have a number which included beryllium, alunite, titanium, used in airplane construction; manganese-those, as I understand, are all critical minerals, and so my recommendation; you asked, Senator O'Mahoney, this question; asked the question what does the West think you could do in this situation; and, it seems to me they could appoint a couple of expert men, equipped with liberty and full force, to take the information we now have, and we have considerable, and continue to enlarge on the strategic things, and educate them as you get more results that might still be useful in defense. I am afraid we are late in this, but there is the reconstruction ahead coming, and we have a perfect right to study this from the immediate viewpoint, and from a long-time view. Second, I would suggest and recommend to you that in this, you look forward to using the Federal Government services to start private industry; there are probably various ways in which you could assist. I should like to advocate private industry when it comes to continuing operations and the development of these mineral resources.

Mr. WILKERSON. Now we have something we would like to include from Mr. McAuliffe, in connection with the conclusion, on the subject of electric, or hydroelectric power.

STATEMENT OF EUGENE MCAULIFFE Resumed

PROSPECTING BY STATE UNIVERSITIES

Mr. MCAULIFFE. Senator O'Mahoney and gentlemen, I feel rather embarrassed coming back here; it has been a rather busy day, but in connection with what has been brought out about this university, I want to suggest two things very frankly: First, I think that this committee could not do a more valuable work than to recommend the extension of the Government powers to the State university force for prospecting and investigations, and make use of the State of Wyoming's services to serve it in the matter of determining what can be done and what should be done in the matter of developing the natural resources.

COMBINATION OF STEAM AND HYDROELECTRIC POWER

Second, I want to second my motion of this morning by saying I think the first and primary step that should be taken, and should be a real immediate consideration, would be to undertake to supplement the large investment made in hydroelectric power throughout the State by steam plants, whether located in the North or South, or both, wherever they could possibly be located with reference to fuel and water supply; that would supplement this very heavy hydroelectric power and furnish power to the people who seek to develop these natural resources that we have been talking about today. That is a primary requisite; calls for heavy investment; and with that under way, and definitely assured, I think that we would have an influx of, at least investigators; investigators who would come out to investigate this situation, because money is always seeking a place to invest and to make more.

Now the combination of steam and hydroelectric power has been well perfected in the case of the T. V. A. Our rainfall comes and goes in

cycles, and of course the maximum measure of power that can be secured for a given investment will take a united cause, and it will take steam power to reinforce the hydroelectric power that has been developed by the Government in Wyoming, to guarantee to provide the necessary supply of power which is asked, for the development of these things, which is said to amount to titanic amounts of ore. I am not a mineralogist or a geologist; my work has been confined to coal, but I have seen a great deal of the world, and I have listened as well to a good many things in the three-quarters of a century I have been on earth, and it seems to me we have got to devote a little bit more attention and a little bit more cooperation to better take care of our requirements today, and I think we can help by asking the committee to give serious consideration to the recommendations toward taking of the resources of the Nation, and considering them with various State universities, and investors and enterprises that are interested, the transportation has been pointed out, and for the power situation.

Senator O'MAHONEY. Thank you very much.

Mr. WILKERSON. Now we are going to conclude by asking Mr. R. E. McNally to sum up some of the things as he sees it; Mr. McNally is a good lawyer.

Mr. McNally.

STATEMENT OF R. E. MCNALLY, LAWYER, OF SHERIDAN, WYO.

Mr. MCNALLY. Gentlemen of the committee, the things I proposed to say have been said by Dr. Crane; in addition to that, I obtained a number of things coming before this committee, if you will listen to us briefly.

FEDERAL AID NEEDED

The

It seems as though we know two things here, one is the need of research investigation, and the other is money. The question naturally arises: If these minerals that we have been talking about, do actually exist, as has been testified to by the witnesses appearing here, why isn't it possible to exchange private capital for the development? answer is: The need for these things at present is temporary, due to the national enemregncy; private capital can not be interested at all in temporary matters. It is by Federal aid which will bring phyiscal exploration and development we will hope for some benefit to accrue. The errors of the past are not particularly beneficial. Perhaps the emergency of the present will bring us benefits.

DEVELOPMENT OF WATER AND COAL CHIEF CONCERN

Speaking now briefly for the concluding part of the State of Wyoming-our need; our chief concern here is water and coal. We appreciate the need and necessity of water; we appreciate what has been done by the Government in the State of Wyoming in the way of building dams and reservoirs for the conservation of the water, as well as for the creation of electric power, flood control, navigation, and other purposes, but our primary need is irrigation, and the need of water for irrigation. We are hopeful that the program of the past, in the consideration of dams and reservoirs, big ones and little ones, will continue with a lot of reservoirs and dams in the Big Horn Mountains;

they have been of inestimable value to irrigators and stockmen in our part of the country.

It has been testified here as to the great deposit of subbituminous and lignite coal in the southern part of the State. We are living on the edge of the largest deposit of low-grade coal, that is to say, subbituminous and lignite, in the entire world. That coal has competi tion value if it is to be produced, which will be available for centuries, for years unborn-not that I am going to mention the interest to our people, but Senator O'Mahoney knows what that is. If research and experimentation would show us about briquets of coal, so it could be mined and marketed at all seasons of the year, except just the winter months, and that accomplished, we will not worry; it would throw more industrial plants open than anything else that could come to us; the briqueting-the finding of a process of briqueting, and that ties in with what Dr. Crane said in regard to formulating stations for————

Senator ADAMS. You know there is an experiment going on in the school of mines at Golden, and has been going on for some years, with reference to the subject of bituminous coal?

Mr. MCNALLY. You are familiar with it, Senator O'Mahoney? Senator O'MAHONEY. Yes; Senator Adams has also taken care of that at that school of his.

Mr. MCNALLY. Well to us, that is very important.

Senator ADAMS. There are two other experimental stations for coal that are dealing with subbituminous; there is one in Pittsburgh and one in Alabama.

Mr. MCNALLY. Now again, gentlemen of the committee, let us express our heart-felt thanks for being here and indulging these questions to our way of thinking.

Senator O'MAHONEY. Thank you, Mr. McNally.

Mr. WILKERSON. That brings this to a conclusion; we think we have not overlooked a great deal, and hope we have brought you something. We do want you to know we are ready to come and present you anything you want us to, from gold to coal.

Senator O'MAHONEY. Let me make a suggestion. You have arranged this presentation today on comparatively short notice; there is no reason why the gentlemen who have joined with you in gathering this material, should not continue to work together and perhaps later on you could send us some suggestions dealing with the primary question, and how we can best utilize these resources which I know we have.

Mr. WILKERSON. We will be glad to do that.

DEVELOPMENT OF MINERAL RESOURCES OF THE PUBLIC

LANDS OF THE UNITED STATES

FRIDAY, AUGUST 22, 1941

UNITED STATES SENATE,

SUBCOMMITTEE OF THE

COMMITTEE ON PUBLIC LANDS AND SURVEYS,

Denver, Colo.

The subcommittee met at 10 a. m. pursuant to adjournment, Friday, August 22, 1941, in the courtroom of the United States Circuit Court of Appeals, in Denver, Colo. Senator Joseph C. O'Mahoney, chairman of the subcommittee, presiding.

Present: Senators O'MAHONEY (chairman of the subcommittee), Adams, Gurney, and Murdock.

Senator O'MAHONEY (chairman of the subcommittee). The subcommittee will be in order.

STATEMENT OF ROBERT S. PALMER, OF DENVER, COLO., REPRESENTING THE COLORADO MINING ASSOCIATION

Mr. PALMER. My name is Robert S. Palmer. I live in Denver, Colo., and have lived in the West all my life. I am appearing here representing the Colorado Mining Assciation, an organization which dates its origin prior to the existence of the State of Colorado.

Senator O'MAHONEY. What is the Colorado Mining Association? Mr. PALMER. The Colorado Mining Association is a semipublic organization, composed largely of small miners of the State of Colorado and adjacent States, who are primarily interested in the developing of mineral deposits of this State and of the West. I might state for the chairman's particular benefit

Senator ADAMS. Metalliferous mines?

Mr. PALMER. Metalliferous mines. We have been receiving quite a few letters and wires your constituents have sent, with samples of minerals from Wyoming, asking us to present these at this hearing. We have them in the office and would be glad to send them to you wherever you would like them. They are mostly nonmetallic; would also like to present the wires which have come in from Wyoming. We also have a statement here from one of our members, Mr. George E. Collins, which I would like at this time to present for the record. Senator O'MAHONEY. It may be received.

STATEMENT OF GEORGE E. COLLINS

Great mines do not drop from the sky, ready made. In every instance, within my experience, an ore body of the first magnitude had been known for many years before it was successfully worked. Years of effort and great expense were

61550-42-pt. 1-39

required before its extent was established, and methods of treatment or markets for its products were developed. Usually it exhausted the resources of many people before the elements for commercial success had finally been worked out. Thus in the early stages the financing of even the greatest mining enterprises is speculative in a high degree.

The same is true of small mineral deposits, of which there are at least a hundred for every deposit of what one may call the first magnitude. Yet the hundred small mines are capable of more production, taken together, than the single one; they will collectively employ more men, and will do so in a more wholesome way, than the single large organization. Contact between employees and management is closer, and employees usually take a more intelligent interest in their work, which is beneficial both for themselves and it. However, the productive period of the individual deposit is relatively short, often not more than a single year. Sometimes a small mine has had several such periods when it was profitable for a short time, sandwiched between longer periods of unprofitable effort.

Any system of taxing profits of all industries, whether investments or specu lations, on a uniform basis, irrespective of the nature and amount of risk necessarily involved, must inevitably tend to blot out new and hazardous enterprises. Applied to mines, the result will be that there will be no new or small mines, except the few that result accidentally from fraudulent and lying promotions, and the few that are created by the powerful corporations, which can spread their risks, at the expense of destroying the spirit of free enterprise which built the west.

EFFECT OF TAXES ON MINING INDUSTRY

In my judgment, the greatest obstacles to the western mining industry are the excess-profit tax and the iniquitous capital-stock tax, which, unless annual valuation is permitted, amounts to a tax on hopes and on good faith. Both in their present form tend to throttle new and small ventures, and do not even raise as much revenue as they are capable of doing, because they dry up the sources of revenue.

Most of the deposits in this State, containing zinc, lead, and copper, have "complex" ore, in which these metals occur together, with more or less silver and gold, or often both. To be really profitable, all the valuable constituents must be marketed, but if so marketed the ores are of higher aggregate value than those from which most United States production of base metals is made today. The effect is to necessitate shipment of products to custom-smelting plants, often to more than one plant.

FREIGHT RATES

At the close of the last World War, the Director General of Railroads made an arbitrary change in freight rates on matte and intermediate smelter products from Colorado to eastern refining plants, the effect of which was to place Colorado smelters on the same basis as those at Helena, El Paso, and the Salt Lake Valley, from which the distance is greater. The effect of this was to destroy the advantage which Colorado had theretofore enjoyed, and on which its smelting business had been built up from the beginning. It immediately caused the closing of the smelting plant at Salida, so that the smelting industry in Colorado was thereafter without competition, and has since remained so. Smelting rates were raised, and the volume of ore produced from the mines fell off; a reduction which has proved permanent. No improvement in this situation seems possible so long as Colorado is deprived of the competitive advantage to which its situation entitles it.

SMELTING PLANTS

This State has always been one in which the mines depend, for their market, on shipment to custom smelting plants, to which the rates for transportation are high. The charges for treatment and transportation are a first charge on the ore, so that in times of low metal prices there is little or nothing left for the mines. For this reason, Colorado mines are specially vulnerable in times of stress, for any reason, and have suffered accordingly. The only practicable remedy seems to be the reestablishment of conditions on which competitive smelting will be feasible, and smelters of more than a single type.