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I have certain statistics which show the imports to this country, and our dependency on them. The figures in it are based upon statistics furnished by the United States Steel Export Corp. In particular, I would like to call the committee's attention to the last part of this chart which deals with petroleum.

The CHAIRMAN. Let me interrupt, Mr. Secretary. Would it be the responsibility of the National Resources Board to seek further development of, say, manganese in this country? In other words, we have lowgrade fields of manganese in this country. What we need is a new method that will develop those fields so that we can have our own stock piles in this country and not have to depend upon these foreign sources entirely.

Mr. KENNEY. The Resources Board is given the specific authority, in section 203 (c) to establish policies for establishing adequate reserves of strategic and critical material, and for the conservation of these resources. And the Munitions Board is charged with the responsibility of putting those policies into effect.

The CHAIRMAN. Well, do you think, right there, Mr. Kenney, that we should have in there the responsibility for seeing that domestic sources of minerals of all kinds should be developed, and new methods sought for their economical processing?

Mr. KENNEY. I would thing that that was implicit in the direction given in subparagraph (5) for establishing adequate reserves of strategic and critical materials, and for the conservation of these reserves.

The CHAIRMAN. Conservation, and “development”; we might put that word in there.

Mr. Secretary, I believe this material furnished by your Board on Strategic Materials could all appear in the record here. Of course, the maps might not, but there seems to be a lot of information here which would be helpful.

So, without objection, I will have these statements included as to the printed material, in the record, if there is no objection.

(The material referred to is as follows:) Prewar conditions are fairly represented by the annual average of the years from 1936 to 1939, both included. Data for the year 1938 also is shown.

During this period our annual average national income amounted to 67.8 (64 2 in 1938) billion dollars and our annual average imports for consumption totalled 2.4 (1.9 in 1938) billion dollars, divided by economic classes of commodities as follows:

Percent of total imports

Average,
1936-39

Year 1938

Crude materials.
Semimanufactures.
Fipished manufactures.
Manufactured foodstuffs.
Crude foodstuffs.

31.3
20.6
19.4
15.0
13.5

29.5 19.7 21.4 15.9 13. 3

To consider only two of the important groups of commodities for direct consumer use, imports of coffee, cocoa, and tea were 193.9 (176.8 in 1938) millions of dollars, and of sugar and related products, 158.8 (141.7 in 1938) millions of dollars.

The principal goods for producer use participated in the total imports of the year in the following amounts:

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In the manufacture of steels, some 40 imported commodities produced by 57 different countries are used.

According to the most recent estimates, the national income of the year 1946 totaled $165,000,000,000, or more than 2.4 times the average value of the prewar period. Consequently, even disregarding the influence that the advancement of technology might have had on our dependence on foreign imports, it seems reasonable to assume that the essential imported materials required to maintain our industrial economy in fully productive operation would amount to almost three times the average annual values for the prewar period.

The various areas of the world contributed to the total average imports to the United States in the following measure:

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Charts of imports have been developed for a number of commodities necessary to maintain our economic well-being. The year 1938 was used, for that year witnessed the smallest amount of total imports since 1934.

Manganese.—Manganese used per ton of steel made varied from a low of 12.5 pounds to a high of 15.1 pounds, averaging 14.3 pounds. We depend on imports for 97 percent of our needs.

Tungsten.This mineral is essential as an alloy for high-speed tool steels. This alloy steel retains its hardness at very high temperatures. As the filament in an electric-light bulb, it has no substitute. Before the war we imported 60 percent of our requirements.

Chromium.—Chromium is used as an alloy in the making of stainless and heat- and acid-resisting steel. These steels are vital to the oil and chemical industries. The United States depends almost entirely on imports for this essential mineral.

Tin.—Before and during the war, the United States consumed 45 percent of world production. All was imported.

Baurite.-Domestic bauxite has a low alumina content and is generally blended with higher-grade imported ore. Prior to the war imports were about 53 percent of United States consumption.

Copper.-While the United States still leads in the production, its dominant position in world markets is steadily declining. At present copper is in such short supply that Congress is expected to remove or reduce the tariff on copper for a stated period.

Lead.-Prior to the war we imported about 3 percent of our lead requirements. Increased use of lead will undoubtedly make for increased imports. During the war the United States, while producing 27 percent of world output, consumed 50 percent.

Zinc:-Prior to the war the United States depended on imports for 9 percent of requirements. During the war, while we produced 40 percent of world output, we consumed 50 percent.

Vegetable oils.-Almost all United States requirements for coconut, olive, palm, and tung oil are imported. Some of these oils are edible, others are used in manufacture of soap, varnish, paints, etc., and have other industrial uses.

Coffee.—The United States per capita consumption of coffee increased from the 1921-25 average of 11.7 pounds to the 1911-43 average of 15.4 pounds. All is imported.

Fibers.--Fibers such as manila, sisal, jute, henequen are largely imported. During the war when supplies were cut off at the source, some satisfactory substitutes were developed.

Wool.Domestic wool production is largely confined to the apparel grades. All other wool is imported. In the prewar period approximately 35 percent of total requirements were imported.

Rubber.-All natural rubber prior to the war was imported. Rubber denied to us at its source early in the war caused us to develop an industry, at great cost and much delay, to manufacture it synthetically. Needs for natural rubber still remain.

Wood pulp and newsprint.--Imports of wood pulp account for approximately 23 percent of consumption; in newsprint, imports are almost 75 percent.

Leather.-Imports furnish approximately 20 percent of United States requirements of cattle hides, about 50 percent sheep and lamb skins, and almost 100 percent of goat and kid skins,

Sugar.--Since 1930 domestic sugar production has varied from a low of 22 percent to a high of 35.8 percent of consumption. The rest had to be shipped to the continental United States from either our overseas possessions or from foreign countries.

Petroleum.--The known proven reserves of the Persian Gulf area are accepted at 15,700,000,000 barrels. Competent geologists predict that when transportation and equipment are available for additional drilling programs that they expect to increase the known reserves by at least 50 percent. This would estab lish this area as the world's greatest potential source for crude oil.

Coal as a source of energy in Europe can no longer be depended upon; consequently, a shift to oil is vital.

The larger producers in this area are planning to make available to Europe in excess of 1,000,000 barrels of oil per day by 1950.

The now known proven petroleum reserves excluding the Persian Gulf area are in billions of barrels as follows: United States, 20; Latin America, 6.7; U. S. S. R., 5.9; the Far East, 1.1; all of Europe, 0.6.

Platinum.--About 84 percent of our prewar consumption was supplied by imports. Prewar use was primarily in jewelry making, while wartime use was largely in the electrical industry.

Gold and silrer.-Charts on these two metals are included because of their importance upon our, and the world's, monetary policies.

Mr. KENNEY. I think everyone is aware of the statement which has been so frequently made, and which is so true, that we floated to victory in two world wars on a sea of oil. I think very few people realize the extent of the petroleum reserves that have been developed in the Persian Gulf area and how close they are to Europe.

For many centuries coal has been the source of energy in Europe, and if Europe becomes an economy of oil as distinguished from an economy of coal, I think that presents a much different problem to this country in planning our own industrial mobilization.

So therefore it is most important that we have a board which is responsible for maintaining a stock pile of essential resources and has the information with respect to the manufacturing efficiency and economy of other countries, and knows the sources and quantities of materials and where they can be obtained.

In my opinion, the formation of a Resources Board of the character and with the authority contemplated in S. 758 will do much to assure the existence of productive capacity and materials for the Military Establishment.

For the first time, by legislative action, all phases of American life are integrated into our military planning:

The CHAIRMAN. The editorial which we placed in the record at the start of the hearings. this morning gives force to the statements you have made here right now, and calls the committee's attention to the necessity for establishing these boards.

Mr. KENNEY. I think the creation of the Resources Board is one of the most important things that this bill does.

The CHAIRMAN. You may proceed.

Mr. KENNEY. In further amplification of my explanation of the difference between the functions of the Munitions Board and the Resources Board, I want to emphasize that the Munitions Board is an operating organization and in time of peace should do a large part of the work for the Resources Board. It carries out the program for stock piling of strategic materials. The plan for industrial mobilization must commence with its military aspects. Thus, the Munitions Board at an operating level formulates the plans and conducts the studies which become the basis for operation in time of emergency.

The Resources Board appraises the impact of these plans and studies on the civilian economy, and has the responsibility of integrating into the civilian economy the military aspects of these plans.

Upon the occurrence of an emergency, the wartime organization of the Resources Board should come into active being to put the plans into effect.

Specifically, I feel that the Munitions Board should perform certain duties for the Resources Board in time of peace:

(1) Make studies, collect data, and make recommendations as to industrial policies and programs, and perform all techincal and statistical staff functions and duties required by the National Security Resources Board in the development of a National Industrial Mobilization Plan;

(2) Collect and maintain information relating to the actual and potential manpower, resources, and production facilities of the Nation;

(3) Develop and recommend educational programs designed to provide an adequate supply of trained personnel to meet the industrial needs of the Nation in an emergency;

(4) Assemble for the consideration of the National Security Resources Board material and personnel requirements of the services as these are developed from directives of the Joint Chiefs of Staff;

(5) Assemble for the consideration of the National Security Resources Board the material and personnel requirements of the civil economy in an emergency as this data is developed by Federal agencies and other sources;

(6) Delineate for the consideration of the National Security Resources Board overages and shortcomings of national industry in respect to (5) and (6), with recommendations on the feasibility of meeting demand, the assignment of relative priority, and suggested correction of deficiency.

I would like to make this point before I conclude, with respect to the Resources Board and the Munitions Board. I think that except when the Resources Board is an active operating organization, it would be desirable to have the same individual serve as the chairman of both boards. In this way, I feel that the complementary character of the board to each other can be assured.

In conclusion, I wish to emphasize again my support of the National Security Act of 1947, and I also want to call to the attention of the committee the statement that was made by both Secretary Forrestal and Secretary Patterson, to the effect that this bill represents a compromise and a settlement of divergent views.

I want to express the hope that the committee in its consideration will not make too many amendments. Because once we start amending in one place, it might have a tendency to throw out of balance the settlement of the different conflicting views.

Senator ROBERTSON. Would you object to an amendment specifying the duties of the Marine Corps?

Mr. KENNEY. I don't think it is necessary, Senator Robertson. The sanctity of the Marine Corps is preserved in the bill; and I, for one, have no worry about their continued existence.

As I said, a lot of people have tried to eliminate the Marine Corps, including the Japs, and nobody has been successful yet.

Senator ROBERTSON. Of course, we did not give the Japs congressional authority to do so.

Mr. KENNEY. I think that S. 758 provides an orderly process for an efficient reorganization of our military establishment, and assures a sound foundation for integrated military, foreign relations, industrial, and economic organizations.

Senator SALTONSTALL. Mr. Chairman, may I ask just one question, which seems to me to complete the statement of Mr. Kenney?

The CHAIRM IN. Senator Saltonstall.

Senator SALTONSTALL. You say on page 10 that it took us almost 4 years to reach the zenith of our productive capacity. What was that productive capacity, and how much of it went into the military? Do you recall ?

Mr. KENNEY. In 1944 our manufacturing production reached a fig. ure of $130,000,000,000 of which 57.6 billion, or 44 percent, represented military production.

Senator ROBERTSON. Mr. Chairman, following my question regarding the Marine Corps, I would ask consent to place in the record an article by David Lawrence, headed “Move to undermine Marine Corps is seen-Armed forces merger bill could end organization."

The CHAIRMAN. That will appear in the record at this point. (The article referred to is as follows :)

MOVE TO UNDERMINE MARINE CORPS IS SEEN

ARMED FORCES MERGER BILL COULD END ORGANIZATION

(By David Lawrence) The Marine Corps is again fighting for its life. Despite the wonderful record made by the Marines in World Wars I and II and the sacrifices made by its officers and men in some of the toughest fighting that troops have ever faced, a program of legislative sabotage is under way to undermine the future of the Marine Corps.

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