PART PLAYED IN MINERALS PROGRAM BY THE OFFICE OF THE SECRETARY OF INTERIOR EXPLAINED BY EXECUTIVE ASSISTANT TO THE SECRETARY Mr. ENGLE. How long have you been down in the Department, Mr. Wolf? Mr. WOLF. I have been there almost 4 years, sir. Mr. ENGLE. Is the description of your position, as given by the chairman, correct? You are Executive Assistant or something to Mr. Chapman? Mr. WOLF. That is correct, sir. Mr. ENGLE. What function do you play in this minerals program? Mr. WOLF. I attempt to assist the Secretary any way he wants me to for all programs. In this connection, when a program is submitted to the Secretary, if he desires it-this is across the board-and he feels there is more information needed from his point of view, or wants a question or several questions clarified, it is my responsibility to assure that the information is made available to him. Mr. ENGLE. Now, you have nothing to do with contracts as such? Mr. WOLF. No, sir. Mr. ENGLE. We have here 14 different minerals and metals mentioned in connection with this hearing; the general policy on any program that is set up for any one of those would have to clear through the Secretary's office, wouldn't it? Mr. WOLF. That is up to the Secretary, sir. He has made it known apparently that major programs and policies he would like to have cleared with him so that when they have been approved by him the individual actions can be taken without further question. By individual actions, I mean the execution or recommendation of contracts, certificates of amortization or any other measures which have to be taken in order to effectuate the program. Mr. ENGLE. What do you want to know about these programs? Let's assume the chrome program comes up and Jim Boyd has recommended $115 a ton for chrome delivered at the Grant's Pass stockpile. What would you want to know about that? Mr. WOLF. Well, sir, I don't want to know anything. In that particular case, I have not seen the chrome program. The Secretary has indicated that he would like to know how large this program is. In other words, what is the demand, what purpose is to be met, what is the supply and what measures are proposed in order to bring the two together, and in those situations where he has asked us to assist our work with Dr. Boyd's people, it has been on that basis. I might point out,that only a part of our time is spent with Dr. Boyd's group. Mr. ENGLE. When you say "our time," who are you talking about? Why do you designate them? Are they this palace guard I have been talking about? Mr. WOLF. Well, there was a suggestion made by the Under Secretray that I ask what a palace guard is. Mr. ENGLE. It is supposed to be a group of people who have the confidence of some fellow who isolates himself in an ivory tower and they control all communications to him and from him. As a consequence, he only knows what they want him to know. Mr. WOLF. Sir, I suppose we would fit part of that category. I hope that I have the confidence of the Secretary; I work for him. The few people who are working with me, I presume, have the confidence of the Secretary, but we do not control the flow of papers to and from the Secretary. We do not control communications of other sorts to and from the Secretary and I think Mr. Boyd will assist me in assuring you that communications, both personal and otherwise, between the Secretary and his administrators, are not inhibited in any fashion by anything other than the limitations on the Secretary's time. Mr. ENGLE. I suspect that Dr. Boyd is inhibited with the Under Secretary sitting here right alongside of him, and the Executive Assistant to the Secretary sitting one step a little farther over. I suspect that he is going to be cautious about any answers he gives under those circumstances. Mr. SEARLES. Mr. Engle, I might mention this, which might be of some help. We have five defense agencies down there, and we have three primary things, the purchase of commodities, amortization and loans, and it is important that we have in all those five agencies an understanding so that we don't have 80 percent amortization over in one case and in another department we handle 50 percent, and they are comparable because we would be doing the job poorly that way. That is one reason we have to coordinate in our five operations. Mr. ENGLE. I understand all that, but what I am trying to find out is what happens when somebody down in Dr. Boyd's shop-let's take, for instance, Phil Bradley, who has chrome, tungsten, and manganese-writes up a report or program about what he thinks should be done. Now, it comes up through Jim Boyd, up to Mr. Wolf, doesn't it, and if Mr. Wolf doesn't like the looks of it he shoots it back down and the Secretary never gets a chance to see it; is that right? Mr. WOLF. Sir, may I add just one point: You mention chrome, tungsten, and manganese. Mr. ENGLE. That is right. Mr. WOLF. I have never seen it. It so happens I have never seen those programs. If the programs are referred to us and the Secretary desires that we look at them, we do so. Mr. ENGLE. How do you find out what the Secretary wants? He would have no way of knowing that there is a program coming up unless somebody told him. Dr. BOYD. I might interject there, Mr. Engle, I report directly to the Secretary and see him as frequently as his time permits. In some cases, where we have been in a hurry to get these things done, I have taken them directly to him and he has approved one or two programs immediately. In some cases, where there is some question in his mind about the size of the program he has referred it to his staff to review for him, to see that we are in line with the general policy. Mr. ENGLE. The thing I can't understand is why the Secretary should interpose anybody between you and him. Mr. SEARLES. He doesn't. Dr. BOYD. I don't think he has. Mr. ENGLE. If the Secretary doesn't trust you enough he should fire you and get somebody in there whom he does trust. If Ken Regan gives me a job to do, when I make the recommendation and put my name on the paper, he is going to sign it, or he wouldn't have given me the job. That is what I am there for, but if he asks my friend Redden to sit in between and say, "Now, when Engle brings up something you look it over, Redden, to see that he isn't handing me a hand grenade," then I say there is something wrong with me. I ought to be canned because if I don't have that kind of confidence in the Secretary I shouldn't be there. What I am saying is that we have set up here layer after layer of administrative review which is completely preposterous and they are all parallel. Whenever you go over one hurdle you have to go right over another one. What is your background in mining by the way? Mr. WOLF. I have never been in a mine, sir. Mr. ENGLE. I understand you are an economist. Mr. WOLF. Economists are always suspect before this committee. Mr. SEARLES. I am glad it is limited to economists. Mr. ENGLE. What is your training? Mr. WOLF. Sir, I have been in Government for about 14 years. I came here directly from college. My entire work experience has been in Government. My college training has been in economics, and some sciences. Mr. ENGLE. How can you pass on a mining program? Mr. WOLF. I do not pass on it, sir. Mr. REDDEN. May I ask a question? Mr. ENGLE. Just one more thing. Here is a problem that an administrator has. Now, I say that I know that Dr. Boyd is under some limitation in what he can say but I can say what he is thinking, I'll bet you, and that is this: When you bring in consultants from the field who know the mining industry and pay them good hard cash to give their opinions and it goes through a man who has been in the Bureau of Mines for years, then the program goes up to a group in the Secretary's office, headed by an economist, who has never been in a mine and doesn't know anything about the mining field, then that fellow has to be completely educated on that program in order to get into his noggin what it is all about, isn't that right? Mr. WOLF. Not completely, sir. If we attempted to pass or review on the basis of the technical considerations, I would say "Yes," but the sort of information which the Secretary requires, when he asks us to get it for him, or by getting it for him, that does not mean that we independently evolve this information. I believe that our relationships with Dr. Boyd are such that we go back to his people and say, "Here are some additional data which we need. The Secretary has indicated he likes to have it this way." Mr. ENGLE. Why not deal directly with Dr. Boyd? I don't see why he should interpose you or anybody else. I am not criticising you. I am saying procedurally the thing is a monstrosity. I would like to ask Mr. Searles why is it necessary to interpose any group between Dr. Boyd and the Secretary, and for that matter, why is the Secretary interested at all? Dr. Boyd is with Defense Minerals. Why does the Secretary have to O. K. all these things? DEPARTMENTAL PROCEDURE DEFENDED BY UNDER SECRETARY OF INTERIOR Mr. SEARLES. Well, primarily, because it is his responsibility from the delegation of authority he has under the act. We might go back a little bit and suggest if you consider starting up the United States Steel Corp. tomorrow, with the size of it, and I am sure you would realize it would take at least a year to have what you want. In this case we have endeavored from December 6, the time Mr. Wilson came in, to set up an organization in our shop to handle a tremendous program which has a tremendous effect on our economy. Now, in turn, things we can do, if we don't do them right, will have a terrific effect on our economy. You can read Mr. Wilson's testimony before the House Appropriations Committee. You will find that he talks about a calculated risk. We have got two calculated risks, one is the Soviet and the other is what this program means to our economy. We cannot throw away the Government's money. We have to look at it cautiously, and as fast as we can. Mr. Boyd has an organization which is partly men from industry. These men, you don't always get the man you want, and a man doesn't work out in the job, or the man decides 3 months in Washington is enough for him. He is going back home, where he gets more money and where he likes to live. Now, all those things are what we have been confronted with in this organization. On top of that we have got five organizations, four of them which are primarily big, and we have had to coordinate those organizations together as anyone would in any business, and the Secretary has the primary responsibility that they all function right. Now, you can read the testimony of other hearings in which accelerated amortization becomes a problem. You will find it where loans do. It is quite a job. I was in the bonding business for years and I look at some of these things these fellows have to decide on, and they push it back by getting this defense effort forward; at the same time they are confronted with making a decision that is not going to hurt our economy 1 year, 2 years, 3 years, 5 years from now. I have listened to people who have come in. They have asked on a specific case. I have sent to Jim's shop for the case, and I have gone through it from stem to stern to find out whether we were lax in it and in the majority of cases I can find no means of criticism. I had a gentleman in the other day, a case out in New Mexico, and I got the case in and I went through it and I discussed it with him. When I told him everything that was in it he said, "Well, I can understand." He said, "This mine doesn't deserve the loan. If the price of the metal goes up back to World War I price, then and only then would we go forward." And he was entirely satisfied. Now, I have done that in dozens of cases and I know you can go find a case, you can any place, where perhaps you could say, "Well, it was there a week too long," but if these things are handled in a business manner you won't be satisfied and the people won't be satisfied, and the responsibility in coordination of these has been mine for 4 months. I came in a little green on it naturally. I know a little about mines, having been down in one, but it ends right there, but it isn't a matter of technical knowledge about mines. It is a matter of interrelation of all these programs and their cost together, and we have to do that and we have to follow it in order to fulfill the obligation that you charged us with when you passed this bill in Congress. Mr. ENGLE. But do you defend the procedural monstrosity which has been set up here to operate this defense minerals program? Mr. SEARLES. There is none in our office. Mr. ENGLE. What do you call it? Mr. SEARLES. I will go further than Mr. Engle. I will defend also the delegations of authority and the manner in which it is handled, the manner in which we go to DPA, and how we go to GSA, and even to the Bureau of the Budget. It is not in this law but it is in an earlier law that they have to approve all forms. I wondered why the form on exploration was in the Bureau of the Budget. That took 2 weeks but it is in the law. That is a protection thought of years ago. I don't think it is particularly necessary in this case, but it still had to go there. I don't have any criticism of it. I don't consider it a monstrosity. Mr. ENGLE. Well, I will have to tell you that I was down to see the President of the United States on Tuesday, and he is not happy about this thing at all. He told us that the biggest problem the President has is making this business of Government operate. Mr. SEARLES. You are quite right. DEFENSE MINERALS ADMINISTRATION SHOULD BE PART OF EMERGENCY AGENCY INSTEAD OF DEPARTMENT OF INTERIOR Mr. ENGLE. The Government is the biggest business in the world, and the trouble is getting the defense minerals program set up in such a way that you can get something done instead of passing pieces of paper around among the agencies. The President is not happy about it, so if you defend it you have got high authority that you will have to convince. And I hope that this subcommittee makes some recommendations and if they take my recommendation, they will pull this whole business out of the Department of the Interior. It hasn't any business there. The President of the United States, I think, made a mistake when he tried to integrate this thing into these existing departments rather than put the whole thing under the emergency agency, the Defense Production Administration, and let it run that way; at the present time look at what a man has to do. Now, it hasn't been 6 months, Mr. Searles, since you were out in private business and I think you would holler your head off if you had to go through this. Mr. Budge was asking about his contract. The basic fault with the whole thing is that procedurally it is so impossible that you can't ever make it work, even if you have the best men. Dr. Boyd gets up a program; it goes up to the Secretary; it is kicked around. If Wolf doesn't understand it or don't like it, down the line it goes for explanation. The Secretary doesn't have time to think of all that. After it is beat around the shop, back and forth until it is worn thin from the friction, then it goes over to Dr. Morgan. Dr. Morgan looks it over and he has a bunch of experts and some of them are economists, too, who have never had anything to do with the mining program, so |