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other interested friendly governments” for the establishment of committees to deal with key raw materials.
ORGANIZATION OF IMC
IMC headquarters were established in Washington, initially in a State Department building at 1778 Pennsylvania Avenue NW., and now in the new Cafritz Build 1625 I Street NW.
IMC now consists of a headquarters body called the central group and seven standing committees. The central group consists of representatives of the three original members—the United States, the United Kingdom, and France-plus Canada, Italy, India, Australia, and Brazil. Also represented on the central group are the Organization of American States and the Organization for European Cooperation,
Each country has one representative plus alternates on the central group. The present United States representative is James F. King, who also has the title of Deputy Administrator for International Activities and Defense Materials in the Defense Production Administration. Mr. King was appointed to the central group on April 23, 1952, succeeding Gabriel Ticoulat, who returned to the Crown Zellerbach Corp. Mr. King has been a Federal employee since 1938.
Participating countries have one representative plus alternates and advisers on the various commodity committees. Committee meetings are held in Washington.
So far, seven committees have been formed. They are: Copper, zinc, and lead; sulfur; tungsten and molybdenum; manganese, nickel, and cobalt; cotton and cotton linters; wool; pulp and paper.
According to a recent speech by Edmund Cetzin of the Non-Ferrous Branch, Office of Materials Policy, United States State Department, memberships in each committee are limited to those countries "which have a substantial production or consuming interest in the commodities concerned.” Twenty-eight countries are now represented on one or more committees. Mr. Getzin stated that "for most commodities, member countries together account for between 80 and 90 percent of production and consumption in the free world."
However, it is important to note that the allocations drawn up by IMC apply to nonmember countries just as to member countries. As Mr. Getzin bluntly said in his speech, the seven committees "are virtually autonomous bodies free to consider any aspect of the problem of world shortages in the commodities concerned." Office of Materials Policy, United States State Department, memberships in each committee are limited to those countries "which have a substantial production or consuming interest in the commodities concerned.” Twenty-eight countries are now represented on one or more committees. Mr. Cetzin stated that "for most commodities, member countries together account for between 80 and 90 percent of production and consumption in the free world."
However, it is important to note that the allocations drawn up by IMC apply to nonmember countries just as to member countries. As Mr. Četzin bluntly said in his speech, the seven committees “are virtually autonomous bodies free to consider any aspect of the problem of world shortages in the commodities concerned.” This is a frank statement that the IMC committees have, in their own opinion at least, unlimited power over the raw materials of the entire free world.
WHAT IMC HAS DONE
IMC committees have placed seven basic materials under allocation-sulfur, tungsten, and molybdenum beginning in the third quarter of 1951, and copper, zinc, nickel, and cobalt beginning in the fourth quarter of 1951. New allocations have been ordered for succeeding periods.
Other commodities studied by the committees have not been placed under allocation so far. Supply and demand in manganese, according to Mr. Cetzin, were judged to be “about in balance.” Cotton and cotton linters, "while in short supply last year, were expected to be much easier." The wool committee could not agree on how bad the wool shortage was and what should be done about it. The pulp and paper committee, while it has made relatively "small" allocations of newsprint, has not imposed an over-all allocation system.
EFFECTS OF IMC ON THE ELECTRICAL INDUSTRY A principal effect of IMC has been to divide up the resources and the jobsof the American people and to lower their living standards.
This is shown clearly in the case of copper. An IMC news release of December 20, 1951, announced that the United States allotment of copper in the first quarter of 1952 would be 366,000 metric tons, or 403,000 short tons. It turns out that this is also the approximate amount of primary copper that the National Production Authority authorized for United States usage in the first quarter of 1952. So it is apparent that United States consumption of copper-and this means jobs in factories throughout the United States—is being controlled by this super cartel called the International Materials Conference.
The IMC release announcing the copper allocations spoke of an "entitlement for consumption” for each country. This is a strange new term that has been dreamed up by the people who like the idea of trying to rule the world. It is this “entitlement for consumption" that determines whether thousands of workingmen in Massachusetts, Connecticut, New York, Pennsylvania, Maryland, Ohio, Indiana, Michigan and other metal-fabricating States will have jobs or will go on the dole.
It is the "entitlement of consumption” that bars electrical manufacturers and other enterprising businessmen from scouring the markets of the world to find a relatively small amount of copper that would mean the difference between the job and the dole.
On January 9, 1952, Charles E. Wilson, then Director of Defense Mobilization, speaking of the possibility of going out into the world market to obtain whatever copper we need, said: "In the case of copper, it isn't worth it for this Nation to go out and to pay higher prices and to get only a minor addition of the material.” He said that efforts are under way to get a better allocation of copper for the United States from the International Materials Conference."
Mr. Wilson ignored the fact that the barrier is not one of price, and Manly Fleischmann, Defense Production Administrator, has taken the same position as Mr. Wilson. The crux of the matter is that the people who need copper are absolutely prohibited from trying to buy it in world markets regardless of price. Messrs. Wilson and Fleischmann, through the domestic allotment system set up by their agency, have provided the mechanism that prevents American manufacturers from using any more materials than the IMC says they are enttiled to use.
IS IMC'S COPPER ALLOTMENT TO UNITED STATES FAIR, This question can best be answered by applying the very yardsticks which Mr. Fleischmann says his agency uses. When Mr. Fleischmann, representing Mr. Wilson, appeared before the Senate Banking Committee on March 21, 1952, to discuss IMC, he stated the following regarding IMC allocations:
"The share of world supply recommended for the United States has in every case corresponded closely with the share the United States secured for itself in the days of free competition for supplies in the years of 1948, 1949, and 1950."
Then Mr. Fleischmann went on to give the following explanation of how IMC allocations were computed:
"The basis of allocation in most of these metals is this: The defense production, the mobilization contribution of each country, is assessed as carefully as can be by us, and that amount of copper for the mobilization effort of each country is first set aside. That is a preferred use, you see, in each one of the countries that is contributing anything to our mobilization effort. After that, an estimate is made of the available balance of the world supply in accordance with the estimates of probable supply, and that amount, which is the amount going to the civilian economy, is then divided on a historical basis.”
Then Senator Bricker made the following comment:
"This International Conference is distributing the copper and other strategic minerals to countries who are taking no part in the defense program.”
Mr. Fleischmann replied:
“They are sharing only on a percentage use, based on their civilian use. In other words, unless they are contributing to the mobilization program, they get no recognition in the mobilization effort."
Both of Mr. Fleischmann's explanations cannot be correct. If there is a preferred allocation for defense, as he says, the United States would logically get the largest share of such an allocation. Therefore, our total share would be larger than in the years 1948–50. Yet Mr. Fleischmann has just declared that the United States' share under IMC corresponded closely” with the 1948–50 share.
THE FIGURES ON COPPER When Mr. Ticoulat, then Deputy Administrator of the Defense Production Administration, appeared before the Senate Banking Committee with Mr. Fleischmann on March 21, 1952, he stated copper was allocated by IMC on the following basis :
"A priority for direct defense requirements, provision for minimum strategie stockpiles, and the distribution of the remaining supply for civilian requirements on the basis of consumption in 1950.”
Mr. Ticoulat gave the following figures on United States copper consumption prior to IMC:
(In short tons)
Then Mr. Ticoulat gave the following figures on the results of the IMC recommendations as they affect the United States”:
Total free United States
United States world supply share
Fourth quarter, 1951.
749, 100 820, 800
49. 1 49.1
NOTE.-The United States share for the second quarter of 1952 is also 49.1 percent of the total supply.
The following facts are available upon which to make a check of IMC's copper allocation to the United States, based on the formula described by both Mr. Fleischmann and Mr. Ticoulat:
(1) In the above-mentioned speech by Mr. Getzin of the State Department (made before the American Institute of Mining and Metallurgical Engineers in New York on February 19, 1952), he said:
“The (IMC) committees have generally given a priority for direct military requirements, and metal has been set aside to meet such requirements before distribution is made for civilian requirements on an agreed basis. The problem of screening military requirements is one that has also been difficult to cope with. No standard method of calculating military requirements has been developed. Reliance must therefore be placed on other criteria such as the relative proportion of military requirements to total requirements and upon budgetary figures for military expenditures."
(2) On March 13, 1952, W. Averell Harriman, Director of the Mutual Security Agency, testified before the House Foreign Affairs Committee, the Senate Foreign Relations Committee, and the Senate Armed Services Committee. He told the committees the military budgets of the European countries in the North Atlantic Treaty Organization, including Germany, for the coming year would be $14,000,000,000. He further stated that the corresponding United States budget figure for security programs would be $64,000,000,000.
(3) Mr. Fleischmann told the Senate Banking Committee on March 21, 1952, that the military received 40 percent of all the copper used in the United States today.
CONCLUSION As long as the Government's present philosophy prevails, its only answer apparently will be to make the copper shortage still worse by placing artificial restrictions on the amount the United States may import and consume. Under these conditions, there can be no permanent solution to much of the widespread unemployment in the electrical industry. Manufacturing companies will have no choice but to continue to operate at only a fraction of their potential, and consumers who want and need their products will have to do without them. While
some companies have recently reported softening markets for their products, other employers declare the only limiting factor on their output is the copper supply.
A particularly ironic fact is that as long as the IMC is allowed to continue in business, the United States will receive only about half of whatever additional copper is produced by our own high-cost mines, such as those in northern Michigan, which are now being opened with financial aid from the United States Government. The American taxpayers will foot the bill for the Government aid to these mines, but the same American taxpayers and workingmen will receive, under the present IMC allocations, only about half of their output.
So far, the Administration has not said a word or taken a single action in the direction of getting rid of IMC, despite its dire effects. In fact, the Administration's plans, by its own words, are to transform IMC into an even larger and more powerful super cartel. Mr. Getzin's speech, made on February 19, 1952, charts clearly the course the Administration would like to follow. Discussing IMC's future, he said:
"If the allocation work of the committees is judged successful by participating countries, there is no reason why more ambitious programs relating to conservation, development, and prices should not be considered."
This is plain warning to the unemployed electrical workers and to every other American who has been damaged by IMC that this is only the beginning as far as the IMC is concerned. The only possible result, if IMC's gradiose plans for the future materialize, will be more production curtailments, more lay-offs, a declining standard of living, and weakened security for the United States.
A copy of this committee report is being transmitted to the Committee which has been assigned to study the question of the legalitv of the International Materials Conference. When the latter committee receives copies of the reports of the two additional committees which are studying other aspects of the IMC, it is expected that the legality committee will make recommendations regarding whatever corrective action is deemed most suitable.
Using these facts and the methods of allocation described by Messrs. Fleischmann and Ticoulat, it is possible to make an approximate calculation of what the United States copper allocation should be and to compare that figure with the actual allocation.
UNITED STATES SHORT-CHANGED BY 214,000 TONS OF COPPER PER YEAR Under IMC allocation, the United States gets 49.1 percent of the total free world supply of copper, as shown in the table above. Therefore, the United States total for military needs is 40 percent of 49.1 percent, or 19.6 percent of total free world supply.
Since budget figures give a fair ratio of military requirements, according to Mr. Getzin, the NATO countries' defense needs amount to fourteen sixty-fourths of 19.6, or 4.3 percent of the total free world supply. Therefore, total defense needs of the United States, plus NATO countries, are i9.6 plus 4.3, or 23.9 percent. The remainder (100 percent minus 23.9 percert) of 76.1 percert is for civilian use.
United States consumption of copper in 1950 (from Mr. Ticoulat's statement) was 47.3 percent of total free world supply., Therefore, based on 1950 consumption (which is the method prescribed by Mr. Ticoulat), our civilian allocatior : on an historical basis should be 47.3 percent of 76.1, or 36 percent.
Consequently, the total United States copper allocation should be 36.0 percent plus 19.6 percent, or 55.6 percent. However, IMC has given us an allocation of only 49.1 percent. The difference (55.6 percent minus 49.1 percent) of 6.5 percent is therefore being allocated outside the United States.
This is a staggering loss to American industry and American workingmen inasmuch as 6.5 percent of 820,800 tons amounts to 53,500 tons quarterly, or 214,000 tons per year.
In other words, the United States is being short-changed 214,000 tons of copper per year.
SHUT-DOWNS, LAY-OFFS, AND UNEMPLOYMENT Because the IMC has in effect ordered a severe copper shortage in the United States, the Federal Government has found it necessary to impose tight controls on copper usage. This is done through the contr lled-materials plan-a system whereby the National Production Authority makes detailed all-tments of copper, steel, and aluminum to fabricators. Fabricators are forbidden to use materials from any source for which they do not receive a CMP allotment.
Mr. Fleischmann admitted on March 24, 1952, that copper is in shorter supply than the other basic materials and "'is consequently the greatest single limiting factor on the extent of civilian production.”
To show specifically just what the IMC-imposed copper shortage means to American industry and workingmen, this committee has made a study of copper allocations to various consumer-type products. These studies show that the companies producing a wide variety of consumer products are being allotted only a small fraction of their normal usage of copper products.
The figures that follow apply to the following items: Small household electrical appliances, washers, vacuum cleaners, floor polishers, electric fans, freezers, refrigerators, electric stoves, electric razors.
- In the first quarter of 1952, the above products received the following percentages of their normal consumption:
Percent Copper brass mill products
35 Copper wire mill products
40 Copper foundry products
35 During the second quarter of 1952, the percentages were even lower: Copper brass mill products
30 Copper wire mill products
35 Copper foundry products
30 The base or normal period in the above allocations is usually an average quarter in the first half of 1950.
Radio and television sets have been cut even more. Their allocations of copper foundry products for the first and second quarters of 1952 respectively were 20 percent and 1214 percent.
Allocations of copper brass mill products to portable lamps were only 10 percent in both quarters of 1952.
Lighting outfits received only 10 percent of their normal usage of copper brass mill products and no allotment of copper foundary products.
The stringent restrictions on copper consumption, of which the above are just a small sample, have led inevitably to production curtailments, lay-offs, and unemployment. This has been expecially true in the electrical manufacturing industry because these companies have a basic dependence on copper as a raw material.
A recent survey of major labor markets by the United States Department of Labor provides a representative sample of the cities that have already undergone some distress because of curtailments in electrical manufacturing. The cities include the following:
New Britain, Conn.; Herrin-Murphysboro-West Frankfort area, Illinois; Evansville, Fort Wayne, Indianapolis, Vincennes, Ind.; New Bedford, Mass. Grand Rapids, Mich.; St. Louis, Mo.; Cincinnati, Lima, Lorain-Elyria, Ohio; Lancaster, York, Pa.
The committee wishes to emphasize that this list is far from being all-inclusive. It is intended to be merely a cross section that shows how the effects of IMC actions with regard to copper and the electrical industry are felt throughout the length and breadth of the United States. In some areas the problem is becoming worse. In Connecticut, for example, a considerable segment of the brass industry has recently gone on short workweeks because of the copper shortage.
WHAT A LARGE UNION SAYS Another view of the effects of the copper shortage was presented to the Senate Finance Committee by Harry Block, vice president of the CIO International Union of Electrical, Radio, and Machine Workers, on February 22, 1952. Mr. Block testified there were over 47,000 unemployed in the industries covered by his union as of the end of 1951. Of these, about 15,000 were in radio, television and related industries; 8,000 in appliances and lamps; and 24,000 in household electrical equipment. This was equal, Mr. Block said, to about 11 percent of the total employment that existed in these areas a year earlier. Most of this unemployment had lasted at least 6 months, Mr. Block said, and in the case of the last-named two groups, it was growing.
Mr. Block stated that one of the three major causes of unemployment among electrical workers is the following:
“The reduction in allocation in critical material to consumers' electrical goods. This in turn has been due to the shortage of materials, principally copper.”