COSTS OF PRODUCTION IN THE BARYTES, BARIUM CHEMICAL, AND LITHOPONE INDUSTRIES, 1919.

SUMMARY OF COSTS.

Representatives of the Tariff Commission held conferences in New York, Washington, and St. Louis with producers and manufacturers, who agreed to submit their costs of production to the Commission on their own cost forms. These cost reports, after tabulation and study, were verified by comparison with the books of the companies by members of the Commission's staff.

The averages of costs as shown in the tables presented are in all cases weighted averages, based on the actual production of the companies reporting. In no case has a simple average been used in presenting costs. For example, the average cost of lithopone for 1919 has been obtained by dividing the sum of the total cost of all companies by the aggregate production of all companies. This method obviously gives more weight in the average to the costs of a company with a large production than to the costs of a company with a small production. It is believed that the weighted average costs, as given, are representative of conditions in the industries as a whole.

The cost of mining crude barytes in western mines increased from $5.30 per short ton in 1916 to $7.74 in 1919, while the increase in southern mines was from $3.89 to $7.39 per short ton. This corresponds to an increase of 90 per cent for southern mines and 46 per cent for western mines. The cost of manufacturing ground barytes was $11.21 per short ton in 1914; $12.69 in 1916; and $19.25 in 1919, an increase of about 70 per cent from 1914 to 1919. The cost of producing barium chemicals during 1919 was $0.0294 per pound for blanc fixe; $0.0316 per pound for barium carbonate; $0.0539 per pound for barium chloride, and $0.197 per pound for barium peroxide. The average cost of manufacturing lithopone during 1919, as reported by 11 plants, was $0.0602 per pound. Of this total cost 43 per cent was due to material; 18 per cent to labor; 34 per cent to overhead; and 5 per cent to sales expense. The apparent profit of the industry was $0.0065 per pound of lithopone produced. The rela

tion of crude barytes to the lithopone industry is shown by the fact that about 14 per cent of the total factory cost of lithopone was due to barytes. Zinc is the most expensive material entering into lithopone and amounted to about 22 per cent of the total factory cost. The average factory cost was $0.0571 per pound of lithopone.

COST OF MINING BARYTES, 1916 AND 1919.

INTRODUCTORY.

The costs of mining barytes during 1916 and 1919, as presented in the following pages, are separated for western and southern mines because of the different methods of mining used. (See p. 24.) In western mines the methods of keeping costs are as a rule inadequate, except in the case of the larger firms. The information submitted by smaller operators has been accepted, although in some cases accurate records were not available for purposes of complete verification. In such instances, however, the costs submitted agreed closely with those of larger operators, whose costs were checked to their books, and therefore they have been included in the following tables. The cost records of southern mines were found to be in better condition than those of western mines. A large part of the mining in the southern district is done by large consumers of crude barytes, who keep accurate records. There was, however, very little uniformity in the detail of costs submitted by the various companies.

The outstanding difference in costs as reported by companies in both mining districts was in the charge for amortization of investment due to depletion of ore body and in royalties paid owners of the property for mining privileges. In many cases no charge was reported. As it would be manifestly unfair to include a charge for amortization in one case and not in another, a total cost based on a uniform charge for amortization and royalties for all companies has been shown in the tables of costs of mining barytes. It has seemed feasible to use uniformly the weighted average of the charges reported. In a few cases where charges reported as amortization appeared excessive on account of being based on a short period, they were not used in arriving at the uniform charge.

The costs as given for barytes in all cases are the costs on board cars for shipment. This seemed a more desirable basis for comparison between districts, because this cost plus freight rates gives the cost of crude barytes delivered at any point in the United States. The costs, therefore, as given include hauling, weighing, and loading in the case of the western mines and switching or hauling charges in the case of the southern mines.

COMPARISON OF COSTS IN WESTERN AND SOUTHERN MINES.

TABLE 28.-Comparison of total cost of mining barytes in western and southern mines during 1916 and 1919.

Table 28, which compares the costs in the western and southern mines, shows that the cost of production during 1916 and 1919 was lower in the southern than in the western mines. In 1916 the difference in the costs "as reported" (columns 2 and 4) was $1.41 per short ton. On a basis of uniform amortization and royalties (columns 3 and 5) the difference was even greater and amounted to $2.07 per short ton. This is due to the fact that in only a few cases did western mines report a charge for amortization or royalties. In 1919 the difference in costs between the two districts was considerably less. The costs "as reported" in 1919 showed a difference of $0.35 per short ton, and on the basis of "uniform amortization and royalties" a difference of $1.66 per short ton in favor of the southern mines.

Table 28 also shows that the increase in the cost of producing barytes from 1916 to 1919 "as reported" was much greater in case of the southern mines than the western mines. The total average cost in southern mines increased from $3.89 per short ton in 1916 to $7.39 in 1919, or an increase of 90 per cent. The average cost in the western mines increased from $5.30 per ton in 1916 to $7.74 per ton in 1919, or an increase of about 46 per cent. On a basis of "uniform amortization and royalties" the costs in western mines increased about 33 per cent and in southern mines by about 62 per cent during this period.

A study of costs in western and southern mines reveals a considerable difference in labor charge per ton of barytes. This is to be expected from the methods used in the two districts. The western deposits are worked by pick and shovel and require more labor, while the southern deposits are mined by steam shovels. In 1916 the cost of labor in western mines was $2.37 per ton as compared with $1.62 per ton for southern mines, or a difference of $0.75 per ton.

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In 1919 the charge for labor in western mines was $4.38 as against $2.82 in southern mines, or a difference of $1.56 per ton. The labor per ton of ore in western mines increased about 85 per cent from 1916 to 1919, while in southern mines there was an increase of 74 per cent. The difference in labor per ton of ore mined in favor of southern mines is in part offset by larger overhead charges, due to necessary investment in mining equipment.

COSTS IN WESTERN MINES.

The methods of mining and conditions in the western fields are unique. Practically all of the mining is done by individuals on a tonnage basis. Each miner is paid a certain rate per ton of ore mined. Other charges are on the same basis. The prices paid for ore delivered at the loading platform at the shipping point are fairly uniform. The price paid for hauling to the shipping point varies with the distance. The miner receives the difference. In other words, the net price received per ton of ore by miners located close to the railroad is greater than that received by miners some distance from the railroad. This condition results in most of the mining being done close to the railroad. A large part of the mining is on property owned by consumers of crude barytes. These companies permit miners to work the property, and they usually furnish the miners with housing free of charge as an inducement to keep them on the property.

TABLE 29.-Cost of mining barytes in western mines during 1916, by companies. [Per short ton.]

1 Uniform charge for amortization and royalties used in arriving at total cost in column 3.

Table 29 shows the cost of mining barytes by western mines during 1916 by companies. The total weighted average cost "as reported" of $5.30 per ton is made up of the following charges: $2.37