Memorandum of Telephone Conversation
Secretary Acheson Secretary Brannan
Secretary Brannan telephoned this morning to discuss with the Secretary the matter of arranging for India to purchase grain at a price lower than US market price. He said he had talked with Mr. Webb and later with Mr. McGhee about the problem.
Secretary Brannan said that Commodity Credit Corporation owns enough grain, bought at $2.30 a bushel, and under the law Commodity Credit could sell to India for $1.40 \(the price they have indicated they are willing to pay\) and take the loss. However, if this is done the grain dealers in this country will make strong protests and it might prove to be very embarrassing since they have refused to sell the same grain to a grain dealer at $1.85. Secretary Brannan said if it is considered of great enough importance in the interest of our foreign relations to sell to India on a concession basis, he is willing to go along with it and fully support it, but he feels that either he or he and Secretary Acheson together should discuss it with the President and the decision should be made at a high level before orders are issued to Commodity Credit.
He added that justification would have to be made on the Hill on the basis of implementation of international objectives because they have to justify the impairment of Commodity Credit funds. He said there will be criticism on the basis of supplementing ECA appropriations.
Secretary Acheson told Secretary Brannan that the possibility of repetition would have to be considered also, which would have an important bearing on the decision. He said he would like to look into the matter and call Secretary Brannan later.
L.D.B.
S:DHM