You will note, however, that on the amounts that have been acquired excess to objectives, we have suffered on paper a billion dollar loss. The loss takes place entirely in this area of surplus or excess.

Senators, are they any questions about this?

Senator SYMINGTON. As we look at these 12 charts, which represent about three-quarters of the entire inventory, you can see how involved and complex are the various inventories, classified and unclassified. We thought we would take these 12 and later break out the others. If we broke out all 76 now it would have been difficult, if not impossible, to follow it in one, or even two sessions. But all will be declassified shortly.

In these charts Mr. May is showing you now, however, we have the more important items-about three-quarters of the total amount in the stockpile. Proceed.

Mr. MAY. Thank you, Senator.

We will take these items in alphabetical order, not necessarily in order of importance or magnitude. The first one is aluminum. The first column represents the objectives for this particular material. You will note we have a basic objective of zero. We have a maximum objective of 1.2 short tons, 1.2 million short tons.

Senator SYMINGTON. What do you mean by basic objective being zero?

Mr. MAY. The basic objective being zero simply means that in time of war we would have, with certain supplies from overseas, an adequate supply to meet the requirements for war.

Senator SYMINGTON. In other words, you don't need any aluminum in your national stockpile.

Mr. MAY. That is correct, Senator.

The maximum objective is valued at $576 million.

The second column represents the amounts we have in the various inventories. The first inventory, the national stockpile or strategic stockpile, has 1.1 million short tons. The remainder is in the Defense Production Act inventory, and is approximately 900,000 short tons. We have 100,000 short tons on order. Now, the total value of these amounts, including this small amount that we have on order, is $974.7 million.

This third column represents the amount of surpluses which we have of aluminum.

The first demarcation here in the bright red indicates the amount of material that we have which is surplus to the maximum objective. In this case we have 700,000 short tons which are surplus.

Senator SYMINGTON. HOW do you have a maximum objective and then have no basic objective?

Mr. MAY. The basic objective includes anticipated supplies from oversea

sources.

In computing the maximum objective, practically all oversea supplies are discounted completely, so that there is an assumption that we will not be able to get any of these materials from overseas.

This is the factor that is used in computing the maximum objective. Obviously, if we are largely dependent in a particular material on supplies which come from overseas, the maximum objective will be substantially larger than the basic objective since you have excluded any reliance on oversea supplies.

This means, of course, that you have to stockpile a great many more tonnages now in order to take up that shortage.

As I say, this first column represents the amount we have surplus to the maximum objective.

The remainder of the column is an additional amount of surplus which is surplus to basic objective.

Since the basic objective in aluminum is zero, everything we have in inventory is surplus to our basic objective, and the value of that, of course, is the same as the value of our inventory, which is $974.7 million.

The next material in alphabetical order is chromite, metallurgical grade. The first column, which is that of objectives, shows that the basic objective is 1.7 million short dry tons. The maximum objective is 2.7 million short dry tons.

The total value of these objectives is $170 million.

The second column, representing our inventories, shows that in the national stockpile we have 3.8 million short dry tons. We have a very small amount in the Defense Production Act inventory.

In our other inventories, including the supplemental and the CCC, we have 100,000 short dry tons.

We have on order and yet to come into the stockpile 1.4 million short dry tons. The total value of all of this material, including our inventory and the amounts on order, is $393.5 million.

The third column, again representing our surpluses, the bright red representing the amount of surplus we have to maximum, shows we have 2.5 million short dry tons at a value of $219.8 million, and that we have a surplus to our basic objectives of $257.3 million.

Mr. COBURN. May I interrupt you, Mr. May, to ask you a question?
Mr. MAY. Yes, Mr. Coburn.

Mr. COBURN. Do I understand you then to say that even though we have a very substantial surplus in chromite we still have contracts outstanding that will obligate us to receive delivery on and pay for almost half of what we have in the inventory now?

Mr. MAY. That is correct, Mr. Coburn.

These are the best estimates of the General Services Administration of the amount of contract deliveries which will be made in the future under existing contracts and amounts for which there apparently is no legal way to avoid.

Now, of course, conceivably there might be reductions or some negotiated way to avoid this. But absent some consideration flowing from and on the part of the Government, we may expect to receive 1.4 million more short dry tons of chromite.

The next material is cobalt. You will note that our current objectives in cobalt are relatively slight. We had a basic objective of 6.9 million pounds; we have a maximum objective of 19 million pounds. The total value at current market price of these objectives is $28.5 million.

This column represents the amount which we have in inventories. We have 76.9 million pounds in our strategic stockpile. We have another 19 million pounds in our Defense Production Act inventory.

We have 1 million pounds in our other inventories, and we have yet to receive and on order 12.4 million pounds.

The total value of this is $164.2 million.

Again the third column represents the surplus. As you can see, this long bright red graph represents the surplus to our maximum objectives. We have 90.4 million pounds of surplus. Noting again that our entire maximum objective is only 19 million pounds, we nevertheless have 90.4 million pounds of surplus to our maximum objective, and we have 102.5 million pounds surplus to our basic objective.

The next item is copper. The basic objective is zero. You will recall the previous explanation of a basic objective that is zero. It simply means that if we include oversea supplies during wartime, then we will have an adequate supply for our essential requirements during the war without doing any stockpiling whatsoever. So our basic objective is zero.

Our maximum objective is 1 million short tons. This has a value of $622.5 million. This means that, obviously, we have a great reliance on oversea supplies of copper because this is the difference between what we need to stockpile if we exclude all oversea supplies.

The second column represents the amount of copper which we presently have and expect to get. We have equaled our objective in the national stockpile. We have 1 million short tons in our national stockpile. We have 100,000 short tons in our Defense Production Act inventory. We have 10,000 short tens in other inventories, and we have a very slight amount on order. The total values of these are $713.9 million.

The third column, again representing our surpluses, shows $91.4 million of surplus to maximum objective, approximately 100,000 short tons.

Again because our basic objective is zero, our entire inventory is surplus to our basic objective; in other words, $713.9 million is surplus to our basic objective, which is zero.

The next material is lead. For lead we have a basic objective of zero, again meaning simply that we have an adequate supply domestically, plus oversea supplies during the war, so that we will not have to stockpile any lead if we can count on oversea supply.

Discounting oversea supply completely, we would have a deficit of $58.6 million or roughly 280,000 short tons of lead. So this is the amount we need to stockpile in order to take care of the oversea supplies we would not be able to receive, assuming we couldn't get any oversea supplies.

On the other hand, this is the amount that we have in inventory. We have 1 million short tons of lead in the national stockpile. We have a very slight amount of lead in the Defense Production Act inventory, and a very sizable amount, 300,000 short tons of lead, in the CCC and the supplemental inventories. We have 8,000 short tons of lead presently on order and yet to be received. The total value of our lead is $284 million.

The third column, again representing our surpluses, shows we have 1.1 million short tons of lead excess to our maximum need. This is a value of $225.4 million.

Our surpluses to our basic objective is $284 million.

In metallurgical manganese ore, we have a basic objective of 2.5 million short dry tons. We have a maximum objective of 6.8 million short dry tons. The value of the objectives for manganese are $275 million.

In our strategic stockpile we have 5.2 million short dry tons. You will notice that in our national stockpile we do have less than our maximum objective. The materials have not yet been transferred from our other inventories into our national stockpile.

As it will be later developed, the reason principally for this is inadequate authorization of funding from Congress in order to be able to transfer these other materials into this stockpile. But assuredly we have, of course, met more than our objective.

We have 1.3 million short dry tons in the Defense Production Act inventory, and 2.5 million short dry tons in our other inventories, principally our supplemental stockpile.

We have a half million short dry tons on order, and yet to be received.
The total value of this is $477.9 million.

The third column, again representing our surpluses, shows we have $202.8 million surplus to our maximum objective, roughly 2.8 million short dry tons of surplus.

We have $366.3 million of surplus to our basic objective. This is roughly 7.1 million short dry tons of excess to the basic objective.

The next material is molybdenum. This chart will require a little explanation. There are two colors here in the first graph. This simply represents the fact that in this case the basic objective and the maximum objective are the same, which would further suggest that we get almost all of our materials in molybdenum domestically, so that having hardly any reliance on oversea supplies for molybdenum, it makes no difference whether we discount oversea supplies or not, so that our basic and our maximum objectives are identical, and that is 59 million pounds. This has a value of $56.8 million.

All of our molybdenum in inventory is in the national stockpile. It has a value of $122.3 million, and amounts to 84.4 million pounds of molybdenum. This represents the surplus. Again since our basic and maximum objectives are the same, the amount of surplus, $35.4 million, is the amount that is surplus both to the basic and the maximum objective.

In nickel we have a similar situation. Our maximum objective and our basie objective are the same. We get almost all of our nickel from Canada-so again we get hardly any nickel from overseas. Thus our basic and our maximum objectives are identical. It is 323 million pounds of nickel. This has a value of $260.6 million.

We have in our national stockpile 335 million pounds of nickel. We have another 104 million pounds in our Defense Production Act inventory, and we have on order and yet to receive, 33 million more pounds of nickel. This has a total value of $377.2 million.

The third column, representing our surpluses, reflects that we have $116.6 million of surplus, roughly 148 or 149 million pounds of surplus nickel.

This is rubber. Our basic objective in rubber is 560,000 long tons. Our maximum objective is 750,000 long tons. The current value of this amount of rubber is $468.7 million.

This represents the amount of rubber we presently have. It is all in the national stockpile. It has a value of $682.4 million.

This reflects the fact that $213.7 million worth of that rubber is surplus to our maximum objective; $332.4 million is surplus to our basic objective.

Mr. COBURN. May I ask you a question, Mr. May?

Mr. MAY. Yes, Mr. Coburn.

Mr. COBURN. Is all of that rubber natural rubber, or is any of it synthetic? Mr. MAY. It is my understanding it is all natural rubber.

Mr. COBURN. Thank you.

Mr. MAY. This, as you see, is tin. Our basic objective for tin is 150,000 long tons. Our maximum objective is 190,000 long tons.

This has a value of $497.2 million. Our objectives, in other words, are close to a half billion dollars for tin.

In inventory almost entirely in our strategic stockpile we have 340,000 long tons, and a very small amount in our other inventories. And this has a value of $939.4 million.

Senator SYMINGTON. What you are saying there is we have more tin in surplus and in dollar value, than our maximum objective.

Mr. MAY. Our surplus to our basic objective is $536 million, which is greater than our maximum objective; $442 million is surplus to our maximum objective, which is roughly equal to our maximum objective.

Mr. COBURN. So we are overbought in tin by a hundred percent?

Mr. MAY. Approximately 100 percent.

The last two materials are tungsten and zinc. In tungsten we have a basic objective of 32 million pounds, a maximum objective of 50 million pounds, and the value of these objectives is $76.9 million.

In our national stockpile we have 104 million pounds. In our Defense Production Act inventory we have 53.7 million pounds. We have 3.9 million pounds in other inventories, and we have half a million pounds on order and yet to come into the stockpile. This has a total value of $238.3 million.

You can see the amount of surplus to our maximum objective, $161.3 million, more than twice our maximum objective.

We have $186.7 million surplus to our basic objective.

In zinc we have a basic objective of zero. Assuming a small oversea supply, we are self-sufficient in wartime in zinc and would find it unnecessary to stockpile.

Discounting the small oversea supply we need, we find that we have 180,000 short tons that we have to stockpile in order to meet our wartime requirements. This has a value of $42.7 million.

In fact, we have in inventory a total of $379.4 million. There are 1.3 million short tons in the strategic stockpile, and 300,000 short tons in our other inventories, and we have a very slight amount on order and yet to be received.

The third column reflects our surpluses in zinc. We have $336.7 million of surplus to our maximum requirements. We have $379.4 million surplus to our

basic requirements.

Mr. COBURN. As I figure it, then, we are overbought in zinc by 800 percent, at least 800 percent.

Mr. MAY. That is correct, Mr. Coburn.

That concludes the 12 materials which we have selected for illustrative purposes.

Senator SYMINGTON. Thank you, Mr. May.

Again, all these materials are to specifications. There is another stockpile we are exploring, which totals $411 million. This stockpile contains materials which have not met specifications.

There are several more figures that might be of interest. The Government has $252 million of strategic materials on order, on which we are continuing to take delivery. That includes aluminum, chromite, cobalt, copper, lead, manganese, and nickel. There are no further contracts for delivery of molybdenum or rubber or tin.

Now, if anybody has questions we will be glad to try to answer them. Question. Senator, on what day did you and your subcommittee come to the conclusion that this stockpile entered into this position? What year or what month?

Senator SYMINGTON. I was made chairman of the Stockpile Subcommittee of the Senate Armed Services in 1955. Within a few weeks I felt we should get this information out into the public domain, because it was clear that in many items we were badly overstocked already.

In 1958 we cut down from a 5-year war to a 3-year war. That automatically gave us still further excesses, and took some materials that had not yet been purchased to 100 percent of the former demand, and made them surplus automatically.

Question. Senator, if you have surpluses now, is there any way to cancel these additional contracts?

Senator SYMINGTON. The lawyers say they are legal contracts. Speaking as a former businessman I would like to cancel them. But I understand that they are obligations of the U.S. Government, and are being handled in that way.

Question. Mr. Chairman, could you tell us if you would characterize this overbuying, in essence, by a billion dollars, as a scandalous condition?

Senator SYMINGTON. First we want to get everything in the public domain. Question. Mr. Chairman

Senator SYMINGTON. And, secondly, we want to see if these contracts have been made in the public interest.

I want to be careful, as we pursue this matter, not to put any preliminary cause for suspicion with respect to scandal or impropriety. All we want to do is get the facts, get the truth, and let the facts and the truth speak for themselves.

Question. Mr. Chairman, not with regard to any specific company, do you feel that overbuying by a billion dollars and overbuying in some cases by 800 percent would represent a mismanagement that would be scandalous in proportion? Senator SYMINGTON. I do not think at this time we have justification for reaching such a conclusion.

If you agree to take a certain amount of material you felt you would some day need in order to help people out of work for a long time, that, to me, would not be comparable to the procurement of materials made entirely abroad.

We want to reach no conclusion, make no accusations. We are simply giving you the facts now, to the best of our ability, at this point in this investigation. Question. Well, Mr. Chairman, I am just trying to get this clear. Somebody has to be at fault. Either you think this is a good situation-I am not trying to have you point a finger at anyone specifically, I am just saying, do you think this is a good situation then?

Senator SYMINGTON. I think the inventory is very high, and it is unbusinesslike to have excessively high inventories.

As to the reason for this, we have not yet gotten far enough into the details to draw conclusions. It is what we intend to do before it is over.

I appreciate your interest, and will be glad to talk to you later.

Question. I will be back later.

Question. Senator, did Congress in each instance have to authorize and appropriate the money that went beyond

Senator SYMINGTON. I don't think the Government could have obtained anything that wasn't authorized by Congress, with appropriations.

Question. So any scandalous situation, keeping in mind you won't characterize it as such, that has developed here, certainly part of the fault must lie with those who appropriated the money.

Senator SYMINGTON. Nobody is attempting to place blame anywhere. These facts are being presented to you for the first time, the degree of excess; and that is it.

Question. Senator, do you plan to make public the Government's purchase contracts for these strategic materials.

Senator SYMINGTON. We would hope to make public all details of all contracts, without any reservations of any kind whatever.

Question. Senator, when was the last contract let for a material in surplus, in which we had a surplus?

Senator SYMINGTON. I can't answer that.

Do you know, Mr. Coburn?

Mr. COBURN. No.

Senator SYMINGTON. Do you know, Mr. May? Mr. Zimmer? Mr. McCue? Question. I don't mean, for instance, the day, but the month, or even the year. Senator SYMINGTON. We just don't know. It is a good question, and we will find out and let you know.

Question. Senator, who made the decision that we were going to buy more of this

Senator SYMINGTON. You mean how was the stockpile requirement set up? Question. Yes. Well, who made the decision that additional amounts would be added to the stockpile?

Senator SYMINGTON. I will refer that to counsel.

Mr. COBURN. Well, as to the official or board responsible for setting the quantities that were to be purchased-first it was the Munitions Board, then the ODM, then the OCDM, and now the Office of Emergency Planning.

Senator SYMINGTON. ODM, as you know, was the Office of Defense Mobilization; the OCDM was Office of Civil and Defense Mobilization; and now the Office of Emergency Planning.