406. Letter From Secretary of the Treasury Kennedy to the Director of the Office of Emergency Preparedness (Lincoln)1
Dear General Lincoln:
Representatives of this Department have been discussing with Deputy Director Russell of your Office possible action which the Treasury might take to alleviate domestic shortages of nickel resulting from the industry-wide labor strike in Canada. It has been suggested that the Department of the Treasury make available a portion of the nickel stockpile of the Bureau of the Mint. Additionally, the question has been raised as to whether it would be possible for the Office of Foreign Assets Control to authorize under the Cuban Assets Control Regulations importations of nickel oxide and refined nickel from France.
The Mint’s current stockpile of approximately 40 million pounds of nickel is adequate for purposes of meeting our projected needs for an estimated period of four years. This four-year estimate contemplates approval of new legislation for production of a quantity of cupro-nickel dollars and half-dollars. A substantial reduction in our nickel stockpile, coupled with a prolonged strike within the nickel industry, could create a nickel shortage for Treasury within two years. Accordingly, release of a portion of the Mint nickel stockpile would not be now feasible. Further, we do not have legal authority to sell, loan or otherwise make available nickel from our stockpile for use by private industry. [Page 1010]Special legislation would be required for us to make such an accommodation.
The Cuban Assets Control restrictions on the importation of nickel and nickel products from France have been imposed as a consequence of the substantial purchase of Cuban nickel by Societe Le Nickel (SLN), the sole French producer of nickel. We have asked the Department of State to explore immediately with SLN the existing situation, including stockpiles of Cuban material on hand in France, and SLN’s planned imports from Cuba and Caledonia. If it is clear from these discussions that SLN has used up its Cuban stockpile and does not anticipate further imports under the existing contract, it would then be possible for Treasury to terminate all restrictions on nickel imports from France.
If the importation restrictions could not be generally removed, inquiry was made as to whether Treasury could authorize (i) imports of nickel oxide for certain civilian consumption to avoid employee lay-offs, or (ii) nickel imports for priority defense production needs. If the essential facts have not changed, thus not warranting termination of all restrictions, I do not believe it would be advisable to make exceptions authorizing importation of nickel oxide for civilian consumers.
Regarding defense production requirements, if it appears from the Department of State’s discussions with SLN that the latter has supplies of nickel available for sale to the United States for defense production needs, it would then be necessary, I believe, for the National Security Council to make a decision as to whether it would be preferable to authorize a release of nickel from the national stockpile for common defense needs, or alternatively to authorize such imports of nickel and nickel products from France.
Substantial domestic and foreign policy problems will arise from any relaxation of our current policy restricting imports of nickel subject to Cuban Assets Control regulations. Any action affecting domestic nickel supplies should be carefully considered, because it might appear to be a strike-breaking action.
With best wishes,
- Source: Washington National Records Center, Department of the Treasury, Secretary’s Memos/Correspondence: FRC 56 74 A 7, Classified-OEP 1969. Confidential. Drafted by S.L. Sommerfield and W.L. Dickey on September 22. Copies were sent to McGinnis, Jurich, Eggers, Englert, Sommerfield, and Schwartz.↩
- Printed from a copy that indicates Kennedy signed the original.↩