Senator O'MAHONEY. These figures you gave were as of what year? Mr. MILNER. 1922.

Senator O'MAHONEY. You don't know whether that exists now or not?

Mr. MILNER. No. That just gives a little inkling

Senator O'MAHONEY. O. K.

Senator MURDOCK. Let me ask this question: If the purchases of this particular company that you have in mind are divided between your major steel companies down there, or their subsidiaries, on a fixed percentage, then it would be rather impossible, would it not, for any independent operator to come in and get it?

Mr. MILNER. Wouldn't have any percentage left for the other fellow.

Senator MURDOCK. Yes.

Senator O'MAHONEY. You may proceed now with your original

statement.

Mr. MILNER. Now, at that time the steel-producing capacities [reading]:

At San Francisco, 288,000 tons.

Seattle, 150,000.

Portland, 42,000.

Los Angeles, 102,000.

Senator O'MAHONEY. That is as of 1922?

Mr. MILNER. Yes. Now, that was about 580,000 tons.

Senator O'MAHONEY. Now, conditions have changed since then. Mr. MILNER. The present estimates run to 850,000.

Senator O'MAHONEY. Now, if you will go back to your original statement, Mr. Milner, please.

MARKET POTENTIALITIES OF WEST COAST

Mr. MILNER. The comparative rate data will be submitted in a brief by Mr. H. W. Prickett, chairman of transportation and freightrates committee.

Inquiries indicate that iron and steel consumption in the Intermountain and Pacific coast areas run normally at about 3,000,000 tons per annum. Open hearth steel ingot producing capacity on the Pacific coast is indicated at 304,000 tons in Los Angeles area; 575,000 tons in San Francisco Bay area; and 170,000 tons in the Seattle district-a total of 849,000 tons.

These furnaces have been served for many years from available scrap supply, which is rapidly diminishing and must be replaced with pig iron.

Testifying before the Senate Monopoly Committee in Washington in November 1939, Mr. T. A. Loretz, of Los Angeles, speaking for the west coast steel mills, said he expected the committee would deal with the western steel situation, and that, as a result of said findings, he anticipated increased demand for iron and steel from Utah. He recognized there must be some realignment in the steel industry as it affects Pacific-coast business. Also, that Pacific-coast mills are anxious to enlarge their plants if they can find a way of meeting competition with the larger steel mills in the east, which, by reason of water rates through the Canal, are able to undersell Pacific-coast mills on

many kinds of steel, with the result that many kinds of steel used in the western part of the United States come from the east.

He also stated that structural steel and other bulky shipments are admirable water cargo, and that the element of time was not always a factor on deliveries. He stated that if the Pacific-coast mills were given an opportunity to expand, they would look particularly to Utah for their pig iron, or for their partially fabricated steel and ingots. An operation here should not go into the fabricating end, but should give the small fabricators an opportunity to carry on their business and be a source of supply for them.

A recent survey of west-coast industries, it is reported, indicates the need for an expansion in pig iron and steel production capacities to 2,600,000 tons per annum, which would require an increase of 1,750,000 tons per annum to the present 850,000 tons producing capacity of the coast. Assuming that scrap will not be available, it would require 8 additional blast furnaces of 600 tons daily capacity each, to meet the situation. This would require the production and movement of approximately 3,000,000 tons of iron ore, 2,600,000 tons of coal, and 750,000 tons of limestone annually. The presently indicated iron ore reserves of southern Utah would make possible the total production of 50,000,000 tons of pig metal, and ample coking coal reserves are available for production of coke necessary to meet the iron ore situation. The coal situation will be submitted by Mr. E. H. Burdick, chairman of the coal committee.

It is thought that steel production in Utah should be confined largely to the production of ingots, blooms, billets, and bars, which would make available the semifinished steel necessary to serve the many small steel fabricating plants on the Pacific coast which produce miscel laneous finished iron and steel products such as pumps, drill rigs, dredges, tractors, castings, corrugated pipe, engines, cans, and so forth, and thus permit them to expand their capacities to meet their market requirements. Plate mills should be established on the coast to meet the requirements of the government shipbuilding program. Pacific coast tin plate consumption alone normally runs between 400,000 and 450,000 tons per annum, with only 30,000 tons produced at the Pittsburgh-California plant of the Columbia Steel Corporation.

In the production of steel in Utah, the use of hot pig metal from the blast furnace, in charging open hearth furnaces, would effect considerable saving in production cost, which would be an advantage to coast fabricators procuring semifinished steel from the Utah operation.

The thought occurs that an analysis of steel, basic prices at Pittsburgh, Birmingham, and Chicago, as related to delivery costs by rail and through the Panama Canal, and all-rail movement from eastern manufacturing centers to the Pacific coast, as compared with rates now established from Utah to various coast points, would disclose that the saving on transportation costs alone, from Utah to coast points, would entirely repay the capital cost of a major iron and steel operation in Utah, if the freight saving was credited to the cost of steel entering into the Government's shipbuilding program on the Pacific coast, and enable the coast fabricating plants to expand facilities rapidly in the interest of the defense program.

Senator O'MAHONEY. Thank you very much, Mr. Milner.
Now your next witness.

Mr. PLUMHOF. Senator, may I ask a question? Senator O'MAHONEY. Certainly. Give your name, first, to the reporter.

Mr. PLUMHOF. H. J. Plumhof. I am a member of the Publicity and Industrial Development Commission of the State of Utah.

OWNERSHIP OF TRANSPORTATION FACILITIES BY PRODUCERS

Mr. Milner, in your research have you made up your mind as to whether it is to the interest of the development of Utah that an important manufacturer, such as the United States Steel, should be permitted to engage in the transportation business and own vessels, while their competitors perhaps are not so situated?

Mr. MILNER. Well, quite a number of years ago I was a member of the marine conference that was studying the Government policies on shipbuilding and ship operations, and at that time I thought conditions were such that the manufacturing people who owned steamships were using that advantage rather ruthlessly. Whether they have changed, I do not know.

Senator O'MAHONEY. Your answer to Mr. Plumhof's question, then, is that in your opinion a large corporation should not be permitted to own a transportation facility—that is, a large corporation engaged in the production of steel?

Mr. MILNER. For many years I have been under the impression that every form of transportation operating for profit should be under the jurisdiction of the Interstate Commerce Commission.

Senator O'MAHONEY. Yes; but that does not answer the question. The question Mr. Plumhof asked you was whether, in your opinion, a steel corporation, engaged in the production of steel, should be permitted to own the transportation facilities?

Mr. MILNER. I do not think so.

Senator O'MAHONEY. Mr. Brown, who will be your next witness? Mr. BROWN. Our next witness will be Mr. Burdick, on coal-I think perhaps it would be better to adjourn for lunch, wouldn't it? Senator O'MAHONEY. Before adjourning, the Chair merely wants to make this statement.

Some references were made this morning to the policies of the Wages and Hours Division of the Department of Labor, and to the policies of the Federal Housing Administration.

I want to suggest to you, Mr. Brown, and Senator Murdock, that if any person representing either of those agencies cares to make any statement to the committee with respect to the matters to which reference was made this morning, the committee will be glad to

hear them.

Likewise, if there is anybody who desires to make any comment with respect to the testimony of Mr. Milner, we will be very glad to hear them, also, time permitting; we would like to close this afternoon.

Senator MURDOCK. May we ask you, Mr. Brown, to convey that information to the wages and hours people here?

Senator O'MAHONEY The committee will be recessed to 2 o'clock this afternoon.

(Whereupon, at 1 p. m., a recess was taken until 2 p. m.)

AFTERNOON SESSION

Senator O'MAHONEY. Mr. Brown, are you ready to proceed?
Mr. BROWN. Yes, Senator.

We asked this morning that a representative, perhaps of the Federal Housing, ought to be allowed to make a statement in response to some testimony that was given. I can call Mr. Gordon Weggeland.

Senator O'MAHONEY. Very good.

Please give your name to the reporter.

STATEMENT OF GORDON WEGGELAND, STATE DIRECTOR OF THE FEDERAL HOUSING ADMINISTRATION

Mr. WEGGELAND. My name is Gordon Weggeland, and I am the Utah State Director of the Federal Housing Administration.

FEDERAL HOUSING FOR MINERS

The testimony this morning that the Federal Housing Administration has failed to cooperate in providing housing in mining camps I hardly believe is true.

The Administration has been willing to insure in any part of this State or in the Nation itself at large any loan that is economically sound, and it has been the endeavor of the Administration to raise and improve housing standards and conditions among all of our people, and we are energetically carrying that program forward to improve the housing standards and conditions of our people throughout the country and are not prejudiced towards one section as against another. We are willing to insure a loan in any part of the State or Nation which is economically sound and qualifies under the mortgage pattern that the Administration has developed.

Senator O'MAHONEY. Well, has any rule been made against loans in mining communities?

Mr. WEGGELAND. No, sir. We have loaned in practically every mining camp in the State.

Mrs. IVA ONG WILLIS. Mr. Chairman, I wonder if I could have just a word to say in that connection?

Mr. BROWN. Pardon me just a moment. I want to say we are going to be terribly crowded for time, and we don't want to get into a discussion here.

Senator O'MAHONEY. We won't get into a discussion. Won't you give your name, please?

Mrs. WILLIS. Iva Ong Willis, president of People's Practical Development Foundation.

In Bingham, as in other big mining districts, the mining companies own the ground and therefore it makes a hazard by which the Federal can't set a house on the mining property. I happen to know that. Senator O'MAHONEY. Any questions?

Senator MURDOCK. I would like to ask this, Mr. Weggeland. As I understand the operation of the Federal Housing Act in the administration it is this, that wherever an applicant applies for a loan, he applies, does he not, to a bank?

Mr. WEGGELAND. Through one of the accepted mortgagees; yes.

Senator MURDOCK. Yes. And usually it is a bank in his community? Senator WEGGELAND. Yes, sir.

Senator MURDOCK. Now, if that bank is willing to go along with the applicant and has confidence in the community in which it is operating and is willing to cooperate in the development of that community, and makes a loan, then that bank comes to you, does it not, for the purpose of insuring the loan?

Mr. WEGGELAND. Yes, sir.

Senator MURDOCK. But you do not make the loan direct, do you? Mr. WEGGELAND. We do not initiate the business or take the original application. The bank does that.

Senator O'MAHONEY. But you fix the values, do you not?

Mr. WEGGELAND. Yes, sir; we insure on a proportionate value of our appraised value.

Senator O'MAHONEY. I mean the Federal Housing Administration makes an appraisal upon which the loan and the insurance are both predicated?

Mr. WEGGELAND. Yes, sir.

Senator MURDOCK. So the administration of the act involves the cooperation of a local banking institution with the applicants and also the Housing Administration-is that right?

Mr. WEGGELAND. Yes, sir. But we work directly through our approved mortgagees, which happen to be the banks, the savings and loan associations, and the trust companies, and we are willing and ready to insure all economically sound loans in any part of the State. Senator O'MAHONEY. Thank you very much. Now you may pro

ceed.

Mr. BROWN. Call Mr. Burdick, who will testify on the subject of coal.

We consider Mr. Burdick as an authority on that subject.

Mr. Burdick, I will say to you, and the rest of the folks here, in justice to all those who are to be heard, if you will just expedite as much as you can consistently.

Mr. BURDICK. Mr. Chairman

Senator O'MAHONEY. Give the reporter your name, please.

STATEMENT OF E. H. BURDICK, CONSULTING MINING ENGINEER AND GEOLOGIST, OF SALT LAKE CITY, UTAH

Mr. BURDICK. E. H. Burdick, residence Salt Lake City. I am a consulting and mining engineer and geologist, and have been in independent practice for the last 25 years-the last 40 years in coal fields of Colorado and Utah.

I will say, Mr. Chairman, that I was out of the city, and the subject is pretty broad, and I expect, with your permission, to file with this committee a brief, with the maps and illustrations that are necessary, reduced to a size so it is in handable shape.

UTAH COAL

The coals of Utah are much younger than the coals of the Appalachian chain. They are of the Cretaceous age. It is not entirely a technical proposition. It means that as a general rule the coals