mestic production. In the debates on that bill, referred to as H. R. 1602, it was stated by the sponsor that it was designed to continue what was called the premium price plan for copper, lead and zinc for a 2-year period.

The plan had been in operation since 1942. From 1942 to 1945 it was authorized by Executive order under the War Powers Act because there was a shortage of those strategic materials. In 1945 the shortage continued. So Congress extended it for another year.

In the efforts to extend it for an additional 2-year period strong opposition was voiced by many leaders of the industry whose interest had largely been centered on foreign production.

Our Government was gradually developing a world program— call it foreign aid, mutual aid, free trade or whatnot-to encourage mining companies to go abroad and produce minerals for the American market from foreign sources.

Here it might be said that there are those who might be critical of some of our major mining companies for pursuing this course, but I am not one of them. I have come to realize that they are but following a course of action which Uncle Sam prescribed, and they are attempting to develop resources of many foreign countries which otherwise would not have been developed as rapidly had it not been for beneficient Uncle Sam.

Ten years ago, mind you, the domestic mining industry was being hit with a two-edged sword; one, the people were being sold on the theory that we had exhausted our mineral resources. There was a report given at that time by a commission headed by Mr. Paley, known as the Paley report, which, I might add, is cited by economic professors and swivel-chair miners of the country to indicate that we are practically out of minerals in the United States.

Two, we were being sold on the advantages of investing our money abroad, loaning and, in fact, giving it away, in an all-out effort to encourage production outside our borders. The Allen bill, which I have referred to, passed the Congress only to be vetoed by a former President, who, in his veto message, showed clearly that it was no longer the desire of the then administration to continue the encouragement of domestic mineral production.

To overcome the objections raised by the President, many segments of the industry came to Washington for conferences with administration and congressional leaders. As a result of these conferences, a bill sponsored by the chairman of this committee at that time, the Honorable Joseph C. O'Mahoney, of Wyoming, received executive department approval. The measure was known as S. 2105. It passed the United States Senate twice, but the Rules Committee of the House refused to give it a rule, and congressional leaders, including the junior Senator from Colorado, who was then a Member of the House, were unable to gain sufficient votes in the House to pass the legislation even with administration approval.

Subsequent to this unfortunate event, various committees of the Congress, including the Small Business Committee of the House, conducted extensive investigations in the field, and visits were made to practically all of the mining centers of the Nation by that and other committees; the Small Business Committee of the Congress went into the areas in which mining operations were being conducted and

listened to witnesses from the various mining districts; then compiled a report of its findings and recommendations: Copies of the report were placed upon the desks of practically all of the Members of Ĉongress, showing that there were differentials in costs between production within the United States and without, that other advantages existed, such as cheap labor, low taxes, cheap transportation and so forth.

This situation did not, however, prevail in every country, for there were equalizing factors in some. But, in the main, it was advantageous for a producer to do his mining outside the United States.

Additional hearings were conducted by this committee and by other committees in which an effort was made to amend various pieces of legislation which would have given the domestic industry a new breath of life. But, in spite of all this effort, the industry continued to disintegrate and die.

The slaughter of domestic mines has been a national disgrace.

I recall when we used to hold meetings in Reno, Nev., for example, there would be 3,000 or 4,000 men show up for these meetings, small operators for the most part, mining people of all descriptions. I have heard it said that if you had a meeting of the mining people in Reno today you would probably have a small dozen.

It has been contended, and I think properly so, that the Nation cannot remain strong without an active, healthy, going mining industry, and yet there is anything but a healthy, active, going mining industry in the United States today.

Stockpiling legislation helped the industry some, and then, of course, the buy-American provision of that act when it wasn't sidetracked by engenious bureaucrats was very helpful.

It is interesting to note that in correspondence with our office in Denver early administrators of that act proclaimed with firmness-That there was nothing in the Stockpiling Act which showed the intent of Congress to strengthen the domestic mining industry.

In fact, certain administrators intentionally drove the price of metals downward by bidding less than the then market price. At one time the administrators of the Stockpiling Act were openly bidding less on the market than the world price for metals.

I need not advise you that when metals were in short supply and we had a ceiling price over our heads here in the United States the world price increased to such an extent that the American consumer was paying far more for the products of mines than a sound domestic mineral program would have cost. In fact, contracts were made at that time by our Government for foreign production to insure us of outside sources of supply which were over today's market, that is in excess of present quotations. And here I would like to say that it is very easy to condemn the administrators at that time who made long-term contracts at prices above today's market for foreign production, but at that particular time I happen to know, because I was in the agency that was doing the contracting, that it was thought advisable for the safety and security of our country to make those contracts with foreign producers at the prices quoted.

Senator CHURCH. May I ask a question here, Mr. Palmer?
Mr. PALMER. Yes, sir.

Senator CHURCH. You mentioned just a minute or two ago that there had been a buy-American provision in the legislation that we

are now considering, but that it was circumvented by the ingenuity of those administering the law. Could you explain that a little further to me, please?

Mr. PALMER. Originally, when the Stockpiling Act was being considered by the Congress, it seemed advisable to leave out the buyAmerican provision altogether.

Senator ALLOTT. When was this, Mr. Palmer?

Mr. PALMER. This was about 1947, I believe.

Senator CARROLL. The buy-American provision, I think, went into effect in 1947, or it might have been 1948.

Mr. PALMER. I understand now it is 1948.

Senator CHURCH. That buy-American provision, I take it, pertained to purchases made by the Government for the stockpile to be bought from domestic mines. Is that correct?

Mr. PALMER. In other words, if the same price were quoted by an American producer, taking into consideration the so-called concessions which were being made to foreign producers, the American producer was to be given preference.

It should teach us all an important lesson, namely, that, as outlined by the Stockpiling Act, the United States cannot become totally dependent upon foreign sources for its supplies of minerals, for, as indicated in the act itself, this would be a dangerous and costly experience indeed.

Some spokesmen for the mining industry have alleged-and I believe that even one of the members of this committee has inferred— that this program resulting in the destruction of American mines was communistically inspired. In other words, America would be hopelessly dependent upon foreign sources which may be cut off in the event of an emergency.

The mining industry has emphasized on numerous occasions the dangers involved to the national security in closing down our mines, not only to the economy of the respective areas in which the mines are located but to the loss of skilled workers who must train for years to become proficient in their work. Today a miner is a skilled workman. He has to be trained. He is a high-paid workman.

It is regrettable, but in many mining camps today it is becoming more and more difficult to find skilled workmen who are willing to devote their lives and their efforts to the production of minerals within the country.

We have exported our know-how and our best equipment and mining experience.

There was a time when the efficiency of mining was all in favor of the American miner. Today in many sections of the world, even though lower wages prevail, efficiency has increased remarkably well. It would, therefore, seem to be quite clear to any thinking person, regardless of whether he is connected with a mining operation or not, that we should adopt a realistic mineral program in the United States, not one designed to help only the prefered segment of the industry or the lower-cost operators.

The word "marginal" has been used in the Halls of Congress and by many so-called mining experts to mean those mines generally located great distances from markets and of a smaller nature than, say, the low-cost large mining operations. In rebuttal it has been pointed out

that every large mine was once a small mine and that in a great many instances mines have been uncovered and developed by prospectors and small miners.

Children should receive more protection from the devastating influences of present day economics than grownups, and yet today we are not fighting for any particular segment of the mining industry. We are fighting for the survival of the entire industry. Most of the smaller segment has been killed off not through any fault of the mining industry, as has been foolishly stated, because of any division in the industry, but because the various administrations, including this one, have been unable to take the necessary steps, or unwilling to take the necessary steps to provide the means for survival.

It is all well and good to show today how many people are unemployed in the mining districts. The hardship, the distress, the turmoil, the strife, all have been emphasized in prior hearings very forcibly and very ably by our two Senators from Colorado as well as Senators and Representatives from all the other States. And statistical records are undoubtedly impressive in this regard, but in the main we are discussing here general principles.

As stated by Mr. Andrew Fletcher, president of the St. Joseph Lead Co., at our meeting in Denver, "Do we want a domestic mining industry?"

If we do not, then it should be clearly stated by the administration and by the Congress that we do not want to develop the mining industry in the United States. If, on the other hand, it is in the national interest to have an active, going mining industry, then the means by which the industry can become active must be provided by congressional action and administration approval.

A leader of our industry recently in an address inferred that the prospectors and developers had been too active in finding too many mines; that, on the other hand, industry had been slow in finding the end uses for the products of some of our mines.

It is true in many areas prospectors and developers have been active, but the record will show that Uncle Sam has given greater encouragement to foreign competition by making loans, grants-in-aid, tax concessions, cheap transportation, and giving many other incentives. It is my humble judgment that these more than anything else have resulted in an oversupply of metals and minerals upon the world markets.

It may be that accelerated purchases of materials for Government inventories for the purpose of solving economic problems tend to postpone rather than provide permanent solutions, as stated on the Joint Committee on Defense Production of the United States Government in its recent report, but what of the cost of postponing a realistic longrange minerals program?

Senator CHURCH. What you are saying, Mr. Palmer, is that stockpiling is no solution to the mining problem, has never been a solution, and, at best, merely postpones the time when we have to face up to the solution?

Mr. PALMER. That is right. It is an immediate aid and it has, I think, secured some industries in the United States against the dangers of depending upon foreign sources of supply in cases of emergency, but it is not the answer to our problem.

Senator CHURCH. In fact, is it not possible, Mr. Palmer, that the stockpiling program can even be an aggravation to the problem in that it might furnish incentive to increase production elsewhere in the world, and then, when the stockpiling stops or the bartering stops, the result is that the increased level of production means a greater influx of foreign metals onto our own markets?

Mr. PALMER. The Senator is exactly right, and that is exactly what is happening. That is why we have a surplus on the world market today, and I think that has influenced the situation more than any other factor.

Do those who officially watch the production of the domestic mining industry feel that it is a healthy development for the economy of the country and that it is sound reasoning to encourage its continuance?

Bankruptcy seems to be a poor solution for any problem, and the loss of taxes to Uncle Sam and to State and local governments would seem to be an important factor to be considered.

Studies have been made to show that whole communities depend upon mining to keep them in operation, and when mining is discontinued the whole economy of the area is dissipated.

Lead continues to be imported at needlessly high rates with 517,000 tons entering the United States in 1957 compared to 460,000 tons in 1956. The available domestic supply 1,341,000 tons in 1957 was therefore over 200,000 tons in excess of the 1,122,000 tons consumed.

In the case of zinc the surplus was 355,000 tons. Because of the records high imports of 794,000 tons, the domestic zinc consumption of 934,000 tons in 1957 was only slightly less than in 1956, the record consumption of 1,018,000 tons.

Senator CARROLL. Was that imports for the market or did it also include stockpiling?

Mr. PALMER. It also included stockpiling

Senator CARROLL. Do you know how much went into stockpiling under the barter provisions in that period of time?

Mr. PALMER. Under the barter provisions, no, Senator. I am sorry to say I haven't had access to those figures.

Senator CARROLL. Somewhere in the record, as I remember the debate, it was estimated that about $414 million worth of strategic and critical materials were put into the national stockpile by virtue of the extension of the barter provisions under Public Law 480.

This importation does include both for the domestic market and the stockpile?

Mr. PALMER. Yes, that is right. I can check those figures.
Senator CARROLL. I think that is good enough.

Mr. PALMER. Or consider the case of tungsten. A recent tariff report on this metal in which the Tariff Commission felt that a study such as authorized by the Congress should not be conducted showed, however, that tungsten was imported into the United States by at least two governments which were not recognizing the advantages of the system of private enterprise.

May I digress here to commend this committee for the amendment to the so-called tungsten procurement program which passed the Senate only to be objected to in the House, and to say that it is my humble judgment that had the Senate amendment prevailed the tung