Document LJO80D0Y948aMMdGadqgKyrVX

mn tg.m jh iwn Jj..i LlA?l?34 -xi^AHjirii,----UEer> *f, - LEAD INDUSTRIES ASSOCIATION Graybar Building, 420 Lexington Avenue Naw York, N. Y. 3 1 /i 3 d March 8, 1935. Bo b. Thooaas Walter Page, Chairman, Committee for Reciprocity Inforraatiea. United Statei Tariff Cocarl salon, Washington, D. C, Saar Sin Subject: Trade Agreement negotiations with CanadaProduct: Load ore a, pig lead, metallic lead products, lead plcmcntu and foil. In connection with the trade negotiation! to be conduct:i by the State Department with the Dominion of Canada, the Lead In dustries Association, representing the lead mining, smelting, re fining and manufacturing industry of the United States, respectfully requests that no changes be made in the tariff rates established by the act of 1930 upon tho numerous lead products of our Industry, l.tl., paragraphs 391 on lead bearing ores, and paragraph 392 on pig lead and metallic leal products, paragraph 72 on lead pigments and para graph 372 sad 397 on foil, for the following reasons, which are sub stantiated by detailed statistics and Information appended to this statement: ' 1. These tariff rates were established in 1922 and were not increased by tha Tariff Act of 1930. / 2. They provide American Labor with the pro tection It needs against foreign competition and help to assure steady ecploynent in the lead industries. 3. The rates are already moderata and reasonable sM quite in line with the policy recently expounded by the Rational 2ssources Board which states: "It It sound and wits American policy to giro reasonable protection to those branches of ths American mineralIndustry which have adequate deposits available at reasonable prices." * Xxcorot from "Report of the Planning Cocssittee for Vlneral Policy, Part XT, Rational Resources Board, 1933. rfcsiewnpger. ? n N16893 THE TiSlTT RISES CBT LUD PRCI0CT8 ;.-------- .. - ill The Tariff Act of 1930 established the following rates on load products t&lch are the same es the rate* established by the Tariff Act of 1922 a* no Increases were requested of Congress at the time of the tariff revision of 19301 Paragraph 391 - Lead hearing ores, flue dust, matte. ill per lb. of lead content. Paragraph 392 - leal bullion or base bullion, lead in pigs and bars, lead f-?es, reclaimed lead, ecrap lead, antisocial lead, antlmoaial ecrap lead, type metal, babbitt metal, aolder, all alleys or combinations of lead not specially provided for. 2-1/8/ per lb.of lead content. load In ehaete, pipe, shot, elating lead and lead wire. 2-3/8/ per lb.of lead content. Paragraph 72 - lead Figments: Litharge .... 2~l/Z` per lb. Orange Mineral 3 f per lb. Red Lead ..... 2# * per lb. White lead.... 2$ / per lb. All pl^oents containing lead, dry or ) In pulp, or groom In or mixed with ' oil or water, not specially provided for. 30 per cent ad valorem. y Paragraph 372 - Tin Pell 35 per cent ad valorem. Paragraph 397 - Poll, base metal. 45 per cent ad valorem. PR2SCTT PXPHZSSg) SITtU-TIOr DC TEX UULD IBDCSTHT The United States Is the principal producer of lead In the world, and ihe utilisation cf this great natural resource furnishes an important souroe of employment In the Western mining States. Cven today, *hes the depression has left Its Dark upon the metul Industries, lead production affords Important employment ready to be increased upon a recovery la the lead market. A recent report of the natural Sesources Board, already  ^*^^ar-gga3W`'"**reejSawgi^^ t-y!fe;y?y--^':'?-^.r.*r*!idiftsi JV wwwwjwfs Ll^l7 35 i&foV^ihiitt> v ii b / J|& & ifr i:tfT,ii>(i\ i )>i r i ir it r t t k iiy ifc fis i r V r t t 1y- 4. Increased unemployment In the land Industry, which would ho ceused by competition froa Canadian lead importations, would Ilk*wlsa 'decrease employment in many industrial, including agriculture and the railways, sow serving the load Industry. 5. Vore unemployment In the Western lead mining and smelting States would sake an already serious situation worse, especially If it brought about complete aba<donaeBt of some lead atines with Irreparable injury to lead reserves. 6. Under the terns of the most-farored-nation agrecsk-r.ts with other countries, a change in the lead schedules granted as a faror to Canada would cause immediate importations froa other conntries producing lead products, such as Great Britain, Spain and Germany. Bsspeetfully snhcltted, CLIKTOH H. CBC5 (Signed) President. I |ggWM!j.Mg L1/5 21 737 i*Mi*j[-ijifww`*)yvi .1e|i' lyewy-MWimi 'nnm'nwiin'.' - 4- referred to sett forth clearly the present severely depressed condition of the lead mlnine Industry. It state that: The mine output decreased from an average of 664,000 tone a year In 1925-1929 to 273,000 tone In 1933, a decline of 59 per cent. The average, however, does not shoe the full extent of the decline In some inportont district*. In the Western States lead is large ly derived from complex ores soid the by-products, especially tbs gold and silver, recovered afford a substantial credit. In Missouri and others of the Central States the gold and silver are absent or, at best, unimportant, it a result, the decline of production has been the greatest In the Central States, there 19ho outwit was 62 nor c-nt <J below the prodeprassiou lovel,against 57 per cent in tho West.* The report farther states that: These r enditions hays resulted In widespread distress In tbs -ocoonltles dopendent on lead mining and smelting. The number Of men employed baa dropped to barely half of tbs 1929 level, a decrease of 14,000 men. Meanwhile, the working time of those still on the rolls is diminished by the necessity' of spreading the employment available.* Refined lead production In the Ohlted States from doosstic ores In 1934 was equivalent to the production for tbs year 1904, dilch will give some measure of the depreseed state of the lead mining Industry. The table on ?ege 9. showing lead production for the years 1920 to 1934 Inclu sive, the last fifteen years, will show the sharp curtailment that has taken place over the ?ast four years. Lead and Its si star non-ferrous metals have been the commodities j most adversely affected by tho depression. Tbs non-ferrous metals have had no relief from any source. There have been no OoTwr.xant.il resselles 7 instituted by the Administration to help the American miner of non-ferrous Detals comparable with whit hca been lone In agricultural lines and yet his position today Is lust as acute as that of the farmer. large wishers of prospectors and 'small producers of lead have been driven out of business altogether, rs pr ic es or u x d amp orsxa sowcpirro < The relationship between the price of lewd and the price of other commodities with which I't is exchanged In commerce le best indicated by comparing an indox of the price of lead with an index of general comsodlty prices, prepared by tho Bure.ui of iaoor Statistic*. lhle is shown In tbs table below and It demonstrates how, ever dace 1926, the prios of ?*ad cat been depressed below the general average of all prices. Over the years 1931 to date, the discrepancy between the two Indices has been particularly striking. it shows that the product of the lead miner cun not be exchanged upon an equitable baelt today with the products of industry and agriculture as a whole. 1 f-'Jg*----V--> ... --I* M.l. ..I, Vy.-W'-*.11. * ""Wr ( twfJ.H Tear 1924 1925 1826 1927 1928 1929 1930 1931 1932 1933 1934 i3tu -6 - Index of Dew Tork Lead Prlos 96.8 107.1 100.0 80.3 74.9 81.1 65.6 50.4 37.8 46.0 45.8 i nirv!!,`'w> uafcr.^Hni*iiff~*3MfafcAA. LIA21738 Cocanodlty Index Bureau of Labor Statistics 98.1 103.5 100.0 95.4 96.7 95.3 86.4 73.0 64.8 65.9 74.9 gg DBOP DT I&tp FHICES If the cerirss of the load market la traced over the last tea years, the aerere decline In tho lead price becomes apparent. The following table gives the average prise of Sew Tork pi* lead for the years 192-1 to 1934 inclusive! mat or mx d pm potno less. Sew Tork Price Conte Per lb. 1924 1925 1926 1927 1928 1929 1935 19a 1932 1933 1934 ItarPh 1, .1935 8.10 9.02 8.42 6.76 6.31 6.83 5.52 4.34 3.18 3.87 3.86 3.55 Orer the last three years of the depression, the price of lead hat ruled well below tho ten year pre-war average and has been 60 per cent below the 1926 level, the goal which the Administration has proclaimed as its objective In the recovery program. arse nr u a p s u p pl ies Irsr sines 1929, the mins production of lead has been mors than the demand called for. As a consequence, a hogs surplus of refined lead now exists in tho Units! Status, snough to fill domestic requirement* for a year at the present rate of consumption. A largo part of the accusulatlon repre- asnts the efforts thick the American lead producers her* mads to kssp thslr operating forest occupied as such as possible and to hsep thslr properties open for closure might mean the lots of valuable ore reserves. The pro ducers have willingly tied up their capital In uxcess stocks of lead to give their employees employment la mining and sswltlng communities where often tb* only other alternative ha* been public relief or acute distress. Th* table asvr f -mm. V ^ae^ggsjtwLjw' eggj?rs?y^ tJoE-dami>ttgJiia*taMsama.c^^ *M.^.< -f"tf-r' **- -."^- s---ff^r -j-rtfufri--- -i^hrrr-x*^--flu tiw < l^*|jRgtfMl^ir`l|rgP.< Vh^yt^r.V>ii T*"il; . LIA21739 - 6below show* bo* these stocks have Increased In tbe psit fire year*! LEAD STOCKS - CTXTS5 STEHS In Short Tena Tear Beflned Pig Lead In Ell Ti January 1 1930 January 7, 1931 January 1, 1933 January 1, 1933 January 1, 1934 January 1, 193S 42.000 96,00 147,000 165,000 192,000 225,000 TESTS OT ORB HSFESTtS 111,000 159,000 218,009 263,000 296,000 315,000 It la well known that nine a can not abut down and reopen as easily aa factorise. E closed mine rapidly deteriorates, fills u p with water, or caves, asl the injury to tbe ore deposit through dilution of tbe ere with waste may be so serious that costly reopening may be prolonged Indefinitely or tbe mine abandoned altogether. Tbe report of tbe Natural Resources Board, already referred to, develops this point In an able manner, and,although Its remarks were written with copper in mind, tbry are equally applicable to lead: Sot least important, these fluctuations in price and output lead to serious waste of tbs resource. Mining efflclency and resource recovery require orderly and continuous operation and ara handicapped by violent change in demand. Existing mines were laid out with a certain price level in mind and with a certain anti cipated life. Then prices collapse, the Initial plan of operation most all too often be discarded. Today miss operators are driven to neglect the most elemen tary work of oainteaanca. They are driven reluctantly to practice `selective mining'; that is, to take only tbe rlclmst portions of tbe ore body, abandoning the attenpt to recover tbe associated lorer-grade material. This practice of gutting the mine or 'picking tbe syws out' reduces the average value of the ore left behind and at tbe saao time increases future cost of recovering It, through caving and flooding of the workings. Again, mine owners are forced to take out the olllars previously left for ruoport, when they contain bodies of high-grade ore, thereby allowing old stopes and levels to cave. Es tbe shut-down continues, tbe damage grows progressively worse. Shafts sal main haulago-ways collapse. Barren rock and ore are crushed and mixed together, making future separation difficult or impractical.' In tbe great shrinkage stopes used in some mines waste rock singles with the broken ore, diluting tbo metal content of tbs product and gTei.tly Increasing tbe CQS.t. In K1 ehignn and elsewhere nines are filling with water. The con ditions cltod are not imaginary. They are actually going on in many ones famous mines, and taken together they act to endanger resumption of mining and to raise future costa. Tbs Increase In cost cannot be estimated closely, ft depsnds on conditions and on the time that may elapse before attempting to resume production. But any mining man can visualise conditions chore the unit , Hr" 3 ~ e^kU +iU Ll*zi?Vo' iii^Hr^-* - ' --i rir^'HV* i-- - 7- cost of later reopening and recovering the re it of aa abandoned ore body might be 50 per cent, 100 per cent, or 200 per ten'; more than the coet it the tame ore had been talesn out in one continuous operation under the original plan of development." loner lead prices if brought about through tariff negotiations with other countries, may, thereforo, work irreparable injury to our lead ad nee. uup rotro nr cctgigc o h x s X large portion of the lead production of the United States is derived from complex ores, that is, those containing two or more non-ferrous metals, chiefly combinations of lead and tine minerals, The miner of com plex ores la concerned chiefly with the gross value of hie product, that is, the combined value of all the recoverable metals in his ore. Seductions for concentrating, transportation, handling, smelting, refining and selling, at today's low price of lead, do not leave him much of a margin. If any, after be sells his production. 2ven a slight disturbance is the price of lead,brought about by a reduction in the tariff, would be, in many cates, the straw that breaks the camel's hack, and force the miner to abandon his operations, sot only of lead but of xlne, silver, gold, or other metals. So closely are tbs lead and sine mining operations of the Test allied that employment figures must bs studied from the standpoint of the amount of work furnished by both the lead' and zinc Industrie* together and the employment indirectly given other indus tries. The lead and sine Industries combined provide employment today for probably 50,000 persons, which is far below their past performances. Is * general business recovery, the lead industry may be oxpected to furnish much more employment, provided, of course, there is no reduction is its preseat tariff protection. opsa nDusTaas j j t c t o furthermore, the wealth creating function of the lead industry fur nishes incalculable employment in thoed industries which serve it with supplies such as, drill steel, powder, and lumber, to thousands of neighboring farmers / who supply foodstuffs, not to msntion the huge revenue which the railways derive from transporting mining supplies and mining produce. There is also the important consideration cf the employment which mining and smelting gives in Western States where there is no other source of livelihood. In many mining camps, if it were not for the continuous operation of the lead mines, distress would be so acute that Government intervention at great cost to the Government would be necessary, Tne sparsely settled States of Idaho, Utah, Montana, Wevada, Colorado and elsewhere in the Test, lean huavlly upon the mining industry for revenue with which to support thulr own State Governments. It would bs nothing short of disastrous if the lead nines anl smelters wore to shut dovn, simultaneously forcing their employes* on local relief roll* to become a burden on the State, and, at the em*. time, taking 0 away from the State lone of the very revenue it need* to help support tbs unem ployed. *9 At."jfgwwBff"jiawwWjxyrMumyrn,ffii" i r' -- .J-* LIA21741 4 -8- IM SSITITO ASP KOTHm IlfflUSIBT It is obvious that further curtailment cf tbs mining of load aud lino eorlously affects the smelting and refining industry. The smelters are dependant for their very existence on an adequate supply of ores. Shelters and refiners in the United States are, therefore, vitally Interested to an equal extent pith the miners, in the general conditions of the Industry, and employment in this branch is dependent on the activity resulting from such conditions. The lead smelting and refining Industry of ths United States has also accumulated large stocks of lead in its effort to yield the maximum amount of employment possible. If their domestic sources of supply are dried up by reason of tariff lowering, the smelters and refiners will also add to existing unemployment. it s c ak j o iav po s it io n Canada Is favored by unusually rich and remarkably large lead-zinc deposits in British Columbia which have been able to produce lead and sine profitably at the present depressed world level prices. Ths Canadian lead market le: protected by a tariff rate on pig lead and an anti dumping lav which protects the Canadian market, and 2. ths Canadian production has a preferential outlet, through ths Ottawa Agreement, in England. It is not reasonable under these eonditlcnsjfor Canadian laad and tine to saek a third protected market as an additional outlet, with resulting unsettlement la world markets. ' Canadian lead production has grown rapidly end has been maintained throughout the depression at a rate fully as high as tho average production for -he four years prior to 1329. A relatively high output has been maintained ' despite the fact that Canadian ttr.c and lead are sold mainly in Xwope at a price more than one cent per pound lower than lead has been sold in ths Uni ted States and in the face of sn almost constantly declining lead market. This will present some idea of the remarkably strong competitive position of fia^arfa by reason of its unusually rich lsad or* aeposlts. At the same time, American lead production has been curtailed greatly, bringing It back to an output equivalent to the production of lead some thirty years ago. Canada is at a youthful stage is its mineral development,comparable with ths position of the United States many years ago -hen a grade of ore was mined richer than that generally available today. i .HLJwtiitiUT, lii^^aHwwuy.sgrri'iJjuwi r\ / \ | ^ "' ' '-^xv - ... - .: -9- ` The following table not only shows the striking recent growth In the com petitive position of Carnda In the production of lead over the past fifteen years, but also Illustrates the force of the conclusion that Canadian competition Is a serious threat to the American producer. PSOPUCTIOB OF UUP (In Short Tone) Tear United States Canada - 1920 476,000 18,000 1921 402,000 34,000 1922 470,000 46,000 1923 530,000 54,000 1924 690,000 87,000 1925 663,000 127,000 1926 696,000 141,000 1927 673.000 156,000 1928 650,000 170,000 1929 688,000 159,000 1930 593,000 166,000 1931 411,000 143,000 1932 277,000 130,000 1933 293,000 130.000 1934 (estimated for December) 360,000 157,000 for December) Our country has ample resources of lead ahleh hare been and are sufficient t *tisfy all domestic reculreaents and there is no need of importing an additional supply frees any source s^cut tide the United States. There is normally a close ' balance beteeen Uni tod States lead production and deanad. ) t is it t iu j s s as uiswMsrmxn ie -d pr o d u c t s (Paragraphs 72, 372, 392 end 397) As the tariff on manufactured lead products has been established at a rate which will compensate for the protection given lead ores and pig lead, it It also essential that no change be made In the rate* provided by Paragraph 72 on load pigments, paragraph 392 on metallic Isad products and paragraphs 372 and 397 on foil. The lead miner* and smelters as '=*11 as the white lead manufacturers view with grave apprehension th# reduction In the white lead tariff granted to Belgium recently and desire respectfully to protest this action. The treaty with Belgium, reducing the duty from 2.5<* to a duty of 2.Id per lb., on i&lte lead, tahes away the compensating duty which Congress has Invariably given the lead corrodor* a* the pig lead duty 1* 2.125/ per lb. The compensating duty on white lead hat always been considered rather low because of. the relatively lower labor costs abroad. If this breach In the wall of protection granted the lead industries results in aa influx of white leid from Belgium and from other eountrie* to whom most-favored nation arrangement* apply, an already eerlou* lead situation will be further de pressed. ' rjjwyw; :' ynyift;^ M.'ssww^yyvgag<^jj^u.jwyjWiyJ^i^j!i^| epeg$!geagnwaafBMmsaaMMSB^^ w v i L IA 2 174 3 - 10 - COICiCSIOJ Despite tha adverse condition* under which, the lead Industry ha* operated during the oast four year*. It haa sincerely cooperated with the recovery program of the Administration, through the M.R.i,., In raising wage* and trying to increase employment, logo Increase* took place In 1933 and 1934, bringing tha scale back to tko 1929 level, or close to It, and costing employers great expense without coDsensurate return because the wage Increases were mad* In the face of a lead market which declined practically all of 1934. The mining plants, smelting and refining establishments, white lead factories, lead pipe and slet lead plants, etc. of the lead Industries represent substantial investments and employment facilities In practically every State In tin Union. It would o* a very costly move to sacrifice the** widespread interests by adding furtbsr foreign competition to an already highly competitive domestic market, Specifically, a decrease in the price of lead, caused by a reduction in the tariff, would result primarily In either: 1. 1 reduction of wages to code minimum* or blaw, or 2. A. complete shut down of mmny properties now struggling i to keep going, and producing lead below cost, thereby Increasing unemployment In tha lead Industries, and causing Irreparable damage to many mining properties. 3. A. decrease In federal and State Tax revenues. Moreover, Increased foreign competition In manufactured lead products caused lor a reduction la the present lead schedules, would Increase uneeployaent In the lead pigments and metallic lead products industries. On the other hand, if there 1* no change in tbs tariff rates on lead products. It Is to be expected that, as recovery proceeds, the lead induetries will prove to be a fertile field for Increased employment. It Is likely that, together with the fine Industry, the lead industry may account for 130,000 employees rather thou the 50,000 now engaged In these Industries. Respectfully submitted. * ; 5 itffm ^ywqigri f 111 m <i^111j4l1wt jH u iy p Clinton R. Crane, 420 Lexington Avenue, Mew Tork, M.T. Personally appeared before me, a Motarr Puollc In and for tha County of 5<" T?rk7SUt* f **" Yrk* tM# 6th d*>v of Rarch* 193. Clinton H. Crane, per sonally known to me as the signer of the foregoing, who after having been duly sworn doclaras upon his oath that he has reod tha foregoing, that it was prepared by him or under hi* direction, and that the s ms * Is true to the best of hi* know ledge, Information and belief. Subscribed and sworn to before me, this 8th day of March, 1935, Kotary Public. $&&*+**