On the matter of purchasing from domestic producers at current prices, as a matter of fact the Munitions Board has broader powers than are given in this bill to the Bureau of Mines.

Mr. BOYD. Correct.

Mr. ENGLE. I think Dr. Boyd will agree that under this bill Government assistance is limited to what are called the conservation payments and exploration payments.

I think the gentleman was with us when we went down to see the President, and the gentleman may recall that he suggested that the way to help the small miner and the domestic mining industry was for the Munitions Board to make these purchases at current prices. I made the observation at that time that there was no use giving a contract to the domestic producer at a current price at which he could not produce.

I further made the observation with reference to exploration that there is no use exploring for something you cannot sell after you find it.

This bill has the same limitations with reference to exploration. Maybe there is some sense in exploring for minerals and metals which you cannot sell after you find them, and maybe it is worth while to give these fellows payments to hold or to conserve or to maintain their mines while they progressively go broke, but quite obviously it is not a permanent answer to the problem at all.

Gentlemen, is there anyone else here who wants to be heard on this measure? If not, we will close the testimony.

I see that Mr. Adkerson wants to testify. Will you please make it brief, because we are trying to get down to brass tacks.

STATEMENT OF J. CARSON ADKERSON, MINING ENGINEER

Mr. ADKERSON. I appear representing myself as a mining engineer and the American Manganese Producers Association, and I am also speaking for the Domestic Manganese & Development Co., of Butte, Mont. Mr. John Cole, the president, is in the city and has authorized me to speak for him.

I want to say at the start that this bill is not the answer to the development of manganese. It is a step, a small step, and a doubtful

one.

The only part of the bill at the moment which I have reference to is that part which gives reference to the small base metal mines, which allows loans or advances to be made for the exploration of copper, lead,.

and zinc.

I want to suggest and ask that the committee include manganese at the two points where they name copper, lead, and zinc.

The reason for doing that is that testimony that has been presented before this committee during 1948 and 1949 has made it evident, from the Government officials and all other testimony, that manganese is the only item in the bill for which there is no substitute. It is one strategic mineral on which we have been in the past largely dependent on Russia.

Testimony was also given to this committee by Mr. Pehrson of the Bureau of Mines that in case our own mines were not developed and we did not have an adequate stock pile, in case of war, that the war would be over, or to that effect.

Manganese is well known to be more important and more strategic than any other one of these strategic minerals.

As you recall, when the strategic mineral bill in 1947 was passed by the House the word "manganese" was added on the floor of the House. The bill was vetoed by the President, but it read "copper, lead, zinc, and manganese."

At the point where you mention copper, lead, and zinc I ask the committee to include the word "manganese."

Mr. WHITE. How do you account for the fact that when the First World War was on the Government went into production of manganese in the State of Washington, and some deposits in the State of Montana, and got considerable production. When the war was over the whole thing was abandoned. How do you account for that?

Mr. ADKERSON. It is just one of those things. We have been through two world wars and have spent millions of dollars in penalties and lost hundreds of lives and lost boats which were sunk because of the lack of preparedness. This should have been provided for between the periods of war during the times of peace.

Mr. WHITE. Do you not think that the manganese industry, on account of its importance in steel alloys and things like that, should be encouraged and supported during times of peace so that we would have it in times of war?

Mr. ADKERSON. By all means.

Mr. WHITE. We have an abundant source of manganese in the State of Washington and the State of Montana and other parts of the country.

Mr. ADKERSON. That is true.

Mr. WHITE. I am more familiar with Montana and Washington, because I live somewhere near those States.

We have spent a great many millions of dollars developing those deposits, and yet we abandoned them the minute the war was over. Mr. ADKERSON. That is correct. Anything that is done in the way of development of strategic minerals during peacetime is good.

Mr. WHITE. If the supplies were cut off with submarines we would have been helpless.

Mr. ADKERSON. I understand from the Navy that it is understood in case of a war with Russia there is no assurance, on account of the Russian submarines today, that we would have sea lanes open to the distant countries now supplying manganese. They would be closed. There is no assurance that our sea lanes would be open for a period of 2 years. Without manganese our steel mills would close. There is no item in the bill more important than manganese.

Mr. WHITE. We do know in the last war that we were very dependent on China for the supply of tungsten for steel alloys.

Mr. ADKERSON. That is true.

Mr. WHITE. Due to the fact that the Japanese cut off the supply we were very short of tungsten. If it had not been for the fact that the Bureau of Mines found some in the State of Idaho we might have been seriously embarrassed.

Mr. ADKERSON. I understand that.

Mr. ENGLE. Thank you very much, Mr. Adkerson. We appreciate your statement.

Mr. CRAWFORD. Mr. Chairman, may I ask a question?
Mr. ENGLE. Yes.

2

Mr. CRAWFORD. What information can you two gentlemen give us specifically as to why those operations were shut down, to which Mr. White refers? Can you give us information with respect to the quality of the manganese or with respect to the cost of extraction, as related to other ores and other costs?

Mr. White has made a statement here that interested me very much, namely, to the effect that United States Steel had a great influence on that operation in the West which was financed during the last war, and that the United States Steel owns manganese mines in other countries.

Mr. WHITE. Brazil, in particular.

Mr. CRAWFORD. If that is true this committee ought to have information from some source as to why the operations in the West were closed.

Do either of you gentlemen know where we can get anything on that?

Let me illustrate it this way: In another basic item which is powerfully essential in this country, and used in every household, to the extent of some 7,000,000 tons a year, certain interests on the seacoast own large plantations in foreign countries. They also muscled in and acquired substantial control of inland operations.

In years past they used their influence to substantially muzzle the production inside the United States, and at the very time they did obtain substantial reductions in the tariff on that commodity so that the material could come in from their foreign-owned operation.

It may be that you have a parallel case here. The argument in that instance was made to the effect that it costs so much more to produce the commodity in this country than it did in other countries that we could not afford to produce it. That is the inland operation. Therefore, the duties were reduced and the goods were brought in from the low-cost areas.

I raise this question because it is a fact, and I defy anyone to controvert this statement I am going to make, that the policy of this administration now is to export capital from this country and develop the natural resources in other lands and bring those resources here and put them in our markets. It is done under the name of aiding world trade.

The difficulty of it is that it destroys some particular unit or some particular industry here. It is your industry, for instance, in this. case. It destroys industry while aiding world trade.

Now, if we are all going to become internationalists and mow you down as an individual industry in the name of the great over-all institutional benefits, that is one thing. That question is before this: committee this very moment, whether we know it or not, as to what extent we are to become internationalists.

Almost everything that is said by any top-level man in the administration is to the effect that we are right on the brink of war.

You argue here in your presentation that we should have these stock piles. We have reached these agreements with England with respect to tin and rubber, on the idea that we should muzzle down the production of raw rubber in this country and subject the consumers of rubber in this country to the cartels and trusts and combines of the French, and British and Dutch in the Far East, and bring rubber

from there and stock-pile it, reducing the tariffs to bring in manganese and these other things from other countries to here, and stock-pile them.

If either of you gentlemen have anything specifically to say as to why those operations were closed, provided you are not afraid to say what you know inside the industry, I would like to have the infor

mation.

Mrs. BOSONE. Mr. Chairman, will the gentleman yield?
Mr. CRAWFORD. I am through.

Mrs. BoSONE. In the case of copper last year the tremendous tonnage of copper that was shipped into the United States for the stock pile was shipped from Chile. For instance, the Kennecott Copper Co. was on strike out in Utah, Utah Copper, for 6 months, and every ounce of copper that Kennecott contributed to the stock pile last year was sent in from Chile.

I do not think this question has anything to do with our national policy. I think it is a matter of industry's interest.

Mr. WHITE. Let me remind the lady that all this copper she is talking about was bought with the taxpayers' money by the Munitions Board, and when we asked a question of what percentage of it was domestic and what percentage of it was foreign copper they said that the reason they could not tell us was that they they were hiding behind the cloak of national security.

They are wrecking our mining industry. That is the Munitions Board.

Mr. CRAWFORD. I think it is also true that the duty or the tariff was reduced or eliminated, so that it could come in. We passed a bill some 18 or 20 months ago removing the duty on copper so that it could come in.

Mrs. BOSONE. The answer I got on the Kennecott Copper Co. in particular was that there was a strike in the West and at that time the copper came in from Chile.

Mr. CRAWFORD. Since that movement began the price of copper in the United States has been substantially reduced, has it not? Mr. BENNETT. Yes.

Mr. CRAWFORD. How much has it dropped?

Mr. BENNETT. It has dropped from approximately 22 or 23 cents a pound down to 16. I think it is now 175 cents per pound.

Mr. WHITE. I will say to the gentleman from Michigan that we are sitting here trying to get a shot in the arm for a crippled mining industry and yet we have an allocation of development funds for opening up lead mines in French Morocco, which is largely being handled by the Newmont Co. and St. Joseph Lead. It is $5,000,000 in one place and $3,500,000 in another. The St. Joseph Lead cannot operate on its own. They must go in as a minor stockholder in a French organization.

That is going on, and it broke our lead price from 2112 cents a pound to 152 cents, and now it is down to 1412 cents. God knows where it is going to go.

Mr. ENGLE. Thank you very much, Mr. Adkerson, for your appear

ance.

Mr. ADKERSON. I would like to answer his question there as to the reasons why there is no development.

Mr. ENGLE. Will you yield to the gentleman from North Dakota? Mr. ADKERSON. Yes.

Mr. LEMKE. Mr. Chairman, I wish to make this observation: We now have an International Chamber of Commerce to loot the American people both coming and going.

Mr. WHITE. The greatest victim in the whole set-up is the mining industry. We have been sold down the river.

.

Mr. ENGLE. Mr. Adkerson?

Mr. ADKERSON. I would like to answer Congressman Crawford's question on the matter of small development in the United States.

As far back as 1927 I have publicly and constantly called the attention of the country to the fact that Soviet Russia was making us dependent on supplies of manganese from Russia and would sooner or later lead us to a point of dependency on Russia and then saw us off. In 1930 just after the tariff act was passed we started a full development program on manganese in the United States. At that time Soviet Russia, so determined and knowing how strategic manganese is-mark you, without manganese you cannot manufacture steel-so Russia, knowing how strategic manganese is in the United States, went to each of our customers and deliberately told them that Soviet Russia would undersell manganese, and would undersell any domestic manganese producer, regardless of the price. They would close the mines in the United States.

We started an antidumping program. It took several years trying to stop it. In the meantime the war clouds began to roll.

We went through that same experience during World War II. A number of the mines got started, but before they were able to build plants and get the mines completed, the end of the war came. Several of those that were able to get plants and able to get into development, in some cases, are still continuing, notably in Montana.

Such temporary small development does not help the small producer. Now, Russia well knows our strategic position in manganese today, she well knows that we cannot manufacture steel without manganese. She understands just as clearly as Mr. Pehrson did when he testified before this committee in 1948 and said that if our sea lanes were cut off and our stock piles were used up and our manganese industry were not developed, she knows just as well as any of us, that it would be a very serious situation.

It is the steel situation which emphasizes the seriousness of it today. If you cut off the supply of manganese now to the United States, just as Russia has done there is a reason behind every move that Russia makes, and I want to leave with you that thought-I recommend that manganese be included in anything that will help copper, lead, and zinc, because manganese is the only one of the minerals for which there is no substitute.

Mr. ENGLE. Thank you very much form your statement, Mr. Adkerson. We are very grateful to you. We have some gentlemen here, I believe, from the General Services Administration to be heard.

We have a letter from the Acting Administrator of the General Services Administration, under date of October 7, 1949, which report will be made a part of the record at this point.