to get this tungsten thing out of my shop, and I am not sufficiently informed to say to you that this isn't going to accomplish the same thing that the premium price plan would accomplish. I think the defense minerals boys are in much better position to discuss that with you and give you the Government's action or the executive branch point of view, than I.

Mr. BARING. Thank you.

Mr. REGAN. Mr. Donovan has a question.

Mr. DONOVAN. Under this tungsten program, Mr. Larson, are you going to encounter big producers on the one hand, and little producers on the other hand?

Mr. LARSON. Well, I think there again, I am not begging off, but we are strictly ministerial. I think the boys serving with the Defense Minerals Administration can answer that better than I.

Mr. DONOVAN. There are some scuttlebutts around, that there may be prices for big producers, and different prices for little producers. Mr. LARSON. I think perhaps the distinction is going to fall to what has expanded our new production and what is current production. Mr. DONOVAN. Is there going to be a difference in the prices for those that are currently producing and those that are coming into the picture later on?

Mr. LARSON. I am inclined to think there will be insofar as the large producer is concerned, yes.

Mr. DONOVAN. How much differential?

Mr. LARSON I don't know. It depends upon what negotiations have been had.

Mr. DONOVAN. Is there anybody here who knows about the negotiations that have already transpired?

Mr. LARSON. Well, the only way I know about is negotiations which have been going on with the tungsten company, headed by Mr. West, for expansion. I think there is some price differential there.

Mr. DONOVAN. Who are the ones that are described as the bigger producers of tungsten, domestically?

Mr. LARSON. I can't answer that. I am sorry. I am not familiar with the details of it.

Mr. DONOVAN. Does your counsel or any of the people know? Mr. LARSON. I think the Defense Minerals boys can give you that information.

PRICE PAID BY GSA FOR FOREIGN COPPER, LEAD, AND ZINC SAID NOT TO BE HIGHER THAN DOMESTIC RATE

I

am sorry, I said Mr. Walsh wasn't here. I didn't see him when I came to the witness stand, nor had I anticipated he would be needed, but being a sort of a bird dog that he is, he has smelled his way over here anyway and I get a note that he is here, and he tells me we are not paying over the domestic price for either copper, lead, or zinc.

Mr. ENGLE. Who gave you that memorandum?

Mr. LARSON. Mr. Walsh.

Mr. GUMBEL. No, sir; I am sorry. I got it from him over the telephone.

Mr. LARSON. Mr. Gumbel of my staff called Mr. Walsh.
Mr. BUDGE. Could I ask some questions, Mr. Chairman?

82354-52- -24

Mr. REGAN. Yes.

Mr. BUDGE. In view of that statement, now, are you purchasing any lead or zinc from foreign sources?

Mr. LARSON. I am pretty certain we are not purchasing any lead but I think we are purchasing a small amount of zinc.

Mr. BUDGE. How are you getting the zinc at less than the world price for zinc, if you are purchasing it from abroad?

Mr. LARSON. I am under the impression that under a fixed-price contract it was negotiated sometime ago.

Mr. BUDGE. By whom was that negotiated?

Mr. LARSON. By the General Services Administration for stockpiling.

Mr. BUDGE. One contract?

Mr. LARSON. Well, there may be more than one. I am pretty certain we have one. However, I will furnish you that information.

Mr. BUDGE. I thought a few minutes ago you said that all of these contracts on zinc varied; there was a great spread between the different contracts?

Mr. LARSON. I didn't mean to indicate there was a great spread. What I meant to indicate was that we have negotiated-it is my impression, and I will clarify it and furnish you the details, furnish the committee the details-it is my impression that we have negotiated fixed-price contracts for zinc, and I only meant to indicate fixed price, as distinguished from a price which changes daily with the market. Mr. BUDGE. I understood you to say just a moment ago that you only had one or two such contracts.

Mr. LARSON. I think that is correct. I will let you know exactly how many we have.

Mr. BUDGE. And the price.

Mr. LARSON. And the price that we are paying for them. Mr. Walsh here says that in no instance is it over the domestic price. Mr. BUDGE. I would like the date of those contracts too. Mr. LARSON. I will get you that information. I will be glad to.

STOCKPILE REQUIREMENTS FOR LEAD HAVE BEEN FILLED

Mr. REGAN. Mr. Saylor, did you have a question?

Mr. SAYLOR. Yes. I understood you to say you are not purchasing any lead?

Mr. LARSON. That is correct.

Mr. SAYLOR. Why not?

Mr. LARSON. Well, because we have all of our requirements for the stockpile.

Mr. SAYLOR. Well, now then, somebody better get together because Mr. Wampler, who was in here the other day, is a director of the program and requirements and he listed lead as one of the materials where the current demand exceeds the available supply.

Mr. LARSON. We have been putting lead in the stockpile for a long time. It could still be the case. We have our objective in the stockpile.

Mr. SAYLOR. You can't put it in the stockpile unless you buy it. Mr. LARSON. You asked me why we weren't buying. I said it was because we had reached our objective in lead. We don't have a direc tive to buy any more lead.

Mr. SAYLOR. Notwithstanding the fact that the current demand exceeds the available supply?

Mr. LARSON. Well, why would you want to put more lead in the stockpile than the military authorities say you need to fit the type of war contemplated in fixing the stockpile objectives?

Mr. SAYLOR. In other words, according to you, you have a sufficient supply of lead to comply with the Army directives for war?

Mr. LARSON. We have met our stockpile requirements as they currently exist insofar as lead is concerned."

SHIPMENT OF MANGANESE FOR STOCKPILE DIVERTED TO INDUSTRY

Mr. SAYLOR. All right. How about manganese?

Mr. LARSON. Well, now, we are getting in some classified matters. I would be glad to furnish the committee

Mr. SAYLOR. They are so classified the Wall Street Journal keeps publishing daily

Mr. LARSON. The Wall Street Journal is not publishing the status of the stockpile.

Mr. SAYLOR. No, but you are ordering for stockpiling purposes and transferring to certain steel industries the manganese that you are buying before it gets to this country; isn't that correct?

Mr. LARSON. That is correct insofar as one shipment was concerned, and that was as a result of a directive from the Defense Production Administration, that that was necessary in order to keep one of the larger steel industries from closing down because of lack of manganese, and was gone into thoroughly by the Armed Services Committee of the House and the Armed Services Committee of the Senate at the time; and the Defense Production Administration was requested not to do that any more.

I occupy strictly a ministerial capacity in that regard.

Mr. SAYLOR. Mr. Chairman, Not at this time, but at some later date, in view of the fact, that situation with regard to manganese, contains classified information-that we have an excessive session and find out all of the details.

Mr. LARSON. The only thing that is classified is the status of the stockpile. It is common knowledge that manganese is in very short supply and that we are getting-buying every bit we can get our hands on; all over the world and that the Bureau of Mines is working and making considerable progress in a number of fields which will add to our domestic manganese sources.

ABILITY TO RECOVER MANGANESE FROM FURNACE SLAG OF STEEL INDUSTRY QUESTIONED

Mr. SAYLOR. One of those is Brazil; is that right?

Mr. LARSON. Yes. Through the Export-Import Bank, we have recently negotiated a sizable contract with interests in Brazil for supplying manganese. However, what I had reference to on the domestic program was the work of the Bureau of Mines in recovering manganese from tremendous slag piles that are existent in the industry.

Mr. SAYLOR. The same old red herring that has been brought up every time anybody talks about manganese for years.

Now you know and I know that they don't have any good program for recovering manganese. They don't have any plants other than a little experiment that they have run. It is one of those things that some boys down there in the departments try to use to cover up, a great shortage in the supply of manganese. What we have, is a prospective great source of supply which actually doesn't exist.

Mr. LARSON. Well, Mr. Congressman, let me get the record straight. I am not presuming to speak for the Bureau of Mines. They can speak for themselves, but as an individual and as a citizen, and because of my knowledge of the program which they have had I would say it is not a red herring; and it is something which I think every citizen in this country can take pride in and if you know any better way of doing it I think it is your patriotic duty to come forth with that formula and let industry do it.

Because manganese is just about as critical as anything we have. Mr. SAYLOR. In other words, you want me as a Congressman to come forward and supply the Bureau of Mines-I am not expert on how to get this stuff but I know that they haven't developed any sys tem of taking it out of the slag pile. Any time anybody talks to them and wants to know about where our great sources of supply are they dig this old herring out and say, "We have got it in the slag pile." But they don't have any method of recovering it.

Mr. LARSON. They can speak for themselves on that subject. Mr. REGAN. That is not under the General Services Administration.

ROUTING OF STOCKPILE PURCHASES INTO CIVILIAN PRODUCTION

Mr. Martin, did you have a question you want to ask?

Mr. MARTIN of Iowa. I wanted to ask one question if I may. In the report of the Munitions Board, January 23, this year, they make the statement:

In some cases the needs of industry for essential civilian and military production are expected to be so great that it is probable that deliveries to the stockpile under existing contracts may be curtailed at the request of the National Production Authority.

Under the Defense Production Act of 1950 you have authority as I understood it to purchase for Government use or for resale? Mr. LARSON. Well our authority comes from the Executive order, Congressman Martin.

Mr. MARTIN of Iowa. I know. That is the general authority? Mr. LARSON. That is right, and it is under title III, sections 302 and 303.

Mr. MARTIN of Iowa. My question has to do with whether or not. you have received any instructions from National Production Authority to route the purchases of the various strategic and critical materials into civilian production instead of into the stockpile.

Mr. LARSON. Only in the instance that I referred to in the discussion I just had with the gentleman on your left.

Mr. MARTIN of Iowa. Regarding tungsten particularly?

Mr. LARSON. No. Regarding the manganese shipment that was diverted to Bethlehem Steel.

Mr. MARTIN of Iowa. Have you general instructions from the National Defense Production Authority regarding manganese in that regard?

Mr. LARSON. No. Just one instane that I told you about.

Mr. MARTIN of Iowa. You have no such instruction regarding any other strategic or critical material?

Mr. LARSON. No. Not any specific instructions to which you have referred.

Mr. MARTIN of Iowa. What I am trying to get at is: To whom can I look for the responsibility for that decision? You are going ahead buying materials within the limits of your available funds.

Mr. LARSON. And our ability to get it.

Mr. MARTIN of Iowa. Is it your judgment that controls whether or not any part of it shall go into the stockpile or back to private industry? Mr. LARSON. No.

Mr. MARTIN of Iowa. Is it the judgment of the National Production Authority?

Mr. LARSON. That is right.

Mr. MARTIN of Iowa. Is it their judgment?

Mr. LARSON. That is right.

Mr. MARTIN of Iowa. And you act only on their direction?
Mr. LARSON. That is right.

Mr. MARTIN of Iowa. You exercise no judgment at all?

Mr. LARSON. That is correct; if it has already been put into the stockpile; then, notwithstanding the Defense Production Act, then only the President can direct that it go out of the stockpile.

Mr. MARTIN of Iowa. I put something else besides the President in this stockpile law on that point. You will find it says an act of Congress.

Mr. LARSON. All blessings flow from Congress. Yes. I know of your work on that, Congressman.

Mr. MARTIN of Iowa. I am interested in building this stockpile to measure up to the yardstick that we had in mind when we wrote Public Law 520 and I am trying to find the fellow who can wheedle me out of that objective by his decision; and then I am going to hold him responsible if we go haywire and in not having that insurance policy in effective completion.

Mr. LARSON. Well, the only authority that could direct us to cease procuring for the stockpile in order that materials be channeled into industry is the Defense Production Authority.

Mr. MARTIN of Iowa. You mean the National Production Authority? Mr. LARSON. National Production Authority; excuse me.

Mr. MARTIN of Iowa. I can't even get the Munitions Board to keep those alphabeticals straight.

Mr. LARSON. I have difficulty myself. I am talking about Mr. Wilson and General Harrison's shop.

Mr. MARTIN of Iowa. That is the Defense Production Administration now.

Mr. LARSON. Well, they have

Mr. MARTIN of Iowa. We are talking about the National Production Authority. I think you are talking about——

Mr. LARSON. Defense Production Administration.