There are 4 flotation mills I know of that are closed now that would expect to participate in this program, but with part of the 180,000 tons given to captive production they could not reopen.

Mr. SAYLOR. Is it possible for the domestic mining industry to supply the needs of this country?

Mr. FLYNN. It would take us possibly a year to 18 months before we would be in a position to. We did at one time. Up until the end of World War II we furnished all of our own requirements, but imports have just forced us out of business.

Mr. SAYLOR. I think in response to Dr. Miller you said you had gone to the Tariff Commission. What was the result of your going to the Tariff Commission?

Mr. FLYNN. The first time we went to the Tariff Commission was under a 332 investigation that was directed by the Finance Committee. Immediately after that the Finance Committee directed a section 7 investigation.

Now at that time the industry was still selling to stockpiling. Three of the Tariff Commissioners not only found a threat of injury, they found there was a threat of actual destruction of the industry. The other three members found no threat at that time.

That went to the President. It was turned down, but less than 6 weeks later he proposed to Congress Public Law 733, which was a supplementary stockpiling program for the industry, in an effort to keep the industry alive, and we have operated under that up to this time.

Mr. SAYLOR. Since the end of World War II, has any company producing fluorspar in this country failed?

Mr. FLYNN. Yes; they have.

Mr. SAYLOR. Could you furnish a list?

Mr. FLYNN. I could furnish a list. There have been several of them that have not only failed but just closed up and sold their equipment. Mr. SAYLOR. Has there been any company that has been in the production of fluorspar domestically, captive or otherwise, that has shown substantial profits since the end of World War II?

Mr. FLYNN. I know of only one independent that would have shown a profit, since World War II, but not a substantial one.

Mr. SAYLOR. And has there been any decline in production of fluorspar in this country?

Mr. FLYNN. Yes; there has been.

Mr. SAYLOR. Can you tell the committee, or do you have available for us, the decline?

Mr. FLYNN. I do not have it in mind. I could furnish it for the record.

Mr. SAYLOR. Mr. Chairman, I ask unanimous consent that the witness be permitted to show the decline figure in fluorspar from the end of World War II to the present time.

Mr. ROGERS. Can you furnish that?

Mr. FLYNN. Yes; I can.

Mr. ROGERS. Without objection, it will be inserted in the record at this point.

Mr. SAYLOR. That is all.

2 Approximately 150,000 tons of domestic production went to the Government. Domestic sales to industry continue to decline, due to pressure of imports.

Mr. ROGERS. The gentleman from California, Mr. Sisk.

Mr. SISK. No questions.

Mr. ROGERS. The gentleman from South Dakota, Mr. Berry.
Mr. BERRY. I just have two questions.

Is there presently any tariff on fluorspar?

Mr. FLYNN. There is $1.87 a ton on acid-grade fluorspar. It is $7.50 on metallurgical grade.

Mr. BERRY. The second question:

Have there been several companies that have moved their operations to Canada or other countries that you know of?

Mr. FLYNN. No, sir. There have been some captives who purchased property in Mexico for future reserves, but so far as actually moving a mill or equipment, I do not know of any.

Mr. BERRY. That is all, Mr. Chairman.

Mr. ROGERS. The gentlewoman from Idaho, Mrs. Pfost.
Mrs. Prost. No questions, Mr. Chairman. Thank you.
Mr. ROGERS. The gentleman from Utah, Mr. Dawson.

Mr. DAWSON. What do they use fluorspar for?

Mr. FLYNN. Acid-grade fluorspar is essential to the production of aluminum. You must have it to make atomic energy. It is just as essential to the production of atomic energy as is uranium.

The fluorine that comes from fluorspar is the most promising oxidizing agent we have for the rocket and missile program. Fluorspar is the source of fluorine in the chemical industry, hydrofluoric acid, aerosol bombs, freon gas, high-octane gasoline.

Now, ceramic-grade fluorspar is used in the production of ceramics and glassware as well as welding rods and some alloys.

Mr. SAYLOR. In other words, if your foreign source of supply was cut off, the war effort in this country would be considered handicapped if the domestic mines were out of production?

Mr. FLYNN. I would think so.

I think the aluminum companies only carry about a 60- or 90-day supply. The metallurgical grade fluorspar is used in the production of steel. That is all it is used for.

Mr. SAYLOR. That is all, Mr. Chairman.

Mr. ROGERS. The gentleman from Texas, Mr. Rutherford.
Mr. RUTHERFORD. I have no questions at this time.

Mr. ROGERS. The gentleman from Arizona, Mr. Rhodes.
Mr. RHODES. No questions.

Mr. ROGERS. The gentleman from Oregon, Mr. Ullman.

Mr. ULLMAN. No questions.

Mr. ROGERS. The gentleman from Colorado, Mr. Chenoweth.

Mr. CHENOWETH. I have no questions. I do want to express my great personal regret over the passage of Mr. Cloonan. I had not heard of his death until you mentioned it now.

That is all.

Mr. ROGERS. The gentleman from Wyoming, Mr. Thomson.

Mr. THOMSON. No questions.

Mr. ROGERS. The Chair recognizes the gentleman from Arizona, Mr. Udall, a member of the full committee. Do you have any questions?

Mr. UDALL. No; thank you.

Mr. ROGERS. Mr. Collier, do you have any questions?

Mr. COLLIER. No questions.

Mr. ROGERS. Thank you very much, Mr. Flynn.

Mr. FLYNN. Thank you, Mr. Chairman.

(At an executive session of the Mines and Mining Subcommittee, Mr. Rogers obtained permission for Monroe Karasik, Fluorspar Importers and Producers Institute, to insert two letters in the record at this point.)

Hon. WALTER ROGERS,

SURREY, KARASIK, GOULD & EFRON,
Washington, D. C., July 21, 1958.

Chairman, Mines and Mining Subcommittee, House Committee on Interior and Insular Affairs, Washington, D. C.

DEAR MR. CHAIRMAN: There is enclosed a letter directed to you, together with certain exhibits, by Walter E. Seibert, of St. Lawrence Fluorspar, Inc., relative to certain statements made by Mr. Clyde L. Flynn, Jr., before your committee on July 17, 1958.

Mr. Seibert has asked me to reemphasize to you his desire that the copies of invoices submitted to substantiate his statements be returned to him after they have served the committee's purposes, and not be printed in the record. These are documents which affect the interests of third persons, and are for the perusal of interested Members of the House of Representatives and staff employees only.

In addition to Mr. Seibert's remarks about the inaccuracy of Mr. Flynn's testimony, I should like to call your attention to two statements of Mr. Flynn which also seem to be somewhat misleading.

In answer to a question by Representative Saylor, Mr. Flynn indicated that the domestic industry some years ago was able to supply all United States demands for acid-grade fluorspar and Mr. Flynn stated further with some positiveness that it would be able to do so again within the next 18 months to 2 years. This statement seems to be inaccurate in two respects: (1) while it is true that the domestic industry was in fact able to supply all domestic needs for acid-grade fluorspar years ago, that demand was at a very low level and has been increasing quite substantially since; (2) his statement that the domestic industry would be able to supply all United States demands for acidgrade fluorspar in the next few years is completely inconsistent with Mr. Flynn's earlier statement before the Senate Interior Committee that in the face of rising demand there would certainly be a worldwide shortage of fluorspar in the near future.

Mr. Flynn also promised to supply Representative Saylor with a chart showing declining production of acid-grade fluorspar. Mr. Flynn might find this somewhat difficult to accomplish if he relies upon the Bureau of Mines figures as set forth in their minerals and metals commodity data summaries of Feb

ruary 1958. At page 46 of the summaries, the figures for United States production of acid-grade fluorspar from 1951 to date are shown. These figures show a constant rise from 1951 through 1954 (both inclusive), a fall-off from the 1954 high point, in 1955 and 1956, of the order of about 3 percent, and a rise above the 1954 level, in 1957, of almost 20 percent.

I should be extremely grateful if you would make this letter and Mr. Seibert's letter (excluding the attached exhibits) a part of the record.

Very truly yours,

MONROE KARASIK.

ST. LAWRENCE FLUORSPAR, INC.,
New York, N. Y., July 18, 1958.

Re H. R. 13203 and S. 4036, acid-grade fluorspar.

Hon. WALTER ROGERS,

Chairman, Mines and Mining Subcommittee, House Committee on Interior and Insular Affairs, Washington, D. C.

DEAR SIR: The specific purpose of this letter is to correct misinformation submitted to your committee by one Clyde L. Flynn, Jr., who labels himself as a representative of the Independent Domestic Fluorspar Producers Association.

The writer is president and controlling stockholder of the St. Lawrence Fluorspar, Inc., a Delaware corporation, with a warehouse, drying and packaging plant in Wilmington, Del., and also president and controlling stockholder of the Great Lakes St. Lawrence Fluorspar, Inc., an Ohio corporation with a warehouse, drying and packaging plant in Cleveland. I am also president and controlling stockholder of a Canadian corporation with fluorspar mines and milling facilities at St. Lawrence, Newfoundland, Canada, and am president and controlling stockholder of a Mexican corporation with fluorspar mines in northern Mexico and milling facilities outside of the city of Saltillo, State of Coahuila, Mexico.

In addition to my own interests in the mining, milling, and importation of fluorspar, I am president of the Fluorspar Importers & Producers Institute, a group composed of importers of fluorspar from Spain, Italy, Germany, and Mexico.

In a statement which Mr. Flynn presented to your committee yesterday he appeals for very substantial United States Government subsidy payments on acid-grade fluorspar based on what he refers to as Italian fluorspar prices on the United States Atlantic east coast and at Cleveland. For instance, I quote Mr. Flynn:

"Hence, we have a situation where imported acid-grade fluorspar is available to consumers on the east coast for $36 plus $4 for drying * * *."

On a basis of Mr. Flynn's use of these figures he says that the domestic producers would have to sell their fluorspar for $22.62 per ton f. o. b. Rosiclare. In his conclusions he asks for a subsidy payment of $20 per ton.

The real facts as to the Italian fluorspar prices to consumers on the Atlantic seaboard, and I am perhaps the largest importer and distributor of acid-grade fluorspar, are that they average over $52 per net dry ton in bulk and over $56 per net ton in bags f. o. b. our plant at Wilmington, Del. With this communication I am submitting photostat copies of actual invoices marked "A" to prove the point.

Secondly, we actually pay $40 per net ton, with moisture content deducted, United States duty paid, in trucks alongside of vessel, Wilmington Marine Terminal, for imported Italian acid-grade fluorspar. Please note that this is in a wet filter cake form containing 8 percent to 10 percent moisture content which has to be dried before we sell to the consumer. We have to truck this material to our warehouse, we have to warehouse the material, finance it, dry it, suffer dust losses, load it into railroad cars or trucks and it is obvious that we could not sell the material f. o. b. Wilmington and make a fair profit at prices less than our selling prices as referred to above. Photostat copies of our invoices from Associated Metals, our supplier in Wilmington, marked "B" are enclosed. Thirdly, Mr. Flynn refers to drying costs of $4 per ton. My company in addition to drying fluorspar for our own account, acts as a custom drying agent for others, and our services include the trucking from ship to warehouse, warehousing the material, drying, packaging, preparation of bills of lading and our standard charge is $8 per net ton of finished product for this custom drying. In addition our principals using our drying service have to absorb dust losses up to 2 percent so that they could not very well sell dried finished fluorspar for

consumption on the east coast at any figures appreciably less than the sales prices of my company as referred to above. Photostat copies of invoices for our custom drying services marked "C" are attached. The largest domestic producer of fluorspar in the United States, the Ozark Mahoning Mining Co., have their own warehouse, drying and packaging plant in Wilmington, Del., and surely Mr. Flynn must know that one of the members of his association, the Ozark people, likewise charge $8 per net dry ton as a custom drying charge in Wilmington and we also submit photostat copies of invoices marked "D" of the Ozark Mahoning people to prove our point which, as you will note, is twice the $4 charge quoted by Mr. Flynn.

Fourthly, Mr. Flynn's references to the same low prices in Cleveland are equally false. At our warehouse, drying and packaging plant in Cleveland, we perform the same service as in Delaware. However, please note that in view of the necessity of a longer water freight haul via Montreal to Cleveland including a transfer from oceangoing vessels to lakers, our cost of the wet filter cake in Cleveland is $44 per net ton, duty paid, being $4 more than our Atlantic seaboard cost. Photostat copies of our invoices marked "E" from Associated Metals, our supplier of Italian fluorspar in Cleveland, are enclosed. The physical form is a wet filter cake material which has to be dried at our plant in Cleveland before selling to the consumer. Our base price in Cleveland is $55 per net ton of 2,000 pounds in bulk for the dried material and $59 in bags per net ton of 2,000 pounds and we submit invoices marked "F" from our Cleveland plant to verify these prices.

On our westward movements from both Wilmington and Cleveland we do have a system of freight allowances but any freight allowances that we may make from Cleveland or Wilmington would be offset by a shorter freight haul and a lower delivered price from Rosiclare to such points.

In conclusion, from the information we submit herewith as to the Atlantic east coast and Cleveland, Mr. Flynn is anywhere from $15 to $20 out on prices which he is using as a yardstick to request the very substantial subsidies or Government handouts under the bills now pending before the House intending to incorporate the Seaton proposal as far as acid-grade fluorspar is concerned.

The writer, the country's large consumers and members of the importers group are unanimous in their opposition to the Seaton subsidy payments on acidgrade fluorspar. If enacted into law the effect will be to rapidly deplete limited American reserves of this very strategic material. It will displace a very substantial proportion of the present imports of acid-grade fluorspar, the effect of which will be to antagonize our friendly allies in Italy, Spain, Germany, and Mexico. The Government will receive nothing in return for this subsidy or giveaway program.

As an alternative we strongly urge consideration to the continuation of a stockpile program as far as domestic acid-grade fluorspar is concerned, using a plan whereby the present existing domestic fluorspar producers would receive a fair price for their product, keeping them in business. The Government would at least have an inventory of this very important material, which will not rot or spoil, and is bound to double or treble in value because of increasing uses and ultimate shortage of world supplies.

Please be good enough to treat the enclosed invoices as confidential information and not make them part of the public record.

Yours very truly,

WALTER E. SEIBERT, President. Mr. ROGERS. The next witness is Mr. C. E. Schwab, chairman of the emergency lead-zinc committee. Mr. Schwab.

STATEMENT OF C. E. SCHWAB, BUNKER HILL CO., KELLOGG, IDAHO, CHAIRMAN, EMERGENCY LEAD-ZINC COMMITTEE

Mr. SCHWAB. Mr. Chairman, sitting at my left is Mr. Palmer, the executive vice president of the Colorado Mining Association, who also has a very brief statement.

Mr. Miles Romney, manager of the Utah Mining Association, fully intended to be here. His plane is late, and he will not arrive until about 12 o'clock.