Mr. SEIBERT. The steel companies or the ceramics? Mr. SEIBERT. $50, f. o. b. Atlantic seaboard. Senator MALONE. You don't make any difference for 93 percent or 97? Mr. SEIBERT. No, sir. Senator MALONE. All right. Now we come back, then, to where the steel companies are not going to pay over $34, it takes 5 pounds out of 2,000 pounds per ton of steel. You figured that at 3 cents. That seems a little high, but I haven't computed it. This is the foreign price really we are talking about, isn't it? Mr. SEIBERT. That is right. Senator MALONE. What would the price have to be to operate the average fluorspar mine in the United States? Mr. SEIBERT. Well, the average mine in the United States today cannot produce a gravel grade Senator MALONE. It doesn't matter about that. Tell me now what they could produce their ore for. Mr. SEIBERT. It would depend upon the width of your vein. Senator MALONE. I suppose so, but don't you have some general knowledge? Mr. SEIBERT. Yes. I would say that you could mine and deliver to the surface and mill a metallurgical grade, provided you had the high enough grade ore in your vein, put it on cars at your mine in the neighborhood of $20 a ton. Senator MALONE. What grade? Mr. SEIBERT. Metallurgical grade, 70 effective minimum guaranteed. Senator MALONE. This confuses me a little. That is cheaper than the world price. Mr. SEIBERT. Well, I told you if you had the right kind of vein and proper width, you should be able to mine and mill a metallurgical grade material and put it on cars for $20 a ton. Senator MALONE. Why are they shut down? Mr. SEIBERT. Well, sir, they are shut down because they are highly complex ores. They require the mining of 4 tons of material, or 32 tons of material, to produce 1 ton of acid grade and most of your Amercan mines cannot produce metallurgical grade because of the complex characteristics of the ore. Senator MALONE. You cannot high-grade it? Mr. SEIBERT. No. You can now, and they are importing some high-grade Mexican fluorspar in order to bring up your lower grade American spars to meet that minimum guarantee of 70 effective units of calcium fluoride content. Senator MALONE. As long as the steel companies don't want the acid grade, they only want the regular grade and you testified to that, at 70 percent? Mr. SEIBERT. Yes, sir. Senator MALONE. Of what interest would it be to them to upgrade it to 97 percent, except if it was in a foreign country to get it in at a lower duty? Mr. SEIBERT. I don't believe the steel companies would pay any more for 97 than they would pay for 70. Senator MALONE. Then you just testified they could not make a 97. But why should they? Mr. SEIBERT. Let's stick to metallurgical grade. We are talking about metallurgical grades. Senator MALONE. No; I am not. I am talking about the steel companies. Mr. SEIBERT. All right. The steel companies are only interested in the metallurgical grade. Senator MALONE. I am sorry. Go ahead. Mr. SEIBERT. All right. The steel companies specify a minimum of 70 effective units of calcium fluoride content. Many of your American mines cannot make a product of 70 effective units of calcium fluoride content and have been importing higher grades Mexican ore in gravel form in order to bring up, blend and bring up, their domestic production in order to meetSenator MALONE. Is there any objection to that? Mr. SEIBERT. None at all. Senator MALONE. Then tell me what price they would have to get for their ore, no matter what process they have to go through in order to sell it. Mr. SEIBERT. Well, I believe your American price today is f. o. b. Rosiclare. Senator MALONE. Where is that? New Jersey? Mr. SEIBERT. In southern Illinois. I believe it is somewhere in the neighborhood of $38 per net ton of 2,000 pounds. Senator MALONE. Of what grade? Mr. SEIBERT. Minimum 70 effectives. Senator MALONE. $38. I think that is the information I have here, $38.50 f. o. b. shipper's point. That would be Rosiclare, Ill. That doesn't seem to be very much different. You gave me $34 for the foreign ore, didn't you?" Mr. SEIBERT. That is right. Senator MALONE. That is duty paid? Mr. SEIBERT. Yes, sir. Senator MALONE. And if it comes in under 97 percent it pays $7.50 and if it comes in over that it is $1.87. Mr. SEIBERT. That is right. Senator MALONE. You don't see anything peculiar about shipping in a lower grade, a less valuable ore, at a higher duty, do you? Mr. SEIBERT. Well, my contention is that the higher duty ought to be reduced to the lower duty. Senator MALONE. I know what your contention is, but do you want to answer my question? Mr. SEIBERT. Well, it is a question that has been asked me many times, why does a high-grade ore bear such a low duty in respect to the low ore? Senator MALONE. What is your answer for the record? Mr. SEIBERT. Well, for the record, the reason for that condition was the fact that historically the American producers could not produce a sufficient quantity of acid-grade fluorspar and had no objection to the importation of high grade ores. Senator MALONE. If that condition has passed and they do have an objection, what do you say? Is there any reason why it should not be changed? Mr. SEIBERT. Well, sir, I am definitely of a belief that we should have reciprocal trade. Senator MALONE. What do you call reciprocal trade? Mr. SEIBERT. Well, I believe that the United States if it wishes to sell and export had to buy products of foreign countries and equip them with United States dollars to buy American exports. Senator MALONE. I am fully familiar with that argument. Go ahead. Have you any others? Mr. SEIBERT. Also I believe that we should reserve or preserve our sources of strategic materials particularly where all of the forecasts indicate that we will be out of fluorspar in the next 10 years, or thereabouts. Senator MALONE. Are you familiar with some forecasts that were made in 1945 by Mr. Harry Dexter White? I don't know whether you ever heard of Mr. White. He was one of our best traitors. I might read you what he said. It has been a little source of surprise to me, since arriving in the Senate, why so many good American, citizens agree with a traitor. This is a letter from Harry Dexter White, memorandum, obtained from the Princeton University, Library and Files of the Treasury Department, March 7, 1944. He said of petroleum, in 1944, that we had 13 years' supply on the basis of our use at that time, and the use has probably doubled now and we have maybe 100 years in sight. Mr. SEIBERT. Of what, sir? Senator MALONE. Oil. Manganese, a 3-year supply. We have gone all these years mining a little of it, quite a little, as a matter of fact, in my own State. We had a 3-year supply. We have ample evidence that with a tariff the difference in wages and the cost of doing business here and in the chief competing country, you would have hundreds of years' supply. I will not go into detail, unless you would like it. Tungsten, we had practically no supply. Well, we had about 20 years. Mr. Ickes spent all of his term, however long he was in there trying to prove we had no tungsten at all. Under the Malone-Aspinall Act, that fixed a price that made the difference in the wages and taxes here and in the chief competing country, the nearest we could estimate it, and we are producing twice as much within 2 years as we used annually in the United States, and now have more of it in sight than ever. Mr. SEIBERT. Senator Malone, may I ask for a 3-minute recess? Senator MALONE. Yes, we will take a 3-minute recess, sir. Before you leave, you are familiar with all of these things, aren't you? Mr. SEIBERT. Yes. (Brief recess.) Senator MALONE. The hearing will again be in order. Along the lines of us running out of these minerals, I want to read you a paragraph that almost destroyed this country. This is in Harry Dexter White's statement. He jumped out of a window or something just before he was to appear before a committee down here, which probably was just as well for everybody. I will read the rest of it: Zinc, 8 years' supply. Remember, this was at the rate we were using these minerals in 1944, probably one-half of or less than the rate we are using them now and have more than we ever had Chrome, no record, less than 1-year supply. We have more chrome in sight today than ever in history— Mercury, 2 years' supply. We have become self-sufficient in that after World War II. I am going to read all of this to you, because I think it should be a lesson to you: Subject: Proposed United States loan to the U. S. S. R. To: Secretary Morgenthau. From: Mr. White. The following memorandum is in reference to your request that the feasibility of the extension of a large credit to the U. S. S. R. in exchange for needed strategic raw materials be explored. Your opinion that such an arrangement might well be feasible appears to us to be supported by our study of the possibilities. 1. Recent confidential reports confidential reports of course, to everybody except the ones that ought to know them on our raw material resources prepared for the Under Secretary of Interior disclose an increasing dependence of the United States on foreign sources of supply for strategic raw materials because domestic reserves have been seriously diminished or virtually depleted. 2. The following table indicates the extent of United States current reserve supplies for some important strategic materials which can be produced in quantity in the U. S. S. R., in terms of prewar and current war, domestic requirements. I just read you what this distinguished gentleman said about it (continuing): 3. It is evident from the above table that, although our domestic reserves of petroleum, tungsten, and zinc may suffice to meet consumption requirements for the next decade, they will be almost entirely dissipated by the end of that period. A decade, a 10-year period, 1954. We have been out of all of these, petroleum and all the rest, for 4 years according to Mr. White (continuing): In the case of manganese, chrome, mercury, and lead our resources are too limited to satisfy even probably domestic requirements of the next 10 years. This was 1944 that he said all of this (continuing): The number of strategic materials for which our reserves are very low and which can be produced in the U. S. S. R. is greater than indicated above, and includes platinum, vanadium, graphite, and mica. You are familiar with the fact that vanadium has been produced in oversupply for domestic use for many years? You are not familiar with the fact that it is a byproduct of uranium and is running out of our ears, and we can't sell it at all? (Continues reading :) 4. Although our reserves of strategic materials could be somewhat expanded, given an increase in price to make possible further development of marginal resources, the necessity of growing United States dependence on foreign sources of supply in order to satisfy anticipated postwar industrial requirements and to maintain adequate security reserves, is inescapable. You understand, don't you, that when people talk of marginal resources in the United States, they mean where they pay over $2 a day for labor. They will never get anybody on the Senate floor to say they are for paying $2 a day to the American laborer. Maybe you would like to say it. I am not going to read the rest of this, but it is at page 370. Then as a result of that memo, Mr. Morgenthau sent the same memo, almost word for word, to the President of the United States on January 10, 1945, only he asked that we give Russia $10 million instead of Harry Dexter White's $5 million, to furnish us with these materials, obviously becoming dependent on Russia for things that you could not fight without and could not have peace without. Do you want to add fluorspar to it? Mr. SEIBERT. Well, sir, I have been in your State, Nevada. I have examined several fluorspar deposits in Nevada, none of which, in my opinion, were commercial. I do know that the Kaiser Alminum Co. had an operation in northern Nevada. They have run out of ore and had to shut down their mill. Senator MALONE. You understand Nevada is not under consideration here. It is just talking about fluorspar. Mr. SEIBERT. I know. I am talking about fluorspar. Senator MALONE. I am talking about the United States of America. I am not talking about Nevada. Mr. SEIBERT. Well, I have been in Arizona, I have been in California, looking for fluorspar. I have not seen a commercial deposit that would be run economically under present pricing conditions. And it will be a number of years before we will arrive at a price for fluorspar that will permit these distant sites to become operating economically. Senator MALONE. What do you think we would arrive at in a number of years! Mr. SEIBERT. Well, sir, I believe if your curve of increase in consumption of fluorspar keeps up at the rate it has been going over the last 5 years, that there may be a world shortage of fluorspar. I believe that your foreign mines supplying the imported material now from Spain and Germany and Italy may very well become depleted. Senator MALONE. And Mexico and Canada? Mr. SEIBERT. Well, Mexico, sir, I believe has tremendous quantities of fluorspar. I think Mexico is good for many, many years to come. Senator MALONE. Why, then, do we need to say that we want the world price to prevail? What I am trying to say to you, and that, of course, is what is obvious to every witness here, and some of them are mellowing a little with age, is they want a tariff on what they produce in this country and they want free trade on what they have to sell. Some of us believe you have to have a principle, and anything produced in this country that does not need a set price or a tariff or a duty, as the constitution calls it in article I, section 8, that equals more than the difference in wages and the cost of doing business here and in the chief competing country, if that is Mexico or if it is Spain, is not a subsidy on that material. |