Fiscal year 1954, MSA authorizations by area of source, July 1-31, 1953 458 Fluorspar_. 495 Functions of the emergency procurement services_. 30 General conditions for strategic and control materials and services 236 Granby Consolidated Mining, Smelting & Refining Co. of Canada__ 244 170 Howe Sound Co 489 Hudson Bay Mining & Smelting Co., Ltd--- 327 Impossibility to get critical materials from abroad in time of war 2 Present and proposed Air Force strength.... 569 tion-Cumulative ECA and mutual defense assistance program, 456 Procurement authorizations by commodity group and area of 457 Purchase for foreign-operations administration_. 31 Purchases for resale by Emergency Procurement Service---. Appendix B.- Annual report of financial condition and operations, defense materials procurement agency, General Services Administration, June 608 638 657 Appendix D.-Harry Dexter White, papers relating to strategical and Appendix E.-Federal Property and Administrative Services Act of 1949, Appendix F.-Sources of strategic and critical materials. Appendix G.-Letter from Gen. Dale O. Smith, Maxwell Air Force Base, Appendix I.-Administrative policy on stockpile, March 26, 1954- 662 796 798 799 814 STOCKPILE AND ACCESSIBILITY OF STRATEGIC AND CRITICAL MATERIALS TO THE UNITED STATES IN TIME OF WAR WEDNESDAY, SEPTEMBER 23, 1953 UNITED STATES SENATE, COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, Seattle, Wash. The committee met at 9:15 a. m., pursuant to adjournment, in room 414, United States Courthouse, Seattle, Wash., Senator George W. Malone (chairman) presiding. Present: Jerome Alderman, chief counsel for the subcommittee, George Holderer, subcommittee staff engineer, Thomas F. Flynn, Jr., subcommittee assistant counsel, and Richard G. Sinclair, subcommittee accountant. The CHAIRMAN. The meeting will be in order. This hearing has been called for the purpose of carrying out Senate Resolution 143, 1st session, 83d Congress. (See appendix.) This resolution directs the Interior and Insular Affairs Committee to conduct an investigation and to study the accessibility of critical raw materials to the United States during time of war, also to assure the availability of supplies of such critical raw materials adequate for the expanding economy and the security of the United States. At this point, I would like to place in the record a list of strategic and control materials. It will appear in the appendix at page 796. STOCKPILE ACT Public Law 520 which is popularly known as the Stockpile Act was passed by Congress on July 23, 1946. The intent of the Congress in the enactment of this legislation was to build up a reserve of strategic and critical materials sufficient to tide this country over in case of an emergency. This act particularly provided "that the natural resources of the United States in certain strategic and critical materials being deficient or insufficiently developed to supply the industrial, military, and other needs of the country for common defense, that it is the policy of Congress and the purpose and intent of this act to provide for the acquisition and retention of stocks of these materials, and to encourage the conservation and development of sources of these materials within the United States, and thereby decrease and prevent wherever possible the dangerous and costly dependence of the United States upon foreign nations for the supplies of these materials in the time of national emergency. "BUY AMERICAN ACT" CIRCUMVENTION The act further provided that we "Buy American." My attention has been called to the fact that despite the congressional mandate to buy American it was circumvented by edict of President Truman when he signed the Stockpile Act. When President Truman approved the Stockpile Act he issued a statement in which he said that it was only because of the overriding importance of the act that he was able to overcome his reluctance in signing a bill with the "Buy American" act provision. He pointed out that there can be exceptions to the rule in "Buy American" and he enunciated a policy to circumvent the "Buy American Act" in the following words: "This provision clearly indicates that the stockpiling program should not be used as a means of general subsidization to those domestic producers who otherwise could not compete successfully with other domestic or foreign producers." Further that "It is the policy of this Government to work for international action to reduce trade barriers." ECONOMIC APPROACH TO WEAKEN NATION The committee intends to examine into the background and the origin of the policy followed by President Truman as well as to study the effect that it had on our security and development of the domestic sources for strategic materials. I am certain that President Truman was not aware that his policy originated in the minds of people who did not have the best interests of the United States at heart. There have been two approaches to defeat our Nation. One is political which is being investigated by several committees in the House and the Senate, and the second is economic. This has been the more subtle, insidious, and effective effort. Studies made by the committee staff indicate that certain known subversive elements in the Government, in high places in the Treasury Department and other agencies, originated the erroneous theory that the United States is a have-not nation. It was their plan and project to make the United States dependent upon foreign sources of supply which in time of war would fail us and make us vulnerable and defenseless. Informed experts have stated that it would take our domestic raw material sources 3 to 5 years to come into production, and by that time the war may well be lost. These elements have succeeded in planting in the minds of most of the people in the United States the widespread publicity and with the aid and assistance of well-meaning ill-informed persons that our natural resources have been exhausted, that we must obtain our strategic materials from across the oceans, that we must aid and assist foreign exploration and expansion of the production of raw materials abroad, that we should discourage domestic production and exploration for new ore bodies and sources of strategic and critical materials. IMPOSSIBILITY TO GET CRITICAL MATERIALS FROM ABROAD IN TIME OF WAR Well-known and authoritative experts agree that in time of war it will be almost impossible, or at the best so costly in ships and men as to make it prohibitive, to ship strategic, critical, and essential materials for war across either major ocean from Europe, the Mediterranean, Africa, the Far and Near East, and Australia. Well-known strategists and tacticians contend that sources for strategic materials in these areas will be denied to us because they are within easy bombing range of our principal potential enemy, the U. S. S. R., and its satel lites. Another consideration is that some nations who are presently the sources of our supplies of critical materials either through fear or political reasons may decide to curb our supply of these vital materials. STOCKPILE OPERATIONS Staff studies have indicated to the committee that there has been a multiplicity of agencies engaged in the stockpiling operations and in all approximately 54 agencies were involved in some way in stockpiling activities. It is my understanding that the Defense Materials Procurement Agency and the Emergency Procurement Service of the General Services Administration were principally responsible for the development and expansion of strategic and critical material reserves and the procurement and storage of material for stockpile. This committee will study stockpile levels and what obstacles have been encountered by the purchasing people and how they have been frustrated in reaching the objective and the general efficiency of the operation. I have been disturbed by reports of operations of the International Materials Conference which have had a serious effect on our stockpiling and I am particularly concerned over reports of diversions and withdrawals from the stockpile. I have heard that allocations to the stockpile were reduced by the diversion of cobalt, copper, fluorspar, nickel, tungsten, and zinc valued at $149 million. STOCKPILE INTERFERENCE BY INTERNATIONAL MATERIALS CONFERENCE A very significant article on this point appeared in the Mining and Engineering Journal of February 1952. It states that the International Materials Conference Committee on copper, lead, and zinc have recommended against stockpiling during the first quarter of 1952, because of current demands for defense needs. If these hearings develop that IMC did interfere in stockpile operations, then we will hold further and separate hearings on the International Materials Conference. It is the intention of the chairman of this committee to go into these matters and to fully investigate and study the accessibility of critical raw materials to the United States during the time of war and to determine what has been done and what remains to be done in the development and expansion of critical raw materials in those areas that will remain accessible in the time of an emergency. The CHAIRMAN. Now, we have today with us, the Honorable Tom Martin, Members of Congress, who has wide experience in legislative mattters connected with industry and foreign trade. Congressman Martin, will you give us the benefit of your statement this morning? be Representative MARTIN. Thank you very much, Senator, I would very pleased to. The CHAIRMAN. Tom, would you identify yourself for the benefit of the record? In addition I want to say that we are very appreciative of having you here this morning. We look forward to cooperating with you throughout the months ahead in arriving at a determination of the availability of critical materials to the United States in time of war. The committee is directed to ascertain the availability of these critical materials to the United States not only in time of war, but |