if you would mind stating to the committee very briefly what your background is in business and what you did prior to the time you became a member and the chairman of the Munitions Board.

Mr. CARPENTER. I should be very glad to,

sir.

I am a graduate engineer of M. I. T. I was associated with the Dupont Co. for a number of years; in 1933 became associated with its subsidiary, the Remington Arms Co.; during the War I was in charge of all their production, development, and research activities.

I was industry chairman of the small arms ammunition committee, having under my general cognizance all small arms ammunition production in the United States.

Last April, at the request of Secretary Forrestal, backed up by the request of Mr. Lilienthal, I came to Washington to be Chairman of the Military Liaison Committee of the Atomic Energy Commission. In September, at Secretary Forrestal's request, having completed my term on the atomic energy work, I took the position as Chairman of the Munitions Board for a temporary period until the end of the year. In the middle of December, at President Truman's request, I continued in that position and will continue at his request until June 30. Does that answer your question, sir?

Mr. ENGLE. Yes, sir.

Mr. BARRETT. Mr. Chairman, you mentioned something about having some western connection. What did you mean by that, Mr. Carpenter?

Mr. CARPENTER. During the war, sir, we had one of our most successful operations in Denver, Colo., and another very successful operation in Salt Lake City, and the results and activity in those localities were most outstanding.

I might further add, in my first job after I got out of the Army after World War I, it was surveying in Idaho and Oregon.

Mr. ENGLE. Mr. Carpenter, there is one further question I want to ask, and then I am through.

I am quoting from page 24 of your current report, the first paragraph, and I find it is very difficult to reconcile this statement in your report with your previous statement that the Munitions Board under the policy set out in Public Law 520 is following the mandate of Congress, and I quote:

The policy has been successfully followed of never paying above the market price for materials and all funds have been committed or earmarked on this basis. This policy has the double virtue of insuring the Government's investment remaining sound and also bringing the largest possible quantity of materials into the stock pile for every dollar appropriated.

The significance of that statement to me is that it has not been the policy of the Munitions Board or of the procurement agency of the Munitions Board, which is the Treasury Department, to follow the direct mandate of Congress in giving effect to the Buy American clause under Public Law 520.

Can you reconcile that with your statement to the effect that the law is being followed?

Mr. CARPENTER. Could you comment on that, General?

General SPALDING. Certainly; the Board and the Bureau of Federal Supply have always had in mind the Buy American provisions. Mr. ENGLE. I think, General, it has remained securely in their mind, if you will pardon me. Go ahead.

General SPALDING. I feel the Buy American provision takes into account this market price, and certainly to the extent that the market price is modified by the Buy American clause that has been done in every case.

It might have been better to have reworded that particular sentence to show the relation of that to the Buy American Act.

Mr. ENGLE. Of course, the thing I am interested in is whether or not you are actually putting it into effect. I suspect you are not and have no intention of doing it. I think we ought to approach the problem very frankly.

I realize the Munitions Board regards its problem as one essentially of procurement and it accepts no responsibility at all for any program which is supplementary in nature to the direct objective of procurement.

I stated before that I think that is entirely too narrow a concept of the obligations of the Board or the necessities of the Nation, and it is the reason we are here today trying to write a program which will be of assistance along that line.

That is all of the questions.

Mr. Aspinall, do you have any questions?

Mr. ASPINALL. No questions.

Mr. ENGLE. If there are no further questions

Mr. MARSHALL. I have a question.

This gentleman has a very remarkable career. Many times in a matter of stock-piling materials, American industry is inclined to look upon that as something which handicaps American industry.

In your brief analysis in looking over these bills, do you feel this would have a depressing effect upon American industry and mining? Mr. CARPENTER. I am sorry, sir. I have not sufficiently studied these bills to be able to answer your question on that directly. Mr. MARSHALL. Thank you, sir.

Mr. ENGLE. If there are no further questions, the committee will adjourn until 10 o'clock tomorrow morning.

(Whereupon, at 12: 15 p. m., the committee adjourned, to reconvene at 10 a. m., Thursday, February 17, 1949.)

NATIONAL MINERALS ACT OF 1949

THURSDAY, FEBRUARY 17, 1949

HOUSE OF REPRESENTATIVES,
SUBCOMMITTE ON MINES AND MINING,
COMMITTEE ON PUBLIC LANDS,

Washington, D. C.

The subcommittee met at 10 a. m., pursuant to adjournment, the Hon. Clair Engle, chairman, presiding.

Present: Messrs. Engle, presiding, Peterson, Marshall, O'Neill, Aspinall, Lemke, Barrett, LeFevre, D'Ewart, and Sanborn.

Mr. ENGLE. The subcommittee will be in order.

Is there anyone here representing the Economic Cooperation Administration?

(No response.)

Mr. ENGLE. Is there anyone here representing the Lead Industries Association of New York?

Mr. ZIEGFIELD. Yes, sir.

Mr. ENGLE. Are you prepared to testify?

Mr. ZIEGFIELD. Yes, sir.

Mr. ENGLE. Would you like to proceed now?

Mr. ZIEGFIELD. Yes, sir.

Mr. ENGLE. I beg your pardon. I see Mr. Just has just come in. We would like to put him on first if we may.

Mr. Just, are you prepared to proceed now on behalf of the Economic Cooperation Administration?

Mr. JUST. Yes, sir.

Mr. ENGLE. We will be glad to have your statement if you have one to make.

Mr. JUST. I do not have a prepared statement, Congressman Engle. I thought you were simply going to question me. Mr. ENGIE. That is agreeable.

STATEMENT OF EVAN JUST, DIRECTOR OF STRATEGIC MATERIALS DIVISION, ECONOMIC COOPERATION ADMINISTRATION

Mr. ENGLE. Mr. Just, for the information of the committee, will you state your full name and the position which you occupy with the Economic Cooperation Administration?

Mr. JUST. My full name is Evan Just. I am Director of Strategic Materials Division, Economic Cooperation Administration.

Mr. ENGLE. What is the function and purpose of the Strategic Materials Division of the Economic Cooperation Administration? Mr. JUST. We are supposed to administer sections 115 (b) 5, 115 (b) 9, and 117 (a) of the Economic Cooperation Act, which require

the participating countries to expand production of materials deficient or potentially deficient in the United States, and to facilitate their transfer to the United States; also to arrange schedules of availability for the United States and to give United States enterprises equal treatment with their own citizens in the development of resources.

Mr. ENGLE. To summarize, I understand your job is to administer the development of these materials in foreign countries which are short in this country.

Mr. JUST. That is correct.

Mr. ENGLE. And to get equal treatment for our citizens in business. in those foreign countries developing those materials with the citizens of those countries. Is that a correct statement of it?

Mr. JUST. That is correct, although the act does not state whether the United States citizens would necessarily be in business with the citizens of that country or not. The act simply calls for equal treatment to United States enterprise on the same basis accorded their own nationals.

Mr. ENGLE. Do you have anything to do, Mr. Just, with the expenditure of money under the ECA program for the purpose of developing critical and strategic minerals and metals in foreign lands? Mr. JUST. Yes.

Mr. ENGLE. Can you tell the committee how much money has been spent and under the program will be spent in foreign lands in the development of mines for the production of critical and strategic minerals and metals?

Mr. Just. It is impossible to tell how much money will be spent because we have to learn as we go along and develop projects. Up to the present time, we have actually spent the equivalent in local currencies of approximately $22,000,000, and have in the mill, expenditures in local currencies-I mean in this instance for procurment items adding up to a total of the equivalent of around $40,000,000. In addition to that, we have various development items under consideration, ranging individually up as high as $10,000,000, which may involve both local currency counterpart funds and dollars.

Mr. ENGLE. In other words, when you get all through, it will add up perhaps to 50 million, which you have in mind at present?

Mr. JUST. I would say if all the development projects that we now have in mind should mature, the expenditures for this purpose would be more in the neighborhood of the equivalent of a hundred million which may involve both local currency counterpart funds and dollars. Mr. ENGLE. Those expenditures are not, as I understand it, directly in the procurement of these strategic materials, but rather are spent in financing development of mines producing those strategic materials. Is that correct?

Mr. JUST. We are devoting funds to both purposes. We have what are known as the 5-percent local currency counterpart funds which are available to us for procurement purposes. We hope to be able to spend out of that total fund the equivalent of $193,000,000 in local currency, something like 75 million in procurement items or advances against production. These latter are local currency advances against production.

I would think that the development items, in addition to the local currency class of expenditure, that would use dollar money would probably exceed 50,000,000 more.

Mr. ENGLE. To get an understanding of this 5-percent fund, am I correct in my thinking that the 5 percent is 5 percent of the grant money given to any nation which can be used for the purpose and is directed to be used for the purpose of purchasing these strategic materials?

Mr. JUST. The ECA Appropriations Act simply says "for strategic materials." We interpret that as meaning either for procurement or for development purposes.

Mr. ENGLE. But that is in addition to funds which are available otherwise; is that correct?

Mr. JUST. That is right. There was a special earmarking put in the appropriations act of 5 percent of the local currency funds which the participating countries are required to put up against general ECA grant assistance. It is not in the enabling act.

Mr. ENGLE. You mentioned the amount of 193 million?

Mr. JUST. It is estimated the 5-percent local currency funds will total that much as of April 2, 1949. However, much of it is pent up in countries where relatively small fractions can be spent for strategic materials. Some of the countries have no surplus of strategic materials.

Mr. ENGLE. You mentioned a minute ago an additional figure of 50 million. What did that relate to specifically?

Mr. JUST. I said I believe we will spend more than 50 million on development items involving ECA appropriated dollars.

Mr. ENGLE. On development items?

Mr. Just. Yes, sir.

Mr. ENGLE. And a hundred million which you referred to before is all procurement, or does that relate in some degree to development? Mr. JUST. I meant to indicate both by that statement. I said it would be more in the neighborhood of a hundred million than forty.

Mr. ENGLE. I have your report, Mr. Just, which you were kind enough to send me under date of February 14, 1949, which is entitled "European Recovery Program, Strategic Material, Basic Document." (The document referred to is included in the appendix as exhibit 8, p. 302.)

Mr. JUST. That, I may say, is now incorporated into this larger general report to Congress of the ECA.

Mr. ENGLE. From a reading of that report, I get the impression that ECA is not too happy with the way this program has gone to date. That is, so far as satisfying their own objectives are concerned. Is that correct?

Mr. JUST. As far as what we deem to be Congress' clear objectives under the act, we are not satisfied with the results today.

Mr. ENGLE. In terms of actual material which has been delivered, what has been contributed under this program to our national stock pile of these strategic materials? I am trying to differentiate now between what is delivered, what is contracted for, and what has been earmarked. Sometimes these bookkeeping arrangements puzzle me a little bit.