The Randall Commission: Exploring the Relationship between Business and Government in creating U.S. Foreign Economic Policy

The first decade of the Cold War was a period of intense debate and sharp differences in the understanding and vision of the United States of America and to what extent the role it should take in the world as a new global superpower. Not only did policy differences come to fruition in both the Democratic Party and the Republican Party, as one might easily imagine there would be, there were also major differences in policy prescriptions from both the liberal and conservative factions of both the Democratic and Republican Parties. “Dominating our thinking throughout,” states Clarence Randall, President of the Inland Steel Company and Chairman of the Commission of Foreign Economic Policy, “has been the sobering realization that the policies pursued and the actions taken by the United States in respect to foreign economic policy profoundly influence the destinies of all of the peoples of the world. Though not of our seeking, it is one that we may be fated to bear for a long time to come.”[1] Whether or not a direction needed to be taken in respect to the foreign economic policy of the United States was clear, what was not clear at the time however, was which particular direction was most wise to take.

While ideological differences were abundant, both the Republican and Democratic Parties understood that the United States had a role to play in the new global battleground that was the Cold War. Both factions of both parties made it abundantly clear that the United States would be a crucial actor and that the actions that it embarked upon would in fact influence the destinies of all the peoples of the world. Many questions were striving for answers, and the Commission on Foreign Economic Policy set out to find an answer to a handful of them. Questions regarding the merits of a freely-trading or isolated United States was studied and debated. The efficiencies and inefficiencies of foreign aid had been brought into question and analyzed. The questions of foreign taxation, foreign private and public investment would be investigated and scrutinized as well.

This article’s focus will be in exploring how the Commission on Foreign Economic Policy came to be, how it answered these questions, as well as the implications of the Commission’s eventual findings. On a larger scale, understanding where the Commission fits within the formation of the foreign economic policy initiatives of the Eisenhower administration, and its predecessor, the Truman administration. President Eisenhower largely saw the Truman Doctrine as something more so resembling an emergency toolkit. The rebuilding of Europe economically and institutionally was an economic malady, but not a solution for the long-term. What was deemed necessary by 1953 was a longer term, more sustainable foreign economic policy.[2] Eisenhower’s prescriptions were indeed similar in a variety of ways to Truman’s. Where the solution in Eisenhower’s view differed however was in stressing the increased need for foreign free trade, as opposed to foreign aid on its own, which Eisenhower viewed as largely inefficient.[3] This Commission, of which was composed of a conglomerate of politicians, labor leaders, business tycoons, banking and investment executives, and prominent economists, created a foreign policy for the new world. These individuals were selected by the president, Speaker of the House, and President of the Senate. With the release of the administration’s first economic report merely five days later,[4] The Commission on Foreign Economic Policy played an important part in setting the course for foreign economic policy for the duration of Dwight Eisenhower’s presidency and the years following during the Cold War. It was effective not because Eisenhower himself didn’t believe their eventual findings beforehand, but because it set in stone the opinions of professionals in the corporate, political, and academic worlds, therefore bringing more strength and gravitas to the president’s argument. In extension, while personally believing in the benefits of global trade, it was the business and corporate executives who sat on and chaired this commission, that set American foreign economic policy for years to come.

The President’s Commission on Foreign Economic Policy, also known as the Randall Commission, was created by an act of Congress to study foreign economic policy in general,[5] and see where it worked, and where it did not. The Commission was headed by Clarence B. Randall, then board chairman of the Inland Steel Corporation. Chairman Randall oversaw a committee composed of seventeen members. President Eisenhower appointed seven members, Vice President Richard Nixon appointed five senators, and Speaker of the House Joseph W. Martin Jr. appointed five representatives. All of Eisenhower’s appointees were private citizens, from with backgrounds spanning various industries. The findings of the Commission supported the president’s beliefs on the topic of foreign economic policy. It advocated for an increasingly globalized marketplace, and less direct foreign aid. It requested that the United States government should halt both economic aid and emergency aid, technical assistance should increase marginally, and that private investment should be the primary financier of foreign economic development.[6] This of course if simply a summary, as the findings of the Randall Commission were much deeper than just the aforementioned information and will be discussed more in depth in the subsequent pages.

Eisenhower’s Commission on Foreign Economic Policy was a microcosm of the broader system that set a continuous trend in the economic policy of the United States. The globalization of the world economy became an ideological orthodoxy throughout subsequent administrations. This theme and pattern continued through John F. Kennedy’s presidency as he signed into law the Trade Extensions Act of 1962 into law, further decreasing tariffs and reducing barriers to international trade.[7] President Clinton signed the North American Free Trade Agreement, which increased American trade threefold with both Canada and Mexico. [8] The act was negotiated during Republican President George H. W. Bush’s administration and originated from the last years of the Reagan administration, as both the United States and Canadian governments ratified the United States-Canada Free Trade Agreement.[9] In the ratification of the Central American Free Trade Agreement, one can see almost identical similarities between President George Bush’s and President Eisenhower’s foreign economic goals; as stated by the United States Trade Representative, “Trade and economic growth promotes prosperity and stability and opportunities for citizens within their home country,” primarily through enforcing a structure that “create[s] a better climate for investment and business.”[10] While President Bush did not have to work within the same Cold War framework that Eisenhower did, the same general policy principles and initiatives seem to apply.

The findings of the Commission on Foreign Economic Policy are of importance for a plethora of reasons. First and foremost, it set the stage for a significant portion of foreign economic policy of the Eisenhower Administration. The promulgation of American trade abroad became a sort of orthodoxy throughout the Eisenhower administration, as well as subsequent administrations that followed. It began to quiet the multiple year long debate as to what international role the United States should play around the world. Lastly, the creation of the Randall Commission highlighted through the membership itself the power that corporations and business executives had, while working in tandem with politicians to create federal government policy.

The Randall Commission is largely missing from the historical scholarship so far as can be found, with it only really being mentioned in passing throughout different peer-reviewed articles, books, and primary documents. Charles Lipson, professor of Political Science at the University of Chicago mentioned the Randall Commission in his article in which he examines the in-tandem relationship that both multinational corporations and government agencies have.[11] The Randall Commission had been mentioned again in passing by Richard A. Watson, who has analyzed the congressional behavior leading up to a vote on the Reciprocal Trade Agreements Act, a bill that would allow for the president to unilaterally increase or decrease tariffs on foreign goods. He argued that shifting business interests had made room for an opening up to free trade. Watson highlighted how the Randall Commission helped to open up the United States economy during Eisenhower’s tenure, yet he does not dive deeper into its creation of the Commission or its findings.[12] Mary S. McAuliffe examined the revisionist history of Eisenhower’s presidency in the subsequent decades, and while not directly mentioning the Randall Commission, she examined both the misconceptions and truths between president Eisenhower’s relationship with corporate executives.[13] McAuliffe shows the change in view of Eisenhower’s presidency over time, as scholars began to remove themselves from the view that Eisenhower was a “weak or passive leader who was content to let others run his presidency for him.”[14] Wendy Wall’s Inventing the “American Way” explores the idea of a cohesive American identity; in doing so she chronicled the initiatives of the Advertising Council and how government programs worked throughout the 20th century to enhance the wishes of American business.[15] Historian Steven Wagner contributed a few pages to the Randall Commission and the Reciprocal Trade Agreements Act, the latter of which was renewed in part due to the findings of the Randall Commission report. In his book, he studied the role of Eisenhower’s “Middle Way” in balancing both the liberal and conservative factions of the Republican Party.[16] The essays compiled and edited by historians Kathryn C. Statler & Andrew L. Johns,[17] mentioned the Randall Commission intermittently, as they discussed the role of the Third World in the global economy. Historians William H. McClenahan & William H. Becker argued that in contrast to popular opinion immediately following his presidency, “economic policy was second only to national security in the president’s mind.”[18] McClenahan and Becker referenced both the Randall Commission and the Reciprocal Trade Agreements Act intermittently as well in providing arguments for the significance president Eisenhower put on the promulgation of the American economy abroad. In short, while the Randall Commission has been mentioned abundantly in passing, and in many cases acknowledged as an influential report, it is difficult to come across an analysis of the report’s creation, findings, and subsequent effects later on.

In an effort to paint the entire picture of the Commission on Foreign Economic Policy and its findings, a few things will be analyzed. First, as obvious as it may be, this paper will look at the report itself and its findings. In this section the paper will also address the prevailing economic environment since the 1940s, primarily in regard to both the Bretton Woods monetary system and the General Agreement on Tariffs and Trade. From there this piece will analyze the various Commission members and their backgrounds, and in doing so will paint a picture of the report’s background and possible outside factors that had the ability to influence it. Second, we will look into the effects of the findings of the Randall Commission. To do this, we will look at congressional testimony and the public responses of business and corporations. Lastly, we will look into the concrete decisions made as a result of this commission; of which might be the creation of a new law or agency, a change in business tactics or public opinion, or a change in the ideological positions of political party operatives.

It is important to note that the economy had begun to internationalize during the presidency of Franklin Delano Roosevelt and had started to expand even more as Harry Truman took office. Perhaps one of the most significant international achievements was the Bretton Woods Agreement. With the Bretton Woods Agreement came the creation of an international monetary system. Based on the theory that the second World War was caused in part by an inability of countries around the world to respond to the global depression, this system created a global set of rules in the hopes of a stable future global economy. The Bretton Woods Agreement set out rules in which other countries would follow. The first of which were adjustable, fixed exchange rates. Nations that were members of the Bretton Woods system would tie their currencies to the U.S. Dollar, as the post-war United States was seen by many as the primary creditor of the world. While other countries tied their currency to the U.S. dollar, the U.S. dollar was tied to gold, at the price of thirty-five dollars per ounce of gold. Lastly, member nations would make market transactions of loanable funds in order to ensure they stayed within a 1% parameter of the fixed-rate set by the governing agency. The agencies of which enforced these rules were the International Monetary Fund and the World Bank, of which then called the “International Bank for Reconstruction and Development.”[19]

The Bretton Woods Agreement was one of the main proponents of a new global market economy, and with it came approximately thirty years of “relative stability, order, and discipline.”[20] While it took over a decade to completely implement the Agreement, it was a precursor to other prominent and highly successful organizations. The Bretton Woods Agreement would eventually lead to the General Agreement on Tariffs and Trade (GATT) in 1947, which would also be succeeded by the World Trade Organization (WTO), of which was established in 1995. Due in part to these institutions, global trade since the second World War had grown at a rate 50% faster than worldwide GDP, of which economists Kemal Dervis and Caroline Conroy of the Brookings Institute credit to the “successive rounds of liberalization under the auspices of the World Trade Organization.[21]

The General Agreement on Tariffs and Trade was responsible for the lowering of tariffs as the global powers entered the 1950’s. As a writer for the Harvard Crimson put it in 1954, “thirty-four nations now meeting in Geneva are urging that good fences do not make good neighbors and that lower tariff walls are needed for economic stability in the free world.”[22] That was the general consensus of the member-states, as international tariffs were reduced throughout the late 1940s and early 1950s, in which tariffs were reduced or disposed of on one-fifth of global commerce. For the next two decades, global trade increased by about 8% annually.[23]

The Commission on Foreign Economic Policy put forth a variety of proposals during its examination of foreign economic policy at the time. It came to various conclusions in regard to United States tariff policy, farm subsidy policy, tax policy, and foreign investment policy. With the members making up the Commission came various political ideologies, and with the conclusions of the Commission came various concurrent opinions and dissents. While the Commission on Foreign Economic Policy itself generally mirrored the president’s own suspicions and beliefs when it came to foreign economic policy, the divide between members of the Commission highlighted the national divide when it came to these same issues.

Eighty-seven individuals made up the membership of the report. The committee was chaired by Clarence Randall and vice-chaired by Lamar Fleming Junior. Previously, Randall was president of the Inland Steel Corporation and Fleming was a cotton industry executive. It should be noted that Randall’s Inland Steel Corporation was headquartered in Chicago, an area considered relatively safe from foreign competition, which may have influenced his thinking on the virtues of free trade.[24] Lamar Fleming and Clarence Randall were two out of seven of president Eisenhower’s allotted appointments, along with David McDonald, Cola Parker, Jesse Tapp, John Whitney, and John H. Williams. David McDonald was a labor leader, serving as president of the United Steelworkers of America from 1952–1965. Cola G. Parker served as president of Kimberly-Clark Inc., a paper manufacturer, from 1945–1953. John Whitney worked as a venture capitalist. John H. Williams was an American economist and president of the American Economic Association; the other appointed economist was Jesse Tapp, who was a board chairman for Bank of America, and a leading academic in agricultural economics.[25] Of the rest of the staff, there consisted of four senior staffers, twenty-two senior economists, while the rest consisted of administrative staffers.

Five members from both the House of Representatives and the Senate were also appointed to the Commission by the Speaker of the House and the Vice President. Of these members, three from each House were Republicans, while two from each House were Democrats. The four Democrats; both Senator Walter George of Georgia, Senator Harry Byrd of Virginia, and representatives Jere Cooper of Tennessee and Laurie Battle of Alabama, were all conservative Democrats who advocated for low tariffs.[26] The other six senators were Republicans and consisted of Senators Bourke Hickenlooper of Iowa, Prescott Bush of Connecticut, and Eugene Milliken of Colorado. Senator Milliken sat as chair of the Senate Finance Committee and proved to be one of the most outspoken critics of the general findings of the Randall Commission. The members of the House who sat on the commission were representatives John Vorys of Ohio, Richard Simpson of Pennsylvania, and Daniel Reed of New York, the latter of which was Chairman of the House Ways and Means Committee. Representatives Reed and Simpson joined senator Milliken in dissents of the Randall Commission report.

The Commission on Foreign Economic Policy studied twelve areas of foreign economic policy and essentially proposed four solutions to the problems and inefficiencies in which they saw most vital. Of these four were the gradual termination of foreign economic aid, promotion of foreign investment, full currency convertibility and an increasingly liberalized and open global economy.[27] Chairman Randall began the report by identifying the problem, in which he calls “the Postwar Dollar Problem.”[28] The Postwar Dollar Problem identified a situation in which the non-Western European allies of the United States were unable to earn money and grow as an economy. While the Marshall Plan successfully revitalized the economy of Western Europe, much was still left to do in the rest of the world.

One of the major recommendations of the Commission was the termination of foreign economic aid. It deemed foreign aid increasingly inefficient in the new era and argued that the Marshall-esque foreign economic aid was “directed toward the rapid restoration of economic and political stability within the free world,” and it only “dealt with these maladjustments on an emergency basis only.”[29] Four members dissented this recommendation, of which were Senators Byrd and George, representative Battle, as well as David MacDonald, a labor leader and presidential appointee to the Commission. The opinions of these members vary, Mr. George and Mr. Byrd believe that the recommendation is too broad and susceptible to loopholes, while Mr. McDonald is of the belief that the recommendation is too narrow and may lead to economic aid used solely when deemed necessary for military security. McDonald believed the recommendation was too black and white, and there are probably cases in which economic aid could be useful in achieving U. S. objectives.[30]

The second major recommendation of the Commission is the promulgation of foreign private investment abroad. “The Government can and should give full diplomatic support to the acceptance and understanding abroad of the principles underlying the creation of a climate conducive to private foreign investment,”[31] states the report, in so arguing that an increase in United States business investment abroad can assist in the foreign policy objectives of the United States by means of enhancing and strengthening the United States economy abroad and increasing foreign productivity. One of the ways in which the Randall Commission sought to achieve this goal was through revisions in tax law. The three main provisions emphasized were a reduction in the Corporate tax rate for foreign investment outside the western hemisphere, removal of foreign tax credit restrictions, and the ability for companies to organize their business in ways they see fit in foreign countries.[32] While no dissents were written other than that written by Milliken, presidential appointee McDonald wrote a concurring opinion, while senator Milliken stated that changes in the tax code to incentivize foreign investment may end up decreasing domestic investment.[33]

Currency Convertibility was a major point of interest in the report, and the Commission came to the conclusion that a gradual approach toward currency convertibility would be the best way to achieve that goal. The ability to convert currency smoothly is immensely important for international business with foreign nations, where a price must be mutually and fairly agreed upon. The Commission made a point that “convertible currencies constitute an indispensable condition for the attainment of multilateral trade.”[34] If the United States were to work with foreign nations to achieve an easily convertible currency, U. S. business could invest in foreign countries more easily and international markets could be established.

The last major point the Randall Commission made, if perhaps generally, was the general liberalization of the global economy. Evidence of this lies in the “Introduction” and “Progress and Responsibility” section. A disproportionate section was written towards the back of the report in the “Tariffs in Trade” portion of the document, in which the Commission sought best to renew the Reciprocal Trade Agreements Act. This portion of the report seemed to be the most tumultuous, with Clarence Randall writing “no other single field produced such directly divergent statements of alleged fact, so many shades of opinion, or such diversity of recommendation.”[35] David McDonald, the labor leader on the Commission, recommended financial assistance to individuals, towns and businesses that may be economically injured from tariff reduction and global trade. While the recommendation was not taken up by the Commission as a whole, it was endorsed by Senator Paul Douglas, Senator Humphrey, and then-Senator Kennedy, who would later sign the recommendation into law within the Trade Expansion Act of 1962.[36]

How do these recommendations reflect the general interests of business? More specifically, how did they reflect the general interests of those serving as appointees to the Commission on Foreign Economic policy? To start, the abolishment of foreign economic aid would largely make room for foreign direct investment, of which that foreign aid would have previously crowded out the marketplace for private firms to invest. While Eisenhower and moderate Republicans might argue that directing private enterprise to build up foreign economies would be saving the Federal Government money, conservative Republicans like Senator Milliken argue that incentivizing American business to move abroad would weaken the position of the domestic worker and the domestic economy as a whole.[37] All the while, by incentivizing foreign investment, American businesses and corporations open themselves up to a literal world of new potential consumers. Adhering to the slogan of “Trade, not Aid,”[38] which meant the incentivizing of foreign investment and the decreasing of foreign aid were two recommendations that work hand in hand.

The recommended revisions of the tax code were also of paramount value to corporations and businesses. While the previous administration also utilized tax incentives for private foreign investment, the Eisenhower administration readily utilized the Randall Commission’s tax recommendations due in part by their belief that it would strengthen the United States position globally, align U.S. partners and prevent the economic development of communist states.[39] The tax recommendations of the Commission on Foreign Economic Policy were of obvious benefit as well to corporations looking to expand their markets. A reduction on the tax rate for foreign investment is a direct incentive, removal of tax credit restrictions for foreign investment also are extremely useful for foreign business, and leniency in the organization of business abroad assists businesses in maximizing business practices that prove profitable. The Randall Commission’s recommendation on promoting countries abroad to work towards more convertible currencies, made it much easier for business to make international transactions. Full currency convertibility would make transaction costs for businesses cheaper and foreign investment for corporations and businesses smoother simpler, and more cost-effective.

As president of Kimberly Clark, presidential appointee Cola G. Parker expanded profits over threefold during his tenure with the company, from 41 million dollars in 1942 to 165 million dollars in 1953. His successor, John P. Kimberly took over in 1953 as Parker had been appointed to the Randall Commission, and Kimberly Clark quickly expanded overseas in subsequent years.[40] Parker, who was “highly critical of federal ‘meddling’ into business, agriculture and education,” was described by the New York Times as a “leading voice in business circles throughout his mature years.”[41] While similar individuals like Cola Parker on the commission may not be trying to enhance their own profits, they certainly subscribe to a worldview that is of the utmost benefit to corporations striving to raise profits and reach new markets.

The last major recommendation of the report, and one of the reasons in which it was created in the first place, was to extend the Reciprocal Trade Agreements Act. The RTAA had changed since its 1934 creation by president Franklin D. Roosevelt through its various renewals, with historian Richard A. Watson noting the RTAA of 1955 was radically different than the version of the act renewed a decade earlier.[42] The president in his inaugural address made it clear his desire to renew the act. The Republican majorities in Congress extended the RTAA for one year in both 1953 and 1954, and in an ironic change of allies, it was the Democratic majority in 1955 that finally extended the RTAA for more than one year, until 1958.[43] The ability of the president to change tariff rates and unilaterally enter into trade agreements, as the legislation allows, was an exceptionally useful tool for the president to open up the global economy. In extension, with Eisenhower’s stated goal to open up the United States to the global economy,[44] an extension would also be useful to American business in creating new foreign markets, as a lower tariff rate for goods entering or exiting the United States would lower the cost of doing business abroad.

The findings and recommendations of the Commission on Foreign Economic Policy were of immense help to the United States business and corporate communities in assisting their foreign aspirations. The question however, is whether or not these findings were to deliberately help the business and corporate community, or whether the Report’s findings were a representation of the members worldview, and the shifting worldview of the country as a whole towards a liberalized global economy. While the corporations associated with the members of the Commission certainly would benefit from these findings, it seems that, the free-trade members genuinely subscribed to this worldview and did not simply create their findings to enhance their private goals.

Outside of the Commission, prominent members of the business community who held positions in the executive branch were having their corporate ties examined. One famous example in that of Charles E. Wilson, Secretary of Defense. Charles E. Wilson, Secretary of Defense under president Eisenhower and former Chief Executive Officer for General Motors was under the microscope of those weary of corporate and government collusion. In a congressional confirmation hearing, Senator Hendrickson of New Jersey asked then nominee Charles Wilson what he might do in a conflict of interest situation between General Motors and the Defense Department. The question posed by Hendrickson was certainly fair, as the U.S. Government awarded General Motors about 6.8% of defense contracts in 1953.[45] In Wilson’s answer he had famously stated, “What’s good for the United States is good for General Motors, and vice versa.”[46] While this is only the popularly publicized portion of the quote, it certainly highlights quite clearly the shared interests that executives in both business and industry held during this time period. In analyzing Wilson’s comments, one can see that executives in business saw in the federal government the role of promoting American business.

The findings of the Commission were received in a diverse array of ways. Given the multifaceted nature of the Randall Commission report, certain findings and recommendations were of higher controversy than others. Of the most controversial seems to be the extension of the Reciprocal Trade Act, the recommended change in tax policy, and the incentivization of foreign corporate investment perturbed the isolationist wing of the Republican Party. Cleveland Bailey, Democratic representative from West Virginia’s 3rd congressional district, described the report’s findings as “disappointing and confusing,” making the point that “the future of my own State of West Virginia is very dark indeed if the report’s recommendations are written into law.”[47] A young Robert Byrd, then a fellow U.S. representative from West Virginia, held similar rebukes of the Randall Commission’s findings. He argued that the Commission failed to hear from “spokesman of the coal industry and other affected industries an opportunity to be heard.”[48] Byrd’s statement reflects the dissents written by Commission members Reed and Simpson. “The only witnesses allowed to appear at public hearings held by the Commission in the United States were representatives mainly of recognized pressure groups whose views were known in advance.”[49] While Reed and Simpson give no examples in their dissent of the “recognized pressure groups” that had testified, there was clear hostility to the findings and methods of the report, specifically in regards to the section on foreign aid. It should be noted however that individuals of the United States were allowed two days to testify, while four days were permitted to testify during the hearings that the Commission held in Europe. Reed and Simpson insinuate that it was in the interest of those testifying in the latter hearings to obtain help from the United States for foreign countries.[50]

The progress and findings of the Randall Commission were reported by the press by national newspapers at the time as well. Arthur Krock of The New York Times made the observation that Chairman Randall would be “performing a miracle” if he were able to pull together support from a majority of Congress, noting the political tension between both factions of the Republican Party the time. Krock also corroborates the insinuation made later by Reed and Simpson in relation to the influence of foreign officials on the Commission’s findings. Arthur reports fifteen foreign groups of businessmen who were reportedly affiliated with the International Chamber of Commerce.[51] There is no doubt that the Commission valued foreign sources in holding interviews and hearings, and while both congressmen Reed and Simpson may have speculated whether or not the Commission put foreign interests over domestic interests, it cannot be quantified.

Not all members of Congress subscribed to the views of Byrd, Bailey, Reed, and Simpson. Prescott Bush, senator from Connecticut and member of the Commission, wrote a statement to be printed into the record the day following representative Byrd and Bailey’s remarks. Bush held more favorable views of the report, all the while still recognizing its insufficiency in certain areas. In defense of the report, he stated that “public interest has centered largely on the Commission’s work in the area of trade and tariff.”[52] In his statement Bush endorsed the Commission’s recommendation to extend the Reciprocal Trade Agreements Act with added safeguard provisions.

The RTAA would eventually be extended one year in 1954 and an additional three in 1955, largely to the credit of the Randall Commission,[53] yet still not without a fight in Congress. The effect of extending the Reciprocal Trade Agreements Act, as representative from Oklahoma Tom Steed had put it, “would be the stagnation of many industries and a slow death for others.”[54] To hammer out the Reciprocal Trade Act of 1955 proved to be a major struggle, and eventually the free-traders and isolationists settled on a middle ground. After an excruciating battle, the Reciprocal Trade Agreements act was extended in Congress. The Act would be extended for three years (it had historically never been extended longer than three years), with the maximum amount of tariff reductions not able to exceed 15% in the coming three-years. To further protect domestic production, the president could create quotas on certain imported goods, and trade agreements could be modified by the president if found to be harming the domestic producer.[55] In creating these modifications, the fears of the isolationist wing of the party were quelled, while still making room for the globalization of the international economy, aspirations of deep importance to both Eisenhower and the business world.

The American steel industry greeted the Eisenhower presidency with open arms. Arthur B. Homer, President of Bethlehem Steel, seems to summate the feelings of the business community clearly, expressing that “the basic economic philosophy of the Eisenhower regime is that the country should rely on free enterprise to continue prosperity and high living standards and that the government should act only as a stabilizer of desirable conditions-with a minimum of interference.”[56] While many industries welcomed the Eisenhower presidency, to assume Eisenhower aspired to create an international economy just to strengthen U.S. corporations and businesses would be to not look at the full picture. While Eisenhower believed in a system that was indeed of benefit to corporations and business, he believed that healthy business was simply a piece of a the broader healthy, sound economy. A climate that is inviting to business expansion was second to long term policy goals of his administration. When confronting the inflationary problems of the mid-50s and the recession of 1958, Eisenhower “sought to persuade business and labor to limit short-term benefits in the interest of long-term goals of a stable, growing economy, one able to meet the demands of the Cold War.”[57] Eisenhower was willing to work with business, and saw the importance of business in promulgating the economy at home and abroad, but did not work for business, per se.

The successor to the Commission on Foreign Economic Policy, was also chaired by Clarence Randall, as the Council on Foreign Economic Policy. The Council was created in 1954, after the findings of the Commission, and sought to advance the findings of the Randall Commission into law, a project of which succeeded on many fronts. In a report compiled by now-Special Consultant to the President, Clarence Randall listed out the achievements of the council since its creation in 1954. The RTAA had been extended. A handful of tax policy recommendations had been carried out, the derestriction of foreign tax credits and an incentivized foreign tax code, for example. The Executive Department had been incentivizing both international trade and travel, and the “Buy-American Act” had been revised. This law was initially created in 1933 and signed into law by president Herbert Hoover.[58] The act incentivized and prioritized the purchase of domestic goods over foreign goods. The act “created price references that favour ‘domestic end products’ from American firms,”[59] thus codifying American preference for domestic products when needed for federal government projects.

As time passed, the Commission on Foreign Economic Policy transformed into the Council on Foreign Economic Policy. The corporate and political elites that shaped policy years earlier begin to see the fruits of their harvest in the late 1950’s, with much credit due to the continued work of the Council of Foreign Economic Policy. While it took the rest of the Republican Party awhile to catch up, by 1955 the general consensus in terms of foreign economic policy was in the promotion of an increasingly global economy. Traces of these corporate executives sprout up throughout the historical record of the time period. A year after the report was published, Cola G. Parker was nominated president of the National Association of Manufacturers, an advocacy group that just a decade earlier launched an advertising campaign promoting free enterprise.[60] Jesse W. Tapp, president of the Bank of America later served the administration again as a member of the Fairless Commission, which studied foreign aid policy. Benjamin Fairless was previously the chairman and CEO of United States Steel, a company of which produced almost 30% of United States output in 1951.[61]

The findings of the Commission set the stage and outlined the goals of the United States during the Eisenhower era with respect to foreign economic policy, and domestic economic policy to an extent, as they often complement one another. The ideology and policy prescriptions that the Randall Commission advocated for became orthodoxy in subsequent decades. Even as early as 1955, perhaps with the help of a new Democratic majority in Congress, the ideological makeup of the Republican party began to shift towards the promotion of an increasingly international role in world affairs.[62] The moderation in which Clarence Randall steered his objectives led the way for a new era of Republicanism.

Prescott Bush perhaps described it best in his statement to the Congressional Record, stating “The Commission’s report will not satisfy those theorists who advocate unlimited free-trade nor those who would have us return to extreme protectionism. I am confident however, that it will have the support of a majority of people who favor a moderate approach. If adopted, the Commission’s recommendations can make possible the benefits of an increased flow of imports with a consequent reduction and eventual elimination of the need for foreign aid programs, and at the same time stimulate a strong and healthy domestic economy.”[63]

As time progressed in the Eisenhower era, the findings of the Randall Commission not only set the stage for many policy objectives of his presidency, but also showed as an example the willingness of business and government to work hand in hand. A new, mutually-beneficial relationship was in the making. Individuals like Cola Parker, Jesse Tapp, and Clarence Randall had a say in a great deal of the policy decisions of the Federal government. Many of those decisions directly affected the way their previous or current businesses were allowed to operate. In the case of the Randall Commission, you see business and corporate leaders promulgating economic policy that shapes the way in which business itself operates. These business leaders however did not simply recommend certain policies because it would help their business, although the Randall Commission recommendations certainly would. They recommended these policies because they, along with the president and the shifting American public, actively believed and advocated for these policies.

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[1] Clarence Randall, “Commission on Foreign Economic Policy: Report to the President and to Congress,” (January 1954). 1.

[2] Kathryn C. Statler & Andrew L. Johns, The Eisenhower Administration, The Third World, and the Globalization of the Cold War. (Lanham, Maryland: Rowman & Littlefield, 2006), 49.

[3] Statler & Johns, The Eisenhower Administration, The Third World, and the Globalization of the Cold War. 66.

[4] Dwight D. Eisenhower, “Economic Report of the President,” January 28th, 1954.

[5] “Trade Agreements Extension Act,” Public Law 215, Sess. Of 1953 (United States, 1953).

[6] Steven Wagner, Eisenhower Republicanism: Pursuing the Middle Way. (DeKalb, Illinois: Northern Illinois University Press, 2006), 100.

[7] Cynthia Clark Northrup & Elaine C. Prange, Encyclopedia of Tariffs and Trade in U.S. History: The Encyclopedia, Volume I. (Santa Barbara, CA, Greenwood Publishing Group, 2006).

[8] Mohammed Aly Sergie & James McBride, “NAFTA’s Economic Impact,” Council on Foreign Relations (October 1st, 2018).

[9] Government of Canada, “Canada-U.S. Free Trade Agreement,” (Oct. 1, 2018).

[10] Office of the United States Trade Representative, “CAFTA-DR (Dominican Republic-Central America FTA).”

[11] Charles Lipson, “The Development of Expropriation Insurance: The Role of Corporate Preferences and State Initiatives,” International Organization 32, №2 (University of Wisconsin Press: Madison, 1978). 359.

[12] Richard A. Watson, “The Tariff Revolution: A Study of Shifting Party Attitudes,” The Journal of Politics 18, №4 (The University of Chicago Press: Chicago, IL, 1956). 684–685, 687.

[13] Mary S. McAuliffe, “Eisenhower, The President,” The Journal of American History 68, №3. (Oxford University Press: Oxford, England, 1981). 625, 628.

[14] Mary S. McAuliffe, “Eisenhower, The President,” The Journal of American History 68, №3. (Oxford University Press: Oxford, England, 1981). 625, 628.

[15] Wendy L. Wall, Inventing the “American Way,” The Politics of Consensus from the New Deal to the Civil Rights Movement. (Oxford, England: Oxford University Press, 2008). 5, 172, 176.

[16] Steven Wagner, Eisenhower Republicanism: Pursuing the Middle Way. (DeKalb, Illinois: Northern Illinois University Press, 2006), 97–101.

[17] Kathryn C. Statler & Andrew L. Johns, The Eisenhower Administration, The Third World, and the Globalization of the Cold War. (Lanham, Maryland: Rowman & Littlefield, 2006), ix.

[18] William H. McClenahan Jr. & William H. Becker, Eisenhower and the Cold War Economy. (Baltimore Maryland: Johns Hopkins University Press, 2011.) xi.

[19] Matthew Johnston, “How the Bretton Woods System Changed the World.” Investopedia.com (June 25th, 2019).

[20] Johnston, “How the Bretton Woods System Changed the World.”

[21] Kemal Dervis & Caroline Conroy, “What’s behind Trump’s trade war?” Brookings Institute (October, 2018).

[22] Harvard Crimson, “The Great GATT.” The Harvard Crimson, November 6th, 1954.

[23] World Trade Organization, “The GATT years: from Havana to Marrakesh.” World Trade Organization.

[24] Stein, Running Steel, Running America. 225.

[25] “Jesse Tapp dies; Farm Economist.” The New York Times, January 1st, 1967.

[26] G. William Domhoff, The Power Elite and the State, (Routledge: New York, NY, 2017). 212.

[27] McClenahan & Becker, Eisenhower and the Cold War Economy. 185.

[28] Clarence Randall, “Commission on Foreign Economic Policy: Report to the President and to Congress,” (January 1954). 3–5.

[29] Randall, “Commission on Foreign Economic Policy.” 6.

[30] Randall, “Commission on Foreign Economic Policy.” 10–11.

[31] Randall, “Commission on Foreign Economic Policy.” 17.

[32] Randall, “Commission on Foreign Economic Policy.” 19–21.

[33] Randall. “Commission on Foreign Economic Policy.” 78–79.

[34] Randall, “Commission on Foreign Economic Policy.” 73.

[35] Randall, “Commission on Foreign Economic Policy” 43.

[36] Stein, Running Steel, Running America. 225.

[37] Randall, “Commission on Foreign Economic Policy.” 78–79.

[38] Wagner, Eisenhower Republicanism. 97.

[39] Joanne Gowa, “Subsidizing American Corporate Expansion Abroad: Pitsfalls in the Analysis of Public and Private Power.” World Politics 37, no. 2 (Cambridge University Press: Cambridge, UK, 1985). 187.

[40] Robert Speckor & William W. Wicks. Shared Values: A History of Kimberly Clark. (Greenwich Publishers Group: Lyme, Conn., 1997.) 90, 92–93.

[41] “Cola Parker Dies; Ex-Head of Nam.” The New York Times, June 28th, 1962.

[42] Watson, “The Tariff Revolution.” 679.

[43] Michael J. Hiscox, “The Magic Bullet? The RTAA, Institutional Reform, and Trade Liberalization.” International Organization 53, no. 4, (Cambridge University Press: Cambridge, UK, 1999). 686.

[44] Dwight D. Eisenhower, “First Inaugural Address.” 1953.

[45] U.S. Congress. Congressional Record. 86rd Congress, 1st session, 1959. Volume 105, Part II.

[46] Ellen Terrell, “When a Quote is not (exactly) a quote: General Motors,” (Library of Congress, April 22nd, 2016. blogs.loc.gov

[47] U.S. Congress. Congressional Record. 83rd Congress, 1st session, 1954. Volume 100. 744–745.

[48] U.S. Congress. Congressional Record. 83rd Congress, 1st session, 1954. Volume 100. 748.

[49] Randall, “Commission on Foreign Economic Policy.” (1954). 88.

[50] Randall, “Commission on Foreign Economic Policy.” (1954). 88.

[51] Arthur Krock, “A Strong Presentation to the Randall Commission” The New York Times, Nov. 24th, 1953.

[52] U.S. Congress. Congressional Record. 83rd Congress, 1st session, 1954. Volume 100. 764.

[53] Wagner, Eisenhower Republicanism: Pursuing the Middle Way. 99.

[54] U.S. Congress. Congressional Record. 83rd Congress, 1st session, 1954. Volume 100. 769.

[55] McClenahan Jr. & Becker, Eisenhower and the Cold War Economy. 204.

[56] Stein, Running America, Running Steel. 19.

[57] McClenahan Jr. & Becker, Eisenhower and the Cold War Economy. 79.

[58] Paul H. Cullen, “Memorandum From the Secretary of the Council on Foreign Economic Policy (Cullen) to the Members of the Council.” U.S. Office of the Historian, August 15th, 1955.

[59] Government of Canada, “The Buy American and Buy America Acts,” (May 22nd, 2005).

[60] Wall, Inventing the “American Way.” 60–61.

[61] Judith Stein, Running Steel, Running America. (Chapel Hill, NC: University of North Carolina Press, 1998). 7.

[62] Michael J. Hiscox, “The Magic Bullet? The RTAA, Foreign Institutional Reform, and Trade Liberalization.” International Organization 53, no. 4, (Cambridge University Press: Cambridge, UK, 1999). 686.

[63] U.S. Congress. Congressional Record. 83rd Congress, 1st session, 1954. Volume 100. 765.