Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

Eisenhower Library, papers as President, Whitman file, NSC records

Memorandum of Discussion at the 202d Meeting of the National Security Council on Thursday, June 17, 1954¹

top secret
eyes only

June 17, 1954

The following were present at the 202d meeting of the Council: The President of the United States, presiding; the Vice President of the United States; the Secretary of State; the Secretary of Defense; the Director, Foreign Operations Administration; and the Director, Office of Defense Mobilization. Also present were the Secretary of the Treasury; the Attorney General (for Item 3); Assistant Secretary Anderson for the Secretary of Commerce (for Items 1 and 2); Assistant Secretary Siciliano for the Secretary of Labor (for Item 5); the Director, Bureau of the Budget; Assistant Attorney General Barnes (for Item 3); Assistant Secretary of Defense Hannah (for Item 5); Walter S. Delany, Foreign Operations Administration; Assistant Secretary of the Army Milton (for Item 5); Herbert N. Blackman, Department of Commerce (for Items 1 and 2); Irving Kramer, Foreign Operations Administration (for Items 1 and 2); General Twining for the Chairman, Joint Chiefs of Staff; the Chief of Naval Operations; the Director of Central Intelligence; Robert Cutler, Special Assistant to the President; the Deputy Assistant to the President; the White House Staff Secretary; Bryce Harlow, Administrative Assistant to the President; the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.

There follows a summary of the discussion at the meeting and the chief points taken.

[Here follows discussion of matters relating to COCOM and United States export controls of strategic commodities.]

3. Effect on national security interests in Latin America of possible anti-trust proceedings (NSC Action No. 805;² Memo for NSC from Executive Secretary, same subject, dated June 1, 1953³)

Mr. Cutler reminded the Council that by its action a year previously the Department of Justice had refrained from instituting its anti-trust suit against the United Fruit Company, on the grounds of national security. The year had now elapsed, and as the Council had directed, the Attorney General was again raising the problem. Mr. Cutler called on the Attorney General to give his views, and then asked to be excused from participation in the Council’s consideration of this subject in view of the connections of the Old Colony Trust Company with the United Fruit Company.

The Attorney General then asked Judge Stanley Barnes to read to the Council a letter⁴ on this subject addressed to it through Mr. Cutler (copy filed in the minutes⁵ of the meeting). This letter described in some detail a series of conferences between representatives of the Department of Justice and representatives of the United Fruit Company. The letter also set forth the terms of a proposed settlement of the issue by a consent decree. The United Fruit Company, however, still insisted that it was not guilty of any violations of the anti-trust laws, and had refused to consider a solution by consent decree unless the Government revealed in advance the evidence it possessed of violations by the United Fruit Company of the anti-trust laws. The letter ended by raising the question whether the Department of Justice should or should not now proceed to institute proceedings against the United Fruit Company. The Attorney General added that the Department of Justice wished to go ahead with the suit if the Council had no objections on grounds of national security.

Secretary Dulles said that the Department of State saw no reason why the Department of Justice should not proceed forthwith to institute the suit. Secretary Wilson questioned Judge Barnes as to the precise violations of the law allegedly committed by the United Fruit Company, and Judge Barnes provided several illustrations. While Secretary Wilson still doubted the advisability of proceeding with the suit at the present time, the President expressed the opinion that the suit should be instituted if, as seemed to be the case, the United Fruit Company had violated the law. Secretary Dulles repeated his similar view, and added that on balance it might be positively advantageous to U.S. policy in Latin America if the suit were instituted. Many of the Central American countries were convinced that the sole objective of United States foreign policy was to protect the fruit company. It might be a good idea to go ahead and show them that this was not the case, by instituting the suit….

Mr. Allen Dulles said that given a little more time, the Central American states would do Justice’s job for it. While he feared that if the Department of Justice announced the suit in the next few days the results might tend to support the position which President Arbenz had taken in Guatemala, this would probably not be so a month from now, by which time the situation in Guatemala would have been clarified.

The National Security Council:

a. Discussed the subject on the basis of a report by the Attorney General pursuant to NSC Action No. 805–b on the results of his negotiations for the elimination of practices deemed inconsistent with U.S. anti-trust laws.

b. Agreed that considerations of national security do not justify further postponement of the proposed anti-trust proceedings beyond the period (estimated at about a month) required to prepare the actual filing of this suit.

Note: The action⁶ in b above, as approved by the President, subsequently transmitted to the Attorney General.⁷

[Here follows discussion relating to the military situation in Southeast Asia and reserve mobilization requirements.]

1. This memorandum was drawn up by S. Everett Gleason, Deputy Executive Secretary of the NSC, on June 18.
2. See footnote 5, p. 196.
3. This memorandum transmitted the NSC Planning Board report, p. 191.
4. Not found in Department of State files.
5. Presumably a verbatim record of NSC meetings not further identified.
6. NSC Action No. 1159.
7. The Department of Justice filed an anti-trust suit against the United Fruit Company on July 2, 1954, at New Orleans (814.054/10–1454). See also Mr. Sparks’ memorandum, Dec. 3, 1954, p. 262.