Eisenhower Library, Eisenhower papers, Whitman file
No. 823
Minutes of Cabinet Meeting
[Extract]
1. . . . . . .
Agricultural Surplus Disposal—Japanese Program (CP–3)—Mr. Stassen cited the need for reaching a determination, prior to Mr. Yoshida’s visit, in regard to the size of the PL 480 program for Japan and as to whether rice should be included in that program. After noting disagreements, Mr. Stassen suggested as a possible compromise that the program be established at a level of $85 million initially, with the possibility of increasing it at a later date should need develop. This suggestion was not questioned or disputed.
In regard to the inclusion of rice, Mr. Stassen suggested that rice be not included in the initial program, but that a clause be written in to the effect that Japan would make its normal dollar purchases of rice from the United States. This would leave Japan free to make her other normal purchases from the Southeast Asia countries. Should there still be need for rice in Japan after normal purchases, the 480 program could be enlarged to include rice.
Sec. Benson pointed out that the United States is faced with a heavy rice surplus this year, that the Trade Development Act was passed to provide for such situations, that Agriculture was responsible for Section 1 of the Act, and that Congressional leaders were very anxious to have some rice included in the program. He noted that the United States was trying to regain its former share of the Japanese rice market and that having rice in the 480 program would be helpful in increasing dollar sales also. He believed this could be done without encroaching on the Southeast Asia share of the Japanese rice market.
Sec. Dulles disagreed on the possibility of any market in Japan this year over and above the normal United States and Southeast Asia sales. He noted the bad effect on Burma, Thailand, Pakistan and Formosa should their Japanese market be decreased.
Sec. Humphrey suggested that including rice in the program would merely serve to displace dollar sales, and he believed we would end up merely by having the same surplus of rice but with yen instead of dollars in our pockets. He commented on the difficulty [Page 1771] caused by expanded production at the same time as many consumers were cut off from the market. There ensued a discussion of the question of developing trade with Communist China by countries other than the United States, a matter currently under study in the National Security Council.
The President expressed his feeling that a compromise could be worked out for including a small amount of rice in the program along with a provision for negotiation with Japan toward establishing a ratio of dollar and yen purchases. At the conclusion of the meeting, the President spoke briefly to Messrs. Benson and Stassen and they subsequently worked out an agreement for reserving $15 million for rice of an $85 million initial program, and having the Secretary of State negotiate agreements with Japan to include fulfillment of trade agreement purchases with Southeast Asia and also normal dollar purchases of rice in the United States.2
- Part of the omitted portion is a list of persons present (25).↩
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This subject came up again at the Cabinet meeting held on Nov. 19: “Mr. Phleger then informed the Cabinet that agreement had been reached with Japan on the P.L. 480 program as authorized by the Cabinet—namely, an $85 million program, including $15 million for rice, with an added provision that Japan would purchase $200 million worth of rice during the coming year to be paid for in dollars instead of yen.” (Minutes drafted by M[innich,] Eisenhower Library, Eisenhower papers, Whitman file)
For the Department’s press release dated Nov. 13, see Department of State Bulletin, Nov. 22, 1954, p. 766.
Final agreement on this program was not concluded during 1954. For text of the Agreement on agricultural commodities, with agreed official minutes and exchange of notes, signed at Tokyo on May 31, 1955, see TIAS 3284; 6 UST (pt. 2) 2119.
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