Page images

maybe-maybe_Congress will do something then. They have been told that for so long that I don't know how they could attach any more faith in it whatsoever.

Under those circumstances, I urge full support and speedy approval of this stabilization legislation.

ANCHORAGE, ALASKA, July 16, 1958. Hon. WALTER RODGERS, Chairman, Mines and Mining Subcommittee,

House of Representatives, Washington, D. C.: Mineral producers of Alaska have expressed their approval of H. R. 13280 and I strongly urge your earliest and most favorable consideration there. The destiny of our Nation may well depend on our ability to be self-sustaining, particularly in the field of metals. H. R. 13280 seems to provide the assistance virtually needed to prevent economic collapse of some segments of our strategic-minerals industries.

E. L. BARTLETT, Delegate to Congress.



Fluorspar is a nonmetallic mineral vital to the economy and strategic interests of the United States. Most of it is supplied from abroad.

S. 4036 and H. R. 13203 propose a so-called stabilization program for the benefit of the domestic producers of acid-grade fuorspar. In operation, these bills would provide subsidy payments on domestically produced acid-grade fluorspar up to a maximum of 180,000 tons per year. Enaction of these bills would have the following results: 1. It would encourage too rapid depletion of limited United States reserves :

2. It would jeopardize the supply from foreign sources of long-run United States demands;

3. It would create a windfall for a very few producers, with no countervailing benefit whatsoever to the United States economy or United States strategic needs.


The continued supply of acid-grade fluorspar is of vital importance to the United States. This nonmetallic mineral is absolutely irreplaceable in the production of aluminum and in the production of uranium hexafluoride (a necessary product in certain processes connected with nuclear fission). It is essential in the production of certain fuels important to our long-range-missile program. It is a necessary ingredient in the manufacture of the fluorinated hydrocarbons, widely used in American trade and commerce as refrigerants (such as Freon), and in the manufacture of the so-called aerosols used in connection with insect sprays, fire extinguishers, etc.

United States consumption of acid-grade fluorspar (exclusive of stockpile deliveries) has risen from about 85,000 short tons in 1946 to almost 329,000 short tons in 1957. All parties familiar with its consumption in the United States, including the domestic producers who have testified in favor of S. 4036, agree that within the next 3 to 5 years the United States demand will far exceed domestic producing capacity. Shipments from domestic producers (inclusive of United States stockpile deliveries) have risen from just about 79,000 short tons in 1946 to somewhat over 189,000 short tons in 1957. It has been demonstrated that in times of emergency demand (as in 1950, during the Korean war), United States production is incapable of supplying domestic demand.


United States reserves of fluorspar, measured and indicated, and also inferred, are very limited. One of the largest users of fluorspar, the Aluminum Company of America (which is also a large-scale producer on its own account) has estimated that, on the basis of the best estimates of continuing demand, United States reserves constitute no more than a 7-year supply of the ore.

Practically all of the major users, including Du Pont, Pennsylvania Salt Manufacturing Co., the General Chemicals Division of Allied Chemical & Dye Corp., the Dow Chemical Co., and the Reynolds Aluminum Co., have recently acquired interests in fluorspar-producing areas in Mexico. This is a crystal-clear indication of their apprehensions regarding the continued use of United States reserves.

If S. 4036 and H. R. 13203 were to be enacted, the independent producers would be encouraged to make further inroads on our dwindling reserves, for immediate United States consumption, which could well be supplied (as in large part it is being supplied now) from foreign sources. If, instead of subsidization, action were taken to increase the stockpile, the domestic producers could remain in business, and the stockpiled fluorspar would be available for United States uses in case of emergency. A bill to extend asbestos and fluorspar provisions of the Domestic Tungsten, Asbestos, Fluorspar, and Columbium-Tantalum Purchase Act of 1956 is now being considered in the House of Representatives, having been passed by the Senate.


The displacement, for a period of 5 years as a result of the enactment of S. 4036 and H. R. 13203, of foreign supplies now going into the United States market, will cause the foreign suppliers to develop non-United States markets whose demands are also increasing. Once these foreign markets have been established for foreign-produced fluorspar, the inevitable point where all parties agree that United States production cannot supply United States demandssome 3 to 5 years away—will find the United States in the position of having to reestablish an important fraction of foreign supply. This will be difficult, expensive, and even more serious—uncertain. On the other hand, maintenance of an uninterrupted supply of foreign fluorspar to its established United States markets will assure quick responsiveness of foreign supply to inevitably increasing United States demand.


In 1957 a total of almost 190,000 tons of acid-grade fluorspar was shipped from domestic producing sources. Approximately one-half of this total constituted shipments from so-called captive mines to their parent consumers. Some part of the remaining one-half, or about 95,000 tons, was shipped to stockpile under the provisions of the Purchase Act of 1956. Independent producers of any significance number only about one-half dozen, of which it is estimated that the largest produces about 80 percent of the group total, or perhaps as much as 75,000 tons. The total number of workers in the entire industry (including both captive and independent producers) is less than 1,000 workers.

Market prices for fluorspar have kept pace with or exceeded the wholesale price indexes over the last 12 years. Contrary to the case of the other, metallic minerals included in S. 4036, there has been no "sharp downward trend in * * * domestic production.” Indeed, as shown above, the trend is a rising one. The subsidy proposed by S. 4036 and H. R. 13203 would, in effect, constitute the prepayment of freight rates from the mills of the independent producers to markets which are now economically supplied from foreign sources. Since the stabilization price proposed in S. 4036 and H. R. 13203 is very close to the current price at which the United States is buying domestic fluorspar for stockpile, it is perfectly clear that the subsidy payments will in fact constitute a windfall to the independent producers.

But, unlike a stockpiling program, the fluorspar thus subsidized will disappear into current consumption at the current market price, and thus there will be no benefit whatsoever to the United States economy, and no protection to the United States in the future. Consumption of currently produced United States fluorspar, as encouraged by S. 4036 and H. R. 13203, in lieu of stockpiling, under S. 3186 and H. R. 10266, would mean lesser above-ground reserves for emergency use, so that the strategic interests of the United States will be rendered a disservice by the subsidy program.


We therefore urge that the provisions relating to fluorspar in S. 4036 and H. R. 13203 be stricken from that bill, and that favorable action be taken on S. 3186 and H. R. 10266 to continue the purchase of fluorspar for stockpile.


Mr. ROGERS. At this time the Chair will recognize the gentleman from Missouri, Mr. Tom Curtis, for his statement. STATEMENT OF HON. THOMAS B. CURTIS, A UNITED STATES

REPRESENTATIVE FROM THE STATE OF MISSOURI Mr. CURTIS. Thank you very much, Mr. Chairman. I am awfully sorry to have interrupted you, but as the Chair knows I have another committee I have to go to, to testify.

I want to thank the chairman for the opportunity of testifying before the committee on this very important subject of appropriate relief for the lead and zinc industry:

The reason I appreciate your giving me this time and the reason I have taken the time to come before this committee is because for a number of years now I have been listening to this problem as a member of the Ways and Means Committee and also a member of the Sub

a committee on Tariff and Foreign Aid of the Ways and Means Committee.

It seems that in our system in Congress of compartmentalization by committees, we get one aspect and this committee, of course, gets another.

I am appearing in order to do what I can to try to coordinate this thing.

I do think it is important we try to coordinate the information that is adduced at the hearings of various committees, and in this instance I think the viewpoint or the information that the Ways and Means Committee has on this subject would be of particular importance to this committee in considering this very troublesome problem that we are all concerned with.

My own State of Missouri is the most important lead mining State in the Union. It also is prominent in the production of zinc. I cannot overemphasize the importance of these two metals to the economy of Missouri, the entire Mississippi Valley—and to the Nation.

Ås the committee knows, both lead and zinc are in serious difficulties owing to the flood of imports of both metals that have reached our shores in the last few years. I know you will be as surprised as I was to learn that in the first quarter of this year, 84 percent of our total industrial consumption of zinc was imported and likewise, 55 percent of our lead.

Shortly after World War II, a much more reasonable volume of imports arrived—about 26 percent of zinc and 18 percent of lead.

I am not going into details about the development of recent years as the United States Tariff Commission has twice made an intensive study of the position of lead and zinc mining vis-a-vis imports.

I am sure that every member of this committee has been supplied with the basic data to make his own appraisal.

Suffice it to say that the United States Tariff Commission came forth in April 1958 with a unanimous recommendation for tariff relief, in a split decision, only differing by the degree of relief recommended.

Recently, the President decided to postpone action on the recommendation of the Tariff Commission pending congressional consid. eration of the plan outlined by the Secretary of the Interior-a modi. fication of the so-called Brannan plan for Agriculture.

[ocr errors][ocr errors][merged small][ocr errors][ocr errors][ocr errors]

The bills, S. 4036 and H. R. 13280, now before us, embody such a principle proposed by the Secretary of the Interior.

I am rather surprised that the administration has apparently plotted a new course of assistance for the lead and zinc miners.

I say new because last year the administration proposed a slidingscale tariff to be applied to lead and zinc that struck me as admirably fitting the situation, particularly as it provided for completely free trade in lead and zinc above peril points of 17.5 cents for lead and 14.5 cents for zinc. This prorgam had received the unanimous endorsement of the administration, and as a member of the Ways and Means Committee, I noticed every single agency appearing before the committee had endorsed this remedy. It was a most impressive example of unified thinking on a difficult subject.

I have learned that in addition to the plan proposed by Secretary of the Interior, the State Department is considering the establishment of an international lead and zinc study group, on a voluntary basis, whereby foreign countries in times of distressed world markets would consider adjusting their production and exports to consumption and preventing a world oversupply.

This so-called global plan, under the auspices of the State Department, would develop informal bilateral agreements with countries shipping lead and zinc to the United States.

I recognize the commendable objective of the State Department's proposal and I think it is worth developing, but I am confident it would take a long time to bring about a worldwide understanding. I can see no prospect for early relief to the lead and zinc miners through this effort.

The proposal of the Secretary of the Interior, as embodied in the provisions of the bills now before this committee, undertakes to subsidize 550,000 tons per year of zinc mine production and 350,000 tons per year of lead mine production.

In effect it removes the domestic lead and zinc mining industry to this extent from the perils of low world prices and places under it floor prices which will virtually assure these levels of production. It was proposed without consultation with the industry and is opposed by a large number of the companies producing lead and zinc.

I am told by men familiar with the operations of the metal markets, whose judgments I respect, that if the Seaton suggestion is to work, the free market price must find a level which will, based on first quarter 1958 figures, reduce the imports into this country by approximately 70 percent, and based on figures for the year 1957, which was fairly normal, reduce imports by approximately 50 percent.

Obviously, this would have a bearish influence on the free world market and might even create economic chaos in the mining industries of Canada, Mexico, and Peru.

Although this plan undoubtedly sounds politically intriguing to our foreign friends, when the plan is examined carefully and the potentially serious effect on their own prices and production is realized, I don't know but that the United States will be blamed for the dissatisfaction which the plan is certain to generate if adopted.

The use of the tariff to regulate trade is by far the most liberal of all means of assisting industries. It is a revenue-producing measure and not a drain on the Treasury.



It is time that we took cognizance of the various cost burdens we place on our domestic industries through legislation designed to promote the best interests of our society.

The Federal minimum-wage law, antitrust laws, social security, unemployment insurance, health and safety regulations, are examples of such social legislation.

If we believe that this legislation is desirable and has helped to promote the high standards of living in this country, and I believe that this is so, it is necessary for us to reflect this additional cost burden in our trading with nations abroad through a compensatory differential.

The differential need not reflect absolute cost differentials inasmuch as our society, through the high standard under which our workmen live, enjoys increased productivity from labor. The differential should be geared toward making competition equal and healthy.

Twenty-five cents an hour wage for lead and zinc miners of Peru in relation to $2 per hour paid in the United States requires some differential to keep fair competition in force and to eliminate the advantage given to what we can properly term "sweatshop labor."

If we are to help societies abroad build their economies on a solid basis, we must not base this effort on the exploitation of foreign labor.

The tariff is by far the most liberal and efficient manner of regulating a competitive differential and it seems obvious to me that such a differential is needed for the domestic lead and zinc mining industries.

There are those who have said that our stockpile of lead and zinc is ample for the immediate future. I submit that lead and zinc and many other metals are going to become short in all countries in the world in the coming centuries—some even in this century.

I think the next generation would regard us as being very wise to convert gold, which does not have the utilitarian value that other metals might have, partly into ample stockpiling of lead and zinc.

Accordingly, one means of assistance which is in complete accord with both the global plan and the application of a tariff differential is to continue stockpiling lead and zinc.

Moreover, I understand that ex-President Herbert Hoover, our greatest mining engineer, feels it is sound public policy to convert or exchange our surplus and easily replaceable surplus agricultural products into the one-crop irreplaceable mineral products of foreign countries, such as exemplified by lead and zinc, which is currently obtainable at extraordinarily low world prices. Future generations would thank us for our foresight.

Our Nation has been extremely liberal to the tune of millions of dollars in fostering the development of other nations. I think it is high time that we cultivated our own backyard.

If it is the judgment of Congress to subsidize the miners in lieu of a tariff, I am sure the miners will try to adjust their operations accordingly but, as I have tried to point out, I am opposed to this approach, for I believe that it is a dangerous precedent.

From the foreign point of view, it will invite retaliation, and it will be costly to my countrymen. The much simpler time-tested device of the tariff is far more practicable and desirable.

« PreviousContinue »