forward in the new Trade Expansion Act in essentially the same form as in section 8 of the Trade Agreements Extension Act of 1958. Investigations may be initiated by request of the head of any Federal department or agency, by application of any interested party, or by the Director upon his own motion. If, as a result of an investigation, the Director is of the opinion that an impairment of national security is being threatened, he must promptly so advise the President. The President, unless he disagrees, takes necessary action to alleviate the threat. Since 1958, 17 cases have been filed or opened; of those cases 16 have been closed.

During fiscal year 1967, an investigation of imports of watches, watch movements, and parts was completed, and on January 11, 1967, a memorandum for the President was published finding no threat of impairment to the national security from such imports.

During this period, the investigation of imports of antifriction bearings and parts was terminated at the request of the petitioning industry.

The current status of these investigations is shown below:

INVESTIGATION UNDER SEC. 232 OF THE TRADE EXPANSION ACT OF 1962, FISCAL YEAR 1967

1 This case was initiated under sec. 8 of Public Law 85-686 and was carried over to be completed under sec. 232 of the Trade Expansion Act of 1962.

Buy American Act

The President has delegated to OEP the responsibility for reviewing and evaluating cases referred to it by governmental purchasing agencies under section 3(d) of Executive Order 10582. Each referral is investigated by OEP in cooperation with appropriate Federal agencies, and upon completion of the investigation, the procurement agency is advised as to whether or not national security considerations would warrant the rejection of a low foreign bid and award of the contract to a domestic producer. There were no referrals under this order during fiscal year 1967.

Investigation under Presidential Proclamation No. 3279

The oil investigation was the only one in which imports were determined to be in such quantities and under such circumstances as to threaten to impair the national security. Following this advice, the President issued Proclamation No. 3279 on March 10, 1959, initiating the mandatory oil import control program. Section 6(a) of the proclamation requires that the Director of OEP maintain a constant surveillance of imports, including prices, in relation to the national security. The monthly survey of residual fuel prices is conducted under this responsibility.

Special national security investigations are made in consultation with the Secretaries of State, Defense, Treasury, Interior, Commerce, and Labor. The Department of Justice, the General Services Administration, the Council of Economic Advisers, and others have been consulted on particular problems. One such investigation was initiated on April 17, 1967, following a review within Government which led to the conclusion that national security would not be impaired by a liberalization of the controls on the importation of finished asphalt. As a result of this earlier conclusion, the President, on April 13, 1967, amended Proclamation No. 3279 to give the Secretary of the Interior discretionary authority to place asphalt product imports into the United States and Puerto Rico under the general form of control which applies to imports of residual fuel oil into the east coast States. Under this authority, the level of other licensed product imports is unaffected. The current investigation includes asphalt imports as well as asphalt produced from imported crude and unfinished oils. The period for submissions from the public ends on July 3, 1967, and extensive material has been received from States and private industry.

Another investigation, that of residual fuel oil, was started on April 6, 1965, at the request of the Secretary of the Interior. On December 18, 1965, the Director provided the Secretary with interim advice which recommended that the residual fuel oil import level be set as high as possible for the year

beginning April 1, 1966. As a result, the Secretary modified the program to insure, “*** to the maximum extent possible under Presidential Proclamation No. 3279, as amended, that individual import allocations of residual fuel oil will be responsive to market requirements.” The consequences of the modification, which imparted flexibility to the operation of individual firms as well as to the level of imports, are being given careful attention in the context of the oil import control program.

Under its general surveillance responsibility, OEP's staff participated in interagency consideration of the place of petrochemicals in the oil import control program, certain aspects of liquefied petroleum gas availability, and the relationship of import controls to sulfur content of boiler fuels.

OTHER ACTIVITIES

Uniform standard natural gas pressure base

Discussions have been held with American Standards Association and others to have the U.S. American Standards Institute (USASI) accept the standard pressure base for natural gas which has been approved by the Bureau of the Budget for use by all Federal agencies when collecting or publishing natural gas data. A general agreement has been reached with most of those concerned that the USASI should approve this standard for statistical reporting of natural gas volumes.

Emergency communications for the petroleum and gas and power industries

OEP continued to participate with electric power and petroleum and gas industry working groups in the development of emergency communications plans for those industries. The Petroleum and Gas Industry Communications Emergency Plan (PAGICEP) has been approved for planning purposes. The Electric Power Industry Communications Emergency Plan (EPICEP) is being reexamined to insure consistency with OEP planning. Procedures have been instituted to insure that the plans are consistent with OEP planning.

The petroleum and gas industry surveyed its needs and furnished its requirements, including the locations of needed communications, to the Federal Communications Commission. Action will be taken to make certain that industry's emergency needs are met as soon as possible.

Petroleum statistics study

In December 1961, the President directed that a comprehensive petroleum study be made under the leadership of the Director of OEP. In response to the President's directive, an Interagency Petroleum Study Committee was established.

One of the Committee's recommendations was that “*** the Bureau of the Budget, in cooperation with the agencies responsible for the needed information *** develop a proposal for a coordinated program to provide the needed data."

During fiscal year 1967, OEP worked on the interagency statistical effort for which the Bureau of the Budget has assigned leadership to the Department of the Interior. This is the second stage of major undertaking to provide improved private and Government information needed for more satisfactory evaluation of all phases of petroleum policy.

Interdepartmental Energy Study

On November 11, 1966, the President released the report of the interdepartmental study of research and development activities required to meet the longterm energy needs of the Nation. The Director served on the steering committee of this undertaking which was chaired by the President's Science Adviser. OEP staff participated in the preparation of this report, as well as in the extensive work of the Energy Study Group which the steering committee had organized and whose report was published.

B. MOBILIZATION AND MANAGEMENT OF RESOURCES IN AN EMERGENCY

OEP provides leadership and coordination in the development of the organizational structure, basic systems, and operating procedures required for the effective mobilization and management of the Nation's resources, at all levels of government, under conditions of national emergency, including an enemy attack on the continental United States.

EMERGENCY MANAGEMENT OF RESOURCES

Objective

To develop and maintain a state of preparedness at Federal, State, and local levels for the effective mobilization and management of resources, both human and material, in all emergency situations.

Federal Resource Management Plans

Section 203 of Executive Order 11051 assigns to the Director of OEP responsibility for the development of an "overall emergency system for reaching central program decisions for the utilization of resources," including "the central consideration of the supply-requirements evaluations of planned programs," and "the central determination of major resource utilization programs under varied conditions of national emergency."

Section 204 of the Executive order states that "the Director shall develop policies and procedures for the coordinated application by Federal agencies, in time of emergency, of priorities, allocations and other resources control and distribution systems *** for the conduct of approved major programs."

Status

In response to this assignment, a resource mobilization plan for limited war has been developed. The plan includes a range of emergency resource management measures which could be taken within the framework of an economy undamaged by direct enemy attack. OEP has completed the development of an internal organization and functional arrangement to carry out the central resources control responsibilities (The Office of Defense Resources). Under the basic ODR concept, OEP staff and OEP executive reservists would form the nucleus of this standby emergency organization. The current OEP staff has been given standby emergency assignments to specific areas of responsibility within ODR and general indoctrination courses were developed and given to the staff as a preparedness measure. This work has been completed at both the National and field levels. The Executive Reserve goal for ODR has been raised to 300. Area briefings on the ODR concept and functions have been carried out for the Executive Reservists.

In developing the resource mobilization plan for limited war, OEP reviewed the authorities under existing statutes appropriate for meeting emergency conditions to determine what additional authorities and readiness actions might be required in an escalating situation. Some emergency measures are already authorized by existing statutes such as the Defense Production Act of 1950, as amended. Others would require congressional authorization. The plan includes a draft Defense Resources Act and implementing Executive order, as well as the basic emergency action documents necessary to implement various aspects of the plan.

While ODR would be the focal point for the central management of resources in a major emergency, the effectiveness of the mobilization effort would depend upon the Federal agencies for program execution. Thus, the Federal agencies, as provided for in existing Executive orders and in accordance with the general guidance provided in the resource mobilization plan for limited war, have developed the necessary supporting procedures and standby organizations to provide an operating capability for a limited war emergency. All resource agencies (except the newly formed Department of Transportation) have completed their assigned resource sections. These sections have been reviewed and edited by OEP and were transmitted to the participating agencies in May, 1967 for final review. This material, when completed, will be issued in the form of resource annexes to the resource mobilization plan for limited war.

A companion project is underway to develop a resource mobilization plan for nuclear war. The general policies, procedures and documents developed for the limited war plan will be used where appropriate. Additional authorities, policies, and guidance which may be needed under nuclear war conditions are being developed.

State resource management plans

Managing resources in a national emergency is primarily the responsibility of the Federal Government and, under limited war conditions, the Federal Government will perform this function. In a nuclear attack, this would continue to be the goal, and Federal efforts would be directed toward reestablishing national control as soon as possible.

However, because Federal control may become disrupted, States and localities. must be prepared to carry out Federal as well as State responsibilities for the period immediately following an attack until such time as Federal control and coordination can be reestablished.

Status

To develop a State capability to carry out this approach to emergency planning, OEP initiated a program designed to assist the States in the development of comprehensive emergency plans for the conservation and use of human and material resources located within their boundaries.

To defray the cost of marshaling the cooperative efforts of industry, labor, agriculture, government, and the general public in creating a State capability to manage resources in the national interest under emergency conditions, OEP obtained a $3 million appropriation from the Congress. These funds were used to negotiate contracts between OEP and the States for the preparation of overall State emergency resource management plans. Under the terms of the contract, task groups appointed by the Governor were to develop individual resource sections covering the following resource areas:

Federal departments and agencies having responsibility for the resource area involved are providing advice and assistance to the task groups.

As each task group completes a draft of its resource section it is submitted to OEP for review and approval. When all resource sections have been approved, the State is required to test the draft plan in accordance with procedures furnished the State by OEP. Following the test, revisions as indicated by the results of the test are made in the plan and the completed draft is resubmitted to OEP for final approval before it is printed by the State.

A total of 52 jurisdictions are participating in the contract program (48 States, Guam, Puerto Rico, the Virgin Islands, and the District of Columbia).

Some 585 task groups have been organized in which more than 6,000 leaders of labor, industry, business, agriculture and the professions are participating voluntarily in the preparation of emergency plans. Nearly 600 resource sections developed by these task groups have been evaluated to date.

During the past year OEP has reviewed and approved 15 State plans which have been published and distributed, making a total to date of 21. Acceptance letters and certificates of commendation for emergency planning committee and task group members have been forwarded to the Governors concerned. Another 12 final State plans have been approved for publication, with an additional nine undergoing final review.

ECONOMIC STABILIZATION

Objective

1. To develop and maintain a state of readiness to administer all required "direct" economic control measures involving price, wage and salary, and rent stabilization, and a system of consumer rationing in a limited war, nuclear attack, or other mobilization situation.

2. To coordinate and assist in the development of emergency monetary, credit and banking policies and programs, and to coordinate such measures with proposed "direct control" programs so as to achieve an overall, balanced state of readiness.

3. To develop economic stabilization programs designed to complement broad range recovery, production, and distribution programs.

Direct controls for limited war

Status

Major emphasis during the past fiscal year was directed toward the development of plans and programs designed to meet the requirements of nonnuclear contingencies.

With the considerable help of major Federal agencies having corollary interest and responsibilities, OEP has developed drafts of standby legislation which,

subject to congressional approval, would be required in order to institute emergency economic stabilization measures in any emergency short of nuclear attack. Several separate legislative approaches have been developed to provide maximum flexibility to respond to various economic contingencies and levels of contról requirements.

In conjunction with the same Federal agencies, OEP is now in the process of developing standby orders which would be needed to implement such emergency economic stabilization programs.

At the same time, OEP has substantially increased its recruitment of executive reservist-consultants in order to provide industry expertise to insure program compatibility with current industry operations. The initial efforts of these individuals are directed toward the development of basic direct control regulations which would involve the particular industries they represent.

While good progress has been made, much remains to be done before an optimum state of readiness can be achieved in the development of standby regulations in "boilerplate" form for the more basic industries.

Direct Controls for Nuclear Attack

Substantial progress has been made with respect to the Nation's state of readiness to respond to nuclear attack. Initial reliance is placed upon State, Territorial and local governments to administer the direct controls programs in this contingency. Currently, 48 States and four Territories are engaged in developing the required organizational and operational capability to meet the threat of nuclear attack. Of this number, 33 States have submitted acceptable economic stabilization plans and 19 are in process of final clearance. The next step involves the development of an equivalent capability to carry out these programs at State-designated jurisdictional levels within the State. Comprehensive guidance material, including kits of "Emergency Operating Instructions" and reproduction proofs to be used in printing rationing evidence, have been made available to State government for use by operating level authorities. While responsibility for the overall emergency economic stabilization program is vested in OEP, activities with respect to local level planning are being closely coordinated with the Department of Defense, Office of Civil Defense. To date, a substantial number of States have initiated plans to meet with local officials for the purpose of developing the required state of readiness.

Organizationl Preparedness

Substantial progress has been made toward completing the organizational structure and functional statements for an emergency Economic Stabilization Agency and its constituent agencies responsible for administering price and rent stabilization and consumer rationing. With the cooperation of the Civil Service Commission, OEP obtained the services of two former Civil Service Commission officials and two other Federal personnel and management experts to assist in development of the organization structure at the field level. Specific functional statements, tentative grade structures, and detailed position descriptions are being prepared. They will serve to expedite the identification of the number and type of Federal personnel who could be immediately, but temporarily, assigned to staff the national office of the emergency Economic Stabilization Agency and the national and field offices of its constituent agencies.

Indirect Controls

OEP's responsibility in the area of indirect economic controls (monetary, banking, and credit measures) is limited to broad policy coordination and assistance to the major Federal financial agencies: Treasury, Federal Reserve System, and the Federal Home Loan Bank Board. These agencies have prepared and prepositioned throughout the banking system various documents setting forth emergency financial, monetary, and credit policies and programs. Preparedness planning in this area in fiscal year 1968 will concentrate on: 1. In conjunction with the Department of the Treasury, Federal Reserve Board and Federal Home Loan Bank Board, studying various economic control mixes which might be employed to arrest inflation directly or indirectly attributable to varying mobilization contingencies.

2. Continuing efforts to develop comprehensive monetary and credit plans of the 18 Federal departments and agencies which have responsibilities in the financial area, dependent upon the policies, plans, and capabilities of the Department of the Treasury.