CONTENTS Page Appendix 1-Investigation of the domestic lead and zinc industries under section 332 of the Tariff Act of 1930, petition of the lead and zinc indus- tries for excape clause relief. Appendix 2.-Investigation of the domestic lead and zinc industries under section 332 of the Tariff Act of 1930, and investigation of injury to the domestic lead and zinc industries under section 7, Trade Agreements Extension Act of 1951, as amended Appendix 3-Statement for Minerals, Materials, and Fuels Economies Subcommittee concerning zinc mines of New Mexico, by Joseph H. Taylor, vice president of Peru Mining Co., and New Mexico Consoli- Appendix 4.-Letter of Ernest Bentley, president, Boston Wool Trade Ássociation, to chairman, January 6, 1954 Appendix 5.-Statement of Wesley E. Disney on behalf of Ozark-Mahoning Appendix 6.-Letter of Matthew J. Donachie, president, the Beryllium Corp., Reading, Pa., to committee, November 16, 1954. Appendix 7.-Letter of Ralph M. Hunter, staff coordinator of electro- Appendix 8.-Letter of H. R. Alexander, chairman, National Tile & Man- ufacturing Co., Anderson, Ind., to chairman, February 24, 1954. Appendix 9.-The United States and Its Foreign Trade Position, a special study prepared by the National Industrial Conference Board, Inc., National Electrical Manufacturers Association... Appendix 10.-Analysis of legislation, treaties, and regulations affecting the ability of American manufacturers to compete with foreign-produced Appendix 11.-The United States electrical manufacturing industry and its relation to the security, health, safety, and welfare of the country. Appendix 12.-The foreign-trade position of the United States and the 884 Appendix 16.-Letter of Robert P. Mille, Jr., vice president and general manager, Southwestern Graphite Co., Burnet, Tex., to George B. III APPENDIX APPENDIX 1 INVESTIGATION OF THE DOMESTIC LEAD AND ZINC INDUSTRIES UNDER SECTION 332 OF THE TARIFF ACT OF 1930 PETITION OF THE LEAD AND ZINC INDUSTRIES FOR ESCAPE CLAUSE RELIEF To the United States Tariff Commission, September 3, 1953. From the National Lead and Zinc Committee, Otto Herres, chairman. Public notice was given July 29, 1953, that pursuant to a resolution of the Committee on Finance of the United States Senate, July 27, 1953, and of the Committee on Ways and Means of the House of Representatives, July 29, 1953, the United States Tariff Commission on the 29th day of July 1953 instituted a general investigation under the provisions of section 332 of the Tariff Act of 1930, as amended, of the domestic lead and zinc industries, including the effect of imports of lead and zinc on the livelihood of American workers. Petition of lead-zinc mining industry for escape-clause relief The National Lead and Zinc Committee representing every lead and zinc mining district in the United States, notified the Commission on August 12, 1953, that it desired to appear and give testimony at the hearings in connection with this investigation in Washington, D. C., called for November 3-5, 1953. At the same time the committee requested an opportunity to appear and testify during the November hearings in support of the petition which it hereby presents for an investigation under section 7 of the Trade Agreements Extension Act of 1951, as amended by the Trade Agreements Extension Act of 1953, for escape-clause relief. The National Lead and Zinc Committee in behalf of the lead and zinc mining industries respectfully requests the Tariff Commission to recommend to the President that lead articles including pigments, ores, and concentrates which are dutiable under paragraphs 72, 391, and 392 of the Tariff Act of 1930 and zinc articles including oxides, ores, and concentrates which are dutiable under paragraphs 77, 393, and 394 of this act, be increased by 50 percent over the rates existing on January 1, 1945. Rates of duty on these articles have been reduced by trade agreements with various countries, but specifically by General Agreements on Tariffs and Trade at Geneva, effective January 1, 1948, and Torquay, effective June 6, 1951. The rates existing on January 1, 1945, within the meaning of the provision in section 350 (a) (2) of the Tariff Act of 1930, as amended, limiting the authority of the President to proclaim increases or decreases in rates of duty, are understood to be the rates to which the 50 percent increase requested on articles dutiable under paragraphs 391, 392, 393, and 394 may apply. These rates and the relief requested are listed in the following tabulation in comparison with present rates: The Trade Agreements Extension Act authorizing the President to enter into trade agreements under section 350 of the Tariff Act of 1930, as amended, states: "Should the Tariff Commission find, as the result of its investigation and hearings, that a product on which a concession has been granted is, as a result, in whole or in part, of the duty or other customs treatment reflecting such conces sion, being imported in such increased quantities, either actual or relative, as to cause or threaten serious injury to the domestic industry producing like or directly competitive products, it shall recommend to the President the withdrawal or modification of the concession; its suspension in whole or in part, or the establishment of import quotas, to the extent and for the time necessary to prevent or remedy such injury." The domestic lead and zine mining industries believe that the maximum benefit obtainable by the limited 50-percent increase on duties over rates existing in 1945 is inadequate to provide relief from the destrictive consequences to leadzinc mining operations in the United States of concessions granted under trade agreements. Domestic mining industry demoralized A flood of imports has demoralized the domestic mining industry. Mines have been forced to discontinue or cut back production in the Tri-State mining district of Missouri, Kansas, and Oklahoma, and in Utah, Idaho, Washington, Colorado, Tennessee, New Mexico, and elsewhere. The industry has experienced serious curtailment and is threatened with further losses through dumping of lead and zinc from low-wage foreign countries on the American market. The mines have suffered from the effects of currency devaluation and the monopolistic and socialistic practices of foreign governments in the purchase and sale of metals. This critical state of affairs led to the formation of a national committee representing all lead-zinc mining districts in the United States during the emergency for the purpose of seeking relief through such proper means as are available. Proposal for legislative relief The committee in conference at Denver, Colo., early this year concluded that constructive legislation was needed and should be requested without delay for the preservation of the lead and zinc mining industry. Congress was asked to consider a legislative program supported by the united domestic industry. This program contemplates a sliding-scale stabilization tax on imports of lead and zine to be applied only when prices drop below a reasonable level. The proposed tax is an antidumping measure and in effect is a vanishing tariff which no longer applies when the market price reaches a level which will permit the survival of the industry. Ways and Means Committee of House recommends sliding scale tax The Committee on Ways and Means of the House of Representatives considered the proposed sliding-scale stabilization tax favorably and recommended its passage as section 11 of H. R. 5894, the Simpson bill to amend the Trade Agreements Extension Act of 1951. The Ways and Means Committee received testimony on Friday, May 15, 1953, in relation to the emergency confronting the lead and zinc mining industries caused by a flood of imports. We respectfully request the Tariff Commission to take official notice of the published testimony before the committee and the report of the commitee on H. R. 5894 recommending passage of the stabilization tax. The Ways and Means Committee reported: "The domestic mining industry has experienced serious curtailment due to dumping of lead and zinc by low-wage foreign countries on the American market. Moreover, domestic miners have suffered from the adverse effects of foreign currency devaluation and the monopolistic practices of foreign governments in the purchase and sale of these metals. “Our domestic mine production cannot be stopped or started at will. The last 12 years have seen apparent shortages and emergency demands for maximum metal production alternating with a surplus of metal resulting from dumping of foreign metals in our market. This has resulted in many temporary and some permanent mine closures. Each such cycle has resulted in higher costs, lower profits, loss of both immediate and future potential production and discouraging further investment in mining." (P. 9, Rept. 777, 83d Cong., 1st sess.) Government officials urge escape-clause application Government officials testifying before the Ways and Means Committee on May 15, in many instances acknowledged the predicament of the mining industry and urged the mines to seek relief by escape-clause application rather than legislative action. Reference is made to the published testimony for detailed statements. However attention is directed to pertinent excerpts which follow: Hon. Sinclair Weeks, Secretary of Commerce: "If these industries feel that the present level of imports of lead, zinc, and petroleum are causing, or threatening to cause, serious injury to them, they have under the terms of the Reciprocal Trade Agreements Act at present on the statute books available to them, prescribed procedures for seeking remedial action. it seems to me far more appropriate for them to act pursuant to the existing statute than to request the special treatment proposed in H. R. 4294” (p. 648). Hon. Harold E. Stassen, Director for Mutual Security: "Of course, those peril point, escape, and other clauses, are a part of the study that ought to be carried on this year; but in the case of lead and zinc, that could well be raised with the Tariff Commission right now for study" (p. 691). Hon. Douglas McKay, Secretary of the Interior: "The domestic lead and zinc mining industry is currently experiencing difficulties. It is reported to me that from August 1952 to March 1953, 30 mines have closed, that production has been curtailed, that the number of workers employed has declined, and that prices have fallen sharply. I am also appreciative of the fact that the unprecedented flow of these metals to our shores has contributed substantially to the plight of the domestic lead and zinc mining industry. I am aware also that the governors and legislatures of many Western States have taken cognizance of this serious problem. "It may become apparent in the near future that the domestic industry by its own efforts will not be able to make a complete readjustment to the present situation without painful consequences. Inasmuch as increased imports, as well as increased domestic production, have been a factor-how significant we do not know-it is appropriate for this matter to be investigated by the Tariff Commission. This is the regular procedure established by law for dealing with situations of this kind, and, where warranted, for taking action that is temporary and can be rescinded when the temporary crisis is passed" (p. 697). The lead and zinc business is an up-and-down business, as you know, and at the present time, because of the surplus, the price is down below what it should be for profitable operation of the good mines." (P. 702.) Hon. John Foster Dulles, Secretary of State, also expressed the belief that the problems of the lead and zinc industry could be met under escape-clause action and that was the proper approach for relief (p. 623). Because of this advice from high Government officials, the lead and zinc industries are making application for escape-clause relief. A letter from the President placed in the record of the Ways and Means Committee hearings by Representative Ed Edmondson, Second District of Oklahoma, states: "This preliminary report on zinc-mining conditions in Oklahoma and the TriState area contains statements that impress me with the seriousness of this situation. "A strong domestic-mining industry is vital to national security and to the continued prosperity of our country. I hope that the administration may find a way of relieving the depressed conditions that prevail within many mining districts." Prompt relief is needed. Delay until the Commission on Foreign Economic Policy completes its studies 9 months or a year from now will weaken a basic industry which is essential to national security and wipe out smaller segments of the industry. We cannot believe that it is Government policy to liquidate small business in this country. House Select Committee on Small Business reports emergency confronts leadzinc mines The Select Committee on Small Business of the House of Representatives held a series of hearings in and near the mineral-producing centers of the Nation a |