There are cases where mines operated during the late war and later closed down will be reopened. These mines should have, with some rehabilitation, sufficient facilities to house employees up to the former number employed. The present pressure to produce, as regards certain metals, appears even greater now than it was during the war and an increase in employment over former employment can be expected at such mines.

In other cases, new ore bodies have been discovered by the exploration programs of the United States Geological Survey, Bureau of Mines, and private industry which are now being put into production or planning to get into production as soon as men and equipment can be transported to the site and the mine and mill personnel housed.

Increased domestic supply of uranium, tungsten, beryl, manganese, and molybdenum will depend almost entirely on the opening of newly discovered or exploited deposits and mostly in isolated areas.

Increased domestic supply of fluorspar, zinc, and chromium can come in part from increased output of presently operating mines and from reopening mines producing during the late war and subsequently closed down. This increase in current supply would only bring it up to the war peak and any increase above that peak would have to come from the exploiting of newly discovered deposits or extensions of old ore bodies. Such increase would probably be at least half in isolated areas.

The current commodity program aims at increases in 1951-52 as high as 30 percent over 1949 production of certain metals and an average increase in excess of 10 percent in all the above-listed metals. Such increases must involve development of new ore bodies, mostly in isolated areas.

There were some housing projects built during the late war that are still being occupied on a priority basis, or are vacant at present but capable of being rehabilitated (Deming, N. Mex.). A very few of these are close enough to be useful. DMA was able to obtain priorities for defense-mine workers, making them eligible for these units, but the results to date have been disappointing. The United States Vanadium Co. at Pine Creek, Calif., is being urged to increase its production of vitally needed tungsten; this is currently our largest producer of tungsten. One of the principal deterrents to increased output is the lack of 35 housing units at Pine Creek. Housing priorities for their workers was obtained, but to date only four families have been accepted, and in the meantime increased production lags.

There are some isolated marginal mines capable of producing substantially under a subsidized price but which would close down at the end of the emergency or when stockpiles reached par. Housing for such mines would be wholly temporary and should be designed to provide the bare necessities of healthy dwelling only and would be valueless at the end of the emergency. Such housing would require 100 percent mortgage insurance. Rentals collected during occupancy would reduce the mortgage, but the balance remaining would have to be written off. In some cases salvagable prefabricated houses might be built and the net loss reduced. In a very few cases where mines are in hunting, fishing, and skiing areas, houses might eventually be sold to sportsmen if well built and in scenic surroundings.

A summary of the above statements indicates that a large number of new housing units will be necessary to any expanded production program of critical metals and minerals. A very large proportion of this needed housing will be at marginal mines and in isolated areas, with private capital very reluctant or refusing to assume the risk. Some defense-housing funds appear vital to the defense-production program.

General Statement

MANPOWER BRANCH

At the inception of the Defense Minerals Administration, even though no serions labor shortages existed at that time, it was evident that provision should be made to meet manpower problems that would undoubtedly arise in the metals and minerals industry. This was to the end that the critical labor situation that developed during World War II, and its disastrous effect upon production, might be avoided even during a period of partial defense preparation and mobilization. It will be recalled that during World War II soldiers were released from the Army on the condition that they accept employment in the mines. Unfortunately, the relatively inexperienced men released were a very poor substitute for the skilled workers previously drafted, and metal production suf

fered accordingly. It is hoped that careful advance planning and programing by the Defense Minerals Administration will avert a similar situation.

The manpower situation in the metals and minerals industry today is becoming tighter but has not yet reached the critical stage. It is believed that through careful planned action the Defense Minerals Administration will be able to assist materially in securing and maintaining adequate staffing to insure the maintenance and expansion in production of those strategic metals of vital importance to national defense. The specific manpower problem against which planning must be done is that which manifests itself in any kind of stringent labor market situation. It must be recognized that mining employment in terms of wages, working conditions, living conditions, and recreational facilities is, generally speaking, considered less attractive than other defense employAs a consequence, any movement of workers out of the industry, regardless of the justification for so doing, can easily impose a situation upon the industry from which it cannot recover so long as defense employment is available. It is for this reason that a thorough planning job must be done for, and with, the mining industry.

ment.

Problems foreseen and action taken or planned

In general, the manpower problems to be faced fall into one of two categories. These are (1) the maintenance of present working forces, and (2) the expansion of present working forces. In that order, the problems to be met and the action taken or planned is described as follows:

(1) Maintenance of present working forces-losses to military services.-One of the most serious problems facing the metals industry is the probability of losing skilled workers and key personnel to the military services. During World War II a near-catastrophe, productionwise, occurred as the result of promiscuous withdrawals of skilled men from the metal mines. We hope to avoid a repetition of this experience and to that end have worked closely with the Department of Defense, following a procedure recommended by that agency for requesting, in advance, the delayed military activation of reservists and National Guard men. Listings of personnel from various metal and mineral producers, whose deferments have been requested by employers and recommended to the Department of Defense by this Administration, are available. It is impossible at this time to measure the effectiveness of our efforts in terms of the actual number of deferments that will result. We are continuing to file additional listings of necessary personnel as they are received from industry. We are also working with employers on individual deferment problems as they arise, and are participating in appeals to the military services in efforts to retain key personnel when the retention of civilian industrial employment by reservists is clearly of greater significance to national defense than their return to military service.

Selective Service withdrawals have not seriously depleted the working forces in the metals and minerals industry up to this time. However, in anticipation of possible inroads, efforts made early in the program resulted in having the occupation of "metal miner" placed on the list of critical occupations, developed by the Department of Labor, which has been transmitted to local Selective Service boards for their information and guidance. Deferment of skilled underground workers has not been made mandatory, but it may well be that this will be an essential next step to guard against any reduction in the output of metals and to make possible expansion as it becomes necessary for national defense or essential civilian activities. Plans in this connection are being cautiously formulated, and data are being assembled which will probably demonstrate the advisability of granting blanket deferments to skilled metal miners. The following tabulation illustrates the effect on production that the withdrawal of miners from one State, studied in February, would have:

If the losses above were multiplied by the number of metal-producing States, the serious reduction in the output of three strategic metals is clearly apparent.

For this reason the Defense Minerals Administration can only meet its manpower responsibilities adequately if all efforts to avoid loss of skilled workers. to Selective Service are made.

Wage-rate problems: We have faced the fact that the metal industry will be in competition for manpower with other industries on an increasing basis. While this industry cannot hope to pay the high wage rates apparently possible in other industries, it is believed that moderate upward adjustments may improve the competitive situation and operate toward the maintenance of adequate personnel. With this in mind, we are working closely with the Wage Stabilization Board and with individual companies of the industry in order that wage increases, as they become justified and are requested, may be expedited. As claimant agency for the metal industry, the Defense Minerals Administration must review each request for wage increases and certify as to their necessity. Cases involving wage adjustments are just beginning to develop, and an increase in their volume is anticipated.

Improvement of working condtions: The Defense Minerals Administration recognized this problem as one involving advisory activity only. The problem is serious, however, since poor working conditions and thoughtless personnel practices can have detrimental effects on working forces, and resultant reduction in metal output is inevitable. We plan, in all cases where such action. is indicated, to counsel the industry along the following lines: (a) insuring the best possible working conditions to the end that employees may have no just cause for quitting their jobs; (b) learning the reasons for voluntary separations through systematic exit interviewing and wherever possible correcting the causes that prompted the worker to quit his job; (c) avoiding the discharge of workers wherever it is possible for the worker to correct faults or make adjustments to get in line with management policy.

(2) Expansion of present working forces—training.—The problem of increasing the number of skilled miners in order to keep abreast of expanded production requirements can be partially met through the initiation of training programs to develop miners from unskilled men. In this connection the Defense Minerals Administration can, again, exert only advisory efforts. However, the possibility for increasing the number of miners through training has not been generally recognized, and we plan to promote this idea within the industry in cooperation with the Bureau of Apprenticeship Training in the Department of Labor and the United States Office of Education. Large producers are already using training as a means of improving or expanding their skilled worker complements. The promotion of this device and its extension to smaller producers seems clearly to be one means through which, by its encouragement, the Defense Minerals Administration can meet another phase of its manpower responsibilities.

Recruitment of additional workers: Some important metal producers already are experiencing shortages of workers necessary to enable them to attain capacity production. Other shortages will undoubtedly develop despite the best efforts of the industry to take steps already mentioned to maintain adequate staffing. Liaison with the Department of Labor and its offices of the United States Employment Service have long since been established, and plans for recruitment, particularly in the Western States, were discussed with the Department of Labor officials, and recruitment procedures reviewed. It is the intention of the Defense Minerals Administration to maintain current information concerning the manpower requirements of the industries under its cognizance as claimant agency. We must know these requirements by geographic area and by cate gory of skill to the end that we may assist the Department of Labor by identifying recruitment needs as they arise. This requires resorting to all possible sources of labor demand and supply information and continuous contacts with metal producers and industry groups to insure the fullest possible knowledge of the manpower situation and the most expeditious meeting of labor shortages as they develop.

Foreign sources of labor supply: Increasing requirements of the military services and the increased needs for manpower in new or expanded defense plants may make it essential that we seek workers from other than domestic Sources. We have explored the utilization of Mexican nationals but have for the time being determined that this should be a last-resort measure since the importation of Mexican workers can only be accomplished by lengthy negotiation with the Mexican Government, and there is considerable opposition at this time to bringing Mexicans into this country for anything other than argicultural employment.

We are working with the Displaced Persons Commission with a view to securing experienced underground miners from European countries. Our efforts to date have been encouraging, and we are presently negotiating for approxi mately 150 skilled European workers which would permit the reopening of a copper mine which appears to be a potentially important producer. There is a fairly promising possibility that larger numbers of Europeans with previous mining experience may become available, and it is the responsibility of the Defense Minerals Administration to see to it that such workers are directed to locations where they can be utilized to the greatest advantage in the national interest.

Utilization of workers in most productive mines: We are in the process of resuming the development and issuance of the Minerals Classification List, which served a highly worth-while purpose during World War II. This device ranks metals in the order of their importance to national defense and essential civilian activities and, within each metal, the producers are listed in the order of their productivity per employee underground. Thus, as mining labor supply becomes available through any source, it can be directed to mines that will insure the greatest increase in metal output. It is planned to issue this priority listing for the metal industry each month. It will be used as a guide to the United States Employment Service and any other sources of domestic or foreign labor supply.

The above describes, in general, the manpower program planned by the Defense Minerals Administration. Other problems not now foreseen will unquestionably develop, but we view the preceding description as representing the basic manpower responsibilities that must be met and which are currently receiving attention.

STATEMENT OF THOMAS C. BAKER, DIRECTOR, FOREIGN DIVISION, DEFENSE MINERALS ADMINISTRATION

FUNCTIONS AND PROCEDURES, FOREIGN DIVISION

The Foreign Division was staffed the 1st of February for the following purposes:

1. To advise the proper authorities regarding the most effective measures and incentives for achieving the procurement of increased production of strategic minerals from foreign countries other than those in which the Economic Cooperation Administration operates, and which cannot be obtained in sufficient quantities at home.

2. Review all proposals and applications for loans, contracts, and other miscellaneous aid related to foreign mineral-production operations.

3. Deal directly with all applications and inquiries that are exploratory in nature, lacking in adequate data, or clearly outside the province of Defense Minerals Administration, as in the case of a prospect or undeveloped mine.

4. As first administered, the Foreign Division submitted its recommendations for approval or disapproval through the appropriate commodity committee to the Production Expansion Committee. However, to avoid unnecessary delays and duplication of effort, the following changes in procedure were adopted:

The Director of the Foreign Division replies, directly to the applicant if the project obviously is not suitable or feasible and, in doing so, supplies for the record adequate reasons for denying the proposal.

If the application seems to have sufficient merit and provides a satisfactory source of new or expanded production, the application and supporting data are sent to the appropriate commodity committee for its opinion as to whether the proposal fits into the over-all procurement program for that particular metal or mineral.

If the project meets the approval of the commodity committee, the Director of the Foreign Division then proceeds to negotiate with the applicant along the lines parallel to those followed by the Director of the Production Expansion Division in the case of domestic proposals.

5. Establish and maintain liaison with the State Department, the Export-Import Bank, and other appropriate Government departments and agencies in order that the provisions of a contract will be in accord with their policies. Scope of activities

To date the Division has written replies to more than 150 inquiries, letters, and proposals. Most of the rejections are immediate as they relate to applications

that do not meet the requirements for Government aid of any type; many of the replies furnish information requested of this Department.

Two recommendations were made to the production-expansion group before the procedures were changed for processing foreign proposals. One of these was for a 5-year tungsten-procurement contract and a 1,000,000-dollar loan for M. Hochschild, S. A. M. I., of Bolivia, for expanded production from the Bolsa Negra Mine; the other for a manganese-procurement contract with the Caja de Credito do Minero de Chile. Since the procedures have been changed, this Division has turned over to the Lead-Zinc Commodity Committee for their recommendation in the matter a proposal from the National Lead Co., covering the Santander Mine in Peru; likewise, a proposal to the Nonmetallic Committee from Fluorspar, Tolteca, S. A., covering an application for a loan of $98,750 for the construction of a flotation plant and the provision of other facilities to produce acid-grade fluorspar. The purchase of the resultant production would be the subject of further negotiation.

Discussions have also been held with high officials of the principal companies producing tungsten and tin in Bolivia and with two smaller concerns in connection with production expansion possibilities. No action has been taken with respect to these possibilities, except in the case of the Bolsa-Negra proposal, pending receipt of formal proposals which are to come forward as the result of the discussion. The deferment of action is due primarily to the fact that, except as noted, the Bolivian companies are unwilling to expand their capacity without first obtaining certain concessions from the Bolivian Government relating to relief from the current incidence of export taxes and foreign exchange restrictions; this they consider vital to any important expansion of production facilities. It is the intention of the Division to take the whole matter up with the State Department as soon as we can ascertain what the total expansion possibilities will entail and evaluate what they might mean to the Bolivian economy.

Difficulties being experienced

The procurement of strategic minerals from foreign countries is adversely affected by the following factors:

(a) The United States is at a great disadvantage in procuring many vitally needed minerals because of the higher smelting and processing costs and lower domestic prices, as compared to European costs and prices. As a consequence, true normal imports are being curtailed rather than increased.

(b) Despite the fact that the United States produces very little or no chromium, cobalt, tin, strategic grade mica, monazite, and beryl, utterly insufficient quantities of manganese and tungsten, and not enough lead, zinc, and copper, the emphasis seems generally placed by most of the agencies, as well as by Congress, on purchases at domestic prices on short-term procurement contracts. Most of the foreign projects offered to Defense Minerals Administration simply cannot meet these requirements.

(c) Restrictions prejudiced to mining activities and/or exports of certain mineral by foreign governments, as shown in relation to Bolivian tin and tungsten.

Prior to retirement at the beginning of 1948 from an active association with mining, the writer was managing director for Lake George Mines, Ltd., Captain's Flat, Australia. This position was held from 1937, following on a long engagement as general manager of the Fresnillo Co., Fresnillo, Zacatecas, Mexico. The writer also acts in a retaining capacity for Lake George Mines and in this capacity visited in 1949 some 29 different mines to obtain information regarding mining and milling practices. His present title is Director of the Foreign Division of Defense Minerals Administration with the duties and responsibilities outlined in the foregoing paragraph.

STATEMENT OF C. O. MITTENDORF, DIRECTOR, PRODUCTION EXPANSION DIVISION, DEFENSE MINERALS ADMINISTRATION

EMPLOYMENT HISTORY

On January 3, 1951, I joined the staff of the Defense Minerals Administration in the capacity of Acting Director of the Production Expansion Division. I was on loan from the Economic Cooperation Administration. On March 11 I was terminated by the Economic Cooperation Administration, and on the following day was officially transferred to the Department of Interior as Director of the Production Expansion Division. The previous 2 years, December 16, 1948, to