Return of the Robber Barons
One month after his landslide victory, President-elect Eisenhower nominated Charles E. Wilson, president of General Motors, as secretary of defense. Wilson joined a number of other prominent businessmen nominated to Eisenhower's cabinet.1 Shortly thereafter, Wilson informed the Senate Armed Services Committee that he owned 39,470 shares of General Motors stock.2
Since the late 1940s, the Senate Armed Services Committee had required nominees to high-level Defense Department positions to sell all their stock worth more than $10,000 in defense-related companies. However, federal law did not require federal officials to sell any financial holdings to comply with conflict-of-interest rules. Despite the rule, Wilson informed the committee that he did not plan to sell the stock, but that he would disqualify himself from any decision involving General Motors. Wilson's offer did not sit well with some members of the committee. However, if Wilson sold the stock, he would have to pay substantial taxes on the gain that had occurred in the value of the stock since the time of purchase.
During confirmation hearings, a senator asked Wilson what he would do if he had to make a decision adversely affecting the interests of General Motors. Wilson "achieved a kind of immortality by his public statement that 'what's good for our country is good for General Motors, and vice versa.'"3 Wilson's statement caused a national uproar. Critics used the statement to support their contention that big business felt it could get anything it wanted from Eisenhower's Republican administration. The