FOREIGN RELATIONS) 1950), VOLUME I


Stockpile Objectives:
   Present stockpile objectives represent materials equivalent to about
 $3.8 billion. Stockpile objectives were originally fixed in 1944 when
 world conditions were much different from today, and they are being
 revised at the present for the first time.
   The review of stockpile objectivesis almost complete at the present
 time, but revised objectives for two of the most important materials-
 aluminum and copper-are being held up until the results of the next
 feasibility test are known. Aluminum and copper requirements origi-
 nally submitted by the Services in 1949 were so large that they were
 found, by the NSRB, to be infeasible, and of such magnitude as to
 call for a careful review of strategic plans.
   Stockpile objectives established are minimum objectives when con-
sidered from the viewpoint of national security, for stockpile objec-
tives are intended to cover only the loss of distant foreign sources of
strategic and critical materials in a war of 5 years' duration.
  'The U.S. would still be dependent in war upon accessible foreign
sources for 1/3 of its total requirements for strategic and critical ma-
terials even after minimum stockpile objectives are achieved. These
imports would require critical shipping, manpower and military
protection.
  In addition, the U.S. would be dependent in war upon domestic
production for an additional 1/3 of its requirements-and, without
adequate labor, equipment, and supplies, domestic production of many
materials at the anticipated levels is probably unobtainable. The cur-
rent review of stockpile objectives indicates that the level when revised
will probably be about $6 billion, as detailed in the attached Table I.
Use of Funds:
  $4.5 billion in new obligational authority are recommended, al-
though the need 'for only $3.9 billion is indicated by comparing the
total revised objective of $6.0 billion to the $2.1 billion of materials
on
hand or scheduled for delivery. The extra $0.6 billion are intended to
cover unexpected price rises and the unavoidable tying-up of funds in
contracts that may be in default.
                       RECOMMENDED ACTION
  The acquisition of minimum stockpiles by mid-1954 will require
appropriation of the following new obligational authority (i.e., cash
for new purchases plus contract authority),in addition to authoriza-
tions that have already been enacted:
Fiscal Year 1951.       $2.5 billion (of which 0.5 billion is included
                             in the President's 1951 budget request)
Fiscal Year 1952 -  .. $2.0 billion


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