DOMESTIC LEAD-ZINC MINING INDUSTRY-MARGINAL TO FOREIGN PRODUCTION- Lead and zinc mining in the United States is at a disadvantage in relation to Wages per day in Mexico range from 85 cents in small independent mines to Sound Co. reports as follows on its Mexican operations: "The lowering of pro- But, to return to wages, Morocco, with large, relatively high-grade lead-zinc It has been estimated that foreign lead-zinc can be produced at some 5 cents The need for stabilization import tax legislation is therefore directly related 34376-53-4 UNITED STATES TARIFFS AND INTERNATIONAL TRADE BARRIERS For the Free trade logically assumes bilateral removal of tariff barriers, import and export restrictions, currency manipulations and government or private cartels. Even after removal of such devices international free trade, to be successful, must be conducted in an environment of freely convertible currency. United States to unilaterally remove its tariffs or to fail to provide proper protection for vital raw material and manufacturing industries under present conditions of international trade would be but a shortcut to crippling of our domestic economy and suicidal invitation to disaster in war emergencies. Let's look briefly at present conditions affecting international trade, to better understand the inconsistency of the pleas of "internationalists" for free trade and unilateral removal of trade restrictions by the United States. The United States Tariff Commission report for the period April 1949-June 1950 states: "In most foreign countries embargoes, quotas, licensing, and exchange-control regulations have become more important than tariffs as a means of restricting imports. At present most foreign countries restrict both the quantities of goods to be imported and the sale of foreign exchange.” An editorial in the Wall Street Journal, January 27, 1953, states, regarding the post-World War II period: "Most governments built shelters around their economics-shelters of currency controls, import and export controls, investment controls, and other devices which masked supply and demand and kept economics outdated." A Mr. O. R. Strackbean of the National Labor-Management Council on Foreign Trade was quoted in the January 13 issue of the Wall Street Journal on this matter: "Slowly the facts are beginning to emerge that the United States is now distinctly a low-tariff country and that our trade restrictions are much less onerous than those maintained by most of the countries that so readily protest our ‘high trade barriers.' The overall result (of tariff reductions since 1934) is that today our tariffs are down 75 percent from their high point so far as actual protection effect goes." France recently reimposed import duties "to protect domestic producers of nonferrous metals" according to the American Metals Market, March 5, 1953, issue. This was done because "France is self-sufficient in lead and any further decline in prices would force shutdowns in some French mines" (and in French overseas territories). The United Kingdom and many other countries license imports and exports; South American countries have freely used different exchange rates to favor or exclude varieties of imports; Mexico has export taxes on many of its products; and devaluation of currency by many countries following World War II seriously disrupted world trade. In spite of all these barriers so restrictively effective in international trade, we are urged by those same countries to lay our economy completely open to their exploitation. The United Nations goes even further; it implies a threat to the United States when in discussing international trade in a pamphlet titled "Measures for International Economic Stability" its "economic experts" state: "That country (United States) might well take a liberal view as a means of reducing the need for other countries to take new discriminatory measures against its exports." The domestic mining industry of the United States simply asks for protection against dumping of foreign metals in excess of our needs through enactment of legislation now presented and designed to stabilize metal prices at a level consistent with production costs in our domestic economy. It is in the interest of our domestic economy and security to do so. Year 1 Tariff suspended subject to automatic reinstatement should price fall below 18 cents. 1 Suspension subject to automatic reinstatement should price fall below 18 cents. 17.00 0 0 15.00 5.0 MEMBERS OF THE HOUSE WAYS AND MEANS COMMITTEE BEFORE WHICH HEARINGS ON H. R. 4294 (SIMPSON BILL) WILL BE HELD COMMENCING APRIL 22, 1953 Daniel A. Reed (New York), Chairman Jere Cooper, Tennessee ESTIMATED LEAD-ZINC PRODUCTION IN THE 11 WESTERN STATES IN 1953 The 11 Western States normally produce approximately 60 percent of the lead and the zinc mined in the United States-a great contribution to our Nation's industry and of vital importance to the economy of the producing area. Following scare buying of metals in the "free world" in 1951, supply balanced, then exceeded demand. Dollar value and lack of effective import duties attracted surplus lead-zinc to our market, early in 1952, resulting in a gradual price decline up to October, when dumping of British lead and the threat of dumping zinc forced prices down to 132 cents per pound of lead and 121⁄2 cents per pound of zinc. A fall of 52 cents and 7 cents per pound respectively. A study has been made for the purpose of estimating lead and zinc production in 1953, in the 11 Western States, on the assumption of lead and zinc prices continuing at 132 cents and 122 cents per pound for the year. The results, showing very material decreases over 1951 and 1952, in lead and zinc and in gold and silver normally produced with these metals are shown below (gold and silver production from lead and zinc ore): At average metal prices for 1951-52, and the assumed 132 cents for lead and 122 cents for zinc for 1953, the above metals would represent new wealth for the 11 Western States in the following amounts: (The cost of metal refining done outside the 11 Western States as well as freight charges to marketing points was deducted from average metal prices to determine such value.) 1951 1952 1953 $244, 187, 298 201, 747, 538 105, 450, 000 The price of lead has risen to 144 cents per pound as of December 31, which increase if carried through 1953 would aid $3,822,500 to the above estimated 1953 value. The estimated drop of one-third in metal production in 1953, marketed at present prices, would mean less than half the 1951 value. Lead and zinc mining like any other business can be carried on only under profitable conditions. The price drops forced many small mines to close, others, large and small, to restrict production to their available higher grade ore. Direct employment, wholesale and retail trade, personal professional services, taxes to local, State and Federal governments in the 11 Western States will all suffer losses along with the mines. Utah's share of this loss of new wealth is estimated at $13,800,000 for 1953 as compared to 1951. It is historic that in times of scarcity, attendant with war or war threat emergencies, metals are scarce in the United States. Government has in those periods urged greatest possible domestic metal production, meanwhile imposing price ceilings on newly produced metals and allocation of the available supply on metal fabricators and users. Foreign prices at the same time, uncontrolled, rise above our ceiling prices and we purchase whatever foreign supplies we can get at those higher prices. In times between such emergencies when there are surpluses of metal, Government forgets the previous serious scarcity, forgets the all-out effort of our domestic producers, and favors throwing the doors wide open to the foreign producer. He, favored by lower cost operations, by comparative value of the "dollar" and by the fact that import duties are unrealistically low in relation to comparative costs, dumps his surplus metal on our market with results illustrated by the above production and value figures. Each such cycle further discourages domestic production, or development for future production. If not corrected this condition can continue to the point where our dependency for metals can be so great as to leave us largely dependent on foreign metal production. We can then assuredly expect to pay prices higher than those necessary to maintain a healthy domestic industry, but more seriously, we can reasonably doubt availability of those metals to us in an emergency or in war. We have had excellent but painful examples of extortionate prices for foreign rubber, tin, and copper in the last few years, when our domestic dependency permitted that advantage to be taken. STATEMENT BY MILES P. ROMNEY, MANAGER, UTAH MINING ASSOCIATION The lead-zinc mining industry is in a desperate plight. Its productive capacity and its ability to survive has so long been taken for granted that it is difficult to impress upon the people of our country the critical status of its present condition and the nature of the stake they have in its continuation as a healthy, prosperous industry. Depressions, emergencies, taxes, tariff policies, and international trade philosophies and conditions have all taken their toll and left their mark, until today it is rather commonly assumed that our metal resources are nearly exhausted; that we should conserve what we have left by keeping it in the ground, and that we should largely substitute imported metals for our domestic production. The industry needs immediate relief to prvent unrestricted dumping of foreign metals in our markets; Tax relief to permit an inflow of capital into the prospecting level of the business; And the continuation of an administration sympathetic to the principle of free enterprise. Mining is a high risk business. There are risk factors involved which are not experienced by any other type of business-such as, farming, manufacturing, wholesaling and retailing. In each of these, conditions affecting cost of production, cost of plant, abundance of raw materials and markets for the product, are sufficiently definite to permit careful analysis of the opportunity for success before making the investment to set up the business. One other feature distinguishes their risk in comparison to that of mining. That is that their source material supplies or inventories are largely reproducible; whereas, the ore reserves of any mine are a shrinking asset-exhausted when the physical limits of the ore body are reached. Before it can be determined whether or not a profitable mining operation is possible, many thousands, or hundreds of thousands, or in some cases millions of dollars, must be spent to explore the suggested or suspected ore deposit. Only after this risk investment stage can a mining company reasonbly estimate the value and extent of its source of supply, its production costs, plant costs, etc. Mining of copper, lead, and znic is one of the most important industries of the West, not only as it is related to the economy of the West but as it relates to the production of raw materials for use in the Nation's economy. Its wellbeing is of vital importance to national security. The West in 1952 produced the following percentages of the total United States production of lead, zinc, copper, gold, and silver: 67.5 percent of the |