Mr. D'EWART. That was going to be my next question.

Do you make any of this money available to the Bureau of Mines for this study?

General SPALDING. Only insofar as it pertains to the beneficiating of substandard stocks on hand which we receive as surplus transfers. Mr. D'EWART. I have in mind particularly, chrome, of which the largest deposit is in my State and where we have a problem of processing that ore to meet specifications that your stock pile demands. We have that huge deposit there. We need funds for the study of making it available for your stock pile. I wondered if any of your funds were made available for that purpose. They could be under the law, could they not?

General SPALDING. It has been generally held that that work is under the appropriations made to the Department of Interior for that purpose.

Mr. D'EWART. I agree that is the way it has been done in the past, but there is nothing in the law to prevent you doing that if you so desire as far as I know.

General SPALDING. It has been the general interpretation, I think of 520 that money was used primarily for the stock piling and, to the limited extent I mentioned, for the beneficiation of material already in the stock pile.

Mr. D'EWART. Do you use any of your funds for stock piling in place, that is, an ore body you know contains the mineral you need? Do you develop that ore body by driving tunnels, shafts, and so forth, for stock piling in place or wholly for treated ores?

General SPALDING. No, sir.

Mr. D'EWART. You do not do any stock piling in place at all?
General SPALDING. No, sir.

Mr. D'EWART. In the hearings a year ago, several questions were brought out in regard to the difficulties in meeting your specifications. Have those difficulties been largely overcome? Can you tell us?

General SPALDING. We are constantly checking with industry on our specifications to make sure they conform to the needs of industry. There are certain cases, of course, where the material in the stock pile would be required in time of war to balance up some low-grade material. We must bear in mind that we should have in the stock pile the materials most urgently needed in time of war.

Mr. D'EWART. If I remember the hearings, a while ago you had acquired in your stock pile certain ores that had a specification that did not meet industry requirements.

Do you still have those?

General SPALDING. Yes, sir, we still have materials that were received from surplus stocks under the control of RFC.

Mr. D'EWART. That is all I have, Mr. Chairman.

Mr. ENGLE. Mr. Regan.

Mr. REGAN. Mr. Carpenter, Mr. Mansfield, in his presentation of the bill, said that so far the results of stock piling had been very meager, is that correct?

Mr. CARPENTER. We can give you the further classified information later on on that, sir, but it has been public information that the amount

we have on hand, plus the amount on order or earmarked, represents 38 or 39 percent of the total objective.

Mr. REGAN. You say if the funds were available, you feel you could achieve our objective from the present sources now available?

Mr. CARPENTER. Not at the moment, sir. The objective is very large, but if the funds were available we could place contracts for considerably more at the present time. To buy enough at the present time to meet our objective, we feel would put too severe an impact on industry generally.

Mr. REGAN. I would like to ask you this question: Do you feel that legislation such as is proposed here is necessary to achieve the objective of stock piling?

Mr. CARPENTER. I am not in a position to give you a direct answer on that. It is my impression that the way things have been going recently, we will meet our objective in a few years' time, granted adequate funds and that this program would not be necessary. I cannot be too certain. Would you double check me on that, General?

Take a very surprising item in the stock pile, pepper. That all comes from outside the United States. We are far below our objective. You do not propose to produce pepper by this program. Things of that kind must be secured elsewhere.

Mr. ENGLE. Will the gentleman yield at that point?

Mr. REGAN. Yes, sir.

Mr. ENGLE. Mr. Carpenter, I would like to read you a statement from page 33 of your current report.

The objectives of the program are minimum ones. Even when these objectives have been fully attained, the stock pile would not be able to cure all wartime shortages. It would do no more than ease the desperate critical shortages that might otherwise block our war production completely.

Do you subscribe in all particulars to that statement in the report? Mr. CARPENTER. Yes sir.

Mr. ENGLE. If that is true and at the present time continuing your long-range contracts, and I understand that over 85 percent of those are from foreign sources, in the event we got into a national emergency this week or within the next 6 months, you could not depend upon being anywhere near even the minimum objective which you have under this program, could you?

Mr. CARPENTER. That is correct.

Mr. ENGLE. And once you have established that objective, assuming you have the time and the money to do it, then it is only a program which would ease the desperately critical shortages that might otherwise block our war production completely.

I want to ask this question: Have you ever considered maximum objectives as distinguished from minimum objectives set up in the report and which I referred to in the sentence which I have quoted?

Mr. CARPENTER. The matter has been discussed. We have never given it serious consideration because, as you know, when you get into military requirements, maximums run pretty high.

There are some bases which are discussed which would call for stock piles large enough to eliminate dependence on any sea-borne

92987-49-ser. 14- -3

shipments in the event of an emergency. In other words, we would rely only on the materials coming from the United States, Mexico, and Canada. The dollar value of such a stock pile is completely staggering.

Our present stock pile is calculated on the basis of the total amount required during a period of emergency, minus the amount that we can reasonably expect to get in during a period of emergency, anticipating the availability of some water-borne shipments.

Some people say our stock pile should not count on water-borne shipments during time of emergency, but should be dependent on rail shipments only. Calculations have been made on that basis and the amount of money required for such a stock pile is very, very appreciable.3

Mr. ENGLE. The thing that inspired the question which I asked was your statement that this program was not necessary.

Mr. CARPENTER. Yes, sir.

Mr. ENGLE. In view of the statement in your report that your program is a minimum program and would only operate to prevent our war production being shut down completely in the event that you achieved the objectives of your minimum program, how can you then say that this proposal, supplementing the effort which is being made along that line, is unnecessary?

In other words, I cannot understand, Mr. Carpenter, how you can make a categorical statement like that in view of the admissions in this report.

Mr. CARPENTER. The situation at the present time is as you state. If we should have an outbreak of war tomorrow morning, our stockpile situation would be desperately short. We can go a long way in correcting that situation very readily if funds are made available. Materials are being offered continually at the present time which we are not in a position to purchase. My remark was based more on that situation.

Mr. ENGLE. If the gentleman will yield further, let me put it this way: Has your Board considered the fact that it would be extremely beneficial to our Nation in wartime to have the stock pile, whatever it was, backed by a healthy and vigorous domestic mining industry, producing at least minimum quantities of most of these materials which are needed?

Mr. CARPENTER. To the extent that that condition existed the national security would be benefited.

Mr. ENGLE. In other words, this program could be very, very helpful in such event; is that correct?

Mr. CARPENTER. Yes; I would say so.

Mr. REGAN. I had no further questions, Mr. Chairman.

Mr. ENGLE. Are there any further questions? Mr. Barrett?

Mr. BARRETT. I would like to ask mine off the record if the chairman does not mind.

Mr. ENGLE. If it relates to what might be called classified material, we are going into executive session.

Mr. BARRETT. I want to talk about wool and I do not care to bring it into your discussion here, but it is a matter for these gentlemen to be considering.

3 SUBCOMMITTEE NOTE.-The dollar value of the maximum stock pile objectives is said to be in excess of $14,000,000,000 at present metal prices.

(Discussion off the record.)

Mr. D'EWART. Mr. Chairman, at the hearing a year ago, I read a statement from Commodore Straus into the record that emphasizes this picture very clearly. Could I have the clerk read that statement? Mr. ENGLE. Yes; without objection it is so ordered.

Mrs. ARNOLD (reading):

After a war has begun-and it is now conceded that the next war, if we have one, is likely to come suddenly with no advance warning-it may be too late to acquire these materials from other countries. We may be denied access to the principal world sources of many strategic materials, and we can well remember how, in early 1942, when the Japanese had cut our sea communications to the Far East, we were denied access to our principal sources of supply for tin, rubber, manila fiber, quinine, and other necessary commodities.

While the Far East was completely shut off, other areas became inaccessible to varying degrees as the result of enemy action.

Shipping routed to India, the east and west coats of Africa, and South America, suffered costly losses, and the Mediterranean was practically closed to traffic. In the winter of 1942-43, for example, substantial tonnages of bauxite from the Guineas, then critical in our airplane program, were lost due to enemy submarine action. Such quantities of strategic materials as we did successfully import from those areas which were not completely cut off, were imported at considerable cost to the war effort. Combat vessels needed elsewhere had to be assigned to protect this shipping. Ships which were needed for the transport of personnel and supplies required by the armed forces had to be diverted from that use and their destruction risked.

Furthermore, a substantial tonnage of heavy materials had to be flown from ́ China, Africa, India, and South America at great cost and uneconomic use of fuel, trained personnel, and airplanes.

These desperate efforts did not save us from many delays and set-backs in our production program caused by the shortages of needed strategic materials. The lesson to be learned is, obviously, that we cannot afford to gamble with our security on the chance that in another national emergency we could again be so fortunate.

Mr. ENGLE. Are there any further questions?

Mr. LEMKE. Mr. Chairman, I would like to ask Mr. Carpenter a question or two or make some suggestions.

Last year, it was testified by governmental officials here, who ought to know, that the Latin-American Republics were in such a turmoil that in case of war it depended on what country we were at war with whether or not we would have any railroad transportation. They could all be blown up.

I think that is one thing we must remember about rail transportation. Russia has about five time as many submarines than Germany had at the peak. It has been reported that during the early part of World War II German submarines sank 52 of the 60 ships used to transport bauxite from South America.

In view of that, do you not think it is rather vitally important that we increase and have more than a minimum supply in the stock pile? Mr. CARPENTER. I am very much in favor of building up this stock pile, sir. I am very well aware of conditions such as you mentioned. Mr. LEMKE. Then you would have no objection to any legislation. that in the view of this committee and of Congress would supply an increase in the stock pile?

Mr. CARPENTER. My statement, sir, was that currently the limiting factor in building up the stock pile is the availability not of materials but of funds.

Mr. LEMKE. Also the need in a stock pile and the amount may change overnight because of new inventions and new equipment.

Nobody can tell definitely how little we can have, but nobody can venture either how much we should have.

Mr. CARPENTER. That is correct.

Mr. LEMKE. Thank you.

Mr. ENGLE. Mr. Carpenter, I believe you stated that this minimum objective program is now 39 percent complete, acquired, contracted, and earmarked. Is that correct?

Mr. CARPENTER. That is right.

Mr. ENGLE. Would you mind telling us percentagewise, not quantitatively, but percentagewise, how much is acquired, how much is contracted for, and how much is earmarked?

Mr. CARPENTER. I wonder, sir, if we could give that in the executive session?

Mr. ENGLE. That would be agreeable if you prefer it that way. I think there is a very vast distinction between what is acquired, what is contracted for, and what is earmarked.

Mr. CARPENTER. We learned that early in the war; you are absolutely right.

Mr. ENGLE. I think, also, if you had any contracts over in China for tungsten as you may have had, that you may find out that a good deal of this material contracted for or earmarked is not going to be actually available.

There are several other questions I would like to ask.

The first is: Have you given any study to the bills immediately pending before this committee with reference to whether or not they are in conflict with any of the limitations and recommendations which you made in your statement?

Mr. CARPENTER. I have not personally had an opportunity thoroughly to review these bills, sir. They have been, at least two of them, reviewed by our staff and the statement that I gave was based upon that review.

Mr. ENGLE. General principles are easy to state, but specific legislation is hard to write.

Will you make a study of these particular bills, and by and large there are only two of them, the others are all duplicates, and give us the comment of your Board with reference to how these bills will directly affect you, and whether or not the language embodied in them comes within the recommendations which you made, or at least are not in conflict with the recommendations which you made?

Mr. CARPENTER. We will be glad to do that, you wish us to review H. R. 976 and H. R. 2031?

Mr. ENGLE. Those are the bills which I have in mind. The others are duplicates or substantially the same language and approach. Mr. CARPENTER. We will review them.

Mr. ENGLE. I wonder if we could have that within a reasonable time? What would you suggest is necessary?

Mr. CARPENTER. Ten days to 2 weeks. Would that be too long?
Mr. ENGLE. I would much prefer it sooner than that.

Mr. CARPENTER. We can get that.

Mr. ENGLE. I do not want to appear to be presumptuous.

Mr. CARPENTER. We want to accommodate your desires in this respect.

Mr. ENGLE. I was going to ask another question in order to better evaluate your testimony in the light of your background. I wonder