and Blue Bell mines. During 1935, 1936, and 1937 I leased underground in the Eagle and Blue Bell mine. In 1939 I began leasing at the Colorado and I am presently engaged in leasing at that mine. During these periods of time I have had partners and at one time I have employed as high as six men. My present lease at the Colorado is on a basis where my son and I are partners. We have no employees. We drill our own rounds, muck our own ore, and tram it.

Leasing presents all the problems of a small business. Leasing, like any other independent business, has its ups and downs. At times I have been quite successful financially and at other times I have sustained substantial losses. Because of the low price of metals now prevailing, my present lease is not too profitable, but I recognize that this is the uncertainty which attends all business and I hope for better metal prices.

Leasers are skilled men with substantial investments in equipment. Shortly after my son returned from service in the Second World War, he became my partner and I have tried to teach him to distinguish ore from waste and to identify leads which might open up ore bodies as distinguished from those which my experience has taught me are not associated with ore deposits. My son and I have our own equipment, consisting of a compressor, drills, fittings, and hoses, our investment being approximately $3,000. We go to work and leave work as we wish. Many weeks go by without a visit from the officials or employees of the company which owns the property. The surveyor of the company enters our working place probably not oftener than once a year. The opportunity for profit when prices are not depressed exceeds that of working for wages, provided the leaser has a background of mining, is somewhat of a student of geology, and is willing to work. Mine leasing, like any small business, to be successful requires initiative, judgment, and foresight. It also has its moments of excitement. The possibility of blasting a round which may open a large ore body is constantly present.

Interference with leasing will cause great hardship to leasers and their families. The committee should keep in mind that many successful leasers have reached an age in life where they cannot pass the preemployment physical examinations required by the companies of prospective employees and that any legislation which would interfere with or result in the discontinuance of mine leasing will throw many men out of work. In the Tintic district in Utah there are prob ably 100 leasers. Many of these men are old-time miners familiar with the district and at this time fully able to support themselves under mine leasing. These men take leases in abandoned or marginal mines when their experience leads them to believe shipping ore may be available. By leasing they are able to work as hard or as little as they wish. They do not have to meet rigid company time schedules and may stay away from work without embarrassment or censure.

Lease do not want a repetition of their 1940-44 experience. In 1940 or 1941 there was an attempt by governmental agencies to compel the mining companies to classify leasers as employees. The result was that the mining companies in Utah refused to renew leases until this situation was clarified. Many men were thrown out of work during this period. Ultimately a model lease was worked out which the mining companies and the governmental agencies felt would protect

the company from claims under the wage and hour law, the Social Security Act, and other legislation. Mine leasing was then resumed. The leasers in the Tintic district do not want a repetition of the 1940-44 incident.

If it is feasible, the leasers in the Tintic district desire that the social security law be amended so they may continue as independent operators but permitted to come within the benefits of the Social Security Act as self-employed individuals, the cost of such coverage to be borne by the leasers as an operating expense. The leasers do not desire this status, however, if it must be done at the cost of stopping all mine leasing. The alternative that the leasers suggest is namely a provision permitting them to carry their own social security.

Senator KERR. May I ask you a question there? Do you think that provision should be one that gave them the opportunity and made it optional with them, or which identified them as self-employed independent operators but which compelled them to come under the provisions of social security?

Mr. HOPES. I don't understand, Senator.

Senator KERR. Well, the law could be passed so that either they would have the option of doing it or, although they were self-employed, they would be compelled to do that?

Mr. HOPES. Well, that is possible, too, Senator.

Senator KERR. Now, the reason I ask you the question is that you make the statement, here, that "the alternative that the leasers suggest is namely a provision permitting them to carry their own social security." I gather from that that your recommendation is that the law be written so as to make it optional with them.

Mr. HOPES. Yes; that is, it, Senator.

The CHAIRMAN. You do not think it wise to make it compulsory on the leasers?

Mr. HOPES. No, Senator; I don't.

The CHAIRMAN. Well, sir, you know more about the conditions of your fellow citizens who engage in this kind of work than I do, at least, and perhaps other members of the committee.

You may proceed with your statement.

Mr. HOPES. The Tintic Small Mine Operators and Prospectors Association, of which I am a director and for which I am authorized to speak, has filed with the committee a resolution in this regard.

In summary, mine leasing has existed in the Tintic district for more than a half century. It has worked well, both for the company and for the leasers. It provides work for men who might be physically disabled and unable to obtain work as employees. It results in the recovery of ore which otherwise would be lost to the economy. Leasing should be recognized as an independent business. It offers an opportunity for large profits, as well as substantial losses. We leasers know that if we are classified as employees of the company, leasing will not continue and that many of our best men will join the ranks of the unemployed. The model lease now in use fully protects the leasers from exploitation. The present system is working well and we urge that there be no legislation which will curtail or injure mine leasing.

The CHAIRMAN. Thank you very much, Mr. Hopes, for your statement to the committee.

That completes the call of the witnesses for this morning.

Senator DwORSHAK. Mr. Chairman, before you recess, I should like to ask permission to have placed in the record at this point a letter which I have received from Mr. Donald A. Callahan of Wallace, Idaho, outlining the views of Idaho mine operators on the proposal to change the definition of the term "employee" in H. R. 6000.

The CHAIRMAN. Thank you, Senator Dworshak. It will be entered in the record.

(The letter referred to follows:)

Hon. HENRY C. DWORSHAK,

Senate Office Building, Washington, D. C.

FEBRUARY 25, 1950.

MY DEAR HENRY: I am writing you concerning H. R. 6000, which has passed the House and is now pending in the Senate. I understand that committee hearings on this bill will commence early in March.

This bill, as you know, provides for certain amendments to the social-security law. I am not writing at this time concerning the purpose of the bill in general but only as to one feature of it which is of great importance to the mining industry and also to the entire economy of the country. This is true because the production of minerals and metals means so much to our economy and the national defense.

The feature of the bill to which we take exception, particularly, is that provision which would change the present definition of the term "employee" to include "a lessee or licensee of space in a mine when substantially all of the product of such services is required to be sold or turned over to the lessor or licensor."

The effect of this provision would be to make mine leasers, in effect, company employees. For years the Social Security Administration has been endeavoring to bring this about and have been restrained by the passage of the so-called Gearhart resolution, which defined "employee" in this regard.

This is clearly an attempt of a Federal Bureau to interfere with the natural relationships existing between owner and lessee solely for the purpose of adding new power to their bureau-and also new revenue. Such trends in Government should be definitely checked if for no other reason than to restrain the bright chaps in the bureaus from seeking to create new and unnatural busines relationships and to harass industry. Men who are engaged in the business of producing metals have plenty to do and sufficient problems to face without trying to cope with swivel-chair bureaucrats, thinking up new schemes to enhance the importance of their bureaus.

I say this because the passage of the bill containing the above interpretation would, in the language of one of our operators, have the following effect: "If the proposed legislation should be enacted into law, all mining operations of this nature [meaning leasing] would cease, resulting in the loss of a very large tonnage in mineable ore which could not otherwise be exploited and in addition the loss of employment to thousands of men now engaged in this type of mining operations throughout the country."

This statement is true because the leasing system in this district is used either in abandoned workings of a mine which is presently being operated or in mines entirely abandoned by the owner company. These are marginal operations and do not warrant any added cost, such as social-security and unemploy ment-insurance payments. The lessee in such operations must be kept upon the basis of an independent contractor, taking all the risks and costs due to the operation, or the owner must refuse to enter into the agreement. Besides, it is fundamental that the owner must have entire charge of the operation if he is to bear these burdens. Result: He will not lease the premises. it may be that the contracts call for settlement for ore shipped in the name of the owner but this is merely to insure that the owner will collect the royalties due on the ore mined and shipped. These usually are provisions to permit the owner to inspect the operations but these are only for the purpose of insuring good mining practices and safety.

In this particular district there is no block leasing. I presume the provisions referred to in the bill is intended to cover this type of leasing, particularly; however, the same argument applies against inclusion of block leasing as against any other type. The provision of the bill to which we object attempts to create a relationship of employer and employee where none exists and seriously retards

the orderly operation of a leasing system which is annually providing ton after ton of minerals and metals to be added to the national stock and providing employment to labor.

I hope that you will consult with the American Mining Congress concerning this bill. Mr. Robert Searls of San Francisco will be in charge of the Mining Congress's presentation before the committee. I am asking you to cooperate, even to the extent of appearing before the committee, personally, to present the views of our industry which I have set forth in this letter. Thanking you and with personal regards, I am

Sincerely yours,

DONALD A. CALLAHAN.

The CHAIRMAN. Is the position taken by the Idaho Mine Operators substantially in accordance with the position which has been expressed this morning?

Senator DWORSHAK. I so understand, Mr. Chairman.

Mr. SEARLS. I would like to express to the chairman and to the committee our appreciation for the courtesy which has been extended this morning to the members of the mining industry and the American Mining Congress.

The CHAIRMAN. We were very glad to have the opportunity to hear

you.

(Whereupon, at 12:20 p. m., the committee recessed to reconvene Friday, March 10, 1950, at 10 a. m.)