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MINERALS AND METALS FOR WAR PURPOSES.

THURSDAY, MAY 2, 1918.

UNITED STATES SENATE,
COMMITTEE ON MINES AND MINING,

Washington, D.O. The committee met at 10.30 o'clock a. m. in room 450, Senate Office Building, Senator Charles B. Henderson presiding.

Present: Senators Henderson (chairman), Ashurst, Shafroth, Sterling, Walsh, Phelan, and Sutherland.

Present also: Mr. George Otis Smith, Director Geological Survey, and Dr. Van H. Manning, Director Bureau of Mines.

The committee proceeded to consider the bill H. R. 11259, as follows:

(H. R. 11259, 65th Congress, 2d session.]

AN ACT To provide further for the national security and defense by encouraging the

production, conserving the supply, and controlling the distribution of those ores, metals, and minerals which have formerly been largely imported, or of which there is or may be an inadequate supply.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, by reason of the existence of a state of war, it is essential to the national security and defense, for the successful prosecution of the war, for the support and maintenance of the Army and Navy, to assure an adequate supply, equitable distribution, and to facilitate the production and movement of necessaries, which necessaries are defined in this act to include only the following named mineral substances and ores, minerals, intermediate metallurgical products, metals, alloys, and chemical compounds thereof, to wit: Antimony, arsenic, ball clay, bismuth, bromine, cerium, chalk, chromium, cobalt, corundum, emery, fluorspar, ferro-silicon, fullers earth, graphite, grinding pebbles, iridium, kaolin, magnesite, manganese, mercury, mica, molybdenum, osmium, sea salt, platinum, palladium, paper clay, potassium, pyrites, radium, sulphur, thorium, tin, titanium, tungsten, uranium, vanadium, zirconium, and of other rare or unusual elements the supply of which may, in the judgment of the President, be inadequate for war and industrial needs; to prevent, locally or generally, scarcity, monopolization, hoarding, injurious speculation, manipulations, and private controls, affecting such supply, distribution, and movement; and to establish and maintain governmental control of such ecessaries during the war and thereafter for such period of time as is hereinafter provided. For such purposes the instrumentalities, means, methods, powers, authorities, duties obligations, and prohibitions hereinafter set forth are credited, established, conferred, and prescribed.

SEC. 2. That the President is authorized through the Secretary of the Interior to make such regulations and to issue such orders as are essential effectively to curry out the provisions of this act. That in carrying out the purposes of this act the Secretary of the Interior, with the approval of the President, is allthorized to enter into any voluntary arrangements or agreements; to use any agency or agencies; to accept the services of any persons without compensation; to cooperate with any agency or person; and to coordinate their activities so as to avoid any preventable loss or duplication of effort or funds.

Sec. 3. That no person acting either as a voluntary or paid agent or employee of the United States in any capacity, including an advisory capacity,

shall solicit, induce, or attempt to induce, any person or officer authorized to execute or to direct the execution of contracts on behalf of the United States, to make any contract or give any order for the furnishing to the United States of any necessaries or other property covered by the provisions of this act, if such agent or employee has any pecuniary interest in such contract or order, or if he or any firm of which he is a member, or corporation, joint-stock company, or association of which he is an officer or stockholder, or in the pecuniary profits of which he is directly or indirectly interested, shall be a party thereto. Nor shall any such agent or employee make, or permit any committee or other body of which he is a member to make, or participate in making, any recommendation concerning such contract or order to any council, board, or commission of the United States, or to any member or subordinate thereof, without making to the best of his knowledge and belief a full and complete disclosure in writing to such council, board, commission, or subordinate of any and every pecuniary interest which he may have in such contract or order and of his interest in any firm, corporation, company, or association being a party thereto. Nor shall he participate in the awarding of such contract or giving such order. Any willful violation of any of the provisions of this section shall be punishable by a fine of not more than $10,000, or by imprisonment of not more than five years, or both: Provided, That the provisions of this section shall not change, alter, or repeal section forty-one of chapter three hundred and twentyone, Thirty-fifth Statutes at Large.

Any agent or employee of the United States who, contrary to the provisions of this section, shall receive any profit or profits from any contract for necessaries made under the provisions of this act, or any firm of which sich agent or employee is a member or any corporation, joint-stock company or association of which such agent or employee is an officer or stockholder or in the pecuniary profits of which he is directly or indirectly interested, which, contrary to the provision of this section, shall receive any profits from any contract for necessaries or for other property taken for the purpose of obtaining necessaries under the provisions of this act, shall forfeit to the United States all such profits and the same may be recovered by the United States in any appropriate action at law or equity in any proper district court any time within five years after fact of such interest shall be discovered.

SEC. 4. That it is hereby made unlawful for any person willfully to commit waste or willfully to permit preventable deterioration of any necessaries in or in connection with their production, manufacture, or distribution; to hoard, as defined in section six of this act, any necessaries; to monopolize or attempt to monopolize, either locally or generally, any necessaries; to engage in any discriminatory and unfair or any deceptive or wasteful practice or device, or to make any unjust or unreasonable rate or charge, in handling or dealing in or with any necessaries; to limit the facilities for transporting, producing, manufacturing, supplying, storing, or dealing in any necessaries; to restrict the supply of any necessaries; to restrict distribution of any necessaries; to prevent, limit, or lessen the manufacture or production of any necessaries in order to enhance the price thereof; to exact excessive prices for any necessaries; or to conspire, combine, agree, or arrange with any other person to do or perform any of the acts or things prohibited by this section, or to aid or abet the doing of any act made unlawful by this section.

SEC. 5. That from time to time, whenever the Secretary of the Interior, with the approval of the President, shall find it essential to license the manufacture, storage, mining, distribution, or use of any necessaries, in order to carry into effect any of the purposes of this act, and shall publicly so announce, no person shall, after the date fixed in the announcement, engage in or carry on any such business specified in the announcement of mining, manufacture, storage. distribution, or use of any necessaries as set forth in such announcement, unless he shall comply with license regulations issued pursuant to this section. The Secretary of the Interior is authorized to issue and revoke such licenses and to prescribe regulations for the issuance and revocation of such licenses and requirements for systems of accounts and auditing of accounts to be kept by licensees, submission of reports by them with or without oath or affirmation, and the entry and inspection by the duly authorized agents of the Secretary of the Interior of the places of business, correspondence, papers, books, and records of licensees. Whenever the Secretary of the Interior shall' find that any royalty, charge, price, commission, profit, or practice of any licensee is unjust, or unreasonable, or discriminatory and unfair. or wasteful, or causing waste, and shall order such licensee within a reasonable time fixed in the order to discontinue

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the same, unless such order, which shall recite the facts found, is revoked or suspended, such licensee shall, within the time prescribed in the order, discontinue such unjust, unreasonable, wasteful, discriminatory, and unfair royalty, charge, price, commission, profit, or practice. The Secretary of the Interior may, in lieu of any such unjust, unreasonable, wasteful, discriminatory, and unfair royalty, charge, price, commission, profit, or practice, find what is a just, reasonable. nondiscriminatory, and fair royalty, charge, price, commission, profit, or practice, and in any proceeding brought in any court such order and findings of the Secretary of the Interior shall be prima facie evidence of the facts stated therein. Any person who willfully fails or refuses to discontinue any unjust, unreasonable, wasteful, discriminatory, and unfair royalty, charge, price, commission, profit, or practice, in accordance with the requirement of an order issued under this section, or any regulation prescribed under this section, shall, upon conviction thereof, be punished by a fine not exceeding $5,000, or by imprisonment for not more than two years, or both, and in addition shall pay into the United States Treasury the full amount of any excessive royalty, charge, price, commission, or profit which he may have received in violation of any such order or regulation.

SEC. 6. That necessaries shall be deemed to be hoarded within the meaning of this act when either (a) held, contracted for, or arranged for by any producer. manufacturer, wholesaler, retailer, dealer, or other person in a quantity in excess of the reasonable requirements of his business for use or sale by him for a reasonable time, or reasonably required to furnish necessaries produced in surplus quantities seasonally throughout the period of scant or no production ; or (b) withheld, whether by possession or under any contract or arrangement, from the market by any person for the purpose of unreasonably increasing or diminishing the price.

SEC. 7. That whenever any necessaries shall be hoarded as defined in section six they shall be liable to be proceeded against in any district court of the United States within the district where the same are found and seized by a process of libel for condemnation; and if such necessaries shall be adjudged to be hoarded they shall be disposed of by sale in such manner as to provide the most equitable distribution thereof as the court may direct, and the proceeds thereof, less the legal costs and charges, shall be paid to the party entitled thereto. The proceedings of such libel cases shall conform as near as may be to the proceedings in admiralty, except that either party may demand trial by jury of any issue of fact joined in any such case, and all such proceedings shall be at the suit of and in the name of the United States. It shall be the duty of the United States attorney for the proper district to institute and prosecute any such action upon presentation to him of satisfactory evidence to sustain the same.

SEC. 8. That any person who willfully destroys any necessaries for the purdose of enhancing the price or restricting the supply thereof shall, upon conviction thereof, be fined not exceeding $5,000 or imprisoned for not more than two Jears, or both,

Sec. 9. That any person who, in order to enliance the price of necessaries or for the purpose of impeding the Government in carrying on the war, conspires, combines. agrees, or arranges with any other person, or who aids or abets any other person (a) to limit the facilities for transporting, producing,

anufacturing, supplying, storing or dealing in any necessaries; (b) to restrict the supply of any necessaries; (c) to restrict the distribution of any Recessaries; (d) to prevent, limit, or lessen the manufacture or production of Ally necessaries shall, upon conviction, be fined not exceeding $10,000 or be imprisoned for not more than two years, or both.

SEC. 10. That the President is authorized from time to time, whenever in his judgment it may be required for the successful prosecution of the war, to l'equisition necessaries, and to requisition, or otherwise provide, storage facilities for such necessaries; and he shall ascertain and pay a just compensation therefor. Compensation provided for under this section shall be paid from the appropriation made by section seventeen of this act. If the compensation so dletermined be not satisfactory to the person entitled to receive the same, such person shall be paid seventy-five per centum of the amount so determinerl by the President, and shall be entitled to sue the United States to recovor usch further sum as. added to said seventy-five per centum, will makt up such amount as will be just compensation for such necessaries or storage space, and jurisdiction is hereby conferred on the United States district courts to hear and determine all such controversies.

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SEC. 11. That the Secretary of the Interior, with the approval of the President, is authorized from time to time to enter into contracts for necessaries for periods of not exceeding two years, to purchase, to store, to provide storage facilities for, and to sell necessaries at reasonable prices to be fixed by the Secretary of the Interior, with the approval of the President: Provided, That if any minimum price shall have been theretofore fixed pursuant to the provisions of section thirteen of this act, then the price paid for any such articles so purchased shall not be less than such minimum price: Provided further, That nothing in this act shall be construed to authorize entering into contracts under this act after the termination of the war except for the purpose of selling, storing, or otherwise disposing of property on hand, or such as may be necessary to protect the Governmeut on its guarantees under section thirteen. Aby moneys received by the United States from or in connection with the disposal by the United States of necessaries under this section may, in the discretion of the President, be used as a revolving fund for further carrying out the purposes of this section. Any balance of such moneys not used as part of such revolving fund shall be covered into the Treasury as miscellaneous receipts.

SEC. 12. That whenever the President shall find it essential to the successfu prosecution of the war to secure an adequate supply of necessaries lie is author: ized, through the Secretary of the Interior, to requisition and take over, for list or operation by the Government, any undeveloped, insufficiently developed or operated, or idle mineral land or deposit, mine, smelter, or plant and to develop, operate, or cause the same to be dereloped or operated in such manner and through such agency as he may direct. That hereafter during the existing state of war, the Secretary of Agriculture is authorized, under regulations to be prescribed by him, to permit the Interior Department, or any other department, board, or commission of the Government to take from the national forests such minerals as may be needed in the prosecution of the war. Whenever the Secretary of the Interior, with the approval of the President, shall determine that the further use or operation by the Government of any such mineral land, deposit, mine, smelter, or plant, or part thereof, is not essential for the successful prosecution of the war the same shall be restored to the person entitled to the possession thereof. The United States shall make just compensation, to be determined by the Secretary of the Interior, approved by the President, for the taking over, use, occupation, and operation by the Government of any such mineral land or deposit, mine, smelter, or plant, or part thereof. If the compensation so determined be unsatisfactory to the person entitled to receive the same, such person shall be paid seventy-five per centum of the amount so determined and shall be entitled to sue the United States to recover such further sum as added to said seventy-five per centum will make up such amount as will be just compensation, in the manner provided for by section twenty-four, paragraph twenty, and section one hundred and forty-five of the Judicial Code. Compensation provided for in this section shall be paid from the appropriation made by section seventeen of this act. The Secretary of the Interior, with the approval of the President, is authorized to prescribe such regulations as he may deem essential for carrying out the purposes of this section, including the operation of any such mineral land or deposit, mine, smelter, or plant, or part thereof, the purchase, sale, or other disposition of articles used, manufactured, produced, prepared, or mined therein, and the employment, control, and compensation of employees. Any moneys received by the United States from or in connection with the use of operation of any such mineral land or deposit, mine, smelter, or plant, or part thereof, may, in the discretion of the President, be used as a revolving fund for the purpose of the continued use or operation of any such mineral land or deposit, milie, smelter, plant, or part thereof, and the accounts of each such mineral land or deposit, mine, smelter, plant, or part thereof, shall be kept separate and distinct. Any balance of such moneys not used as part of such revolving fund shall be paid into the Treasury as miscellaneous receipts.

SEC. 13. That whenever the Secretary of the Interior, with the approval of the President, shall find that an emergency exists requiring stimulation of the production within the United States, its insular possessions, Territories, and District of Columbia of any one or more necessaries, and that it is essential that the producers of any one or more of such necessaries shall have the benefits of the guaranty provided for in this section, he is authorized, with the approval of the President, from time to time, seasonably and as far in advance as practicable, to determine and fix and give public notice of what, under specified conditions, are reasonable guaranteed prices, in order to assure such pro

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: ducers a reasonable profit. The Secretary of the Interior shall, from time to aries

time, establish and promulgate such regulations, with the approval of the Drage

President, as he shall deem wise in connection with such guaranteed prices, - the

and in particular governing conditions of delivery and payment and differences

in price for any of the several specified necessaries. Thereupon the Govern) the

ment of the United States hereby guarantees every producer of these specified such necessaries that, upon compliance by him with the regulations prescribed, he

shall receive for any necessaries produced in reliance upon this guaranty within the period, not exceeding two years, prescribed in the notice, a price not less than the guaranteed price therefor as fixed pursuant to this section. Such regulations shall prescribe the terms and conditions upon which any

producer shall be entitled to the benefits of such guaranty. When the PresiHY

dent finds that the importation into the United States of any of these necesction

saries produced outside of the United Staes maerially enhances or is likely for

materially to enhance the liabilities of the United States under guaranties of

prices therefor made pursuant to this section and ascertains what rate of duty ners

added to the then existing rate of duty, if any, on each of the necessaries and to the value of each of the necessaries at the time of importation would be sufficient to bring the price thereof at which imported up to the price fixed therefor pursuant to the foregoing provisions of this section, he shall proclaim such facts, and thereafter there shall be levied, collected, and paid upon each of these necessaries, when 'imported, in addition to the then existing rate of duty, the rate of duty so ascertained; but in no case shall any such rate of duty be fixed at an amount which will effect a reduction of the rate of duty upon any of these necessaries under any then existing tariff law of the United States. For the purpose of making any guaranteed price effective under this section, or whenever he deems it essential, in order to protect the Government of the United States against material enhancement of its liabilities arising out of any guaranty under this section, the Secretary of the Interior, with the approval of the President, is authorized also, in his discretion, to purchase uny of these necessaries for which a guaranteed price shall be fixed under this section, and to hold, transport, or store, or to sell, dispose of, and deliver

the same to any citizen of the United States or to any Government engaged in lir

war with any country with which the Government of the United States is or fi

inay be at war, or to use the same as supplies for any department or agency of the Government of the United States. Whenever and wherever it is in his judgment necessary for the effective prosecution of the war the President, through the Secretary of the Interior, is authorized and empowered to establish rules for the regulation of and to regulate the method of production, sale, shipment, distribution, apportioninent, or storage thereof among dealers and consumers, domestic or foreign. And moneys received by the United States flon or in connection with the sale or disposal of necessaries under this

section may, in the discretion of the President, be used as a revolving fund de

for further carrying out the purposes of this section. Any balance of such moneys not used as part of such revolving fund shall be covered into the Treasury as miscellaneous receipts.

Sec. 14. That whenever the President shall find that limitation, regulation,

os prohibition of the use of any of these necessaries is essential in order to il

axtile an adequate and continuous supply of necessaries, or that the national kurlty and defense will be conserved thereby, he is authorized, from time to limo, to prescribe and give public notice of the extent of the limitation, regulafim, prohibition, or reduction so necessitated. Whenever such notice shall burner been given and shall remain unrevoked all persons shall, after a reasonbolov time prescribed in such notice, conform to the order providing such limibition, regulation, prohibition, or reduction. Any person who willfully violates

to provisions of this section, or who shall violate any rule or regulation made "wer this section, shall be punished by a fine not exceeding $5,000, or by fuprisonment for not more than two years, or both.

Sex'. 15. That every person who willfully assaults, resists, impedes, or interfres withi uny officer, employee, or agent of the United States in the execution se any duty authorized to be performed by or pursuant to this act shall pron conviction thereof be fined not exceeding $1,000, or be imprisoned for not more than one year, or both.

Sec. 16. That the sum of $500,000 is hereby authorized to be appropriated Just of any moneys in the Treasury not otherwise appropriated, to be available lantil June thirtieth, nineteen hundred and nineteen, for the payment of all

upenses of carrying out the provisions of this act, including personal services,

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