Dr. BOYD. Mr: Bradley had to work up the manganese program, which he did, to determine what places it should come from.

Mr. ENGLE. But when you have a man who is supposed to be making contracts in line with the general program and then having the contracting official rewrite the whole business

Dr. BOYD. As a matter of fact, sir, when I sat down with both of them on Saturday I didn't find a very great difference of opinion between them on the actual program. It only amounts to about 5 cents per unit when you get through with it. In the case of Mr. Mittendorf's program, he worked that out in great detail on costs, and so forth.

Mr. ENGLE. But the drafts of Mittendorf's prices are very steep, after you get into higher brackets, whereas Mr. Bradley had a flatter chart, you might say, on the costs per unit as the grade increases.

Dr. BOYD. That is mainly due to the fact that the lower grade ores do not produce recoverable manganese as well as the higher grade ores. Therefore you need to encourage either concentration or the production from the high-grade ores.

Mr. ENGLE. I can't believe that Mr. Bradley recommended that the Government buy ore that wasn't usable or couldn't be made usable. Dr. BOYD. No, but the schedule we talked about encourages the development.

Mr. ENGLE. You might as well contract for plain dirt if you are going to do that. In other words, that doesn't add up to good sense to me and, knowing Phil Bradley, I don't think he would do that. I really don't. I think you misinterpreted what he recommended.

Dr. BOYD. Well, he does feel that perhaps there is a little bit more complication in this schedule we propose, but in general, the approach he has to it is very little different from this schedule. When you have to pay under the schedule proposed to us $1 a unit for 20 percent manganese you have to take the recoverability factor out of that. The man would have to get paid only for what could be recovered. We talked about that before. That is already taken out of the other one, and he knows definitely what he can expect to get from his ores at that grade so he can plan his mining operation on it.

Mr. ENGLE. Mr. Long says he won't operate under this proposed schedule and he is the biggest operator in the area-Deming, N. Mex. Dr. BOYD. He is the biggest prospective operator in the area. Mr. ENGLE. That is right.

Dr. BOYD. That is only on the basis of leases; but he has never given us any detailed information to justify or to assure us he can produce from those mines.

Mr. ENGLE. If I were going out to buy horses and the fellow who had horses to sell told me he wouldn't sell them at the price I offered, I would try to arrange for a price he could take.

Dr. BOYD. If he had the horse you could use it when you could get it.

Mr. ENGLE. I would buy it, in this instance; I wouldn't argue much. In this instance the Government is interested in announcing a program on which the follow who has ore can produce the materials or a portion of it, and he says he won't buy it.

Dr. BOYD. He hasn't given us any assurance that he can produce the ores.

Mr. ENGLE. You are not going to pay unless he delivers it.

Dr. BOYD. Let me get back to the question of how far you can go with the funds you may have. I wish we had the freedom of action that would indicate.

Mr. ENGLE. It isn't a quantitative matter altogether because even up to 4,320,000 units, you could put a price schedule on there that some operators could produce under.

Mr. REGAN. We planned on having Dr. Boyd until 11 o'clock. Mr. Wharton, did you have any question on manganese?

Mr. WHARTON. No.

Mr. REGAN. Mr. Budge?

Mr. BUDGE. No questions.

RECAPITULATION OF STATUS OF CONTRACTS

Mr. REGAN. Doctor, as I get this hearing this morning, we are all 'set to go on the program or areas that we have had this discussion on manganese in the last 3 or 4 weeks. In other words, El Paso is all set, the contract to be signed in the near future, and there is no more delay on the buying of ore for El Paso.

Dr. BOYD. The contract is in the hands of GSA. I haven't talked to them today, but I understand that is true.

Mr. REGAN. In other words, the only thing left is getting the pocketbook open.

Dr. BOYD. That is right.

Mr. REGAN. In Butte you have cleared that so you will have your contract ready sometime in the next week to go forward there.

In the Deming area you are setting up this schedule that will be out sometime next week for the purchase of ore which in your opinion will bring about the desired result in stockpiling the ore at Deming. Dr. BOYD. That is right.

Mr. REGAN. I think that is about all that we wanted to hear from you on the manganese this morning, Doctor. We thank you again for coming. We hope there will be no further delays in this whole

program.

We are going to ask now, as soon as you step aside, to see what the pocketbook has to say about spending the money.

Mr. ENGLE. Mr. Chairman.

Mr. REGAN. Mr. Engle.

Mr. ENGLE. Mr. Ewing and Mr. Jacoby are here from OPS. They have something to explain. They told us a few weeks ago they were going to take the lid off this thing. They are here. I don't think it would take very long. I wonder if we could ask Dr. Boyd to stay so we could run the spotlight on some of this other stuff.

Dr. BOYD. I would be happy to stay.

Mr. REGAN. On one occasion we could see the ball passed back and forth. It might be a good idea on that if we had Mr. Ewing and Mr. Jacoby step forward now.

Will you, please?

GENERAL DISCUSSION ON DOMESTIC SUPPLY OF STRATEGIC AND CRITICAL

MINERALS

Mr. MURDOCK. Mr. Chairman, may I ask Dr. Boyd a question or two before the trio are brought in?

Mr. REGAN. I see no objection to that, sir.

Mr. MURDOCK. This doesn't bear on manganese alone but manganese is involved.

Dr. Boyd, not being a mining man, I get my information as best I can from you who are. I find there are two schools of thought in this country in regard to the strategic and critical minerals and metals. One school seems to think that we are a have-not Nation—or at least we have become that perhaps because we have dissipated so much of our important war matériel in two world wars.

Another school of thought is of the opinion that we are not a "have not" nation, that we are a "have" nation.

Now, perhaps the truth is some place between, but we can't decide the matter solely on the ground of have or have not and include all strategic and critical minerals and metals. There are some that we know that we are short of. We know that.

Are there any we know we are not short on that you care to mention? Of all the basic, critical minerals and metals needed in a modern war, are there any that you can say definitely that we are not short on, that it is in the ground, and all we have got to do is get it out?

Dr. BOYD. Of course, the definition of strategic and critical materials comes into that answer because they would not be strategic or critical if they were in abundant supply, such as gravel, sand, lime rock, et cetera.

Of all the metals and many of the nonmetals we are in this position on almost all of them that I know of. There are very few of the critical materials needed in our industrial economy that we seem to have in abundance of productive capacity to meet our demand. I for one am not convinced we have yet so far explored the continent of the United States to say we have not got those minerals within our own territory. So far we have not discovered enough of them to meet the total requirements and in many cases we haven't had any. We have had to go abroad for them, so as you say, it is a relative matter between materials.

Mr. MURDOCK. It is relative.

I am glad to hear you say that because I am of the opinion that too many people in authority regard us as having exhausted or greatly diminished our supply, as nature has given to us, but in my own thinking I am convinced that is not true and for that reason, Mr. Chairman, I have always felt that meanwhile it is necessary to get some of these things abroad. I don't know whether we have any tin or not, I guess if we are going to use tin we are going to have to get it abroad but we might have that for all I know."

Mr. REGAN. Do you think a sufficient amount of exploration work might develop we had sufficient tin, probably in the State of Arizona? Mr. MURDOCK. That might be. I hope we can find that we have but I am not talking about tin now. I am talking about the others. Dr. BOYD. Mr. Chairman, I would like to refer you to an editorial in the current Engineering Mining Journal on the subject you are talking about. I happened to read it last night and it is a very fine

description of just what you are talking about. I think it is better coming from them than me because it is an industry magazine. It shows the problems involved in replacing our reserves as we consume them.

Mr. MURDOCK. Now, one step further, Mr. Chairman. We know that we are short on some things. I mentioned tin. I doubt whether we are short on some things and I will mention copper. I do not believe we are short on copper. I think we simply haven't gone adequately at it and the fact that we are not supplying the domestic need is not proof positive that we are running short, but I seem to speak with some feeling there. This is the thing I wanted to say.

We ought to get abroad those things that we can only get from abroad, that we need, stockpile them, or even obtain such for day-today commercial use, but we ought not to depend upon that thing. The only way we can make national security secure in the possesssion of these necessary things is to see to it that our supply is safe, and that means home supply and for that reason I have used the words "concurrent production," or "procurement," meaning, get it abroad if we have to, and at the same time produce it at home.

Mr. REGAN. If it is producible.

Mr. MURDOCK. If it is producible.

Mr. REGAN. I think that is a very good point. You know there have been several times in our history when there was much ado about our running out of ore but in the exploration and development of ore the Government has seen fit to give encouragement to the risk capital to go out and we have always been able to produce the ore. I think that probably might apply to hard minerals. If we had a little more incentive to the hard-minerals operators we might develop our requirements in that field.

Mr. ASPINALL. Mr. Chairman, I haven't taken any time and I don't intend to take any time here but I would like to say that it simply appears to me that a great deal of our discussion here is trying to find a practical line of approach to a problem of continuing our private-enterprise system and at the same time help our private-enterprise system when Government aid is necessary.

I think that Dr. Boyd and the rest of these gentlemen have a very difficult task when they approach this problem to protect the taxpayers because that is their obligaion. We make the policy but their obligation is to protect these moneys and personally I would like to say this, that although I think these hearings are a fine thing for the industry throughout the country, nevertheless my hat is off to these people who are Government employees and are remembering their obligation to the taxpayers at the same time.

Dr. BOYD. Thank you, sir.

DECONTROL OF OPS PRICE CEILINGS ON MANGANESE AND OTHER MINERALS PENDING

Mr. REGAN. Very good.

Now, Mr. Ewing and Mr. Jacoby, last week I believe we got the impression from you that in this defense mineral procurement set-up that there would be no difficulty from the Office of Price Stabilization set-up, in the way of prices for the acquisition of these ores and some

thing was suggested here a few days ago that was not exactly right, and we would like to have that cleared up if you could, for us, this morning.

Mr. EWING. Possibly I should make the first statement.

We are considering in addition to manganese the decontrol of other strategic materials and at the present time there is a committee to investigate strategic materials, particularly imports, which has been set up by Mr. Wilson. I think Dr. Boyd is a member of that committee, and they have made and are making certain recommendationsto our office.

Mr. DiSalle is also a member.

I think that all the agencies interested in strategic materials, it is up to the production people to prove to us on all of these, which includes manganese, chrome, cobalt, etc., that those materials should be decontrolled.

I think they are having a final meeting tomorrow morning at 10 o'clock which will finalize that but as you realize and as I think Mr. Engle pointed out at one time, I am somewhat low man on the totem pole there, until these gentlemen in the final echelons make the final decision, I don't feel we are able to move on this. However, Mr. Jacoby and I both concur and our recommendation is that on manganese ore it should be decontrolled.

Mr. ENGLE. Let's go up the totem pole.

Who is the next man who is the road block?

Mr. EWING. I don't think there is any particular road block. I think it is up to Mr. DiSalle as our representative on this committee to make the final decision, Congressman.

Mr. ENGLE. Has your recommendation gone up to DiSalle, Mr. Ewing?

Mr. EWING. He is aware of it, yes.

We have had meetings, inter-office meetings, considering other things, of course, besides metals, such as hides. Our recommendations have gone to Mr. DiSalle. Of course, Mr. DiSalle wants the recommendations of the other agencies and I think they will probably prove to him that our recommendations are sound.

Mr. ENGLE. What other agencies have a finger in this now?
Mr. EWING. I think Mr. Symington, Mr. Small, Dr. Boyd.

Mr. ENGLE. Why would Mr. Symington in RFC have anything to say about it?

Mr. EWING. Mostly because of the financial possibilities, the possibility that some of these programs must be financed. Possibly that is the reason. I couldn't tell you why Mr. Wilson appointed the people that he did on the committee. I think that he appointed the people that he thought probably might be interested in the program. Mr. ENGLE. What committee is this you are referring to?

Mr. EWING. It is a special committee which was set up last week. I don't know the exact title of it.

Mr. ENGLE. To do what?

Mr. EWING. To investigate strategic materials; possibly Dr. Boyd could give you the complete name of it.

Mr. REGAN. That was just set up last week?

Mr. EWING. It was talked about prior to that time but I think it was formalized last week.