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By Hiroshi Oikawa, A. G. Guy

Recent experimental evidence has shown that it is often incorrect to neglect the reactions occurring at an interface with respect to the diffusion reactions. By introducing reaction-rate constants and k for the transfer of components 1 and 2 between the a and b phases, a phenomenological description has been devised for the coupled processes of diffusion and in-terfacial reaction. An illustrative example has been analyzed with the aid of a suitable computer program. The results indicate that for kab values on the order of 10'1 cm per sec and Ð values of about 10¯10 sq cm per sec, the interfacial reactions are significant during the first 10 2 to l0 6 sec of a diffusion experiment. Among the observable effects of the interfacial reactions in this case appear to be the burying Kirkendall markers and an anomaly in the initial shifting of these markers. THE study of diffusion between two phases is especially important because of its direct connection to phase transformations. For example, the transformation of austenite to ferrite involves diffusion in the a and ý phases and also an interfacial reaction (trans formation) at the a/? interface. If ferrite and aus-tenite are the two members in a diffusion couple, the same two reactions occur during the diffusion process. The numerical values obtained for the diffusion coefficients and interfacial-reaction constants from diffusion experiments can then be employed to predict phase-transformation behavior. Refinement of the calculations of phase transformation is also suggested by the present method for treating two-phase diffusion. In the recent paper by Nolfi et al.' only the solute com ponent is considered in the interfacial reaction accompanying a phase transformation. The present analysis demonstrates that both components must be considered. It is generally recognized that reactions of some kind must occur at the interface in a two-phase diffusion couple, but usually it is assumed that the interface reaction occurs so rapidly that its effect on the overall process is unobservable because the slower diffusion process determines the kinetics of the process. However, Seith and Heumann 2 pointed out that effects of the interfacial reaction should always occur in the early stages of diffusion, and recently Eifert et al. 3 have shown that interfacial reactions influence the composition and motion of the interface in a/ß Al-Cu diffusion couples during the entire course of prolonged, high-temperature treatments. A general procedure for handling the combined processes of interfacial reaction and diffusion in a binary, two-phase system is to introduce kinetic coefficients for the interface reactions and to develop the system of equations governing the interlinked processes of diffusion and interface reaction. The resulting equations, although not amenable to solution in closed form, can be usefully manipulated by a digital computer. INTERFACIAL REACTIONS IN TWO-PHASE DIFFUSION Consider the general case of diffusion between two solid solutions, a and ß, which are adjacent phases in a binary system, Fig. 1. Two semiinfinite bars having compositions c1 and c0ß are jointed at x = 0. If concentrations are expressed in volume fraction,4

Jan 1, 1970

GERARD B. ROSENBLATT,* Salt Lake City, Utah (written discussion?). -Mr. Eschholz attacks this problem from what appears to me to be the proper angle. He does not limit his viewpoint to the attainment of ideal results under conditions approximating laboratory practice, but rather discusses actual commercial conditions that must be maintained in large-scale operations, where continuity of service without expert attendance is one of the prime considerations. I am of the opinion that Mr. Eschholz has not given sufficient consideration to the commercial possibilities of what he describes as System B, the use of low-tension a.-c. industrial or lighting circuits for supplying power to Cottrell treaters through the medium of a step-up transformer and a synchronously driven rectifier, without the use of motor-generators. It is true that, to date, few installations on a large scale have used this system, but I believe that when the conditions of power supply are suitable, and when proper precautions are taken, this system can be used successfully and to advantage. where at present it is considered necessary to use motor-generator sets. In the average commercial Cottrell installation of any size, the motor-generator set is used for two purposes: (1) To isolate the industrial supply circuit from the Cottrell circuit. (2) To. afford, an easily operated and smooth system of control for the Cottrell treater voltage With proper engineering, both of these objects can be accomplished without the use of motor-generator sets.

Jan 10, 1918

Frank L. Bader has been appointed to the sales staff of Lehigh Navigation Coal Co. in the Philadelphia territory. H. C. Burrell, former coordinator of raw materials, Pittsburgh, Penna., has been made manager of raw materials for Columbia-Geneva Div. of U. S. Steel Co., San Francisco. J. H. Cazier has resigned as general superintendent of Bagdad Copper Corp., Bagdad, Ariz., to devote full time with E. A. Scholz to the operation of the Copper King, Phillips and Black Pearl Mines near Bagdad. They have operated the Copper King zinc mine for more than two years.. Production started from the Black Pearl and Phillips tungsten mines during the past year. Robert T. Chapman has resigned from Reynolds Mining Corp. to join Westmoreland Manganese Corp. as general superintendent. Annan Cook, with Kennecott Copper Corp.'s exploration dept. for the past three years, has been appointed district geologist for the eastern states.

Jan 1, 1952

By Agustin S. Segura, Luis G. Gutierrez

Foreign investment in Mexico, particularly of American capital, has increased steadily since 1940. At present, however, these investments are less important to the Mexican economy than in earlier periods. In the last few years, local or Mexican capital has participated in most American investments in Mexico with the encouragement of the Mexican Government. Foreign investment in a wide variety of industrial activities has gone up in the last decade, placing mining investments in second place. This growth is the result of the Mexican Government's favorable attitude toward industrial expansion. The process has been encouraged through tax exemption on infant industry, through customs protection, and through other incentives.

Jan 11, 1959

By Jean A. Andre

In 1969 "Société des Mines et Fonderies de Zinc de la Vieille-Montagne" produced 221,000 tons zinc ingots and 22,000 tons zinc dust, thus rating highest on the world's zinc producer list. The Company's plant at Balen, Belgium, with an output of 135,000 tons electrolytic zinc is the most important one of this group; it is an integrated metallurgical zinc and lead unit with recovery of most by-products. The present paper describes the zinc production facilities. The roasting section includes four fluid bed roasters (total concentrates charged: 740 tpd) and two sulfuric acid having a corresponding capacity. Calcine is leached in a fully automated plant by a two-step continuous process. Leaching residues, mixed with lead furnace slag, are treated in a shaft furnace. The recovered zinc fume is leached separately. In the near future, the leaching residues are to be treated by a wet process, developed in the Company's own laboratories. Purification of solutions is accomplished in two steps: antimony and zinc dust are added in the first one, only zinc dust in the second one for removal of cadmium. Electrolysis cells are partly of a conventional type. A new type of cell configuration was put onstream in October, 1969, planned output 60,000 tpy. Main features of the new cell rooms are the fully automatic pulling, stripping and replacing of the jumbo-size cathodes (immersed area 2.6 m2). Zinc cathodes are remelted in induction furnaces followed by in-line automatic casting and stacking machines.

Jan 1, 1970

By J. S. UNGER

A LARGE proportion of the coke used is made in the by-product oven from the high-volatile coals mined in the adjacent district. At the beginning it was feared good by-product blast-furnace coke could not be made with our coals. By experimenting with various mixtures of coals, coking time, oven design, and coking temperatures, much has already been accomplished. The results show that a hard, dense coke, not easily broken by handling, can be produced. In its present state it is not all that could be desired, but it is being constantly improved. Such coke has been used alone as the fuel on several of the blast furnaces producing the highest daily production in the Pittsburgh district. Many of the coals in the Pittsburgh district when coked in the by-product oven yield a gas which contains a high percentage of sulfur, which is objection- able for many metallurgical operations. As this fuel is gradually replacing the ideal fuel, natural gas, which is becoming less plentiful, studies are being made of the best methods for purification. Some metallurgists believe sulfur to be a very injurious element in steel. Recent investigations by Government bureaus, scientific bodies and private firms, seem to indicate that a reasonable amount of sulfur may exist in steel without detriment. Without wishing to provoke any metallurgical controversy on the subject of sulfur, the fact remains that the daily purification

Jan 1, 1926

R. H. Sweetser, Sault Ste. Marie, Ont. (communication to the Secretary*):—The recent work of furnace No. 1 of The Algoma Steel .Co., at Sault Ste. Marie, Ontario, using for fuel, first all charcoal, then a mixture of charcoal and coke, and finally all coke, upsets the estimates given by Mr. Hall in the last two paragraphs of his interesting paper. Furnace No. 1 was built for a charcoal-furnace, and it was run on charcoal fuel from March 6 until July 9, 1905; then, for a week, a mixture of charcoal and coke was used, and, since then, coke alone has been the only fuel. It is to be regretted that at no time, during the run on charcoal, was there enough charcoal on hand and " in sight" to warrant blowing the furnace as hard as it should have been blown. During April and May the supply of charcoal limited the amount of blast to about 8,000 cu. ft. of air per min.; in June, to about 8,900 cubic feet. For a few days in July about 10,000 cu. ft. were blown, and then the maximum daily output, 173 tons (2,240 lb.), was reached. At all times the quality of the charcoal was poor, having been made from wood cut from three to four years before. Doubtless this furnace could have produced 200 tons of iron per day, even with this quality of charcoal, provided the supply had been sufficient; and with

Jan 1, 1906

By H. Papazian, Robert A. Lad

SINCE it can be shown both theoretically'' : and experimentally that disordered Cu3Au has a greater internal energy than the ordered alloy, it might be expected that its chemical reactivity would be greater. Experiments were initiated' to test this hypothesis. This note will describe some recent results obtained in the study of the rates of corrosion of ordered and disordered polycrystalline Cu3Au by aqueous FeCl., The work of Robertson' has indicated that the attack by such solutions is intergran-ular and highly orientation dependent. It was of interest to see whether the order-disorder effect was great enough to overcome the variations from specimen to specimen which would arise from this type of attack. The polycrystalline alloy specimens (0.020 in. wire, 1¾ in. long) were preannealed in ½ atm H, at 700°C for 2 hr. The subsequent heat treatments to produce order and disorder were performed in M atm He. Disordered specimens were obtained by heating at 450°C for 2 hr and quenching in water. Ordered specimens were produced by heating for 2 hr at 450°, furnace cooling to 380°, and soaking at 380°C for 80 to 90 hr. Room temperature was reached by cooling to 150" at a rate never exceeding 7" per hr, and water quenching from 150°C. The specimens so produced exhibited electrical resistivities characteristic of the two states; of the order of 11.27x10 ohm-cm for the disordered, and 4.28x10 ohm-cm for the ordered specimens. The corrosion rates were studied at 30°C in ferric chloride solutions of several concentrations (?,¼, 1.5, and 1 molar). The specimens were attached to a stirrer during the tests. Tests were interrupted at intervals, and the specimen weight change was determined after washing and drying. Analysis of the solutions showed that the attack was limited to the copper. The higher corrosion rate for the disordered alloy, as illustrated in Fig. l, is typical of the results obtained. The effect of variation in ferric chloride concentrations is indicated in Table I for typical specimens. The variations in the ratio of reactivity for disordered and ordered specimens at the different concentrations are within experimental error, and the best value is estimated to be near 1.4. The experimental variation was due in part to the mode of attack, as mentioned, and in part to the fact that films were formed on the specimens under some conditions. Electron diffraction patterns of the films were very complex and indicated the presence of metallic iron, as did chemical analysis. In an attempt to eliminate the difficulties arising from the mechanism of attack, single crystal specimens were used. A greater reaction rate was again measured for the disordered specimens, but the reproduci-bility was no better than that for the polycrystalline metal. This would indicate that film formation was primarily responsible. It was concluded that the reaction with aqueous ferric chloride served to demonstrate that the reactivity of disordered Cu3Au is greater than that of the ordered alloy. However, the difficulties with film formation did not permit determinations of a precision great enough to warrant extension of the study to partially ordered alloy systems.

Jan 1, 1957

By J. H. Brophy, M. H. Kamdar, J. Wulff

A constitutional diagram for the Ta-W-Re alloy system is presented. Rhenium dissolves in the complete range of solid solutions between tungsten and tantalum up to 48 wt pct in tantalum 'to about 30 wt pct in tungsten. Intermediate x and u phases only are found. X-ray diffraction and fluorescence, metallography and melting-point measurements were employed. THE constitution diagram of ternary alloys of tungsten, tantalum, and rhenium for temperatures above 1000°C is reported in this paper. Alloys in this system rich in tantalum and tungsten are of interest for high-temperature applications, and those rich in rhenium for electronic applications. No ternary phase diagram appears to be available in the literature. The three-component binary diagrams have been previously established1-3 and the present ternary data are consistent with these. EXPERIMENTAL TECHNIQUES Commercially pure tantalum (99.7 pct), rhenium (99.99 pet), and tungsten (99.9 or 99.95 pct) powders were purchased from Fansteel Metallurgical Corp., Chase Brass and Copper Co., and Fansteel or Westinghouse Electric Corp., respectively. These powders were pressed without binder and arc-melted under helium. The preparatory and analytical techniques employed were identical to those used for the Ta-Re system investigation carried out in this laboratory.324 These included X-ray diffraction and metallographic phase identification, X-ray fluorescent and wet chemical analyses, solidus determinations and heat treatments in a resistance-heated tantalum-filament vacuum furnace. For microstructural examinations standard mechanical polishing techniques were used through diamond laps. Polished speciments of all compositions were etched by swabbing with 4 parts HI?, 4 parts HNO3, and 1 part H20. Since the microstruc-tures of alloys containing one or two phases closely resembled their counterparts in the respective binary systems, typical examples are omitted in this presentation. In all the alloys examined, it was possible to observe the number of phases present. Particularly when there were small amounts of one phase involved, it was possible to identify it only by a combined conclusion based on X-ray diffraction, position of an alloy in a composition series, and the phase rule. A total of 100 different alloy compositions was arc-melted and studied in the as-cast condition metallographically and by X-ray diffraction. Specimens of each of these compositions were heat-treated at 2680, 2530, and 2020°C for 1, 2, and 4 hr, respectively. Those which were treated at 2020 were given a preliminary homogenization treatment at 2500°C for 1 hr. Specimens of 25 alloys were heat-treated at 1200o C for 168 hr. Solidus temperature measurements were made by the detection of incipient melting in eighteen alloy compositions. The metallographic and X-ray diffraction results are summarized in Table I. Graphically, this information appears in the isothermal plots of Figs. 2 and 3. Within the accuracy of the experimental methods, two such plots are sufficient to locate these data, since the results for 1200°C were similar to 2020 and those at 2530 resembled 2680

Jan 1, 1962

By AIME AIME

TUESDAY afternoon the annual meeting was devoted to a general session, in the auditorium, on production control. George Otis Smith presided and in opening the meeting recalled that the session in 1920 on the stabilization of the coal industry was the first time this subject had been discussed by Institute members in a general session and then introduced Carl Snyder, of the Federal Reserve Bank of New York, who spoke on "Long-time Growth and the Factors In Its Variations." He spoke without notes and a full presentation of his views must be deferred until the stenographer's report is available. He said that of the total production some 80 to 90 per cent represents goods for consumption and the other 20 to 10 per cent for construction. He discussed various indices of production, concluding that bank clearings are the best, and showed by charts that when they are plotted, allowing for various disturbing factors, they are seen to increase quite regularly at the rate of about 4 per cent per year. The production curve rises at only 3y2 per cent per year, because agricultural production does not in- crease as fast as manufacturing postal revenues in- crease at the rate of 5 per cent per year while the use of electricity increases twice as fast.

Jan 1, 1929

By Robert E. Delavault, Harry V. Warren

Circumstances determine whether it is better to make analyses in the field or in a permanent laboratory. The rubeanic acid test described in this article has been designed primarily for field use: it is simple and virtually foolproof, and it requires a minimum of field kit.* It is sensitive, easily detecting 4 ppm of readily extractable copper in a soil. This is by no means a quantitative test, but it is accurate enough to provide a valuable indicator of copper anomalous areas for both prospectors and field geologists. The easiest method for detecting metal deposits that do not produce visible float or stains is to make a simple chemical test for the metal in overlying soil, or in the silt of a stream that may have picked up metal farther upstream.

Jan 11, 1958

By H. Baldauf, H. Schubert

The structure of flotation reagents is important for their adsorption on mineral surfaces and thus for their flotation effectiveness. The influence of the structure of organic depressants on the flotation of fluorite and barite with anionic and cationic collectors was investigated using a modified Hallimond microflotation cell. In addition, adsorption, desorption, and electrokinetic results were employed to further elucidate the role and the correlation of the structural parameters for adsorption and the depressing effect. As hydrophilic reagents, different aliphatic and aromatic compounds capable of forming chelates with alkaline earth materials were used. For the depressing effect, the kind, number, and position of the polar groups in the molecule, as well as the structure of the reagent films play decisive roles.

Jan 1, 1980

By W. P. Sykes

TUNGSTEN serves mankind in two major roles. The first of these is represented by the tungsten filament of the incandescent electric lamp, a common article of commerce. In the field of hard alloys it plays its second substantial part. A fortunate combination of physical properties in this metal ac- counts for its efficient service as a source of illumination. Tungsten melts at about 3400°C, has a relatively low vapor pressure and at the same time sufficient strength, both hot and cold, to serve satisfactorily as filaments, which may range in diameter from 0.060 to 0.0005 in. In the early days of the incandescent lamp, the pioneers realized the importance of using a substance of high melting point for the source of light. The metals osmium (mp approx. 2700°C) and tantalum (mp approx. 2850°C) were both employed to some extent. Tantalum actually attained some commercial importance in this field because it could be drawn into small wires of appreciable length. DUCTILE TUNGSTEN WIRE Before the year 1908, tungsten was considered a nonductile metal, since no one had succeeded in overcoming the brittleness so typical of the unworked metal at room temperature. The methods employed today in producing ductile tungsten wire were developed over a period of years. The process was largely determined by the exceedingly high temperature required to melt this metal. Even today the difficulties involved in producing an appreciable quantity of pure

Jan 1, 1953

R. W. Raymond, New Pork City: It seems questionable to me whether Mr. Mezger's identification of the rock-structure he describes, as the Augengneiss of previous authors, is warranted by the definitions given by them. Naumann (1854)t describes Augengneiss as a porphyry-like variety, " which has assumed, by reason of single large kernels or granular concre-

Jan 1, 1896

By Eugene S. Perry

The most outstanding event in oil and gas development in Montana during 1936 was the discovery of oil in the Baker-Glendive gas field, in the extreme eastern part of the state. Other notable achievements were small extensions in the Cut Bank oil field; continued favorable results of acidization in the Kevin-Sunburst oil field; and the discovery of oil and gas in commercial quantities about 20 miles southwest of Billings, on what is known as the Mosser dome. Several wildcat wells were drilled. For the coming year of 1937, it is anticipated that the main activities will be confined to drilling in or near known fields. During 1936 Montana had seven fields producing oil, but over 95 per cent of oil production came from four fields, which in order of importance are: Cut Bank, Kevin-Sunburst, Cat Creek and Pondera. Total production for the state was 5,850,893 bbl., which is 1,251,761 bbl. more than the total for 1935. Natural gas was produced and marketed from eight fields, most important being Cut Bank, Baker-Glendive, Kevin-Sunburst and Dry Creek. These four fields accounted for over 85 per cent of total state gas production, which is slightly greater than the 1935 production of nearly 18 billion cubic feet. Increase in gas consumption is due in part to increase in smelter operation. More detailed information pertaining to the various fields is given in Table 1. In the Baker-Glendive field a test 8186 ft. deep, 15 miles southeast of Baker, was completed by the Montana-Dakota Utilities Co. in 1936. The first gas-bearing sandstone (Judith Hiver horizon, Upper Cretaceous) was found at a depth of 528 ft., and a second sand at 1167 ft. Sandstones of the Dakota formation, in which occurred water, were found from 3724 to 3853 ft. White sandstone correlated with the Tensleep (Minnelusa) formation of Pennsylvanian age was found from 5631 to 5751 ft. deep. The lower 1900 ft. of the well (below 6278 ft.) was essentially in limestone and dolomite, and information on correlation of formations in this mass of sediments is not available at this time. The upper portion of this part of the well contained much anhydrite. Cherty and dolomitic limestone below 7000 ft. may be equivalent to limestones of the Madison formation. The thickness of strata beneath the Dakota formation was

Jan 1, 1937

Held at San Francisco, Cal., Thursday to Sunday, Sept. 16 to 19, 1915 COMMITTEES Arrangements CHARLES W. MERRILL, Chairman EDWARD H. BENJAMIIN H. C. HOOVER FRED `V. BRADLEY W. C. RALSTON ABBOT A. HANKS G. H. CLEVENGER Excursion and Accommodations ABBOT A. HANKS, Chairman E. T. BLAKE R. H. BEDFORD C. G. DENNIS FREDERICK BRADSHAW C. E. GRUNSKY, JR. EDMUND JUESSEN ARTHUR B. FOOTE F. A. KEITH GEORGE 0. BRADLEY CHARLES JANIN E. N. ENGELHARDT R. S. HASELTINE N. CLEAVELAND

Jan 12, 1915

By L. H. Simons, H. H. Spain

I NT RODUCTION Theory indicates that linear water-floods should exhibit scaling and stabilization properties in both oil-wet and water-wet porous media'. Experimental verification of these proper-ties in oil-wet media was obtained some time ago', and more recently, Perkins', employing a high permeability unconsoli dated sand and a low oil-to-water viscosity ratio, has obtained flooding data in a water-wet medium which follow the pattern of scaling and stabilization. Also, Root and Calhoun3 have found similar trends in the displacement of gas by liquids from unconsolidated sands. In general, however, the experimen-tal evidence appears still somewhat conflicting since scaling and stabilization of water floods in water-wet media has not been observed in most of the studies to date'.".'. The purpose of this paper is to provide a more comprehensive picture of waterflood behavior in water-wet media and to corroborate the validity of the scaling and stabiliza-tion concepts. The need for differentiating between the intrinsic nature of water-oil displacements inside a porous medium and perturbating secondary end effects is discussed, pertinent experimental procedures are outlined and the results of flooding tests conducted at low and at high oil-to-water viscosity ratios on con- solidated, water-wet Alundum cores are analyzed. END EFFECTS IN WATER-WET MEDIA Outlet End Effects The peculiar feature of the outlet end effect in water-wet cores is that it not only results in an excessive wetting phase saturation at the outflow face,'.' but that it also retards the moment of water breakthrough: i.e., causes an undue delay in the appearance of water in the produced effluent. Conditions existing in a water-wet core when water first arrives at the outflow face are schematically shown in Fig. 1. At this flooding stage the saturation distribution, Fig. la, has not yet been distorted by the outlet end effect. A water-invaded pore at the outlet core face, opening into the oil-filled void space between the end of the core and the end plate of the flooding cell, is illustrated in Fig. lb. The curvature of the water-oil interface is concave toward the outlet, and the pressure on the water side of the interface is lower than on the oil side by an amount equal to a certain capillary pressure (Fig. lc). Before the water (of this particular pore) can be produced from the core, it is apparent that the pressure in the water phase must exceed that in the oil outside the core. Accordingly. when water first reaches the outlet face, it will not leave the core but will accumulate inside, and only oil will be produced. Eventually, as the water injection is continued. sufficient pressure is built up in the water to reverse the curvature of the interfaces in the outlet pores, and only then will water be produced from the core. This stage, illustrated in Fig. 2. corresponds to the conventional "water breakthrough" observed in flooding experiments. For purposes of discussion, it is convenient to distinguish between the flooding stage at which water first arrives at the outlet face of a core (Fig. 1) and the stage at which water is first produced from the core ( Fig. 2). The former will be referred to as "water arrival" and the latter water breakthrough. In oil-wet media

[Chairman ZAY JEFFRIES, Vice-chairman S. SKOWRONSKI, Chairman WILLIAM M, CORSE, Secretary Executive Committee J. R. FREEMAN, JR., Local Section G. E. JOHNSON R. S. ARCHER, Non-ferrous Data Sheets P. D. MERICA EDGAR C. BAIN, Journal Committee L. W. SPRING SAM TOUR, Papers Committee F. L. WOLF H. C. JENNISON, Membership Committee Local Section Committee J. R. FREEMAN, JR., Chairman R. J. ANDERSON, Cincinnati R L. DOWDELL, Minneapolis R. S. WILLIAMS, Boston G. H. CLAMER, Philadelphia W. A. SCHEUCH, Chicago R. F, Woon, New York Papers Committee S. SKOWRONSKI, Chairman F. H. DIx, JR.-Aluminum E. R. DARBY-Bronze C. S. WITH ERELL-Copper H. A. BEDWORTH-Brass W. K. FRANK-BRONZE F. W. HARRIS-Copper R. L. SUHL-Nickel H. M. ST. JOHN--Foundry Metallurgy R. S. DEAN-Theoretical Metallurgy]

Jan 1, 1928

Jan 1, 1959

Discussion of the paper of PHILIP W. HENRY, presented at the New York meeting, February, 1915, and printed in Bulletin No. 97, January, 1915, pp. 23 to 30. C. ,E. GRUNSKY, JR., San Francisco, Cal. (communication to the Secret ary*).-The difference of opinion of engineers on the subject of depreciation is justified, to some, extent, by the many viewpoints from which such a subject can be considered when applied to properties of widely differing physical characteristics. Mr. Henry takes up the subject of depreciation as applied alone to oil properties, and in doing so makes a clear distinction between amortization and the repair or renewal requirement. After carefully reading the paper the purpose of its author in suggesting a "depreciation" reserve or fund to keep the property at a constant value does not seem clear. As shown by Mr. Henry, the depreciation element as compared with the operating expense per gallon of oil is very large because of the comparatively short life of the oil properties, and it is also evident that such a "depreciation" fund would in a short time contain a very large amount of money. It seems desirable and permissible in income-tax matters to take into account the depreciation of property and to separate from the income such money as is necessary to amortize the invested capital to an extent warranted by the depreciation. However, it does not seem either necessary or desirable to create a large fund which will in time approximate the entire invested capital and which may he invested by the directors, as Mr. Henry suggests, "in the property itself or in outside securities." This method seems cumberome and liable to offer in the reinvestment of such a fund temptations to a directorate that might show more devotion to its own interests than that of the stockholders. A reserve fund is very frequently desirable in mining and oil operations, but to keep up a fund of this magnitude or to reinvest it in outside securities does not seem desirable from a stockholders' standpoint. The. money withdrawn from the receipts to be placed in the depreciation fund (not including replacements and the drilling of new wells necessary to keep up the productiveness) should he returned to the stockholders of the company, not as dividends, but as an amortization of the invested capital.

Jan 5, 1915