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give equal attention and emphasis to the producers' side. I think, under such administration as is provided for in this legislation, that side would be fully represented.

It has seemed to me apparent in listening to the different witnesses that it is the producers, especially the small producers, who are asking for governmental control. The different witnesses have brought out different points in that connection. There has been evidence showing that the producers wish control in such cases where the price offered for domestic ore is less than that for imported ore. Another case is where, in the light of increased need of domestic production, a smaller price is offered at the present time than has been offered in the past. That was illustrated by the testimony here in connection with graphite. Another case would be where the producer asked for control because the price offered for raw material is not believed to be fair as compared with the prevailing prices for the derivatives. There was the same evidence brought to our attention in connection with pyrite, tungsten, and chromite. There seems to be a feeling on the part of especially the small producer that the gap is too large between the raw material and the product derived therefrom. One witness also brought out the fact of the need of control because he believed that the market for his product was not a free market. That was in the case of tungsten. Generally there has been evidence that control is desired because no contract can be made for a sufficient period to insure either new developments or an increased addition to already existing plants. That came out in the case of several of these mineral products, and I think it is the idea that is at the bottom of much of the lack of increased output. There is no assurance of a market for a sufficient period to justify expenditure of capital. Too often we make the mistake of considering that the nongovernmental use of some of this raw material is a nonessential use; but if we think for a moment, there are many of the nongovernmental uses that are equally essential at the present time, so that there is need of price fixing not only as a basis for Government contract but also to supply other consumers, not for nonessential work but for work that is essential, because indirectly it may be for the Government, although several steps removed from the product used by the Government.

I might sum up my position with reference to the bill before us by saying that no one is more anxious than I am for as little interference as possible with existing conditions in these various industries, and it is for that reason that I wish for governmental control that will involve the least possible new machinery and the least amount of change in present commercial and industrial practices; but when I say that, I want to add most emphatically that I believe added power is needed-power to change existing procedure wherever and whenever we realize that procedure does not meet the present crisis and where it does not provide for fair treatment to every producer or consumer.

I know that the efforts on the part of the governmental agencies already at work have been to serve the interests of the producer and to serve equally the interests of the consumer. They are equally important parts of the industrial machinery of the Nation, and it is a part of the Federal officer's duty to offer his services to both.

Recent experience with regard to many of these subjects justifies us in believing that new needs may arise very suddenly, and wise foresight would provide wide powers, even though we do not see the need of exercising those powers in the case of each and every one of the mineral products that are specified in the bill. I believe that in the effort to carry out the provisions of this bill by any administrative organization only such part of these powers granted under this legislation would be exercised as might be demanded by the emergency when it arose. The situation we know to-day is quite different from what it was six months ago as to several of the mineral products.

The CHAIRMAN. Just explain what these differences are and in what products.

Dr. SMITH. We are sympathetic with the consumers of pyrite and manganese ore, for instance, in their what seems to us rather tardy change of practice by reason of the fact that this was forced upon them by the seemingly stringent administrative act of the Shipping Board, for which, however, there was absolute necessity. All who have studied this problem have not been able to foresee exactly how great the demand would be upon our resources of raw material. It is not simply that the foreign supply of pyrite and of chromite and of manganese has been shut off in part, but the consumption of these materials has increased, so that the burden placed upon the domestic supply is larger than anyone anticipated. On the other hand, I think that the manganese production is increasing rather more rapidly than many thought could be possible in this country. In those particulars it is true of all of us that our hindsight is better than our foresight, for, even though we realized that there would be some shortage, we could not see and we can not even now foresee what the shortage may be in sulphuric acid. That is dependent absolutely upon the military demand, and there may be at any time a large demand upon one of these materials that forms the basis for some chemical manufacture that will arise by reason of the discovery of a new gas that is needed at the front, or some other material that is needed at the front.

If we compare present-day consumption of many of these mineral products with the consumption in 1913 and 1914, we are convinced at once that the extent of our necessity could not be foreseen at that time. There are some materials that have increased in importance in this respect and others that have decreased.

Take the case of magnesite, of which we expected there would be. a decided shortage by reason of the questionable adequacy of the California supply to take the place of that that had been imported from Greece and Austria. That California supply was very largely augmented by the discovery in Washington of large deposits of magnesite in 1915, so that in 1917, as has been testified by some of the witnesses here representing the steel industry, they are satisfied with. the domestic supply of magnesite for refractory uses.

I would also like to put some emphasis upon what I regard as the stabilizing influence of control. I think, with this power given to the Government, there would be much less chance of the market going against the ore buyer or the refiner. At least, you could say that the chance of a runaway market would not be greater under Government

control than it is at present, and that the stabilizing effect would be equally as beneficial to the consumer of these products as to the producer.

I was interested when one of the purchasing agents made the statement that he would prefer, other needs being equal, a domestic supply of his ore, not simply during war times but after the war. He said he would feel safer the nearer his supply was to his works.

In regard to the details of the legislation, I do not know that I can add anything to what has been or will be said. I think if there is to be this stabilizing influence of the Government, whether that is exercised through a corporation or through the machinery provided in the House bill, there is need of a revolving fund, and I think such a revolving fund should be larger than the amount in the House bill. I have roughly estimated the amount involved in the annual turnover of some of these products, the more important of these minerals mentioned in the bill; that is, taking the value of the imports and of the domestic production and the amount would be something in excess of $170,000,000. Of course, with a revolving fund that might be said to represent the maximum that would be needed; but in view of the fact that some of these imported ores come from some distance and then would be needed some time to finance the operation and the handling of the product from point of production to point of consumption, there could not be many turnovers of the capital inside of the 12 months, but I think that the amount stated in the House bill is quite inadequate as compared with what might be necessitated in case of need. Of course, whatever amount is appropriated it would be expected that before the period. covered by the legislation expired most of that would be returned to the Treasury.

The same criticism has been made of the provision which looks toward the possibility of Government operation in special cases where a mine is in litigation or where, by reason of ultraconservative ownership, or, we might even think, alien ownership, the property does not respond to the present needs for working. I think giving the Government power to operate and take over such a mine is amply justified by the needs as we see them even now. I do not anticipate that there would be a large amount of Government operation under such authority, but I do think that if the Government had power to do this there would be some cases in which the owner of the property would be more responsive to the suggestion that his property be operated at

once.

The CHAIRMAN. I notice, Dr. Smith, that there are some ores and metals not covered by this. Yesterday there was some discussion as to zinc. Why is it that zinc ore is not mentioned in this bill?

Dr. SMITH. Well, I have supposed that the primary reason was that the zinc production is absolutely adequate to meet all the needs. Of course, the mining and smelting and refining of these major metals has not been adequate to meet every demand possibly during the past four years, but they have increased their production capacity very largely indeed, and I think that we can say that they have not only met the domestic demands, but they have come up to meeting the very large foreign demand as well as could be expected. For that reason they do not present at all the kind of problem that is presented in the

case of some of the minor minerals which are of minor importance because the tonnage available is so much less in amount.

The CHAIRMAN. There is a sufficient production in this country and also sufficient zinc ore to take care of the needs and requirements that one can conceive of?

Dr. SMITH. And that production is, I think, something like 25 per cent in excess of anything like we had before in any previous time.

In the case of copper, the increase, I think, has been something like 60 or 65 per cent between 1913 and 1916, which was the high-mark year. The problem in these major metals is quite different, and yet we can not consider some of those other metals as less important, because, as I said earlier, they are, in a way, the key materials upon which other industries depend to an extent very much larger than would be suggested by the small tonnage which has been discussed.

Now, I have not mentioned the shipping problem, but I think it is in the minds of all of us that it is the shipping crisis that really necessitates the consideration of legislation like this.

Simply as showing the connection between the shipping crisis, and the minerals under consideration here, Mr. Bastin has furnished me with a table for about 10 of the mineral products mentioned in the bill. As expressing the tonnage problem involved, the normal import of these would be in terms of the requirements of this country for 1918, roughly, 2,000,000 tons. Now, so far as allotments have been made for imports or licenses issued for imports in 1918, the corresponding total is only 1,000,000. Just taking those substances-clay, chalk, chromium, fullers' earth, graphite, grinding pebbles, manganese, sea salt, and pyrite-which are items of large tonnage, the present problem is to stimulate the present production, so as to meet this shortage of 1,000,000 tons, which is brought about by the restriction already put upon the imports by the action of the Shipping Board. Of course, there are other items that I have not mentioned that are very important, although they do not involve a comparable tonnage.

Mr. BASTIN. Would it be, in your estimation, possible to effect an immediate further saving in the other remaining million?

Dr. SMITH. Of course, that is just what we are trying to do in the case of the largest item, which is manganese. We are trying not only to replace this high-grade manganese with domestic manganese of the same grade, but we are also trying to substitute, with the cooperation of the metallurgists of the steel industry, a lower grade manganese for some of the higher grades. I think Mr. Bastin's suggestion is that we would not want to let this one million saving in tonnage represent all that can be done or all that should be done, but that is the situation as it presents itself in May, 1918. Again, two months later, the problem may be quite different. There may be even a greater need for cutting off tonnage.

The CHAIRMAN. If there is nothing further at this time we will adjourn until 10 o'clock to-morrow morning.

(Thereupon, at 11.45 o'clock a. m., the committee adjourned until to-morrow, Wednesday, May 22, 1918, at 10 o'clock a. m.)

MINERALS AND METALS FOR WAR PURPOSES.

WEDNESDAY, MAY 22, 1918.

UNITED STATES SENATE,
COMMITTEE ON MINES AND MINING,

Washington, D. C.

The committee met at 10 o'clock a. m., Senator Charles B. Henderson (chairman) presiding.

Present: Senators Jones and Baird.

The CHAIRMAN. We will hear from Mr. McMahon this morning.

STATEMENT OF MR. H. G. M'MAHON, OF GOLDFIELD, NEV.

Mr. MCMAHON. Mr. Chairman, in view of the proposed measure that I understand has been brought before you to create an organization to assist in the development of certain metals that are required for this war, I understand that a great deal of attention has been given to the pyrite deposits; that is, to the end that the known deposits be utilized to their greatest extent and a certain amount of development be given to new fields.

It would appear in this connection that a certain amount of interest should be directed to the conservation of sulphur that is now escaping in very large quantities at many of the western smelting plants at points where the utilization of this sulphur, as it comes off in the shape of sulphur dioxide gas, may not be available for the manufacture of sulphuric acid.

I wish to make the proposal that a large part of this sulphur gas should be made directly into elemental sulphur or brimstone. It is a well-known fact that the deposits in the far West are well developed and smelters are now in operation that can be depended upon as a source of sulphur for a considerable length of time. The CHAIRMAN. Where are the deposits?

Mr. MCMAHON. In Shasta County, Cal. For instance, the plant of the Mammoth Smelter is smelting nearly 2,000 tons of sulphide per day and it should be stated that this ore should run 30 per cent of sulphur. That, I understand, is being wasted at the present time. At other points in California a certain amount of smelting is being done, notably on San Francisco Bay. There are points in Arizona, Utah, and Montana where very large tonnages of sulphur are being thrown out in the shape of sulphur dioxide, and to a large extent this is going to waste. From a commercial standpoint, to say nothing of a war measure, some effort should be brought about to conserve this product.

I understand that so far as the eastern situation is concerned, an effort is being made, or will be made, to utilize these fumes for the

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