TABLE II.-Defense contracts in Western States, through May 31, 1941
[Department of Commerce]

1 Approximately 450,000 to 600,000 tons of this deficiency will be covered by imports. No deficiency in refining capacity, approximately 165,000 tons deficiency in mining capacity and imports. Does not include the new 300,000-ton program, as it is not known now how much of it will be completed in 1942.

4 The assumption is that 5,000,000 tons of the 10,000,000-ton program will come into effect in 1942.

Senator O'MAHONEY. I wonder if it would not be advisable at this time to have a list made for the record of the representatives from the various bureaus in the Department. That is, of those who are here but will testify later.

Would you do that, Mr. Bradshaw? Will you call the roll of those who are here, so that we may have it in the record?

Mr. BRADSHAW. Dr. Sayers, Bureau of Mines; Dr. Stabler, Geological Survey; Mr. Hewett, Geological Survey; Dr. Mansfield, Geological Survey; Dr. Mendenhall, Geological Survey; Mr. Miser, Geological Survey; Mr. Bashore, Bureau of Reclamation; Dr. Raver, Bonneville Power Administration; Dr. Fieldner, Bureau of Mines; Mr. Pehrson, Bureau of Mines.

Senator O'MAHONEY. As I stated at the outset, the committee notified all of the railroads which traverse the West. We have had an

enthusiastic response from practically all of them. Mr. William M. Jeffers, president of the Union Pacific Railroad, is here this morning, and he will be the next witness.

Before I call Mr. Jeffers may I ask all the representatives of the railroads here present to make themselves known, so that we can have them listed now?

We have Mr. Lamson, of the Burlington lines. What is your full name and position, Mr. Lamson?

Mr. LAMSON. J. B. Lamson, director of the department of industry and agriculture.

Senator O'MAHONEY. There is also someone with you, Mr. Lamson.
Mr. LAMSON. Yes.

Mr. CRABB. My name is F. F. Crabb, executive general agent.
Senator O'MAHONEY. Who are here for the other railroads?

Mr. SNELL. B. M. Snell, engineer statistician, Chicago & Northwestern Railroad.

Mr. SCHANDLER. Mr. Schandler, vice president, Northern Pacific. Senator O'MAHONEY. Are there any other railroad men in the

room?

Mr. HEMENWAY. E. O. Hemenway, Atchison, Topeka & Santa Fe. Senator O'MAHONEY. And Mr. Blanchard. Will you state your name? Mr. BLANCHARD. Howard Blanchard, Washington representative of the Union Pacific.

Senator O'MAHONEY. Give the other members of your delegation. Mr. BLANCHARD. F. W. Robinson, vice president; W. H. Holsizer, evaluation officer; E. C. Schmidt, assistant to the president; J. L. Haugh, vice president.

Senator O'MAHONEY. Now, Mr. Jeffers, will you be good enough to take the stand, please?

STATEMENT OF W. M. JEFFERS, PRESIDENT, UNION PACIFIC

RAILROAD CO.

Mr. JEFFERS. Mr. Chairman and members of the committee, I should like to say at the outset that I am going to touch on this subject only rather sketchily. I should like to say also that while it may appear that my interest, coupled with the fact that there are so many Union Pacific people here today, may indicate we have a selfish motive, that is not the case. All of us Union Pacific men are men who have been raised on the properties. We are western men. We have grown up with the Union Pacific, and are intensely interested in the development of the West, not only of our territory, the territory served by our railroad, but that also served by the other railroads, as well.

It has been a matter of great concern to us western men during past year or two, under the spur of war and preparedness and defense, to see so many industries located in the congested areas in the East. Naturally, population follows industry. We do not believe it is entirely fair to the West to see the labor of the West, skilled and unskilled, forced to leave their home States to find employment in these congested areas, knowing as we do of the tremendous deposits and tremendous natural resources of the West. It seems to us people that

more attention can and should be given to the resources of that western territory, keeping in mind that there are some 340,000,000 acres of public lands in the nine States served by the Union Pacific west of Nebraska and Kansas, or approximately 51 percent of the area.

VAST RESOURCES: TRONA

Now, we who have grown up in the West know that there are vast resources of iron, coal, and gas, and more recently those unusual deposits of trona that were uncovered west of the Green River, Wyo., millions of tons of it.

Senator O'MAHONEY. What is trona?

Mr. JEFFERS. It is soda bicarbonate. I may say, Senator, that I was talking to one of our specialists this morning, and when he got to the point of stating what trona was I suggested that he seemed to be answering how long a string was, there are so many strings in it.

Senator O'MAHONEY. I understand that it is, in a certain sense, a substitute for manganese, an element which can be used in the steel process, and that in the deposits of which you speak, it is available in large amounts.

It seems that our steel manufacturers have been going to other countries for their supply of manganese, whereas we had at home this huge deposit of trona, which I understand is capable of doing the same work.

Mr. JEFFERS. I am told that this trona is available and can be used instead of manganese ore in the production of steel.

Now, there will be several gentlemen who will follow me who can more readily and more accurately explain these various deposits to you. What I want to emphasize here is that we feel, and the people of these Western States feel, that in this new development that has been brought about because of the national emergency, if we are ever going to be recognized and if that area is ever going to be recognized, now is the time to do it.

I do not mean by that that I advocate the establishment of industry in the West which can only be used because of the demands of defense. I firmly believe with respect to the deposits we have there— of iron, coal, oil and gas, and other minerals-that if we can get started on their development, that that will be permanent.

It will have the effect also of relieving a great deal of this congestion around those areas in the East.

Anything I may say is not a criticism of what has been done. I am quite aware of the whys and wherefores of this development in the East, on the east coast and on the west coast. The Panama Canal was almost a controlling factor, but at the same time we must admit that the Panama Canal is with us. It is a necessity. Some of us railroad men sometimes think that the competition is not altogether fair, but that is neither here nor there.

In the present emergency what we should be looking for is the best method, the best way, and the best means of arriving at an end. So, we think that the Government should, as was suggested by Secretary Ickes, provide sufficient amounts of funds to admit of a proper investigation being made.

The only reason that we have not developed in the West is because, other than the precious metals of gold and silver, private business and private concerns, and individuals, could not afford to spend the money on the development and the research. Much must be done in the way of research if we are going to get all that we can get out of this western territory.

So, my suggestion, Senator, is that, as was very ably presented here this morning by Secretary Ickes, that some money should be appropriated, a sum which is adequate to do this job. I am sure that the results will be surprising.

Now, if I may, I should like to say something in a personal sort of way with respect to this railroad. The Union Pacific Railroad, as you know, was conceived as a national-defense project. It is well managed, and it is a well-financed institution. Down through the years it has continued to pay, and I am sure that it will continue to pay, dividends. Much of our business is through business, but down through the years, as you know, Senator, having come from Wyoming, the Union Pacific has been eternally after this matter of developing industry along our rails.

The question of labor, that we hear so much about, and the question of the inadequacy of the labor supply in the West, is not at all controlling, to my mind, because in this industry that you see developing now throughout the country it requires the development of housing projects in order to take care of the numbers of people. That is considerable in the East, and it will be a necessity in the West, so that is the answer to that.

I think that in brief the answer is that the West has been too far away from the primary market, and as a result business has grown and industries have developed in the East, South, and the far West. That has been quite natural, but in the present situation something else must be done. We cannot continue to put all of this development in the East.

DIVERSIFIED INDUSTRIES NEEDED

Senator ADAMS. May I interrupt a moment?

When we were just a mining area, our products had to go east. We could not consume all our products. Isn't it a fact that what is needed is the development of a varied industry, each one of which will be the consumer of the products of the other?

For instance, take the case of New England. They had certain natural resources, but they had a varied industry so that the producer of one thing was the consumer of the products of another; so that if you have developed a series of varied industries, they will be the consumers of the products of each other. Isn't that a fact?

Mr. JEFFERS. That is true, Senator. There again you go back to the fact that population follows industry. However, we have got to make a start, and if we can develop industry in the West and at the same time increase our population, diversified, of course, that will help toward solving the problem.

Senator O'MAHONEY. Is there any reason, Senator Adams, why we should acknowledge that the West must remain merely the source of raw materials and that the fabrication of those raw materials

must take place somewhere else? Is there any logical reason why the fabrication should not take place at the source of the raw materials rather than somewhere else? Of course, there have been reasons, I suppose, to prevent that. There have been other reasons, as in the case of oil refineries and in the construction of pipe lines by integrated companies, which has resulted in making it very expensive for independent refineries to operate at the source of the petroleum.

Senator ADAMS. You take Wyoming and a few other States. You produce a great deal of wool. They ship it elsewhere. Then they make it into clothes and then they ship it back. It makes the trip back there.

We raise wheat in Colorado, and we ship it to Minneapolis, and then they ship the flour back. We are continuing to do that with many of our products. We produce the raw material, and we pay the cost of the ride both ways.

As far as you railroad people are concerned, the more people you have along your lines, the better it is for your line.

Mr. JEFFERS. The more we can develop our territory, the better for our income.

As to your wheat, there has been a good deal of spreading out of milling, you know, Senator, in the last few years. I think you will find that is true of Colorado as time goes on.

Certainly, if we can develop more industry in the West and increase our population and keep our people at home, the better it will be. Our difficulty now is that these youngsters, growing up, must leave the West and go elsewhere because there is nothing for them to do. In Wyoming you have the mining industry and the railroad and the ranching interests, and that is about all.

Senator O'MAHONEY. Mr. Jeffers, you remarked at the outset that a large number of our workers in the West are now leaving the West and going to the highly populated industrial centers on both coasts. Have you noticed any great increase in that lately?

Mr. JEFFERS. Oh, yes. The Middle West is being denuded of mechanics, semiskilled. There is not anything in those States, speaking for the moment, to hold these men there. So, they are drifting into these defense industries.

Certainly, with the critical situation confronting us, it seems important that all of the States of the Union should be given consideration and that these boys should be given a chance to stay at home.

I do not mean to establish an industry which is operated at a loss. I do believe, however, that we have got everything in the West to do business with and that we certainly have a nucleus of the right kind of labor in the West; they are level-headed young fellows. I think we can get a better output from that type of man than is generally true throughout the country. They are a little better disciplined at home, I believe.

Senator O'MAHONEY. You spoke of the efforts of the Union Pacific Railroad in the West to bring about industrial development along the line. Will you care to make any comment upon the principal obstacles that you have found in the way of such development?

Mr. JEFFERS. Well, it may not be altogether accurate and it may not be fair to criticize things that have happened in the past, because,