Data for the supply side of each balance sheet are obtained from specialists in the United States Bureau of Mines and the United States Geological Survey who have followed the particular commodity; and from the commodity branches of the Supply Division, that get much of their information from the applications for assistance that come from private industry. Both domestic and foreign sources are considered.

Indicated requirements figures include the quantity needed for the security stockpile, for the Military Establishment, and for the civilian economy. Policy, fixed by the Office of Defense Mobilization, specifically provides that the civilian economy shall be given adequate raw materials, insofar as it is practicable. Determination of sound figures for annual requirements for 5 years in advance presents one of the most difficult problems in preparing a balance sheet. The principal source of such estimates has been the series of basic data sheets prepared by the Interdepartmental Stockpile Committee. Miscellaneous data are obtained from various Government agencies and from other sources, the Office of Economic Analysis being a focal point for the collection of such information.

In some instances requirements can be determined accurately on the basis of a predominant use that already has been determined. For example, the projected steel-plant capacities are well known; and from them the quantity of iron ore required each year is readily calculable.

However, in general, requirement estimates involve much conjecture and figures from various Government agencies for the same commodity often vary widely. This presents one of the most serious problems for the programing panels. Late in March an arrangement was made with the Director of the Office of Programs and Requirements of the Defense Production Administration to supply to DMA figures that had been agreed upon by interested Government agencies as the best estimates presently available. These are to be designated for specific years, i. e., 1952, 1953, and so forth, rather than for the first, second, third, and so forth, years of a hypothetical war as has been the practice in the past. This arrangement will expedite the work of programing by the DMA. It may be noted that the known shortage for certain commodities is so great that the only rational course is to obtain every ton or pound of material that is at all feasible. For this reason, the preparation of a program has been deferred so as to give attention to other more urgent programs. In this group are: Diamonds (industrial), cobalt, columbite, graphite (strategic grades), quartz crystal, monazite (rare earths).

Programs prepared as of March 28 can be classified generally in three categories described as follows:

(1) Completed programs consisting of a balance sheet showing the expansion in supply (if any) that is needed; and giving in some detail the sources from which, and the methods by which, DMA expects to obtain the additional supply. Included also is an estimate of Government funds that may be required to achieve the program. In this group are: Aluminum, antimony, chromite, copper, iron ore, kyanite, magnesium, mercury, molybdenum, tungsten, zinc.

(2) Incomplete programs containing a balance sheet; but in many instances using requirement. figures prepared by DMA, independently. The sources and methods of expanded production are not as well developed as those of the programs of group 1. In this group are: Asbestos, cadmium, cobalt, fluorspar, graphite, lead, limestone-dolomite (flux), manganese, nickel, platinum, sulfur, tin.

(3) Schedule of current and prospective supply without any matching requirement figures. In this group are: Diatomite, fuller's earth, lime (burned), magnesite, mica, phosphate rock, potash.

STATEMENT OF PHILLIP R. BRADLEY, CHIEF, CHROME-MANGANESE-TUNGSTEN BRANCH, SUPPLY DIVISION, DEFENSE MINERALS ADMINISTRATION

I have been Chief of this Branch since January 4, 1951. My capacity in private life is consulting engineer for the Alaska Juneau Gold Mining Co.; and president, Pacific Mining Co. and the Atolia Mining Co. Pacific is an exploration and operating subsidiary of Alaska Juneau. Atolia is a tungsten producer, probably the oldest in the United States. A public position I hold is chairman of the California State Mining Board.

My father was a mining engineer, and his before him; I grew up in mining camps, worked in the mines, graduated from a mining college and have followed the profession for over 25 years. In this time I have seen the spending, and have assisted in or directed the spending, of several millions of dollars in an effort to prolong the lives of some very cempetent mining organizations; but as events have turned out, to little avail. I am rather discouraged with the future outlook for mining, but feel I know what it takes for a mining operation to survive and to produce.

My commodity branches in DMA function in principle no differently than any of the other commodity branches. Our primary function has been to post the Program Division on the prospective supply and demand positions for our three commodities for the years 1951 through 1955, and our next function to give first examination and to report on the applications for Federal assistance put in by those who wish to produce. The personnel in these branches totals six, including an engineer, an executive assistant, and another engineer employed as a rewrite man. The latter has proven necessary because the real problem in processing applications has been not one of making a decision or of reaching conclusions about a proposal, but instead is one of converting these to a form-to the proper report, recommendation, or letter-by which it becomes useful to someone else along the line. There are two typists, who are simply swamped. This describes the present DMA staff of the Branch. Beside these there are three advisers available to me from the Geological Survey, and two specialists from the Bureau of Mines. All five are men of a surprising and most gratifying competence and association with them is an important compensation of the job. The Bureau men have so many duties beside their advisory ones toward DMA that their usefulness to DMA is often restricted. However, it has turned out that most of the assistance applications before us may be judged by geologic criteria, and the Survey's information is the information most frequently needed.

The Commodity Branch, in its work with the assistance applications, is the first point of contact with the mining public. Most applications are presented by mail and we try to encourage this means as it takes less of that premium article, time. A certain amount of personal contact cannot be avoided, especially when guiding a prospective applicant into the right form of application, as in the more complex cases. Nevertheless, the process work moves fastest when there is the least presentation in person.

Of the three metals with which my staff deals, tungsten is the most critical from the standpoint of present shortage. Manganese and chrome are not critically short today though manganese ores have been put under allocation. It is the threat of shortage which is most serious, owing to our dependence on foreign supply. Incidentally, the effect upon the foreign market of too widely publicizing our needs and impending shortages has been adverse to us; conversely, strong publicity for our programs leading toward self-dependence will have favor, able effect on the sensitive foreign supply.

THE METALS

Chrome is characterized by its difficult policy problem. Should there be no interference with supplies from abroad, there will be no serious shortage of the ores of the metal in the next few years. Should effective interference with ocean shipping happen, by reason of war, or otherwise, there can be a devastating shortage. In the light of this threat, our facilities and techniques for extraction of useful products from domestic ores are in a primitive stage indeed. For example, we have deposits where considerable chrome-bearing rock exists; the chrome in these ores is present in amounts equivalent to many years' industrial demand; but with today's production methods it simply is not available to industry. Where our chrome ore can be mined in greatest quantity, and most cheaply, the chrome product we can make of it is almost wholly unsatisfactory for industrial use. Where our deposits of ore are of such a nature that the natural product is good, this ore is extremely expensive to bring forth, and may supply at best but onetenth of the need. For this ore the degree of subsidy must be great, and the return is the least. The result is that decisive action has not yet been taken on this aspect. In the more important aspect, i. e., the problem of making useful the large low-grade chrome deposits, there are unsolved problems in extractive metallurgy. As one means of its solution, I am trying to encourage industry to undertake experimental work. In the past the Bureau of Mines has done much, but it must be taken up, and made industrial, by industry. We would

accept applications for loans for the purpose, or might recommend service contracts.

Only eight applications for assistance in chrome have been received, but all must wait upon determination of policy or upon metallurgical development. The demand for chrome (all classes) in 1950 was 900,000 tons. The United States supply was nil, and importations were 1,300,000 tons.

Manganese. The western manganese applications have been simplest to decide upon, but they have involved the most paper work and undoubtedly make the roughest going for the Production Expansion Division of DMA. They are simplest for decision because of the great amount of ground work done by the Bureau and the Survey in recent years. They are difficult in paper work because the three major projects so far undertaken have involved in each case the establishing of a central agency, to deal with a multiplicity of mines of different ownership and of different characteristics and problems. One has required reactivation contracts with two milling plants, loans, and purchase contracts to four mines, and a purchase contract with a fifth. Another involves rehabilitation of Government facilities and a service contract for their operation, and requires purchase contracts with a number of mines. The third involves a loan for the erection of a large mill, and a purchase contract for ores from a number of mines. A fourth project still under consideration involves a loan for a mill, requires a rather large loan, and must proceed with caution. A fifth was completed in December. All these involve purchase of ores at prices above the going market. A sixth, recently completed by DMA, involved only a small loan.

The aggregate quantity of manganese to be expected from the six projects cited will run about 100,000 tons, which should be forthcoming by the end of 1952 against a national demand expected in 1952 of 2,200,000 tons. Other production should bring domestic output to 200,000 tons. Imports can be expected to make up the difference.

Tungsten shows the greater number of applications. This is to be expected because the tungsten mine is typically small. Tungsten also shows the greatest shortage of supply. In fact, the shortage is of almost a disastrous effect on the consumers. There are only about 40 processors of tungsten ore; 20 percent of them are shut down, or are on the verge of it. The quantity required is not large in dollars; the effect upon the Nation of not having it is very large in dollars. The national demand is now double that of recent normal years, and may be expected to double again. It may reach 15,000,000 pounds this year. At the beginning of 1951, we expected to mine domestically some 5,000,000 pounds and to import some 7,000,000 pounds. The deficit on this basis would have been small, one which might have been met by industry stockpiles. We do not have this expectation today. Production may later increase; imports have practically stopped. Against a rising market and a posted price of $65, United States prices were frozen at varying individual levels in January, said to run from about $28 to $65 per unit. This itself curtailed current production and apparently ended the efforts of that small industry to expand production. Foreign prices have continued to rise, and little if any is currently entering the country.

To expand domestic production, it has been the effort of the DMA to work out an offer to the public for $63 for specification material, good for 5 years. This has behind it the precedent of an offer good for 10 years made by the AEC for uranium ores. Also, it has behind it the thought that only by term guaranty can industry be encouraged to make the capital investment necessary to activate what we regard as the typical new sources, and that only by a flat and universal offer can we expect to avoid the practically impossible administrative burden of individual contracts with a myriad of small mines or of subsidies to individuals. The publication of this offer has had to await the establishment of a ceiling price by the OPS. We learned informally only last week that this had been done.

We may now proceed to undertake processing of many of our tungsten applications. Many others, however, must wait on the formal announcement of the regulations and detail for the mine exploration program.

General. In the determination of fit into the commodity program it is not at present necessary for my branches to compare the production expected from any assisted project with the over-all commodity goal, for the simple reason that the present domestic production is so low, and especially in tungsten.

Output of work has suffered from the usual ailments of a new and shorthanded organization attempting a job for which there were no precedents.

Altogether, we have undertaken to process eight applications for assistance in chrome; 66 applications for assistance in manganese; and 67 applications for assistance in tungsten, making a total of 141.

There have been six categories of disposal: (a) Outright denial; (b) recommendation for favorable action; (c) suspension pending receipt of further information requested of either applicant or DMA field team; (d) suspension for referral to applicant when exploration program is activated; (e) suspension pending policy decisions such as a tungsten price or a chrome price; (f) suspension for lack of facilities to consider.

Breakdown of the present status of the 141 applications mentioned above runs

The foregoing refers to formal applicaitons only and does not include perhaps 200 or more letters generally of the order "I have found some ore on my property; what will the Government do to help me?" These letters, simple as they are in principle, require a great deal of answering. Some will convert, in time, to formal application for exploration assistance. All inquiries reaching the DMA requesting either specific or general information having to do with our three commodities are referred to us. These are so numerous and so often either without factual content or so catholic that their answers represent possibly one-third of the expenditure of time by the personnel. Program, special requests within the Agency, and meetings occupy roughly another third. Application processing occupies the last one-third.

STATEMENT OF OTTO HERRES, CHIEF, LEAD-ZINC BRANCH, DEFENSE MINERALS

ADMINISTRATION

I. PAST EMPLOYMENT AND BUSINESS ACTIVITIES

Graduate Colorado School of Mines, 1911. Awarded medal of merit, 1949. 1907-11: Worked as miner and millman at metal mines in Colorado, Nevada, and Utah.

1911-17: Resident engineer and superintendent of construction, Utah Fuel Co. properties in Colorado and Utah. Asissted in opening and developing large coal mines.

1917-37: Successively superintendent, assistant to vice president, assistant general manager, vice president and general manager, United States Fuel Co., Utah; also assistant to D. D. Muir, Jr., vice president and general manager, United States Smelting, Refining & Mining Co.

1938: Consulting engineer, various coal and metal mines.

1939-41: Assistant general manager, Combined Metals Reduction Co., operating lead-zinc mines and mills in Nevada and Utah. Also assistant to E. H. Snyder, general manager, Triumph Mining Co., Hailey, Idaho.

1941-44: Managed the opening and operaiton of the MacIntyre property of National Lead Co., Tahawus, N. Y., producing titanium and iron concentrates.

1944 to December 6, 1950: Vice president and director of Combined Metals Reduction Co., operating lead-zinc mines and custom flotation mills in Utah and Nevada, assisting E. H. Snyder, president and general manager.

December 6, 1950 to date: Called by Defense Minerals Adiministration to assist with work; on loan from Combined Metals Reduction Co.

Member: Arizona Small Mine Operators Association; Colorado Mining Association; New Mexico Miners and Prospectors Association; Utah Mining Association, director; American Mining Congress, chairman of subcommittee on tariffs, stockpiling, and incentives; American Institute of Mining and Metallurgical Engineers; mining standardization correlating committee, American Standards Association.

At various times: President, Rocky Mountain Coal Mining Institute; president, Utah Coal Operators Associaiton; president, Intermountain Alumni Association of Theta Tau (engineering fraternity); chairman, Utah section, A. I. M. E.;

chairman, joint negotiating committees negotiating various labor agreements with U. M. W. of A. F. of L., C. I. O., and M. M. & S. W. unions.

At various times represented Arizona, Colorado, Idaho, Montana, New Mexico, and Utah mining associations at Government hearings on world trade and tariffs.

II. PRESENT TITLE, DUTIES, AND RESPONSIBILITIES:

CHIEF, LEAD-ZINC BRANCH, SUPPLY DIVISION

The duties and responsibilities assigned to the Lead-Zinc Branch are to perform the functions of the Supply Division in regard to lead, zinc, and associated metals such as cadmium. The functions are stated as follows:

"Establish standards and procedures by which the Bureau of Mines shall collect, analyze, and maintain statistics on the production, stocks, consumption, and flow of metals and minerals; accept from the Department of Commerce forecasts of the total military and essential civilian requirements of products. issuing from the metals and minerals supply system; advise on adjustment of requirements to supply; distribute metals and minerals within the supply system in accord with allocation and priority determinations; maintain current analyses and forecasts of total supply of all critical metals and minerals; establish goals for the expansion or productive capacity of metals and minerals in the light of forecast requirements; recommend conservation and limitation orders; utilize to the full the facilities of the Bureau of Mines and Geological Survey in the performance of these duties."

In the performance of these duties I have the assistance of Richard H. Mote, United States Bureau of Mines; Edwin T. McKnight, United States Geological Survey; and Gunnard E. Johnson, retired Anaconda Copper Co. employee, on loan to Eagle Picher Co. as general manager of East Chicago metal refining and pigment production plant from 1946 to 1949.

III. ACTIVITIES, ACCOMPLISHMENTS, AND OBJECTIVES OF THE LEAD-ZINC BRANCH (a) Recommended and assisted in the formulation of the minerals exploration program.

(b) Recommended and assisted in the appointment of zinc and lead advisory committees made up of representatives of small independent, medium, and large business enterprises from the different geographical areas of the United States. (c) Held meetings of Zine Advisory Committee on February 26, 1951, to consider a domestic exploration program, procurement contracts, incentives for expanded production, and assistance to the mining industry in maintaining adequate manpower, equipment, supplies, housing, and related subjects.

(d) Held similar meeting of Lead Advisory Committee on February 27, 1951, to consider ways of expanding and maintaining United States production of lead.

(e) Submitted to Zinc Industry Advisory Committee plans to expand the domestic supply of zinc:

1. By Government 5-year guaranteed minimum price. 2. By incentive bonus.

Advice from committee members was that measures to insure price stability would be the best way to bring about expanded domestic production for the long range.

The Lead-Zine Branch has prepared for submission to Defense Production Administration a guaranteed purchase program in accordance with this advice. (f) In addition to recommending and formulating programs for maintaining and expanding metal production, the Lead-Zinc Branch has answered hundreds of inquiries for information concerning Federal aid which is available to zinc properties in the following forms:

1. Accelerated amortization.

2. Purchase contracts at the current market price with a floor price for 3 years. 3. Loans on applications certified by DMA provided private financing is not otherwise available on reasonable terms.

Federal aid is available for both lead and zinc properties in the form of matching funds for exploration work. A total of 868 applications for assistance in various forms has been submitted to Defense Minerals Administration to date,