811.24 Raw Materials/533
The Secretary of State
to President Roosevelt
Washington, January 15,
1940.
My Dear Mr. President: I wish to bring to
your attention the enclosed statement approved unanimously by the
members of the Interdepartmental Committee on Strategic Materials
with respect to appropriations for the purchase of reserve stocks of
strategic materials under the authority of the Act approved June 7,
1939.2
In view of the present world situation, I have no hesitation in
commending the statement and recommendations of the
Interdepartmental Committee. It is my judgment that there should be
no unnecessary delay in acquiring minimum reserve stocks of those
materials, essential to American industry and the national defense,
which would be most difficult to secure from abroad in the event
that warfare is extended or intensified.
The problems now faced by industry in securing adequate supplies of
essential raw materials, and the prospect of even greater
difficulties as the war continues, indicate the urgency of prompt
action.
Faithfully yours,
[Enclosure]
Statement by the Interdepartmental Committee
on Strategic Materials Regarding Appropriations for the
Purchase of Reserve Stocks of Strategic Materials
- 1.
- The Act approved June 7, 1939 (Public No. 117, 76th
Congress) authorized to be appropriated, for the purchase of
reserve stocks of strategic materials, the sum of
$100,000,000 during the fiscal years June 30, 1939 to June
30, 1943.
- 2.
- With the approval of the President and the Budget Bureau,
the budget estimate for the Treasury Department for the
fiscal year beginning July 1, 1939 included an item of
$25,000,000 for this purpose. This sum was cut to
$10,000,000 by the appropriation committees of the two
houses of Congress however and only that amount was
appropriated.
- 3.
- Approximately $8,000,000 of this sum was obligated by the
end of December and it is anticipated that the entire amount
will be obligated by the end of January, 1940.
- 4.
- Much could be said in favor of the immediate appropriation
of the entire remaining portion ($90,000,000) of the
authorized total of $100,000,000. The Committee believes it
highly advisable that Congress be requested to appropriate
at least an additional $40,000,000, preferably $15,000,000
as a deficiency appropriation to be made available
immediately and $25,000,000 for the fiscal year beginning
July 1, 1940. The considerations which, in the opinion of
the Committee, strongly indicate the desirability of at
least this minimum immediate program are, briefly:
- (a)
- Due to the present heavy production schedules,
commercial stocks in this country of many vital raw
materials are now considerably below normal.
- (b)
- In the case of many materials American industry is
experiencing difficulty in securing sufficient
supplies to make possible the reaccumulation of
stocks; releases of materials from foreign sources
of supply have quite generally been limited to the
point where only current consumption requirements in
this country can be met, at least without serious
price increase.
- (c)
- The difficulties in supply and transportation
following the outbreak of war have now largely
disappeared and prices on most materials have
receded. Judging from the experience of the World
War however, difficulties in both supply and
transportation and high prices are likely to be
encountered in the case of many strategic materials
if the present war continues and increases in
intensity. If this Government does not accumulate
minimum reserve stocks of strategic materials as
rapidly as possible, it may quite possibly be faced
with much higher prices and perhaps the
impossibility of securing the necessary supplies,
either because they may be cut off at the source or
shipping may be interrupted.
- (d)
- Should unlimited warfare on sea and in the air
develop, the possession of a reserve of essential
materials might prove to be of vital importance to
this country, not only in support of the national
defense, but also as a means of strengthening a
policy of neutrality.
- (e)
- The use of funds for the purchase of these
materials at this time should be looked upon as an
investment and not an expenditure. It will always be
possible to turn the materials into cash, and in the
event of an emergency they will be worth much more
than their cost.
[Page 252]
-
Dr. Herbert Feis, Adviser on International Economic
Affairs, Department of State, Chairman;
-
Captain H. E. Collins,
Director, Procurement Division,
Treasury Department;
-
Colonel Harry K.
Rutherford, Director,
Planning Branch, Office of the Assistant Secretary
of War;
-
Commander A. B.
Anderson, Office of Chief
of Naval Operations, Navy Department;
-
Mr. James W. Furness, Chief of Branch and Chief Engineer, Metal
Economics Division, Bureau of Mines, Department of
the Interior;
-
Mr. James W. Young, Director, Bureau of Foreign and
Domestic Commerce, Department of
Commerce.
