Page:Legislative History of the AAF and USAF.djvu/104

 �This Page Declassified lAW EO12958 could base some ol its legislation dealing with the US-iF and the other armed serv- ices. 9 Internatwnal developments takang place in 1949 and 1950 had the effect of tremend- ously stimulating and complicating the USAF procurement program whaeh had be- gun to diminish as a result of budgetary cuts forced by the admimstration's economy program in !949. The United States sgned the North Atlantic Treaty in 1949 and launched the liutual Delense Assistance Program. Under the MDAP the Urated tates obhgated itsel/ to furnish mhtary aid to those countries participating in this collective security pact. Tins aid was to take the œorm of weapons, eqmpment and train- ing. By the end of the fiscal year 1950 some 200 nnhtary aircraft in addition to other military and naval equipment had been delivered to our atlies. This equipment was taken from our reserves and had to be re- placed. Ths replacement, together wth the production of new equipment to be sent to nations receiving aid under MDAP, involved new military production by American in- dustry and broadened the basis of Amen- can industrial mobihzation.o Ths, of course, with the sharp increase in orders for arcraft and other av/ation materie1 which came when the outbreak of hostih- ties in Korea caused a great expansion of the Air Force, created a procurement prob- lemsthat of speeding up production so as to have enough aircraft and other mate. riel available to mee our own needs and those of our allies. The National Industrial Reserve Act of 1948, approved 2 July 1948, had established statutory authority for a program whereby an essential nucleus of government-owned industrial plants and a national reserve of machine tools and industrial equipment was to be maintained so as to be avadable for the national Ielense and war produc- tion m time ol emergency' In order to put American industry in readiness to meet the new national emergency after the out- break of war in Korea, Congress took ac- tion by passing the Defense Produc!mn Act of 1050. Ths measure estabhshed a sys- tem of priorities and allocations for mate- rials and facilities needed for defense pur- poses; authorized the requisition of such materials and faclitles; prcwded financial assistance for the expansion of productive capacity; provided for wage and price sta- bfizaton and the settlement of labor chs- pute; and set up credit controts)  Because of the Chinese intervention the Korean conflict lasted longer than was ex- pected and it became necessary to extend the provisions of the Defense Productran Act of 1950, which was due to expire 30 June 1951. By the passage of Public Law 59, 82 Cong, I Sess. (approved 30 June 1951) the prowsons of the act were ex- tended to 31 July 1951 (and in one instance {o I August 1951). This temporary exten- sion gave Congress time to enact more com- prehensive legslation m the form of Pubhc Law 96, 82 Cong., i Sess. (approved 31 July 1951), which extended the life of the act for approximately 11 months, created a small Defense Plants Administration to promote the utilization of small business concerns for national defense and essential civihan production, and amended those provisions setting up economic controls of various kinds.  President Truman de- nounced the so-called ant-infiation provi- sions of the amended measure as being "gravely deficient" and economic stabiliza- tion officials prodrated another round of price increases which would send the post- Korea infiatmn spiral higher.  Regardless of its effect on economic inflation this de- fense production legislation was of con- sderab!e importance in facilitating the pro- curcment of aircraft and other material by the USAF which was now in the process of sudden expansion. In 1951 Congress enacted additional legis- lation dealing with procurement proce- dures Pubhe Law 921, 81 Cong., 2 Sess. (approved 12 January 1951) reactivated for the national emergency declared by the President on 1õ December 1950 Title II oi the First War Powers Act, 1941, which con- tained the contracting provisions in effect in World War II. It was also provided that contracts entered into or changed under the authority of ths law should include a clause to the effect that the book and rec- THIS PAGE Declassified lAW EO12958