prevent it, if we can get a wise production stimulated before the need, and get the minerals and metals stock piled.

That, of course, is the thing for which I plead. We know that in the State of Arizona, which is a mining State, the small man has not been given a chance. The big corporations have done a magnificent job, but they are big.

Big mines grow out of small mines. For that reason, if we look ahead, we ought to encourage small mines to be big mines. That is the kind of legislation I am favoring with all the energy that I have, and I am seeking more light on it, Mr. Chairman. That is my present interest in these two proposals before us.

Mr. ENGLE. We thank you very much, Mr. Murdock.

The Chair desires to recognize the presence and the interest of our colleague, Congressman Martin of Iowa, who has taken an intense interest in this legislation and who on several occasions has been with our committee during hearings on strategic and critical minerals and metals and on stockpiling. Whenever we get on the floor of the House with this legislation, he always wields a strong right arm and a strong voice in support of it.

Do you have any comment to make, Mr. Martin?

Mr. MARTIN. I want to commend the committee on the attention you are giving to these bills here under consideration. As the committee knows, they have a tremendous bearing on our national defense, and that is my interest in the matter.

Mr. Secretary, I have worked over some of these problems with you for many years in the Military Affairs Committee, and I believe you know my views and my interest in building a sound backlog of industrial preparedness. That is the interest which has brought me up here from the session of my own Committee on Ways and Means to listen to you.

I do want the committee to know that I appreciate very much the attention given to what I consider the starting point of adequate national defense, a healthy mine development in our own Nation.

The concomitant of that is the stock-pile program. Back of the stock-pile program, to my way of thinking, is the healthy mine development within our own Nation, which takes No. 1 place at the starting point of an adequate national defense and preparedness.

Secretary KRUG. I am glad to hear you say that, sir. Your words are more eloquent than mine, but I tried to express those same sentiments before you came in.

I think we not only need a stock pile but much more we need a healthy mining industry to back us up in our periods of need. You cannot offset a weak industry with big stock piles. We have to have

both.

Mr. MARTIN. Exactly. I know that they both go together. We have to have both.

I want to say that during my observation of this committee they have a better understanding of that problem than anyone else on Capitol Hill that it has been my privilege to work with.

We had two or three individuals in other committees who are well informed, but I have found that this committee knows more as a committee than any other committee in Congress as to the importance of the mine angle to our defense.

Secretary KRUG. Having worked with this committee for several years now, I want to echo your sentiments.

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

I am glad to hear you say, Mr. Secretary, that a big stock pile is no substitute for a strong industry. We believe that. We realize, of course, that the Munitions Board in trying to build a strong stock pile, has put its emphasis on procurement, and feels no prime responsibility for the development of what you might call a secondary stock pile in the form of a good mining industry.

It would seem tragic to me, and a tragedy to the mining industry, if, while agreeing on objectives and agreeing on principle, we cannot write a bill which will accomplish those objectives and accomplish those principles.

I do not think there is any basic disagreement in regard to where we are going. It is simply a question of how we will get there.

I have said many times that this committee is willing to give and take. At least, so far as I am concerned, that is true, and I think that expresses the views of the other members of the committee.

We realize that as a legislative matter our task is made much easier if we have the concurrence of the agency of Government which will be required to administer this program in getting it through Congress. We want to work that out if we can.

As I understand it, Mr. Secretary, you are in agreement with us on objectives. You are in general agreement with us on the proposition that the mining industry needs a stable market and that an incentive program of one kind or another will provide a stable program which will bring about the necessary production.

You are willing to write into a bill which has a basic selective contracting character, nevertheless, standards on which those contracts will be given; but you want to reserve to the Department some discretion in the granting of those contracts in order to protect against what you feel may be an unwarranted gouging of the Federal Treasury or an actual reduction in total production, rather than an increase in total production.

Is that a fair summary?

Secretary KRUG. That is right. That is a fair summary, Mr. Chairman.

Mr. ENGLE. If that is the case, it seems to me that we are closer together than might appear from the surface. I have said that many times before in this committee. I am perfectly willing to listen to the proposal of the Department of the Interior which undertakes to set up some standards in the contracts.

Are there any further questions from the committee?

Mrs. BOSONE. Mr. Chairman, of course, I realize I am not a member of this committee, but I am interested in mines and mining. I think, if my family had the money it put in assessments in the mines in the State of Utah, I would not have to work for a living.

Mr. ENGLE. You could at least buy a new spring hat or something? Mrs. BOSONE. That is right. I am very much interested in what Congressman Welch, of California, said, and also what our Secretary has said, that when you take a ton of mineral, whatever it may be, out of the earth we have just taken it out and it cannot be replaced. Some of you asked a question as to whether or not we were interested

in the building of stock piles for future defense, or whether we were interested in building up the mining industries. I want to say here, and perhaps I should say it almost parenthetically, that I am really interested in the welfare of my grandchildren which I probably will never see but I hope to have. Since we do have people, we must have stock piles to back up our activities in defense.

I am just wondering how far, Mr. Secretary, we have gone with surveying our mineral resources to know how far you can go in developing the mining industry.

Secretary KRUG. Well, we have not gone nearly as far as we should. Mrs. BOSONE. That is what worries me.

Secretary KRUG. I have consistently advocated a much larger program than is presently being carried on.

While you people are beset day by day with the problems of individual mining operators who, of course, have many problems of their own, the long-range pull of the country is an infinitely larger problem and is one that we should not lose sight of just because it is not on our backs at the moment.

I feel that if the Government carries on an aggressive program, through the Geological Survey and through the United States Bureau of Mines, in finding out what we have and what we can do with it that perhaps the day will never come when we will have a lack of the materials we need for maintaining our standard of living, expanding and improving it, and also protecting the Nation.

However, it does require a tremendous amount of work on the part of Government as against 10 years ago or 20 years ago or 50 years ago because of the constantly increasing drain, and, of course, the decreasing availability of supply.

I do not want to take your time this morning with a general discussion of it, but just as a single example, in the crust of the Nation in almost every State and, as a matter of fact, in the waters of the sea, there is an infinite source of material for aluminum and for magnesium. Both of them could be used to substitute for many metals which are in short supply, but we have not mastered certain of the steps. We do not know yet how to get aluminum from our aluminum clay in this country.

We built four experimental plants during the war, and they have either been dismantled or closed down, without finding out the answer, because the war ended before the program was completed.

There is not any question in my mind but that we can find the method. While we have not found it yet, we go on wasting materials that are in short supply.

The same is true with magnesium. There are all kinds of sources of magnesium in this country, and in the sea waters surrounding the country, but the methods of using magnesium have not been developed to a point where, as a matter of fact, industry is using them, where it could, as against using scarce materials.

I have talked at great length and made many reports on developing our shale resources to take the drain off our petroleum. As you know, from your own State, the deposits of shale are tremendous. That one large deposit in Colorado and Utah alone has 100,000,000,000 barrels of liquid fuel.

Those steps of that kind, which are of vital importance if we are thinking about the over-all long-term security of the Nation and its future, should be taken.

Mr. D'EWART. Mr. Chairman, I have one request.

Mr. ENGLE. Mr. D'Ewart.

Mr D'EWART. Could copies of the Secretary's report and the proposed legislation be made available to the committee so that we will be prepared when Mr Boyd and Mr. Slaughter appear before us?

Mr. ENGLE. Yes. The Secretary read the report as a part of his statement. Therefore, the report is in the record.

The committee members will be supplied with copies of that, and without objection, immediately following the reading of the report of the Secretary's statement, we will include in the record the сору of the proposed bill which was attached to the statement and which is one dealing with exploration.

As I understand it, Mr. Boyd has one on incentive contracts, which undertakes to write some standards, which is a separate bill.

Dr. Boyd, if you have no objection, I would suggest that the bill be filed with the committee and be made a part of the record at this point. (The document is as follows:)

DRAFT No. 9

SUBMITTED BY THE DEPARTMENT OF THE INTERIOR APRIL 7, 1940

A BILL To stimulate the exploration, production, and conservation of strategic and critical ores, metals, and minerals, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "National Minerals Act of 1949".

STATEMENT OF POLICY

SEC. 2. It is the policy of the Congress that every effort be made to stimulate the maximum exploration, production, and conservation by private enterprise of strategic and critical metals and minerals, and other essential metals and minerals, to supply the industrial, military, and naval needs of the United States and that every effort be made to encourage the development and maintenance of sources of these metals and minerals within the United States in order to decrease and prevent, wherever possible, a dangerous and costly dependence of the United States upon foreign nations for supplies of such materials. To this end it is the further policy of the Congress that every effort be made to stimulate, stabilize, and maintain a sound and active mining industry within the United States; to expand exploration for those ores and other mineral substances which are essential to the common defense or the industrial needs of the United States; and to encourage the commercial extraction and production of those ores and other mineral substances which are needed for the national security stock piles by purchasing the same at such prices as will enable marginal properties to continue operations, submarginal properties to resume operations, and newly discovered or developed properties to begin operations.

SEC. 3. (a) This Act shall be administered by the Secretary of the Interior, hereinafter referred to as the "Secretary", through such bureaus, divisions, or agencies in the Department of the Interior as he may deem necessary to use or establish for this purpose. The Secretary shall, so far as he deems practicable, use or establish field offices, situated at points convenient to the mining industry, in carrying out the provisions of this Act.

(b) It shall be the duty of the Secretary, and he is hereby authorized and directed, (1) to perform the functions hereinafter specifically authorized, and (2) to prescribe rules and regulations for carrying out the provisions of this Act in the simplest manner he determines to be feasible.

(c) The Secretary may select, employ, and fix the compensation of such engineers and other experts as may be necessary to carry out the purposes of this Act without regard to the civil-service and classification laws, and shall employ such other staff as he may deem necessary.

(d) The Secretary may delegate any of his functions under this Act to such officers or employees of the Department of the Interior, or of any bureau, division, or agency thereof used or established for the purposes of this Act, as he may designate, but all functions so delegated shall remain subject to the supervision and direction of the Secretary.

(e) All records of the Department of Commerce which relate primarily to the premium price plan for copper, lead, and zinc shall, upon request by the Secretary, be transferred and delivered to the Department of the Interior.

SEC. 4. (a) To carry out the purposes of this Act, exploration contracts shall be made as prescribed by the Secretary, on behalf of the United States, with any bona fide producer of strategic or critical metals or minerals or of essential metals or minerals who applies for such a contract, subject to the limitations of this Act. Such contracts shall provide for the payment by the United States of a share of the costs of eligible exploration to be incurred by the producer, on the following bases:

(1) Payment of 50 per centum of the costs of eligible exploration, to the extent that such costs do not exceed in any one month $3,000 for each mine in actual operation that is covered by the exploration contract.

(2) Payment of such share of the costs of eligible exploration, not to exceed 50 per centum thereof, as may be determined by the Secretary to be requisite for the undertaking of particular projects of eligible exploration, to the extent that such costs exceed the limitations prescribed in clause (1) of this subsection for any project covered by the exploration contract. The producer shall designate in his application whether he desires to have an exploration contract solely on the basis provided for in clause (1) of this subsection, or on that basis combined with the basis provided for in clause (2) of this subsection.

(b) Exploration contracts made pursuant to this section shall provide for the performance of eligible exploration during such period of time as may be fixed by the terms of the contract, but such period shall not be longer than three years from the date of the making of the contract. The Secretary may, in his discretion, renew, or extend the term of, any such contract if he deems such renewal or extension to be desirable in order to carry out the purposes of this Act.

(c) Payments for eligible exploration shall be made periodically, after performance of and payment for the work by the producer, upon suitable vouchers setting forth in detail the costs of the eligible exploration upon which the payments are to be based. The Secretary may, however, make advance payments for eligible exploration to producers holding exploration contracts entered into solely on the basis provided in clause (1) of subsection (a) of this section, upon such terms and conditions as he may deem necessary or appropriate for the protection of the interests of the United States, but the total advance payments outstanding at one time on account of any one mine shall not exceed $6,000, and each advance payment shall be accounted for to the United States by suitable vouchers within four months from the time when it is made or shall be repaid to the United States within that time. All such advance payments shall be held in trust by the producer for the account of the United States, shall not be commingled with other funds, and shall be expended only for eligible exploration in accordance with the terms of the contract between the producer and the United States. All vouchers for eligible exploration shall be subject to audit by the Secretary, and any amount found by him to have been improperly obtained or expended by the producer may be recovered by the United States in any appropriate form of action.

(d) The amount payable under this section to any one producer on account of eligible exploration conducted in any one period of twelve consecutive months shall not exceed $500,000.

(e) Subject to the limitations of this Act, the Secretary shall include in exploration contracts such terms and conditions as he may deem necessary or appropriate for carrying out the purposes of this Act, and may at any time modify the terms and conditions of any such contract, including the share of the