the Critical Materials Stockpile Act of 1946, and section 8 of the Trade Agreements Extension Act, but most importantly, by the National Security Act of 1947, as amended.

In a broad sense, these authorities involve the responsibility of the President as a final arbiter in the distribution of critical resources, measures to stabilize the economy, administer price, wage and rent controls, and advise on the adequacy of all national resources necessary for the national security.

Since there have been some misconceptions in the past with respect to these functions, there is need to be quite clear and specific as to what is involved:

(a) Emergency resources management functions

The mobilization and management of the Nation's resources basically involve all actions necessary to assure the most effective, balanced and unified development and use of all resources in the national interest. Emergency resources management is one element of this picture. It involves formulating plans for all the peacetime and emergency actions necessary to insure maximum use of our resources under emergency conditions.

All possible steps must be taken before and during an emergency to insure that the right things will be available for the right purpose, in the right places, in the right amount and at the right time in order to "squeeze" the greatest possible benefits out of the Nation's resources and to meet the emergency in as orderly a manner as possible. Among other things, these emergency management activities entail the development of an appropriate organizational structure and plans needed to mobilize and manage the Nation's resources; the development of appropriate allocations, priorities and other systems and procedures to insure the orderly flow of resources in the national interest; the preparation and issuance of policy statements, directives, and regulations needed to insure control and use of resources; and other plans and programs such as those dealing with stockpiling and strengthening the mobilization base.

OEP will emphasize the development of emergency resources management plans and studies as called for in the National Security Act of 1947.

NSRB and its successor agencies undertook a number of resource studies, particularly of the supply-requirement type, that had an influence upon judgments of Federal officials as to the Nation's resources capacity and readiness to meet emergency requirements.

Each of these studies, however, has been a separate analysis which generally has been limited in scope and has been made without relation to similar analyses of other resources. Each has been based on a different set of standards or assumptions. A new approach is needed.

Positive planning and directing of a new comprehensive interrelated pattern of supply-requirements studies by OEP will furnish the basis for

(a) Developing a complete pattern of emergency requirements in relation to specific national security needs;

(b) Estimating emergency requirements and determining how much of them are really essential;

(c) Identifying the potential resource weaknesses and resource deficiencies in relation to emergency requirements;

(d) Developing measures that can be taken in peacetime to correct those weaknesses and deficiencies, and thus put the country in a better position to meet an emergency;

(e) Determining what readiness measures are necessary to meet requirements; and

(f) Determining the nature and extent of controls required in an emergency to overcome indicated deficits.

The peacetime conduct of such studies will also result in the identification of the roles of all concerned Government agencies and in the orderly and effective administration of this resources analysis function. This will affect many Federal agencies including DOD, nearly all other executive departments, and many independent agencies. The procedures and organizational relationships involved must be determined in peacetime as an important readiness measure. They must be in being early in an emergency and should not be left for development after the emergency has begun.

This point is worth dwelling on for a moment in the interest of full understanding. In an emergency, many essential activities must be carried on simultaneously by a number of organizations whose programs must be supported by drawing upon the available resources of the country. The military services must be supported; foreign_commitments must be met; food must be produced, processed, and distributed; fuel and energy (petroleum products, gas, coal, electric power) must be produced and distributed; a wide variety of goods and equipment must be produced by the industrial facilities of the country in order to meet military and essential civilian needs and to support the functioning of the economy; transportation and transportation facilities (land, air, water, highway) must be available; the Nation's telecommunications network must be supported; the country's manpower must be mobilized, trained, inducted into military service, and directed to a wide variety of essential civilian channels; and steps must be taken to stabilize the economy through such measures as price, wage, and rent control, consumer rationing, and appropriate fiscal and monetary policies.

Each of these activities is of major importance, in fact essential. Each must be carried out by an organization having primary responsibility for devoting attention and energies to it. In some cases, an existing Government agency is ready and equipped to pick up the responsibility immediately. In other cases, an existing agency may have to be rapidly expanded or scattered units may have to be brought together in a new organization. In some instances, new organizations will have to be established.

Each of the organizations responsible for these essential activities will begin "operating" from the outset of an emergency. Each, relying on previously prepared plans and on an analysis of the actual situation with which it is faced, will formulate a program and course of action to meet that aspect of the emergency for which it is responsible. It will estimate the resources required to carry out that program.

DOD will do this for the military services and for much of the civil defense program. The Department of State will do it in order to meet foreign requirements; the fuel and energy agency will do it to

restore fuel and energy facilities, and to produce and distribute all forms of fuel and energy; and the other organizations, such as those dealing with food, industrial production, telecommunications, transportation, will do the same for their respective areas of concern.

It will be necessary at the earliest possible time and periodically thereafter, for the many organizations involved to present to a single control unit information about their proposed plans of action and about the resources required to carry out these plans. This must be done through a well understood system that must be developed and be made generally known before the emergency. The control unit must weigh the total resources required against the total resources available. The unit must then make a general determination of steps that might be taken to increase resources availabilities. It must also make a determination of what resources will be assigned or allocated to carry out each of the proposed operations. The organizations will have to modify their operations accordingly.

The development of this central supply-requirements analysis and claimancy and allocation role is the heart of national resources management, and is the unique responsibility of OCDM, soon to be OEP, as the President's principal staff arm in this area of preparation. (b) Resources development function

National security requires that resource plans not be limited just to wartime or emergency situations as cited above, nor can they be limited to only domestic considerations. There is need to consider our basic resource posture and its developmental needs in relation to continuing and future considerations on the international scene.

Since the enactment of the National Security Act of 1947, the Defense Production Act of 1950, and other organic statutes which together constituted the charter of NSRB, the ODM, and now the OCDM, the evolution of world events has compelled a more global involvement in the security resources considerations.

The United States is irretrievably committed to a system of worldwide alliances and aid to newly developing countries in a long-term conflict with militant communism.

The role of resources development for the Nation's security in this struggle, as well as to meet a limited war or the results of general war involving nuclear attack, is obviously a major one. Unless the economics effects on our friends and allies are incorporated with our domestic planning for the development and management of our domestic resources, our actions might cause them economic damage, thus weakening our alliances and the free world strength.

It is obvious, therefore, that it would be shortsighted and inadequate for OCDM to limit its concern only to problems incident to meeting an attack. The term "mobilization" has taken on a broader and more long-range connotation in light of current and future world conditions.

Furthermore, the capability to manage resources effectively under nuclear attack conditions, in the final analysis, must be built on a foundation of capability and knowledge of the current and long-term resources needs for national security.

Under the President's direction, OCDM is accordingly concerning itself to a far greater extent than it has in the past with the basic resources strength of the Nation and with the further development of

that strength. A wider, more fundamental and a longer range view is required than has obtained in the past. We must be interested in knowing not only where the Nation stands today with respect to major resources areas, but where it will be 5, 10, and 20 years hence. We must be concerned about what steps should be taken to improve our posture in these regards to meet both peacetime and all types of emergency requirements since all are intimately related. We must, in short, concern ourselves not only with problems incident to meeting an attack but also with those matters involving long-range security.

(c) Participation in economic warfare and cold war matters

OCDM has an additional peacetime role in connection with the resources aspects of economic warfare and related cold war problems and with matters pertaining to resources development in, and future resources availabilities from, underdeveloped and other countries. These are resource matters to which the new OEP will need to address greater peacetime attention as a participant in the Federal Government's efforts on this front. Other Federal agencies are also involved. Planning in this regard is now splintered among a number of agencies. There is an urgent need for more effective coordination and direction of these activities. This general need has been recognized and stated in a recent report of the Senate Committee on Foreign Relations.

In addition to its general responsibilities in these economic warfare and cold war areas, OEP will continue to have specific obligations for making recommendations to the President and responsibilities for advising other agencies of the security effects on the country's economy under certain existing programs. Among these programs are the Trade Agreements Extension Act; the Buy American requirements; the program for disposition of surplus agricultural products overseas; and certain operations under the Helium Act and the Export Control Act.

Mr. Chairman, this concludes my prepared statement.

I am sorry that the phase of it that dealt with economic mobilization and the economic base and preparation was so lengthy, but it is such a vital thing which has not been accented by this agency in the past that I wanted to bring it home to the committee in this statement. Thank you for your patience and consideration.

BUDGETING FOR DELEGATED FUNCTIONS

Mr. HOLIFIELD. This is, as you say, a quite extensive statement, and it deals with a great many facets of what you conceive to be the function of the Office of Emergency Planning.

Now, there has been quite a bit of speculation that with the removing of the shelter function and certain other functions to the Department of Defense your office might have anything to do. But in looking over this wide sphere of planning which you are going to be charged with, it seems to me that you are going to have a tremendous function, and a very important function.

We were very much worried about the delegation of functions under previous orders. We followed through some of those delegations of functions to other agencies, and we found that they were com

pletely lost in the major and primary purposes of those different Government agencies.

One of the most ridiculous ones that came to our attention was the allocation of responsibility for reducing urban vulnerability to the Housing and Home Finance Agency with a $16,500 budget to take care of this, which gave employment to one man and one secretary. And of course, in the delegation of functions to the different agencies, unless they are properly supervised and coordinated and funded, you are going to have a lot of these functions dropped in the cracks.

Now, on page 20, I noticed you said

each agency will be asked to assume full responsibility for the job which it has been given, including the responsibility of obtaining in its budget the necessary funds to do the job, beginning, on a general basis, in fiscal year 1963. Too often in the past, agencies have taken the position that they were doing what they were being paid to do, in addition to their normal work. The concept which must become accepted is that nonmilitary defense preparation is a part of their normal responsibilities.

Now, here is the area where I think we are going to have to scrutinize assigned functions very carefully. And I am somewhat at a loss at this time to understand who has the control of the funds which they will request to fulfill the function assigned to them. Will the Office of Emergency Planning in effect evaluate the function which they perform, and will OEP go to the extent of preparing a budget and recommending a budget for them to include in their normal budget?

Mr. ELLIS. Mr. Chairman, as you recall, historically the request was made a number of years ago that each agency seek its own budget requirement from the Congress. And this was objected to, and thereafter the agency requirements were consolidated and included in the OCDM general budget. A similar request was made this year for the 15 departmental delegations that we have outstanding under Emergency Preparedness Orders to agencies, and was granted by the Congress to OCDM and is now before the conference committee for adjustment.

The future is what you are thinking in terms of rather than in the past.

Mr. HOLIFIELD. That is right, because I am afraid that in the delegation of functions there will develop independent planning and independent concepts as to the amount of funds needed for that planning. Now, I want to know-the question I asked directly is this, will the Office of Emergency Planning have such scrutiny of the overall plan that they will be able to say, let us say, to the Department of Health, Education, and Welfare, which is assigned certain medical procurement and stockpiling functions, "your function this year should be to procure $50 million worth of supplies, and we recommend that you request in your budget $50 million worth of supplies."

Assume that, for reasons which are for the protection of the overall budget, they decide to cut that $50 million down to $25 or $30 million, and include it in their overall budget. Now, at that point what action does the Office of Emergency Planning take? What can they take under their designation of authority from the President?

Mr. ELLIS. Now, this year the Congress is making the appropriation direct to the OCDM. Now, in view of the Executive Order of the