Mr. ENGLE. I asked specifically whether or not you have a policy on chrome. A "Yes" or "No" answer will suffice.

Dr. MORGAN. We do at the present time.

Mr. ENGLE. What is it, and where is it?

Dr. MORGAN. The policy on chrome is contained in a secret letter, sent by the DPA to the DMA and I am not at liberty to disclose what it is at this hearing.

Mr. ENGLE. What is it doing over in DMA? They can't make any decisions. Dr. Boyd sat right where you did day before yesterday and said that all he could do is recommend and there are at least five fellows up the line ahead of him. He is the bottom face on the totem pole. He is right next to the foundation of it. What did you send it back over there for?

Dr. MORGAN. The DMA did recommend to us a chrome policy. We approved all of the elements of that policy except one, and sent it back not only to the DMA but to the Emergency Procurement Service and to the Munitions Board and to the National Production Authority to carry out those parts that we recommended. Now, until such time as the orders are issued by the National Production Authority and contracts closed by the Emergency Procurement Service and other contracts recommended by the Defense Minerals Administration, I believe it would be unwise to announce that policy in advance.

Mr. ENGLE. I will tell you what the policy is. Let's talk about it. The policy is that you have agreed to the principle of over-themarket price contracts on chrome; isn't that it, yes or no?

Dr. MORGAN. Yes.

Mr. D'EWART. Will the gentleman yield?

Mr. ENGLE. Yes. Our outfit got thrown out. I will tell you that. Mr. DONOVAN. What is secret or classified about that?

Mr. D'EWART. I am advised that GSA is not authorized to pay more than the current market price.

Mr. ENGLE. They are not authorized yet because they have six more hurdles to go over and I am going to find out where they are. But if the gentleman wants to know what the chrome policy is, which is so highly secret, I will be glad to tell him about it. It is well known around here just precisely what it is.

Mr. D'EWART. I would like to know why GSA is not authorized to pay over the market for a mineral as short and strategic as chrome. Mr. ENGLE. You can ask him but I think I can tell you what has happened is that the DMA—you correct me if this isn't right-DMA recommended a program, sent it over to DPA; that is your outfit? Dr. MORGAN. Yes.

Mr. ENGLE. So you beat the devil around the bush over there for I don't know how long and finally you sent it back, in which you took out certain things, mainly you took out the $10 million for the Montana chrome deal and provided for experimentation to find a process to use the Montana chrome, but you did agree to the principle of over-the-market price contracts for chrome, but you didn't specify a price.

Now is that substantially correct?

Dr. MORGAN. That is substantially correct, sir.

Mr. ENGLE. It is amazing the information you get sometimes,
Mr. DONOVAN. Will the gentleman yield?

Mr. ENGLE. That is all secret information.

Mr. DONOVAN. That is what I want to ask, what is secret or classified about that?

Dr. MORGAN. Well, as stated, sir, it doesn't sound secret, but if there were the possibilities of people who had large inventories in their hands manipulating these inventories, resulting in a higher price to the Government at the time they bought it

Mr. DONOVAN. You are ganging up on the American businessmen, too, aren't you?

Dr. MORGAN. We wish to get the most material

Mr. DONOVAN. I asked you a simple question. If I am wrong, Never mind these mealy mouthed answers.

answer me.

Dr. MORGAN. No, sir; we are not deliberately ganging up on anybody.

Mr. DONOVAN. In other words, the American businessmen and the miners in this country know what one hand is doing and not the other. Is that what you call classified or secret material? Dr. MORGAN. No, sir; it is not.

Mr. ENGLE. I will say to the gentleman from New York there is a price freeze on all minerals and metals and if these people did what he said, they would all end up in the Bastille. We want to do something constructive. Now, it develops that you have a chrome policy. It is going back to DMA. What are they going to do about it?

Dr. MORGAN. It has gone to not only DMA, but to NPA and Munitions Board and Emergency Procurement Service. At the present time there is no limitation on the use of chrome except the general inventory limitation order. I presume that NPA will review the uses of chrome and see whether additional supplies can be made available for national security programs by conserving its use in industry; that is their function.

Mr. ENGLE. You say they are going to review to see if they can limit the amount of chrome used?

Dr. MORGAN. Yes.

Mr. ENGLE. And if they find it can't be limited and this isn't necessary, they will cross out the order?

Dr. MORGAN. Their limitation is only one part of the policy. If they can't limit it any way-if there is no way that a saving can be made in its use in industry-then the saving won't be made.

Mr. ENGLE. Then you sent it to Munitions Board. What did they do?

Dr. MORGAN. A certain portion of the recommendation of the Defense Minerals Administration dealt with stockpiling. Under Public Law 520 of the Seventy-ninth Congress the Munitions Board is responsible for the stockpile program and they will take action in regard to the recommendation we made for increasing the stockpile objective for a certain grade of chrome.

Mr. ENGLE. I know, but you have solemnly come out with a policy declaration that you will pay over the market price for chrome, which is a subsidy program, but the Munitions Board has never been limited by the market price at all, has it? It has always had the authority to buy over the market. As you say in your testimony here, Mr. Steelman, in a formal letter, "Lifted what had been the traditional 25

percent over the market," so they have never been bound by it, have they?

Dr. MORGAN. That is correct.

Mr. ENGLE. So as far as they are concerned, they didn't have anything to do with it, anyway, isn't that right, that portion of it? Dr. MORGAN. They will be concerned with raising the objective for one particular type.

Mr. ENGLE. I agree that the Munitions Board at least ought to be informed of what you are doing. Now it went to NPA, the Munitions Board, and now where else?

Dr. MORGAN. It went to the Defense Minerals Administration and to the Emergency Procurement Service.

Mr. ENGLE. What is the Emergency Procurement Service?

Dr. MORGAN. The Emergency Procurement Service used to be the old Strategic Materials Division of the Bureau of Federal Supply of the Treasury Department.

Mr. ENGLE. That is GSA.

Dr. MORGAN. And more recently under the General Services Administration.

Mr. ENGLE. All right. All they do is to put in execution a policy that you have established, isn't that right?"

Dr. MORGAN. Yes. Among other things, they buy materials for the national stockpile.

Mr. ENGLE. When they take a look at this policy that you have sent over there that doesn't even have a price in it, they are going to be a little puzzled, aren't they?

Dr. MORGAN. Undoubtedly.

Mr. ENGLE. Yes, yes. Then the whole thing comes down the line. The top of the totem pole kicks it clear down to the bottom again and you have a big argument about price. Now, when are you going to get that settled?

Dr. MORGAN. The lifting of the general price freeze is the responsibility of the Economic Stabilization Agency.

Mr. ENGLE. Oh, we have another one. That is No. 5.

Mr. DONOVAN. That is OPS, price control.

Mr. ENGLE. It is another agency. What difference does it make, you are going to buy over the market price anyway?

Dr. MORGAN. As was described this morning by Mr. Gibson, we have in DPA the Vital Materials Coordinating Committee where all of the responsible agencies are brought together, all of those that I named in our chrome policy and more are there. The Economic Stabilization Agency will be made aware of the chrome price situation, if they are not already, which they are; and they will be made aware of our contemplated action and within their own sphere of responsibility will act on price.

They should, if possible, carry out the necessary price action that will support what we are trying to do in the general field of chrome. Mr. ENGLE. You were here the other day when OPS testified that they were going to stay with their ceilings and call for a premium price plan.

Dr. MORGAN. Yes; I was present.

Mr. ENGLE. You have that decision already made for you, haven't you? They are not going to change their ceilings. They are going

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to sit on them and it is going to be necessary to go into a subsidized contract. That won't require consideration, will it?

Dr. MORGAN. It will require consideration somewhere along the line. Mr. ENGLE. In other words, they still have to go to the top, to Harrison or Wilson or somebody; is that right?

Dr. MORGAN. Well, formulating policy is a continually revolving and fluctuating problem. Some problems are settled at the staff level. Other bigger and broader questions must of necessity be referrred to the responsible head of the agency, eventually settled at the ODM policy level, or even referred higher for final decision. It depends on the magnitude of the problem.

Mr. ENGLE. I have six jumps in the obstacle course that still have to be gone over. The Vital Materials Coordinating Committee has been the last one added. Is there a death blow to this problem there? Dr. MORGAN. Vital Materials Coordinating Committee?

Mr. ENGLE. Yes.

Dr. MORGAN. Sir, they possibly could, but the mission of that committee and the intention of the people on it is not to deal death blows to any of these, but to solve the problem in the best interests of the national defense program.

Mr. ENGLE. I know what their objective is supposed to be, but something is being killed down there some place because nothing very definite has come out of the place yet.

Mr. BUDGE. During the course of testimony of these two witnesses, I just tried to crawl this totem pole of yours. It is just from these two witnesses. It is mentioned in this program that they have to consult with or work with the following agencies-it is just the two witnesses now. We have heard from several others-I am not sure that I have all of them.

They have the DPA, DMA, OPA, ODM, NSRB, PMPC, MB, GSA, NPA, ECA, OIT, VPS, Bureau of Budget, Bureau of Mines, Geological Survey, ESA, Interior Department, and State Department. No wonder they never get anything done.

Mr. DONOVAN. Don't forget the classified secrecy.

ONE-AGENCY RESPONSIBILITY AND OPERATION OF MINERALS PROGRAM

PROPOSED

Mr. ENGLE. You forgot the Vital Minerals Coordinating Committee. That ought to be added on there. Now, all of this brings me to this question, Dr. Morgan. I know you gave the matter study when you wrote this book. Don't you think it would be a good idea to throw out this whole caboodle and start over by setting up a Minerals Production Agency directly in line under Wilson, take the whole thing out of the Interior Department and use the Bureau of Mines and GSA as service agencies? This man is an expert in this sort of thing.

Dr. MORGAN. I wouldn't claim to be an expert on anything in particular. I have just been doing the jobs I have been asked to do, but

Mr. ENGLE. Any man who gets to be a Ph D. is an expert on something.

Dr. MORGAN. But to answer your question, I don't want to criticize the existing agencies, but I think it is obvious even to them that in the field of metals and minerals there are many, many agencies and

committees involved in settling problems in that field. After all, most of these agencies exist by law. All of those that you mentioned except a very few are agencies established by law.

Just a few have been established by Executive order. There is no doubt that closer coordination and elimination of duplication and checking back and forth is highly desirable and within the present. framework we are doing what we can to accomplish that.

Mr. ENGLE. How about this idea I had of just making a good clear straight-line agency to deal with minerals and metals procurement, pull it out of the Interior Department and use the Geological Survey and Bureau of Mines as service agencies to the production group? What is the matter with that?

Dr. MORGAN. That is what I recommended in that study of mine, and I believe that was the intention of the bill I made reference to, H. R. 6082, Eighty-first Congress, introduced by Mr. Baring. (NOTE. The bill referred to is as follows:)

[H. R. 6082, 81st Cong., 1st sess.]

A BILL To establish the Office of Federal Minerals Coordinator

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Federal Minerals Coordination Act of 1949".

It is the policy of Congress that coordination of mineral resources is essential to the safety of the United States and that the functions of the various agencies dealing with mineral resources should be subject to central direction in order to prevent costly duplications of effort and to bring them together into an integrated plan designed to effect the most efficient mobilization of such resources for both peace and war.

SEC. 2. (a) There is hereby created the Office of Federal Minerals Coordinator (hereinafter called "Coordinator") who shall be appointed by the President with the advice and consent of the Senate. The salary of the Coordinator shall be fixed at $20,000 per year. The Office of Federal Minerals Coordinator shall have a Domestic Section and a Foreign Section.

(b) It shall be the duty of the Coordinator, and subject to the direction of the President he is hereby authorized and directed, to perform the functions hereinafter authorized, within the policy established in section 1 hereof, and to prescribe rules and regulations for carrying out the provisions of this Act. (c) The Coordinator may select, employ, and fix the compensation of such experts as may be necessary to carry out the purposes of this Act without regard to the civil-service laws and the Classification Act of 1923, as amended. He may employ such other staff as he may deem necessary, subject to said civil-service laws and Classification Act of 1923.

SEC. 3. (a) It shall be the duty of the Coordinator, and he is hereby so authorized, to coordinate through his Domestic Section the work of all Federal agencies dealing with domestic and foreign minerals and metals, and to arrange for the cooperation of State agencies dealing with minerals and metals so as to inventory, analyze, develop sources for and encourage production of such minerals and metals so as to fit them into our total mineral supply needs for national defense purposes.

(b) The Coordinator shall integrate, insofar as is practicable, through his Foreign Section, the mineral wealth of the rest of the world with that of the United States so that our industrial complexes will benefit: Provided, That preference shall be given to development of sources of minerals and metals in the following geographical order: (1) Within the United States, its Territories, and possessions; (2) within the rest of the Western Hemisphere; (3) within the Eastern Hemisphere.

Attention should be directed to planning preparation plants that will enable us to import, where imports are essential, metal bars and pure nonmetallics rather than ores and concentrates. Due regard shall be given to transportation problems and the possibility of seizure of developed sources and plants by an enemy.