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Mr. ASPINALL. That works both ways. Historically, producti might be one thing and production after the date of approval of t act for leasing might be another thing.

Mr. EDMONDSON. I think this: It is my understanding in the t state area a number of small producers have been so hard up th haven't been able to keep their leases alive and a number of the have lost their leases and would have to come in and negotiate leas after the passage of this bill.

I have not made enough legal study of this language to analy what the effect of the language would be in that situation, but I thi the chairman would like to say in a situation like that they shou not be allowed to obtain once again a lease and to operate.

Mr. ASPINALL. The chairman did not want to say anything, just wanted to understand.

I think the explanation made by Mr. Kiser is what we had la

year.

In other words, apparently most of the small producers, at lea in the tristate area, are lessees.

Mr. KISER. Subleases.

Mr. ASPINALL. I would say most of the producers of all categori were lessees, most of the land is leases by the big corporation as we as the small companies.

Mr. KISER. Yes. I might add one more thing to that. The fir lease in my case, which is the Eagle-Picher Co., would not qualif but due to their negotiations with the Indian Department there an here to get an amendment to their, shall we say, master lease-th amendment would call for lesser royalties and so on and so forththat negotiations in trying to acquire the amendments they hav withheld our subleases, including mine and I have been in the min ing business 13 years.

I have one lease that adjoins that that is a direct lease that Eagl Picher has nothing to do with.

But when you say you have to qualify as of January 1 and so o and I have had this lease-even though I have mined the property I own the property, and equipment, and the ore broken in the groun and so forth, I have no sublease on it today.

There are other fellows who may have lost a mine due to floodin, or something. They are all qualified miners and have been in th business all the while and I think they should be permitted due t their qualifications to go into another mine somewhere with a new sublease.

That is why I really like this 7-year clause.

Maybe I would want to tighten the 7-year clause up a little.

I am like Mr. Wilson saying yesterday we don't want to put the doctors and lawyers or everybody else in the mining industry, and don't want to have to pay two dollars to one on this thing.

It is going to be a little hard to divide as it is.

Mr. EDMONSON. Are there any further questions?

Thank you, Mr. Kiser.

Mr. KISER. Thank you, Mr. Chairman.

Mr. EDMONDSON. Our next witness is Mr. William Waldeck, of Montrose, Colo., representing the individual mining companies and operators, including Standard Metals Corp., Moab, Utah.

We are pleased to have you before the committee, Mr. Waldeck.

STATEMENT OF WILLIAM G. WALDECK, MONTROSE, COLO., REPRESENTING INDIVIDUAL MINING COMPANIES AND OPERATORS, INCLUDING STANDARD METALS CORP., MOAB, UTAH

Mr. WALDECK. Thank you very much, Mr. Chairman.

As you mentioned, my name is William G. Waldeck, and I live in Montrose, Colo., where I am attorney and my practice of law entails largely representation of people who are engaged in the mining industry.

In western Colorado, as many of you on the committee know, is a historic mining area in the classification of the Mountain Mining West.

People that I have represented and do represent here include a company which is Standard Metals Corp., which I would term a small operator, although it has a mill of capacity of some 700 tons here today and it supplies the only custom milling outlet I know of in all of western Colorado.

In addition, I represent people that are just leasers, as we have heard talked about here, perhaps a man and his partner operating a mine and supplying ore to a custom mill.

Inasmuch as the problems of the mining industry differ from one geographical area to another, and because the definitions of what amounts to a small miner may have certain effects upon my area, I wish to explore here today some of the impacts which I think may well occur to the mining industry in the West if this bill is enacted. Before directing my attention to the specific effects which I believe this bill may have, however, I should like to preface my statement with just a few general views about the cause-and-effect aspects of depressed metals mining industry.

I think it has been made abundantly clear here that everyone recognizes that the basic cause behind the decimated condition of the mining industry is due to the importation of metals from countries where they can be produced at a much smaller cost than in the United States here.

One of the national aims, as we all know, that the United States has rightfully pursued is to assist the development of underdeveloped nations.

There have been technical assistance programs, there have been grants in aid, and other programs which have tended to develop underdeveloped nations.

Now, we all know that the first step in the development economy of underdeveloped nations is national resources. Having spent money and given assistance in creating mines and mine production in other countries, then we are faced with the problem, Are we to deny the produce from those nations a share of our market?

If we do we have achieved very little in assisting underdeveloped nations.

Because of this the mining industry has again and again run up against what seems to be almost an irresistible policy decision that we must supply an increasingly large portion of our market to foreign countries.

Now, it seems to me that there are other values, though, that are necessarily just as important and that is to maintain a reasonable

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standard of life and a reasonably active national resources industry within our own country.

We have two possibilities there, a decision which must be made in balance, it seems to me between supplying a market for the newly developing nations and on the other hand, to try to maintain the type of standard of living, the safety factors in your mines which we demand for our workers at the same time.

To me, now, it does not seem at all unfair that the domestic mining industry should ask just a half of that market, which it has never been able to have in the last few years.

The policy was that we were to have half, but the quota system has not achieved even one-half of our local domestic market for the domestic industry.

So it seems to me that the two policies which should be some of our national aims are completely in imbalance and that therein lies a field in which something must be done.

So it seems to be the basic cause of the problem we are now discussing here today, that the committee is considering here today, is an excessive importation of metals produced abroad, many of which have been capitalized by our own money through taxation and appeals to maintain an open market for those commoditions here.

It would seem to me that if that is the policy, our national policy, then, certainly, it cannot fall on the decimated shoulders of the mining industry alone to support a policy that affects the entire company.

I don't see how the mining industry alone can fulfill that goal of assistance to underdeveloped nations.

Therefore, if we cannot approach this problem from rigidly enforced quotas and from tariffs, then I guess we are left with distasteful prospect of subsidies as the only answer.

the

The approach which is being considered now is one to try to assist group which is on the very bottom rung of the ladder as far as the mining industry is concerned, and certainly that is usually the group that needs the first, immediate, forceful help.

And yet I think it behooves us to consider what effect that will have on other segments of the mining industry and welfare of the miner, the mineworker, the mine operator, in general.

As I mentioned, I think that the problems differ in the mountain west from what they do, let us say, in a portion of the tristate area. First of all, you have different factors which affect your production in the West, different problems, such as the mines are usually deeper, the mines are usually wet, they are usually in high rugged terrain, where you have weather conditions to consider.

In order to produce, a rate of mining production must be established which will allow reasonable amortization of certain financial costs.

For instance, if you have snow removal problems 6 months out of the year, largely that is a fixed cost whether you bring down 10 tons or a thousand tons a day.

By the same token, if you have water which must be pumped from a deep shaft, you have a financial cost regardless of the rate at which you mine.

In addition to that, in our area you have heating problems. But one of the most significant problems of all that disturbs me is the question of custom milling.

Unless the segment of mine which is next above the small leaser group can be kept alive in our area, this bill will do us no good whatsoever, unless a person has a place that he can ship his ore to then he is not going to be able to operate regardless.

Mr. EDMONDSON. Could I interrupt at that point, Mr. Waldeck, just to get a point in the record on that particular plane.

Mr. WALDECK. Yes.

Mr. EDMONDSON. I was told in Denver just a few weeks ago that your last smelter for lead and zinc in Colorado has just been shut down; is that correct?

Mr. WALDECK. That is correct.

Mr. EDMONDSON. So you no longer even have a smelter going for lead and zinc in your State of Colorado; is that correct?

Mr. WALDECK. That is correct.

The American Smelting & Refining smelter at Leadville has now been closed entirely. The smelting business is another problem, however, Mr. Chairman.

Mr. ASPINALL. How many mills do we have?

Mr. WALDECK. Are you talking about custom mills, Congressman? Mr. ASPINALL. Yes.

Mr. WALDECK. In all of Colorado?

Mr. ASPINALL. Yes.

Mr. WALDECK. I can only answer for western Colorado, that I am familiar with.

In the area which happens to be in the heart of your congressional district as you well know, we have only one custom mill which is the Shenadoah mill. Camp Bird mill has started in operation again, but accepts no custom ore.

Eldorado, owned by Umont Co., accepts no custom ore.

Therefore, the only custom ore outlet for the standard metals creation is at Silverton.

Mr. EDMONDSON. And for any of your products you face this long haul in getting to a smelter?

Mr. WALDECK. The nearest smelter outlet for lead is Tooele, Utah, and El Paso, Tex., for zinc and the freight rates are substantial.

If you are familiar with freight rates, $10.32 a ton is the lowest freight rate we have for outbound cargo from Silverton.

Addressing myself again, if I may, to the problem of what may happen to the mining industry in the West if this bill is passed, let me advise you of some of my fears:

Standard Metals Corp. has recently rehabilitated and readied the Shenadoah mill for operation. It has been inoperative since the substantial break in prices which occurred in 1951.

The Shenandoah mill operation and mines, with the exception of a little tourism, is the sole source of revenue in all of San Juan County, Colo.

There is not one acre of agricultural land. This is true Rocky Mountain area.

In 1952 there were approximately 25 small shippers around in the mountains that were composed of anything from a man and his partner to a group of three or four men that in the summer months would shift to the mill.

In addition the mill had its own mine for which it had to have continuity of operation through the entire year as every one is awa here.

You don't operate a mill and then shut it down.

Standard Metals is ready to reopen that mill.

However, the recent drop in prices makes it impossible.

If a measure is taken by Congress which could have the effect lowering the price even more, we will have given the coup de grac The Standard's operation and I think to the lead-zinc mine smaller operators in all of western Colorado, large parts of Utah, M Wilson himself mentioned a mining operation in Utah which is losin some hundreds of thousands a year merely because the operator hoping against hope there is going to be a better tomorrow.

If we face that operator with additional losses that is going to clos The operation in Pioche, I heard one of the Congressmen mention is shut down.

A further weakening of prices will prevent its reopening.

Now, it seems to me that if a bill is passed which does not strike a the cause of the depressed market and creates additional productio by subsidizing a small operator, we are liable, we are running risks o completely destroying the next segment above on the economic ladde and preventing them from going into operation, closing those that ar now in marginal operations or losing money, the loss of additiona revenue to the towns depend on those operations, including Silverton including Pioche, and other places.

Therefore, I hope that the committee will seriously consider whethe or not this is an artificial respiration or a salve to the itch.

It seems to me that if this is artificial respiration it is perhaps arti ficial respiration given while the patient is still underwater, because o the fact that we are not going to be breathing new life into it; we ar to be sucking more water into the already overloaded lungs of th patient.

Certainly I feel a concern for those who are on the very lowes rung of the ladder and need the assistance and need the assistanc

now.

I live in an area where the miners may well be qualified, with per haps apologies to Dr. Galbraith, it is not so an affluent a society of miners of the Rocky Mountains West.

However, it would seem to me that the approach must be one that will strike at the basic cause.

I greatly fear that a stopgap measure too often becomes the only measure arbitrary measure becomes the minimum measure.

Perhaps the administration-we believe that perhaps this is a bill that can be gotten through, because there has been indication by the present President of the United States that such a bill would be pissed.

1 fear then that if we do get a bill passed it may do more harm than good to the entire industry, that what might happen is that then the duty with respect to that industry has been discharged and other maiters will require the energies and attentions of the administration and we will move on in a condition which will be disastrous. I want to again emphasi e it is the position of the small

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