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both, but only on acid grade fluorspar. It could not consider the plight of metallurgical grade fluorspar. It is not eligible for an "escape clause" investigation because there has been no reduction in duty. Any favorable recommendation by the Tariff Commission would only benefit half of the industry. It would, in addition, create injury abroad among our friendly foreign producing nations.

I believe that the solution we are seeking lies in the provisions of S. 1285. An examination of the legislation will clearly demonstrate its fairness. It is fair for the domestic fluorspar producer, the foreign fluorspar producer and the domestic consumer. No injury is created abroad, and at the same time the wrong which is presently being inflicted at home on the American producer is righted.

As a result of the closing of the fluorspar mines and mills in Kentucky, our fluorspar production has declined, bringing the inevitable consequences of unemployment and economic deprivation. This condition, however, was not brought about by a decline in the domestic consumption of fluorspar. Far from it. The domestic consumption of fluorspar has increased at a phenomenal rate, particularly acid-grade fluorspar, and certainly every criteria we have indicates that the future rate of consumption will accelerate.

In its statement before the Office of Civil and Defense Mobilization, the Fluorspar Importers and Producers Institute, through their spokesman, Mr. Monroe Karasik, restated the testimony given to this subcommittee last year when the minerals stabilization program was under consideration. Mr. Karasik stated, "However, we are sure that the Director (of OCDM) will find that on one basic matter, there is complete agreement among all parties-the applicants, the Importers Institute, Government agencies, and other experts in the field. This is, that domestic demands for, and consumption of, fluorspar will, within a relatively short time, require maximum production from all domestic and foreign sources."

In support of this view, the Importers Institute quoted from a paper presented by one of the most respected authorities in the fluorspar field, Mr. Joseph L. Gillson, chief geologist with the E. I. du Pont de Nemours Co., and a former vice president of the American Institute of Mining Engineers. This paper, delivered in 1957, contained this statement: "The present consumption of about 550,000 tons of fluorspar of all grades in this country is expected to grow to 1 million tons by 1965, and probably sooner. In my opinion, it is not the producers who should be worrying about whether they are going to sell their fluorspar, but rather the consumer as to where he will obtain his supplies."

Even with this favorable future, the domestic production of fluorspar will cease unless we find some way to bridge the gap which will exist between today's requirements of fluorspar and the surplus of foreign supply available and the time when domestic demand equals or exceeds available supply. I believe that S. 1285 provides a fair and equitable manner of solving this problem.

I do not wish to delve into a mass of statistical data at this time for I know the committee's capable staff will develop the required statistical information on the fluorspar situation. I should, however, like to point out just one figure in connection with acid-grade fluorspar as an example of the situation confronting the American producer. Imports of acid-grade fluorspar for 1957 amounted to 412,000 tons. Domestic consumption that year was 334,000 tons. It is estimated that foreign capacity to produce acid-grade fluorspar is now in excess of 600,000 tons, nearly all of which is available to the domestic consumers.

So, it must be apparent to everyone that if we are to have domestic production of fluorspar we must, as we propose to do in S. 1285, provide for a sharing of the market between domestic and foreign producers, absorbing in the meantime by use of barter the foreign surplus up to their average rate of imports for the years 1956-58. In addition, we propose to give the foreign producer 75 percent of each year's increase in consumption until he attains a level of commercial imports for consumption equal to his 1956-58 average. Thereafter, he would receive 60 percent of the increase in consumption. I feel that this is a reasonable and generous solution.

My home State of Kentucky has been richly endowed by nature with large deposits of minerals, in addition to fluorspar. These minerals, coal, oil, zinc, silica sands and clays, among others, have contributed much to the economy of our country, both in peacetime and wartime. These mineral industries, as well as almost all others in the United States, find themselves in the same position as the fluorspar industry. They are unable to cope with the problem of import competition. They are watching this pilot bill with the hope that it may provide an answer to this problem. I believe the approach of S. 1285 is a proper

one in that it provides for a division of the domestic market by domestic and foreign producers concurrent with safeguards for the domestic consumers.

In view of the fluorspar industry's sadly depressed economic status and the remedial aspects of S. 1285, I again wish to strongly urge favorable action by this subcommittee.

STATEMENT OF HON. JOHN SHERMAN COOPER, A U.S. SENATOR FROM THE STATE OF KENTUCKY

Mr. Chairman and members of the committee, I appreciate your permitting me the opportunity of appearing before this distinguished committee and making known my views on the pending legislation, S. 1285. I heartily endorse it, and I urge favorable action upon it by your committee.

The fluorspar industry is a unique one. Its problems are somewhat unusual. The product, fluorspar, is strategic and critical. It is absolutely essential in peacetime as well as in times of war.. .Only 5 pounds of metallurgical grade fluorspar, worth about 2 cents per pound, is required to produce a ton of steel; yet we must have it. A ton of aluminum simply cannot be produced without the use of approximately 150 pounds of acid-grade fluorspar which under this legislation must sell for less than 3 cents per pound. The atomic energy program cannot operate without fluorine derived from acid-grade fluorspar. This same fluorine used as an oxidizing agent forms the most perfect rocket or missile fuel attainable, short of atomic power. Fluorspar enters into our entire industrial economy in freon gas for refrigerators, fluoridation of water, propellants in aerosol bombs, down to the coating of lenses. Though low in price, it is absolutely essential.

And

This multitude of uses has resulted in an enormous increase in demand. in the new uses which are being developed daily, this rapid rate of increase in consumption will continue and probably accelerate.

Notwithstanding all of this, the domestic fluorspar industry is prostrate. Only three captive producers continue to operate and one independent producer on a greatly reduced scale. The reason for this situation, or rather paradoxpoverty in the midst of plenty-is simply due to the fact that imported fluorspar, far above domestic requirement needs, is available at prices below the domestic cost of production.

This availability has for the most part been brought about by the actions of our own Government. We have encouraged the production of fluorspar abroad. We have financed mill construction and mine development. We awarded stockpiling contracts. The result has been a tremendous increase in foreign production. The inevitable result of which has been the almost total destruction of the domestic fluorspar industry.

In Kentucky, which was once a great fluorspar-producing State, we now have one small mine and mill going-a captive. A once-prosperous section of the State finds itself in almost destitute circumstances. There is no alternative employment in the fluorspar area in western Kentucky. In my visits there, I have been deeply moved by the destitute circumstances in which the people find themselves. The day on which surplus food is distributed to the needy is the one bright spot in their lives today. In addition to food, they need clothing and other necessities, but these are not available. This condition exists although there is great demand for the products of their labor-fluorspar. Fluospar is needed, but it is obtained from abroad cheaper. That, then, is the problem. What, then, is the solution?

I believe S. 1285 provides a suitable answer. It is offered in the spirit of compromise, and I am proud to be a cosponsor of the measure. S. 1285 is an attempt to assist the domestic fluorspar producer without creating injury abroad. It also seeks to provide protection for the domestic fluorspar consumer. I believe, if given an opportunity, it would do all three. But, in addition, S. 1285 contributes to the national security by providing for domestic production of fluorspar and also by adding some tonnage to the supplemental stockpile, an exceedingly wise move, in my opinion, for I am reminded that Dr. Wernher von Braun advised the Congress that in the interests of national security "we cannot have too much fluorspar."

There are possibly other alternatives for the industry, none however satisfactory. They could again go to the Tariff Commission. They have been there twice before. But only one part of the industry, the acid grade segment, is eligible for relief. The other half, the metallurgical grade segment is not eligible for there has been no concession granted; no reduction in the statutory rate of

duty. Even if relief were granted via the Tariff Commission, one-half of the industry, the metallurgical producers, would still need help. But the Tariff Commission could only recommend an increase in duty or quotas or both, and nothing more. It lacks further authority. Such a recommendation by the Tariff Commission would create hardship abroad. Only the Congress can treat the problem in the broad manner here proposed. We can limit imports for consumption and thus permit domestic production of fluorspar. We can at the same time provide for the absorption through barter of resulting surpluses, thus avoiding injury to our foreign friends. We can, as we propose to do, permit the importer to have a larger share of the annual increase in consumption of fluorspar than we give to the domestic fluorspar producer until barter becomes unnecessary. Finally, we can protect the interest of the consumer by assuring him of an adequate supply of fluorspar at a reasonable price. Only the Congress could provide the suitable solution proposed in S. 1285 for the fluorspar problem.

These are a few of the reasons why I cosponsored S. 1285 and why I now urge favorable and speedy action by this committee and this Congress on S. 1285.

U.S. SENATE,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE.

Hon. JAMES E. MURRAY,
Chairman, Committee on Interior and Insular Affairs,
U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: Enclosed is copy of Senate Joint Memorial 20 of the Alaska State Legislature urging legislative assistance to domestic fluorspar miners. I am sending this on to you for inclusion in the record of the hearings now being conducted on this problem.

With highest regards, I am,

Sincerely yours,

E. L. BARTLETT.

SENATE JOINT MEMORIAL 20 IN THE LEGISLATURE OF THE STATE OF ALASKA, FIRST LEGISLATURE, FIRST SESSION

To the Honorable Neil H. McElroy, Secretary of Defense; the Honorable Fred A. Seaton, Secretary of the Interior; the Honorable Royce A. Hardy, Assistant Secretary of the Interior for Mineral Resources; the Honorable C. O. Mittendorf, Administrator, Defense Minerals Exploration Administration; the Honorable E. L. Bartlett and the Honorable Ernest Greuning, Senators from Alaska; the Honorable Ralph J. Rivers, Representative from Alaska: Your memorialist, the Legislature of the State of Alaska in first legislature, first session assembled, respectfully submits that:

Whereas fluorspar is a vital ingredient in rocket and missile production, providing the most perfect oxidizing agent for such equipment; and

Whereas the civilian economy also requires large amounts of fluorspar for the production of steel, aluminum, hydrofluoric acid, atomic energy, and fluorine gas, bringing the rate of consumption of this mineral to a new high throughout the Nation; and

Whereas in the midst of this demand market almost all fluorspar mines in the United States have been forced to close because of excessive foreign imports of this mineral; and

Whereas such closure is dangerous to both the defense and economy of the Nation; and

Whereas legislation is now pending in Congress to keep open the U.S. fluorspar mines by providing a formula dividing the American market between American producers and foreign producers so as to assure continued domestic production; and

Whereas the western area of the United States is rich in fluorspar, particularly the Seward Peninsula area of the State of Alaska: Now, therefore

Your memorialist urges that all possible steps be taken to enact the necessary legislation to keep open American fluorspar mines, assuring a domestic supply and that investigation of the fluorspar potential of Alaska be undertaken.

STATEMENT OF CAMARA MINERA DE MEXICO RE S. 1285

This statement is submitted on behalf of Camara Minera de Mexico which is the trade association of the Mexican mining industry. The camara is composed

of members in all branches of the mining industry of Mexico. Mining represents one of Mexico's largest industries, giving employment to many thousands of employees. Thousands of families depend upon the fluorspar industry alone for a livelihood.

Mexico is the United States' largest supplier of fluorspar, both acid grade and metallurgical.

For the foregoing reasons the Camara Minera de Mexico has been quite concerned about current efforts to restrict the importation of fluorspar into the United States. We have studied S. 1285 with great care and have arrived at the conclusion that its enactment would not be in the best interests of the United States or of its good neighbor the Republic of Mexico. Moreover, the camara is quite alarmed at the clear indication that the enactment of import restrictions on fluorspar is but the first step in a program which would cripple trade between our two countries in a wide variety of other minerals.

At this stage of the proceeding there is no reason to burden the record with a full restatement of the detailed clauses of the bill which have been covered fully in the hearings. It is sufficient for present purposes to point out very briefly the reasons why this is not good legislation.

To begin with, we do not believe that this legislation is in the best interests of the United States. Although a small group of fluorspar producers, representing only an infinitesimal portion of the U.S. labor force, have long been seeking special protection for their high-cost operation, other U.S. producers have not found it necessary to seek the same special subsidization.

The fluorspar consumers of the United States are, of course, opposed to this legislation since it represents added cost without value to them. This added cost merely accelerates the inflationary trend, with its incipient threat of recession, which the U.S. Government is seeking to control. This is a very serious problem which necessarily has an impact upon the economy of Mexico which is so closely intertwined with that of the United States.

Moreover, the proposed legislation is another step in the direction of trade restrictions against Mexico which we of the camara consider deplorable. Mexico is one of the largest customers that the United States has, and depriving Mexico of dollars with which to buy U.S. goods and services can only do damage to both countries.

It has been suggested that the proposed legislation would have no substantial adverse effect upon foreign suppliers. This is really not the case. The legislation under consideration would have a very damaging impact upon Mexico in the following ways.

(1) Assuming that no fluorspar is produced and exported to the United States by countries which did not do so in the years 1956, 1957 and 1958, the maximum amount per year which Mexico could export to the United States would be 318,181 tons (all grades), including barter contracts, until the U.S. import rate exceeds the average rate for the years 1956, 1957, 1958.

(2) In point of fact the proposed legislation could set back Mexico's fluorspar trade with the United States by 8 years. In 1957 Mexico exported 366,812 tons (all grades)) to the United States. If the proposed legislation should be enacted it might be 1965 or later before Mexico's quota would equal the 1957 rate. The barter provisions of the bill do not afford any assured relief for this problem since they are not mandatory. Moreover, there are other administrative and economic problems relating to barter which make this an unsatisfactory solution. (3) Exportation of acid-grade fluorspar would be especially affected. Assuming that the acid grade consumption in the United States in 1960 will be 400,000 tons, Mexico's quota could not exceed 88,800 tons of acid grade-which is 69,853 tons less than the amount exported by Mexico to the United States in 1957. If this proposed quota were in effect now, it is estimated that the Mexico quota for 1959 would be less than 60,000 tons of acid grade-more than 40,000 tons less than was exported to the United States in the recession-year of 1958. (4) Mexico, which has the largest and highest grade fluorspar deposits of any country in the world would be forced to curtail the production of acid grade fluorspar and would be forced to sell most of her fluorspar production as metallurgical grade. This would be sheer economic waste caused by artificial trade restrictions.

(5) The barter device as incorporated in the proposed legislation is not a satisfactory solution. Mexico has a very seriously unfavorable balance of trade with the United States. Moreover, in recent months Mexico's dollar gap problem has increased significantly. Thus no matter how good the intentions and whatever the merits of barter provisions of S. 1285, it could not provide effec

tive relief from the damaging effect of this type of legislation upon the Mexican economy.

There are many other important reasons why the United States should not take a backward step in its trade relations with Mexico at this time. It is selfevident that Mexico, which has more than 50 percent of the known fluorspar reserves in the world, must be the primary source of this strategic mineral in the event of war emergency in the United States. Moreover, the Congress of the United States should bear in mind that Mexico is the third largest customer in the entire world for U.S. goods and services. Certainly Mexico cannot continue to sustain this level of purchase from the United States if its source of dollars is curtailed.

Mexico has been and continues to be an enthusiastic partner in the long-standing good-neighbor policy and in the program of Western Hemisphere solidarity which the United States has fostered. The Mexican people desire to continue to go forward in mutual cooperation with your great country.

In conclusion the Camara Minera de Mexico desires to thank the Chairman and members of the Senate Committee on Interior and Insular Affairs for the opportunity of submitting this statement. It is recognized that our views may not be entirely consistent with those of some members of the committee, nevertheless, we are confiident that they will receive fair, full and impartial consideration.

Respectfully submitted.

JOSÉ LUNA Y PARRA.
MANUEL DAVILA SANTOS.

TABLE I.-Fluorspar imported to United States for consumption during the years 1956, 1957, and 19581

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1 Figures are from U.S. Bureau of Mines Reports. They are not necessarily the figures which would be used for calculating import quotas. Large quantities have been shipped to the Government stockpile and consumption and stockpile figures are not clearly differentiated.

NOTE.-Mexico, all grades, 954,344 tons=64.4 percent of total imports of all grades.

TABLE II.-Fluorspar imported for consumption in United States during the years 1956, 1957, and 1958

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