results in a net cost of 11.74 cents per pound of lead and zinc. The breakdown of this cost is as follows: Conta per pound Labor, including pension, life insurance, severance pay, food subsidies, All other mining and milling costs (actual 1952) Total cost of production to concentrate stage_ Smelting and refining costs.. Transportation cost to Chicago.. 2.64 14 1.34 5.52 4.06 2.05 .76 12.39 United States import duty (lead, 1.06 cents per pound; zinc, 0.60 cent per pound contained in concentrates). Total cost of production and delivery. Less silver and gold credit--- Net cost of production and delivery‒‒‒‒‒ 11.74 This cost includes no Mexican income tax, no depreciation or depletion, and no main office overhead. Of the total cost of 11.74 cents, approximately 6 cents per pound (over half the total) is spent in the United States for zinc-smelting costs in Oklahoma, United States import duties, freights within the United States, and purchases in the United States. Costs at our smaller Mexican mines are approximately at the same level Costs in Mexico increase sharply as metal prices rise because Mexican prodre tion and export taxes are on a graduated scale according to metal prices. The higher the price, the greater the take of the Mexican Government, and this de not take into account Mexican income tax which is levied separately. Purchases in the United States by all our Mexican units during 1952 totaled approximately $2,267,000. The CHAIRMAN. We thank you very much for your appearance, and I thank everybody here for your patience. We will adjourn until next Monday morning at 10 o'clock. NATIONAL ASSOCIATION OF WASTE MATERIAL DEALERS, INC.. In re H. R. 4294, H. R. 4320, and H. R. 4462, and other bills containing simi..! Chairman, Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: The National Association of Waste Material Dealers, Inc., is the largest and oldest trade association actively representing the various branca of the secondary raw-materials industry throughout the United States. It s served the waste-material industry for more than 40 years. The association hay 8 separate commodity divisions and its membership totals approximately 900 the leading firms in the industry. Two commodity divisions of NAWMD are the metal dealers' division and the secondary metal institute. The members of the association concerned with the activities of these two divisions represent in volume and gross tonnages the largest segment of the waste-material industry. The metal dealers' division and secondary metal institute are vitally concern with any Government action taken in relation to nonferrous scrap metals, SDÅ therefore, the following statements are submitted in behalf of these two orga izations in connection with H. R. 4294, H. R. 4320, H. R. 4462, and other S containing similar provisions for placing additional duties on the importation secondary and scrap lead and zinc. Since the pattern of secondary and scrap lead and zinc, with which the membe of the metal dealers' division and secondary metal institute are concerned, fi lows closely that of the primary commodities, reference in the following state ments is made to the latter materials. The legislation which has been introduced in the House to provide a flexible luty on the importation of lead and zinc appears to be intended by its sponsors o stabilize domestic production. However, a careful analysis of the probable ffects of the bill indicates that, far from assisting in stabilizing the domestic markets, this legislation, if enacted, is likely to create instability. By the terms of the proposal, the import duties on lead and zinc in each quarter would be based on the prices prevailing in the second month of the preceding quarter. Thus, the prices prevailing in May 1953 would determine the extent of the duties in the third quarter of his year. The prices prevailing in August 953 would determine the duties in the fourth quarter of 1953. Assuming that prices of lead and zine in May are at approximately the present evels, very substantial duties would be in effect in the third quarter. These ncreased duties would tend to drive the prices of metals upward. As prices rose n the third quarter, this would mean in turn that the duties to prevail in the ourth quarter would be substantially less than in the third quarter. Unless the basic underlying conditions in the world metal markets were to hange, the reduced duties in effect in the fourth quarter would cause renewed rice weakness, thus paving the way for an increase in duties in the first quarter f 1954. This pattern of alternating high and low duties in successive quarters would continue indefinitely. Lead and zinc are truly international commodities. The United States market annot be effectively insulated from conditions elsewhere in the world so long as e are dependent, as we must be, on substantial imports of lead and zinc. The prosperity of the United States industry requires an adequate supply of ead and zinc. The domestic consumption of these metals has long outgrown he domestic production (by roughly 50 percent). Until general conditions in world metal markets improve, the proposed legislaion would result in 3-month periods of high duties and high prices to domestic onsumers alternating with 3-month periods of low prices and low duties. Such n arrangement is harmful to domestic producers; to foreign producers; to conumers; to those companies engaged in the importation of lead and zinc; and to he general public. The passage of this proposed legislation would be a serious blow to the lead nd zinc industries in the long run since the extreme instability in prices which I would create would eventually promote the use of less desirable materials with ore stable price structures. Therefore, we request that serious consideration be given to the above stateents and that H. R. 4294, H. R. 4320, H. R. 4462, and other bills containing imilar provisions in connection with duties on the importation of lead and zinc ot be enacted. If, for any reason, the committee considers it necessary to place additional uties on imports of lead and zinc, we urgently request that secondary and scrap ad and zine be exempted from such additional duties. It will be appreciated if you will have this letter made a part of the record at he hearing on H. R. 4294. Respectfully yours, MAX M. TEISCH, Vice President, Foreign Trade Division. PARK UTAH CONSOLIDATED MINES Co., on. DANIEL A. REED, Chairman, House Ways and Means Committee, House of Representatives Office Building, Washington, D. C. DEAR SIR: I am sending you under separate cover by mail 50 copies of a stateent made by me before the Small Business Committee hearing at Phoenix, Ariz., 1 April 30 last, relative to the hearing on the lead and zinc provisions of H. R. 294 for the files of your committee members. Enclosed copy. Very truly yours, PAUL H. HUNT. TATEMENT OF PAUL H. HUNT, VICE PRESIDENT AND GENERAL MANAGER PARKUTAH CONSOLIDATED MINES CO., PARK CITY, UTAH Mr. Chairman, members of the committee, and gentlemen, I represent one of e small but persistent producers of lead-zinc ores operating in the Park City ining district of Utah. Our annual production in recent years averages between 10,000 and 15,000 tons of these 2 metals with a crew of 350 to 400 men. We have some 9,000 stockholders scattered through nearly every State of the Union. The Park City district has, since its discovery in 1872, produced 15,590,000 tezs of ore, having a net smelter value of $384,810,000. At no time since its discovery in 1872 has there been a complete shutdown of all mines and in the judgment of geologists, engineers, and operators, the district under normal conditions of balance between prices and costs, has many years of life ahead of it. Right today, however, only 1 mine is still operating, which is the lowest record in the history of this 80 years of continuous operation. Working under high pressure and a tight schedule as this committee is doing, it would be an imposition to burden you with data already furnished or waste your time with long arguments. However, if anything is omitted or not made clear, I shall be glad to answer any questions I can. At your meeting in Denver a week ago, representatives of the Mine, Mill, and Smelter Workers Union strongly urged a return to the premium price plan, more or less as in World War II, for the encouragement of small-mine owners and prospectors. A very similar bill to that proposed in Denver, was S. 2105 introduced in the first session of the 81st Congress on June 17, 1949, by Senators Hayden, McFar land, and Malone. We in Park City and throughout the West generally ga S. 2105 our full support. However, we went up against a stone wall of opposition that subsidies paid any industry in peacetime are economically and fundamentaliy unsound. I believe such opposition would be even stronger today. When the entire lead industry of this country, large and small producers alike is either shut down, contemplating a shut down, or in uncertainty as to how lo they can continue operations, we must adopt some other approach than a premiu price plan for small mines and prospects. With the deplorable situation of the small miner, owner, and prospector, and with the utmost sympathy for them, I still think the greatest help that could be given them would be the assurance there is a market for his ores in this country if he is successful, at prices that will yield a reasonable profit. Without this, d the assistance that might be given him is valueless. The testimony of Messrs. Travis and Larson at your Denver meeting, favorit legislation for a premium-price plan, does not by any means represent the thining of organized labor in Utah. For example, the United Steelworkers d America, who are the bargaining representatives of the lead-zinc miners in the State, have had their economists and statisticians from their headquarters E Pittsburgh, going over the situation since early in the year. As a result ar entirely independent of the ideas of management, they came to the conclusi the legislation embodied in H. R. 4294, the sliding-scale tax on lead-zine imports when the domestic price for these metals is below 15 cents a pound, had the most likelihood of passage and would provide the most stability of employmen for the membership of their union. As proof of this decision, three members of this union from Utah are now in Washington and will appear as witnesses & the hearings before the Ways and Means Committee on H. R. 4294. On the last page of this brief there is a tabulation of data from the Paky Commission's report relative to the production and consumption of copper, lead and zine in the United States and the free world exclusive of Russia and the satellite countries for the year 1950 and the estimated production and consum? tion of the United States and the free world for 1975. You will note in table I, the United States in 1950 was an average of 66 per cent self-sufficient in these 3 metals and it is estimated we shall be only 49 per cent self-sufficient in 1975. Also, the primary production of these 3 metals bined, it is estimated in this 25-year period, will show a decrease of only $ per cent; that is, the report estimates domestic production will maintain its prodas tion of 1950. You will also note in table II, it is estimated if the demand for metals in the United States and the free world are to be satisfied in 1975, the free world m double its 1950 production. In the text of the report it is frankly stated t capital required for this doubling of foreign production must be furnishe largely by the United States. The Paley report assumes, therefore, our domestic industry will continue to produce metals for the next 25 years at about the 1950 rate of production, eve though tariffs are entirely removed and regardless of what may happen prices. In your hearings you have been given data showing what the increased importations of lead-zinc in 1952 over 1951 have done to domestic prices. Dois away with all tariffs will add still more incentive to increased imports, lower domestic prices, and consequently drastically decreased domestic production. As far as reliability to predict 25 years hence, the authors of this report have fallen flat on their faces in the first 6 months since the report was published. Every ton by which domestic production may decrease, by that much, increases our dependency upon foreign sources. By the recommendations of the Paley ommission, if carried out, it is inescapable that some very large share of the apital invested in domestic mining must be written off. The report does not admit this, but the experience of the past year admits of no other alternative. For every $1 we must write off from our investment in domestic mining, we must nvest another in foreign mining and we have not entirely forgotten what has happened in Bolivia and Iran. This rash, theoretical experiment to which the Paley Commission would first -ommit us (doing away with all tariffs on metals) is striking at the Achilles heel f our future economic health and safety. With our 71⁄2 percent of the world's #opulation consuming 45 percent or more of the world's supply of metals, this ndifference as to the fate of the domestic mining industry in the report and his eagerness to build up the foreign industry regardless of how dependent we may become, is disturbing to say the least. True, the Paley report dangles before us the hope we may be able, as our ependency increases, to buy these metals abroad cheaper than they can be prouced at home. If so, this hope is contrary to all our past experience. We ave at times been dependent on foreign sources of supply for essential maPrials. To name only a few-potash, quinine, camphor, diamonds, crude rubber, offee. Did the cost of production of these commodities bear any relationship the prices we were forced to pay? Not the slightest, and our foreign suppliers rough cartels controlled production and price to earn the maximum profit. The law which determines prices is not the cost of production, but the need f the buyer. A good example is the recent behavior of copper and lead-zine rices. In 1952, demands for copper exceeded by some 10 percent available suplies, with the result foreign copper was held at 36% cents while our domestic rices remained unchanged at 241⁄2 cents. A 10 percent insufficiency caused an crease of 50 percent in price. In the other direction, lead-zine was in somehat excess supply over demand, approximately 10 percent with the result leadne dropped some 40 percent in price. This thin margin of insufficiency or xcess of supply over demand is multiplied in determining price from 4 to 5 times. We can exercise no control over foreign production or prices even though every ime required to produce a commodity is American money. The only control we ave is through our own domestic production. Yet we are urged by the Paley reort not to be concerned about whether the domestic industry survives or perhes; let it take its chances in competition with some of the world's poorest paid bor and in some inscrutable way, whichever may win (and this is a matter of difference), it will all work out for the best. xcerpts from Paley report. Copper from graphs p. 58 without allowance for scrap. Lead and zine from figures in vol. II including scrap in both production and consumption in United States] United States production, imports, scrap recovery and consumption 1950 and estimates for 1975 [Thousand short tons] In 1950 imported 100,000 tons copper from foreign stocks. NOTE.-Average change for 3 metals: United States primary production, -8 percent; United States total. sumption, +47 percent. II. Free world production, exports to United States and consumption for 1950 and estimates for 1975 NOTE. Average change for 3 metals: Free world primary production, +97 percent; free world total onsumption, +69 percent. House of Representatives, Washington, D. C. (Attention: Hon. Gordon Grand, secretary.) GENTLEMEN: We as mica fabricators are extremely concerned about the increase in the importing of fabricated mica from Mexico, Japan, Germany England, India, and elsewhere. Your committee no doubt realizes the strategic nature of mica as an electri insulator in electronic equipment (radar, proximity fuses, guided missiles, air sea, and ground communications), and electrical equipment (electric moters electrical controls, and high-voltage transformers and coils). Our Government is stockpiling mica in large quantities, to be prepared for an eventuality. Mica, being a product of nature, requires a great degree of hunt skill, at every operation, to realize the highest yield in fabricated parts from t original piece of mica. One hundred pounds of mica, mishandled, will produce & low as 1 pound of fabricated mica, whereas 100 pounds of mica handled by skilled domestic fabricators, will produce 50 pounds of fabricated mica. Therefore, the strategic stockpile of mica, in terms of finished, fabricatel usable mica, is dependent upon experienced mica fabricators who are we equipped and financially able to fabricate large quantities of mica at the sign of an emergency. The stockpile is presently deficient in condensor film mica, which is being fabri cated outside this country and brought into the United States at prices too low ** allow competition by domestic mica fabricators. |