One Step in Production Control

THE discussion of production control at the Insti-tute's annual meeting was profitable in that it started some thinking. One pertinent question there raised was how the opening of new mines, whose now unneeded output would inevitably react on prices, could be postponed until the market was ready to ab-sorb their output. In transportation some restraint is being exercised on building new and unneeded fa-cilities, but in production no general solution of the problem has been offered. Yet in a special field of new development of increasing importance a quick and easy solution has been suggested. I refer to the leasing of mineral deposits on the public domain. The report of the United States Coal Commission says: "In its possession of approximately 60,000,000 acres of public coal lands the Federal Government has its own responsibility in restraining overdevelopment. The Department of the Interior, which has control of these lands under the leasing law, construes the law as giving the department no discretionary right to refuse applications for leases regularly made by qualified citizens or corporations for coal deposits on the pub-lic domain. It presumes, that the applicant believes there is a need for an additional coal mine in his local-ity and expects to find a market for the coal produced. Overdevelopment, however, is a fact in the West as well as in the East, and wherever present involves needless investment and excessive costs of operation. Plainly, the leasing law should be so amended as to give the executive department full discretion in its approval of the opening of a new coal mine on the, public domain, making that approval contingent on the showing that the new mine would serve the in-terest of the consuming public." A similar view of the Federal Government's re-sponsibility in restraining overdevelopment of its oil lands has been presented by the Federal Oil Conser-vation Board. The leasing law vests little or no dis-cretion in the Secretary of the Interior, who must grant a lease to a qualified applicant regardless of any obvious country-wide condition of surplus produc-tion. This wide-open invitation to exploit and dissi-pate the people's own oil resources could be restricted by simple legislation, although as remarked by the board, such a legislative remedy for a plain economic ailment "does not evoke popular support when its purpose is avowedly to put the brakes on development of natural resources."