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By R. P. Rothwell

THE milling of silver ores has arrived at a great degree of perfection in the mining districts of our Western States and Territories, and I have thought the record of the practical results obtained at the present time, in a few of the principal districts, would prove of value and interest to many of our members, both at home and abroad. An American silver mill is composed, in descending order from where the ore is dumped, of: 1st. A rock-breaker, usually of the Blake or Alden pattern ; 2d. The battery of stamps, the number of which varies from 5 to 120, generally in batteries of 5 or 10 heads, so arranged that a single battery may stand while the others are running; 3d. The tanks where the crushed ore settles (if it is a wet stamping-mill), or of a drying-floor if the crushing is done dry; 4th. Amalgamating pans ; 5th. Settling pans ; 6th. Agitators or pans in which mercury escaping in the tailings is caught; 7th. Blanket sluices, over which the tailings run, and where mercury and unamalgamated sulphides are saved. A reference to the engravings (see plate), which show one of the latest forms of an 80-stamp silver-mill run by a turbine water-wheel, will show clearly the arrangement of the several parts. THE ONTARIO, UTAH, SILVER MILL. One of the best examples of a silver-mill, and at the same time one of the most successful concerns in the West, is the mill of the Ontario Silver Mining Company, near Salt Lake, in Utah. This mill treats the ore from the Ontario mine, ore which at present is very base, being composed of zinc, lead, and silver sulphides and silver chloride in a quartz gangue. This ore has become baser as the mine attained greater depth, though the vein holds its own, or rather increases, both in thickness and richness. The mill is man¬aged in a skilful and economical manner, though the necessity for * Read at the Montreal meeting, September, 1879.

Jan 1, 1880

By Harold Rose

THE peak of production from the Appalachian natural gas field was apparently reached about 10 years ago, and the annual production from Pennsylvania, West Virginia and Ohio has now dropped to about two-thirds of the amounts obtained in 1916 and 1917. This .falling off in production has occurred in spite of vigorous efforts and large expenditures by producing companies to maintain or increase their output. The greatly increased costs of development and handling are reflected in the present average value of natural gas at the point of consumption, which value in the three states referred to, has more than doubled in the past 10 years. While it is true that the natural gas production of the United States has increased during recent years, this increase has come from southwestern states, particularly from Oklahoma, California, Louisiana and Texas, which states are now leaders in the production of this valuable but fleeting resource. Pennsylvania, originally the leading state in natural gas production, occupies sixth place in the latest (1924) U. S. Bureau of Mines statistics. West Virginia, which held first place for 15 years, has dropped to third rank, and Ohio is the seventh state in the order of natural gas production. Domestic and industrial demands for gas are constantly increasing everywhere in the United States. These growing demands have accentuated the difficulties in the localities with depleted natural gas supplies, and serious shortages have already occurred during winter months in the Pittsburgh district. Some relief has been obtained by placing restrictions on the industrial use of natural gas, and by increasing the price (which tends to reduce consumption). Yet these are but temporary expedients for checking gas consumption, which fail to solve the problem of adequate future supplies of gas.

Jan 10, 1926

Jan 1, 1941

By E. N. Skinner, Arthur Philliops

During the course of an experimental program concerned with the hydrogen embrittlement of copper containing oxygen in concentrations within the solubility limits it became necessary to make a critical appraisal of the literature dealing with the solubility relationships of oxygen and solid copper. The latest determinations, and perhaps the only data obtained on "spectroscopically" pure copper, are those of Rhines and Mathewson' who reported that the solid solubility increases from 0.007 per cent oxygen at 600°C. to about 0.01; per cent at 1500ºC. Hanson, Marryat and Ford2 had previously placed the solubility limit at less than 0.009 per cent oxygen at 1000ºC. and Allen and Street3 had suggested, on the basis of an unpublished research by T. Hemitt, not over 0.005 per cent oxygen at 500°C. In the introductory stages of the investigation indirect evidence accumulated to suggest that the solubility limits were significantly lower than those previously reported. For this reason it was deemed essential to clarify this point before proceeding with a program intended to establish a quantitative relationship between hydrogen embrittlement and oxygen concentrations positively known to be within the solid solution range. Furthermore, the increasing production and the highly selective applications of the commercial "oxygen-free" coppers inevitably direct attention to the practical necessity for exact knowledge regarding the effects of mini-tie concentrations of the elements ordinarily found in the high-purity coppers now available. Of these elements oxygen occupies a unique position, not only by virtue of its specific effects on copper but more particularly in view of its important reactive tendencies toward the other impurities with which it is associated. Rhines and Mathewson considered several methods for measuring the solubility of oxygen and finally adopted the simple plan of saturating the specimens, obtained from redeposited cathode copper, by heating at the desired temperature in air. After the removal of surface oxide by mechanical and chemical means, the oxygen content was determined in the underlying metal. In general, this process of saturation, with a few modifications, was followed by the present writers. Although the procedure is direct and has obvious advantages, its effectiveness, unfortunately, is reduced by an excessive scaling of the copper, particularly at the higher temperatures. After saturation treatments above 900°C. the writers found that the specimens, necessarily rather thin in the original condition, consisted largely of scale and yielded too little metal for a satisfactory analytical sample. Furthermore, great difficulty was experienced in effecting complete removal of the scale. Needless to say, it is necessary to exercise extraordinary care in the preparation of the surface of the analytical sample in order to eliminate submicro-scopic fragments of cuprous oxide which ordinarily are lodged in the crevasses and

Jan 1, 1941

By E. N. Skinner, Arthur Philliops

During the course of an experimental program concerned with the hydrogen embrittlement of copper containing oxygen in concentrations within the solubility limits it became necessary to make a critical appraisal of the literature dealing with the solubility relationships of oxygen and solid copper. The latest determinations, and perhaps the only data obtained on "spectroscopically" pure copper, are those of Rhines and Mathewson' who reported that the solid solubility increases from 0.007 per cent oxygen at 600°C. to about 0.01; per cent at 1500ºC. Hanson, Marryat and Ford2 had previously placed the solubility limit at less than 0.009 per cent oxygen at 1000ºC. and Allen and Street3 had suggested, on the basis of an unpublished research by T. Hemitt, not over 0.005 per cent oxygen at 500°C. In the introductory stages of the investigation indirect evidence accumulated to suggest that the solubility limits were significantly lower than those previously reported. For this reason it was deemed essential to clarify this point before proceeding with a program intended to establish a quantitative relationship between hydrogen embrittlement and oxygen concentrations positively known to be within the solid solution range. Furthermore, the increasing production and the highly selective applications of the commercial "oxygen-free" coppers inevitably direct attention to the practical necessity for exact knowledge regarding the effects of mini-tie concentrations of the elements ordinarily found in the high-purity coppers now available. Of these elements oxygen occupies a unique position, not only by virtue of its specific effects on copper but more particularly in view of its important reactive tendencies toward the other impurities with which it is associated. Rhines and Mathewson considered several methods for measuring the solubility of oxygen and finally adopted the simple plan of saturating the specimens, obtained from redeposited cathode copper, by heating at the desired temperature in air. After the removal of surface oxide by mechanical and chemical means, the oxygen content was determined in the underlying metal. In general, this process of saturation, with a few modifications, was followed by the present writers. Although the procedure is direct and has obvious advantages, its effectiveness, unfortunately, is reduced by an excessive scaling of the copper, particularly at the higher temperatures. After saturation treatments above 900°C. the writers found that the specimens, necessarily rather thin in the original condition, consisted largely of scale and yielded too little metal for a satisfactory analytical sample. Furthermore, great difficulty was experienced in effecting complete removal of the scale. Needless to say, it is necessary to exercise extraordinary care in the preparation of the surface of the analytical sample in order to eliminate submicro-scopic fragments of cuprous oxide which ordinarily are lodged in the crevasses and

Jan 1, 1941

By A. J. Weinig

NEED for some simple method of determining tonnages in mill circuits has always been felt by operators and consultants alike. To meet this demand the following method was evolved and has been found accurate and practical after considerable testing on various mill flows. The essence of the method is to add a chemical at a uniform rate to a mill flow, such as a launder conveying pulp, and then determine the concentration of the added chemical in a sample of the pulp. From this procedure the tonnage can be calculated. Common table salt has proved the most satisfactory chemical for ordinary conditions. It has many decided advantages for use in tonnage determinations, among them being the following:

Jan 1, 1933

By A Andersen

DURING an investigation of the copper-rich portion of the copper-silicon-iron system as part of an extensive research program on P.M.G. alloys, which was begun in 1937 in the research laboratory of the Phelps Dodge Corporation, it became apparent that the binary copper-silicon system below 7 per cent Si needed revision, therefore an investiga-tion was undertaken. Both X-ray methods and microscopic technique were employed. Despite the many investigations that have the clarification of this sys-tem as their object, no two successive reports on the system have agreed in placement of the alpha-phase solubility limit, and uncertainty about the secondary phase first to appear has been voiced several times.3,4,5 It was therefore not surprising, when T. Isawa's6 and M. Okamoto's7 works were reported at the time we were finishing up our experimental work, to find essential disagreement between their results and ours. But when C. S. Smith's latest work on the copper-silicon system8 was published just as we were finishing our laboratory report, it was indeed gratifying to find that the latter's diagram and ours checked in all essen-tial features, except the temperature of the peritectic line above 830° C. Many attempts were made to retain the beta phase during the present investigation, but none was successful. Isawa,6 however, reports that he has been able to obtain X-ray photograms of the beta phase. The structure, he states, is body-centered cubic with a lattice constant of 2.848 A.. at 7.2 per cent Si. Okamoto7 and Smith8 both use the designation Kappa for the hexag-onal phase, and to avoid confusion this designation will be adhered to in the present paper.

Jan 1, 1939

By Howard Eavenson

SOME time ago, in a conference considering the mechanizing of a group of mines, I was asked if I knew of any data showing the relative frequency of accidents due to the use of 275 or 550-volt current inside mines and having a recollection of seeing some in print, the answer was made that I would find what was available. Subsequent search failed to find any pub-lished records of any kind giving such figures and none of the compensation agencies of whom inquiry was made were able to supply any, excepting the Pennsyl-vania Compensation Rating and Inspection Bureau, which had some data covering a few months for some companies in that State. The inquiry was confined to the three largest producing States, Pennsylvania, West Virginia, and Illinois. The inspection departments of neither of the first two had any such records, and in Illinois, only 275 volts has been allowed inside the mines for many years. A laborious inquiry has resulted in the data, shown in Table 1, which on this account was confined to the years 1921 and 1925, the latter being the latest figures available. In each State, to find the mines using 275 and 550-volt current respectively, it was necessary to list the mines from the Coal Catalog, and then to complete the list by inquiries from the companies directly, from Operators' Associations and from Inspection Depart-ments. As the mines not electrified, and those using

Jan 5, 1928

By Sid T. Killan

The utilization of the reducing power of blast-furnace gas can be estimated by applying two rectifying calculations to the gas analysis. A resulting corrected CO/CO2 ratio varies inversely with furnace production. Directions for calculating the corrected CO/CO2 ratio are given, and a corrected CO/CO2 ratio is compared with actual furnace production. THE inadequacy of the normally accepted CO/CO, ratio as a measure of blast-furnace performance and furnace efficiency was discussed following the presentation of the paper by H. F. Dobscha.' In this outstanding example of careful observation on large scale blast-furnace operation, the changes occurring with beneficiated ores were: 1—A net gain in tonnage of 21.2 pct. 2—A decrease in net coke of 15.3 pct. 3—A decrease of 1.9 pct in the CO/CO, ratio. In this great change in furnace performance, the CO/CO, ratio proved itself worthless. The discussion of the inadequacy of expressing furnace performance and efficiency by the CO/CO, ratio led indirectly to the calculations forming the basis of this paper. At that time Dr. T. L. Joseph said: "We must consider difference in CO, from the stone in the two cases when we talk about the ratios of CO/C02." This statement is used for the second of the two CO/CO, ratio corrections forming the basis of this paper. The research work in attempting to find out why the furnaces could op-erate so differently with practically the same CO/CO, ratio lead not to the answer sought but, after a shift to the gaseous phase in the research work, the proof that the normal CO/ CO, ratio was outmoded and a new corrected ratio should replace it. To be of any value, any new corrected ratio should express approximate furnace efficiency and give an idea of practical furnace performance to be expected. This the normal CO/CO, ratio has failed to do. However, in the absence of anything better, some credence has been attached to the normal CO/CO, ratio. As far as the writer can ascertain, the present paper is the first attempt to change or improve the normally accepted index of

Jan 1, 1952

By C. M. Young

The following paper has been prepared with the object of placing on record in the Transactions some facts concerning the present condition and future prospects of the coal industry of Illinois. In presenting it, the writer wishes to say that a considerable amount of the material contained is taken from the publications and records of the Illinois Coal Mining Investigations, the annual Coal Report of the State Mining Board, and the work of the State Geological Survey. Coal Beds and Mining Methods According to the latest maps of the State Geological Survey, there are only 19 of the 102 counties of the State some portion of whose territory is not within the borders of the coal measures. If outlying areas in Calhoun and Whiteside Counties are considered, the number is reduced to 17. This does not mean that all of the 85 counties that are partly or wholly underlain by coal measures will become producers, as there are some portions of the State in which the coal does not occur in beds of such thickness as to warrant the hope that it can be mined. The mining of coal is widespread, however, for in 1916 there was production from 61 of the 102 counties of the State, There seem to be no cases in which operations will be limited by depth, as none of the coal measures lie at depths much greater than those at which it has been proved that coal may be profitably mined in this field. In fact, the deepest shaft reaching a bed of bituminous coal in the United States is located in this State at Assumption, where coal only 3 ½ ft. (1.07 m.) thick is worked at a depth of 1004 ft. (306 m.). The coal beds occur in the form of a basin which is deepest along a line extending through the central part of the State and bearing a little west of north. The northern, western and southern borders of this basin lie within the boundaries of the State, but on the eastern side the Illinois field is continuous with the Indiana field. The glacial drift covers all except the extreme southern end of the State and the visible outcropping

Jan 1, 1918

P. W. SHIMER, Easton, Pa. (written discussion*).-When lump calcium cyanamid is immersed in the melt of mixed chlorides of the alkalies and alkaline earths in the manner described in the paper, the amount of sodium cyanide formed in the melt, as shown by numerous analyses, is but a small fraction of that formed by the reaction referred to by Mr. Johnson. The case-hardening effects in my process are, however, at least as good as when the common cyanide baths are used. Moreover, when compared with the cyanide baths, the gases evolved in the new process are harmless, consisting of nitrogen, carbon monoxide (which burns to carbon dioxide on the surface of the melt), and occasionally a little carbon dioxide. These gases are not irritating or poisonous, whereas the vapors arising from cyanide baths are both irritating and poisonous. The complex chemical reactions that take place in and on the surface of the melt are being investigated by the writer, who hopes, in due time, to communicate the results of his work.

Jan 7, 1919

By E. D. Meier

SINCE Dr. St. Albans, in 1840, began to build successful watertube boilers—some of which are still in use—the gravity-return water-tube boiler has been built in many forms, more or less familiar to all who have studied the subject. A single firm in this country published recently a pamphlet, showing some fourteen modifications of their boiler during about as many years. There were hence available to the thoughtful inventor of this latest form many data showing what forms were to be avoided, as well as the effects sure to follow certain erroneous methods of construction in the older types. Improvements in materials, tools, and workmanship made possible, forms formerly prohibited by excessive cost. The first Heine boiler was built by A. Borsig & Co., for the

Jan 1, 1886

By M. A. Grossman

THE hardenability of most steels can be predicted within 10 to 15 per cent provided the complete chemical composition is known, including "incidental" elements; and provided the as quenched grain size is known; and provided, finally, that the composition and heating temperatures for hardening are such as to result in austenite free from carbide particles. In method proposed herein, the steel is considered as having a base hardenability due to its carbon content alone (the hardenability of a "pure steel" of the given carbon content, without any other elements), and this base hardenability is multiplied by a multiplying factor for each chemical element present. After multiplying all these together, the final product is the hardenability. Grain size may be taken into account either in the base hardenability or after the multiplication. Hardenability is stated in terms of "ideal critical diameter"; namely, the diameter of bar, in inches, that will just harden all the way through (absence of unhardened core) in an "ideal" quench, and the calculation may also be related to the Jominy test. The data bring out certain features rather clearly. For example: I. It is quite useless to attempt to predict hardenability unless all elements, including "incidentals," are known; thus an "incidental" chromium content of o.-2o per cent increases the hardenability by about 50 per cent. 2. The relative effectiveness of different alloys is sometimes unexpected; thus molybdenum when calculated in this way appears to be of the same order of effectiveness as manganese, rather than much more powerful as would appear to be common experience; observe that an increase from no manganese to 0.20 per cent Mn provides a multiplying factor of 1.67, and an increase from no molybdenum to 0.2o per cent Mo provides a factor of 1.63, an increase of over 6o per cent in each case. However, if to a steel containing 0.50 per cent Mn there is added "20 points of manganese," the factor is raised from 2.65 (for 0.50 per cent Mn) to 3.35 (for 0.70 per cent Mn), or an increase of only 26 per cent. Thus the first small addition of an element has a much more powerful percentage effect than an equal further addition when some is already present, and in most cases the effect of molybdenum is considered in relation to a steel in which molybdenum is absent. 3. If two elements are equally effective, a greater harden ability will be obtained by using, for example, o.5 per cent of each than by using 1.0 per cent of either of them alone. 4. A knowledge of the as-quenched grain size is essential for precise work, since a difference of only one grain size number (say No. 7 instead of No. 6) makes a difference of almost 10 per cent in hardenability (in these units); this, however, does not apply to certain steels of high hardenability. It should be emphasized that in chromium steels (over 0.30 per cent Cr) and chrome-molybdenum and chrome-vanadium steels, undissolved carbides are likely to be present in the steel as quenched, and that in such cases the charts can indicate only a maximum possible hardenability, whereas the extent of hardening actually obtained may be much less. Thus tests on a number of chrome-molybdenum steels have indicated a degree of hardening amounting to only 50 to 65 per cent of the maximum possible, and in chromium steels from full hardening (100 per cent) down to as low as 70 per cent. On the other hand, when the amount of such elements is small (Cr under 0.30 per cent, Mo up to 0.25 per cent in the absence of Cr, and V up to 0.04 per cent), the charts provide reasonable approximations. The precise figures on the charts are suggested as tentative, subject to some modification as more data accumulate, but the fundamental concept appears to be supported by tests made on a wide variety of steels, a few of the correlations being shown in Fig. I.

Jan 1, 1942

By Hokuichiro Ohmachi

INTRODUCTION Metallic minerals have been formed only through complex geologic processes which took place at certain stages of the earth's histrory. Their concentration, abundance, and distribution are, therefore, restricted geologically, and very small in global scale. Ore is a mineral deposit or mineral concentration from which metals can be economically extracted by the contemporaneous technology. By this definition, several factors should be considered before any mineral deposit is regarded as an ore. The grade of mineral concentration and the scale of the reserve are most important. Demand for the metal and its price are the other factors. Advancement of technology in mining and extraction are also vital. Copper, for example, is now commonly extracted from the ores containing less than 0.3% of the metal. However, in the 1700's the common minerable grade was about 13%, and in the 1900's between 5 to 2.5%. This decrease in minerable grade is a function of not only the demand for copper, but also technological progress in mining and metal extraction in this case. Availability of ores has recently been subject to political factors, which were not the primary concern in the past. The petroleum of the Middle East is the prominent example. The metallic minerals are classified into three categories. The first one is the minerals free from these factors mentioned above. Iron and manganese belong to this category. The second category include aluminum, copper, nickel, cobalt, titanium, lead and zinc. These metals can be provided by the future progress in technology which enables the use of lower grade deposits. The third one represents the metals whose occurrence is geologically limited, and, thus, subject to the political factors. Niobium and tantalium are the example. In this article, I discuss these minerals in detail to give an outline of the factors which brought their concentration, distribution and availability. SELECTED MINERAL CONCENTRATIONS Iron Major iron ore deposits are the features of the relics of ancient continental crusts. They are found in all the continents where the Precambrian rocks expose. They do not occur in the oldest rocks (3,000my old) nor in the youngest ones (600my old). They are sedimentary rocks, normally, exhibiting alternations of bands of iron oxides (magnetite and hematite) or iron silicates (especially greenalite), and bands of silica, variously described as jasper, quartzite and chert. The best known banded iron ore deposits exist in the Lake Superior region of the North America, and their distribution extends at intervals to Labrador of Canada. Other examples occur in the U.S.S.R. Brazil, Venezela, India, the mainland China, and southern and western Africa (Liberia and Guines) (Table 1). Recently large deposits have been discovered in the Hammersley region of the western Australia, and northern and central region of Brazil. These ore deposits were originally formed in shallow seas where simple but abundant life existed. After the deposition, enrichment processes , related to tropical weathering, have brought about wholesale removal of silica to produce the deposits of best quality. Ores with 50-60% iron represent the best products in the Precambrian fields. Since local reserves of this high grade ores approach to exhaustion, benefication processes have been used effectively to upgrade much leaner ores (for example, taconite with 20-25% iron in Minesota, U.S.A.). There are two other types of iron deposits. Ironstone, a sedimentary rock containing goethite, chamosite and siderite, first appeared in early Paleozoic times in the stratigraphic record, and reached its Zenith in the Jurassic. Similar bedded iron deposits are found in the belt from the Cleveland Hills to Oxford in England, and in the "minette" oolitic ores of Alsace-Lorraine in Luxenburg and France. The iron content of these ironstones seldom exceed 30%, but they usually contain calcite and are self-fluxing. They also have phosphorous as undesirable impurity. Because of the grade and impurities, they require more fuel than the Precambrian ores. The third type of iron ore is associated with igneous activity and consists of magnetite and some hematite, and apatite. This deposit is believed to be a product of magmatic differenciation. It occurs in Kiruna of Arctic Sweden. The iron ore, therefore, present no global shortage problem. They extend to considerable depths. Their concentration is largest among the metals. If low grades were treated, the resource can be stepped up much substantially. Manganese Manganese is a ferro--alloy metal, thus, essential to the manufacture of sound steel. Manganese comes from manganese oxide and silicate ores. Many minerals contain manganese, but only a few oxides, silicates, and, in some places, carbonates (rhodecrosite) are mined as ore. Types of manganese deposits are bedded, massive,

Jan 1, 1982

By Wilbur C. Helt

The United States is self-sufficient in bituminous coal and lignite resources to meet the high range of energy demands forecast for the remainder of this century and beyond. The known or proved recoverable reserves of energy from coal in the United States are estimated to be 88% of all fuel reserves, whereas the energy reserves for oil are estimated to be 276, gas 376, shale oil 5% and uranium 2% (as now used). The demand for all forms of energy used in the United States is increasing at a rate of 3% to 4% per year. Presently, coal is competitive on a supply and cost basis with other fuels in conversion to electrical energy and as a source of energy for converting raw minerals to metals and nonmetals, but it is not competitive in transportation and other uses that demand the high flexibility that oil and gas enjoy because of their form. Coal conversion to fluid forms is essential to make it interchangeable with gas and oil to meet the markets they now occupy. Essentially, the chemical constituents that make up coal are the same hydrocarbons that make up oil and gas; it is a matter of reconstituting the proportions of hydrocarbons to make coal interchangeable with the other fuels. The production of coal has fluctuated widely between the peak production of 631 million tons in 1947 to a low of 403 million tons in 1961. Throughout this period, the total value of the production, f.o.b. mines, has averaged more than $2 billion annually. Beginning with 1962, there has been a steady upward trend in coal production with only minor fluctuations that were mainly caused by labor disputes. Output for the latest typical year, 1970, was 588 million tons. Production in 1971 was affected by a major strike and dropped to 548 million tons. Exports of coal from United States to foreign countries have increased steadily and developed into a substantial annual market for over 71 million tons per year. About 56 million tons of this is suitable for metallurgical purposes, and the remaining 15 million tons is exported for electric power generation. The largest single-industry demand for coal is in the electric generating industry, Fig.1. Roughly, the production of electricity has doubled every

Jan 1, 1973

By E. T. Knight, John D. Gill

Much has been written and said concerning the alleged wasteful and uneconomic use of natural gas and petroleum. Espccially condemned has been the use of natural gas for the production of carbon black and the use of heavy fuel oil under steam boilers.' The critics of these usages of gas and oil have sought to make effective their verbal attacks on the industry by the repetitive expression of the words "inferior" and "superior" uses2 of petroleum. Thus, to employ natural gas for residential heating was to use it in a superior way; to use it for the production of carbon black was to use it in a wasteful and uneconomic way. To use petroleum for the production of automotive fuel was to use it in a superior way; to employ it as a residential fuel and as the prime source of power in an industrial plant was to use it in an inferior and uneconomic way. No doubt the objections to such employment of gaseous and liquid natural hydrocarbons originated in the belief that natural gas and petroleum are limited, nonregenerative mineral resources, and that the functions they perform can be just as well performed by other natural resources like coal13 of which practically unlimited reserves are known. The generations that have dominated each of the last four decades have counted reserves4 of petroleum in terms of a few years supply. Meanwhile, domestic demand for motor fuel rose spectacularly from a few million barrels in 1900 to more than 500,000,000 bbl. last year.5 The more imaginative and vocal critics drew startling word pictures of the catastrophe of 25,000,000 motor vehicles made useless and of the great automotive manufacturing and allied industries brought to an untimely end, and millions of workers left hopelessly unemployed by what they called the deplorably rapid depletion of the petroleum reserve. Many of the critics have been sincere advocates of the conservation of natural resources; many others, and in recent years probably the majority, have espoused the doctrine of conservation to promote their own self-interest rather than that of the public. The latest advocate of severe restriction in the use of petroleum for the alleged purpose of conserving the petroleum resource proposes to achieve that end by a bill,6 now before

Jan 1, 1938

By Robert Gillham, Victoria Yablonsky, Grover R. Castle

INTRODUCTION The commercial paper market, unique to the United States, is a direct exchange of funds between high-grade borrowers and large lenders; because it eliminates both the bank's role as middleman and also some significant transaction costs, commercial paper is the lowest cost short term instrument in the world. For this reason, virtually all borrowers would like to enter the market, but only issuers with the highest rating from Moody's and Standard & Poor can attract purchasers at the best rates. COMMERCIAL PAPER The commercial paper market, in existence for over 100 years, has traditionally been used for short-term financings, with most paper maturing within 30-45 days. Under the U. S. Securities Act of 1933, (section 3(a)3) industrial paper can avoid registration only if it matures within 270 days and is used for current transactions. It was first used to finance the short-term seasonal working capital needs of manufacturing companies. Since World War II, commercial paper use has grown steadily, serving in the 1950's as the market in which finance companies financed the explosion in consumer credit purchases of heavy consumer durables. LETTER OF CREDIT BACKING As far as is known, the use of letters of credit to support energy-related commercial paper began about 13 years ago with an arrangement to finance the nuclear fuel for Con Edison's Indian Point 3 Plant. Goldman, Sachs was the architect of this financing and Chemical Bank provided the letter of credit support. After an early burst of interest, this type of financing wobbled severely in the difficult credit markets of the mid-seventies before regaining serious momentum in 1976 and 1977. A mining project would not normally qualify as a borrower in the commercial paper market because of its credit standing and because its large capital needs require long term financing. However, lately, commercial paper has begun to take the place of a bank term loan in limited recourse project financings. L/C backed commercial paper took this new and startling turn in 1982 when it was used as part of the $700 million financing for the development of the Newlands-Collinsville coal mines of Mount Isa Mines Ltd. in Australia. This was the first use of L/C backed commercial paper in a long-term limited recourse project financing. First Boston acted as financial advisor and, again, Chemical Bank provided sole letter of credit support of $155 million. The $785 million BHP financing for the acquisition of the Queensland (Australia) coal assets of Utah International from General Electric Company followed the next year; there we acted with two other Front Banks to provide $270 million of L/C support. These two important transactions indicate that not only has commercial paper become an integral part of a long-term financing package, but also that it is no longer the exclusive domain of the best known U. S. companies. Lesser-rated companies and a multitude of foreign borrowers have gained access to this "exclusive club." How has this become possible? OPERATION OF AN L/C An instrument of the commercial banks, the "direct pay" letter of credit, has enabled lesser-rated companies to issue commercial paper in their own names. The letter of credit allows the issuer to substitute the credit rating of the supporting bank for its own. The L/C in effect allows a lesser-rated company to rent the bank's credit rating. This upgrading is possible because the bank is unconditionally obliged to pay the note-holders at maturity and then turn to the Issuer for reimbursement. The Issuer commonly "rolls over" a new short-term issue and reimburses the supporting bank from the sale of the new issue until cash flows from the project allow the borrower to reduce the level of paper outstanding. The commitment for an L/C facility, up to 12 years in the case of the Broken Hill transaction, governs the life of the commercial paper tranche of the financing. The term of the L/C commitment thus has the power to extend the ordinary 30-45

Jan 1, 1985

Jan 1, 1932

Jan 1, 1917

By H. K. Livingston

THE first person to investigate intensively the vast field of surface phenomena and capillary effects was the eminent English scientist, Lord Rayleigh (1842-1919), who laid down most of the fundamentals of this subject. This work was greatly amplified by Irving Langmuir,1 who, in connection with research for the General Electric Co., spent 25 years on the study of the surface chemistry of films, finally receiving the Nobel Prize in Chemistry for 1932 in recognition of his work. At present, William Harkins,2 of the University of Chicago, is the world's foremost authority on surface-tension measurement and his independent work, when combined with that of Langmuir, resulted in the orientation con-cept of solubility and surface activity, which is now an important funda-mental in chemistry. The theory laid down by these men was first applied to practical considerations regarding petroleum reservoirs by F. E. Bartell,3 of the University of Michigan, in connection with an American Petroleum Institute research grant. The latest and most advanced application of Bartell's work is contained in an article published in 1935 by Allen Garrison,4 of Rice Institute, in which he relates Bartell's measurements to the ratio of oil to water produced by wells and shows the types of petroleum reservoirs where the effects studied by Bartell are significant. This article is intended as a minor extension of such work.

Jan 1, 1938