tion, I believe, as of last month. They are going for the full 52 weeks. In fact, we have just had an announcement by the administration that they are going to close down some defense installations up there that means another 13,000 are going to lose their jobs within the next 12 months. So we will more than likely go up as high as 8 or 9 percent unemployment in Massachusetts. A lot of this was caused as a result. of imports of footwear, textiles, and electronics. It really did quite a job on our State. I think our State was hit as hard as any one throughout the Nation. This concerns me because our welfare bill in Massachusetts has gone up to $1 billion, is going up to $1 billion this year. If we don't get any help from the Federal Government, who are creating these policies, bringing about this high unemployment, I don't see how we can really call this adjustment assistance when you are going to cut it down to 26 weeks. Secretary BRENNAN. Mr. Burke, as Secretary Butz told you this morning, there are a lot of things that we didn't get in the bill that I would have liked. You happen to be touching on one. Mr. BURKE. I know that; Secretary Butz is a very influential man in the Cabinet. He was able to defeat us on the hide bill in the House. This is what I admire about the administration. They are always able to speak out of two sides. Secretary Butz had all the cattle barons with him. Secretary BUTZ. Let me correct that. I didn't have a vote in the House. That was your colleagues. Mr. BURKE. But you made a lot of speeches around the country. I read some of them. They really had those fat cat cattle barons well organized around the country. We just didn't have enough troops in there, that is true. But I could never understand the statement you gentlemen made here today that you are going to do what you believe is in the best interest of the Nation, when you could have this attitude as far as hides were concerned when the President and the Secretary of Commerce were trying to place this embargo on hides and you were on the other side. I think Representative Gibbons asked who he would appeal to. I was going to tell him he better appeal to you because you were very successful in that case. Secretary BUTZ. Well, I had the help of the majority of your colleagues, I may say. Mr. BURKE. I know why you had the help of the majority of my colleagues. We haven't just got enough votes in the area to overcome the rural votes and also the votes of those who were misled. I think that concludes my 5 minutes of questioning. I have a question here for Secretary Dent from Congressman Rostenkowski, who cannot be here today. However, he had previously sent to you some questions which he hoped you would respond to in the record, if you have not yet completed your answers. Secretary DENT. We have completed the answers and have delivered them to him. We will be glad to have him put them in the record, or we will do it. Mr. BURKE. Without objection, the record will be held open at this point and they will appear in the record. [The material referred to follows:] THE SECRETARY OF COMMERCE, Hon. DAN ROSTENKOWSKI, DEAR MR. ROSTENKOWSKI: This is in response to your letter of May 9. 1973, requesting information to a number of questions about the present situation with regard to domestic availability and exports of ferrous scrap. As you can appreciate, given the limited time available, we have not been able to put together additional information for you, but we would be happy to do so, especially if you have further questions. 1. What has been the peak sales in any one year of ferrous scrap metal both for domestic use and sent into export? The peak sales for domestic consumption were 36.9 million short tons in 1969, and peak export sales of 10.4 million tons occurred in 1970. Table 1 enclosed gives more detail on both export sales and domestic consumption for 1960–1972. 2. What do you expect as a total for this year? According to the best information which we have been able to garner, including information received from our Embassies in major scrap importing countries, we presently expect scrap exports this year to reach a total of approximately 11 million tons. 3. Taking the most conservative figures we have an estimate of 53 million tons for 1973 or 7 million tons more than has ever been processed and sold in one year. Can the scrap dealers provide an additional 7 million tons of a usable quality of scrap metal? This is a difficult question to answer with precision, but surveys of the scrap industry and our own analysis both indicate that scrap processors can both obtain sufficient material to meet this high demand, and have capacity in their processing plants to prepare it for domestic consumption and the export market. 4. What will be the inflationary impact of this heavy demand? As you know, prices for ferrous scrap have increased over he last several months, although there was a decline in the period mid-February to mid-April. Based on the expected cooling-off of economic growth in the latter half of this year, and indications that the majority of scrap for export has already been shipped or prepared, we believe at this time, that the bulk of inflationary pressure may be behind us. However, I am deeply concerned about the extent to which increases in prices could lead to inflationary pressures within the steel and foundry industries and across the economy. Accordingly, the Department of Commerce is taking steps to obtain better information on export orders and shipments, and the Cost of Living Council is conducting a fact-finding survey of the scrap industry, gathering cost justification data bearing on recent price increases. Copies of the press releases referring to both of these actions are also enclosed. 5. What will happen if scrap dealers cannot provide the additional tonnage? If scrap dealers could not provide the additional tonnage required, and if mills did not have sufficient inventory to carry over the period of scarcity, then some of them would undoubtedly have to limit operations. As indicated above, we think that this possibility is extremely unlikely. 6. Rather than gamble, why do you not place an immediate embargo on exports of scrap metal, and lift the embargo later in the year if the demand for scrap metal eases? We view the establishment of an embargo on the export of scrap metal as a measure to be taken only in extreme circumstances and, based on present information and analysis, are confident that the scrap industry will be able to meet both domestic requirements and export demand without causing domestic shortages or additional price pressures. However, should conditions change, you can be assured that we will take whatever action is necessary to insure that domestic producers have an adequate supply of this material and that serious inflationary pressures are not allowed to develop. I hope this information will be of help to you, and would be happy to discuss the situation with you further. Sincerely, GARY M. COOK, Acting Deputy Assistant Secretary for Competitive Assessment and Business Policy. Enclosures. TABLE 1.-SUPPLY OF IRON AND STEEL SCRAP AVAILABLE FOR U.S. CONSUMPTION AND EXPORT Source: Bureau of Mines, U.S. Department of Interior-supply. Bureau of Census, U.S. Department of Commerceexports. [From the U.S. Department of Commerce News, Washington, D.C.] SECRETARY DENT, "EXTREMELY CONCERNED" ABOUT RISING FERROUS SCRAP PRICES, SEEKS BETTER EXPORT INFORMATION Secretary of Commerce Frederick B. Dent today announced a reporting procedure is being established under which information on export shipments of ferrous scrap and pertinent data on export orders will be made promptly available to the Department. Export orders for less than 500 short tons and shipments against such orders, will be exempt from these reporting requirements. He indicated that assurances have been received from major scrap exporters that the exporting community can comply with this approach to reporting without undue burden. The Secretary said he is "extremely concerned" about recent price increases in this material and the potential inflationary effects which such increases may have on the steel and ferrous foundry industries and the economy as a whole. He reaffirmed his concern and the need for obtaining better and more up-todate information on ferrous scrap in letters to several prominent leaders in the steel and ferrous foundry industries. In these letters he stated: "I am writing you about the problem which the United States iron and steel industry faces in rising prices for one of the industry's basic inputs-ferrous scrap. I am extremely concerned about the recent price increases in this material and the potential inflationary effects which such increases may have on your industry, and on the economy as a whole. "Our analysis indicates that, although export shipments (which now account for approximately 20 percent of total sales of scrap) are an important factor in determining domestic prices, we do not have up-to-date information which allows us to quickly analyze fluctuations in export shipments as they occur, nor are we able to forecast future shipments resulting from long-term contracts. Accordingly, a reporting procedure is being established under which the ferrous scrap industry will begin reporting pending and subsequent export orders by tonnage, destination, and date of shipment, as well as information on export shipments as they occur, except for orders of less than 500 tons, and shipments against such orders. "While this step will not decrease the price of ferrous scrap, it will provide us with the data we need to better understand and deal with this situation, which is of great concern to all of us." [From the Cost of Living Council News, Washington, D.C.] SCRAP METAL SURVEY The Cost of Living Council today announced that it will conduct a fact-finding survey of the nation's largest producers and brokers of scrap iron and steel. The survey, to be conducted by the Internal Revenue Service, emanated from joint Commerce Department and Cost of Living Council discussions on the rising price of scrap iron and steel. Council Director John T. Dunlop, commenting on the study, said: "Scrap iron and steel is an important basic component in the production of raw steel and iron. Naturally, the Council is concerned by the recent rise in scrap prices and the eventual impact that this could have on iron and steel prices. The Internal Revenue Service will contact the major firms engaged in scrap processing and distribution in order to gather cost justification data bearing on recent price increases. Cost of Living Council staff members will also participate in the survey in order to gather information on recent developments in the steel scrap industry. The Council plans to study the economic implications of current and prospective steel scrap supplies, demand conditions, the industry's overall capacity, and the influence of exports on the price of scrap. Dr. Dunlop stressed that the survey should not be considered punitive nor necessarily the first step toward Council action on scrap steel prices. However, the information from this study could facilitate any action which might be necessary in order to alleviate price pressure in this industry. It is expected that the survey will be completed in June. Mr. BURKE. Mr. Vanik. Mr. VANIK. Thank you, Mr. Chairman. Secretary Butz, I was wondering whether you might tell me the extent to which the CCC is funding export sales. Secretary BUTZ. Well, at the present time very little. It is the first time in 25 years that we don't own any corn, any wheat, any grain sorghum, any cotton. We own some butter but we are not exporting it. Mr. VANIK. I was wondering if you would tell me in a dollar amount what that represents. Secretary BUTZ. Yes. Secretary Brunthaver is President of the CCC. May he respond? Mr. VANIK. Surely. Mr. BRUNTHAVER. To what extent are we subsidizing the exports? Mr. VANIK. To what extent are you participating in dollars in the export programs that have been recently developed through the CCC? The question is addressed to the CCC. Mr. BRUNTHAVER. We do not currently have any export subsidy programs by the Commodity Credit Corporation or the Department of Agriculture. These have all been discontinued. We do have a GSM-4 credit program that is used to selected countries in which we hope to develop a market for agricultural products. Mr. VANIK. How much are you doing on that? How much selective credit have you used and to whom? Mr. BRUNTHAVER. Let me supply that for the record, if I may. [The material follows:] |