Mr. ENGLE. At the moment, Mr. D'Ewart and I are relating our remarks to mercury, not to the general mining field. In that field certainly your point is well taken but with reference to this particular item we think that the American producers got it in the neck because of the failure of the Government to exercise power it now has on the statute books to present the dumping of foreign-provided materials on the American market. I think that is what Mr. D'Ewart was talking about.

Mr. D'EWART. That is right.

Mr. SHOREY. That might work. However, I would hate awfully to close the door to mercury, that is, the door to participation in the benefits of such a bill as yours.

Mr. ENGLE. We do not anticipate that.

Mr. SHOREY. As I understand the bill, each application would be subject to review before quotas were awarded, before approval was granted, and in that case, in the event the dumping proposal which might be well added somewhere along the line would not do the job. Still we could operate under the provisions of a bill of this kind.

There are one or two things in this that I would merely like to suggest be modified slightly. I do not think it is in intent at all but in wording.

If we turn to section 5 (a) of H. R. 976, the bill says:

Exploration payments shall be made to producers of those ores, metals, or minerals

And so forth. I believe that the bill might better say:

Exploration payments shall be made to owners of mines containing those ores, metals, or minerals

and for this reason: If it were enacted as it is now worded it seems to me that it could be operated to rule out from participation in its benefits every producer under the premium price plan who has been obliged to discontinue operations because of the lapsing of that plan.

Mr. ENGLE. I am in agreement with the gentleman. I think that is a point well taken, that the language of the bill is so stated that unless the mine was actually in production it could not get an exploration payment of any type.

Mr. SHOREY. That is correct.

Mr. ENGLE. Whereas it is the intent of this legislation to assist anyone to explore and develop ore deposits.

Mr. SHOREY. I have in mind now, two operators, in our district, who were forced to close with the lapsing of the premium price plan and who have discontinued temporarily in the hope some day something of this kind will be done. They have entered into other work as an expedient, temporary in its nature. They work for the highway commission. They hope to start in again but they would be blocked if the wording stands and is interpreted as it might be.

They worked out valuable ore bodies. They were not the heaviest premium recipients in the neighborhood at all and I believe that owners of mines containing those metals rather than producers would be more equitably treated and I see no reason for not providing that nonproducers be required to have their projects approved in advance regardless of the amounts involved.

Mr. ENGLE. Regarding your suggestion as to the change in language, we have that in mind.

Mr. SHOREY. Now, Mr. Chairman, I did not bring in a tremendous amount of statistical data. You have a record of my appearances before this same committee in previous meetings.

The situation insofar as my area is concerned has not changed greatly. It is grown worse rather than better. At a meeting in San Francisco at the time of the American Mining Congress meeting, the associations whose names I read to you reaffirmed their membership in the council, and constituted its officers as their spokesmen in an attempt to secure from the Congress the sort of relief which the Murray-Engle bill will provide. We hope that it may be approved by the committee, passed by the Congress, and signed. We hope that it will be made mandatory rather than providing for selective contracts.

We believe it will operate in the interest of the security of this country. We believe that it will cost the country far less than parity payments or higher tariffs ultimately. We believe that it can operate smoothly.

Mr. ENGLE. Thank you very much.

Do you have any questions, Mr. Aspinall?

Mr. ASPINALL. No.

Mr. ENGLE. Are there further questions?

Mr. D'EWART. You said you believed it should be made mandatory. What are you reasons for that?

Mr. SHOREY. Perhaps "mandatory" was not the word. It should be enacted in this form, and that no discretion be granted to the Administrator insofar as the producers with whom he might deal is concerned.

I do not believe that it should force me or anyone else to participate if we elected not to participate. That was not what I had in mind. I believe it should be all across the board to those who need it and apply for it.

Mr. ENGLE. What you mean, Mr. Shorey, is that under fixed standards adopted by law anyone will qualify for participation if their ore meets certain specifications and if needs for the material still exist and that no administrative agency should have the power of selective contracting which would allow favoritism and perhaps worse, and which would by and large generate to the benefit of the big operator because the small one has not facilities to get in and get his contract made.

That is what you have in mind?

Mr. SHOREY. I think that is better stated than I could, Mr. Chair

man.

Mr. ENGLE. Thank you very much, Mr. Shorey. We appreciate your

appearance.

The information referred to in Mr. Shorey's opening remarks is as follows:)

DEAR MR. TRAUERMAN: Referring to our urgent need for premium prices on tungsten, we briefly submit the following analysis of our position.

To date our combined jig-dredge installation together with our shore refining plant on Henderson Creek has produced over $250,000 gross in 60 percent or better high-grade tungsten concentrates. We are, I believe, the only pro

ducers still operating in the State of Montana and have the record for the highest grade concentrates shipped from the Northwest, our last mill run being better than 69 percent tungstic oxide.

The prices for tungsten are lower today than they were during the First World War, the market is more unstable and, with high costs of labor and material, our costs have gone up better than 60 percent.

We control, at the head of Henderson Creek, probably the largest deposit of tungsten ore in the United States. It is an open pit and placer proposition with low grade tungsten. For some time we have considered the opening up of this deposit, as we have the equipment at hand to work it but we cannot see our way to do so on the present price of tungsten. This deposit has been thoroughly mapped, its tonnage and assay values estimated by the United States Bureau of Mines, and the records of this exploration work are now available in Washington, D. C.

If a sufficient premium price was established on tungsten we would be in a position to develop this deposit and increase the capacity of our lower Henderson Creek operations, but, facing today's price, we are uncertain whether to continue our program at Henderson Creek or not. In view of the large quantity of tungsten which might be produced in the future from this locality, it appears to us that this prospect merits all possible support, from a committee interested in the acquisition of tungsten for a strategic reserve, so that production may be uninterruptedly continued and expanded.

H & H MINES,
By A. G. MOON, Manager.

BATTERY GRADE MANGANESE-PHILIPSBURG DISTRICT, MONT.

This memorandum deals with the position held by the Philipsburg District, Montana, as an important source of battery-type manganese ore, and the present need for governmental assistance to maintain existing operations on a healthy and active basis and to extend the life of the District for strategic considerations. There has been a great deal of thought and discussion regarding manganese as a strategic metal during the past few years, particularly as a substantial portion of our normal supply has come from Russia. However, in any consideration of manganese, it is important to distinguish between manganese ores used in the manufacture of dry cell batteries and manganese ores used for the hardening of steel. Generally speaking, battery-type manganese ores can be used in steel production but the reverse is not true in that most of the manganese ore used in the steel industry is unsuited to the manufacture of dry-cell-batteries. This is due to the fact the manganese dioxide used in dry cells must have the peculiar chemical characteristic of releasing free oxygen during the operation of the battery. Only a few sources of manganese ores, mostly foreign, have this particular property.

Normally the great bulk of the manganese ore used for dry-cell batteries comes from Russia, India, and the Gold Coast Colony in Africa. For the past 30 years the only domestic source of battery manganese has been the Philipsburg district. The battery manufacturers feel that it takes 3 years to be sure whether or not a certain manganese ore will make dependable batteries. During these 30 years, they have found Philipsburg ore does make good batteries while no other domestic source has proven acceptable.

The manganese ores of the Philipsburg district have been the subject of several investigations by the United States Geological Survey, the Bureau of Mines, and other governmental agencies. During the last war some 60,000 tons of lowgrade crude ore were stock piled by the Metals Reserve Company. However, it is of the highest importance to recognize that these studies were made and this stock pile was created only in anticipation of a drastic shortage of manganese for the steel industry. Notwithstanding the fact that Philipsburg is the only known source of battery manganese ore in the United States, this use has been almost completely ignored in technical thought and publications on the district.

The reason for this lack of attention is probably the fact that the foreign sources mentioned normally supply at least three-quarters of the needs of the domestic dry-cell industry. It is proper and logical that this material should be imported both from the fact that it would be impossible for Philipsburg to supply the entire industry and also since it is unquestionably desirable to conserve the only known source of battery manganese within the United States. However, and this is the important point, due to the difficulty of meeting the competition of the foreign supply, which naturally determines the pricing basis,

the production at Philipsburg for the past 20 years has been confined to a very small tonnage produced by two companies. For years the total production of battery manganese concentrates from Philipsburg has not exceeded 10,000 tons per year and it is doubtful that within a 2-year period production could be as much as doubled.

It would therefore seem wise and provident for this country, from a production standpoint, to make certain that the Philipsburg district be kept in a healthy condition in the event of an emergency. As stated, normal consumption of Philipsburg ore is realatively small and the prices established make the mining of only the highest grade ore economically possible. At the present time ore of less than 30 percent manganese dioxide cannot be profitably mined from the Philipsburg district. The market price for manganese dioxide has increased only 30 percent above the prewar levels, whereas the average price of labor and supplies, as generally throughout the mining business, has increased from 75 to 100 percent. The present price for manganese dioxide f. o. b. railroad cars, Philipsburg, in form of concentrates is 4.5 to 4.75 cents per pound, lead of 21.5 cents per pound, and copper of 23.5 cents per pound. Development in the Philipsburg district, which fell badly behind during the war years, has fallen even further behind since the war due to there being too little margin left after meeting current production costs.

The specifications which the Government currently requires for dry-cellbattery concentrates are as follows: Manganese dioxide, not less than 68 percent; iron, not over 2.5 percent; copper, not over 0.03 percent; lead, not over 0.50 percent; arsenic, not over 0.10 percent.

To meet these specifications several types of Philipsburg ores must be blended as the elimination of the deleterious material is not possible without destroying the value of the concentrates for battery purposes. Present concentration methods are no more efficient than those used in the base metal industry 30 years ago inasmuch as the more modern processes such as flotation have not been found workable or permissible in the recovery of manganese dioxide. Experiments conducted on this material by the Bureau of Mines have failed to find a better answer, and neither of the companies producing battery manganese from Phillipsburg have the resources to carry out anything but a most minor program of experimentation.

To bring about any improvement in this situation, the following specific action on the part of the Government is recommended and strongly urged:

1. Make available to domestic producers of battery manganese, loans or other financial assistance for exploration and development of unexplored areas in the Philipsburg district or other deposits of indicated battery type manganese, on terms similar to those authorized through the Reconstruction Finance Corporation during the war.

2. Premiums of at least 2.5 cents per pound of manganese-dioxide content to be paid on all concentrates shipped to battery manufacturers or Government stock piles. Payments due against governmental loans would be deducted from such premium payments.

3. Purchase for stock pile by the Government of all concentrates, as available, of Philipsburg or other domestic battery-type, produced in excess of current commercial requirements to enable operators to maintain steady production. This is now being done by the Bureau of Federal Supply only on a fixed-quantity contract basis.

4. Acceleration of research work aimed at determining what does make good battery manganese ore, and a thorough program of research by the Bureau of Mines toward improved milling and concentration processes to make available the large tonnage of low-grade battery manganese ore existing in the district or discovered elsewhere in this country.

The above program would not only rehabilitate and put in healthy condition the only known source of battery manganese in the United States, but would provide an incentive to search for other deposits in this country. The recommended research also should aid in ultimately relieving this country of its dependence on foreign sources for a strategic mineral vitally necessary to our domestic economy as well as our armed forces.

FEBRUARY 10, 1949.

A. V. TAYLOR, Jr..

The Taylor-Knapp Co., Philipsburg, Mont.

Mr. ENGLE. The next witness will be Mr. Quigley.

Will you state your name, in what capacity you are appearing, and whom you represent?

STATEMENT OF JAMES E. QUIGLEY, EUREKA, UTAH, CHAIRMAN, TINTIC SMALL MINE OPERATORS, LEASERS AND PROSPECTORS ASSOCIATION

Mr. QUIGLEY. My name is James Quigley. I am from Eureka, Utah.

I am chairman of the Tintic Small Mine Operators, Leasers and Prospectors Association.

At a meeting a week ago the Engle bill was read and the membership directed me to come to Washington to present their viewpoint. We are a small organization. We have around 200 members.

Most leasers and prospectors of the Tintic District and most of the small operators in the Tintic district are included in that membership.

The Tintic district is a large producer of metals, however, and has had a gross production of $500,000,000 gross production since the first locations were made in 1870. Of that amount, around $80,000,000 have been paid in dividends.

It probably occurs to the committee now that with that amount of profit Tintic should be in great shape but as one of the members said at the meeting, we are rather in the position of a poker game where all the winners have gone home. The dividends have been paid in the East and we who live there are left trying to make it back and we who own our houses and intend to live there are faced with the problem of finding new ore.

Most of the testimony up to now has been by larger companies, so I will try to present it from what perhaps you could say is the small man's viewpoint.

Tintic is an exceptionally hard district to find ore in. The companies, large smelting companies which belong-say, for instance, to Mr. Ziegfeld's organization, have tried to find ore in Tintic and have done a darned good job of looking. They have not found ore. however, in the last 10 years. They have spent large sums of money unsuccessfully.

In the meantime our leasers, the members of my organization, have continued to produce. Although we are much smaller than they are, we are just as efficient. They spend large sums of money and attempt to find large ore bodies. We spend small sums of money and attempt to find small ones.

We would like to find large ones, too, of course. However, the point I was trying to bring out was in connection with the direction and allocation of money. What we need in Tintic is not one or two minds working and examining the problem. What we need is a lot of minds and men working on the problem and that is what we have there now under our lease system of operation.

The men who have spent money for the large companies in the past are all very capable but this is how it works out: There is a chain of command and the bottom operation is carried through by men who all believe in the same theories as the man at the top. In the past we have always understood the conditions of ore deposition in a particular ore body after that ore body was worked out but we have never been able to apply our knowledge to find a new ore body except in one case, the North Lily ore body which was a twin, geologically, of