RAW MATERIALS include objects, classified with respect to their place in trade and industry, rather than with respect to their physical character. An object that may be classed with raw materials at one time may become a finished product at another, or vice versa. Camphor and indigo were formerly classed as raw materials in the chemical industry. Since the invention of the synthetic processes for their manufacture they have come to be classed as finished products. Coal tar, formerly a finished product of the distillation process, has now come to be the raw material for a great variety of chemical manufactures.
modern industry developed in many countries after the middle of the 19th century, notably in the United States and Germany, France, Belgium, Italy and Japan, the principal raw materials became, as it were, an inter national pool, distributed automatically among the consuming nations in proportions determined by what may be described in general terms as relative power of economic attraction ; this power being based on a number of factors of fluctuating value, of which the chief are: (I) facilities for assembling materials in large masses ; (2) facilities for distributing the manufactured product (3) cheapness of fuel, or other sources of power, especially hydro electric ; (4) cheapness and above all efficiency of labour; (5) abundant liquid financial resources for carrying raw material stocks and finished products on their way to the consumer.
The predominance of England as a market for raw materials in the first three-quarters of the 19th century rested upon a relative superiority in all these factors. Gradually other nations gained upon England in one factor or another; Germany in fuel and labour, especially the highly trained labour of the chemical industries; the United States in fuel, particular kinds of labour, financial power; Italy and Switzerland in hydro-electric power. In general, it may be said that the tend encies of the 5o years before the outbreak of the World War were in the direction of reducing the lead of the older industrial countries and sections in the power to attract raw materials. The
disturbances of trade resulting from the war forced many coun tries to develop independent manufacturing facilities, with the consequence that the claimants upon the international pool of raw materials have become more numerous and more nearly on an even footing. Under the regime of virtual freedom the trade in raw materials underwent an immense development. The demands of industry produced a great expansion in the production of raw materials, and this expansion, often outrunning demand, reacted upon industry and stimulated its development.
In rare instances the prog ress of science and invention has freed industry from its depend ence on the raw materials that figure in world trade. Scientific and industrial progress has steadily increased the number of raw materials in trade and the volume consumed.
At the same time technical progress applied to the production of raw materials themselves has greatly extended the range of possible sources. Prior to the introduction of the flotation process in copper extraction, the minimum paying ore was about 3%; less than 1% is profitable now. Electric concentration has made available magnetic iron ores formerly regarded as too lean for working. The progress of plant-breeding is greatly extending the possibility of supplementing the limited natural production of long-staple cotton. The development of effective systems of plantation management has opened the whole tropical belt to the production of rubber, formerly confined to limited areas in the tropical forests. Moreover, chemical science progresses stead ily toward a stage in which an increasing number of raw materials may be produced synthetically.
The growth of industry and wealth has further affected the demand for raw materials by raising the standard of consumption. To this influence must be ascribed not only such striking instances as increase in the de mand for raw silk, and the finer grades of wool and cotton, but also the growth in the consumption of a long array of articles of common use.