Office of the Historian

Conference files, lot 59 D 95, CF 100

No. 335
Memorandum by the Deputy Administrator for International Materials Activities (Ticoulat) of a Meeting on Raw Materials, Washington, January 7, 1952, 2:30 p.m.1
confidential
TCT CONV–8—Part I2
Washington, January 7, 1952, 2:30 p.m.

Present:

  • U.S.

    • Mr. Wilson, ODM
    • Mr. Fleischmann, DPA
    • Mr. Harriman, MSA
    • Mr. Bissell, MSA
    • Mr. Thorp, State
    • Mr. Winthrop Brown, State
    • Mr. Ticoulat, DPA

  • U.K.

    • Lord Cherwell
    • Sir Leslie Rowan
    • Lord Knollys
    • Mr. McDougall
    • Mr. Hall
    • Mr. Rickett
    • Mr. Waight
    • Mr. Senior
    • Mr. Wheeler

Lord Cherwell opened the meeting by pointing out U.K.’s need for steel both to take care of their defense obligations and to maintain their economy. He stated that after considering commitments made for the first quarter and other commitments made they would require for the last three quarters a total of 900,000 tons of steel or the equivalent in ore or scrap.

Mr. Wilson and Mr. Fleischmann replied that while we were anxious to do whatever we could for them and were hopeful that we could come somewhere near meeting their needs, it would probably be necessary for them to accept a large part of whatever steel we could allocate to them in the form of high priced ingots, sheet and strip, although the percentage of high priced ingots that they would be expected to take would be considerably less than that which was allocated to them in the first quarter.

Mr. Fleischmann pointed out that a large part of whatever we were able to do for them would have to be supplied in the last half of the year because our situation in the second quarter was bound to continue to be very tight. He also pointed out the political problems involved and the pressures that will be brought to bear the moment we allocated steel to the U.K. in the face of the fact that we were unable to take care of steel requirements of users in the United States. While in many cases these potential users in the United States would be unable to use the steel because of the shortage of copper and aluminum, this fact is not generally known by the public, and the general reaction would undoubtedly be that we were allocating steel to the U.K., the result of which was to curtail or shut down industry here.

In order to justify any allocation of steel that we might make, it was important therefore that the U.K. allocate to us some of the materials we need and on which our condition is probably more serious than theirs and included in these are aluminum, copper and tin. Lord Cherwell then stated that they are very conscious of our problem and were prepared to offer us 20,000 tons of tin for delivery during 1952 at a guaranteed price of 1,000 pounds sterling per long ton ($1.25 per pound) and that if their average cost from Malaya was lower they would adjust the price to us to their cost, but if their cost should be higher they would absorb the loss. Mr. [Page 759] Fleischmann stated that he had hoped that this would total 25,000 tons and that because of all the publicity that had been given tin, he felt $1.25 was an unreasonable price. After a great deal of discussion, the U.K. representatives agreed to recommend to their Government that we be offered the first half at a fixed price of $1.18 and the price for the second half to be negotiated after U.K. knows how they came out on the first half, with the understanding that the U.S. will be obligated to accept it if offered at $1.18 and the U.K. will be obligated to fulfill the second half if the U.S. should agree to pay $1.25.

In the case of aluminum, the U.K. offered an additional 7,000 tons. Mr. Fleischmann stated very firmly that this was a disappointment in quantity and would be unacceptable from the standpoint of justifying anywhere near the steel allocation that they requested. The U.K. representatives then agreed to ascertain if they could not increase this to 5,000 tons a quarter beginning with the second quarter. It was also pointed out to them that as a result of increased U.S. demands for aluminum because of our expanded Air Force program, if they expected a return of this it would have to be after our increased capacity came in, probably late in 1953, and that we would also have to ask them to defer our obligation to return the 10,000 tons already allocated to us until after our expansion program was in.

A considerable discussion was had on the question of copper and it was suggested to the U.K. that it would be not only helpful to us from the standpoint of requirements but from the standpoint of justifying our action if they could allocate to us at least 5,000 tons of copper from Rhodesia. They emphasized the fact that their copper situation was extrememly critical but agreed to review this and to let us know.

A general discussion was had on the question of adopting some uniform procedure for determining military requirements. The U.K. representatives were very much in favor of this if it could be worked out.

  1. Drafted on Jan. 12.↩
  2. For Parts II and III, see Document 342 and 352.↩