Graphite. The United States, in 1948, imported a total of 52,142 short tons, valued at $2,042,095, broken down into the following grades and types:

Most of the strategic grades of graphite are included in the crystalline flake and crystalline crucible lump and chip grades. The strategic grades of graphite are imported almost entirely from Madagascar and Ceylon. Other sources of graphite are Mexico, Canada, and India.

In 1948 the United States exported 1,047 short tons, valued at $127,931, broken down as follows:

It will be noted that only 44 tons of flake and 139 tons of amorphous graphite might be of strategic quality, a very small fraction of the quantity imported. In addition, some strategic graphite is exported in the form of manufactured items. While no definitive data are available, it is known that the quantities involved are small.

Iodine. United States imports of crude iodine during 1948 amounted to 592,136 pounds, valued at $347,752, virtually all of which originated in Chile. This material is processed in the United States and much of it is exported in the form of refined iodine and other chemicals.

United States exports of iodine, iodides, and iodates during 1948 totaled 271,459 pounds, valued at $550,493. Large stocks of Chilean iodine are warehoused in the New York area by the importing firm. Imports vary greatly from year to year, but ample supplies are always available to American consumers from the warehouse stock. Some crude iodine may be reexported but this movement has an appreciable effect on availability to American industry. In recent years supplies of iodine have been ample to meet all domestic requirements.

Kyanite. The United States imported in 1948, 17,091 short tons of kyanite, valued at $259,055. The greatest portion of this commodity originates in India and British East Africa. Kyanite and allied minerals, sillimanite and andalusite are used in many refractory products. Modern high-temperature metallurgical processes have created a demand for raw material for furnace parts and linings that not only will withstand high temperatures but will not react with the substance being melted in the furnace.

Exports of kyanite and allied minerals in 1948 amounted to 413 short tons, valued at $21,813, or less than 3 percent of the quantity imported. No doubt there are some exports of manufactured products containing calcined kyanite (as a high-alumina refractory), but no quantitative data are available.

Lead.-The United States in 1948 imported 64,170 tons of lead contained in ores, concentrates, and matte, 7,384 tons of lead in base bullion, and 246,684 tons in pigs and bars, a total of 318,238 tons. The bulk of the pig lead imported came from Mexico, Canada, Australia, and Peru; virtually all the bullion originated in Mexico; and countries supplying lead in ores, concentrates, and matte included Bolivia, Union of South Africa, Australia, Peru, Newfoundland, and Canada. Total exports of pig led in 1948 were 398 tons, an insignificant quantity compared with the imports. Additional lead is exported in manufactured products as a result of our normal foreign trade activity.

Manganese.-In 1948 the United States produced only 8 percent of its total supply of manganese ore; imports were 1,256,646 short tons. Experts during the

year totaled 9,236 tons of manganese ore and 19,696 tons of ferromanganese, equivalent to 37,974 tons of manganese ore or a total of 47,210 tons of ore equivalent. These exports although less than 4 percent of the total imports were abnormally high and a substantial reduction in shipments is already evident in 1949. In addition, exports of steel and fabricated steel products constituted a further export of manganese to the extent to which manganese was used in their manufacture. The largest recipient of manganese exported in the form of ferromanganese was Belgium, which obtained 76 percent of the total. Most of the balance was shipped to Austria, Canada, Italy, Mexico, and the Netherlands.

Mica. The United States is largely dependent on foreign sources for strategic grades of mica. India and Brazil are the principal sources of strategic muscovite. Canada and Madagascar are the principal sources of strategic phlogopite.

Statistics on foreign trade in mica do not distinguish strategic from nonstrategic qualities. However, it is estimated that over 17,000,000 pounds of strategic quality mica were imported in 1948.

United States exports of mica (all grades and qualities) during 1948 were as follows:

The ground and pulverized mica being exported is not of strategic grade. Some of the unmanufactured mica may be of strategic grade but this quantity as compared with imports is very small.

Nickel.-The United States is almost wholly dependent on foreign sources, chiefly Canada, for its supply of nickel. Imports were 182,235,000 pounds in 1948. Exports comprise largely products manufactured from imported raw materials; they were about 11,951,000 pounds in 1948 and included 2,706,000 pounds of metallic nickel, 8,545,000 pounds of alloy and scrap (chiefly monel metal), 252,000 pounds of nickel silver, and 448,000 pounds of nickel-chrome electric resistance wire. Nickel supplies in 1948 were adequate for domestic industrial and stockpile requirements.

Platinum. The United States is dependent on foreign sources, chiefly Canada, Colombia, and the United Kingdom, for the greater part of its supply of platinum from virgin materials. In 1948, for example, 123,940 ounces were derived from foreign sources and 11,589 ounces from domestic sources. In addition, however, 58,527 ounces of platinum were recovered in the United States from refining scrap material.

Exports of platinum were 15,471 ounces in 1948, and consisted largely of fabricated articles in which the United States has a leading world position.

Quartz crystal.-The United States at present is dependent primarily on Brazil for domestic requirements of radio-grade quartz crystal. The 1948 imports of "Brazilian pebble" were 1,236,520 pounds valued at $4,206,977. The export class into which quartz crystal falls also includes optical glass and other items, and therefore, no export stratistics on strategic grades of quartz crystal are available. However, a considerable but indeterminable amount is exported in radio transmitting and receiving equipment, and other communication and piezoelectric units. Some crystals are exported by brokers who act only as agents for Brazilian producers. A portion of the material imported is unsatisfactory for piezoelectric uses because of twinning and other imperfections. This fusing quartz is exported in undetermined amounts as a component of numerous items such as fused-quartz sheets, tubes, rods, etc., for use as optical lenses, X-ray tubes, chemical ware, and many others. In recent years available supplies have been sufficient to meet current industrial and stock piling requirements. Our exports of quartz crystal are largely incidental to our international trade in manufactured products.

Tungsten. The new supply of tungsten made available to the United States in 1948 was 11,578,828 pounds (tungsten content) and comprised 7,578,828 pounds from foreign sources, chiefly China, Korea, Bolivia, and Brazil, and 4,000,000 pounds from domestic mines.

Consumption of tungsten concentrates in the United States was 8,853,000 pounds (tungsten content) in 1948.

According to the United States Department of Commerce, 680,948 pounds (gross weight) of tungsten concentrates and 1,255,435 pounds (gross weight) of ferrotungsten were exported in 1948. These exports are estimated to be equivalent to 1,443,000 pounds (tungsten content) of tungsten concentrates. Despite the fact that exports were abnormally high in 1948 tungsten was in plentiful supply throughout the year.

Zinc.-In 1948 the United States imported 262,553 short tons of zinc contained in ores and concentrates approximately 85 percent of which is recoverable, and 93,337 tons of slab zinc. Most of the zinc in ores and concentrates came from Mexico, Canada, and Peru; and Canada and Mexico accounted for nearly 90 percent of the slab zinc imported.

Exports of slab zinc in 1948 totaled 65,756 tons, most of which resulted from custom smelting of foreign ores. In addition, an undetermined quantity was exported in manufactured products. It is believed that the latter shipments were relatively small in comparison with total supply.

EXHIBIT 24

Mr. D. F. CARPENTER,

HOUSE OF REPRESENTATIVES,

COMMITTEE ON PUBLIC LANDS, Washington, D. C., October 29, 1948.

Chairman, Munitions Board, Washington 25, D. C.

DEAR MR. CARPENTER: The Munitions Board's Nonconfidential Supplement to the Stock Piling Report, dated July 23, 1948, contains a number of statements which the Mines and Mining Subcommittee would like to have amplified and explained in order to obtain a better understanding of the administration of the stock-piling program. The statements in question are quoted below.

*

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I. Page 1, paragraph 3: "The 6-month period covered by this report has been one of major policy developments these changes in policy are considered of such significance as to warrant an extended recapitulation of policies and procedures under which the stock pile is operating."

The subcommittee would appreciate having all policy developments and changes in policy enumerated and explained. Reference to previous reports of the Munitions Board and section III of the current report does not reveal such information. Section III refers to "a more aggressive policy toward procurement of materials still in short supply," but otherwise the information presented appears to concern procedures and mechanics of operation.

II. Page 1, paragraph 5: "Stock-pile policy and programming must take cognizance of substantial new sources of raw materials which may be made available from overseas under the program of the Economic Cooperation Administration." In what way and to what extent has stock-pile policy and programming been changed or affected? Please cite each change and explain fully.

What "substantial new sources of raw materials" are (a) known and (b) “may be made available from overseas under the program of the Economic Cooperation Administration"? Please present a schedule showing, for each mineral and metal, the new sources, the amount expected from each source by the Munitions Board, and the probable dates of such acquisitions. In view of the Munitions Board statement quoted above, and related statements on page 4, paragraph 4, and page 8, paragraph 4, the subcommittee assumes that such information is available. III. Page 1, paragraph 3: "In view of the continued short supply of many strategic and critical materials, a number of steps are being taken, including the use of long-range contracts, in order to stimulate the production of such materials." An enumeration and explanation is desired of each of the numerous steps being taken to stimulate production, other than the use of long-range contracts.

IV. Page 3, paragraph 1: "Completion of the stock pile is now largely a matter of using prudently and energetically the administrative tools already at hand." Please enumerate and explain each of the "administrative tools" referred to. V. Page 4, paragraph 4: "Domestic procurement is handled by the Bureau of Federal Supply in conformance with instructions from the the Munitions Board. On routine purchases the Bureau acts in accordance with clearly defined policies." It is desired that a complete classification of "routine purchases" be furnished the subcommittee. Also enumerate and explain each of the "clearly defined policies" and all other policies governing or affecting such purchases.

92987-49-ser. 14-23

VI. Page 4, paragraph 5: “In instances in which export restrictions by another country threaten to hamper delivery or procurement, the Munitions Board asks the Department of State to undertake to ease the conduct of negotiation."

An enumeration of each such instance referred to, the problem, country, and type of material involved, and the final solution on conclusion to each case is desired. Also present similar information in each instance where foreign procurement has involved difficulties other than export restrictions, but not including purely physical handicaps, such as inadequate transportation facilities, depleted ore reserves, or insufficient production capacity.

VII. On page 6, paragraph 7: "The advice and assistance of industry has been actively sought by the Munitions Board through the medium of the Industry Advisory Committees."

What advice or assistance, if any, has the Munitions Board sought from industry with respect to quantitative stock-pile requirements of strategic and critical minerals and metals? Industry witnesses questioned during subcommittee hearings on manganese, chromite, copper, tungsten, and mercury had no knowledge of the amount of materials proposed to be stock piled, the assumptions and bases used, or the calculations involved in arriving at such amounts or objectives. Although some of the witnesses are members of your Industry Advisory Committees, testimony indicated that industry has given little, if any, thought to such vital matters.

VIII. Page 7, paragraph 5: "During the period of purchase policy formation, purchase proposals to the Bureau of Federal Supply were referred to the Munitions Board for approval (based upon recommendations of the Strategic Materials Committee). Now that clear-cut policy has been laid down, once the purchasing officer is fully informed of the facts of a proposal, decision is largely a procedural matter."

Please inform the subcommittee of each such policy and explain fully, except where such policies may duplicate those given and explained in answer to questions asked elsewhere in this letter.

IX. Page 8, paragraph 5: With regard to long-term contracts, it is stated that "The prospective producer is able to obtain adequate advance credit through usual commercial sources to support a commercially feasible project."

The subcommittee wishes to be informed as to the number of (a) prospective domestic ore producers, (b) prospective foreign ore producers, and (c) other prospective producers known to have been "able to obtain adequate advance credit through usual commercial sources to support a commercially feasible project." Similar information is desired with respect to active producers.

For a number of years it has been extremely difficult, if not virtually impossible, for prospective domestic ore producers to obtain advance commercial credit sufficient to support a project, regardless of assured markets and prices. In fact, active ore producers, excepting those with large or substantial operations, have experienced the same difficulty. It is encouraging to learn from the Munitions Board report that a reversal of the situation has occurred.

X. Page 8, paragraph 6: “Maintenance of the stock-pile program under policies now in force may have a generally favorable effect on the national economy.

* * *""

The subcommittee is interested in receiving a detailed explanation and analysis of the policies and "favorable effect" referred to.

Although the subcommittee fully realizes that provision for the national security is paramount, we would like to know if the Munitions Board can conceive of or anticipate any unfavorable effects on the national economy as a result of present policy to compete in the open market or contract for copper, lead, zinc, and other items in extremely short supply. To what extent has the Munitions Board made a study of the problem and what were its findings?

The Mines and Mining Subcommittee would appreciate receiving the information requested above at your earliest convenience. Should your staff have any questions concerning this request, inquiries may be directed to Mr. George H. Soule, Jr., technical consultant to the subcommittee.

Sincerely yours,

WILLIAM LEMKE, M. C., Chairman, Subcommittee on Mines and Mining.

Hon. WILLIAM LEMKE,

EXHIBIT 25

NATIONAL MILITARY ESTABLISHMENT,

MUNITIONS Board,

Washington 25, D. C., December 31, 1948.

Chairman, Subcommittee on Mines and Mining,

House of Representatives, Washington 25, D. C.

DEAR MR. LEMKE: Your letter of October 29 to the Chairman of the Munitions Board, requesting expanded comment and explanation of our July 23 stock-piling report, has been referred to me for reply. We appreciate your interest in the stock-piling program, as evidenced by your most searching questions. They have been given close study by the Munitions Board staff, and the memorandum that accompanies this letter is the result of our effort to deal with them as fully and precisely as possible.

I should like to emphasize one particular aspect of this memorandum. The months of June and July were extremely active ones in our stock-piling program. Several activities were under way which were not resolved until after the end of the term covered by the July 23 report. In the accompanying memorandum this accelerated activity has been reflected and we have not considered ourselves bound by the limitations of time that we observed in the report.

Sincerely yours,

LER. LUTES,

Lieutenant General, United States Army, Director of the Staff.

DECEMBER 29, 1948.

MEMORANDUM TO REPRESENTATIVE WILLIAM LEMKE, CHAIRMAN, SUBCOMMITTEE ON MINES AND MINING, COMMITTEE ON PUBLIC LANDS, HOUSE OF REPRESENTATIVES, WASHINGTON 25, D. C.

Subject: Questions presented in October 29, 1948, letter to the Chairman of the Munitions Board.

I. MAJOR POLICY DEVELOPMENTS DURING PERIOD COVERED BY JULY 23 REPORT

Five major policy developments occurred during the 6-month period, and two more got under way immediately after the close of the period.

First, the Congress in June endorsed the Munitions Board's belief in the desirability of long-range contracts with materials producers, for deliveries over considerable periods of time. Advance contract authority to the extent of $300,000,000 was extended to the Munitions Board in June. Plans were being developed in anticipation of this congressional action in order that the Munitions Board might be able to take fullest advantage of it.

Second, stock-pile purchase procedure was made more expeditious by reduction in the extent of interdepartmental consultations between the Munitions Board and the Bureau of Federal Supply, Treasury Department. The purpose of this action was twofold: First, as a routine matter of work simplification, to accomplish a reduction in the man-hours required in interagency correspondence and consultations; and, second, to enable the Bureau of Federal Supply to take advantage of quick-opening offers in the market-offers that are customarily open for only brief periods of time. This step had the further advantage of authorizing the Bureau of Federal Supply to undertake responsibilities more fully commensurate with its competence.

Third, with enactment April 3 of the Economic Cooperation Act of 1948, it became the declared policy of the Congress to procure materials for the stock pile as a partial return for aid extended to nations participating in the European recovery plan. Plans were initiated by the Munitions Board and the Bureau of Federal Supply, Treasury Department, in cooperation with the Economic Cooperation Administration, toward the end of the period, to make optimum use of this policy to strengthen the stock pile.

Fourth, the chairman of the Munitions Board and staff members of the Board made direct representations before groups of industrial people to urge their