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President Eisenhower Vetoes His Own Bill

It’s not unusual for a President to veto legislation he disagrees with, but in 1956 Ike vetoed a bill he had championed. Why did he do it? And how did his action affect the interests of a man who would become President of the United States thirty-three years later?

To answer these questions we need to go back to 1953 when Eisenhower took office. At that time the federal government still continued to exercise its Korean War powers to control wages, rents, and even the allocation of raw materials. Ike made abolition of these controls one of his top priorities. In 1954, however, the Supreme Court moved in the opposite direction and ruled that the sale of natural gas at the wellhead was subject to federal price regulation. President Eisenhower was convinced that this was a matter up to the state in which the well had been drilled. He thought that consumers benefited from federal regulation when gas was transmitted by interstate pipelines, but that someone risking the costs of exploration and test drilling was entitled to whatever price the market would pay for newly discovered gas or oil.

Courtesy of the Eisenhower Library

Ike had appointed a Committee on Energy Supplies and Policy to study these problems and the committee also disagreed with the Supreme Court decision, but for a different reason. The committee’s report in January of 1955 concluded that regulating the price of gas at the wellhead would discourage or stop exploration. The committee reasoned that if businessmen could not gain their reward, they would not take the economic risks involved in exploratory drilling. With fewer new wells coming into production, consumers would be forced to pay higher prices.

With that in mind, Congressman Oren Harris and Senator J. William Fulbright, both Democrats from Arkansas, collaborated in early 1955 on a bill to amend the Natural Gas Act. One of the proposed legislation’s major sections would exempt from federal control the production and sale of gas within a single state. President Eisenhower publicly supported the bill. In his press conference on June 29 he endorsed the Harris-Fulbright effort, “because they are trying to devise a bill which, at one and the same time, protects the consumer but which, at the same time, will encourage exploration.”

While Congress was deliberating and the President was developing bipartisan support for the bill, lobbyists for the energy industry descended upon Capitol Hill. There is nothing wrong with a lobbyist presenting a company’s views to individual congressmen and women. Free speech is a constitutional right. But there are rules.

Amidst intense lobbying, one Senator reported that he “suspected” the rules had been broken. He said a sudden $2,500 campaign contribution from a stranger with gas company connections seemed to be an effort to bribe him for a vote on the gas bill. Senator Prescott Bush, a Republican from Connecticut, was trying to negotiate a “workable compromise” in the bill that would give gas consumers reasonable protection against unjustified price increases. Some energy company executives bitterly opposed this effort. Eisenhower heard from a personal friend that one company president had announced that he had supported Senator Bush previously, but never would again. The man went on to say that he had helped to see that the Senator’s son lost a large volume of business because of the father’s actions. The son he talked about was George Herbert Walker Bush who, at the time, was a founder and director of Zapata Petroleum Corporation. George H.W. Bush would become President in 1989 and is father to another President.

As the bill progressed slowly through the fall and winter of 1955 President Eisenhower became increasingly alarmed about the flagrant lobbying campaign. After the House of Representatives passed the bill, media attention focused on the Senate. Press reports routinely cited rumors about which Senator was “in the pocket” of one side or the other.

By the end of the year both houses of Congress had passed the bill and it was sent to the White House for Ike’s signature. Eisenhower discussed the choice he faced with his cabinet and staff, but there was substantial disagreement about what to do. All agreed that the bill would help get rid of government intervention in wellhead market prices, but the questions concerning the rumored lobbying scandals were of deep concern to the President. In a diary entry on February 11, 1956, President Eisenhower wrote, “It is clear that there is a great stench around the passing of the bill .…”

Six days later he vetoed his own bill. In his public statement he said he regretted
vetoing a bill that was in basic accord with his objectives. But, he said, “private persons” representing some energy companies, “… have been seeking to further their own interests by highly questionable activities. These include efforts that I deem to be so arrogant and so much in defiance of acceptable standards of propriety as to risk creating doubt among the American people concerning the integrity of governmental processes.”

He vetoed the bill not because of its merits, but because of the tainted process. He believed deeply in playing by the rules and in giving the people of America a government they could trust.