An Organizational History of the Defense

National Stockpile Center: America’s

National Stockpile

CHAPTER ONE: How Stockpiling Began

relevant although written 55 years ago:

owned by the United States government, stored mostly on government-owned

property and in government warehouses. Currently, there are 40 different

commodities stockpiled nationwide.

market value is approximately $1.5 billion (2005 value). These are recoverable

assets owned by the people of the United States. In this sense, the Stockpile acts

essential civilian and military uses in times of emergencies. This function is

closely linked to military and civilian national security requirements, of course

while taking into account the formulation of DNSC objectives. There is a direct

relationship with industrial mobilization planning and the disposition of the

Stockpile in time of national emergency.

emergency. In the final analysis, materials are stockpiled on the basis not of the

manpower required to produce them, but of the manpower that is required in

wartime if these materials are not available.

Armed Services).

Stockpiled. (Stockpile Report to the Congress, 23 January 1950, pages 15-17)

Now that DNSC has been explained, a look back in time will help to more fully

understand the necessity of maintaining stockpiles of rare and vital materials prior to

modern times. Before looking back, below is a current list (as of 2006) of the materials

considered strategic and critical, by DNSC. At an earlier time, this list contained 93

Soon after World War I, leading American scientists sought to educate

industrialists and those in government on the necessity of having a national minerals

plan in hope that America would not return to its old isolationist thinking. In fact, one of

the country’s leading geologists and professor, Charles K. Leith, promoted a novel idea.

Armistice as the President’s minerals expert. He also worked for Baruch in the War

Industries Board during the recent war. He proposed a world institute to manage raw

materials, in an “internationalist” approach of control. Leith teamed up with leading

experts of the period such as Josiah E. Spurr, who had become President of the Mining

and Metallurgical Society of America, H. Foster Bain, then Director of the U.S. Bureau

of Mines, and George Otis Smith, Director of the U.S. Geological Survey (serving more

that ensured the adequate raw materials dissemination to the entire industrial world.

They saw the quest for raw materials as a world problem and sought solutions as such.

Still, they wanted to protect American companies from other countries that might use

embargoes, or other such protectionist policies, which would hurt the domestic mining

industry. They saw their plan through the eyes of free-trade advocates and not through

the interests of pro-tariff supporters. They did believe in some form of “tariff” controls

for the major strategic raw materials of copper, manganese, chromium, and tungsten

since all but copper had to come from foreign markets. The report they put together

came in the early 1920s soon after the war and in the same timeframe that ANMB began

to study strategic materials. It also came at a time that the mining companies blasted

legislation the government could build a stockpile of some 4,000 tons of antimony,

which at that time came to a six-month supply for American industry. Yet, they

hesitated to back more stringent protectionist legislation for other materials believing it

would actually lead to depleting reserves of vital materials like chromium, which in turn

would guarantee future dependence upon foreign sources. (Eckes, The United States

and the Global Struggle for Minerals, page 38-40, hereafter referred to as Struggle)

Leith and his colleagues also advocated the establishment of another permanent

stockpile would contain a very high-quality ferromanganese between 78-82 percent pure,

could only buy this quality ferromanganese ore from foreign sources, like Russia (the

Soviet Union), India, the Gold Coast of Africa, and Brazil. Cuban deposits had just been

discovered that contained large amounts of manganese ores measuring in at 20 percent

pure, but without the phosphorous contained in the Russian manganese ores. Even

Cuban ore to the concentrated ferromanganese level because it contained fewer

impurities to eliminate. This held especially true in the case of American mined low-

grade manganese ores, which had high amounts of impurities. Plus, the Cubans worked

cheaper, and the mined ore traveled a shorter distance than Russian or other such

foreign-based ores. Both the Cuban and foreign mined ores cost less and had higher

percentages of ferromanganese quality than those domestically produced. Also, the

page 41; Lecture Series, L34-015, “Strategic Commodities,” by LTC Charles T. Harris,

Jr., Ordnance Department, Chief, Commodities Division, Planning Branch, OASW,

March 26, 1934, page 5 of 12, Report Number:

015.pdf)

Congress never enacted the minerals policy, which Leith and his experts

envisioned. This stemmed from America remaining somewhat ignorant of the mineral

problem, and those who knew something about it believed in a phenomenon then being

in 1893. Turner carried his theory even further in his book titled The Frontier in

American History published in 1921. Simplistically speaking Turner believed that

American institutions had been shaped by the rugged frontiersman going forth to

conquer the American frontier. Other historians picked up the mantle from Turners’

thesis like Walter Prescott Webb, who attempted to show that most of Western

Civilization had been developed by earlier frontier-concurring “individuals,” and

establishing societal institutions from this experience. Webb introduced America to this

ideal through his works like The Great Plains (1931) and The Great Frontier (1952).

Americans took to this Frontier Theory based on many of the heroes average citizens

identified with like Daniel Boone, Davy Crockett, and latter nineteenth-century

personages like Kit Carson and Buffalo Bill Cody. Through his wild-west show, Cody

sold many citizens on the idea that the exploits of a single American individual going

did America need any national policy that would only constrain the individual in

therefore, held little chance in being formed during this period. If American experts

could not agree or accept a national policy, they certainly could not think beyond the

borders in terms of a global solution! In Congress the idea of “self-sufficiency” and

protecting American mining industries through tariffs continued to dominate thinking.

disproved the Frontier Theory, but in 1922 Congress passed protective measures through

the Fordney-McCumber Tariff. This legislation placed a duty on several imported raw

materials that had previously been duty-free. Protection legislation won out over the

free trade of raw materials, and international agreements. Congress hoped the tariff

would prod domestic producers to increase production, but by the 1930s this had not

happened. On the eve of World War II, the tariff on manganese had produced no

tariff approximating 100 percent did not increase the development of domestic materials

to any great extent)“

(

http://en.wikipedia.org/wiki/The_Significance_of_the_Frontier_in_American_History,

for Turner’s thesis (accessed 27 September 2007); for Webb, The Great Plains, Preface,

by Walter Prescott Webb, the University of Nebraska Press, Lincoln and London, 1931,

First Bison Book Printing, 1981, 525 pages)

During the 1930s, the idea of establishing a national stockpile continued to have

vital minerals to fuel their ever-growing war machines. In there view, the former Allied

nations monopolized the world’s raw materials sources. Since the disgruntled countries

could not acquire many raw materials, they turned to violently expansionistic policies.

To Leith and his associates this came as no surprise. They held that geography and

history pointed to the instability of Europe. Thus, war looked almost inevitable. Those

like Leith, who had accompanied President Wilson to Paris, believed nothing but strife

would mark the desire of nations for raw materials in the industrialized twentieth-

century.

Many in the U. S. who backed the mining lobby’s idea of self-sufficiency did not

grasp that world conditions had changed radically after World War I. Technology and

the expansion of trade became evermore intertwined in the new national economies—

sufficiency. This rapid change wound around those with militarism and a quest for more

undecided at the Paris Peace Conference, and most nations seemed bent on self

sufficiency, leading them away from the original concept of a the League of Nations. He

correctly believed this would result in another conflict down the road. (Struggle, page

10, 25-27)

In the early 1930s, Colonel Edward M. House, former Special Assistant to

President Woodrow Wilson, also a member of Wilson’s Peace Delegation after World

War I, referred to nations in terms of “Haves” and “Have Nots,” in reference to raw

materials. The “have” nations either contained deposits of strategically important

materials, or could procure these materials from friendly nation-partners and colonies.

In turn, they reconstituted these minerals, materials, chemicals, and other such natural

decisions during the interwar years to “correct” such material deficiencies and this

threatened the peace of the world. (National Defense University Lecture Series, L38b-

016, “Strategic and Critical Materials,” by LTC H.D. Rogers, U.S. Army Medical

Corps, Chief, Commodities Division, Planning Branch, O.A.S.W., February 19, 1938,

page 2, of 22, Report Number: http://www.ndu.edu/library/ic7/L38b-016.pdf)

The future Axis powers, Germany, Italy, and Japan, began devising ways of

securing badly needed raw materials, and attempting to deprive other nations like Great

American military forces envisioned by the war planners during the interwar years

reflected the traditional maximum of a 4 million-man army well into the 1930s (the

rough total of the military during World War I). Materials needed for the sustenance of

the general populous, which helped make the weaponry, also became critically

important. This became especially so for the United States as the nation relied more and

more on foreign sources for supplies of strategic and critical items. (Lecture Series,

L38b-016, “Strategic and Critical Materials,” page 2, of 22; http://home.u-s-

history.com/pages/h1051.html, “Politics and Public Service, Edward M. House, 1858-

1938,” (accessed 27 September 2007)

Despite the troubling world events, the United States concentrated on the

problems associated with the Great Depression. President Franklin D. Roosevelt wanted

threats. However, the United States would make no overt attempt to expand military

other world powers. Once again, the American president would play the neutrality card,

and this frustrated those who saw the inevitability of war coming. (Bullis, L. Harold and

James E Mielke, Strategic and Critical Materials, page 165)

establishment of a reserve of strategic materials while he served on a governmental

interdepartmental committee. This stance resulted from fear of war when Italy invaded

Ethiopia. Feis believed the United States could purchase $25 million worth of materials

per year through domestic and foreign markets, and he further suggested the bartering of

surplus agricultural products as payment for the materials. Still, Congress did not act

even in light of naked Italian aggression towards world peace.

In February 1934, the military planners in OASW prepared studies to establish a

strategic stockpile plan under direction of the Assistant Secretary of War, and then

staffed it through the War Department. That year the planners publicly approved a plan

settling the lingering war debts from World War I by exchanging strategic materials for

payment. They even suggested bartering surplus agricultural products in exchange for

strategic materials. Nothing came of establishing a stockpile, but the importance lies in

the consideration of the idea. ((Struggle, page 74-76); Lecture Series, L34-015,

“Strategic Commodities,” pages 4 and 12)

First Stockpile

through the Naval Appropriations Act of 1938. Through the Act the Navy received a

small appropriation of $3.5 million for the first stockpile of strategic and critical

materials accumulated by a United States military service in preparation for a national

emergency. The Navy quickly purchased a small stockpile of tin, ferromanganese,

tungsten, chromite, optical glass, and manila fibers. In the next two fiscal years, the

Navy received additional installments of $500,000 for its stockpile. (Gutchess, Selling

Defense Materials, page 5-6)

After graduating from Pennsylvania State College in 1915, Faddis served as a

sergeant in the Tenth Infantry, Pennsylvania National Guard when President Wilson

activated the guard for duty along the Mexican Border in the Punitive Expedition of

1916. Sergeant Faddis rose to the rank of lieutenant colonel during his service in World

a Bronze Star for his services during World War II. (Lecture Series, L38-016,

http://www.infoplease.com/biography/us/congress/faddis-charles-isiah.html, “Faddis,

Charles Isiah, 1890-1972,” (accessed 27 September 2007); Struggle, pages 75-76;

Stockpiling Report to the Congress, 23 January 1947, page I-1 for the exact materials

purchased by the Navy)

In the late 1930s, legislation to establish a complete national stockpile received

consideration by Congress, like the Faddis legislation, which had endorsement of the

War Department. However, the War Department did not believe it had jurisdiction to

comment on those bills dealing with stockpiles for “private interests,” or not specifically

pertaining to national defense. This gives an indication of how much interest existed

then in establishing some sort of stockpile of strategic and critical materials—both

th

responsibility for continuing studies of strategic materials, and for developing existing

domestic reserves of materials. This pleased the procurement planners in OASW since

BOM had rendered valuable assistance to the agency on studying strategic materials for

some years. (Lecture Series, L39-039, “The Commodities Division,” pages 13, and page

3 of 5 on the enclosed Discussion Appendix)

With legislative initiatives concentrating on a National Stockpile coming and

going in Congress, the 1936 Industrial Mobilization Plan sponsored by ANMB

Resources Administration had powers superseding those of the War Industries Board in

World War I, controlling everything but the selective service and public relations.

Importantly, to the history of stockpiling, the War Resources Administration had the

responsibility for acquiring analyzing, and controlling strategic and critical materials in a

war setting. Although the plan failed to consider control over the allocation of materials,

such as steel, copper, and aluminum, this put stockpiling squarely within the context of a

government-established agency designed for war preparation and national defense. As

such, the 1936 Industrial Mobilization Plan served planners well as a precursor for

establishing separate stockpiling activities, which began before the United States entered

World War II. (Schubert, Mobilization, P 7).

Japan faster in their imperialist quests to obtain what they perceived to be their rightful

reality that each of these nations had limited supplies of raw materials hindering them

from gaining an advantage over the other industrialized nations of the world. In fact,

they saw nations like Great Britain and its vast Commonwealth, rich in raw materials,

and the United States with similar abundances of natural resources with a network of

raw materials they needed for advancement. In this analysis they happened to be

correct. The possessions of Great Britain and the United States combined equaled about

75 percent of the world’s essential raw materials. Scientists like Charles K. Leith

pointed out that a primary objective for the aggressive moves made by the Nazi German

government had to do with obtaining what it deemed ‘adequate’ raw materials.

Naturally, what Chancellor Adolph Hitler meant by an ‘adequate’ quantity included

Having, or not having, raw materials could make or break a modern nation, but it

takes much more than just possessing such ingredients. Nation’s needed the

infrastructure to extract, or acquire the materials, and then they needed the abilities to

turn these into industrial products. They also needed to have an educated and skilled

labor force to work the factories and businesses vital to making industrialized nations

strong. Certainly it also took a government compatible with the economic system of a

country, such as a democratic and flexible form like that of the United States. As a

“have” nation, America encompassed all of these ingredients and more. The United

in such large quantities that someday and perhaps sooner than later, the nation would run

out of these vital resources. Leith believed the nation should preserve much of the

domestic resources as a last resort “reserve.” Further, he and other mineral experts

believed the best solution for protecting these reserves lay in the use of natural resources

the RFC, the Rubber Reserve Company and the Metals Reserve Company, established

on 28 June 1940, for such purposes. Consecutively, on 22 and 29 August 1940, the RFC

created the Defense Plant Corporation and the Defense Supplies Corporation assisting

with the production of war supplies made from the large purchases of strategic and

critical raw materials authorized in the legislation. RFC’s subsidiary corporations

made the large purchases of strategic and critical materials that transferred to super-

agencies established by executive orders that handled the vast industrial mobilization

efforts. These included the Supply Priorities and Allocation Board (SPAB), which

II defense production responsibilities that turned America into what Roosevelt had

supply and product necessary for war production. This agency handled all war

production activities similar to the War Industries Board during World War I, but as

mentioned before, on a much larger scale. In fact, the Director of the WPB, Mr. Donald

Nelson is the person stating that swamped the WIB by ten times over. Nelson used

difficulties associated with managing America’s vast economic war effort during World

War II. (Arsenal of Democracy, page 342; Stockpile Report the Congress, 1946, page II-

2; EH.Net Encyclopedia:

http://eh.net/encyclopedia/article/butkiewicz.finance.corp.reconstruction,

customers alike, and WPB used it throughout the remainder of the war. The CMP made

a direct and positive contribution to managing the strategic and critical raw materials of

the nation that ultimately helped bring a swifter end to the war. The CMP helped the

United States to pull out of the gigantic slump beginning to affect war production in the

early part of 1942, when the Axis Powers seemed to be winning the war. According to

Nelson, the Allies came dangerously close to losing the war in this early stage of World

War II although much of this information did not surface fully for public consumption.

In this respect, WPB and the CMP benefited from the experiences of the War Industries

on Contemporary History, June 25, 1991, No. 5, Navy Historical Center Department of

of Production, 1920-1942, by Dr. Thomas C. Hone, Pages 1-17; Morgan, The Domestic

Mining Industry of the US in WW II, page 230)

Although the CMP worked out the allocation crisis brewing in the middle of

materials for many industries. The limited supplies of raw materials never caused a total

shortage of end products during the war, even though in the case of rubber, and some

other end products, modifications took place to keep the shortages at bay through the use

of synthetic substitutes. In 1940, through urging of the Advisory Commission of the

Council of National Defense (NDAC), the government began looking at building

synthetic rubber plants. The Japanese had captured the Asian countries, which provided

on synthetics in 1946. (Hearings Before the Special Subcommittee of the Committee on

Armed Services, House of Representatives, 89

Session. Stockpiling of

Strategic and Critical Materials; National Defense University, Lecture Series L48-40,

Raw Materials (Ores, Semi-Processed “B” Products), LTC Manfred Hass, 20

November 1947, page 2; Arsenal of Democracy, Page 290 and 295)

During World War II, industrial problems surfaced more as a direct result of

poor estimations of the required raw materials essential to industry in making the end

even existed, and this miscommunication resulted in shortage issues. In their normal

peacetime practices industrial personnel could easily order gears and other such

necessities from other firms. Unfortunately, they learned that with wartime controls, no

such option existed as an alternative. (Lecture Series L48-40, “Raw Materials (Ores,

Semi-Processed “B” Products),”;

(http://www.ibiblio.org/hyperwar/ATO/Admin/WarProgram/WarProgram-2.html page 2

of 8, accessed 27 September 2007; The United States at War: Development and

Administration of the War Program by the Federal Government, Chapter II, “Preparing

for Defense”)

The years 1940-1945 saw the largest increase in industrial and military

procurements made by the United States in the history of the world. Strategic and

anyone’s imagination in the build-up years of 1942 and 1943. Prior to the war, in 1939,

Army and Navy would need to improve and modernize the military services. All told,

the United States produced 5,865 aircraft in 1939, the largest single production year to

that time. In 1940, Roosevelt again called for increases not only in aircraft, but all

military equipages such as tanks and ships. When he announced the need to produce

such numbers even possible. Certainly, the Axis Powers did not think a democracy

could produce at such levels. Yet, between 1 January 1940 and 14 August 1945, the

American workers produced 303,317 military aircraft. Even at that astounding number,

the United States aircraft industry never reached its full potential in reference to quality

or quantity, because the war ended the need for further production. During the war

production of strategic and critical materials increased dramatically, especially in the

to the Congress, May 16, 1940,” http://www.ibiblio.org/hyperwar/Dip/PaW/156.html

pages 527-532, (accessed 27 September 2007)

In 1941, because of the problems associated with gaining accurate estimates,

steel became severely short and threatened the production of ships. To solve this

problem, the government ordered dramatic increases in the production of “plate” steel

within existing steel facilities that had previously produced sheet steel for automobiles.

With new equipment immediately installed for manufacturing of plate steel, the

production levels increased to 1,200,000 tons annually. Otherwise, the country had to

rely on newly built factories for plate production and these did not get finished until

1943 and 1944. Using plate steel helped ease the problem, but only after WPB acquired

the services of Hiland G. Batcheller, the President of Allegheny Ludlum Steel

from 327 million pounds in 1939, to a whapping 2,250,000,000 pounds by October of

1943. (Arsenal of Democracy, page 353-354)

The last of the three most critical of strategic materials, copper, presented a more

difficult situation than steel or aluminum. The government searched every foreign

source available and also increased domestic production. Much came from Mexico and

Chile, but the price came high. Nelson and his associates set up a premium price plan

that included an incentive for producers if they exceeded production quotas. The

for the war effort. The rest came from substituting, scrap, and from foreign sources. As

strategic use as a war material. By using it as a substitution silver became a strategic

material with value in war production. (Arsenal of Democracy, page 354-355)

According to Nelson, no other industry in America did more to help the war

Ford, General Motors, and Chrysler Corporation, if combined together, amounted to the

third largest industry in the United States. They held over 1,000 factories between them

with 850 vehicle and parts companies. They controlled literally thousands of

subcontractors located across the country in 1,375 cities and 44 states. The car

companies had a half-million employees, producing products from many of the raw

materials classified as strategic and critical. In particular they used some of the most

sophisticated assembly-line processes and standardization unequalled anywhere else on

earth. When the last civilian automobile rolled off the assembly line in February 1942,

during the war, WPB managed to get the services of all the manufacturers to convert

from peacetime production to using their vast expertise in making war goods. Nelson

praised their competitive spirit, which carried over from peacetime competition, and

each company’s army of technicians redirected this energy into ways to out produce the

others through developing new techniques and equipment that sped up the mass

production of all types of war goods. They set a high example of results in turning

industry should be shaped after lifting war-related economic controls. Industrialists, and

men like Bernard M. Baruch, feared that surpluses, such as after World War I, would be

vastly devastating to the post-World War II return to a peacetime economy. So,

Congress held debates and commissioned reports centered on what to do with such

surpluses. Should there be a permanent governmental instrumentality to control these

surpluses? Should the United States assist its war-torn allies, and the economies of the

defeated Axis Powers by providing surplus property to help them back onto their feet?

If the United States did this, would there be sufficient surpluses of raw materials for the

postwar transition, the idea of continuing a stockpiling program remained strong. The

stockpile, how would it get materials, what would it contain, and how much of each

strategic and critical material did the nation need for adequate national defense.

Even as early as 1943, the United States Congress began debating the

circumstances surrounding the successful conclusion of World War II. However, the

largest problem they saw ahead had to do with downsizing the gigantic war economy.

The economy then stood at $194 billion worth of goods and services being produced per

year, with a GNP of $98 billion. This amounted to doubling the GNP since the year

1940. In regard to personnel then serving in the military they believed the numbers

handle the influx of military personnel all with the same desire to return to civilian

employment, or if already a civilian employee, where would their next jobs be

generated? Congress had its hands full. (Source: Senate subcommittee Report No. 2,

Report of the War Contracts Subcommittee to the Committee on Military Affairs,

Pursuant to S. Res. 198: “A Resolution to Investigate War Contracts the Termination of

War Contracts and Related Problems,” March 1944, pages 14-15 (GPO, 1944, 17 pages;

Biographical Directory of the U.S. Senate:

http://bioguide.congress.gov/scripts/biodisplay.pl?index=S000196 , “Scrugham, James

already procured under the first stockpiling Act, Public Law 117, still held by the

Procurement Division of the Treasury Department. Thus, Congress fixed the means by

which surpluses would be transferred to the nation’s stockpile under Public Law 117 to

help it grow. By doing this Congress gave recognition, and set a precedent, that

materials acquired by Public Law 117 would be the nucleus of the post-World War II

stockpiling activities. The War Surplus Act gave industry protection from one of their

greatest postwar fears that too much of everything would be dumped onto the economy

minerals industries against such sudden dumping, and this strengthened the outlook of

these industries after the war. While this helped gain industry support, another provision

gave industry a priority over the stockpile program in the purchasing of materials, which

might be in short supply after the war. In this manner, the reconversion program assured

the war, as industry experts feared, a shortage of many materials actually occurred, in

program had to wait until materials became available in excess of the needs of the

American economy. (Stockpile Report to the Congress, 23 January 1947, page I-1)

Piling Act of 1939. This entailed about a two-year period when legislative initiatives

military to achieve military requirements. They believed that for the stockpile to be

anything else, such as one used for civilian purposes, or for aid programs in the future

would require a separately legislated governmental program. (Snyder, page 9)

The physical form in which the materials would be stored also could save

manpower, transportation, smelting services, and refining expenditures. Consequently,

some mineral experts advocated even after the war that storage of metal bars offered a

more efficient material to be stockpiled over the cheaper and less processed stockpiling

War I and World War II had become critical for importing the minerals not produced by

guarantee supplies of materials not available in North America, experts in and out of the

military then believed that a “pre-war stockpile” (meaning before the next war) met the

minimum needs in providing a remedy for any possible lack of transportation. The

stockpile would provide an investment with monetary value as it grew in peace time, and

transportation vulnerabilities just to name a few of the advantages. (Morgan, Domestic

Mining, page 412)

Others cautioned against overproducing supplies in the postwar years that could

not be contained in a stockpile that would send the economy spiraling downward. The

champion of this philosophy remained the ubiquitous Bernard M. Baruch and an

prior to the Battle of the Bulge (December 1944-January 1945). Many believed the war

would soon be over in Europe with what appeared to be an imminent collapse of

Germany, and the United States had to be ready with a postwar economy plan while

simultaneously finishing the war with Japan. The Battle of the Bulge halted the

premature optimism of an end of the war in Europe, and it also instigated another

production increase in war goods. The war in Europe lasted another five months after

the Battle of the Bulge.

in the future, and hang over the postwar market, leading to the depression of future

production, and unemployment and lower than break-even prices. Too much of a

surplus, they believed, would only lead to stockpile troubles in the future. Still, they did

believe in a “strategic reserve,” just not a large one. This stockpile would be made up of

materials not easily procured in this country for use in future wars. Since the price of

materials at the time of their report remained excessive because of the war, they

recommended waiting before buying large stocks of material until the prices fell. This

would allow for reserves, albeit small, but which would be a safety net for the future,

and they felt that deferring purchases to later years would be beneficial in stimulating

international trade at a more appropriate and advantageous time. (Baruch and Hancock,

War and Postwar Adjustment, pages 2-3, 20, 73)

responsible for those materials purchased by the Treasury Department and maintained in

took over the majority of buying strategic and critical materials for the war effort. After

passage of the Act of June 1940, giving RFC broad powers of financial authority for the

war effort, RFC and the ANMB agreed that RFC would be responsible for the huge war

procurement activities, and ANMB would continue operating the much smaller stockpile

military services never requested the remaining $30 million authorized by Congress for

stockpile purchases, but which had not been appropriated for the Stock Piling Act of

1939. (Stockpile Report to the Congress, 23 January 1947, page I-2; Snyder, pages 8-9

on control)

The Department of the Interior also wanted the stockpile operations, as did a few

information. The Bureau of Mines had worked interchangeably with ANMB even

before the Stock Piling Act of 1939, which allowed for the closeness of the stockpile

program within the Department of the Interior. The Interior, through its mandates as a

federal agency, had partnered with the mining industries of the country and its decisions

often favored the interests of the domestic mining industry. Through trade associations,

the mining industry had considerable lobbying interests in Washington. The Department

of State also had a vested interest in stockpiling and so did the Department of Commerce

to a lesser degree. The Office of War Mobilization and Reconversion also claimed

Early in 1945 identical bills came before the House of Representatives and the

Senate regarding a new stockpile program. On 15 March 1945, the House introduced

H.R. 2624, and the next day the Senate introduced S. 752. Afterwards, respective

Committees of Military Affairs received the bills for discussion. The Senate Committee

on Military Affairs sent S. 752 to other government agencies for comments and

suggestions. When this happened, the Bureau of Budget sent its own stockpiling bill to

the Senate, S. 1481 that had differences from S. 752 and H.R. 2624. Apparently, the

Bureau of Budget’s bill contained changes wanted by the Harry S. Truman’s new

note, each of these proposals would replace the Secretaries of War, Navy, and the

Instead they envisioned using a Stockpile Board for administrative control of the

program. On 30 October 1945, Congress held a hearing on both S. 752 and S. 1481 by

the Subcommittee on Surplus Property of the Senate Committee on Military Affairs.

This resulted in further deliberations on 29 November 1945, to further revise S. 752,

Senate on 20 December 1945, and then headed to the House of Representatives the next

day, where it received consideration from the House Committee on Military Affairs.

Hearings lasted through February 1946, and on 4 April 1946 the House reported the bill

with an amendment. This amendment represented a completely rewritten bill. The

House amendment put the control of the stockpile back into the hands of the original

agencies responsible in the first Stock Piling Act of 1939. The House then passed the

version, but gave up some aspects of fiscal arrangements. The House of Representatives

rejected the bill because of the fiscal arrangements put in by the Senate Bill, which had

to do with nonpayment of duty on foreign materials placed in the stockpile. So, a second

Conference Report on 3 July 1946 dropped the Senate proposal to eliminate the duty-

free provision. Finally, both Houses passed this legislation on 9 July 1946. On 23 July

1946, this final form of S. 752, the Strategic and Critical Materials Stock Piling Act of

1946, became Public Law 520-79

(Stockpile Report to the Congress, 23 January 1947, page I-3)

industrial defense materials, the military would be too restrictive and narrow in its

management. The latter predicted correctly in the end. Still, similarly to the original

Act, ANMB would work with the Department of Interior equally with the Secretaries of

War and Navy in administration and policy decisions regarding what would be

stockpiled, the quantities to be stockpile, and in setting the qualities of materials in the

stockpile. Also, along with the Department of Agriculture, Interior had research and

development responsibilities that helped find new sources of domestic materials and in

development of substitutes and synthetics. Still, the military considered it a great victory

to remain in control of the stockpile. (Selling Defense Materials, pages 9) (Snyder, page

10)

did most of the bulk buying of raw materials for the war effort, ANMB continued to

manage the stockpiles purchased prior to 1943, and between the Purchase Branch of the

Procurement Division of Treasury, the Interior, and other such agencies, ANMB fulfilled

its obligations under the 1939 Act throughout the war period. In fact, much good work

came out of the activities during this period prior to the new stockpiling legislation

passed in 1946. Through the ANMB, and with the advice and assistance of the above

agencies delineated within the Stock Piling Act of 1939, a post-World War II stockpiling

program began to take shape in the latter part of 1943. Within this group the ANMB

also included the War Production Board (later called the Civilian Production

Administration (CPA) after the war) and the Department of Agriculture. The ANMB

“Strategic and critical materials are those materials required for

require prior provision for the supply thereof.”

Further, in defining necessary materials, the Strategic Materials Committee

placed the emphasis on the term “prior provision,” and recognized that the act of

physically stockpiling actually constituted but one of several possible meanings to assure

an ample supply of strategic and critical materials in the context of an emergency. This

led to further classifications of strategic and critical materials into an additional three-tier

stockpiling remained practicable. The Army and Navy Munitions Board recommended

specific materials as strategic and critical to sustain the United States for national

defense purposes. Organizations developed during the interwar years to make these

classifications and to maintain a growing bank of information surrounding vital

materials. The idea of establishing a National Stockpile originated during these years,

materials procurements came under control of the various super-agencies ran by civilians

appointed by the President. The war years through 1946 saw a tremendous upheaval in

the United States. The world marveled at the industrial might of the United States as it

came on line practically at full strength by 1943, truly becoming the “arsenal of

democracy,” so labeled by Roosevelt. Those raw materials coming from all parts of the

earth to build the weaponry and equipment needed to swing the pendulum of World War

II victory into the hands of the Allies took the forms and shapes of guns, aircraft, tanks,

ships, clothing, and thousands of other related items. Not only guns, but also the United

States philosophically speaking, produced the “butter” that fed the multitudes of citizens

and soldiers alike all across the world. With victory in Europe and then in Japan, the

Through the efforts of many citizens, the world once again marveled at the flexibility of

States safer through a more unified national defense structure. Within this apparatus,

came the revised Strategic and Critical Materials Stock Piling Act of 1946, composed of

materials mostly from foreign sources of supply. In fact, the stockpile defined “foreign

origin” materials as those mined or grown outside of the United States, which often

became processed in the United States following importation and delivery to the

stockpile. Materials mined, or grown, in the United States received the designation

“domestic origin.” By stockpiling these rare but necessary materials the United States

became better prepared for the next war in the years ahead. And after World War II very

few people naively believed in the World War I concept of a war to end all wars,

although the atomic bomb would add a whole new frightening dimension to this theory.

World War II, but there continued to be those powers with intentions of gaining world

dominance if possible. The new stockpile organization faced this reality in the postwar

years. (Stockpile Report to the Congress, 23 January 1947, Part II, page II-2

STRATEGIC AND CRITICAL MATERIALS STOCK PILING ACT

(The First Year After Transferring to the Defense Logistic Agency)

Act.”

FINDINGS AND PURPOSE

(hereinafter in this Act referred to as the “stockpile.”)

(b) The President shall make the determinations required to be made under subsection

(a) on the basis of the principles states in section 2(c).

Amendments of 1987.

(2) If the President proposes to change the quantity of any material to be stockpiled

under this Act, the President shall include a full explanation and justification for the

change in the next annual material plan submitted to the Congress under section 11(b).

for the quantity of such material different from the requirement for that material in effect

on September 30, 1987, by less than 10 percent, the change may be made by the

President effective on or after the first day of the first fiscal year beginning after the

explanation and justification for the proposed change is submitted pursuant to paragraph

(2).

Congress as required by law (including the time for such submission), then during the

next fiscal year no change under paragraph (3) may be made in the quantity of any

material to be stockpiled under this Act.

(4) Materials acquired by the United States under the provisions of section 303

transferred to the stockpile by the President pursuant to subsection (f) of such

section.

(5) Materials transferred to the United States under section 663 of the Foreign

allocated by the President under subsection (b) of such section for stockpiling

in the stockpile.

(6) Materials acquired by the Commodity Credit Corporation and transferred to

the stockpile under section 4(h) of the Commodity Credit Corporation

Charter Act (15 U.S.C. 714b(h)).

products; and for other purposes,” approved August 28, 1954 (7 U.S. C.

section.

(8) Materials transferred to the stockpile by the President under paragraph (4) of

section 103(a) of such Act of August 28, 1954.

(9) Materials transferred to the stockpile under subsection (b).

of such department or agency to be excess to its needs and responsibilities, and (3) is

required for the stockpile shall be transferred to the stockpile. Any such transfer shall be

made without reimbursement to such department or agency, but all costs required to

effect such transfer shall be paid or reimbursed from funds appropriated to carry out this

SECTION 5. (a) (1) Except for acquisitions made under the authority of paragraph (3) or

(4) of section 6(a), no funds may be obligated or appropriated for acquisition of any

material under this Act unless funds for such acquisition have been authorized by law.

Funds appropriated for such acquisition (and for transportation and other incidental

expenses related to such acquisition) shall remain available until expended, unless

otherwise provided in appropriation Acts.

(2) If for any fiscal year the President proposes certain stockpile transactions in the

statement by such committees. In computing any 30-day period for the purpose of the

preceding sentence, there shall be excluded any day on which either House of Congress

is not in session because of an adjournment of more than three days to a day certain.

(b) Except for disposals made under the authority of paragraph (3), (4), or (5) of

section 6(a) or under section 7(a), no disposal may be made from the stockpile (1) unless

such disposal, including the quantity of the material to be disposed of, has been

specifically authorized by law, or (2) if the disposal would result in there being an

unobligated balance in the National Defense Stockpile Transaction Fund in excess of

$100,000,000.

(c) There is authorized to be appropriated such sums as may be necessary to

so provided in appropriation Acts.

SECTION 6. (a) The President shall—

materials;

stockpile;

deterioration of such material by replacement of such material with an equivalent

quantity of substantially the same material;

(5) subject to the notification required by subsection (d)(2), provide for the timely

disposal of materials in the stockpile that (A) are excess to stockpile requirements, and

(B) may cause a loss to the Government if allowed to deteriorate; and

competitive negotiation procedures. To the maximum extent feasible—

(1) Competitive procedures shall be used in the acquisition and disposal of such

materials;

(2) efforts shall be made in the acquisition and disposal of such materials to

avoid undue disruption of the usual markets of producers, processors, and consumers of

such materials and to protect the United States against avoidable loss; and

(3) disposal of such materials shall be made for domestic consumption.

(c) (1) The President shall encourage the use of barter in the acquisition of strategic and

critical materials for, and the disposal of materials from, the stockpile when acquisition

or disposal by barter is authorized by law and is practical and in the best interest of the

available for transfer at fair market value as payment for expenses (including

processing, or rotating materials, under this Act.

(c)(3) To the extent otherwise authorized by law, property owned by the United States

may be bartered for material needed for the stockpile.

(d)(1) The President may waive the applicability of any provision of the first sentence of

subsection (b) to any acquisition of material for, or disposal of material from, the

stockpile. Whenever the President waives any such provision with respect to any such

acquisition or disposal, or whenever the President determines that the application of

paragraph (1), (2), or (3) of such subsection to a particular acquisition or disposal is not

Committees on Armed Services of the Senate and House of Representatives are notified

in writing of the proposed disposal at least thirty days before any obligation of the

United States is incurred in connection with such disposal.

(e) The President may acquire leasehold interests in property, for periods not in excess of

twenty years, for storage, security, and maintenance of materials in the stockpile.

made by the President, by and with the advice and consent of the Senate.

(b) The individual holding the office designated by the President under

subsection (a) shall be known for purposes of his functions under this Act as the

“National Defense Stockpile Manager.”

than under section 7, 8, and 13) only to the National Defense Stockpile Manager. Any

by law or Executive order.

(d) During any period during which there is no officer appointed by the

President, by and with the advice and consent of the Senate, serving in the position

disposition—

(1) on the order of the President, at any time the President determines the release

of such materials is required for purposes of the national defense; and

(2)in time of war declared by the Congress or during a national emergency, on

have authority to issue disposal orders under this subsection, if such officer or employee

determines that the release of such materials is required for purposes of the national

defense.

(b) Any order issued under subsection (a) shall be promptly reported by the President, or

by the officer or employee issuing such order, in writing, to the Committees on Armed

investigations concerning the development, mining, preparation, treatment, and

utilization of ores and other mineral substances that (A) are found in the United States,

or in its territories or possessions, (B) are essential to the national defense, industrial, and

essential civilian needs of the United States, and (C) are found in known domestic

sources in inadequate quantities or grades.

(2) Such investigations shall be carried out in order to—

(A) determine and develop new domestic sources of supply of such ores

determining the extent and quality of deposits of such minerals, the most suitable

methods of mining and beneficiating such minerals, and the cost at which the minerals or

metals may be produced.

(b) The President shall make scientific, technologic, and economic investigations

or for using agricultural commodities for the manufacture of any material determined

therefore.

NATIONAL DEFENSE STOCKPILE TRANSACTION FUND

(b)(1) All moneys received from the sale of materials in the stockpile under

(2) Subject to section 5(a)(1), moneys covered into the fund under paragraph (1)

are hereby made available (subject to such limitations as may be provided in

appropriations Acts) for the following purposes:

(A) The acquisition of strategic and critical materials under section

(B) Transportation, storage, and other incidental expenses related to such

acquisition.

upgrading of existing stockpile materials to meet current specifications

(including transportation, when economical, related to such upgrading).

(D) Testing and quality studies of stockpile materials

provisions of section 6(a)(4) or disposed of under section 7(a) shall be covered

into the fund and shall be available only for the acquisition of replacement

materials.

ADVISORY COMMITTEES

regular place of business shall be allowed travel expenses, including perdiem in lieu of

intermittently employed in the Government service.

SECTION 11. (a) The President shall submit to the Congress every six months a written

report detailing operations under this Act. Each such report shall include—

(1) information with respect to foreign and domestic purchases of materials

during the preceding 6-month period;

(2) information with respect to the acquisition and disposal of materials under

this Act by barter, as provided for in section 6(c) of this Act, during such period;

(4) such other pertinent information on the administration of this Act as will

Act and to determine the need for additional legislation.

(b) Not later than February 15 of each year, the President shall submit to the appropriate

committees of the Congress a report containing an annual materials plan for the

Each such report shall include details of planned expenditures for acquisition of strategic

and critical materials during such period (including expenditures to be made from

appropriations from the general fund of the Treasury) and of anticipated receipts from

proposed disposals of stockpile materials during such period.

DEFINITIONS

during a national emergency, and (B) are not found or produced in the United States in

(2) The term “national emergency” means a general declaration of emergency

with respect to the national defense made by the President or by the Congress.

IMPORTATION OF STRATEGIC AND CRITICAL MATERIALS

ANNUAL REPORT ON STOCKPILE REQUIREMENTS

SECTION 14. (a) The Secretary of Defense shall submit to Congress an annual report on

stockpile requirements. Each such report shall be submitted with the annual report

submitted under section 11(b) and shall include—

(b) Each report under this section shall set forth the national emergency planning

assumptions used in determining the stockpile requirements recommended by the

Secretary, based upon total mobilization of the economy of the United States for a

sustained conventional global war for a period of not less than three years. Assumptions

(3) Losses from enemy action.

emergency

(5) Budget authority necessary to meet the requirements of total mobilization for

the military, industrial, and essential civilian sectors.

(6) The availability of supplies of strategic and critical materials from foreign

(7) Domestic production of strategic and critical materials

(8) Civilian austerity measures.

(c) The President shall submit with each report under this section a statement of the

plans for the President for meeting the recommendations of the Secretary set forth in the

report.