production shut down. Now, then, the question I would like to ask you is:

When we give a subsidy to lead, zinc, copper, is that going to have an adverse competitive effect upon aluminum?

Mr. MCCASKILL. The proposal here in the legislation which the Department has recommended with regard to copper, which is the major competitor of aluminum, has actually caused an increase in the price of copper, which would give it a less competitive status with aluminum than would otherwise be the case.

The stabilization payments on lead and zinc would tend to give the domestic producers of zinc a little better competitive status with regard to aluminum, perhaps, than would otherwise be the case.

The stabilization payments are geared to the historical price and production figures and would presumably do no more than retain for zinc its accustomed place vis-a-vis aluminum.

Mr. SAYLOR. Will the gentleman yield at that point?

Mr. THOMSON. Yes.

Mr. SAYLOR. I am interested in your statement that you are going to retain by this bill the historic pattern. You have said that there will be no incentive payments beyond a certain limitation which appears in each bill. But nowhere in any bill or in any Department report has there been any indication of who is going to make the allocation or how it is to be allocated. In other words, how are we going to allocate the tonnages and to whom?

In this bill which Dr. Miller introduced, and which you said you thought was very fine and stated the Department's position, on beryl you are going to have no incentive for more than 150 short tons in a calendar year to any one producer.

Now, is there going to be any overall limitation? Or are you just going to say that anybody that wants to get out and get into the market you will subsidize to that point? Are they going to get a certificate from you that says somebody who has never been in the mining industry can go out and start producing beryl, 150 short tons? What guaranty do you have you are going to maintain the historic position? That is the thing I would like to find out.

Mr. HARDY. Mr. Saylor, in the stabilization bill there are tonnage. limitations above which no payments are made-in the case of lead, 350,000 tons, and in the case of zinc, 550,000 tons; 375,000 units of tungsten, and 180,000 tons of acid-grade fluorspar.

While the production is below those limits there is no need for any allocation. Those are the upper limits. When they are reached the Government stops making stabilization payments.

Mr. SAYLOR. How are we going to divide this? Are we going to give it to the big fellows or are we going to give it to the little fellows? Who are we going to give it to?

Mr. HARDY. We have testified before, sir, that we are not interested in changing the pattern of production, and we feel there is no concern until the stabilization tonnages are exceeded, and no need for dividing the payments when it is below that level, sir.

Mr. SAYLOR. Do you mean to tell me that you think you have something down there in the way of a Government handout that you will not have more people trying to produce to get the full payment than exists? You do not mean to tell me you expect to have anything left over in this program?

Mr. HARDY. Sir, we have been criticized by certain elements of the domestic producers that the tonnage limitations that we have incorporated in this legislation will never be approached. However, we think they will be. We do not anticipate production above these limits. We think the prices are such that they are moderate prices to bring out that production. Nothing more.

Mr. SAYLOR. Of all of these four bills that you came up here and talked about, which one do you want, or do you want them all! Because there are some inconsistent provisions in some of them.

Mr. HARDY. Mr. Saylor, we want Senate bill 4036, the stabilization bill, with our suggested modifications.

We want Senate bill 3817, the exploration bill.

We want H. R. 13270, the production bonus bill.

Those are the bills that propose the Department's program, sir.
Mr. THOMSON. May I go ahead?

Mr. SAYLOR. Yes; we go ahead.

Mr. THOMSON. I would like to get back to this aluminum situation a bit for just a moment. I know there are some congressional witnesses that want to testify and it is getting late. I will hold it to a minimum.

In the first place, the comment was made that most of our bauxite, or source material, is imported. If my figures are correct, I think it is around 7 million tons that were imported in 1957 and about 1,400,000 that was produced domestically. Is that about correct? It is closer to 20 percent than 10 percent; is it not?

Mr. MCCASKILL. The figures are about 17 percent of the total consumption of bauxite was from domestic sources last year. I think that would about go with your figures.

Mr. THOMSON. Correct.

Mr. MCCASKILL. Yes.

Mr. THOMSON. Certainly a mining industry that produces 1,400,000 tons seems to me to be deserving of some attention, in the first place.

In the second place, we also have an exploration program in the State of Wyoming, which it is my privilege to represent here in Congress. Certain other materials were looked into some time ago by the Bureau of Mines to take care of this. We have no program here to try to meet the need to bring up our program.

I refer specifically to the Secretary's statement on page 6, which was previously referred to by Mr. Hardy, with regard to the condition of the industry as to copper, lead, zinc, and other metals, that during the past 12 months there have been sharp declines in the prices of several metals and there have been shutdowns.

Going over to page 7, it says with regard to H. R. 13069, recommending the adoption of it, that

First, the development and maintenance of our domestic minerals and metals productive capacity at a level which is geared realistically to our long-term national requirements.

That is one of the objectives of the legislation.

Our second objective is to so construct the bridge that we and our friends all bear our full and fair share of the burden involved in surmounting these valleys of low consumption.

It seems to me this is equally applicable to aluminum.

Mr. MCCASKILL. And to steel.

Mr. THOMSON. And to steel.

And if we start a program here to subsidize one industry and leave out another competitive industry, we are going to have something here just like we got in corn and wheat and other things with regard to agriculture.

Mr. MCCASKILL. The major distinction, Congressman, with regard to the materials on which we are proposing some action here, we are dealing with mine capacity, mine productive capacity instead of industrial capacity. And the history with regard to lead and zinc, for instance, is that after each of the depressions, recessions, or other slowdowns that we have had in the history of our economy, the lead and zinc mines have never come back to where they were. They go along and they drop; they come back part and they lose capacity each time.

It is the intention of this to preserve as much of the essential mining capacity as possible. This measure does not go beyond that particular objective.

Therefore, in a study of every one of these minerals, case by case, we have come up, shall I say, with a minimum program.

Mr. THOMSON. I am not going to labor this further. We make airplanes with aluminum, and so forth. It is not with mining capacity. I appreciate the importance of this, and I want to be helpful, particularly to our sister States in the West. It is a very difficult problem.

Because Congressman Curtis particularly has other commitments I am going to forego.

Mr. CURTIS. Mr. Chairman, if you will yield?

Mr. ROGERS. Wait just a minute, Mr. Curtis. Let's keep the regular order here. I want this record complete.

Without objection, the letter of July 15, addressed to Mr. Engle and signed by Mr. Hardy will be inserted in the record immediately following his written statement and prior to his questioning.

Let me say this to members of the subcommittee: There are some Members of Congress here who are busy and have other commitments. I want to have them heard right now, and if there are further questions by the subcommittee of Mr. Hardy, if you will hold yourself in readiness, Mr. Hardy, we will appreciate it.

Mr. HARDY. Yes.

Mr. ASPINALL. Mr. Chairman, I wish to be recognized to this extent: that is, for the observation that those of us who do have mining problems in our own district who are not asking questions this morning are no less diligent in the pursuit of the interests of the people in our district than the members of the subcommittee who have taken up the time. That is all I have to say.

The only reason I have not asked for any time is so we can proceed with the testimony and then we can go ahead with our questions afterwards.

Mr. ROGERS. If anyone has any questions there concerning the great interest of the gentleman from Colorado on national or international mining problems, the chairman will intercede in his behalf. The gentleman from Utah, Mr. Dawson.

Mr. DAWSON. Mr. Chairman, I just want to say that the gentleman from Colorado has just made my speech. I think our concern is to get along with the hearing.

Mr. ROGERS. Suppose we do proceed and let the Chair say this at

this time.

We have other Members of Congress present here, and at this point, without objection, all members will be permitted to extend their remarks in the record, those that are interested in this legislation.

(The statement and a telegram by later order of the committee follow :)

STATEMENT OF A. S. J. CARNAHAN IN THE INTEREST OF LEGISLATION TO PROVIDE FOR SUBSIDY AND STOCKPILING OF MINERALS

Mr. Chairman and members of the committee, I have the honor of representing the largest lead mining district in the United States, and one of great importance in the world. It has the distinction of mining successfully the leanest lead ore being developed anywhere, and is an outstanding example of American technical enterprise and skill at its best. It requires large capital expenditures to operate successfully and make the best use of a large mineralized area so important to our defense and to our commerce. My district normally employs about 3,500 persons and comprises many attractive towns and villages that have been in existence for a hundred years or so.

I am not going to dwell on the predicament of my district, brought about by the flood of lead imports from many countries that do not observe the same labor standards that we do. The story has been voluminously documented in the hearings of the United States Tariff Commission, when it considered the merits of the lead and zinc miners' escape clause petition, and came forth, for the second time in 4 years, with a unanimous declaration for relief, differing only in the degree of relief recommended.

The President recently announced that he is postponing action on the recommendation of the Tariff Commission pending congressional consideration of bills now before this committee. S. 4036 has been suggested by the Secretary of the Interior as preferable to the slight tariff increase recommended by the Tariff Commission. I do not agree with this position. There are three methods whereby the Government can assist domestic lead and zinc mining; namely, (1) tariff protection, (2) Government subsidies, and (3) stockpiling. Subsidies require a lot of administrative detail and they are a drain on the public purse. Stockpiling has been extensively used during recent years but I feel it can advantageously be used in the current crisis. I am disappointed that the Senate Interior Committee could not see its way clear to approve an amendment to S. 4036, advocated by several Senators, including Senator Symington, to add a modest amount of stockpiling to the bill. I still believe that stockpiling should be part and parcel of the program Congress is devising for the relief of the lead and zinc miners.

I have some misgivings about one item in S. 4036, included no doubt with the best intentions, to assist the small miner by giving all producers a subsidy for the first 500 tons production per quarter of lead. I do not think that subsidies on lead production should be applied by the Government on a discriminatory basis on size. The lead from Missouri and all other lead-producing States deserves equal consideration. They should compete on equal terms. That is in the spirit of the finest American tradition.

As my colleagues know, I have been in close touch with foreign affairs of our Government, and I have seen it approve appropriations for economic betterment throughout the free world. I believe that we are also equally justified in attending to our serious economic problems at home, and that if on mature consideration, it is desirable to subsidize our domestic mining operations rather than to use the tariff, the sums involved should be unstintingly appropriated by the Congress. But, I reiterate my conviction that escape-clause tariff relief is the immediate means of assisting domestic mining.

The lead tariff now recommended under the Trade Agreements Act would not be any greater barrier to imports than would a subsidy or a Government purchase program. In fact, we need a certain amount of imports, as newly mined lead production of 350,000 tons per year plus around 450,000 tons of scrap lead totals only 800,000 tons, whereas domestic consumption is around 1,100,000 tons. We, therefore, need to import about 300,000 tons. However, imports in recent years have been around 500,000 tons.

To conclude, the domestic lead and zinc miners need Government action at once. I voted for an extension of the Reciprocal Trade Agreements Act, believing that it contained safeguards to protect American industry from injury caused by abnormal imports. The escape clause was placed in the act for that specific purpose. Clearly, the lead and zinc miners have shown that they are entitled to escape-clause relief. If there ever was an example of how the act was intended to operate, this is it. I urge the President to approve the miners' petition for relief under the escape clause. However, if tariff action is not going to be used, I urge this committee and the Congress to enact legislation for the relief of these hard-hit industries. Mr. Chairman, I appreciate this opportunity of appearing before this distinguished committee.

STATEMENT BY REPRESENTATIVE WILLIAM A. DAWSON ON DOMESTIC MINERALS STABILIZATION BILL

Mr. Chairman and fellow committee members, as a member of this subcommittee I do not wish to cut into the time available to the witnesses but I cannot forbear some general comments on the minerals program which is before us. I shall, therefore, content myself with filing this written statement for the record.

In all candor, I do not consider this to be the best bill which could have been devised for the resurgence of our tottering mining industry. Since the basic trouble in lead and zinc, for example, is the excessive dumping of low-cost foreign production upon the American market, I would much have preferred a sliding scale of import taxes, as suggested by the administration last year, or the imposition of import quotas as recommended recently by the Chairman and two other members of the Tariff Commission in its unanimous finding of serious injury to the domestic industry.

Unfortunately, these proposals have run into various opposition as being detrimental to our foreign trade relations. With adjournment perhaps less than a month away, it is now entirely too late to debate that isue any further. Time, and the desperate circumstances of our minerals industry, dictate that we take the practical view: our domestic miners are going to get either what assistance this program offers, or nothing at all.

To me, it is unthinkable that any Congress, presumably representing all the people of the United States, should sit idly by for 2 full years watching a vital and strategic industry wither away without lifting a finger to help. While I had hoped for a better solution, I, therefore, support this measure.

The proposal we are considering is largely a subsidy program, but I think we would do well to consider exactly what it is we are subsidizing. We have irrefutable historical evidence that, given a fair share of the American market, our lead-zinc mines need no further supports to stand on their own feet. But we have this bill before us because international trade considerations have ruled out the proposals to restore that share of the domestic market. What we have here, in other words, is not so much a subsidy of the American mining industry as it is a collateral expense of our "trade and aid" program abroad.

Whatever account this expense is charged off to, the cold fact remains that vast segments of our mining industry already have been badly crippled by delay and simply cannot stand any further delay.

As the general manager of one of our Utah lead-zinc mines has put it, "Our company is suffering continuous operating losses only because it would be more expensive to shut down." Others have had no choice but to shut down entirely. In the copper communities, the situation is no better. Unemployment and reduced workweeks are causing hardships to thousands.

That is the situation which confronts us, and the hard fact is that we have only two alternatives: to adopt the domestic minerals stabilization bill or to tell the miners and mine operators to try to hold out still another year and