terms of the shapes and sizes produced at the mills with estimates of supply prepared by the material divisions of NPA and other agencies, on the same breakdown basis, the same mill and shape detail.

After we get that sort of supply-and-demand balance sheet-I am deviating from my statement slightly, Mr. Regan, to make this a little more informal, if I may, but the general sense of it is all here as originally prepared. When we look at those supply-and-demand balance sheets, you might call them, we see areas of unbalance and on the demand side that points to the necessity of possible downward adjustments in the programs that the various agencies would like to see supported and on the supply side it calls for review of possible plans for the expansion of resources.

I might add there, as a slight modification of the straight expansion of our resources, that sometimes it points to a shift in product mix. Some of our resources have some flexibility and the impact of the military program may point to producing more structural shapes and plates, for example, rather than sheet and strip in the case of steel, for example.

In addition to the appraisal of supply-demand balances for steel, copper, and aluminum, members of my staff, in cooperation with the staffs of other agencies, are assembling estimates of supply and requirements for a number of other materials and fabricated products, as well as for general industrial resources.

Problems in determining program requirements: You asked me to indicate some of the problems involved in this job. While there are a great many of them, I shall only stress a couple of them.

PROBLEMS IN DETERMINING PROGRAM REQUIREMENTS

The first centers in the levels of military programs, general economic activity, stockpiling, and civilian consumption which are used as the basis for calculating programs and requirements. The size and composition of the military programs, for example, are based upon the strategic plans of the National Security Council and the Joint Chiefs of Staff and the appropriations made by Congress. But they are in the end affected, I suppose, as much as anything else by the appropriations made in Congress.

The size and composition of the military program in turn affect requirements, in quantity and time periods, for petroleum, power, transportation, and other resources. Obviously, none of these programs is stable. As they change, requirements must be recalculated quantitywise and timewise, and new resource requirements balances must be drawn off.

In this connection, the problems encountered in firming up military requirements have made it difficult to establish a sound basis for the determination of program requirements in many other areas which depend directly or indirectly on military procurement schedules.

The second general type of problem is statistical in character. After all, we have to have sound techniques or we should have sound techniques to translate end-products requirements into material and product requirements. Inevitably, peacetime statistical compilations are not adequate for administering a defense production program and these deficiencies cannot be overcome quickly. As a stop-gap, historical data, bills of material, interindustry relationships, and other

techniques can all contribute to solving the new problems, but they leave many statistical gaps.

That is why we had to start from scratch in getting some of this material pulled together.

As a result, even when programs have been determined, their conversion into basic materials for the purpose of calculating supplydemand balances requires painstaking and time-consuming work by hundreds of specialists in all cooperating agencies. Problems of this character have made it difficult to firm up supply-demand balances.

MATERIALS FOR WHICH REQUIREMENTS HAVE BEEN DETERMINED

You asked that we state what materials we have requirements on in some reasonably adequate shape. It should be observed that for current and long-range purposes it is necessary to develop material requirements on two bases. In the near term, the needs for defense, defense-supporting, and full civilian consumption are computed. Such data furnish the goal for carrying on defense activities plus a healthy civilian economy.

Alternatively-and this seems to me to be the important check point and is, as a matter of fact, the one we have used as the first check point-we should anticipate requirements under conditions of all-out mobilization, with a restricted type of economy such as you would assume under full war conditions. Requirements on both of these bases have been fairly well developed for iron and steel, copper, and aluminum and magnesium.

In addition, requirements under conditions of all-out mobilization have been computed for the materials listed below. For those marked with an asterisk, current demand already exceeds available supply. In the latter connection, computations of total requirements for defense, defense-supporting, and full civilian consumption are now in course of preparation, for the shorter-range view as opposed to the allout-war view:

USES MADE OF REQUIREMENTS DATA COMPILED BY DPA

I would like to answer a further question in your request by indicating that these data are used by my own office in the formulation of program determinations. I can elaborate on that term a little bit if you wish. They are also used by both DPA and the NPA organizations in determining policy in the establishment of limitation and allocation measures.

DPA, DMA-Dr. Boyd's group-and other agencies use these figures in the determination of objectives for resources expansions and for approval of tax-amortization applications in connection therewith. The Munitions Board, General Services Administration, and other

agencies concerned with stockpiling will also use this sort of authorization as a guidepost to their activities.

The DPA organization, both Mr. Gibson's shop as well as my own, and the Office of International Trade and the Economic Cooperation Administration are interested in this sort of thing because it has a bearing on the amounts of materials that should be made available for export.

I trust that gives at least the central core of the kind of information you wanted to get from me.

Mr. REGAN. I notice on your list here of metals, following your asterisk, that you did not include manganese. Is the supply of manganese sufficient to take care of our immediate requirements?

DISCUSSION OF PLANNING REQUIREMENTS PROGRAM

Mr. WAMPLER. One of the things that is a little confusing on this list, Mr. Regan, is that, in talking about current supply and demand, we got some extraordinary demands thrown in through the stockpiling plan and through some of the pipeline build-up and advance buying, I might even call it, of the military contractors.

From a practical standpoint, just looking at it the way an industry division would in NPA, one sees an impact of orders on suppliers that adds up to a shortage. I approach it, and my organization approaches it, more from the statistical point of view. Not that we don't try to keep an eye on what is happening on what you might call the practical side of the fence, but we have tried to get together what the normal civilian consumption is and take the military and superimpose it. If there is a stockpiling problem that is still a further step.

Interestingly enough-and I don't want to belabor this point because it is the kind of thing that I can't buttress with figures except for some classified figures in the back of my mind-a good many of the requirements which are hitting at mill level seem to be running in excess of what we are sure they have to level off to unless the military program is going to be increased substantially.

I think it is probably a composite of incentive scheduling and advance buying and that sort of thing that has caused an artificial, temporary hump.

Mr. REGAN. In other words, many are overanticipating their actual requirements?

Mr. WAMPLER. That is the type of thing, the sort of thing that we hope the controlled materials plan will do much to alleviate on the military side. Of course, that is speculative.

Mr. ENGLE. In reading your statement, Mr. Wampler, it appears that on this matter of requirements you could chase the devil around the bush for the next 5 years, couldn't you?

Mr. WAMPLER. I would suspect, Mr. Engle, that you will never come up with a precise answer. It will be a series of closer and closer approximations, we would hope.

Mr. ENGLE. The proposition is that since you say the situation is never stable and that they have to be revised from time to time, you could preoccupy yourself for the next 2 years in trying to pinpoint the end requirements and during all that period of time, hold in a state of complete inaction any program even though designed only to meet what must be obviously minimum requirements. Isn't that right?

Mr. WAMPLER. You said we could. I guess the answer to that is "Yes."

Mr. ENGLE. I am just wondering if that isn't what you are doing. Let's take tungsten, for instance.. How long would a reasonable man have to look at that situation to realize that they better get into action fast?

It is well-known, isn't it, that most of the tungsten consumed in this country came from abroad? Seventy-five percent of the tungsten consumed in the United States in peacetime was imported. You know that, don't you?

Mr. WAMPLER. I think there are a lot of foreign supplies in many of these so-called critical areas, and that is, of course, one of the things that tends to make them critical because of our stockpiling desires in connection with them.

Mr. ENGLE. The point is that 75 percent of the tungsten consumed came from overseas, and 25 percent of it from domestic sources; and when you analyze the foreign production, it has a zero availability in the event of an all-out war. For instance, you can't figure on anything from India, if we get into all-out war. You couldn't predicate that plan on anything from India, could you?

Mr. WAMPLER. I would rather not answer that question. It seems to me that that presumes.

Mr. ENGLE. I happen to know what the availability from India is, and it is zero. The situation is the same thing in China, except you know it now because the Communists have taken control. What I am trying to find out is why in God's name it took 7 months to get some kind of a requirement program set up on tungsten, when the most superficial look at the situation would indicate that the requirements of the Nation would be five times what we could rely on being produced in this country.

Just why would it take 7 months for reasonable men to arrive at some conclusion about that?

Mr. WAMPLER. I am under the impression, Mr. Engle, that many months ago it was determined and well known that a number of these metals, which are listed here as recognized in short supply, were known to be the sort of thing where we needed more supplies and needed stockpiling.

Mr. ENGLE. O. K.; why didn't the Requirements Division then say to DMA, "Set up a policy and let's get going"? You could always adjust your end requirements. You knew that your minimums were at least four times and perhaps five times what maximum production would bring about.

Mr. WAMPLER. You say, Why didn't the Requirements write the DMA?

Mr. ENGLE. Sure; you are head of the Requirements?
Mr. WAMPLER. That is right.

Mr. ENGLE. After you were there 1 week, if you talked to your experts, you could have picked out chrome, manganese, and tungsten and said, "Get them going; we are liable to be in a war day after tomorrow."

Mr. WAMPLER. I am under the impression that had been told before I arrived on the scene.

Mr. ENGLE. I don't know when you got there.

Mr. WAMPLER. About February 1.

Mr. ENGLE. Have you ever heard about it? Mr. WAMPLER. Yes; as a matter of fact, Dr. Boyd, myself, and my staff, without intending to slow up the programs in process, are looking at some of these areas to see if the original calculations on which some of the plans are going forward don't really have to be stepped up, because some of the figures that we are looking at in certain of these critical areas indicate that the preliminary calculations, which, as I say, I think have already been used as a basis for moving forward to at least some minimum metal▬▬

Mr. ENGLE. Are you talking of areas of geography?
Mr. WAMPLER. An area of metals.
Mr. ENGLE. An area of metals?

Mr. WAMPLER. Yes, in this particular instance. the same sort of thing with respect to products. products

Mr. ENGLE. Is metals your main point?

Mr. WAMPLER. Yes, in this connection.

Mr. ENGLE. Are you a statistician?

We are also doing
There are certain

Mr. WAMPLER. My formal education dealt with physics and mathematics, but not the statistical end of it.

Mr. ENGLE. That is getting pretty close. I see you were employed by the telephone company.

Mr. WAMPLER. That is correct.

NEED CITED FOR QUICKLY SETTING TARGET AREA ON MINERALS REQUIREMENTS AND NOT DELAYING EXPANSION PROGRAMS UNTIL EXACT REQUIREMENTS KNOWN

Mr. ENGLE. This may seem facetious, but I wonder sometimes what bites businessmen when they get down here in Government. They seem to acquire all the attributes of a long-time bureaucrat in the course of 1 week. There is the stalling, the indecision, the debate; it is indecision in this instance on tungsten-I refer also to tungsten, chrome, and manganese. Tin is another example. The only contract which has come out of your agency is one for tin and tungsten with company in Alaska. We don't produce any tin in this country. We know what the importation of manganese is and the assumption must be if we get into an all-out war that we can't get it.

I wish you would tell me why it is, when you know positively that in order to protect this country we are going to have to have certain supplies of these materials and that you can't rely on foreign importations in the event of a war, especially if we are looking at the Russian submarine threat, that you don't say, "We know we have to

go this far."

Now, the end requirements may be immensely beyond those requirements, but at least we can get a target area and start going.

As I read your statement, you have only made a finding on three materials. Am I mistaken about that?

Mr. WAMPLER. As a matter of fact, in terms of formalized findings of the sort that you seem to be referring to, I guess it is fair to say that we haven't, in my group, made a finding on any material. We have done considerable work, however, and are consistently collaborating with the various agencies, advising them of the latest figures and