11. Memorandum for the Record by the President’s Special Assistant (Harr)0
The President held a dinner (guest list attached)1 on the evening of May 15 to discuss the implications of the Sino-Soviet economic offensive for the U.S. and what we could do to counter it.
The dinner had been preceded by an afternoon-long briefing by the Department of State of those members of the Business Advisory Council who had been chosen as a committee to address themselves to this problem.2
After the President’s introductory remarks setting forth the problem with which he was concerned, the Secretary of State related this specific problem to the over-all struggle between the Sino-Soviet bloc and the U.S. and indicated he felt this economic offensive was its most important aspect at this time.
Secretary Weeks then spoke to the assets this nation had in its business activity overseas and the need for the closest possible cooperation between business and the government to counter current Sino-Soviet moves.
The Vice President made the point that in Latin America, as well as in other underdeveloped areas, one of the fertile grounds for Communist exploitation was the strong desire on the part of the mass of the peoples of these countries to change their economic status for the better. He said that an effective Communist lure was the argument that “capitalist” trade between the U.S. and those countries did nothing more than make the rich richer, without improving the lot of the poor. To the extent to which this was true or made to appear true, it fostered sympathy toward Communist promises of a change.
[Page 23]The Vice President also urged the Business Advisory Council to draw as appropriate upon their overseas representatives for help in this study, as he believed some of them to be among the most knowledgeable and experienced persons available to address themselves to this problem.
The Deputy Under Secretary of State for Economic Affairs, Mr. Dillon, elaborated upon the complex arsenal of economic devices that have been developed by the Soviet Union to make its economic offensive effective.
The Secretary of the Treasury observed that to compete effectively against the political appeals engendered by the Communist trade and aid offers, the lending institutions in this country, both private and governmental or intergovernmental, would have to take greater risks and modify their pure banker’s perspective toward the soundness of loans in order to make funds available to impact activities, some of which are now being excluded because they are not considered sound financially.
Mr. Allyn, Mr. Bechtel and Mr. Holman3 spoke of the need for close cooperation between government and private business if the maximum effectiveness of private business activities is to be realized.
Mr. Bechtel expressed, on behalf of the group, the gratification of American businessmen at being asked by the President to address themselves to this important problem.
On various occasions during the discussion the President reiterated his conviction that the challenge presented by the Sino-Soviet economic offensive, serious as it was, was perfectly capable of being successfully countered if the combined strengths of free government and free private enterprise were fully applied to the achievement of this objective.
- Source: Eisenhower Library, White House Office Files, Special Assistant to the President for National Security Affairs Records, Communist Economic Penetration. Confidential.↩
- Not printed. The list of 16 included Harold Boeschenstein and 7 other prominent businessmen.↩
- Reference is to the Business Advisory Council’s Committee on World Economic Practices, chaired by Boeschenstein. A summary of the briefing is in Department of State, Secretary’s Memoranda of Conversation: Lot 64 D 199.↩
- Stephen D. Bechtel, President and Director of Bechtel Corporation, and Eugene Holman, Chairman of the Board of Standard Oil Company of New Jersey.↩
- Printed from a copy that bears this typed signature.↩