Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

350. Memorandum From the Under Secretary of State (Ball) to President Kennedy⁰

Washington, March 28, 1962.

SUBJECT

• Stockpile Disposal Policy

The report of the Executive Stockpile Committee, submitted to you on March 19, 1962,¹ noted agreement of all the agencies concerned except on one point.

Under existing procedures the Director of the Office of Emergency Planning (formerly OCDM) is required to obtain the approval of the Department of State, among other agencies, before he authorizes the disposal of excess stockpile materials. The majority of the Committee has recommended that the Director be permitted to act after consultation with the State Department and other agencies; it has recommended the elimination of the requirement that the State Department approve stockpile reductions.

I fully recognize the need for disposing of excess stockpile materials as rapidly as possible. However, it is essential that this be done without disrupting world commodity markets, which are in many cases extremely sensitive to any move on our part to reduce stockpiles.

A fall in commodity prices can, of course, be disastrous to less developed countries dependent for their foreign exchange earnings on one or two commodities. The reactions with regard to recent programs for the disposal of rubber and tin have clearly shown that the business of reducing stockpiles can have serious foreign policy repercussions. I therefore feel that we should retain the requirement that the approval of the State Department be obtained prior to the disposal of surpluses. In view of the extreme sensitivity of many of these markets the mere act of eliminating this widely known requirement would be likely to create dismay and confusion.

At the same time, I am sympathetic with the desirability of reducing the delay which has sometimes occurred in obtaining the necessary approval for disposal plans. The regulations might provide an appropriate time limit. For our part we would be willing to agree with the other agencies that if we do not object to a proposed disposal plan within thirty days of its receipt our approval could be assumed.²

George W. Ball

0. Source: Kennedy Library, National Security Files, Kaysen Series, Economic Policy, Stockpiling of Strategic Materials. Official Use Only.
1. Document 349.
2. A memorandum from Acting Secretary of the Interior John M. Kelly to President Kennedy, April 2, accepted Under Secretary Ball’s suggestion for a 30-day limit on agency review as consistent with the Department of the Interior’s position set forth in that Department’s letter of March 21 to President Kennedy, urging that the Departments of State and Interior retain authority for approving or disapproving stockpile disposals affecting their programs and objectives. (Filed with the source text)