administer such oaths, to take such testimony, and to make such expenditures, as it deems advisable. The cost of stenographic services to report such hearings shall not be in excess of 25 cents per hundred words. The expenses of the committee, which shall not exceed $5,000, shall be paid from the contingent fund of the Senate upon vouchers approved by the chairman.

Senator O'MAHONEY. By the adoption of this resolution, the Senate directed this subcommittee to conduct a study of the mineral resources of the public lands of the United States primarily for the purpose of providing for the more effective development and utilization of these resources in the national defense, for stimulating the investment of private capital in the development of the mineral industry, and for fostering free, competitive enterprise in the production of mineral

resources.

The existence in the public-lands States of vast deposits of minerals, for lack of which the defense program has been impeded and the civilian economy is in danger of being wrecked, has long been known. The Rocky Mountain West is a vast storehouse of the very minerals to seize which Hitler has thrown his army against the continental front of Russia. Coal, oil, iron, nickel, manganese, and aluminum rather than Moscow or Leningrad are the objectives of the panzer divisions. The leadership of Germany realizes that these materials are the source of power and domination in the modern world, and it is willing to sacrifice the lives of millions to obtain control of them.

Here in America we have deposits of probably equal magnitude and value, a large proportion of which in the public-lands States has as yet scarcely been scratched. But though, year after year, the Department of the Interior, through its various bureaus like the Geological Survey and the Bureau of Mines, has made available to the public extensive reports upon these deposits and although the Nation for more than a year has believed itself to be engaged in an "all-out" effort to prepare for national defense, we have neglected some of our richest sources of economic and military power.

Now, the whole Nation is about to pay for this neglect in the Nation-wide dislocation of private industry. Our entire civilian economy is being upset with disastrous results to business in every State of the Union because we have not known how to use the vast resources on the public domain which nature has provided us.

Only last Saturday Leon Henderson, Administrator of the Office of Price Administration and Civilian Supply, announced a tentative program of restricted production in the automobile, refrigerator, and mechanical household-laundry-equipment industries. It will be necessary, he told the country, in the next 12 months to reduce production in these industries by as much as 50 percent in order to divert to defense the present short supply of steel, nickel, copper, aluminum, chromium, and other basic materials. We are, in other words, suffering so great a shortage of certain raw materials that it is believed to be necessary to endanger the very existence of a score of industries in order that the plants which are concentrating on building airplanes and guns will have a larger supply.

EFFECT OF RESTRICTIONS ON SMALL BUSINESS

The blow will be felt by small business, not by big business, for most of the defense contracts are apparently going to huge integrated, self

sufficient, wealthy units which for years have dominated our economy. It is only natural and undoubtedly altogether necessary that the Government should turn to these huge units in order to procure immediate production of war materials, but it is obvious that when the defense effort has spent itself, these units are likely to be in greater control than ever before of the raw materials upon which all business depends. The reconstruction and rehabilitation of the small industries of the entire country, which are now threatened with disaster, will be difficult if not impossible unless the executive and legislative branches of the Government unite immediately in the development and utilization of resources which we know we have.

Every little factory engaged in the manufacture of electrical applifactories which have produced hardware of brass and bronze, those which are engaged in the manufacture of jewelry, all of which need copper and brass; factories which use nickel for the manufacture of ornamental work, for electric stoves and ranges; manufacturers who turn out silver plate and use nickel, copper, and zinc as the bases of this industry; tanneries which use chromium and the great number of factories engaged in using steel for the manufacture of metal furniture, bolts, nuts, washers, and rivets, machine-tool accessories, and the like, to say nothing of the innumerable shops in which aluminum is usedall of these will be facing severe curtailment if not actual shut-down. Losses of investment by the owners, losses of business by shop keepers who depend upon the workers in such plants, to say nothing of the disastrous result which is bound to be faced by automobile dealers from one end of the country to the other, all demonstrate that this is not a western problem, but a national problem. Every community in the country which has an industry dependent upon the supply of the minerals in which the public-lands States are rich has a concern in the development of a program which will utilize these resources for the preservation of our fundamental economy.

Already the impact of shortages is being felt by industry. The hardships are not falling in one area alone, but in widely scattered communities throughout the country. Lay-offs are already anticipated in places as widely separated as Manitowoc, Wis., where the manufacture of pots and pans has been hit by the aluminum shortage; Oneida, N. Y., and Meriden, Conn., where lack of nickel is affecting the silver-plate industry. Across the country a new belt of unemployment is threatened, and, according to the reports made to me only yesterday from the office of Sidney Hillman, of O. P. M., several thousand workers are already out of employment. The pinch is just beginning, and manufacturers are talking about part-time employment in order to stretch out the work they have on hand. Towns which are dependent upon a single industry are in great danger of severe industrial experiences, yet the raw materials to prevent such dislocation are available.

WESTERN IRON ORE AND ALUNITE AVAILABLE

It is idle, for example, to talk of a shortage of steel so long as it is to be found in the West in great deposits of untouched iron ore. Since the days of the pioneers the residents of Wyoming have known of Iron Mountain, which, within 50 miles of the capital of that State, is an actual tower of iron which remains undeveloped, tens of millions of tons of it. Other millions are available in open pits near the town of

Guernsey, Wyo., and it seems impossible to believe that any manufacturer of stoves, or ranges, or furniture, or equipment of any kind which needs steel, or any manufacturer of automobiles should actually be compelled to shut down, or even curtail operations while deposits of this kind remain untouched.

In Utah there are great deposits of alunite, a raw material out of which aluminum can be made. In Colorado, Montana, Nevada, and, indeed, all through these States are to be found literally hundreds of square miles of coal and petroleum deposits, the source of energy needed for both military and civilian industries.

Is it necessary in the presence of these resources, while the Government is still appropriating millions for the W. P. A. to provide for unemployment, that we should be content to permit production to be curtailed?

We stand, as all acknowledge, upon the threshold of inflation, the primary cause of which is deficiency in production. The chief vice of monopoly is curtailment of production to maintain prices.

Can it be possible that in the presence of a vast undeveloped supply of necessary raw materials we are going to be willing to invite inflation by cutting down the production of commodities which the people want and have the money to purchase?

It requires no prophet to point out that it will be impossible to keep prices of commodities from skyrocketing if we are content to limit production, at least without making an effort to prevent it.

Instead of meekly submitting, therefore, to the utter dislocation of our national economy, instead of permitting the door of opportunity to be permanently closed to small, independent enterprise, it seems essential that the good sense of this country should assert itself and insist upon the immediate development of the resources which are to be found in the treasure house of the West.

It is not too much to say that the future of independent industry in this country depends upon a program of this kind.

This committee, therefore, has undertaken not so much to reveal any new facts and to coordinate and correlate information already at hand, but information which has been sadly neglected. We have been searching the remote places of the hemisphere for the resources which we have here at home.

Acting upon the instructions of the committee, the chairman has laid this problem before the executives of all the great railroads which traverse the West. These organizations for years have been engaged in the study of the resources of the areas they serve. They have sought from time to time to encourage development of new industries in these areas. Like the experts of the Department of the Interior, the railroad experts know what the West has to offer, and they have enthusiastically responded to the invitation of this committee to appear here and publicly give testimony that it is not necessary for America to follow a program of industrial and economic defeatism.

Agencies of the Government which are concerned in the defense effort, like O. P. M., the R. F. C., and the War Department, have been invited to attend. Agencies like the various bureaus of the Department of the Interior, which have detailed scientific knowledge of the existence of natural wealth, and the National Resources Planning Board, which for several years has been conducting a thorough study

in this field, have also been invited to attend. Agencies like the Federal Power Commission, the Bureau of Reclamation, and the Rural Electrification Administration, which have knowledge of the possibilities of developing and utilizing electric power, are also participating. Representatives of the Department of Commerce and of the Business Advisory Council, which has been cooperating for years with the Department of Commerce, are also here.

The plan of committee action is to pool the knowledge and the judgment of all groups so that this problem and its solution may be highlighted for the Government as well as for the public.

Secretary Ickes, head of the Department of the Interior, has given the committee valuable assistance and cooperation in preparing the presentation now about to begin. Before introducing him, let me say that representatives of all of the Government agencies which have assembled here may feel perfectly free to participate fully in the hearings by asking questions or making comment whenever the occasion suggests.

The purpose of the committee is to promote a constructive, study, not an adverse study, of this problem.

It is now my pleasure to introduce Secretary Ickes, who will make his statement in behalf of the Department of the Interior.

STATEMENT OF HON. HAROLD L. ICKES, SECRETARY OF THE INTERIOR, WASHINGTON, D. C.

Secretary ICKES. Mr. Chairman and gentlemen, the importance of a wise and full development of the West is becoming increasingly clear to the Nation. That is why I welcome this inquiry and offer the unreserved support of the Department of the Interior to this

committee.

On June 16, I appeared before another special committee of the Senate, the Truman committee, and said that, at some later time I should like to discuss the development of the whole area west of the Mississippi in connection with the defense program. I expressed my belief that the proper development of this region had been somewhat neglected, not by intent of the responsible agencies, not exactly by oversight, but by the policy of encouraging industrial plants to concentrate in the East. It seemed to me then, and it seems to me now, that if serious curtailments of our imports of minerals from overseas should occur, the rapid mineral and industrial development of the West would become a matter of life and death to us. We would find that the Battle of the West was as important as the Battle of the Atlantic.

Of course, the importance of the industrial development of the West is far greater than the immediate defense needs. It is a matter of special concern to the Department. Consequently I was very glad to hear of the formation of this committee, and to accept the invitation to open the discussion before it.

SEVEN FACTORS IN NEW WESTERN DEVELOPMENT

There are seven points that I wish to make today. I want to indicate them briefly at first, and then expand upon them.

First, the future of the West depends upon a greater diversification and a wider use of its resources through the development of industries located close to the resources. No section of the Nation can prosper if it is treated as a colony; if its resources are pumped out of it and it is later left stranded. I believe that the West not only has many industrial opportunities, but has the right to insist that these opportunities be utilized.

Second, the immediate prospects favor a very considerable development of western mining and western power resources. Certainly an all-out defense effort, which I personally believe we will make, would call forth a very great mining effort in the West, particularly in strategic minerals, a few of which I shall indicate later. This great mining effort would involve low-grade ores and hitherto unused ores in many cases, as well as those already developed. It could reasonably be expected to call forth, in turn, an increased fabricating and processing development as soon as it became clear to industrialists that the West insisted that it would no longer remain a raw-material hinterland for the East, and nothing else.

Third, there are still great electric power resources in the West, which could aid its growth, its industrialization, its increase in wealth. The Bureau of Reclamation, which has built such projects as Grand Coulee and Boulder, has, at my request, compiled lists of potential projects in the territory west of the Mississippi, which cover about 9,000,000 kilowatts of installed capacity and about half that amount of firm capacity. These are principally hydro, but call for steam installations to balance the systems, which would require western coal, oil, and gas.

These are multiple purpose projects. They can provide power for defense. They can provide peacetime benefits such as irrigation, rural electrification, flood control, navigation, domestic and industrial water, and recreation. They represent settlement opportunities for many thousands of families. These power plants would not become stranded war babies if we worked out in advance their post-defense uses. Even the present estimates of the Power Division and the Bonneville Power Administration of power deficiencies justify a large number of them already. An all-out defense and production effort would justify all of them in the near future. Unless we begin building these plants now, however, we will be facing even more critical shortages in a few years. Both defense foresight and national peacetime foresight warrant our getting at the first of them rapidly. We need them now on the west coast, in the intermountain area, and in the Arkansas Valley.

Fourth, the scientists of the Department could do far more for the West than they are now doing if only they were given a greater opportunity. It has been stated on the Senate floor that there was a generally unrecognized monopoly in the West called the "monopoly of information," concerning the value of western raw materials. A few companies had it. The Senators wanted it broken. I also want to have it broken, and I believe that our scientists can do it.

Consequently I recommend that Federal encouragement to the mineral industries of the West be augmented through increasing by $5,000,000 the funds available to the Bureau of Mines and the Geological Survey for investigation and experimentation immediately and a substantially larger amount for next year.

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