Harry S. Truman Presidential Library & Museum


 

Joseph D. Coppock

Oral History Interview with
Joseph D. Coppock

Economist, U.S. Department of Agriculture, 1941; special assistant to the vice chairman, War Production Board, 1942; price executive, Chemical and Drugs Bureau, Office of Price Administration, 1943; economic adviser, International Trade Policy, Department of State, 1945-53; member, U.S. delegations to the Economic and Social Council of the United Nations, New York, Geneva, Santiago, 1946-52; Civilian Faculty, National War College, 1951-53.

State College, Pennsylvania
July 29, 1974
by Richard D. McKinzie

See also Joseph D. Coppock Papers finding aid

[Notices and Restrictions | Interview Transcript | List of Subjects Discussed]


NOTICE
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened August, 1980
Harry S. Truman Library
Independence, Missouri

[Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed]



Oral History Interview with
Joseph D. Coppock

State College, Pennsylvania
July 29, 1974
by Richard D. McKinzie

 

[1]

MCKINZIE: Professor, you have an academic background and I think people are always interested in what brings individuals into Government service, and I wonder if we might begin by asking you to describe what brought you into the Government at about the time of the Second World War?

COPPOCK: Well, I had been in academic work from 1934, when I first started teaching, until 1941. It so happened in the spring of 1941 that I was in the process of searching for a new academic job when I had a chance to join the Government at considerably more pay, and in a job of

 

[2]

interest, in the Department of Agriculture. So I took it.

I had wanted to have some Government experience; many of my economist associates had worked in the New Deal agencies and I felt they got a lot out of doing so. Two times I'd turned jobs down in the thirties. One was with the WPA research staff and the other was in the Department of Commerce.

In the spring of 1941 I was interviewed by various agencies in Washington. Of particular interest was a job at the Treasury Department, Division of Monetary Affairs, which involved planning for the International Monetary Fund and the International Bank, created in 1945. I interviewed [Edward] Bernstein and [Frank A.] Southard, who were major figures under Harry White, who was the head of the Division of Monetary Research during that time. But the Agriculture job was available immediately, so I took it. So

 

[3]

that's how I got into Government.

But after Pearl Harbor, the day after Pearl Harbor really, a friend I had known at the Department of Agriculture who had gone to the Office of Production Management (later the War Production Board), telephoned me in Philadelphia and asked, "How about coming to the War Production Board to work as a special assistant to a man named William L. Batt, Vice Chairman of OPM?"

So, I went down to Washington to talk about it. I accepted the job in a day or so after discussing it with my wife. I stayed at the War Production Board for nearly a year. During that time I worked mainly on the problems of getting supplies to the countries which had been given lend-lease aid. It was one thing to get the financial assistance, another thing to get the priorities established, and the orders placed so that the goods would get delivered to England or Russia.

 

[4]

Batt was given the assignment of pushing for the Russian aid, because there were all kinds of efforts to block that aid, even though the Russians were doing most of the fighting against Germany at that time (1942).

MCKINZIE: Internal Government opposition?

COPPOCK: Yes, internal, within the Government, in the War Department, Navy Department at that time, and in the OPM, which had been renamed the War Production Board in early 1942.

MCKINZIE: On what grounds was this opposition based?

COPPOCK: Well, many industrial and military people didn't like the Soviet Union and they felt that we needed the supplies, especially in the Pacific theater. Also, they felt it was hard to get the stuff to the Russians. And it was very difficult, very time consuming, to move things around the North Cape (Norway) or through Iran. Also many

 

[5]

of the things that the Russians wanted did not have, or didn't seem to a lot of people to have, very high priority for near-term military purposes. Some cases of this sort turned up later.

But [Averell] Harriman had negotiated the protocol, as they called it, with the Russians, in July 1941, shortly after the June 22 invasion of Russia by the Germans, with President Roosevelt's complete approval Batt had been Harriman's deputy in that negotiation with the Russians, and Batt was put in charge, when he came back, of pushing that project along.

So the first Russian protocol was under his general supervision. I think very little was happening on it in the latter part of 1941, but in 1942, after we got into the war, there was quite a push to get ahead with it and the Russians kept pushing very hard to give them the supplies they had requested in July 1941.

But that's a long story, adequately described elsewhere.

 

[6]

MCKINZIE: Yes, I was just going to say that events there may have had some bearing on what happened, how things ultimately turned out. I know that the Soviets were never very sympathetic to the desire of the State Department, or in this case the War Production Board, to have a lot of the information that was requested, to justify their requests; that they regarded it either as irrelevant or as some kind of espionage.

COPPOCK: That's right, they were very secretive. A specific example of that was the placing of a lot of orders for specific items, which somebody, a technical man, I've forgotten his name, in the War Production Board, recognized as a rubber tire factory when you put all the requisitions together. They dribbled them in and sent them different places, but they all got funneled into the WPB. "Well, what on earth are they going to do with a rubber tire factory? It takes a long time to assemble this; it would

 

[7]

be years." This was the WPB reaction. But when we called them in to discuss this, my recollection is that they sort of hung their heads and said, "Yes," that's what they wanted.

Well, it so happened that there was a rubber tire factory available. WPB called in people from the rubber industry as special advisers on this, and I worked directly with the chief adviser they had from one of the major rubber companies. The Ford Motor Company had a sort of reserve capacity plant, not in use, that could be dismantled and shipped. And so that was eventually done after a tremendous amount of negotiation and work.

So they got their whole tire factory and it eventually was put up some place in Russia, but I think it was near the end of the war by the time that it really got functioning. I've forgotten, if I ever knew, the exact outcome of it. It illustrates your point. I think the members of the Soviet Purchasing Commission

 

[8]

in Washington often didn't know what the rationale was; they had requests and they were expected to get what they could of these things.

MCKINZIE: But from your point of view it was appropriate to request this information from all recipients of lend-lease aid.

COPPOCK: Oh, sure, that's what the procedure was for, so that the different priorities could be judged. This was done through a committee called the Requirements Committee, chaired by W. L. Batt at first, which eventually emerged as quite an efficient organization after the reorganization of the War Production Board under [Ferdinand] Eberstadt after [Donald M.] Nelson had left in late 1942. But that's a long story.

Now, I don't know to what extent the Truman Committee got into all of this. There were a good many squabbles between the supply part of the War Department and the War Production Board.

 

[9]

The supply people in the War Department felt that the War Production Board should just expedite what they wanted without reference to other considerations (like the Russians) and there was a tendency for them to ask for more and more, but to neglect the civilian supply aspects of the problems.

One result of the Eberstadt reorganization of the WPB was that the foreign supply unit was moved out from under Batt. Our small staff was scattered. They offered me a job in the central secretariat of the War Production Board. At the same time, somebody offered me a job as associate director of the Chemicals and Drugs Division of the OPA. There were a lot of jobs available for technically able people in that situation. So I took the OPA job, which seemed more interesting.

And shortly thereafter, my OPA chief, Patrick Murphy Malin, who was from Springfield, Missouri,

 

[10]

where his father was a banker, went to the State Department to work with Governor [Herbert H.] Lehman to help plan UNRRA, the relief organization. And so in early 1943 I became head of the OPA Chemicals and Drugs Branch and remained so until the fall of 1943, when there was organizational turmoil in the OPA. Congress was extremely critical of the OPA, as a result of business pressure to relax price controls. They asked for a complete reorganization. Chester Bowles was made head of the OPA, and a very able man from one of the distilleries, James Brownlee, became Deputy Administrator. All non-business employees above the branch level were fired. About a half dozen of the most able people had to leave. Only Donald Wallace, a truly devoted person, stayed on, but only as an adviser to Brownlee.

MCKINZIE: And you?

COPPOCK: Well, I wasn't at that level; I was at the

 

[11]

next echelon down. They did not fire the academicians who were in charge of branches. They just made things less comfortable for us.

So I remained in OPA for quite some months. About that time (late 1943) my draft number came up, even though I was nearly 35. Obviously, they were getting toward the bottom of the barrel. Somebody suggested, "Why don't you move into a military organization?" The OPA situation was becoming rather difficult and I had got defeated on an effort to get the prices of vitamins rolled back. There was a tremendous profit margin on them and there had been a great expansion of production. It was within the scope of the price control law to reduce prices. I was becoming less and less effective in the organization. Also some of the other very good people, e.g., Gardner Ackley, who was later chairman of the Council of Economic Advisers, was a member of my staff. Kermit Gordon, who is now (1974) president of the

 

[12]

Brookings Institution, was also a section chief of staff. Jim Nelson, who was a Rhodes scholar and had taught at Amherst College for some years, was also a section chief. A lot of these people went off to the military. Frankly the main job of OPA had shifted from devising price controls to enforcement. A very different kind of personnel was called for.

So in late 1943, I went to the OSS (Office of Strategic Services), first on a civilian basis. In early 1944 the OSS arranged for me to be given a naval commission (lieutenant, junior grade).

MCKINZIE: Was this job in the Research Branch of OSS?

COPPOCK: No, it was on the Planning Staff, the planning unit of OSS. In the spring of 1944 I was shifted from the Planning Staff to what they called the Operations Office. I was the head of the European Operations Office -- as the backstopper in Washington for European OSS operations. I wore a Navy uniform and went through naval

 

[13]

officer training school, but I was never a real Navy character. I was like a lot of other people during the war -- a civilian in uniform.

And then I got sick in the winter of 1944-45 and was sent to the Naval Hospital at Bethesda. It was pretty evident by then that there was a great surplus of naval officers and other people of my sort so I began to think about what I should do when I would get out of the hospital. I could go back to the OSS on a civilian basis or on military basis, but I learned that I was going to be discharged with a minor, minimal disability. This was in April 1945. Then events took an interesting twist for me.

In the fall of’44, after Cordell Hull had resigned as Secretary of State [Edward R., Jr.] Stettinius was brought in. One of the few sensible things that Stettinius did as Secretary was to hire William L. (“Will”) Clayton of Texas as his

 

[14]

Assistant Secretary for Economic Affairs. Clayton had been brought to Washington by Jesse Jones to work in the RFC. He had also worked problems of disposal of war surpluses.

Will Clayton inquired around who would be the best academic economist to be his deputy. Well, he wouldn't have had to inquire very long to learn it would be Ed [Edward S.] Mason of Harvard, a simply tremendous guy who had been the deputy to William Langer, the head of the Research Division of OSS pretty much all during the war. Mason had been an All-American football player (Kansas), a Rhodes Scholar, etc. So Ed Mason was brought in as Will Clayton's dept and with instructions to beef up the whole economic end of the State Department.

With Ed Mason's broad acquaintance and prestige, he was able to recruit a lot of people, a lot of good people to strengthen the rather minimal economic unit in the State

 

[15]

Department. The conviction was widespread that the problems of the postwar period in the international realm would be very largely economic so it was desirable to have a large, strong, staff in that field.

MCKINZIE: You attribute the personnel selection largely then to Edward Mason...

COPPOCK: That's right.

MCKINZIE: ...rather than to Will Clayton himself?

COPPOCK: Oh, yes, he didn't know very many people of the sort who could do this kind of thing, because high level bureaucratic work is much more like academic work than most any other. Lawyers are extremely valuable and useful in it, but most businessmen, except for investment bankers, are not used to it. Investment bankers are used to sizing up a total situation, but most businessmen are used to a more narrow managerial task. They

 

[16]

are often very bright, very alert, and know how to organize things, but they are not used to sizing up broader issues. I had discovered this empirically both at the War Production Board and the OPA. There were many very bright people from business, but they were not used to thinking in large terms.

MCKINZIE: Well, Will Clayton is now especially well-known for having an outlook favoring international economic integration through more trade. Did he see the broader economic picture, despite his business background?

COPPOCK: Yes, he certainly did.

MCKINZIE: Did Ed Mason, as far as you know, make a special effort to bring in people of like spirit?

COPPOCK: Well, in this particular branch of economics (international) for nearly two hundred years,

 

[17]

ever since Adam Smith wrote his famous book in 1776, the orthodox view has been that free trade is a good thing in the absence of special considerations to the contrary. The presumption is always in favor of opportunities to trade, simply on the ground that if a person wants to buy something, he knows better than somebody else whether he should or shouldn't; if a person wants to sell something, he knows better than somebody else what he should do.

So any artificial interferences with his freedom are presumptively bad. There are exceptions, and a good bit of intricate economic theory in the last hundred years or so has dealt with such exceptions. If you happen to have a strong monopoly position, then you can apply some tariffs and extract a little benefit from it, if the other country doesn't retaliate. And there's the usual defense argument, but if you really want 16-inch guns, there's no use

 

[18]

putting a tariff on 16-inch guns. You build 16-inch guns.

So the tariff is not an issue among economists, basically. They know the advantages of trade. That’s one of the first things you learn in the study of economics. There are exceptions that are worth considering in particular situations, but you have to know how to weave your way around in that kind of thing.

So, if I may correct you a little bit on that, there’s no particular school of economists on the trade questions -- any trained economist would think the same on these matters. Now they might differ on the matter of strategy or whether it was more important to do this or that or the other at this particular time, but the broad push would be the same.

The differences between liberal and conservative economists, or you might call them New Dealers and non-New Dealers, would make

 

[19]

little or no difference in the field of international economics.

MCKINZIE: Will Clayton was fairly optimistic in the summer of 1945, I think, about what was going to happen in the future and it seems to be that one of the important things you had to do in that office was to think about the future, especially in 1945.

COPPOCK: Yes, I might mention various things. I don’t know how much of this you want me to go into.

MCKINZIE: I would appreciate some details.

COPPOCK: The economic work of the State Department for about, oh, twelve, fifteen years before 1945, had been in the hands of a very small group of people. A man named Herbert Feis had been the Economic Adviser for over a decade. Incidentally, I held his nominal slot. My job happened to be the same job description that he

 

[20]

had had earlier, but he was a much more important person relatively, because there weren't very many economic people around. Then when the trade agreements program started in 1934, under the so-called Reciprocal Trade Agreements Act June 1934, Secretary Hull established a Commercial Policy Division, and that became the key economic unit in the State Department. Many very able people were involved in this work. Some were then, as well as later, very prominent economists. Alvin Hansen from Minnesota (later Harvard) was in that work for a time. Henry Grady, of the University of California and later an Assistant Secretary of State, was involved in that work. Secretary Hull viewed this program as an extremely important aspect of his foreign policy.

The Commercial Policy Division was still existence in 1944-45 when Clayton and Mason came in, although some of the people had gone off to war agencies. There was also a small war

 

[21]

problems unit at that stage.

Clayton and Mason reorganized the economic work of the Department into three broad offices, as they called them then, under the Assistant Secretary of Economic Affairs. One was the Office for International Trade Policy, another was the Office for International Monetary and Financial Policy, and the other was the Office for International Transportation and Communication Policy. The names might not be exactly right.

Bernard Haley, who had left OPA in the 1943 imbroglio and had gone to State, was put in charge of trade. Clair Wilcox, also pushed out of the OPA in 1943, came on July 1st, 1945 to replace Haley, who went back to Stanford University. My position was "Adviser, Office of International Trade Policy." A man named Emilio Collado, called "Peter" Collado, whose name you no doubt have heard, was chosen to head the finance office.

 

[22]

Collado had formerly been a deputy to White in the Treasury. He was an extremely able, aggressive person with an Horatio Alger kind of career. By 1947 he was the U.S. representative on the World Bank (IBRD) board and by about 1950 he was treasurer of the Standard Oil Company of New Jersey. Charles Taft, the brother of Senator Robert Taft, from Cincinnati, was the head of the transportation and communications office. He had had various high level positions during the war. Each of these office heads had excellent deputies: Leroy Stinebower in trade, Norman Ness in finance, and Walter Radius in transport. Willard L. Thorp replaced Mason as deputy to Clayton on July 1, 1945.

Then there were units under these offices, called divisions, that dealt with various types of problems.

MCKINZIE: Yes.

 

[23]

COPPOCK: For example, Emile Despres was in charge of economic aspects of our German policy. There was a lend-lease section, which was to negotiate the settlements for lend-lease transfers. Other key units were the Division of Monetary Policy and the Division of Investment Policy. The names were changed from time to time, but these two were the units that were State links to the International Monetary Fund, the World Bank, and the Export-Import Bank.

The person who succeeded Collado was Norman Ness, an extremely able person whom Will Clayton later took down to Anderson, Clayton and Company in Texas, where he served many years as treasurer.

Did you get an interview with him before he died, by the way?

MCKINZIE: No, I didn't, unfortunately.

COPPOCK: Too bad you didn't, a brilliant person.

Well, each of these offices had a group of

 

[24]

people. We were very fortunate to have as our deputy Leroy D. Stinebower. Do you have that name?

MCKINZIE: I've talked to him.

COPPOCK: Well, he has more knowledge and a greater memory, unless he's slipped in recent years, than almost anybody in this whole realm. He has tremendous, simply tremendous, knowledge, particularly on international organizations in the economic field. He was at all of the major conferences and was involved in the planning and detailed negotiations. He was the deputy, and I was the adviser, under Haley and then Wilcox. Also we had two younger administrative offices, and a special assistant, J. Robert Schaetzel. You've met him?

MCKINZIE: I know the name; I have him on the list.

COPPOCK: You should interview him because he has

 

[25]

just retired as U.S. Ambassador to the Common Market and is living in Washington now. He's a Pomona graduate, a student of Norman Ness's. He and Dave Bell were Pomona's pride and joy. That was about the class of '39. They went to the Harvard School of Public Administration and came to work at the Bureau of the Budget, which was a very favorite place for the really bright, governmentally ambitious people to go to at that stage. A man named Harold Smith, I think, was the moving spirit there.

In early 1945 (I think) Schaetzel, as a staff member of the Bureau of the Budget, was reviewing the State Department budget. Bernard Haley was so impressed by him that he just "up and hired him." This happened frequently to people from the Bureau of the Budget, because these were some of the brightest and the most alert Government career people of the era.

MCKINZIE: Could I ask a couple of questions?

 

[26]

COPPOCK: Sure.

MCKINZIE: One, did this fragmentation, in a sense, allow the right hand to know what the left hand was doing? And secondly, was it a good idea to have segregated the economic work from the political work of the Department?

COPPOCK: That's a good question. Among the economic offices coordination was provided by almost daily staff meetings with Will Clayton, his deputy, and the office directors. (Incidentally, Clayton first offered the deputy job to Wilcox, but he said he didn't plan to stay a long time and he would rather concentrate just on the trade aspect, rather than take on the general administrative responsibility. So, Thorp whom you've interviewed, I assume, was chosen.) Clayton attended the staff meeting of the Secretary of State. The office directors held frequent meetings with their division chiefs.

 

[27]

MCKINZIE: Yes.

COPPOCK: Thorp had a lot of experience with Dun and Bradstreet, the Department of Commerce, and a major utility company. He had not been in a war agency, so he came in rather fresh to the situation. And so he served really from July 1945 until July 1953, clear through the whole Truman administration as the deputy to Clayton and then later as the Assistant Secretary when they jumped Clayton up to the Under Secretary level. I suppose he probably has more comprehensive knowledge of everything that went on in this economic realm than anyone else, although many things go on that an Assistant Secretary doesn't learn about. The higher up you go the less you know, in many ways. How to organize the work of the State Department is something that has been debated and wrangled over and fought over immensely.

 

[28]

For one thing, many of these economic questions get more technical or more specialized than the usual Foreign Service officer or departmental officer can handle. He feels at sea in international monetary affairs, and is somewhat lost in investment matters, and some trade matters. The focus of many of the Foreign Service officers, very fine officers administratively, most of them, is on international politics, which is understandable and I think appropriate. Many foreign policy issues do not involve much economic content.

Also, many of the economic policies require a long sustained program to put them through. The ordinary Foreign Service desk officer, at whatever level it may be, operates, as they say, "off the cables." He's a responder to whatever bad news comes in, and he's in a hectic rush to put out that particular fire.

So these other matters, e.g., the prolonged

 

[29]

GATT negotiations, were not of great interest to them. Without strong, separate economic units, they would be neglected by the political offices.

Another aspect of this potential or actual neglect by State is that other agencies around town (Washington) would say, "Well, we'll just take over that function." So Treasury had, in essence, full charge of the international financial policy, since Secretary Hull concentrated so much on tariff reduction. Treasury's Division of Monetary Research, under White and the others, with Morgenthau's full blessing, practically wrote the documents setting up the Bretton Woods agencies and the U.S. law setting up the National Advisory Council on International Monetary and Financial Affairs. And Treasury has administered it ever since.

So here you have this major aspect of international affairs being run by the Treasury. That was a power play, you see, a bureaucratic power

 

[30]

play, which came about because of failure of State to assert itself in this realm.

Well, Clayton saw what ought to be done, and Mason saw what ought to be done, and so they moved in, and that's when they brought Collado over from Treasury, you see, to operate in that realm. But it was too late. Foreign policy is essentially set by Treasury in the whole international financial field. The State Department twiddles its thumbs and says, "Yes, me too."

On the agricultural side the Department of Agriculture moved eagerly into any vacuum left by State. They'd say, "We'll take charge of the international aspect of any agricultural problems."

MCKINZIE: Was there strong pressure by these other agencies?

COPPOCK: Yes. Very able people, very knowledgeable people, staffed the international or foreign units in other departments. They had their

 

[31]

whole system of attaches, so they were practically independent of the Foreign Service.

MCKINZIE: How about Commerce?

COPPOCK: The Department of Commerce was (and still is, I'm sure), constantly making a bid to take over the whole trade and tariff negotiations program, so if you didn't have a strong economic unit in State, these other agencies would just take over the functions, so you get a splintering of the foreign policy. Foreign economic policy was a big element in the whole Truman period. So Interior would take over all the international oil problems; Labor would do anything having to do with that. So right down the line, whatever it was, they were all ready to move in as soon as State weakened on any of these matters. And so other departments -- and State's political offices, manned by Foreign Service officers -- were delighted when the

 

[32]

Hoover Commission came out for the near-abolition of the economic offices in 1949. It was at that point the economic offices were stripped, I'd say, of two-thirds of their personnel. Some were distributed among the geographic (political) offices and some of the work was grabbed by other agencies. State was cut down to size in the economic realm in 1949. Will Clayton's departure facilitated the reorganization. Thorp did not have the political clout of Clayton. The Wriston report of about 1953 furthered the whittling down of State's control of the economic aspect of foreign policy.

These were factors that caused a lot of us to draft away from Government. The Foreign Service people within State were generally pleased to see this, because they were confronted in meetings with people who were highly trained academically, who could write better than they could, who could argue better than they could,

 

[33]

and who were generally more knowledgeable. We had lawyers as well as bankers and economists. Most of the Foreign Service officers had got their training doing consular or similar kinds of work. They didn't like the competition. I'm probably speaking a little bit too frankly. There were not many Kennans or Bohlens among them.

MCKINZIE: Yes, of course.

Was there any kind of what you might call a cultural division between the Foreign Service officer and the academically trained economist?

COPPOCK: You're talking about social relations?

MCKINZIE: Yes, within the Department.

COPPOCK: Oh, I'd say that everybody was polite and civil and all that; they behaved nicely toward each other. In terms of the outside social life I would guess that -- and it would certainly

 

[34]

be true in our case -- it would be only incidentally that we'd be dealing socially with ordinary Foreign Service officers. They had their own social life. And the rest of us had our professional and sort of the "old college tie" kind of informal association that we had developed. I'd say that those of us in the upper Civil Service level concerned with foreign affairs tended to have more rapport. We didn't fraternize very much with the Foreign Service officers, but the relations weren't antagonistic at all. It's just the nature of the thing. Although when we would go on missions abroad on various things, we would get acquainted with the Foreign Service officers and generally get to like them. But the ordinary course of the work doesn't throw you with them because our dealings, you see, would be with people in other agencies, on economic matters, or with representatives of foreign governments.

 

[35]

If you invited a political officer to a meeting, he’d get bored with all the technical talk. He didn’t find it very interesting and would ask to receive a copy of the report or something like that.

I should add that the Foreign Service encouraged many of us “Departmental Officers” to join the Foreign Service. Some did; many did not because they did not want to be subject to assignments without reference to their special talents. I fell in the second category.

MCKINZIE: Surely.

COPPOCK: There was another aspect of this organizational problem. It’s the question of the multilateral versus the bilateral in your dealings with other governments. A lot of the things that we were dealing with on trade matters, monetary matters, etc., are essentially multilateral in their character. You wanted the same general rules to

 

[36]

apply to different countries. If you didn’t you were in one heck of a mess, and although you might have negotiated bilateral treaties, you might want to have a most-favored-nation clause in there so you give and receive equal treatment, but you have to take into account the repercussions of it on other countries. So, we (in the economic offices) thought, you see, in broad, essentially global terms, groups of countries, or something like that, not in terms of bilateral relations involved. The people in the United Nations section of the Department shared our view.

Most of the political officers, you see, thought in terms of bilateral dealings, of maintaining good relations with particular countries, either in Washington or in the other countries, rather than through groups of nations. This issue involved more than just a bureaucratic power play.

 

[37]

MCKINZIE: Was it perceived to be a problem at the time?

COPPOCK: Oh, definitely. It was recognized fully. Everybody knew what the argument was about, but it's hard to resolve. You can make a pretty good case both ways.

MCKINZIE: Yes.

COPPOCK: Most of us economists felt that economic problems are economic problems wherever they happen to be. You wanted to know the facts of a particular country and situation, of course, but detailed knowledge of a particular country wouldn't make very much difference as to exchange rate policy or the investment situation or trade regulations and so on. You could learn pretty quickly enough about the particular situation in a country to know whether the policy pattern would be appropriate or not. So there was a tendency of people in these economic and other "functional"

 

[38]

offices, as contrasted with the geographic, to disregard the detailed differences among the different countries. This is a perpetual kind of problem.

MCKINZIE: In the summer of 1945, I gather at just when you were beginning to get ahold there, Will Clayton made some very optimistic statements about the future. He talked about reconstruction of Europe; he said that within two or perhaps three years there'd be a reduction in the trade barriers. Did he mean that the early operations of the IMF and IBRD, and maybe even some bilateral loans, were a necessary prelude to new trade agreements? That by 1947 or 1948 there would be a kind of upward economic spiral that would facilitate trade liberalization?

COPPOCK: Let me comment on your statement from a procedural rather than a substantive point of view. Will Clayton spoke on such matters after

 

[39]

discussions with his staff and others. We on his staff had the background, the training that enabled us to move into these matters easily. Will Clayton, from his very broad business experience and his tremendous native ability, could understand these situations promptly.

So I should point out that many of these statements that Will Clayton made were written by the rest of us, not that he wasn’t able to. He could make an absolutely fantastically persuasive oral presentation; he was a tremendously effective person. A colleague told me once that he could best get his ideas listened to in the proper places by writing speeches for the higher-ups. They’d presumably think about them if they read them. He hoped they’d read the speeches before they delivered them.

Most of the speeches by the high officials in this period that had any economic content were written by people in the economic offices.

 

[40]

Kermit Gordon, whom I mentioned earlier, wrote several major speeches. He's the head of the Brookings Institution now, and you ought to interview him. He didn't stay around State very long, but he's extremely knowledgeable in all this field. Clair Wilcox wrote some speeches for the Secretary of State. He wrote the Baylor University speech for President Truman. Did you know that?

MCKINZIE: No, I didn't. That was a very important speech as far as economic policy is concerned.

COPPOCK: Yes, Clair Wilcox wrote it and Truman and whoever edited his speeches left it almost verbatim. Wilcox was an extremely able writer. He had been the editor of the University of Pennsylvania "Purple Parrot," the undergraduate humor magazine. He always had a very pithy style. You didn't interview him, did you?

MCKINZIE: No.

 

[41]

COPPOCK: He died a couple of years ago. He wrote editorials for the St. Louis Post-Dispatch during the thirties. He wrote the Wickersham Report that led to the repeal of the 18th Amendment, incidentally. I think he met with President Truman to explain the crucial ideas before the Baylor speech. Truman was not, and as far as we could tell, particularly knowledgeable in this whole area, but he was interested, as far as we could see, he always wanted to do the right thing. I don't think it was through a slavish following of his advisers, but with his native horse sense, he could see that there are the things you ought to do.

MCKINZIE: I see. You've made a very good case for the fact that much policy is made in the course of speechwriting.

COPPOCK: Now those speeches were often circulated as drafts. I don't recall, but I probably went over Wilcox's drafts, as did Stinebower, Ness

 

[42]

and maybe a half dozen others. We were urged to comment on form as well as content.

So there would be a sort of consensus among knowledgeable people, you see, and then the speech would go on its way.

On your bigger question, on the financial institutions, the Monetary Fund and the IBRD had been planned carefully in the Treasury. The Treasury's White plan and the British Keynes plan had been widely circulated in and out of Government during the war. The essence of the White plan was approved by the Bretton Woods Conference of '44, so all that Clayton had to do, and all that Morgenthau had to do on that was essentially present the case before Congress. There had been a good public relations buildup long before. And then the money was appropriated. But of course, these agencies did not begin to function at that stage.

MCKINZIE: In March '47 was the first IBRD loan.

 

[43]

COPPOCK: Yes. And the Fund put out very little money at the start, because they realized that they would lose all their resources if they tried to meet the emergency needs.

MCKINZIE: Did that appear to you to be an economic tragedy that although they were needed immediately after the war, they weren't functioning at the time they were needed most?

COPPOCK: There were mixed expectations on this on the part of the representatives of various countries. The IBRD was to be called the International Development Bank, but then various governments pressed for the inclusion of "reconstruction," with the expectation that they would receive help with postwar reconstruction. But the requests, maybe the needs, were so much larger than the resources of the Bank that it became pretty evident that they wouldn't be able to finance reconstruction. Also, the

 

[44]

management of the Bank -- and the IMF too -- didn't want to dissipate their resources upon meeting immediate postwar needs. They wanted a longer-term flow of economic help.

A couple of other little things. The renewal of the Trade Agreements Act of June 1945 was a key thing and they used the date as of January 1st, '45, as the base for a 50 percent reduction, which meant that you could get way below the base of the 1930 act, which had been used as the base for the prewar negotiations. The negotiating power had pretty much been used up in the bilateral negotiations in the thirties. So that 1945 act was a good, big, grant of authority to negotiate trade barrier reductions.

Now, I don't know how much detail you want to get into but there was something of a debate among the people who were knowledgeable in this area as to whether you should go ahead and negotiate those tariff reductions and put them

 

[45]

into effect very quickly in '46 or '47, or whether you should get the reconstruction of the various industries before you lowered trade barriers. Now, those of us of the traditional economic school would say, "Of course, you put the trade barrier reduction into effect so that you rebuild your industries in the light of the trading opportunities which would exist then." Now that should be self-evidently the case, if you see what I mean?

MCKINZIE: Yes, I understand what you're saying.

COPPOCK: But a lot of the political people disagreed. They'd say, "Oh, the house is burning down. Don't worry about things like tariffs. We must get some timbers for mine pit props or whatnot, or some coal or some steel, something that does keep the house from burning down. To hell with this tariff stuff." So, the more politically-minded types would be much more inclined that

 

[46]

way and would not want to push hard for tariff reductions. Paul Nitze was an intelligent advocate of the political approach. Paul came in as deputy in our office when Stinebower was moved to a job attached to the Assistant Secretary's office in charge of all U.N. economic affairs -- a great assignment, fine assignment, for Stinebower. Paul Nitze came in as the deputy to Wilcox, and then when Wilcox left in early 1948, Nitze was jumped, became deputy to Thorp, the economic Assistant Secretary. Winfield Brown was made head of the trade office.

I hope you've talked to John Leddy, by the way.

MCKINZIE: Yes, I have.

COPPOCK: John Leddy was one of the greatest, one of the really greatest, most knowledgeable people in State for many years.

MCKINZIE: I gather he had a lot to do with GATT.

 

[47]

COPPOCK: Oh, he, more than anybody else, conceived, to the best of my knowledge, the idea of the simultaneous bilateral negotiations that provide the essence of the multilateral negotiations carried on ever since 1947.

MCKINZIE: That's so complicated, you know, I just can't imagine.

COPPOCK: Oh, it's very complicated, but he would modestly say that he wasn't the sole creator of that idea. In Government it's pretty hard to get precise attribution, because people discuss ideas rather freely. Nobody worries about personal credit very much, but I'd say that John Leddy was just tremendous in all this work.

MCKINZIE: Could I go back to your comments about the 1945 trade agreements thing?

COPPOCK: Yes.

 

[48]

MCKINZIE: There’s a European, whose name I’ve now forgotten, a second level official in Belgium, maybe France, who said that to conclude the kind of low tariff agreements that many people wanted at that time would be only beneficial to the United States, since the United States had just come out of the war with the only industrial establishment intact, that those agreements would leave the destroyed economies of Europe in weakened positions, and not in a competitive productive position.

COPPOCK: Well, that would be incorrect, as far as Europe was concerned, because their comparative advantage lay in the industrial and manufacturing realm. There would be stiff competition under these circumstances, but the mechanism for dealing with balance-of-payments problems is really through the international monetary mechanism, by changing exchange rates, getting your balance of payments adjustment through that mechanism

 

[49]

rather than putting on tariffs. Now tariffs can be similar in their short term effects, but in terms of the operation of international barriers, it's much better to think of your tariffs as long-range things and make your short term adjustments through monetary policy.

I might say here that all of us working in this international economic realm had a very clear conception of what we were about. And this derived from our living through the thirties, our study of the experience of the twenties and the thirties, as well as from our professional training. One thing that was embodied in the Lend-Lease Act of March '41, that there not be a big carryover, big holdover of international debts because of the bad experience after World War I, was very important. So the negotiations out of the lend-lease obligations at the end of the war was an aspect of that.

Another major point was that you needed to

 

[50]

stimulate international investment in order to promote economic development over the world generally. Private foreign investment had dried up -- it was almost negative -- during the thirties. So what you had to do was to get some kind of guarantee against losses by private investors, as well as have some direct governmental loans. The IBRD represented that conception. Of course, the expansion of the lending power by the U.S. Export-Import Bank, which Will Clayton also put through in 1945, was a big help, since the U.S. could then move on a bilateral basis. You'd try to stimulate private investment with Ex-Im or IBRD guarantees, but private investors would have been insane generally to invest in the chaotic situation that prevailed over most of the world.

MCKINZIE: You were aware of this?

COPPOCK: Oh, yes, everyone in our work was.

MCKINZIE: They were talking about it all the time?

 

[51]

COPPOCK: Very few companies were investing internationally, so they had to be begged and prodded, with all of these various gimmicks, such as the thing that some of us have benefited from. I refer to the tax benefit of being overseas. This is an offshoot of that effort to stimulate Americans to be willing to take overseas jobs. Of course, there were personal advantages involved too, but that was the rationale in all of these tax benefits, to stimulate foreign investment. You needed, on the foreign investment issue, these institutional arrangements to promote it. On the monetary side, you needed an international organization to prevent, if possible, competitive exchange rate depreciation which would nullify trade opportunities and benefits. The IMF was also needed to dismantle the detailed exchange controls which had been used from the period of the thirties. They cut down trade drastically. So you had to

 

[52]

have an international monetary system in which rates would be fairly stable, adjusted when need be to deal with balance-of-payments disequilibria, but adjusted by consultation through the Fund mechanism and a minimum of exchange controls, only over large scale capital movements, but not over ordinary transactions, current transactions as they call them.

So you got in the IBRD the investment side, long term loans; you got in the IMF the monetary side. (Some people wanted to put that financial stuff together as one institution -- you've probably run into that idea -- but the consensus of practically everybody involved was that it's better to have them separated, the long-term lending and short-term lending.)

And then the third aspect was to deal with trade barriers, to have some rules of international trade, which is what the international trade organization was about.

 

[53]

MCKINZIE: Right.

COPPOCK: Now, we've talked for quite a while and I've hardly even gotten around to trade matters. There is at least one more major financial issue.

It was the expectation, in mid-1945, that the lend-lease program would taper off, not be cut off suddenly. Now here is one of the critical comments about Truman; he let [Leo T.] Crowley, one Sunday afternoon, shortly after the Japanese surrender, according to the story, come over and say, "Let's cut these bastards off," or something like that. "Let them have just what is in the pipeline." This action gave rise to the demand for the British loan and the refusal of the British to discuss the ITO without a loan. There was also a request of 6 million dollars from the Russians, which the White House said they lost. That was just one of the funniest, silliest things. Have you dug into that, by the way?

 

[54]

MCKINZIE: Yes. Emilio Collado said it was on his desk while it was lost.

COPPOCK: Yes. Yes, well, that was a preposterous thing to cut off lend-lease so suddenly. Clayton was not even consulted. Truman would not reverse himself. It was a bad mistake to cut off lend-lease just like that.

MCKINZIE: You saw lend-lease as something which would contribute to reconstruction?

COPPOCK: Definitely. Definitely. And to consolidate the victory, if you want to put it in war terms. There was no use winning the war and then throwing Western Europe to the Communists by failing to provide the aid in that situation.

MCKINZIE: Not getting too far afield, but if I could ask a question about that. When you looked at Western Europe in your group, was there any feeling that Western Europe couldn't be reconstructed

 

[55]

without Germany as the industrial heart?

COPPOCK: There was considerable debate on this within our group in State as well as public debate generally on that. Everybody was acquainted, of course, with the weird Morgenthau ideas of a "pastoral" Germany. The people in the unit that specialized in that problem had gone along pretty much with the Morgenthau plan, that is, the curtailments of German industry, the stripping down, the transfer of stuff to Russia, and all of that, but there were serious reservations. Mason, incidentally, went to Moscow on the reparations meeting. Also, Isador Lubin. By the way have you talked to Lubin?

MCKINZIE: Yes.

COPPOCK: He and I deal together in another context on the U.N. Economic and Social Council and the U.N. Economic and Employment Commission.

 

[56]

I don't know just when the change of attitude shifted the other way, but I would guess that it came in the course of '46 or '47. That was the '46-'47 winter, which was bad; it became clear to some that you simply couldn't have a stripped down, poverty stricken Germany. Here I would say that Kennan and Nitze, and the political officers in the Department, were right. Emergency aid and then the Marshall plan were the answers.

Well, let's see, where were we?

MCKINZIE: Well, we had gotten off on the problems of Germany. I didn't want to interrupt you there.

COPPOCK: I don't know the exact timing, but certainly whatever support there had been for the pastoral Germany disappeared pretty largely during 1946, because it became very evident that the overriding question was which side Germany was going to be

 

[57]

on in the postwar situation. The threat of the Russians was evident enough, very evident indeed to those of us who had been through the OSS experience and were in the State Department. And all this time we hoped for, but did not expect, a cooperative Russia.

MCKINZIE: Well, that's one question that you hadn't dealt with when you were talking about this formation of the international financial institutions. Of course, the Soviets didn't ratify the Bretton Woods agreements.

COPPOCK: They went to the Bretton Woods meeting, as you know.

MCKINZIE: Yes, I know they went, but...

COPPOCK: And there were the dispatches of Kennan from Moscow all this time, saying, "They aren't going to join, so just forget it."

MCKINZIE: Was this a source of consternation for you?

 

[58]

COPPOCK: No, because the Russian trading system and their international financial arrangements would not be congenial. They used a system of bilateral state trading agreements. Now we did try to devise some provisions in the draft ITO Charter and the GATT which would accommodate them. It would be nice if they'd been in, particularly the Eastern European countries, so they could be more involved in the international trading system, but the Russians refused.

There was a big Russian thrust in 1944 to get all specialized agencies of the U.N. put under the U.N. and subject to the Security Council veto, which would block all actions, but we and others just said no. And so negotiations went ahead on that basis. The concept of the specialized agencies, which I think is probably due to [Leo] Pasvolsky as much as to anybody, was an excellent one. It's been dealt with in various studies. It was an

 

[59]

excellent one and gave the freedom of action in these various specialized realms of international cooperation.

The concept that we would need a Europe, including Germany, as much of Germany as possible with us in order to restrain the Russian advance emerged very early, I would say. This would have to be studied for documentation, but I would guess that you could find in State Department writings as well as in a lot of other places, that just England wouldn't be enough, that you'd have to have the cooperation of Central Europe.

So this leads you to the reconstruction, to economic reconstruction of Germany. To get back on the track of Germany, and what would you do; well, you would obviously want to work Germany into international economic life, not try to isolate it in anyway at all, so this gave all the more thrust to our international trade organization effort.

 

[60]

MCKINZIE: Yes.

COPPOCK: To keep your barriers down so that you get Germany integrated with the rest of us.

MCKINZIE: In the purest sense of what Will Clayton was proposing, wouldn't it also necessitate the destruction of the whole British system...

COPPOCK: Of the preferential arrangements with the British Empire?

MCKINZIE: Yes.

COPPOCK: Now that was a strand of thought that ran through this whole period. Congressional views happened to run rather strongly that the empire preference system of 1932, some earlier preferential arrangements and the sterling bloc that emerged after the 1931 monetary crisis, had tended to protect the whole British Empire or Commonwealth and to exclude us. So all of us economists would take the standard view that

 

[61]

any tariff negotiations should go to reduce any preferences first. Hence the GATT and the parallel ITO Charter provisions were all written so that you'd move toward a common tariff level. The British were reluctant, but they accepted this. There are so many different strands here. When the Labor government came in in July 1945 in England they were committed to some sort of planning. Stafford Cripps, and others, had a very rigid, dogmatic, socialist, international economic planning idea. So this traditional idea of a functioning international economy depending on the use of money rather than on bilateral deals, bulk purchase contracts, and so on, was not what they were thinking in terms of.

They even considered a planned multilateralism. I don't know whether you've run into this kind of thing, planned flows of international trade so that they would all

 

[62]

match up somehow. Although this is a theoretical possibility, most of us thought it was utter poppycock. The British Government of that time tended to view this effort to set up a rather free international economic system where people could trade, or invest, or move around freely, as an effort by the United States to set up a system under which the large enterprises, the capitalists, the monopolists, the multinationals in the present phrase, could then dominate world economic life. Of course, the Communists would echo this view too.

So we were battling uphill with the British, who had earlier agreed to go along with the condition, you know, under Article VII of the lend-lease agreement of 1941, to support the establishment of an effective international trade organization. Then they started weaseling on it. Then we had to "purchase" the commitment again in connection with the British loan agreement

 

[63]

of 1945-46.

On that point of the preferential arrangements, it was mainly the British by themselves against us on this. Many members of the British Commonwealth didn't feel it was such great advantage, because their foreign exchange earnings got blocked in terms of sterling. The British gave way on preferences and the convertibility of sterling without much difficulty. However, convertibility was dropped in 1947 after a heavy run from the pound.

Well, there's another strand of thought here.

MCKINZIE: Yes.

COPPOCK: The British loan request, which derived from the failure of Truman to continue the lend-lease program, really messed up the negotiations for the International Trade Organization. The recommendation to hold the conference for the

 

[64]

creation of the International Trade Organization was the first act of the U.N. General Assembly and it met in London in January 1946. This was to be the prime, first act to facilitate the restoration of international economic life. The British would not agree to hold the conference until the British loan was approved by Congress.

The British loan was negotiated by December 1945, but it was July of '46 before it finally went through Congress. The negotiations on the tariffs, which were supposed to start in February of 1946, were postponed for a full year. So the use of the power to carry out the policy that I mentioned to you, namely, to get your tariffs down before your economic reconstruction started, was blocked. There was a crucial meeting in the White House in December 1945 -- maybe you could dig it up -- in which the President, in consultation with [James F.] Byrnes, who had replaced Stettinius as Secretary of

 

[65]

State (thank God), and Will Clayton, among others, had agreed with the British to delay action on tariffs and the ITO. My information on the meeting was third hand. Clayton came back and called in his office directors and said, "Well, the President's decided that we're going to use all of our propaganda, political push, to get the British loan through Congress, that it is crucial to the recovery of England and of Europe generally, and that we will delay any tariff negotiations and the push toward the international trade organization."

Well, Wilcox came back and told us (Charlie Bunn, the lawyer from Wisconsin) and me of the decision. When Charlie and I rode home on a streetcar that night, Charlie said, "Well, it's my prediction that that's the end of the ITO." This was December 1945. By then the idealism, the steam, the push, you see, that had put the U.N., the Fund and the World Bank

 

[66]

through in '45, were giving way to postwar disillusionment. Other problems, particularly domestic adjustment problems, appeared more important, so you couldn't get the political support for a program that was going to reduce trade barriers, with inevitable competition, you see, for everybody, despite increased export opportunities.

So the whole effort to get the ITO established was put on the back burner, as of that time. This is the basic reason, I would say, as would plenty others too, why there's no international trade organization. We do have the rump organization, the GATT, to be sure. I attribute the absence of an ITO largely to Truman's following Crowley's advice to cut off lend-lease. You see?

MCKINZIE: Yes.

COPPOCK: This was a bad error, as we knew at the

 

[67]

time, but we didn't quite see the full implications until later. The British loan was only reluctantly approved and the British Labor government, you know, was not really interested in expanded international trade. The British Empire was being dismantled at that time.

MCKINZIE: Would it be correct to say that these developments put an end to Clayton's ideas about how the world economy ought to be organized?

COPPOCK: Well, it didn't seem to be quite so clear then, of course. I would say that there was still hope, in 1947, that we could get the ITO established. The basic ideas had been set out in "Proposals for the Expansion of International Trade and Employment," in December 1945, a preliminary document that the U.S. had issued after the British loan had been negotiated. But when they started negotiating the details of the ITO charter, everybody came in with amendments to

 

[68]

whittle away the key points. The Charter went through three preliminary sessions. By the time it had been through the Havana Conference in December ’47 and to March ’48, it was a terribly amended, long, complicated, messy, document. Still various groups and governments complained because it didn’t do this and didn’t do that. There was no enthusiasm for it any place. If the original schedule had been adhered to, with the preliminary meeting and tariff negotiations in February, 1946, with a conference to be in the summer of 1946, the ITO might have been created. Continuation of lend-lease aid would have made this schedule possible.

MCKINZIE: Was the sticking point the phrase “full employment”?

COPPOCK: I would say no. That idea was added on primarily by the Australians in connection with the negotiations. No, that idea was reduced to a

 

[69]

statement of aspirations, that countries would endeavor to follow international economic policies which would reduce unemployment or increase employment. I happened to be deeply involved with that particular issue later on in connection with the depression, the small depression, in 1949. And one of the first reports on this was called "National and International Measures for Full Employment," put out by a group of U.N. specialists, often called the Kaldor Report, of 1949. And that was the prime item on the agenda for the U.N.-ECOSOC meetings of 1950, first, in February and then in the summer. That's a long, specialized story in itself, but I hesitate to get into that.

It happens to be the field in which I've done most of my writing and research in recent years. The essence of that, from the international point of view, is that you want nations to follow policies that will not spread their

 

[70]

employment to other countries. If you put on a big import barrier, then the export industries in other countries will close down, and you get a snowball effect unless there are some counter-active influences. You do want desirable changes to take place, but usually you want changes to be small and gradual so that adjustments can take place. A big collapse just spreads depression very rapidly through the repercussions and psychological effects that derive from those repercussions.

So far as the ITO was concerned, the employment problem, which is important as a problem, was treated as a preamble kind of thing, to the effect that every country would endeavor to follow policies which would not spread unemployment elsewhere. So, I would say, no, that that was not a factor in the ITO negotiations. It is always difficult to negotiate or to get political support for tariff reducing policies, because

 

[71]

there's always somebody who is going to be hurt, or thinks he's going to be hurt, ten times as much as he is actually going to be. And people don't see the benefits as much as they see the possible harm. This is historically true every place. So you have to seize a situation in which there are broader considerations. The main concept is that if you build a good international economic order, you provide a strong basis for peace. This connection was stated eloquently by John Stuart Mill in 1848. Of course, there's an element of economic determinism here, but few people would consider extensive trade and investment a sufficient basis for peace.

I -- and others -- had many occasions to make speeches over the country at various times on these things. You always had to wrap the trade idea up in a peace package if you're going to get support for trade reduction policies, to get general support. People will run the risk of

 

[72]

temporary unemployment if it is for a higher good. They don't think that expanding trade matters very much and in fact it doesn't matter a whole lot to the United States, compared with most other countries. To most U.S. citizens, probably, why should we bother with trade expansion, if the benefits aren't so great and if there might be considerable harm to some people. So you have to make the case essentially on international peace, security grounds.

The same arguments were used for the British loan, which was made to seem, in 1947, to be more important than the expansion of trade over a long-term basis. When Truman et al. decided to concentrate on that in December 1945, the ITO was lost. Then you had the bad crops in Europe in '46, and a severe winter in 1946-47. In June 1947 the Secretary of State delivered his famous speech, which gave rise to Marshall plan aid to Europe. Long-term trade policy seemed of less and less importance.

 

[73]

Then you had the Russian threats in Italy and in France at that time. Well, there's another way to dramatize this.

Clayton was at the meeting in Geneva in 1947...

MCKINZIE: Starting in March?

COPPOCK: Yes. In June Marshall said in essence, "Will, go to Paris and take charge of our negotiations there on aid to the other countries." You can view that as a sort of symbol of a dramatic shift. Put the long-run stuff aside; leave that over in Geneva along the lake. Get into this business in Paris that really counts. Arrange to throw the goods into Western Europe and support them. Give them all the possible political support you can to stage off the Communists' revolutionary threat. Mount a major short-term economic offensive.

So where did ITO and all this go under these

 

[74]

circumstances? Well, as Paul Nitze would say, here the house is burning down, you're talking about setting up a new fire department or putting in a new pipeline or something like that. We entered a new crisis situation by the spring of 1947. Now various people perceived it. Have you talked with Kennan, by the way?

MCKINZIE: Kennan says he's drained on this subject.

COPPOCK: I can believe it. He wrote a big memorandum over at the National War College on this while he was a deputy over there in its first year, 1946-47. Acheson was alert to it in his Cleveland, Mississippi speech about this time. It was in the political air that you had to do something with this crisis situation. I wrote a big, long memorandum in May -- reacting to Kennan's and some other memorandum. Maybe I can dig it out and send it to you in due time...

MCKINZIE: Please do.

 

[75]

COPPOCK: ...criticizing this approach. I said they should use the financial resources they have to buy our goods; we should lower our tariff rates, so they could sell what they could sell. In other words, we should move faster toward a more expansive, international economic system. Of course, they'd borrow through the Bank, the Fund, give them an Ex-Im Bank loan, but don't make such a crisis thing out of this. Use this moment of crisis to get your basic system. So I argued they should devalue their currency then (in 1947, not wait until 1949, as they did), drop convertibility, exchange controls, and all types of trade restrictions which were messing up the international economic scene. They should correct those things. Instead, the British got a waiver on the convertibility issue in 1947.

MCKINZIE: Right.

 

[76]

COPPOCK: So, I argued strongly, but I think wrongly, in retrospect, along this line. It didn't take me long to change my mind. Within a year or so I realized that the people who sized up the situation in Europe as being an emergency one were right. Now, it's too bad you couldn't move on both fronts -- aid and trade liberalization -- at the same time. The Marshall Plan bowed to trade expansion sentiments, but mainly just to set up a Common Market.

MCKINZIE: You say in retrospect, wrongly?

COPPOCK: My judgment was wrong.

MCKINZIE: But on political rather than economic grounds.

COPPOCK: Western Europeans needed the economic help, but they might have got it by less dramatic means. However, in order to get the Marshall Plan through Congress, you needed a strong political

 

[77]

push. It wasn't until after the Czech crisis of February 1948 and after Congress had put in special agricultural provisions.

MCKINZIE: Would you consider GATT to be half a loaf and thus better than none?

COPPOCK: That's a fair characterization. As soon as this British loan priority was established, it became very evident to those of us involved in this work, that something had to be done, in case the ITO did not get established, so as to preserve the benefits of the tariff negotiations of the summer of '47 that had been carried out. Winfield Brown was the chief negotiator under Clayton. He managed the thing very well, with a lot of help from John Leddy, Norman Burns, Carl Corse and others. There was a whole crew in Geneva negotiating these tariff reductions.

MCKINZIE: Did you have anything to do with that?

 

[78]

COPPOCK: I was not involved. They had these guys who had worked on the stuff for years, so they did all of the negotiations. I was fully aware of them, of course.

MCKINZIE: Most of the people in your office were fully behind this idea?

COPPOCK: Oh, yes, no question. Of course, you go ahead, and just take it for granted that this was the thing to do.

John Leddy probably was the person who did the major work in writing the General Agreement on Tariffs and Trade. He simply took that section of the ITO charter and converted it into the GATT. So the GATT is Part I of the agreements reached in Geneva in the summer of '47. That work was carried on. The GATT became a fact then, as an executive agreement, not a treaty, as far as the U.S. was concerned. But there is an awful lot of miscellaneous history in connection with this.

 

[79]

MCKINZIE: John Leddy, when I talked to him, seemed the proudest of the fact that GATT is in the sense an international organization without a permanent bureaucracy and with no headquarters any place in the world. He seemed so proud of that. Is that in accord with your view?

COPPOCK: I’m surprised that John feels proud of it. He was probably amused. They do have a building right there, right east of the U.N. office in Geneva. I visited there last summer and talked with one of the very able women, Margaret Potter, who was in the State Department Trade Agreements Section for some years. In the 1950’s she moved over there to GATT. And Eric Wyndham-White was in the impermanent civil service for years. I don’t see that that’s something to be proud about. There’s something to be said against international bureaucracies, but that’s another subject. I would say GATT was probably a little worse by not being able to give people permanent jobs, but

 

[80]

John Leddy would be a better judge than I on this. Governments were rarely willing to assign people to the GATT who were able people or people who were willing to take the risks of not being employed back home a year or so hence. In general, GATT has had a good staff, an ample staff to do the work. It's been a good organization.

As you know, there have been various efforts to expand the GATT to make it approximate the ITO Charter more closely on the cartel problem, the commodity agreement problem and so on. I don't know what the exact status is now. I haven't followed it in recent years, but the GATT contains the essence of the ITO charter. It was more than a half loaf, perhaps three-quarters of a loaf. It was good planning, good contingency planning, to carry it through in 1947, and as you know, there were arrangements worked out for it to be absorbed into the ITO.

 

[81]

Provisions were written so it would disappear under the ITO if the latter came into existence.

Have you ever talked to Bill Diebolt?

MCKINZIE: No.

COPPOCK: Bill Diebolt's at the Council on Foreign Relations in New York. He wrote a little pamphlet called the "End of the ITO," a Council of Foreign Relations pamphlet, published in 1950 or 1951. Diebolt has been on the staff there for about twenty-five years. He was in the Commercial Policy Division of State for a year or two after World War II. He has been principal economist of the Council, so you can get a cordial and informative story from him. He's written a lot of things in this general area. He wrote up the Schuman plan, which was the predecessor of the European Economic Community.

What other facets of the field do you want to pursue?

 

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MCKINZIE: I want to ask you about the relationship between your office and the people who were planning the Marshall plan. You've alluded to it in a peripheral way in all of this.

COPPOCK: Yes. Well, as you know, Marshall brought Kennan from the War College in 1947 to head up the first Planning Staff in State. They went right to work on this, the Marshall plan. Incidentally they offered Stinebower the principal economic job. He was one of the old-timers; he'd been there since 1932; but Stinebower turned the job down on the ground that after you've used up your ideas, you'd be sitting up there with nothing to do. They never did get very good people for the economic work, nobody with any particular distinction, in the Planning Office. Of course, in the sixties they got [Walt] Rostow, very able.

MCKINZIE: Well, the question prompted by at least

 

[83]

rhetoric of the time, was that one of the main purposes of the Marshall plan was to promote European integration. Averell Harriman in particular promoted European unity of one type or another.

COPPOCK: Yes. I didn't answer your earlier question very well, whether there was a difference of view in the State Department on this. Obviously "EUR," the European political people in State, were for it. They saw it, as did Bohlen, Kennan, Matthews and so on, as a major move to block Soviet expansion. Clayton was for it, Thorp sort of rode along; he wasn't a person of very strong views. Paul Nitze, Thorp's deputy, was very strongly for it and I would say in the Economic Office he gave it the most attention of anybody. Organizationally, this aid program would have fallen into the foreign investment section of the Finance Division of the Office of International Finance.

 

[84]

Well, I think they were all for it. Some of us in the Trade Office felt that the trade expansion efforts would be diverted, that it would just be the British loan pattern once more. These long-range things, we felt, shouldn't be neglected while you put the fire out.

So, that was the kind of difference of view that was involved, but it didn't last long, and it wasn't serious. The only concern was that once you put the fire out you'd forget about all of these efforts to reduce trade barriers and to get your international cartels and commodity agreements under some sort of regulation and so on. That was the concern.

There were three or four interdepartmental committees set up; there was a Krug Committee, a Harriman Committee, I forget what else.

MCKINZIE: That's right.

COPPOCK: I represented State at one meeting that

 

[85]

was trying to assess the impact on the U.S. economy of the prospective aid. The consensus, from the numbers presented, was that the prospective amounts were not such as to be an excessive drain. Some people argued that you needed this additional demand to help the war industries to ease their conversion. Of course, these larger exports would keep some businesses busy. There is a standard fallacy (the "mercantilist fallacy") that there's something better about exports financed by government than there is about government money spent for domestic purposes. It so happened that the desired foreign policy fitted in with the good old fallacy, that an export excess is a good thing regardless of other considerations.

MCKINZIE: Could I break in here?

COPPOCK: Yes.

MCKINZIE: The War Production Board was over by that

 

[86]

time, but there was something called the CPA, the Civilian Production Administration, I think, which lingered on. They had some reports in perhaps late '46 or early in '47 in which they predicted a major economic recession in the third quarter of 1947. I think it blew around in the Government a good while.

COPPOCK: Oh, a lot of people thought there would be a '46 or '47 decline. There was no doubt about it that this foreign demand, financed by this grant, was a stimulating factor, according to standard economic analysis. Quantitatively, it wasn't so stimulating. After all, we're only talking about four or five billion dollars a year in the U.S. economy, out of a GNP of around 200 billion dollars. I'm not absolutely sure of the numbers, but I should mention that you could hit particular sectors of the economy very hard. So, the concern was that the foreign

 

[87]

demand not hit certain sectors so hard that it would deprive the U.S. economy of essential goods for our own economic expansion. The Department of Commerce still retained the export control. By the way, have you talked with Tom Blaisdell?

MCKINZIE: Yes.

COPPOCK: Now, he's very conversant with all this aspect of things. Tom was very eager to maintain that export control authority in part as a general bureaucratic power drive by Commerce.

MCKINZIE: Well, there's an historian named Gabriel Kolko who argues very strongly that there was a general awareness of these predictions that there was going to be an economic downturn in the third quarter of 1947, and that there were no domestic savings left, no wartime savings left, so that the only possibility for salvaging the situation was to, in a sense, create a new market, and that the Marshall plan was rammed through

 

[88]

in order to, in a sense, generate additional demand.

COPPOCK: I would say that's both bad analysis and bad history. The Marshall plan had these stimulating effects but so would have any other increase in demand. A program to expand the housing industry, which Truman urged, would have worked just as well as expansion of exports, as far as the stimulating effects were concerned. Moreover, we would have had the houses.

Well, to the extent that the demand was there, it helped maintain the GNP, but we had a depression in '49 even though the Marshall plan was going full force, probably the peak year for it. The total was only 16 billion dollars in the course of four years, so it wasn't a vast kind of thing compared with consumer outlays or domestic investments. But it was a good thing in terms of our international

 

[89]

political relations. I agree with all of the judgments that the Marshall plan was a dramatic, political-economic strategy of the first order.

MCKINZIE: Could I ask you to talk about events in 1949, '50 and '51 around the time of the Korean war and Truman's sudden concern with underdeveloped areas in the world? This must have affected your work.

COPPOCK: Yes. I could say that during my last three or four years with the State Department I spent a third to half of my time on U.N. economic matters. I was, under Stinebower, the principal person on the economic side, his general assistant in handling these matters. A man named Walter Kotschnig handled this work in the U.N. Affairs part of State. Have you talked to Walter Kotschnig, by the way?

MCKINZIE: No, he's in Washington and I hope to see him.

 

[90]

COPPOCK: Walter would know that history very well. I went to most of the U.N.-ECOSOC meetings from '46-'52. I was also involved in other U.N. work.

Well, the fall of 1948 was a very busy time. President Truman, after the Marshall plan had been passed and was in operation, urged State to think about the next phase of international economic relations. So various of us went to work on how are you going to get these people "off the tit," that is, off our aid programs.

MCKINZIE: Right.

COPPOCK: Many of us saw that if the U.S. is going to provide aid, you only perpetuate a balance-of-payments deficit for other countries which the U.S. would be expected to fill. We would be the suckers. How were you going to get the adjustment process back to a more normal situation? What would be a sensible transition policy?

 

[91]

Well, my general job then was sort of a "think" kind of job, advisory, very interesting. So, I put my mind to the general question in the fall of '48 and wrote a memorandum. The technique, incidentally, in the Government, as you probably know, when you want to try out an idea, is to address the memorandum to your nominal or actual superior, but you just happen to run off about 20 or 30 other copies and send them out to other people in the Department.

So I asked myself, "What was it that the United States could do in the economic realm that would improve economic conditions in other countries? Clearly, the major broad problem was economic development, rather than an instability problem. This was much more important to a lot of countries. As you know, economic instability was viewed by most people, even until the end of the war, as the major problem we'd have to worry about. This view stemmed from the Great

 

[92]

Depression, of course. It became very apparent, however, with the many new countries and the rising economic aspirations everywhere, that economic development was the issue. I heard numerous people talk passionately at the U.N. and at other international meetings. They argued that they could weather the instability problems if they could get some growth and development. Well, what could the U.S. do in this context?

Well, obviously to expand trading opportunities was one of the best ways to promote economic progress. This is the classical, historical way of doing it, straight out of Adam Smith. Another would be international investments. Of course, for trade and investment to expand, you obviously have to have a good monetary system. But what else could you do? That is, what could the United States do?

The answer was to diffuse knowledge about economic processes and technologies, how to

 

[93]

organize economic life. A lot of us began to see that in a lot of places they didn't know how to "run a railroad" or whatever they were trying to do. They lacked knowledge in the business field and in the general economic field. There was a great need for technical knowledge of many sorts. Of course many lacked political stability.

So, I wrote this memorandum in October of 1949. In November I circulated it within the Department. Well, one of the people I sent it to was Francis Russell, who was at that time head of the Office of Public Affairs, head of speechwriting and that kind of thing. He called me the next day and said, "Joe, I got your memorandum. I'm very excited about it. I want you to come over here to my office right away."

So, I went over. He said, "I'd like you to meet one of my assistants, Ben Hardy." And he said, "You guys have delivered to me, on the

 

[94]

same day, two memos saying essentially the same thing." Ben had been an agricultural attaché down in Brazil before the war and had worked for the Nelson Rockefeller outfit during the war. He had written up the idea that the way to deal with the less developed countries of the world was to use some of the techniques that had been used in the Latin-American program. Francis Russell said, "We just had a request from the White House that the President wants an inaugural speech in the foreign affairs field, and wants something put together in this realm." He said, "Why don't you guys get together?" So Ben Hardy and I went out and had lunch and talked, exchanged ideas, and read each others' stuff. Then Ben started putting drafts together of an inaugural address for Truman. He incorporated this idea of technical assistance, diffusion of knowledge, how to organize, etc. There's a lot more miscellaneous history connected with that speech.

 

[95]

MCKINZIE: Let me ask you, do you happen to have a copy of that memorandum somewhere?

COPPOCK: My own?

MCKINZIE: Yes.

COPPOCK: Yes, I do. I'll find it some place.

MCKINZIE: Is this before or after [Robert] Lovett said that this was a mistaken approach?

COPPOCK: Oh, this was the genesis stage. Then Ben Hardy put it together and Francis Russell approved it, but Francis also followed the sensible system of sending Clark Clifford a copy of the draft speech at the same time he sent one to Lovett. See, never trust the lines of authority in a bureaucracy; they are no damned good. You have to have them, of course, but don't take them seriously or the Government would come to an end, you couldn't function. And you know the story, I suppose, that Lovett killed this

 

[96]

part and sent it over and Clark Clifford presumably called back and said, "Where the hell's the guts of this thing?" He said in effect, "Put it back in there or we'll put it back in." And so it was put back in. I don't know to what extent Truman knew about this, at what stage he got into it.

Have you learned that?

MCKINZIE: One point. When the idea was presented to him, he had the draft speech circulated around the White House. Clark Clifford liked. it and George Elsey liked it. They took it in to the President and he just said, "We'll use it." The State Department said that he couldn't use it or shouldn't use it, because it hadn't been properly cleared or such. I've forgotten the term they used.

COPPOCK: There are some other side things on this. I consider myself a minor co-stimulator of that

 

[97]

idea, but I think it was in the air. Many people were asking, "How do you get out from under this goddamn aid stuff?" Well, obviously you turn some other direction. Here was something you could do, and it was in keeping with the American missionary tradition. When Paul Nitze first heard about it, he said, "You'll get all the goddamn do-gooders in the country in on this stuff." In other words, it was a bunch of nonsense to him.

MCKINZIE: Now that's a very big question. Was it a camouflage; was it a sop in a sense to countries which were economically backward?

COPPOCK: Well, there's a good bit of miscellaneous history which I'm not fully conversant with, but I have various tidbits. Have you talked to Sam Hayes, by the way?

MCKINZIE: No, I'm seeing him in December.

 

[98]

COPPOCK: Well, the day after the inaugural (I think I'm right on my timing), Francis Russell called a meeting of people in his office to just kick this idea around, but he said, "I have one particular thing I want to see what you think of." He said, "Why don't we call this program a Point 4 program?" It was Francis Russell who did that. I'm just skimming Margaret Truman's book. She had that wrong. It should have been told to the press. It was Francis Russell who had the idea. He said, "I just thought about it when I woke up this morning. Why don't they call it this?" You recall that the technical assistance idea was the fourth main point in President Truman's inaugural address.

Then Thorp was designated by Marshall, who was still Secretary of State, to follow through on this, to organize the follow-through. So we had a meeting in Thorp's office within a day or two to kick around the problem of how we would organize to deal

 

[99]

with this, to implement this idea. Did Thorp discuss this with you or have you got it from any other sources?

MCKINZIE: I’ve tried, but Thorp doesn’t have a clear memory of what happened immediately thereafter.

COPPOCK: Yes. Well, Sam Hayes probably will. Sam Hayes was a general flunky around his office. Thorp said, “I’ve asked Sam to follow this thing in detail, to make it his full-time job just to pursue this.” He said, “Now, let’s kick around the idea involved.” And one of the things they wanted to know was, “Was our conception of this a financial program as well as a technical assistance program?” The wording in the address is just a little ambiguous. Ben Hardy’s and my intention was that it would not be a capital aid program, but that it would be a technical assistance program to supplement the Bank and all other financial institutions, and not be a competitor

 

[100]

with them. But there were some other people who said, "Well, look at the language of the speech."

MCKINZIE: Economists?

COPPOCK: Well, a mixture. You get so you sort of forget who's what, professionally, in the Government. Some of the people said, "Well, gosh, the wording is general enough to cover financing too, so it should be a financing program as well as a technical assistance program."

Thorp said, "Well, apparently the intention is that it was going to be a technical assistance and not a financial program, because there were a lot of financial programs going anyway. I think that he probably checked with the White House on it. So, the next step was to set up an interdepartmental committee on that and also to plan to deal with it internationally.

Now, the U.N. was one way to deal with this matter internationally. Thorp by this time had

 

[101]

been designated as the U.S. representative on the U.N. Economic and Social Council (ECOSOC). I forget exactly when he started serving in that post as well as being the Assistant Secretary. So, in the February 1949 session of ECOSOC we had a proposal ready. And incidentally in Walter Kotschnig's office was a lady who was supposed to follow the international organizational aspects of this thing. She was a protegé from Stanford of Bernard Haley's. She was a very able, professional woman.

So we then got ready for the ECOSOC meeting, that is, got a position paper ready. We had to go through the interdepartmental committee for U.N. economic affairs (Agriculture, Treasury, and others). We'd clear any of these things that were on the docket with them.

A special interdepartmental committee was set up in this realm and about this time one of

 

[102]

the persons who became very active was "Tex" Goldschmidt (Arthur E. Goldschmidt), from Interior, a special assistant to Secretary Krug. He got very interested in all of this and was quite a plugger for it. He was always trying to broaden it. He's a Texan with big ideas. His son, by the way, teaches Middle East history right here at Penn State. "Tex" later joined the Technical Assistance Administration of the U.N.

MCKINZIE: UNTAP, it's called.

COPPOCK: Yes, and that's become a quite a sizeable bureaucracy. There was a terrific problem of administrative coordination because the various specialized agencies of the U.N., for example, the FAO and the WHO, were involved in these fields. Thorp saw very quickly that the Point Four program would be, administratively, very expensive -- an awful lot of your expense just to get one guy out in the

 

[103]

field to tell somebody how to fix a tractor. It would take a whole army of bureaucrats just by the nature of the process.

MCKINZIE: Well, could I ask you about this early February 1949 U.N.-ECOSOC meeting? Was there a firm decision to try to do a lot of this through the U.N.?

COPPOCK: No, the U.S. decision was to go both ways, to use the U.N. and the specialized agencies to the fullest extent possible and to use the U.S. bilateral programs as a supplement.

MCKINZIE: Was that based on political considerations?

COPPOCK: No, I'd just say practical sense. See, you had these international organizations, so it was good to use them so that some country wouldn't be dependent upon a particular bilateral

 

[104]

connection. There was a general attitude favoring the use of international channels in dealing with these problems. You would get your experts wherever you could get them to provide this aid. You would then supplement U.N. aid with U.S. aid, but the U.S. was the main reservoir for this kind of knowledge anyway. A lot of the people drawn by international organizations would be U.S. people anyway.

Incidentally, the first mission, I think, was the Haiti mission, a U.N. mission to Haiti on something, probably on health.

MCKINZIE: Was this in 1949?

COPPOCK: I believe my recollection is faulty. I think the Haiti program was under an earlier technical assistance program in the U.N., which started about '47. The 1949 program was called the Expanded Technical Assistance Program. We put through a sort of temporary resolution in the

 

[105]

February '49 ECOSOC meeting. Provision was made later for the coordination of the specialized agencies. The U.N. Charter designated ECOSOC as the coordinator of the specialized agencies.

MCKINZIE: Well, could I ask you if it was in March, April, or maybe later in 1949 before any kind of document emerged from the State Department on what kind of program this was going to be? Was there, after these original meetings, a pretty clear idea about what Point IV should be?

COPPOCK: Well, Sam Hayes’ recollection would be much better than mine, but my recollection is that you would take requests, in essence, from countries for experts in particular fields they wanted. Many less developed countries didn't know what they wanted or needed, so a general economic survey mission was needed. Here they worked with the International Bank, because most programs would require some international funding.

 

[106]

Another person that you ought to talk to is J. Burke Knapp, who became head, after Stinebower, of the finance office in the State Department. He was a Stanford graduate of the class of '33, a Rhodes scholar. He's been executive vice-president of the IBRD. He was very much involved in Point IV at the start.

MCKINZIE: I'll check him out.

COPPOCK: It's been a good many years since I have thought about these things. He was more involved in the financial aspect of things, but he was eager to keep the Point IV "stuff" separate from the finance "stuff." But you needed frequently, for the less developed countries, a survey team. I think it was about this time (1949) also that Isador Lubin replaced Thorp on the U.N.-ECOSOC. Acheson felt that Thorp was not giving as much attention as he should to the regular departmental economic work and too much to U.N. matters, because

 

[107]

they would take you away from Washington if you went to the U.N. General Assembly too, for a long, long time. And so they brought in Isador Lubin to replace Thorp as the U.S. representative on ECOSOC. You say you did talk to Lubin?

MCKINZIE: Yes, I did.

COPPOCK: He had had a long career in Government and lots of experience. He pushed Point IV very effectively with his knowledge of assistance and labor problems. He had worked with Roosevelt in the White House. He also had been on the reparations mission to Moscow. So, he served very ably in this U.N. position. But this Point IV program was hard to get off the ground. You had to find out what people needed, but they didn't often know what they needed. They knew they could use some technical assistance of various sorts, but just what do you do, and how do you do it?

 

[108]

MCKINZIE: Now, on the question of whether they don't know what they need: Does this reflect upon the state of their economic intelligence or upon the simple reporting of the state of their economy? The reason I ask is that I know a lot of people have been highly critical of Latin-American economists in that period. I was wondering what your assessment of the feeling was.

COPPOCK: You wouldn't look to academic economists particularly to know what was needed. You would look to Government economists, or people who had been, whether they were economists or not, involved in the thinking about the economic conditions. Also, the statistical material on lots of countries was very deficient. When you don't have much information on an economy, you don't know what to do. So one of the first things that appeared was the need to set up central statistical bureaus, to establish methods of collecting data.

 

[109]

That need appeared very early in the U.N. discussions of this. The U.N. was quite helpful in sending out organizations to help. You had to have trained people to do this and to collect reliable data. You had to have the people in business enterprises and in governments who were willing to report, but there was a tendency to be secretive. But you could not know what your emphasis should be until you had information. So this was a big, big area of uncertainty.

So Thorp's general approach, which I felt was excellent, was you play it by ear. You find out what people think they need, and you move cautiously, not necessarily slowly, to try to supply those needs, to see if that's really what they need in the way of technical information. Do they need economic planners; do they need statisticians; do they need somebody to show them how to squirt DDT, or whatever it might be in this whole field? Had there been a census, do they know

 

[110]

what kind of diseases are there? All kinds of things that fall outside a narrow economic realm become highly relevant.

MCKINZIE: Well, in that inaugural address of 1949, President Truman tied that idea with which you and Ben Hardy were concerned, to the idea of increased private investments. Efforts to implement it brought forth a number of proposals to guarantee U.S. investments in underdeveloped areas.

COPPOCK: Burke Knapp was very imaginative, very creative in developing ideas to implement the financial aspects of U.S. foreign economic policy at that time.

Well, this should be checked out, but I think you would find that the State Department version of the inaugural address that went over to the White House did not include the financial aspect. Somebody tacked it on there.

 

[111]

Now you could argue that in a way private investment would facilitate the transmission of technology in the lines that your foreign investors are going to invest in. Sure, everybody knows that, and that was good, but that would happen anyway. You don't need a special program to do that. This relation got argued and debated too. And then there was an absolute swarm of offers of people wanting to get into the Point IV program -- church groups, various idealistic groups, etc. Everybody and his dog wanted to get into it. Walter Kotschnig will have things on this. He dealt with the NGO's, the Non-Governmental Organizations concerned with international affairs, and you'll find the pressure on the State Department to move on this thing, and the resistance of Congress and of various other groups. So to get Point IV off the ground was very difficult. I don't know when the first appropriation, a small appropriation, was finally

 

[112]

made, maybe in '50 or '51.

MCKINZIE: Late '50.

COPPOCK: Late '50. It was a pretty much of a token response to the goodwill people, the church people, the do-gooders, the idealists, the internationalists and such. But to those of us who thought up the program, it was a limited, long-run program. You do what you could to diffuse the technology and the economic knowledge, facilitate economic development. We knew it could not be an emergency, a short-run thing, such as the Marshall plan. It would have to be a very, very long run thing and it would match up very well with the long-run trade expansion programs, and the long-term investment programs, private and other.

MCKINZIE: Well, in the context in which you perceived it, it was not particularly an anti-Communist tool in a cold war sense.

 

[113]

COPPOCK: No. It was part of a program for general economic development, with the expectation that better economic conditions would be more conducive to democratic institutions, and to a more peaceful world.

MCKINZIE: Over the long run.

COPPOCK: Oh, very long run. There are a couple other little facets here which I probably ought to mention. There was another series of treaties that had been planned to be negotiated, called "treaties of friendship, commerce and navigation." Do you know about those "FCN" treaties?

MCKINZIE: Well, I know what they are.

COPPOCK: General treaties. They were planned during the war.

MCKINZIE: We're back to the treaties of commerce...

COPPOCK: They have changed the name in some cases, e.g.,

 

[114]

investment treaties. They are general treaties dealing with tourists, navigation, freight conditions, property ownership, all kinds of general problems that come up.

Well, the first one to be negotiated was with the Republic of China, in 1946, before the Communist takeover. It had been negotiated right during war with the Chungking government. A man named Wilson, now a retired professor of law at Duke, negotiated that. Well, it happened to be my job to be the clearance officer in the economic office for these things, so I learned a good bit about such treaties. The Point IV program tended to give these treaties a different emphasis.

These treaties are another aspect of improving the general environment of economic relations. They were part of an effort to incorporate these elements into a general international code of behavior. But this program never got off the ground. Some people wanted to expand the ITO

 

[115]

charter to include such matters.

MCKINZIE: Right.

COPPOCK: The thought was that you would use that organization (the ITO) as a mechanism for negotiation, on a multilateral basis, of international codes of behavior dealing with opportunities for trade, investment, travel and so on. This is an important thing that doesn’t get mentioned very often.

Well, some of these FCN treaties were negotiated after the war, but the effort bogged down. I have lost track of their present status, but this was a moderately important effort during that period.

MCKINZIE: Why did it bog down?

COPPOCK: I can’t give a good reason. I’d say that other issues just seemed to be much more pressing -- the monetary question, the investment question, the

 

[116]

tariff negotiations and of course the political conditions. Also, I think that a lot of the new countries did not want to enter into what were de jure equal rights treaties, but de facto would seem to give all of the benefits to the more developed countries. I suspect that's the underlying problem. That's like the elephant and the mouse, you know, both sleeping in the same bed, with "equal access." This point came out in other negotiations when an effort was made to set up an investment code. The investment bankers, by the way, put pressure on the State Department to include in the ITO charter a whole foreign investment protection program.

Well, all you had in the end was a bunch of exceptions to general equal treatment provisions. State opposed this whole effort, because the end result was clearly foreseen. The Havana Charter for the ITO provides the clear evidence.

Well, there is another strand of thought

 

[117]

you might be interested in. The State Department had used consultants, academic consultants, off and on from time to time, particularly in the economic offices. I'm sure they did so in other offices too, but with less frequency and less formality. One major economic consultant was Jacob Viner of the University of Chicago. Jacob Viner was Stinebower's major graduate school professor. I think that Stinebower got his job at State because Viner recommended him to Herbert Feis and Stinebower became Herbert Feis' assistant in about 1932. When State started postwar planning, as early as 1940-41, Stinebower asked Viner to come down from time to time for consultation. Viner also served as a consultant to Treasury. Viner was a tremendously imaginative and knowledgeable person.

MCKINZIE: To work with Leo Pasvolsky?

COPPOCK: Well, no. They'd just have meetings and

 

[118]

throw out questions and ask him to reply. Well, when I moved into that spot in State, I was asked to take over this function of developing contacts with people in the academic community to serve as consultants, and to organize consultant meetings. I had held these about every six months for the five or six years that I was in the State Department. Of course, I circulated memos not only to the economic offices, but to other offices, asking what questions in the general economic, international economic, realm they thought would be worthy of getting the advice of outside experts on?

We had stenographic reports taken at these meetings, which were rather structured seminars. They would run for a day or two days. On the basis of the transcript, I would edit a summary and circulate it widely. We then would get the full benefit of what the consultants had to say. I usually asked an Under Secretary to open the

 

[119]

meeting. He would usually disappear, but we usually had the office heads and deputies, and some Assistant Secretaries and deputies. The group was usually, oh, maybe 15 to 20 people from State; plus three to five consultants.

In addition to Viner, we often used State Department “alumni,” for example, Ed Mason, Galbraith, Bernard Haley, James Earley, and Frank Fetter. By the way, you might get some good recollections from Frank Whitson Fetter.

MCKINZIE: I talked with him last week.

COPPOCK: Good. We are old friends. Did he cover some of this?

MCKINZIE: Some of this, yes.

COPPOCK: We used various specialists at times, e.g., Stocking, a big oil specialist from Texas. Then

 

[120]

we had a big session on the Point IV issue, immediately after the Point IV thing came up, I suppose probably in March or April of 1949. We had somebody very good from the AT&T. Barnard was his name. We had a wide range of people in order to get their ideas on the whole Point IV concept.

MCKINZIE: Did this meeting have bankers as well?

COPPOCK: We used investment bankers; we used all kinds.

MCKINZIE: Barnett wasn't there was he?

COPPOCK: I don't know whether he was or not. I don't remember his being there.

MCKINZIE: There is a transcript -- the reason I asked -- in the Truman Library of a meeting of academicians and it seems to me Barnett was there.

COPPOCK: Could have been.

 

[121]

MCKINZIE: I just wondered about these things.

COPPOCK: But the public affairs division organized a more general meeting. Maybe that's what you're talking about. Have you talked to Margaret Carter, Margaret Carter Morgan now?

MCKINZIE: No.

COPPOCK: It's Mrs. George Morgan. She was the absolutely brilliant assistant to Francis Russell during this period. She was also back there during the Kennedy administration. George Morgan has been Ambassador to the Ivory Coast, recently retired, and was head of the Foreign Service Institute for awhile, too. I think they're in Washington. She would recall an awful lot. She was the person who was in charge of the public relations aspect of the whole ITO project for about four years and was thoroughly conversant with it.

Well, those consultant meetings were an important way of our keeping in touch with academic

 

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thought and getting excellent advice.

I remember Paul Nitze put a question on the agenda. He wanted to hear a discussion about whether something like the Marshall plan was sensible for the Far East. He raised this probably in a '48 meeting. This was a major subject of discussion.

And [John Moore] Allison, who was an Assistant Secretary, was there. He was a specialist on the Far East. You know Washington is a great reservoir of knowledge if you know how to draw it. So we could assemble in these meetings the best brains around, from other agencies as well as from the outside to kick around these ideas. I always tried to run the meetings in a rather structured fashion. People were assigned to concentrate on certain questions; then everybody could pitch in after the original presentation. I think the meetings served a good purpose. They were not very expensive, just travel expenses, plus 50 dollars

 

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a day, to get to pick the best brains around.

MCKINZIE: To what extent were these people sensitive to the political imperatives at the time?

COPPOCK: Oh, amply so.

MCKINZIE: You talk about the China aid in one context, what the economy could absorb, and what kind of administrative reforms would be necessary to make it have an effect, but then it doesn't really do much good unless you're aware of the political effect of the China lobby and all that kind of thing.

COPPOCK: When you work in the Government for a while, regardless of your background, you become very attuned to the political forces, particularly in the State Department. There are some issues on which Washington obviously gets isolated from the feeling of the country. This is why the Public Affairs Division had to send people out

 

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to give speeches, to sound out public opinion, to keep in touch with people over the country. So lots of us did this kind of speaking; that was the main way you could do it. Many organizations around the country want speakers. They all want the Secretary of State, but most ended up with guys like me.

The question periods were always the most interesting. We were often asked, "To what extent are you guys putting out a line?" We wrote our own speeches, but they'd be cleared by the press officer or such. Explanation was the main thing; there was no particular line.

I happened to be giving a speech in El Paso, Texas in May of 1948, when Bedell Smith, just back from Moscow, had indicated there was going to be a relaxation of the Berlin blockade. So I called back to the State Department to find out anything beyond the press report, because I knew there would be questions on this. Incidentally,

 

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when you go out to speak you can't stay compartmentalized, you have to talk about anything in the field of foreign affairs.

The State Department long since has developed certain standard background information for speakers, which is generally very useful. I feel that this maintaining contact with the public is important for State, since State has no constituency you know, the way the other Departments do.

MCKINZIE: Right.

COPPOCK: So this maintaining contact with the public lets the public see that these State Department people are real people.

MCKINZIE: When you recall this particular speech in El Paso, did you have to modify what you had planned?

COPPOCK: No, there were no real developments, but I

 

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thought there might be. By the way, Burke Knapp was the person who did the technical negotiations for the U.S. to solve that currency crisis of 1948.

MCKINZIE: He's not retired yet is he?

COPPOCK: He's probably still in the World Bank, but he's about my age; he may be just about to retire.

I have a feeling that on this whole international economic front, Truman felt that this area was in pretty good hands, and that he didn't have to worry very much about it as long as Will Clayton was there. Then Thorp carried on in a less hectic time. The years 1949-53 were much less hectic in this economic realm. Many people in State and other agencies were experienced; these people had had intensive experience, perhaps more experience in the forties than people would get in a century in ordinary times in the international economic realm. So Truman didn't

 

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have to be concerned very much about it. Do you have any reaction to that opinion?

MCKINZIE: No, I don't think that he was particularly concerned. I think he trusted people like Acheson, for sure, and Will Clayton.

COPPOCK: Incidentally, Acheson wasn't very much interested in the economic issues. Acheson had been an Assistant Secretary of Economic Affairs at an early stage of the war, and he was conversant with all this and he was on the negotiating team that did the Bretton Woods thing, and he testified in connection with it. He was conversant with it, but he did not give any particular attention to economic matters during his term as Secretary of State. Acheson had plenty on his hands without getting into this field, but many people in the economic offices felt that Acheson tended to neglect the economic work. Also he put through the recommendations

 

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of the Hoover Report which decimated the economic offices,

Then another thing happened bureaucratically. A lot of people who had been there during the war felt that the big crises were pretty much over and that they would go back to their private jobs. You don't get a chance to read a book very often or write anything much other than memoranda. The Government wears you out; it's a tiring kind of activity.

MCKINZIE: Is this your own case?

COPPOCK: I think so. I made my decision gradually, but my behavior was characteristic of a lot of people, that is, to go back to their businesses, law practices or universities.

Yet, I had at first (from 1945 to 1950) planned to stay in the State Department. I was a regular departmental Civil Service officer, with tenure and all that, a nice job, nice

 

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facilities, nice people to work with, all kinds of interesting assignments. I was offered various chances to work overseas. I was at the National War College, on the staff there, for a year and a half, doing all kinds of interesting things. But on a trip down to Chile for a U.N. meeting in Chile in 1951, I tried to think about my future. I had been a little sick and so they had sent me on a ship rather than by air; the State Department was nice that way. And so I tried to think it through. I decided that even though we'd built a house out in Maryland at the edge of Washington, that in due time I would move back to academia. I made the decision before the election of 1952, not after, incidentally.

MCKINZIE: I've always wondered about things like that.

COPPOCK: Yes, I deliberately decided to move at the first good opportunity.

MCKINZIE: You had had valuable experience, invaluable

 

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to you subsequently, hadn't you?

COPPOCK: Oh, yes, it obviously was. Incidentally I went on leave from the State Department the first year I went away. I left in mid-'53. They said, "No use quitting; you won't like it after you get out there, it will all be dull." Although I decided to stay with the academic life, I've had a great deal of experience. I continued to serve as a consultant with the State Department and to be in the Executive Reserve -- not that they ever called on me very much. Then in the Kennedy administration I was asked to go back and did. I served as the Director of the Foreign Economic Advisory staff under George Ball, the Under Secretary. But a full year in 1961-62 was enough.

So far as contributing to one's academic work, you have a much greater sense of realism about governmental practices, what's relatively important and not important. Academic people

 

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tend to dwell on little intellectually fascinating things that are intriguing and challenging, and to nit-pick much more than do people in Government. In Government I worked with military people, lawyers, businessmen, economists, and whatnot, a great variety of people. I enjoyed working with a variety of people.

MCKINZIE: Is it true that academicians don't quite understand that a lot of the time Government people are simply going from crisis to crisis, that they can't have the sort of detached view academicians do?

COPPOCK: That's right. Of course, there are long dry spells in the Government too, that is, in your particular area, although there might seem to be a constant crisis in the Government generally. In any particular bailiwick it can be dull for quite a time, and there are aspects of the bureaucracy that are not particularly

 

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attractive. I happened to have held a fairly high position. I could make my ideas known up the hierarchy far enough to satisfy me at any point, but if you're too far down the line you can't stir anything up. With the help of friends that you make over a period of years in various agencies, you get so you can get things done indirectly. But Washington is a place where political power is the important thing. If there is not some political power connected with what you are doing, pretty soon you see that what you are doing isn't going to make very much difference. Having something carried to the third decimal point is of little interest to anybody there.

So, to stay around very long, unless you are just biding your time waiting for retirement, tends to be dull and frustrating, especially in peace time. Properly much more power lies with Congress than with the executive branch in peace

 

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time -- and I thoroughly agree with that -- but it makes the executive branch a much less interesting place to work.

MCKINZIE: And it became less interesting for you after 1949?

COPPOCK: Yes, really after 1950 or ’51. It was February of ’51 that I decided that in due time I was going to move, but I took two years to make the move. I might have stayed under certain other conditions, I think. There were a couple of jobs that I might have stayed on with. I wasn’t “mad” at anybody and so far as I knew nobody was “mad” at me. But if you’re going to be there you want to be where you have some power in the game. Willard Thorp asked me one time in the fifties. “Under what conditions would you go back?”

I said, “I would go back if I had a position of some political power in the situation.” Not

 

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that I wanted to be a great big shot, but to have something really essential to do. So I felt in 1961, when I went back in that job as adviser to George Ball, Under Secretary, that I had a chance to do something. Also I was offered a job in 1962 as a member of the Tariff Commission. I would have taken it because of the new Trade Expansion Act, but the timing wasn't quite right.

Here's an example of how the political element works. The White House didn't want to put my nomination through until the Trade Expansion Act of 1962 was passed. It wasn't passed until October. I had to get back to my academic job by September, so we left Washington. In October they called and said, "It's all set."

I said, "Well, sorry, it's just too late." So, timing and politics affect things in that fashion.

Have we covered most of this?

MCKINZIE: Yes, we sure have.

 

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COPPOCK: You're probably exhausted.

MCKINZIE: And I thank you very much.

COPPOCK: Well, it has been a pleasure.

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List of Subjects Discussed

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