the program work effectively under S. 3816 it would be essential to work out some sort of broker arrangement whereby the product of the small mines could be assembled, graded, and made available in large commercially feasible lots for shipment to the users of our domestic

ore.

Therefore, some appropriate amendment to the bill which gives recognition to these economic facts of life of domestic chromite ore production at the small mine level will be essential.

In this connection the committee will, I am sure, find it helpful to consider the statement of an Oregon chrome miner relative to the legislative proposals on chrome now under consideration by this committee. The miner, Mr. William Gardner, president of the Grant County Miners Association, John Day, Oreg., wrote under date of June 5, 1958:

Hon. WAYNE MORSE,

Senator from Oregon.

DEAR SIR: AS president of the Grant County Miners Association, and speaking for the chrome miners of Eastern Oregon, we urge you to support our plan for the co-op plan of a ferrochrome plant.

We have considered both the bills on chrome by Senators Murray and Watkins, and find that they are of no help to the chrome miners of our area.

The small mines have no way of marketing their product to processors of chrome.

We all think our only way out of the situation is through the cooperative plan, and we sincerely hope the plan we outlined for a co-op receives favorable action. The members of this subcommittee are in much better position than I to determine the exact nature of the amendments to this bill that will make it workable for small mine operations. By way of suggestion, I urge the committee's serious consideration to an increase in the incentive payment from $46 to $56 per long dry ton in order to enable the miners to meet labor and material costs, freight charges, and overhead costs.

An incentive program of 5 years' duration would supply the essential continuity required to make the incentive plan really operative. Furthermore, it is doubtful that S. 3816 would be of any help to small mining operations unless section 3 (c) were to be amended to provide that delivery of the chromite ore to a broker and issuance of his certificate of quality and quantity would be tantamount to a sale within the meaning of that section.

A DOMESTIC FERROCHROME INDUSTRY AS A STIMULUS TO DOMESTIC MINING AND A SAVINGS TO THE GOVERNMENT

The chrome miners of Oregon and Washington and the very capable director of Oregon's Department of Geology and Mineral Industries, Mr. Hollis M. Dole, have suggested a type of ferrochrome cooperative program which seems to me to offer important advantages to the Government and to the chrome miners.

The witnesses who will testify before this subcommittee on S. 3816 will inform the committee of the details concerning this proposal. I believe it merits very serious consideration.

As I understand the program, it will call for an agreement on the part of the Federal Government to purchase a certain tonnage of ferrochrome each year over a 5-year period.

This ferrochrome would be produced from newly mined chromite ores at current market prices. The Government purchases would be handled as other stockpile materials under the Strategic and Critical Materials Stockpiling Act. The program would also call for loans by the Government to enable a cooperative organization of chrome miners to establish the facilities for producing ferrochrome from domestic ores. Stockpile ferrochrome could be taken in payment of such loans.

It appears that the foregoing plan would be particularly advantageous to the Government. The United States would receive something of additional value-ferrochrome-in exchange for the assistance rendered by the Government. It would stand in clear contrast to the program proposed under S. 3816 whereby outright incentives would be undertaken by the Government.

Under the last-mentioned program all that the Government gets is its assurance of a sufficient quantity of critical and strategic materials for defense purposes.

Under the ferrochrome cooperative program described above, the Government would get not only these defense benefits but also ferrochrome, which has value in and of itself.

In this connection, Mr. Hollis M. Dole, the director of the Oregon Department of Geology and Mineral Industries has supplied certain data in support of the ferrochrome program. I ask that it be included at this point in my remarks and made part of the record of the hearings.

(The information is as follows:)

DATA SUBMITTED BY HOLLIS M. DOLE, DIRECTOR, STATE OF OREGON DEPARTMENT OF GEOLOGY AND MINERAL INDUSTRIES IN SUPPORT OF PROPOSED LEGISLATION ON CHROME

Encouragement for developing the mineral resources of the United States can be traced back to Public Law 520 signed into law July 23, 1946, at the 79th Congress. Public Law 520 states, among many other things, that this Nation should reduce its dependence on foreign sources of minerals needed by the manufacturing industry of the United States.

Undoubtedly the thinking behind this was to develop a secondary line of preparedness. Expansion of this thinking was expressed in 1954 and 1955 by the President of the United States and his Cabinet Committee on Mineral Policy when it was declared that a healthy domestic mining industry was vital to the Nation's security and peacetime economy and, further that the domestic mining industry should provide an adequate mobilization base for any possible future emergency.

As regards chrome, the Secretary of the Interior in June of 1957, when proposing legislation that finally came out as Senate bill 2375, stated, “The basically short world supply coupled with the strategic nature of three of these minerals; namely, beryl, columbium-tantalum, and chromite, as well as the heavy dependence of the United States on distant overseas sources of supply, underscore the desirability of making every effort to develop and maintain some production of these commodities from domestic sources.

"Furthermore, the maintenance of some production will stimulate and give purpose to the research program."

A policy outlining the need for continuing domestic mining of high-grade metalurgical chromite in the United States has permeated thinking within Government for at least 12 years. It has never been refuted but instead has been repeatedly encouraged.

In addition to an announced policy of maintaining domestic metallurgicalgrade chrome production, there is the economic fact that unless chrome mining is continued, the investment of the recently terminated chrome stockpile will be lost. The chrome stockpile program established in 1951 closed at the end

of May in 1958; this program called for the stockpiling of 200,000 tons of highgrade chromite.

It took approximately 51⁄2 years to furnish half of the chrome to the stockpile and less than 12 years to furnish the second half.

At the close of the program, another 100,000 tons of high-grade chrome had been developed-the first time in the history of chrome mining in the West Coast States that developed reserves were known. Quite obviously chrome mining was "just getting on its feet" and in the best position it had ever been. To lose the progress created by the stockpile at this time would destroy the greatest benefit of the stockpile program—namely, development of a chrome-mining industry and knowledge of basic reserves.

The proposed bill would bring to flower the policies enunciated by the executive department over the past 10 years, would carry forward the accumulated knowledge of the stockpile program, and would establish chrome mining on a firm basis so that it would not have to turn, after termination of the program, to Government support for it existence. It does this through the following:

(1) It overcomes the principal objection to stockpiling; namely, it will allow to be established a plant for the processing of raw ore which will put the completion of the final product on the same line as other products made in the United States. In other words, it does away with the need for competing with the cheap labor of the foreign countries. This is done by applying the profits received from processing of the ore to the cost of mining the ore.

(2) It will result in the establishment of a group of small miners under one management; i. e., a cooperative. This is necessary as the result of attrition on the mineral industry over the past 10 years through executive policy has been to sacrifice the small domestic miner in order to encourage mining overseas. Unfortunately there is no place at the present in our Nation for the small independent miner. This man who has been responsible for the development of the mineral resources necessary to make our Nation great has been sold down the road of international policies.

By banding together to form a cooperative, much as other groups in the Nation have been forced to do, there still remains a chance to salvage this most necessary part of the mineral industry.

The proposed bill fits within the framework of the Department of Interior's announced policy on the establishment of a long-range domestic minerals program in that it

(1) Does not ask for defense justification.

(2) Does away with the short-range, stopgap programs in that it will allow chrome mining to stand on its own feet without turning to further help from the Government.

(3) Does not ask for tariffs, quotas, excise taxes, or floor prices which could possibly interfere with foreign policy.

The proposed legislation is based on the anticipated increase in the metal market on the west coast. Surveys made through various agencies of the Government and the Western States show without doubt that there will be a very large increase in population growth in the West for the coming years. This means that industry too must increase. Any basic increase in industry will demand steel, and chrome is one of the indispensable materials used for the manufacture of high temperature steel. In addition, as the airplane factories convert to higher speed materials, there will need be great quantities of stainless steel available. Here again, chrome is an indispensable ingredient.

Quite obviously chrome will be needed in large quantities in the West in the very near future. By establishing chrome mining and processing in the West at the present time, the future of the operations will be assured. However, as chrome mining has recently been halted due to the end of the stockpile, it is necessary to pick up this work and carry it on.

The proposed legislation would form the basis for establishment on a firm long-range basis the mines and mining that are right now in existence. A year from now, or 5 years from now, these mines will not be able to reopen as the nature of the country rock (serpentine) in which chrome is found is such that it requires continual and expensive maintenance. Once a mine is closed in serpentine it is just a matter of months before any ore that remains within the mine area is lost forever, as it becomes too expensive or impossible to retrieve.

The proposed legislation is a conservation measure, in that it allows continuation of mining in the mines now open. It also preserves the work force now trained and available. The know-how of the mine operators, miners, and supply lines are also continued.

The proposed legislation allows to become established a basic industry which will add to the economy of the region, and will, in the long run, be less costly as a supply source. By establishing mines and processing plants at this time it prevents the necessity of going to sources foreign to the West. The West should be allowed to become an industrial area and not dependent upon the manufacturing centers of the East for its life's needs.

In closing, I wish to thank the subcommittee for the opportunities afforded Oregon chrome miners and Oregon's Senators to submit testimony in suport of a chrome program that will serve not only the chrome miners of this Nation, but also the general public interest through keeping these mines available on a standby basis for whatever emergencies the future may present.

In addition, may I express my sincere thanks to the chairman of the Senate Interior Committee and to his colleagues on the Minerals Subcommittee for the fine work they have done on behalf of strengthening our domestic mining industry over the years.

The CHAIRMAN. Thank you, Senator Morse.

Our next witness is the other Senator from Oregon, Richard L. Neuberger.

STATEMENT OF HON. RICHARD L. NEUBERGER, UNITED STATES SENATOR FROM THE STATE OF OREGON

Senator NEUBERGER. Mr. Chairman, I think it is significant that two Senate committees are taking time in this busy session to conduct bearings on long-range programs in two troubled industries-agriculture and mining.

If out of these mineral hearings a successful long-range plan emerges, it will be a major accomplishment. Considering the complex nature of both the mining industry and agriculture, a staggering task confronts the committees and they merit the fullest cooperation of everyone concerned. I particularly want to pay my respects to the chairman of the Interior Committee, Senator Murray, who has so earnestly and faithfully labored to improve the mining industry throughout his long career in the Senate.

I would like to place emphasis on several points which are overlooked many times in our discussions of problems concerned with the minerals industry. I am thinking particularly in terms of chrome, but the points I wish to make apply more or less to nearly all minerals. The reason I specify chrome is the fact that it is one of Oregon's chief mineral resources.

Chrome ore has also been mined in other parts of the West: California, Washington, Alaska, and Montana have valuable deposits of chromite.

The domestic deposits of this ore, however, have not been the supply source for the mineral needs of this country to any measurable extent. Most of the chrome used by American industry has come mainly from Turkey, Africa, and from a few other overseas sources.

Our reliance will undoubtedly continue to be placed on these suppliers who unquestionably have limitless deposits of suitable grade ore which can be laid down in our ports at a price below the cost of domestic ore.

However, we have learned from World War II and the Korean war that emergencies can arise completely servering our transportation lines, and intelligent prudence demands that our Nation be prepared to carry one when such events occur.

It is the realization of this fact that won support for the mineral stockpiling program, which is rapidly coming to an end or, as in the case of chrome, has already ended.

I do not intend to develop this phase of the subject because my distinguished colleague, the senior Senator from Oregon, Wayne L. Morse, has covered this topic in his statement to the subcommittee.

However, by way of underscoring my colleague's statement, I would like to repeat an observation I made before this subcommittee at hearings held July 29, 1957. It follows:

We seem to be arriving at a point where we could very easily immobilize our own domestic mineral industry. To allow this to happen could be very poor business. Any emergency or unanticipated situation shutting off our imports would be doubly serious if our own domestic industry were unable to expand its production quickly. We should certainly consider, too, the great cost that must be anticipated if a sudden emergency made necessary the immediate revival of any industry allowed to become wholly inoperative. Skilled workers and modern techniques cannot perform their essential tasks unless some semblance of a domestic industry is maintained.

The problem of recruitment and retooling is one that we learned much about not many years ago. We should not be indifferent to the lessons we learned at that time. To make sure that our own mines could be brought into full production with minimum delay makes imperative a program that keeps alive the nucleus of our own domestic mining industry.

The program that has operated under the authority of the Office of Defense Mobilization had that as one objective.

OPERATING MINES DEVELOP NEW TECHNIQUES

I would like to key my remarks to that quotation and develop a few thoughts on this matter of skilled workers and modern techniques as it is concerned with domestic mining and particularly the mining of chrome ore.

Consider for a moment the situation that would be faced by the Nation if an emergency were suddenly to shut off the flow of overseas ore. Domestic industry, needing new supplies of chromite, would look to the official Government stockpile for their immediate requirements.

Provided with a buffer by this accumulation of ore, there would theoretically be no marked interruption in the consumption of the metal for 3 years. This, of course, is the length of time that stockpiles are designated to last, and is the period of time advocated by the advisory committee to the Office of Defense Mobilization in their report issued in January of this year. Previously, stockpiling of a 5-year reserve of ore had been considered necessary to meet the exigencies of a possible world conflict which would curtail imports of these commodities.

Without question any emergency forcing us to call on our stockpiled reserve would also being with it a sudden renewal of domestic