The concept of a mobilization base, i. e., the productive capacity which the Nation would need in order to move quickly in a full-scale war production, is not novel. The Stockpiling Act of 1946 recognized one element of such a base by providing for the purchase and storage of materials needed for war and for which we would be dependent upon overseas supplies. Prior to that, the historical development of arsenals and navy yards for special productive uses related to key weapons and military equipment recognized that there are certain specialized productive and supply operations which must be provided in peacetime as a base for the national defense. The gratifying response of private industry, whose output or services are important to defense and to mobilization readiness, to the inducements for expansion provided by the Defense Production Act and the tax-amortization authority has done much to make America stronger. A great expansion program has been accomplished largely by means of the Government's permission to private companies to accelerate the rate of depreciation of their new facilities together with the provision of priorities and allocation assistance to secure the necessary construction equipment and materials. In addition to the expansion of industrial facilities there have been substantial accretions to the stockpile, even though we have fallen below the established goals for certain critical materials as has been mentioned previously in this report. These measures have not, however, provided a rounded mobilization base. From this vantage point, with the production program well under way, it is possible to identify many of the gaps in the productive machinery and in materials availabilities which will constitute artificial ceilings or bottlenecks upon a total effort unless they can be eliminated. Your committee has been informed by mobilization officials that there are needed facilities whose usefulness is substantially limited to war production which private industry has advised they will not undertake upon the strength of tax postponement or Government loans and loan guaranties. During World War II more than 2,000 production facilities were built by the Government through the agency of the Defense Plants Corporation. In the current preparedness effort it has been the policy of the Government as a whole to avoid Government construction of plants and to rely upon private industry aided by Government loans and tax incentives. Your committee feels that this has been a wise policy and that it has worked well, in general. In the process, however, of rounding out the mobilization base it is the view of mobilization officials that we will be faced with problems which would be unattractive to private industry. These officials point out that the production of some types of machine tools require many months which could not be spared after M-day. Yet the peacetime requirement for such tools would not justify their purchase by industry. Similarly, finishing capacity for certain shapes and forms of steel and aluminum required for full mobilization would not be fully occupied short of war, yet it cannot be created quickly after war begins. The Congress will look to mobilization agencies to present the case for any new authority that is needed during the next session. The third production goal-expanding basic capacity is nearing substantial achievement. The increase in steel and aluminum capacity is well known. Equally important advances have been made in a large number of chemicals and in other metals and in the provision of transportation service and energy resources. While the Government's role has been important, your committee feels that major credit must be given to the optimism and confidence of American industry for the remarkable progress in this area. By widening the base of the entire industrial economy the Nation has achieved increased readiness not only for the advent of war but for the maintenance of ever-increasing living standards for our people if war can be avoided. There is reason to hope that inflationary pressures will not substantially increase during the balance of the program, barring unexpected developments in the international situation. Nevertheless, the situation justifies optimism rather than complacency. The problem of economic stabilization while military production continues at the rate of 8 to 10 billions of dollars per quarter will justify the most careful consideration by the new Congress. Having seen the production machine get into high gear, it is the purpose of your committee to warn against any slackening of effort. It is perhaps correct to say "well started is half done," but half done is not enough. The creation of strength to deter aggression is essential to the survival of the free world and there must be no hesitation or loss of momentum in completing the job. COMMITTEE PUBLICATIONS The complete list of your committee's printed reports is as follows: Hoarding and Strategic Materials: Hearing before the Joint Committee on Defense Production, December 20, 1950. Regulation W-Automotive: Hearing on the effect of regulation W on automotive sales and financing, December 6, 7, 8, and 11, 1950. Progress Report No. 1: Discussion of Defense Production Act, Eric Johnston and Michael DiSalle, February 9, 1951. Progress Report No. 2: To hear Charles E. Wilson, Director of Defense Mobilization, February 8, 1951. Progress Report No. 3: Wage Stabilization Board and Defense Production Administration, February 13, 1951. *Progress Report No. 4: To hear Michael V. DiSalle, Director, Office of Price Stabilization, March 2, 1951. Progress Report No. 5: Secretary Charles F. Brannan and Michael V. DiSalle on cotton controls, March 8, 1951. Progress Report No. 6: Manly Fleischmann, Administrator, NPA, on tax amortization program, March 19, 1951. *Progress Report No. 7: Charles E. Wilson, Director, Office of Defense Mobilization on his April 1 report to the President; opinion on Government contracts by Robert L'Heureux, April 4, 1951. Progress Report No. 8: William H. Harrison, Administrator, Defense Production Progress Report No. 10: Charles E. Wilson, Director, Office of Defense Mobilization; Manly Fleischmann, Administrator, Defense Production Administration; and Michael V. DiSalle, Director, Office of Price Stabilization, price regulations, allocations, and priorities, November 26 and 27, 1951. Progress Report No. 11 (S. Rept. No. 1061): Steel, copper, and aluminum allocations survey, January 15, 1952. Progress Report No. 12: Gordon Dean, Chairman, and others from the Atomic Energy Commission, discussion of Savannah River project, November 27, 1951. Progress Report No. 13 (S. Rept. No. 1107): Machine tools, January 23, 1952. *Supply exhausted; no longer available. Progress Report No. 14 (S. Rept. No. 1310): World supply, United States production, consumption, imports and exports of steel, copper, and aluminum, and domestic requirements and allocations, March 17, 1952. Progress Report No. 15 (S. Rept. No. 1062): Electric power study, January 15, 19.52. *Progress Report No. 16: Charles E. Wilson, Director, Office of Defense Mobilization, and Manly Fleischmann, Administrator, Defense Production Administration, on second quarter 1952 allocations, January 9, 1952. *Progress Report No. 17: Charles Sawyer, Secretary of Commerce; Thomas H. MacDonald, Commissioner, Bureau of Public Roads; and Vice Adm. Edward Cochrane, Administrator, Maritime Commission, on second quarter 1952 allocations, January 15, 1952. Progress Report No. 18: Arthur S. Flemming, Assistant to the Director-Manpower, and Rodolfo A. Correa, General Counsel, Office of Defense Mobilization, on procurement in labor surplus areas, February 6, 1952. Progress Report No. 19: Various witnesses on the Canadian aluminum proposals, May 26 and June 2, 1952. Progress Report No. 20 (S. Rept. No. 1987): Aluminum program, June 30, 1952. Progress Report No. 21: Henry H. Fowler, Director, Office of Defense Mobilization, on current and future defense activities, October 1, 1952. ACTIVITIES OF AGENCIES HAVING FUNCTIONS UNDER DEFENSE PRODUCTION ACT All Federal agencies having functions under the Defense Production Act were requested to submit reports of their activities for the year. These reports will be found in the appendix to this report. *Supply exhausted; no longer available. Chairman, Joint Committee on Defense Production, United States Senate, Washington, D. C. DEAR SENATOR MAYBANK: In reply to your letter of August 22, 1952, requesting a report on activities under the Defense Production Act, the following information is submitted: The Office of Defense Mobilization was established in the Executive Office of the President by Executive Order 10193 of December 16, 1950, issued pursuant to the Defense Production Act. Executive Order 10193 provides that the Director of Defense Mobilization "shall on behalf of the President direct, control, and coordinate all mobilization activities of the executive branch of the Government, including but not limited to production, procurement, manpower, stabilization, and transport activities." The Director is authorized to perform his functions through such officers and such agencies as he shall determine, consonant with law. Section 802 of Executive Order 10161 of September 9, 1950, as amended, which delegated certain functions of the President under the Defense Production Act, provides that all 39 |