Subsidies for Mine Production

DIRECT subsidies for mine production in this country began as an outgrowth of wartime 'price regulation. The price-fixing authorities realized that the volume of production to be required from domestic copper, lead, and zinc mines would invoke costs of production considerably higher than the established ceiling prices. Accordingly, beginning Feb. 1, 1942 the Premium Price Plan was set up, which undertook to pay premiums to mines for production in excess of quota, of 5¢ per lb of copper and 2Y4¢ per lb of zinc or lead. Quotas, except for small mines, were initially established at the average rate of production in 1941, but were later reduced arbitrarily on an individual basis. Subsequently, additional "B" premiums were set for lead and zinc of 2Y40 per lb and a further "C" zinc premium of 2%¢. Additional copper premiums were negotiated on an individual basis, mainly with small mines. Quotas under each of these successive categories were the production obtained at the next lower premium level. In other words, under ceiling prices of 12¢ for copper, 6,14¢ for lead, and 83¢ for zinc, it was possible for high-cost operations to receive prices plus premiums of 17¢ or more for copper, 12¢ for lead, and 16% 0 for zinc on a portion of their production. On the other hand, some of the larger operators received only slight premiums and in at least one instance none at all. The average price plus premium for copper was 12.25¢ in 1942 and rose to 13.65¢ in 1945. That for lead was 6.99¢ in 1942 and 8.73¢ in 1945, and for zinc it was 9.06¢ in 1942 and 11.200 in 1945.