It will be noted that the labor production cost per unit of recoverable lead and zine now is more than three times what it was in 1939. But 1939 was a year of depression for lead and zinc when prices were unprofitable and many mines and smelters were forced to curtail or suspend operations because of heavy imports of low-wage foreign metal following a tariff reduction on zinc. Relatively, therefore, it would seem that with costs 3 times the 1939 level, prices of lead and zinc at less than 3 times the 1939 prices, or 14.1 cents and 15.6 cents per pound, respectively, would be unprofitable.

The extent of the injury to the domestic mining industry caused by the excessive imports of foreign lead and zinc entering the American market at low prices may be measured to some degree by the cost of production in this country. The experience of the industry as testimony showed from the lead-zinc mining districts in the United States is that an average combined price of 31 cents for a pound each of lead and zinc is required to maintain a healthy domestic mining industry. This return would not support marginal mines, but would yield a reasonable profit to well-managed properties.

Complex ores mined nationwide

Lead-zinc mining is a national industry of consequence. Operations cover a wide territory from New York to California. Lead is produced in substantial tonnages from mines in 16 States and zinc in 19 States. But with very few exceptions production is from ores containing both lead and zinc in complex mixtures with zinc predominating in quantity as mine-production figures for the country show.

Because lead and zinc are mined in this country for the most part combined in complex ores under widely varying conditions, it is highly important to consider that price difficulties of either metal directly affect production of the other. It is the combined values of lead and zinc that make possible the mining of complex ores containing both metals. Consequently as a national industry consideration must be given to the cost of mining lead-zinc ores and to whether or not the realization from the combination of prices of lead and zinc recovered from those complex ores is sufficient to support a healthy mining industry. Mr. Vuillequez testified to the same effect concerning Mexican ores.

Imports offered at low prices

The Wall Street Journal on Monday, September 14, 1953, stated:

"Offers of foreign zinc again were reported at substantial discounts, with some metal said to have been available at 94 cents a pound ex-warehouse in New York area."

The Journal of Commerce reported on October 5, 1953:

"... there is plenty of foreign zinc being offered on the east coast at around 9 cents, and buyers have let their inventories slide as they await lower prices, which continue to be a distinct possibility."

On August 31, 1953, when the domestic price of lead was 14 cents the Wall Street Journal stated:

"Demand for lead from domestic sources last week was in good volume at 14 cents a pound, New York. Some foreign lead was offered to United States consumers last week at a price of 134 cents a pound, New York area delivery." This accounts for the subsequent price break to its present level of 131⁄2 cents.

Decline in employment

Approximately 25 percent of the production workers employed in the lead-zinc mines of the United States lost their jobs during the year ended July 1, and the

number is increasing fast. Recently smelters in Illinois have been forced to curtail production and lay off hundreds of workers because of the influx of foreign zinc.

Throughout the 19 States from New Jersey and New York in the east to Washington and Idaho on the west, where lead-zinc mining is an industry of importance, hundreds of communities and thousands of citizens depend on the payrolls of the mines. Lead and zinc mining for the most part is carried on in somewhat isolated areas where it is the only industry of consequence to support entire communities. Closing of the mines makes these communities become deserted areas and causes workers to lose their homes. Including the railroads and services industries dependent on work of the mines, and payrolls going to miners and their families, the loss in employment caused by excessive imports is many times that of the miners directly affected.

Imports and the closing of mines

Large corporations can protect themselves by moving to foreign fields and receive United States Government assistance in their efforts to produce profitably when metal prices drop too low to permit profitable operation under our wages and living standards. But where does that leave workers and their families and the smaller independent companies and their stockholders unless the Tariff Commission recommends constructive action to the President to correct the situation?

Concerning Arizona, testimony showed:

"The picture of Arizona lead and zinc mining industry since the flood of foreign metals is a drab one. The result of the price collapse was the closing down of the two large lead-zinc producers in the State and practically all of the smaller properties. Only one large producer is now operating, and operating at a loss; it is trying to save the property from being lost-once shut down, caving and flooding might prevent it from ever being reopened.

The lead-zinc industry in Arizona was a relatively young, growing industry, and the present condition of the market threatens to stunt its growth, if not completely wipe it out."

New Mexico sent word that from rannking fifth among the States in production of zinc in April 1952, with an output of 5,079 tons of recoverable zinc for the month, now not a pound of zinc is being produced. Lead-zinc mining has been a stable industry for many years and was continued during the depression years of 1930 to 1939. Large, well-equipped mines were opened during recent years. Employment at mines operating during 1952 dropped from 1,292 to 134 by October 1953.

Conditions in Nevada are similar to those reported by New Mexico. Production of lead and zinc has practically ceased.

In Wisconsin 30 mines were in operation in 1952; by September 1953 the number had dropped to 5. Approximately 495 men have been thrown out of work in the mines. Prospect drilling machines exploring for new deposits of lead and zinc numbered 45 in 1952. By September 1953 there were only eight.

Man-hours worked in Utah lead-zinc mines dropped from 2,038,568 for the first half of 1952 to 1,217,008 for the first half of 1953, a decrease of 40.3 percent. Other States and mining districts presented a similar depressing picture. Some representatives of the mining districts reported their problems in person; others filed statements with the Commission.

Charles E. Schwab, representing the Idaho and Washington Lead and Zinc Emergency Committee, stated of the Coeur d'Alene district, one of the ranking lead-zinc producing regions of the world:

"At the present time lead and zinc, as such, are being mined at a loss. Only due to silver content has the district been able to carry on."

Of the newly opened mines in the Metaline district of Washington, he testified: "A comparison of those lead-zinc districts of the United States which have no silver (such as Metaline) will reveal the unprofitable conditions existing without silver to pay for losses in mining lead and zinc."

Harold L. Childress, president of the Tri-State Zinc and Lead Ore Producers Association, composed of the major mining companies in the tristate zinc and lead mining district of Missouri, Oklahoma, and Kansas, testified concerning the serious injury sustained by the mines of his region. He presented the following comparison:

Miles P. Romney, manager of the Utah Mining Association, presented information showing that all lead and zinc produced in Utah during the first 6 months of this year was at a loss. Some mines continue to operate by selective mining of high-grade ore, postponing development work and exploring for new ore

reserves.

Clark L. Wilson, vice president of New Park Mining Co., an important independent producer in Utah, testified that the return to his mine on the market price of zinc is only 35 to 40 percent and the return on lead is 60 to 65 percent of the market price, but the mill treatment charge for concentrating the ore and the freight charge from the mine to the mill must be paid out of this return. He stated that the charges to maintain the property if it was closed down would bankrupt the company within 1 year.

Injury to workers

John Marshall, representing the Chemical Workers Union of Bartlesville, Okla., testified that the workers feel "the Tariff Commission will recommend to the President to relieve the serious condition which we face in this industry * * * and to protect the jobs and an industry which we feel is so essential to the American Government, particularly in time of war." He testified that men now were asking for work in his area.

Albert Whittaker, Jr., president, CIO Chemical Workers Union, Local 421, Jefferson City, Tenn., testified that the workers in the Tennessee Coal and Iron Division of the United States Steel Co. zinc mine at Jefferson City since October 12, 1953, have been reduced to 3 days work a week and their take-home pay cut approximately 50 percent in the face of a rising cost of living. They hope the Tariff Commission can develop a program to keep the workers employed in an industry they know, "so that they can maintain themselves in the decent standard of living."

Mr. Alton Thurman, president of CIO Chemical Workers Local 407, Jefferson and Knox Counties, Tenn., testified that his local represents workers employed by the American Zinc Corp. of Tennessee. Now only 3 of the 5 company mines remain in operation and further serious curtailment is in prospect. Workers laid off have been unable to find employment in local industry. There has been a cutback from a 6-day workweek to 5 days and a loss in take-home pay. A large new ore body was discovered in the area within the last few years.

George W. Haycock, representing members of the United Steelworkers of America working in the lead-zinc mines of Utah and Nevada, testified that the mines in his area were forced to close because of the excessive imports of lead and zine or else were holding on at a loss. He cited wage cuts in the smelters of Pennsylvania and losses of employment in Illinois because of the fall in zinc prices.

Stephen J. Nagy, representing the workers at the New Jersey Zinc Co. plant, Palmerton, Pa., testified concerning the importance of the large plant, where he is employed, to national defense. He told of the production taken for Army and Navy use and important applications in atomic-energy reactors, the manufacture of explosives and for the production of steel. He testified the workers at his plant also were feeling the effects of the excessive imports and were beginning to suffer from curtailment of operations.

Importance of the lead and zinc mining industries

The lead and zine mining industries of the United States under adequate tariff protection from the early years of the Republic until about the beginning of World War II grew to become the largest in the world.

Attention is directed to the importance of insuring the continuance of sound and healthy lead and zinc mining industries in the United States in competition with low-priced or subsidized foreign imports. The President stated the case clearly in his letter to Congressman Edmondson on May 11, 1953:

"A strong domestic mining industry is vital to national security and to the continued prosperity of our country."

The United States Bureau of Mines warned of the consequences to the security and economy of the United States of tariff reductions on lead and zinc as long ago as 1938 when cuts in the duties were proposed, stating that if the zinc industry is to compete with the low level of foreign prices and continue to supply national requirements it must become adjusted to the lower price level. The statement went on to say:

"To do this, costs of production will have to be reduced, chiefly by lowering wages and by selective mining of the higher grade portions of ore deposits, neither of which is desirable. Reduction of wages is contrary to present Government policies of increasing purchasing power, and the robbing of ore bodies is decidedly anticonservational and detrimental to the long-time welfare of the industry.

"The alternative would be a loss of part of the domestic zinc market to foreign producers. From the standpoint of public interest this likewise would be undesirable because it would aggravate the unemployment problem."

Thus it will be seen that when international tensions lessen to the extent that competitive world trade is restored, we are back again to the conditions described in 1938. Wars and great emergencies nullify the effects of tariffs. But wars and their aftermath, inflation, and additional tariff reductions have served only to make the problems of the domestic mining industry more difficult.

The effect of the reduced duties on the domestic industry was obscured by shortages and scare-buying during the Korean emergency and the recurring crises of the war and postwar years. Now with the lessening of international tensions and the return of competitive conditions in world trade the serious consequences of the concessions have become apparent.

It would seem to be in the national interest to consider that the proper function of international trade is to supplement rather than supplant domestic production. Particularly is this true in the case of metals and minerals essential to our economy and required for the safeguarding of our national security. Factors for consideration

In view of the information presented and unforeseen conditions which have developed since the duty concessions were granted, including inflation, devaluation of foreign currencies, the socialistic practices of foreign government in the purchase and sale of metals, and the need for a strong mining industry to assure national security and provide defense against aggression, an upward revision of the tariffs on articles of lead and zinc to the maximum extent permissible is urgently and immediately needed.

Conclusive evidence was given to the Commission by the domestic lead-zinc industry to show the downward trend of production, employment, prices, profits, and wages in the mines and smelters of this country and the increase in imports relative to domestic production, higher and growing inventories and the decline in the proportion of the domestic market supplied by the domestic zinc mines because of excessive imports of lead and zinc at prices below the cost of domestic production.

Suggested remedies

Opponents of tariff relief for the domestic lead-zinc mines under escape-clause action acknowledging the need of a remedy for the serious situation which prevails, suggested the use of subsidies to support the mines and provide employment. The domestic producers without exception testified that they were opposed to subsidies for many reasons, and further that subsidies are not the cure for excessive imports.

As to quotas, members of the industry have concluded that with respect to complex ores and concentrates of lead and zinc a quota system of protection would prove complicated and difficult, if not impossible to administer fairly to all concerned. Therefore, it is believed that an antidumping tax affords a solution more in the public interest than the establishment of quotas on leadzinc ores and concentrates.

The proposed tax is not a high-tariff measure but a tax to prevent dumping foreign metals on our markets at prices which are destroying the domestic industry. It is recognized that imports are needed to supplement domestic production. For this reason no taxes apply when the domestic market price is sufficient to permit the more efficient mines in this country to survive. At such levels the proposed import tax is removed, or becomes in effect a "vanishing tariff."

It is understood that protection in the form of an antidumping tax or "vanishing tariff is not available under escape-clause procedure. In this event our proposal is directed to the legislation which may be considered as a result of the Commission's report of its investigation to the committees of Congress which requested the investigation. If the Commission confines its report to findings concerning the present and possible future effect of imported lead and zinc upon the competitive position of the domestic lead-zinc industry, Congress then from the Commission's findings can determine the changes to be made in the tariff status.

Lead-zinc mining industry essential to national security

The President has stated that a strong domestic mining industry is vital to national security and the continued prosperity of our country. High Government officials have recognized the deplorable plight of the domestic lead and zine industry and suggested that the industry seek escape-clause relief. The governors and legislatures of many States have taken cognizance of this serious problem.

The National Lead and Zinc Committee, therefore, in behalf of the domestic lead and zinc mining industries, respectfully requests the Tariff Commission to recommend to the President that duties on lead and zinc be increased by 50 percent over the rates "existing on January 1, 1954.”

Much more might be added in support of the need for constructive steps to be taken to assist in retrieving the ground being lost by lead-zinc mining in the United States and on the importance of a healthy mining industry to the defense and security of our country. To a certain extent imports are needed. But would it be wise, in the world of today, to take excessive imports at the expense of a crippled domestic industry?

However, we know from experience that members of the Commission are wellinformed on the problems affecting the national economy. Workers and members of the mining industry are looking to you to take constructive action to help correct a situation which is causing much trouble for many of our people and threatens the future security and well-being of the country. Respectfully submitted.

NATIONAL LEAD AND ZINC COMMITTEE,
OTTO HERRES, Chairman.

APPENDIX 3

STATEMENT For Minerals, MATERIALS, AND FUELS ECONOMIC SUBCOMMITTEE CONCERNING ZINC MINES OF NEW MEXICO BY JOSEPH H. TAYLOR, VICE PRESIDENT OF PERU MINING CO. AND NEW MEXICO CONSOLIDATED MINING CO.

The large importation of zinc from foreiegn countries and the dumping of foreign zinc from accumulated stockpiles held by foreign countries has had a disastrous effect upon the zinc-lead mining industry of New Mexico. During April 1952, when the price of zinc started to break, New Mexico ranked fifth among the States in production with 5,079 tons of recoverable zinc. Now not a pound of zinc is being producted. Lead-zinc mining has been a stable industry in New Mexico for many years and was continued during the depression years of 1930 to 1939. During World War II this mining industry produced a considerable portion of the lead and zinc required for our armed services as evidenced by the following production figures:

Annual recoverable zinc produced from the State of New Mexico according to the U. S. Bureau of Mines statistics