Mr. Fox. Our percentage of the total steel production of the country is about 10 percent. I should think our ore consumption would run very close to that figure.

Mr. McGREGOR. Do you have any knowledge of what the ore consumption and steel production of your associates in this project would be, or does your 10 percent include that?

Mr. Fox. No. I am talking about Republic Steel alone.

Mr. McGREGOR. That was my question.

Mr. Fox. That is 10 percent.

Mr. McGREGOR. Now I wonder if you can give us the percentage your associates in this project would be both on ore use and steel production.

Mr. Fox. I do not think I have any figures here on that. It is probably around 25 percent of the total consumption.

Mr. McGREGOR. Then you and your associates would consume about 25 percent of the ore production, and you would produce about 25 percent of the steel production?

Mr. Fox. That is roughly correct. We can get precise figures on that from the American Iron and Steel Institute records if you desire. them, but I am guessing from the relative size of the companies.

Mr. MCGREGOR. Your figures are very close, according to my information, Mr. Foy.

Mr. Fox. Thank you.

Mr. MCGREGOR. In the face of your group representing 25 percent of the ore consumption and 25 percent of the steel use, how do you imagine that your competitors, which represent 75 percent of the ore consumption group and 75 percent of the steel-producing people, are going to get along? They are in opposition to this proposal, are they not, Mr. Foy?

Mr. Foy. Not to my knowledge.

Mr. MCGREGOR. Well, would you say that they are favoring it, Mr. Foy?

Mr. Fox. No. I said I had no knowledge of any of them taking a position one way or the other.

Mr. McGREGOR. Do you have a knowledge of United States Steel taking a position one way or the other?

Mr. Fox. I do not.

Mr. McGREGOR. You are not familiar with the statement of Benjamin F. Fairless, president of the United States Steel Corp., who appeared before the Judiciary Committee on April 26 and 28, 1950?

Mr. Fox. No; I am not familiar with that.

Mr. MCGREGOR. I would like to call Mr. Fairless' statement of that date to your attention. You will find in at page 188.

Mr. Fox. We will look at it.

Mr. McGREGOR. He does not leave his position in doubt, Mr. Foy. He says, "We have a sufficient supply." I will be glad to incorporate the statement into the hearing so you can read it.

So we are faced with a situation that your group, representing 25 percent of the steel industry, are here insisting that this project be put through, and 75 percent of your same industry, or approximately so, objecting to it?

Mr. LUMB. I do not think that is fair statement.

Mr. Fox. It is hardly a fair comparison, Mr. McGregor, I think, when you consider that the other 75 percent includes the companies

who have the greatest holdings in what remains of the Great Lakes

ores.

Mr. MCGREGOR. Does that include Steep Rock?

Mr. Fox. No. I am talking about the other 75 percent of the steel industry that you spoke of. I am talking about the corporation's interests in the Great Lakes.

Mr. McGREGOR. You would agree with this statement, would you not, Mr. Foy, that that 75 percent who are not included in your group advocating this project, are loyal, good businessmen who certainly are familiar with the ore production and the steel needs?

Mr. Fox. Yes, sir. You mentioned the United States Steel Corp. and why they are not concerned about this.

Mr. McGREGOR. But they are concerned about it.

Mr. Fox. I think it is a pertinent factor that they are making a tremendous investment in a plant in Pennsylvania on the eastern seaboard at the present time to enable themselves to use Venezuelan

ore.

Mr. MCGREGOR. They are doing that themselves with Federal assistance. May I read just a portion of Mr. Fairless' statement in reply to that question?

Mr. BLATNIK. Will you repeat the source, please?

Mr. McGREGOR. Page 188 of the hearings on House Joint Resolution 271 before the Committee of Judiciary on April 26 and April 28, 1950, by Benjamin F. Fairless, president, United States Steel Corp. He said:

An adequate supply of ore in this country is primarily a production and cost problem. It is not a question of the exhaustion of the ore reserves of the United States.

I will be glad to put his whole statement in the record, with the permission of the committee.

Mr. LARCADE. Without objection.

(The statement of Mr. Fairless referred to by Mr. McGregor is as follows:)

IRON ORE IS AVAILABLE

(By Benjamin F. Fairless, president, United States Steel Corp.

Prepared for

the Subcommittee on the Study of Monopoly Power of the House Committee on the Judiciary, April 26-28, 1950)

In discussing iron ore, I want to make one point clear at the beginning. An adequate supply of iron ore in this country is primarily a production and cost problem. It is not a question of the exhaustion of the ore reserves of the United States.

This is the iron ore situation:

With the progressive depletion of the deposits of high grade iron ore, it is gradually becoming more and more necessary to utilize lower grade domestic ore deposits. United States Steel and others have already worked out methods for doing this and are far along with the plans necessary to accomplish this result. At the same time, United States Steel as well as others, have thought it advisable to find and develop new sources of high grade iron ore outside of the United States. Large foreign deposits of high grade ore have already been found and are now under development. In other words, the American steel industry faces for the future a production and cost problem, and not one of scarcity of iron ore.

ECONOMY IS BETTER OFF WHEN INDUSTRY DOES ITS OWN PLANNING

Frankly, I cannot become too excited by the fact that certain people are only now discovering the problem which individual companies in the iron ore industry recognized years ago. How can I be, when the solution for the problem has already been found? To me, it illustrates again why our economy is better off

when industry does its own forward planning and solves its own problems, instead of relying upon Government to do its thinking and planning for it.

There are several other things that I would like to point out about iron ore. During World War II, the steel industry was short of many of the raw materials required to make steel, including scrap and coal, but I know of no instance of any steel company losing steel production because of a shortage of iron ore. Nor has that happened since the end of the war. And, furthermore, I do not expect that to occur at any time in the foreseeable future.

In 1949, the total amount of iron ore produced in the United States plus that received here from foreign sources was 92,000,000 tons. Of this amount, United States Steel produced 37,000,000 tons and bought 2,000,000 tons. It retained 35,000,000 tons for its own use and sold 4,000,000 tons to other companies who wished to buy ore. This means that other users of iron ore had available 57,000,000 tons from all sources, of which quantity 4,000,000 tons, or about 7 percent, were purchased from United States Steel. It is simply not factual to infer that because United States Steel has a little over 50 percent of the conservatively estimated ore reserves in the Lake Superior area with iron content of 45 percent or better that it thus exercises control over the remainder of the steel industry.

IRON ORE CONSERVATION POLICY

Pursuant to its ore conservation policy, United States Steel has attempted to meet its own needs with respect to the grades of ores from the Lake Superior region which are presently in use. Of such deposits, it has about 51 percent of the kind of ores presently in use, but it has only about 19 percent of the very much larger tonnage of ores in the same region which are generally referred to as taconites. These taconite ores amounting to many billions of tons are rapidly coming into the category of usable ores.

The table on the last page gives estimates of the total reserves of iron ore in various sections of the United States. This table discloses that United States Steel has about 19 percent of the estimated ore reserves of the country, including usable ores in addition to the kind presently in use.

Another point in connection with ore reserves should be mentioned. United States Steel operates about 33 percent of the steel industry's ingot capacity. It relies more on iron ore to produce steel than many other companies which use a higher percentage of scrap. In fact, due to a lower utilization of scrap, the ratio of iron ore used by United States Steel per ton of steel ingots produced is about 20 percent higher than that of the remainder of the steel industry. This is another reason for United States Steel having higher ore reserves in relation to its ingot capacity.

SELLING ORE TO OTHER COMPANIES A LONG STANDING POLICY OF UNITED STATES STEEL

Much has been said about our ore reserves on the Mesabi Range, a section of the Lake Superior district. How much ore is controlled by any one company in any one producing area is meaningless unless this is related to its consumption and to the activities of competing companies in the same and in other areas.

United States Steel has been a seller of Lake Superior iron ore for 10 years. It proposes to continue to sell ore to those who wish to buy, and this includes ore which may eventually come from Venezuela.

It should be remembered that the ore which United States Steel is now selling has been carried by it, in most instances, from 40 to 50 years. During this long period, taxes have been paid on these properties, while many competitors of United States Steel have enjoyed a considerable advantage in that they have been wholly or partially free of this heavy tax burden. In computing United States Steel's true cost of ore, one cannot disregard the large amount of taxes paid by United States Steel on each ton of ore during the time it was held in the ground. Certainly United States Steel should recover the taxes paid for carrying the ore before anyone begins to compute what profit is made on such sales of iron ore. It will be remembered that in 1949 United States Steel used in its own operation about 90 percent of the iron ore which it produced.

THE LARGE SCALE PRODUCTION AND FINANCIAL JOB AHEAD IN IRON ORE

Finally, I should like to point out the large expenditures necessary to be made by the iron ore industry in developing new sources of iron ore. Following intensive research and experimentation on plants and methods for the beneficiation of

lower grade ores found in the Lake Superior region, United States Steel now has under construction in Minnesota the first phase of a large scale concentrating plant. These and similar plants will cost us many millions of dollars.

In addition, United Steel is hard at work in Venezuela where large deposits of relatively high grade ores have been found. This development is estimated to require many more millions of additional investment. All in all, there is a large size production and financial job ahead of United States Steel in iron ore. I should like to conclude by saying that I think it is fortunate for the country and for the many smaller steel companies that there are larger companies in the steel industry which are willing and capable of taking the necessary steps to assure an adequate iron ore supply for this country.

1 Source: The Iron Ores of the United States by Dr. C. W. Hayes published in Bull. 394 of the Depart ment of the Interior, U. S. Geological Survey, reprinted from Report of the National Conservation Commission, February 1909. Production 1908-49, inclusive, as shown by Minerals Yearbooks, U. S. Department of the Interior has been deducted, and 200,000,000 tons have been added in the western district to recognize recent work in Utah covered by U. S. Bureau of Mines Report of Investigation 4388, November 1948. Excludes 218,000,000 tons of titaniferous magnetite, none of which is owned by United States Steel.

Mr. Fox. Could I call attention to another statement of Mr. Fairless made yesterday?

Mr. McGREGOR. Yes; if you have authority from Mr. Fairless or if you have it on good authority I will take your word for it. Read it. I will be glad to have you read it.

Mr. Fox. I will read it from a publicity release handed out by the steel corporation yesterday, and it is available to all the newspapers, so I would assume it is authentic.

Mr. MCGREGOR. I will take your word that it is authentic, Mr. Foy. Mr. Fox. It is a copy of Mr. Fairless' speech at the ground-breaking ceremonies at their new plant near Trenton, just south of Trenton, N. J Mr. LARCADE. On yesterday?

Mr. Fox. Yesterday, March 1, 1951. Remarks of Benjamin F. Fairless, president, United States Steel Corp. He says:

There is international significance, too, in the fact that today we are setting in motion two great streams of intercontinental trade that will greatly benefit both North and South America. In the years ahead, millions of tons of iron ore will come out of Venezuela to charge the furnaces that we are building here. On the other hand, many millions of American dollars are already pouring out of the United States to develop the ore deposits in Venezuela.

I do not think I need to quote the rest of it. He goes on with some other remarks about creating new jobs, new homes, new opportunities. But it seems to me that would indicate that the United States Steel

Corp. is not entirely satisfied with the Great Lakes iron-ore deposits for their future operations.

Mr. McGREGOR. They are concerned to the extent they are willing to invest their own money. May I read further to show they are concerned? I continue reading from his statement:

Frankly, I cannot become too excited by the fact that certain people are only now discovering the problem which individual companies in the iron-ore industry recognized years ago. How can I be when the solution for the problem has already been found? To me it illustrates again why our economy is better off when industry does its own forward planning and solves its own problems instead of relying upon the Government to do its thinking and planning for it.

Mr. For. We agree with that a hundred percent, sir.

Mr. McGREGOR. Now, I note that, Mr. Foy, and I am glad that you agree with Mr. Fairless' statement. But you are asking Federal aid to assist you in your plans and production and marketing in this particular project?

Mr. Fox. We are asking that the Government develop a natural resource which has to be done, as I understand it, in collaboration with another country on a basis that will pay for the work—a selfliquidating basis.

Mr. MCGREGOR. That is the part that I wanted to bring up, and I am glad to hear you and others say that this should be self-liquidating.

I noted you brought in the subject of tolls. Have you any information at all on what the tolls might be, Mr. Foy?

Mr. SMITH. Mr. Chairman, if the gentleman will yield

Mr. MCGREGOR. Yes.

Mr. SMITH. In discussing that last subject, if I recall correctly, with respect to the attitude of United States Steel, of course Mr. Foy is not the witness to testify about it, but it was brought out a minute ago that United States Steel had asked for development of a natural resources in order to get ore to its plant in Birmingham. I do not think United States Steel has a contradictory policy to the Republic Steel or any other company about the necessity of developing public resources to develop proper industry in the country.

Mr. MCGREGOR. I think you are absolutely right. Everyone has a right to come to Congress and ask for something if they can get it. It is up to this Congress to decide whether or not they can get it. Whenever the gain is for the benefit of all the people, then I think Congress should go along with it--but let us be sure it is a gain and benefit for all the people-not only a small segment thereof.

On tolls, do you have any idea what the toll charges might be, Mr. Foy?

Mr. Fox. I have no idea. I understand that certain departments of the Government have throughly explored this thing from an engineering standpoint and have reported to this committee that the project can be self-liquidating, and I think, they made certain assumptions on tolls at that time, but that is the only knowledge I have of it, sir.

Mr. McGREGOR. I think your statement is correct, Mr. Foy. They have told us it would be self-liquidating, but they have not advised us on the amount of the tolls, how the tolls will be collected or the distribution of the tolls. Do you not feel as a good business proposition that this Government should know exactly what to expect on the maintenance, the costs, the collection of the tolls, the amount of