Mr. HARDY. In regard to what you said about tungsten not being a special case, it would seem to me that it is where we are producing tungsten under the program of 3 and 4 times the magnitude of that that was consumed. It would seem to me that would make it a rather special case. Senator MALONE. It was the one that we had that special price on. No such special price was on lead and zinc. What you are trying to say is that you want to preserve these deposits. You do not want to encourage the lead and zinc to go above about a third of the market. What is the consumption now? Mr. HARDY. Of which metal? Senator MALONE. The consumption of lead. Mr. HARDY. About 1,200,000. Senator MALONE. You are giving the Americans about 30 percent of the market? Mr. HARDY. No, sir; about half of the market in newly mined lead. Senator MALONE. It is 350,000 tons. Mr. HARDY. A third of the total comes from secondary lead. Our 350,000 tons would represent approximately a third of the total. Senator MALONE. I should have separated it. The consumption of primary lead is what I meant. Mr. HARDY. We have roughly about half of that with this 350,000. It would be closer to half with the limitation. Senator MALONE. What you are doing is dividing the markets with foreign nations about equally. You know they are not going to produce beyond where they get the bonus. I would not try to evade it because I have all the time I need. I have waited now for that. Mr. HARDY. Going back to 1951, the average productionSenator MALONE. I am not asking you that. You say now that you are paying a bonus up to about half of the domestic use of primary lead? Mr. HARDY. That is right. Senator MALONE. I am asking you this specific question: When you quit paying the bonus, they will quit producing; will they not? Mr. HARDY. We have production going on at the present-day prices. Senator MALONE. You really do. But the testimony shows that some of them are running at a loss, hoping that Congress will get their feet on the ground and do something about it. Mr. HARDY. Some of them are running at a loss and some of them are running at a modest profit at this time. Senator MALONE. How much production would you say is running at a profit now? Mr. HARDY. Substantially most of the current production would be on the profit side. Senator MALONE. That does not coincide with the evidence before the committee. I do not know where you get your advice. You have a case here as in tungsten last year. A man from Philadelphia who was very prominent, in his testimony before the House committees, a producer and a consumer-the evidence shows that he produced and sold to the Government and consumers both on the world price. He was in the tungsten-carbide business in Pennsylvania. Mr. Phil McKenna. Did you ever hear of that outfit? Mr. HARDY. Yes; I am familiar with the McKenna Metal Co. Senator MALONE. Are you familiar with the position that he took in the House in his testimony? Mr. HARDY. Yes; I am. Senator MALONE. In other words, he did not want a bonus for his production. He had shut down his mine when he could get the metal cheaper from a foreign source than he could produce. Then he did not want a tariff or a bonus. But when it went above that price of the foreign nation, he operated his mine. You are familiar with all this business; are you not? Mr. HARDY. Yes, sir. As I recall, Mr. McKenna opposed the additional purchases to the stockpile on the basis that the stockpile levels were too high. I believe, in substance, that was his testimony. Senator MALONE. The facts are that he was buying his metal at a foreign price and was selling his metal to the stockpile as long as he produced when the Malone-Aspinall Act was in operation. Mr. HARDY. Apparently the economics of the situation favored that. Senator MALONE. Do you not think that the same economics will apply if you go into a program that is practically the same, in effect? Mr. HARDY. I do not follow your reasoning on that, sir. Senator MALONE. What difference do you think there would be in appropriating money for a bonus to keep our own people in production and in a fixed price for a stockpile? What difference do you think there is in principle? Mr. HARDY. I envision quite a difference in the principle. In the case of the domestic stabilization plan, we are supporting a sale into commercial channels. In the other instance that you have pointed out, it was purely a purchase type of program. Senator MALONE. It is necessary to make the sale before they could collect the difference? Mr. HARDY. That is right. Senator MALONE. Now I will ask you the question, since it seems you will answer here: Suppose it is offered to the consumer-any of these metals and the world price is whatever it happens to be at the time; do you think that consumer have the gumption to see if they would lower their foreign price before he made the domestic purchase? Mr. HARDY. Senator, I think, historically the commerce of metals follows well-established and defined patterns, such as the normal quoted price and things like that. I think those are the procedures that would govern. Senator MALONE. I would merely call your attention that for 24 years we have been juggling this thing around under a free-trade basis and none of those principles have governed. I do not think you have any idea that they have. That is the reason you are trying to get a new formula, and the new formula, in my opinion-and I want to go. on record now-will not work any better than the other. The reason I am going to join in this bill is because you have recognized publicly that in order to keep a domestic industry going—note, I say a domestic industry-that industry has to have in some manner the difference of the world cost of production and the world price and the domestic cost made up through either a bonus or payment of some kind, a fixed price or a tariff. You have recognized that principle. I do not expect you to answer what you would like to have done on these minerals. But there are 5,000 other products that are in the same position, machine tools, and so on, and they are going out of business. Now, are you familiar with a bill or the principle that the State Department has advocated continually and may pass someday, that the taxpayers would put up the money to retrain workingmen for another industry that was put out of business through the imports of lower cost products. Mr. HARDY. I am not familiar with such legislation. Mr. HARDY. I would be happy to, sir. Senator MALONE. It has been before Congress now ever since you have been here. I think it is going to be necessary to pass it if we keep this up. How many minerals are there in your bill? Mr. HARDY. There are five minerals included in the stabilization plan. Senator MALONE. That does not include copper? Mr. HARDY. That includes copper. Senator MALONE. Then would you mind computing for the record the difference in the cost of the end product, say like tungsten or lead or zinc or columbium-tantalum, fluorspar, that your bonus plan would make in the end product? In other words, if your bonus is $18 on lead or whatever it is-maybe on tungsten, I am not trying to quote any one of them particularly-whatever you make up in each case, would you prepare a table that would show us in general the difference in cost of the end product of the metal that enters into the manufacture? Mr. HARDY. I would be very happy to do that, Senator Malone. Senator MALONE. I think you will find it hard to define in the end product. Now, I would like, Mr. Chairman, to introduce into the record, since we have talked about bauxite and aluminum for a little while, a table on the production and imports for consumption and percent, 1955-56, of aluminum metric tons. Senator BIBLE. The table will be introduced at this point in the record. |