Conservation of Strategic Materials

Report Outline
Recent Expansion of the Defense Program
Materials Subject to Priority Action
Manufacturers Affected by Conservation
Effects on Consumers and Retail Merchants
Special Focus

Recent Expansion of the Defense Program

Proposed Cut in Automobile Production

Reduction of 50 per cent in the production of automobiles, light trucks, domestic refrigerators and mechanical laundry equipment, proposed on July 19 by Administrator Leon Henderson of the Office of Price Administration and Civilian Supply, is the first really drastic step taken by the government to reduce the volume of new consumers' goods in order to conserve strategic materials needed for defense. The 20 per cent cut in production of 1942 automobiles which was agreed to earlier would not have led to an output below normal, because the number of 1941 model automobiles and trucks produced is expected to be the largest of any year except 1929.

Tentative schedules proposed by Henderson would allow production of about 2,400,000 passenger automobiles and light trucks in the year beginning August 1, 1941, plus about 600,000 heavy trucks, whose production will not be curtailed because they are needed to augment transportation facilities. Factory sales of automobiles and all trucks in the year from August 1, 1939, to August 1, 1940, amounted to just over 4,000,000. Factory sales from August 1, 1940, to June 1, 1941, as reported by the Department of Commerce, were 4,285,000, and production in June and July should be at least 650,000 if it has continued to be 20 per cent higher than last year. The net result of Henderson's order, if carried out as planned, would therefore be to reduce the production of motor vehicles to about 75 per cent of the output in the year ended August 1, 1940, and to about 60 per cent of total production in the year ending August 1, 1941.

Expansion of Defense Needs; Cuhtailment of Civilian Supplies

This proposed curtailment of consumers' durable goods, much more radical than anything which was anticipated a few months ago, is made necessary by a substantial increase in the size of the defense program, and further increases which are now anticipated. At the end of April, the figure of the Office of Production Management for total appropriations, authorizations, R. F. C. allotments, and other items for defense, including British war orders and lend-lease authorizations, was $39,403,000,000. The latest figure, as of July 15, is $50,785,000,000. The continued growth of this overall total has meant scrapping original estimates of the materials required for defense, scrapping earlier ideas of maintaining a normal flow of civilian supplies, and frank recognition of the fact that drastic measures must be taken if the defense program as now laid out is not to be hampered by shortages of raw materials.