Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

272. Report by the Special Stockpile Advisory Committee to the Director of the Office of Defense Mobilization (Gray)⁰

January 28, 1958.

SECTION I

Summary of Major Findings and Recommendations

The supply expansion programs initiated during the Korean War and the stockpiles accumulated by the Government virtually eliminate the threat of raw material shortages of the type that impeded past defense mobilization efforts.

The $7,350,000,000 worth of strategic and critical materials in Government inventories, plus production in the United States and readily accessible foreign areas, with a few relatively minor exceptions could easily support an expanded defense industry for several war years.

In previous wars, time and distance helped keep hostile attack from American shores. This may no longer be true. The protection afforded previously by ocean barriers may have vanished with the advent of new weapons and the means of delivering them.

Raw material consuming facilities are generally more vulnerable bombing targets than are raw material producing facilities and inventories. This lessens the probability of serious material shortage problems in nuclear war.

Therefore, the need for strategic and critical materials would be greater in a limited war, or in an economic or political conflict, than in a nuclear war.

Survival, Relief and Rehabilitation

As nuclear attack is today a distinct possibility and threatens the very survival of the American people, this nation must attain and maintain a position of preparedness that is flexible, balanced and within its capabilities.

Annual military expenditures now total about $40,000,000,000. In addition, the Government maintains materials stockpiles and industrial facilities valued at many billions of dollars to support the defense effort. Yet for human survival and relief the Government has stockpiled items, principally medical, amounting to only about $200,000,000.

The Committee recommends that in stockpiling, emphasis be shifted from raw materials to finished items and vital supplies for survival, relief and rehabilitation. Energetic steps should be taken to make coordinated studies in this area and to initiate appropriate programs. (See supplementary statement by Henry H. Fowler in the Appendix.)¹

Strategic and Critical Materials

The stockpiling of materials is still a major element of any preparedness program. Accordingly the Committee makes the following recommendations:

1. All stockpile planning should be revised to conform to the present policy which limits new procurement to meeting shortages for a 3-year emergency period.

2. A new method should be adopted for estimating emergency requirements based generally on industrial consumption patterns, adjusted for emergency conditions. Additional provision should be made for major military and atomic energy programs, as well as for new and increasing uses of high-temperature and other special-property materials.

3. The present methods of estimating reliable supplies for an emergency should be continued.

4. Two stockpile goals should be established for each material, and reviewed annually: (a) Minimum Goals which would assume reasonable reliance on all accessible overseas sources; (b) Greater Security Goals which would assume reliance only on sources in the general North American area. Attainment of the Minimum Goals should be given priority. It should be noted that application of the Greater Security Goals concept to perishable materials would be an enlargement of present practices.

5. When additional amounts of a material are no longer needed for national security, outstanding contracts for future delivery should, if possible, be terminated by reasonable negotiated settlements.

6. The Director of the Office of Defense Mobilization should seek more flexible authority to dispose of surplus materials. This would involve a request for amendment of pertinent legislation. Also the current executive disposal policy should be rescinded.

7. Perishable materials in excess of the Greater Security Goals should be disposed of, when this can be done without unduly interfering with usual markets.

8. In view of current conditions, all commercially usable metals and minerals in excess of the Greater Security Goals should be retained, except when utilization of any portion of the excess of these materials would be in the interest of national security.

9. Materials not meeting stockpile procurement specifications should be upgraded when feasible, otherwise these materials should be disposed of, when this can be done without undue interference with usual markets. Subspecification-grade metals and minerals should be disposed of preferably in a manner designed to encourage development of processes for treating low-grade domestic ores.

10. Quantities of any metals and minerals in excess of defense needs, to be obtained in exchange for agricultural surpluses, should be judged on a transaction-by-transaction basis, rather than under a rigid formula. Consideration should also be given to acquiring survival and relief items in exchange for agricultural surpluses.

General

The Committee recommends that the public be informed to the greatest extent consistent with national security, of details of the stockpile programs including periodic reports of goals and of quantities on hand and on order.

Agencies of the Federal Government, as listed in Section III, provided information for the Committee. In addition, the Committee reviewed a number of other relevant studies.

Representatives of non-Governmental organizations were not invited to submit their views. The Committee believes that these views can be obtained more effectively by the Government, especially if there has been disclosure of stockpile contents and an explanation of the stockpile programs as recommended in this report.

[Here follow Section II, which sets forth in detail important elements of the Committee’s studies and reasons for its conclusions and recommendations, and Section III, which outlines pertinent information concerning the members of the committee and staff and the committee’s operations.]

0. Source: Department of State, E/CFEP Files: Lot 61 D 282A, Supplemental Stockpile Criteria and Administration—CFEP 567. No classification marking. On October 1, 1957, the Director of the Office of Defense Mobilization appointed a 12-person Special Advisory Committee to review the U.S. Government’s current stockpiling policies and programs. Holman D. Pettibone, Chairman of the Board of the Chicago Title and Trust Company, was the chairman of the committee which included Earl L. Butz, Dean of the School of Agriculture, Purdue University; Donald F. Carpenter, General Manager of the Film Department of E.I. duPont de Nemours Co.; Frederick C. Crawford, Chairman of Thompson Products Inc.; Edwin L. Crosby, M.D., Director of American Hospital Association; Henry H. Fowler, Washington lawyer; John D. Morgan, Jr., Washington minerals consultant; Admiral Arthur W. Radford, USN (ret.); General Walter Bedell Smith, USA (ret.); James E. Webb, President and General Manager of Republic Supply Co.; Walter G. Whitman, Head of the Department of Chemical Engineering, Massachusetts Institute of Technology; and Clyde Williams, President of Clyde Williams & Co. All members of the committee concurred in this report.
1. Not printed. In this Appendix, Fowler urged early action by the Executive and Legislative branches of the Federal government to get a program underway and enact appropriations. While coordinated studies would be useful in the long run, Fowler wanted to stress the need for decisive action to initiate the program.