ganese plant at our back door, but it would take freight away from the railroads, so they discourage it. The E. J. Lavino Co. that owns the plant discouraged any production around there because they are the sales agents for the Indian and African ore for the British.

We have a year-round working climate, excellent water supply, good roads to all these deposits, and native southern labor down there which is very good for mining.

They are experienced people. That is all I have to say.

Thank you.

Mr. ENGLE. Thank you very much, Mr. Myers.

We appreciate your testimony.

I have some matters to insert in the appendix of the record as follows:

1. Letter from the Dominion Manganese Corp., New York, N. Y. (exhibit 13).

2. Letter and statement from the Oregon Mining Association, Portland, Oreg. (exhibit 14).

3. Letter from the Mining Association of the Southwest, Los Angeles, Calif. (exhibit 15).

4. Telegram from the Arizona Small Mine Operators Association, Phoenix, Ariz. (exhibit 16).

5. Telegram from the Central Idaho Mining Association, Hailey, Idaho (exhibit 17).

6. Telegrams from the Dodgeville Mining Co., Madison, Wis; the Cuba Mining Co., Cuba City, Wis.; the Vinegar Hill Zinc Co., Platteville, Wis.; and the Sam Knight Lease, Inc., Christmas, Ariz. (exhibit 18).

7. Statement from Pacific Mining Co., San Francisco, Calif. (exhibit 19).

8. Letter from William S. Robertson, Grants Pass, Oreg. (exhibit 20).

9. Letter from Tyson Mines, Grants Pass, Oreg. (exhibit 21).

I also have here an outline of the Premium Price Plan, Its Cost and Its Results, which is a report prepared by the Bureau of Mines and reprinted from the Engineering and Mining Journal of December 1948, which without objection, will be made part of the record.

(The document referred to is included in the appendix as exhibit 9, p. 310.)

Mr. ENGLE. If there is no objection, all of these matters will be made part of the appendix in the record.

All members who desire to extend their remarks in the record will be permitted to do so. This closes the industry witnesses' part of the hearing.

Tomorrow morning at 10 o'clock we will hear the Department of the Interior with respect to these bills.

If there is no further business before the committee it is adjourned. (Whereupon, at 1:35 p. m., the committee adjourned, to reconvene at 10 o'clock Thursday, March 10, 1949.)

NATIONAL MINERALS ACT OF 1949

THURSDAY, MARCH 10, 1949

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON MINES AND MINING,

COMMITTEE ON PUBLIC LANDS, Washington, D. C. The subcommittee met at 10 a. m., Hon. Clair Engle presiding. Present: Messrs. Engle, Regan, Bentsen, Baring, O'Neill, Aspinall, Miles, Lemke, Barrett, LeFevre, D'Ewart, Sanborn, White, and Mrs. Bosone.

Mr. ENGLE. The committee will be in order.

Without objection, the report from the Munitions Board, dated March 7, 1949, in respect to H. R. 976, will be inserted in the appendix of the record.

(The information referred to is included in the appendix as exhibit 7, p. 300.)

Mr. ENGLE. For the benefit of the committee, I will say the report damns the bill with faint praise.

At this point in the record I would like to insert the third paragraph of page 1 of the final report of the Subcommittee on Mining and Minerals Industry of the United States Senate Small Business Committee, filed pursuant to Senate Resolution 20, Eighty-first Congress, first session, Senate subcommittee print No. 2, reading as follows:

The subcommittee, after careful study of the stock-piling operations under Public Law 520, Seventy-ninth Congress, feels that insufficient stress has been laid upon the domestic stimulation of strategic and critical minerals and metal production, especially from marginal projects. The policy provision outlined by the Congress in section 1, Public Law 520, has not received enough attention from the administration. The stock pile, according to recent reports from the Munitions Board, is only 18 to 20 percent complete and badly unbalanced, whereas it is self-evident from the vast quantities of materials required that purchases should be made from all possible sources. The subcommittee believes the national security would be better served with incentives provided for the domestic producers to mine marginal ores of copper, lead, and zinc, and any other strategic minerals and metals required for the stock pile. It appears we have been particularly negligent in stimulating the production of domestic manganese and chrome ores.

We will insert that at this point in the record, indicating that the final report of the Senate committee is very much in line with the viewpoints of some of the members of this committee as expressed during these hearings.

I also have before me an article which appeared on March 10, 1949, in the Times-Herald, by the International News Service, as follows:

The Government officially disclosed yesterday that Russia has curtailed her shipments of strategic chrome and manganese to the United States by 70 percent.

I will say parenthetically at this point that the record yesterday showed that of the total manganese imported into this country during 1948, 34.1 percent was shipped from Russia. Approximately 91 percent of our total manganese requirements are obtained abroad.

Chrome and manganese are essential in the production of high-grade steel. The Commerce Department revealed that Soviet export of these precious ores dropped that amount in January below last year's peak month of August.

The figures provide the first official indication that Russia has decided to reduce her chrome and manganese shipments to the United States, apparently in retaliation for the virtual ban on United States exports to the Soviet bloc.

And I call attention again parenthetically to the fact that yesterday's testimony indicated that this country had a net deficit of 72,000 tons of manganese last year.

There have been reports from private industry that Russia has been planning such a cut-off, but nothing from the Government to back it up.

In New York, the magazine Iron Age charged today that the Russians are trying to "blackjack" the United States into lifting its embargo on machine tools and steel shipments to the Soviet Union.

I will add again parenthetically that it has been stated before this committee, and is believed to be true, that Russia is in a position to squeeze the domestic economy because of the controlling percentage of manganese essential to steel production which she has been shipping into this country.

The National Metalworking Weekly said the Moscow threat will not work, since Government and industry have been aware of the possibility for nearly a year and are prepared for it.

I say parenthetically again, I hope they are, but I doubt it.

It pointed out that aid is being given to South African manganese ore mines, imports have been boosted from India, and work is progressing on increasing imports from Brazil.

It is a strange thing our Government would not do something to protect our own people when it is reported that during the war, some 52 out of 56 ships used to bring bauxite into this country were sunk, and we have not any reason to believe the Russians have not more submarines than the Germans had. And in the event we get into a war, the South African manganese ore mines and the ones in India and the ones in Brazil will be developed for the use of an enemy rather than for our own use.

Russia has been furnishing about 35 percent of United States manganese imports and about 26 percent of American chrome receipts. To maintain the present rate of steel production and add to her strategic stock pile of critical materials, the United States is dependent upon imports for about 90 percent of these two items.

In closing, I reiterate the statement which has been made here, to place the United States in a dependence of that sort on such essential and critical materials is the plainest kind of stupidity and is almost a criminal dereliction of duty on the part of the public officials of this country.

We have here this morning Mr. Davidson, of the Interior Department, and Mr. James Boyd, of the Bureau of Mines.

Are you ready to proceed with a statement in regard to this legislation?

Mr. DAVIDSON. Yes, Mr. Chairman.

STATEMENTS OF C. GIRARD DAVIDSON, ASSISTANT SECRETARY OF THE INTERIOR, AND JAMES BOYD, DIRECTOR, BUREAU OF MINES

Mr. ENGLE. Will you proceed, Mr. Davidson?

Mr. DAVIDSON. Mr. Chairman, before I start, I might say that that report of the committee that you read, saying that Government should provide some incentive to stimulate production for our stock pile, is one in which we concur very heartily.

Mr. LEMKE. You concur; then you throw monkey wrenches into the machinery. I might add that.

Mr. ENGLE. May I suggest Mr. Davidson be permitted to complete his statement.

Mr. DAVIDSON. Mr. Lemke, I am afraid you are working on me before I even get started. I wanted to say that on the general proposition, there is no question that our objective is in line with that of the report which was read. But I think we realize that the question of Government subsidy for marginal mine production has been under continuous discussion since some months before the expiration of the premium price plan for copper, lead, and zinc in 1947. I think that members of this committee will recall the many debates that centered less than a year ago around the Russell bill, H. R. 6623.

In order that the position of the Department of the Interior may be clarified, it is necessary to review briefly the measures that were taken in April 1948, in an attempt to resolve the questions posed by the Russell bill and similar legislation before the Eightieth Congress for consideration at that time. Since the mining industry was seriously split on the subject of subsidies, and since the President had opposed the principle the previous year (at the time he vetoed the Allen bill), the problem resolved itself into the question; "Could a mining incentive bill be drafted to assist the mining industry which would be acceptable to the administration and to Congress?"

Recognizing that the situation of the small mine operator was difficult during the postwar period, and that mineral and metal shortages were still plaguing our economy-not to mention the acute shortage for the military stock pile-members of the staff of the Department of the Interior were instructed to review this legislation with all Government agencies even remotely concerned with problems of minerals production and consumption, or with policy matters pertaining to the national economy. To coordinate this work, many conferences were held under the auspicies of the Bureau of the Budget, in an attempt to draw up legislation that would be acceptable to the executive branch.

A subcommittee was appointed to draft a bill that would conform to administration policy. I do not intend to review the work of this group except to state that a sincere effort was made to draw up legislation that might be acceptable to the Subcommittee on Mines and Mining.

The executive departments, including the Department of the Interior, finally rejected production premiums as an alternative. The executive departments did, however, at that time, endorse aid for minerals exploration, and I will discuss our proposal in this connection presently.