The Waterbury Democrat., 1942-04-07

biAtAG WH6 GNA~ dence that tho company, on an or- iginal investment Of sb0,000 to prove magneslte ore deposits claimed from the public domain, stands to make a possible S2e0,000 per year royalties, plus Q possible $S60,000 per year operating foe, for the next 30 years. Hence the committees label of fragrant war proflteering."
 The story behind Basic Magne- sium, Inc, is another Of those roc mances of Dig business, riValing In some respects the Truman commit- tees current disclosures on the I. c, Farbenindustrie, or German dye trust attempts to control synthetic rubber development in the United States. As q matter of fact there is even c chapter in the Basic Magrle- stun, inc, story that leads back to I. c. r. control of the process which B. M. I, proposes to use.
 DAISY CHAIN
 Up to the beginning of the des fense emergency, the United States had only one magnesium plant In operation, c 0,000 tons per year unit run by the Dow Chemical Company of Midland, Mieho which extracted the metal from salt water, Addi- tlonal U. S. consumption Of this metal, lighter than aluminium and valuable aS on alloy to give alum- mum extra hardness, had been met by imports from Europe. German metallurgistS had really pioneered the development of the metal, but ln l036 q British operating company, British Elektron, Ltdn began eX. tensIVe reduction of the ore in Eng. land, licensed to operate under pat- ents controlled by l, c. Farbenln- duStrie, In the United States these patents are supposedly controlled but not developed by Magnesium Development Company, holding company jointly owned by the Aluminium Company of America and I, c, r,
 Other industrialists in America also saw the possibilities of mag nesIum development, Among them were the Hanna interests of Cleve- land, for years operators Of coal and iron properties in the Great Lakes area. The Hanna interests sent engineers to England to study British Elektron operations with an eye to developing the magnesite orc deposits in Nevada. The result was the formation of Basic Magnesium, Inc, 45 per cent owned by the Brit- sh who were to furnish the "know- how" of operation 5b per cent own- ed by Basic Refraetories, c Hanna holding company which in turn owned as c subsidiary, Basic Ores, which acquired the Nevada magne. site depoSits-if you can follow that corporate daisy chain,
 NICE BUSINESS
 Original plans Of Basic Magne- sium called for e plant with mod est 5000 tons year capacity, Then came the war, and the demands for magnesium Zoomed. After conBult- ing the Army and the Defense Plant Corporation, the company multi. piled these plans gradually by Il plus, with the result that contracts were let for the $63 million plant with q capacity Of 66,000 tons of ore Q year, which was announced in mid. August, l04i. Basic Magnesium didn't have to put Up cent, bee yond It's nominal costs for promo. ton and proving the ore, estimated at from S2S 000 to S50,000.
 Under the contract, the govern ment retains title to the plant, but Basic Magnesium was given c cost plus fixed fee contract for operation and construction. Basic Magnesium Is to receive . s300,0O0 fec plus cost for construction and engineering although, according to Senator Wallgrons subcommittee, the com pany had little or no construction experience and though more than 8i million is to be paid in fees for construction, engineering and archi- teetural services being performed by others. Further, the Defense Plant Corporation should cancel the con. tract, the government would have to pay Basic Magnesium Si million and double teh royalties OH the orc from Si to S2 a ton, although the Basic Refractorles Company is now leasing quarries near Las Vegas on payment Of 2b per cent per ton roy. aity.
 All this Is what tho full Truman committee will investigate when it
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