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

S/S–NSC Files, Lot 66 D 148

Statement by the Director of Defense Mobilization ( Wilson )¹

secret

Washington , February 1, 1951.

ODM Doc. 4

Defense Production Policy

1. The development of adequate defense requires the immediate production of the weapons of war and supporting equipment required to meet the approved plans of the Defense Department for our own forces and also for the military support of our allies in accordance with such agreements as have been or may be reached.

2. The program to provide these immediate demands must be directed to provide production lines which will sustain a greater output than contemplated in the immediate program, to be available as a reserve for war.

3. This program of military and related end items is of utmost urgency and, therefore, must receive a higher priority than any other program. To meet it will require some expansion of facilities and some additional provisions for raw materials. A determined effort must be made to avoid the creation of additional facilities, inasmuch as machine tools now on hand in the national economy more than suffice to use all available materials, and each additional facility which is included in the program adds to the demand for materials in scarce supply. However, to the extent essential to the immediate program, facilities and provisions for raw materials must have the next priority.

4. In addition to meeting the immediate security program, the United States must prepare to meet the calculated demands for total war. This will require stockpiling and/or increasing production in areas relatively safe against attack to provide the materials needed to sustain a civilian economy sufficient to support a full war effort as well as that effort. Obviously, this is a program of relative security and, hence, the provisions to be made to assure an adequate war supply should not eliminate all risks. Great care must be taken to avoid the compounding of safety factors, both in computing requirements and in determining the availability of materials. Programs must be developed which may be expected to sustain total war, but which have taken into consideration those risks which can be calculated and reasonably evaluated. Absolute security in this field must be a long-range, rather than an immediate task. Reasonable security involving the calculated risk must govern during the immediate period in which so many other demands must be met from our economy.

5. It is inevitable that, as a consequence of the defense program and the attractive financing arrangements which result necessarily therefrom, many large programs will be submitted in allied fields which have in view the strengthening of the general economy to sustain a maximum war effort. This will include such programs as the provision of additional oil refining capacity, pipelines, ocean-going tankers, tank cars, electric power and others. Each of these programs must be scrutinized with great care. With rare exception, only those programs required for the immediate support of the present military end item program should be placed underway now, and their continuation to support a maximum war need should await the meeting of present needs. Otherwise, conflicting programs are certain to develop to delay, rather than to hasten the accomplishment of the overall objective.

6. Our defense effort must be continued as long as the threat of war continues, which must be assumed now to mean a period of a number of years. During this period, it is essential to maintain a sound and healthy national economy which alone can insure maximum production output if and when war does come. To build up at an excessive rate beyond the immediate needs of relative security could well disrupt the economy to a degree which would make it impossible to divert anywhere nearly as large a proportion of our productive output to war, if war comes, as would be necessary. The presently approved military program provides the basic requirements for security. With this equipment on hand and with a sound and healthy economy, a declaration of war would find the United States prepared to expand with sufficient rapidity to meet the demands of total war. Moreover, this economy will be able to maintain a large defense production program for as long as necessary and, concurrently, a healthy standard of living for the American people.

7. The present program can be met and still permit the maintenance of a substantial civilian economy and the support of a reasonable export program, provided there is no hesitation in using controls as needed. The prompt use of controls now will reduce to a minimum the disruption to our economy and in doing so will make it possible for a release of such controls at an early date; whereas, to wait to apply controls will certainly result in the imposition later of controls for a much longer and indefinite period. With the proper use of controls, it is possible to meet a defense program of the present magnitude over the years ahead as long as necessary, and to return within a period of from two to three years to a relatively normal economy. Meanwhile, inventories on hand and particularly those under the control of the individual, should suffice to very closely maintain our present standard of living even during the period of acute shortages of scarce materials.

8. Our immediate program must be met with a high sense of urgency and determination. However, we must not be stampeded into undertaking programs for the sake of defense which will, through their effect on our economy, decrease our ability to wage war. Each and every program and project must be examined and approved with these considerations in mind.

1. This statement was read and noted at the 82d Meeting of the National Security Council, February 1, the President presiding. By memorandum of the same date, S. Everett Gleason, Acting Executive Secretary of the NSC, transmitted copies to the NSC members and to the Secretary of the Treasury and the Director of Defense Mobilization. (S/S–NSC Files, Lot 66 D 148) Regarding NSC action with respect to this statement, see footnote 2, p. 51.