[Lead and Zinc 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
LEAD AND ZINC 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. 8
23-598 Cover
CIVILIAN PRODUCTION ADMINISTRATION John D. Small, Administrator
Bureau of Demobilization G. Lyle Belsley, Director
LEAD AND ZINC 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 March 31,1944’
Re-issued March I, 1946
HISTORICAL REPORTS ON WAR ADMINISTRATION WAR PRODUCTION BOARD
SPECIAL STUDY No 8
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HISTORICAL REPORTS ON WAR ADMINISTRATION: WAR PRODUCTION BOARD
SPECIAL STUDIES SERIES
Number Title Issued Re-issued
1,2,3 Not available
4 Evolution of Premium Price Policy for Copper, Lead and Zinc: 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 Policies 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 Fann 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 Dedember 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
aa-eet tu
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 mobilization.
Special Study No. 8, Lead and Zinc Policies of the War Production Board and Predecessor Agencies: May'l^O to March l?Ub was originally issued on March jl, 19hU7~ under the same number and title, as a confidential report for use exclusively within the War Production Board. Ihe original report has been declassified and confidential company data have been deleted 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, 1?U$, or to take account of any additional documentation that may have become available since completion of the original draft.
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WAR PRODUCTION BOARD
WASHINGTON, D. C.
March 30, 1944
IN REPLY REFER TO
1EM0RANDÜM
TO: Mr. G. Lyle Belsley
Executive Secretary
FROM: James W. Fesler, Chief
Policy Analysis and Records Branch Office of the Executive Secretary
The attached report, Lead and Zinc Policies of the War Production Board and Predecessor Agencies, reviews the evolution of policies governing the supply and distribution of two important non-ferrous metals. Lead and zinc are made the subject of a single study because they are often produced from the same mines, the supply of one is often affected by the prices commanded by the other, the two metals are interchangeable in some uses, and to a considerable extent they are processed and marketed by the same companies« Although this report is complete in itself, it should be noted that certain price and production phases have been treated more extensively in Evolution of Premium Price Policy for Copper, Lead,and Zinc. Report No. 4 of this Branch«
A preliminary draft of this report was prepared on February 23, 1944, and circulated among officials who have actively participated in the formulation and implementation of lead and zinc policies. The comments and suggestions of these officials have been taken into account in the preparation of the study in its present form.
TABLE OF CONTENTS
Page
I. The Defense Program under NDAC (May - December 1940) 1
Impact of the European War 1
Attitude of the Industry 3
Defense Requirements 5
Export Control 8
Zinc Conservation 10
II* Expansion and Control under PPM (January-December 1941) 12
Expanding Requirements 12
Partial Allocation of Zinc 13
New Zinc Conservation Measures 16
Expansion of Facilities 18
Mandatory Priorities for Zinc 21
Priority Control of Lead 27
Efforts to Increase Production 32
Conservation and Limitation Orders 37
III* The War Program; Increasing Production (December 1941 - December 1942) 41
The Premium Price Plan 41
The Facilities Program 47
Labor Shortages 49
Increasing the Premium Payments 54
IV. The War Programs Controlling the Flow of Materials (December 1941 - May 1943) 58
Tightening Priority Controls 58
Further Curtailment of Zinc Uses 62
Easing of the Lead Situation 65
Changes in Control Orders 69
V. Balancing Supply and Requirements
(November 1942 - March 1944) 72
Coordination of the Minerals Program 72
Zino Program for 1943 75
The Manpower Problem 78
The End of Expansionism 82
Revised Requirements I 85
Reconsideration of Policy 89
Relaxation of Controls 95
Stockpiling Policy 97
Organizational Changes 101
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TABLE OF CONTENTS (Continued)
iSEgndixeg,
Chronology 104
B. Pre-War Lead and Zino Production 110
C» Composition of Lead and Zinc 111
D. Zinc Production, Emergency Pool Requirements
and Allocations 112
E. Zinc Division Projects 113
F. Supply and Requirements Estimates for Zinc 116
G. Statistical Summary of Lead 125
H. Statistical Summary of Zinc 130
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I. THE DEFENSE PROGRAM UNDER NDAC May-December 1940
Neither lead nor zinc was included on the first list of * critical minerals and metals drawn up by the Any and Navy Munitions Board under the Strategic Materials Act of 1939. Both metals, however, were classified as *e8sential,tt defined as materials for which no procurement problem in war was anticipated, but requiring constant surveillance and subject to reclassification in the light of future developments. 1/ The United States was the largest producer of lead and zinc, and possessed the greatest refining capacity, with Canada and Mexico also high on the list of producers.
Impact Qf the European War.—The outbreak of hostilities in Europe was immediately reflected in sharply rising metal prices in the United States. On the first of September, 1939, zinc was quoted at 4-3/4# a pound at East St. Louis, and lead at 5.05# at New York. Then Germany invaded Poland, and Britain and France went to war. Within a week lead had climbed to 5-1/4#, and zinc reached 6-1/2# before the end of the month. ¿/ Remembering the high prices of World War I, consumers began buying heavily, laying in supplies for months ahead; but the actual situation, so far as lead was concerned, was distinctly different. In sharp contrast to the first world conflict, the warring nations actually produced enough lead for their own needs. Mexican and South American production, moreover, had increased enormously since 1913, and with the European market virtually closed, these Western Hemisphere supplies simply piled up, or went to the United States. A runaway market in lead was prevented during the first weeks of the war by the prompt action of the larger United States producers, and before the end of 1939 the price began to level off. Jj The zinc price also dropped as the war moved into a winter stalemate, but a heavy potential demand from Britain and her allies remained, which the resources of the Americas were less adequate to meet.
Imports of both metals increased materially during the latter half of 1939, and continued to grow in volume through 1940. The tonnage brought in from foreign countries over a three-year period was as follows:
G. A. Roush, Strategic Mineral Supplies, p. £ See Appendix B for figures on world production and refining capacity.
2/ Metal Statistics. 1943.
E.R.Dondorf and Jean McCallum, *War*s Effect on Lead," paper, American Mining Congress, Colorado Springs, September 16-19, 1940.
V Metal Statistics, 1943.
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Year Lead Zinc
1938 63,901 26,199
1939 86,883 67,482
1940 282,492 191,004
The effect of these importations was to stabilize the market in some degree, but prices remained high enough to encourage some expansion of domestic output* Price fluctuations for the two metals in the St* Louis market are shown in the following table:
Lead and Zinc Price Fluctuations, July 1939 ~ December 1940 ¡J
Month and Year High St* Louis Open Market Prices
Lead Low Av. . High Zinc
Low Av. ..
1939 5.35 4.60' 4.90 6.50 4.50 5.12
July 4*80 4.70 4.70 4.60 4.50 4.52
August 4.90 4.80 4.89 4.75 4.60 4.72
September 5.35 4.90 5.30 6.50 4.75 6.15
October 5.35 5.35 5.35 6.50 6.50 6.50
November 5.35 5.35 5.35 6.50 6.50 6.50
December 5.35 5.35 5.35 6.50 5.75 6.01
1940 5.65 4.60 5.03 7.25 5.50 6.34
January 5.35 5.10 5.32 5.75 5.50 5.64
February 5.10 4.85 4.93 5.75 5.50 5.54-
March 5.10 4.90 5.04 5.75 5.75 5.75
April 4.95 4.85 4.92 5.75 5.75 5.75
May 4.95 4.85 4.87 6.00 5.75 5.81
June 4.85 4.85 4.85 6.25 6.00 6.24
July 4.85 4.85 4.85 6.25 6.25 6.25
August 4.85 4.60 4.70 6.50 6.25 6.40
September 4.85 4.75 4.78 7.25 6.50 6.94
October 5.35 4.85 5.16 7.25 7.25 7.25
November 5.65 5.35 5.58 7.25 7.25 7.25
December 5.35 5.35 5*35 7.25 7.25 7.25
The sharp rise in zinc prices in the middle of 1940 followed the German invasion of the Low Countries and the quick
5? Metal Statistics, 1943* Prices are quoted on Common Lead, 99*85 percent pure, and Prime Western Slab Zinc, 98*3 percent pure* The American Society for Testing Materials recognizes three grades of lead and six grades of zinc, the price being based in each case on the lowest grade with differentials for greater purity. See Appendix 0 for composition by grades.
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collapse of francs* It was only then that the possibility of a metal crisis was seriously entertained* The conquests of the Nazis had placed in their hands virtually all the zinc refining capacity of Continental Europe* England began to purchase increasing quantities of slab zinc, or spelter, from American producers, and Japan, already the silent partner of the Axis, also began to buy heavily in the United States* £/
Attitude of the Industry.—When the Advisory Commission to the Council of National Defense was created by the President late in May 1940, there was no indication that lead would offer any problem in the defense program* It was clear, however, that smelting capacity for zinc would have to be increased* Mexican, Canadian and Australian ore and concentrates normally refined in Belgium were already being brought into the United States, and domestic mine output was also increasing under the stimulus of rising prices*
As early as June a few leading zinc producers began the rehabilitation of disused plants and the addition of some new facilities* Five projects of this nature, with a combined monthly capacity of 4,500 short tons, were started during the first four months of the defense program; 2/ industry hesitated to risk more
capital in plant expansion without some assurance that prices would not break and that the demand for zinc would continue long enough to amortize the investment* There was evidence that consumers were hoarding the metal against future shortages, and producers were bought up for months in advance* The industry was alarmed over the activities of Price Stabilization Commissioner Leon Henderson, who had an investigation of zinc prices under way, and the possibility that large stocks of concentrates in Canada, Mexico, and Australia mi ght. be dumped on the American market acted as a further unsettling influence. 8/
¿7 Memorandum, C.K*Leith to W.L.Batt, September 12, 1940*
2/ These projectswith monthly capacity given in short tons, were the following:
Company Plant Location Monthly Capacity To Start Operation
American Zinc Co. of Ill. Dumas, Texas 500 Feb. 1941
American Zinc Co. of Ill. Monsanto, Hl. 1,400 Apr. 1941
New Jersey Zinc Co. Palmerton, Pa. 800 May 1941
New Jersey Zinc Co. Depue, Ill. 1,000 Aug. 1941
St. Joseph Lead Co. Josephtown, Pa. 800 Feb. 1941
R.J.Lund, Memorandum on Requirements and Capacity in Zinc, November 12, 1940, p* 6*
8/ Memorandum, C.K.Leith to W.L.Batt, September 12, 1940.
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Howard I. Young, President of the American Zinc Institute, summarized the attitude of the producers toward the expansion program in a paper read before a meeting of the Western Division of the American Mining Congress in mid-September:
"Those of us in the Zinc Industry know from bitter experience the meager margin that has been available in the mining and smelting of zinc ores since 1929« Therefore, in the light of this experience it is unreasonable to expect any company to make large investments for the purpose of bringing in new smelting capacity, unless there are reasonable assurances for outlets of production at prices that will return capital investments plus a reasonable profit." 2/
A combined balance sheet for six of the leading corporations in the lead-zinc industry for 1939 showed a net income on stockholders1 equity, after provision for income taxes, of 9»1 percent, with rates for individual corporations ranging from 4.2 percent to 18.0 percent. 10/ While substantial profits were being made by a small number of producers, the spread for the large corporations indicates that the smaller operators were working very close to the break-even level, and were in no position to invest any considerable amount of risk capital.
The industry was also infected with the "business as usual" point of view, which was generally dominant at that time. The extent of the defense program was still undetermined, and actual war seemed very remote. Business was only just emerging from a long period of depression, and was more interested in its long-range future than it was in temporary gains that might spell ultimate disaster. As Young put it in the paper already quoted:
"Looking to the future, it is highly important to the Zinc Industry to keep the requirements of those individuals who are our customers under normal conditions, supplied to such an extent that it will not be necessary for them to look for substitutes, nor produce an inferior product on account of shortage of zinc supplies.
"The Zinc Industry has spent large sums of money in promoting and developing its markets, and can be expected to do everything possible to hold them."
A similar point of view was expressed by Clinton H. Crane, President of the St. Joseph Lead Company, who warned the industry against overstocking in anticipation of future shortages, and gave it as his considered opinion that demand for zinc for war purposes would be
2/ Howard I. Young, "The Zinc Industry," paper, American Mining Congress, Colorado Springs, September 16 - 19, 1940.
10/ Federal Trade Commission, Industrial Corporation Reports. "Lead and Zinc Producing and Manufacturing Corporations," October 22, 1940, p. 5.
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materially less than it had been in 1915-16. As for lead, he saw the market already glutted and in danger of collapse. 11/
The over-stocking to which Crane referred had certainly contributed to the steady rise in zinc prices since June. The industry agreed with Leon Henderson that it was time to call a halt, and on September 23, 1940, leading zinc producers met with officials of NDAC to discuss the problem. They agreed to hold the price thereafter at 7-1/4# for Prime Western slab at East St.Louis. Four days later Henderson also took note of the rising price of lead, and threatened government action if the trend continued. 12/
Defense Requirements.—Responsibility for determining lead and zinc requirements and for devising ways of meeting them lay with the Industrial Materials Division of NDAC, headed by E.R.Stettinius, Jr. Those most closely in touch with the problem were William L. Batt, Deputy Director of the Division, and Dr. Charles K. Leith, Consultant on Minerals. Dr. Leith had served in a similar capacity with the War Industries Board of World War I, and had been advisor to the Amy and Navy Munitions Board ever since that tins. It was under his leadership that tentative military requirements had been worked out in the Summer of 1939 in a series of conferences between government and industry representatives. 13/
The Zinc Industry, through its trade association, the American Zinc Institute, offered its cooperation immediately following the organization of the Advisory Commission, 14/ and full advantage of the offer was taken. It was not until September, however, that zinc requirements began to be actively debated. On the 12th of that month the Bureau of Mines was asked by NDAC to make an immediate survey of consumer stocks as of April 30 and September 21, 1940. 15/ The Bureau also surveyed the industry to determine productive capacity, and canvassed consumers as to anticipated requirements; while the Zinc Institute conducted similar studies of its own. These surveys were still in progress when a conference on the zinc situation was held in the office of W. L. Batt, October 7, 1940. Leon Henderson, Donald H. Wallace, and C. K. Leith represented the Advisory Commission, while spokesmen for the industry were Howard I. Young, Ernest V. Gent, and Harry Blair, respectively, President, Secretary and Attorney of the American Zinc Institute.
11/ Clinton H. Crane. "The Future of the American Lead-Zlnc Industry paper, American Institute of Mining and Metallurgical Engineers, Salt Lake City, September 12, 1940.
12/ NDAC Press Release, PR-130 (September 27, 1940).
13/ Statement of Dr. Leith to the author, January 25, 1944.
14/ Statement of Howard I. Young to the author, February 15, 1944. Also letter, Young to Drew Pearson and Robert S. Allen, January 7, 1941*
15/ Letter, C.K.Leith to R.R.Sayers, September 12, 1940.
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Leith and Henderson urged that unused smelter blocks should be brought into Operation as quickly as possible, either by partial or total government financing, or by five-year amortization of taxes, and Leith and Wallace were assigned to review the possibilities in cooperation with the Zinc Institute« Meanwhile steps were to be taken to secure control of some 8,000 tons of slab zinc sold to French interests but still in American ports« 16/
Military requirements for zinc estimated by the Army and Navy Munitions Board on the basis of a four-million-man army and a maximum naval effort in a struggle of two years1 duration, were placed at 350,750 tons« Scaling down the military requirements to actual appropriations and authorizations for the fiscal year 1941, and the probable enactments for the succeeding fiscal year, the Bureau of Research and Statistics of NDAC estimated military needs at 50,000 tons for the year ending June 30, 1941» and at 95,000 tons for the fiscal year 1942« 17/ Other estimates were secured from the American Zinc Institute, from the Bureau of Mines, and from W. R. Ingalls, Director of the American Bureau of Metal Statistics« These various forecasts were compiled for the calendar year 1941, and the Industrial Materials Division of NDAC based its own estimate on them« 18/
Zinc Requirements and Capacity, 1941 (in thousands of short tons)
American Zinc Institute Ingall. Bureau of Research and Statistics Bureau of Mines NDAC
Requirements Civilian) Military) Export 683 122 720 80 100 830) 73) 132 792 720 73 112
Total 790 900 1,015 850 905
Production Primary Secondary 705 810 10 810 10 792 797
Total 717 820 820 825 830
Imports 12? 10? 10? 10? 10?
Total 729 830 830 835 840
Deficit 61 70 185 15 65
16/ Memorandum, C« K« Leith to W« L. Batt, October 7, 1940«
17/ Memorandum, Stacy May to Members of the Priorities Board, October 30, 1940.
18/ R. J. Lund, Memorandum on Requirements and Capacity in Zinc, November 12, 1940«
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The requirements figures were tentative at best, and were based on little »ore than extensions of the existing rate of consumption, weighted in various ways« The production estimates were more accurate, because the capacity of existing plants and of plants under construction could be closely approximated. Assuming a supply of ore and concentrates sufficient to maintain maximum smelter output, production still fell well below any but the most conservative estimate of requirements, and the forecasts of smelter capacity varied by as much as 100,000 tons« The conclusion reached by the Advisory Commission experts, reflected in the last column of the table above, was that a shortage of zinc in the latter half of 1941 could be avoided only by providing without delay for an additional smelter capacity of at least 65,000 tons«
Projects were then being considered by five leading producers which would add a total of almost 7,000 tons a month to the country’s output of slab zinc in a period of six to twelve months, but all of them were awaiting a governmental guarantee that capital would not be lost, and final decision in each case was retarded by uncertainty as to ore supply, demand, and price« 19/ Only one of them was definitely committed before the end of the year« This was an addition to the Amarillo, Texas, plant of the American Smelting and Refining Company, which would increase capacity of the smelter by 1800 tons a month when in full operation« A certificate of necessity for the project was granted by NDAC in December 1940, but no action was taken on the same company’a proposal to build an electrolytic zinc plant, with a capacity of 2000 tons a month, at Corpus Christi. This and other prospective facilities expansions were deferred until the Advisory Commission had been supplanted by the more vigorous Office of Production Management early in 1941«
A Priorities Board was meanwhile created by the Council of National Defense, at the direction of the President, on October 21, 1940. Knudsen, Stettinius, and Henderson were the members, with Donald M. Nelson as Administrator. Through Stettinius the Industrial Materials Division was tied in to the new set-up. At about the same date John A« Church, a mining engineer of wide experience, became consultant on Copper and Zinc, and in collaboration with Dr. C. K. Leith, assumed primary responsibility for the zinc program«
A series of discussions through the latter part of October and early November culminated in a meeting between representatives of the Advisory Commission and members of the industry on November 19, 1940« Among those present were Leith; Church; M. B« Folsom, Division Executive for Mining and Mineral Products; A. I. Henderson, Assistant on Export Licensing; Donald H. Wallace, Bureau of Research and Statistics; Howard I. Young and E. V. Gent of the Zinc Institute; and Captain E. F. Shepherd of the Amy and Navy Munitions Board« Young offered revised estimates of consumption and production of zinc for
Ibid. , Hp. 9*10.
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1941 and 1942 based on the most recent Information from the industry* Total production for 1941, including that ftom plants under construction was now given as 866,000 tons, which was expected to rise to 892,000 tons in 1942« 20/ The industry figure for requirements was 867,500 tons for 1941« The Defense Commission representatives accepted the industry’s estimates for production, but advanced their own requirements figure, which was 929,000 tons* The compromise agreed upon was 882,000 tons of sine as the requirement for 1941, and 904,000 tons for 1942. &/
This statistical adjustment brought capacity to within 15,000 tons of requirements, counting new facilities expected to be in operation by July 1, 1941, a date well in advance of the anticipated peak of demand. It was the consensus of the group that the Advisory Commission should recommend construction of an additional 24,000 tons of refining capacity, presumably the Corpus Christi plant previously proposed by the American Smelting and Refining Company. It was agreed, however, that new capacity should be limited to emergency temporary expansion by established operators, and that care should be taken not to over-expand the industry lest postwar readjustment be made more difficult.
An even more optimistic picture was painted by Young a week later when he supplied new production figures which added 7,420 tons to the 866,000 already reported for 1941« 22/ With the deficit so nearly erased, it was easy for ND AC to postpone action on any further increase in plant capacity.
It should be noted that all estimates of requirements made up to this time allowed for unrestricted civilian use. The defense program was simply superimposed on the normal consumption pattern.
Export Control.—Toward the end of 1940, despite the efforts of the Advisory Commission, a serious stringency in zinc began to be felt. With defense orders added to normal business, manufacturers of zinc products found themselves in need of much larger quantities of metal than they could obtain, and by December the American Zinc Institute and the NDAC alike were being besieged by indignant fabricators. 23/ The AZI combed the industry for metal that could be diverted to supply the most pressing immediate needs, but this was at best an expedient of limited application.
There were various reasons for the shortage. The bulk of the new demand for zinc was for cartridge brass, and the rolled sheet used for this purpose was of heavier gauge than that commonly
20/ Report of the Meeting by Captain Shepherd.
21/ John A. Church to E. V. Gent, November 20, 1940, and attachment. 22/ Letter, H. I. Young to C. K. Leith, November 27, 1940.
23/ Letter, E. V. Gent to John A* Church, December 10, 1940; Memorandum, Church to A.I.Henderson, December 6, 1940.
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required for civilian uses* Fewer operations were required, and the manufacturers consequently found their capacity greater than had been estimated, 24/ Another factor was the unusually large export trade. The rapidly expanding British needs had been underestimated, and an unprecedented quantity of zinc was being purchased by Japan, The first eleven months of the year showed exports of 13,270 tons to that country compared with only 910 tons for the corresponding period in 1939, 25/ The tightness of the market inevitably led to a certain amount of speculative buying, with trading in zinc futures on the Commodity Exchange at premium prices. The price ceiling of September 23 was conscientiously maintained by the bulk of the industry, but scrap and secondary metal, for which no ceiling had been set, were selling for more than virgin zinc before the end of the year, 26/
The American Zinc Institute surveyed foreign sources for new supplies of concentrates with some success, but shipping space was an unknown factor, and in any event no enlargement of the supply of available metal could be realized until the bottleneck in smelter capacity had been broken, 27/ The only possibilities for relieving the immediate situation were some form of restriction on civilian use, and limitation of exports. The latter offered the best prospect of metal with a minimum of delay.
The Commodity Exchange recommended an embargo on the exportation of zinc except by license as the surest way to prevent speculation, 28/ At the same time the steel industry, which used large quantities of zinc for galvanizing, proposed that all exports of the metal be cut off if necessary to conserve domestic supplies for American consumers; 29/ and the British Purchasing Mission, with its own needs in mind, urged export licensing, 30/
The Industrial Materials Division of ND AC summarized the
case for export licensing early in December, laying emphasis on the large shipments to Japan; 31/ and the Army and Navy Munitions Board concurred in the recommendations, 32/ The question came before
24/ Letter, C. V, Dallas to John A, Church, December 11, 1940; memorandum, Church to Stettinius, December 27, 1940,
25/ Letter, A, D, Marris of the British Embassy to Joseph C, Green, State Department, December 31, 1940,
26/ Office of Price Administration, First Quarterly Report, April 30, 1942, p. 140.
27/ Howard I. Young to John A, Church, December 24, 1940,
28/ Letter, Charles Slaughter, President of the Commodity Exchange, to Julius B, Baer, Counsel, December 2, 1940,
29/ Memorandum, W. S, Tower to John A, Church, December 6, 1940«
30/ Letter, A. D. Marris to Joseph C, Green, December 31, 1940, referring to a request made October 15,
31/ Memorandum, A, I, Henderson to E. R. Stettinius, Jr,, and
W. L, Batt, December 4, 1940«
32/ Memorandum, Col, Charles Hines to Edward Browning, Jr,, December 5, 1940«
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the Advisory Commission on December 6, and it was agreed that zinc should be recommended for inclusion in the list of materials subject to export control, 33/ It was February 4, 1941, however, before export licensing regulations actually went into effect.
Zinc Conservation.—The first tentative moves toward the control of zinc for domestic consumption were also taken in December 1940« The possibility of voluntary reductions in civilian use, particularly by the automobile industry, was discussed as early as November, 34/ but it was not until the following month that active steps toward this end were taken. On December 9 Stettinius received a one-line memorandum from Undersecretary of the Navy James Forrestal, asking bluntly: "Is there a shortage of zinc?" The reply, dated the same day, was a masterpiece of understatement, "It now appears," Stettinius wrote, "that for the next three or four months there might be a slight shortage in zinc, but we have had conferences with the zinc producers who are now bringing in new production sufficient to meet these shortages,"
Church was better informed. On December 14, less than a week after his chief had made the statement quoted above, he told a meeting of Army and Navy technicians that the zinc situation was tighter than that for any other metal, and that the time was rapidly approaching when it would be necessary to establish priority control. He proposed to schedule the production and use of zinc for a year or a year and a half ahead, and asked the services for detailed programs which could be fitted into the developing production pattern, 33/ This request was made a matter of record a week later in a formal letter to the Army and Navy Munitions Board, where the zine situation was summarized as follows:
"The domestic supply of slab zinc in 1941 is expected to fall short of requirement by a very considerable margin, not yet precisely defined, but estimated provisionally to run to several tens of thousands of tons. The requirement by which this shortage is measured comprises: (a) direct Army and Navy requirements, (b) British needs, (o) domestic industrial use. This last item of domestic industrial use is naturally relied upon to absorb the shortage, but with one qualification, namely, that many secondary and tertiary effects of the defense effort (not directly traceable to Government contracts) may be felt by small factories and supply houses, which depend on ordinary commercial channels
33A Minutes, M)AC, p, 36A.
J4/ Memorandum, E.R.Stettinius, Jr,, to W.L.Batt, November 29, 1940, ¿5/ Report of Conference by Paul M. Viemont,
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of supply^ so that a general constriction of these ordinary
channels nay hamper certain parts of the defense effort itself.» ¿/
The first step toward absorption of the shortage by domestic industry had already been taken. Church estimated that 15,000 tons of sine could be *8aved by eliminating decorative and ornamental uses of the metal on 1942 automobile models, and at Knudsen’s suggestion the Automobile Manufacturers Association was asked to cooperate in effecting the saving. 37/
36/Letter, John A. Church to Colonel Charles Hines, December 21, 1940. 37/ Memorandums, John A. Church to A. I. Henderson, December 13, 1940;
A. I. Henderson to E. R. Stettinius, Jr., December 23, 1940; Stettinius to William S. Knudsen, December 27, 1940, and endorsement by Knudsen. Also letter, E. R. Stettinius to Pyke Johnson, Executive Vice President, Automobile Manufacturers Association, December 31, 1940.
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II. EXPANSION and control UNDER PPM January-December 1941
Expanding Requirements,—By the end of 1940 the first phase of the defense effort was about over. The Advisory Commission had proved unequal to the task, and the metals programs, along with the other operating functions of the Commission were transferred to the Office of Production Management on January 7. Lead still presented no problem, with year-end stocks amounting to 120,000 tons, and production well ahead of needs. Imports continued to flow in from easily accessible Western Hemisphere sources, and no procurement difficulties were reported. The zinc situation, on the other hand, went rapidly from bad to worse, despite an all time record for domestic production of 724,000 tons of slab during 1940»
The primary reason for the sudden crisis, if such it may be called, was a revised estimate of military needs announced by the Undersecretary of War on January 4. The new estimates called for 335,000 tons of zinc a year for cartridge brass alone, after allowance for re-use of brass scrap. This quantity of zinc, all of which had to be high grade, was more than four times the total allowed in November for all military purposes. At this rate of consumption, the defense needs alone would monopolize the entire productive capacity of the country for high grade zinc. Even if*the metal could be produced in the desired quantity and grade there was not sufficient sheet rolling capacity in the country to fabricate the brass. 38/ The ANMB estimates were heavily discounted, but it was still obvious that the military requirements would be larger than had been assumed.
If the zinc content of brass for all domestic uses, both military and civilian, were placed no higher than 275,000 tons, Church estimated that a total of 828,000 tons of zinc would still be needed during 1941, plus 100,000 tons for export, mostly to Britain. His figure was essentially the same as the estimate which the industry had whittled down in November, but now it was admittedly too low rather than too high. Additional reports from refiners made it possible to forecast 892,000 tons of smelting capacity, but ore for this much could be secured only by drawing upon all of North America. If 928,000 tons of zinc were to be made available, not only would smelting capacity have to be still further enlarged, but South American and perhaps Australian concentrates as well would have to be imported, with all the shipping difficulties thereby implied.
38/ John A. Church, Memorandum, "Outline of the Zinc Industry in Relation to Defense," January 13, 1941« Also memorandum, E.R.Stettinius, Jr., to J.V.Forrestal, January 10, 1941«
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In his summary of the situation, Church faced the problem squarely, and recommended controlled distribution as the only way of meeting requirements:
"There is a present stringency in the supply of zinc for prompt delivery, due chiefly to the continued imposition of a stream of defense orders on a market already heavily committed. The resulting tangle of direct defense demand, secondary requirements of the defense effort and private commercial commitments can be straightened out properly only by a system of priorities applied at the source.
"The overall shortage for 1941, indicated by present estimates of total requirement, is not serious. However, these estimates are open to question, and are being revised by a more detailed survey, although even the revisions, no matter how precise, will be subject to further changes as the munitions program unfolds. Some centralized system of placing Government contracts in accordance with the realities of supply would save a great deal of stringency and confusion, but this may be an aspiration rather than a practicable solution.
"Requirements for cartridge brass beyond 1941 are tremendous, as now estimated. Until the estimates have been reviewed, no dear plan for these ensuing years can be formulated. * 39/
Partial Allocation of Zinc.—Under the Office of Production Management the operating functions of the Priorities Board were taken over by a Priorities Division, headed by E. R. Stettinius, Jr. The Division was organized into commodity groups, one of which dealt with Minerals and Metals, and this group was further subdivided into committees, of each of which the group executive, Dr. Ernest M. Hopkins, served as Chairman. The critical zinc situation was one of the first to be faced by the new organization, and constituted the agenda for the first meeting of the Non-Ferrous Metals and Minerals Priority Committee on January 30, 1941« 40/
The system of voluntary allocation of available supplies by the industry itself had proved unequal to the task. Brass mills were operating below capacity because zinc in sufficient quantity could not be secured, Q/ and the price of zinc scrap soared under the impulse
39/ John A. Church, memorandum, "Outline of the Zinc Industry in"" Relation to Defense," January 13, 1941, p* 8.
40/ Minutes, Non-Ferrous Metals and Minerals Priority Committee, January 30, 1941«
41/ Revere Copper and Brass, Inc., for example, was forced to shut down its brass mills two days a week because of a zinc shortage. Letter, C.C.Felton, Vice President of Revere, to Herbert Feis, January 17, 1941. 23-098 P21 t»«
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of wildly competitive bidding for the metal. While Leon Henderson met with representatives of the secondary zinc industry in an effort to stabilize the market, 42/ the more difficult task of working out a system of priorities was assumed by the Non-Ferrous Metals and Minerals Priority Committee. It was agreed that Army, Navy, and British needs should be met first, with the remaining supply'to be allocated to commercial users in the way least likely to disturb normal business. The British orders, however, and many of those for the American military program, were from new users who could not be supplied without impairing existing obligations. The long standing practice of the industry was to purchase for future delivery, often many months in advance, and the entire available supply was already under contract to regular customers.
Irwin H. Cornell, of the St. Joseph Lead Company, producer’s representative on the Committee, laid the problem before a hastily assembled gathering of producers in New York on February 1. Ten specific questions dealing with the need for priorities, the method of allocation if priorities were needed, and the possibility of replacing various uses of zinc, were raised. Following Cornell’s report, Howard I. Young in his capacity as AZI President, appointed an industry committee to answer the questions posed. Chairman was Marshall L. Havey of the New Jersey Zinc Company, while E. V. Gent of the AZI acted as Secretary. The members were Kenneth C. Brownell, American Smelting and Refining Company} Clarence Glass, Anaconda Sales Company; B. N. Zimmer, American Metal Company; and Edward V. Peters, Aguilar Corporation. 43/
The industry committee net on February 3, and submitted a report the next day. Priorities, in the sense of control of the distribution of all zinc production, were regarded as unnecessary at that time, but three steps short of priority control were recommended:
(1) Full information should be secured as to unfilled orders involving zinc already placed by the Army, Navy and other defense agencies, and by the British Purchasing Commission; and these orders should be examined to see if the zinc called for was really necessary.
(2.) A stated quantity of zinc from which unsatisfied defense needs could be filled should be secured from the producers on a pro rata basis. A government request would automatically abrogate existing contracts to the extent necessary to make this metal available. The Non-Ferrous Metals and Minerals Priority Committee was invited
42/ OPM Press Release, PM-22, January 24, 1941; and PM-31, January 30, 1941.
43/ Minutes, Non-Ferrous Metals and Minerals Advisory Committee, February 6, 1941, Exhibits "A" and *B".
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to direct the distribution of the metal so acquired, "availing itself of the knowledge of the trade and of uses of zinc through the American Zinc Institute and an advisory committee thereof, in order that the distribution nay be made in a manner that is equitable to the individual applicant, to other consumers of zinc and to the zinc producers*•
(3) Every effort should be made to substitute less critical materials for zinc wherever possible* 44/
The Industry Committee made it clear, however, that the AZI could act only in an advisory capacity, and on express direction of OPM* Its members were seeking no trouble with the Anti-Trust Division*
When export control became effective on February 3, the necessary license for some 6,000 tons of zinc awaiting shipment to German-occupied Belgium was refused, and the metal was promptly requisitioned by the Navy for distribution among firms holding Navy contracts* Another lot of 5,700 tons originally destined for France was bought by the British Purchasing Commission, but 3,700 tons were resold to an American producer for domestic use, to be replaced at a later date* 45/ These tonnages served to ease the immediate shortage, but did not obviate the need for some form of priority control*
The Non-Ferrous Metals and Minerals Priority Committee resumed its consideration of the problem at its second meeting, on February 6* Cornell assured the Committee that the American Zinc Institute "would be willing and only too glad to furnish from one to three men, recognized experts in their fields, to the government to assist in handling the allocation of zinc*" A proposed preference rating form had already been reviewed by the AZI, but Cornell preferred a form requesting a priority allocation, which he undertook to submit* 46/ The following day, February 7, the group met again, to hear from the President and the Secretary of the AZI, and it was agreed that the Institute should set up a special committee, of which Church should be a member, to recommend procedures for distributing zinc* The aim was to further the defense program, but it was to be done in such a manner as to offer the least possible disturbance to business* ¿¿¡J At the same time the AZI undertook to rearrange shipping schedules to facilitate the flow of zinc to the brass mills* A press release
4^/ Ibid. , Exhibit »B».
45/ Memorandums, George M. Moffett to JI. A. Harriman, February 10, 1941; John A* Church to George M. Moffett, March 3, 1941;
John A* Church to William L* Batt, March 7, 1941»
46/ Minutes, Non-Ferrous Metals and Minerals Priority Committee, February 6, 1941«
47/ Ibid., February 7, 1941«
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issued by Stettinius on February 8 called attention to this rescheduling of shipments, and urged the conservation of zinc by non-defense users* 43/ Meanwhile, steps were taken to clear with the Department of Justice the projected allocation of zinc by an industry committee* 49/
The Industry Advisory Committee was duly named by the Executive Committee of the American Zinc Institute on February 17* The members were the same as those who had met to discuss the priority question two weeks earlier, save that E. V. Peters was dropped, and John A* Church, representing the Priorities Division took his place* $0/ E. V* Gent, Secretary of the AZI, was derignated Chairman*
When Knudsen pressed a few days later for mandatory priorities similar to the system already established for aluminum, Dr* E*M* Hopkins based his disagreement on the excellent relations between the Priorities Division and the Zinc Institute* 51/ The Industry Committee, however, was already willing to go part way, and a tentative plan was outlined to the Non-Ferrous Metals and Minerals Priority Coipmittee on February 27* 52/ Embodied in a formal report dated March 5, the plan was approved the next day, and was announced in a press release March 7* 53/ It called for the creation of a reserve pool of slab zinc from which urgent defense orders could be filled by direct allocation* Every month each producer of slab zinc would set aside for the pool an amount equal to a stated percentage of his production during the third preceding month* The plan was to be effective in April, when 5 percent of the amount produced in January was to be reserved—a quantity believed adequate to meet existing needs* The industry hoped through this arrangement to avoid full priority control, and Church, at least, believed that even this degree of allocation would be necessary only for two or three months* 54/
New Zinc Conservation Measures*—Paralleling the development of distribution control measures, efforts were made to reduce civilian consumption of zinc* The elimination of nonessential uses was one of
48/ PPM Press Release* PM-55, February 8, 1941 ~
42/ Memorandum, Blackwell Smith to Hugh Cox of the Anti-Trust
Division, February 13, 1941«
¡3/ Minutes, Non-Ferrous Metals and Minerals Priority Committee, March 6, 1941, Exhibit "A”*
51/ Minutes, Priorities Division Executive Staff, February 25, 1941. 52/ Minutes, Non-Ferrous Metals and Priority Committee, February 27, 1941. 52/ OPM Press Release, PM-135* Non-Ferrous Metals and Minerals Priority Committee, March 6, 1941, and Exhibit "B11*
54/ Minutes, Non-Ferrous Metals and Minerals Priority Committee, February 27, 1941« See Appendix D for summary of pool allotments*
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the three general recommendations made by the American Zinc Institute in the report of its special committee on February 4, 1941« 55/ ^ven before that date officials of the Materials Branch of OPM were making progress in the same direction. The possibility of saving a considerable amount of zinc in automobile manufacture had already been discussed by the Advisory Commission, and the same men carried on under the new organization« Because of his connection with the industry William S« Knudsen served as contact man, and on February 4 a letter went out over his signature to the eight principal manufacturers of motor vehicles« He requested that as much zinc as possible be saved in the 1942 passenger car models, which would start production in April of 1941« Purely ornamental parts were to be omitted, or made of less critical material; and substitutions were also to be made in functional parts wherever it could be done without ’’using some other metal just as necessary, or calling for changes in shop equipment which would place a burden on the machine tool industry.” 56/
The response was highly gratifying« All the automobile manufacturers promised to aim at a 50 percent reduction in the use of zinc in their 1942 models, and Ford went so far as to promise the removal of every pound of zinc if necessary« The total saving for
the model year was estimated at about 43,000 tons, at least 17,000 of which would be available for other uses during the latter half of 1941» 57/ Church estimated more conservatively that the total saving would be 30,000 tons for the model year« 58/
A reduction in the amount of zinc used in galvanizing was suggested at a meeting of the Steel Priority Committee on February 14, and was discussed with representatives of the steel industry a little later in the month. 59/ Walter S« Tower, producer’s representative on the Steel Priority Committee, estimated that more than 30,000 tons of zinc could have been saved on the 1940 output of galvanized sheet by reducing the zinc coating to one ounce per square foot. 60/ The question was also taken up with agricultural representatives, who objected that a lighter zinc coating on fence wire, fence posts, and roofing sheet would be economically undesirable, 6i/ but the consensus of the Steel Priority Committee favored the saving« On April 1 Church attended a meeting of the principal galvanizers, who agreed to reduce the amount of zinc used by 20 percent« The saving
557 Minutes, Non-Ferrous Metals and Minerals Priority Committee, February 6, 1941, Exhibit "B”.
56/ Knudsen’s letter went to the President or Chairman of the Board of the following companies: General Motors, Chrysler, Packard, Studebaker, Nash-Kelvinator, Hudson, Willys-Overland, and Ford«
57/ Memorandum, "Automotive Survey," by R«L«Wilcox, undated«
58/ Memorandum, John A« Church to W«L.Batt, March 7, 1941»
59/ Memorandum, Samuel S. Stratton to John A« Church, February 14, 1941«
60/ Memorandum, Walter S« Tower to John A« Church, February 26, 1941, transmitting a memorandum, G.S.Rose to Tower, February 24, 1941»
Q/ Letter, C.V.Gregory to S.S.Stratton, February 19, 1941*
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would be effected either by using a lighter coating of zinc or by substituting painted for galvanized products, and was expected to amount to 40,000 tons of zinc a year« 62/ A week later a letter was mailed to 39 manufacturers of galvanized sheet and galvanized formed products requesting information on zinc consumption for the years 1939 and 1940, preparatory to putting the agreed curtailment into effect« 63/
The Bell Telephone Company was also approached with respect to possible savings in zinc consumption, and reported that the question of substitutions for critical materials had been under study since the fall of 1939» The company expected to save 840 tons of zinc during the calendar year 1941, with additional savings in prospect« At the sane tine the Navy Department was asked to substitute sone other natal for the zinc used in practice bombs« The Navy was understood to be in the market for 500,000 such bombs, each requiring 2-1/2 pounds of zinc« Lead was later offered as a suitable and noi^-critieal substitute« 65/
Another possible field in which zinc might be saved was the manufacture of brass, and the possibility of reducing the proportion of zinc in the formulas for various types of brass was referred to a technological committee of the National Academy of Sciences« 66/ Assistance in the search for substitutes was also secured from the Conservation Unit, set up in the Materials Branch of the Production Division, 0PM, late in March, 1941« The new unit was under the direction of Robert E« McConnell« 67/
Ei^naion of Facilities.—The plant expansion program, meanwhile, proceeded slowly and with caution, with Church hesitating to "overbuild still further an industry already dangerously overbuilt with respect to its probable market after the emergency is over." 68/ Through Mr ch, 1941, only six certificates of necessity for construction of zinc facilities had been granted, in addition to the single project certified the preceding year, and none of the six was new« All were plants already in operation or far advanced toward that goal, and the certificate of necessity was merely a belated guarantee of five-year tax amortization on capital previously invested by the
62/ Minutes, Non-Ferrous Metals and Minerals Priority Committee, April 3, 1941.
63/ John A« Church to the President or Chairman of the Board of 39 steel companies, April 7, 1941.
Letter, Keith S» McHugh, Vice President, American Telephone and Tiephone and Telegraph Company, to George M« Moffett, March 11, 1941.
65/ Letter, Ernest M« Hopkins to Secretary Frank Knox, March 4, 1941$ Memorandum, Erwin Vogelsang to Lt« Commander M« Welborn, May 7, 1941.
66/ Memorandum, John A« Church to C. K. Leith, March 10, 1941« 67/ OPM Press Release, PM-184, March 23, 1941.
68/ Memorandum, John A. Church to William L« Batt, March 7, 1941.
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industry. 69/ The increased output for which these plants would be responsible had been included in Church’s January estimate of smelter capacity, and could not be credited against the prospective deficit for 1941*
The need for expanding plant capacity was closely related to the military requirements for cartridge brass. For this purpose, high grade zinc was required. Metal of the necessary purity may be produced only ty the electrolytic process, or by redistillation of lower grade slab, and facilities of this type were comparatively few in number. There were only four electrolytic plants in all, one at Anaconda and one at Great Falls, Montana, both operated by the Anaconda Copper Company; one belonging to the Sullivan Mining Company, at Kellogg, Idaho; and one at East St. Louis, owned by the American Zino, Lead and Smelting Company. The New Jersey Zinc Company operated redistillation plants at Palmerton, Pennsylvania, and Depue, Illinois; and the St. Joseph Lead Company had a plant at Josephtown, Pennsylvania. 70/ The combined capacity of all these plants was not adequate to meet the prospective military need for high grade zinc, particularly if any of the metal was to be used for civilian purposes.
It was to meet this need that the proposed electrolytic plant of the American Smelting and Refining Company at Corpus Christi had been planned, but March of 1941 found the project still in the negotiation stage. The difficulties were both financial and psychological. Howard I. Young, who in addition to his trade association connection was President of the American Zinc, Lead and Smelting Company, summarized the financial problem in a letter to Church:
nI have told you, on numerous occasions, that the present margin in domestic metal is not sufficient to justify any company building new plant capacity. I do hope before long this price situation will be given more serious consideration so that we can have a margin that will justify expansion of facilities for treating domestic ores or import ores with duty paid for domestic consumption. I think it important that this matter be given prompt consideration.• 71/
¿9/ WPB, Statistics Division, War Industrial Facility Expansions.., Through June 30, 1942 <
70/ Memorandum, John A. Church to Jesse Jones, February 12, 1941» 71/ Letter, Howard I. Young to John A. Church, March 3, 1941.
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The psychological considerations had to do with the future of the industry, which could not conceivably use in the postwar world even so much smelting capacity as it already had; and with the activities of the Anti-Trust Division of the Department of Justice* The charge of monopoly had already been leveled at the industry in connection with the current shortages, 72/ and the columnists who made it might have found more justification for it than they produced had they known of the November 19 meeting at which it was agreed that new operators were not to be brought in on the expansion program* 73/ The producers feared, not altogether without reason, that a planned enlargement of smelting capacity premised on the continuation of a minimum price for zinc, might be construed as a combination in restraint of trade, and they wanted the government not only to guarantee their investments but to assure them of legal protection* 74/
The certificate of necessity, declaring the given project essential to the defense of the United States, solved the legal difficulty, but where government financing was required the producer still had to come to satisfactory terms with the Reconstruction Finance Corporation or its subsidiaries* Negotiations were often slow end long-drawn-out, and every delay postponed by that much the achievement of maximum production*
The Corpus Christi electrolytic plant, which would produce 2,000 tons a month of high grade zinc (later enlarged to 2,500 tons monthly capacity), was discussed with RFC officials in February, 1941, and before the end of March a tentative agreement was reached whereby the American Smelting and Refining Company would build the plant and the RFC would contract for 50,000 tons of metal at the base price plus differential for high grade zinc* 75/ In April, however, the Army and Navy Munitions Board refused to approve the deal, on the ground that no more zinc was needed, 76/ and it was not until Church had explained to ANMB officials the magnitude of their own munitions program that a contract was finally signed. 77/ The estimated cost of the plant was five and a half million dollars, which grew to over eight million before the work was completed.
Negotiations for a similar contract on the part of the American Zinc Company of Illinois, a wholly owned subsidiary of
72/ Drew Pearson and Robert S. Allen, the Washington Merry-go-Rnund, January 3, 1941*
73/ See page 8 above.
74/ See, e.g., Pope Yeatman to Robert E. McConnell, April 28, 1941. 73/ Memorandums, John A* Church to W. L. Clayton, February 21, 1941;
W.L.Batt to E.R.Stettinius, Jr., March 21, 1941»
26/ Minutes, Non-Ferrous Metals and Minerals Priority Committee, April 10, 1941.
77/ Memorandum, John A. Church to Major Clifford V. Morgan, April 10, 1941> letter, Harvey J. Gunderson, Assistant General Counsel, Metals Reserve Company, to A.I.Henderson, April 10, 1941.
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Young’s American Zinc, Lead and Smelting Company, were also under way in March« In this case, however, a loan as well as a purchase agreement was involved« The company proposed to build an electrolytic plant at Monsanto, Illinois, with a capacity of 17,000 tons a year, and another 7,200 tons was to be added to the annual capacity of its retort plant at Fairmont City, Illinois« The RFC objected to the terms proposed by the company, and the dickering went on for months while the war crisis abroad deepened and the defense requirements grew« It was November before an agreement was reached« 78/ The original estimate of expenditure was $4,000,000 but the eventual cost was more than $6,000,000« It was also November before certificates of necessity were granted for plant expansions carried out by the Eagle-Picher Mining and Smelting Company at Galena, Kansas, and Henryetta, Oklahoma, and by the National Zinc Company at Bartlesville, Oklahoma, although all three facilities were already in operation by that date«
A necessity certificate was granted in June for a million dollar slag fuming plant to be built by the Bunker Hill and Sullivan Mining Company at Kellogg, Idaho, but the plant did not get into production until April, 1943. This completed the zinc facilities program for the defense period« It took the stimulus of actual war to bring further expansion of smelting capacity«
Mandatory Priorities for Zinc.—The passage of the Lend-Lease Act early in March, 1941, foreshadowed a sharply rising demand for industrial materials, zinc among them, from Britain and her allies, and the probability of even greater shortages faced the Non-Ferrous Metals and Minerals Priority Committee almost as soon as the partial allocation program had been agreed upon« Knudsen continued to urge mandatory priorities for zinc in anticipation of an increasing stringency, 79/ and the Price Stabilization Division found it necessary to bar zinc sales on the Commodity Exchange to prevent speculative hoarding and maintain the established price« 80/ Zinc appeared for the first time on the Priorities Critical List on March 17, 1941« 81/
The announcement that a reserve pool of zinc would be available for priority allocation in April brought an immediate response from consumers. Long before any of the metal was actually available applications for allotments were flowing in to the Priorities Division, and a formalized procedure for handling them was worked out« The method followed was summarized at the request of Dr« Leith by E. V« Gent, who will be remembered as Chairman of the special advisory committee named by the American Zinc Institute:
78/ See memorandum. A« I .Henderson to W.L«Batt,Sr«, March 19, 1941$ and correspondence between Howard 1« Young and OPM and RFC officials from March to July, 1941« Also WPB, Statistics Division, War Industrial Facility Easpansions« » «through June 30, 1942. A tabulation of zinc facilities is given in Appendix E,
79/ Minutes, Non-Ferrous Metals and Minerals Priority Committee, March 12, 1941.
80/ OPM Press Release, PM-147, March 11, 1943. 81/ OPM Press Release, PM-171, March 19, 1941«
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wl* When the Office of Production Management receives a demand for zinc from a consumer, a questionnaire (MM-1) is sent him, which is designed to disclose the purpose for which the zinc is required, its relation to the Defense program, and the consumer’s position as to zinc supplies*
*2, At approximately weekly intervals, the Special Advisory Committee of the American Zinc Institute, which was formed at the request of Dr* Hopkins, is called to meet with Mr* John A* Church, who was appointed by Dr* Hopkins to represent the Priorities Division at meetings of the Advisory Committee* In addition to Mr* Church, Mr* I*H* Cornell, Producers Representative, and Mr* H*L. Erlicher, Industrial Consumers Representative, of the Non-Ferrous Metals and Minerals Division of Priorities, regularly attend each meeting of the Advisory Committee* Col* W* R. Slaughter, representing the Army, attended the last meeting*
”3* From the completed questionnaire in his possession Mr* Church develops the needs of the consumer, and the tonnage, grade and delivery required, and then calls for the suggestions of the Advisory Committee* The function of this Committee, which is purely advisory, is to contribute its detailed knowledge and experience of the industry to guide the Priorities Division in its decisions* In this manner, the Priorities Division is able to make the best use of the tonnage and grades available, and better satisfy the peculiar needs of each and every consumer demand*
n4* The Director of the Priorities Division notifies each zinc producer in writing that he will issue preference ratings with respect to a stated tonnage representing a certain percentage of the month’s output of slab zinc. In due course, priority orders are issued by the Director, calling upon the producer to deliver specified portions of the above-mentioned tonnage to specified consignees*
"The plan as outlined has been found to be practical and capable of producing results* The Priorities Division retains complete control throughout, alone determines the percentage to be set aside by the producers subject to preference ratings passes upon the merits of each demand and decides upon the
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tonnage to be allocated to consumers«M gg/
To avoid legal complications all referrals to the Industry Committee were put in the form of requests for information and reduced to writing, the answers being returned as written recommendations« 83/
Although Church insisted that there was an ample supply of zinc for defense purposes with a large balance for civilian consumption, 84/ the steadily mounting number of requests for allocations from the reserve pool to fill defense orders indicated clearly enough that the metal was not going where it was most needed« Speaking for the industry, I.H. Cornell thought that at least 100,000 tons would have to be taken out of civilian use to meet defense and Lend-Lease needs« 85/ The serious nature of the problem had already led to the appointment of a special consultant on zinc late in February, in the person of George C« Heikes, an experienced geologist and mining engineer«
Before the end of March it was clear that the 5 percent pool would be inadequate should any unexpected demand arise, and the Industry Committee agreed that the reserve could be increased to 20 percent« 86/ Before any definite action in this respect was taken, however, the question of mandatory priorities involving allocation for civilian as well as for defense uses, was again before the Non-Ferrous Metals and* MineralsPriority Committee. 87/ " ‘
The price situation, meanwhile, was by no means under control, and there were those among producers and consumers alike who failed to see any reason why business should not go forward as usual« Despite the acknowledged shortage of zinc, quantities of the metal were actually being sold at Black Market prices ranging from 120 to 180 a pound. 88/ More than one consumer rebelled when he saw his business threatened with extinction because he could not get enough zinc to carry on in his customary way. As one of them put it, nI appreciate that everything should be spared for the defense of our freedom, but, at the same time, self-preservation is the first law of nature.” 89/
82/ Letter, E.Oent’io C.k.Leith. April 14, 1941; memorandum.
Leith to E.M. Hopkins, April 15, 1941. Also Minutes, Non-Ferrous Metals and Minerals Priority Committee, March 12, 1941» 83/ Minutes, Non-Ferrous Metals and Minerals Priority Committee,
March 20, 1941«
84/ Minutes, Executive Staff, Priorities Division, March 24, 1941.
85/ Minutes, Non-Ferrous Metals and Minerals Priority Committee, •March 20, 1941«
8b/ Ibid., March 27 and April 3> 1941»
82/ Ibid., April 10, 1941.
88/ Ibid., March 27, 1941.
89/ Letter, Arthur H. Kuhlmann to Senator Harry S« Truman, March 28, 1941, in Minutes, Non-Ferrous Metals and Minerals Priority Committee, April 24, 1941, Exhibit "A”.
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The termination of a lengthy work stoppage at the Rosita smelter in Mexico, operated by the American Smelting and Refining Company, promised to add between 25,000 and 30,000 tons of slab zinc to the Western Hemisphere supply, 90/ but it presently developed that a sizable portion of this tonnage was already under contract to "a nation outside the United States.” While 0PM officials sought to arrange for purchase of the metal by the RFC, 1168 bars of zinc and a quantity of lead were actually shipped on April 10 to Japan* 91/ The State Department took steps to prevent any further zinc shipments from Mexico to Japan, 92/ and the Priorities Division directed the American Smelting and Refining Company to make deliveries from the Rosita smelter, until further order, only to places within, and for use within, the Western Hemisphere and the British Empire. 93/ Equally prompt action in its own sphere was taken by the Price Stabilization Division of ND AC and March 31 saw the issuance of Maximum Price Schedule No. 3, fixing ceiling prices for scrap »nd secondary zinc, pegged to the price for primary metal. 94/
On the morning of April 17 the Non-Ferrous Metals and Minerals Priority Committee considered a British request for immediate allocation of 5600 tons of slab zinc. This quantity would have to come out of the May reserve pool, which would be based on February production. The British request alone amounted to 9 percent of the February output. 95/ The question of how large the May pool should be was still unsettled when members of the group met with representatives of the Amari cr n Zinc Institute in the afternoon. Dr. Hopkins opened the meeting by announcing that the industry could no longer escape mandatory priorities. He thanked the men who had made up the AZI advisory committee, but made it clear that future meetings of industry representatives must be held in Washington. By mutual consent the AZI Committee was dissolved, and it was agreed that advice from the industry would be received in the future through individuals, who would be summonad to Washington by the Chairman of the Non-Ferrous Metals and Minerals Priority Committee. 96/ The following day the Zinc Pool for May was announced by Stettinius as 17 percent of March production. 97/ By taking March rather than February as a base, the percentage was made to appear smaller, but the actual tonnage to be set aside was equivalent to about 20 percent of the February output. Another press
90/ Memorandum, John A. Church to W. L. Batt, March 7, 1941.
21/ Reported by Military Intelligence. See memorandum, Edward Browning, Jr., to George M. Moffett, May 8, 1941. Also, letter, George C. Heikes to W.L. Clayton, Deputy Federal Loan Administrator, April 11, 1941, and Clayton’s reply of the same date.
22/ Memorandum, Erwin Vogelsang to Edward Browning, Jr., May 13, 1941.
22/ letter, E.R.Stettinius to American Smelting and Refining Company, April 19, April 21, and May 2, 1941»
94/ NDAC Press Release, PM-219, March 31, 1941«
25/ Minutes, Non-Ferrous Metals and Minerals Priority Committee, April 17, 1941.
26/ Ibid., May 1, 1941, Exhibit ”A”.
97/ 0PM Press Release, Hi-295, April 18, 1941.
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release on April 22 announced that the whole zinc situation would be recanvassed, and that the possibility of a mandatory priority system would be investigated. 98/
The decision to bring zinc under mandatory priority control had in reality already been taken, and a general meeting with members of the industry on May 1 merely confirmed the course chosen* The task of drafting an order to that effect was delegated to a zinc subcommittee, appointed on May 9» The original members were Paul M. O’Leary, Chairman, Irwin B. Cornell, and Paul Holden of the OPM Bureau of Research and Statistics. 99/ The personnel soon changed, however, with O’Leary being dropped and Holden becoming chairman, while Dr. Hopkins, Donald H. Wallace and John D. Sumner of OPAGS, and E.V.Gent and Howard I. Young of the AZI were added. Maurice Heckscher of the Priorities Division Legal Staff served as legal advisor. 100/ A preliminary draft of the order was ready by May 15, and it was agreed, at Cornell’s suggestion, that the effective date should be July 1. The order was to be issued, however, as quickly as possible, to give the industry time to prepare for the change. 101/
Although the AZI industry advisory committee had been dissolved, a group of industry representatives continued to meet weekly with Church and other OPM officials to advise on the allocation of the reserve pool, which grew in importance as it grew in size. The June percentage was fixed at 22 percent of April production, and was announced on May 26 to quiet rumors that it might reach 50 percent. 102/
While the zinc order was being prepared, arrangements were made for the Reconstruction Finance Corporation to lay in a stockpile of zinc concentrates, against the day when greater smelting capacity would be available. The tentative goal was set at 100,000 tons, which was to be purchased by the Metals Reserve Company from stocks available in Argentina and Australia. 103/ The Subcommittee was still at work when the President’s proclamation on May 27 of an unlimited national emergency set Amy and Navy planners to considering anew their requirements for critical materials. The'stockpiling
28/ OPM Press Release, Hi-304, April 22, 1941.
99/ Memorandum, S.S.Stratton to Messrs. O’Leary, Holden and Cornell,
May 9, 1941.
100/ Minutes, Zinc Priority Subcommittee, May 21, 1941.
101/ Minutes, Non-Ferrous Metals and Minerals Priority Committee,
May 15, 1941.
102/ Ibid., May 22, 1941. Also OPM Press Release, PM-458, May 26, 1941.
103/ Letters, W.L.Clayton to John A. Church, April 30, 1941; A.I.
Henderson to W.L.Clayton, May 12, 1941.
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program took on new significance, and the Non-Ferrous Metals and Minerals Priority Committee was asked by its Navy representative to curtail civilian consumption if necessary to build up the stockpile. 104/
On June 5 the zinc order was reviewed with the industry representatives ; it was issued on June 10 as General Preference Order M-ll, to be effective from the first of July. 105/ The announcement indicated a shortage of zine for 1941 of between 215,000 and 275,000 tons. The issuance of the zinc order was followed within a week by an 0PM decision to increase stockpile requirements to a three-year basis, and a preliminary list was sent to Jesse Jones on June 17, 1941» The list included 150,000 tons of zinc concentrates. 106/
General Preference Order M-ll provided that all defense needs for metallic zinc, whether primary or secondary, for zinc oxide, and for zinc dust should be filled before any nonrdefense requirements were met. Defense orders were to be given priority ratings of'A-10 or better, and orders bearing lower ratings, or none, were to be deferred until deliveries for defense purposes were made. The reserve pool was to be continued, and zinc oxide and dust were added to it, for special allocation by the Director of Priorities. The order also restricted the accumulation of zinc by consumers beyond the inventory normally carried. 107/
An amendatory order issued June 28, 1941, provided that the balance of production, after the pool allotment had been set aside, should be pro-rated by each producer among those to whom he was committed for the given month, Including both defense and non-defense orders. When Priorities Regulation Number 1 was issued on August 27, requiring that defense orders be filled before those for civilian goods, the zinc industry was granted a special exception. Zine producers were permitted to refuse defense orders if acceptance would leave them without the means of equitably fulfilling their commitments, and buyers turned away on these grounds were to go to OPM for an allocation from the pool. 108/ The Compliance Section 104/ Minutes. Non-Ferrous Metals and Minerals Priority Committee~ May 29, 1941»
105/ Minutes, Priorities Division, Senior Staff, June 5, 1941« OPM Press Release, Hi-540, June 11, 1941»
106/ OPM Document 43«
107/ OPM Press Release, PM-639, June 30, 1941« For the remaining
months of the year the zinc pool was made up as follows:
Month(1941) Metallic Zinc Zinc Oxide 2 Inc Dust
July 22% of May production 10% of May prod. none
August 27% of June " 10% Of June " n
September 27% of July " 10$ of July • N
October 27% of August " nona N
November 31$ of • " 10% of August n n
December 29% of • n none w
108/ Interpretation with Respect to General Preference Order No. M-ll
September 15, 1941J Memorandum, John A. Church to All Producers and Fabricators of Zinc, September 15, 1941«
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objected strenuously to the exception, but the Zinc Branch reported that the order was working smoothly and with a minimum of dislocation, and wanted to keep it that way. 109/
The order was again amended October 16, this time to shift responsibility for the reserve pool from the smelter to the owner of the ore smelted. 110/
Priority Control of Lead.— Neither the Office of Production Management nor the lead industry anticipated any shortage of lead at the time the metals and minerals program was organized in January, 1941« No less an authority than Clinton H. Crane, President of the St. Joseph Lead Company, the largest domestic operator by a wide margin, had seen in the price rise during the latter half of 1940 only "the desire of the sellers to get more money.* He saw no physical shortage whatever, and thought smelting capacity adequate for any demand. Ill/ Crane spoke for the industry as a whole, and his conclusions met with the general approval of the government officials concerned. 112/
No lead specialist was assigned on the original 0PM staff, and none -seemed to be needed. Consumption rose steadily during the first quarter of 1941, with lead being used as a substitute for zinc, copper, and aluminum, but remained well within the productive capacity of the industry. The passage of the Lend-Lease Act early in March, however, forecast additional requirements of undetermined extent. At the same time the first Preference Rating Order was being prepared, placing aluminum under mandatory priority control and cutting back the production of aluminum foil to 10 percent of the 1940 average. Lead was the most available substitute, and a sizable increase in consumption for this purpose was also in prospect. There was still no shortage of lead, but a few individuals connected with the minerals program of 0PM were beginning to wonder whether some study of the situation was not in order. Among them was Dr. Leith, who asked Erwin Vogelsang, consultant on tin since June of 1940, to take responsibility for lead.
Vogelsang was a former metal broker and ore buyer, and a past president of the National Metal Exchange, later part of the Commodity Exchange. Early in 1941, after discussion of the lead lój/Memorandum, Milton Katz to John P. Gregg, October 20, 1941. HQ/ Amendment to General Preference Order M-ll as amended, October 16, 1941»
111 / c. K. Leith, Memorándum on the lead situation, November 12, 1940. 114/ See, e.g., Memorandums, D.H.Wallace to R.G.Cleveland and Erwin Vogelsang, November 30, 1940; John A. Church to W.A.Harriman, January 15, 1941; Church to Charles B. Henderson, January 30, 1941.
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problem with George M. Moffett* Metals and Minerals Chief under Industrial Materials* and A. I. Henderson* Deputy Materials Director* lead was formally assigned to Vogelsang^ jurisdiction* 113/ One of his first acts was to solicit the assistance of W.R.Ingalls* Director of the American Bureau of Metal Statistics* in compiling reliable figures for lead production and consumption* H4/
Lead was placed under export control on March 24, 1941, more to keep American supplies from falling into Axis hands than from any need for conservation; and the possibility of preclusive buying was Under consideration during the same period* 115/
The price of lead, meanwhile* continued to rise, reaching 5.850 on March 26« The Price Stabilization Division was concerned, and so was the industry* On April 4 Carl G* Holmquist and Donald H. Wallace interviewed Kenneth C* Brownell* Vice President of the American Smelting and Refining Company. As the largest custom smelter in the business* it was this firm that normally fixed the price for the industry* Holmquist reported the interview in part as follows:
"Mr. Wallace and I interviewed Mr* Brownell* He said that the high buying wave in lead had continued for a much longer than usual period; that in their position as trustee for those whose lead the American Smelting Company sells* they would normally increase the price to 60 now* Mr. Wallace then referred the matter to Mr* Henderson* who said that the Price Stabilization Division did not want the price of lead increased* Mr* Brownell then said it would very much simplify their problem if a ceiling price were placed on lead* and he suggested the price of 60. There was some discussion as to whether 60 was the proper ceiling price* Mr* Brownell maintaining that everybody expected the top to be 60 and that the trade had always considered the price ratio between copper and lead as two to one. However* he made it clear that he was not as much interested in what ceiling price was fixed as he was that a ceiling price be established« We told him that we wanted to study the situation and he then requested that a release to the press be given immediately so as to relieve him of any criticism from his clients for not raising the price.” 116/
113/ Statement of Erwin Vogelsang to the author* January 25* 1944* memorandum* C. K* Leith to James W. Fesler, March 2* 1944.
114/ Erwin Vogelsang to W* R. Ingalls* March 19* 1941; Ingalls to Vogelsang* March 20* 1941«
115/ Office Memorandum* Erwin Vogelsang to George M. Moffett* March 31* 1941 (Weekly Report).
116/ Memorandum* Carl G. Holmquist to Office Files, April 5, 1941«
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The next day Leon Henderson publicly asked lead producers to 'hold the price at 5.85£, indicating his belief that domestic production and available foreign supplies were adequate to meet current and anticipated consumption. 117/
There was still no foreseeable shortage on May 1, when the provisions of General Metals Order No» 1, designed to prevent accumulation of excessive inventories, were made applicable to lead» 118/ The metal first appeared on the Priorities Critical List a week later, 119/ and before the end of the month lead was also recommended for stockpiling. As Vogelsang expressed it, "While this office has not seen the need for a lead stockpile heretofore, it is now becoming apparent that consumption is increasing at a rapid rate, and it is well to be prepared for eventualities»* 120/ He therefore proposed that the Metals Reserve Company acquire from 50,000 to 100,000 tons of lead.
•
The reasoning behind this sudden concern for lead supplies was the possibility that imports might be cut off by submarine activity or by Sack of shipping space» Only about 60 percent of the lead used in the United States is normally produced from domestic ore, and while there was very little danger that rail-borne imports from Canada or Mexico would be curtailed, it appeared entirely possible in the Spring of 1941 that ocean traffic of all kinds might be seriously menaced even though the United States managed to keep out of the war»
By summer the rate of consumption had risen to 75,000 tons a month, of which domestic production was able to supply only slightly over 50 percent» The particular problem presented was not, as in the case of zinc, one of allocating an inadequate supply, but rather one of ensuring that supplies would not become inadequate at some future date» The emphasis of the lead program was accordingly on increasing domestic production and stepping up the rate of imports» Every effort was made to assist exploration and development work, both in the United States and in countries accessible by rail, and provision was made for the prompt granting of priorities for mining machinery and supplies. At the same tine the RFC entered into negotiations for the purchase of large quantities of foreign lead, to be added to the government stockpile» By absorbing a portion of the import duty the RFC was able to offer a better price for foreign metal. The situation was complicated, however, by the consideration then being given by Congress to special tariff legislation, which was designed to waive all inport duties on metal imported for defense use»
117/ OEM Press Release. PM-236. April 5. 1941.
118/ OPM Press Release, PM-344, May 1, 1941» Memorandum, Vogelsang to Leith, May 9, 1941.
119/ OPM Press Release, PM-380, May 8, 1941.
120/ Memorandum, Erwin Vogelsang to W, L. Clayton, May 22, 1941.
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Pending a decision on the tariff question, foreign producers were withdrawing*from the market* 121/
The possibility of maintaining adequate supplies and avoiding some form of priority allocation depended on the prompt purchase of foreign metal* 122/ From the long-range point of view the expansion of domestic production offered a more certain solution, but the prospect of tariff reductions on imported lead offered no incentive for developing the higher-cost domestic sources* Leith estimated that United States production could be increased by 5,000 tons a month if the price were raised to 6-1/2#, and the question was laid before OPM and OPACS for consideration* 123/
Before any decision on the price question was reached, Federal Loan Administrator Jesse Jones announced the purchase of 225,000 tons of Canadian and Mexican lead for delivery during the second half of 1941» 124/ In anticipation of the purchase, Vogelsang . had already received applications for 25,000 tons of the metal. 125/ It was clear that consumers were having difficulty in getting adequate supplies* To clarify the picture a questionnaire was prepare® cal11 ng for information on consumption over the past seven months, while consumers were asked to go to their regular dealers before requesting allocations of lead from the Metals Reserve Company. The first of the questionnaires to be returned showed a 100 percent increase in consumption between January and July, 1941, and for the first time the possibility of a general allocation plan for lead was seriously considered. 126/
Earlier action than would perhaps otherwise have been called for was precipitated by the erratic procurement policies of the Amy and Navy. Late in July it was called to Vogelsang’s attention that the Frankford Arsenal had purchased 3,000 tons of lead at prices ranging from 6.37J# to 7.30#. 127/ The lead consultant lost no time in bringing the matter before the Purchases Division:
"This purchase brings up the question of the entire purchasing policy of the Army and Navy in so far as the
121/ Memorandum, Erwin Vogelsang to C.K.Leith, June 20, 1941; letter, Vogelsang to C.B.Henderson, June 20, 1941.
122/ Minutes, Non-Ferrous Metals and Minerals Priority Committee, June 26, 1941«
122/ Memorandum, C.K.Leith to T.W.Page, June 30, 1941; Minutes, Commodity Group 1, Staff Meeting, July 15, 1941.
OPM Press Release, PM-758, July 21, 1941»
125/ Minutes, Commodity Group 1, Staff Meeting, July 11, 1941*
126/ Minutes, Top Staff, Industrial Division No. 3, July 25, 1941.
122/ Memorandum, Erwin Vogelsang to J. McPherson, July 25, 1941.
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Arsenals and Navy Yards are concerned; that is, the purchasing offices of the two services outside of . Washington» This is not the first time by any means that a purchase has been made by either Procurement Officers or Quartermasters in locations outside of this City at prices which bear no relation either to the market or to the ceiling price which has been established by OPACS.
"It seems to me that this calls for prompt action on the part of OPM and probably OPACS to see to it that purchases of this sort are made at proper prices»
"Another point which should be investigated is why do these agencies buy materials in such large quantities when a large part of the material is perhaps not used for a year» With present shortages of materials this only tends to aggravate an already serious situation» It furthermore makes it very difficult for industry to quote unless they go short of the market, and they have no idea at what price they will be able to get the raw materials for future deliveries«"
He took occasion also to point out that the material in the hands of the Metals Reserve Company was available for allocation by OPM, wnd could be drawn upon whenever lead was not available on the open market at a reasonable price. 128/
Two days after the above quoted letter was written the met ter was di scussed at a staff meeting of the OPM minerals branches, following which Vogelsang expressed a desire for some kind of order on lead. The industry was also willing to submit to allocation. 129/ Two weeks later the order was reported as in preparation, though there was still no shortage of proportions sufficient to justify severe restrictions. 130/ Imports, however, were al ready being allocated, and the order would put all supplies on a uni form basis. The order was ready early in September, was cleared with the Army and Navy Munitions Board, OPACS, and the interested branches of OPM before the end of the month, and was issued as General Preference Order M-38 on October 4. 131/
128/ Memorandum, Erwin Vogelsang to Harry Camp, Assistant Director of Purchases, July 26, 1941»
129/ Minutes, Industrial Subdivision "E", July 28, 1941.
130/ Minutes, Priorities Board, August 14, 1941.
131/ OPM Press Release, PM-1302, October 4, 1941.
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The lead order required refiners and dealers to file with the Director of Priorities each month a schedule of proposed shipments for the following month« A reserve pool, similar to the zinc pool, was to be created, a stated proportion of the monthly production being set aside for this purpose, and defense orders were to have preference for the remaining output« Metal in the reserve pool, and all lead released by the Metals Reserve Company, were to be allocated by the Director of Priorities« The first lead pool was established for November at 15 percent of production for that month, and was fixed for December at 15 percent of the October output«
Efforts to Increase Production,—By July of 1941 the defense program was swinging into high gear, and a more efficient organization was required« The Non-Ferrous Metals and Minerals Priority Committee held its last meeting on June 26, after which it surrendered its functions to the first of three commodity groups« Stettinius remained Director of Priorities, but became also the Director of Commodity Group Number 1, to which non-ferrous metals were assigned« The Group was subdivided into Sections« Zine came under Section 4, of which Church was Chief, and lead under Section 6, headed by Vogelsang« Toward the end of July Commodity Group Number 1 was supplanted by Industrial Subdivision "E", and the Sections became Branches, but the personnel remained the same« George C. Heikes served as Assistant Branch Chief under Church, and Spencer K. Butterworth held a comparable position under Vogelsang«
With zinc under mandatory priority control, the first major question faced by the new organization with respect to that metal was expansion of the domestic supply« It was generally agreed that this could not be done without a price increase or some form of subsidy« The best prospects for increasing mine output lay in the Tri-State district, comprising parts of Missouri, Kansas, and Oklahoma« which produced a third of all the zinc mined in the United States« The Tri-State ore bodies, however, were already in an advanced stage of depletion« Large reserves of metal-bearing rock, containing both zinc and lead, remained, and could easily be mined, but the grade was too low to justify working it unless a materially higher price could be had« This situation had been called to the attention of the Advisory Commission to the Council of National Defense as early as December, 1940, and was again brought up in April of 1941« 132/ It was estimated that the district could increase its output by 25,000 tons of zinc a year at a 9# price, 133/ but the operators wanted a straight advance, not a bonus or premium«
132/ Letter, Evan Just, Secretary of the Tri-State Zinc and Lead " Ore Producers Association, to Donald H. Wallace, April 21, 1941» 133/ Letter, R« E. McConnell to Pope leatman, May 13, 1941«
83*898 p40 bu
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The Office of Price Administration and Civilian Supply began studying the question before the end of June, and the Copper-Zinc Branch of OPM began its own investigation at about the same date« 134/ The two groups soon got together, and Heikes reported progress to a staff meeting of the Industrial Subdidivison on August 8. He thought that some action would be imperative in the near future, but the type of action to be taken was not agreed on« The OPM experts favored a flat price increase, but OPACS wanted a subsidy to sub-marginal mines« 135/ Heikes elaborated his position a few days later, arguing that the 7-1/4# price did not allow enough profit to cover development work on new ore bodies« He cited one Tri-State operator who paid $5 «55 a shift to machine miners, and was faced with a union demand for a dollar a shift increase« The additional cost would run to $20,000 a month, which would necessitate closing two mines« Others were in the same category, and Heikes feared that many Tri-State mines would close unless some price action were taken within two weeks« He did not think it OPM’s place to fix a price, but he urged that OPACS be asked to do so without delay« He proposed also that the government take over and operate the marginal mines« 136/
A 35-man Copper and Zinc Advisory Committee had meanwhile been formed, with Church as presiding officer« Among the members were E.C.Hegeler, B.N. Zimmer, K.C.Brownell, M.L.Havey, I.H.Cornell, Howard 1« Young, H.L.Erlicher, and E.V.Gent, all of whom had at one time or another advised OPM on its zinc program« 137/
Heikes* appeal on behalf of the zinc producers brought prompt action from OPM« A letter to Leon Henderson, Director of OPACS and soon to be Price Administrator, was drafted on August 15, and was sent over Knudsen*s signature three days later« The zinc situation was reviewed in some detail, and the point was made that expanding smelter capacity was relying for much of its raw materials on foreign concentrates, which might at any time be cut off by lack of shipping space« The major emphasis, however, was on the needs of the Tri-State District, where even the existing production level could not be maintained without a higher return, and where costs were steadily rising due to competition for labor from defense plants and Army cantonments in the area« Knudsen*s letter continued as follows:
**At distances varying from 15 to 120 miles of the heart of the Tri-State District, six new defense plants and
134/ Memorandum« C.K.Leith to R«E. McConnell, July 5, 1941« 135/ Minutes, Industrial Subdidi^feion ’’E’*, Staff Meeting, August 8, 1941» 136/ Ibid«, August 13» 1941»
137/ OPM Press Release, PM-89O, August 7, 1941.
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cantonments are projected, estimated to require altogether from 25,000 to 30,000 men for construction and over 20,000 for 3-shift operation when completed. At this moment miners in the district are asking for an increase of a dollar a day, and one of the large mining companies is considering an immediate voluntary increase of this amount, to keep their skilled mine labor on the job. But every increase in cost, in a district like the Tri-State, throws a certain tonnage of reserve ore into the marginal class, and throws a tonnage of marginal material into the sub-marginal class, definitely too low-grade to mine. The wage and general cost situation has become acute, and we feel that under present conditions there is only one corrective, namely, an increase in the price of zinc.
"In summary, we have first to safeguard present production; second, to stimulate that production to expand; and third, to look to the future and make possible the intensive search for new ore, in order to safeguard the production of the years 1942 and 1943» The relations of price and output in the zinc and the copper mining industries are radically different. In copper, the ore reserves are largely outlined and often partly developed. In the Tri-State zinc field, which is the most important single contributor of Prime Western grade, the search for new ore is a vital factor in maintaining production, and requires additional financial stimulus.
"We therefore recommend that the price of zinc be permitted to increase to a level high enough not only to safeguard present production, but to make possible a reasonable increase in output. Although the data we have at hand are not adequate to permit a fine determination of the exact amount of increase necessary, the present situation is so extremely serious and the outlook so much worse that we urge your immediate consideration of a price of nine (9) cents per pound for Prime Western, basis East St. Louis, with the customary differentials for higher grades. Since a higher price will undoubtedly serve to encourage zinc production in many fields other than the Tri-State, we do not advocate limiting the increase to any particular district, and do not at this time advocate special prices to marginal producers." 138/
Before Henderson1s reply, dated September 6, 1941, was received, a major reorganization of 0PM had been carried out. The
138/ William S* Knudsen to Leon Henderson, August IS, 1941; Minutes, Industrial Subdivision "E", Staff Meeting, August 15, 1941«
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Supply Priorities and Allocations Board was created, with authority over the ORI Council, and OPACS became the Office of Price Administration. Stettinius resigned to become Lend-Lease Administrator, and was succeeded as Director of Priorities by Donald M. Nelson» The functions of OPM were divided into six general divisions. A new Materials Division, under William L. Batt, took over the industrial groups from the Priorities Division. The Copper-Zinc Branch and the Tin-Lead Branch, without change of personnel, were placed under Deputy Materials Director Philip D. Reed. 139/
Henderson delayed almost three weeks in answering Knudsen’s appeal for a zinc price increase, and the answer, when it came, was thoroughly equivocal. He acknowledged the seriousness of the situation if 1942 production was to be assured, but he had not yet decided what to do about it. "As soon as it is possible for this Office to arrive at a sensible decision with respect to price policy, you may be assured it will do so." 140/ Members of Henderson’s staff, however, had just completed an extensive field survey of the Tri-State District. The Price Administrator transmitted their report to Knudsen by memorandum of September 8, proposing at the same time that the question be discussed at a meeting of the Price Administration Committee scheduled for the tenth. The report was long and detailed, but the recommendations of its authors were succinctly stated: To maintain the then current rate of production in the Tri-State during 1942 the price of concentrates would have to be raised to ”at least $55 per ton, and preferably to $58.50, at the earliest possible date.” If production in the area was to be increased by any substantial percentage, steps should be taken "within the next two months to establish special inducements to bring forth incremental production during 1942 and thereafter." 141/ For the first seven months of 1941 the concentrate price at Joplin had averaged about $4^.21 per ton. 142/
The OPA report was discussed as scheduled at a meeting of the Price Administration Committee on September 10, tut no decision was reached, and the question was carried over to a subsequent meeting on October 2. Henderson announced that a zinc crisis was near, but if he had any clear idea as to what action should be taken he did not express it. He had persuaded the Eagle-Picher Mining and Smelting Company, which set the wage scales for the Tri -State District, to postpone a contemplated wage increase for a few days, but the increase could not be deferred for long, and the added cost could be absorbed only by cutting down marginal operations. Donald H. Wallace suggested direct government purchase of all Tri-State concentrates at $55 a ton,
139/ 0PM Press Release. PM-1Q45. August 29. 19411 Organization Chart, Materials Division, September 16, 1941*
140/ Letter, Leon Henderson to William S. Knudsen, September 6, 1941«
141/ OPA Report, "Price Policy and the Zinc Concentrate Situation," p. 5 142/ Metal Statistics. 1942, p. 539.
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to be resold at $48, and a lengthy discussion followed, but the meeting again broke up without action« 143/
The problem of increasing zinc production had meanwhile come before the new Supply Priorities and Allocations Board at its second meeting, September 9, and the Executive Director of the Board, Donald M, Nelson, had been asked to report at the next meeting on the maximum amount of zinc obtainable under an all-out program of defense and to recommend methods of procuring it« 144/ Documents submitted by Edwin B, George, Coordinator of Industrial and Commodity Research, recommended the development of 25,000 to 50,000 additional annual tons of slab zinc production under arrangements then being discussed, presumably including the contemplated price increase; and proposed the elimination of such non-defense uses as could be dropped without serious disruption of employment. 145/
The tight labor situation in the Tri-State District forced the issue, and on October 10, 1941, the Office of Price Administration authorized a one cent increase in the price of zinc. The new price was 8-1/40 a pound for Prime Western slab at East St, Louis, with customary differentials for other grades« 146/ In the course of the next two months ceiling prices for scrap and secondary zinc, zinc dust, and zinc products were brought into line with the new base price for the primary metal.
Immediately after the announcement of the zinc price increase rumors of a similar increase in lead prices became current« The Wall Street Journal started the ball rolling in its issue for October 10, the very day the zinc price schedule was issued:
”The zinc increase may foreshadow an increase in lead prices, however, OPA officials admitted. These two metals are often mined together and, in mines where the lead content far outweighs the zinc, the increase in zinc prices will not compensate producers for higher wages or overtime pay if they increase their operations.’1
As the rumors spread, scrap dealers began hoarding lead in anticipation of a price rise, and it became necessary for OPA to interfere. On November 5, 1941, Leon Henderson announced that the 5.850 price was ’’adequate to support a substantial increase in domestic output,”
Minutes, Price Administration Committee, September 10 and October 2, 1941.
144/ SPAB Minutes, Meeting II, September 9, 1941.
145/ SPAB Document 2a (IV), dated September 8, 1941.
0PM Press Release, Htf-1348, October 10, 1941«
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pointing out that the bulk of the industry was "not operating at anything like full capacity." 147/ Chi the same day that Henderson*s statement was issued» however» his Deputy Administrator» John E. Hamm» told the Price Administration Committee that» should the lead situation grow more serious and the industry be forced to go on a 5 or 6 day week» a price adjustment would be made. 148/ It could hardly have been unknown» either to Henderson or to the industry» that an increase in the work week was in immediate contemplation» and Hamm*s qualification of the press statement therefore amounted to a nullification of it.
On November 7 a telegram from the dual head of OPM, Knudsen and Hillman »was delivered to all lead producers and lead miners in the United States:
"The urgency of the defense program requires that your mining properties be operated at their maximum productive capacity, 24 hours a day, six days a week and where possible, seven. You are requested to take all necessary steps to this end and if necessary acquire such additional equipment to improve the operating conditions of the mines that will result in increased production. Please advise us if we can be of any assistance.” 149/
The industry responded favorably and most of the mines did increase their hours of work, but they asked anew for a price increase as compensation for the higher costs consequent on payment of overtime wages and the tapping of less profitable ores*
Lead consumption had increased during the latter part of the year to between 85,000 and 90,000 tons a month, or a rate of better •than a minion tons a year. The maximum productive expectancy at current prices was placed at 500,000 tons a year, but total supply, assuming continued imports and normal return of scrap, was expected to meet or even to exceed requirements. 150/ Materials Director William L. Batt explained the situation to the Supply Priorities and Allocations Board, on November 18, but requested no action at that time.
Conservation and Limitation Orders,—After the middle of 1941 the need for conserving supplies of critical materials was too great to permit reliance on voluntary methods. During the summer, plans for 1941»
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HI. THE WAR PROGRAM: INCREASING PRODUCTION December 1941 - December 1942
After the Japanese attack on Pearl Harbor and the formal entry of the United States into the war the efforts of the defense period seemed trivial in comparison to the task that lay ahead. The shipping difficulties so long anticipated as possibilities became immediate facts to reckon with» Controls over supply and distribution of raw materials which had up to that time aimed at disturbing normal business as little as possible were made more drastic and complete* Military requirements were enormously expanded to meet the needs of a prospective fighting force larger than any before contemplated in the Nation’s history* There was no longer any time for bargaining* It was necessary to increase domestic production of critical metals immediately, by whatever means would most effectively serve the turn*
The Premium Price Plan*—Early in August, 1941, the Labor Division of OPM had proposed a two-price system as a means of expanding production of the non-ferrous metals, 162/ and a similar recommendation was made in the OPA report on the Tri-State zinc situation in September* 163/ The possibility of establishing a two-price system for copper, lead and zinc continued to be discussed through the fall of 1941, but no effective action was taken until further-discussion had been rendered academic by the impact of actual war*
On December 11, 1941, the two-price system received the blessing of organized labor when Ben Riskin, Director of Research for the International Union of.Mine, Mill and Smelter Workers, offered testimony in support of it before the Truman Committee; 16V and on the same day Leon Henderson proposed a premium price plan for lead and zinc to the Supply Priorities and Allocations Board?
nI believe it is imperative to take immediate steps for effective implementation of a program which will provide a large increase in domestic production of zinc and lead without inflationary price movements and which will assure an
162/ Memorandums, J. Douglas Brown to Sidney Hillman and to E* R* Stettinius, Jr., August 4, 1941; Allen Buchanan to J* Douglas Brown, August 7, 8, and 12, 1941» For a more detailed account of the whole premium price system see Report No* 4, Policy Analysis and Records Branch, Office of the Executive Secretary, War Production Board, Evolution of Premium Price Policy for Copper, lead and Zinc*
163/ See page 35 above.
I64/ United States Senate, 77th Cong., 1st Sess., Special Committee Investigating the National Defense Program, Hearings, part 10, p. 4215 (December 11, 1941)•
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equitable and desirable allocation between competing civilian demands. I wish to propose for consideration of the Supply, Priorities and Allocations Board the program outlined below. This is not a program evolved overnight after the outbreak of war. The program and the underlying information and procedures by which to administer it have been developed by my staffs over the past several weeks. It was scheduled for recommendation this week. The events of the last few days make it doubly imperative that a program of this sort be put into effect immediately and expedited rapidly.
1. Price and Production
“According to estimates of my staff domestic output of zinc and lead can be expanded by about 30 percent through a simple differential price arrangement whereby the Government buys additional production at a price sufficiently liberal to stimulate maximum production. Present milling, smelting, and refining facilities in lead are, in general, adequate to process such an expanded mine production. A considerable increase in mine output of zinc is required to assure capacity operation of smelters in the latter part of 1942 and in 1943* Additional zinc smelter capacity is being provided and substantial further additions are in prospect.
“Each producer of lead and zinc should be assigned a quota based on recent production with some account for relative ability to run six or seven day operations. This quota is to be sold at the ceiling price. The Metals Reserve Company should offer to buy, for a period of two or three years, all output above these quotas at a fairly high price. Equitable quotas could be established in short order.
’’This scheme avoids the intolerable delay necessitated by purchase negotiations based on cost-plus. A large part of the potential increase in output of zinc and lead is from mines now operating. Calculations of cost of such increments of potential production are difficult, disputable, and very timeconsuming.
2. Civilian Allocation
"Some consumers of lead and zinc, who desire larger supplies than they are now able to obtain under existing regulations, have requested that they be permitted to purchase output of high-cost mines at prices above the ceiling. They desire assurance of a supply for a considerable period of time and are prepared to give financial assistance to the mines, or purchase the mines, if necessary. It would be unwise to accede to this request. The necessities of defense requirements and equitable
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civilian allocation preclude any long-time commitment of assured supplies to less essential uses. Moreover, development and administration of criteria to distinguish those consumers who should pay prices above the ceiling and those who should not would be fraught with difficulties» And in a bad shortage situation all who desired additional supplies would bombard us with requests to buy above the ceiling.
ttI believe the Metals Reserve Company should purchase all incremental production and sell it, according to allocation regulations, at the ceiling price absorbing the loss involved. This is the only clear-cut, effective solution to the problem — except insofar as Metals Reserve Company can dispose of the high-priced metal without loss to defense procurement agencies•" 16$/
The proposal was discussed at a meeting of the Supply Priorities and Allocations Board on the 16th, and was unanimously approved, the Board recommending that OPA, 0PM, and the Metals Reserve Company "cooperate in the development of a policy of paying more than the ceiling prices for increased production of lead and zinc and take all necessary steps to increase the supply of these metals166/
Henderson’s proposal to raise the ceiling price of lead, made at the same meeting, met with a less cordial response. Some such move had been generally anticipated since early November, when the work week in the lead industry had been lengthened, but to raise the base price in addition to granting premium prices for production in excess of a quota seemed like overdoing it. The International Union of Mine, Mill and Smelter Workers was already on record against any lead price increase that was not specifically tied to increased production, 167/ and the Labor Division of 0PM took a similar position. The OPA proposal, embodying both the premium price plan and the increased ceiling for lead, was outlined in a memorandum by Donald H. Wallace, dated December 22, 1941, and was discussed with representatives of 0PM on the 27th. Quotas were to be assigned on the basis of average monthly production during the first 9 months of 1941* Each operator was to receive the ceiling price for his quota of metal, but for all output above the quota he would receive 2-3/4^ in addition to the ceiling price for zinc and 2-3/4# in addition to the ceiling price for lead. Certain large operators, however, were to be asked to negotiate quotas, and it was specifically proposed that the quotas for' four leading lead producers be set at 20 percent above the actual output of the base period.
165/ Memorandum, Leon Henderson to Donald Nelson, December 11, 1941, SPAB Document 18f. See also memorandum, Leon Henderson to William S. Knudsen, December 11, 1941»
166/ SPAB Minutes, Meeting XVIII, December 16, 1941.
167/ United States Senate, 77th Cong., 1st Sees., Special Committee Investigating the National Defense Program, Hearings, part 10, pp. 4214-16 (December 11, 1941).
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To the Priorities Branch of the OPM Labor Division the horizontal price increase plus the bonus payments for over-quota production appeared to be paying twice for the same output* As they expressed it after the meeting:
"We asked Mr* Wallace and his associates why the base price was being raised* We were told there were some mines not covering costs at present prices (5*850)* We suggested that instead of raising the price and the quotas of the larger producers, but fixing the quotas of the smaller producers at the actual production of the base period, that the base price stay fixed at 5*850 and that the quotas of high-cost producers be cut below the actual average to the extent necessary to raise the weighted average price realization in line with costs* The sole objection to our proposal was that, administratively, it was easier to raise the quotas of a few large producers than to adjust downward the quotas of a large number of small producers*
"We pointed out that by using the overall price increase to help a few small producers, they were also benefitting financially many small producers who admittedly did not need the increased financial incentives* Furthermore, if production were increased by these small producers they would also get a bonus price for the increased production. There is also some danger that the price Increase not being contingent on increased production would tend to cause resort to mining lower grade ores and retarding production*
"We asked Mr. Wallace specifically whether the lead price was to be increased because the zinc price had been raised in November, the answer was "no". We also pointed out that this would mean an increase in the price of secondary lead and probably be passed on to the consumer. This was slurred over and not denied*" 168/
The objections of the Labor representatives were summarized in a memorandum dated December 31, 1941s
"(a) An over-all price increase does not guarantee that output will expand but does promise substantial wind-fall profits to seme operators whose present profits are substantial*
/Alien Buchanan and Samuel Lipkowitz /* OPA Proposal for Bonus Prices for Lead and Zinc*
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M(b) No incentive to expand production is provided by the bonus price because it does not come into effect until production has been expanded 20 percent above the prevailing level* An increase of 20 percent is probably as much as can be expected in view of the physical limits upon expansion. As pointed out in (a) above, the over-all price increase does not guarantee expansion up to 120 percent*
w(c) The over-all increase in price has inflationary tendencies in that prices of secondary lead, lead products, as well as the prices of lead imports, will be affected*
“(d) The over-all price increase will tend to disturb existing wage-price relationships and provide automatic wage increases where the sliding scale system prevails* The International Union is opposed to the sliding scale principle and bases its demands for wage increases on the operators* ability to pay as reflected in profits* An over-all price increase would tend to encourage support of the sliding scale as a means to wage increases*w 169/
Another meeting on the problem had meanwhile been held on December 30, which had been attended by Ben Riskin on behalf of the International Union of Mine, Mill and Smelter Workers* Although Sidney Hillman regarded the price question as one for OPA to settle without interference from labor, Riskin made it clear that his Union had a stake in price control, and intimated that should the contemplated increase in the lead ceiling be announced he would not be able to convince the rank and file that further cooperation with OPM was desirable* 170/ The objections of the Labor Division to the lead price increase were passed along to Leon Henderson and William L* Batt on January 5, 1942, together with a strong endorsement of the premium price plan, YJl/
Both zinc and lead producers now favored the bonus plan, and the lead producers favored the price increase for their product, but OPA, under the insistent hammering from labor, had begun to vacillate* Details of the premium price plan, which was broadened to include copper, were worked out in a series of conferences with officials of the Metals Reserve Company during the latter part of December and early January, but OPA did not issue the proposed lead price order* Henderson was still hesitating when Jesse Jones announced the program on January 12, 1942* The premium prices made public by
169/ Memorandum, Allen Buchanan and Samuel Lipkowitz to J* Douglas Brown, December 31, 1941«
170/ Note attached to memorandum last cited*
171/ Memorandum, J. Douglas Brown to Leon Henderson and Wil 1 i am L.
Batt, January 5, 1942*
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the Federal Loan Administrât or, however, included a lead bonus based on the 6-1/2^ ceiling« 172/ Being thus faced with the accomplished fact, a joint press release was hastily issued by OPM and OPA, confirming the lead price increase and explaining the premium price plan« Payments for production in excess of the assigned quotas were to be at the rate of U# for zinc and 9-1/4# for lead, or 2-3/40 above the ceiling in each case« The premium prices were to be paid for a period of 2-1/2 years from February 1, 1942« 173/ The plan was expected to increase lead production by 75,000 tons in 1942 and 125,000 tons in 1943, while the estimated increase in zinc output was placed at 100,000 tons for 1942 and at 200,000 to 270,000 for the following year« 174/
Representatives of the Office of Price Administration and the Office of Production Management began meeting on January 20 to work out a formula for assigning quotas, and detailed instructions to producers of the metals in question were issued on February 9« 175/ The interagency group administering the plan soon came to be known as the Quota Committee*
While the machinery for stepping up production of lead and zinc was being set up the whole defense organization was streamlined to meet the greater responsibilities of total war« On January 16, 1942, the War Production Board was created by Executive Order, with Donald M« Nelson as its Chairman, and OPM was abolished on the 24th of the same month« The Materials Division, under Batt, was carried over into the new organization, and the metals branches remained substantially as they had been, save that zinc achieved independent status through establishment of a Zinc Branch under David A« Uebelacker, who had been in charge of the zinc program since November« Heikes remained assistant chief of the Zinc Branch, and Vogelsang continued as Chief of the Tin-Lead Branch« The Materials Division also included a Mining Branch, and a Stockpiling and Shipping Imports Branch. The allocation of materials and equipment under Lend-Lease was implemented by the creation of a Combined Raw Materials Board, with Batt as the United States member« The Materials Director was also chairman of a newly established Requirements Committee, made up of representatives of the War Production Board, War and Navy Departments, Maritime Commission, Lend-Lease Administration, Board of Economic Warfare, and Office of Civilian Supply*
172/ Letter, Jesse H« Jones to W« S. Knudsen and Leon Henderson, January 12, 1942, SPAB Document 25*
173/ CPM-OPA Press Release, PM-2160, January 13, 1942«
174/ SPAB Minutes, Meeting XXHI, January 15, 1942«
175/ OPA Press Release, PM-2458, February 9, 1942*
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As soon as the pangs of reorganization were over and the War Production Board was geared to its task, the Quota Committee was formally tied into the administrative structure» The Director of Materials was made responsible for carrying out the purposes of the premium price plan, but the actual administration was delegated to the Committee in whose hands it already rested, subject to the concurrence of the Metals Reserve Company in matters within its jurisdiction» The Quota Committee was made up of one representative each from the Copper, Zinc, and Tin-Lead Branches of WPB, and an equal number of representatives from the corresponding organizational units of OPA. 176/
The Facilities Program»—After Pearl Harbor, with defense requirements being re-estimated to meet the prospective needs of total war, the necessity for increasing American zinc smelting and refining capacity was too acute to permit further delay based on no better reason than the fear of postwar overexpansion» Work on projects was pushed as rapidly as possible, and new projects were promptly approved» 177/ A certificate of necessity was granted in December, 1941, for an enlargement of the Josephtown, Pennsylvania, zinc plant of the St. Joseph Lead Company, begun in the previous month, and a further expansion of the same plant was authorized in February, 1942» An increase in the capacity of the New Jersey Zinc Company’s concentrating plant at Palmerton, Pennsylvania, was also declared necessary to the national defense in December, and five-year tax amortization was granted in the same month for additions already made to the American Smelting and Refining Company’s Barber, New Jersey, lead smelter»
It was January, 1942, however, before the new facilities program gained full momentum* In that month a certificate of necessity was granted to the Anaconda Copper Company for major additions to both its electrolytic refineries» The capacity of the Great Falls plant was to be increased by 30,000 tons a year, and that of the Anaconda plant by 15,000 tons» The total cost was estimated at more than two and a half million dollars, and both plants were in operation before the end of the year» A plant expansion undertaken by the United Zinc Smelting and Refining Corporation at Moundsville, West Virginia, designed to increase slab zinc output by 14,000 tons a year, was certified in February, though the plant had begun operation the first of the year»
Numerous smaller projects were approved through the early months of 1942, and by the middle of the year negotiations were in
17$/ General Administrative Order 2-34; Materials Division*
Divisional Administrative Order 516-3» (May 1, 1942)» 177/ Unless otherwise noted, material on expansion of facilities used in this section is drawn from WPB, Statistics Division, Bar Industrial Facility Expansions...Through June 30. 1942: project requests from Materials Division Files; and Memorandum, James Donglap to 0» K* Leith» December 13, 1943» See also Appendix E.
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progress for four more major plant expansions. These were an increase of 13,000 tons in the annual capacity of the Hegeler Zinc Company’s smelter at Danville, Illinois; the erection of a 12,000 ton retort smelter, later enlarged to 18,000 tons, at Dumas, Texas, by the American Zinc Company of Illinois; expansion of the retort facilities of the Eagle-Picher Mining and Smelting Company at Henryetta, Oklahoma, to add 13,000 tons a year to its output; and the construction of new redistillation units at Depue, Illinois, by the New Jersey Zinc Company. This company held patents on a fractional distillation process for converting low quality slab into high grade metal, and while no licenses were issued under these patents, the Company’s announced policy was to add refining units at its own expense as rapidly as they were needed to meet the demands of the defense and war programs. 178/ The total additional capacity contemplated amounted to 132,000 tons a year.
During the first half of the year the Metals Reserve Company also contracted to purchase the concentrate output of various Canadian, Mexican, and Argentine properties, and subsidized the development of a number of zinc mines in the United States. A necessity certificate was also granted to the St. Joseph Lead Company for exploration and development work estimated to cost $1,500,000. On recommendation of the Zinc Branch the MRC also undertook to purchase ore up to 50,000 tons of metal content and 100,000 tons of concentrates from domestic sources in order to avoid offering any discouragement to home production, even though smelter capacity to handle the mine output was not yet available. 179/
A slag treatment plant built by the St. Joseph Lead Company at Herculaneum, Missouri, with an annual capacity of 9,000 tons of slab zinc and 1,500 tons of lead was certified for five-year tax amortization in June 1942, but completion of the Hegeler, Eagle-Picher, and American Zinc Company projects was delayed by a ruling that facilities which could not come into operation before July 1, 1943, were not to be carried out. The policy was intended to divert materials and labor for the immediate needs of the military services, 180/ but it had the effect of temper»ri ly sacrificing long-range output. Some projects were stopped, and others were not approved because of the time factor. The policy was relaxed in September 121/ after it had served its immediate purpose, and longer term developments were again considered, but the major part of the 128/ Memorandum, David A. Uebelacker to H. W. Dodge,'June 5, 1942. 122/ Memorandums, David A. Eubelacker to W. I. Elliott, May 15. 19Z2* Elliott to W. L. Clayton, May 15, 1942.
112/ Letter, President Roosevelt to Donald M. Nelson, May 1, 1942* statement of Harry 0. King to Facility Clearance Board. April 21 1943, Minutes, Meeting 36. p ’
121/ Primary Zinc Producers Industry Advisory Committee, Minutes September 16, 1942. *
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program was already under construction or in the negotiation stage* So much new smelter capacity was authorized, in fact, that it was expected after 1943 to exceed supplies of ore and concentrates* 182/
The Metals Reserve Company continued to grant loans for the development of mine properties, and the Bureau of Mines, with additional funds for exploratory work available after July 1, 1942, pursued its analyses of potentially workable ore bodies with renewed enthusiasm* So active was the Bureau that it was challenged by the War Production Board in October, and accused of entering upon actual mine operation* 183/
Although the Hegeler Zinc Company’s Danville plant expansion, the Eagle Picher Company’s Henryetta smelter, and an ore-testing plant for the Western Metals Company in Nevada were still held up, 184/ the record for the year was impressive* In round figures, 200,000 annual tons of additional smelting capacity had been authorized, at a cost of $20,000,000, and over half of this new capacity was actually in production by the end of 1942* In addition to smelter expansion, nearly two million dollars had been pent or was committed by the end of February, 1943, for the development of more than 200 lead and zinc mining properties in 18 states* 183/
Labor Shortages.—March of 1942 was the month of peak production in the Western non-ferrous mines, but thereafter mine output slowly but steadily declined. The primary reason for the f al ling tonnages of copper, lead, and zinc was a general migration of labor away from the mines. The metal miner earned an average of $37.28 a week for dangerous and difficult work underground, in constant dampness and often subjected to unhealthy temperatures and impure air. Workers in smelters and refineries averaged even less, the figure, being $35.18, although the conditions were somewhat better and the hours ^a little shorter. In comparison with these wage scales construction workers averaged $39.10 a week, while aircraft factories and shipyards on the Pacific Coast paid $45.94 and $53.30 respectively. The work week in smelting and refining averaged only 40.2 hours and in metal mining 42.9 against 47.2 for aircraft manufacture and 49.2 for shipbuilding but the conditions of work and the wages more than compensated for the longer hours. 186/
182/ Combined Raw Materials Board, Zidb Staff Report No. 2, Document 106, November 17, 1942.
183/ Letter, Ferdinand Eberstadt to R. R. Sayers, October 6 and November 12, 1942; Sayers to Eberstadt, November 3, 1942.
184/ Memorandum, Wilbur A. Nelson to H. W. Dodge, December 22, 1942.
185/ United States Senate, 78th Cong^, 1st Sess., Subcommittee on Mining and Minerals Industry, Special Committee to study the
Problems of American Small Business Enterprises, Hearings »part 18, pp. 2434-36. (April 1, 1943).
186/ International Union of Mine, Mill and Smelter Workers, ”Memo on Manpower and Wage Policy”, July 22, 1942.
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Demands of the miners for higher wages had been referred to the National War Labor Board, where they had apparently been sidetracked. Thirty-seven wage cases involving non-ferrous miners were before the Board by summer, but no action seemed likely in the near future, and the miners became restive and discontented» Housing conditions in the mining regions were also bad, and transportation often difficult. Added to these adverse factors was the policy, or rather lack of policy, of the Selective Service, for with miners being freely drafted for the armed forces the impression grew among them that theirs was not an essential occupation; as a result, they tended to shift to war industries where deferments were easier to obtain. With the coming of summer the normal seasonal shift to part-time farming further reduced the labor force in the mines, and production showed an alarming decline. 187/
The campaign already under way to establish labor-management committees in the non-ferrous mines was intensified, and the War Production Drive was formally launched for the industry when Donald M. Nelson broadcast an address to a Miners1 Day rally in Butte on June 13. The WPB Chairman put the problem of production squarely up to the miners:
"The people of America are relying on you for that drive. Stay on your job. Stick to the mining camps where you are now at work. You are as important to the battle as the pursuit pilot or the man behind the bombsight. I know you will respond 'with body and soul — you men of the mines, you men of the front office. All of you joined together are enrolled in the battalions of democracy to sweep the Axis from the earth." 188/
It was clear, however, that neither the miners nor their employers could settle the question by themselves.
Neither could the War Production Board put workers back in the mines without the cooperation of many other agencies. The Army Services of Supply took the lead and a meeting was arranged early in July at which representatives of the Copper, Tin-Lead and Zinc Branches and the Labor Production Division of WFB discussed the problem of the non-ferrous mines with officials of the War Department, War Manpower Commission, and War Labar Board. Areas of responsibility were agreed upon, and these were reduced to out] ine form in a memorandum dated July 8, 1942« 189/ The War Manpower Commission was to be responsible for the recruitment of additional mine labor through the United States
137/ Memorandum, "Manpower Crisis in Metal Mining in 1942", prepared by Raw Materials Section, Labor Production Division, WPB.
138/ WPB Press Release 1342, June 13, 1942.
139/ Committee Program for Increasing Production in the Copper Industry.
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Employment Service, and for preparing a list of mining occupations for which draft deferments should be recommended. The War Production Board was to intensify its morale building program through labor-management committees, curtail gold production in order to free hard-rock' miners for more essential work, and persuade the mine operators to make use of the services of the USES. The War Labor Board was to settle pending wage cases as promptly as possible, and was to announce in advance that wage adjustments would be retroactive« The Army and Navy Munitions Board was to endorse the program, while the Army, Navy, and Maritime Commission were to use their influence to prevent further recruitment of workers from the mines. Public relations and Liaison Officers of the Army Services of Supply would cooperate with field staffs of the other government agencies«
Later in the month the International Union of Mine, Mill and Smelter Workers made itself a party in interest to the discussions in Washington by filing a detailed analysis of the problem with Wendell Lund, Director of the WPB Labor Production Division« Lund called a meeting of the interdepartmental group on August 4, adding representatives of the Selective Service .System and the Office of Price Administration to the original list, and a week later a formal Interdepartmental Committee was set up, under the chairmanship of Harry 0« King, Chief of the WPB Copper Branch« 190/
Other steps were also being taken to relieve the tight labor situation« On June 24 the War Manpower Commission issued a directive to the War Production Board, requiring that current information be furnished as to the relative importance of labor needs in critical industries, and a Labor Requirements Committee was established within WPB to carry out this function« 191/ The Trade Associations and industry committees, too, contributed to the developing body of information on the question. The labor situation was the principal topic of discussion when the newly appointed Primary Zinc Producers Industry Advisory Committee held its first meeting on July 21. It was brought out that development work was being sacrificed to immediate production, which would mean further decline in output in J.943 and 1944* Skilled men were being replaced by untrained labor, so that more men were required to bring out the same quantity of ore« Operators were pessimistic, and many were alarmed by the situation« 192/ A similar problem for the lead industry was reported by the Lead Industries Association, following a manpower survey. 193/
Ï90/ Report of the Interdepartmental Committee on Non-Ferrous Metals, September 1, 1942«
191/ Labor Requirements Committee, Document 5.
192/ Minutes, Primary Zinc Producers Industry Advisory Committee, July 21, 1942.
193/ Lead Industries Association, Manpower Survey of the Lead Mining, Smelting and Refining Industry, Preliminary Report, August 11, 1942.
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The Interdepartmental Committee on Non-ferrous Metals met on August 18« It was agreed that letters signed by Donald M. Nelson, Paul V. McNutt, General Lewis B. Hershey, and William H. Davis should be sent to workers in the non-ferrous mines, emphasizing the importance of mining in the war program and describing steps being taken to combat the labor shortage« It was also agreed that nonessential gold mining should be curtailed without delay« 22V At the next meeting of the Committee, held a week later, drafts of three of the four letters were circulated, and a preliminary version of a gold mine closing order was read« 195/ Conferences were also held with officials of War and Navy Departments, and the Defense Plants Corporation, in an effort to halt recruitment of miners for government construction projects; and data were prepared for the War Labor Board on manpower aspects of the cases then pending«
King and Lund reported on the manpower shortage at a meeting of the War Production Board on September 1« The Board acknowledged its responsibility, and called upon Mall agencies involved to promote and support such actions as may be necessary to provide to non-ferrous mines, smelters and refineries a supply of labor adequate for the maximum possible output of such metals.” 196/
On September 7, 1942, the War Manpower Commission issued its first Employment Stabilization Order, declaring the Western States a labor shortage area, and “freezing” the non-ferrous miners in their jobs« Though it was admitted that recruitment of workers would be more difficult, the order was believed to be justified by the situation. It proved in fact to be completely ineffective« During the next five months there were 10,000 applications for certificates of separation. Ninety-two percent of the requests came from employers, and over 7,000 were granted. Many workers, moreover, left their jobs without asking for permission, and there were employers who did not ask the approval of the USES before d 1 schargi ng men. Those without certificates apparently had no trouble getting new jobs. 197/
The War Production Board issued its Gold Mine Closing Order on October 8. Advance estimates indicated that 3000 to 4000 men would be released for other work, but again the effectiveness of the action was less than had been anticipated. As of Februaiy 27, 1943, 3200 workers were released from gold mining, but only
194/ Minutes, Interdepartmental Committee on Non-Ferrous Metals, August 18, 1942.
195/ Ibid., August 25, 1942.
126/ WPB Minutes, Meeting XXX, September 1, 1942.
197/ Memorandum, ”Manpower Crisis in Metal Mining in ,1942,” prepared by Raw Materials Section, Labor Production Division, WPB.
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2500 registered with the United States Employment Service for other jobs, and just 1600 were referred for employment in the non-ferrous mines» Records available for 1000 of these showed that 131 went to
the lead-zinc mines, which showed a subsequent monthly gain in production of 270 tons of lead and 336 tons of zinc» 198/
Later in October the War Labor Board authorized retroactive wage increases of a dollar a day in the pending wage cases, and set up a Non-Ferrous Metals Commission in Denver to speed the handling of future cases» The major problem, however, still remained unsolved» To bring production up to schedule, a total of 9,553 men were needed in copper, lead, and zinc mining and milling. 199/ The possibility of furloughing soldiers with mining experience, as had been done in England, was suggested early in September, and was under consideration by the Army before the end of that month. 200/ In the emergency the scheme was approved and the men began moving to the mines before the end of October. 201/ The arrangements were confirmed by General Somervell on November 6:
’’The Army has now completed the project for the release of approximately 4200 enlisted men possessing mining experience and qualifications to the copper, zinc, lead and molybdenum mining industries. All but a few of these men are at work in the mines or enroute thereto; the remainder have been employed and will depart on schedules which have been arranged with the companies»
’’There is attached hereto a list of the companies hiring the released soldiers which shows the numbers employed by each company»
"These men have been transferred to the Enlisted Reserve Corps. They will not be recalled by the Army for the time being except for military necessity, unless they leave their place of employment or their employment is terminated by a mine company. With the exception that they are not free to seek employment elsewhere, their status is that of civilians subject to recall by the Army.” 202/
198/ Ibid» The history of the preparation and implementation of the gold mine closing order has been treated in detail in a report of the Policy Analysis and Records Branch, Office of the Executive Secretary, War Production Board»
122/ Minutes, Labor Requirements Committee, Meeting 4> October 19, 1942» 200/ Minutes, Interdepartmental Committee on the Non-Ferrous Metals, September 30, 1942»
201/ Memorandum, Lieutenant General Brehon Somervell, td Ferdinand Eber-stadt, October 26, 1942»
202/ Lieutenant General Brehon Somervell to Ferdinand Eberstadt, November 6, 1942»
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The curve of production showed immediate gains, but they were less than could have been achieved had the mines to which soldiers were» assigned been selected on the basis of their metal output per man. In October the Labor Production Division of WPB had prepared tables showing the labor productivity in individual copper, lead, and zinc mines. The coverage was 90 percent complete for lead and 87 percent complete for zinc, outside the Tri-State area. These tables were not used, however, in placing the furloughed soldiers. A study by the Labor Production Division in December indicated that if just 500 of the soldier-miners had been shifted from low to high productivity mines the net gain on an annual basis would have been some 4,500 tons of copper, 16,500 tons of zinc, and 2*000 tons of lead. 203/ Even the gains achieved were limited in time. By midDecember, 15 percent of the soldiers had been recalled to the Army, and 40 percent were gone by March, 1943« 204/
Also in November a procedure for handling the housing problem in mining communities was developed, with V»PB authorizing priorities for materials necessary to build about 2,000 housing units. The net gain in employment resulting from all measures combined amounted to approximately 1,500 men in the lead and zinc mines. 205/
The relatively easy position of lead in comparison with zinc and copper led to one other proposal for easing the labor situation, but nothing came of it. The Office of Civilian Supply suggested early in November, 1942, that certain Western “pure lead11 mines be closed, together with various lead smelters, in order to divert labor to the production of the more critical metals. The Tin-Lead Division objected on the ground of impracticability, but the question went to the Committee on Concentration of Production by memorandum of January 19, 1943. The pros and cons of the proposal were never debated, however, because the Committee was already moribund and ceased to exist before any action was taken. 206/
Increasing the Premium Payments.—The premium price plan, under which bonus prices were paid for copper, lead, and zinc produced in excess of a stated quota, was hardly well into operation before output began to level off. The acute labor shortages in the
203/ Labor Production Division, WPB, “Estimated net gain in Production of Strategic Metals if Soldiers Furloughed for Employment in Mines of Relatively Low Productivity Had Been Placed At More Productive Mines“, December 20, 1942.
204/ Minutes, Labor Requirements Committee, Meeting 9, December 16, 1942; Manpower Crisis in Metal Mining in 1942.
205/ Memorandum, “Manpower Crisis in Metal Mining in 1942," prepared by Raw Materials Section, Labor Production Division, WEB.
206/ Committee on Concentration of Production, Document 64*
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Western Bines offered a partial explanation, and the declining TriState ore deposits added a further reason, but-basically the problem was one of mining low grade ore at a higher cost than could profitably be met, even at the bonus prices« This was particularly the case with sine« If production objectives were to be achieved it would have to be with lower grade ores, from nines not economic in normal times, but under existing tax policies and at prevailing prices little capital was available for such developments«
During the summer of 1942 an exhaustive search for marginal mines was conducted by field representatives of the War Production Board, and the files of the major mining companies were searched for relevant data« 207/ Congress clarified the tax situation in June when the House Ways and Means Committee voted to exempt premium payments for metals from the excess profits tax, 208/ but a price adjustment was still wanting« Production fell off in the Tri -State area, and some mines actually shut down« George C. Heikes, who succeeded Uebelacker as Chief of the Zinc Branch in July, sent members of the Quota Committee to Joplin to look over the situation, while Frederick M« Eaton of the Legal Division took up with the taxation authorities the question of special depletion allowances for zinc mines« 209/
A supply and requirements chart prepared by Heikes in August showed total requirements for 1942 of a little over a million tons, increased by perhaps ten percent for 1943• Domestic mine output was put at 825,000 tons for 1942 and at 780,000 tons for the following year« The limiting factor was that of imports. Heikes‘estimate of 175,000 tons of imported zine in 1942 was low, but at the time the shipping situation did not justify optimism« It must have been just about the time his chart was issued that Heikes ranged that his forecast for domestic mine output could not possibly be met« Only materially higher prices offered any hope of approaching it, and before the Quota group returned to Washington he made his own recommendations to the Deputy Director General for Industry Operations« He wanted the premium price for zinc increased to 15#, and the life of the plan extended to February 1, 1947« He wanted to increase depletion allowances to make more money available for development work, and he proposed to exempt from taxation the 207/ Memorandums, S. H. Ball to A« 1« Henderson, May 13, 1942;
Ball to H. W. Dodge, November 3, 1942; B. Britton Gottsberger to S. H. Ball, January 5, 1943»
20$/ “Weekly Information Service,“ The American Mining Congress, June 26, 1942« Also Revenue Act of 1942, 56 Stat« 798, Title II, Sec« 209 (c); and Internal Revenue Code, Sec« 735 (c).
209/ Memorandum, Frederick M« Eaton to A«I «Henderson, August 14, 1942«
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profits on all new production for 1942 in excess of 1941 output, the money to be used for developing new reserves and for mining low grade ore. 210/
The Quota Committee returned from the Tri-Qtate on August 21, convinced that premium prices would have to be raised. Their report coincided with the labor crisis in the Western States, which came before the War Production Board on September 1, and they were equally bound by the Boards resolution in favor of ’’Maximum possible output.” The immediate response to the increasingly critical zinc situation was a general revision of existing quotas to permit a larger proportion of mine output to command bonus prices, with more liberal depletion allowances and operating margins. 211/ The revisions, however, were only a stop-gap, pending an overhauling of the whole premium price system. The industry went on record as favoring additional premiums for lower grade ore, and an extended quota period, at a meeting of the Advisory Committee on September 16; 212/ and representatives of WPB, OPA, and the Metals Reserve Company, meeting on the 28th, instructed the Quota Committee to formulate plans for increasing the bonus payments. 2U/
Through October and November various proposals were debated, while more than one mine operated at a loss on privately given assurances that additional over-quota payments would be forthcoming. 214/ It was the middle of December before the plan was finally agreed upon, and submitted for approval to Jesse Jones, in his capacity as Chaiiman of the Board of the Metals Reserve Company. 215/ The existing quotas were to be called ”A” quotas, and production in excess of the assigned quantity was still to command the existing premium. For lead and zinc, however, a mine might also be assigned a ”B” quota, and for zinc alone a third, or ”C” quota was to be authorized. Production in excess of each new quota would command an additional increment of 2-3/40. It was thus possible to secure prices up to 120 for lead and up to 16-1/20 for zinc. The life of the plan was extended until July 31, 1945.
21Q/ Memorandum, George C. Heikes to A. I. Henderson, August 20, 1942. See also Appendix F.
211/ Memorandum, Frederick M. Eaton to A. I. Henderson, September 2, 1942; Minutes, Primary Zinc Producers Industry Advisory Committee, September 16, 1942.
212/ Minutes, Primary Zinc Producers Industry Advisory Committee, September 16, 1942.
213/ For details see Evolution of Premium Price Policy for Copper, Lead and Zinc, Report No. 4, Policy Analysis and Records Branch, Office of the Executive Secretary, War Production Board.
214/ Operators were also given to understand that wage increases ordered by the WLB would be absorbed by quota adjustments ’’where such adjustments are necessary in order to permit operating margins which are reasonable and adequate for maximum mine production.” Donald H. Wallace of OPA, speaking to the American Mining Congress, Salt Lake City, November,17, 1942. OPA Press Release 1142, November 17, 1942.
??£/ Letter, Leon Henderson and Ferdinand Eberstadt to Jesse Jones, December 15, 1942.
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The new premiums were approved by the Metals Reserve Company on December 23, in a letter from Assistant Secretary of Commerce W. L. Clayton, who stipulated that *in connection with the proposed ‘B’ and 'C' quotas, most careful consideration is to be given to the critical manpower and supply situation, and that such quotas will be assigned, and thereafter continued in effect only in those eases where the increased production flowing from the 'B' and ’C’ quotas justified the additional manpower involved in such operations•” 216/ The plan differed from the original version in another particular, also. The new quotas might be increased at any time, qr revoked upon thirty days1 notice, and the Metals Reserve Company was not bound to effect any settlement with producers should the program be terminated before the authorized date*
The additional premiums became available on January 1, 1943, and quotas were made retroactive to cover production losses sustained in anticipation of the higher prices as well as the wage increases ordered by the War Labor Board*
216/ Letter, W. L* Clayton to Ferdinand Eberstadt and Leon Henderson. December 23, 1942•
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IV. THE WAR PROGRAM; CONTROLLING THE FLOW OF MATERIALS December 1941 - May 1943
Tightening Priority Controls»—The entry of the United States into the war brought a changed attitude toward distribution as well as with respect to production. Business as usual was at last out of the question, and government and industry alike faced the new situation in sober earnest, with full awareness of what had not been accomplished» Ten days after Pearl Harbor zinc producers were told that they would have to furnish records of all shipments—not just those of metal under allocation; and that allocation would be made complete if it ever became necessary. 217/ Ch December 27 a 90-day extension of the General Preference Order for zinc was announced; and on the 28th both zinc and lead were brought under import control. Thereafter neither metal could be imported except by the Metals Reserve Company or other government agency. 218/ Since all supplies of these metals in the hands of the Metals Reserve Company were subject to allocation by OPM, the order had the effect of extending the area of priority distribution. January 8 saw lead scrap brought under priority control, 219/ and before the end of the month the informal ceiling prices of lead and zinc, respectively 6-1/2 and 8-1/4 cents, were issued as formal price schedules, 220/
Lead consumption by January was at the rate of more than 100,000 tons a month, well above domestic output, and imports from any country that had to be reached by sea were problematical. The rich tin mines of Malaya, moreover, were already cut off, and lead was going to have to be used wherever possible as a substitute. Supply and demand were so far out of balance that sweeping restrictions seemed necessary, and they were ordered on January 10, 1942. 221/ After April 1 the use of lead was prohibited in automobile body solder, ballast and keels for pleasure boats, blocks for cutting leather, building supplies, caskets and casket hardware, foil, ornamental glass, regalia, badges and emblems, statuary and art goods, tennis court markers, toys, and weights for bats, clocks, decoys, dresses, golf clubs and jockey's saddles. Between January 1 and April 1 use of lead in the manufacture of these items was restricted to 50 percent of the amount used in either the third or the fourth quarter of 1941, at the manufacturer's option. Lead for most other uses was restricted
217/ Minutes, Copper and Zinc Industry Advisory Committee, December 17, 1941»
218/ OPM Press Release, PM-1944, December 27, 1941; General Imports Order M-63.
219/ OPM Press Release, PM-2097, January 8, 1942; General Preference
Order No. M-72.
220/ Price Schedules Nos. 69 (lead), and 81 (zinc); OPA Press Releases, PM-2157, January 13, 1942, and PM-2354, January 30, 1942.
221/ Conservation Order No. M-38-C; OPM Press Release, PM-2102,
January 10, 1942.
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to 90 percent of the amount used in either the third or fourth quarter of 1941.
The disputed order L-25, prohibiting the manufacture of lead, tin, and composition foil, was revoked without ever having gone into effect, since the subject was fully covered in the new lead order and in a tin conservation order issued a few days earlier. 222/ The elimination of lead for foil was in fact the only restriction likely to save any substantial quantity of the metal, but in fairness all manufacturers had to be treated alike*
The next four or five months were marked by readjustment of price schedules for lead and zinc products and for secondary metal, by progressive limitation of civilian use, and by tightening of controls. The monthly reserve pool of lead remained unchanged at 15 percent of production for the second preceding month, but the zinc pool continued to increase in size. 223/
Both the lead and the zinc orders would have expired March 31, but both were extended, the lead order until December 31, 1942 and the zinc order until May 31. 224/ The comparatively short period during which the zinc order was to be kept in force was merely to allow time for the preparation of a more drastic control measure.
The lead restrictions imposed in January were clarified early in April when an order was issued prohibiting the use of lead foil for wrapping cigarets after May 1, regardless of inventories on hand. 225/
222/ 0PM Press Release, PM-2197, January 15, 1942.
223/ The sine pool for the remainder of the period during which
was in operation was as follows: Month Zinc Dust
(1942) Base Month Metallic Ziqc Zinc Oxide
January October 31% 10% none
February November 40% 20% (50% high grad« (20% lead free none none
March December (40% other grad® (10% leaded (60% high grade none none
April January (40% other grades (75% high grade 10% leaded none
May January (50% other grades
224/ Ryteneion of General Preference Order M-38, March 20, 1942; Extension of General Preference Order M-ll, March 28, 1942.
225/ Amendment No. 1 to Conservation Order M-38-c; WPB Press Release 817, April 6, 1942* Use of lead was also prohibited in the manufacture of buttons, costume jewelry, novelties, and trophies, but the cames, or grooved rods used in fitting stained glass into windows, were removed from the prohibited list.
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Another extensive curtailment in the use of lead was imposed later in the month, when the production of storage batteries for the six months ending September 30, 1942, was cut to 75 percent of production during the corresponding six months of 1941, and battery sizes and models were reduced from about 75 to 15« The estimated saving in lead was put at 23,000 tons« 226/ General curtailments in the production of automobiles, office machinery, and other manufactured products for civilian use also served to release varying quantities of lead and zinc for more essential purposes« 227/
226/ Supplementary Limitation Order L-A-B;gPB Press Release 988.
April 26, 1942.
227/ During the first six or eight months of 1942 numerous limitation orders affecting the use of lead and zinc were issued« The use of terneplate — steel coated with an alloy of lead and tin — was restricted on February 11, 1942 (M-81). After March 20, the use of any metal other than iron and steel in the production of household furniture was banned (L-62); and a few days later zinc used in the manufacture of office supplies was restricted to galvanizing essential to practicable use and wear (L-73)« For the four-month period ending June 30, 1942, the use of zinc in the manufacture of metal plastering bases and accessories was cut back to 35 percent for large manufacturers and 50 percent for small producers, the base period being the years 1940 and 1941 (L-59). The use of zinc in kitchenware and household articles during April, May, and June was cut to 50 percent of the amount used in an equivalent part of a 12-month base period ending June 30, 1941 (L-30); and zinc for zippers, hooks and eyes, and other garment fasteners was severely limited (L-68)« Both zinc and lead were prohibited in the manufacture of caskets, casket shipping cases, and burial vaults after March 30 (L-64)« Lead was included in restrictions imposed April 1 on the use of collapsible tubes (M-115); and both zinc and lead were affected by limitations placed on the use of metals in building construction (L-41, April 9, 1942). Both metals were prohibited in the manufacture of baby carriages (L-152, June 14, 1942), and in church goods (L-136, June 14, 1942). Additional quantities of zinc were saved by amendments to L-59, making further cuts in the manufacture of metal plastering bases, and finally eliminating them altogether. Restrictions on the use of zinc in the manufacture of kitchenware and household articles were extended (L-30, Amendment No. 5); and galvanized ware was put under simplification and curtailment restrictions which were expected to save 10,000 tons of zinc (L-30-a, November 7, 1942). Limited cuts were also made in the use of zinc by the printing and publishing industry (M-99 and Amendment No« 1).
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In spite of the drastic limitations imposed on the use of zinc, a shortage of high grade metal was clearly in sight before the end of March« It was impossible to meet in full the British requisition under Lend-Lease for that month, and there was little prospect of doing any better in April or May* 228/ After months of delay due to failure to secure the necessary clearances, the Zinc Branch sent out a questionnaire on April 1, designed to secure information on which a new zinc order could be based« 229/ The order was quickly drafted, and was issued on May 1, to be effective from the first of June« All metallic zinc was to be allocated by certificates issued by the Director of Industry Operations of WPB. In order to receive delivery the consumer had to forward his allocation certificate to his producer, who endorsed it with the quantity and grades shipped« Dealers also had to secure allocation certificates, hut zinc might be bought from dealers without one« The amount available in this way, however, would be limited. Anticipatory shipments up to 25 percent of the previous month’s total might be made by a producer pending receipt of the allocation certificate« Producers of remelt zinc and producers under toll agreement were required to report to the War Production Board. Zinc in any quantity could be sold to the Metals Reserve Company without any allocation certificate. 230/ The shortage, for the time being, was only in high grade zinc, and it was hoped that the new order would prevent similar stringency in other grades. 231/
At the same time zinc oxide and zinc dust were continued under partial allocation by the method already in effect, a percentage of each month’s production being set aside when called for to be allocated by the WPB. ^2/ .
Lead scrap was added on June 1 to the list of materials that could be imported only by the Metals Reserve Company or other government agency; 233/ and both lead and zinc were included in a list of critical materials which the Requirements Committee proposed to allocate "within the apparent supply.” 234/ A few more limitation orders applicable to lead end zinc were issued, but for lead, and for the war program as a whole, the curtailment job was about over by the middle of the year.
228/ Memorandum, A. McDougall and Lincoln Gordon to Howard Sykes ana G.Archer, March 27, 1942.
229/ Memorandum, Wm. Jay Hoff to A. I .Henderson, April 2, 1942. 230/ General Preference Order M-ll as Amended, May 1, 1942; WPB Press Release 1027, May 1, 1942.
231/ WPB Minutes, Meeting XX, June 10, 1942.
232/ Amendment to Supplementary Order M-ll-a, May 1, 1942.
233/ Amendment No. 7 to General Imports Order M-63; WPB Press Release 1261, June 1, 1942.
334/ Memorandum, W.L.Batt to Donald Nelson, June 2, 1942, Committee on Control of Flow of Materials, Document No. 39.
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As Donald Nelson expressed it early in July: "Most of the goods are in production today» Most of the expansions have taken place» From now on it becomes a question of directing production through directing the flow of materials." 235/
A reorganization of the War Production Board, reflecting this shift in emphasis, was announced on July 8» William L. Batt became Vice Chairman of the Board, and J. S. Khowlson, formerly Director of the Division of .Industry Operations, became Vice Chairman on Program Determination, succeeding Batt as Chairman of the Requirements Committee» All operational work, including that of both industry and materials branches, was brought together under a Director General for Operations, and Amory Houghton, formerly Deputy Chief of the Bureau of Industry Branches, was appointed to the new post. 236/ Vogelsang continued as Chief of the Tin-Lead Branch within the new organization, but Uebelacker was replaced as Chief of the Zinc Branch by George 0» Heikes»
Further Curtailment of Zinc Uses.—De spite N elson1s optimistic statement that the curtailment phase was about over, still more drastic restrictions on the civilian use of zinc were in the offing. The metal had been brought under complete priority control, but there was not enough to go around, and, as soon as the allocation order was out of the way, work was begun on a broad conservation program. Information as to the end uses of zinc remained incomplete, but questionnaires circulated to the industry provided the basis for a list of well over a hundred products in which the use of zinc could be eliminated. The list was made a part of an order issued on July 24, 1942, to take immediate effect. 23?/ The use of zinc in any of the listed articles was restricted for the period between July 24 and September 1 to 50 percent of the average monthly use for the same purpose during 1941, and after September 1 was prohibited entirely. Zinc for all purposes other than those listed was cut to 75 percent of Prime Western grade and 50 percent of all other grades, used in the corresponding quarter of 1941* Items produced under contract or subcontract for the military program were, of course, excepted.
The order also prohibited the accumulation of metal in excess of a "practicable working inventory," but this provision, for the moment, was largely superfluous. At the beginning of August consumers had on hand enough zinc for just 10 days1 use, producers'
235/ Victory Magazine, Vol. 3, No. 28, p. 1 (July 14, 1942). 236/ WPB Press Release 1494, July 8, 1942.
237/ Conservation Order M-ll-B; WPB Press Release 1594, July 24, 1942.
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stocks equalled only a week’s supply, and the Government stockpile containedenough metal to keep the industry going for no more than one day» 233/ Production, including production from foreign concentrates, was then estimated at 820,000 tons for the calendar year, of which 712,000 was committed for military use and for Lend-Lease.
The Zinc Branch and the Conservation Branch, jointly responsible for the details of the zinc conservation program, estimated that it would save a total of 50,000 tons of all grades of zinc for the balance of the year 1942, and 150,000 tons for 1943, over and above the savings realized through conservation and limitation orders already in force. 239/
Severe as the restrictions were, they were accepted for the most part with good grace. The principal objection came from the printing and publishing industry, which, as one of the unlisted users of high grade zinc, was cut to 50 percent of consumption in 1941. The Printing and Publishing Branch of WPB had been aware that the order was in preparation, but it had not been submitted to officials of that Branch for clearance, and they failed to anticipate the reaction of the industry. As soon as the order was issued telegrams and letters of protest began to pour in, and the Printing and Publishing Branch had to argue the case for its clients. The restrictions were effective by quarters. The third quarter of the year was nearly half gone, and with it nearly half of the normal consumption of lithographic and photo-engraving plates. The 50' percent reduction in use, therefore, would very shortly leave the newspapers and magazines without means of reproducing illustrations until the beginning of the final quarter of the year. 240/
The Zinc Branch refused to make an exception for the publishing industry, and so the Printing and Publishing Branch instructed the members of the industry to file individual appeals, 241/ 238/ Memorandum, R. L. Wilcox to D. L. Colwell, August 4, 1942.
Cf. Memorandum, H. W. Dodge to A. I. Henderson, August 13, 1942. 239/ Memorandum, George C. Heikes to Clearance Committee, June 26, 1942. 240/ Memorandums, E. W. Palmer to F. M. Carlson, July 31, 1942;
E. W. Palmer to A. I. Henderson, July 31, 1942; E. W. Palmer to J. A. Krug, August 3, 1942; Arthur L. Harris to H. T. Bourne, August 10, 1942; W. J. Risley to J. R. Kimberly, August 11, 1942. ?/,!/ Mimeographed circular to the users of zinc in the Graphic Arts Industry, August 5, 1942.
23-508 P?1
even going so far as to supply forms for the purpose« The Appeals Branch then turned objector, but the Zinc Branch consented to the procedure in the straw-grasping hope that a substitute for zinc in photo-engraving would be discovered by October« Needless to say, no substitute turned up, but the industry arranged with WPB officials to re-use its own scrap* 242/ In November the restrictions were modified to permit usage of zinc for three months from November 15, up to 75 percent of the amount used in printing and publishing during the corresponding periods of 1941« 243/
Great as were the estimated savings of zinc under the July conservation order, they were not great enough« Copper supplies were even more precarious than those of zinc, and after months of negotiation by the iPB Conservation Branch the Army finally agreed to reduce the copper content of cartridge brass from 70 to 68-1/2 percent, with a corresponding increase in the required amount of zinc« 244/ The Zinc Branch vigorously opposed the new formula, which would entail an additional demand for 15,000 to 20,000 tons a year of high grade zinc, and Heikes still hoped to prevent the change from going into effect, 245/ tut to be on the safe side more zinc had to be provided.
The metal could be obtained only by further limiting civilian use, and the Conservation Order was amended on October 1* Closures for glass containers were put on the prohibited list, 246/ saving an estimated 8,000 or 9,000 tons a year of intermediate grade zinc which could be easily redistilled for use in cartridge brass« The amendment was issued as quickly as possible to forestall the production of jar tops f,or -the 1943 canning season and permit time for the manufacture of a substitute« It was not intended, however, to stand alone, and a second amendment was promulgated on November 26, extending control over zinc used in galvanizing and coating, and adding other end uses to the prohibited list. 247/
242/ WPB Press Release 1705, August 14, 1942«
243/ General Conservation Order M-99 as amended November 13, 1942* M-99 was a Printing and Publishing order, which superseded the relevant parts of M-ll-B.
244/ Justification for Amendment No* 1 to Conservation Order M-ll-B, cleared September 25, 1942«
245/ Memorandum, George C. Heikes to 1« 1«. Henderson, October 3, 1942. The Conservation Division believed the Army had agreed to reduce the copper content of its cartridge brass to 67 percent, according to a memorandum from the Division's Zinc Consultant, R. L. Wilcox, to H. A. Anderson, October 30, 1942; but the question was still in dispute at the end of the year, with WPB officials unable to say whether copper or zinc would be the more critical metal. See Ferdinand Eberstadt to Admiral S.M.Robinson, December 22, 1942.
246/ Conservation Order M-ll-B as Amended October 1, 1942; WPB Press Release 1944, October 1, 1942.
247/ Conservation Order M-ll-B as Amended November 26, 1942*
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The new restrictions, added to those already in force, reduced the amount of zinc used in galvanizing by 40 percent in terms of 1941 consumption for this purpose» The amount of zinc dross, by-product of the galvanizing process, was correspondingly reduced. Dross, however, was the principal source of zinc dust, and was also redistilled for use in cartridge brass. During November and December, 1942, both domestic and Lend-Lease demand for zinc dust rose sharply, posing another problem of control. Zine dust and zinc oxide were already under partial allocation, but the order was amended on December 22 to cancel all provisions relating to dust. At the same time a new order was issued bringing zinc dust under full allocation, the procedure being the same as that in effect for metallic zinc. 249/
Another reorganization of the War Production Board had meanwhile taken place early in November. Ferdinand Eberstadt, formerly Chairman of the Army and Navy Munitions Board, became Program Vice Chairman, and Ernest Kanzler, newly appointed Director General for Operations, was placed under Eberstadt. The Zinc, Tin-Lead, and certain other metals branches were raised to the status of Divisions, and the two with which we are here concerned were grouped with others to form a Minerals Bureau, under J. M. Scribner. The Minerals Bureau was placed under the jurisdiction of A. I. Henderson, Deputy Director General for Industry Divisions, and he in turn was responsible to the Director General for Operations. 250/
The Director of the Minerals Bureau turned immediately to the zinc problem, and set Heikes to work on a study of still other conservation measures, enlisting the aid of the Office of Civilian Supply in the project. 251/ The estimated supply and requirements for November still showed a deficit of more than 11,000 tons for the month. 252/
Basing of the Lead Situation.—While those in charge of the zinc program struggled to close the gap between supply and requirements through the latter half of 1942, the supply of lead steadily accumulated until a considerable surplus was on hand. In a Provisional Report on the Relative Scarcity of Certain Materials, issued in June by the Conservation Division, lead was classified
249/ General Preference Order M-ll-a as amended December 22, 1942j
General Preference Order M-ll-1, December 22, 1942. 250/ General Administrative Order 2-65, November 11, 1942. ¿51/ Memorandum, J. M. Scribner to Joseph L. Weiner, November 18, 1942. 252/ Memorandum, R. L. Wilcox to Harvey A. Anderson, October 30, 1942.
asesas
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as relatively abundant, and was recommended as a substitute for scarcer metals» Using this report as a basis, F. E. Wormser, Secretary of the Lead Industries Association, proposed late in the same month that current restrictions on the use of lead be relaxed'» 253/ The War Production Board, both through the Conservation and Substitution Branch and through the Tin-Lead Branch, was committed to an expanding use of lead in substitution for other materials, which meant continued limitation of civilian consumption»
The- farthest the WPB would go at this time was to indicate that the lead reserve pool was not likely to rise above 15 percent» Ch July 4 the pool, which had been fixed at that proportion since its origin, was frozen until further notice at 15 percent of production during the second month preceding that for which the reserve was established. 254/ Further notice was not long in coming, for the only reason for maintaining a pool at all was to provide a source of metal for emergency allocation, and the current supplies were actually more than ample for all purposes, normal and emergency»
A newly formed Primary Lead Producers Industry Advisory Committee held its first meeting on July 14, with Vogelsang presiding» Members of the Committee included F» H. Brownell, American Smelting and Refining Company; C. H. Crane, St» Joseph Lead Company; Norman Hickman, American Metal Company; A. G. Mackenzie, Utah Metal Mine Operators Association; and F. E. Wormser. Irwin H. Cornell, representing Bunker Hill and Sullivan Mining and Concentrating Company, and Clarence Glass of the Anaconda Sales Company, also attended on ba half of the industry. For the government, representatives of the Army, Navy, OPA, and various Branches and Divisions of WPB were present» After a brief discussion of the Committee's function and its legal status, the group got down to the business in hand»
Vogelsang made it clear that the major problem was no longer one of supply but one of consumption. The stockpile, which had stood at 12,000 tons at the beginning of April, had grown to 123,000" tons by July 3, and was expected to reach 165,000 tons before the end of the month. The War, Treasury, and Agriculture Departments, and the Reconstruction Finance Corporation, had been authorized on May 30, 1942, to make emergency purchases of foreign materials without payment of duty, 255/ a privilege theretofore exercised only by the Navy Department. An immediate effect was to increase the importation of lead» By the middle of July the metal
253/ F. E. Wormser to Harvey A. Anderson, June 30, 1942; Anderson to Wormser, July 6, 1942.
254/ Supplementary Order M-33-j, July 4, 1942.
255/ Executive Order 9177, May 30, 1942»
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vas accumulating at the rate of 1,000 tons a day, and it was anticipated that a million tons would be available for the year, of which the military program was expected to use only 300,000 tons. To the industry representatives there was only one answer* The restrictions on the use of lead should be eased, and public announcement should be made that there was no longer any shortage of lead* They saw no need for retaining the reserve pool, which merely forced consumers to go to two sources instead of one for their supplies* 256/
Vogelsang promised that consideration would be given to liberalizing the preference and conservation orders, and took immediate action on the reserve pool* Within a week a revocation order had been drafted, and was issued August 3» 257/ The justification for the order called attention to "a sudden and rapid change in the lead situation insofar as the demand for lead has fallen off to such an extent that very rapid accumulations are being made to the government stockpile and the available lead is in sufficient volume to take care of any necessary requirements which cannot be filled by the industry* •
By the end of August the stockpile had reached the authorized limit of 200,000 tons* Even assuming declining production during 1944, declining scrap return, and imports available only by rail, the current supply and stockpile were believed adequate to carry through 1945 * 258/ Nevertheless neither the industry nor the government agencies concerned wanted any step taken that might result in curtailment of production. Arrangements were therefore made for the Metals Reserve Company to purchase "excess and burdensome stocks of primary lead" when relief was requested by individual producers, and a similar means of disposing of surplus secondary lead was considered* 259/ The complicating factor was the uncertainty of the milltary demand, which might at any time be increased by some change in strategy* A sudden demand for shrapnel, for example, would require that large quantities of lead be immediately available* Aside from the continued growth of the stockpile, the only alternatives to cutting production were a wider use of lead as a substitute for other metals, and the relaxation of restrictive orders*
The substitution program made slow progress, because many of the uses to which lead might be pit were prohibited by existing conservation orders, but under continued pressure from the industry, WPB released more- lead for civilian consumption. On August 29 the order of April which had cut the manufacture of storage batteries
256/ Ml mit, pi a j Primary Lead Producers Industry Advisory Committee, July 14, 1942.
257/ Revocation Order M-38-j, August 3, 1942.
258/ Memorandum, Erwin Vogelsang to Arthur Holcombe,' August 26, 1942.
259/ Minute«, Primary Lead Producers Industry Advisory Committee, August 13» 1942.
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to 75 percent of production during the base period was revoked, and a new order issued in its place which curtailed production by only 10 percent« 260/ At about the same time the initial steps were taken toward modification of the drastic conservation order of January 10, M-38-c.
The proposed amendment to the conservation order removed various uses of lead from the prohibited list, and provided that lead used for purposes not on the list might be at the rate of 100 percent rather than 90 percent of the base period« The amendment passed through various drafts to take account of objections raised by interested divisions and agencies, most important of which were a complaint by the WPB Conservation Division that not enough leeway for substitution was allowed, and one by the Army and Navy Munitions Board that its own list of prohibited items should not be violated« More than two months elapsed before the amendment was ready for the Clearance Committee, where the limitation of usage to 90 percent of the base period was restored* 261/
While this amendment was in process, a proposed order restricting the use of lead in the manufacture of tetraethyl gasoline was dropped« The only justification for such a restriction was a shortage of lead, and no such shortage existed« 262/
The over-supply of lead continued, meanwhile, to be one of the major problems of the Tin-Lead Branch, 263/ and throughout the period during which the amendment to M-38-c was in preparation the Industry Committee continued to press for relaxation of restrictions to permit an increased use of lead. 264/ The way was paved on October 21, when the lead situation was made the subject of a special press release« The nub of the story was a direct statement from Vogelsang:
"Lead is practically unique among metals today, for it is the one important metal in which a shortage does not exist at the present time. However, it is impossible to predict what future demands may be, so control must be maintained to assure an adequate supply for any unforeseen requirements« Every effort must be made to keep mine production at peak levels. Our use of lead for all purposes has
260/ Revocation of Supplementary Limitation Order L-4-b; Limitation Order L-180; WPB Press Release 1773, August 29, 1942.
261/ Amendment No. 2 to Conservation Order M-38-C, and supporting documents«
262/ John F. Fennelly to Ralph K. Davies, September 15, 1942.
263 / Memorandum, Erwin Vogelsang to A. I. Henderson, October 12, 1942 264/ Minutes, Primary Lead Producers Industry Advisory Committee, September 10, 1942.
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increased enormously — from 633,000 tons in 1936 to over a million tons in 1941« We are still using it in very large quantities** 265/
The amendment to Order M-38-c was finally issued on November 11, but made retroactive to October 1« The relaxation of restrictions was not as great as had been desired by the industry, but the amendment did permit wider use of the metal, primarily as a substitute for other more critical materials»
The Tin-Lead Branch continued to allocate lead purchased by the Metals Reserve Company, which meant all imported lead, amounting to perhaps a third of the total» The only control over domestic pr3 mary and secondary lead was the control over end-uses imposed by conservation and limitation orders, and the monthly reporting of industry sales»
Changes in Control Orders,—The trends in control over zinc and lead that were in evidence during the latter part of 1942 continued during the first half of 1943» The control over zinc continued to be tightened while lead controls were further relaxed» The basic zinc allocation order, M-ll, was amended on February 9 to bring remelt zinc and zinc scrap under full allocation» Remelt zinc was to be treated as if it were the lowest grade of zinc, and was to be handled in the same manner, with dealers permitted to sell up to 20 tons a month to any one person as long as he had not requested or received a WPB allocation certificate for that month» Neither zinc nor remelt zinc, however, might be sold to fill a purchase order bearing a preference rating lower than AA-5 without specific authorization. Scrap zinc might be sold to a producer or manufacturer for use in the manufacture of redistilled zinc, remelt zinc, brass, zinc dust, zinc oxide, chemieels or salts without specific authorization, but sales for other purposes had to be authorized by the Director General for Industry Operations. 266/ A 60-day inventory restriction on scrap was dropped at the request of the Industry Committee. 267/ A possible source of mi sint^rpratfition was eliminated by further amendment on June 7, when deliveries of zinc, remelt zinc and scrap to the Metals Reserve Company for purposes of stockpi1ing or redistribution were authorized without allocation certificate or preference rating. 268/
265/ WPB Press Release 2031, October 21, 1942.
266/ General Preference Order M-ll as amended February 9, 1943.
267/ Minutes, Primary Zinc Producers Industry Advisory Committee, January 22, 1943; Memorandum, G. H. McGowan to Clearance Committee, February 2, 1943; Minutes, Order Clearance Committee, Meeting 306, February 3, 1943.
268/ General Preference Order M-ll as Amended June 7, 1943.
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March 20 saw an amendment to the zinc oxide allocation order, M-ll-a, repealing the provision whereby no delivery of oxide could be made unless the consumer certified in writing that the shipment in question would not build his inventory above a practicable working level« The action was taken at the request of the Industry Committee, whose members felt that no useful purpose was served by the provision and that only delay and confusion resulted from it* The inventory restriction remained in force, but the certification procedure was abandoned« 269/
The zinc dust allocation order, M-ll-1, which was to have expired on March 31, 1943, was extended until revoked; 270/ and in July was amended to permit the filling of small orders by dealers, and to include the Metals Reserve Company exception as it was stated in M-ll« 271/
Lead was kept under the existing degree of allocation by an extension of the original order, M-33, until revoked« The extension, in the form of an amendment, was carelessly held up somewhere between the General Counsel’s office and the Order Clearance Committee, so that it was not actually issued until January 1, 1943, although the order to which it was an amendment had expired December 31« Nobody, however, seems to have questioned its legality except an occasional purist. 272/
Early in February the general lead conservation order, M-33-c, was also amended, but no real change was introduced. The amendment merely deleted the existing exemption in favor of orders rated A-l-j or higher, a provision which had been nullified by a general upgrading of preference ratings« 273/ The position of lead, however, continued to be relatively easy, and the industry wanted further relaxation of control« A proposed revision of the conservation order was discussed at a meeting of the Industry Committee on April 8, 274/ and a draft was circulated to interested agencies and divisions of WPB on the 21st« 275/ The Order Clearance Committee approved the changes on May 20, and the new order was issued May 26, 1943. 276/
269/ General Preference Order M-ll-a as Amended March 20, 1943; Minutes, Primary Zinc Producers Industry Advisory Committee, February 26, 1943; Memorandum, G.H.McGowan to Clearance Committee, March 16, 1943«
270/ General Preference Order M-ll-1 as Amended March 23, 1943.
271/ General Preference Order M-ll-1 as Amended July 12, 1943.
272/ General Preference Order M-33 as Amended January 1, 1943; memorandum Robert C« Bell to T«M«Boyd, December 31> 1942.
273/ Conservation Order M-33-c as Amended February 2, 1943; Minutes, Order Clearance Committee, Meeting 301, January 27, 1943.
274/ Minutes, Primary Lead Producers Industr/ Advisory Committee, April 8, 1943.
275/ Memorandum, Erwin Vogelsang to Hugh Jackson, April 21, 1943.
276/ General Preference Order M-33 as Amended May 26, 1943; Minutes, Order Clearance Committee, Meetings 335 and 337, May 19 and 20, 1943«
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What Vogelsang had done was to write a new order that would take the place of both the allocation order, M-38, and the Conservation Order, M-3S-C. All other lead orders were revoked, so that only the amended M-3S need be • considered by the industry, and its terms were simplified as much as possible« As Vogelsang put it in his justification:
«The lead position has eased considerably since the lead orders were first written« We feel, therefore, that it is now only necessary to prohibit the nonessential uses« The proposed order does away with the 90% limitation on all uses and provides only a List A covering prohibited uses for any purpose whatsoever« *
The list of prohibited items under «building supplies« was modified to conform exactly to the Army and Navy restricted list; and the use of lead for clock weights and for certain limited purposes in caskets and casket hardware was permitted« No general exemption for the Armed Services was provided, since the Services had for some time past agreed not to purchase articles on the prohibited list«
The control over distribution remained as it had been, and save for allocation of metal held by the Metals Reserve Company, was permissive rather than actual« The WPB retained the right to withhold deliveries for a reserve pool, to require reports as to proposed delivery schedules, and to allot purchase orders, bit these powers were not likely to be used extensively« The revised order, in short, provided the sort of relief from restrictions that the industry had been geeking since the previous summer, and upon which the Division had been overruled by the Order Clearance Committee in October, 1942« 277/ It was believed adequate to keep the lead position in balance, and at the same time would encourage the use of lead as a substitute for more critical materials«
277? See page w, above«
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V. BALANCING SUPPLY AND REQUIREMENTS
November 1942 - March 1944
Coordination of the Minerals Program,»»As the war effort grew in magnitude, the various divisions and agencies responsible for production and distribution of raw materials also grew, A certain amount of overlapping and duplication was inevitable. The Department of the Interior, with the established functions of the Geological Survey and the Bureau of Mines under its jurisdiction, had for some time been at odds with the War Production Board, both on the question of domestic production versus imports and with respect to technical processes for refining metals. The field engineers of the Geological Survey and Bureau of Mines, long familiar to the mining industry, were supplemented by others representing the Reconstruction Finance Corporation and the War Production Board, and the owner of a marginal mine did not know which way to turn. Cooperation was nominal or non-existent, and even within WPB itself there were conflicts of jurisdiction between engineers of the Mining Branch, field men from the metals branches, and the Regional Offices, 278/ As one Regional Director put it,
“First of all and fundamentally, let me say that I think the whole mining situation is a mess. The responsibility and authority in connection with mining is so scattered that a comprehensive and constructive treatment of the whole subject of mining is an impossibility. There are a multitude of critical problems in connection with the development of strategic metals and minerals, which are receiving no constructive attention, for the reason there is no agency with the comprehensive authority to deal with them. The failure of our major mining enterprises to keep up their development work because of manpower shortage, is day by day insuring a future crisis which is surely going to overtake us with devastating effects in . the all too near future,* 279/
With the whole minerals program in jeopardy through lack of coordination, an interdepartmental meeting on mineral production was called by Dr,C,K,Leith for September 10, 1942. The group was without policy making powers, however, and the Interior Department
278/ Memorandums, C, K. Leith and Sydney Ball to A. I. Render son, June 22, 1942; Wilbur A, Nelson to A, I. Henderson, June 23, 1942; Harry H. Fair to Wade T. Childress, October 29, 1942.
279/ Letter, Harry H. Fair to Wade T, Childress, October 29, 1942.
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declined to send representatives until a decision on overall policy was reached. Those present included mineral experts from the War Production Board, the Board of Economic Warfare, the War Department, the Metals Reserve Company, and the Bureau of Foreign and Domestic Commerce, but the vacant chairs reserved for the Bureau of Mines and the Geological Survey dominated the meeting. 280/ The group nevertheless agreed to meet weekly for discussion of common problems. The next day the Materials Division of WPB held a meeting of its own metals and minerals branches. Both groups continued to meet regularly until the end of January.
At later interdepartmental meetings representatives of the Navy Department and of the Army Services of Supply were present, but the Interior Department continued to stay away, and the breach remained unhealed until November. The reorganization of WPB early in that month, however, brought changes in personalities as well as in emphasis. A series of conferences were held in which Ferdinand Eberstadt, WPB’s new Program Vice Chairman, Undersecretary of the Interior Abe Fortas, and O.K. Leith were the major participants, and a tentative agreement was reached. On November IS, the Directors of the Geological Survey and Bureau of Mines attended, with their assistants. The chief of the new WPB Minerals Bureau, J.M.Scribner, was added to the roster of the group at the same meeting.
The agreement called for the creation within WPB of a new staff division to coordinate activities in the field of raw materials. The arrangement did not meet with the full approval of the directors of the metals divisions, but they agreed to give it a try. 231/ On December 10 the job of heading the new organization was offered to Howard I. Young, 282 who was to come on a dollar-a-year basis. The appointment was cleared with the General Counsel, who ruled that Young need not give up either of his two trade association connections, the American Mining Congress and the American Zinc Institute, both of which he served as President. 283/ Young arrived the first of January, and the organization of the Mineral Resources Coordinating Division was announced on the 30th. 284/
280/ Minutes, Interdepartmental Group on Mineral Production, September 10, 1942.
281/ Memorandums, Lyle E. Graine to Bernard L. Gladieux, April 19, 1943;
E.C.Hannum to Gladieux, April 23, 1943«
282/ Telegram, Donald Nelson to Howard I. Young, December 10, 1942.
283/ Memorandums, H.W.Dodge to J.M.Schaffer, December 14, 1942;
Dodge to Sidney Weinberg, December 16, 1942} G. Keith Funston to Dodge, December 17, 1942. The latter is endorsed: n0K with J. L. O’Brian 12/19/42-HWD"
284/ Administrative Order No. 20, Office of the Program Vice Chairman, January 30, 1943.
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The new Division was placed in the Office of the Program Vice Chairman, but under the Director General for Operations, and was charged with responsibility for “coordinating plans*,* programs and procedures within the War Production Board and with other governmental agencies fpr increasing ths supply of essential minerals and metals for war production." At the same time two committees were set up, of each of which Young served as Chairman« The Minerals and Metals Advisory Committee was made up of representatives of the War and Navy Departments, Board of Economic Warfare, Bureau of Mines, Reconstruction Finance Corporation, Geological Survey, Bureau of Foreign and Domestic Commerce, and War Production Board, the latter being represented by personnel from the Office of Civilian Supply, Office of Production Research and Development, Facilities Bureau, Labor Production Division, and Stockpiling and Transportation Division. The function of the group was to review and advise upon all metals and minerals programs, with emphasis on increasing production. 265/
The Mineral Resources Operating Committee was to be a smaller group with one member designated by the Secretary of the Interior, and the others representing the Board of Economic Warfare, RFC, and the Office of Production Research and Development. The Operating Committee was made responsible for coordination and correlation of “the broad programs and plans of all governmental agencies for increasing the supply of essential minerals and metals," and no proposal for "investigating or exploring ore bodies or for testing, developing or utilizing new processes for production of minerals or metals" was to be approved or recommended to any other agency of the government until it had been reviewed by the Operating Committee.
The Interdepartmental Group on Mineral Production continued to meet through January, with Young an added member, after which it gave way to the Minerals and Metals Advisory Committee without substantial change in membership. Representing the Army at the last meeting of the informal group was Lt. Col. John A. Church, who in his earlier civilian capacity had played so important a role in establishing the minerals program under OPM. He returned later in the year as a regular member of the Advisory Committee.
In addition to the two Committee Chairmanships and the Directorship of the Mineral Resources Coordinating Division, Young also became Director of the Minerals Bureau early in February. 266/
265/ Minutes, Metals and Minerals Advisory Committee, Meeting 1, February 12, 19U3.
286/ WPB Press Release 2146.
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The Tin-Lead and Zinc Divisions were thus brought under his jurisdiction.
Although neither Division could be called large, both had doubled and redoubled since Pearl Harbor, when a handful of men was enough to carry out the whole program. A survey made on June 15, 1942, showed the Zinc Branch with a total of 15 employees, and a payroll of $41,520. By October 31 the staff had grown to 48, and reached a peak of 62 in January, 1943* On June 23 the Zinc Division showed a staff of 54, with a payroll of $158,680. The Tin-Lead Branch on June 15, 1942 had 31 employees to handle the two major metals under its control, and a payroll of $89,960. On October 31 the number of persons employed in the Branch had increased to 42, and was 46 by January, 1943* On July 15 the Tin-Lead Division staff numbered 40 members, with a payroll of $118,340. 287/ These figures, of course, give only a rough indication of the relative magnitude of the sine and lead programs. The Zinc Division also handles cadmium, while the Tin-Lead Division has jurisdiction over ilmenite, antimony, bismuth and other minor metals.
Zinc program for 1943.—As the production program for 1943 got under way, lead, as has been indicated, was in an easy position, and zinc, while still relatively scarce, was available in sufficient quantity to meet all military and essential civilian demands. Reports from the battle fronts, however, indicated that the war might be long and costly, and the metals programs were reconsidered in the light of this possibility. C. K. Leith and S. H. Ball of the Office of Production Research and Development forecast that if the war should last another two or three years, the positions of both zinc and lead would show marked deterioration, with zinc in all probability in the most critical position of any of the metals. 288/
The zinc program was taken up by the Minerals and Metals Advisory Committee on March 23. As early as January Heikes had foreseen a probable surplus of zinc by the end of the year, taking into account expected revisions in Army requirements, 289/ and he still adhered to his estimates in March. Declining domestic production and rising requirements, however, were expected to convert the surplus into a deficit for 1944 despite increasingly large importation of foreign concentrates. In his recommendations Heikes looked far beyond 1943 and 1944, and considered the postwar period:
"The mining industry, particularly zinc mine operators, need a long-range, far-sighted mineral policy. They need a definite five-year program in which the government will
287/ iPB, Administrative Division, Preliminary Analyses of Tin-Lead and' Zinc Branches, July 15, 1942; memorandum George C. Heikes to Budget Officer, January 19, 1943; memorandum, Erwin Vogelsang to F.R.Cawley, January 25, 1943; WPB, Division of Budget Administration, Surveys of Zinc and Tin-Lead Divisions, June 28 and July 15, 1943.
288/ Memorandum, C.K.Leith and S.H.Ball to Howard I. Young, March 30, 1943« 289/ Memorandum, T.R.Armstrong to F.Eberstadt, January 19, 1943.
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guarantee bonus prices and financial support along with a definite stockpiling arrangement for excess production. This will keep mines in operation even if the war should end within the five-year period. Excess production would be placed in government stockpiles to be accumulated and guaranteed for war purposes only. Very likely the present war will not be the last, and large government stockpiles of strategic minerals and metals should become part of our national economy.
"At the present time mine operators are depleting their assets without any regard to consequences, and are falling way behind with their exploration and development work. A long term program would enable them to carry out the necessary development work to perpetuate their business after the war, as well as to insure immediate production,
"When such a program is adopted there will be justification for recommending and financing long tunnels, and deep shafts into known ore deposits for the development of new districts." 290/
Mine projects previously rejected because they could not be brought into operation by the middle of 1943 were reintroduced, and other long-term developments were added. In the former category were slag fuming plants at El Paso, Texas, East Helena, Montana, and Chihuahua, Mexico; a 6000 foot tunnel and 1100 foot shaft to open the Black Bear mine of the Idarado Mining Company at Telluride, Colorado; and a two-and-one-half mile tunnel to drain the various mining properties in the Leadville district of Colorado, Heikes also proposed to increase the stockpile reserve of concentrates to 1,120,000 tons, which would be sufficient to maintain smelter production at capacity for six months. Early in April he revised the stockpile recommendation upward to 1,500,000 tons of concentrates, to be purchased from foreign sources, basing his case on an "increasingly critical" zinc situation, rising requirements, and declining production from domestic ores. 291/
Heikes was not the only one who thought the time had come for a statement of long-range mineral policy. Under prodding from Senator Murray's Smell Business Committee, the President asked the War Production Board on March 11 for "a complete review of the metals and minerals mining program, together with suggestions as to the proper policies to be followed with respect to 1944 needs." 292/ Responsibility for developing the information requested was delegated by Nelsen to Howard I. Young, and an answer to the President was still pending when the zinc program was laid before the Minerals and Metals Advisory Committee.
290/ Memorandum, George C. Heikes to Howard I. Young, March 29, 1943, p.9.
291/ Memorandum, George C. Heikes to Ï.Y.Elliott, April 10, 1943.
292/ Letter, President Roosevelt to Donald Nelson, March 11, 1943»
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Under the circumstances, no immediate action was taken on Heikes' recommendations. As Young put it, the course to be followed would be determined "when we have more information relative to long-term policy«w 293/
Heikes told the Zinc Industry Advisory Committee on April 9 that the outlook for an improved government mineral policy was better than it had been for the past two years; 294/ and on the 17th the policy itself was sent by Nelson to. the White House. The President passed it on to Senator Murray a week later, with his approval, and Murray made it public on April 30. 295/
Nelson stated in his letter to the President that a complete review of the minerals mining program had been made under Young's direction, in collaboration with R.S.Dean of the Bureau of Mines and that Ickes was in agreement with the policies outlined. The policies themselves were given under six headings:
^1. For strategic and critical minerals, it . is national policy to do full, detailed production planning and to make actual investments now, and in the near future, of materials, equipment and manpower for production through 1944, and through 1946 for certain metals and minerals. It is national policy to carry out exploration and determination of reasonably satisfactory sources of materials with full proving of reserves and detailed plans as to how reserves are to be exploited for .production through 1946« It is national policy to have general plans to meet contingencies, if they should .develop, for all critical metals and minerals through 1948.
* 2. It is national policy to get the maximum possible output domestically and also to bring in as much as we can from overseas.
* 3. It is national policy to make the fullest possible use of small and marginal ore deposits, subject to these limitations: (1) That the expected return in usable mineral a is sufficient to justify the use of critical materials and equipment in present operation or expansion; (2) That the return in usable minerals is sufficient to justify the use of manpower, not only in operation of the mine, but also in the construction of access roads and
293/ Minutes, Minerals and Metals Advisory Committee, March 16, 1943» 294/ Minutes, Primary Zinc Producers Industry Advisory Committee, April 9, 1943.
295/ Senate Special Committee on Small Business, Press Release, R-48, April 30, 1943.
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similar facilitating construction; (3) That such use of resources will not actually interfere with the "must” programs«
“U« It is national policy to build up stockpiles of strategic and critical metals and minerals to insure us against unforeseen developments whenever we can secure supplies of particular strategic and critical metals and minerals in excess of our ability to use them currently in production for essential uses«
”5. It is national policy that labor, materials, transportation and time to get into production, rather than money cost, are to be considered the controlling factors in deciding whether or’not to Increase production, but that the price paid shall bear a reasonable relation to the costs of production and the earning of a fair return over the costs of each separate producer«
* 6« It is national policy that metals and minerals production shall have high preference in the allocation of equipment and manpower. **
Although apparently clear and definite, Nelson’s minerals policy soon proved to be open to varying interpretations, but it served its immediate purpose« It satisfied both Secretary Ickes and Senator Murray. 296/
The Manpower Problem.—The first test of the new minerals policy, so far as lead and zinc were concerned, came in connection with the manpower problem. By the end of March, 1943, most of the soldiers furloughed for work in the mines the previous October had returned to military duty. The Western lead and zinc mines were again short-handed by more than 3000 men, with the loss in metal put at 3500 tons of lead and 7000 tons of zinc a month. The Tri-State area, surveyed a month later, showed a shortage of 1100 miners, with an estimated monthly production loss of 500 tons of lead and 2300 tons of zinc. 297/ With efforts to recruit additional mine labor falling far short of needs, the Labor Production Division of WPB urged as the only alternative a better utilization of the existing labor force. Wendell Lund, Director of the Division, recommended that development loans for mines producing less critical metals, such as lead and silver, be severely limited, and that labor and equipment from mines with low productivity of strategic metals be transferred to productive mines.
296/ For a more detailed account of the development of the April 17th • statement of policy, see attachments to the Press Release cited in footnote 295/«
297/ Memorandum, Wendell Lund to Howard I. Young, May lh, 19Ü3.
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He recalled the provision agreed upon the previous December that manpower requirements were to be considered in connection with the granting of increased premium payments, and urged that machinery for carrying out this provision be established. 298/
Following Lund's last recommendation, a Mineral Classification List was prepared under the Direction of the Mineral Resources Coordinating Division. Each of the metals divisions listed the mines within its own field in the order of their importance, and the results were checked with the Labor Production Division. These individual lists were then coordinated by John J. Croston, Chief of the Program Section of the Tin-Lead Division. The resulting tabulation was issued on June 1, 1943, being revised monthly thereafter. Mines were divided into four classes:
"CLASS I MINES, listed within metals, by mines, are those mines which are considered at the time of issuance of each classification list to be the most critical to the war economy and are the mines upon which first efforts in recruitment should be concentrated.
"CLASS II MINES, listed within metals, by mines, are essential mines to which referrals may be made of applicants for employment who do not accept employment in Class I mines whether for reasons of working conditions, location of domicile, climatic conditions, or other reasons. Certificates of separation are to be denied to employees of these mines except in unusual cases wherein the transfer desired is to a Class I mine.
"CLASS III MINES, not listed, are all mines not classified as I, II, or IV. Although no direct recruitment of employees from these mines is to be allowed, certificates of separation are to be granted to all voluntary withdrawals when transfers to mines in Class I or Class II are requested.
"CLASS IV MINES, listed as to mines, are mines whose contribution to the war effort is minor in proportion to the manpower and material utilized. Recruitment campaigns among workers at mines in this class is encouraged when such recruitment is for mines in Class I and Class II."
flinn mines were divided into "A", "B" and "C" lists in terms of productivity, the "A" list being in Class I, and the "B" and "C" lists in Class II. Only the gold mines covered by the closing order of October, 1942, were put in Class IV, but all lead mines were Class III.
298/ Ibid. See also p. 57 above.
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The issue had already been drawn in the Qiota Committee as to whether mines producing only lead, or lead in combination with such non-strategic metals as silver and gold, ought to be subsidized when the labor would be more effectively used elsewhere, and a group of test cases was turned over to the Operations Vice Chairman of WPB for decision« 299/ The question also arose with respect} to imports, and the Board of Economic Warfare representative' assured the Minerals and Metals Advisory Committee that most foreign purchases of lead had been in the form of ore or concentrates, bought for their zinc or copper content« "Except for political factors in foreign countries, we are gradually cutting down all purchases of lead«" 300/
The Tin-Lead Division, reflecting the point of view of the Industry, opposed the closing down of any mines, and Young agreed« The Division's attitude was that a mine that was closed was likely to stay closed, and that distribution of labor on the basis of productivity tables penalized the owners of lower grade ore« 301/ When the Mine Classification Lists were explained to the Lead Industry Advisory Committee, Vogelsang stressed the unpredictable nature of military requirements in justification of the large reserve of lead, and insisted that despite the easy position of the metal, "it is highly important to correct the impression that lead is so plentiful that the mines need not be operated in an efficient manner«" 302/ The labor shortages in the western non-ferrous mines grew more severe as the seasonal shift to part-time agriculture set in, and early-in June the War Department was again asked to furlough soldiers to the mines« This time the request met with a blunt refusal, which Undersecretary Patterson explained in a letter to Harry 0« King, Director of the Copper Division, on June 131
"Men with hard rock mining experience, I am told, are still engaged in mining gold, silver and other non-critical metals« I know of the arguments that are used in an effort to justify these operations, but the fact remains that their contribution toward prosecution of the war is very small« I submit that there is no warrant for asking that soldiers be turned over to work in copper mines as long as men with the very experience required for mining copper are permitted to work these nonessential mines«" 303/
299/See Evolution of Premium Price Policy for Copper, Lead and ginc, Report No» 4, Policy Analysis and Records Branch, Office of the Executive Secretary, War Production Board, pp. 28-36.
300/ Minutes, Minerals and Metals Advisory Committee, Meeting 11, May 4, 1943.
301/ Ibid.
302/ Minutes, Primary Lead Producers Industry Advisory Committee, June 17, 1943.
303/ Quoted by Clinton S. Golden in memorandum to Donald Nelson, July 7, 1943.
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The Undersecretary's letter was read at a meeting of the Production Executive Committee on June 16, and was referred to Clinton S. Golden, newly appointed WPB Vice Chairman on Manpower Requirements with a request that he report at the next meeting as to steps taken to relieve the labor shortage* 304/
Golden's report suggested the re-establishment of an interdepartmental committee similar to that which handled the labor problem in 1942, and listed various questions that could be considered by such a group* The wage problem, importation of Mexican labor, furloughing of soldiers, and better utilization of the existing labor force all were mentioned* 305/ But the problem was immediate and pressing, and only the release of soldiers to work in the mines offered promise of immediate relief* The Office of War Mobilization met on July 7 to consider a renewed request, and Golden urged Donald Nelson before the meeting to accede to the War Department's conditions* He believed the request would be granted if Nelson would support the recommendations of his June 23 report to the Production Executive Committee, and would give assurances that the policy of the gold mine limitation order was being and would be carried out* 306/
The decision of the Office of War Mobilization was favorable, and a letter asking that soldiers be released to the mines went to the Secretary of War on July 10, over the joint signatures of Paul V. McNutt and Donald Nelson* The steps taken to relieve the shortage were mentioned, and there was no attempt to dodge responsibility:
"We recognize that there are a number of persistent, deep-seated problems in this industry which will not be immediately overcome by the program of the War Manpower Commission, however effective it may be* We do not propose to neglect these problems but are convinced that immediate steps must be taken to prevent further losses of production in this industry. For this, purpose we have initiated action to import Mexican labor to the extent permitted by the Mexican Government and the opportunities for their employment in American mines. We are negotiating with the War Department for the employment of prisoners of war in open pit mines since their employment in underground mines is not permitted by the Geneva Convention. It is our firm conviction, however, that these in combination with other steps which we are now undertaking, will not suffice to meet the immediate needs and that the furloughing of soldiers for work in the mines at the earliest possible moment is absolutely essential.*
304/Minutes, Production Executive Committee, June 16, 1943*
305/ Clinton S. Golden, Recommendations on Manpower Problem in
Non Ferrous Metals, June 13> 1943»
306/ Memorandum, Clinton S. Golden to Donald Nelson, July 7, 1943«
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Patterson replied on the 14th, stating that the War Department was "presently engaged in formulating plans for the release of soldiers for employment in the nonferrous metal mining industry in accordance with the decision reached in the recent meeting of the Office of War Mobilization." He named a representative to handle the matter, and asked that one be designated by WPB. Nelson’s choice was Hiland G. Batcheller, Operations Vice Chairman, but at Batcheller’s request Golden was designated instead. 307/ A week later Major General Lucius D. Clay told the Production Executive Committee that "steps were completed to process the return of approximately 4500 miners from the Army at the rate of 1000 per week, the first thousand to be returned starting August 12." The soldiers were to be recalled to the Army if they stopped working in the mines. 308/ On September 17 Patterson informed Donald Nelson of the completion of the program:
"The project concerning the release of soldiers for employment in non-ferrous metal mines has been completed, four thousand five hundred forty six having been employed by the mine operators and trasnferred to the Enlisted Reserve Corps at Fort Douglas, Utah, between 12 August and 12 September 1943» I should like you td know that H.G.Batcheller, Jr., Clinton Golden, Howard I. Young, Allen Buchanan and their assistants cooperated fully with the War Department in the execution of this program. Through the close cooperation of all agencies concerned, the project was completed without incident and ahead of schedule
The Western zinc mines received 1,048 men and 83 went to the Tri-State district. Although not more than half of the soldier-miners had ever had underground experience, they were regarded by the operators as excellent material, and by October were rapidly acquiring the needed skills. Under the directive releasing the soldiers, they were forbidden to leave the mines to which they were assigned for at least 90 days. 309/
The End of Expansionism«—Heikes was a thoroughgoing expansionist in his attitude toward the zinc program, and his March report was in effect an ultimatum. Even before his recommendations as to individual, projects had been considered, he realized that his long-range program as a whole would not be acceptable. Actual brass mill output was far below the estimates on which the zinc requirements were based, and the military program was more likely to be cut back, as he had foreseen in January, than it was to be increased as he had argued in March, No actual criticism of his program had yet been made, and it was three months before the situation was clarified, but Heikes realized, perhaps earlier than his colleagues, that the period of balance between supply and requirements was at hand. When an attractive offer from private industry was made there was nothing to hold him, and Heikes tendered ¿22/ Letters, Robert P. Patterson to Donald Nelson, July"14, 1943;
Nelson to Patterson, July 15, 1943; memorandum, Batcheller to E.A.tacke, Jr., July 30, 1943; Nelson to Patterson, August 2, 1943»
¿08/ Minutes, Production Executive Committee, Meeting 37, July 21, 1943. ¿02/ Minutes, Western Zinc Mining Industry Advisory Committee.
October 12, 1943. *
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his resignation in May. He was succeeded by James Douglas, a mining engineer who had joined the staff of the old Copper-Zinc Branch in June 1941 > but was then attached to the Mining Division.
The long-range mining projects Heikes had recommended in March were formally submitted to the Mineral Resources Operatic Committee early in April, and were considered on the 9th of that month. The most important items were plants for the retreatment of waste from smelters and concentrators. These slag and tailings piles were called by Young the largest untouched mines in the country, but considerable expenditure of equipment would be required to retrieve the metal left behind by the less efficient processes of an earlier day. The proposed slag treatment plants at East Helena and El Paso were approved by the Committee, which also authorized the construction of the Treasury Tunnel to open up the Black Bear Mine of the Idarado Mining Company. The cost of the Idarado project was estimated as $1,306,000, and maximum production would not be reached before 30 months. The Leadville Drainage Tunnel was also approved, with the understanding that a special appropriation would be asked from Congress, and that the Bureau of Mines would supervise the work. The impetus oi Heikes1 expansionist policy carried forward through the summer, and by August the War Production Board had approved, or had unde* consideration, mining and milling projects which would yield 150,000 tons of zinc when they came into full production. 310/
Consideration was also given to the desirability of extend-, ing United States premium prices to Canadian sub—marg i n^l developments. At the same time every effort was made to increase the flow of zinc concentrates from mine to port in Australia and Argentina, and from mines in Mexico to smelters in the United States. To this end the movement of lead ore and bullion from Australia to the United States and the United Kingdom was suspended in favor of zinc concentrates. 311/
Paralleling the domestic development program, and submitted at the same time, were two foreign projects sponsored by the Board of Economic Warfare. These were the Almatea Mine in Mexico and the Matilde Mine in Bolivia. Both would require 18 months to two years to get into production, and both had previously been rejected because of the time factor, their reconsideration at this time being justified only in terms of the long-term development program announced by Nelson in April. The Committee approved both projects "in principle," subject to similar approval by the Facilities Committee, after which full data were to be presented. 312 / The question raised by these two projects 242? Memorandum, George C. Heikes to Howard I. Young, April 8, 1943;
Minutes, Mineral Resources Operating Committee, April 9, 1943; Combined Raw Materials Board, Addendum to Zinc Report No. 3. August 2/1943.
211/ Combined Raw Materials Board, Addendum to Zinc Report Nb. 3. August 2, 1943.
212/ Minutes, Mineral Resources Operating Committee, June 1, 1943.
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was clearly the question as to whether further expenditure of money and materials for increasing sine production two years ahead was justified by the long-range need for sine, and it was in terns of these projects that a preliminary answer to the question was given«
The Matilde and Almatea projects, with the Mineral Resources Operating Committee’s approval in principle, were transmitted to Operations Vice Chairman Donald D. Davis on June 5, and by him forwarded to J« A. Krug, who had succeeded Eberstadt as Program Vice Chairman in April* 313/ Krug passed the projects along to his Foreign Division, where exhaustive analyses were made, and development of th© two mines was again approved "in principle.” 314/
The Statistics Division, at about the same tine, began studying policy questions raised by an actual increase in sine stocks resulting from "disappointing brass mill output." 315/ The whole supply and requirements balance sheet came under review before the study was complete, and it was in the light of its own findings that the Statistics Division reviewed the Matilde and Almatea nine projects when an opinion was asked by Vice Chairman Batt.
The whole expansion program necessarily hinged on the question of supply and requirements. If there was an actual or prospective shortage of sine, then new sources of supply must be found; but if requirements were being comfortably met, and the future indicated no significant rise in demand, then expansionism would be difficult to justify. Heikes1 estimates of August 1942, indicated a surplus of 26,000 tons for that year and deficits of 56,000 tons and 60,000 tons for 1943 and 1944, but forecasts made at about the same time by the staff of the Combined Raw Materials Board showed surpluses for 1942 and 1943 of 235,000 tons and 178,000 tons respectively. By the middle of 1943 the actual balance sheet for the previous year was available, and showed that supply had exceeded consumption by 154,000 tons. Although Heikes had overestimated domestic mine output and underestimated requirements, the surplus was still 128,000 tons greater than he had reckoned. The major reason was that imports were much greater than had been anticipated. 316/
By March of 1943, when his long-range program was prepared, Heikes was aware of the source of his error, but he also foresaw rising requirements and diminishing domestic supply, which meant still greater reliance on foreign concentrates. It was to insure this foreign supply that the Matilde and Almatea projects were proposed, while the domestic expansion program was designed to arrest if possible the decline in United States mine output.
313/ Memorandums, H.I.Young to Donald D. Davis, June 5, 1943;
Davis to J.A.Knig, June 15, 1943«
314/ Memorandum, E.A.Peyser to J.A.Krug, July 19, 1943.
315/ Memorandum, E.B.George to Charles E. Kohlhepp, August 28, 1943.
316/ See Appendix F.
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Reviewing the zinc situation in August of 1943» however, the Statistics Division concluded that all essential requirements through 1944 would be met, and that the 1942-44 period would show an increase in stocks of five months’ supply above working levels. Assuming Tri-State production during 1945 and later years at half the rate achieved during the first six months of 1943, and assuming all Australian imports cut off, supplies available in 1945 would still be only 10,000 tons under estimated requirements if forecasts of other domestic and foreign supplies were accurate. The continuance of current consumption levels was assumed, with brass mill output increased by 15 percent. The Matilde project would yield 50,000 tons a year, but the same quantity of metal could be saved by imposing a 20 percent reduction in galvanizing.
"In view of the above considerations, investment of the substantial amount of equipment involved in the Matilde project would have to be justified by one or more of the following: (1) desire to cover the possible small deficit above predicted on extreme adverse contingencies, (2) the policy of alleviating the United States manpower shortage by increasing our reliance on foreign sources of supply, (3) the decision to maintain the present level of galvanizing, and (4) the decision to increase total supply (after 1945) as a general insurance policy against unforeseeable contingencies." 317/
The policy question involved was not specifically resolved, but the Almatea and Matilde projects were dropped.
Revised Requirements.— It was on August 28, 1943» that the Statistics Division’s estimates of supply and requirements for sine were transmitted to the Program Vice Chairman. A report along the sane lines had already been completed by the Zinc Division, and was considered by the Minerals and Metals Advisory Committee on September 1. 318/ The supply and requirements figures presented by Douglas showed a surplus of 76,561 tons for 1943» and of 13»000 tons for 1944« He concluded that maintenance of production was no longer dependent upon financing of new mine and smelter projects, but on the supply of labor. Four specific recommendations were made?
"(1) That we continue our present conservation measures throughout the balance of the year after which they nay again be reconsidered.
317/ Memorandum. Herbert B. Woolley to W. L. Batt. August 21 (Revised August 24)» 1943»
318/ Memorandum, James Douglas to Howard I. Young, September 1, 1943• An earlier draft, dated August 30, was withdrawn.
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*(2) Additional men be made available to zinc mines and smelters where needed»
”(3) Present labor forces be maintained through deferment of miners and smelter workers«
•(4) No government financing of new projects for production of zinc shall be approved« This policy should be the subject of review in the second quarter of 1944» * 319/
The last recopmendatipn was expanded to make clear the relationships of other agencies to the program. No zinc mine not then operating was to be brought into production unless it could produce profitably at 111 a pound; the RFC and its subsidiaries were to be informed of the recommendation; and the Geological Survey and Bureau of Mines were to continue their exploration work, by way of insurance.
The Zinc Division felt, however, that if requirements for 1945 were to be as high as those for 1944» it would be necessary to use American marginal mines, which would have to be brought into production shortly« The Division objected to reliance on labor productivity tables in assigning workers for fear that lower grade mines, would be compelled to shut down, and that long range development work would be neglected in order to keep up current output« 320/
The supply and requirements figures given in Douglas’ report differed in many respects from those worked out by the Statistics Division, but the greatest single difference lay in brass mill requirements.
It was a difference of long standing. Zinc requirements for brass were estimated by the Copper Division, and as far back as December, 1942, Heikes had noted that the Statistics Division’s estimates were considerably lower. 321/ The question of reconciling the two had been deliberately left to the Mineral Resources Coordinating Division, organization of which was then pending. 322/ No action in this direction was taken, however, until the Zinc Division’s September 1, 1943, report reached the Minerals and Metals Advisory Committee.
319/ Memorandum, James Douglas to Howard I. Young, September 1, 1943; Verbatim Transcript, Minerals and Metals Advisory Committee, Meeting Oil, September 1, 1943«
320/ Verbatim Transcript, Minerals and Metals Advisory Committee, Meeting Oil, September 1, 1943»
321/ Memorandum, George C. Heikes to Walter E. Heller, December 21, 1942« 322/ Memorandum, J« L. Phillips to F. Eberstadt, December 21, 1942.
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When the report was discussed, Herbert B. Woolley, who had prepared the Statistics Division estimates, expressed the opinion that the Copper Division's brass figures had been too high for the last six months« 323/ It was agreed that the points of difference should be cleared up«
The estimated zinc requirements for brass during 1943 as given in the Zinc Division report were based on actual consumption in the first quarter, Divisional Requirements Decisions for the second and third quarters, and a Copper Division estimate for the fourth quarter, with the fourth quarter rate projected through 1944« The Statistics Division figures were based on actual brass mill capacity, with a fifteen percent allowance for expansion of facilities« The Zinc Division reconsidered its estimates, and arrived at a new figure for 1943 based this time on actual consumption during the first and second quarters, allocations for July and August, and requests for allocation for September« The 1944 figure assumed a requirement of 40,000 tons a month« While the discussions were under way the British Lend-Lease requirements were sharply cut« A new report was presented by Douglas on September 10«- The three sets of figures are compared in the table below«
Comparison of Estimates, Slab Zinc Supply and Requirements 1943 and 1944 (in thousands of short tons)
Zinc Div, Sept. 1 _ 1943_ Zinc Div. Sept. 10 1944
, Stat. Div. Zinc Div« Stat« Zinc Div. Sept. 10
Sept. 1 Div.
New Supply Domestic Production Primary 987 945 960 1,020 944 960
Secondary 34 46 34 35 46 35
Imports 61 67 58 54 56 _21.
Total 1,082 1,058 1,052 1,109 1,046 1,068
Requirements prass Mill 447 411 ”413 * 540 500 480
Other Domestic 453 422 435 468 420 464
Export 106 106 91 88 88 28
Total 1,006 939 939 1,096 1,008 972
Surplus 76 119 101* 13 38 96
* 11,700 tons deducted for "inventory adjustment."
323/ Verbatim Transcript, Minerals and Metals Advisory Committee, Meeting 011, September 1, 1943, PP» 21-22«
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The recommendations of the earlier report were left unchanged, but the protest against the classification of mines on the basis of labor productivity tables was amplified»
The altered zinc situation was reviewed on September 14 by the Minerals and Metals Advisory Committee, and the new estimates met with general approval* Colonel Church thought the new brass mill requirements more realistic than the old, though they fell below the goal of the Army munitions program. It was inevitable that the whole matter of policy with respect to zinc would soon be raised, and Young seized the occasion to anticipate some of the questions the Committee would have to answer:
"I think there should be one other thing stated here, because you hear the statements made on account of the fact that a metal is getting less critical, that we should adopt different policies. The fact must not be lost sight of that the only reason that these metals are becoming less critical is on account of the fact that all agencies have put forth every known effort to bring in production, and if we should reverse our policy to too great an extent, we would find ourselves back in a very critical position, no doubt so far as domestic production is concerned by the end of »44." 324/
If the Zinc Division was not yet ready to cut back production to conform to the changed requirements, however, it was entirely willing to call a halt to further expansion. At the suggestion of the Division three pending projects were taken up at the September 3 meeting of the Minerals Resources Operating Committee, and their deferrment or cancellation was unanimously recommended. These were a Waelz plant at Jean, Nevada, which had been hanging fire since early in 1942, and the recently proposed zinc fuming plants at Helena, Montana, and El Paso, Texas. ”This action was taken on account of the changes that have been brought about in the requirements for lend-lease account.” 325/ At another meeting of the Operating Committee two weeks later the recommendation for a third zinc fuming plant, at Chihuahua, Mexico, was withdrawn. 326/
Verbatim Transcript, Minerals and Metals Advisory Committee," Meeting 012, September 14, 1943» p» 15«
325/ Memorandum, Howard I. Young to James Douglas, September 3, 1943; Verbatim Transcript, Mineral Resources Operating Committee, Meeting 06, September 3, 1943*
326/ Minutes, Mineral Resources Operating Committee, Meeting 08, September 17, 1943.
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Reconsideration of Policy,—The problem that faced the War Production Board when the supply of any metal became relatively easy was whether production should be cut back to the level of requirements, thereby freeing men and materials for other more critical programs, whether the surplus should be stockpiled against future needs, or whether restrictions on civilian use of the metal should be relaxed. This problem was posed, so far as lead was concerned, early in 1943, when the stockpile reached a maximum of 265,000 tons. The issue was debated in terms of subsidy payments for marginal mins production.
The test case lead mines already referred to 327/ served as a point of departure for the argument. These mines produced only lead, or load in combination with non-critical metals, and the labor advisor to the Quota Committee objected to granting *B" quotas for them bn the ground that lead was not critical and that the labor could be more advantageously used in other mines in the same areas. The problem was one of the first to be faced by Hiland G, Batcheller after he became WPB Operations Vice Chairman in July, and on the reoommendeti on of the WPB members of the Quota Committee, who reflected the expansionist point of view, he decided in favor of the extended subsidies. The owner of one of the mines in question, meanwhile, had written to Senator James E, Murray complaining of the delay in handling the case, and Murray wrote to Executive Vice Chairman Charles E, Wilson on July 2, In the exchange of correspondence, Murray cited the April declaration of policy as indicating that production from marginal mines was to be encouraged, 328/
Wilson consulted Clinton S, Golden before giving Murray a definite answer, but on July 20, 1943 he notified the Senator that a "B" quota for the mine in question would be denied:
"In further reply to your letter of July 2, acknowledged on July 5, the application from Mrs, Loretta L, Rives, owner of the Star Mine and Mill, located in Montana, for additional government subsidy for her property has been disapproved,
"Stockpiles of lead in Mexico and Canada, as well as in the United States, are more than sufficient to meet expected needs of the war programs.
"In addition, the shortage of miners for properties producing copper, zinc, molybdenum and other strategic metals, the supply of which is extremely critical, has necessitated the
327/ See p, ¿6 above,
328/ For details and documentation, see Evolution of Premium Price Policy for Copper* Lead and 4ino* Report No, 4, Policy Analysis and Records Branch, Office of the Executive Secretary, War Production Board,
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establishment of a priority list or ’Minerals Classification List' as a basis for operations of the USES in supplying workers for mine properties.
ttTo meet the labor shortage in mines producing such critical materials, the War Department is completing plans to furlough soldiers to such mines on the understanding the War Production Board will curtail expansion in non-essential mining properties.
"The request of Mrs. Rives has been given thoughtful consideration. The decision reached is believed to be in the interests of the greater benefit to the war.”
Batcheller*s approval of the revised quota for the same mine was dated July 22, but was given without knowledge of Wilson’s action. When the inconsistency was called to his attention the test cases were reconsidered in the light of labor,and supply conditions. At the same time the Tin-Lead Division was revaluating its program, and on September 23 Vogelsang presented a report in which recommendations almost identical with those of Douglas’ September 10 report were made. He wanted producing mines kept operating, but recommended that no new projects involving government financing be sponsored, and that no lead mine not then producing should be opened unless it could show a profit at 9rl/4^ for lead. 329/ To conform to these recommendations, and to the position already taken by Wilson, Batcheller on October 5 reversed his opinion on the test case mines. 330/
After the statistical adjustments and Lend-Lease cut-backs of September, the Zinc Division also faced a potential surplus. 331/ A revision of the zinc conservation order, M-ll-B, was in circulation at the time the new requirements figures were made known. The changes were mainly for clarification and ease of administration, but a new draft was prepared on September 8 which reflected in some measure the changed situation, by eliminating the existing distinction between Prime Western and other grades of zinc. 332/ The order was issued on September 29, and was discussed with the Industry Advisory Committee on the 30th. Young suggested the possibility of abandoning the existing system of allocation and relying on the conservation order for the necessary degree of control, but the industry members were strongly opposed to any change. If zinc were more plentiful, it could be made available in larger amounts, but a general fear was expressed that any relaxation of control would have a bad psychological effect, both on labor and on the consuming public. 333/
¿22/ Memorandum, Erwin Vogelsang to Howard I. Your«, September 23, 1943. 232/ Memorandum, H. G. Batcheller to F. H. Hayes, October 5, 1943 331/ War Progress, Number 159, October 2, 1943, pp. 8-10. Also Appendix F.
332/ Memorandum, James Douglas to Hugh Jackson, September 8, 1943.
333/ Minutes, Primary Zino Producers Industry Advisory Committee, September 30, 1943.
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The stockpile was also used by the Zinc Division as a vehicle for absorbing the surplus» On September 21 Douglas recommended the purchase for stockpile of 120,000 tons of domestic slab zinc and 150,000 tons of foreign metal during the remainder of 1943 and 1944, bringing the recommended total to 280,000 tons of domestic zinc and 150,000 tons from foreign sources. 334/ He followed up on October 8 with a proposal for purchase of 1,100,000 tons of foreign concentrates during 1944, to be added to the stockpile of 1,500,000 tons from foreign sources already authorized. 335/
The October list of critical materials prepared by the WPB Conservation Division shifted zinc from Class I to Class II, indicating that the supply was now adequate to meet all military and essential civilian needs. On the 12th of that month Program Vice Chairman J.A.Krug told the ïïar Production Board that a fairly satisfactory balance for zinc as well as for lead had been achieved, and stated that, barring greatly aggravated labor shortages, it was unlikely that any 1944 program would suffer from shortages of either metal. 336/
A decision on policy was called for, and it was made by the Production Executive Committee, after the situation had been discussed with Senators and Representatives from the mining states. It was agreed that "When a safe stockpile of any mineral or metal had been accumulated, further importation and production will be brought into balance with consumption." 337/ No determination was made, however, as to what might constitute a "safe stockpile." Batcheller explained the policy to the Operations Council on October 21, and its application to lead and zinc was discussed by Howard I. Young. Both metals were in an easy situation, and no "increase in production or the production from new mines" would be authorized. 338/ A press release issued on October 27 explained the changed policy to the public. "The Board has acted," the release declared, "because of three changed factors in the mineral production program, these being increased mine production, revised military requirements and a greater need for marginal manpower than for marginal minerals." The statement went on to explain that "B" premiums for lead and "B" and "C" premiums for zinc had been denied to mines not already operating, or having a low labor productivity and
334? Memorandum, James Douglas to W.Y.Elliott, September 21, 1943? letter, Elliott to Jesse Jones, September 24, 1943.
335/ Memorandum, James Douglas to W.Y.Elliott, October 8, 1943.
336/ Minutes, WPB, Meeting 71, October 12, 1943.
337/ Quoted in Minutes, Operations Council, Meeting 3, October 21, 1943. So far as the record goes, the decision of the Production Executive Committee actually referred only to ferro-alloys, but was apparently interpreted by the Operations Vice Chairman as applicable to all minerals and metals. Cf. Minutes, Production Executive Committee, Meeting 46, October 6, 1943.
333/ Minutes, Operations Council, Meeting 3, October 21, 1943.
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located in labor shortage areas; and that new zinc projects were no longer being financed by the government* 339/
The zinc situation was taken up by the Requirements Committee on November 5. Douglas’ report showed supply and requirements figures unchanged from those of September 10, 340/ but it was already known in some quarters that the military demand for brass would be still further reduced for 1944* 341/ The discussion revolved around the premium price plan, and its relationship to total production. The supply figures for 1944 were postulated on the continuance of premium payments, and Douglas estimated that from 22 to 27 percent of the output might be lost if the ”B” and ”C” premiums were withdrawn. He strongly urged that all zinc mines then operating be kept in production. ”In response to the Chairman’s inquiry whether anyone doubts the wisdom of continuing premium price payments on zinc production, no response was re ce ived.” 342/
Operations Vice Chairman Hiland G. Batcheller was more definite in his reaction to the problem* On November 17 he forwarded a memorandum to the Production Executive Committee, outlining a specific course of action:
”1 consider it essential that the Premium' Price Plan be revised so that its objective will be to produce at a minimum cost of labor, materials and money the required quantity of non-ferrous metals rather than continue keeping all mines in production without regard to cost or productivity* Such a revisior iay evoke charges that we may lose some metal and that we are closing mines which probably cannot again be re-opened in time to serve the war purposes. Therefore, in order not to provide any basis for such charges, I recommend that the following actions be taken:
”1. The Stockpiling and Transportation Division and the Requirements Committee shall make a prompt determination of the stockpiles required for copper, lead and zinc, taking into account improved ocean shipping, revised military requirements .and manpower shortages.
339/ War Production Board Press Release 4496
340/ Requirements Committee, Document No. 2002, November 1, 1943.
341/ Statement by Paul Linz to the author, November 5, 1943. On November 20 the Army announced the imminent closing of the huge Lowell ordnance plant of the Remington Arms Company because enough ammunition was on hand "for any crisis, however unexpected.” New York Times, November 21, 1943.
342/ Minutes, Requirements Committee, Meeting 99, November 5, 1943.
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”2. The Requirements Committee shall promptly present a determination of supply and requirements of copper, lead and zinc for the year 1944 based upon a detailed breakdown of the most recent military and essential civilian requirements program,
*3. The Stockpiling and Transportation Division shall issue directives to the Office of Foreign Economic Administration to purchase the maximum amount of copper, lead and zinc (in ores, concentrates and refined metal) which can be obtained from foreign sources. This recommendation is made because of:
”a. The manpower shortage in the United States.
”b. The fact that the prices paid for non-ferrous metals produced domestically are substantially higher than for those produced abroad,
”4* If after providing for the required stockpiles, supply exceeds requirements, the non-ferrous metals divisions shall be instructed to cut back domestic production to achieve a proper balance between supply and requirements.
”5. The Requirements Committee shall be instructed that there shall be no general relaxation in requirements of copper, lead and zinc so long as it is necessary to meet requirements out of premium price metal.
”Pending these determinations, I have instructed the Quota Committee that lower quotas shall currently be denied to lead and zinc mines having a relatively low labor productivity and located in areas in which there is a serious shortage of labor, provided investigation shows that the men to be released will be used in more productive mines or other essential industries. Because of the work involved, this instruction need not, for the present, apply to small mines.”
In a memorandum to Batcheller three days later Young pointed out some of the difficulties involved in eliminating B and C quotas. Tri-State production would be reduced by more than 50 percent, but the concentrates from this area were richer than those produced elsewhere, and so required less labor and fuel for conversion into metal. The Tri-State zinc ores, moreover, averaged eight pounds of cadmium per ton, or 100 percent above the average for Western and foreign ores. "A change in the policy on quota that would substantially reduce Tri-State production will change our over-all picture. If the requirements of zinc are reduced by 100,000 to 200,000 tons, then we can eliminate first the C quota and later the B quota” but a reduction in cadmium output would
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have to be accepted as a consequence» 343/ Young's memorandum was referred to Executive Vice Chairman Charles E» «Vilson, who replied on November 29» answering in effect both Batcheller and Young»
"It is my feeling that we cannot at this stage of the war risk the elimination of over 50% of the Tri-State production, particularly in view of the fact that if some of these mines are abandoned we may permanently lose the zinc which would otherwise have been produced from the old and high-cost mines approaching exhaustion of reserves» This point was forcefully brought out by Colonel Boyd on the Requirements Committee»
"A further point that supports this policy is the present difficulty in maintaining zinc production in Australia due to a labor shortage and an announced intention on the part of the Australian Government not to hold the production at the maximum quota set»
"Transportation difficulties and political considerations may also affect the production and import of zinc which we have been counting on from the Argentine. I should prefer, therefore, to wait upon any change in production in the Tri-State area in particular until it is certain that the requirements of zinc can be fully met and a safe stock provided against contingencies.
"If the requirements are reduced within the next few months we should then re-examine this picture with respect to the premium price plan and attempt to work out savings where the manpower can be used to meet needed production." 344/
If it was still too early to risk a reduction in premium prices, however, it was not too soon, in the opinion of the Zinc Division, to reconsider the long-range program, and on November 20 Douglas recommended that both the Idarado and Leadville projects be discontinued. 345/ The recommendation was "predicated on the present easier outlook for zinc especially as regards the accumulation of concentrate and slab stocks at the end of 1944»n The projects were not brought before the Mineral Resources Operating Committee immediately, and on December 9 Douglas renewed his request that they be dropped. 346/ Young replied in two separate memorandums,
343/ Memorandum, Howard I. Young to Hiland G. Batcheller, November 20, 1943.
344/ Memorandum, C. E. Wilson to Howard I. Young, November 29, 1943. (Drafted by W. Y. Elliott and signed by E. F. Jeffe.)
345/ Memorandums, James Douglas to Howard I. Young, November 20, 1943. 346/ Memorandum, James Douglas to Howard I. Young, December 9, 1943.
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both dated December 13. He regarded the Leadville drainage tunnel as no longer within the jurisdiction of the War Production Board, since the work was being carried on by the Bureau of Mines under a special Congressional appropriation» Young asked that reconsideration of the Idarado project be delayed until the report of a Zinc Division engineer then on the ground was received» 347/
Douglas wrote another memorandum on Idarado, dated December 18, but owing to the absence from Washington of the Bureau of Mines representative, it was January 21 before the question came before the Operating Committee» At that time the Committee unanimously rejected Douglas’ recommendation and voted to continue the project as originally contemplated» At the same meeting, however, the stockpiling of concentrates at Jean, Nevada, was discontinued as requested by Douglas on November 25» 348/
Relaxation of Controls.—The question of overall policy with respect to lead and zinc was again raised in connection with amendments to the control and conservation orders» An amendment to the basic lead order, M-38, was circulated early in December, and was issued on the 24th» The only important change was to permit quarterly rather than monthly reports by consumers, but even this slight degree of relaxation was questioned» 349/ The lead position was still relatively easy, but production was declining, and imports were lower than in 1942» The balance was being maintained only by drawing from the stockpile, which had been reduced from the peak of 265,000 tons reached in the spring of 1943 to 1^5,000 tons by the end of the year» 350/ To aid in obtaining labor for the mines, lead had been raised from Group 3 to Group 2 on the Conservation Division’s Material Substitution and Supply List, indicating that while the metal was available in sufficient quantity to meet all military and essential civilian needs, it could no longer be freely substituted for other materials» No change in control other than the change in reporting provisions was therefore proposed»
For lead the question was one of balance of supply and requirements, but without an accumulating surplus» The contemplated amendment to the zinc conservation order, on the other hand, raised the issue of relaxation of restrictions on civilian use of the metal. Stated in the form of an amendment to General Conservation Order M-H-B, the new order proposed to except from the existing
347/ Memorandums, Howard I. Young to James Douglas, December 13» 1943.
348/ Minutes, Mineral Resources Operating Committee, Meeting 022, January 21, 19443 memorandum, Young to Douglas, January 21, 1944. 349/ Minutes, Order Clearance Committee, Meeting 548, December 22, 1943. 350/ Tin-Lead Division, Report on Lead Supply and Demand, Requirements Committee Document No» 3013, March 10, 1944»
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limitations various items in favor of which appeals had been extensively granted. Among these were closures for glass containers, electric motors, pulleys for power transmission, and various repair parts. The use of zinc in the manufacture of weather stripping and sundry other items was also to be permitted, insofar as existing limitation orders allowed. When the amendment was circulated during December the Army and Navy Munitions Board pointedly raised the policy question. It was granted that the additional 15,000 or 20,000 tons of zinc released by the new order would not endanger the supply available for military uses, but this was not the sole consideration involved.
nThis Board desires to call attention to the fact that since the early part of 1942 a subsidy plan has been in operation for the purpose of stimulating the production of zinc. Moreover, manpower shortage problems have arisen with respect to the production and refining of zinc ore, and a substantial number of men have been released from the Army to work in zinc mines.
"This Board is of the opinion that the need for a policy determination is indicated on the use, beyond that presently permitted, of any metals which are being produced under a subsidy plan,, especially where the supply exceeds the essential war uses. This Board recommends that the subject proposed amendment should not be issued independent of the determination of such policy." 12/
The Order Clearance Committee discussed the amendment on December 23, but reached no conclusion, holding the matter over for further study. At the next meeting of the group, on December 27, the comments of the Army and Navy Munitions Board were read. The Committee then discussed at length the policy question involved. "It was the consensus of the Committee that as a prerequisite to intelligent consideration of the proposed amendment, and similar amendments affecting other metals, more information should be available regarding the overall policy relative to subsidy payments, including whether this and similar amendments are predicated on the continuation or the elimination of such subsidies." 352/ The Chairman, Thomas C. Blaisdell, Jr,, expressed agreement with the Committee's views, but announced his intention to approve the amendment. At the same time, however, he proposed to point out to the Program Vice Chairman the need for policy decisions in the field. 353/ The amendment was issued on January 1, 1944.
351/ Memorandum. F. R. Denton and L. B. Scott to Thomas C> Blaisdell. December 22, 1943.
352/ Minutes, Order Clearance Committee, Meeting 550, December 27, 1943. 353/ Another amendment to M-ll, removing zinc scrap and remelt zinc from control under the order, and making various technical changes was issued on February 21, 1944.
23-698 P1041 bu
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The possibility of relaxing orders relating to material resubstitutions was reviewed early in February by a special committee representing various Industry and Materials Divisions, including Zinc and Tin-Lead. The Committee recommended amending or revoking a substantial list of “L" and "M" orders to conform to the existing supply situation. 354/ In line with these recommendations, sine was presently made available for still wider use. An amendment to Limitation Order L-68, issued March 2, authorized use of the metal in zippers and certain other garment fasteners; and L-188 was amended two weeks later to permit use of zinc as coating for the metal parts of loose leaf and other binders. 355/ Another amendment to the zinc conservation order M-ll-b, made public on March 9, added various new items to the permitted list, including mechanical pencils, dry cell batteries and portable electric lights, domestic electric ranges, coal stokers, and motorized fire apparatus. 356/
Stockpiling Policy.—On January 6, 1944, the Program Bureau issued a detailed report on the Outlook for Zinc. 357/ The supply figures for 1944 given in this report were the same as those estimated by the Zinc Division in September, but the requirements estimates reduced brass mill consumption from the 430,000 tons given in the earlier report to 392,000 tons. The Zinc Division and the Program Bureau agreed on a figure of 1,030,000 tons for total requirements, including export, and the Program Bureau estimates showed a supply figure of 1,309,600 tons. The Zinc Division estimated the smaller total of 1,249,600 tons. The prospective surplus for 1944 was thus between 220,000 and 280,000 tons.
"The need for a stockpile in meeting war requirements and anticipating contingent reductions in supplies will comfortably be met by a stock of zinc metal and concentrates of 700 thousand tons - even if a program were adopted to reduce new zinc supplies by the yearly rate of 200 thousand tons. Such a stockpile, which is 8 months’ total stock, is 300 thousand tons in excess of working stocks. It will be reached by January 1, 1944, or early in 1944 under present policies. The cost in terms of manpower, resources, and facilities of increasing the stockpile as much as present
354? Memorandum, A. H. Bunker and L. R. Boulware to various Division Directors, "Revision of Orders Relating to Material Resubstitu-tions,” final revision, February 14, 1944»
355/ WPB Press Release 5099, March 2, 1944; WPB Press Release 5205, March 16, 1944«
356/ WPB Press Release 5147, March 9, 1944.
357/ Program Bureau Staff Report, *The Outlook for Zinc," Requirements Committee Document No. 2043, January 6, 1944. Prepared by Herbert B. Woolley.
33*098 P100 bu
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supply estimates make possible is indicated by the subsidy under present premium prices extended to marginal zinc -165 thousand tons are mined domestically and paid for at B and C premium prices of 13-3/40 or 16-1/20 respectively, as compared to the ceiling price of 8.250 per pound of recoverable zinc. To the mine owner in the Tri-State these prices provide a subsidy 108 or 161% respectively above what the ceiling price yields, and in Western States similar subsidies prevail.
"Setting a limit to the stockpile below a million tons, which might be reached in 1944 on present policies, implies that more zinc will be produced than is required to meet all reasonable contingencies. If the stockpile is set at 700 thousand tons and if the new uses amounting to 25 thousand tons are approved, the surplus of new supplies over requirements in 1944 is estimated to be from 195-255 thousand tons.”
It was recognized that the problems raised by the surplus of zinc in connection with the premium price plan were not susceptible of a quick or easy solution, but for the consideration of the Requirements Committee the Program Bureau proposed that:
*1. The use of zinc be permitted where significant savings in manpower, facilities, or other materials justify, as recommended by the Conservation Division
• up to 25 thousand tons per year, raising the total requirements for 1944 to a maximum of 1,055.
*2. An adequate stockpile objective for war needs is 700 thousand tons of zinc in all reported stocks of metal and concentrates including working stocks. A stockpile in Government hands of 300 thousand tons is the objective for WPB protection of supply.
"3. Allowing for these requirements for use and stockpile, new supplies will exceed requirements in 1944 by at least 195 thousand tons of recoverable zinc.
"4. Except as noted above in (1), no general relaxation in zinc requirements shall be permitted so long as it is necessary to meet requirements out of premium price metal."
The Requirements Committee took up the zinc situation on January 10, with E.B.George? Chief of the Materials Branch of the
73-698 P106 bu
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Statistics Division acting as spokesman. 358/ The supply and requirements estimates of the Program Bureau report met with general approval, but Young questioned the wisdom of cutting back the premium payments before the stockpile had reached 800,000 or 900,000 tons, including producers1 and consumers* stocks. Major General Lucius D. Clay, Assistant Chief of Staff for Materiel, Army Service Forces, went even further than Yeung. He thought it too early to estimate what the stockpile figure should be, and indicated that the demand on the score of munitions might be greater for 1945 than for 1944« Whenever a surplus developed, the soldiers would be withdrawn from the mines, which would automatically cut down production. As Rear Admiral Henry Williams of the Naval Office of Procurement and Material put it, in expressing his* agreement with General Clay, it was meh too soon "to talk* about relinquishing any production until we go along with the proposed offensive and know a little more about what to look forward to.*
The meeting ended, as had previous Requirements Committee discussions of the subject, without any definite decision having been made, but a change in emphasis in the whole materials program was clearly indicated. So far as lead and zinc were concerned, the production problem was solved by the end of 1943, and the attention of policy making officials was definitely turned to the alternatives presented by an excess of supplies over requirements. These alternatives were succinctly stated by Krug in a report to the War Production Board, dated January 7, 19441
"When the materials potentially available are in excess of requirements for critical programs - a condition now at hand in a number of important fields - three alternatives are available for meeting the situation, either separately or in combination:
"1. Additional stockpiling;
M2. Program expansion, that is, increased consumption for purposes heretofore limited, either
(a) by resubstitution for presently more critical or less satisfactory materials, or
(b) in expanded programs of non-military production;
"3. Reduced production of the materials.* 359/
358/ Verbatim Transcript. Requirements Committee» Meeting 107, January 10, 1944, PP. 41-70.
359/ Materi al s and Stockpiling, WPB Document No. 267, January 7, 1944. See also War Progress, No. 176, January 8, 1944.
S9**B9t ^107 bu
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The Board took no immediate action, but its meeting of January 11 ended with Nelson’s promise that 11 consideration of unresolved policy questions raised by Mr« Krug will be held over for full discussion in the near future.* 360/
The discussion was resumed at the next meeting of the Board, January 25. Krug presented a summary statement of his recommendations on stockpiling, 361/ listing six considerations to be employed in calculating stockpile goals. These were:
"(a) The possibility of losing producing territory to the enemy.
"(b) The possibility of interruption of imports owing to loss or diversion of transportation facilities such as sinkings or the opening of a second front.
*(c) The possibility of a failure of land transport as a result of military operations or port congestion.
"(d) The possibility of temporary disruption of either foreign or domestic production occasioned by accident, labor difficulties, labor shortage, or sabotage.
* (e) The possibility of shortages that might be caused by increased future requirements.
"(f) The possibility of relatively serious interruption of supplies owing to concentration of production."
Where these considerations did not provide a clear guide stocks were to be fixed "at either three months’ total requirements or one year’s requirements less anticipated North American production, whichever is the higher." Both lead and zinc were on the list of critical materials to which these criteria were to be applied.
To allay the fears of industry that stockpiles would carry over and disrupt the postwar market, Krug proposed that legislation be recommended to "sterilize" postwar stocks, which would be carried by the Army and Navy as strategic reserves.
It was agreed by the War Production Board that Nelson should recommend Krug’s proposed stockpile policy to the Joint Chiefs
36o7 Minutes, War Production Board, Meeting 76, January 11, 1944. 361/ WPB Document No. 272, January 22, 1944«
28-898 PIOS bu
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of Staff, and should discuss the question of legislation with appropriate officials* 362/
The Zinc and Tin-Lead Divisions, meanwhile, worked out their own stockpile objectives, which were approved by the Mineral Resources Operating Committee on February 28« 363/ The minimum supply of sine to be maintained in the United States, including both industry and Government stocks, was put at 700,000 tons, the same figure proposed in January by the Program Bureau* Of this total, 600,000 tons was to constitute the Government stockpile* For 1944, however, the total stockpile objective was put at 800,000 tons, on the ground that production probably could not be reduced enough to bring stocks below that level* For lead the Government stockpile objective was put at 200,000 tons, with industry stocks amounting to another 150,000 tons*
Organizational Changes*—Major changes in emphasis have usually been accompanied by changes in organization* An administrative set-up geared to increase production and speed the flow of materials into military channels cannot easily be shifted to cut back the output of materials or to initiate the task of reconversion to a civilian economy* Recognising this situation, H* G* Batcheller, shortly before his resignation as Operations Vice Chairman became effective in late November, 1943, proposed sweeping changes in the organization of the War Production Board with respect to minerals and metals* He proposed that the Copper Division, the Aluminum and Magnesium Division, and that part of the Conservation Division 'relating to minerals and metals be brought into the Minerals Bureau, which should also assume the functions of the Mineral Resources Coordinating Division* Various changes in the structure of the Quota Committee were also suggested, and the Committee itself was to be made responsible to the Minerals Bureau* 364/
Batcheller1s recommendations were not followed in detail, but a reorganisation along the lines suggested was carried out before the end of the year* A new office at the top level, that of Vice Chairman for Metals and Minerals was created, and was given jurisdiction over all the metals divisions, including the Minerals Bureau, the Coordinating Division, and the Advisory and Operating Committees* 365/ Nelson named the new Vice Chairman on December 28* His choice fell upon Arthur H* Bunker, who had been Director of the Aluminum and Magnesium Division since the summer of 1941« 366/ On December 30 the Quota
362/ Minutes* War Production Board* Meeting 77* January 25* 1944* 3o3/ Minutes, Mineral Resources Operating Committee, Meeting 025, February 28, 1944» and attachments*
364/ Memorandum, H* G* Batcheller to Charles E* Wilson, November 17, 1943.
365/ General Administrative Order No* 2-137, December 27, 1943* 366/ WPB Press Release 4730, December 28, 1943*
33*598 P109
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Committee was also made responsible to the Vice Chairman for Metals
and Minerals, and its responsibilities were redefined oh March 10, 1944« 367/
Bunker spoke briefly to the Minerals and Metals Advisory Committee on January 4, 1944« It was, of course, much too early to outline a program, but he indicated his awareness of the problem he was expected to solve:
"tfhere we have surpluses, we will probably be under pressures greater than any we ever had before, to instantly, and in many instances long before we can measure the net effect, release those surpluses to all kinds of essential, or even less essential, uses«
"The whole question of how to proceed on that front, so that the war effort is not endangered, is a difficult one« The question divides itself immediately into two parts. First, should you continue to build those surpluses or shut down those facilities which produce those surpluses? It would be easy if labor and materials always remained in exact balance, but it is obvious that that is a long way from being the case.
"The military tell us various figures of people we can expect removed into the services, which range from a million and a quarter to two million men in 1944« That is a lot of people. It is very easy to see that if you could take your surpluses you might embark upon activities which might be achieved, only to find in two or three months you not only were not achieving those, but were definitely and seriously interfering with fulfilment of your war programs.
"The nature of the problem will be manifold. It will be from surpluses which you have developed on your own account; it will be from surpluses derived from contractors and places where the military give up plant capacity, and places where they are willing.to have that converted. The measurement of this problem will prove, I think to be far more complex than the measurement of your previous problems, and demands from each of us two things. One is tireless cooperation, and if anything, a higher degree of workmanship than we have employed in the past.* 368/
367/ Administrative Order Nd. 350-1, December 30. 1943: General Administrative Order Nd. 2-147, March 10, 1944.
368/ Minutes, Minerals and Metals Advisory Committee, Meeting 024, January 4, 1944«
M~588 >*110 bu
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The problem. In short was two-fold, with implications for both production and distribution of materials« This division was specifically recognized later in the month with the appointment of Howard 1« Young as Deputy Vice Chairman for Metals and Minerals in charge of production, and S. W. Anderson, Assistant Director of the Aluminum and Magnesium Division, as Deputy Vice Chairman in charge of distribution« The Minerals Bureau ceased to exist as an organizational unit, and the metals divisions were made directly responsible to the Office of the Vice Chairman for Metals and Minerals« 369/
369/ War Production Board, Staff Circular No« 27, February 5, 1944;
Staff Circular No. 28, February 14, 1944; General Administrative Order No« 2-146, March 10, 1944«
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APPENDIX A
Chronology
September 1 -Zinc quoted at 4-3/4# East St* Louis; lead at
5.05# New York.
September 1 - Germany invades Poland.
September 3 - Great Britain and France declare war on Germany.
September 5 - Lead price reaches 5-1/2#.
September 27 - Zinc price reaches 6-1/2#.
May 29 - Advisory Commission to the Council of National
Defense appointed by the President. E.R.Stettinius, Jr., heads Industrial Materials.
June - Rehabilitation of disused zinc facilities begun by
industry.
June - American Zinc Institute offers its cooperation to .
the ND AC.
June - C. K. Leith appointed consultant on minerals.
September - Bureau of Mines and American Zinc Institute survey the industry to determine productive capacity for zinc.
September 23 - Zinc producers agree to hold the price at the existing level of 7-1/4# East St. Louis.
September 27 - Leon Henderson threatens a ceiling price for lead if prices continue to rise.
October 7 - Representatives of the American Zinc Institute meet
with ND AC experts to study supply and requirements.
October 21 - Priorities Board created, with Knudsen, Stettinius
and Henderson as members and Nelson as Administrator.
October - John A. Church appointed consultant on Copper and Zinc.
November - Supply and requirements estimates for zinc agreed upon.
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December 6 - Zinc placed on export license list, effective
February 4*
December 14 - Church proposes advance scheduling of sine production and use.
December 31 - Automobile Manufacturers Association asked to cooperate in conserving zinc.
January 4 - Greatly expanded military requirements for zinc
announced by Undersecretary of War.
January 7 - Office of Production Management created by the
President. Metals and minerals programs taken over by OPM Priorities Division, headed by Stettinius.
January 13 • Church calls for a system of priorities for zinc.
January 30 - Non-Ferrous Metals and Minerals Priority Committee
holds its first meeting.
February 4 - Knudsen asks automobile industry to conserve zinc.
February 17 - An Industry Advisory Committee named by the American Zinc Institute to cooperate with OPM.
February * George C. Heikes joins OPM zinc staff.
March 7 - Partial allocation plan for zinc announced.
Reserve pool created.
March 17 - Zinc placed on Priorities Critical List.
March 24 - Lead placed on Export Control List. Lead program
in charge of Erwin Vogelsang, Consultant on Tin.
April 5 - Henderson asks lead producers to hold the price
at the existing level of
April 7 - Steel industry asked to conserve zinc used in
galvanizing.
April 10 - First major zinc plant expansion with government
financing approved.
April 17 - American Zino Institute Advisory Committee dissolved.
April 30 - Zinc stockpile recommended.
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May 1 - General Metals Order No. 1, designed to prevent
excess inventories, made applicable to lead.
May 8 - Lead placed on Priorities Critical List.
May 9 - Work begun on drafting mandatory priority order
for zinc.
May 22 - Lead stockpile recommended.
May 27 - The President declares an unlimited national
emergency.
June 10 - General Preference Order M-ll issued, bringing
zinc under mandatory priority control as of July 1.
July 21 - Jesse Jones announces purchase of 225,000 tons
of foreign lead.
August 7 - Copper and Zinc Advisory Committee appointed.
August 18 - Knudsen asks a price increase for zinc.
August 29 - OPM reorganized. Supply Priorities and Allocations
Board, and Office of Price Administration created. Stettinius resigns, and OPM metals branches are brought under a new Materials Division, headed by W. L. Batt.
October 4 - Lead brought under mandatory priority control by
General Preference Order M-38. Reserve pool created.
October 10 - Zinc price ceiling raised to 8-1/4# by OPA.
November 7 - Lead producers asked to operate on a six or seven
day basis.
December 7 - Pearl Harbor attacked by Japanese.
December 11 - Leon Henderson endorses a subsidy plan for lead and zinc production.
January 10 • Use of lead sharply restricted by Conservation
Order M-38-C.
January 13 - Premium Price Plan for Copper, Lead and Zinc announced
Bonuses for production in excess of quotas to be paid until July 31, 1944. Lead ceiling raised to 6-1/2#.
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January 16 - War Production Board created with Donald Nelson
as Chairman. OPM abolished January 24. Copper and Zinc separated, and David A. Uebelacker made Chief of the Zinc Branch.
May 1 - General Preference Order M-ll amended to place
zinc under complete allocation from June 1.
June 13 * Donald Nelson opens War Production Drive with
broadcast to Miners1 Day rally in Butte. Growing labor shortage in the Western non-ferrous mines.
July 8 - Interdepartmental Committee on the Non-Ferrous
Metals draws up a plan to combat mine labor shortages.
July 8 - George C. Heikes becomes Chief of the Zinc Branch.
July 14 - Primary Lead Producers Industry Advisory Committee
holds its first meeting. Lead stocks increasing rapidly due to heavy imports.
July 21 - Primary Zinc Producers Industry Advisory Committee
holds its first meeting.
July 24 - Zinc uses further curtailed by Conservation Order
M-ll-B.
August 3 - Lead reserve pool cancelled.
August 20 - Heikes recommends increased premiums for zinc.
September 1 - Interdepartmental Committee reports to WPB on labor shortages.
September 7 - Western States declared a labor shortage area by War Manpower Commission. Miners "frozen" in their jobs.
October 1 - Zinc uses further curtailed.
October 8 - Nonessential gold mines closed by WPB Order L-208
to free labor for non-ferrous mines.
October 26 - Army furloughs soldiers to work in the mines.
November 11 - Lead restrictions somewhat relaxed.
November 11 - Zinc and Tin-Lead Branches become Divisions.
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November 26 - Zinc controls extended to additional uses.
December 15 - “B" and "C* quotas for zinc and "B" quota for lead recommended by WPB and OPA.
December 23 - *BM and “C* quotas approved by Metals Reserve Company, effective January 1, subject to review in terms of manpower. Life of Premium Price Plan extended to July 31, 1945.
1943
January 30 - Mineral Resources Coordinating Division set up, with
Howard I. Young as Director, to coordinate activities in the minerals field.
March 29 • Long-range development program for zinc recommended
by Heikes.
April 17 - Statement of long-range mineral policy issued by
Nelson.
May * James Douglas succeeds George C. Heikes as Director of
the Zinc Division.
May 26 - Lead controls simplified and consolidated into a
single order.
June 1 • The first Mineral Classification List issued, listing
mines in order of importance to the war program.
June 13 - Undersecretary of War refuses to furlough more
soldiers to the mines as long as gold, silver and other nonessential mines continue to operate.
July 10 - Donald Nelson and War Manpower Chairman Paul V.
McNutt, with approval of the Office of War Mobilization, again request that soldiers be released to the nonferrous mines.
July 20 - Vice Chairman Charles E. Wilson Informs Senator Murray
that a "B” quota for the Star lead mine will be denied on the ground that lead is not critical.
July 22 - Operations Vice Chairman Hiland G. Batcheller approves
"B" quota for the same mine, unaware of Wilson's action.
August 12 -Furloughed soldiers start moving to the mines.
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August 24 - Statistics Division estimates of supply and require-
ments for zinc show a balance.
September 1 - Zinc Division supply and requirements estimates at variance with those of the Statistics Division are presented to the Minerals and Metals Advisory Committee.
September 10 - Supply-requirements estimates on zinc are revised, indicating a growing surplus for 1943 and 1944»
October 5. - Operations Vice Chairman denies revised quotas
for pure lead mines.
October 12 - Program Vice Chairman J. A. Krug tells War Production
Board that both lead and zinc have achieved balance.
October 21 - Young tells Operations Council that no increase in
lead or zinc production will be authorized.
October 27 - Public announcement made that "B” and nC" premiums
would be denied to mines not already operating«
November 17 - Batcheller calls for revision of Premium Price Plan to meet changed conditions.
November 20 - Douglas recommends discontinuing certain long-range zinc projects because of the relatively easy supply situation.
December 27 - Office of Vice Chairman for Metals and Minerals created in WPB.
January 11
and 25 • War Production Board discusses alternative policies
with respect to materials where supply exceeds requirements.
February 28 - Lead and zinc stockpile objectives approved by Minerals and Metals Advisory Committee.
March 2 and
9 - Restrictions on use of zinc further relaxed.
23“59)8 P117 *>«
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APPENDIX B
Pre-War Lead and Zinc Production
TABLE I. World Production and Refining Capacity (Figures in thousands of metric tons)
Country Lead (1938) Zinc (1939)
Production (Metal content) Refining Capacity Production (Metal content) Refining Capacity
Australia 278.8 203 223.3 71
Belgium 137 350
Burma 81.4 93 55.8
Canada 190.0 181 173.0 163
France 142 123
Germany 96.0 216 203.0 235
Italy 39.5 71 76.0 40
Japan 22.0 20 22.0 50
Mexico 282.4 294 172.2 41
Newfoundland sb SB SB SB 66.9
Norway SB IBB 48
Peru 58.0 40
Poland 55 70.1 210
Spain 32.0 263 35.0 28
United Kingdom 30.2 161 — — 88
U.S.S.R. 69.0 155 71.0 100
United States 335.4 1068 468.7 715
Yugoslavia 77.7 40 41.7 16
Other 151.0 80 190.7 82
Totals 1,772.3 3,219 1,869.4 2,360
Source: C. K. Leith, J. W. Furness, and Cleona Lewis, World Minerals and World Peace,
TABLE II. U.S .Mine Production of Recoverable Lead and Zinc with
average prices, 1937 * 1941
Year Production (short tons) Price per pound_(cents)
Average Lead Zing Lead Zinc 2/
1925-1929 664,230 724,720 n.w 6.76
1937 464,892 626,362 6.01 6.52
1938 369,726 516,699 4.74 4.61
1939 413,979 583,807 5.05 5.12
1940 457,392 665,068 5.18 6.34
1241 461.426 ... 749.125 5.79 7.48
X/ Pig lead, New York 2/ Prime Western slab zinc, East St. Louis
Source : Minerals Yearbook, 1941«
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APPENDIX C
Composition of Lead and Zinc, Grades Recognised by American Society for Testing Materials
(Impurities given in maximum percentages)
Lead Grade I Grade II Grade III
Composition Corroding Lead Chemical Lead Common Lead
Silver 0.0015 0.002 - 0.020 0.002
Copper 0.0015 0.040 - 0.080 0.0025
Copper and Silver 0.0025 — *4» «1*
Arsenic 0.0015 — **
Antimony and Tin O.OÒ95 —. *
Arsenic, Antimony,
and Tin 0.002 0.015
^inc 0.0015 0.001 0.002
Iron 0.002 0.0015 0.002
Bismuth 0.05 0.005 0.15
Minimum % Lead 99.94 99.90 99.85
Grade
Special
Zinc High High Inter- Brass Sei- Prime
Composition Grade Grade mediate Special ected Western
Lead 0.007 0.07 0.20 0.60 0.80 1.60
Iron 0.005 0.02 0.03 0.03 0.04 0.08
Cadmium 0.005 0.07 0.50 0.50 0.75
Aluminum Sum of Lead, none none none none none
Iron and Cadmium 0.010 0.10 0.50 1.0 1.25
Minimum %
Zinc 99.99 99.9 99.5 99.0 98.75 98.3
23-S98 P119 to“
I
w M
I
APPENDIX D ginc Production« Emergency Pool Requirements and Allocations ,
Production Emergency Pool
Month Primary Secondary Total 1 Base Month Actual Theoretical Call Allocation % of Production % of Month Call
1941 April 67,158 3,104 70,262 5 Jan. 3,306 3,427 3,427 4.9 5.2
May 72,024 3,113 75,137 17 March 12,773 11,935 11,868 15.8 16.4
June 69,565 2,811 72,376 22 April 15,923 15,085 14,985 20.7 21.3
July 73,403 2,808 76,211 22 May 16,530 16,536 15,653 20.5 20.7
Aug. 74,388 2,529 76,917 27 June 19,542 19,529 18,892 24.5 26.1
Sept. 72,173 2,230 74,403 27 July . 20,577 20,602 19,878 26.7 26.1
Oct. 75,067 2,460 77,527 27 Aug. 20,768 20,756 22,674 29.2 29.5
Nov. 73,885 2,208 76,093 31 Aug. 23,844 23,192 22,359 29.4 29.1
Dec. 77,627 2,322 79,949 29 Aug. 22,306 23,-624 18,705 23.4 24.3
1942 Jan. 78,266 2,267 80,533 31 Oct. 24,033 28,646 25,317 31.4 32.7
Feb. 72,486 1,942 74,428 40 Nov, 30,437 29,827 27,091 36.4 35.6
Mar. 78,016 2,168 80,184 50/40 Dec. 35,336 34,843 32,741 40.8 41.0
Apr. 75,871 2,476 78,347 60/40 Jan. 39,595 38,486 39,757 50.7 49.4
May 78,087 2,840 80,927 75/50 Jan. 49,494 44,091 54.5 54.7
1/ Includes some secondary production at primary smelters.
a» ca
I ca
•fl w to o
c
è
ZINC DHISIOJI PROJECTS
Capacity r
Originai Tim a; Ut Mm Apprcximte
Projoot Kot Im tod Anount Origina: 1 Cowpleted Conpletion
Domrlvtlm o/ Provost LMttloa Action Cost ci Loan Plant Project Date
1 Amrism Smiting 6 Refining Csapsny United Um Imltlag Corporation Uoetrolytio Plant Corpus Christi, Toms Approved («)|«, 389,000 (4) 30,000 2-1^43
2 Imitar Moundsvilla, V. Va. Approved 673,706 (d)| 360.000 MRC 10,800 25,200 12-1m42
3 Amrtem 21M Oenpany •{ Illinois Umtrolytio Plant Monsanto, IIUmIs Approved 14,000,000 ( 24,200 2-2S<3
M Amrican Um Oeaptny Of IllimiS Smiler Fairnont City, Ill. Approved •2,300,000 ( 33,600 6*U43
4 4m«0M* Copper Ccnpmy UoctrolyUo Plant Croat Falls, Montana Approved 919,000 6 g0,000 100,000 130,000 a-L-43
4A Amoonda Copper Caapany Ueotrolytio Plant Anaconda, Montana Approved 929,000 60,000 75,000 4-L-43
5 ^aboc Manitou Cmpmy HC Contract for Coneeatratoe Canada Mb Mm
6 Shorritt Qordm Mims, Uj4M IBC Contract for Ccmentrateo Manitoba MV
7 Motional Tunnel 6 14am Caapany Bo record BiaghMB Canyon, Utah Bo action (4)
• Bern Sound Caapany MC Contract for Concentrates Potosi, Maxiso
9 M. lamp. Lm4 Cim»M IBC Contract for Concentrates Basiter Aguilar, ArgontiM IM
10 Qsswral Smiting Caapany Henryetta, Oklahom No action
U Freonills Hsing Ceapaay IBC Contract for Can art rates Fresnillo, Mexico MV
12 Cerro do Pnooo Cappar Caapany Flotation Plant Peru, South Amrtoa No action
124 Jarno L. Mih * mn Paxson M1m, Joplin Bo action mm
121 Fecifie iMlUu 4 Refining Cmpany Iloatrolytio Plant Portland, Oregon No action
13 Idarado Uning Caapasy Hack Bear Um San Juan County, Colo.
u United Um Smiting Corporation BolroM 4 Paxson Traete Trl-State Diwtriot <«)
13. 1H 1» Baglo Hoher Mining 6 Smiting Coapany 4Mlt«r 4 lMl< Henryetta^ Oklahom Approved 523,162 523,862 DPC 34,000 47,000 ^30^3
Begin Heiler Hsing 6 Smiting Caapany Concentrating HU Brownsrille, Toxas No action
16 Oocar 4« Osetorlo laols Plant Henryetta, Okishorn No notion
17 Um Argentine Mining Caapany Um 4 Uli Bioo, Colorado No action (6)
11 Toiam KUiinf ri^inr Um 4 UU Peru, South Amrtoa No action
19 Pmifio Smiting A Beflirtng Psapeny Twin Valley Using Oeapany • Um 4 HU Santlaa, Oregon (4) 298,061 20,000 RFC
20 Um 4 UU Oven County. Xentuoky Approved 60,075 bi 35,000 BFC 320 860 5-L-43
21 Negolar Um Caapany Boelter BohablUtatlm Danville, Illinois Approved 850,909 850,905 DPC 25,100 (k) 38,000 1Û-1-43
22 Matan MU. Com ■Ml* n*at Joan, Nevada (1) 341,000 (D, 145,000
23 FmmIm., laoorperatad Um 4 Uli Paytoe, Virginia Approved 115,000 115i000 DPC 2,400 2-1^3
24 Viator kill Um Cm*mt UU Bcpansion Cuba City, Wlooonsln Approved 100,000 100,000 DPC 10,000 . 18^000 11,000 1,890 >W3
s Nee Maxioo Consolidated Mining fww Koarncy Um Hanover, Bew Mexioo Approved 250,000 250',000 241,066 me 5-1-4?
Cored Umrala Corporation Billing Plant Merlon, Xentuoky Approved 215,000 DPC
27 Mariam MltM, 4 ».ft «in, Cmm>v Pa^ng Plant KI Paso, Texas jij
21 Amrtem Smiting 6 Refining Caapany Puning Plant Chihuahua, Mexioo
29 Umrva Oil Caapany UU 4 Um Cavo-ln-aook, Illinois Approved 353,080 335,160 40,000 DPC 2,400 12-lr4t
30 Beeidsr Uning Caapany Um 4 Uli Ullsldo, Art tons 200,000 (h) RFC
31 Pom Haine Caapany Um 4 MIU Calaveras County, Calif.
32 33 St. Joseph Lead Caapany Amrtem Um fanpay ef Illinois Slag Troataont Plant Inaltar BoroulaMua, Useouri Dunas, Texas Approved Approved 765,000 900,000 (b) 900,000 (b) DPC 27,500 9,000 45,500 8-U43 7-1-43
34 Bow Jersey Um Caapany Haese Cold UMe Bedletillatim Plant Depee, Illinois Approved 2,079,000 (a) 9-4-43
39 Um 4 MIU Province of Quebec, Can. Approved 75,000 124,500 3,400
36 MU Mulat doa, UMtad BBC Contract for Concentrates Province of Quebec, Can.
37 3mm4 MUM, IMaraata Um 4 B1U Magdalena, Bow Mexioo No action
31 39 0« 1. Smiting, Uning 4 Refining Co. Aaertoan Zine Lead 4 Smiting Caapany MIU for BaUfrog BIm Henckel Um Bayard, Bow Mexioo Duenoog, Ussourt Approved* Approved 306,260 100,000 100,000 280,836 27,600 130,000 100,000 282,000 160,000 150,000 200,000 *- 14,000 2,000 3,000 12,400 <•) 10,000 8,000 5,200 590 1,800 4,000
394 Marton Um Lm4 4 Ma1t1n< Cao^i, ■May CiMk 31m Jefferson City, Tenn. Approved 5-1-43
40 a »Ml. Tiehw HMlm 4 MUM, C..MM (,) Mthlaaaa. 4 Hagalar Um Paxson BiM Pottery Plant Baxter Springs, Kansas LaSalle, IUImIs Approved Approved 280,836 MRC
a 43 44 43 46 47 United Um Smiting Corporation Callahan Um Lead Caapany Bam Uning Caapany The Oro 6 Chml aal Corporation Maria«. Um Laad 4 tMlUa. CaMmy Molroee Tract Akron BIm Copper Flat Um Sink 4 Float Concentrator Tiger Um Banter Um Heher, Oklahom Sargents, Colorado Hanover. Bew Mexioo Leadville, Colorado Crown King, Ari tom Aurora, Useouri Approved Approved Approved Approved Approved Approved 130,000 (b) 100,000 150,000 5o;ooo DPC me me MRC 3.U43 9-443 8-443 7-443
41 49 Km4 UU UM, ¡NHFItM Mna In. Caapany Black Book Um Um Berth Port, laahington ■Mroevilla, TonMssoe Approved Imorporaud Baghouse Buffalo, New Tort Approved 71,580 140,000 71,580 (b)
94 99 ImU IMM< OaMW hmr iMifMct Um Ooooo Um Caston MAU Mariposa County, Calif. Ou*ay«, Colorado Approved Bo action 6,830 U-M
56 97 51 2 W. A. thee Amriaan Um Lend 4 Boel ting Caapany John Bam Uning 4 UUing Caapany Inlet Dexter Operatise Caapany, Im. Itel/le Smiting 4 leflalae Caapany Tailings Plant Bevor Plant Ulargo UU Um 4 UU Develop Bath Um p h o o PB nd Approved Approved 31,000 80,000 64,000 (•) 31,000 80,000 20,000 RFC DPC RFC 7,000 830 12,000 10-443 9-443
41 43 43 ■Ulm 4 ■mm 4 1M4, XMoiyntM Mmua, Iwarymted Penn Um Bobb City Area Biohnond>daroka Um Calaveras County, Calif. Approved ■ebb City, UsMuri (u)Approved Burwka. Bovada (v) 120,000 1,402,000 w 120,000 80*000 me me - 5,200
14 69 ImHIW Um Cao^ny at tMMMM Mtad Um taaltla. Carparatlw Mow Market Um BmIs Plant Bow Market, Toomssoo Moundsville, V. Va. Approved «wate — 2,500 16-K3
66 4« i. Um Hora SUw Ü1M Milford, Utah Bejootod *
67 Idarade Uning Caapany (p) n«k *mt Ml** Ouray. Colorado Approved 1,306,000 1,306,000 me 9,600 4,880
61 Athlet la Mining Caapany ■Mels Plant Part Snith, Artaneas Approved 942,000 942,682 DPC —
69 Anaoonda Copper Mining Caapany Fwaing Plant Boot Molena, Montana
70 Mariam MltU. 4 liriala« taaftaf mil Vanadlws, Nov Mexico
71 Ml ted Hilly 4 Hnlag Caapany Tailings MIU Platteville, Wleoonsla Approved 245,000 245,000 DPC 1.W
0. S. fmltlne, loflnlM 4 HMae Co. NattUeooM 4 Bogeler zIm fap any tennysldo M1m Buroka, Colorado No action
73 CaMim Plant LaSalle, Illinois In process !») 180,000
74 Mortem Smiting 4 lefinlag Caapany Fusing Plant KI Paso, Taxae 6*3,3W
Total 04,07,01
iîi * Actecl Oeet. i ) I. MUM - 8m rrajwt M. 61.
(kl («! IS I* b i H ns need Uth private funds ( * A large part ef ertginal project mt oonstsmted. j 1 m aetim • See Prejoet No. 67. J 1 No aeUon • Seo Projoote Nee. 40 end 42. 1 Approved but later Uthdrem by Xiae Division. I I Defease Plant Corporation diaapprovod thio projoet but node a 820,000 sdm devolo^Mnt lean (Also coo projects Nos. 12B and 60). j ) Dovolspnant Ism only. i > Additional block, which mo to have bom flmnood by appliemt, has mt bom built. j < a ) Ne ineroaoo in slab Une prodaetioa. ) TM. wrk 1. Ma, daw k, «M»— NUa, M MM tw IteMl. kll.m Cmmit. ) rnptrt, mid Md Im. nM4, Imita to date d. mt JwtU, Mdltlaml «WriM. MMtim Md miipmiii Mow, at lorn MnmllM. ) FNJM dlMppnmd Md nr— nut Corporati«. woMllad Frojmt 8». 19. > Lm. Md. tar drllllM* 4* r.Mta w. dlMppolatla, — addition^, m*. »Ill b. limili' Um MpIMm *»» OmaaotoMa • BeoUen
*< ) Marrad to 1mm. at UaM nth rMamaodMlon that thar do tha drllllac* 1 MpHmM nthdrw Mpll—tla.. ) IMmat, MrtlM 830,000, tar rwovarlM ina alwua a, atrlkaa fra projaat. *—— 00, M43 AHU
il ) Metals Reserve Ccnpany appropriated 130.000 to toot ores. Xiao Divlsim finally withdrew its rs oceans nd st ion.
89 4»
CH 40 Oh
•Ü K to
G
ASPELE
- JU -
ZINC DIVISION WAR PRODUCTION BOARD
TABULATION OF PROJECTS CONSIDERED
GROUP I APPROVED SMELTER PROJECTS
Applicant Description of Project Location Loan Increased Cared tv Total Ca—itv
In terns of tens of reoovwroble sins metal nroduoad scmnnlly
American Smelting & Refining Compeny Electrolytic Plant Corpus Christi, Texas • 30,000 30,000
United Zino Smelting Company Smelter Moundsville, w. Va. $360,000 14,400 25,200
American Zinc Company of Illinois Electrolytic Plant Monsanto, Illinois ( 24,200 24,200
American Zinc Company of Illinois Smaltar Fairmont City, Illinois ($6,300,000 33,600 33,600
Anaconda Copper Company Electrolytic Plant Groat Falls, Montana 30,000 130,000
Anaconda Copper Company Electrolytic Plant Anaconda, Montana 15,000 75,000
Eagle Picher Mining & Smelting Company Smelter A Waelz Plant Henryetta, Oklahoma $523,862 13,000 47,000
The Hegeler Zino Company Smelter Rehabilitation Danville, Illinois $850,905 12,900 38,000
St. Joseph Lead Company Slag Treatment Plant Herculaneum, Missouri 9,000 9,000
American Zino Company of Illinois Smelter Dumas, Texas $900,000 18,000 45,500
New Jersey Zinc Company Redistillation Plant De Puo, Illinois • —mm
Matthiessen A Hegeler Zino Company Pottery Plant LaSalle, Illinois • — —
Total Smelter Projects 12 • . Financed by Private Capl tel, 1/ Present annual production is baaed upon average production of June, July and August, 1943. GROUP II APPROVED MILLING PROJECTS $8,934,767 200,100 457,500
Panaminas, Incorporated Surface Plant A Mill Paytoe, Virginia $115,000 2,400 2,400
Vinegar Hill Zinc Company Mill Expansion Cuba City, Wisconsin $100,000 8,000 18,000
Corod Minerals Corporation 2/ Milling Plant Marion, Kentucky $241,086 1,890 1,890
Minerva Oil Company Mine A Mill Cave-io-Rock, Illinois $335,160 2,400 2,400
J. S. Smelting, Refining A Mining Co. Mill for Bullfrog Mine Bayard, New Mexico 14,000 14,000
The Ore A Chemical Company Sink-Float Plant Leadville, Colorado $150,000 5,200 5,200
A^^Rhea Tailings Plant Neck City, Missouri $ 31,000 830 830
Milling A Mining Company Tailings Mill Platteville, Wisconsin $245,000 1,985 1,965
Total Milling Projects 8 2/ Present annual production rate is based upon average production of Juno, July and August, 194; ¿/ Practically completed. Management difficulties are delaying progress. Practically completed. Need additional generating plant before operations begin. GROUP III APPROVED MININ') PROJECTS $1,217,246 36,705 46,705
Twin Valley Mining Company Mino A MUI Omen County, Kentucky $ 35,000 540 860
New Mexico Consolidated Mining Co. Kearney Mino Hanover, Now Mexico $250,000 11,000 11,000
Slscoo Gold Mines Mlns A Mill Quebec Province, Canada $124,500 3,400 3,400
American Zinc, Lead A Smelting Co. Henckel Mine Duenweg, Missouri 3,000 3,000
American Zinc, Lead A Smelting Co. Mossy Creek Mine Jefferson City, Tennessee 3,000 3,000
Eagle Picher Mining A Smelting Co. 2 United Zinc Smelting Corporation / Paxson Mine Baxter Springs, Kansas $280,836 12,400 12,400
Melrose Tract Picher, Oklahoma $130,000 10,000 10,000
The Callahan Zino-Lead Company Akron Mine Sargents, Colorado 7 T
Peru Mining Company Copper Flat Mine Hanover, New Mexico $100,000 8,000 8,000
Golden Crown Mining Company Tiger Mine Crown King, Arizona $ 50,000 550 550
American Zinc-Lead A Smelting Co. Hunter Mine Aurora, Missouri 1,800 1,800
Knob Hills Mines, Inc. ij Black Rock Mine No^th Port, Washington $ 20,000 4,000 4,000
Northern New fork Mining Company ¿/ Parker Mine Gouverneur, New Tork $ 40,000 1,750 1,750
Eagle Picher Mining A Smelting Co. San Xavier Mine Tuscan, Arizona « 6,000 6,000
Hecla Mining Company Blue loose Mine Marioosa County, California 6,850 6,850
Miller A Clemson Penn Mine Calaveras County, California $120,000 5,200 5,200
Brown A Root, Incorporated ¿/ Webb City Area Webb City, Missouri $ 80,000
Panaminas, Incorporated 2/ Richmond-Eureka Mine Eureka, Nevada $100,000
American Zinc Company of Tennessee Now Market Mins New Market, Tennessee $300,000 2,500 2,500
IMining Company ¿/ Black Boar Mine Ouray, Colorado $1,306,000 5,600 5,600
Total Mining Projects 20 $2,936,336 1/ Present annual production rate is based upon average production of June, July and August, 1943. 2/ Eagle Picher Mining A Smelting Company operates Paxson Mino for Metals Reserve Company. J/ Dewatered by United States Bureau of Mines. Shaft about completed. i/ J.iaft completed and milling plant now under consideration. ¿/ ¿40,000 government loan * $15,000 private capital spent and objective not reached. 0/ Mining and Milling program dependent upon results of cMirn drilling exploration program now in progress. 2/ Bureau of Mines conducting diamond drilling program. Final development to be considered after drilling. 3/ Idarado ‘lining Company is doing this work as agent for Metals Reserve Company. GROUP IV APPROVED UISCELIANEOUS PROJECTS 85,590 85,910
Samel Ireenfield Company» Inc. Baghouse Buffalo, New Tork $ 71,580 600 600
American Cine, Lead & Smelting Co* Power Plant Metaline Falls, Washington $ 80,000 5,000 12,000
Athletic Mining i Smelting Company Aaelz Plant Fort Smith, Arkansas $542,682 4,880 4,880
Total iiscellaneous Projects National runnel 4 Mines Company Uerto du Pasco Copper Company iico Argehtine Mining Company Total Group V 3 GROUP V No record -Flotation Plant Mino A MIU 3 $694,262 UNAPPROVED APPLICATIONS COMPLETED BT APPLICANT Bingnaa Canyon, Utah Peru, South America Rico Colorado 10,480 17,480
23“5fl8 P122 ou
Zino Division
* Cone moretes Section Nnvo^ier 20, 1943
AHM.
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ZINC DIVISION WAR PRODUCTICM BOARD r ' Ì T P TABULATION OF PROJECTS CONSIDERED
CROUP VI METALS RESERVE COMPANX CONTRACTS KB PUNCHASE OF CONCENTRATES (NO ADVANCE UMMS)
Original
jUattsaa_______________________________Bmii8UflLsL£E2tal_________¡assess___________________loa____________irtllt__________T"*—
5. Qnebec Manitou Conpany Canada 6. Sherritt Gordon Mines, Ltd. Manitoba 8. Sound Company Potosi, Mexloo 9. St. Jceepn Lead Company Aguilar, Argentina 11. Fresnillo Mining Coupany Fireanil to, Mexloo 3b. Malto Annlst Mines, Ltd. Quebec, Canada Total Group VI 6 CROUP VII APPROVED PROJECTS WITHDRAWN AFTER SOME FUHS WERE SPENT 19. Pacific Snelling A Refining Co. Mine A MUI Sent iso, Oregon * 30,000 298,061 Insufficient ore developed 22. Western Metals Company taelx Plant Jean, Nevada (145,000 341,000 Adverse report by operating agents 30. Boulder Mining Cnupany Mine A Mill Hillside, Ariaona ( 40,000 200,000 Adverse report 59. Hanlot Dexter Operating Co.,' Ine. Mine A Mill Silverton, Colorado ( 20,000 64,000 Total Group VII 4 (225,000 (KOUP VIII PENDING PROJECTS 73. NattWaaam A Hagelor Zine Co. Cadman Plant LaSalle, Illinois Total Group VIII 1 GROUP IX APPROVED PROJECTS LATHI WITHDRAWN 27. Anerican Snelting A Refining Co. FUniag Plant KI Paso, Tasas Project resubuittod as Project 74. 28. Anarican SnelUng A Refining Co. Ftadng Plant Chihuahua, Mexloo Plant to have been built after »rm- platlcn of El Paso Plant. 58. Jota ilana Mining 4 Milling Co. Enlarge MUI Leadville, Colorado Applicant appeared to lave lost interest. 65. United Zine Snelting Corporation Raels Plant Moundsville, W. Va. WPB Policy change- 69. Anaconda Copper Mining Coapany rasing Plant East Helena, Montana Shortage of Manpouer. 74. Anerioan SnelUng A Refining Co. Fusing Plant KI Paso, Texas Shortage of tlsisumi 52. Alaa MUI, Incorporated Record MUI Alan District, Colorado Uwuf ficient supply of ora. Total Group IX 7 CROUP X PROJECT APPLICATION WITHDRAWN BY APPLICANT 49. tabrae Iron Coepeny Mine tabrecvillo, Teaneesoe Mins sold anl loan repaid. TO. Anerican SnelUng 4 Refining Co. MUI Vanadiun, New Mexico Insufficient minever to produce required teenage. Total Group X 2 GROUP XI PROJECTS NOT APPROVED Poaeoo for not Ancrovinp to* QkUho“ Antiquated and inefficient.
MUI Paxson Mine Resuhsitted by Eagle Pieher Cnupaoy Co. Electrolytic Plant Portland, Oregon InouffUUnt\up^ly of ora. 13^darado Mining Company Black Bear Mino San Juan County, Colorado Rooutaittod as Project &K U^^fited Zine Snelting Corporation Melrose A Paxson Tracts Tri-State District Re^ihni atari as Projects 40 anl 42 4 S“111"« 0®. Conoentrating MUI Brounsvills, Toxas Not seriously presented or considered. tanryrtta, Oklahona Insufficient residnoe of proper grade. 18. Volcan Mining Coepany Mine A MUI Pm, South Anerica Zino Branch never called monto^ct. W* . J?“ * “F Calaveras County, California Roeabnitted In modi fled fora as Project 61. «* Intereeto Mine A MIU Magdalene, Nov Mexico Applicant relinquished opUon. Custcn MIU Omj, Colorado Insufficient supply of ore. a-1Un« * Banning Co. Develop Rath Mine Santian, Oregon Insufflciont ora reserves. 66. A. E. Kipps Horn SUver Mine Milford, Utah Ineufficient or« raeerr*- 72. U. S. BeelUng, Refining A Mining Co. tasnysldo Mine Eureka. Colorado T—trfft-1 t~t ranpoaer available. Total Group XI 14
SOMARI Of nOJECTS
XXEt »■tir of Project« Loan Increased Capacity Present Total Capacity Praaent
Group I Approved teeltar Project« 12 $8,934,767 200,100 457,500 418,900 12,290 4,800
Group II Group III Approved Milling Project« Approved Mining Project« 8 20 $1,217,246 $2,936,336 36,705 85,590 46'705 85,910
jroup IV Approved Mi».»llanecua Project« 3 $ 694.262 10,480 17,480
Group V Unapproved Application« Completed by Applicant 3
Group VI Group VII Group Vili Group IX Group X Group XI Natala Raaerve Corpus Contracta for Purchase of Cene ent ret»« Approved Project« Utlidrui After Seen tente Were Spent tending Project« Approved Project« Later WLthdruen Project Applications WLthdrana by Applicant Project» Not Approved Total 6 4 1 7 2 M 80 $ 225,000 $14,007,611 332,875 607,595 465^90
Zia* UvlMo* 23-698 P1M B«
AHM.
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APPENDIX F
Supply and Requirements Estimates for Zinc
Although there are summarized in Table I supplies and requirements statements for zinc metal and zinc concentrate together, such a presentation has not always been made. The table states what would have been the over-all picture had it been set down. That the Zinc outlook has not always been summarized in the fashion shown in Table I itself bespeaks the attitude that zinc was not one problem but two — a problem of smelting and refining capacity and a problem of finding the concentrate to fill that capacity. When smelting capacity was below metal requirements this was a satisfactory approach, but it became especially important to show the combined metal and concentrate outlook after a substantial and firm surplus appeared in the metal balance sheet, for the possibility existed of reducing concentrate supplies to the level necessary to meet metal requirements.
Except for the chart prepared by the Zinc Branch in August, 1942 no set of concentrate and metal estimates display an over-all deficit for 1942, 1943, or 1944« With the additional exceptions of the Zinc Division Requirements Committee document issued January 29, 1943 and the Minerals and Metals Advisory Committee report by the Zinc Division in March, 1943 (which latter showed a deficit in metal for 1944), no set of metal estimates prepared after July, 1942 display a deficit. The short-run prospect for zinc continually has been one of surplus, but, because of the uncertainty attendant future estimates — particularly those estimates involving overseas shipping and the labor supply for mines — and because of the absence of an adequate stockpile which prevented risking a close balance between new supplies and requirements or a paper deficit, measures were recommended and pursued to ensure that the margin of surplus would be sufficient. Thus in CRMB Staff Reports No A and No. 3 attention was called to the possible surplus, but emphasis was placed on the need for taking measures to ensure its realization — recommendations were made to obtain all possible imports, to provide financial assistance to new mines, and to ensure them an adequate labor supply.
Once the stockpile had been built to sizable proportions, once the overseas shipping situation had improved, and once it became evident that peak production particularly of brass mills was in sight, ¿/ then it became possible, indeed necessary, to reconsider all policies relating to zinc in order to effect a better adjustment between new supplies and requirements. Downward revisions in military supply programs, coming first in the United Kingdom, next
Prepared by Herbert B. Woolley, Consultant, Materials Branch, Statistics Division.
2/ Recognition of these circumstances came slowly and to different people at different times, but was given an early expression in the memorandum from Woolley to Batt in August, 1943 when the Matilde project was at issue.
23-098 P124 bu
- 117 -
in Russia as the military position improved, and finally in the United States, contributed to hastening the accumulations of stocks.
Errors of estimation, of course, have been made, but they arose principally out of such intangibles as potential overseas shipping and potential domestic mine and smelter labor supply. In the estimates shown on Table II issued before July, 1942 no provision was made for including in supplies the return of new, process copper-base alloy scrap. When this addition was made surpluses appeared and the estimated requirement for new metal was not very much different from the consumption realized in 1942 and 1943* Other difficulties experienced in estimating zinc supplies and requirements are noted below in sections discussing the problems of concentrate and metal. It should be observed that in December, 1943 there was still unsolved the problem of an unaccounted-for-surplus of zinc concentrate which, from Commerce reports apparently entered the United States in 1943 but from reports to the Bureau of Mines was not received by smelters, oxide makers and dust plants. The amount involved is large (from 60 - 80 thousand tons of recoverable zinc content).
I. The Supply-Requirements Balance for Zinc Concentrate.
Variations in the anticipated surplus or deficit in zinc concentrate have been the result almost wholly of difficulties in fore-casting supplies, although minor difficulties have been encountered in estimating requirements other than for metal. Program changes have not been reflected in the requirements for concentrate as changes in metal stocks act as a buffer and it has been the practice to convert concentrate stocks into metal stocks as quickly as labor supplies at smelters permit.
Domestic Mine Output
Estimates made in July, 1942 of probable mine output in 1942 projected the rate of actual production through April. The sharp drop occurring in May and June had not yet become apparent. Consequently, both the Zinc Division and the Statistics Division greatly overestimated domestic mine output for 1942. Because of the need for better estimates of supply, the Zinc Division began to study the prospects of mine output intensively, mine by mine. As a result it was able to offer an improved estimate of mine output in its report to MMAC in March, 1943.
Imports
The prospects for overseas shipping were at their darkest in the summer and fall of 1942. Hence any estimate of import possibilities was reasonably certain only as it stated how much was
23-B28 P12B
bu
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available at Foreign Ports« The most "conservative" view was to rely solely upon railborne imports from Canada and Mexico, thus in preparing the Chart on Zinc in August, 1942 George Heikes (apparently) took such a view« An alternative approach, taken in CRMB Staff Report No. 1, was to show supplies available abroad limited only by mine output, rail facilities, and loading facilities at ports and to note that realization of those imports depended on providing overseas carriage to the United States.
The import preference given zinc in 1943 and the improvement in shipping resulted in imports that exceeded all expectations of those who had prepared estimates in the Summer of 1942« In the years 1942 and 1943 overseas imports of concentrate contributed 331 thousand tons recoverable zinc content« By comparison the combined surplus of metal and concentrate in the same period was 391«
II. The Supply-Requirements Balance for Zinc Metal.
Major adjustments in the prospective balance between new supplies and requirements of metal have been the result (a) of improved statistical analysis and (b) of changes in programs.
A. Improved Statistical Analysis
Since the middle of 1942 it has been possible to improve estimates of the zinc contained in copper base alloy scrap returned for re-use in melting losses, and in the estimate of the probable primary smelter output.
1. Scrap Estimate.
Three techniques have been employed in estimating the probable return of scrap related to a given program of requirements.
(a) The first estimate was made July, 1942 by applyixç to the several major military and civilian programs rough factors of the ratio of net weight zinc in final products to gross zinc weight. The technique was used again in Balance Sheet No. I in January, 1943.
(b) The second method which became possible under the CMP plan when claimant agencies submitted their requirements for copper base alloys forms was to estimate the increase over recent levels in scrap return associated with increased production of brass mill products and their fabrication. Owing to the limitation of brass mill capacity the simplifying assumptions could be made that increased brass ml 11 output would be used for ammunition strip and that
23-888 P126 bu
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the scrap return on ammunition would be in the amount dictated by the ratios of net to gross weights of the various ammunition items to be made from the additional strip output» This second method was employed in revising the Balance Sheet No» I of the Materials Branch (Statistics Division) on February 20 and resulted in a larger scrap estimate as compared with the first estimate» It was continued in succeeding balance sheets through April, 1943»
(c) The third method, used along with the second method, was to relate scrap consumption to brass mill output in past periods and to extrapolate that relationship forward to the higher level scheduled» It was found that this rougher technique gave substantially the results of the more refined second method and has been employed in Balance Sheets of the Statistics Division since the third (May, 1943)»
The principle of estimation that as brass mill output expanded the return on scrap would expand in proportion was not readily accepted because of Copper Division reticence» Thus, H» 0» King»addressing George Heikes on December 3, 1942 and Ferdinand Eberstadt on December 19, 19U2, stated a requirement of 47 thousand tons of zinc per month for brass mills» Mr» Heikes replied on December 12 that the zinc requirement related to PRP authorizations for the first quarter was only 39 thousand tons per month assuming a proportionate increase in the amount of scrap available at the prospective higher levels» Again, in addressing Mr» Walter E. Heller (December 21), Mr» Heikes estimated that brass mills would require approximately 42 thousand tons of the zinc per month if their output was to increase 20% over the October, 1942 level. Roughly the same figures would have been obtained by Mr» King had he not made a very liberal allowance for failure of scrap to be returned and for ^additional“ loss of zinc in smelting» The Zinc Division at length accepted the Copper Division estimates in preparing Zinc Division Requirements Committee Document No» 2 on January 29, 1943 and again when they sumitted a report for the Metals and Minerals Advisory Committee on March 29, 1943» Indeed the Zinc Division did not revise this estimate of brass mill requirements until the Metals and Minerals Advisory Committee considered zinc on September 10, 1943» Division Requirements Committee programs for the second and succeeding quarters, 1943» however, assumed that there would be a proportional return of scrap»
23-888 P127 bu
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2. Melting Losses
In the estimate of scrap return prepared in July, 1942 a rough provision was made for melting loss which was deducted from the scrap return. A more elaborate estimate of melting losses was made by the Statistics Division in Balance Sheet No. I based on the level of activity of brass mills, galvanizara, ingot makers and foundries. In Balance Sheets III and IV provision for melting loss was automatically made by estimating requirements defined as the zinc needed to be put into process rather than the zinc to be shipped on products by brass mills, galvanizers, and other consumers,
3. Estimate of Smelter Output
Until the middle of 1943 the estimate of probable slab zinc output was prepared by the American Zinc Institute from company reports. These were taken at their face valué until it became apparent that smelters continually had difficulty in producing up to the amounts estimated, falling short about 5%. In July 1943 studies were undertaken of the extent to which each smelter had met future estimates, and a downward revision of approximately 50 thousand tons in smelter output was made in consequence. The revision was made in a memorandum to Mr. Batt of August 21st and a similar revision appeared in the Division's statement of September 10th. The failure of smelters to meet the goals they had set has been attributed to a combination of labor difficulties and to the poorer quality of ores treated.
B. Program Changes
Since the middle of 1942 there have been three significant changes in programs affecting zinc requirements. The export requirements increased, then decreased. Domestic brass mill requirements (for ammunition) increased, then decreased. Requirements for galvanizing and other domestic uses decreased; then, as steel became available for other uses and as conservation and limitation orders were relaxed, the uses of zinc for these purposes increased.
1, Export Programs
The First Protocol agreement provided that the United States and United Kingdom jointly would supply Russia 1500 short tons per month of electrolytic zinc. As the United Kingdom was receivii^ zinc from the United States under Lend-Lease, in effect this was a requirement wholly on the United States. In the summer and fall of 1942 the Germans over-ran the Caucasus and threatened Stalingrad. A Russian zinc smelter in the area was made inoperative, and the Russians requested and were supplied an additional 2 thousand tons per month beginning in September, 1942 and continuing throughout the Protocol period. In February, 1942 the United Kingdom revised its requirements for zinc for ammuni tion donward by approximately
83-098 P128 bu
- 121 -
60 thousand tons for the year of 1943, almost all of which was high grade» Consequently, they ceased to request high grade zinc which formerly had been allocated to them in the amount of 10 thousand tons in the first quarter under the recommendations in CRMB Decision Nd» 97» The CRMB in Decision Ifo. 165 recommended there be allocated to the United Kingdom, beginning with the second quarter, 1943, 15 thousand short tons per quarter of grades other than high grade, but this net export was eliminated in the 4th quarter» Instead an exchange was recommended in CRMB Decision No. 205 by which the United States was to receive high grade for low.
2. Brass Mill and Ammunition Programs
Before the CMP plan was instituted ammunition requirements developed by translating the Array Supply Program using sine unit weights were the basis for supply-requirements statements. This technique was employed in the first edition of the Statistics Division Balance Sheet Nb. I (January 5th). However, at that time three different ammunition schedules were available - the December 10, (1942) Progress Report on the Any Supply Program, a Statistics Division scheduling of the same Any Supply Program, and a Master Schedule which was used for CMP in the second quarter and the lower schedule appeared in the Balance Sheet. As CMP wore on, it became apparent that Any Supply Programs could not be met owing to a lack of available brass mill facilities. Hence, in latter balance sheets (the February 20 revision of Balance Sheet I and Balance Sheet II), an attempt was made to forecast the probable result of the effort to expand brass mill facilities. When it became apparent that shortages of labor at brass mills, particularly in the Connecticut Valley and around Buffalo, would make drastic measures necessary to provide for the brass mill expansions, ammunition programs were cut back, but the program reductions' did not occur until fall, 1943.
\
3. Other Domestic Requirements
Supply-requirements statements of the Statistics Division in the last half, 1942 and through April, 1943 incorporated estimates of non-military domestic requirements prepared by the Office of Civilian Supply. Under CMP the jurisdiction of that office over all non-military requirements was terminated and no new estimates for zinc were prepared after January, 1943. It thus became necessary to abandon the Claimant Agency approach in estimating requirements in favor of the “primary fabricate!* approach. Statements, prepared in the early months of 1943 by the Statistics Division using one method and the Zinc Division the other gave consistent and reinforcing results.
However, it became apparent after the reports on consumption in the 1st quarter became available that galvanizing was increasing. That fact made it necessary to abandon the use of the zinc requirements
33-888 PIM bu
- 122 -
prepared by the Office of Civilian Supply for Non-Military programs, and, consequently, the Claimant Agency approach* Since April, 1943 estimates of the zinc required for galvanizing and for other domestic uses than for trass mills have not been related to Claimant Agency programs, rather they have been related to modifications in L and M orders and to changes in the production directives of the Steel Division as reflected in recent consumption reports*
23-598 P130 b®
- 123 - ESTIMATES OF ZINC CONCENTRATES AND METAL
APPEJDIX F _
***** *• Prepared August, 1942 - December, 1943
All Figures: Thousands of Short Tone, Recoverable Zinc Content
1 q 4 2 ohi 1 16 4 4 1 9 4 5 1
Source of Estimate CRMB Report No. 1 5/ * Zinc Branch Chart •/ Actual CRMB Staff Report No.l Zinc Branch Chart •/ MMAC Doc. •/ CRMB Staff Report No. 3 Memo ' Woolley »° Batt SI MMAC Doc. •/ MMAC Doc. 1/ R.C. Doc. 2002 •/ R.C. Doc.' 2043 il Actual Zinc Branch Chart •/ MMAC Doc. •/ Memo Woolley to . Batt il MMAC Doe. •/ MMAC Doo. •/ R.O. Doc. 2002 Zn.Dv. R C. Doe. 2043 4/ Bal. Sheet T 4/ Zine Branch Chart •/ Memo Woolley to . Batt S' R.C. Doc. 2043 4/
Date of Issuance Of Estimate Aug. 27 1942 Aug. 1942 Aug. 27 1942 Aug. 1942 Mar.29 1943 May 22 1943 Aug.24 1943 Sept.1 1943 Sept 10 1943 Nov.l 1943 Dec.27 1?4} Aug. 1942 Mar.29 Aug.24 1943 1943 Sept.l 1943 SeptiO Nov.l 1943 1943 Dec.27 Mar.8 1943 1944 Aug. 1942 Aug.24 1943 Jan. 7 1944
NEW SUPPLY Domestic Mine Output 840 Imports of Ocncaitaates 329 825 175 768 313 780 380 ?80 26O 720 504 720 72O 467 712 502 712 464 712 464 729 464 742 452 700 340 65° 580—' 650 476 714 446 714 470 714 470 714 470 714 478 64o 610 383 501fi/ 410
Total Concentrates Import of Metal 1159 39 1000 36 1081 39 1160 49 io4o 36 1224 42 1215 60 1187 67 ïârr 61 1176 5« 1176 61 1193 62 îïK 69 W 4o I23O 54 ÎÏ25- 56 TEST 54 1184 73 ÏÎ8ÏF 71 1185“ 71 1192 75 990 4o 993 56 IT 70
Domestic Secondary. i/ • 61 61 * 45¿/ 49 46 35 35 55 55 59 • 45J/ 46 35 35 55 55 52 «6 46 55
Total New Supply 1272 1036 1181 1270 1076 I3II 1324 1300 1310 1269 1292 1310 1322 1080 I329 1228 1249 1292 1310 1310 1319 1030 Ä95 1036
Domestic Slab produced from Ore • 9°6 - 891' 991 - N.A. 993 945 988 960 94o 940 932 N.A. N.A. 944 1020 960 940 94o 94o - - -
CONSUMPTION, REQUIRE- MENTS 4 EXPORT Concentrates.other than . for metalé' ISOS' Domestic Requirements for metalé' , 766 - 114 776 1341/ 791 - no*/ 927 107S/ 932 97 «33 96 900 96 848 176a/ 848 119 848 109 865 N.A. N.A. 12oV IOI5 97 920 116 1008 109 944 1892/ 944 146 856 128 884 - 97 920 -
Exports of Metals' 141 ma 137 167 — 108 113 106 107 _22_ 92 92 111 N.A. 164 88 88 28 28 28 37 — 88 ■»
Total Requirements IO37 1010 1027 1092 1120 1145 1141 1036 1103 IO36 1116 1059 1085 1140 1299 1105 1212 1081 1162 IO3O 1049 1150 1105 1030
INDICATED SURPLUS Concentrate Metal 133 102 76 78 35 143 - ill 11? 145 119 130 120 II3 60 116 134 116 - 72 -42 85 38 24 13 115 _2L 55 9« 181 124 147 - -
Total Indicated Surplus 235 26 154 178 -56 166 172 264 207 233 176 251 237 -60 3D 123 37 211 149 280 270 -120 -10 46
I I g i/
VI
Includes as Imports shipments from Canada and Mexico on U.S. account since exports include the obligation against which such shipments would be made.
Includes secondary produced at primary plants.
Includes all requirements for concentrate other than for metal -- for oxide, duet galvanising by the Tainton process and for other compounds. In the case of the Requirements Committee Document 2002 a siseable requirement was introduced as unaccounted metallurgical loss. Two methods of estimating requirements for concentrate other than for metal have been used — a "put into process* method and a "recovered in products* method. These have not yet been fully reconciled and account for some of the discrepancies between figures.
Prepared by the Requirements Committee Staff of the Statistics Division.
Prepared by the Zinc Branch (Division).
Includes Remelt
Stated to be 125 to which the difference between "required for smelting* - 911 and smelter output from ores. 906. has been added.
Net of old alloy scrap.
Stated to be 125, to which the difference between "required for smelting*. 1000 and smelter output from ores, 991, has been added.
Allowance is made for 20 thousand tons of secondary production at primary smelters and is included.
Estimated from the gross weight.
Estimated from Metal Content (which was mls-labeled recoverable metal content).
Stated to be 96 to which the difference between *requlred for smelting* (1004) and output from ores (993) has been added.
Includes in "Metallurgical and Other Losses* the equivalent of the "Unaccounted-for-surplus* discussed in R.C.Doc. 2043.
Assumes B and C Premiums were removed.
M.
appendix f
- 124 -
T4BUB II.
ESTIMATES OF ZINC METAL grgparod April, 1942 - Dec—bar. 1943 All Figures: Thousands of Short Tons
1942 1943 1 • — 2 •• 2
^outh Dakota 7 * SB de 9 • — * 11 * — • 26
Texas w SB * • 2 2 • SB 1 SB * «B 11
Utah 5,744 5,785 5,994 5,952 5,518 4,884 4,591 5,687 5,384 ■5,24s 5,113 5,450 66,250
Washington 422 375 385 135 213 422 376 405 409 517 615 700 4,980
Wyoming • • • » • - • • » OB * *
19,697 18,928 20,637 19,598 19,430 18,451 16,988 18,179 17,899 19 ,‘360 19,301 90,039 ■229,763"
Alaska 30 19 21 17 - 28 12 24 8 23 4 10 212
Total by Month 36,449 35,549 39,236 38,389 37,052 36,08? 35,749 37,494 35,84« 37,295 36,731t 37,464 44t>, 34«
1/ Final totals by state do not equal the sum of the monthly totals by state because final adjustments and additions have neen made.
2/ Eastern States included aret New Jersey. New York, Tennessee, and Virginia.
2/ Central States included are: Arkansas, Illinois, Kansas, Kentucky, Missouri, Oklahoma, and Wisconsin.
kJ Preliminary figures, subject to final revision.
Prepared byi
Program Section Tin-Lead Division War Production Board March 9» 1944
5 ;
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B «
TABLE UI
Iworta of Refined Lead by Country of Ortwin. 1042 and (In Short Tons)
19142 January February March April May June July August September October November December Total
Australia 2,502 14,669 11,755 4,480 2,647 9,296 22,907 5,481 2,259 5,149 2,241 1,581 84,747
Canada 5,506 870 444 2 101 356 151 8,051 22,776 7,162 8,058 16,655 70,090
Mexico 5,769 15,100 16,406 11,734 19,071 13,724 19,185 18,105 13,921 17,675 16,525 25,197 192,408
Newfoundland « «B an am * * «n an SB an * an
Peru • « 2,765 3,659 a. 1,52*9 3,165 an « 10,812 • 22 21,948
Bolivia ae BB an BB am * * * ae a. WB am
Fr. Eq. Africa » • » » « » « « an SB am a»
South Africa ms » * * •» « « am « * * ■am am
Other 1/ 2 « 8 • • - 1 • • an 50 « 61
Total 13,779 30,659 31,376 19,855 21,819 24,926 45,404 31,655 38,936 40,848 26,804 45,255 369,254
ate Australia 784 4,154 2,931 1,124 1 8,994
Canada 1,188 1 1 * cm SB * « » 30 202 31 1,453
Mexico Newfoundh. nd 15,687 22,614 24,016 9,772 18,512 21,699 20,557 18,477 15,302 20,575 16,4O4 12,529 213,724
Peru Bolivia 5,168 957 280 2,811 2,552 939 2,990 - - - 448 4,211 20,156
Fr. Eq. Africa * « SÉ * * * — '
South Africa « — * * a. —
Other 2/ - 128 - • am an an an am «B * 1 129
Total 20,827 27,854 .27,228 13,707 20,665 22,658 25,527 18,477 15,302 20,605 17,054 16,572 244,456
1/ Includes Bahamas, Haiti, India, and Pànama.
Includes Canài Zone and Bahamas.
Prepared by»
Program Section
Tin-Lead Division
War Production ^oard
March 10, 1944
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I
TABU If
Imports Of Lead Oreg, ConoantraUa. Matta* Bullion* Km Oust. »to* tr Creata .of frigia» Md 1941
(In Short Tons)
1942 January February March April May June July August Septa®ber October November December Total
Australia 2,075 2.695 11,757 4,172 7,816 6,464 2*211; 4,059 7,195 to - 15,471 65,896
Cana di 591 445 589 460 240 857 780 487 875 1,559 155 992 7,606
Mexico 57 72 90 86 40 92 151 145 259 178 1,081 184 2,415
Newfoundland 1,164 6,06D 114 « «. 663 to 751 7,512 48 • 7,858 25,950
Peru 3.829 685 » « ee 6,295 - to 576 to • 11,185
Bolivia 567 2 5 » SB 768 1 • 241 to 1 to 1,585
Fr. Eq. Africa * * * — to / • to to to to to to
South Africa « « * » so to 4,039 426 to 104 to 4,569
Other 1/ 587 4,574 1 . 15 2,496 23 to 7 700 1 16 8.218
Total 8,270 9,955 16,907 4,719 8,109 17,615 7,188 5,846 16,263 2,589 1,238 24,521 123,220
w
Australia 6,687 5,645 2,57ü * 4,517 1,272 to to 200 2,174 1,117 21,790 .
Canada 1,051 505 575 402 478 475 861 526 552 228 441; 475 6,348
Mexico 156 197 145 75 222 599 426 294 555 440 220 169 5,476
Newfoundland 5,670 2,975 28 SB to to to • • 6,195 605 15,475
Peru ■a 1,095 1^049 to to to to 805 • 557 5,481;
Bolivia 54 1 * 1 5,157 to 87 to 12 to 58 5,510
Fr* Eq* Africa 3,472 ee * * fl» to * to • • to 2,245 5,715
South Africa 2,354 2,501 SB to to to to 2,548 46 1,04? 1,958 10,012
Other 2/ 55 6 218 270 2 1 to to 18 • 168 718
Total 15,105 9,657 5,051 4,167 7,156 5,591 2,560 907 5,215 1,749 10,078 7,290 70,326
2/ Includes Argentina, Burma, Chile, ^osta Rica, Ecuador, Guatemala, India, Nicaragua, Salvador, andfSouth Rhodesia* 2/ Includes Algeria, Arabia, Costa Rica, Cuba, Ecuador, Netherland Indios, Nicaragua, Salvador, and South Rhodesia.
Prepared by»
Program Section Tin-^ead Division War Production Board March 10, 1914
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TABLE V
Exports of Refined Lead, 1942 and 1943 ( In short tons )
Destination
1942 January February March April May June July August September October November December Total
United Kingdom A « — — Sb 672 454 1,481 2,639 5,21j6
Brazil 2 • • 34 • *• — 15 * « « 51
Canada • • * • — 1 « * — k 1 2
Canal Zone 55 1 1 - * • — - 2 « « 59
Chile — •• — •• — ta» w 17 1 — 18
^^lombia 1 1 4 0 1 - • - * 1 1 5 6
Curaoao — — — - - • 6 6
Iceland — • 3 — 3 - 10 a. 16
Panama 2 — - 1 - — 2 — « — io 15
Paraguay • — • tai — — • - * * - 90 9Ô
Sweden — — * - — «• 224
U.S.S.R. • • — •• *• ? e» W» 6
Venezuela 19 1 • — — — - — * 20
Other 1/ 2 8 » 10 1 10 - 3 h_. )lt L_ - ...1 *» -----5Q
Total 81 11_ 229 50 2 _10 _ 16 692 4si 1,497 2 2,743 _5>^
United Kingdom 1,12Q 3,301 • - « 1,009 3,816 1,138 870 1,012 12,275 779 Q
Brazil 6OO 151 es * — 1 27 «• «•
Canada •• •» — — 6 1 •» 2 —
^Mnai Zone • -• * - — • - - « — j.
Chile • — * 5 - * • ■* 2 7
Colombia CW 1 SB 1 oa 26 20 1 1 1
Cuba 5 1 6 — 4 3 1 5 1 26
Curacao • » — — 1 1 • » *' 1 4|. Q
Iceland <* 12 — — •• «• ta * 1 13 g
Panama - •• - — - — • • « » - M 8
Paraguay • 34 -• — • — - ' —
Sweden — • - *» • « - * — —
U.S.S.R. -• ** - - — — -• • 5 « — 8
Venezuela 1 — 1 1 - — « 2
Other 2/ 5 - 3 * 2 4 _ . 7 6 1 30
Total 1,735 5,1*67 37 15 2 1,026 5.81 1,168 ’ 839 8 ^7 1,030 13,262
1/ Includes Greenland, Haiti, Newfoundland, Nicaragua, Bolivia, Iran, Surinam, Dominican Republic, Trinidad, Netherlands West Indies, Liberia, Honduras, Eouador, Nigeria, British East Africa.
2/ Includes Bahamas, State of Bahrein, Belgian Congo, Ceylon, ^oninican Republic, French Oceania, Guatemala, Honduras, India, Iran, Jamaica Liberia Mexico, Newfoundland, Salvador, Surinan, French Guiana, French West Indies, Palasti» and Trans-Jordan. * * *
Prepared by«
Progran Section
Tin-Lead Division
War Production Board
March M, 194+
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s M
e
APimron h Statistical Summary of tine, 1942-1943 (In thousands of short tons. Concentrates In recoverable sine content)
1942 Total Jan. Feb. .Mar* Apr, May June July Aug. Sept. Öct. Dec.
STOCKS - BEGINNING OP MONTH - Total 353.1 338.0 329.6 331.4 343.8 354.1 362.6 376.0 407.6 430.4 444.9 463.5
Concentrates 249. 0 ¿34.0 227.6 SO §34'75 ^.■5 ¿37.6 54176 §6073 §7773 289.0 ¿97.5
Blab Zinc 104.1 103.1 102.0 101.6 109.0 114.2 125.0 134.4 146.8 152.6 155.9 166.0
MEW SUPPLY - Total 1,154.7 93.5 92.6 98.2 98.3 95.5 83.3 98.6 94.8 102.3 94.5 94.4 108,7
Domestic Production — Total ¿05.7 &.S §5.7 7Ï.8 71.2 7571 67.0 ôSTS 34 JS 61 7 64.5 8177 "65.Ö
Concentrates 762. Ö 86.5 8375 e Ö 68.0 sw 34.1 3273 8i;i 3371 88.3 SBa 4 8578
Secondary Slab Zinc 1/ 39.8 2.8 2.5 2.7 3.2 3.8 3.8 3.7 3.2 3.6 3.9 3.3 3.3
Imports - Total 352.0 23.9 26.9 26.6 27.1 23.4 15.4 32.1 30.5 40.6 30.0 32.7 42,8
Concentrates 3Î87Î ¿oTi 5474 24.5 5Ö77 TïTÔ 27 aO 561 ¿7.4 5Ö.7 5875
Slab Zinc including Shipments 38.2 3.5 2.5 2.9 2.6 2.7 1.4 4.6 4.5 3.2 2.4 2.0 6.6
CONSUMPTION AND EXPORTS OF CONCENTRATES AND SLAB - Total 1.007.4 84.9 84.3 88.7 89.4 78.6 79.4 70.4 75.6 81.0 82.4 79.5 79.8
Concentrate Consumption by Dust A Oxide Plants 95.3 1 J "TÇ? â 9 “574 ”7T3" ™7Tu ”7-2 “772 “878