Foreign Relations of the United States, 1969–1976, Volume XVI, Soviet Union, August 1974–December 1976

180. Memorandum of Conversation¹

Washington, August 26, 1975, 3:30 p.m.

PARTICIPANTS

• President Gerald R. Ford
• John Dunlop, Secretary of Labor
• Lt. General Brent Scowcroft, Deputy Assistant to the President for National Security Affairs
• George Meany
• Ted Gleason
• Paul Hall
• Lane Kirkland
• Jesse Calhoun

Meany: The question, Mr. President, is that if we are going to be the major supplier of grain for the world, how can we take advantage of that, at least defensively?

If grain is a scarce natural resource that we control, how can we leave this in the hands of a half dozen private companies operating in their own interest and dealing sometimes with state trading organizations like the USSR? The Canadians have a wheat board which supervises these things. That’s one way to organize it. At least we need some way we can control this asset—again, at least defensively, if not for our own benefit.

We got ripped off in 1972 and the American consumer had to pay for it. We don’t want it to happen again. How it gets done is your [the President’s] problem.

Gleason: I can tell you for a fact that Cooke has been negotiating with the Soviet Union as of last Thursday² for three million tons. Reports we have are that the Soviet Union is after 11 million tons more.

Hall: We, the maritime industry, are the first victims of détente, because détente gives the Soviet Union the opportunity to steal maritime jobs. There is no way we can compete. Fesco, a Soviet company, is undercutting freight rates in the Pacific by 20 percent. We introduced legislation to correct it, and the State Department opposed it.

The President: I said to them at a very high level that there should be no more attempts to buy until I had a chance to check on our supplies. Brent, I want you to look into that.³

I think our supplies will be such that we can sell more without substantial impact. So we won’t get ripped off again like 1972. But any lifting of the ban must be on a gradual, phased basis.

The ban on negotiations will stay in effect until we get a better fix on where we are. We will make no more commitments, either to the Soviet Union or PL 480, at least until the September 11 crop report.

Kirkland: An episodic approach to grain sales to the Soviet Union doesn’t serve the American people. We are leaving it that way to four companies and a monopoly trading company. We need to separate our foreign and domestic policy from a handful of private companies. That is the key problem for the long range. There must be a better way.

The President: I will make no further release until September 11 and it may be later. I will stay in touch with you as things develop.

What would you think about an oil-for-wheat deal with the Soviet Union?

Meany: A barter deal? That would be worth exploring.

Calhoun: Then we could cut off the grain if they cut off the oil. And the price should be right.

Hall: I think we should take a look at an arrangement like the Canadian Wheat Board. It is amazing how little anyone knows about how the present system works, and it is uncontrollable.

The President: John?

Secretary Dunlop: Mr. President, there are three questions: One, the long-term arrangements for handling this national asset; second, dealing with the immediate problem of how much to sell; and three, the maritime issues.

Hall: Détente has been bad for the maritime industry. It means the opening up of 42 ports and the use of third-country flags.

The President: Détente will not be a one-way street. Take SALT. If we don’t get it, I will ask for at least $2 billion a year for strategic arms.

Calhoun: Détente for us has a simple definition. It gives the Soviets a chance to steal our jobs.

Meany: There is no way for American private companies to compete with companies like Fesco.

The President: I had not heard before about Fesco. I will look into it.

1. Source: Ford Library, National Security Adviser, Memoranda of Conversations, 1973–1977, Box 14. No classification marking. Brackets are in the original. The meeting was held in the Oval Office. Scowcroft summarized the meeting in message Tohak 62, August 27, to Kissinger in Jerusalem. (Ford Library, National Security Adviser, Trip Briefing Books and Cables of Henry Kissinger, 1974–1977, Box 12, Kissinger Trip File, August 20–Sept. 3, 1975, TOHAK (4)) Kissinger was in the Middle East August 21–31 for negotiations with Israel, Egypt, and Syria on a second Egyptian-Israeli disengagement agreement.
2. August 21.
3. In message Tohak 62 to Kissinger, Scowcroft added the following comment: “The President was quite upset at Gleason’s report that the Soviet Union was still in the market after he had Brezhnev’s word to the contrary. He asked me to look into it. I plan to call Vorontsov in the morning, tell him we have a reliable report that they are negotiating for more grain and ask for an explanation.” On August 27, Scowcroft reported to Kissinger that he had called Vorontsov to underscore the “tremendous domestic pressures” in the United States regarding grain sales to the Soviet Union. “I also told him of the reports we had received that his government was negotiating an additional three million tons of grain,” Scowcroft added. “He said he had heard nothing of any such negotiation, that if, in fact, it was taking place it was perhaps for non-American grain, and he would look into it right away. He readily acknowledged that discussion regarding shipments of American grain should not be taking place.” (Message Tohak 74 from Scowcroft to Kissinger; Ford Library, National Security Adviser, Trip Briefing Books and Cables of Henry Kissinger, 1974–1977, Box 12, Kissinger Trip File, August 20–Sept. 3, 1975, TOHAK (5))