Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

711.5/11–2051

Minutes of the Nineteenth Meeting of the Defense Mobilization Board, Washington, November 14, 1951¹

Washington, November 14, 1951

confidential

DMB–M–19

Present

Board Members, Alternates and Staff

Hon. Charles E. Wilson, Chairman

Hon. Jack Gorrie, Chairman, National Security Resources Board

Hon. Eric Johnston, Administrator, Economic Stabilization Agency

Hon. W. Stuart Symington, Administrator, Reconstruction Finance Corporation

Hon. E. H. Foley, Under Secretary of the Treasury (representing the Secretary of the Treasury)

Hon. William C. Foster, Deputy Secretary of Defense (representing the Secretary of Defense)

Hon. Richard D. Searles, Under Secretary of the Interior (representing the Secretary of the Interior)

Hon. Clarence J. McCormick, Under Secretary of Agriculture (representing the Secretary of Agriculture)

Mr. Harold Linder, Deputy Assistant Secretary for Economic Affairs (representing the Secretary of State)

Mr. William H. Shaw, Office of the Secretary (representing the Secretary of Commerce)

Mr. Ewan Clague, Commissioner of Labor Statistics (representing the Secretary of Labor)

Mr. Ralph S. Trigg, Deputy Administrator for Program and Requirements (representing the Administrator, Defense Production Administration)

Mr. Winfield W. Riefler, Assistant to the Chairman (representing the Chairman, Board of Governors, Federal Reserve System)

Mr. Clay P. Bedford, Assistant to the Director, ODM

Mr. Rodolfo A. Correa, General Counsel, ODM

Mr. Andrew H. Berding, Assistant for Information Policy, ODM

Mr. H. Dewayne Kreager, Executive Officer, ODM (Secretary of the Board)

By Invitation

Hon. Telford Taylor, Administrator, Small Defense Plants Administration

Hon. J. D. Small, Chairman, Munitions Board, Department of Defense

Mr. Raymond G. Fisher, Assistant to the Director, ODM

Mr. Arthur S. Flemming, Assistant (Manpower) to the Director, ODM

Mr. Henry H. Fowler, Deputy Administrator, National Production Authority

Mr. Dal Hitchcock, Assistant for Programming, National Security Resources Board

Mr. George P. Hitchings, Business Analyst, ODM

Mr. Wesley McCune, Executive Assistant to the Secretary, Department of Agriculture

Mr. J. Murray Mitchell, Assistant to the Director, ODM

Mr. James L. Sundquist, Reports and Statistics Officer, ODM

Mr. Alfred C. Wolf, Acting Executive Assistant to the Secretary, Department of the Interior

The meeting convened at 11:00 a. m. in Room 211, Executive Office Building.

Mr. Wilson introduced Mr. Telford Taylor, Administrator of the Small Defense Plants Administration.

I. Approval of the Minutes of the Eighteenth Meeting of the Board²

The minutes of the eighteenth meeting of the Defense Mobilization Board, October 24, 1951, were approved as distributed to members in advance of the meeting, to include a revision of the record of Mr. Martin’s statement on voluntary credit (page 4, Item III, paragraphs 3 and 4) as requested by Mr. Riefler. (See DMB–M–18, Revised page 4.)

II. Actions Required to Place the Mobilization Program in the Strongest Possible Position in re Public Understanding and Support

Mr. Wilson emphasized the importance of insuring full public understanding of the need for the mobilization effort and actions stemming therefrom if public support is to be accorded to this national security effort. In this connection he read the following statement for the record:

• “The Mobilization Board will have only one more meeting before many of us concerned here will be involved in the drafts and specific suggestions on the Fourth Quarterly Report and the Presidential messages to the new Congressional session. I am most anxious that we all here take a forward look to lay out the actions we should take within this next week so that we will have available to us before the Congress returns, the kind of information we need on the present status and problems of our mobilization effort and where we stand in relation to some of the key policy issues.
• “This is the top Mobilization Advisory Board. We have a common background of having discussed over nearly a year some of the policy problems and some of the actual situations which have confronted us. I thought it would be very much in keeping, and it is certainly the general point uppermost in my mind, to discuss here this morning the problems that you people see ahead and the steps that you feel we might take now to try to put ourselves in the best possible position to meet those problems. I am going to indicate a few notions which I have in mind and then I would like to open the meeting and welcome your comments and discussions on matters which have occurred to you.
• “Before I get to specific problems and actions, however, I want to point out that I have considered both of these in the light of the partial mobilization policy which we have pursued up to this time. This policy was reaffirmed by the National Security Council a few weeks ago and by this Board at the conclusion of its last meeting. I feel, however, that we must always keep this an open issue, and I would thus like to get your feelings in this matter as well as on the specifics.
• “As background for this, I might give you my definition of what is involved in partial mobilization.
• “First, the creation of a defense force adequate to support United States commitments in the light of the present world situation.
• “Second, a military production program adequate to equip and sustain the United States forces and provide, in addition, the United States’ share in the equipping of other Free World forces.
• “Third, the creation, over a period of time, of additional capacity for the production of military end-items which would provide the base for rapid full mobilization if demanded by world conditions.
• “Fourth, a large expansion in key industrial capacity, including such segments as basic raw materials, power, fuels, food, and transportation, which are essential to support in a partial mobilization period both an expanded military establishment and reasonable levels of civilian consumption or, in the case of war, to sustain an all-out effort, and
• “Fifth, the maintenance of a sound civilian economy.
• “As we all know, the translation of this policy into specific programs and the administration of these programs has proven a very complex job, I am afraid that many fail to realize this, since they assume that something which is partial must by definition be easier than a total job. It is probably because of this lack of appreciation as to the true magnitude of the total job that we are now having so many questions raised and are bound to have a lot more raised as soon as Congress gets back to town. In other words, one of the things we must continue to work on is the public understanding of the mobilization program in the terms I’ve outlined above, or such other times as we decide may be necessary.
• “Without going into detail, we all know that we have now reached a point where our resources are thinly spread and where large changes in any of our programs would bring about basic changes in others. Because of this fact it is no longer possible to appraise the effect of changes in the military program without very careful review as to the impact of these changes on the other segments of the economy which are also serving a mobilization purpose. Because of this, Mr. Lovett and I have agreed that before the 1953 budget is processed a joint review should be made of the entire requirements and the over-all production picture.
• “As their part of the job, the people in Defense are now making a recomputation of their military requirements and fiscal needs. At the same time, the people in the Defense Production Administration are reviewing the resources needs for our basic expansion programs and for the maintenance of reasonable levels within the civilian economy. By the end of this month we should be able to sit down together and arrive at a reasonable answer to this basic problem of resources use. At the same time, we from the civilian mobilization agencies are carrying out a joint review of scheduling and production control procedures with the various services.
• “Meanwhile, we have gone far enough in expanding military production and cutting back the civilian economy to bring about the need for reappraisal of our utilization of industrial capacity and manpower. This has necessitated several actions. Within the last week we have arrived with Defense at a procedure for reviewing our needs for additional production facilities. Under the arrangement the Production Executive Committee, in cooperation with the various services, the Munitions Board, and the industry divisions of NPA, will review all defense financed requests for new industrial facilities costing $1 million or over. Unless there is a very good reason, all such requests will be turned down if a suitable existing facility can be located. Closely tied into this, of course, will be a very close scrutiny of tax amortization requests.
• “Along the same lines we are taking some very definite steps to review our procurement policies with a view to seeing that in all cases possible new contracts are placed in such a way as to take maximum advantage of the capacity and manpower now being freed up by cutbacks in the civilian economy. Several specific steps have already been taken, including arrangements for wide-spread circulation in procurement channels of the names and capabilities of specific firms receiving large cutbacks in their materials allotments, and the holding of clinics between procurement officers and such companies. I feel, however, that a great deal more needs to be done, including, perhaps, a basic review by Defense of their procurement policies.
• “All of these are examples of what we can do now to firm up our knowledge and to be in a better position both to produce on our planned schedules and to relate the other mobilization policies to realistic schedules.
• “Lastly, I am more and more concerned about our problem of mineral supplies. I am sure that we are going to have to go over our pricing policies again soon if we are to secure the maximum possible under current circumstances. I hope that everyone involved will keep minerals’ prices under constant review in order that we may again review the situation by December 15 to see if price or other actions are indicated.
• “I haven’t included in my remarks anything of a specific nature on stabilization problems. I don’t want this to indicate, however, that I feel our discussion should exclude these areas. I would like to have your thoughts on the whole sweep of our problems.”

Mr. Wilson requested the comments of the members of the Board or their representatives present, noting that the real policy decision pending was whether or not the Government continued under the current partial mobilization policy.

Mr. Fowler, for Mr. Fleischmann,³ suggested the impending possibility of allocation by legislative action, evidences of which began to emerge at the conclusion of the past session of the Congress. He noted how near the first session of the 82nd Congress came to passing a joint resolution requiring larger allocations of structural steel for school construction purposes.

Mr. Searles suggested the general public possibly does not agree that the mobilization program is necessary, noting that a recent Gallup Poll had indicated a majority opinion as believing the Korean War to be unnecessary. He also suggested a need for coordination among Congressional committees, in order to avoid the embarrassment of conflicting legislative opinions on various aspects of the defense program.

Mr. Foster expressed general agreement with the statement read by Mr. Wilson, except to note that a thorough program review would probably take more than 30 days. He emphasized a need for reexamination of the existing defense production policy among Executive Branch agencies in order to reach a common decision in re continuation of the present partial mobilization program. He indicated that a shortening of time on military delivery schedules had placed greater demands on the civilian economy. In this connection he stated that the Department of Defense has instituted procedures for thoroughly reviewing all military needs. Mr. Foster noted that unless the Executive Branch agencies reach agreement on general mobilization policies, they will be faced with the prospect of giving additional time to explaining and justifying their positions before the next session of Congress. In conclusion he emphasized that even if the Korean War ended in an armistice tomorrow, the mobilization effort would have to continue unabated. Such a cessation of hostilities in Korea would reduce actual military equipment losses, and permit diversion of materials and equipment on a stepped up basis to NATO countries, but would not permit substantial cutbacks in military requirements.

Mr. Foley stated that confusion among businessmen over the mobilization program results in large part from lack of complete agreement on the program in the Congress and among the defense agencies in the Executive Branch.

Mr. Linder indicated that the Department of State sees little possibility of change in the World political situation for some time to come. He emphasized (a) State’s primary concern with aid to friendly foreign powers, and (b) further deterioration in the international fiscal situation in recent months in terms of balance of payments among our allies. He agreed with the need for further review of the present “guns and butter” policy in terms of the deleterious impact rising prices in the U.S. have caused on the economies of our allies.

Mr. McCormick noted the general public apathy toward the mobilization program possibly resulting from a lack of full understanding of the program. He cautioned the Board in terms of the fact that members of Congress are now at home meeting with their constituents, and could well reflect this apathy when they return for the next session of Congress in January.

Mr. Symington stated that he did not believe that we had ever completely faced up to the issue of Communist aggression, either before Korea or now. Using the term “we should either fish or cut bait” he re-emphasized the need for an intensified mobilization effort. Mr. Symington suggested that more detailed information be given to the public, particularly in terms of stockpile requirements. He also noted a need among mobilization agencies for unanimity on basic mobilization policies.

Mr. Gorrie, noting the results of current meetings on dispersion and post-attack mobilization, asked Mr. Wilson regarding results of the ODM public information program. Mr. Wilson replied that full support in terms of a “speakers bureau program” is now being received from the American Bar Association. Also, the American Federation of Women’s Clubs is now being brought into the picture. This provides an increased channel for getting across to the public pertinent factual information on the defense program.

Mr. Johnston stated that in his opinion a raw materials czar should be appointed to have full jurisdiction, and therefore be able to provide a uniform approach, to international and domestic raw materials problems. He suggested utilization of an interagency committee to work with the raw materials head. Mr. Wilson noted that such a committee existed, and suggested that differences of opinion existed over the practical possibility of creating a raw materials czar.

Mr. Wilson summarized the consensus of the meeting as indicating an expressed desire for immediate re-examination of basic mobilization policies, and expressed his intention to implement such a re-examination.

The meeting adjourned at 12:35 p. m.

H. Dewayne Kreager

Executive Officer, ODM
Secretary of the Board

1. Transmitted to the Secretary of State by H. Dewayne Kreager, Executive Officer, Office of Defense Mobilization, on November 20.
2. Not printed.
3. Manly Fleischmann, Administrator, National Production Authority.