STRATEGIC STOCKPILE: Is It for Security or Subsidy?

AT a time when economy is thewatchword of the U.S. Government, the spending to stockpile “critical and strategic” defense materials has been greatly increased. Defense Mobilizer Arthur Flemming announced last week that in fiscal 1955 the U.S. will spend $900 million (some $250 million more than 1954) to buy 22 essential stockpile items, from aluminum and diamonds to feathers and fluorspar. By next year, the bulging U.S. war chest will reach a staggering $5 billion, rivaling the $6.5 billion farm surplus hoard. Since the buying was stepped up after the end of the Korean war, a big question has been raised: Is the strategic stockpile a military program, or is it a vast and expensive price-support program for the U.S. mining industry?

Actually, it is both. The strategic stockpile was first started to give the U.S. a minimum reserve of essential raw materials to tide it over the initial shock of any future attack. During the Korean war, stockpile expenditures rose from $438 million in fiscal 1950 to $919 million in 1953, and then back down to $650 million after the war ended. But last March the entire scope of the program was radically changed. Instead of military men, civilians now control the program, and it was expanded to include a new series of “long-range” goals that would make the U.S. virtually self-sufficient in strategic materials.

The program assumed that in wartime all sources of supply except Canada and Mexico would be cut off from the U.S., and that even some metal-processing plants in the U.S. might be blasted out of commission. But if the stockpile assumption is that the U.S. will be cut off from all supply, it is the only aspect of U.S. defense based on that idea. All the armed forces have planned their strategy with the idea that the U.S. will have allies, and that it will be able to maintain supply lines back and forth across the oceans. Furthermore, if self-sufficiency is the goal, the U.S. should be spending its money only for those highly critical metals that cannot be found at home, instead of buying aluminum, nickel, molybdenum, etc., which are available in the U.S., Canada and Mexico.

Another announced objective of the expanded program was to strengthen the entire mobilization base by keeping the metal industry healthy, i.e., buying materials when there were plenty available and, consequently, when prices were low. Though operating under a heading of military necessity, such a program amounts to price supports for part of the U.S. mining industry. This year, for example, U.S. producers of lead and zinc were in such serious trouble that they wanted higher tariffs to protect themselves from cheaper foreign metals. President Eisenhower last month rejected the tariff boost, but instead he almost doubled the rate of stockpile buying. In fiscal 1955 stockpiling lead and zinc will cost the U.S. close to $250 million. Furthermore, some $400 million of 1955’s $900 million outlay is to be used to reimburse the armed forces for the supply of ten metals (aluminum, cobalt, copper, etc.) that they have already bought, then transfer the metals to the stockpile.

Currently, the armed forces’ holdings are a serious worry to metal producers. They hang over the market because there is nothing to prevent the Government from throwing the supply on the open market, thus causing lower prices. The metalsmen want this supply salted away in the strategic stockpile, where it cannot be released without a specific presidential order.

Some Congressmen, e.g., New Hampshire’s Republican Senator Bridges, have charged that the whole stockpile program is poorly run. But the big trouble is that no one can really judge how the program is being run because of the supersecrecy that surrounds most of its operations.

As long as the stockpile had a purely military purpose, strict secrecy could be defended. But secrecy is much harder to defend in a program that is becoming increasingly civilian in its aims. Still on the secret list are stockpile goals for many noncritical materials that the Government is committed to support. In the case of common-use materials such as aluminum, copper, talc, mica and silk, Russia would gain little by knowing how much is in the U.S. stockpile.

Obviously, no future enemy should be told the goals for highly critical military materials. There is also a real need for a military stockpiling program. But under the current stockpile policy, the stockpile is tending toward civilian rather than purely military purposes. In such circumstances, the stockpile operates much like the farm-support program, and as such, there are many civilian aspects of it that could now be publicized in full without endangering the security of the nation, so that the U.S. public can better judge if the money is being wisely spent.