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During depressions as well as in normal times it would help greatly in bringing venture capital back into the mineral industry by maintaining a healthy, stable mineral industry. It would also help minimize labor troubles and would preserve a skilled mine-labor force. A guaranteed minimum price in the mineral industry would act as an industrial balance wheel during periods of depression, not like sand in the bearing box as have the uncontrolled price drops of the past. guaranteed price for domestic ores should remove the pressures of both labor and management for high tariffs. The guaranteed price to foreign nations would give them dollars in exchange for their raw materials and thus would tend to hold up foreign economies much as the Marshall plan has done in the past, but with this great difference we would be accumulating tangible assets of immeasurable value to us in the future. In building up this reserve we would diminish rather than increase international tensions. The reserve should ultimately give us tremendous economic power, and its value in terms of security during a hot war cannot be overestimated. Finally this would be a price-support plan that could pay for itself in the course of time by virtue of the increase in value of the metal through the years.

My quoting from Dr. Lovering is not to infer that the doctor has endorsed in toto the present plan, but it is the principle involved with which the doctor and the industry agree. It might be added that few men in the United States enjoy the universal confidence of leaders in the mining industry as does Dr. T. S. Lovering.

Other groups of small-business men have endorsed the program here proposed. Most recently the Mountain States Association, composed of the managers of the chambers of commerce and industrial organizations of the eight Rocky Mountain States.

In substance the majority party at its national convention likewise adopted a platform which we believe is in line with the program which we here propose. The committee's attention is directed to that section of the platform which was accepted in toto by President Eisenhower, and which reads as follows, and I quote from the Republican platform:

We vigorously advocate a full and orderly program for the development and conservation of our natural resources.

We deplore the policies of the present administration which allow special premiums to foreign producers of minerals available in the United States. We favor reasonable depletion allowances, defense-procurement policies, syntheticfuels research, and public-land policies, including good-faith administration of our mining laws, which will encourage exploration and development of our mineral resources consistent with our growing industrial and defense needs. We favor stockpiling of strategic and critical raw materials and special premium incentives for their domestic exploration and development.

Here perhaps a brief description of the domestic mining industry and its recent experiences should be given. During World War II the industry went all out to produce the metal vital for the defense of the Nation. More than 6,000 miners were returned to the mines during the emergency because the production of metals became the No. 1 bottleneck. Most of these miners were in the Armed Forces, and they were released from the Armed Forces to metal mines of this country because of the need for lead and zinc. The Government closed down the gold mines in an effort to remedy the situation, and even attempted to facilitate such projects as the deep drainage tunnel at Leadville, which had been advocated by the mining industry many years prior to the then national emergency.

The point here is that we are trying to show that men were taken from other industries in time of emergency to try to increase the production of lead and zinc. Ships bringing supplies to our borders were being sunk. In fact, the testimony before the Senate Interior

and Insular Affairs Committee indicated that 53 out of 61 ships were sunk during a very trying period in our history by German submarines. The American people were deprived of tetraethyl gasoline, automobile tires (which contain zinc), batteries made of lead, and hundreds of items needed in maintaining the present-day living standards of the average American. The farmers were denied paint for their buildings. Galvanized sheeting and even telephones were not available because zinc could not be obtained for diecasting material. Brass, which is a composition of zinc and copper, was denied to our military forces to such an extent that cases ordinarily made from brass for our shells were being manufactured out of steel and aluminum and other highly essential materials. Have we forgotten how the mining industry of the United States rose to the occasion and saved the American people from destruction which undoubtedly would have occurred had we been without a domestic lead and zinc mining industry?

The idea that a mine can be reopened overnight is ridiculous. There are those who have been proposing that we store our metals in the ground-sort of an underground stockpile, so to speak-but this is impractical, for, in the first place, it is well known that in a great many areas underground movements take place which destroy tunnels, shafts, and working places, and are very expensive to maintain. Furthermore, flooding and caving take place and this also involves tremendous expense. An active, healthy-going mining industry is the best conservation of American mineral resources. This provides for the recovery and the most efficient recovery of the natural resources of our country. It prevents losses of these reserves which otherwise would occur, and it makes them available for quick usage when they are stockpiled on the surface, usage which can be taken advantage of if America should be attacked overnight. This is a sensible and sane appraisal and is not based on any theory but on practical experience.

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Is it wise to place the safety and security of our Nation on the sibility of acquiring minerals from abroad? The first hazard involved is the hazard of transportation. Can we honestly say that we can maintain our sealanes when we read in the report of the Swedish Government that Russia today has a greater submarine fleet and more efficient submarines than Germany had in World War II? The other hazard is that of the position of foreign governments and the peoples of foreign countries. Recently the Bolivian Government was overthrown and the tin mines were seized. The word "nationalized" was used, but facts remain that the former owners, some of whom were Americans, were chased out without just compensation and the mines were expropriated.

What has been our experience when we have been short of metals? What have been the prices we have paid? Assuming that no national emergency takes place, what price would we pay for lead and zinc if we did not produce them within the United States? What has been our experience? Have we not paid higher prices for those products which we do not produce than those products which we do produce in the United States? The mere fact that the United States consumes the major percentage of the minerals of the world, largely for the purpose of manufacturing items which in some instances are sold abroad, does not justify us, in our opinion, of placing our economic

dependence and security and the safety of our country upon foreign sources and supplies. Therefore, it naturally follows that on this basis and this basis alone we are justified in adopting the program which we here propose.

The third reason for the preservation of our domestic mining industry is purely that of self-interest. It involves the economy of our people here in the West and in the various mining regions of the Nation. Mining is a basic industry. The operators of mines produce new wealth; they maintain the economies of many sections of the Nation. The railroads, the trucking lines, the power companies, and other utilities depend largely upon the mining industry for revenue. The retail merchants, the farmers, the ranchers, and all those who supply the miners, including the manufacturers, are affected when mines close down. Professional men, schoolteachers, and others all have a genuine interest in the welfare of the mining industry. It, therefore, seems proper that those who represent the mining industry should present a case to the Small Business Committee purely on the basis of self-interest.

Just for a moment, look at the world picture. Suppose the United States places a total dependence upon foreign sources for raw materials. Disregarding the terrific prices which undoubtedly would have to be paid in the long pull for these materials, let's look at the effect of this proposal upon the American economy taking into consideration the national economy and not the self-interest of any particular industry. What about our railroads? Do they want to give up the business they now have, not only of transporting our products to the markets, but bringing in manufactured goods from the eastern part of the country to our mines? Is it not true that if we could produce our metals here in the United States at the same cost as they are produced abroad, we could not transport them across the country for the same costs which are involved in transporting the same materials from foreign seaports to our same domestic markets?

In appearing before one of your committees it was brought out that you could transport raw materials from Newfoundland, by water, on the east coast, clear around the country, through the Panama Canal, and up to San Francisco for less than we could transport metals here from Denver to the eastern markets by rail. So we think that is unfair competition.

In other words, it is quite apparent that if we were to break the economy of the raw-material-producing sections of this Nation by lowering our wage scales and other costs, we still could not transport our products across the country to metal markets for the same price which the foreign producer can do by shipping them to our markets at a very low cost in subsidized ships. Therefore, it naturally follows that we would not only deprive our railroads and our other business enterprises of present income but we would also deprive our local, State, and Federal governments of tax income which we understand is vital at this time to maintain our national defense program and meet our outstanding obligations.

Is this sound reasoning? Can we afford the destruction of the domestic mining industry? Here let it be said that some major interests in the United States are vitally concerned with the maintenance of world trade. Presumably this includes the automobile industry which, incidentally, enjoys an adjustable ad valorem import duty. We un

derstand that it is 10 percent. The question is logically asked, Why should the United States seek raw materials from abroad which are produced at below the cost of production in the United States? Is it the desire of our international theorists to maintain foreign governments, or is it a desire on the part of our State Department to aid and assist the worker abroad who presently works in mines at wage scales far below those which exist in the United States? Would it not be wise policy to insist that the foreign worker be paid the same wage scale as that enjoyed in the United States, and that we discontinue subsidizing our shipping, and that we discontinue financing foreign mines with American taxpayers' money? Would it not be smart business to insist that the foreign miner receive a high enough wage scale which will enable him to buy our automobiles, to buy our manufactured products, and as a consequence thereof to be in a position to finance his government to the extent that it could build highways such as we have in the United States and homes which can use products produced in the United States? Why buy these materials abroad at less than the cost of production in the United States? Let's be realistic.

Now quoting from only one economist, Jacob Viner, an economist of considerable ability, in his recent book, International Trade and Economic Development, points out in substance that a country is not necessarily backward because it is engaged in the production of raw materials. Backward nations are backward not because they have less raw materials than we have in the United States, but rather because they have governmental policies which are quite different from those which have been insisted upon by the people of these United States. The folly of the argument that the per capita income of a nation increases through industrialization is punctured by the pronouncement that the per capita income of dentists and hairdressers in the United States is above the average per capita income of our citizens and that, therefore, if we are to raise the standards of the people in the United States, the logic is that we should all become hairdressers and dentists. It is, therefore, to be hoped that in the findings of this committee that a realistic appraisal of our national economy will be set out, and that we will not adopt theories which seem to be prevailing in international conferences today, namely, that the way to advance a country is to insist upon its industrialization.

In concluding this presentation to the Select Committee on Small Business for and on behalf of the National Committee on Lead and Zinc, as well as the Colorado Mining Association, permit me to point out a further fallacy in the argument of those who oppose our position. It was my privilege to attend the International Monetary Conference of the International Fund at Mexico City last year. At that conference it was clear that the economists for the so-called backward nations, or nations in which raw materials are produced, had made a study of what we called the Paley report issued at great expense by the Government of the United States. This report was acccepted verbatim because it was issued on the Presidential level which is, of course, on the highest level, governmentwise, in the United States.

The conclusion of these spokesmen for the so-called backward countries was that a Nation, in industrializing its economy, requires more income than it receives under present international world conditions for its raw materials. In other words, a nation solely producing raw

materials and seeking in exchange manufactured goods would find that it was receiving, dollar-wise, less for its products than it paid for imports. Therefore, it was suggested by these astute gentlemenand I want to say here that they are very astute and they certainly are looking out for the interests of their countries-that industrial countries, such as the United States, be requested to continue financing the development of these backward countries through international organizations on long-term bases-a sort of International Reconstruction Finance Corporation, and those words were used in that

statement.

American capital would be denied the right to explore for and develop the mineral resources of the country in question. True, Americans would undoubtedly be asked to furnish the money through some international bank to finance the exploration and development of the natural resources of the country in question. But the only benefits the United States would receive from such a development program would probably be the employment of American technical know-how. Profits would be denied to American capital. This analysis has received little attention in the American press, but it is a true analysis of the suggestions made by the representatives of backward nations at the last Monetary Conference.

Suppose the United States deprives itself of its present sources of raw materials and the program as here suggested is adopted, and we not only industrialize foreign countries which are not now industrialized but finance them on a long-term basis in the development. of their minerals. What then? What is our future? Commonsense tells us that for safety purposes alone we should continue to produce minerals within our own borders. The best program which has yet been suggested, as far as the mining industry is concerned, is the adjustable import-tax program as incorporated in the Simpson bill. This does not mean that the industry which I represent is in any way opposed to the creation of a Commodity Credit Corporation, or any other program which will aid and assist the production of minerals in the United States; it does simply mean that we are 100 percent behind the program introduced by Congressman Simpson and we advocate its immediate adoption by the Congress of the United States. A delay of 1 year without the passage of remedial legislation will provide irreparable damage to our industry. We plead in all seriousness and all earnestness for the immediate passage of this legislation. We strongly oppose the delay of consideration of such legislation until next year.

In closing this statement may it further be stated that the mining industry has foreseen its present deplorable plight and has, on former occasions, testified before the Select Committee on Small Business of the Congress. Many of the miners who testified before the Committee are no longer engaged in the mining business; their mines are closed. The records of the closures of mines are before the Congress. We sincerely trust that the hearings which your committee conducted in the various mining camps of the United States will again be referred to for they contain information which will help you in your findings. We wish to express our sincere gratitude to your committee for your willingness to conduct your hearings in Denver, and we sincerely trust that your stay will be pleasant as well as informative. The CHAIRMAN. Thank you, Mr. Palmer.