The subheading is, "Contract No. SCM-TS-19594 (ECA), dated December 7, 1949."

On August 1, 1952, a supplement to the above contract

the contract number already referred to—

was formalized between DMPA and Newmont Mining Corp., New York, as agent for Societe des Mines de Zellidja, providing for an advance of $575,000— which Mr. Medley has previously mentioned

of DPA funds for the purpose of purchasing American equipment to complete a program of development of the Zellidja Co.'s lead and zinc mines located at Bou Beker, French Morocco, North Africa.

These funds were in addition to an advance of $3,600,000 of ECA funds made by ECA under the original contract dated December 7, 1949, both advances to be repaid, plus interest, by delivery to the United States stockpile of an equivalent value of lead and/or zinc.

Do you maintain that those are counterpart funds?

Mr. FREDELL. My recollection is that they are counterpart funds, yes. Mr. MEDLEY. I would say that it is likely that they were counterpart funds, but I will verify that, Senator.

Senator MALONE. You just get the story on this thing.

I continue:

Contract No. GS-OOP-2391 (SCM-DMPA), dated May 31, 1952:

Under this contract and amendment No. 1, dated January 16, 1953, entered into between DMPA and Societe des Mines de Zellidja, this company operating lead and zinc mines at Bou Beker, French Morocco, undertook to deliver to the United States stockpile lead equal in value to the principal and interest of an advance of three billion French Metropolitan franes of MSA counterpart.

The advance was for the purpose of amplifying the power production facilities of the company Energie Electrigue du Maroc (EEM) to meet the power needs of Zellidja's expanding mining operations, as well as other expanding power needs of the territory. Zellidja signed the contract as intermediary for EEM, and the payback to the United States stockpile was estimated at about 28,000 tons of lead.

Are these separate operations we are talking about in these two paragraphs, or do you maintain

Mr. FREDELL. The metropolitan francs are counterpart funds.

Senator MALONE. Are the dollars counterpart funds, already referred to in the amount of $3,600,000 of ECA funds and $575,000 of DPA funds, which would be a total of about $44 million? It certainly does not look like it.

Mr. MEDLEY. I agree with you, Senator, but we will find out.
Senator MALONE. That will be very helpful.

What do we get for the advance of the $414 million? We understand we get 28,000 tons of lead. Can you verify that?

Mr. FREDELL. It is lead to the value of the loan plus interest. Senator MALONE. Three billion French metropolitan francs, it says, Your counterpart fund is in the second paragraph I have read. The other is American dollars advanced, for which, it says, we will receive the amount returned plus interest by delivery to United States stockpile of equivalent value of lead and/or zinc. It does not say at what price.

Mr. FREDELL. All of those contracts, I think with one exception, refer to market price at the time of delivery.

Senator MALONE. What market price?

Mr. FREDELL. The United States market price.

Senator MALONE. You know what the market price of lead and zinc

is now, I suppose.

Mr. FREDELL. Yes.

Senator MALONE. I am going to ask in a few minutes if you know what caused it. This probably has something to do with it.

It is just impossible that you fellows do not understand what you are doing here and what money is applied to these purchases. That is impossible. It cannot be. So I am expecting you to clarify this

statement.

Mr. MEDLEY. Sir, if I may add, these contracts were originally ECA contracts, which were subsequently transferred to us.

Senator MALONE. That is correct, but you have them and you should understand them.

With the understanding that this explanation will be made a part of the record at this point, go ahead with your explanation of the foreign contracts, Mr. Walsh.

I will ask you Mr. Walsh, You do not know of your own knowledge what this is?

Mr. WALSH. No, sir, I do not.

Senator MALONE. You just assumed it was counterpart funds? Mr. WALSH. Yes, sir. Magnesium, 1,269 tons, which came out of Norway; mercury, 102,502 flasks.

Senator MALONE. Where does that come from?

Mr. WALSH. Most of that came out of Italy, sir.
Senator MALONE. Did any of it come from Spain?

Mr. WALSH. No, sir. There was no ECA program in Spain. Senator MALONE. You think you are discussing only counterpart funds?

Mr. WALSH. That is right. Mica, 330,660 pounds. That came out of Madagascar.

Senator MALONE. Madagascar is controlled by the French?

Mr. WALSH. Yes.

Senator MALONE. Do you have any explanation to make about receiving these materials as to what they were charged the counterpart fund per pound?

Mr. WALSH. We would have to refer to the contract to see what the arrangement was.

Senator MALONE. You might also have to refer to the contract to find out if we advanced other money to companies as we apparently did in Morocco.

Mr. WALSH. That will come out of the study that Mr. Medley is going to give you.

Senator MALONE. That will cover this whole situation?

Mr. WALSH. Palm oil, 18,430,006 pounds, which all came out of Sumatra.

Senator MALONE. That is a colony?

Mr. WALSH. It was a Dutch Colony.

Platinum, 44,046 ounces. That came out of United Kingdom.
Quinidine, 1,899,999 ounces, all of which came out of Holland.
Rare earths, 345 tons. That came out of Holland.

Rubber, 61,841 tons, all of which came out of British-controlled colonies in the Far East.

Sperm oil, 9,350,645 pounds. That came out of Norway and the United Kingdom.

Tantalite, 2,385 pounds. That came out of the United Kingdom. Tin, 450 tons, which came out of the Belgian Congo.

Tungsten, 5,987 pounds, and that came from Portugal.

Tanning extracts: chestnut, 1,252 tons, which came out of Italy; and wattle, 1,444 tons which came out of Holland.

ZINC

Zinc, 3,271 tons, which is partly from the Zellidja deposit in Morocco, and also from Germany, Greece and Italy.

Those are the receipts as of June 30 under these programs.

Senator MALONE. Apparently, you have no information with you, Mr. Medley, but I would like to know just how much money we have advanced in each case, if any, to companies producing this material and how it was to be paid back.

I think you will find that there was nearer $25 million advanced to Morocco companies direct from some agency here in America, whether it was ECA or MSA or DMPA or whatever, and a lot of it to the Newmont Mining Corp., New York, subsidiary.

Mr. MEDLEY. As I recall the figures-and we will certainly supply them in detail-the total amount of the ECA contracts transferred to us for servicing amounted to approximately $195 million.

Senator MALONE. Foreign contracts?

Mr. MEDLEY. Yes. Those contracts are being serviced primarily in the London district office, which has recently been put under Mr. Walsh.

Senator MALONE. What do you mean by the "London district office"?

Mr. MEDLEY. DMPA had a London regional office established primarily for two purposes: One was to service these

Senator MALONE. In London?

Mr. MEDLEY. In London. But they are employees of the United States Government. They now report to Mr. Walsh.

Senator MALONE. They are still there?

Mr. MEDLEY. Yes, sir.

Senator MALONE. How many employees do you have there?

Mr. MEDLEY. There are about 27, I believe it is, now. It will go down to 19 by the end of this quarter.

Senator MALONE. All right, you may furnish that material for the record.

I have here some material that I want to insert in the record at this point for comparison purposes. One insertion shows an analysis of Federal assistance from July 1, 1950, to March 31, 1953. I submit that for the record, and it will appear at this point.

(The document referred to follows:)

Analysis of Federal assistance for foreign and domestic minerals expansion programs, July 1, 1950, through Mar. 31, 1958

Senator MALONE. I have here in detail an analysis of Federal assistance for minerals expansion programs, July 1, 1950, to March 31, 1953, part I, domestic minerals expansion program in thousands of dollars, with footnotes of explanation, and an analysis of Federal assistance for minerals expansion programs, July 1, 1950, through March 31, 1953, part II, foreign minerals expansion program.

These two tables, with their expansions, I will submit for the record at this point.

(The documents referred to are as follows:)