purchases. That will be sold on the market and will return that much money to the Government.

Added together, that involves $4,400,000. I have a feeling, due to the shortage of time, that we cannot now commit all of this, but there will be some other projects coming in and some here that might not work out.

Mr. WHITTEN. Doctor, you are doing your best to justify these particular figures, but about all you are able to do is to estimate on the basis of about the size of the job as you see it, and this is the best rough estimate as to volume that you can make.

Dr. BOYD. That is right.

Mr. WHITTEN. But you still tell us that actually this money will not be withdrawn from the Treasury except as you have use for it.

Dr. BOYD. That is correct. I showed the chairman this morning the details of the number of requests for loans and for other actions of the Defense Minerals Administration, and they are coming in here at a tremendous rate, so that many of those cases can be acted on more quickly than I have shown there and some cannot.

Mr. WHITTEN. You do not expect, if this committee should go along with you on this figure, that we are just trying to help you get it committed up to this amount, but if you can get by without committing it, you will do that?

Dr. BOYD. Yes, sir.

EXPLORATION PROGRAM

Now, if I may jump to one more item, that is the exploration program which appears at the bottom of the next page. That is $10 million for entering into cooperative work with individuals or companies that are exploring for new mineral deposits. We have felt we will have enough applications in to justify requiring an advance of about $10 million for the rest of this fiscal year. I have to admit that is a pretty round figure.

Mr. TABER. You mean on the exploration deal?

Dr. BOYD. Yes, sir.

Mr. TABER. You do not think you will need these other items in between? Dr. BOYD. No, sir. The rest of them do not require actual cash.

Mr. TABER. They do not require operation this year?

Dr. BOYD. That is right. They do not require actual commitment of funds going out of the Treasury this year.

Now I apologize again because our mathematics again require a revision in the figure I gave you this morning.

Mr. TABER. If we figured that at $170 million, that would not be too far off?

Dr. BOYD. No, sir; that would not be too far off.

The next block of money is for contracts which we feel we will have to enter into at above the present market prices to encourage marginal mining operations in the most crucial materials, and I have that broken down by actual projects. In chromite we have the Stillwater deposit which will require us to enter into a commitment by the Government to buy this chromite for a period of something in excess of 5 years or about 5 years. That is $26,250,000. The differences in the cost of producing that and the price the Government will have to pay and the price for which the Government can sell it on the market would be the $13,500,000 figure. The Oregon Beach sands will require $250,000 of commitments, and the small depots will require $500,000. Those account for the $27 million figure we have under chromite.

In cobalt there are about six projects. The National Lead Co. has a lot of waste material from which we can obtain cobalt. That is one of the most crucial materials we have. That will require the commitment of $5,740,000, contingent. The Calera Mining Co., which has the only cobalt mine in this country of any consequence, will require $24,250,000. The Bethlehem Steel Co. has slag from which we can recover cobalt. To get them to do that, we would have to enter into a contract which would have a contingent commitment of $6,740,000. Then there is an old cobalt district in Canada which we have a number of projects that have been given to us now, in which, all added together, require a contingent commitment of $8,350,000. The Nicaro Mining Co. has just been put into operation, and for the purchase of cobalt from them we will have to commit the Government to $2,625,000. There are a lot of other small possible sources of cobalt which may approximate $7,625,000. Those all total $55,330,000.

Mr. WIGGLESWORTH. How can you estimate what a commitment may have to be?

Dr. BOYD. We have these projects before us, and we have given them some analysis. We have some estimates from the companies, a knowledge of the process, et cetera, on which we have calculated these requirements.

Mr. WIGGLESWORTH. But you have no agreements with any of the companies? Dr. BOYD. No. Individual items might be up or down from this when we finally get through, but it will average that.

Mr. WIGGLESWORTH. This is your best estimate of the deal you expect to conclude with each one of these companies?

Dr. BOYD. That is correct. I have to admit they are rough, because we have not completed negotiations with them.

Mr. WHITTEN. Might I suggest this? I am not in a position as acting chairman to say "Do it," but I wish you and Mr. Orescan, the clerk, and Mr. Cannon would discuss the advisability of your reviewing your testimony in the light of your being in the position of trading with some companies. If they find out for a certainty what you are willing to do, you can rest assured you are not going to get them to go below that figure, and I think it would be a good move for you and Mr. Cannon to discuss the advisability of checking your testimony with a view to eliminating the amounts to certain companies and just say you are adding to this list of pending applications and when you total them all up you require so much money so that the hearing will not indicate you have already made up your mind it is going to take $8 million for a particular project, because you can rest assured that company is not going to be satisfied with 5 cents less. Dr. BOYD. What you are really suggesting is that we should not have these amounts in the record. It would be easier for us if the individual projects do not appear on the record.

Mr. WHITTEN. Not in the detail in which the committee is interested in having it.

Mr. TABER. You ought to have it in the stenographer's minutes, but maybe not in the printed hearings.

Dr. BOYD. In manganese, the Three Kids contract itself will involve a contingent commitment of $64,500,000; the Philipsburg-Butte project also will involve a contingent commitment of $11,100,000; Batesville, $13,000,000; a small custom mill. about $2,000,000; foreign purchases, $3,000,000; and the very large Uruium project in Brazil, about $64,000,000. That totals $157,000,000 for manganese. In nickel there will be the entire amount of the Falconbridge contract. Those all add up to a contingent commitment of $336,000,000.

We would, in essence, buy those products at cost and sell them on the market to enter normal trade channels at ceiling prices, and in that process our estimates are that the Government would have to absorb an $84,000,000 loss. Also, you will have a lag between the time you purchase and the time you sell. So we figured that turn-over factor of 10 percent. In other words, you would have some inventory at all times; so at any one time the loss plus the turn-over will amount to $118,100,000. That is not a draft upon this fiscal year's funds. The turn-over amount would eventually be returned to the Treasury. That is where I think we got into difficulty yesterday, because that was included in the total figure.

Mr. TABER. You do not need that?

Dr. BOYD. No, sir. We need only the authorization to commit it.

Mr. WHITTEN. The same thing is true for the next series of items, is it notaluminum, copper, and the others?

Dr. BOYD. That is right. Mr. Taber asked yesterday for a breakdown of aluminum. The Aluminum Co. of America, Alcoa, 27 percent; Kaiser Metals & Chemical Co., 22.5 percent; Reynolds Metals Co., 22.5 percent; Harvey Machine Co.. 16 percent: Apex Smelting Co., 12 percent. That adds up to 100 percent of the $221,500,000 for contingent commitments.

Mr. WHITTEN. Do you have the same thing on copper?

Dr. BOYD. Yes. There are seven projects involved there. The San Manuel, which is a subsidiary of the Magma Copper Co., requires $73,500,000 of contingent commitment. Incidentally, that contract has been negotiated with a floor away below the present market price, so that we sincerely hope we will never have to pick up any of that at all. The Silver Bow mine of the American Smelting & Refining Co. requires $35,000,000; Yerrington of Anaconda, $60,000,000; the Deep Roof mine of Kennicutt, $35,000,000; Bisbee expansion, Phelps-Dodge,

$76,500.000; White Pine, $60,000,000; and Calumet & Hecla, $26,000,000. As I said before, we may not go ahead with the latter one. That totals $366,000,000. Mr. WHITTEN. Give us the same as to the others.

Dr. BOYD. In molybdenum, the big contract is for the Climax Molybdenum Co. That is a contingent commitment of $100 million. The demand for molybdenum is so enormous compared with the supply that I am sure we will never pick that up. The Molybdenum Corp. of America is the balance of $12.2 million. That is the Urad mine.

In tungsten, there are four contracts involved: Nevada-Massachusetts Co., $45 million; Tungsten Mining Co., $25 million; Black Rock, $10 million; Seminole, $10 million. That totals $90 million.

I think I have answered now, Mr. Taber, all of the questions you asked me yesterday.

Mr. TABER. I guess you have.

Mr. DAVIS. Before we leave those figures, Dr. Boyd, would you go over a couple more pages in that pamphlet where are listed the various agencies for sections 302 and 303 in the Department of the Interior? You notice the Defense Minerals Administration is listed as section 302. Do you find that?

Dr. BOYD. Yes, sir.

Mr. DAVIS. The correct figure, I think, should be $170,950,000.

Dr. BOYD. That is right.

Mr. DAVIS. What should be the correct figure on section 303 in accordance with your statement just now?

Dr. BOYD. $4,460,000.

Mr. DAVIS. There is just that one item?

Dr. BROWN. Yes. The rest of that is involved on the second page under 302. None of this will require money out of this fiscal year's budget, but they do involve contingent contracts, as you understand.

Mr. WHITTEN. Are there any further questions?

EXHIBIT 112

TAX AMORTIZATION NECESSITY CERTIFICATES APPROVED FOR METALS AND MINERALS AS OF AUGUST 18, 1951

[SUBCOMMITTEE NOTE.-This exhibit is composed of tables I and II. Table II, which commences on page 946, covers (1) the amount of proposed investment certified, (2) the amount of tax amortization allowed on amount certified, and (3) the percentage of tax amortization allowed on amount certified. The tax amorti zation numbers (T. A. No.) in table II are in the same order as in table I. This compilation was submitted by the Defense Production Administration at the request of the subcommittee.]