443. Memorandum From the President’s Assistant for Domestic Affairs (Ehrlichman) to the President’s Assistant for National Security Affairs (Kissinger)1
- Disposal of Stockpile Tin
Our $688 million budget projection of stockpile receipts for FY 1973 includes about $35 million for sale of around 10 thousand tons of excess tin on the assumption that the President’s current ban on tin sales would be lifted and that we would be in the market for the full year. I understand that for the past several years GSA has been directed by the White House not to sell tin in the domestic market in view of international policy considerations. As you know, this matter is a very sensitive political issue with the Bolivian government even though our tin disposals would constitute less than 5% of world production. Lifting the ban would permit GSA to sell the tin with due regard for impact on the market as required by law. Since it is nearly a year since the President ordered an extension of the tin freeze last April,2 it would be most helpful to get a current evaluation to see if there are valid reasons why the President should not now be requested to lift the ban. In the past we have sold considerable amounts of tin with no significant impact on world prices—30 thousand tons in 1965 and 12 thousand tons in 1967. From the domestic side it would make good sense to move at this time—
- —The domestic market is strong at about $1.76 to $1.77 per lb.;
- —U.S. industry would favor sale of our tin surpluses (U.S. Steel has already asked GSA to exchange tin for their purchase of titanium); and
- —Sales should help our balance of payments since tin is not produced domestically but consumed here in large quantities.
For many of our stockpile commodities we have had difficulty in getting OEP requirements lowered and disposal authority enacted by the Congress. Neither of these obstacles is present in the case of tin disposal which is solely an administrative matter. Even the Armed Services Committees have urged us to get into the market.3[Page 1086]
I recognize that any disposal of tin would be unwelcome by Bolivia, Malaysia, and other tin producing countries. However, in view of the budgetary significance for 1973 and subsequent years, I think we should have a fairly hard assessment of why the President should not be asked to rescind the ban on tin sales—at least by June 30, 1972.
As you know, the tin producing countries have always opposed selling tin on the grounds that it would upset our foreign relations posture. I hope that the NSC will be able to give us an independent estimate of our present foreign policy interests in this area. I would think there might be some room for a change from our practice of the past five years—particularly since domestic requirements should now increase in view of the economic upturn and recommended increases in defense procurement. Perhaps there may be some room for negotiation to stretch out the sales or to consider other concessions which are of interest to these countries.
- Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 396, Stockpile (1973). No classification marking. Attached to Document 445. Also attached is a March 24 memorandum from Hormats to Kissinger proposing a reply to Ehrlichman, on which Kissinger wrote: “Before you send this—does tin affect Bolivia? If so see me.” Hormats’ proposed reply to Ehrlichman had no specific reference to Bolivia.↩
- See footnote 2, Document 440.↩
- Not further identified.↩