811.24 Raw Materials/533

The Secretary of State to President Roosevelt

My Dear Mr. President: I wish to bring to your attention the enclosed statement approved unanimously by the members of the Interdepartmental Committee on Strategic Materials with respect to appropriations for the purchase of reserve stocks of strategic materials under the authority of the Act approved June 7, 1939.2

In view of the present world situation, I have no hesitation in commending the statement and recommendations of the Interdepartmental Committee. It is my judgment that there should be no unnecessary delay in acquiring minimum reserve stocks of those materials, essential to American industry and the national defense, which would be most difficult to secure from abroad in the event that warfare is extended or intensified.

The problems now faced by industry in securing adequate supplies of essential raw materials, and the prospect of even greater difficulties as the war continues, indicate the urgency of prompt action.

Faithfully yours,

Cordell Hull

Statement by the Interdepartmental Committee on Strategic Materials Regarding Appropriations for the Purchase of Reserve Stocks of Strategic Materials

The Act approved June 7, 1939 (Public No. 117, 76th Congress) authorized to be appropriated, for the purchase of reserve stocks of strategic materials, the sum of $100,000,000 during the fiscal years June 30, 1939 to June 30, 1943.
With the approval of the President and the Budget Bureau, the budget estimate for the Treasury Department for the fiscal year beginning July 1, 1939 included an item of $25,000,000 for this purpose. This sum was cut to $10,000,000 by the appropriation committees of the two houses of Congress however and only that amount was appropriated.
Approximately $8,000,000 of this sum was obligated by the end of December and it is anticipated that the entire amount will be obligated by the end of January, 1940.
Much could be said in favor of the immediate appropriation of the entire remaining portion ($90,000,000) of the authorized total of $100,000,000. The Committee believes it highly advisable that Congress be requested to appropriate at least an additional $40,000,000, preferably $15,000,000 as a deficiency appropriation to be made available immediately and $25,000,000 for the fiscal year beginning July 1, 1940. The considerations which, in the opinion of the Committee, strongly indicate the desirability of at least this minimum immediate program are, briefly:
Due to the present heavy production schedules, commercial stocks in this country of many vital raw materials are now considerably below normal.
In the case of many materials American industry is experiencing difficulty in securing sufficient supplies to make possible the reaccumulation of stocks; releases of materials from foreign sources of supply have quite generally been limited to the point where only current consumption requirements in this country can be met, at least without serious price increase.
The difficulties in supply and transportation following the outbreak of war have now largely disappeared and prices on most materials have receded. Judging from the experience of the World War however, difficulties in both supply and transportation and high prices are likely to be encountered in the case of many strategic materials if the present war continues and increases in intensity. If this Government does not accumulate minimum reserve stocks of strategic materials as rapidly as possible, it may quite possibly be faced with much higher prices and perhaps the impossibility of securing the necessary supplies, either because they may be cut off at the source or shipping may be interrupted.
Should unlimited warfare on sea and in the air develop, the possession of a reserve of essential materials might prove to be of vital importance to this country, not only in support of the national defense, but also as a means of strengthening a policy of neutrality.
The use of funds for the purchase of these materials at this time should be looked upon as an investment and not an expenditure. It will always be possible to turn the materials into cash, and in the event of an emergency they will be worth much more than their cost. [Page 252]
  • Dr. Herbert Feis, Adviser on International Economic Affairs, Department of State, Chairman;
  • Captain H. E. Collins, Director, Procurement Division, Treasury Department;
  • Colonel Harry K. Rutherford, Director, Planning Branch, Office of the Assistant Secretary of War;
  • Commander A. B. Anderson, Office of Chief of Naval Operations, Navy Department;
  • Mr. James W. Furness, Chief of Branch and Chief Engineer, Metal Economics Division, Bureau of Mines, Department of the Interior;
  • Mr. James W. Young, Director, Bureau of Foreign and Domestic Commerce, Department of Commerce.
  1. 53 Stat. 811.