Copper Adjusted?

In the face of a commodity decline which has caused such losses in the past five months as 15% for wheat, 16% for silver, 13% for lead, copper long stayed firm at 18-c-. Last week, two days before the first anniversary of the 18-c- level, copper dropped to 14-c-. In actual size, this 22% reduction is a tremendous one, perhaps the biggest single drop ever recorded in any commodity. But the news was neither surprising nor alarming, for 18-c- copper had lately been becoming more a theory than a fact.

Copper prices for export are fixed by Copper Exporters, Inc., to which belong all the important U. S. copper producers. Acting quite independently, but with a unanimity as perfect as if they had an agreement, these producers fix the price for domestic copper at an equivalent level. The 18-c- price was started April 15, 1929, after a wave of copper buying had sent the price to 24-c- for a short period. Even then consumers protested against the price, and with the decline in business last autumn it seemed obvious that a reduction would have to come. Buying became negligible, exports dwindled. Although world production has been declining (the first quarter this year it reached 4,229 tons a day against 4,964 daily last year), tremendous stocks of copper have piled up. At the end of March the American Bureau of Metal Statistics reported this surplus as 522,581 short tons, almost twice what it was a year ago. If copper on consignment were added, the figure would be larger, and, under normal business conditions, a five-month supply. On the other hand, copper consumers have very small inventories and when buying starts it will be on a big scale. Although the reduced price means much smaller earnings for copper producers, this is foreseen, is some-what balanced by the fact that greater copper sales will stimulate general business conditions. The copper producers agreed, in effect, on one big price cut to do immediate good rather than a series of small cuts which might produce less good than haggling, uncertainty.

Merger. Last week stockholders of Phelps-Dodge Corp. held their annual meeting, learned two important things. First was that Walter Douglas, president since 1917, will resign and be succeeded by Louis Shattuck Gates, vice president of Utah Copper Co. Second was that Mr. Gates may soon head a much bigger company, for engineers are inspecting the properties of Phelps-Dodge and Calumet & Arizona Mining Co. to decide on the advantages of a merger.

Phelps-Dodge ranks third among largest independent companies, being outranked by Anaconda Copper Mining Co. and Kennecott Copper Corp. Such a deal would not be surprising, however, since, recently, the two companies have become closely affiliated. In 1928 they purchased large foldings in Nichols Copper Co. which has built a refinery to be shared by all three, and the same year, together with Nichols and Old Dominion Co. they formed Phelps-Dodge Sales Agency.

New President Gates is an engineer rather than an oldtime up-from-the-mines copper boss, but except for a few months with National Steel & Wire Co. after his graduation from M. I. T. in 1902, he has devoted all his time to the industry. In 1903 he went with Boston Consolidated Mining Co. at Bingham Canyon, Utah, as timekeeper. He flashed through the jobs of foreman, shift boss, superintendent of mines, so rapidly that by 1910 he was general manager. That year Boston Consolidated was acquired by Utah Copper which moved Mr. Gates into their organization and then sent him to Arizona where Ray Consolidated Copper Co. had been losing money regularly.

Guiding Utah Copper's destinies was of course its founder, Daniel Cowan Jackling, an able copperman, quick tu recognize ability in others. So. although Mr. Gates soon had Ray Consolidated paying and became an Arizona Big Citizen, he was plucked back to Utah in 1919. There he gained fame as Utah Copper's general manager, expanded his interests to include banking. He takes up his new position May 1, but will move to Manhattan, not back to Arizona where Phelps-Dodge's main properties are. At just about this time another change will be effected by Phelps-Dodge. They will move their office from No. 99 John St., Manhattan, to No. 40 Wall st. where Calumet & Arizona and Nichols will be handy on adjacent floors.

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