Page images
PDF
EPUB

Mr. ROMNEY. That would be 36 percent of the brackets even up to the 5,000 tons.

Senator ALLOTT. I would just like to point that out, because your answer would be modified to that extent.

Thank you, gentlemen.

Senator BIBLE. Do we have any further questions of the two witnesses?

I might indicate that Senator Watkins evidenced real interest, obviously, in this problem which is so vital to his State. Will you be in the city at any time, or will you be here later in the day?

He might want to ask you some questions.

Mr. ROMNEY. Yes.

Senator BIBLE. Thank you very much. Our next witness is Mr. Williston.

STATEMENT OF S. H. WILLISTON, VICE PRESIDENT, CORDERO MINING CO., PALO ALTO, CALIF.

Senator BIBLE. Mr. Williston, do you have a prepared statement? Mr. WILLISTON. No, Senator, I do not. I am going to take just as little time as I can. I candidly did not have time to prepare a statement, and come from the west coast at the same.

Senator BIBLE. You are always welcome at this committee table. Your suggestions are always helpful to the committee.

If you would, identify yourself for the record and present your views in your own manner.

Mr. WILLISTON. Thank you, Senator. My name is S. H. Williston, I am a former chairman of the Western Governors Mining Advisory Council; vice chairman of the committee for a national minerals policy; vice president of the American Quicksilver Institute; chairman of the strategic metals committee of the American Mining Congress; a director of the American Mining Congress, and lastly, vice president in the Cordero Mining Co., Palo Alto, Calif.

I would like to make one brief observation on this general policy of subsidies versus import control of some sort, and emphasize that if the mining industry in the United States is to survive on other than a stockpiling basis, it can only survive if the domestic industry is insured a reasonable part of the American market.

That can, of course, be done by tariffs or quotas. It also can be done by subsidies. But the result is the same as far as the overall picture is concerned.

If the American metal takes the American market, then the foreign metal is kept out of the country. Whether you keep it out with quota, tariff, or subsidy, you keep it out.

Senator BIBLE. Do you have any idea what a fair share of the American market is for an American mining producer?

I think you have indicated that he should have half of the market. Mr. WILLISTON. I think half of the market from a defense point of view is a reasonable amount. I don't need to remind you that we were self-sufficient in lead and zinc in 1939 and now we have lost half of the market to foreigners.

We have been self-sufficient in other metals, but we have lost now more than half of the market, but the thing I want to emphasize is

that this stabilization bill keeps the foreign production out of the market and causes just as much injury as far as the State Department's contacts with foreign nations as a tariff or a quota.

Senator BIBLE. Would you elaborate on the point you just made? Mr. WILLISTON. Well, I think it is quite plain. If the domestic lead and zinc producer is assured one-half of the domestic lead and zinc market, and he is paid a subsidy so that he obtains that part of the market, then there is no need for the foreign metal and the foreign metal will not come in.

If it comes in, it wouldn't be sold. You can apply it to any one of these other metals in exactly the same respect. So it seems odd to me that the administration would adopt a policy of using subsidies and taxpayers' money to accomplish the same thing the tariffs or quotas which is a more expensive and a more difficult and a more confusing manner as far as the mining industry is concerned. I have no doubt that

Senator BIBLE. Right at that point, if this stabilization plan becomes law

Mr. WILLISTON. And if it works.

Senator BIBLE. And if it works, does it make better friends of our mining industry overseas or not?

Mr. WILLISTON. I don't think it will. I think if you are going to keep the foreign lead and the foreign zinc, the foreign mercury, the foreign tungsten, the foreign chrome, the foreign antimony, reduce the imports by paying a subsidy to the producers, the foreigners will be just as unhappy as if they had a quota or tariff. They don't realize

it now.

Senator BIBLE. You think they would be just as unhappy over this bill as if there were imports or quotas?

Mr. WILLISTON. I think in the long run it reaches the same thing. The principal objection to this bill is that it is the taxpayer who makes up the difference, not the consumer, and also the extreme uncertainty as to annual appropriations for the bill.

Those of us in the mining industry who saw what happened to tungsten in the previous last year or so, will do our planning for mining on a 1-year basis from now on.

I am very much afraid that this bill means a liquidation of the American mining industry, because the industry cannot plan ahead, when it can only count on the appropriation that has already been made for the subsidy.

I wish it were otherwise, but I, for one, after seeing the tungsten appropriations denied in the house, realize that any bill, no matter what the life of it, is assured of operation only so long as the appropriations are forthcoming.

We only know from January to January whether those will be forthcoming. I think that the mining industry is in the unfortunate position of where quotas, duties, tariffs, have been denied to it, and it has the very poor choice of this stabilization bill or a quick death. I think, and I may be wrong-I hope I am wrong-I think this is the beginning of the end of the domestic mining industry, or possibly a little past the beginning. I think we have lost half of the market in the last 20 years and we are going to lose a large proportion of the rest of it shortly.

Senator DwORSHAK. Do you think that the leaders of the domestic mining industry and the Members of Congress can justify a complacency, an indifference, an inaction, and permit the invitable results that you forecast, with its repercussion on the national defense or national preparedness aspects?

Mr. WILLISTON. Apparently a great many people don't agree with me, Senator. They think I am all wrong. They think that this will keep a healthy mining industry going that will plan 5, 10, and 15 years in advance. I can't see it. And I think I am right.

Senator DwORSHAK. But you say that you think this plan will liquidate the domestic mining industry.

Mr. WILLISTON. It will keep it alive as long as the appropriations are available. I feel that you have a good possibility of an appropriation for the first year. I am not at all certain that there will be an appropriation for the second year. I think every mining industry is in the same situation as I am. We will have to look at that appropriation and say "We know we have enough money to last for 1 year, but can we justify any expenditure for exploration, any expenditure for development, to get our ore ready for the second and third year's production?”

I think if we are, in the light of what has passed, I think we are fools. A great many of us will do it, because we are fools. I have been in the mining business for 20 years, and I have been advising everybody else in the mining industry to get out for the last 7. But I have still stayed, so I am a fool. But I think it is getting very clear cut that the fools are not going to be around much longer.

Senator BIBLE. They will be around just as long as there is money available, is that what you say?

Mr. WILLISTON. They will keep on going and keep on mining until they can't meet the payrolls, and will fold up.

I am afraid that is what will happen. What I started to say— I didn't mean to get off on that tangent.

Senator BIBLE. I think your testimony is helpful to this committee, and I think you are well grounded in the problems of the domestic mining industry. I think you are a strong spokesman and a strong advocate of a good, strong domestic mining industry. What I was going to say was this: I think it is as apparent to us as it is apparent to many of us, that the road toward a protective tariff or a quota is a long, hard, difficult road, and we may get nowhere.

Mr. WILLISTON. That is true.

Senator BIBLE. Based upon that assumption, and if you were a member of this committee, then what would you do?

Mr. WILLISTON. I would amend the present bill, the Seaton bill, to include those additional minerals which were left out, and accidentally, possibly, or because of lack of pressure, and make an overall policy out of it, pass the bill, get the appropriations, hope for continuing appropriations, and hope that some time within the next 5 years you would be able to reach the solid conclusion which means some sort of import control rather than a subsidy, which is starting here in the mining industry as it once started in the agricultural industry, and which would either grow and grow or if it stopped would kill the industry.

In other words, it is the only thing there is left available. If we cannot have tariffs, quotas, or import control of some sort, excise taxes, then this is the remaining choice, and those in the mining industry have very little choice. They can accept the present bill, or if they don't want to live with the present bill, they can get out of the mining industry, because that is what is going to happen. Senator CHURCH. I want to underscore what the chairman has said, Mr. Williston, because I think it does deserve emphasis.

The very dilemma that the mining industry is faced with is the same dilemma that members of this committee who would like to befriend the mining industry are faced with. Your point has been pungently put, and I think that is the picture as of now.

Mr. WILLISTON. There are under consideration before this committee the Seaton plan covering copper, lead, zinc, fluorspar, and tungsten. There are two amendments to that bill; one by Senator Murray covering mercury, cobalt, and antimony. Mercury, cobaltI might run down the line of where the production in the Western States come.

In the State of Idaho, it produces all three of those. The State of Oregon produces mercury and antimony. The State of Nevada produces or could produce, mercury and antimony.

The State of California comes in the same category.

The States of Washington and Arizona also have some mercury. Even the State of Texas has some mercury.

I would like to express the deep hope that the committee will accept that amendment on those three metals to the bill.

Senator DwORSHAK. What will the cost be?

Mr. WILLISTON. Not very much. For example, the maximum on mercury is $50 a flask for 3,000-for 30,000 flasks. That is a million and a half. At the present time the Government is spending $8 million to buy mercury presumably at the request of the AEC. And it would be far cheaper for the Government to switch them over to this plan than to leave it under a stockpiling plan.

It would also be much better for the industry if it were switched over. And the reason I say that at the present time the foreigners are taking the whole of the domestic market, and all of the domestic mercury is going to the Government. If this were substituted for it, then the foreigners would have to curtail their production to some degree.

The price might well fall. But it would get some restriction in production.

Insofar as

Senator BIBLE. Before you get off of mercury, Mr. Williston; now this suggested amendment of yours proposes to do what insofar as mercury is concerned?

Will you just pinpoint that 1, 2, 3, 4, 5?

Mr. WILLISTON. I will just get the figures. At the present time the Government purchase price of mercury is $225 per flask, San Francisco. This is $75 below the price of a few years ago.

Senator BIBLE. Well, this amendment before me says $224 per flask.

Mr. WILLISTON. The present Government purchase which runs until December 31 of this year: $224 is proposed under this bill, f. o. b.

shipping point, which is about a dollar. And it costs about a dollar to get it from the shipping point to San Francisco, the current purchase price. The market price is $232, New York, which is about the equivalent of that. If the price went no lower, the industry would get nothing.

Senator BIBLE. Well, your formula comes into play if the price of mercury drops below $224 per flask.

Mr. WILLISTON. Yes.

Senator BIBLE. It covers it down to a drop of $50, is that correct? Mr. WILLISTON. Yes.

Senator BIBLE. For a purchase of how many flasks?

Mr. WILLISTON. 33,000 flasks maximum. That is the total domestic production at the present time.

Senator BIBLE. Where does it say that?

Mr. WILLISTON. 33,000, that is line 8.

Senator BIBLE. The maximum liabilities then.

Mr. WILLISTON. Would be a million and a half dollars. There might well be no liability at all if the foreigners don't see fit to break the price. I might add that mercury is a rather peculiar metal in that we are competing with the Spanish Government, which used to be in the Italian cartel. We had cartel competition for the last 20 years. Sometimes it gets pretty rugged.

Senator CHURCH. Do you mean now that there is some competition between the Spanish Government and the Italian cartel?

Mr. WILLISTON. They still quote prices and allocate markets but they say there is no agreement.

Senator CHURCH. Thank you.

Senator BIBLE. For the record how do you arrive at the figure of 33,000 flasks per month?

Mr. WILLISTON. That was last year's production.

Senator BIBLE. What about the average production?

Mr. WILLISTON. We produced at the rate of 60,000 flasks per year in 1943. We went to nothing in 1949 when the cartel absorbed the duty and knocked the price down to what would be the equivalent of 212 cents a pound for lead. We all went out of business then. But the industry has been in continuous operation for over a hundred years. It is not a hundred years. It is not a fly-by-night industry at all.

Senator BIBLE. How do you arrive at a figure of a maximum figure of $50 per flask?

Mr. WILLISTON. The basis of that figure is that one-half of the Italian production, the domestic industry estimates that one-half of the Italian production has a cost of about 175. So at a maximum support of 50, if it went below that, it would shut down half of the Italian industry as well as the United States industry.

At least we would have company.

Senator BIBLE. You believe that is the lowest it could fall?

Mr. WILLISTON. Well, no, that would cut down half of the production.

Unless the Spaniards increase their production, which is possibleI have a little comment on that which is certainly bad news to the industry-I might put it in here.

« PreviousContinue »