Mr. SAYLOR. Let us move on to Mr. Mittendorf. What do you have o say about that? Mr. MITTENDORF. I concur with Mr. Bradley. One objection to he Mills bill, we stated here a few minutes ago, in manganese ores, he type of mines, the type of ore, the type of complection in the mineral varies so that we feel we should tailor programs to fit an individual district. Mr. SAYLOR. Would the limitation which Mr. Bradley placed on that fit in with your tailoring? Would that not require the recoverable ore to be the basis upon which you were paid? Mr. MITTENDORF. That would correct it. Mr. SAYLOR. That would correct the situation? Mr. MITTENDORF. That would correct it. Mr. SAYLOR. Let us move on. Dr. Morgan, what do you have to say about it? Dr. MORGAN. We in DPA don't get into the technical details. We generally concur in whatever DMA says will get the manganese. If it requires anywhere near the right amount of money, we will approve it. Mr. SAYLOR. Do you understand the theory of the Mills-Martin bill: That the Government will buy for a stated period all of the ore that is produced? Mr. Bradley feels that it should be a requirement; that it is not just the assay ore that comes out but it is the recoverable ore that is produced, and with that limitation he thinks it is a good proposition. So, if he goes along with it, would you be willing to say that for 5 years the Government will buy all that ore on a schedule-pay set-up? Dr. MORGAN. Sir, whatever the Defense Minerals Administration thinks is the best way to get the manganese out, if it is anywhere near reasonable and I don't have enough technical knowledge about this detailed proposal to judge just at the spur of the moment whether it is or isn't—if it makes any sort of sense, it would be approved. If it is a 5-year contract, or a 1-year contract, or involves building a plant or buying ore, or testing it or analyzing it-whatever it takes-DMA has the experts on manganese and must negotiate the contract. All we in DPA say is we need so many hundred thousand tons more of manganese, more than we have now, and we are willing to put up the money to get it. The people in DMA go out and find the way to get it. Mr. SAYLOR. We have passed you by. Mr. Elliott, what do you have to say? Mr. ELLIOTT. If that is recommended and certified, of course, we would execute the program with this qualification: That under the rulings of the Budget Bureau that we mentioned in our previous hearings there would have to be an over-all ceiling. Mr. SAYLOR. In other words, while the program would last for 5 years, your Department would have to put a ceiling on the number of units that were paid for; is that correct? Mr. ELLIOTT. That is correct, sir, because of the ruling of the Bureau of the Budget that requires us to put up the cash for the maximum contingent liability of the Government. Mr. SAYLOR. But, if the Defense Minerals Administration can in their over-all picture figure out how many units are recoverable throughout the United States and would certify that to you, then you would be willing to go along with that figure; is that correct? Mr. ELLIOTT. That is correct, sir, assuming that DPA certified the amount of money to the Budget Bureau and they made that money available. Mr. SAYLOR. All right, sir. Now we will come to your counsel, Mr. Gumbel. Do you agree with that? Mr. GUMBEL. That is right. PRICE OF MANGANESE ORE TO BE DECONTROLLED Mr. SAYLOR. Let us move over to the OPS. Mr. Ewing, how does that affect you? Mr. EWING. We plan to decontrol the price of manganese ore. Mr. SAYLOR. You plan to decontrol the price of manganese ? Mr. EWING. That is right. Mr. SAYLOR. Folks, I think that is a remarkable statement. That is the first crack in the armor. Mr. EWING. Possibly Mr. Jacoby could explain our position a little better, but I think the statements of these gentlemen will confirm it. Mr. SAYLOR. Let us find out where you come in, Mr. Jacoby. Mr. JACOBY. On this manganese situation, the tonnage of manganese ore we are talking about in the United States is an insignificant factor in the manganese picture. Our usage this year will be about 2,000,000 tons. For the last 5 years, I think our production in the United States has been less than 150,000 tons. Most of our ore today is purchased by four of the largest producers of manganese alloys. Those people purchase their requirements abroad and as such are not subject to the price regulations. Some of the ores do come in through brokers, and is subject to price regulation, but that is a small amount. On the basis of that position, we are recommending the decontrol of manganese ore. We are also prepared to recommend that GSA be not subject to any provisions of the existing GCPR; that we hope to get out promptly in advance of our decontrol of prices on manganese ore. MANGANESE PROGRAM PROVIDING UNIFORM PRICE FOR ALL DISTRICTS HELD LESS ADAPTABLE TO PROFIT CONTROL Mr. SAYLOR. All right. Now we will start back with Mr. Bradley. Mr. Bradley, what is wrong with the program that I have just suggested as a solution and an over-all picture in the domestic manganese problem? Mr. BRADLEY. Do you mean for the Nation, or for this area! Mr. SAYLOR. I mean for the entire country. We have manganese in very few spots in this country. Mr. BRADLEY. There are certain ores we can get more cheaply, and we ought to do it, and our other ores will cost a little more and we have got to get them somehow. Mr. SAYLOR. In other words, if there is ore in certain places, you feel that the defect with this is that if there is ore that can be recovered at a lower cost, therefore, the Government should take advantage of that and the man that owns it should not have that benefit at all; is that correct? Is that your statement? Mr. BRADLEY. I don't want to be driven into a statement on profit control, because I am essentially a producer myself, and I don't like the idea of profit control; but, nevertheless, sitting on the Government side, it doesn't seem too proper for a man to make a bonanza out of an emergency. Mr. SAYLOR. How is the man going to make a bonanza out of an emergency if he happens to own the land that contains ore that is easier to mine than a man who doesn't? In other words, you are going to penalize him because you are sitting, in the position you are. Mr. BRADLEY. Well, he is not penalized. We were trying to add just these prices, or, in my department, we tried to recommend prices that are necessary to bring the ore out of the ground, and obviously that price is a price which will allow a man to make some money off of a thing, or he wouldn't go into it. I won't go into things I can't make money off of or don't stand a pretty good chance. Mr. SAYLOR. That is right, and you can't expect anybody else to stick their money into it unless they have a reasonable chance of getting a fair return. Mr. BRADLEY. That is right. Mr. SAYLOR. Now, if you set up a standard whereby the average fellow has a chance of getting a fair return, the mere fact that one fellow happens to be in a position where he can get more, do you think there is sufficient reason not to put the program into effect? Mr. BRADLEY. It depends on the ore. It depends on the metal. In tungsten, some people are going to make money on this Government price. They are going to make a lot of money probably. Mr. SAYLOR. What is wrong with the other people making a little money on manganese? Mr. BRADLEY. You couldn't divide tungsten; the occurrence is sporadic, etc., but manganese has a chance of better control, and I think it better that the price be controlled within these few areas that we speak of. Then, outside of those areas in the sporadic deposits, let them be paid on the basis of this schedule that you and I speak of, but let us control these districts. There are only four or five at the most of them, and adjust them to the prevailing conditions in the district. Mr. SAYLOR. Do you feel that that will be necessary before you could go along with the over-all picture I have outlined? Mr. BRADLEY. Well, the fact of the matter is that the prices are pretty generally set up for these districts, and they do depart somewhat from this mill (Mills bill) schedule, but not too far. Mr. SAYLOR. Could you prepare, or are you in a position to give this committee your estimates of what it would be necessary to pay per unit of recoverable ore in each one of these areas? Mr. BRADLEY. I would prefer to give you figures like that as a confidential communication. Mr. SAYLOR. All right, sir. I would appreciate it if you sent it to the chairman in that fashion. Mr. BRADLEY. All right. Mr. REGAN (presiding), Mr. D'Ewart had some questions if you have finished. STATUS OF BUTTE-PHILLIPSBURG (MONT.) MANGANESE CONTRACTS Mr. D'EWART. Mr. Bradley and Mr. Mittendorf, you discussed under questioning from Mr. Engle the Deming area. Would you in a general way discuss the Butte-Phillipsburg area along the same lines as you discussed the Deming area? To refresh your memory, Mr. Boyd testified last time that there were four contracts ready and available as soon as the money in the supplemental bill was signed by the President. That money has been made available. There was a fifth contract concerning which there were some terms not yet agreed on but I understand you have reached an agreement on the fifth contract having to do with a nodulation mill in Butte. Just what is the status of the Butte-Phillipsburg manganese program? Mr. MITTENDORF. Let me say at the outset that this has been one of the most complicated pictures that I have ever been engaged in in all my experience in the Government and in the mining industry. It has been a picture where we have had jurisdictional disputes in the field. It has been rather intangible, if you look at it in any light. I say intangible from the justification of the ore reserves, the ability of the mines to produce, and the individual thinking of the very component parts that go into this over-all program. As you probably know, Mr. Bradley had all of the mine operators come into Washington to see if they could not agree to a meeting of minds. That was accomplished in the case of the three small independent producers, and we finally did draft a contract, after many. many tries, which satisfied Mr. Cole, operator of the benefication plant, and to justify this program we did rely upon the ores which would be produced from two mines which did not subscribe to the thinking of the other three mines. Therefore, we set about to treat them on an individual basis. We have set about to discuss all this with GSA and they have been working diligently to whip these contracts into shape. I was of the opinion that we had most everybody satisfied until yesterday; these gentlemen with me today and I remained into the late evening listening to the protests that have arisen now when we are in the final stages of consummation of the contracts. We have had to call at least I want to call-a very temporary halt-in my own mind I want to listen to everybody; I want to get all the facts before me before we subscribe to any permanent plan. I don't want to knowingly go into a deal that I don't think is a good deal for both the Government and the producer. It is my purpose now, as soon as I can get free to my office, to get on the phone to resolves differences. This situation, as I say, arose last night. There has been information reach us from Butte which refutes to a very large extent what we heard yesterday by word of mouth. Mr. D'EWART. In other words, the contracts that Mr. Boyd said were all signed and all ready to go except that the supplemental appropriation had not been passed are not now even in the signed stage? Mr. MITTENDORF. We only received our appropriations, I believe, the latter part of last week. Mr. D'ÉWART. I understand the appropriation bill was signed the 30th, or was available the 30th of May, under which the funds were to be available to implement the contracts that, it was testified, were fully agreed to before this committee at the last hearing, with the exception of the one having to do with the nodulation plant. Those are all voided and you are starting all over again? Mr. MITTENDORF. No, not by any means. We are not going to start over again. Mr. D'EWART. What has become of those contracts that were agreed to except that the money wasn't available-and the money was available on the 30th of May-what has happened to those contracts? Mr. MITTENDORF. Those contracts are in the hands of, I believe, GSA right now. Mr. GUMBEL. That is right. Mr. MITTENDORF. They have men engaged in putting them into their final form for signature. Do you wish to carry on? Mr. GUMBEL. Yes. I will be glad to. Congressman, you have often thought you have a deal when you haven't got a deal. That is true in Government– to. Mr. D'EWART. We were told these contracts were completely agreed Mr. GUMBEL. That was the impression. Mr. D'EWART. The only thing that was waiting was the money and that was made available on the 30th, so I supposed we were getting our manganese by now. Mr. GUMBEL. That was our impression and we were very much disturbed to learn that we didn't have a meeting of minds. These contracts, as you know, are all really related to one another. Four of the contracts are for the supply of ore to the beneficiating plant and one of the contracts was with the beneficiating plant to treat the ore. Mr. D'EWART. That is right. That was a Government-owned plant that was in operation during the war and they simply started it going again this year. It was all built, sittting there in Butte. Mr. GUMBEL. We were under the impression that the contracts were agreeable to the four mines on the one hand, the concentrating plant operator on the other hand, and to GSA and Defense Minerals. We found out yesterday that one of the mines was not all in agreement with the set-up, so what do you do in a case like that? You have got to go back and try to get an agreement. That happens every day, sir. Mr. D'EWART. Haven't they agreed to those contracts? They had agreed with those people and those people had agreed to the terms at our last meeting. Mr. GUMBEL. But now comes in a man that doesn't agree to it. Mr. GUMBEL. That is not in dispute any more. Mr. REGAN. The miners kicked the thing over. That knocks the whole thing out. Mr. GUMBEL. That is right. |