811.20 Defense(M)/3–2548

Memorandum by the Assistant Chief ( Atwood ) to the Chief ( Tewksbury ) of the Division of River Plate Affairs

Subject: Strategic Besources Discussions with Mr. Winant1

As per Mr. Daniels’ memorandum to me of March 252 I had a long visit with Mr. Winant on March 29 and went over the whole problem of obtaining strategic resources from Latin America. As requested by Mr. Daniels I assured Mr. Winant that we were ready, willing, and anxious to take any action that would assist the U.S. Government in procuring such resources, but at the present time it did not appear that diplomatic representations were in order. We talked over the possibilities of taking definite action at this time, and we concluded that the NSRB and the Munitions Board should come to some agreement as to what commodities they really wanted to purchase, how much and at what price. Following such decisions the NSRB and the Munitions Board should discuss the problems with private U.S. industries engaged in the production of strategic resources in Latin America to discover the major obstacles to increased production. If it was found that diplomatic representations were considered necessary the NSRB and/or the Munitions Board would so notify the Department.

A meeting was called on April 6 by Mr. Winant to discuss the development and procurement of manganese and chrome supplies. The agenda of that meeting is attached.3 Please notice especially the first paragraph of the introductory statement. My contribution to the discussion was limited to outlining the State Department’s policy regarding the desirability of having private enterprise take the lead in the production of strategic resources rather than individual government to government operation. I also stressed the fact that the Department was anxious to assist in any way possible when specific cases had been decided upon. The report on the above committee meeting was prepared by Mr. Winant and a copy of it is also attached.4

R. S. Atwood
[Page 240]
[Attachment—Extract]

Report of Task Group on Manganese and Chrome Procurement

confidential

summary

Typical area problems which tend to restrict increased U.S. imports were discussed and counteracting programs considered.

Brazil, because of several general factors and its current and large potential production of manganese, was selected as the area for chief discussion. Following a briefer discussion of the problems presented by other areas, it was generally agreed:

(i)
that private enterprise offered the most practical and immediate approach to the general problem and that the industry should be given every encouragement to assume the responsibility of providing the necessary increase in manganese and chrome supplies for both U.S. consumption and stockpiling;
(ii)
that increased production be given practical encouragement through such incentives as firm, and where suitable long term, contracts for stockpile purchases;
(iii)
that appropriate assistance be given by government in such matters as necessary mining supplies and equipment, and practical assistance through diplomatic channels;
(iv)
that the services of the Office of Metals Reserve within the R.F.C., be requested under certain circumstances;
(v)
that, if the private companies either fail or hesitate to proceed with the understaking in any of the ore areas, more direct government action be taken through expanding the operations of the Office of Metals Reserve including where necessary enabling legislation by Congress.

It was agreed further that NSRB would contact several steel companies to ascertain what action they consider necessary by government to pave the way for increased supplies and that at the same time, the Munitions Board and Bureau of Federal Supply would prepare recommendations concerning a more flexible purchasing program with particular emphasis on long term contractural arrangements.

Frederick Winant

Consultant, Foreign Economics
  1. Frederick Winant, Consultant, National Security Resources Board.
  2. In his March 25 memorandum, not printed, Mr. Daniels said he wished to be sure Mr. Winant knew that the Department had been taking, and would continue to take, a serious and constructive interest in his problem, which was likewise the Department’s problem (811.20 Defense(M)/3–2548).
  3. Not printed.
  4. Not printed in entirety; see summary, attached.