Statement by the President Upon Signing the Strategic and Critical Materials Stockpiling Act.

I HAVE TODAY signed the Strategic and Critical Materials Stockpiling Act because it is important to the national interest that this Government have the power to acquire stockpiles.

It is only because of the overriding importance of this purpose that I am able to overcome my reluctance to signing a bill which reaffirms the application to stockpile purchases of the provisions of Title III of the Act of March 3, 1933 (47 Stat. 1520), known as the Buy American Act. Those provisions will not only materially increase the cost of the proposed stockpiles but will tend to defeat the conservation and strategic objectives of the bill by further depleting our already inadequate underground reserves of strategic materials. Furthermore, there can be a serious conflict between those provisions and the foreign economic policy which this Government is actively pursuing. It also seems to me that the application of the Buy American Act may frequently hamper the effective achievement of the essential purpose of the legislation which is to enlarge the stock of vital raw materials available within our borders in time of possible emergency.

The Buy American Act requires that only articles produced or manufactured from materials originating in the United States shall be purchased for public use. However, the Act also provides that exceptions to this rule may be made when Buy American purchases are determined "to be inconsistent with the public interest or the cost to be unreasonable." This provision clearly indicates that the stockpiling program should not be used as a means of generally subsidizing those domestic producers who otherwise could not compete successfully with other domestic or foreign producers. Furthermore, to ensure that the necessary stockpiles are accumulated as rapidly as deemed advisable and with a minimum cost to the public, this Act should not be used as a device to give domestic interests an advantage over foreign producers of strategic materials greater than that provided by the tariff laws.

It is the policy of this Government to work for international action to reduce trade barriers. We have proposed to other countries a set of principles governing trade, and look forward to the successful conclusion of broad international arrangements embodying the essential principles of these proposals. Pending the conclusion of such arrangements, it is the policy of this Government to avoid taking measures that will raise barriers to trade or prejudice the objectives of the forthcoming discussions. We are asking other countries to follow similar policies.

The United States is opposed to governmental policies fostering autarchy, for itself as well as for others. Encouragement of uneconomic domestic production and unjustified preferential treatment of domestic producers destroys trade and so undermines our national economic strength. A large volume of soundly based international trade is essential if we are to achieve prosperity in the United States, build a durable structure of world economy and attain our goal of world peace and security.