crops where the individual owner usually lacks the funds or the inclination to produce unless the price becomes very high, I have often wondered if there was a stock pile of tungsten and if a substantial purchase might be inaugurated where the price would be established which would be fair and would permit those people to produce, and the price might be one higher than the normal market price, and that increase in price would justify conducting certain other explorations beyond just the so-called surface work, and I am thinking back in terms of the last war, when many people made money by scouting around and picking up a bit of tungsten here and there.

Mr. HEWETT. The question you are raising, Mr. Janssen, has been raised rather frequently in the last 5 years, particularly during the last 2 years, with respect to manganese and chrome and tungsten and such strategic minerals. I would say with respect to tungsten that such a plan has some merit. As to that, I think tungsten-more so certainly than manganese--that the presence of a little is apt to indicate recoverable deposits of some size. I think that is true although it is hard to generalize about that, but there are lots of places in the country where scheelite occurs as mineral specimens. However, by and large, in our work we have in the past 2 years probably examined in a preliminary way 40 tungsten occurrences. We have made about 15 highly detailed studies, but I should mention that of those we have examined of the rather hopeful sources there was a little scheelite which depended on the conditions of the occurrence.

Mr. WHITE. That means that there should be some inducement made to that owner to prosecute his occurrence? In other words, in normal times we have had such variation in the price of tungsten that usually he would have to borrow some money to start the operation, and when it came time to pay the loan off, the price had dropped.

Mr. HEWEIT. The proposal you made would not be as productive as it would be during the first World War, because right now the treatment of low-grade scheelite ores has been well worked out, and they are readily susceptible to treatment in small unit plants. Now, that was not the case in the last war. The technique of recovery was not as highly developed in 1917 as it is now. Now it is highly developed.

Mr. WHITE. Well, with regard to the subject of inducement, I would like to make the observation of the willingness of private capital to go into the reserves and explorations of the mineral reserves, particularly the metals that today have not officially higher price, but that is being held back by tax laws considerably.

Senator O'MAHONEY. You mean the prospective tax law or the present tax law?

Mr. WHITE. Both. More of the latter.

Senator O'MAHONEY. Of course, it is perfectly obvious that until the private investor knows what the tax rate is going to be, there is a tendency to hamper his activity.

Mr. WHITE. That applies to any venturesome enterprise, but I think especially to mining. A large company can afford to spend a half million dollars a year, whereas the small company cannot, in order to keep up its supply of raw materials. The small investor is very reluctant to take that chance when he cannot make much money even if the thing is successful, or he cannot keep much of what he makes.

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Senator O'MAHONEY. That is true certainly of certain minerals, some of which it is difficult to reach, or the quantity of which is small. In other words, where the expense of recovery is great, there is that difficulty. There you have an inducement only for large capital or a larger company or the Government, but the Government will undertake that frequently solely for the purpose of obtaining such metals for the purpose of national defense where that is absolutely essential, and no question of profit enters.

STATE TAXATION

Mr. HEWETT. I think Mr. White has in mind the situation as it exists in some States, such as Minnesota, where the State taxes the reserves in the ground. Until the passage of those laws there was a vigorous campaign of drilling and search for manganese ore in the Cuyuna range. As soon as those laws were passed in the State, the prospecting search for those ores ceased, and there has been practically no drilling in the Cuyuna range for 20 years.

Of course, in other States there is a taxation on values. A man' proves his ore far in advance of a chance to mine it, and he pays a tax on having established his own future.

Senator O'MAHONEY. Thank you very much, Mr. Hewett.

Mr. COWDEN. May I say a few words, Senator, to correct something I said?

Senator O'MAHONEY. Yes.

Mr. COWDEN. You asked me if there were any minerals on our lands. I said no, so far as I knew, having in mind no deposits of any extent; but there are occurrences or deposits in different places throughout the grant, and we have under lease, I suppose, probably 25 or 30 leases of minerals for mineral prospect of various kinds, but so far as our engineers know, none of them are of any importance.

I, further, did not have in mind petroleum. I was thinking of metals. There is a small area in the Fresno County in the San Joaquin Valley of approximately 275 acres, which has been developed by the Amerad Petroleum Co. I think there are seven wells on the property. Then north of there and south there are several large companies, which spent five or six million dollars in drilling and in geological work, but there has been found nothing of commercial value.

Farther south in the San Bernardino Valley there are a few small wells of higher-gravity oil. Here and there there are a few wells, but they are not extensive producers.

In some industrial property in Long Beach area, I think the General Petroleum Co. has drilled 17 wells. They are drilling oil sands there at different depths.

Senator O'MAHONEY. The Southern Pacific received originally a rather extensive land grant rich in minerals, did it not?

Mr. COWDEN. Particularly in oil, Senator.

Senator O'MAHONEY. Did not the railroad after that divest itself of that?

Mr. COWDEN. Yes.

Senator O'MAHONEY. To another corporation?

Mr. COWDEN. Yes.

Senator O'MAHONEY. What was the name of the other corporation? Mr. COWDEN. A corporation was formed called the Pacific Oil Co.,

the stock of which was, as I recall it—and it has been 20 years agothe stock issue was made to the owners of the Southern Pacific Co. at a price, but later on the Standard Oil Co. of California bought the stock of that company, which owns that property now.

Senator O'MAHONEY. So it is not affiliated with the Southern Pacific Railroad at all?

Mr. COWDEN. No.

Then we have some oil down in Texas. The only proven territory we have in California-that is, in the land grant-is this small area of the Amerad Co.

There is a lot of geological work being carried on there, but our people do not seem to be very hopeful for it.

Senator O'MAHONEY. This subsidy which the Government granted to the railroad to help finance the construction of the railroad was distributed among the stockholders of the railroad when the new corporation was formed, as I understand it; then the affiliation terminated, and the Standard Oil Co. of California now controls that original grant of land, or what is left of it?

Mr. COWDEN. Yes; what is left of it.

Senator O'MAHONEY. Thank you very much.

Now, this afternoon Dr. Mansfield, Mr. Miser, and Dr. Sayers will probably be ready to testify.

What will you discuss, Dr. Mansfield?

Dr. MANSFIELD. The nonmetallic minerals.

Senator O'MAHONEY. And what will you testify to, Mr. Miser?
Mr. MISER. Fuels, coal, oil, and gas.

Senator O'MAHONEY. Before closing, let me thank you, Mr. Hewett, for your very interesting statement.

Mr. HEWETT. Thank you, Senator.

Senator O'MAHONEY. This committee will stand in recess until 2 o'clock.

(Thereupon, at 12:30 p. m., a recess was taken until 2 p. m. of the same day.)

AFTER RECESS

(The hearing was resumed at 2:15 p. m., on the expiration of the recess.)

Senator O'MAHONEY (chairman of the subcommittee). The committee will proceed.

Will you take a chair over here, Dr. Mansfield?

STATEMENT OF GEORGE R. MANSFIELD, GEOLOGIST IN CHARGE OF THE SECTION ON AREAL AND NONMETALLIFEROUS GEOLOGY, GEOLOGICAL SURVEY, WASHINGTON, D. C.

Mr. MANSFIELD. My name is George R. Mansfield. I am geologist in charge of the section on areal and nonmetalliferous geology, Geological Survey.

REPORT ON NONMETALLIC MINERALS

Mr. Chairman, it has already been brought out before this committee that the supply of many of the nonmetallic mineral deposits, such as limestone, gypsum, sand, gravel and clay, and so on, in the West is very large, as it is in many other parts of the country. Therefore it has not seemed to me worth while to undertake a description of the

deposits or to pay any particular attention to those materials. You have already heard from some of the gentlemen representing the railroads that many such deposits are along their lines. It seemed to me that I would better select a few things from the nonmetallic field and mention those.

This morning Mr. Hewett pointed out that mica was one of the strategic minerals, so I have made brief mention of that. This little map here in the corner [indicating], which is on too small a scale to be seen far away, differentiates some seven minerals. You will see the little symbols that represent mica distributed in a number of Western States. Many of these deposits have been known for many years and some of them have been worked for a time. But though some of them contain sheet mica, most of the deposits furnish scrap mica, so the total amount has not been very large.

Perhaps the most consistent producer of mica in the Western States has been South Dakota, but at the present time about 88 percent of the sheet mica and more than 53 percent of the scrap mica is produced in the three Eastern States of North Carolina, New Hampshire, and Connecticut. Something more could be done in following out these deposits of mica in the Western States, and possibly some further production of sheet mica could be obtained; but at the present time the bulk of it comes from the Eastern States.

Senator O'MAHONEY. What is the principal use of mica?

Mr. MANSFIELD. Well, I am not prepared to speak of it in detail, but it is highly important, particularly in the electrical industry, in such things as radios and other electrical appliances. That is the sheet mica, which needs to be used in fairly large pieces or needs to be large enough to be punched or cut into circles which can be used in various types of electrical apparatus; and it needs to be pure enough, clear enough, and flat enough so that it will act evenly. Impurities, breaks, or things of that sort interfere with its usefulness.

Senator O'MAHONEY. I take it that the use of mica is increasing? Mr. MANSFIELD. Yes; certain features of it. Of course, as the radio and electrical industries expand, those demands will increase. Also, it is finding use in ground-up form in such things as paint, and so on, to which it adds an attractive quality. Statisticians of the Bureau of Mines keep track of those things, and they can give you actual figures on the production increase if you want to follow that up.

ASBESTOS GRAPHITE SALT

The next item I wish to speak of is asbestos. Asbestos is not a strategic mineral. I believe it was not listed this morning among the critical minerals. It is, however, an essential mineral, and a mineral which does not occur in such very large quantities in this country. However, Canada is close by, so there is not much likelihood at present of supplies being cut off from that source. Therefore, it does not seem to be critical or strategic at the moment.

Asbestos occurs in two principal varieties, one of which is known as chrysotile, and that is characterized in the main by fibers that are flexible, easy to spin, and smooth. Those that are long enough to spin, a fraction of an inch or longer, will have quite important use. There is another kind called amphibole, which is also fibrous, but the fibers are harsher, not so smooth, and more brittle. That type finds a very much lower degree of use than the other type. This type, however, is more resistant to heat and acids and has certain uses where high temperature and chemicals are involved, but it is not the kind that is most widely used by the industry.

In the Western States we have one of the two principal producers in the country. That is in Arizona. You will see a big spot on the map there toward the southeastern part of the State. It is not known how large deposits are there, but supplies seem to be ample for some operation. It is quite a large deposit. The other one is in Vermont. Though smaller amounts occur in other States, those are the two principal States at the moment.

Another mineral mentioned this morning as being a critical mineral is graphite. That is produced only in small quantities in this country.