Letter to Secretary Sawyer on the Steel Requirements of the Armed Forces.

Dear Mr. Secretary:

Section 18(h) of the Selective Service Act of 1948, which I approved on June 24, 1948, authorizes the President, through the Secretary of Defense, to require all producers of steel to make available to concerns having orders for steel products or steel materials required by the armed forces, "such percentages of the steel production of such producers, in equal proportion deemed necessary for the expeditious execution of orders for such products or materials."

I have given serious consideration to the problems posed by this legislation. I am, of course, prepared to exercise this authority should it prove necessary. However, the Secretary of Defense has advised me that the presently planned procurement programs of the armed services will require about 2 percent of anticipated steel production in the fiscal year beginning July 1, 1948, and less than 3 percent in the fiscal year 1950. It should be possible to insure fulfilment of a program of this limited size through the voluntary cooperation of industry.

Under the provisions of the act, the mandatory authority of section 18(h) would be exercised through the Secretary of Defense. The Secretary of Commerce, on the other hand, has already put into effect a number of important voluntary allocation programs under Public Law 395. It is highly desirable that all governmental operations relating to allocations of steel be concentrated in a single agency, and that the several allocation programs be coordinated and integrated into a single, overall program.

For these reasons, therefore, I do not consider it appropriate to invoke the authority contained in section 18(h) at this time. Instead, I am asking you to proceed immediately to develop a voluntary allocations program under the authority of Public Law 395 covering the requirements of the Armed Forces for steel mill products and steel contained in manufactured products. In setting up this program, it is essential that adequate provision be made to insure that small businesses are in a position to bid on orders for the Armed Forces on equal terms with larger producers, insofar as the availability of steel to meet their production requirements for such orders is concerned.

It will be necessary, of course, for your office to work in the closest possible cooperation with the National Military Establishment in the preparation and execution of this program. A copy of this letter is being sent to the Secretary of Defense.

Very sincerely yours,

HARRY S. TRUMAN

[Honorable Charles Sawyer, The Secretary of Commerce, Washington, D.C.]