recommend that the present restrictive wording of section 6 of Public Law 85-931 be changed to authorize barter for any element in any usable form where known U.S. domestic supplies are likely to be inadequate for defense or industrial needs at any time in the foreseeable future.

I may illustrate that with your permission with a chart to show you how the law is restrictive in that connection.

In this way the citizens will be saved costly storage expenses for the agricultural surpluses, and they will get something tangible and useful from the tax dollars that reimburse CCC borrowing authority for any disposal that is not a dollar sale. Table 23 on page 18 of your very fine committee report of July 13, 1959, clearly shows the significant savings in storage charges for metals and minerals over agriculutral surpluses, and also shows that the metals and minerals are assets that maintain their value. Indeed, over a longer period of time, most of the metals and minerals can be expected to appreciate in value.

The previous witness and several others have alluded to this.

(4) The barter mechanism could be a really powerful economic warfare tool to be employed to maintain and expand oversea markets for U.S. agricultural commodities in the face of Communist bloc economic penetration, and it should be vigorously used in appropriate

cases.

I realize that time is of the essence. I might take a moment to explain the two tables.

Table 1 was prepared by the head of the Geological Survey this last year and, therefore, is accurate and official data, and shows the percentage of U.S. supplies of important metals and minerals that are imported each year for industrial purposes. If you will look there you will see, for example, aluminum is manufactured 75 percent from imported ores. Look down a little farther, metallurgical chrome, 90 percent imported; metallurgical manganese, 90 percent imported; tin, 100 percent imported, and so forth.

I prepared a second table. And I have a chart which illustrates the table. With your permission, sir, I will refer to the chart. I have here the melting point of materials going from 0° F., which is the standard temperature that we use, up to 7,000. I have shown here the melting point of different metals.

Down here is lead, tin, zinc, nickel, iron, cobalt.

Note this dark area. Most of our commercial metallurgy is based generally on the melting point of steel which comes down here. So the nickel, cobalt, iron alloys, which do not permit us to reach temperatures even this high, but about 60 percent of the melting point; in other words, we are operating at about 1,800 to 1,900° F.

Now, if we want to get the advantages of nuclear energy, and superproperty fuels to make better long-range missiles to get men, instruments into outer space, to use efficiently the high temperatures of nuclear power or to even use more efficiently coal- and steam-fired power, we have to get to higher temperatures.

Well, going up, there is chromium, hafnium, columbium, molybdenum, tantalum, and carbon.

I will just give one illustration of the effect of the present law. Consider rhenium, this is a very high melting temperature material; the present law says, this is section 6 of Public Law 85-931, the CCC should barter for materials of which the United States does not domestically produce its requirements does not domestically produce its requirements.

(The chart has been submitted and may be found in the files of the Committee.)

Our Committee pointed out that we ought to look 5 or 10 or more years into the future. If today we went to the Government and we said, "Do we today produce our requirements of rhenium?" The answer is, "Yes, we do today." In fact there may be a pound or two of it at $680 a pound that can't even be sold. So there is an overproduction.

If we are going to make the high-temperature alloys that require rhenium, and to make the rockets and missile generations of the future, rhenium is one of the things likely to be the scarcest.

If we can take some of the billions of dollars of agriculture surpluses and trade them off for the things high up in this temperature category, I think this committee would be serving the national interest bodily conceived.

Lastly, Mr. Chairman, I would like to make one personal comment on economic warfare. We might better discuss it in executive session. But briefly, I am very concerned by what has come out in these hearings where people say, "Oh, well, if they don't sell the stuff here, they are going to sell it somewhere else," talking about the Communists. Well now, they are not just selling this stuff for the fun of it. They want to get into Germany, and Belgium and France and Holland and those countries, not just to sell the gricultural commodities, but to get important machinery and chemicals and supplies for their own defense and war machines. The only way they have of paying for the things that they want is to pay for them with agricultural commodities.

We do not permit any trade with Red China in this country. You cannot buy their postage stamps; you cannot buy their antiques; you cannot send them any money, but when we do not use our barter devices and economic warfare tool and we say, "Oh, well, maybe the Chinese will sell here and maybe they will sell there and maybe the Russians will sell here," what we are doing is opening up all of the rest of the industrialized nations of Europe to the Communists for the very things that they want to get. I think the barter device could be effectively used to cut them out of these things if we want to do it. Mr. Chairman, I appreciate very much the opportunity of being here, and will try to answer any questions.

(Tables 1 and 2 follow :)

TABLE 1.-U.S. metal and mineral imports

Strategic and critical materials for stockpile purposes are defined as follows pursuant to section 2a of Public Law 520, 79th Congress:

"Strategic and critical materials are those raw or semiprocessed materials that are required for essential uses in a war emergency, and whose procurement in adequate quantities, quality, or time is sufficiently uncertain for any reason to require prior provision for their supply."

The strategic and critical mineral materials listed by ODM on September 12, 1957, are given below, together with notes as to the adequacy of domestic supply to meet peacetime (1957) consumption. Wartime requirements in general exceed peacetime needs, hut under the changing strategic concepts (possibility of brief nuclear war), war uses may be reduced except for a few materials with high temperature and special property characteristics. Materials italicized are in the most deficient supply position.

Submitted by the Director of the U.S. Geological Survey in hearings by the House on the supplemental appropriations bill for fiscal year 1959, June 26, 1958.

In addition to the stockpiled minerals and metals, others are essential to our peacetime economy and vital for present military uses, and still others promise to become vital for the future technology of high temperature and special purpose materials.

TABLE 2-A.-Melting points of all elements above iron (and selected ones below)

TABLE 2-B.-Melting points of certain refractory compounds

Hafnium carbide _

. F.

Tantalum carbide.

Zirconium carbide.
Columbium carbide.
Fused thoria (ThO2).
Titanium carbide..
Zirconium boride.
Boron nitride..
Titanium boride.

Tungsten carbide.

Vanadium carbide.
Fused zirconia_
Molybdenum carbide.
Fused magnesia_
Beryllia

4, 622

The CHAIRMAN. Dr. Morgan, we thank you very much for your very fine statement. I congratulate you on the presentation of the

statement.

Are there any questions?

Mr. HOEVEN. You recommend that the present restrictive wording of section 6 of Public Law 85-931 be changed. Who would make the finding or decision as to the need of critical materials?

Dr. MORGAN. I trust the President to do it if he had the wording and I suggest the wording "any element in usable form where known domestic supplies are inadequate now or in the foreseeable future.” Mr. HOEVEN. It should be spelled out as to who is to make the finding?

Dr. MORGAN. Yes, sir.

The CHAIRMAN. For the materials?

Mr. HOEVEN. It says supplies "are likely to be inadequate for defense or industrial needs at any time in the foreseeable future." Somebody will have to make the finding.

The CHAIRMAN. Under the law, we authorized the President to fix the strategic material list, listing the articles that you can use in barter.

Dr. MORGAN. That is right. He does get himself into a little bit of a corner though by that wording-it has to be a material where we do not now produce our requirements. It ought to be one where we not only do not produce it now, but where in the foreseeable future, we might not produce it.

Mr. HOEVEN. This is simply broadening the field of materials from which he could choose.

Dr. MORGAN. Yes.

Mr. TEAGUE of California. Do I understand, Mr. Morgan, that you are here strictly as a private citizen?

Dr. MORGAN. That is right.

Mr. TEAGUE of California. Not directly or indirectly in any way representative of the metal importing firms?

Dr. MORGAN. I have indicated in my statement, sir, and I repeat, that in my consulting practice, I do advise various U.S. Metal and mineral firms, but I am appearing this morning as a private citizen. Mr. TEAGUE of California. Thank you.

The CHAIRMAN. Thank you very much.