REPORT ON TAX AMORTIZATION NECESSITY CERTIFICATES (MAR. 22, 1951)

SCHEDULE IV. SPECIAL TABULATION OF NSRB FORMS 140 FOR DPA, BUSINESS EXPANSION

OFFICE

TABLE A.-Weekly report on certificate of necessity, as of C. O. B., Mar. 22, 1951 [In thousands of dollars]

Total not yet referred, 1,402. Grand total, 5,983.

Source: Department of Commerce, Bureau of the Census, Business Division.

1 Preliminary statistics. NOTE. The difference between guaranteed loans authorized and sum of loans outstanding and additional amounts available to borrowers under guaranty agreements outstanding represents amount repaid, guaranties available but not completed, and authorizations expires or withdrawn. A total of 302 applications have been filed.

Virtually all guaranties under section 301 have been made by the Department of Defense; that is, by the Departments of the Army, Navy, and Air Force. The Department of Defense has adopted a policy of confining its section 301 guaranty

activity to working capital loans. One loan has been guaranteed by General Services Administration in the amount of $300,000. Four loans have been guaranteed by the Department of Commerce totaling $337,000. These loans have also been for working capital. In addition to guaranties of private financing institutions, the Department of the Air Force has guaranteed one working capital loan made by the Reconstruction Finance Corporation.

DPA REPORT ON PROGRAMS AND PROJECTS APPROVED AND BEING CONSIDERED (APRIL 1951)

SCHEDULE VI

Exploration program-On February 28, 1951, DPA approved a $10 million program for the encouragement exploration of critical and strategic minerals and metals by way of contributing funds to match investment by private capital. Under the program, the Secretary of the Interior receives applications and the scope and physical extent of each project are investigated and defined by the United States Geological Survey and the Bureau of Mines for the Defense Minerals Administration. If necessary, the matching principle may be departed from. The contribution is to be repaid on a royalty basic from net proceeds. Tungsten program-On March 30, 1951, DPA approved a 5-year program under which the Government will buy all domestic tungsten offered and delivered before June 30, 1956, at $63 per unit, in order to encourage the exploration and development of domestic tungsten. DPA has also approved a contract with the Tungsten Mining Corp to buy 600,000 units of tungsten over a 7-year period at a floor price of $43 per unit.

Aluminum program-DPA has approved the aluminum expansion program which quarantees the purchase of 446,000 tons of aluminum annually for a 5-year period at producers regular published prices.

Tin contract-On March 16, 1951, DPA approved a contract to procure all tin mined in Alaska by the United States Tin Corp. for 31⁄2 years at the corporation's ceiling price fixed by the Office of Price Stabilization.

Projects not yet approved by DPA-DPA now has under consideration private domestic procurement agreements with the San Manuel Copper Co, two molybdenum companies, a cobalt company, and is also considering a chrome project program.

DPA PROCEDURES USED FOR COORDINATING ACTION
ON LOAN APPLICATIONS

SCHEDULE VII (1)

NSRB Doc. 131 NOVEMBER 8, 1950.

EXECUTIVE OFFICE OF THE PRESIDENT

NATIONAL SECURITY RESOURCES BOARD

Board Secretariat

Subject: Defense production loans.

Contents: Procedure for loans under section 302 of title III of the Defense Production Act of 1950, as prescribed by the Chairman of the National Security Resources Board.

Reference: For further information contact Business Expansion Office, National Security Resources Board.

Pursuant to Executive Order 10161, the following procedure is established for coordinated action under section 302 of the Defense Production Act of 1950:

1. Applications will be submitted in quadruplicate, and will be considered filed when docketed by a delegate agency which will acknowledge receipt and inform applicant of docket number. When an application cuts across the responsibilities of two or more delegate agencies, the application should be filed with the agency having the predominant interest in it. However, where there is doubt as to which delegate agency has the predominant interest, the applica

tion should be received by any interested delegate agency. Working arrangements for investigation and processing should be made with the other interested agency or agencies.

2. In instances in which a prospective loan applicant has his primary contact with a nondelegate agency, such agency may receive the application and forward it to the appropriate delegate agency. If this nondelegate agency has a substantial interest in the application, it will retain one copy and forward immediately the rest of the filing to the delegate agency, with a form notation of the fact that one copy has been retained and will be forwarded at a later date with appropriate information and comments or recommendation. This procedure will enable respective agencies to carry out their responsibilities concurrently. 3. Each loan application will be investigated and evaluated by the delegate agency, with the assistance of other agencies as needed. It is essential that other Government agencies act promptly in response to requests for assistance by a delegate agency.

4. Athough agencies may use their field offices for such other purposes as may be helpful, field offices may not make direct submissions to the Resources Board. 5. Investigation of the credit standing of the applicant and of the availability of financial assistance from other sources on reasonable terms will be made by Reconstruction Finance Corporaation for the delegate agency. One copy of the application will be sent to the Reconstruction Finance Corporation for such purpose, and Reconstruction Finance Corporation's finding on such financial matters will be reported to the delegate agency. Such report will include suggested terms and conditions of loan. In some instances, it may be most efficient for the Reconstruction Finance Corporation investigation to be carried out concurrently with the delegate agency's investigation and analysis and in other instances the delegate agency may decide to reach a tentative decision regarding the other merits of the application prior to requesting the Reconstruction Finance Corporation investigation and report. Arrangements should be made between the delegate agency and the Reconstruction Finance Corporation to pool information and avoid duplication in the investigation process.

6. On the basis of all the necessary investigations and analyses, the delegate agencies will prepare their recommendations as to appropriate action on the applications. Applications, which the delegate agency concludes meet the criteria for favorable action, will be sent by the delegate agency to the Resources Board with a "proposal for certification." This proposal will be specific as to amount, terms, and conditions of the loan.

7. In evaluating the merits of an application, agencies with substantial interest therein may have conflicting views. In such event, the following is the procedure:

(a) When a nondelegate agency's position on an application differs from that of the delegate agency, an informal attempt should be made to reach an agreement as to the disposition of the application.

(b) If such agreement is not forthcoming, the delegate agency should accompany its approval recommendations to the Resources Board with such dissenting recommendations as the nondelegate agencies have presented.

(c) If an agreement is not forthcoming when a delegate agency makes a determination that denial of the application is appropriate, the case is acted upon by delegate agency without bringing the Resources Board into the action unless the dissenting nondelegate agency makes a formal request to the delegate agency to have the Resources Board give consideration to its position in the case.

(d) If such formal requeset is made, the degelate agency will not take action on the application until both parties have had opportunity to present their views to the Resources Board.

The procedure outlined in this paragraph applies also in instances in which a responsible delegate agency dissents with the position of another interested delegate agency.

8. Delegate agency's proposal for certification, with attendant documents, will be docketed, reviewed, and analyzed by the Resources Board.

9. Decision of the Chairman of the Resources Board will be transmitted to the delegate agency.

10. In those cases in which the decision calls for certification of a loan, arrangements will be made by the Resources Board with the Bureau of the Budget for the necessary transfer of funds to the Reconstruction Finance Corporation.

11. Upon receipt of the decision of the Chairman of the Resources Board, the delegate agency will issue the appropriate certification to the Reconstruction Finance Corporation in accord with such decision.

12. Final arrangements for the loan will be carried out by the Reconstruction Finance Corporation working in direct contact with the applicant.

DPA CRITERIA FOR PROCESSING LOAN APPLICATIONS
SCHEDULE VII (2)

CRITERIA FOR PROCESSING APPLICATIONS FOR LOANS UNDER TITLE III (SEC. 302)
OF THE DEFENSE PRODUCTION ACT OF 1950

I. Before an application for a loan (title III, sec. 302) will be approved, all the following criteria must be met:

1. That the funds will be used for

(a) expansion of capacity or

(b) development of technological processes, or

(c) production of essential materials (including the exploration, development, and mining of strategic and critical materials and minerals).

2. That such funds will be used:

(a) To expedite production and deliveries or services to aid in carrying out government contracts for the procurement of materials and the performance of services for the national defense.

3. That funds for the purposes for which application is made are not otherwise available on reasonable terms.

4. That the expansion of facilities or the development of technological process or the production of essential materials, as intended by the use of such funds, cannot be accomplished in another manner which will place less strain on such strategic factors as manpower, materials, transportation facilities, defense security, etc.

5. That the factors of production needed in order to make effective use of funds for which application is made are available and that the proposed project is feasible.

6. That multilabor shifts, idle facilities, existing unused capacity, or readily convertible facilities are not available and suitable for accomplishing the purpose for which the funds are intended.

7. That the management which will direct and control the use of such funds is competent of doing so in an efficient and responsible manner.

8. That the funds will be used in such manner as to relieve, at least in part, current or prospective shortages of materials or services essential for defense. 9. That the applicant must be a private business enterprise (including research corporations not organized for profit).

II. The following principles or guides must be employed to the maximum extent in arriving at a final determination upon a loan application (title III, sec. 302):

1. That the funds will be used in such manner as to promote competitive enterprise and to assist in the development and expansion of small business. 2. That the funds will not be used, directly or indirectly, to create or strengthen monopolies, injure small business, or otherwise promote undue concentration of economic power.

3. That the materials or services to be produced or the facilities which are to be expanded will be or will produce materials which are or are likely to become in critical supply as evidenced by the imposition of inventory controls, allocations, or priority controls.

4. That the use of such funds will not require diversion of materials and/or facilities from more important or equally important civilian or military use. 5. That the materials or services or facilities for which such funds are intended, will relieve existing or currently threatening bottlenecks in the production or distribution of materials or services needed for defense.

6. That the applicant is in fact performing under a defense contract or is negotiating for a defense contract, for which the funds will be used to permit completion or initiation of performance under such contract.

7. That the project for which such funds are intended is one which fits appropriately into essential programs for national defense.

82354-52-19

LOAN REGULATIONS UNDER THE DEFENSE PRODUCTION ACT

SCHEDULE VII (3)

TITLE 32A-NATIONAL DEFENSE, APPENDIX

Chapter VI-National Security Resources Board

PART 601-LOANS UNDER SECTION 302 OF THE DEFENSE PRODUCTION ACT OF 1950

The following regulation is hereby prescribed by the Chairman of the National Security Resources Board, with the approval of the President, pursuant to the authority contained in Executive Order 10161, dated September 9, 1950:

POWERS AND DUTIES OF DELEGATE AGENCIES AND THE RECONSTRUCTION FINANCE CORPORATION

AUTHORITY: §§ 601.1 to 601.23 issued under sec. 704, Pub. Law 774, 81st Cong. Interpret or apply sec. 302, Pub. Law 774, 81st Cong., E. O. 10161, Sept. 9, 1950, 15 F. R. 6105.

DEFINITIONS

§ 601.1 Meaning of terms. As used in this part, unless the context otherwise requires, terms shall have the meaning ascribed in §§ 601.2 to 601.5.

§ 601.2 Borrower. "Borrower" means any private business enterprise (including research corporations not organized for profit) to whom a loan is made pursuant to section 302 of the Defense Production Act of 1950.

§ 601.3 Certificate. “Certificate" means a certificate issued by a delegate agency certifying that a loan upon the terms and conditions set forth therein is necessary to expedite production and deliveries or services to aid in carrying out Government contracts for the procurement of materials or the performances of services for the national defense.

§ 601.4 Deleate agency. "Delegate agency" means any government officer or agency designated by section 303 of Executive Order 10161 to issue certificates as to the necessity for loans authorized by section 302 of the Defense Production Act of 1950, or any government officer, agency or employee to whom the authority to issue certificates has been redelegated pursuant to section 902 (b) of said Executive order.

§ 601.5 Loans. "Loans” means loans authorized by section 302 of the Defense Production Act of 1950 and shall include participations in and guarantees of loans.

POWERS AND DUTIES OF DELEGATE AGENCIES AND THE RECONSTRUCTION FINANCE CORPORATION

§ 601.10 Delegate agencies. The delegate agencies are hereby authorized and directed to determine within the limitations of §§ 601.15 to 601.23 the terms and conditions upon which a loan may be made.

§ 601.11 The Reconstruction Finance Corporation. The Reconstruction Finance Corporation is hereby authorized and directed upon the receipt of a certificate or certificates from any delegate agency and upon the allocation of the necessary funds to make a loan or loans to a borrower upon the terms and conditions set forth in such certificate or certificates.