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tion than I can possibly muster, explained to you the impact of this bill on the consuming chemical industry.
For these reasons, we must go on record as being opposed to the imposition of quotas on acid-grade fluorspar.
The acid-grade fluorspar industry has been the subject of a multitude of administrative proceedings. The Tariff Commission made a complete and thorough investigation in 1955 and the OCDM is currently engaged in an investigation pursuant to the provisions of section 8B of the Trade Agreements Extension Act of 1958. Neither of these bodies has ever made a finding either that national security was being imperiled or that the domestic industry even was being injured by imports.
The Tariff Commission report in 1955 was divided. The Democratic members of the Commission finding that there was no present injury to the domestic industry or even threat of future injury to the domestic industry and the Republican members finding, likewise, that there was no present injury but only threat of future injury.
Every administrative agency that has testified before this committee has been opposed to the enactment of this legislation.
In conclusion, I submit, that the problem of import quotas be left in the administrative agencies where it belongs: In the Tariff Commission which is an arm of the Congress of the United States or in the OCDM which is an administrative agency in the Executive Office of the President.
Permit me to express my appreciation to the committee for the opportunity of being heard on this subject and for the courtesy and attention afforded to me here today.
The legislation which is presently before you is in my humble opinion one of the most important pieces of legislation currently pending before the U.S. Congress. The repercussions from its enactment had been heard around the world.
At this stage in the development of our foreign policy when we are approaching a time when the United States and her allies must stand together solidly, we should be doing all we can to assure ourselves that the bonds of interest which tie us together are strengthened.
Passage of this bill would weaken those economic ties which give the Western World its present strength.
Passage of this bill would be a demonstration to the Communist world that this country permits the selfish interest of a tiny segment of its economy to override major interests of its friends and allies abroad. The free world looks to the Congress of the United States for positive leadership. It looks to this august body for progress, economically, politicaly and socially. It does not look to this country to revert to a protectionist philosophy at a time when the free world has regained its health through application of principles of free trade. Senator ALLOTT. I would like to point out to you that you have to some extent tried to point out the difference between the sugar situation which existed at the time the Sugar Act, the Costigan Act was originally passed, I believe, in 1934 and the situation with respect to the fluorspar.
Now, let me point out to you that simply because all of the elements which existed at the time of the passage of the Sugar Act do not exist in the fluorspar industry is no reason why methodology cannot be moved from one field to another.
Mr. SINSHEIMER. I agree that the similar method can be moved from one field to another provided that there is a restriction, sir, that the problems are different.
Senator ALLOTT. Now I would like to go into this situation of reversal.
You have placed a lot of emphasis on it in your statement generally. I wouldn't refer to it specifically, because you will recognize it. But you have placed emphasis on the free trade policies of this country. I have said this several times and I will say it again, that I recognize that you can't export billions of dollars worth of goods unless you build dollar credits up abroad to buy those.
But can you give me one logical reason why this country should permit not only this particular industry but the mining industry of the United States to go downhill when the imports that are ruining it are based upon subliving wages to the greatest part which are paid to producers abroad? Or to laborers abroad?
Mr. SINSHEIMER. Well, Senator, first of all I must take issue with you on the statement that the imports are ruining this industry. My whole approach to this problem is that this industry in any area where it is feasible for it by transportation to compete still does compete.
Senator ALLOTT. Well now you are engaged in the trading business. Mr. SINSHEIMER. That is correct, sir.
Senator ALLOTT. As you very carefully set forth, you are a lawyer, you don't claim any
Mr. SINSHEIMER. No mining knowledge.
Senator ALLOTT. You don't claim any knowledge of the mining industry. And I don't claim much either. But you are engaged in the trading business?
Mr. SINSHEIMER. That is correct, sir.
Senator ALLOTT. In other words, you are engaged upon the trading and the purchasing of cheap materials abroad for the purpose of importing them to this country and selling them at a profit?
Mr. SINSHEIMER. That is correct.
Senator ALLOTT. May I inquire by the way: Is the chief ownership of the Ivanhoe Corp. American owned?
Mr. SINSHEIMER. Yes.
Senator ALLOTT. Now, with this situation, if you believe in free trade, Mr. Sinsheimer, which you do, I think you will also have to agree as a corollary to that that the basis of free trade is not just for the purpose of building up dollar credits in foreign countries? Mr. SINSHEIMER. I think that is true.
Senator ALLOTT. And if you believe in free trade, then you must believe that one of the purposes of it is to provide foreign countries the opportunity to develop.
Mr. SINSHEIMER. I say, I think that is one purpose, that is correct. Senator ALLOTT. So that as has been said so many times and so many ways, it is hard to say it without being trite, that you raise the economic status of these countries to the place where they are in effect able to resist communism.
Mr. SINSHEIMER. I think that is one purpose but certainly not the sole purpose.
Senator ALLOTT. One of the main purposes.
Mr. SINSHEIMER. I would think that is true.
Senator ALLOTT. Now if you have a situation where you are importing X amounts of fluorspar from Mexico, for example, or Spain, and the money which the United States is paying for that is not going into the hands of the people who produce it, how can you say that we are accomplishing this one purpose at least of free trade?
Mr. SINSHEIMER. Well, Senator, to begin with, I think I would take issue with you on the fact that either the wages of workers abroad have not gone up in the past 6 or 7 years or that the standard of living hasn't.
Because I think from my own observation it has in most countries. Senator ALLOTT. Well the testimony before this committee on previous occasions indicates that the standard of wages in the minerals industry abroad has gone up very little in recent years. I don't think that in Mexico you can compare a $1 American or $1.25 American or 12 or 14 pesos a day, and even say that it begins to approach the level of living which our wage earner had in this country at the turn of the century, which is almost 60 years ago.
Mr. SINSHEIMER. Senator, I think the problem is much more complex than the wages of a miner who digs out coal. Because if money goes into the economy of a foreign country, it has the effect of raising the standard of living in that country whether or not the specific miner that dug the ton out of the ground receives higher wages or not.
Senator ALLOTT. And where is this money going?
To two people. It goes primarily to the mine owner or producer in the foreign country. And secondarily, and just as important, to the government by way of taxes. And none of which, or very little of which is finding its way to the benefit of the common man, the ordinary man, the labor organization man, the man who produces this. Do you think you have mentioned these people do you think that the Du Pont Co. believes in free trade?
Mr. SINSHEIMER. I have no idea what the philosophy of the top management of the Du Pont Co. is.
I think that their theory in opposing this legislation is completely different than mine. Their theory in opposing this legislation is they are consumers. And from what they tell me they are afraid if imports are excluded they won't be able to get any fluorspar.
Senator ALLOTT. Well now Mr. Lindher of that company, Samuel Lindher, recently made a statement about free time. And he said this:
This theory, free trade is a wonderful thing. But to make it work we would have to have a perfect world; one in which all wage rates and living standards were comparable. Quite obviously this is not the world we live in.
Would you agree with that?
Mr. SINSHEIMER. Not at all.
Senator ALLOTT. You would agree that this is not the kind of world we live in?
Mr. SINSHEIMER. Absolutely not.
Senator ALLOTT. And so if we carry our analogy of "free trade" to its logical conclusion, and your belief, then it must not only apply to raw materials which come into this country, but it also must be applied to the products which Dow Chemical, Du Pont, and Allied Chemical and all the rest of them find themselves.
Mr. SINSHEIMER. Absolutely.
Senator ALLOTT. So, in turn, if we adopt this principal of free trade they in turn would have to compete with cheap labor no matter what it produced and imported in this country.
Mr. SINSHEIMER. That is the situation today; yes.
Senator ALLOTT. And in your case with your company you do live on free trade?
Mr. SINSHEIMER. Well, the company does; yes.
Senator ALLOTT. Now, with respect to the production situation in this country, are you aware that the milling processes of the companies that you mentioned in this country, not the captive ones, are milling the products of many small independent mines?
Mr. SINSHEIMER. I have heard that they were. I didn't know that they still are.
I have heard a while ago that they were buying ore from some of the small mines in Kentucky.
Senator ALLOTT. Now, if the reserves in this country are as inadequate as you feel that they are and the consumption of fluorspar is going to grow in this country in the way in which you have described in your statement, wouldn't it be a fact that even with this, that the imports of fluorspar into this country in the next 10 or 15 or 20 years or however far you want to project it, could grow to some considerable proportions way beyond the point they are now?
Mr. SINSHEIMER. That may be; yes.
Senator ALLOTT. You wouldn't say that was impossible?
Mr. SINSHEIMER. Oh, no. I would say it is entirely possible. Senator ALLOTT. Now, you have also mentioned the fact that certain of these companies, including companies who run captive operations, have gone to Mexico in your statement for reserves.
Now, being honest and frank about it, isn't the reason that these companies have gone to other countries to buy reserves, because if the present situation prevails and continues, the only way they can stay in the fluorspar industry is to take advantage of the cheap labor abroad?
Mr. SINSHEIMER. No, I don't think that is true, Senator, because there are some companies that have bought reserves in Mexico such as the Du Pont Co. who have never produced fluorspar. Now, they didn't go down there for cheap labor. They went down there, according to their geological people, to own some property down there in this country that has the world's largest reserves, according to most sources, as a backup, so that they are sure they are going to get fluorspar.
Senator ALLOTT. Well as a processor, which it is, of fluorspar-
Senator ALLOTT. Yes.
Mr. SINSHEIMER. It is a consumer.
I wouldn't say it is a processor. Senator ALLOTT. All right. It is a processor of the ultimate product.
Mr. SINSHEIMER. Yes. Freon.
Senator ALLOTT. A processor of fluorides of one sort or another. They have an interest in gaining long-term access to cheap fluorspar, do they not?
Mr. SINSHEIMER. Well they certainly would; yes.
Senator ALLOTT. And I can't believe, and I am sure that you don't either, that they are wholly impelled in their present actions by going
there for the sole purpose of finding reserves but rather under the present trend of things they are simply going to find themselves a method and a way of procuring cheap fluorspar.
Mr. SINSHEIMER. Well I would disagree heartily with that, Senator. I have done business with the Du Pont Co. since 1953. And I know that their philosophy of buying fluorspar has always been done where the price was of secondary importance.
The importance was the continuity and reliability of supplies. Senator ALLOTT. Well why do the captives keep mining if they are so concerned about the depletion of reserves?
Mr. SINSHEIMER. I think that is one reason that you will find, Senator, that most of the captives have gone to Mexico to get more reserves; Alcoa, Pennsalt have reserves in Mexico.
Senator ALLOTT. I am sorry that I must go to another meeting here. But how far is it from the Mexico production to any point in the United States where fluorspar is used?
Mr. SINSHEIMER. I don't know the answer to that, Senator. Senator ALLOTT. Do you know what the distance is to Northgate in Colorado?
Mr. SINSHEIMER. In miles, no. But I know the freight rates. Senator ALLOTT. Do you know that the distance from the production in Mexico is I believe further than the distance from Northgate to almost any given point of consumption in the United States with the exception of that which would be in the southern part of the country? Mr. SINSHEIMER. Well, my knowledge that I have heard about freight rates as far as Mexico is concerned is that in Mexico it really doesn't make too much difference how far it is, the freight rate is almost the same.
It isn't proportionate as it is in the United States.
Senator ALLOTT. I just have one other thing, Mr. Sinsheimer. And I must take a little exception to one thing in your statement. And I am sorry to say this. But I don't like your reference in your statement to the use of "flippant," because it cannot escape applying to the present acting chairman of this committee.
Let me assure you, both as a practicing lawyer of at least as many years as yours, and as a member of the U.S. Senate, that there is nothing flippant about the introduction of this legislation. And there is nothing flippant either about my belief that if the present rate is continued and the present trend is continued that we are getting ourselves in this country in the position which can vitally affect the national welfare of this country.
And I assure you that there is nothing flippant in the many hours that have spent on this legislation, not only in its preparation, but also in attending the hearings and hearing the various people, all of whose opinions I respect and I respect their right to them, even though I may disagree with them.
Mr. SINSHEIMER. May I say, Senator, that the use of the term certainly did not intend any personal connotation on the acting chairman of the committee or any other member of this committee.
Senator ALLOTT. Well it is an unfortunate term. And I just want to say that in the connotation in which it is used, it can hardly fail to apply, as I have stated-and I want to make my position very clear.