330. Editorial Note
At his news conference on October 9, 1963, President Kennedy stated that the U.S. Government would not prohibit sales of surplus wheat to the Soviet Union and various East European countries by American private grain dealers at the regular world price for dollars or gold, either cash on delivery or normal commercial terms. He said that he had decided this after consulting with the National Security Council and informing the appropriate leaders of Congress. He added that “the wheat we sell to the Soviet Union will be carried in available American ships, supplemented by ships of other countries as required.”
President Kennedy also stated that “this particular decision does not represent a new Soviet-American trade policy,” but “it did represent one more hopeful sign that a more peaceful world is both possible and beneficial to us all.” He pointed out that “to the extent that their limited supplies of gold, dollars, and foreign exchange must be used for food, they cannot be used to purchase military or other equipment.” (Public Papers of the Presidents of the United States: John F. Kennedy, 1963, pages 767-768)
Because of Congressional interest and concern with the decision, President Kennedy reported the reasons not to prohibit wheat sales to the Soviet Union and other East European countries in a letter to President of the Senate Lyndon B. Johnson and Speaker of the House of Representatives John W. McCormack on October 10. (Ibid., pages 776-778) Released with the letter was the opinion of the Department of Justice that this decision neither required nor was prohibited by any act of Congress. (Letter from Attorney General Robert F. Kennedy to Secretary of State Dean Rusk, October 9; Department of State Bulletin, October 28, 1963, pages 661-667) Attorney General Kennedy’s letter referred to a letter from Under Secretary of State Ball, September 23, requesting the Attorney General’s opinion concerning the applicability of certain laws to the prospective sales. That letter has not been found.
Assuming that the President’s announcement of U.S. willingness to sell wheat to the Soviet bloc might raise questions about U.S. East-West trade policy, the Department of State circularized to its posts abroad an expression of U.S. policy on East-West economic relationships as background for responses to official inquiries. It stated that the United States was exploring the possibility of modifying U.S. restrictions on non-strategic trade with the European Soviet bloc on a basis more comparable with other trading countries. Trade would be used to take advantage of current trends in East European states and to enhance the range of communication with the Soviet Union.
The circular telegram stated that the approach on economic problems would be “considered within the context overall U.S. relationship [Page 742] with European Communist countries.” It pointed out that signature of the nuclear test ban treaty and other disarmament discussions had not ended the cold war. “Soviet leaders will hold uncompromising positions on such matters as Berlin and continue to make clear ultimate goal of world communism and advocate what they term ‘national liberation movements of oppressed peoples.’” The United States therefore adhered to its basic East-West economic policy, which the circular telegram then outlined. (Circular telegram 688 to 112 Embassies and Consulates, October 14; Department of State, Central Files, FT 1 US)
During consideration of the foreign assistance authorization bill (H.R. 7885, 88th Cong.) on November 14, Senator Karl E. Mundt (R.-S.D.) offered an amendment to prohibit the Export-Import Bank from guaranteeing or extending credit to any Communist country for the purchase of U.S. grain. President Kennedy urged “in the strongest terms” that the Senate not approve this amendment. (Letter from President Kennedy to Senator Mike Mansfield (D.-Mont.), November 15; Kennedy Library, National Security Files, Trade, East/West) On the same day, Senator Mundt withdrew his proposal after the Senate leadership agreed to consider it in a separate bill. That bill (S. 2310, 88th Cong.) would have banned Export-Import Bank credit and credit guarantees to Communist countries for purchase of any U.S. commodity, but it failed of adoption in the Senate on November 26.
The House of Representatives approved a similar ban in the foreign aid appropriation bill for fiscal year 1964 (H.R. 9499, 88th Cong.), December 16, but the Senate rejected it on December 19. On December 24, the House of Representatives agreed to the foreign aid appropriation conference report (H. Rept. 1091, 88th Cong.) with a provision that left to the President’s discretion authorization of Export-Import Bank credit or credit guarantees to Communist countries if he determined it was in the national interest and reported each determination to Congress within 30 days. The Senate approved the conference report on December 30. Presidential discretionary authority to approve Export-Import Bank credits to Communist countries thus became part of the Foreign Aid and Related Agencies Appropriation Act, 1964, approved by President Johnson on January 6, 1964. (P.L. 88-258; 77 Stat. 857)