has been developed and particularly in certain areas where development during the past year has been at a very rapid rate.

Senator DWORSHAK. What will you do if the production exceeds the current mill capacity?

Mr. JOHNSON. I do not think production is going to exceed current mill capacity, Mr. Senator. What will happen is that there will be operators with ore reserves that will be coming to the Commission seeking an opportunity for an enlarged market so that they might mill or sell their ore. We have that problem before us today and that is the problem that is going to be considered.

Senator DwORSHAK. Do you see these expanded operations requiring more uranium will require additional mill capacity and some of these smaller operators make application to the Commission to construct mills? What will be your attitude on that?

Mr. JOHNSON. That is a matter for the Commission to decide. Senator DwORSHAK. That is all, Mr. Chairman.

Chairman DURHAM. Mr. Vance, has the Defense Mobilization Agency made a recommendation on the amount of uranium ore? Mr. VANCE. Do you say, Have they made a recommendation? Chairman DURHAM. Yes.

Mr. VANCE. Not to my knowledge.

Chairman DURHAM. Have they done that, Mr. Johnson?

Mr. VANCE. I do not know of any, Mr. Chairman.

Chairman DURHAM. I am not sure, but I think they have some funds in their appropriation this year for that purpose.

Mr. VANCE. You mean in their stockpile funds?

Chairman DURHAM. I do not think they are going to stockpile anything like that, but they had an item in there of expense for uranium as I read the report of the committee.

Mr. VANCE. This is the first I heard of it, Mr. Chairman.

Chairman DURHAM. The other day when we were considering an appropriation bill before the House, I believe there was an item for $86,000 for exploration for the Bureau of Mines. How did they get that? Is that an exchange of funds between the Atomic Energy Commission and the Bureau of Mines?

Mr. VANCE. I think I can explain that to you, sir, because at one time I was connected with the Defense Mobilization Administration. Under chapter 3 of the Defense Production Act, the Office of Defense Mobilization is authorized to advance funds or make commitments for various purposes, and one of those purposes was for the exploration for minerals and other vital materials in this country. That work was undertaken by the Department of the Interior of which the Bureau of Mines is a part.

Chairman DURHAM. This is itemized as uranium exploration. The item was uranium exploration.

Mr. VANCE. I would think under the circumstances it is probably a part and parcel of a large exploration plan which contemplated subsidizing the cost of exploration for a variety of metals, even copper, for example.

Chairman DURHAM. I thought all of this was under AEC.

Mr. VANCE. No, sir. I think the program that you refer to is the one I just described which has nothing to do with AEC.

Chairman DURHAM. It is in the appropriation bill, Mr. Johnson. I wish you would look it up and give us some information. I raised a question about it and nobody seemed to know very much about it. Mr. JOHNSON. I am not sure that I am speaking to the exact appropriation you are talking about, but the Defense Minerals Exploration Administration, which was set up during the Korean war, and is under the Department of Interior, makes exploration loans for various types of minerals, as Mr. Vance has said, including copper, lead, thorium, uranium, and various other minerals that are strategic. When that program was set up, the question was raised as to whether the uranium should come under that program or not. Uranium_was put under it because we were not doing private exploration, and we certainly felt that the uranium miners and prospectors should have the same privileges that any other mining group had. I think the Government originally put up 80 percent, and the private operator had to put up 20 percent. More recently the proportion has been cut to 50 percent private funds and 50 percent Government. This is under a program that has been established by Congress and the Department of Interior requests each year its appropriation for this program which includes uranium as well as other strategic minerals.

Chairman DURHAM. It looked like a situation which should not exist, a situation such as you find yourself in here in trying to solve the problem which is difficult. Now the Bureau of Mines are expending funds for exploration.

Senator ANDERSON. I do think, Mr. Chairman, that the Bureau of Mines works closely with the Atomic Energy Commission with these DMEA loans. I happen to know of an application or two that have been made. The Grand Junction office came down and participated in the inspection of the property and the possibilities of its paying out. I think you and I, Mr. Johnson, discussed a loan in New Mexico. That was a DMAE loan, but the advice and consent of the Atomic Energy Commission was obtained on it. I think they work very closely in that matter.

Chairman DURHAM. I am surprised that the Defense Mobilization people are not making some recommendation to you. They are making recommendations on all other strategic materials for defense and security.

Mr. JOHNSON. I would think that this exploration program would be a very desirable one in spite of the situation that we are in which relates only to current overproduction or prospects of current overproduction of uranium. I would think it would be highly desirable if the Government continues to carry on an assistance program for developing strategic minerals which would include uranium. Today copper is in oversupply but another 5 years from now the picture might be entirely different.

Chairman DURHAM. I think it is a responsibility and I think Congress understands it, or at least I do, that the Defense Mobilization organization has a responsibility of telling some agency what they need and what they want for the security of the country. I think this is one item that they ought to have a recommendation on.

Mr. STRAUSS. Mr. Chairman, it is my recollection which I would like to confirm and later submit for the record, that there was an understanding between a previous commission and the Office of De

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fense Mobilization, or if not, its predecessor agency, that divided the field to the extent that uranium was not included among those materials for which the Office of Defense Mobilization had a responsibility for stockpiling or for setting any quantities of procurement. That was left to the Atomic Energy Commission deliberately and by agreement at that time. I will confirm that understanding if I can find it in the records.

(Supplemental information follows:)

The United States Geological Survey has carried out geologic investigations of uranium on behalf of the AEC through transfer of funds for the past 12 years. Except for the period 1950-55 when they carried out a drilling program on the Colorado Plateau supplementing the AEC program of that time of direct exploration for new uranium deposits, their work has involved regional geologic mapping and basic geologic and geochemical research. This program has had as its objective the development of information on long-range resources. The Survey's program has been planned in cooperation with and approved by the AEC and the funds made available have been progressively reduced since 1955. In the fall of 1957 the AEC, with the concurrence of the Bureau of the Budget, determined that the Survey's program beyond fiscal year 1959 should be carried out by funds directly appropriated to the Survey rather than by transfer of Commission funds. The $1,976,000 requested by the Survey in the Interior Department appropriation bill was the amount determined as necessary to continue a proper level of USGS activity in this field, and resulted from AEC-USGS planning prior to the decision that the AEC would no longer support the Survey. The program proposed represents largely the completion of projects already under way. The AEC supported the Survey's request before the Bureau of the Budget. The Defense Materials Exploration Administration has funds available for loans to private industry for exploration and development of new sources of strategic and critical minerals, including uranium. It is our understanding that funds for this purpose are allocated by the Office of Defense Mobilization from its appropriation.

By letter dated September 17, 1947, from Mr. Hargraves, Executive Chairman, Munitions Board, to Chairman Lilenthal of the AEC, Mr. Hargraves advised that the Army and Navy Munitions Board, under its authority, and the Munitions Board, under the National Security Act of 1947 had under current consideration three programs that required close coordination with the AEC. The first of these programs stemmed from the responsibility given the Secretary of War and the Secretary of Navy through the Army and Navy Munitions Board by Public Law 520 to determine which materials were strategic or critical and the quantities of those materials to be placed in the national stockpile. Quoted from such letter is the following:

"With regard to the stockpiling of source materials for the production of fissionable material, it can readily be assumed with little interpretation that it is the intent of Public Law 585 to place the responsibility for gathering a war reserve of these materials on the Atomic Energy Commission. This assumption only needs confirmation."

Mr. Lilenthal replied to Mr. Hargraves on October 28, 1947, and stated in part as follows:

"***the Commission wishes to advise that it does not at this time expect the Munitions Board to assume any responsibility for the procurement of source materials as defined by the AEC."

Chairman DURHAM. That concludes testimony by AEC witnesses today on problems of the uranium-mining industry. The committee is scheduled to hear representatives of industry testify on this subject next Monday and Tuesday, February 24 and 25, 1958.

(Whereupon the portion of the hearing pertaining to the problems of the uranium mining and milling industry was adjourned until 10 a. m. Monday, February 24, 1958.)

PROBLEMS OF THE URANIUM MINING AND MILLING

INDUSTRY

MONDAY, FEBRUARY 24, 1958

CONGRESS OF THE UNITED STATES,

JOINT COMMITTEE ON ATOMIC ENERGY,

Washington, D. C.

The committee met, pursuant to recess, at 10 a. m., in room 304, Old House Office Building, Hon. Carl T. Durham (chairman of the committee) presiding.

Present: Representatives Durham, Price, Hosmer, Dempsey, Van Zandt, and Patterson and Senators Anderson, Gore, and Dworshak. Also present: Senator Barrett and Representative Thomson. Also present: James T. Ramey, executive director; David R. Toll, staff counsel; George E. Brown, Jr., and Richard Smith, staff members, Joint Committee on Atomic Energy.

Chairman DURHAM. The committee will come to order. Today we are scheduled to begin the second week of the committee's hearings under section 202 of the Atomic Energy Act on "the development, growth, and state of the atomic energy industry."

I would like to announce at this time that the hearings scheduled for this Thursday, February 27, have been postponed until the following Tuesday, March 4.

I have had the committee staff send telegrams to the scheduled witnesses. I believe that all of them will be able to appear on the following Tuesday.

Our first witness today is Mr. Gordon A. Weller, executive vice president of the Uranium Institute of America.

We are very glad to have you with us, Mr. Weller. Will you please come around.

Senator ANDERSON. Mr. Chairman, Senator O'Mahoney asked me to announce that he planned to be here and had every expectation of being here, but came up with a little cold and he has to stay home. Chairman DURHAM. We are sorry that we cannot have Senator O'Mahoney with us.

Mr. Weller, you may proceed.

STATEMENT OF GORDON A. WELLER, EXECUTIVE VICE PRESIDENT, URANIUM INSTITUTE OF AMERICA

Mr. WELLER. Thank you, Mr. Chairman.

The Uranium Institute of America appreciates your invitation to again appear and testify before the Joint Committee on Atomic Energy.

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My name is Gordon Weller, and I am employed as executive vice president of the Uranium Institute of America. The Uranium Institute is a trade association of individuals and companies engaged in all phases of exploration, production, processing, and conversion of uranium. We are incorporated in the District of Columbia and our principal office is in Grand Junction, Colo.

In a review of an industry's development, growth, and state, as is called for in these particular hearings, it is always the temptation to bear heaviest emphasis on the industry's problems, and to perhaps ignore the many favorable developments that have occurred.

The experience of the uranium industry has been phenomenal over the past several years. Never before in our Nation's history has it been necessary to bring into being a minerals industry involving such a great capital investment, imposing such difficult technical problems, affecting so many people, and of such vital importance to our national security and world position.

That this has been effectively accomplished is a signal tribute to the leadership and administrative ability of Mr. Jesse C. Johnson, Director of the Division of Raw Materials of the Atomic Energy Commission. The uranium and mining and milling industry salutes his great accomplishment.

THE CREATION OF AN INDUSTRY

This effort was inspired by the great importance that has been attached to the establishment of an adequate raw materials base for our atomic energy program. The need was first publicly defined in the Atomic Energy Act of 1946, and the Domestic Uranium Circulars 1 and 3.

But the domestic program was finally given the impetus that was required by Domestic Uranium Circular 5, which continues to serve as a base for uranium procurement. Each circular was drawn before experience could be gained and it has become apparent that Circular 5 was highly restrictive in its application, for two reasons:

1. The circular was confined to two uranium ore types: Carnotite and Roscoelite.

2. The circular established Monticello, Utah, as the sole point of purchase for such ores.

Mr. Chairman, I submit for inclusion in the record at the end of my statement a copy of Domestic Circular No. 5.

In practice, however, the Atomic Energy Commission authorized buying stations and ore processing mills at many different points throughout the West, and accepted for purchase more than 20 different types of uranium-bearing ore.

In 1953 the Congress was made aware of the conflict between the mineral leasing procedures on public lands by oil and uranium industries. Accordingly, Public Law 250, and subsequently the Multiple Mineral Development Act, were enacted to remove such conflicts and to expedite the development of both mineral resources in the West.

Further confidence and enthusiasm were engendered in the uranium industry by the philosophy and hopes embodied in President Eisen