I say, if we can start our industry by putting men back to work n producing something we can afford to carry, and we can get 250 r 300 thousand men to work in industry tomorrow, and they can begin buying goods, and the factory workers will go to work, and they in turn buy goods, putting others back to work, in that manner we can absorb the farm surplus, buy more shoes, clothes, furniture, and all things that people need and want.

Gentlemen, that is how we can bring back prosperity in this country, and it is a safe thing to do. As to the theory about this commodity index, I think that is very sound, and if we can get back on the 1926 standard and it is going to go all up and down the line, it would be ideal. I am in sympathy with it. I am also thoroughly in accord with setting up a monetary authority that will control our international trade, and we will keep a set of books on our international transactions, not only goods but money as well.

Mr. GOLDSBOROUGH. As I understand it, you favor the insertion of the provisions of the bill introduced by Mr. Scrugham into this monetary measure?

Mr. Gow. I do.

Mr. GOLDSBOROUGH. You think it would appreciate the metallic base on which the credit structure is set up, and that it would probably induce other gold-standard countries to adopt the double standard?

Mr. Gow. Perhaps so, but I think that is more or less immaterial as long as we are a creditor nation.

Mr. GOLDSBOROUGH. And you think it will raise world prices and our prices?

Mr. Gow. I think so; yes.

Mr. GOLDSBOROUGH. Are there any questions to be asked, Mr. Scrugham?

Mr. SCRUGHAM. That is the main fact I wish to present, but time is growing a little short, and if you would permit Mr. Smith to make a brief statement along the same general lines, in case there are no other questions to be asked of Mr. Gow, I would be glad for you to hear him.

Mr. GOLDSBOROUGH. Now, Mr. Gow, the committee appreciates very much the statement you have made. We are sure you have been of great help to the committee, and we hope to have you with us again.

Mr. Gow. I appreciate your courtesy in allowing me to appear before you.

Mr. GOLDSBOROUGH. Now, the committee will hear Mr. Smith. Mr. Smith, will you give your full name to the reporter, together with your connection?

STATEMENT OF H. A. SMITH, MINING ENGINEER, WARREN, ARIZ.

Mr. SMITH. I am a mining engineer, living in Warren, Ariz. Mr. GOLDSBOROUGH. We would be glad to have you proceed in your own way, and we are not going to interrupt you but will let you make your statement without interruption.

Mr. SMITH. My position is a rather limited one, and you may say a local one. I am interested in Congressman Scrugham's bill, H.R.

7832, which has to do with silver, and I believe the passage of this bill would result in the increase of the price for silver.

I have spent all of my industrial life in the copper business, having been identified with copper mines for the past 36 years.

Silver is one of the main byproducts in the mining of copper, and I am interested in securing a commodity price in line for copper and for its two important byproducts, namely, gold and silver; and I am appearing in favor of Congressman Scrugham's bill having to do with one of these byproducts, namely, silver, hoping it will receive an increment in price. It has not received the commodity price even during the 12-year pre-war period, saying nothing about having failed to receive the commodity price during the post-war period.

That is true of copper, and likewise true of gold, and I am hoping this committee can find a way to increase the price of the two important byproducts, gold and silver, which will increase the profit or reduce the cost of copper, and that is the reason I am appearing before you.

I am more familiar with copper details, because I have spent my whole life in the copper business, than I am specifically in the silver fields, although I have contacted with silver for the past 40 years. ever since I started studying mining engineering.

I agree that something should be done. For instance, in Arizona 80 percent of the silver mined there for the past 30 years has been in the form of byproduct of copper mining, and you may say for the whole United States 80 percent of all of the silver mined during the same period is a byproduct, not from copper alone, but from lead and zinc also.

Half of the gold mined in Arizona in the last 30 years is a byproduct of copper, which means unless you secure a commodity price for gold and silver, as well as copper, as far as the western miner is concerned, he is not being placed on a par with the rest of the labor products of our country.

He is entitled to receive commodity price for his product like anybody else, and I am hoping this committee will find a way whereby they can accord a commodity ratio to the western miner for his labor, as to gold and silver particularly.

I understand you can do something to stabilize or even decrease the commodity ratio price of those two metals, and I am hoping you will increase them and bring them up on a par with all other commodities. The copper phase will probably be cured, or cared for. through the medium of operations, embargoes, and so forth.

I am appearing in Washington in connection with the copper code hearings, and this thing is pust incidental with me, but having the opportunity, I took advantage of it, in appearing before your committee in discussion of the silver item.

That is about all I can say in a general way, and I will not take any more of your time.

Mr. SCRUGHAM. You have read the socalled "Goldsborough bill ”, H.R. 7157?

Mr. SMITH. I have.

Mr. SCRUGHAM. Are you in favor of a central monetary authority to control the currency of the United States?

Mr. SMITH. I am.

Mr. SCRUGHAM. You think the idea, as set forth in Mr. Goldsborough's bill have unusual merit and should be adopted, and would be of benefit, not only to the mining industry, but to the whole country?

Mr. SMITH. I do.

Mr. GOLDSBOROUGH. Mr. Smith, I am interested in what you said about the copper industry. As I understand your remarks and Mr. Gow's remarks, you feel, as citizens, entirely apart from any personal interest you may have, that an increased production of copper is essential to the welfare of the country, particularly in time of stress, war, and things of that kind?

Do I properly interpret your testimony?

Mr. SMITH. It is essential during time of war more particularly. You cannot, of course, have that complete function from the first day, from ore to ingots, during times of distress unless it is a fully going unit in times of peace, because it takes many years to develop a copper mine. I never have been able to bring one in short of 3 years, and sometimes 5, and I am working on one that I have worked on over 9 years.

Mr. GOLDSBOROUGH. In other words, you think if we were to delay taking any step to help copper until the emergency arrived, it would be too late for the purposes of the emergency?

Mr. SMITH. Oh, yes; it would be absolutely impossible.

Mr. GOLDSBOROUGH. Just explain that a little, because it is very interesting.

Mr. SMITH. For instance, I have been going down in copper mines since I was 18 years old, since 1895, and I have seen 94 percent of the copper-mine industry of the country. I went down in the old Michigan mines in 1895, starting in the Lake Superior peninsula.

Of course it is impossible to secure copper during times of stress unless you have a fully going unit during times of peace, and you cannot have the unit in an efficient stage in this country or any other country unless you secure a commodity price for the product. When we mine copper we do not mine copper alone; it is impossible, because the byproducts, gold and silver, coming with it, are very important.

În Butte the ratio is different, and in other districts it is different from the Butte ratio, and down in Bisbee, Ariz., where I have lived for years, for a period of 40 years, 7 percent of our metallic product is silver and gold as a byproduct.

As I said. 80 percent of silver and 50 percent of gold are byproducts. They pay for our transportation to the Eastern tidewater section, and it is for that reason I ask something be done, because we have not received the commodity price for copper.

If you are interested in that, I have charts I have prepared that are going in the code hearings, but they are directly in point here. Mr. GOLDSBOROUGH. Will you state in a general way what they

show?

Mr. SMITH. In point of what has been stated, we have only received about 14 cents a pound for copper during the post-war period, and up to 14.9 cents in the pre-war period, and the indexes for silver are about on a parity with the 1913 60 cents pre-war.

Mr. GOLDSBOROUGH. Your production in the post-war period was heavier than in the pre-war?

Mr. SMITH. Yes; it was. What I am pleading for is to secure a commodity price for the two byproduct metals, gold and silver, by this committee. I shall appear before the code authorities trying to secure the commodity price for the third, namely, copper.

I am selfish in stating that is my business, I am not a lead miner or a gold miner, I am a copper miner. Lead has received during the post-war period a near commodity price, and zinc slab also, but copper never.

As you know, half of our agriculture exports consist of cotton and tobacco, and they have received vastly more than we have. Petroleum, which is not gold, and is not wheat, has received more than we have. But look at copper, it has not received anything.

Now, you can correct gold and silver, but as far as I am concerned, the copper affects me, and I am going to try and have that corrected before the code.

There has been a shrinkage in the past 4 years from 1929 and we are only receiving 7 percent of the industrial income, so there has been a shrinkage of 93 percent of value. That is not a 60 percent reduction or a 40 percent reduction, so I am very glad to have an opportunity to appear here, because unless we secure a commodity price, we are not cared for proportionately like other American citizens, and that is the plea I am trying to bring forth, and I hope you gentlemen will give consideration to Congressman Scrugham's bill, because I believe it will provide a way for raising the price of silver.

You have already raised the price of gold, and you can see right on the face of things I received no benefit as a copper miner, and can receive none unless I mine copper. I cannot mine copper for the reason I am receiving no commodity price for copper.

We are receiving right now 72 cents whereas, based on lead and zinc, we should be receiving 15 cents a pound for copper. In 1933 the index was 48, or a 50 percent less average than the pre-war price.

I appreciate this opportunity of appearing before you, and of course I realize this is not a discussion of the copper equities.

Mr. GOLDSBOROUGH. It has helped the cause. It is a collateral phase, and your statement has been of assistance to us, as well as Mr. Gow's statement, and we are grateful to you gentlemen for them.

Mr. SMITH. We can help your cause further by stating we produced over $310,000,000 worth of copper values during 1929. Half of that went out directly in the form of wages and expenditures locally, and bear in mind that the seat of the copper production in this country is only about nine hundred miles west of the center of farming values, and only approximately twelve hundred miles west of the center of population, and only about fifteen hundred miles west of the center of manufacturing in this country. Consequently. it is practical for the industries of the so-called Mississippi Valley farming areas to take cognizance of a consuming power such as we have in the copper-production area.

It is a certainty you are not going to get them to buy your agricultural surpluses in the copper-producing areas of Rhodesia, Chile, Peru, Mexico or Canada.

The best market of the farmers or manufacturers of this country. is right there in this area, and you know there are no nations that will consume up to over $300,000,000, roughly, of their products in a year.

With all due courtesy to Secretary of Agriculture Wallace, I was born and raised on an Iowa farm nearly 60 years ago, and I am quite familiar with the farming products, and I believe that the farmer is going to be aided, provided his industrial brother receives benefit, and his mining brother receives benefit, and he is not going to be aided otherwise. We could help one another probably vastly better than we could in seeking aid in foreign countries.

You are not going to benefit this country unless you benefit the component parts, and I am one of them, producing copper, which is one of the most essential products of the country, not only in time of peace, but in time of war, and if you will give me a commodity price for silver and gold, it will be of great benefit to me.

Mr. GOLDSBOROUGH. Now, gentlemen, we thank you very much for appearing here, and I think your statements will be of benefit

to us.

The committee will go into executive session for a few minutes.