Numbers appearing in square brackets (ex. ) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
Opened July, 1990
Oral History Interview with
June 11, 1975
by Richard D. McKinzie
Topics discussed include the Dillon, Read, and Company; administrative assistants to President Roosevelt in World War II; Office of Coordinator of Inter American Affairs; International Basic Economy Corporation; conscription law; Board of Economic Welfare; Combined Raw Materials Board; War Production Board; Reconstruction Finance Corporation; procurement of strategic materials in World War II; Foreign Economic Administration; foreign property disposal; Strategic Bombing Survey; Lend lease program; Quartz crystals for military radio communication; Joint Strategic Target Selection Group; the decision to use the atomic bomb on Japan; Japan's decision to attack Pearl Harbor; surrender of Japan; effects of atomic bombing of Hiroshima and Nagasaki; postwar missions of American armed forces; Office of International Trade Policy; U.S. State Department Policy Planning Staff; Marshall plan; balance of payments policy; Committee for European Economic Cooperation; origins of Point IV program; Truman Doctrine; Trieste question; NSC-68; Joint Strategic Survey Committee; nuclear war strategy; Korean War; dismissal of General MacArthur; North Atlantic Treaty Organization; German rearmament; French Indo China; Middle East oil development; Iran oil controversy; transition to Eisenhower administration; defense budget in Eisenhower administration; and Spain and NATO.
Names mentioned include James Forrestal., Paul Shields, Franklin D. Roosevelt, Thomas Corcoran , Benjamin Cohen, James Rowe, Oscar Cox, August Belmont, Cordell Hull, Henry Wallace, Henry Morgenthau, Jr., Harry Hopkins, Leo Pasvolsky, Arthur Krock, Will Clayton, Ferdinand Eberstadt, Nelson Rockefeller, Donald Nelson, William Burden, Charles Harding, Josh Figueres, William Knox, William Draper, George C. Marshall, Henry Stimson, Jesse Jones, Carl Spaeth, Milo Perkins, Cresswell Maku, Morris Rosenthal, Monroe Oppenheimer, Temple Bridgeman, Alan Bateman, Theodore Kreps, Willard Wirtz, Pierre de Lagarde Boal, George Ball, Leo Crowley, Harold Starr, Lucius Clay, Guido Perera, Franklin D'Olier, Henry Alexander, Victor Emanuel) Henry Riley, Don Hochschild, Simon Strauss, Harry S. Truman, Leon Pearson, Charles Thornton, Henry H. Arnold, J. Fred Searls, Muir Fairchild, Orvil Anderson, Frederick Castle, Carl Spaatz, Walter Rostow, Solly Zuckerman, Philip Farley, Rensis Likert, Albert Speer, Wolfgang Sklarz, J. Kenneth Galbraith, Burton Klein, Trevor Roper, Rolf Wagenfuehr, Phyllis Nitze, James F. Byrnes, William Leahy, Joseph Alsop, Albert Wedemeyer, Douglas MacArthur, Charles Willoughby, Robert Richardson, Prince Fumimaro Konoye, Marquis Kido, Lauris Norstad, Forrest Sherman, H.V. Kaltenborn, Ralph Ofstie, Thomas Moorer, Charles McCain, Jock Whitney, William Jackson, Clair Wilcox, Otis Mulliken, Dag Hammarskjold, Joseph Jones, Dean Acheson, Charles Bohlen, George Kennan, Charles Bonesteel, George Lincoln, Robert Tufts, William Phillips, William Bray, Harold Glasser, Oliver Franks, Richard Bissell, Thomas Blaisdell, Paul Hoffman, Robert Lovett, John Taber, Ernest Gross, Thomas Connelly, William Y. Elliott, Charles Burton Marshall, Walter Judd, Sol Bloom, John Lodge, Christian Herter, Phil Watts, Robert Lovett, Arthur Vandenberg, Alben Barkley, Kenneth McKeller, Jefferson Caffery, Robert Murphy, Mauricio Hochschild, Richard Coudenhave Kalergi, Eugene Loebl, W. Averell Harriman, William Draper, Harry Dexter White. V.I. Chuikov, George Kennan, George McGhee, James Reston, Clark Clifford, Loy Henderson, Robert Joyce, Sherman Kent, Robert Le Baron, J. Robert Oppenheimer, Edward Teller, David Lilienthal, Ernest Lawrence, Louis Johnson, H. Freeman Matthews, Truman Landon, Alexander Sachs, John Muccio, John Foster Dulles, John Ferguson, John Paton Davies, Dwight D. Eisenhower, Andrew Corry, Samen Tsarapkin, Jacob Malik, Forrest Sherman, Niles Bond, C. Turner Joy, Arleigh Burke, Chester Clifton, Omar Bradley, Arthur C. Davis, Joseph Collins, Frank Nash, Royden E. Beebe, John McCloy, Robert Schuman, Ernest Bevin, Herve Alphand, Charles E. Wilson, Emmett Hughes, Bedell Smith, Milton Eisenhower, Everett DeGolyer, Walter Levy, Calouste Sortis Gulbenkian, Richard Wigglesworth, Mohammed Mossadegh, John W. Snyder, William Martin, J. Howard McGrath, Leonard Emmerglick, Henry Fowler, Clement Attlee, Harold Linder, Kennett Love, Herbert Hoover, Jr., Henry Cabot Lodge, Robert Cutler, Alfred McCormack, Frank Wisner, Henry Owen, Tom Mann, and Francisco Franco.
MCKINZIE: Mr. Nitze, maybe one place we could start is, how you came into Government service. We want to start at a very early stage in your career, and you might want to talk about some of your background before coming into Government.
NITZE: I might begin with an episode in the spring of 1940. I think it was about the time the French collapsed at Lyons and the Germans were clearly going to move through France and that France was finished. It was about that time that I was a partner in Jim [James T.] Forrestal's Dillon, Read & Company and Jim Forrestal asked me to come into his office; he had something he wanted to discuss with me. And what he had to discuss was the fact that Paul Shields, who was the senior partner of Shields & Co., had been in to see him after having talked with Franklin Roosevelt in Washington. Mr.
Roosevelt had said it appeared as though the United States might be in danger: that Hitler might be able to consolidate his position in Europe, that the position of England was uncertain, that Hitler might decide to go down through Spain into Africa, and that we might be involved in the war, or at least in a very serious confrontation with Hitler. In the past, he [Roosevelt] established his political position by being against Wall Street and the monied interests and had taken the position that they were the "they" and he was representing the "we" against that "they," the monied interests in the United States. Now, the potential enemy was Hitler; this would require greater national unity.
Roosevelt wanted to build a bridge with his former opposition in order to decrease the tension and friction within the United States. In order to do so, he wanted to have a man who was highly respected by the Wall Street community, who also was a Democrat, to come and be a member of his staff, one of the "silent six" administrative assistants to the President. The Congress had authorized six administrative assistants to the President with the proviso that they would not be entitled to have any staff of their own except a secretary, and that he [Roosevelt] had asked Paul Shields his advice as to who would be the best man to
fit that role. Shields had suggested to him that the best man he knew of was Jim Forrestal, who was highly regarded by the Wall Street community and was a Democrat. Forrestal's question to me was, should he or should he not do it? The first question that I asked Forrestal was, did he think he would be any good if he went down to Washington? He said he wasn't at all sure that he would be. He said that he understood the Wall Street business but he'd never had had any experience at all in Washington and wasn't at all sure that he would be effective there or could be effective. The second question I asked him was, if you go down there and find that it's an ambience in which you can't be effective, what happens next?
He said, "Well, under those circumstances I guess I would return to Dillon, Read & Company."
I said, "Well, that wouldn't be so bad, would it?" Then the third question I asked him was, "If you turn this offer down, will you ever have any feeling of regret that you failed to give yourself a chance at working in a wider framework?"
He said, "Yes, I think I will have that feeling."
I said, "Under those circumstances, it seems to me you've answered your own question." "If you go down to Washington and it doesn't work, you don't lose anything.
If you turn the offer down, you do lose something because you will always have this feeling of regret that you haven't given yourself the chance."
The upshot of that was that he accepted Roosevelt's invitation to come down as one of his six administrative assistants, along with the others who were [Thomas G.] Corcoran and [Benjamin A.] Cohen and Jim [James H., Jr.] Rowe and Oscar [S.] Cox; and I forget who the others were.
MCKINZIE: Steve [Stephen T.] Early, was he ...
NITZE: I don't remember whether he was there then or not. I'm not 100 percent sure whether Oscar Cox was really one of the administrative assistants or whether he was in the Department of justice, but in any case, he was around the White House a great deal.
So, Jim went off to Washington and I continued to work on Dillon, Read & Company's business and was down in Louisiana with a man by the name of August Belmont, working out some financing for the United Gas Company. We got that deal all worked out and then went fishing, bass fishing, in a lake north of Shreveport, Louisiana, that Sunday and came back to the hotel that night and there was a telegram from Forrestal which said, "Be in Washington Monday morning. Forrestal." So, I took the
plane to Washington and appeared in Forrestal's office, which was in the Old State War Navy Building which is now the Executive Office Building and he had a very fine office on the first floor there with one secretary, a Miss Reynolds. I asked him what this was all about and he said, "I want you to sit at that desk over there and help me."
I said, "Well, on who's payroll will I be?"
He said, "Well, I'm not authorized by law to have any assistants, but I need help. I want you to sit at that desk and help me."
I said, "Well, on who's payroll will I be?"
He said, "Well, Dillon, Read & Company will continue to pay."
I said, "Is that proper?"
He said, "It doesn't make a damn bit of difference whether its proper, this has to be done."
Then I said, "Well, where do I live?"
And he said, "Well, I've just rented a house on Woodland Drive and you come and live with me in that house."
So I did. But it turned out that Roosevelt was not really using Forrestal in the function that he had gotten Forrestal down for. An issue had arisen with respect to Latin America. Cordell Hull had one view
with respect to Latin America; his principal policy interest was beneficial mutual multi lateral trade and his deepest antagonism was against the Argentinians because they were not cooperating on anything.
Henry Wallace had an entirely different view. Henry Wallace felt that the future lay to the left; that the United States had to take leadership toward the left in order to be in the forefront of the evolving world situation.
[Henry, Jr.] Morgenthau had still a different point of view. His central interest, of course, was the defeat of Hitler and the rescue of the Jews, and penalties to the Germans for their treatment of the Jews.
MCKINZIE: Is it also safe to say that Morgenthau was extremely conservative, financially and economically, in the kind of advice he was giving the President?
NITZE: I don't think that was the deciding principle about Morgenthau. I think that it was basically a hatred for Hitler and his group. The differences between these three were so great. Harry Hopkins was then, I guess, Secretary of Commerce and living in the White House but acting as Secretary of Commerce. And Harry was unable to resolve these differences between Hull, Wallace, and
Morgenthau; and the President had asked Jim Forrestal to straighten this thing out and get some coordinated policy with respect to Latin America. Obviously neither Jim nor I knew anything much about Latin America but this was the assignment. The man in the State Department who was primarily interested in global strategy was a man by the name of Leo Pasvolsky. Much of my work during that period involved arguing these things out with Leo and some of Henry Wallace's fellows, and some of Morgenthau's fellows, and trying to figure out what ought to be done. I finally came to the conclusion that the State Department just wasn't staffed and wasn't intellectually oriented to addressing itself to a new situation. Most of those people in the State Department had been brought up in the school of just reporting, diplomatic reporting, and weren't oriented toward policy, per se. Leo Pasvolsky was the only one who was oriented toward policy per se. He had no staff of any kind, that I know of, and didn't seem to me to have a full grasp of what the problem might be like. And so, it seemed to Jim and to me that the best course was to recruit some talent that did know about Latin America, and that did have a flexible enough viewpoint to look at policy from the standpoint of a brand new situation and make of this a coordinating organization
which would coordinate the activities of the State Department, the Department of Agriculture, the Department of Commerce, and the Treasury Department with respect to U.S. policy toward Latin America.
So, I worked with the other administrative assistants in the White House, particularly Jim Rowe and Oscar Cox whether he was an administrative assistant or whether he was over there working for the Department of Justice, I don't remember. But, in any case, Jim and Oscar helped me draft a charter for the office of the Coordinator of Inter American Affairs. Jim, in the meantime, was devoting most of his efforts to talking to the top people and to members of the Congress, with respect to these problems. His closest personal advisors were really Arthur Krock and Tommy Corcoran. But I managed to get this charter for the office of the Coordinator of Inter American Affairs drafted, as I say, with the help of Jim Rowe and some of these other fellows. We'd made up our minds that this is what ought to be done and why didn't Jim just propose this. Jim said, "No, that isn't the way to do it. The way to do it is to let all these top people talk and talk and talk until a consensus arises in which they're all behind this. You don't handle a problem like this down here in Washington by just deciding what you think is right, the
way we used to in Dillon, Read & Company, and doing it; you've got to get political backing for it. And if I just put this forward, all these top people will be against it. But if I let them talk the thing out, they'll finally come to the conclusion that this is the only solution. Then it'll come from them and they'll be behind it rather than my imposing or the President imposing it from the top."
And I was quite annoyed with Jim because my instinct in those days was, if you figure out what ought to be done, do it. Well, Jim's instinct was, it won't be effective unless you get the people who have to execute it, and have to cooperate with it, behind it. So the upshot was, it took longer than I thought it should take. But Jim was dead right and eventually everybody was behind this thing and more or less proposed it to him, and then he could say, "All right, your view is that this is what ought to be done, and if this is what ought to be done, then here is this document which we can send to the President and he can act on it."
MCKINZIE: Does my memory fail me or was not the Coordinator of Inter American Affairs, or was not the Institute for Inter American Affairs corporation chartered in Delaware.
NITZE: No, it was an agency of the U.S. Government reporting to the President, an executive agency, established pursuant to an Executive Order. This document was the Executive Order which the President would sign, creating the agency.
Then the next problem was that Jim talk this over with the President. The President agreed with this, but the question was who should be the Coordinator? Jim and I got up a list of, oh, I think twenty or thirty names of people who came to mind as being candidates for the role. As I remember it, the person whom we put first on the list was Will Clayton. Will Clayton was an exceptional and outstanding man, and had founded Anderson, Clayton & Company. He'd originally been a telegrapher and while a telegrapher, had developed his own system of shorthand in order to help him as he was trying to transcribe telegraphic messages. He'd risen to found the Anderson, Clayton & Company and Anderson, Clayton & Company were the largest handlers of agricultural and other commodity products in Brazil and other parts of Latin America. He'd had much experience with doing business in Latin America and he knew how to do it, knew those people, knew a great deal about all parts of Latin America. Second on the list was Ferdinand Eberstadt, who also had been a partner of ours
at one time in Dillon, Read & Company. He was a brilliant man, but very prickly and sharp at the edges, and hard for people to get along with. The third man on the list was Nelson Rockefeller. Nelson had founded, I think it's called IBEC; at least it was a corporation to...
MCKINZIE: International Basic Economy Corporation
NITZE: ...yes, and I forget who the others were on the list but there were some twenty or thirty names. Jim went in to see the President about that list of names and he came back and told me what had happened. He said that, the President had turned down Will Clayton, not on the grounds that he didn't think that Will Clayton was competent to do the job. He said that Will Clayton had contributed $25,000 to the Republican campaign in the last election, and that, therefore, he was not acceptable to him. And then he turned down Ferd Eberstadt because Ferd was too controversial and too hard to get along with. But he had accepted Nelson Rockefeller, because Nelson Rockefeller had contributed $25,000 to his, FDR's, campaign.
Jim said, "Mr. President, I don't really think that Nelson is competent to do this job. And if you're going to make this decision then you really ought to appoint
Will Clayton as his deputy, because Will Clayton has the competence. And Will Clayton is not a man who stands on prestige and position; and he would, I think, be prepared to do it as deputy. He could then give the wisdom and expertise to this organization, and Nelson could give the public eclat and imagination and drive to it; and I think that would work."
He said at that point Roosevelt smiled and he said, "Well, I guess Will would be all right for that job because Mrs. Clayton contributed $10,000 to my campaign."
MCKINZIE: I knew he liked her but I didn't know why.
NITZE: So the decision was made, and Jim and I then asked Nelson to come down and have dinner with us at the "F" Street Club; we persuaded Nelson to take the job. Then Jim persuaded Will Clayton to be Nelson's deputy and so the institution was founded and we got what we thought were the right people to run it. We thought we'd then worked ourselves, more or less, out of at least that job.
But there were a number of things that we'd already gotten underway. One of the points of his fear was, if Hitler were to make the decision to go through Spain into Africa and down to Dakar, our air capabilities down
to the bulge of Brazil would be very important. We didn't have enough airfields that we could use in order to do that; planes in those days had relatively short range. So we worked with Judge [Henry Jacob] Friendly he wasn't then a judge, he was a lawyer for Pan American and we worked out an arrangement under which Pan American would build nine airfields in the Caribbean. And the U.S. Government would, in a way, subsidize Pan American in order to get these nine airfields constructed.
We also were concerned about the German and Italian airlines flying into Brazil particularly I forget the names of these two airlines and there was a problem of getting the Germans and Italians out of Latin America. That task was turned over to Bill [William A.M.] Burden and Charlie Harding. They were given the task of seeing what they could do about that. There were, you know, lots of different things that had to be done and be worked on.
MCKINZIE: At that time Mr. Nitze, do you recall whether there was in the air statements from people in Latin American governments that this cooperation was going to have a postwar cost? I once asked Jose Figueres of Costa Rica if he thought the United States owed Costa Rica postwar aid. He said, "Yes, because of our
contribution to the war effort. We have sold our coffee in the market at O.P.A. prices and not at world market prices."
NITZE: That all occurred later. Because this, as I say, is in the year 1940. And at that time, we weren't in the war. These problems didn't arise. We were just interested in improving the situation in case the worse contingencies were to occur, and no such arrangements were made, at least at that time.
Then, one day while we were busily engaged in these things incidentally that secretary's name was Miss Randall, not Miss Reynolds I came into our office and Miss Randall was terribly cross with me. She said, "Why didn't you tell me that Mr. Forrestal was going over to be Deputy Secretary or Under Secretary of the Navy under [William Franklin] Knox?"
And I said, " Is he?"
She said, "Well, it's just been announced on the radio."
I said, "Damn Forrestal; he never suggested that he was contemplating this at all."
And within five minutes Forrestal walked into the room and I cursed him out for not having told me about this. He was absolutely shattered; it was the first he'd heard of it. He said that the week before, as he'd
told me, Knox had invited him to go out on the Potomac River on the Sequoia, and they'd had dinner and just talked about the world and politics and a lot of things, but no suggestion that Knox had in mind asking him to be second in command of the Navy. Here Roosevelt announced his appointment on the radio at 11:00; first he'd ever heard of it. Jim said that, of course, he would do it. In fact, he was enthusiastic about doing it, but when he went over to the Navy, he didn't want to take me with him because he wanted to work with Knox and the Navy people and not have any staff of his own. I said I thought that was quite right.
So, I went back to Dillon, Read & Company, to New York, and abandoned the house at Woodland Drive and Jim went over to the Navy Department. But then Bill Burden and Charlie Harding asked me whether I would help them on this business of getting the airlines out. And so, I did spend a few months working with them on this project of getting the German and Italian airlines out of Latin America, which finally worked. It took longer than that before they finally succeeded, but we got it well underway. So then, again I went back to New York. Then, I received a telephone call from another former Dillon, Read & Company partner, Bill [William Henry, Jr.] Draper. And Bill, all his life, had been a reserve
officer in the Army and his field of specialization in the Army Reserve was that of personnel matters. He was a colonel in the Reserves. General [George C.] Marshall at that time was very much interested in designing a draft act and getting it through Congress. And he had appointed the group to work on that project of designing a draft act and helping him get it through the Congress. He had given this group offices over at Fort McNair, and the group included then Colonel [Lewis Blaine] Hershey and Bill Draper, and they had four or five junior officers working with them. Marshall had insisted that this draft act had to be very carefully drafted and the procedures for implementing it thoroughly worked out, so that it would, in fact, be totally equitable, that no one could complain as to any inequity, and that the procedures had to not only be but appear to be part of the democratic process.
In working this out, they'd run into real difficulties as to how to design it and how to work out these procedures so it was, in fact, equitable and would appear to be equitable. In those days, you know, the term "systems analyst" hadn't yet been invented, and they said what they needed was a mathematical expert. In the days when Bill Draper and I worked together in Dillon, Read & Company particularly on revenue bond
issues for Bob Moses and for other people, on the Triborough Bridge and the San Francisco Bay Bridge, the Oakland Bay Bridge, lots of bridges dealing with revenue bonds, which really created that business I'd done mathematical computations involved in that with the aid of a real mathematician by the name of Bonus. Then Bill called me on the telephone and asked me whether I would come and work with their group as a mathematical expert. I said, "I'm no mathematical expert; it's Bonus who does the mathematics for me."
He said, "Well, bring Bonus along."
So Bonus and I appeared and set up shop at Fort McNair working for General Marshall and Colonels Hershey and Draper.
MCKINZIE: Did you have anything to do with Grenville Clark and his group, who were also active on the Hill, I think?
NITZE: Yes, we did see Grenville Clark, but I forget the details of that. But we finally did work it out, and really the tricky part of it was partially a question of principle as what did you do, for instance, about a draft district in those sections near Detroit where the deferments would be high as opposed to other parts of the country where there would be low deferments. And
how did you work that out so that it was really equitable between districts of high probable deferments and low deferments?
But there were also problems with respect to the machinery for doing it. We finally got all of it worked out in the way that we thought was proper. I forget how long this went on but, in any case, finally the bill was designed and the procedures were designed. I remember that bill finally went through Congress by one vote.
My essential recollection of it was really through General Marshall. For those of us who spent most of our lives on Wall Street where the important thing is to think the problem through clearly and find a solution to a complicated problem, and think it through fast, we weren't really that much interested in the democratic process. Marshall was the one who educated us to, really, the importance of the democratic process and what the requirements were of working in the democratic process in a way which would be not just intelligent, but acceptable and continue to be acceptable. Marshall's view was that if we were to get into a war, then we would need a vast number of men, and if there were any suspicion that this thing was not wholly democratic and equitable, it would cause a back reaction which would be terribly serious. For a democratic
country to get into a war under draft procedures, this was a traumatic kind of a thing; unless you did it exactly right, it wouldn't work.
MCKINZIE: Did Secretary [Henry L.] Stimson have anything to do with your group?
NITZE: He did, but I don't have any recollection of having seen Secretary Stimson myself; but I did see a number of lawyers that he had assembled in his legal team, and he had some really very competent legal people. I think [John J.] McCloy was one of them. Yet there was a whole group of them and I'd get stories about Stimson.
I remember one story about Stimson. These lawyers had come to him with a statement that he should make, that they had worked on with the greatest care, and every word was in the right position and every comma was right and every caveat was clearly spelled out; it was a perfect kind of legal statement. Stimson read this and he said, "Well, I'm supposed to announce this publicly, using this language? I won't do it." He said, "When a high official makes a public statement, the thing that counts is not the fine print; the thing that counts is the billboard effect. If this is understandable to the people, what comes through is the main point; it isn't these little minor caveats. You've got to rewrite this
so that it is not written in the form of a legal indenture; it has to be written in a way which can communicate to the American people."
So then they had to go back to the drawing board and they finally came up with something much better. I can remember a host of episodes of that kind where people were very much influenced by Stimson's point of view which was not that different than Marshall's, in a way. These were senior men with experience in what the U.S. Government was about and what the country was about. Many of us who came down there had been working in a narrow sphere and hadn't really gotten the broader viewpoint that men like Marshall and Stimson had.
But then the RFC [Reconstruction Finance Corporation] was created and Jesse Jones, was head of RFC. It had been created sometime before, but I guess the point that I have in mind is, he wanted Will Clayton to come over and be deputy head of the RFC. And he persuaded Will Clayton to leave Nelson Rockefeller's outfit and join him, and that left Nelson without anybody who had the same kind of experience that Will had. Nelson then asked me to come and help him. So I joined Nelson as Financial Director of the Office of the Coordinator of Inter American Affairs.
This was really a very interesting operation.
There were all kinds of interesting people in Nelson's organization. There were Anna Rosenberg and that architect chap who had done all the architecting at the Rockefeller Center, and Carl Spaeth who had been the original President of IBEC and who had, prior to that time, been dean at the Yale Law School and prior to that had been a classmate of Nelson's at Dartmouth. Carl and I became great friends during this period. Nelson really delegated to us everything in the economic sphere with respect to coordinating things in Latin America. But about this time FDR signed another Executive order creating the Board of Economic Warfare appointing Wallace head of the Board of Economic Warfare with authority to coordinate all economic activities around the world including Latin America.
The charter that I'd drawn for Nelson gave him the authority to coordinate economic matters along with other matters in our relations with Latin America and so there was a clear conflict between the charters. The question at issue was, how to work out that conflict. And Henry Wallace's deputy at that time was a man by the name of Milo Perkins, whom I'd gotten to know very well during the period when I was working with Jim Forrestal. Nelson Rockefeller's relations with Henry Wallace were really very close. They lived close together and Henry
Wallace used to come over and play tennis on Nelson's tennis court, and try throwing his boomerang, and sing songs, and so forth and so on. And Carl Spaeth and his wife and his children, and I and my wife, and I think some of our children, and Nelson and his children were all living together at 2500 Foxhall Road, the house that Nelson Rockefeller still has. So, Nelson and Carl and I met with Wallace and Milo Perkins to work this thing out, and the upshot of that was that Nelson and Henry agreed that they would have no difficulties on policy and that they were both satisfied to leave the implementation of policy to Carl and me and a third man by the name of Cresswell Maku, whom I had recruited from Curtis, Mallet Prevost & Mosle in New York. He was the principal Washington lawyer representing people who were doing business in Latin America, and principally in Brazil, and knew Latin America very well, and was a most wise and broadminded and astute man. The three of us were given the job of running this economic coordination with both Wallace and Nelson.
And then it turned out that Nelson and Henry did not see eye to eye on policy and, in fact, were unable to agree that there really was a difference of viewpoint between the two. Here things were getting more and more desperate. It looked more and more that we would be
involved somehow or another in the war sooner or later, and you couldn't let time just go by. Things had to be done, so the three of us decided that in the absence of clear guidance from our bosses, we would do the best we could. We'd make up our own mind on what to do and we did. Then Nelson found that we were, in fact, doing that and he was absolutely enraged particularly with Carl Spaeth and thought it was disloyal. Carl Spaeth had been a classmate, had been President of IBEC, and was his closest friend; and here Carl was doing things independently rather than pursuant to Nelson's will. So, he fired Carl right off the bat, and this then...
MCKINZIE: Was it because of wrong minded policy or because of the business of loyalty?
NITZE: Purely a question of loyalty. And this, then, broke up the relationship between Wallace and Nelson, and something had to be done. The upshot was that Carl went over to the State Department and Cresswell Maku stayed with Nelson Rockefeller, and I ended up with Henry Wallace. The work was really transferred from the Coordinator of Inter American Affairs' office to Wallace. I ended up more or less in charge of Latin American economic affairs, working for Henry Wallace. I think Nelson's always had some recollection of this,
even though I hadn't had any particular relation with Nelson prior to the time that Jim and I persuaded him to take the job. Well, that kind of introduces you to how I got into government.
MCKINZIE: When you were in Henry Wallace's Board of Economic Warfare, how did you find its general operation? A lot of people have said that it was chaos and, in fact, the reason it was abandoned after a year or so was the fact that he was such a poor administrator. In your work, did you have occasion to observe him?
NITZE: Well, I saw quite a lot of Wallace and his principal assistants. His lawyer was a man by the name of Monroe Oppenheimer, and under Milo Perkins, the most active fellow was a fellow by the name of Morris [Sigmund] Rosenthal. And both Monroe and Morris were very much over to the left, even more over to the left than Milo Perkins. In respect to Milo, I had no quarrels, no friction with Milo at all; I was devoted to Milo Perkins. He created the food stamp plan and a lot of things of that kind and he was really the epitome of an imaginative, liberal American. Monroe and Morris Rosenthal were more over to a Marxist leftist position; and there was in the Board of Economic Warfare a group of people who clearly were Communists, and known by us
as Communists, and known by Monroe and Morris to be Communists. Now neither Monroe nor Morris were Communists, but they felt that this was a difference of degree, not of kind, and that, in fact, the future lay to the left and that that's the direction you should move.
MCKINZIE: Did these cause internal wrangles within the Board on an operating level?
NITZE: Well, it soon became evident that one of the most important functions that we had with respect to Latin America was the procurement of strategic materials, particularly mica and quartz crystals and beryllium, and things of that kind, and that somebody had to specialize in that work. So I was transferred from dealing with Latin American economic affairs to being charge of the procurement of metals and minerals worldwide, or at least policy guidance with respect to that. The actual work was then done by subsidiaries of the RFC, the Metals Reserve Company, the Rubber Reserve Company, and U.S. Commercial Company. But we issued directives to those operating subsidiaries of the RFC as to what contracts to execute and, in fact, negotiated them and drafted them, and they then executed them. That was the job that I was in, and this work expanded radically
after Pearl Harbor. But we were doing the procurement not only for the U.S. but also for the war effort as a whole, the British as well as for ourselves. The Combined Raw Materials Board did the allocation internationally, and the domestic division of the War Production Board did the allocation domestically. That's how you got your copper and your lead and zinc and so forth. We didn't do any of the procurement domestically, but we did all the procurement abroad for everybody. This required recruiting a staff of people competent to do the work. And frankly, this was a field unknown to me. I needed help and the fellow that really well, I ought to make one further point; I think it was in the spring of '42 January, February, something like that, I read in the New York Times another Executive order signed by FDR in which he transferred, really, the total responsibility of procurement of strategic materials from the RFC to the Board of Economic Warfare. So I read in the paper that instead of just giving policy guidance, suddenly I've got to do the actual procurement. Nobody talked to me about it, but that's the way things happened. So that day I called up Temple Bridgman, who was President of the Metals Reserve Company, and said that we had to have lunch, and he said, by all means. My relations with
Temple were very good indeed. I talked to Temple about this and said, "What in God's name do I do? Here you've been doing all the mechanical work; you know this business, you've got the staff, but I've just got some so called policy fellows working for me."
Temple said, "Well, I'll help you. I'll recommend people to you and I'll give you advice as to what to do, but one thing that you've really got to understand and that is you've got to change your total modus operandi and total viewpoint in order to run a thing like that." He said, "You've never run a big organization; you've always been interested in the interesting policy issues and you don't know nothing from nothing about running an organization. If you're going to run an organization, you've got to devote at least 30 percent of your time to personnel selection, promotion, and management, and you can't devote all your time to the interesting, substantive problems the way you have in the past. That's going to require a revolution in your own point of view or otherwise you're not going to be able to do this."
I said, "All right, I have to do this, so I will do what you tell me I have to do and I will do these things that are somewhat distasteful just doing administrative work but who are the people you would recommend that I
and said, "Paul, now this is impossible; here you've got this organization and they're all Republicans."
I then explained to him why this was necessary, and he was terribly unhappy with this and so he said, "Well, I'm going to have to do something about this."
So he found a man, who's name I now forget, who would have been president of, I think it was the Guggenheim interest in the mining business, but was also a Democrat. He demoted me from being head of this thing and made me deputy chief of it and put this fellow in over my head. This fellow came down and spent about two weeks seeing what the business was like, what you had to do. And he came to the conclusion this wasn't for him. So, he left, and nobody every re promoted me to my previous position but neither did anybody appoint anybody over me. You were asking whether this caused frictions? Sure it caused frictions, but the war was going on and things had to be done and you dealt with them.
MCKINZIE: When you were involved in the business of procuring strategic materials, was any attention given at the time to the probability that at the end of the war these countries were going to end up with a lot of U.S. dollars and that somehow there was going to have to be some scheme by which those dollars could be released
gradually, so that they wouldn't be a kind of glut on the postwar market? Did you get into that kind of question at all?
NITZE: We did indeed. There was a fellow by the name of [Theodore J.] Kreps who was Henry Wallace's principal economic advisor, who was not a Communist but was a radical, non conformist, "America firster." You know, he was in the tradition of those Middle Western Americans, particularly, who were against the establishment; he would have been for Borah, but more radically so. Kreps was very much concerned about this. His whole effort was to keep me from paying excessive prices for any of these materials. His theory was, that if you kept the prices down this would avoid the accumulation of unused funds and so forth and so on. During this entire period, for instance, the Chilean copper we bought at 14 cents a pound, which was a reasonable price, taking into account Kennecott and Anaconda's cost in Chile. So, they weren't hurting profit wise, but for other copper in Mexico which was higher cost, we were paying 22 cents a pound for that and so forth and so on. We tried to handle it in a way which did not create the accumulation of funds and this was all geared in to the office of Price Control which had the same objective domestically. As a matter of
fact, I think we did a very good job.
Now Wallace himself, as I say, was very much interested in our taking the lead toward the left and he insisted that in all these contracts we negotiate what was called the "labor clause." We wouldn't enter into a contract with anybody unless they would commit themselves to engage in fair labor practices which, of course, was absolutely revolting to many of the people we were buying these things from, as interference in their internal affairs.
MCKINZIE: You have a very delicate point there and one which is in the papers right now about the use of, not necessarily government money, but the use of money to influence internal affairs of nations. I wish you could amplify on that, the extent to which these government contracts did have effect upon...
NITZE: These contracts were not necessarily with governments. They were with producers by and large, but they were considered to be an interference in internal affairs. Now, it was interference in a liberal direction; (a) we needed the materials for the war effort we couldn't really forgo them and (b) there was great opposition to what we were doing, on the other
did it. My principal lawyer on all this was Willard Wirtz. Willard and I worked out all these deals together.
MCKINZIE: Well, as this time passed how did the relationship between Henry Wallace and Nelson Rockefeller evolve then, as you had gone to the Wallace camp and you mentioned that Spaeth had been let go by Rockefeller?
NITZE: Spaeth went to the State Department and Maku stayed with Rockefeller.
MCKINZIE: Did this create some tensions between the Rockefeller organization and Wallace as time went on?
NITZE: I think so, but I'm a little hazy in my mind about that because I was too busy working on what I had to do. But just one other story in connection with this. During this period there was a strike at the Catavi mine in Bolivia, a tin mine in Bolivia. During the course of the strike there was a riot and Bolivian police killed a number of rioters; this was termed the "Catavi massacre." Wallace put out a statement to the press violently attacking Cordell Hull and saying that this was the responsibility of Cordell Hull and that Cordell Hull was personally responsible for the Catavi massacre. Can you imagine the Vice President putting out that kind
of statement with respect to the Secretary of State? FDR didn't quite know what to do about this because he didn't want to fight with either and he decided to create a three man commission to look into the facts of the Catavi massacre. And Hull was to appoint one member, Wallace was to appoint one member, and then a judge, whose name I now forget, was to be the third member.
Wallace called me into his office and described the problem to me and asked me whether I would be his designated representative on this board of investigation, and I said I would.
He said, "Well, Paul, before you go down on this I want you to understand the facts on this thing as I understand them." He said, "The U.S. Ambassador in Bolivia is Pierre de Lagarde Boal. I know Boal," he said. "I've known Boal for a long period of time. Boal fought in World War I with the greatest honor and distinction, got the highest Legion d'Honneur award for his bravery and he was a complete gentleman and a man of complete honesty. I'm sure he did nothing improper, because he's not that kind of a man. But that isn't the point; the point is that the future is going to be to the left and the U.S. must take the lead in being to the left and no matter what the facts are, it is necessary
for us, in a postwar world, to take a position which is to the left."
I said, "Mr. Wallace, under those circumstances I'm not your man; I can't do it."
He said, "All right, if you can't do it, you can't do it," and so he appointed somebody else.
The impression that I had of Wallace was that Wallace was a much more intelligent person than the public image of him. The public image of him was a kind of bumbling man with a good heart who really didn't know what he was doing. Wallace was not an unintelligent man; he was a very intelligent man. He knew what he was doing, but the essence of it was that he was, in a way, carried away with the hope that he saw the wave for the future more clearly than others and that he would ride this wave of the future in the present.
MCKINZIE: His diaries have recently been made available and in those diaries he says that it would be the postwar privilege of the United States to help Latin America, in particular, to industrialize. Would you see that as part of riding the left wave of the future?
NITZE: Yes, I would. It was not only industrialization that he was interested in, it was liberalization of what he considered to be an illiberal society, which is the way
it was. You can argue about whether or not Wallace was right or wrong about that point as to what was needed. The real question arose as to the procedures which he thought were proper in order to attain that goal, and his time scale. He felt that it ought to be done right away, through, what seemed to me to be, improper procedures as in this Catavi case. Now, you send a board of investigation down there and you instruct your representative to close his eyes to whatever the truth is in order to come out to a position supporting him, even though he knows that his position is based probably upon incorrect facts. Now, this seemed to me to be the essence of the question at issue; whether the proper procedures are observed, or whether anything goes, provided the end result is right. He was just looking at the end and not at the appropriate methods and procedures. At least that's the way it struck me.
MCKINZIE: Were you in the middle of things when the BEW became the Foreign Economic Administration?
NITZE: I was, indeed. Because when it became the Foreign Economic Administration, and when Mr. Roosevelt announced his appointment of Leo Crowley to be head of the combined Lend lease BEW and RFC subsidiaries, they were, by and large, transferred to the new
organization. The U.S. Commercial Corporation, for instance, was transferred almost lock, stock, and barrel to the Foreign Economic Administration. He said that Leo Crowley was the greatest administrator in or out of Government.
MCKINZIE: Was that a jab at Henry Wallace?
NITZE: Might have been, but it wasn't read that way at the time. It was really read as being support for Leo Crowley. And none of us knew anything about Leo Crowley because he'd been running the Federal Deposit Insurance business and none of us knew anything about that.
George Ball was then Oscar Cox's deputy as General Counsel of the Board of Economic Warfare and Oscar became General Counsel of the new organization. Right after Leo was appointed, hearings began before the House Appropriations Committee on the new FEA budget; and I went up to New York to deal with strategic materials. While I was up there, I got a telephone call from George Ball saying that I should take the first plane back and go straight to the Capitol to room such and such, and so I did that. When I got there, Ball met me at the door and said, "This thing has been a disaster."
I said, "Why, what's happened?"
He said, "Well, Crowley's been on the stand and the
first question they asked him was his name and he got that correct. And the second question they asked him was what was his position and he said he was head of the Federal Economic Administration." He [George Ball] said, "From there on this thing has been a wilderness and we've got to take him off the stand and we've got to have somebody else on the stand. Will you get on the stand?"
They threw Crowley off and put me on. This was in the first weeks of this thing. Then these subsidiaries of the RFC were transferred to the Foreign Economic Administration. Running the U.S. Commercial Corporation was a fellow by the name of Dukas, who was president of the U.S. Commercial Corporation. The way we had been working up to that point was, I and my boys would negotiate these contracts and get them signed, and then send them over to Dukas for implementation. They would carry out the implementation. Here, the U.S. Commercial Corporation was now part of the Foreign Economic Administration. And Dukas said, "I'm not going to accept directives from another part of my own organization. I report to Crowley just as you do, and I'm goddamned if I'm going to take any orders from you. I report to the same boss that you do."
So Dukas wouldn't ratify any of these contracts.
All the strategic materials which entered the United States pursuant to these Government contracts were free and clear of duty, but without the contract being signed, they couldn't clear customs. And Crowley wouldn't order Dukas to execute my contracts. At one point we had 40,000 carloads of ores and metals and so forth, and so on, backed up to the Mexican border; they couldn't cross the border because contracts were not signed. And we had 500 ships, either in port or approaching port, that couldn't be cleared. This was absolutely a desperate situation.
One of the fellows, who was working for me, was a fellow by the name of Shannon; he used to run the Shannon Coal Mine outside of Pittsburgh. I remember having a meeting with Shannon and Bridgeman and some of these other fellows, discussing what the hell do we do?
I said, "Well, have patience till we get this thing straightened out."
I remember Shannon telling me a story about Job. I wonder whether I can remember this story.
the Lord's name in vain, screaming and yelling.
His wife said, "You mustn't take the name of the Lord in vain; remember the story of Job. He didn't take the name of the Lord in vain; he exercised patience."
And he said, "The Lord may want me to be patient but he didn't have his balls in a mousetrap."
It's extraordinary what things you remember. But in any case, the upshot of that was that I came to the conclusion that Shannon was right, something had to be done. I wrote a memorandum to Crowley which laid out on one page exactly what had happened and why it was absolutely essential for him to direct Dukas to sign these contracts and all this stuff would be cleared up. I made three copies of that memorandum, one copy of which I sent to Crowley, one copy I kept in my files, and one copy I gave to the legal staff. Then I went away for the weekend, because there was nothing you could do until Crowley would act. I went away for the weekend, skiing someplace, and came back and all hell had broken loose because the memorandum had been leaked to the St. Louis Post Dispatch in toto verbatim. Crowley was fit to be tied with rage. He directed Dukas to execute all the contracts and the whole thing got straightened out right away.
you mean by writing a memorandum of that kind?"
I said, "But you know it's true."
Crowley was ready to fire me at that stage of the game and Oscar Cox came to my defense and persuaded Crowley not to fire me.
MCKINZIE: Crowley would have preferred that you spoke to him about it rather than committing this problem to paper?
NITZE: I guess so, but I had already spoken to him. The only way to get action was to put it down in black and white. This had caused him immense embarrassment, of course, and he felt that I must have been responsible for leaking it. I finally found out who had leaked it; it was a fellow by the name of [Harold Wayne] Starr who was one of Oscar's lawyers. I think the reason that Oscar defended me so vigorously was that he knew it was one of his boys that had done the leaking. But in any case, it did the job and I'm not at all sure that Starr was wrong in leaking it, because that was the only way you were going to get this thing done, because Crowley wouldn't act.
But then, subsequently, it was decided to create an agency to worry about surplus property disposal, both domestically and abroad. Will Clayton was appointed to that job. But the foreign part of it was sub-delegated
from Clayton to the Foreign Economic Administration, and Leo tried to find somebody to handle it; he tried one fellow and this didn't work and then he tried another. Finally they couldn't find anybody outside to do it; and so it was decided that somebody inside should do it. So Crowley called me in and said, "Paul, in addition to your procurement job, will you take on the job of foreign property disposal abroad?"
I said, "Fine, I'll try to create an organization and work with the thing."
And I did. I managed to borrow about forty or fifty people from various other parts of the FEA or the Government to help me work on this thing. We had no charter, we had no direction, we had nothing. We did it the way you did things in wartime. If something had to be done you borrowed people and did things. We got up all the documents of policy and procedures and principles, and I negotiated this with General [Lucius] Clay who was in the Pentagon.
Incidentally, there was an interesting episode with General Clay, because one thing seemed to be clear and that was that the last thing in the world that the United States wanted to do was to get paid for their surplus abroad, because all of those countries were going to be in terrible economic shape at the end of the
war. We were running a balance of payment surplus; they were all going to run balance of payment deficits, and it was meaningless to get paid for it. It seemed to me that in the postwar world we would probably need island bases, and that the thing to do was to work out a deal with the various countries where we would just give them the surplus and they would give us base rights on islands. So, I proposed this to Clay and Clay said it was a screwball idea. He said, "When we win the war we will be the most powerful nation in the world. There'll be a peace treaty and at that peace treaty we can demand whatever arrangements then appear to be advisable. It's too early to see what we need."
So that was the end of that idea. But in any case, we worked all this out, and then I went in to Crowley and I said I'd gone as far as I could with borrowed personnel. I said I needed a clear cut directive creating this division of the Foreign Economic Administration, because without such a directive I couldn't go to the Bureau of the Budget and get any money, and if the damn thing was going to be a continuing organization it needed a directive and an allocation from the Bureau of the Budget. I had prepared all the documents; all he had to do was put his "John Henry" on it and I would have been at work getting
the money from the Bureau of the Budget and so forth and so on. But Crowley refused to sign the piece of paper and I said, "Mr. Crowley, I don't understand. You asked me to do this and I've done everything I can do without such a piece of paper. Now comes the time when I have to have this piece of paper; why won't you sign it?
Crowley drew himself back in the chair and said, "Well, Paul, you know what I'd really like is Will Clayton's job as Director of Surplus Property Disposal overall, and if I sign this and you fellows do a good job of handling this, this will all go down to Will Clayton's credit, not to mine, because he's in charge of this enterprise. If this thing lays an egg, the responsibility for that will rest on Will Clayton, which will improve my chance of getting Will Clayton's job."
I said, "Well, I understand you clearly, Mr. Crowley, but under those circumstances I'm going to resign. I resign."
Crowley said, "Well, I don't want you to resign, Paul. I'm just telling you what I want you to do."
I said, "Mr. Crowley, I have resigned. It's over with."
Crowley said, "Well, Paul, you know I'm an important figure in the Democratic Party and I will guarantee you that if you do this you will never again
get a job in a Democratic administration."
I said, "Well, I have resigned, Mr. Crowley, goodbye." So I left the office and walked out in a huff and took a taxicab and went over to see a friend of mine by the name of Colonel [Guido Rinaldo] Perera who was organizing the U.S. Strategic Bombing Survey. He had talked to me earlier and said, "Here, Paul, we're setting this up and what we need are people who don't know a goddamned thing about it; it has to be objective, and so we are looking for people who don't know anything about air power or air attack or anything else, who have had nothing to do with it. Would you be interested?"
I said, "I'd love to do it, but I'm too busy on what I'm doing."
When I resigned from Crowley's aegis then that bar no longer exited; so I went over to see Guido and he took me in to see Colonel [Franklin M.] D'Olier, and Henry Alexander was also there. They said, "Fine, come on; we'll sign you on right now as a director of the U.S. Strategic Bombing Survey."
Within two hours after Crowley had told me I'd never get a job again in the Democratic administration, I was a director of the U.S. Strategic Bombing Survey.
MCKINZIE: Did Mr. Crowley's administration focus on the conservative aspects of things as much as there was
liberal emphasis by the Wallace Board of Economic Warfare?
NITZE: Didn't focus on a thing. Crowley was not politically oriented in any way. He was a boughten man. He had been president of a bank in Wisconsin someplace or other, and during the depths of the depression that bank had gone broke. But he had been a money raiser, I think, for the Roosevelt campaign in 1932, or I don't know '36, '40 or sometime in there and had gotten a certain position in the Democratic party in that connection. And there was a man in New York by the name of Victor Emanuel who ran a company called the Standard Gas and Electric Company, and Victor Emanuel made a deal with Crowley under which he lent him the money to keep from going into bankruptcy, I think it was $400,000 or $500,000. In return for that loan he entered into a contract with Crowley under which Crowley would become Vice Chairman of the Standard Gas and Electric Company at a salary of $70,000 a year with no duties, and with a commitment that he would try to get himself a job in the Federal Government from which position he would then be able to help Victor Emanuel in the things that Victor Emanuel was interested in. Part of the $70,000 was to be used to repay the loan.
This all came out in the press, the whole contract.
Somebody leaked the whole contract. But that's what he was; he wasn't a serious fellow of any kind. He was a tool or instrument of Victor Emanuel, and Victor Emanuel wasn't interested in politics; he was interested in getting Crowley into some kind of a position where that position would be helpful to him in the various things that he was trying to do.
MCKINZIE: Milo Perkins, for example, stayed on and worked for Crowley, didn't he, until right up to the end?
NITZE: Did he? I'd forgotten that. But the facts of this contract didn't come out until later after I resigned. None of us knew this; we all thought there was something very wrong with Crowley.
But one other story about Crowley, while we're on the subject of Crowley. This had to do with the termination of Lend lease which took place after I left him but which story Oscar Cox told me. Now, I got it only from Oscar and it ought to be checked with others. But after VE Day [Henry W.] Riley, who was Crowley's deputy and had been with him in the Federal Deposit Insurance business, and who was really a very nice cost accountant but his horizon didn't go beyond being a cost accountant Riley wrote a memorandum to Crowley proposing that with VE Day it was appropriate to
terminate Lend lease with countries involved in the European theater. The war was over, so terminate Lend-lease.
Oscar Cox heard about this and he wrote a memorandum to Crowley in opposition thereto, describing what the political consequences of such an act would be, and recommending that this all be negotiated out and see what the British requirements were, and so forth and so on, but not to use the meat axe. He talked to Crowley about it and persuaded Crowley to follow his course, rather than Riley's recommended course. Then Truman called a conference of the principal people involved I forget who they all were and Crowley went to the meeting with Riley's memorandum in his right hand pocket, Oscar's in his left hand pocket; and he drew out the wrong memorandum. That's how Lend lease to the British was cancelled in the way it was. Now did this appear anyplace in the Truman Library?
NITZE: I tell you, I think there are things that I remember that I don't think anybody else does.
MCKINZIE: The standard account about the cut off of Lend-lease is that Crowley simply looked at the Lend lease Act and it said that on the termination of hostilities
there should be cessation of assistance from Lend lease.
NITZE: This is true. That's the memorandum that came from Riley and that's the one he used. But it doesn't tell you that Oscar had persuaded him to follow a different memorandum.
MCKINZIE: Despite that kind of bumbling that was involved, did you think that the wartime procurement effort was efficient and were there ever any, so far as you know, unnecessary shortages as a result of administrative incompetence?
NITZE: No, I don't remember any. But obviously I was concentrating on the procurement of strategic materials I was told were required. My responsibility later was expanded from metals to include fibers and everything from dried Mexican prairie bones to dried cuttlefish bones, and glass eyes and anything that you could think of that was necessary for the war effort. We spent, I forget what, four billion dollars or something like that of Uncle Sam's money. The whole operation ended up with a profit for the Government. The reason for that was, as a government agency, we weren't paying import duties and we sold at the domestic price, which assumed payment of import duties. We were buying at the price less import duties, so that our claim to have made a
profit isn't quite fair but we put part of the differential on the development of resources that were short. In doing this we created the O'okiep mine in Nambia and a lot of other things, the Titan Mine in Peru, and God knows what other mines. We also spent a lot of money on trying to relieve the quinine shortage and this shortage and that shortage. It was substantially less than tariffs differentials, so the whole operation ended up with a profit.
Then, with respect to any improprieties or corruption in this effort, there were only three instances of impropriety that came to my attention. One of them was in connection with the cinchona bark effort. We had a fellow who was absolutely first class who was doing cinchona bark in Colombia, among other places, and they produced just a hell of lot more cinchona bark in this operation than we had thought was possible. Eventually, atabrine came in and relieved the problem, but for a while this was the prime requirement, because in the South Pacific, in particular, lots of our GIs were getting malaria and they didn't have enough quinine till atabrine came in. You say were there shortages? Certainly there were shortages, they were short of quinine. That fellow didn't resist the temptation to accept a payoff from some of the Colombian subcontractors
who were finding those cinchona trees in the jungle of Colombia. We got wind of this and put the Department of Justice on it, and they caught this fellow accepting part of the bribe money and he went to jail. There was one other fellow whom we suspected of some impropriety with respect to an automobile, or something like that, kind of a minor thing. Then there was a fellow by the name of Don Mauricio Hochschild who had some tin mines in Bolivia. Don Mauricio came in to see me one day and described to me the Matilda Mine in Bolivia, which was a great lead zinc deposit near Lake Titicaca. But that couldn't be developed during the war because in order to exploit this mine we would have had to build a power plant taking water from Lake Titicaca down into Chile, and his was an enormous engineering operation. It looked as though that mine could eventually be developed into being a very profitable lead zinc mine. It was one of the biggest, richest lead zinc mines that had been found in that market and Don Mauricio said, "Paul, after the war why don't you join me in the development of this mine?"
That was an improper thing for him to say to me and I was absolutely furious with Don Mauricio, but what the hell do you do? You certainly say "no," but then how do you handle this fellow in the future? I had to do
business with Don Mauricio; and frankly, as a result of that I was unfair to Don Mauricio. But that's the only instance in which anybody ever made an improper suggestion to me. I can't think of any instance in which anybody even suggested that I would do anything improper.
Well, that goes to whether or not there was any corruption in the organization venality. I was aware of none except for those three episodes that I mentioned.
Now, with respect to shortages, the most worrisome shortages were the shortages in mica and quartz crystals, because in those days you needed mica to make condensers and you had to have condensers in all your electronic equipment; and, you needed quartz crystal oscillating plates in order to stabilize the frequency of the communication systems. That's the way you do it, at least the way you did it then. You had a little wafer of quartz which was ground down to a point where it would vibrate only at one frequency, and that's how you communicate at that frequency to another tank or whatever it is.
It turned out that at the Battle of the Kasserine Pass, we had an inadequate number of channels, I think only three, and the Germans would monitor these three
and they read all our communications. So they knew where our tanks were going and what all the orders were from the battalion commander to the various tanks. This was highly contributory to the disaster of the Kasserine Pass. So the War Production Board sent us an order to triple the procurement of quartz crystals, and the only place you could get quartz crystals in those days was in Brazil and some point in India. I assembled a team of some fifty geologists and mining engineers. I had almost unlimited authorization to spend money if money would do any good. We all "tootled" off to Brazil and I wandered all over the Minas Gerais on horseback with these mining engineers, trying to find these pegmatite deposits and mobilize people to dig them up. It wasn't the kind of a problem you can fix in a short term, even with all the mining engineers and all the mining equipment and everything you can put on the job. It's just that you can't treble it; this turned out to be impossible.
The essence of the problem was that it was thought a quartz crystal plate wouldn't oscillate correctly if it was imperfect. And there are two kinds of imperfection. one was that of being optically twinned, and the other, electrically twinned. The three companies who made oscillator plates were the Bell
Laboratories, Western Electric, and General Electric. They were persuaded that the correct way to go about this was to examine the crystal and see where it was optically twinned and where it was electrically twinned and cut that all out, and then the untwinned part of it you cut up into plates. They had all this scrap material that had been considered to be twinned, that had accumulated in large quantities and only a small percentage of it seemed to be usable. Then some little outfit in Chicago called the Delta Machine and Tool Company applied to Simon [D.] Strauss, who was working in Metals Reserve and said, "We'd like to try a different approach. What we'd like to do is to just take these quartz crystals unexamined as to whether they are twinned or not, cut them up into plates, lap them into the correct dimensions, and then test them to see whether they will oscillate or whether they won't oscillate. This way we'll lose less material."
And it turned out that this worked like a whizzbang; it more than quadrupled the useful plates out of the given quartz crystals. Then when they examined this from the standpoint of the physics involved, they found that the lapping process, which is grinding under pressure, that that pressure relieved the strains from the crystal and caused it to resume its normal untwinned
condition. It changed the molecular structure of the crystal, this grinding under pressure; and so that problem went away.
MCKINZIE: All by technology.
NITZE: Solved by technology in the most unanticipated way, while we fellows were unable to solve it in the Grosso trek. In mica, similarly, they developed other kinds of dialectric material which made the mica less necessary than it had been before, even though there still continued to be a shortage right to the end of the war.
But with respect to other things like copper one time it looked as though we were procuring too much copper, and I remember cutting back on some of the high cost contracts. But then, after the Battle of the Bulge where we chewed just an enormous amount of ammunition in a very short period of time, suddenly you had to reinstate all of these contracts. The same thing was true of aluminum. I remember at one time we had a hundred and twenty thousand tons of aluminum stacked up on a railway leading from Arvida [Quebec] down to the United States, just on the side of the road, because nobody could use it. We'd gotten too much aluminum; later that surplus disappeared. Some of the things that we'd originally thought were bound to continue to be no
problem, like lead for instance, suddenly became short. Everything at one time or another was either in excess supply or in short supply.
Your basic question was whether these things could have been better organized; that wasn't my impression. My impression was that we did a goddamned good job; everybody did an excellent job.
Now, one point with respect to Mr. Truman during this period. Mr. Truman was head of the Senate Investigating Committee and he had a lawyer working for him by the name of McGhee, if I'm not incorrect (not George McGhee). There was a group of people, I think it was in North Carolina, who said that there were mica deposits down there, and that we, in the procurement effort, were prejudiced against, and were not really taking sufficient interest in these Appalachian mica deposits. We'd gone into this thing not I, because this was a domestic procurement, but the Metals Reserve people had, and I was working very closely with those Metals Reserve people and we were wholly persuaded that this thing was for the birds, and that Truman was on a political pitch which had no merit. He and McGhee gave me and the others involved a terribly hard time during this period. Frankly, that did not increase my admiration for Truman at that time. So, at that time I
felt, as many did, that this was a small minded man very much motivated by politics and was pursuing unsound approaches that came up through political channels. And the methods used by McGhee were improper, because McGhee was collaborating, I thought, with who's the columnist who preceded Jack Anderson in the same column?
MCKINZIE: Drew Pearson.
NITZE: Yes, Drew Pearson had a brother and I forget the brother's name but some of the classified documents which originated in my office were appearing in Drew Pearson's columns. I finally found the fellow who'd done it. He was giving things to McGhee and to Drew Pearson's brother. So, you can see why this all bothered me. I tried to get this sonofabitch fired and I couldn't do it. They just transferred him out of my jurisdiction into someplace else.
Second Oral History Interview with Paul Nitze, June 17, 1975, Arlington, Virginia. By Richard D. McKinzie, University of Missouri Kansas City.
MCKINZIE: Mr. Nitze, our first session concluded with your discussion of the leaks that occurred in your office through the instigation of Drew Pearson's brother, Leon, and you mentioned that you had managed to have the person transferred, although you weren't able to get him removed from Government. You had not talked about surplus property.
NITZE: As I remember it, in the spring of 1944, the U.S. Government became seized with the problem of what its postwar policies would be. There were a number of segments of that problem. Some had to do with immediate period after the termination of the war and some were longer term. Let me deal first with the problem of surplus property disposal which was one of the problems foreseen as being an immediate problem.
As I remember it, President Roosevelt issued an executive order creating an office for management of surplus disposal, and he made head of that office, Mr. Will Clayton, who at the time was serving as Deputy to Jesse Jones in the RFC. The problem of foreign surplus, or surplus owned by the United States outside the borders of the United States was to be handled by the
Foreign Economic Administration working under the guidance of Will Clayton, administrator.
Mr. Leo Crowley, head of the FEA, had looked around for someone to head up that section of the FEA which would deal with the planning for surplus property disposal abroad. He came up with two or three names and, in fact, hired a man whose name I now forget, to head this office up. But this man found the work not to his taste and he left; and the various other people that they had in mind refused to take the job. So, Mr. Crowley then called me into his office and asked whether I would undertake these responsibilities in addition to my procurement responsibilities. I said I would need various people to help me do this. Mr. Crowley said, "Well, why don't you just borrow people from here, there, and the other place and get it done with borrowed people?" And I said I would try. So I borrowed some of the people from my own organization and some from other parts of the Foreign Economic Administration and we got to work. Over the course of three months, we had the problem pretty well in hand. We had worked out manuals of operational procedures, objectives, policy statements, all kinds of things. I had been working in this connection with General Clay, who was in the Pentagon, and seized of similar problems for the
One of the points that seemed to me to be clear was that after the termination of war European countries would be in no balance of payments position to make payments to us. In fact, we probably would have to be in the position of extending recovery aid rather than collecting payments from them. Therefore, the question arose: were there any other things that we could get other than monetary payment which would be worthwhile? It seemed to me that in the postwar world it might be useful to us from a military strategic viewpoint to have base rights, particularly in island positions, off the Eurasian landmass. So, I talked to General Clay about this with the proposal that rather than trying to get paid in cash for the surplus property which we wanted to turn over to wartime allies, that we get these base rights in payment, and thereby relieve the European countries of the necessity of the payment in cash or having long term debts which could hurt them in the postwar period. General Clay said, "Paul, that proposal is a nonsensical proposal. We are now the strongest country in the world, and after the termination of the war there will be a peace conference. At that peace conference we can demand whatever it is we want."
And I said, "Well, I don't think it's going to be
as simple as that." But General Clay would not go along with my proposal.
So, the proposal was dropped and we were left with the difficult problem of figuring out how to handle this impossible economic problem. After the two or three months period that I'm talking about, I think I had assembled maybe fifty people to work on this, but they were all unhappy with the fact that I wasn't paying them, that I was just borrowing them. So, I went to see Mr. Crowley and asked Mr. Crowley to sign an order establishing an office within the Foreign Economic Administration to deal with the problem of foreign surplus property disposal. That piece of paper having been signed, I would then take it over to the Bureau of the Budget and get a budget allocation, and then put these people on a payroll in this new organization. Leo Crowley sat back in his chair and said, "Well, you know Paul, I don't think I want to do it."
I said, "Why not?"
He said, "Well, you've done very well during these three months in getting this job underway and if you make a success of this, the credit will redound to Mr. Clayton. If you don't make a success of it, the blame will redound on Mr. Clayton. To be perfectly frank about it, I would like to have Mr. Clayton's job.
Therefore, I don't think I want to sign this piece of paper."
I said, "Well, Mr. Crowley, I understand your position and cannot go along with it, and, in fact, I hereby resign."
Mr. Crowley said, "But Paul, I don't want you to resign."
I said, "Well, Mr. Crowley, I have resigned."
He said, "Well, you don't understand the position. I am an important person in the Democratic party and I can guarantee you that if you resign, contrary to my will, you'll never again get any appointment in any Democratic administration."
I said, "But Mr. Crowley, I have resigned." I got up from my chair and walked out the door and left the building and got a taxi cab and went to the Pentagon to see a close friend of mine, whom I had known for years, by the name of Colonel [Guido R.] Perera. Colonel Perera was then working and had been working for some time on the project of establishing a U.S. Strategic Bombing Survey. He was on the staff of General [Thomas] Gates. General Gates, as I remember it, was in charge of analytical work for the staff and he had a very competent group of people working for him, including a unit under [Charles B.] "Tex" Thornton, then Colonel
Thornton. Within Tex Thornton's unit, Robert McNamara was a member of Tex Thornton's unit. I don't think that Perera was part of the unit, but he was working in a different unit under General Gates.
MCKINZIE: Did Leo Crowley intervene?
Perera, one night at dinner a few weeks before, had
asked me whether I might be interested in being considered. Having had this contretemps with Leo Crowley, I took the taxi cab to see Perera; he introduced me to Henry Alexander and to D'Olier and they decided that they did want me to be a director of the U.S. Strategic Bombing Survey. So, I signed on as a director that day. So, within two hours after having resigned and been told that I would never get another job with a Democratic administration, I was working on a quite different enterprise. That is how it happened that I switched from economic work to work having to do with the strategic bombing effort which I really knew nothing about at all.
MCKINZIE: How does one go about learning?
NITZE: Well, this was the interesting problem. None of the directors knew anything about air forces, bombing attacks, vulnerabilities anything about it at all. One of the other people that they chose to be a director was a man by the name of J. Fred Searls who was, I believe, executive vice president of the Newmont Mining Company in private life. He was one of the world's greatest geologists. He had personally discovered the main copper deposits in Africa, and was generally a very intelligent person.
Fred and I addressed ourselves just to this question of what questions were we really supposed to answer, and by what methodology could one answer those questions? How could one collect evidence which would determine the answer unambiguously? In order to understand what were the pertinent questions, we got hold of General Muir Fairchild, who was one of the American members of the Combined Joint Chiefs of Staff (Combined Chiefs of Staff organization between the British and ourselves). He was the clearest theoretician with respect to air strategy that the U.S. Air Force had. We got a great deal of guidance from Muir Fairchild as to what were the pertinent questions that we might address ourselves to. Then having decided as to what were the questions, the issue arose as to how one got evidence from which one could deduce unambiguous answers to those questions.
The next thing we did was Fred Searls and I decided that we better go over to Europe and spend some time with the Air Force people in Europe to see whether we could learn more about the evidence that was available from our side, the evidence that we might pick up as the front progressed, and to understand better the operation of the strategic part of the U.S. Air Force. The main strategic arm of the U. S. Air Force was the Eighth Air
Force, head quartered at High Wycombe. The General in command of the Eighth Air Force operations, the G 3 section, was General Orvil Anderson. Fred and I went to see General Orvil Anderson in his deep dugout at High Wycombe, and he briefed us on the operations of the Eighth Air Force; and I think that briefing took eight hours.
Orvil Anderson was one of the most interesting minds connected with the Air Force in those days. He was not a great believer in obeying orders from on high. He had great confidence in his own judgments as to what should be done. This was just the period when the Eighth Air Force was conducting a series of intense air raids against the Schweinfurt ball bearing plants and the losses were very high indeed. As I remember it, some thirteen percent of the planes were shot down on each one of the missions, and something over half the planes were shot up. Orvil Anderson recommended that in addition to his briefing it would be wise if one of us -and I was the one who was elected to do this should spend some time at a division base where the planes were actually based and flown from and where the detailed planning was done. I went to the headquarters of the Second Division, of the Eighth Air Force which was at a little town called Bury St. Edmunds where the officer in
command was a Colonel Fred [Fredrick] Castle. Fred Castle put me up in his little hut, and, so, I lived with Colonel Castle for perhaps a week and watched and listened to everything that he did. I'd rarely been so impressed by any single individual in my life as I was with the capacity and courage of this man.
The division had three airfields around Bury St. Edmunds, and as I remember, the number of maintenance personnel for those aircraft was 40,000. He was in charge of this entire operation and had to deal with all the administrative personnel replacement, all the running of this big operation. He also had to supervise the detailed planning of each mission and they were flying missions every other day or everyday; it was a regular operation. The orders would come from High Wycombe as I remember it, around 6 o'clock in the evening that was the general order for the mission. Then the division had to work out the division plan of operation, how they were going to do that. That planning work was generally done by midnight and then Fred Castle would go to bed for maybe three hours sleep; then the mission would take off at dawn and he would be up to supervise the taking off of the mission. Once a week he would fly the lead aircraft because he didn't feel you could command a unit unless you were doing the
same thing as your men. On top of all these things he had plenty of time to talk to me about his views on our mission, the questions that we should address ourselves to, and he had plenty of time to address himself to some of the more fundamental questions of the postwar world and what our problems might be in the postwar world. He had been in the Air Force as a young man and had then left the Air Force, joined the Sperry Gyroscope Co. and had become vice president of Sperry (later it became Sperry Rand). On the outbreak of war, he'd come back into the Air Force and because of this gap in experience they had made him a colonel, rather than what he would have been, a general. I think he was one of the most complex people I have ever seen.
The problems of the Eighth Air Force and that Second Division were really very great indeed. Each member of those crews had to fly thirty missions before he was relieved to go back to the United States. With the average loss rate being nine percent per mission, your chances of surviving the thirty missions were very small indeed. It turned out that if the crew survived their first mission, the chances of surviving the second were better than they were of surviving the first. So, the best crews did survive thirty missions even though the odds were very much against it. But you can't have
loss rates that high without having a very serious effect upon morale.
Then, later, I went back and talked again with Orvil Anderson, and he had made up his mind that the orders he was operating under were wrong. The orders from Washington and from General [Carl] Spaatz, who was in command of the European Air Force, which was over the Eighth Air Force, were that the important mission was for bombers to get to their targets and that the fighters, which were accompanying the bombers, should devote themselves to protecting the bombers and should not devote themselves to going after the German fighters. Orvil came to the conclusion that one couldn't tolerate continuing losses as high as nine percent. This would destroy the Eighth Air Force. Therefore, the thing to do was to change the strategy. The strategy should be to send the bombers out in order to cause the German fighters to rise, and when the German fighters rose, then to instruct the bombers to come back or scatter and for the fighters, then, to go after the German Air Force and shoot them down. Once we had won the battle against the German Luftwaffe, then the bombers would have a free ride and could carry out their strategic bombing mission. But you couldn't carry out the strategic bombing mission without first having
won the air battle. So, contrary to orders, he changed the directive and it was a total success. I think it took only three weeks, as I remember, for this new strategy to defeat the German fighter force and thereafter it was possible for the bombers to penetrate almost at will. General Spaatz still maintained the instructions he had gotten from Washington. I don't recollect the degree to which Spaatz knew what Orvil Anderson was doing. In any case, Orvil had it carried out.
Another part of the problem was to find out what was being done in the way of target selection for our bomber force and the British bomber force. The basic work on target selection wasn't done directly by the Air Force. It was done by a unit called the Economic Objectives Unit, which consisted of people recruited by the Foreign Economic Administration and sent to London and working with the U.S. Air Forces in Europe. This unit was headed by a fellow by the name of Pinkus, a fellow by the name of Deerborn, and Walt Rostow. I spent a lot of time with them trying to figure out how they were doing their job and helping the Air Force with target selection.
The Air Force had another board which they'd sent over from Washington to look at this problem of target
selection in conjunction with the British because there were deep differences of opinion between the Royal Air Force and the American Air Force. The person who was heading that board at the time was George Ball. There was a time when George asked me to go over to Paris to join him in some meetings between the British and Americans. General Portel, head of the British Air Force, had as his scientific advisor one Sir Solly Zuckerman. Solly Zuckerman was running rings around the Air Force people that he was debating with. Solly Zuckerman had been a professor of zoology at the University of Birmingham prior to becoming a scientific advisor for the Royal Air Force. Being an academician, he had all the "tricks" of academic debate at his command. I, having spent some time in graduate work at Harvard, understood these academic tricks of making the false appear true. I couldn't bear this after a couple of days of listening to Solly pulling the wool over people's eyes. So, I leaped into debate and pointed out to Solly that somebody, at least, understood what he was doing and what the illogicalities were and what the tricks were. The upshot was that Solly and I became great friends. I think we did help get things straightened out as best we could at that time.
Later it became clear that one of the principle
tasks of my particular section of the U.S. Strategic Bombing Survey (which had to do with all those targets which included machinery, machine tools and various things of that kind) was to determine the effectiveness of those Schweinfurt raids against the ball bearing plants. The question at issue was, how did you get a conclusive set of evidence which would give you an answer? After having worked with all these target people, intelligence people, photographic intelligence people, and Air Force people, I thought I began to understand something about it, but it was going to take someone who would devote absolutely fulltime to this to do it right. I didn't have anybody to do that. Where do you find such a person?
I asked the Army to run their personnel cards through a computer and pick out all those cards of people who had, a) a Ph.D. degree, and b) knowledge of Germany. The reason for those two criteria being selected was, one, that if you were going to get all this data, you really had to get the Germans themselves to get it for you. After we captured Schweinfurt we enlisted all the people who worked in those Schweinfurt plants to put together detailed data, to run their computers and get the relevant data. But you needed someone who understood German to do that. And, two, you
needed somebody who had an instinct for and some training in research not in any given field. It didn't make any difference what the field was because nobody knew anything about this particular subject. They had to have a mind which was capable of research. That's why the Ph.D. criteria. The Army came up with twenty-five names one of whom was a man who had been Vincent Astor's butler. But going through this list of twenty-five names, it was perfectly clear that soma twenty of them would not be suitable, but there were four or five who looked like they might be suitable. In the four or five names there was an Army sergeant by the name of Philip Farley, who was in charge of the post office, I believe, at Bury St. Edmunds. So I asked Sergeant Farley to come in and see me. He came in and I spent a day or so with him and then asked him whether he'd be interested in this kind of a job; and he was. I put him in touch with the economic objectives people in all these other groups and asked him to concentrate only on that ball bearing problem, which he did. It became clear within a week that he knew more about this than I did or anybody else after a week's study of it. So I hired Phil Farley.
In the meantime, my associates in Washington decided I needed assistance on this and they recruited
three vice presidents of the leading ball bearing companies in the United States, one being the Norman Hoffman Ball Bearing Company; another being the Hyatt Roller Bearing Company, which was a subsidiary of General Motors; and I forget what the third one was. They also recruited three senior colonels in the engineers corps. They sent these six men over to help me in the ball bearing survey not knowing that I had chosen my man who was a sergeant. The question at issue was what do you do?
The senior of these three colonels was a Colonel Anderson. I got a hold of him and told him what my problem was: that he, being a colonel, would have seniority and would be in command of the unit, but the person that I had confidence in, with respect to the intellectual questions involved, was Sergeant Farley. I wanted him to back Farley, not to do anything on substance which he hadn't cleared with Farley. In fact, I wanted Farley to do the substance and he to be in command. Anderson said this was fine, except for one thing and that was, that it wouldn't work if Farley was still a sergeant because they couldn't eat in the same mess and soon I would have to get Farley promoted to second lieutenant. So then I addressed myself to getting Farley promoted to second lieutenant. This was
finally accomplished. So there we had the team: Anderson in charge, two other senior colonels, and the three vice presidents and Farley. They were up at the front lines to get to Schweinfurt as quickly as anybody could so the records wouldn't be destroyed.
It turned out that the Army forces decided to go to both sides of Schweinfurt and not capture Schweinfurt at all. So, Schweinfurt was left between the advancing American columns. Anderson decided that he would go in and capture Schweinfurt, which he did, with his little fifteen man team. Then, having captured Schweinfurt, he and Farley then went to the offices of these three big ball bearing manufacturers in Schweinfurt and told them from that moment on that they were not producing ball bearings, they were producing records for the U.S. Strategic Bombing Survey. He told them exactly what kind of data to collect. They finally got complete records on every ball bearing produced in Germany during the course of the war. They got complete records on where they all went and whether or not there was any delay caused to the end item by virtue of failure to deliver on time. They got a record of what had happened to each one of the machine tools used in producing ball bearings; how long they were out of service; how they'd been repaired; and where they were put back and that
sort of thing. Just a voluminous computer run of all this material.
The upshot was that they could demonstrate down to the last ball bearing that not one end item of German war production had been delayed a single day by virtue of attacks on the ball bearing plants. They could further demonstrate that the cost to the Germans, having made that so, was really quite high. They had to do a lot of things build underground plants and this, that and the other but it was possible to offset the damage within the time that they had. This was one of the essential questions we had to answer as to whether or not the concentrated attack on one essential component of an industry would, in fact, bring that industry to a halt. Clearly the answer was that if the repair times and the amount of effort necessary in repairing and relocating and dispersing and putting underground was sufficient in the time available to them, then you didn't get the result, or if you imposed some cost on them, you didn't produce the result that you were counting on from your air attacks. Therefore, it was essential in designing this kind of an attack to attack something where the difficulty of repair and the repair times were so long that they couldn't do it.
MCKINZIE: Were your conclusions questioned by anyone
NITZE: Well, they were questioned but that's why we had to get unambiguous data in such fine detail that it couldn't be questioned because otherwise people wouldn't have believed it. Here in this ball bearing thing we did get enough data so that nobody could question. Well, I just tell this story as an example of the kind of thing one had to do.
MCKINZIE: You went to Europe to learn enough about strategic bombing to ask the right questions; then you had to go out and find enough unimpeachable data to be able to answer them. An appropriate question in this case, obviously, was whether or not air strikes crippled in the way planners of the air strikes anticipated they would?
NITZE: Well, as I've already indicated, attacks on these small segments of an industry like ball bearings and they also tried attacks against grinding wheels neither of these worked at all. When it came to the attacks on the synthetic oil plants and the related chemical plants, those attacks were much more successful than the planners had anticipated. They didn't get at those attacks until after General Orvil Anderson had won the battle against the German fighter forces. When they did
get at those attacks, they were immensely successful.
The reason was that when one creates damage to a synthetic oil plant that's very sensitive equipment and big scale equipment and it's also flammable. To repair a synthetic oil plant, that has been damaged by air attacks, takes you six months and there aren't so many of these plants. It was impossible to destroy almost all of them. What hadn't been realized was that the same plant that produced synthetic oil products, like gasoline, were also the plants that were used for producing nitrogen products and solvents. These nitrogen products and solvents were necessary for production of explosives. So you've got much wider effect from the destruction of these synthetic oil plants than had been anticipated. It was those attacks which were really crucial to bringing down German ability to fight a war and not the attacks against even the air frame or the aircraft engine plants. Those didn’t work that well.
MCKINZIE: Was a question ever asked about the effect of air strikes upon the morale and efficiency of workers?
NITZE: Yes, but it was asked in a broader context, and that was, what were the morale effects in general of the air attacks? The director who was in charge of that
segment of the survey's work was a man by the name of Rensis Likert who had run that part of the University of Michigan where he concentrated on public opinion surveys and detailed interrogations to go along with the public opinions. And Rensis set up an absolutely excellent team of people to go into these questions and they did a lot of interrogations and a lot of polling. The conclusions that they came to were that even the big city raids, such as the raid on Hamburg that burned down most of the city and, I think, killed 48,000 people, was one of deep immediate shock, but that shock lasted only a short period of time. Within six weeks, is my recollection, after the attack on Hamburg, the industrial production of Hamburg was as great as it had been prior to the attack. Part of the reason, therefore, was that Hitler had a very effective gauleiter in Hamburg by the name of Kauffman, as I remember, and he really organized and mobilized the remaining people in Hamburg to survive and to get going. So, in part, it was a function of leadership as to what the nature of the effect was. As one looked at the more general question of the confidence of the German people in victory, clearly these continuing attacks did have a deleterious effect on Germany's overall morale. When you related it just to the productivity of workers there, you could not find
that it had serious effects.
MCKINZIE: As these conclusions began to materialize, did you find people getting nervous in the Air Force?
NITZE: They were nervous about what our overall conclusion would be as to the relative contribution of the Strategic Air Command to the victory in Europe. They'd hoped that we would come out with a more unambiguous statement, that this was essential. What we tried to do was put, as best we could, calipers upon what was true and what was false this was true, and that was true, and this was untrue and so forth so that you could sort out fact from fiction rather than making broad generalizations. They also wanted to know the facts, at least those that we were with at that time. The problem became more intense after the Pacific survey.
Clearly, the person that we most wanted to get access to was Albert Speer who was in charge of War Production in Germany during this period and we wanted to get from him how it looked to him; what where his worries. This came out to be the best evidence you could get. Even more important was, if we could get his own records as to the decisions he made and why. I had some boys particularly assigned to the job of trying to find out as best they could where Speer might be and try to
capture him. The fellow in charge of this team was a Lieutenant [Wolfgang G. Sklarz] and he had been a parachuter and had jumped into France and broken his leg during that D Day parachuting but had survived and had then been assigned to us because he couldn't do anything else. He called me up one day and said he had found Speer at a castle called Glucksberg Castle near Flensburg. So, I got a plane and flew to Flensburg to see Speer. Henry Alexander and George Ball and [J. Kenneth] Ken Galbraith and some of the other directors joined me. This was during the period after the Germans had surrendered but they had been permitted to maintain an enclave in Schleswig/Holstein and around Flensburg. There was a ship in the harbor at Flensburg called the Patria and on that ship were the Russian team, the British team, and the American team. The whole operation was under the command of an American General, General Rook, and everybody was assigned a cabin. The British were assigned to a cabin, a Russian and an American, British, Russian, American, very interesting operation.
For ten days we motored out to Glucksberg from Flensburg every day and spent the entire day interrogating Albert Speer. Speer could speak English fairly well but obviously many of his records were in
German and sometimes he liked to speak in German. His secretary did the translation and the transcription of the record of the interrogation. It became evident right away that Speer was concerned that he might be declared a war criminal. His best defense was to collaborate fully with us and so he leaned over backwards to collaborate fully with us. He not only told us, I think honestly, the answers to the questions that we had in mind but also directed us to where we could find the pertinent records of what he had done during the period, including his personal reports to Hitler from time to time. Many of these were in a safe in Munich. He gave us the keys to the safe and combination, and we sent somebody down to get these records. That was a fascinating ten days where you could really get the substance of the answers to most of the questions that we had in mind.
After ten days of these interrogations General Rook got a hold of me one evening and he said, "Paul, if you've got any further things you want to find out from Speer you'd better get him tomorrow, because I've got orders that the day after tomorrow I'm to liquidate this enclave and arrest all these people." So then I got a hold of my fellow USSBS directors and said, "What do we do? We've got one more day to make up our minds what
further questions we want to ask Speer." I forget who suggested, "Well, you know there's really a deeper question, and that is, should we continue to ask him about the last days of the Hitler regime. It was clear he had left just a few days before Hitler committed suicide and he participated in all those last days of the Reich. So we decided to hell with business, this is more interesting. We had worked hard and we thought we'd really covered everything that was really important. So we got Speer that last day to tell us about his life with the Nazi party, particularly concentrating on the last days of the Hitler regime. It was an absolutely fascinating story.
One of our group was a Captain [Burton H.] Klein, who had run and subsequently again ran the economic statistics unit in the Department of Commerce, very first class economist. In part because of his race he had deep suspicion of the Germans. Burt Klein couldn't bear this thing that Speer was telling us about how he thought Hitler was such a great man and then he'd gotten discouraged with him and then later again thought he was a great man and why he'd done this, that and the other thing. Burt got mad at Speer; he said, " I just can't understand how you could have continued to collaborate with these dreadful people. You've described how
dreadful they are."
And Speer said, "Well, I can well understand why you don't understand it. But you've never lived in a political situation similar to this, where everybody is suspicious of everybody else and where top people, each one of us, had to have our own private armies in order to defend ourselves against the other man and where it is a jungle. You've never had to live in that; I have."
Frankly, these memorandums of conversation later came available to Trevor Roper, and that book, The Last Days of Hitler, was originally based upon these interrogations. He subsequently used them and interrogations of his own. This was the foundation for that book, The Last Days of Hitler.
MCKINZIE: Did the ten day conversation you had with Speer confirm pretty much what you already knew? Did you learn anything really new from talking to him?
NITZE: Well, I think he was the first one who really pointed out to us the side effects of the destruction of the oil refineries and associated chemical plants. I don't think we had, up to that time, realized what the side effects were. I have a hard time in my mind sorting out what we knew before and what conclusions we came to after we talked to him.
MCKINZIE: Was he still a proud man?
NITZE: Yes, he was a proud man. He was particularly proud of one episode which occurred just in the last weeks of the war. He had received an order from Hitler to blow up all the bridges and to leave a scorched earth; not only the bridges but everything else. He decided that he would not execute that order and did his best to see to it that others didn't execute that order. He probably had, thereby, contributed to making it possible that Germany could recover. Otherwise, it would have been terribly difficult for Germany to ever recover. This is what he really put his greatest pride on.
I started to read Speer's book, but all the things that were in it were more or less what he had said during the ten days and I found it not worthwhile reading something I already knew about.
Shortly after this period, I was in Berlin at the time of the Potsdam Conference. The reason I was there was that Speer had an economic and planning section which was run by a man by the name of Rolf Wagenfuehr and Speer said that the records of this planning section would be the best records to give us everything we needed. But Wagenfuehr had disappeared to Berlin and that's why I went to Berlin to see whether I could find
Wagenfuehr. We got to Berlin and found that Wagenfuehr was in that section of Berlin which the Russians occupied. The rumors that we got were that Wagenfuehr was considering making a deal with the Russians. So, we had to find him and get him to collaborate with us and we finally got his records from him. That helped.
I don't know what ever happened to the man. I don't know whether we permanently convinced him or whether he eventually went over to the Russian side; I don't know. But while I was in Berlin on that operation, I got a message from Washington about 8 o'clock one night saying that I was to be at the Frankfurt Airfield at 6 o'clock the following morning and that a plane would then take me back to Washington. The message told me nothing about the purpose of the trip. I got my jeep driver and we started off down the autobahn, drove all night and finally arrived at the Rhine airfield 15 minutes ahead of time and there was the plane. I got aboard the plane and said, "What's this all about?"
They said, "We've been told to pick you up here."
I said, "Where do we go next?"
They said, "We go next to Prestwick, Scotland." We came down in Prestwick, and to and behold here was Henry Alexander and George Ball and Kenny Galbaith, and, I
think, Orvil Anderson. So there were the five or six of us being flown back to Washington and none of us knew what for.
When we got back to Washington, we were told to go to General Arnold's office. General Arnold said that it was his view that we had learned something about details of where air attack was effective and where it wasn't. He thought that perhaps some of the information we got in Germany might be applicable to the air attacks against Japan. What he'd like us to do is to go through the analysis that had been done by the Joint Strategic Target Selection Board in Washington, which was the basis for the air attacks on Japan, and see whether things stood up against the kind of analysis that we learned to make in Germany. And we said we would.
So we spent some time working with them and came to the conclusion that there were, in fact, very great differences between what we would recommend in the way of strategy of an air attack against Japan and what was the basis for the current plan. You couldn't really make the point clearly unless you really addressed yourself to developing an alternate plan in detail. That job was assigned to me. So I got up this alternate plan.
MCKINZIE: In collaboration with these other people who came
back with you?
NITZE: No, by and large I did it myself. They had other things to do and they went back to Germany, as I remember, and I was left to do it. That's my recollection.
I can remember a day, the fourth of July. We had a country place in Long Island and Phyllis, my wife, was there with the children. She said, "For goodness sakes, Paul, at least get the fourth of July off and cone up to Long Island for a while." So I went up to Long Island to find that Phyllis had planned a picnic on Jones Beach with some friends, and I'm busy writing this thing on long sheets of yellow paper like this, and I said, "All right, I'll go along but I will continue to work on this on the beach." I continued to work on it but then I would want to go swimming or something or other, so I gave to Phyllis the pieces of yellow paper and she put them in her purse. Then we returned from Jones Beach and we passed by the drug store in Glen Cove, Long Island, and the children all said they wanted to have an ice cream soda. So we went to the soda stand, got the children ice cream sodas and then we went to our house. Then I asked Phyllis for the pieces of yellow paper. She opened her bag and they weren't there. I said, "Good God." We retraced our steps, went to the drug
store in Glen Cove and there at the foot of the pedestal was this little heap of yellow paper. I retrieved the yellow paper and everything was all right. Boy, was I scared!
But, in any case, I finally got that worked out and came down to Washington to show it to General Arnold. He said, "Well, I don't know what to do about this." Finally he said, "Well, I know what I'll do, I'll get General Spaatz to head a board and to decide between your plan and General Sampson's plan, head of the joint Strategic Target Selection Group. So we had a hearing in a great big room with all kinds of people sitting around, and Sampson held forth in favor of the current plan and I held forth in favor of our plan. Spaatz finally decided in our favor and said that I should work with Sampson in redoing all of Sampson's work. So I did that, and that took some time. I think the new plan went into execution August 1.
The basis of the plan was the Navy had pretty well sunk most of the Japanese ships either through submarine or through mine attack. The Navy felt that they could with assurance either mine or sink by torpedo any ship moving along the coastline of Japan. So Japan was isolated, really, from the standpoint of seaborne shipping and inter coastal shipping. The remaining
means of communication were really the railroads, and it seemed to us that one could destroy the tunnels through such rough terrain and particularly a tunnel between the island of Kyushu and the main island. In order to do that, one needed a penetrating, guided bomb to go into the surface of the harbor or bay and blow up the tunnel under the bay. The Air Force thought they could very rapidly get such a weapon designed out there. Then you would have "piece mealed" Japan not just to the island but to portions of the island. It wasn't necessary to continue to burn down the Japanese cities; enough of that damage had been done and there wasn't any point, really, in trying to further destroy the oil refineries and so forth and so on. You could just interrupt the communications. That would be very effective.
At that point, I talked to Fred Searls and described to him what we had proposed. Fred Searls said that he was very much concerned about U.S. planning with respect to the endgame of the war against Japan . The Air Force was proposing to defeat Japan by blockading and sinking all the ships and so forth and so on. The Army was proposing to defeat Japan by invading first Kyushu and then the Tokyo plain. The State Department was planning to win the war against Japan by persuading the Russians to enter in the war. The Manhattan Project
was proposing to end the war by a nuclear bomb.
Frankly, I hadn't been privy to the Manhattan Project even though while in the procurement business I pretty well knew what was going on because we'd get these orders to buy forty thousand flasks of mercury, and two thousands tons of graphite of a particular grade, and so much zirconium, and so much beryllium. And we asked, "What's this all for?" Nobody knew what it was for; we were just told to do it. Then I found Will Clayton deep in negotiations with the fellow who ran the Kotanga Mining Company negotiating a purchase for the uranium from the Belgium Congo. I found that Vice President Wallace came into my office one day and asked Dr. Bateman, "Where is uranium produced in the world?" He described it and said, "What's it used for?" He described its commercial use which was almost zilch. Why did Wallace ask a question like that? So, we were sure something was going on. I didn't know what it was, but Searls did; he knew exactly what was going on. Fred said that he didn't think the device was going to work, but it was going to be tested in a few weeks. He didn't think it would work and he hoped it wouldn't work, but it might. In any case, that was the Manhattan Project.
He said, "This is absolutely ridiculous to have
each agency competing for the honor of winning the war. We ought to have some economy of effort, concentrating on a single plan," and he said, "I think your plan is the way to do it." He said, "How long do you think it would be before he Japanese would surrender under your plan?"
I said, "Well, we've discussed this. I've discussed it with the other directors of the survey and we believe that by the end of the year, we don't think the Japanese could last out longer than," I think I probably said, "by March of '46."
MCKINZIE: Did you have loss estimates built into that?
NITZE: Well, the loss estimates were small. We weren't having any substantial losses to our submarines or our mining attack and the air attacks involved here were not that dangerous as some other kinds of air attacks. Searls said, "Well, I will take this up with Jimmy Byrnes and Jimmy Byrnes was persuaded that Fred was right. So Jimmy Byrnes could fix it up with the President.
Mr. Truman, at that time, had a military adviser in the White House by the name of Admiral [William D.] Leahy. He talked to Admiral Leahy about it and Admiral Leahy said, "Mr. President, you can't make that decision
without getting the military advice from the joint Chiefs of Staff, or shouldn't make this decision without getting the advice from the Joint Chiefs of Staff."
The President agreed and referred the question to the JCS. In the meantime, I talked to Jim Forrestal about it, and Jim Forrestal said, "There's a bug in your plan."
I said, "What's the bug?"
He said, "Well, we've got eleven million men," I think was the figure, "engaged in the Pacific force and only a small portion of that eleven million men will be utilized in your plan. You can't keep eleven million men just sitting on their behinds without having the morale falling apart, and you can't pull them out because you can't be certain that your plan will work."
I said, "Well, at this stage of the game, the important thing is not just the surrender of Japan but what happens in the postwar world. It would seem to me that it would be useful if we were to make a landing on the Chinese mainland and send a unit up to divide those Japanese forces which are south of a line leading to Manchuria and those that are in Manchuria to the north of that line. If you divide the Japanese forces in two that way, you will be in a better position to conduct the disarming of the Japanese in China, thereafter. And
[you will] be in a better position to see to it that the future revolution of China is favorable to our interests."
Jim said, "Well, I'll see whether the Chiefs will address themselves to that one."
The upshot of that was the Chiefs, I believe—although I've never been able to find the telegrams since sent a telegram out to General MacArthur and to General Albert Wedemeyer out in the China theater, asking their views of this proposal. Wedemeyer turned the telegram over to Joe Alsop, who was advising him. Either Joe or Wedemeyer, I forget which, talked to Chiang Kai shek about it. Chiang Kai-shek misinterpreted the scheme as being a scheme to join U.S. forces with the Chinese Communist forces in Yunan. He took a very dim view of all of this, and sent back a message, which Joe Alsop also tells me he drafted, saying that he, Wedemeyer, thoroughly disapproved and what's more, he consulted with Chiang Kai-shek and Chiang Kai-shek disapproved too. So the chiefs then considered this question from that kind of a background. There was one other important factor in their decision. Earlier, the Air Force very much wanted to get authority to create the 20th Air Force, which would be an "independent command" and which would then
bomb Japan from the air field to be built at Chungdu and various places near there.
Marshall was basically against this but finally was persuaded by Arnold to accept this proposal. Arnold made one condition [to the effect] that "all right, I'll agree to this but goddamit, you're going to back me on any other question of general strategy which comes up." Even though we talked to Arnold about this plan and Arnold, I'm convinced, was wholly in agreement with this plan and also agreed with our estimate as to when it could be effective, that he felt disbarred from raising the issue with the chiefs. Marshall and King, the navy member, both thought the main lesson from the European theater was that you didn't really get the boys down until you captured the capital. You had to capture Tokyo in order to really have a decisive victory. So the chiefs unanimously gave a negative answer to the question President Truman had asked them. President Truman was left then with the alternative of using atomic weapons against Hiroshima and Nagasaki or of authorizing the attack against Kyushu on the Tokyo plain. As I remember, the estimates were that we would suffer 500,000 casualties.
When we got into Japan it turned out the Japanese had more forces in Kyushu, more aircraft and more fuel
available for those aircraft than General MacArthur's intelligence had credited them with having. It might very well have been that the casualties would have been as high as a million. It is my belief that at that time when Mr. Truman made the decision, he had in mind estimates of the order of 500,000. Between those two alternatives it seems to me that Mr. Truman made the only possible decision. If the alternatives had been different, if the chiefs had said, "We're prepared to have some delay in the peace without invading the Tokyo plain, but with the high probability that we will get a surrender in time;" if that is the choice versus using the atomic bomb, I think Mr. Truman might well have made the other decision.
Regarding this entire episode that I described, I've tried to get the telegram of the chiefs or any other records and I haven't found any. I don't believe there's anybody else, except Fred Searls, who remembers a damn thing about this. Nobody's memory is perfect, but Joe Alsop does remember that Wedemeyer received the telegram and he remembered drafting the reply, but we can't find copies of it any of the Pentagon historical sections. I've tried.
MCKINZIE: Where did this leave you after having made a proposal which wasn't favorably considered?
NITZE: What happened right after that was that the atomic weapons were used and Japan surrendered. Mr. Truman, within a few days, called in Mr. D'Olier and said that he wanted the U.S. Strategic Bombing Survey to make a similar report about air power, and not just strategic air power, in the Pacific Theater. Henry Alexander and I went with Mr. D'Olier when Mr. Truman asked to see him. Mr. Truman said that there were two other questions which he wanted us to address ourselves to. One was the question of why was it that the Japanese attacked at Pearl Harbor; why did they make that decision? Secondly, how and why was it that they made the decision to surrender, including the question, why didn't they make the decision earlier? Thirdly, he wanted us to investigate the effects of the atomic weapon at Hiroshima and Nagasaki. Fourth, he wanted us to think about and make recommendations as to the postwar organization the optimum postwar organization of our armed services in an age during which nuclear weapons existed.
It turned out that most of the people who worked on this European part of the survey had had it, and didn't want to continue with the responsibility. Henry Alexander wanted to get back to J.P. Morgan and Company and George Ball didn't want to continue with it. Ken
Galbraith was interested in coming out for a month but not more, and Rensis Likert didn't want to do it, but he said he would supply a fellow by the name of [Burton R.] Fisher whom he though was absolutely first class and he was first class to do the same kind of a job. So I was the only one who was really prepared to work at it full time.
So, with Mr. Truman having made this request and we having accepted the responsibilities, word went down to the Operations Plans Division in the Army that they were to issue orders to me and set it up so we could do this. I spent some time trying to recruit a new organization and particularly to get the necessary Japanese language interpreters and translators. I figured we needed at least 250 Japanese language people. We needed the people who knew the most about intelligence vis a vis Japan. So I went to see General Bissell who was in charge of army intelligence and made this request to him. General Bissell said, "General MacArthur has first priority in all these things. He is going to be the supreme allied commander in the Far East and we're short of such people and you can't have any." I was absolutely furious. But then I went around Washington and talked to the various other people, including a very good person, Colonel McCormick, who was a special
intelligence operator. McCormick turned over to me all his fellows very good people and I got from the Foreign Broadcast Intelligence people all their interpreters, and I got from the Navy people that they'd sent out to their school in Colorado, Japanese language officers. Within three or four days I got 250 interpreters and translators despite General Bissell's opposition and put together a team; it was not a full team at that time, but it had the elements of a team. Then the Operation and Plans Division of the Army gave me orders to proceed to Tokyo. But they were stamped valid only in the zone of the interior, and I said, "What does that mean?"
They said, "Well, this hasn't yet been coordinated with General MacArthur." "If I were you," one fellow said, "I wouldn't go to Tokyo until you get amended orders which indicate that it has been cleared with Mac Arthur because Mac Arthur doesn't like to have anybody come into his theater without his permission." So I proceeded to Guam and waited for further instructions for three or four days. They didn't come. I had sent ahead to Tokyo, General Grandison Gardner, and Lieutenant Commander Walter Wilds of the Navy, to try to get some headquarters and get them set up. When General MacArthur's people found these two fellows were over
there without his permission, and that I wasn't there, he (MacArthur) was sore about it. So I got word that General Mac Arthur wanted me to report, right away. So, I took the next plane from Guam to Tokyo. I remember flying in over Tokyo Harbor on a most beautiful kind of a pale blue day light clouds, a small island rising out of the harbor supporting very Japanese looking pine trees, Fujiyama on the left and coming to the conclusion this was the most beautiful country I'd ever seen. Then we got down to the airfield, and close to it we could see all these figures. I thought it was the most beautiful island populated by the most hateful of all people. Like all Americans at that period, I had deeply felt anti Japanese prejudices as a result of Pearl Harbor.
After I came down I went directly to General Mac Arthur's office. General MacArthur greeted me and began talking to me about air power and its role in the Pacific theater. He held forth for four hours. In various points during this presentation of Mac Arthur's, I found that there were points that I disagreed with, so I raised my hand and asked whether another interpretation might not be right. MacArthur was a little annoyed at having his presentation interrupted, but he listened. Then he said at the end of this, "I
want to ask you three questions. The first one is, when you're in my theater, do you propose to accommodate yourself to the orders and the directives which maintain in this theater?"
I said, "of course."
He said, "Well, the second question is, do you propose to have better treatment than the other people in my command?"
And I said, "No, we would hope to have equal treatment as the other people in your command."
He said, "Well, the third question isn't really a question, it's advice." He said, "I don't want to see you again, and I hope you so conduct yourself that you don't have to see me again. But if you feel yourself getting into trouble, then I want you to come and see me before you really get into trouble."
And I said, "All right, fine. I understand; I'll go about my business."
Then two days later I got word from the chief of staff that General Mac Arthur wanted to see me. So I went in to see General MacArthur. This time his briefing took six hours; he told me about the role of air power in the Pacific theater, and he had incorporated all the points that I'd suggested by my questions in the first meeting. I was delighted with
his analysis of the role of air power in the Pacific theater at this point. So General MacArthur and I, at that point, became great friends. I was invited to his house for dinner from time to time, became a great friend of Mrs. MacArthur's, and was a member of "the group" all of a sudden.
MCKINZIE: Any idea why he launched forth at such length on air power? Did he feel threatened by it?
NITZE: No, I don't think he felt threatened by it. He was totally cognizant of the importance of the role of air power in that technological age. What he did want to do, however, was to have the air power in this theater subservient to him, and his relations with General Richardson who was in command, I think, of the Fifth Air Force which was supporting him, were very close indeed. And Richard son was his subordinate, and ran the Fifth Air Force the way MacArthur wanted it to be done. Richardson did a very good job of running it; it was a hectic operation. My regard for General Mac Arthur as a military man was very high indeed. He had a sense of strategy and tactics and he had a capability for leadership of his men. That's why he was such a successful commander. Then a month or so later, General MacArthur called me in and said the man whom he'd had in
mind to run the Japanese economy for him had gotten into a controversy with the White House and the White House would not promote him to a General's stars. This fellow, who had in private life been an important textile manufacturer, didn't want to stay in the Army under those circumstances and so he was leaving. So MacArthur needed someone else to head up for him the running of the economic part of his plan and dealing with the Japanese economy. Would I do that?
In the U.S. Strategic Bombing Survey team in Japan we had three military sections: Army, Air Force, Navy. Orvil Anderson ran the Air Force section, and I forget the name of the Admiral who ran the Navy section. This General who ran the Army section had been in charge of all our artillery operations for MacArthur during the Pacific campaign. A very nice person, he was not the most brilliant person, but very honest and direct, and a straight forward person. So after MacArthur asked me about this, I turned to him for advice. I said, "You've worked with MacArthur; tell me about this. Is this something I ought to do or not?"
He said, "well, if I were you, what I would do is to tell General MacArthur you would do it, but only on certain conditions. The first one is that you would like to report directly to his chief of staff, not
through the G 1, 2, 3, 4, or 5. If you report through all those Gs, your life would be so complicated you couldn't get anything done."
I said, "Yes, but I also have some concerns that one man can't do this job and I would insist, independently, that I be allowed to go back to Washington and recruit four or five people to help me. A third point is, I don't think it's possible to run the economy of Japan except in coordination with the U.S. general Far Eastern economic policy. Therefore, one ought to have someone back in Washington who is backstopping the operation so that you know what's going on in Washington, so you can properly coordinate the Japanese effort with the rest of the U. S. policy."
And this General chap said, "Yes, I think that makes sense."
So I went back to General MacArthur and said, "Yes, I'm prepared to do this on these three conditions."
MacArthur blew up. He said, "I have absolutely no use for Washington at all, including the President." That's my recollection of what he said. "Nobody in my command is going to have any relationships between anybody in Washington. And what's more, I don't think you need additional people. I asked you whether you would do it; you can use other people in my command, but
you're going to go back and recruit other people that I don't know. I will not accept your conditions."
I said, "Well, General MacArthur, I don't think one can make a success of dealing with the Japanese economy unless you get somebody's help in the U.S. and support for this, that and the other thing."
General MacArthur said, "Don't you worry about that. U.S. industry will bring sufficient pressure upon President Truman so that he'll have to do the things that are right."
MCKINZIE: What did you say when General MacArthur said that to you?
NITZE: Well, what I said was, "General MacArthur, I meant the conditions that I said, because I really don't want to do it except under those conditions."
He said, "All right, I understand."
That didn't really hurt our relationship. I continued to see General MacArthur after that period, and the person that he selected to do the job was my General. He took him instead of me. The fellow didn't do a bad job; he did a perfectly adequate job.
MCKINZIE: What kind of cooperation did you get from General MacArthur's staff in conducting the work of the Strategic Bombing Survey?
NITZE: Well, it was varied. The chief of staff was first class, and the G 3 was an outstanding man. One of the things that I found was generally the best person you could find in the staff was the G 3. The G 2, Willoughby, was a most peculiar character. As I remember it, Willoughby had been a Colonel Witzleben and changed his name to Willoughby. He had fought on the German side during World War I. He was a peculiar kind of a Prussian, romantic, intelligence operator. He wasn't uninteresting to talk to. My relations with him weren't bad at all, but I just never had any confidence in his soundness. Some of the other people that were on Mac Arthur's staff were kind of right wing sycophants colonels in his office. But on the other hand his ideas were not so with respect to Japan. He was very open minded and very liberal in his view. He was a most complicated kind of person. But during that entire period in Japan my relations with General Mac Arthur were first class, and by and large with his staff they were first class. I have no complaints to make about it at all.
But to go on with the story of the four questions which Mr. Truman asked us to address ourselves to, in addition to the main work of the survey. The first question that I addressed myself to was the question:
why did the Japanese attack at Pearl Harbor? It seemed to me that the key person to interrogate on this subject was Prince Konoye, who had been Prime Minister prior to the time that General Tojo became Prime minister, and who had resigned maybe three or four months before Pearl Harbor. So, I got Prince Konoye, who had his own assistant who acted as his interpreter, to come in, I got no satisfactory answers from Prince Konoye at all after several sessions of interrogation. Then one day this assistant came into my office in the Dai Ichi Building and asked to see me. He said that Prince Konoye had the feeling that he had "not done well" in his interrogations. He, Prince Konoye, felt that he did understand the information which I was seeking, and he thought that the most relevant information with respect to those questions was to be contained in his, Prince Konoye's, personal diary. He had a copy of that personal diary with him, and he was prepared to turn over the diary to me and he thought I would find in the diary the correct answers to the questions I'd been asking.
So, I sent the diary down to the translation people and had it translated. It was indeed fascinating. I can remember very distinctly one episode in the diary which took place while Prince Konoye was Prime Minister,
and this report is on a discussion that he had with General Tojo about the planned attack on Pearl Harbor. Prince Konoye made the point that the plans all dealt with the initiation of a war with the United States and he anticipated very great successes that one could have initially. The question remained about how was one going to terminate such a war with the United States? Did General Tojo have in mind that it was feasible to invade the United States and force a surrender. General Tojo said, "No, that would be impossible."
Konoye said, "Well, how do we end the war?"
Tojo then referred to an episode in connection with the war of 1905 in which the same question had arisen in the Imperial Council. The decision by the Emperor had been that they should consult Prince Hito who was the senior general senior elder adviser of that time. They consulted with Prince Hito, and the Prince said that the thing to do was to go to war with the Russians in Manchuria. The way in which the war would be terminated was through the intervention of the important third party in the area, the United States. If the Japanese military were sure that they could make initial gains, then it should be feasible to negotiate a settlement through the good offices of the United States which would maintain for them the essential elements of those
gains; they had followed Prince Hito's advice and had been successful in the war of 1905. Konoye said, "But this situation is different than the situation of 1905. If we attack the United States at Pearl Harbor, there will be no important neutral to intervene."
Tojo said, "That is correct, and I have worried about that." He said, "The facts of the matter are that by December 31, 1941, we will no longer have sufficient oil reserves or scrap iron reserves to enter the war under any circumstances. If we don't enter the war, the war will be won by one side or the other. Whoever wins the war, that alliance will be number one and number two and so forth. We will be number three or four; we will be a second rate power. So you can see clearly what the consequences will be by not intervening, not attacking Pearl Harbor. It isn't quite possible to be sure of what will happen if we do. If we have these initial successes, all kinds of things that are not foreseeable today may happen so that the war may conclude on a basis in which the Emperor will be in the distinguished position in which he should be." Konoye did not go along with the plan and he resigned. That was the clearest exposition of exactly what it was I wanted to know. This was written contemporaneously with the discussion. So I think we did get the essence of the
answer that Mr. Truman wanted on that question, which we can then back up with all kinds of details about what they really anticipated in the initial attack, and so on and so forth.
Then the second part of the question, why did the Japanese surrender when they did, and not earlier? There, it seemed to me, the most important person to interrogate was Marquis Kido who was head of the Imperial Household and the Emperor's principal adviser. So I got in to see Marquis Kido and interrogated him for a couple of hours. I remember I asked him the question, "When did it first occur to you, or seem to you, Marquis Kido, that Japan had lost the war?" All I got was unintelligible mish mash. This Navy language officer was interpreting for me, and he turned to me and said, "Mr. Nitze, you know if you ask the question that way you'll never get an answer."
I said, "Well, how should the question be asked? You know what it is I am trying to get at."
Then he said, "Well, I would phrase the question by saying, 'Marquis Kido, when did it first occur to you that the Will of Heaven demanded that the Emperor seek a different course?'"
I said, "All right. Ask the question your way and see what happens?"
The upshot was that marquis Kido then gave me, in the most precise, accurate detail, exactly what I wanted. He said, "This first seemed to me to be necessary after the Battle of Saipan." Then he described at length his negotiations with others of the Emperor's advisors the army and the navy and so forth and so on what the difficulties were, the negotiations with the Russians, and so forth and so on. He gave a complete, immaculate description of what they tried to do. It all depended upon asking the question in a way that was not humiliating by Japanese standards of correct behavior.