Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

301. Memorandum From Attorney General Katzenbach to the Director of the Office of Emergency Planning (Ellington)¹

Washington, November 15, 1965.

RE

• Disposal of Copper from the National Stockpile

You have inquired as to whether or not copper now contained in the national stockpile could be disposed of by the United States under Section 5 of the Strategic and Critical Materials Stockpiling Act.²

Section 5(a) provides that a release of material from such a stockpile may be made on order of the President at any time when in his judgment such release is “required for purposes of common defense.” Section 5(b) permits such a release on order of an agency designated by the President in time of war or during a national emergency with respect to common defense proclaimed by the President. While a declared national emergency with respect to common defense continues to exist, the President has not delegated the requisite authority except in the event of an actual armed attack upon the United States, whichever subsection is used. The language of Section 5, taken together with its legislative history, indicates that materials from the strategic stockpile should be released only where there exists a clear relationship between their release and the common defense purposes for which they were acquired.

The authority vested in the President to make this determination is broad and Congress did not seek to set specific standards for its exercise. The legislative history, however, suggests that the President must make a finding which relates the disposal to common defense. He cannot use this authority where he believes the release of materials merely to be in the national interest although not required for the common defense. Concern was expressed in Congress that this authority might be used for the commercial advantage of a particular industry or in such a way as to discourage “development, expansion, and long-term financing,” thus having “an unhealthy and oppressive effect on our mining industry.” It was further stated that stockpilings “are for the national defense and should be used exclusively for that purpose. Any release for purposes other than national defense should be safeguarded …” by disposition with express approval of Congress as provided by Section 3 of the Act.

This interpretation of Section 5 as permitting disposal only for purposes of common defense was adopted by Attorney General Brownell in 1954. At that time Mr. Brownell said that a barter deal involving delivery of industrial diamonds to the stockpile in exchange for gem stones and a purchase of surplus wheat from the proceeds of the sale of those stones was not permissible. He found no relationship between the release of such stones from the stockpile and any common defense purpose; in effect it was an agricultural disposal program and the release of diamonds on the domestic market had no defense purpose whatsoever.

It would seem, therefore, that an essential legal requirement is that there be a sufficiently close relationship between the disposal of material and the common defense purpose.

The present situation with respect to the copper market, and its relationship to our defense purposes, is described in the attached memorandum from the Chairman of the Council of Economic Advisors.³ His views are concurred in by the Secretaries of State, Defense, the Treasury and Commerce.

The principal point made by Mr. Ackley is that a combination of extraordinary developments peculiar to the copper industry, arising from greatly increased defense efforts in Viet Nam and recent international political disturbances, threaten to disrupt and distort the copper market despite the best efforts of the industry to supply the market. This market disruption will lead to strong inflationary developments not only in copper essential to defense needs but also more generally in the economy. Such developments would seriously impair our defense efforts in Viet Nam and could be averted only through release of copper in the strategic stockpile.

Unlike the situation in the case posed to Attorney General Brownell with respect to the further stockpiling of diamonds, there is clearly a relationship between the release of stockpiled copper and common defense purposes. The remaining legal question is whether this relationship is sufficiently strong and sufficiently direct to justify the use of Section 5.

While there is nothing in the statute and the legislative history dealing explicitly with this point, it is clear that Congress did not wish to limit the President’s disposal authority simply to direct military requirements. Had Congress so intended, it would have been easy to specify in the law itself. It is equally clear that Congress did not wish, as Attorney General Brownell indicated in his opinion, to permit release of strategic stockpiles for economic reasons unrelated to defense. Between these two extremes Congress vested discretion in the President and to that end used broad and general language.

This interpretation is reinforced by the extent to which Congress emphasized in debates, and elsewhere in the Act, the need to avoid market disruption and distortion and the inequities which could result from release of stockpiles unrelated to defense purposes. In the present situation the release of stockpiled copper would help to remove inequities and to eliminate distortions in the market situation.

For these reasons, I believe that, as a matter of law, the President could authorize the disposal of copper from the strategic stockpile on the basis of the facts contained in the attached memorandum.⁴

Nicholas deB. Katzenbach

1. Source: Johnson Library, Confidential File, Oversize Attachments 12/65, Box 161. No classification marking.
2. 50 USC 98b; 60 Stat. 598.
3. Document 296.
4. In a November 17 memorandum for the President, Ellington forwarded Katzenbach’s opinion on the President’s authority to release copper from the national stockpile. (Johnson Library, Confidential File, Oversize Attachments 12/65, Box 161) President Johnson accepted Ellington’s recommendations, and those of the Secretaries of State, Treasury, Defense, and Commerce and the Chairman of the Council of Economic Advisers. (Memorandum from President Johnson to Ellington, November 18; ibid.) Secretary of Defense McNamara announced the release of 200,000 tons of copper on November 17. (OAS/PA News Release, November 17; ibid.)