tion programs, or (d) the processing by domestic or foreign processors of raw materials whether of foreign or domestic origin. He is hereby directed to use every practical means, in cooperation with other Government agencies, to arrange and make, through private trade channels, such barters or exchanges or to utilize the authority conferred on him by section 4 (h) of the Commodity Credit Corporation Charter Act, as amended, to make such barters or exchanges: Provided, That the total volume of the transactions directed by this section shall not exceed $500 million annually, unless specifically authorized by the Congress : And provided further, That no material shall be excluded from barter or exchange transactions under this section by reason of the fact that it may be domestically processed (from either domestic or foreign raw materials) if provision is made for the importation of an equivalent amount of similar raw materials of foreign origin. Agencies of the United States Government procuring such materials, goods, or equipment are hereby directed to cooperate with the Secretary in the disposal of surplus agricultural commodities by means of barter or exchange. Strategic materials so acquired by the Commodity Credit Corporation shall be considered as assets of the Corporation, and other agencies of the Government, in purchasing such materials, shall purchase such materials from Commodity Credit Corporation inventories to the extent available in fulfillment of their requirements. The Secretary is also directed to assist, through such means as are available to him, farmers' cooperatives in effecting exchange of agricultural commodities in their possession for strategic materials. Also, we recommend that section 3 of H. R. 10487 be enacted. The CHAIRMAN. We thank you very much for your statement. I notice you have some recommended language, which we will consider and also confer further with officials of the Department with regard to the matters you mention. Mr. TowNE. Thank you very much. The CHAIRMAN. Any questions? Mr. ANFUSO. Mr. Chairman. The CHAIRMAN. Mr. Anfuso. Mr. ANFUSO. Mr. Towne, I want to congratulate you on a very fine statement. I notice you are in favor of extending the program to processing in this country. Mr. TowNE. That is correct, sir. Mr. ANFUSO. That would make for more employment in this country and would help the recession? Mr. TowNE. That is correct. Mr. ANFUSO. By that you do not mean to restrict processing where necessary in foreign countries? Mr. TowNE. No, sir. We just want the opportunity to compete on equal terms. Mr. ANFUSO. That is all. Thank you. Mr. HAGEN. One question. The CHAIRMAN. Mr. Hagen. Mr. HAGEN. Is it not true that the steel industry objects to some degree to the conversion of ores, converting ores into ferro-ores? Mr. TowNE. I do not know. Mr. HAGEN. You do not know? Mr. TowNE. No, sir; I do not know. The CHAIRMAN. Thank you very much. (The following letter and attachment are inserted in the record at this point:) MANUFACTURING CHEMISTS' ASSOCIATION, INC., Washington, D. C., June 3, 1958. Hon. HAROLD D. COOLEY, Chairman, Committee on Agriculture, House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: Supplementing my testimony before your committee on May 8, 1958, regarding proposed changes in section 303 of the Agricultural Trade Development and Assistance Act, Public Law 480, 83d Congress, I should like to call to your attention statistical information compiled by this association pointing out the current low level of domestic production of alloying metals. During the first quarter of 1958, the nine companies from whom we have information operated at an average of approximately 43 percent of capacity. During the early months of 1958, a number of these companies were completing production to fulfill barter contracts which had been entered into many months previous. While we do not have complete information regarding the second quarter of 1958, the preliminary data indicate a level of production substantially below the first quarter. The ferroalloy industry is currently characterized by serious unemployment and inactive facilities. This information demonstrates the importance of the statutory amendment urged by my testimony to insure participation by domestic producers of alloying metals in a continuation of the barter program. We would appreciate your printing this letter together with the attached statistical summary in the committee's hearing record immediately following my testimony. Sincerely, JAMES T. TOWNE Plant capacity and employment of 9 noncaptive ferroalloy companies for producing chromium and manganese and products in which they are principal alloying elements 1 The percentage figure shown is the operating rate to the capacity of the year in which the quarter falls. Since the 4th quarter of 1956 is that quarter in which the greatest man-hour usage occurred, it was considered as a base or 100 percent. The percentages noted in each of the succeeding quarters is the relationship of that quarter to the base. NOTE.-During the 1st quarter 1958, some members of the industry were concluding production and deliveries against Government barter contracts of long standing. The industry's operating rate for industrial consumption is estimated at below 40 percent. The 2d quarter 1958 rate indicates a further drop. The CHAIRMAN. Our next witness is Mr. Hoyt Haddock, who represents the AFL-CIO Maritime Commission. STATEMENT OF HOYT HADDOCK, AFL-CIO MARITIME COMMISSION Mr. HADDOCK. Mr. Chairman, my name is Hoyt Haddock and I am the executive secretary of the AFL-CIO Maritime Commission. First of all I want to thank you gentlemen for granting me the privilege of appearing here before you in support of the barter program. Secondly, I want to apologize for not having a prepared statement which would go to the point much better than I could orally of showing what this means to employment. Our statisticians have not been able to get it to me in time for this hearing. The CHAIRMAN. You are given permission now, without objection from any member of the committee, to file a statement at a later date. Mr. HADDOCK. Thank you very kindly, Mr. Chairman. I had intended to make some extended remarks this morning but in view of the statements of yourself, and the rest of the committee members are in agreement with you, that barter should be extended, I do not want to take your time to do that; but we are in favor of it and The CHAIRMAN. If I may interrupt a moment. The members of this committee are pretty well convinced that the barter program has been a good program. In this record, we are receiving statements and we consider those statements to be of importance. They will go into the printed record which will be read by all of the other Members of the House who are not on the committee, and also by Members of the Senate. I do not want to minimize their importance. They will be an affirmative part of the record. The CHAIRMAN. Are there any questions? Mr. ANFUSO. Mr. Chairman. The CHAIRMAN. Mr. Anfuso. Mr. ANFUSO. The barter program, Mr. Haddock, helps the entire maritime industry and it helps shipping and it helps employment, does it not? Mr. HADDOCK. Not only the maritime industry, it helps practically every industry in the country. Mr. ANFUSO. That is all; thank you. The CHAIRMAN. Thank you very much. Our next witness is Mr. George Goddard of the National Dried Bean Council. Is Mr. Goddard present? Mr. GODDARD. I would like to talk just informally The CHAIRMAN. Pardon me. As you know, we are within a very few minutes of adjournment. Mr. GODDARD. Well, then, in that case I would prefer to go over until tomorrow, if that is permissible or possible. The CHAIRMAN. We could arrange to do that because we only have about four witnesses and so we will hear you tomorrow. Mr. GODDARD. Good enough, sir. The CHAIRMAN. The last witness on our list is Mr. Harry D. Koster, vice president of the Mercantile Metal & Ore Corp. of New York. Í think that we have a statement by the Mercantile Metal & Ore Corp. If we do not, they may submit that later. At this point in the record I wish to insert the following statement of Hon. L. Mendel Rivers of South Carolina. (The material referred to is as follows:) STATEMENT OF HON. L. MENDEL RIVERS A REPRESENTATIVE IN CONGRESS FROM THE STATE OF SOUTH CAROLINA Recently the members of the Manufacturing Chemists' Association who are manufacturers of ferroalloys and other alloying metals requested the House Committee on Agriculture to amend section 303 of the Agricultural Trade Development and Assistance Act, Public Law 480, 83d Congress, to overcome administrative regulations instituted by the Department of Agriculture on May 28, 1957. These regulations prevent American metals producers from participating in the program under which United States agricultural surpluses are bartered abroad for strategic metals and mineral ores. A recent example of the unfair discrimination against American processors under this administrative ruling demonstrates the importance of the legislation requested. It is understood that the Commodity Credit Corporation, Department of Agriculture, recently entered into a contract to dispose of certain United States surplus agricultural commodities in exchange for 5,000 tons of Norwegian ferrochrome. It is also understood that the chromite, the ore from which ferrochrome metal is derived, is to be obtained from Turkey from mines, possibly owned by French nationals. The Turkish chromite will probably be transported to Norway where metal-processing equipment not now in use is to be reactivated and used for converting the chromite ore to ferrochrome. The ferrochrome will then be shipped to the United States and placed into the Government-owned supplemental stockpile of strategic and critical metals. At the present time, there is serious unemployment resulting from partial idleness of more than a dozen plants in the United States. These plants badly need contracts for the conversion of ores into ferroalloys. Prior to the May 28, 1957, policy instituted by the Department of Agriculture, American ferroalloy producers could have solicited the business of converting chromite ores from Turkey under the barter program. However, the administrative decree of the Department of Agriculture has foreclosed American ferroalloy processors from any participation in such business. The principal use of metals such as ferrochrome and ferromanganese is as an alloy in the manufacture of steel. It is well known that the steel industry is running at only about 50 percent of capacity at the present time. Noncaptive producers of ferroalloys (distinguished from the ferroalloys produced by the steel companies for their own use) are operating at an average rate of less than 40 percent of capacity at the present time. Since May 28, 1957, only one barter contract for the procurement of ferroalloys has been entered into. Thus, the discriminatory policy of the Department of Agriculture has been applied against American ferroalloy producers at a time of severe economic distress. The barter contract referred to above for the procurement of 5,000 tons of ferrochrome to be processed in Norway demonstrates the serious inequity of the Department of Agriculture's policy and illustrates the clear need for Congress to enact a statutory provision which will prevent the Department of Agriculture from continuing to treat American workers and ferroalloy producers in this unwarranted discriminatory manner. The CHAIRMAN. The committee will now stand adjourned until 10 o'clock tomorrow morning. (Whereupon the committee adjourned at 11:50 a. m. to reconvene Friday, May 9, 1958, at 10 a. m.) EXTEND PUBLIC LAW 480 Agricultural Trade Development and Assistance Act of 1954 FRIDAY, MAY 9, 1958 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee reconvened, pursuant to adjournment, at 10:15 a. m., in room 1310, New House Office Building, Hon. Harold D. Cooley (chairman) presiding. The CHAIRMAN. The committee will please be in order. Mr. George Goddard. Mr. Goddard, will you come around, please? Mr. DIXON. Mr. Chairman, before the witness starts, may I ask unanimous consent to place some data in the record? First to insert in the record a statement by C. E. Schwab, Chairman of the Emergency Lead-Zinc Committee. The CHAIRMAN. Is he for the bill or against it? If he is against the bill, we will have to discuss it a little bit. Mr. DIXON. He is on the fence. [Laughter.] Yesterday it was mentioned in the committee that possibly they were opposed. I want to make the record clear by inserting an official statement. The CHAIRMAN. Without objection the statement will be accepted. (The document referred to is as follows:) MEMORANDUM OF C. E. SCHWAB, CHAIRMAN, EMERGENCY LEAD-ZINC COMMITTEE It has been called to our attention that H. R. 10487 extending the Agriculture Trade Development and Assistance Act of 1954 is before the House Agriculture Committee for consideration. Our interest in this legislation concerns section 303 of this act (Public Law 480, 83d Cong.) which relates to the barter or exchange of agricultural commodities for other materials. During 1956 and for the first 5 months of 1957 barter transactions did absorb much of the excess foreign production of lead and zinc. The cessation of the program in May of 1957 gave rise to unprecedented imports of these two metals for industrial consumption. These imports broke the United States price to unprofitable levels, and the domestic mining industry took the full brunt of this action as many United States mines closed and thousands of employees were laid off beginning the middle of 1957. Thus our experience with barter has been anything but a satisfactory one, because it has not been administered as a longrange firm program. You will recall barter was (along with defense stockpiling) instituted by the President in August 1954 in lieu of accepting the unanimous Tariff Commission recommendations for maximum tariff relief. We have no objection to extending or expanding the barter program. However, we must emphasize that we do not look upon this program as an answer to our problem caused by unneeded imports. Admittedly, in conjunction with an adequate import excise tax or adequate tariffs and quotas, the barter program, could be of aid to the domestic lead-zinc |