Minutes of the 44th Meeting of the Defense Mobilization Board, Held in Washington, August 19, 1953 1
[Here follows a list of those present (33).]
The meeting convened at 10:30 a.m. in Room 100, Executive Office Building.
I. Chilean Request for U.S. Purchase of Copper
This item was not on the prepared agenda.
Assistant Secretary Cabot outlined the problem to the Board as follows: the Government of Chile faces a severe economic crisis. Its controls over the national economy have been ineffective in combating inflation and have generally distorted that nation’s economic life. Among other things, its policy of purchasing copper from domestic producers at a fixed price of 24½ cents and selling it at 35½ cents has made Chilean copper uncompetitive in world markets and has resulted in the accumulation of about 85,000 tons of unsold copper. The Chilean Government has now requested the United States to purchase 100,000 tons of copper for our stockpile at the current price rather than at the previous fixed price. In exchange the Chileans have agreed to take steps to eliminate the artifical exchange rate, halt the trend toward nationalization of American-owned mines, prevent sales or transshipment of copper to the Soviet bloc, and sell current production at current prices.
The Department of State, taking into consideration the serious repercussions that might occur if no effective action were taken on the Chilean request, recommends that representatives of the United States Government meet with the representatives of the American copper companies concerned (Anaconda and Kennecott) to determine whether they can agree on a solution to this problem to be recommended to their principals, which, if approved by the latter, would be presented to the Chilean representatives. A solution would presumably include purchase at current market prices for the United States [Page 709]stockpile of part of the accumulated copper and the temporary sterilization of the rest of it by the companies with provision for its eventual resale.
After discussing the general problem, the Board indicated its agreement to the following course of action:
- GSA to prepare a memorandum setting forth the status of existing DMPA and stockpile contracts, commitments and scheduled deliveries of copper for the stockpile.
- GSA to furnish information in re possible cancellation of certain floor price contracts in order to compensate for any stockpile purchases from Chile.
- ODM staff to outline the timetable for review of the copper stockpile objective.
- Representatives of the Departments of State and Commerce to consult with spokesmen of the companies involved in order to obtain the latters’ views with respect to this problem with emphasis on determining what the companies themselves may be able to do in order to alleviate the problem.
This matter will be reconsidered at the next meeting of the Defense Mobilization Board on August 26.
[Here follows discussion of other matters.]
The Defense Mobilization Board (DMB), established Jan. 3, 1951, served as an advisory body to the Director of Defense Mobilization, and provided a means for coordinating the policies and activities of the principal agencies participating in the defense program. Its membership was comprised of the Director of Defense Mobilization (Chairman); the Secretaries of State, Defense, Treasury, Commerce, Agriculture, and Labor; the Administrators of the Reconstruction Finance Corporation, the Economic Stabilization Agency, and the Defense Production Administration; and the Chairmen of the Board of Governors of the Federal Reserve System and the National Security Resources Board.
Mr. Waugh represented the Secretary of State at this meeting; he was accompanied by Mr. Cabot.
These minutes are signed by Joseph E. Vaughn of the Office of Defense Mobilization; they were transmitted under cover of a memorandum by Executive Secretary of the Office of Defense Mobilization John D. Young to Mr. Waugh, dated Aug. 21, 1953, not printed.↩