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I wish to commend the subcommittee for holding these hearings, and I do trust that you will take prompt action.
Also, Mr. Chairman, I might emphasize a fact Mr. Aspinall has already stated. I happen to have lead, zinc, copper, tungsten, and fluorspar in my district, and they are hurting.
I would urge this committee to consider seriously the suggestion by Mr. Engle that the direct borrowing from the Treasury be amended so that we do not get into trouble with my committee, which happens to be Appropriations. That might hang this thing on a hook that would not be good at this time.
We are disturbed about controlling the inflation and appropriations. We are disturbed about direct borrowing from the Treasury, which relieves Congress of any concern over the inflationary trend.
I seriously urge this committee to listen to Mr. Engle in his amendments.
Mr. ROGERS. Thank you, Mr. Horan.
Mr. ASPINALL. How can you advise this committee, which has some jurisdiction over this matter, to go ahead and exercise that in the time we have left and not step upon somebody's toes on the Foreign Affairs Committee, the Appropriations Committee, or the Ways and Means Committee, or some other committee? How can we take care of all that situation in the few days we have got?
Mr. HORAN. The only suggestion I have is that you try to cooperate with the gentleman from Idaho, Mr. Jensen, who is ranking minority member. I heard him say yesterday that he was for this measure, and he was even for it with the direct borrowing. That surprised me.
But I am afraid that one of our most highly regarded colleagues from Ohio, Mr. Kirwan, is not going along with that statement because of the tungsten matter.
I would suggest this be worked out and you cooperate with the Appropriations Committee so we can have quick action. Mr. ROGERS. Thank you, Mr. Horan. Are there any questions of Mr. Horan? If not, the Chair now recognizes Dr. Dixon, of Utah.
STATEMENT OF HON. HENRY A. DIXON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF UTAH
Mr. Dixon. Mr. Chairman, and gentlemen of the committee, this morning I would like to express my acute concern not only over the critical Middle East situation but, also, over the pitiful deterioration of our metal mines upon which we will depend in the event of war.
In my State, Utah, in recent years, our producing lead-zinc mines have dropped from 21 to 9 or less. Our employed miners have been reduced in those short years from more than 3,000 to a little more than 1,100. Our smelters at Midvale and Tooele have already closed. We just cannot condone further deterioration. I am here in support of the so-called Seaton plan.
These bills, in essence, provide a plan that will help to stabilize the price of lead and zinc to a maximum of 4 cents above the market prices, with additional slight bonus payments to each mine for the first 500 tons produced. This should stabilize the price of common lead at 151/2 cents per pound and prime western zinc at 131/2 cents. Total tonnages of these ores for the 5-year duration of the program are to be 350,000 tons and 550,000 tons, respectively.
Acid-grade fluorspar will be stabilized at $53 per short ton, with a maximum subsidy payment of $13 per ton and a total 5-year tonnage involved of 180,000 tons. Tungsten trioxide will be stabilized at $36 per short-ton unit, with a maximum subsidy price of $18 per short ton and a total 5-year tonnage of 375,000 short tons.
Additionally, these bills would establish a short-term stockpiling program for domestic copper which will aid that sagging industry by the Government purchase in 1 year of 150,000 tons of domestic ore at 271/2 cents per pound.
This bisl does not provide enough relief, but it is a great help, because these mine closures weaken our economy as well as our defense.
It will be a full year this coming August 1 since I appeared before another committee of this HouseWays and Means—imploring that an import excise tax be imposed on foreign-produced lead and zinc sufficient to establish peril points needed by our domestic industry, 17 cents per pound for lead and 1412 cents per pound for zinc. At that time I stressed five points, which were:
1. Action should not be delayed until the next session of Congress, because our mines were closing so rapidly that immediate action was necessary.
2. The shutdown of our domestic lead-zinc mines has threatened national security and resulted in tax losses, economic shock, and unemployment to hundreds of fine mining families.
3. Domestic mines couldn't compete with foreign producers unless cost differentials are recognized and compensating measures provided.
4. The Government has a responsibility to protect our strategic mining industry:
5. The administration's program is a step in the right direction.
The passage of a year's time has not dimmed the essential validity and urgency of these points, and they seem to me today to be truisms that hardly require the elaboration provided a year ago.
My support of this bill does not indicate an uneconomic urge to retain in production marginal mines, so-called. Anyone that knows anything about mining knows that these type mines have been closed for a long time. The alarming thing about the current situation is that the price has been driven so low that many of our historic metalsproducing mines have beer forced to cease operations.
No doubt, stimulative prices during the war brought into production some mines that could not reasonably hope to remain operative and had not been operative, in the normal give-and-take of a free economy. As stated, these have long since gone by the boards, and it is the goal of those of us interested in the present program to keep operative, at least on a minimal program, those historic sources of metals supply that are now threatened. I think we all understand that, if passed, this program does not constitute a bounteous feast for the price-starved metals producers. It is a minimal program, and nothing more.
Domestic-metals producers, particularly lead-zinc, have tried every avenue available to them to get relief, and in each instance they have acted in good faith. They have tried to get special excise-tax legisla
tion passed, but abandoned that when they were urged to seek relief under the escape clause. They waited for months while the Tariff Commission investigated their plight. Finally, the Commission unanimously agreed that the lead-zinc industry was being damaged by the excessive imports, but the three Democrats urged one policy on the President, and the three Republicans urged another.
Then Mr. Secretary Seaton produced the administration's own proposals and the President announced that he would withhold action on escape-clause implementation of Tariff Commission recommendations until the Congress had acted upon the long-range minerals-stabilization plan. Hence, we in Congress now have the ball, and I hope we are not going to go home next month until we have run with it.
In the meantime, the domestic producers continue to suffer, continue to lay off, continue to shut down.
Last year, because we didn't act, the old Chief Consolidated mine in
my district at Eureka, Utah, which had been producing lead-zinc ore since 1909, ceased to operate. This wasn't in any sense a marginal mine. It was a historic mine, and one which should, in our own interests, still be operative.
There is another great old mine in Utah at Park City, the United Park City Mines Co., which has been operative since 1868 and lost $73,105, even with skeletal operation, during the first quarter of this year. In 1957, United Park lost $80,582 before depletion, and the year before they lost $118,045 before depletion. They have cut their development program almost to the bone in order to reduce losses, and they still cannot break even, under the stress of cheap foreign ore flooding our market.
When a mine ceases development and exploration work, producing only from its known reserves, it is, in effect eating its seed corn." In mining lingo, the phrase is "gutting the mine."
These domestic producers should not be allowed to go under. Whenever I feel that I need justification for my feeling, I think back 5 or 6 years ago to the time when we desperately needed domestic copper, tungsten, lead, and zinc to fight the Korean war, when our domestic production did not fill the demand. We tacked price ceilings on our own industries, and they still produced at capacity. In the meantime our foreign "friends" repaid our generous market sharing with them of previous years by hijacking the price for their ore far above that which we would allow our mines to charge—and we had to pay them. They did then willingly gouge us in a time of grave international peril.
These same foreign producers, who gouged us when we needed them, now have engineered the domestic price of lead, zinc, copper, tungsten, and other metals so low that our own domestic and historic sources of supply cannot compete with them.
It is to our own interest to insure their continued operation.
The events of this week in the Middle East underscore that need and interest. I said more than a year ago in a speech on the floor of the House that it just makes good commonsense for us not to put all our metal eggs in foreign baskets. Thank
you for the opportunity to appear before your committee this morning.
Mr. ROGERS. Are there any questions?
Mr. ROGERS. The gentleman from Pennsylvania.
Mr. SAYLOR. Doctor, you do not limit your statement to the metals that are included in this bill, do you, those that you are worried about?
For example, manganese. You talked about ore. One of the most important metals we have in the world as far as war is concerned is manganese, and manganese has taken a shellacking, too, but apparently nobody downtown is worried about manganese or the miners interested in that.
Mr. Dixon. I made a promise to the committee that I would be brief. I am supposed to defend the stockyard bill on agriculture, and I ask permission to be excused at this time, if I may.
Mr. ROGERS. Are there any other questions?
Are there any other Members of Congress desiring to extend their remarks or make a statement at this time?
If not, without objection, all Members will be permitted to extend their remarks, and all Members of Congress will be permitted to include statements at this point in the record.
Let the Chair make this inquiry: Is there further questions to be asked of Mr. Hardy, the Assistant Secretary?
Mr. RHODES. I have one question I would like to ask him.
Mr. ROGERS. Mr. Hardy, would you resume the witness chair, please.
Mr. RHODES. Mr. Hardy, this question refers to aluminum. I have been informed that as of the end of 1957 there had been $1.6 billion spent for the acquisition of aluminum for stockpiling purposes. Is that approximately correct?
STATEMENT OF ROYCE A. HARDY, ASSISTANT SECRETARY OF THE
INTERIOR; ACCOMPANIED BY JOSEPH C. MCCASKILL-Resumed
Mr. Hardy. We feel it is approximately that figure, Mr. Rhodes. We do not have the exact figure right here. Mr. RHODES. Are purchases still being made for the stockpile? Mr. HARDY. Yes; aluminum puts, I believe, sir. Mr. RHODES. What is that? Mr. HARDY. Put rights for aluminum.
Mr. RHODES. Unfortunately, I was at another committee, so I was not here during the colloquy between yourself and the gentleman from Wyoming. But I gathered there was some discussion as to whether the purchase of aluminum should be stepped up. Was that the gist of the conversation?
Mr. HARDY. Some sort of a program for aluminum was discussed then, Mr. Rhodes. It did not take any particular form, as I recall.
Mr. RHODES. Did you express the position of the Department as to aluminum purchases other than those now being made ?
Mr. HARDY. Mr. McCaskill here has discussed aluminum with Mr. Thomson, and we did not take a position at this time. But I believe at prior hearings we mentioned the fact that we did not favor expanded aluminum purchase program at this time, sir.
Mr. RHODES. Actually, is not one of the main troubles with aluminum the fact that the Soviet bloc has made it apparent that it will throw aluminum on the world market and sell it at 2 cents a pound cheaper than anybody else will sell it?
Mr. Hardy. I would like to have Mr. McCaskill respond to that, sir.
Mr. McCASKILL. That is claimed by the industry. I do not think there is any real evidence to support anything other than a simple explanation; namely, that Russia has some aluminum to sell and they are selling it. There is no evidence that they are trying to destroy the market. They are trying to get into markets and sometimes sell at a lower price in order to enter a market where they have not been.
Russia was a net importer of aluminum for a good many years. Beginning about 2 years ago she began to have some surplus aluminum for sale. This year somewhere in the vicinity of 30,000 tons. Most of that has gone into the western European countries. It has displaced some Canadian aluminum going into Great Britain.
Mr. RHODES. What about the domestic exporters of aluminum? Have their markets been invaded also?
Mr. McCASKILL. We see no evidence of loss of American markets anywhere.
Mr. RHODES. Have you made a study of it?
Mr. RHODES. As of now it is your considered opinion that the situation, while perhaps ominous, has not yet jelled to the point that I described it initially?
Mr. McCASKILL. You mean, with regard to Russian aluminum?
Mr. RHODES. You would say it is an ominous omen, the fact that the Russians are in the market and seem to be willing to sell at any price in order to capture parts of the market, would you not?
Mr. McCASKILL. I suppose you have to say that about Russian trade anywhere you find it.
Mr. RHODES. I think that is a fair answer. You do not, then, find that in this particular industry there is more of a threat than in other industries as far as Russian competition is concerned?
Mr. McCASKILL. We are, in the Interior Department, primarily concerned with the metals and minerals. There has been some appearance of nonferrous metals in European markets of Russian origin. There have been some increases in those. They do give people concern. In terms of quantities they have not amounted to significant quantities as yet.
As I said, we were not
Mr. RHODES. Do you have any reason to believe that the Russian program of export will not be stepped up?
Mr. McCASKILL. I suspect it will be.
Mr. RHODES. In which event this situation might become a definite problem with the domestic exporter of aluminum?
Mr. McCASKILL. It might even become a problem for domestic producers of aluminum in terms of imports into this country. It could be.
Mr. Rhodes. Imports of aluminum pig or processed aluminum?
Mr. McCASKILL. It could be either. As of the moment it is neither. And there are other problems of aluminum much greater than the Russian aluminum. The decline in the uses of aluminum in this country is much more important than the Russian sales of aluminum. Mr. RHODES. I have no further questions of the witness. Mr. ROGERS. Judge Chenoweth, do you have any questions?