811.20 Defense/433

The Secretary of State to Diplomatic and Consular Officers in the American Republics

Sirs: A number of diplomatic missions and consular offices in the other American republics have requested that they be furnished with information showing the sacrifices being made in the United States by industry and consumers because of the current shortage of strategic materials required for the national defense effort. This material has been requested to assist diplomatic and consular officers in answering charges in governmental and private circles that the United States is itself not making sacrifices commensurate with the ones the other American republics are called upon to suffer.

There is enclosed a memorandum indicating some of the sacrifices which the American manufacturing and consuming public have been called on to make because of material shortages. It is hoped that this information will be of assistance to you in explaining officially and privately that at least equal treatment is being sought in every instance for the requests of the other American republics and that extensive sacrifices are being made in this country. While it is not desired that officers carry on any concerted campaign to get these data before the public in the country to which you are accredited, nevertheless it may be possible in your discretion to use the material [Page 166] to advantage in discussions with governmental officers, influential trade and financial circles, and possibly in public addresses which you might be called on to make in the normal course of affairs.

Very truly yours,

For the Secretary of State:
Dean Acheson

Memorandum Concerning Sacrifices Being Made by Industry and Consumers in the United States Because of the Shortage of Strategic Materials

It is not generally realized, in countries outside the United States unable to obtain desired American supplies, to what extent the defense program has entailed sacrifices within the United States. Civilian needs have been severely cut, much “priority unemployment” has developed and many manufacturers, particularly those whose plants are not readily adaptable to defense production, have been compelled to reduce greatly their operations or to close. In spite of plans to alleviate the situation by the Supply Priorities and Allocations Board, by giving special consideration to “hardship” cases, it appears inevitable as more and more of the national effort is devoted to defense, that many industries will be adversely affected to an ever increasing degree.

No general discussion or outline of the national defense program can be given in this brief memorandum. The policy of the United States government to make the United States the arsenal of democracy has been amply conveyed to the field in speeches of the President and of various officers of the government. The Department is making every effort to keep the field supplied with current information. In addition to data contained in the Department’s Radio Bulletin, various publications have been forwarded, including copies of the most recent issue of the Comprehensive Export Control Schedule, No. 4; a pamphlet entitled “Materials for Defense” issued by the Office of Emergency Management containing a series of eleven articles on shortages of various critical materials; Press Release PM791 of July 28, 1941 containing a tabulation of orders issued by the Division of Priorities;18 (a later tabulation PM1568 dated November 13, 1941 has been mailed) the official weekly bulletin of defense agencies in the Office of Emergency Management entitled “Defense”, has been forwarded for some time to the missions in the American Republics and arrangements are being made to dispatch it to consular offices.

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However, a few brief comments might be made on the defense program. Appropriations have already been made totaling over sixty billion dollars. The problem was considered by many a year and a half ago when the defense program first got under way, to see how such a program could be set upon the top of a regular business framework of our economy; today, the problem is to find to what extent and in what manner the regular business framework can be set on top of the defense program. Official estimates indicate that about eighteen percent of our industrial effort is now devoted to defense and that within twelve months this percentage will probably reach between 45 to 50 percent with a probability of even greater increase thereafter. The effect of this change-over upon industry’s ability to supply civilian requirements is obvious. There is the further factor that civilian demand, owing to large general expenditures, has very greatly increased.

Instrumentalities and methods of control to achieve the end of supplying defense production with needed raw materials include the system of priorities, the subject of the Department’s circular instruction of October 22, 1941, file 810–20 Defense/1638a,19 inventory control, allocation of raw materials, limitation orders prohibiting the use of specific materials in certain finished products, limitation of production as in the case of automobiles, the development of the use of substitutes, the standardization of manufacture as for example in planes of the same general type ordered by various airlines, the redrafting of specifications such as those of building codes, reducing wherever possible the use of particularly critical materials, and requisition by the Army and Navy. Compliance with the various orders involved is being vigorously enforced and severe penalties have already been imposed upon violators.

It would appear possible that at least some of these measures could be adopted in some of the American Republics, particularly the use of substitute materials. Nine thousand tons of tin per year are now being saved in the United States by a slight reduction in the thickness of tinplate for cans.

A definite trend towards extension of the system of allocating raw materials has been evident in the past few months, replacing in effect the use of priorities.

Mr. Donald M. Nelson, Executive Director of the Supply Priorities and Allocation Board, was reported on November 13 as stating that the priorities system had reached the point where critical shortages of materials threatened its complete collapse. He stated that within a few months the government might have to begin rationing supplies to industries and that he could think of no civilian which would get [Page 168] all of the materials he would like to have. The less essential the industry is to the national well being, the sharper will be the curtailment. The necessity of greatly reducing the scope of their operations and in many instances of being forced entirely out of business is already clear for many industries. In the case of many critical items, shortages are so severe that even a high priority rating does not enable the holder to obtain supplies because of the higher ratings issued and the short supply available. As stated by Mr. Nelson on November 7 before the Associated Manufacturers of America, there is no way by which we can make all of the things we have to make in national defense and lead a normal commercial life on top of it all.

An official of the Division of Priorities of the Office of Production Management stated on November 13, “the ratio of civilian demand to available supply for aluminum is ten to one, today: ten orders for a ton of aluminum, to every ton of aluminum that can be sold. There are three customers for every ton of copper, four for every ton of brass, two for every ton of steel—and in greater or lesser degree the same kind of ratios apply to all of the other critical metals, to most of the important chemicals, and to many of our basic fibres”.

A press release of November 7 reported that preparation of allocation of all critical materials throughout American industry was called for on that day by parallel actions of the Supply Priorities and Allocations Board and the Office of Production Management. SPAB announced that it would authorize its executive director to obtain detailed production programs for 1942. It is a program which will take considerable time to put into effect; it is expected to give defense officials a clear over-all picture of the nation’s total requirements for raw materials.

The following outline of some of the restrictions and prohibitions imposed on domestic industry will serve as examples.

Production of automobiles for the first six months of the model year, beginning August 1941 and ending January 1942, will show a drop of at least 36.3 percent. The cut for August, September and November was 26.5 percent; for December it will be 48.4 percent and for January 1942, at least 51 percent. Before the model year is over on July 31, 1942, the drop in output of passenger cars will probably be much greater since manufacturers of passenger cars receive no general preference rating to enable them to obtain raw materials or component parts such as truck manufacturers receive.

Washers and ironers for domestic use were cut 17.3 percent for the period August 1 to December 31, 1941. Further cuts may come.

Of the total United States production of paper and paper products defense will take at least 30 percent so that civilian needs will have to be curtailed by that or a greater amount.

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Under an order of October 21, 1941 the use of copper as a component part of more than 100 types of civilian articles was restricted 40 percent for the remainder of 1941 and completely prohibited after January 1, 1942. Savings, it is hoped, will go far to strengthen our copper position and, avoid a shortage. Some of the more striking items affected are: a long list of automobile and garage equipment; an extensive list of building supplies and hardware; all kinds of burial equipment; dressmaking accessories; house furnishings and equipment, including office and institutional items; household appliances, including fans, heaters, stoves, upholsterers’ supplies, lamp stands, shades, et cetera; jewelry and novelties; and a miscellaneous collection such as beauty parlor equipment and barber shop supplies, beverage-dispensing units, bicycles, motorcycles, fire extinguishers, keys and locks, ladders and hoists, livestock and poultry equipment, photographic equipment, radios, street signs, vending machines, and office supplies.

The Supply Priorities and Allocations Board announced October 9 a new policy under which no public or private construction projects which use critical materials such as steel, copper, brass, bronze, aluminum, et cetera, may be started during the emergency unless these projects are either necessary for direct national defense or are essential to the health and safety of the people. This applies to public projects—Federal, State, and local—such as the building of post offices, courthouses, and similar structures; to the construction of roads and highways; to river and harbor improvements; and to flood control and power projects. It applies to the construction of factories, lofts, warehouses, office buildings and all other commercial construction. It applies to residential construction and to construction for public utilities.

By an order issued by the Director of Priorities on October 30, electric power was rationed in seven states of the Southeast. Large power consumption by defense industries, particularly aluminum plants, coupled with a severe drought necessitated power conservation. The program calls for the curtailment of power by large commercial and industrial users in seven states, effective November 10; the immediate discontinuance of the use of power for such non-essential services as sign lighting, show window lighting and floodlighting of athletic fields; and the immediate mandatory pooling of power by inter-connecting systems of 40 publicly and privately owned companies in 13 states.

On November 8, the use of cellophane and similar transparent materials derived from cellulose was ordered by the priorities division of OPM in the interest of national defense for curtailment. Some of the items affected are: the packaging of razor blades, cosmetics and soap, candles and wax products, decorations and novelties.

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It was reported during the second week of November that shortage of ships for war supplies to Britain and Russia and the corresponding tightness of scarce materials to the United States will shortly become reflected in a number of industries. The question to be decided by OPM officials is whether shipping allocations of non-war materials should be cut now as a conservative measure or later as the war effort demands. A cut of this character would make possible the bringing in of larger quantities of manganese, ore, rubber, tin, tungsten and other source materials.

Shortages of kraft pulp and of the supply of chlorine have affected the production of kraft paper. Due to the increasing demand for defense purposes, the allocations of chlorine for paper production will be further reduced shortly. The industries using kraft paper are through conservation and curtailment of use reducing the civilian demand.

The following quotations from recent speeches by Donald M. Nelson, Executive Director, Supply Priorities and Allocations Board, may be of use:

“The simplest explanation is that the national defense job we have taken on is so enormous that it is going to change the pace and scope of every other job in America. In all history no nation ever set out to do so much in so short a time. We would not be attempting it if to do anything less would make us safe. We cannot succeed unless we give the job everything we have. It means that on all of the important materials we use military requirements come first. Modern war eats metals at an unimaginable rate. It is hard to think of one important metal of which, after our military needs have been met, there will be anything remotely like enough to meet all the ordinary civilian demands. We are going to run short on everything. These shortages are overall shortages. They mean that we can get through this crisis only by cutting down on the amounts that go to civilian industry.

These are not minor inconveniences that we have been talking about today. They are major hardships. They are obviously going to mean that many factories, many business men and many workers can no longer produce the things they have been producing. That is going to bring extremely difficult problems to many cities. I cannot pretend that the period of adjustment which is now beginning is going to be an easy one to get through. Yet it would be equally wrong to pretend that the problem is insoluble, or to say that we are just naturally doomed to have a depression which we cannot remedy grow up inside of our tremendous defense effort.”

  1. Office of Production Management.
  2. Not printed.