The Combined Boards of the Second World War: An Experiment in International Administration 9780231892643

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THE COMBINED BOARDS OF THE SECOND WORLD WAR

The COMBINED BOARDS

of the SECOND W O R L D WAR AN EXPERIMENT

IN

International Administration by S. McKEE ROSEN

COLUMBIA UNIVERSITY PRESS NEW Y O R K

I951

COPYRIGHT I 9 S 1 , COLUMBIA UNIVERSITY P R E S S , NEW YORK PUBLISHED IN GREAT BRITAIN, CANADA, AND INDIA BY GEOFFREY CUMBERLEGE OXFORD UNIVERSITY P R E S S , LONDON, TORONTO, AND BOMBAY MANUFACTURED I N T H E UNITED STATES O F AMERICA

TO LAURA

Foreword

T

HIS V O L U M E is the study of an experiment in international administration. It is a critical account of the organization and development of the combined boards whose main task was one of assisting to muster the economic strength of the United Nations during World War II. These non-military boards were the Combined Raw Materials Board, the Combined Shipping Adjustment Board, the Combined Production and Resources Board, and the Combined Food Board. Upon the first two of these bodies only the United States and Great Britain were represented fully, while upon the latter two Canada was also a member. In a real sense this present study was first conceived in the midst of war when the pedestrian pace of writing books seemed somewhat unreal in view of existent priorities. During the years 1942-44, the author, as a government officer, was closely associated with the work of the combined boards. Subsequently, he followed the development of the boards until their actual dissolution in 1946. While long-range perspective with regard to these organizations can be achieved only with the passage of time, there is much to be said for an immediate analysis which is based not only upon records but also upon an intimate acquaintance with the nature of the boards themselves. The official records, such as they are, remain indefinitely as a reservoir for the student and practitioner in the field of international administration. But the whole setting—the sense of administrative process—is such that only one who was a close observer is in a position to portray. Much of the evidence contained in the following pages is derived from first-hand interviews and conferences with board officials as well as actual attendance at meetings held under the auspices of the four civilian boards. This volume constitutes, nevertheless, an incomplete treatment for several reasons. It is based upon the account of an American who like any participant was prone to have his own predilections and his own interpretations concerning the fast-moving developments so characteristic of the wartime scene. Likewise, much of the evidence and its documentation are derived from American sources. Although the joint records of the boards were available to the

writer, little opportunity was afforded for close acquaintance with the British point of view as expressed particularly in London. Nor does it appear probable that a British version dealing with the boards will be forthcoming within the near future. In light of these and subsequent considerations it appeared wise to publish this volume even within the limitations which exist. Attempt has been made to present as balanced a view as possible under the circumstances. But more important, the creation and improvement of international administration cannot wait until all the facts are in. The urgency of such efforts calls for decisions in the light of the evidence which is available. T h e planning and management of international agencies until recent years has been limited in scope. Any insights derived from actual experience, accordingly, may prove useful in view of present needs. Moreover, the variety and intensity of wartime experience in administration can only be matched by decades of peacetime conditions. This is not to suggest that the combined boards may be taken as models. But the experience which they present may add to the understanding—should in fact help to test working hypotheses—so essential to the building of sound administration in the international field. This appears equally relevant with respect to such more limited forms of internation economic cooperation as have been developed out of the Marshall Plan and by the North Atlantic Treaty nations. Although the author in his governmental capacity was afforded a unique opportunity to view all four of the combined civilian boards, this volume should in no way be considered as an official interpretation. The citation of relevant documents which are referred to in the text has been cleared with appropriate government authorities of the United Kingdom and the United States. For any errors which may be found in this study the author alone is responsible. The individuals, British and American, to whom the author is indebted are too numerous to be mentioned here. M y associates in the United States Bureau of the Budget, Executive Office of the President, have been extremely helpful throughout this study. M y wife, to whom this book is dedicated, has done more than her share in shaping the manuscript. S.McK.R. Washington, D. C. August 2i, 1950

Contents PART I. T H E COMBINED RAW MATERIALS BOARD

I. Background and Early Stages

ι

II. The Remainder of Its Existence

36

PART II. THE COMBINED SHIPPING ADJUSTMENT BOARD

III. The Setting

71

IV. Theory and Practice

98

PART I I I . THE COMBINED PRODUCTION AND RESOURCES BOARD

V. Early Stages

131

VI. Attempts at Reconstruction

158

PART IV. THE COMBINED FOOD BOARD

VII. Background and Early Stages VIII. Maturity and Dissolution

191 220

PART V. CONCLUSIONS

IX. Conclusions and Generalizations Regarding International Administration Index

257 275

Part ι THE COMBINED R A W M A T E R I A L S BOARD I: Background and Early Stages W A R on six continents and the seven seas involves every phase of economic and political life, for total war is by its very nature all-embracing in influence. It demands that the resources of the entire economy of a nation be mustered against the enemy. It requires that men and machines be so organized and directed as to maximize their impact upon the foe. Thus, in all nations during World War I I government assumed the supreme task of managing and coordinating the war effort. Never before in history had administration—the public servant—confronted a job of such size and magnitude. There were, moreover, marked differences which distinguished the more recent conflict even from the first World War of 1 9 1 4 - 1 8 . The new technology had imposed a much greater demand upon the physical requirements of war—tanks, planes, ships, guns. Mechanized warfare had made of purely economic factors the strategic determinants of success. The very conduct of the war was governed by the availability of raw materials and industrial equipment. Together with shipping they determined "when, where and on what scale new fronts could be established and offensive operations undertaken." Hence, organizing and directing the "battle of production" and the "battle for supply," no less than the conduct of great military engagements, were key determinants in the recent history of modern nations. It was during the Christmas week of 194I, soon after the official entrance of the United States into World War I I , that President Roosevelt and Prime Minister Churchill met in Washington to discuss means for achieving closer collaboration between their countries. Military matters were a prime consideration at this

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conference. However, an integral part of proposed combined effort—that of war supply—was not neglected. At the time the United Nations were faced with increasingly critical supply problems. Important sources of vital raw materials had been captured by the Axis powers. Normal trade routes had been interrupted by military operations on land and sea. Requirements for many items had increased far beyond peacetime levels. It was essential that production be stimulated, procurement be coordinated, and conservation be encouraged; otherwise, the supplies remaining available to the United Nations could not be stretched to meet their needs. The situation was particularly desperate in the case of the United Kingdom, dependent as it was upon imports to meet a major part of its requirements. The problem was more than one of finance, although without careful procurement scarce exchange would be dissipated rapidly. But more important, without effective acquisition and management of supplies, the United Kingdom's contribution to winning the war would be seriously affected. Faced with these conditions, as well as the overriding needs for military collaboration, the President and the Prime Minister, assisted by top officials of their governments, initiated decisive steps intended to insure extensive cooperation. The creation of combined Anglo-American boards during World War I I was part of the effort to establish adequate administrative organization to achieve the common war effort of the two countries. The agencies of this emergent binational setup were, on the one hand, mainly political and military and, on the other, primarily economic. The former embraced the periodical conferences between the President and the Prime Minister themselves, the Pacific War Councils in London and Washington, and the Combined Chiefs of Staff. Closely tied to these agencies were the Combined Munitions Assignment Boards, which, while somewhat economic in character, were controlled directly by the Combined Chiefs of Staff. The non-military organizations which were evolved to deal with economic problems were the Combined Raw Materials Board, the Combined Shipping Adjustment Board, the Combined Production and Resources Board, and the Combined Food Board. These four civilian boards constitute the main subject matter of this volume. An account of the background and development of the first of

B a c k g r o u n d and E a r l y Stages

3

these, the Combined Raw Materials Board, is the task of these opening chapters. P R E - P E A R L HARBOR

The growing concern of the United States over the supply of raw materials was a part of its gradual awakening to the nature of total war. Such concern was expressed by high government officials as early as the spring of 1940. On M a y 1 of that year the Under Secretary of State urgently wrote to the President with regard to the problem of continued supply of strategic materials. He mentioned that the materials of greatest concern at the time were tin and rubber, and he suggested that the total amount of $12,500,000 appropriated under the Treasury Department appropriation act for purchase of strategic and critical materials be expended immediately. 1 At the President's request this whole matter was apparently discussed at Cabinet meeting. 1 Shortly afterwards, Bernard Baruch, the White House Adviser, expressed similar anxiety. He urged that methods of conserving tin, manganese, rubber, and other raw materials be found, and that openings of new sources of supply be undertaken. This could be done, he pointed out, by the agent purchasing these commodities. For instance, Mr. Baruch queried, what possibility was there of getting guayule rubber in southern United States, and how could the production from Mexico be increased? What rubber could be obtained from South America? How could imports be increased generally from present sources?' The raw materials situation became somewhat more crystallized at the end of June. At that time Edward Stettinius, J r . , head of the Division of Industrial Materials of the National Defense Advisory Commission, submitted three reports to the President at the latter's request. These dealt respectively with (1) the storage of aviation gasoline in this country, (2) purchase and acquisition of antimony and tungsten from China, and (3) transportation and 1 Sumner Welles to the President, May i, 1940. (Franklin D. Roosevelt Library; hereafter cited as F . D . R . Library. Throughout this volume certain documents are referred to as part of this Library. It should be noted that such documents were examined originally when they were in the White House Library.) * Memorandum from the President to the Secretary of the Treasury, May 3, 1940. (F.D.R. Library). * Letter from Bernard Baruch to Gen. Watson, Military Aide and Secretary to the President, May 22, 1940 (F.D.R. Library).

4

Combined R a w Materials B o a r d

storage of tin and rubber from the East Indies. On the second of these undertakings Mr. Stettinius suggested that purchase be made by working with Jesse Jones and the Reconstruction Finance Corporation. 4 These reports were followed immediately by two memoranda from Mr. Stettinius to the President, one dealing with copper supply and the other with crude rubber. 5 The latter indicated that Mr. Jones and Sir John Hay of the International Rubber Regulation Committee had agreed as to the purchase of crude rubber from Great Britain.· It is no strange coincidence that the influence of the Chief Executive should have made itself felt immediately. For he at once wrote Mr. Jones defining strategic and critical materials as those listed by the Army and N a v y Munitions Board of January 30, 1940, as well as those which might be added thereafter. At the same time he approved two letters which Mr. Jones had prepared for submission to Emil Schram of the Reconstruction Finance Corporation. The first of these letters requested that the Reconstruction Fnance Corporation create a corporation with an authorized capital of $5,000,000 with power to produce, acquire and carry critical and strategic materials. The second requested that the Reconstruction Finance Corporation establish a similar corporation with power to produce, acquire and carry rubber. 7 The upshot of this was the creation by the Reconstruction Finance Corporation on June 28, 1940, of two corporations, the Metals Reserve Company and the Rubber Reserve Company. These were the earliest administrative devices of the defense 4

Three reports for the President, J u n e 25, 1940, Stettinius to Watson, J u n e 27, 1940 ( F . D . R . Library). 1 Prior to the establishment of the National Defense Advisory Commission on M a y 29, 1940, only miscellaneous and uncoordinated efforts had been made to provide rubber for a national emergency. As early as 1930, General Dwight D. Eisenhower, then a M a j o r on duty with the War Department General Staff, had made a study of the rubber situation and had recommended the development of guayule plantations in the Western Hemisphere, but the W a r Department had taken no action to implement this proposal. The Department of Agriculture had maintained an experimental interest in the development of rubber-bearing plants adaptable for growth in this area, but no production program had materialized under its auspices—Defense Progress, No. 2, Aug. 16, 1940. See also Rubber Policies of the National Defense Advisory Commission and the Office of Production Management, May 1940 to December 194.1, Historical Reports on War Administration: War Production Board Special Study N o . 28. • T w o memoranda, Stettinius to the President, J u n e 28, 1940 ( F . D . R . Library). 7 Letter from the President to Jesse Jones. Attached are Jones's letters to Chairman Schram of the Reconstruction Finance Corporation, initialed by the President, June 28, 1940 ( F . D . R . Library).

Background and Early Stages

5

period designed specifically for dealing with the problem of acquiring raw materials. Some five months later, Mr. Jones drew the attention of the President to the fact that the Metals Reserve Company had contracted to buy tin, manganese ore, antimony, tungsten, and chrome, while the Rubber Reserve Company had agreed with the International Rubber Regulation Committee to buy 430,000 tons of raw rubber.® These companies had each been started with an original capital of $5,000,000. B y the first month of 1941, however, both the President and the Congress were informed that the commitments made by the various subsidiaries of the Reconstruction Finance Corporation had reached a total of $1,099,298,848. These had been made to provide for reserves of rubber, metals, and other strategic and critical materials and supplies, construction of plant and acquisition of equipment, and loans direct to manufacturers to carry out contracts with government for defense.' At the same time, Stettinius announced that the greatest aim for 1941 of the Industrial Materials Division of the National Defense Advisory Commission would be "to prevent bottlenecks in the supply of raw materials to defense industries." As head of the Division he indicated that the program for acquiring stock piles of strategic and critical raw materials sufficient to carry through the emergency had been moving ahead. However, a more realistic note was sounded by the Deputy Commissioner of the Division, William L. Batt, when he stated: Huge stocks of these materials are not lying around the world waiting to be purchased. . . Negotiations are difficult. Trade restrictions are manifold. Sometimes production and deliveries, because of shipping difficulties, are slow. We were able to make a couple of quick purchases of substantial supplies of antimony and chrome ore in Indo-China and the Mediterranean, but those were the exceptions rather than the rule. The stock pile program, calling for the accumulation of about ì years' reserves, is well along from the standpoint of contracting for deliveries, but even if we had title to it a ton of chrome ore in the mountains of Turkey would not help us produce a single pound of high-grade steel10 • Letter to the President from Jesse Jones, Dec. î , 1940 (F.D.R. Library). 'Mimeographed letter addressed to the President and Congress, Jan. 1 , 1941, signed by Jesse Jones (F.D.R. Library). This figure included not only the Metals Reserve Company and the Rubber Reserve Company but also the Defense Plant Corporation, Defense Supplies Corporation and Reconstruction Finance Corporation Defense Loans. lt Defense, Official Bulletin of the National Defense Advisory Commission, Jan. 7, 1941, Vol. II.

6

Combined R a w Materials Board

Simultaneously with the steps contemplated for the acquisition and importation of critical and strategic materials by this country, positive measures were taken to prevent the already serious leakage from the United States of items on the critical list. The world blockade, intensified by the fall of France, had cut South America completely away from her European markets. The United States became the natural supply base for all belligerents and neutrals. Furthermore, she was being used by Japan and Germany as an "entrepot" to by-pass British trade controls. No provision existed to prevent the transshipment of materials destined for neutral ports to Axis nations or sympathizers. The National Defense Advisory Commission, which had been compiling a list of statistics, came forth with the startling information that America was being inundated by foreign buyers and being drained of all her resources, many of which were critical items. 11 Japan in particular had increased her purchases of raw materials in this country until they exceeded seven times their normal amount. Therefore, on July 2, 1940, President Roosevelt created an Administrator of Export Control to administer Section 6 of the National Defense Act. This legislation provided for "the control of export from the United States of munitions, materials and machinery essential to national defense." 1 * It further placed under specific embargo thirty-seven named raw materials in addition to those already published by the Army-Navy Munitions Board. The proclamation also empowered the Secretary of State to establish within the Department of State the necessary machinery for the actual issuance of licenses under which these controlled items would be released for export. These operating powers were invested in the already existing Division of Controls which had been created under the Neutrality Act of November 4, 1939. The Division was now to act under specific directives from the Administrator of Export Control who would hold the right of final veto. 11 On the same day that the embargo became official, Harold Ickes 11 See Schedule II of memorandum attached to letter from the National Defense Advisory Commission to President Roosevelt, Nov. ιη, 1940 (F.D.R. Library). U H.R. 9850, Administration of Section 6 of "An Act to Expedite the Strengthening of National Defense," 76th Cong., 3d Sess., July a, 1940. " Ibid., p. 4. Further powers were granted to the AEC by the Requisition Act of Oct. 10, 1940, providing for the seizure of all foreign-owned or foreign-controlled materials in the United States for which licenses had not been granted. See Stat. 54, 1090, 76th Cong., 3d Sess., Oct. 10, 1940.

B a c k g r o u n d and E a r l y Stages

7

sent a letter to the President suggesting the need of a program to govern the sale to England and other countries of arms, munitions, and materials. This letter was transmitted by Roosevelt to Cordell Hull. 1 4 It was one of a series of similar ideas which began to emerge from various sources at this time and which were to reach their maturity in the Lend-Lease Act of March I i , 1941. I t is significant to note parallel developments in Britain. As early as April 1940 the British had established the United Kingdom Commercial Corporation. While its objective was at first confined to furthering trade with southeastern Europe, with the fall of the Balkans its activities took on a much broader scope. These included the purchase and import of a wide variety of commodities, raw materials being an important part of these, from the Mediterranean area and the Middle East as well as other regions. Subsidiary companies were formed for carrying out trade in a number of countries. The capital stock of the United Kingdom Commercial Corporation originally set at £500,000 was raised to £6,000,000. Furthermore, additional loans were authorized by the Treasury when required by new tranactions. While the United Kingdom Commercial Corporation was created as a public corporation with its own board of directors in charge, broad lines of policy upon which it operated were laid down by the Government Departments—the Foreign Office, the Treasury, the Board of Trade, and the Ministry of Economic Warfare in London, and the Minister of State and the Middle East Supply Center in Cairo. Such corporations, both in Britain and the United States, were but a small part of emerging organization which was to be shaped to meet the requirements of war. The need for the establishment of a number of central directing agencies naturally first made itself felt in Great Britain. The creation of vast production programs and their successful operation—the procurement, distribution, and control of raw materials, of labor, of transport, of industry itself— called for a British war administration quite different from that of peacetime. B y the beginning of 1941 the machinery of wartime administration had been pretty well set in Britain. Much of the impetus for this had come with the assumption of power by the Churchill Government 14 Letter of Ickes attached to memorandum from the President to the Secretary of State, July 1, 1940 (F.D.R. Library).

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Combined R a w Materials Board

in M a y 1940. T h e W a r C a b i n e t itself had, of course, been in operation for some time. T h e Defense C o m m i t t e e of the C a b i n e t , dealing with war production as well as military operations, had emerged, and its jurisdiction had been extended to include questions of supply. Similarly, on the home front, the Supreme Coordinating C o m m i t t e e for H o m e Affairs w a s in full swing. T h e s e two important committees were at the very apex, and their concern was largely with coordination. T h e chief effective central directing and operating Ministries were those of the A d m i r a l t y and the Ministries of Supply and A i r c r a f t P r o d u c t i o n , and those of W a r T r a n s p o r t , Food, L a b o r , F u e l and P o w e r , Agriculture, and the B o a r d of Trade. 1 6 I m p o r t s of the various departments had been regulated during 1940 as far as necessary through an interdepartmental committee under the parliamentary secretary of the M i n i s t r y of Shipping. T h e increasing significance of these imports, however, led to the formation in J a n u a r y 1941 of the N o r t h American Supply C o m mittee composed of the Ministers of S u p p l y and A i r c r a f t Production and the First L o r d of the A d m i r a l t y . " A t the same time, significantly enough, the various British supply missions in the U n i t e d S t a t e s were pulled together in Washington through the formation of the British S u p p l y Council in N o r t h A m e r i c a . G r e a t Britain had entered the war, it must be recalled, in September 1939, and by the end of 1940 was deeply immersed in the conflict. In contrast to the British experience, a distinctive pattern o f war administration did not emerge in the United States until a m u c h later time. I t is true that the Office of E m e r g e n c y M a n a g e m e n t w a s established in the E x e c u t i v e Office of the President as early as M a y 1940. 17 W i t h the development of the N a t i o n a l Defense P r o T h e M i n i s t r y of P r o d u c t i o n which was to provide central direction for all of these M i n i s tries was not created until F e b r u a r y 1942. " S u p p l i e s of essential raw materials, a f t e r G r e a t Britain w e n t to war, were monopolized b y the M i n i s t r y of S u p p l y and in a few instances b y the M i n i s t r y of A i r c r a f t P r o d u c t i o n . T h o s e controlled by the M i n i s t r y of S u p p l y included chrome ore, cotton, dyestuffs, magnesite, w o l f r a m , fertilizer, flax, iron and steel, iron and manganese ores, leather and tanning materials, molasses and industrial alcohol, nonferrous metals, paper, silk and r a y o n , sulphur and p y r i t e s , timber and wool. T h e M i n i s t r y of A i r c r a f t Production controlled aluminum and bauxite. See The British Commonwealth at h'ar, ed. W i l l i a m Y . Elliott and H . D u n c a n - H a l l , ( N e w Y o r k , 1943), especially C h a p . I I I . ,5

1 7 T h e Office for E m e r g e n c y M a n a g e m e n t w a s established in the E x e c u t i v e Office o f the President b y administrative order of M a y 2J, 1940, in accordance w i t h section I (6) of E x e c u t i v e Order 8248, which provided that there shall be, " i n the e v e n t o f a national e m e r g e n c y , or threat of national e m e r g e n c y , such office for emergency m a n a g e m e n t as the President shall d e t e r m i n e . " T h e chief function of the Office w a s to maintain liaison between the P r e s i d e n t

B a c k g r o u n d and E a r l y S t a g e s

9

gram in the United States, a number of defense agencies were "established in or coordinated through" the Office of Emergency Management. These included by the middle of 194I such emergency agencies as the Office of Production Management, the Office of Civilian Defense, Defense Communications Board, Office of Facts and Figures, Office of Defense Health and Welfare Services, Division of Defense Housing Coordination, Office of the Coordinator of Inter-American Affairs, Office of Lend-Lease Administration, National War Labor Board, Office of Price Administration, and Office of Defense Transportation. T h e Office of Production Management had been set up on January 7> i 9 4 i j a s the directing and coordinating agency covering the broad field of production. 18 As part of its duties it was ordered to "plan and take all lawful steps necessary to assure the provision of an adequate supply of raw materials essential to the production of finished products needed for defense." In the period which followed its establishment, the Office of Production Management had developed administrative organization as well as techniques of control for dealing with the manifold problems arising in the raw materials field. Nevertheless, it must be noted that its successor, the War Production Board, which was to assume the central role in program determination as well as in the control of raw materials, and the Board of Economic Warfare, which was to be given responsibility for procurement and development in foreign countries, did not emerge fully in these capacities until after the United States officially entered the war. From the point of view of the growth of combined machinery, however, one development of the defense era which foreshadowed the future is worth special mention. As part of the National Defense Program there had been set up a Permanent Joint Board on Defense — U n i t e d States and Canada, as well as a number of distinctive joint committees between the two countries. One of these committees was the Material Coordinating Committee—United States and Canada, whose creation was announced on M a y 14, 1941, by William S. and the national defense agencies for the purpose of securing maximum utilization and coordination of agencies and facilities in meeting the emergency. In fact, the O E M was designed to relieve the President as far as directing such temporary agencies was concerned. See William H. Reynolds, " T h e Office for Emergency Management," Public Administration Review, I (1941), 131-38. 18 Executive Order 8629.

IO

Combined R a w Materials Board

Knudsen, Director General, Office of Production Management. It is significant that the American members of this body, William L . B a t t and Howard Sykes, were later to become also the American Member and Executive Secretary, respectively, of the Combined R a w Materials Board. As the United States approached closer to the brink of war in the late summer of 1 9 4 1 , serious concern over the importation of raw materials increased. On August 16, 1 9 4 1 , the Office of Production Management issued a report indicating the tonnages threatened in far eastern a r e a s . 1 ' Prominent among those raw materials from which the United States might be cut off were tin, chromite, nickel, tungsten, manganese, manila fiber, pig bristles, mica, rubber, graphite, and silk. These were raw materials of "greatest significance" in the defense era. It was noted that total tonnage threatened at once by Japanese action was 2,913,050 tons. In other specific zones—the Iberian peninsula, the Mediterranean area, and West, South, and E a s t Africa—an additional 1,888,100 tons were threatened. These included such needed raw materials as cork, red squill, manganese, asbestos, cadmium, graphite, chromite, and mica. 20 UNITED STATES ENTERS THE

WAR

On December 1 7 , 1 9 4 I , soon after United States entry into the war, the President wrote to William L . B a t t of the Office of Production Management directing him to take the initiative in organizing an international materials committee. This subsequently was identified as the Joint Materials Board and a short time later emerged as the Combined R a w Materials Board. 2 1 D r a f t s of the letter to B a t t had been prepared for the President by Harry Hopkins. In a memorandum for the President of the same date, Hopkins had stated that the matter of coming to an understanding with the British and possibly the Dutch relative to the allocation of various raw materials under United States control had come up a few days previous at a meeting of the Supply Prior19

Tonnages Threatened in Far Eastern Areas, Import Shipping Section, Office of Production Management, Aug. I J , 1941. »Ibid. 11 Memorandum, "The Problem of World Raw Material Control and the Related Problems of Import and Export Shipping Control and Stimulation of Foreign Production," (Bureau of the Budget), December 1941.

Background and Early Stages

II

i ties and Allocations Board and e v e r y b o d y had agreed that a conference should be h e l d . " In a similar letter written to M i l o Perkins, the C h i e f E x e c u t i v e stressed the vital importance of this venture. " I am anxious," the President wrote, that we get into a conference at an early date with the British, and possibly the Dutch, relative to the raw materials of the world which are either under our control or are under the control of our friends. It is essential that we make the best and most effective joint use of these materials. . . . I have asked Lord Beaverbrook, whose Ministry is responsible for this in England, to designate appropriate representatives to discuss this matter with our Government. . . T h e directive given to this committee was generally to represent the United States in an international group, " t o explore a t once how the raw materials of the world can best be brought to bear in the defeat o f H i t l e r . " W h i l e the President indicated that he did not wish the conference to consider munitions of war and other m a n u factured products, he desired that it "should also deal with such critical items as steel." 2 * T h e United States membership of the conference included representatives of the Office of Production M a n a g e m e n t , A r m y , N a v y , Office of Lend-Lease Administration, Supply Priorities and Allocations Board, Reconstruction Finance Corporation, and B o a r d of Economic Warfare. " W i t h the consent of M r . H o p k i n s , a member of the M a r i t i m e Commission was added to this g r o u p . " 2 ' A f t e r a preliminary meeting with Lord Beaverbrook to clear the ground for this j o i n t group, Lord Beaverbrook appointed Sir C l i v e Baillieau to act as permanent representative for the British in W a s h i n g t o n . Additional representatives were to sit with Sir C l i v e , who soon became also head of the newly created British R a w Materials Mission. From the British point of view, the creation of combined board structure was a logical extension of activities being carried o u t a t this time by the British Supply Council in N o r t h A m e r i c a . In the early part of the war when British purchase in the U n i t e d S t a t e s had been comparatively unimportant, British supply organization in Memorandum to the President from Harry Hopkins, Dec. 17, 1941 (F.D.R. Library). " L e t t e r from the President to Milo Perkins, Dec. 17, 1941. M Ibid. " Letter from W. L. Batt to the President, Jan. 8, 1942. β

11

Combined R a w Materials Board

this c o u n t r y had been a rather small-scale affair. In fact, until A u g u s t 1940 the headquarters of the British Purchasing Commission and the British Air Commission remained in N e w Y o r k . H o w e v e r , with the realization of the v a s t programs which would need to be undertaken and with the implications of Lend-Lease becoming clearer, the need for more adequate organization became apparent. T h e a b o v e Commissions were moved to Washington in September 1940. N e w missions — m i l i t a r y , food, shipping—were added. B y J a n u a r y 1941, the British S u p p l y Council in N o r t h America emerged as the over-all or coordinating body of British supply and procurem e n t activities in the United States. A f t e r the entry of the United S t a t e s into the war, British supply organization was expanded to provide for the British R a w M a t e r i a l s Mission as well as others. 28 R e p o r t i n g b a c k to the President on January 8, 1942, M r . B a t t could state t h a t substantial progress had been made since the President had requested him to assume leadership in this undertaking three weeks earlier: . . . Work has already been begun with British and Canadian representatives, in conjunction with American representatives, through a Joint Secretariat. 27 Some of the most important materials, particularly those that have been lost or endangered by Japanese action, have already been subjected to a preliminary review and recommendations are being formulated for the consideration of the conference.58 T h e broad outlines of the Anglo-American instrumentality which was being formed were taking shape. M r . B a t t continued his letter to the President by s t a t i n g : In most cases, the facts assembled by the Joint Secretariat will clearly indicate the action required. Wherever this is not the case, the alternatives will be stated for final recommendation by the Joint Conference, and decision by S P A B or other appropriate agency for the United States Government, the Ministry of Supply for the British Government, and the appropriate agency of any other governments concerned. It m u s t be noted that from the beginning this Joint Conference See "History of the British Supply Organization in the United States," mimeograph, British Supply Council in North America, Jan. i , 1943. " A t this early stage, and subsequently when the Combined Raw Materials board was created, Canada was not given direct representation. " I t has seemed natural to us to use the already existing Canadian R a w Materials Coordinating Committee as a means of securing Canadian representation on this conference," Mr. Batt wrote in this letter. Thus from the very inception, Mr. Batt as a member of the Canadian Raw Materials Coordinating Committee had "spoken" for Canada as far as the Combined Raw Materials Board was concerned. " Letter from W . L . Batt to the President, Jan. 8, 1942.

M

B a c k g r o u n d and E a r l y S t a g e s

13

was conceived of as a recommending body and not as an agency with executive power. Decision and implementation were to rest with the appropriate national agencies. This arrangement was clearly indicated in the following specific problems which were already under consideration: In the case of tin, as an example, one conclusion is already indicated from the studies the J o i n t Secretariat has made, namely that the c a p a c i t y of the T e x a s C i t y smelter should immediately be increased to a minimum of 50,000 tons a year. T h i s is needed to take care of the redistribution of ores which will be necessitated b y the loss of E a s t Indian smelting and ore resources. If this recommendation is approved b y the Conference, the matter will be taken u p directly with the Reconstruction F i n a n c e C o r poration. A somewhat different instance occurs in the case of hemp and sisal. H e r e it appears that it m a y be necessary for us to supply the United K i n g dom with quantities of hemp during the next two years, and receive from them comparable amounts of sisal, in order that the s u p p l y positions m a y be balanced over the next three years. I f this recommendation is accepted b y the Conference, S P A B will be requested to m a k e the necessary policy decision for the United States G o v e r n m e n t , and the M i n i s t r y of S u p p l y for the British G o v e r n m e n t . 2 9

In this same communication Mr. Batt informed the President that he had discussed the joint group's relation to the Supply Priorities and Allocations Board and the Board of Economic Warfare with the Vice President. The Vice President, he believed, agreed that the relationship described above was the "best practicable one between the agencies working in the raw materials field." Furthermore, Mr. Batt assured the Chief Executive that the group in all of its recommendations would "think of the world's available raw materials as a joint pool, to be allocated to the United Nations according to where they can best be used for the joint effort." While the President was kept in close touch with developments, it is evident that Harry Hopkins possessed direct responsibility for guiding the undertaking. For on the same date that Batt dispatched the above letter to the President, he also wrote Hopkins as follows: " I f the President and you approve what is proposed, I think it would be most useful if he would give it a build-up at an early Press Conference." 30 "Hid. 10 Letter from W. L. Batt to Harry Hopkins, Jan. 8, 194Î.

14

Combined R a w Materials Board

N o adequate records are available, as far as can be ascertained, covering the various meetings and discussions that both preceded and followed the B a t t communication which was identified in some quarters as the B a t t Committee letter. Assuredly this document left untouched some of the most difficult American problems in the field of international economic operations. While this plan for Anglo-American collaboration in the field of raw materials as well as a similar emerging arrangement in shipping seemed to present an opportune occasion for raising the whole question of coordinating the various United States governmental agencies operating in the foreign field, little headway was made on this matter. A t one of the meetings of the " B a t t Committee," the Vice President had discussed the entire raw materials problem with M r . Hopkins, stating that he felt that the plan should be discussed with the Budget Bureau before any formal arrangement was worked out. However, Hopkins had passed over this suggestion, stating that no organizational problems were involved.® 1 On J a n u a r y 1 5 , 1942, the Vice President wrote the President, indicating that M r . B a t t had sent him a copy of the letter of J a n uary 8. " T h e r e is need," M r . Wallace stated emphatically, for a clarification of functions in the foreign field and before any final decisions are made, I should like a chance to discuss the matter with you. We shall be having further discussions on this with Donald Nelson early next week and also with Harold Smith. The purpose of this letter is to indicate that I should like to make a proposal to you on this subject sometime within the next week or ten days. Copies of this communication were sent to Messrs. Hopkins, Smith, and B a t t . What actually resulted at the time from the Vice President's proposal the records do not fully reveal. Suffice it to say that the clarification of authority and function in the whole field of United States international economic operations at this stage in the war effort did not take place. As far as the case of raw materials was concerned, no Executive Order was issued either preceding or following the public announcement of the creation of the Combined R a w Materials Board made on J a n u a r y 26, 1942. Such an order, if it had been issued, might have more definitely related the Combined " Memorandum, Batt Committee Letter, Jan. 12, 1942 (Bureau of the Budget).

Background and E a r l y Stages

15

R a w Materials Board with the newly established War Production Board and the Board of Economic Warfare, especially with regard to the allocation and acquisition of raw materials." It might have gone further in clarifying the functions of the Board of Economic Warfare in foreign procurement and development as related to the Office of Lend-Lease Administration and the Reconstruction Finance Corporation. It is important to note that the Combined R a w Materials Board emerged in a period when confusion was the distinctive characteristic of the American scene. In government as in industry, the task of organizing for total war was one which hardly had been begun. Appropriate organization for administering controls and programs had to be stepped up rapidly. There was little time for thinking through an entire system for the economic conduct of the war. Action was imperative. Immersed in the task of unleashing the productive capacity of America and of putting their own house in order, leading administrators, who frequently were new in the public service, devoted their time and energy to the major job at hand—that of increasing production. Thus the Combined Raw Materials Board was born in an atmosphere of uncertainty—largely as a move dictated by the necessities of war. It is significant, for example, that ten days before this event, the War Production Board had emerged as a result of a thorough reshuffling of production agencies. B y way of apparent contrast, since the War Production Board was later subject to a constant series of "reorganizations," efforts to clarify the mandate of the Board of Economic Warfare at this time were singularly unsuccessful." Officially, the Combined Raw Materials Board, together with the Combined Shipping Adjustment Board and the Munitions Assignments Board, was launched through an announcement by the President and the Prime Minister on January 26, 1942. The text of the White House release on the Combined R a w Materials Board was as follows: a

T h e War Production Board was established within the Office for Emergency Management by Executive Order No. 9024, January 16, 1942. It succeeded the Supply Priorities and Allocations Board and was given the function of supervising the Office of Production Management. " L e t t e r to the President from Henry Wallace, Feb. 26, 1942; cf. memorandum to the President from Harold Smith, Feb. 18, 1943 (Bureau of the Budget).

ι6

Combined Raw Materials Board

A planned and expeditious utilization of the raw material resources of the United Nations is necessary in the prosecution of the war. T o obtain such a utilization of our raw material resources in the most efficient and speediest possible manner, we hereby create the Combined Raw Materials Board. This Board will: (a) Be composed of a representative of the British Government and a representative of the United States Government. The British member will represent and act under the instruction of the Minister of Supply. The Board shall have power to appoint the staff necessary to carry out its responsibilities. (b) Plan the best and speediest development, expansion, and use of the raw materia] resources, under the jurisdiction or control of the two Governments, and make the recommendations necessary to execute such plans. Such recommendations shall be carried out by all parts of the respective Governments. (c) In collaboration with other of the United Nations work toward the best utilization of their raw material resources, and, in collaboration with the interested nation or nations, formulate plans and recommendations for the development, expansion, purchase, or other effective use of their raw materials. I t was evident t h a t the general notion behind the creation of the Combined R a w M a t e r i a l s B o a r d sprang from the realization t h a t it was imperative t h a t the U n i t e d S t a t e s and the U n i t e d K i n g d o m pursue a j o i n t a t t a c k upon their m u t u a l supply problems. B e y o n d this, h o w e v e r , there was little clarity at this stage concerning precise machinery and procedures to be utilized in a t t a i n i n g m a j o r objectives. G i v e n its broad m a n d a t e , the work of the B o a r d w o u l d i n e v i t a b l y involve numerous relationships with various national agencies. Upon this score, the tie-in with the W a r P r o d u c t i o n B o a r d w a s of prime significance. In fact, a d r a f t E x e c u t i v e Order h a d been prepared by the W P B delegating to the representative of the United States G o v e r n m e n t on the C R M B certain functions a n d duties. T h i s d r a f t order provided t h a t the representative of the U n i t e d S t a t e s G o v e r n m e n t would act " u n d e r the instruction of the C h a i r m a n of the W a r Production B o a r d . " 3 4 A t the request of M r . Nelson a copy of the proposed E x e c u t i v e Order was sent to the Director of the B u r e a u of the B u d g e t b y M r . B a t t on J a n u a r y 30. T h i s Order, which was m e a n t to i m p l e m e n t the agreement between the President and the P r i m e M i n i s t e r , r a n as follows: M

C R M B file (Bureau of the Budget).

Background and Early Stages EXECUTIVE

17 ORDER

DELEGATING TO THE R E P R E S E N T A T I V E OF THE UNITED STATES GOVERNMENT ON THE COMBINED RAW

MATERIALS

BOARD

CERTAIN

FUNCTIONS

AND DUTIES

B y virtue of the authority vested in me b y the Constitution and s t a t u t e s of the United States and in order to implement the agreement between the President of the United States and the Prime Minister of G r e a t Britain creating the Combined R a w Materials B o a r d and for the purpose of ensuring an adequate supply of raw materials and the fullest possible utilization thereof for the successful prosecution of the war, it is hereby ordered as follows: ι . T h e representative of the United States G o v e r n m e n t on the C o m b i n e d R a w Materials Board, acting under the instruction of the C h a i r m a n o f the W a r Production Board and in conjunction with the representative o f the British G o v e r n m e n t , shall: (a) Plan the best and speediest development, expansion, and use of the raw material resources, under the jurisdiction or control of the two G o v e r n ments, and make the recommendations necessary to execute such plans. (b) In collaboration with others of the United N a t i o n s work toward the best utilization of their raw material resources, and, in collaboration w i t h the interested nation or nations, formulate plans and recommendations for the development, expansion, purchase, or other effective use of their raw materials. (c) O b t a i n from the United States and British G o v e r n m e n t and from the G o v e r n m e n t s of the other United N a t i o n s information relating to the total raw material production and requirements of each g o v e r n m e n t , together with such other information as m a y be necessary to carry out this Order. a. T h e representative of the United States G o v e r n m e n t on the C o m b i n e d R a w Materials Board, acting under the instruction of the C h a i r m a n o f the W a r Production B o a r d : (a) Shall make such recommendations to the several Federal d e p a r t ments, establishments and agencies as he deems necessary to carry out the responsibilities placed on him by this Order, and such recommendations shall be complied with. (b) M a y exercise the power, authority and discretion conferred upon him by this Order through such departments, establishments or agencies and in such manner as he m a y determine. (c) M a y , within the limit of such funds as m a y be allocated or appropriated for the purpose, employ necessary personnel and m a k e provision for necessary supplies, facilities and services. 3. A n y other E x e c u t i v e Orders the provisions of which are inconsistent w i t h the provisions of this Order are amended accordingly. T h e reactions to this proposed E x e c u t i v e O r d e r are

extremely

ι8

Combined R a w Materials B o a r d

significant. While the Bureau of the Budget appeared to take no hard and fast position, it was anxious to have the main agencies involved reach an understanding that would be put into definite form. At a conference arranged by the Bureau the proposed Order was attacked in no uncertain terms." Milo Perkins, who was present, was much concerned about the relationship of the Order to the Board of Economic Warfare and expressed the view that it would seriously impinge upon the operations of that agency. While Mr. Wallace was disturbed by the potential operating conflict, he was much more perturbed by the fact that total authority with respect to world supply of raw materials was being turned over to one British and one American representative. " T h i s , " he felt, "would have serious repercussions in terms of the total world situation, and might also seriously affect our relations with the Russians, Chinese, etc." In fact, Wallace "was ready to call Nelson and simply tell him he could not go along with the Batt Order." So agitated was the Vice President by the possible impingement of the proposed order upon American foreign relations that he immediately summoned Sumner Welles, at that time Under Secretary of State, by telephone. With Welles present, he again stated his position, adding that the Order looked too much like "AngloAmerican snobbishness."'· Upon reading the Order, Welles stated that he concurred with Wallace's views. He was concerned, he indicated, with the impact not only on domestic public relations but also upon South America and other parts of the world. Furthermore, this Order brought out a "basic latent issue" which should be met immediately. It appeared, nevertheless, that the Combined R a w Materials Board would have to be recognized, "even though its authorities and functions might be considerably circumscribed." It was Welles's suggestion that the Board should not act without check by the Board of Economic Warfare and the State Department. On the mechanics of raw materials operations, such as foreign procurement, stimulation of foreign production, and so on, there was consensus that these should be vested in B E W acting upon needs and requirements determined by the W P B . " Memorandum, "Conference on Materials Executive Order with Vice President Wallace and Under Secretary of State Sumner Welles," Feb. 4, 1942 (Bureau of the Budget). » Ibid.

Background and Early Stages

19

The proposed Executive Order was never issued. Donald Nelson, Chairman of the War Production Board, did not persist in pressing for it; nor, for that matter, did its critics follow through in presenting an alternative. Meanwhile, however, Nelson had discussed the matter with the President who had agreed that the American member of the Combined Raw Materials Board in all his operations would serve under instruction of the War Production Chairman." At the same time Nelson had been concerned with the Combined Raw Materials Board's relations with the Board of Economic Warfare. He was agreeable to utilizing fully the facilities of the Board of Economic Warfare in the fields of foreign procurement and development and he concurred with a Bureau of the Budget representative that " a directive be worked out delegating certain functions and authorities to the Board of Economic Warfare in this field."*8 But once again, a Directive was not issued. Mr. Batt "had talked with Harry Hopkins about this whole subject and Hopkins had advised that no Order (or Directive) was necessary." 1 ' Little advance planning preceded the early formative stages of the Combined Raw Materials Board. 40 The opinion prevailed that a large share of its work would be concerned with stimulation of foreign production of strategic materials. The Board would not only have to make broad decisions with regard to pooling more facilities and financing of the several nations in order to obtain maximum production, but it also would have to follow through to see that such decisions were expeditiously executed. Because of the many interests involved it seemed desirable to carefully clear the proposed scope of activities in this field with such agencies as the Department of State and the Board of Economic Warfare. The difficulties encountered in setting up and clarifying the role w

Memorandum to War Production Board Staff from B. L. Gladieux, "Conference with Donald Nelson," Jan. 30, 1941.

-Hid.

" Memorandum of B. L. Gladieux, Feb. 17, 1942 (Bureau of the Budget). In discussion with Bureau of the Budget representatives on January 3 1 , E. Rhetts, Executive Assistant to Mr. Batt, indicated that no definite plans had been made for this new Combined Board. It was his concept that the Board would require very limited staff. Probably the Board would have a small British staff concerned with British requirements and another staff concerned with American requirements in addition to a staff for the over-all administering of the entire information as a prerequisite to Board action. He expected that at least a part of this staff could be the same as the staff which served the new Requirements Committee of the War Production Board under Mr. Batt. In any event the work of the two staffs would have to be closely coordinated.

40

αο

Combined R a w M a t e r i a l s B o a r d

of the Washington board were more than matched by the obstacles met in establishing suitable combined organization in I^ondon. Action on the other side of the Atlantic was slow in getting started and eventually led to results which were largely negative. From the very beginning it was contemplated that a separate R a w Materials Board would be created in London as a counterpart of the organization in Washington. While Lord Beaverbrook, Minister of Supply in the British Government, had designated Sir Clive Baillieau to carry on in Washington, he himself attempted to initiate action in London. On February 13, 1942, Ambassador Winant sent a cable to Hopkins and Stettinius for Batt and Harriman stating that Beaverbrook "was organizing the British end." 4 1 Ten days later, on February 23, Mr. Harriman, who had meanwhile gone to London, wrote back to Mr. Stettinius concerning the "London Raw Materials Board," as follows: Lord Beaverbrook asked me to sit in with him when he was acting as Batt's opposite number on raw materials allocation and I agreed to do so. Work is going on at the Secretariat level and information is being collected and forwarded to Washington. Because of the recent upheavals in the government, however, the organization at this end has not yet been formalized. I will advise you when the machinery is definitely established.42 On February 27, Mr. Harriman cabled direct to Mr. Batt to the effect that the British organization had not yet been formalized because of recent government changes. He stated that he had held several discussions with Lord Beaverbrook, but that in the meantime Lord Beaverbrook had been succeeded by Oliver Lyttleton, who had become head of the newly organized Ministry of Production. 43 The new Ministry was to assume control of allocation of raw materials, thus reducing the power of the Ministry of Supply. Whether by oversight or design, the fact remained that no provision for a separate R a w Materials Board was made in London; nor was one created subsequently. Informal contacts with the British were to be maintained in London through Mr. Harriman's office (Lend-Lease Coordinator), but no organizational setup was «> C R M B central files. 43 C R M B central files. Included in memorandum, "London Raw Materials Board," to W. L. Batt, Director of Materials, W P B , from Thomas B. McCabe, Deputy Administrator, Office of Lend-Lease Administration (undated). «» C R M B central files.

Background and E a r l y Stages

21

provided. When M r . Reed succeeded M r . Harriman in the fall of 1943, he, likewise, was instructed to represent the Combined R a w Materials Board (Washington) in London. Thus the venture in collaboration inaugurated by agreement between the President and the Prime Minister was begun under conditions in which neither the American side nor the British had put its own house in order. Both M r . B a t t and the British attempted to achieve some clarification with regard to this new undertaking. B u t these efforts were in the main fragmentary and unsuccessful. 44 From the formative period on, and especially during the Combined R a w Materials Board's early stages, its conduct was to be largely of an experimental nature. A pattern of operations and relationships was to be worked out based in the main upon individual cases. Attention was to be concentrated not upon over-all problems but rather upon spot issues. T h i s early experience, in fact, was to prove a major factor in determining administrative and procedural characteristics of the agency throughout its history. T H E FIRST Y E A R

T h e Combined R a w Materials Board, established on January 26, 1942, reached full stature during the first year of its existence. Its organizational setup, unlike that of other combined boards which are to discussed subsequently, altered very little in the period which followed. T h e Board itself was composed of two members. T h e one, Sir Clive Baillieau, represented the United Kingdom, and the other, M r . William B a t t , the United States. T h e former represented and acted under instructions of the British Ministry of P r o d u c t i o n . " " S e e Batt's cablegram to Harriman, Feb. 18, 194a. Cf. " C o p y of Letter Addressed to M r . Averill Harriman," as well as "Memorandum" both attached to letter to W . L . B a t t from Sir Clive Baillieau, March 11, 1942 ( C R M B central files). It is significant that in the British documents the following statement appears: " W e understand it will be for the Board to make final decisions, subject only to appeal to the President and the Prime Minister on allocation of raw materials available for United States and British Empire and to make recommendations as to expansion of existing resources or development of new resources." While the first part of this statement is not entirely clear, it is important to note that it is not in line with Mr. B a t t ' s conception as stated in his cablegram: "Joint Board will weigh all factors of world picture as presented including shipping and fabricating facilities in attempt to find most effective use of raw materials available to both nations and will then issue its recommendations to the two governments through their respective representatives on the Board." N o attempt was made to reconcile such differences. 4 4 T h e original mandate of Jan. 26, 1942, stated that the British member would be responsible to the Ministry of Supply. In February 1942 the Ministry of Production was created. Its broad powers included the planning and programming of raw materials. Thus, while

11

Combined Raw Materials Board

The American member, on the other hand, possessed no similar responsibility, explicitly stated, although it was understood that he acted under instruction of the Chairman of the War Production Board." Two Executive Secretaries, Mr. Sykes for the United States and his opposite number, Mr. Archer, were in active charge of the business of the Combined Raw Materials Board. In actual fact, the American Executive Secretary (who was deputy to the American member) carried on virtually as the Director. There was a deputy for each of the Executive Secretaries. Staff coordinators (of requirements) were provided for. These coordinators acted as heads respectively of the United States and United Kingdom staffs. In actual practice, except for two or three individuals, the Combined Raw Materials Board possessed no distinct staff of its own. On the American side there were approximately seventeen commodity experts who gave part of their time to the Combined Raw Materials Board studies. These individuals were on the payroll of the War Production Board and for the most part rendered their services to that agency. Much of their review and analysis work for the War Production Board was similar to that undertaken for the Combined Raw Materials Board. On the British side were approximately the same number of staff members, largely personnel working for the British Raw Materials Mission in Washington. The British arrangement was similar to the American. The assignments of the various commodity men on both sides policy control was placed in this new Ministry, the operational side of raw materials remained in the Ministry of Supply. Theoretically this might have worked out; but in actual practice there resulted hazy and conflicting areas of authority which remained unresolved and were a continuous cause of friction. This situation at home reflected itself in Washington in two ways. First of all, C R M B was still somewhat divided in ite allegiance to London between the Ministry of Production and the Ministry of Supply, having originally stemmed from the latter. Secondly, after the creation of a distinct Raw Materials Mission in Washington in January 1942, C R M B had a strong tie in Washington whereby to break somewhat the direct impact upon it of the Ministry of Production. Its British member was supposed to represent and act under instructions of the Ministry of Production in London but the fact remained that under the original mandate the British member was to represent and act under instruction of the Ministry of Supply. Memorandum, "British Views on C P R B , " to Sydney Stein, Jr., from S. McKee Rosen, March 8, 1943. " S i r Clive Baillieau, who was the British member from its inception, resigned from the Board in September 1943. Howard Sykes, the American Executive Secretary, left the Board the previous month. F. M. Eaton, WPB, succeeded Sykes, and Sir Charles Hambro was appointed British member on Dec. 1, 1943.

Background and Early Stages

23

were not always of a regular nature. In some instances a particular individual (or individuals) was assigned a definite raw material and would work continously upon it. Inasmuch as there were many more raw materials than commodity men to investigate them, a general assignment on several materials was carried by most of these experts. In any given instance, the extensiveness of the analysis required depended to a large degree upon the urgency of the case, the availability of experts, as well as upon the extent of the Board's (or other peoples') interest in it. The nature of reports prepared on different raw materials varied with circumstances. As a rule, the work was pursued as a combined effort with both United States and United Kingdom staff participating in the given venture. Not only did the commodity men agree upon joint reports but they also prepared tentative recommendations for further consideration. While they were in constant contact with representatives of the various interested national agencies, they worked very closely in all of their activities with the Executive Officers of the Board. In many respects the commodity men served in the dual capacity of analysts and negotiators. The main burden of the Board's work rested with them. 4 · T H E ADVISORY OPERATING COMMITTEE

Regular machinery for the joint consideration of problems was provided through the Advisory Operating Committee which met as a rule weekly. The following agencies were represented regularly on this Committee: United States State Department War Production Board Department of Commerce Board of Economic Warfare Office of Lend-Lease Administration4·

United Kingdom Foreign Office Ministry of Production Ministry of Supply Ministry of Economic Warfare (through Officers of the British Raw Materials Mission and the British Embassy)

The same representatives of the various national agencies attended the meetings of the Committee regularly, but frequently additional representatives attended when special circumstances arose. In fact, from an early handful of eight or ten, the meetings of the Committee 41 41

Conference with George Archer, U. K. Executive Secretary, C R M B , Feb. 13, 1943. Representation from the Office of Lend-Lease Administration was added in November 1942.

Combined Raw Materials Board had been expanded to include twenty-five or thirty participants. The Committee itself was under the chairmanship of the American Executive Secretary and had a regular secretary of its own. An agenda was prepared for each meeting. The Commodity Reports as well as preliminary reports at various stages formed the focal point for much of the discussion. In view of the nature of the problems under consideration, the discussion was apt to range over a wide field. Frequently matters were referred to subcommittees for consideration and often participating agencies on both sides got together without recourse to formal committee sessions. The Advisory Operating Committee was presumed to perform a number of functions. It considered proposed recommendations before they were submitted to the Board for formal approval. I t kept a watch on the implementation of the Board's recommendations by asking for reports from the various participating agencies. It also provided a mechanism for clearance of a great variety of operational matters. In this way many of the day-to-day problems were cleared up without recourse to official action of the Board. RELATIONSHIPS AND LIAISONS

The Combined Raw Materials Board depended entirely upon the domestic authorities for the carrying through of its recommendations. Major liaisons were thus facilitated through the Advisory Operating Committee. Further than this, coordination with the British Dominions was achieved through the Empire Clearing House in London, on which the Dominions were represented, as well as through the Empire Advisory Committee in Washington, which was made up of the heads of the various Dominion supply organizations in Washington. A special arrangement was made for Canada. The Canadian viewpoint was presented by the American member of the Combined Raw Materials Board, who held a similar position on the United States-Canadian Materials Coordinating Committee. Apparently this arrangement whereby the United States, and not the United Kingdom, represented and acted for Canada proved satisfactory to the Canadians. Special liaisons were set up occasionally. For example, a definite channel had been established for the exchange of information on conservation. A United States representative attached to the LendLease Coordinator's organization in London, with responsibility for

B a c k g r o u n d and E a r l y Stages

25

comparing American and British practices from the point of view of saving critical materials, kept in contact with the various British departments and acted as a two-way medium for clearing information. A British counterpart connected with the Board in Washington maintained close contact with the War Production Board and other United States agencies for similar purposes. 4 ' Informal as well as formal contacts with the other Combined Boards were carried on. The Executive Secretaries of the Combined Raw Materials Board met regularly for informal discussions with the executive officers of the Combined Chiefs of Staff. 4 8 In the case of the Combined Food Board, a Joint Fertilizer Committee had been established in formal fashion. Constant dealings with the shipping authorities had led to the formation of a regular committee to consider shipping as it impinged on supply problems. Some provision, although far from adequate, had been made for tying together the work of the Combined Production and Resources Board and the Combined Raw Materials Board. The interdependence of these two Boards manifested itself constantly, inasmuch as no line could be drawn between raw materials and production problems as such, their closeness, however, varied from time to time. In the main, their associations were informal. Occasionally, as in the cases of steel, copper, and aluminum, combined committees had been instigated which had facilitated interchange between these Boards. But generally speaking, satisfactory arrangements of a more effective nature were not worked out until I944· 4 * As far as contacts with other United Nations, as well as with neutrals, were concerned, the established machinery of the Department of State and the Board of Economic Warfare, together with their British counterparts, were utilized. However, direct dis41

"General Notice No. 43," April 13, 1942, British Purchasing Commission—British Raw Materials Mission, U. S.-U.K. Liaison on Conservation Ajustions. "A Conservation Liaison has been set up under the Combined Raw Materials Board. This Liaison consists of Mr. L. S. Ried, nominated by and representing the Bureau of Conservation, War Production Board, and Mr. F. G. Blythe, appointed by the Raw Materials Mission and representing the British side. In addition, the Bureau of Conservation, W.P.B, has appointed a representative to the staff of Mr. Harriman in London to act on their behalf in a liaison capacity with the branches concerned with conservation in the Ministry of Supply and other U. K. Departments" (CRMB central files). 4 · This point, and especially the informal aspect, was stressed in the First Annual Report (general) of CRMB, Jan. 26, 1943 (WPB 2644). Obviously, it was but part of the story in view of the existence of the Advisory Committee. «· See Chap. VI.

26

Combined Raw Materials Board

eussions and negotiations were held with representatives in Washington of allied and friendly nations without resort to formal machinery. Generally speaking, a minimum of formalized arrangement and procedure was used in dealing with other agencies. This appeared to be the case to such an extent that relationships tended frequently to be of a somewhat unregularized and fortuitous nature. T H E BROAD FIELDS OF ACTIVITY

T h e broad fields of activity within which the Combined Raw Materials Board carried on were as follows: ι. Day by day adjustment of raw materials problems between the United States and the United Kingdom, as well as with other United Nations; 1. Over-all review of the supply and requirement position on critical and essential raw materials and regulation and allocation thereof amongst United Nations; 3. Negotiation between the United States, the United Kingdom and other powers, and the allocation of raw materials becoming available in territories being occupied by the Allies.60 In many ways the Board acted as a point of contact between the United States and the United Kingdom. Clearance and the interchange of information were achieved in this way. Accordingly, close working relationships with the various operating agencies of the two governments were a key to the Board's effectiveness. T h e actual carrying out of recommendations made by the Board was the j o b of the various national agencies. Thus, in most instances, the discussion and preparation of proposed recommendations were carried on, before adoption, with those authorities which were to become responsible for implementation. Established machinery for facilitating this task was to be found in the Advisory Operating Committee composed of representatives of the national agencies. In many instances, arrangements were made and decisions were reached between these agencies without any recourse to formal action by either the Advisory Operating Committee or the Board itself. While the Committee frequently acted as a focal point for discussion, the national agencies (United States and United Kingdom) were regularly dealing with each other, and combined action was achieved constantly outside of the Board's jurisdiction. 41 11

First Annual Report (general) of C R M B , Jan. 26, 1943 ( W P B 1644). "Some Problems in the Organization and Policies of the Combined Raw Materials Board,"

Background and Early Stages COMMODITY

As a supply, supply reports

ιη

REPORTS

framework for dealing with problems o f raw materials the s t a f f of the Board brought under review the combined and requirements of some thirty items. Comprehensive were presented on the following:

Antimony Asbestos Balsa Wood Chromite Cobalt Copper Graphite Kapok Lead

Manganese Manila Hemp Mercury Mica Molybdenum Nickel Nylon Phosphorus Pyrethrum Rubber

Sheep-skin shearlings Shellac Silk Sisal Tin Tungsten Vanadium Wool Zinc

S u r v e y s of a less extensive nature were m a d e of a wide range of materials concerning which specific problems had arisen. Some of were aluminum, a m m o n i u m , sulphate, b a l a t a , bauxite, c a d m i u m , glycerine, j u t e , and sitka s p r u c e . " T h e usefulness and scope of commodity reports, as far as the Board was concerned, varied greatly. In some instances, adequate d a t a were not available. In other instances, the nature of the r a w material was such as to preclude Board recommendations except in a very cursory m a n n e r . " Generally speaking, the Board had greater effect when dealing with other peoples' raw materials. T h e notion of a common United S t a t e s - U n i t e d K i n g d o m pool as such had not been fully accepted by either c o u n t r y , and their national agencies as a rule looked after their own raw materials very closely. T h e r e was, however, a certain element of logic in the selection of raw materials to be analyzed. In the early stages, the B o a r d ' s attention was focused on raw materials threatened b y enemy action in the F a r E a s t — t i n , manila hemp, sisal, rubber, silk. In other cases, such as balsa wood, sheep-skin shearlings, and pyrethrum, the unprecendented demands of the military h a d made an appraisal of the over-all supply requirements imperative. In further Memorandum prepared for E. W . Gaumnitz, Special Assistant to the Executive Director, B E W , by Walter A. Chudson, War Trade Staff, B E W , April 8, 1943. See also, Minutes of Advisory Operating Committee, Aug. 26, 194a ( C R M B central files). » C R M B central files. M See, for example, "Balsa Wood," Progress Reporting System (follow-up files ( C R M B central files).

28

Combined R a w Materials Board

cases the need for joint purchasing arrangements between the United States and the United Kingdom in order to circumvent diastrous competition for limited supplies was a motivating factor. Praiseworthy as the reasons for selection might have been, it must be noted that from the very outset the main attention of the Board was thus directed largely to problems of spot adjustment. Most of the Commodity Reports of the Combined R a w Materials Board were, in fact, the work of the staffs of the W a r Production Board and the British Raw Materials Mission in Washington. B y the very nature of the case, the Combined R a w Materials Board did not act upon all these reports, although the elaboration of information of a combined nature proved invaluable to other government agencies. Regardless of the use to which these Reports were put by the Combined R a w Materials Board itself, they provided for the first time an official account of total raw material situation. As a rule they drew together into one document ( i ) a combined statistical analysis of requirements and supply projected one or two years ahead, (2) a review of possible interruptions of future supply, and (3) desirable measures for conserving and increasing output. Based largely on these Commodity Reports the Board's work was directed primarily to balancing raw material supply and demand through recommendations involving: (a) allocations, (b) measures for development and procurement of supplies, (c) shipping adjustments, and (d) conservation measures. ALLOCATIONS

T h e Board's intervention in particular cases varied with the gravity of the situation, the nature of the material under consideration, and the position assumed by the national agencies involved. Allocation had occurred in several patterns depending on the particular case: (1) territorial division of source countries between the United States and the United Kingdom, (2) division of output of a particular producing area on a percentage or quantitative basis, and (3) balancing the supply position of one country by an allocation of a stated amount from another. In general, the territorial division was to assign WTestern Hemisphere countries to the United States, the British Empire to the United Kingdom, while areas in Africa and elsewhere were divided

Background and Early Stages

29

between the two. More significant were the quantitative allocations. Commodities of particular interest to the Board and which were subject to quantitative allocation between the United States and the United Kingdom were the following: 44 Commodity Antimony Asbestos Balata Balsa Burlap, jute Chromite Graphite Manganese Sisal Mica Nickel Pyrethrum Rubber Shearlings Tin

Source Bolivia South Africa Brazil Ecuador India Rhodesia Ceylon, Madagascar South Africa British East Africa Brazil, India N e w Caledonia, Canada Kenya Ceylon South Africa, Australia, Chile Bolivia, Newfoundland, Australia

While the Board of Economic Warfare and the Ministry of Supply were largely involved in the operations described, the Board was interested in pushing its recommendations to a point where purchasing arrangements, booking arrangements, and shipping arrangements were made to move necessary supplies. The allocation of United States or United Kingdom raw materials in order to balance the supply position of one country or the other involved some of the major critical materials such as steel, aluminum, and copper. The Board's power to recommend allocations was subject to some misunderstandings. While its recommendations carried weight with regard to other peoples' raw materials subject to control or purchase by United States or United Kingdom agencies, the allocation of United States and United Kingdom supplies as such was not, at any rate, determined in the first instance by the Board. In actual practice, the Board merely formalized arrangements and agreements which had been predetermined by the national agencies themselves. T o take an example, the Board "allocated" United States Copper on a quarterly basis to various countries including the United Kingdom; but this was merely repetition of a War Production » CRMB central files.

3o

Combined R a w Materials Board

B o a r d d e t e r m i n a t i o n . " I t r e c o m m e n d e d , as a n o t h e r i n s t a n c e , t h a t 2,100 tons o f new nickel be m a d e a v a i l a b l e from U n i t e d S t a t e s supplies to the U n i o n of S o v i e t Socialist R e p u b l i c s for the second q u a r t e r of 1943; b u t it n o t e d t h a t " c e r t a i n n e g o t i a t i o n s relating t o the R u s s i a n allocation were a t present u n c o m p l e t e d . " " T h u s , alteration appeared necessary and the C o m b i n e d R a w M a t e r i a l s B o a r d w a s , o f course, n o t d o i n g the negotiating. P a r t of the confusion in t h e so-called allocating f u n c t i o n of the B o a r d arose from the form in w h i c h its r e c o m m e n d a t i o n s were s t a t e d . T h e r e w a s little here to indicate t h a t for the m o s t p a r t particular national agencies were b o t h the initiators and the potential executors of policies a d o p t e d . T h e decisions of the B o a r d a n d its r e c o m m e n d a t i o n s were recorded as if t h e y were ex cathedra determinations. A n o t h e r element of confusion arose, p a r t i c u l a r l y w i t h regard to U n i t e d S t a t e s supplies, from the e a r l y experience of the B o a r d w h e n its A m e r i c a n m e m b e r w a s a t the s a m e time c h a i r m a n o f the R e q u i r e m e n t s C o m m i t t e e o f the W a r P r o d u c t i o n B o a r d . A t this s t a g e it w a s usual for the B o a r d ' s decisions to be i n c o r p o r a t e d as determ i n a t i o n s o f the R e q u i r e m e n t s C o m m i t t e e and f r e q u e n t l y w i t h o u t full hearing of t h a t C o m m i t t e e . " DEVELOPMENT

AND

PROCUREMENT

OF S U P P L I E S

T h e C o m b i n e d R a w M a t e r i a l s B o a r d was n o t an o p e r a t i n g a g e n c y . I t did a f f o r d , h o w e v e r , an o p p o r t u n i t y for r e p r e s e n t a t i v e s o f various national agencies o f the U n i t e d S t a t e s and U n i t e d K i n g d o m to come together to consider r a w materials p r o b l e m s . T h e B o a r d , especially through its A d v i s o r y O p e r a t i n g C o m m i t t e e , a c t e d as a point of c o n t a c t and clearance. T h i s device aided in f a c i l i t a t i n g collaboration and a d j u s t m e n t b e t w e e n the n a t i o n a l agencies. M o r e o v e r , the B o a r d f r e q u e n t l y s e r v e d to record officially u n d e r s t a n d i n g s w h i c h were reached and a r r a n g e m e n t s w h i c h h a d been agreed u p o n . I t could be pointed o u t t h a t m u c h took p l a c e w i t h o u t C o m b i n e d R a w M a t e r i a l s B o a r d participation and it could be a r g u e d t h a t m o s t results m i g h t h a v e been achieved w i t h o u t the B o a r d ' s existence. In a n u m b e r of instances, of which asbestos and i n d u s t r i a l " Minutes of the Combined R a w M Ibid., March 26, 1943 ( C R M B 1 7 Memorandum, " T h e Problem Simon Kusnets ( W P B ) , Jan. 23,

Materials Board, April 3, 1943 ( C R M B central files). central files). of Foreign Requirements," from Robert M . Turner to 1943.

Background and Early Stages

31

diamonds were examples, the Board of Economic Warfare had completed direct negotiations with the British without Combined R a w Materials Board participation." The fact remained, however, that the Board developed as a readily available and functioning mechanism whereby the United States and United Kingdom could get together. Commodity reports themselves called attention to the possibility of increasing the supply of raw materials through plans for development and expansion in certain areas. Thus, for example, the British (and later the United States) required a large supply of balsa wood for their airplane program. A major problem was that of developing sources of supply. After lengthy discussion in the Operating Committee, the Board of Economic Warfare formulated a development and purchasing program for increasing the supply of balsa wood in Ecuador. T h e provision of facilities, the raising of prices, the improvement of economic conditions—these were but a few of the methods used to stimulate expansion of supplies. T h e Board gave consideration to developmental problems in such cases as copper, molybdenum, tungsten, mica, pyrethrum, zinc, rubber, tin, cobalt, sisal, and others. In most instances the Board merely lent its support to measures already considered by the respective national agencies such as the Board of Economic Warfare, Metals Reserve Company, and British Ministry of Supply. Nevertheless, joint discussion in the Operating Committee tended to clarify the over-all setting, to iron out misunderstandings and to crystallize ways and means for dealing with particular problems. Furthermore, the Board's formal recommendations served to record and confirm responsibilities undertaken by the respective countries. In certain instances such as mica and pyrethrum the Board itself exerted a good part of the initiative in pressing for action." Part of the j o b of obtaining supplies of raw materials from foreign areas was the orderly establishment of purchasing arrangements. While the various national authorities made their arrangements, the Operating Committee discussed and the Board confirmed these through its recommendations. Combined Raw Materials Board " "Some Problems in the Organization and Policies of the Combined Raw Materials Board," memorandum prepared for E. W. Gaumnitz, Special Assistant to the Executive Director, B E W , by Walter A. Chudson, War Trade Staff, B E W , April 8, 1943. · · Minutes of Advisory Operating Committee, Jan. 20, 1943, and March 17, 1943 ( C R M B central files).

32

Combined R a w Materials Board

recommdnations for coordinating U n i t e d States and United K i n g dom procurement programs fell into four main categories: ι. The United States or United Kingdom undertook sole responsibility for purchasing within some markets, while the other country took the remainder. ι . The United States and United Kingdom undertook sole responsibility for purchasing within an area on joint account, and an agreed allocation was made available to the other. 3. Both countries purchased independently within the same area but within an agreed framework of price and distribution. 4. The United States and United Kingdom organized a joint purchasing mission with equal representation. This was the less common procedure. In the main, methods 1 and 1 were employed. T h e choice of method depended upon a number of factors, including preexisting trade connections, the needs of a particular c o u n t r y , the scarcity of a given c o m m o d i t y , exchange considerations, and so on. In most cases, the matter of allocation formed p a r t of a United S t a t e s - U n i t e d K i n g d o m agreement. For all these reasons, a rough principle w a s e v o l v e d by which responsibility (as has been previously indicated) for the Western Hemisphere (excluding British Dominions) w a s assigned to the United States, the British Empire to the U n i t e d K i n g d o m , while Africa remained more or less of a m u t u a l area.* 0 CONSERVATION

A s a part of the process of facilitating adequate s u p p l y , conservation measures and the exchange of technical information p l a y e d a role. Here again, the Board as a rule merely followed the lead o f the national agencies. Its recommendations for conservation measures in the cases of scrap iron and scrap copper were good examples. On the other hand, occasionally it took the initiative as in the case of molybdenum. T h e C o m b i n e d R a w M a t e r i a l s B o a r d also had a hand in the furtherance of technical information through the interchange of United States and United K i n g d o m e x p e r t s ; missions such as the one sent to the Belgian C o n g o carried on under its aegis. SHIPPING

M a n y of the Board's recommendations hinged upon shipping considerations and the desirability of s a v i n g shipping space. N a t u r " Chudson memorandum, April 8, 1943.

Background and Early Stages

33

ally in such instances the appropriate shipping authorities m a d e the decisions. In line with such decisions, for example, the B o a r d allocated the responsibility o f supplying Canadian requirements for ferrotungsten to the U n i t e d States, thus cutting out the long haul from the United K i n g d o m . Likewise, the substitution of phosphorus for phosphate rock to be shipped from the United States to the U n i t e d K i n g d o m i n v o l v e d large tonnage saving. T h i s same step enabled British factories m a k i n g phosphorous to shift to the m a n u facture of ferrosilicon. A s another instance, the British E x e c u t i v e Secretary reported t h a t a cable was sent to London requesting t h a t British tungsten stocks in the United States might be exchanged as a bookkeeping operation for United States purchases of tungsten in Portugal on a ton-for-ton basis. Such moves eliminated crosshaul on shipping. A TYPICAL

DECISION

T h e range and interconnections of the Board's recommendations can be seen b y examining one of its typical decisions. BALSA WOOD, staff report No. 2, dated August 24, 1942, Document No. 72, was considered, and the Board recommended that: DECISION N o . 73

Recommendation No. /: The total supply of aerograde balsa from Ecuador available for export to the United Nations after October 1, 1942, be devoted entirely to aircraft purposes. Recommendation No. 2: The supply of aerograde balsa shipped from Ecuador in the twelve months beginning October i, 1942, be allocated among the United Nations in the following ratios: United States 1 United Kingdom and Canada 4.5 Australia 12 Recommendation No. j : Until October 1, 1942, the allocation ratios embodied in Recommendation No. 4, Decision No. 35, of the Combined Raw Materials, issued May 13, 1942, continue in effect. Recommendation No. 4: (a) The appropriate United States agency and the United Kingdom representative in Ecuador take all possible steps to improve current grading practices in Ecuador so as to effect a more precise separation between the aero and non-aero grades of balsa. (b) If the inability to perfect grading practices should necessitate shipment to the United Kingdom of non-aero grades, the United Kingdom shall ship to the United States such wood if and when appropriate quantities and shipping space are available. Recommendation No. 5 : The appropriate United States agency facilitate the export to Ecuador of such equipment and maintenance and operating

34

Combined Raw Materials Board

supplies as may be necessary to maintain present production and to attain maximum output in 1943. Recommendation No. 6: The appropriate United States and United Kingdom agencies carry out and expand investigations now under way in Costa Rica and Colombia and initiate investigations in other Latin American countries with a view to developing new sources of supply, a report on these investigations and on the latest estimates of supply in 1943 from Ecuador be submitted to the Board at the earliest possible date. Recommendation No. 7: The attention of the shipping authorities in both the United States and the United Kingdom be called to the urgent need for providing adequate and regular shipping space for all the balsa wood available for shipment from Ecuador and from such other sources of supply as may be developed. Responsibility. United States No. 5; Combined Nos. 1, 2, 3, 4, 6 and 7. The Board noted the potential gravity of the balsa wood situation and agreed that efforts being made by the Board of Economic Warfare to maintain and increase supplies and by the shipping authorities to secure their movement should be followed clearly.' 1 SPECIAL PROBLEMS

In its later stages the Board was to concern itself more with raw materials problems arising in relation to neutral countries as well as in those areas liberated from A x i s domination. C h i e f authority o v e r civilian agencies rested with the D e p a r t m e n t of S t a t e and the B o a r d of Economic W a r f a r e for the American side, and the Foreign Office and the Ministry of Economic Warfare for the British. In the early part of 1943, the Board adopted a new procedure for m a k i n g adjustments in " a r e a allocations" especially applicable to French N o r t h and W e s t A f r i c a and M a d a g a s c a r . T h e B o a r d noted t h a t allocations of raw materials supplies for these areas were likely to require frequent a d j u s t m e n t in detail in order to include additional materials and to transfer allocations from one country to another in the light of operating and especially shipping convenience. T h e s e a d j u s t m e n t s were usually of minor or negligible importance. T h e B o a r d therefore agreed that such adjustments should be m a d e initially by agreement between the Executive Secretaries, with notification to the operating agencies concerned, and brought u p for confirmation at a convenient future meeting of the Board.' 2 M a n y cases considered in conjunction with the various agencies remained unfinished business; not merely were they r a m i f y i n g in " Minutes of the Combined R a w Materials Board, Aug. 28, 1941 ( C R M B central files). ·» Iii J., Feb. 32, 1943 ( C R M B central files).

Background and Early Stages

35

their relationships, but frequent changes in circumstance made constant scrutiny necessary in most instances. Continuous negotiation and discussion were therefore in order. Furthermore, this meant that the Commodity Reports themselves were subject to continuous revision. The Board itself adopted the policy of periodical review, usually at three-month intervals. Attempt was made in each instance ( i ) to summarize the actions undertaken as the result of the Board's recommendations, and (2) to bring the supply-requirements situation up-to-date on the basis of latest data and developments. With a number of national agencies reporting as members of the Operating Committee, a check was kept, to a certain extent, on how far the recommendations of the Board were being carried o u t . " " See Minutes, Advisory Operating Committee, Aug. 8, 1942.

II: The Remainder of Its Existence

T

H E F I R S T y e a r of the Combined R a w Materials Board was a most important one, for in that period both its organization and pattern of operations were solidly established. B y the end of January 1943 the Board had issued 120 decisions and had considered 124 documents supporting its recommendations and reviewing the supply-requirements position in the commodities under Board surveillance. 1 Recommendations with respect to allocations had been made in the case of some twenty-eight commodities, most of them in serious short supply. A s has already been indicated, the main function of the Board was to facilitate cooperation between the national sides. F e w actions were initiated originally by the Board itself. Nevertheless, its recommendations and the surveys which established the extent to which raw materials requirements of the United States and the United K i n g d o m could be met from available sources were of real aid in the planning of the t w o nations. Furthermore, by confirming agreed-upon arrangements the Board helped to provide a system of order in the raw materials procurement programs of the two countries as well as other allies. In the case of commodities like m i c a , nickel, rubber from C e y l o n , tin and m o l y b d e n u m , the B o a r d recommended allocations which provided rather specific quantities to meet screened requirements. D u r i n g the first year, its officers deliberately chose to limit the scope of operations, a m o v e which turned out to be very fortunate in view of the difficulties encountered by other combined boards. I t was realized from the beginning that creating a place for itself and winning the confidence of the United States agencies with which it had to work was a large task. For one thing, the Board did not concern itself with t w o o f the most important metals used in modern warfare, steel and a l u m i n u m . In the case of steel the Board removed itself from one of the m o s t 1 "History of the Combined R a w Materials Board," unpublished typescript prepared by U . S. staff of the Board, 1946.

R e m a i n d e r of I t s Existence

37

important sectors of raw materials planning, but to its officials this appeared to be a wise step. The international movement of steel was largely one from the United States to the United Kingdom, and there was little question of alternative sources to satisfy the various claimants. Furthermore, there was the chance of direct and serious impingement upon the operations of the Lend-Lease Administration as well as the Steel Division of the War Production Board, which had set up a special section for dealing with foreign requirements for steel. The decision not to deal with steel, although circumscribing the over-all planning which the Board might have done, seemed a wise one. Similarly, the Board maintained a bare minimum of staff of its own, thus limiting the extent to which it operated independently of the national agencies. Although the Board's primary interest was in aiding the two sides to merge their interests into one position, by giving up most opportunities for independent initiative it failed to do the kind of coordinating job it might have undertaken. Furthermore, the Board suffered from what may be described as a piecemeal or ad hoc approach to raw materials problems. In most instances specific problems were attacked only after difficulties had arisen. This was particularly true inasmuch as the top officials in the first year were men with operating rather than planning experience. The result was that little attention was given to over-all planning and the gearing of raw materials supplies to the strategic needs of the two nations. Realizing the opposition and resistance that might be encountered from the national agencies, the Board apparently chose to work within a limited function, conceiving itself primarily as a forum in which the operating agencies of the two countries might reach agreement on raw materials questions. The Board's role was thus one of tempering nationalistic bents and creating an atmosphere of mutual trust and cooperation. I t was an advisory and facilitative agency rather than an executive and operating organization. In frequent instances at meetings of the Operating Committee the British, with their wide experience in the foreign economic field, assisted American officials in solving some of their own operating problems. During the hectic times of its first year, the Board had to face a series of raw materials crises during a period when shortages were quite widespread. It attempted to stimulate the operating agencies

38

C o m b i n e d R a w Materials Board

to increase supplies, to reduce nonessential consumption and to bring the two countries up to par. After these first emergency steps had been taken, the need for more orderly procedure appeared evident. Commodities were brought under systematic review, information was assembled on both requirements and supply, and a pattern of recommending allocations was developed which continued in many instances until the end of the war. The nub of the Board's work throughout its history, as has already been indicated, centered upon its periodic reviews of particular raw materials and subsequent recommendations as to allocation, building up of supply, conservation in use, and the coordination of purchasing arrangements. A N A P P R A I S A L OF A D M I N I S T R A T I O N P R O B L E M S

Despite the Combined Raw Materials Board's apparent success, an appraisal of the administrative problems encountered during the first year of work is very revealing. Most of these problems not only persisted throughout, but were also indicative of similar difficulties encountered by the other combined civilian boards. The mandate of the Combined Raw Materials Board had, from the very beginning, been subject to varying interpretations. Concern over its power and jurisdiction was expressed at the very outset. Efforts to clarify these, however, were resisted in high quarters, with the result that no Executive Order was ever issued for this purpose. In general terms, one could argue that the Board's function was to consitute a mechanism whereby the national agencies of the United States and the United Kingdom might jointly meet their raw materials problem. At one extreme it was possible to maintain that the Combined Raw Materials Board would act merely as a clearing center on issues of a combined nature. At the other extreme it was tenable to conclude that it was meant to assume control of all raw materials of the United States and the United Kingdom. Its mandate was to "plan the best and speediest development, expansion, and use of the raw material resources, under the jurisdiction or control of the two Governments, and make the recommendations necessary to execute such plans. Such recommendations shall be carried out by all parts of the respective Governments." This was the main section of the Board's "charter." It was vague and general and left its authority undefined. Were its recommendations mandatory? Could it issue directives to appropriate national

R e m a i n d e r of I t s Existence

39

agencies? The Board had not attempted to do so. Nevertheless, grave misunderstandings had frequently arisen concerning this matter of authority. Confusion resulted not only among the national operating agencies concerned but also in other quarters and especially among non-member nations. All these shortcomings were well illustrated in the case of the United States membership of the Board. The brief original mandate merely stated that the Board "will be composed of a representative of the British Government and a representative of the United States Government. The British member will represent and act under the instruction of the Minister of Supply" (subsequently Minister of Production). In practice, the British member was head of the British Raw Materials Mission in Washington. In this capacity as well as in his role as member of the Board his line of authority and responsibility was direct to London and to the War Cabinet. As to the American member's position, however, the mandate was silent. While there was an understanding that he would be responsible to the Chairman of the War Production Board, his actual status altered from time to time. During the first few months of the Combined Raw Materials Board's existence, the American member was at the same time Chairman of the Requirements Committee of the War Production Board. Since the Chairman had the power of determination in regard to American supplies, this seemed a sound arrangement administratively. However, in the first week of J u l y 1942 a new Chairman of the Requirements Committee was appointed. While the Combined Raw Materials Board member was given the title of Vice Chairman of the War Production Board at that time, his power and position in the War Production Board fluctuated constantly. 2 This uncertainty resulted not only in indecisive and ineffective leadership at the top but also in a lack of administrative vigor within the entire organization. The staffing problem of the Board also had its peculiar aspects. * On July $, 194!, in one of WPB's periodic reshuffles, two new Vice-Chairmen were appointed. The one was Mr. Batt, the American member of C R M B ; the other was Mr. Knowlson, deputy member of the newly created Combined Production and Resources Board. At the same time, however, the former was removed as Chairman of the Requirements Committee and the latter was appointed in his stead. This change may have been in part a reflection of plans to have C R M B absorbed by C P R B . While such absorption did not take place, high officials of W P B and representatives of the Bureau of the Budget were constantly concerned with the problem of relationships between these two Combined Boards.

4o

Combined Raw Materials Board

From the very start it was agreed in all quarters that a very small and able group would be required, and the problem of recruitment as such was not an important one. However, with no clear conception of the job to be undertaken, personnel needs were never sharply envisaged. It was necessary, nevertheless, to carry out two main functions in line with the work developed by the Board. The first involved the over-all review and analysis on a world basis of important raw materials—essentially a research and fact-finding job. The second involved constant adjustments with the British— essentially a task of negotiation. It was thought in the beginning that the first of these functions would be carried out by a small combined full-time staff or secretariat attached directly to the Board itself. While such a unit would naturally depend upon the national agencies for most of its data, it would correlate all information on an over-all basis as a prerequisite to Board action. However, no such staff was provided for and no arrangement for handling this job separately was made. In practice, the War Production Board furnished the personnel of the American staff while the British opposite numbers were drawn from the British Raw Materials Mission. These commodity experts attempted to carry out both the task of fact-finding and negotiation —two very different kinds of jobs, each requiring distinct talents. The burden of following up on Board recommendations had also been placed upon these same commodity experts. Furthermore, the demands for their service made in the first instance by their respective national agencies were such as to sharply curtail the time they were able to give to Board matters. The whole problem of acquiring full and accurate information was crucial in the case of an agency like the Combined Raw Materials Board. Without such information its work was seriously handicapped. The essential difficulties sprang from a number of sources. Given the broad and relatively unexplored nature of the Board's field of interest, it had at times, without realizing, asked for data which were simply unobtainable and in fact nonexistent. There were, however, specific obstacles, internal as well as external, which accounted for some of the difficulties. The chief handicap, as has already been indicated, lay in the fact that the Board did not possess a distinct staff charged with the responsibility of collecting and collating data and information.

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41

For the assembling and analysis of evidence, no provision was made for a staff of a non-national nature. In fact, special effort was made to keep the two sides separate from top to bottom. There was no single Director of Staff, no combined staff, and no combined secretariat or registry. While on each side the staff coordinators endeavored to pull together to a certain extent the work of their respective commodity experts, conditions generally were such as to militate against a comprehensive and balanced treatment of the raw materials field. External factors were also impediments. The two sides were frequently reluctant to give information simply because the national agencies to which they were responsible refused to release it for reasons that were not always clear. On the part of the British, the constant habit of referring requests for information to London and the fact that quite often consultation with far-flung parts of the Empire had to take place before results were obtainable, did not help. The Minutes of the Advisory Operating Committee revealed continual prodding of the British by the Americans. Moreover, as a reaction in part to this experience, United States high officials hesitated about releasing complete data for the full use of the Board. There was a feeling in certain quarters of the War Production Board as well as in other United States agencies that equal access to information was not always given by both sides. Discrepancies in available information were also encountered. The various national agencies sometimes differed sharply in their estimates of supplies and requirements. These differences were not always easy to reconcile, aggravated as they were at times by the fact that British and American data were not presented on a comparable basis. Reports from the field likewise introduced special obstacles, some of which could be traced to jurisdictional conflicts and many of which were out of the control of representatives in the field. As the carrying out of procurement and development programs in foreign areas depended upon the voluntary cooperation of non-belligerents, the whole problem of reporting, as well as of implementation, was frequently a difficult one to solve. While a superficial study of the minutes of the Board gave the impression of a great variety of cases under consideration, the actual practice was to move along and follow through on only a limited number of items. Apparently, one of the major strong points of the

42

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Combined Raw Materials Board was, at the same time, one of its major shortcomings. T h e fact was that the real effort was concentrated on a restricted number of problems. As we have seen, these were in the nature of spot adjustments. As a result the Board carved out a niche for itself; but this was done with little regard for a balanced attack on the whole raw materials front. Immediate cases were pursued to the detriment of a wider consideration of the raw materials field as a whole, and short-range considerations usually took precedence over long-range planning. T h e minutes of the Board, together with those of the Advisory Operating Committee, are apt to give an erroneous impression of the range of the Board's activities and effectiveness. T h e form of its recommendations, as well as the numerous "appropriate agencies" to whom they were directed tended to distort the picture for any realistic evaluation. On the one hand, the decisions tended to take on a mandatory tone which was not of their essence. This has already been referred to and illustrated in the case of allocations of American supplies. On the other hand, they were frequently so general—directed, so to speak, " T o Whom It M a y C o n c e r n " — t h a t it was inconceivable that they be followed, much less put into effect. For instance, Decision No. 19 ((Tin), Recommendation No. 18, read as follows: "all possible . . . measures of conservation be energetically pursued and appropriate steps be taken to inform all consuming countries and to secure similar action in them as far as conditions permit."' Another example is Decision No. 103 (Fiber-Sisal), Recommendation No. 5: "Effort be made by the United States, United Kingdom and Canada to obtain economy in usage in all consuming countries corresponding to that practiced in the United States, United Kingdom and C a n a d a . " 4 Persons closely connected with the operations of the Board were themselves frequently perplexed by its recommendations. T h e following recommendation in regard to zinc, for example, was proposed at a meeting of the Operating Committee on September 9, 1942: " T h e appropriate agencies of the U. S. and the U. K . take all possible steps to secure an adequate supply of labor in the zinc mines and smelters in the U. S., U. K . , Canada, Australia and New1 4

Minutes of the Combined Raw Materials Board, March 26, 194a. Iti J., Nov. 30, 194Î.

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foundland. 4 " R . D. Fennelly, who was representing the United Kingdom Ministry of Production and who had been closely associated with the Board's work, raised serious question at the meeting as to just how this whole matter could be handled. Despite M r . Fennelly's skepticism, the recommendation was approved as quoted and was incorporated without change in the Board's Decision No. 75 of September 11, 1942, as Recommendation No. 4.· Letters of implementation were widely distributed, but it did not follow that the Board's recommendations were always observed. In few, if any cases, was a failure officially recorded. A rare exception was the Board's Copper Decision dated January 13, 1943. Recommendation No. 4 of that Decision read as follows: "Recommendation No. 8 of Decision No. 44 (May 30, 1942) be suspended until more concrete plans for implementing shall have been formulated by the appropriate authorities in the United States and the United Kingdom." 7 Nevertheless, the general tenor of the Board's recommendations was an important contributing factor in the difficulty of following up on such recommendations. The roots of the difficulty, however, were of a more complicated kind. They sprang from many causes. In the case of the Dominions of the British Empire, the recommendations were conveyed to the individual Dominions through the Empire Clearing House, their representative committee sitting in London. Responsibility for the follow-up rested upon the Empire Clearing House, representatives in London were to check on what had been done and to make that information available to the United Kingdom. But the Dominions were independent sovereignties not subject to policing by the United Kingdom Government. T h e y were not represented on the Combined Raw Materials Board, nor were they bound by its recommendations. ' M i n u t e s o f the A d v i s o r y O p e r a t i n g C o m m i t t e e , S e p t . 9, 1943. * M i n u t e s o f the C o m b i n e d R a w M a t e r i a l s B o a r d , S e p t . i i , 1942. 7Ibid., J a n . 13, 1943. S t e p s to r e m e d y the situation were taken in the spring o f 1943 as a result o f a proposal m a d e b y the U n i t e d S t a t e s S t a f f C o o r d i n a t o r . H i s m e m o r a n d u m o f M a y 4, 1943, to the s t a f f r e a d , in p a r t as follows: " . . . C R M B decisions still c o n t a i n n u m e r o u s r e c o m m e n d a t i o n s which h a v e b e c o m e ine f f e c t i v e a n d w h i c h are confusing to persons w o r k i n g w i t h the B o a r d ' s decisions. " I n o r d e r to c l a r i f y this s i t u a t i o n , it has been suggested t h a t all f u t u r e decisions o f the B o a r d w h i c h are based o n m o r e or less c o m p r e h e n s i v e reviews o f the s t a t u s o f a c o m m o d i t y , c o n t a i n o n e r e c o m m e n d a t i o n w h i c h lists those r e c o m m e n d a t i o n s in p r e v i o u s decisions w h i c h h a v e b e c o m e f u l l y i m p l e m e n t e d or are no longer a p p l i c a b l e . " M e m o r a n d u m to the S t a f f , f r o m R . S. G o r d o n , U n i t e d S t a t e s S t a f f C o o r d i n a t o r , M a y 4, 1943.

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The problem, however, had other and more important facets, as witnessed by the fact that questions of follow-up and implementation procedures had been raised regularly at meetings of the Advisory Operating Committee.8 In some cases, no follow-up was attempted and mere notification of the Board's recommendation to the implementing agency was all that was done. In other instances, when technical and operating questions were involved, the commodity experts were asked (i) to clarify and interpret recommendations to agencies, (2) to prod and to check on all compliances, and (3) to report back on results or lack of results. In certain cases, the Executive Officers themselves were made responsible for this. In practice, there tended to be a certain amount of confusion over responsibility. The commodity men and Executive Officers frequently worked on the same case, but their respective responbilities were not clearly distinguished. With regard to the American commodity men, the situation was especially difficult. For one thing, they were extremely busy with their duties in the War Production Board. For another, as members of the staff of that Board they did not possess easy access to other agencies. The British commodity men, on the other hand, were in a more advantageous position. They functioned within a much more unified governmental pattern as a rule, and their contact with the various British agencies or their representatives was much more direct and constant. The whole question was further aggravated by the lack of wellestablished procedures, characteristic of the Combined Raw Materials Board generally. These shortcomings could be seen in the "spottiness" of the follow-up records which were kept. A so-called Progress Reporting System was in existence, but it was simply not adequate. Attempt was made to maintain a file of all actions taken consequent to each particular recommendation. The actual records were very uneven and in many instances there were gaps in information. Little attempt was made to keep this file up to date. In any agency there is close correlation between the procedures followed and the records maintained. The Combined Raw Materials Board was no exception to this rule. The effectiveness of informal relationships in any organization, whether public or private, begins to reach a point of diminishing returns as the scope of the agency 8

Cf. Minutes of the Advisory Operating Committee, June 3, 1942, Oct. 8, 1942, and Jan. J,

1943·

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widens and as its business becomes more complex. M o d e r n government, like industry, is a large-scale undertaking and cannot depend upon face-to-face relationships for effectuating its objectives. In the case of the C o m b i n e d R a w M a t e r i a l s B o a r d , understandings were reached and arrangements m a d e frequently w i t h o u t the knowledge of more than one, or perhaps two, individuals. T h e r e was no deliberate a t t e m p t to c i r c u m v e n t the broader interests of the B o a r d . B u t a pattern of contact and liaison had developed in which little regard was paid to the need for formal devices and procedural techniques. A t times, the E x e c u t i v e Officers themselves were not fully cognizant of w h a t had occurred. W i t h the telephone as a m a j o r medium of communication, staff members were a t times k e p t uninformed on matters of which they should h a v e been aware. T h e following excerpt from the Minutes of the O p e r a t i n g C o m m i t t e e merits careful attention for the light it throws on the situation: Mexican Lead to Sweden—Mr. Sykes read a memorandum from Mr. Harold White, the staff member of the C R M B on lead, to the effect that a shipment of ι ,000 metric tons of Mexican lead had been recently approved by the State Dept. for Sweden, via the U. S. Mr. White pointed out that the C R M B apparently had not been consulted and that while the material involved is not in short supply, two procedural questions were posed: (1) Should the C R M B be consulted by the State Dept. as to the advisability of making shipments of substantial tonnages of raw materials to foreign countries? (2) Is there any established mechanism whereby the appropriate staff member is informed as to such actions? Mr. Finletter stated that it was his understanding that Mr. Batt had approved this particular shipment, a trade negotiation of old standing. Dr. McGhee added that the B E W had advised that they received a letter from Mr. Rhetts, Executive Assistant to Mr. Batt, stating that the shipment had been cleared by the Army-Navy Munitions Board. 9 E x t r e m e dependence in any governmental agency upon the activities of one individual (or two) is hazardous, no m a t t e r h o w successful that individual m a y be. W h e n such activities are partially undisclosed and wholly unrecorded, the risk becomes even greater. Granted a m a x i m u m of good will and honesty, it means, nevertheless, that in the long run the benefits arising from experience generally, and developed administrative techniques particularly, cannot be fully shared with the present personnel and passed on to those who succeed. * Minutes of the Advisory Operating Committee, Aug. 7, 1942.

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Combined Raw Materials Board

W h i l e the Office of Lend-Lease Administration had had a repres e n t a t i v e on the A d v i s o r y O p e r a t i n g C o m m i t t e e since N o v e m b e r 1942, its relationships with the C o m b i n e d R a w Materials Board had been of a rather distant and unsatisfactory character. 1 0 T h e r e existed a fundamental conflict between these two organizations concerning British foreign requirements. T h e Office of Lend-Lease Administration had been designated as the sole claimant agency for the British Empire (excluding C a n a d a ) in regard to British requirements for United States supplies. T h i s would seem to imply a unilateral approach, with the U n i t e d K i n g d o m as petitioner and L e n d - L e a s e as the authorized agency to present its claims for new materials to the W a r Production B o a r d . I t would imply that L e n d Lease would examine British requests, and that, in modified or unmodified form, these would be presented b y Lend-Lease to the A m e r i c a n Requirements C o m m i t t e e of the W a r Production B o a r d . In practice, this arrangement did not prevail, and it was, in fact, in direct conflict with the procedure actually followed b y the C o m b i n e d R a w Materials Board. T h e B o a r d adhered to the principle of the United States and the U n i t e d K i n g d o m coming together as equals, pooling their information and developing a m u t u a l l y acceptable program which was presented directly to the American Requirements Committee. I t was not difficult to see w h y the British preferred this approach and w h y they endeavored to m a k e as m u c h o u t of it as they could. F u r t h e r m o r e , while as a rule, they m a d e detailed information available to Combined R a w M a t e r i a l s Board staff members, they generally gave Lend-Lease only a mere s u m m a r y o f their requirements. T h u s , at the early stages, L e n d - L e a s e was left pretty m u c h in the dark as to basic d a t a and justifications for British raw m a terials requirements. L a t e r on, the British began to discuss their needs more fully with Lend-Lease after the C o m b i n e d R a w M a t e r i a l s B o a r d had formulated its recommendations. 1 1 B u t , by and large, while Lend-Lease appeared as c l a i m a n t for the British before the Requirements C o m m i t t e e of the W7ar Production Board, it a c t e d in instances as a claimant without a client, inasmuch as the British did not look to it as the main channel for obtaining raw materials. 10 Memorandum, " T h e Problem of Foreign Requirements," from Robert M . Turner to Simon Kuznets ( W P B ) , Jan. 23, 1943. 11 Conference with F. E. Mclntyre, Program Officer, Requirements Control Division, O L L A , M a y 3, 1943.

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A full analysis of Combined R a w Materials Board-War Production Board relationships would involve tracing not only the development of the Combined R a w Materials Board but also the evolution of major patterns of organization and contro within the W a r Production Board itself. Discussion of foreign requirements procedure, which was by far the most important aspect of these relationships, was primarily a commentary upon changes and shortcomings in W a r Production Board policy and practice. T h e area of jurisdiction of the Combined Raw Materials Board had never been defined, nor had the limit of its powers been clearly determined. In the beginning, its American member, as has been stated, was simultaneously the chairman of the Requirements Committee of the W a r Production Board. During these early months, it was difficult to distinguish the Combined R a w Materials Board from the W a r Production Board. Staff members who were later to be identified as Combined R a w Materials Board commodity men first attended meetings of the Advisory Operating Committee as representatives of the American Requirements Committee or of the War Production Board. T h e few reports which were discussed were scheduled by M r . de Chazeau of the War Production Board. 12 As a matter of fact, as has already been indicated, the Combined R a w Materials Board decisions were incorporated, as a rule, in the determinations of the Requirements Committee. In actual practice, the Board's "allocations" of United States supplies were never made without discussion and some prearrangement with W a r Production Board officials. The American member had always been an official of the War Production Board, albeit in varying capacities. T h e American commodity men who were W a r Production Board staff members naturally acted to protect the interests of the United States, just as their British opposite numbers took similar action with respect to the United Kingdom. During the summer and fall of 1942, the War Production Board was in a state of fluctuation concerning the handling of foreign requirements. Concepts as well as techniques of control which later were to bring a semblance of order had not been developed. Under these conditions, British requirements for United States supplies as they became officially expressed in Combined Raw Materials Board recommendations were subject to various and devious u

Minutes of the Advisory Operating Committee, April 7, 1942.

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Combined Raw Materials Board

dealings. W h i l e the h a b i t of incorporating C o m b i n e d R a w M a t e r i a l s Board decisions in Requirements C o m m i t t e e determinations had been dropped a b r u p t l y at an earlier stage, recommendations and instructions frequently were transmitted directly to the operating branches of the W a r Production Board by officers of the C o m b i n e d R a w Materials B o a r d . M o r e frequently, moreover, W a r Production Board officials w h o were concerned were left entirely u n a w a r e of these m o v e s . " Beginning in late 1942, however, the whole tendency w a s to tighten up on foreign requirements controls and procedures in the W a r Production B o a r d . F o r one thing, an understanding reached with the C o m b i n e d R a w Materials Board precluded it from transmitting its recommendations to the operating branches or divisions for implementation. Such recommendations w e n t directly to the Requirements C o m m i t t e e through the P r o g r a m V i c e C h a i r m a n , w h o issued instructions and orders to the operating divisions for alloallocations from A m e r i c a n supplies. T h i s m e a n t , too, t h a t the recommendations could be referred to the Foreign Division for scrutiny and to the Program A d j u s t m e n t C o m m i t t e e and the Requirements C o m m i t t e e for discussion and action. In addition, a further procedural understanding was reached: the R e q u i r e m e n t s C o m m i t t e e could refer back to the C o m b i n e d R a w M a t e r i a l s Board for reconsideration any recommendation to which it did not agree. 1 4 W h i l e ties with the national agencies constituted one o f the main areas of difficulty, relationships with the other combined boards also presented a serious problem. M o s t t r y i n g had been the lack of articulation with the m i l i t a r y — t h e C o m b i n e d Chiefs of S t a f f . T h e needs of total w a r — t h e interdependence of military and economic s t r a t e g y — w e r e still largely unexplored hypotheses in respect to institutional techniques for effecting synchronization. T h e r e was no W a r Council of a combined, let alone a United N a t i o n s , nature; and in the United States there was n o t e v en a W a r C a b i n e t to weld together the efforts of the nation as a whole. A s for the C o m b i n e d R a w Materials B o a r d , little effective relationship with the military was achieved. A t the international level, no established and formal" Memorandum, "The Problem of Foreign Requirements," from Robert M. Turner to Simon Kuznets (WPB), Jan. 23, 1943. 14 Ibid. Conference with James Fesler, Executive Secretary, Planning Committee, and Thomas Field, Secretary, Program Adjustment Committee, WPB, April 12, 1943.

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ized relationships were maintained with the Combined Chiefs of Staff. Viewed realistically, the various combined establishments appeared as segments of effort; their interconnections were weak and their respective decisions were not geared smoothly. Lack of confidence and absence of administrative direction and vigor were inevitable concomitants of the prevailing situation. One thing was certain; the adverse attitude of military officials toward the civilian boards did not help matters any. 1 5 Equally trying was the lack of effective ties between the combined civilian boards themselves. R a w materials, production, shipping— the end results were all of one piece. Little provision had been made for achieving integrated and continuous process. For a brief period at the inception of the Combined Production and Resources Board in June 1942, it was urged in some quarters that this should become an over-all agency for coordinating the efforts of the other combined civilian boards. 1 · It was even anticipated that the Combined Raw Materials Board would become a subordinate part of this new set-up. A combined secretariat serving all of the boards was also envisaged. High hopes were entertained by a number of officials, but the efforts came to naught. The Combined Production and Resources Board emerged as just another segment, to develop into one of the weaker and less effective of the four combined boards. N o over-all organization, similar to the Allied Maritime Transport Council during the first World War, had been created to give unity of purpose and direction to the combined boards. As was the case with the Combined R a w Materials Board, such interboard coordination as had been achieved had been largely a result of personal contacts and ad hoc arrangements. T h e foregoing, then, were some of the main administrative weaknesses of the Combined R a w Materials Board. M a n y of these shortcomings were inherent in the nature of the undertaking itself. In the main they persisted throughout the four years of the board's existence. During this period little alteration took place in the basic structure of the board or in its way of doing business. T H E SECOND Y E A R AND B E Y O N D

T h e situation in the international raw materials field in the second Conference with M a j o r General Lucius D . C l a y , March 1 7 , 1 9 4 3 ; Conference with Brigadier General John R . Deane, M a r c h 17, 1943. " See Chap. V . 11

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y e a r did not differ greatly from t h a t of the first. I t w a s s u m m a r i z e d v e r y effectively by the B o a r d in its second annual r e p o r t : The overall raw materials position did not itself change radically during 1943. In some cases, notably hides and woodpulp, serious new shortages did develop during the year; in other cases—such as aluminum, magnesium, mercury and certain alloying materials—the supply position eased substantially. . . . Over the field as a whole, however, the international allocation procedure to maintain if not to increase supplies, and to retain a considerable degree of conservation remained fully necessary. . . . Where commodities were drawn from numerous overseas sources and in very large tonnages, the allocations procedure remained necessary—as it still does—to preserve the equilibrium once established, and to ensure that the military programs, whatever variations or modifications occurred in them, continued to be supported by a proper flow of materials. This side of the Board's work, therefore, received full attention during the year, and all allocations remained in operation. . . T h e y e a r 1 9 4 3 , h o w e v e r , did d i f f e r from 1 9 4 2 in one i m p o r t a n t respect. F o r as the B o a r d got well into its second y e a r of w o r k , it was possible to see much more clearly and to forecast more accurately whether or not there would be deficiencies in the v a r i o u s r a w materials. T h e clarification of three f a c t o r s m a d e this possible. In the early p a r t of 1 9 4 2 when the U n i t e d S t a t e s p a r t i c u l a r l y was converting its industry from p e a c e t i m e civilian production to v a s t programs of military e q u i p m e n t , it was impossible to forsee accurately w h a t quantities of r a w m a t e r i a l s would be needed within a given period. S i m i l a r l y , it was difficult to forecast w h a t degree of economy and conservation could be exercised w i t h o u t loss of efficiency in military or essential civilian e q u i p m e n t , or to express such estimates in terms of tonnages to be s a v e d . T h i r d l y , estimates of new supplies of raw materials resulting from expansion and mining development schemes both at home a n d a b r o a d h a d to wait until such schemes were a c t u a l l y in o p e r a t i o n . 1 8 While these were u n k n o w n f a c t o r s in 1 9 4 2 , the position in terms of tonnages became much more stabilized during the l a t t e r half of 1 9 4 3 , when it was seen t h a t the m i l i t a r y e f f o r t of the U n i t e d N a t i o n s was likely to be well supported b y a sufficiency of raw m a t e r i a l s . Over the field as a whole, in other words, balance h a d been in l a r g e measure achieved; and the e f f o r t of the B o a r d g r a d u a l l y concentrated itself " o n the narrower r a n g e of materials which h a v e re17

l

C R M B , Second Annual Report, Jan. 16, 1944.

· Ibid.

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mained, so to speak, recalcitrant, such as rubber, nickel, mica, the anti-malarials, sisal and hides, and on those materials such as shellac in which the position continued to be uncertain and variable." In the main, the pattern of the Board's work and organization in its second year resembled to a large extent that which had developed in 1942, with the emphasis more on recommended allocations of existing supplies against fairly well-established consumption levels and less on development of new sources and further reduction in use. During the end of 1943 and in the early part of 1944 the Board was faced with new issues which the developing situation brought to the fore. In a number of commodities such as tungsten, antim o n y , copper, vanadium, molybdenum, and mercury, surpluses began to emerge. What to do with them was a difficult problem. In a Board discussion of this whole matter, M r . B a t t , the United States member, observed that while a number of materials had ceased to be critical, "statistical surpluses did not at the same time prove conclusively that a complete abdication of all controls would be without d a n g e r . " 1 ' Other limiting factors such as manpower and particularly transportation and shipping appeared to make it inadvisable to release controls too rapidly. In attempting to clarify the situation the board worked out a policy statement to be communicated to the appropriate national agencies: In this field [surpluses] it was clearly the Board's function to maintain sufficient supervision to ensure that with the loosening of controls made possible by the wider supply margins, new shortages did not develop. This would involve the continuation of statistical reports, progress reports to the Board at suitable intervals, and on occasion, further recommendations. Each case would have to be considered on its merits. On the other hand, close control would no longer be so necessary and the Board should dispense as far as possible with detailed regulation. This would also apply to export control; the amounts involved were likely to be small and it would be sufficient for the Board to keep watch over the position by ensuring that it was kept advised by the United States and the United Kingdom (and other countries if necessary) of their exports from time to time. Sir Charles Hambro (the U. K. member] concurred, adding that in many cases an important function . . . would be to maintain adequate coordinated purchasing arrangements to prevent a scramble for essential supplies in various producing markets where it might otherwise develop ' · Minutes of the Combined Raw Materials Board, March 13, 1944.

5*

Combined Raw Materials Board

and result in hoarding, or interference in other ways with the flow of these essential materials.10 Closely connected with these issues was the fact that the Board felt some responsibility for seeing to it that, where raw materials eased, the two countries moved in step in their plans for producing supplies and relaxing controls on c o n s u m p t i o n . " W i t h decisions on such matters being made by the national agencies, however, there w a s little the Board could do except to advise caution. I t did, nevertheless, form a useful channel by w h i c h intended action o f this sort could be cleared b y the other c o u n t r y . I t also served, together with the military, as a useful brake upon the sometimes overeager desires of the civilian agencies, particularly in the United States, to relax controls too precipitously. T h e general improvement in the supply of raw materials which began the end of 1943 continued down to V - E D a y , M a y 8, 1945. Substantial expansion in the production of m a n y materials, particularly metals and minerals, had b r o u g h t such items out of the deficit column. M i l i t a r y requirements remained fairly stable throughout most of 1944. In the sixteen months from J a n u a r y 1944 to V - E D a y , the Board terminated its surveillance over 14 materials. In spite of this general i m p r o v e m e n t , serious shortages did persist in a number of important commodities. Some of these shortages remained as a result o f old supply problems. In other cases new developments had led to new difficulties. D u r i n g 1944 new materials were placed under formal allocation control: platinum, casein, animal glue materials, goatskins, and j u t e . J u t e had been under informal review and agreement since 1942, but global programming and allocations became necessary after the 1943 famine in Bengal had greatly reduced plantings for the n e x t year's crop. W i t h respect to old problems, m a n y of the sources of supply which, like the F a r E a s t , had been cut off b y enemy action remained inaccessible until after the war. T h i s was true o f rubber, hard "

Ibid. " . . . In general, it was the American agencies that were more guilty than their British counterparts in taking unilateral action. However, one of the earliest controversies the Board found itself in on this point concerned the British desire to reduce copper production in Rhodesia when the British copper situation eased sufficiently to make such action possible in the eyes of the British. Under the strongest pressure from the American side, the British withdrew from their original position and agreed to maintain Rhodesian output, the surplus from the British sources over United Kingdom requirements coming to the United States under Board Allocation." "History of the Combined Raw Materials Board," unpublished typescript 1946. See Board Decision No. 259.

11

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53

and lead, all of which took much of the Board's attention this period. Several less important items—antimony, natural kapok, and pyrethrum—also continued in serious short largely because of loss of sources of production.

New developments led to further difficulties. The favorable progress of the war itself produced a number of problems affecting the raw materials field and hence necessitated continued attention on the part of the Board. Preparations for D - D a y , and the advance on the European continent which followed, resulted in heavy demands on shipping; and the Board kept two materials, chromite and manganese ore, under allocation solely because of shipping demands. On the other hand, the German counterattack at the end of 1944 resulted in increased requirements for the military which in turn necessitated complete review by the Board of many raw materials which had been under allocation. Furthermore, the actual liberation of the Western European countries itself opened up new demands for supplies which cut across the whole raw materials field.52 I t was under such circumstances that the need for continuing international cooperation in order to maintain some balance and to handle new shortages in the raw materials field appeared necessary. It was with these factors in mind that the President of the United States and the Prime Ministers of the United Kingdom and Canada, having reviewed the work of the combined boards, announced on January 19, 1945, that the boards would be continued in operation for the duration of the war against Germany and Japan. 23 On that date the following public announcement concerning the Combined Raw Materials Board, the Combined Production and Resources " In the case of hides and leather, for instance, the Board reported the situation as follows: " I n hides and leather the overall situation worsened steadily during 1944. . . . Towards the end of 1944 the very substantial increases in United States military requirements accentuated the overall deficit, to which must now be added the essential needs of the Allied countries in Europe which have been or are to be liberated. I t is clear that the hides and leather problem will be one of the most serious facing the Board in 1945. T h e methods of cooperative purchasing and international distribution of hides worked out in 1943 continued in 1944 on a basis satisfactory to the participating countries. In addition, arrangements were made during the latter part of the year to bring U N R R A and the governments of Europe financing their own relief and rehabilitation requirements into close working arrangements with the B o a r d to ensure that the orderly flow of hides would continue as new claimants against the world's supply entered the picture." Third Annual Report C R M B , J a n . 16, 1945. u Canada was a member of the Combined Production and Resources Board and of the Combined Food Board.

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B o a r d , and the C o m b i n e d F o o d Board was made by the three Heads of Government: ι. We have followed with close interest the excellent work which the Combined Boards have done in coordinating our production and supply. These Boards were created for the purpose of combining our economic and industrial power during a period of increasingly intensive military preparation. Despite the fact that as the war progresses there will be a substantial diminution in demand for certain military items, studies indicate that there will be continuing global shortages of a limited number of products and materials which are necessary to military operations and to the maintenance of essential civilian economies. We expect the Boards, in the future as in the past, to continue to play their part in facilitating the prompt and adequate use of our economic resources for the common war effort. i . In addition new economic and industrial problems which may require common action are sure to develop before the end of hostilities. The power to act and make decisions in the economic sphere on behalf of our respective nations will remain in the duly constituted national agencies. However, the Boards can perform a very valuable additional service by providing a forum or focal point for consultation and the interchange of information and ideas on such common economic and industrial problems. 3. In their activities we shall expect the members of these Boards and the agencies of our governments which work with them to collaborate increasingly with representatives of other United Nations in the common interest. LIBERATED-AREA

PROGRAMS

P e r h a p s the most i m p o r t a n t development in the B o a r d ' s work in the period beginning in 1944 came as a result of the liberation of the W e s t e r n E u r o p e a n countries. T h i s development g a v e a new turn to the whole raw materials problem by presenting an additional group o f claimants to available supplies. A s liberation proceeded, these industrial countries were anxious to use their resources in foreign e x c h a n g e to conclude advance arrangements for industrial raw materials so t h a t supplies might begin to flow to their industires as soon as shipping and port facilities were again available. E q u a l l y urgent a t a later stage were the pressing needs expressed by the Eastern E u r o p e a n countries. In N o v e m b e r 1943, the representatives of the various Allied N a t i o n s had gathered at A t l a n t i c C i t y to set up the United N a t i o n s Relief and R e h a b i l i t a t i o n Administration ( U N R R A ) . T h e nations taking p a r t in this first conference were aware o f the dangers w h i c h

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might arise if advance planning and procurement to meet relief needs were carried on independently of the combined boards—the intergovernmental machinery which had been established to aid in coordinating the war effort in the economic supply field. Accordingly, they agreed that the C R M B and the other combined boards were to be made responsible for accepting requirements and then determining availabilities and recommending allocations for Allied countries whose liberation was anticipated. Under Resolution No. 17, which was adopted by this first conference of the U N R R A Council, requirements were to be presented directly to the combined boards in the first instance. None of the Allied countries had of course been liberated as yet. In view of this fact, it was agreed that U N R R A would consult with the appropriate government-in-exile or other recognized representatives and develop estimates of the requirements of all Allied countries to be liberated. However, five of the Allied countries—France, Belgium, the Netherlands, Denmark, and N o r w a y — w e r e determined to finance their own procurement programs without U N R R A assistance. In respect to the procurement programs of these five "paying countries," U N R R A continued throughout the war to reserve the right to review and make recommendations, in order to prevent unfair distribution of short supply items at the expense of the "relief" countries. 24 For the latter, U N R R A retained supply responsibility under its programs for Poland, Czechoslovakia, Greece, Yugoslavia, Albania, and, later on in 1945, Byelorussia, the Ukraine, and, in part, for China and Italy. T h e task of formulating liberated-area programs was not an easy one. While U N R R A and the paying governments began the difficult process of attempting to develop requirements and procurement arrangements in 1944, little occurred in the way of actual results until 1945. In the meantime, the military authorities, acting through the Combined Civil Affairs Committee (United States and United Kingdom) set up by the Combined Chiefs of Staff, were given the responsibility for procuring all civilian supplies during the first stages of liberation. This stage, estimated as of six months' duration, was meant to deal with disease and unrest in wake of battle. It was known as the "military period" as distinguished from The difficulties which arose through U N R R A ' s attempt to exercise this "monitoring" function are discussed in Chapter V I .

M

56

Combined R a w Materials Board

the succeeding civilian period when the n e w l y formed g o v e r n m e n t s , together with U N R R A , were supposed to take o v e r full responsibility for their own supplies. In actual practice the duration of the military period varied from country to c o u n t r y , and i n e v i t a b l y there was an o v e r l a p p i n g period when both civilian and military agencies were a t t e m p t i n g to get supplies through. B o t h the military and the Allied governments looked to the combined boards to review the liberated-area programs in terms of supply considerations, availabilities, and designation of s o u r c e s . " L i b e r a t i o n , moreover, a d d e d further complications to the a l r e a d y difficult task of allocating supplies. B y the close of 1944, F r a n c e , B e l g i u m , and Greece had been freed in the main from the e n e m y , while at the same time the N o r w e g i a n and the D u t c h g o v e r n m e n t s in-exile had begun to d r a w u p initial statements of their raw m a terials needs. In its third annual r e p o r t , the C o m b i n e d R a w M a terials B o a r d g a v e a realistic appraisal of the situation: These nations and U N R R A are fully cognizant of the overriding importance of maintaining the war effort unimpaired, and of the consequent need for a consolidated consideration of the impact of their new demands and the continuing requirements of the war effort on available supplies of scarce commodities. . . . The repercussions of this new development on the supply position were not serious in 1944 because no substantial deliveries were possible before the end of the year. It must, however, be clearly understood that the requirements of liberated Europe will, during 1945, represent an additional call on many categories of raw materials of which supplies will probably not be correspondingly increased. During the course of the war to date the non-occupied countries, and particularly the United States and the United Kingdom, have had unimpeded access to all overseas sources of raw materials outside Axis control. In many cases total consumption of imported raw materials to cover continuing requirements (even if on a reduced basis) plus new military needs has been greater than before the war. Europe was a net importer of many staple raw materials before the war. Her industries—and particularly those in Western Europe—are again emerging as claimants for overseas raw materials. It is unlikely that this new factor will immediately be balanced by a corresponding reduction in military requirements. Generally speaking, and until the Far E a s t is again available and labor and transport return to normal in other parts of the world, raw material production as a whole cannot be appreciably "Second Semi-Annual Staff Report, Combined Production and Resources Board, Dec. 3 1 , >943·

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57

expanded: Additional production in any one category would probably be at the expense of something else." This proved to be an accurate prediction. Down through the end of the war very few raw materials were made available to liberated areas. Such limited quantities as were allocated to European Allies were squeezed out of regular United States and United Kingdom programs. The major limiting factor in the raw materials field continued to be the overriding priority given to the military and to the essential supporting civilian requirements. Inadequate shipping, port, and transportation facilities as well as financial difficulties contributed to the situation. In addition, obstacles encountered in establishing new administrative and procurement organizations aggravated the whole problem of furnishing supplies to liberated areas. Contributing to this were jurisdictional difficulties which arose between the combined boards and the national agencies, particularly in the case of the United States. Jurisdictional difficulties with other United States agencies were not so serious in the case of the Combined Raw Materials Board as those which occurred with respect to other combined boards.27 The Board had been concerned from the beginning primarily with supplies outside the United States. It had refrained deliberately from arousing any conflicts with the national agencies. Nevertheless, trouble spots did develop, and these derived largely from liberatedarea programs. The Foreign Economic Administration ( F E A ) was created in September 1943 to tie together the foreign economic operations of the United States. This agency arose through the consolidation of a number of establishments including the Board of Economic Warfare and the Office of Lend-Lease Administration. The advent of liberated-area programming and allocations revived and brought into the open a latent jurisdictional conflict between the lend-lease and exporting licensing branches of F E A and the United States side of the combined boards. As far as the C R M B was concerned, the issues had been resolved to a certain extent by the inclusion of the Office of the Lend-Lease Administration, and later the Foreign Economic Administration, on the Board's Advisory Operating M

C R M B , Third Annual Report, Jan. 26, 1945. " Probably the Combined Production and Resources Board was the one most seriously affected. Such difficulties are discussed more in detail in Chap. V I , and in the case of the Combined Food Board in Chap. V I I I .

58

Combined R a w M a t e r i a l s B o a r d

Committee. But no basic agreement had been reached, nevertheless, concerning procedure to be followed with respect to export allocation from the United States. In August 1944, anticipating the importance of requirements of new claimants who were being freed from the enemy, the Combined Liberated Areas Committee was established. Its main function was to serve as a forum in which the United States and the United Kingdom might consider and decide nonmilitary economic policy questions of mutual concern relating to liberated areas. The F E A and the Department of State represented the United States. On the American side, the Committee operated through a United States Liberated Areas Committee, and a United States Supply SubCommittee of L A C , the latter being chairmaned by F E A . " In view of its key position on these committees and the fact that it had been given responsibility by law for the financing of all lend-lease operations, the F E A took the view that it should have the responsibility for developing the position of the United States in regard to its supplies to liberated areas. As the only supply agency on the L A C Supply Sub-Committee, the F E A , in other words, held that it should have the entire American responsibility with respect to requirements, screening them, determining the size of the claims to be presented to the War Production Board, and, on the basis of an over-all export quota secured from the latter, determining the breakdown by foreign claimants. Furthermore, the F E A contended that its position on liberated-area requirements should be the only basis upon which the combined boards should discuss them with the British side. Any modification in that position should be checked with F E A before any final decision was made. The C R M B recognized some of its own limitations, realizing that it was unable to evaluate requirements and recommend equitable allocations of all materials in the liberated areas. Strict adherence to the Atlantic City procedure for clearing all requirements with the boards would have involved a large volume of unnecessary paper work and delay in procurement of items not under regular surveillance by the Board. Accordingly, after much discussion on the United States side, a preliminary compromise was reached which called for setting up Reserved Commodity Lists of items over which " "Operating Problems in U. S. Machinery for Liberated Area Supply," July 1 $ , 1945, U. S. Bureau of the Budget.

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the boards would retain jurisdiction and the responsibility for reviewing requirements and recommending allocations. O n all other commodities, the Allied Governments and U N R R A were free to m a k e their procurement arrangements with the national supply agencies. In the final compromise which was reached on January 15, 1945, the Reserved C o m m o d i t y Lists were divided into two categories. In the case of " A " items, those for which the United States w a s a m a j o r exporter, the F E A was to determine the United S t a t e s position. In the case of " B " items, of which the United States w a s not a m a j o r producer, the combined boards were to take the responsibility. 2 ' Under the agreed procedure, the F E A undertook to screen stated requirements, present them to W P B , and advise the combined boards of the export allocations of "A" items which it obtained from the W a r Production Board. T h i s would provide a basis for an agreement with the United K i n g d o m side of the Board and for the issuance of a formal allocation by the Board to the liberated-area government concerned. I t is significant that the C R M B Reserved C o m m o d i t y L i s t as revised soon after January 15, 1945 showed only 5 o u t of 33 items as in the " A " category. Unlike the other combined boards, it was apparent that the Combined R a w M a t e r i a l Board's chief concern was with commodities outside the U n i t e d States. In connection with handling liberated-area programs, one significant organizational change took place in the Board. In 1943, together with the Combined Production and Resources B o a r d , it had set up a new Central Section to handle all liberated-area programs. H o w e v e r , while the Combined R a w Materials B o a r d operated on a staff basis the Combined Production and Resources Board, in contrast, operated on a committee basis. I t soon became evident that, in the Combined R a w Materials Board liberated-area problems and programs could not be separated from the d a y - t o - d a y work of the regular staff. In actual practice, therefore, liberated-area requirements were handled by the regular staff, while the C e n t r a l Section merely served as a means of handling mail controls, correspondence distribution, and files. T h e American side of C R M B added " CPRB-CRMB-FEA

194 ί·

Agreement on U. S. Procedure jor Liberated Area Programs, Jan. 15,

6o

Combined R a w Materials Board

a special officer to take primary responsibility for these programs and the British made a similar arrangement.' 0 V - E D A Y TO T E R M I N A T I O N OF T H E BOARD

Military supplies were given top priority throughout the war, and other policies were dependent upon military procurement. T h u s the progress of battle determined the whole pattern of activity of all belligerents. Nevertheless, serious planning for relaxation of national controls had begun in both the United States and the United Kingdom long before V - E D a y . In the summer and fall of 1944 such planning had reached an advanced stage, particularly in view of the success being attained by Allied arms. Back of this whole move toward de-control, especially in the United States, was the longstanding view that governmental restrictions should be lifted as quickly as possible so that private enterprize and initiative might function effectively again. In the early fall of 1944 victory in Europe appeared imminent, and the W a r Production Board set up a formal committee to proceed with actual plans for de-control.' 1 While military reverses in France again shifted effort to all-out war production, attention was given, nevertheless, to measures looking toward de-control and reconversion. These domestic plans naturally were related in a number of ways to the international supply situation. In Great Britain, likewise, the move to terminate restrictive arrangements, both domestic and international, was strongly advocated. T h e reestablishment of foreign trade was essential to economic survival. M a n y of the commodities subject to the Combined R a w Materials Board's allocation came from British colonies and dominions. M u c h was to be gained by private business, and through commercial advantages generally, by termination of all » See C h a p . V I . T h e W a r Production Board Committee on Demobilization of Controls Following Victory in Europe was appointed on September 5th. This coordinating committee under the chairmanship of S. W . Anderson, Program Vice Chairman, was created to study and make detailed recommendations with respect to relaxation of controls. In turn, fourteen subcommittees were assigned the tasks of developing plans on various phases of the controls. Each of these subcommittees filed a report with the coordinating committee. In most cases their recommendations were accepted, and the report of the coordinating committee embodied those recommendations modified where disagreement existed. On October 3, the War Production Board unanimously approved the general policy as outlined in the report of the Committee on Demobilization of Controls. See Development of the Reconversion Policies of the War Production Board, April 1943 to "January 1945, Historical Reports on W a r Administration: W a r Production Board, Special Study No. 15.

11

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6i

international raw material controls immediately after the war was over; and the exchange situation itself would have benefited from such moves. Victory in Europe, however, did not substantially alter the need for supplies. In the United States, the Director of War Mobilization and Reconversion pointed up the situation aptly when he reported on July ι , 1945: In this v a s t transfer of men and supplies, we shall m o v e 3 million troops out of E u r o p e and m a n y of them half w a y around the world, together with the necessary material and supplies. Soon we shall h a v e nearly 6 million men in all branches of the service in the actual theatre of combat. M a n i l a , our large a d v a n c e base, is 6,200 miles from S a n Francisco and 1 4 , 0 0 0 miles from the m a j o r E u r o p e a n ports. T o land on the E u r o p e a n Continent, our main force h a d only to cross the English C h a n n e l ; in contrast, M a n i l a is 1 , 7 6 0 miles from T o k y o . In w a g i n g w a r against J a p a n , w e must build airfields, fuel depots, road and rail lines; we must clear or build harbors; w e must construct power plants and power lines; we m u s t provide barracks; w e must build hospital facilities larger than the combined medical resources of N e w Y o r k and Chicago.

. . . Essentially y the tasks of the period ahead will be to assure priority for munition production, to preventflightfrom war production, and to maintain a strategic margin f or emergencies The defeat of Germany had little effect on the availability of crucially needed raw materials. These included rubber, tin, hard fibers, kapok, and others from the Far East. In addition, tight supply situations developed in lead, antimony, and hides. Shipping, in fact, became even more stringent, once redeployment from Europe to the Pacific theatre of war began in full swing. Military production programs themselves continued at a high level, while at the same time the backlog of urgent needs of various Allied civilian economies became more pressing. Actually, only one item, zinc, was removed from the Board's Reserved Commodity List between V - E Day and V-J Day. However, with the sudden and somewhat unexpected end of the war with Japan, the Board, in line with decisions of the national agencies, proceeded to take drastic action toward de-control. Controls over two-thirds of the raw materials under Board surveillance were immediately eliminated. B y September 5, formal " The Road to Tokyo and Beyond, Third Quarterly Report by the Director of War Mobilization and Reconversion, July I, 1945.

62

Combined R a w Materials Board

agreement had been reached to reduce the Reserved C o m m o d i t y L i s t to thirteen m a t e r i a l s : " Copal Gum Jute Newsprint Cordage fibers Lead Pine rosin Hides, skins and leather Lumber Rotenone Hog bristles Mica Rubber Tin« T h e move towards de-control was particularly sharp in the case of the United States. Overnight, the United States economy swung to full demobilization and expansion for peace. Figures on w a r production give some clue to the extent of the abrupt switch-over which took place. In terms of annual rates, the change in munitions production was as follows: First half of 1945 $56 billion Just after VJ-day 18 billion End of 1945 8 billion"4 B y October 3 1 , 1945, the W a r Production B o a r d had left in force only 55 of a peak total of 650 orders and schedules over materials and supplies. Its former priorities system had been replaced by a new, much simplified s y s t e m , and its Controlled Materials P l a n had been eliminated entirely. T h e s e changes were indicative of the bold steps taken to unwind quickly the extremely complex war economy which had been created. B a c k of such steps were the pressures of interests clamoring for a return to the prewar pattern of economic activity and private profit. I t must be recognized that wartime control had been in direct conflict with the traditional policy of the United States which called for freedom of foreign as well as domestic enterprize and trade. T h e G o v e r n m e n t , no less than business enterprize, stood solidly for these principles. Soon after V - J D a y , as an example, the B o a r d encountered opposition from the D e p a r t m e n t of S t a t e with respect to hides, leather, and cordage, some of these materials being produced in L a t i n American countries. " T o the extent that the controls tended to put some restraint on the further development of warborn L a t i n American facilities, the S t a t e D e p a r t m e n t felt that they were inconsistent with U . S. L a t i n American policy, despite the " See Minutes of the Operating Committee, Sept. $, 1945. M This includes all costs, except subsistence, for armed forces in this country and overseas, such as maintenance, repair, clothing, plus experimental production. Three Keys to Reconversion, Fourth Quarterly Report by the Director of War Mobilization and Reconversion, Qct. ι , 194J.

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fact that the facilities in question were uneconomic and would be ruined by the termination of all controls."" As the war drew to a close, business interests which had been restrained during most of the war assumed a more vigorous role in the national consideration of international policies. This was the case in all countries, and frequently these commercial interests were in conflict with the needs for rehabilitation as well as desperate consumer requirements. Accordingly, the Board was beset by demands for scarce materials at any cost for resale in unrestricted markets. There was scant regard for international needs and commitments. In the United States, the demand was for newsprint, lumber, jute, burlap, rotenone, and pine rosin. Belgian commercial interests, on the other hand, in the case of gum copal which was produced entirely in the Belgian Congo, pressed to reestablish exclusive trade channels through their own dealers and processors. Rubber and tin presented a complicated situation, with the Dutch and the British eager to restore their prewar favorable positions of control. "In lead, the national and international supply authorities were directly confronted with the opposition of a small and cohesive group of American and British Empire nationals who between them controlled practically the entire available supply of over-seas lead." 36 In addition to these and many other pressures the Board after V-J Day was affected by the confusion and uncertainty which existed throughout the world. The national supply authorities themselves were not entirely clear as to the next steps to be taken, and in many countries it was an open question as to how far and how long various government controls would remain. Claimants before the Board were particularly interested in making unilateral supply arrangements with neutrals who were in a favorable economic position. Supplies from captured enemy territory raised further complications. Arrangements with the occupation authorities both in Europe and in Japan presented almost insurmountable difficulties. Unrest in such parts of the Far East as French Indo-China and the Dutch East Indies, and the general disorganization and chaos which characterized vast areas throughout the world, made it almost impossible to obtain information upon which to base decisions. * "History of the Combined Raw Materials Board. "Ibid.

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Combined R a w Materials B o a r d

Despite the various pressures and difficulties, or perhaps because of them, the United States Government realized that it would be necessary to retain some export-import controls. Because of the inadequacy of supplies of certain commodities throughout the world, the Government recognized that it would have to undertake to distribute such supplies fairly among the various foreign claimants as well as its own people. This was essential in order to prevent excessive demands which would either generate price pressure, or deprive some economies of essential materials and supplies. Some export controls to allocate foreign purchases, in other words, would have to be kept in force. This policy as set forth by the Director of War Mobilization and Reconversion, moreover, was not a one way proposition. The United States also had obligations not to preempt world supplies of scarce materials. This meant, in the Director's view, that it would be necessary to collaborate with other countries, through the combined boards and in other ways, in apportioning world supplies of scarce goods such as leather and tin. In order to carry out these international undertakings, it would be necessary to retain some import controls, including Government purchase of foreign supplies." The governments of the United States and the United Kingdom found little trouble in agreeing on basic objectives which were to govern the Board's activities after the cessation of hostilities. The Board was a wartime agency, and there had been complete accord all along that as such it would be discontinued at the earliest practicable date. T h a t controls over a few raw materials would need to be maintained after disbandment was also clearly seen. As the situation actually began to emerge it was realized ever more clearly that the Board's help would be needed in bridging the transition to peace and that this effort would require the close cooperation of various other United Nations." " Fourth Quarterly Report, Oct. i , 1945. M "Despite the fundamental differences in the nature of the economies of the United States and the United Kingdom, they found no difficulty in agreeing on the basic objectives and policies that were to govern the Board's activities after the end of the war. It was agreed that all Board Review and controls should be terminated at the earliest date permitted by supply-demand balance; that controls should be applied only to materials of major importance except in a very few special circumstances; that with the end of the war, the over-riding priority of United States and United Kingdom requirements, which had been justified on the basis of military and supporting civilian programs, also came to an end; and that the requirements of liberated Allies should be considered on the same basis as the re-employment and

R e m a i n d e r of I t s Existence

65

Both sides were in full accord that this bilateral agency should continue to function only until arrangements for broader international representation in the handling of raw materials in serious short supply could be instituted. Such arrangements were to be worked out eventually. But even before the end of the war the Board had taken steps in the direction of bringing other Allied countries into closer working relations with particular raw materials problems. Committees or working groups on which major producing as well as major consuming countries were represented had been established in the case of rubber, hides, skins and leather, pulp and paper. While the Board had helped to organize these groups and maintained close working relations with them, they were in reality quite independent of it. In the case of the Timber Working Group and the Rosin Working Group, both of which met in London, the United States was not even represented as a member. In any event, these earlier developments foreshadowed the pattern of cooperation which was to emerge with respect to some raw materials after the Board had come to an end. The development of basic United States policy dealing with all the combined civilian boards during the transition period was the work largely of the inter-agency Executive Committee on Economic Foreign P o l i c y . " This committee, under the leadership of the Department of State, reconciled and coordinated the views of the various national agencies concerned. It achieved agreement on the policies and procedures which were to govern participation in arrangements for continuing international controls of scarce supplies. In October 1945, agreement on these matters, together with the decision to terminate three of the boards (but not including the Combined Food Board) was reached with the governments of the United Kingdom and Canada. In the case of the Combined Raw Materials Board in particular, discussions had been carried on between both sides for some time before formal agreement on basic policies and procedures had been reached by the two governments. The two staffs of the Board had been exploring intensively with the agencies concerned, as well as rehabilitation requirements of the United States and the United Kingdom." "History of the Combined Raw Materials Board." " The role of the Executive Committee on Economic Foreign Policy ( E C E F P Document 119/45) is analyzed in Chap. V I I I .

66

Combined Raw Materials Board

with representatives of industry and trade, the practicability of arrangements for retaining allocations over certain commodities in short s u p p l y . Once the formal policy agreement was announced, accordingly, representatives of the Combined R a w Materials Board and diplomatic officials of the D e p a r t m e n t of S t a t e and the British E m b a s s y m e t together. Because of its close ties with the Board and inasmuch as C a n a d a w a s also one of its members, representatives of the C o m b i n e d P r o d u c t i o n and Resources Board and the C a n a d i a n E m b a s s y also participated in this meeting. A t this preliminary meeting there were explored the possible pattern o f future arrangements, problems which m i g h t be expected to arise with respect to specific commodities, and possible membership of committees to be formed once the boards were disbanded. A f t e r this exploratory session, the boards were asked to report their specific recommendations to the diplomatic officials. F o l l o w i n g this preliminary session (which took place on O c t o ber 27), several meetings were held to crystallize specifically w h a t short-period international commodity provisions were to be carried on after official termination of the boards. T h e opinion of the t w o boards on these m a t t e r s was recorded at a j o i n t meeting held on N o v e m b e r 13. 4 0 O n general considerations, the j u d g m e n t of the boards was as follows: (i) that the objective was to arrange for the continuance of international allocations for certain commodities on a short term basis while extraordinary conditions of shortage persisted. This could best be affected by maintaining existing Commodity Committees into 1946 on an autonomous basis, widening representation on them as necessary. The purpose of these Committees would be to agree on international distribution arrangements during 1946, or for such part of the year as the arrangements proved necessary. While they would inevitably have to pay attention to immediate questions of production and consumption in order to arrive at allocations, they would not deal with longer range considerations of commodity stabilization, which would fall to be handled elsewhere; (ii) that in putting the proposals forward the emphasis should be on the continuance in certain fields of the type of work already being done by the Boards, but that (iii) any appearance of the persistence of Anglo-American domination should be dispelled; (iv) that no Committee should be set up which did not have a fair " C P R B and C R M B International Allocations Arrangements in 1946," Note of Joint Meeting of the U.S. and U . K . sides of the Boards held on Nov. 13, 1945.

40

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prospect of successful operation. This meant that simple shortness of supply would not be the only criterion in continuing a Commodity Committee or formalizing into a Committee existing informal collaboration. There must also be confidence that the governments represented on a Committee would have sufficient control over the commodity concerned, and that the countries principally affected would be capable of collaborating on a Committee. O n the above basis the boards recommended that the following five commodity committees should be retained or formalized for: rubber, tin metal, [hides and leather, broad w o v e n cotton goods and cotton y a r n , and coal. T h e question o f representation on these c o m m o d i t y committees w a s considered a t length. I t was agreed t h a t , if the basic criterion was workability, no single principle, such as m a j o r producers and m a j o r consumers, could be applied as a y a r d s t i c k to all the committees. 4 1 On the T i n M e t a l and R u b b e r C o m m i t t e e s , representation consisting o f m a j o r producers and m a j o r consumers would probably work. T h e C o t t o n Textiles C o m m i t t e e , on the other hand, would operate best if confined to producing countries h a v i n g or likely to h a v e in the near future an exporting surplus. T h e Hides and Leather C o m m i t t e e would only work if confined to those consuming countries h a v i n g demands on hides entering the foreign trade. In all cases it would be necessary that countries represented should unreservedly accept the conditions of collaboration and be prepared freely to disclose their position. O n this same score, it was considered best in the case of some countries to first form a committee and let the country itself take the initiative in a p p l y i n g for membership. T h e r e was concensus, nevertheless, t h a t the c o m m o d i t y mittees should contain the following specific representation: Rubber·. United States, United Belgium, Canada.

Kingdom,

France, The

com-

Netherlands,

" T h e Board's ( C R M B ) proposals diverged from the procedural recommendations o f E C E F P Document 119/45 t o ( he extent that the Board urged, in effect, that practicability or workability be added as a criterion, in the establishment of committees and in the determination of committee membership. This recommendation was in reality an extension of one of the central guiding principles that had evolved from the C R M B ' s own experience. N o small part of the Board's success was due to the flexibility of its approach and its willingness to adapt its arrangements to fit the individual circumstances affecting each particular commodity with which it was dealing. This flexibility of course produced a seríes of dissimilar, ad hoc supply arrangements rather than a uniform set of procedures and working rules. T h e C R M B ' s operations however met the all-important pragmatic test, in that they had in fact worked successfully." "History of the Combined Raw Materials Board." 41

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Combined Raw Materials Board

Tin Metal: United States, United Kingdom, France, The Netherlands, Belgium, Canada, possibly China. Hides and Leather·. United States, United Kingdom, France, Belgium, Denmark, The Netherlands, Norway, Canada, Sweden, Switzerland, Spain, UNRRA, together with Portugal and Turkey, who had already been invited but had not accepted membership. Broad Woven Cotton Goods·. United States, United Kingdom, France, India, Canada, with Brazil and Mexico as least as observers. Coal·. United States, United Kingdom, and perhaps Canada. Europe was broadly covered by the European Coal Organization. The question of location for the committees was also discussed thoroughly. While it was felt that any committee might at a later date be moved to London, Paris, or elsewhere, if that proved convenient, it was agreed that at least initially all committees be located in Washington. Most if not all of the Allied countries had representatives in Washington who were familiar with the data and the character of the work. This advantage was one which could not easily be overlooked. Furthermore, flexibility was to be assured by leaving to the autonomous desire of each committee the question of selection of its chairman and secretary. Finally, at this joint meeting of the boards, the last steps for liquidating the two boards were outlined. It was agreed that when the draft announcement regarding the winding up of the boards had been accepted and was ready for circulation, the Board members would invite those countries which had been associated in the work—primarily the liberated countries of Western Europe—to a general meeting to explain the commodity arrangements in more detail." Before this last general meeting with the "customers" of the boards took place, the United States representatives on the C R M B Advisory Operating Committee convened for a special session. Much of the time of this session was given over to presentation of the proposed intergovernmental agreement to terminate CRMB and to establish international allocating committees. The group of representatives from the interested United States agencies also considered proposed means for the coordination of their agencies with the new commodity committees about to be initiated. 41

In order to formalize their position, it was agreed that the new committees should meet before the end of the year and recommend to the boards that their work be continued, with supplemented membership as necessary, into the new year. Note of Joint Meeting held on

Nov. 13, 1945.

Remainder of Its Existence

69

One matter of peculiar significance—namely relations with the U S S R — r e c e i v e d some further clarification at this meeting. T h e record, on this score, reveals the following: The U.S.S.R. has not heretofore participated in any of the committees of the Combined Boards. However, Russia will be advised through diplomatic channels of the establishment of the allocation committees and will be invited to apply for membership on any committee in which she may have a major interest, but with the qualification that she would freely exchange all necessary data upon which the successful operation of any committee must depend.4* T h e joint meeting with the "customers" of the boards took place on December 6, 1945. In addition to the three countries there were present representatives from France, Belgium, Denmark, the Netherlands, Norway, and U N R R A . 4 4 T h e various agreed upon proposals were outlined to the representatives and were received favorably by them, but of course not acted upon officially. Shortly thereafter, on December 10, the official announcement by the President of the United States and the Prime Ministers of the United Kingdom and Canada terminating the two boards as of December 31 was released. This statement took the opportunity of paying tribute to the boards for their outstanding achievements "in the full and equitable utilization of resources for the effective prosecution of the war." I t pointed out, however, that there remained a few commodities in global short supply which called for continued attention. " F o r cotton textiles, tin, rubber, and hides and leather it is proposed that . . . committees . . . should be continued during such period as the shortage of supply in relation to needs renders necessary. . . . In the case of coal, there exists an organization in respect of Europe, but special considerations make it desirable that, for the time being, the coal committees in Washington and London now under the Boards continue in their present form." Meetings of the proposed commodity committees which were to "Memorandum for Meeting of U . S. Members of C R M B Operating Committee, Dec. J, 1945. In a diplomatic note sent to Moscow on December 7, which was approved by the Governments of the United Kingdom and Canada, the United States informed the Soviet Government in detail the arrangements proposed for the allocation after the end of 1945 of those particular commodities which remained in short supply. The Soviet Government's observations and interest were invited in the work of the committees. N o mention of the qualification referred to above was made in the note. 4 4 Minutes of Joint Meeting, in Executive Session, with Representatives of Liberated Countries and U N R R A ( C P R B - C R M B Minutes 9), Dec. 6, 194J. 41

ηο

Combined Raw Materials Board

be continued took place during the remaining weeks of December. B y the end of the month all of the governments initially invited to membership on the committees had accepted and the committees had worked out their particular terms of reference. A t the final meeting of the Board on December 28, these terms of reference were recorded and the new committees were thus launched upon the troubled waters of the postwar scene.

Part 11 T H E COMBINED SHIPPING ADJUSMENT BOARD III: The Setting H E P R O B L E M of supply in modern warfare hinges in large measure upon the availability of shipping. For while invention has altered conceptions of military strategy and the location of battle fronts, it has at the same time increased manyfold the amount of equipment and supplies needed for the successful prosecution of war. Unlike other techniques of World War I I , ocean shipping had changed very little since World War I. The speed with which new ships could be built by mass production had come as a startling revelation. But essentially, these were slow vessels which in convoy still averaged six or eight knots per hour. 1 And the protection of such ships was one of the main tasks of both naval and air forces. At the beginning of World War I I , little concern existed in the United States over availability of shipping. At the outbreak of the war, the United States had a merchant fleet of approximately 8,000,ocx) tons, four times as large as that of 1914 Moreover, the Merchant Marine Act passed by Congress in 1936 had charged the Maritime Commission with the responsibility of fostering a merchant marine adequate to serve as an auxiliary in the United States national defense and to transport a substantial portion of its waterborne commerce. Under this Act the Maritime Commission had launched a ten-year program involving the construction of 500 fast cargo ships. As late as 1940, Admiral Land, Chairman of the United States Maritime Commission, reassured those concerned with the defense program that there was no need "to worry much about shipping."' 1 Merchant Shipping, June 23, 1944, Senate Report No. 10, Part 18, "Investigation of the National Defense Program."

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Combined Shipping Adjustment Board

T h e early reaction of the American public and its chosen representatives to the outbreak of the European conflagration was largely one of negativism. Ever since Germany had started to rearm in 1935, neutrality had been the major policy of the United States in international affairs. T h e Italian attack upon Ethiopia, German occupation of the Rhineland, Axis intervention in Spain, the Japanese seizure of Shanghai, the seizure of Austria, the march into Czechoslovakia, and the invasion of Poland leading to war itself—these successive events, while they had stirred the complacency of Americans, had not shaken their conviction that war could be avoided by the United States. T h e Neutrality A c t of November 4, 1939, was the expression of a nation convinced that it could stay out of the war. In a real sense it was the culmination of preceding neutrality legislation whereby the export of munitions was banned, the purchase of bonds of belligerents forbidden, and a "cash and carry" policy instituted. B y the Act of November 4, 1939, and the Presidential Proclamations issued under it, United States vessels were forbidden to enter combat zones including the waters of western Europe. In keeping American vessels and citizens from involving the United States in hostilities Congress undoubtedly mirrored the then prevailing sentiments of public opinion. While no nation at war remains complacent, the early phases of the conflict found Britain, too, unprepared psychologically. During the fall of 1939 and the winter which followed, the whole Western front remained inactive. Shipping, the life line of the British Isles, was not seriously menaced. German submarines were active in the North Sea and in more immediate waters, but the problem which they presented was one which had been coped with successfully during the World W a r I. With the fall of France and in the subsequent period, however, the situation was drastically altered. N o t merely were the British deprived of the use of the French n a v y , but the Italian fleet was also brought in on the side of the Axis. Of even greater significance was the conversion of Atlantic coast ports into U-boat bases from which support by the Nazi Luftwaffe was feasible. T h e British loss in this fateful period approximated half a million tons of shipping ' U n i t e d States Maritime Commission, Press Release, No. 774, Dec. io, 1940.

T h e Setting

73

per month, a loss which might have spelled disaster without effective coun termeasures. 1 It was largely under Lend-Lease arrangements that steps were first taken to offset this drain upon British shipping. Prior to that, and shortly after the outbreak of the war, a certain volume of merchant shipping under the United States flag had been purchased outright by the British Government. Other operations involved the transfer of ships under the United States flag to Panamanian registry. 4 On September 2, 1940, the exchange of fifty old destroyers for bases in the Caribbean took place. The Lend-Lease Act was signed by the President on March 1 1 , 1941. It is significant that on the following day, March 12, the Prime Minister wrote to Sir Arthur Salter giving him the terms of reference of the British Merchant Shipping Mission in the United States, a mission of which Sir Arthur was the head. From the British point of view, the reasons for this move were fairly obvious.* Sinkings had taken a sharp upward turn, although they had not attained the scale which they were later to assume. The Battle of the Atlantic, however, had really begun. It was realized that the war might depend upon the speed with which United States resources could be made to supplement those of the British in combating the menace to the link with the Western Hemisphere.· From the British position, the passage of the Lend-Lease Act opened up an entirely new phase in the war supply situation. While at the time actual construction of merchant shipping in the United States was only at a rate of 1,000,000 tons per annum, the LendLease Act made possible allocations on a scale far beyond anything previously contemplated. London realized that among all British needs shipping was the most pressing. United States assistance in merchant tonnage was imperative. T o achieve this it was thought necessary to convince the Administration in Washington of the gravity of the British situation. It appeared essential, therefore, that * United States Shipping and the War, by Joseph W. Scott, Jan. 15, 1942, Foreign Policy Association. 4 Soon after the war broke out in Europe, the United States Lines were authorized by the Maritime Commission to transfer their ships to a Norwegian company. • See statement, "Notes: Reference letter of George Fort Milton to Sir Arthur Salter, dated February 2, 1943," unsigned document prepared by British Merchant Shipping Mission, attached to memorandum, "Initial Stages in History of Combined Shipping Adjustment Board" (Bureau of the Budget). 'Iiid.

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Combined Shipping Adjustment Board

the general shipping problem in its widest aspects be explained to, and kept before, the United S t a t e s G o v e r n m e n t . 7 Accordingly, Sir A r t h u r Salter and his Mission were charged with the responsibility of keeping the U n i t e d S t a t e s G o v e r n m e n t informed of measures being taken b y the British to insure fullest use of merchant tonnage in the Allied service and to emphasize to the Americans the various w a y s in which they could add to tonnage at Allied disposal and help in using t h a t tonnage to the m a x i m u m a d v a n t a g e . In addition, the Mission w a s charged with the supervision of technical matters arising from the program of merchant shipbuilding which had been u n d e r t a k e n by the U n i t e d K i n g d o m in the United States. From the United States v i e w p o i n t , the L e n d - L e a s e A c t m a r k e d a distinct departure from previous policy. In his first report to C o n gress on Operations Under L e n d - L e a s e made j u s t ninety d a y s after the A c t had been passed, the President w r o t e : The main object of this Act is to promote the defense of the United States by supplying material aid to those nations whose defense is vital to our defense. Unlike prior methods, it focuses directly on the aid to be rendered rather than upon the dollar sign ultimately to be translated into war material. . . . Protection and furtherance of our own defense is also assured by the Act by reason of the fact that this Government—particularly the War and N a v y Departments—controls and merges our own production and procurement program with that on behalf of those nations whose defense vitally affects ours. By a fused production and procurement program based on as high a degree of standardization of our own and foreign specifications as possible, we are in a position sooner to have a productive capacity that can outstrip our potential enemies. . . . 8 T h e C h i e f E x e c u t i v e ' s appraisal of the situation was revealing in its frankness: By the turn of the year 1940, the British commitments in this country for defense articles had reached the limit of their future dollar resources. Their striking power required the assurance that their munitions and equipment would steadily and certainly be augmented, not curtailed. The will of our people, as expressed through the Congress, was to meet this problem, not only by the passage of the Lend-Lease Act, but by the appropriation of 7 billion dollars made on March 27th of this year to carry out this task. . . . T o be effective, the aid rendered by us must be many-sided. Ships Ibid. • Operations Under tie Lend-Lease Aet, June 11, 1941, Senate Doc. 66. 1

T h e Setting

75

are necessary to carry the munitions and the food. We are immediately making available to Britain 2 million gross tons of cargo ships and oil tankers. But this is not enough. Adequate shipping for every day to come must be reasonably assured. Since the Appropriation Act was passed, 550 million dollars has been allocated for the construction of new ships under the Lend-Lease Act. Contracts have been let and the new ways required to build these ships are now nearing completion. Allied ships are being equipped by us to protect them from mines, and are being armed by us to protect them as much as possible against raiders. Naval vessels of Britain are being reparied by us so that they can return quickly to their n a v a tasks. 9 CONTROL

OF

SHIPPING

IN

THE

UNITED

STATES

BEFORE

PEARL

HARBOR

T h e problem of shipping became of considerable concern to a n u m b e r of leading g o v e r n m e n t officials during the defense period. A s early as J a n u a r y 24, 1941, A d m i r a l L a n d , Chairman o f the M a r i t i m e Commission, discussed " t h i s entire ocean shipping p r o b l e m " with interested heads of government departments. 1 0 T h e foreign flag tonnage tied u p in U n i t e d States ports was discussed with Secretary o f S t a t e H u l l w h o advised that the whole project o f ocean shipping be p u t into the hands of one man (or agency) to coordinate efforts o f all interested governmental agencies. T h e same general situation w a s gone over with Secretary of C o m m e r c e Jones, w h o agreed t h a t m a j o r problems of ocean transportation should be placed under one head and that the logical agency for this w a s the M a r i t i m e Commission. Admiral L a n d also talked the m a t t e r over with M r . K n u d s e n , then Director General of the Office of Production M a n a g e m e n t . M r . Stettinius and M r . Donald Nelson had likewise been given the o p p o r t u n i t y to express themselves. 1 1 T h e r e appeared to be little difference of opinion among all of these officials concerning the main recommendation which Admiral L a n d made to the President: t h a t the C h a i r m a n of the Maritime C o m mission (Admiral L a n d ) be appointed under E x e c u t i v e Order as Director of Ocean Shipping with instructions to utilize the M a r i time Commission and its s t a f f in carrying out all problems of ocean transportation. 1 2 • Ibid., Letter of Transmittal. (Italics mine.) Memorandum, Admiral Land to the President, Jan. 24, 1941 (F.D.R. Library). 11 Nelson to the President, Jan. 25, 1941; Stettinius to the President, Jan. 29, 1941 (F.D.R. Library). u Memorandum, Admiral Land to the President, Jan. 24, 1941 (F.D.R. Library). 10

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Combined Shipping Adjustment Board

T h e case was stated very explicitly by Admiral L a n d when he wrote to the President: The Commission has made a careful study of its power to regulate the utilization of American-flag vessels in foreign commerce. It has come to the conclusion that there are no existing statutory provisions adequate to devise and implement control of shipping facilities in foreign commerce, i.e., priorities of space and shipments, routes, discharging facilities and storage space, repairs to merchant ships, and the direction of the use of tonnage. Prior statutory provisions on these subjects have either been expressly repealed or have lapsed. If you approve, such a statute or statutes should be enacted placing in the hands of the United States Maritime Commission the authority to control our foreign commerce ocean shipping so as to aid in the national defense program. A draft of such a statute is being prepared and can be submitted for your consideration if you so direct. 1 ' W h e t h e r Admira! L a n d seriously contemplated the passage of such a statute or statutes, or whether the W h i t e House t h o u g h t t h a t conditions were not propitious to press for Congressional action on such a delicate matter as shipping control are matters o f conjecture. T h e fact remains that L a n d in his discussions with officials other than the President referred constantly not to statutory e n a c t m e n t b u t to the need for an E x e c u t i v e Order. I t was largely as a result o f L a n d ' s encouragement that Knudsen had such an order drafted. H o w e v e r , when examined by the A t t o r n e y General and the B u r e a u of the B u d g e t , the proposed Order was found to be not "legally or administratively feasible." 1 4 Accordingly, a much w e a k e r letter from the President to Admiral L a n d was substituted. In it the President asked Admiral L a n d " t o advise and assist me in assuring that our ocean shipping needs are cared for in an expeditious and effective manner." 1 6 In commenting on this letter Cordell H u l l touched upon the main point in the situation: " I t m a y be that the M a r i t i m e Commission can, b y voluntary cooperation of ship owners and operators bring about the utilization of tonnage to take care of these [defense] cargoes. I f not, I should think it w o u l d become necessary to secure the required power whereby shipping could be directed as vitally needed." 1 6 M r . Knudsen's views, needless to u

Ibid.

Memorandum for the President from Harold D . Smith, submitting draft of a letter to Admiral Land, requesting his assistance in coordinating our ocean shipping facilities, Feb. 7, 1941 (F.D.R. Library). u Letter from the President to Admiral Land, Feb. 10, 1941 (F.D.R. Library). ' · Letter to the President from Cordell Hull, Feb. 19, 1941 (F.D.R. Library). w

T h e Setting

77

say, were similarly skeptical. But apparently the time was not ripe for decisive action in regard to shipping administration. The task of accumulating two million tons of shipping to aid the British occupied the attention of the Division of Emergency Shipping of the Maritime Commission. The establishment of this Division was one of the first steps taken in the development of a shipping control program by the United States. In his letter of February 10 the President had asked Admiral Land to take suitable steps to insure maximum utilization of merchant shipping in the defense effort. 1 7 As a result, the Maritime Commission proceeded to set up and to staff a Division of Emergency Shipping. The personnel of the Division was recruited from the shipping industry and consisted originally of but ten people. During the early months of the Division of Emergency Shipping, its activities were rather restricted. Like the Maritime Commission itself, the Division reflected the business-as-usual attitude so prevalent in shipping circles generally. It kept daily contact with a number of the shipping companies in an attempt to promote the defense effort. But at this time, there was little by way of direct supervision of the shipping industry such as developed later. No field staff was in existence and no systematic records were kept. B y and large, business was conducted on an informal basis. 18 During this period the Maritime Commission carried on with little assistance from other federal agencies and pretty much on the basis of its own knowledge of the shipping situation. It tried to satisfy requests for export space as demands from private shippers came in. On the import side the Commission made suggestions to the various shipping companies on the basis of its own knowledge of the situation. 1 · On the problem of coordinating land and ocean transportation movements, the Commission had cooperated earlier in a general way with Mr. Budd's Division of Transportation which was one of the less active sectors of the National Defense Advisory Commission. 20 Notwithstanding the existence of this loose and informal arrange17

Letter to Admiral Land; see also United States Maritime Commission, Report to Congress for the Period Ending October 25, ¡94J. " Conference with Creighton Pect, Maritime Commission, May 21, 1941. » Ibid. "Ibid. See also Lawrence Radway, "Advisory Commission to the Council of National Defense" (Bureau of the Budget), manuscript, 1942.

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Combined Shipping A d j u s t m e n t Board

m e n t , a n u m b e r of agencies were exerting efforts w h i c h were later to become crystallized into a m o r e s y s t e m a t i c p a t t e r n of administration. O n the i m p o r t side the D i v i s i o n of E m e r g e n c y S h i p p i n g w a s b e g i n n i n g to receive suggestions from the Office o f P r o d u c t i o n M a n a g e m e n t concerning cargoes w h i c h should be lifted. T h e s e were to d e v e l o p e v e n t u a l l y into extensive i m p o r t lists. S i m i l a r l y , the M a r i t i m e C o m m i s s i o n received requests from the R e c o n struction F i n a n c e C o r p o r a t i o n in connection w i t h its stockpile p r o g r a m . O n the e x p o r t side, too, the M a r i t i m e C o m m i s s i o n w a s s u b j e c t to a n u m b e r of pressures. F r o m time to time the S t a t e D e p a r t m e n t , as well as the A r m y and N a v y , interested itself in shipping m a t t e r s . O f greatest i m p o r t a n c e were the requests for assistance from the L e n d - L e a s e authorities and from the British P u r c h a s i n g M i s s i o n . T h e C o o r d i n a t o r of I n t e r - A m e r i c a n A f f a i r s w a s concerned with m a i n t a i n i n g trade w i t h the other republics, and for this purpose he o r g a n i z e d an I n t e r - A m e r i c a n S h i p p i n g C o m m i t t e e to channel requests to the M a r i t i m e Commission.* 1 A l l these negotiations were on an i n f o r m a l basis, and the M a r i t i m e C o m m i s s i o n w a s , o f course, still s u b j e c t to the influence of p r i v a t e s h i p p i n g interests w h i c h were e n j o y i n g a v e r y profitable trade. D e s p i t e the fact t h a t the C o m m i s s i o n ' s s t a t u t o r y p o w e r to requisition A m e r i c a n - o w n e d vessels and vessels under c o n s t r u c t i o n in the U n i t e d S t a t e s b e c a m e fully o p e r a t i v e when the P r e s i d e n t proclaimed an unlimited n a t i o n a l e m e r g e n c y on M a y 27, 1941, the C o m m i s s i o n could report on O c t o b e r 25 t h a t , " s o far, this p o w e r has been exercised only for a few v e s s e l s . " " In the m e a n t i m e , while small beginnings were being m a d e in the n a t i o n a l scene, some g r o u n d w o r k for A n g l o - A m e r i c a n collaboration w a s also being laid. In M a y 1 9 4 I , the M a r i t i m e C o m m i s s i o n w i t h the British h a d arranged to m a k e a j o i n t s u r v e y o f shipping. T h i s c o m p r e h e n s i v e s t u d y w a s to c o v e r , for the period M a y 1, 1 9 4 1 , to M a y χ, 1942, the v o l u m e o f necessary c o m m o d i t y m o v e m e n t s , a v a i l a b i l i t y of tonnage to m e e t these requirements, and a v a i l a b i l i t y o f new construction. 2 3 " Conference on Transportation, with Carl Spaeth and Frank Nattier, Office of Nelson Rockefeller, April 15, 1941 (Bureau of the Budget). β United States Maritime Commission, Report to Congress for the Period Ending October 25, '94'· Memorandum to the Chairman, Maritime Commission, from David E. Scoli, M a y 19, 1941; see also Memorandum, "Priorities and Shipping Control," to Wayne C o y , Office of Emergency Management, from Oscar Cox, M a y 22, 1941.

M

The Setting

79

O n J u n e 20, 1 9 4 1 , W . Y . E l l i o t t , C h i e f o f t h e S h i p p i n g S e c t i o n , O f f i c e o f P r o d u c t i o n M a n a g e m e n t , w r o t e to W a y n e C o y , L i a i s o n O f f i c e r o f t h e O f f i c e for E m e r g e n c y M a n a g e m e n t as f o l l o w s : " . . . I t seems to me that the integration of our own shipping problems m u s t b e m a d e w i t h t h e B r i t i s h , C a n a d i a n a n d t h e o t h e r D o m i n i o n s for a c o o r d i n a t e d e f f o r t o f s h i p p i n g c o n t r o l a l o n g t h e lines o f the e x p e r i e n c e in t h e l a s t w a r . I t h i n k t h a t t h e first s t e p s to this w o u l d m e a n s e t t i n g u p , as y o u will see, an a d e q u a t e s t a f f a n a l y s i s in y o u r o w n o f f i c e . " M r . E l l i o t t enclosed the c o p y o f a m e m o r a n d u m w h i c h he h a d s e n t to W . L . B a t t , D e p u t y D i r e c t o r o f t h e P r o d u c t i o n D i v i s i o n of the Office of Production M a n a g e m e n t . This memorandum, which d e a l t in t h e m a i n w i t h r a t i o n a l i z a t i o n o f B r i t i s h - A m e r i c a n c o n t r o l l e d s h i p p i n g , g a v e an incisive s u m m a r y o f the p r e v a i l i n g s i t u a t i o n : ι . T h e existing shortage of shipping is increased from week to week by the withdrawal of large numbers of ships either for British or United States naval use, from the control of the Maritime Commission. Twenty-six ships were taken off at a blow by the N a v y in the past week and the British had previously requisitioned two million tons of shipping including a heavy requirement on tankers. 1. Efforts are now being made b y the Maritime Commission to work out j o i n t programs with the British and with shipping that falls under British influence for redistribution of shipping routes, leaving the Pacific mainly to American shipping. Other combined programs include a valuable effort now held for the time being by the State Department to revise the Plymsol Load Line requirements, lessening the existing factor of safety to a degree that is estimated to add at least twelve tankers to the United States capacity and from fifteen to twenty-five to the British. Corresponding relief will be felt in other categories. 3. T h e British are already proposing joint stockpile arrangements in manganese and tungsten which will involve further efforts to rationalize the problem of distance hauls and efficient handling of tonnage that will increase the rail transport across the United States from Pacific ports. 24 T h e a b o v e f a c t s , in M r . E l l i o t t ' s e s t i m a t i o n , s u g g e s t e d t h e n e e d for B r i t i s h - A m e r i c a n j o i n t s h i p p i n g c o n t r o l a n d its e x t e n s i o n

to

foreign vessels w h e r e possible. T h e B r i t i s h , a c c o r d i n g to E l l i o t t , h a d s h o w n w i l l i n g n e s s to c o o p e r a t e , b u t there w a s no a d e q u a t e f o r m a l ized j o i n t m a c h i n e r y w o r k e d o u t . T h i s w a s p r o b a b l y d u e in p a r t t o p o l i t i c a l r e a s o n s , " b u t it w o u l d s e e m i m p o r t a n t to a n t i c i p a t e a n d to e r e c t a s k e l e t o n o r g a n i z a t i o n on t h e lines o f t h e I n t e r - A l l i e d S h i p p i n g Memorandum, "Rationalization of British-American Controlled Shipping and Correlation of Shipping with Rail Transportation," to W . L. Batt from W . Y . Elliott, June 11, 1941.

14

8o

Combined Shipping Adjustment Board

Board of the last war that could be brought into being at need and could cooperate more efficiently in the m e a n t i m e . " " Progress toward the creation of adequate shipping administration, both national and binational, was slow in emerging. Nevertheless, many events in the summer of 1941 led eventually to the creation of the War Shipping Administration and the resultant Combined Shipping Adjustment Board after the United States had officially entered the conflict. T h e war situation in Europe during that summer was not without its sharp repercussions in the United States. For one thing, the President had set the direction when he had ordered the Maritime Commission to accumulate two million tons of shipping for immediate British use. Congress itself added impetus through its appropriations for the emergency shipbuilding program." This, of course, had in the main a longer range significance. One of the most important enactments of immediate influence was Public L a w 173, (approved July 14, 1941) known as the Ship Warrants Act. It was in anticipation of the passage of this act that the Division of Emergency Shipping set up a Warrant Section." This legislation greatly increased the powers of the Maritime Commission over the regulation of both American and foreign vessels. Under the A c t the Commission was vested with the authority to enforce priorities by a system of ship warrants. Ships with such warrants were to have priorities with respect to the use of facilities of loading and discharging, cargo handling, fueling, dry docking and repairing. T h e Commission was given power to determine the order » Ibid. " Commencing with Public Law J, Feb. 6, 1941, which authorized the construction of the first l o o ships of EC-2 type, known as the Liberty Fleet, a series of appropriations were approved by the Congress during 1941 which provided for increasing total construction to over 13,000,000 deadweight tons of shipping by the end of 1943. Public Law 13, known as the Defense Aid Supplemental Appropriation A c t , 1941, authorized the Commission to construct with lend-lease funds 112 additional EC-2 design vessels and 100 vessels of the Commission's standard types. All of the ships to be constructed under this act were permitted to be transferred for defense aid purposes under the lend-lease law. On Aug. 25, 1941, additional funds were provided under the First Supplemental National Defense Appropriation Act, 1942, and contract authorization was granted for the building of more ships and shipways, including both the Commission's standard types and merchant vessels of such type, size, and speed as to be useful for transporting the commerce of the United States and suitable for conversion into naval or military auxiliaries. Ships constructed under this authorization, which were to be used in the defense aid program could be made available, but only by lease to the government of any country whose defense the President termed vital to the defense of the United States, in accordance with the Lend-Lease Act. IHd. *' Conference with S. Duvall Schell, Division of Emergency Shipping, Maritime Commission, June 23, 1941.

T h e Setting

8i

or priority. T o secure such a warrant the shipping company had to agree to the Commission's determination of "trades in which the ship is used, the voyages to be undertaken, classes of cargo to be carried, and fair and reasonable maximum rate of charter hire or affreightment." Furthermore, the Act required the Commission to make fair and reasonable provisions for priorities with respect to the importation of strategic and critical materials, the transportation of materials when requisitioned by a defense agency, and transportation of essential defense materials." Prior to these provisions by the United States, the British Government had developed a warrants system which was found very useful in controlling neutral shipping. It is significant that soon after the passage of the American Warrants Act, both countries reached an agreement to work together. This merging of British and American warrant control meant that effective restriction could be placed upon all shipping entering the ports of both countries. In actual practice, the Maritime Commission used its powers under the Warrants Act very sparingly. Negotiations with private shipping were still conducted on an informal basis and in only a few cases were definite steps taken to compel changes in routing or in other practices. The Division of Emergency Shipping withdrew five ships from the bauxite trade in an attempt to compel the Aluminum Company of America to make more effective utilization of its own ships. It also created a pool of ten ships to work entirely under Government order to clear up "backlogs" of strategic materials located at various points throughout the world. In this case the chief concern was with Chilean nitrates and manganese and chrome ore. 2 · While these slow developments in connection with the Maritime Commission were taking place, some progress was made in regard to import control by other agencies of the Government. Most persistent on this score was the Office of Production Management. In June, the Materials Branch of the Office of Production Management set up a Shipping Liaison Section in its Stockpile and Shipping Imports Section. The main purpose of this new unit was to prepare a priority list of essential imports. A t the request of the Maritime *· Public Law 173. " Conference on Emergency Shipping, July 1 1 , 1941.

82

Combined Shipping Adjustment Board

Commission this list was cleared with other agencies through the formation of the Interdepartmental Shipping Priorities Advisory Committee. Other agencies represented on this committee besides the Office of Production Management and the Maritime Commission were the Department of Agriculture, Federal Loan Agency, the Office of Inter-American Affairs, the Office of Price Administration and Civilian Supply, and the State Department.' 0 Most of the work of formulating the import priority list for the Interdepartmental Shipping Priorities Advisory Committee was done by the Stockpile and Shipping Imports Section of the Office of Production Management. This group, under the leadership of W . Y . Elliott, formed the driving force for an aggressive approach to an import program. Essentially, the problem of shipping control was closely linked with the broader field with which the Office of Production Management was coming to grips, namely that of priority and allocation orders. Any decisions to place restrictions upon shipping were interlinked with decisions to place restricted commodities under priority and allocations order. Administrative machinery was necessary for synchronization. Such organizational provision had not been made in adequate fashion. T h e informal committee arrangement ran into many difficulties. Legal questions beset both the Advisory Committee and the Stockpile and Shipping Imports Section. It was uncertain whether these groups had power to direct the Maritime Commission to lift imports in accordance with the priority schedule presented to it. T h e Commission took the position that the Committee was merely an advisory body, and that actual determinations as to what should be imported were within the powers of the Division of Emergency Shipping." T h e informal committee system encountered other serious problems besides the one concerning its legal power. One obstacle was the lack of accurate data concerning backlogs of material which had been built up in various parts of the globe as a result of the unavailability of shipping. T h e Stockpile and Shipping Imports Branch received information on such supplies from the branch chiefs of the Office of Production Management, but this was of a very fragmentary nature and was based largely on data furnished ,0

"

"Shipping Priorities," Report to SPAB, by W. Y . Elliott, Oct. 31, 1941. Ibid.

T h e Setting

83

by major dealers or brokers through whom buying was normally done. In an attempt to supplement such rough estimates resort was had to consular reports and to material sent in by field representatives of the Maritime Commission. In both cases the results were extremely unsatisfactory. Finding out what essential materials were available abroad was one problem. In addition there was the further difficulty of discovering what supplies were actually brought to this country. Reliance could not be placed upon information developed by either the Maritime Commission or the Department of Commerce, the only real sources available. In accordance with its own appraisal, the Maritime Commission's estimates of what came in were grossly inaccurate. The statistics furnished by the Department of Commerce, on the other hand, were out of date, inasmuch as they were usually two months late in appearing. What this really meant was that no one knew what had been brought into the United States during a 60-day period, and nobody knew what was afloat on the oceans at any given time." Resistance to the creation of an effective shipping control program was, of course, to be found outside of government circles. Private companies still carried on in a business-as-usual manner. They were reluctant to bring in imports which were low on revenue and preferred those on which freight rates were high. While in general the Division of Emergency Shipping attempted to induce the companies to lift vital materials on a 50 percent cargo basis, the Stockpile and Shipping Imports Branch felt that this percentage ought to be increased appreciably. Similarly, the matter of alteration of trade routes met with resistance from private quarters. While power of transferring vessels from one route to another rested with the Maritime Commission, the Commission was extremely hesitant to push such decisions very far. Other difficult questions affecting the import program centered around the stimulation of foreign production of essential materials. In this area, price considerations loomed large, as did the relatively nonagressive role of the Reconstruction Finance Corporation which was engaged in the stockpile program." A further problem of » ibid. u

"Report of Conference with W. Y . Elliott, Chief of Stockpile and Shipping Branch, O P M , " July 9, 1942 (Bureau of the Budget).

84

Combined Shipping A d j u s t m e n t B o a r d

some importance arose from the attempt to shorten water hauls by landing cargoes at Pacific Coast ports, cargoes which had previously been brought through the Panama Canal to the East coast. This required cooperation from the railroads in lowering their rates; negotiations with the rail carriers to accomplish this objective were none too successful. Meanwhile, as experience broadened in the import control field it became evident that an import program required much more than the establishment of priority list of essential imports. Coordination appeared necessary with the work of the Reconstruction Finance Corporation in its stockpile program and with the purchasing activities of Treasury Procurement and the War and N a v y Departments. In an effort to tie together these activities and functions, a second informal committee was formed to concentrate on problems of stockpiling. This group had representatives from the Maritime Commission, the Office of Production Management, the Reconstruction Finance Corporation, the Department of State, and, from time to time, other agencies. It became known later on as the. Clay ton Committee or the Cargo Clearance Committee." The Shipping Priorities Advisory Committee, however, held the center of the stage and continued to function largely under the guidance of Elliott. Even though Elliott did not always have the full support of top officials in the Office of Production Management, he kept pressing the Maritime Commission for more effective performance in lifting cargoes on the import priorities list." This aggressive approach irritated the Maritime Commission as an intrusion into what they regarded as their own domain of operations. Elliott, on the other hand, was perturbed by what he deemed to be the Commission's interest in protecting private shipping companies rather than the defense of the United States. The resulting friction did not aid the establishment of smooth working relationships between the two major agencies involved. Indicative of the difficulties which had arisen were Elliott's proposals made on December ι , 1 9 4 1 , to the Supply Priorities Allocations Board. " T h e right," he stated then, "of the Office of Production Management to allocate cargo space where necessary, subject only to the Maritime Commission's judgment as to safety " United States Maritime Commission, Press Release, No. 990, Aug. 13, 1941. * "Report of Conference with W. Y . Elliott."

The

Setting

85

factors of the ship's operation, seems to m e essential to the

proper

operation o f the priorities f u n c t i o n . " H e w e n t on to indicate the need f o r v a s t i m p r o v e m e n t s in i n f o r m a t i o n s e r v i c e w i t h r e g a r d t o c a r g o e s for l i f t i n g

available

and

the

expansion

of

the

field

staff of

the

M a r i t i m e C o m m i s s i o n . F u r t h e r m o r e , " i t is h o p e d t h a t a r e q u e s t f o r duplicates of the ships' manifests furnished to the M a r i t i m e mission

by

American

every shipping company

Com-

o n t h e l a n d i n g o f a s h i p in a n

port, w o u l d n o t be t h o u g h t a p r e s u m p t u o u s request from

the Stockpile and S h i p p i n g I m p o r t s Branch. O n l y

a detailed

know-

ledge of the loading of individual ships permits a n y reasonable check upon the working

of priorities."'· Finally, Elliott

suggested a joint

U n i t e d S t a t e s - C a n a d i a n C o m m i t t e e to m a k e a survey of actual utilization o f t o n n a g e w i t h a v i e w t o m a k i n g e x t e n s i v e c h a n g e s in e s t a b l i s h e d vessel routings. In actual f a c t , the P r e s i d e n t h a d already m o v e d this

direction."

Elliott

e x t e n d e d to o t h e r allied

conceived

the joint

undertaking

as

in

being

systems."

· · Shipping Priorities, Report to S P A B . " O n Sept. 19, 1941, Secretary of State Hull wrote to the President attaching a letter from the United States Chairman of the Joint Economic Committee (Canada-United States) which was received by Hull for transmittal to the President. This letter transmitted a resolution unanimously adopted by the Committee at a meeting in Ottawa, Aug. 9, 1941, recommending acceptance of basic policy of principles that United States and Canadian defense shipping requirements shall receive equal consideration in allotment of shipping space and that United States and Canadian civilian shipping requirements shall also receive equal consideration. It further recommended that the appropriate agency in each country enter into immediate consultation in order to establish a method for placing Canadian Shipping requirements before the agency or agencies allocating shipping space in the United States. Mr. Hull stated that if the President should concur in recommendations made in this resolution, the President may wish to transmit it with his approval to the Maritime Commission and to the Interdepartmental Shipping Priorities Advisory Committee (W. Y . Elliott, Sec.). The President approved of Mr. Hull's suggestions, and on Sept. 12, 1941, wrote similar letters to Admiral Land and Mr. Elliott. These dealt with the establishment by the Governments of Canada and the United States of Joint Economic Committees to inquire into the possibility of closer economic collaboration in the defense period and into means of mitigating the period of transition following the war. The President briefly explained the recommendations in the resolution adopted at the Ottawa meeting by the Joint Committee and signed by Mackintosh, Canadian Chairman, and Hansen, United States Chairman. He also sent to Admiral Land and Dr. Elliott copies of the resolution for consideration and appropriate action ( F . D . R . Library). " " T h e Canadians have requested the setting up of a joint shipping committee to examine the applications submitted by them for shipping space. It is suggested that this shipping committee might readily serve to make more adequate studies than are at present available through the Maritime Commission of the tonnages and the use to which these are put, as between the Canadian and the United States shipping systems. Every government at war has found it necessary to set up a shipping control geared into the controls of allied systems. A t the present time the Maritime Commission has done an admirable j o b under the greatest difficulties and without all the facts in hand, to review the demands continually being made under Lend-Lease and otherwise by the British, the Australians and others. It is surely a

86

Combined Shipping Adjustment Board

Just preceding the entry of the United States into the war, differences between the Maritime Commission and Elliott's group reached such a serious stage that representative of the Commission ceased to appear at meetings of the shipping committees. Trouble in the whole field of shipping control appeared to loom ahead. However, the Japanese attack on Pearl Harbor changed things completely. The United States was now at war and its defense period was over. A careful observer could report on December 12, a few days after war was declared: " T h e Shipping Imports Branch are pushing once more with the Maritime Commission, this time with some promise of success, shuttle services to clean up a number of areas and concentrated at ports where the traffic can be handled.... It appears that the changed situation in the Pacific area has infused a certain amount of new life into the Shipping Committee."®· In Great Britain, meanwhile, the pressure of war had led to drastic action on the part of the Government. The problem of providing adequate administrative machinery was relatively simple compared to the situation faced by the American Government with its diffuse agencies and divided powers. The Ministry of Shipping was established on October 1, 1939, all necessary parliamentary measures having been passed two months previously. On the twentieth, the Ministry took over the functions of the Board of Trade, which had hitherto required that both seagoing and coastal vessels obtain licenses before leaving ports. This license system had been predominant during the early months of the war, although a large number of vessels were requisitioned for naval and military use. On February 1 , 1940, the license system was replaced by a system of requisitioning which became applicable to all ocean-going vessels. As the war continued, it became evident that all transportation, inland as well as shipping, needed to be tied into one continuous operation. Accordingly, in M a y 1 9 4 1 , the Prime Minister announced the creation of the Ministry of War Transport which was matter of concern to the bodies which set high policy of the government to plan for the kind of joint shipping pool represented by Inter-Allied Shipping Control in the last war, in order, for one thing, to protect effectively the interests of the United States defense program from a diversion of shipping for less essential uses by other countries." Draft of "Considerations to Be Submitted with S P A B Report," Dec. ι , 1941, by W. Y . Elliott. " Memorandum, Shipping Committee Meeting, for Mr. Watkins from Ernest W. Williams, Jr., Dec. i l , 1941.

T h e Setting

87

in effect a consolidation of the Ministry of Shipping and the Ministry of Transport. 4 0 T H E UNITED STATES E N T E R S THE W A R

T h e British had, of course, learned in the grim school of experience. T h e war for them was not three thousand miles away but at their very doorsteps, and the life line of their existence depended upon shipping—upon effective control and administration. B y comparison, the United States was unprepared for the burden which full entry into war made inevitable. N o t having put their own house in order, the Americans became preoccupied with this task nearly to the exclusion of Anglo-American shipping problems. M a n y agencies of government were concerned with shipping, and attention was focused almost entirely upon the problem of pulling together the national situation itself. Shipping control, which had been so loose and uncoordinated in the defense period, now appeared wholly inadequate to meet war needs. Furthermore, there were other pressing factors which, once the United States had entered the war, made the problem of shipping control one of crucial significance. U p until January 1 9 4 2 shipping decisions had been made almost entirely on the basis of the LendLease program. B u t with the beginning of 1 9 4 2 the W a r and N a v y Departments began to play an important role in shipping. With plans being discussed for sending expeditionary forces to Africa, Britain, and Australia, it was evident that tremendous strain 40

"Port work hitherto done by the Ministry of Transport was combined with a division of the Ministry of Shipping doing similar work. Thus overlapping and conflict of authority was terminated, and the consolidated arrangement has produced satisfactory results. All other functions of the Ministry of Transport, such as railways, road transport, highway engineering, and highway administration, were grouped under a Deputy Director General of Inland Transportation. The other functions of the former Ministry of Shipping were combined into two groups, one dealing with the general administration of the Merchant Navy and the servicing of ships, the other serving as controlling agent of requisitioned liners and tramps and government-owned vessels. A Shipping Control Group coordinates the work of these shipping groups and the Port and Transit Control, and supervises the turnaround of vessels. "Two other important groups have been established. The Statistical Division ascertains the requirements of the various departments and allots the available shipping resources in the best way to meet the various demands. It also controls the acquisition of tonnage and the handling of vessels in foreign ports. The Foreign Shipping Division makes arrangements with allied representatives on shipping matters common to Great Britain and her allies." Memorandum, "Shipping Control in Great Britain," from Ernest Williams, Jr., to R . J . Watkins, forwarded under memorandum of Dec. 19, 1941 to Donald C. Stone, Bureau of the Budget, by Ralph J . Watkins, Ass't. Director, National Resources Planning Board.

88

Combined Shipping Adjustment Board

would be placed on shipping facilities which were already p r o v i n g inadequate for U . S. rearmament needs and for delivery of L e n d Lease aid. 4 1 T h e situation was a g g r a v a t e d further by uncertainty as to w h o would be responsible for shipping and how it was to be administered and allocated. In addition, shipping at this time was still being operated under split direction. T h e A r m y and N a v y operated the merchant vessels which they had requisitioned j o i n t l y , while the M a r i t i m e Commission operated its own shipping. T h e problem of unification was beset with all sorts of obstacles. O t h e r civilian agencies were concerned, particularly the Board of E c o n o m i c W a r f a r e . " T h e r e also seemed to be a question as to whether the Board of Economic W a r f a r e should be placed in charge o f all shipping or whether some kind of committee arrangement, in which all interested agencies would be represented, should be established." 4 2 T h e s e conflicts, if they did actually exist as indicated, were minor matters compared to more far-reaching problems upon which decisions were being reached. Essentially these vital problems came from the deep uncertainties surrounding basic strategy itself. A s one disillusioned and skeptical a r m y officer p u t it at the t i m e : " I f y o u filled an eye dropper with ink and squirted it a t a m a p , that would be American s t r a t e g y . " 4 3 T h e problem of strategy was the concern of the highest authority in the land, the President o f the United States. I t m a y be concluded eventually that the C h i e f E x e c u t i v e , by setting impossible goals, achieved maximum results. Be that as it m a y , m a j o r decisions made by the C h i e f E x e c u t i v e at the time g a v e no end of concern to top officials charged with c a r r y i n g out such orders. T h e President, for example, had issued directives assigning materials to various countries, and plans had been formulated for more expeditionary forces than there were ships to move them. Furthermore, he had set production goals necessitating increasing imports o f raw materials, which in turn m e a n t a larger demand on shipping facilities. In fact it was estimated in some official quarters that by the end of 1942 production would be at least sixty d a y s ahead of shipping. Shipping, rather than production, Memorandum, " T h e Shipping Problem," Defense Organization Section, Bureau of the Budget, Jan. 16, 1942. « Ibid. « Hid. 41

T h e Setting

89

was the bottleneck; and as such it was almost entirely a strategic problem. I t appeared evident to high officials in the Government that the mere writing of an executive order would not in itself provide a solution. "Those concerned with the shipping problem felt that someone in this field should have the complete confidence of the President in order to make effective either the decís ons of any agency created to deal with shipping problems or an executive order which the President might sign." 4 4 In the meantime, the President, as soon as war was declared, had taken steps to create a Strategic Shipping Board on December 8.4S In actual fact, the Strategic Shipping Board consisted of two shipping committees. T h e first, composed of Admiral Stark, General Marshall, and Harry Hopkins, was to determine top strategy in the allocation of vessels. T h e second, consisting of these same three members with the addition of Admiral Land as Chairman, was to be the operating committee to take action upon submittal to it of approved programs which called for shipping. Up until January 14, 1942, the Board had held three meetings. T h e first was attended by Stark, Hopkins, and Marshall. T h e other two meetings were chairmaned by Admiral Land with Admiral Taffender ( N a v y ) , Colonel Gross (Army), and Mr. Talmadge (Lend-Lease), the respective operating heads of transportation representing these three services. M r . Scoli of the Maritime Commission acted as secretary of the Board. 4 · T h e views of this group as to what constituted the basic problem in the allocation of shipping were pretty much alike. Briefly, shipping demands out-weigh the available supply by better than two to one; thus, the Maritime Commission is presented with the programs, Ibid. "This Board will be composed of the Chairman of the Maritime Commission, the Chief of Staff, the Chief of Naval Operations and Mr. Harry Hopkins. It should establish policies for and plan the allocation of merchant shipping to meet military and civilian requirements, and coordinate these activities of the War and N a v y Departments and the Maritime Commission. Operations should remain in the hands of existing organizations. "The Board should consult with representatives of the O L L A and other agencies of the Government especially for processing or planning the procurement, production, import and export of defense articles and materials. Representatives of the Governments receiving assistance under the Lend-Lease Act should likewise be consulted." Memorandum, "Strategic Shipping Letter," Dec. 8, 1941 (Bureau of the Budget). *· Memorandum, "Strategic Shipping Board," Jan. 14, 1942 (Bureau of the Budget). There scemi to have been some confusion as to what the position of Admiral Land was in this undertaking. 44 41

9o

Combined Shipping Adjustment Board

all of which have been approved by the President, calling for twice as many ships as are available. The fact that the Army and Navy both operate a large fleet of ships independently, and are both empowered to requisition vessels to carry out approved programs, is a complicating factor in performing an orderly scheduling and allocating process. The issues involved in the use of ships are absolute top policy, i.e., the fulfillment of the Russian protocol, the support of the British campaign, the reinforcement of the Philippine area and Australia, and the movement of troops to our various bases, as well as to England. The Maritime Commission is hardly in a position to determine priorities among these requests. The difficulty which has been encountered has been the President's issuing of orders which are absolutely incompatible in terms of shipping; thus, he approved an Army expeditionary force to a certain point, and at the same time states that the Russian needs must be given first priority.... I t was understood that A d m i r a l L a n d was preparing a chart to show the President graphically how impossible it was to satisfy all the approved programs and w a s demanding that someone be empowered to place priorities. I t was understood further that an E x e c u t i v e Order had been originated and approved b y the A r m y and N a v y which placed in A d m i r a l L a n d , as Chairman of the M a r i t i m e Commission, the sole power to allocate vessels. 47 T h a t the Strategic Shipping B o a r d was not a suitable agency for managing the j o b a t hand w a s agreed upon in all quarters. In a j o i n t letter to the President on J a n u a r y 13, 1942, Secretary of the N a v y K n o x and Secretary o f W a r Stimson pointed out that the effectiveness of this recently established Board w a s distinctly limited. In the first place power of decision was divided and did not rest in a single person. N o executive organization could be established under the directive o f the Board, and hence the B o a r d necessarily delegated action to subordinates who were members of existing organizations with conflicting interests. Furthermore, as Secretaries K n o x and Stimson pointed o u t , actual control of p r i v a t e shipping was not vested in the Board and control of shipping in the hands o f the armed services remained with those organizations. Control in the field, also w a s divided, and private shipping agencies were uncoordinated. T h e Secretaries recommended t h a t a C e n t r a l Shipping Administration be set u p with A d m i r a l L a n d as Administrator. 4 8 A n account of the various negotiations which led up to the 17 41

Memorandum, "Strategic Shipping Board." Letter to the President from Knox and Stimson, Jan. 13, 1942 (F.D.R. Library).

T h e Setting

91

establishment b y E x e c u t i v e Order of the W a r Shipping A d m i n i s t r a t i o n on F e b r u a r y 7 , 1942, m e r i t s s e p a r a t e a n d d e t a i l e d t r e a t m e n t in itself. S u f f i c e it to s a y t h a t m o s t officials i n v o l v e d w e r e c o n c e r n e d w i t h this m a t t e r a l m o s t to t h e t o t a l exclusion o f t h e A n g l o - A m e r i c a n s h i p p i n g p r o b l e m . N e v e r t h e l e s s , a n u m b e r o f the p l a n s for s e t t i n g u p a w a r t i m e s h i p p i n g a u t h o r i t y in the U n i t e d S t a t e s G o v e r n m e n t a l s o m a d e p r o v i s i o n for i n t e r n a t i o n a l a r r a n g e m e n t s . T H E ELLIOTT-MARVIN

PLAN

During November-December, evolved

proposals

which

1 9 4 1 , M r . E l l i o t t a n d his

became

known

as

the

group

Elliott-Marvin

p l a n . T h i s w a s b r o u g h t to t h e a t t e n t i o n o f the P r e s i d e n t on D e c e m b e r a 8 . 4 9 W h i l e t h e p l a n d e a l t in b r o a d o u t l i n e w i t h b o t h d o m e s t i c a n d i n t e r n a t i o n a l c o n t r o l s , its p r o v i s i o n s w i t h r e g a r d to t h e l a t t e r were as follows: International

Controls

( N . B . : These controls could be established by treaty or by executive agreement based on provisions in the statute setting up domestic controls). Joint Shipping Board. An independent, international agency should be established, to be known as the Joint Shipping Board. Five citizens of the United States should be appointed by the President, subject to confirmation b y the United States Senate, and such appointments should extend for the duration of the unlimited national emergency. Each member of the Board should have one vote, and decisions should be made by majority vote. T h e five American members of the Joint Shipping Board should complement the members appointed by other nations, to wit: by the British Commonwealth of Nations (5), by the Allied or Associated powers fighting the Axis (5). T h e Joint Shipping Board should be vested with control of all offshore shipping under the authority or control of the governments represented on the Board. T h e Joint Shipping Board should be vested with the following powers: (1) T o establish priorities certificates or a priorities list of all cargoes to be carried by the ships owned or controlled by the respective governments, and to order the ships to load these cargoes according to the priorities certificates or list, except where strategic or safety factors are controlling, as interpreted by the N a v a l authorities of the respective governments. (a) T o control the operations of all merchant ships under the authority or control of the respective governments. (3) T o allocate ships among the associated powers to any trade routes or areas. 4*

Letter to the President from Don Marvin, Dec. 28, 1941 ( F . D . R . Library).

92

Combined Shipping A d j u s t m e n t Board

(4) T o recommend to the appropriate national authorities the control of port and storage facilities by the respective Naval or Maritime Commission authorities. (5) T o recommend to the appropriate national authorities the purchase of certain commodities where such purchase is important to the defense or war effort of the associated powers. (6) To order the appropriate national authorities directly to execute any of the foregoing powers. N.B.: The Joint Shipping Board should be an international policyforming agency, with a small immediate staff of its own, while the great bulk of staff work and the execution of the Joint Board's decisions should be done by the appropriate national agencies. The place of meeting of the Board would have to be determined by international negotiation, but it is suggested that much of the Board's work could be carried on at the headquarters of the respective governments. In a letter written to D a v i d Scoli of the M a r i t i m e Commission on J a n u a r y 9, 1942, Elliott discussed his proposed controls of merc h a n t shipping and enclosed a slightly revised version of his previous chart. 6 0 T h e E l l i o t t - M a r v i n plan received some circulation and was subjected to sharp criticism. " I t seems to m e , " wrote R a l p h J. W a t k i n s , " r a t h e r unwieldly in t h a t it would a p p a r e n t l y provide for the establishment by direct Presidential a p p o i n t m e n t of three levels of full-time boards. . . . T h e lines of a u t h o r i t y and relationship suggested by the proposal seem to me to be rather confused."* 1 Despite Elliott's efforts, it m u s t not be assumed that m u c h attention was being given generally to the international side o f shipping. In fact most U n i t e d S t a t e s officials were so preoccupied with the problem of creating a w a r t i m e shipping agency that little consideration was given to the setting up o f A n g l o - A m e r i c a n instrumentalities. In addition, confusion was created b y the f a c t t h a t in some quarters there existed the impression that the Joint M a t e r i a l s Conference under M r . B a t t was set u p to deal w i t h shipping as well as with raw materials. T h e Presidential letter o f D e c e m b e r 17, 1941, h a d , of course, mentioned explicitly a conference on raw materials. N e v e r t h e l e s s , in the minds of some of the participants raw materials and shipping were linked together. F o r example, B a t t himself had written on D e c e m b e r 26, 1 9 4 1 : Letter from W. Y . Ellliott, Deputy Chief, Stockpile and Shipping Imports Branch, Office of Production Management to David Scoli, United States Maritime Commission, Jan. 9,1942. 1 1 Memorandum for Mr. Wayne C o y , Liaison Officer for Emergency Management, Office for Emergency Management from Ralph J. Watkins, Jan. 2, 1942. 14

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υ

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O ζ cu M

Χ m

c2 ^

S Λ

1

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8 British Purchasing Commission, 12. British Purchasing Mission, 78 British R a w Materials Mission, 11, 12., 1 1 , 18. 39> 40 British Supply Council in North America, 8, i l , 12., 104 British Supply Missions, 8, 176,2.58 Brownlow, Louis, I91 Budgeting, food, 195, 2.14 Bureau of Agricultural Economics, 2.09 Bureau of the Budget, Executive Office of the President, viii, 16, 18, 19, 76; report summarizing situation in C S A B , 12.1, text, 12.3 f.; proposals for effective organization of the C P R B , 141-45; role of, in advising and stimulating Board's development, 149-51; why doubtful about continued financial support for it, 154; suggestion re handling requirements for relief and rehabilitation, 171; Division of Administrative Management's survey of C F B administrative structure: excerpts from its report, 2.2.8 ff.; see also Office of Emergency Management Business interests, stand for free enterprize, 61; postwar pressures by, 63 Byrnes, Justice, 165, 2.18, 2.41

277 Canada, two combined boards on which represented, vii, 5311; joint board and committees set up between U.S. and, 9, i m ; U.S. represented and acted for, on C R M B , 24; work of boards reviewed and outlined: public announcement re their continuance, by three Heads of Government, with text, 53 f·. 185 f.; participation in meetings leading to International Allocations Arrangements, 66; plans covering joint shipping interests of U.S. and, 85; Canadian-American collaboration re production and joint defense plans, 131 ff.; viewpoint of Canadian participants in C P R B , 155; inclusion on C F B , 109, 1.32. ff.; and its commodity committees, 2.09, 2.15; tripartite discussions, 1945 food crisis, 142. ff.; agreement with principles and policies as proposed by U.S., 2.51 Canadian Mutual Aid Board, 243 Canadian R a w Materials Coordinating Committee, 12.n Cargo clearance and movements, 114, 117, 119 Cargo Clearance Committee, 84 Cassels, John M., quoted, 115 f. Central Section for Exchange of Information . . ., 181 Central Section for Relief and Rehabilitation, 171, 182. Chazeau, Mr. de, 47 Churchill, Winston, 94, 140; meeting with Roosevelt, Christmas week, 1941, 1, 95; initiated steps to insure cooperation, 1; joint statements with Roosevelt, re launching of the several boards, 15 (., 95, 136 f., 104 f.; duty imperative for President and, 12.3; redraft of message to Canada, 2.33 Churchill Government, results of assumption of power by, 7 Civilian Requirements Branch, 1 1 1 Clay, Henry, 114 Clayton, William, 95 Clayton Committee, 84 Combined Boards, Anglo-American: an experiment in international administration: the four non-military boards: three countries represented, vii; sources for, and limitations of, the present treatment, vii—viii; creation initiated by Churchill and Roosevelt: evolved to deal with economic problems, i ; lack of effective ties between: no over-all organization to give unity of purpose and direction to, 49; work reviewed and outlined, and

278 Combined Boards, Anglo-American (Coni.) public announcement re continuance of, by the three Heads of Government, with text, 53 f., 185 f. (aftermath, 186 f.); agency charged with development of U.S. policy dealing with all combined civilian boards, 65; those set up before C P R B , 138; by-passed by Lyttleton: shown up as weak link in war effort, 151; Anglo-American cleavages affecting, i j i ; decision of U N R R A Council to utilize directly in the allocation process: resulting interrelations and services, 164 ff., 137; re procedure for handling of requests for relief and rehabilitation, 167 ff.; case involving relationships between Foreign Economic Administration and, with resulting plan of procedure, 169-73; hampered in liberated-areas activities and in national allocation of supplies, 173; nature and functions of the Boards and their staffs, 174; American viewpoint and policy, 183; Hopkins given authority to act, 104; his influence, 105η (see also Hopkins, Harry); relations with national authorities the major aspect of the combined pattern, n o , 170η; broad framework of the transition to peace, 148-51; leadership in arrangements for international allocation and control of short supplies, 148 ff.; insights and conclusions to be gleaned from experience of, 157-7 3; attempt at appraisal, 157-69; internal conditions, 157 ff.; difficulties in way of Anglo-American collaboration: differences between British and American thinking and action, 158 ff.; not meant to displace, but to facilitate, collaboration between national agencies, 161; sabotage down the line: frustration from lack of top support, 161, 169; external relations, 161 ff.; lack of clear and authoritative mandates: resulting difficulties, 161, 163; staffing problems: top members, 164 f.; other personnel, 165; lack of full-time international secretariat, 166; of formalization: of publicity, 167; efforts not geared together: remained segmented, 167 f.; why never possessed adequate opportunity to function in accordance with basic mission, 168; reflection and perspective growing out of experiences of, that may point up trends and problems in international organization and administration, 169-73; see also Combined Food Board; Combined Production and Resources Board; Com-

Index bined R a w Materials Board; Combined Shipping Adjustment Board Combined Chiefs of Staff, ι , 15, 55, 116, 117, 138, 141; ineffective relationships of C R M B with, 48; relationship of C P R B and, 137, 147 f., 150; responsibilities, 141, 143; W P B and other agencies having troubles with, 148; neglected by Minister of Production, 151; representatives at C P R B meetings, 179; see also Armed Services Combined Civil Affairs Committee, 5 5 , 1 4 3 Combined Food Board, 15, 141, 143, 191156, 158; why and by whom initiated, 1; work reviewed and outlined, and public announcement re continuance of, by three Heads of Government, πnth text, 53 f., 185 f. (aftermath, 186 f.); background and early stages, 191-119; emergence from A - A F C , 194 (see entries under AngloAmerican Food Committee); shipping problems, 195, 198 ff., 1 1 1 , 1 1 1 , 140; competitive buying a reason for establishment of, 100; joint announcement by Churchill and Roosevelt, text, 104 f.; limited power under its mandate: one advantage the other Boards had not possessed, 106; staff, 106, 107, 1 1 5 , 115, 116, 131, 161; organization and activities the first six months, 106-10, 1 1 1 , 115; members and officers, 107, 113, 115, 131, 134, 136; two main administrative divisions, 107; committee organization and action, 107-10, 1 1 7 ; scope and range of activities, 110-14; basis on which commodities dealt with, 1 1 1 ; extent to which surveys of U. N. supplies and requirements made, 113; development appraised, 1 1 4 - 1 6 ; function of food budgeting slow in taking shape, 114; external relations, 115; relations through Food Requirements Committee, with the U.S. agencies, 1 1 6 19; changes which led to a reshaping of, 119; maturity and dissolution, 110-56; reorganization and changes affecting whole nature and scope of activities, 110-36; tied with developments in national scene: possibilities of role delimited by emergent agencies, 110; reasons for, and results of, three Executive Orders, 110, 113, 118; bearing of national allocation process upon role, 1 1 1 , 136; authority in relation to, given to Director of Food Distribution, 1 1 1 , 114; steps toward providing for participation of, in allocation machinery, 1 1 χ , 1 1 4 ff., 119-36 passim; relationship to U.S. food authorities altered by estab-

índex lishmentof War Food Administration, 113; Secretary of Agriculture's altered position on, 113, 114, 1 1 7 , 1 3 1 ; repercussions following, 113 ff.; long-time criticisms of, 113 ff.; impasse that called for drastic change, 117; a division staff of Bureau of the Budget called in to survey and suggest: their findings and recommendations the basis for remedial action, 118; excerpts from their final report, 118 ff.; organization of commodity committees redesigned, 1 1 9 ff., 134; War Food Administrator named representative on, 131; inclusion of Canada on Board, 131. ff.; diminishing significance of new role: anticipations re its future role, 136;jurisdictional difficulties, 136-40; effect of shift in control of foreign food programs, 139 f.; at the turn of the war: food crisis of 1945,140-45; not a participant in tripartite food discussions, 141; programs adapted to their recommendations, 145; last stages: expansion of representation on commodity committees, 145-48, 155; leadership of Combined Boards in arrangements for international allocation and control of short supplies, 148-51; why liquidation delayed, 151; International Emergency Food Council to replace, 154; when Board ceased to exist, 156, 168; non-cooperation of American staff, 161, 166; see also Combined Boards Combined Footwear, Leather and Hides Committee, 163 Combined Liberated Areas Committee, when and why established, 58 Combined Munitions Assignment Boards, 1 Combined Non-military Supply Board, 141 Combined Production and Resources Board, 131-89, 158, 168; relationships of C R M B and, 15, 39»:, 175; abortive plans for making it an over-all agency: developed into one of the less effective of the boards, 49; work reviewed and outlined, and public announcement re continuance of, by three Heads of Government, with text, 53 f., 185 f. (aftermath, 186 f.); new Central Section set up: operated on a committee basis, 59; participation in meeting leading to International Allocations Arrangements, 66; joint meeting and recommendations of C R M B and, re commodity provisions to be carried on, 66 ff.; commodity committees, 67 f., 69, 109; official announcement terminating: tribute paid to, 69; early stages, 131-57;

279 impetus for its establishment, 131 ff.; factors accounting for delay, 133 ff.; efforts blocked by attitude and action of Armed Services, 134, 147, 148, 153; joint statement by President and Prime Minister: when Canada became party, 136; members and officers, 136, 137, 145, 'S i . ' S ì . '56, 158, 159, 163. 175, 188; basic charter, excerpts, 136 f.; function assigned to, broad: authority and relationships largely undefined, 137; differing conceptions of its role and resulting plans and proposals, 137-45; staff, 145, 149η, 151, 176, 177, 179! Chief of Staff, 145, 148, 149η, 151; events determining actual developments, 145-49; crisis faced, and circumstances connected with, the Aurand case, 145 ff.; adverse effect upon Board, 147, 150; why procurement agencies felt no responsibility to, 148; internal condition added to its impotence, 148; role of Bureau of the Budget, 149—51 ; influence of Hopkins, 149 f., 151, 151; visit of British member, 151 f.; conditions following summer of 1941, 151-57; committees and their activities, 153, 177; present weaknesses and future possibilities recognized, 154-57; interrelationships between W P B and, strengthened, 158; attempts at reconstruction, 158 ff.; and at clarification of program, 159; Non-Military Supplies Committee, 160-64; relief and rehabilitation period: relations with, and services for, U N R R A , 164-74; difficulties met in carrying on liberated-areas activities, 166 ff.; case involving relationships between Combined Boards and Foreign Economic Administration, with resulting plan for procedure, 169-73; Reserved Commodity List, 169; pronouncement which marked last stages of its life, 174; organization and activities prior to decline, 174-89; advantages in joint relationship of C R M B and, 175; causes of frustration: why could not carry out original mandate, 176, 161, 163; became largely an adjustment agency, 176; the Registry, 176; principle of having interested agencies tied into work of, 179; efforts as advisory body: furthering cooperation between member countries, 180; interchange of information: formal channels of reporting, 180 ff.; London Committee, 180; use of special missions, 181; final phases, 183-89, 151; American and British viewpoints and policies, 183 f., 159η; joint announce-

28ο Combined Production and Resources Board (Com.) ment re ending of: tribute to: self-appraisal, 189 Combined Raw Materials Board, 1-70, 141, 141, 160,149η, 1 5 1 ; background and early stages, 1—35; why and by whom initiated, 1; pre-Pearl-Harbor anxieties and actions re supply of materials: developments in U.S., 3 ff., 9 f.; in Britain, 7 f.; after entry into war, 1 0 - H ; organization as Joint Materials Board, 10; members and executive secretaries and their responsibilities, 10, χι f., 175; outlines of AngloAmerican instrumentality taking shape: leadership of Batt, l i ff.; the " B a t t Committee letter," with excerpts, u f f . ; responsibility of Hopkins, 13; Wallace's position, 14, 18; when and by whom officially launched, 15: White House release, text, 15 f.; tic-in with War Production Board, 16, n , 39, 47 f-i proposed Executive Order, 16, text, 17; reactions to the Order, 17 ff.; why so little advance planning, 19, 37; obstacles to organization met in London, 10 f.; full stature reached during first year, 11 ff.; staff, n , 37, 39 ff., 59; commodity experts and their duties, 1 1 f., 40, 44, 47; relationships and liaisons, 14-16, 46 f.; with C P R B , l j , 39», i 7 i ; the broad fields of activity: where responsibility for implementing recommendations lay, 16; Commodity Reports and surveys, 13, 17 f., 3'» 35; allocating function: occurrence in several patterns, 18-30; misunderstandings and confusion, 19 f.; development and procurement of supplies, 30-31; four main categories, 31; conservation measures: exchange of technical information: shipping, 31; decision re balsa wood typical of Board's recommendations, 33 f.; special problems, 34, 41; policy of periodical review, 35, 38; first year reviewed, 36-38; causes and results of piecemeal or ad hoc approach, 37, 41; appraisal, administrative problems and procedures, 38-49; nature and varying interpretations of its mandate, 38 f.; no Executive Order issued, 38; misunderstandings re authority, 39, 41 ff.; position of British and of U.S. member, 39; two main functions to be carried out: tasks of research and of negotiation, 40 ff.; records, 44 f.; relationships with LendLease, 46; adherence to principle of U.S. and U . K . coming together as equals, 46;

Index area of jurisdiction and limit of powers never clearly determined, 47; situation and developments in international field in second year and beyond, 49-54; problem of emerging surpluses: danger in releasing controls: policy statement, text, 51; problems after V-E Day j i ; work reviewed and outlined, and public announcement re continuance of, by three Heads of Government, With text, 53 f., 185 f. (aftermath, 186 f.); formulation of liberated-area programs, 54-60; military period," 5J; jurisdictional difficulties with other U.S. agencies, 57 ff.; Reserved Commodity Lists, 58, 61, 6 i , 168 f., 173; organizational change in set-up of new Central Section, 59; V-E Day to termination of Board, 60-70; moves toward de-control and reconversion, 60 ff.; developments foreshadowing pattern of cooperation re certain materials after termination, 64 f.; committees or working groups related to, 65; intergovernmental agreements: re termination of Board: re basic policies and procedures, 65; joint meeting and recommendations of C P R B and, re commodity provisions to be carried on, 66 ff.; commodity committees, 67 f., 69; steps for liquidating, 68; official announcement: tribute paid to, 69; British ministries to which responsible, 135; neglect by the military, 148η; by civilian agencies: how thwarted by British, 153; procedure re requirements for relief and rehabilitation, 167 ff.; joint Conservation Committee, 183; joint announcement re ending of, 189; slight attention to food as such, ι ο ί ; joint commodity committee with C F B , 109; recognition and understanding of, gained by Batt, 167; see also Advisory Operating Committee Combined Shipping Adjustment Board, 71-130, 141, 108, i n , 161; why and by whom initiated, 1; and officially launched, 15, 95; setting and prewar shipping conditions, 71-97; position and problems of Maritime Commission, 75-90 passim; U.S. shipping control before Pearl Harbor, 75-87; groundwork for Anglo-American collaboration, 78, 91; events leading to ceration of War Shipping Administration and, 80-97; U.S. entry into war, 87-91; Elliott-Marvin Plan for a Joint Shipping Board, 91 ff.; why language vague, on statement re formation of, 95; extent of

Index provision for, in establishment of War Shipping Administration, 97; British and American differences and unsatisfactory relations: British primacy, 97 ff., 107, n o f., 114, 12.5η, ι ι 6 , 118, 153; announcement of Board's formation, text·, when released, 98; emergence, organization, and principles of its predecessor; the Allied Maritime Transport Council, 99-101, 106 f.; Memorandum of Organization, British-made, 99; members, signatories, 101; text, i O i - 6 ; purpose and policies, 101 ff.; organization and assignment of duties, 104ff., i n ff.; members and staff, 105, 111—13 ; the Board in practice, 107-11 ; critical situation in shipping outlined in the C o y secret report, excerpts, 107 f.; situation that determined character of Board and nature of its efforts, 109 f.; allocation problem, 109, 110-30; effort to resurrect operating sections, 113; special machinery to meet particular problems, 114-16; the Priorities and Allocations Advisory Committee, i i 4 f f . , n o , 111; activities and procedures, 116-30; ease of negotiation and interchange of information, 116 f.; assembling and protection of fleet, 117; control of use of ships and their allotment, 118; ship operations, 119; situation in Board summarized by Bureau of the Budget, 1 1 1 ff.; the undertaking of Nov. 30, 1941, 115 ff.; British-American differences re influencing the Board to take a hand in the matter, i z 6 ; factors determining decline, 118, 119, 151, 168; lapse into state of inactivity, 130; see also Shipping Combined Steel Committee, 153 Commerce, Dept. of, 83, 179 Committee on Demobilization of Controls..., W P B , 60η Commodities, problem of surpluses, 51; Reserved Commodity Lists, 58, 61, 61, 169 f., 173; organs of collaboration in area of, 170 Commodity committees, C F B . , 197, 108 ff.; expansion of representation, 145; alteration in nature of, 146; carrying out of agreed recommendations, 147; provision for continuity, ZJJ C P R B and C R M B , recommendations covering retention of, 67 f., 69, 109 Commodity Credit Corporation, 191, zog Commodity experts, z z f., 47; tasks of research and fact-finding and of negotiation, 40 f.; confusion over responsibility, 44

Commodity Problems Committee, 149 Commodity Reports, and surveys, C R M B , 13. l 7 f> 3'> 35 Commodity Supply and Allocation Committees, C F B , zo8 ff. Competitive buying of foreign food supplies, 100 Conservation, C R M B , 14, 31 Coordinator of Inter-American Affairs, 78 Copper, j in Coy, Wayne, 79 Coy report on 1941 shipping situation, excerpts, 107 f. Crowley, Administrator of F E A , 1 3 9 , 1 4 1 Crowley Committee, see Inter-Agency Committee on Foreign Shipments Data, see Information and data Davis, Herbert, 2.01 Defense agencies in, or coordinated through, Office of Emergency Management, 9 Director of War Mobilization and Reconversion, quoted, 6 j Division of Controls, 6 Division of Document Control and Analysis, C F B , J.07 Douglas, Lewis, h i , n z , 114; services re 1941 undertaking to supply additional shipping to Britain, 116 ff.; the LandDouglas statement of policy, 11.9η Eaton, F. M., 1 in Economic cooperation, lack of, after World War I: contemporary international undertakings, 170 Economic Warfare Agencies, z i 1 Eisenhower, Dwight D., 4η Elliott, W. Y . , quoted, 79; approach to import control, 8z, 84 f., 85η; relations of his group with shipping committees, 86; the Elliott-Marvin Plan, with chart, 91 ff. Emergency Economic Committee for Europe, 154 Empire Advisory Committee, 14 Empire Clearing House, 14, 43 European Recovery Program, efforts at economic cooperation, 170 Executive Committee on Economic Foreign Policy (under State Dept. leadership), 65,184,148; policies and recommendations developed by: steps by which adopted by top-member countries, 148-51; policy statement by its Wartime Trade Controls Committee, with text, 149 ff.

282 Executive Office of the President, see Bureau o f the Budget Executive Officers C o m m i t t e e , C F B , 134 Fact-finding, see Information and data F a t s and oils, problems o f supply and allocation, 101 f., m f., i l 8η, ¿44 Federal Loan A g e n c y , 81 Fennelly, R . D . , 43 Finletter, T h o m a s , 94 FitzGerald, Dennis Α . , i o 3 Food, procurement and distribution, 1 9 1 156; see entries under agencies, e.g., AngloAmerican F o o d Committee; Combined Food Board Food Advisory C o m m i t t e e , 1 1 1 , m Food and Agriculture Organization, 153, i j $ — Research and Information Service, 155" " F o o d crisis" of 1945, 141 Food Distribution Administration, 2.2.1, 2.2.5; Director given authority in re C F B , 112., 1 1 4

Food Production Administration, 1 1 1 Food Requirements C o m m i t t e e , 146, 108n, l i o n , 135, 136; organization, function, work of, 1 1 6 - 1 9 ; abolition of, 1 1 1 Foreign Economic Administration, 58; when and how created: functions, 57, 138; position taken b y , re liberated-area programming and allocations, 58 f.; relationships with C P R B , 166, 169, 179; case involving relationships between Combined Boards and, with resulting plan o f procedure, 169-73; responsibilities given it by Congress and by Executive Orders, 170; question of responsibility for developing U.S. supply position, 171, 1 7 1 f., 178; wide representation, 179; differences between W a r F o o d Administration and: C F B as minor issue, 137 if.; basis of agreement adopted, excerpts, 138; resulting powers, 138 f.; agreement with Dept. of Agriculture re foreign food programs, 139η; chairmanship in InterAgency C o m m i t t e e on Foreign Shipments, 141 Foreign Office, British, 34 Government programs, reorientation and new types of foreign relations needed, 164 Great Britain, see Britain and the British Gross, Colonel, 89 Hambro, Sir Charles, 1 1 n, $1 Harriman, W . Averell, 10, 1 1 , 1 5 η

Index H a r t , W . O., i n Henderson, Leon, 1 1 9 Hill, Sir Quintin, 194 Hook Steel Mission, 153 Hopkins, H a r r y , 10, 1 1 , 13, 19; consulted re shipping affairs, 89, 94, 95, 96, 99; influence re C P R B , 149 f., 1 5 1 , I j i ; disinterest in organizational matters: w a y of doing business, 150, 1 5 1 ; authority delegated to, by President, 151, 191, 194, 104, 105n\ credit due to, 191; enigma of, as a government official: his services appraised, 105 η House Committee on Foreign Affairs, hearings re U.S. participation in work of U N R R A , 170 Hull, Cordell, 7, 75, 76, 85n, 1 3 1 ; approval of W S A statement of policy, 1 1 9 η H u t t o n , Maurice I., 194 Ickes, Harold, 6 " I m p a c t of W a r on Civilian Consumption in the U . K . , U.S. and C a n a d a , " 1 8 m Import control, 81 ff. India, 187 Industrial M e t a l s Division of the National Defense, j Industrial Mobilization Plan, 134 Information and d a t a , responsibilities of C R M B , 3 1 , 40 f.; inadequate or unavailable, re shipping, 109, n o ; means of exchanging: subjects covered by reports, 1 1 7 ; C P R B interchanges of technical and statistical: channels of reporting, i 8 o f f . ; exchange of, on reconversion, 185, 188; C F B handicapped by difficulty in obtaining, 1 1 5 , 146; question o f access to free and full, 166 Inter-Agency Committee, C F B , 108, 1 1 3 , n6,131 Inter-Agency Committee on Allocations, 1 1 1 Inter-Agency C o m m i t t e e on Foreign Shipments (Crowley C o m m i t t e e ) , why and when established: functions, 141 ff.; allowed to lapse, 144 Inter-Agency Food Advisory Committee, C F B , 131 Inter-Allied Conference o f 1917, 100 Inter-Allied Shipping Board, 79 Inter-Allied Shipping Control, 86« Inter-American Shipping Committee, 78 Interdepartmental Shipping Priorities A d visory Committee, 81 Interior, D e p t . of, 179 International Allocations Arrangements in 1946, 66η

Index International Commodities Supply and Allocation Branch, C F B , 107 International Emergency Food Council, 151.-56; United Nations plans for establishment of, 153 (.; membership: Central and Commodity Committees, 2.54 f.; member-government responsibilities, 156 International Food Distribution Branch, C F B , 107 International organization and administration, insights and conclusions to be gleaned from experience of the Combined Boards, 157-73; must take cognizance of distinctive national characteristics, 160, 161; policies cannot be divorced from process by which effectuated, 161; need for recognition of psychological and social differences, 161; external relations, 161 ff.; gearing national agencies into international operations, 163 f.; problem of fragmentation, 168; importance of instrumentalities having no organic connection with U.N.: Ad hoc bodies, 171; why stress upon suitable symbolism must go side by side with development of administration, 171; see also Combined Boards International Rubber Regulation Committee, 5 International Trade Organization, 149 J a p a n , purchases in U.S., 6 Joint defense, economic, and production committees, U.S. and Canada, 131 Joint Economic Committee, 85 Joint Fertilizer Committee, 15 Joint Materials Board, 10; see also by its later name, Combined Raw Materials Board Joint Materials Conference, 91, 94 Joint Memorandum of Understanding between C P R B - C R M B and U N R R A , 167 Joint P o r t Mission, 114 Joint Shipping Board, the Elliott-Marvin Plan outlining a, with chart, 91 ff. Jones, Jesse, 4, 5, 75 Jones, Marvin, 131,133« Katz, Milton, 145, 149, 155; quoted, 159η King, MacKenzie, 133 Knowlson, James S., Deputy Member C P R B , 39η, 145, 146, 147, 148η, 149, i j i ; resignation: successor, 158 Knox, Frank, 90 Knudsen, William S., 10, 75, 76 Krug, member of W P B , 174η; of C P R B , 188

283 Land, Admiral, Chairman Maritime Comm., 7 1 ) 7Í. 77> 85», 89, 90, 96; U.S. member of CSAB, ι o i , 113, 111; attitude toward methods of British representative, n o n ; preoccupation with other duties: his deputy, i n ; position re Board's implementing the undertaking of Nov. 30, 1941, 116 ff.; President's directive to, 117η; the Land-Douglas statement of policy presented to CSAB, 119 Latin America, balsa wood situation, 34; effect of controls on U.S. policy, 61; meat from, 199, 100, 113 League of Nations, 170 Lend-Lease Act, ideas which reached their maturity in, 7; effect upon British war supply situation, 73; and shipping conditions, 73 f.; in U.S. marked departure from previous policy, 74; when passed, I91; origin of the idea, 191; purpose, 191 Lend-Lease Administration, Office of, 15, 37. 141, 150. 109, 113. 139; relationships with C R M B : claimant agency for British Empire, 46; consolidation into Foreign Economic Administration, 57; relation to shipping, 78, 87; agencies to facilitate program affecting agriculture, 193 ff.; previous purchases to be subject to C F B approval, 113; U . K . the major recipient of aid, 158 Lend-Lease Coordinator, 1 0 , 1 4 Liberated-area supply programs and committees, 54-60 Liberty Fleet, 80« Llewellin, J. J., 136 London Committee of the C P R B , 180 London Food Council, 110, 131 "London Raw Materials Board," 10 London Tea Committee, n o n Lyttelton, Oliver, 10; visit to, and pledge of shipping from, Roosevelt, 119η, I i 5 ; member of C P R B , 145, 151, 188; 1941 visit to U.S., and its purpose, 151; effects of his by-passing of C P R B , 151 f. M c l n t y r e , F. Ε., 46η Mackintosh, Canadian chairman, 85η Maclay, J. S., 130 Maritime Commission, 84, 85η, 88, 95, ι ο ί ; authority legally given to: functions, 71; chairman, 71 (see also Land, Admiral); proposals for increasing power of, 75 ff.; Division of Emergency Shipping, 77, 78, 80 f., 83; pressures and difficulties under which work carried on, 77 f., 89; plan for joint survey of shipping, 78;

284 Maritime Commission (Continuiti) powers under Warrants Act, 80 f.; information by, 83; relations with Shipping Imports Branch, 86 Marshall, George, 89 Marshall, Lee, 118» Marshall Plan, viii Marvin, Don: the Elliott-Marvin Plan, with chart, 91 ff. Materials Coordinating Committee, 9,14 Meat, moves in behalf of supply and shipment, 199, 100, 113; coordinated vs. competitive buying, roo; effects of relaxation of rationing, L41; reduction of supplies to Britain, 141. Medical supplies, 160η Medical Supplies Committee, 163 Merchant fleet, U.S., 71 Merchant Marine Act, 71 Merchant Shipping Mission, British, 73, 74, 99, " 3 . n o . 113. 130. 108 Metals Reserve Company, 4, 31 May, Stacy, h 4, 14j Military and civilian agencies, in U.S., background of struggle between, 134; see also Armed Services; Army; Combined Chiefs of Staff; Navy "Military period," $6 Ministries, British: chief central directing and operating, 8 Ministry of Economic Warfare, 34,111 Ministry of Food, 196, 100, 101, 2.13, 116; Minister's participation in 1945 tripartite food discussions, 141 Ministry of Production, 10, 39,43; respective areas of authority of Ministry of Supply and, u n ; British interests on CPRB to be represented by, 136; Minister's participation in 194$ tripartite food discussions, 1-41 Dept. of Programs and Planning, 13$ Ministry of Shipping, 86, 87, 101, 113 Ministry of Supply, 10, un, 19, 31, 39, 135 Ministry of Transport, 87, 113 Ministry of War, 111 Ministry of War Transport, 86, 87, 95, 97, 99, 103, 117, 113, «30 Missions, special: use of, 174», 181 Monnet, Jean, 131 Moscow Protocol, 10J, 115, 143; see also USSR Munich crisis, Roosevelt's view of situation, 191 Munitions, analyses of combined production, 181 Munitions Assignment Board, 15, 133, 138,

Index 141, 143; neglected by Minister of Production, i j i Nathan, Robert, 145, 149; quoted, 134 National attitudes and characteristics, importance in international organization, 160, 161 National Defense Act, 6 National Defense Advisory Commission, 4n, 6, 77, 134 National Defense Program, 9, 10 Navy, 1.16; interests in re shipping, 78, 84, 87, 88, 90, 96, 109; President's 1941 directive, 117»; see also Armed Services; Combined Chiefs of Staff Nelson, Donald, 14, 16, 19, 7i, «S«, 100, 116; member of CPRB, 14$, 147 Neutrality Act, 6, 71. Neutrality legislation, preceding Act of '939, 71; U.S. committed to, 191 Newhall, Arthur, 156, 159, 161, 163 New York Times, excerpt, 106 New Zealand, question of representation on CFB, 131,133 Nickell, L. P., 117» Non-Military Supplies Committee, 160-64; membership, 161, 163; terms of reference, 161 ff.; why and when disbanded, 164 North American Supply Committee, British, 8 North Atlantic Treaty nations, viii; economic cooperation, 170 Office of Agricultural War Relations, 108, 109, zi 8 Office of Defense Transportation, 179 Office of Emergency Management, 8; defense agencies, 9; War Production Board established within, 15 η Office of Food Program, F EIA, 137», 139 Office of Foreign Agricultural Relations, 193, 194,106,107,113,111,116,136; criticisms of: staff, 11 j Office of Inter-American Affairs, 81 Office of Lend-Lease Administration, see under Lend-Lease Office of Price Administration, 109,116 Office of Price Administration and Civilian Supply, 81 Office of Production Management, 9,10,15n, 134; concern with shipping, 78, 79, 81-86, 94; branches and sections, 81; early discussions re Anglo-American production, 131 Office of Supervision of Cargo Clearance, 114, " 9

Index Resident Minister of Supply in Washington,

Oils and fats, see Fats and oils Owen, G . S., 161 Pacific War Councils, ι Paris Inter-Allied Conference of 1917, 100 Parran, Thomas, 193, 194, 195η "Paying countries," 55 Peace, broad framework of the transition to, 148 Peet, W . C., l i j Perkins, Milo, 11, 18, 194 Permanent Joint Board on Defense, 9, 131 Personnel, see Staff Phraner, Stanley L., 161 President, see Roosevelt, Franklin D . Prices, effects of competitive buying, 100 Prime Minister, see Churchill, Winston Priorities and Allocations Advisory Committee, C S A B , 114-16, 110, i n Production Executive Committee, W P B , 158 Production plans and policies, 131-89; set also Combined Production and Resources Board Public laws covering shipbuilding, 80»

ship warrants,

80;

Rationing, effects of relaxation of, 14I Raw materials situation and control during World War II, 1-70; commodity reports and surveys, 13, 1 7 / . , 31, 35; allocations, 18-30, 47; development and procurement, 30-31.; surpluses: problem of releasing releasing controls, 51 ff.; liberated-area programs, 54 ff.; see also Combined R a w Materials Board Reconstruction Finance Corporation, 5, •i> 78, 83, 84, 95; creation of two corporations to acquire raw materials, 4 Reconversion period, integration impractica], 185; exchange of information re relaxation of controls, 185, 188 Records, official: a reservoir for the practitioner in field of international administration, vii Reed, represented C R M B in London, 11 Registry, C P R B , 176 Relief and rehabilitation, 165-74; see entries under Combined Boards; U N R R A "Relief countries," 55 Requirements and Allocations, 1 1 1 , 1 1 5 , 1 2 . 6 , 117.13S, 136" Research, 40 f.; see Information and data Research and Information Service, F A O , lijn Reserved Commodity Lists, 58, 61, 168 f., 173; postwar reduction, 61

136 Resources and production, see Combined Production and Resources Board Rhetts, Ε . , 19η, 45 Rice, Brazil's surplus, 137η Ried, L. S., 1.5η Roll, Eric, X07 Roosevelt, Franklin D., 6, 7, 94, 113, 174η, 186, 140; 1941 meeting with Churchill, I, 95; initiation of steps to insure cooperation, 1; letters and directives initiating control of international raw materials, 10 f.; release on C R M B , 15, text 16; proposed Executive Order, text, 17; reactions to it, 18 f.; moves in re shipping, 71, 76, 77, 80, 85, n o ; on Lend-Lease, 74; proclaimed unlimited national emergency, 78; strategy: relation between goals set and shipping to meet them, 88 f.; visit of Lyttleton to: pledge of additional shipping to Britain, 119η, i i j ; the undertaking of Nov. 30, 1941, 115 ff.; directive to Land re allocation of ships to Army and N a v y , 117n; approval of W S A statement of policy presented to C S A B , 119η; joint statement with Churchill re launching C P R B and C F B , with texts, 136Λ, 104 f.,; Bureau of the Budget a management aid of, 149; authority delegated to Hopkins, 151, 191., 194, 104, 105η; request to Britain for a Minister with authority to act, 151; view of Munich agreement: consideration of steps that should be taken, 191; conception on which philosophy of Lend-Lease rested: Hopkins the man to carry through, 191; authority under Lend-Lease Act, 193; policy decisions re food supply, 194J1; attitude toward British methods and tactics, uofn; death, 144 Rosenman, Judge, 174η Rubber, moves toward development of plantations, 4η Rubber Reserve Company, 4 Russia, see U S S R Salter, Sir Arthur, 168», 161; head of British Merchant Shipping Mission, 73, 74, 99, 113; viewpoint, policies, and way of doing business, 99-130 passim; CSAB Memorandum of Organization the work primarily of, 99; British represented on Board by, 101, h i ; appointment terminated, 113, 130; successor, 130 Schwenger, Robert B., 194,107

286 Scoli, David, 89, 91, 99; Executive Officer, C S A B , 111 Self, Sir Henry, 175, 181, 185 Shipping, dependence of C R M B upon, 31, 53; U.S. conditions at beginning of World War II, 71 ff.; effects of Merchant Marine Act, 71; of Neutrality Act, 7 1 ; Britain's situation, 71 ff., 77, 86; developments following Lend-Lease A c t , 73 ff.; control before Pearl Harbor, 75-87; legislation re appropriations, 75, 80; attitude of private interests, 77, 78, 83; groundwork for Anglo-American collaboration, 78, 91 ff.; warrants, 80 f.; import control, 81 ff.; lack of accurate data, 81; plans re joint interests of U.S. and Canada, 85; problem of shipping control after U.S. entered war, 87-91; strategy, 88; questions of international control agency, 91 ff.; formation of W a r Shipping Administration and C S A B , 95 ff.; British opposition to a common pool and to joint planning and programming, 99; Allied Maritime Transport Council of World War I, 99-101, 106; policies governing, 101 ff.; critical situation outlined in C o y secret report, 1941, 107 f.; problem of allocation and priority rating, 110 ff. {see also Allocations, shipping); Bureau of the Budget report on situation, 113 f.; 1941. pledge of, to Britain, 115 ff.; problem of availability for food shipments, 195, 198 ff., m , m , 140; see also Combined Shipping Adjustment Board; Maritime Commission; War Shipping Administration Shipping Priorities Advisory Committee, 84, 86 Ships, types built, 71, 8on; construction under Merchant Marine Act, 7 1 ; appropriations for construction, 75, 80; C S A B reports on: assembling and protecting of fleets, 117; control of use of, and allotment, 118; direction of operations, 119 Ship Warrants A c t , 80, 81 Sinclair, Sir Robert, 136, 145 Smith, Harold, 14, 96 Smith, Winford, 177η Somervell, L t . General, 147 Staff and staffing problems, Combined Boards: nature and functions of top members and other personnel, 174, X64 f.; C F B , 106, 107, 115, 115, 12.6, 131; C P R B , 145, 149η, 151, 176, 177, >79! C R M B , i x f., 37, 39 ff., 47, 59; C S A B , 105, III ff.

Index Stalin, Joseph V., 140 Stark, Admiral, 89, 96 State Department, 18, 19, 15, 58, 65, 81, 84, 170, 179, 187, 100, 101, 108, 109, 116; machinery to release controlled items for export, 6; authority over civilian agencies, 34; meetings with British leading to International Allocations Arrangements, 66; shipping matters, 78; F E A attuned to foreign policy as set by, 139; strengthening of, for better foreign policy leadership, 164»; see also Executive Committee on Economic Foreign Policy Statistics, see Information and data Steel, why C R M B not concerned with, 36; allocations of shot, 146; studies of: integration of combined program, 153 Steere, Lloyd, n o n Stettinius, Edward R., Jr., 3, 5, 75; quoted, 193.139 Stimson, Henry L., 90, 96 Stockpile and Shipping Imports Section, O P M , 81, 81, 83, 85, 86 Strategic Shipping Board, 89, 90 Sugar, tripartite agreement re, 144 Supply Priorities and Allocations Board, 10,13,15/1,84,134 Supreme Coordinating Committee for Home Affairs, 8 Surplus Marketing Administration, 193 Surplus property, 186 Sykes, Howard, 10, 1 1 , 45; Executive Secretary, C R M B , 1 1 Taffender, Admiral, 89 Talmadge of Lend-Lease, 89 Taylor, E. P., 155 Tea Allocation Committee, n o Technical Committee on Food for the British, 193 Technical information, see Information and data Textiles Committee, 163 Thorold, G., 115 Times, New Y o r k , excerpt, 106 Treasury Dept. appropriation act, amount to be expended, 3 Treasury Procurement, 84 Truman, Harry S., 174Π Twentyman, E., 104, 107 Union of Soviet Socialist Republics, 30, 69, 156; shipping to, 103, l i o n ; requests re food, 199; Moscow Protocol, 105, 115, 143; reasons for not inviting to membership of boards, i66n

Index United Kingdom, see Britain and the British United Kingdom Commercial Corporation, 7 United Maritime Authority, when and why created, 130η United Nations, 2.70, 1 7 1 ; consideration of world food crisis, i j 3; recommended establishment of International Emergency Food Council, 154 United Nations Relief and Rehabilitation Administration, 160, 154, ¿55»; first conference: task of formulating liberatedarea procurement programs, 54 f.; creation of: decision to utilize Combined Boards in the allocation process: resulting interrelations and services, 164-74, 137; said to have been premature and oversold, 168» United States, represented on the four combined boards, vii; initiation of boards by Britain and, 1.; pre-Pearl Harbor organizations and developments re conserving raw materials, 3^7; pattern of war administration, 8 ff.; emergence of defense agencies: joint board and committees set up between Canada and, 9; activities following entry into war, 10; part in organizing an international materials committee, 10 if. (see also C R M B ) ; C R M B acted as point of contact between United Kingdom and, 16; countries assigned to, for allocations, 18, 31; work of the boards reviewed and outlined: public announcement re their continuance, by three Heads of Government, with text, $3 f., 185 f.; sharp move towards de-control and expansion for peace: policy calling for freedom of enterprize and trade, 6z; retention of some controls, 64; factors that made shipping control a problem, 87; unsatisfactory British-American relations on C S A B , 97-130 passim; early unpreparedness for inter-nation task of combining production programs, 133; background of struggle between military and civilian agencies, 134; viewpoint of Americans working with C P R B , in agreement with that of British and Canadians, 155 f.; hearings re participation in work of U N R R A , 170; announcement re responsibility for its share of relief and rehabilitation supplies, 174; danger in U.S.British Empire involvement, 184; position re termination of boards after end of war, 187; prewar attitude toward war and neutrality, 191; why policy of, had

287 determined allocation of food, 140; tripartite discussions, 1945 food crisis, 141 ff.; basic policy re transition to peace, L48; extent and nature of Anglo-American collaboration: attitudes and characteristics involved in the relationship, 158—61 ; need for strengthening foreign policy framework, 164; see also departments, e.g., Agriculture, Dept. of; and also entries under Roosevelt, F . D . United States Lines, 73η United States Mission for Economic Affairs in London, 171. United States Operating Committees, C P R B , 163, 164, 173 United States Supply Sub-Committee of L A C , 58 Vorys, Congressman, quoted, 170 Wallace, Henry, 14, 18, 191 War, probelms of the aftermath of: transition to peace, 148 ff. War, Dept. of, 87, 96, 100, 116; see also Armed Services; A r m y ; Combined Chiefs of Staff War Cabinet, British, 8, 39 War Food Administration, 171; Requirements and Allocations Control in, 2.2.1, 2.1$, ι ι 6 , 1.1.7; established within Dept. of Agriculture: powers transferred to, 1.13; í41¡ food allocations, 1 1 6 , 1.2.7, 135> working relationships between C F B and, 12.8 ff., 131; processers and packers as officials of, 2.37η; differences between Foreign Economic Administration and: C F B as minor issue, 137 ff.; basis of agreement adopted, excerpts, 2.38; committee that took policy decisions over food allocations out of hands of, 141; position re sugar, 244 War Mobilization and Reconversion, Director, 141; quoted, 61 War Production Board, 135, 144η, 148, 15$, l o o ; contacts and role in re raw materials, 9, i j , i8, 19, i j , 2.8, 30, 37, 58, 59; when and how established, i j n ; tie-in with C R M B , 16, 1 1 , 39, 47 f.; commodity experts, 1 1 , 2.8, 40, 44, 47; reshuffled: new officials, 39n; Lend-Lease as claimant for the British before Requirements Committee, 46; move toward de-control, 60; steps to unwind complex war economy, 62.; concern with shipping, 108, 109; with production, 133, 146, 150; differences between Armed Services and,

288 War Production Board (Continued) 134; why it by-passed procurement agencies, 148»; effect upon C P R B , of willful neglect, 1J4; composition of Board: interrelationships between C P R B and, strengthened, 158; matter of procedure re handling requirements for relief and rehabilitation, 170, 171, 171; more liberal policy re allocations to liberated areas, 173; international problems in Batt's charge, 17$; use of personnel by C P R B and, 176, 177, 179; concern with food supply, 101, 103, 108, 1.09, 116; problem of fitting Food Requirements Committee into, 117; relationship between Dept. of Agriculture and, 118, 111; rapid expansion: lack of stability, 118; see also Food Requirements Committee Division of Organizational Planning, I49; proposals for effective organization of the C P R B , 138-41 Program Analysis Section, 145 Warrants, ship, 80 f. War Resources Board, 133 War Shipping Administration, 99, 106, 11 on, n j , 117, 110, H3> Il 5> I l 6 > "-7> '30. >79; events leading to creation of CSAB and, 80-97; date of Executive Order setting it up, 9$, 97; provisions of the Order, 96 f.; failures and inadequacies, 108; allocation

Index problem and control, 12.0, m ; directive to, re allocations to Army and Navy, 1x7»; would no longer tolerate participation of CSAB in allocation of vessels under U.S. control, 1x8; the Land-Douglas statement of policy presented to CSAB, 12.9η Wartime Trade Controls Committee, policy statement re U.S. participation in international allocation arrangements, with text 149-J ι Watkins, Ralph J., 92. Welles, Sumner, 3η, 18 Wheeler, Leslie Α., 194,103 White, Harold, 4$ Wickard, Claude R., 193-106 passim, 110», 2.16; memorandum from Roosevelt, announcing Combined Food Board, text, 104 f.; chairman, Food Requirements Committee, 109 Wilson, C. Ε., 158 Winant, Ambassador, xo Woolton, Lord, 196 Working-group relations with C R M B , 65 World War I, shipping and the Allied Maritime Transport Council during, 99i o i , 106; lesson to be learned from last days, 170 World War II, task of administration: differences between World War I and, 1