Our union celebrates its 60th anniversary this year. Therefore, our union and its members have a tremendous stake in the lead-zinc, and copper industry and its future. We believe that this organization because of its more than half a century of work in the industry knows a great deal about the industry and has some concrete suggestions to make to this committee on the matter now before it.

I would like to say at the outset that our organization has not come before this committee to discuss the entire question of the matter of the tariff act. We are confining ourselves to a discussion of those sections of the bill by Mr. Simpson of Pennsylvania which deal directly with the question of lead and zinc. However, since the Simpson proposals on lead and zinc involve the question of sliding-scale tariffs, it is likely therefore that we shall cross over in some degree to a discussion of the tariff question generally.

We should also like to add for the information of the committee that this is not the first appearance my organization has made on this subject during this session of the operations of Congress. Within the past several weeks the national officers of my organization have testified in Denver, Spokane, and in Phoenix on the situation in the lead and zinc industry. These appearances were made before the Committee on Small Business, House of Representatives. Obviously, therefore, the position that we take here today is essentially the position taken by the Mine, Mill, and Smelter Workers in the other hearings before committees of Congress. However, because of the period of time allotted we shall attempt to be more brief.

Our union has asked for the privilege of testifying before this committee because (1) our members are vitally concerned with the health and well being of the lead and zinc industries, as we indicated above; (2) the present crisis in the industry has already caused serious harm to a large number of our members, their families, and the small-business men in the communities in which they live: (3) we are fearful that the ailments from which the lead and zinc industries are now suffering may soon affect other metals, including copper; and (4) we believe that relief for the small operators in these industries will mean restoration of good health and stability for the entire industry including, of course, full emplovment for our members, who are now unemployed, only partially employed, or in danger of being laid off.

While crisis has been common, unfortunately, in the operation of the lead and zinc industries, there are two features in the present situation which are verv unusual, perhaps even unique. They are first, the fact that these 2 metals, lead and zinc, are suffering from crisis at a moment when the rest of our economy. including the other nonferrous metals, are enjoying a boom. Copper now being produced by United States mines, mills, and smelters at a rate never before achieved is finding ready buyers at prices which are easily the highest in history. The second unique feature is the fact that the United States producers of lead and zinc are in serious difficulties at a moment when the domestic demand for the use of both metals has remained at just about the same levels reached in the months after the onset of the Korean war.

What has been the result of the serious difficulties which the lead and zinc industry finds itself in? The foremost fact of all is that a great many lead and zinc operations have either curtailed production or shut down altogether in the last 8 to 10 months. Most distressing of all about the shutdowns is the fact that the small independent producers have been hit hardest. In addition, in those operations of lead and zinc which have not shut down a great many have already been affected by cutback in work and layoffs. Thousands of our union members have been hit by this loss in take-home pay or unemployment. This situation develops as our lead consumption in the United States in 1952 amounted to 1,130,000 tons, only some 55.000 tons less than the 1,185.000 tons consumed here in 1951. In zinc, our consumption for 1952 is only 1 percent less than in 1951. On industrial consumption, excluding Government purchases, there is a drop in zinc consumption from 1951 to 1952 of 9 percent.

Yet lead prices have dropped 32 percent from 1952 high of 19 cents and zinc has dropped almost 44 percent from the 19% cents high in early 1952. So we have a crisis picture showing a continuing high domestic consumption of lead and zinc, accompanied by a boom in copper production and prices, yet contradicted by rapidly falling prices, production, and employment in the lead and zinc industries.

How does this all come about? The members of the committee, I am sure, will agree that the basic reason for the crisis at the present time may be summed up in one word-imports. The small lead and zinc operators, the

thousands of unemployed lead and zinc miners and smeltermen are the victims of an international trade picture that today is growing steadily worse. Metals which normally were flowing from Mexico, Australia, Canada, and Africa to England and the rest of Western Europe, because of the shifting winds of the cold war and the restrictions on the economies of the Western European nations, resulting in a general economic decline, have now been pouring into the United States market in a mounting flood during the last year. Our lead imports in 1952 jumped 147 percent from 1951, while zinc imports went up 43%1⁄2 percent for the same period.

But to get at the real significance of these imports, we must ask who owns or controls the operations from which they come. The answer is an eye opener. For both lead and zinc we discover that control of the most important metal operations abroad is in the hands of United States corporations. The major increases in lead and zinc imports from Mexico, for example, came as a result of decisions made by men who run the American Smelting & Refining Co. and the American Metal Corp. These imports are foreign only in the sense that they come from mines located in other countries-control and the profits are in the hands of corporations which have their headquarters in this country. Likewise, there has been a significant increase in lead imports from the Union of South Africa, where the famous Tsumeb properties controlled by the Newmont Mining Co. and the American Metal Co. are located and from French Morocco, where Newmont and St. Joseph Lead with our taxpayers' money are developing one of the most promising ore bodies found in recent years.

Therefore, in trying to solve this problem, the crisis in the industry, it is important to remember that the imported ores, bullion, and refinery concentrates are not "foreign owned." They are foreign produced but they are United States owned and controlled. And the United States control is in the hands of the very biggest corporations in the industry, the same corporations which have suffered least from our lead-zinc crisis, or which are actually in a position to profit from it. But even this is not all. The control of world's metal production is in the hands of a few giant American corporations, which has been extended tremendously to new foreign properties in recent years. And the vast majority of these investments in nonferrous properties abroad has been made at the expense of the American taxpayer. Senator Henry C. Dworshak, of Idaho, reported during the first week of this year that the United States Government has handed out more than $245 million in aid to foreign mineral production since the Korean war began. Most of this money was handed to United States corporations which control foreign operations. Senator Dworshak further stated that American mining concerns are developing mining subsidiaries abroad to take advantage of low-cost labor and United States subsidies not given to domestic production.

What does this all add up to? It means that our Government has been making huge handouts to United States corporations to be used in exploiting low-wage labor in Africa and elsewhere for production of metals which now flood our market and force our small, wholly domestic small operators to shut down and throw our workers out of jobs.

This is the problem. Fortunately, we do not believe the ailments from which these industries now suffer are incurable. We believe there are sound and attainable solutions.

But we do not believe high-tariff duties, sliding-scale tariffs are the answer. It is our firm belief that such a program could only tend to aggravate the situation and to force the shutdown of an even greater number of our smaller producers.

Here is why we feel this way:

1. A tariff fails to recognize that the program is worldwide. It seeks to insulate the domestic industry from the rest of the world. To the extent that a tariff succeeded in keeping foreign metal out of the United States it would make it that much more difficult for foreign countries to buy here. The crisis in world trade is at the root of the lead-zinc situation. A tariff would be selfdefeating. It would merely aggravate the world-trade crisis.

2. We have serious doubts whether even a sliding-scale tariff would give enough protection to the high-cost producers. Because of the wide difference in costs such marginal operators need a great deal more protection than low-cost mining companies. Mr. Palmer, of the Colorado Mining Association, was right, we believe, when he noted that "small protection" for the St. Joseph Lead Co. might still be inadequate for many other companies. At the same time a tariff which gave inadequate protection for small companies might easily produce windfall profits for the large operators.

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3. Tariffs have never been really effective against foreign competition in time of economic crisis. In 1934, for example, there was a 4-cent tariff duty on copper. Yet the United States imported 213,330 tons of copper, almost as much as our domestic mines produced in that year. All through the 1930's as a matter of fact, the nonferrous metals industry suffered from depression, despite the fact they were supposedly protected by a relatively high tariff wall.

4. The small producer who now needs the most aid would get the least from increased prices enforced by a tariff. His slice would come only after the smelters, railroads, power companies, and landowners got their's, since these charges are based on metal prices and go up as prices increase.

5. Finally, a tariff would act as a hidden tax paid by the consumer. would tend to force competitive substitution of other metals.

This

These are some of the main reasons we oppose any tariff plan as a solution to the present crisis, whether it's a straight cents-per-hour tariff or a slidingscale import duty. As the membership of our union see it the solution is not to seek a bigger share of a shrinking market but rather to work for a bigger market so that all will have their share.

Therefore, the program of our union calls for action directed in two ways. First, immediate short-term relief of the situation; and secondly, long-range planning and activity.

We believe that such a program could be best effected by the following kind of action: (1) Relief of the industry, the key to which is the passage of the premium-price plan bill, S. 1539, introduced by Senator Murray, of Montana, on April 1 of this year. (While we believe the basic principle of this bill is sound, we should like to suggest some amendments which we shall do shortly in our testimony); (2) relief of lead and zinc workers, including much higher unemployment compensation for those who are unemployed, and a substantial wage increase for those who still have jobs; (3) increased consumption of lead and zinc, not only in the United States but in many other parts of the world. I wish to call this committee's attention to the fact that our union places great emphasis on the need for quick action by Congress on Senator Murray's mine-incentive payment bill. This proposal, in Senator Murray's words, is a "modernized version" of the premium-price plan which was so successful in stabilizing and insuring maximum production in the nonferrous metals industry during World War II.

A cardinal feature of this new bill is that it is designed specifically to encourage small and marginal lead and zinc mining operations. It aims to put the small-business man, in the lead and zinc industry, back into business.

Another important purpose of this measure in our opinion is to decrease and if possible eliminate the dangers of manipulation by United States metal monopolies of the metal market through dumping of metals produced abroad and controlled by the House of Morgan.

Senator Murray's proposal, is frankly a subsidy bill, but there is an important difference between this kind of a subsidy and the kind which we believe the Defense Materials Procurement Administration has been handing out up to now. Senator Murray's plan would be of aid primarily to the smaller operators. With very few exceptions the DMPA's subsidies of the past 3 years have aided the big producers only. We consider this a crucial difference.

We have two amendments to suggest by way of strengthening the Murray bill, and making it more workable.

First, the payment of subsidies is limited by the bill entirely to the needs of national security stockpile. The Munitions Board could stop payments by determining that a given metal is no longer needed for the stockpile. A more desirable approach, we believe would be to create a separate stockpile for the expressed purpose of promoting conservation of resources and stabilizing metal prices. This would serve to separate the issue of metal markets stability from the shifting winds of the cold war. The kind of conservation stockpile we have in mind is the same as that envisioned by Senator Edwin Johnson of Colorado in his metal-corporation “parity plan," S. 869.

Second, we strenuously oppose the provision in section 4 (d) which would authorize the DMPA director to stop payments operator paid wages higher than those prevailing in the district. cuss this point briefly here, because it is important to us.

(2), of the bill, whenever any I'd like to dis

We are sure that Senator Murray inserted this proviso with the idea that it would act to block any pirating of labor in a period of manpower shortages. However, the possibility of a manpower shortage in the nonferrous metal industry now or in the foreseeable future seems very remote.

At the same time this proviso could be interpreted in such a way as to make it impossible to negotiate a wage increase with any single operator in a given district. Take for example the present situation in Coeur d'Alene in Idaho, where our union is now negotiating for a wage increase in line with the patern that was won months ago throughout the rest of the industry. If this bill were now a law it could act as a bar to prevent any Coeur d'Alene operator from negotiating a wage increase with our union unless all or a majority of the operators simultaneously agreed to such an increase. As a substitute for the provision just mentioned we would urge an amendment to provide that in order to obtain production payments an employer would be required to observe minimum standards of health and safety, and to pay at least the prevailing wages in the area. We press upon Congress the need to give favorable consideration to the Murray mine-incentive-payment bill including those amendments here suggested.

We recognize that the Johnson bill, S. 869, has the worthwhile purpose of trying to alleviate the crisis in the lead and zinc industry. However, we are concerned that many of its provisions are so vague and ambiguous that it would be unworkable merely from an administrative point of view if it were enacted into law. So much for a program designed to give immediate relief to the crisis in the industry.

Now we should like to suggest a longer range program of action, but also, in our opinion, for immediate consideration. Here we have three major recommendations:

1. Legislation to provide unemployed lead and zinc workers, regardless of where they live, with direct Federal assistance, over and above the present unemployment compensation standards. I need not tell this committee that jobless compensation payments in those States where the lead-zinc crisis has hit or threatens to strike, are totally inadequate. Action must be taken quickly to provide for the basic needs of families of miners and smeltermen who are now jobless and who otherwise will drift away from the industry entirely.

2. An immediate and adequate wage increase in those lead and zinc operations which are still in production, as well as those which will be brought back into production by the Murray premium-price plan.

3. Immediate action by Congress to lower income taxes on workers and in particular action to increase personal income-tax exemptions to at least $1,000. Income taxes today represent the heavy, onerous, and unfair burden on all working people. The average worker in this industry today is paying 27 to 28 cents per hour out of his pay for direct payroll taxes only. These taxes are particularly obnoxious to metalworkers who know that the same tax moneys are being used to give big handouts to giant nonferrous-metals corporations so that they can expand their hold on the industry both at home and abroad, and thus depress the living standards of our own workers.

I should like this committee's attention to the fact that the income-tax setup as it now stands, results in a startling contrast between the resources of the employers and those of the workers to cushion the shock of the current crisis. The carryback and other tax provisions are designed to favor only the employers; no such provision exists to relieve the worker.

Increase in the consumption of lead and zinc, both at home and abroad, is the third way in which we believe these ailing industries can be relieved.

Recent world events have pointed up a very sharp question in the minds of the American people. Eventually peace must and will come, they are reasoning. What then is our Government doing to prepare for peace?

It is agreed by economists on all sides that the chief factor which has kept our economy going at "boom" levels in recent years has been the huge arms budget. Someday, sooner or later, we are going to have to face up to the issue of how to keep our economy stable and healthy even though arms expenditures are reduced or eliminated altogether. We might add that we are happy to see an ever-growing number of people in public and private life beginning to address themselves to this problem.

We, however, believe the time to plan and act is now.

We believe that Congress should undertake immediate and favorable consideration of the great number of bills before it which provide for a tremendous program of new public works, all projects which are urgently needed by the American people and the American economy. Development of the Missouri and the Columbia Valleys, the building of new highways, rebuilding of old roads, construction of badly needed schools, hospitals, rural-electrification systems, and low-cost housing. All these projects would increase tremendously domestic markets for the metals we provide.

But the potential market for nonferrous metals is not limited to our needs here at home. Foreign trade is rapidly becoming the key to foreign policy.

No wonder the slogan "trade, not aid" has become exceedingly popular among the nations of Western Europe in the last year.

The Wall Street Journal (April 10, 1953) reported on a speech made by Secretary of Commerce Sinclair Weeks before a group of Boston businessmen in which Mr. Weeks said "real world peace could mean world trade would be stimulated with American goods once again being sold to satellite nations." If, as all Americans hope and pray, we shall soon enter a period in which the coldwar tensions will be relieved, there is the opportunity for removing at least some of the barriers which now block all trade with Eastern Europe and China. This would, of course, result in an immediate improvement in the lead-zine situation in this country.

So, these are the key elements of our union's proposals to meet and overcome the present crisis in lead and zinc. They grow out of our belief that the crisis is part of a larger picture, that it cannot be solved piecemeal, and that unless immediate and long-range steps are taken toward a many-sided solution the crisis will not only deepen but will spread to other metals, and ultimately to our entire economy.

Our program, therefore, can be summed up in these terms:

Relieve the lead-zinc industry by passing the Murray premium-price bill, with appropriate amendments.

Relieve the lead and zinc workers by passing a law to provide direct Federal aid, over and above ordinary unemployment compensation, by granting an immediate and substantial wage increase to workers still employed in the lead and zine industry, by reducing income taxes, and by passing a bill to increase incometax exemptions to $1,000.

Increase domestic consumption of nonferrous metals by passing legislation for a sizable public-works program, including river valley developments, school, hospital, highway, housing, and rural-electrification construction.

Increase foreign consumption by reexamining barriers which now block trade between the eastern and western halves of the world.

We vigorously urge this committee to give earnest and careful consideration to all these proposals, bearing in mind that they are a "package," the individual parts of which are closely related to each other.

Mr. CLOTT. Mr. Chairman and members of the committee, as I have indicated, I am the Washington representative of the Mine, Mill and Smelter Workers Union. The organization for whom I speak today is the organization which represents the overwhelming majority of the workers in the nonferrous metals industry-in the mines, the smelters, and the refineries.

Now, if I am listed here as an opponent to the bill I want to state that the opposition is not in the fact that we feel there is a crisis in the industry and something should be done. We feel definitely that something should be done and done immediately. It is just that our union and our organization does not feel that the proposals made by Mr. Simpson in his bill would solve the problem as we see it.

Some of the objections we have are that the tariff would fail to recognize that the situation and the crisis is worldwide. The tariff would seek to insulate the domestic industry from the rest of the world. To the extent that a tariff succeeded in keeping foreign metals out of the United States, it would make it that much more difficult for foreign countries to buy here-our manufactured products, of course.

The crisis in world trade is at the root of the lead and zinc situation. We feel that a tariff would be self-defeating. It would merely aggravate the world trade crisis.

But now, even more important: We have serious doubt whether even a sliding-scale tariff would give enough protection to the highcost producers, and I think that this situation has affected, in the main, the high-cost producers. Most of our members who are out of work are members who work in mines which are high cost.