DOMESTIC MANGANESE DEPOSITS COULD PROVIDE TOTAL UNITED STATES REQUIREMENTS

Mr. DONOVAN. Would you care to speculate as to how much of our present needs we could get out of the deposits in the United States if we went out on full blast to exploit our domestic deposits?

Mr. BRADLEY. If you will take in the low grades, the 5 and 7 percent, and that sort of stuff, we could get it all, but at a terrific price. Mr. DONOVAN. What percentage could we get even if we had to pay this price?

Mr. BRADLEY. We could get all we need.

Mr. DONOVAN. We could get all we need out of our deposits in the United States if we paid the price?

Mr. BRADLEY. Yes; and given time enough to get the elaborate plans that are going to be established to get this low grade going.

Mr. DONOVAN. How many years would it take to get it if we were willing to pay the full price, if we had to get it from domestic sources? Mr. BRADLEY. Something in the neighborhood of 3 to 5 years. Mr. REGAN. Is there anything further? Any other questions? Mr. SAYLOR. We don't have enough stockpile in this country to take care of us for 3 to 5 years, though?

Mr. BRADLEY. We can figure about two. I am not speaking of military stockpile.

Mr. SAYLOR. What is that?

Mr. BRADLEY. We could possibly figure two.

Mr. REGAN. That is probably classified information.

Mr. SAYLOR. It is in the record here. They have 18 months' supply in this country. There isn't any secret about it.

Mr. BRADLEY. It has been increasing. There has been a net increase in the year 1950.

Mr. REGAN. We will conclude as soon as Mr. Martin asks some questions.

Mr. MARTIN of Iowa. Have we received any manganese from Greece?

Mr. BRADLEY. Not in any quantities of any great importance.

Mr. MARTIN of Iowa. I was struck by this report of Director of Defense Mobilization dated April 1. He said, "A number of development projects are under way, financed in part by the United States," and they list manganese from Greece in that report.

Mr. BRADLEY. Nothing I have seen in the statistics would make me believe that Greece is an important contributor. I see also I was mistaken in my African figures. The African imports are all greater

than Indian.

Mr. ENGLE. I didn't catch that.

Mr. BRADLEY. The African imports are greater than the Indian imports.

Mr. ENGLE. They are greater?

Mr. BRADLEY. Yes.

Mr. MARTIN of Iowa. I was interested in your answers a moment ago about the price. I believe you stated you hadn't got anything over to the higher echelon yet; is that right? This has to do with domestic production.

Mr. BRADLEY. It will run about $2 per unit down at Deming; El Paso will be cheaper.

Mr. REGAN. Why?

Mr. BRADLEY. Because we get it from a cheaper source; much of El Paso mining comes from Mexico.

Mr. REGAN. I will have to check into that.

Mr. BRADLEY. You have the businesses down in Texas, though. Mr. SAYLOR. You have the Texas City tin smelter down there, too. Mr. DONOVAN. Will the gentleman yield?

Mr. MARTIN of Iowa. I will be glad to yield.

Mr. DONOVAN. Just one or two questions before it slips my mind:

DOMESTIC MANGANESE DEPOSITS INFERIOR IN GRADE

On the score of richness, how do our domestic deposits compare with those in India and Africa?

Mr. BRADLEY. Very poorly.

Mr. DONOVAN. Do we have any that compare in richness with their deposits?

Mr. BRADLEY. None of any significance. There might be a drop or two here; specially in the Southwest, a few thousand tons, but the Indian and African things, they are speaking of millions of tons.

Mr. DONOVAN. So speaking of cost between domestic production and foreign production is measured not only by the difference in richness of the deposits and the labor, but the labor costs?

Mr. BRADLEY. Both.

MANGANESE PRICE RECOMMENDATIONS VARY WITH THE DISTRICT

Mr. MARTIN of Iowa. Getting back to this matter of price, I am interested in this in the over-all attainment of our objective. That leads me to ask whether you have made recommendations for price other than the one you just told me.

Mr. BRADLEY. On manganese?

Mr. MARTIN of Iowa. Yes.

Mr. BRADLEY. That is handled on an individual basis.

Mr. MARTIN of Iowa. Have you made any other recommendations other than that one price you report, at any plant?

Mr. BRADLEY. You are speaking of manganese?

Mr. MARTIN of Iowa. You reported a minute ago $2 a unit at Deming. Mr. BRADLEY. That is not a price that we are recommending. We must buy the ore that is delivered down there and we must find means of grading it up to a usable product and when that is done it will cost the Government about $2 a unit, which is twice the market price. Mr. MARTIN of Iowa. Yet you can't recommend a price?

Mr. BRADLEY. I missed the question. I am sorry.

Mr. MARTIN of Iowa. You have recommended a price for encouraging the production of manganese, domestically?

Mr. BRADLEY. A price at Phillipsburg-pardon me. A price at Deming, which we will pay for ores delivered to us, a price at El Paso, which we will pay for Mexican ore.

Mr. MARTIN of Iowa. You see, I have had a bill in here for quite a number of years myself in the manganese field. I am not from a manganese district. I am trying to get a result. I have been told and I would like to have you tell me whether you are familiar with the bill that I introduced and the bill that Mr. Mills introduced; they are identical?

Mr. BRADLEY. That is the price we are using in the Deming area. Mr. MARTIN of Iowa. We had a price recommended in that bill. I am trying to find out whether you have asserted any policy in this same field that my bill includes.

Mr. BRADLEY. The answer is "Yes." We are using those identical prices in the Deming area.

Mr. MARTIN of Iowa. You have the authority to do about everything there is in this bill, I understand.

Mr. BRADLEY. I believe so.

Mr. MARTIN of Iowa. We haven't got very far yet, have we? Mr. BRADLEY. We are making contracts, and those are darned hard to make and some of them are extremely complex.

IMPORTANCE OF A HEALTHY DOMESTIC MANGANESE INDUSTRY

Mr. MARTIN of Iowa. I had just exactly one purpose in introducing this bill. I wanted to put Congress and the administration on notice that some other than mining areas were decidedly interested in getting an end result, and I am keenly disappointed in the puny results of my efforts over the last 13 years; I am trying to get this gigantic machine to rolling, and in no field have I had more disappointment than I have had in the field of manganese. I am from a corn-hog district. I can quote you prices on corn or hogs, but I would like to know why we haven't got the machine going in a better and more effective way. to get results in domestic manganese production. It makes me see red to read the report here of our activities in encouragement in foreign countries, and then contrast them with impotency here at home.

That is the purpose back of my bill. I have been told you have the power to do everything you asked for in that bill, but why haven't we got more action.

Mr. DONOVAN. Don't you know that part of the main global strategy is to keep these manganese supply fields open for use; the very large part of the money we are putting up for defensive and offensive purposes in the war-making field is designed just to keep this supply of manganese open?

Mr. MARTIN of Iowa. And conserve our own supply?

Mr. DONOVAN. Yes.

Mr. MARTIN of Iowa. The Indians did a pretty good job of conserving our supply of materials, and we are taking the same path. I want to get our own resources developed. I have just one thought, and that is the self-sufficiency of our Nation.

Mr. BRADLEY. You are, I am sure, familiar with the fact that the production end of the mining industry is pretty well behind that bill and behind the purposes, and I think if there has been any resistance in the United States other than political, it has been from the consumer. Isn't that true?

Mr. MARTIN of Iowa. I can't hear you.

Mr. BRADLEY. The resistance to your bill other than for political considerations say here in Washington has been from the consumers, but I don't think that the producing mining industry has resisted your bill. In fact, I think they have been for it.

Mr. MARTIN of Iowa. They haven't exercised very much energy in support of my bill. I am disappointed. I need help. I am not a miner and I don't know anything about mines, but I know that we

are desperately short of manganese and have been trying all these years, ever since I got my baptism of fire in the military committee at the outbreak of World War II; there is a philosophy back of the stockpile law and the opening paragraph there announcing that the health of the mining industry, domestically, was superior to the stockpile program, or problem; and I am amazed at the impasse that exists here.

I can't get anyone down there with responsibility to put their shoulder to the wheel and give it a push. That is why I am absent today from the Committee on Ways and Means, sitting over here now, to try to get a look-see, to find out what you fellows look like, and how active you are. We are not going to lose this war if I can help it.

DISCUSSION OF LETTER FROM FRED SEARLS, JR., PRESIDENT, NEWMONT MINING CORP.

Mr. REGAN. It is now 5 minutes of 1. Before adjourning, we have a letter here from Mr. Fred Searls, of the Office of Defense Mobilization, who retired April 6.

Prior to his retiring, discussions were had before the committee with respect to the various units of this program, and he has written a long letter, addressed to Mr. John Murdock, chairman of our full Committee on Interior and Insular Affairs, and asks that it be placed in the record.

If there is no objection on the part of the members, it will be so placed.

Mr. ENGLE. I have looked the letter over and I have no objection to entering the letter in the record, and I will say to my friend from New York that Mr. Searls is defending himself against what he considers some charges which I made against him in regard to improper conduct, and he denies any improper conduct, and states that his opinions with reference to mining have always been forthrightly stated to the committees of Congress, and in effect that they were well known, which I think is true.

Now, Mr. Chairman, I want to make it clear, and I made it clear at the time that I raised the questions in regard to Mr. Searls, that I implied no such improper conduct on his part and didn't reflect on his personal integrity in any way with reference to the contract now being negotiated in Defense Minerals Administration for the San Manuel Mining Co.

Mr. Searls is at some pains in this letter to explain that he told the people in the Defense Mobilization Administration about this contract, which was in process of negotiation before he took the appointment, but Mr. Searls is entirely misinformed when he says, as he does, in the first paragraph of his letter, that he understands that it is charged "that I have used"-I am quoting

I understand that it is charged that I have used my position to benefit the Newmont Mining Corp., of which I am president,

and that he had to resign because of "improper conduct."

Now, no such thing is charged. My position was then and now is that although Mr. Searls was not guilty of any improper conduct as far as I knew, my objection to him was that he has a philosophy

entirely opposed to the philosophy of this legislation which he was supposed to advise the administration on, and I thought it entirely improper that a man basically opposed to a policy should be in a position of putting it into execution.

We have just seen a very notable example of what happened in the Far East in a similar situation.

Now Mr. Searls has resigned, or terminated his connection. He says that he did it prior to the time any reference was made to anything he did. Now, I want to reserve the right, Mr. Chairman, to put in the record at this point the statement which I made at the time Mr. Searls was under discussion here, and to further outline in the record the points that I made at the time, and which were strictly on the merits and on the record, and were based upon my disagreement with Mr. Searls on the basic philosophy in regard to this program, and not on any charge on my part that Mr. Searls had been guilty of any improper conduct.

Mr. REGAN. Without objection, it is so agreed. (The letter referred to is as follows:)

LETTER FROM FRED SEARLS, JR., PRESIDENT, NEWMONT MINING CORP., DATED APRIL 6, 1951, TO THE CHAIRMAN, HOUSE INTERIOR AND INSULAR AFFAIRS COMMITTEE DEAR MR. CHAIRMAN: Current daily papers of New York and Washington have carried statements that Representative Engle of your committee has called for my resignation or at least attributed by recent resignation as assistant to the Director of Defense Mobilization to improper conduct in my position. I understand that it is charged that I have used my position to benefit the Newmont Mining Corp. of which I am president, while opposing proposed subsidies under the Defense Act to other mining companies or individuals.

Inasmuch as your committee had requested me to testify today in respect to those matters, I had expected to use the opportunity to refute such charges and to defend my views. Since you have now canceled the hearing, and left me no opportunity to defend myself, I am using this letter as a means of doing so and respectfully request that you make it a part of the permanent public record of the committee.

At the request of Mr. Wilson and General Clay, who is a friend of mine from the last war, I entered the service of the Office of Defense Mobilization on De cember 27, 1950.

Prior to entering the service, I advised Mr. Wilson and General Clay that the only possible reason I could think of for not complying with their request was that I understood that the Magma Copper Co., in which Newmont owned at that time and still owns a share interest of about 22 percent, had been requested by the Defense Minerals Administration to equip its San Manuel property; and that a negotiation was being had, with which, however, I had had no contact or connection. I also explained that I had never been an officer or director of Magma Copper Co. Mr. Wilson and General Clay stated they could see no ob jection to my aiding them in the capacity of an adviser on materials. I have had no contact of any kind with such negotiations in Washington, New York, or elsewhere.

General Clay further explained that I would probably not have any direct responsibility or connection with the negotiations for expanding domestic mineral production, anyway, because under the set-up and regulations, these matters would be in the hands of DMA, unless some dispute arose or some question requiring Mr. Wilson's attention was brought up. I have had no connection or even discussion regarding the various projects for expansion of domestic mineral productions, except to deliver to Mr. Boyd and Mr. Larson-on one occasion-an expression of anxiety on the part of Mr. Wilson that the aluminum expansion contracts were not proceeding fast enough.

I have, as a result of experience in the last war, been opposed to subsidies being paid to marginal mines and undeveloped prospects during periods of full employment, believing that the desired end is not accomplished by these measures. My testimony before the Senate Committee on Interior and Insular Affairs, which has apparently been made available to Mr. Engle, sets forth the loss in