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By W. E. Stiles

A method is presented for predicting the performance of water flooding operations in depleted, or nearly depleted, petroleum reservoirs. The method makes use of permeability variations and the vertical distribution of productive capacity. From these two parameters can be calculated the produced water cut versus the oil recovery. Derivations of the mathematical analogy is shown and sample calculations and curves of prediction are presented. Comparison is made of the predicted and actual performance of a typical 5-spot in an Illinois water flood. INTRODUCTION The use of water as a flooding medium in both depleted and "flush" oil reservoirs is gaining greater recognition and acceptance. Many of the shallower fields, depleted by primary production, have been and are being subjected to water injection in order to obtain some part of the large volume of oil remaining after primary production. Some of the earlier water flood installation proved highly discouraging and the value of water flooding was often questioned. Many of these earlier floods were haphazardly selected and developed as little was known of the physical characteristics and contents of the producing formations. The prior evaluation of the flood performance was impossible. During the past decade the development of the required reservoir engineering tools-—core analysis, reservoir fluid analysis, electric logs, fluid flow formulae, etc.—has allowed the engineer to construct and apply the methods which are presently being used to evaluate the economic and mechanical susceptibility of a reservoir to flooding. This discussion will present a method for taking into account the effect of permeability variations in predicting the performance of water floods in depleted reservoirs. PERMEABILITY AND CAPACITY DISTRIBUTION It is generally agreed by most investigators that in a single phase system fluid will flow in a porous and permeable medium in proportion to the permeability of the medium. Producing formations are usually highly irregular in permeability, both vertically and horizontally. However, zones of higher or lower permeability are often found to exhibit lateral continuity. Thus, while structurally comparable stringers in adjacent wells may differ several fold in permeability values, they usually bear resemblance as being part of a general continuous higher or lower permeability section. It is generally agreed that where such stratification of permeability exists, injected water sweeps first the zones of higher permeability, and it is in these zones that "break-through" first occurs in the producing well. It is a basic assurnption of the presently described method that penetration of a water front follows the individual permeability variations as if such variations were continuous from input to producing well. This is admittedly not rigorously true, but can be justified as making possible a simplifying mathematical approach to an otherwise extremely complicated three dimensional flow problem. As a basis for study of the lateral flow of fluids in formations of irregular permeability, the irregularities may be conveniently represented by a permeability distribution curve and a capacity distribution curve. In obtaining these curves, the permeability values, regardless of their structural position in the formation, are rearranged in order of decreasing permeability. If these permeability values so arranged are plotted against the cumulative thickness, a permeability distribu- tion curve is obtained. This curve may then be likened to a "smoothed" permeability profile of the formation. In making comparison between different distribution curves it is convenient to state the permeabilities in terms of the ratio of the actual permeability values to the average permeability of the formation. These ratios termed "dimensionless permeabilities", are used in this paper rather than the permeabilities in terms of millidarcys. The capacity distribution curve is a lot of the cumulative capacity (starting with the highest permeabilities) versus the cumulative thickness. The capacity and thickness are given as fractions of the total capacity and thickness. Mathematically, the capacity distribution is the intergration of the permeability distribution curve. In practice it is convenient to first obtain the capacity distribution curve and derive from it a smoothed dimen-sionaless permeability curve. The method of obtaining the capacity distribution curve is illustrated in the successive column of Table 1, in which capacity and thickness are derived as fractions of their respective totals. If only a small number of permeability values are available, it is generally desirable to smooth the resultant curve. This has been done to give the capacity distribution curve shown in Figure 1. The differentiation of the capacity distribution curve to obtain the permeability distribution curve is shown in Table 2. Here, the capacity values are read from the smoothed curve at intervals of cumulative thickness, and the increments of capacity are divided by the increments of thickness to obtain the dimensionless permeability, K. Due to this stepwise procedure of calculation these premeability values must be plotted at the midpoints of the successive increments of thickness. The curve so obtained from these data is shown in Figure 1. The total area under the K' curve is equal to unity.

Jan 1, 1949

By W. E. Stiles

A method is presented for predicting the performance of water flooding operations in depleted, or nearly depleted, petroleum reservoirs. The method makes use of permeability variations and the vertical distribution of productive capacity. From these two parameters can be calculated the produced water cut versus the oil recovery. Derivations of the mathematical analogy is shown and sample calculations and curves of prediction are presented. Comparison is made of the predicted and actual performance of a typical 5-spot in an Illinois water flood. INTRODUCTION The use of water as a flooding medium in both depleted and "flush" oil reservoirs is gaining greater recognition and acceptance. Many of the shallower fields, depleted by primary production, have been and are being subjected to water injection in order to obtain some part of the large volume of oil remaining after primary production. Some of the earlier water flood installation proved highly discouraging and the value of water flooding was often questioned. Many of these earlier floods were haphazardly selected and developed as little was known of the physical characteristics and contents of the producing formations. The prior evaluation of the flood performance was impossible. During the past decade the development of the required reservoir engineering tools-—core analysis, reservoir fluid analysis, electric logs, fluid flow formulae, etc.—has allowed the engineer to construct and apply the methods which are presently being used to evaluate the economic and mechanical susceptibility of a reservoir to flooding. This discussion will present a method for taking into account the effect of permeability variations in predicting the performance of water floods in depleted reservoirs. PERMEABILITY AND CAPACITY DISTRIBUTION It is generally agreed by most investigators that in a single phase system fluid will flow in a porous and permeable medium in proportion to the permeability of the medium. Producing formations are usually highly irregular in permeability, both vertically and horizontally. However, zones of higher or lower permeability are often found to exhibit lateral continuity. Thus, while structurally comparable stringers in adjacent wells may differ several fold in permeability values, they usually bear resemblance as being part of a general continuous higher or lower permeability section. It is generally agreed that where such stratification of permeability exists, injected water sweeps first the zones of higher permeability, and it is in these zones that "break-through" first occurs in the producing well. It is a basic assurnption of the presently described method that penetration of a water front follows the individual permeability variations as if such variations were continuous from input to producing well. This is admittedly not rigorously true, but can be justified as making possible a simplifying mathematical approach to an otherwise extremely complicated three dimensional flow problem. As a basis for study of the lateral flow of fluids in formations of irregular permeability, the irregularities may be conveniently represented by a permeability distribution curve and a capacity distribution curve. In obtaining these curves, the permeability values, regardless of their structural position in the formation, are rearranged in order of decreasing permeability. If these permeability values so arranged are plotted against the cumulative thickness, a permeability distribu- tion curve is obtained. This curve may then be likened to a "smoothed" permeability profile of the formation. In making comparison between different distribution curves it is convenient to state the permeabilities in terms of the ratio of the actual permeability values to the average permeability of the formation. These ratios termed "dimensionless permeabilities", are used in this paper rather than the permeabilities in terms of millidarcys. The capacity distribution curve is a lot of the cumulative capacity (starting with the highest permeabilities) versus the cumulative thickness. The capacity and thickness are given as fractions of the total capacity and thickness. Mathematically, the capacity distribution is the intergration of the permeability distribution curve. In practice it is convenient to first obtain the capacity distribution curve and derive from it a smoothed dimen-sionaless permeability curve. The method of obtaining the capacity distribution curve is illustrated in the successive column of Table 1, in which capacity and thickness are derived as fractions of their respective totals. If only a small number of permeability values are available, it is generally desirable to smooth the resultant curve. This has been done to give the capacity distribution curve shown in Figure 1. The differentiation of the capacity distribution curve to obtain the permeability distribution curve is shown in Table 2. Here, the capacity values are read from the smoothed curve at intervals of cumulative thickness, and the increments of capacity are divided by the increments of thickness to obtain the dimensionless permeability, K. Due to this stepwise procedure of calculation these premeability values must be plotted at the midpoints of the successive increments of thickness. The curve so obtained from these data is shown in Figure 1. The total area under the K' curve is equal to unity.

Jan 1, 1949

By G. H. Wigton

THE oxidized ores of the Chief Consolidated Mining Co., in the Tintic mining district, have never yielded to metallurgical treatment by any standard method except smelting. These ores occur in comparatively small, irregular, siliceous replacements in limestone, and carry silver, lead, and gold as the principal valuable metals. But smelting methods. are unsatisfactory, as the lead smelters heavily penalize the large amount of silica in the ore, and the copper smelters do not pay for the lead in the ore; therefore, an alternative treatment method was sought. In 1916, a metallurgical research department was organized under; the direction of the writer. Many standard metallurgical methods were investigated but, on oxidized ore, none yielded extraction great enough to make its use feasible. During some chloridizing-roasting experiments in 1916, made in an assay muffle, the writer noted that large proportions of the silver, lead, and gold were volatilized from certain oxidized ores. The possibility of volatilizing the metals and collecting them in the form of a concentrated fume was then studied. But, as it was shown that satisfactory chloride-volatilization would be limited to a furnace feed with a high fusing temperature of the non-volatilizable constituents, and as the results obtained in a rotary kiln with the admixture of common salt with the ground ore were inferior to muffle tests, further volatilization experiments were discontinued until 1920. During this interval, an experimental sulfidizing and flotation plant was operated. After the cessation of attempts to float the oxidized minerals, chloride-volatilization experiments were resumed. The highly infusible flotation. tailing from the operation of the flotation mill was used for furnace feed. The first tests made on flotation tailing mixed with 10 per cent. common salt showed -nearly complete lead and gold volatilization but considerably less volatilization of silver than in muffle tests. In attempts to increase the silver extraction, the percentage salt in the furnace feed was varied, and it soon became apparent that the use of smaller percentages of salt raised the fusion temperature of the furnace charge and thus,

Jan 8, 1925

By C. K. Leith

IN telling the story of Canada's minerals many interesting and spectacular details will be passed over to permit pointing out some of the significant inter- national aspects. No country now has enough of all minerals for its own use. The problems of satisfaction of both national and world demands under these conditions have become international in scope, and history supplies no obvious solutions. The minerals of Canada are coming to play a prominent part in such problems. Production and Reserves In the last decade Canada has rapidly advanced in mineral production. In 1928 the total value of mineral products from Canadian sources reached 273 millions of dollars. Canada ranks first in production of nickel, first in asbestos, second in cobalt, third in gold and silver, fourth in lead and copper, and sixth in zinc.

Jan 1, 1929

By W. A. Hockings, D. W. Fuerstenau, A. L. Mular

This paper briefly describes a simple air pycno-meter and its use for rapid determination of the composition of mixtures of solid particles. Research on such problems as the pelletizing of solids, the mixing of solid particles, and the comminution of mixtures can be simplified by means of this analytical tool. THEORY OF OPERATION Liquid pycnometers1 are commonly employed to measure volumes. These devices are time consuming and sometimes give inconsistent results. The liquid used in the pycnometer may have an undesired influence on the material to be measured; moreover, complete displacement of air by the liquid is seldom

Jan 1, 1963

By F. Robertson Jones

IF the tendency toward extending the scope of the workmen's compensation system to include life, health, accident, old age, and unemployment insurance for workers is not promptly altered, I believe there will be a complete breakdown of that system. This is not because of any objections, there may he to requiring industries to provide these additional forms of protection in whole or in part to their employees. It is rather because our workmen's compensation laws, their scale of benefits, and the administrative procedure under them are not adapted or suited to such situations. If the compensation principle is limited to its own proper sphere and is not enlarged so as to include all the ills that the flesh is heir to, it is practical, "workable, and beneficent. If it invades foreign realms, it is bound to grow into a veritable Frankenstein' which will harm principally those it 'is supposed to aid, and, at the same time, will promote waste, fraud, and Industrial demoralization. Compensation risks will become almost uninsurable; the cost to business will be intolerable; and the development of sound relief measures which will give to labor the protection now sought by the uneconomic device of enlarging the compensation law territory will be retarded.

Jan 1, 1934

By G. R. St. Pierre, A. J. Wilhelem

In connection with the reduction of hematite or magnetite to metallic iron, it appeared desirable to study the rate of reduction of each oxide to the next lower oxide under conditions which excluded all other condensed phases. For this purpose, pellets of Fe,O,, Fe,O,, and oFeOo were prepared. A gas train for the preparation of Ar-Hz-H20 mixtures was employed to establish a continuous flow of a controlled atmosphere over a pellet suspended on a balance. In this manner the following individual reduction steps could be studied: For example, pellets of hematite were reduced solely to magnetite by adjusting the gas atmosphere such that it was oxidizing to wustite. In other words, the reaction was complete when the hematite pellet had been totally converted to magnetite. The pellets were prepared from Baker Chemical ferric oxide. The ferric oxide powder was moistened and handrolled. Air sintering at 950°C produced Fe,0, pellets with a density of 3.65 g per cm3. The pellets ranged in size from 0.6 to 1.2 cm diam. The magnetite and

Jan 1, 1962

By H. L. Hazen

THIS is the story of the recent operations of the Standard Cyaniding Co., which owns the Standard mine, a low-grade gold property in sight of Highway 40 about thirty miles from Lovelock toward Winnemucca, Nev. The ore is mined by power shovel and cyanided after grinding to only 3/S in. A total direct cost of $1.24 was attained in 1941 on 600 tons a day. Mining operations ceased, under Government edict, in 1942, and only in recent months have been resumed. The operating difficulties of today are: (1) the high cost of supplies; (2) labor problems; and (3) Federal laws as interpreted and enforced by executive bureaus of the Government. Of these, the increased cost of supplies is the least important.

Jan 1, 1947

By CLARESCE CARLETON SEJIPLE

(Wilkes-Barre Meeting, June, 1911.) AT a number of mines in eastern Nicaragua, 3.5- and 5-ft. Huntington mills are used for grinding gold-ore after a preliminary breaking in jaw-crushers. The smaller mills are made sectional to facilitate transportation to the more difficultly accessible mines. The capacity of the smaller mills is about 20 or 25 per cent. that of the larger, but in proportion to the quantity of ore ground they require more power and are subject to greater wear. The notes herein given are from records of the performance of the larger mills, but, in general, apply to the smaller also. THE NATURE OF THE ORE. The ore occurred as a series of flat veins in a highly-decomposed rock, probably alaskite. The primary mineralization comprised pyrite, pyrrhotite, marcasite, chalcopyrite, and quartz; the oxidation-products of which were chiefly hydrated iron oxide or limonite, chrysocolla, azurite, and malachite. The kaolinization of the feldspar of the country resulted in the admixture of a great quantity of clay with the oxidized ore. The quartz was sandy, imbedded in the clay; and probably the greater part represented the residue from the crushed rock in the fissures after leaching, and kaolinization of the feldspar. There was little vein-quartz in the unaltered primary sulphide ore. Only the oxidized ore was mined for the gold that it contained in amounts that averaged $4 per ton. No specks of gold were ever seen in the ore, and the gold obtained by panning was always exceedingly fine. The amalgamation-bullion was about 800 fine in gold and 60 to 80 in silver. The ore delivered at the mill contained from 5 to 15 per cent. of moisture; during the rainy season the quantity was much greater. The moisture and clay made the ore so sticky that it had to be raked over steeply-inclined grizzlies; it hung in the ore-bins,

Oct 1, 1911

By Henry Fernald

THE accounting system or bookkeeping methods of any company are principally the concern of that company and of those who are in control of its affairs. Its published financial report is, however, primarily intended for those who are not already fully informed regarding its operations and finances. Whatever may be the advantages of standardization of accounting and bookkeeping methods, it must be admitted that a company has a certain right to handle its accounts and keep its books and records in whatever manner may seem to it best adapted to its affairs, even though such methods may differ materially from those generally adopted by others. In its financial reports it should not, however, either ask or expect that the statements it makes or the terms which it uses will be given in its case a meaning and interpretation different from that which they are ordinarily considered to have inn similar reports and statements of other companies. The particular form and arrangement of such reports is a matter concerning which there may be much difference of opinion. It is of little importance whether current assets come first or last in the Balance Sheet, but it is important that there should not be included under this designation any items which are not properly current assets within the generally accepted meaning of that term. The extent to which stockholders or others interested are to be made acquainted with the full details of a company's business is a question which the proper authorities must in each case decide. It should, however, be recognized that there are certain facts regarding a mining company which must be set forth in a financial statement if it is fully to cover the conditions and affairs of the company. For example, a financial statement which does not include or is not accompanied by a statement of the ore reserves of the company does not fully set forth its financial condition. This is true whether the absence of such a statement of ore reserves is because it is not desired to make public the figures or whether it is because the ore reserves themselves are not definitely known or accurately measured.

Jan 1, 1928

By M. L. Fuller

OWING to the nature of the die-casting process, freshly cast alloys are undoubtedly not at equilibrium from the standpoint of alloy phase relationships. After casting, therefore, they tend to undergo phase changes, with the ultimate effect of reaching a state of equilibrium at the aging temperature, beyond which no further change takes place. This phase alteration undoubtedly is one of the primary causes of the changes in dimensions and physical properties that zinc-alloy die castings undergo during aging. It is planned to report on this problem in a series of papers of which this is the first. The writers have made a study of commercial zinc die-casting alloys over a period of several years, utilizing the X-ray diffraction technic of determining the phase composition changes in the alloys. Up to the present, two principal phase changes have been observed which are capable of causing dimensional changes: (1) the segregation of secondary constituents from the zinc-base solid solution and (2) the beta aluminum-zinc decomposition. The latter is the subject of the present paper and studies on the former will be reported upon at a future time.

Jan 1, 1934

By R. L. Wilcox, M. L. Fuller

Owing to the nature of the die-casting process, fresllly cast alloys are undoubtedly not at equilibrium from the standpoint of alloy phase relationships. After casting, therefore, they tend to undergo phase changes, with the ultimate effeet of reaching a state of equilibrium at the aging temperature, beyond which no fnrther change takes place. This phase alteration undoubtedly is one of the primary causes of the changes in dimensions and physical properties that zinc-alloy die castings undergo during aging. It is planned to report on this problem in a series of papers of which this is the first. The writers have made a study of commercial zinc die-casting alloys over a period of several years, utilizing the X-ray diffraction technic of determining the phase composition changes in the alloys. Up to the present, two principal phase changes have been observed which are capable of causing dimensional changes: (I) the segregation of secondary constituents from the zinc-base solid solution and (2) the beta aluminum-zinc decomposition. The latter is the subject of the present paper and studies on the former will be reported upon at a future time. Scope of Study In the present investigation a special technic for the study of the beta phase in zinc-alloy die castings has been developed, making possible the determination of the period of existence of the beta phase after casting. The pure beta constituent and its decomposition have been studied in detail. The effect of magnesium and copper on the velocity of the decomposition is reported. The heat of decomposition, the eutectoid temperature arid the accompanying density change have been measured. The density change lias been calculated from data on crystal structure and the result thus obtained has been compared with the actual change.

Jan 1, 1935

By R. L. Wilcox, M. L. Fuller

Owing to the nature of the die-casting process, fresllly cast alloys are undoubtedly not at equilibrium from the standpoint of alloy phase relationships. After casting, therefore, they tend to undergo phase changes, with the ultimate effeet of reaching a state of equilibrium at the aging temperature, beyond which no fnrther change takes place. This phase alteration undoubtedly is one of the primary causes of the changes in dimensions and physical properties that zinc-alloy die castings undergo during aging. It is planned to report on this problem in a series of papers of which this is the first. The writers have made a study of commercial zinc die-casting alloys over a period of several years, utilizing the X-ray diffraction technic of determining the phase composition changes in the alloys. Up to the present, two principal phase changes have been observed which are capable of causing dimensional changes: (I) the segregation of secondary constituents from the zinc-base solid solution and (2) the beta aluminum-zinc decomposition. The latter is the subject of the present paper and studies on the former will be reported upon at a future time. Scope of Study In the present investigation a special technic for the study of the beta phase in zinc-alloy die castings has been developed, making possible the determination of the period of existence of the beta phase after casting. The pure beta constituent and its decomposition have been studied in detail. The effect of magnesium and copper on the velocity of the decomposition is reported. The heat of decomposition, the eutectoid temperature arid the accompanying density change have been measured. The density change lias been calculated from data on crystal structure and the result thus obtained has been compared with the actual change.

Jan 1, 1935

By Odmund Ljone

FAR north of the Arctic Circle is a totally industrial community which until 1945 could not boast a single specimen of the rat family, and where today you will be awarded a bottle of fine cognac for every rat-dead or alive. Amazing but true, the spot is Longyear City, the Norwegian mining town on the arctic island of Spitzbergen. Perhaps you have also heard of the town built on soil that never thaws, where huge blocks of ice must be melted to fill the city's fresh water reservoirs, and where the Far North dictates a way of life all its own. Here, coal is king and men must work hard for their "black gold." Spitzbergen is a rough, tough piece of Norway, made up of a half dozen isolated islands between 74 and 81 degrees north latitude. Covering twice the area of Belgium, they are home to

Jan 1, 1948

By AIME AIME

THOUGH the Annual Meeting of the Institute-officially numbered 158 on the records was delayed a bit at the start by low steam pressure on the locomotives bringing members to New York, the crowd that finally arrived more than lived up to expectations, and the technical program had few difficulties because of absent authors or lack of competent discussers. The transportation difficulties were occasioned by the fact that Monday, Feb. 15, was the third coldest day in the 72 year history of the New York Weather Bureau, the official temperature being 8 below zero. The New York Central's premier train, the 20th Century, due at 9:30 a.m., arrived about 6:30 p.m., and the Commodore, another crack train from Chicago, was about equally late.

Jan 1, 1943

By AIME AIME

AWIDE variety of subjects was discussed at the Wednesday sessions on Non-metallic Minerals. W. M. Weigel as chairman, presided at the morning session, and W. M. Myers, vice-chairman, in the afternoon. In the morning session a paper by W. N. Logan on "Mineral Wool Resources of Indiana" was read by H. H. Hughes. Mr. Logan explained that as Indiana is the principal source of mineral wool, the paper might well he entitled "Mineral Wool Resources of the United States."

Jan 1, 1932

By Alfred R. Powell

LATE in 1944 a group of petroleum and coal technologists was organized in Wash¬ington under the sponsorship of the Petroleum Administration for War and the U. S. Bureau of Mines. This group, known as the Technical Oil Mission, was placed under the authority of the Technical Industrial Intelligence Committee of the Joint Chiefs of Staff, which was then promoting the organization of other missions to be sent to Germany to obtain technical information regarding various industries in that country. The objective of the Technical Oil Mission was to obtain technical data on German production of synthetic oil from coal and all other commercial practices and research projects connected with the oil industry. The primary purpose was to obtain such data as were immediately essential to assist the war against Germany and Japan, with secondary emphasis on technical information that would assist American industry after the end of the war. Since oil-production facilities in Ger¬many and the occupied countries con¬trolled by Germany were the top targets for strategic bombing, the Technical Oil Mission was the first group under the Technical Industrial Intelligence Com¬mittee to enter Germany. A few members of the group flew to London in February 1945 and the majority of the remainder followed in March. In London they were joined by an equal number of British investigators and the combined, mission was then sent into Germany under the authority of the Combined Intelligence Objectives Subcommittee (CIOS). A sum¬mary of the more important information gained by this combined British and American mission is presented below. GERMAN OIL PRODUCTION The oil available to Germany, both natural and synthetic, and including pro¬duction from occupied countries, reached a peak in late 1943 and early 1944. Pro¬duction at this time was at the rate of 1,200,000 metric tons per month, equiva¬lent to i00,000,000 bbl. per year, or about 7 per cent of the wartime production in the United States. Of this production, 50 per cent was crude oil from Romania and Hungary, 12 per cent was crude oil from Germany itself, including Austria, 9 per cent com¬prised coal-carbonization products, that is, tar and light oil, and only the remaining 29 per cent was synthetic liquid fuel made from coal or tar. Synthetic liquid fuel made in Germany was equivalent therefore to less than 2 per cent of war¬time production of crude oil in the United States. The success of the strategic bombing campaign against German oil-production facilities is demonstrated by the fact that by September 1944 the Ploesti fields of Romania and much of the syn¬thetic oil production had been eliminated, so that the amount of oil available to the German war machine was only 25 per cent of the peak quantity mentioned above. By early 1945, when the combined British and American oil mission was entering

Jan 1, 1946

By PAUL P. ZElGLER

Rapid growth of the aluminum industry continued through 1948 with an acute shortage of the metal in all forms marking the year. Estimates based on shipments made during the first nine months indicate that, in 1948, the industry shipped more than two billion pounds of aluminum products or roughly four times the amount shipped in the greatest peacetime year prior to the war. The rapid expansion of the aluminum industry is particularly reflected in the production of sheet. Last year, the industry as a whole shipped an estimated 40 per cent more sheet than was produced in the peak war year of 1944.

Jan 1, 1949

By George E. Roberts

The maintenance of the common gold standard is the most important cooperative undertaking in the world. The war broke up this relationship and brought about a state of great disorder in the currencies and exchanges. After the war the countries all began to grope their way back to the gold standard as the best means of establishing trade and financial relations with each other. With this movement began a general decline in commodity prices. The question has been raised whether the world's return to the gold standard was not forcing prices back to the prewar level. Also, the question is raised whether the world has not outgrown the supply of gold as the basis of credit. Because Europe readjusted its monetary units to conform to the higher level of prices there is no pressure on prices on this account. Furthermore, a large amount of gold formerly in hand-to-hand circulation passed out of circulation and has been added to the central bank reserves. The gold reserves of 36 countries increased approximately 100 per cent from the outbreak of the war to June 30,1930. The increase is much larger than the average increase of prices in any of the important countries, at any time since 192.5. As gold in the central banks of issue is far more effective for all business purposes than gold in circulation, the gold scarcity argument has little basis as applied to this time. The abnormal distribution due to the war was to the disadvantage of business everywhere. Credit was scarcer and dearer in some countries. The inflation in this country might have been greater had the production of gold been greater. The argument supporting the theory of a scarcity of gold assumes as fundamental that general price changes must be accounted for by changes in the price equation on the side of money. This is disproved in every period of business depression. A downward price movement is characteristic of every period of business recession. Important discoveries of gold must be made even to maintain present gold production, in the face of which the world's business is bound to continue increasing. It cannot be doubted that some way will be found

Jan 1, 1931

By John R. Lotz

DEVELOPMENTS in Iran currently arousing interest in a considerable portion of the world, particularly on the part. of that country's immediate neighbor on the North and in our own country, an inseparably related to and largely dependent upon the government's attempts to strengthen its economy and improve the standard of living of its people. These efforts are encompassed by provisions of the Seven-Year Development Plan recently enacted and not, in the process of implementation. It is a fine example of what one financially sound but extremely backward and poorly equipped country has undertaken to do on its own account and with its own resources. This Seven-Year Plnil was formally authoriztld by an act of the Iranian Parliament in February 1948. Its stated objects are to carry out such plans for the development of the country and its economy as ail1 raise the standard of livinc: and standard of education of the people, and re- duce the cost of living. A seven-yrar program for carrying out the work within the limits of appropriations was assigned under the law. The total amount to be expended during the seven- year period was fixed at the equivalent of $670 millioil at current rates of exchange.

Jan 1, 1950