RAW MATERIALS: KEY TO WORLD REARMAMENT

In the race to rearm, the U.S. and other nations of'the free world have run smack up against a key problem: How should the free world's raw materials be divided? By overlooking this problem, while it tried to grab up a lion's share of all the strategic materials in sight, the U.S. has already stirred up a storm of hostility among its allies.

Britain's Harold Wilson quit his cabinet post as President of the Board of Trade, right after Aneurin Bevan left, because he thought that the U.S. was starving Britain on raw materials. Said Wilson: "British industry stands disorganized and threatened by paralysis [because] we have not had our rightful share of the raw materials available." Europeans raised the cry that the U.S. intends to rearm by crippling the industries of Europe.

The problem is too big for a quick & easy solution. The U.S. consumes more than 50% of the world's strategic raw materials. But the U.S. is also the world's biggest producer of raw materials. As much as 70% of the world supply of molybdenum (used to harden steel for cutting tools) has come from a single mine at Climax, Colo.; the U.S. produces 90% of the world's high-grade sulphur, is the largest producer of copper, exports more cotton than any other country. But in other materials, notably metals like tungsten and cobalt, the U.S. is a comparatively big user and small producer:

1950 World % of 1950 1950 % of Production Production total consumed Commodity (in tons) in U.S. in the U.S. Copper . . . . . . . . . 2,741,776 41% 50% Lead . . . . . . . . . . . 1,700,000 34 51 Zinc . . . . . . . . . . . . 2,010,048 45 50 Manganese . . . . . 3,375,000 5 50 Tungsten . . . . . . . 8,816 22 35 Cobalt . . . . . . . . . . 6,500 14 63 Nickel . . . . . . . . . . 170,000 1/2 50 Molybdenum . . . . 15,680 90 83 Wool . . . . . . . . . . . 4,000,000 (lbs.) 3 16 Cotton . . . . . . . . . . 31,400,000 (bales) 52 29 Natural Rubber . . 2,060,740 0 39 Tin . . . . . . . . . . . . . 182,560 0 37

In normal times, no one begrudges the U.S. its big share. In fact, many producers would have no market without the U.S. But when war broke in Korea, almost every nation began to grab strategic materials--and the U.S. grabbed faster than anyone. As the U.S. bought materials for stockpiling prices rose so high that many nations were forced out of the market.

Price Gouging. This was not all the fault of the U.S.; many a producer used the shortages to do some price gouging. The most conspicuous example is tin, controlled by a cartel run by tin men of Great Britain, Belgium, Holland and Bolivia. After Korea, tin jumped from 78 3/4-c- a lb. to $1.82, forcing the RFC to step in and do all the buying for the U.S. Said RFC Administrator W. Stuart Symington: "They murdered us on prices." To stop the slaughter, RFC went on a buyers' strike in March, and tin settled to about $1.50. Two weeks ago, Symington announced the U.S. would not pay more than $1.36 for tin, last week cut the price another 7-c- to $1.29. But price is not the whole problem. Even if every nation could afford to buy, there is not enough of many raw materials to go around.

Emergency Rations. How can the problem be solved? The 25-nation International Materials Conference last week was meeting in Washington to find some friendly method of splitting up the world's raw materials. An allocation plan for sulphur has already been drawn up, and plans are soon due for lead and zinc. The conference has already sent an emergency supply of 3,000 tons of newsprint to France.

But the conference has one big weakness: its committees are just fact-finding bodies with no power to force an agreement. Some nations which have shouted the loudest at the U.S. grab for raw materials have stalled the conference while they did some grabbing of their own. The wool committee has been deadlocked for weeks because Australia, which produces more than 25% of the world's wool, will not pool its wool and sacrifice the fancy prices it has been getting at auction. There are other complications. Britain is still shipping such strategic items as electrical and generating machinery to Russia in return for badly needed timber, oats and barley.

Muscle Flexing. The U.S. could probably force the other nations into line by throwing its economic weight around. But the State Department has said no. It fears that such pressure might crack the fragile U.S. political alliances. To show that the U.S. is willing to give as well as take, U.S. Defense Mobilization Chief Charles Wilson announced a priority plan two weeks ago which would pave the way for a workable allocations scheme at the expense of U.S. civilian production. In a quick trip to Europe, Wilson became convinced that civilian production is about as low as it can be if Europe is to remain afloat economically. This is true notably in Britain. The squeeze on civilian goods will have to come in the U.S. Thus, Britain will get a priority to purchase U.S. copper for its jet planes, even if it means that U.S. TV-set makers must do without it; France will be able to buy molybdenum for its steel plants, even if U.S. auto production has to be cut back further.

So far the plan is a one-way street. Wilson thinks it should be two-way, that other nations, like woolrich Australia, should set up similar priority systems to take care of U.S. needs. Unless this is done, the plan will fail. Then the U.S. will have only one way to solve the raw materials problem: flex its economic muscles and push its allies into line.

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