Mr. EDMONDSON. Are there any further questions? Thank you, Mr. O'Leary and Mr. Moulds for your participation. I appreciate your coming back this afternoon and staying with us for awhile this afternoon to try to get a better picture of what is happening in this field. I have a feeling we will probably be in touch with you later. The subcommittee stands adjourned. (Thereupon, at 3:30 p.m., the subcommittee adjourned.) APPENDIXES APPENDIX A Hon. ED EDMONDSON, EMERGENCY LEAD-ZINC COMMITTEE, Chairman, Subcommittee on Mines and Mining, Committee on Interior and Insular Affairs, House of Representatives, Washington, D.C. DEAR MR. EDMONDSON: During the hearing conducted by your subcommittee on June 13 and 14, 1963, to consider the conditions in the domestic lead-zinc mining industry, the Emergency Lead-Zinc Committee presented a discussion of provisions of H.R. 6269, introduced by Mr. Aspinall, and H.R. 6371, introduced by you, together with similar bills of 19 other Congressmen. This is a flexible quota bill with a provision that whenever the market price of lead or zinc exceeds 13.5 cents per pound for either metal, an import quota would be determined for the metal concerned, based on the difference between domestic supply and domestic consumption. Below this price level absolute import quotas would apply. In the discussion that followed this presentation, you pointed out that while 13.5 cents per pound for lead and zinc may represent at the present time the logical level above which the flexible quota provided in the bills should operate and below which the absolute quotas shall be effective, it is to be expected that production costs will continue to increase in the future and this price figure will become obsolete. The result would again be ineffective quotas that would not insure adequate domestic mine production at profitable prices. In the discussion of this situation that followed with industry representatives, it was agreed that the principle of relating the peril point level of 13.5 cents per pound to some index to reflect increasing costs was logical and acceptable, provided the proper index could be determined. An analysis of mining expenses always indicates that labor is the greater percentage of total production costs. This is true of the mining operation itself and in the supplies that are consumed in the operations. The Emergency Lead-Zinc Committee, therefore, suggests that the bill be amended to provide an anual adjustment of the peril point price of 13.5 cents per pound based on an index computed by the U.S. Department of Labor, titled "Gross and Spendable Average Weekly Earnings in Selected Industries in Current and 1957-1959 Dollars," applying the change of index in 1957-59 dollars supplied for the mining industry. This can be done by adding two sections to the proposed flexible quota legislation that would be numbered section 104 for lead and section 204 for zinc. A copy of the proposed amendments is enclosed. You will note that the amendment proposes November as the month for the index calculation with the index to be effective on December 1. This is necessary to coincide in the case of lead with the language on page 3, lines 10 through 15, and in the case of zinc, with the language on page 6, lines 7 through 12, in the bill as printed for Members of the House of Representatives. This particular definition of the "first 3 of the 4 calendar months preceding the quarter" actually takes a calculation for the first quarter of any one year back to December 1 of the preceding year. We will appreciate having this suggestion included in the report of your committee. Very truly yours, CLARK L. WILSON, Chairman. 259 Amendments proposed as additions to the provisions of H.R. 6269, H.R. 6371, and similar bills, providing for a flexible import quota limiting lead-zinc imports to necessary quantities. These amendments permit escalation of the peril point price determining enactment of the flexible quota SEC. 104. It is further provided that the E. & M.J. market price of 13.5 cents per pound for lead referred to in section 103 shall be adjusted annually to be effective on December 1 of each year based on the following calculation, using the "gross average weekly earnings, 1957-1959 dollars" index as calculated by the United States Department of Labor for the mining industry. On the effective date of this Act the 1957-1959 index shall be averaged for the last previous available 12 months and will constitute a base index for the 13.5 cent per pound lead price referred to in section 103. In November following enactment of this Act and for each succeeding year a similar index shall be averaged for the last previous available 12 months. Any percentage change from the original average base index calculated as provided in this section shall be applied in direct proportion to the lead base price of 13.5 cents per pound. This adjusted lead price, rounded to the nearest quarter cent, shall then be effective for administering the provisions of section 103 until further adjustments are made as provided in this section. SEC. 204. It is further provided that the E. & M.J. market price of 13.5 cents per pound for zinc referred to in section 203 shall be adjusted annually to be effective on December 1 of each year based on the following calculation, using the "gross average weekly earnings, 1957-1959 dollars" index as calculated by the United States Department of Labor for the mining industry. On the effective date of this Act the 1957-1959 index shall be averaged for the last previous available 12 months and will constitute a base index for the 13.5 cent per pound zinc price referred to in section 203. In November following enactment of this Act and for each succeeding year a similar index shall be averaged for the last previous available 12 months. Any percentage change from the original average base index calculated as provided in this section shall be applied in direct proportion to the zinc base price of 13.5 cents per pound. This adjusted zinc price, rounded to the nearest quarter cent, shall then be effective for administering the provisions of section 203 until further adjustments are made as provided in this section. APPENDIX B 88TH CONGRESS HOUSE OF REPRESENTATIVES 1st Session REPORT No. 640 CONDITIONS IN THE LEAD-ZINC MINING INDUSTRIES AUGUST 7, 1963.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. EDMONDSON, from the Committee on Interior and Insular Affairs, submitted the following REPORT [Pursuant to H. Res. 79, 88th Cong., a resolution authorizing the Committee on Interior and Insular Affairs to conduct thorough studies and investigations of all matters coming within the jurisdiction of the committee] The Committee on Interior and Insular Affairs submits herewith for the information of the House of Representatives a report concerning methods to alleviate distressed conditions in the lead-zinc mining industries, based on hearings held by the Subcommittee on Mines and Mining. COMMITTEE ACTION The committee, after concluding that some governmental assistance must be afforded the domestic lead-zinc mining industries, adopted the following resolution which has been forwarded to the chairman of the Committee on Ways and Means of the House of Representatives: RESOLUTION Whereas House Concurrent Resolution 177, 86th Congress, adopted September 15, 1959, established the congressional policy "that it is in the national interest to foster and encourage (a) the maintenance and development of a sound and stable domestic mining and minerals industry; (b) the orderly discovery and development of domestic mineral resources and 261 reserves on Federal, State, and privately owned lands; and (c) mining, mineral, metallurgical, and marketing research to promote the wise and efficient uses of domestic metal and mineral resources"; and Whereas said House Concurrent Resolution 177 further expressed "the sense of Congress that the maintenance and development of a sound and stable domestic mining and minerals industry, without critical dependence upon foreign sources, is essential to national security and the welfare of the consuming public, and that this objective is independent of and cannot be accomplished by the maintenance of national stockpiles for planned defense needs in a single emergency or the existence of productive capacity based upon the importation of foreign materials"; and Whereas the U.S. Tariff Commission has on eight occasions found that the domestic lead and zinc mining industries have been injured by foreign imports, including specific findings and recommendations under two escape clause actions; and Whereas Congress, in recognition of the threat to the domestic lead and zinc mining industries, by the act of October 3, 1961 (75 Stat. 766), as amended, authorized an interim stopgap program of stabilization payments to small domestic producers of lead and zinc in order to permit the small producers to remain in business during the period required to develop a long-range solution for the problems of the entire domestic lead-zinc industries; and Whereas discussions in the meetings of the United Nationssponsored Lead-Zinc Study Group have failed to bring about any plans for effective international measures that would strengthen the U.S. domestic lead and zinc mining industries; and Whereas public hearings held by the Subcommittee on Mines and Mining of the Committee on Interior and Insular Affairs of the House of Representatives on June 13 and 14, 1963, reveal that essential segments of the domestic lead and zinc mining industries have suffered continuing economic difficulties resulting in the shutdown of many facilities and the threatened closing of may more; and Whereas the Committee on Interior and Insular Affairs of the House of Representatives has, in session with a quorum present, agreed that all possible alternative measures should be exhausted before proposing subsidization of a portion of an industry or, in this case, the expansion and extension of a subsidy program: Now, therefore, be it Resolved, That the Committee on Interior and Insular Affairs of the House of Representatives hereby recommends to the Committee on Ways and Means of the House of Representatives that it give favorable consideration to the enactment of import legislation that will, while recognizing the need for continued imports of foreign lead and zinc, assure to the domestic lead and zinc mining industries a fair share of the domestic market. COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, Adopted this 31st day of July 1963. |