811.20 Defense M/7–2049
The Secretary of State to the Acting Chairman of the National Security Resources Board (Steelman)
My Dear Mr. Steelman: The Department of State is greatly concerned with the developing situation in stockpile policies and programs. There will be most serious consequences if Congress rescinds $300,000,000 or more of the $835,000,000 new obligational authority recently appropriated for stockpile purposes and if the Munitions Board is directed to favor further the purchase of domestic materials in order to support domestic industry.
The Department of State recommends that the Administration use every effort to prevent a cut in the current appropriation. Any reduction in the planned level of stockpile procurement would be unfortunate in the light of the United States security requirements. It is only recently that strategic materials have been sufficiently abundant that real progress could be made toward stockpile goals without injury to private industry. In the next year we have an outstanding opportunity to advance the security of the United States which we should not fail to grasp.
However, with respect to the diversion of stockpiling funds from the present expenditure pattern based on strategic considerations and market prices in order to increase the support to domestic industry, it is the State Department position that a directive to purchase in the United States is not in the public interest from the point of view either of national security or our foreign relations.
A decision to reduce foreign buying in favor of domestic procurement would simultaneously impair our efforts to solve the current dollar difficulties which vitally affect United States interests abroad and injure United States security at home by hindering the conservation of our own non-renewable resources and by retarding the building up of our supplies of resources not produced in the United States.
It is hoped that before any action is taken to alter the present stockpile policy on this matter, the Department of State will have an opportunity to present fully its views on the problems involved.
Sincerely yours,