Senator GRUENING. The next witness is Mr. E. B. Connors, manager of exploration and development, Kaiser Cement & Gypsum Corp., Helena, Mont. Mr. Connors.

STATEMENT OF E. B. CONNORS, MANAGER, EXPLORATION AND DEVELOPMENT, KAISER CEMENT & GYPSUM CORP.

Mr. CONNORS. Senators Gruening and Metcalf, and ladies and gentlemen, my name is Edward Connors. I am manager of exploration and development for Kaiser Cement & Gypsum Corp.

Our company holds no unpatented mining claims in the State of Montana, so perhaps it would appear that at this meeting we have nothing to complain of nor offer to this group. The reason behind the fact that we are not trying to develop further raw material sources and resources in Montana may be enlightening and helpful to this assembly, at least it will explain our interest in this meeting.

As you may know, the Kaiser companies, to a large degree, are in basic industries producing useful materials from mineral resources. The companies are: Kaiser Steel, Kaiser Aluminum & Chemical, Kaiser Sand & Gravel, Kaiser Cement & Gypsum, and one or two others.

Of these aforementioned companies, we represent only Kaiser Cement & Gypsum. Each of these companies could present tales of frustration in obtaining patents to mineral claims from the Federal Government similar to those I will outline here, which have befell Kaiser Cement & Gypsum.

Frustrating experiences in the past and continuing in other States at the present time have discouraged our management from exploration and development of mineral resources on the public domain. We are in need of further mineral resources in Montana. There are areas where the exploration for these needed mineral resources would prove fruitful, but frustrations experienced in other States have caused us to look primarily to resources already patented by others.

I would like to outline for you two such costly and fruitless ventures: The first: In 1956 we obtained an option on a tract of privately owned land in Socorro County, N. Mex., on which there was a known deposit of limestone. The mineral resources on this land resided with the Federal Government. We then placed mining claims on this limestone and proceeded diligently to explore and test this deposit. The limestone proved excellently qualified for the manufacture of portland cement. We then purchased the surface rights of this property and proceeded to complete the statutory requirements for patent. In May 1959 we made application for patents for this group of claims. Application was filed with the Bureau of Land Management at Santa Fe, N. Mex., Patent Application No. NM-063649.

Following patent application there was a long period of waiting, punctuated by much correspondence and telephone conversation with the Bureau of Land Management. Finally we were notified that our patent was to be denied. We asked for a hearing to explore the reasons for such denial.

This hearing, in the form of a precomplaint meeting was finally held on March 16, 1961, nearly 2 years after the date of application for patent. I have copies of the minutes of that meeting with me. Should they be desired, I can have them reproduced. I might add that the minutes of that meeting probably would be of much interest to you Senators.

The essence of the complaint as of that time, are covered by the following four points:

1. No discovery could be claimed when it has not been proven that mining and processing of the material would be economically feasible.

2. The limestone was not locatable, as it was not a valuable mineral, as defined under the multiple-use act of 1955.

3. That the north half of claim No. 73 was nonmineral in character, and

4. That insufficient improvement had been accomplished. Following this meeting was another long period of waiting, and during this time we corrected to the satisfaction of the Bureau of Land Management on several of these points, and in these points that we did make corrections on, they were points of minor importance.

Following this meeting there was another long period of waiting punctuated by correspondence and prodding of the Bureau of Land Management by Kaiser Cement to bring the matter to a formal hearing. Finally, we received a formal complaint from the Bureau of Land Management dated August 13, 1964-just 5 years and 3 months after the date of filing the patent application.

The complaint reads as follows:

Valuable minerals have not been found in the limits on the contested claims so as to constitute a valid discovery within the meaning of the mining laws.

No date, apparently, has been set as yet. The latest correspondence I have on the matter is a letter from the Office of the Hearing Examiners at Salt Lake City to our attorney, dated January 22, 1965. This letter states:

I am unable at this time to give you a definite information as to when we will be able to schedule the hearing in this matter. It does not appear likely, however, that this can be reached for hearing before next fall.

Thus we have spent 9 years and over a half a million dollars on a project that has not yet gotten off the ground, due entirely to the manner in which our mining laws are being administered. That is one case involving limestone suitable for the manufacture of cement. The second case:

This case concerns application for patent on three lode claims in the San Bernardino National Forest in San Bernardino County, Calif. The mineral claim is silica, which occurs as a quartzite formation. The silica was to be used by our nearby cement plant in the manufacture of portland cement.

The claims were first established in 1956. Again, we went through the period of exploration and development and a considerable amount of this silica was used in the plant, proving its value and suitability in a highly specialized purpose, with rigid chemical specifications.

Patent application was filed on December 7, 1960. Patent application No. 0169115. The Forest Service got around to examine this claim on March 19, 1963-2 years and 4 months after the date of application for patent.

A complaint was filed by the Forest Service on August 22, 1963. Here again the complaint charged that no discovery of valuable mineral had been made within the meaning of the mining laws, plus other complaints that were subsequently dropped by the Forest. Service.

This case was brought to a hearing by the Office of the Hearing Examiners on September 5, 1963. A decision was handed down on this on October 15, 1964, by the hearing examiner. This decision was in our favor. The complaint was dismissed. We were only briefly elated though. On November 13, the Forest Service appealed the case to the Director of the Bureau of Land Management. No date has yet been scheduled for hearing of this appeal.

I sincerely hope that the preceding outline of frustrations will point out to the Senators and others that the administration of the mining laws has caused us and many others to hesitate to explore for and to develop mineral resources on the public domain, even in the State of Montana where the prospects of reward are good.

Senator GRUENING. Thank you very much, Mr. Connors.

Let me ask you whether, during this period of successive delays, your company made any effort to speed the hearing on the action, or did you just let nature take its course?

Mr. CONNORS. No; we were continually prodding, to the point where we almost felt we were becoming a nuisance. I would say that we were in contact with them, oh, probably more than once every 2 months.

Senator GRUENING. Were these written communications?

Mr. CONNORS. Some of them are, most of them are.

Senator GRUENING. But, whether written or oral, you could not get any speeding up of the proceedings of the Government? Mr. CONNORS. We haven't been able to.

Senator GRUENING. You hear a good deal about the law's delays, but we seem to have a case here where we have delays by the administrative agencies of the Government that have nothing to do with the law, so we will see what we can do.

Senator Metcalf, do you have any comments on it?

Senator METCALF. I haven't any comments. I appreciate, Mr. Connors, your coming in and bringing us other examples of the administration of this mining law, and not only the administration of Public Law 167, but the general administration of the law and its application to these two specific instances. This is just the kind of thing that I was looking forward to, and it is typical of what goes on here in Montana, and, as you have pointed out, typical in other regions of the United States because your examples were in San Bernardino County, Calif., and Sorocco County, N. Mex.

Mr. CONNORS. I think that if you held a hearing similar to this in any State in the West, Senators, you would find an equal number of complaints and similar stories of frustration due to time.

True, we are not a small company, but here is a project in which we have already invested over a half a million dollars, and I am satisfied in my mind that the only reason we have not a cement plant operating in the State of New Mexico today is due to the interpretations of the laws and this slow motion that we are getting from the Bureau of Land Management.

Senator GRUENING. Well, I am quite sure that the Senator from New Mexico, who was the author of this legislation, will be very much interested in this, Mr. Connors.

Mr. CONNORS. Well; I am quite sure he is acquainted with it.
Senator GRUENING. And all your frustrations.

look into the matter, Mr. Connors.

Mr. CONNORS. Thank you.

Mr. FRENCH. Mr. Chairman, if I may?

Senator GRUENING. Mr. French.

We will certainly

Mr. FRENCH. I hope you will forgive me for the question I am about to ask if it sounds as if it might be hostile I assure you, it isn't intended to be. It is only to try to put into the record material which might be helpful. I have chosen you as the witness of whom to ask it, although it has been on the tip of my tongue during the testimony of a number of witnesses. I am asking you because you represent Kaiser, which is a great, nationwide organization and well able to take care of itself, as we say. While certainly Kaiser can't afford to let half a million dollars go down the drain to contest an administrative decision, still it is better able to do so than some other people.

The question is, What objections do you have to a leasing system for limestone? Assuming that the administration is right that you do have to come in under the leasing procedure of the Materials Act, now, what is the objection to that?

Mr. CONNORS. Well

Mr. FRENCH. Just one moment-if I may interpolate for just one second. Under the mining laws you get something for nothing; under the Materials Act you have to pay for it. Now, forgive me if that sounds hostile, I don't mean it that way. I am just trying to exemplify the record-I know that Kaiser would not object to having to pay fair value for value received, would it?

Mr. CONNORS. Not as long as it would leave us in a competitive field. If our neighboring cement plant had acquired their raw materials under the mining laws, and they were not loaded with that burden which we would have, it might be fair then.

Now, the other thing that comes into that is that under this leasing law I understand that it is subject to open bidding in a period of 5 years-well, we can't go in and invest $10 to $15 million in a cement plant and have competitor come in and bid our raw materials out from under us-we could not afford to be in that position, no more than we could afford to build a cement plant on raw materials that we did not have title to. Our board of directors would throw us out if we ever proposed such a thing.

Mr. FRENCH. Mr. Connors, I hope you understand that I am being the Devil's Advocate, so to speak, and am not voicing a philosophy of my own. I think Mr. Connors' discussion has been most constructive, Mr. Chairman,

Senator GRUENING. Thank you very much, Mr. Connors, for a very valuable presentation.

The next witness we have heard from previously in an informal manner. We would like to hear from him again, Mr. Norman Rogers of the Norman Rogers Mining Co.

You may proceed, Mr. Rogers.

STATEMENT OF NORMAN ROGERS—Continued

Mr. ROGERS. Well, as we stated earlier on our case on this ringing rocks down there we are supposed to come up under the guillotine on the 26th, according to my friends here with the Bureau of Land Management, and if you could persuade Mr. Udall that I shouldn't have my head cut off right away quick, I would sure appreciate having something done about it. Now, he might listen to you, but I am pretty sure he isn't going to listen to me, because it seems like he has more power than the U.S. Government and the President himself.

Senator GRUENING. Well, that is something that the legislative branch has a responsibility to inquire into, and I assure you that this part of the legislative branch will do something.

Mr. ROGERS. Now, you were talking about fencing here a little while ago. I have some claims up above Virginia City that the Government went across with a fence. They never even put in a cattle guard. I have to get out and open up where the barbed wire fence is to get through there and I generally take a piece of bark off my hand whenever I touch one of those gates.