9. Negotiation by Production Expansion Division The PED shall negotiate with the applicant and finalize a purchase, loan, or other appropriate contract. (a) One copy of loan applications shall be sent to the Reconstruction Finance Commission by the Production Expansion Division as soon as received in the Division. This is for the purpose of a check on credit rating as provided in NSRB document 131 dated November 8, 1950. (b) Representatives of General Services Administration detailed to work with the Production Expansion Division shall take part in negotiations on procurement contracts. (c) The General Counsel's Office shall assist the Production Expansion Division in drafting and negotiating contracts as needed. (d) When a contract of any type has been negotiated and is ready to certify, the Production Expansion Division shall prepare the necessary certification for the proper certifying official. 10. Control Point The Executive Secretary of the Defense Minerals Administration shall be the control point on movements and actions taken on applications. In addition to the docketing and acknowledgment mentioned in paragraph 1, which shall be done upon receipt, each action taken on an application is to be recorded by the Executive Secretary. The branches and divisions shall prepare carbon copies of all letters and correspondence concerning an application for the Executive Secretary so that his record will be up to date. The existence of such a control point will prove valuable to all parts of the organization. All divisions and branches are requested to cooperate to the fullest extent in keeping the Executive Secretary informed. The Executive Secretary shall also be responsible for maintaining a master file of applications. JAMES BOYD, Administrator. UNITED STATES DEPARTMENT OF THE INTERIOR, DEFENSE MINERALS ADMINISTRATION, OFFICE OF THE ADMINISTRATOR, Procedural Instruction 4 Subject: Organization Effective immediately, Mr. Tom Lyon is designated Chief, Supply Division, Defense Minerals Administration, vice Mr. S. H. Williston, resigned, and Mr.. Lyon will assume all the duties and responsibilities of that office. JAMES BOYD, Administrator. UNITED STATES DEPARTMENT OF THE INTERIOR DEFENSE MINERALS ADMINISTRATION OFFICE OF THE ADMINISTRATOR WASHINGTON 25, D. C. Procedural Instruction S MARCH 23, 1951. Subject: Procedure for Formulating DMA Commodity Programs Expeditious and efficient formulation of commodity programs requires utilization of the information, knowledge, and judgment of both (a) the Office of Economic Analysis and (b) the commodity committees of the Supply Division. To accomplish this objective, the following procedure is established: 1. A standing panel of three members shall be set up for each commodity. One member of each panel shall be selected from his staff by the Chief, Office of Economic Analysis; another shall be a member of the appropriate commodity committee designated by the Chairman of that committee; and the third member and Chairman shall be the Chief of Planning and Programming, Supply Division. 2. The responsibility for formulating programs shall rest exclusively with the Director of the Supply Division. Any supply or technical information required for programming shall be obtained by the panel through its member of the commodity staff. Information on requirements and other economic data may be obtained through the member designated by the Chief, Office of Economic Analysis. 3. The commodity program, in general, shall comprise : a. The "balance sheet" of prospective supply and indicated requirements based on military requirements, stockpile requirements, and requirements for sustaining the civilian economy insofar as practicable, as directed by the Defense Production Act of 1950. b. A critical analysis and evaluation of the balance sheet. c. A statement of a definitive "goal" of production toward which DMA should work. d. A summary of the steps proposed by the Supply Division for attaining the goal, including estimates of any cost to the Government. 4. Before the program is submitted to the Director of the Supply Division for his approval and reference to the Administrator, the tentative program shall be submitted to the Commodity Branch Chief for review; he shall report thereon, with his comments, within 24 hours. If Commodity Branch Chief or the panel disagrees with any or all of the features of the program, it shall be referred to the Director of the Supply Division with a statement of the dissenting opinions. 5. The Director of the Supply Division shall prepare, for the signature of the Administrator, a description of the program for submittal to the Secretary of the Interior. Pending approval of the Secretary, the program as submitted to him will be utilized by the staff of DMA for planning purposes. 6. Each program must be approved by the Defense Production Administrator after the Secretary has approved it. Pending approval by the Defense Production Administrator, the program as submitted will continue to be the planning document for the Defense Minerals Administration. 7. When a program is submitted to the Secretary, copies of the tentative program shall be sent to the Director of the Geological Survey, the Director of the Bureau of Mines, the Chief of the Commodity Branch, DMA, the commodity representatives of the Bureau of Mines and the Geological Survey, and to the following DMA officials: the Executive Secretary, the Chief, Office of Economic Analysis, the Director of the Production Expansion Division, and the Director of the Requirements Division. Any objections to the program shall be sent to the Administrator within six working days. 8. Following approval by the Defense Production Administrator, the adopted program shall be the official basis of all DMA activity until superseded by a new program (or by an amending statement) based on later developments. The procedure herein outlined shall be followed in the preparation of a new program or of an amended statement. JAMES BOYD, Administrator. UNITED STATES DEPARTMENT OF THE INTERIOR DEFENSE MINERALS ADMINISTRATION OFFICE OF THE ADMINISTRATOR WASHINGTON 25, D. C. Procedural Instruction 6 MARCH 22, 1951. Subject: Internal Procedures of Defense Minerals Administration For Processing Applications For Domestic Projects. 1. All actions by Defense Minerals Administration are for the expansion of production (certificates of necessity for accelerated amortization, purchase contracts, price guarantees, loans, guarantees of loans, exploration projects). No action will be taken except pursuant to a written application. Prescribed application forms should be used if available. In some cases, oral conferences may be had with applicant to aid him to come to a conclusion as to whether he should file any application, and as to what he will apply for, but the action to be taken by Defense Minerals Administration must be based upon a written application. 2. All applications received by Defense Minerals Administration will be routed first to the office of the Executive Secretary for recording and docketing under a docket number. In the case of applications received in the first instance in the field, a copy of the application should be forwarded immediately to Washington for recording and docketing. 3. The Executive Secretary will dispatch each application, after recording and docketing, to the chief of the appropriate commodity branch of the Supply Division. 4. The chief of the commodity branch will submit the application to and discuss it with the appropriate commodity representatives of the Geological Survey and the Bureau of Mines, and shall then determine if the project covered by the application is suitable for inclusion in his commodity program. The action of the chief of the commodity branch shall be as follows: (a) Immediate rejection.—If the project obviously is not suitable for inclusion` in the commodity program, or if it can be determined from the face of the application that the project is not feasible, the commodity branch chief shall prepare a letter to the applicant for the signature of the Director of the Supply Division rejecting the application. He will, for the record, supply adequate reasons for rejection. (b) Immediate approval.-If the application affords on its face sufficient evidence (including the recommendations of reputable engineers and information otherwise available) from which it can be determined that the project is suitable for inclusion in the commodity program and provides a feasible means of expanding the production of the subject commodity, the commodity branch chief will prepare a memorandum for the signature of the Director of the Supply Division to the Director of the Production Expansion Division recommending acceptance of the application and approval of the project. As soon as it appears likely that the project may be approved (under 4 (b) and (c)), he will: (i) Consult informally with the Director of the Production Expansion Division to assure himself that he has sufficient information on which the latter may subsequently negotiate; (ii) He shall present the material requirements to the Director of the Requirements Division for advice on the feasibility of the project. The Director of the Requirements Division may consult with the Facilities Branch of NPA; (iii) Provide the Chief Economist with the general terms proposed for the project and necessary data on which he may make an economic analysis of the project as to its relationship to the industry itself and the economy in general. The Chief Economist will submit his analysis to the Director of the Requirements Division. (e) Deferred action on applications.-If the application is such that immediate action cannot be taken upon it, as provided in (a) and (b) above, the commodity branch chief shall proceed as follows: (1) He may prepare a letter for his own signature to the applicant to obtain any necessary additional information. (2) He may prepare a letter for the signature of the Chairman of the Coordinating Committee submitting the application to the executive officer of the appropriate field office for such examination or other action and report as may be necessary. This letter will be countersigned by the Bureau and Survey representatives. (3) The Executive Officer of the Field Team will submit the report in quadruplicate, one copy will be retained in the files of the Executive Secretary, one will be sent by the Executive Secretary to the Chairman of the Coordinating Committee, and the remaining two copies will be dispatched to the commodity branch chief. The field report does not constitute a formal submission of the Geological Survey Bureau of Mines until submitted by the Coordinating Committee Chairman and countersigned by the Geological Survey and Mines members to the branch chief involved. With the original application and required additional information and reports in hand, the commodity branch chief shall make the determinations specified either in (a) or (b) above. 5. Memoranda of the Director of the Supply Division to the Director of the Production Expansion Division signifying approval of any application or project shall specify in general terms his recommendation as to the form of aid to be granted and his recommendation as to the terms and provisions of any proposed loans or purchase contracts. He shall not attempt to negotiate with the applicant except to obtain necessary information. The Director of the Production Expansion Division is charged with final determination of the type of aid to be granted, and negotiation with the applicant. 6. The Director of the Production Expansion Division shall assign the approved 'application and project to one member of his staff, hereafter called the "Negotiator," who shall be primarily responsible, under the supervision of the Director of the Production Expansion Division, for consummating a suitable transaction. If necessary or desirable the Negotiator may communicate with the applicant by mail or by conference for such further information as may be necessary and shall be free to call on the commodity branch chief for advice. The Negotiator shall prepare for the signature or approval of the Director of the Production Expansion Division any moving papers necessary to consummate the transaction. 7. The Director of the Production Expansion Division shall take final action upon the various transactions before him as follows: (a) If the application is for a certificate of necessity for tax amortization, he shall follow the general pattern established by the Chief Economist for the commodity involved, unless there are modifications required by the individual case. He will then prepare a letter to the Defense Production Administrator recommending the granting of a certificate, such letter to be accompanied by a copy of the economic analysis and the reasons for deviation from it, if any. (b) If the application is for the guarantee of a loan under the Federal Reserve Board procedures, he shall forward the application to the General Counsel with a covering memorandum noting his approval of the application, and that agreement has been reached on the terms with the applicant. (c) If the application is for a loan or guarantee of a loan by the RFC, he shall forward it to the General Counsel with a covering memorandum noting his approval of the application. (d) If the application is for a purchase contract without any loan, guarantee of loan, or financing for expansion, he shall forward the application to the General Counsel with a covering memorandum noting his approval. (e) If the application is for a purchase contract with provisions for guaranteeing a minimum price or arrangements for financing plant expansion, he shall forward it to the General Counsel with a covering memorandum noting his approval. (f) If the application is for an exploration project contract, he shall send the completed contract forms, ready for the signature of the operator, to the suitable field office to be presented to the operator for signature. 8. The General Counsel shall act upon all applications forwarded to him as follows: (a) Acting in collaboration with representatives of General Services Administration, he shall draft any necessary contracts or statements of the moving provisions of such contracts sufficient to form the basis of a recommendation for the signature of the Administrator for the issuance of a certificate by the Defense Production Administrator authorizing the Administrator of General Services to enter into the contract, or authorizing RFC to enter into the loan, or guarantee of a loan, as the case may be. (b) In collaboration with the representatives of General Services Adminis tration, he shall prepare for the Administrator's signature to the Defense Production Administrator the recommendation referred to in (a) above. 9. In all cases of irreconcilable differences of opinion as to the action that should be taken on any application, the entire matter shall be submitted to the Administrator of Defense Minerals Administration for final determination. The different administrative heads responsible for processing applications shall feel free to consult with one another on any matters passing between them, and shall endeavor to crystallize and point up differences of opinion before making any such reference to the Administrator. JAMES BOYD, Administrator. (SUBCOMMITTEE NOTE. The hearings continued at this point following the presentation of Dr. Boyd's summary statement which ends on p. 10.) SOUND DOMESTIC MINING INDUSTRY ESSENTIAL TO NATIONAL SECURITY Mr. MURDOCK. Before Mr. Engle proceeds, I wonder if I might make a comment or two? Mr. REGAN. The chairman will always recognize Mr. Murdock. Mr. MURDOCK. This hearing should bring out all of the essential facts concerning this vital program. I wanted to make it clear from my standpoint of older experience on the committee why I am tremendously interested in what we are doing here and trying to find out. I have been on the Mines and Mining Committee since I have been a member. I see a gentleman in the audience who was in the audience before the House Military Affairs Committee on May 18, 1937, when the Military Affairs Committee was considering the Faddis bill. The gentleman will recall that I appeared that morning before that same committee asking that the bill be modified in the direction of producing domestic manganese, especially, and other critical strategic minerals and metals and emphasizing the buy-American clause. Mr. Chairman, I found at that time that certain Members of Congress who never had anything to say regarding encouraging domestic production, had a suspicion that we from the West were more interested in developing home industry in our mining States than we were in national defense. Nothing could be further from the truth, of course. We have our first obligation to the Nation's security and we believe that the maintenance of a thriving mining industry at home is the first essential to national defense and that, of course, is the thing we are keeping constantly in mind. I know that there must be a delicate adjustment in our procurement of these necessary things in the case of war or an emergency, but my entire feeling has been during the 14 years that I have given this some study, not being a mining man, not knowing the technique of the mining industry, but knowing simply this: That you cannot turn on mineral production and turn it off as water at a faucet, and knowing full well that it is not in the interest of national security for us to be dependent upon foreign sources which might be shut off in case of entire war. I wish to state to Dr. Boyd, who is a newcomer, that that is our purpose now: To see what we can do concurrently in developing the mining industry but in the matter of national defense and only to the extent that it contributes to national defense. Mr. REGAN. I think that that is a very nice statement, Mr. Murdock, and I am sure the members of this committee will appreciate it because you state that you are not a mining man but come from the country which knows how long it takes and the untiring effort that it takes to get a mine in profitable production. It was well timed. Mr. Engle, do you have some questions of Dr. Boyd? DEPARTMENTAL PROCEDURE FOLLOWED BY DMA IN FORMULATING MINERALS PROGRAM Mr. ENGLE. Dr. Boyd, I want to thank you for your very kindly reference to the speech I made in Denver at the Colorado Mining Association which I note you say was followed up by a number of steps to immediately process individual actions. I think you understood that what I had to say at that time was not directed so much in a critical fashion at the efforts you were making or at some of the very able people you have and very sincere people you have in your organization. I know you do have them down there. I know a great many of them personally. But I have been disturbed about the mechanical set-up in |