TREASURY DEPARTMENT APPROPRIATION BILL, 1947 MONDAY, MARCH 11, 1946 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, D'. C. The subcommittee met, pursuant to adjournment, at 2 p. m., Hon. Kenneth McKellar (chairman of the subcommittee) presiding. Present: Senators McKellar (chairman of the subcommittee, presiding), Tydings, McCarran, Hayden, Green, White, and Reed. Present also: Hon. Dean M. Gillespie, a Representative in Congress, from the State of Colorado. Witnesses present: Hon. Sinclair Weeks, a former United States Senator from the State of Massachusetts, representing Reed & Barton Co., Taunton, Mass., accompanied by Edward O. Otis, Jr., executive secretary, New England Manufacturing Jewelers & Silversmiths, Providence, R. I.; Roy C. Wilcox, executive vice president, International Silver Co., Meriden, Conn.; M. L. Millspaugh, president, Samuel Kirk & Son Co., Baltimore, Md.; G. Russell Spriggs, Metals & Control Corp., Attleboro, Mass.; J. C. Travis, vice president, Handy & Harmon, New York, N. Y.: William F. McChesney, Gorham Manufacturing Co., Providence, R. I.; A. H. Robinson, Eastman Kodak Corp., Rochester, N. Y.; John Tebbin, H. A. Wilson & Co., Newark, N. J., and Albert R. Erskine, Memphis, Tenn. TREASURY DEPARTMENT BUREAU OF THE MINT PROVISION GOVERNING DISPOSITION OF SILVER OWNED BY UNITED STATES Senator McKELLAR. The committee will come to order. Senator MCCARRAN. Mr. Chairman, I see it will be impossible to finish this afternoon, and I was going to suggest you hear all the silver brokers, but tomorrow I must go on the floor with the administrative law bill. Senator MCKELLAR. I do not see how you can get off tomorrow. Senator MCCARRAN. Those who are favoring this want to be heard. Senator MCKELLAR. Who wants to be heard? Senator MCCARRAN. Senator Weeks has the list of witnesses. Senator MCKELLAR. All right, Senator Weeks, if you will call your first witness. Senator GREEN. It would shorten the matter, Mr. Chairman, if we heard them all together. 149 Senator MCKELLAR. I think we ought to take the Congressmen first. Senator GREEN. It would shorten matters a good deal if they could hear what each other said. Otherwise, they would say the same thing. If they could hear each other they would say "I agree with what the gentleman says." Senator MCCARRAN. I prefer to have them come in one at a time. Senator MCKELLAR. Well, gentlemen of the committee, what do you all say? How do you feel? Senator REED. I think there is some merit in what Senator Green says. As a matter of fact, they have one story to tell and they are all here. Maybe they can all subscribe to that. Senator MCCARRAN. I do not agree with what you say. I just simply express my opinion. Senator MCKELLAR. I think we ought to let the Congressman be heard first. What side is he on? Senator MCCARRAN. He is against it. Senator MCKELLAR. What is the item? What is the page number, 25? Senator MCCARRAN. When I come before the committee I want the Secretary of the Treasury here. Senator MCKELLAR. All right. Senator GREEN. Yes. Line 7. Senator MCKELLAR. It states: TEXT OF PROVISION IN BILL For a period of 2 years following the enactment of this act, the Secretary of the Treasury is authorized to sell or lease for manufacturing uses, including manufacturing uses incident to reconversion and the building up of employment in industry, upon such terms as the Secretary of the Treasury shall deem advisable, to any person, partnership, association, or corporation, or any department of the Government, any silver held or owned by the United States at not less than 71.11 cents per fine troy ounce: Provided, That at all times the ownership and the possession or control within the United States of an amount of silver of a monetary value equal to the face amount of all outstanding silver certificates heretofore or hereafter issued by the Secretary of the Treasury shall be maintained by the Treasury. Mr. WEEKS. Shall we call them all in? Senator MCKELLAR. What do you want to do? Senator MCCARRAN. Do you want to do it? Do you want to call them all in? Senator MCKELLAR. All right, get them all in. Mr. Weeks, who is the first witness? Do you want to be heard first? STATEMENT OF HON. SINCLAIR WEEKS Mr. WEEKS. Mr. Chairman, I will introduce the subject matter as briefly as I can, and then I will present some witnesses I have here. Senator MCKELLAR. Yes, sir. Mr. WEEKS. We have here today those representative of various segments of the industry which use silver, and which today are in a very serious situation because silver is rapidly becoming nonexistent, as far as we are concerned. Now I want to first of all ask each one of these gentlemen, in turn, to tell you how the first situation is affecting their particular segment of the industry, and they are all in support of the item in your appropriation bill which will enable the Government, the Treasury, to continue to furnish silver to industry for the next year or two, as it has during the war. I would first like to ask Mr. J. C. Travis, of Handy & Harmon, to tell you something of what the present supply of silver is, how the industry is situated today, so far as the supply is concerned. No one is better qualified to testify about it than Mr. Travis. Senator MCKELLAR. All right, Mr. Travis. Come up opposite the reporter. Mr. TRAVIS. All right. Senator MCKELLAR. Will you give your full name to the reporter? Mr. TRAVIS. Judson C. Travis. Senator MCKELLAR. All right, sir, you may sit down if you like. STATEMENT OF JUDSON C. TRAVIS Mr. TRAVIS. Thank you, Mr. Chairman. With your consent, I would like to make a statement. The company I represent is the principal supplier of semifabricated forms of silver to American industry. Because of our acquaintance with conditions of supply and demand pertaining to silver, I have been asked to appear before this committee to present certain facts. OUNCES OF SILVER USED BY INDUSTRY IN 1945 Industry used approximately 140,000,000 ounces of silver in the year 1945, of which more than half was supplied from the United States Treasury under the provisions of the Green Act, which expired on December 31, 1945. In the first 8 months of 1945 most of the silver used in industry went into war production, and the highest rate of consumption was reached during the period between VE-day and VJ-day. WAR CURTAILED USE OF SILVER FOR CIVILIAN PURPOSES During the war the use of silver for civilian purposes was sharply curtailed. As a result there was a tremendous backlog of unfilled orders in the hands of suppliers at the end of the war. LEVEL OF SILVER BEFORE AND IN LAST YEAR OF WAR Senator MCKELLAR. What was the level just before the war, say in 1939, and what was the highest level during the war? Mr. TRAVIS. Before the war the level for the arts and industries was about 30 to 35 million ounces a year, and it reached a high figure in the last year of the war; in 1945 we estimated about 140,000,000. Senator MCKELLAR. It increased from 35,000,000 to 140,000,000 ounces? Mr. TRAVIS. Yes, sir. DIVISION OF SUPPLY-WAR VERSUS CIVILIAN Senator REED. Can you divide that between war use and civilian use? Mr. TRAVIS. The use for military purposes reached a percentage of about 70 percent during the war. So, of the 140,000,000 increase used in 1945, approximately 70 percent was used for military purposes. Senator REED. And that would leave the civilian use not far different than it was in peacetime? Senator McKELLAR. Let us see. It is 140,000,000 and 30 percent of that would be 47,000,000. Mr. TRAVIS. I would say that was right. Senator MCKELLAR. Yes, sir. All right, sir. Please continue. USE OF SILVER FOR CIVILIAN PURPOSES INCREASED AFTER VJ-DAY Mr. TRAVIS. After VJ-day the use of silver in war materials was greatly reduced and accordingly plant production was shifted as rapidly as possible to serve the arts and peacetime industries. As more labor became available, output increased and by the end of 1945 the rate of silver consumption for all purposes was raised even above the high level that had prevailed before VJ-day. SOURCE OF SILVER USED IN 1945 Senator MCKELLAR. Out of this 140 million that was used in 1945, about how much was mined, and how much did you get from the Government? Mr. TRAVIS. Well, maybe half came from the United States Treasury, and actually about 28 million ounces came from domestic production. Senator MCKELLAR. How much from foreign production? AMOUNT IMPORTED IN 1945 The actual imports in 1945 were about 50 million ounces. Senator MCKELLAR. So, about 78 million were mined domestically or came from foreign mines? Mr. TRAVIS. That is right; yes, sir. BREAK-DOWN OF 1946 ESTIMATED REQUIREMENTS FOR ARTS AND INDUSTRIES Mr. TRAVIS. For 1946 we estimate that approximately 125 million ounces of silver will be required for use in the arts and industries, divided roughly as follows: For jewelry approximately 8 percent; for silverware about 50 percent; for widespread use in general industry, including photographic materials, electrical parts and equipment, engine bearings and brazing alloys, 40 percent-I would like to mention that there has been a very pronounced expansion in the use of silver in new lines of industry. That has grown out of research and development work and also from war uses that we are very hopeful will remain as permanent uses, and we are very much We concerned with those new uses because they are being cut short. are anxious to see them supplied so they will continue to absorb silver. For dental and medicinal uses about 2 percent is used. DISCUSSION ON PREWAR AND CURRENT PREVAILING PRICE OF SILVER Senator MCKELLAR. Mr. Travis, during that period, 1939, to the present time, the price of silver has gone up how much? Mr. TRAVIS. From what time? Senator MCKELLAR. From 1939 to 1946. Mr. TRAVIS. Well, the prevailing price before the war was 35 cents an ounce. Senator MCKELLAR. I am thinking about an ounce of silver, and this is important. Because of a little personal experience, I ask you this question. Somebody got married and I gave my secretary $25 to send some sort of silver as a present and I was told afterward it was remarked on quite frequently at the home of this party, the bride, that the Senator had sent her a present and it was a most insignificant thing, the most insignificant in the world. Well, I remember when $25 would buy a whole lot of silver, but I was told I was very greatly criticized for being an inpecunious person, not only for being a very skimpy person, to send her a present of that kind because the little silver vessel that was bought for $25 really did not amount to anything at all. That is what I was told. I did not see it, and I cannot say of my own knowledge, but I was just wondering how much the price of silverware has gone up. Mr. TRAVIS. I can speak for the price of tableware to the effect- Mr. TRAVIS. Wholesale, there have been prices which include just the increased cost of silver. Otherwise, the prices have been maintained at their prewar level. Beyond that, inasmuch as my firm is not a manufacturer of finished products Senator MCKELLAR. We will ask about that later. Senator REED. How much has the price of silver gone up? You have paid 71 cents for whatever you got from the Treasury? Mr. TRAVIS. Yes, sir. Senator REED. What was the going price before the war-35 cents an ounce? Mr. TRAVIS. Yes, sir. PREWAR SUPPLY TO INDUSTRY WAS AMPLE Senator REED. Was there enough silver available at 35 cents before the war to supply the industrial use? Mr. TRAVIS. There was ample. SOURCE OF SUPPLY AFFECTS PRICE OF SILVER Senator REED. Your tableware is manufactured out of silver that has practically doubled in price because of war conditions? Mr. TRAVIS. That is right. Senator REED. Not necessarily because of war conditions but because the place you have to go to get your silver and the price you have to pay for it? |