report are most commendable. But the conclusions that the mineral reserves of the United States are practically exhausted is, shall I say, a major lie.

Mr. PATMAN. At least a guess from your viewpoint, is it not?

Mr. PALMER. All indications are, in the Nation, that there are mineral reserves which have not even been touched. That is what we want to do, to encourage the development of old areas and the production from new areas in the United States. We think there is a tremendous field for the further growth of our country. I know in some places where they have ore which the larger industries claim is no good, but which are being developed just the same. And which bears out your theory that they do not always evaluate these things because of lack of information and knowledge.

That is all, Mr. Chairman.

The CHAIRMAN. Mr. Multer.

Mr. MULTER. Mr. Palmer, you say that the Paley report was accepted verbatim?

Mr. PALMER. Yes, sir.

Mr. MULTER. Will you tell me, please, by whom was it accepted verbatim?

Mr. PALMER. By the economists for the so-called backward nations in attendance at the international monetary conference. They took this report and then took it to their countries and studied the report and accepted it as final. In other words, the general impression among those men is that we are in a terrible mess in the United States, mineralwise, that we have exhausted our mineral reserves.

Mr. MULTER. But you did not intend to infer that our Government accepted that as verbatim, but that it was simply issued as a factual report?

Mr. PALMER. No, sir.

Mr. MULTER. Of course, no one on the part of our Government undertook to say that it was factually correct.

Mr. PALMER. I think that is correct; yes. sir.

Mr. MULTER. You asked two questions here: Is it the desire of our international theorists to maintain foreign governments, or is it the desire of our State Department to aid and assist the workers abroad who presently work in mines at wage scales far below those which exist in the United States? By way of partial answer to those questions, may I say to you that it was my privilege to take a committee abroad through all the South American countries in 1950. There was one other Democrat on the committee besides myself, and although it was a Democratic administration at the time, and Democratic control of the Congress, there were 5 Republicans that went along with me. So, when I said that the statements made in these various places that we visited had the unanimous support of the committee and were concurred in by our State Department, I think it is fair to say that it had bipartisan support. That principle that we enunciated throughout, even though it irked the heads of some governments that we visited, even to the extent of their making formal complaints about it, was that we were not interested in maintaining any foreign government as such, but what we were interested in was to aid and assist the worker abroad, and improving his conditions, and trying to bring him up to a standard of living as near to ours as

possible, on the theory that we can't expect these people abroad to buy our products unless they have the money with which to do it, and we can't expect them to compete with us on a fair level unless their standards are going to be similar to yours. I don't know of any change of policy since the change of administration, so far as that principle is concerned. If you do, I think this committee would be very happy to know about it.

Incidentally, I might say specifically to you, with reference to tin, you mentioned the tin situation in Bolivia. I went into Bolivia with specific reference to the tin situation at that time. While none of us agree with the principle of nationalization or expropriation of private property, I think in large part the nationalization of the mines in Bolivia was caused by the mineowners, most of them absentee mineowners. Our Government was taking the position that if Bolivia was to get an increased price for its tin it should get it provided the mineworker would get a fair share of that, and the mineowners said to me in so many words, "We are not interested in this increased price unless we can get the increased profit."

And they pointed to the fact that during this period industry and others in the United States were tripling and quadrupling their profits, and they took the position "We should get the larger share of the profit," while our Government took the position "We are interested in paying the larger price only if it is going to go to the producer and the wage earner, who will be able to get a better standard of living."

That was the impasse so far as Bolivia is concerned. I know that in all of these places that we visited the principle of the Export-Import Bank in helping industries throughout the world is that it has to be done on the basis of not creating unfair competition for our people at home but improving conditions so that we can fairly compete with them and they can fairly compete with us, so that it will not adversely affect our industry back here at home.

I don't believe there has been any change of policy by our State Department since the change of administration. I think we see eye to eye. I think both parties see eye to eye on that. If you know of anything different, we would be glad to have your comment.

Mr. PALMER. Well, Mr. Chairman, I would like to suggest to the committee that it examine the files of the Export-Import Bank, if they are available. They will give, undoubtedly, the wage scales in, say, Peru at the time that our Government granted $18 million through the Export-Import Bank to that country. See whether the wage scales of workers there have increased as a result of that.

With respect to the tin situation, the reason that that was mentioned was the effect upon the American people, what we pay for tin. We are the largest users of tin. We have a smelter in Texas, I understand, and we try to protect ourselves because we need tin. The point is, when the situation arises, as arose in Bolivia, within the United States you men of the Congress can take care of it. But when it is in Bolivia, what chance have you?

Mr. MULTER. The only answer I can give you to that is that during the war when we could not get tin anywhere else, and we don't produce any tin here, Bolivia was the only one who did send the tin in here. All during this period since World War II, despite the negotia

tions that the Russians have tried to carry on with Bolivia, Bolivia still would sell Russia no tin and would let it just pile up at home there, rather than to sell it to Russia at a higher price while still negotiating with us, and did that even after we had made a contract with England to pay the British a higher price than we were paying to Bolivia.

Mr. PALMER. I would say to you that we are the largest tin consumers in the world. We produce tin as a byproduct at our molybdenum property, but it is of no particular consequence. I just want you to know there is some tin produced in the United States.

Mr. MULTER. May I ask one other question. I don't think you pointed this up. But what can the Congress do, if anything, to help the mining industry develop these old and existing mines or help to develop new mines? What do you think we can do to help the mining industry?

Mr. PALMER. Produce a healthy climate for the mining industry which we think will be produced without any cost to the taxpayers through the enactment of this adjustable tariff. We think that that is the most constructive thing that the Congress can do. There are those who feel that granting additional tax relief to this industry will encourage production. We are like any other industry. We would like to have additional tax relief. But we wish to commend the Congress for the relief which was extended to the mining industry in your last session. We feel, however, that when a man is going bankrupt he doesn't worry about taxes, and that is the condition of practically all of the producers in this room today. They are all going bankrupt.

Mr. MULTER. You would be happy to pay the higher taxes if you had the profits out of which to pay them?

Mr. PALMER. If they had a good income, they wouldn't mind the additional taxes. While I will say that there is a mining boom on in Canada, and some of our very good friends are realizing real profits from mining operations in Canada, and there are those who contend that it is largely due to their tax program, it is the position of the people whom I represent that what we need is direct relief to the industry to keep our mines going. Then, if you have the justification for the granting of additional tax relief, that is the next thing we would like to urge be done, to entice capital to come into the mining industry.

Mr. MULTER. May I suggest to you that the mining situation in Canada is quite apart from the tax situation, because most of it is being financed with American capital, and that American capital is paying at least a 20-percent tax in Canada and then they are paying an American tax when they get the money here. So, it is not the tax problem that is giving them any trouble there or helping them. It is something else that we have to get to the bottom of to find out why we can't do as well as they are doing up there.

Mr. PATMAN. The questions which I asked you about the Paley report were not intended as making any charges against the report. I didn't know, and I was asking you for information.

Mr. PALMER. I understand.

Mr. PATMAN. Of course, your statement is a little strong about its not being true that it is a big lie. That is your opinion, which is all right, since every person is entitled to his own opinion. But your

first statement was that you didn't know whether it was true or not. I thoroughly agree with you; it is impossible to know. To that extent, I think they were very forward in their views on it. But at the same time none of us knows exactly what the fact is. That is really correct, isn't it?

Mr. PALMER. That is correct. The statement that our mineral reserves are exhausted, we contend, is incorrect.

Mr. PATMAN. That is right. Now, then, about your statement that I heard you make when I attended this meeting. Of course, we have a very high regard for Bill Hill down in Washington, both sides, Democrats and Republicans, and we were invited to a luncheon which you gentlemen gave or Bill gave. I listened to the statements made very attentively and I profited by it. You made the same statement there as you have made here. Although I am not in complete agreement with your statement, I am in agreement with you on the general objective. That is, that it will be without cost to the taxpayer. viously, if you raise the tariff duty, it is going to cost, not the taxpayer, but the consumer. I guess he would be in a consumer role rather than a taxpayer role. But there will be extra costs involved. I am not against you on that account, but I believe the phrase is just a little bit incorrect in that it leaves the impression that it is without any extra cost at all.

Ob

Mr. PALMER. Well, the statement should be extended to mean that it requires no appropriation on the part of Congress.

Mr. PATMAN. That is right. But it is an additional cost to the consumers, and although they are not all necessarily taxpayers, most of them now are.

Mr. MCCULLOCH. Did I correctly understand you to say or desire to leave the impression with us that over a long period of time the proposal which you make would not result in an increased cost, either to the taxpayer or the consumer?

Mr. PALMER. That is correct.

Mr. McCULLOCH. At least that was the conclusion that I drew from your statement. If it is not correct, I would be glad to have you correct that conclusion.

Mr. PALMER. That conclusion is correct, and it is based on the judgment of the best talent which we can get together in the industry. We think world prices would gradually adjust themselves to the cost of production within the United States, and that the tariff will gradually be eliminated. I would like to say to Congressman Patman that if you destroy the industry, which is being done, what would be the cost to the American consumers in the long pull?

Mr. PATMAN. I see your viewpoint there. You would not be in a unique position in asking for something that would add to the costs of taxpayers and consumers if it were in the interest of the economy of the entire Nation. I am not opposed to you on that account, but I just feel that although year by year it may not be exactly correct, it probably is over the long run.

The CHAIRMAN. Any further questions?

Thank you, Mr. Palmer.

Mr. PALMER. Thank you very much, Mr. Chairman.

The CHAIRMAN. We have this room crowded to capacity.

The next speaker we have listed here is Joseph H. Taylor, a member of the National Committee on Lead and Zinc from the New Mexico

mining industry. If Mr. Taylor is here and will take the chair, we will proceed.

STATEMENT OF JOSEPH H. TAYLOR, VICE PRESIDENT AND GENERAL MANAGER, PERU MINING CO., SILVER CITY, N. MEX.

Mr. TAYLOR. Mr. Chairman.

The CHAIRMAN. Do you have a statement you are going to read? Mr. TAYLOR. I am going to give you a statement and letter from the New Mexico Mining Association, as they wish me to represent them.

The CHAIRMAN. You have some other letters and a short statement. Then we will ask you questions after you finish.

Mr. TAYLOR. I am going to read the letters that I brought with me. One is from the chamber of commerce from Silver City, Grant County.

DEAR MR. TAYLOR: We in the Silver City-Grant County Chamber of Commerce are quite concerned over the economic effects felt in this area due to the present unstable zinc situation.

The steady decline in zinc prices have created a hardship on the zinc mines in this area as well as the merchants who are serving this territory.

Our records indicate that in 1952 there were 1,200 employed in the zinc mines in Grant County. Today there are approximately 323 employees; of which 135 are on production of zinc, the remainder on maintenance and exploration or development work. Obviously, the shutdown of these mines affect a great deal more than the actual number unemployed.

Please rest assured we will do everything in our power to help you to obtain an equitable price for zinc so that our zinc mines can reopen.

That is signed by Thomas W. McCabe, president of the chamber of

commerce.

In order that you could know something about the unemployment picture, the local office of the New Mexico State Employment Service also gave me a letter.

DEAR MR. TAYLOR: We are very glad to furnish you with the information requested concerning the present economical conditions in the Grant CountySilver City area.

The Silver City area covers Grant and Hidalgo Counties in southwest New Mexico. The principal industrial activities of the area are copper, lead, and zinc mining. All of these mines, with the exception of one, Banner Mining Co., are located in a radius of 16 miles of the town of Silver City in Grant County. The Banner Mining Co. is near Lordsburg, 50 miles southwest in Hidalgo County.

There are approximately 18,000 acres of cultivated agricultural land in Hidalgo County. The economy of this area is depen ent on the price of copper, lead, and zinc. Fifty-five percent of all nonagricultural wage and salary employment is normally accounted for by these mining companies.

The population of Grant and Hidalgo Counties was 24,971 in 1940, 26,744 in 1950, and is estimated at 27,000 at present. Present nonagricultural wage and salary employment of 4,797 is 24 percent below March 1952, and 14.5 percent below January 1953. This decrease is directly due to a drop in the price of lead and zinc, which caused the closing of 7 mines, and the completion of 2 small road construction projects.

The employment reduction has indirectly caused a decrease in trade and service establishments. The lumber industry, employing approximately 100, has been able to continue operating, while in 1952, due to deep snows, employment was reduced to a minimum.

Since March 1952; 950 workers have been laid off by the mining industry; 431 of these layoffs have occurred since January 1953. About 10 percent of these workers left the area. Some have found work in other areas, while others are returning here, unable to find employment elsewhere.

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