Bigger Stockpiles

Last week the Administration announced a new policy for increasing stockpiles. It was a turnabout from the policy laid down only five months ago. Then, the Office of Defense Mobilization had ordered a slowdown in stockpile purchases on the ground that the piles were about big enough. What had happened since November to cause the switch?

The announced reason for increasing stockpiles, which now contain $4.3 billion worth of materials, was that war might cut off the flow of strategic materials. Actually, the Administration was making a strategic virtue of economic necessity. Prices for many metals have softened so much since the shooting stopped in Korea that cries for help have sounded on the ears of Senators and Representatives from mining states. Increased stockpiling of 35 to 40 minerals and metals will tend to firm up prices, help keep U.S. mines and smelters in operation and tone down producers' demands for more tariff protection, since stockpile additions are "to be purchased, wherever possible, from domestic producers." For these reasons, the new policy was wryly described by one Washington expert as "a WPA for the metals industry."

Another reason for boosting stockpiles is that the Administration is being forced to buy up more stocks of copper, lead, zinc, tin, magnesium, tungsten and other metals than it had planned. While the fighting was on in Korea, the Truman Administration encouraged expansion of domestic mineral and metal products beyond normal needs by guaranteeing a market for much of the extra output. The guarantees served their purpose. But when demand slacked off and prices fell, the Administration had to buy up the surplus. It either had to raise stockpile limits or dump excess metals on a shaky market.

The post-Korean sag in metals also severely jolted some metal-exporting foreign countries, and the higher goals may allow some stockpile" purchasing abroad. The Randall Report, the Milton Eisenhower Report on Latin America and the Capehart Report on defense production all recommended increased stockpiling as a sound way of bolstering wobbly foreign economies. Last week the Administration gave one neighbor a lift by agreeing to buy up 100,000 tons of Chilean copper.

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