Foreign Relations of the United States, 1955–1957, Foreign Aid and Economic Defense Policy, Volume X

213. Report Prepared in the Office of Defense Mobilization¹

Washington, February 26, 1956.

STOCKPILE POLICIES AND PROGRAMS OF THE U.S. GOVERNMENT

(For The Information of The Council On Foreign Economic Policy)

Introduction

This document was originally reviewed by the members of the Defense Mobilization Board at Meeting No. 80 on August 10, 1955. The paper was approved with the exception of the Section on the length of the emergency period upon which stockpiling calculations should be based. That question was subsequently settled by the National Security Council in January of 1956.² This document has now been revised, where appropriate, to reflect the current situation.

Part I. The Defense Stockpile Under the Strategic and Critical Materials Stock Piling Act

A. Administration of the Present Stockpile Program

1. Authority for the Stockpile

a. The need for a stockpile of strategic materials required for defense purposes was apparent in World War I; however, it was not until 1939 that the Congress passed a specific Act authorizing stockpiling of strategic and critical materials for national defense purposes. Following World War II, during which strategic materials shortages created many difficult wartime production problems, the Congress reviewed the stockpile legislation, and, in 1946, passed “The Strategic and Critical Materials Stock Piling Act,” (PL 520, 79th Congress) approved July 23, 1946.³ The preamble states:

That the natural resources of the United States in certain strategic and critical materials being deficient or insufficiently developed to supply the industrial, military, and naval needs of the country for common defense, it is the policy of the Congress and the purpose and intent of this Act to provide for the acquisition and retention of stocks of these materials and to encourage the conservation and development of sources of these materials within the United States, and thereby decrease and prevent wherever possible a dangerous and costly dependence of the United States upon foreign nations for supplies of these materials in times of national emergency.

The Act is still current but administrative responsibilities were revised by Reorganization Plan No. 3 of 1953 which made ODM responsible for the determination of the materials (including quantities and qualities) to be stockpiled. In the process the Secretaries of Defense, Interior, State, Commerce, Agriculture, Treasury, and others cooperate. Acting under procurement directives from ODM, GSA procures and stores the stockpile materials. The Stock Piling Act makes the Secretary of the Interior and the Secretary of Agriculture responsible for certain research and development activities intended to increase supplies of materials.

2. Mechanism for Interagency Cooperation

To make the best use of all of the information available in the government, including that available through the many Industry Advisory Committees to the different agencies, and to manage the stockpile program so that all responsible and interested agencies are fully informed, several echelons for interagency coordination have been established as follows:

a. The Interdepartmental Commodity Committees bring together the senior commodity specialists of the various agencies of the Federal Government for the purpose of advising the ODM Commodity Specialists. These committees develop the basic supply-requirements data which are used for subsequent calculation of stockpile objectives. The following commodity committees are currently in existence:

• Interdepartmental Chemicals & Rubber Advisory Committee
• Interdepartmental Fibers Advisory Committee
• Interdepartmental Forest Products Advisory Committee
• Interdepartmental Iron, Steel & FerroAlloys Advisory Committee
• Interdepartmental Light Metals Advisory Committee
• Interdepartmental Non-Ferrous Metals Advisory Committee
• Interdepartmental Non-Metallic Minerals Advisory Committee

b. The Interdepartmental Materials Advisory Committee is chaired by the Assistant ODM Director in Charge of Materials and composed of representatives (usually at the Assistant Secretary level) of the several agencies concerned. This Committee advises the Assistant ODM Director in Charge of Materials on establishment of stockpile objectives and broad policy problems in the stockpile area.

c. The Defense Mobilization Board, composed of heads of the several agencies having mobilization functions, advises the Director of ODM on broad defense policies and programs including stockpiling and major current materials problems such as are presented by aluminum, copper and nickel.

d. The National Security Council, reviews defense policies and programs and advises the President on their implications and implementation. The NSC has reviewed the basic assumptions on which stockpiling is based.

e. The President has reviewed broad stockpile policies including the long term stockpile policy recommended by the Cabinet Mineral Policy Committee, and the length of war on which stockpile planning should be based.

3. Congressional Review

The Congress of the U.S. has reviewed stockpile policies and programs at frequent occasions through a variety of groups. The Armed Services Committees, the Interior and Insular Affairs Committee, the Appropriations Committees, and the Joint Committee on Defense Production all hold frequent hearings covering various aspects of stockpiling. The Appropriations Committees usually go into considerable detail in regard to the basic policies and proposed expenditures for individual materials. Semiannually a complete secret report is submitted to the Congress covering the status of each material, and an unclassified summary report is likewise issued at the same intervals. The current stockpile program has a long history of bipartisan support and, except for a few minor instances, Congress has not hesitated to appropriate the full amount of money requested.

B. Setting Stockpile Objectives

1. Nature and Type of War, Including Length

It is recognized that there are several different types of wars that could be considered. Stockpiling is intended to meet deficiencies in materials supplies that would exist in a five-year war calling for general mobilization without attack on Continental United States and involving ground, sea, and air forces, and high utilization of the industrial potential of the U.S. Atomic warfare, involving sudden and substantial destruction within the Continental U.S. and consequent serious reduction of industrial capacity to consume materials, could result in lower requirements. On the other hand, the U.S. might be faced with prolonged small or medium wars of the Korean type, in which serious cutbacks of the civilian economy could not be tolerated and increased needs for military matériel would require withdrawal of materials from the national stockpile. Moreover, no allowance has been made in stockpile calculations for the materials needs for reconversion to a normal status after a war or for the rehabilitation of the U.S. in the event of massive destruction.

2. Requirements Estimates

In general, requirements estimates assume maximum feasible conservation without impairing the performance characteristics of essential items. All requirements estimates are screened by the ODM Production Area before being accepted for stockpile calculations.

a. Military Requirements are submitted to ODM by the Department of Defense. These requirements are based where possible on conversion of feasible end items schedules which in turn are related to strategic plans. Requirements estimates made by the Army, Navy and Air Force are reviewed by the Assistant Secretary for Supply and Logistics before coming to ODM. Where significant changes occur, either upward or downward, full justification of the change is required particularly when such changes would result in larger stockpile objectives requiring additional procurement.

b. Atomic Energy Requirements, for materials used in the atomic energy program, are submitted by the Atomic Energy Commission. It should be noted that the AEC itself is responsible for “source” and “fissionable” materials; accordingly, these are not included in the stockpile under P.L. 520.

c. Essential Defense Supporting Requirements are developed normally by the Department of Commerce and, in certain instances, by other Departments having special claimant responsibilities, as for example the Department of Agriculture for agricultural production, and the Department of the Interior for petroleum, coal, and other production. These requirements reflect the materials needed in wartime to keep essential industrial production and services in operation.

d. Essential Civilian Requirements are submitted generally as described in “c” above and are intended to provide for “Rock-bottom” civilian needs in time of all-out war.

e. Essential Exports Requirements for raw materials are included in the stockpile calculations only for those materials where the U.S. normally in peacetime is a major source for that material. An example would be U.S. molybdenum for use of the U.K. steel industry.

f. Special Provisions for Foreign Requirements

It should be noted that woven throughout the requirements estimates is some provision for the requirements of our allies in wartime. For example, the military requirements for trucks, planes, ammunition, etc., would include those items intended to be supplied by the U.S. to allied nations in wartime. Where we historically export certain manufactured articles—as for example electrical equipment, or certain raw materials—as for example molybdenum, some provision is made for such essential exports in time of war. In many cases it is difficult to identify precisely the magnitude of these foreign requirements for they may be included only incidentally in base period manufacturing levels used in some requirements calculations.

3. Supply Estimates

Wartime supply estimates are developed by considering historical production records as well as new developments, both positive and negative, known to the technical agencies. For example, firm industrial plans to bring in new mines within the U.S. or abroad would result in increases in future supply estimates, while definite knowledge that certain important mines had been fully depleted and were about to close down would result in decreases in future supply estimates. Supply estimates assume that sources normally functioning in peacetime in the U.S. and in foreign countries will continue in wartime, and supply estimates do not contemplate uneconomic forced-draft post-M-day expansion which would be wasteful in time and resources. To gross supply estimates are applied certain safety factors as follows:

a. The Joint Chiefs of Staff give advice on areas of the world that are expected to be in the hands of the enemy and thus not counted upon, as well as information on other areas of the world expected to be accessible to the U.S. in wartime. Additional advice is provided on possible shipping losses from the accessible area.

b. The State Department advises on possible political and economic conditions within materials producing areas in wartime and suggests certain safety factors intended to make appropriate provision for bad conditions.

c. Other factors are also included such as specific discounts for especially vulnerable facilities which could be paralyzed by atomic attack or sabotage, and for concentrated sources (an attempt to reflect the old adage: “don’t put all your eggs in one basket”).

4. Stockpile Objectives

Stockpile objectives are reviewed, and revised if necessary, when major changes in requirements or supply estimates are indicated.

a. The Minimum Objective

The minimum stockpile objective is normally computed by comparing the total expected wartime supplies (after applying to the supply data the discounts described in 3 a., b. and c. above) to the total requirement. Where the factored supply is less than the requirement, the indicated deficit is generally established as the minimum stockpile objective.

(1) Danger Point

That portion of the minimum stockpile objective that would be essential to meet a 3-year war is calculated separately and is known as the danger point within the minimum objective.

b. The Long Term Objective

Pursuant to President Eisenhower’s Directive of April 14, 1954, which followed the recommendations of the Cabinet Committee on Mineral Policy, “long term” objectives are established for minerals (including metals). These objectives are computed by discounting completely all foreign sources of supply except Canada, Mexico, and the countries bordering on the Caribbean and then comparing the supply data to the total requirement. The long term objectives are generally somewhat higher than the minimum objectives. A special safety factor has been included, pursuant to a Presidential Directive of July 15, 1954 that, “When it is determined that a material is strategic and critical and should be stockpiled under the Stock Piling Act, the long term stockpile objective in no case should be less than one year’s normal United States use of the material.”

c. Quality

While it is recognized that there are many grades of each major material, almost all of which will be used in time of war, stockpile specifications provide for the acquisition of only a small number of grades—among the higher and medium qualities. In time of war material in the stockpile can then be blended with lower grade materials that might be produced under wartime conditions. In certain instances where Korean War expansion programs under the Defense Production Act resulted in government acquisition of materials not meeting stockpile specifications, these substandard materials are not included in the stockpile but instead are segregated and held under separate account, awaiting future beneficiation or possible sale.

C. Stockpile Acquisitions

1. General

In acquiring materials for the stockpile preference is given to material of U.S. origin. The “Buy-American” Act is included in the Stock Piling Act by reference and the present pricing policies thereunder are considered. Where domestic materials cannot be obtained at reasonable prices in adequate quantity and quality to meet stockpile schedules, foreign material is also purchased. Where Stock Piling and/or Defense Production Act contracts will result in expanding productive capacity every effort is made to encourage such expansion preferably in the U.S. or, alternatively, in nearby foreign countries that will be strategically accessible in time of war. When stockpile objectives are substantially on hand the rate of procurement is generally tapered off so as to cause the minimum unsettling effect in commodity markets. In some instances the materials being stockpiled require rotation to prevent deterioration, and where possible rotation is accomplished by “wash sales”—the stockpile material being sold and the replacement material being purchased at the same time so as to avoid market impacts.

2. Danger Points and Minimum Objectives

Since the danger points represent the amounts deemed most critical to meet projected wartime needs for a 3-year war period highest priority is given to stockpile acquisitions necessary to bring the stockpile inventory up to the danger point level. Once the danger points have been achieved, acquisitions toward the remaining portion of the minimum stockpile objective can proceed at a somewhat lower degree of urgency. It is general policy to attempt to achieve minimum stockpile objectives within a period of time consistent with the national security (judged on a material-by-material basis). In the event that supplies from normal sources appear inadequate to permit such accomplishment, then government expansion programs, utilizing where necessary accelerated tax amortization and contracts under the Defense Production Act, are put into operation on recommendation of the responsible delegate agencies.

3. The Long Term Objectives

The long term objectives are generally larger than the minimum objectives and represent a higher level of defense insurance. Consequently, as indicated in the Presidential Directive of April 14, 1954, procurement toward the long term objective, once the minimum objectives have been achieved, generally goes forward only when the material can be obtained at prices advantageous to the government (defined as prices normally lower than individual price trends, with due regard for changes in the value of the dollar), where such procurement will also serve to maintain essential elements of the mobilization base which are threatened (programs for lead, zinc, and metallurgical fluorspar are current examples). Where possible materials are also acquired toward the long term objective in exchange for surplus agricultural commodities, or by transferring to the stockpile surpluses generated under other government programs.

D. Present Status of the Stockpile

1. Minimum Objectives

As of December 31, 1955, minimum objectives were valued at about $6.9 billion and materials valued at about $5.2 billion were on hand. Materials for which the danger points within the minimum objectives were not on hand as of December 31, 1955, were as follows:

Asbestos, Amosite; Bauxite, Metal Grade, Jamaican type; Bauxite, Refractory Grade; Fluorspar, Metallurgical Grade; Iodine; Magnesium; Manganese Ore, Battery Grade, Synthetic; Manganese Ore, Chemical Grade, Type B; Mica, Muscovite Block, Stained and Better; Mica, Muscovite Film, First and Second Qualities; Nickel; Selenium; Silicon Carbide, Crude; Silk, Raw; and Talc, Steatite, Block.

Commitments already made under the Stock Piling and Defense Production Acts make substantial provision for the completion of most of the presently unfulfilled danger points as well as the remainder of the minimum objectives.

2. Long Term Objectives

As of December 31, 1955, long term objectives were estimated to add approximately $4.3 billion to the value of the stockpile, and materials valued at approximately $1.1 billion were on hand toward long term objectives. Commitments already made under the Defense Production Act will result in supplies of materials that will assist in completing many long term objectives.

3. Storage

At the present time approximately 23 million tons of material are on hand in the national stockpile. The material is stored at over 250 locations, some being government facilities and others leased private facilities. Material is stored close to the ultimate points of consumption in wartime, thus stockpiling ton-miles of wartime transportation. Stockpile depots are generally located outside the potential danger areas surrounding likely target centers, and these danger areas are based on the latest guidance on nuclear weapons and their effects.

4. Upgrading

Many of the major materials in the strategic stockpile, such as copper, lead, zinc, and tin, are already stockpiled in metal form and need no further upgrading. In the case of ores and other unrefined materials where ODM, advised by the Departments of the Interior, Commerce, and others, can identify processing facilities that in time of war would be especially vulnerable, a portion, or all, of the minimum stockpile objective is upgraded.

In addition to the foregoing, the Cabinet Mineral Policy Committee recommended, and the President approved, that materials in the stockpile should be upgraded to the point at which they are more readily usable in the economy, whereby electric power, transportation, manpower, facilities, and time—all of which will be short in time of war—are also stockpiled. The President’s Directive of April 14, 1954, provided that upgrading, other than as specifically required to offset the possible loss of vulnerable facilities described above, should normally be done when it can be accomplished at favorable prices and periods of lowered economic activity. Thus, distressed conditions in connection with domestic mineral industries that are an important element of the nation’s mobilization base can be alleviated. The high level of the domestic economy results in little need for such activity at the present time.

E. Disposition of Materials no Longer Needed

Stockpiled materials no longer needed may normally be disposed of only by publication of the proposed plan of disposition in the Federal Register and express approval of the Congress, so that the interests of the United States Government, as well as producers, processors, and consumers, are protected. However, when materials are disposed of by reason of obsolescence (on account of (1) deterioration, (2) development or discovery of a new or better material or materials, or (3) no further usefulness for use in time of war) the express approval of the Congress is not required.

F. Relation of Stockpile to Wartime Mobilization Planning

Mobilization plans “D” and “D Minus” include provision for releases of material from the strategic stockpile in time of war. No detailed release plans have as yet been developed.

G. Relationship of Stockpile to Present Emergency Conditions

At present emphasis is placed on accumulating the minimum stockpile without undue delay so that it will be available in the event of all-out war. However, the Stock Piling Act provides that acquisitions should normally be made, so far as is practicable, from supplies of materials in excess of the current industrial demand. Consequently, where the responsible delegate agencies, in particular the Department of Commerce, make convincing representations that material destined for the stockpile under Stock Piling or Defense Production Acts contracts is urgently needed in the general industrial economy, then deferrals of purchases may be authorized by the Office of Defense Mobilization. In contrast to deferrals, however, releases from the stockpile may be made only (a) on order of the President at any time when in his judgment such release is required for purposes of the common defense or (b) in time of war, or during a national emergency with respect to common defense proclaimed by the President, on order of such agency as may be designated by the President.

H. Authority to Acquire Items Other Than Materials

In recent years there have been proposals to “stockpile” various manufactured articles including railroad cars, tankers, components, and civil defense relief supplies. It is generally felt that where such action is needed it should be done under the Defense Production Act or under specific legislation rather than under the Strategic and Critical Materials Stock Piling Act.

Part II. Possible Use of the Present Program to Further Certain Foreign Policy Objectives of the United States

In past years stockpiling had many significant foreign policy implications. In the years from World War II to the start of the Korean War only very limited funds were available for stockpile procurement, although world supplies would have permitted far greater acquisitions at reasonable prices, Then, with the start of the Korean War, billions were appropriated for stockpiling but meanwhile world demand for materials rose sharply. Thus stockpile procurement had to be accelerated in a period of many shortages since, in 1950 and 1951, it was impossible to determine whether all-out war (might come at any time. Consequently stockpiling buying by the U.S. contributed in part to raising world materials prices. This effect was welcomed by the nations that produce materials, but was of course deplored by those nations that are industrialized consumers.

In past years it was also possible in many cases to have stockpile procurement serve the auxiliary purpose of assisting the economy of certain friendly foreign countries, for example: by buying Bolivian tin, Indonesian rubber, Chilean copper, etc. At present, however, the bulk of the stockpile is either on hand or provided for by commitments already made under the Stock Piling Act and/or the Defense Production Act. Consequently, there are few areas where new stockpile procurement could be of material assistance to foreign materials producing countries.

Table I attached⁴ lists the materials and shows the open quantities still to be acquired toward minimum and long term objectives, together with major producing foreign nations. The quantities shown thereon are, of course, subject to the over-riding rule that in procuring preference is given to domestic producers who offer materials at reasonable prices. Moreover, it may be necessary to reserve exclusively for domestic procurement a major portion of some of the quantities in order to assist in maintaining the domestic component of the United States mobilization base. Moreover, the table does not necessarily imply that procurement will take place in any or all of the specified countries. Procurement, moreover, is subject to the availability of funds, requiring additional appropriations in future years. No commitment on the basis of this table should be made to any foreign country or producer since it is the responsibility of the General Services Administration to make necessary contracts.

Where disposition or release of stockpile materials in accordance with paragraphs E and G of Part I are contemplated, it is important that the possible favorable or unfavorable foreign policy aspects of such disposition or release be given careful consideration. The Department of State normally advises the ODM and the GSA on such foreign policy implications.

Part III. Strategic Materials Aspects of the Disposal of the U.S. Surplus Agricultural Commodities under Public Law 480

A. Administration

1. Authority

Certain operations involving acquisition of strategic materials while disposing of U.S. surplus agricultural commodities are authorized by the Agricultural Trade Development and Assistance Act of 1954 (P.L. 480, 83d Congress).⁵

Under Title I the Government is authorized to purchase or contract to purchase (using accrued foreign currencies) strategic and critical materials for a supplemental U.S. stockpile of such materials as the President may determine from time to time under contracts, including advance payment contracts, for supply extending over periods up to 10 years. The Act provides that such materials may be additional to the amounts acquired under authority of P.L. 520 and that such materials should be released only under provisions of Section 3 of P.L. 520.

Title III of P.L. 480 authorizes the Secretary of Agriculture to protect the funds and assets of the Commodity Credit Corporation by barter or exchange of agricultural commodities for strategic materials entailing less risk of loss through deterioration or substantially less storage charges. This title requires that strategic materials so acquired by CCC shall be considered as assets of the CCC and that other agencies of the government, in purchasing strategic materials, shall purchase such materials from CCC inventories to the extent available in fulfillment of their requirements.

2. Organizational Responsibilities

Primary responsibility for agreements under Title I and for programs under Title III rests with the Secretary of Agriculture. The ODM determines materials to be purchased or contracted for the supplemental stockpile and the GSA assists in procuring and storing such materials. The costs incident to storage operations are borne by GSA appropriations to administer the Stock Piling Act.

B. Supplemental Stockpile Authorized by Title I of P.L. 480

ODM determines quantities and qualities of materials suitable for the Supplemental Stockpile. The ODM, in paper CFEP 528/5 dated December 28, 1955, and in paper CFEP 528/6 dated February 8, 1956,⁶ recommended that:

• “a. The Supplemental Stockpile shall in general include only those materials on the official list of strategic and critical materials for stockpiling for which long term objectives have been established;
• “b. As a general rule the quantity to be authorized for the Supplemental Stockpile be 50% of the long term objective, with the further provision that in no case will a quantity be established for the Supplemental Stockpile that will result in the total quantity of any material in the hands of the Government exceeding the total projected 5-year war national security requirement; and
• “c. Each material to be obtained for the Supplemental Stockpile should be carefully reviewed on a “case-by-case” (i.e. material-by-material) basis by the Office of Defense Mobilization Interdepartmental Materials Advisory Committee to ensure that proper consideration has been given to the possible need for maintenance of the domestic component of the mobilization base as well as the maintenance of materials producing capacity in nearby reliable countries.”

The Council on February 14, 1956, approved the use of the above criteria, as an administrative measure for determining the types and quantities of materials that should be acquired for a Supplemental Stockpile through barter of CCC-owned stocks of surplus agricultural commodities.⁷ In taking this action, the Council emphasized that the criteria adopted is a means of administrative limitation and control over acquisitions by these barter transactions and the materials so acquired are not for national defense purposes. On the other hand, the various categories of materials for acquisition in the Strategic Stockpile were established after extensive studies and considerations of our national defense requirements, and their use as a guide and measure for acquiring materials by barter for a Supplemental Stockpile is based on their fundamental and long term value to the economy of the United States.

C. Barter to Protect CCC Assets

Where ODM has authorized the GSA to work out programs involving barter of agricultural materials for strategic materials destined for the minimum or long term stockpile objectives, barter activities can and do assist in meeting defense objectives. In such cases CCC is reimbursed for strategic materials transferred to the strategic stockpile. However, unrestricted barter activity to protect CCC assets could occasion some difficulties for the defense program. For example, the ODM is currently reserving certain space within its unfulfilled long term objectives for certain metals and minerals so that, in the event that the domestic industry is threatened at some time in the future, procurement toward the remaining portion of the long term objective could aid in maintaining the mobilization base. If, for such a material, the CCC has meanwhile on its own authority accumulated large stocks of foreign material to protect its assets, government purchase of domestic material for the long term objectives could be more difficult to justify. Moreover, since the law contains no limitations on the manner in which the CCC may dispose of the strategic materials acquired under Title III, this places the CCC in the position of being able to seriously affect normal markets for strategic materials by disposing of accumulated materials in quantities well beyond those routinely traded in commercial circles. The knowledge that such stocks are being accumulated and held could well operate to inhibit expansion by private capital of strategic materials production essential for defense purposes.

To properly insulate such stocks the Council on Foreign Economic Policy endorsed the idea that provision should be made for transfer of such materials in excess of the needs of the strategic stockpile to the supplemental stockpile. Section 306 of the Committee print of the Agricultural Act of 1956 (S. 3183, Calendar No. 1503, dated February 10, 1956) would provide such authority.

Part IV. Stockpiles of Domestic Minerals Under the Domestic Minerals Program Extension Act of 1953

Shortly after the start of the Korean war, the Government authorized (under the Defense Production Act) several domestic mineral purchase programs under which the Government guaranteed to buy materials delivered to it by any producer at prices substantially in excess of normal prices. These programs were initiated as a hedge against the possibility that all-out war might come sometime in 1951–1952, under which circumstances those domestic minerals would have been required to meet defense needs, since the stockpile under P.L. 520 was then far from complete and other major expansion projects required several years to get into production. These programs covered asbestos, beryl, columbium-tantalum, manganese, mica, tungsten, and chrome and were scheduled to expire at the ends of various time periods (generally from 3 to 5 years) or when quantities specified in the program had been accepted by the Government. Specifications for some of the materials were lower than stockpile specifications under P.L. 520, but material usable by industry was normally purchased. However, in the case of the low-grade manganese ore purchase program it was recognized that mills would have to be erected near the purchase depots to beneficiate the low-grade ores purchased.

It was originally contemplated that the programs would not be extended by the defense agencies unless extension in time or in quantity were needed for defense purposes. However, in 1953, the Congress passed the Domestic Minerals Program Extension Act of 1953 (P.L. 206, 83d Congress, August 7, 1953)⁸ which made a blanket 2-year extension of the original program termination dates. Consequently, in the case of certain of the materials, the Government has been required to buy materials that would not otherwise have been purchased for defense purposes. In 1955 the Congress passed H.R. 6373 which in general would have doubled all quantities that the Government offered to purchase under the original program. The President on August 14, 1955 vetoed H.R. 6373 on the basis that it would have continued purchase of excess quantities of materials at prices considerably in excess of market prices for certain minerals after defense needs had been met.

Where material from these programs meets stockpile specifications, and where it can be applied toward existing minimum or long term objectives, the material is added to the strategic stockpile under P.L. 520. Materials that (a) do not meet stockpile specifications or (b) are in excess of the long term stockpile objectives are held by the GSA in a separate account; they could be disposed of under the resale authority of the Defense Production Act but, under current conditions, the possibilities of disposition appear remote, even assuming substantial loss upon resale.

1. Source: Department of State, E–CFEP Files: Lot 61 D 282A, U.S. Stockpile Program—CFEP 526. Secret. The source text bears no drafting information. It was sent to members of the Council on Foreign Economic Policy under cover of a memorandum by Cullen dated March 7, on the subject of CFEP 526.
2. Reference is to the NSC meeting of January 12; see supra.
3. For text, see 60 Stat. 596.
4. Not printed.
5. For text, see 68 Stat. 456.
6. CFEP 528, not printed, is entitled “Authorities and Programs for the Disposal of Surplus Agricultural Commodities Abroad.” (Eisenhower Library, CFEP Records)
7. The minutes of the CFEP meeting, February 14, are not printed. (Ibid.)
8. For text, see 67 Stat. 417.