Defense Materials Procurement Agency-Contract Negotiations Division, contracts executed to date

Defense Materials Procurement Agency-Contract Negotiations Division, contracts executed to date-Continued

1 Subsidy.

Letter of intent to enter into contract provided adequate reserves are evidenced.
Period expired and letter of intent is withdrawn.

Not finally determined.

• Government has right to terminate on 90 days' notice. Average.

30 cents for deliveries through December 31, 1954; 30 cents for deliveries not exceeding 5 million pounds January 1, 1955 through June 30, 1955; and 27.5 cents for deliv

eries after July 1, 1955.

1 Government buys East Rim ore and pays Falconbridge to refine it.

1 Sufficient for purposes of smelting contract.

11 Foreign contracts negotiated by Contract Negotiations Division.

12 This contract is based on the minerals development program.

13 Development contract since terminated.

14 Company in bankruptcy; operations discontinued.

15 No production.

16 Zinc concentrates (60 percent).

17 This contractor receives, samples and assays manganese ore under the manganese purchase program.

Go ahead, if you have a further statement to make.

Mr. FORD. Yes, sir. In connection with the Compania de Minera Hueheutenango contract, I said that the contract was dated August 29, and represented the fulfillment of what I thought to be a verbal commitment that had been made. I have since discovered that was not correct, and that as a matter of fact, a letter of intent was executed on February 5, 1952, which outlined all of the terms of the contract and the document dated August 29, 1952, was formalizing the letter of intent, which was something that we were required to do by the terms of the letter of intent anyhow.

Senator MALONE. Very well.

Mr. WALSH. Senator, may I ask one question in connection with the data on the stockpile contracts? Would you want that information limited to metals and minerals, or would you want all contracts? Senator MALONE. All contracts.

Mr. WALSH. For example, in rubber we have given you today as one of the exhibits the list of every company we have done business with. Should we repeat that? You requested that Thursday, and we delivered it this morning.

(Discussion off the record.)

Senator MALONE. On the record again. We will revert to titanium metal. Who is responsible for the titanium contracts?

Mr. FORD. I am, sir.

Senator MALONE. Will you outline the existing contracts and the status?

Mr. FORD. We have three of them. We have the Titanium Metals Corporation of America contract for a plant located at Henderson, Nev. The Titanium Metals Corporation of America is a jointly owned subsidiary of the National Lead Co. and the Allegheny Ludlum Steel Co. The contract was entered into on July 25, 1951. It provides for the company to complete and operate a plant for the production of 3,600 tons of titanium metal sponge per year for a period of 5 years.

The Government, through Defense Materials Procurement Agency, advanced $15 million to the company to construct the plant. Let me correct that. They authorized an advance of $15 million. The company was granted a certificate of necessity for 90 percent accelerated amortization, and they were required under the terms of the contract to be in production by May 1, 1952. They have not been able to reach capacity production.

Senator MALONE. Did they start to produce on the date mentioned? Mr. FORD. They got some production before that, Senator. They reported 25 tons of production during the last quarter of 1951 and 60 tons during the first quarter of 1952. Their production per quarter has shown an increase, but it is not yet at the required rate, and it appears improbable that it will reach that rate during this year. Senator MALONE. What is the rate of production at the present time? What was it in the third quarter?

Mr. FORD. I understand that they reached 275 tons in the third quarter. I do not have the figures on the third quarter available. Senator MALONE. What will be the production per quarter when they reach their requirements?

Mr. FORD. 900 tons.