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s 

14.GS: 
CIR141 
c.  1 


John  a;  Harrison 


STATE  OF  ILLINOIS 

DWIGHT  H.  GREEN,  Governor 

DEPARTMENT  OF  REGISTRATION  AND  EDUCATION 

FRANK  G.  THOMPSON,  Director 


ILLINOIS  GEOLOGICAL 
SURVEY  LIBRARY 


DIVISION  OF  THE 

STATE  GEOLOGICAL   SURVEY 

M.  M.  LEIGHTON,  Chief 
URBANA 


CIRCULAR  NO.  141 


LONG-TERM  MANUFACTURING  OPPORTUNITIES 
IN  THE  UPPER  MISSISSIPPI  VALLEY 

By 
WALTER  H.  VOSKUIL 


Reprint  of  Special  Bulletin  Number  Six 

University  of  Illinois 

College  of  Commerce  and  Business  Administration 

Bureau  of  Economic  and  Business  Research 


PRINTED  BY  AUTHORITY  OF  THE  STATE  OF  ILLINOIS 


URBANA,  ILLINOIS 
1948 


STATE  OF   ILLINOIS 

D WIGHT   H.   GREEN,  Governor 

DEPARTMENT  OF   REGISTRATION  AND  EDUCATION 

FRANK   G.  THOMPSON.  Director 

DIVISION   OF  THE 

STATE   GEOLOGICAL   SURVEY 

M.  M.  LEIGHTON.  Chief 
URBANA 


CIRCULAR  NO.  1 


LONG-TERM  MANUFACTURING  OPPORTUNITIES 
IN  THE  UPPER  MISSISSIPPI  VALLEY 

By 
WALTER  H.  VOSKUIL 

Reprint  of  Special  Bulletin  Number  Six 

University  of  Illinois 

College  of  Commerce  and  Business  Administration 

Bureau  of  Economic  and  Business  Research 


PRINTED  BY  AUTHORITY   OF  THE  STATE  OF  ILLINOIS 


URBANA,  ILLINOIS 
1948 


TABLE  OF  CONTENTS 

PAGE 

Introduction 7 

Basic  Industrial  Materials  in  the  Upper  Mississippi 

Valley       9 

Basic  Industries  in  the  Chicago  Industrial  Area  ...  12 

Steel 13 

Coke  and  Coal 20 

Liquid  Fuels  in  the  Economy  of  the  Upper  Mississippi 

Valley 22 

Food  Supply 26 

Summary 29 

Appendix 30 


Digitized  by  the  Internet  Archive 

in  2012  with  funding  from 

University  of  Illinois  Urbana-Champaign 


http://archive.org/details/longtermmanufact141vosk 


INTRODUCTION 


A  major  concern  in  the  foreseeable  future  is  the 
creation  and  maintenance  of  productive  employ- 
ment. This  is  an  inseparable  part  of  our  modern 
industrial  economy  and  not  a  special  problem  limited 
to  a  temporary  postwar  transitional  period,  even 
though  that  period  may  present  the  problem  in  un- 
usually acute  form. 

With  the  necessity  for  employment  and  for  busi- 
ness opportunity  goes  also  the  laudable  desire  for 
profits  and  good  wages.  These  two  can  come  only 
from  high  production  (a  large  volume  of  output) 
and  high  productivity  (a  high  output  per  worker). 
A  high  output  per  worker  means  a  large  share  of 
goods  for  each ;  and  this,  after  all,  makes  for  a  high 
standard  of  living. 

Manufacturing,  transportation  and  communica- 
tion, marketing  and  merchandising,  construction, 
power  supply,  and  the  service  industries  today 
afford  the  largest  opportunities  for  the  creation  of 
productive  employment. 

Productive  employment  is  something  more  than 
activity  for  a  wage;  it  involves  the  creation  of 
values.  The  goal  of  productive  employment  is  to 
achieve  a  high  level  of  output,  through  intelligently 
directed  coordination  of  men,  machines,  and  mate- 
rials. Only  then  is  it  possible  to  have  a  high  stand- 
ard of  living,  a  high  purchasing  power  in  the 
community,  and  a  sound  basis  for  employment 
opportunity. 

Modern  technology,  which  pervades  the  entire 
gamut  of  our  productive  economy,  is  actually  re- 
stricting the  employment  opportunities  in  agricul- 
ture and  mining.  Mechanization  has  so  changed 
American  agriculture  that  between  1915  and  1945 
the  tractor,  the  truck,  and  the  automobile  eliminated 
the  need  for  the  labor  of  thousands  of  men.  Since 


1900  the  productivity  of  the  adult  farmer  has  risen 
from  an  index  of  100  to  154.  In  such  important 
segments  of  the  mineral  industry  as  coal  mining, 
the  output  of  the  workers  has  nearly  doubled  since 
the  turn  of  the  century.  The  natural  increase  in 
farm  and  mine  population  must,  in  order  to  seek 
lucrative  employment,  turn  elsewhere  for  oppor- 
tunities. The  high  productive  possibilities  of  modern 
technology,  if  fully  utilized  and  intelligently  directed 
to  meet  human  wants  and  desires,  will  find  their 
greatest  productive  outlet  in  the  manufacture  of 
consumer  goods,  directly  or  indirectly.  Accompany- 
ing this  trend  will  be  a  corresponding  increase  in 
trade,  transportation,  and  services,  with  increasing 
employment  opportunities  in  these  activities. 

Role  of  the  Basic  Industries 

The  productivity  of  manufacturing,  both  as  a  way 
of  making  a  living  and  as  a  means  of  providing 
each  of  us  with  the  multiplicity  of  necessities,  con- 
veniences, and  luxuries  which  we  enjoy,  depends 
upon  suitable  industrial  materials,  the  application  of 
power,  and  the  presence  of  technological  skills. 
Given  these  three  factors,  we  have  the  means  not 
only  to  high  productivity  but  also  to  an  abundant 
variety  and  a  wealth  of  selection  in  consumer  goods. 

Basic  industrial  materials  from  which  an  array  of 
manufacturing  activities  branch  out  are:  (1)  steel; 
(2)  manufactured  fuels  — oil  products;  (3)  manu- 
factured fuels  —  coke;  (4)  food  grains;  (5)  meat 
products;  (6)  fibers;  and  (7)  forest  products. 

Sustained  productivity  in  all  phases  of  manufac- 
turing activity,  and  in  all  steps  of  the  manufacturing 
process,  is  based  upon  the  continued  functioning  of 
those  industries  which  supply  the  basic  industrial 
raw  materials. 


BASIC  INDUSTRIAL  MATERIALS  IN  THE  UPPER 
MISSISSIPPI  VALLEY 


The  raw  materials  of  industrialism  upon  which  the 
diverse  and  extended  manufacturing  activities  of 
the  Upper  Mississippi  Valley  depend  are  produced 
in  one  or  a  few  localities  within  the  region  and 
supplemented  to  some  extent  by  shipments  of  these 
basic  materials  into  the  area.  The  Chicago  district 
is  almost  solely  the  source  of  pig  iron  and  steel, 
although  a  small  contribution  comes  from  Granite 
City.  Petroleum  products  are  produced,  in  the  main, 
in  three  districts  —  Chicago,  Wood  River  (below 
Alton),  and  southeastern  Illinois.  Food  products, 
such  as  meat  and  flour,  are  available  at  convenient 
points  in  the  area. 

The  Chicago  industrial  area  is  a  leader,  or  at 
least  a  producer,  in  five  of  the  basic  industries: 
steel,  oil  products,  coke,  meat  products,  and  flour. 
This  industrial  district  is  unique  in  the  Upper  Mis- 
sissippi Valley  in  that  it  is  the  focus  of  industries 
that  manufacture  industrial  raw  materials  and 
producers'  goods.  These  industries,  in  turn,  make 
many  of  the  producers'  goods  for  manufacturing 
establishments  not   only   in   Chicago   itself  but  in 


Map  1.   Industrial  Areas  in  the  Upper  Mississippi 
Valley  with  2,500  or  More  Wage  Earners,  1939 


Map  2.    Income  Received  in  the  Upper  Mississippi 

Valley,  1939,  Distributed  by  Counties 

(in  thousands) 


other  manufacturing  cities  in  the  Upper  Missis- 
sippi Valley. 

Because  of  this  industrial  interdependence  of  the 
entire  Upper  Mississippi  Valley,  and  also  because 
of  Chicago's  key  position  as  the  site  of  the  basic 
industries  which  serve  as  gateways  to  more  than 
230  types  of  industries  in  the  Upper  Mississippi 
Valley,  the  starting  point  of  any  study  of  the  indus- 
trial possibilities  and  future  of  Chicago  and  its 
associated  manufacturing  cities  in  the  Upper  Mis- 
sissippi Valley  is  an  examination  of  the  basic  in- 
dustries, for  the  purpose  of  determining  the  status 
of  those  elements  that  are  necessary  for  their 
assured  continuity. 

Specifically,  these  basic  industries  should  be  ex- 
amined as  parts  of  the  structure  of  the  Chicago 
industrial  district.  Also  a  study  should  be  made  of 
the  growth  and  changes  within  the  district,  the  raw 
materials  used  by  the  basic  industries  of  the  district 


10 


University  of  Illinois 


and  the  adequacy  of  their  supply,  the  changing  in- 
ternal structure  of  the  Chicago  district  as  it  has  been 
affected  by  the  rise  or  decline  in  importance  among 
the  basic  industries,  the  trends  in  concentration  or 
decentralization,  and  the  rise  of  new  products  or 
changes  in  the  older  established  industries. 

Such  an  examination,  however,  is  of  value  only 
as  a  means  to  an  end.  What  we  are  really  trying  to 
determine  is  the  key  role  of  the  basic  industries  in 
the  creation  of  industries  for  the  manufacture  of 
consumer  goods.  If  we  understand  the  function  of 
the  Chicago  basic  industries,  we  are  then  prepared 
to  plan  against  future  eventualities,  e.g.,  provide 
for  alternative  sources  of  raw  materials  if  it  seems 
that  existing  sources  may  cease  to  be  adequate,  and 
promote  new  industries  that  are  feasible  in  this 
economic  area. 

The  industrial  empire  for  which  Chicago's  basic 
industries  supply  the  raw  materials  of  manufacture 
extends  over  nine  states  or  parts  of  states.  This  is 
illustrated  in  Map  1,  which  shows  the  Census  distri- 
bution of  leading  industrial  areas  in  the  Upper  Mis- 
sissippi Valley  in  1939.  This  distribution  represents 
the  pattern  of  industrial  development,  the  resultant 
of  various  and  varying  economic  forces  during  a 


period  of  vigorous  industrial  growth.  The  war  years 
subsequent  to  1939  did  increase  the  level  of  out- 
put of  industrial  production  but  did  not  change 
the  pattern  substantially.  A  wide  variety  of  enter- 
prises is  located  in  these  several  districts,  to  which 
the  basic  industries  of  Chicago  supply  such  mate- 
rials as  foundry  coke,  pig  iron,  primary  steel  shapes, 
steel  wire,  prepared  liquid  fuels,  etc.  About  75  per 
cent  of  the  wage  earners  in  manufacturing  in  this 
economic  region  are  outside  the  Chicago  industrial 
district. 

Manufacturing  Opportunity  and 
Purchasing  Power 

The  opportunity  for  manufacturing  outlets  depends 
ultimately  on  purchasing  power,  and  purchasing 
power  is  estimated  by  multiplying  the  number  of 
people  earning  incomes  by  the  average  level  of  in- 
dividual income. 

In  the  prewar  year  of  1939,  purchasing  power 
among  principal  income  groups  in  Illinois  and  the 
adjacent  economic  territory  was  nearly  20  per  cent 
of  the  national  total.  This  income  was  concentrated 
in  a  relatively  small  area. 


I     IE 


I  $1,275  AND  OVER 

150  TO  $1,274 

3  $850  TO  $1,149 

JNDER   $850 

NITED   STATES    $  I,  200 


-J 1 


Map.  3.  Per  Capita  Income  of  the  Civilian  Population,  by  States,  1946 


Long-term  Manufacturing  Opportunities  in  the  Upper  Mississippi  Valley 


Map  4.  Percentage  Increase  in  Total  Income  Payments,  by  States,  1940-1946 


Map  2  shows  the  county  distribution,  for  the 
Upper  Mississippi  Valley,  of  combined  incomes 
derived  from  selected  types  of  payment:  (a)  wages 
and  salaries  in  manufacturing;  (b)  wages  and  sal- 
aries in  wholesale  trade;  (c)  wages  and  salaries  in 
retail  trade;  (d)  wages  and  salaries  in  mining;  and 
(e)  farm  income. 

Although  these  items  do  not  represent  all  income 
payments  within  the  area,  they  do  account  for  ap- 
proximately 80  per  cent  of  the  income,  and  hence 
provide  a  reasonably  good  index  of  purchasing 
power. 

It  is  evident  from  the  map  that,  aside  from  the 
large  income  payments  in  the  urban  centers,  there  is 
a  belt  of  remarkably  high  purchasing  power  in  rural 
Illinois,  Indiana,  southern  Wisconsin,  southern  Min- 
nesota, Iowa,  and  portions  of  Missouri.  This  pro- 
ductive urban-rural  area,  of  which  purchasing 
power  is  one  measure,  is  the  potential  local  market 
for  industrial  consumer  goods. 

The  favorable  economic  position  of  Illinois  in  the 


economy  of  the  nation  is  shown  in  two  maps  re- 
produced from  the  Survey  of  Current  Business,  for 
August,  1947.  Map  3  shows  per  capita  income  pay- 
ments in  1946  for  each  state,  including  mustering- 
out  payments,  family-allowance  payments,  allot- 
ments of  pay  to  individuals  by  military  personnel, 
cash  terminal  leave  payments,  and  state  govern- 
ment bonuses  to  veterans  of  World  War  II.  Map 
4  shows  for  each  state  the  percentage  increase 
in  total  income  payments  from  1940  to  1946.  An 
examination  of  these  two  maps  shows  that  the 
higher  percentage  changes  in  the  southeastern  and 
southwestern  states  in  the  period  1940-1946  did  not 
overcome  the  leading  economic  position  of  the 
Upper  Mississippi  Valley  states.  When  the  dis- 
torted production  pattern  brought  on  by  the  war 
has  come  to  an  end  and  a  peacetime  economy  again 
functions,  the  level  of  income  payments  in  Illinois 
and  its  neighboring  states  will  be  sustained  more 
easily  than  in  those  states  and  areas  which  were 
heavily  stimulated  by  war  requirements. 


BASIC  INDUSTRIES  IN  THE  CHICAGO 
INDUSTRIAL  AREA 


The  Chicago  industrial  area1  comprises  Cook,  Du 
Page,  Kane,  Lake,  and  Will  counties  in  Illinois,  and 
Lake  County  in  Indiana.  Within  this  area  there  is 
a  wide  variety  of  industries  and  a  considerable  de- 
gree of  segregation  of  industrial  groups.  Table  I 
presents  data  for  the  principal  basic  industries. 

In  Chicago  itself  there  are  large  meat-packing 
establishments.  Toward  the  south  and  east,  along 
the  lake  shore  in  Illinois  and  Indiana,  are  the  heavy 
steel  industries.  In  the  western  and  southwestern 
part  of  the  area  are  steel  fabricating  industries, 
machinery,  light  industries,  etc.  About  one-fifth  of 
Chicago's  manufacturing  activity  is  concerned  with 
the  production  of  raw  materials  for  further  proces- 
sing, fuels,  and  basic  food  supplies.  Historical  de- 

1  The  term  "industrial  area,"  as  used  by  the  Census,  sig- 
nifies an  area  having  as  its  nucleus  an  important  manufac- 
turing city  and  comprising  the  county  in  which  the  city  is 
located,  together  with  any  adjoining  county  or  counties  in 
which  there  is  a  great  development  of  manufacturing 
industries. 


velopment,  as  well  as  geographic  factors,  accounts 
for  the  present-day  distribution  of  industry  within 
the  area. 

More  than  half  of  the  manufacturing  activity  of 
the  United  States  is  concentrated  in  97  counties, 
which  have  been  grouped  by  the  Bureau  of  the 
Census  into  33  industrial  areas.  An  area  is  defined 
as  having  had  not  less  than  40,000  factory  workers 
when  these  groupings  were  first  established  in  1929. 
Among  these  industrial  areas,  Chicago  is  exceeded 
only  by  New  York  and  has  held  second  place  since 
1899,  when  it  displaced  Philadelphia.  In  Map  5  are 
shown  the  industrial  areas  located  in  northern  and 
eastern  United  States  and  the  comparative  trend  of 
growth  since  1899.  Although  the  position  of  New 
York  and  Chicago  in  first  and  second  place  re- 
mained unchanged,  among  the  remaining  28  indus- 
trial districts  there  has  been  a  relative  gain  in 
position,  principally  in  those  districts  bordering  the 
Great  Lakes. 


/n 


'""2>v 

n  9      #;Youngstown         A|ientog>  rV"       y0RK  clTY 

(I     O  Pittsburgh              OReodrng-JNEW 
^.wheeling  <W.»od.«pM. 

■ y£ 4---^ 


Map  5.  Change  in  Rank  of  Industrial  Areas  East  of  the  Rocky  Mountains,  1900-1939 


Long-term  Manufacturing  Opportunities  in  the  Upper  Mississippi  Valley 


13 


Table  I 

Basic  Industries  in  the  Chicago  Area,  1939 

(Thousands  of  dollars) 


Type  of  Industry 

Salaries 

and 
Wages 

Value  of 
Product 

Value 
Added  by 
Manufac- 
ture 

All  industries 

Iron  and  steeK . 
Meat  packing. . . 

Oven  coke 

Petroleum  re- 
fining  

Flour  mills 

Total — Basic  in- 
dustries  

Percentage — basic 
industries  to 
all  industries.. 

5784,145 

117,157 
33,771 
5,516 

16,408 
661 

54,277,816 

569,859 
389,983 
56,360 

219,884 
11,178 

51,909,989 

212,567 
68,288 
10,157 

59,184 
2,814 

5173,513 
22.1 

51,247,264 
29.2 

5353,010 
18.5 

Source:   Census  of  Manufactures,  1939. 
a  Includes  products  of  blast  furnaces,  steelworks  and  roll- 
ing mills,  and  steel  castings. 


The  relative  position  of  each  of  the  33  industrial 
districts,  as  measured  by  the  dollar  value  of  prod- 
ucts manufactured  therein,  is  shown  in  Chart  1. 

Steel 

In  the  analysis  of  basic  industries,  steel  is  given 
first  place.  It  occupies  a  key  position  in  our  indus- 


trial economy,  and  in  the  production  process  it 
performs  a  three- fold  function.  First,  steel  is  the 
primary  material  which  has  made  possible  the  cre- 
ation of  modern  industrial  productivity.  Second, 
steel  provides  the  raw  materials  for  a  wide  variety 
of  industries  engaged  in  the  manufacture  of  con- 
sumer goods  and  also  of  machines  which  are  used 
in  the  manufacture  of  still  other  types.  Third,  steel 
creates  the  opportunity  for  the  growth  of  other 
industries  that  contribute  to  the  final  production  of 
goods  made  possible  in  a  steel-based  economy,  as  for 
example,  non-ferrous  metal  industries,  cement, 
chemicals,  etc.  Therefore,  a  steel  center  is  and  will 
remain  the  most  favorable  basis  of  a  diversified 
industry. 

Basis  of  High  Productivity.  High  productivity 
is  a  relative  term,  but  to  the  layman  it  means  either 
more  goods  or  better  goods.  High  productivity 
means  an  abundance  of  food  produced,  more  yards 
of  cloth,  more  pairs  of  shoes,  more  tons  of  coal 
mined,  more  barrels  of  oil  produced,  more  miles  of 
transportation  for  the  same  cost  in  exchange  for  a 
day's  work,  more  time  for  leisure  after  material 
wants  have  been  comfortably  satisfied.  When  man, 
the  producer,  raises  the  level  of  his  output,  in  these 
and  thousands  of  other  commodities,  there  are  more 
goods  to  be  consumed,  there  are  more  goods  for 


the  United  States,  by  Value  of  Product  in  Billions  of  Dollars,  1939 


University  of  Illinois 


each  person,  and  the  standard  of  living  goes  up 
accordingly. 

Steel  plays  a  key  role  in  achieving  high  productiv- 
ity. Iron  ore  is  abundant,  and  steel  can  be  made 
from  it  at  a  low  cost.  In  its  alloyed  forms,  steel  is 
a  versatile  metal:  it  can  be  made  brittle  or  tough, 
hard  or  soft,  pliable  or  elastic,  to  suit  the  needs  of 
the  user.  It  is  the  stuff  used  to  make  the  machine 
tools  that  shape  and  build  our  mechanized  plants, 
and  also  to  construct  the  power-driven  machines 
that,  under  man's  skillful  direction,  pour  out  the 
goods.  The  broad  requirements  of  modern  industrial 
society,  with  its  vast  tonnage  movements,  its  ma- 
chines capable  of  rapid  output,  and  its  high-speed 
transportation,  can  be  met  only  by  iron  in  combina- 
tion with  its  alloying  materials.  Let  it  be  emphasized 
that  all  other  industrial  materials,  new  and  old,  in 
large  quantities  or  small,  play  a  role,  and  a  neces- 
sary one,  as  helpers  of  steel  in  the  productive 
process.  Our  industrial  society  is  indissolubly  re- 
lated to  steel. 

Springboard  for  Industrial  Opportunity.  A 
steel  industry  is  the  nucleus  for  a  wide  variety  of 
industries  in  a  relatively  small  area,  and  this  situa- 
tion results  in  large  aggregate  wage  payments  and 
other  forms  of  income.  The  purchasing  power  thus 
derived  in  turn  favors  the  development  of  new 
industries. 

The  industries  that  naturally  group  around  steel 
are: 

1.  Non-ferrous  metal  and  other  industries  which  nec- 
essarily supplement  steel  in  the  manufacture  of  goods, 
such  as  copper,  lead,  zinc,  aluminum,  etc. 

2.  Industries  that  come  into  being  in  connection  with 
the  steel  industry,  as  a  part  of  industrial  production, 
such  as  structural  materials  for  industrial  plants  — 
cement  and  concrete,  quarry  products,  refractories, 
fluxes. 

3.  Industries  which  are  located  in  concentrated  popu- 
lation areas  either  by  reason  of  a  favorable  market  or 
because  of  better  access  to  labor  supply.  This  would 
include  a  wide  variety  of  purely  local  industries  such 
as  bakery  products,  chemicals,  apparel,  printing  and 
publishing,  wholesale  trade,  and  banking  and  finance. 
The  forces  that  establish  a  population  center  tend  to 
gain  in  strength  and  to  bring  about  further  concentra- 
tion. This  movement  is  borne  out  by  the  population 
trends  up  to  the  outbreak  of  the  war  and  will,  no  doubt, 
be  resumed  in  the  postwar  period. 

Chicago  is  one  of  the  great  steel-producing  dis- 
tricts of  the  United  States  and  of  the  world.  This 
district  provides  the  raw  material  and  serves  a  wide 
array  of  metal-working  industries  in  Chicago  and 
throughout  the  smaller  industrial  cities  of  Illinois, 
Wisconsin,  Indiana,  Minnesota,  western  Kentucky, 
Michigan,  Iowa,  Missouri,  Kansas,  Nebraska,  and 


the  Dakotas.  The  continued  productivity  of  the  in- 
dustries in  this  large  area  is  no  more  assured  than 
the  permanence  of  the  steel  basis  upon  which  they 
are  built. 

The  steel-making  process  involves  the  assembling 
of  large  tonnages  of  ore,  coking  coal,  and  fluxing 
stone.  These  raw  materials  must  be  available  in 
large  quantities  to  assure  a  supply  for  decades  to 
come. 

The  magnitude  of  operations  in  steel  production 
requires  also,  for  economical  output,  a  large  market 
outlet.  The  survival  power  of  a  steel  district  is, 
therefore,  a  function  of  adequate  resources  and 
ability  to  maintain  its  position  in  its  market  area 
against  the  encroachments  of  rival  districts. 

Geography  of  Steel  Districts.  The  most  eco- 
nomical source  of  steel  is  that  location  at  which  the 
raw  materials  can  be  assembled,  the  steel  produced, 
and  delivery  made  to  a  large  market,  all  at  the  low- 
est possible  total  cost.  In  determining  plant  location, 
assembly  costs  are  most  important ;  more  than  four 
tons  of  raw  material  must  be  assembled  for  every 
ton  of  steel  produced. 

The  greater  proportion  of  the  raw  materials  is 
used  in  the  blast  furnace,  but  integrated  steel  works2 
have  developed  from  blast  furnace  plants  because: 
(a)  as  steel  approaches  the  finished  stage,  the  cost 
of  shipment  becomes  a  smaller  percentage  of  the 
cost  of  the  product  to  the  buyer;  (b)  integration 
assures  more  constant  and  reasonably  full  utilization 
of  blast  furnaces  and  open  hearths;  and  (c)  the 
economics  of  converting  molten  iron  into  steel  and 
other  heat  conservation  factors  are  important  in  the 
economical  production  of  steel. 

In  an  integrated  steel  industry,  economies  are 
achieved  both  in  saving  of  heat  and  in  effective  use 
of  surplus  gas.  For  example,  pig  iron  is  conveyed 
from  the  blast  furnace  to  the  steel  plant  in  the 
molten  state,  thereby  conserving  the  heat  in  the 
molten  metal.  Surplus  gas  from  coke  ovens  is  used 
for  operating  air  compressors  and  for  heating  the 
stoves  of  the  blast  furnace.  Coke-oven  gas  also  sup- 
plies the  fuel  for  the  open-hearth  steel  furnace  and 
for  heating  the  soaking  pits. 

Limitations  imposed  by  the  necessity  for  the  most 
favorable  combination  of  assembly,  production,  and 
delivery  costs  have  confined  steel  production  to  a 
few  geographical  areas.  The  most  favorable  com- 
bination of  the  three  variables  is  to  be  found  at 
ports  on  Lake  Michigan  and  Lake  Erie  and  in  the 
Pittsburgh    district,    including    the    Mahoning   and 

2  An  industry  is  integrated  when  all  steps  in  the  process 
from  mining  to  production  of  finished  steel  are  under  a 
single  over-all  management. 


Long-term  Manufacturing  Opportunities  in  the  Upper  Mississippi  Valley 


15 


Table  II 

Estimated  Assembly  Costs  in  the  Production  of 

Pig  Iron,  Summer  of  1937 

(In  dollars  per  gross  ton) 


Producing  Center" 

Iron 
Ore 

Coal 

Flux 

Total 
Cost 

Weirton-Steubenville. . 

#5.508 
5.804 
3.497 
3.497 

3.497 
5.193 
3.487 

#0.468 
0.284 
2.714 
2.909 
3.249 
1.979 
3.867 

#0.337 
0.337 
0.241 
0.241 
0.086 
0.170 
0.241 

#6.313 
6.425 

6.452 

6.647 

6.832 

7.342 

7.595 

Ohio  valleys.  These  locations  were  primarily  deter- 
mined by  the  assembly  costs  of  Lake  Superior  ores 
and  the  coking  coals  of  West  Virginia,  western 
Pennsylvania,  and  eastern  Kentucky. 

Comparative  assembly  costs  of  raw  materials  at 
principal  production  centers  in  this  area  have  been 
estimated  as  shown  in  Table  II. 

The  relationship  of  assembly  costs  among  these 
several  districts,  as  it  existed  before  the  war,  is 
not  necessarily  constant.  Greatest  changes  have 
probably  occurred  in  those  districts  to  which  a  rail 


haul  of  materials  is  required,  since  there  have  been 
advances  in  freight  rates  granted  to  railroads.  If  this 
is  the  case,  the  most  pronounced  changes  in  as- 
sembly costs  would  occur  in  ore  movements  to 
Weirton-Steubenville,  Pittsburgh,  and  Youngstown, 
and  in  coal  movements  to  Cleveland,  Buffalo,  De- 
troit, and  Chicago.  It  is  noteworthy  that  costs  of 
shipping  coal  to  Chicago  exceed  costs  of  transporta- 
tion to  any  other  district.  At  present,  all  but  a 
negligible  quantity  of  coking  coal  used  in  the  Chi- 
cago steel  industry  is  obtained  from  the  Appalachian 
fields,  principally  eastern  Kentucky  and  southern 
West  Virginia. 

Steps  in  Steelmaking.  The  production  of  steel 
begins  at  the  blast  furnace,  where  iron  ore  and  other 
materials  are  smelted  to  emerge  as  pig  iron  and 
slag.  This  is  the  first  major  step  and  the  first  inter- 
mediate product  in  a  long  series  of  operations  end- 
ing in  finished  steel  goods.  Pig  iron  is  converted  into 
steel  by  the  removal  of  impurities  and  the  addition 
of  controlled  quantities  of  carbon  and  scrap  and 
alloying  materials,  in  Bessemer  or  open-hearth 
furnaces. 

The  approximate  amounts  of  principal  raw  ma- 
terials required  per  ton  of  pig  iron  are:  4,075 
pounds  of  iron  ore   (assuming  ore  of  reasonably 


COKE    OVENS 


STEEL    FURNACES 


ROLLING    MILLS 


Chart  2.  Flow  Chart  of  Steelmaking,  1943 


16 


University  of  Illinois 


high  metallic  content,  50  per  cent  or  more),  2,700 
pounds  of  coking  coal,  and  900  pounds  of  limestone. 
Another  1,500  pounds  of  coal  may  be  consumed  for 
power  and  heating  before  a  ton  of  finished  steel 
product  has  left  the  mills. 

The  flow  of  materials  through  successive  stages 
of  production  to  finished  rolled  steel  products  is 
illustrated  in  Chart  2,  which  is  based  on  Department 
of  Commerce  data  and  shows  the  materials  used  and 
the  disposition  of  the  products  in  a  war  year.  In 
addition  to  depicting  the  various  raw  materials  used 
in  the  production  of  pig  iron,  the  diagram  indicates 
the  output  of  by-products,  the  importance  of  scrap 
in  the  manufacture  of  steel,  the  more  important 
rolling-mill  products,  and  the  major  consuming  in- 
dustries. The  large  proportion  of  the  products  which 
went  to  shipbuilding  is  explained  by  the  fact  that 
1943  was  a  war  year. 

The  grouping  of  by-product  coke  ovens,  blast 
furnaces,  and  steel  mills  into  an  integrated  produc- 
tive unit  affects  the  economics  of  the  manufacture 
of  steel.  The  by-product  gases  of  the  coke  oven  and 
blast  furnaces  and  the  by-product  heat  in  molten 
pig  iron  can  be  used  effectively  in  the  process  of 
steel  manufacture. 

The  making  of  steel  through  the  several  steps  in 
the  process  is  shown  in  Chart  3. 

Raw  Materials  for  the  Chicago  Steel  Industry. 
Among  the  materials  needed  to  sustain  a  large  steel- 
producing  industry  in  the  foreseeable  future  is  an 
adequate  supply  of  iron  ore  and  scrap  metal.  There 
are  many  deposits  of  iron-bearing  ores  available  in 
this  country  and  abroad  —  ores  of  high  or  low  iron 
content,  in  large  and  small  deposits,  on  the  surface 
and  deep-seated  in  the  earth. 

The  American  steel  industry  is  built  mainly  upon 
the  Lake  Superior  ore  district,  and  the  Chicago 
steel  industry  relies  solely  upon  this  district  for  its 
ore.  The  future  of  Chicago  is,  therefore,  tied  up 
with  the  extent  and  character  of  the  Lake  Superior 
ores.  In  the  future,  these  ores  must  adequately  meet 


Table  III 

Average  Annual  Production  of  Iron  Ore  by 

Districts,  1936-1945 

(Gross  tons) 


District 

Average 
Production 

63,773,139 

6,461,336 

2,649,169 

Northern  New  Jersey-Southeastern 

New  York        .                  

443,024 
2,334,583 

the  competition  of  ores  from  other  districts,  domes- 
tic or  foreign,  which  supply  steel  output  in  Lake 
Erie  ports,  Pittsburgh,  and  on  the  Atlantic  seaboard. 
Therefore,  it  may  be  well  to  examine  the  present 
status  and  future  outlook  for  ore  production  in  the 


Table  IV 

Estimated  Ore  Reserves  in  Lake  Superior 

District,  as  of  1944 

(Gross  tons) 


State,  District 

Ore  Reserves 

Minnesota: 

1,020,138,504 
12,636,820 

62,059,815 
1,094,835,139 

Total,  Lake  Superior  District  in 

231,393 

1,095,066,532 

Michigan: 

32,686,550 

51,357,761 
50,376,403 

Total,  Lake  Superior  District  in 

134,420,714 

Total,  Lake  Superior  District  in 

Minnesota  and  Michigan .... 

Total,  Minnesota  and  Michigan..  . 

1,229,255,853 
1,229,487,246 

a  Not  included  in  Lake  Superior  District. 


Chart  3.  Steps  in  the  Process  of  Steelmaking 


Long-term  Manufacturing  Opportunities  in  the  Upper  Mississippi  Valley 


U 


Lake  Superior  district  supplying  Chicago,  which 
contributed  85  per  cent  of  the  national  total  during 
the  period  1936  to  1945  inclusive. 

The  relative  importance  of  the  major  producing 
districts  is  shown  in  Table  III. 

The  Chicago  district  (Illinois  and  Indiana)  con- 
sumes approximately  25  per  cent  of  the  Lake 
Superior  ores,  sharing  the  output  of  this  district 
with  furnaces  in  Pittsburgh  and  Lake  Erie  ports.3 

Table  IV  shows  the  estimated  reserves  of  high- 
grade  merchantable  ore  in  Minnesota  and  Michigan 
as  of  1944;  the  reserve  in  the  Lake  Superior  district 
was  estimated  at  1,229,255,853  tons.*  Iron  ore  from 
which  the  Chicago  steel  industries  draw  their  sup- 
plies is  obtained  from  the  Minnesota  and  Michigan 
ranges  shown  in  Map  6. 

Future  Ore  Supplies.  The  following  statements 
regarding  future  ore  supplies  were  made  by  the 
authorities  herein  cited: 

We  can  clearly  see  the  exhaustion  of  the  deposits  of 

8 Minerals  Yearbook,  1944  (U.  S.  Bureau  of  Mines),  p. 
547. 
'Ibid.,  pp.  551-552. 


reasonable  cost  high-grade  ore  that  can  be  consumed 
directly  in  the  furnace  without  treatment.  —  L.  P.  Bar- 
rett (V.  P.,  Jones  and  Laughlin  Ore  Co.,  Inter-State 
Iron  Co.,  Pittsburgh),  "Competitive  Position  of  Minne- 
sota Low-Grade  Ore,"  Skillings'  Mining  Review,  Vol. 
XXX,  No.  41,  January  31,  1942. 

For  the  Lake  Superior  region  as  a  whole,  the  direct 
shipping  ore,  including  wash  ore,  constitutes  less  than 
1  per  cent  of  the  bulk  of  the  iron  formation.  —  Barrett. 

The  supply  of  iron  ore  needed  in  the  future  must 
come  from  material  running  20  per  cent  to  30  per  cent 
iron.  —  Barrett. 

Low-grade  ore  of  various  types  exists  in  many  places 
in  the  Lake  Superior  district  and  the  total  is  very 
large. —  (Davis,  p.  7.)5 

If  the  time  should  come  when  30  per  cent  ore  could 
be  used  under  Lake  Superior  conditions,  the  tonnage 
available  would  be  something  enormous.  —  C.  K.  Leith 
(quoted  by  Davis).6 

If  the  iron  formation  is  to  be  considered  an  ore, 
there  is  enough  ore  in  the  Lake  Superior  region  to  last 
the  world  a  thousand  years. — J.  R.  Finlay  (quoted 
by  Davis).5 

6  C.  K.  Leith  and  J.  R.  Finlay  are  both  quoted  by  E.  W. 
Davis  of  the  Mines  Experiment  Station,  Minneapolis,  Min- 
nesota, in  "A  Report  Presented  to  Materials  Division  of 
the  War  Production  Board,"  May  20,  1942. 


Map  6.  Location  of  Lake  Superior  Iron  Ranges  and  Ore  Ports  Serving  the  Ranges 


IS 


University  of  Illinois 


While  the  low-grade  ores  occur  generally  over  the 
Lake  Superior  ore-producing  districts,  the  quantity  on 
the  Mesabi  probably  far  exceeds  that  of  any  other 
district. —  (Davis,  p.  7.)" 

The  beneficiation  (up-grading)  of  low-grade  iron 
ores  is  expected  to  provide  new  sources  to  replace 
the  waning  reserve  of  high-grade  deposits;  and  re- 
search in  this  field  has  been  under  way  for  a  num- 
ber of  years. 

The  Mesabi  Iron  Range  is  about  100  miles  long  and 
from  one  to  three  miles  in  width.  This  range  is  a  con- 
tinuous deposit  of  a  type  of  iron-bearing  rock  called 
taconite   assaying   about  30   per   cent  iron. —  (Davis, 

P.  7.y 

Chart  4  shows  a  generalized  cross  section  of  this 
range. 


Interest  is  centered  primarily  on  the  Lake 
Superior  ores,  including  taconite.  The  great  mass  of 
taconite,  called  "Class  III  low-grade  ore-bearing 
rock"  on  Chart  4,  contains  from  25  to  35  per  cent 
iron  and  from  40  to  60  per  cent  silica.  While  all  of 
it  has  the  same  general  structural  characteristics, 


Chart  4.   Generalized  Cross  Section  of  the  Iron 
Formation  of  the  Mesabi  Range 


The  taconite  is  composed  of  both  magnetic  and 
nonmagnetic  ore.  Commercial  methods  are  now  in 
existence  which  can  separate  the  magnetic  ore  from 
the  taconite  and  effect  a  concentration. 

Chart  5,  reproduced  from  a  1942  report  to  the 
War  Production  Board  by  E.  W.  Davis,  Director 
of  the  Mines  Experiment  Station,  University  of 
Minnesota,  shows  graphically  the  quantities  of  ore 
then  remaining  on  the  Mesabi.  The  triangular  piles 
depict  comparative  amounts  of  various  types  of 
ore:  those  with  diagonal  bars  represent  Class  I 
ores ;  the  solid  black  portions,  Class  II  ores ;  and  the 
clear  portions,  Class  III  ores. 

The  Class  I  ores  are  high-grade  and  require  no 
concentration.  For  these  and  for  the  Class  II  con- 
centrate, accurate  tonnage  estimates  were  available. 
The  size  of  the  magnetic  taconite  pile  as  compared 
with  the  direct  shipping  ores  is  noteworthy.  The 
largest  pile  represents  immense  quantities  of  Class 
II  ore  and  nonmagnetic  taconite  for  which  no  com- 
mercial method  of  concentration  is  yet  known,  and 
which  can  therefore  not  be  considered  an  iron  ore 
reserve. 


Chart  5.   Total  Ore  and  Concentrate  of  the  Mesabi 
Range,  as  of  January  1,  1942  (in  millions  of  tons) 

important  variations  do  occur.  In  general,  the  tacon- 
ite can  be  divided  into  two  classes:  magnetic 
taconite  and  nonmagnetic  taconite.  In  the  magnetic 
taconite,  the  iron  oxide  exists  as  magnetite,  which 
is  a  strongly  magnetic  mineral.  In  the  nonmagnetic 
taconite,  the  iron  oxide  exists  largely  as  hematite, 
a  mineral  that  is  not  magnetic.  From  the  standpoint 
of  concentration,  this  is  a  very  important  distinction, 
because  methods  are  now  in  commercial  use  which, 
with  minor  modifications,  can  be  used  to  concentrate 
the  magnetic  taconites,  whereas  the  nonmagnetic 
taconites,  like  much  of  the  Class  II  ore  materials, 
are  much  more  difficult  to  concentrate. 

After  several  years  of  research  and  pilot  plant 
experimentation,  one  large  mining  company  is  con- 
structing a  commercial-scale  plant  for  the  produc- 
tion of  concentrate  from  taconite. 

The  making  of  iron  ore  concentrate  from  taconite 
involves  the  quarrying  of  hard  rock,  crushing  and 
grinding  to  a  flour-like  fineness  in  order  to  break 
apart  the  particles  of  silica  and  the  particles  of  iron 
ore.  The  iron  ore  is  then  separated  from  the  silica 
by  running  it  under  magnets,  if  it  is  in  magnetic 
form,  or  by  a  process  known  as  froth  flotation,  if 
it  is  in  nonmagnetic  form.  Since  the  product  is  in 
the  form  of  fine  particles,  it  is  necessary  to  sinter 
or  agglomerate  it  so  as  to  get  it  into  lumps  large 
enough  to  be  shipped  and  used  in  furnaces.  The 
taconite  deposit  extends  in  a  band  the  whole  length 
of  the  Mesabi  Range,  a  distance  of  about  75  miles. 
It  exists  in  such  enormous  quantities  that  it  offers 
an  assured  source  of  iron  ore  for  an  indefinite  time 
in  the  future. 


Long-term  Manufacturing  Opportunities  in  the  Upper  Mississippi  Valley 


According  to  the  Bureau  of  Foreign  and  Domes- 
tic Commerce,  United  States  Department  of  Com- 
merce, iron  ore  deposits  of  commercial  grade  and 
size  also  exist  at  Steep  Rock,  Canada;  Bell  Island, 
Newfoundland;  and  on  the  Quebec-Labrador  bound- 
ary in  Canada.  These  may  also  be  considered  as 
available,  when  needed,  to  the  Great  Lakes  steel 
industry. 

Coal  and  Coke.  Coal  requirements  for  steel  are 
of  two  kinds:  (a)  general  fuel  for  power  and  heat- 
ing, and  (b)  metallurgical  coke.  The  manufacture 
of  a  ton  of  steel  requires  about  2,700  pounds  of 
coking  coal  and  about  1,500  pounds  of  coal  for 
power  and  heating.  Coal  for  general  fuel  is  cheaply 
available  in  unlimited  quantities  from  Illinois  and 
Indiana  fields.  Coal  for  the  production  of  metallur- 
gical coke  used  in  the  Chicago  area  is  supplied  prin- 
cipally by  five  states — Pennsylvania,  West  Virginia, 
Kentucky,  Virginia,  and  Illinois. 

Steel  as  an  Industrial  Raw  Material.  Steel  is 
an  alloy  of  iron,  carbon,  and  small  quantities  of  one 
or  more  alloying  metals,  principally  manganese, 
nickel,  chromium,  molybdenum,  vanadium,  tungsten, 
copper,  aluminum,  and  silicon. 

The  unique  qualities  of  iron  —  and  its  alloy, 
steel  —  single  out  this  metal  as  the  basic  material 
upon  which  the  industrial  structure  of  the  nation  is 
built.  The  physical  and  economic  characteristics  of 
iron  which  give  the  metal  this  distinctive  function 
in  industry  are  three: 

1.  Low  cost  —  Natural  abundance,  relatively  low 
cost  of  mining  the  ore,  and  relatively  low  cost  of  re- 
ducing it  to  metal  result  in  low  cost  for  steel. 

2.  Versatility  of  iron  and  its  steel  alloys  —  The 
methods  of  heat  treatment  and  the  use  of  one  or  more 
of  the  group  of  metals  known  as  the  ferro-alloys  have 
provided  the  steelmaker  with  the  means  of  producing 
a  variety  of  steel  alloys,  each  of  which  is  endowed 
with  a  combination  of  properties  by  which  a  particular 
use  of  steel  is  most  efficiently  served. 

3.  Property  of  magnetism  —  This  property,  which  is 
present  in  a  pronounced  degree  only  in  iron,  is  funda- 
mental to  the  development  of  modern  electrical  ma- 
chinery. The  entire  range  of  magnetic  and  electric  ap- 
pliances is  dependent  upon  this  property  in  the  metal. 
It  is  essential  for  the  construction  of  the  generator,  the 
electric  motor,  the  telephone,  the  radio,  and  a  large 
number  of  electrical  measuring  instruments.  The  elec- 
trification of  industry  and  the  widespread  application 
of  electric  power  in  manufacturing,  transportation, 
and  communication  are  based  upon  the  magnetic 
property  of  iron. 

Chart  6  demonstrates  the  truth  of  the  statement 
that  ours  is  a  steel  age.  During  1944,  according  to  a 
progress  report  on  disposal  of  iron  and  steel  war 


Chart  6.    Steel  Among  Industrial  Raw 
Materials,  1944 


plants,  approximately  110,000,000  tons  of  processed 
metallic  and  nonmetallic  basic  materials  were  used 
by  manufacturing  industries  in  the  United  States. 
On  a  tonnage  basis,  steel  accounted  for  85  per  cent. 

It  is  noteworthy  that  the  light  metals,  aluminum 
and  magnesium,  accounted  for  less  than  2  per  cent. 
There  has  been  much  speculation  about  postwar  dis- 
placement of  steel  by  light  metals.  Yet  it  may  be 
seen  in  the  figure  that  if  all  light  metals  which  we 
have  the  present  capacity  to  produce  were  to  be 
used  in  lieu  of  steel,  such  a  development  would  still 
have  a  relatively  small  effect  on  over-all  steel 
consumption. 

Market  Territory  Served  by  Chicago  Steel.  The 
great  steel  centers  adjacent  to  the  Great  Lakes 
would  not  have  developed  if  outlets  for  at  least  a 
considerable  part  of  their  products  had  not  been 
close  at  hand.  The  market  for  steel  produced  in  the 
Chicago  industrial  area  embraces  all  of  Wisconsin, 
all  of  Illinois  except  the  vicinity  of  Granite  City, 
western  Michigan,  and  northwestern  Indiana.  With- 
in this  area  there  is  an  unusually  high  degree 
of  concentration  of  industries  closely  related  to 
primary  steel  production  for  their  supply  of  in- 
dustrial raw  materials.7  These  industries  embrace: 
(1)  products  of  iron  and  steel;  (2)  machinery; 
(3)  automobiles  and  equipment;  (4)  transportation 
equipment. 

Table  V  shows  that  in  the  United  States  26  per 
cent  of  all  workers  were  employed  in  these  indus- 
tries in  1939,  and  in  the  territory  served  by  Chicago 
steel  31  per  cent  of  all  workers  were  so  engaged. 

7  A  wide  array  of  semi-finished  steel  goods  and  consumer 
products  is  made  from  steel. 


University  of  Illinois 


Table  V 

Persons  Employed  in  Manufacturing,  Upper  Mississippi 

Valley  and  the  United  States,  1939 


Geographical 
Division 

(a) 
Number 
Employed  in 
Manufac- 
turing 

(b) 

Number 

Employed  in 

Industries 

Closely 
Related  to 
Raw  Steel 

Per- 
centage of 
(b)  to  (a) 

759,710 
340,563 
621,173 
254,625 
104,445 
223,467 
88,789 

235,835 
147,332 
424,944 
87,499 
22,304 
36,199 
20,025 

974,138 

549,194 
2,457,197 

31 

43 

68 

34 

21 

Missouri 

16 

Iowa 

23 

Total,  Upper  Mis- 
sissippi Valley 

Total  excluding 
Michigan  .... 

United  States 

2,392,772 

1,771,599 
9,622,923 

41 

31 
26 

Source:    Census  of  Manufactures,  1939. 

Coke  and  Coal 

Coke  is  an  artificially  prepared  fuel,  the  residue  that 
remains  after  certain  bituminous  coals  have  been 
subjected  to  destructive  distillation.  Its  character- 
istics are  hardness,  porosity,  and  strength,  the  qual- 
ities essential  in  a  fuel  that  must  be  quick-burning 
and  also  able  to  withstand  the  heavy  pressure  in 
the  blast  furnace  without  crushing. 

The  primary  function  of  coke  is  to  reduce  iron 
ore  to  the  metallic  state.  The  reduction  of  iron  ore 
in  the  blast  furnace,  using  coke  as  a  fuel,  is  so  far 
superior  in  terms  of  economy  to  any  other  method 
of  ore  reduction  that  it  has  no  rivals.  This  fact  is 
of  fundamental  significance,  for  the  use  of  coke  is 
at  present  the  only  means  which  we  have  for  obtain- 
ing iron  cheaply. 

The  evolution  of  coke  manufacture,  first  in  the 
beehive  oven  and,  more  lately,  in  the  by-product 
oven,  stands  as  one  of  the  significant  developments 
in  the  transformation  of  society  from  the  handi- 
craft and  semi-handicraft  stage  to  a  power-operated 
economy.  For,  in  addition  to  its  unique  character- 
istics as  a  fuel  for  the  reduction  of  iron  ore,  an 
adequate  coke  supply  freed  the  metallurgical  indus- 
try from  the  sharp  limitations  of  fuels  hitherto 
available  for  smelting  ores — charcoal  and  anthracite. 

With  the  introduction  of  the  coke  oven  and  the 
blast  furnace,  the  requisite  for  industrialization  — 
cheap  steel  —  emerged  as  a  reality.  These  two  in- 
struments of  production,  the  coke  oven,  as  the  pro- 
ducer in  mass  tonnages  of  a  requisite  fuel,  and  the 


blast  furnace,  as  the  highly  efficient  producer  of  pig 
iron,  also  in  mass  tonnages,  are  the  gateways  to  a 
highly  productive,  versatile,  complex,  industrial 
economy.  Other  methods  of  obtaining  iron  have 
been  proposed  but,  so  far,  none  shows  any  possi- 
bility of  replacing  the  blast  furnace  fired  by  coke. 
The  coke  oven,  then,  together  with  the  blast  furnace, 
becomes  the  symbol  of  productiveness,  the  basis  of 
a  high  standard  of  living,  and  of  power. 

Sources  of  Coking  Coal.  Coal  presently  suit- 
able for  the  manufacture  of  coke  occurs  in  a  lim- 
ited portion  of  the  Appalachian  fields,  principally 
in  Pennsylvania,  West  Virginia,  Alabama,  and  east- 
ern Kentucky.  Minor  quantities  have  been  contrib- 
uted by  other  states  east  of  the  Mississippi  River. 

In  Map  7  are  shown  the  counties  in  the  United 
States  that  produce  coking  coal.  Shipments  of 
coking  coal  to  ovens  in  the  Chicago  industrial 
district  are  reported  from  six  states.  The  counties 
that  are  most  important  contributors  to  this  large 
consuming  market  are  shown  in  solid  black.  The 
importance  of  each  state  as  a  source  of  coking 
coal  for  the  steel  industry  in  the  Chicago  district 
is  shown  in  Table  VI. 

In  the  Chicago  district,  assembly  of  coal  for  the 
steel  industry  is  one  of  the  important  elements  of 


Map  7.  Counties  in  Eastern  States  Which  Produced 
Coking  Coal,  1939 


Long-term  Manufacturing  Opportunities  in  the  Upper  Mississippi  Valley 


Table  VI 

Tons  of  Coal  Purchased  for  Coking  Purposes, 

Chicago  District,  1939-1944 


West  Virginia . 

Kentucky 

Virginia 

Pennsylvania. . 

Illinois 

Indiana 


7,236,605 
5,380,882 
651,619 
464,105 
262,233 
35,269 


Source:   Minerals  Yearbooks,  1939-1944  (U.  S.  Bureau  of 
Mines). 


cost.  Out  of  a  total  assembly  cost  of  coal,  ore,  and 
flux,  as  indicated  by  a  study  of  conditions  in  1937, 
the  cost  of  shipping  coal  to  the  Chicago  district  was 
51  per  cent  of  all  costs,  as  compared  with  4  per  cent 
for  Pittsburgh,  7  per  cent  for  Weirton,  27  per  cent 
for  Youngstown,  42  per  cent  for  Cleveland,  44  per 
cent  for  Buffalo,  and  48  per  cent  for  Detroit. 

One  of  the  key  problems,  therefore,  in  maintain- 
ing the  competitive  position  of  the  Chicago  steel 
industry  is  a  reduction  in  coal  assembly  costs.  The 
crux  of  the  situation  is  the  high  cost  of  shipping 
coking  coal  from  coal  districts  in  southern  West 
Virginia  and  eastern  Kentucky  to  Chicago.  A  sub- 
stantial contribution  to  lower  costs  of  coal  can  pos- 
sibly be  made  through  the  development  of  processes 
for  the  coking  of  a  blend  of  Illinois  and  eastern 
coals.  Investigations  of  this  possibility  are  in 
progress,  with  apparently  promising  results. 

Production  of  steel  becomes  less  dependent  upon 
coke  in  an  aging  industrial  economy.  As  more  scrap 
becomes  available,  the  quantity  of  coke  required  for 
each  ton  of  steel  is  reduced.  This  is  illustrated  in 


Coke  Consumed  in  Steel  Production,  the  Chicago 

District  and  the  United  States,  1916  and  1940 

(Thousands  of  net  tons) 


United  States 

Chicago  District 

1916 

1940 

1916 

1940 

Metallurgical  coke  used" 

47,875 
47,907 

1.00 

45,471 
66,983 

1.47 

6,227 
7,856 

1.26 

7,637 

Tons  of  steel  per  ton 
of  coke  used 

1.75 

Sources:  Minerals  Yearbook,  1940;  Mineral  Resources  of 
the  United  States:  Part  I,  Metals,  1916  (U.  S.  Dept.  of  the 
Interior). 

a  Coke  is  used  in  producing  pig  iron,  which  is  the  first  step 
in  steel  production. 


Chart  7,  which  shows  the  tons  of  steel  produced  per 
ton  of  furnace  coke  used  from  1915  to  1945.  The 
Chicago  steel  industry  is  less  dependent  upon  coke 
and  new  sources  of  metal  than  some  of  its  rival 
districts,  as  is  shown  by  the  comparative  ratios  in 
Table  VII. 

The  heavy  demand  of  the  blast  furnace  industry 
for  the  coking-coal  supplies  of  the  Appalachian 
fields  is  the  most  critical  factor  in  the  supply  of  new 
metal  for  a  steel  industry.  The  present  outlook  is 
favorable  for  the  immediate  future,  and  in  the 
meantime  the  contribution  of  scrap  to  the  annual 
requirements  of  the  steel  industry  and  the  develop- 
ment of  new  coking-coal  sources  in  Illinois  will  have 
the  effect  of  extending  the  life  of  the  critical  coking- 
coal  reserves.  Investigations  of  the  coking  proper- 
ties of  coal  are  under  way  to  bring  additional  re- 
serves of  coal  within  the  category  of  coking  coals. 


Chart  7.  Tons  of  Steel  Produced  per  Ton  of  Furnace  Coke  Used,  United  States,  1915-1945 
*Data  not  available 


LIQUID  FUELS  IN  THE  ECONOMY  OF  THE 
UPPER  MISSISSIPPI  VALLEY 

The  wide  use  of  machinery  powered  by  liquid  fuel  small  ones.  Now  machines  are  being  developed  for 
units  is  woven  into  the  very  fabric  of  the  American  small  farms  as  well,  and  these  farms  may  be  ex- 
industrial  economy.  Altogether  a  stimulus  of  eco-  pected  to  make  more  rapid  strides  toward  increased 
nomic  activity  amounting  to  10  to  12  per  cent  of  the  output  per  worker."10  The  key  to  the  continued  ex- 
national  productivity  springs  from  the  desire  to  pansion  of  mechanization  is  an  assured  supply  of 
own  and  operate  an  automobile.  low-cost  liquid  fuels. 

Direct  users  of  oil,  which  include  motor-car  The  importance  of  mechanical  power  and  trans- 
owners,  owners  of  oil-heated  homes,  bus  lines,  and  portation  powered  by  internal  combustion  engines  in 
ocean  liners,  have  an  immediate  interest  in  ade-  the  Upper  Mississippi  Valley  states  is  shown  in 
quate  liquid  fuel  supply.  Table  VIII. 

But  back  of  the  automobile  owner,  for  example,  -         .         ,  . .      .  ,  p      . 

are  vast  manufacturing  and  service  industries  each  ^"  '             " 

of  which  is  dependent  upon  the  automobile.  Among  Requirements  and  Supply.    The  productive  pat- 

these  are  steel,  alloys,  rubber,  plastics,  lead   (min-  tern  of  agriculture,  manufacturing,  transportation, 

ing),   cement,   sand,   gravel   and   stone   quarrying,  and  power  production  in  the  states  of  the  Upper 

plate  glass,   and,   in   a   minor   way,   resins,   paints,  Mississippi  Valley  as  it  is  organized  on  a  peacetime 

and  textiles.  basis  requires  the  refined  products  of  petroleum  in 

Automobile  manufacturers  under  a  peace  econ-  about  the  following  annual  quantities: 

omy  normally  take  15  to  18  per  cent  of  the  steel  Barrels 

output,  80  per  cent  of  rubber  manufactures,  nearly  Gasoline 133,000,000 

half  the  output  of  the  plate  glass  industry,  and  a  Kerosene 19,000,000 

large  amount  of  lead,  used  in  storage  batteries.  One  Fuel  oil 65,000,000 

quarter  of  the  cement  output  goes  into  highway  Tractor  fuel 2,000,000 

construction,  which  is  a  direct  outgrowth  of  auto-  There  is  no  doubt  that  these  requirements  will  be 

mobile  travel ;  associated  with  the  industry  also  are  substantially  increased  in  the  future. 

large  tonnages  of  sand,  gravel,  and  crushed  stone.  To  supply  the  various  consumers,  refineries  are 

Paralleling  the  manufacturing  and  construction  located  at  strategic  points  in  Illinois  —  in  Chicago, 

industries  are  the  vast  wholesale  and  retail  distribu-  at  Wood  River  near  Alton,  and  in  the  southeastern 

tive  activities  and  service  industries,  which  together  part  of  the  state. 

employ  a  million  persons  with  an  aggregate  yearly  The  supply  of  liquid  fuel  for  home  heating,  for 

pay  roll  of  one  billion  dollars.  farm  power,  and  for  manufacturing,  at  low  costs  to 

The   pattern   of   agricultural   production   in   the  the  users,  arises  out  of  the  price  interrelationships 

Upper   Mississippi  Valley   is  becoming  geared   to  among  the  refined  products  obtained  from  crude 

machine  production  powered  by  the  internal  com-  petroleum.  In  the  production  of  motor  fuel  —  the 

bustion  engine.  Gasoline,  kerosene,  and  Diesel  fuel  "cash   crop"    of    the   industry  —  the   refinery   also 

are   the    fuels   used   in   the   agricultural   economy.  yields  by-products  of  heavier  fuel  oils  which  enter 

"Mechanization  of  farms  is  responsible  for  much  the  market  at  relatively  low  prices.  Abundant  sup- 

of  the  steady  rise  in  the  efficiency  of  farm  labor."8  plies  of  low-priced  oil  for  industrial  fuel  and  for 

"Production  per  farm  worker  in  1944  was  twice  as  home  heating  are  contingent  upon  an  abundant  flow 

great  as  in  1910. "9  of  crude  and  a  high  demand  for  motor  fuel. 

The  adaptation  of  power  machinery  to  crop  pro-  The  relative   outputs   and  values  of  the  major 

duction  is  especially  effective  on  the  level  farm  lands  refined  products  from  crude  oil  as  they  leave  the 

and  large  farm  units  of  Illinois,  Iowa,  and  neighbor-  refinery  are  portrayed  in  Tables  IX  and  X.  Modern 

ing  states.  "Mechanical  power  in  its  earlier  stages  refinery  technology  is  continually  finding  ways  to 

was  best   adapted   to   large   farms,   and  the  large  increase  the  yield  of  motor  fuel  and  correspondingly 

farms  gained   in  efficiency  much   faster  than   the  reduce  the  yield  of  by-products  (see  Table  XI). 

8  Report  of  the  Chief  of  the  Bureau  of  Agricultural  Petroleum  Reserves  and  Supply.    The  over-all 

Economics,  Fiscal  Years,  1943-44   (U.   S.  Department  of  oil  needs  of  Illinois  and  the  Upper  Mississippi  Val- 

Agriculture),  p.  16.  

0  Ibid.,  p.  15.  I0  Ibid.,  p.  17. 


22 


Long-term  Manufacturing  Opportunities  in  the  Upper  Mississippi  Valley 


Table  VIII 
Liquid  Fuel  Consumption  in  the  Upper  Mississippi  Valley,  1939 


Gasoline 
Consump- 
tion11 
(thousands 


Number  of 
Tractors  on 

(1940)b 


Private  and  Commercial 


Passenger 
Cars,  Busses, 
and  Taxis 


Trucks, 
Tractor 


Publicly 
Owned 

Vehicles, 

Federal, 
State, 

County, 
etc. 


Motor- 
cycles, In- 
cluding 
Official 


Fuel  Oil 
Consump- 
tion'1 
(thousands 


Number  of 
Oil-heated 
Homes8 


Illinois 

Indiana 

Wisconsin 

Minnesota 

Michigan 

Iowa 

Missouri 

Upper  Mississippi 
Valley  (a) 

United  States  (b). . . . 

Percentage  (a)  to  (b) 


33,803 
15,973 
13,494 
13,111 
27,455 
13,103 
15,590 


132,529 
539,963 

24.5 


126,069 
73,221 
81,195 

105,075 
66,524 

128,516 
45,155 


625,755 

1,567,430 

39.9 


1,624,031' 
824,196 
705,751 
721,473 

1, 326,808* 
671,858' 
735,485 

6,609,602 
26,201,395 

25.2 


225,592' 
136,646 
142,907 
118,577 
145,503h 
94,554' 
141,609 


1,005,388 
4,413,692 

22.8 


13,863 
8,751 

10,515 
8,522 
3,305^ 
7,815 
4,852 


57,623 

394,783 

14.6 


7,256 
5,405 
3,695 
2,343 
4,645 
2,838 
2,317 


28,499 

126,233 

22.6 


22,561 
8,977 
5,793 
5,909 

10,119 
2,969 
9,339 


65,667 
456,943 

14.4 


159,822 
19,034 
76,091 

117,362 


557,304 
2,907,980 


a  Minerals  Yearbook,  1941. 

b  Census  of  Agriculture:  1940,  Third  Series. 

0  Statistical  Abstract  of  the  United  States,  1940. 

d  Minerals  Market  Reports,  M.M.S.  No.  892,  January  31,  1941. 

6  Census  of  Housing:   1940,  Second  Series. 


f  Busses  included  with  trucks. 

g  State,  county,  and  municipal  vehicles  included  a 

private  and  commercial  vehicles. 
h  Taxicabs  included  with  trucks. 


Table  IX 

Production  of  Refined  Petroleum  Products, 

Central  Refining  District,  1944 

(In  barrels) 


Product 

Quantity 

Gasoline 

142,276,000 
56,890,000 
34,544,000 
13,665,000 

4,526,000 

Source:   Minerals  Yearbook,  1944  (U.  S.  Bureau  of  Mines). 


Table  XI 

Percentage  Yields  of  Refined  Petroleum  Products 

in  the  United  States,  1916-1944 


Year 

Gaso- 
line 

Kero- 
sene 

Fuel 
Oil 

Other 
Products 

1916 

19.8 
26.8 
35.1 
46.6 
47.3 
46.1 
44.5 

14.0 
12.7 
8.1 
5.3 

5.8 
5.7 
5.4 

45.0 
48.6 
49.3 
40.2 
37.3 
38.6 
47.2 

21.2 

1920 

11  9 

1925 

7.5 

1930   . . . 

7  9 

1935 

9.6 

1940   .    . 

9  6 

1944 

2.9 

Source:    United  States  Department  of  the  Interior. 


Table  X 

Dollar  Value  of  Refined  Petroleum  Products, 

Central  Refining  District,  1940 


Product 

Value 

5447,695,850 
69,961,450 
60,336,360 
30,411,360 

Source:  Piatt's  Oil  Price  Handbook,  1940. 


Table  XII 

Proved  Reserves  of  Petroleum  in  Selected  States, 

as  of  January  1,  1946 

(In  barrels) 


State* 

Proved  Reserves 

889,839,000 

349,620,000 
303,674,000 
64,186,000 
56,721,000 

Arkansas 

41,243,000 

Source:  Quarterly  bulletin  of  the  American  Petroleum 
Institute,  April,  1946. 

a  These  states  furnish  the  bulk  of  the  oil  for  the  Upper 
Mississippi  Valley. 


24 


University  of  Illinois 


ley  are  approximately  30  per  cent  of  the  total  for 
the  nation.  This  large  consumption  reflects  the 
highly  mechanized  agriculture,  industry,  and  trans- 
portation of  the  region. 

In  Illinois  and  in  near-by  states  are  located  re- 
serves of  petroleum  which  supply  refineries  in  the 
Chicago  district,  at  Wood  River,  and  in  southeast- 
ern Illinois;  additional  reserves  of  petroleum  for 
the  needs  of  the  Chicago  refineries  are  available 
from  the  Mid-continent  states  and  are  transported 
by  pipe  line  and  barge.  The  estimate  of  proved  re- 
serves as  of  January  1,  1946,  is  shown  in  Table  XII. 

Present  estimated  reserves  represent  only  a  por- 
tion of  recoverable  petroleum  supplies.  Each  year 
exploration  uncovers  new  supplies  to  replace  the  oil 
withdrawn  for  use.  In  the  past  ten  years  all  states 
that  directly  supply  oil  to  the  Upper  Mississippi 
Valley  district,  with  the  exception  of  Oklahoma  and 
Michigan,  have  added  more  reserves  than  a  ten- 
year  production.  Chart  8  shows  data  reported  in  the 
quarterly  bulletins  of  the  American  Petroleum  Insti- 
tute for  April,  1945,  and  April,  1946,  and  the  Oil 
and  Gas  Journal,  January  25,  1947.  Kansas  figures 
for  1946  include  Nebraska  and  Missouri ;  Kentucky 
figures  for  1946  include  Tennessee. 

Estimates  of  Reserves  Are  Conservative.  The 
estimates  used  in  this  report  include  only  blocked- 
out  reserves  of  crude  oil  known  to  be  recoverable 
under  existing  economic  and  operating  conditions. 
They  do  not  include:  (a)  oil  under  unproved  por- 
tions of  partly  developed  fields;  (b)  oil  in  untested 
prospects;  (c)  oil  that  may  be  present  in  unknown 
prospects  in  regions  believed  to  be  generally  favor- 


able; (d)  oil  that  may  become  available  by  second- 
ary recovery  methods  from  fields  where  such  meth- 
ods have  not  been  applied. 

Oil  Supply  for  the  Future.  Modern  technology 
is  showing  the  way  by  means  of  which  a  permanent 
supply  of  liquid  fuel  can  be  assured.  In  addition  to 
the  known  supplies  of  petroleum  in  developed  pools 
and  fields,  and  the  additional  discoveries  that  will 
continue  to  be  made  each  year,  there  are  five  re- 
serve sources  from  which  liquid  fuel  may  be  ob- 
tained if  the  present  supply  becomes  inadequate. 

The  First  Reserve  —  Refinery  Products.  The 
first  reserve  is  that  portion  of  the  refinery  product 
which  is  made  up  of  heavy  residual  oils  and  still 
gases.  Modern  technology  is  continually  developing 
and  improving  processes  whereby  more  of  the 
highly  valued  products  are  recovered  from  crude  oil 
in  the  refinery  process. 

The  Second  Reserve  —  Natural  Gas.  Gasoline 
and  other  liquid  hydrocarbon  may  be  made  from 
natural  gas  at  a  manufacturing  cost,  for  the  gaso- 
line, of  approximately  5  to  6  cents  a  gallon  if 
natural  gas  is  available  at  about  5  cents  a  thousand 
cubic  feet. 

The  known  reserves  of  natural  gas  in  the  Texas 
Panhandle  and  in  Kansas  can  be  made  to  augment 
existing  sources  of  liquid  fuel  without  impairing  the 
services  to  existing  natural  gas  markets.  (Science- 
Supplement,  Vol.  106,  No.  2627,  May  4, 1945,  p.  12.) 

Proved  reserves  of  natural  gas  in  the  United 
States  are  estimated  to  be  in  excess  of  140  trillion 
cubic  feet.  In  the  principal  gas-producing  states  in 


Oklahoma 

i                         i 

ii                         i                         i 

1                          i 

1,521,044,000.. 

i 

1,049,475,000.. 

Illinois 

KEY: 

HB9^B  Reserves 

Discovered  and  Accumulated  Production,  1935-1946  (i 

Michigan 

213,465,000.. 

....■HMM 

89,371,000.. 
81,362,000.. 

82,214,000.. 
46,381,000., 

Chart  8. 

■  ■■■1 1 

....□ 

Petroleum  Reserves: 

discovered  Jan.  1,  1935  to  Dec.  31,  1946 
iduclion,  Jan.  1,  1935  to  Dec.  31,  1946 

n  millions  of  barrels) 

Long-ierm  Manufacturing  Opportunities  in  the  Upper  Mississippi  Valley 


25 


the   Mid-continent,   the  reserves   are  estimated  as 
follows:11  Trillion 

cubic  feet 

Kansas 11 

Oklahoma 6 

Texas 82 

Louisiana 17 

Substantial  additions  to  this  reserve  are  antici- 
pated from  future  discoveries. 

The  Third  Reserve — Secondary  Recovery.  The 
recovery  of  oil  from  fields  or  pools  by  the  applica- 
tion of  gas  pressure  or  water  flooding  has  added  a 
reserve  over  and  above  the  estimates.  This  method 
of  production  is  practiced  in  Illinois  and  has  added 
to  the  recoverable  supply  of  oil. 

"Testimony  of  E.  DeGolyer  before  the  Federal  Power 
Commission  in  hearings  at  Kansas  City  on  September  18, 
1945,  and  reported  in  the  New  York  Times  of  September 
19,  1945. 


The  Fourth  Reserve  —  Imported  Oil.  Oil  from 
South  America  can  supplement  domestic  supply  in 
quantities  ample  to  meet  domestic  requirements  for 
many  decades. 

The  Fifth  Reserve  — Coal  and  Shale.  "This 
natural  and  competitive  development  of  substitute 
processes,  plus  information  from  abroad,  has 
already  shown  us  how  to  make  unlimited  quantities 
of  gasoline  from  coal  at  prices  lower  than  those 
prevailing  after  World  War  I  and,  if  allowed  to 
continue  the  natural  course,  will  almost  certainly 
reduce  the  costs  of  gasoline  made  from  coal  or  the 
richer  oil  shales  to  a  figure  not  over  5  cents  per  gal- 
lon above  present  gasoline  costs  from  crude 
petroleum."12 

12  R.  E.  Wilson,  "Liquid  Fuel  from  Non-Petroleum 
Sources,"  Chemical  and  Engineering  News,  Vol.  22,  No.  15, 
August  10,  1945,  p.  1245. 


FOOD  SUPPLY 


Indispensable  as  a  foundation  of  an  enduring  pro- 
ductive economy  is  a  sustained  and  assured  supply 
of  food  at  low  cost.  Low-cost  food  is  a  resultant  of 
several  environmental  factors  — -  fertile  soil,  level  or 
gently  rolling  topography,  mechanization  of  agricul- 
ture, and  low-cost  transportation.  These  conditions 
are  met  in  a  superior  manner  in  the  Upper  Missis- 
sippi Valley.  Upon  the  level  prairie  and  cleared 
woodland  areas,  vast  in  extent  and  almost  unbroken 
by  intervals  of  wasteland,  mechanization  in  agri- 
culture has  achieved  its  highest  degree  of  develop- 
ment. The  same  factor  of  topography  has  favored 
low-cost  transportation  and  encouraged  alternative 
methods.  Both  rail  and  highway  transportation  play 
an  important  role  in  the  cost  of  assembling  food 
materials  and  in  distributing  food  products. 

Highly  fertile  soil  adds  to  the  productivity  of 
mechanized  agriculture  and  of  the  farmer  because 
each  acre  operation  results  in  a  high  yield  per  man- 
day  effort.  "Use  of  tractor  and  motor  power  has, 
since  1920,  released  more  than  60  million  acres  of 
crop  and  pasture  land  from  feed  production   for 


work  stock  into  production  of  commodities  for  sale. 
If  the  trend  away  from  horses  and  mules  continues 
until  1950,  another  8  to  10  million  acres  will 
be  made  available  for  commercial  production."13 
A  large  part  of  this  change  has  occurred  in  the 
states  of  the  Upper  Mississippi  Valley.  Census  fig- 
ures for  the  past  twenty-five  years  show  a  consistent 
decline  in  the  number  of  horses  and  mules  on  farms 
in  those  states,  from  6.7  million  in  1920  to  2.8  mil- 
lion in  1945,  a  decrease  of  almost  60  per  cent. 

Thus  one  of  the  limiting  factors  to  population 
growth  and  industrial  expansion  —  a  land  base  for 
food  supply  —  is  still  expanding  in  this  area  as  me- 
chanical power  continues  to  replace  animal  power, 
releasing  millions  of  acres  of  land  hitherto  used  in 
producing  feed  for  work  animals  to  become  avail- 
able for  commercial  production. 

Map  8  shows  the  distribution  of  tractors  on  farms 
in  the  various  states,  and  the  percentage  of  land  in 
farms  in  the  Upper  Mississippi  Valley  is  depicted 
in  Map  9. 

18  Report  of  the  Chief  of  the  Bureau  of  Agricultural 
Economics,  Fiscal  Years,  1943-44,  p.  17. 


Map  8.  Distribution  of  Tractors  in  the  United  States,  1940  (in  thousands) 


Long-term  Manufacturing  Opportunities  in  the  Upper  Mississippi  Valley 


27 


Map  9.    Percentage  of  Farm  Land  in  Counties  of  the 
Upper  Mississippi  Valley,  1939 


The  importance  of  agriculture  as  an  industry  in 
Illinois  and  other  states  of  this  region  may  be  ob- 
served in  Table  XIII,  which  presents  data  as  shown 
in  the  most  recent  Census  of  Agriculture,  that  for 


1945.  The  proportion  of  soybeans  produced  in  the 
Upper  Mississippi  Valley  is  outstanding.  Oats,  corn, 
and  swine  raised  in  these  states  represent  a  signifi- 
cant proportion  of  national  production. 

Meat  Packing  and  Food  Supply 

The  position  of  meat  among  the  major  items  of 
food  produced  in  this  country  is  shown  in  Table 
XIV.  Meat  products  account  for  32  per  cent  of  the 
value  of  product  of  the  principal  items  of  food  and 
allied  products  (not  including  liquors),  and  form 
a  large  part  of  the  American  worker's  food  budget. 

In  the  Upper  Mississippi  Valley  states  the  meat- 
packing industry  occupies  a  position  of  fundamental 
significance.  In  Illinois  it  leads  all  others  in  number 
of  workers,  and  in  the  Chicago  district  it  is  ex- 
ceeded only  by  the  steel  industry.  Data  on  employ- 
ment in  this  industry  over  two  decades  are  shown 
in  Table  XV. 

The  further  development  of  this  industry  in  Chi- 
cago and  in  the  smaller  industrial  centers  in  the 
Upper  Mississippi  Valley  is  limited  only  by  the 
potential  productivity  of  the  farm  lands  in  this  fer- 
tile and  productive  economic  region. 

There  are  two  ways  in  which  the  food  potential 
of  these  states  has  been  expanded  in  the  past  two 
decades:  (a)  by  the  addition  of  acreage  formerly 
devoted  to  feeding  work  animals;  and  (b)  by  im- 
proving the  productivity  of  the  land  itself  through 
soil  treatment,  control  of  diseases  and  pests,  fertili- 
zation, hybridized  crops,  and  improved  breeds  of 
plants  and  animals. 


Table  XIII 

Agriculture  in  Illinois,  the  Upper  Mississippi  Valley,  and  the  United  States,  1945 

(In  thousands) 


Geographical  Division 

Acreage  of 

Number  of 

Farm  Land 

Wheat 

Corn 

Oats 

Soybeans 

Cattle 

Swine 

Sheep 

1,142,818 

64,740 

91,202 

41,503 

10,873 

3,833 

1,780 

87 

335 
1,997 

685 

81,909 

59,759 

4,690 
3,231 
1,336 
2,615 
7,652 
2,771 

40,922 
625 

Illinois  (b) 

31,602 
20,027 
23,615 
33,140 
34,454 
35,278 

1,211 
1,257 
57 
1,139 
113 
1,175 

9,140 
4,554 
2,667 
5,773 
10,993 
4,658 

3,142 
1,175 
2,718 
4,305 
4,697 
1,804 

3,278 
1,900 
3,962 
3,790 
5,432 
3,261 

Indiana 

549 

358 

Minnesota 

1,122 
1,354 

Missouri 

1,257 

Total,  Upper  Mississippi  Valley  (c) .  . . 

178,116 

4,952 

37,785 

17,841 

8,717 

21,623 

22,295 

5,265 

Percentage  (b)  to  (a) 

2.8 

1.9 

10.0 

7.6 

35.3 

4.0 

7.8 

1.5 

Percentage  (c)  to  (a) 

15.6 

7.6 

41.4 

43.0 

80.2 

26.4 

37.3 

12.9 

Source:    Census  of  Agriculture:   1945. 


University  of  Illinois 


Table  XIV 

Value  of  Product,  Principal  Items  of  Food  Manufacture 

in  the  United  States,  1939 

(In  thousands  of  dollars) 


Meat-packing  products 

Bread  and  bakery  products 

Canned,  dried  fruits  and  vegetables 

Beet  and  cane  sugar 

Creamery  butter 

Candy 

Ice  cream  and  ices 

Condensed,  evaporated  milk 

Sausages,  prepared  meats,  etc.,  not  prepared 

in  meat-packing  establishments 

Biscuits,  crackers,  pretzels 

Source:   Bureau  of  the  Census. 


Flour  and  Other  Mill  Products 

The  milling  of  flour  is  important  not  only  as  the 
first  step  in  converting  wheat  and  other  grains  into 
edible  foods  but  also  as  the  springboard  for  indus- 
tries engaged  in  the  manufacture  of  prepared  foods. 
This  includes  breadbaking,  the  manufacture  of  bis- 
cuits, crackers,  pretzels,  macaroni,  spaghetti,  etc. 
The  flour  milling  and  food  processing  industries,  in 
the  main,  serve  local  or  regional  markets. 

The  relative  position  in  flour  milling  of  the  states 
in  the  Upper  Mississippi  Valley  and  the  western 
wheat-growing  states  is  shown  in  Table  XVI,  as  is 
also  the  position  of  the  four  principal  cities  engaged 
in  flour  manufacture. 


Employees  in  Wholesale  Meat-Packing  Establishments 
in  the  Upper  Mississippi  Valley,  1919-1939 


Year 

Upper 
Missis- 
sippi 
Valley 

Illinois 

Other 
States4 

Illinois 

Per- 
centage 

of 
Total 

1939 

67,747 
69,706 
65,127 
65,631 
63,298 
73,805 
71,782 
73,414 
84,331 
74,695 
111,670 

23,492 
26,120 
25,217 
23,704 
23,680 
29,618 
29,609 
30,236 
36,144 
32,136 
54,179 

44,255 
43,586 
39,910 
41,927 
39,618 
44,187 
42,173 
43,178 
48,187 
42,559 
57,491 

34.7 

1937 

37.5 

1935 

38.7 

1933 

36.1 

1931 

37.4 

1929 

40.1 

1927 

41.2 

1925 

41.2 

1923 

42  9 

1921 

43.0 

1919 

48  5 

Source:    Census  of  Manufactures. 

a  Indiana,  Wisconsin,  Minnesota,  Iowa,  Missouri,  Kansas, 
and  Nebraska. 


Dollar  Value  of  Flour  Milling  Products  in 
Upper  Mississippi  Valley,  1939 


State  —  City 

Value  of 
Product 

£69,859,000 
67,437,000 

48,097,000 

42,766,000 

24,569,000 
17,485,000 

(Minneapolis-St.  Paul:  39,981,000) 

(Kansas  City:  34,513,000) 
(St.  Louis:  9,757,000) 

(Chicago:  11,178,000) 

10,021,000 
8,355,000 
5,304,000 
1,227,000 

Source:   Bureau  of  the  Census. 


SUMMARY 


Growth  in  industrial  opportunity  must  be  based  on 
the  type  of  resources  available  for  industrial  pro- 
duction, the  extent  of  these  resources,  and  the  pur- 
chasing power  of  the  area  in  which  a  market  is 
being  sought.  Through  the  past  six  decades  the 
Chicago  industrial  area  and  its  interrelated  districts 
in  the  Upper  Mississippi  Valley  have  grown  re- 
markably. The  most  important  factor  in  attracting 
this  population  has  been  the  great  economic  oppor- 
tunities offered  here.  The  vital  question  in  the  fore- 
seeable future  is  the  prospect  of  maintaining  these 
opportunities,  for  a  population  can  be  supported 
only  if  there  is  adequate  basis  for  employment.  This 
report  presents  a  preliminary  investigation  of  the 
conditions  in  the  basic  industries  needed  to  sustain 
employment. 

In  the  postwar  world  hard  work  and  high  pro- 
ductivity will  be  essential  over  a  long  period  of  time. 
The  waste  of  war  is  reflected  in  a  high  national 
debt  —  a  deficit  which  can  be  erased  only  by  both 
high  production  and  high  productivity. 

One  of  the  primary  requisites  of  high  productiv- 
ity—  that  is,  a  high  output  per  man  and  a  high 
degree  of  total  employment  —  is  freedom  to  select 
the  most  efficient  methods  of  production  and  the 
most  economical  location  of  industry  with  respect  to 
markets,  materials,  and  fuel. 

For  continued  production  and  employment  at  a 
high  level,  assuming  efficiency  in  production  and 
economy  in  location,  an  industrial  area  must  be 
amply  supported  by  basic  raw  materials,  fuels,  and 
food  supplies.  The  industries  which  are  considered 
basic  in  the  Upper  Mississippi  Valley  and  which 
supply  the  necessary  elements  for  a  large  industrial 
base  are  steel,  coke,  oil  products,  meat  packing,  and 
flour  milling. 

Steel  and  Coke 

Steel  is  the  raw  material  for  a  wide  variety  of 
manufacturing  industries,  large  and  small,  not  only 
in  the  Chicago  industrial  area  itself  but  also  in  the 
smaller  manufacturing  cities  of  downstate  Illinois, 
Wisconsin,  Minnesota,  Iowa,  Missouri,  and  Indiana. 
The  ultimate  source  of  the  primary  steel  produced 
in  the  Chicago  district  is  the  vast  ore  bodies  of  the 
Lake  Superior  district.  To  reduce  this  ore  to  steel 
requires  metallurgical  coke,  made  largely  from  coal 
mined  in  the  West  Virginia  fields.  Although  the 
drafts  upon  high-grade  ore  have  been  heavy,  there 
is  a  vast  reserve  of  low-grade  ore,  'practically  inex- 
haustible, that  can,  when  needed,  continue  to  sustain 
the  steel  industry  of  the  Chicago  district.  Coking 


coal  is  in  no  danger  of  early  exhaustion.  It  is  now 
becoming  evident  that  Illinois  coals,  when  blended 
with  eastern  coal,  can  supply  a  substantial  portion 
of  the  coking-coal  needs  of  the  steel  industry  in  the 
Chicago  district. 

Liquid  Fuels 

A  substantial  part  of  the  Upper  Mississippi  Valley 
liquid  fuel  requirements  are  supplied  from  near-by 
oil  fields  in  Illinois  and  the  Mid-continent,  and  the 
area  has  access  to  more  distant  supplies  from 
Louisiana,  Texas,  and,  if  need  be,  from  South 
America,  available  by  low-cost  tanker,  river-barge, 
and  pipe-line  transportation. 

Meat  Products 

The  supply  of  meat  products  from  the  Upper  Mis- 
sissippi Valley  area  —  the  most  important  item  in 
the  American  workman's  diet  —  is  potentially 
greater  than  that  necessary  to  supply  the  population 
of  this  area.  This  has  been  increased  during  the 
past  two  decades  by  bringing  under  cultivation  sev- 
eral million  acres  of  land  in  areas  adjacent  to  the 
Upper  Mississippi  Valley  states  and  by  improved 
crop  technology  and  feeding  practices. 

Although  Chicago's  percentage  of  meat  packed 
has  decreased,  this  means  merely  a  decentralization 
of  this  activity  in  the  Upper  Mississippi  Valley  and 
an  increase  rather  than  a  decrease  in  the  amount  of 
meat  available  at  a  minimum  of  transportation  and 
distribution  costs. 

Grain -Mill  Products 

The  production  of  flour  and  other  grain-mill  prod- 
ucts is  decentralized  throughout  the  Upper  Missis- 
sippi Valley  cities.  Minneapolis,  Milwaukee,  and 
Kansas  City  are  more  important  than  Chicago  as 
centers  for  the  processing  of  grain  products. 

Market  Opportunity 

The  uniquely  favorable  combination  of  a  highly  in- 
dustrialized area  in  the  midst  of  a  highly  productive 
agricultural  area  has  created  a  region  of  locally  high 
purchasing  power  —  the  summation  of  agricultural 
crops  sold  and  wages  paid  in  manufacturing,  retail 
and  wholesale  trade,  mining  and  other  industries. 

Finally,  the  primary  industries  of  the  Chicago  dis- 
trict and  the  abundant  raw  materials  of  the  Upper 
Mississippi  Valley  states  offer  most  of  the  favorable 
conditions  necessary  for  an  era  of  sustained 
productivity. 


APPENDIX 


Table  1 
Consumption  of  Coal  by  Manufacturing  Industries,  1939 


Industrial  Area* 


Number  of 
Wage  Earners 


United  States 

New  York-Newark-Jersey  City  .  . . 
*Chicago 

Philadelphia-Camden 

Detroit 

Boston 

Pittsburgh 

Cleveland.  ■■■'■, 

*St.  Louis .* 

*Milwaukee 

*Minneapolis-St.  Paul 

Indianapolis 

Total,  Eleven  Districts 

Total,  Illinois  Coal  Market  Area 


7,886,567 


849,608 
483,593 
321,725 
311,332 
237,496 
191,903 
140,653 
126,831 

98,414 
.  48,608 

38,838 


2,849,001 
757,446 


142,787,289 


5,585,366 
13,615,216 
4,253,159 
7,329,380 
2,372,195 
16,594,696 
6,540,233 
1,971,454 
1,596,678 
632,207 
769,458 


61,260,042 
17,815,555 


Average 

Tons 
Consumed 
per  Worker 


28.1 
13.2 
23.5 
10.0 
86.5 
46.5 
15.5 
16.2 
13.0 


21.5 
23.5 


Source:    Census  of  Manufactures:    1939. 

*  Cities  in  Illinois  Coal  Market  Area. 

tt  This  term  signifies  an  area  having  as  its  nucleus  an  important  manufacturing  city  and  com- 
prising the  county  in  which  the  city  is  located,  together  with  any  adjoining  county  or  counties  in 
which  there  is  a  great  development  of  manufacturing  industry. 

b  Includes  1,788,246  tons  of  anthracite. 


Table  2 

Tons  of  Coal  (excluding  railroad  fuel)  Shipped  to  Consumer  States 

in  the  Illinois  Coal  Market  Area,  1945-1946 


Total  Shipments* 

Shipped  by  Rail 

Shipped  by  Water 

Consumer  State 

1946 

1945 

1946 

1945 

1946 

1945 

37,110,823 
12,456,486 
6,839,142 
1,364,254 
5,548,302 
6,467,394 
1,668,896 
305,469 
818,696 

40,261,246 
12,995,171 
7,228,858 
2,079,281 
5,587,158 
7,854,271 
2,116,632 
270,036 
819,462 

35,387,957 
3,754,143 
6,720,991 
1,364,254 
1,632,711 
6,467,394 
1,661,327 
93,573 
466,293 

38,200,066 
4,106,165 
7,122,466 
2,079,281 
1,676,937 
7,854,271 
2,108,321 
61,102 
470,687 

1,722,866 

8,702,343 

118,151 

2,061,180 
8,889,006 

106,392 

3,915,591 

3,910,221 

7,569 
211,896 
352,403 

8,311 
208,934 
348,775 

Total,  Nine  States 

72,579,462 

79,212,115 

57,548,643 

63,679,296 

15,030,819 

15,532,819 

Source:    Monthly  Coal  Distribution  Reports  (U.  S.  Bureau  of  Mines),  No.  172  (1945);  No.  184  (1946). 
8  Does  not  include  shipments  by  truck,  for  which  data  are  not  available. 


Long-term  Manufacturing  Opportunities  in  the  Upper  Mississippi  Valley 


Table  3 

Consumption  of  Fuel,  by  Kind  and  Quantity,  and  Cost  of  Fuel  and  of  Purchased  Electric  Energy,  in  Manufacturing 

Industries  in  the  Illinois  Coal  Market  Area,  by  States,  1919,  1929,  and  1939 


State  and  year 

Coal 
(net  tons) 

Coke 

(net  tons) 

Fuel  Oil 
(barrels) 

Gas 
(M  cu.  ft.) 

Total  Cost 
of  Fuel  and 

Purchased 
Electric 
Energy 

Total  Cost 
of  All  Fuels 

Illinois 

1939 

10,270,060 
20,315,068 
16,769,792 

1,132,933 
2,392,687 
2,171,655 

139,803 

636,569 

1,410,002 

1,626,162 
2,965,300 
2,529,596 

1,702,026 
3,322,325 
4,133,992 

162,436 
694,098 
920,908 

74,021 
232,890 
194,378 

31,737 
132,283 
99,950 

3,638,095 
5,794,275 
5,387,834 

2,705,566 
5,018,738 
3,903,043 

56,459 
103,287 
134,841 

12,299 
30,871 
60,523 

210,841 
464,538 
440,452 

80,135 
156,925 
194,758 

9,133 
99,877 
56,904 

636 
1,965 
1,498 

996 
5,341 
9,103 

83,535 
272,010 

542,938 

6,663,773 
11,151,489 
4,876,501 

232,800 
739,623 
573,958 

2,541,433 
3,056,301 
3,168,330 

778,292 
757,854 
292,661 

1,300,443 
2,401,441 
1,839,968 

151,363 

538,709 
430,064 

15,827 
18,451 
2,559 

19,962 
60,458 
73,454 

1,649,029 

1,628,872 

616,799 

160,962,119 

55,534,753 
3,557,698 

9,857,796 
374,054 
181,957 

25,966,766 
36,319,485 
13,022,876 

16,981,571 

14,384,487 
1,438,853 

19,880,166 
10,517,620 
1,658,684 

5,166,991 
108,010 
75,956 

141,240 
66,235 
6,451 

2,058,430 
853,379 
11,992 

2,130,951 
8,016,028 
1,270,809 

$  94,433,401 
163,925,284 
125,668,595 

11,858,637 
17,804,999 
14,060,998 

8,793,739 
14,428,979 
15,477,575 

16,159,612 
26,884,058 
22,311,828 

19,721,994 
30,082,748 
26,555,791 

4,044,618 
6,777,227 
7,030,388 

662,291 

1,112,891 

971,825 

1,086,789 
1,497,829 
1,079,684 

32,439,443 
46,545,165 

42,248,215 

$  63,431,740 

1929 

130,932,032 

1919 

Iowa 

1939 

6,824,085 

1929 

12,459,845 

1919 

Kansas 

1939 

5,667,459 

1929 

10,730,514 

1919 

Minnesota 

1939 

10,522,302 

1929 

20,790,065 

1919 

Missouri 

1939 

10,445,030 

1929 

19,201,640 

1919 

1939 

2,240,541 

1929 

4,766,025 

1919 

North  Dakota 

1939 

388,777 

1929 

888,194 

1919 

1939 

620,099 

1929 

1,082,387 

1919 

Wisconsin 

1939 

20,898,959 

1929 

34,122,235 

1919 

Source:    Census  of  Manufactures:    1939. 
*  Figures  not  available. 


University  of  Illinois 


Table  4 
Average  Value  per  Net  Ton  of  Coal  at  Mines,  1880-1946 


Anthracite      Bituminous 


1881.. 
1882.. 
1883.. 
1884. . 
1885.. 
1886.. 
1887.. 
1888.. 
1889.. 
1890. . 
1891.. 
1892.. 
1893.. 
1894. . 
1895.. 
1896. . 
1897.. 
1898.. 
1899. . 
1900. . 
1901.. 
1902.. 
1903.. 
1904. . 
1905.. 
1906. . 
1907.. 
1908. . 
1909. . 
1910.. 
1911.. 
1912.. 
1913.. 


«1.47 

2.01 

2.01 

2.01 

1.79 

2.00 

1.95 

2.01 

1.91 

1.44 

1.43 

1.46 

1.57 

1.59 

1.51 

1.41 

1.50 

1.51 

1.41 

1.46 

1.49 

1.67 

1.84 

2.04 

1.90 

1.83 

1.85 

1.91 

1.90 

1.84 

1.90 

1.94 

2.11 

2.13 

1.12 
1.07 
0.94 


1.00 
0.99 
0.99 
0.99 
0.99 
0.96 
0.91 
0.86 
0.83 
0.81 
0.80 
0.87 
1.04 
1.05 
1.12 
1.24 
1.10 
1.06 
1.11 
1.14 
1.12 
1.07 
1.12 
1.11 
1.15 
1.18 


1914.. 
1915.. 
1916.. 
1917.. 
1918.. 
1919.. 
1920. . 
1921.. 
1922.. 
1923.. 
1924. . 
1925.. 
1926.. 
1927.. 
1928.. 
1929.. 
1930.. 
1931.. 
1932.. 
1933.. 
1934. . 
1935.. 
1936. . 
1937.. 
1938.. 
1939. . 
1940. . 
1941.. 
1942.. 
1943.. 
1944. . 
1945.. 
1946. . 


52.07 
2.07 
2.30 
2.85 
3.40 
4.14 
4.85 
5.00 
5.01 
5.43 
5.43 
5.30 
5.62 
5.26 
5.22 
5.22 
5.11 
4.97 
4.46 
4.17 
4.27 
4.03 
4.16 
3.81 
3.92 
3.64 
3.99 
4.26 
4.50 
5.06 
5.57 
5.90 
6.68 


51.17 
1.13 
1.32 
2.26 
2.58 
2.49 
3.75 
2.89 
3.02 
2.68 
2.20 
2.04 
2.06 
1.99 
1.86 
1.78 
1.70 
1.54 
1.31 
1.34 
1.75 
1.77 
1.76 
1.94" 
1.95 
1.84 
1.91 
2.19 
2.36 
2.69 
2.92 
3.06 
3.44