Montana labor news., 1944-03-09
TO CANCEL
TUNGSTEN
CONTRACTS

WASHINGTON, D. C.-March 6.-The
War Production Board has ordered
Metals Reserve company to cancel do
mestic eligible producer" tungsten con-
tracts as Of March 81. 1914 Senator
James f. Murray of Montana, chairman
of the Senate small business committee
and Senator James K. Scrugham of Ne
vada. today issued the following Joint
statement pointing out the probable.
effect on domestic war mineral produc-
tioD in general:
"The axe has finally fallen on our
tungsten industry. The War Production
Board. which alone is responsible for
ordering cutbacks, has instructed Metals
Reserve company to cancel all domestic
eligible producer contracts for the pro-
duction of tungsten We understand
that for some months the stocks of
tungsten have been somewhat above the
stockpile aims set by the War Production
Board. although WPB states stocks to be
less than years supply at wartime con-
sumption rates. This statement is Of
dubious accuracy as the stocks conider-
ably exceed a years supply The COM
bined domestic tungsten production plus
imports now exceed the current rate Of
consumption, which now is not greatly
above the present domestic rate of pro-
duction.
1--WE realize that cut-backs and can
cellations are becoming necessary as
supply and demand in each case reaches
safe balance and reserve stocks become
adequate But every attempt should be
made to lessen the shocks of cancella-
tions and to give preferential treatment
to our domestic mining industry. Only
by doing so can our mines be kept open
pay taxes and furnish employment in
the post war period
"There is no possible excuse for the
cancellation of Metals Reserve contracts
upon the minimum 80 days notice per
mitted under the agreements entered
into between the producers and Metals
Reserve company. The War Production
Board has been aware of the actual con-
dtions for months If it be said that
the producers knew the terms of the
contrac. they were signing in order to
obtain the $500 per unit bonus, it is
also true they had no alternative if they
were to remain in business.
Mercury contracts were cancelled
abruptly as of Feb. l, 1914, after giving
the minimum 80 days notification It
is true that tungsten cancellations have
not been handled as drastically as was
the case with mercury. Under one option
the tungsten producer has the choice Of
continuing to sell to Metals Reserve at
$50 per unit for 60 days and at S24 for
a further go days, or until June 80, 1914
This gives the producer a little time in
which to gut his property of high-grade
ores. Thus, tungsten prices will not
parachute as rapidly as mercury prices
did Immediately subsequent to cancella-
ton Certain other concessions involve
more equitable settlements to producers
than was indicated in the contracts
Some improvement is being shown in
"The net result will be, however, that
after July 1, 1914, the bottom will drop
out of the domestic tungsten market and
prices will doubtless fall to the foreign
level unless Metals Reserve continues to
support the $24 price thereafter.
elimination of the $50 per unit price
will close up most of our tungsten mines.
If the price falls much below s24, it is
likely that the handful of major pro-
ducers will have to fold up as well.
"The War Production Board has ex-
planned that a similar curtailment pro-
gram will be followed by the Foreign
Economic Administration in the procure
ment Of tungsten from abroad. Never
theless, imports are expected to continue
to greatly exceed domestic production.
If the domestic price is permitted to drop
below s24 per unit, we will soon again be
dependent upon foreign tungsten and a
comparatively new American industry,
easily capable of taking care Of peace
time requirements for many years to
come, will be ruined.
1T is very probable that the cancel
lation of mercury contracts, with the
consequent plummeting of prices. fol-
L.