Memorandum and Statement of Policy on the Need for Industrial Dispersion.

To the Heads of Executive Departments and Agencies:

There is hereby promulgated, effective immediately, the attached Industrial Dispersion Policy which I have approved on the recommendation of the Chairman of the National Security Resources Board, the Director of the Office of Defense Mobilization, and the Chairman of the Munitions Board.

This policy shall be adhered to by all Departments and Agencies with respect to programs under their control.

The Director of the Office of Defense Mobilization, in carrying out his task of directing, controlling, and coordinating all mobilization activities of the Executive Branch of the Government, shall establish general standards with respect to dispersal, which shall be followed in the granting of certificates of necessity, in the allocation of critical materials for construction purposes, and in the making of emergency loans growing out of defense production.

I shall look to the Chairman of the National Security Resources Board to keep me advised on the progress of this program.

HARRY S. TRUMAN

STATEMENT OF POLICY ON INDUSTRIAL

DISPERSION

The strength of our national defense and in fact our continued existence as a free nation depend largely upon our industrial capacity. The core of this capacity, so essential to our survival, lies within a relatively few densely built up centers.

Since 1945 we have experienced a period of unprecedented industrial expansion, but, except for a few examples, there has been no pronounced trend away from these concentrations. Some eighteen billions in new plants and equipment were spent annually during the past 4 years, largely in areas already highly industrialized.

Although we are increasing our defense efforts, the danger of atomic attack grows and demands that new and more positive policies be put into effect to obtain added security for our industrial establishment without jeopardizing its productive efficiency.

In September 1948 the Government, through the National Security Resources Board, issued a report, "National Security Factors in Industrial Location." The report stressed the fact that dense agglomerations of industrial plants were inviting targets for the enemy and that plants separated in space would better survive an atomic attack.

These general conclusions are as sound today as they were 3 years ago. On these first principles of security our basic policy still must rest.

Since publication of this report, several factors have added to the urgency of the problem:

1. The evidence that Russia had a successful atomic explosion.

2. The probability that a strong enemy air attack could penetrate any defenses.

3. The outbreak of hostilities in Asia as an indication of the semi-peace conditions under which we are living.

Obviously, in the light of the above, what was, in 1948, a set of desirable objectives, is today a subject of major concern and one vital to our national security.

It is recognized that the major centers of industrial production have become highly integrated and that a part of their efficiency is due to their concentration. A dispersion policy to be effective and realistic must not be allowed to cripple the efficiency and productivity of our established industries, lest the remedy become worse than the ill. Our policy, therefore, must be directed mainly toward the dispersal of new and expanding industries.

Sites which meet dispersion security standards can be found in local marketing areas adjacent to industrial or metropolitan districts in all sections of the country.

Thus, this policy can be made to fit the economic and social pattern of any part of the country.

The fullest cooperation of industry, labor, and local and State governments, together with all of the measures which the Federal Government can take, will be needed to alleviate the present situation. With the necessary technical guidance as well as the positive inducements which we will give, much can be accomplished.

All departments and agencies of the Government concerned with this problem will be called upon in carrying out a coordinated policy leading to effective industrial dispersal within the concepts described above.

To this effect, the following measures will be taken:

1. To the greatest extent practicable, certificates of necessity, allocations of critical materials for construction purposes, and emergency loans growing out of defense production will be confined to facilities which meet satisfactory standards of dispersal.

2. Primary consideration to dispersal factors will be given in locating facilities built by the Federal Government.

3. Defense contracts will be awarded, and planning under Department of Defense production allocation programs will be conducted in such a manner as to make maximum use of facilities located in dispersed sites.