to section 3709 of the Revised Statutes. A reasonable time (not to exceed one year) shall be allowed for production and delivery from domestic sources and in the case of any such material available in the United States but which has not been developed commercially, the Secretary of War and the Secretary of the Navy may, if they find that the production of such material is economically feasible, direct the purchase of such material without requiring the vendor to give bond;

"(b) provide for the storage, security, and maintenance of strategic and critical materials for stock-piling purposes on military and naval reservations or other locations, approved by the Secretary of War and the Secretary of the Navy;

"(c) provide through normal commercial channels for the refining or processing of any materials acquired or transferred under this Act when the Secretary of War and the Secretary of the Navy deem such action necessary to convert such materials into a form best suitable for stock piling, and such materials may be refined, processed, or otherwise beneficiated either before or after their transfer from the owning agency;

"(d) provide for the rotation of any strategic and critical materials constituting a part of the stock pile where necessary to prevent deterioration by replacement of acquired stocks with equivalent quantities of substantially the same material with the approval of the Secretary of War and the Secretary of the Navy;

"(e) dispose of any materials held pursuant to this Act which are no longer needed because of any revised determination made pursuant to section 2 of this Act, as hereinafter provided. No such disposition shall be made until six months after publication in the Federal Register and transmission of a notice of the proposed disposition to the Congress and to the Military Affairs Committee of each House thereof. Such notice shall state the reasons for such revised determination, the amounts of the materials proposed to be released, the plan of disposition proposed to be followed, and the date upon which the material is to become available for sale or transfer. The plan and date of disposition shall be fixed with due regard to the protection of the United States against avoidable loss on the sale or transfer of the material to be released and the protection of producers, processors, and consumers against avoidable disruption of their usual markets: Provided, That no material constituting a part of the stock piles may be disposed of without the express approval of the Congress except where the revised determination is by reason of obsolescence of that material for use in time of war. For the purposes of this paragraph a revised determination is by reason of obsolescence if such determination is on account of (1) deterioration, (2) development or discovery of a new or better material or materials, or (3) no further usefulness for use in time of war.

"SEC. 4. The Secretary of War and the Secretary of the Navy shall submit to the Congress, not later than six months after the approval of this Act, and every six months thereafter a written report detailing the activities with respect to stock piling under this Act, including a statement of foreign and domestic purchases, and such other pertinent information on the administration of the Act as will enable the Congress to evaluate its administration and the need for amendments and related legislation.

"SEC. 5. The stock piles shall consist of all such materials heretofore purchased or transferred to be held pursuant to this Act, or hereafter transferred pursuant to section 6 hereof, or hereafter purchased pursuant to section 3 hereof, and not disposed of pursuant to this Act. Except for the rotation to prevent deterioration and except for the disposal of any material pursuant to section 3 of this Act, materials acquired under this Act shall be released for use, sale, or other disposition only (a) on order of the President at any time when in his judgment such release is required for purposes of the common defense, or (b) in time of war or during a national emergency with respect to common defense proclaimed by the President, on order of such agency as may be designated by the President. "SEC. 6. (a) Pursuant to regulations issued by the War Assets Administration or its successor, every material determined to be strategic and critical pursuant to section 2 hereof, which is owned or contracted for by the United States or any agency thereof, including any material received from a foreign government under an agreement made pursuant to the Act of March 11, 1941 (55 Stat. 31), as amended, or other authority, shall be transferred by the owning agency, when determined by such agency to be surplus to its needs and responsibilities, to the stock piles established pursuant to this Act, so long as the amount of the stock

pile for that material does not exceed the quantities determined therefor pursuant to section 2 hereof. There shall be exempt from this requirement such amount of any material as is necessary to make up any deficiency of the supply of such material for the current requirements of industry as determined by the Civilian Production Administration or its successor. There shall also be exempt from this requirement (1) any material which constitutes contractor inventory if the owning agency shall not have taken possession of such inventory, (2) such amount of any material as the Army and Navy Munitions Board determines (i) are held in lots so small as to make the transfer thereof economically impractical; or (ii) do not meet or cannot economically be converted to meet, stockpile requirements determined in accordance with section 2 of this Act. The total material transferred to the stock piles established by this Act in accordance with this section during any fiscal year beginning more than twelve months after this Act becomes law shall not exceed in value (as determined by the Secretary of the Treasury on the basis of the fair market value at the time of each transfer) an amount to be fixed by the appropriation Act or Acts relating to the acquisition of materials under this Act.

"(b) Any transfer made pursuant to this section shall be made without charge against or reimbursement from the funds available under this Act, except that expenses incident to such transfer may be paid or reimbursed from such funds, and except that, upon any such transfer from the Reconstruction Finance Corporation, or any corporation organized by virtue of the authority contained in the Act of January 22, 1932 (47 Stat. 5), the Secretary of the Treasury shall cancel notes of Reconstruction Finance Corporation, and sums due and unpaid upon or in connection with such notes at the time of such cancellation, in an amount equal to the fair market value as determined by the Secretary of the Treasury of the material so transferred.

"(c) Effective whenever the Secretary of the Treasury shall cancel any notes pursuant to subsection (b) of this section, the amount of notes, debentures, bonds, or other such obligations which the Reconstruction Finance Corporation is authorized and empowered to have outstanding at any one time under the provisions of existing law shall be deemed to be reduced by the amount of the notes so canceled.

"(d) Subsection (b) of section 14 of the Act of October 3, 1944 (58 Stat. 765), is hereby amended to read as follows:

"(b) Subject only to subsection (c) of this section, any owning agency may dispose of

"(f) any property which is damaged or worn beyond economical repair; "(2) any waste, salvage, scrap, or other similar items;

"(3) any product of industrial, research, agricultural, or livestock operations, or of any public works construction or maintenance project, carried on by such agency;

which does not consist of materials which are to be transferred in accordance with the Strategic and Critical Materials Stock Piling Act, to the stock piles established pursuant to that Act.'

"(e) Section 22 of the Act of October 3, 1944 (58 Stat. 765), is hereby repealed: Provided, That any owning agency as defined in that Act having control of materials that, when determined to be surplus, are required to be transferred to the stock piles pursuant to subsection (a) hereof, shall make such determination as soon as such materials in fact become surplus to its needs and responsibilities.

"SEC. 7. (a) The Secretary of the Interior, through the Director of the Bureau of Mines and the Director of Geological Survey, is hereby authorized and directed to make scientific, technologic, and economic investigations concerning the extent and mode of occurrence, the development, mining, preparation, treatment, and utilization of ores and other mineral substances found in the United States or its Territories or insular possessions, which are essential to the common defense or the industrial needs of the United States, and the quantities or grades of which are inadequate from known domestic sources, in order to determine and develop domestic sources of supply, to devise new methods for the treatment and utilization of lower grade reserves, and to develop substitutes for such essential ores and mineral products; on public lands and on privately owned lands, with the consent of the owner, to explore and demonstrate the extent and quality of deposits of such minerals, including core drilling, trenching, test-pitting, shaft sinking, difting, cross-cutting, sampling, and metallurgical investigations and tests as may be necessary to determine the extent and quality of such deposits, the most suitable methods of mining and beneficiating them, and the cost at which the minerals or metals may be produced.

"(b) The Secretary of Agriculture is hereby authorized and directed to make scientific, technologic, and economic investigations of the feasibility of develop ing domestic sources of supplies of any agricutural material or for using agricultural commodities for the manufacture of any material determined pursuant to section 2 of this Act to be strategic and critical or substitutes therefor.

"SEC. 8. For the procurement, transportation, maintenance, rotation, storage, and refining or processing of the materials to be acquired under this Act, there is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, such sums as the Congress, from time to time, may deem necessary to carry out the provisions of this Act. The funds so appropriated, including the funds heretofore appropriated, shall remain available to carry out the purposes for which appropriated until expended, and shall be expended under the joint direction of the Secretary of War and the Secretary of the Navy.

"SEC. 9. Any funds heretofore or heerafter received on account of sales or other dispositions of materials under the provisions of this Act, except funds received on account of the rotation of stocks, shall be covered into the Treasury as miscellaneous receipts.

"SEC. 10. This Act may be cited as the Strategic and Critical Materials Stock Piling Act'."

Approved July 23, 1946.

EXHIBIT No. 3

[Department of State Publication 2411, November 1945]

PROPOSALS FOR EXPANSION OF WORLD TRADE AND EMPLOYMENT
Developed by a technical staff within the Government of the
United States in preparation for an International Conference on
Trade and Employment and presented for consideration by the
peoples of the World.

FOREWORD BY THE SECRETARY OF STATE

The proposals contained in this pamphlet have been developed by experts drawn from several agencies of the United States Government, working together under the general chairmanship of William L. Clayton, Assistant Secretary of State, and are published, for consideration by the people of the United States and by the peoples and the governments of other countries, in preparation for an International Conference on Trade and Employment.

It is important that such a Conference, based on these or similar proposals, should meet as soon as possible. Nations are now determining the policies which they will apply to trade in the postwar world. It is urgently necessary that these policies should be agreed upon, in order that the world may not separate into economic blocs.

The Government of the United States, therefore, believes that such a Conference should meet, under the sponsorship of the United Nations, not later than the summer of 1946. The representatives of the United States in the appropriate organs of the United Nations will urge that this be done.

The success of such a Conference depends on adequate preparation. This preparation should go forward immediately. The present publication and the careful work that lies behind it represent a determined effort to come to grips with the problems that wil confront such a Conference and so to prepare the way for its success.

JAMES F. BYRNES.

DEPARTMENT OF STATE, Washington, November 1, 1945.

MR. SECRETARY: I hand you herewith "Proposals for Consideration by an International Conference on Trade and Employment," together with a statement of their purpose.

These proposals have been developed over many months by a group of experts drawn from all the interested departments and agencies of the Government. They are intended to suggest a way in which the United States and other countries may concert their policy and action in the field of international trade so that the enormous productive powers which lie all about us may be released

to operate fully for the general benefit. They are not regarded as final and perfect, but as a working basis for discussion and, I hope, for international action in the near future.

It is important that international agreement on the range of questions covered by these proposals be reached soon. All countries are faced by serious commercial problems and are taking action on them every day. Unless they act together, they will act at cross purposes and may well do serious damage to each other. But if they do act together, there is every possibility that the peoples of the world may enjoy, in our lifetime, a higher degree of prosperity and welfare than they have ever had before. Powers of production are now the greatest that the world has known. To bring them into play requires agreement on principles of exchange and distribution which will permit trade, production, employment, and consumption all to expand together.

I therefore recommend that these proposals be published as a basis of discussion and I would hope that such discussion might lead to an International Conference on Trade and Employment, to meet under the sponsorship of the United Nations, not later than the summer of 1946. Respectfully,

WILLIAM L. CLAYTON, Assistant Secretary of State.

EXPANSION OF WORLD TRADE AND EMPLOYMENT

ANALYSIS OF THE PROPOSALS

The main prize of the victory of the United Nations is a limited and temporary power to establish the kind of world we want to live in.

That power is limited by what exists and by what can be agreed on. Human institutions are conservative; only within limits can they be moved by conscious choice. But after a great war some power of choice exists; it is important that the United Nations use it wisely.

The fundamental choice is whether countries will struggle against each other for wealth and power, or work together for security and mutual advantage. That choice was made in principle at San Francisco and has since been ratified by the overwhelming majority of the governments concerned. The business of the immediate future is to give that decision the necessary body of common institutions and so to support those institutions that the experiment may succeed. Success requires that the United Nations work together in every field of common interest, in particular the economic. The experience of cooperation in the task of earning a living promotes both the habit and the techniques of common effort and helps make permanent the mutual confidence on which the peace depends. The United Nations have therefore created not only an Economic and Social Council but special bodies to help them work together on many practical matters. Already there exist, or are in process of creation, agencies to deal with emergency relief, with currency, with international investment, with civil aviation, with labor, and with food and agriculture.

The United Nations should also endeavor to harmonize their policies with respect to international trade and employment. An International Trade Organization is still to be created. To this end, it is now proposed that an International Conference on Trade and Employment should be called by the United Nations, to meet not later than the summer of 1946.

The common interests of countries in world trade are obvious. Science and technology have enormously increased the productive powers of man. Limits upon human welfare are imposed today, not by the ultimate poverty of nature's resources, but by failure to use human powers to the full. Among the factors which obstruct our march toward the goal of freedom from want are excessive restrictions on exchange and distribution. Progress requires release from these restrictions.

Every country has its arrangements for the organization of production and distribution within its borders. To make the best use of these arrangements, countries must exchange their products. World trade is not only the device through which useful goods produced in one country are made available to consumers in another; it is also the means through which the needs of people in one country are translated into orders and therefore into jobs in another. Trade connects employment, production and consumption, and facilitates all three. Its increase means more jobs, more wealth produced, more goods to be enjoyed.

Countries should therefore join in an effort to release trade from the various restrictions which have kept it small. If they succeed in this they will have made a major contribution to the welfare of their peoples and to the success of their common efforts in other fields.

International trade is kept small by four things:

(1) Restrictions imposed by governments;

(2) Restrictions imposed by private combines and cartels;

(3) Fear of disorder in the markets for certain primary commodities: (4) Irregularity, and the fear of irregularity, in production and employment.

The Proposals which are herewith published deal with each of these problems. I. Release from Restrictions Imposed by Governments

Governments have restricted the freedom of traders by many measures and for many reasons. They will continue to do so. No government is ready to embrace "free trade" in any absolute sense. Nevertheless, much can usefully be done by international agreement toward reduction of governmental barriers to trade.

These barriers take many forms. A transaction between a willing buyer in one country and a willing seller in another may be prevented because the tariff of the buyer's country creates an added cost too great to be borne; or because the paperwork required for export or import is so burdensome that the deal is not worth while; or because the seller cannot get an export license; or because the buyer cannot acquire the seller's currency to make a payment; or because importation is restricted by the buyer's country to a quota which has been exhausted or because it is forbidden altogether. Or the seller many discover that tariff of the buyer's country discriminates against him in favor of sellers located elsewhere.

All these restrictions and the red tape connected with them have undoubtedly prevented many business transactions, cut down the total of world trade, and reduced to that extent the benefits which trade might bring to all the parties concerned.

Barriers of this sort are imposed because they serve or seem to serve some purpose other than the expansion of world trade. Within limits they cannot be forbidden. But when they grow too high, and especially when they discriminate between countries or interrupt previous business connections, they create bad feeling and destroy prosperity. The objective of international action should be

to reduce them all and to state fair rules within which those that remain should be confined.

This has often been attempted between two countries at a time or among several countries with respect to a single problem. These attempts have not been adequate because the many barriers are interdependent. Every country has its own kind of restriction, adapted to its own situation, and can hardly be expected to throw off its peculiar armor unless the other kinds of armor, employed by other countries, are thrown off at the same time. What is needed is a broad and yet detailed agreement, among many nations, dealing at one time with many different sorts of governmental restrictions upon trade, reducing all of them at once on a balanced and equitable basis, and stating rules and principles within which the restrictions permitted to remain should be administered. To prepare such an agreement should be one of the main tasks of the International Conference on Trade and Employment.

The Proposals now published afford a basis on which agreement might be reached. Rules are suggested to limit quotas and embargoes to carefully defined cases and to avoid discrimination in their application. Provision is made for the substantial reduction of tariffs and the elimination of tariff preferences. Subsidies, especially subsidies on exports, would be brought under supervision. Local taxes on imported products would be limited to rates no higher than those levied on like products produced at home. Agencies of governments conducting foreign trade would be asked to give fair treatment to the commerce of friendly States, to make their purchases and sales on economic grounds, and to avoid using a monopoly of imports to afford excessive protection to domestic producers. On these and other points the Proposals try to state fair principles acceptable to all and of benefit to all.

The proof of any principle is in its application. Therefore, effective preparation for the Conference must include detailed negotiations on trade barriers to commerce as soon as possible. These negotiations should get down to cases, seeking to reduce tariffs, to eliminate preferences, and to lighten or remove other barriers to trade, whatever they may be.