Mr. BARING. Who is responsible for issuing DO priorities for distribution of mining machinery?

Mr. WAMPLER. I don't believe that anyone has the authority at the present time to issue a DO on a mining-machinery manufacturer to force the delivery of the mining machinery. The DO's are operating in the material fields rather than the finished-product field.

Mr. BARING. Many companies are having great trouble in getting DO orders.

Does Wrangler have control of that function?

Mr. WAMPLER. Is Wrangler the name of a person? I don't happen to know him.

Mr. BARING. You make suggestions in that regard or have control of that function?

Mr. WAMPLER. Yes. I have quite a bit to do with the use of the DO priorities. Basically, this is the way it is working thus far. The military, primarily, places DO ratings on their procurement contracts, which enables their prime contractors to obtain materials and have preferential standing with respect to getting component parts. The problem in the mining-machinery field is chiefly one of the mining-machinery manufacturers, as I understand it, having had difficulty in obtaining adequate quantities of steel. As a result of that situation, we have recently authorized mining-machinery people to be given assistance by NPA in getting adequate quantities of steel. This gives them a preferred position in the general "scramble,” if I may call it that, for steel, practically on a par with the military. Mr. BARING. Suppose a mining engineer needs a pump very badly, how does he go about getting it?

Mr. WAMPLER. Of course, the first step would be to go to the normal source of supply and see if they couldn't get one. Presumably if the pump manufacturers are producing at adequate rates they will be able to get one, just in the normal commercial process. If they do have trouble, Dr. Boyd, I think, has authority to direct the delivery of mining machinery if he deems it to be important enough to get the mining machinery to a particular mine. You are getting me a little out of my field here, and please understand this is my understanding of how that particular step works. In doing that, I am pretty sure he collaborates with the appropriate NPA division. There are industry divisions for various kinds of machinery, you know, where they keep contact with the industry groups and try to find out what their problems are and give them such assistance as is necessary, and in certain instances limit them as may be necesary to free-up supplies of metal for other more important uses.

Mr. BARING. I asked the question, why the mining companies are having a hard time getting their equipment.

Mr. REGAN. Has steel for the mining equipment been allocated? Mr. WAMPLER. Yes.

Mr. REGAN. It might ease up that situation.

Mr. WAMPLER. We are hopeful that it will.

Mr. REGAN. I would like to say to the committee that the clock would indicate that it is past the hour, and the Speaker did authorize us to hold meetings in the afternoon while the Congress is in session. I would like to know how the members feel about it.

We have on this present set-up here, Dr. Morgan and Mr. Woodside. We might hear them between 2:30 and 4 o'clock if the members

felt like coming, and that would wind up the hearings until sometime later on in the last of the month or first of May.

Do the members feel like sitting this afternoon with the permission of the Speaker?

Mr. SAYLOR. That will be from 2: 30 to 4?

Mr. REGAN. Unless there are objections to that, we will arrange to meet with Dr. Morgan, General Farrell, and Mr. Woodside. If you can arrange to be with us, we will appreciate having you. Thank you, Mr. Wampler, for your information and being with us. Mr. WAMPLER. Yes, sir.

Mr. REGAN. We will meet at 2:30.

(Thereupon, at 12:07 p. m., a recess was taken until 2:30 p. m.) (The subcommittee resumed at 2: 30 p. m.)

Mr. REGAN. The committee will please come to order.

This is the convening of the session we held this morning, at which time we heard certain members of the Defense Production Administration. We are having a hearing now, from 2:30 to 4 o'clock, for the purpose of winding up, temporarily, at least, the hearing of that particular part of the minerals set-up, and Dr. Morgan is present.

Dr. Morgan, we would like to hear from you now. I believe you have a prepared statement.

Dr. MORGAN. I do, Mr. Chairman. Would you like me to read it? Mr. REGAN. If you will, read it or summarize it.

Dr. MORGAN. It is relatively brief; so I will read it.

Mr. REGAN. Will you state your name and position to the reporter, please?

Dr. MORGAN. Yes, sir.

My name is John D. Morgan, Jr., and at the present time I am Director of the Materials Policy Division, Defense Production Administration, reporting to Mr. Edwin T. Gibson, Deputy Adminis trator, whom you heard this morning.

STATEMENT OF DR. JOHN D. MORGAN, JR., DIRECTOR, MATERIALS POLICY DIVISION, DEFENSE PRODUCTION ADMINISTRATION

Dr. MORGAN. I was educated in the field of mining engineering and hold the following degrees: B. S., M. S., Ph. D., E. M. I am a member of the American Institute of Mining and Metallurgical Engineers and several other engineering and scientific societies. I have no financial interest in the mineral industry.

EXPERIENCE RECORD OF DR. MORGAN

I was commissioned a second lieutenant in the Corps of Engineers. United States Army, in 1942, and during World War II was promoted through the grades to major, Corps of Engineers, and served with an engineer combat group in the Pacific theater.

From October 1948 to February 1951, I was assistant for materials and stockpile policies, National Security Resources Board, Executive Office of the President, and throughout 1949 and 1950 represented the NSRB on the interdepartmental stockpile committee of the Munitions Board.

My personal views regarding United States mineral policies are undoubtedly familiar to several members of this subcommittee, since

they were set forth in my book the Domestic Mining Industry of the United States in World War II, a Critical Study of the Economic Mobilization of the Mineral Base of National Power, printed by the NSRB in 1949 and made available to all agencies concerned with mineral problems. This study was used, I understand, in drafting H. R. 6082, Eighty-first Congress, Federal Minerals Coordination Act of 1949, introduced by the Honorable Walter S. Baring, of Nevada, on August 22, 1949. This study has been made available to the new agencies recently established under the Defense Production Act of 1950, including the DPA and the Office of Defense Mobilization, and it has also been made available to the President's Materials Policy Commission (Paley Commission), as have other studies which we originally developed for the NSRB.

RESPONSIBILITIES OF MATERIALS POLICY DIVISION, DPA

The Materials Policy Division of the DPA is responsible for advice on broad policies and programs intended to expand supplies of raw materials and to channel them into programs essential to the defense effort of the United States. Inasmuch as the DPA was organized only a short time ago, our first efforts have of necessity been focused on the steps required to insure effective coordination of materials policies inside the DPA and among the several agencies concerned with the defense program and with raw materials. The Materials Policy Division renders staff assistance regarding policies and programs determined to be essential either at the Vital Materials Coordinating Committee or elsewhere. Thus far first priority is being given to the solution of pressing current problems.

It is my personal view that adequate supplies of raw materials, particularly those designated as strategic and critical, are among the cheapest forms of national-security insurance that can be provided for the United States. Most of the strategic and critical materials, particularly the metals and minerals, occur naturally in only limited quantities, and at the same time demand therefor is rising throughout the entire world. Moreover, mineral materials generally do not become obsolescent, and, if stockpiled, are not subject to deterioration. The normal work of the Bureau of Mines and the Geological Survey, the efforts of the Munitions Board and the Emergency Procurement Service under the Stockpile Act, Public Law 520, Seventyninth Congress, and the mineral development activities of the Economic Cooperation Administration, have all been pointed toward improving United States strategic mineral supplies. Under the authorities provided by the Defense Production Act of 1950, the work of these agencies is being accelerated and additional programs designed to expand supplies of materials are underway.

You heard this morning from Mr. Gibson about the Vital Materials Coordinating Committee and how it functions; so I have not covered that part in my statement.

That is the end of my prepared statement, Mr. Chairman.

Mr. REGAN. Doctor, do you wish to supplement your statement orally now as to just what you have done since you have been in this new position?

I see it is your job to set up the mineral policy of the Defense Mobilization. Will you tell the committee just what steps have been

taken to bring about the objective with which this committee is concerned and encouraging the exploration and development of the hard minerals that may be found in these United States under the law passed last September?

Dr. MORGAN. Well, Mr. Chairman, we don't set up the entire policy for the country at any one point. The Defense Production Administration was organized in early January of this year, and I joined it in February.

At the present time, we have been working with the existing agencies that do formulate national policy, pulling together all the divergent aims of these many different agencies with the primary purpose of

1. Expanding supplies of these materials; and 2. Channeling them into essential programs.

We don't have any single document that you might call the national mineral policy that could be applied across the board; but, instead, we review the situation for each particular metal and mineral and decide in the light of current and estimated future supply-demand relationships what the policy should be.

I may say in this case that you heard Mr. Wampler describe this morning the mechanisms through which they are seeking to develop accurate requirements. That has been going on with not that degree of refinement throughout the Government ever since the Stockpile Act was passed; so, in the case of most of the strategic and critical materials-in fact, in the case of all listed as strategic and critical under the Stockpile Act, Public Law 520, Seventy-ninth Congress-we have fairly good ideas as to which are critically short and which are in relatively easy supply, and we have not awaited the development of detailed, accurate, pin-pointed requirements before taking essential action.

As a result of our discussions about different materials at the Vital Materials Coordinating Committee, the National Production Authority has issued orders of several types. They have issued inventory limitation orders that forbid the building up of industrial inventories of these materials beyond a certain point.

In the case of materials in short supply-and we are concerned not only with metals and minerals but with chemicals and rubber and agricultural products as well in our Division-the National Production Authority, where necessary, has issued orders limiting use to a certain percentage of a base period, or perhaps cutting out completely the civilian use of certain materials.

At the same time I think this committee will recognize, as we all do, that under Public Law 520, Seventy-ninth Congress, mineral-development activities have been going on for the past several years. The Emergency Procurement Service has contracts for materials for the stockpile with domestic producers and with foreign producers. They have the legal authority to make negotiated contracts. They could pay in the preemergency period above market prices. Months ago, as was brought out yesterday or the day before in this committee, the previous Government limitation of a 25-percent differential under the Buy-American Act was lifted by Dr. Steelman and the Emergency Procurement Service over the past several months has made many contracts calling for delivery of material to the national stockpile.

At the present time we are working with exactly the same people that we have been working with for the past several years, asking how can their present programs be accelerated even more, what previously considered uneconomic deposits can be brought into production, what additional conservation measures can be taken in industry, and try to balance the whole thing.

In the case of some 70 strategic and critical materials, it is not an easy job, but we feel that we are making some progress.

Mr. REGAN. Is it your intention to go into rubber and petroleum and all those things, or are you just looking after the hard-mineral policy?

Dr. MORGAN. In the Materials Policy Division of the Defense Production Administration, we are concerned with all raw materials, although there is no doubt in my mind or in our minds that the most critical shortages are undoubtedly in the field of metals and minerals, and those most difficult to alleviate are in the field of metals and minerals, and so most of our time is taken up with metals and minerals. The amount of time that we spend on rubber or wool or synthetic fibers, or something like that, is quite small compared with the time we spend on metals and minerals.

Mr. REGAN. Thank you, Dr. Morgan.

Do you have some questions?

Mr. ENGLE. Inasmuch as you are a Ph. D., that qualifies you to be addressed as "Doctor" Morgan; does it not?

Dr. MORGAN. Some people do that. I don't know whether that helps or hurts in Washington, but they do.

(Discussion off the record.)

Mr. ENGLE. Your Ph. D. was gotten for writing this book on the domestic mining industry of the United States in World War II, was it not?

Dr. MORGAN. Yes, sir; that was my thesis.

Mr. ENGLE. And you wrote it where?

Dr. MORGAN. At the School of Mineral Industries of the Pennsylvania State College.

Mr. ENGLE. Was that in connection with the war training program? Dr. MORGAN. No, sir; I went there at the end of the war to do graduate work under the GI bill.

Mr. ENGLE. It was a postwar training program?

Dr. MORGAN. That is right, sir.

Mr. ENGLE. How did you get the name of the Industrial College on the face of your book?

Dr. MORGAN. In the course of doing research work for the book, I spent 2 or 3 months in Washington and in that time I had the privilege of looking over some of the studies that had been made at the Industrial College of the Armed Forces at Fort McNair and they gave me access to most of the material that they had there.

Mr. ENGLE. I see that your book was printed by the National Security Resources Board in 1949.

Dr. MORGAN. Yes, sir.

Mr. ENGLE. It is a public document; is that right?

Dr. MORGAN. Yes, sir.

Mr. ENGLE. The Stockpiling Act was set up in 1946. Did you operate on any liaison basis with the Munitions Board when you wrote this book?