Dr. BOYD. Our supply has been materially increased, Mr. Chairman, from foreign sources. Mr. REGAN. From Europe? Dr. BOYD. From India, Africa, and it is being increased in Brazil and other parts of the world. In 1949 we had to replace the Russian source elsewhere. That came from other sources. As the steel industry increases it demands more manganese and that has increased substantially in the past 2 years in the source of supply. INDIVIDUAL MILLING CONTRACTS REQUIRED Mr. REGAN. Now this plant that you discussed at El Paso and I assume the other areas in Butte and Deming and Batesville are also on a par; they are similar operations? You Dr. BOYD. Well they are all different. They have different problems of concentration, different problems of market source. can't give them a blanket program; you have to work it out individually. Mr. REGAN. Basically have you approved all of those? Do they look as though they are programs that you can recommend or give substantial Government backing to? Dr. BOYD. Yes, sir; they are. Mr. REGAN. How soon do you feel that any of those programs might be put in actual operation? Dr. BOYD. Well, they should be in operation any time now. It is just a question of solving this budgetary problem and having money available. Mr. REGAN. What is the nature of the budgetary problem that is going to handicap them? Dr. BOYD. The Butte and Philipsburg contracts are all negotiated, ready to be signed and awaiting assignment of funds. We have been trying to solve that problem so we could get it over to DPA for approval. It involves a commitment of several million dollars to support that operation during the life of the contract. Mr. REGAN. In Butte? Dr. BOYD. That is right; the same in Deming. Mr. REGAN. What about El Paso? How much is involved in that? Dr. BOYD. I couldn't tell you offhand. I could supply that for you, Mr. Chairman. It is at least $2 million or $3 million to support that. Mr. REGAN. Two or three million dollars for Government funds? Dr. BOYD. That is right, as a contingent commitment. There again we would only lose a portion of that in the increased cost that would result from producing there. Mr. REGAN. There are no funds available now for that program? Dr. BOYD. That is correct. Mr. REGAN. And will there be in this billion dollars that Mr. Schwartz referred to? Dr. BOYD. I should think so; yes, sir. Mr. REGAN. But you are not positive? Dr. BOYD. No; not positive. Mr. REGAN. That is a program in which the Government is going to buy the product, or are they going to put in the mill, or just what is the procedure? FINANCING OF MILLING CONTRACTS Dr. BOYD. In the case of Butte, the mill is already there, a Government-owned mill and the contract is to buy the product of that mill and provide a market for the mines in the area to have it processed at Butte. We have had the operators together and they agreed on an approach to it. In the case of the El Paso matter, a private company is going to construct the mill with a Government loan and with an assurance of the money. Mr. REGAN. Through what source will they get the Government loan? Dr. BOYD. They will come to us and we will recommend a loan from the RFC. Mr. REGAN. And then suppose they come to you and have cleared these technical matters of engineering to which you just referred as being the thing that is now holding them up. How long a time will it take then to get the program in operation? Dr. BOYD. It shouldn't be more than a week or 10 days. Mr. REGAN. Where does it stand today? Dr. BOYD. Then the RFC will give them a loan and they can go ahead with their construction and go to work. Mr. REGAN. Is it as simple as that or does it have to go through all of the different bureaus? Dr. BOYD. It will have to go through DPA for approval but they are now familiar with it so it shouldn't take long for them to approve it now and go to GSA for signing the contract. We have negotiated the contracts with GSA so they are in agreement with them now. There is no question of any further negotiation. Mr. REGAN. Has the price been agreed upon? Dr. BOYD. Yes, sir. Mr. REGAN. Of the finished product? Dr. BOYD. That is correct. Mr. REGAN. And they have established the fact they do have a reasonable supply of ore? Dr. BOYD. That is right, sir. We have investigated in the field and determined that. MANGANESE PROGRAM MUST AWAIT APPROPRIATION AND ALLOCATION OF FUNDS Mr. REGAN. Do I understand you to say that in a week or 10 days you might be able to clear that program if the money is available? Dr. BOYD. If money is available; that is correct. Mr. REGAN. There is no money now available? Dr. BOYD. That is correct. Mr. REGAN. If they are going to borrow the money from the RFC what other money would be needed? Dr. BOYD. The RFC money comes also out of the appropriations made in the Defense Production Act. Mr. REGAN. Out of the same bill? Dr. BOYD. That is correct. Mr. REGAN. Even though everything is all set and the technical engineering features are worked out and approved by you they still will not be able to go ahead until this additional appropriation is made? Dr. BOYD. That is correct. Mr. D'EWART. Or funds alloted out of the stockpile? Dr. BOYD. Yes; if funds are made available. Mr. REGAN. Now Mr. Elliott, suppose that Dr. Boyd is able to clear these manganese plants that he has discussed in these four different districts; do you know of any money that would be available to proceed with the program? Mr. ELLIOTT. The money, as Dr. Boyd indicated, will be the new money that is to be appropriated if provision has been made for those contracts in that new money. DISCUSSION OF POSSIBLE USE OF STOCKPILING FUNDS Mr. REGAN. Well, Mr. D'Ewart suggested that of this considerable sum that is left in the stockpiling fund, could any of that money be used to implement this manganese project? Mr. ELLIOTT. Mr. Regan, I would have to find out the answer to that question. Mr. REGAN. I wonder if you could. Mr. ELLIOTT. Yes, sir. Mr. REGAN. We have been hearing about manganese and what we are going to do if we have an all-out war, etc. What are we going to do for manganese? I don't know. A lot of people come to me and say they have low-grade ore, but of sufficient quality to supply quite a bit of manganese and that is one of the minerals we would like to see under this program get working. Dr. Boyd says he has gone into these things pretty thoroughly and in a week or 10 days he might clear these projects. Now if you have those funds in the stockpiling program of the Munitions Board, why could they not be used? Mr. ELLIOTT. If we have the funds, sir, that are available for manganese-I don't know how much we have committed already for manganese; that is, if we have funds that are within the stockpile objective the Munitions Board has set, that I would have to find out. Mr. REGAN. Could you furnish the committee with that information? Mr. ELLIOTT. I will furnish the committee with that information tomorrow morning. STOCKPILE FUNDS NOT AVAILABLE FOR DEVELOPMENT Mr. GUMBEL. Mr. Chairman, I would like to remark that there is no difficulty in using stockpile funds if the commodity is going into the stockpile, but if it is development, the product of which is going to be used by private industry, of course the stockpile funds are not available. Mr. REGAN. I understand but will a substantial amount of this manganese go in the stockpile or any of it? Dr. BOYD. This manganese should go into current consumption. Mr. MURDOCK. Mr. Chairman Mr. REGAN. Mr. Murdock, STATUS OF ARTILLERY PEAK, ARIZ., MANGANESE DEPOSITS Mr. MURDOCK. Repeating myself, I have been interested in Artillery Peak, which was mentioned by Dr. Boyd, specifically since May 18, 1937. I have not lost any interest meanwhile. In fact, it is rather increasing. I would like to ask you a few things about Artillery Peak. What is being done there, Doctor? I have received various reports. One report was that machinery and equipment is being moved away from Artillery Peak. That is rather disquieting to me. Can you give a report on that? Dr. BOYD. Well, Mr. Chairman, you remember we have been having rather a difficult problem in the metallurgy of extracting the manganese from that deposit and we have talked this over with this committee before and with the Appropriations Committee and we have attained funds to do the pilot-plant work on the Artillery Peak deposit. Now we are doing that work not at Artillery Peak itself, but at Boulder City, because we are constructing a new plant, which would be a waste of Government funds. That does not help the problem in Arizona itself but the plant is now almost complete. If there is any machinery being moved from Artillery Peak it is put in that plant to solve the metallurgical problem. We had the authorization from Congress this year to do it. Contracts have all been let, buildings are up and most of the machinery is on the ground, ready to go in. They will begin work on that in the next few weeks. Mr. MURDOCK. Thank you. DEPARTMENTAL PROCESSING OF MANGANESE CONTRACTS Mr. REGAN. Did you have a question on the manganese program? Mr. ENGLE. To summarize the situation you are trying to work out specific contracts in four or five places; is that right? Dr. BOYD. In most places we have already finished them. Mr. ENGLE. Do those contemplate actual production or are they pilot plants? Dr. BOYD. Those are actual production. Mr. ENGLE. How soon do you expect to have those in operation? Dr. BOYD. They could go in operation as soon as the clearance is made on the funds. Mr. ENGLE. The clearance is made on the contract? Dr. BOYD. On the funds. Mr. ENGLE. That interests me. After you get a contract lined up where does it go; after you O. K. it, where does it go? Dr. BOYD. We send it to the Defense Production Administration for certification to GSA. Mr. ENGLE. It would have to go to Mr. Searles? Dr. BOYD. No. Mr. ENGLE. It does not? Dr. BOYD. No, sir. Mr. ENGLE. Does it have to go up in that shop at all? Dr. BOYD. No. The manganese program itself, the over-all program had to go up there for approval and that is now done. Mr. REGAN. That has been done? Dr. BOYD. Yes, sir. Mr. ENGLE. In effect that program is to make selective contracts with specific producers? Dr. BOYD. That is correct. Mr. ENGLE. And on a premium basis? Dr. BOYD. Yes, sir, a varying premium from $1.50 to over $2 a unit. DUPLICATION OF EFFORT IN DEPARTMENTAL PROCEDURE CITED Mr. ENGLE. Why should it go over to him after you and your experts agree? Dr. BOYD. We can only recommend to the Defense Production Administration that they certify. That is the regulation at the moment, and the Executive order. Mr. ENGLE. Wouldn't it be a lot nicer if you just put your name on a contract and sent it over to GSA and told them to start buying or paying? Dr. BOYD. It would be nicer; yes, sir. Mr. ENGLE. What justification is there, Dr. Morgan, for your looking at this contract? What function do you perform? Dr. MORGAN. Sir, that is the function of the Defense Production Administration under the Executive orders implementing the Defense Production Act of 1950. Mr. ENGLE. That doesn't mean it is right and they have plenty of authority under the Defense Production Act to do just as they please. The thing I can't understand is why you have to have 16 people looking at these deals. The Defense Minerals Administration employs experts. They have consultants in there. They brought them in and paid them good hard American cash to be consultants. They are supposed to be experts. After they get through giving their expert advice and the man who is supposed to know most about it, to wit, Dr. Boyd says it is O. K., it has to go some place else to be cleared and a whole new bunch of people have to be convinced, a lot of them who are not miners at all and so the consultants have to go over and convince somebody in your plant; is that right? Dr. MORGAN. I don't think there is too much difficulty in DPA, sir. We are better organized than we were when we appeared before this committee last time. Mr. ENGLE. You mean you do not have quite as many hurdles on the obstacle course? Dr. MORGAN. We have knocked out a few of them, yes, sir; and our commodity experts, are working on a day-to-day basis with the staff of the DMA. Mr. ENGLE. That is what I am talking about. You mean to tell me you have a bunch of experts, too. Dr. MORGAN. We have a small select group working in DPA. Mr. ENGLE. Since they are small and select they are overburdened with work and have to review everything Dr. Boyd's outfit has done. Dr. MORGAN. Their review does not go into the financial details of a particular contract. Their review is simply limited to answering questions such as "Do we need this amount of manganese" and, know |