STATEMENT OF J. J. McCUE, REPRESENTING MUNICIPAL OFFICERS LEAGUE OF OHIO

Mr. McCUE. I might say that I am appearing here as president of the Municipal Officers League of Ohio, and also as the mayor of Boise City. Most of the people in the East think that when we speak about unemployment that that does not affect the West, but I want to just say that we are right up against it, and the particular phase that I want to appear on here today is to have this bill amended, where it says "No such grants shall be in excess of 30 percent of the cost of the labor

The CHAIRMAN. That is the same amendment that was submitted by the conference of mayors the other day?

Mr. McCUE. Yes. In other words, what I am primarily interested in is that we raise that up to 100 percent.

I want to say to you that we are out in the sagebrush, and I want to correct the error that we have no unemployment. I might say to you that in the city of Boise, of which I am mayor, we have about 2,500 unemployed on our rolls that we are actually taking care of, of whose children we are taking care. That is 40 percent of our population. The same statistics, I would say, apply to all of our States.

I want to say to you gentlemen that if we are going to get relief, we must have 100 percent. This 30 percent does not mean a thing to us. We are taxed right and left. Our taxes have been multiplying for the last several years, and in addition to that I want to say to you that more property has gone back to our counties for failure to pay the tax in the last 5 or 6 years than in the 50 years preceding. I want to bring this home to you, that it is utterly impossible for us to take advantage of this 30 percent. You realize that under our law we have to have a bond issue to pay the other 70 percent, and I want to say to you that the temper of our people, about 99 percent, is that we can't put through a bond issue. This 30 percent doesn't means a thing to us. On the other hand, I just want to say to you, gentlemen, that this unemployment phase that I speak to you about is so pronounced that it is getting acute. These men are insistent. They are not foreigners, they are American citizens, and they are demanding that this problem must be relieved.

Senator MCADOO. We have passed a bill providing for the distribution among the States of $500,000,000 for unemployment relief and for other similar purposes. Will not that afford you a very substantial relief?

Mr. McCUE. Might I ask the Senator a question? How would that affect the municipalities? Where would we get into that?

Senator MCADOO. I should think you would be benefited by the allocation to the States. I suppose the States, of course, will distribute it through the various instrumentalities of the State, so that all parts of the State will receive their just share.

Mr. McCUE. Yes, Senator McAdoo, that is true; but on the other hand, I have been somewhat a student of this problem, and I can say to you if we would relieve this unemployment situation overnight, we would relieve 9912 percent of the ills of our country. In our country we have to take care of those men, and we are now taxed

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to death. In other words, I am afraid unless we get some relief in this particular bill we will be unable to function.

The CHAIRMAN. You think conditions are too heavy for the cities to get relief?

Mr. McCUE. Yes, sir.

Senator GORE. You say the people in your town would not vote for a bond issue for local relief?

Mr. McCUE. Perhaps that is a little far fetched, but I want to bring this point to you, that our taxation problems have mounted and mounted and multiplied, and our property has returned to the tax rolls, so that there would be no income from taxation. It is just impossible.

Senator GORE. Do you figure the Federal Government can get this money somehow or other without taxing the people of your town?

Mr. McCUE. The point I want to bring to you is that we have reached the maximum amount under our constitutional provisions. We have gone just as far as we dare go and be within the laws of the State of Idaho.

Senator GORE. You want the Federal Government to put up 30 percent instead of 100 percent!

Mr. CUE. Yes, sir.

Senator GORE. You would be willing to stop at 100 percent?

Mr. McCUE. I say if we would relieve this unemployment situation, we would relieve 9911⁄2 percent of the ills of Idaho overnight.

STATEMENT OF W. W. SNIDER

Mr. SNIDER. Mr. Chairman and members of the committee, the 1932 revenue law in defining gasoline defined it to mean gasoline, benzol, and other liquids, the chief use of which is as a fuel for the propulsion of motor vehicles, motorboats, and airplanes.

Shortly after the law was enacted the Treasury Department made a ruling to the effect that industrial benzol was not subject to that tax because it was the intent of Congress to tax motor gasoline and not industrial benzol. That remained in effect until about a month ago, when they reversed their ruling and held that under the 1932 law industrial benzol was taxed, as well as motor benzol, because the tax applied to all benzol.

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Industrial benzol is used in the manufacture of chemicals, insecticides, and pharmaceuticals. It is our belief that Congress did not intend to tax pharmaceuticals or insecticides. The only way to take care of that is to use the word motor before the word benzol." The CHAIRMAN. I hope you can give us a memorandum on it so it can be inserted in the record. We will be very glad to consider that.

Mr. SNIDER. I shall be glad to do that.

Industrial benzol is only about 15 percent of the total. There is only about 10,000 gallons of it per year.

Senator GORE. It is more expensive than the other?

Mr. SNIDER. Yes, sir. It costs twice as much as the motor benzol.

STATEMENT OF JOHN A KRATZ, ATTORNEY AT LAW, WASHING

TON, D.C.

Mr. KRATZ. I merely want to call attention to the fact that section 205 (b), which is the "Buy American Buy American" section is unworkable and suggest that there be substituted in title III, in so far as it may be appropriate, all of Public 428, passed on March 3, being the Treasury appropriation bill making appropriations for the Treasury and Post Office Departments. Congress, by that title, has given full consideration to all purchases of articles, both manufactured and unmanufactured, to the contingency where there is not an available commercial supply, and to the further contingency that the manufactured article is substantially all manufactured from articles mined, produced, or manufactured in the United States, and also to the fact that many of the articles purchased and furnished to the Government are manufactured in turn from articles manufactured, mined, or produced in the United States, as the case may be.

I understand that Mr. Emery, on behalf of the Association of Manufacturers, has already presented the suggestion to the committee, and I hope that the committee will substitute the well-considered provisions of title III, Public 428.

The CHAIRMAN. If you wish to elaborate on that point, we will be very glad to consider it.

STATEMENT OF J. CARSON ADKERSON, PRESIDENT AMERICAN MANGANESE PRODUCERS ASSOCIATION, WASHINGTON, D.C.

Mr. ADKERSON. Mr. Chairman and members of the committee, I appear as president of the American Manganese Producers Association, representing about 95 percent of the producing manganese companies in the United States, including the Hy Grade Manganese Co., Woodstock, Va.; Domestic Manganese Development Co., Butte, Mont.; the Anaconda Copper Mining Co., New York City; Butte Copper & Zinc Co., of New York City; Lunar Manganese Co., of Deming, N.Mex.; and about 50 other manganese operators and property owners located in about 24 States. I appeared before the Ways and Means Committee of the House and introduced subsection (b) of section 205, which provides for the purchase and use of domestic raw materials in the manufacture of all components that enter into the manufactured articles going into the projects to arise under this new bill. We are, of course, fully in accord with this bill. The purposes of the bill are mainly for the employment of labor. If the way is left open for raw materials imported from foreign countries to be used in such projects arising under this bill or for manufactured articles or the use of raw materials entering into the manufactured articles which go into the projects, it is liable to extend that work to foreign countries and deny it to this country. I use as an illustration the new Oakland bridge in California.

The newspapers just a few days ago announced that steel contracts had been let for $22,000,000 covering the steel to be used on that bridge. That bridge is financed by the Government's funds to aid unemployment, but the maganese that will go into that bridge will

come from Soviet Russia or other foreign countries. It is also possible under the law that iron, copper and other raw materials produced in foreign countries can be used in that bridge.

It is true that under the Treasury-Post Office Appropriation Act, title III, there is a provision to take care of such things in strictly Government purchases, but there is no provision in this bill outside of this amendment to insure use of domestic raw materials in the manufacture of equipment. Therefore this amendment.

We ask your particular attention to the words "If available at reasonable cost." That seems to us to take care of any exception that may arise.

We all, of course, are primarily interested in manganese. Only 14 pounds is used in a ton of steel. It cannot add to the cost of steel more than 14 cents per ton. As commodities return to the 1929 price level that difference will be lessened. At the present time the domestic manganese industry, or in 1929, supplied 60,000 tons of high-grade ore and 1,188,000 tons of low-grade ferruginous manganese ore and manganiferous ore, as compared with 1,175,982 tons of the latter in 1928, which was used in the manufacture of steel.

The domestic manganese mines are able to furnish the entire amount used in the steel industry today. Of course the steel industry is making less steel, but we are prepared to increase the production of manganese following a normal increase in the manufacture of steel. We are prepared to increase that to take care of the gradual increase in consumption. We are already able to take care of the present consumption of high-grade ores. In the last few years we have developed new processes for the beneficiation of these ores, so that the average American ore is higher grade than foreign. Foreign ore runs 47.67 metallic manganese, as shown on pages 298 to 300 of the United States Department of Commerce bulletin entitled "Manganese and Manganiferous Ores in 1929." The ores produced in Montana run from 57 to 60 percent manganese. I have repeatedly announced in the Ways and Means Committee and elsewhere that the American industry is today prepared to take care of all contracts with ores superior to foreign ores at prices not exceeding the same price paid by the steel industry for the 5-year period prior to 1929. Senator GORE. You say the ore is higher average than foreign ores? Mr. ADKERSON. The foreign ores average 47.67, as shown by the Government document entitled "Manganese and Manganiferous Ores of 1929", issued by the Bureau of Mines of the Department of Commerce.

Senator GORE. How much is used in this country annually? Mr. ADKERSON. About 1,200,000 tons of lower grade and 600,000 tons high grade. Now it is about 200,000 tons of high grade.

Senator GORE. How much of that comes in from abroad?

Mr. ADKERSON. At present the 200,000 tons would come from abroad. In 1931, for instance, there was shipped in under the dumping campaign from Soviet Russia 502,000 tons. That was after the Soviet had started their dumping campaign. Of course, that closed the mines of the United States, and they are today idle. Senator GORE. At what price does that come in?

Mr. ADKERSON. At about $25 a ton delivered at Pittsburgh.

Senator GORE. What was the price during the boom days?
Mr. ADKERSON. During the boom days it was $34 a ton.
Senator McADOO. You mean domestic ore?

Mr. ADKERSON. Domestic and foreign. That includes the duty. The normal price of manganese ore is $34 a ton. That is the price the steel people paid for foreign manganese delivered at Pittsburgh for the 5-year period prior to 1929. Those are Tariff Commission figures.

Senator McADOO. How much is the tariff?

Mr. ADKERSON. $11.20 per ton on the highest grade. It depends on the content of manganese. The highest grade runs 50 percent manganese, so the tax is based on the manganese content of the ore and not the total weight of the ore.

Senator McADOO. Can you not produce the ore in this country cheaper than the Soviets?

Mr. ADKERSON. Not cheaper than the Soviet, because they haveSenator McADOO. I mean the average price paid.

Mr. ADKERSON. The highest price paid domestic producers for the highest grade ore, which is superior to foreign ore, for that same 5-year period was 60 cents a unit, whereas the average price paid for the foreign ore was 68 cents a unit, or $34 a ton. The simple fact is that the domestic producer during those years was penalized $4 a ton because it was an American product.

Senator MCADOO. What are you contending for? An increased tariff on manganese?

Mr. ADKERSON. No. I am asking that the provisions of this bill be not changed, so that the domestic manganese can be used in projects under this bill, if it is available at a reasonable cost.

Senator McADOO. You are merely arguing for the provision that is in the law now?

Mr. ADKERSON. Yes; exactly. I would like to put into the record a copy of the letter from the New Jersey Zinc Co., 160 Front Street, New York, dated May 16, 1933, and also copy of letter dated May 9, 1933, from the Colorado Fuel & Iron Co., Denver, Colo. (The letters referred to are as follows:)

THE NEW JERSEY ZINC Co.
New York, May 16, 1933.

Mr. J. CARSON ADKERSON,

President American Manganese Producers Association,

Washington, D.C.

DEAR SIR: In reply to your letter of May 12, asking for information regarding the production and consumption of spiegeleisen in the United States and our ability to take care of the country's requirements, I submit the following: During the 10-year period ending December 31, 1932, the total production of spiegeleisen in the United States has averaged about 90,500 gross tons per year. Imports of spiegeleisen during this same period have averaged about 8,000 gross tons per year. This indicates an average consumption of about 98,500 gross tons per year.

In the year 1928 this company sold and shipped more than 100,000 gross tons of spiegeleisen. We are now equipped to furnish similar annual tonnages of spiegeleisen manufactured wholly from domestic ores at prices which we believe to be fair and reasonable.

Your very truly,

H. S. WARDNER, Treasurer.