(c) What has has been accomplished and is being done or proposed under the Defense Production Act of 1950 to encourage the exploration, development, and mining of critical and strategic minerals and metals from domestic sources; and (d) The reasons for the delays in executing the necessary programs. It is hoped that these hearings will prove constructive and clearly reveal what may be anticipated by the mining industry and other segments of our economy in reference to overcoming the present and future shortages of minerals and metals. We have through the chairman of the full committee notified the various administrative offices of the Government to either file statements or be heard as witnesses. We have a long list of witnesses whose names have been supplied to the various members of the committee, as well as the questions that were propounded or asked of the various governmental units, and Mr. Engle is recognized for a statement that he would like to make in opening the hearing. STATEMENT OF HON. CLAIR ENGLE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. ENGLE. Mr. Chairman, since these hearings by the Subcommittee on Mines and Mining are being held at my request, I think it proper to make some statement as to my objectives in asking for the hearings. First, I hope this committee can find out whether the defense minerals production program is as complete and dismal a flop as it is believed to be in the Far West. Continuously over the last few months my office has been deluged with letters complaining about the failure of the Defense Minerals Administration to announce or put in execution any program to encourage production of domestic minerals and metals. And more recently on my trip west I have talked with mining people who vigorously confirmed those complaints. Second, I hope this subcommittee can determine whether or not the defense minerals production program is in the hands of people who are fundamentally opposed to the basic purpose and objectives of the Defense Production Act of 1950 as it relates to the encouragement of the exploration, development, and mining of critical and strategic minerals and metals. As a notable illustration of why that question is raised, I call attention to the recent testimony of Mr. Fred Searls, Jr., Assistant to the Director of the Office of Defense Mobilization (and the mining adviser to Mr. Charles Wilson), before the Senate Interior and Insular Affairs Committee. This testimony indicates that Mr. Searls now opposes and has always opposed any assistance whatever in encouraging the exploration, development, and mining of critical and strategic minerals and metals. In fact, he has stated that he is convinced that the "best thing the National Goverment could do to help the mining industry in this country is to leave it alone." If that is true, it would appear that Mr. Searls should resign or be dismissed, as he obviously is not the man to advise the Defense Mobilization Director, who is charged with carrying out the mandate of Congress set forth in the Defense Production Act. Third, the committee I hope will investigate the organization and procedures now set up in the Government to carry out the defense minerals production program for the purpose of determining whether or not a domestic mining program can be put into operation under such organization and procedures, even by people willing to do so. I am informed that the organizational set-up is so complex and the procedures so balled up in red tape that it is practically impossible to get a policy decision or a simple production contract put into execution. It may be after its investigation the committee will see fit to recommend that the defense minerals program be removed from the Department of Interior and put in a single agency directly responsible to the Defense Mobilization Director, with the Bureau of Mines and the USGS as service agencies but no longer charged with the direct responsibility of carrying out the program. Fourth, I am in hopes the committee will make some inquiry as to the personnel now handling this program for the purpose of ferreting out the inefficient and those serving a selfish interest, and recommend. their dismissal. The defense minerals production program is one of the most important parts of the Defense Production Act of 1950. There is no shortage more critical or dangerous to the country than the lack of sufticient minerals and metals to keep the defense industries, on which our armed services depend, in operation. Congress made it clear in both the Defense Production Act of 1950 and in the excess profits tax law that it intended the executive branch of the Government to order full speed ahead on the production of domestic minerals and metals. That has not been done, and this committee should take the stepsnecessary to see that it is done. Mr. REGAN. Mr. D'Ewart. REPORT ON SUBCOMMITTEE HEARING AT PHOENIX, ARIZ. Mr. D'EWART. Perhaps I am the only one here who attended the mining hearing in Phoenix last week, and I should like to make a brief report on that hearing, Mr. Chairman. It was called at the suggestion of Mr. Murdock, and was attended by Mr. Baring, Mr. Patton, and myself. The Government was represented by a man from the Defense Minerals Administration, one from the General Services Administration, and others from the Bureau of Mines. The meeting was exceedingly well attended by local people. In fact, we had to adjourn the meeting from the original meeting place in the Federal Building to a larger room in one of the hotels and some 200 people, local residents, signed cards as attending the meeting and a great many of them made statements at the meeting. The statements were, in general, quite critical of what had been done to encourage the development of our mineral resources in the West, either under Public Law 520 or under the $10,000,000 that had been made available under the Defense Minerals Administration. In fact, as far as I remember, no loan had been made available to any miner in that area up to date. They are willing to go ahead and develop the properties in the area which will make available strategic minerals; in fact, they were anxious to do it. We had a case of one mine that had been turned down for a loan while they were actually in operation and in profitable operation. The group that attended the meeting were exceedingly critical. I think it is wise that we proceed with this hearing and try to develop a way in which we can make available, either under Public Law 520 or some other law, funds to help these small miners get into operation. I think the meeting was well worth while and I believe when the minutes are available they should be added to this hearing and made available to all the members of the committee. Mr. REGAN. Thank you very much, Mr. D'Ewart. I would like to welcome Mr. Bennett of Michigan as an interested participant in the hearings. I would like the record to show that Mr. Bennett of Michigan is present. The first section of the hearing will be covered by representatives from the Defense Minerals Administration. Dr. James Boyd, the Administrator, will be heard first. Dr. Boyd. You have prepared a complete statement, I believe, Doctor, which has been furnished to the committee, and you are going to summarize your statement, as I understand it. Dr. BOYD. That is correct, Mr. Chairman. The full document is here and covers the answers to the questions that Mr. Murdock submitted to the Secretary of the Interior in some detail. I propose, with your permission, to try to summarize that and answer directly some of the questions specifically raised in the letter. I will appreciate the opportunity of doing so this morning. Mr. REGAN. You might state your name and position to the reporter. STATEMENT OF DR. JAMES BOYD, ADMINISTRATOR, DEFENSE MINERALS ADMINISTRATION, DEPARTMENT OF THE INTERIOR Dr. BOYD. My name is James Boyd, and I am Administrator of the Defense Minerals Administration, Department of the Interior. Mr. REGAN. Excuse me a moment to welcome Mr. Martin. Come right in, Mr. Martin. Pardon me, Dr. Boyd. Proceed. Dr. BOYD. This committee has expressed its interest in four main points regarding the activities of the Defense Minerals Administration, namely: (a) What has been accomplished and is being done or proposed under the Defense Production Act of 1950 to stimulate the exploration, development, and production of strategic and critical minerals and metals from domestic sources; (b) The reasons for the seeming delays in executing the necessary programs; (c) The authority and responsibilities of each unit of the Government having any jurisdiction over various phases of the defense minerals production program; and (d) The policies formulated and decisions rendered by each such unit in reference to such program. Since the answers to these questions involve virtually the whole gamut of the Government's activities under the Defense Production Act in one way or another, I shall not attempt to read the details here. I have previously submitted those details to the committee; you have copies before you and may wish to have them inserted in the record. With your permission I should like to summarize them for you. ACCOMPLISHMENTS OF DEFENSE MINERALS ADMINISTRATION Since minerals provide the lifeblood of our industrial economy and defense effort, any action that Defense Minerals Administration proposes impinges in one way or another on the policies and decisions of virtually every other defense activity, including economic stabilization, military production, essential civilian production, budget management, transportation, manpower, and, to some degree, even agriculture, petroleum, solid fuels, and electric power. Hence the accomplishments of Defense Minerals Administration in this initial period of preparation cannot be measured solely in the number of loans, contracts, or other forms of direct assistance that have been recommended. The development of organization, the accumulation of competent staff, and the adoption of simplified procedures have had to come first. Then have come the formulating programs and the clarification and integration of policies with the other major defense agencies so that mineral production and expansion can proceed on a basis which will assure the Nation of its essential requirements. Since Congressman Engle's able speech in Denver before the Colorado Mining Association, we have materially reduced the number of steps needed to process individual actions. We have welded the existing Government mineral agencies, the Geological Survey and the Bureau of Mines, into a working team with the Defense Minerals Administration. We have set into motion the large field forces of both agencies so that they are preparing many individual cases by field examination for action when programing is sufficiently well advanced to permit it. Although the matter of programing, or determining the national military and essential civilian requirements and balancing them against anticipated normal production and imports of all strategic and critical metals and minerals, is still to be completed, Defense Metals Administration has proceeded without delay to encourage the output of those commodities in obvious short supply. We have processed to date no less than 21 major procurement contracts, of which 15 have been recommended to DPA for certification to the GSA, and the remaining 6 will be forwarded shortly. These contracts call for increased production of the following metals: 22,000 Manganese-- Molybdenum pounds_- 115, 204, 000 | In addition to the above, the Defense Minerals Administration has recommended, as of March 31, for approval, 61 certificates for accelerated tax amortization totaling $494,031,524. All of this has entailed numerous hours of negotiation with individuals and groups of individuals from the public and with Members of Congress. I myself have attended 11 congressional committee hearings since January 1 alone, all of which have involved hours of preparation by me and the staff for each hearing. Through all of this we have not been idle in the preparation of programs of a broader nature which can be handled in a more blanket fashion to expand production and to facilitate the participation of the smaller units of the industry. The tungsten program is an example of this, for we hope that under such programs as this the smaller units of industry can be encouraged to operate without detailed governmental supervision. Mr. Chairman, if I may insert in the prepared statement at this point-I find it is not in the record that I presented to you—the committee would be interested in the form of the tungsten program. (The proposed tungsten program is as follows:) DOMESTIC TUNGSTEN PROGRAM (PROPOSED) FIVE-YEAR GUARANTEE PLAN 1. Program.-Commitment to purchase all domestically produced tungsten concentrates offered to the Government which meet certain specifications, at a minimum base price, during the calendar years 1952 to 1956, inclusive, under the provisions of section 303 of the Defense Production Act of 1950. 2. Guarantee by the Government.-The Government shall purchase, during the 5-year period mentioned in the next preceding paragraph, all domestically produced tungsten concentrates offered which meet specifications, at a minimum base price of $63 per short ton unit, dry weight, of contained tungsten trioxide (WO2) f. o. b. public carriers conveyance, less penalties imposed. 3. Specifications.-Tungsten concentrates offered to the Government shall meet the following specifications: (a) Percentage of tungsten trioxide (WO3) required with respect to each of the following: (b) Maximum percentages of the following elements without penalty. 4. Penalties-The minimum base price shall be subject to adjustment under the following situations. (a) For each short ton unit of delivered tungsten trioxide (WO) the sum of 20 cents shall be deducted from the base price for each 1 percent of tungsten trioxide (WO3) below the standard requirements set forth in paragraph 3. (b) For each short ton unit of delivered tungsten trioxide (WO3) a deduction |