Nation, including the concentration possibilities of the large reserve of lowgrade ores of the Clinton sedimentary formation of the southern Appalachians, in an attempt to achieve conservation of ore reserves and maximum furnace efficiency in reduction of ore to steel. However, the steel industry in the southern Appalachian area has found it to be more efficient and economical to blend high-grade foreign ores with the regional low-grade. In this connection, it should be noted that industry will develop minerals in those areas where it is found to be economically feasible, and industry will tend to convert its activities to other lower grades of ore as new technological discoveries reduce costs of production, regardless of the abundance of a particular grade ore in a particular area. For example, technological advances in the reduction of lowgrade taconite have caused a shift to the mining of that grade ore. Such conversions will continue as new methods reduce costs. Steel companies themselves are doing much to insure an adequate supply of iron ore for their respective blast furnaces for many years to come, and the economic forces of supply and demand will foster a continued development and improvement of the plants treating low-grade ores.

The Bureau of Mines and the Geological Survey have conducted surveys and have been studying for many years various aspects of the utilization of iron ore and coking coal of the southern Appalachian area. These agencies have issued, and will continue to issue, many publications containing the results of these studies. Southern universities have made similar studies and have published detailed reports of the results. Such information which is presently available is of a sufficient comprehensive nature as to preclude the need for the further survey which S. 2077 would require.

It is our view that the selection of a particular commodity, or a particular geographical area, as this bill proposes, without reference to the factors which determine its national importance in the minerals program of the Government, would contribute little to the orderly conduct of the work necessary to discharge the Federal Government's responsibilities in the field of mineral resources. This is especially true with respect to surveys now in progress regarding the available supplies of iron ore required for national-defense purposes. A study having national significance cannot be confined to any one region or fraction of the industry. Passage of this bill would set a precedent for similar action, with respect to other commodities and other areas. The end result might well be the introduction of a large number of similar bills the enactment of which might tend to disrupt rather than to improve orderly mineral research and development.

The Bureau of the Budget has advised that there is no objection to the submission of this report to your committee. Sincerely yours,

ROYCE A. HARDY,

Assistant Secretary of the Interior.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET, Washington, D. C., March 11, 1958.

Hon. JAMES E. MURRAY,

Chairman, Committee on Interior and Insular Affairs,

United States Senate, Washington, D. C.

MY DEAR MR. CHAIRMAN: This is in response to your request for the views of the Bureau of the Budget with respect to S. 2077, 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.

The Secretary of the Interior, in his report on this bill, states that legislation which selects a particular commodity, or geographical area, is generally undesirable and presents additional reasons leading to a recommendation that the measure not be enacted. This Bureau concurs in the views set forth in that report.

Accordingly, this Bureau recommends against enactment of S. 2077.

Sincerely yours,

ROBERT E. MERRIAM, Assistant Director,

Senator MALONE. In the International Monetary Fund report dated December 20, 1945, there are stated the purposes of the International Monetary Fund, articles of agreement of the International Monetary Fund, and on pages 3 and 4 of this pamphlet, article 4, par values of currency, and I ask that pages 3 and 4 be made a part of the record, if it is possible, following the discussion yesterday.

The CHAIRMAN. I think that can be done.

Senator MALONE. I will submit it for the record.

Now, it is very clear here that no member, and we are a member of the International Monetary Fund, may change the price of gold without the consent of the organization, which was not made clear yesterday.

(The excerpt referred to by Senator Malone is as follows:)

"ARTICLE IV. PAR VALUES OF CURRENCIES

"SECTION 1. Expression of par values:

"(a) The par value of the currency of each member shall be expressed in terms of gold as a common denominator or in terms of the United States dollar of the weight and fineness in effect on July 1, 1944.

"(b) All computations relating to currencies of members for the purpose of applying the provisions of this agreement shall be on the basis of their par values.

"SEC. 5. Changes in par values:

"(a) A member shall not propose a change in the par value of its currency except to correct a fundamental disequilibrium.

"(b) A change in the par value of a member's currency may be made only on the proposal of the member and only after consultation with the fund.

"(c) When a change is proposed, the fund shall first take into account the changes, if any, which have already taken place in the initial par value of the member's currency as determined under article XX, section 4. If the proposed change, together with all previous changes, whether increases or decreases

"(i) does not exceed 10 percent of the initial par value, the fund shall raise no objection, (ii) does not exceed a further 10 percent of the initial par value, the fund may either concur or object, but shall declare its attitude within 72 hours if the member so requests, (iii) is not within (i) or (ii) above, the fund may either concur or object, but shall be entitled to a longer period in which to declare its attitude."

There were 44 signatories originally and at the present time, in 1958, 65 nations are members. I mention this to show how closely our own currency is tied to the currency of virtually the entire world with the exception of the Soviet. It has been frequently suggested that we raise the price of gold in this country, but it can be seen that to do so would throw the currencies of practically the whole world into a tailspin. However, the purchasing value of our paper dollar is constantly depreciating. In the case of other nations depreciation is accomplished by increasing the number of units of their currencies to our dollar.

The CHAIRMAN. The next witness this morning is Capt. Garland Peyton, director of the Department of Mines and Geology for the State of Georgia.

Dr. Peyton, will you come forward please?

STATEMENT OF GARLAND PEYTON, DIRECTOR, DEPARTMENT OF MINES, MINING, AND GEOLOGY, STATE OF GEORGIA

Mr. PEYTON. Mr. Chairman, members of the committee, I have prepared a part of what I shall say. I have brought along a map or two. As you know, my name is Garland Peyton, and I am director of the Georgia Department of Mines, Mining, and Geology, which is equivalent to the normal State geological survey.

I feel that my statement before the committee will be intended more as supplemental to that of Dr. Prunty, who has given you such a comprehensive and complete coverage of the region which we are discussing in which the iron ores referred to exist.

Senator BIBLE. Might I interrupt, Mr. Chairman, to ask whether the captain has additional copies of the prepared statement.

Mr. PEYTON. Yes, sir.

Senator BIBLE. I think it might be helpful, if you have a sufficient supply, we can follow it more easily.

Mr. PEYTON. There are some maps in there that you might like to refer to.

It is my feeling that a short discussion of the iron ore deposits found in Georgia, together with our résumé of unsuccessful efforts to produce a dependable estimate and appraisal of our iron ore reserves will point up the need for conducting such a regional survey as that proposed in Senate bill 2077.

During the years in which the Georgia Geological Survey has been active a number of excellent geological publications have been published on the different iron ores known to occur in the State, but in every instance we have been unable to get complete and dependable figures on actual tonnages and actual quality because of the lack of adequate drilling or other types of exploration which would have provided this much needed data.

A number of maps and charts have been incorporated in this brochure. These have been designed to illustrate in considerable detail not only where our different iron ore deposits are located, but the area and extent of such deposits.

(The maps referred to by Mr. Peyton were unsuitable for reproduction and are on file with the committee for reference.)

Mr. PEYTON. In addition, on chart No. 1-and before I proceed I would like to open this and let you see an enlargement of that chart No. 1-but the point of interest is the fact that you will notice the red, irregular lines of relatively narrow thickness and the shaded area which is shown on this map in yellow, on the smaller map in the report you will find that is more or less a lavender color where the yellow is here, but the red is the same-well, the red represents the thin layer that outcrops in a relatively flat, booklike deposit of rocks in which this one horizon of iron ore known as the Clinton red ores occurs, and it is to the yellow areas that I have referred to when I state that when a geologist has written a report on those ores in the past he could see the red was sticking out, much like the filling in a layer cake, but he could not go back into the mountain portion and under the surface of the mountain and have any definite idea of whether the red layer is the same thickness under there or whether it is the same quality of iron and iron content, silica, and so forth, and the only way that that could be obtained, that type of information, would be to either drill it or sink shafts down into the horizon referred to.

In a similar manner the brown iron ores will require drilling in order to prove an overall three dimensional measurement and to obtain samples which may be used to determine the average and quality of the bearing ores.

In the cases of the brown iron ores we have them in two different parts of the State, the northwest portion of the State just south of

the red ores shown on this map, and then again in the coastal plains south of Columbus and Macon.

We know that during World War II and prior to that time, our brown iron ores were sought by the smelters in the Birmingham district because in the first place they contain about 10 percent more iron on the average as metal, they are quite low in phosphorous, lower than the red iron ores are in phosphorous, and they have some manganese in them which in some steelmaking procedures, of course, is essential and desirable.

We know of instances where a few mines have been mined to a depth of more than a hundred feet without reaching the full downward extent of the ore occurrence.

During World War II the Bureau of Mines was directed, I believe, by the War Production Board, to explore some of these deposits and in Hope, Bartow, and Floyd Counties in northwest Georgia, they drilled to a certain extent and in a number of locations they found iron ore where there was no evidence whatsoever of iron ore on the surface.

They tried out a few places where it looked as if the iron ore deposits had been worked out years ago. They had actually been worked down to 25 and 30 feet in depth.

The Bureau went in and drilled those same deposits and extended the depth of the ores to as deep as 60 or 70 feet.

I mention that to illustrate the need for prospecting.

In the case of the third type of iron ores that they are known as magnetic iron ores or magnetite, they occur over a belt which parallels what we call our gold belt in the Piedmont, in Georgia, over a distance of a hundred miles and they lie in a northeast-southwest line that more or less parallels the strike or outcrop of the other ores already referred to.

In the case of magnetic ores we should have some geophysical work done which will reveal, due to the magnetic properties, possessed by these magnetic ores, their existence and even though they might be buried, will point out the areas in which the concentrations appear to be greatest and largest and, therefore, would prove a very good indicator in determining just where prospecting such as drilling or shaft sinking could be conducted.

Our red ores occupy an area or underlie an area of at least 130 square miles. We know that we have approximately 100 square miles of proven brown iron ore area.

We do not know just exactly how wide our magnetic iron ore belt would be, but we do know that it is approximately 100 miles in length. It is our earnest hope that Senate bill 2077 will receive approval and, if it does, the Georgia survey will be more than happy to cooperate to the fullest possible extent, either our staff or by the contribution from our files and publications, or from the laboratory facilities which we have available.

I thank you.

The CHAIRMAN. Senator Bible.

Senator BIBLE. Mr. Chairman, I have only one question. I do not know whether it is proper to direct it to Captain Peyton or maybe it should have been directed to Dr. Prunty.

I have read the undated report from the Department of the Interior. I understand that from Mr. Redwine, it was received today. This was received today?

Mr. REDWINE. Yes.

Senator BIBLE. It appears to be undated, but it was received by us today.

Mr. REDWINE. Yes.

Senator BIBLE. I do not know whether you are familiar with this or not, Captain, but in fairness to the delegation making the presentation on behalf of the bill that you should have the opportunity of answering this one paragraph where they indicate their objections to the bill.

I think that it is no more than fair. They say this and it is very short, and I would ask you for your comments and possibly Dr. Prunty could join in on it. They say this, and I think this comes to the heart of their objection:

It is our view that the selection of a particular commodity, or a particular geographical area, as this bill proposes, without reference to the factors which determine its national importance in the minerals program of the Government, would contribute little to the orderly conduct of the work necessary to discharge the Federal Government's responsibilities in the field of mineral resources. This is especially true with respect to surveys now in progress regarding the available supplies of iron ore required for national defense purposes. A study having national significance cannot be confined to any one region or fraction of the industry. Passage of this bill would set a precedent for similar action, with respect to other commodities and other areas. The end result might well be the introduction of a large number of similar bills the enactment of which might tend to disrupt rather than to improve orderly mineral research and development.

I call that to your attention. I do not know that there need be an answer right at this time, but I think it might be helpful for the record to be kept open for the purpose of permitting those of you who are vitally interested in this bill to suggest some type of answer.

Mr. REDWINE. Mr. Chairman, I have just discussed that with Dr. Prunty and his associates. I understand that Senator Talmadge and this group will answer this report fully and they will furnish us a copy of their opinion.

Senator BIBLE. I think they should have ample opportunity to answer it. I think you should study it. I do not expect an answer immediately, Captain, but if you could do that in due time, I think the record should be kept open for that purpose.

The CHAIRMAN. Yes; the record may be kept open for that purpose. (Later Mr. Peyton filed with the committee a letter addressed to the Department of the Interior by Senator Talmadge in the above matter, which follows:)

Hon. ROYCE A. HARDY,

UNITED STATES SENATE, COMMITTEE ON AGRICULTURE AND FORESTRY, March 31, 1958.

Assistant Secretary of the Interior,

Department of the Interior, Washington, D. C.

DEAR MR. HARDY: Hon. James E. Murray, chairman of the Senate Committee on Interior and Insular affairs, has furnished me, as sponsor, a copy of your letter of March 17 which recommends that S. 2077 not be enacted.

Your Department opposes S. 2077 on two grounds: First, that the Bureau of Mines, the Geological Survey, and certain unnamed southern universities already have studied and written comprehensively on the subject matter of S. 2077, to the extent that further study is neither necessary nor desirable;