very high level. I would say we started to get off the floor in 1962, and move up, and we then did, from 1963 to 1966.

However, it had not occurred-1958 to 1962, I would say, were not good years for the economy as a whole. Senator Moss. Senator Jordan?

Senator JORDAN. Thank you. I just have one question, and it is this: Does Australia impose quotas or tariffs on any imported commodities? Mr. FLETCHER. Not that I know of, Senator Jordan, but I must confess that I am not an expert on all Australia's trade. As far as I know they do not have them on any of the nonferrous metals or on lead and zinc.

Senator JORDAN. And in your opinion, they operate on a strictly free-trade basis?

Mr. FLETCHER. Oh, no, sir. I do not mean to imply that. I do not know of any country that does. And I do not think Australia makes the claim. I will say this: Australia has no duties whatsoever on lead or zinc concentrates, or on lead metal.

Senator JORDAN. But they do on other commodities?

Mr. FLETCHER. Oh, they will on other commodities, and this country has a lot of duties on a lot of commodities, Senator.

Senator JORDAN. Thank you.

Senator Moss. Thank you very much, Mr. Fletcher. We appreciate having your testimony, and I may say it is very thought provoking. We certainly will deal with it and discuss it thoroughly within the com

mittee.

Mr. FLETCHER. Thank you very much, Senator, for the opportunity to appear. Senator Moss. Mr. Michael D. Jaffe, general counsel of the Liberty Lobby, is our next witness. Did I pronounce that correctly?

Mr. JAFFE. Yes, sir, Jaffe.

Senator Moss. Mr. Jaffe, you may go ahead, sir.

STATEMENT OF MICHAEL D. JAFFE, GENERAL COUNSEL, LIBERTY LOBBY

Mr. JAFFE. Thank you, Senator.

Mr. Chairman and members of the committee I am Michael D. Jaffe, general counsel of Liberty Lobby. I appear today to present the views of our 12,000 member board of policy, on behalf of the 170,000 subscribers to our monthly legislative report.

Liberty Lobby supports S. 289, and recommends its early enactment into law. We take this position because we believe that the national defense demands the strengthening of domestic production of strategic minerals, the avoidance of overdependence on foreign sources, and that this legislation sets up a constructive policy for achieving that goal.

Since October 22, 1965, when the President terminated the Import Quota Proclamation of 1958, there has been no effective means for controlling excessive imports of lead and zinc.

It is true that, at the time of the quota termination, there was a shortage of these minerals in the United States, making increased imports necessary. However, since that time, revitalization of the lead and zinc industries in this country, combined with increased production around the world, indicate that a flood of excessive imports, detrimental to the American industry, may possibly be forthcoming unless prompt action is taken by Congress.

Experience has clearly shown that presently available Tariff Commission procedures are far too slow and ponderous to provide the needed relief before a great deal of damage is done. And provisions of the Trade Expansion Act of 1962 seem to preclude the Tariff Commission from coming up with a finding of injury to the industry due to excessive imports.

We feel that the legislation under consideration today provides a good balance between the need to strengthen domestic production of lead and zinc, and the need to have alternative sources of supply available when domestic production does not meet demand. We are aware that a certain amount of imported lead and zinc is necessary to Amercan requirements, and we feel that S. 289, by attempting to correlate import quotas with American need for imports, assures against shortages of these strategic minerals.

The American lead and zinc industries were subjected to a disastrous imbalance of supply and demand which brought them to a virtual standstill in the late 1950's. Now, because of increased world demand, closed mines have been reopened and new sources of supply are being developed. Smelting facilities are being expanded. These developments are advantageous to American national security and should be encouraged.

But, the costs of reopening closed mines and smelters are extremely high, and it therefore follows that a healthy industry requires assurance that it will not be swamped by imports. The flexible import quotas set up by S. 289 provide such needed assurance.

Liberty Lobby's primary interest in this legislation, to reiterate, is in the beneficial effect it will have on our national security.

We are not representing any particular interest of the industry, either domestic or foreign, and it is elementary that our national interest requires that the United States attempt to come as close to selfsufficiency in the production of strategic minerals as is possible.

If we are to work toward this goal, a maximum rate of exploration and development of our mineral resources is necessary. And such a high rate of activity on the part of the industry cannot be expected if it is to be subjected to irregular invasions by unneeded foreign imports.

The lead and zinc industries have very recently been subjected to such an invasion, and were very severely hurt by it. Fortunately, they have recovered, and are now in a position to expand. If Congress does not act now, the next invasion by foreign producers, aided by vastly lower wage scales, and inferior safety standards, may well cripple them, and leave the United States at least partially dependent on unreliable foreign sources for two strategically vital minerals.

Thank you.

Senator Moss. Thank you, Mr. Jaffe. Your testimony is concerned, really, with the internal self-sufficiency of the United States in the strategic resource field. Is that correct?

Mr. JAFFE. Yes, sir; that is correct.

Senator Moss. You heard Mr. Fletcher testifying, pointing out that Australia was increasing its purchase of strategic defense materials from the United States, and they are a close ally of ours. How do you balance the interest of having Australia strong and using materials from the United States that presumably are an interchangeable type of materials with your desire to have internal strength here and not be concerned with the outside?

Mr. JAFFE. Yes, sir. Well, we certainly have no interest at all in harming Australia. I think all Americans appreciate the efforts Australia is making in the fight against communism, specifically in

Vietnam.

However, I think, as earlier statements have pointed out, while this measure is primarily designed as a temporary measure to stabilize production, now, if industry-both foreign and domestic-regulates itself under this, there really will be no need for these quotas to come into effect, although, at the present time, there still will be an opportunity for Australia to sell zinc and lead in the United States, and there is really no indication under present circumstances that their market here will be cut off.

And I think, of course, as you pointed out, the primary goal of American policy, sir, should be to protect American industry, to provide self-sufficiency here. I think this can be done by means of balancing these interests, without necessarily harming our foreign trade to any great extent.

Senator Moss. Thank you.

Senator Jordan?

Senator JORDAN. No questions.
Senator Moss. Thank you, Mr. Jaffe.

Mr. JAFFE. Thank you a lot, sir.

Senator Moss. Mr. David Laine, who is secretary of the American Die Casting Institute. Will you proceed, Mr. Laine?

STATEMENT OF DAVID LAINE, SECRETARY, AMERICAN DIE CASTING INSTITUTE

Mr. LAINE. My name is David Laine. I am secretary of the American Die Casting Institute located in New York City. The institute is in the trade association of the custom diecasting industry.

We oppose the import limitations on zinc proposed in Senate bill 289. More specifically, we oppose the limitations on imports of zinc metal.

The proposed quotas on imports of zinc metal are, we believe, both discriminatory and unrealistic-particularly since they make no provision for an adequate supply of special high grade slab zinc for die casting consumption-the principal domestic use for slab zinc.

Experience under the late and unlamented quota system and statistical evidence confirm the continuing imbalance between domestic production of special high grade slab and consumption for diecasting alloy. The implication of now legislating this shortage is a matter of deep concern.

The statistical picture indicates that from 1959 to 1966 domestic slab zinc production increased 29.7 percent and total slab zinc consumption increased 57 percent. In this same period the highest increase in domestic production of special high grade slab zinc was 45.4 percent and the highest increase in consumption of special high grade was 64 percent both of these in 1965.

I don't like statistical presentations. In the present case I think statistics are unnecessary. All I mean to point out is that diecasting is the fastest growing as well as the largest market for slab zinc.

Here are some pertinent considerations. In 1964 and 1965 with metal quotas in force-and more liberal than those proposed in Senate bill 289-the demands for special high grade slab for diecasting could not be met. This resulted in all kinds of of maneuvering including premium prices for diecasting alloy-substantial tonnages moved at premiums up to 5 cents per pound. Fortunately, with the agreement of the zinc industry, legislation was passed to release zinc from stockpile. All, or virtually all, that was sold was special high grade. Without this supply automobile production would have been seriously impeded and the general economy would have suffered.

There is now no special high grade slab zinc in the stockpile and no emergency bank to offer relief. We feel this should not be forgotten. Another consideration is this: Automotive use, since 1962, has been almost 60 percent of total zinc diecasting output. Increases in the use of zinc diecastings per car are most important and represent real gains for the zinc industry. Such gains, however, are often undetectable because of the tremendous impact of passenger car volume on total diecasting consumption.

For example in 1965, when 9.3 million passenger cars were produced, we estimated equivalent use of zinc diecastings per car at 81.1 pounds. and total automotive use of zinc diecastings at 382,000 tons. In 1966 passenger car production was 8.6 million and estimated equivalent use per car was up to 85.8 pounds but total automotive use of zinc diecastings was down to 369,000 tons. Obviously had car production been 9.3 million, diecasting use would have been up to 399,000 tons.

We, of course, recognize this difference between total consumption and per car use. It is to diecasters a fact of life. While the feast or famine of total passenger car production are completely beyond our control, we strive to increase the use of zinc diecastings per car.

This is done by working on advanced designs and engineering zinc diecastings to the style concepts of future automobiles. To us as diecasters and to the zinc industry this is crucial. Adoption by an automobile manufacturer of additional zinc die-cast parts is not easy to accomplish. When a part appears satisfactory to the designers and stylists and engineers it is still subject to economic evaluation against competing designs, produced of other materials and by other methods.

It is no secret that a significant number of zinc diecastings have already been lost for some 1968 as well as 1970 model vehicles. We are at present fighting to regain them for 1971 and future models. The zinc industry knows this or some producers, at least, know it.

We seriously doubt that the proposed quotas on imports of slab zinc will help regain zinc diecasting markets or build new ones. We feel quite sure that the imposition of quotas will bring about an increasing trend to design away from zinc diecastings.

Another consideration that appears to have been overlooked is that the imposition of quotas on imports of metal may very easily boomerang as far as zinc diecasting production for automobiles is concerned. Under the terms of the United States-Canadian Automotive Agreement the zinc die-cast parts of new automobiles can be produced in existing Canadian diecasting plants and be shipped into the United States free of both tariff and the proposed quota restrictions.

These are pertinent considerations which we, as diecasters, feel must be given consideration from the practical standpoint of protecting and increasing the consumption of zinc.

Returning now to the bill itself, it seems to us that, in the statement of purpose, the words "to assist in the national defense" are unrealistic in the absence of a stated military requirement for zinc. This is especially so since there is no provision in the bill to assure a sufficient supply of special high grade zinc which would be the important element in military requirements.

In section 201 (b) the failure to distinguish special high grade zinc metal from other unwrought zinc appears to us as discriminatory and unrealistic for the reasons already stated.

In section 201 (h) the determination of a quarterly quota by lumping general imports of zinc metal and zinc ores makes no distinction for variations or differences in requirements during the base period for metal versus ore and for special high grade metal in particular.

In section 203(a) the use of producers stocks of slab zinc versus domestic shipments by such producers as a triggering mechanism appears to us as discriminatory in that it takes no account of consumption or consumer inventories of slab zinc and zinc ingot.

In section 203 (b) the setting of the minimum quota at 130,000 tons appears unrealistic since this level proved insufficient in the past.

In section 203(c) there is double discrimination in that ores are unduly favored over metals and in the failure to assure sufficient imports of special high grade slab zinc in the light of the apparent shortage of productive capacity to meet diecasting needs.

In section 203(d) the assignment of specific quotas to countries supplying more than 10 percent of total imports in the base period is discriminatory and unrealistic. The ratio of producers stocks to producers shipments is critical and we believe subject to manipulation. In addition, it makes no provision for considering changes in rates of consumption as related to productive capacity for special high grade.

Section 405 provides that quotas established under the act shall be in effect for a term of 3 years unless terminated by the ratio of producers stocks to producers shipments. This makes no provision for assuring adequate supplies of special high grade zinc. In fact high inventories of prime western or other grades, could inhibit termination of the quota in the face of a shortage of special high grade which is sure to develop in the light of the shortage of current productive capacity for special high.

It is our considered opinion that, if this legislation were in force, in the light of today's reduced level of automobile production, quotas could be triggered by August or September. Should this happen it would appear to limit the availability of special high grade slab zinc to about 575,000 tons per year-this total represents the 1965 rate of domestic production of special high-482,000 tons-and, incidentally, not all of that went to diecasting-plus 93,000 tons of the 104,000 tons minimum of metal annually importable under the bill.

This is the only calculation that can be made from a diecasting standpoint-and, incidentally, it happens to be the calculation that was made by our largest customers and it spells out a supply situation that is less than consumption in 1965 or 1966 and below requirements for 1967 and the ensuing 3-year period.

It offers no hope of meeting diecastings needs for special high grade zine in 1970 which we estimate at over 800,000 tons.