Mr. ENGLE. When my costs went up I came in and asked for a readjustment. Dr. BOYD. That is right. Mr. ENGLE. And the copper was sold on the market at 12 cents and the Government paid the difference. Dr. BOYD. That is correct. Mr. ENGLE. What you are doing in the tungsten program is to stick a solid floor in there and that is going to be the floor for everybody, whether it is an unconscionable profit for one man and a loss for another is immaterial, isn't that right? Dr. BOYD. That is the reason you can do it in tungsten. Because the mines involved that have been making money in tungsten will be under this program encouraged to go into lower-grade ores and get more tungsten out. The tungsten companies don't make much money anyway. Mr. ENGLE. You had less people operating the premium-price plan than you have in your lay-out today, isn't that right? Dr. BOYD. No, sir. Mr. ENGLE. Just check up and see, adding DMA and everybody else, you have more people down there today than operated the entire premium-price program. Dr. BOYD. Mr. Engle, I would like to raise this issue. They have at the present time planned for approximately 508 people to operate all the DMA operations which are a great deal more than the premiumprice plan. We are doing the fundamental work of the Materials Division of the War Production Board, the work that the RFC and Metals Reserve Co. did, some of the work that the Foreign Economic Administration did plus the premium-price plan and they had well over 1,000 people, at least 900 at the very minimum working on those same programs and we don't have 508 people yet. We plan to do this with about half the number of people engaged in the same work in the last war. I want to make that clear, Mr. ENGLE. I intend to check the figures. Dr. BOYD. I can give them to you for the record if you want them. Mr. ENGLE. You had less for the premium-price plan than you have for this set-up. What I am saying is that as a general principle of operation, the premium-price plan worked and this has not worked. You have over a period of 7 months under the Defense Production Act of 1950 actually produced two contracts. That is your net, isn't it? Dr. BOYD. No, sir. Mr. ENGLE. That is your net? Dr. BOYD. By no means. Mr. ENGLE. That is the net contract you have negotiated and put in operation? Dr. BOYD. The contract is only a small part of this program. Mr. ENGLE. Yes; and if you look at all of the tax amortization certificates issued you will find that most of them are for aluminum and steel. We asked you to put up those lists and I want to see them. But the plain fact is that there is no way in my opinion, Dr. Boyd, that you can avoid the conclusion that this program is a complete and hopeless failure. After 7 months the mountain has labored and brought forth a mouse. Dr. BOYD. It took 2 years to produce the premium-price plan. Mr. ENGLE. Two months? Dr. BOYD. Two years to produce the premium-price plan. Mr. DONOVAN. Not yet. I will wait. Mr. REGAN. If I might ask Dr. Boyd about this premium price versus floor. I understood that tungsten was selling at $20 to $75. Dr. BOYD. That was the general range of price at the time the program was produced. Mr. REGAN. Of recent date? Dr. BOYD. About January. Mr. REGAN. $20 to $75. With the people losing a lot of money at $20? Dr. BOYD. Those were on old contracts produced from high-grade ore, Mr. Chairman. Mr. REGAN. Were they losing money at $20? Dr. BOYD. Some of them were. They actually had contracted for the sale of it at that price and the tungsten that was coming in was costing more. Mr. REGAN. You estimate that they were losing? Dr. BOYD. Some of them were. Mr. REGAN. But it wasn't a great loss? Dr. BOYD. I wouldn't like to answer that because I am not familiar with the details. Mr. REGAN. With the premium price, then, of $63, we will assume that they were just breaking even at $20. That would provide them a tremendous profit. Dr. BOYD. If this didn't encourage them to go and mine their lowergrade ores in the mine. That is what we want them to do. They would be mining ore containing one, or a little higher, unit of tungsten. With this kind of price-and we are dealing with the companies individually, asking them and helping them to mine four-tenths of 1 unit-so that will encourage them to mine the lower-grade ore. Mr. REGAN. Under the premium-price plan, those mines that were making money at $20 shouldn't be given a floor of $63, but the fellow who was mining his low-grade ores at a cost of $61, then would be, under your premium-price support, entitled to a profit on the $61 cost, but the fellow that was only getting ore at $20, rich ore, would be getting a tremendous profit on that. Dr. BoYD. You see what we are trying to design is a program to encourage the maximum production of these things. Actually the premium-price plan worked the other way. It encouraged inefficiency by the very nature of the program. That is one of the objections that the people have brought to us from the field, the mining industry. They have admitted to us themselves, that they mined the high-grade ores and left the low-grade ores behind until after the situation was over. We have had several cases presented to us. That is inefficiency. We are encouraging the maximum production where a man has a chance to make his money on efficiency and get the maximum production. DISCUSSION OF APPLICATIONS PROCESSED TO DATE Mr. REGAN. I want to ask another question, not exactly related to this premium-price plant. We have had a lot of discussion about the number of applications you had, the number that have been processed, and the number that are actually in effect. There are somewhere from 600 to 900 applications that have been presented to the Administration; is that right? Dr. BOYD. Nine hundred action papers, Mr. Chairman. Many of those either have been answered or are in the process of field investigations or have been passed on. Mr. REGAN. Six hundred have been passed on? Dr. BOYD. We have only had 208 tax-amortization cases presented to us, of which we passed 61. Mr. REGAN. But only two are passed and in final operation? Dr. BOYD. That is a different category. There are several actions we can take. Mr. REGAN. We seem to have confusion as to the number in process and in effect. Mr. ENGLE. GSA gave us their certificates and it shows that only one contract, and it relates to both tin and tungsten, has actually been put into operation. The other two contracts are for molybdenum and mangenese and they were negotiated under the Stockpiling Act referred to here previously, Public 520, and they are both operating, according to this memorandum, under the preceding law. I am talking about what has been done under this law. There is only one. Two were negotiated but the second one was canceled by the operator. There is a memo from the GSA which says here that the contractor requested that the contract be canceled because the export license was denied by the Spanish Government, so that leaves only one contract. What Dr. Boyd is saying is that tax amortizations have been given to certain operations. We asked for a list of those, but I understand that most of them are in the field of aluminum and steel and notDr. BOYD. We have nothing to do with steel. Mr. ENGLE. They are not in the field of mining. Dr. BOYD. They have nothing to do with steel. They are on aluminum. Mr. ENGLE. Do you have a list with you? Dr. BOYD. No; it is being compiled now. Mr. ENGLE. Isn't it a fact that most of them are on aluminum and other things rather than the base-metal mining industry? Dr. BOYD. They are all on the metal: aluminlm is a metal, probably the most urgent of all. Mr. ENGLE. I am not talking about it. Dr. BOYD. I am sorry; I am. Mr. ENGLE. What we have to do is to determine how effective this program has been in the production of strategic minerals and metals from domestic mines with which this subcommittee is concerned. Dr. BOYD. As I pointed out in my opening statement, Mr. Engle, you can't measure at this stage of the game the accomplishments of the administration by what has actually been produced. Mr. ENGLE. I will tell you this, Dr. Boyd, that if we are in an all-out war tomorrow with Russia, the accomplishments of this Administration will certainly be measured in terms of actual material that is being produced. Dr. BOYD. I quite agree with you. Mr. ENGLE. And not contracts being kicked around down in these agencies. What we want is action. We want to see this stuff coming in. As far as I am concerned, I am not satisfied with a lot of talk about the contracts that are whirling around down there in numerous agencies of the Government. What we want to know is how much stuff you are putting in the stockpile or putting in the production line and the number of pounds or tons of materials and metals and unless it is out there, the program isn't working. That is all there is to it. PREMIUM PRICE PLAN BACKED BY CONGRESSMEN FROM MINING AREAS Mr. MURDOCK. Mr. Chairman, may I make a little explanatory comment, so far as my cracked voice can permit? I beg the indulgence of the committee in that respect. First, I want to preface it by a little further explanation of what I said yesterday. Of course, I approve of the generous contract made for the development of the big new mine of copper in Arizona. I know something about that and of the millions of preliminary investment. I have on the wall of my office a picture of the open-pit mining camp of the Phelps-Dodge Corp. near Morenci, and I know, of course, that such mines are made and not merely found. I know, of course, that millions and tens of millions of dollars are invested in them before a bit of copper is produced and such encouragement as the contract mentioned must be given to big corporations to do this, else they will not be in a position to do it when needed. Therefore, the point I made yesterday was this, that I approve of the helping hand in such a contract, but I disapprove of failing to give the same consideration to the many small-mine operators who, after all, produce the big mines eventually, but that isn't what I started out to say, Mr. Chairman. What I am about to say may not put me in good grace of big copper producers, but I want to make this contrast. I am not a mining man. There are many on this committee who know as little about it as I do, perhaps, and I think this contrast is worth considering the differing programs in two recent wars. The State of Arizona produces more copper than any other State in the Union. It has produced the copper for two world wars. I would like to contrast the situation with reference to copper in the First World War with that in the Second World War. There was no curb on prices during the First World War, and my recollection is that during the First World War copper sold, for war purposes, of course, as high as 35 cents or 38 cents per pound. That must have been highly profitable to the copper producers. That was not the case in the Second World War. We had the premium-price plan. Copper was pegged at 12 cents per pound. Much copper had been produced before the Second World War for 12 cents a pound with some profit to the producer, I assume, but we needed more copper than was being produced. It was pegged at 12 cents a pound and the high-cost producers could not produce on that basis. Therefore, a premium was given, but we did not say to all producers, "Now, we are going to pay you 17 cents a pound for all the copper you produce." No; if we had done that, the cost of the Second World War would have been much greater than it actually was, Therefore, it seemed good business and good sense for the national defense to peg the price of copper about at its peacetime price and then, in order to bring out additional supplies, that we furnish additional incentive. Mr. ENGLE. That is in effect the premium-price plan, isn't it, Mr. Murdock? Mr. MURDOCK. That is exactly it in operation during World War II. I wanted to make that statement and make the comparison, although the comparison may be an odious one to some of my constituents. It keeps the price within reason and yet brings out more production. Mr. ENGLE. It is a strange thing, Dr. Boyd, that the men who represent mining States in this Congress have been for the premiumprice program. Mr. Baring represents one of the greatest mining States in the West, our distinguished chairman, Mr. John Murdock, is from Arizona, Senator Murray is from Montana, and I have the old mother lode and the greatest mine area in the State of California, and Mr. D'Ewart comes from Montana-I beg your pardon for not mentioning you-and we have Mr. Bennett, from Michigan, sitting over here at the other end of the table and Dewey Short, from Missouri. As far as I am aware, there wasn't one single legislator representing a mining area in this country who are opposed to the premium-price plan and they went back to their people and time and time again they were reelected. Now, if the mining people of this Nation were against the premium-price program, somebody was sure getting fooled. Mr. BARING. I have 40 or 50 telegrams in my office, asking us to come to Utah and Idaho for scheduled hearings there, that they are behind the premium-price plan and want to go on record in their cities. Mrs. BOSONE. Will the gentleman from California yield? Mr. ENGLE. I want to add further that Mr. Granger of Utah, who represented the mining areas, the areas outside of Salt Lake City in that great mining State, was one of the strongest advocates we had on the floor of the House and before this committee. At one time he was coauthor of some of this legislation. Mrs. BOSONE. Mr. Aspinall is from Colorado and they have mines in Colorado. Mr. ENGLE. Yes, and we have the secretary of the mining association, Mr. Bob Palmer-I see him in the audience now-and his association has and always did vigorously support the legislation which we have before this Congress. Mrs. BOSONE. Will the gentleman further yield? Mr. ENGLE. Yes. DMA BELIEVES CURRENT MINERALS PROGRAM MORE CAREFULLY PLANNED THAN THAT OF WORLD WAR II Mrs. BOSONE. Dr. Boyd, if you went into the premium program before and you are not this time, are you being more careful this time than you were in the Second World War? Are you being more careful in how you administer the Defense Production Act? The basis of my question is this: I am just wondering how much influence some of the investigating programs of the Congress, particu |