Foreign Relations of the United States, 1948, General; the United Nations, Volume I, Part 2

Department of State Committee Files: Lot 122¹

Report by the Strategic Materials Working Group to the Executive Committee on Economic Foreign Policy ²

confidential

[Washington,] June 21, 1948.

ECEFP D–70/48 Rev. 1

Acquisition of Strategic Materials Under ECA

Report of the Strategic Materials Working Group With Respect to Strategic Materials Urgently Needed for Stockpiling and Available in Participating Countries

problem

The Working Group has considered problems of availability and procurement of those items listed for stockpiling which require special and urgent action because of failure to meet targets and which are known to occur in some quantity in participating countries. Interagency task groups were established covering agreed upon commodities (fourteen in number) and recommendations are submitted based upon data accumulated which is believed to cover all information available at this time. The recommendations offered are in the main directed towards action which may be taken by the Administrator of ECA under Article XI of the Master Economic Cooperation Agreement. Coordinate or supplementary action may be required by other agencies. Additional work is being carried on with regard to other commodities and other areas of the world.³ A detailed report covering the fourteen commodities is attached.⁴

recommendations

A. General

1. Immediate attention should be given to the obtaining of more adequate information. In this connection, technical personnel, including engineers and minerals specialists, should be located at given points in the field to report on all projects, recommend appropriate action, and expedite programs. It is recommended that the Secretary of State request the interested departments and agencies including the Administrator of ECA to cooperate in discussions looking toward the employment of such a staff at the earliest possible moment and the avoidance of unnecessary duplication.

2. In general, increased production of strategic commodities is necessary to permit more rapid acquisition by the stockpiling authorities. Pursuant to Section 117 (a) of the Economic Cooperation Act⁵ the Administrator of ECA should give attention to arrangements for such increases in the following cases: chromite, copper, manganese, quinidine, tin, columbite, nickel, lead, cobalt, and crushing bort. More specific comments with reference to each will be found in the attached report. It is recommended that NSRB and the Munitions Board each call the attention of the Administrator of the ECA and other departments and agencies of the Government having power to act in connection with developmental programs in foreign countries to the opportunities for increasing supplies of strategic materials as they become known and request that they use their authority to promote such programs. The Administrator of the ECA and other agencies should be prepared to give assistance to participating countries in providing equipment, supplies, and technical services in connection with specific projects. It may be necessary to use priorities, to advance credit, and to shift specific equipment orders from one supplier to another.

3. Immediate attention should be given to improving transportation, including port facilities, in a number of areas. Such action will produce the quickest results in terms of an immediate increase in the flow of materials. The Working Group recommends that the NSRB and Munitions Board call the Administrator’s attention to transportation difficulties in Rhodesia, the Belgian Congo, Mozambique, the Gold Coast and French Morocco. Qualified personnel on the spot are necessary to determine the exact action needed.

4. The Working Group suggests that the Munitions Board make use of long-term contracts for strategic materials to the extent practicable in order to encourage new development. Coordination of such contracts with action by the Administrator of ECA is important.

B. Specific

The Working Group has concluded that immediate action is possible in the following cases:

1. Chromite from Southern Rhodesia.

At the beginning of 1948 it was reported that 400,000 tons of chromite were stockpiled at mine heads awaiting shipment. The port from which shipment takes place is located in Mozambique, a dependency of Portugal. Immediate discussions with the United Kingdom, Southern Rhodesia, and Portugal should be instituted with a view to improvement of rail and port facilities and increased shipment of chromite. The NSRB and Munitions Board should request the Administrator of ECA to undertake these discussions with the assistance of the State Department.

2. Crushing Bort from the Belgian Congo.

Approximately 95 percent of crushing bort comes from the Belgian Congo. Production of this material is under the control of the “diamond cartel”. Representatives of the State Department have had discussions with representatives of the Belgian Government with respect to increased availabilities of bort for the U.S. strategic stockpile. The Working Group recommends that representatives of the Department consult with the Administrator of ECA for the purpose of continuing such discussions with a view to determining the potentialities of and the requirements for increased production and the transfer of increased supplies directly to the United States Government agencies for stockpiling purposes.

3. Quinidine from the Netherlands East Indies.

The Netherlands East Indies ordinarily produces 90 percent of the cinchona bark from which quinine and quinidine are produced. It appears that certain restrictive business practices are limiting the quantity of quinidine made available. It is recommended that representatives of the State Department and the Administrator of ECA, in consultation, begin discussions with representatives of the Netherlands Government to determine what action is necessary to obtain increased supplies of quinidine or of cinchona bark from which it is prepared.

4. Manganese from Gold Coast.

The Gold Coast is the largest producer of manganese in the world outside of the U.S.S.R. Production reached a peak of 721,000 tons in 1946, declined to about 540,000 tons in 1947, and is estimated at the yearly rate of 730,000 tons for the first months of 1948. It is estimated that production could be increased to 830,000 tons. It is recommended that the NSRB and Munitions Board should request the Administrator of ECA and the State Department to undertake discussions with the producers and with the Governments of the United Kingdom and the Gold Coast to expand production and eliminate transportation bottlenecks with a view to increasing production to the extent possible.

[Here follow “Discussion;” Attachment 1, “Availability of Strategic Materials (on a Country Basis) under ERP;” and Attachment 2, “Availability of Strategic Materials (on a Commodity Basis) under ERP.”]

1. Lot 122, a consolidated lot file consisting of records of inactive or terminated committees of the Department of State and inter-departmental committees on which the Department of State was represented. Material in this lot, which includes a set of the papers of the Executive Committee on Economic Foreign Policy, was retired by the staff of the Executive Secretariat of the Department of State.
2. The present report was approved on June 21, 1948, as follows: Recommendations A(1), B(2), and B(3) by ECEFP; A(4) by the Munitions Board; and A(2), A(3), A(4), B(1), and B(4) by the National Security Resources Board Staff and the Munitions Board. It was transmitted to the heads of United States Government agencies concerned and to the chiefs of all U.S. missions abroad.
3. On August 3, 1948, the Working Group on Strategic Materials submitted ECEFP D–96/48, “Report with Respect to Additional Strategic Materials Needed for Stockpiling and Potentially Available in ECA Participating Countries,” which was submitted to the National Security Resources Board and the Munitions Board for action. On October 20, 1948, the Working Croup approved ECEFP D–143/48, “Additional Recommendations with Respect to Twenty-two Items Needed for Stockpiling,” pertaining to the availability of items in non–ECA participating: countries. Recommendations involving action by the Munitions Board were made directly to the Board. Neither report is printed. (Department of State Committee Files: Lot 122)
4. The two attachments are not printed.
5. Section 117(a) stated that the Administrator of ECA “shall, whenever practicable, promote, by means of funds made available for the purposes of this title, an increase in the production in such participating country of materials which are required by the United States as a result of deficiencies or potential deficiencies-in resources within the United States.” (62 Stat (pt. 1)153)