Dr. BOYD. I haven't seen it?

Mr. ENGLE. I will show it to you.

Dr. BOYD. For contracts actually signed?

Mr. ENGLE. Yes. I am talking about the contracts you didn't sign. Dr. BOYD. I don't know any others that they have actually signed, except the aluminum contract which they have not mentioned in here. Mr. ENGLE. That is right. We are not dealing with aluminum because it is not strictly in the mining field.

Dr. BOYD. It is our responsibility on the aluminum program.

ONLY TWO MINERALS PROCUREMENT CONTRACTS EXECUTED UNDER DEFENSE PRODUCTION ACT IN SEVEN MONTHS

Mr. ENGLE. Yes; I recognize that.

Now, your testimony before the Senate committee indicated that two of these contracts which have been executed and which are reflected in this document, one for manganese and the other for molybdenum, were under negotiation prior to the time this was entered into. Dr. BOYD. The discussion with the company in regard to stockpiling operations indicated we couldn't do it that way. We had to do it under the act.

Mr. ENGLE. What I am trying to arrive at is the net productivity of this agency, authorized and directed by Congress to do something for the mining industry, and what I arrived at is two contracts executed in over 7 months.

Dr. BOYD. I think that is a fair statement.

Mr. ENGLE. Is that a fair statement?

Dr. BOYD. That is right. However, a great deal of our work has been done with tax-amortization certificates, and a great many of those have been approved. We recommended 61, and I think most of them have been approved, certified.

Mr. REGAN. You recommended how many?

Dr. BOYD. I think 61, Mr. Chairman.

Mr. REGAN. Could you at this time say how many applications are pending?

Dr. BOYD. For tax-amortization certificates?

Mr. REGAN. Yes.

Dr. BOYD. The last I heard a few days ago, there were about 25 pending.

Mr. REGAN. Twenty-five pending?

Dr. BOYD. Yes. I will check those figures and include it in the record, if I may.

Mr. ENGLE. I am asking you whether or not you think that, all things considered, two contracts in 7 months is a very outstanding accomplishment for the whole deal?

Dr. BOYD. No, I don't. I quite agree with you.

ONLY $10,000,000 SET ASIDE BY AGENCIES FOR DOMESTIC MINERALS PRODUCTION OUT OF $600,000,000 AUTHORIZED FOR RAW MATERIALS EXPANSION UNDER DEFENSE PRODUCTION ACT

Mr. ENGLE. With regard to money, the Congress of the United States authorized, I think, $2,000,000,000 for this program, $600,000,000 of which was appropriated. I want to ask you how much of that

money is left, now that you can get your hands on for this critical program in support of domestic mining?

Dr. BOYD. I understand there is none.

Mr. ENGLE. There is absolutely-I want the committee to hear this. Dr. BOYD. We have the $10,000,000 out of it.

Mr. ENGLE. You have a string on it. Let's be right about this. Of the $600,000,000 appropriated by Congress last year, the Defense Minerals Administration has not spent 1 cent; isn't that right?

Dr. BOYD. I will have to analyze that a minute in my mind to answer my question.

When I say that the $600,000,000 has been set aside, I don't know how much of that has been set aside for minerals contracts and mineral program. It hasn't been spent, necessarily, but it has been committed and, therefore, it cannot be used again.

Mr. ENGLE. That is the old earmark?

Dr. BOYD. That is right, that is the earmark. Then the $10,000,000 for exploration is one of those. The manganese contract will be one of those.

Mr. ENGLE. I know, but I asked this question: How much of that $600,000,000 initially appropriated by Congress is now available for your program?

Mr. BOYD. When it is earmarked, it is for our program. You mean when it is actually spent and distributed?

Mr. ENGLE. No, I am talking about how much is available for your program.

Dr. BOYD. Ten million dollars.

Mr. ENGLE. And that is there if somebody doesn't beat you to it? Dr. BOYD. It is there. It has been earmarked.

Mr. DONOVAN. What happened to the other $590,000,000?

Dr. BOYD. I don't know.

Mr. ENGLE. I don't know, but I will say that my information is that Agriculture got in there with a coal shovel and some of the military got some of it.

Mr. REGAN. It is listed here.

In answer to your question there is $150,000,000 of it in a revolving. fund for the purchase of natural rubber and $10,000,000 for castor oil beans, $60,000,000 for revolving fund for tin, and $5,700,000 for aluminum sheet, $1,300,000 for oxygen-free copper, and $100,000,000 for machine tool program, $14,000,000 for revolving fund to purchase tungsten in world markets, aluminum expansion program is $240,000,000, so it is all allocated except the $10,000,000 that was set aside for mining explorations.

Is that right?

Dr. BOYD. I believe that is right, Mr. Chairman. I am not sure about it. Then my statement is not correct. The $240,000,000 is on the aluminum contracts.

Mr. REGAN. Aluminum sheet.

Dr. BOYD. That is not involved in our program, but the $240,000,000 would be involved in our program.

Mr. BUDGE. Who made this division, as outlined?

Dr. BOYD. Defense Production Administration.

Mr. ENGLE. That spotlights the proposition I have been driving at for the last hour, and if I can summarize it this way I will ask you

whether or not this is a fair statement: Is it a fair statement to say that the net accomplishment, so far as the mining activity of this Nation is concerned, is two contracts negotiated and executed since this act went into effect, and only $10,000,000 out of a total of $600,000,000, which is one-sixth of 10 percent, allocated to probably the most critical program in this whole defense production affair? Is that right?

Dr. BOYD. I think that is right.

Mr. ENGLE. That is all.

Mr. REGAN. Mr. Taylor, any questions?

Mr. TAYLOR. No.

LACK OF COOPERATION BETWEEN DMA AND AEC DENIED

Mr. REGAN. Mr. D'Ewart.

Mr. D'EWART. One of the things brought out at Phoenix was the lack of coordination between the Atomic Energy Commission and the Defense Production Administration. It seemed to us that according to the testimony presented there that there was not only lack of cooperation but quite a bit of antipathy between the two agencies. Have you found that to be a fact?

Dr. BOYD. You mean between the Defense Minerals Administration and the AEC?

Mr. D'EWART. Yes.

Dr. BOYD. No; actually, I have not. The AEC came to us and asked us if we wouldn't cover the uranium program. We have the very closest cooperation with the AEC. We don't carry on the direct purchasing work that they do, necessarily, but we do a great deal of research for them in our laboratories. We are helping in the field. Our laboratories identify specimens for them and make analyses for them.

Mr. D'EWART. Have you processed any requests for funds for uranium development?

Dr. BOYD. No, sir; because they have their own funds for that purpose.

Mr. D'EWART. In other words, you simply recommend to the Atomic Energy Commission?

Dr. BOYD. Yes.

Mr. D'EWART. And they would resent your making anything available for that purpose?

Dr. BOYD. No; we are hunting uranium under the $10,000,000 pro

gram.

Mr. D'EWART. That was not the information we got out there.

Dr. BOYD. Unfortunately that had not been published at the time of the hearing, and is not generally known yet, but it will be in the program; yes, sir.

Mr. D'EWART. That is all.

Mr. REGAN. Any questions, Mrs. Bosone!

ALLOCATION OF FUNDS FOR RUBBER DISCUSSED

Mrs. BOSONE. No, but I might say I am very appreciative of the study that Mr. Engle made of the facts that were to be brought out in this hearing. The peculiar part of it is that there is such a terrific

allocation of funds for rubber. It doesn't take much of an imagination to realize that rubber is very important, but we have the rubber to wheel the product that is made of mineral resources. It seems to me peculiar that there would be that type of allocation.

Mr. D'EWART. I think if you had followed the rubber hearings you would find that they are having almost as much difficulty in getting production of synthetic plants owned by RFC as we are getting the small mines started. There have been several hearings before House and Senate committees along the same lines. The situation is really serious. That was the reason they took the spare tire off of our cars a few days ago. The president of Goodyear testified in the Senate yesterday that there was nothing but trouble ahead of them, as far as they could see at the present time.

Mrs. BosONE. You mean relative to the synthetic plants?
Mr. D'EWART. The whole situation is serious.

DISCUSSION OF TAX AMORTIZATION PROGRAM

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

Mr. SAYLOR. Yes. Dr. Boyd, so far you have completed only five contracts; is that correct?

Dr. BOYD. There have only been five contracts signed, procurement contracts. This is not total action. Some of the most important actions we have taken have been in the tax amortization field, and there have been quite a number of those. I think 61 is the figure I gave you.

Mr. ENGLE. Will the gentleman yield?

Will you supply us a list of the individual cases?

Dr. BOYD. Yes.

Mr. ENGLE. I am very interested in finding out who got those. Those, in effect, involve subsidies, do they not? They involve tax subsidies; is that right?

Dr. BOYD. I think you can define any action of this type as a subsidy. I don't think there is any argument about that. It is an enticement to get people to do things faster than under normal conditions.

Mr. SAYLOR. As I understand, the 61 cases you say you have cleared are the ones who are allowed to amortize their plants in 5 years instead of the usual number of years?

Dr. BOYD. Fifteen, twenty-five, whatever it may be; yes.

Mr. CRAWFORD. Will you yield there?

Mr. SAYLOR. Yes.

Mr. CRAWFORD. Dr. Boyd, of the 61 certificates mentioned on page 3 of your statement, have those all been finally approved?

Dr. BOYD. I think all but a few, Mr. Crawford. There are two or three yet that there is some question on that have not been approved, but I think the great bulk have been approved.

Mr. CRAWFORD. We will say 90 percent of them, 85 percent of them have been approved, so that the people involved know that if they spend this money they will have the amortization privilege? Dr. BoYD. That is correct.

Mr. SAYLOR. Now, Dr. Boyd, Mr. Howse, assistant to Defense Mobilizer Wilson, appeared before a subcommittee of the Ways and Means and said that they were very seriously concerned over the

administration of this tax amortization program, and the loan guaranties and direct loan programs have been the subject of more conferences in their offices in the past 60 days than any other subject, and that was on the 20th of March. Were you invited to sit in on those conferences?

Dr. BOYD. No, sir.

Mr. SAYLOR. Do you know about the 11-point program which has been set up by the Office of Defense Mobilization with regard to this amortization?

Dr. BOYD. No, sir; I don't. I don't recognize it by that term, 11point program, anyway.

Mr. SAYLOR. All that I have to go by is what appears in the Wall Street Journal on Tuesday, March 20, 1951, and I am interested in finding out whether or not this program, as outlined by Mr. Howse, has had the approval of you or how it will affect you and your department in the future in setting up your loans.

Dr. BOYD. Mr. Saylor, I haven't seen that program so I am sorry I can't answer to it. I have taken part in the discussions on tax amortization with Mr. Harrison and his staff on many occasions in trying to arrive at the formula we would use in our operations.

Mr. SAYLOR. This is under date of February 14. It is listed as restricted material. It doesn't seem to be too restricted, however, when the Wall Street Journal can publish it.

Mr. REGAN. Maybe it should have been restricted to the Wall Street Journal.

Mr. SAYLOR. Maybe it should. I don't know.

Dr. BOYD. You were referring to the fiscal policy of tax amortization along with facilities?

Mr. SAYLOR. And facilities expansion.

Dr. BOYD. Yes, sir; I am familiar with that document.

Mr. SAYLOR. That has 11 points on it, I understand. I want to know how that fits in with the policy that has been outlined by the various agencies to which it was referred?

Dr. BOYD. This really gives us an order of preference of the uses of the tools of the Defense Production Act, and in what general terms they are to be used. My first reading of this policy didn't seem to indicate to me that it would give us very much difficulty.

Mr. SAYLOR. In other words, you feel that this will work in with the program which you have for the expansion of domestic production?

Dr. BOYD. Yes; that is correct. These are just things to guide us in making up those contracts, approving tax amortization, and so on. I don't think there is anything in there that would seriously affect our program adversely.

Mr. SAYLOR. Mr. Howse said that some of the policies stated here were inconsistent with the practices that have been followed up to this time.

Dr. BOYD. I don't think there is any such inconsistency.

Mr. SAYLOR. You have it there in front of you. I wish you would look at it, No. 9:

Extreme care must be exercised to avoid the expansion or development of marginal producers, especially in those industries where existing capacity or production is adequate.