December 29, 1952
S/S
Following the Cabinet meeting on December 23, the Secretary discussed with Secretary of Agriculture Brannan the proposed new dairy import restrictions which were the subject of a memorandum dated December 19 to the Secretary from Mr. Linder. The substance of the conversation was that Secretary Brannan was not inclined to go along with our recommendation that Agriculture delay indefinitely its action in announcing additional dairy import restrictions under Section 104 of the Defense Production Act. However, Secretary Brannan did agree to put off the proposed action until after Christmas. He would see what effect the holiday purchasing had on the domestic butter market before taking action.
Secretary Brannan explained that the law required support of milk, but that in order to carry it out, it is necessary for the Agriculture Department to purchase products into which milk goes, such as butter, cheese, dried milk, etc. He stated that, for example, butter and dried milk may both be used in the manufacture of icecream in varying proportions, depending upon the formula of a particular manufacturer. Therefore, the importation of one item in the dairy field has an effect similar to the importation of another item in the same group.
The Secretary suggested that it might be desirable to let the succeeding Administration announce the restrictions and be prepared to face the criticism which may result as the impact of the restrictions reaches into various economic fields. Secretary Brannan said, in his view, that delaying the action would produce the opposite effect. He said that Section 104 might become mandatory and a permanent part of the import and tariff picture. He thought that the repercussions which would occur domestically and the retaliations which might be put into effect by other countries almost immediately might militate for the greatest good in the long run since it would show all segments of agriculture that in toto they would suffer from
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supporting this rather foolish law, and that the net result might be that Section 104 would be repealed perhaps as a result of pressures originating from the agricultural industry itself.
Secretary Brannan said that he was willing to delay any immediate action and that following the holidays he would have a survey made regarding the effect of holiday purchasing. If there had been a considerable movement in the market, he might be willing to delay his announcement for an additional period, but that he did not wish to offer any promise in this regard.
S JCKitchen:ma
December 29, 1952.
MEMORANDUM OF CONVERSATION WITH SECRETARY BRANNAN
Secretary Brannan telephoned me while I was at the White House today. He said the situation with reference to purchases was getting worse. He had something like 12 million pounds of butter and had to buy another four million pounds. He is buying milk at the rate of two million pounds a day. He is also having to buy cheese. He, therefore, believes he must stop the dried milk from coming in.
I told him that if it was his judgment that he must take this action (which I believe he plans to do tomorrow), while I thought it was a bad situation, I would not argue further with him.
Mr. Harriman subsequently telephoned me at home and said he had heard that I had told Secretary Brannan that I would not argue the matter with him, and I verified this. Mr. Harriman was disposed to go to the President on the question if I would agree to do so. I said that I did not believe I should do this. I had presented the matter previously to Mr. Brannan and had not been able to argue with his present judgment, and which he based on the law, which he thought compelled him to take this action. Mr. Harriman and I agreed that this was a bad situation, but Mr. Harriman agreed with me that nothing further could be done.
S:B.evans