans, and all sorts of schemes, but the labor efficiency dropped. As the war progressed, greater and greater production was demanded. New factors were introduced each day. The government, labor unions, industrial councils, all tended, it seemed, to make the situation almost intolerable. Wages rose to fantastic heights, the cost of living rose higher and higher, and the efficiency dropped still further.

Jan 1, 1921

THE sessions of the Institute were opened on Tuesday evening, October 26th, at Garrett's Hall, by Mr. Charles A. Otis, Chairman of the Local Committee of Arrangements, who welcomed the Institute to Cleveland, and introduced Col. Charles Whittlesey, who ad¬dressed the Institute briefly on the coal deposits of Ohio. Col. Whittlesey described the situation and character of the coal-beds of the State, and gave a short history of the use of raw coal in the manufacture of pig-iron, and spoke of the excellent quality of metal produced. The aid that a body of scientific miners and metal¬lurgists were capable of giving in the development of coal and other mineral resources was dwelt upon, and the hope expressed that the visit of the Institute to Cleveland might be profitable as, well to its members as to the citizens of the State. The President, Mr. A. L. Holley, responded to the welcome of Mr. Otis and of Col. Whittlesey, and read an introductory address on Some Pressing Needs in the Iron and Steel Manufacture. The following members and associates, duly proposed and indorsed by the Council, were then elected MEMBERS. Alfred S. Bertolet, - Youngstown, Ohio. Henry Binnse, - Chicago, Ill. John Birkinbine, - Philadelphia. Andrew A. Blair, - Watertown Arsenal, Mass. Ogden Bolton, - Canton, Ohio. Lloyd Booth, - Youngstown, Ohio. E. Borda, - Philadelphia. N. P. Bowler, - Cleveland, Ohio. Alexander E. Brown, - Cleveland, Ohio. C. F. Brush, - Cleveland, Ohio. S. M. Carpenter, - Cleveland, Ohio. James Cartwright, - Youngstown, Ohio. Henry Chisbolm, - Cleveland, Ohio. Wilson B. Chisbolm, - Newburgh, Ohio. W. H. Clarke, - Millertown, Pa. James E. Clayton, - Ore Knob, N. C.

Jan 1, 1876

The sessions of the Institute were opened on Tuesday evening, October 26th, at Garrett's Hall, by Mr. Charles A. Otis, Chairman of the Local Committee of Arrangements, who welcomed the Institute to Cleveland, and introduced Col. Charles Whittlesey, who addressed the Institute briefly on the coal deposits of Ohio. Col. Whittlesey described the situation and character of the coalbeds of the State, and gave a short history of the use of raw coal in the manufacture of pig-iron, and spoke of the excellent quality of metal produced. The aid that a body of scientific miners and metallurgists were capable of giving in the development of coal and other mineral resources was dwelt upon, and the hope expressed that the visit of the Institute to Cleveland might be profitable as well to its members as to the citizens of the State. The President, Mr. A. L. Holley, responded to the welcome of Mr. Otis and of Col. Whittlesey, and read an introductory address on Some Pressing Needs in the Iron and Steel Manufacture. The following members and associates, duly proposed and indorsed by the Council, were then elected MEMBERS. Alfred S. Bertolet,.. .. . Youngstown, Ohio. Henry Binnse,. Chicago, Ill. John Birkinbine,.. .. . Philadelphia. Andrew A. Blair,. .. .. Watertown Arsenal, Mass. Ogden Bolton,. .. .. Canton, Ohio. Lloyd Booth,..Youngstown, Ohio. E. Borda,..Philadelphia. N. P. Bowler,.. .. . Cleveland, Ohio. Alexander E. Brown,.... Cleveland, Ohio. C. F. Brush,.. .. .Cleveland, Ohio. S. M. Carpenter,.. .. . Cleveland, Ohio. James Cartwright,.. .. . Youngstown, Ohio. Henry Chisholm,.. .. . Cleveland, Ohio. Wilson B. Chisholm,.. .. . Newburgh, Ohio. W. H. Clarke,.. .. . Millertown, Pa. James E. Clayton,. .. .. Ore Knob, N..C.

By P. B. Bucky

IN previous publications1 it was shown that a scalar model of any weighty structure, where the stresses produced are mainly due to gravita-tional forces, will behave similarly to its prototype if the model and proto-type material are the same arid the model is placed in a centrifugal field of force (substituted for the gravitational field) which has been increased in the same proportion as the linear model scale is decreased. This principle is now being applied to a study of the behavior of mine structures in an attempt to determine the laws that control them. The importance of using models as a means of solving mining problems has been discussed previously, yet it may be well to reiterate here that this method of research and type of solution have been productive of far-reaching results in other engineering fields, notably those of hydraulics and aerodynamics. Model research is a comparatively cheap and time-saving method of checking practical experience. Up to the present time the best guide to what will happen underground has been the judgment of the man who has observed most and been longest acquainted with the local conditions. His experimental work underground is limited by the elements of cost, time and danger, while failure is seldom permissible. In a model, as in a test tube, all elements that affect the solution of a problem are under definite control. Each element may be varied independently at will and its effects noted. Experimental work on a small-scale model may there¬fore be performed at a comparatively small expenditure of time and money, instead of on a full scale in the mine, where the cost, time, and danger elements are necessarily great. The experiments described in this paper are to be considered as part of a progress report and a continuation of Technical Paper 425. One object of the research program is to make each experiment point the way for further research on that particular phase of the general problem. The results and conclusions presented here are therefore not to be considered as final, but are to be interpreted as

Jan 1, 1933

By A. J. Williams

THE province of Saskatchewan, situated in the center of the Great Plains region of Canada, has, like most prairie areas, an essentially agricultural economy. Most of its population of about 860,000 is located in the southern half of the province in the farming and ranching areas. To the north of the prairie is a broad forested belt supporting a considerable timbering industry, and the northern one third of the province is glaciated pre-Cambrian rock formation. This latter area is relatively barren of vegetation, but the presence within it of a considerable variety of radioactive, noble and base metals, and industrial minerals has been shown by prospecting in recent years.' Glacial Geology The Keewatin ice sheet, considered to have accumulated in the country to the west of Hudson Bay in Pleistocene time, covered at its maximum advancement almost all of Saskatchewan and extended south of the international boundary. Only in the Cypress Hills in the southwest and around Wood Mountain in the south central portion of the province did the preglacial formations escape the action for this glacial period. The bedrock of the plains and forest areas therefore is overlain by moraines and modified glacial drift, which vary in thickness from a few feet to 400 or 500 ft.' Glacial action in the pre-Cambrian area of the province was largely erosional, most of the more recent formations and some of the pre-Cambrian rock being transported out of the area to the south and west. It has been estimated that about 13 pct of this area is composed of lakes and rivers not too adaptable to rail or water transportation, so that until the use of aviation for exploration purposes became general, development of the area was slow. To the south, the heavy mantle of glacial drift has to some extent deterred the discovery of industrial minerals in the bedrock underlying the forest and prairie regions3 At the same time, this drift contains numerous deposits of those most elementary and necessary industrial minerals, sand and gravel. Sedimentary Basin The major feature of the sedimentary deposits underlying the plains regions is the basinal structure known as the Moose Jaw syncline, which runs from the southeast corner of the province in a northwesterly direction. To the west of this syncline the formations curve upward, then have been faulted and further upthrust to appear at the surface in the foothills of the Rockies in Alberta; to the east and north they curve upward into Manitoba and northern Saskatchewan, but the surface contacts are covered mostly with glacial drift.238 The axis of the syncline dips to the southeast, so that there is also an upward trend of the formations along the axis to the northwest. In illustration of the regional structure underlying the province, the pre-Cambrian basement has been logged in drillholes at the following depths in several locations: Ogema (south central), 9390 ft; Gronlid (northeast), 2599 ft; Vera (northwest), 4422 ft; Big River (north northwest), 2348 ft. Fig. 1 indicates the general surface geology of the province, ignoring such glacial overburden as may overlie many of the bedrock formations. Also indicated is the approximate location of the axis of the Moose Jaw syncline.' Industrial Minerals Clays: The province is fortunate in possessing a widespread distribution of clays of ceramic value, ranging from those used for heavy structural products to the high grade pottery and china clays. Shales suitable for brick and tile production are found in the Upper Cretaceous and Tertiary formations across the south of the province where the glacial drift is thin or nonexistent. Many deposits of glacial lake clays suitable for such wares are found scattered over the rest of the province south of the pre-Cambrian area. The Whitemud formation of the Upper Cretaceous is a narrow sedimentary band of secondary clays found intermittently at points across the south of the province where glacial action did not disturb or remove them.' In the southwest corner of the province, around Eastend in the Frenchman River valley, the refractory clays of this formation are contaminated somewhat with iron compounds or other alteration products of basaltic rocks. This eliminates the use of those clays in true whitewares, as they fire to creamy buff shades at the lower temperatures and to a blue-specked grey at cone 8 to 12, (2280°F to 2390°F), the range commonly used in firing whiteware. However, for use in the production of colored artware, caneware, stoneware or crockery, and sewerpipe, this type of clay makes an excellent body that requires little or no addition of flint, feldspar, or other fluxing materials such as are required in the higher class of ware.' It is not a grade of clay that can be shipped great distances to the manufacturing centers, but a market for considerable tonnages has developed at nearby Medicine Hat, where cheap natural gas is available for the firing of the ware. Farther east in the south central portion of the province, the clays of the Whitemud formation are generally more refractory and white burning. The formation is divided into three zones, consisting of white clays, brown shale, and white sandy clays.

Jan 1, 1953

By J. F. KENP

THE White Knob copper-deposits are situated about three miles south of Mackay, on the Salmon River .branch of the Oregon Short Line Railroad, in Custer county, Idaho. An outline-map of this district is given in Fig. 1. The deposits have been known and spasmodically worked for many years, and a total of over 3.5 miles of tunnels, shafts and other workings has been driven with a view to their development. These extensive excavations have exposed the deposits sufficiently to permit a careful geological examination. The peculiar features which give special interest to this paper are the branching, free-like form of the ore-bodies; the absence of zones of secondary enrichment in the partly oxidized pyritic deposits, and the fact that while the deposits are associated in a general way with the contact of an eruptive rock with limestone, which it penetrates, the garnetization has taken place not in the limestone, as is the usual case, but in the igneous

Mar 1, 1907

By AIME AIME

MOST recently elected to the limited group of Honorary Members in the A.I.M.E. is the distinguished Australian metallurgist, Guillaume Daniel Delprat. His citation reads: "in recognition of his distinguished achievement as metallurgist, engineer, and administrator in the production of ferrous and nonferrous metals," Mr. Delprat's ability and experience in both the ferrous and nonferrous fields at once distinguishes him from most of his professional brothers. Mr. Delprat's nativity was neither Australian nor English, for he was born in Delft, Holland, in 1856, and educated in Amsterdam. At the age of 22 he went to Spain, as metallurgist for the Tharsis Sulphur and Copper Co., Ltd. Afterwards he spent some time with the Bede Metal and Chemical Co., which had mines in both Spain and Norway, and of which company he became general manager. Other positions of responsibility held by Mr. Delprat before he went to Australia included the managing directorship of the Cordova Exploration Co., with properties in Spain and Canada; of the Rincon Silver-Lead Mining Co., in Spain; and of the Deloro Gold Mines, in Canada.

Jan 1, 1936

By G. H. BUCHANAN

ALTHOUGH the nomenclature of the chemical tools of flotation is probably familiar to you, it will do no harm to review it; . In order to make the terms more real I have employed an illustration which likens flotation to an old-fashioned balloon ascension, such as we witnessed in boyhood at the county fair. The mineral to be floated is the aeronaut, conspicuous in his gilt-spangled tights, who is to be separated from you and me and the other small boys who are standing about, said boys being the g-a-n-g-u-e, or g-a-n-g, as we would have spelled it. The oil film surrounding the bubble is the counterpart of the silken fabric of the balloon, and bubble and balloon will rise for. the same reason, namely. that the fluid outside it is heavier than the fluid within. In flotation reagent nomenclature the material of which the bubble is made is called the "frother.",

Jan 1, 1930

By C. C. Nitchie, G. S. Brooks

With the gradual depletion of the natural-gas pools of the Kansas district, together with the uncertainty of further cheap fuel developments, some of the western zinc companies turned to the coal fields, attracted by their permanency and the success of the Matthiessen & Hegeler Co. and the lllinois Zinc Co. Being then confronted with the problem of using a relatively high-priced fuel, although the ultimate supply was very great, the fuel economies of the kilns and furnaces became of far more importance, and the more modern equipments, as a result, embodied distinct gaias in this phase of the business. In addition, there have been some pronounced advances in the actual making of gas from these coals. Increased efficiency in gas making has contributed its hare to lowering costs and those plants located in the higher priced fuel districts have probably been obliged to study these economies somewhat more closely. Naturally, many beneficial changes have resulted in both practice and apparatus in these sections. On certain western coals, for instance, the actual saving in fuel consumption has been 50 per cent. By this is meant that, where about 1.75 tons were burned to smelt 1 ton of oxidized ore, 0.7 to 0.9 ton is now required. While comparisons by T. R. Ingalls1 of fuel economies in smelting in this country and Germany before the war may, in general, be correct, they do not appear to do justice to the more progressive American practice. It is doubtful whether German plants were substantially bettering these fuel ratios. Data furnished by Bender and Frams do not afford records averaging less than 0.9 ton coal per ton ore on materials from 40 per cent. to 50 per cent. zinc. Fuels As producer fuel, Illinois, Indiana, and Kansas coah offer a wide range of material, although varying much in their amenability to gasscation. The proper fuel for each plant can only be determined after com-

Jan 1, 1920

By AIME AIME

THE Committee on Elimination of Waste in industry came into existence from a speech in Washington by Mr. ,Hoover, in November, in which, he said: It is primary to mention the three-phase waste in production: first, from intermittent employment; second, from unemployment that arises in shifting of industrial currents; and third; from strikes and lockouts. Beyond this elimination of waste there is another field of progress in the adoption of measures for positive improvement in production.

Jan 1, 1921

By H. T. Kennedy, J. E. Little

An empirical equation for the prediction of the viscosity of several pure paraffin hydrocarbons and nitrogen is presented. It involves temperature, pressure and six constants of the material, and it applies reliably to both liquids and gases. The equation is similar in form to van der Waal's equation of state. For the paraffin hydrocarbons methane through r-hexane and nitrogen, an average absolute deviation of 1.9 percent was obtained on 1,006 data points described in the literature by 14 authors. When this equation is extended to complex, liquid hydrocarbon mixtures, a correlation was obtained with an average absolute deviation of 9.9 percent. INTRODUCTION Equations describing the flow of gas and liquid through porous media contain the viscosity coefficient of the fluid. If other pertinent variables remain constant, the volume rate of flow is inversely proportional to this coefficient. In dealing with condensate fluids and volatile oils, however, the compositional effects resulting from changing pressure materially affect the viscosity. The effect of compositional changes also may be significant in certain secondary recovery or pressure maintenance processes, notably miscible displacement or gas injection. Early attempts to describe the performance of reservoirs utilized a volumetric material balance method wherein gas and liquid in the reservoir were identified as produced gas and liquid at the surface. This method of analysis proved adequate for reservoirs at moderate temperature and pressure that contained gas with moderately low amounts of condensable materials. The volumetric material balance procedures for "black oil" reservoirs leave much to be desired when applied to condensate and volatile oil reservoirs because phase behavior and compositional changes are relatively more important in these cases. The alternative is a compositional material balance, which in turn, requires a correlation of properties of the reservoir fluid with composition. This paper supplies this correlation in regard to viscosity, for reservoir crude oils. REVIEW OF LITERATURE The literature contains many empirical equations describing the effects of composition, temperature and pressure on the viscosities of pure liquids and binary liquid mixtures. However, the applicability of a majority of these equations is limited to very low pressures and to a small number of systems. Most of them, when applied to complex hydrocarbon systems, are of little value. The lack of utility of the majority of equations results from the fact that they were developed to show the separate effect of temperature, pressure or composition on viscosity, but not to predict the viscosity as a function of all three variables. And with the few exceptions noted below, they were developed to apply to much simpler systems than hydrocarbon mixtures. Eakin1 developed an equation for the viscosity of pure light hydrocarbons applicable in the gas, liquid and dense fluid regions, and in its most general form is written as µ - µo =A(ebP - e-cpk) The pure component viscosity at atmospheric pressure and temperature T, µo, was calculated using the Sutherland equation: µo = BT3/2/T + S The constants in Eakin's equation permitted the term e-CPk to become quite small at high densities (above 0.215 gm/cc), and the general equation would simplify to

Jan 1, 1969

By AIME AIME

The XCVIIth meeting of the Institute for the reading and discussion of papers will be held at Spokane, Wash., beginning Monday, Sept. 27, 1909, as already announced in Special Circulars of May 8 and Aug. 14, 1909, and in the Bulletins for June, July, and August. The meeting will be preceded by a tour through Yellow stone Park and visits to Butte and Anaconda, and will be followed by visits to the Coeur d'Alene district, to the Alaska-Yukon-Pacific Exposition at Seattle, to the mining- and smelting-plants near Salt Lake, and to the iron- and lead- and zinc-plants at Pueblo. The special train for the party' will leave Chicago, September 16, and return about October 12. Details of the itinerary are given later in this announcement. The Secretary of the Spokane Local Committee is Lyndon K. Armstrong, 615 Hyde Block, Spokane, Wash., to whom should be addressed all inquiries concerning local matters. The control of the papers and proceedings will remain in charge of the Institute office, as usual. It is greatly to be desired, both in behalf of the Institute and in recognition of the many courtesies to be extended on the trip, that the excursion party be made larger. Exceptional facilities to visit the many mines and smelters have been freely provided; and members are requested to make all reasonable effort to attend the meeting at Spokane and participate in the excursions. For those who cannot join in the entire trip, it may be possible to provide special Pullman accommodations after leaving Yellowstone Park. In order to make the necessary arrangement, however, the names of members and guests contemplating this partial trip should be sent at once to Theodore Dwight, 29 West 39th Street, New York City. The general cost of the trip per member will be $300, which includes transportation, berth, and meals for the entire trip from

Sep 1, 1909

By Wilhelm Borchers

IN all special branches of the chemical and metallurgical industries, in which large electric furnaces became necessary for carrying out new processes or for the improvement of old ones, the development of the electric furnaces took place on much the same lines. The endeavors to make a success of a new idea brought forth many ingenious designs, which, however, almost without exception, furnished the proof that the safest and shortest way to practical success is the utmost simplicity of construction of the necessary apparatus. Our knowledge of the qualities of materials for building electric furnaces and of the constituents of the furnace-charges, especially their electric conductivity and their chemical affinity . towards one another at high temperatures, is still far from being complete, and from this fact we must conclude that the smaller the number of elements in the construction of a furnace, the fewer the number of unreliable factors both in the construction and in the operation of the electric furnace. This conclusion deserves special attention when an electric furnace for making steel has to be chosen from the constantly growing number of inventions, inasmuch as the chief con¬stituent of steel, the element iron, is a substance which in its liquid phase has so great an affinity fir those elements which are to be removed from the charge, that it is very difficult to comply with the following conditions: 1, to beat the refining-slag to the highest point of its chemical activity ; to prevent the iron from entering the slaw, or, where this cannot be done, to make it enter so that it finally appears in the end-product

Jan 1, 1910

By AIME AIME

PLANS are now well advanced for the joint meeting of the Institute and over a dozen other engineering societies in Chicago during the week beginning June 26: Engineers' Week at A Century of Progress. All engineers planning to visit the Fair will find it to their advantage to be present at this time so far as the Chicago attractions are concerned, and Eastern members will also have the advantage of special transportation arrangements on June 24 and 25. The tentative program is given at the bottom of the next page. Monday morning, June 26, will be reserved for registration of members and guests and the Woman's Auxiliary at the Stevens Hotel, where special rooms will be provided. A luncheon will also be served there, and in the afternoon, a technical session on nonmetallics. Instead of having the big family dinner that evening at the Stevens, as at first proposed, the local committee has planned to have it at the Fair Grounds, where special facilities have been arranged. A meeting of the Board of Directors and a few invited guests will precede the dinner. All members and guests are likely to be interested in visiting the Museum of Science and Industry, so that will be the sole event on the program for Tuesday morning, June 27. The big attraction there at present is the model coal mine, the first operative coal mine ever built for exhibit purposes. It is based on the Deutsches Museum mine at Munich, but goes far beyond that in realism, and takes the visitor on an extended tour underground. It shows him in half an hour more types of modern mining machinery and coal geology than he would be likely to see in a week's underground study in the coal fields. The Institute members will be the first group to go through this mine.

Jan 1, 1933

By Walter J. Mead

By American tradition, if not by rational decision, publicly owned natural resources have been transferred to private industry for processing. The process of transfer requires specific determination of the price which the patentee, buyer, or lessee must pay to the government in exchange for the right to develop a resource, and selection of the patentee, buyer, or lessee from among several possible contestants. Pricing of natural resources owned by the government presents a set of problems quite different from ordinary commodity pricing. Natural resources in situ are not homogeneous commodities. Within any class of natural resources, specific leasable parcels will differ in value by reason of location and accessibility, as well as quality and quantity. Thus, there is no "going price;" every lease within a specific resource class will have a different value. To complicate further the pricing and buyer selection problems, competition may not be reliable. Natural-resource markets are characterized by oligopsony conditions. In a significant number of cases, as will be shown later, there has been only one bidder for a given lease, and in most lease sales the number of bidders is equal to or less than three. As a further complication, there is great uncertainty regarding the value of specific resources, even among the best-informed buyers, as well as within the leasing agency. In some instances, particularly with regard to oil and gas resources, there may be uncertainty about the presence of resources, as well as the quantity and quality of any resources contained in the tract offered for lease. In other cases, such as oil shale and some deep ocean minerals where new technologies are involved, the presence of the resource is clearly established. There may be a relatively high degree of knowledge about the quantity and quality of the resource, but there is great uncertainty concerning the cost of production. These problems in total make it difficult for the leasing agency to appraise accurately the resource to be leased, as well as for the potential bidder to calculate a bid price that will yield him a normal profit. The pricing goal of the federal government as the seller or lessee may be to capture the economic rent; that is, the price of a resource might equal its discounted present value. A required price substantially above this amount would either generate no bids, or, in the long run, would bankrupt the buyer. A price below this amount is a disguised subsidy to the lessee. A subsidy to mineral lessees, as to any other economic interest group, as a minimum should be justified by a clear showing of net external benefits from the economic activity. In the case of timber sales by the U.S. Forest Service, the Forest Service Handbook asserts that "the aim in national forest stumpage appraisal is to determine market value,"8 and "market value" is equated to "fair market value." Regarding minerals, there is no reference in legislation or regula-

Jan 1, 1976

By Herbert A. Franke

ANY analysis of the aluminum situation, particularly of the factors involved in the current shortage of the metal, must consider the rapid march of events since the Munich fiasco of September 1938. At the end of 1938, the sole domestic producer of aluminum had more than a year's supply of metal on hand, having added 50,500 tons of output to stocks during the year. Not until war had been declared between the United Kingdom and Germany in September 1939 did the United States begin to make serious preparations for defense and a limited national emergency was proclaimed. Congress reflecting popular opinion, was not disposed to spend huge sums for armaments in 1939, and although 31,413 tons of aluminum was withdrawn from stocks. 107,500 tons was still on hand at the end of the year. When the President initiated a 50,000-airplane program in May 1940 the country was astounded, as previous Congressional authorizations of approximately 6000 planes for the Army by July 1911 and 3000 for the Navy by 1914 had been considered adequate.

Jan 1, 1941