Mr. BROADGATE. I know you are overdue at a meeting Mr. Chairman, and I feel if there are any other questionable points raised in Mr. Sinsheimer's statement that may not have been covered by you, they have already been answered by competent witnesses. I have no questions. Mr. REDWINE. Mr. Chairman, inasmuch as with the conclusion of this witness' testimony there will be no further hearings on this bill, may I ask permission of the chairman for the staff to insert in the printed record when it is printed certain statements, documents and letters that are pertinent to this inquiry? Senator ALLOTT. That will be done. The meeting will be closed. (Whereupon, at 3:38 p.m., the committee was adjourned.) APPENDIX (The following communications and statements were subsequently received and ordered printed :) NATIONAL COUNCIL OF AMERICAN IMPORTERS, INC., Hon. JAMES E. MURRAY, SIR: Our organization wishes to register its strong opposition to the bill, S. 1285, sponsored by Senator Gordon L. Allott which is now under consideration by your subcommittee. This bill proposes to authorize quota allotments calculated to restrict the importation of all grades of fluorspar to about half of the domestic consumption. The National Council of American Importers, which is the representative organization of our import trade as a whole, has always been firmly opposed to the regulation of any class of imported materials or commodities by quotas rather than by appropriate tariff rates. May we respectfully call the attention of your subcommittee to the statement contained in the Report of the Subcommittee on Foreign Economic Policy of the Joint Committee on the Economic Report of the Congress, issued on January 5, 1956, with which we thoroughly agree, and which stated as follows: "In time of war, quotas on imports are the counterpart of necessary domestic controlled allocation. But, carried over to normal times, quotas are designed for a purpose similar to tariffs. They are worse because they may be insensitive to changes in the volume of demand, and to changes in costs of production and prices, and are almost always discriminatory in assigning shares of the market. A quota has the purpose of boosting the market price just as does the tariff. If consumer demand grows, except by specific administrative action there can be no increase in imports as even a tariff allows, and the only alternative is for the price to rise even more. Quotas imply the assignment of shares, and this inevitably means that choices must be made among countries of supply and individual traders. The opportunities for favoritism, for economic strangulation, for international hard feelings and reprisal, and for personal corruption are unlimited." The bill, S. 1285, is not only objectionable on these general grounds, but it is also clearly special interest legislation designed to protect the domestic fluorspar industry from imports. In this case, the domestic industry has at its disposal the administrative procedures provided by the Congress to meet such situations. These are the escape clause procedures provided for in section 7 of the Reciprocal Trade Agreements Act and the national security provisions provided for in section 8 of that act. In fact, there were two escape clause investigations on acid grade fluorspar. One was instituted in October 1953 but was discontinued on November 23, 1953, at the request of the applicant. Another investigation under the escape clause on acid grade fluorspar was instituted on August 1, 1955, by direction of the Senate Committee on Finance, but the President decided that no increase in the protective rate of duty was justified. If conditions in the domestic fluorspar industry have changed materially since 1955, the escape clause procedure is still available. At the present time, the Office of Civil and Defense Mobilization is engaged in an investigation of the imports of fluorspar in response to a petition presented by the American Fluorspar Producers Association. Notice of this investigation, dated February 9, 1959, was published in the Federal Register on Saturday, February 21, 1959. 165 Another objection to the bill S. 1285 is that it is common knowledge that this bill has been put forward by the domestic mineral industry as a trial balloon. We understand that if this bill passes the Congress, and is enacted into law, other bills patterned along the same line will be quickly introduced to restrict imports of other minerals and metals, and possibly some other types of imports. For a great number of years, the Congress has delegated the responsibility for establishing individual tariff rates to the President under the Reciprocal Trade Agreements Act. Under this same act, the President is authorized to increase tariff rates or to establish quotas, when necessary, for the adequate protection of our domestic industries. The enactment of the proposed legislation would be a departure from the present arrangement and, if followed to a conclusion, would mean that the Congress would once again take over all the details of providing suitable protection from imports for our various domestic industries, harking back to memories of the log-rolling tactics of the HawleySmoot days. We also wish to point out that the use of quotas rather than tariffs to regulate any part of our import trade results at once in bureaucratic regimentation by Government agencies. For many years, a special section of the Department of Agriculture has been maintained to administer the quota on cheese. Recently, with the institution of mandatory quotas on petroleum and petroleum products, the Department of Interior found it necessary to establish_an_Oil Import Administration and an Oil Import Appeals Board within the Department. If S. 1285 and similar bills are enacted, we can look forward to having a Fluorspar Import Administration and a Fluorspar Import Appeals Board, and after that perhaps a Zinc Import Administration and a Zinc Import Appeals Board, a Lead Import Administration and a Lead Import Appeals Board, etc. If this takes place, important sections of our American industry who require these imported materials would be tangled up in a bureaucratic jungle before they could obtain their fair share of quota allocations. The uncertainties involved in quota restrictions are unpredictable, and constitute a burden on international trade far beyond the protection to which any domestic industry is entitled. They also result in serious psychological repercussions in foreign countries, and tend to frustrate the attempts of our own Government to persuade those foreign countries from employing the use of quotas as a form of restriction against our exports. Respectfully yours, Hon. JAMES E. MURRAY, HARRY S. RADCLIFFE, Executive Vice President. OZARK-MAHONING CO., Tulsa, Okla., April 18, 1959. Chairman, U.S. Senate Committee on Interior and Insular Affairs, New Senate Office Building, Washington, D.C. MY DEAR SENATOR: As you will recall, I appeared Monday morning, April 13, 1959, at the hearing before your committee on S. 1285, a bill to provide for the preservation and development of the domestic fluorspar industry. Later during and hearing on Monday and Tuesday, April 13 and 14, others appeared in opposition to S. 1285 and made a number of statements directed to our Northgate, Colo., fluorspar plant. For example, Mr. Charles W. Mitchell, vice president and general manager, Nyotex Chemicals Division, Stauffer Chemical Co., Houston, Tex., submitted on page 6 of his written statement the following comment: "The Northgate plant was built in 1952 by this largest U.S. producer under a certificate of necessity, and in addition received a Government contract to put fluorspar in the national stockpile at relatively high prices. Upon expiration of the stockpile agreement, the plant was closed. To my knowledge, no flourspar from this plant ever entered the commercial market because of high production and transportation costs. There is reason to believe that company already has amortized the Northgate plant." Mr. Warren J. Sinsheimer, vice president and general counsel, and a member of the board of directors of Ivanhoe Trading Co., Inc., commented in his written statement in part as follows: "The Ozark-Mahoning Co., knew when these facilities in Colorado were opened that they were not commercially feasible and they were opened under a Government contract whereby the Government agreed to buy for the stockpile 100,000 tons of acid-grade fluorspar at high prices to enable the complete investment to be amortized." Also Mr. Sinsheimer commented: "There is no justification for these facilities at Northgate, Colo., except in time of national emergency when no other fluorspar is commercially available. These facilities have now been amortized, as I have said before, and OzarkMahoning will not suffer any economic loss by their ceasing to operate since they still have their profitable fluorspar operation in Rosiclare." For the sake of the record, we would like to say here that the above quoted statements lack accuracy, and in effect presume to know more about our company's business than we do. Attached you will find copy of the letter of intent (Contract No. GS-OOP(D)-12085) which our company executed with General Services Administration October 9, 1951. A careful reading of paragraphs 3(a), 3(b), and 3(c) will set forth that the Government expected much of the 100,000 short tons of acid grade flotation concentrates to go to industry, but as I commented in my statement presented Monday morning, April 13, 1959, cheap imports of foreign fluorspar began to make their influence felt so that domestic industry took only 5,000 tons and GSA 95,000 tons. As to complete amortization you may judge for yourself from examining copies of the attached necessity certificate No. TA-NC-8661 our company was granted February 29, 1952, wherein appears the statement, “that 60 percent of the cost of construction, reconstruction, erection, installation or acquisition thereof after December 31, 1949 is attributable to defense purposes." A desire to stick to facts has prompted us to write this letter, and to attach the described documents. The Government and our company believed at the time the letter of intent was negotiated in October 1951, that the facilities in Colorado were commercially feasible. Also, we can scarcely accept the statement that Ozark-Mahoning will not suffer any economic loss by the Northgate facilities ceasing to operate; we believe that all of us will recognize that a shutdown expense of any mining and milling property is a real one and of substantial magnitude. We thank you and your colleagues again for the privilege of appearing before your committee on April 13, 1959. We shall also be pleased to try to furnish you additional information whenever you may call on us. Sincerely yours, C. O. ANDERSON, President. GENERAL SERVICES ADMINISTRATION, Re: Contract No. GS-OOP (D)-12085 with Ozark-Mahoning Co. Mr. FENALON BOESCHE, Ozark-Mahoning Co., 310-314 Drew Building, Tulsa, Okla. DEAR MR. BOESCHE: There are enclosed herewith for your acceptance the original and two copies of the order under which the Ozark-Mahoning Co. will provide for the production and disposition of 100,000 short tones of acid-grade fluorspar flotation concentrates to be derived from the facilities which the company will provide for the purpose of such new production under this order. If the order is acceptable it should be signed by the duly authorized officer of the company in the space indicated on page 4 and the original and one copy returned to Mr. John G. Ford, General Services Administration, 18th and F Streets, NW., room 5133, Washington, D.C. In your letter of September 5, 1951, it is stated that the executive committee of Ozark-Mahoning Co. objected to the provision originally proposed by the Government under which the Government would have had the right for its convenience to terminate the order at any time after 1 year from the commencement date of new production by the giving of 90 days of written notice of termination. Your argument supporting this objection was given favorable consideration and, in consequence, this cancellation clause has been eliminated from the enclosed order. Very truly yours, JOHN G. FORD. |