LONG-RANGE PROGRAM FOR MINERALS INDUSTRY TUESDAY, MARCH 25, 1958 UNITED STATES SENATE, SUBCOMMITTEE ON MINERALS, MATERIALS, AND FUELS, OF THE COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, The subcommittee met, pursuant to recess, at 10 a. m., in room 224, Senate Office Building, Hon. James E. Murray (chairman) presiding. Present: Senators Murray, Malone, Bible, and Carroll. Present also: Senators Church, Watkins, and Allott. Staff members present: Robert W. Redwine, assistant counsel to the committee, and George B. Holderer, staff engineer. The CHAIRMAN. The hearing will come to order. This is a continuation of the hearings which started March 24. Mr. Frederick H. Mueller, Assistant Secretary for Domestic Affairs, Department of Commerce, will be the first witness this morning. Mr. REDWINE. Mr. Chairman, Senator Talmadge and a group of witnesses, whom he will introduce, is scheduled to appear at 11 o'clock. I believe that Mr. Mueller's testimony can be finished by that time. May I suggest that you call that to the attention of any Senators who come, because we are working on a tight schedule? The CHAIRMAN. Very well. You may proceed, Mr. Mueller. STATEMENT OF FREDERICK H. MUELLER, ASSISTANT SECRETARY FOR DOMESTIC AFFAIRS, DEPARTMENT OF COMMERCE Mr. MUELLER. Mr. Chairman, prior to my appearance here this morning at the request of the staff and the members of your committee, I sent each and every member of your committee a table of the consumption and the estimated consumption of certain minerals and metals which I am prepared to discuss at this time. Frankly, the tables which were submitted, speak for themselves as far as the consumption up to and including the calendar year 1957. For 1958 and for 1959 we have estimated to the best of our ability what the demand for these specific minerals may be. Naturally, those estimates are based on factors and judgment on the part of the people from industry, experts in the field on these particular items, and while I just want you to know, sir, that they are estimates, they are arrived at after weighing what we consider all the factors that are pertinent. Outside of that, at the present time, I have no further comment to make. I shall be very glad to answer any questions. The CHAIRMAN. The exhibit that you submitted will be inserted. in the record at this point. Mr. MUELLER. Thank you, sir. (The exhibit referred to is as follows:) Antimony: U. S. DEPARTMENT OF COMMERCE Consumption and estimated consumption of certain minerals and metals (1954-59) Item Unit 1954 1955 1956 1957 1958 1959 12, 180 12, 472 12, 897 10, 400 10,000 ..do.. 12,000 22, 358 23, 702 24, 106 23,000 22,700 do. 23,500 1, 215, 678 1, 459, 671 2,062, 076 1,800,000 1,750,000 Long tons.. 1,700,000 5, 460,000 5,830, 500 6,582, 600 6,400,000 6,600,000 Short tons. 7,800,000 584, 835 702, 480 701, 252 702, 000 750,000 830,000 NOTE.-Many of the consumption figures for 1957 must be considered as preliminary 5,428, 800 54, 700 1,900,000 5, 450 11, 700,000 38,000,000 Sources: Bureau of Mines, U. S. Department of Interior; Business and Defense Services Administration, U. S. Department of Commerce. Industry Reports. 39, 218 8, 250 46, 463 10, 246 53, 610 10, 529 46,000 40,000 8, 500 50,000 10,000 1,678,000 2,046, 000 2, 199, 000 2,270,000 42, 796 57, 185 54, 143 52, 400 2,200,000 5, 550 86, 500 42,652, 000 38, 956, 000 94, 733 127, 578 124, 000 11, 535, 850 11, 700, 000 3,507, 802 3, 520, 000 5,625, 400 5,735, 400 4,037,000 The CHAIRMAN. You have no prepared statement? Mr. MUELLER. I have no further statement to make. I have presented the figures which was what I was asked to do. Mr. REDWINE. Mr. Chairman, may I ask a question or two? The CHAIRMAN. Yes, you may. Mr. REDWINE. Mr. Mueller, a rapid examination of this chart would indicate that it is estimated that the 1959 level of consumption will approximate that in most instances of 1957; is that correct? Mr. MUELLER. That is right, sir. Mr. REDWINE. Not exactly, but very close. Mr. MUELLER. Well, as I said in my opening statement, it is a matter of judgment and I believe the considered judgment of almost anyone with respect to our economy is that by 1959 we should have at least attained the same level of production that we did in 1957. Mr. REDWINE. Mr. Mueller, how firm is the department in its belief that the estimates for 1958 will stand up? Mr. MUELLER. You know, it is very difficult to answer that question except to say that I have personally gone over each and every one of these things and the background information. It is based primarily on the fact that at the present time we are in a period in our economy when possibly in basic materials of this kind the consumption will probably be off 10 percent or more, on the average. Mr. REDWINE. Mr. Mueller, are these estimates based on the assumption that the low point is reach in the present depression or recession or reduced productivity period we are in, whatever you may choose to call it? Mr. MUELLER. Well, let us say they are based on the opinion that during the first part, and possibly the middle, of the year, we will be at a reduced rate and that the pickup will occur sometime during the calendar year. Mr. REDWINE. Mr. Chairman, I have no further questions. The CHAIRMAN. Your assumption is that we are at the bottom of the slump now and that things from now on are going to be greatly improved? Mr. MUELLER. No, I cannot quite say that I go along with that, sir. I feel that we may continue for a while at the level of present production. The CHAIRMAN. When you say for a while, what do you mean? Mr. MUELLER. I am not trying to weasel, but I would say until the middle of the summer. The CHAIRMAN. The middle of this coming summer? Mr. MUELLER. That is my best considered judgment, but it must be considered that anybody who sticks their neck out under present conditions is making an estimate purely based on factors that he feels are controlling. The CHAIRMAN. It is largely influenced by hope, too, is it not? Mr. MUELLER. No, I think basically our economy is fundamentally sound. I do not think that we have the factors in our economy that heretofore have caused a continuous situation such as is before us today. Our financial situation is strong; our inventory position is not overextended. As a matter of fact, it is being reduced. I could cite almost innumerable factors that in my opinion, weighed together, make the statement that I have made plausible to me and I am not putting it out as a Pollyannish estimate. The CHAIRMAN. Are there any other questions? Mr. REDWINE. I have none, sir. The CHAIRMAN. Senator Bible? Senator BIBLE. I am sorry, Mr. Chairman, but I came in very late and I did not hear Mr. Mueller's testimony. I have no questions. The CHAIRMAN. Will you repeat very briefly what the assumption is that you are making here with reference to the improved conditions of the economy? Mr. MUELLER. In the first place, sir, the tables which we have submitted show the actual consumption for years up to the middle of 1957 and estimate for 1958 and 1959. Now, our estimate for 1958 is at a reduced level from, naturally, 1956 and 1957, and it is based on an average, we might say, of approximately 10 percent below normal basic consumption of basic materials. With the estimate that during this year probably by the middle of the summer we will have started up on an upward climb, but we still for the overall year 1958 it will probably average approximately 10 percent below. Senator BIBLE. However, you do not share that same view for 1959? Mr. MUELLER. By 1959 we feel we will have again regained at least the level of 1957. Senator BIBLE. I notice you reflect that in manganese and you reflect that in tungsten and you reflect that in molybdenum and many other of the metals that are listed here. Mr. MUELLER. Yes, sir. Senator BIBLE. Thank you. I have no further questions. The CHAIRMAN. Thank you very much. Senator Talmadge is here this morning. We will ask Senator Talmadge to come forward and introduce his witnesses. STATEMENT OF HON. HERMAN E. TALMADGE, A UNITED STATES SENATOR FROM THE STATE OF GEORGIA Senator TALMADGE. Thank you, Mr. Chairman. Mr. Chairman, I wish to express to you and the committee my deep gratitude for affording this opportunity for interested parties to appear in support of my bill, S. 2077. (S. 2077 is as follows:) [S. 2077, 85th Cong., 1st sess.] A BILL To direct the Secretary of the Department of the Interior to undertake a survey in order to assist in promoting the production of concentrated iron ore and steel in the southern Appalachians area Whereas the production of steel and related products are, and will be essential to the defense and the economy of our Nation; and Whereas there is an abundance of iron ore in the southern Appalachians particularly in the beds known as the Clinton sedimentary iron-ore beds occurring in the States of Georgia, Alabama, Tennessee, North Carolina, and South Carolina and in associated deposits; and Whereas there are extensive deposits of bituminous fuels in the States of Georgia, Alabama, Tennessee, North Carolina, and South Carolina adjacent to the Clinton beds, which are essential not only to the future recovery and concentration of low-grade steel in such States, and possibly elsewhere, but also for other purposes related to the defense and economy of the Nation; and Whereas the transportation facilities afforded by the Tennessee River waterway, the Coosa-Warrior River waterway, the Alabama-Tombigbee River waterway, the Apalachicola-Chattahoochee-Flint River waterway, the Savannah River waterway, and the contiguous railways of the area will promote a tremendous expansion for industries aiding the economy and national defense of this Nation; and Whereas the coordination of production and transportation facilities must be generated by effective surveys and studies tending to develop groupings of various industries in the coordination of their common problems: Now, therefore, Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Department of the Interior is authorized and directed to conduct a survey, having national significance in the defense and economy of our country, for the purpose of determining ways and means of affirmatively encouraging the production of cencentrated iron ore for steel, and its related products, from the sources of ore and fuel in and contiguous to the southern Appalachians area. The Secretary shall report the results of such survey to the Congress, and shall make such reports public, not later than one hundred and eighty days after the date of enactment of this Act. This measure is one which I offered for myself and the Senators from Georgia-Mr. Russell; Alabama, Mr. Hill and Mr. Sparkman; South Carolina, Mr. Johnston and Mr. Thurmond; North Carolina Mr. Scott and Mr. Ervin, and Tennessee, Mr. Kefauver. Essentially, it would direct the Department of the Interior to undertake a survey to determine the extent of iron ore deposits in the Southeast and the means through which those deposits can be utilized effectively for the production of steel. It provides for a report of findings within 180 days of enactment. For some years now economists, industrialists, and defense planners have been concerned about the rapid depletion of the country's traditional sources of iron ore. Already many users have been forced to turn to other sources of supply, notably those in South America. As a matter of prudence and preparedness, it would seem to me that this situation should behoove the United States to search out all available sources of iron ore here at home. This should be done to insure against any unhappy circumstance which in the future might deny us our foreign supplies as well as to assure readily available reserves which could be tapped immediately in any emergency. It is well known among geologists that there is an abundance of iron ore in the southern Appalachians. In my own State of Georgia, some very promising deposits have been discovered in the Webster County area just recently. There is reason to believe that even richer deposits abound in the area if only some means could be found to seek them out and utilize them. I, of course, can speak only as a layman who is interested in promoting the economic welfare of his State and region and in maintaining the Nation's capacity for the production of steel in the amounts needed for both defense and civilian requirements. However, I have invited three men who can testify as experts on this subject, and who are prepared to answer the technical questions of the committee about all the ramifications of S. 2077. It is my happy privilege to present to the committee three of Georgia's most outstanding citizens: Dr. Merle C. Prunty, Jr., who is head of the department of geology and geography at the University of Georgia, and one of the most outstanding in the Nation; Capt. |