TABLE II

[SUBCOMMITTEE NOTE.-The tax amortization numbers (T. A. No.) in this table are in the same order as in table I]

EXHIBIT 113

QUARTERLY REPORT ON UTILIZATION OF BORROWING AUTHORITY UNDER SECTION 304 (b), DEFENSE PRODUCTION ACT, AS AMENDED

Transactions consummated as of Sept. 30, 1951—Continued

2

529

The program consummated involves, guaranteed price of 22 cents per pound on 225,000,000 pounds. Probable ultimate net cost based on 25 percent of the difference between pre-Korean price of 2014 cents per pound and the guaranteed price of the total quantity.

The money advanced for explorstion is treated as unrecoverable, since the variable involved precludes any reliable estimate of possible recovery.

Interest income assumed to offset expenses and loss.

Estimated loss of $18 per ton for 100,000 tons based on $42 average during 5-year period with a $60 guaranteed price.

The money advanced for exploration is treated as unrecoverable, since the variable involved precludes any reliable estimate of possible recovery.

Interest income assumed to offset expenses and loss.

5 Nonrecoverable expenditure.

A cost of $2,000 on purchase of 173,754 pounds of kenaf seed for total cost of $162,000 is charged to storage, transportation, administration, and interest costs.

Interest income assumed to offset expenses and loss.

The program consummated involves purchase of 3,000,000 pounds at 19 cents per pound and resale at 17 cents per pound. Probable ultimate net cost based on 2 cents per pound for total quantity.

12, 715 Cost for storage, administration, and interest, amounting to $505,000, plus a cost of 4.07 cents per pound due to an expected drop in market price for the entire amount in inventory (300,000.000 pounds) will result in a total ultimate net cost incurred of $12,700,000.

The money advanced for exploration is treated as unrecoverable, since the variable involved precludes any reliable estimate of recovery.

Interest income assumed to offset expenses and loss.

Probable net cost computed as 10 of 1 percent of gross volume of transactions for pool order pro gram based on World War II experience.

60

2, 448

1,074

Reporting agency

Transactions consummated as of Sept. 30, 1951-Continued

Basis for determination

The program consummated involves purchase of 5,235,000 pounds at average production cost estimated at 441⁄2 cents per pound and resale at market price of 241⁄2 cents per pound. Probable ultimate net cost to Government based on 20 cents per pound for full quantity.

The program consumated involves the purchase of 50,000 tons of ore at $19.30 per ton. The entire transaction is treated as probable ultimate net cost pending further determinations as to processing the ore.

The consumated program involves the purchase of 37,500,000 long tons of marginal ore and processing it to produce commercial grade to be sold to defense contractors. Purchase and processing cost estimated at $87,550,000. Resale value at market price estimated at $45,750,000. The difference of $41,800,000 is probable ultimate net cost to the Government.

The money advanced for exploration is treated as unrecoverable, since the variable involved precludes any reliable estimate of possible recovery.

Do.