811.24 Raw Materials/39e

The Adviser on International Economic Affairs (Feis) to the Acting Director of the Bureau of the Budget (Bell)

My Dear Mr. Bell: Confirming what I said to you over the telephone on January 30, with respect to legislation which would authorize the purchase of stock-piles of strategic materials, I am glad to furnish you the following information in this written form.

Last spring Senator Thomas of Utah, serving as chairman of the subcommittee of the Senate Military Affairs Committee dealing with strategic materials, invited experts from the interested Departments to assist him in drafting a bill which would provide for the accumulation of reserve stocks of strategic materials. Officers of the State, War, Navy, Interior, and Commerce Departments cooperated in the drafting of a bill which was introduced in the last session of Congress by Senator Thomas as S. 4012.2 That bill was submitted to the interested Departments for comment late in the last session of Congress. The Department of State and the other Departments concerned were prepared to submit favorable reports on the bill but were informed by the Bureau of the Budget that it was not in accord with the President’s program.

The study of this problem has continued in the various Departments. On December 23, the Acting Secretary of State, with the approval and support of the Secretaries of War, Navy, Interior and Commerce, sent the President a copy of a report of an interdepartmental committee3 recommending legislative action along the lines of the Thomas bill. Then on January 16 the Under Secretary of State, Mr. Welles, discussed the matter with the President and found the President in agreement with continued study of the matter by the interdepartmental committee, including discussion with Senator Thomas of amendments [Page 849] to the bill considered desirable by that committee, so that the Thomas bill might fully represent the views of the executive branch of the Government. The President said that he did not approve any effort at this time to secure the appropriations which would be authorized by the Thomas bill, since this step would upset his budget arrangements. At the President’s suggestion his position on this point was made clear to Senator Thomas and also to Congressman Faddis, who had introduced in the House a bill identical with the Thomas bill.

Following the President’s approval, the Secretary of State communicated with the Secretaries of War, Navy, Interior and Commerce, suggesting that the functions of the interdepartmental committee in this field be continued on a formal basis, and it is expected that this action will be taken. The amendments considered desirable by this committee have already been incorporated in a bill which Congressman Faddis has introduced as H. R. 3320,4 as a substitute for his earlier bill, H. R. 2643.5 The Thomas bill was introduced as S. 572,6 before these amendments had been suggested, but the bill has been referred to this and other Departments for comment and it is expected that all of these Departments will suggest substantially the same amendments in their replies.

I believe the Departments concerned, and both Senator Thomas and Congressman Faddis, are agreed that no attempt should be made to secure appropriations for purchases of strategic materials until such appropriations would meet with the President’s approval. In the meantime, however, it is considered desirable to secure legislative authorization along the lines of the suggested bill, since such action would represent a definite statement of policy agreed upon by the executive and legislative branches of the Government and would serve to discourage attempts to secure legislation along less desirable lines. One of the principal advantages of the bill under discussion would be the authorization to purchase the most needed materials, of the highest quality, in the cheapest market; this arrangement would be modified only by the restrictions of the Buy-American Act,7 which, in practical effect, would be unlikely to result in large purchases from domestic sources. Too many of the other bills introduced in this field seek the expenditure of large sums, ostensibly in the interest of national defense, but in reality chiefly for the purpose of providing a subsidy for certain lines of domestic production.

Sincerely yours,

Herbert Feis
  1. Congressional Record, vol. 83, pt 6, p. 6718.
  2. Not printed.
  3. Congressional Record, vol. 84, pt. 1, p. 859.
  4. Ibid., p. 402.
  5. Ibid., p. 223.
  6. 41 U. S. C. 10a.