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TABLE 3.--NATIONALITY AND EXTENT OF CONTROL OF DOMINANT INTEREST

So far as the author is aware, Canada is the only country in which the petroleum industry may be said to be controlled by foreign interests, this control being by virtue of an essential monopoly of pipe-line and refining facilities.

The preceding table shows, according to the best information available, the nationality and approximate extent of control exercised by the dominant interest in each of the principal oil-producing countries of the world in 1917.

POLITICAL AND COMMERCIAL CONTROL OF RESOURCES

The accompanying diagram shows graphically the approximate commercial control of the world's production of petroleum in 1917.

Of considerable importance in Russian petroleum affairs at one time was the European Petroleum Union, organized for combat in the world markets with the Standard Oil trust. This union included among others such important petroleum operators as Nobel Bros., the Rothschild interests , Mantaschoff , and the Deutsche Bank, the latter controlling Akverdoff and Spies in Russia, together with important companies in Roumania and Galicia. How far this union controlled the affairs of its constituent companies is not evident from available data, and its present influence on companies now operating in Russia is uncertain.

Conditions in Russia make impossible any definite statement on the petroleum situation. A decree of the Bolsheviki government, dated June 20, 1918, on the nationalization of the petroleum industry, declared as the property of the state all movable and immovable property employed in and belonging to that industry. Trading in oil was declared a state monopoly and was delegated to the chief petroleum committee of the fuel department of the supreme Council of National Economy. As the chief producing areas are now under British military control, this decree is ineffective.

Formerly concessions were freely granted to foreign individuals and companies for the exploitation of mineral deposits, and oil lands were sold by the native owners to foreigners. Article 27 of the constitution of 1917 expressly forbids any but Mexican companies acquiring directly or operating directly petroleum lands in Mexico.

All recent concessions for the exploitation of oil properties contain a provision stating that the concession will be declared null if any of the rights are transferred to any foreign government. The provisions and the intent of a series of presidential decrees issued on February 19, 1918, July 8, 1918, July 31, 1918, and August 1, 1918, are to nationalize all petroleum lands and to permit them to be worked only by Mexican citizens or by companies that agree to consider themselves Mexican and further agree not to invoke the protection of their governments. A bill was presented in December, 1918, to carry out Article 27 of the new constitution, but thus far no action has been taken in the matter. The decrees and legislation growing out of Article 27 have been protested by the chief petroleum companies operating in Mexico and by their respective governments.

Prospecting licenses and concessions are granted only to Dutch subjects and to Dutch companies. It is officially stated that the object of these restrictions is not to exclude foreign capital; this is precisely their effect, and on account of the economic monopoly which the Royal Dutch-Shell now has of the petroleum industry of the Dutch East Indies, it would be very difficult for any new enterprise to gain a foothold.

The American Petroleum Institute states that "Roumania is considering the erection of a state monopoly of both production and distribution on the ruins of the monopoly which Germany sought to establish there but was compelled by the armistice to renounce."

Prior to the war Dutch or rather British-Dutch interests controlled about 30 per cent. of the annual production of petroleum in Roumania, German interests about 26 per cent., United States interests about 18 per cent., French interests about 16 per cent., purely British interests about 6 per cent., and Belgian and Roumanian interests the remainder.

The most promising oil territory of Persia has recently been closed to American activity through the granting of a concession aggregating approximately 500,000 square miles to a British concern, the Anglo-Persian Oil Co., a majority of whose voting stock is owned by the British government. This concession runs until 1961. The importance of the oil territory is indicated by its reported potential capacity of 30,000,000 barrels yearly, with tremendous reserves undeveloped.

POSITION OF THE LEADING POWERS

As contrasted with the strongly nationalistic and deliberately aggressive governmental policy adopted by Great Britain, France, Holland and some other nations, the United States has never adopted any policy founded on recognition of the importance of political and commercial control of petroleum. American companies may not own and operate oil lands in the British Empire, in the French possessions, or the Dutch colonies, but the only American restrictions on foreign activity in the petroleum industry are those which cover all minerals contained in public lands. Only American citizens, or those who have declared their intention of becoming American citizens, can apply for patents to such land. However, after the application is made, there is no restriction on transfer of the mineral rights thus secured.

The recent granting of a concession amounting to a monopoly in the most promising oil district of Persia to a British company controlled directly by the British government, signifies an aggressive policy of England, outside of her own dominions, to secure and hold, under government control, oil lands in all parts of the globe.

It is understood that the best-known oil territories in Venezuela are already covered by concessions that are practically all controlled either directly or indirectly by British interests, chiefly the Dutch-Shell Syndicate.

So far as observed, German interests actually dominate the petroleum industry in Galicia and at home. Whether forced back on its own petroleum resources or on these reinforced by those of Galicia, Germany will obviously have an inadequate supply, and in consequence German interests are likely to be particularly aggressive in seeking petroleum in Mesopotamia, Africa and South America.

The French mining law holds that oil and gas belong to the state, and may be exploited under concessions, the area and time limit of which are matters of negotiations between the applicant and the authorities. It is understood that the French government is unwilling to grant oil concessions except to companies the majority of whose stock is held by French citizens. A company incorporated recently to work the Algerian oil fields contains in its articles of incorporation the provision that 60 per cent. of its stock must be held by French citizens.

SUMMARY

Petroleum in its crude or semi-refined state is used as fuel under locomotive and marine boilers and as a lubricant. The principal use of petroleum, however, is in the manufacture of numerous refined products. Some of the more important products and their uses are as follows: ether, as an anaesthetic in surgery; gasoline, as fuel in internal-combustion engines; naphthas, as solvents and in the manufacture of commercial gasoline; kerosene, as an illuminant and as a fuel for farm tractors; lubricating oils; waxes, as preservatives, illuminants, and surgical dressings in treatment of burns; petroleum coke, in metallurgical processes and in the manufacture of battery carbons and arc-light pencils; heavy fuel oils; road oils; artificial asphalts, for pavements. The use of petroleum and its products as fuel, as a lubricant, and for illumination may be considered essential. Substitutes for most of these uses are known, but they are either inefficient or not readily available.

The most prolific sources of petroleum are in sedimentary strata of the Carboniferous and Tertiary periods. Because the most detailed geologic work is insufficient to provide for the appropriate evaluation of the numerous factors involved in the occurrence of petroleum, and because only a relatively small percentage of the areas of sedimentary rocks throughout the world have been examined geologically in any appreciable detail, it is difficult to estimate the future supply of petroleum or to predict that large accumulations will be discovered in any particular region.

The principal countries contributing to the world's production of petroleum rank as follows in general order of importance: United States, Russia, Mexico, Dutch East Indies, Roumania, India, Persia and Galicia. Other countries produce less than 2 per cent. of the annual total. The greatest change that is likely to come in the geographical distribution of production is a larger output from the countries bordering the Caribbean Sea and the Gulf of Mexico, and from the Persian and Mesopotamian fields. Mexico now ranks second to the United States, and South American countries promise to become more important contributors to the world's production than they now are. Russia is expected to become ultimately one of the chief producers of petroleum.

Within the next decade, through improved methods of production and through the further amalgamation of producing, transporting, refining, and marketing companies into strong units, the output will undoubtedly be larger and will be more economically produced. In the refining of petroleum it is probable that improved methods will make possible the recovery of a larger percentage of lighter products from low-grade petroleum. Internal-combustion engines are being modified so as to run on petroleum products of lower volatility than gasoline. The use of petroleum as fuel under railroad and marine boilers is expected to increase enormously in the next decade. As the output of the producing fields declines, the vast deposits of oil shale in the western United States will be developed as a source of oil.

So far as is known, political control of the petroleum resources of the world is determined by state sovereignty . In normal times, the United States controls politically over 66 per cent. of the present output of petroleum. Russia and Mexico ranked second and third in 1917, controlling 13.6 per cent. and 10.9 per cent., respectively. The remaining 9 per cent. was controlled by Great Britain, Holland, Persia , Roumania, Austria-Hungary, Japan, Peru, Germany, Argentina and Italy in the order named.

The table showing the nationality and the approximate extent of the commercial control exercised by the dominant interests in each of the principal oil-producing countries, and Fig. 2 are the best possible summaries of commercial control. United States capital is supreme in the commercial control of the petroleum industry of the Western Hemisphere. British and British-Dutch interests easily dominate the petroleum situation in the Eastern Hemisphere. France no longer exercises control over any important fields. Japanese interests, controlling at present all the oil fields of Japan, may be expected to make large investments in the petroleum fields of Mexico, China and Russia.

COAL

BY GEORGE S. RICE AND FRANK F. GROUT

USES OF COAL

Coal is among the most important of all minerals. It furnishes power and heat, and its distillation yields a great number of useful materials, such as gas for lighting and fuel, explosives, ammonia, aniline dyes, etc. Coke, which is bituminous coal with the more volatile constituents removed by distillation, is used for smelting metallic ores; and thus the contiguity of fields of high-grade coking coal and of iron ore determined the location of the centers of steel industry, which are the very main-springs of our modern machine-made civilization. Near such coal districts, other manufactures of all kinds naturally developed, the coal being cheaply available for power and constituting practically the only source of power in regions where cheap hydro-electric power is not available. About 66 per cent. of the coal mined goes to the production of power, including transportation; about 12 per cent. to coking and the by-products; and about 22 per cent. to the heating of buildings.

Commercial coal is of three varieties: anthracite , and semi-anthracite containing a high percentage of fixed carbon and a relatively low percentage of the volatile constituents ; bituminous , containing less fixed carbon and more volatile matter ; and lignite, containing a still smaller proportion of fixed carbon and a large proportion of water. Of the bituminous coals, some coke satisfactorily, but many do not, so that good coking coals are highly prized. Anthracite, because it makes no smoke, is in great demand for house heating; whereas bituminous coal is chiefly used for power production, including locomotive and steamship firing. Lignites as a rule are used only where the better grades of coal are not available.

Coal was first used for heating before steam power came into use, and iron was smelted with charcoal instead of with coke as at present.

Ship bunkering calls for the best grades of bituminous coal, low in ash and preferably high in fixed carbon, because the use of low-grade coals would require carrying larger amounts, leaving less space for cargo. However, no country that has enough coal to bunker ships, need be dependent on foreign supplies; the low grade of coal would simply reduce efficiency and thus increase expense.

CHANGES IN PRACTICE

Improvements in coking ovens may soon make possible the manufacture of some sort of coke from almost any bituminous coal. While all coke may not be satisfactory for modern blast-furnace practice, any future lack of coke will probably be offset by the development of electric smelting, so the seriousness of the metallurgical need is doubtful. The proportion of by-product coke ovens, which make for cheaper coke by providing for other marketable products, is increasing.

GEOLOGICAL DISTRIBUTION

Coals are found in the sedimentary deposits of several geological eras: Paleozoic, Mesozoic, and Tertiary. The Paleozoic era, embracing the Carboniferous period, is by far the most important as regards quality and availability of its coal resources; but the lower-grade and chiefly lignitic coals of the Mesozoic and Tertiary are of great importance locally, and there are enormous reserves that exceed in quantity the generally higher-grade coals of the earlier periods.

The geologic distribution of coal is described in "The Coal Resources of the World," the most important and comprehensive compilation on coal reserves ever made, which was undertaken by the Executive Committee of the Twelfth International Geologic Congress, held in Canada in 1913. As the compilation was made with the assistance of geological surveys and mining geologists of the several countries of the world, it is cited in this paper as authoritative on geologic distribution and resources.

In beds of the Eocene period of the Tertiary era are large deposits of brown lignite locally converted by mountain-building forces into bituminous and semi-bituminous coal, and also a little anthracite under difficult mining conditions. Such locally altered beds are found in the State of Washington, in British Columbia, and in Alaska.

World's Coal Reserves as of 1916--Coal Fields in Solid Black.

It may be safely stated that geological reconnoissance has covered the world so well that further development is not likely to disclose coal resources of great magnitude not now known with more or less exactitude. Estimates of resources of some regions will undoubtedly be revised many times, especially those of reserves in the middle portion of Africa, in South America, and China.

COAL PRODUCTION OF THE WORLD IN 1913

As the great World War began on July 31, 1914, the last normal production figures were for 1913. The following table of the world's production of coal for the years 1911-1914 is from "Mineral Resources" of the U. S. Geological Survey, the compilation being credited by Mr. Lesher, of the Survey, to Mr. Wm. G. Gray, statistician of the American Iron and Steel Institute, and Prof. G. A. Roush, editor of "Mineral Industry."

The output of the chief coal-producing countries of the world is shown graphically in Figure 3.

TABLE 4.--THE WORLD'S PRODUCTION OF COAL

Estimated.

Transvaal included Natal and Cape of Good Hope.

Approximate.

TABLE 5.--RESERVES

Total coal reserves in millions of metric tons have been estimated, by continents, as follows:

Continent Millions of tons North America 5,073,000 Asia 1,280,000 Europe 784,000 Australia and Oceania 170,000 Africa 58,000 South America 32,000

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