rich deposit. I am talking about the Hercules mine in Burke Canyon in the State of Idaho. It was a bonanza. The smelting company simply notified the owners they did not want it, not to ship it, and presumably they proposed to take over the mines. This ore of the mines was so rich that they could ship it in the crude form to Swansee, England, and to Belgium crude and get money to put in a mill and equip the property, which they did and opened one of the biggest bonanzas in the State of Idaho which produced $88,000,000 and paid $18,000,000 in dividends and built the beautiful skyscrapers you find in Spokane. They had an engineer, who put in a beautiful charity settlement and this mine made millionaires of the eight men who owned the mine. Had the smelter company had its way those men would still be playing around in the mud of the milk yard and running the locomotive. That was a little instance in Idaho history that I would like to have in the record. Mr. ENGLE. Thank you very much, Mr. White. Are there any further questions by the committee? Mr. MARSHALL. I would like to make one observation, Mr. Chairman. Mr. ENGLE. Mr. Marshall. Mr. MARSHALL. In listening to the testimony this morning it appears to me that if this lead industry is the monpoly that it appears to be, anything we do along the line of incentive payments is pouring the taxpayers' money down the rat hole because it would seem to me that these various companies might very well just simply sit back here and play us for whatever they pleased under the basis of the way it is set up. That is merely an observation I wanted to make in passing. Mr. ENGLE. Mr. Marshall, the shoe is on the other foot. The lead industry opposes this legislation. Mr. WHITE. Mr. Chairman, I would like to ask one question about the supply. It is a matter of fact that lead is in critical supply, is it not? Mr. ZIEGFELD. At the present time it is in pretty good supply, sir. It was in critical supply up until about 6 weeks or 2 months ago. Mr. WHITE. Lead is one of the most vital needs of industry in transportation. There is not an undersea boat that is navigated that does not have to depend on lead batteries and lead barrels. There is not an airplane that flies in the sky that does not have to depend on lead batteries. There is not an automobile on these roads or a truck or a bus that does not have to depend on lead batteries and lead bearings. It was told to us back in the days of the "tin Lizzie" that every Ford contained 60 pounds of lead in batteries and bearings. Is that somewhere near a correct statement? Mr. ZIEGFELD. There would be around 20 pounds in the battery at any rate. Mr. WHITE. So lead is critical. As a matter of fact, the bulk of the lead produced in the world is produced in the Western Hemisphere, is it not. Mr. ZIEGFELD. Yes, sir. Mr. WHITE. And the copper and metals of that kind are very largely produced in the east, Africa and places of that sort. Mr. ZIEGFELD. Yes, sir. Mr. WHITE. If we do not develop lead in the Western Hemisphere, particularly in the United States, we are liable to run into a very serious and critical situation. Is that not a fact? Mr. ZIEGFELD. Yes, sir. Mr. ENGLE. Thank you very much. Thank you for coming before the committee. Mr. ZIEGFELD. Thank you for the opportunity, Mr. Engle. Mr. ENGLE. The next witness will be Mr. Allen Hearst, secretary of the Northern Mining Association. Mr. Hearst, will you state your full name and the capacity in which you appear and the people whom you represent? STATEMENT OF ALLEN HEARST, SECRETARY, NORTHERN MINING ASSOCIATION Mr. HEARST. My name is Allen L. Hearst. I am secretary of the Northern Mining Association, and in general policy represent that group. That group covers the northern part of the United States, including the talc mines of northern New York, the copper mines and talc mines and the granite quarries of New Hampshire and Vermont and mines in Maine and in Connecticut. I also am president of the Connecticut Mining & Mill Co. which is operating or attempting to bring into production a small copper property located at Bristol, Conn. Basically the association endorses in principle the use of incentive payments to bring critical and strategic minerals into the stock pile. We also recognize the fact that the mere waving of a wand of dollars does not automatically bring either metals or minerals into the stock pile. It requires development and exploration. The New England area has been bypassed for some years as a producer of minerals and metals and our exploration problems up there are considerable. We have, among the deposits in New England, that could probably-or petrhaps I should say possibly become of economic importance, manganese deposits, copper deposits, lead deposits, and zinc deposits. The Northern Mining Association feels that in principle the outline of the amendments of the bill 976 would help many of the smaller operators to explore their properties with subsequent production that would be of value in the stock-pile program. I believe that is the basis of our feeling, Congressman Engle, on that. I am open for questions on it. Mr. ENGLE. May we then conclude you are in support of this legislation? Mr. HEARST. Yes. Mr. ENGLE. Are there any questions by the committee? Mr. Murdock? Mr. MURDOCK. I believe not, Mr. Chairman. Mr. ENGLE. Mr. Lemke? Mr. LEMKE. May I suggest, have you read the bill I have introduced, H. R. 2031, in connection with the Engle bill? Mr. HEARST. I have personally read that, Mr. Lemke. We did not get copies of that bill quite soon enough to circularize our association. Mr. LEMKE. You will not be in a position to suggest or point out anything? There may be some provisions of that bill that would make it better to incorporate the Engle bill into H. R. 2031. Mr. HEARST. I am not in a position to comment on your bill because we did not receive copies in time to study it and for me to receive the thoughts of the other members of the association. I would not want to say something that might be my personal opinion at this time. Mr. LEMKE. In other words, you are a good cooperator and you cooperate first and then deliver the opinion of the results of your reasoning and conclusions with your associates? Mr. HEARST. I try to do that; yes. Mr. LEMKE. Would you have time to do that within the next week or so? Mr. HEARST. It might be possible although I did not think this committee was going to sit for a week. Mr. LEMKE. The committee may not be holding hearings but you could submit it to the clerk of the committee. May we ask that he submit his conclusions? Mr. ENGLE. We would be glad to. Mr. HEARST. We will submit a written statement. (The information referred to is as follows:) NORTHEASTERN MINING ASSOCIATION, Mr. CLAIR ENGLE, Chairman, Subcommittee on Mines and Mining, Washington, D. C. DEAR MR. ENGLE: In response to the request that your committee made on February 18 that the Northeastern Mining Association submit a written statement on the Lemke bill, H. R. 2031, we offer the following: It is the feeling of the association that H. R. 2031 is so detailed, and in some instances the language of the bill seems ambiguous, that its administration would be difficult and lead to considerable disagreement between the industry and the Government. Sections 8 and 17 are quite acceptable in principle. In other words, the association feels that incentive payments should allow for a reasonable margin of profit. Thanking you for the privilege of submitting this statement, we remain, NORTHEASTERN MINING ASSOCIATION, Mr. LEMKE. We are interested in getting the best possible bill we can get. I know Mr. Engle's is a good bill to start with, and we may not be able to improve it. Mr. HEARST. I will say definitely the people in the Northeastern Mining Association want the best workable bill. We face many of the problems that the western operators do. I am going to speak for myself personally and not for the association in what I am going to say at the present time. The smelting question that came up with reference to the lead industry is in my case copper, twice as bad. There are two copper smelters available within about a hundred miles from my operation. The Laurel Hill smelter of the Phelps-Dodge Corp. and the one at Carteret of the American Metals Corp. My operation is at Bristol, Conn., about 20 miles west of Hartford. It is an old copper mine. Twenty years ago today it was the oldest copper mine in the United States. It has had a total record of about 800 pounds total. In attempting to get smelting facilities for that extraordinary ore that came from original development work, the smelters were not interested here. In the West, I am sure Congressman Murdock recalls this, if you got out a carload of ore you could at least ship it down to Douglas and get a few pennies on it. We cannot do that in this part of the country. The small-mine operator depends largely, at least for the beginning of his operations, on shipments of ore. In fact, sometimes in some deposits that is a practical way of sampling your deposit, to ship ore. We do not have the smelter facilities available to the small operator. I will withdraw that statement. The small operator is unable to make suitable arrangements for the sale of small lots of copper ores in this area. I might point out also that I believe that the closest lead smelter at the present time to the New England area is either at East St. Louis or at Herculaneum, the American Metals Co., during the war, having taken out their lead pots that were at the Carteret smelting. Those are some problems we have. I might point out that in Mr. Carpenter's testimony he said transportation from abroad might be interrupted during the war. I think we could reasonably expect the transportation within the United States might be interrupted during the next war and if our eastern ore deposits had had the reasonable support of Government, we might be able to not face a complete economic collapse of our industrial machinery. Mr. ENGLE. Mr. Hearst, do you have any comment to make on the availability of risk capital for an operator who is trying to get started? Mr. HEARST. I had a very good example in my own personal case. I had a firm offer from a group to supply upwards of $500,000 for the development of my property, if, as of last October, I could get a firm price commitment from the Munitions Board or the Bureau of Federal Supply at 22 cents a pound for copper. That was for a 5-year period when the price of copper was 2312 cents. I was given a respectful audience at the Bureau of Federal Supply and I was given sympathy, but beyond that there was no other help available. Mr. ENGLE. In other words, if you had had a stable market in which you could tie down a price for any reasonable length of time, you could have obtained the risk capital necessary to go in there and develop your mine to determine whether or not you really had a working ore body? Mr. HEARST. That is right. The first amount of risk capital involved was roughly $100,000 and the other money would have been available if we had proven an ore body we think might have been there. Mr. ENGLE. Does that not sustain the contention that has been made from time and again that what the mining industry needs first is a stable market? Mr. HEARST. Very definitely that is quite essential. May I point out risk capital that is available in sums for mining ventures is not interested in mining ventures because they do not know where the Government is going, so they say. Mr. ENGEL. We are going to try to outline that course a little more definitely anyway. Are there any more questions? Mr. MURDOCK. Mr. Chairman, may I make an observation right there? Speaking now for many small mine operators out in my sec tion of the country, I think one of the greatest needs is risk capital, which is not available now under the old terms, but, Mr. Chairman, the gentleman has expressed the situation for us out in the Southwest, too, as well as the Northeast, and that is this: Small mine operators do not have mill and smelter facilities. That is one of the pleas that I have heard, "Give us custom mills and smelters." That is one species of encouragement that I think a small mine operator out my way would like to have. Mr. HEARST. I wonder if the Congressman is familiar with what Chile has done in a limited way in that respect? Mr. MURDOCK. No; I am not. Mr. HEARST. Chile has a traveling ore buyer, very similar to your county agents, that is in the way he covers his area and they have assembly stations at which they assemble not carload shipments, but what we would call a truck-load shipment, and the small prospector or mine operator is paid for it. Then these assembly points are close to railroad transportation. At such time as there is an adequate amount gathered there they are shipped into smelters at Government expense but the mine operator-when I say at Government expense, I do not mean that, but the operator has been paid a reasonable return for his ton of ore, or for his 5 tons of ore at the time that he needed it to buy a few beans and a little bacon and some powder and equipment to keep on working. Mr. WHITE. Mr. Chairman, I have one or two questions. Mr. ENGLE. Mr. White. Mr. WHITE. The Bureau of Mines embarked upon an inventory program of inventorying the metal resources of the country and did some exploration. Did they come into your section of the country? Mr. HEARST. There was some work done, particularly this past year, by the eastern division, I believe they call it, of the United States Bureau of Mines, and they did some work in Maine and New Hampshire and Vermont. I believe that they have belatedly seen perhaps that there might be some minerals that could be economically recovered in the northern part of the United States. Mr. WHITE. That was done by the diamond drill exploration? Mr. HEARST. Principally that; yes. Mr. WHITE. Did they have any beneficial results? Mr. HEARST. From hearsay I understand that they developed two reasonable ore bodies. That is not from direct knowledge on my part. Mr. WHITE. Thank you, Mr. Chairman. Mr. D'EWART. I would like to ask two questions, Mr. Chairman. Mr. ENGLE. Mr. D'Ewart. Mr. D'EWART. There is more in this bill than I dreamed of a year ago. I would like to ask the chairman two questions. How this bill will implement the construction of more smelters, and second, where it will firm the consumer market.? Mr. ENGLE. The bill which I have introduced does not directly provide for the smelting problem. The bill which Mr. Lemke has introduced has a provision which says specifically that the ore can be taken by the Government and premium payments will not be suspended because of refusal or failure of a smelter to treat and process the ore. That is on page 32 at line 21 in H. R. 2031. Mr. D'EWART. That has nothing, however, to do with providing more smelters or making smelters available to small industry. |