although not acceptable for stock-pile purposes can be utilized by United States industry. The ECA together with other interested Government agencies is studying the feasibility and desirability of financing construction of additional plant facilities in the Gold Coast. Efforts are being made to expand Morocco production and to investigate the Turkish deposits. The ECA is also investigating the Belgian Congo deposit.

Mercury.-Italy is one of the world's two largest producers. There is substantial stock on hand in Italy and a considerable expansion of production is possible. However, the United States stock-pile position is comfortable enough to make the BFS unwilling to pay even ocean freight. The ECA is currently negotiating to purchase and ship a large quantity with counterpart funds if a satisfactory price can be reached.

Mica. A considerable quantity of strategic muscovite mica, principally from India, is available from the British Board of Trade, and a portion has been purchased with sterling counterpart funds. Phlogopite is produced in Madagascar and the ECA is pursuing the possibility of purchase, and production expansion if appropriate.

Nickel. Large nickel deposits occur in New Caledonia, and a large undeveloped deposit is known in Celebes. The ECA has relieved the bottleneck in New Caledonian production from shortages of Australian coal by arranging for shipment of coal from the United States. The proposals of the principal producer for finances to expand production are being given favorable consideration, and in cooperation with the producer, the ECA is seeking to interest private American capital participation. The ECA is doing likewise with reference to the Celebes deposit, where the concession owner is also willing to take an American partner. The New Caledonia producer is also willing to ship sintered ore to the United States.

Palm oil. Large areas within ERP territory are susceptible to palm oil production, given adequate assurance of markets. The two areas now producing a surplus are the Belgian Congo and the Netherlands East Indies. This material is under international allocation. A purchase is being made of a large quantity of NEI palm oil allocated to the United States with counterpart funds. Arrangements are also being made for purchase of a substantial tonnage each month in 1949 with counterpart funds.

Pepper.-Negotiations are now in progress in The Hague to secure a quantity of pepper for the BFS. This is difficult without disturbing world prices because

pepper is in such short supply.

Petroleum.-ERP areas are petroleum-deficient. The only important producing area is Indonesia. A petroleum geological consultant has prepared a report making recommendations as to what ERP areas merit attention. The use of ECA loan funds i also being considered for the expansion of British-controlled production in non-ERP territory.

Platinum.-No important production is known in ERP areas. An offer to sell a part of its inventory was made by the British Board of Trade, but the BFS was unwilling to sanction payment of then current market prices. An undeveloped platinum deposit is known in Northern Rhodesia.

Pyrethrum.-Kenya is a large producer, but the BFS is not at present interested in pyrethrum purchases.

Quartz crystal-Undeveloped deposits are reported in Angola (Portuguese) and Mozambique (also Portuguese), but the BFS has no active interest in acquisition with its dollars at present.

Quinidine.—A substantial purchase from the Dutch has been arranged, using 5 percent counterpart funds. The Dutch have also indicated a willingness to sell a large quantity of quinine, convertible into quinidine, or to ship cinchona bark. Rapeseed. This is produced in ERP areas and is available, but the item is being stricken from the stock-pile list.

Rubber.-Large quantities of rubber are available.

A purchase of 26,000 tons was made with 5 percent counterpart funds from the British Board of Trade. The Dutch have indicated a willingness to ship a considerable tonnage every month to the BFS during 1949 and to accept payment in counterpart funds. Natural rubber production is greatly expansible, but uncertainty over what level of synthetic production will be maintained by the United States as a strategic precaution is deterring investment, both in plantation rehabilitation and new development.

Sisal. Twelve thousand tons have been purchased from the British Board of Trade with counterpart funds, and more is available for 1949 delivery. Sisal

1

production, like other tropical vegetable materials, can be built up in various dependencies to any level for which a market is indicated.

Talc.-A strategic grade of block talc comes from Sardinia, but this is being made available to the BFS in satisfactory quantities through commercial channels. Samples of Austrian and bizone talc are being shipped for testing as to acceptability.

Tantalite. This material can be obtained from the Belgian Congo whenever the BFS desires to make a long-term purchase agreement.

Tin. The bulk of the world's tin comes from Malaya, the Netherlands East Indies, Belgian Congo, and Nigeria. A high level production is being obtained in the Belgian Congo and Nigeria. Investment in new production in Malaya is not at a rate sufficient to satisfy United States objectives. The area has been affected by banditry and the producers are fearful that increased production might well result in overproduction when stock-pile requirements have been met. Tin has been the subject of consideration by the international tin study group, which has been discussing an international agreement. The agreement will probably call for producers to expand production to the levels sought and for consumers to guarantee a sufficient market to safeguard necessary investments. The ECA intends to request the United Kingdom and the Netherlands to present programs for expanded production. The ECA and the RFC have developed a special purchasing arrangement to expand the production of Chinese tin concentrates and have them delivered to the Government-owned smelter at Texas City.

Tungsten.-China, Korea, Malaya, and Portugal are producing areas. Inventories are available, from China, and Chinese and Korean production can be expanded, whenever adequate dollar funds are available as there are no 5 percent counterpart funds in these countries.

Vanadium.-Vanadium is produced in Northern Rhodesia, but other ERP areas are deficient. An expansion program is contemplated.

Zinc.-Zinc ore is produced in Northern Rhodesia, Morocco, the bizone, Austria, Italy, France, Portugal, the Belgian Congo, Sweden, and Norway. However, none of this is produced in surplus over European needs. Zinc smelting is done in Belgium, United Kingdom, France, Bizone, Italy, and Norway, the ore coming from Australia, Newfoundland, and Latin America, chiefly Mexico. Some surplus of metal occasionally comes to the United States from Belgium and Norway. The ECA is studying possibilities of production expansion of zinc ore in Austria, Bizone, and Italy. Expansion programs are projected by the producer in Northern Rhodesia and the Belgian Congo.

*

STATISTICAL SUMMARY

*

TABLE IV-9.-ERP commodity procurement authorizations in United States and offshore by commodity group

TABLE IV-9.-ERP commodity procurement authorizations in United States and offshore by commodity group-Continued

TABLE IV-11.-Production and exports of copper, lead, and zinc, 1939 and 1946 quarterly averages, 1947, and 1948

1 Production data represent primary metal from domestic and foreign ores. Data for 1939 and 1946 are not strictly comparable with those for 1947 and 1948. Data for 1939 and 1946 are compiled by the Bureau of Mines. Data for 1947 and 1948, from industry sources, do not cover all firms but include some metal refined from scrap. The Bureau of Mines quarterly average figure for copper production in 1947 is 294,000 short tons, as compared to the Copper Institute figure of 299,000 shown in the table. The Bureau of Mines quarterly average lead production figure for 1947is 114,000 short tons as compared to the American Bureau of Metal Statistics figure of 135,000 shown in the table. For zinc slab the Bureau of Mines quarterly average production figure for 1947 is 216,000 short tons, compared to the American Zinc Institute figure of 212,000 shown in the table.

Exports may include metal from secondary materials as well as from primary production.

1947 and 1948 exports include copper refined from British-owned brass scrap which was sent to this country for refining and reexport. Copper exports to the United Kingdom, which are part of the totals reported here, increased from 7,000 short tons in 1946 to 71,000 in 1947 and 44,000 in January-September 1948, due largely to this reexport.

Estimates based on incomplete data.

Not available.

Source: Department of Commerce.

EXHIBIT 9

THE PREMIUM PRICE PLAN-ITS COST AND ITS RESULTS

(By Henning E. Olund,' Mining Engineer, U. S. Bureau of Mines, and Samuel A. Gustavson, Metal Economics Branch, U. S. Bureau of Mines, Washington, D. C.)

Any analysis of the effectiveness of the premium price plan for copper, lead, and zinc must be based on the solid ground of the cost and production data recorded as the plan unfolded. In this article, we offer, in somewhat condensed form, performance data covering the life of the plan (February 1, 1942, to June 30, 1947), and including fairly complete data on the special exploration premiums paid during the plan's last year.

We make little attempt at evaluation or analysis. We have chosen rather to present the facts as our contribution to the studies of the plan that we believe should be made as a guide for action in any future emergency.

The premium price plan took shape slowly over a 2-year period. It grew out of the Government's efforts, early in the defense program, to maintain and expand production of copper, lead, and zinc, and to maintain price stability.

METALS UNDER THE PREMIUM PRICE PLAN, FEBRUARY 1, 1942, TO JULY 1, 1947. WITHOUT PREMIUMS, JULY 1, 1947, TO PRESENT

1 Formerly Acting Director, Office of Premium Price Plan, Department of Commerce.

2 Details of methods and standards of operation of the PPP will be covered by the U. S. Bureau of Mines, Department of the Interior, in an information circular now in course of preparation.