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By T. F. Witherbee

Discussion of Mr. Baker's paper, read at the Lake Superior Meeting, September, 1904. MR. T. F. WITHERBEE, Durango, Mexico (communication to the Secretary*) : Mr. Baker's paper is very instructive in that it shows how furnace-derangements sometimes originate from apparently slight causes. In 1896 a similar burning through of the lining occurred at the Mayville furnace of the Northwestern Iron Co., Mayville, Wis., in exactly 38 days from the time the furnace was blown in. At that time I attributed it to the fact that the bell was carried several inches to the front side of the furnace, the length of the versed side of the arc described by the lever, thus dumping a little more of the charge on the back side, which made the front side of the furnace-charge more open and consequently increased the circulation of the furnace gases through it. After reading Mr. Baker's description, I believe that possibly a little more ore was charged on the back side of the hopper, due to the fact that it was nearest to the elevator. This unequal charging, however, was unconsciously done, as the fillers were both honest and faithful. The illustration of the burned lining of Furnace No. 1, given in Fig. - of Mr. Baker's paper answers very well for the Mayville furnace. It shows that in both cases the destruction of the lining was largely due to faulty construction, in that there were no cooling-plates in the angle of the bosh and in one or two courses of brick above it, where I believe they are-more in demand than anywhere else in the furnace. The presence of these cooling-plates at the angle of the bosh would have obliged the current of the hot gases to turn the corner and would have prevented them from following the angle of the bosh com¬pletely through the lining and shell.

Mar 1, 1905

By Hiram B. Woon

Uranium ore deposits in the Lisbon Valley area are in an arcuate belt, 15 miles long by one-half-mile wide, on the southwest flank of the Lisbon Valley anticline. They range in size from 500 to 1,500,000 tons and by mid-1965 had yielded 6,147,000 tons containing 48,530,000 pounds of U3O8. Ore bodies average 6 feet thick, are tabular, amoeba-shaped masses, concordant to the bedding, and are in the thickest, lowest sandstone unit of the Moss Back Member of the Chinle Formation of Triassic age. The host rock is predominantly a fluviatile, calcareous, fine-grained to conglomeratic sandstone. Uraninite, the principal ore mineral, fills the pores in the sandstone and partly replaces sand grains and fossil wood fragments. During Late Permian and Early Triassic time pre-Chinle Formations were arched to form the ancestral Permian anticline. Moss Back streams truncated Moenkopi and Cutler beds which capped the ancestral anticline and then covered it with fluviatile elastics, which were subsequently covered by thousands of feet of Triassic, Jurassic, and Cretaceous sediments. Uranium, probably derived from the Chinle Formation by diagenetic processes, was transported in connate ground waters, was moved by compaction or hydrostatic forces, and was deposited under reducing conditions. Uranium was emplaced around the crest of the ancestral anticline, prior to the Laramide orogeny. During the orogeny, the Tertiary-Lisbon valley anticline was super induced on the Permian anticline and, penecontemporaneous with uplift, was faulted parallel to its longitudinal axis. The Big Indian ore belt on the southwest flank footwall block was elevated to approximately its present position, and the northeast flank hanging wall block was elevated only slightly. An extension of the Big Indian ore belt around the northeast flank of the ancestral Permian anticline may exist in the Moss Back sandstone in the downthrown block northeast of the Lisbon Valley fault.

Jan 1, 1968

By Charles L. Elliot

Data for mining applications of geophysical activity in the Free World in 1963 has been collected by the Committee for Geophysical Activity of the Society of Exploration Geophysicists. This information has been made available to the AIME and is published here in abstract form with the kind permission of the SEG. The data is based or1 244 responses (51%) to the questionnaires circulated among 475 worldwide organizations engaged in mining geophysical operations and or research. It is believed that the data is a realistic appraisal of actual world geophysical activity.

Jan 8, 1964

NEW YORK SECTION J. E. JOHNSON, JR., Chairman EDGAR RICKARD, Vice Chairman D. M. LIDDELL, Secretary, 7 Wall St., New York, N. Y. C. A. BOHN, Treasurer JOHN V. N. DORR LEWIS W.. FRANCIS The following minute was unanimously passed at a meeting of the NEW YORK SECTION AMERICAN INSTITUTE OF MINING ENGINEERS held on the evening of June 6, 1917, two regular meetings having been adjourned by unanimous consent until this date out of respect to the memory of the late Chairman of the Section. Minute The death of our beloved fellow member DR. DAVID H. BROWNE one of the foremost metallurgists and one of the most brilliant and original thinkers in the profession of mining engineers, the chairman for the past two years of this section, has caused throughout a wide circle of

Jan 9, 1917

By Frederick T. Williams

THE purpose of this paper is to discuss the relative merits of the large 31/8 in. machine and the small 21/4-in. tappett machine in driving development-headings ; and although the . data here presented were obtained from cross-cut headings alone, experience has shown that the results are equally true in drifting, raising and winning. Recently we drove two parallel cross-cuts through the same formation, using a 3k-in. machine at the breast of one cross-cut., and a 2k-in. machine of the same make at the breast of the other. The results of this work afforded an ideal comparison, since in both cases the headings were advanced through rock practically of the same hardness and breaking-properties ; the amount of sludging was equal, and there was no difference in the condition of the steel or the machines, in the air-pressure or in the experience of the operating-crews. Some operators in the Cripple Creek district contend that there is ground which cannot be handled with the small machine, the holes being too small to contain enough powder to pull the ground, etc. The results obtained in working the property of the Portland Gold Mining Co., however, show that the ground worked by them does not fall in this class. During a period of two years there have been driven, with the small machine, 4 miles and 308 ft. of development-headings, through a diversity of ground, including Pike's Peak granite (a coarsely porphyritic type of granite), highly indurated, andesitic or phonolytic breccia, true massive andesite, trachytic phonolyte, tuffas, and along dikes of decomposed basalt and hard phonolyte; in every instance a satisfactory record was made. The headings here described were driven through highly indurated, andesitic breccia, having a hardness of from 5.2 to 7.2

Mar 1, 1906

By M. L. Requa

EVERY forward step in civilization brings with it an increase in population and increasing demand for raw materials. Modern civilization, because of its industrial development, depends more and more for its well-being on ample supplies of raw materials; the higher the type of that civilization, the greater its dependence. No fact is more obvious than that the raw materials should be put to use with greatest prudence and efficiency. National life is not a matter of a decade or a century. Conservation is no longer a matter for political discussion; it is a vital element in the future welfare of all nations. Unfortunately, to the minds of many, conservation means the locking up of natural resources, their arbitrary withdrawal, bringing about, in short, a condition of industrial stagnation. This has occurred in past centuries through misdirected governmental effort. Two eminent engineers have variously defined conservation as follows:

Jan 1, 1925

[ ] TUNNELS TO BINS. Originally designed for tunnel work, the strong lightweight liner plates used to construct this 30-ft diameter, 31-ft high, aggregate storage bin have several advantages. Bins and conveyor to tunnels can be quickly erected in any season, for permanent service, or to be salvaged and reused. Armco Steel Corp. (16) ROLLER CHAIN: Engineering Data Book No. 2457 published by Link-Belt Co. is a comprehensive 148-page volume on roller chain and its application. Detailed engineering information covers installation, maintenance and lubrication of chains for drives, conveyors, and sprocket wheels. The book covers selection of drives to meet both standard and special installations. (17) LABORATORIES: The Fisher Scientific Co's. line of 21 basic units of standardized steel laboratory furniture is described in catalog no. 25. The Unitized line was designed to combine the advantages of custom installation with the convenience of selection, delivery and continued flexibility that goes with ready-made units. (18) PUMPS: Two similar, but functionally different types of vertical centrifugal wet-pit pumps; a heavy duty bilge pump for handling solids-free liquids and drainage; and a screenless sewage ejector, constructed to handle sewage and solids carrying liquid; are illustrated in a bulletin from Yeomans Bros. Co.

Jan 1, 1952

By Clifford S. Wilson

ScReened pipe is designed with the view of restraining the fine, free-running sands of the production zone from entering oil wells. Its successful use is dependent on a number of factors. The nature and effects of some of these factors can be determined through experiment and observation, but some of the elements that have a distinct bearing on the use of screened pipe can be evaluated only by estimate. The important subsurface conditions which affect the use of screened pipe are: 1. Depth of production zone. 2. Extent of production zone. 3. Reservoir pressure. 4. Character and relative quantity of oil and gas. 5. Character of sediments: a. Cossolidation of beds. b. Variation in beds. c. Grain-size gradation of sands. d. Free-running characteristics of sand from different levels. Aside from the use of mechanical equipment and tools, the measures to be taken in the installation of screened pipe involve: 1. Size of liner. 2. Length of liner. 3. Design and mesh of screen. 4. Portion of liner to be screened. 5. Manner of setting liner. 6. Preparation of or washing of the well before or during the setting of the screen. 7. Manner of bringing in the well. 8. Manner of flowing the well. Values applicable to the actual subsurface conditions that exist at any well can only be approximated. The accuracy of the estimate will be measured by the amount and quality of the evidence at hand and the personal factor of ability to interpret the evidence fairly, whether

Jan 1, 1933

By Alan Morris

IN a previous paper1 the results of cutting tests on free-cutting brass rod were reported. Investigation was made of the effects of variation in lead content, microstructure and cold drawing. The author's reply to the discussion of that paper includes a study of the directional cutting properties of drawn and annealed rod. The present paper records the results of tests made on series of samples in which the tin, iron and copper contents have been varied. The apparatus, used and method of testing are described in detail in the previous paper. The machine is of the pendulum-operated milling type used and described by Airey and Oxford.2 Angular readings of the height to which the pendulum rises after falling from a fixed position, both when a cut is made and when the pendulum swings freely, give the basis for calculation of the energy consumed in making a cut. Careful weighing of the sample before and after cutting gives a measure of the amount of metal removed. The results are expressed in foot-pounds per cubic inch of metal removed, and have been called "unit cutting energy." In the course of the discussion of the author's earlier paper, W. B. Price reported large-scale tests involving some 50,000 lb. of material. These tests indicated that the addition of as much as 0.6 per cent of iron and 0.25 per cent of tin had apparently no adverse effect on the high-speed cutting characteristics of the rod. The rod also contained a small amount of nickel. The test results reported here tend to confirm his observations.

Jan 1, 1933

By H. J. Ramey

Conventional calculation of total system isothermal compressibility for a system containing a free gas phase involves, among other things, evaluation of the change of oil and gas formation volume factors and the gas in solution with pressure. Preferably, this information should be obtained from laboratory measurements made with particular oils and gases. Often, experimental measurements are not available. In this case, it is necessary to obtain pressure-volume-temperature relationships from general correlations such as those of Standing' for California oils. In order to speed estimates of compressibility, generalized plots have been prepared of the change of both oil formation volume factors and gas in solution, with pressure from Standing's correlations. A generalized plot for estimating the change in the two-phase (oil and gas) formation volume factor with pressure is also presented. Usually, the effect of gas dissolved in reservoir water upon the total system compressibility is neglected for gas saturated systems, due to the low solubility of gas in water. Results of this study indicate that the increase in total system compressibility caused by solution of gas in water is often as large as the compressibility of wafer, and can be magnitudes larger for low pressure systems. Generalized results for estimating the change of gas in solution in water with pressure are presented in tabular and graphical form. INTRODUCTION During the past decade, pressure build-up and drawdown techniques have gained an important place in reservoir engineering. Build-up and drawdown analyses are only two special applications of the broad field of transient fluid-flow theory. All solutions of transient fluid-flow problems contain a parameter called the total system isothermal compressibility. This property of fluids and porous rock is a measure of the change in volume of the fluid content of porous rock with a change in pressure, and it may vary considerably with pressure. Evaluation of total system isothermal compressibility is not difficult, but it is tedious and time-consuming. Often compressibilities are estimated roughly, or transient flow methods are neglected completely. The benefits of using accurate system compressibility in properly-executed build-up or drawdown analyses are: 1. Better planning of pressure build-ups may be achieved to avoid unnecessary loss of revenue due to excessively long shut-in periods, or to shut-in periods too short to yield useable data. 2. Better and more reliable estimates of static formation pressures for reserves estimates and rate performance estimates. 3. Reliable information for evaluation of well completion effectiveness, and planning and interpretation of well stimulation efforts. The purpose of this paper is to clarify the nature of the total system isothermal compressibility, and to present useful methods for estimation of compressibility, particularly for systems containing a gas phase. DEVELOPMENT Numerous publications have presented solutions to transient single-phase flow of slightly compressible fluids, stressing pressure build-up applications. In transient flow, a compressibility* term arises to permit volume content of fluids in porous rock to change as pressure changes. The basic nature of the compressibility term is usually taken for granted. Problems arise in practical applications of transient fluid theory because most published works consider only one flowing fluid—in an ideal porous system containing only one fluid. In 1956, Perrine2 presented an intuitive extension of single-phase flow pressure build-up methods to multiphase flow conditions. Later, Martin- established conditions under which Perrine's multiphase build-up method had a theoretical foundation. Perrine has shown that improper use of single-phase build-up analysis in certain multiphase flow situations can lead to gross errors in estimated static formation pressure, permeability and well condition. It is likely that, much pressure build-up data for oil wells should be analyzed on the basis of multiphase flow. For both single-phase and multiphase build-up analysis, the isothermal compressibility term in dimensionless time groups often should be interpreted as the total system compressibility. All real reservoirs contain one or more compressible fluid phases. In addition, rock compressibility can contribute in an important way to the total system compressibility. The proper total system compressibility expression may contain terms for compressibility of oil, gas, water, reservoir rock and terms for the change of solubility of gas in liquid phases.

Jan 1, 1965

By Robert Archer

IT is now well known that the structure of aluminum-silicon alloys can be refined in a rather remarkable manner, with consequent improvement of physical properties, by certain treatments applied to the molten metal shortly before casting. The differences between the treated and the untreated alloys are so marked that special terms are used to distinguish them, the untreated alloys being referred to as "normal" and the treated alloys as "modified." The first practical method of accomplishing this result was that of A. Pacz,1 which consists in treating the molten metal with a, salt flux of which the, active ingredient is sodium fluoride. The result can also be brought about, and in a more economical manner, by the addition of small quantities of metallic sodium (or potassium) to the molten alloy shortly before casting.2 The action of the Pacz flux evidently consists essentially in the production of free sodium by the reaction of sodium fluoride with aluminum. The changing of a normal alloy to a modified alloy is referred to as "modification' and any process for accomplishing this result is a "modifying" process. Modified aluminum-silicon alloys were introduced several years ago, and it has been demonstrated both in the laboratory and in commercial practice that it is no simple matter to produce castings having the maximum or nearly the maximum properties which under favorable circumstances can be obtained. The alloys are rather sensitive to small changes in chemical composition, and the modifying process must be carried out in a very particular manner to obtain the best results. Extensive experimental work has been carried out in the laboratories of the Aluminum Company of America with the object of determining the conditions that must be observed to make these alloys of the greatest possible

Jan 2, 1926

Papers in Classes A-Metal Mining, B-Milling and Concentration, H-Industrial Minerals, and I-Mining Geology are distributed in MINING TECHNOLOGY, which is issued every other month. Papers in Classes C-Iron and Steel Division, D-Nonferrous Metallurgy and E-Institute of Metals Division are distributed in METALS TECHNOLOGY, which is issued twice quarterly. Papers in Class G-Petroleum Division are distributed in PETROLEUM TECHNOLOGY, which is issued every other month. TECHNICAL PUBLICATIONS in Classes F-Coal Division, J--Mineral Industry Education Division, K¬-Mining Administration, and 1-Geophysics, are issued as separate pamphlets. Contributions are papers that when printed or mimeographed are available but only on request.

Jan 1, 1944

Papers in Classes A-Metal Mining, B-Milling and Concentration, H-Industrial Minerals, and I-Mining Geology are distributed in MINING TECHNOLOGY, which is issued every other month. Papers in Classes C-Iron and Steel Division, D Nonferrous Metallurgy and E-Institute of Metals Division are distributed in METALS TECHNOLOGY, which is issued twice quarterly. Papers in Class G Petroleum Division are distributed in PETROLEUM TECHNOLOGY, which is issued every other month. TECHNICAL PUBLICATIONS in Classes F-Coal Division, J Mineral Industry Education Division, Mining Administration, and L-Geophysics, are issued as separate pamphlets. Contributions are papers that when printed or mimeographed are available, but only on request.

Jan 1, 1946

By AIME AIME

Report of Committee 24, of the International Association for Testing Materials, presented at the Brussels Congress, 1906. Republished for use at the 94th Meeting of the American Institute of Mining Engineers, New York, N. Y., February, 1908. Discussion by letter is requested by the Secretary of the Institute. The Committee appointed for the solution of Problem 24 consisted of the following members Prof. H. M. Howe, New York, N. Y. (Chairman); L. Levy, Paris, France (Vice-Chairman) ; Prof. D. Tschernoff, St. Petersburg, Russia (Vice-Chairman) ; Prof. Albert Sauveur, Cambridge, Mass. (Secretary) ; Van Drunen, Ixelles, Belgium; Lieut.-Col. H. Tusen, Copenhagen, Denmark ; E. P. Martin, Abergavenny, England ; A. Pourcel, Paris, France ; H. Brauer, Dortmund, Germany ; Dr. Prof. H. Wedding, Berlin, Germany; P. Verole, Milan, Italy ; A. Baalsrud, Christiania, Norway ; A. R. v. Dormus, Vienna, Austria ; A. Sailler, Vienna, Austria; Bureau des Forges, St. Petersburg, Russia; Prof. N. Belelub-sky, St. Petersburg, Russia ; N. Jossa, St. Petersburg, Russia ; Maj.-Gen. M. Korobkoff, St. Petersburg, Russia ; S. Smirnoff, St. Petersburg, Russia ;.Ladislaus v. Tetmajer, Budapest, Hungary ; H. H. Campbell, Steelton, Pa. Early in February, 1905, a list of species and varieties of iron and steel, with definitions, drawn by the Chairman and Secretary of Committee 24, was sent to every member of this Committee with a request for comments and suggestions. A special request was sent to the following gentlemen . for the equivalents in their several languages of these species and varieties : A. , Pourcel, Paris, France; Prof. H. Wedding, Berlin, Germany ; J. A. Brinell, Stockholm, Sweden ; Prof. H. I. Hannover, Copenhagen, Denmark; Prof. P. Kley, Delft, Holland; P. Verole, Milan, Italy; Col. Cubillo, Trubia, Spain. This present report, which is based upon our original list and definitions, and upon the replies to these requests, consists of four parts I. A polyglot, which gives the names of the chief classes of iron and steel in English, French, German, Swedish, Danish and Dutch. We .regret that we have failed to get the Italian and Spanish names. II. English definitions of principal classes of iron and steel. III. A glossary of special sizes and shapes of iron and steel. IV. A note on the boundary between steel and cast-iron. I. POLYGLOT, IN ENGLISH, FRENCH, GERMAN, SWEDISH, DANISH AND DUTCH, OF THE CHIEF CLASSES OF IRON AND STEEL, AND OF THE APPARATUS IN WHICH THEY ARE MADE. This list is not intended to be complete, but rather to include only those varieties which are of interest to the Association.

Mar 1, 1908

W. H. BASSETT, * Waterbury, Conn.-Manganese should not be expected to remedy all the defects that are due to poor melting practice. It is undoubtedly valuable in helping to eliminate porosity in many of the alloys. In the copper-nickel alloys, its use is becoming almost universal, for, beside helping to make sound castings, it tends to hold the carbon in solution in the solidified alloy. GWILLIAM H. CLAMER,? Philadelphia, Pa.-I have found that manganese copper is satisfactory for eliminating sulfur and that it works very well in the crucible and when you have reducing conditions; but in a large reverberatory charge, where the conditions are oxidizing, we were not able to eliminate the sulfur.

Jan 1, 1919

Executive DONALD B. GILLIES, Chairman WILLIAM WRAITH, Vice-Chairman ERLE V. DAVELER PAUL D. MERICA W. H. PEIRCE Finance H. G. MOULTON, Chairman H. T. HAMILTON HENRY KRUMB Admissions CHESTER A. FULTON, Chairman GEORGE D. BARRON, Vice-Chairman A. B. JESSUP PHILIP KRAFT EDWARD MEAGHER Alternates P.B. BUCKY SAMUEL HASKELL F. T. SISCO

Jan 1, 1939

[ ] (14) SCREENS: Description of Allis-Chalmers' complete line of vibrating screens for the mining industry is contained in a new 8-page bulletin. Primary scalping, secondary scalping, and conventional screens for wet or dry sizing and screens for heavy media separation are included. Also given is a typical fiowsheet showing how horizontally operated Low-Head screens are used in the sink and float process. (15) MILLS: Forty-six years of experience and 4000 installations throughout the world lie behind the seven basic types of mills illustrated in a recent bulletin from the Hardinge Co. Fields of application and materials handled in various installations are listed. (16) BLOWERS & COMPRESSORS: A brochure describing the manufacturing facilities and the axial and centrifugal blowers and compressors made by the Sawyer Bailey Corp. is now available. (17) LINATEX: The first catalog of the Linatex Corp. of America has been issued, outlining the advantages claimed for this special form of natural rubber, when used in corrosion, abrasion, and vibration resisting applications. (18) WIRE ROPE: Twenty-four pages packed with concentrated wire rope data is the way E. H. Edwards Co. describes a booklet which they are now making available. It was condensed from the Edwards general catalog to provide users with a concise guide to every important phase of wire rope production, maintenance, and use.

Jan 1, 1952

(Members are urged to send in for this column any notes of interest concerning themselves or their fellow-members.) Members who registered at Institute headquarters during July and August : R. H. Sweetser, Columbus, Ohio. C. R. Hill, New York, N. Y. Raymond Brooks, Goldfield, Nev. H. A. Morrison, Candor, N. C. Edward M. Shepard, Springfield, Mo. Frederick J. Patchell, Washington, D. C. Rudolf Gahl, Clifton, Ariz. Walter F. Pyne, New York, N. Y. Edmund von Maltitz, Pittsburg, Pa. Harvey B. Small, Mangangue, Colombia, S. A. M. K. Rodgers, Seattle, Wash. M. B. Cohen, Miami, Ariz. J. F. Erdlets, Jr., New York, N. Y. A. P. Watt, Newark, N. J. D. H. Ladd, Houghton, Mich. H. H. Stoek, Urbana, Ill. Roy F. Cornell, Santa Cruz, Cal. D. W. Brunton, Denver, Colo. W. B. Foote, Geneva, N. Y. C. S. Robinson, Youngstown, O. H. Sjogren, Stockholm, Sweden.

Jan 9, 1913

By Rossiter W. Raymond

The formal outline of Mr. Hague's life and work is embraced in the following statement, chiefly based upon data furnished by him, at my request, shortly before his death. At that time the probability that I would survive to record his death was apparently small; but I urged upon him the duty of providing, whether for me or for my successor as Secretary of the Institute, trustworthy material for the notice which somebody would some day have to write—and which might otherwise be incomplete or incorrect. Mr. Hague, with characteristic promptness and freedom from affectation, did what I asked of him; and I am therefore able to present an authoritative sketch—concerning the details of which I shall add my own comments, and some particulars obtained from friends. James Duncan Hague was born Feb. 24, 1836, at Boston, Maes., where his father, Rev. William Hague, D.D.,an eminent clergyman, then resided. After a preliminary education in private schools, he studied in 1854 at the Lawrence Scientific School of Harvard University; in 1855 and 1856 at the University of Göttingen, Hanover; and from 1856 to 1858 at the Royal Mining Academy of Freiberg, Saxony. In 1859-1861 he was attached as chemist to a South Sea exploring expedition, sent by W. H. Webb, of New York, to examine Jarvis, Baker, and other islands for phosphate-deposits. After the outbreak of the Civil War, he entered the U. 5. Navy, serving for a year as Judge Advocate to the fleet stationed at Port Royal, S. C. In 1863 he became Superintendent of the Albany and Boston copper-mine, in the Lake Superior region, where he was also connected with the earliest development of the Calumet and Hecla property. In 1867 he became the First Assistant Geologist in Clarence King's famous Exploration of

Jan 1, 1909

By Michael Bradbury

INTRODUCTION A major change in financing exports in recent years has been the decreased importance of subsidized export credits, following the commitment of the OECD countries to eliminate the subsidy element. Subsidized export credit rates are now often more expensive than market rates as the financing for exporters has decreased in volume and importance. The forfait market, in recognition of this decreasing importance, provides a rapidly expanding source of nonrecource finance for exporters. The following is a step by step guide to what it is, how it works, its benefits and problems. WHAT IS FORFAITING? Forfaiting is not new. It has been used in Europe for about 25 years to provide export finance for both capital goods and commodities without recourse to the exporter. Although long the preserve of exporters in Germany, and more lately Italy, forfaiting is now used increasingly by exporters in Great Britain, the United States, Canada and Scandinavia. It is a fairly simple operation with easy straight-forward documentation. The transaction involves the purchase by the forfaiting bank of a bill of exchange or a series of bills without recourse to the exporter. These bills will have been drawn by the exporter, accepted by the importer, and will usually bear the unconditional guarantee of the importer's bank. They are normally drawn payable at intervals during the credit period agreed between importer and exporter and are purchased at a discount by the forfaiter. The exporter thus obtains his cash payment and the importer receives his credit period. The forfaiter collects the amount of the bills as they mature directly from the importer. Credit periods vary, depending upon the type of goods and the country and commercial risk of the importer. The period is generally between one and five years with six monthly maturities. The usual forfait currencies are US dollars. Deutschmarks and Swiss francs and others, such as sterling, French francs, and the Scandinavian currencies are being used more frequently. CHOOSING FORFAITING Most types of financing require the continued involvement of the exporter in the financial side of the transaction during the credit period. Forfaiting has certain comparative advantages. In particular, it is possible to forfait 100 percent of the risk without recourse to the exporter, unlike government sponsored export finance schemes, where some retention of the risk by the exporter is required. In addition, exports from country sources do not present problems and forfaiting can also cover trade within the EEC. Other benefits for the exporter are: (a) The exporter's balance sheet is improved; debts are turned into cash thus improving the liquidity of the company and enhancing its cash flow. And there are no contingent liabilities for bills of exchange. (b) If the sales contract is in a foreign currency forfaiting removes the risk to the exporter of adverse movements in foreign exchange during the credit period. (c) Fluctuations in interest rates during the credit period can be ignored since in forfaiting the transaction is usually done on fixed interest rate terms on a discount basis. (d) The political and transfer risks are taken by the forfaiter. (e) The commercial risk is taken by the forfaiter. (f) The costs of administration and collection etc. during the credit period are removed.

Jan 1, 1985