[Mercury Policies of the War Production Board and Predecessor Agencies, May 1940 to March 1944] [From the U.S. Government Publishing Office, www.gpo.gov] CIVILIAN PRODUCTION ADMINISTRATION BUREAU OF DEMOBILIZATION MERCURY POLICIES OF THE WAR PRODUCTION BOARD AND PREDECESSOR AGENCIES MAY 1940 TO MARCH 1944 HISTORICAL REPORTS ON WAR ADMINISTRATION: WAR PRODUCTION BOARD Special Study No. 10 23-620 Pl > CIVILIAN PRODUCTION ADMINISTRATION John D. Small, Administrator Bureau of Demobilization!,' G. Lyle Belsley, Director MERCURY POLICIES OF THE WAR PRODUCTION BOARD AND PREDECESSOR AGENCIES May 1940 to March 1944 • Prepared under the supervision of JAMES W, FESLER. War Production Board Historian by CHARLES M. WILTSE First issued June 3,1944 Re-issued March 8,1946 HISTORICAL REPORTS ON WAR ADMINISTRATION*. WAR PRODUCTION BOARD SPECIAL STUDY No. JO HISTORICAL REPORTS ON WAR ADMINISTRATION» WAR PRODUCTION BOARD SPECIAL STUDIES SERIES Number Title Issued Re-issued 1,2,3 Not available Evolution of Premium Price Policy for Copper, Lead and Zincs January 1940 to November 1943 Dec. 10, 1943 Feb. 22, 1946 5 Not available 6 Resumption of Production of Domestic Electric Flat Irons» April 1943 to August 1944 Aug. 31, 1944 Mar. 1, 1946' 7 Pulp and Paper Polioies of the War Production Board and Predecessor Agencies» 1940 - 1943 Mar. 25, 1944 Mar. 1, 1946 8 Lead and Zinc Policies of the War Production Board and Predecessor Agencies» May 1940 to March 1944 Mar. 31, 1944 Mar.,1, 1946 9 The Closing of the Gold Mines» August 1941 to March 1944 June 1, 1944 Apr. 5, 1946 10 Mercury Policies of the War Production Board and Predecessor Agencies» May 1940 to March 1944 June 3, 1944 Mar. 8, 1946 11 Landing Craft and the War Production Board» April 1942 to May 1944 July 15, 1944 Mar. 8, 1946 12 Policies Governing Private Financing of Emergency Facilities» May 1940 to June 1942 Sept.20, 1944 Mar. 15, 1946 13 Fara Machinery and Equipment Policies of the War Production Board and Predecessor Agencies» May 1940 to September 1944 Nov. 10, 1944 Mar. 15, 1946 14 Concentration of Civilian Production by the War Production Board» September 1941 to April 1943 Nov. 25, 1944 Mar. 22, 1946 15 Development of the Reconversion Policies of the War Production Board» April 1943 to January 1945 Feb. 26, 1945 Mar. 22, 1946 16 Alcohol Policies of the War Production Board and Predecessor Agencies» May 1940 to January 1945 Apr. 21, 1945 Mar. 29, 1946 17 Truck Production and Distribution Policies of the War Production Board and Predecessor Agencies» July 1940 to Debember 1944 May 23, 1945 Mar. 29, 1946 18 Shipbuilding Activities of the National Defense Advisory Commission and the Office of Production Management» July 1940 to December 1941 July 25, 1945 Apr. 5, 1946 19 The Facilities and Construction Program of the War Production Board and Predecessor Agencies» May 1940 to May 1945 Nov. 2, 1945 Apr. 5, 1946 FOREWORD It was President Roosevelt’s opinion, which President Truman has reaffirmed, that ”we need both for current use and for future reference a full and objective account of the way the Federal Government is carrying out its wartime duties.” The Special Studies constitute one of several series that attempt to meet that need with respect to the War Production Board. Each study endeavors to treat in some detail an area of the War Production Board’s operations that was particularly significant during the war and that has continuing importance for the understanding of administrative and economic problems and for the planning of industrial’ mobili zation. Special Study No. 10, Mercury Policies of the War Production. Board and Predecessor Agencies: May 19^0 to March 191Ui, was originally issued on June 3, 19hh/ under the same number and title, as a restricted report for use exclusively within the War Production Board. The original report has been declassified in order that the report may be made generally available. Although minor errors of fact and typography have been corrected, the study has not been revised to extend its chronological coverage to the termination of the War Production Board on November 3, 19h5, or to take account of any additional documentation that may have become available since completion of the original draft. 28-6SO PS WAR PRODUCTION BOARD WASHINGTON, D. C. June 3, 1944 IN REPLY REFER TO: MEMORANDUM TO: Mr. G. Lyle Belsley Executive Secretary FROM: James W. Feeler, Chief Policy Analysis and. Records Branch Office of the Executive Secretary Attached is Report No. 10 of the Policy Analysis and Records Branch, Mercury Policies of the War Production Board and Predecessor Agencies. In addition to recording the history of Wartime production and distribution of an important metal, the study throws light on several problems that have been central to the whole metals and minerals field during the past four years. Among these problems are: the overly conservative goals of 1940 and 1941; the conflict between the inflationary vices and production, stimulating virtues of price increases; excess'profits taxation as a-production factor; the impact of British and Russian requirements;-the effect of strategic developments, such as the Russian loss and repossession of the Donets Basin and the Allied advance into Italy; the conflict between importation and domestic production, especially after the supply-requirements situation eases; labor supply for domestic mines; relations with the Reconstruction Finance Corporation, Metals Reserve Company, and Bureau of Mines;’ and the removal of production incentives and distribution controls once the supply battle is won. The long tenure of office of operating officials directly responsible for mercury policies is worth remarking, for in many other areas of war production a major difficulty has been the rapid turnover of personnel, with a consequent instability of policy. A preliminary draft of this report was prepared on May 2, 1944, and circulated among officials who have actively participated in the development and execution of mercury policies. The comments and suggestions of these officials have been taken into account in the preparation of the study in its present form. Mr. Sidney Korets assisted Mr. Viltse in the preparation of this report. SS-6S0 P8 TABLE OF CONTENTS Page I. The NPAC Mercury Program (May to December 1940) 1 Introduction 1 Origin of the Program 1 NDAC Procurement Plan 2 II • The Mercury Program Under PPM (January to December 1941) 7 Purchases in Mexico 7 Rising Requirements 11 The Price Problem 13 Administration of the Mercury Program 16 HI. Stimulation and Control Under WPB (December 1941 to April 1943) 19* Conservation and Price Control 19 Purchasing Policy 20 Rising Requirements 23 Labor Problems 26 Efforts to Increase Supplies 30 Administrative Changes 36 IV. Curtailment of the Mercury Program (May 1943 to March 1944) 39 Easing Mercury Situation 39 The Curtailment Program 40 Withdrawal of Subsidies 45 The End of Controls 48 Appendixes: A. Chronology 50 B. Annual Average Mercury Prices at New York, 1910-1943, with High and Low Monthly Averages 56 C. Production, Imports, Exports, and Apparent New Supply of Mercury in the United States, 1910-1943 57 D. Production, Imports, Exports, and Apparent New Supply of Mercury in the United States, 1940-1944 5S E. Relation of Mercury Production, Price, and Grade of Ore, 1910-1943 60 as~6&o n*bu I. THE NDAC MERCURY PROGRAM (May to December 1940) Intoaduction. —Although it is one of the lesser metals so far as economic importance is concerned) mercury is among the raw materials necessary in modern warfare, and early attention was given to it by the agencies charged with the defense of the United States. The mercury program carried out by the Advisory Commission to the Council of National Defense and its successors differs from those developed for most of the other strategic and critical materials in two important respects. The first point of difference is that the war agencies relied on high prices rather than on subsidies or other forms of aritifical stimulation to bring out increased production. The second is that mercury completed the cycle from relative abundance to scarcity and back again to abundance before any of the other metals. Origin of the Program.--After the German occupation of Czechoslovakia in October 1938, the possibility of a second world war was clearly recognized, and before the end of that year the Arny and Navy Munitions Board made plans to review the position of the United States with respect to essential raw materials. Under the general direction of Dr. C. K. Leith, who had been consultant on minerals to the ANMB ever since World War I, these studies continued until the establishment of the Advisory Commission to the Council of National Defense in May 1940* A report on mercury was prepared by a subcommittee under the chairmanship of C. S. Wehrly, manager of the Merchants Chemical Company, and was submitted on December 9, 1939. 1/ The ANMB mercury report took account of the military uses of the metal, and of its availability in terms of recent production and price history. The heaviest demand in the event of war mas expected to be for fulminate of mercury, used as a detonator for ammunition and high explosives, but there were other important military uses, including the manufacture of drugs, tracer bullets, anti-fowling paint for ship bottoms, control instrument , and high octane gasoline. Superimposing the estimated military requirements on those of the normal civilian economy, the ANMB experts forecast that, in an emergency of two years’ duration domestic production would fall short of demand by some 18,000 flasks. 2/ A stockpile of that amount was -therefore recommended, and on January 30, 1940, mercury and its ore were placed on the Army and Navy Munitions Board strategic naterials list. Both this action and the recommendation that preceded it were based on the nature of the mercury industry in the United States. 1/ The other members of the Committee were Worthen Bradley, President, Bradley Mining Company; Charles W. Merrill, Bureau of Mines; and F. W. Russe, Secretary and Purchasing Agent, Mallinckrodt Chemical Works. 2/ Mercury is marketed in steel flasks, each holding 76 pounds of the metal. 23-630 ?9 bu - 2 - Since 1913, more than 85 percent of the world output of mercury had come from three countries, Spain, Italy, and the United Statesj but the United States had trailed far behind the other two» Both Spanish and Italian production is st ate-controlled, and in 1928 the two governments entered into a cartel agreement, fixing an arbitrary price, which necessarily influenced the world market» In contrast to the large deposits, high quality, and low working costs of the Spanish and Italian ores, the conditions of the United States1 domestic supply are at best uncertain» The ore bodies are notoriously small #nd spotty, and the complex geological surface conditions that indicate the presence of deposits are difficult to interpret. The grade or tenor of the ore, moreover, is extremely low, so that profitable operation is closely tied to price» Mercury is the most costly of the base metals, and is highly sensitive to economic change» The price has always been subject to a considerable amount of fluctuation, sometimes within short periods of time and over wide ranges, J/ and these price changes are reflected in metal output. Although the United States was an exporter of mercury prior to 1921, production since that time has generally been insufficient to meet domestic needs» Under the stimulus of unsettled conditions in Europe, however, and the impact of open war in September 1939, the price of the metal shot up from $84 a flask in August to .1140 in September, and before the year was out reached $150 a flask» Bids as high as $165- were made in the first buying rush during September. The sharply rising price trend was plainly in evidence by the time the ANMB report was made, and it was assumed that increasing domestic production would follow more or less automatically» Taking this anticipated increase into consideration, the subcommittee on mercury estimated that a stockpile of 18,000 flasks, procured in advance of the outbreak of hostilities, would fill the gap between domestic output and requirements over a two-year period» In common with most, if not all, the forecasters of that time, the industry and government experts who made up the committee failed to realize the magnitude of the coming struggle» NDAC Procurement Flan»—The Advisory Commission to the Council of National Defense was appointed by the President on May 29, 1940» On the same day, Dr» Leith wrote to Edward R. Stettinius, Jr», who was to have charge of raw materials for the Commission, referring to the studies made for the Amy and Navy Munitions Board and offering his cooperation» Before the letter was delivered, however, 2/ See Appendix B. 4/ American Metal Market, Metal Statistics 1943» p. 581» See also Worthen Bradley, "Quicksilver, Sweat, and Tears," Md HetoUarg» July 1942, p» 378» 23-820 p10 bu - 3 - Stettinius got in touch with Leith by telephone, and on June 3 the University of Wisconsin geologist became Consultant on Minerals to the NDAC. ¡J The organisation set up by Stettinius included a Division of Mining and Mineral Products in charge of William L. Batt, President of S K F Industries, Ine«, with M* B. Folsom, Treasurer of the Eastman Kodak Company, as Assistant Division Executive« The Division was subdivided into three Groups, that dealing with Mineral Raw Materials being headed by Leith* The first task faced by the Mineral Raw Materials Group was that of determining requirements. The reports made to the Amy and Navy Munitions Board during the previous two years were taken as a starting point, and a revised program for each of the strategic and critical minerals was drawn up. These programs were then discussed at a series of meetings, attended by representatives of the industries concerned as well as by staff members of interested agencies of government« Many of the participants had also served on the ANMB subcommittees in their respective fields* Out of these conferences came concrete procurement plans* £/ The mercury program was taken up on June 19, 1940, at a meeting attended by representatives of the Advisory Commission, the Reconstruction finance Corporation, the Procurement Division of the Treasury Department, the Army and Navy Munitions Board, the Bureau of Mines, and the Geological Survey, as well as by leading members of the mercury industry* Agreement was reached on the following recommendations for immediate actions Nl* Acquire up to 10,000 flasks to provide a store for a 3-year emergency* * 2* Exports of mercury and mercury compounds should be restricted and placed under government license* • 3. Continue investigational programs of the Bureau of Mines and Geological Survey* * 4. Instruct the Bureau of Mines to accelerate collection of monthly statistics on stocks, consumption, imports and exports* ' Letters, C* K. Leith to E. R. Stettinius, Jr?, May 29, 1940; Stettinius to Leith, May 31, 1940; Progress Report of Division A, Mining and Mineral Products, for the Quarter ended August 31, 1940, p. 1. 6/ Progress Report of Division A, Mining and Mineral Products, for the Quarter ended August 31, 1940, p* S* as~8so ph tou - 4 - "5. Request agents of the government in Mexico, Spain and Italy to collect and transmit promptly data on mercury production and exports* Where published data are not regularly available, the opinion of informed people should be solicited* All agents should be instructed to watch for and report on unusual movements of mercury or ores*” 2/ Although the plan contemplated a three-year emergency, the estimates on which it was based covered only two years, and the terminology was soon altered to conform to that of the ANMB* The Advisory Commission group accepted the Munitions Board's figure of 90,000 flasks as the probable consumption of mercury during two years of war, although the industry believed it to be too high, and agreed that domestic output might be brought up to 35,000 flasks a year* The ND AC experts, however, proposed to save 10,000 flasks by substitution of other materials, leaving a balance of only 10,000 to be accumulated by way of stockpile* These 10,000 flasks were to be purchased by the Procurement Division of the Treasury under the Strategic Materials Act of 1939« 8/ The producers were even more optimistic, but were overruled* Harking back to the experience of World War I, they preferred to estimate requirements by adding a third to normal consumption, which gave a figure of about 36,000 flasks a year; and with the price up to $205 by June, they saw no reason to doubt that the country could be self-sufficient* 2/ Under the circumstances, it was not surprising that measures of conservation and control were left to be worked out when M-day came* The major recommendations of the mercury procurement plan were promptly adopted* Stockpile purchases had to be approved by the Army and Navy Munitions Board, but no difficulty in this respect was experienced since the NDAC figure was 8,000 flasks lower than that already recommended by the ANMB* Approval was secured on July 1, 10/ and the following day exportation of mercury and its 2/ "Plan for Mercury Procurement to Meet Present Emergency,* June 19, 1940. 8/ Progress Report of Division A, Mining and Mineral Products, for the Quarter ended August 31, 1940, p* 12* 2/ Worthen Bradley, "War's Effect on Mercury," paper, American Mining Congress, Colorado Springs, September 16-19, 1940; "Plan for Mercury Procurement to Meet Present Emergency," June 19, 1940* 12/ Letter, Col. Charles Hines to the Procurement Division, July 1, 1940* Cf* Memorandum, Captain G* K. Heiss to E.R.Stettinius, Jr., May 31, 1940. as-aao Pi2 bu - 5 - ores and concentrates was forbidden except by special license. H/ No actual purchases of metal for the stockpile were made, however? Although the high price reached in June 1940 fell off somewhat, the stimulus remained sufficient to bring out a volume of production well above normal. In July, domestic output was about equal to consumption, and with export licensing in effect as an additional safeguard, the Division of Mining and Mineral Products recommended "that stockpile purchases not be made unless excess domestic production or foreign metal are available at prices around $125 per flask.• 12/ The work of the Advisory Commission and of its several subdivisions meanwhile continued to expand, and the increasing work load brought with it additions to the staff. On August 1, 1940, Richard J. Lund, formerly a mineral economist with the Bureau of Mines, and since 1937 editor of the American Mining Congress Journal -became Assistant Executive of the Mineral Raw Materials Group. By mid-August, domestic mercury output had expanded to a point where it exceeded requirements, but prices were still regarded as too high to justify public purchasing. The price was softening, however, and offers at less than the current market began to be made to the Procurement Division. During the week of September 14 a contract for 5,000 flasks, to be delivered over a period of a year, was made with the New Idria Quicksilver Company, at $149.50 a flask. 13/ The market price at that time was $177.55. Production figures for August became available early in October, and revealed that a new peak of 3,500 flasks had been reached. This rate of output was far in excess of cnnsnmpt.1on, which amounted to only 2,100 flasks for the same month. Industry stocks showed a corresponding increase, and after a brief rise, probably traceable to rumors of government purchases, the price continued to decline. 14/ The September production figure was even higher, amounting to 3,600 flasks. This record output was quickly reflected in the market, which dropped to a low of $167 toward the end of October. During the week of October 22 a second procurement contract was let, this time with Mercury Mines, Inc., for 750 flasks at $160. 15/ 117 Presidential Proclamation Nd. 2413, July 2, 1940. 12/ Memorandum, C. K. Leith to W. J. Barrett, July 30, 1940. (Weekly Progress Report) 12/ Memorandum, M. B. Folsom to W. J. Barrett, September 24, 1940 (Weekly Progress Report); memorandum, E. R. Stettinius, Jr., to the President, September 25, 1940. 14/ Memorandums, H. B. Folsom to W. J. Barrett, October 8 and 22, 1940 (Weekly Progress Reports). 15/ Memorandum, M. B. Folsom to W. J. Barrett, October 29, 1940 (Weekly Progress Report). 23-620 P13 bu - 6 - The whole stockpiling program was proceeding at a leisurely pace. So much so that it was not until October 11 that the stockpile recommendations of the Mining and Mineral Products Division were submitted to the Advisory Commission for approval, and another week elapsed before they were approved. 16/ The recommendations, including one for 10,000 flasks of mercury estimated to cost $1,600,000, were then formally transmitted to the Procurement Division of the Treasury, the Metals Reserve Company, and the Artsy and Navy Munitions Board. So far as mercury, at least, was concerned, it was merely ratifying the fact, but the action of the Commission did influence the ANMB to lower its own stockpile estimate of 18,000 flasks to conform to the NDAC figure. ¿2/ Shortly, thereafter, the ANMB recommended that no further purchases of mercury be made for the time being, in view of the fact that domestic output continued to run well ahead of consumption. 18/ The best available information, based on the explorations of the Geological Survey and Bureau of Mines, was that the existing rate of production could be maintained for at least two-and-one-half and probably for four or five years, 19/ and few doubted that at prevailing prices it would be. Still further incentive to expanded production came in October, when the returns from quicksilver mining were specifically exempted from the excess profits tax. ¿2/ 16/ Minutes, NDAC, October 11 and October 18, 1940. 17/ Memorandum, M. B. Folsom to W. J. Barrett, November 13, 1940 (Weekly Progress Report). 18/ Memorandum, C. K. Leith to W. L. Batt, November 30, 1940. 19/ Memorandum, C. K. Leith to A. I. Henderson, October 23, 1940. 22/ Revenue Act of 1940, 54 Stat. 990, October 8, 1940; 26 U. S. C. Sec. 731. 23-eao bu - 7 - II. THE MERCURY PROGRAM UNDER PPM (January to December 1941) Eren before the Advisory Commission to the Council of National Defense surrendered its major functions to the more decisive Office of Production Management in January 1941, a turning point in the mercury program had been reached. Production for 1940 was close to 38,000 flasks, or more than double the 1939 output, - a gain almost exclusively attributable to an average price for the year of $176.87, the highest ever recorded. The December production figure was 3,700 flasks, a record for the century, and the same month saw the first deliveries, amounting to 550 flasks, under government contracts. 2]/ The production gains, however, were more than balanced by unexpectedly heavy British purchases, which had not been allowed for in the original requirements estimates. The tempo of the war was increasing, and, as the Nation’s stake in the world conflict grew more apparent, the accumulation of materials seemed more urgent. Coincident with the depletion of domestic supplies brought about by British buying, the Spanish-Italian cartel increased its price from $200 to $250 a flask, f.o.b. port of origin. The possibility of purchasing from Spain, if no other source were available, thus became more remote at the very time that requirements were growing In magnitude. The changed situation was discussed at a staff meeting of the Raw Materials group on December 19, and it was agreed that future stockpile acquisitions should come from Mexican sources, %2/ No specific move toward this end was made, however, until after the impending reorganization of the defense agencies had been completed. The OPM was created on January 7, with William S. Knudsen as Director-General and Sidney Hillman as Associate Director-General. The production, purchasing, and priorities functions of the Advisory Commission were taken over by the new organization, and Stettinius assumed responsibility as Director of Priorities. The staff dealing with metals and minerals remained substantially unchanged, continuing to report to Stettinius* Purchases in Mexico«—Though Mexico was potentially a large producer of mercury, her output normally averaged only some 5,000 to 8,000 flasks a year. Operations were small and inefficient, and titles to much of the property concerned were complicated and Memorandum, M. B. Folsom to J. D. East, December 17, 1940 (Weekly Progress Report). 22/ "Report on Staff Meeting of Other Raw Materials Group," December 19, 1940; letter, 0. K. Leith to Clifton E. Mack, Director of Procurement, Treasury Department, December 18, 1940. 83-030 bu - 8 - involved« The rising market, therefore, was slow to influence Mexican production« For the first 11 Months of 1940, a rate of only sone 875 flasks was Maintained, but the December output shot up to over 2,000 flasks« 2J/ Most of it went to Japan at prices ranging from $200 to $210. The question of purchasing the Mexican output was first raised in October 1940, when a memorandum to the Chief of the Army Intelligence Branch placed Mexican production at 45,000 flasks for 1940, and implied that Japanese purchases were part of an Axis scheme to control the world market for mercury« yj The memorandum was referred to Dr. William 1« Elliott, consultant to the Industrial Materials Department of ND AC, who passed it along to A« 1« Henderson, Assistant on Export Licensing, with a query as to the advisability of buying the Mexican metal to keep it from the Japanese« Henderson replied that "serious consideration should be given to the purchase of the Mexican production of mercury "if a policy of economic warfare were adopted« 25/ Representatives of the Coordinator of Commercial and Cultural Relations between the American Republics, and of the Bureau of Foreign and Domestic Commerce, also consulted by Elliott, favored the policy proposed« 26/ At that time, however, domestic supplies appeared adequate to meet requirements. Leith was unwilling to recommend any increase in the stockpile authorisation, 27/ and no action was taken with respect to purchases from Mexico until the December 19 decision noted above« gj/ Minerals Yearbook. 1940. p. 665« yj The memorandum is dated October 11, 1940, and is signed only with the initials C.C.D. The figures quoted would have been fantastic enough if left in metric tons, but in translating to flasks the author of the memorandum made an error of almost 200 percent. The passage reads: "Mexican production has increased from 170 metric tons (4,932 flasks) in 1937 to 45,000 flasks (593.5 metric tons) per year at the present time." The 1937 figures are substantially correct, but 593*5 metric tons is only 17,216 flasks - not 45,000« Actual Mexican output for 1940 was 11,653 flasks, or 401.7 metric tons. 25/ Memorandum, A. I. Henderson to W. Y. Elliott, October 22, 1940. 26/ Letter, John C. McClintock, Director, Division of Commodities and Natural Resources, Coordinator of Commercial and Cultural Relations between the American Republics, to William Y. Elliott, November 13, 1940; memorandum, W. A. Janssen, Chief, Metals and Minerals Division, Bureau of Foreign and Domestic Commerce, to McClintock, November 6, 1940. 27/ Memorandum, C. K. Leith to A. I. Henderson, October 23, 1940. 23-630 *16 - 9 - The NDAC recommendation that future stockpile purchases be made in Mexico was welcomed by the State Department. On .Tamwry 13, the United States Embassy in Mexico City notified the newspapers that this country was in the market for mercury, and announced that offers could be forwarded directly to the Procurement Division of the Treasury. 2S/ The press interpreted the announcement to mean that the United States was embarking on a program of economic warfare designed to keep strategic minerals from Axis hands, and this impression was encouraged by certain unnamed officials, who privately informed newsmen that domestic mercury supplies were adequate for any emergency. The President1s statement at his press conference on January 14, that the intended purchases were without special significance other than the stockpiling of materials in short supply, was discounted in favor of the more spectacular though less accurate explanation. 29/ The net effect of the Mexican announcement, coupled with an actual decline in domestic output and rising consumption, 30/ was to start prices rising again, after a steady decline extending over some six months. The Procurement Division was swamped with offers at prices forty to fifty dollars above the American market figure. Bather than risk further inflation of domestic prices, the Treasury withdrew from the market until the immediate effect of the Mexican announcement had passed. 31/ It was. March before Mexican purchases were again considered. Early in that month a plan for securing control of a large part of the Mexican output was advanced by two Americans long associated with the mercury industry in that country, Elmor Davies and Claude Moll. After various contacts had been established, Davies and Moll presented their proposal on March 17 to a group that included representatives of the OPM, State Department, War Department, Procurement Division of the Treasury, Bureau of Mines, and Reconstruction Finance Corporation. They conteniplated organising a United States Corporation to purchase the Mexican mercury output from various subsidiaries that would be incorporated in Mexico and would contract with the small operators. The plan was ultimately dropped, due to the inability of the promoters to secure private financing and the reluctance of OPM officials to recommend the project to the Reconstruction Finance Corporation. 32/ 28/ lew York Times, January 14, 1941- 22/ W. > January 15, 1941. 32/ See p. 11 below. 31/ Memorandum, C. K. Leith and R. J. Lund to G. M. Moffett, April 28, 1941« 32/ Memorandums, R. J. Lund to George M. Moffett, March 10 and 22, 1941 (Weekly Progress Reports); memorandum, Leith and Lund to Moffett, April 28, 1941; letter, Elmor Davies to the President, March 31, 1941. 23-620 *17 bu - 10 - Virtually all of the Mexican output, meanwhile, continued to go to Japan. The total was reported at 7,000 flasks for the first three months of the year, and April production reached 3,820 flasks. Japanese buying, however, was on a hand-to-mouth scale, and those familiar with the situation believed that Mexican mercury could be secured for the United States at a considerably lower figure than the $210 - $215 then being paid by the Japanese if an assured market over a reasonably long period of time were offered. A letter proposing purchase of the entire Mexican output for a period up to two years was accordingly drafted by R. J. Lund. With the approval of the Any and Navy Munitions Board, the letter was sent on May 14 by A. I. Henderson, Deputy Chief of the OPM Materials Branch, to C. B. Henderson, President of the Metals Reserve Company. After a brief review of the procurement situation, the letter continued: •We now recommend the purchase of the entire Mexican output for a period up to two years, with a limit of 30,000 flasks. This is to include the 5,000-flask purchase of Mexican mercury already recommended to Procurement Division. Questions as to whether Procurement shall purchase any of the above-recommended 30,000 flasks, or whether Metals Reserve should handle the entire amount for convenience in negotiations, shall be worked out between these two agencies. It is further suggested that these negotiations be taken up through the State Department, since probably the best way of making such a deal will be through the Mexican Government itself. •The present recommendation is based primarily on the narrowing margin between domestic production and consumption, and on the recent report of the Bureau of Mines that, in spite of the fact that domestic reserves are equivalent to about throe years1 output at the 1940 rate, the production could not be maintained at that level because of the unequal distribution of the reserves. They forecast, further, a gradual decline in output after one year unless the price were stabilized at the March level of about $175*00 per flask and guaranteed for two years or more." The letter concluded with a paragraph summarizing various additional advantages such an arrangement would offer: •The procedure here recommended is also favored by other considerations not primarily within the scope of the Office of Production Management - it will postpone the exhaustion of our limited reserves, it will help to stabilize prices, it will keep the Mexican supplies 33~02O *18 -11 - away from Japan, and it will serve long-term economic advantages in the event the Spanish and Italian sources (the bulk of world reserves) are under strict Axis control for a period of years." 33/ The eventual decision was that the Reconstruction Finance Corporation would handle the entire Mexican purchase in cooperation with the State Department, but that 5,000 flasks would be turned over to the Procurement Division of the Treasury to complete the purchase program authorised under the Strategic Materials Act. The 30,000 flasks to be acquired in this way were to be added to the stockpile already contracted for, bringing the total authorization to 35,000 flasks. 34/ This quantity was deemed more than adequate for the three-year emergency originally envisaged. The Amy and Navy Munitions Board, in fact, now saw no need for a reserve of more than 10,000 flasks, but interposed no objection to the Mexican purchase, since it would tend to conserve domestic resources and would keep a strategic metal out of the hands of a potential eneny. 35/ Representatives of the State Department and the RFC left for Mexico City about the first of June, and arrangements were completed a month later. The entire Mexican output of mercury for the next two years, less amounts sold through regular channels to other Western Hemisphere purchasers, was to go to the United States, and an embargo was to be placed on all shipments outside the Western Hemisphere. The United States purchases, which were not to exceed 30,000 flasks, were to be made by the Metals Reserve Company at prices based on those prevailing in this country. Rising Requirements.—Following the production peak of 3,700 flasks of mercury in December 1940, domestic output fell off sharply to 3,100 flasks in January and only 2,900 in the succeeding month. There were various explanations, including flood conditions in California and the short February month, but the disappearance of certain operators in Nevada indicated that ore reserves might be giving out. At the same time, consumption, which had averaged 2,500 flasks a month since September 1939, reached 2,900 in January 1941, 22/ Letter, A. I. Henderson to C. B. Henderson,. May 14, 1941« A memorandum from A. I. Henderson to Brigadier General Charles Hines, May 5, 1941, requested ANMB approval of the draft of this letter. 34/ The 5,000 flasks under contract with the New Idria Quicksilver Company plus the metal to be obtained from Mexico. The contract for 750 flasks made with Mercury Mines, Inc., in October was never fulfilled. 25/ Memorandums, R. J. Lund to George M. Moffett, May 19 and May 26, 1941; Lund to House Military Affairs Committee, June 26, 1941* 83-aao pi» ou - 12 - and leaped up to 4,700 in February. This sudden increase in demand was attributable to a Navy purchase of mercuric oxide, equivalent to about 3,500 flasks, for delivery during the first three months of the year. 36/ The principal use of mercury by the Navy was in the form of oxide, used in the manufacture of anti-fouling paint. Late in 1940 the amount of mercury in the paint formula was doubled, in the belief that a ship could thereby be kept in operation for from 18to 24 months by merely washing it down, instead of repainting it every six to nine months. The January spurt in consumption was an immediate consequence« It offered no guide to future requirements, however, because tests were then being made of an anti-fouling paint developed at the Mare Island Navy lard, which used no mercury at all. If the high mercuric oxide formula were used, Navy requirements would run to about 5,000 flasks for a two-year emergency; if the Mare Island formula proved satisfactory, Navy requirements would be virtually nothing. 37/ Aray requirements were similarly uncertain. No change had yet been made in the Munitions Board estimates on which the October 1940 procurement plans of NDAC were based, but the situation was no longer the same. The ANMB still clung to its forecast of 35,000 flasks a year for civilian consumption and 7,000 flasks a year for military use, including naval requirements. The Army program, however, called for calomel for 5,000 flares a month, whereas the British, with the experience of 18 months of war behind them, were asking for a total of 475,000 flares under the newly enacted Lend-Lease Act. There was a possibility, moreover, of a British need for 6,000 flasks of metallic mercury a year, should their supplies from Spain be cut off. On the other side of the ledger were numerous substitutions for mercury in the civilian economy. In the light of the available statistics, the Bureau of Mines was asked by OPM to canvass the mercury producers with a view to determining the probable life of the domestic reserves at the existing level of production. 3^/ The survey got under way early in March, and a report was available before the end of April 1941. The report was summarised by Leith and Lund in a general review of the mercury situation dated April 28$ "Summary figures just reported by the Bureau of Mines show that at current prices domestic mines had reserves on March 1, 1941 (including proven, probable and possible 2^7 Memorandum, R. J. Lund to George M. Moffett, March 3, 1941 (Weekly Progress Report); memorandum, C. K. Leith and Lund to Moffett, April 28, 1941. 22/ Memorandum, C. K. Leith and R. J. Lund to George M. Moffett, April 28, 1941. ¿8/ Memorandums, R. J. Lund to George M. Moffett, March 3 and iq, 1941 (Weekly Progress Reports). 28*630 Pso OU - 13 - ore) of nearly 92,000 flasks of mercury, conservatively estimated, equivalent to about 3 years1 output at the 1940 rate. Owing to unequal distribution of the reserves, however, production could probably not be maintained at this rate for the three years. The Bureau also reported, •It is believed safe to forecast maintenance of present output for at least a year following which a gradual decline would be experienced. This decline could be postponed or production could be increased by stabilising price at its March 1 level and guaranteeing it for a fixed period - say, two years or more.1 It was also reported by the Bureau that a reduction in price to $150 per flask would have an appreciable immediate adverse effect on output and a more pronounced effect later. Average grade of ore in the reserves reported to the Bureau was 4.5 pounds mercury per ton, which is considerably below the 7-pound yield experienced in recent years. Four nines that produced 3,100 flasks in 1940 are now shut down for lack of reserves. ■The Geological Survey, after a brief review of this report, is even less optimistic concerning the amounts of mercury that can be produced at various price levels. ■ 39/ It was immediately following this report and largely because of it, that purchase of the entire Mexican output was recommended. The Price Problem,—After reaching a low point of *162 a flask in January, the price of mercury in the New Tork market began risix^ again, stimulated by the heavy Navy purchases of oxide as well as by the abortive announcement of government buying in Mexico. By March, the price was up again to *180. Leon Henderson, Price Stabilisation Commissioner under NDAC and soon to be Administrator of the Office of Price Administration and Civilian Supply, was then in the thick of his anti-inflation fight, and the mercury situation offered as dear a test case as ho was likely to find. On March 28, 1941, while OPM officials were dickering with Mexican producers and trying, without success, to get adequate requirements estimates from the Armed Services, Henderson issued a press release in which he warned that the high price of mercury constituted a definite inflation threat. Recalling that the metal had sold for *84 a flask in August 1939, he assorted that "Price rises of over 100 percent in individual commodities, oven in a relatively minor commodity like mercury, threaten to have an unstabilising effect on the general price and wago level and on the cost of living.■ On a yearly bads, domestic production was running well ahead of consumption, and Headersan concluded that the rising market was duo to inventory hoarding in anticipation 32/ Memorandum, C. K. Leith and M. J. Luni' to George M. Moffett,’ April 28, 1941. - u - of increased requirements and still higher prices» 40/ On April 14, a meeting to discuss the price problem was called by OPACS, which had been set only three days earlier* Leith and Lund attended for 0PM, other agencies represented being the Bureau of Mines, Army and Navy Munitions Board, State Department, Geological Survey, and Procurement Division of the Treasury* The OPACS representatives repeated Henderson's charge that the price of mercury was too high, but they recognized the danger of lowering it before additional supplies were assured to replace those that would be lost from high cost domestic mines* *Advisability of establishing a price ceiling was discussed in detail, including (a) putting a temporary ceiling at current levels with the explanation that it is too high and that lower levels might and probably would be established in the future, and (b) putting a much lower ceiling on prices at the present time* Possibility of a separate schedule for spot and longterm contract prices was also mentioned* It was finally decided that a low ceiling should not be established until a definite deal with Mexico is made because of the danger of a sizable drop in domestic output, and that a liigh ceiling would likewise be inadvisable because this might result in a raising of long-term contract prices and make difficult a good deal with Mexico at a much lower figure* No immediate action will be taken, therefore, on a ceiling** 41/ Immediately after the Mexican purchase had been officially recommended in May, OPACS called another conference, which met on the morning of the 19th* The price ceiling was again the principal topic of discussion* The OPACS proposal, as Lund summarized it, ■set up a ceiling at $125*00 per flask,with the assertion that the major part of the present output can be produced with a reasonable profit at that figure* If supplies in addition to those that would be produced at the $125*00 figure were needed, a scheme would be set up whereby the higher cost producers would be allowed to petition for higher prices* They would be required to submit full cost data to OPACS, for the year 1940 and the first part of 1941, and also submit balance sheets, etc* After studying these petitions, OPACS would certify meritorious 40/ WAG Press Release, PM-202, March 28, 1941. 41/ Memorandum, Leith and Lund to Moffett, April 21, 1941 (Weekly Progress Report)* Also memorandum, Leith and Lund to Moffett, April 28, 1941. 93-630 PBS bu - 15 - cases to the Reconstruction Finance Corporation with a recommendation that they buy the output at whatever higher price was indicated. The plan then became complicated, but it was ny understanding that if the supplies bought by RFC were needed to satisfy total civilian requirements, such amounts would be made available to consumers at a price of |125*00. If RFC could not absorb this loss, legislation might be necessary setting up an equalization fund to take care of such losses* Producers would also be required to submit to OPACS their best estimates of anticipated production at price and costs thereon by 6-months* periods from January 1, 1941, to June 31, 1943, ^1^7 inclusive*• 42/ The RFC representative at the meeting doubted if existing legislation could be stretched to cover such a program; and the Procurement Division representative shared Lund's doubt that $125*00 a flask would bring out a substantial part of domestic production. Lund also felt that the effect of such a price ceiling would be to discourage producers of other strategic minerals as well as mercury. The OPACS spokesman, F. R. Hoisington, however, indicated that Leon Henderson was anxious "for immediate action to rectify this unjust price situation, and could give no assurances that such action might not be taken in the immediate future* ■ In a telephone conversation the next day, Hoisington told Lund they had raised their prospective ceiling price to $135 a flask, but the rest of the scheme remained unchanged* Lund quoted the opinion of the Geological Survey that *if price drops appreciably below $150*00, the annual rate of production may drop to 10,000 flasks before 1941 is over** In reply to Lund's question "as to whether or not it was advisable to discourage continued domestic production and development of additional deposits,* Hoisington stated that •perhaps we should discourage such development, in order to prevent the type of over-development so rampant at the end of the last war** It was clear that OPACS was counting heavily on Mexican supplies* 43/ Lund thought that mercury was being singled out as a guinea pig to test price control in the metals field, and the scheme did indeed resemble in many particulars the prewi wn price plan later put into effect for copper, lead, and zinc* For the tine being, however, Lund's protest achieved no more than an agreement that no action on the price ceiling would be taken without consulting OPM, and that the whole question would be deferred pending the outcome of the Mexican negotiations* 45/ Memorandum, R* J* Lund to George M. Moffett, May 20, 1941* 43/ Ibid. 44/ Memorandum, Lund to Moffett, May 19, 1941 (Weekly Progress Report). 45/ Memorandum, Lund to Moffett, June 10, 1941 (Weekly Progress Report)* 88-880 *83 hu — 16 — Administration of the Mercury Program.—During the middle months of 1941 the organization of the metals and minerals work under OPM was in a state of flux. Late in June, the Minerals and Metals Group that had been inherited from NDAC became Industrial Division Number 3, with Stettinius as Director and Philip D. Reed as Deputy Director. Leith served as Technical Consultant to the Division, which was subdivided into eight commodity branches. Miscellaneous minerals, including mercury, were assigned to Branch 8, of which Lund was chief. In July, the name of the Division was changed to Industrial Subdivision "E", but without any significant shift in personnel. While this reorganization was taking place, the supply and requirements figures for mercury were revised, and a three-year program outlined. The military requirements were still questionable, but the best available figures for the year 1942 included 4,000 flasks for the Army and 2,200 flasks for the Navy, which was reported intending to go back to the original formula for antifouling paint. The Army and Navy Munitions Board still placed civilian consumption, including indirect defense orders, at 35,000 flasks. Projecting these estimates over a three-year period, Lund arrived at a total figure of 122,000 flasks, or a little more than 40,000 flasks a year, excluding any possible lend-lease demands. After the slump of January and February, domestic production had risen again to around 3,500 flasks a month, or a yearly rate of 42,000 flasks. Production for 1941 was therefore estimated at 40,000 flasks, less 3,000 earmarked for the stockpile. If, however, a price ceiling below the current market were imposed, it was estimated that domestic output for 1942 would be only 30,000 flasks, and for 1943 only 20,000. The difference between domestic production and total requirements for the three-year period was 35>000 flasks, or the amount recommended for the stockpile. Government and industry stocks on hand as of April 30, 1941, including the 3,000 flasks earmarked for stockpile out of 1941 production, brought total available supplies from United States sources for three years to 104,209 flasks. The difference between this figure and the requirements estimate of 122,000 flasks was to be acquired from Mexico. The most pressing of Lund’s recommendations was consequently to urge all possible speed in completing the Mexican negotiations. He saw no need for priorities, for revised specifications, nor for conservation measures other than those already put into effect. The use of mercuric nitrate in making hatter’s felt was shortly to be abolished by State action in Connecticut, the center of the industry; and substitutes were also being widely used in making primers for ammunition. 46/ 46/ R. J. Lund, "Report on Mercury,” June 19, 1941; memorandum,-" Lund to House Military Affairs Committee, June 26, 1941; memorandums, Lund to George M. Moffett, May 19 and June 3, 1941 (Weekly Progress Reports). Also memorandum, Lund to Moffett, May 20, 1941. 83*880 P24 bu - 17 - The Mexican agreement was concluded early in July, but the epot market for mercury remained so tight that permission was granted to the New Idria Quicksilver Company to suspend deliveries on its government contract for the months of July and August, the metal to be diverted to the open market. 47/ It proved necessary to continue this arrangement through November, in order to provide supplies for current use, 48/ largely because no significant quantity of the metal was received from Mexico until October. The second major reorganization of OPM took place late in August. Stettinius, who resigned to become Lend-Lease Administrator, was succeeded as Director of Priorities by Donald M. Nelson, and the mi neral a and metals branches went over to a new Materials Division, headed by William L. Batt. Philip D. Reed remained as Deputy Materials Director, and continued to have administrative supervision over a number of commodity branches, including Miscellaneous Minerals. At the same time, the Supply Priorities and Allocations Board was established a notch above OPM in the governmental hierarchy, and the civilian supply functions of OPACS were transferred to OPM, while OPACS itself was renamed the Office of Price Administration. This realignment reflected the growing tenseness of the foreign situation following the German invasion of Russia in June. The Atlantic Charter had been announced only two weeks earlier, giving a new urgency to the whole defense effort. Early in September, the stockpiling program was reanalyzed, and new recommendations, superseding all previous ones, were sent by Knudsen to the Federal Loan Agency. 49/ The stockpile objective for mercury remained at 35,000 flasks, and no change in the general plan was made. Revised estimates raised the outlook for domestic production somewhat, but the estimated requirements were also raised, so that the anticipated three-year deficit, to be covered by imports from Mexico, remained about the same as that forecast in June. In view of the existing market situation, however, Lund now proposed that only half of the mercury to be delivered under the Mexican agreement be placed in stockpile, the rest going directly to OPM for allocation to industry. The domestic price, meanwhile, had risen to $190 a flask, and it was clear that price action by OPA, temporarily deferred by the reorganization, could not be much longer delayed. 50/ Also in September, Congress revoked the exemption from the excess profits tax granted to the mercury industry the previous ¿2/ Letter, R. J. Lund to Clifton E. Mack, July 12, 1941. 48/ Memorandum, R. J. Lund to Philo W. Parker, October 22, 1941* 49/ Letter, William S. Knudsen to W. L. Clayton, September 5, 1941» 50/ R. J. Lund, "The Mercury Program," September 5, 1941» 23-620 P25 - 18 - year, 51/ but with the price structure of the industry under fire and the supply situation easing, little attention was paid to the action» The possibility of an actual shortage of mercury, if it had ever really existed, passed In October when substantial quantities began to arrive from Mexico» At the. same time, the development of a new ore body by the New Idria Quicksilver Company promised a considerable increase in domestic output; and a report by a technical committee of the National Academy of Sciences indicated the possibility of extensive substitution should it become necessary» By December, when the long awaited emergency came without warning, the Government stockpile amounted to a little over 4,000 flasks, while another 12,000 were available in the hands of industry. 5X/ Revenue Act of 1941» 55 Stat» 703» September 20, 1941« The section of the Internal Revenue Code granting the exemption was made inapplicable to any taxable year beginning after December 31, 1940. 52/ National Academy of Sciences, Advisory Committee on Metals and Minerals, Report No» 26, November 14, 1941« The substitution of lead aside for fulminate of mercury in the manufacture of detonators had already cut the use of mercury for this purpose from about 20 percent to 10 percent of total consumption» 53/ Supply Priorities and Allocations Board, "Report on Mercury," December 9, 1941 (SPAB Document 16 b)» 89*020 p26 - 19 - III. STDiULATION AND CONTROL UNDER WPB (December 1941 to April 1943) The confusion immediately following the Japanese attack on Pearl Harbor quickly passed, and the defense agencies were geared to the vastly greater needs of total war. In the whole field of raw materials, the procurement of supplies in quantities larger than ever before contemplated took precedence over all other objectives. Emphasis was placed on increasing domestic production, conserving materials by substitution and restriction of civilian use, and importing as much as possible. Before the end of January 1942, OPM gave way to the War Production Board, which assumed the task of providing everything necessary for war. Primary responsibility for the mercury program continued to rest with R. J. Lund, who remained as Chief of the Miscellaneous Minerals Branch, but those in immediate charge of mercury were Franklin C. Johnson and Bernard N. Jackson. Johnson had been assistant to the Vice President of F. W. Berk and Company, Incorporated, of Wood Ridge, New Jersey, joining the staff of OPM about the first of November 1941. His specialty was distribution and consumption of mercury and mercury products. Jackson was pH warily interested in production and marketing, having been Vice President and President^of Metal Traders, Incorporated, the New York branch of Metal Traders, Limited, of London, with which he had previously been connected. These firms were the American and British outlets, respectively, for the Spanish-Italian mercury cartel. Jackson came to the War Production Board in January 1942 on a dollar-a-year basis, and remained only until March. He was replaced on March 11, 1942, by Robert J. McEwen, a mining engineer and mercury mine manager with H. W. Gould and Company of San Francisco. The Gould comparer operated various mercury properties, including the New Idria Quicksilver Company. Conservation and Price Control.—The first decisive step in controlling the supply and distribution of mercury was taken three weeks after the United States entered the war, when the metal was included as one of thirteen strategic materials placed under import control. Under General Imports Order M-63, effective December 28, 1941, mercury could be imported only by the Metals Reserve Company or some other Government agency,unless otherwise authorized by OPM. 54/ Existing contracts were not disturbed, but it was required that goods in transit and future shipments be sold to the MRC. Government control over a substantial portion of the supply was thus established. There was no immediate increase in the demand for mercury, and production was still adequate to meet existing needs. The uncertain nature of the reserves, however, and the possibility of OPM Press Release, PM-1944, December 27, 1941J memorandum, Herbert Emmerich to the OPM Council, January 7, 1942 (OPM Document las). 8S~02O *27 - 20 - suddenly expanded military demand, made it desirable to restrict all unessential uses as quickly as possible. A conservation order was drafted early in January, and was issued on the 23rd as Conservation Order M-78. The use of mercury was prohibited in the manufacture of hatter’s felt, in marine anti-fouling paint, in thermometers (except industrial and scientific), in the treatment of green lumber (except Sitka spruce), in turf fungicides, in the manufacture of vermilion, in wall switches for non-industrial use, and for wood preservation. The amount of mercury used in fluorescent lamps, health supplies, fulminate for ammunition, and industrial and scientific thermometers, was not to exceed the amount used in the corresponding quarter of 1940 or the first quarter of 1941, at the manufacturer’s option; and mercuric fulminate for commercial blasting caps was not to exceed 125 percent of the amount used in the same base period. All other uses of mercury were cut to 80 percent of the amount consumed for the same purpose in the quarter chosen as a base. Military and Lend-Lease orders were excepted from the restrictions, as were all other orders bearing preference ratings of A-l-j or higher. All manufacturers were forbidden to receive delivery of mercury or any of its products in quantities such as to increase his inventory beyond "minimum practicable working* limits. The conservation order was quickly followed by the establishment of the much talked of .and long delayed price ceiling. The course of events had ironed out the differences between OPA and WPB, and there was substantial agreement on the price fixed. It was more important to get the metal than it was to control the profits of a few lost-cost operators; and it was also important to act promptly. The ceiling was announced on February 3, effective the next day. Mercury produced in California,'Oregon, Washington, Idaho, Utah, Nevada, or Arizona was to be sold for not more than $191 a flask, f.o.b. point of shipment; and mercury from Texas and Arkansas for not more than $193. The ceiling price for Mexican mercury was $193 f.o.b, port of entry, with duty included. 55/ Dealers were permitted to add a two percent premium plus the actual shipping charges paid by them. The current open market price was then in the neighborhood of $202 a flask in New fork. 56/ Purchasing Policy.*—After a slow start, deliveries under the Mexican agreement amounted to 2,815 flasks in December 1941, and 3,600 in January 1942. This rate of purchase was well in excess of the commitment for 30,000 flasks over a two year period, but so 55/ Office of Price Administration, Price Schedule No. 93, February 4» 1942. 56/ New Yprk Times. February 5, 1942, p. 33. 83-680 pS8 - 21 - great was the prospective need, and so precarious the domestic outlook» that the War Production Board did not hesitate to recommend procurement of all Mexican mercury available at a reasonable price, regardless of the agreed maximum* 57/ Negotiations were also started late in February to secure 10,000 flasks of mercury from Canada, the price to be comparable to that paid to Mexican producers* 5$/ Domestic production, however, remained a question mark* At the suggestion of H* DeWitt Smith of the Metals Reserve Company, Lund recommended that a purchase of up to 5,000 flasks from domestic sources be authorised "as an inducement to increase the producing capacity of the United States*" Contracts were to be made only if there was good prospect of their being fulfilled, and each was to be concurred in by the Miscellaneous Minerals Branch* The Stockpiling Division accepted the recommendation, and arrangements were made to add these 5,000 flasks, together with the 10,000 flask Canadian purchase, to the stockpile* The authorized total for public purchase was thus brought to 50,000 flasks, 59/ of which 12,550 flasks had been delivered by February 15, 1942* 60/ Consumption of mercury during January had been 3,800 flasks, which was cut to 3,000 for the following month, largely owing to the conservation order* The respite, however, was only temporary* March consumption reached 3,500 flasks, and by virtue of a large Army order for calomel, used in making tracer bullets, together with increased manufacture of commercial ammunition and blasting caps, climbed to around 4,500 flasks for April. Fortunately these increasing demands were balanced by rising production, despite forecasts to the contrary* There were competent authorities who estimated that ore reserves in all the Western Hemisphere at the beginning of 1942 were good for no more than 90 days1 production at current rates, 61/ but the new ore body discovered at the New Idria mine proved a bonanza, and extensive deposits were opened in Mexico and Canada before the year was out* By April, Mexico was producing mercury at a rate of 36,000 flasks a 57/ Letter, R* J* Lund to G* Temple Bridgman, Metals Reserve Company, February 5, 1942* 52/ Memorandum, R. J. Lund to W* I. Elliott, February 27, 1942* Mexican producers received $193 f*o*b* port of entry, less the duty of $19 a flask* The freight differential brought the New York price of Mexican mercuxy to about $190* 59/ Memorandum, R* J* Lund to W* Y, Elliott, February 27, 1942; Elliott to Lund, February 28, 1942* 60/ Memorandum, B* N* Jackson to R. J* Lund, March 6, 1942 (Weekly Report)* 61/ R* J* McEwen, "Review of the Mercury Program," rough draft, March 11, 1944, P. 4* 23-620 Pae - 22 - year, and domestic output promised to reach 48,000 flasks, with Canada contributing on the order of 1,000 flasks a month« 62/ With production still running ahead of consumption, the market began to feel the effects of the conservation order« The inventory limitation operated to restrict buying, and the producers soon found themselves with no outlet for much of their metal« Lund and McEwen urged A« 1« Henderson to permit modification of the conservation order, but without success« An agreement was reached with the Metals Reserve Company, however, under which the domestic purchasing plan would be extended to absorb the surplus« The main points agreed upon were embodied in a formal recommendation from Materials Director William L. Batt to Federal Loan Administrator Jesse H. Jones on April 11* Batt called attention to the authorized stockpile of 50,000 flasks, 40,000 of which were to be purchased by the Metals Reserve Company from specified sources. sIt is now recommended that in the purchase of the 40,000 flasks by Metals Reserve Company other sources than those previously mentioned be drawn upon« It is understood that before making any general commitments for mercury from other sources, however, Metals Reserve Company will consult with the War Production Board« *In this connection, I wish also to recommend specifically that Metals Reserve Company purchase any surplus domestic production either held now by producers or that may exist in the future, in order that continued output at recent high production levels will not be permanently curtailed« This is also important in order that exploration for new mercury ore bodies and extension of present ore bodies be continued in order to assure us adequate supplies for requirements during the present emergency of unknown duration« It is also suggested that such purchases be made at prices somewhat below the present price ceiling, the exact figure to be determined by Metals Reserve Conpany. *A surplus of mercury on the domestic market has developed within the past few weeks, partially as a result of (1) curtailment of consumption as a result of the mercury conservation order and (2) the anticipation by consumers of a softening market as a result of the conservation order« Our best estimates, checked recently with the Army and Navy, indicate that this recession in consumption is purely a temporary matter, 62/ Memorandums« R. J» McEwen and F.C. Johnson, to R. J. Lund, March 27 and April 24» 1942 (Weekly Reports)« 83-eao *30 bu - 23 - and that military requirements plus supplies needed to fulfill Russian requirements recently received, will necessitate continued high production from domestic mines»* 63/ This recommendation was accepted by the Metals Reserve Company, which announced the plan in a press release of April 25» Rising Requirements»—Early in May, new estimates of both foreign and domestic requirements were received, transcending the wildest guess that could have been made as recently as a year before» Russian requirements under Lend-Lease were expected to be nearly 9,000 flasks for the fiscal year 1943» British demands, which had been at the rate of 1,000 flasks a month, were increased by 50 percent; and the army entered a request for 18,000 flasks a year for the manufacture of Lewisite gas, contingent on the development of gas warfare, deliveries to begin before the end of 1942» With civilian use cut to 1,000 flasks a month, the total requirement for 1942 was more than 60,000 flasks, and for 1943» should British, Russian, and Army demands continue at the same level, the total would be upwards of 100,000 flasks. 65/ While it was conceivable that Western Hemisphere production might amount to 100,000 flasks in 1943, the extent of the reserves was too indefinite to dount on any such figure» Lund strongly urged, therefore, that 35,000 flasks be secured from Spain at the earliest possible moment, regardless of price and the difficulty of providing exchange» 66/ The need for haste was underlined by the imminent prospect that Spain would fall into Axis hands as German armies swept victoriously across North Africa. The Operating Committee of the Combined Raw Materials Board, in response to an inquiry from the State Department, had advised late in April that there was no need for mercury from Spain; 67/ but the suddenly increased requirements, and the rapid progress of the German campaign in Africa, threw a different light on the question» Lund’s recommendation was transmitted, to the Board of Economic Warfare on May 26, 68/ and was quickly approved» The Spanish purchase was to be added to the stockpile, bringing the authorized total for public purchase to 85,000 flasks. Of this amount, approximately 23,000 flasks had so far been received 63/ Letter, William L. Batt to Jesse H. Jones, April 11, 1942." g/ RFC Press Release 1606, April 25, 1942. 65/ Memorandum, R. J. McEwen and F»C»Johnson to R.J.Lund, May 15, ' 1942 (Weekly Report); memorandum, Lund to W. Y. Elliott, May 23, 1942. 66/ Memorandum, Lund to Elliott, May 23, 1942» 67/ Operating Committee, Combined Raw Materials Board, "Purchase of Mercury from Spain,* Memorandum No» 9, April 28, 1942» £8/ Letter, W. Y. Elliott to Milo Perkins, May 26, 1942» 23-820 PSI bu - 24 - under the various existing government contracts. 69/ On June 6, Lund recommended, by way of speeding delivery on the Spanish mercury, that the metal “be transported directly from Spain to the British Isles, and stockpiled at some point in England.” 70/ It was understood that a part of this metal would be used by the British, and 11,500 flasks of the 35,000 authorized for purchase from Spain was later allocated to the United Kingdom by the Combined Raw Materials Board. 71/ Three weeks later, however, the Western Hemisphere prospects looked enough brighter to justify reconsideration and Lund sent another memorandum to Stockpiling Chief W. Y. Elliott. This time he proposed that only 20,000 flasks be purchased from Spain for immediate delivery, the other 15,000 to be taken care of by a tentative arrangement, subject to cancellation, for delivery over a year’s time. Ultimate purchase of these 15,000 flasks was to depend on the' supply-demand ratio at the time of delivery of the first 20,000. 72/ The proposed Spanish acquisition was paralleled by a new domestic purchasing plan, worked out by the- Miscellaneous Minerals Branch during the early part of June, and recommended to the Metals Reserve Company over date of the 19th. 73/ The plan was announced on July 9. The Metals Reserve Company undertook to negotiate agreements with the smaller producers, guaranteeing them an outlet for their metal at a fixed price of $192 per flask, f.o.b. New York. Two classes of producers, “new” and “eligible”, were included, a new producer being one whose output was less than six flasks in April 1942, and an eligible producer being one who produced not less than six nor more than 90 flasks in the same month. Contracts with new producers provided that the stipulated price was to remain in force until December 31, 1943, but the contracts with eligible producers could be cancelled on 30 days* notice at any time after December 1, 1942, subject to certain stated conditions. Both contracts bound the producer to operate at maximum capacity until December 31, 1943. 74/ The need for mercury had not been overestimated. Early in July, while the domestic purchase plan was being worked out, the anticipated Russian request was received. The total required was 69/ Memorandum, R. J. McEwen and F. C. Johnson to R, J. Lund, June 5, 1942 (Weekly Report). 70/ Memorandum, R. J. Lund to W. Y. Elliott, June 6, 1942. 71/ Combined Raw Materials Board, Decision No. 102, November 30, 1942. 72/ Memorandum, R. J. Lund to W. Y. Elliott, June 26, 1942. 73/ Letter, A. I. Henderson to Jesse Jones, June 19, 1942. (File carbon rubber-stamped June 23) See also memorandums, McEwen to Lund, and Lund to Henderson, both June 19, 1942. 74/ Metals Reserve Company, “Information Concerning the Purchase of Domestic Mercury,” July 9, 1942 (Revised); War Production Board, Federal Aids for War Mineral Production, Second Edition, December 15, 1942. 23-620 P32 bu - 25 - 300 short tons। or some 8,700 flasks, but delivery was not to be spread over 12 months as had been anticipated, but had to be immediate. To meet this demand, the metal ^as taken from the Government stockpile, being purchased from the Metals Reserve Company by the Procurement Division of the Treasury. Releases were recommended on July 13, and August 12, 1942, totalling 8,842 flasks, and the entire amount was shipped before September 1. 75/ Rising requirements brought further efforts to increase supplies. On September 30, A. I. Henderson, now Deputy Director General for Industry Operations, recommended to the Metals Reserve Company an extension of the domestic purchasing plan, worked out by McEwen and Lund. While the stimulation program launched in July had been reasonably successful in inducing small producers to operate at capacity, the larger operators were reluctant to undertake exploration and development work, lest the additional output prove unmarketable. "To eliminate this attitude and provide a definite incentive for widespread exploration and development,” Henderson wrote, ”this office recommends that', in addition to purchasing from new and eligible producers, the Metals Reserve Company enter into contracts with the operators of the 12 major mines for all or any part of their production through December 31, 1943, on a basis of $180 per flask, f.o.b. New York, provided such operators, as a consideration, agree to operate their properties at maximum possible capacity until the above date and to endeavor to expand or maintain current exploration and development programs. Cancellation provisions similar to those in effect with eligible producers would probably be desirable." 76/ The new plan was scarcely matured, however, before another urgent request for mercury was received from Russia under the Second Protocol. This time the requirement was for 560 short tons, or 14,736 flasks, for delivery before the end of 1942. The Nazi occupation of the Donets basin had deprived the Soviets of their principal source of mercury. The request was granted, but again the metal was necessarily drawn from the Government stockpile. The Russian situation also made it necessary to revise the 1943 requirements estimates to include an allocation to the U. S. S. R. 25/ R. J. McEwen, "Mercury Time Table," February 28, 1944; memorandums, McEwen and F. C. Johnson to R. J. Lund, July 10, 1942 (Weekly Report); letter, A. I. Henderson to W. L. Clayton, July 13, 1942; Combined Raw Materials Board, "Mercury," Staff Report No. 1, November 21, 1942 (CRMB Document No. 107). 76/ Letter, A. I. Henderson to Jesse Jones, September 30, 1942. 23—^20 P33 bu - 26 - equivalent to the quantity shipped in 1942. 77/ The release of 14 >736 flasks from the stockpile for delivery to Russia was recommended on October 20, 78/ and shipments began the following month. The whole mercury outlook was tightened by this substantially increased demand, and efforts were made to increase supplies still further. Lund recommended on October 2 that the Spanish acquisition be completed by the immediate purchase for storage in England of the 15,000 flasks deferred in June, and all possible speed was urged six weeks later. 79/ The recommendation was based on "recent developments in the European Theater of war and the absolute necessity of acquiring this material for use in the war program." At the same time, a new contract was approved under which the Consolidated Mining and Smelting Company of Canada, Ltd., would deliver 15,000 flasks of mercury to the Metals Reserve Company during 1943. The previous contract for 10,000 flasks held by this company was expected to be fulfilled by February. A contract for 3,000 flasks, later increased to. 3,600, was also made with another Canadian producer, Bralorne Mines, Ltd. The latter property was not yet in operation, but the amount called for in the contract represented estimated output for the year. 80/ Labor Problems.— Although the total number of men employed was small by comparison, the mercury mines suffered as acutely from labor shortages during the summer and fall of 1942 as did the copper, sine, and other nonferrous mines in the Western States. Wages in the mines were not high enough to compete with the booming aircraft and shipbuilding industries on the Pacific Coast, and local draft boards paid scant heed to the essential character of metal mining in the war effort. By June, McEwen’s office was swamped with complaints from operators, and one mine in Oregon was actually closed for lack, of men. 81/ Production for May reached a new peak of 4,800 flasks, 33 175 percent above the figure for the same period in 1941, but June output failed to show any increase, and was only 20 percent above the June 1941 total. 82/ 77/ Combined Raw Materials Board. "Mercury." Staff Report No- 1, November 21, 1942 (CRMB Document No. 107). 78/ R. J. McEwen, "Mercury Time Table," February 28, 1944. 79/ Memorandums, R. J. Lund to W. Y. Elliott, October 2, 1942; R. D. Parks to Elliott, November 16, 1942. 80/ Memorandums, R. J. Lund to W. Y. Elliott, November 20 and December 8, 1942; letters, Elliott to Morris S. Rosenthal, BEW, November 23 and December 9, 1942. 81/ Memorandum, F. C. Johnson and R. J. McEwen to R. J. Lund, June 13, 1942 (Weekly Report). 82/ Memorandum, R. J. McEwen and F. C. Johnson to R. J. Lund, July 17, 1942 (Weekly Report). 28—620 *84 -27-1 The labor shortage amounted to more than 400 men in June, or better than 20 percent of the total employed in the industry* 83/ The shortage continued to mount through the summer, with workers seeking parity with shipyard wage scales, and operators asking WPB intercession with the Selective Service to prevent wholesale drafting of miners* During the first week in August two conferences were held in the office of Brigadier General Frank J* McSherry of the War Manpower Commission, with representatives of the United States Employment Service, as well as of WPB, present* It was agreed that efforts should be made to secure miners and other workers from labor available in Minnesota* 84/ The suggestion reached the action stage on the 17th when Lund presided over a meeting of Western mercury producers in San Francisco* The meeting was called to select a representative to visit the Mesabi district of Minnesota on a labor recruiting mission. 85/ The pool of manpower said to be available in this region, however, proved to be composed largely of unemploy-ables, at least so far as the needs of the quicksilver industry were concerned* 86/ By mid-August, the labor shortage had climbed to 25 percent of the industry's current manpower, and development work was at a standstill* 87/ The whole mine labor question, meanwhile, was taken in hand by an Interdepartmental Committee on Mon-Ferrous Metals, under the Chairmanship of Harry 0* King, Chief of the WPB Copper Branch* McEwen had earlier proposed-sending a letter to the mercury mines urging the importance of staying on the job, and this suggestion was taken up and amplified by the Interdepartmental Committee* The letters were sent about September 1 to all nonferrous miners and operators, and were signed by War Manpower Commission Chairman Paul V* McNutt; Major General Lewis B* Hershey, Director of Selective Service; Chairman William H. Davis of the National War Labor Board; and War Production Board Chairman Donald M. Nelson* But the situation called for action rather than persuasion, and the letters were followed on September 7 by the first Employment Stabilisation Order issued by the War Manpower Commission* The twelve Western States were declared to be a labor shortage area, and all nonferrous miners were frozen in their jobs* The mercury mines, nevertheless, continued to lose workers, who did not always bother with the required certificate of separation, and in general resented the freeze order* 88/ In October, the Toxas 81/ /R. J* McEwe^ •Mercury Mine Manpower Survey," June 1942 (tabulation by mines, based on a questionnaire)* Memorandum, R. J* McEwen and F. C* Johnson to R. J* Lund, August 7, 1942 (Weekly Report). 85/ Ibid.* August 21. ££/ Summary, Mercury Producers Industry Advisory Committee, October 5, 1942* 82/ Minutes, Interdepartmental Committee on Non-Ferrous Metals, August 25> 1942* 88/ Summary, Mercury Producers Industry Advisory Committee, October 5, 1942. 23-020 P3S - 28 - Mercury Company reported a shortage of 30 out of a force of 110 men, and asked permission to import Mexican miners. The Fresno Mines in California had only 8 men left out of a crew of 41« Both companies were 50 percent below normal production. 89/ New Idria, the largest mercury mine in the country, reported production at the rate of 760 flasks a month, which could be increased to 1,000 or better with 50 more men. 90/ For the industry as a whole, the shortage was put conservatively at 350. 91/ On October 8, 1942, an order was issued by the War Production Board closing the nonessential gold mines in the expectation that labor would be freed to produce the more critical nonferrous metals, 92/ and before the end of the month, the Army began furloughing soldiers in a final effort to relieve the mine labor shortage, but neither of these expedients placed a single worker in the mercury industry. Neither were the activities of the United States Employment Service of any immediate aid in lifting the output of quicksilver. At the request of the Labor Requirements Committee of WPB, three lists of minerals, classified in terms of labor needs, were drawn up for the guidance of the Employment Service in placing men in the mines. Mercury was oh List No. 1, "Critical Labor Shortage," 93/ but was shifted to the second list by the USES on the ground that the labor shortage in mercury mining was not comparable to that in copper and other metals. 94/ On an absolute basis, of course, this was correct, but on a percentage basis the manpower needs of the mercury industry were even greater than those of the other nonferrous metals. On November 2, a form letter over R. J. Lund’s signature went out to the mercury producers, enclosing a recommended procedure to be followed in seeking occupational deferments for employees. Another form letter, dated November 3, called attention to an 89/ Memorandum, R. J. McEwen and F. C. Johnson to R. J. Lund, October 9, 1942 (Weekly Report). 90/ Memorandum, R. J. McEwen and F. C. Johnson to R. J. T-und t October 23, 1942 (Weekly Report). 21/ Minutes, Interbranch Meeting of Branches Concerned with Mineral Production, October 9, 1942. R. J. Lund added 25 to McEwen's 'estimate of 325, given in a memorandum, McEwen to Lund, October 8. 22/ See Policy Analysis and Records Branch, Office of the Executive Secretary, War Production Board, The Closing of the Gold Mines. (Report No. 9) 22/ Minutes, Labor Requirements Committee, Meeting 4, October 19, 1942; minutes, Interdepartmental Group on Mineral Production, October 28, 1942; memorandum, Edwin M. Martin to Carl J. Goff. November 5, 1942 (Labor Requirements Committee Document No.14). 24/ Minutes, Interbranch Meeting of Branches Concerned with Mineral Production, November 6, 1942. 23“620 P36 b“ - 29 - Executive Order, effective since October 1, which required double tine pay for work on the seventh consecutive day« The mercury producers were referred to the Department of Labor for clarification where special cases might arise« 95/ Early in November, McEwen made a personal survey of the industry to determine for himself the extent of the labor shortage and the success of the measures being taken to combat it« He reported that the United States Employment Service, "in attempting to set up some priority order for various materials, seized upon the A-l-j clause in Mercury Conservation Order M-78, and for some mysterious reason used this as an index-priority number in classifying the various metals. This put mercury at a very serious disadvantage and practically at the bottom of the list, so far as the strategics are concerned. "As an incident illustrative of the confusion which surrounds the whole situation on the Pacific Coast, the New Almaden Corporation reported that a U.S.E.S. representative visited the property late in October, and attempted to persuade several of the employees to leave their present occupation to go to work milking cows in a dairy • • • "Another incident illustrative of this confusion is that, when the U.S.E.S. advised the Regional Office of the W.P.B. as to what mining operations were short of labor during the recent conversion period of labor from the gold mines to the strategics, only two west coast mercury mines were listed« In Washington, D. C., on October 5, Mr« George Tobias read off the names of quicksilver mines which the National Headquarters of the U«S«E.S. had listed as needing men« Two tabulated mines mentioned and discussed during the meeting ... were completely missing from the list ... of properties needing experienced mine labor. "On Friday, October 23, at the request of /the Branch Chief’s/office I telephoned the managers of the 25 largest mines on the Pacific Coast, and asked them what their labor situation was. Practically every one of these mines reported.from a 15% to 20% shortage of actual needs in men, and one mine • • • reported that they had secured three men of twenty asked for from the U.S.E.S., and yet in the list previously 95/ See Executive Order No. 9240, September 9, 1942« 23-620 p37 bu - 30 - referred to no reference was made to the necessity of securing miners for this operation* * 2^/ When McEwen’s report was discussed at a meeting of the minerals divisions of WPB on November 16, the USES representative charged the mercury producers with uncooperativeness, and blamed poor housixg conditions in the San Francisco area for much of the labor shortage. The discussion, however, served to clear the air; and at the next meeting of the group the mercury situation was reported to be well in hand* 22/ Efforts to Increase Supplies*—The net result of the labor situation was a steady decline in mercury production beginning in July* 98/ This decline in output coincided with the rising I^nd-Lease and military requirements, and made a definite shortage at no very distant date appear as something more than a possibility. Such was the situation when McEwen learned by telephone about 7 p.m. on Friday, July 3, 1942, that a serious brush fire was threatening the New Idria mine in California, the largest domestic producer. The local authorities appealed to the state forester, who asked the Any for 200 men from Fort Ord some 50 miles away, but the request was refused* With the flames sweeping down a slope toward the unprotected mine shaft, company officials called the War Production Board in desperation, but it was clear that only the Army could get enough men to the scene in time to save the mine. McEwen relayed the information to Lund at his home, but Lund tried in vain to reach his own superiors, A. I. Henderson or W. H. Dodge. He then tried to reach responsible Army officials directly, and fimlly got Uhder Secretary Patterson on the phone. Patterson agreed to look into the matter immediately* Lund learned next morning that 200 soldiers from Fort Ord had reached the site of the fire at 6 p.m. Pacific time on July 3, and the fire was under control by the 6th* 22/ With requirements increasing and production falling off, an amendment to the conservation order was issued on August 5* The major purpose of the amendment was to strengthen the 26/ Memorandum, R. J* McEwen to R. D. Parks, November 13, 1942* 97/ Minutes, Inter-Division Meeting of Divisions Concerned with Mineral Production, November 16 and November 20, 1942. 98/ Memorandum, R. J. McEwen and F* C* Johnson to R* J* Lund, November 12, 1942 (Operating Report). 99/ Memorandums, R. J* Lund to A* I* Henderson, July 6 and July 13, 1942 (Weekly Operating Summaries, Miscellaneous Minerals Branch)* Also R. J. Lund and R. J* McEwen, in interview with the writer, May 12, 1944. 28-820 P38 bu - 31 - restrictions by including redistilling of mercury within the meaning of the term "processing"; but the curtailing effect was increased by the addition of fireworks and preparations for film development to the list of prohibited uses, and by restriction of the amount of mercury in cosmetics and preparations for bleaching the skin or removal of freckles to 30 percent of that used during the base period. Deliveries to research laboratories and to the War Shipping Administration were excepted from the restrictions imposed by the order, but no additional consumption of metal was entailed, such uses having previously been granted on appeal. 100/ There was a limit, however, to the amount that could be saved by conservation measures. What was needed was more mercury, and that the responsible officials of WPB set out to Shortly after he joined the Miscellaneous Minerals Branch in March 1942, McEwen had prepared a list of five mercury properties, all formerly large producers, that offered promise of substantial returns if more or less extensive exploratory work were carried out. 101/ The projects were verbally recommended to the United States Geological Survey, which conducted its own investigations, and early in September, gave its verbal approval of the program. With the ground prepared informally, R. J. Lund wrote on September 19 to W. C. Mendenhall, Director of the Survey, to initiate official action: "With the known danger in mind that the established ore reserves of the mercury industry are of an extremely limited nature, and the possibility that the current production rate might at any time drop sharply, it is desirable that we completely review all possibilities of initiating new production. "With this end in view, we would appreciate your forwarding to this office recommendations for core drilling programs that are, in the opinion of the Survey, meritorious projects and have possibilities of developing production over and above that now available." 102/ With his reply, dated September 28, Dr. Mendenhall enclosed a copy of a recent memorandum to the Bureau of Mines, "which embodies the Survey's considered judgment on this very question." The memorandum listed five projects "which seem to offer the best chances of adding materially to the Nation's reserves," 103/ The 100/ Conservation Order M-78 as amended August 5. 1942/"" 101/ Memorandum, R. J. McEwen to R. D. Parks, March 24, 1942, The exploration of properties in Venezuela, Peru, and Honduras, was also recommended, but jurisdiction over these projects belonged to other agencies of the government, 102/ Letter, R. J. Lund to W. C. Mendenhall, September 19, 1942, 103/ Letter, W.C .Mendenhall to R. J. Lund, September 28, 1942. - 32 - five projects were the Guadalupe mine, and the New Almaden mine, both in Santa Clara County, California; the Oat Hill mine in Napa County, California; the Nonpareil mine in Oregon; and the Terlingua district in Brewster County, Texas. All but the Oregon property were on the list recommended by McEwen in March. The next step was up to the Bureau of Mines, but because of a standing quarrel between that agency and the War Production Board, Lund hesitated to make the necessary recommendation. Instead, he carried the problem to the Deputy Director General for Industry Operations, A. I. Henderson, in a memorandum prepared for his signature by McEwen: "I wish to call to your attention the report of certain relationships that reputedly exist between the War Production Board and the Department of the Interior, as particularly represented by the Bureau of Mines. "In March of this year, the mercury specialist of this Branch made certain verbal recommendations to the United States Geological Survey for the exploration of mercury deposits in the western part of the United States. These were subsequently thoroughly investigated by the Survey, and concurrence expressed in verbal reports made to this office early in this month. "Inasmuch as we believe that these projects have definite possibilities which could result in the discovery of new ore bodies necessary to the maintenance of the domestic production rate, we wish to immediately recommend that the Bureau of Mines initiate a drilling program to actually prove whether or not ore bodies suggested by geological indications do or do not exist. "However, we have been advised by certain officials of the U. S. Geological Survey that the recommendations of the War Production Board would be the surest and most final way of killing these projects completely. These officials have indicated that, inasmuch as there was a definite unwillingness on the part of the Bureau of Mines to accept recommendations of the War Production Board, the most effective procedure of actually having these projects initiated and completed would be to have these identical recommendations initiated by the U, S. Geological Survey. If true, I feel that the situation is utterly ridiculous, and one of the finest examples I have seen of fiddling while Rome burns. 23-620 ?4o bu - 33 - "May I suggest that immediate steps be taken to clarify relationships existing between the Department of the Interior and the War Production Board, to the end that there is a clearer definition of powers, and the establishment of more cordial and mutually beneficial relationships. - 124/ Henderson delayed for three weeks, but decided in the end to go through the usual channels, quarrel or no. On October 15 he addressed a letter to R. R. Sayers, Director of the Bureau of Mines,, explaining the tight supply situation and urging that the projects recommended by Mendenhall be immediately undertaken. Sayers* reply, dated October 24, was distinctly lacking in enthusiasm. "The Bureau of Mines,” he wrote, "appreciates receiving the information contained in your letter of October 15 concerning the status of mercury supplies and the need for additional resources of that metal . . . . The suggestions of the Geological Survey as to the advisability of exploring various mercury deposits have been given the careful consideration that you suggest. * Henderson took this for a commitment, and wrote immediately to Jesse Jones to solicit the cooperation of the RFC in the program. After noting the rising export requirements and the prospects for declining production, the letter to Jones continued: "This all points up the necessity of initiating and encouraging an active exploration and development program for new and increased mercury production to take the place of output from present mines that will be depleted in the near future. "The War Production Board has been working closely with the Geological Survey in mapping out a development program, including drilling and trenching, at a number of properties that appear to offer the most promising results. This program has recently been recommended to the Bureau of Mines, both by the Geological Survey and by the War Production Board. "I now recommend that the Reconstruction Finance Corporation and the Metals Reserve Company lend every possible assistance in developing new and increased mercury production in the United States. This will include any help that can be given in connection with the plan recommended to the Bureau of Mines, but will also cover any additional work that can be initiated at other properties which comprise meritorious prospects." 105/ 104/ Memorandum, R. J. Lund to A. I. Henderson, September 22, 1942. 105/ Letter, A. I. Henderson to the Secretary of Commerce, October 28, 1942. 29-620 P41 - 34 « The WPB was to cooperate closely with RFC and the Metals Reserve Company in carrying on the work, which was to be under the general direction of Ira B. Joralemon, RFC engineer. Following his November field trip, McEwen urged the addition of the Chisos Mine in the Terlingua district of Texas to the group to be explored by the Bureau of Mines, and this recommendation was forwarded to the Interior Department in December. 106/ Other potentially rich mercury deposits were located by the Geological Survey in Alaska during the summer of 1942, and exploration there was continuing« 107/ Although the projects recommended met with at least a nominal approval from all concerned, none of them was actually started until well along in 1943, largely because of the friction between the Bureau of Mines and the War Production Board over basic policy in connection with the whole question of mineral procurement. 108/ The loss, however, was primarily of a long-range character. Stimulation of a more immediate nature was achieved through development loans from the RFC and Metals Reserve Company. By the end of February 1943, fourteen substantial loans to producers in six States, together with twelve for smaller amounts, had been granted, aggregating $268,350. 109/ Another $125,000 was added in April for erecting a mill at the very promising Bed Devil mine in Alaska, to be operated by the New Idria Quicksilver Company. 110/ As a further incentive to production, the exemption of the mercury industry from the excess profits tax was restored in the Revenue Act of 1942, applicable to taxable years beginning after December 31, 1940; 111/ and the Miscellaneous Minerals Branch succeeded in blocking a move on the part of OPA to lower the price ceiling for the larger producers. To the vigorous protest of McEwen and Lund that "any action that might create distrust of Government intentions and eliminate mercury mining as an investment 106/ Letter, J. R. Kimberly, Deputy Director General for Industry^ Divisions, to the Secretary of the -Interior, December 22, 1942; memorandums, McEwen to Lund, December 14; Lund to J.M.Scribner, December 17; Scribner to Kimberly, December 17. 107/ Minutes, Interdepartmental Group on Mineral Production, December 16, 1942; memorandum, R. J. McEwen and F. C. Johnson to R. J. Lund, January 20, 1942 (Operating Report). 108/ See memorandum, R. J. McEwen and F. C. Johnson to R. J. Land, February 18, 1943 (Operating Report). 109/ United States Senate, 78th Cong., 1st Sess., Special Committee to Study the Problems of American Small Business Enterprises, Hearings, part 18, pp. 2434-36 (April 1, 1943)« 110/ Memorandum, R. J. McEwen and F. C. Johnson to R. J. Lund, April 28, 1943 (Operating Report); minutes, Mineral Resources Operating Committee, Meeting 9, April 23, 1943« Also memorandum, R. J. Lund to W. I. Elliott, March 4, 1943; letter, Elliott to Jesse Jones. March 17. 1943« 111/ Revenue Act of 1942, 56 Stat. 920, October 21, 1942. Also U.S.C. Sec. 731« ,3-030 *43 bu - 35 - attractive to capital night be disastrous, * OP A indicated a belief that "even at a price below present levels the profits of the producers would be more than adequate," but agreed to take no action for the tine being and to notify WPB well in advance of any future move toward price reduction. ¿A/ Attention was again focused on the long-range production program in February 1943 when McEwen drafted a letter to Secretary of Commerce Jesse Jones, to be sent over the signature of E.W.Reid, successor to A.I.Henderson as Deputy Director General for Industry Operations. The letter was in reply to a request from the Metals Reserve Company that WPB "clarify its position in regard to expansion, development, and increasing the production rate of mercury." McEwen made it dear that he was more concerned to locate ore bodies for future development than he was to speed the rate of output from those already producing: "In mercury, while the requirement figure may be subject to some degree of change, it is the ore reserve situation which is most difficult to appraise and count on. While two or three of our 12 largest producers have as much as a year’s "proven* ore, average figures indicate that reserves available to the industry as a whole do not exceed three months’ supply. "It is felt by the War Production Board that it is not the expansion of existing capacities (which would mean merely a more rapid depletion of known reserves) that is necessary in the over-all picture, but rather, what is more important, it is necessary to encourage the development and setting up of new operations in order to expand our total reserves. "A general oondusion and recommendation in the case of this metal is, then, 1) that we do not believe that there is any great necessity for expanding current operation; but 2) that it is extremely important and vital to initiate new enterprises in mercury mining, and provide facilities for the exploration and development of new properties." 111/ With the Bureau of Mines continuing to delay undertaking the exploration program, the domestic purchasing plan, originally a supplement, became in effect an dternative. By negotiating purchasing contracts whereby the Metals Reserve Company would guarantee a 112? Letters. R. J. Lund to E. S. Glines, November 13, 1942; Glines to Lund, November 20, 1943» 113/ Letter, E. W. Reid to Jesse Jones, February 17, 1943; memorandums, R. J. Lund to Howard I. Young, February 13, 1943; and Young to Reid, February 13, 1943» S3*6SO *43 bu - 36 - market over a reasonable period of time, private capital could be induced to undertake the necessary development work, and Lund recommended before the end of January that such agreements be made up to June 30, 1944, where necessary* 114/ He was thinking primarily of Bralome Mines in Canada, and a month later the Division proposed the previously mentioned contract with this company, which was to run until the end of 1944* 115/ After the policy of the February 17 letter to Jones had been approved, the principle was extended still further and a contract running through 1945 was made with the New Idria-Alaska Quicksilver Company. 116/ With the precedent thus established, steps were taken to extend the life of the domestic purchasing plan through 1944, and the extension was formally announced by the Metals Reserve Company on March 30* At the same time, the distinction between "new* and "eligible” producers was abandoned, and the plan was made applicable to all "qualified” producers, defined as those whose output in April 1942 did not exceed 90 flasks* The stipulated price continued to be $192, but the Metals Reserve Company might at any time after December 31, 1943, ”give notice of its intention to terminate this program 30 days from the date of the giving of such notice,” the terms of settlement being explicitly stated* 117/ On McEwen's recommendation the stockpile objective, which stood at 85,000 flasks, was fixed at that level, and it was agreed that this figure would not be influenced by new contracts or renewal of old ones* 118/ Of this amount, 33,929 flasks were on hand as of March 15, 1943, not counting 15,000 flasks in England. Estimated consumption for the years 1943 and 1944 was 180,000 flasks, including 47,000 for Russia; and domestic production was forecast at 88,000 flasks for the same two years* Contracts for 39,000 flasks from foreign sources were outstanding, leaving 53,000 flasks still to be provided for before the end of 1944* 119/ Administrative Changes*—As the mercury program, and the whole problem of mineral production and control under wartime conditions, grew in magnitude and complexity, various administrative changes 114/ Memorandum* Lund to W. Y. Elliott* January 20* 1943. 115/ Memorandum, R. D. Parks to W. Y. Elliott, February 19, 1943» See p. 26 above* 116/ Memorandum, R. J* Lund to W. Y. Elliott, March 4, 1943; letter, Elliott to Jesse Jones, March 17, 1943* 117/ RFC Press Release 1779, March 30, 1943; Metals Reserve Company Circular, "Information Concerning Purchase of Domestic Mercury,” May 11, 1943* See also R. J* Lund, Memorandum for the Files, March 13, 1943; and excerpts from R. J* McEwen's "Mercury Section Log," March 25 and 27, 1943. 118/ Memorandum, R. J* McEwen to W. Y* Elliott, January 13, 1943* 119/ Memorandum, R. J. Lund to E. W. Reid, March 16, 1943* 23“6»0 P44 bu - 37 - became necessary» Robert J. McEwen became Chief of a newly defined Mercury Unit on October 1, 1942, and on the 5th a Mercury Producer’s Industry Advisory Committee held its first meeting. The Industry Advisory Committee was appointed in accordance with a policy that went back to OPM days. 120/ It was not until the critical supply situation developed in the late summer and fall of 1942, however, that the need for such a committee in the case of mercury was felt. Lund served as presiding officer, with McEwen and Johnson representing the Mercury Unit. The committee members, representing the industry, were Worthen Bradley, Bradley Mining Company, San Francisco; H. W. Gould, New Idria Quicksilver Company, San Francisco; A. E. Humphreys, Humphreys Gold Corporation, Denver; F. E. Newbold, New Almaden Corporation, Philadelphia; H. W. Tudor, Sonoma Quicksilver Company, San Francisco; and S. H. Williston, Horse Heaven Mines, Portland, Oregon. 121/ Thereafter all major policy questions were taken up with the Industry Advisory Committee. Early in November, a general reorganization in WPB following the appointment of Ferdinand Eberstadt as Program Vice Chairman elevated the metals and minerals branches to the status of Divisions. At the same time, the Miscellaneous Minerals Division was grouped with the Zinc, Tin-Lead, Mica-Graphite, and Mining Divisions to form the Minerals Bureau, of which J. M. Scribner became Director. 122/ In January, the Mercury Unit became a Section. After a considerable period of discussion and negotiation, a Mineral Resources Coordinating Division was created late in January 1943 in an effort to reconcile the differences between WPB and the Department of the Interior. The Coordinating Division, was to be responsible for *coordinating plans, programs and procedures within the War Production Board and with other governmental agencies for increasing the supply of essential minerals and metals for war production. n 123/ Its Director was Howard I. Young, President of the American Zinc, Lead and Smelting Company of St. Louis, and also President both of the American Zinc Institute and of the American Mining Congress. The Division operated through two committees, of each of which Young was Chairman. These were the Metals and Minerals Advisory Committee, representing the War and Navy Departments, Board of Economic Warfare, Bureau of Mines, Geological Survey, Reconstruction Finance Corporation, Bureau of Foreign and Domestic Commerce, and various divisions of the War Production Board; and the Mineral Resources Operating Committee representing the Interior Department, the Board of Economic Warfare, the RFC, and WPB’s Office of Production Research and Development. The Advisory Committee was concerned 120/ 1Office of Production Management, Regulation No. 7, June 24, 1941. 121/ Summary, Mercury Producers Industry Advisory Committee, October 5, 1942. 122/ WPB, General Administrative Order 2-65, November 11, 1942. 123/ Minutes, Metals and Minerals Advisory Committee, Meeting 1, February 12, 1943. 28“820 P45 bu - 38 - with increasing the production of metals and minerals; the Operating Committee with exploration and development work, with processes., and with facilities. 124/ Experts from the various metals and minerals divisions attended the meetings of both committees whenever their own particular programs were under discussion« Early in February 1943, Young also became Director of the Minerals Bureau« 125/ 124? WPB. Office of the Program Vice Chairman. Administrative Order No. 2, January 30, 1943. 125/ WPB Press Release 2445, February 3, 1943. sb-oso bu - 39 - IV. CURTATUiRNT OF THE MERCURY PROGRAM (May 1943 to March 1944) Easixy Mercury Situation.—The first hint that quicksilver requirements night be lowered in 1943 cane as early as November 1942, when the Army indicated that its Lewisite gas program night be cut by as much as 50 or 60 percent. 126/ No official notification to that effect was received, however, and until it was, provision for the full amount had to be made« Lend-Lease requirements were more definitely stated, and early in May 1943, the Mercury Section was advised through official channels that the Soviet Union would need only 2,632 flasks for the calendar year« 127/ Although earlier efforts had been made to ascertain Russian requirements for 1943, no progress in that direction had been made, and in the absence of information to the contrary it had been assumed that Russian demands would be as high as those of 1942« The greatly lowered figure given in May reflected the triumphant conclusion of the Battle of Stalingrad in February and the rapid reconquest of the Donets Basin by the Red Army. On the supply side, imports from Canada and Mexico continued to be substantial, and domestic production, "despite severe handicaps, particularly in the labor field," was being maintained at a high level« The easing position of the metal was reflected in the Mineral Classification List for July, on which mercury mines were dropped from Class II to Class IH, permitting voluntary separation of employees to go to mines with higher classifications. When the mercury situation was reviewed in July, domestic output for 1943 was estimated at a minimum of 50,000 flasks, with imports put at 42,000« The sharply lowered Russian demand brought total officially known requirements down to 70,000 flasks, indieatiiy a* surplus of 22,000 flasks for the year, even with no cutback in the chemical warfare program« It was believed that Western Hemisphere production might also show as much as 22,000 flasks surplus, over the earlier production estimates, which would bring government stocks to over 70,000 flasks by the end of the year, exclusive of stocks of Spanish origin held outside the United States. It was therefore recommended that total foreign purchases be held to 65,000 flasks, or 20,000 less than the March 16 recommendation« 128/ 12^/ Memorandum, 1st Lt. Russell G. Wayland, Materials Branch, Resources Division, War Department, to Major Joseph P. Woodlock, November 3» 1942« (Attached to minutes, Interdepartmental Group on Mineral Production, November 4, 1942). 127/ Memorandum, F. C. Johnson to R. J. Lund, May 13, 1943 (Operating Report); Combined Raw Materials Board, "Mercury," Staff Report No« 2, May 10, 1943. (CRMB Document Nb. 162)« 128/ Memorandum, R« J. Lund to W. 1« Elliott, July 14, 1943« Compare memorandum, Lund to E. W. Reid, March 16, 1943, cited on p« 36 above« 98-880 ou - 40 - Preparatory to re-appraising the whole mercury program in the light of the rapidly changing war situation, Lund recommended on August 2 "that new commitments for foreign purchase of mercury in line with our recommendation of July 14, 1943, be deferred for a period of 90 days from August 1." 129/ With the campaign in Sicily drawing to a triumphant close, it appeared that the rich Italian mercury mines might soon fall into Allied hands, and in the light of this possibility, long-term commitments were avoided« The Minerals and Metals Advisory Committee took up the mercury question on August 17« A detailed report on the supply-requirements outlook, prepared by McEwen, was presented by Lund, and broad problems of policy were discussed by the Committee, but without any decision being reached« The major questions raised were as to how far importation should be carried in view of the near self-sufficiency achieved; what degree of support should be given in the future to domestic operators; what should be the ultimate stockpile objective; and to what extent conservation should be carried« 130/ The Curtailment Program«—Meantime, consideration was given to liberalizing Conservation Order M-78. A memorandum indicating the changes proposed was submitted to the Orders and Regulations Bureau on July 21, 131/ and a draft of the revised order was circulated. Various criticisms of the proposed amendment to the _ Conservation Order were received, and a revised draft was ready for circulation on August. 19« Only the carroting of hat fur, fireworks, and turf fungicides remained on the prohibited list« Mercury used for other previously prohibited purposes was restricted to from 80 to 100 percent of use during the base period; and the restrictions were eased on other items« The preference rating given to excepted orders was raised from A-l-j to AA-5, a provision that merely reflected the general up-grading of preference ratings« The amendment was approved by the Order Clearance Committee on September 4, and was issued September 9« 132/ While the amended conservation order was being reviewed by the interested agencies and WPB divisions, McEwen worked out his own answers to the questions posed in his report to the Minerals and Metals Advisory Committee« He wanted production continued at 129/ Memorandum, R. J. Lund to W. Y. Elliott, August 2, 1943; letter, Elliott to Morris S« Rosenthal, Office of Economic Warfare, August 3, 1943. 130/ Memorandum, R. J« Lund to Howard 1« Young, August 13, 1943 (Minerals and Metals Advisory Committee Document 013); verbatim transcript, Minerals and Metals Advisory Committee, Meeting 09, August 17, 1943. 131/ Memorandum, R. J« Lund to Hugh Jackson, July 21, 1943. Also memorandum, McEwen to Lund, June 23, 1943 (Operating Report)« 132/ Conservation Order M-78 as Amended September 9, 1943; Minutes, Order Clearance Committee, Meeting 471, September 4, 1943. 23-830 ?48 - 41 - peak capacity until satisfactory stocks had been accumulated, then tapered off to bring supply into balance with requirements, so the industry would not face a sudden shut-down; and he opposed any cut in the ceiling price, which he believed would dangerously reduce production and make resumption very1 difficult should the metal again be needed. His program was outlined as follows: •1. Baise the stockpile objective to 100,000 flasks. (This is amply justified because of the limited and uncertain nature of the ore reserves.) w2. Carry through a moderate curtailment of domestic production: a) By the partial withdrawal of labor assistance to operating mines. b) By the elimination of Government financing of new projects; by refusing priority assistance for new projects. c) The U. S. Geological Survey and the U. S. Bureau of Mines to continue on with their existing programs, as ample justification has been presented for the carrying on of this work. *3. Moderate the foreign purchasing program: a) By increasing the Office of Economic Warfare purchase recommendation (late in this year or early in 1944) to permit larger imports during 1944 than presently authorized. b) By prohibiting imports by private concerns through 1943 and 1944 under M-63. (This is a continuation of present policy.) c) By starting on January 1, 1944» to purchase foreign metal on the basis of spot purchases or short-term contracts only. d) By reducing the foreign purchasing price by the amount of the existing 119.00 per flask tariff. *It is further the judgment of the Section that domestic production in 1944 should, without jeopardizing the supply position, be maintained at about 80% of ss~eao P49 bu - 42 - the 1943 output or at an annual rate of 40,000 flasks, and further, that imports also should be maintained at approximately 80% of total imports." 133/ On August 27, Lund forwarded McEwen's memorandum, with his own concurrence, to the Mineral Resources Operating Committee, and the plan was discussed at the Committee's meeting on September 3» It was received with skepticism by the members representing the Metals Reserve Company and the Office of Economic Warfare, who thought their own agencies should be consulted in the formulation of any curtailment program* H. DeWitt Smith, Vice President of the Metals Reserve Company, frankly stated his attitude, that "the men in charge of the division • • • are not particularly commercially minded, which after all, is quite a consideration here, and I think they should take advantage of the other agencies in at least getting their views before they set up these recommendations*'* 134/ Action was postponed until another meeting, and in the interim McEwen and Lund had a session with representatives of the Office of Economic Warfare, the Metals Reserve Company, and the State Department. Agreement was reached on four specific points: "(1) Raise the stockpile objective to 100,000 flasks* "(2) Curtail domestic production to some 70-80 percent of the 1943 output, or to approximately 35,000 flasks* "(3) Curtail total imports into the United States in 1944, including Government and private, to approximately 70 -80 percent of the 1943 level, or to a maximum of 35,000 flasks* ■(4) Increase the total recommended amount of mercury to be purchased and imported by the Government in 1943 and 1944 to a maximum of 80,000 flasks. This figure of total Government purchases during the two years should be reduced by the amount of imports brought in privately during the two years*" 135/ ’ It was also agreed that the OEW would cancel existing contracts with the Consolidated Mining and Smelting Company of Canada; that WPB would permit entry of all foreign mercury for domestic consumption 133/ Memorandum, R* J* McEwen to R* J* Lund, August 23, 1943« 134/ Verbatim transcript, Mineral Resources Operating Committee, Meeting 06, September 3, 1943, P* 23. Also memorandum, R. J. Lund to Howard I. Young, August 27, 1943 (MROC Document 023)« 133/ Memorandum, R. J* Lund to Howard I* Young, September 9, 1943 (Mineral Resources Operating Committee Document 024)« 23-820 P80 -43- under General Imports Order M-63; that priority assistance to new projects would be declined, and Government financing refused as far as possible ; that domestic mines would be given "only sufficient manpower assistance to maintain the operation of highly productive properties"; and that the Geological Survey and Bureau of Mines would continue their existing programs. No attempt was to be made to hold prices to existing levels. However, should a more positive Incentive become necessary to maintain production, the Metals Reserve Company might "negotiate contracts with existing highly productive domestic mines at price levels which will permit their continued operation. * In placing this program before the Operating Committee, Lund expressed his personal endorsement of it, and his hope that the Committee would "see fit to adopt it as presented." It was discussed at length by the Operating Committee on September 9, and again action was deferred, but there was general agreement on the principles involved. 136/ The curtailment program was the principal topic of discussion at a meeting of the Mercury Producers Industry Advisory Committee on October 1. The industry representatives expressed their willingness to cooperate, and their general acceptance of the program, but "urged that careful consideration be given to decreasing Imports so that domestic producers will not have to close." Howard I. Young, who attended the meeting on behalf of the Mineral Resources Coordinating Division, pointed out that foreign producers had been encouraged at a time when the metal was badly needed, and that it would be unfair to them to cut off all imports now. It was emphasized that any drop in price would effect foreign production as well as that from domestic mines. The members of the committee insisted that a ♦15 or $20 price cut would "force some 200 of the smaller mines out of business," as well as "about 12 of the top 19 producers." It was the general opinion of the industry that a 30 percent reduction in domestic output would be brought about in any event simply because of the existing labor shortage. 137/ It was October 5 before thé Mineral Resources Operating Committee again considered the mercury program. Before that date the 136/ Verbatim Transcript. Mineral Resources Operating Committee. Meeting 07, September 9, 1943, pp. 1-17. 137/ Summary, Mercury Producers Industry Advisory Committee, October 1, 1943» Also R. J. Lund, in an interview with the writer, May 12, 1944« Three members had been added to the Industry Committee since its first meeting. These were B.C.Austin of B.C.Austin and Company, San Francisco; W.W.Kelley of the Texas Mercury Company, Study Butte, Texas; and L. K. Requa of the Polarstar Quicksilver Mine, Salt Lake City. 83—080 PSI bn - 44 - whole question was once more thrashed out with the Office of Economic Warfare and the WPB Stockpiling Division« 138/ The issue revolved around importation versus domestic production« The Pinchi Lake mine of the Consolidated Smelting and Refining Company in Canada had developed into the largest producing mine in the Western Hemisphere, and its operating cost was very low« On a competitive market mercury from this mine could undoubtedly be sold at prices below those necessary for much of thé United States output, even with the existing tariff of $19 a flask; and some of the larger Mexican operations were also in a position to undersell domestic metal« On the other hand, the New Idria Quicksilver Company, with its newly opened California workings and its Alaskan property, was able to produce substantial quantities of mercury at reasonably low cost« It was necessary to be fair, both to domestic producers and to those elsewhere in the Hemisphere whose operations had been stimulated by United States buying« Even before full agreement was reached, McEwen recommended the cancellation of existing Metals Reserve Company contracts with ’•qualified” producers at the earliest permissible date. 139/ The curtailment plan ultimately agreed upon took both domestic and foreign commitments into account, and met with the unanimous approval of the Mineral Resources Operating Committee« In its final form, the program provided that: ”1. The War Production Board will not change its existing recommendation to the Office of Economic Warfare for 65,000 flasks, foreign government purchases, over the two calendar years, 1943 and 1944* ”2. The Office of Economic Warfare will endeavor to curtail its procurement program and assistance to foreign producers in an attempt to maintain total imports, both private and Government for 1944, at a rate not greater than 70 percent of the total 1943 imports« *3« The War Production Board will use every necessary means at its disposal to maintain the rate of domestic mercury production for 1944 at a rate no greater than 70 percent of the 1943 domestic production« This objective to be achieved by: a) Freely permitting imports from Canada at the start, and from any other countries that the Office 138/ Verbatim Transcript. Mineral Resources Operating Committee, Meeting 011, October 5, 1943, p« 1; summary, Mercury Producers Industry Advisory Committee, October 1, 1943« 139/ Memorandum, R. J. McEwen to R. J« Lund, September 30, 1943. 33”630 bu - 45 - of Economic Warfare may designate. In effectuât!^ such import control program, the War Production Board will collaborate closely with the Office of Economic Warfare insofar as general operating policies under M-63 will permit. If imports enter in such a quantity as to disrupt the curtailment ratios set forth above, or to seriously threaten existence of at least a very substantial segment of domestic production, consideration will have to be given to the use of import quotas or to other means of correcting the situation. b) Minimum assistance to the domestic mining industry on manpower problems. c) Withdrawing priority assistance for new projects; completely eliminating War Production Board recommendations for the Government financing of any new projects. d) Advising Metals Reserve Company that the continuation of their existing mercury purchase contracts, both foreign and domestic, is no longer necessary for the war effort, and recommending that they initiate whatever action that can properly be taken to curtail and confine their domestic purchase program. •4 » The Bureau of Mines and the U. S. Geological Survey to continue existing projects, and to work on the long range aspects of mercury reserves." 14°/ Withdrawal of Subsidies.—The mercury curtailment program was sent to Operations Vice Chairman Hiland G. Batcheller the day after its approval by the Operating Committee, 141/ and a few days later Batcheller called to the attention of the Metals Reserve Company the implications of the program with respect to the domestic purchasing plan: "Since the date of the original War Production Board recommendation and subsequent verbal agreements made as recently as late March 1943, the mercury situation has definitely eased, and the maximum production of domestic mines is no longer considered essential to the war effort. Under the circumstances, the War Production Board wishes to point out that the continuation of existing Metals Reserve Company mercury contracts, both foreign and domestic, is no longer necessary to the war effort. 140/ Verbatim transcript. Mineral Resources Operating Committee, Meeting Oil, October 5, 1943, pp. 2-3. 141/ Memorandum, Howard I. Young to Hiland G. Batcheller, October 6, 1943* 33-820 PS3 bu - 46 - "Further, the War Production Board recommends that the Metals Reserve Company initiate whatever action that can properly be taken to curtail and confine this domestic purchase program." 142/ Secretary of Commerce Jesse Jones replied to Batcheller*s letter on October 18, advising that WPB's recommendation would be carried out as promptly as possible; 143/ and a month later the Metals Reserve Company submitted for Lund's approval a draft of a circular announcing that no applications under the domestic purchase program would be received after December 31. The circular was issued with WPB concurrence on December 8« 144/ It was clear that with a curtailment program being instituted, the price level could no longer be maintained, and McEwen and Lund proposed to let a falling market serve as the instrument for cutting back production just as the high price levels of 1940 and 1941 bad been the means of expanding output. On December 1, Lund notified the Office of Price Administration that the emergency which had prompted his objections to a lowering of the price ceiling in • November 1942 no longer existed; 145/ and a few days later McEwen outlined a new mercury policy, which included both price reduction and renegotiation of outstanding contracts. "Personally," he wrote in a memorandum to Lund, "I do not anticipate sharp price-cutting practices from Canadian sources, but I do fear a panic market brought about by any sudden termination of Government buying in Mexico. I believe we should strive to achieve an orderly price recession, avoid the complete collapse of the market, and in the interest of guarding against every possible contingency, maintain at least a segment of domestic production in continuous operation. "Because Metals Reserve Company's buying program is supporting to a certain extent the market price, but more particularly because the Foreign Economic Administration's buying policies are absorbing at near ceiling prices the greater part of the foreign output, I wish to warn that the uncontrolled 142/ Letter. H. G. Batcheller to Jesse Jones, October 11, 1943* 143/ Letter, Jesse Jones to H. G. Batcheller, October 18, 1943* Letters, G. Temple Bridgman to R. J. Lund, November 23, 1943; Lund to Bridgman, December 7, 1943» Also Metals Reserve Company, "Supplement to Circular Setting Forth Information Concerning Purchase of Domestic Mercury Dated May 11, 1943,** December 8, 1943« 145/ Letter, R. J. Lund to Carl L. Anderson, Nonferrous Metals Branch, OPA, December 1, 1943* 83-880 bu - 47 - continuance and then sudden termination of these practices will have seriously felt effects. "In consequence, I recommend that the following steps be taken: "1. That the Metals Reserve Company be requested to cancel and ’bail out* as of January 1 all contracts with ’qualified* producers. •2. That the Metals Reserve Company and the Foreign Economic Administration be requested to review the existing contracts with the New-Idria-Alaska, Humphreys, and Bralorne mines. That these contracts be carefully examined and, if possible, renegotiated on a compromise basis that will provide a minimum of production from these sources. *3« That the Office of Price Administration be advised of all information available in this office in connection with the mercury producing industry, and the suggestion made that the price be sharply reduced to around #140 per flask." Another factor behind McEwen*s proposal was that despite the October agreement to reduce output by 30 percent, October and November had been peak production months. The •‘automatic" drop which the Industry Advisory Committee had confidently predicted as a result of manpower shortages had failed to materialize. 146/ The program was expected to result in gradual decline of both Mexican and domestic production, and to minimize the danger of a market collapse when Government buying finally came to an end. 147/ Consideration was also given to the complete revocation of the mercury conservation order. 148/ In anticipation of the'withdrawal of subsidies to domestic producers the Raw Materials Branch of the Office of Manpower Require* ments secured from McEwen a list of mines likely to close down if the price dropped to #150. Tables were prepared showing the number of workers at these mines, with their wage rates and union affiliation, and these .tables were transmitted to the appropriate offices Of the Waited States Employment Service for recruiting purposes, 146/Summary.Mercury Produoeire Industry ^ Committee. January 29, 1944» 147/ Memorandum, R. J. McEwen to R. J. Lund, December 7, 1943. 148/ Memorandum, McEwen to Lund, November 26, 1943 (Operating Report). - 48 - should the mines discontinue operations« Lists of copper and other strategic metal mines in the same areas that were short of workers were also given to the USES. 149/ The Metals Reserve Company took prompt steps to renegotiate the New Idria-Alaska contract, reducing the price paid from $186 to $161 per flask j and arrangements were made to pay for Mexican mercury no more than the United States market price less the tariff of $19 a flask« 150/ Only the termination of the domestic purchasing plan remained to be carried out« On December 20, after conferring with OP A and Metals Reserve Company officials, McEwen renewed his recommendation to that effect, 151/ and Young transmitted the recommendation to Executive Vice Chairman Charles E« Wilson the following day, together with a letter to the Secretary of Commerce, prepared by Lund for Wilsons signature. 152/ The letter was forwarded to Jones on December 21, and on the last day of the month all “qualified" producers were given 30 days notice of termination as provided in their contracts« ^53/ On January 31, 1944, the domestic purchasing plan ceased to exist« The End of Controls«—In January a meeting was held with-Carl L. Anderson of OPA’s Nonferrous Metals Branch and Howard 1« Young to consider lowering the ceiling price« OPA declined to take any action, however, because of the provision in the Emergency Price Control Act of 1942 which fixed the two-week period of October 1-15, 1941, as the base for determining ceiling prices« Such a reduction would have been largely meaningless in any event« The market had begun to soften in December, and broke sharply early in the new year« Ry January 17 the New York price was down to $160, and before the end of the month mercury was being quoted at $130 -$135, where it levelled off« 154/ It would have gone lower still had not WPB requested that a sizable surplus in the hands of the Army Air Forces be kept from the market« Domestic production during 1943 was approximately 53,000 flasks, and another 47,000 flasks were imported, giving a total new 149/ Memorandum, Lloyd H. Bailer to Allen Buchanan, no date« Allen Buchanan, in an interview with the writer, May 24, 1944* 150/ Letter, H. DeWitt Smith to Howard I. Young, December 18, 1943; memorandum, McEwen to Lund, December 23, 1943 . (Operating Report). 151/ Memorandum, McEwen to Lund, December 20, 1943» 152/ Memorandum, H. I. Young to C. E. Wilson, December 21, 1943; letter, Wilson to Jesse Jones, December 21, 1943« 153/ Letter, Metals Reserve Company to all "qualified" producers, December 31, 1943« 154/ Memorandum, R. J. Lund to Hugh W. Jackson, January 19, 1944« 88*620 *66 - 49 - supply of 100,000 flasks« Against this figure, domestic consumption, largely because the Army's Lewisite gas program failed to materialize, was only 53,500 flasks, and exports amounted to only 8,300« Government stocks at the end of the year approached 85,000 flasks« 155/ With the supply-requirements position so favorable no further justification for conservation remained, and a revocation of Conservation Order M-78 was circulated on January 19« No objections were interposed, and the revocation was unanimously approved by the Order Clearance Committee 10 days later« 156/ It was issued on February 2« A meeting of the Industry Advisory Committee had meanwhile been held on January 29« The producers were alarmed over the falling market, the more so because it meant that Mexican and other foreign mercury was being purchased by the Government at prices above those being paid for domestic metal« After various conferences the Foreign Economic Administration and the State Department agreed to attempt setting a price for Mexican mercury at the New York market less tariff and freight from Laredo, but the inevitable lag entailed by this procedure meant that as long as the market was falling the domestic price would continue to be lower than the Mexican price« At the $130 price then prevailing the producers estimated that domestic output would be only 33,000 flasks for the year, with another 19,000 flasks from other Western-Hemisphere sources« 157/ The possibility remained that, should requirements unexpectedly increase, the Government might once more have to stimulate mercury production, but for the time being, at least, the stringency was over« Within a period of three-and-a.-hBlf years mercury had completed the cycle from relative abundance to scarcity and back again to abundance« Subsidies, price control, and conservation had been imposed and withdrawn« During this period requirements tripled over pre-war levels, but domestic production increased almost as much, largely as a result of price stimulation which also multiplied three-fold« "Mercury is an outstanding example of greatly expanded production resulting from price stimulation • • •" 158/ 155/ Memorandum, R. J« Lund to Hugh W. Jackson, January 19, 1944* 156/ Minutes, Order Clearance Committee, January 29, 1944• 157/ Summary, Mercury Producers Industry Advisory Committee, January 27, 1944; R« J. Lund, in an interview with the writer, May 12, 1944» 158/ Memorandum, R« J. Lund to C. K« Leith, January 3, 1944. 23-820 *’57 bu - 50 - APPENDIX A Chronology 1939 August Domestic mercury production at rate of 1,500 flasks per month; price $84 per flask« September Price bid up to $165 following outbreak of war in Europe. December 9 Army and Navy Munitions Board issues report on mercury recommending 18,000 flask stockpile for two-year emergency« May^29 Advisory Commission to the Council of National Defense created by the President* E. R. Stettinius, Jr«, in charge of raw materials« June 3 C. K, Leith becomes Consultant on Minerals to NDAC. June 19 Mercury program outlined at meeting of representa- tives of industry and Government« Stockpile objective set at 10,000 flasks« June Price of mercury reaches peak of more than $200 a flask. July 1 Army and Navy Munitions Board recommends purchase of mercury stockpile to Procurement Division of the Treasury. July 2 Mercury placed under export control« August 1 Richard J. Lund joins NDAC staff as assistant executive for mineral raw materials. September 1 August production: 3,500 flasks« September 14 Contract for 5,000 flasks at $149«50 made by Procurement Division. Market price $177«25, but softening rapidly. October 8 Mercury producers exempted fYom excess profits tax« October 18 Stockpiling program for strategic minerals and metals approved by NDAC« Mercury stockpile recommendation, 10,000 flasks« 23-B30 P#B - 51 - October 23 Leith reports reserves good for 2^5 years at existing rate of production* November 13 ANMB lowers its mercury stockpile estimate to 109000 flasks. December 18 Recommendation that remainder of stockpile be purchased from Mexico. Domestic stocks depleted by heavy British buying. January 7 Office of Production Management created. Stettinius Director of Priorities. January 13 United States Embassy in Mexico City invites Meri can producers to offer mercury to Procurement Division of Treasury. Announcement interpreted as economic move against Japanese, who were buying most of Mexican output at around #210. Prices start risix^ again and Treasury withdraws from market. February Domestic production dropped to 2,900 flasks ffom peak of 3,700 in December. Consumption 4,700 flasks due to large Navy order. Marph 1 Reserves in ground estimated at 92,000 flasks, or 3 years’ output at 1940 rate. March Plan advanced by Elmor Davies and Claude Moll to secure Mexican output. OPM unwilling to recommend RFC financing. March 28 Leon Henderson asks price ceiling for mercury. Market up to $180. April 14 Office of Price Administration and Civilian Supply holds conference on price problem, but agrees not to establish ceiling until Mexican deal is made. May 14 OPM recommends purchase of entire Mexican output for two years, but not to exceed 30,000 flasks. .Mexican purchase to go to stockpile, bringing authorized total, inoludihg metal under contract, to 35,000 flasks. May 20 OPACS proposes $125 price ceiling, and OPM objects that production cannot be maintained at this figure. Question again deferred pending outcome of Marl can negotiations. 88-080 F0« bu - 52 - June 19 Lund estimates 3-year requirements at 122,000 flasks; production at approximately 100,000. Juns 24 Miscellaneous Minerals Branch set up with Lund as Chief. July 1 Agreement reached with Mexico along lines proposed in May. August 28 OPM reorganisation brings Miscellaneous Minerals Branch into Materials Division, headed by William L. Batt. Supply Priorities and Allocations Board and OPA created. September 5 Lund reports on mercury program. Supply-requirements figures substantially unchanged from June. Market price up to $190. September 20 Exemption of mercury producers from excess profits tax revoked by Congress. October Substantial deliveries begun under Mexican agreement November 14 National Academy of Sciences reports on substitutions for mercury. December 8 United States enters war. December 28 General Imports Order M-63 provides that mercury and various other materials can be imported only by the Metals Reserve Company or other Government agency. January Proven ore reserves estimated at no more than 90 days* supply. January 16 War Production Board created. January 23 Civilian use of mercury restricted and inventories limited by Conservation Order M-78. February 3 Price ceiling established at $191 for Western producers and $193 for producers in Texas and Arkansas. February 5 Unlimited purchases from Mexico recommended. 66-690 POO bu - 53 - February 27 WPB reconmends Government purchase fros domestic operators up to 5,000 flasks, and from Canadian producers up to 10,000 flasks, bringing total reconmended Government purchases to 50,000 flasks. March 11 Robert J. McEwen joins Miscellaneous Minerals Branch as Mercury Specialist. March 24 List of properties recommended for exploration turned over to Geological Survey. April Mexican production at rate of 36,000 flasks a year. Canadian output also rising. April 11 Domestic purchasing plan reconmended to encourage development of new ore bodies. April 25 Donestic purchasing plan announced by RFC. May 23 Requirements estimated at 60,000 flasks for 1942, 100,000 for 1943. Purchase of 35,000 flasks from Spain reconmended, bringing stockpile total to 85,000 flasks. June Mercury nines short 400 men. Production ceases to rise. June 19 New donestic purchasing plan reconmended. July Production begins to decline. July Russia asks for 8,700 flasks under Lend-Lease for immediate delivery. July 3 New Idria nine threatened by brush fire. July 9 New domestic purchasing plan announced by Metals Reserve Company, to run until December 31, 1943. August Conferences held on labor problem. Shortage put at 25 percent. August 5 Conservation Order M-7S amended to tighten control. September 7 Western States declared a labor shortage area by War Manpower Commission. Miners frozen in their jobs, September 19 Geological Survey asked to recommend projects for exploration. S3-eso >•» *" -5k- October Mercury on "critical labor shortage" list» October Russia asks for another 14,736 flasks for delivery before the end of the year» October 1 McEwen becomes Chief of the Mercury Unit» October 5 First meeting of Mercury Producers Industry Advisory Committee» October 15 Bureau of Mines asked to undertake exploration work on projects recommended by Geological Survey and WPB7 October 21 Exemption of mercury producers from excess profits tax restored» October 28 RFC and Metals Reserve Company asked to cooperate in exploration program» November 11 Miscellaneous Minerals Branch becomes a Division» November 13 WPB vigorously opposes any reduction in price’ceiling. November 20 Increased Canadian purchases recommended» January 18 Mercury Unit becomes a Section» January 30 Mineral Resources Coordinating Division created, with subsidiary Advisory and Operating Committees» February 17 WPB urges necessity for developing new ore bodies. March 30 Domestic purchasing plan extended to December 31, 1944, subject to cancellation and settlement on 30 days* notice after December 31, 1943» May 10 Russian requirements cut to 2,632 flasks for 1943. July 1 Mercury dropped from Class II to Class III on Mineral Classification List» July 14 Supply-requirements estimates indicate a surplus for 1943. August 23 Curtailment program proposed by McEwen» September 9 Conservation Order M-78 liberalized» October 5 Curtailment program agreed upon» Imports and domestic production to be cut back 30 percent» SS-6&0 P«» bu - 55 - Deceaber 1 OPA informed that no further objection to lowered ceiling exists« Prices softening* December 8 Metals Reserve Company announced no further applications under doaestic purchasing plan will be received after December 31. December 31 Doaestic purchasing plan cancelled as of January 31. 1944. January 1 Government stockpile 85,000 flasks. Supply and requirements in balance. January 17 Hew York price down to $160. January 26 Hew York price statflized at $130 - $135. February 2 Conservation Order M-78 revoked. si-eso >•» - 56- APPENDIX B Annual Average Mercury Prices at New York. 1910- 1943. with High and Low Monthly Averages. (per flask of 76 pounds) Year Average High Low 1910 $ 47.06 $ 52.20 1 42.00 1911 46.54 52.00 42.00 1912 42.46 45.50 40.50 1913 39.54 40.00 38.56 1914 48.31 83.00 36.75 1915 87.01 135.00 51.60 1916 125.49 283.50 73.00 1917 106.30 120.90 81.04 1918 123.47 127.80 117.70 1919 92.15 107.08 71.56 1920 81.12 102.19 49.58 1921 45.46 49.55 39.80 1922 58.95 72.56 48.29- 1923 66.50 72.73 60.00 1924 70.51 77.59 60.66 1925 83.53 90.14 79.H 1926 92.16 100.05 88.08 1927 118.51 127.95 101.20 1928 124.32 129.40 122.07 1929 122.94 125.00 120.50 1930 116.97 123.99 106.64 1931 91.91 105.00 68.77 1932 58.30 72.55 46.40 1933 59.48 68.75 48.50 1934 74.25 75.86 68.75 1935 72.17 75.19 69.32 1936 81.81 94.00 74.03 1937 92.21 98.00 82.83 1938 77.11 82.00 71.77 1939 107.09 151.07 78.05 1940 179.54 199.56 161.32 1941 186.78 202.43 166.23 1942 198.32 208.86 196.25 1943 195.21 196.00 190.08 Source: Metal Statistics, various annual editions; 1943 figures from Bureau of Mines, Monthly Mercury Report No. 53. 2 8**0 20 tou - 57 - APPENDIX C Production. Imports. Exports, and Apparent New Supply of Mercury in the United States. 1910-1943 (In flasks of 76 pounds) Apparent New Supply Year Production Imports Exports 1910 20,330 9 1,898 18,441 1911 20,976 6,209 287 26,898 1912 24,734 1,088 306 25,516 1913 19,947 2,259 1,125 21,081 19U 16,330 8,090 1,427 22,993 1915 20,756 5,551 3,328 22,979 1916 29,538 5,585 8,763 26,360 1917 35,683 5,138 10,636 30,185 1918 32,450 6,631 3,057 36,024 1919 21,133 10,495 8,987 22,641 1920 13,216 13,982 1,533 25,665 1921 6,256 10,462 388 16,330 1922 6,291 16,697 287 22,701 1923 7,833 17,836 314 25,355 1924 9,952 12,996 205 22,743 1925 9,053 20,580 201 29,432 1926 7,541 25,634 114 33,061 1927 11,128 19,941 1/ 30,900 2/ 1928 17,870 14,562 u 32,300 2/ 1929 23,682 14,917 1/ 38,500 y 1930 21,553 3,725 1/ 25,200 2/ 1931 24,947 549 20,512 1932 12,622 3,886 214 1/ 16,294 1933 9,669 20,315 29,700 2/ 1934 15,445 10,192 U 25,400 2/ 1935 17,518 7,815 U 25,200 y 1936 16,569 18,088 263 34,400 y 1937 16,508 18,917 454 35,000 1938 17,991 2,362 713 19,600 1939 18,633 3,499 1,208 20,900 1940 36,300 171 9,615 26,856 1941 44,000 7,740 2,590 49,150 1942 51,100 38,921 7,807 82^214 1943 53,300 47,837 15,236 86,515 J/ Not separately classified for 1927-30 and 1933-35. 2/ Estimated by Bureau of Mines. 2/ From a special compilation by customs statistics section. Bureau of Foreign and Domestic Commerce. Source: Minerals Yearbook» 1939 and 1940; figures for 1940-43 from Mercury Section, Miscellaneous Minerals Division, WPB. ascóso P8S>t>a>! - 58 - APPENDIX D Production* Imports* Exports* and Apparent New Supply of Mercury in the United States, 1940X944 (Tn flasks of 76 pounds) Apparent Tear £ reduction 1/ Exports New Supply 17 January 1,800 147 151 1,796 February 2,200 3 115 2,088 March 2,500 20 1,226 1,294 April 2,700 1 316 2,335 May 3,100 BB 2,277 823 June 3,000 OB 1,383 1,617 July 3,200 1,031 2,169 August ^,500 ob 633 2,867 September 3,600 «■» 799 2,801 October 3,600 * 757 2,843 November 3,400 «■» 361 3,039 December .1*200. * 3.134 Total 36,300 171 9,615 26,856 January 3,100 OB 455 2,645 February 2,900 348 2,552 March 3,500 79 223 3,356 April 3,500 25 218 3,307 May 3,600 • 104 3,496 June 4,000 •B 66 3,934 July 3,400 57 3,343 August 4,100 500 313 4,282 September 4,200 275 143 4,332 October 4,000 416 3,584 November 3,800 2,591 93 6,298 December 3-900 ¿»us Ui .8.Q2L. Total 44,000 7,740 2,590 49,150 "jj Figures do not include 3,820 flasks produced from imported ores and concentrates during 1940, 1941, 1942, and early 1943 (Continued on next page) aa-eao p«® bu - 59 - leat APPENDIX D (Continued) Production Imports V Exports Apparent New Supply 1/ January 3,700 2,201 72 5,829 February 3,400 2,331 37 5^694 March 4,100 3,724 23 7^801 April 4,200 2,100 16 6,284 May 4,800 3,400 33 8,167 June 4,900 4,107 14 8,993 July 4,700 2,941 21 7,620 August 4,500 1,791 15 6,276 September 4,200 3,694 18 7^876 October 4,100 3,510 3,106 4,504 November 4,100 2,748 4,414 2,434 December 4.400 6.374 38 10,736 Total 51,100 38,921 7,807 82,214 January 4,200 2,437 7,251 February 3,900 2,876 2,478 4,298 March 4,600 4,306 11 8,895 April 4,600 2,943 3,573 3,970 May 4,200 3,778 54 7,924 June 4,100 7,152 888 10,364 July 4,300 4,255 28 8,527 August 4,500 4,092 760 7,832 September 4,500 3,566 47 8,019 October 5,200 5,706 48 10,858 November 5,000 2,572 42 7^530 December 4*200 4.154 _iÄ. 8,298 Total 53,300 47,837 15,236 86,515 January 4,400 2,285 44 February 3.800 me * * Total 8,200 2,285 44 * 1/ Figures do not include 3,820 flasks produced Aron imported ores and concentrates during 1940, 1941, 1942, and early 1943. Source: Mercury Section, Miscellaneous Minerals Division, War Production Board.