be obtained from Mr. Humphrey, who is going to testify in this hearing.

Mr. AUCHINCLOSS. I see.

Secretary CHAPMAN. He will know exactly what arrangements he has. It is my understanding that they do not need any arrangements with the Government itself. The mining laws being similar to ours, they have acquired a right in this property through these companies. I do not think they need any arrangement with the Government as far as that is concerned. If there are any, I do not know about them. Mr. AUCHINCLOSS. Let us get the point cleared up definitely if

we can.

Secretary CHAPMAN. I think when Mr. Humphrey testifies he will be able to give you complete details, because he has his contract. I have not seen his contract.

Mr. AUCHINCLOSS. All right. Now, one other question. Have you figured out at all the cost per ton for laying this ore down at the smelter?

Secretary CHAPMAN. No; I have not.

Mr. AUCHINCLOSS. Has anyone?

Secretary CHAPMAN. I do not know that anyone has. There are some estimates I think, Congressman.

Mr. AUCHINCLOSS. How can we assume, if we do not know the approximate costs, whether it is an economic venture or not?

Secretary CHAPMAN. I want to say that Mr. Ridgway here, who is very definitely familiar with this, says that their estimates make it about the same as the Mesabi Range cost.

Mr. AUCHINCLOSS. Is it in black and white?

Secretary CHAPMAN. No. I do not think he has given any memorandum on it.

Mr. AUCHINCLOSS. I think it would be very interesting for the committee to have that information.

Secretary CHAPMAN. I think it would be very good to have an estimate on that. I would be very glad to get it.

Mr. AUCHINCLOSS. Thank you, sir.

Estimated cost to deliver Quebec-Labrador ore to various United States consuming centers by present facilities and proposed seaway

NOTE. The above costs show that the Quebec-Labrador ores will be competitive to Lake Superior ores with or without the seaway. However, the seaway will permit greater tonnages at a reduced cost.

Secretary CHAPMAN. That is very good.

Mr. AUCHINCLOSs. I have just one other question. I am interested in the problem of treatment of American labor, not only if this waterway should be constructed but in the operation of it. Presumably it would be a joint venture between the two nations.

Secretary CHAPMAN. Yes.

Mr. AUCHINCLOSS. It would come under an authority, perhaps under your authority to a certain extent, either the operation of it or otherwise. American labor cannot compete under those conditions with Canadian labor because it is so much inferior.

Secretary CHAPMAN. They are under a lower wage scale.

Mr. AUCHINCLOSS. I mean the Canadian labor is. What thought has been given for the protection of American labor in the operations of a thing of this kind?

Secretary CHAPMAN. Congressmen, in the first place, we would have to comply with already established laws governing the wages and rates of American labor, whether it is in a joint enterprise with Canada or not, so in our pact with Canada in arranging for this, contractors would have to comply with the requirements of our laws regulating labor wage rates.

Mr. AUCHINCLOSS. Canada would?

Secretary CHAPMAN. Yes. They would have to

Mr. AUCHINCLOSS. No treaty has been worked out?

Secretary CHAPMAN. You have the basis in the 1941 agreement to develop it. We could not develop it even under a treaty in violation of our statutory laws.

Mr. AUCHINCLOSS. Unless we get that pretty well thought out first, you might get into quite an impasse with the labor situation.

Secretary CHAPMAN. I do not think you will have much trouble. That part does not bother me, because I feel it can be worked out satisfactorily. The American Government, if we were negotiating it, could not possibly negotiate it in violation of existing labor statutes.

General Pick has worked out quite a few statements on this whole project. It was under his group that the engineering report was made. I think he would be the one that could give you the information on most of this. I do not know whether he has the labor question thoroughly worked out as you have raised the question, but I frankly say I am not concerned about the labor side because there would not be any final agreement if they did not. There would be none, because you have to protect the American labor on the present standards or at least on standards

Mr. AUCHINCLOSS. It might be well to look into it, because perhaps labor will be concerned about it.

Secretary CHAPMAN. I agree with you completely. I would not approve the project myself nor would I recommend it, if I did not think that would be handled entirely on the basis of our present level and conditions of our labor.

Mr. AUCHINCLOSS. Thank you very much. That is all, Mr. Chairman.

The CHAIRMAN. Mr. Blatnik?

Mr. BLATNIK. Mr. Chairman, just a few questions. I realize, Mr. Secretary, that this whole iron-ore problem is quite a technical field to try to boil down, and to cover various sectors in that field is quite a problem.

On page 103 of your testimony you refer to the factor of expansibility. You say:

For these reasons, the indicated and inferred reserves, unlike the relatively small proven open-pit reserves remaining on the Mesabi Range, do not materially add to the expansibility of production.

Secretary CHAPMAN. That is right.

Mr. BLATNIK. To me, that is a very important subject. Obviously, you did not have time to go into the development of it. The reason I bring it up is that so many people may say, "We have 2, 3 or 4 million tons of these various ores in reserve. Why can we not use those if these 912 or 970 million tons of ores now available are exhausted?" Would you care to elaborate on the importance of the need for great flexibility and expansibility in ore iron production?

Secretary CHAPMAN. What that statement really means is this: That if the steel industry wanted to increase its capacity and its demand for iron ore in a hurry, they could not do it by using these inferred and indicated reserves because the greater percentage of the reserve ores require considerable time and effort to beneficiate and some require underground mining the production of which cannot be expanded rapidly. In the open-pit process, you can move in and just by putting in more shovels quickly and economically increase the production of iron ore within 30 days or less. You cannot do that with the underground and milling ore reserves referred to here. That is why it does not add much to the expandibility of your capacity to produce. It would add very little to it.

Mr. BLATNIK. That is true of the ores requiring processing or concentration? It would be true of taconite even more so?

Secretary CHAPMAN. Both. Absolutely. They take a long time. Mr. BLATNIK. In the case of the Labrador ores, should we have access to them by construction of the St. Lawrence seaway, not only would you have this additional ore to import to supplement and make up our ore supply deficit, which it seems will prevail for the next few years, but you would also add the expansibility factor which is now being rapidly reduced within our continental borders.

Secretary CHAPMAN. That is right.

Mr. BLATNIK. I would like, just in addition, to refer to the figures you used in the case of the total iron ore production from the Mesabi iron range for the years 1946 to 1949. You quoted that the average annual production was 56.1 million tons.

Secretary CHAPMAN. Yes, open pit direct shipping ore from 1945 to 1949, inclusive.

Mr. BLATNIK. This was after the war years.

Secretary CHAPMAN. That is right.

Mr. BLATNIK. There is even a further demand for iron ore projected by your figures through the years 1950 to 1954, inclusive, these jump up to an average annual production of 67 million tons, an increase approximately of 20 percent. That is a considerable increase when we were already operating at such a high level in 1946 to 1949. Is that not so?

Secretary CHAPMAN. That figure of increase, of course, is a result of the needs to meet our expanded steel capacity to satisfy the emergency and expanding essential civilian requirements.

Mr. BLATNIK. That increase was the annual production in millions of tons of ore from the Mesabi?

Secretary CHAPMAN. That is right.

Mr. BLATNIK. I would like to point out to the committee, to show this expansibility factor, how it worked just before World War II. In 1938 the Mesabi iron range and I live right in the middle of itwas producing 13.3 million tons of ore a year. Then you recall in 1939 and 1940 when the lend-lease programs were coming into effect and more aid was going to other countries, in 1939 this jumped from 13 million right up to 30 million. That is about two and a fraction. times over a 200 percent increase within 12 months. And, mind you, they only operate about 81⁄2 months of the year.

By 1940 the figure jumped from 30 million right up to 40 million, another 50 percent increase.

In 1941 it jumped up to 59.7 million and in 1942 reached a peak of over 70 million tons. That is just this one iron range, the Mesabi range from 13.3 million in 1938, to over 70 million in 1942.

We are going to lose that factor of expansibility if we drain the existing reserves from the Mesabi, and the most conservative estimates indicate that with the proven reserves now on hand in the Mesabi the life expectancy is about 10 years. Including the inferred and estimated reserves it could be stretched 4 more years, for a total of 14 years.

No. 2, I notice in your chart, Mr. Secretary, on imports, the chart entitled "Iron Ore Supply Deficiency Under Normal and Emergency Conditions, 1951-60," that you have under subnote 2 your revised figures for emergency conditions which assumed no imports except from Canada. Of course, you exclude all other imports. Would you have the figures on the imports just before World War II and then what happened during World War II to foreign imports of iron ore? Secretary CHAPMAN. I do not have those figures with me, but I will present them to the committee in that memorandum on Monday. Do you want the imports before World War II?

(Subsequently, the Department of the Interior supplied the following data:)

The following table shows the total imports and the amount from Canada, of iron ore made to the United States from 1938 to 1950, inclusive, including the World War II years. You will note the sharp decrease during the war years when six out of eight ships were sunk by enemy submarines.

Mr. BLATNIK. And what we anticipated to be the decline in case of emergency and then what actually happened during World War II to our foreign imports.

Secretary CHAPMAN. All right. I will put that in the memorandum, because I did not put those figures in my material here, and I want the exact amount in that.

Mr. BLATNIK. I do not have the figures, but I do remember the statement being made by some top people in our wartime agencies now in anticipating requirements under normal conditions as of now and also in case of an emergency. By that we mean an all-out war. They are much more cautious now, not as optimistic as they were before World War II. I believe the World War II people in our governmental agencies expected a decline of only 2,000,000 tons of ore supply during World War II, and what I believe actually happened was that practically all of the ore was stopped from coming. We had how many ships that were hauling ore at that time from Chile? Was it five or seven?

Secretary CHAPMAN. I forget the number. I am told it was eight. Mr. BLATNIK. How many of those were sunk in a short space of time? Three, four, or five I believe. I have forgotten.

Mr. DONDERO. Are you talking about ships bringing ore to this country from foreign countries?

Secretary CHAPMAN. Ore from Chile during the war period. We had eight boats, and I think six were sunk.

Mr. DONDERO. Six out of eight?

Secretary CHAPMAN. Six out of eight were sunk.

Mr. BLATNIK. And the other two were immediately withdrawn, so we had no imports from Chile.

Secretary CHAPMAN. It was six out of eight. I remember that now. Mr. BLATNIK. Mr. Dondero raised a good question in differentiating between the concentrates. We have a variety of grades of concentrates and types of concentrates and also taconite. I do not wish to impose on the committee, as our time is rapidly running out, but I do feel that this matter of taconite is extremely important, and the Secretary so referred to it in those terms in his testimony but did not have time to elaborate on it.

I believe that this taconite is a major source of high-grade iron ore within the continental borders for a long time to come. That means it is basic from the standpoint of our national economic well-being, as iron ore is a basic item to our industry, and it is essential from the standpoint of our national defense.

I would just like to take a few minutes to tell a little more about taconite. Taconite is just a rock, in plain, simple terms. It is a rock that is harder than granite and imbedded in this rock are small particles of iron ore-magnetic and nonmagnetic. Taconite exists in enormous quantities. This is the original iron-ore-bearing rock with which we started off just ages and ages ago. During those ages, nature did things to it and processed that rock very slowly but persistently.

Over a period of years there was decay and crumbling, and in these little crevices it broke up and disintegrated the rock, releasing small particles of iron ore that were embedded in that hard rock. Water washed away much of the silicon, and it left behind this narrow little pocket of high-grade iron ore which we today call the Mesabi iron

range.

Most of the original rock still remains in enormous quantities, leaving to man to do what nature did before-extract these small particles of iron ore from the rock. To process taconite is now no longer mining. You do not go in there and in effect mine the ore. In concentrates, you complete the job nature started when you wash,