MEMORANDUM for the UNDER SECRETARY May 12, 1947

47.05.12 (806w)

MEMORANDUM FOR THE UNDER SECRETARY May 12, 1947

Washington, D.C.

Dear Acheson: Prior to the Gridiron Dinner Mr. Hoover endeavored to contact me and following the dinner we had a brief conversation at his arrangement.1 He is deeply concerned over the food situation in Germany and Japan and considers the next four months critical.

Germany

Mr. Hoover stated that he felt a lack of coordination and definite leadership in Washington were prejudicing the chances of meeting the dilemma. He referred to the Department of Agriculture having ceased buying goods for high prices and also referred to complications between the Agricultural Department, War Department and the State Department. He stated that Mr. ______[sic], in the War Department was a very able man but was at the end of his rope in trying to get matters adjusted. Mr. Hoover urged that we step in and assume leadership in straightening out the difficulties.

Frankly, I am confused as to just what the issues are and I am therefore sending this memorandum to you, as I do not care to circulate a statement of my confusion in the matter as above.

Will you stir up the proper individual to give me a brief resume of the complications and a suggestion for a statement by me at the Cabinet Meeting today?2

SPAIN

The Secretary of Agriculture at Cabinet meeting on Monday explained the dilemma he was in regarding sale of items to the Spanish Government. He referred to a recent offer of the Spanish Government to buy about $10,000,000 worth of foodstuffs, I believe, but that the State Department felt that it could have no dealings with that Government. He took no issue with our foreign policy but at the same time wondered if there wasn’t some way to get around the complications because it was such bad business to have offers of cash turned down and the Department of Agriculture left in the dilemma of increasing financial complications.3

Mr. Anderson suggested that there might be some way of setting up a coordination here in order to enable trades to be made in connection with agricultural dealings with countries which under ordinary circumstances cannot arrange to pay the costs. He thought that possibly by some such arrangement an indirect procedure could be evolved by which goods for export by the nations concerned could be utilized to meet the cost of the food shipments to their countries.4 The Secretary of Commerce [W. Averell Harriman] stated that this was not a practical proposition.

The President directed Anderson, Harriman and myself to talk the matter [i.e., sales to Spain] over.

G. C. M.

NA/RG 59 (Central Decimal File, 840.50 Recovery/5–1247)

1. The Gridiron Club (established in 1885, membership by invitation only) is the oldest and most prestigious journalistic organization in Washington, DC. It is best known for its annual dinner--held on May 10 in 1947 and attended by five hundred guests--which traditionally features the US Marine Band, along with satirical musical skits by the members and off-the-record remarks by the president of the United States and representatives of each political party. Former US President Herbert Hoover, attending the dinner for the first time since 1932, delivered a brief unreported speech. (New York Times, May 11, 1947, p. 34.)

2. "There has always been a conflict of interest between the State Department and the Department of Agriculture in the question of export of food," Under Secretary of State Acheson replied. "The Department of Agriculture has a natural primary interest in protection of the domestic, agricultural and political interests, whereas the Department of State is charged with the responsibilities of meeting export demands that are essential to carry out our economic foreign policy. The President appointed a Cabinet Food Committee to help coordinate this conflict of interest, but the Department of Agriculture is the operating agency. It has been necessary for the State Department to keep constant pressure on the Department of Agriculture to meet the export programs." (Acheson to Marshall, May 19, 1947, NA/RG 59 [Central Decimal File, filed with 840.50 Recovery/5–1247].)

3. Acheson recommended continuing the policy of refusing to negotiate sales or shipments to Spain's government. (Ibid.)

4. Regarding Anderson's suggestion that special trading arrangements were needed for countries needing food, Acheson wrote that the department was "strongly pushing all measures designed to increase imports into the United States and to increase the production abroad of goods which directly or indirectly would increase dollars available to foreign countries. Schemes for linking the dollars thus earned to any particular export from the United States would not be of much over-all help and in most instances would result in inefficient administrative complexities which would tend to stifle rather than promote recovery. Nothing is gained by linking particular dollars to the export of wheat when coal is of equal essentiality." (Ibid.)