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Slovenliness is as reprehensible in words as in clothes. Much writing that we recognize as poor in style is merely sloppy. Just as some students postpone the necessary shave or forget to change their collars, so young engineers in writing drop their articles, definite and indefinite, or omit prepositions where they are required, possibly to compensate for those they use unnecessarily The work will begin [on] Saturday. Influenza seriously affected many mines [during] the last three months. Flotation in America [during] the last two years has made tremendous strides. Construction of the mill started [on] August 12, 1915, at which time 75% of the excavation was completed. The idea I wish to convey is [that] there are mineral deposits to which the present law applies badly. For this reason, if there was [for] no other, the ownership of the ore below and [of] the surface above should go together. When a unit of mapping is furnished, be the unit a claim or [a] group of claims, it is necessary . . . A fully stocked store was started in Park City and all employees [were] sold merchandise on a strictly cost basis. The word "merchandise" is left without government or agreement. 'I suggest: ". . . and merchandise was sold to all the employees on a strictly cash basis." The verb 'be' is serving concurrently both as a principal and as an auxiliary in the following: At first the work was interesting and [was] liked by most of the men. The sulphide ore was more complex or [was] milled at an increased cost. The failure to repeat the auxiliary verb in successive clauses is a common error, as in The filter is filled with liquid allowed to empty, and then ignited.

Jan 1, 1931

By C. C. Griggs

FROM its inception, a limestone quarry or mine should be under the direction of a capable engineer. Before it becomes a reality, he should outline the future results, plan the most economical methods for moving the materials and the most efficient equipment, and pilot the undertaking along the narrow pathway of success, avoiding the pitfalls of uneconomical production and the precipitous walls of scanty profits. Inspection of successful limestone properties shows that all have had difficult engineering problems, the solution of which have required keen engineering ability. In approaching a subject of this nature, it is logical to follow the progress of the limestone operation from its inception to the end, as reflecting the engineering required. There are four major divisions: Investigation, equipment, development, and operation.

Jan 2, 1925

By W. A. Thomas

Steam is, and doubtless always will be, the basic power in the anthracite industry, either directly applied through engines and pumps or electrically. The rapidity with which electric power is being applied to the mining and preparation of anthracite leaves little doubt as to its utility and economy. There is practically no operation, except possibly the drilling of hard rock, that has not been successfully electrified and the matter of drilling is handled economically with electrically driven compressors and the standard compressed-air drills. Conservation and the seemingly ever-increasing cost of production, justify careful consideration of the possible results of the more extensive use of electric power in the industry. It is not planned to discuss, herein, the relative economies of individual applications but to consider the relative economy and flexibility of steam and electric power. The reports available for the year 1920 indicate a production of slightly over 80,000,000 tons of anthracite, of which 8,843,500 tons were used for power and heating purposes; in other words, over 11 per cent. of the production was used at the mines. Some of this was used to generate electric power at the mines, about 160,000,000 kw-hr., while 150,000,000 kw.-hr. was purchased from the public utility companies. One large producer, who is buying some electric power and generating some, used over 13 per cent. of the production for power and heating at the mines. Another producer, where considerable electric power is generated on the properties, is using less than 9 per cent. of the output for power and heating. One of the largest producers has a fuel consumption of over 15 per cent. of the output, besides which considerable power is purchased. A careful study of the field indicates that steam-operated plants use upwards of 13 per cent. of the production for power and heating, while electrically operated plants use about 1 per cent. for heating; so that, for steam-power purposes at least 12 per cent., or 268.8 Ib., are used for power out of each ton produced. In the complete electrification of anthracite mining operations, no set rule can be given for the power requirement, in kilowatt-hours per ton, as conditions vary widely in the matter of pumping, ventilation, and transportation, but the following cases are given as a basis of determining a range and a possible average power requirements:

Jan 1, 1922

By John Chipman, A. M. Samarin

It has been long known that the gas evolved during the boil in the open-hearth furnace is mainly carbon monoxide associated with smaller quantities of other gases. A number of attempts have been made to determine the precise effects of carbon and oxygen content of the bath, and of other factors, such as temperature, upon the evolution of carbon monoxide. In his investigation of the carbon-iron oxide product in liquid steel, Hertyl showed that the value of this product at equilibrium could be approximated by plotting the value of the product observed in open-hearth reactions against rate of carbon elimination, and extrapolating to zero rate. The results of this study showed a slight but definite effect of temperature upon the carbon-iron oxide reaction. Experimental studies of the evolution of gases from rimming-steel ingots have not yet attained the degree of precision necessary for an exact understanding of the effects of pouring temperature, carbon content, and iron oxide in the metal upon the composition of these gases. Klinger2 showed that the gas consists mainly of carbon monoxide, and that considerable variation in its composition occurs during the solidification of the ingot. In order that these variations may be understood in their proper relationship to the progress of solidification of the ingot and the segregation that accompanies solidification, it is essential to have a knowledge of the condition of equilibrium in the several chemical reactions by which the gases are being formed. It is also necessary to understand the effects of temperature upon the equilibria, and further, to know the manner in which the temperature of the liquid metal within the ingot changes as the skin of the ingot is being built up. The reactions in which we will be chiefly interested are those involving in the one case the oxides of carbon, and in the other case steam and

Jan 1, 1937

By N. S. Greensfelder

THE firing of explosive charges by electricity dates back to 1745 when a Doctor Watson is said to have used an electric spark for igniting gunpowder. His method failed in practical application because, to ignite blasting powder, heat must be applied for a period longer than the duration of an electrostatic spark; Wheatstone found that this does not exceed 14000 sec. The usual result, therefore, of an electrical discharge in gunpowder is to scatter the grains, without igniting them. Benjamin Franklin partly overcame this difficulty by confining the powder and crushing grains that lay in the line of discharge. In 1822, after the primary cell had been discovered by Volta, Robert Hare, professor of chemistry at the University of Philadelphia, noticed the heating of a short piece of wire placed in the circuit of a voltaic battery. Later work by Oersted, Faraday, Wheatstone, and Henley resulted in the development of the magneto blasting machines. Fulminates of gold and silver are thought to have been discovered by Cornelius Drebbel, about 1600. Pepys, in his diary for November 11, 1663, recounts a conversation with Doctor Allen, who told him about aurium fulminans "of which a grain ... . put in a silver spoon and fired, will give a blow like a musquett and strike a hole through the silver spoon downward, without the least force upward.1," This fallacious belief that explosives act downwards only, is still held by many who should know better. Fulminate of mercury was discovered by Howard in 1799. J. Shaw of Philadelphia is said to have invented a fulminate-of-mercury cap in 1814; his idea was later adopted by gunmakers in England and France. The principal advantages of

Jan 9, 1922

By J. E. Lawver, J. D. Raulerson, J. P. Bernardi, R. S. Hearon, D. Lynch, G. F. McKereghan

Despite recent economic problems, the future of the Florida phosphate industry appears optimistic. Florida has enormous reserves and will continue to produce a third of the world's phosphate supply simply by making changes in the present system of mining, beneficiation, waste disposal, and land reclamation. The geology and mineralogy of future deposits are discussed with reference to specific deposits. Lower ore grades, increasing power costs, and environmental regulations are necessitating development of new concepts of mining and matrix transportation. Because one of the ores to be mined in the future contains appreciable amounts of dolomite, research and development efforts are being concentrated on new techniques in beneficiation. Changes are being made in plant design to meet environmental and regulation standards. However, the expected new technology outlined for the industry depends on the geology and mineralogy of future reserves.

Jan 1, 1985

By John Chipman, K. C. McCutcheon

To a very large extent the quality of a mild steel ingot is determined by the manner in which it is poured into the ingot mold and its behavior during the first few minutes after it has been poured. The formation of the solid rim of metal around the periphery of the mold, the effervescent action of the liquid steel within this solidified rim and the upward or downward movement of the metal level are indications of what is going on beneath the surface of the liquid metal, especially at the interface at which solidification occurs. Observation of this "rimming action" enables an experienced observer to predict the thickness of the sound skin of the ingot and the location and extent of cavities or "blowholes" caused by entrapment of gases. The control of rimming action at the hands of a skillful steel pourer is a vital part of the control of quality in mild steel sheet, and the behavior of the liquid steel during the rimming period is a useful criterion of the melting and refining practices employed in the open hearth. The behavior of rimming steel during solidification depends primarily upon the evolution of gases from the molten metal and it is therefore a problem of considerable interest to determine the nature and amount of the gases evolved. A number of attempts to determine either the amount or the analysis of the evolved gases have been reported. Klinger,1 in 1925, analyzed the gases extracted from rimming, semikilled and killed steel ingots and found that the chief constituent of the rimming gas was carbon monoxide. The relatively large amounts of nitrogen reported in his first few samples may have been due to incomplete removal of air from the gas-collecting mechanism. McKune2 reported similar studies of rimming ingots from which surprisingly large proportions of nitrogen and hydrogen were evolved. Ameen and Willners3 determined both the amount and composition of gases extracted from unkilled ingots with the aid of diminished pressure. . Their ingots weighed only 80 kg. (176 lb.) and apparently were solid within two or three minutes, so that their

Jan 1, 1938

Contents A-Metal Mining B-Minerals Beneficiation F-Coal

Jan 11, 1951

By E. M. Wise

PLATINUM and palladium are the most generally useful, most ductile and least rare members of the platinum family. They have many impor-tant applications in the pure state but for other applications it is fre-quently desirable to harden them and otherwise modify their properties by alloying small amounts of the other platinum group metals with them. These alloys are frequently required to withstand very drastic forming operations and to possess certain mechanical properties to fulfill specific requirements. For these reasons a knowledge of the tensile properties and annealing characteristics of pure platinum and palladium as well as their more useful commercial alloys is important to the user, and the fabricator. The present work was undertaken to fill this need. Rather brief (5 min.) annealing treatments were employed to render the data of maximum practical value and all tests were conducted upon 0.050-in. dia. wire, initially reduced 50 per cent in area by cold drawing, for the same reason. CONCLUSIONS 1. Pure (thermocouple grade) platinum reduced 50 per cent by cold drawing exhibits the following tensile properties: ultimate tensile strength, 36,000 lb. per sq. in.; proportional limit, 27,000 lb. per sq. in.; elongation, 2.5 per cent in 2 in.; reduction in area, 95 per cent. When fully annealed by treatment at 1100°C. its properties are: ultimate tensile strength, 20,700 lb. per sq. in.; elongation, 30 per cent in 2 in.; reduction in area, 93 per cent.

Jan 1, 1934

By C. C. Henning

IN any line of human activity logical handling requires an amount of attention to each phase that is in keeping with the importance of that phase. In the complex and rapidly changing field of modern ferrous metallurgy it is difficult to allot the proper degree of attention to the various subjects, and it is not surprising that one or more subjects of major importance should for a time be neglected. Bessemer steel is a good example of a neglected subject. It is largely taken for granted, inferior physical quality is assumed for it, and there is a lack of interest in its technical development and commercial application. Availability of supply is limited. In spite of this technical indifference, limited source and lack of commercial exploitation, bessemer steel con-stitutes a large volume of tonnage in daily use. There is a fairly prev-alent idea even among technical people that bessemer steel survives mostly because of low cost and by reason of a dwindling residue of applica-tions sufficiently common to permit of its use. The difference in cost between bessemer and open-hearth steel is governed largely by the relative cost of manufacture of pig iron and the market price of steel scrap. During the past four years there have been long periods of time during which the price of steel scrap was low enough so that open-hearth steel was considerably lower in manufacturing cost than bessemer. As to application, it may be pointed out that thousands of tons of this material in the form of bessemer screw steel are applied for moving parts in automotive and other equipment. Some forging work and considerable heat treating, particularly carburizing, is performed on this grade.

Jan 1, 1935

By E. J. McCaustland

The behavior of steel after overstrain and at moderate temperatures is fairly well known. It has been made the subject of much investigation, and our knowledge is clear and definite on many points. The ultimate raising of the elastic limit, after moderate overstrain, and the consequent lowering of the ductility, seem to be well established. It is also well understood that the immediate effect of overstrain is to lower the elastic limit, possibly to zero, but that if not interfered with, this limit will subsequently rise higher than before. The " tests after moderate temperature," reported in this paper, were undertaken to verify the above statements for the particular steel under investigation, and also to determine, if possible, the total time required for complete recovery from this state of overstrain. The behavior of overstrained steel at temperatures at or below 32" F. is not so well known. Tests made by Prof. E. G. Coker, at McGill University,' show that steel, overstrained and subjected to cold, will remain in a state of overstrain for an indefinite period. I am not aware of any other published results of tests along this particular line. The effect of time and temperature on the recovery of steel from overstrain was made in 1902-3 the subject of some investigation in the laboratories of the College of Civil Engineering of Cornell University. A general plan was outlined in connection with the regular courses of instruction in testing of materials; but the press of routine work and the demands of the schedules on the time of the students were so great as to presage long delay in the completion of the work. Not much had been accomplished up to 1904-05, when Messrs. E. C.

Jan 1, 1907

By C. B. Foraker

THE Magma mine, of the Magma Copper Co., at Superior, Pinal County, Arizona, is 68 miles east of Phoenix and 21 miles west of Miami, Arizona, on highway U. S. 180. TEMPERATURES AND UNDERGROUND WATERS Surface Temperatures.-The average surface dry-bulb temperature at Superior is 72.4º; wet-bulb, 57.4º; with an indicated relative humidity of 38 per cent. The average yearly rainfall from 1921 to 1936, inclusive, was 18.74 in. The maximum condition of the atmosphere is in June, July and August, and the minimum is in January and February. The surface temperatures, of course, influence the temperatures of the down- cast shafts; however, the variation between winter and summer causes a difference of only 2º to 3º in the stopes and working places that are not close to the intake shafts. Average atmospheric conditions are shown in Fig. 1. Rock Temperatures.-Rock temperatures on the deeper levels of the mine are as follows: [ ] There appears to be no difference in rock temperature for any particular horizon of the various formations or in the vein. Water encountered is always the same temperature as the rock from which it flows, and for this reason it is thought that the water is heated by the rock; not the rock by the water. The country rock apparently has been heated by the various intrusions, perhaps the vein itself, and has not yet had time to cool off. The geothermal gradient (Fig. 2) as indicated by the rock temperatures given above is 1 ½ º per 100 feet. Underground Waters.-The underground water varies from 350 to 565 gal. per min., depending on the rainfall. The limestone and other

Jan 1, 1938

By Harry M. Mikami

Chromite is the only ore mineral of metallic chromium and chromium compounds and chemicals. Because of this fact, chromite and chrome ore are used synonymously in trade literature. In commercial market quotations, chrome ore is the term commonly used. Chromite per se, because of properties imparted by its chromium content, is used in refractories and in special purpose moulding sands for metal casting. There are many other minerals containing some, generally minor, amounts of chromium, but none are commercial sources of the element (Thayer, 1956, p. 15). Chromium and chromite have many diverse uses that, directly and indirectly, critically affect vast segments of our modern industrial system. Most important are probably the metallurgical applications wherein chromium is a component of heat, abrasion, corrosion, and oxidation-resistant, and high strength alloys of many types. Stainless steels are the largest volume category of chrome-bearing alloys. Chromium chemicals are used in leather tanning, in pigments, dyes and mordants, printing, :hemica1 process industries, photography, pharmaceuticals, metal plating, pure chromium metal production, and for many other purposes. Chromite is a necessary constituent in basic refractories indispensable for the production of steel, copper, cement, and glass. Under present economic-political conditions, he U.S. and for that matter, North America, has virtually insignificant ore reserves of chromite. There are chromite deposits, as will be described, but they would only be used under highly abnormal conditions if all outside sources were cut off. All chromite used in the U.S. is imported from the eastern hemisphere in which are contained the principal world reserves. As the main suppliers in 1971-72 were the USSR, Turkey, Republic of South Africa, Philippines, and Rhodesia, the strategic nature of chromite is obvious.

Jan 1, 1975

By F. C. Stanford

The work of an engineer is to direct natural forces so that the: bring about the results that he wishes to secure. Heretofore he ha concerned himself chiefly with physical forces and inanimate objects until he has secured a truly marvelous degree of control over them The great problem of the present age is to secure a like degree of know1 edge and control of the human factor. Progress has already been made along this line, but it is only a beginning. Wilhelm Ostwald says tha scientific knowledge enables a man to be a true prophet; but it must be remembered that a good many people do not seem to be able to main tain a high average in prophecy. In short, 'the average of knowledge is not equal to the average needs of the present time, but continually fails to keep pace with it. It has been aptly said that the really essentia need of the period is for more brains; if we only had sufficient knowledg and sagacity we could not only solve all difficulties, but prevent then from arising. This generalization holds good for an industrial organization. Th most vital need of the management is for more brains. The logica course for an engineer in charge of an industrial organization is, therefore to direct whatever forces may be at his command toward the development training, and guiding of all the brains in his organization. This is easie said than done, for it involves the carrying on toward two objective: the maximum of productive work, and the development of the individual who perform it. This is essentially like the rebuilding and enlarging of plant, keeping it in full operation the while. On the other hand, if th aim is merely for maximum production from an organization, withou offering opportunity for development, the final outcome will necessari be like that of a plant that is driven at full capacity without stoppin for repairs or improvements; it eventually becomes so run down th either a complete rebuilding is necessary or else it has to be abandone

Jan 1, 1918

By P. F. Gnirk, J. B. Cheatham

The basic objective of this paper is to present a review of the state of knowledge concerning the fundamental mechanics of rock/bit-tooth interaction under downhole conditions. Of particular concern is the contributing significance of the various variables associated with the generation of rock chips by a single penetrating bit-tooth. The variables to be considered are fluid pressures which simulate borehole conditions, the mechanical properties of the rock, the shape and angle of attack of a bit-tooth, and the rate of load application on a bit-tooth. In addition, consideration is given to multiple bit-tooth penetration insofar as the effects of distance from and geometrical shape of adjacent penetration craters are concerned. Both experimental results and idealized theoretical models for single bit-tooth penetration are presented. Finally, the applicability of plasticity theory to drilling phenomena at depth, results of recent drag-bit studies, and several general theories of roller-bit drilling are briefly discussed. FUNDAMENTALS OF ROCK/BIT-TOOTH INTERACTION Drilling efficiency at depth in terms of penetration rate depends largely upon three essentially interdependent factors: 1) the bit, insofar as the mechanical motion, shape, and configuration of the bit-teeth are concerned; 2) the rock, as regards its mechanical behavior, or response to the penetrating action of the bit-teeth, when subjected to a state of stress induced by mud column, interstitial pore, and overburden pressure (and at great depths to high temperature) ; and

Jan 1, 1967

By Rossiter W. Raymond

The extent to which the divining-rod is still used in this country for the detection of hidden treasure, mineral veins, or springs, is ' much greater than educated persons would be likely to suppose. For many years wells have frequently been located by its aid in New England, where the belief is widely extended among the farmers that in the hands of peculiarly gifted persons this instrument possesses special virtue. Large numbers of the oil wells of Pennsylvania

Jan 1, 1883

Unlike the bituminous part of the coal industry, the production of anthracite has been fairly well publicized; in fact until about 1845 whenever the coal industry of Pennsylvania was mentioned in papers, magazines or books, anthracite only was meant. Beginning with shipments by river in 1820 fairly complete records of shipments were published each year, and as this variety of coal was the only one used for domestic purposes east of the mountains and north of the Potomac, there was considerable interest in the producing fields on the part of the public. Transportation of anthracite was the cause of the building of the early canals in the state, and later, of some of the earliest railroads. In most publications it has been assumed that commencement of shipments in 1820 was the beginning of the industry; this is far from being so, and it is with the earlier developments this chapter will deal, leaving the later and better known records to existing publications. (See Table No. 53.) The first reference to coal in Pennsylvania by Gabriel Thomas in 1698 has already been mentioned,1 it could only have been anthracite in that section; although of course, he never saw any coal there. Little coal was used excepting by smiths for many years after that. In 1728 the Coventry Forge paid the expenses of a man "to town for Sea Coall and Steell for ye hammer;”2 in 1729 New Castle coal was sold in Philadelphia;3 in 1740 an advertisement mentioned, "very good Pitt and Sea Coal at 18 pence a bushel; at which price 'tis allowed to be cheaper Fewel for Hearth Fireing than Wood at the present Rates,"4 a view not shared by most of the people there for about eighty years; in 1752 Newcastle coal was again mentioned.5 There are no references to coal in the writings of any of the Moravian missionaries, although some who settled near Mauch Chunk in 1746 said that the Indians there made their pipe heads of a soft black stone, which was much more apt to have been slate than anthracite." Several stream

Jan 1, 1942

By A. E. Martin, Gerhard Derge

IF the molecular constitution of molten slags were better known, the nature of chemical reactions in slags and between slags and metals could be better understood and as a consequence might be better controlled. Constitutional information can be obtained by studies on either the molten or the solidified slags. Valuable as the studies on solidified slags admittedly are for many purposes, especially as control methods in steelmaking, they are always of questionable value in giving information on the molecular constitution of liquid slags. However, the characteristics of molten slags such as viscosity, rates of diffusion, and electrical conductivity can be determined experimentally and interpreted along with other knowledge on slag-metal and slag-gas reactions so as to provide direct information on liquid slags. Metallurgists are accustomed to regard reactions in molten slags as involving only neutral molecules, whereas it is quite possible that ionic constituents are actually involved. For example, the dissociation of calcium silicate usually is represented as Ca2SiO4 = 2CaO + SiO2 although a reasonable alternative would be to write Ca2SiO4 = 2Ca+2 + Si04-4 Such ionic dissociation has been suggested frequently without adequate experimental proof. This paper deals especially with electrical conductivity measurements on slags of the blast-furnace type. These measurements were made to determine whether or not slags are ionized and, if so, to provide a qualitative estimate of the extent of ionization. Electrolysis experiments that indicate the identity of the ions present are also reported. Since the presence of ions has not been considered carefully in modern slag studies, the relevant literature will be reviewed. REVIEW of LITERATURE In 1906 Aiken1 obtained a patent for a continuous process of producing iron electrolytically by passing a direct current through a bath of FeO-SiO2 to which iron oxide was added periodically to maintain a uniform concentration. The patent also included the addition of CaO and MgO to the bath to lower its melting point. The silicate melts involved were thus in the same system as basic open-hearth slags but with higher FeO and lower CaO contents. Electrical conductivity measurements were made on some molten silicates by Doelter2 in 1907. Natural silicates, such as

Jan 1, 1943

By J. E. Wilson, F. P. Lebar

TYPICAL of southwestern Wyoming are coal structures that dip from 4° to 17°. Those at the Reliance and Winton mines of the Union Pacific Coal Co. average 91/2 and 15°, respectively, and dip almost directly to the west. By using a hoist for main haulage, a method of mining has been developed whereby four places are driven on the pitch of the seam. Slightly upgrade from the strike at intervals of 300 ft. a two-entry system is driven to the north and to the south. In both fields, which are nongassy, an exhaust system of ventilation is used. Slope, manway, and lower or haulage entries are placed on the intake. Two air-courses and upper or breaking entries are placed on the return. A retreat system of mining is used exclusively. From the opening of its first coal mine, in the year 1868, until 1923, when the Joy loader was introduced into The Union Pacific Coal Company's operations, slopes, aircourses, and manways were driven by hand. Development work was conducted on the night shift or off shift, and the main hoist was used for haulage. The slope was driven down the pitch with crosscuts turned at intervals of 75 ft. and entries at 230 ft. Connections to the workings above were made by driving up the pitch 75 ft. Mule haulage was used to furnish cars to the hand loaders driving planes up the pitch. A sheave was placed at the upper end of the plane with a I¼-in. hemp rope dou- bling around it and having me end attached to the car and the other to the mule. The mulc, pulling downhill, raised to the working face a small wooden car of one-ton capacity. With the introduction of mechanical loading, mule haulage and small wooden cars disappeared and auxiliary hoists, electric locomotives, and steel cars with a capacity of 4 tons were substituted. Development work was done during two or three shifts of the 24-hr. period. Driving of haulage slopes down the pitch by hand continued. Crosscut intervals were changed to Ioo ft. and the crosscuts were driven with shaking conveyors. With the use of a 90° swivel, aircourses and manways were driven up the pitch. Entry intervals were changed from 230 ft. to 300 feet. Mobile loaders of the Joy type were first employed by this company in the year 1923 at Hanna, Wyo. In 1928, two 4-BU Joy loaders were transferred from Hanna to Winton No. I mine, where they were used in driving slopes and entries. At the time of transfer, the machines were about worn out and were not suited to the steep pitch, therefore frequent breakdowns occurred. However, experience justified the belief that the mobile loader was fitted for driving slopes in this field. During 1937 a unit was installed in Reliance No. 7 mine, and during 1939 one in Winton No. 7½ mine. With the introduction of this type of mobile loader, a new era of development began. Speed undreamed of in hand-loading days became a reality. The cost of development down the pitch has been reduced until it

Jan 1, 1942

By Sidney Swensrud

ABOUT a year ago, I attempted in a general way to trace the origin and development of some of the marketing problems of the petroleum industry, and to describe certain trends which it then seemed possible to foresee. To summarize briefly, it was pointed out that the consumption of gasoline, after increasing for more than a decade at an almost unbelievable rate, was slowing down, but that the two factors which determined the supply of gasoline-namely, the production of crude oil and the percentage of gasoline derived therefrom-were tending steadily to mount. It was suggested that, while the increase in gasoline outlets began with and probably was justified at the start by the rapidly increasing demand, long after all reasonable requirements as to number of outlets had been met the number continued to increase-if anything, at a still more rapid rate-because by that time the overproduction of crude had begun to exert an impelling urge upon the owners of that crude to seek assured outlets for it in the form of gasoline. As more and more companies became integrated all the way from crude oil to marketing, there took place an ever-increasing competition among them, not only for the existing outlets but for new ones. The wide margin between wholesale cost and retail price, which is characteristic of the early stages of most new industries, persisted in the oil industry longer. than in most industries, for various reasons. The existence of that wide margin provided in large measure the means of attracting new outlets, for as the gallonage per outlet declined with the increasing number of outlets, competing companies simply offered the dealers a larger part of the total margin. The very nature of competition suggests that such a process would continue until practically all of the available margin was thus given away, and such was clearly the, tendency. It was a system that in turn produced increasing marketing expense per gallon on account of the -diluted gallonage per outlet; this increased expense might seem to have provided a justification for continuing wide margins. Economics, like its parent, nature, however, progresses by mutations and so began to throw out new types of marketers, in the form cf tank-car service stations, cut-price jobbers, and the like-heretics or

Jan 1, 1932