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rolling in the sawdust down in those departments because we don't have the kind of a program going that should have been put into effect. You know that, don't you?

Dr. MORGAN. Yes, sir, and we must look to the Office of Defense Mobilization which I understand is represented on the National Security Council for that type of guidance.

In the Defense Production Administration we are not primarily strategic experts on the world situation. There is the National Security Council that brings together the State Department, the Department of Defense, the NSRB, the Central Intelligence Agency, the ODM, and others. They set the general pattern and then within that pattern we attempt to take the necessary steps.

Mr. ENGLE. Haven't they told you to get going on this mining program?

Dr. MORGAN. In the information that has been made available to me, I don't recall having seen specific reference to mining. I think we are all in agreement that there are critical shortages of strategic materials, which include metals and minerals which come from mines, and obviously, we have to do something about the problem of mining. There is no doubt that there are serious shortages of strategic metals and minerals.

Mr. ENGLE. You were with NSRB?

Dr. MORGAN. I was.

Mr. ENGLE. And were transferred to your present post?

Dr. MORGAN. That is correct.

Mr. ENGLE. And all of your experience has been in government? Dr. MORGAN. That is correct.

Mr. ENGLE. You have never been in a mine in your life, have you? Dr. MORGAN. Sir, I have never worked for a mining company but I have been privileged to visit mines all over this country and in foreign countries.

Mr. ENGLE. When did you go to a foreign country?

Dr. MORGAN. During the course of World War II I served over most of the Pacific theater, including New Caledonia, the Palau Islands, the Philippines, and Japan.

Mr. ENGLE. That was in connection with the Army engineers, was it not?

Dr. MORGAN. That is correct, sir. While in New Caledonia I was able to visit the nickel and chrome mines, which at that time were being operated under contracts with the United States Government. While in the Philippines I was able to visit manganese and chrome properties.

Mr. ENGLE. Was that in connection with your duties with the Army engineers?

Dr. MORGAN, Not officially, sir. I did that on my own over there. In the Palau Islands I was able to visit phosphate mining operations which had been of importance to the Japanese.

In Japan I was able to visit copper, lead, zinc, and gold mines which were then under the control of the Army.

Mr. ENGLE. From the standpoint of practical mine operation you have had no experience whatsoever?

Dr. MORGAN. That is correct.

Mr. ENGLE. How many other people in Mr. Gibson's organization are transfers or transplants from the NSRB?

Dr. MORGAN. Mr. Gibson's own staff is very small, but within the Defense Production Administration there are several people who came from the NSRB.

Most of the people in the field of metals and minerals that he named this morning were on the staff of the NSRB for the past 2 or 3 years. Mr. BENNETT. Did I understand you to say that you are holding up your mineral production policy program until you are sure whether or not we are going to get into a shooting war?

Dr. MORGAN. No, sir, I hope I did not create that impression, sir, by what I said. What I said or what I had hoped I had said, is that there are certain actions that we are taking now with regard to metals and minerals.

If we knew that an all-out shooting war were going to start next week we would undoubtedly take additional actions.

Mr. ENGLE. It would be too late then, wouldn't it, Dr. Morgan? We would be sunk just like the Jap Navy; we would never get it going, would we?

Dr. MORGAN. Not necessarily, because that depends on the status of our stockpiles of certain materials. It varies completely from material to material.

Mr. ENGLE. You know how we stand on tungsten and manganese and chrome?

Dr. MORGAN. Yes, sir, I am familiar with those situations.

Mr. BENNETT. Will you illustrate what you mean by that prior statement?

Dr. MORGAN. To give a specific case would involve me in classified information that I can give only in executive session but will you permit a hypothetical case?

Mr. BENNETT. Take a hypothetical case.

Dr. MORGAN. Let us say that there is a material which comes only from foreign sources for which our stockpile objectives are about 80 percent complete, and let us say that our knowledge of the requirements are such that current imports are sufficient to meet current demand. If we were certain that for the next 5 years there would be no all-out war we would only cut back the civilian use of that commodity sufficiently that over the next 3 or 4 years we would complete our stockpile objective.

If, on the other hand, the war were going to start tomorrow morning, civilian use of that particular commodity in such things as automobiles or television sets or washing machines would be stopped immediately and the total imports that we could get in the next short period would be added to the national stockpile.

Mr. BENNETT. Don't you believe that it is the intent of Congress that this program was to get under way on the assumption that we might get into a shooting war at any time?

Dr. MORGAN. That may have been the intent of the Congress-I am not a lawyer--but they didn't make that clear in the wording of the Defense Production Act of 1950 under which we are operating. Mr. BENNETT. Do you think that Congress intended that you, as a policy maker, should make this determination from factors as you see them, as to when we approach this danger point, and then act accordingly?

Dr. MORGAN. No, sir. As I stressed before, we in the DPA are not posing as strategic experts. We get our guidance from the Office

of Defense Mobilization, which is represented on the National Security Council, where such over-all national strategic assumptions and estimates of the situation are arrived at.

We have general guidance from the Office of Defense Mobilization and we are operating within the framework of that guidance.

COPPER SHORTAGE

Mr. BENNETT. Are you operating on the assumption-let us take copper, for example, because as far as I am concerned, that is one of the most critical of our metals.

Are you basing your policy as to the needs of copper in the next few years on the amount of imports that we are getting from Chile or Africa or some other place, or are you basing it on the assumption. that we ought to do everything possible to increase domestic production under this program?

Dr. MORGAN. Mr. Congressman, it hinges on specific execution in terms of contracts costing money of the phrase "everything possible," because, as those familiar with metals and minerals know, what is a marginal property at one price becomes a paying property at a higher price, but additional ones become marginal at each price you set, so that, for example, copper is now around 24 or 25 cents a pound, but there are copper mines that would be marginal at a dollar a pound. It is conceivable that other copper mines might be marginal at $2 a pound.

Mr. BENNETT. How far do you think that the Government ought to go in getting marginal copper mines in operation? What is your policy on that? What policy do you follow?

Dr. MORGAN. Well, to arrive at policy, we have to consider certain statistics. In the case of copper, I can't give you the specific figures because those that I use are classified and I don't have them here.

Mr. BENNETT. Is it fair to say that there is a critical shortage of copper in this country today?

Dr. MORGAN. There is no doubt that there is a shortage as shown by the fact that the National Production Authority has issued orders limiting the use of copper in the civilian economy.

Mr. BENNETT. Is it critical?

Dr. MORGAN. Well, it depends, sir; it depends on your definition of the word "critical." Let me illustrate what we do in the case of copper this way.

Mr. BENNETT. Can't you say whether in your opinion copper is critically short in this country?

Dr. MORGAN. I would say that the copper supply is fairly tight right

now.

Mr. ENGLE. Let me supplement that. The annual unsatisfied demand is about 300,000 tons a year, isn't it?

Dr. MORGAN. I don't know that anyone has a device for measuring the demand at this time. We do know that there are plenty of people who could use more copper if they could get it.

Mr. ENGLE. That is the estimate Mr. Searls gave to the Senate committee.

Dr. MORGAN. However, in World War II, as I pointed out in my study, production of copper from domestic copper mines declined after 1942 and 1943 steadily into 1944, 1945, and 1946, and in World

War II our greatly increased demands were met more and more from imports than from domestic production.

STOCKPILE OBJECTIVES REVISED UPWARD

Mr. ENGLE. Talking about these stockpile objectives, I notice that in Mr. Wilson's report of 1950, he says:

Our total stockpile requirements computed on the basis of estimated wartime needs, less estimated supplies available during the war period, amount to 9.7 billion dollars measured in February prices. On March 1, approximately 3.2 billion of these requirements were on hand.

They started out, as you recall, under the Stockpiling Act with an objective of something less than $3 billion.

Dr. MORGAN. Yes; that is correct.

Mr. ENGLE. In other words, when you talk about objectives, it depends on what your situation is. Now here they jacked them up at least three times according to this report. I see here that in the stockpiling report, itself, of January 1951, they say that—

Since the July 23, 1950, report two factors have caused substantial changes in the items and quantities to be stockpiled. The first was the review of supply and requirements data. The second was the change in strategic assumption under which wartime supplies were estimated. This has required the addition of 7 materials to the list, transfer of 4 materials from group 2 to group 1, the removal of 4 items from group 1 to 2, and the increase of all except 10 of the stockpile objectives which were effective on July 1, 1950.

Dr. MORGAN. I believe that we in the National Security Resources Board, responsible at that time for the review of stockpile objectives, played no inconsiderable part in the upward revision of those objectives.

DISCUSSION OF POLICY RESPONSIBILITY UNDER DEFENSE PRODUCTION ACT

Mr. ENGLE. I am not worried about what you did about objectives. The objectives look all right. But what I am worried about is why you don't do something about getting the material in here. This record shows that the net production of all of this effort, on which over half a million dollars of administrative expenses have already been exhausted, have produced exactly one contract for tin and tungsten. That is all there is. The other two referred to by Dr. Boyd were executed under the Stockpile Act and a fourth one for foreign tungsten was cancelled. Here this mammoth organization set up with all its fanfare, set in operation in 1950, over 7 months ago, has only let one contract that won't get into operation for some time to come and we wonder if this is a phony emergency or whether they really mean business. I want to ask you, who handles the policy down there? Do you handle it?

Dr. MORGAN. I make recommendations regarding the stockpile on all of the materials.

Mr. ENGLE. Who makes the policies? All we have heard from in the last 3 days are people who make recommendations. Now we want to find some place somewhere in this vast edifice down there where somebody has the power to make a decision. Can you make a decision? Dr. MORGAN. I cannot make a final decision.

Mr. ENGLE. Just where are you on the totem pole of authority? Are you the lowest face or are you half way up, and if you are, who is above you and where do your recommendations go?

Dr. MORGAN. Within the DPA, sir, the Administrator has the final power to make decisions.

Mr. ENGLE. That is Mr. Harrison?

Dr. MORGAN. That is General Harrison. Mr. Gibson of the DPA, the Deputy Administrator, reports to General Harrison and I report to Mr. Gibson, but I think that we must recognize that with the present structure of the Government, with numerous agencies having legal responsibilities regarding these problems, that no one particular individual and no one particular agency can make final decisions on any broad matter of policy.

Mr. ENGLE. I know, but the Defense Production Act of 1950 gives authority, so that if there is something wrong with the structure that decisions cannot be made, the executive branch of the Government is responsible and all they have to do is to change it. There is a rat race down there with these policy matters being changed from one place to another. The gentleman who preceded you on the witness stand said he was constantly advised as to supplies which we can have or get and those we will need.

What I want to know is who is responsible for filling the gap. That is your job, isn't it?

Dr. MORGAN. No, sir; I am not responsible for filling the gap.

Mr. ENGLE. Are you responsible for formulating policies that will fill the gap?

Dr. MORGAN. We in the DPA are responsible for seeing that the gap is filled.

Mr. ENGLE. What is the difference between that and what I said? You are responsible for seeing that the gap can be filled. I asked you if you were responsible for policies which would fill the gap. Now, it is half dozen of one and six of the other, isn't it?

Dr. MORGAN. Yes, sir.

Mr. ENGLE. That is right. Now, have you recommended any policies at all to fill any gaps, and, if so, what are they?

Dr. MORGAN. Yes, sir. We have recommended many policies. I am not trying to retreat behind the classified screen. I can assure you that in executive session I can give you the details.

PROPOSED CHROME POLICY AND PROCEDURES FOLLOWED IN FORMULATING

SAME DISCUSSED

Mr. ENGLE. We are interested in general policies. If you have a chrome policy you are going to announce to the country, you are going to spread it around anyway, so tell us about it. Do you have a policy on chrome?

Dr. MORGAN. The DMA has recommended-first let me retreat just a step. Chrome has been on the strategic and critical materials list since 1946.

Mr. DONOVAN. Will the gentleman yield?

Mr. ENGLE. Yes.

Mr. DONOVAN. I would like to have a direct answer to your question. I suggest the stenographer read the question over.

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