297. Editorial Note
President Johnson discussed the copper price increase (Document 296) with Senator Mansfield during a telephone conversation on November 12, 1965, at 11:44 a.m. Aside from the immediate economic effects, the President put this price increase in the broader context of several price increases—“aluminum jumped the gun, now copper jumped the gun, and steel is getting ready”—and suggested that such profiteering could not be accepted when he was on the verge of calling up reserves for Vietnam. The President said he would not let the prices of aluminum, copper, and steel go up and mused on cutting foreign assistance to countries that increased prices. Mansfield reminded the President that President Frei had increased the Chilean price 2 cents, that copper exports were the lion’s share of Chile’s foreign exchange earnings, and the U.S. companies, whose major source of copper was from abroad, were just passing the foreign increase along. The President and the Senator discussed the strategy for revising the copper stockpile requirements and stockpile releases to help roll back the 2-cent increase.
The President also discussed the copper price increase with Secretary of Defense McNamara during a November 13 telephone conversation and again during a telephone conversation on November 17 at 12:28 p.m. During the former the President and McNamara considered export controls on copper to reduce the domestic price and a possible approach to President Frei with an offer of increased foreign assistance in return for a price roll back. McNamara reminded the President the copper market was different from the aluminum market and the companies would welcome a stockpile release. President Johnson asked McNamara to get the name of the steel company that reportedly had raised prices that day. [Page 737] McNamara called on November 17 to report on the 1-1/2-hour meeting he had just concluded with Anaconda and Kennecott, which was also attended by Under Secretary Mann. McNamara reported on a deal with the companies (that Anaconda thought could be cleared with its board within 24 to 48 hours) whereby the U.S. Government would release 200,000 tons of copper from the stockpile, impose export controls on copper, and work with Congress to suspend or eliminate the 1.7-cent duty on copper imports. The companies in turn, would roll back the U.S. price to 36 cents. McNamara reported the Attorney General’s certification that the President had the authority to release copper from the stockpile without new legislation. He also reported the Secretary of Commerce’s assurance that the President had the authority to impose export controls. An approach would be made to President Frei only after the domestic actions were completed.
On a related matter, Buford Ellington told John Harper of ALCOA during a November 6 telephone conversation that he had drawn up the papers to release 300,000 tons of aluminum from the stockpile (see Document 292), and that 100,000 tons would be released immediately for sale under an open bid by GSA. ALCOA claimed to have informed the President in advance of the aluminum price increase and thought they would have heard back from the President if he had objections. Ellington informed ALCOA that if the price increase were rolled back an accommodation on the stockpile release should be possible. (Johnson Library, Recordings and Transcripts, Recordings of Telephone Conversations, Tape FMISC.02, Side A, PNOs 2 (Ellington), 3 and 4 (Mansfield), 5 (McNamara, 11/13), and 6 (McNamara, 11/17))
On November 10 ALCOA and then other U.S. companies rescinded the aluminum price increase. On November 19 Anaconda and others rolled back the copper price increases.