The Testing of Engine Charlie

Shortly after 1 a.m., in the rear of the presidential box at the McDonough gym inaugural hall, Dwight Eisenhower and Charles Erwin Wilson* talked about the Wilson crisis. Ike seemed vehement, once made a table-pounding motion with his doubled fist. Wilson was having his say too. Later, Eisenhower's aides said the President told Wilson that he wanted him to do whatever was necessary to qualify as Defense Secretary. A few hours later, Secretary of the Treasury George Humphrey heard from friends on Capitol Hill exactly what Wilson would have to do: sell his General Motors stock, or he would not be confirmed.

The "conflict of interest" law forbids Government officials from letting contracts to companies in which they have an interest. But Wilson's case was not clear black & white. As Secretary of Defense, he would not actually pass on contracts with General Motors or anyone else. That would be done by underlings. Nevertheless, the Senators felt that, since he certainly could influence the underlings, he must sell. On the other hand, Charles Edward Wilson, who had quit as president of General Electric to become Director of Defense Mobilization, had not been forced to sell his stock. His out: ex officio, he didn't buy anything. He too might have been considered in a position to influence those who did buy. A shadowy line ran somewhere between Electric Charlie's old job and Engine Charlie's new one.

For two days Eisenhower, Humphrey, Wilson and Attorney General Herbert Brownell conferred and considered. Then Wilson slipped into the private side door of the President's executive office and revealed his decision: he would get rid of his stock (giving up to 20% to his family and selling the rest), and pay a capital-gains tax of several hundred thousand dollars.

Misleading Reports. The case had reached a point where Wilson could have done nothing else without seriously embarrassing the Eisenhower Administration. Two factors built up the crisis: 1) the failure of Ike's advisers to foresee the difficulty, and 2) misleading reports of what Wilson told the Senate Armed Services Committee. The sum of the reports that leaked from the committee's executive session was a very bad press for Wilson. Column after column of type left the impression that he was being arrogant, that he didn't understand how there could be a conflict of interests between private business and Government, that he was going to have things his way, or else.

Last week, when the official record of Wilson's testimony was released, it was clear that he had not been as bad as his press. Engine Charlie certainly lacked Dean Acheson's clipped, lawyerlike evasiveness, and he did not talk in the language of the Congressional Record (he called Senators "you men" not "the distinguished Senators"). He was inclined to be chatty, but at least part of that was the result of the Senators' tendency to ask him questions which he had already answered. Unaccustomed to the senatorial habit of saying everything three times, he thought they wanted to hear something he hadn't said before.

Wilson, who knows the Defense Department's procedure on contracts, told the committee (correctly) that in the normal course of his job he would have no occasion to pass on G.M. contracts. If such an occasion did arise, he would pass the decision on to someone else, "to the White House if necessary." His testimony was that of an industrialist who is justly proud of his rise from 18-c- an hour as an apprentice engineer to more than $600,000 a year as president of the world's greatest manufacturing corporation, and equally proud of the American system that enabled him to make that rise. He was stepping down to a $22,500-a-year job to do what he could for "the security and welfare of our country." He had been dealing with "conflicts of interests" all his life, and he knew that a man who feathered his own nest at the expense of the outfit he worked for was not fit for a high business job or a high Government job.

When committee members began to press him to sell his stock (39,470 shares, less than 1/20 of 11% of the General Motors' total), his reaction was: "Well, I do not know just why you men should do that . . . because more & more the corporations of our country are being owned by the people, thousands and hundreds of thousands of stockholders, the folks of the country. I do not know just what a man can do. I do not particularly want to go into the apple business, for instance." Cracked Virginia's Senator Harry Byrd, the nation's biggest apple grower: "I advise you not to."

"What Is a Man Going to Do?" After Wilson decided to sell, and went back to tell the committee of his decision, the members were still not satisfied. Democratic Floor Leader Lyndon Johnson wanted to know why Wilson was not going to sell his other stocks, including those in a bank and a small oil company. Asked Wilson: "What is a man going to do ... do I have to invest it in Canada or Mexico or some place else? That isn't right, to put an American in that kind of spot."

Then Georgia's Democratic Senator Richard Russell wanted to know what Wilson proposed to do about the 1,737 shares of G.M. stock he is to receive in the next four years under an extended bonus system. Wilson said he would sell the stock as soon as he got title to it. Russell pursued the point, argued that Wilson should somehow dispose of the future interest because the stock's value would be affected by G.M.'s profits from Government contracts.

Said Wilson: "...I really feel you are giving me quite a pushing around. If I had come here to cheat, by God, I wouldn't be here."

Russell: "I am sorry you feel that way, Mr. Wilson. I am not trying to push you around, but I have my responsibilities too."

Wilson: "I understand that. But I am just human, and my God, I am making a great sacrifice to come down here."

Finally, Wilson agreed to get rid of his interest in the bonus stock through a cash settlement with G.M. Before the committee members were through, he told them that he was beginning to think they "would be doing me a great favor" if they rejected him. The committee quickly decided against doing him the favor, voted unanimously for confirmation.

The Eisenhower Administration had got into and out of its first jam. The lesson: Washington had a lot to teach Detroit about how to handle appearances, just as Detroit assuredly had a lot to teach Washington about the realities under the appearances.

This week the Senate (77-6) confirmed Wilson as Defense Secretary. The six included Wayne Morse, who made a two-hour speech opposing confirmation, left the Senate floor, fainted as he walked into the reading room, recovered in time to vote. (Friends said Morse's swoon probably resulted from treatment to his jaw, broken last year when a horse kicked him.)

* Called Erwin by his friends and "Engine Charlie" by industrialists, who want to distinguish him from Charles Edward Wilson, formerly of General Electric (see BUSINESS), who is known as "Electric Charlie."

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