Mr. BROADGATE. Well, I was coming to that. You mentioned the fact that the Rosiclare deposits and deposits in that vicinity were getting pretty lean and pretty deep. Isn't it true that you testified before the Canadian tariff board that your crude ore only ran about 35 percent CaF2; that you had to concentrate with a heavy media process before you shipped to Wilmington?

Mr. SEIBERT. No, sir, I don't believe that is true. Our ore in Newfoundland will run around 50 percent. We had to preconcentrate that ore to run it up to about 80 percent-75 or 80 percent.

Mr. BROADGATE. Well, the board didn't agree with you in its report because it said

Over the life of the contract

meaning the U.S. Government contract—

the St. Lawrence Corp. of Newfoundland shipped to its affiliate in Wilmington about 210,000 tons of heavy media submetallurgical concentrate.

Mr. SEIBERT. That is right. We mined the 50 percent CaF2 product that was fed into a heavy media mill which was part of the Government financing package.

Mr. BROADGATE. Not 35 percent?
Mr. SEIBERT. Not 35 percent.

Mr. BROADGATE. But 50 percent?
Mr. SEIBERT. Yes.

Mr. BROADGATE. Now, considering the price that the Government paid you under its contract, do you consider that the maximum prices specified in the Allott bill are too high for fluorspar?

Mr. SEIBERT. Personally, I would like to see acid-grade fluorspar bring $100 a ton.

Mr. BROADGATE. Well, that wasn't my question. Of course, we always want to make more money.

Mr. SEIBERT. Fifty-five dollars per ton, sir, in Rosiclare means $70 per ton in Wilmington, Del. Fifty-three dollars per ton at Northgate would mean $75 to $80 per ton in Wilmington, Del. I don't say that is too high

Mr. BROADGATE. Are the freight rates that great?

Mr. SEIBERT. Yes, sir.

Mr. BROADGATE. What are the freight rates?

Mr. SEIBERT. To Wilmington they are $14-and-some-odd cents a ton from Rosiclare.

I would say from Northgate-Mr. Anderson testified that there is a $10 differential from Northgate to Rosiclare.

Mr. BROADGATE. What would your freight rates be from your mine in Canada to similar consuming points?

Mr. SEIBERT. To Wilmington, Del. under today's freight market, the rate would be in the neighborhood of $4.50 to $5 a ton.

Mr. BROADGATE. Wouldn't you have to ship from Wilmington to other places by rail?

Mr. SEIBERT. Well, some of the largest consumers in the country are in the Wilmington area: Du Pont, General Chemical. Between them, they probably use 75,000 to 85,000 tons a year.

Mr. BROADGATE. Now, there was another point stressed by the opposition to this bill. And that is that the domestic fluorspar industry had such an advantage from its Government contracts that it never

went out to try to get domestic markets. And, consequently, was culpable from that standpoint.

In the first place, do you think that at the world price, after the Government contracts were completed, the independent producers could have gotten domestic consumer contracts?

Mr. SEIBERT. I do not believe so.

Mr. BROADGATE. You do not believe so?

Mr. SEIBERT. No. I think it was a great mistake in judgment to put that much capital in Northgate at the time it was put in there. Mr. BROADGATE. Well, I believe that was a war measure. And we did a lot of things during the war that we are paying for now. But still with the right economic climate, it has been testified to that Northgate could operate.

Mr. SEIBERT. I believe eventually Northgate will be a very profitable organization. But with world markets what they are today, overproduction of acid grade fluorspar, it is not economical.

Mr. BROADGATE. Now, I ask you, Mr. Seibert, if you were not in precisely the spot that the domestic fluorspar producers were in who were that is, the independents-who were shipping to the Government, in that you were so concerned with the U.S. Government contract at high prices that you also did not canvass either the Canadian or the U.S. consumers to see if you could get a market?

Mr. SEIBERT. Well, sir, we did not canvass the Canadian consumers, because all of our production was needed in filling U.S. Government stockpile contract. However

Mr. BROADGATE. Well, that was true, of course, of our producers too?

Mr. SEIBERT. That was in connection with Canada. However, in respect to our operations in Wilmington, Del., we did continue to import and we have held every single one of our domestic customers during the period we are operating a flotation mill in Wilmington to produce fluorspar for the stockpile.

Mr. BROADGATE. Do you still have those domestic customers?
Mr. SEIBERT. We still have those domestic customers.
Mr. BROADGATE. How many of them and what tonnage?

Mr. SEIBERT. Well, sir, I would say that we have from 14 to 18 glass companies and ceramic companies. I would say that our total glass and ceramic business would run to somewhere between 12,000 and 16,000 or 18,000 tons per year.

Mr. BROADGATE. Are you selling any fluorspar in Canada?
Mr. SEIBERT. Not a pound.

Mr. BROADGATE. I notice that in your testimony before the Canadian Tariff Board you said that

It is correct that in order to fill this large U.S. Government contract, we had in effect to concentrate 100 percent of our efforts on this contract.

In response to another question you said to the Board that

Your firm was not servicing the Canadian market at all during the years when the contract was in operation. Not until 1957 when the contract with the U.S. authority terminated was the St. Lawrence Corp. of Newfoundland again willing to supply its Canadian customers with metallurgical grade fluorspar from its Newfoundland operation.

Now, you have just testified to the effect that you are not selling a pound there.

Why?

Mr. SEIBERT. We cannot meet the competitive market without any tariff help. If we had a $7.50 tariff on metallurgical grade fluorspar coming into Canada, we could get back into business tomorrow.

Mr. BROADGATE. I have been told that you did some canvassing of the U.S. market and particularly wrote one company offering fluorspar and said also that

In order to properly evaluate your offerings, we would like to get some prices f.o.b. shipping point, and we would like to know exactly where your shipping point may be.

Did you get an offer and some firm prices, and did you make a contract?

Mr. SEIBERT. Well, I had a letter come in offering me some fluorspar. And I had a suspicion that this would be a tie; and I wrote that letter, sir. And no indication was given of price or anything else. That letter was written only a matter of a week or two ago. Mr. BROADGATE. You haven't had any return?

Mr. SEIBERT. No, sir.

Mr. BROADGATE. Now, there has been a lot of talk, and Senator Allott has covered it to a certain extent, and to a large extent, about wages. You already mentioned the fact that you would like to have a $7.50 duty such as there is in the United States to be competitive in Canada.

I notice that in your argument before the Canadian Tariff Board you asked for $10 a ton and made the same argument that our producers have made and which you partly made in your statement. That is it is simply impossible for you in Canada to compete unless you get a $10 per ton duty because, as you said

we cannot compete paying $14 to $16 a day wages against the $3 a day paid abroad.

Mr. SEIBERT. We asked $10. We would be very glad to get $7.50. Mr. BROADGATE. What would your price be for fluorspar in Canada if you could get that $10 duty on foreign?

Mr. SEIBERT. There was a statement that I made to the Tariff Board that getting a $10-a-ton duty would not mean that we would use a $10 spread in price. We are resuming our mining operations in Newfoundland at this time.

Mr. BROADGATE. Why?

Mr. SEIBERT. We are, in effect, high grading the mine. We are now prepared to make offerings from St. Lawrence without a duty in Canada at a price which will just about keep us in the black. Mr. BROADGATE. What is that price?

Mr. SEIBERT. That price would be approximately $22 to $25 a ton f.o.b. Bolton at St. Lawrence.

Mr. BROADGATE. You said before the Board that this $10 duty would allow you to make a $5 per net ton profit before taxes. And in order to make that profit on metallurgical before taxes you would have to get $30 a ton f.o.b. St. Lawrence.

In order to get a profit of $5 per ton on acid, we would have to get $40 a ton f.o.b. St. Lawrence. To make a metallurgical grade fluorspar of this high analysis would cost our company at least $30 per ton, per short ton, on dock at St. Lawrence, Newfoundland.

The addition of a $5 profit would make the selling price, including profit, $35 at St. Lawrence.

Now, you have partly explained that by saying that you are high grading the mine. But still there seems to be quite a little discrepancy in the figures.

Mr. SEIBERT. Well, sir, it is good mining to mine from all of your open veins.

Mr. BROADGATE. It is not good mining to high grade, though, is it? Mr. SEIBERT. It is not good mining to high grade, no.

I have been closed down in Newfoundland for over a year. I am seeking to get back some of my good men who are available and there is a saying that a plant will rust out sooner than it will wear out. And in my opinion, if I can break even for the next year or two, I believe in that time we may find the demand in prices for fluorspar reaching a point where we then can use good mining practices and bring in ore from all of the open locations instead of high grading. Mr. BROADGATE. To sum up what appears to be your philosophy, Mr. Seibert, in order to protect your own company-which is very desirable from your standpoint and your stockholders' standpoints, and very understandably so-you wish to have a $7.50 or $10 tariff on foreign materials coming into Canada, but you would prefer to have free trade with the United States or at least no protections such as the Allott bill offers?

Mr. SEIBERT. I never said that, sir. I said

Mr. BROADGATE. I am trying to sum up your testimony.

Mr. SEIBERT. I said I never asked for any reduction of the American duty. You have a $7.50 duty on metallurgical grade fluorspar. I don't complain about that. I never have.

Mr. BROADGATE. But you don't want the additional production that the Allott bill would offer?

Mr. SEIBERT. I believe the Allott bill will interfere in free trade. I believe the Allott bill will make the consumer pay for that long freight haul from Colorado to Delaware.

Mr. BROADGATE. Don't you think that the $10 tariff in Canada would interfere with free trade?

Mr. SEIBERT. I see no objection to getting the same thing in Canada that the

Mr. BROADGATE. Well, we happpen to have it here. I don't think that according to your philosophy you should ask for it in Canada. If you believe in free trade, that is.

Mr. SEIBERT. Well, I am sorry that we differ on that point. I certainly think that I am entitled to a duty in Canada at least equal to the duty here.

Mr. BROADGATE. I think that is all, Mr. Chairman.
Senator ALLOTT. Thank you, Mr. Seibert.

Mr. SEIBERT. Thank you very much.

Senator ALLOTT. The next witness is Mr. Sinsheimer.

Mr. Sinsheimer, you have a rather long statement here.

Mr. SINSHEIMER. Yes, sir.

Senator ALLOTT. I want to give you an opportunity to present it in your own way. We can either introduce it and let you comment on the whole, or if you think

Mr. SINSHEIMER. I should like to present it. I have made some modifications to it that I would like to get in the record. Senator ALLOTT. Very well.

STATEMENT OF WARREN J. SINSHEIMER, VICE PRESIDENT AND GENERAL COUNSEL, IVANHOE TRADING CO., INC.

Mr. SINSHEIMER. Mr. Chairman, my name is Warren J. Sinsheimer. I am an attorney at law and a partner in the firm of Sinsheimer & Sinsheimer. I am also vice president and general counsel and a member of the board of directors of Ivanhoe Trading Co., Inc., a New York corporation that is presently actively engaged in the importation of acid-grade fluorspar, and, consequently, vitally interested in S. 1285. At the very outset, permit me to point out that I am neither a mining engineer nor a geologist, nor am I conversant with the intricacies of the mining industry as such.

Ivanhoe Trading Co. was incorporated under the laws of the State of New York in the year 1953 and has been engaged in the importation and sale of acid-grade fluorspar. It owns no mines or milling facilities and engages solely in the purchase and sale of acid-grade fluorspar.

Our company today is one of the major importers of acid-grade fluorspar from Europe, importing its requirements from Spain.

Our company is appearing today in opposition to the enactment of S. 1285 which would in operation impose severe quotas on the importation of acid-grade fluorspar. Since our company is only engaged in the importation and sale of acid-grade fluorspar, I shall confine my remarks in this statement to the effect of S. 1285 on the acid-grade industry and shall not make reference to either ceramic-grade fluorspar or metallurgical-grade fluorspar.

S. 1285 has been compared by some to the Sugar Act. However, upon examination, it is fairly obvious that the legislation that is before this committee has no relationship whatsoever to the Sugar Act. I believe that legislation must be interpreted by reference not only to the cold words appearing in the act itself, but by reference to the extrinsic facts and circumstances surrounding the adoption of any given piece of legislation.

This committee will recall, I am sure, the multitude of problems that faced the sugar industry at the time of the enactment of the first so-called Sugar Act. Prices in the sugar industry had declined to a small percentage of the 2-cents-per-pound tariff and the principal foreign supplier, Cuba, was brought to the brink of economic and political chaos because of the extremely low price of sugar which was that country's lifeblood. A great deal of the pressure to enact the Sugar Act came from foreign sources since they were no longer able to sell sugar in the United States because of low prices and high tariffs. The Sugar Act, therefore, was a device used to raise prices to the point where both domestic and foreign producers could sell at a profit.

The act was not at all discriminatory against foreign producers. The quotas set up pursuant to it were roughly in the same percentage, domestic to foreign, that had obtained prior to its enactment. The fluorspar industry is not faced with any of the problems that sugar was faced with immediately prior to the Sugar Act. The duty is not so high that foreign producers cannot compete nor are the prices so low as to cause the domestic producers the loss of substantial portions of their normal markets.