704 Foreign Relations, 1958-1960, Volume IX



had asked him two or three times why the United States had not prohib-
ited the Ford transaction. Mr. Anderson commented that the Fords said
that they had given deep consideration to the adverse impact of their
action but had decided to go ahead with it anyhow. Mr. Anderson had
gone so far as to tell the Fords that their action might be the cause of
im-
position of exchange controls.5 Mr. Anderson said he told Erhard that
the only way to restrict the Fords would be to impose exchange controls,
and that Erhard was horrified at the thought. Secretary Anderson said
that Kobbold had told him the United Kingdom will not hold the dollars
derived from the transaction. They will use some in the IMF, but the re-
mainder, in the order of $180 million, they will immediately turn in for
gold in New York. Mr. Dillon commented that General Norstad had
said it would be a long time before the GIs buy a Ford again.
    Mr. Dillon said that the press has been carrying stories that Senator
Kennedy wants him to be his Secretary of the Treasury. The President
stated that Kennedy had told Mr. Nixon that he would like to have Dil-
lon and Lodge in his administration, but that they would not be given
policy positions. Mr. Dillon seemed somewhat surprised at this. The
President went on to say that if Dillon were offered the Secretaryship of
the Treasury, in his opinion he should take it at once and do everything
in his power to protect our currency. The President added that if Ken-
nedy were to offer him the Secretaryship of the Treasury, he would take
it himself. Mr. Anderson reiterated that the key thing seems to be the
question of who his successor is to be. Everyone in Europe is asking this.
Mr. Anderson said that something tangible has already come out of the
Bonn discussions, in the German willingness to make soft loans, and in
their offer to buy additional military equipment. He thinks that we must
be prepared to wrestle with them over troop deployments.
    The President asked if he was correct in thinking there is no sub-
stantial dollar problem in Okinawa deployments, and Mr. Anderson
said this is true. The President said what he had in mind is to cut down
on deployments in Japan and move the forces to Okinawa.
    Mr. Anderson said that Germany and Italy are the big problems.
The President asked if we could scatter our troops more and use the soft
currencies generated in each country to pay some of our expenses there.
Mr. Anderson said this is a good idea although it is hard to see where
this could be substantial. Mr. Dillon said the other Europeans are watch-
ing this whole situation closely to see that the Germans do not help us by
shifting the gold drain to them.



    5 In November, Ford Motor Company announced that it would spend $138
million
on foreign facilities.