Mr. BRADLEY. A request came over from GSA, or possibly directly, from Mr. Griggs, I forget now, but in any event the Supply Division, through our Manganese Branch, recommended favorably upon the principle of purchasing his ore. The amount for which his ore should be purchased is a matter of negotiation with one of the other agencies. Mr. ENGLE. His letter said the specifications put the silica content at a figure that he could not meet. I think he said his silica content was 22 percent higher than the specifications.

Do you know anything about that?

Mr. BRADLEY. I am not familiar with the ore in that much detail. Mr. ENGLE. Is it possible to buy ore, say, with a high silica content and one that does not quite meet the requirements and use a blending process to come out all right?

Mr. BRADLEY. Yes.

Mr. ENGLE. That is GSA's problem isn't it?

Mr. BRADLEY. Yes.

Mr. ENGLE. We will get around to that a little later.

Do you have anything on that, Mr. Gumbel?

PURCHASES UNDER DEFENSE PRODUCTION ACT MADE IN ACCORDANCE WITH SPECIFICATIONS RECOMMENDED BY DMA

Mr. GUMBEL. Yes. We have always taken the position that those were technical matters that our friends over in Defense Minerals ought to tell us about. We are not metallurgists in any sense of the word. Mr. ENGLE. You two are lawyers, aren't you?

Mr. GUMBEL. No.

Mr. ENGLE. Mr. Elliott is a lawyer. You are a special assistant? Mr. GUMBEL. That is right. We would hesitate to determine, unless it was for the stockpile. Of course, if it is for the stockpile, we are bound by Munitions Board specifications, but if it is purchased under the Defense Production Act, we rely on Defense Minerals to tell us the types and grades of ores to purchase and the types.

Mr. ENGLE. I remember when I used to advise my local board of supervisors about the purchase of county equipment. Occasionally they would want to purchase a particular truck and then they would ask me to write the specifications in such a way that only that truck would fit the specifications.

It is altogether possible to completely put a program out of business by the specifications you write. I never particularly approved of that procedure, and I don't now.

Is Captain Maull in the audience?

Mr. MAULL. Yes.

Mr. ENGLE. Do you know anything about this, Captain Maull?

Mr. MAULL. Of course when it comes to Public Law 774, if the certification comes to us we will make the contract, based on the recom mendations of DMA, so that material would go into industry, not in the stockpile.

We would be required to buy for the stockpile the materials that meet Munitions Board specification.

Mr. ENGLE. If you are buying under DMA recommendation, whose specification would you use?

Mr. MAULL. The specifications they recommend.

Mr. ENGLE. What do you have to say about that, Mr. Bradley?

Mr. BRADLEY. My branch simply recommended the purchase of a certain quantity of Mr. Grigg's ore.

Mr. ENGLE. I am using his case merely as an illustration, you under

stand.

Mr. BRADLEY. Yes.

Mr. ENGLE. Have you given any attention to the proposition that you can blend ores and greatly expand the purchases, perhaps?

Mr. BRADLEY. Some judgment is necessary in these things and we reserve the right to exercise judgment.

Generally our principle-I am speaking here of the manganese branch-would be this, that if an ore were just slightly off grade and the opening of the mine from which that ore came were something that gave promise of developing an important source of managanese. even though it were slightly off grade, we would recommend that quickly.

On the other end of the scale would be an ore that was quite off grade from a small deposit which seemed to have no geological chance, and that one we wouldn't recommend.

Mr. ENGLE. You mean if it was a small amount; if it happened to be off grade with reference to silica and you had a great deal of ore coming in with low silica where you knew you could blend it there wouldn't be anything to lose would there?

Mr. BRADLEY. That is correct.

STATUS OF MANGANESE PROGRAM FOR DEMING, N. MEX., DISTRICT

Mr. ENGLE. Let us start with each one of these. How about Deming? What is the status of the program for the Deming, N. Mex., district? Is that out of your shop yet?

Mr. BRADLEY. Deming is out of the Manganese Branch, the Supply Division, yes.

Mr. ENGLE. Where is it?

Mr. BRADLEY. It was passed on to Mr. Mittendorf's division some time ago.

Mr. ENGLE. I got the impression Mr. Mittendorf is in the Production and Expansion Division of the Defense Minerals Administration; is that right?

Mr. MITTENDORF. That is right.

Mr. ENGLE. It is still in DMA, isn't it?

Mr. MITTENDORF. It has gone through my shop. Definitive recommendations have been made on the Deming ore-purchase program. The recommendations were made in collaboration with GSA and Dr. Boyd has approved an ore-purchase schedule for the Deming district.

It has the approval of GSA, and today a letter of transmittal will go to Mr. Gibson, recommending that it be certified to GSA.

I brought with me a copy of that proposed schedule for the purchase of the ores, which I would be glad to submit for the record. Mr. ENGLE. We would like to have it.

(The information is as follows:)

CHAPTER XIV-GENERAL SERVICES ADMINISTRATION

MANGANESE REGULATION; PURCHASE PROGRAM FOR DOMESTIC MANGANESE ORE AT DEMING, N. MEX.

Authority: §§ 1 to 6 issued under sec. 704, Pub. Law 774, 81st Cong. Interpret or apply sec. 303. Pub. Law 774, 81st Cong., sec. 303, E. O. 10161, Sept. 9, 1950, 15 F. R. 6105, 3 CFR, 1950 Supp.; sec. 2, E. O. 10200, Jan. 3, 1951, 16 F. R. 61. § 1 Basis and purpose. This regulation interprets and implements the authority of the Administrator of General Services to purchase manganese ores of domestic origin at Deming, New Mexico, for the fiscal years 1951-1956, as authorized by the Defense Production Administration on ‒‒‒‒‒‒、 1951, and outlines the attendant responsibilities and functions of the Administrator of General Services in purchasing such manganese ores for the Government. In accordance with the program set forth herein, the Administrator will buy domestically produced manganese ores containing not less than 15% manganese, in accordance with the specifications contained in this regulation.

§ 2 Definitions. As used in this regulation:

(a) "Administrator" means the Administrator of General Services.

(b) "Program" means the purchase of manganese ore as set forth in this regulation.

(c) "Depot" means the purchase depot of the Government at Deming, New Mexico.

(d) "Manganese ores" means crude ores containing not less than 15% manganese, mined in the United States, its Territories and possessions.

(e) "Long ton unit of manganese" means 22.4 pounds of manganese contained in a long ton of manganese ore.

§ 3 Participation in the program. Any person may participate in the program by notice given to the General Services Administration regional office, Building 1-C, Denver Federal Center, Denver, Colorado, in the form of a letter, postcard or telegram postmarked or dated by the telegraph office not later than June 30, 1951. Such notice shall state that the writer desires to participate in the program and will deliver manganese ores to the depot. Such notification must be signed and a return address given. Any person participating in the program will promptly be sent a certificate authorizing him to deliver manganese ores meeting minimum specifications f. o. b. depot.

§ 4 Deliveries. Manganese ores purchased under the program are to be delivered f. o. b. depot. Delivery of less than five (5) long tons of ore will not be accepted. Participants in the program must give the Government reasonable notice with respect to future deliveries of ore. Each delivery will be sampled by the Government at the depot and payment on an estimated recovery basis will be made in accordance with such sampling as provided in the schedule set forth below. Deliveries not conforming to the minimum specifications will be rejected, and expenses in connection therewith will be borne by the seller. § 5 Duration of the program. This program shall terminate and be of no further force or effect when 6,000,000 (4,320,000 recoverable) contained long ton units of manganese have been delivered to the depot and accepted by the Government under this program, or on July 1, 1956, whichever first occurs.

§ 6 Price schedule for ores. The price schedule for manganese contained in crude ores is based on paying $2 per long ton unit in a concentrate produced from these ores and acceptable to industry, and conforming to the specifications of, and subject to, the penalties and premiums set forth in Specification P of the Emergency Procurement Service, General Services Administration. Due consideration is given to the cost of converting low-grade crude ores to an ac ceptable product, and metallurgical losses occurring in the process of beneficia tion. Accordingly, manganese ores delivered to the Government and accepted at the depot will be paid for in accordance with the following schedule. Where the fractional manganese content is 0.5% or below, payment will be made

as though no fractional content were involved. Where such fractional content is 0.5% or above, payment will be made at the next higher figure.

The Government contemplates construction and operation of a sampling plant, testing and analytical laboratory at Deming, New Mexico. If and when this is done, in lieu of payment on the above schedule which employs the same recovery factors applicable to all ores delivered to the depot, payment thereafter will be made on the basis of laboratory testing on specific lots of ore, from individual shippers, and a new price schedule made which will reflect the laboratory-determined recoverability. The payment basis will remain the same rate of $2 per long ton unit of manganese contained in a product acceptable to industry the same estimated beneficiation cost, and subject to the specifications, premiums, and penalties of Specification P-30-EPS-GSA, set forth below:

Manganese content above 48.5% (dry basis); 1⁄2¢ for each 1.0%. Iron content below 6.0% (dry basis); 2¢ for each 1.0%.

PENALTIES

Manganese content below 48.0% (dry basis); 1¢ for each 1.0%, down to and including 44.0%. Below 44.0%; 4¢, plus 11⁄2¢ for each 1.0%. Iron content above 6.0% (dry basis); 1e for each 1.0%, up to and including 8.0%. Above 8.0; 24, plus 4¢ for each 1.0%. Silica plus Alumina content above 11.0% (dry basis); 1e for each 1.0%. Phosphorus content above 0.12% (dry basis); ¢ for each 0.01%.

The Government reserves the right to reject any lot which, on the basis of the laboratory testing, cannot be beneficiated to a commercially acceptable grade of manganese.

This regulation shall be effective the day of June, 1951.

ADMINISTRATOR.

MANGANESE PURCHASE PROGRAM SAID TO BE DESIGNED TO OFFER INCENTIVE TO PRODUCER OF HIGH-GRADE ORE

Mr. ENGLE. Can you summarize what is in it? My information is that it is too little and too cheap, and I would like to have your comment on that.

Mr. MITTENDORF. What we have done-first, as Mr. Bradley has pointed out, are trying to tailor these purchase programs to the individual district.

Mr. ENGLE. Can you speak a little louder, Mr. Mittendorf?

Mr. MITTENDORF. We have tried to tailor all of these programs to meet the requirements and the needs of the particular district as we see them. In the case of Deming, we have a vast amount of background from the experience of MRC during World War II in the purchase of ores. We have had exhaustive engineering studies of the properties and we have what we feel is a very realistic appraisal of the district's ability to produce, both from the standpoint of quantity of ores, and grade of ores.

We have exhaustive metallurgical tests which the Government and the private metallurgical laboratories have made on these ores. Using all of that background information, we have come out with a schedule of payment for ores which is about twice the amount that was paid during World War II.

Mr. ENGLE. That is the average, is it not?

Mr. MITTENDORF. That is the average.

Mr. ENGLE. But on the low-grade stuff you start with a very low price, do you not?

Mr. MITTENDORF. We do. The price curve falls off rapidly below 20-percent ores. It is intended to keep the Government from buying undesirable ores in great quantities which may never be beneficiated and from which we may never recover but a small part of the contained manganese.

The table that we have submitted gives an incentive for the better class of ores. It gives a definite incentive, I believe, to the small producer who mines ore selectively and cleaner, however, at a higher cost. He can come in with a 5 ton truck load. It will get him going and give him incentive to mine high-grade ores.

I think that the schedules adopted during World War II were based on the average recoverability of all the ores, the average grade, and so forth, and in so devising that schedule the Government realized that there would be certain losses.

That schedule had the effect of working against the man who did have more desirable ore, the ore that we did wish to encourage, and this table that we have presented is intended to correct that fault that is now apparent in the old schedule.

The price curve, even though it is flat on the down side, does go up rapidly. At a mid point, it passes, in price, most of the other proposals that have been received.

FACTORS CONSIDERED IN FORMULATING DEMING ORE PROGRAM

Now in casting the Deming ore program, we looked at it in three definite stages and these stages were recommended by Mr. Bradley's shop and concurred in by ourselves.

The first step, we wished to get a purchase program established to see what sort of ores would come out, and to encourage mining of ores as quickly as possible.

As the second step, we knew we should have a sampling and testing laboratory; a sampling plant capable of making metallurgical tests