the law of supply and demand, either with or without a protective tariff, since this price is controlled by the large zinc smelting companies who have foreign interests. Then through a Federal subsidy reimburse the miner for the difference between his realized price on net mill, or smelter, returns and an arbitrary 10 cents per pound for the recovered zinc in the ores.

Now, gentlemen, you have heard the various hard-luck tales from the tongues of the various small mine operators and these are matters of fact; you know the present picture of metal payments by the custom mills and smelters and the amounts that are taken from the producer and you know that the present trend is driving, or has driven, most of the small base metal mine operators out of existence. If this policy is allowed to continue, it will shut them all down within a short space of time and many of the properties that are thus shut down will never be able to open up again and resume operations in a time of need.

If a plan is formulated whereby the small mine operator can get a fair share of his metal values; can explore and develop his property properly; and then be assured of a fair price for his products over a sufficient period to recoup his expenses for development and exploration, then there is some incentive to be in the mining business. This is one of the most important to our country in time of war.

I state emphatically that the increase in the prices of lead and zinc under the present unequal distribution of the proceeds between the miner, milling company and the smelter is not the answer however high these prices are raised. The problem is one of the protection of our national resources for the future by making it profitable for the miner to operate efficiently. The miner is the producer and custodian of our national resources and he should not have to give the greatest percentage of his proceeds to the custom mills and smelters of the big companies.

It has always been my conviction that the Defense Production Act of 1950, as originally intended by the Members of the Congress, was intended to assist and aid the small mine operators, but after it had been worked out and administered by the group from big mining industry it was diverted to another trend and helped only those who could get financing from their own operations during the period of exploration and development of their property.

In our case, we had a project for the sinking of a shaft and the driving of drifts from the bottom of the shaft. We were required to match dollar for dollar of this expense with the Defense Minerals Act. It is only through the fact that we are sinking in ore that pays for our half of the matching funds that we were able to utilize this act. If we had to do exploration work, where all of the funds were to be expended without any income from the operations, then we would not be able to utilize it. A number of small mine operators find that they are in the same boat.

Let me put you straight on this item. I am not critical of the intent of the Congress in what they wanted to do for the mining industry in the Defense Production Act, but I do want to state that it has been diverted and administered so that the small mine operaor, mining lead and zinc, is no better off now than if there were no such act. Small mines need exploration and development work that they cannot afford to do under the present market prices of lead and zinc, they have no substantial cash reserves with which to do this work, and after this prolonged period of low metal prices with high operating costs they are in a worse position today than they were in 1950.

I do not propose to set out all of the inherent troubles now existing under the present conditions and leave the matter in the air. I have thoughts on how they can be corrected and I present them as follows:

(1) That legislation be enacted under the name of the Small Mines Protective Act, or some similar name, with the following provisions:

(a) That a small mine be defined as one that produces not more than 100 tons of ore per average operating day, or 25,000 tons annually, of lead, zinc, or leadzinc ores, under normal operating conditions.

(b) That since most small mines have been operating under adverse conditions during the past year, or two, and are probably in debt at the present time, that if needed the Administrator be empowered to cosign a note to the miner's local bank to meet his indebtedness for labor, supplies, materials, equipment, taxes, property payments, etc., but not for dividends or nonoperating costs, for a sum not to exceed $25,000. The note is to run for a period of 5 years with payments to be made thereon for both principal and interest by the payment of 5 percent royalty on all net returns from the custom mill, or smelter, received from the shipment of ores from the property.

(c) That since most of the small-mine operators have exhausted all their cash reserves and probably have no working capital at the present time, the Administrator of the act be empowered to make a loan of not more than $10,000 to the mine operator, repayable over a period of 5 years, on a sliding scale providing time for development and at a nominal rate of interest.

(d) That the prices as quoted on the metal market for lead and zinc be allowed to move at the will and pleasure of the law of supply and demand.

(e) That the Administrator be empowered to pay the small-mine operator the difference existing between what the small-mine operator receives per pound of lead and a set price of 12 cents per pound. The small-mine operator price received shall be that shown on his mill or smelter settlement sheet before royalty payment but after all deductions such as milling, treatment, trucking, freight, etc., have been deducted.

(f) That the Administrator be empowered to pay the small-mine operator the difference existing between what the small-mine operator receives per pound of zinc and a set price of 10 cents per pound. The small-mine operator price received shall be that shown on his mill or smelter settlement sheet before royalty payment but after all deductions such as milling, treatment, trucking, freight, etc., have been deducted.

Needless to say these outlined suggestions above will have to be amplified, thoroughly defined, and properly covered in writing up an act of this type, but if the small-mine operator could get the prices outlined for his lead and zinc metals over a period of 5 years, be sure that all of the money that he received from these reimbursements could be put into mine development and be recouped within that period, then he would mine his property in an efficient manner and the natural resources of the country would be protected.

CONCLUSION

Gentlemen, when we, as miners, mine some 2,500 tons of ore of a gross value of $95,214.53 and after custom milling, our percentage for the work, risk, and enterprise is only $27,454.16, or 28.9 percent, we have reason to question the present practices of the milling and smelting fees. When you consider that in the period we shipped $36,463.12 in zinc metal, and received only $4,871.88 for that amount of metal at an average price of 13.6 cents per pound, then I say tariffs, higher prices, and the like, will never improve the zinc picture. need a subsidy payment until such time as the inequities are corrected.

We