214. Memorandum for the Record by the President’s Assistant (Harlow)0
At 1:00 p.m. on January 27 the President gave a luncheon in the State Dining Room for the persons indicated on the enclosure.1
At 2:00 p.m. the President opened the discussion, explaining that the general idea of the luncheon was to develop public support for the Mutual Security program, then asked Mr. Eric Johnston to explain the matter more fully to the group. Mr. Johnston stated that he would like to have the Vice President first make a few remarks and then hear from Clarence Randall inasmuch as the group would be meeting with him after the luncheon and would get his views at that time.
The Vice President said that as far as this group was concerned very little could be said that they did not already know. He pointed out that there is no problem whatsoever in getting adequate funds for the military side of the Administration program but that there will be real difficulty on the economic side. The reasons for this difficulty, he said, are political and lack of understanding—political because this is an election year, and therefore a time when defense can be supported and foreign aid cut, and lack of understanding because the public has been inadequately informed. He said it is of great importance, therefore, that we make it absolutely clear to the American people that mutual security is an essential part of the nation’s defense and of our armed strength. He stated the Administration will take that position and has done so in the past, but that this concept is very difficult to get across. He mentioned Korea (citing the casualties and national treasure invested there) and Afghanistan (citing Soviet economic penetration) as examples of critical areas dependent upon United States economic programs. He placed India, Africa, and Latin-America in the same category, saying that our national objective is to maintain their independence which in turn is the greatest enemy to world communism.
He stressed how difficult it is to get this concept across to millions of people in the country so that Members of the Congress who themselves acknowledge the need for these programs will be able to support them without facing political reprisal for doing so.
Mr. Randall first thanked Eric Johnston for the luncheon and the group for coming to it. He said he could scarcely comprehend the attitude of the business community in respect to the nation’s foreign economic requirements. He said the businessmen willingly accept the [Page 410] spending of hundreds of millions for added defense but rebel at giving the defense effort a foreign economic foundation to make it work. He pointed to the drive for cutting the budget six months ago as contrasted to the present zeal for more defense spending. He, too, said that it is principally a matter of lack of understanding, observing that every businessman who comes to Washington into a responsible Government position becomes a firm supporter of these programs once he has really grasped their meaning.
Mr. Randall then mentioned that he had just returned from a trip abroad. He pointed out that Laos and Cambodia are places that most businessmen can’t even identify on a map, yet they are the granary of Asia and should they fall to communism, the free world would lose Taiwan, Korea and the Philippines, forcing our defenses back to the Hawaiian Islands. As regards allegations of waste and inefficiency, he said these are almost always a distortion of fact—and pointed anyway to the fact that every great organization makes periodic errors (citing Ford and Inland Steel) yet does not discontinue the needed activity merely because some error has been made. He then stressed the economic threat of the Soviet Union and said that Sputnik is perhaps a “celestial red herring” to divert American attention from the economic warfare being waged and to thrust us into an over-accentuation of military programs. He cited the vast natural resources of the underdeveloped nations and their great potential value as markets for U.S. products, and mentioned the possibility of the Soviet Union deliberately undertaking a program to dislocate the markets of the free world by selling below cost, using 2-½% loans for 40 years, and other such measures. He concluded by calling upon the business community to get strongly behind these programs.
Mr. Johnston then asked Under Secretary Herter to comment. Mr. Herter mentioned an instance in Charlotte, North Carolina, where after speaking to a group there and stressing the fact that since World War II 20 new nations have been born, a lady asked him why the United States let them get away. This, he explained, is clear evidence of the total lack of understanding of the basic world problems facing America. This situation, he said, is what Congressmen face at home, so that clearly the most critical need is to help Congressmen have informed constituencies who recognize the need for these programs.
Mr. Johnston then asked Mr. William Foster2 to comment. Mr. Foster took exception to the “celestial red herring” figure of speech used by Mr. Randall, saying that America is thrust today into total war and that Sputnik has grave meaning in itself and therefore is no red herring. He said that one of the important parts of this total war is in the economic area but that on Capitol Hill there is grave difficulty [Page 411] unless the general public better understands the true nature of the threat and the measures that must be taken to counter it. He cited economic assistance in Europe as an example of success, and mentioned that most of the money is spent at home, not abroad, but that the “give-away” tag is very hard to counteract in the public mind. The Vice President observed that Mr. Foster was Acting Chairman of the Gaither Report3 and that emphasis on these economic programs was included as a Gaither Report recommendation. Mr. Foster responded that he was not at liberty to comment on the contents of the Gaither Report.
Mr. Johnston then asked Director Smith to comment. He said he was happy that the group had assembled because he obviously would be its beneficiary. He pointed out that he spent some three or four years working on weapons of destruction and only recently entered the economic field. He said that he is now more alarmed than he was when he was working on weapons and is deeply convinced that America’s economic programs must be moved forward as quickly as possible.
Mr. Johnston mentioned a letter he had received from the United States Representative in Burma, written from Rangoon where there has been a rice crop failure causing great economic distress in Burma. He said loans are being made by Red China and Russia, with Red technicians also entering the country. The U.S. representative said that the Reds are thereby making great strides in Burma. Mr. Johnston said that American businessmen must understand the deep significance of such a development and cited Western Europe and West Berlin as examples of lucrative trade areas saved for free enterprise through economic programs of the past.
Mr. Johnston then said he would give the group a brief outline of the program that would be proposed in his office after the luncheon. He said that Foster Dulles, Allen Dulles, and Mr. McElroy, amongst others, would speak to this group, followed by a luncheon, the afternoon being devoted to a panel discussion open to questions from the floor. That evening the President is to make a foreign policy address to the nation. On that occasion the leaders of both political parties and other public figures will be at the head table. This will be followed by an extensive TV-radio educational campaign, plus newspaper and magazine articles and special pamphlets. He said the object is to elicit discussion at the grass roots, that it is a wholly non-partisan effort [Page 412] devoted to making it possible for Congressmen to support the program without facing political defeat. He said it is a crash effort—“a grand effort not a puny one.”
The President then said he had one question to pose to the group as representatives of their particular element in American society. He said he might fairly be classified now as a politician. Those present, he said, as businessmen are not political. He said that he had asked, as President, some businessmen to help in such programs as this and had found in them exactly the same instinctive reaction against foreign assistance as the uninformed had. Then, however, he mentioned George Humphrey, saying that when Humphrey first entered the Cabinet he was strongly opposed to foreign assistance but, being a man who saw great virtue in facts, soon conceded, after learning the facts, that these programs had to be done. Humphrey said, the President commented, that while we must indeed carry out these programs, let’s just be careful in doing so.
The President then asked why it is that businessmen who come to Washington are strongly in support of these programs when they leave. He said most businessmen just haven’t studied the problem, even though it is likely to be the critical question of this generation.
The President offered one additional thought: he said the Vice President commented that the Congress is always ready to furnish needed military funds. Nothing, he said, could be more untrue, looked at from the standpoint of history. Then he said that six months ago the Congress was a group of great economizers and cut the budget. The object, the President said, was political benefit. Then he stressed that this is not a political proposition. With the same threat in the world, why the sudden change in the Congress? Reason: because of the heat that comes on the Congress from the States. He said that when Eric Johnston told of the Senator who knows these programs are needed but opposes them for political reasons, he almost wanted to put his napkin over his face. He said he couldn’t understand how any man of responsibility could do such a thing—but if this is the situation in America, then we must build a public sentiment that will assure backing for such people to support the program. This, he said, should be the responsibility of all businessmen and every American. He said we cannot have prosperity without security and that we must have friends abroad with whom to trade. He said he could not overemphasize his feeling of deep conviction on this matter and while he thought no one at the table needed convincing, yet he thought they should get their friends to proselyte their friends and bring about in the country a renaissance of conviction and determination to carry through these programs. That kind of effort, he said, will be far more influential than [Page 413] any sponsored by political persons. He said that he didn’t care who got elected by undertaking this great enterprise; it is totally for America, regardless of party.
Mr. Johnston then invited the group to come to his office for an hour’s meeting. The luncheon adjourned at 2:45 p.m.
- Source: Eisenhower Library, Whitman File, Eisenhower Diaries. No classification marking.↩
- Not printed.↩
- Executive Vice President, Olin Mathieson Chemical Corporation.↩
- The Report to the President by the Security Resources Panel of the ODM Science Advisory Committee on Deterrence and Survival in the Nuclear Age (Gaither Report), November 7, 1957, is printed as NSC 5724 in Foreign Relations, 1955–1957, vol. XIX, pp. 638–661. The report is named for the Panel’s first Director, H. Rowan Gaither, Jr.↩