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It may be that the United States Steel Corp. will, after examination of those figures, have something to say about them.

Mr. MICHENER. Yes. I heard the witness' testimony yesterday, and I am wondering whether or not those figures refer to any specific type of ore. I am not familiar with this field, but I noticed yesterday that the witness to whom the chairman has referred differentiated between low-grade ore and high-grade ore, and it appears to me that different kinds of ore occupy the same space, and I am wondering if there is a differentiation given the different types of ore in shipment. If there was, of course it would be a subsidy by somebody on a particular type of ore.

Mr. BRYSON. They designated the different ores by different colors: red, black, and brown.

The CHAIRMAN. I wish to state we have also submitted those figures and the statement of Mr. Wisco to the United States Steel Corp., so that it will have an opportunity to answer these statements. I would not want a charge like that to be placed in the record and not give the United States Steel Corp. an opportunity to answer; we therefore expect an answer from the United States Steel Corp.

Our first witness this morning will be Mr. Frank Smith, of Cartersville, Ga. Mr. Smith.

STATEMENT OF FRANK SMITH, CARTERSVILLE, GA.

Mr. SMITH. Mr. Chairman and gentlemen, I was born and raised in Cartersville, Ga., and have been in the mining business for approximately 20 years, mostly dealing in manganiferous and iron ores.

My father was in the business before that, and I have some records here that go back to the 1920's. At that time there were several different buyers of ore in the independent companies, and I will show you these records and read some of them to you.

If there are any questions as I go along, why it would probably be better to ask me at that time, because I want to try to show my experience in this 20-year period. I am not only speaking for myself. There are about 10 operators in the two counties of Polk and Bartow in Georgia.

Mr. LEVI. You are the owner of land in Cartersville?

Mr. SMITH. I own some myself, but I am speaking the sentiment. of the different operators, and when I get through

The CHAIRMAN. You are a miner of ore now?

Mr. SMITH. Yes, sir. I am not shipping any because I have no orders to ship.

The CHAIRMAN. Do you represent any particular company?

Mr. SMITH. Yes, sir; but I am speaking for the other operators, and I will try to show you why they are not here today.

Mr. BRYSON. Did you hear Mr. Peyton testify yesterday?

Mr. SMITH. No, sir; but I read his statement.

Mr. BRYSON. Are you speaking about the same area that he spoke about?

Mr. SMITH. Yes, sir; part of it.

Here is an order from the Republic Iron & Steel Co. on January 4, 1923, to a Mr. John W. Hendry. These records have been gathered by us, and we did the best we could. Most of them have been destroyed, but we do have this order.

Mr. BRYSON. You do not have a prepared statement?

Mr. SMITH. No, sir.

Mr. LEVI. What is this that you are presenting now? This is an order that does what?

Mr. SMITH. That was in 1923. It says, "Three cars of manganiferous ore per week." It says further on, "Order to be canceled by either party on 30 days' written notice." That is from the Republic Steel Co.

Mr. LEVI. From Republic Steel to whom?

Mr. SMITH. TO John W. Hendry, Cartersville, Ga.

Mr. LEVI. What is he?

Mr. SMITH. He was an operator in 1923. This order was in 1923. Mr. LEVI. An operator of ore lands in the area about which you are talking?

Mr. SMITH. Yes, sir.

Now, here is an order from the Republic Steel Corp. The name has been changed in 1950 to Joe Mosteller, Cartersville, Ga. It says, "Quantity: Your production as released by us."

Then, at the bottom, it says, "This order to remain in effect from date through December 31, 1950, unless canceled by us."

Mr. LEVI. That is a contract from whom?

Mr. SMITH. From the same corporation.
Mr. LEVI. By Republic Steel with whom?
Mr. SMITH. To Joe Mosteller.

Mr. MICHENER. Is it a contract or an order?

Mr. SMITH. Well, I would call it a contract. It is cancelable by them in 1950.

Mr. MICHENER. In other words, they order so much, unless they cancel the order?

Mr. SMITH. Or "as released by us."

Mr. LEVI. What does that mean. Where is that phrase, “as released by us"?

Mr. SMITH. Under the word "quantity," it reads, "Your production as released by us."

The CHAIRMAN. Who printed that form?

Mr. SMITH. Republic Steel Corp.

The CHAIRMAN. Would you say it is a continuing order, or what? Mr. SMITH. Well, I will show you the cancellation of the order. This order has been canceled by Republic Steel Corp.

Mr. BRYSON. In 1923, the form provided for a 30-day notice?

Mr. SMITH. Yes, sir; on the part of either party.

Mr. BRYSON. But in 1950 it provides cancellation at the wish of the steel company?

Mr. SMITH. That is right; and if you will read the prices-I will read them, if you like. This price is set for three cars, and there is a provision for 30-day cancellation by either party. I will show you in this one where the price was reduced last August.

Mr. LEVI. Mr. Smith, I think it is important for the record to be clear on that contract. Is it an order for a specific amount in 1950? Mr. SMITH. No, sir.

Mr. LEVI. Does it give them the right to get the ore?

Mr. SMITH. All of the ore. "Your production as released by us." Mr. LEVI. They can take any amount that they want?

Mr. SMITH. AÏl.

Mr. LEVI. Does that order or contract, or whatever it is, permit the sale to someone else?

Mr. SMITH. No, sir; we cannot.

Mr. LEVI. Why do you say it does not? What is the phrase that you rely on that says it does not?

Mr. SMITH. "Your production as released by us," and I will show you where they refuse to allow me to sell to the Atlantic Steel Co. The CHAIRMAN. That is not very long. Suppose you read that. Mr. SMITH. Do you want both of them read?

The CHAIRMAN. Read the one of 1950.

Mr. SMITH. This says:

ALABAMA SALES AND USE TAX PERMIT No. 1-STANDING ORDER, YEAR 1950

BROWN ORE

Quantity: Your production as released by us.

Analysis: 40 percent and better iron and manganese.

Shipping point: Cartersville, Ga.

Equipment: Hopper-bottom gondolas.

Size of ore: 4 inches and under.

Rejection point: Each car of ore to be analyzed separately; if any one car of ore is shipped analyzing 39.99 percent and under, iron and manganese only, we are to pay freight and use, or dump, and charge freight and unloading expense back to shipper, our option.

Moisture: Deduction to be made for all moisture.

Weights and analyses: Our weights and analysis on each car to govern all settlements.

Price, per gross ton: 40 to 44.999 percent, 9% cents per unit; 45 to 46.99 percent, 94 cents per unit; 47 to 51.99 percent, 10 cents per unit; 52 to 52.99 percent, 104 cents per unit; 53 percent and up, 101⁄2 cents per unit.

This order to remain in effect from date through December 31, 1950, unless canceled by us.

Ship to: Republic Steel Corp., storekeeper, blast furnace department, Alabama City, Ala. REPUBLIC STEEL CORP.

Mr. LEVI. The way you interpret that document is that it is an order, or a contract, for any amount of the production that the Republic Steel Corp. wants?

Mr. SMITH. That is correct.

Mr. LEVI. They do not have to take any?

Mr. SMITH. No, sir. They have canceled this order.

Mr. LEVI. They have what?

Mr. SMITH. They have canceled this order.

Mr. LEVI. Until they cancel the order, as you interpret that contract, may the operator sell to anyone else?

Mr. SMITH. No, sir.

Mr. LEVI. May he sell to anyone else even though Republic is not taking any?

Mr. SMITH. No, sir.

The CHAIRMAN. Is that a uniform contract used in your district? Mr. SMITH. That is the only buyer that we have for iron ore. That is the only way we can sell ore today.

The CHAIRMAN. Proceed. We will place those orders or contracts in the record.1

Mr. SMITH. Now, I just read this order of 1950, where it says, "Our weights and analysis on each car to govern all settlements." The price is f. o. b.

1 The contracts are printed as exhibits S-45 and S-46 in Steel Exhibits, pp. 70-72.

Here is what he said in 1923: "Price plus freight f. o. b. Thomas, Ala." In other words, they were paying the freight, and I will show you the difference in prices.

The CHAIRMAN. During the intervening years were the documents the same as to conditions?

Mr. SMITH. They started this about the time they bought out Gulf State Steel. That was the last independent steel purchaser down

there.

Mr. LEVI. When was that?

Mr. SMITH. That was along in 1927 or 1928. This was their new method of purchasing.

The CHAIRMAN. Did the form remain the same all during those years up to date?

Mr. SMITH. Yes, sir.

Mr. LEVI. Mr. Smith, you have made two points now. You have made one point that they have the right to get your ore, and you cannot sell to anyone else without their permission. That is the first point.

Then you made a second point, I think, about the freight rate. That I do not understand.

Mr. SMITH. They were buying and paying the freight then. The railroad weights at Cartersville governed. Today their weights and their analysis govern, and they deduct the freight rates from us. We pay the freight rates.

Mr. MICHENER. They write the formula on which you sell.

Mr. SMITH. Yes, sir.

Mr. MICHENER. Have they ever refused to accept any tendered deliveries under the contract?

Mr. SMITH. We are notified to stop operations.

Mr. MICHENER. When you get notice to stop, is it temporary, or is a reason given as, for instance, a strike?

Mr. SMITH. They usually give a strike as a reason. This order here was canceled, but it has never been reinstated. The plant is there. The ore they said was good ore.

Mr. MICHENER. I take it then that this last 1950 order was canceled because of the strike?

Mr. SMITH. That is correct.

Mr. MICHENER. And it has not been reinstated?

Mr. SMITH. That is correct.

Mr. MICHENER. Have you made any effort to have it reinstated? Mr. SMITH. Yes, sir.

Mr. MICHENER. And what did they tell you?

Mr. SMITH. Here is a letter from, not this man, but another operator in Republic Steel, under date of April 10, 1950.

This man, Mr. Harris, who received this letter, had shipped good ore, in fact the last 75 cars ran 53, and they say it is good ore. Mr. MICHENER. The same company?

Mr. SMITH. Republic Steel Corp. ; yes, sir. This was last week:

Mr. Toy J. HARRIS,

General Delivery, Cartersville, Ga.

DEAR SIR: Replying to your letter of April 8, please be advised that we have a furnace out of production at Alabama City and our ore requirements are somewhat curtailed at the present time and I cannot take any additional tonnage, but if you will write me in about a month, this condition may be changed.

Yours truly,

W. S. SANFORD, Manager Land Department.

Mr. WILSON. Mr. Smith, you say you used to deal with the Gulf State Steel Co.?

Mr. SMITH. It was the Alabama Co., and the Gulf State and SlossSheffield were purchasing then, the Central Iron & Coal Co., the Roane Iron & Coal Co., and the LaFollette

Mr. WILSON. What kind would they buy?

Mr. SMITH. So much tonnage during the year. It was very similar to Republic's old method.

Mr. LEVI. Have all those companies gone out of existence, or been absorbed?

Mr. SMITH. Sloss-Sheffield is operating. They are running one of the furnaces on ferromanganese, and they have some ore in the other furnaces, I believe.

The Roane Iron Co. has been put back in operation at Rockwood, Tenn., and is making some special grade of pig iron now.

You asked whether I could sell any ore. I might tell you of an instance for illustration.

On 1939 or 1940 I had accumulated several hundred tons of large boulders. I did not have a crusher in my plant. The ore was running about 53 or 54, and the phosphorous fairly low, which they said they could use for open hearth, so I went down to see Mr. Stone, president of the Atlantic Steel Co. of Atlanta, Ga.

The superintendent said they could use two or three cars a month. He gave me an order at 12 cents a unit. I think I was getting 6 cents a unit for my regular washed ore from Republic Steel at that time, so that was to be loaded in those few cars, low side cars.

I was shipping high-side cars to Republic Steel, and usually the Republic man would show up on Thursday night or Friday and on Wednesday morning I started loading the car, and he drove up and said

Mr. WILSON. Who drove up?

Mr. SMITH. W. S. Sanford of Republic Steel Corp. His title is manager of the land department, but he buys the ore, and he said, "Who gave you instructions to load that ore in low-side cars?" I said, "Well, I have been able to sell a few cars to Mr. Stone down at Atlantic Steel Co. for burning in the open hearth furnaces."

He said, "Well, what are you going to do with the high-side cars?" I had those down on my track. I said, "They are going to you." He said, "No, we take all or nothing." I had to ship him that car.

Mr. LEVI. Under your ore contract you had no right to sell any.
Mr. SMITH. I did not sell it either. I thought I would get by with it.
Mr. LEVI. He was just insisting on his rights under the contract.
Mr. WILLIS. Did you have a better price?

Mr. SMITH. Just about twice what they were paying.
Mr. WILLIS. Name the figure. What price did you get?

Mr. SMITH. I think I was getting 6 cents a unit from Republic, and they offered me 12. I had to pay the freight, and the freight from Atlanta to Cartersville is much less than the freight to Birmingham. We pay all the freight rate, the shipper does.

Mr. LEVI. Mr. Smith, are you complaining about a contract which you made?

Mr. SMITH. Sir?

Mr. LEVI. Are you not complaining about a contract which you voluntarily made?

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