Office of the Historian

24. Memorandum of Conversation Between Secretary of State Herter and Secretary of the Treasury Anderson0

October 22, 1959, 10:30 a.m.

Secretary Anderson came to see me to discuss our over-all financial situation and to deplore recent publicity which would indicate a split between Treasury and State. After explaining at length our balance of payments situation and the probable imbalance in our budget during the current year, Secretary Anderson pointed out the overriding necessity of maintaining a sound dollar. He indicated his complete devotion to freer trade theories and felt that these did not in any way conflict with the necessary fiscal measures which he felt we had to take from the point of view of protecting our balance of payments. I told him that I thought it was very important that the distinction be drawn between the maintenance of freer trade and such restrictive measures as we had to apply on use of dollar loans in the U.S.

He told me that he had given orders in the Treasury that no statement should be made anywhere along the line which would indicate any friction or which would overemphasize recent decisions, such as that related to the Development Loan Fund,1 and hoped very much that the State Department could do likewise. He did not want [Page 56] any such frictions to develop at the lower levels and thought that, whenever possible difficulties arose, we ought to work them out by discussion among ourselves.

In addition to the above, we discussed the budgetary problems of the Defense Department and the political implications of possible cutbacks in our NATO commitments. He agreed that this matter should be gone over soon with Secretary McElroy and myself and agreement has now been reached for a meeting Saturday morning, October 24.

Christian A. Herter2
  1. Source: Department of State, Central Files, 811.10/10–2259. Secret. Drafted by Herter.↩
  2. DLF Managing Director Vance Brand had announced on October 20 that the Fund would thereafter place primary emphasis on the financing of goods and services of U.S. origin.↩
  3. Printed from a copy that bears this typed signature.↩