Shipping routed to India, the east and west coasts of Africa, and South America, suffered costly losses, and the Mediterranean was practically closed to traffic. In the winter of 1942-43, for example, substantial tonnages of bauxite from the Guianas, then critical in our airplane program, were lost due to enemy submarine action. Such quantities of strategic materials as we did successfully import from those areas which were not completely cut off, were imported at considerable cost to the war effort. Combat vessels needed elsewhere had to be assigned to protect this shipping. Ships which were needed for the transport of personnel and supplies required by the Armed Forces had to be diverted from that use and their destruction risked. Furthermore, a substantial tonnage of heavy materials had to be flown from China, Africa, India, and South America at great cost and uneconomic use of fuel, trained personnel, and airplanes. These desperate efforts did not save us from many delays and set-backs in our production program caused by the shortages of needed strategic materials. The lesson to be learned is, obviously, that we cannot afford to gamble with our security on the chance that in another national emergency we could again be so fortunate. Shall we heed such warnings and take required action or shall we gamble the future of the United States against the remote chance that United States merchant ships may be successful in running the gantlet of 250 to 1,000 or more enemy submarines and return with large quantities of strategic materials, and the equally remote chance that enemy action, by one means or another, may not succeed in shutting off overseas sources of supplies? The cold facts reveal that after a major war has started it is, with few exceptions, impossible not only to utilize the Nation's undeveloped mineral deposits effectively but it is impossible to maintain the production of operating mines. It is a fact that once war has started, the undeveloped mineral deposits and idle mines of the United States may just as well be in the hands of the enemy for the little good they could contribute to the winning of the war and the economy of our Nation. In the light of present world conditions and the evidence before us, it becomes imperative that the Congress immediately initiate an all-out program that will provide the people of the United States with the strategic and critical raw materials from or with which all military, industrial, and essential civilian supplies, materials, and equipment required to win a future war and maintain our basic economy must be made. A partial or half-hearted effort will not save our Nation. ONLY ONE DOMESTIC PRODUCTION CONTRACT MADE UNDER DEFENSE PRODUCTION ACT BETWEEN APRIL 3 AND JUNE 6, 1951 Mr. GUMBEL. Gentlemen, for the record I wanted to say a few words about this program. I think anyone that has been attending these hearings would get the impression that the Government has done nothing to increase the production of critical materials and metals. Actually, a great deal has been done in the period since the Defense Production Act was passed. A notable example of this is the aluminum expansion program. Mr. ENGLE. We are not interested in aluminum smelting. Mr. GUMBEL. That is part of the work we have done. Mr. ENGLE. We are concerned with the mining of strategic minerals and metals from domestic deposits. Mr. GUMBEL. That is a highly critical metal, one of the most critical, and we have provided for expansion of production by 320,00 tons per annum. The plants are now under construction and the first 2 of the 18 units are expected to come into production this month. The magnitude of this program can be understood when you consider that the figure of 320,000 tons represents twice the amount of aluminum that was produced in 1939. Mr. ENGLE. We are completely off the subject, Mr. Gumbel. We are not concerned about aluminum at this time. I was over before the House Banking and Currency Committee on Friday and I submitted a second list of contracts for minerals and metals made with Defense Production Act funds, which the GSA submitted at the request of this subcommittee. The first list, which we obtained from GSA on April 4, disclosed that only four contracts had been made. as of April 3, one of which had been canceled, and two of which were under negotiation prior to the time DMA got into the program and were signed as stockpile contracts, which left a net of one contract, which is a drip, when we need a Niagara Falls of this stuff. Since then-April 3—you have made 12 contracts; 11 of them are contracts for tungsten from foreign sources. One source is Korea, and how in God's name you are going to get tungsten out of Korea I don't know, but all 11 of them were for tungsten from foreign countries, spreading all the way from Spain to Korea. There was one contract to a company in Tennessee, which involved zinc, and amounted to 10,000 tons. In other words, when you actually look at what has been done, nothing has been done of substantial amount. (SUBCOMMITTEE NOTE.-The first list referred to appears opposite p. 52. The second list referred to, together with a third list of additional contracts made by GSA through June 30, 1951, is presented below.) Additional contracts as a result of certification by the Defense Production Administrator as of June 6, 1951 Contractor Date of contract Duration of contract Material Unit Origin of material Quantity Unit price, date of contract Market price, date of contract Point of delivery GS-OOP-D-526 Fred H. Lenway & Co., Inc.. June 4, 1951 Second calendar Tungsten. quarter, 1951. Short ton unit. Koreav. 12,300 1 $65.00 1 $65.00 Ex Contract number SURCOMMITTEE NOTE.-It is noted that only 1 of the above contracts is for domestic production. It is reported that only a small portion of the quantity involved in this contract will be from newly mined ore, The 11 contracts for foreign material were negotiated by the GSA, without reference to the DMA, under the authority granted by the DPA, which established a revolving fund of $14,000,000, subsequently increased to $38,950,000, to purchase tungsten in world markets and resell to private industry and to stockpile. Most of the contracts are said to represent spot purchases, The quantity involved in the Huxley Development Corp. contract subsequently was reduced to 715 short-ton units at the request of the company, Contract number Additional contracts as a result of certification by the Defense Production Administrator as of June 30, 1951 Contractor Date of contract Duration of Material Unit Origin of Quantity Unit price Point of delivery 1 The market price as of June 30, 1951, was $65 per short ton unit, which included duty equal to $7.931 per short ton unit. 2 Short ton. NOTES RE PREVIOUSLY REPORTED CONTRACTS.-The following contracts which were not signed when previously reported have been signed: GS-OOP-D-659 William Mr. BARING. Will the gentleman yield? Mr. ENGLE. Yes. Mr. BARING. I have a speech here which was prepared by NPA and brought to my office for me to give over the air. As I glanced over it I saw that it had the following to say about tungsten: "Now it is being produced in veins and placer deposits in Colorado, California, and the historic Black Hills of South Dakota." I asked the man who brought the speech to me, "What about Nevada?", and he told me that there was no tungsten in Nevada. Actually, Nevada is one of the biggest tungsten producing States in the country. I think we have proved conclusively before this committee that the administration of the Defense Minerals is "NG”—capital “NG“—and I think we ought to ask Secretary Chapman for the dismissal of the Administrator. The defense minerals program cannot work the way it is going. Mr. ENGLE. You tell me who the Administrator is. In going up and down this totem pole, I have never been able to find who Chief Thunderbird is, perched on the top of it, who is supposed to be able to run this show. Mr. SAYLOR. We had brought up before us today Mr. Ralston who is chief metallurgist. Mr. REGAN (presiding). I wanted to finish manganese ore before we got to that. MANGANESE CONTRACTS FOR BUTTE AND PHILIPSBURG (MONTANA) OPERATORS Mr. D'Ewart, do you want to ask any further questions on the Butte project before we get into this slag? Mr. D'EWART. Mr. Chairman, I would like to read just a paragraph from the testimony of last Thursday, to introduce my subject, and it wouldn't take us very long, and while I am reading it, I would like to have Mr. Sanford R. Knapp, of Butte, come forward. Would you come forward and take a chair, Mr. Knapp? This is Mr. Mittendorf's testimony. 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 individuals thinking of the very component parts that go into this overall 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 beneficiation 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 last evening listening to the protests that have arisen now when we are in the final stage of consummation of the contracts. We have had to call at least I want to call-a very temporary halt-in my mind, and 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 knowingly to go into a deal that I don't think is a good deal for both the Government and the producer. |