Mr. LEAVY. Your group is about a thousand of the approximate 5,500? It represents about 70 percent of the output? Mr. GANDY. Yes, sir; about 70 percent of the commercial outpat DEVELOPMENT OF SOUTHERN MINERAL INDUSTRIES Mr. GANDY. I talked to Congressman Starnes and understand the the Congressman made a statement this morning having to do with s requested increase in funds for the Tuscaloosa station. Mr. O'NEAL. That is correct. Mr. GANDY. The bituminous mining companies in Alabama have requested that we file a statement for them. It was prepared at the request of the president of the University of Alabama to enumerate the essential problems which could well be undertaken in order to utiliz the facilities of the new experiment building to the benefit of th mineral industries, in the Southeast in particular and the Unite States in general. I would like to file this statement and to ask that i receive your most serious consideration. Mr. O'NEAL. Thank you very much. We will be glad to have it. Mr. DANDY. Thank you, sir. Hon. EDWARD T. TAYLOR, DEBARDELEBEN COAL CORPORATION, Chairman, House Appropriations Committee, House Office Building, Washington, D. C. DEAR MR. TAYLOR: I am enclosing a statement in support of the need f increased appropriations for the Southern Experiment Station, United Stat~ Bureau of Mines, located at the University of Alabama. This statement was prepared at the request of the president of the Univers of Alabama to enumerate the essential problems to be undertaken in order utilize the facilities of the new experiment building and to benefit the mine industries of the Southeast in particular and the United States in general. Sincerely yours, MILTON H. FIES PROPOSED APPROPRIATION FOR DEVELOPMENT OF SOUTHERN MINERAL INDUSTRIES Completion of the new Bureau of Mines southern experiment station at the University of Alabama, Tuscaloosa, Ala., has provided much needed facilities for the development of industries based upon the widespread mineral depos of the Southern States. Of the 12 experiment stations established and operate by the United States Bureau of Mines, the Tuscaloosa station is the only one the Southern States. Increasing industrial development in the South is exemp fied by the rapid growth of the paper and textile industries, the establishment large chemical manufacturing plants and petroleum refineries, all of which es for increased use of nonmetallic minerals for building construction and industris purposes. Also the southern coal, iron, and steel industry is called upon to becor an important part in the general industrial expansion of the South. It is agreed that the United States as a whole is better off with the spreading out industrial work in various parts of the country than with undue concentration of industries in a few places. The new southern experiment station building, with its 20,000 square feet of floor space, and its splendid equipment for ore dressing, coal washing, s nonmetallics research, is available for the much needed research work on souther minerals. Situated on the University of Alabama campus, it is in a position t obtain technical advice, assistance of graduate students, library facilities, other advantages provided by a well-rounded engineering and scientific univer sity. All that is needed is the appropriation necessary for conducting this work The present staff of four technologists and appropriation of $16,500 is utterly inadequate to cope with the problem confronting this station. One hundre thousand dollars additional appropriation is required to carry out a well-rounded ogram for the development of the southern mineral industries. Approximately 0,000 of this appropriation should be devoted to the nonmetallic minerals, 5,000 to coal, and $25,000 to iron ores. Extraction, preparation, and treatment of nonmetallic minerals, $50,000.-The outhern States contain numerous deposits of clays which, if properly purified, uld be used in place of those now being imported for pottery, decorative tile, d other high-grade uses. Imports of such special clays totaled over 200,000 ns during our worst depression year, and this amount rose to 500,000 tons in osperous years. A new method of purification by froth flotation recently has en tried on some of these clays, and it gives great promise of removing these purities, thus opening the possibility of building up new southern industries. There are, also, excellent prospects of applying flotation, fractionation, and emical treatment methods to purification and the preparation of clays for the anufacture of high-grade building brick, title, and other structural materials. he rapid development of the manufacture of paper and paper products from uthern pine points to a new field for clay fillers for paper. This should be anufactured from the local clays. In addition to clays there is a wide variety of other southern minerals which uld be utilized, if methods were developed for their extraction, treatment, and arification. Outstanding examples of needs along these lines are the following: (A) Removal of iron stains, and other discoloring materials from glass sands, om feldspar needed for pottery; from kyanite that is to be used for porcelain ad refractories; from clays that are to be used for the production of lithium salts nd in making special glasses; and for barite that is to be used in paints and for hemical purposes. (B) Separation of associated minerals by the application of heat and electricity order that these may be used for industrial purposes. There are large southern eposits in which quartz and feldspar are associated in such a manner as to be seless. If the quartz and feldspar can be separated, then each becomes useful. he same holds true with respect to spodumene associated with feldspar in North arolina, and with kyanite associated with quartz in the Carolinas, northern eorgia, and in Tennessee. Mica and silica are likewise associated in numerous outhern States, and the increasing demand for beryllium makes it desirable to nd a method for concentrating any beryl which occurs in the Southern Appalahians. (C) Removal of sand and clay from southern diatomite. Here again, the new rocess of froth flotation offers promise for obtaining a marketable material which 3 in great demand for the purification of vegetable and mineral oils and as an dditional agent for canning. At the present time all diatomite used in the eastern nited States comes from California. There are deposits in Florida and other outhern States which, by proper purification methods, might find considerable ise. Coal preparation, $25,000.-Southern coals present unusual problems in washing and preparation for the market. The run-of-mine coal contains slate, clay, and ther noncombustible impurities. It is an economic waste to transport this ashorming material, and it causes fuel loss to the consumer due to interference with proper combustion. Fortunately, this noncombustible material occurs in mall strips and bands in the coal beds. The coal itself is quite pure. Methods of washing with water, and treatment with air, have been developed whereby these mpurities can be removed. The exact method of treatment must be worked out for each particular coal bed. For this reason, much research work is required to develop the best method of washing and treatment for the different coals. Much of this kind of work has been done by the Bureau of Mines, either at its Northwest Station at Seattle, Wash., or at the Southern Experiment Station at Tuscaloosa. However, two men, which comprise the present staff, can do very little in a large coal field. The problem faced by the station requires a considerably larger staff. Lack of funds has prevented the Bureau doing work on the urgent problems of clarification of washery wastes before disposing of them into streams; on the best methods for removing dust from coal, and treating it to render it dustless for domestic use; on developing suitable methods for briquetting southern slack; on the proper treatment and processing methods for converting waste slack coal into smokeless lump fuel for domestic use; and on a general study of byproducts obtainable from southern coals. Concentration and treatment of low-grade southern iron ores, $25,000.-Comparatively early exhaustion of the high-grade southern iron ores now being used requires that research should be undertaken on the utilization of the low-grade iron ores which can be used in the relatively near future. These iron ores are high in phosphorus and other impurities. No one has re found a practicable method for removing this phosphorus. Research is LEGE on radically new methods of chemical treatment, and also on the possibility of reducing phosphorus in the pig iron, either while the ores are being reduced in th furnace, or in a secondary operation. If this could be accomplished, it d materially increase the area in which southern pig iron could be sold. M Milton H. Fies of Birmingham, in his address at the dedication of the new budde of the Southern Experiment Station, Bureau of Mines (I. C. 6903, The New Bureau of Mines Southern Experiment Station at the University of Alabam Tuscaloosa, Ala.), listed the following problems requiring study with respect to iron industry: A method of sintering or nodulizing the fines so as to avoid the loss in flue Some practical and economical method of concentrating the low-grade red s of the Birmingham district. More detailed surveys of strata overlying the ore measure to definitely deermine the course and area of the water-bearing strata in order to recover, by u ground mining, a larger percentage of the high-grade ores, thereby conserving F of the most important minerals of the district. Research work on blast-furnace slag to determine what quality of wool early made in the South. A product of this type is coming into general use in the Net: for insulating material in building of all types and for other uses. Undoubted). a large market could be had for this product provided it is made equal in qua to the insulating material made from Indiana limestones. Some practical and economical method of reducing phosphorus in pig iron, eithe while ores are being reduced in the furnace or in a secondary operation. If t could be accomplished, it would materially enlarge the area in which southern 74 iron could be sold. The effect of properly sizing the red hematite ores of the Birmingham distric upon their rate of reducibility in blast furnaces. A study of the effect of zinc oxide on blast-furnace lining. A study of the effect of grain size of pig iron upon the resultant castings. The effects of more intimate mixing of blast-furnace raw materials. A study of the possibility of the economic recovery of potash from blast fur gases and flue dust. In the manufacture of steel the following problems offer a field for research: Study of the recovery of phosphorus in the form of ferrophosphorus from ope> hearth slags. National value of Southern Experiment Station investigations. In calling atte tion to the research needed for the development of southern mineral industries it must be kept in mind that the results of this research are of national value While the work is done on southern coals, iron ores, and nonmetallic miner the discoveries made, and the procedures developed are in most cases valuso to minerals occurring anywhere in the United States, and in order to insure this national utilization, of this work the Bureau of Mines follows a policy of includir: some work on materials from other places in the United States in order to dra comparisons, and to make the knowledge generally available. STATEMENT BY PAUL E. HADLICK, SECRETARY AND COUNSEL NATIONAL OIL MARKETERS' ASSOCIATION MONTHLY FORECASTS OF DEMAND FOR OIL Mr. HADLICK. Mr. Chairman and gentlemen, ny name is Paul E. Hadlick, secretary and counsel, National Oil Marketers' Association. Mr. O'NEAL. You say you represent the National Oil Marketers' Association? Mr. HADLICK. Yes, sir; I do. May I explain before I proceed further, that the National Oil Marketers Association is a group of independent oil marketers and dealers. Mr. LEAVY. When you say "oil" do you refer to gasoline and to uel oils? Is that what you mean by that? Mr. HADLICK. Yes, sir; that is correct. RESOLUTION ADOPTED BY STATE OF MASSACHUSETTS I have just received word that the Legislature of the State of Massahusetts has adopted a resolution in both the house and the senate. nemorializing this Congress "to repeal certain acts prejudicial to the pil-consuming States and to the nonproducing States. I quote the parts of this "memorial" that pertain to the question under discussion. Whereas the Congress of the United States has appropriated special funds to the Bureau of Mines of the Department of Interior for the purpose of issuing forecasts of market demand for crude oil and renfied petroleum products, and recommended production to come from the respective States: * Resolved, That the Congress of the United States be, and it hereby requested to immediately pass legislation forbidding the Department of the Interior or any other Federal Government department from issuing, in any manner whatsoever, forecasts of market demand of petroleum products or recommended production thereof from the respective States. WHY FORECASTS OF DEMAND FOR MOTOR FUEL AND CRUDE OIL SHOULD NOT BE ISSUED BY THE DEPARTMENT OF THE INTERIOR-STATEMENT BY PAUL E. HADLICK, SECRETARY AND COUNSEL, NATIONAL OIL MARKETERS ASSOCIATION, WASHINGTON, D. C. Mr. Chairman and members of the committee, I am appearing on behalf of the National Oil Marketers Association, an organization of independent oil jobbers, to urge you not only to disapprove any special appropriation to the Bureau of Mines for the work it has been doing in issuing monthly Forecasts of Demand for Motor Fuel and Crude Oil, but to place in the Interior Department appropriation bill as much of a prohibition against this practice as is possible. Such a prohibition might read somewhat as follows: "That no part of this appropriation shall be expended for the preparation or issuance of estimates of motor fuel demand or required crude oil production." I will endeavor to give you the history of these forecasts and our reasons for objecting to their issuance. These forecasts were the outgrowth of the activity of the Department of the Interior in administering the National Recovery Administration Code for the Oil Industry. As you know, the Secretary of the Interior, the Honorable Harold L. Ickes, was Administrator of the petroleum code and he established a petroleum administrative board to assist him. The issuance of these forecasts is an attempt to carry on and carry out some of the benefits of the National Industrial Recovery Act, the benefits accruing to two certain groups in the oil industry, the producers and refiners. The theory of National Recovery Administration was aid for an entire industry and not just parts thereof. The thing that makes these forecasts so objectionable is that they aid the major oil companies to hold their grip on the production and refining of oil without any protection for either the independent jobbers or the consumer. This grip on "supply and demand" means a grip on price. Congressman Pettengill of Indiana in his very splendid book, Hot Oil, says, at page 34: "When we at Washington attempt to balance 'supply and consumer demand, we are, in fact whether we call it so or not, fixing prices by law." The position of the people I have the privilege of representing is serious. They are caught between the upper and the lower mill stones. This is due to the direct competition of the refiners in the marketing end of the oil business, wholesale and retail. Were there no integrated oil companies operating in the marketing branch and were retail prices to reflect true competition for the business on a marketing basis then the only effect of these forecasts would be a rise in the price of petroleum products to the consumer. The independent oil marketer contends that he is today buying in a controlled market and forced to sell in a competitive market. He further contends that the competition in marketing is aggravated by the desire and ability of the integrated oil companies to absorb losses in marketing out of their profits in productive transportation and refining. Let me invite your attention to a short quotate from a prospectus issued by the Texas Corporation on February 5, 1937. It prospectus they quote in full the report of an outside expert. page 77 of this prospectus this expert says: At the bottom » "While both domestic and foreign marketing operations, considered as deņa”ments, have shown losses in each of the years 1930 to 1935, the marketing operstions of the corporation's subsidiaries are, in my opinion, as good as or better ta average good practice in the industry. Costs of marketing are low and the marketing departments, both domestic and foreign, have performed well ther primary function of providing assured outlet for the products of the corporaties subsidiaries and thus permitting them to operate broadly in the other brai of the oil industry." I might point out that the issuance of these forecasts is only one link in th chain of control that has been accorded the major oil companies through Fede legislation. The other links may be briefly summarized as follows: 1. The Connally bill forbidding the interstate transportation of petrole products made from crude oil produced in excess of State quotas (Public, No 14 74th Cong., ch. 18; 49 Stat. 30-35). While this act expires June 16, 1937, b proposing to make it permanent have already been introduced; they are S. 7% and H. R. 5366. 2. The Cole resolution permitting State compacts, i. e., approving an agre ment between the few States that produce crude oil permitting them to contr the production of crude oil (Public Res. 64, 74th Cong., ch. 781; 49 Stat. 939-94. This act expires September 1, 1937, unless extended by the present Congress. 3. The import duty on petroleum products (sec. 601 (c) (4) of the Revenue Art of 1932). While this expires June 30, 1937, a bill (H. R. 88) has already be introduced to increase the rates. It can readily be seen that, knowingly or otherwise, the Congress has esta> lished a system of control of oil through various means that results in a ecter? vation-for-price policy. True conservation certainly wouldn't restrict domes production and imports at one and the same time. And the forecasts of it Bureau of Mines about which we complain provide a blue print for the produces and refiners to follow in this conservation-for-price policy. When the National Industrial Recovery Act was declared unconstitutional t Congress should then have repealed the Connally Act and taken steps to see the the Department of the Interior did not try to carry out some and not all of the theories of the Recovery Act. The first so-called Forecast was not in the elaborate style that they now app It was simply a memorandum for the press (P. N. 102623) for release June ! 1935, giving estimates for the month of July 1935. A copy is attached herew marked "exhibit A." The second Forecast issued July 18, 1935, giving estimates for August 1935 was a similar press release, this time bearing the heading of the Petroleum Admis istrative Board in addition to the usual departmental heading (P. A. B. 104010 a consisted merely in quoting a telegram from Mr. Ickes to Governor E. W. Marland of Oklahoma. A copy of this is also attached marked “exhibit B." The third Forecast, issued August 20, 1935, was officially styled Montil Forecast No. 3 and bore the heading Department of the Interior, United States Bureau of Mines, John W. Finch, director. Similar headings have been used t date. To show you the close way in which these forecasts have endeavored carry out a portion of the N. R. A. plan I quote below the first two paragraphs of this third Forecast which is styled "Forecast of Motor Fuel Demand an Required Crude-Oil Production by States, September 1935": "This report, the third of a series of forecasts prepared by the Bureau of Mines, analyzes the probable demand for motor fuel in September 1935, and contains a recommendatory break-down of required crude-oil production by States for that month. "In making these forecasts, the Bureau has endeavored to adhere to the poliev of estimating motor-fuel demand as closely as possible, in providing for changes in gasoline stocks in accordance with the survey of the late planning and coordina tion committee, which was generally accepted as an accurate and impartial study, and in allowing for as liberal withdrawals from crude-oil stocks as can be justifiol by past experience. In other words, the Bureau's forecasts represent demand irre spective of such factors as prices and probable overproduction in some States. The late planning and coordination committee referred to above was the o industry's code authority that worked with the petroleum administrative board. เย |