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By WILLIAM BEECHING

Saskatchewan's largely U.S.-
Owned potash industry is in
trouble before it has managed
to really get out of the ground.
How deep and for how long is
difficult to estimate on the basis
of the sparse information being
given out by officials of the pro-
vincial government. :

One thing is clear: Saskatche-
wan’s economy is in trouble not-
withstanding a special pre-ses-
sion ball and performance of the
Regina Symphony Orchestra. All
the fun and merrymaking cannot
Obscure the facts of life.

The developing crisis was al-
ready apparent in 1967 when

m told that five an

illion acres of pot-
yperty in this pro- |
ince and in the wostern
fringes of Manitoba contain |
of 50 billion tons.

es of the wor are.
r 103 billion tons,

is Russia <“s on
ons, this .akes-

es) and

Nelson C. White, president of
International Minerals and Che-
mical Corporation of Skokie, Ill.,
U.S.A., said:

“. . . The rapid expansion of

Canadian production,
with existing world production,
has resulted in oversupply. We
estimate that su,ply outstrips
demand by about 10 percent. . .
This overcapacity and lack of
‘definite information on its mag-
nitude has created, as you might
expect, a fairly high level of con-

fusion and change, with prices .

deteriorating as a result. .. In
the United States .. . 0: of the
companies has enne. ed its

plans to suspend U.S. op2rations
when its Canadian plant goes
on-steam. .

.’ (The company

at alt times?

coupled:

has now closed down).

The problems broke out in the
House of Commons recently. J.
W. Pickersgill said that a 25 per-
cent cut in world potash prices
was the real problem, not freight
rate increases. He was anSwer-
ing Reynold Rapp (PC-Hum-
boldt-Melfort-Tisdale) who had
said in a letter to him that he
thought the Alwinsal mine
(French and German capital) at
Lanigan might be in a better
position than most U.S.-backed
companies to sell potash to
Asian and Socialist countries.

Then Finance Minister Sharp
was quoted as having said he
had discussed the slowdown in

potash production with Premier.

Thatcher. Alvin Hamilton (PC)
raised the problem of trade in
potash with Socialist countries
and U.S. ownership.

All potash mines now in pro-
duction are U.S.-owned. The
U.S. government has taken pains
to make it crystal clear that any
sales directly or indirectly to so-
cialist countries would be con-
sidered illegal.

In fact, a Winnipeg lawyer is
reported to have proposed set-
ting up a marketing firm to buy
and market potash. All the fer-
tilizer purchased from U.S.-own-
ed and non U.S.-owned mines
would be mixed and “who could
tell what potash came from
where?”

In answer, Mrs.

Margaret

Schwartz of the U.S. treasury’s.

foreign assets control branch, is
reported to have said “any trans-
action for the purpose of avoid-
ing or evading the act is illegal.”
She considered co-mingling of
product to simply be a device
to evade U.S. laws, which would
be considered illegal.

The Saskatchewan govern-
ment has now announced that it
will appoint a committee to
make a comprehensive study of
the economic outlook of Sas-
katchewan’s 10 potash com-
panies. In making the announce-
ment, Saskatchewan mineral re-
sources minister Cameron (Libe-
ral) stated that for the 1970’s a
world surplus of potash would

Street scene in Calcutta. Two-thirds of the world’s people go to
bed hungry, why shouldn't food production run at full capacity

mean lower prices and keen
competition. However, he
thought Saskatchewan potash
held an edge because of its huge
reserves, its high quality ore,
and low production costs, an
argument almost identical with
the one used when farmers were
stock-piling high quality wheat
on the ground.

He defended the U.S.A., by
saying “China has not sought to
purchase Canadian potash. There
has been no opportunity to as-
sess what attitude the American
government would take.” If

proven even more difficult to pin
down. Obviously the first stages
of employment set at 6,000 per-

manent jobs in potash have no--

where been reached. True, it has
created some non-permanent de-
mand in construction. It is ex-
pected that the average employ-

ment will be 340-400 per mine

when they are in full produc-
tion.

Statistics indicate that miners,
quarrymen and related workers
in the entire province number
1,718, and draftsmen, production
and related workers are 4,614

true, one wonders why everyone
is talking about it. And what
businessman fails to go after a
market if it is there?

In any case, said Mr. Came-
ron, Saskatchewan potash would
not be affected by American
policy since non-U.S. controlled
companies could supply potash
to China: and similar markets.
(No non U.S.-controlled mine is
yet in production).

What has potash development
done so far for Saskatchewan
taxpayers? 1967 figures have not
been released. In 1966 the total
value of all mineral production
in the province was $350 mil-
lion, out of which approxima-
tely $75 million was potash.
Total’: revenues from all mine-
rals in terms of rentals, road
allowance levies, bonus bids,
royalties, etc. amounted to $48
million, or approximately 10 per-
cent of production value. Royal-

ties alone amount to $18 million

or about 5 percent of production.

On the other hand liquor tax-
es motor vehicles taxes, the
gasoline tax and the education
and health tax took a $99 mil-
lion bite out of the family bud-

gets. : :
T. M. Ware, chairman of the
board, International Minerals

and Chemical Corporation, of

the U.S.A. stated that the U.S.

companies came to Saskatche-
wan because they expected a
good return on their investment,
and were getting about a 10 per-
cent return annually. This means
that the entire capital invest-
ment could.be recouped within
a single decade.

It was claimed that roughly

~ 30,000 jobs, either through direct

engagement or through the gene-
ration. of secondary industries,
etc., would be created. This has

which includes coal, petroleum,

the base metals, uranium, etc.
Since Premier Thatcher claims

to be the answer to socialism, it

is worthwhile quoting The
Chosen One at the 1965 Potash
Show:

“In recent months a great
deal has been written and said
about the development of the
potash industry. . . Saskatche-
wan possesses about one-half of
of the world’s total estimated
potash reserves. . . What about
the future? Do we face over-
production? There is every rea-
son to believe that the present
trend of world potash consump-
tion will continue upward at an
increasing rate. Our officials be-
lieve that within the next de-
cade about 8,000 new jobs will
have been provided directly by
the potash industry. Indirectly,
the mines will have made pos-
sible another 20,000 to 25,000
jobs in other areas of the eco-
nomy . . . we are carrying out
in Saskatchewan what I like to
think is an “experiment in Pri-
vate Enterprise. It is our task
to prove in the next few years
that the private enterprise sys-
tem can do more for our people
than socialism. . .”

The Saskatchewan Committee
of the Communist Party, in a
letter to Premier Thatcher sta-
ted: ~

“In September, 1966, I wrote
you about a Canadian Press
news story which stated that the
parliamentary press correspon-
dent of the Chinese People’s Re-
public in Canada had said that
China might be interested. in
purchasing Canadian potash.

“You answered, stating that
you could ‘see no reason why
we would not sell potash’ to
China, and that if we had any
specific information, you would

be pleased to help with the ne-
gotiations. We did not have any
other information.

“However, there is a new turn
of events, confirmed by a press

. Story in the Toronto Daily Star,

February 10, 1968, which says in
part, to Washington, its simple:
Canada can’t sell any potash at
all to Red China. That was the
word yesterday from a section
of the U.S. treasury department:
Sorry, but it would break U.S.
law. There is a potentially large
market in Red China, contend
some observers. In fact, the U.S.-
owned companies have even
mentioned its possibilities —
wistfully perhaps.

“This is part of the cost-price
we Canadians pay for U.S. capi-
tal ownership in Canada, an as-
pect to which the starry-eyed
advocates of more  uncondi-
tional U.S. investment rarely
refer. It boils down to the fact
that Canadian potash, owned by
an American company, cannot
be sold to a Canadian customer,
even when mixed with other
products, who already buys Can-
adian wheat, because the U.S.
owner doesn’t like the political
complexion of the customer.

“This will certainly limit em-
ployment for Saskatchewan
workers, and will possibly make
impossible the total employment
it was claimed potash develop-
ment would achieve.

“As Canadians we respect the
right of the USA to trade with
whomever it wishes. But Can-
adian wheat sales to the Chinese
People’s Republic have had a
stimulating economic effect, as
well as a positive effect in cre-
ating a better political climate
and in aiding Canada’s balance
of payments deficit. .

“May I suggest that your gov-
ernment enact legislation to
compel by law all American

owned subsidiaries in Saskatch-
ewan to trade with all Canadian
customers, regardless of whe-
ther the United States does busi-
ness with them or not. Such a
law might have saved the flour
mill in Moose Jaw.

“Secondly, we consider it

both urgent and essential that .

the provincial government, along
with the Department of Trade
and Commerce at Ottawa, act-
ively explores the possibility of
markets for potash in the Chi-
nese People’s Republic, along
with any other potential mar-
kets.”

MARCH 22, 1968—PACIFIC TRIBUNE—Page 7