INDEX NO 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 YEAR Feb. Senator MCFARLAND. The decline in production is due partly to labor costs, is it not? Mr. WORMSER. Yes, sir. Senator MITCHELL. To what extent is the decline due to increased difficulty in mining and the shortage of ores? Mr. WORMSER. There are still a lot of ores awaiting discovery and, given the proper incentive, I feel they will come out. Senator BARKLEY. How can you tell that more exist that have not been discovered? Is that just a theory, or is it based on the law of averages? Mr. WORMSER. It is faith that always keeps the miner and prospector looking for it, sir. Senator MCFARLAND. The big copper mines are blocked out for 25 or 40 years ahead. Mr. WORMSER. In copper you have large massive porphyry deposits. In lead there is nothing to correspond to that, unless the area in southeastern Missouri corresponds to it. In lead the general rule is to block out for 3 or 4 years ahead even in Missouri. Senator CARVILLE. Is that accomplished by diamond-drilling process? Mr. WORMSER. Diamond drilling, shaft sinking, tunneling, and all sorts of expedients. Senator MITCHELL. The ore which you have on hand at the present time, if new sources are not found, will last how long? Mr. WORMSER. So far as present reserves are concerned, Senator, I would say that you can only count on maybe 6, 7, or 8 years; perhaps 10 years. But that does not mean anything, because the mining companies do not put their capital in the ground to fully block out their mines. They always try to keep ahead 4 or 5 years; so that when the time is up the chances are that we will again have 4 or 5 years. Senator MITCHELL. In the same location? Mr. WORMSER. That is right, sir. Senator MILLIKIN. I would like to invite your attention to the top of page 4 of your statement. You say: We find that, without exception, they speaking of the large and small mining members of the organizationare all desirous of returning to a free market dependent upon and simultaneously with a removal of ceiling prices on all metals. Did you hear the testimony of the Tri-State representative? Senator MILLIKIN. The gist of his testimony, as I got it, was that in that particular area they will never be in position to compete in a free market. Did you interpret it the same way? Mr. WORMSER. I am sure that they are having difficulty in competing in the world market. Senator MILLIKIN. Do your members include Tri-State lead pro ducers? Mr. WORMSER. That is essentially a zine camp. Senator MILLIKIN. But they have lead down there also? Mr. WORMSER. But they have to mine 8 tons of zinc to get 1 ton of lead. That is a byproduct. So it is a very small factor in their operation. Senator MILLIKIN. You do not see any conflict, then, in the statement? Mr. WORMSER. No, sir. Senator MCFARLAND. I asked before, if the controls were removed, do you think the price of lead would shoot up? Mr. WORMSER. I believe it will go to the world market, and above the world market today, because of the terrific demand in the United States from all sorts of large and important industries, like the storagebattery industry, the paint industry, the gasoline industry, and so on. Lead is such an indispensable metal in our economy. As a matter of fact, I brought here for the interest of the committee a chart which will show at a glance the many varieties of uses to which lead is put, together with the districts of of the West and in the East where lead is mined. The CHAIRMAN. I think we ought to make it a part of the record. (The chart referred to faces this page.) Mr. WORMSER. It also shows all the counties in the United States where lead is mined. Senator MILLIKIN. Does it show Lake County, Colo.? Mr. WORMSER. It shows Lake, San Juan, Dolores, San Miguel, and Eagle Counties. Senator MILLIKIN. They are the largest lead-producing counties? Mr. WORMSER. Yes, sir. The CHAIRMAN. Is New York shown on this chart also? Mr. WORMSER. Yes, sir; St. Lawrence County. Senator MCFARLAND. I take it that it is just a question as to whether or not we want to absorb all of this increase in price or whether we want to absorb part of it by premiums. Mr. WORMSER. Correct, sir. Senator MCFARLAND. And, as I understand it, you endorse the amendment? Mr. WORMSER. We are very strongly in favor of the McFarland amendment, because we feel that it is an admirable transition stage of a free economy for lead. Senator MCFARLAND. If the ceilings were removed is there a possibility that at least for a short time the price might shoot to a higher level? Mr. WORMSER. I should not be surprised to see it do so; but that will have one beneficial effect, in that it will screen consumption. Today, at the low price of 61/2 cents, everybody that possibly can use lead has a tendency to use it; and there are some users of lead who could substitute other materials and help to ease the shortage. I therefore feel that if the price should go up extraordinarily it will help to correct this greatly unbalanced lead situation. Senator MCFARLAND. There is a world-wide shortage, is there not? Mr. WORMSER. The shortage is world wide. Senator TOBEY. What proportion of the lead output is controlled by the National Lead Co.? Mr. WORMSER. The National Lead Co. does not control any mining or smelting of primary lead except to a minor extent. Senator TOBEY. What is the nature of its operations? Mr. WORMSER. It is essentially a manufacturing company. It buys direct from the miners and smelters just as everybody else has to. WARTIME CONTROLS During the war the supreme objective was the production of war matérial requiring the shrinkage of the civilian economy to essentials, in order that the war might be prosecuted to a speedy conclusion with maximum intensity. Therefore, to some extent, wages and more especially prices including some rents were rigidly controlled, materials were allocated to war and essential civilian production, and scarce consumer goods were rationed. Two chief types of subsidies were paid: (1) To induce, for example, the opening of submarginal mines (production subsidies) and (2) to keep the cost of living index from rising (price depressant subsidies) as rapidly as it otherwise would rise. Inventories of goods accumulated before Pearl Harbor in the hands of consumers, distributors, and manufacturers helped to tide us over during the war. Victory gardens, thrift, patriotism-inspired cooperation, deferring maintenance, and other factors, helped to make the wartime controls reasonably effective. The wartime upward price pressures which nevertheless prevailed, were due primarily to two factors: (1) Although a large fraction of production was not available for civilian use, labor and other producers nevertheless were paid "purchasing power" for this production; (2) to make possible the payment of Government purchases, the Government through its financial operations greatly, and perhaps needlessly, increased the money in circulation including demand deposits in banks-the equivalent of money. To the extent to which tax rates were increased, a part of this greatly augmented money income was recaptured by the Government, before it was spent. Wartime Government bond purchases also diverted a part of the increased incomes away from consumer markets. Nevertheless, strong upward price price pressures continued throughout the war. POST VJ-DAY CONTROLS At war's end wage control and rationing were largely eliminated. Materials' controls were relaxed. Price control, including some rent control was continued. During the war the people and the Government, in a fundamental sense, knew what was wanted; the controls were designed to gain those ends. Now that the war is over and a free stable society with high-level employment is our supreme objective, it is the ultimate consumer, the private individual, who should determine what is to be produced by the free expression of his demands in the market place. But so long as prices are artificially depressed while wages are relatively free to rise and other controls are relaxed, there is little possibility of prices in relation to new costs, guiding production along the lines desired by the consumer. Price loses its function; when this is the case Government directives must be substituted. Government bond purchases have been reduced and bond redemptions have increased, placing into the hands of the public additional quantities of current purchasing power. The demobilization of veterans provides mustering-out pay, readjustment allowances, and many GI loans are being made-all tending to provide current spendable funds for which little current product is produced by the recipients of these funds. Now that the wartime dangers appear to be history, the patriotic appeals of self-discipline are less effective. Strikes paralyzing individual companies, whole industries and communities have multiplied. According to the almost universal testimony, industrial efficiency has declined. Labor turn-oyer is high. Whatever technological improvements in production were developed during the war have not yet been incorporated, for the most part, into the productive process and will take years to assimilate. Tax rates on business and on individuals have been reduced. Some 12,000,000 lower-income earners have been wholly excused from paying income taxes, thus keeping in their hands more spendable funds. Wage increases for salaried and other workers have been general since VJ-day so that probably there are few workers who have not received, or will not shortly receive, an increase varying from 10 to 18 percent. All this pays additional funds into the hands of the workers so long as they are working. Several million persons have retired from the labor force-but they continue to consume. Frictional unemployment, perhaps, is normal while many jobs remain unfilled. |