and I fully believe that at least 98 percent of the metal now in the stock piles is foreign metal. MERCURY DUMPED ON DOMESTIC MARKET BY UNITED STATES GOVERNMENT AND EUROPEAN CARTEL SINCE V-J DAY DESTROYS AMERICAN MINING INDUSTRY Since VJ-day, the United States Army, through the U. S. Commercial Company, has dumped on the domestic market at below the market price captured stocks of Japanese mercury partially shipped to Japan from Italy during the war period; the foreign War Assets Administration sold some captured stocks in Germany at prices far below the world market. Even Russia has offered, although I believe not sold, stocks of mercury for United States consumption through agencies in Brazil. Yugoslavian metal from the Idria mine in Trieste area has been and is being sold on the domestic market at ever lower - and lower prices. In the meantime, the European mercury cartel, representing AlI maden mines in Spain, owned, controlled, and operated by the Franco government, and the Mount Amiata and Cielle mines, controlled by the Italian Government, was reestablished. The actions of the cartel in repeatedly lowering the price has probably been twofold, to give them the benefit of the doubt. Both Italy and Spain were in dire need of dollar exchange and since in both cases this requirement overshadowed general economics, it may be that the forced sale of mercury in this country was under orders from the Government. On the other hand, on May 18 of this year, the following cable from London, published in the Metal Reporter, gives a very explicit reason for the cartel's actions: LONDON.-It is understood that the Spanish-Italian quicksilver group's price for the United States market has been raised by $2 to $54 a flask, f. o. b. The previous quotation of $52 was the lowest level at which the group sold in order to overcome the heavy United States import duty on foreign metal while maintaining their general world price at $60 f. o. b. The advance is attributed to the elimination of the greater part of United States domestic production owing mainly to these cheaper offers. I think that might well be brought to the attention of the Department of Justice in connection with the Antidumping Act of 1916. It provides the three necessary causes for action under the antidumping law. Mr. D'EWART. Mr. Chairman, could we have that cablegram read again? Mr. WILLISTON. Certainly. [Reading:] It is understood that the Spanish-Italian quicksilver group's price for the United States market has been raised by $2 to $54 a flask, f. o. b. The previous quotation of $52 was the lowest level at which the group sold in order to overcome the heavy United States import duty on foreign metal while maintaining their general world price at $60 f. o. b. The advance is attributed to the elimination of the greater part of United States domestic production owing mainly to these cheaper offers. The interpretation is that the cartel absorbed a large proportion of the tariff, and sold for United States consumption at below the price they would sell to anyone else for the purpose of destroying domestic production, which they have done. Whatever the reasons behind these extensive imports were, whether it was to replace the cartel's prewar markets in Germany, Japan, and England, whether it was a desire to get dollar exchange at any cost, or whether it was a deliberate act designed to destroy the American industry, the result is identical. COMPARATIVE TUNGSTEN PRICES AND PURCHASE POWER SINCE THE YEAR 1610 At the present time, with the quicksilver market in New York quoted at $74, it is almost exactly the same as the American market price in 1935. Quicksilver at that price will buy less than at any time in the last 2,000 years, so far as I have been able to discover. In 1610, when the Huancavalica mine in Peru was at its height, one flask of quicksilver bought 180 days of labor. In 1875, when the new Almaden mine in California was at its height, one flask of quicksilver would buy 25 days of labor. In the depths of the depression, when quicksilver sold at approximately $50 a flask, it would purchase 11 days of labor. During the war years, one flask of quicksilver would again buy 25 days of labor. At the present time, with the operator receiving something less than $70 at the mine, one flask of quicksilver will buy less than 7 days of labor. ONLY 2 OUT OF 197 MERCURY MINES IN THE UNITED STATES REMAIN IN OPERATION; GOVERNMENT AUTHORITIES INDIFFERENT As a result of these 1935 prices in the face of 1948 costs, the quicksilver industry has dropped from a total of 197 mines during the war years to its present level of two full-time operating mines. One of these, the New Idria mine, will close some time during the month of July. The one remaining mine still struggling to exist finds the operating loss less than the shut-down loss and will continue until prices drop a few dollars more or costs increase a similar amount. Even if this mine is able to continue, the total domestic production will be at its lowest point in a hundred years and if it should close, it would be the first time since 1847 that no quicksilver was produced in the United States. As I have pointed out above, the cause of this closure is the result of the domestic industry doing too good a job during the war and the result of errors in judgment on the part of our own Government during the war years and the result of the active machinations of the European quicksilver cartel whose expressed desire has been to eliminate the American producer from the world market. Those of us in the industry have been familiar with the definite course of events during the last few years and we have kept the Government authorities in Washington fully informed throughout that time. The results to date have been nil. The industry is no longer able to operate at a loss. In spite of the fact that at the present time proven ore reserves on the basis of prewar grade, prewar prices, and prewar costs, are probably in a more favorable situation than at any time since 1890, the producing mines are being closed and allowed to fill. SEVERAL YEARS WILL BE REQUIRED TO REOPEN LARGER MERCURY MINES In the case of the largest producer, the Idria mine, the present ore bodies are being extracted through considerable distances of old workings. Once maintenance ceases and these openings cave, it would take years to reopen the property. The Hermes mine in Idaho, with relatively large proven moderate grade reserves, is in an area of exceedingly bad ground. It takes constant watching to keep the haulage ways open. Even a short abandonment would cause extensive loss and require considerable time. to be reopened, if at all. The industry's second largest mine, the Cordero mine in Nevada, is one of the deepest operating mines in the country at the present time. The water encountered has an average temperature of over 110 degrees. If this property is closed damage from hot water and the loss of the shaft would probably require 2 to 3 years to reopen. Mr. LEMKE. We have a quorum call. It is the second call. We will be right back. We will recess for 5 minutes. I will say to the subcommittee this is a very important witness. He knows his business. I think we had better all hurry back. Mr. WILLISTON. Thank you. (Whereupon, at 11:20 a. m., a short recess was taken.) Mr. LEMKE. The committee will please come to order. NATIONAL SECURITY ENDANGERED BY ABANDONMENT OF MERCURY MINES IN THE UNITED STATES Mr. WILLISTON. I am giving you these facts in connection with the quicksilver industry, so that the record may be clear. If there were a reasonable assurance of peace for considerable years to come, I feel that there would be no national loss in the closing of the mines and the abandonment of the industry. If this is not the case and there is any estimated need of mercury for national defense from domestic sources, then I think due consideration should be given before the industry is allowed to die, for I feel quite confident that should it die and the trained personnel peculiar to the quicksilver industry be dissipated, that there is little likelihood of any domestic operator inviting again the treatment he has already received in the last few years. I am not at the present time endorsing or encouraging any particular type of legislation. Insofar as the stock piles are concerned, there is no immediate need for the metal for national defense purposes, due to the considerable amounts of foreign metal already in those stock piles. Should it be the decision of the authorities to rely upon the European cartel for future supplies of metal, I think I should, however, draw attention to the fact that in the last war the cartel, thinking they had a monopoly of the metal, charged all that the traffic would bear, and further, that the cartel sources, Italy and Spain, are directly in the path of any westward-moving armies. Knowing the ruthlessness of that cartel, I doubt whether the United States Government would receive any better treatment at their hands than the domestic mercury industry has in the last few years. DOMESTIC TUNGSTEN MINING INDUSTRY ALSO ON VERGE OF COMPLETE EXTINCTION While my own operations are principally concerned with quicksilver, I think it well to bring to the attention of this committee the current situation of the tungsten industry. For a good many years in the metal business, quicksilver has frequently been the guinea pig which responded most sharply to domestic and foreign situations. Its death at the present time is being closely paralleled by the tungsten industry. At the Geneva Conference under the Reciprocal Trade Act, the tariff on tungsten was drastically cut. Last week, President Truman put into effect that tariff reduction. As an immediate result, the price of foreign metal in bond in New York was set at $18 per unit. With the new tariff of $6 per unit, the present domestic price of tungsten is now $24, a drop of $6 from the previous market price of $30 per unit. Mr. Charles Segerstrum, president of the Tungsten Producers' Association, informed me yesterday that in his opinion at these prices no tungsten producers in the United States may operate without very serious loss. The Nevada-Massachusetts Co., the oldest and one of the three largest tungsten producers, will close within 90 days, and it is the fixed conviction of Mr. Segerstrum, who authorized me to quote him, that no tungsten will be produced in this country after that period. DESTRUCTION OF PROMISING DOMESTIC ANTIMONY MINING INDUSTRY IMMINENT It might be well to also give this committee a very brief statement as to the present situation of the domestic antimony industry. The Yellow Pine mine at Stibnite, Idaho, operated by the Bradley Mining Co., is now producing 40 percent of the domestic consumption of new antimony metal. The antimony tariff was also cut last week. It may well cause the Bradley Mining Co. to withdraw their public statement that they plan to erect a million-dollar antimony smelter in Idaho to handle these concentrates. In any event, any further cut in the antimony price or any excessive supplies from China, will also destroy our new and promising antimony industry. In conclusion, it would seem to me that while our domestic stock piles of quicksilver and tungsten are reasonably well supplied, it would be extremely inadvisable from a national defense standpoint to abandon completely two or three more of our strategic metal producing industries and let them follow into oblivion the chrome and manganese operations developed at such great expense during the war years. Mr. LEMKE. May I ask you to repeat the three industries that would be endangered or are endangered by the agreement at this international conference just closed? Mr. WILLISTON. Antimony and tungsten. Quicksilver was not included in that. We are dying from the activities of the industry is dying as a result of the tariff cut. is threatened but is still all right. It may go. cartel. The tungsten The antimony industry DOMESTIC TUNGSTEN PRODUCTION CURRENTLY 50 PERCENT OF REQUIREMENTS Mr. LEMKE. How much tungsten did we produce in connection with our domestic requirements? Mr. WILLISTON. During the war? Mr. LEMKE. Well, at present? Mr. WILLISTON. Well, at present it is about 50 percent of our domestic requirements. During the war it was about the same due to the Bradley mine at Yellow Pine, where, at that mine alone, over 40 percent of the peak war production was produced in this country by the Bradley mine. That deposit is exhausted, however. CHINA PRINCIPAL TUNGSTEN PRODUCER OF WORLD Mr. LEMKE. Where do we get our principle source of tungsten? Mr. WILLISTON. China, a little from Spain, some from South America. China is the principal tungsten producer of the world, though. Mr. LEMKE. In case of war, would the Chinese production be virtually cut off from us? Mr. WILLISTON. I should think so. NATION'S MANUFACTURING CAPACITY WOULD BE HALVED WITHOUT TUNGSTEN FOR CUTTING TOOLS Mr. LEMKE. How essential is tungsten in war, if you can tell us? Mr. WILLISTON. I would say that without it, for high-speed cutting tools alone, the productive capacity of our total domestic manufacturing industry would be cut in half. High-speed steel is absolutely essential for any machine operations. PARTIES TO EUROPEAN MERCURY CARTEL Mr. LEMKE. You made some reference several times to cartels. Who are the governments, or the principal parties in that cartel agreement? Mr. WILLISTON. In the European quicksilver cartel, which is probably the most ruthless cartel in existence, it is even worse than the diamond cartel, is composed of the manager of the Almaden mine in Spain, who is appointed by the Spanish Government. The Spanish Government owns the mines. The other member of the cartel is an Italian, W. T. Cielle mines, in which the Italian Government, I understand, has over a 50 percent interest. The Mount Amiata mines have a rather extensive Italian mortgage loan, corresponding to our RFC, and the Italian Government controls the policies of those mines. Now, while neither government actually participates in the cartel, they have the control of the mines, and of the men who are members of the cartel. The cartel meets-it has been meeting in Switzerland. The meeting last month was in Amsterdam. Their agents have changed from time to time. They had an agent appointed in New York, but he got a little worrisome about it and backed out of the deal, so the cartel operates in the United States usually through London. |