This district is one of the most highly mineralized areas in the Unite States. Our annual production averages between 12,000 and 15, tons of these two metals, with a crew of 200 to 250 men. We have some 2,600 stockholders who live in nearly every State.

The Tintic District has produced ores in the last 84 years, having net smelter value at today's prices of roughly half a billion dollar However, in the opinion of many knowledgeable economic geologists this district has barely been touched.

My company supports a community of some 1,400 people. Since we are mining 2,700 feet below the surface and must pump 50 tons of water for every ton of ore we mine, we cannot shut down and reope again when the metal market improves.

Fundamentally, the problem we face today is whether or not we are going to continue to have a domestic mining industry.

years,

lead

There are those who are violently opposed to the sliding-scale tar provisions of the Simpson bill under the misapprehension that the cost of the metals they use is going to be greater than it has been in the past. Examination will show that during the last 6 has averaged 15.4 cents and zinc 14 cents per pound. These are roughly the market prices which we figure will result under the sliding-scale tax but without the ruinous fluctuations we have expen enced twice in recent years. Furthermore, even a superficial exam ination of the subject will reveal that in the long run it will be much cheaper for us to maintain a healthy domestic lead-zinc mining indus try than to pay the high prices that will result from complete de pendence on foreign production or, worse yet, not to be able to get the metal at all because of enemy action.

We believe that we are entitled to as much protection as those wh manufacture products from our metals. A casual examination will reveal that electric storage batteries enjoy a 20 percent ad valorem tariff protection; tetraethyl lead a 15 percent ad valorem protection: and other lead-zinc manufacturers have a protection anywhere between 10 and 30 percent. The mining business is probably the only industry in the country where the producer must bear the full burden of rising costs and we contend that in a period of inflation the customer should

pay for the increases in cost of metal production, just as they do for

every other commodity.

The CHAIRMAN. Does that conclude your statement?

Mr. FITCH. Yes, sir.

The CHAIRMAN. Congressman Stringfellow, I want to compliment you on your very, very fine statement in behalf of the zinc and lead

industry. I want to say, further, that I have watched Congress over a period of time, and I feel that you

your

course in

have rendered

very excellent service to the district which you represent. We are very

glad to have you here.

Are there any questions? Mr. Utt will inquire.

the attention of the committee to the fact that today we have had before Mr. UTT. I, too, want to compliment Mr. Stringfellow, and call us two new Congressmen, John Rhodes, from Arizona, and Congress man Stringfellow, from Utah, and to say that both of them hare made very passionate pleas to protect the economies of their State. and I think that their States should be proud of them. I know that

I am proud to have them as colleagues.

Congressman Stringfellow referred in his talk to a report by Vandergrift in 1930 to the effect that the economy of Utah was dependent, 25 percent of its population, upon the mining industry. Is there any later report that you know of that might show what percentage of the State of Utah is today dependent upon the mining industry?

Mr. STRINGFELLOW. I do not have any personally. Those figures were furnished to me by a member of the Utah Mining Association. I will ask Mr. Fitch if he has any more information.

I might correct what you say. Rather than 25, it was 47 percent. Mr. UTT. Yes, 47 percent in 1930.

Mr. STRINGFELLOW. It is the backbone of our economic position in Utah.

Mr. UTT. Do you have a guess as to what percentage of the population is now dependent upon the mining industry in Utah?

Mr. STRINGFELLOW. I would hate to hazard a guess right now, because of the rapidly changing situation as a result of the United States Government's strangling our domestic economy in the State. Mr. UTT. I was just wondering.

I think we have had cases here where some of the States are 50 percent dependent upon their industries-the mining industry, the coal industry, for instance. I was just wondering if Utah might still be 25 or 30 percent at the present time; and if it was, it certainly was a vital thing to maintain the mining industry of the State of Utah. Mr. STRINGFELLOW. I would be willing to go out on a limb and say that at least 40 percent was still dependent upon the mining industry, because we do have vast coal mines in many of the counties of my State bsides the copper mining facilities, the lead and zinc, and other small mines. Our State is potentially the richest in the United States as far as our minerals are concerned, if we can ever develop them. There will always be a large portion of our population dependent upon the mining industry if we find a way to preserve the mining industry in our overall economy.

Mr. UTT. Would it be your opinion that the State of Utah can hardly afford to wait for an investigating committee to determine whether you are injured or not, or whether you are going to have to have some relief immediately in order to preserve the economy of the State of Utah?

Mr. STRINGFELLOW. I think I pointed that out forcibly in my statement. If we are to die as a mining industry, as a wool industry, in the State of Utah, as many of our free-trade advocates would want us to do, I say, "Let us die a natural death. Please don't strangle us. Mr. UTT. There is just one question I want to address to Mr. Fitch. That is: How long, in your estimation, would it take to reopen a mining operation that had ben flooded by water if there was a cessation of imports by reason of war and you were called upon to start your mines again? How long does it take to get them in operation? Mr. FITCH. We have actual experience with that, Congressman. We let our mine flood once in 1927. We started to dewater in 1940, and it took 5 years fully to dewater, at a cost of roughly $3 million. Mr. UTT. So, if that were the case today, the security of the Nation would be definitely hazarded if we let those mines continue to close and then expect to call on them in a day or two or a week or even a month?

Mr. FITCH. That is right. I think we must have a long-term, stable policy to keep our industry healthy. It is not only unwatering mine that we have had to shut down, but to have a healthy industry you must be able to figure on future exploration work. The only way we can do that is to have a relatively stable market.

Mr. UTT. We had testimony here to the effect that great profits were made during the high prices, and I imagine that those high prices alluded to were in the 22-, 23-, 24-cent bracket for foreign metals, bu did the local mining industries receive any of those high prices for their products?

Mr. FITCH. No, sir. Unfortunately, during the past 12 or 13 years, whenever metal became scarce and the domestic mines had a reasonable chance of laying away a cash reserve for future development work, we have been faced with fairly low price ceilings. So in effec what used to be a boom-and-bust industry is now just a bust. Mr. UTT. I think that is all, Mr. Chairman.

The CHAIRMAN. I want to thank you, too, Mr. Fitch, for your appearance and the information you have given to the committee. The next witness is Mr. Robert S. Palmer, executive vice president. Colorado Mining Association, Denver.

I want to thank you for your courtesy in letting Congressman Stringfellow precede you.

STATEMENT OF ROBERT S. PALMER, EXECUTIVE VICE PRESIDENT.

COLORADO MINING ASSOCIATION, DENVER, COLO.

Mr. PALMER. Mr. Chairman and members of the committee, for the sake of brevity, I will simply file my statement with the clerk and endorse in toto the statements made by Otto Herres here and Con gressman Hill, chairman of the Small Business Committee of the House.

The CHAIRMAN. Without objection, it is so ordered. (Mr. Palmer's statement follows:)

STATEMENT RY ROBERT S. PALMER, EXECUTIVE VICE PRESIDENT, COLORADO MINING ASSOCIATION, DENVER, COLO.

The slaughter of our domestic mines continues at an unprecedented rate. In 1940 there were 8,246 producing metal mines in the Western States. By 194 this number had decreased to 2,244 and today all indications are that there are fewer than a hundred actually operating on a commercial basis. Recent studies show that in these 11 Western States, where heavy casualities in the mining industry have taken place, approximately 60 percent of the normal production of lead and zinc takes place. During normal times, as well as emergencies, these areas are highly essential to our well-being.

Percentagewise, the number of mines closing in the State of Colorado has 5ceeded 90 percent and some States are reporting 100 percent closures. Emphasis is placed upon the high percentage of closedowns for the purpose of emphasizing the need for immediate action by this committee and the Congress of the United States to prevent the complete destruction of the domestic mining industry. The mining industry is not correctly portrayed by mere statistical analyses Many mines are operated over a period of time at a loss, which may give the statistician the idea that the industry is healthy, whereas the operator, feeling a civic responsibility, keeps his mine operating as long as possible, hoping against hope that his Government will come to his rescue and prevent his destruction. The decision to close down a mine, where an entire community depends upon the mining operation, is a momentous decision. Your friends and neighbors are thereby put out of work, and the entire community suffers, much as it would if it were hit by an atomic bomb. Take the community of Silverton, Colo.—a highly

mineralized, delightful mining community. Here, the Shenandoah Dives Mining Co. has operated over a long period of years, supplying not only employment for he workers of that company at its mining and milling operations, but also proriding custom milling for the numerous small mines which operate in the district. The railroad, the power company, the numerous business houses, the professional people, and in fact, most of the people in the community depend upon his one mining operation for their livelihood. Recently, the management was orced to make the decision to close the mine. True, the company has an exloration and development project, partially financed by the Federal Government, out regardless of how much ore is uncovered in exploring and developing new re bodies, the fact still remains that this mining operation, after it mills the ›res produced in the area, must ship them long distances by rail to smelters where the metal is recovered from the concentrates and the metal then shipped o the markets in the United States where the quotations cited in the papers are nade.

The producer pays the freight rate, the smelting costs, and the refining costs. All of these costs have been increased because of the inflationary spiral prevalent n the United States. Not only is this mining company confronted with increased vage scales at the mine and the mill, increased trucking rates both for hauling oncentrates to the railroad and supplies from the railroad, increased workmen's ompensation costs, increased fringe benefits, increased insurance costs of all inds, production taxes, sales taxes, and the unnumerable taxes which are placed pon all producing industries, but this mine must pay heavy transportation and reatment costs which are far in excess of those of a few years ago.

It is clear, therefore, that policies of our Government shut down this mineot lack of ore bodies, inefficiency of operation, nor the contention that this peration is a marginal operation. The word "marginal" is used in topflight overnment releases to convey the impression that those mines which come in he high-cost category are inefficient. In many of the smaller mines of the Nation efficiency of operation is at its highest. Even with the highest efficiency ossible in the United States, still we can't compete with the kind of foreign ompetition which the industry is now confronted with.

The industry raises no objection to the imports of foreign metals, produced s they are at much lower costs than in the United States, if the importing of hese metals does not result in the destruction of the markets which we in the aining industry must have if we are to survive. There is no element of fairness n the proposition that a foreign mine with grants-in-aid from the various Mutual Security or military aid agencies or loans from the Export-Import Bank is not t an advantage over the domestic producer. Since June 1950 loans and grants mounting to $245 million have been doled out through Federal agencies and the Export-Import Bank to expand foreign mineral production. Not only has this aoney been used to encourage foreign production, but contracts have been made y DMPA for lead from Guatamala over a 7-year period at prices varying rom 17 to 20 cents. Contracts have been made for zinc from Mexico and Peru ver a 5-year period for prices varying from 161⁄2 to 171⁄2 cents.

Let's look at the foreign producer's situation and compare him with the miner n Silverton to which I have referred. His name is located in an area where here is a larger ore body than that in Silverton. He has obtained, through he generosity of the United States, the very finest equipment American ingenuity an create. This he has gotten, and with very little if any expense to himself. He has also received the best talent that American schools can provide for he as exported from the United States the graduates of our technical schools and colleges. His main advantage over his American brother is that he pays wage scales in Peru, Morocco, and Guatemala of some $1.50 to $2 a day. If he is perating a small mine in Mexico he pays 85 cents, or in some large mines, $4. [llustrations in South Africa, Yugoslavia and elsewhere could be given and have been given by the mining industry in its various presentations before the Tariff Commmission and elsewhere. In view of the fact that the foreign prolucer has not only the larger and in many instances richer ore body from which o extract his lead or zinc, he also has a cost of production far less than that which prevails in the United States. But his advantage does not end here, for it should be remembered that one of the major costs of the Silverton miner is the cost of transporting his concentrates to market and also his costs of smelting and refining.

Does any Member of the Congress or of the executive departments of the Government of the United States contend that the American miner can compete with the foreign miner under such circumstances? What about subsidies to ships

bringing foreign ores and concentrates to the United States? How about the mutual aid program-has it provided facilities for the miner abroad which it has not provided for his brother at home? The unfairness of this kind of con petition, aided and assisted by American taxpayers' money, is primarily the cause of the destruction of the domestic mining industry.

In my State we have driven under a very rich and productive area a drainag tunnel, with the assistance of Federal funds. The mining industry of my State proposed this project prior to World War II. We created in the State of Colo rado a State agency to cooperate with the Federal Government for the purpos of facilitating the tunnel's construction. Unemployment then prevailed through out the land. It was found, under the Public Works Administration, that the word “mining” had not been included and therefore the project was turned down, although manpower was plentiful and time was not important. Later on, during World War II, when a metals shortage existed-a shortage which caused many a sleepless night on the part of the defense officials-finally resulting in the release of thousands of men from the Armed Forces to the mines of this country in an effort to step up production because metals were in short supply, the tunnel was started by Uncle Sam. In haste, the War Production Board had recommended its driving, not at a level where it would have done the most good, but at a higher level, and in a direction other than that recommended by the mining industry.

This illustration is given not to criticize the Federal Government for driving the Leadville drainage tunnel but rather to illustrate what we do when the "heat" is on in an emergency. Imports were not coming in because ships were being sunk, so it became necessary to step up production within the United States. But here it should be remembered by every Member of the Congress the United States and every official in p blic office that when our mines are closed down it takes years to reopen them, and it takes year to train and reequip a crew of men who are able to meet production requirements which inevitably result when we get into trouble.

How soon we forget-how soon we forget the dire conseqeunces of our nege gence. Let us consider the view of the various boards and commissions whe contend that we should keep our minerals in the ground and save them for posterity. What happens when a mine closes down? In my area, timbers break, underground movements takes place, shafts cave in, water pours in. Minerals which should be recovered may be lost forever because the cost of reopening such properties is tremendous and in many instances will be uneconomic. The end result is that instead of saving America's mineral reserves by closing dow our mines, we actually destroy America's mineral reserves and are guilty unforgivable waste in the process.

The condition in Silverton to which I have referred is the situation in Telluride, where another entire community has been faced with destruction because the one principal mining operation in the district has announced that it will close down. Rico, another community, is confronted with the same situa tion, for there again, the one principal mine is operating at a loss. The Callahan Lead & Zinc Co. was forced to discontinue operations in White Pine in Gunniso County, and while these illustrations are given, they are only the principe independent mining operations in the districts. They do not include the bu dreds-yes, the thousands, of small fry-the little fellows of the United States who discover and bring into existence the "babies" of the mining industry, the new mines.

How can our industry exist without new mines? Are we to accept the statis tician's analysis of our industry-the statistician who says that today we pro duced 10 tons yesterday and therefore the industry can't be completely destroyed? The facts are that many times these mines operate for a period of time at a loss rather than close and thereby destroy the economy of an entire area. It is hoped that this committee will take quick action and help prevent the

destruction of the mineral resources of the United States.

In presenting this plea to the Congress, I present it for thousands of men and women who have never seen Washington. They know nothing about the international intrigue which involves the destruction of the domestic mining industry. They have, however, asked me to present this statement to you for your con

sideration.

Is it not true that the best way to destroy an enemy or the best way to keep him under your control is to destroy his sources of mineral resources or make him come to you for those mineral resources? We must admit that without metals we cannot long survive. And we must admit that when we have relied on outside