EXHIBIT C.-Employment and unemployment status of persons 14 years old and over in States west of the Mississippi River, Mar. 24-30, 1940 1 1 Based on a preliminary tabulation of a 5-percent cross section of the 1940 census returns. * Persons seeking work during the week of Mar. 24-30, 1940, who were not working on private or nonemergency Government work, nor on public emergency work. Persons reported in the census as on public emergency work (Work Projects Administration, National Youth Administration, and Civilian Conservation Corps) during the week of Mar. 24-30, 1940. Source: Bureau of the Census. THE DEVELOPMENT OF MINERAL RESOURCES OF THE PUBLIC LANDS OF THE UNITED STATES WEDNESDAY, AUGUST 6, 1941 UNITED STATES SENATE, The subcommittee met at 10:30 a. m., pursuant to adjournment, in room 224, Senate Office Building, Senator Joseph C. O'Mahoney, chairman of the subcommittee, presiding. Present: Senators O'Mahoney (chairman of the subcommittee) and Thomas of Idaho. Senator O'MAHONEY. The subcommittee will come to order. Senator THOMAS of Idaho. Mr. Chairman, before starting with the other witnesses, Mr. Leo J. Hoban, of the Hecla Mining Co., of Wallace, Idaho, is present and has a short statement that he would like to make for the record. Senator O'MAHONEY. This deals with the mining law? Senator THOMAS of Idaho. It deals with the mining law and also with zinc. Senator O'MAHONEY. Very good. STATEMENT OF LEO J. HOBAN, HECLA MINING CO., WALLACE, IDAHO Mr. HOBAN. My name is Leo J. Hoban. I am an officer of a number of mining companies in the Coeur d'Alene mining district of Northern Idaho, among them the Hecla Mining Co. and the Sullivan Mining Co., the latter being owned one-half each by the Hecla Mining Co. and the Bunker Hill & Sullivan Mining & Concentrating Co. I have been in the employ of mines in the Coeur d'Alene district since 1910 and have been officially connected with Sullivan Mining Co. since 1921. The Coeur d'Alene district is one of the very large producers of primary lead and zinc in the United States. On page 10 of a statement by Bonneville Administrator Paul J. Raver, submitted before the subcommittee of the Senate Committee on Public Lands and Surveys on Thursday, July 31, I find the following language which follows a statement relative to the lack of development of mineral resources in the Pacific Northwest: We certainly must question why they have been so long held back. For example, I am greatly puzzled why electrolytic zinc capacity has not been added to the Pacific Northwest when it is obviously necessary and feasible on the basis of available concentrates and cheap power. 61550-42-pt. 1- -33 This statement is followed by similar indications of puzzlement relative to the lack of other developments. Perhaps a statement from an active mine and smelter operator would dissipate some of Mr. Raver's bewilderment. I realize that Mr. Raver is a comparative newcomer to the Northwest and consequently is notin fact, he does not pretend to be-thoroughly familiar with the problems inherent in the mineral and metallurgical development of the Northwest. Mr. Raver refers confidently to the abundance of available concentrates in the Pacific Northwest. He fails, however, to explain just where these concentrates are to come from and the conditions under which they will become available. It is a matter of common knowledge that the supply of zinc concentrates in the Rocky Mountains area is dependent on the price not only of zinc but also of lead and silver. At present prices, 7.25 cents per pound for zinc, 5.85 cents per pound for lead, and 71 cents per ounce for silver, there is a large supply of concentrates available, though I wish to emphasize here that even these relatively satisfactory prices have not produced an oversupply; in fact, there is currently a definite shortage of both lead and zinc. The reason for this interdependence of prices is also well known: The principal production of the Rocky Mountain area is from mixed lead-zinc ores, which are also silver-bearing. There is only one purely zinc producer in this area, and its production is only about 10,000 tons per year. I do not know of any mine producing only lead. The production of concentrates being entirely dependent on price, it is interesting to examine the price for zinc per hundred pounds for the last few years. The average St. Louis prices for the years 1929 to 1940 were as follows: In 1930 Dr. Ingalls, the eminent medical authority on metal prices, in his book World Survey of the Zinc Industry, gave it as his judg ment that the American zinc producer no more than broke even at 4.50 cents per pound for zinc, and that as to the European producer, the equivalent was about 3.00 cents. You will note that in the 12 years preceding 1941 there were 5 years when the price was lower than 4.50 cents; 3 years when the price was only slightly over 4.50 cents, it being less than 5.00 cents; 1 year when the price was slightly over 5.00 cents; and 3 years when the price was over 6.00 cents and less than 7.00 cents. The years 1929 to 1940 are used because they are years intimately connected with the history of the Sullivan Mining Co. Development of the Star mine of the Sullivan Mining Co. was started in 1921; the ore was found in December 1924. Stoping was initiated as fast as levels could be opened up. We had no difficulty in disposing of our lead concentrates, but there was no domestic market for zinc concentrates on any reasonable basis; we were compelled therefore to contract with Belgian smelters for the shipment of these ores abroad. During all of 1925 and 1926 shipments continued to Belgium. The situation was an unsatisfactory one in many respects, however, and in 1926 the construction of our own zinc. smelter was started. It was decided to erect an electrolytic plant using the Tainton process, with which process the company had been experimenting for several years. The plant was completed in 1928, and it was late in 1929 before it was thoroughly shaken down and operating at its full capacity of 50 tons of slab zinc per day. In July 1929 lead and zinc prices started to decline, and stocks of zinc piled up in the hands of the Sullivan Mining Co: until they reached a total of 10,000 tons. This tonnage was sold later at the lower prices prevailing; the quotational loss was $60 per ton-$600,000. As demand for zinc declined, the operation of the plant was decreased, and at one point in 1932 the plant was operated at only one-sixth capacity, with large operating as well as quotational losses, since we were in a falling market all of this time. In the meantime development of the Star was disappointing. While a large tonnage was developed, it was too low grade for profitable operation except at relatively high prices. For this reason the mine was shut down during the period 1930-35, and during a period of each of the years 1936, 1937, 1938, and 1939. It has been operating steadily since September 1939, since the price justified its operation, though only in the year 1941 has it made a profit, and this profit is negligible. The loss to the smelter of the Star mine concentrates caused a contraction of operations there, and it was very difficult to keep the plant going. Except for a short period in 1936 and 1937, the smelter, since 1930, was not operated at capacity prior to September 1939. In the face of all of these difficulties, the management of the Sullivan Co. never lost faith in the enterprise. They were experienced mine operators and knew that the zinc industry was notoriously of a character where there was either a feast or a famine, and that one or two good years out of 10 would ordinarily wipe out operating losses of poor years and leave a moderate over-all profit for the period. EFFECT OF TARIFF REDUCTION ON ZINC Therefore in 1937, it was determined to add 50 percent to the capacity of the zinc plant. Construction was completed in January 1938, but in the meantime an event had occurred which not only made it impossible to operate the new unit, but also shut down the Star Mine, and within 60 days it had closed down one-half of the productive capacity of the old plant. The event was the announcement of a reciprocal trade agreement with Canada, which by its terms reduced the duty on zinc from 1.75 cents per pound to 1.4 cents and reduced the duty on cadmium-a byproduct of zinc, erroneously referred to as a byproduct of copper in the statement of the State Department-from 15 cents per pound to 7.50 cents per pound. The announcement of the agreement, made public in November 1937, resulted in a precipitate decline in the price of zinc, as is well illustrated in the following average monthly prices per hundred pounds of zinc at St. Louis for the |