STATEMENT OF HON. E. L. BARTLETT, A DELEGATE IN CONGRESS FROM THE TERRITORY OF ALASKA

Mr. BARTLETT. Thank you very much, Mr. Chairman and members of the committee. I do appreciate your hearing me at this time.

In giving my testimony I want to say it is gratifying to be associated in point of time with Governor Russell, with whom I had the pleasure of serving on the House Committee on Interior and Insular Affairs. And I will say for the record that nothing that Senator Barrett did when he was a member of the same committee, and nothing that Senator Dworshak did as a member of another committee was calculated in any way to harm the mining industry. I know that we all retain the same interest, even a greater interest in promoting that industry which is so important not only to our own areas but, indeed, to the entire Nation.

From what has been said here recently it is apparent that the illness is easier named than curative medicine prescribed, and I confess at the outset that I have not been in any laboratory. I have not come out with any cureall. However, I know what the idea is, of course. The idea is essentially that there are not enough miners. If there were they might be similar to certain other classes and they would live comfortably off the taxpayers forevermore. But I know that the people in the mining industry do not want to do that sort of thing. They do not want to take tax dollars from the other people of the Nation. They simply want the climate established that will give them a fair break, an even chance to pursue their work, and it isn't going to be easy to attain. That we all know.

However, it can be done, and, as Governor Russell so aptly said, this must be a program looking some distance into the future. It must not be something for the next 2 or 3 years. No short-term program will really help.

Actually, Mr. Chairman, I suppose that after changing a few figures I might simply conclude my testimony by saying ditto to Governor Russell's presentation about Nevada, because practically everything he said there could be applied to Alaska and, I suspect, to every other mining State.

I think the plight of Alaskan mining is epitomized in the sentence from a letter written to Senator Murray by Mr. Phil Holdsworth, Alaska commissioner of mines, and this sentence is as follows, and it refers to antimony, and I quote:

This metal is found throughout most of Alaska, but the deposit of the Stampede mine is the highest in grade of any appreciable size deposit under the American flag.

Here is the largest high-grade deposit of antimony in the whole United States. That mine is operated by Mr. Pilgrim who is now in the room and who testified before you the other day.

Mr. Pilgrim, I might add, has been an acquaintance and a friend of mine over 30 years. He is one of the first members of the faculty of the University of Alaska, and he has devoted his life to trying to promote mining in Alaska. Here he is in possession of this mine of such magnificent resources and potentials, and he cannot mine it because the price in the United States is not high enough.

Alaska, as you all know, is fabled in song and story as the land of the prospector and the miner, and, if any such description were to be given to Alaska today, Mr. Chairman, the word "fable" would be particularly apt because no prospectors are going out into the hills, and few mines are operating.

As Governor Russell said, Nevada has produced, as I recall, close to a billion dollars in gold and silver, and so it is with Alaska. From 1903 through 1957 the Territory of Alaska has produced something over $900 million worth of gold and silver, and today the gold industry in Alaska is dying. Most of the production comes from one big company. Very few small mines are operating. To my knowledge, there are no year-round gold lode mines; if so, of very small

size.

At Juneau, the capital, which was formerly the site of the largest low-grade gold mine in the world, giving a thousand people yearround employment, the plant stands idle. Whether it will ever reopen is problematical.

We have a mining industry which, to very large extent, is going, going, or gone, or exists only in potential. The potential, however, is there, and if this committee or this Congress or this Government can come up with some sensible, practicable program, some program based on merit, those potentials are going to be realized.

We all know how much American capital has flowed across the border in these last several years for the development of the Canadian mining industry, and I do not think we object to that at all. We want our good neighbors of the north to develop and prosper, and if that process can be expedited by the supplying of our capital, all to the good. But we know, too, that man's geographical line established in the boundary between Alaska and Canada, for example, did not mean that we are going to find minerals on one side of that line, namely, in Canada, and none in Alaska.

But you would think that was the case because Canada mining flourishes across the border in Canada. It languishes on our side of the border in Alaska.

It is true, we have there the largest platinum mine under the American flag, and one of the mine stockholders and officers of the operating company told me here just the other day that it likewise is suffering.

Curiously enough, our largest quicksilver mine in Alaska is now being operated the other way around, namely, by Canadian capital, and we are all for that, too. But, Mr. Chairman, I talked over the telephone just the other day with Mr. Holdsworth, our Commissioner of Mines, and he expressed regret and asked me to convey to you, the members of the committee, that he could not be here to testify in person. But he asked me if I would request your permission to insert in the record of these proceedings the letter he wrote to Senator Murray on March 21, together with an addition by way of a letter on March 25.

Senator BIBLE. Both letters may be made a part of the record in full.

(The letters referred to follow :)

Hon. JAMES E. MURRAY,

TERRITORY OF ALASKA,

DEPARTMENT OF MINES, Juneau, Alaska, March 21, 1958.

Chairman, Committee on Interior and Insular Affairs,

United States Senate, Washington, D. C.

MY DEAR SENATOR MURRAY: The mining industry in Alaska has reached a point where few, if any, of its representatives have the time or funds to travel all the way to the Nation's Capital to appear before your committee in the industry's behalf. The undersigned respectfully requests that the following statement be made a part of the record of your proposed hearings on programs to aid the mining industry scheduled for the week beginning March 24, 1958.

We believe your committee is by now well aware of the "soft" market position of all nonferrous metals, whether they are classified as strategic or not. If you are convinced that the mining industry in the United States is in need of governmental support, then consider the industry in Alaska where the cost of doing business is 12 to 2 times the cost of doing business stateside, depending on the location of the mineral deposits relative to transportation facilities. This simply means that our deposits must be higher in grade than those now in production in the United States if investment capital is to consider their development.

Now, let us take a look at the various minerals to be considered by your committee.

Antimony: This metal is found throughout most of Alaska, but the deposit of the Stampede mine is the highest in grade of any appreciable size deposit under the American flag. When market conditions have been favorable, this mine has been the No. 1 United States producer. The very competent owneroperator of this mine has been struggling for many years to find a reasonable market for his product and consequently his production has been intermittent. The long-range picture has been so unsatisfactory that the operator is not justified in developing the full potential of this deposit.

Copper: Alaska has been an important producer of copper in the past and can be again when the domestic producer has a competitive chance against foreign metal imported into the United States.

Iron ore: Southeastern Alaska contains a 400-mile belt along which extensive deposits of titaniferous magnetite occur. Other deposits of nontitaniferous magnetite, generally associated with copper, are also known. All of these deposits are found within a few miles of tidewater open to year-round transportation. We believe we have the ore reserves for a west coast steel industry, particularly when the metallurgical problems caused by small amounts of titanium are

overcome.

Mercury: Alaska ranks second only to California in mercury production among the States. Our major producer, DeCoursey Mountain Mining Co., was reported to be the second largest producer in the United States and its possessions for 1957. Short of a firmer market for mercury, or a long-range plan by the administration, the operator is hesitant to develop the potential of this promising deposit, and has been forced to concentrate his efforts on production from the higher grade portions of the ore body when the market is favorable. Other promising deposits are under development in west-central Alaska.

Nickel: A 120-mile belt, also in southeastern Alaska and on the coastline, contains numerous outcrops of norite or gabbro, an igneous rock which historically has been the host rock of all the important sulfide-nickel deposits in North America. Wherever this type of igneous rock outcrops, nickel mineralization is found, which is similar in occurrence to the famous Sudbury district of Canada, which supplies most of the nickel consumed in the United States.

Tin: Alaska has the only known tin reserves under the American flag and has produced 90 percent of the United States total to date. Even in our best year, however, we only produced a fraction of 1 percent of the United States consumption. There has been no incentive to develop new reserves in recent years as it is impossible to produce tin in competition with foreign sources at present metal prices.

Barite, fluorspar, gypsum, lead, manganese, mica, molybdenum, sulfur, tungsten, and zinc also occur in Alaska in known deposits but with a much more limited potential based on our present knowledge.

Now, the question is, "What can we do to create an economic atmosphere for the mining industry which will result in sufficient profitable production to justify full-scale development of our actual mineral potential?" After all, that is our main goal-to "prove up" all possible domestic resources which will be available in time of national emergency. This can only be accomplished by insuring a profitable market for at least part of our domestic capacity.

The present administration appears to be in favor of the extension of the Reciprocal Trade Act which in practice has allowed reductions in protective tariffs and shown us the uselessness of the relief provisions. The only countermeasure offered has been a so-called long-range minerals program, which has attempted to alleviate the distressed condition of a few minerals on a short-term basis.

Members of Congress on the other hand (and particularly those representing the western mining States) have been advising us that the Reciprocal Trade Act should be allowed to expire, thereby opening the way for the establishment of proper protective tariffs or import controls on foreign-produced minerals, which will enable the domestic mining industry to regain at least some of its former stamina. As a result of our experience with the program in effect the past several years, we will have to agree with this line of reasoning.

It just doesn't make sense to take the American taxpayer's money and spend it in foreign countries assisting in the production of minerals which are imported in competition with domestic production, and at the same time spending more of this same taxpayer's money in a halfhearted attempt to keep the domestic industry alive. This merely results in aggravating an already serious situation. It encourages an oversupply of minerals while at the same time increasing the cost of domestically produced minerals due to the inflationary effect of the increased tax burden.

From the above reasoning, it would appear that effective protective tariffs or import controls are necessary if the domestic mining industry is to survive and continue to develop the ore reserves which are needed to meet those unexpected emergencies, which history has shown to arise.

Chairman, Committee on Interior and Insular Affairs,

United States Senate, Washington, D. C.

MY DEAR SENATOR MURRAY: Reference is made to our letter of March 21, 1958, regarding the hearings to be held this week on programs to aid the mining industry. In our original transmittal one of our most important minerals was omitted, and we hereby request the following addition to our statement be added to the official record:

"Chromite: This is one of the most promising potentials Alaska has, and at the same time one that will be hit hardest should Congress or the administration fail to come up with some answers in the very near future. One operator, Kenai Chrome Co., has developed their property over a period of several years to the point where they have been able to ship 7,000 tons of metallurgical grade chrome to the United States annually for the past 3 years. In order to recover all available chromite from their deposits a mill was constructed in 1957 for the beneficiation of low-grade material. This mill was placed in operation early in 1958 and unless something is done to change the chrome program as scheduled, this operator will be forced to close down his mine and mill before the year is out. At the present rate of production the quota for the present chrome-purchasing program will be met about August 1, 1958."

In order to expedite the presentation of this material we are asking Mr. Earl Pilgrim to add it to his oral statement before your committee.

Sincerely yours,

PHIL R. HOLDSWORTH,
Commissioner of Mines.

Mr. BARTLETT. Thank you, Mr. Chairman.

These letters describe the mining situation in Alaska in respect to the minerals that may be found there, their potentials. And Mr. Holdsworth makes certain definite suggestions as to what he thinks ought to be done.

I assure you that in all of this, Mr. Chairman, I do not speak on account of any personal interest. It is for the interest of the industry. It is true that formerly I had a small holding, but my most recent calculations demonstrate conclusively that the price of gold will have to be raised to $250 an ounce before I can go back to mining

However, seriously, it is not well for the Nation, in my opinion, the Nation as a whole, that this industry should be in the doldrums and should confront the very distinct possibility, if present circumstances are to exist in the future, of virtual extinction.

We may find ourselves caught short at the wrong time, and, if that were to happen, the person in any Eastern State, for example, who has no interest in mining whatsoever would suffer equally with the miner who is so badly hurt right now, because these minerals we must have, and we have them in the ground, and there is no good reason why they should not be brought out of the ground at a reasonable and decent profit to the producer for the enrichment and betterment of all the citizens in this country. And I wish you well, Mr. Chairman and members of the committee, in your deliberations on this most important subject.

Thank you very much.

Senator BIBLE. Thank you very much, Mr. Delegate.

Would you, by chance, have some suggestion or solution for the plight in which we find ourselves?

Mr. BARTLETT. I qualified myself right at the outset by saying that, unhappily, I do not. But I do agree most positively with Senator Dworshak and Senator Barrett in feeling that it is going to be extremely difficult to adjust the tariff situation adequately to ake care of this problem, because we must be realists, and we know, as the able Senators so aptly said, or I will say it for them, that the cards are somewhat stacked against us in that respect.

Senator MALONE. Mr. Chairman, could I ask Mr. Bartlett a question?

Senator BIBLE. Certainly.

Senator MALONE. Do you believe, as some of the Senators have said here, and Governor Russell, that Americans ought to have equal access to the American market?

Mr. BARTLETT. No, Senator Malone, I do not. I think they ought to have a priority, not equality.

Senator MALONE. A little more than equal access?

Mr. BARTLETT. Absolutely and positively.

Senator MALONE. I think you are absolutely right. But that was a very modest request that I presented to you.

You are, then, for regulation of foreign trade on the basis of fair and reasonable competition. In other words, let the Americans compete for the American market on a profitable basis, and let us not keep anything out that simply gives the American a break to make a reasonable profit in their American market. You would be for that? Mr. BARTLETT. Yes, of course, I should be for that, Senator.