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MEMORANDUM OF PERSONAL CONSULTATION WITH THE PRESIDENT January 14% 1947 On January 1 4 , I had an appointm ent w ith th e P r e s id e n t f o r th e purpose o f b e g in n in g to c l a r i f y our C o u n c il o p e ra tio n s d u r in g the coming y e a r . He expressed a p p r e c ia tio n o f th e C ou ncil* s work in con n e c tio n w ith th e Economic R eport and r e fe r r e d to h is tele p h o n e c a l l t o me the morning i t was su bm itted to th e C ongress* abou t th e f a c t t h a t , N o th in g was said in s p i t e o f our d e s ir e — in d ic a te d on s e v e r a l oc c a s io n s — t o d is c u s s w ith him th e m a te r ia ls which we had su b m itte d , th e C o u n c il had n o t t a lk e d w ith him a t any tim e s in c e December 1 6 , when th e f i r s t d r a f t o f m a te r ia l was su bm itted. I m y s e lf had seen him on o n ly once o c c a sio n s in c e th e n . That was when a l a t e d r a f t o f th e S t a t e o f th e Union Message was b e in g read (Mr. C l i f f o r d , Judge Rosenman, C h a r le s R o ss, Steelm an, and I p r e se n t). A t t h a t m eeting I had been asked to check th o se p a r ts o f th e S ta te o f th e Union Message -fchich r e la t e d to economic m a tters* I had made some s u g g e stio n s f o r minor changes b u t s a id t h a t in g e n e ra l i t accorded w ith th e C o u n c i l s th in k in g . !,I t Tc t h i s C l i f f o r d r e jo in e d : sh ou ld , s in c e i t was l a r g e l y taken from t h a t so u rc e ." As I l e f t t h i s m eetin g, I ex p ressed t o th e P r e s id e n t th e hope o f th e C o u n c il t h a t on th e f o llo w in g d a y, F r id a y , January 3> we m ight d is c u s s w ith him th e t h ir d d r a f t o f th e m a te r ia l f o r use in - 2 - draw ing h is Economic R ep o rt. No such con feren ce was arran ged, bu t on t h a t a fte r n o o n , th e C o u n c il was c a lle d by Mr. Steelm an to meet in th e w est Wing w ith h is a s s is t a n t s ,/ H a r o ld S t e i n , Don K i n g s le y , and Anthony Hyde^j and w ith S e c r e t a r ie s Snyder, Harriman, 11 0 tc i a i and Schw ellenbach t o co n sid er a p la n f o r the. d r a f t o f the P r e s i d e n t 's Economic R ep ort. P r io r to t h is ,w e had seen (andfhev Tlv had d is c u s s e d w ith Steelm an) a much shortened d r a f t ior an Vv-s —-> /J^. . Economic Report t h a t had been prepared 'by S t e i n , K in g s le y , and Hyde on the b a s is o f our f i r s t d r a f t o f m a t e r ia ls . I had ex p resse d t o Steelm an th e f e e l i n g o f a l l th r e e members o f th e C o u n cil t h a t th is s h o r te n in g , rearrangem ent, and r e - w r it i n g made i t a much l e s s s a t i s f a c t o r y document. I t appeared, however, t h a t on t h i s F r id a y morning th e P r e s id e n t had d is c u s s e d th e m atter w ith s e v e r a l members o f h i s C a b in e t and t h a t , through t h e i r a s s i s t a n t s , Ewan C lagu e o f B . L . S . , C. C. 0 *C o n n e ll o f the T r e a su r y , and P h i l i p Hauser o f Commerce, th e y were to work w ith Steelm an and h i s a s s i s t a n t s in p r e p a rin g the Economic R ep ort. In c id e n ta lly , ^ th e S e c r e t a r i e s , p a r t i c u l a r l y Harriman and Snyder, v o ic e d a f e e l i n g , a t t h i s a fter n o o n con feren ce w ith Steelnm n, t h a t th e y had n o t been s u f f i c i e n t l y co n s u lte d by th e C o u n c il b e fo re we su bm itted our m a t e r ia ls to th e P r e s id e n t . as f a r a s Harriman was concerned, T h is was u n d erstan d able s in c e he had tak en h is p o s it io n v e r y r e c e n t ly and both he and we had been v e r y bu sy du rin g th e l a t t e r s t a g e s o f p re p a ra tio n o f our m a t e r i a l s . I had, however, w r it t e n him e x p r e s s in g our d e s ir e to co n fer w ith him and keep in touch w ith h i s Department on p o l i c y m a tte r s, but he had se n t back a r a th e r b r i e f and - 3 - form al r e p ly and had n ever made any move toward con feren ce w ith u s . V Steelm an and h i s th re e a s s i s t a n t s and th e th re e a s s i s t a n t s o f t h e ^ S e c r e t a r i e s adjourned a t abou t 4:00 p . m. to work on th e R eport and com pleted t h a t even in g a d r a f t which went to th e Goverment P r in t in g O f f i c e t h a t n ig h t and was subm itted f o r our c o n s id e r a tio n in g a l l e y p r o o f the n e x t morning. I t was l a r g e l y th e d r a f t prepared by Steelm an 1 s a s s i s t a n t s , w ith which we had exp ressed d i s s a t i s f a c t i o n , p lu s a few a d d itio n s from our t h ir d d r a f t o f m a t e r ia ls . The C o u n c il and s t a f f worked d i l i g e n t l y on t h i s d r a f t a l l t h a t morning and e a r l y a fte r n o o n , p rep a rin g recommendations f o r r e v is io n and p a r t i c u l a r l y p rop osin g th e r e s to r a tio n o f im portant t h in g s which had been e x clu d e d . On S atu rd a y a fte r n o o n , a t th re e o ! c lo c k th e Coun^ Ifa vvv C , c i l met w ith Steelm an, h is th r e e a s s i s t a n t s , and P h i l i p Hauser and worked u n t i l a f t e r 7:00 p . m. p rep a rin g a f i n a l r e v is io n o f th e W hite House d r a f t o f the P r e s i d e n t s Report to go to the p r i n t e r t h a t n ig h t f o r p a g in g . Add to memorandum o f January 14.: 2/11/4 7 In t h i s in te r v ie w o f Jan u a iy 14 ., t h e r e f o r e , I t o l d th e P r e s id e n t t h a t we were much g r a t i f i e d a t th e fa v o r a b le r e c e p tio n t h a t e d i t o r i a l w r i t e r s and r a d io commentators had g iv e n t o h i s R eport o f Jan uary 8 and tha.t we were now concerned w ith th e problem o f o r g a n is in g th e C o u n c il’ s work so as b e s t to se rve him through the y e a r 19 4 7 and in con n ectio n w ith h i s Second Economic Report a t th e begin n in g o f 1948. An immediate q u e s tio n seemed to be whether th e J o in t Committee o f Congress would e x p e c t to have a c t i v e r e la t i o n s w ith th e C o u n c il and what our response should be i f th e y sought to draw us in to d is c u s s io n >vt VI t If C — J+ — o f th e Economic R ep ort. I p o in ted out t h a t th e o th e r members o f th e C o u n cil v e r e in c lin e d to welcome a r a th e r a c t i v e r e la t i o n s h i p , whereas I was somevhat ap p reh en sive as to th e p o s s i b i l i t y t h a t the Committee m ight seek to draw us out in to d is c u s s io n o f p o l i c y p o s i t io n s taken by the P r e s id e n t in h is R ep o rt, some o f which m ight n o t be p r e c i s e l y in l i n e w ith th e view s o f th e C o u n c il. L ittle p o s s i b i l i t y o f d iv e r g e n c e seemed to be e v id e n t in t h i s year* s R ep o r t, but I su g g este d t h a t we should e s t a b l i s h a p r a c t i c e from th e b eg in n in g which could be fo llo w e d c o n s i s t e n t l y and w ith s a f e t y in subsequent y e a r s when, c o n c e iv a b ly , th e r e m ight be c o n s id e r a b le d iv e r g e n c e be tween th e C o u n c il* s recommendations and th e P r e s id e n t* s p o l i c y s t a t e ment to the C o n g re ss. The P r e s id e n t im m ed iately agreed t h a t we should p r o te c t- o u r s e lv e s a g a in s t such a s i t u a t i o n w h ile a t the same tim e n o t rem aining a l o o f from th e work o f th e Com m ittee. The form ula which seemed to meet h is ap p ro val was t h a t we should be c o -o p e r a tiv e in " e l u c i d a t i n g ” f o r th e committee any p o in ts .o f f a c t ( o r , w ith c a re) o f in t e r p r e t a t i o n r e l a t i v e to th e P r e sid e n t* s Economic R ep ort, b u t t h a t is s u e s o f p o l i c y were to be l e f t alo n e and t h a t we should n o t be drawn in to d is c u s s io n o f them. The P r e s id e n t th o u g h t t h a t i t m ight be w e l l , s in c e i t was now known t h a t S en ator T a f t was to be chairman o f the com m ittee, i f I £.-r c a l l e d him--up f o r an in fo rm a l d is c u s s io n o f r e la t i o n s . He f e l t sure t h a t the g e n e r a l p r i n c i p le s o u tlin e d above would be a c c e p ta b le to T a f t and the r e s t o f th e Committee. F o llo w in g t h i s s u g g e s tio n , I c a lle d S en ato r T a ft* s o f f i c e appointm ent, which h is s e c r e t a r y assu red me would be arra n g e d . was th e l a s t I heard o f i t . f o r an That T a f t was rep o rted in th e papers a s n axiou s to postpone the r e p o r t from th e s e t d a te o f February 1 to May 1 or even J u ly 1 and ob served t h a t th e r e "was n o th in g in th e Report in the nature o f an economic program r e q u ir in g much a c t i o n by the C om m ittee.” S en ato r F la n d e rs was d isa p p o in te d in t h i s a t t i t u d e , and 0*Mahoney even th re a te n e d to b r in g ou t a m in o r ity r e p o r t. In th e end, however, th e y g o t to g e th e r on a b r i e f statem en t, a copy o f which i s a tta c h e d h e r e to . S en ator Murray made no comment on t h i s outcome, bu t S en ato r T a y lo r issu e d a v ig o r o u s sta te m e n t, copy o f which i s a tta c h e d . I a l s o mentioned to th e P r e sid e n t t h a t I had gone in some d e t a i l in to pjy in t e r p r e t a t io n o f th e C o u n c il1 s r o le in a paper '"Economics in th e P u b lic S e r v ic e ” p re se n te d a t th e m eetin g o f th e American Economic A s s o c ia t io n on January 2 7 , c a l l i n g h i s a t t e n t i o n p a r t i c u l a r l y to th e passage on page 25: ”¥hen we have brought t h i s s o r t o f m a te r ia l [ o b j e c t i v e economic a n a l y s i s ] to the P r e s i d e n t 's d e s k , we s h a l l have d isc h a rg e d our r e s p o n s i b i l i t i e s under the a c t as I c o n c e iv e i t . ” Under d a te February 1 3 , I r e c e iv e d a n o te from th e P r e s id e n t , ^ ^ s ta tin g ft he had read the ad dress w ith i n t e r e s t and con sid ered my statem en ts " p e r f e c t l y sound." ( L e t t e r a tta c h e d .)
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