Foreign Relations of the United States, 1952–1954, General: Economic and Political Matters, Volume I, Part 2

PPS files, lot 64 D 563, “Strategic Materials”

Memorandum by the Executive Secretary of the National Security Council (Lay) to the National Security Council¹

top secret

Washington, October 16, 1953.

• Subject:
• Source of U.S. Aluminum Supply in Time of War

1. In response to a request of the Defense Mobilization Board, the Director of the Office of Defense Mobilization has asked that the National Security Council provide advice with respect to the national security considerations involved in relying upon Kitimat, British Columbia, aluminum production as a source of U.S. aluminum supply in time of war.

2. The NSC Planning Board, including a representative of the Department of Commerce, has reviewed the enclosed staff study by the Office of Defense Mobilization (Enclosure A) and the enclosed views of the Joint Chiefs of Staff on the subject (Enclosure B).

3. Based thereon, the NSC Planning Board recommends that the National Security Council advise the Defense Mobilization Board through the Director of the Office of Defense Mobilization that considerations of national security do not warrant elimination of the Kitimat (British Columbia) aluminum supply from calculation of the full mobilization base available to the United States. On balance, security factors alone indicate no necessity for discrimination against Kitimat production. In fact, reliance on Kitimat as a source of aluminum is in consonance with the long standing plan of the United States and Canada to share their resources in time of war on a continental rather than on a national basis.

4. The above recommendation is scheduled for consideration by the Council at its meeting on October 22.

James S. Lay, Jr.

Enclosure A

top secret

[Washington,] October 16, 1953.

National Security Council Staff Study

Reliance to be Placed by the United States on Kitimat Facilities of ALCAN in Canada as Wartime Aluminum Supply Source

(Prepared by the Office of Defense Mobilization)

General Considerations

1. At the September 23 meeting of the Defense Mobilization Board (DMB),² the Director of the Office of Defense Mobilization was asked by the Board to “have the policy statement which was considered at this meeting placed before the National Security Council for strategic evaluation as soon as possible.”

2. The sole issue prompting reference to the NSC is the reliance to be placed on Kitimat in British Columbia as a wartime aluminum supply source, this point being raised by the italicized last clause of the policy statement considered by the DMB:

“ODM planning for U.S. defense preparedness in aluminum (including requirements for the national stockpile) shall be based on supply calculations which give full weight and recognition to that availability of Canadian aluminum indicated by the schedule of projected shipments to the United States publicly announced about May 25, 1953…³ as well as an additional supply potential from Canada of 175,000 tons per year of primary aluminum.”

a. The background of this statement is the need for a rapid decision as to whether the U. S. should proceed with a further expansion of domestic aluminum to meet a serious shortage in the light of full mobilization requirements. The two companies which would be involved in this further expansion of domestic capacity do not find certificates permitting rapid amortization at an 85% rate plus market guarantee contracts adequate. In addition, they require that the Government underwrite private loans to the extent of about $165 million. The Defense representative expressed the view at the DMB meeting that this so-called “third round” of expansions of primary aluminum capacity in the U. S. might be needed in the light of revised full mobilization requirements, in addition to the potential Canadian supply from Alcan’s facilities at Kitimat (one tunnel basis). The Defense representative also suggested that the question be examined as to the safety of relying on Kitimat production in the light of the comparative risks rising from the total vulnerability picture of Kitimat’s supply lines for alumina and the large concentration of production so close to the West Coast.

b. The NSC is not being asked to pass upon either the adequacy of the mobilization requirements figures or the provisions being made in the mobilization base for meeting them. Consideration is asked only of the comparative strategic security factors involved in relying upon the additional potential supply from Canada of approximately 175,000 tons per year of primary aluminum through the Kitimat facilities, rather than upon increased United States production. The two cases are summarized below, pro and con, as focused on the security problem.

3. The source of the raw materials for primary aluminum production in Canada at Kitimat is the bauxite production of Jamaica. At Jamaica the bauxite is reduced to the intermediate stage of alumina. The shipping ratio is roughly two tons of bauxite to one ton of alumina, and two tons of alumina to one ton of aluminum. On the basis of 320,000 tons of aluminum production annually, the potential of the one tunnel presently installed at Kitimat, alumina shipments from Jamaica would run to about 640,000 tons a year. Also, there would be a need initially to build up working stocks of about 100,000 tons.

4. The power facilities at Kitimat are located under ground. The plant, including potlines for producing aluminum, is not dug in and is located at the head of a fjord 400 miles north of Vancouver, 100 miles southeast of Prince Rupert, and 150 miles from the open sea, with a 5,000-foot cliff rising above the plant and town, which has a present population of 6,000, with a projected population of about 50,000.

Case Against the Reliance on Kitimat Aluminum on Grounds of Strategic Risk

5. The essential risks which are alleged to be greater for Kitimat than for aluminum production by the Olin Industries in West Virginia or southern Illinois and by the Wheland Company in Chattanooga, Tennessee, are two:

a. The long sea haul through the Panama Canal which is itself vulnerable, plus what is alleged to be a very vulnerable route for submarine attack on the haul up the Pacific West Coast.

b. The concentration of a tremendous production of aluminum in a single location which might invite selective atomic bombing attack.

6. a. It is alleged that the extreme vulnerability of the Panama Canal to atomic weapons and possible sabotage by conventional methods makes the additional risk of placing a large part of our dependence for aluminum on raw materials that must pass through this route an excessive gamble.

b. Any shipping haul around Cape Horn would involve tying up shipping in excessive amounts and for very long periods of time. Dependence should rather be placed on lines of transportation which proceed up the river systems of the United States or depend on relatively short rail hauls. It is pointed out that a cross-country rail haul of alumina to Kitimat (which would have to be handled in box cars rather than the open type or gondola cars used for bauxite) would add a strain on the transportation system of the U.S. in wartime by tying up cars for an inordinately long haul and for periods of time that would diminish the car supply critically in an already overburdened system.

7. A comparable danger from submarine attack, it is admitted, would be involved in the Caribbean portion of the haul. In the last war we lost nearly 100 ships in the bauxite trade in Caribbean waters or on the bauxite haul to the North American Continent. But the long haul from the Panama Canal up the West Coast or the even longer haul around South America (if the Panama Canal were put out of operation) would expose the alumina shipments to submarine attacks on a much more extensive basis. Convoys for this route would be extremely costly in terms of available naval protection. Too much (about 40%) of the supply of the aluminum production of the United States from this point of view is already located in the Pacific Northwest, including the expansion of the Harvey Machine interests which is already approved for the “third round” of U.S. expansion, to the amount of about 50,000 tons. To add to this risk of interruption of ocean transport of essential raw materials by a still longer haul to a region still closer to Russian submarine bases is to add to the risk by concentrating it.

8. The concentration of an amount of aluminum production which would be over 300,000 tons (with the single tunnel) and roughly double this amount for two tunnels, could only be brought into full operation with U.S. support through public contracts or through reliance upon the Kitimat production for a large part of wartime essential defense use. The existence of so large an amount of North American production at a single facility, it is argued, might be very tempting to knock out by a special mission on a general atomic attack or to cripple by sabotage even without the use of unconventional weapons.

9. A final point not directly related to strategic considerations of enemy action but relevant to dependence upon other governments for vital resources, no matter how friendly they may usually be, is the argument that we are adding to our dependence on Canada by helping to build up this production across the Canadian border rather than inside our own. It is argued that on a comparative basis West Virginia, eastern Tennessee and southern Illinois are far less vulnerable than British Columbia, with the added advantage that much of the transportation of bauxite in the U.S. would be presumably by river systems or by relatively short rail hauls from nearby and available ports. The aluminum production for the U.S. third round by the diversification of sources and the small amounts involved in each would conform to the dispersal policy of the mobilization base better than the concentration of such large amounts in what is after all a foreign country.

The Case for Reliance on Canadian Production at Kitimat Rather Than on Increasing Production of Primary Aluminum in the U.S. on a Subsidized Basis

10. The choice of Canadian aluminum on a non-subsidized basis, rather than the guarantee by the Government of large loans in further increasing United States production by smaller producers, does not, of course, rest primarily on strategic factors but on reasons of what is termed sound economy. However, the proponents of reliance on the Canadian source at Kitimat point out that much larger security issues may be involved than the risk of interrupting aluminum production. If we do not treat the resources of Canada as joint resources to be used in the most effective and economical method possible by the two systems, it may be difficult to persuade the Canadians to expedite the most vital matter of continental defense for both systems. Furthermore, the whole attitude of Canada toward the most effective use of joint resources, including the availability of nickel supply and uranium, may be exacerbated by a continuing feeling that we are discriminating against Canadian aluminum. In other words, the bad indirect effects on much more basic joint security programs may outweigh the increased risks of a direct character arising from further reliance on Canadian aluminum from Kitimat.

11. On the direct security issue, the case for the use of Kitimat facilities would stress the fact that if we were to plan not to rely on the Panama Canal, the required alterations in U.S. security policy would be much broader than those involved in West Coast shipment of alumina for Kitimat. The Panama Canal lies beyond the range of any probable atomic strikes in the years immediately ahead, and during the last war no effective sabotage was brought into play against it. Moreover, it is pointed out, we are already relying on the Pacific Northwest for a very large part of our mobilization requirements for aluminum under factors not essentially different from those involved in transportation to Canada via the Canal.

12. The same type of answer is directed to the exposure to submarine attack of ocean shipping carrying alumina up the West Coast to Kitimat. It is probable that in time of war enemy submarines could be detected and destroyed at considerable distance from out coasts. Hence coastal shipping will probably be safer than any other form of transportation. By way of comparison, the dangers of complete bottlenecking of the rail transportation system from atomic strikes on major cities and the possible destruction of major ports would have a very serious effect that would not be felt by a small port like that at Kitimat.

13. The large concentration of production which accompanies adequate power for electricity, such as is found at Kitimat, is said to be unavoidable if economies are to be achieved. Without atomic weapons there is not great risk in such concentrations as are involved at Kitimat, it is argued, and it is extremely doubtful if atomic bombs will be devoted by the U.S.S.R. to individual targets of this sort in any but the most critical instances. (They might, for example, be used against such concentrations as atomic energy facilities, or against so large a percentage of a production of a vital metal as is involved in the Copper Cliff Refinery of the International Nickel Company in Canada.) Insofar as natural factors can provide increased protection, the conditions at Kitimat are set forth by its proponents as approaching the ideal.

14. Dispersal policy aims primarily at locating important facilities away from large and vulnerable areas of urban concentration. Kitimat meets this test, it is said.

15. In reply to the argument that it is contrary to the national interest to increase our dependence on Canada by further expansion of Canadian aluminum facilities, emphasis is placed on the advantages to far more important defense programs of the adoption of a joint basis. We are bound to be dependent on Canada for many of the most vital basic materials, but so is Canada dependent on us for coal and, until quite recently, for an overwhelming percentage of her energy from petroleum. We are jointly dependent on such matters as an early warning system, where the Canadians must consent to our use of their territory.

16. The proponents of reliance on Canadian production at Kitimat point to the fact that, as against the larger issue of the most effective use of joint resources on an economic basis, the small additional risks, if any, involved in the transportation of alumina through the Canal and up the West Coast is a negligible factor. They also rely on the fact that a study made by the Military Facilities Review Board in the fall of 1951, after a careful consideration of the security factors involved, recommended the reliance on Kitimat as part of the mobilization base availability of the U.S. Further, Mr. William C. Foster, then Acting Secretary of Defense, in a letter to the Director of Defense Mobilization dated October 12, 1951, stated “The Department of Defense insofar as military security is concerned perceives no objection to the proposed expansion of the plant and no overriding objection to the proposed method of alumina delivery. No information, however, is available regarding the local internal security situation at Kitimat which is, of course, a Canadian matter.”

17. Arguments whether primary aluminum production or fabricating capacity would suffer more heavily in atomic strikes on cities can be used almost equally by either side of the present controversy. It is possibly true that Kitimat is a less vulnerable target than other plants on which the Air Force depends. On the other hand, knocking out power facilities or dams, such as the MacNary Dam in the Pacific Northwest, might cut off not only primary aluminum supply but many other vital war industries. But nothing short of an atomic strike would probably have any effect upon Kitimat, and it does not represent as valuable a target as would the MacNary Dam or similar installations.

Enclosure B

secret

[Washington,] October 1, 1951.

Paper Prepared by the Joint Chiefs of Staff

Military Security Aspects of Building a New Aluminum Plant at Kitimat, British Columbia

1. The character of the Kitimat area and the planned utilization of protective terrain features will contribute to the security of the reduction plant and its associated power system. Moreover, the isolation of this area from large centers of population and other important industrial installations would make it a relatively unprofitable target for military attack.

2. There are no apparent features which make this project more susceptible to sabotage than other industrial installations in Canada. On the contrary, the isolation of the project from population centers should facilitate security measures against sabotage.

3. The principal threat to continued production in time of war will be interruption by submarine attack of the sea borne flow of ore from Jamaica. The risk in this respect is considered acceptable as in the case of other strategic materials which must transit the Caribbean and Coastal Pacific waters.

4. The Joint Chiefs of Staff, insofar as military security is concerned, perceive no objection to the proposed expansion of the plant and no overriding objection to the proposed methods of ore delivery.

1. Copies of this memorandum were sent to the Secretaries of the Treasury and Commerce, the Director of the Bureau of the Budget, the Chairman of the Joint Chiefs of Staff, and the Director of Central Intelligence.
2. No record of the meetings of this Board has been found in Department of State files.
3. Ellipsis in the source text.