lead; 58 percent of the zinc; 96 percent of the copper; 99.9 percent of the gold; and 99 percent of the silver. Let us look at the mining industry in the West as related to the economy of the community and the Nation as a whole. First, its relation to the local economy. It provides jobs, pays taxes and supports service industries and professions. It is estimated that for each man employed in mining about 2.5 additional man-jobs are created in the community. As each man employed supports about 2.5 people, it readily follows that about six additional people are supported by the creation of one job in the mining industry. The population in relation to jobs in any isolated mining community will serve to illustrate this fact. The direct and indirect employment, the tax support of Government, the related industries and services, all suffer when mining is depressed or abandoned. Second, a mining operation requires a very high capital investment, not only in the initial exploration risk stage but to develop and equip the mine for operation. It has been estimated that the capital investment per job created is from $20,000 to $30,000. This compares with an estimated $10,000 to $12,000 per job as average for manufacturing investment and considerably less for wholesaling and retailing. Mining, milling, and smelting and refining are all necessary steps in making lead-zinc available for use by manufacturers of metal products. The smelters and refineries have been built by mining companies to process their own mine production and that of smaller companies. If present conditions force the closing of the major portion of the domestic lead-zinc mines, then it is but logical to assume that the smelters and refineries will also be forced to close. Why emphasize so obvious a conclusion? I do so for the simple reason that with our smelters and refineries closed, we will be absolutely unable to obtain the metals needed for our domestic economy. Why? Because the foreign producing nations do not have the smelting and refining capacity to treat the additional ore that would be necessary to supply our needs. They have facilities to smelt and refine their production, namely that which goes. to their normal European markets and that portion which normally comes to our market to fill needs over and above our domestic production. But they could not possibly fill those normal demands and the additional portion represented by our domestic production. Lead at 12 cents per pound and zinc at 11 cents per pound today means that the foreign producer is finding those prices profitable to him, otherwise he would not continue offering metal at such prices. He will hold such prices, or lower them further, until a sufficient portion of our domestic production has been destroyed to assure his being able to sell all the metal in our market that he has to offer. Once so assured by our permanent loss of productive capacity we can. fully expect prices to rise to whatever point our dependency permits. We respectfully call to your attention the fact that unless the domestic lead-zinc industry receives some immediate relief that it will be destroyed, with the regrettable loss of the employment, the taxes and the security at present related to it. I would like to briefly comment on a number of documents discussing variousphases of this subject which I would like to present for the record of this hearing. These papers were prepared for the purpose of supporting the proposed sliding scale stabilization import tax legislation presented in H. R. 4294. The Utah Mining Association is opposed to subsidies and urges consideration of H. R. 4294 with the view that it would provide the means of permitting the continued importation of the metals we need to supplement domestic production and at the same time help to establish prices for metals in our domestic market which are realistically related to production costs in our economy. STATEMENT OF MILES P. ROMNEY AT THE LEAD INDUSTRIES ASSOCIATION MEETING, WHITE SULPHUR SPRINGS, W. VA., APRIL 9, 1953 The statement was made in response to three questions presented for discussion. The questions are quoted below. To what extent will the current combined metal price of 241⁄2 cents per pound affect lead and zinc production in your area? What, if any, reduction in United States mine-production tonnage of lead in 1952 in your area was due solely to the drop in the price of pig lead? Do you believe that a continuation of the present level of lead, that is to say 13-14 cents, over 1953 will result in a serious drop in lead production in your area? If so, when in your opinion will a substantial curtailment in lead become apparent? Question 1.-The general but frank statement that continuation of 241⁄2 cents combined lead-zinc price, for any extended period, would kill off the major portion of western lead-zinc production is, I believe, agreed to by western mine operators. The Utah Mining Association estimated in December 1952, that lead and zinc production in 1953 in the 11 Western States, would be down to two-thirds of 1952 production if the then 13-cents lead, 121⁄2-cents zinc prices continued through 1953. Looking at the picture now-at present prices-the drop in production could be more than was then estimated. To date mines having a high proportion of zinc with low silver values have been hardest hit. A good example is New Mexico which has only one producing zinc-lead operation running today-with a current production rate of less than 5 percent of 1952. Reaction to date in terms of mines closing because of prices has been spotty and percentagewise in terms of lead production not too great. A large number of smaller properties, however, have closed down, being the most sensitive to reduced prices, through having had low financial reserves and being marginal costwise before the price drops. Question 2.-Percentagewise, 1952 lead production decrease due to falling prices was very small and until some recent curtailments, the major operating mines have continued normal rate of production in the hope that some price adjustment would forestall closure. Question 3.-To mine ore reserves for profits less than needed to— 1. Pay operating costs. 2. Recover invested capital. 3. Develop replacement reserves. 4. Finance exploration for new mines. 5. Give some return to stockholders is similar to a merchant holding a bankruptcy sale in order to liquidate the stock and go out of business. Few western lead-zinc mines are now operating at any profit and I think it safe to say that none are realizing the above outlined "needed" profits. The operators are rapidly approaching the hour of decision as to how long they can continue to sustain losses and deplete ore reserves. That, however, is the individual operator's problem and one which I would not presume to try and answer for him. However, they have gone on now for 5 or 6 months weighing losses against the dreaded conditions of shutdown, i. e., high mine maintenance costs, loss of working crews and staff men, and probably loss of ore reserves through failing timber, caving ground, etc. Many have resorted to “high grading" to postpone the decision. The price depression promises to be of long duration considering the abundance of "free world” lead and zinc reserves and the ability and willingness of foreign lead and zinc producers to undersell our market. It could be terminated through passage of the present proposed sliding scale stabilization import tax legislation or through the shortsighted alternative of permitting the wrecking of a sufficient portion of our domestic production to allow foreign producers to raise prices as "dependency" upon them permits. One point before I close. The average price for lead-1946 to 1952 inclusive, was 15.48 cents, a price sufficient to sustain domestic mining. The price range however, over this period was 6.5 to 21.5 cents. Price was well below the above average from March 1949 to September 1950, and dropped below the average again in September 1952. Very few mines, particularly the small ones from which the large ones grow, can continue to operate through an extended no profit period. Each cycle of depressed prices takes its toll in reduction of actual and potential lead-zinc production; in discouraging development, exploration and plant investment. Each one draws the noose a little tighter around the neck of domestic mining. The buyer of metals, has over the years, paid an average price adequate to keep the industry alive, but the feast or famine marketing process along the way has occasioned many casualties. All that western lead-zinc mining asks are means to stabilize prices at near the average levels which buyers in the past 6 years have indicated a willingness to pay. We in the Western States can then continue to produce some 60 percent of the Nation's lead and zinc "new mine" production. The CHAIRMAN. Mr. Multer? Mr. MULTER. Mr. Chairman, I think that the people assembled here ought to know that by your direction there has been prepared for the use of the committee in connection with these hearings the statistics on the production of lead and zinc and the importation of lead and zinc. If we tell that to them now, you may at the appropriate time make those statistics a part of this record. It will save some of these gentlemen the necessity of taking up time giving those figures. I don't want anybody to withhold working them into their statement so far as they think is necessary. But our chairman has had all of that statistical data prepared for us. The CHAIRMAN. If you will permit me, I will explain this. I think you can all see. As you can see at the lower part is the production of lead, from the last 5 years. That is from 1948 to 1952. In the center is the importation of lead. The higher line represents the price of lead. It is very interesting because you will find that where price was down still you were importing lead and you will find at this particular place the price started up and all of a sudden you get a terrific importation of lead. That is exactly what is shown more recently. The price is up, and then it started to lower. Then the foreign producers, being afraid, started to dump the lead on the market. This latter point is 1952 and then it is going into 1953. With your consent, Mr. Multer, we will see that that is put into our hearing record. Now we will move along because we want to get as much done as possible before lunch. Mr. PATMAN. We have heard from Colorado, New Mexico, and Utah. The CHAIRMAN. Now we are going to hear from Arizona. That is the way it is on the list here. It is Mr. Ralph R. Langley. He does not say whether he is a miner or an operator. Is Mr. Langley here? STATEMENT OF RALPH R. LANGLEY, MOJAVE COUNTY, ARIZ. Mr. LANGLEY. I didn't expect to be called here at all, Mr. Chairman, The CHAIRMAN. Your name is on the list. Mr. LANGLEY. I don't represent any organization in Arizona. I might tell you a little about our own country. The CHAIRMAN. What is your business? Mr. LANGLEY. I operate a mine in Mojave County, Ariz. Mr. LANGLEY. Lead-zinc. The CHAIRMAN. How many men do you have employed? The CHAIRMAN. You fit the definition of a small business, or small miner. Tell us what you wish, and we will ask you some questions later. Mr. LANGLEY. What I would have to say mostly would apply to the defense minerals, exploration, and administration. I think I had better complete a statement that I had partially shaped up on that and file it with the committee at your convenience. Aside from that, all I want to say is that in our county, Mojave County, the normal employment in mining there would be about 200 miners. My estimate today is that there are not more than 20 employed. That is due to the fact that the operators and producers cannot operate on 11-cent zinc and 12-cent lead. We will see you in Phoenix, if possible. The CHAIRMAN. Let's see if there are any questions. Mr. McCULLOCH. No questions. Mr. PATMAN. No questions. Mr. MULTER. No questions. The CHAIRMAN. Á little matter came up with respect to someone having to leave this afternoon, so we decided to try and hear them early in the afternoon. If there are any of you who cannot stay over until tomorrow, let us know after lunch and we will try to help you. Mr. Bloss of Del Norte. We will put you on now, and then you will have plenty of time to catch the plane. STATEMENT OF RICHARD L. BLOSS, JR., DEL NORTE, COLO. Mr. BLOSS. My business is a profession. I practice law. I represent, Mr. Chairman, a small concern which is trying to get into operation a mine that pertains to columbium and tantalum. I think it would fit the general category though it does not specifically pertain to the field of lead and zinc that has been discussed here this morning. So that the committee may know what we are talking about, columbium is a metal that is used in alloys for turbine and jet engine parts. The 1950 Minerals Yearbook published by the Bureau of Mines quotes military requirements for columbium in the swiftly expanding jet engine program so far transcends any known or hoped for supply that drastic measures had to be taken for allocation, conservation, and substitution. You may have noticed in some recent newspaper or magazine advertisements that these large airplane engine factories that are producing jet engines now are attempting to without using any columbium at all. Tantalum, which is a metal that is associated in the production of columbium is a corrosion resistant metal and is used in pumps, nozzles, synthetic fibers, medical equipment, plates that are used in surgery and braces, and so on that find their way into our bodies as part of our bodies. It is used in radar equipment and that sort of thing. In an order that was entered by the Defense Materials Exploration Administration dated early in March 1952, the Government found it necessary to encourage the exploration, development, and mining of these and other critical and strategic metals and minerals. In process of bringing to light the serious condition and shortage of these minerals, they had a program that was put into effect providing for incentives to produce and to explore for columbium and tantalum. So that this committee may know the type of shortage that existsand we are talking in pounds now rather than tons because of the type of metal it is the Government is seeking to stockpile 15 million pounds of concentrates of these 2 types of metal. During the years from 1946 to 1950 the average annual requirements, as measured by imports, was 1,700,000 pounds. In 1946, 21⁄2 million pounds of concentrates were imported, as compared with 1.7 million pounds in 1950. All of these imports came from five sovereign nations. These statistics disclose a decrease in supply, while the demand for them was increasing. During the same period of time, 1946 to 1950, 100 pounds of concentrates for columbium were produced within our own country, 100 pounds as compared with 2 million pounds that are needed, or 212 million that are needed. During these same years the average import of tantalum was 230,000 pounds, and we produce within our own country 1 percent of that amount. By commonsense reasoning, therefore, we can plainly see that the negligible production of ores within the boundaries of our United States presents a fantastically serious problem for positive action in order to safeguard, protect, and perpetuate your family and mine. With these metals being used in jet engine equipment, surgical instruments, radar equipment, vital electric devices, and other necessary things, the efforts of people engaged in these particular mining activities, whether they be large corporations or small and independent operators, presents a high challenge. From the 1948 handbook it says that for the first time since 1942, that was the time when we were getting into the World War II effort with all seriousness, in 1948 the columbium imports fell below 2 million pounds and this despite the fact that the demand for columbium remained at a near-record level. In 1948, you will recollect, this third possible conflict was just cooking along. Diversion of the part of total supply to consuming countries other than the United States is not a significant factor in explaining this decline. Instead it is believed that accumulated columbite-tantalite-rich dumps which had been worked in Nigeria during the war years, to supplement output from temporary tin production, was becoming depleted. The 1950 handbook says that despite unlimited consumer demand and alltime high prices, official sources indicated an unpromising long-term outlook because of dwindling tin reserves. Nigeria furnishes about 80 percent of the supply of columbium and tantalum that is used in the world today. In northern New Mexico in particular there are ore bodies, generally placer bodies in nature, which would mean this mineral is not found in place but is found to have been deposited by being moved by the elements from one place to another and finally in a deposit. The trouble that exists is that despite the fact of the requirements of our Nation in these modern times for the type of high-temperature metals and high-corrosion resistant and radar type of metals, it still does not provide an incentive that will reach out and compel production of these minerals within. the boundaries of our own country. For example, there is a body of this placer ore down in New Mexico which has been explored in a way that would indicate that there might be enough of this mineral available to supply the requirements and needs of our Nation for 3 to 4 months, and yet the operation is so small in comparison with the types of mining operations that other people in this room are normally familiar with, even though they are all classified as small businesses, that it is practically impossible to get any kind of normal cooperative assistance in this type of endeavor. It might well be that while such small deposits of vital minerals seem |