Mr. MELCHER. It is an attempt to stimulate expanded production. Senator MALONE. It is just a long-range policy by Congress that if a man finds half of 1 percent of tungsten ore and the vein has any depth or width, he is in business.

Mr. MELCHER. That is a good grade of tungsten nowadays.

Senator MALONE. That is right. Let me compare it to something else. You talk about reserves. Your United States Geological Survey, which is one of the finest organizations in the world in my humble opinion, said in 1925 that the limit of our oil production was 5 billion barrels. That was all there was in this country. It scared everybody to death. Then we had a Secretary of Interior about 18 years ago who said the same thing, except he raised the limit a little. In my opinion, all you ever had to do was to turn the oil companies loose. You know we now have 32 billion barrels of reserve, and with the importation of oil, it is now running out of our ears. Thompson of Texas is complaining to high heaven that Texas oil wells are closing. So if you adopt a policy which does not allow private capital to go ahead and develop reserves, you will eventually run out of reserves, wouldn't you?

Mr. MELCHER. That certainly is true in tungsten.

Senator MALONE. It is true in oil. Is it not true in every metal? Mr. MELCHER. As far as I know.

Senator MALONE. You are bound to run out of metals when you make it impossible to mine them?

Mr. MELCHER. If you cannot make any money.

Senator MALONE. You would finally arrive at the point that the State Department for 20 years has said we were in. They can make their program successful. We could be entirely out of ores and unable to defend ourselves in case of war.

Mr. MELCHER. Mr. Zinner just pointed to the fact that tungsten reserves on this new chart are larger than they were on the one we provided several years ago.

Senator MALONE. And when you make a chart next year, if tungsten mining is a profitable operation, it will be still larger. Is that a logical conclusion?

Mr. MELCHER. Yes. I pointed out that there is plenty of room for expanding those reserves.

Senator MALONE. But if we do all the mining from Washington and make it unprofitable to mine, you could run out of reserves. Mr. MELCHER. If you have no profit, you have no reserves.

Senator MALONE. And if you have a profit, you have all the reserves you want in tnugsten.

Mr. MELCHER. Within certain limits.

Senator MALONE. What are the limits? We mined all the tungsten we needed in this United States of America at the peak of World War II.

Mr. MELCHER. Only limits to continued production at the current level or attempting to meet wartime needs, then they would become depleted.

Senator MALONE. The known reserves would become depleted. Do we not have more tungsten reserves at the present time than we had at the beginning of World War II?

Mr. MELCHER. Yes.

Senator MALONE. And did we not produce an enormous amount of tungsten during World War II? Did we not produce all we needed for a while?

Mr. MELCHER. I do not remember that we got in that favorable position.

Senator MALONE. We had a greater amount of tungsten production in the United States and the Western Hemisphere than our consumption in any one of 4 or 5 years according to your chart.

Mr. MELCHER. Yes. Here is a table along that line; 1943 was a peak production year.

Senator MALONE. And also a peak consumption. From the Western Hemisphere, and United States production we had more production than tungsten consumption.

Mr. MELCHER. I am sorry, I thought you said the United States alone.

Senator MALONE. In certain years we had a production in United States equal to consumption.

Mr. MELCHER. Not during the war.

Senator MALONE. Tungsten has been unprofitable to mine in almost every case since 1934, except through special bills by Congress providing for a purchase program.

Mr. MELCHER. In many cases. Yes, sir.

Senator MALONE. Because you had absolute competition from nations paying labor from 40 cents a day up to $2 a day, and therefore no private money would go into domestic production, would it? Mr. MELCHER. It was very difficult.

Senator MALONE. That is nobody in their right mind.

Mr. MELCHER. Yes, sir.

Senator MALONE. A miner who has the mining disease has never been in his right mind. He would just keep on losing his money and insisting he is going to mine whatever metal happens to be his business. But we are running out of those old hedgehogs and we are not developing any new ones. Unless we have a long-range policy laid down by Congress the young men will not go into the mining industry.

Mr. MELCHER. We need a lot of incentive for young men to enter the industry.

Senator MALONE. I want to point out to you right here that the chart prepared in your office shows that $63 or $65 price established for tungsten, actually amounts to about a $40 price when adjusted to the wholesale commodity index price.

Mr. MELCHER. That is probably about right.

Senator MALONE. That is right. We have already computed it. Mr. MELCHER. Yes.

Senator MALONE. So what would have been a high price 10 years ago, right now is not a very high price for tungsten.

Mr. MELCHER. And it has doubled our production.

Senator MALONE. And it has doubled our production. That is right. Go ahead.

Mr. MELCHER. Mr. Chairman, you appear quite interested in the tungsten statistics. May I present a table here for the record giving some history on the United States?

Senator MALONE. This table shows the production, shipments from mines, imports for consumption, consumption, industry stocks at the

end of the year, producers, consumers and dealers, and a total. It will be submitted for the record. It covers the period from 1939 to July 1953.

(The document is as follows:)

Salient statistics of tungsten ores and concentrates in the United States, 1939–53, in pounds of contained tungsten

Senator MALONE. This will be a part of your testimony. Do you intend at the end of your testimony to submit certain charts?

Mr. MELCHER. I understood the charts were available. I have a rather comprehensive review of each of these commodities that I would like to introduce.

Senator MALONE. To submit for the record?

Mr. MELCHER. Yes.

Senator MALONE. These charts contain the price per unit over the period 1915 to 1953, and the production, imports, and domestic production. The charts also show imports of the nations of the Western Hemisphere and all other foreign nations together with the consumption for each year, from 1940 to 1952; the source of imports and then a world chart showing the source of the foreign imports and also from the domestic production and the imports from the Western Hemisphere, for certain years.

Mr. MELCHER. May I suggest that these be added to the data I would like to submit?

Senator MALONE. Yes.

Mr. MELCHER. I have one further statement to make on tungsten. In 1952 Government participation through the Defense Minerals Exploration Administration contracts for exploration of domestic tungsten deposits exceeded $700,000. Many of the low-grade ores now being mined present metallurgical problems. The depletion of nearsurface ore deposits will require a greater degree of mechanized underground mining with attendant high capital investment.

Senator MALONE. Do you preclude the discoveries of other deposits? Mr. MELCHER. No, sir.

Senator MALONE. Are you aware that near Pioche, Nev., good accessible grades of tungsten and manganese have been discovered there since the Congress first passed the bill guaranteeing a profitable price.

Mr. MELCHER. That is right.

Senator MALONE. Of course, that is dependent upon the whim of Congress, but we were able to extend it 2 years. For 20 years I have listened to information coming out of the Department of Interior, unluckily not from experienced people, that we have discovered all of the readily available ores, taking it for granted that the millions of acres in each State have been minutely explored and that we know everything about the content of the earth's surface in those areas. Do you believe that?

Mr. MELCHER. It will be a long time before we ever reach that situation.

Senator MALONE. I agree with you. Therefore, any statement that we have exhausted the readily available supplies would have to assume that there would be no new discoveries, which is not reasonable, is it? Mr. MELCHER. In another year or 2 years, or whenever we revise these charts, it will be a different story again.

Senator MALONE. That is correct, providing it is profitable to mine the ores in competition with the low-wage labor of the world.

Now, let me ask you this. About the time you were trying to discover some other type of ore in Idaho in World War II, did you accidentally discover one of the greatest tungsten deposits in the country?

Mr. MELCHER. That is right. We were drilling for antimony. Senator MALONE. You were drilling for some other kind of ore entirely, antimony, and you dropped right into a large tungsten deposit. Mr. MELCHER. Yes, sir.

Senator MALONE. With diamond drills and the advent of the new geophysical methods used in exploring, is it not logical to suppose that you will find more ore than you ever have found if mining is a profitable venture?

Mr. MELCHER. There is always that possibility.

Senator MALONE. Many of us can remember when there were thousands of prospectors in the hills, many of them with no college background or high-school education, and some of them without a gradeschool education, who could tell you with a little pan, after a day or two of prospecting what percentage the ore would run per ton. Is that not true?

Mr. MELCHER. They would be very close.

Senator MALONE. Many of my acquaintances could do that. Where are they now? Are they developing any new mines? For 20 years it has been unprofitable for them to do that. These boys, even if they found tungsten, could not sell it until we passed a special bill in Congress to make it profitable for them to mine tungsten in competition with the low-cost labor of the world.

Mr. MELCHER. You are touching on a problem that is very acute with us in obtaining young men for the field.

Senator MALONE. There is no future in it unless we have a longrange policy, is there?

Mr. MELCHER. I still have faith in the mining industry.

Senator MALONE. I have faith in the mining industry, but I have very little faith in Government officials who can fix the price of metals and can manipulate the stockpile to break the market any time they want. In other words, a prospector, a miner, or an investor in mines is not dependent on his own judgment as it was in the past. He is dependent on some man in Washington who may not

know a pound of ore from a bale of hay. I am not talking about you. Each one of these men in this room knows the business, and if they let you do it, that would be one thing. This is the first time most of you fellows have ever been asked to testify before a committee.

Mr. MELCHER. That is true of some of us.

Senator MALONE. What I am trying to say is that we have a political reason for producing manganese in Burma or India. You did not mention India, but half of your manganese in our stockpile comes from India.

Mr. MELCHER. A large portion.

Senator MALONE. Do you think we are going to get any manganese from India when world war IV begins?

Mr. MELCHER. It is a long ways away.

Senator MALONE. I agree with you. Your testimony about manganese was very helpful. So if we could ever blow away the 20 years' assumption that the way to mine ores is to save them until the war starts it would be very helpful to the United States of America. Would you agree with that statement?

Mr. MELCHER. There are many of us that do not believe that is the way of doing it.

Senator MALONE. How long does it take after a prospector comes in looking for some engineer to go out and examine his little discovery, and the engineer decides that it will bear a certain amount of expense-it takes hundreds of those kinds to make one producer, and dozens of producers to make a good mine before you are in production from a prospect? Is it 6 months, a year, or 5 years?

Mr. MELCHER. On a large development I would say it takes 10 years. Senator MALONE. Then you are getting ready for the war following the war you are trying to prepare for, if you do not start your production until the war starts.

Mr. MELCHER. That development can be accelerated, of course, in times of real emergency.

Senator MALONE. But it takes time to sink a shaft and to dig hard rock.

Mr. MELCHER. It takes time.

Senator MALONE. Suppose it took 5 years. You are not preparing for the current war. You are preparing for the war after that, are you not?

Mr. MELCHER. Assuming it lasts less than 5 years.

Senator MALONE. That has been the average. Maybe the next one will last longer and we might get into production if it lasts over 10 years. I am talking about a practical mining matter. If you do not have a going concern mining industry, you are not in very good shape. Mr. MELCHER. Very definitely.

Senator MALONE. Would you like to submit your charts and material?

Mr. MELCHER. Yes, sir.

Senator MALONE. The charts, together with your prepared statement, will be submitted, and made a part of the record at this point. (The documents are as follows:)

THE IRON ORE POSITION OF THE WESTERN HEMISPHERE

Deposits of high-grade iron ore in the Western Hemisphere hold adequate tonnages to assure supplies during the foreseeable future. Reserves in North America are adequate for a similar assurance if exception is made for premium