Foreign Relations of the United States, 1964–1968, Volume VIII, International Monetary and Trade Policy

196. Memorandum for the USTS File¹

Washington, April 16, 1968.

SUBJECT

• April 16 Meeting in the White House with the Under Secretary,² Ambassador McKinney, Mr. Goldstein, Mr. Pelikan,³ Mr. Rommel,⁴ and Mr. Dykman

Ambassador McKinney opened the meeting with the announcement that he plans to stay in Washington until he carries out the role given to the Industry-Government Special Task Force on Travel by the President in his statement of March 6, 1968.⁵ He then outlined his reasons for developing legislation which will result in an independent semi-public U.S. Travel Office. These reasons can be summarized as follows:

1. He believes Congressman Rooney will not permit any agency of Commerce adequate resources to carry out a reasonable program.

2. He believes that an independent agency with dues paying industrial members would leverage Federal money (he spoke briefly about a budget of $50 million from the Federal Government and $7,500,000 from the private members).

3. He felt it would be easier to reorganize the management and to attract the requisite talent to an independent agency than to a unit of the Department of Commerce. This includes his belief that the independent agency could pay its chief much more than the salary of cabinet officer.

Ambassador McKinney went on to say that he plans to have a preliminary report in to the President by May 15 at which time he foresees Mr. Pelikan moving over to the Commerce Department as an Assistant Secretary to implement the new travel program.

Mr. Pelikan pointed out that the Treasury Department is already drawing up legislation for the independent travel bureau and that the commission has retained the services of various management consultant firms. One such firm is evaluating, through a PPBS system, the cost and benefits of various budgetary levels for the new travel organization and another firm is studying the travel offices of other nations in order to clearly outline the organizational options open to us in creating our own new travel agency. Mr. Pelikan did not have anything on paper at that time concerning the legal structure or a broad outline of the organization of his proposed semi-independent travel agency.

The Under Secretary indicated that Commerce was not anxious to divest itself of another agency, but we would certainly cooperate in whatever policy decision appeared to be best for the country without regard to our own parochial interest. He said that if it could be proven that Congressman Rooney would not permit adequate resources to the presently constituted U.S. Travel Service then it may be best for Ambassador McKinney to propose the independent agency idea to Secretary Smith. However, the Under Secretary made it clear that our posture at this time is:

1. To immediately submit an amendment to the U.S. Travel Act calling for an increase of authorized budgetary level from $4.7 million to $15 million.

2. To propose a supplemental for FY 69 of a budget for USTS somewhere in the neighborhood of seven to eight million dollars.

3. To continue developing a new program based on a seven to eight million budget which would be more market-oriented and could be put into effect immediately upon approval.

4. To study possible management reorganization of the USTS within the presently constituted agency. (There followed an off-the-record discussion of John Black.)

Mr. Goldstein pointed out that he felt the Department of Commerce and Ambassador McKinney’s group should work more closely together. Everyone agreed. It was generally agreed that we would continue to work on two levels. Ambassador McKinney’s group will continue to put together its plan for an independent agency with the $50 million budget and the Department of Commerce, relatively independent of the McKinney group, would continue with its activities as outlined by the Under Secretary (above). While these activities are going on, Ambassador McKinney and the Under Secretary would make every effort to work together in meetings with industry and other interested parties so that both groups are kept fully informed of what the other is doing and that a “solid front” would be shown to the world while the parties worked out their different programs. Between May 15 and May 30 Ambassador McKinney’s proposal and ours will be in final form for presentation to Secretary Smith and the President. At that time, Mr. Goldstein opined, a Presidential decision on which of the two proposals to endorse would probably be necessary.

There was a lengthy discussion concerning various budgetary matters in which we made it clear that Secretary Smith did not feel that a 50 or even fifteen million dollar budget could be justified. Everyone, except the Under Secretary and I, hotly disputed this. The Under Secretary mentioned that he also planned to hold a meeting next with marketing executives in the Travel Advisory Committee but agreed to cancel the meeting so that he and McKinney would not be meeting separately with industry groups. The Ambassador agreed to invite the Under Secretary to his meetings with industry thereby maintaining our “solid front” posture.

Jan

1. Source: Washington National Records Center, RG 40, Department of Commerce Files:FRC 74 A 20, U.S. Travel Service, 1967–1968. No classification marking. Drafted by Jan T. Dykman, Executive Assistant to the Secretary of Commerce, on April 17.
2. Howard J. Samuels.
3. Robert G. Pelikan, Director, Office of International Economic Activities, Department of the Treasury, was also serving at this time as Executive Director of the President’s Commission on Travel.
4. Presumably Wilfred H. Rommel, Assistant Director for Legislative Reference, Bureau of the Budget.
5. On March 6, President Johnson announced that he was putting McKinney in charge of the President’s foreign visitor program, which would “coordinate the efforts of private industry and Government necessary to implement the recommendations of the commission on travel.” For text of the President’s statement, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1968–69, Book I, pp. 349–350. Regarding the recommendations of the commission on travel, see footnote 2, Document 182.