# Central Eureka Mining Co. v. United States

> United States Court of Claims · February 20, 1956 · 138 F. Supp. 281

URL: https://www.frixlaw.com/law-library/cases/8591297

## Case

- **Full name:** CENTRAL EUREKA MINING COMPANY (A CORPORATION) v. THE UNITED STATES ORO FINO CONSOLIDATED MINES, INC. v. THE UNITED STATES ALASKA-PACIFIC CONSOLIDATED MINING COMPANY v. THE UNITED STATES IDAHO MARYLAND MINES CORPORATION v. THE UNITED STATES HOMESTAKE MINING COMPANY v. THE UNITED STATES (1) BALD MOUNTAIN MINING COMPANY, (3) ALABAMA-CALIFORNIA GOLD MINES COMPANY, (5) CONSOLIDATED CHOLLAR GOULD & SAVAGE MINING COMPANY, (7) ERMONT MINES, INC. v. United States
- **Court:** United States Court of Claims
- **Decided:** February 20, 1956
- **Citations:** 138 F. Supp. 281; 134 Ct. Cl. 1; 1956 U.S. Ct. Cl. LEXIS 71
- **Precedential status:** Published
- **Opinion:** Dissent by Jones
- **Judges:** Jones, Laramore, Littleton, Madden, Whitaker
- **Cited by:** 3 later opinions in the Frix Law Library

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## Opinion text

Jones, Chief Judge,
dissenting:
I concede that that part of order L-208 which directed certain mines to be closed down was invalid. The statute did not authorize such action. Paragraph (b) (1) of that order undertook to do that and was therefore issued without authority. However, paragraphs (b) (2) and (3) of the same order, which forbade the use of critical materials in nonessential industry, were valid exercises of the President’s power under the allocation statute and they would *54 have produced the closing down of the mines whether or not paragraph (b) (1) had been included. 1 I would hold that paragraph (b) (1) of order L-208 should therefore be construed as mere surplusage and not an exercise of the President’s powers of eminent domain. Since the valid portions of the order would have produced the closing of the mines, the added part of the order becomes immaterial.
During the war limitation orders were issued to curtail or prohibit the use of critical materials in the manufacture of nonessential products. L-208 (b) in its second and third paragraphs did just that. The majority concedes that such mines as did not have critical materials on hand are not entitled to recover for the reason that the gold mining process did consume critical materials and that regulations (other than L-208) depriving the operators of the effective right to acquire such materials were valid under the statute.
It follows that L-208, insofar as it prohibited the acquisition of critical materials, was valid. Insofar as this order or other priority or allocation orders, either working together or separately, forbade the use of critical materials on hand for nonessential purposes, they were also valid wartime regulations. St. Regis Paper Co. v. United States, 110 C. Cls. 271 ; cert. den., 335 U. S. 815 . I do not think it matters whether the acquisition or use of critical materials was prohibited by L-208 or by it in conjunction with other priority or allocation orders.
The majority concludes that those operators who had critical materials on hand are entitled to recover for the time that these materials would have allowed them to continue operation. In this respect the court seems to rely mostly on its conclusion that insofar as L-208 prohibited the use of critical materials on hand, it was arbitrary. The court bases this conclusion in turn primarily on the fact that the Government took no affirmative steps to allocate the materials “away from” the gold mine operators into more essential uses.
We do not think this was necessary under the circumstances. If indeed these materials were critical, then it is natural to expect that, under the operation of supply and *55 demand, such materials would find their way into essential uses. In fact it would have been wholly impracticable in a great national emergency for any agency of government to allocate and assign every bolt, nut, and piece of critical materials. Thus, for example, even those who were engaged in essential wartime industry were often merely given priority orders which were little more than hunting licenses and these industries had the task of locating and securing the critical materials. The fact that our nation, unprepared though it was, was able to produce wartime materials on a vast scale is a magnificent tribute to our free economy.
It was reasonable to suppose that the gold mine operators would attempt to reduce their capital investment in materials which they had no authority to use. This did in fact happen in the case of the Central Eureka Mining Company which leased some of its equipment to persons engaged in tungsten mining. Thus, while it may be true that there were other motives and purposes in issuing L-208 than the allocation of critical materials, I do not think that in so far as L-208 was intended to allocate critical materials it was arbitrary. There can be no question that some strategic materials could be expected to be saved by the dual prohibition of forbidding the gold mines to acquire new strategic materials and preventing the use of the materials and equipment they had on hand.
It cannot be said that L-208 and concurrent orders in their prohibition of the use of strategic materials on hand had no reasonable relation to the execution of the lawful purpose of allocating strategic materials. Jones v. City of Portland, 245 U. S. 217, 224 . That this may have been done more effectively by other means does not matter.
The President had neither the constitutional power nor the statutory authority to close the mines directly. It is probable that as a legal matter the enforcement of that part of the order which directed the closing of the mines could have been enjoined. However, in wartime that is not a very practical remedy because it puts any individual or company in the position of hindering the war effort. In any event the Supreme Court has ruled that the defendant cannot be held for damages flowing from an unauthorized act of its *56 oficiáis. Federal Crop Insurance Corp. v. Merrill, 332 U. S. 380, 384 . Besides, if that portion had been enjoined, the valid portions of the order, as well as concurrent orders freezing the uses of critical materials, would have remained in effect. These would have compelled the closing of the mines, and the injunction would have been useless.
There is no doubt that plaintiffs were damaged by the necessity of closing the mines. War produces many hardships. It entails many sacrifices. When ceilings are placed on the prices of the products of farm and factory, when wages are frozen and when young men are taken and sent to face hardships and even death on distant battlefields at a small rate of pay in the fixing of which they have had no part, when prices generally are fixed, when all the interests of the nation are fused in the common purpose — losses are inevitable. No nation could justify such action in normal times. It would be next to impossible to measure and pay all the losses involved in an all-out war.
If the Congress should see fit to acknowledge liability to these owners on the ground that their .losses were unusual, the court should willingly undertake to determine the amount, but unless this is done I do not think the court should select these losses to be compensated.
Laramore, Judge,
dissenting:
The majority opinion points out that L-208 was not an allocation order, as it purported to be, but rather was clearly an order closing gold mines deemed nonessential to the war effort; i. e., those mines whose gold production in dollar value exceeded 30 percent of their total production.
There was no authority vested in the President to directly close a business. The President could regulate the gold mines, allocate materials away from them, or requisition their materials, or even the business itself, if he determined their need essential for defense, and that such need was immediate and would not admit delay or resort to any other source of supply, and all other means of obtaining the use of such property for defense had been exhausted. See Act of October 16, 1941, 55 Stat. 742 . Instead of determining *57 that these gold mines were needed for defense, the President determined that they were nonessential and that the national defense would be better served by their closing.
The majority considers the closing under such circumstances to be a taking of plaintiffs’ right to do business and compensable under the Fifth Amendment. I believe that the President lacked the constitutional power and statutory authority to close these mines and, therefore, the unauthorized closing could and should have been enjoined. Youngstown Sheet & Tube Co. v. Sawyer, 343 U. S. 579 .
Inasmuch as the President lacked authority to close these mines, and such closing has not been ratified by Congress, the unauthorized closing is not compensable under the Fifth Amendment. Hooe v. United States, 218 U. S. 322 ; United States v. North American Transportation & Trading Company, 253 U. S. 330 ; United States v. Goltra, 312 U. S. 203 .
FINDINGS OF FACT
The court, having considered the evidence, the briefs and argument of counsel, and the report of Commissioner William E. Day, makes the following findings of fact:
1. On January 7, 1941, the President of the United States established the Office of Production Management, hereinafter referred to as OPM, and delegated to it the powers and duties described in Executive Order 8629 (6 Fed. Keg. 191) and Executive Order 8942. 1 On August 28, 1941, the President by Executive Order 8875 established the Supply Priorities and Allocations Board, hereinafter referred to as SPAB, and directed it to determine general policies for OPM.
2. By Executive Orders issued January 16 and January 24, 1942, 2 the President established the War Production *58 Board, hereinafter referred to as WPB, and vested in the Chairman of that Board, acting with the advice and assistance of the members of the Board, the functions and powers formerly vested in OPM and SPAB. The Chairman of WPB was authorized by the Executive Order of January 16, 1942, to exercise the powers, authority and discretion conferred upon him through such officials or agencies as he might determine.
3. The function of WPB and its predecessor agencies was to exercise general direction over the war procurement and production program, to regulate the production and supply of materials and equipment necessary for the national defense, and after the declaration of war for the prosecution thereof, and to determine when and in what manner priorities should be accorded to deliveries of such material and equipment. These agencies fulfilled this function by the issuance of various orders, the most common of which were designated as “P” orders (priorities), “M” orders (materials), and “L” orders (limitation).
The “P” orders were generally addressed to buyers of materials and authorized them to attach to their purchase orders a letter or symbol entitling them to preference in delivery. Once having been granted, this preference could usually be applied on a repetitive basis.
The “M” orders were usually directed to the manufacturers or distributors of materials and were aimed at controlling either the use or the distribution of particular materials. These orders frequently prohibited producers from selling to any buyer unless the buyer had some preference rating.
The “L” orders were usually issued to prohibit or curtail the manufacture of end products containing critical materials, continued production of which would have necessarily consumed such critical materials. Sometimes an additional purpose of such “L” orders was to accomplish the conversion of scarce manufacturing facilities to war production.
“L” orders were issued prohibiting or limiting the production of end products such as office machinery, furniture, bicycles, stoves, refrigerators, laundry equipment, automobiles, and other products. In most instances a prohibition *59 against the production of a product resulted in the facilities being transferred to war production. Thus, the automobile industry’s facilities were largely converted to war purposes although some of the facilities may have become inoperative because of a lack of adaptability to other purposes or to war production.
Issuances of “L” orders sometimes released manpower employed in the production of the prohibited end products. Working with the particular industry branch involved in the “L” order, the Labor Production Branch 3 of WPB, assisted in making arrangements whereby the application of the “L” order to the industry would be most effective in terms of the utilization of the services of the manpower so released.
Where an area was threatened with serious economic dislocation by reason of the threatened closing down of a primary industry resulting from an “L” order because substitute materials were not available to produce that industry’s product, either the area or the industry could be certified as “distressed” by WPB. Such a certification entitled the firms in the area to special treatment in the awarding of war orders, i. e., the orders did not have to go to the lowest bidders, and financial assistance could be given to enable the plants to convert. The entire washing machine industry was so certified.
The preference ratings assigned under the “P” orders originally ranged from A-l to A-10, with the highest rating, A-l, being further subdivided. There was no control over the number of buyers who might be given a particular rating, and a buyer having one of the lower preference ratings might and often did find it impossible to purchase any material because the holders of the higher ratings had exhausted the available supply.
4. In the decisions by OPM and WPB to issue a “P”, “M”, or “L” order, a number of considerations might be involved *60 such as the conserving of essential materials, supplies and equipment for use in essential war industries, the increasing of production of strategic raw materials or essential end products, and the maximum utilization of available manpower. In the earlier months of the war some areas of the country were still suffering from large scale unemployment.
5. On July 29,1941, OPM issued Preference Eating Order P-28 in order to facilitate the acquisition of materials by producers of machinery and equipment used in the mining, beneficiation and preparation of coal and metallic ores. Said order authorized such producers to use a preference rating of A-3 for the acquisition of such materials.
6. On September 9, 1941, OPM issued Preference Eating Order P-22, known as the General Eepair Order. It authorized a broad variety of industries, including mines and quarries generally, to use an A-10 rating for the acquisition of material needed for the repair of their property or equipment.
7. On September 17,1941, OPM issued Preference Eating Order P-56 and amended it on September 22, 1941. Said order, as amended, authorized recognized mining enterprises to use a preference rating of A-8 for the acquisition of materials needed for operating supplies and for the maintenance of the property and equipment of such mines. Under the terms of said order OPM was to issue so-called mine serial numbers to all mines certified by an appropriate agency of a State, Territory or possession as constituting a recognized mining enterprise.
Placer gold mines but not lode gold mines were expressly excluded from the benefits of Order P-56. Placer mining is the derivation of gold from streamborne materials in contrast with lode mining which is the underground working of auriferous quartz veins in hard rock.
The reason for the distinction between lode and placer mines in the assignment of preference ratings under Order P-56 was set forth in a report entitled “Status of Gold Mining” submitted to SPAB on November 18, 1941, by its Executive Director, Donald Nelson. The report read in part as follows:
*61 * * * Most lode mines are underground, and consequently subject to tlie hazards of rapid depreciation if they are shut down. Flooding by water is the chief hazard. Though not all lode-mining is deep enough to suffer seriously if a shutdown occurs, continuity of operation is clearly desirable to prevent depreciation of installed equipment and structures. On the other hand, placer operations can be discontinued (and often are, seasonally) without injury to equipment. * * *
Another reason for this distinction was stated in November 1941 by Dr. Wilbur Nelson, who was then Priorities Specialist and Administrator of Order P-56 and who later became the Chief of the Mining Branch of WPB, to be “that we felt that we must start restricting mining activities where they were not essential to the production of materials needed in a defense effort.” This referred to the fact that placer mines produced only gold, while many lode mines produced other metals.
8. In the memorandum submitted to SPAB on November 18, 1941, Mr. Donald Nelson had reviewed the problems relating to furnishing materials both to gold mines in the United States and to gold mines in foreign countries, and had said, in part:
1. A general announcement of policy toward gold-mining is needed. Otherwise, specific administrative actions will be questioned by the mines as unfairly discriminatory. This is particularly necessary if the purchase of new machinery for gold production is to be virtually prohibited after November 30. A necessary preliminary to such a declaration would be a request to the Treasury for an immediate formal opinion on the significance of new gold production to monetary policy. It is to be emphasized that from a consumption of scarce materials standpoint, this whole issue is a minor one. Only about $7,000,000 of equipment, not including a lesser amount for repairs and maintenance, is involved annually at a maximum. Such importance as the issue possesses is largely political. It is political from two opposing standpoints — that of popular reaction to the continuation of an industry widely regarded as unnecessary (to the point of jocularity), and contrariwise, that of the regional interests delineated in the report.
2. The continuation of the right of lode gold mines to use the A-8 rating under Order P-56 could be made entirely discretionary with the Director of Priorities. *62 The guiding principle might be established by SPAB of requiring their purchases to be held to the bare minimum necessary to prevent disastrous shut-downs. SPAB might also wish to establish a separate test of eligibility in terms of the amount of other more useful metals that are produced jointly with gold. For example, if the selling value of the essential metals is 25 percent and that of gold produced 75 percent, the mine might be permitted to buy machinery and supplies on the same basis as other essential metal producers. Or the minimum ratio might be set at 40 percent in the value of other metals, and 60 percent gold. The intent would be to avoid any discouragement to production of the essential metals.
3. An alternative, and more drastic, policy would be to eliminate all domestic gold mines, whether lode or placer, from Order P-56 and also from the general repair Order, P-22. Gold mine operators would thus be forced to buy repairs and supplies without A-ratings, but could apply for special help on Form PD-1. It is quite possible that only very gradual declines in output and employment would result, because of managerial ingenuity. Here again, exceptions could be made for mines producing other metals.
4. In lieu of any blanket privileges to foreign mine operators, all foreign mine needs could be reviewed continuously with the Economic Defense Board, so that considerations of inter-American and British American policy could be consistently applied to decisions authorizing or forbidding shipments of gold-mining machinery and repair parts. No serial numbers authorizing several purchases would be issued, but applications for individual shipments would be entertained. Here again, the specific quantities of burdened material (which are not large) are not the issue, but the political considerations involved and the question of treating nonessential industries consistently are paramount. In the special case of Canada, the Joint Economic Committees could secure all relevant statistical data.
5. Some special basis of treatment might be worked out for Alaska, where gold mining assumes the proportions of a majority industry. To cut off suddenly all shipments of new equipment needed for replacement, and to make it unduly difficult to secure supplies, might have several effects upon employment in Alaska, and upon the revenues of the Territory. The Labor Division might be asked for a formal opinion on the probable impact upon employment in the Territory of *63 the restrictions suggested in this report. The Territorial Government could also be asked for a formal report on the importance of gold mining, with all relevant statistical data.
On November 24,1941, a meeting concerned with priorities and export licenses for gold-mining machinery was called by A. A. Eerie, Jr., Assistant Secretary of State. It was attended by representatives of the Treasury Department, the Federal Reserve Board and OPM, as well as the State Department. The consensus of opinion at such meeting was reported that:
* * * preference ratings for gold mining equipment should be granted only after careful scrutiny with a view to maintaining, at the very most, existing rates of output and to refusing equipment for any expansion of output; subject to exceptions in cases where extraordinary hardship might result — as in the case of isolated communities having no alternative forms of employment — preference ratings for exports of gold mining equipment should be made to depend on a showing that the maintenance of the present level of gold production is necessary (a) to supply dollars for an otherwise deficit dollar position in the balance of payments of the country (or in the case of South Africa, for the dollar position of the sterling area), or (b) for special political reasons; whenever the current gold mining is maintained mainly to prevent a dollar deficit and especially where the labor could be used for more direct contribution to defense production, this Government should endeavor to find other means of meeting this deficit such as lend-lease activities, purchase of gold “in the ground” for postwar delivery, and the like. To give effect to the foregoing conclusions, no general priority ratings for gold mining equipment, including repair and replacement parts, should be granted but individual consideration should be given to each application on its merits unless adequate periodic compliance investigations can be made (particularly in Canada) as is done in the United States.
On December 2,1941, SPAB, having before it the report of the November 24 meeting quoted above, directed Donald Nelson to obtain the official opinions of the State Department, Treasury Department, Federal Reserve Board and the Board of Economic Warfare on “supplying gold mining *64 equipment abroad and on other possibilities of providing dollars to offset probable dollar deficit positions.”
9. Donald Nelson complied with the directions of SPAB, and secured the official comments of these departments and agencies. The Secretary of the Treasury stated in part as follows:
* * * Domestic gold production in wartime serves no military purpose, but does consume labor and materials that have usefulness in military production, particularly in the mining of scarce metals. We do not believe, therefore, that domestic gold mines should receive any preference rating for machinery unless the gold is produced with a substantial amount of much needed byproduct metals or ores, or unless it is produced in a mine so peculiarly situated that serious and sustained unemployment of men not eligible for defense jobs would result from its shutdown.
The Secretary of State confined his reply to the subject of supplying gold-mining equipment abroad, and said in part:
It is the Department’s opinion that preference ratings for gold mining equipment should be granted only after careful scrutiny with a view to maintaining, at the very most, existing rates of output, and to refusing equipment for any expansion of output. * * *
The Chairman of the Board of Governors of the Federal Reserve System stated in part that:
. Priority measures tending to reduce new gold production under present circumstances are, in my judgment, highly desirable. The United States stock of gold is already redundant. Its dollar value is more than five times as great as in the 1920’s. From the standpoint of credit control in this country further additions to gold stock, are not only unnecessary; they are harmful. By swelling excess bank reserves, they add to inflationary dangers and make the maintenance of a stable and productive economy more difficult. From the standpoint of .war output of the allied countries, the materials, machinery, and labor devoted to gold production are largely wasted.
*****
Since new gold output is largely unnecessary and diverts materials, machinery, and labor from production of war supplies, I strongly favor curtailing it so far as is practicable through the priorities system. I would *65 suggest that no machinery be allowed to foreign mines for the expansion of gold output; and that machinery and supplies for the maintenance and repair of gold mines should be restricted to the minimum consonant with the principles adopted by the Supply Priorities and Allocation Board for other nondefense industries.
Milo Perkins, Executive Director of the Board of Economic Warfare, after discussing the question of supplying mining equipment to foreign gold mines, proceeded to outline a policy with an ultimate objective of eliminating the domestic gold-mining industry in the postwar era. In this connection he stated:
The system of priorities on gold mining equipment was devised as part of the general effort to economize on scarce facilities and thereby to maximize the joint war effort of the nations fighting for the democratic cause. But in dealing solely with the question of gold mining equipment there is a danger of losing an opportunity both to solve the longer-term aspects of the gold problem and to maximize the joint war effort. Such an opportunity exists now. The United States can and should use the power that it derives from being practically the sole buyer of the yellow metal in order to initiate a program of a gradual reduction in gold production. Such a program would contribute to a maximization of the joint war effort and, at the same time, would facilitate a solution of the postwar gold problem.
* * * # #
It is essential therefore, that a reduction in gold mining should be envisaged for the postwar period. It is, however, obviously impossible to effect a cessation of gold production overnight because of the enormous dislocation it would involve in the national economies of the more important gold producing Countries. The purchase of gold in the ground leaves the problem unsolved, and merely adds to the difficulties of the immediate postwar period. A program of gradual reduction and final cessation of all new gold production spread over a period of fiften to twenty years is the only satisfactory solution to the general gold problem. This is the. moment to institute such a program. Further, the United States possesses the necessary powers to initiate such a program. Being practically the only buyer of the yellow metal, the United States is in a position to demand that its future purchases will be on an increasingly restricted scale. * * *
*66 On December 23, 1941, Donald Nelson sent his summary of the foregoing letters to SPAB in the following terms:
As directed by the Board at its December 2d meeting I have obtained the official opinions of the State Department, Treasury Department, Federal Reserve Board and Board of Economic Warfare on supplying gold-mining equipment abroad and on other possibilities of providing dollars to offset probable dollar deficit positions.
The following is a summary of these opinions
1. In a war economy labor, materials, and machinery applied to gold production are largely wasted. Moreover, dollars made available through Lend-Lease, R. F. C. and stabilization loans, etc., have made new gold unnecessary as a provider of dollar exchange. Therefore :
(a) Nothing should be allowed for expansion, although minimum amounts for maintenance and repair should to some extent be provided.
(b) Only high-grade ores or those yielding high percentages of other minerals useful in the war effort should be mined.
(c) Labor, materials and machinery should be converted to more vital production except where extreme political or economic hardship would result.
2. In-the-ground purchase of gold is neither necessary nor desirable. It is an experiment which raises serious complications and not only fails to solve the present problem but also presents a new one for the postwar period.
3. Agreements should be entered into with gold producing countries, to the end that they do not divert labor, materials and machinery from more essentia] uses to gold production.
On the same day SPAB adopted the spirit of these recommendations. It stated:
It was the judgment of the Board that in view of the military program only limited priorities and export licenses should be granted to the gold mining industry,
and it was agreed
that in granting priorities and export licenses for gold mining machinery, materials should not be allowed fox expansion of production although minimum amounts for maintenance and repair may be provided.
*67 10. On December 18, 1941, OPM issued a new General Eepair Order, Preference Eating Order P-100, to replace Order P-22, which, was revoked on the same day. The stated purpose of Order P-100 was to effectuate the policy of SPAB in maintaining governmental, charitable and industrial property located in the United States, its territories and possessions, upon an adequate operating basis, without expansion or improvement of facilities except where duly authorized or approved. Industries coming within the terms of Order P-100 were entitled to an A-10 Preference Eating (the lowest rating used) for their maintenance, repair and operating supplies.
P-100 represented a continuation of SPAB’s policy of granting some preference rating for maintenance, repair and operating supplies to industries in general without regard to essentiality in the war program, and this policy prevailed throughout the war. This policy was designed to avoid unnecessary dislocations in the civilian economy. The percentages of critical materials such as steel, aluminum and copper used in all industries for maintenance, repair and operating supplies ranged from one-half of one percent to three percent of the total amounts available for the entire economy.
11. On December 31,1941, OPM issued Preference Eating Order P-56-a to supersede P-23, which had expired on that date. Order P-56-a continued to authorize the manufacturers of mining machinery to use a preference rating of A-3 to acquire material entering into the production of machinery and equipment ordinarily used in the mining industry, including the gold-mining industry.
12. By a letter dated February 18, 1942, John P. Gregg, Assistant Chief of the Bureau of Priorities, WPB, proposed to C. H. Matthiessen, Jr., Chief of that Bureau, that gold and silver mines be closed forthwith in order to conserve materials. The letter stated in pertinent part:
.4. The Committee is of the view that the restrictions with respect to materials to be used in the mining of gold and silver are not sufficiently restrictive and that a limitation order should.be drafted forthwith to stop production of gold and silver in the United States, appropriate consideration being given to the continuance *68 of such production in Canada, Mexico, South .Africa, and other areas now permitted to obtain materials, and equipment from this country under Lend-Lease or direct purchase.
13. Said proposal of February 18, 1942, to close the gold and silver mines as a means of conserving materials was rejected. Instead, on March 2, 1942, WPB amended Preference Eating Order P-56 so as to deprive gold and silver mines of all priority ratings formerly available to them under that order. This was accomplished by revoking the so-called mine serial numbers of all mines the production of which in dollar value consisted of more than 30 percent of gold and/or silver.
14. Although the amended Order P-56 required the revocation of the mine serial numbers held by gold mines coming within the foregoing 30 percent exclusion clause, in actual practice WPB restored such numbers to mines whose production included significant quantities of materials important to national defense. However, over 200 gold mines, including those of the plaintiffs herein, never again received serial numbers under Order P-56.
15. The amended Order P-56 was the subject of vigorous objections in the mining districts, and public meetings were held in Keno, Nevada, and Denver, Colorado, to protest the amendment. These meetings were attended by the Governors of five states, several United States Senators and Eepresentatives, mine operators, Wilbur Nelson as Chief of the Mining Branch of WPB, and other interested parties.
16. In addition to the aforementioned meetings the 30 percent exclusion clause was the subject of extensive hearings before a special Senate Committee (U. S. Senate, 74 Cong., 2d Sess., Subcommittee of the Special Committee on the Investigation of Silver, Hearings, May 5, 6, 8, and 28, 1942).
17. WPB on May 15, 1942, amended Order P-56 so as to eliminate the 30 percent exclusion clause. However, the amendment effected no practical change, since no person could use the ratings assigned by Order P-56 unless a serial number was granted by WPB. After March 2, 1942, serial numbers were never restored to gold and silver mines producing no substantial quantities of critical materials.
*69 ■ The gold mines excluded by the above amendments to Order P-56 were reduced to the same priority position as that of the least essential industries in the United States, i. e., they were entitled only to an A-10 preference rating for the acquisition of maintenance, repair and operating supplies under Order P-100. They were excluded from obtaining any critical materials which might have been needed by any of the nonferrous metal mines or by any other industry deemed by WPB to be more essential. While it was possible for gold mines excluded from any benefits under P-56 to apply for equipment under the general repair order P-100, the demand for desired equipment was so far above available supply that the possibility of the gold mines obtaining any was remote. Thus, by March 2, 1942, a series of progressively more stringent priority regulations had succeeded in virtually eliminating the potential acquisition by the gold mines of critical materials, supplies and equipment.
18. By July of 1942, the Labor Division of the War Production Board, and officials of the War Department and the War Manpower Commission, were all becoming concerned with the fact that the production of nonferrous metals in the United States, particularly copper, would not be adequate to meet current and anticipated demands. Investigation revealed that this condition was due not only to the increased wartime demands, but to an alarming shortage of miners in the nonferrous metal mines. The agencies concerned were agreed that the success of the country’s armament program was basically dependent on increased production of basic raw materials such as copper and other nonferrojis metals.
The reasons for the poor production of nonferrous metals were found to be (1) the out-migration of workers in the nonferrous mines to other war industries offering higher wages and better working conditions, (2) drafting of the workers for the armed services by Selective Service, (3) excessive labor turnover within the industry, (4) low morale of the workers, (5) the short workweek in the mines, and (6) the lack of an organized and effective program of recruitment of workers for this industry.
Labor scouts employed by the aircraft and shipbuilding plants were working through the mountain states offering *70 high wages and were inducing men to leave the mines. Armed services construction projects in the vicinity of the mines offered higher wages and were recruiting miners for work on such projects.
19. An informal committee organized by officials of the War Department to study the copper shortage situation submitted a report on July 8,1942, recommending a program for dealing with the problem. For the War Manpower Commission it recommended a program for the recruitment of mine labor, involving among other things the expansion of the offices and personnel of the United States Employment Service in the mining areas, and including “a program for the orderly transfer of workers in gold mines and other nonessential industries to the nonferrous mines,” as well as assistance in securing Selective Service deferments for mining occupations. For the WPB, the report recommended a Labor-Management Production Drive Committee to secure increased production through improved morale and greater efficiency; the report then recommended that:
2. Production of gold, with the exception of required amounts of essential silicious gold ores, should be curtailed by an order of the War Production Board to free labor which is urgently needed in the nonferrous mines which are essential to the war effort. * * *
For the War Labor Board the recommendation was that in the cases then pending before it, involving about half of the copper-mining industry, it give careful consideration to the wage differential problem. The recommendations for the Army and Navy were the establishment of morale building programs for the miners and the exertion of influence on their contractors to prevent further recruitment from the nonferrous mines.
20. The Labor Production Division 4 of WPB was also studying ways to relieve the shortage of underground workers in the nonferrous metal mining industry. On July 4, 1942, the Acting Chief of the Priorities Branch of the Labor Production Division sent a memorandum to the Director of Operations of the War Manpower Commission who was also *71 in charge of the Labor Supply 5 functions of WMC at that time. The memorandum pointed out the acute labor shortage in the nonferrous metal mining industry and observed that the 15 largest producers of gold in seven Western States had some 6,700 employees; that the gold mines of these producers were sometimes located in the vicinity of nonferrous metal mines and that in some cases one company would own both a gold mine and a nonferrous metal mine in an area. The statistics upon which the above figures were based were as of 1941, and were later found not to represent the situation in the summer of 1942, because the gold mines, as well as the nonferrous metal mines, had been losing workers to the war industries and the draft. The 6,700 figure employed in the memorandum represented employees of all kinds, including clerical employees, and no figure was given of the number of hardrock miners which were the type of employee needed in the nonferrous metal mines. In speaking of the “15 largest producers of gold in seven Western States”, the memorandum did not point out that several of such gold producers also produced nonferrous metals in substantial quantities and therefore would not be classified as gold mines for the purpose of any anticipated action.
The above memorandum described the large turnover in employment in the copper mines and the steady decline in over-all employment; it noted that most of the men leaving the copper mines were going into war plants or were being drafted into the armed services, and that the companies were requesting permission to hire Japanese and Mexican labor in their operations. The memorandum concluded as follows:
Steps should be taken to remedy the critical labor situation in nonferrous metal mining, including arrangements for the transfer of miners from gold and silver mining to copper, lead, zinc, tungsten, chrome, and molybdenum mining. This can be done through curtailment of gold and silver production, but it would be necessary to make sure that the workers released went into nonferrous metal mining and did not go into war plants in the vicinity or on the West Coast. It has been customary for metal miners in the mountain states to *72 move considerable distances with the opening and closing of mines and ordinary turnover.
21. On July 9,1942, the General Counsel of the War Manpower Commission sent to a member of his staff a memorandum concerning the possibility of transferring gold miners to work in the nonferrous metal mines. The memorandum stated:
At a meeting of the War Manpower Commission yesterday, the following problem was referred to this office.
General McSherry [Director of Operations of WMC] wishes to secure the release of men employed in the gold mining industry for transfer to the copper mining industry. Concededly the War Manpower Commission cannot accomplish this result directly. May the result be accomplished (1) by the War Production Board refusing to the gold mine operators critical materials used in their operations thus compelling the closing of the mines(2) may the Chairman of the War Manpower Commission direct the War Production Board to take that action %
The specific situation suggested is simply illustrative of the general problem in this field.
22. The proposal for closing the gold mines in order to divert their miners to nonferrous metal mines was gaining momentum in August 1942, and accordingly, Wilbur Nelson, Chief of the Mining Branch, WPB, who was not in sympathy with the method of the proposed plan, expressed opposition to it on August 14,1942, in a memorandum to H. O. King, Chief of the Copper Branch, WPB, reading in pertinent part as follows:
The Mining Branch views with serious alarm the dissipating of the only appreciable reserve of highly competent mining labor through the hasty closing of the gold mines in the United States.
The gold and silver miners constitute the last reservoir of the skilled mining labor. We must, therefore, be certain that that labor is directed toward the most critical points before permitting it to be disbursed. [Sic.]
The present critical situation developed when copper, lead, zinc, mercury and other miners left their jobs and went to the West Coast on shipbuilding and on aircraft jobs, and into the mountain areas in new war industries work.
*73 If we close down the gold mines while these same opportunities are available for work at substantially high rates of pay in other war industries, the miners will not move to a copper, lead, or zinc mine but will do just as their predecessors have done, move on to other more fruitful jobs on the coast.
Logic dictates this, for when a copper miner at Butte is willing to leave his home and go to the coast, I am sure that a gold miner, living in the excellent living conditions at Lead, is not going to leave his family and stop at Butte if he could go to the west coast.
* # * % #
23. Late in August 1942, Guy N. Bjorge, General Manager of plaintiff Homestake Mining Company, the largest gold-mining company in the United States, learned that consideration was being given by the Government to a proposal to close domestic gold mines in order to divert their miners to the nonferrous metal mines. He therefore went to Washington and conferred with several officials of WPB, including Donald Nelson, Chairman, and Wilbur Nelson, Chief of the Mining Branch, as well as Brigadier General McSherry, Director of Operations of the War Manpower Commission, and Lieutenant General Somervell, commanding the Services of Supply, War Department. In the course of these conferences Mr. Bjorge furnished figures as to the small number of men who might be obtained for work in the copper mines by such order. He pointed out that many men had already left the Homestake Mine in 1942 for the same reasons that men had left the copper mines, mainly to accept employment at West Coast aircraft factories and shipyards. Mr. Bjorge also pointed out that the miners remaining at Plomestake were an older, more stable class of men, a large percentage of whom were home owners, and asserted his belief that it was improbable that they would leave their homes for the poor housing facilities and undesirable working conditions at the nonferrous metal mines.
24. On August 26,1942, United States Senator Pat McCar-ran of Nevada wrote a letter to Donald Nelson, Chairman of WPB, setting forth various reasons why he believed the proposed closing of the gold mines would not accomplish its purpose of obtaining any considerable number of miners for *74 the nonferrous metal mines. Senator McCarran wrote, inter alia:
*****
In the first place, the transfer of necessary labor from closed gold and silver mines to mines producing copper, lead, zinc, etc., would be negligible, due to the fact that very few operations exist today where only gold and silver are mined, and in these districts (mainly, the Homestake Mining activity in South Dakota and the Mother Lode Mining district in California), the number of men who could be so transferred is small. Many of the usual workers have joined the armed forces; many are familiar only with the routines of this type of mining and cannot be successfully transplanted. Thus little good would result and great hardships would be inflicted upon affected families and communities.
Secondly, there is no rule or procedure by which such workers could be legally forced to transfer to other mines. The labor that would be denied employment by reason of the shutting down of the mines producing gold and silver would most likely go to the places where they would receive higher wages than are paid in mines.
* * * ❖ #
On September 1, 1942, Donald Nelson replied to Senator McCarran in pertinent part as follows:
*****
A serious study has been and is being made of sources from which mine labor could be made available to the nonferrous metal mines. Naturally, our thoughts have included gold mines, but we have not at this time reached any conclusion thereon.
We quite agree that no legal power exists today by which workers may be forced to transfer to other mines. This accentuates the mine labor problem which faces us today.
Because of your experience in mining matters, and the factual evidence you secured in your recent hearings in the West, I am asking our people responsible for mine production to carefully consider your suggestions.
*****
25. The minutes of the War Production Board for the meeting held September 1,1942, provide in part as follows:
1. Labor Supply for Copper, Lead, and Zinc Industries The Chairman stated that since the labor supply in *75 the copper industry had reached a critical stage and already had resulted in a decline in the production of copper, he had asked the Labor Production Division and the Copper Branch to report to the Board on the manpower problem in the nonferrous metals industries (Doc. 135).
Mr. King reported that 6,000 miners have.been lost by the copper, lead, and zinc mines to other industries during the past several months and that the shortage of labor will become increasingly acute next year when new facilities will require 2,000 additional miners. Preliminary reports indicate a shortage of 2,100 workers in smelters and refineries. Mr. King pointed out that the loss of 5 or 6 thousand workers at the copper mines might so influence the subsequent fabricating processes that 100 thousand workers in war plants at the end product state would be affected. Although monthly production of copper increased steadily from early 1941 to a peak of 95,000 tons in May and June 1942, output in July dropped 5,000 tons to 90,000. The copper outlook is even more critical than shown by the drop in production, since at many mines labor is being transferred from developmental and stripping operations, necessary to provide for future production, to current ore extraction. The position of the smelters and refineries is exemplified by a smelter at Tacoma where output of 2,000 tons of copper per month is being lost for lack of only 300 unskilled common laborers. Mr. King emphasized that production at the mines, smelters and refineries will continue to fall unless the exodus of labor is checked and the supply of workers augmented. Output of lead and zinc likewise declined in July, and the labor-production situation in these metals is similar to that in the copper industry.
Mr. Lund pointed out that there is general agreement that the higher wages paid to workers in competing occupations in other industries are the prime factor causing the out-migration of labor from the mines and mills. Average weekly earnings in April of 37.28 dollars for mine workers and 35.18 dollars for smelting and refining workers compared with an average of 53.30 dollars in shipbuilding and 45.94 dollars in aircraft, the principal competing industries. Corollary factors in the out-migration of workers have been rumors of ceilings on wages and proposals to confine workers to their present jobs, the hazards of mining, and inadequate housing and transportation facilities.
*76 Mr. Lund pointed out that the decision of the War Labor Board, expected within a month on BO or 40 cases involving higher wages for copper miners, will have an extremely important bearing on the out-migration problem.
Mr. King reported that following a resolution of the War Production Board (See WPB Minutes, March 3, 1942, Item 7), labor-management committees were established in the metal mining areas and the importance of having mine workers stay at their jobs was publicized. On June 13, 1942 the Chairman of the War Production Board formally launched the War Production Drive in the nonferrous metals industries by a radio address to the miners at Butte, Montana.
As further steps in halting out-migration, the InterDepartmental Committee on Nonferrous Metals was established on August 11 and various letters and literature have been prepared for distribution to mine operators and labor unions; an order has been prepared to prohibit the use of materials in nonessential gold mines, which may free about 8,000 workers; plans to prevent employment of miners on Army and Navy construction projects are being considered; and training programs are being introduced into mining properties. To increase the efficiency of present working forces, mine equipment is being accorded high priority ratings, and labor is being trained and upgraded by improving working and living conditions, and by lowering age and other restrictions on hiring. Mr. Lund observed that in many cases labor standards have shown no change from those existing in normal times when a surplus of labor is available. He suggested that the pooled employment interviews which the War Manpower Commission is now conducting in some parts of the country should be pursued with increasing vigor.
Mr. Lubin inquired if the order to prohibit the use of materials in nonessential gold mines had actually been issued and, if not, what steps are being taken toward its issuance. Mr. King, replied that a first problem is to define a nonessential gold mine since gold is frequently found in association with other metals and it is necessary to avoid denying materials to mines that produce important quantities of critical metals jointly with gold. It is hoped that an appropriate definition can be developed very shortly and an order issued promptly thereafter.
*77 The Chairman remarked that since other uses have been cut to a minimum, the major use of copper is in munitions, especially small arms ammunition, and any reduction in the copper supply will be reflected in a reduced output of ammunition. He expressed the belief that the War Production Board must take an active and leading role in assuring an adequate supply of copper and Mr. Lubin added the suggestion that the concern of the War Production Board in this problem is sufficiently great to establish its own employment offices, if this is necessary to obtain additional copper miners.
After further discussion it was agreed that:
Inadequate production of copper, lead, and zinc will result inevitably in reduced output of munitions, including small arms ammunition needed by the fighting forces. The output of these metals is now being reduced by a shortage of manpower in mines, smelters and refineries.
The War Production Board is charged with the primary responsibility for providing the maximum possible production of critical metals, but the solution of the problem of assuring a sufficient supply of labor involves the responsibilities of other agencies of the Government as well. The coordination of the efforts and activities of other agencies of the Government with those of the War Production Board is needed, therefore, to ensure an adequate supply of critical metals.
The War Production Board urges all agencies involved to promote and support such actions as may be necessary to provide to nonferrous mines, smelters, and refineries a supply of labor adequate for the maximum possible output of such metals. It is especially important that the facilities of the United States Employment Service be expanded and strengthened to meet this particular need.
♦ ‡ ❖
The Chairman referred to above was Mr. Donald Nelson, Chairman of the War Production Board. The Mr. King referred to was Mr. H. O. King, Chief of the Copper Branch, Industry Operations, WPB. The Mr. Lund referred to was Mr. Wendell Lund, Director of the Labor Production Division, WPB. The Mr. Lubin referred to was Mr. Isadore Lubin, acting for Mr. Harry L. Hopkins, Special Assistant to the President.
*78 26. On September 4, 1942, Mr. A. I. Henderson, Deputy-Director General for Industry Operations, WPB, directed that an order be drafted by the Miscellaneous Minerals Branch which would curtail the output of gold and which would not be related to Preference Rating Order P-56.
27. On September 9, 1942, Mr. R. J. Lund, Chief of the Miscellaneous Minerals Branch, sent the following memorandum to Mr. A. I. Henderson:
At a meeting held in your office on September 4, attended by Messrs. Dodge and Scribner of your staff, Mr. Parks of the Miscellaneous Minerals Branch, and Mr. Stow of the Mining Branch, you issued instructions that an order be drawn up either by the Miscellaneous Minerals Branch or the Mining Branch which would curtail the output of gold and which would not be connected with Order P-56. You indicated that this Branch should prepare the order but that the order could be administered by this Branch or the Mining Branch as later determined.
It was understood that the purpose of the order was to make mining labor now producing gold available to copper and other strategic nonferrous metal mines. This end can be attained by WPB only through its authority to control materials.
Attached is copy of the order 6 for your consideration. This order has not been circulated, except in discussions with the Mining Branch.
The order is designed to close all mines producing gold to the extent of 50 percent or more of the value of the total output. In considering the order the following matters are pertinent:
(1) Number of mines affected
Based on 1940 production figures obtained from the Bureau of Mines, the latest they were able to supply, about 220 lode mines will be affected by the order. This figure is not exact, because production in the 1941 or 1942 base period specified in the order is not strictly comparable with the 1940 picture. Geographic distribution of these lode gold mines is as follows: California, 58; Colorado, 32; Montana, 30; Nevada, 27; Arizona, 18; Alaska, 12; Idaho, 12; Utah, 8; South Dakota, 6; with the remainder distributed among five other states.
*79 Detailed data on placer operations affected by tbe order are not presently available, but the Bureau of Mines reported that in 1940 a total of 3,107 placer mines produced gold and silver in the United States, and 1,069 in Alaska. Undoubtedly, sizable numbers of these produced such small quantities that they would be exempted by the order.
The Bureau of Mines reported that in 1940 there were 49 connected-bucket floating gold dredges operating in Alaska, 46 in California, 12 in Idaho, 7 in Montana, 6 in Oregon, 1 in Colorado, and 1 in Nevada. In addition there were large numbers of mechanized placer operations using drag line and power-shovel excavators, but no separate figures on these operations are available.
(2) Labor involved
Based on 1941 data, latest available from the Bureau of Mines, approximately 12,400 employees in lode gold mines will be thrown out of work by the order. Incomplete data indicate that about 70 percent of this labor is employed underground. Geographic distribution of this total labor was as follows: California, 3,394; South Dakota, 2,123; Colorado, 1,689; Alaska, 1,251; Arizona, 911; Montana, 602; Nevada, 601; Idaho, 590; Utah, 484; with the remainder distributed in a number of Western and Eastern states.
No detailed data are available showing number of employees in placer operations, except that the number would probably amount to at least several thousand in the United States and perhaps two thousand in Alaska.
(3) Estimated recaptwre of employees affected
Assurances were given by General McSherry at a meeting of the Interdepartmental Committee on Non-Ferrous Metals, September 8, that the U. S. Employment Service had adequate staff available to go immediately into the several hundred mining camps which might be affected by the gold curtailment order and to recruit labor for transfer to copper mines and other nonferrous metal mines in dire need of such labor. At a previous meeting of this Committee, an estimate was made that about 25 percent of the mine labor might be recaptured for work in other mines.
*80 (4) Other metals lost
Production of other metals in 1940 by mines affecfed is as follows; copper, 2,751,000 pounds; zinc, 92,000 pounds; lead, 12,047,000 pounds; silver, 4,947,000 ounces. Other metals such as antimony, arsenic, tungsten, molybdenum and manganese are also produced in minor amounts by some of these mines.
(5) Fluxing ore problem
Seme gold mines affected by the order produce large tonnages of siliceous ore required by smelters working primarily on other nonferrous metals, such as copper, lead and zinc. This flux is necessary to their operation, and gold values in the flux naturally make operations more economical than by adding barren siliceous material which may, or may not, be available at the smelter.
(6) Critical materials saved
Sizable amounts of critical materials will be saved in closing these gold mines. Estimates as to total current consumption of such materials are not available but the general order of magnitude of such consumption is indicated by the fact that in 1939 gold mines in the United States (excluding Alaska) spent about $17,000,000 on supplies and materials, $2,000,000 for fuel and about $5,000,000 for purchased electric energy.
(7) Effect on economy of states and communities
Shutting down the operations at mines affected by the order will result in loss of sizable tax revenues, in respect to state tax revenues alone, in some of the states involved. There has been insufficient time to obtain complete data on this point, but two examples are cited as follows: (a) In South Dakota, total state taxes collected in fiscal year 1941, exclusive of motor fuel taxes, amounted to $11,700,000; taxes paid to the state by mines in South Dakota affected by this order amounted to $1,000,000, or about 9 percent of the total; (b) in Nevada total taxes collected in fiscal year 1941, excluding motor fuel taxes, amounted to $3,300,000, of which about $65,000, or 2 percent, was collected from mines affected by this order.
Losses in county and municipal taxes will be felt much more severely by the communities in the vicinity of the mines. In this respect, shutting down *81 mining operations is not comparable with, shutting down other industrial operations in communities where enterprise is diversified; in the West it is generally true that the mine is the sole major source of income for local communities. For example, it has been reported that the Homestake Mining Company pays 65 percent of the local community taxes and 50 percent of the county taxes; tnat the wage earners and those servicing them pay the balance largely from the $4,500,000 in annual wages paid by the company. At least 19,000 people, the population of the county, are directly or indirectly dependent upon its operation.
For reasons stated in the last paragraph, hardships faced by old established mine employees will be severe. There is virtually no possibility of converting the facilities at the mines to war work.
(8) Probable loss of deep mining operations and dredging equipment
Although the order permits gold mining companies to maintain buildings, machinery and equipment in repair, and to keep access and development workings in a safe and accessible condition, it is probable that most of the deep mines situated in heavy, caving ground will be unable to take full advantage of these provisions in the order. As a result it is probable that many of these old, deep mines may never be reopened.
Costly dredging equipment forced to lie idle will be subject to more rapid depreciation than if it were maintained in operation.
The suggestion was made at a meeting this morning that the order should be tightened further by lowering the exemption from the 4,000-ton figure to 1,500 tons annually, or a monthly rate of 100 tons. Such a change would result in a large increase in the nmnber of mines affected by the order, in the total labor involved, and in items 3 to 6, inclusive, discussed above. Tabulations covering these smaller operations are just now being made, so details in respect to these items cannot be presented herewith. The order will be modified to the lower exemption figure before clearance, if these studies indicate a considerable amount of labor involved.
A factor which would tend to lower the number of mines affected, labor involved and other items discussed above, is the fact that many of the gold mines affected by the order have already been forced to curtail or close *82 operations through difficulties encountered in obtaining material and equipment, or through loss of labor to other industries. In one known instance, a recent fire destroyed the mill of a sizable mine so this operation is completely shut down and no labor available for recruitment.
There is, of course, an appeal provision in the order, through which, again, the number of mines, number of employees, other critical materials and fluxing ores affected will be lowered from the estimates cited in items 1 to 5 above.
Concluding Statement
Administration of an order such as the above, entirely divorced from provisions of Order P-56, necessarily involves duplication of work, both here in Washington and in the companies affected by the order. Those gold mines producing needed metals and fluxing ores will have to submit an appeal under the provisions of the order before they can be exempt. There is no practicable way of defining, in an order, such mines that should be exempted. This appeal procedure duplicates, in large measure, the appeals that were already made under the administration of P-56, and it is likely that the repercussions throughout the mining industry of such duplication of effort will be unwholesome.
Without using the mine serial numbers already established as a means for determining essential mining operations, there appears to be no alternative other than to use a percentage value basis in defining gold mines, and to provide for continued operation of essential ones through an appeal procedure.
Other pertinent considerations are presented in the attached memorandum to you from Dr. Wilbur Nelson, and I suggest that they be given careful attention.
The adverse repercussions mentioned above might be overcome in some measure by including an additional provision in the accompanying order which would automatically exempt those gold mines now having serial numbers until they are notified by the Director General for Operations that they are to cease operation. Each of these cases, in the meantime, should be carefully reviewed and judged in the light of the more acute situation now prevailing.
I shall await your written instructions before proceeding further.
*83 28. On September 11, 1942, Mr. J. M. Scribner, an assistant to Mr. A. I. Henderson, sent the following memorandum to Donald Nelson:
In accordance with instructions issued by Mr. A. I. Henderson, you will find attached a copy of the proposed curtailment order on gold. This order is in process of circulation in accordance with the procedure for order clearance and should be presented to the Clearance Committee for action about September 21.
Mr. Henderson requested that the order be prepared in a manner completely divorced from Order P-56. However, in his absence, after a consultation with Mr. H. W. Dodge and Dr. Wilbur A. Nelson, and a meeting with Messrs. Fred M. Eaton, Bichard Lester, and myself, it was determined to be most practical that the order not be divorced from P-56.
The effect of this order will be to close down all gold mines not having a mine serial number, within 30 days from issuance. It is the intention of the Mining Branch to review all mine serial numbers assigned to mines producing 50% or more gold in dollar value and to withdraw such serial numbers unless the balance of the production represents critical materials urgently needed for the war effort in amounts sufficient to justify continuance of the operation.
In addition to the draft of the proposed order, there was also included an explanation of its effect in the following terms:
The Order requires that all mines producing gold, except those having a serial number under P-56, cease operation and development within 30 days after the date of issuance of the Order. The Order makes provision for the minimum maintenance and repair necessary to maintain the mines plant in condition and for the granting of preference ratings to accomplish this after application made to the Director General for Operations.
All gold mines which produce needed quantities of copper, lead, zinc, and other minerals, or of silicious fluxes, already hold serial numbers under Order P-56. Therefore, the mines closed down by this proposed order would be only those which have, after examination by the Mining Branch, already been determined to be nonessential to the war effort.
The result of closing these nonessential mines will be to conserve all the material which they have been *84 using for operational and development purposes. Heretofore they have merely been denied the right to use the high preference ratings granted by Order P-56, but have been able not only to obtain certain material under P-100, but also to use their own inventories.
29. The effect of the proposed limitation order was further summarized in the following terms at about the same time:
A draft of a limitation order on materials and supplies for gold mining is being circulated within the War Production Board. The order provides for complete shutdown of nonessential mines in the United States with the following exceptions:
(1) Mines producing less than 1,200 tons of ore per year will be permitted to continue operations at their rate of operation in 1941 or early 1842. Such mines are usually individual or partnership enterprises worked by men who are not likely to be employed by others.
(2) A limited amount of supplies and equipment will be made available for the purpose of keeping the mines accessible and safe. This is intended to avoid flooding or otherwise damaging mines which would be in a position to produce after the emergency has passed.
A nonessential mine is defined as a mining enterprise in which gold is produced, unless the operator holds a serial number for such enterprise issued under Preference Bating Order P-56, as Amended. Since producers of siliceous fluxing ores and of complex ores containing substantial amounts of critical metals as well as gold have already been granted serial numbers, the order will not affect the production of essential metals.
The basic purpose of this curtailment of gold mining is, of course, to free manpower for the mining of essential minerals, particularly nonferrous metals such as copper, zinc and lead. Because many of the gold mines are located much closer to other mines producing such strategic metals as mercury, molybdenum, tungsten, vanadium, chromium, manganese, etc., it is expected that workers will also be made available to these industries.
The War Manpower Commission through the Employment Service is now taking steps to insure orderly recruiting of these gold miners and to provide for a minimum of delay in reemployment as well as to provide transportation expenses. It is expected that this procedure will make possible the maximum diversion of *85 labor to essential mining industries where their skills can be used to best advantage. ■
Beside diverting manpower to essential industries,, this order, when in effect, will also conserve some materials and supplies used in gold mining, such as mercury, drill steel, etc.
30. The minutes of the Interdepartmental Committee on Non-Ferrous Metals for September 15,1942, provide in part as follows:
$ $ $ $ $
Dr. M. Stow presented a report on the proposed order to curtail gold mining operations. He distributed a copy of the proposed order which, he said, had been, brought up for consideration before the Clearance' Committee.
Dr. Stow explained that the persons responsible for drafting the order favored the method of curtailing gold mines by denying them serial numbers under P-56, rather than the type of blanket order which would shut down any gold mine whose gold ore production was above a stipulated proportion of its total production by dollar value. Under the former type of order the gold mines would be closed by being denied serial numbers under P-56, as a result of which they would be unable to obtain either supplies or equipment and would be prohibited from using their present supplies and equipment.
Mr. Harbison [Army representative] expressed some concern over the delay in issuing the gold order. He outlined the steps that various agencies had taken to meet the manpower shortage in nonferrous metal mines, and pointed out that the transfer of gold miners to essential mining was being held up by the lack of a gold curtailment' order. He pointed out that the U. S. Employment Service had been unable to obtained any recruits at Eapid City, South Dakota, because the gold mines had not been closed down, although Anaconda Copper Mining Company had agreed to pay transportation costs. He made it clear that the War Department was impatient at the delay.
Mr. Lester of the War Manpower Commission asked that his organization be kept informed of what mines would be affected by the directive, in order that representatives of the Employment Service might be on the spot beforehand.
In this connection, since the primary purpose of the order was to free manpower rather than to curtail materials, Mr. Lipkowitz suggested that an advisory com *86 mittee be established with representatives from Labor Production Division and War Manpower Commission.
The meeting was attended by representatives of the various minerals branches, the Mining Branch, the Labor Production Division, and the Legal Division of the War Production Board, as well as representatives of the War Manpower Commission, the Office of Price Administration, and the War Department. Dr. Wilbur Nelson presided at the meeting. Dr. Stow was immediately subordinate to Dr. Wilbur Nelson in the Mining Branch.
31. The draft of the proposed limitation order for the goldmining industry was submitted to Morris Creditor, Special Assistant to Donald Nelson. On September 15,1942, he sent the following comments upon it to Donald Nelson:
I have reviewed the proposed limitation order for the gold mining industry and I wish to raise certain points as to the soundness of such an order.
You will recall that we received a letter from Senator Gurney on August 31 in which he set forth the harmful effects that such an order would have on the economy of the State of South Dakota. In your reply you stated in effect that we were confronted with the manpower problem and something had to be done to overcome the losses of production which are being experienced in the mining of copper and other strategic materials through the shortage of experienced miners.
In the preamble of the limitation order no mention is made of manpower requirements. It simply states that the order is made necessary because of the shortage in the supply of critical materials which are used in the maintenance and operations of gold mines.
It would seem to me that if the order is based on the premise of critical materials alone, the question might be raised as to why such an order would not apply to materials being sent by this country to other gold mines in Canada, South America, and South Africa.
If the main purpose of this order is to divert miners from the gold mining industry to copper and other mining industries, it seems to me that there is no assurance that this order would accomplish the desired results. As Gustav Peck pointed out to you in his memorandum of September 9, it would be too bad to close the Homestake Mine, for instance, without the assurance that most of the miners will continue to practice their trades in the copper mines.
*87 Would it not be more practical to accomplish the purposes by a freeze order similar to that which is now in effect for workers in the copper mines and the lumber industry. This may be more drastic but, on the other hand, may give better assurance that the miners in the gold mines would eventually find their way into the copper mines. Consideration might also be given to the idea of having the Army give indefinite furloughs to Service men who in the past were engaged in the mining of nonferrous materials.
Even aside from the possible dissipation of these skilled miners into other occupations, there is a question whether the closing of all the gold mines will release any relatively large number of workers. As I understand it, in the case of Homestake Mine the proposed order would affect only about 450 miners. This is the largest gold mine and has from a third to a half of all the miners to be released. The Alaska-Juneau miners, incidentally, will be stuck in Alaska. Where are they expected to go?
I am sure that a great deal of thought has been given to the proposed limitation order on gold mining, but unless there is a high degree of assurance that the main purpose will be accomplished; namely, the diversion of these miners to the nonferrous mines, I feel it is important to weigh the adverse effects it might have in other directions.
Actually, only a small amount of critical materials is used in gold mining. Hence, if it is contemplated to issue the order in its present form, the preamble should give the real reason; which is to divert this labor to more necessary industries.
32. On September 17, 1942, Mr. J. M. Scribner, assistant to Mr. A. I. Henderson, sent the following memorandum to Dr. Stow of the Mining Branch:
Acting in accordance with instructions received from Mr. Donald Nelson’s office this morning, please be advised that the gold order is to be cleared with all of the branches involved as promptly as possible, but it is not to be presented to the Clearance Committee for clearance until further word is received from Mr. Nelson’s office.
The order is to be held in the branch in such shape that it may be presented to the Clearance Committee for action immediately upon advice from Mr. Nelson’s office that it is to go through.
*88 33.On September 25,1942, representatives of the branches of WPB concerned with mineral production met and discussed the proposed gold limitation order which, by that time, had been designated L-208. A resolution was passed urging that representatives of the gold-mining companies be called to Washington to discuss the proposed gold order so that:
A. Where possible, existing organizations may be utilized for important mining operations, or prospective operations, necessary in the war effort.
B. Labor, and especially experienced miners, can be made available to the mining industry, rather than lost to vital metal production.
34. On September. 25, 1942, William L. Batt, Vice Chairman of WPB, sent a memorandum to A. I. Henderson, Deputy Director General for Industry Operations, WPB, which stated, inter alia:
I have told the Chairman that my judgment is that the limitation order on gold mining should be released at the appropriate time, and he has agreed. It was the consensus of opinion that we should wait until the War Labor Board had acted on certain wage matters, and I shall expect to be advised when the situation is clear on this point.
It seems to me imperative that we very carefully word our press release so that the predominant objective, namely of releasing less essential labor for more essential requirements, shall be clearly evident. And I particularly direct the attention of those who have to do with this matter at this point.
35. On September 30, 1942, a conference was held in Mr. Batt’s office. Senator McCarran of Nevada and Senator Gurney of South Dakota, as well as Congressman Engle-bright of California, and Congressman Case of South Dakota, attended. Samuel Hill of the War Manpower Commission and members of the WPB staff, including Wilbur Nelson and Samuel Lipkowitz, also attended. The Members of Congress spoke of the hardships that would be imposed on the inhabitants of the gold-mining communities and of the detrimental effects on the morale of such people if the mines should be closed down by the issuance of a WPB order. The *89 WPB representatives, except Wilbur Nelson, countered witb statements emphasizing the need for labor in copper mines. Some discussion arose as to the number of gold mine employees who would be released by such a closing order.
36. On September 29,1942, at the direction of W. L. Batt, Wilbur A. Nelson telephoned the following representatives of the gold mining industry and requested them to attend a meeting in Washington: Guy N. Bjorge, General Manager of Homestake Mining Company, Errol MacBoyle of Idaho Maryland Mines Corporation, Merrill Shoup of Golden Cycle Corporation, Carroll Searles of Newmont Mining Corporation, and Thomas McCormack of the Natomas Company. The meeting took place on October 1st and lasted for approximately five hours.
Those in attendance at the meeting included W. L. Batt, Wilbur A. Nelson, Allen Buchanan and Samuel Lipkowitz of WPB’s Labor Division, Messrs. Hill, Harbison, Ayer, Hayes, Heikes and Hatch, General Lucius Clay representing the War Department Services of-Supply, General Frank J. Mc-Sherry of the War Manpower Commission, Senator Chan Gurney and Kepresentative Francis Case of South Dakota, Representative Harry Englebright of California, and the five aforementioned representatives of the gold mining industry.
At the opening of the meeting Mr. Batt stated that he had brought the gold mine operators to Washington to tell them that a decision had been made to close the gold mines in order to transfer the released labor to the copper mines. In justification of such an order, Mr. Lipkowitz of WPB’s Labor Division stated that there were between 10,000 and 12,000 men who were then employed in the gold mines. The gold mine owners immediately protested that the figures stated were completely inaccurate; that the gold mines had already lost their most active men who had either gone to the shipyards and aircraft plants on the West Coast or had been drafted into the Armed forces; that the miners remaining in the gold mines were settled residents of their communities and that it was doubtful that they would move away to work in the copper mines if the gold mines were closed.
*90 In response to General McSherry’s statement that the need for underground workers in the copper mines was urgent, Mr. Bjorge of Homestake pointed out that it was unreasonable to hope that gold miners would accept the jobs which the nonferrous metal miners were already leaving for more desirable employment, and that it was more likely to expect that miners forced to leave Homestake would go to the same type of more desirable jobs to which the copper miners were going. He also pointed out the great hardships which the closing of the Homestake mine would inflict upon the local communities and upon the State of South Dakota. Similar arguments against a closing order were advanced by the other gold mine operators and by the Senators and Representatives in attendance. Messrs. Hatch, Heikes and Ayer, all of WPB, questioned the possible effectiveness of the proposed order. General Clay, representing the Army, spoke strongly in support of a closing order. Late in the meeting, Wilbur A. Nelson undertook to determine how many miners and muckers would actually be released by a closing order.
37. On October 3,1942, Wilbur Nelson furnished Mr. Batt with figures which he had obtained directly from the gold mine operators. He reported that while there were 3,270 workers employed by gold mining companies at that time, only 896 of them were hardrock miners and muckers. He further reported that approximately 300 of these men would be needed to maintain the buildings, machinery and equipment in repair, and the access and development workings safe and accessible as provided for under the proposed order. His report concluded that if all the gold mines and dredges in the United States were put on a stand-by basis, it would make available only about 600 miners and muckers for other mining enterprises “provided they [could] all be induced to go into other mines.”
38. On October 1,1942, Mr. Batt sent the following memorandum to Donald Nelson, Chairman of the WPB :
The more I study the gold mining situation, the more uncertain I am as to the form which a restriction of operations should take. Complete closing without exceptions will produce very serious economic dislocations, and the total possible gain in men is a small figure. If *91 tbe question comes up in your press conference, I would suggest that you refer to the need for miners and the lack of need for gold, and say that the matter is being studied from all angles.
39. On October 2,1942, Under Secretary of War Kobert P. Patterson sent Mr. Batt the following letter:
I hope that prompt and effective action will be taken with regard to gold mining. I need not call your attention to the urgent need for more miners in the production of copper and other nonferrous metals as you know the situation as well as I do. The longer the delay in shutting down gold mining, the further off will be the relief of the copper shortage. The matter has hung fire for some time, and I trust that there will be no further delay.
If it is thought best to have the order approved by the War Department and the Navy Department, I will be glad to give the War Department’s approval, and I believe that Mr. Forrestal will do the same for the Navy.
40. On October 5,1942, Under Secretary of War Patterson and Under Secretary of the Navy Forrestal sent the following memorandum to Donald Nelson:
The case of gold mining presents sharply the question whether we mean business or not in doing everything possible to push war production.
There are two thousand to three thousand hard-rock miners engaged in gold mining, now of no use in war production. These men could help out substantially in relieving the labor shortage in copper mining. They will not help out in copper mining so long as gold mining is carried on.
The present situation in production of copper, due to shortage in the supply of miners, is so alarming that the Army is about to furlough soldiers to go back to work on mining of copper. This is a hard step for the Army to take. But the effect of this step and others will not give complete relief if nothing is done to transfer gold miners to copper mining.
The matter has hung fire for some time. We deem it of the utmost importance that prompt action be taken and that half measures be avoided.
41. The matter was presented to the War Production Board at its meeting on October 6, 1942. The minutes of that meeting, insofar as here material, and which accurately reflect what transpired, read as follows:
*92 Mr. Batt reported that the matter of shutting down United States gold mines had been receiving detailed attention. On conferring with Brigadier General Mc-Sherry of the War Manpower Commission and representatives of the gold mining companies, it had been found that at present the gold mining industry employs 3,270 workers; 750 are engaged in dredging and only 896 are hard-rock miners. Loss of labor to the Services and to war industries, and higher costs have already sharply curtailed operations of all domestic mines except Homestake. Homestake’s labor force has dropped from a peak of slightly over 2,000 workers to 1,876, including lumbermen and machine shop workers. If Homestake were shut down except for standby operations, all but 500 of these workers could be released for work elsewhere. Lead and Deadwood, South Dakota, with aggregate populations of 16,000 are totally dependent on the mine’s operation.
Although it has recently emphasized other forms of production, the State Department, because of broad international considerations, heretofore has urged that gold mining in South Africa and Honduras be maintained. The South African economy and the stability of the present government are largely dependent on gold mining. The basic industries of Honduras are the cultivation of bananas, of which exportation to the United States has been reduced to 20 percent of normal, and gold mining. Mr. Leon Henderson reported that Canadian gold mining is being curtailed very sharply. The Vice President pointed out that questions pertaining to production of gold abroad should appropriately be discussed with the Board of Economic Warfare.
Mr. Batt stated that after investigation he recommends that: (1) All nonessential domestic mining of gold other than that incident to the mining of critical metals be stopped as soon as possible and not later than within 60 days; and (2) gold mines not producing critical metals be allowed to continue standby maintenance operations lest it be impossible to reopen them at the close of the war.
General Somervell stated that because of the critical shortage of copper, which is drastically' curtailing ammunition production, the Army has taken the unusual precedent of furloughing 4,00(5 soldiers to work in the copper mines and- that, under these conditions, failure to stop gold production immediately would be inexcusable.
After further discussion it was agreed that:
*93 An order shall be issued by the War Production Board stopping all nonessential domestic gold mining operations within 60 days and thereafter permitting only minimum maintenance to keep mines dewatered and in standby condition.
42. Those in attendance at the October 6,1942, meeting of WPB to consider the gold closing order included Donald M. Nelson, W. L. Batt, A. I. Henderson, Wilbur A. Nelson, Under-Secretary of War Robert P. Patterson, Lieutenant General Brehon B. Somervell, and Paul Y. McNutt, Chairman of the War Manpower Commission. The meeting was also attended by numerous other persons who were there for the purpose of considering the so-called feasibility program. The gold curtailment order was discusssed for some fifteen to thirty minutes and it was decided to issue the gold closing order immediately.
43. On October 8,1942, the Y7PB issued Limitation Order L-208 directing that operations at gold mines not holding serial numbers under Order P-56 be discontinued. Order L-208 read as follows:
The fulfillment of requirements for the defense of the United States has created a shortage in the supply of critical materials for defense, for private account and for export which are used in the maintenance and operation of gold mines; and the following order is deemed necessary and appropriate in the public interest and to promote the national defense.
Section 3093.1 — LIMITATION ORDER L~m
(a) Definitions. For the purposes of this order, “nonessential mine” means any mining enterprise in which gold is produced, whether lode or placer, located in the United States, its territories or possessions, unless the operator of such mining enterprise is the holder of a serial number for such enter-Srise which has been issued under Preference 'ating Order P-56.
(b) Restrictions upon production.
(1) On and after the issuance date of this order, each operator of a nonessential mine shall immediately take all steps as may be necessary to close down, and shall close down, in the shortest possible time, the operations of such mine.
(2) In no event on or after 7 days from the issuance date of this order shall any operator of a non *94 essential mine acquire, consume, or use any material, facility, or equipment to break any new ore or to proceed with any development work or any new operations in or about such. mine.
(3) In no event on or after 60 days from the issuance date of this order shall any operator of a nonessential mine acquire, consume, or use any material, facility, or equipment to remove any ore or waste from such mine, either above or below ground, or to conduct any other operations in or about such mine, except to the minimum amount necessary to maintain its buildings, machinery, and equipment in repair, and its access and development workings safe and accessible.
(4) The provisions of this order shall not apply to any lode mine which produced 1200 tons or less of commercial ore in the year 1941, provided the rate of production of such mine, after the issuance date of this order, shall not exceed 100 tons per month, nor to any placer mine which treated less than 1000 cubic yards of material in the year 1941, provided that the rate of treatment of such placer mine, after the issuance date of this order, shall not exceed 100 cubic yards per month.
(5) Nothing contained in this order shall limit or prohibit the use or operation of the mill, machine shop, or other facilities of a nonessential mine in the manufacture of articles to be delivered pursuant to orders bearing a preference rating of A-l-k or higher, or in milling ores for the holder of a serial number under Preference Rating Order P-56.
(c) Restrictions on application of preference ratings. No person shall apply any preference rating, whether heretofore or hereafter assigned, to acquire any material or equipment for consumption or use in the operation, maintenance, or repair of a nonessential mine, except with the express permission of the Director General for Operations issued after application made to the Mining Branch, War Production Board.
(d) Assignment of preference ratings. The Director General for Operations, upon receiving an application in accordance with paragraph (c) above, may assign such preference ratings as may be required to obtain the minimum amount of material necessary to maintain such nonessential mine on the basis set forth in subparagraph (b) (3) above.
*95 (0) Records. All persons affected by this order shall keep and preserve, for not less than two years, accurate and complete records concerning inventory, acquisition, consumption, and use of materials, and production of ore.
(f) Reports. All persons affected by this order shall execute and file with the War Production Board such reports and questionnaires as said Board shall from time to time prescribe.
(g) Audit and inspection. All records required to be kept by this order shall, upon request, be submitted to audit and inspection by duly authorized representatives of the War Production Board.
(h) Communications. All reports to be filed, appeals, and other communications concerning this order should be addressed to:
War Production Board
Mining Branch
Washington, D. C. Ref: L-208
(i) Violations. Any person who wilfully violates any provision of this order, or who, in connection with this order, wilfully conceals a material fact or furnishes false information to any department or agency of the United States, is guilty of a crime, and upon conviction may be punished by fine or imprisonment. In addition, any such person may be prohibited from making or obtaining further deliveries of, or from processing or using, material under priority control and may be deprived of priorities assistance.
(3) Appeal. Any person affected by this order who considers that compliance therewith would work an exceptional and unreasonable hardship upon him may appeal to the War Production Board, by letter, in triplicate, setting forth the pertinent facts and the reason he considers he is entitled to relief. The Director General for Operations may thereupon take such action as he deems appropriate.
(k) Applicability of Priorities Regulations. This order and all transactions affected thereby are subject to all applicable provisions of the Priorities Regulations of the War Production Board, as amended from time to time.
(P. D. Reg. 1, as amended, 6 F. R. 6680; W. P. B. Res:. 1, 7 F. R. 561: E. O. 9024, 7 F R. 329; E. O. 9040, 7 F. R. 527; E. O. 9125, 7 F. R 2719; sec 2 (a), Pub. *96 Law 671, 76th Cong., as amended by Pub. Laws 89 and 507, 77th Cong.)
Issued this 8th day of October, 1942.
Ernest Kanzler
Director General for Operations
44. Coincident with the issuance of L-208, the War Manpower Commission issued a directive relating to the employment of workers previously employed as production or maintenance workers in gold mines. This directive was issued on October 7, 1942, by Paul V. McNutt, Chairman, and stated in material part as follows:
I. On and after the date hereof no employer shall hire-in, or hire for work in, Alaska or any State west of the-Mississippi Eiver, any person who on or after October-7, 1942, has ceased to be employed as a production or maintenance worker in connection with gold mining; except upon referral of such worker to such employer by the United States Employment Service.
II. No person who on or after October 7, 1942, has-ceased to be employed as a production or maintenance-worker in connection with gold mining shall be referred by the United States Employment Service to any work in Alaska or a State west of the Mississippi Eiver other than work in essential nonferrous metal mining, milling,, smelting, and refining activities unless such referral would be in the best interests of the war effort or unless-the denial of such referral would entail an undue hardship upon the individual concerned, as determined in-accordance with regulations and standards prescribed by the Chairman of the War Manpower Commission.
45. Immediately following the issuance of Order L-208 on October 8, 1942, a statement was issued by Paul V. McNutt,. Chairman, War Manpower Commission, and Donald Nelson, Chairman, WPB, appealing to all workers in gold mines to transfer to nonferrous metal mines and not to other war industries.
46. The dominant consideration by Chairman Donald Nelson of WPB in the issuance of Limitation Order L-208 was-the releasing of mine labor from the gold mines for employment in mines that were producing other metals, such as copper, which were in short supply and urgently needed in the-war program.
*97 47. The closing of the gold mines did very little to relieve the manpower shortage in the nonferrous metal mines because (1) a relatively small number of the type of workers needed in those mines, i. e., hardrock miners, were released (finding 87); (2) a number of these men were required to remain in the gold mines to keep them in safe condition; (3) the older and more settled experienced miners remained in their home communities doing what they could to make a living or remaining idle; (4) most of the younger hard-rock miners released sought employment in the better paying war industries, construction projects, or were drafted in the armed services. Approximately 100 hardrock miners are known to have gone to work in the nonferrous metal mines and to have remained there for a year.
48. Although the preamble to the order stated that it was issued to conserve critical materials, supplies and equipment needed for defense and in short supply, the only part of the order itself which attempted to effect such a conservation was that part which prohibited the gold mines from acquiring such materials, and that acquisition had already been effectively curtailed and in large part cut off by existing priority orders (finding 17). That part of the order which prohibited the use by the gold mines of the supplies, materials and equipment and facilities they owned and had on hand did nothing to assure that those materials, etc., would be available for use by more essential industries of by the Government. The order left the owners free to dispose of them as they pleased.
49. Prior to the issuance of L-208, and afterwards until the end of the war, critical materials, machinery and equipment subject to allocation and control by WPB were shipped in substantial quantities to foreign countries for use in their gold mining industry. These countries included South Africa, Canada, Honduras, Nicaragua and Columbia, in all of which gold mines continued to operate throughout the war.
50. On and prior to October 8,1942, officials of WPB who were responsible for the issuance of L-208 knew (1) that existing priority orders insured that the gold mines would not receive any critical materials needed by more essential *98 users; (2) that the closing of the gold mines would release only a small number of hardrock miners and helpers; (3) that no agency of the Government had the power to compel these men to accept employment in the nonferrous metal mines; (4) that in all likelihood unemployed gold miners would accept employment in shipbuilding, aircraft and construction industries rather than go to work in the nonferrous metal mines where wages were low and working and living conditions poor; (5) that L-208 was not in fact directed at the known reasons for the shortage of underground workers in the nonferrous metal mines, i. e., low wages, bad working and living conditions, and the refusal of Selective Service to defer miners; (6) that a substantial number of the employees of the gold mines were middle-aged men with families who owned their own homes and would not leave their communities if any alternative were possible; (7) that in many instances the communities in the vicinity of gold mines were entirely dependent upon the operation of the mines for their continued prosperity; (8) that the deeper mines were likely to deteriorate and become flooded if closed down, and that many operators would not be able to afford the cost of keeping their mines safe and accessible or their machinery, equipment and buildings in repair during a-long period of unproductivity.
51. It is reasonable to conclude that in issuing L-208 WPB acted without any justifiable anticipation that the order would bring about the transfer of more than an insignificant number of hardrock miners to the nonferrous metal mines.
52. On October 10,1942,21 United States Senators from 12 gold-producing Western States sent the following letter to the President of the United States:
Some days ago the War Production Board announced a decision to close all gold mining operations in the United States. This order was made by the Board against the emphatic protest of those representing the largest mining operations engaged in the mining of gold from lode and placer operations.
The largest mining operations affected by this order are in the states of South Dakota, California, and Colorado.
*99 The Homestake Mine in South Dakota has been operating for some sixty years and has supported a community immediately surrounding the operation of some sixteen or eighteen thousand souls.
The Mother Lode Mines in California extend along the western base of the Sierra-Nevada range of mountains for a distance of 150 miles or more. These mines have been depended upon by communities the total of which would approximate one hundred thousand souls.
The population dependent on the Cripple Creek Mines of Colorado has varied from time to time and is not definite at this moment. Suffice it to say that it would be in the neighborhood of five or six thousand souls.
The economy of communities and states in which these mining operations are located has depended largely upon these operations, in that all of these mines have contributed materially by way of taxation to the states, counties, and municipalities in which they are located.
The labor employed by these mining operations in the respective states has been to a very large extent contributed by the communities that surround the respective mine operations. Homes have grown up through the years in each of these communities, and sons followed their fathers into the mines.
The record made before the War Production Board discloses that in each of these mining communities the young men, that is, men under 50 or thereabouts,- have already either gone into the military branches of the United States, or have gone into war activities where alluring wages attracted them. The record discloses that the men now engaged in mining operations in the mines affected by the order are by and large about 50 years of age or over. The record before the War Production Board discloses that the men now engaged in mining operations in these localities have, with but rare exception, been employed in the mines of the respective localities for many years.
It is stated that the object of the order made by the War Production Board closing down these gold mines is because of a shortage in the supply of critical materials for defense, and the making of the order is supported by the theory that the labor employed in these gold mines will go into mines of copper or lead or zinc.
We respectfully draw your attention, Mr. President, to the record as made before the War Production Board that if all of the gold mines affected by the order of the Board are put on a standby basis, that is, if they are *100 Eermitted to retain only enough labor to keep the mines :om becoming flooded and caved, there will be in all about 2,020 of all types put out of employment.
The record before the Board shows that there may be another 500 men put out of employment from other mines of smaller capacity, making a total of 2,520 men put out of employment from lode mines.
It is estimated that the number of men put out of employment from dredger operations will be about 750 men. The men engaged in dredger operations are as a rule much older than those engaged in lode mining, at the present time.
It is estimated that the total number of men put out of employment by the order of the War Production Board will be approximately 3,270. The record before the Board establishes that of this number about 900 are miners and muckers.
From this number, it is estimated that between 150 and 200 miners and muckers would be necessary to retain the gold mines and dredges in a stand-by condition j hence, not to exceed 750 men, accustomed to actual mining and generally termed “miners” and “muckers” would be available for employment in mines of copper, lead or zinc.
The record made before the War Production Board discloses that miners, who have been for a long time engaged in gold mining, do not go into the mining of other minerals, such as copper, lead and zinc. There are many reasons stated for this custom.
It is emphatically stated before the War Production Board that if this mine labor population is released from employment in the gold mines in the respective states, only a negligible number, if any at all, will seek employment or remain employed in mining operations of other metals.
The impairment of the morale of communities in the states affected by the order of the War Production Board; the far-reaching effect upon the economic structure of the communities;.the irreparable destruction of private property that will be accomplished by the flooding and caving of gold mines; the discouragement and heartache that will come into thousands of homes, many of them the homes of boys now in the military service of this country, but whose parents and relatives remain in the communities affected by this order — all of these things will not be compensated by the negligible number, if any, of mine laborers who will go from the closed mines to communities far remote to engage in other mining activities.
*101 We respectfully draw your attention to the fact that at this very time Great Britain is urging and aiding the groduction of more gold by the gold mining operators of outh Africa.
We respectfully draw your attention to the fact that our neighbor ally in this war, the Dominion of Canada, is going forward and encouraging the production of gold in that country, and in a telephonic communication within the past few days with those in authority on the subject in Canada, the information was received that the Canadian government has no intention of closing down its gold mine operations.
We respectfully urge that no beneficial result inuring to the defense of the United States in its time of war will flow from the order made by the War Production Board closing the gold mines of this country. The record needs no emphasis that great and irreparable injury will result.
We respectfully bring this matter to your attention with the request that you stay the order made by the War Production Board affecting the gold mine operations of the United States, at least until the whole subject of marshalling of manpower and the allocation of labor may be considered, and the vital questions involved, concluded; thus that the gold mining industry of the United States may not be subjected to unwarranted and unusual hardship and injury which may not eventually be considered necessary, and which may not be equitably borne by other industries.
In May 1944, the Policy Analysis and Becords Branch of the WPB submitted a report concerning Limitation Order L-208 providing in part as follows:
It is generally agreed by the WPB divisions concerned with mining activities that a very small percentage of the released gold mine workers actually were employed by other mines. A majority of them probably went into work of greater value to the war effort than gold mining, such as lumbering, agriculture, construction, shipbuilding, aircraft manufacture; 96 but the fact remains that the primary justification for closing the gold mines was to get labor for the production of *102 the strategic metals. Wilbur Nelson, Arthur S. Knoizen, present Director of the Mining Division, and F. H. Hayes, Chief of the Primary Production Branch of the Copper Division, concur in the statement that the number of gold mine workers who went into other mines and remained there for a year or more was not over 100. 97
BINDINGS RELATING TO PLAINTIFF HOMESTAKE MINING COMPANY
53. Homestake Mining Company (hereinafter referred to as Homestake) is and was at all times herein mentioned a corporation organized and existing under the laws of the State of California.
54. Homestake is and was at all times herein mentioned the owner of patented mining claims covering more than 5,000 acres of mining properties containing gold-bearing ores of great value located in the Black Hills area of South Dakota, near the city of Lead, South Dakota.
55. On October 8, 1942, and for 65 years prior thereto, Homestake was and had been engaged in the business of mining, processing and selling gold, and in 1942 was the largest gold producer in the United States.
56. On October 15,1942, Homestake notified its employees of the issuance of Order L-208 and informed them of the necessity of concluding its gold-mining operations pursuant to the order. Homestake urged such employees as would be released to consider the opportunities for employment in the copper mines.
57. Pursuant to the terms of Order L-208 Homestake discontinued breaking new ore on October 15,1942, and began to lay off miners on that date.
58. On or about October 17, 1942, Homestake appealed to WPB, requesting permission to continue mining operations on the ground that Order L-208 would work an exceptional and unreasonable hardship upon it. On November 25,1942, WPB decided the appeal, granting Homestake only limited relief. The WPB advised Homestake of this decision in a letter dated November 25, 1942, which stated in part as follows:
*103 Permission granted to remove and mill broken ore from underground and refill the stopes with suitable material during a period of six months beginning December 8,1942, provided that no more than 60 employees are at any time assigned to or used in such operations and provided further that workers shall not be assigned to such operations when the War Manpower pommission finds that they are needed in mining operations elsewhere. Permission is denied to break any new ore or to proceed with any development work or any new operations in or about the Homestake mines.
59. Homestake, with the aid of the limited additional personnel authorized by WPB, continued the hoisting and processing of ore already broken from on or about October 15, 1942, until the latter part of May 1943. After June 1, 1943, the Homestake gold mine was closed down for all purposes, except necessary maintenance, until on or about July 1, 1945. It reopened on that date and has operated continuously since then.
60. On October 8, 1942, the life of operations of Home-stake’s gold mine based on ore bodies, indicated by reserves of ore in sight and ore that could be expected from development, was at least 20 years at the then current rate of mining.
61. Homestake, at the time of its founding in 1877, was located in an isolated part of the United States and as a result was required to maintain a policy of self-sufficiency. From its early days it established a program of maintaining larger inventories than customary in most mining enterprises. Prior to October 8, 1942, Homestake had acquired extensive timberlands which provided lumber for the mine, and continued this program up to the time of the issuance of Order L-208. Prior to October 8, 1942, Home-stake also had developed a coal mine, and was producing its own electric power.
62. In October of 1942, Homestake had recently completed two deep mine shafts equipped with large modern hoists, and had erected a new lumber mill. Its steam power plant was relatively new and its ore processing mills were in excellent operating condition.
63. On October 8, 1942, Homestake maintained its own foundry and machine shops used in the fabrication and repair of a variety of mining and processing equipment. In *104 addition, Homestake was capable of supplying all of its own needs with respect to mine timber, coal, and electric power.
64. The chief items of materials and supplies used by Homestake in its mining and milling operations consisted of pipe, rail, rock drills, parts for rock drills, drill steel hoisting ropes (wire), electrical wire, cyanide, lime, shoes and dies for stamp mills, balls and rods for grinding mills, liners for grinding mills, and cones and mantles for crusher's. Items of necessary equipment included locomotives, mine cars and mechanical shovels.
Homestake’s inventory of these and other necessary materials and supplies was sufficient to operate its mine during the entire period of the closure. This did not include items such as dynamite and explosives. Only a three months’ supply of dynamite was on hand on October 8,1942, but it was readily available without restriction.
65. At no time did WPB requisition or order Homestake to surrender or transfer any of its supplies, equipment or machinery, nor did it make any inquiries regarding the amount, nature or availability of Homestake’s supplies, equipment and machinery, although the Board was furnished with an inventory of supplies on hand and other information relating to equipment and machinery.
66. The working conditions at Homestake and the living conditions in the communities surrounding Homestake in 1942 were superior to those at the nonferrous metal mines to which the Government sought to transfer the Homestake miners. Homestake employees enjoyed free medical and hospital services, group insurance, pensions, recreational facilities, and many of the older miners owned their own homes. In 1942, approximately 440 of Homestake’s employees had seen more than 21 years of service with the mine, and some had been employed there for more than 40 years. For these reasons, Homestake had enjoyed greater employment stability than the nonferrous metal mines despite the lure of higher'pay in the war industries.
67. In October 1942, Homestake had sufficient labor available to operate at full capacity. Even in the event of reduction of available manpower Homestake could have maintained normal production levels by using mining techniques *105 requiring less labor and by increasing its workday from seven to eight hours.
68. The Homestake Mining Company released 437 men from its employment during the period from the issuance of L-208 on October 8,1942, to a date shortly prior to November 12, 1942. Of these 437 employees, 391 came from the mine department, 21 from the metallurgical department, 21 from the mechanical department, and 4 from the carpenter department. Of the 391 employees from the mine department, 183 were classified as miners on Homestake’s payroll* And of these 183 miners, 39 had less than six months’ experience. Of the 437 released, 110 men did not register with the United States Employment Service. Of the remainder, 207 of them were placed by the United States Employment Service in other mining work as of a date shortly prior to November 12,1942.
Homestake reported to the U. S. Social Security Agency that it had in its employ during the third quarter of 1942 a total of 2,129 employees. In its report for the fourth quarter of 1942, the company reported that 921 of these employees received less wages than they had received in the preceding quarter, which indicates that these employees were separated from the company’s employ before December 31, 1942. Of these 921, there were 401 also reported by another employer, although not previously so reported, which indicates that these employees transferred to such other employers after leaving the Homestake Mining Company. These figures did not include transfers after December 31, 1942, although Homestake continued limited operations through that date.
69. In October 1942, Homestake was the largest single source of potential nonferrous metal mining labor. Representatives of the United States Employment Service, immediately following the issuance of L-208, attempted to induce released workers to accept employment at the Anaconda copper mine at Butte, Montana, and the Climax Molybdenum mine at Climax, Colorado, both about 500 miles from the Homestake mine.
Fifty-one Homestake employees accepted employment at Climax. Forty-one stayed less than six months and only six employees remained as long as one year.
*106 One hundred and seventy-eight Homestake employees accepted employment at Anaconda, and of these more than 100 left before the end of a year. A great many Homestake employees never transferred to nonferrous metal mines but remained at the mine doing maintenance work, remained idle at home, or went into other pursuits. As early as November 1942, some of the miners who had been assigned to jobs in other mining districts began returning to Lead.
70. The properties of Homestake were useful for no other purpose than the production of gold and were adaptable to no other use than the conduct of a gold mining business.
71. The closing of the Homestake mine pursuant to Order L-208 had far-reaching and drastic repercussions in the city of Lead and the surrounding communities. The population declined sharply, more than 750 homes and apartments were left vacant and boarded up, and 36 business establishments which had served the communities were left vacant.
72. In the years immediately prior to the issuance of Order L-208, the State of South Dakota received about $1,000,000 per year, or approximately ten per cent of its annual revenues, from Homestake. The State was deprived of this source of revenue by the order closing the gold mines.
73. Without acquiring new machinery or repair parts, or supplies on which there were restrictions concerning acquisition, and with a reduced labor force, Homestake could have operated profitably during the period of closure.
74. By reason of the issuance of Order L-208 Homestake was deprived of the use and benefit of ownership of its gold-mining properties, to wit, the right to obtain gold from the ore bodies on its properties and to sell such gold.
75. No compensation has been paid to plaintiff Homestake by defendant for the closing of its mine as hereinbefore described.
FINDINGS RELATING TO PLAINTIFF CENTRAL EUREKA MINING COMPANY (A CORPORATION)
76. Central Eureka Mining Company (hereinafter referred to as Central Eureka) is a corporation organized and existing under the laws of the State of California, with its principal places of business located in Sutter Creek, *107 Amador County, California, and in San Francisco, California.
77. On October 8, 1942, Central Eureka owned approximately 641 acres of gold-bearing land located at Sutter Creek, Amador County, California. On that date the mine employed a total of 117 men, of whom 73 were classified as underground workers.
The average age of the total number of employees was 41.74 years; 74.36% of the employees were married and had an average of 2.64 dependents. These employees had resided in the community wherein the mine was located for an average of 4.26 years, and 31 of these employees owned their own homes in that community.
78. Immediately following the issuance of L-208 on October, 8, 1942, all but 64 men left the mine, that group having been retained by the company to maintain the mine until January 1943, when the National War Labor Board ordered that thereafter the company would not be authorized to employ more than 42 men in the maintenance of the mine. The record does not disclose how many of either the 64 or the 42 men were underground workers.
79. Prior to October 8,1942, Central Eureka Mining Company was engaged in the successful operation and development of its gold mining property at a profit. In the five-year period immediately preceding the issuance of L-208, the company paid $355,414.04 in Federal and State taxes. During that same period of time the company paid to its shareholders dividends in the amount of $1,182,000.
80. On October 8,1942, Central Eureka had an inventory of supplies on hand which would have enabled the mine to operate for a period of two or three years without replenishment.
81. Central Eureka’s mining equipment included on October 8,1942, machine shops, electrical shops, blacksmith shop, carpenter shop, an assay office, a complete mill from primary crush to cyanidation, its own source of timber, automotive and all other necessary equipment required to carry out mining and servicing of the underground workings and the extraction of gold from ore bodies.
*108 ■ 82. During the period October 8, 1942 to June 30, 1945, while L-208 was in effect, Central Eureka, which had been producing gold for about 80 years, could have continued to operate its mine on a satisfactory basis with a reduced force of men. It had on hand sufficient inventory for that purpose and had approximately 100,000 tons of blocked out ore (exposed on four sides) in reserve and had additionally inferred ore and probable ore in reserve which would substantially increase the 100,000 ton figure.
83. The properties of Central Eureka Mining Company were useful for no other purpose except the production of gold, and were adaptable to no use other than the conduct of a gold mining business. The mine was closed by reason of compliance with L-208.
84. Within six weeks after the issuance of Order L-208, Central Eureka applied for a serial number under P-58 for the operation of a copper-mining project at Battle Mountain, Nevada. Some mining equipment wa

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8591297. Public record. Not legal advice.