World War II and the Korean War Period

The Naval Appropriations Act of 1938 and the Strategic Materials Act of 1939 created and provided initial funding ($100 million) for a stockpile of strategic raw materials. Threatened by the potential loss of imports as a result of Japanese conquests in Asia and possible war in Europe, the Army and Navy Munitions Board (established in 1922) developed a list of 42 strategic and critical materials needed for wartime production (Snyder, 1966). By December 1941, $70 million had been appropriated by Congress and $54 million worth of materials had been acquired (Greenwood, 1994). Of the 15 materials in the stockpile during World War II only three were from domestic sources. Between 1942 and 1944, six materials were released for military needs and a seventh, under contract, was redirected before reaching the stockpile, by Executive Order of the President (War Department and Navy Department, 1947).

The first major post-World War II congressional debate on stockpiling began in 1946. The Congress considered the purposes of the stockpile (military versus civilian), the acceptable sources of materials (domestic versus foreign), and appropriate policy and management methods. The resulting legislation, the Strategic and Critical Materials Stockpiling Act of 1946, amended the Strategic Materials Act of 1939 and provided for the Secretaries of War, Navy, and Interior, acting jointly through the agency of the Army and Navy Munitions Board, to be authorized and directed to determine which materials were strategic and critical and to determine the quality and quantity of such materials that were to be stockpiled (Snyder, 1966). The Secretaries of State, Treasury, Agriculture, and Commerce were to cooperate in this effort. The 1946 law established many of the principles by which the NDS operates today. It authorized the appointment “to the fullest extent practicable” of industry advisory committees. The Buy-American Act of 1933 would apply to purchases. Purchases of materials would be done by the Procurement Division of the Treasury Department, which subsequently became the Bureau of Federal Supply. The law called for the storage of materials on military and naval reservations and for the refining, processing, and rotating of materials. It authorized the disposal of materials on 6 months’ notice in the Federal Register and notice to Congress but said also that except for reasons of obsolescence no materials might be disposed of without congressional approval. And, finally, the law established the Presidential authorization that was required for the release of materials.

In a further development, the National Security Act of 1947 created a civilian mobilization agency to advise the President and gave it responsibility for the coordination of military, civilian, and industrial mobilization, including the policies establishing adequate reserves of strategic and critical materials and for the conservation of these reserves (Snyder, 1966). And in 1950, following a White House National Security Council assessment, a process was established for identifying

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