Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

299. Memorandum of Conversation⁰

Washington, May 18, 1961.

SUBJECT

• Commerce Advisory Export Board

PARTICIPANTS

• Mr. Myer Feldman, The White House, Chairman
• Secretary Hodges, Secretary of Commerce
• Dr. Jack Behrman, Deputy Assistant Secretary of Commerce
• Under Secretary Fowler, Treasury
• Assistant Secretary Duncan, Agriculture
• Deputy Assistant Secretary William Bundy, Defense
• Assistant Director Turner, Budget
• Assistant Secretary Edwin M. Martin, State

After thirty minutes of relatively amicable discussion of the Executive Order proposed by Commerce¹ the following was agreed:

1. The Board would consist of only Commerce, State and Defense, but other agencies, and in particular Agriculture and Treasury, would be called upon to participate when matters of direct interest to them were up for discussion.

2. When the Cabinet Member or Acting Cabinet Member could not attend his representative could attend but his Department’s views must be conveyed in a document signed by the Cabinet Member or Acting Cabinet Member.

3. There would be no change in the Executive Order making the Cabinet group advisory to the Secretary of Commerce since it was not desired to suggest in the Executive Order that the President would deal with things like individual license cases. Secretary Hodges agreed, however, that there should be a minute of record that he would take no action to grant or deny a license without unanimity among the interested Cabinet Members.

4. It was agreed to amend Section 3 to make clear that any interested Cabinet Member could propose a matter for discussion by the group to the Chairman and not just the Secretary of Commerce.

Mr. Feldman said a revised order would be distributed and he hoped it could be issued early next week.

At the conclusion of this discussion Secretary Hodges said he wanted White House views on the question of publicity for licenses. He was under heavy pressure from Congressman Moss to provide routine publicity on the name of the company, product and country of destination for all of the 12,000 licenses issued each month. After sampling business opinion and securing views from State and Treasury, Commerce had agreed that such a routine publication should not be made. There was a serious problem of releasing competitively valuable information. There was also the problem that many companies feared local public opinion if it became known they were selling to bloc countries. Trade might dry up materially. It was pointed out that such license information is highly misleading since in the case of bloc countries it is usually a “fishing license” and 70% of the licenses are not followed by shipments. Commerce has no information on actual shipments so could not publish these only. The consensus of the group was to support Commerce but Mr. Feldman had reservations, feeling substantially that the competitive argument was not important and you should release anything which there were no strong reasons for concealing. It was understood, of course, that such information would always be made available to Committees of Congress on a confidential basis and the companies were always free to release information if they chose. It was agreed that Secretary Hodges would prepare a document on the subject and discuss it with Mr. Salinger.

At a subsequent rump session Behrman, Bundy and I discussed some current cases with the following results:

1. Bundy apologized profusely when told that the letter to Lipscomb on automobile machine tool cases had not been dispatched in spite of the fact that there had been a Laos cease fire since May 11. He stated he recognized, in response to my comment, that this was rather a peculiarly political condition for Defense to have established but said it was proposed to his Secretary on a day when the Laotian situation was quite critical and his Secretary had accepted it.

2. Bundy said he had instructed a letter be prepared removing Defense objections to the licensing of the accelerators to Poland.

3. Behrman said they still had very conflicting views on nylon 66 and had not made up their minds.

4. Behrman took up a letter from Bundy on synthetic rubber2 and stated that Secretary Hodges was not willing to approve on the basis of such a letter with its very grudging approval from a Defense standpoint. We persuaded Bundy that the letter did contain phrases which could be taken out of context and used to seriously embarrass politically the Secretary of Commerce. Bundy agreed to withdraw the letter and redraft it confining his comment to saying that any larger quantities would raise difficulties. On this basis Behrman agreed to see that the license was issued.

5. Behrman discussed a Defense letter on a boiler for the Soviet Union to be shipped by the Canadian subsidiary of a US company in which Defense had argued against the shipment but then agreed to approve it in view of the Canadian angle.² I concurred in feeling this was a very unfortunate letter to have in the files. Bundy agreed that he would not have recommended denial on the basis of the technical arguments contained in the letter and, therefore, the Canadian angle was irrelevant. Behrman agreed to see that the license was issued.

There was also some general discussion of Defense comments on the proposed Commerce instructions to examining officers and the way the burden of proof problem should be handled. This was somewhat inconclusive but it was generally agreed that the US strategic list should be reexamined and that presumption of denial should only mean that the burden of proof is on the applicant or agency who seek approval, not that such cases would normally or usually be denied. A particularly valid reason for granting such licenses would be availability from other sources. There was also a brief discussion of the COCOM situation and of the review State was making at the request of Rostow of Soviet economic relations. Bundy firmly reaffirmed his belief that the basic COCOM criteria was right and the problem was of relating items to that criteria.

0. Source: Department of State, Central Files, 100.4/5-1861. Confidential. Drafted by Martin on May 22.
1. The draft executive order, “Administration of the Export Control Act of 1949,” April 17, was prepared in the Bureau of the Budget at the request of the White House. Arthur B. Focke, General Counsel of the Bureau of the Budget, sent it by letter to Secretary of State Rusk for his consideration on April 17. Brooks Hays (for the Acting Secretary of State) replied to David E. Bell, Director of the Bureau of the Budget, on April 27. Hays recommended revision of the draft executive order to provide for submission of disputes to the President by the Board or a disagreeing member and for composition of the Board’s membership to include Agriculture and Treasury only when a particular problem involved their interests directly. (Both ibid., 400.119/4-1761) Regarding Executive Order 10945, see Document 300.
2. Not found.