Mr. ENGLE. That is just what I was getting at and it has taken quite a while to get you to say so. In other words, what you are saying is that is what you wanted to see done in the beginning; is that right? Dr. MORGAN. As an individual I think it would contribute to a solution providing that all of the existing agencies can then be tied into that new agency.

Mr. DONOVAN. Will the gentleman yield?

Mr. ENGLE. Yes.

Mr. DONOVAN. Or provided they can all be wiped out and a new one set up?

Dr. MORGAN. Oh, providing.

Mr. DONOVAN. That is another question. It doesn't require a long answer. "Yes" or "No."

Dr. MORGAN. If you will permit me, sir, providing that the new agency has adequate authority and funds and a sensible mission to carry out.

Mr. DONOVAN. And sensible individuals to carry it out?

Dr. MORGAN. Yes, sir.

Mr. BARING. In view of the fact that you referred to my bill, 6082 of the Eighty-first Congress, you are acquainted with it; is it a very good bill?

Dr. MORGAN. I thought it was; yes, sir.

Mr. BARING. The Munitions Board gave this report:

It is noted that the functions and duties of the Coordinator as set forth in the bill are so broadly defined that it is not possible to determine the impact which its activities would have upon existing agencies.

Is it any better than the present set up? We have spent 3 days here. and we haven't been able to put our fingers on anything yet. Would you recommend passage of 6082 to take the place of the present set-up! Dr. MORGAN. In the field of metals and minerals.

Mr. BARING. In coordinating the present set-up.

Dr. MORGAN. I believe it would certainly help to clarify the prob lem in regard to metals and minerals. This Coordinator would have to consider the problem of the use of the materials and their conser vation in industry and all that sort of thing. He would have to tie in with the people who are doing that.

Mr. BARING. Do you know of any reason why the Munitions Board didn't think so?

Dr. MORGAN. No, sir. I am sure that their opinion was based upon reasonable study within their agency by the experts that they have.

ABOVE-MARKET PRICE CONTRACTS HELD NECESSARY FOR CHROME

Mr. ENGLE. Dr. Morgan, after we have gone through this whole business, the fact is that you say that your Agency has the chrome policy, but it isn't in execution, and there is no price on it; isn't that right? There is no price, and it isn't in execution; isn't that true! Dr. MORGAN. No fixed price that has been announced; that is

correct.

Mr. ENGLE. Let's just be practical about this. a chrome operator, and I walk up to you, and I have some chrome that I can produce at $115." can I get a contract for $115?

Let's say that I am say, "Dr. Morgan, I Under your policy

Dr. MORGAN. It wouldn't be clear whether you could or not. I think the best policy, thus far, is the one we put out in the case of tungsten, where, by guaranteeing a market and a price, you eliminate the need for all sorts of people with all sorts of papers coming to Washington. If they know they have a fixed price and if they have sufficient faith in the value of the dollar and its future for the next 5 years they can produce immediately.

Mr. ENGLE. That is a big difficulty.

Dr. MORGAN. They will go out and produce tungsten and sell it and they will either sell it at the $65 ceiling or, if the price drops below $63, the Government will support the price at $63.

Mr. ENGLE. But that isn't the policy you announced at all. Your policy, as I understand it, is one of policy with respect to paying above-the-market prices.

Dr. MORGAN. In the case of chrome or tungsten, sir?

Mr. ENGLE. Chrome.

Dr. MORGAN. I was speaking of tungsten as an example.

Mr. ENGLE. I know what the tungsten policy is.

Dr. MORGAN. I think that that is the simplest policy to put into effect and to implement.

Mr. ENGLE. Could you put that into effect on copper?

Dr. MORGAN. I can't say whether we would or not, sir.

Mr. ENGLE. You know very well that you can't do it and it won't work in the field of copper, because you would make a lot of big operators rich and get the biggest holler that you ever heard in the Nation. You can use it in certain fields.

Now, chrome is very different than tungsten. The world price on chrome is what, about $30 or $35, something like that. And we can't produce it in this country at that price. It is going to take between $105 to $120 a ton to bring out the domestic chrome production, isn't it?

Dr. MORGAN. Yes, sir.

Mr. ENGLE. Why should it take you 7 months to figure out that you would have to go above the world market or above the domestic market price to get any domestic chrome production. You have a spread of at least 4 to 1.

Dr. MORGAN. It didn't take the 7 months to arrive at that. We knew it all the time and the General Services Administration has had the authority to pay above market prices for domestic chrome for the stockpile all along. Even before the emergency.

Mr. D'EWART. But it hasn't authorized it. Why haven't they authorized it?

Dr. MORGAN. Because up until the time of the lifting of the 25percent limitation in August 1950, no domestic chrome miner could guarantee to produce specification-grade chromite within the 25percent ceiling and since that ceiling was lifted and they had higher ceilings that they could go to, they have apparently not been able to negotiate a contract that would get sufficient chrome at a reasonable price.

Mr. D'EWART. But at the present time we have a company that is willing to make a firm contract, provided you can go above the market price to the extent justifiable for a 5-year period, isn't that true? Dr. MORGAN. I don't have the details on that.

Mr. D'EWART. You have to have GSA authorize a price over the current market at the present time before you can get such chrome. Now, as a policy man, why don't you go ahead and have that authority granted?

Dr. MORGAN. Well, there is a question, not only in my mind, but with other people who are concerned with the problem, as to whether the best solution is to pay 3 times the current market price for domestic material, or to continue importation of specification grade material at market prices when the supplies coming in are adequate to meet the current needs of industry and to permit some additions to the national stockpile. There is no conservation order on chrome in effect today.

Mr. D'EWART. Mr. Wampler this morning testified and gave us a list of materials that are strategically short. One of these was chromium with an asterisk, which says "Current demand already exceeds available supply."

DEFENSE PRODUCTION ACT MAKES DEPARTMENTS RESPONSIBLE FOR ACCELERATED MINERALS PRODUCTION PROGRAM

Mr. ENGLE. There is one thing about it and that is that you can pull the domestic chrome out of the ground and put it in a stockpile and you haven't lost a national resource. It is up there. It is true it is costing the Government a little bit, but you have an insurance policy, too, and if some of these people who are doing so much talking around here are right, we will need an insurance policy.

I would be very fearful to have the responsibility that you have, Dr. Morgan, and not take care of the essential needs of this Nation. It is a fearful responsibility and if we should step off into an all-out war, I think that you and your people down there in that agency are going to come under the most grievous criticism any agency has ever faced and you are going to be charged with a criminal failure to meet a public responsibility if you haven't protected this country against a sure loss of the war into which we might go.

Congress has been willing to appropriate funds and put the money on the line and has stated the policy. Now, if we are wrong, the people back home will get rid of us pretty fast and send people back here who will do more precisely what they think should be done, but the responsibility is ours. We have stated the policy clearly and we are willing to go back and face the people we represent on the basis of that responsibility. If they don't like it, they can fire us. It is not your responsibility and you don't have to be reelected.

Mr. BENNETT. There isn't anything in the Defense Production Act of 1950 that requires these agencies to appraise the future, so far as imports of foreign metals are concerned before they get a domestic production program underway; is that right?

Mr. ENGLE. That is not incorrect, but even prior to that, Mr. Bennet, we passed Public 520 in the Seventy-ninth Congress in which we gave a clear mandate to the executive branch of the Government to protect this Nation with an adequate stockpile, and Congress wasn't quibbling about the cost either.

Mr. BENNETT. I would like to ask Dr. Morgan if he believes that had Congress passed a so-called mineral subsidy bill a couple of

years ago, whether we would be in the fix, the shortage we face in the critical metals today?

Dr. MORGAN. I think that had that subsidy program been in operation, there would undoubtedly be more mines in this country in production today and there would be an increase in the supply.

Mr. BENNETT. And there would be more metal, copper and chrome and various other types of critical metals available today. There would be more in the stockpile and more available for civilian use? Dr. MORGAN. That is correct.

Mr. BENNETT. Now, facing the situation we are facing today, why isn't the answer the same simple answer to this program-Congress has given you the authority and the money, why don't you go ahead and pay subsidy prices to marginal mine operators in this country and get the production that we need without waiting to see what is going to happen to Chile or to Africa or to any other foreign country or the imports that they might be able to send us?

Mr. ENGLE. Let me read you something. You just mentioned Chile. Here is a statement by Frank A. Ayer, Chief of Production of the Copper Branch of the old WPB, back in 1942, and here is what he said-it is as applicable today as then:

The shelling or bombing of power plants on the Pacific coast of Chile with the bombing of mine plants near the coast could cut off 550,000 tons of copper per year. Waterborne imports totaling 569,800 tons per year are constantly exposed to the danger of sinking.

Mr. BENNETT. Doctor, don't you think that in order to have an adequate supply of these critical materials that something has to be done and done soon to get these marginal properties around the country in operation and that the only way to do it is to subsidize them either through over-the-market price contracts or some other form?

Dr. MORGAN. I agree with you, sir, but within the DPA we must look to the agency having primary responsibility for metals and minerals to recommend in the case of each of the different ones what the most effective program would be. I wouldn't pretend to say that I know all the details of 70 different commodities, some of which are metals and minerals and others of agricultural origin and so on.

Mr. BENNETT. But you said earlier in your testimony that you were waiting, that there was no fixed policy on these things and that you were waiting to determine or to find out whether this foreign picture was going to clear up.

Dr. MORGAN. That is a factor in our consideration, a very big factor. Mr. BENNETT. Why should it be a factor? Are you going to wait until you find out how long we are going to be in Korea or some move is made in Europe before you make up your mind that there is a shortage of copper and chrome and other metals in this country, that something ought to be done about it?

Dr. MORGAN. Sir, there is no doubt that there is a shortage and there is also no doubt that none of the actions being taken by the Federal Government at the present time are being done as though an all-out war were going to start next week.

Mr. BENNETT. Aren't the shortages worse today in most of these critical materials than they were 6 months ago? Is that a fair statement?

Dr. MORGAN. Across the board, that is fair statement; yes, sir.

Mr. BENNETT. Is there any prospect that the situation is going to get better in the next 6 months, if we remain static?

Dr. MORGAN. In the case of only a few commodities will it get any better. In the case of aluminum where some plants are being reactivated and magnesium where some are being brought in that have been in stand-by there will be some alleviation but in metals and minerals the present shortage will probably get worse before it gets better.

Mr. BENNETT. Then why do we have to wait until these other factors, these foreign-policy factors are decided before getting this program under way? That is the thing that the people I represent can't understand.

Dr. MORGAN. I don't think we are waiting just for that, sir. We are doing as much as it looks as though we should do at the present time.

COPPER SHORTAGE AND NEEDS DISCUSSED

Mr. BENNETT. Well, you are dealing with copper. For example, Dr. Boyd was in here the other day and when I asked if copper was critically short he said "Yes." You are not willing to admit that. You say it is tight. Is it tighter today that is was 6 months ago? Dr. MORGAN. It is; yes, sir.

Mr. BENNETT. It is critically tight; would you say?

Dr. MORGAN. It depends on how you define "critical."

Mr. BENNETT. How do you define it?

Dr. MORGAN. I would say something is critically short when it would really significantly affect the security of the country.

Mr. DONOVAN. Let's consult Webster on that.

Mr. BENNETT. Some of these agencies curtailed the use of copper over some four-hundred-odd uses, civilian uses, the shortage is that grave. You can't buy a screen door or a copper pipe for your house; you can't get copper fittings, you can't buy a copper shingle. I am just trying to find out what you regard as critical. Automobile manufacturers are taking chrome off their cars, they are going to take copper out of their radiators. All of that sort of thing.

When does this stage get critical? When is something going to be done about it? That is the question that everybody is interested in and can't get the answer to.

Dr. MORGAN. Sir, I think that we are doing something about it. There is at the present time consultation between the Defense Production Administration and the Defense Minerals Administration as to the magnitude of the copper expansion program.

We are faced with this sort of problem: First, we have to set the general magnitude of the programs that we need. Once the general magnitude of the program is agreed upon, the negotiation of individual contracts or the setting of specific ceilings or incentives within that program are relatively simple and can proceed fairly quickly, but until we get interagency agreement as to the real magnitude of the copper shortage, we have a pretty difficult time. Just for one illustration, it has recently appeared in the newspapers that the armed services were going to use steel cartridge cases instead of brass. I don't think it is any secret here, although the exact figures are secret