Statement Issued by the Department of State, April 14, 1939, Regarding Proposed Exchange of Materials for War Reserve Stocks11

Inquiries received since the statements of Senator James F. Byrnes and this Department on April 10 indicate a misunderstanding of one important aspect of the proposal to exchange surplus commodities held by this Government for stocks of strategic materials. Fear has been expressed in some quarters that markets for these commodities would be upset and prices depressed. Furthermore, comparing the plan with commercial barter deals, it has been charged that the trade-agreements program is being abandoned and commercial policies reversed.

This Government is not seeking to force American surplus commodities into the world’s markets by any scheme to exchange or barter them for strategic materials. The American surpluses will be available for exchange only if foreign governments are interested in acquiring them for war reserve stocks.

The idea now being explored is confined to the acquisition of strategic materials, and strategic materials only, as reserves for national emergencies when necessary supplies of these materials from abroad might be cut off or greatly reduced, as in the case of widespread international conflict.

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One of the essential features of such an arrangement would be an agreement on the part of other governments as well as our own to hold the acquired stocks as reserves for war emergencies with entirely adequate arrangements for permanently withholding such stocks from commercial markets. Hence the plan, if any arrangements of this character can be successfully worked out, would not interfere with the trade-agreements program or conflict with our commercial policies.

  1. Reprinted from Department of State Bulletin, April 15, 1939, p. 297.