Mineral Economics - Planning Fails to Stabilize Prices; Too Much Variation in Gold-Silver Ratio

THE year 1937 started off most hopefully for the metal industry but the prices for nonferrous metals declined after reaching a peak in the first quarter. E. & M. J. average prices for March were: -electrolytic copper f.o.b. refinery for domestic delivery 15.775c., lead 7.19c., and zinc 7.38c. There was the usual talk of shortages and the accompanying peak in the market prices of securities of producing companies. In retrospect it now appears that this was the peak of general security prices as well and of most commodity prices. On Dec. 1 copper was back to 11c., lead to 5c., and zinc to 5.5c. At the same time metal security prices had fallen to less than 40 per cent of their March highs. This has not been a purely domestic phenomenon. Metal prices have followed a similar course in London, in spite of the fact that in all three metals a tariff wall separates the domestic market from the foreign. There is nothing in the record to suggest that planning has so far had any stabilizing effect on prices. It is doubtful whether anybody will he found to claim credit for the planning. Strong evidence supports the conclusion that domestic demand for these and the other metals has been dammed back by the uncertainties confronting those who are considering long term construction commitments. This is particularly true with the public utilities, who are the largest consumers of copper and lead. If the plans were designed to maintain employment rather than to maintain political control of the Government, it would appear that they should be discarded. The course of the steel industry has been followed so closely in the press that no comment is necessary to indicate its similarity.