With respect to other nonferrous metals such as copper, zinc, tungsten, chrome, quicksilver, manganese, aluminum, and magnesium, the question of markets and market prices is equally important. The quicksilver mines of California are the most prolific in the Nation. They are capable of producing the entire normal peace requirements for mercury in the United States. As to the other nonferrous metals, our mines are relatively low grade but still capable of sustained production where proper relation between supply and demand is maintained. The mining industry feels that this can best be done through an intelligent handling of national stock-pile legislation. We believe that the vast quantities of these metals which have been produced and will be in the hands of various Government agencies at the close of the war should be frozen so that they will not overhang the market like a threatening cloud. This freeze should be for the purpose of preserving stock piles of these metals for future emergencies and it should be beyond the power of any Government official, without previous authority from Congress, to release them.

Similar action should be taken with respect to the vast amount of battlefield scrap which will come into the American market containing these metals. It is no imposition on the taxpayers of the Nation to enforce an intelligent stock-piling policy because we will then be in a position to confront any future emergency with an adequate supply of these strategic metals to tide over the sudden surge in demand.

We do not advocate unnecessary acquisition by the Government of domestically produced metals, although with respect to a few rare minerals such as quartz crystals, beryllium, titanium, and domestic tin, we believe a continuous acquisition of an adequate supply for emergencies might be justified. We do think, however, that the Government should not be in the position of dumping accumulated supplies on the market in such a way as will ruin postwar markets for domestic production.

Similarly we advocate the abandonment of Government importation of such metals from foreign sources at prices in excess of the domestic price merely in support of supposed good-will policies. If preclusive purchases are necessary, the metals so purchased should be added to the national stock pile and not made competitive. In addition to all this an intelligent tariff policy must be followed and by intelligent tariff policy we do not necessarily mean one that will exclude all foreign purchases. We shall all have to live in a world where international trade must be carried on, and trade means buying as well as selling.

The foregoing statement sets forth the fundamental post-war problems which the mining industry, with such aid as it may obtain from the Federal Government, must solve in order to perform its proper function in post-war rehabilitation. The industry naturally desires to survive. It wishes again to give employment to men, to put its utmost energy and intelligence against the force of nature in order to profitably develop the known and latent mineral resources of this State.

That is my statement.

Senator WHERRY. You think the thing to which we should give consideration is that we must get these restrictions off of mining if you are to continue in the post-war period?

Mr. KNORP. Yes. Furthermore, I think it is important that there be no delay in getting some of these restrictions off of mining because they will have far-reaching effects. Some of the mines cannot last if they are restricted too long. It has been well established that the purposes for closing the gold mines were not accomplished. As I recall it, it was thought that if the gold mines closed down that, I believe, 10,000 or 20,000 miners would immediately go over to copper mining. I heard General McSherry, of the War Manpower Commission, admit that only 312 mines in the United States went from gold to copper and that despite the fact that millions of dollars of property, you might say, were confiscated by the Government without a hearing. Senator WHERRY. Isn't that an example of what has happened in other fields as well as in connection with gold mining; that is, the gold miners will not leave their homes, their families, and the schools for their children, and they were hesitant to go to other fields?

Mr. KNORP. I think I can also draw another parallel. For instance, so many of these Government agencies feel because a man is a miner he can do any sort of mining. Gold mining is entirely different from copper mining. It is more pleasant work, to put it mildly. The gold mines in California are cool, moist, not dusty. You get into the copper mines of Colorado, Arizona, or Montana, and you get into something that is hot and it takes longer for a man to get acclimated for that sort of work to be successful at it. Our gold miners who were still employed at the time that the order was issued preferred to come to the cooler climate of the bay region and get higher wages in the shipyards. After all, there was no manpower draft that would force these men to go to copper mining, so they didn't go.

L-208 was predicated on gold miners going to copper mining. It has proved to be useless. Therefore, it shouldn't be in existence at all. Senator WHERRY. Thank you very much.

We will now hear from Robert M. Searls, of the American Mining Congress.

STATEMENT OF ROBERT M. SEARLS, ATTORNEY FOR THE AMERICAN MINING CONGRESS, CALIFORNIA CHAPTER, SAN FRANCISCO

Mr. SEARLS. My name is Robert M. Searls, attorney of San Francisco, representing the American Mining Congress here and numerous California gold mining companies.

I understand that the committee is very short of time and, with your permission, I will summarize my paper and then submit it in full for the record.

Senator WHERRY. That will be fine. It will be made a part of the record.

Mr. SEARLS. I wish to endorse what Mr. Knorp has said about the importance of gold mining as an industry, even though it may be classed as small business because of the relatively small total dollar value of its output. As he pointed out, it furnishes the sole important

economy for 19 counties of California and for a large number of additional districts in Nevada, Idaho, Washington, Montana, Colorado, Utah, Arizona, and South Dakota. I believe there is also at least one gold mine in South Carolina.

The benefits of the industry are thus widely scattered and not concentrated at one point. Its profits and markets are fixed by law, hence in times of depression it has been better able to give employment to many men than most industries. It takes wealth from nobody except Mother Earth, and it adds its wealth directly to the National Exchequer. By far the greater percentage of what it produces is paid directly to labor, and by labor is circulated to merchants in payment for living costs, to the banks, increasing circulation and credit basis, and to the Government in the form of taxes on new wealth.

The gold-mining industry has been crippled and almost destroyed by the operation of Federal Order L-208 issued by the War Production Board as an alleged war measure. I shall not stop here to argue the injustice of this order or its utter futility in accomplishing its stated purposes. What has been done has been done, and the results are apparent throughout the West in the crippled condition of the goldmining communities. There are certain things, however, which the Federal Government can do to alleviate this situation, to restore the sources of employment and of new national wealth which the gold-mining industry can afford if it is restored.

(1) The first of the measures which the Federal Government can take is to make some effort to assure the American gold miner access to foreign markets for his product. South African gold miners are selling gold in India at prices vastly in excess of the American statutory figure of $35 an ounce. Undoubtedly much of the Indian currency which purchases this South African gold is derived from heavy expenditures now being made by the United States in India in support of its military occupation and for lend-lease.

Why should not the American State Department take affirmative action to see that the Indian government accords American gold producers the same opportunity to market gold at the current price in India as the British Government does for South African mines? We believe that a little firm insistence by the Department, coupled with an Executive directive permitting the American gold miner to avail himself of the market, would afford this relief. It would not cost the Government one cent. The South African miners receive their pay through reverse export goods of a value equal to the enhanced gold value in India. Such arrangement could be made through American importers or through the military expenditure program now going on, for the American gold miners. Similar market oppor tunities are from time to time open in Egypt, Arabia, Morocco, China, and other Asiatic and African countries, and should be made available to American gold producers.

(2) With the gradual improvement in the war labor situation and the actual closure of many strategic metal mines because of discontinuance of war premiums on their metals, Order L-208 should be withdrawn by the War Production Board, and the American gold mines permitted to resume operations before the investment made in them is wholly destroyed. No other country places restriction on this industry, and those restrictions existing here should be discontinued.

(3) The question of a statutory increase in the price of gold is naturally one which will not be determined by the needs of the American gold miner. It will be determined by questions of international monetary exchange and by the necessities of our national internal debt situation.

The long-existing market for the listed gold stocks indicates that a large number of people believe that the price of gold will be increased and that an expanded gold mining industry will become the source of employment and profit to American labor and investors. This can only be so if the gold mines are protected in the event of an increased price of gold against confiscatory taxation. We have in mind the experience of the silver miners who were charged a seigniorage of 58 cents per ounce by the mint for their product, and were thus deprived of nearly half the statutory value of what they produced. The Treasury book value of its silver stock is $1.29 per ounce; the silver miner gets 71 cents. It is only fair that the gold miner be protected against such a charge in the event the price of gold is increased. The increment of profit which he would get would hardly do more than compensate him for the losses he has already suffered. If the gold miner is allowed the full increased price (if an increase in price takes place), it will make possible great expansion of the industry, mining of many marginal deposits which are not now producible at a profit and the employment of many men who will be looking for jobs after the war. (4) Mine labor is entitled to protection, which can only be realized if the gold miner receives the full price for his metal less only the normal mint charges. With the present price of gold fixed in 1934 it is not possible for operators to pay gold miners wages which are at all commensurate with those received in mines, the price of whose product is not fixed by law.

I make no pretense of being authorized to speak for mine workers. They have their own unions and their own spokesmen to represent them. I do point out, however, that the mine workers employed in California gold mines which are on a purely maintenance basis today are much interested in this future prospect of better pay conditions which they realize can only come about if their employers receive the benefits of a better price for gold. Contracts have been recently negotiated with the union at Grass Valley, Calif., which specifically provide for these benefits, and the Mine Workers Protective League (which is the labor union representing the labor in all mines in that vicinity) has by resolution endorsed the proposal of free access to foreign markets and full realization of any increase in gold prices that may be granted by Congress. I do not believe that Congress should attempt by statute to apportion any increase in the price between employers and labor for the reason that the net returns to the employer will vary in almost every property. The increase in price in 1934 from $20.67 to $35 an ounce resulted in the mining of much marginal ground which could not have been profitably mined at the old price, and the employer's profit from such mining was nothing like the net increase in price of gold. The greater part of it went to the additional labor employed in such operations, and into the higher wages which were uniformly paid in the industry after that increase. Congress can safely leave to the workers' organizations and their representatives the matter of negotiating with their employers for labor's fair share of any price increase that may be made by law. No

additional statutes are necessary to protect labor in its right to organize, bargain for, and receive its fair share of the profits of the gold-mining industry as it does from any other industry.

Senator WHERRY. On that labor question, Mr. Searls, have you read the report of the subcommittee on mining and the mining industry, which is a subcommittee of this business committee, that recommends the elimination of L-208?

Mr. SEARLS. I knew such a report has been made, but I haven't read it.

Senator WHERRY. That recommendation has been made and it has already been taken up for consideration. It was released about July 6.

Mr. SEARLS. I have not read it, but I knew your committee was favorable to that, and I knew that Senator Murray has always been a good friend of the gold miner.

(5) Pending the time when profitable resumption of gold mining is permitted by law we believe it would be fair for the Reconstruction Finance Corporation to exercise the statutory authority it now has in making loans for maintenance purposes to responsible mining companies who can show satisfactory ore reserves as security and whose treasuries have been seriously depleted through operation of Federal Order L-208. These loans would be adequately secured, would bear relatively low rates of interest, and would be repaid as soon as the mines resume operations. There is as much justification for this action as for many of the loans made by the Reconstruction Finance Corporation in aid of marginal strategic metal operations.

The committee will note that the measures of relief which I have suggested do not involve any monetary loss to the Federal Government. We are not asking for special treatment, but only for a course of action by our Federal officials which will recognize both the importance of this industry to the national and local economies, the opportunities which it will afford for reemployment during post-war periods, and just a fair chance for recoupment through its own efforts for losses sustained as the result of Federal mandate in the event a general increase in gold prices should be ordered by Congress.

I submit that the request is a fair one.

Senator WHERRY. We will next hear from Mr. Sante Quattrin, executive secretary of the Wholesale Liquor Distributors Association of Northern California.

STATEMENT OF SANTE QUATTRIN, EXECUTIVE SECRETARY, WHOLESALE LIQUOR DISTRIBUTORS ASSOCIATION OF NORTHERN CALIFORNIA, SAN FRANCISCO

Mr. QUATTRIN. My name is Sante Quattrin, executive secretary of the Wholesale Liquor Distributors Association of Northern California. In addition, I also am appearing here to day on behalf of the following additional organizations: San Francisco Restaurant Association, On-Sale Beverage Council, California Northern Hotel Association, California Retail Grocers & Merchants Association, Northern California Retail Liquor Dealers Association, Retail Druggists Association of Northern California, California Federated Institute, Bureau of Hotel-Restaurant and Purveyors, and the Malt Beverage & Wine Wholesalers Association of Northern California.