Certificates of essentiality of each loan from DPA or the Department of Agriculture are now required for all domestic loans under section 302. The Executive order also provides that such loans will be handled through the Export-Import Bank of Washington when the funds are to be used for expansion, development, or production in foreign countries. These loans will be made by the Export-Import Bank only upon a certificate of essentiality made by the Department of Agriculture in the case of food and food facilities and by DPA in all other cases. These loans will be made only when private funds and the regular funds of the Export-Import Bank are unavailable for the loan involved. Terms and conditions of the loans will be determined by the bank. Loans made by RFC under section 302 of the Defense Production Act will continue to be restricted to those instances where neither private funds nor regular RFC funds are available for industrial expansion purposes. As of August 28, DPA had approved 60 loans, amounting to $113,893,029, with RFC acting as fiscal agent and disbursing the money from a $600,000,000 appropriation for this purpose. DPA said that all loan applications for domestic facilities should be filed with RFC field offices throughout the country. EXHIBIT 21 DPA DELEGATION NO. 2-DELEGATION OF AUTHORITY TO DMPA TO CERTIFY LOANS DEFENSE PRODUCTION ADMINISTRATION [Delegation No. 2] DEFENSE MATERIALS PROCUREMENT ADMINISTRATOR DELEGATION OF AUTHORITY TO CERTIFY LOANS Pursuant to the Defense Production Act of 1950, as amended (Public Law 774, 81st Cong., and Public Laws 69 and 96, 82d Cong.), Executive Orders 10161 of September 9, 1950 (15 F. R. 6105), and 10200 of January 3, 1951 (16 F. R. 61), as amended or modified by Executive Order 10281 of August 28, 1951 (16 F. R. 8789), the authority conferred upon me by sections 310 (b) and 311 (b) of Executive Order 10161, as amended, to certify the essentiality of loans to the Reconstruction Finance Corporation and the Export-Import Bank of Washington is hereby delegated to the Defense Materials Procurement Administrator to the extent that such loans are a part of and in accordance with the terms of programs certified by me pursuant to section 307 of Executive Order 10161, as amended. The authority herein delegated may be redelegated. MANLY FLEISCHMANN, Defense Production Administrator. EXHIBIT 22 DMA AND INTERIOR DEPARTMENT ANNOUNCEMENT OF DECEMBER 5, 1950, PLEDGING COOPERATION TO MINING INDUSTRY For release at DEPARTMENT OF THE INTERIOR Information Service DEFENSE MINERALS ADMINISTRATION 8:30 p. m., December 5, 1950 COOPERATION PLEDGED TO MINERALS INDUSTRY The domestic mining industry was urged today to increase its efforts to provide the basic raw materials essential to the defense program of the Nation. In an address before the annual members' meeting of the American Mining Congress in New York City, James Boyd, Administrator of the Defense Minerals Administration, called attention to the accelerated demands for strategic and critical metals and minerals. The purpose of the DMA is to assure an adequate supply of metallic and nonmetallic minerals for the national-defense effort. The Defense Minerals Administration is one of five new agencies established by Secretary of the Interior Oscar L. Chapman to carry out specific provisions of the Defense Production Act of 1950. The other four agencies are the Petroleum Adminis tration for Defense, the Defense Power Administration, the Defense Solid Fuels Administration, and the Defense Fisheries Administration. Dr. Boyd, on behalf of Secretary Chapman, pledged the cooperation of the Interior Department and the Defense Minerals Administration in keeping mines, smelters, and mills at maximum efficient operation and in expanding production of those mineral commodities in short supply. "The mining industry," said Dr. Boyd, "has a Herculean task before it in providing our domestic industry with the supplies needed for the production of military material and essential civilian goods. "You have done the job well in two world wars," he added, "and I have faith that you will succeed in this critical period of mobilization." Describing the Defense Minerals Administration as the prime point of Government contact with the mineral industries and the manufacturers of mining machinery and equipment, Dr. Boyd outlined the methods that have been thus far worked out to provide Government assistance to those mineral producers unable to expand production without Government assistance. Under the Defense Production Act, he said, three principle methods are available: (1) Government guaranty of private loans; (2) direct Government loans; and (3) procuremert contracts. A fourth method, accelerated amortization for tax purposes, he added, is available under the Internal Revenue Act of September 23, 1950, applications for which are being handled through the National Security Resources Board. The Defense Minerals Administration, stated Dr. Boyd, cannot make loans or conclude purchase contracts itself. The function of the Defense Minerals Administration in regard to loans, he explained, is to certify to the Reconstruction Finance Corporation as to their necessity for national defense. As for procurement contracts, these will be certified to the General Services Administration after DMA has carried out the preliminary negotiations. (Purchases of ores or processed metals and minerals under contracts of the General Services Administration may be diverted to private industries or retained for the Government stockpile.) The Defense Minerals Administration will also be called upon to give an advisory opinion where accelerated amortization is requested. "Secretary Chapman, who has been given the responsibility by President Truman of expanding production of minerals, fuels and electric power," Dr. Boyd told the Mining Congress, "has asked me to stress to you the extreme importance of our metals and minerals. The scarcity of the products of our mines is perhaps the most limiting factor in our economy today.” "Our problems," added Dr. Boyd, "are threefold: First, we must get the maximum production possible-every available pound-from existing facilities immediately. Second, we must create new sources to develop known but unworked deposits to meet the continuing expanded demands of a mobilized economy. And third, we must make concentrated efforts to find additional deposits of ore." Dr. Boyd pointed out that the Defense Minerals Administration has tentatively set up three major divisions to carry out its responsibilities to the Nation under the Defense Production Act-a Requirements Division, a Supply Division, and a Production Expansion Division. Since the imposition of considerable military requirements on top of an already expanding civilian production must be based on the available supply of basic raw materials, the major functions of the Requirements Division are twofold: The first is to assure the necessary production materials for the maintenance, repair and operation of the metal mines and nonferrous smelters, and the nonmetallic mines so that the current rate of flow of metals and minerals from the mines is unhampered, Administrator Boyd said. This also means that an adequate supply of repair parts and new equipment must be assured to continue the mechanization of these mining properties. The second major function is to determine the requirements for the expansion programs of strategic minerals which are developed by the Production Expansion Division. The Supply Division, Dr. Boyd continued, is to be the programing and planning group of the Defense Minerals Administration. It will analyze and ronin tain forecasts of total supplies of all critical metals and minerals, and will maintain liaison with the NPA of the Department of Commerce with regard to the supply-requirements situation, and advise on adjusting requirements to supply. It also will develop goals for the expansion of productive capacity as well as programs for achieving them. In addition, this Division will recommend regulations on conservation and limitation in order to divert as necessary the flow of crude and intermediate mineral products. The Production Expansion Division will process applications for Government assistance and will evaluate individual proposals for increasing production of critically needed mineral raw materials. The Division will conduct preliminary negotiations leading to procurement contracts and loans, will recommend to the Deputy Administrator the certification of contracts and loans, and will maintain liaison with the General Services Administration, Reconstruction Finance Corporation, National Security Resources Board, and other Federal agencies concerned in the matters of contracts and loans. It is obviously the intent of the act, Dr. Boyd told the American Mining Congress, that expansion of production shall be facilitated as much as possible through ordinary business channels. Government guaranty of loans or direct Government loans can be restored to if regular business loans are not obtainable. However, the Government will negotiate purchasing contracts or make loans only if these methods appear to be necessary to place into industrial channels additional quantities of critical metals and minerals. In selecting projects designed to expand mineral production, the Defense Minerals Administration, according to Administrator Boyd, will give primary consideration at present to those designed to produce one or more of the following commodities (listed alphabetically): Antimony, asbestos (spinning grade), beryllium, chromite, cobalt, columbium-tantalum, copper, corundum, fluorspar, graphite (crucible flake), maganese, mica (strategic), molybdenum, nickel, platinum group metals, sulfur, tale (steatite), tungsten, and zinc. This list, he added, will be expanded, curtailed or modified in accordance with the changing national defense requirements. Projects to be approved by the Defense | Mineral Administration must, in its judgment, show definite promise of yielding material of acceptable grade, physical character, and specifications in amounts that will significantly improve the mineral supply position for national defense. Also, said Dr. Boyd, commitments for assistance in developing and mining mineral deposits will be made only when the necessary processing plants, water supply, and access roads exist, or when simultaneous commitments are made to assure that they will be provided if necessary. The technical and managerial competence of the operator will also be considered. In amplifying his remarks on procurement contracts, Dr. Boyd stated that overmarket prices will be certified only when the Defense Minerals Administration determines, as required by the Defense Production Act, that the production goal for a specific material cannot be reached "* at lower prices or on terms more favorable to the Government." * The applicant for certification of a purchase contract, he added, will be required to demonstrate to the satisfaction of the Defense Minerals Administration that ore reserves of suitable grade and character are available and adequate to fulfill the requested contract, and the applicant will be required to satisfy the Defense Minerals Administration that he can meet a firm delivery schedule. in regard to loans, Administrator Boyd said that applicants for certification of loans will be required to demonstrate to the satisfaction of the Defense Minerals Administration, as required by the Defense Production Act, that financial assistance has been sought through other channels and “* * * is not otherwise available on reasonable terms." The particular type of assistance that will be recommended or granted, the mining men were told, will be that which best suits the stage of development of the proposed project and the needs of the operator. Most project proposals will require a field examination of the mineral deposit concerned before recommendations are made. The Defense Minerals Administration, said Dr. Boyd will rely heavily on the Geological Survey and the Bureau of Mines in carrying out its duties. In Washington, the activities of the three agencies will be coordinated by an operating committee composed of the Deputy Administrator of the Defense Minerals Administration, Acting Director of the Bureau of Mines and Director of the Geological Survey. Appropriate commodity working groups on which the three agencies will be represented, are being set up. The Defense Minerals Administration member of each group will be its executive officer. Administrator Boyd stated that applications for Government assistance from the mineral industries should be sent directly to him at the Defense Mineras Administration offices in Washington. The Defense Minerals Administration will maintain no field staff of its own but will rely on Bureau of Mines-Geological Survey teams set up in each of the eight Bureau of Mines regions who will help applicants and will act for the Defense Minerals Administration in reviewing the applications in the light of existing data and determining what additional investigations are necessary to permit a decision. The teams will arrange for field or laboratory studies as needed, see that they are carried out, appraise the results and report to Washing ton. Other responsibilities of the field team will be to help call to the operating committee's attention projects that the team feels worthy of consideration. Field headquarters will be set up with the following personnel: Region I, Juneau, Alaska, S. H. Lorain (BM) and W. H. Twenhofel (acting) (GS); Region II, Spokane, Wash., M. E. Volin (BM) and A. E. Weissenborn (GS); Region III, San Francisco, Calif., H. C. Hiller (BM) and Ward Smith (GS); Region IV, Denver, Colo., J. H. East, Jr. (BM) and A. H. Koschman (GS); Region V, Minneapolis, Minn., A. B. Needham (BM) and C. E. Dutton (GS); Region VI, Joplin, Mo., L. T. McElvenny (BM) and Gallagher (GS); Region VII. Knoxville, Tenn., J. R. Thoenen (BM) and Robert Laurence (GS); Region VIII. College Park, Md., W. G. Agnew (BM) and Walter White (acting) (GS) and Region IX (the Foreign Minerals region), Washington, D. C., E. W. Pehrson (BM and W. D. Johnston (GS). The Geological Survey member is executive officer of the field teams headquartered at Spokane, Joplin, Knoxville, and Washingto The Bureau of Mines member is executive officer of the others. Dr. Boyd pointed out that regardless of the type of assistance sought, certain basic information concerning the proposed project must accompany each appl cation sent to Washington. In addition to the name and address of applicant, the name and exact location of the property; metal or mineral, and information as to ownership, leases, and detailed directions for reaching the property from the nearest town, each application should present the following data: (1) General description of mineral showings; (2) known dimensions of the deposit (3) history of deposit (development work, ore shipments, etc.); (4) description of mine workings; (5) sampling and assays (including maps or sketches, if available); (6) engineer's or geologist's report, if available; (7) description of surfac and underground installations and equipment (hoist, compressors, drilling machines, crushers, mill, milling equipment, offices, housing, etc.); (8) descri tion of proposed project, including type of assistance desired; and (9) require ments for proposed projects in terms of money, manpower, construction, equip ment, supplies, roads, water supply, and time to carry out project. EXHIBIT 23 TESTIMONY OF ODM ADMINISTRATOR WILSON BEFORE THE SENATE SMALL BUSINESS COMMITTEE, JANUARY 18, 1951 For release about OFFICE OF DEFENSE MOBILIZATION Washington 25, D. C. 10 a. m., Thursday, January 18, 1951 C. E. WILSON'S TESTIMONY BEFORE THE SENATE SELECT COMMITTEE ON SMALL BUSINESS (JANUARY 18, 1951) I am pleased to appear before you today to discuss some of the problems small business faces in the defense effort. As you know there are certain basic factors inherent in such an effort. Among these are time, integration and expansion. Clearly, we must achieve our defense requirements as quickly as possible. We must within a minimum period integrate our production resources, both large and small, into the defense effort. While this program is being carried forward we must expand our pre ductive facilities thereby increasing our defense potential and at the same time decreasing the strain upon our civilian economy. In any accelerated defense program there is, unfortunately, a time lag in some instances between the curtailment of civilian production and conversion to defense production. In an already tight economy stockpiling and production for defense must have first call on materials needed to combat the threat of foreign aggression. To assure our military requirements, it is necessary to curtail the use of scarce materials and provide a system of priorities and allocations. An unfortunate result of this in the early stages is hardship to some individuals. On an over-all basis hardship cases decrease with the increase of defense contracts at work in the economy. We are particularly aware of this problem and are moving as promptly as possible so that dislocations may be held to a minimum. The individual hardship cases, however, are a matter for consideration by the particular operating agencies. In this connection it might be helpful if I briefly describe the present organization which has been set up to carry forward our defense efforts. As you know the Office of Defense Mobilization was created within the Executive Office of the President. The Director of that Office is charged with the duty on behalf of the President, to direct, control, and coordinate all mobilization efforts. These include production, procurement, manpower, food, transport activities, maintenance of a sound economy, and foreign aid. In discharging these functions the Director is assisted by an advisory board known as the Defense Mobilization Board. The membership of this Board includes the heads of various executive departments and agencies having responsibilities connected with the national defense. The Office of Defense Mobilization does not perform any operating functions. Its job is to determine over-all policies and to coordinate the activities and programs of the mobilization effort. It is our duty to keep the machinery of defense mobilization running smoothly. The Defense Production Administration is the programing agency for the production phase of the program. It will perform functions incident to the determination of production programs required to meet defense needs and will establish procedures to accomplish such programs. In this connection the Administrator secures the production plans of all agencies and estimates manpower requirements to meet them. He is charged with responsibility concerning the expansion of productive facilities and it is only upon his authorizaton that the General Servics Administration can make purchases to promote expansion of productive capacity and supply. He also is the certifying authority for tax amortization for emergency facilities. In connection with expansion, the Defense Production Administrator is responsible for the direct loan program under which loans may be made to private business enterprises for the expansion of capacity, the development of technological processes or the production of essential materials. Under the provisions of the Defense Production Act this program is limited to those cases in which financial assistance is not otherwise available. I believe that to the extent possible these direct loans should be utilized to integrate small businesses into the production effort and therefore applications from small business will receive careful consideration. Insofar as food is concerned, the Defense Production Administrator determines with the Secretary of Agriculture how the available supply is to be divided between industrial and other uses. In the event of any differences between these agencies the Director of the Office of Defense Mobilization will make the final decision. In addition this organization arrangement separates programing and operating procedures over priorities and allocations. The Defense Production Administrator will determine the over-all production priorities and will decide when curtailment of civilian production is necessary. The priorities and allocations orders, however, wll continue to be issued by the various operating agencies subject to the direction and approval of the Administrator. Thus, the Secretary of Interior will continue to have jurisdiction over petroleum, gas, solid fuels, and electric power. Any problem the public may have concerning these materials should be taken up with the appropriate agency within the Office of the Secretary of Interior. These agencies are the Petroleum Administration for Defense, the Defense Minerals Administration, the Defense Solid Fuels Administration, and the Defense Power Administration. With respect to food and food facilities the |