Excess Production Capacity Research Articles

The Tin-Mining Industry: A Growth Point for Cornwall

FOR THE first time in forty-five years, there are now grounds for believing that the long neglected remaining tin ores of the old mining region of south-west England can still provide a growth point in the future development of the area. New problems are arising in the world position' of production and consumption of tin, and new techniques of mining are leading to a reassessment of former mining fields, while in Britain there is growing a new and more positive approach to the problems of regional economic development. In the post-war years, the world tin-mining industry has suffered from large fluctuations in the price and production of tin, but the crisis of 1958 had the most serious and far-reaching effects on the industry. At that time, the industry was suffering from a surplus production capacity of 20,000 tons per annum owing to the rapid tailing off in the substantial purchases made by the United States for its strategic stockpile, and to a simultaneous drop in the world commercial demand.2 The position deteriorated further when an additional 20,000 tons of tin flooded on to the market from Russia, which was exporting tin for the first time since I950. The industry after a decade of expanding output was suddenly forced to contract.3 The world tin-mining industry was thus in an acute position and the two subsequent years of restricted output seriously damaged the productive capacity of the industry. Exploration schemes and the re-equipment necessary for the maintenance of output were curtailed, and many mines abandoned at this time remained closed, even when prices recovered, owing to the high costs of re-opening.4 Political disturbances in both Indonesia and the Congo later adversely affected the supply situation, and the final result was that by 1961 consumption began to exceed production by Io,ooo tons per annum; this deficit was closed largely by metal releases from stocks. Production has remained at a low level, while consumption has continued to increase so that in I962 the gap widened to I4,000 tons and to 2I,oo0 tons in I964.5 Inevitably the price of tin has risen: from ~888 per ton in 1961 to 6I238 in I964 and to over IIsoo per ton in September I965. The International Tin Mining Council had been established in 1956 with a buffer stock of tin or finance to cope with any large fluctuations in the price and supply of tin.6 Price levels would be supported in times of weak demand by tin purchases by the buffer stock and restrained when supplies were scarce by selling the accumulated stocks of metal. In the event the buffer stock was unable to contain the recent price increase as the total stock of metal was exhausted in November I963. Thus, six years after one of the most severe crises to shake the tin-mining industry in recent times, price trends indicate that the problem now facing tin producers is one of consumption exceeding production. Meanwhile, the deficit is being filled by releases from the United States' strategic stockpile, which at the current rate of disposal will not last more than five years.7

Industrial utilization of seed oils

Within the past 25 years, the United States has evolved from a nation importing fats and oils to the status of major supplier of these products in the world markets. A principal contribution to this reversal has been the soybean crop, which totaled only 46 million bushels in 1937, whereas it was 693 million bushels in 1961. Another contributing factor has been the rapid expansion of our livestock industry. With this tremendous increase in production has come the realization that new and improved industrial uses must be found for these farm products in order to absorb excess productive capacity. Thus, in 1961, the per capita consumption of fats

The Changing Economics of the Supreme Court

QUR anti-trust legislation and the court decisions based thereon have been accused of thwarting economic development. At the same time, economic forces have had a profound effect on the law and its judicial interpretation. The relation between law and economics is reciprocal. Economic doctrines can be read into the Supreme Court decisions, but it would be precarious to claim that the Court has followed any theories consistently. Though it has certain predilections for logic, precedent and consistency, the Supreme Court is essentially pragmatic, making our government, after all, one of men rather than laws. Recently the Federal Supreme Court has well-nigh nullified the Sherman AntiTrust Law recognizing the efficiency of combines and even monopolies. The period before the Industrial Revolution has been described as one of undersupply and starvation, the nineteenth century as a period of oversupply and uncoiordinated production, while in the twentieth century the limited markets and excess productive capacity are becoming pressing problems. Attempts are being made to coordinate supply and demand, to eliminate the ruthless competition between businesses, in short, to stabilize.' Congress has recognized this trend by the exemptions from the anti-trust laws which it has given in whole or in part to banks, railroads, farmers, horticulture, foreign trade associations, and so forth. In fields not touched by this legislation the Supreme Court has by a process of inclusion and exclusion changed the original rigid interpretation of the Sherman Law so that today mergers, combines and perhaps even monopolies are permitted and welcomed. This reversal is due to the Court's knowledge and understanding of the efficiency in production and distribution of large scale organizations as well as their stabilizing effects. In the early history of the Sherman Law the Supreme Court was given to the laissez faire doctrine which, driven to its logical conclusion, assumed that the smaller the business units the more satisfactory the social result. Any combination, by eliminating some competition, was outside the public interest. This extreme individualism of the Court is partially explainable by the wording of the Sherman Law, namely, that every contract and combination in restraint of trade