274. Memorandum of Conversation1

A delegation of ten footwear industry people visited STR on May 17th.2 The discussion started on a relatively low key, with their three concerns being stated as hides, suspension by the Price Commission of any further consideration of requests for price increases, and imports.

Most of the opening presentations concerned the first two issues. It was only after we pointed out that STR had a minor role in hides, had [Page 696]little if any relation to the Price Commission, and was only directly involved in trade matters, that the delegation began to stress footwear imports. It did not appear that the ten had previously coordinated their position, nor was there any organized effort to present a factual case that imports are causing serious injury. Rather, this fact was alleged in a variety of individual ways by various members.

Several members appeared at the outset to favor some restraint arrangement at about current levels of imports and to stress the need for some scheme which, in the future, would prevent sudden changes or disruptions. By way of illustration, however, they referred only to the recent disruption caused by hides prices rather than to any recent import activity. Several stated flatly that they could live with the present degree of import penetration and were concerned primarily with future uncertainties.

After we had explored these ideas for a while, several others joined in for the first time to argue that the industry could not possibly live with the present situation. Given this range of views, we attempted to find a consensus by asking the hypothetical question: If hides prices returned to more normal levels and if the Price Commission approved pending price-increase requests, what level of imports could they really live with?

From this point on the meeting resembled a negotiating session. Some argued that a 1965 base was necessary. Others allowed that the “industry” had accepted the base period of the Mills Bill.3 By the end of the meeting no one was voicing any acceptance of something near current levels. If there was any consensus among those still expressing a view, it seemed to be in favor of a 1968-69 base. It also seemed likely that the group was going back to the Association to try to come up with a position. Our efforts to explain that our hypothetical question was not intended to be a request for a position were of little avail. Some seemed shocked, despite the obvious differences aired amongst themselves, at the suggestion that views seemed to differ within the “industry.”

Among other points, they stressed the inadequacies of seeking restraint only from Spain,4 arguing at length that the new countries to which U.S. and other producers would then shift was legion. Much was made, for example, of the attractive terms now being offered U.S. producers in British Honduras.

After the possibilities of a tariff quota were rather painstakingly explained, most felt that, given the over-quota rate, it would not be of [Page 697]any value to them. Regarding a rollback, they asserted there would be no trouble whatsoever in quickly replacing the lost imports with domestic-made footwear at comparable prices.

The dominant impression was that opinions in this group were diverse and that little coordination or agreement had been reached prior to the meeting. Those whose company situations or policies would permit a larger volume of imports were initially quite outspoken, but pulled in their horns as others in the delegation subsequently voiced different views. The open discussion of acceptable imports levels ended up with those initially admitting to being able to live with higher levels becoming silent.

A second dominant impression is that some scheme which provides some assurance for the future, some “orderly sharing” as several put it, is perhaps more important than any other feature of a solution. The “need to be able to plan” was a recurring phrase.

  1. Source: National Archives, RG 364, Office of the Special Representative for Trade Negotiations: Lot 78 B 1, Nonrubber Footwear-Telegrams, Congressional Correspondence. Limited Official Use. Another copy of the memorandum indicates that it was drafted by Theodore R. Gates on May 19. (Ibid.) Copies were sent to J.B. Loken, Stanley Nehmer, B. Ascher, H. Blackman, and J. O’Mahoney.
  2. The participants in the conversation are not identified, but they may be the same as those identified in a May 16 memorandum of conversation between a ten-member shoe industry delegation, headed by Mark E. Richardson, President of the American Footwear Industries Association, and Stanley Nehmer and other Department of Commerce officials. Two additional shoe industry officials met with Herbert N. Blackman, Deputy Assistant Secretary of Labor for Trade and Adjustment Policy, and other Department of Labor officials on May 16. Memoranda of both May 16 conversations are ibid.
  3. Reference is to the Mills-Byrnes bill, which called for quotas on imports of textiles and footwear; see Documents 230 and 233. More than a year earlier, President Nixon had “strongly” endorsed the textile quota provisions of this bill. See Public Papers of the Presidents of the United States: Richard Nixon, 1971, pp. 423-424.
  4. See Document 267.