Mr. MATHER. Of course I am not speaking of our own. Mr. MATHER. I should say 40 or 50 per cent. Mr. HILL. Under one control? Mr. HILL. Under one control. How much of that 50 per cent is subject to an annually increasing cost charge, a lease charge? Mr. MATHER. A lease charge? Mr. HILL. Yes. Mr. MATHER. A royalty charge? Mr. HILL. A royalty charge, annually increasing. Is it a large proportion? Mr. MATHER. I do not know, sir. Mr. HILL. It is a large proportion; is it not? Mr. MATHER. I do not know, I would not be able to answer that. Mr. HILL. The result of that situation is that it is bound to result in a constantly increasing cost of iron in this country; is it not? If half of the entire production is under one control, and that half is subject to a continually annual increasing charge, is it not bound to result in a constantly increasing cost of iron-practically the same situation that the lumber industry is in to-day, with a constantly increasing cost of the product? Mr. MATHER. Of the iron ore? Mr. HILL. Yes. Mr. MATHER. From the mines that are now being operated, the cost is gradually increasing. In the case of the present known supply. the cost is increasing on account of the greater depth of the ore. Mr. HILL. And it looks to a constantly increasing cost of iron and steel; does it not? Mr. MATHER. If we find new deposits, sir, that would keep the price down. Mr. HILL. I am speaking about the known supply. Mr. MATHER. The known deposits? Mr. HILL. Yes. Mr. MATHER. There would be a slight gradual increase in the cost, on account of, perhaps, greater depth of the mines. Mr. HILL. Do you not think that it is somewhat the duty of the United States to conserve that product, and look out for the future as well as for the immediate present? Mr. MATHER. Oh, that product is not, of course, fixed at all. I should think it would be wise for the United States to increase its output and product of iron ore, and encourage the development of iron-ore bodies. Mr. HILL. Do you not think it would be more for the interest of the United States to conserve its own product and draw ore at cheaper prices from other countries? Mr. MATHER. If we knew just how much we have, yes; but we have no idea how much we have. I think we have infinitely more that we can now see, and I think it is bound to increase. Mr. NEEDHAM. There is no danger of the immediate exhaustion of the supply? Mr. MATHER. No, sir: I do not think so. Mr. CLARK. Is it not true that the trust, and perhaps other large manufacturers of iron, are buying up low-grade ore fields, now that they do not expect to work for twenty-five, thirty, forty, or fifty years, just to have it in stock? Mr. MATHER. That I do not know, sir. Mr. CLARK. And so that nobody else can get it in the meantime? Mr. MATHER. I do not know whether they are or not. That would not be, however, an unnatural investment for persons to make who are operating in iron ore. Mr. CLARK. I know; but it would be a very unpleasant thing for the mills that have to use iron ore. The CHAIRMAN. Mr. Mather, have you noticed any more competition in the sale of your ores for the last five years on account of the foreign import? Have you had to reduce the price at all on account of foreign importation for the last five years, up to, of course, the 1st of October a year ago? Mr. MATHER. It has not been, Mr. Payne, what I should call an appreciable factor. It has had an influence, but I should not say it was a marked influence. The CHAIRMAN. How much did it lower the price of the ores from 1905 up to the 1st of January, 1908? Mr. MATHER. What was the price? How much lower did you make the price of the ores from 1905 up to January 1, 1908? Mr. MATHER. The prices have fluctuated. I should say that in 1908 they were lower than they were in 1907; in 1907 they were somewhat higher than they were in 1906. The CHAIRMAN. There has been no appreciable lowering of prices, then? Mr. MATHER. From 1905 to 1908? The CHAIRMAN. Yes. Mr. MATHER. I should say not, sir. The CHAIRMAN. During all of that time? Mr. MATHER. Not on the average. The CHAIRMAN. There has been no appreciable lowering of the price for the five years previous to 1905 compared with the three years after 1905? Mr. MATHER. That would be 1900 to 1905? The CHAIRMAN. Yes. The price did not go down any? Mr. MATHER. The price fluctuated, Mr. Payne; but I would not be able to say that it was lower in 1905. The CHAIRMAN. But would the average price from year to year decrease? Mr. MATHER. I think it has been about the same. The CHAIRMAN. So that half a million tons of the Cuban ore coming in here at 32 cents you have not felt at all in the market? Mr. MATHER. Not appreciably. The Lake Superior people have not felt it appreciably; no, sir. The CHAIRMAN. That is all. Mr. UNDERWOOD. I should like to ask the witness a few questions. Mr. Mather, what corporation do you represent? Mr. MATHER. The Cleveland Cliffs Iron Company. Mr. UNDERWOOD. Are you familiar with the cost of production of the ore fields of the world? Mr. MATHER. No, sir. Mr. UNDERWOOD. Do you know anything about the cost abroad and in Germany and in Cuba in comparison with the cost here? Mr. MATHER. Not on the average, sir; no. Mr. UNDERWOOD. I notice from the reports that I have before me that the importations of ore in 1907 were about a little over 1,000,000 tons. The consumption in the United States was about 35,000,000 tons. Has that average kept up for the last four or five years? Mr. MATHER. That average of importation? Mr. UNDERWOOD. That average of importations as compared to consumption. Mr. MATHER. The importations in the past have been higher than that, sir. I have not the figures before me, but I should say that in some years they have been a million and a half tons at a time when there was a less production of Lake Superior iron ore. Mr. UNDERWOOD. Was the consumption of 35,000,000 a fair estimate? Mr. DALZELL. It was 55,000,000, was it not? Mr. MATHER. When? Mr. DALZELL. Last year. Mr. MATHER. No, sir. Mr. HILL. That figure of 35,000,000 was in 1902, Mr. Underwood. Mr. MATHER. The production of Lake Superior iron ore in 1907 was about 42,000,000 tons. Mr. HILL. But the total production in the United States? Mr. MATHER. In the United States? I do not know, sir. Mr. UNDERWOOD. The total amount of iron ore in 1902 was 35,000,000 tons. Mr. DALZELL. Yes. Mr. UNDERWOOD. You can not state what the total amount of iron ore was that was produced in the United States? Mr. MATHER. In 1902? Mr. UNDERWOOD. In 1907. Mr. MATHER. I do not know, sir; no. Mr. UNDERWOOD. Mr. Witherbee stated, I think, that you could give us the cost of production f. o. b. the steamer or the car of the Mesaba ore. Mr. MATHER. That varies, sir, from those mills which are surface mines, which are operated partly with the steam shovel, and those which are strictly underground mines. I should say that that would average, on board the cars, from 50 to 60 cents a ton. Mr. UNDERWOOD. That is the cost of production? Mr. MATHER. Yes. Mr. UNDERWOOD. What is the labor cost? How much labor cost is involved, as distinguished from capital investment? Mr. MATHER. The labor cost on the average of those ores is about 70 per cent. Mr. UNDERWOOD. Seventy per cent. The point of assembling that ore at the furnace is either Pittsburg or, in the future, would be Gary, would it not-probably those two points? Mr. MATHER. Some of it will go to Gary; yes, of course. Mr. UNDERWOOD. What would be the cost of assembling that ore at the Pittsburg furnaces? Mr. MATHER. That ore would cost, at Lake Erie, about Mr. UNDERWOOD. I want to get the assembling cost; not the cost of the ore. You have given me that. I want to get the shipping cost. Mr. MATHER. Oh, outside of the mining? Mr. UNDERWOOD. You gave me the cost of the ore f. o. b. the boat at 50 cents. Mr. MATHER. No; f. o. b. the cars at the mines. Mr. UNDERWOOD. At the mines, which has to be shipped to the boat? Mr. MATHER. Yes; f. o. b. the boat at Duluth, it would cost 80 cents more. Mr. UNDERWOOD. Yes. Now, excluding the cost of the ore at the mine, I want to get the cost of shipment to Pittsburg from the Mesaba Range the freight rates, in other words. Mr. MATHER. Yes. The freight rate would be Mr. DALZELL. Do you mean from Lake Erie ports to Pittsburg? Mr. UNDERWOOD. Yes; the freight rates from the mines to the furnaces. Mr. MATHER. The freight rates from the mines to Pittsburg-the rail rate to Duluth from the mine is 80 cents. The lake rate last year was 75 cents. This year it was 65. I should say that 75 would be a fairer rate. That would be $1.55. The rate from Lake Erie to Pittsburg is from 95 cents to $1. I am not certain; I think it is $1, sir. Mr. UNDERWOOD. That would be $2.55? Mr. MATHER. Yes. Mr. UNDERWOOD. Will you give me the same figures to Gary? Mr. MATHER. The freight rate to Gary would be the same as to Lake Erie. You would deduct the freight; it would be $1.55. Mr. UNDERWOOD. Do you know the cost of Cuban ore? Mr. MATHER. No; I do not. Mr. UNDERWOOD. Do you know the cost of transportation from Cuba? Mr. MATHER. I do not. I have had no experience with that. Mr. DALZELL. Do we get ore from Canada? Mr. MATHER. Do we get ore from Canada? Mr. MATHER. A lie: very little. Mr. DALZELL. About how much? Mr. MATHER. That would have to be a guess, Mr. Dalzell. I should say that it would be less than 250,000 tons. Mr. DALZELL. That would be an average yearly, would it? Mr. MATHER. I do not know how much ore has come from Newfoundland, but I was thinking of the mines up north of Lake Superior. I should think that 250,000 tons would be the maximum. I doubt if, from that part, they have ever reached quite that amount. Mr. DALZELL. And where do they come in? Mr. MATHER. They would come into the lake port at Sault Ste. Marie. Mr. COCKRAN. You represent what is known as " the Mesaba Range interest?" Mr. MATHER. No, sir. Mr. COCKRAN. Where is the Mesaba Range? Mr. MATHER. The Mesaba Range is in Minnesota, west of Lake Superior. Mr. COCKRAN. Then these interests that you represent are entirely different? Mr. MATHER. I represent one mine there, but it is only a small mine. Mr. COCKRAN. In the Mesaba Range? Mr. MATHER. Our interests are in Michigan. Mr. COCKRAN. Did you hear Mr. Witherbee's statement as to the comparative cost of production in the Mesaba Range and in Germany? Mr. MATHER. No; I did not. Mr. COCKRAN. How does that matter strike you? Is the product of the Mesaba Range as cheap, as easily produced, as the product of the German mines? Is it as cheaply produced? Can it be produced as cheaply as the product of the German mines? Mr. MATHER. I would not want to answer that. I have not any sufficient knowledge about that, Mr. Cockran. As to the Mesaba mines, it occurs to me that perhaps there is a slight misapprehension in the minds of some people with respect to them, on account of their being operated by a steam shovel, but they are only operated by a steam shovel after a very large amount of surface has been taken off. Sometimes that has amounted to as high as the thickness of 100 feet. That is a very large development cost, which, of course, has to be added to the ore. Mr. COCKRAN. Oh, yes. Mr. MATHER. And that, in its way, you understand, is similar in its application to the cost of development of an underground mine. Mr. COCKRAN. Certainly. It is part of the capital outlay. Mr. MATHER. It is part of either the capital outlay or the operating cost. Mr. COCKRAN. Yes. Making allowance for that, do you know of any place in the world where iron ore can be produced as cheaply as there in the Mesaba Range? Mr. MATHER. Yes; they can produce it in the northern part of Sweden as cheaply. I happen to know that. Mr. COCKRAN. That is practically not in competition with the American mines yet? Mr. MATHER. That is the only place I know about. Mr. COCKRAN. That is an apprehension rather than a fact? Mr. MATHER. At present that does not come into our country.. Mr. COCKRAN. So that at this moment you can produce your ore as cheaply as it can be produced anywhere in the world? Mr. MATHER. The Mesaba ore? Mr. COCKRAN. Yes. Mr. MATHER. The Mesaba ore, I should say, could be produced as cheaply as any ore in the world that comes into the United States. I think that is what you are asking. Mr. COCKRAN. That is all we are concerned about. Mr. MATHER. Yes. Mr. COCKRAN. Now, about Lake Superior ore your own ore, which you describe as the Mr. MATHER. The Michigan mines. Mr. COCKRAN. Is that more expensive-more costly to producethan the Mesaba product? Mr. MATHER. Yes. Mr. COCKRAN. How much more? |