Senator BIBLE. Thank you, Mr. Secretary. Mr. Secretary, my attention has been directed by the staff to the fact that tomorrow morning we have before our full Senate Interior Committee a bill to extend Public Law 733, the time limit of it, the authorizing law. I understand the departmental views have been requested and have not been received. It would be helpful if by tomorrow morning we could get the official views of the Department on the time extension of Public Law 733. Mr. SEATON. I was not aware of the fact that the committee did not have that information. We will see to it that you shall have it, if at all possible. (The report on S. 3186 of the Department of the Interior is as follows:) Hon. JAMES E. MURRAY, DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, D. C., April 29, 1958. Chairman, Committee on Interior and Insular Affairs, United States Senate, Washington, D. C. DEAR SENATOR MURRAY: Your committee has requested a report on S. 3186, a bill to extend for 1 year certain programs established under the Domestic Tungsten, Asbestos, Fluorspar, and Columbium-Tanatlum Production and Purchase Act of 1956. We do not recommend the enactment of S. 3186 at this time. This bill, if enacted, would extend to December 31, 1959, the provisions of subsections (b) and (c) of section 2 of the Domestic Tungsten, Asbestos, Fluorspar, and Columbum-Tantalum Production and Purchase Act of 1956 (Public Law 733, 84th Cong., 70 Stat. 579). Subsection (b) of section 2 of that act provides for the establishment of a program to purchase nonferrous chrysotile asbestos in amounts not to exceed 2,000 tons of crude No. 1 and crude No. 2 combined, and 2,000 tons of crude No. 3 when offered with crude No. 1 or crude No. 2, or both, at a stipulated ratio. Subsection (c) provides for a program to purchase no more than 250,000 short tons of acid-grade fluorspar from domestic producers. The programs were established to maintain the domestic production of these and certain other minerals in the United States, its Territories, and possessions, and to assist domestic producers in reorienting to normal competitive market conditions. These programs terminate upon the expiration of the act on December 31, 1958. However, the quantitative objectives of the acid-grade fluorspar and asbestos purchase programs have not yet been reached. Funds appropriated for the fiscal year 1958 and not used for the purchase of these two minerals will revert to the Treasury July 1, 1958. The domestic minerals stabilization plan which I outlined to your committee on April 28 provides for the stabilization of up to 180,000 tons annually of acidgrade fluorspar at a stabilization price of $48 per ton. My statement to your committee, on page 7, contains the following observations about fluorspar: "Fluorspar, acid-grade: The Public Law 733 purchase program was devised to maintain production at high levels and to assist the industry to bridge the gap between the cessation of purchases for the strategic stockpile and anticipated increases in industrial requirements for fluorspar. Thus far, it has in part achieved this objective. Production has been maintained at a high level. However, we feel that there is a danger if the program is continued in its present form that domestic producers will be severed from their contractual relationships with the consuming industry." Thus, if the plan we recommend is enacted by Congress there will be, in our opinion, no necessity for the continuation of the Public Law 733 program for acid-grade fluorspar. In regard to asbestos, I pointed out that sufficient funds to carry out the asbestos purchase program have already been appropirated. However, those funds remaining unexpended as of June 30, will revert to the Treasury, although the present authorization of the program will continue until December 31. We believe that if sufficient funds are made available for completion of the present 27255-58-pt. 2-4 authorized program under Pubile Law 733, it will not be necessary to extend the authorization as contemplated in S. 3186. The Bureau of the Budget has advised us that there is no objection to the submission of this report to your committee. Sincerely yours, FRED A. SEATON, Secretary of the Interior. Senator BIBLE. We will stand in recess until 2 o'clock tomorrow afternoon. (Whereupon, at 12:58 p. m., the committee recessed, to reconvene at 2 p. m., Tuesday, April 29, 1958.) LONG-RANGE PROGRAM FOR MINERALS INDUSTRY TUESDAY, APRIL 29, 1958 UNITED STATES SENATE, SUBCOMMITTEE ON MINERALS, MATERIALS, AND FUELS, OF THE COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, Washington, D. C. The subcommittee met, pursuant to recess, at 2 p. m. in room 224, Senate Office Building, Hon. James E. Murray (chairman of the full committee) presiding. Present: Senators Murray, Bible, Malone, Dworshak, Allott, and Watkins. Also present: Robert W. Redwine, assistant counsel. The CHAIRMAN. The committee will come to order. Mr. SEATON. Thank you, Mr. Chairman. The CHAIRMAN. We have a few questions to ask of you. STATEMENT OF HON. FRED A. SEATON, SECRETARY, DEPARTMENT OF THE INTERIOR, ACCOMPANIED BY ROYCE A. HARDY, ASSISTANT SECRETARY (MINERALS RESOURCES), DEPARTMENT OF THE INTERIOR-Resumed Mr. REDWINE. Mr. Secretary, I would like to hand you a series of nine questions that the chairman would appreciate your submitting written answers to for the committee files. Mr. SEATON. We will be glad to do that and we will supply them to you in short order. Mr. REDWINE. Mr. Secretary, going back to the plan that you submitted yesterday: Can a captive producer participate in this program and on what basis? Mr. SEATON. I do not think I am in a position to answer that at the moment. It is one of the details that we are working out for the legislation. I think if I may, I would rather delay an answer to that until we get that bill up here which will be very shortly. As you know, at least as well as I, it is a difficult problem. Mr. REDWINE. Then, Mr. Secretary, what will be in the bill to prevent a large producer from breaking the market by drastic price cuts and still participate in the program? Are there safeguards being written into the legislation along those lines? Mr. SEATON. Well, in the first instance, we have arranged, in our thinking at least, an equitable distribution of the stabilization payments within the industry which would encompass among other things necessary limits on each participant to afford a fair opportunity to the small as well as the large producer. Now, in specific reply to your question, I must say, so far as I am concerned and I cannot here now speak for Secretary Hardy or others that hadn't entered my mind, because, offhand I do not quite see where any domestic producer would have anything to gain by demoralizing the market in which he himself is involved. If he did it arbitrarily, the net result would be a further burden on the domestic stabilization plan. And everyone who was competing with him, whether he was competing on a large basis or small basis, would be afforded exactly the same amount of relief in the domestic stabilization plan. So, I do not see where anybody gains anything to get himself a very bad name. Mr. REDWINE. Well, Mr. Secretary, let's take a hypothetical question. Let's take a domestic copper company that is not integrated at all— that is selling only on the American market. What would prevent it from cutting the price, say, 17 or 20 cents a pound? It would not have anything to lose on it, because you would make up the difference under this proposal, would you not? Or are you going to put a floor under it? Mr. SEATON. Of course, Mr. Redwine, I think the most powerful force that you have in this country, with all respects to the Congress and the executive branches, is the force of public opinion; and a mining company which engaged in a practice like that, I think at the very least, would get itself in very ill repute with the public. I should think both the Congress of the United States and the Executive would have plenty to say about that in the succeeding session of Congress. I would hate to believe that anybody would do that knowingly and arbitrarily. Mr. REDWINE. Mr. Secretary, I would like to point out a figure to you that is classified and then ask a question. Recently in an executive session, the ODM advised the committee that in the case of metallurgical fluorspar that it was their feeling that the American production approximating that figure should be maintained as a part of the mobilization. Would you have any objection to the metallurgical fluorspar being included in your stabilization plan at a figure approximating at a tonnage approximating that figure at the same price that is adopted for acid-grade fluorspar? Mr. SEATON. Well, Mr. Redwine, in our testimony yesterday, so far as metallurgical-grade fluorspar was concerned, we made this statement which we believe to be true: That domestic production of metallurgical-grade fluorspar continues to be at a satisfactory level. Under Defense Production Act authority the General Services Administration is still making contracts with the domestic producers for delivery to the stockpile. Then we went on and recited the further fact that the Bureau of Mines had programed approximately $143,000 in 1958 and it is about the same in 1959, for research and problems related to fluorspar. Now, in my own thinking I am not conscious of a problem in metallurgical-grade fluorspar which is comparable to the problem which is evidently before us in the case of acid-grade fluorspar. Therefore, we do not at this time recommend a similar program for the metallurgical-grade fluorspar. Now, I would like to take refuge in our opening statement, a portion of the statement of yesterday, that this program is designed to the needs of today, and we hope the needs of tomorrow for at least a 5-year period. But we have tried to make very plain our intent to reexamine the program as we went along in the light of experience and we expressed the hope-because that is all it could be, you seethat Congress would do that also. Should we get, then, an occasion which made metallurgical-grade fluorspar pertinent to the program, we, of course, would have no objection to a serious study of its inclusion. Mr. REDWINE. Mr. Secretary, without the adoption of this stabilization program you have presented, what percentage of the tonnage of each of the metals involved do you expect our mining industry could produce without adoption of this program? Mr. SEATON. Mr. Redwine, I am afraid that is a question that we would like to have an opportunity to check into and furnish you on the facts later. noon. Now, it may be we shall be in a position to do that yet this after- Mr. REDWINE. Yes. Mr. SEATON. If this program were not adopted-Secretary Hardy says the only thing he has with him are the current production figures. Mr. REDWINE. That production is rapidly or gradually dropping off; is it not, Mr. Hardy? Mr. HARDY. I believe the coper-production figure has been holding rather steady, Mr. Redwine. I cannot say as to the lead and zinc, whether that is on the decline at the moment or not. Senator BIBLE. Do I understand that if copper production holds at the present level for January, February and March throughout the year that it will approximate a million tons at the end of the year? How will the stabilization plan help in that respect? Mr. HARDY. It will stabilize the price. And we believe that the stabilization plan with the stabilization price will enable a great many of the copper companies to resume some of their work such as exploration and research which evidently they have cut back at the present time as evidenced by the decrease in employment in that industry. Senator BIBLE. Approximately how many copper producers are there in operation today, roughly? Mr. HARDY. May I look in my book, please? Senator BIBLE. Certainly. Mr. SEATON. While he is looking that up, Senator Bible, I should like to add that even though copper production now is running for the first quarter of the year in the magnitude of a million tons of production for the year, we think there is some evidence to believe that if the depressed copper market prices were maintained over the whole year that you might find a falling off in that. Senator BIBLE. I was trying to elicit information as to how your stabilization plan works, Mr. Secretary. |