Mr. ENGLE. There isn't any. After this program is in full operation, and assuming that it will be 100 percent successful, the country would still be 85 percent dependent on foreign imports.

Mr. REGAN. I would like to ask the reason for the upgrading of the higher grades.

Mr. MITTENDORF. I don't quite understand the question.

Mr. REGAN. This matter of limiting the amount of the higher grade ores that you have agreed to purchase; is that what Mr. Engle is getting at there?

Mr. ENGLE. That is exactly what I am getting at. Mr. Bradley just got through saying that over the long haul you couldn't justify that arithmetically at all. You are going to have to change those figures or the program won't go.

Mr. MITTENDORF. Let me go back a moment on the derivation of that budget figure, if I can do it, and correct me, because it is juggled between the Program Division and my Division.

I believe the basic premise was, "Let's look at Deming. Let us figure how many units we believe the district can produce and let us figure what those units would cost the Government if they were put into a form, a grade, which was acceptable to industry." The total inferred ore reserves of the district were multiplied by the recoverable units contained and then multiplied by $2 a unit, which was considered a realistic figure for the end price. A figure of $8 million was reckoned. The increments were the tonnage, the units, and the cost, all multiplied, which developed the amount of money requested for this fiscal

year.

Mr. ENGLE. How are you going to make your contracts? The contracts are 5-year contracts, based upon a certain number of units; are they not?

Mr. MITTENDORF. Five-year contract is based upon――

Mr. ENGLE. Based upon a certain maximum number of units4,320,000 units. I am talking about the fellow who has to put his name on a piece of paper. He has to sign a contract.

soever.

Mr. MITTENDORF. Under this scheme he has no obligation whatThe Government has an obligation to buy what he brings in, but he can stop production next Tuesday, or any day. He has no obligation.

He does not sign anything. He asks to participate under this and the Government agrees to take his ore.

PREMIUM-PRICE PLAN METHOD OF INCREASING DOMESTIC PRODUCTION DISCUSSED

Mr. ENGLE. That is just exactly what I am saying, and if he goes out and builds a mill, based upon a limitation such as this, he may be left holding the sack.

Mr. MITTENDORF. Why does he not come in and say "This is what I am going to build." Why does he say "I am going to produce so many thousands of tons of ore at a certain rate" and for how long. We have complete information on his ore body. He will produce 800 tons a day; yes, but for how long?

Why doesn't he come in and say "These are the facts." He says "What if I do this; what if I don't do that." I, as a businessmanand I ran the premium-price plan, and a lot of you people think it

was a good administration, and I am trying to employ the same business principles this time as I did during World War II-and I think that I was somewhat glorified by you Congressmen for my adminis

tration.

Mr. ENGLE. Are you still for the premium price program?

Mr. MITTENDORF. If the miners are for it-I think-I enjoyed the administration of it. I enjoyed the friendly expressions of understanding I received from the industry.

Mr. ENGLE. That is a very devious answer, Mr. Mittendorf.
Mr. BRADLEY. I might be able to answer that if permitted.

I sat out there in the West on the other end of the premium-price program, the receiving end of it, and I want to say that the treatment we got from Washington was far better than we would ever expect under peacetime conditions of today. I think that was due entirely to the way Mr. Mittendorf ran that thing, and I have made that statement before for the public record.

Mr. ENGLE. I am one of the advocates of the premium price plan. Mr. BRADLEY. I know you are an advocate of it, but I myself as a producer would be very dubious of the success of that program in peacetime; but, under the impetus of war, when you get a certain amount of harmony and everybody is pulling together and a great deal of teamwork, it might work as it did before, and did under Mr. Mittendorf's direction.

Mr. MURDOCK. Mr. Chairman

Mr. ENGLE. If this isn't one of the most hazardous times this Nation has been in, I don't know what is going on.

Mr. REGAN. Mr. Murdock.

Mr. MURDOCK. I need to get away. That is why I wanted to ask a question or two at this time.

I, too, am one of the advocates of the premium-price plan. I wanted to ask this question.

I notice by the compilation furnished me that the domestic production of manganese in 1942 was 190,748 tons; in 1943 it was 205,173 tons; in 1944 it was 248,616 tons.

I understand that the last year of record it is 130,000 tons.

I wish it could be trebled. The question is: Was the premium-price plan in operation during the 3 years that I mentioned?

Mr. MITTENDORF. Yes; it was; 1942, 1943, 1944, and 1945; June of 1947 it expired by operation of law.

Mr. MURDOCK. And that probably accounts for the fact that all these years are years of emergency for that matter; that today is only about a third of what it was at that time.

Does the effect of the premium-price plan in the earlier period and the absence of it today probably account for that, do you think? Mr. MITTENDORF. I should think in large measure.

Mr. MURDOCK. Mr. Chairman, I am sorry that I can't be with the committee all the time, but I am very much interested in this study. Mr. REGAN. That is a very good question. I wish you would proceed. Mr. MURDOCK. I might ask one or two more questions.

Do I understand that there are no American mines that can produce the minimum requirement without upgrading? Is that true? Mr. BRADLEY. The answer would be there are no American mines of any significance. You can always go out and mine a few hundred tons of that sort of material, but we are looking for millions of tons.

Mr. MURDOCK. Take the Artillery Peak area for instance. Do I understand that averages about 12 percent or less?

Mr. BRADLEY. No more than 12 percent.

Mr. MURDOCK. In order for that vast area, which has a great tonnage all right, to work in on our program here, it would have to be upgraded?

Mr. BRADLEY. At high cost.

Mr. MURDOCK. That high cost is the fly in the ointment here.
Thank you, Mr. Chairman.

Mr. REGAN. Thank you.

Mr. Saylor.

Mr. SAYLOR. Mr. Chairman, I wanted to know, in view of Mr. Bradley's statement, that the premium price program was all right for wartime but not all right for peacetime, whether or not the Defense Minerals Administration is proceeding down there today as though this was peacetime or whether or not you are proceeding as though it is wartime.

Mr. BRADLEY. My private opinion is that it is proceeding more on a peacetime basis than it is as, say, a military emergency operation. Mr. SAYLOR. In other words, as far as the Defense Minerals Administration is concerned, it is strictly a police action, with absolutely no implications of national, all-out war?

Mr. BRADLEY. We have the authority of the Defense Production Act; we have the conception behind the Defense Production Act, which certainly justifies our thinking that we are preparing for allout war, but the impetus of war is not there in the operation.

Mr. SAYLOR. And therefore we are going along in a lackadaisical, easy manner, that anything will do, and if we don't get it now, 6 months from now, a year from now or 2 years from now, it is on a peacetime basis and it will be all right?

Mr. BRADLEY. "Lackadaisical" is not the term for the offices over there.

Mr. SAYLOR. I mean otherwise than the confusion that you have when the Bureau of the Budget wants something that you referred to a little while ago; that seems to be the only thing that seems to concern you with moving very rapidly.

Apparently you must have had a deadline to meet and you had to get everybody working full time down there to make sure that your estimates got over to the Bureau of the Budget in 10 days.

Mr. BRADLEY. We work with that speed a great deal of the time; nearly all the time. We are just a group centered on one thing, which is not at least to the engineers over there directly attendant to the production of metals. We are away from our job of looking at the mines and trying to work out means of obtaining production from the mines.

DISCUSSION OF REASONS FOR DELAY IN DEVELOPING ADDITIONAL DOMESTIO
MINERALS PRODUCTION

Mr. ASPINALL. Will the gentleman from Pennsylvania yield?
Mr. SAYLOR. Yes.

Mr. ASPINALL. Not trying to be critical, and not trying to accept more than our responsibility for this, but don't you suppose that maybe the Administrator might feel a little bit different if Con

gress itself got a little busy about the question of whether or not they were going to extend the Production Act?

Mr. SAYLOR. I will be happy to answer that for you. You represent the majority party, and you are one of them.

Mr. ASPINALL. I belong to the minority now.

Mr. SAYLOR. It is your responsibility to bring this legislation to the floor, and I can't rush your leaders or anybody else in getting their programing lined up.

Mr. ASPINALL. My idea of legislative responsibility isn't a question of party. I was asking you for the benefit of ourselves here.

We are talking about something which is going to expire in just a little bit over 2 weeks and a half if we don't do something about it. We are also asking some pointed questions to the gentlenien who have the opportunity and responsibility of enforcing the law. Mr. D'EWART. Will the gentleman yield?

Mr. ASPINALL. Certainly, if Mr. Saylor will yield. He has the time.

Mr. D'EWART. I think you have only partly stated the problem before us because we have had Public Law 520 before us for a number of years, and we did not succeed any better under that law, with the billions that we appropriated for it than we have proceeded under this law. This is not some thing new. Here is an address I made before the Congress over a year ago, detailing just the difficulty we are having at the present time, and while I agree that we need the Defense Production Act renewed, at least those parts that have to do with stockpiling and increasing our production of that critical material, but in addition to that we have Public Law 520, which we have been operating under for years and which has not been any more successful in my opinion than the present law.

Mr. ASPINALL. I think you are right on the over-all picture, but these gentlemen we have here this morning don't have anything to do with that.

Mr. D'EWART. Yes, sir. I think some of them at least; the GSA can acquire strategic materials under Public Law 520 and I think the Bureau of Mines is at least partly responsible for the operation of 520.

Now Defense Minerals I suppose also operate in part at least under 520. That has been my understanding up to date.

Mr. BARING. Would you say then that the only thing to do would be to put in a more stringent bill, such as a premium price plan, which was tested during the last war and proved to work?

Mr. D'EWART. We would still have 520, and I think this whole thing could have been done under 520 if we had had a more realistic approach and I am one of those that is not inclined to blame the Bureau of Mines and those under it.

I think the State Department had their finger in this acquisition of domestic materials and the increasing of production domestically, and I think we can look to them for a lot of the blame of the difficulties we have had in developing our domestic policy.

Mr. ENGLE. We can also blame some of these big producers who have foreign investments who want to acquire the stuff abroad and keep the market at home.

In other words, if they spend millions of dollars in Africa, South America, all over the world, to develop mines, they still want the

American market, and as a consequence they have vigorously opposed any effort to do anything for the domestic mining industry, and we find big industry, big mining interests, and especially interests involving foreign capital, for once getting in bed with the State Department with which they usually quarrel politically.

Mr. D'EWART. I wonder if that is true at the present moment in the case of manganese and chrome that they cannot possible produce? I believe there is an opportunity for both, in the case of manganese.

Mr. ENGLE. They have been bringing in 90 percent of our manganese from abroad.

Mr. D'EWART. That is true, but I don't think they are opposing the production of manganese at home at the present time.

Mr. ENGLE. The gentleman knows very well that when we had S. 2105 before the Congress last session there were some people in the mining industry itself who came down here and told people in the East, especially Congressmen in the East, that the mining industry was opposed to it.

Mr. D'EWART. I would like to call the gentleman's attention to the action of the House recently on reducing the tariff on importation of copper, and to the best of my knowledge no big copper producer opposed that decrease in the tariff on copper.

Mr. ENGLE. That is right, because the market is so good that they don't have to worry about it, and it was only a temporary extension

anyway.

Mr. D'EWART. That is the point I make. At the present time we need these things produced domestically.

Mr. ENGLE. Now we are talking about something else. Mr. D'EWART. No; I said "at the present time.” We need manganese; we need chrome so much that I doubt if anyone is opposing the production of the small amount we can get domestically.

Mr. ENGLE. You haven't read Mr. Fred Searls' testimony before the Senate Committee on Interior and Insular Affairs. If you will read it, you will find out what they think about it; and, as a matter of fact, Mr. Franz Schnieder, of the Newmont Mining Corp., which also is a holding company for stocks and bonds, appeared before the Appropriations Committee a year or two ago and advocated a reduction in the amount of money available for stockpiling under Public Law 520.

That is the kind of philosophy we have among some of these big mining companies.

Mr. D'EWART. Does the gentleman from California think then that the reason this program is falling down is because some of the big companies are opposing it?

Mr. ENGLE. I think that there is whispered instructions from devious places to the effect that the slower this thing goes, the better they like it.

Mr. BARING. I will substantiate the gentleman's views.

Mr. REGAN. Just at this time I would like to get a little diversity in this program.

Mr. ENGLE. Nobody is whipping the horses down there. I know that.