Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

19. Memorandum of Conversation⁰

USDel MC/21

Camp David, Maryland, March 22, 1959, 9:30 a.m.

SUBJECT

• General Economic Matters

PARTICIPANTS

• The President
• Acting Secretary
• Ambassador Whitney
• General Goodpaster
• Prime Minister Macmillan¹
• Mr. Selwyn Lloyd
• Ambassador Caccia
• Sir Norman Brook

The meeting opened with the Prime Minister saying that it would be helpful to have a discussion about the economic picture, in its broad aspect, and what the President sees as the temper or trend of the United States economic story.

He went on to say that from their point of view, the capital aspect is good—the World Bank has been stepped up and so on but we don’t really worry so much about capital. We, the United Kingdom, want to be able to sell the commodities that we produce. He explained that he understood the difficulties faced by the United States in these matters.

The President accepted the statement as being a fair statement, and especially fair in that the Prime Minister made it clear that he appreciated the United States problem. The President then went on to outline the curious legal restrictions imposed on his actions, his decisions, by the set-up of our laws—especially the way in which the Tariff Commission worked. He wasn’t able to be absolutely accurate as to the number of times he had ruled against—or failed to accept the recommendations of the Tariff Commission, but it certainly was in the order of 10 agreements vs. 150 findings against in his ruling re escape clause. He went on to describe this Administration as one devoted to liberal trade policy. We have now the oil restriction-a few companies had broken the voluntary disciplines which the industry had self-imposed, but these few so clearly menaced the others that he had been forced to a mandatory imposition of restrictions. Now this will raise hell in Canada, Mexico, Venezuela—our friends, but it had to be.

The next, the current study of the electrical industries as a whole-is of the greatest significance. But it is under study and the international aspects of it are clearly understood to be of the first importance.

Further, the United States is, by and large, devoted to liberal trade. The President said never has he worked harder for anything than he has in getting this Reciprocal Trade Act extended for four years.² A great victory for our cause—but, the fact that he could win it was a demonstration of the temper, the national understanding that liberal trade policies were sound.

However, the President continued, when the individual gets hurt—then hell breaks out—and he recited many examples of his battles over small industries. Their importance is nil in the whole picture—their political irritation point, acute.

The President then discussed at length the present dilemma of current United States free enterprise—in theory and practice. The wage—price spiral is in full upward swing. Nowhere is there the will to slow it down, in spite of his efforts to dramatize the fact that we are pricing—costing ourselves out of world competition.

The unions make wild claims for their bigger share, based on the fact that the companies are declaring bigger profits and they want more of them. They forget that the Federal Government depends on profits. We live by income tax—private and corporate.

By and large, said the President, Americans look to the Administration to protect their national and international interests. They look to their Congressmen to protect their own. If the Congressman doesn’t satisfy them, then the President must.

The Prime Minister then recited how the British system put all the onus of appropriations requests of money on the Government. Nobody could even lay down an amendment to a bill if it increased the appropriation submitted.

The President said he would like this. In fact, he would settle for the item veto approach.

0. Source: Eisenhower Library, Whitman File, International Series. Secret; Limit Distribution. Drafted by Ambassador to the United Kingdom John Hay Whitney.
1. Prime Minister Macmillan visited Washington, March 19–23.
2. The Trade Agreements Extension Act of 1958 (P.L. 85–686; approved August 20, 1958) extended for 4 years the President’s authority to enter into reciprocal foreign trade agreements. (72 Stat. 673)