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Office Correspondence

Chairman Eccles

Date $ovm\>er u

Mr. MorriU

In accordance m t h your request, 1 went to the meeting
held by Judge Collet this morning with the Stabilization Committee
on the subject of coffee.
When I arrived Judge Collet was engaged in stating
orally, with a memorandum before him, the occasion for the meeting
and the problems which he wished considered.
. ^ There were a considerable number present whom I did not
recognize because I am sure th^y were members of the staffs of
various agencies but among those present I recognized Secretary
Vinson, Secretary Schwellenbach, Under Secretary of Agriculture
Hutson, and Eric Johnston. I noted also Mr. Salant of Judge
Colletfs staff.
Without attempting to review in detail the discussion
which went on until after 12:00 o1clock, it appeared that the
situation was the short-term one of the immediate future and not
the long-term problem. It was stated that we probably had no more
coffee in sight than would be sufficient to carry us the next
three or four months; that the principal (though of course not the
only) source of supply is Brazil; that there had been communicated
to Brazil by the State Department, with the approval of the Department of Agriculture, and the knowledge of OPA, a proposal to increase our ceiling price by 3 cents per pound on green coffee
provided that Brazil would give certain guarantees on deliveries;
that Brazil had responded with a counter-proposal of 5 cents per
Judge Collet finally susmed up the questions upon which
he wished expressions of views as being covered by four points,
as follows:

1. Should the ceiling price limitation be removed?
2. Should the ceiling price be raised, and if so,
how much?
3. Should we adopt a declining subsidy plan?
4* Should we stand on our price limitation and go to
rationing if the short supply made that necessary?

-2I could not say that there was any general consensus on
any one of these questions because objections were advanced to
all of them. However, it was clear that State and Agriculture
would prefer (if the approval of Brazil could be obtained) the
raise of the ceiling price by 3 cents and Under Secretary &utson
indicated that he would be willing to compromise by going to
3-1/2 cents.
Secretary Schwellenbach was opposed to doing anything
because of the wage problems with which he has to contend.
Secretary Vinson did not like the idea of having to do
anything but indicated that he was somewhat in a quandary because
he felt that State and Agriculture had committed themselves to a
raise in price ceiling. He said humorously that he would like to
say ^1 donft want to do nothing11* However, among the disagreeable alternatives, he preferred as first choice number three if
that conformed with the law, and four as a second alternative.
Secretary Schwellenbach preferred number four with number
three as a second alternative, Mr* Johnston preferred number three
and commented that the American people would not like rationing and
would stand a raise in price rather than go* back to rationing.
Incidentally, it was pointed out that there was no assurance that
there would be any power of rationing after December 31*
The final outcome of the matter was a suggestion by
Judge Collet that the State Departiaent immediately advise Brazil
that its counter-proposal of 5 cents was not acceptable, in order
to clear the record of the negotiations in that field.
Judge Collet said that w we will undertake to make up our
minds by Friday so that our position can be stated not later than
Saturday morning."
I did not make any statement during the meeting but spoke
to Mr. Salanfc and Judge Collet after the meeting merely to record
your inability in the circumstances to be present and that I was
there at your request. I said privately to them that since obviously
you had not heard the discussion I could not undertake to say what
you would have said after hearing the discussion, but that your
general reaction was that, in view of the price increases that had
taken place for agricultural commodities in this country and increased wages that had been realized by American labor, you felt
that a small raise in the ceiling price of coffee would seem to be
less objectionable than other courses that might be taken. If you
wish to express any additional view on the subject I am sure that
there is time between now and Friday evening for you to do so.

cc: Mr. Woodlief Thomas