poned plans to increase lead smelter capacity. In June, they announced that the Bonne Terre mine would close because of low metal prices, after 94 years of operation.

(d) The New Jersey Zinc Co. curtailed production of slab zinc and alloy metal by 15 percent, followed by a second 15 percent cutback at Palmerton, Pa., and Depue, Ill., smelters. Also closed Flat Gap mine at Treadway, Tenn.

(e) Matthiessen and Hegeler Zinc Co. reduced its slab zinc production by 20 percent.

(f) American Smelting & Refining Co. curtailed zinc metal production at Corpus Christi, Tex., by 11 percent.

(g) Several months previous, the Eagle-Picher Co. substantially cut back zinc metal production at Henryetta, Okla.

The Interior Committee reported out the Anderson bill (S. 1747) substituting provisions of H.R. 84 for the subsidy terms of S. 1747. The Senate Finance Committee requested jurisdiction of the bill because of its tariff provisions. A hearing was held to hear administration witnesses who opposed both the tariff and subsidy provisions stating, "We believe that the program would prejudice the broader interests of the United States *** in its political relations with other countries." The bill was amended in executive session of the Finance Committee eliminating all tariff provisions and reported out as a subsidy bill. At this point, Senator Anderson moved for Senate consideration of H.R. 84, with approval as reported in item 33 above.

37. The administration was under pressure all year for formulation of a leadzinc minerals policy, and on June 23 proposed the following:

(a) A "barter" purchase of $65 million of domestic lead-zinc stocks.

(b) A proposal for the Treasury Department to discontinue commercial sales of silver, permitting the market price to rise.

(c) Appointment of a mining task force to study local conditions in mining districts.

Adverse reaction from industry and Congress was immediate as the program had no long-term stability and would again subsidize foreign production. The proposal was shelved.

38. Following the State Department foreign lead barter announcement in Mexico City, negotiations proceeded with Consolidated Mining & Smelting Co. of Canada, Ltd., and Broken Hill Associated Smelters Proprietory, Ltd.. of Australia. On August 24, 1961, the Department of Agriculture announced completion of arrangements for contracts totaling $18 million to acquire for the U.S. supplemental stockpile 55,000 tons of Canadian lead and 45,000 tons of Australian lead. The U.S. lead-zinc industry was in accord and on record as opposing these barter deals.

39. On September 23, 1961, the Senate adopted Senate Resolution 206 requesting the Tariff Commission to bring up to date the investigation of the lead-zinc industry published in March 1960, under provisions of section 332 of the Tariff Act. A public hearing was held on January 16 and 17, 1962. Witnesses appeared for the domestic lead-zinc miners, to again prove that imports continue to injure our industry even under the quota system, that as presently constituted, provides insufficient controls on unneeded imports. Importing smelters urged a "reasonable" tariff in place of quotas. Canadians, Mexicans, and Pervuvians urged cancellation of quotas and lowering of tariffs. A report is due May 15, 1962 and will be without specific recommendations for import controls.

40. On October 2, 1961, the Tariff Commission issued a lead-zinc report reviewing the industry experience after 3 years of quotas under Executive Order 10401. It informed the President that serious injury continued in the domestic industry due to imports, and quota controls should continue. The President accepted the Tariff Commission findings on February 9, 1962.

41. The fourth session of the International Lead-Zinc Study Group was held in Geneva during October 1961. A comparison of world metal (lead-zinc) production and consumption indicated a surplus still continued with stocks accumulating; however, there was optimum amongst the importing countries that the situation for the first half of 1962 might improve. The United States was purchasing lead under barter from Canada and Australia (105,000 tons total) with agreements from these countries to curtail their production. There was agreement that production should be reduced, but no effective action was taken to control contemplated metal surpluses. The United States continued to receive criticism for its import controls, even from the countries benefiting from the barter contracts.

42. Tariff legislation to protect the lead-zinc mining industry was again introduced in the second session of the 87th Congress by Congressman Wayne N. Aspinall, as H.R. 9965, and by Senator Clinton P. Anderson, as S. 2747. Eighteen other Congressmen introduced identical legislation, and 26 Senators cosponsored the Senate bill. This proposed the same tariff rates (2 cents permanent and 2 cents removable at peril points of 132 cents and 141⁄2 cents per pound) as included in similar bills of the first session, but eliminates provisions for a mine subsidy. This legislation would provide a metal price and supply favorable to the miner, consumer, and importer.

43. The fifth session of the International Lead-Zinc Study Group was held at Geneva in March 1962. The balance sheet for world metal production and consumption again showed a surplus for final 1961 figures and in the estimates for 1962. There was general agreement that reductions in production were needed, with offers by some countries to do so. The U.S. delegate offered reductions, subject to agreements to be negotiated between individual producers and Government representatives. Some substantial producing countries were uncooperative, and the session adjourned until May 28 for further consideration of the problems. 44. The proposed Government-industry discussions were ruled by the Justice Department to be contrary to antitrust regulations. The U.S. delegate informed the Study Group Secretariat that U.S. reductions proposed during March could not be negotiated.

45. The fifth session of the Study Group was resumed in Geneva on May 28, 1962. New balance sheets of production and consumption were prepared for 1962. Following a restatement of voluntary reductions by several producing countries, there appeared to be an estimated world lead deficit for 1962 (consumption over supply) of 18,000 metric tons, and a zinc surplus of 87,000 metric tons. World metal stocks were still excessive, and United States and world prices had decreased since the first of the year.

46. The International Lead-Zinc Study Group has improved the collection of world statistical information, but it has not helped control excessive imports into the United States that continue to depress our domestic mining industry. 47. The Presidential announcement of the stockpile investigation reacted unfavorably on world metal markets. The price of lead in the United States and on the London Metal Exchange was depressed to new lows since price controls were removed following World War II. ELZ testified before the stockpile committee emphasizing that (a) the announced maximum objectives for lead and zinc in the stockpile appeared to be ridiculously low, (b) no disposals should be considered until objectives were reevaluated considering reconstruction needs in the United States and abroad, and (c) industry representatives should be consulted in estimating metal supply and demand during an emergency. In June 1962, the ELZ committee offered services of industry experts to assist the OEP in determining stockpile goals (based on supply and demand statistics) for lead and zinc. This offer to the Director of the OEP was diverted to the Department of the Interior, that furnishes supply data. ELZ was assured that the industry offer of consultation regarding stockpile objectives would be used, but the services of mining industry representatives were never requested. 48. The Tariff Commission published Document 58 in May 1962, pursuant to Senate Resolution 206, directing a study of the lead-zinc industry. This is a factual report of industry conditions, complete with statistics. The figures again highlight the excessive imports that suppress domestic prices and mine production. This investigation, conducted under section 332 of the Tariff Act of 1930, could not consider import injury to the industry or recommend corrective import controls.

49. The ELZ Committee testified before both the House Ways and Means Committee and the Senate Finance Committee to discuss further complications to the security of our domestic lead-zinc mining industry that would develop from provisions of H.R. 11970, the Trade Expansion Act of 1962. Under he definition of an "industry," and according to new rules for determining injury, lead-zinc mining could not qualify for escape clause relief. Ours is presently the outstanding example of an industry injured by imports and has so been determined by the Tariff Commission. Adjustment assistance proposed in the legislation would not be effective help in our case. We proposed an effective escape clause and elimination of adjustment assistance.

50. The Trade Expansion Act was approved by Congress and enacted as Public Law 87-794 on October 11, 1962. An escape clause "of sorts" was included, requiring a Tariff Commission finding that "increased imports have been the major factor in causing or threatening to cause" serious injury to

a domestic industry. In making such a finding, the Tariff Commission must "take into account all economic factors which it considers relevant, including idling of productive facilities, inability to operate at a level of reasonable profit, and unemployment or underemployment." Under a finding of injury, a firm could obtain a recommendation for import restriction. The President may accept this or recommend adjustment assistance (technical assistance, loans, tax carry-back). Unemployed workers may obtain adjustment assistance as unemployment payments, retraining, and relocation allowances. The terms of the "escape clause" are so stringent that for all practical purposes, it will be inoperative for obtaining import relief, even for an industry such as leadzinc mining with two previous findings of import injury and recommendations for import controls.

51. The sixth session of the International Lead-Zinc Study Group was convened October 24, 1962, in Geneva, Switzerland. This will be remembered as the U.S. stockpile meeting, as great concern was raised by many of the 23 participating countries who correctly fear the drastic effects of disposals on world markets. Foreign producers were quite insistent that the study group be consulted by the U.S. Government before any disposal of lead and zinc is arranged. From the U.S. lead-zinc industry standpoint, this was the only positive accomplishment of the meeting. World production of lead and zinc still showed a surplus to consumption. Canada and Australia estimated for 1963 the largest lead and zinc production in their history. This estimate followed the completion of a lead barter arrangement whereby the United States stockpiled during 1961 and 1962, 50,474 tons from Australia and 55,547 tons from Canada. (This agreement, sponsored by the State Department, was opposed by the U.S. domestic industry and further aggravated the question of "so-called surpluses" in the Supplemental Stockpile.) The United States was still abused during the Study Group session for trying to maintain a "marginal lead-zinc mining industry" through tariffs, quotas, and subsidies. Voluntary production curtailments are no longer considered by the group. A special working party was assigned to study controls through international agreements. This, plus statistics, will no doubt continue extending negotiations within this group.

52. On October 1, 1962, the Tariff Commission issued a lead-zinc report under provisions of Eexecutive Order 10401, reviewing the industry experience after 4 years of quotas. It informed the President that serious injury continued in the domestic industry due to imports, and quota controls should continue. The President accepted the Tariff Commission findings on January 9, 1963.

53. The small mines subsidy bill referred to in item 33 was financed for the calendar year 1962 through a supplemental appropriation of $4,690,000, authorized July 25, 1962. Sixty producers were certified for 1962 participation. Fiftyfive received payments amounting to approximately $1,200,000 paid on approximately 20,000 tons of lead and zinc (8,000 tons was lead). The majority of the subsidy was paid to producers in the Tri-State mining district. No estimate is available on "new production" stimulated by the plan, but appears to be only a small percent of the total program.

54. The 1962 market prices for lead and zinc remained at continuing low levels. High lead stocks resulted in a price drop to 9.5 cents per pound-the lowest since price controls were relaxed following World War II. Lead mine produition was the lowest since 1900, resulting from low prices and the shutdown of mines in Missouri by a prolonged strike. The zinc price at approximately 11.5 cents per pound also reflected excessive zinc stocks. Excessive imports continued under the quota plan again exceeding domestic production. Since inception of the quota plan on October 1, 1958 through 1962, imports of lead have been 140 percent and zinc 110 percent of domestic production.

55. Yugoslavia has a lead metal import quota of 31,520 tons per year. Under provisions of the Trade Expansion Act, a trade concession should be suspended, "as soon as practicable" to any country dominated by communism, which is the situation in Yugoslavia. This means that the lead import duty should be doubled on Yugoslav imports and would be a small additional protection to the U.S. domestic industry. The State Department recalls a Treaty of Commerce agreed with Serbia in 1881 that calls for a 1-year notice on intention to revoke a concession. No such notice has been given by the President.

56. The Hanover, N. Mex., zinc mine and mill was closed for economic reasons on December 1, 1962. An application was filed with the Tariff Commission by the union representing the unemployed workers requesting adjustment assistance provided under terms of the new Trade Expansion Act. As indicated in item 50, the new "escape clause" provisions required in this case, that unemploy

ment resulting from imports must be due in "major part" to a trade concession granted under trade agreements. The Commission found (March 11, 1963) that competition from imports was a factor in the decision to close the property, but not the major factor. The petition was denied. It is doubtful that a natural resource industry can obtain a finding of injury under the "escape clause” of the new Trade Act and any assistance to curb excessive imports will have to come from congressional action.

57. The International Lead-Zinc Study Group has noted the increase of new lead-zinc smelting capacity around the world that is in excess of actual need. A part of this expansion is a new lead smelter at the Tsumeb Mine in the Union of South Africa, to "go on stream" in 1963. South Africa presently has an annual import quota for lead ores and concentrates of 29,760 tons. There is no allowable import quota for lead metal. The operators of the South African mines would like their quota classification changed from concentrates to metal to accommodate this change in their product. The concentrates are presently treated at El Paso, Tex., and American Smelting & Refining Co., who treat these concentrates on a "toll" basis, applied to the U.S. Tariff Commission on March 8, 1963, to have the African concentrate quota reallocated to other countries producing lead concentrates to aid this one smelting installation. The Emergency Lead-Zinc Committee opposed any change in the quotas as presently constituted until an overall import control plan becomes effective to assist the entire leadzinc mining and smelting industry; and we so advised the President, the Tariff Commission, and our friends in the Congress of our position on this matter. The smelter application for a change in the quota was denied by the Tariff Commission on March 27, 1963. The section of the law applicable to their petition provides for reductions or terminations of a trade concession, if it appears to the Commission that the duty or other import restriction proclaimed by the President may no longer be necessary to prevent serious injury to the industry. The Commission stated that an investigation was not warranted at this time. The interpretation is a recognition of continuing injury to the domestic lead-zinc mining industry as a result of excessive imports. There have been nine investigations of our industry by the Tariff Commission in the past 10 years, always showing an excess beyond domestic requirements of foreign imports of both metals.

58. A summary of the domestic lead-zinc mining industry efforts to survive, and the need for constructive import legislation to maintain a segment of the industry was reviewed once again during May 1963 by the ELZ Committee before the Senate Subcommittee on Minerals, Materials, and Fuels.