Mr. Chairman and other members of the House Ways and Means Committee, I want to thank you for this opportunity to appear before you today in support of the Simpson bill and my own bill, H. R. 4462, which are designed to amend the Tariff Act of 1930 to provide a flexible duty on the importation of lead and zinc.

This committee has or will hear testimony on other critical industries which are being adversely affected by the importation of foreign products which depress our own markets. For instance, the wool industry in Utah and in the Nation is faced with total destruction unless emergency provisions such as proposed by the Simpson and Stringfellow bills are enacted. Today, we are to discuss the plight of the lead and zinc mining industries, and I am sure you are or will be acquainted with the magnitude of this problem before these hearings are completed.

I wish to assure you, gentlemen, that I am sympathetic to the President's request that the reciprocal trade agreements and policies De generally extended for 1 year to allow opportunity for study and reevaluation of the entire program. However, I am not in accord with any policy or view which would allow some of our vital and ritical industries to fold up and collapse while we sit idly by on our egislative hands, waiting for the year evaluation period to elapse. The time to start saving a drowning man is when he gets into water over his head, and not wait until he has gone down for the third time. The moment for making plans and preparations to assist the lead and zinc mining industry is right now, and not after all of our mines have ·losed and started caving in and filling with water. We here in Congress must make up our minds whether we are going to encourage or lestroy the domestic production of lead and zinc. We must take action how to prevent further damage or we will be faced with the irony hat our apathy and inaction has resulted in strangling the life out of this segment of our economy.

Many phases of the current lead-zinc situation, such as scarcity in imes of need, dumping as at present in process, danger of dependency on foreign sources, have been or will be presented by other witnesses, ind I will not attempt further discussion of those cardinal issues.

I would like, however, to call attention to some of the basic phiosophies used by the advocates of free trade and show how their apblication would affect the economy of Utah, as well as other lead-zinc producing States and the Nation as a whole.

Free trade is urged to the end that dollars paid for imports proide money for purchase and export of our domestic manufactured goods. Raw materials are emphasized as the desirable imports under such superficially attractive phrasing as "purchase of raw materials. from the cheapest possible source." The first is to stimulate markets for manufactured goods, and the second is thought to be both sound onservation as well as practical economics.

We agree that raw materials producing areas must have markets to sustain their economy. The free traders have, however, so spotlighted foreign countries in the role of raw material producers that domestic areas largely dependent on raw material economies have been comoletely overlooked. Income from raw material production is just as vital to the economies of Utah, Montana, Idaho, Tennessee, and Oklahoma, as it is to Peru, Africa, or Mexico. We think income to domestic

raw material producing areas has far more effect on the economy of the Nation than income to foreign producers.

Every dollar paid for domestically produced lead and zinc enters the economy of our country. It pays wages, buys goods, pays taxes, or is reinvested in new or expanded industry. It would be difficult to estimate how much of every dollar paid for foreign metals returns to this country. It is, however, safe to assume that a considerably lesser portion of it reenters our economy than does that paid for domesti metals and, therefore, it is axiomatic that every pound of domestic production lost to foreign producers has an adverse impact on our domestic economy.

The choice necessary to be made now is not whether we stand to lo a small part of our domestic lead-zinc production, but rather, most of it. A great number less batteries, gallons of gasoline, automobiles refrigerators, sewing machines, TV sets, and almost innumerable other domestic manufactured goods will be sold in Utah, Montana, Idaho. Tennessee, Oklahoma, and other lead-zinc producing States, if the domestic lead-zinc industry is forced to quit. The situation is worth contemplating. Foreign-produced metals pay no local, State, and Federal taxes, no income taxes from workers, staffs, and company officials. In their operations these foreign producers do not buy United States fuel or power, only a small part of their needed supplies and equipment are purchased locally, and they ship little or no ore or concentrates over our railroads.

It is estimated that 1 man employed in a raw materials producing industry indirectly creates employment for 4 others in his community. The impact of domestic-produced raw materials thus spreads geometrically. Roland A. Vandergrift and associates estimated in s study completed in 1930 that 47 percent of Utah's then 507,000 popula tion was then either directly or indirectly wholly dependent on meta mining for their livelihood.

At the end of my testimony I am attaching two tabulations showing Bureau of Mines data on lead-zinc production and metal value by States in 1952. To summarize these tabulations, there were 22 of our 48 States producing zinc and 22 producing lead, 19 States each produced more than a thousand tons of lead and of zinc. The total value of those metals was $341,048,630-every dollar of which served to activate our national economy. The value of gold and silver produced as byproduct of lead-zinc would increase the total new wealth to about $410 million.

Among the problems of the lead-zinc mining in the Western States are the increasing costs of mining, ore treatment, smelting, and transportation, without a corresponding increase in value of the product. Historically, the gold and silver components of the ore have borne a relatively higher share of the costs; but, since 1934, mint prices of these precious metals have remained the same. All increases in costs of labor, materials, and transportation have had to be borne by lead and

zinc.

It is important here that we make clear our appreciation of the fact that a certain amount of lead-zinc imports are necessary. I think the provisions of the Simpson and my own bill would simply protect what has normally been the domestic share of the market, and, there fore, we do not propose to exclude the normal rate of imports. Under present conditions, however, the domestic producer cannot long con

inue to produce lead-zinc. He cannot compete in the present market of 22-cent lead and 11-cent zinc.

Utah in 1952 had 30 active lead-zinc operations. To April 30, 1953, here were only 8 of these still active and 6 of the 8 were on a curtailed asis. In April 1953 only 58 percent as many men were employed in Jtah's lead-zinc mines and mills and lead smelters as in April 1952. New Mexico today has only one lead-zinc mine operating and that n a development basis only. Arizona has but one lead-zinc mine at resent in operation.

The latest Bureau of Mines figures (February 1953) show only bout a 10-percent decrease from 1952 levels in domestic lead-zinc roduction. Many mines have, since February, reported their closing r curtailment. Those continuing operations, with rare exception, are perating either at a loss or at profit levels inadequate to pay operating osts and to explore for and develop new ore bodies needed to replace hose being exhausted. Practically every operating lead-zinc mine in e United States today might properly be compared with a merchant ho liquidates his stock through cut-rate sales to terminate his usiness.

The Simpson and Stringfellow bills, which propose an import tax n lead and zinc, simply seek to preserve a balance between foreign nports and domestic production and to provide mechanics for stabiling lead-zinc prices near a realistic level as related to production osts in our present economy.

Another point I would like to make is that since the end of the remium price plan June 30, 1946, the average domestic price paid or 2,539,050 tons of domestically produced lead has been 15.4 cents; nd for 4,105,123 tons of zinc, near 14 cents per pound. These averge prices are near the level domestic producers estimate will be obained on a reasonably stabilized basis through the lead-zinc proviions of the Simpson and Stringfellow bills.

The consumer has paid this price over the last 612 years. The quesion might well be asked: Why, then, is not the operator able to coninue operations if he has realized a fair average price over that eriod?

The answer is simple. For 15 months in the 1949-50 period, prices vere below, well below, the average. Many operations were forced to lose. They could not stand the protracted period of loss operations. Many others were saved by the rise in prices incident to the artificial carcity of metals created by the Korean incident. Prices have been elow the above-cited averages since October 7, 1952, for lead, and since September 12, 1952, for zinc. They have since those dates continued lownward to the present low of 1212-cent lead and 11-cent zinc.

Most small mines are again closed, and most of the larger ones are ustaining operating losses rather than face the high cost of shutdown nd maintenance. Each operator must make the decision regarding losing down for himself. The ultimate closure, if not the time of loing so, is, however, definitely predictable with continuation of present volume of dumping of foreign metals in our domestic market.

A few brief comments will suffice for the economy of buying raw materials from the cheapest possible source. To maintain the availability of supplies from the cheapest source, competitive conditions must continue to insure that prices are based on cost of production. It is apparent that present prices are based on foreign cost of produc

tion; otherwise, foreign metals would not be continuing to flow to our domestic markets at those prices in record volume. We can logicaly expect near present prices to continue until the competition of domes tic production has been eliminated. We can then just as logically expect prices to rise to whatever level our dependency permits. Our recent experience with copper, when we were literally forced to pay 12 cents per pound premium to Chile because of our dependency, is but an example. We have had similar experiences with rubber, tin, quinine, potash, and other raw materials over the years.

I urge favorable consideration of the lead-zine provisions of the Simpson and Stringfellow bills. The economy of the State of l'tab is as dependent on sale of its raw materials as is any foreign ra materials area. The market for manufactured goods in Utah is main tained by raw material sales as are markets in any other area. Every dollar paid for Utah lead-zinc enters Utah's and the Nation's economy in geometric impact, whereas but a portion of the dollar spent for foreign metals returns to this country, either directly or indirectly.

In either the Simpson or Stringfellow bill the lead-zine industry is but asking for the mechanics to help insure receiving its fair shar of the business at prices reasonably stabilized at levels related to domestic cost of production. The lead-zinc industry, through remaining in a healthy competitive condition, will prevent consumers eventu ally being exploited pricewise, and will be able to maintain the skill. the know-how, and the readily available ore reserves to protect our country in a national emergency. We do not ask for subsidies. Wa think experience indicates that if the threatened, near-complete, lo of domestic lead-zinc production becomes a reality, prices will be higher than they would be under the lead-zinc provisions proposed this new legislation.

The United States is and will continue to be the most powerful economic producer nation on the face of the earth, only so long as we vigilantly protect and foster the development of our raw material and build up our productive facilities. The strength and ability of this Nation to wage war or to defend itself against aggression is directly related to our domestic industries. If we continue to develop and build up foreign producers at the expense and detriment of our own domestic industries, we might well find ourselves in the dilemma of having provided our enemies or turncoat allies with the industrial potential which might rear up like a Frankenstein to destroy us.

I believe in foreign trade; I believe in improving our internation relations; but I do not believe that we should always cast the United States or United States industries in the role of having to be on the giving end—of receiving the short end of every deal. Let's wake up to reality. While we are attempting to bring a higher standard of living and democratic principles to the backward areas of the world. we are sowing economic, social, and political theories in our own country that might well cause us to lose our own sacred birthrights. To paraphrase the Biblical quotation, "What profiteth it a man to gain the whole world and lose his own soul," we might have the anal ogy of aiding the whole world and losing our own place in the sun. I believe in America first, last, and always, and I believe we will always have a United States of America if we do not give it away. Internationalism and free trade must be secondary to our own domestic

needs. Let's save at least some of America for Americans. Let's stop giving our inheritance away for a mess of international pottage.

There is no better time to start than now, and there is no more logical place to start using some good common economic sense than in our base metal industries.

I urge you gentlemen of this distinguished committee to study this problem and seek enlightenment on the effect which the continuation of present depressive trade policies will have upon our own domestic industries. I feel confident that if you examine the testimony which has or will be given before this committee, you will find a pattern and design which will point the way toward saving the vital lead and zinc producers of the United States.

In conclusion, I solicit the committee to favorably report the Simpson bill or my own legislation dealing with a flexible duty on the importation of lead and zinc.

(Tabulation on lead production in the United States, 1952, from the U. S. Bureau of Mines, follows:)

Lead production in the United States, 1952-Preliminary, U. S. Bureau of Mines

Mr. STRINGFELLOW. Mr. Chairman, as part of my presentation today, as I mentioned before, I have with me Mr. Cecil Fitch, who is president of the Utah Mining Association, and at this point he would like to read a short statement into the record. Then if there are any questions, we will be glad to answer them.

The CHAIRMAN. You may proceed.

STATEMENT OF CECIL A. FITCH, JR., VICE PRESIDENT AND GENERAL MANAGER, CHIEF CONSOLIDATED MINING CO., EUREKA, UTAH; AND PRESIDENT, UTAH MINING ASSOCIATION, SALT LAKE CITY, UTAH

Mr. FITCH. Mr. Chairman and members of the committee: My name is Cecil A. Fitch, Jr. I represent the last of the small but persistent producers of lead-zinc ores in the Tintic District of Utah.