Harry S. Truman Presidential Library & Museum


Oral History Interview with
Edwin W. Pauley

Petroleum Coordinator for War in Europe on petroleum lend-lease supplies for Russia and England, 1941; Secretary of the Democratic National Committee, 1941; Treasurer of the Democratic National Committee, 1942-48; a principal supporter of Harry S. Truman for the vice-presidential nomination, 1944; director of the Democratic National Convention, 1944; Democratic National Committeeman, 1944-48; U.S. Representative on the Reparations Commission, with rank of Ambassador, 1945-47; Special Assistant to the Secretary of the Army, 1947; and adviser to the Secretary of State on reparations, 1947-48.

Los Angeles, California
March 3 | March 4 | and March 9, 1971
by J. R. Fuchs

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


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

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

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 It may not be published in full except by permission of the Harry S. Truman Library.

Opened April, 1973
Harry S. Truman Library
Independence, Missouri

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


Oral History Interview with
Edwin W. Pauley

Los Angeles, California
March 3, 1971
by J. R. Fuchs

[1]

FUCHS: Mr. Pauley, when did you first become interested in seeing someone other than Mr. Wallace nominated for Vice President in 1944?

PAULEY: Well, I became concerned about Henry Wallace because he was the Vice President. It seemed to me that he was making too many pro-Soviet statements, and his actions were such that I did not think that he would become, either by election or succession, a proper President of the United States. I gave this a great deal of thought; I had considered it

[2]

from my own intellectual experience in Government and interest in Government philosophy. As time went on, I felt that I should pursue this matter further and do something aggressively to prevent his nomination for Vice President of the United States.

FUCHS: Will you date this a little more closely as to when you first felt that you should take such action?

PAULEY: I can date it specifically when I took this action. It was about a year before the convention that I proceeded to prevent his becoming the President. I say "the President," because, in my opinion, it was becoming obvious that the Vice President would become the President because of Roosevelt's health. I organized a campaign to prevent Henry Wallace from becoming the Vice President and used all the influence

[3]

that I had in the Democratic Party to bring this about. This came about by my recruiting all of the Democratic friends of great influence that I had within the party and particularly those that had influence with President Roosevelt, because I knew that no matter what any of us who opposed Wallace might do, we would have to have the backing of Roosevelt to obstruct Wallace's campaign.

FUCHS: How did you go about this specifically?

PAULEY: Well, I recruited all of those friends that I had who were opposed to Wallace. I always felt that the Vice President would become the President; and that subsequently happened. Many people who had not been as close to Roosevelt as I was, didn't realize his infirmities as much as I did at the time.

FUCHS: Some of those who knew Roosevelt at the

[4]

time said that they didn't notice any change in his health until he returned from Yalta in February of '45. Had you seen something before this?

PAULEY: Yes, I did before that time. Ed Flynn, who was then chairman of the Democratic National Committee was ill, and, being secretary and treasurer of the committee, I used to keep the usual morning Tuesday and/or Thursday standing appointments that the Committee chairman had with Roosevelt. During that time, several of our meetings were held in Roosevelt's bedroom upstairs and we discussed political appointments. I realized then that he was failing and that he would not be, if reelected, the same sharp and admirable President that we had had before, and that, therefore, we would have to rely on a successor. At that time the only successor was Henry Wallace, whom I and

[5]

many of my associates believed would not be the proper man to become the President of the United States. Then I seriously activated a campaign against Henry Wallace. I did it regretfully, for many reasons. The prime one was that his wife was so charming and so lovely that I didn't want to do anything to disturb the feeling that we all had in the Democratic Party concerning her. Now then, Wallace was so involved in the Soviet approach to the problems of the United States, that it was almost impossible to talk to him about it. His eyes were always looking to the stars; he felt that he was right, and no one could tell him any different. This was typical: One night we had a fund-raising dinner at the Shoreham Hotel. I had no car and was relying on taxis. He had a car but he dismissed it and said, "I'm going down toward the Mayflower, would

[6]

you walk down with me?"

I said, "I'd be delighted to."

So we started walking down and he brought along with us a young fellow that he had employed on the Government payroll to teach him the Soviet language. So after crossing the Rock Creek Bridge by the Shoreham, he said, "Do you mind if we take off our shoes?"

I said, "No, I don't."

We all took off our shoes and we ended up in a jog trot. I was against having a President like this. It didn't help my mood any.

FUCHS: Did you ever see Mrs. Wallace after the '44 convention?

PAULEY: I saw her frequently after she knew that I was an opponent. But she was a wonderful person and acted on all occasions like she

[7]

should, Democratic Party-wise. She will always be in my book as a very charming woman.

FUCHS: Did Mr. Wallace ever have anything to say to you about your part in this?

PAULEY: No, but he knew how I stood and I didn't anticipate him being my great friend from then on.

FUCHS: Did he ever evidence any animosity toward you?

PAULEY: All he could, but I didn't have any personal animosity toward him. I believe that he grew up in the wrong school of political thought. I think that he was mesmerized by the Soviet Union. When we look back on it now, I thank God he did not become the President. I think that a great many people in the United States feel that way. I was very proud to be able

[8]

to defeat him.

FUCHS: I understand Pa [Major General Edwin M.] Watson was utilized in your strategy. Would you care to comment on that?

PAULEY: Pa Watson was Appointments Secretary to Roosevelt, and I found out that Pa Watson felt about Wallace as I did. He was ready to block Wallace, and he was a loyal friend of mine in plotting out the course to do this. As you know, when you control the appointments of the President of the United States, which he did, you're a very powerful fellow, because you can send in only those you want to meet the President. So I enlisted his willing aid, and we worked together. We made appointments for the President with Democratic representatives all over the United States, and the ones that got the preference were those who felt the

[9]

same as Pa Watson and I did.

FUCHS: When did you first come in touch with Mr. Truman and become aware of his capabilities?

PAULEY: Well, I first met President Truman when he first became a Senator -- in the office of the Democratic Majority in the Senate. Then my acquaintance grew with him, particularly when he became the head of the committee to investigate the war activities under Roosevelt. Roosevelt was very doubtful about anybody that would have the influence of the Senate in attacking him, and the administration; and so, therefore, it was debated in the high circles of the Democratic Party, primarily, its members within the Senate itself, and I didn't have anything to do with that. But he was selected.

FUCHS: Are you saying that there was some opposition

[10]

to the appointment of such a committee and of Mr. Truman to head it at that time, because it would likely oppose certain measures of the administration?

PAULEY: Roosevelt had by that time come to the conclusion that there was going to be a committee, that there was no way he could stop it. Roosevelt knew that there would be a committee. Barkley and other important Democrats were for Truman, and Truman conducted the investigation in such a manner that he did not intimidate or disgrace anybody; he only pointed out the facts. That, of course, was the one thing that made him the dominant man at the time of the selection of the Vice President. Roosevelt remembered him favorably from that.

FUCHS: What year did you first have appointments

[11]

with President Roosevelt?

PAULEY: It was after the election in '32, when the Democratic Party ended up with a terrific deficit. They asked me to help out and I said, "Well, I will only if the President wants me to, and I'd have to talk to him." I had met the President before this, but I didn't know him well. Then I raised their deficit; but one of the requirements was that I had to have the President help me at any time that I wanted it. I'll say this, Roosevelt gave me all the help that I asked him for.

FUCHS: Were you serving in an official capacity for the Democratic National Committee at that time?

PAULEY: I was National Committeeman from California.

FUCHS: How did you happen to enter the Government

[12]

in the capacity of petroleum coordinator for lend-lease to Russia and England?

PAULEY: Well, because I kept firing salvos, both in my individual capacity and my capacity as a former president of the Independent Petroleum Association of California -- telling the President how to run the Government, and how to run the war, and so forth. Finally we arranged an appointment and he said, "We're facing the problem that Europe has to have a hundred tankers for lend-lease. Do you know how we can get them?

I said, "Sure I do." Of course, I knew everything then, but I was a little younger. So, I gave him the formula which was to form a Petroleum Administration for Defense. I had been reading all about international petroleum supplies and I told him about it. So, he wrote a memo in his own handwriting to

[13]

the Secretary of War: "Let Ed Pauley be your adviser on enemy supplies vs. allied supplies of petroleum." That got quick response. I then said, "We can do it by controlling the petroleum supply and companies from one coast must not transport the same products that are also being shipped from the opposite direction; we must work out an exchange, which require complete coordination. I suggest the following," and I wrote the memo that created the Petroleum Administration for Defense. It later became the Petroleum Administration for War.

Ickes and I fought like hell all during the earlier days, but we finally got the proper administrator, [Ralph K.] Davies, under Ickes. Truman, of course, was not President at that time, so he had nothing to do with it; although he did support it later.

[14]

FUCHS: Regarding the Vice Presidency, at this time you were still thinking primarily of Speaker Rayburn as the candidate you would like to see as the vice-presidential nominee?

PAULEY: Yes. I was a great admirer of Sam Rayburn's. I think that he was a great Speaker of the House, a great citizen of the United States and would have made a great Vice President and President. I advocated him on every occasion that I could.

Sam Rayburn in a speech he made to a money raising dinner in St. Louis, said he was supporting and advocating Harry Truman. There was never any real serious dispute between Rayburn and Truman, so far as I know, for the nomination. In fact, I know positively that Rayburn called me up in the heat of the convention, and said, "If you put my name up you're not my friend, because I can't win. I don't have the delegation." As you know,

[15]

the Texas delegation split: One half went for Wallace and one half for Rayburn. If it hadn't been for that, Rayburn would have been the Vice President.

FUCHS: Do you recall your first meeting with Senator Truman?

PAULEY: I think it was in the Senate at a luncheon in Secretary Biffle's office. He had a luncheon there every day, as a matter of fact, and Truman was there very often.

FUCHS: How were you dividing your time between Washington and California then?

PAULEY: Oh, I'd say 90 percent in Washington. My business was operating fairly satisfactorily, and I got the bug and started to do public service.

FUCHS: What are your recollections as to the meeting

[16]

of July 11, 1944? Who called it and why?

PAULEY: It was called by Roosevelt himself, and was more or less a command performance.

FUCHS: Would you relate your recollections of it in detail?

PAULEY: The President that evening was most jovial. We had cocktails with him in the upstairs oval room, and he made several of his famous and delicious martinis. We had some very frivolous conversation. President Roosevelt was a charming gentleman and his approach to every problem or incident was bound to reflect a sense of humor which only he could put forward.

FUCHS: You had dinner before talking about the vice-presidential possibilities?

PAULEY: Yes -- but it had been discussed somewhat

[17]

upstairs during cocktails. Then after dinner we adjourned and went back upstairs and it really began. The discussion finally came around to, "Won't you take Wallace?"

I cited some reasons why we wouldn't. It wouldn't be good because of all the people in the Democratic Party that had been selected to raise money, Wallace drew the least crowd. The people in leadership didn't want him. They felt there were better people. I hadn't mentioned Rayburn once up to this point, but I said that there were other people that were better qualified. Roosevelt said, "Why?"

I said, "Well, take Sam Rayburn."

He said, "You know, we've discussed that. His own party didn't accept him in Texas. They took 50 percent of him, but unless they have 100 percent, they couldn't put him over." I knew that.

[18]

Incidentally, Alben Barkley would have been a hell of a man, a great man. Alben Barkley it seemed, though, had had quite a conflict with Roosevelt and Roosevelt felt that he didn't have all his loyalty.

Well, all the suggested members of the Senate, and the Governors, were eliminated by Roosevelt one by one.

FUCHS: What was said about Byrnes at that time, or was he not brought into the conversation?

PAULEY: He was brought up, but Roosevelt was very much opposed because of the Southern aspect. Everyone that was there, though, didn't want to argue one man against another as long as they eliminated Henry Wallace. That was the objective. As we went further the name of Harry Truman was brought up. I had made my position very clear about Rayburn, but I also agreed that there was no use going for a

[19]

fellow that couldn't make it. I was not the one that suggested Harry Truman, but I said that he would be a wonderful man. Then Hannegan took the ball and talked about Truman and everybody agreed that he had done a great job, was very popular, and that he could be put over at the convention. Roosevelt said, "Well, let's think about it now. How old is Truman?"

I knew very well how old he was. Everybody was saying from 55 to 94! John Boettiger was sitting on my right -- I don't know how the hell he ever got in the meeting anyhow -- but he was sitting on my right, and I said, "Well, they're going to stymie this whole thing on his age. Somebody can find out by just getting the Congressional Directory." So, Roosevelt told John to go find out. John went out to find out how old Truman was, and he came back with the Directory and handed it to me. In the

[20]

meantime, while he was out, we had Truman sold. He was in the pocket, and the last thing that anybody wanted to see was the Congressional Directory. I said, "Well, thank you, John, thank you very much." I put my finger on the page, closed it up, and just carried it as I would any school book. By that time, the age of Truman was moot.

About that time. Roosevelt said to Hannegan, "Now, Bob, you want -- and he put his hand on Bob's leg -- Truman."

Bob said, "Yes, I do:"

He said, "Ed, do you?"

I said, "Yes."

"Do all the rest of you?"

They said, "Yes."

So my little finger slipped out of the book. I just put it on the shelf. That's how close you can come to being President or not. Roosevelt wouldn't have taken Truman if we'd

[21]

opened up that Congressional Directory, not only because of the age, but because it would have opened up a whole new line of thought -- county judge, etc.

FUCHS: Flynn in his book, You are the Boss, published in 1947, said that he told Hannegan before the meeting that Harry S. Truman was the man, and that the meeting had been asked for by FDR to "inject Truman into the picture." Would you care to comment on that?

PAULEY: Well, I have no personal knowledge of what Flynn's conversation was with Hannegan, but Roosevelt was not anti-Truman. He was for him all the time, and so I would believe the story.

FUCHS: Was it difficult to convince President Roosevelt that the labor people would go along with someone other than Henry Wallace?

[22]

PAULEY: We were worried about it all the time; but that Truman was anti-labor never became an issue in the campaign.

FUCHS: Specifically, do you recall Hannegan getting a note or a letter at this Tuesday, July 11, 1944 meeting in the White House?

PAULEY: Hannegan got the note but he didn't get it in the White House. We were at the convention in Chicago and we kept telling everybody that Truman would be acceptable to Roosevelt. They said, "Well, how the hell do you know? He's always been for Wallace. Bob, we have to have a document or something."

I said to Hannegan, "Let's get something in writing."

He said, "I will, but you know, I can't very well send him a telegram saying, 'Come out for Truman.' We better talk to him when

[23]

he comes through here." It had already been arranged that he would come through Chicago on his way to San Diego to pick up a cruiser. Roosevelt was ducking the whole thing. He didn't want to get caught with his pants down on labor. He wanted to have a left-wing approach to the whole problem and not be accused of abandoning Henry Wallace in favor of capitalism. Not that Truman was ever, as far as I know, accused of being a capitalist, although I think his tendencies were along those lines. So, Hannegan said, "When we go down to see him at the train, we'll ask him for something in writing."

The train didn't come through the regular depot; it was out in the switchyard being switched from one line to another railroad. Hannegan said to Roosevelt, "You know, we've come to the point now that all we need is your

[24]

confirmation. We don't need it for campaign purposes at the convention, but we need it as your confirmation of our judgment on how you stand."

Roosevelt said, "Oh, sure."

We talked to him about a lot of things and told him about the obstacles and about labor and so on and so forth; and we both. reassured him that Truman was in, "but we need this."

He said, fine, and pulled an envelope out of his desk and wrote the famous letter on the back of it. "Dear Bob: You have asked me if Harry Truman is acceptable. I would say that either Harry Truman or Justice Douglas is acceptable to me." Well, I don't know how the hell he got that Douglas in there. We didn't even talk about him. But this is how shrewd this guy was, bringing in Douglas at that time. So he said, "Here, Bob, take

[25]

this and put it in your pocket." Bob put it in his inside pocket. He said, "That will be all." I think that Roosevelt wanted to get rid of us fast before we got him to cross that name of Douglas out of there. I hadn't seen it and neither had Bob. The damn train started leaving and Bob and I got off the train, and I said, "Bob, what's on the envelope." He read it to me. I said, "Christ, stop the train."

He said, "Oh, hell, it's gone."

I'm sure it was deliberate on Roosevelt's part, and I said, "You got something, but you can't use it. Just keep it in your pocket. You cannot use that, but still tell them that you have a signed document by FDR;" which he had.

This was the only note, and it was one that pleased neither Hannagan nor Pauley. We took it and the day of the vote we had it

[26]

mimeographed to put out to the press.

FUCHS: You say you didn't release the mimeograph copies until the 21st, the day of his actual nomination?

PAULEY: That's right.

FUCHS: Some say it was released on the 20th?

PAULEY: No, we were very careful about that. We were precise about that.

FUCHS: Well, then, in your opinion, there's nothing to the story that the letter was originally written in the White House on the 13th and postdated the 19th, and that you went to the train to get him to switch the names from -- in so many words -- "I'll accept either William Douglas or Harry S. Truman," to "Truman or Douglas."

[27]

Grace Tully, who was Roosevelt's secretary, claims that when you and Hannegan met Mr. Roosevelt on the train, it was to get him to reverse the order of the names and that Hannegan brought the letter to her and said, "The President wants you to type this on White House stationery and switch the names." You're sure that that didn't occur on the train?

PAULEY: We didn't leave the envelope with her, but we said, "Send us a letter confirming this on White House stationery, signed by FDR." But we also said, "We'll use this anyhow." Of course they didn't know that we were not going to use it. The plight that we would have been in if we released it early was that we would have had the Douglas troops rise in opposition. There weren't many, but some. One of them was George Killion. There were staunch Douglas

[28]

people. If you'd given them three days they could have put up a brilliant fight. I don't think they would have won, but it would have been a hell of a fight. So, when we released it the day that we came to vote, nobody had a chance to organize against us.

FUCHS: Your recollection then is that there was no change of names. You don't recall Hannegan saying, "Well, we've got to have the names switched from Douglas and Truman to Truman and Douglas," to make it seem that he was giving first preference to Truman rather than Douglas?

PAULEY: No. I know definitely not. I can tell you from memory every word of the letter.

FUCHS: And you have no recollection of Hannegan in the White House on July 11th returning upstairs to get a note which said, according

[29]

to one version, "Bob, it's Truman. FDR."

PAULEY: Well, if he did, I don't know about it. I know when we left I had Hannegan's coat on, and he had mine. It was a hot night and we had had our coats off.

FUCHS: Did you fear Byrnes in Chicago, or did you feel that he more or less had been taken out of the picture by Roosevelt?

PAULEY: Roosevelt took him out of the picture. We didn't. Byrnes would have been a very agreeable candidate for me and perhaps for Hannegan. But at that time, the feeling was, "That's between Roosevelt and Byrnes," but that Roosevelt wouldn't go for him. There had been a disagreement some place along the line. I've forgotten what it was about. But Byrnes was a wonderful man and easy to be for; but at times he could become very vitriolic, and

[30]

Roosevelt must have remembered one of those times.

FUCHS: I am interested in your account of the second day of the convention, Thursday, July 20th, and the events from that point on.

PAULEY: Well, to say the place became overcrowded is a mild statement. It was one of the world's catastrophes. We started the convention at, I think, 11 o'clock that morning and then we scheduled the nomination -- after the Roosevelt nomination and the acceptance speech and all that -- for the Vice President at, I believe, 7 or 8. I went back to the hotel. I had some appointments and had taken off my clothes to lie down for a few minutes, and then put on some clean clothes. I got a call from the stadium and was told to get down there immediately. I was director of the convention

[31]

at that time. The place had gone to pot and was running wild; no delegate could get their seat. This was about an hour before reconvening.

I told Neale Roach to get down as fast as he could with all my other assistants. They said, "No delegate can sit in his own seat. The Wallace people have taken the whole thing over."

FUCHS: How did these people get in?

PAULEY: They had counterfeit passes, and they took over the guard. I mean took them over. We had a private guard at that time. I went down and the place was pandemonium. Nothing could happen. The only thing playing on the organ was "Iowa Where the Tall Corn Grows." I had George Allen, my assistant, in charge of the communication system. I couldn't get George; couldn't find anybody. I told Neale Roach,

[32]

"Listen, you see that twirp up there playing that organ? He's a Petrillo man, and naturally he's for Henry Wallace. But he has no business taking our show over" I said, "Neale, do you see that ax up there above the organ?" It was one of the fire axes. I said, "Go up there, get that ax and chop every goddamn cable there is, every one. That's the only thing that will stop him. We're going to call off the convention tonight. I don't want that music playing."

So he did what I told him to do. He ran up there, got the ax, and he told the guy, "Listen, I've been instructed to chop all the cables unless you stop this music." So the guy stopped it. It was one of the dramatic things of the convention. That's the way Willkie won his Republican nomination, because he had the crowd, and he had the physical facility. Having control of the physical facility of the

[33]

convention is awfully important. If that thing had gone on and on God knows what the impression would have been. But I'll say this for Neale, he followed through.

Then I finally got hold of Kelly, the Mayor, and he got hold of the fire commissioner. I had already told the advisory committee that I was going to call the convention off because of the fire hazard. I was trying to find the chief of the fire department. He finally came in and said, "By authority of the Mayor of the City of Chicago, we herewith declare the hall be vacated, immediately." Then I got up and announced when we would reconvene.

FUCHS: What do you recall about the events of the day Truman was nominated?

PAULEY: When we released the mimeographed copies of the letter, people knocked down each other

[34]

to get into the other fellow's copy pile. They were all the same, but they didn't know it. What a scramble there was there. Little did they know that they were picking up a document that meant that they had in their possession the name of the next President of the United States. Truman was so modest about it. He never tried to get any prominence. He was very mild about the whole thing. I can remember when he was about to make his acceptance speech he had a hamburger and bottle of Coca-Cola in his hand that he had to put down to make his speech.

FUCHS: How did you feel when the first ballot went for Mr. Wallace by a fairly substantial margin?

PAULEY: The strategy was that what Wallace was going to get you couldn't prevent, so work on something else, and that was your favorite sons. Now, if Wallace couldn't win on the

[35]

first ballot, and he didn't have favorite sons or other states going over to him on the second ballot, then we could put it over. That was the strategy that we used. We didn't worry about it, because you'd be surprised how many people will tell you in a convention of this kind -- and I've been through three of them -- "I can't go for your man now, but on the second ballot I will." We knew that in the next roll call that we had, we would have all those who didn't go for Truman on the first one, plus the others; so when we finally started a movement to move Truman in, we had the committed votes. It didn't leave us nervous at all. We knew what we had, and we got what we expected.

[36]

Second Oral History Interview with Edwin W. Pauley, Los Angeles, California, March 4, 1971. By J. R. Fuchs, Harry S. Truman Library.

FUCHS: You have told me that you have thought of something that you neglected to include yesterday, sir.

PAULEY: Yes. I happened to have read Lord [Charles McMoran Wilson] Moran's book. Lord Moran was the personal physician to Churchill, and had been for more than twenty-five years. I have often been asked to give in my own words the relationship between Roosevelt and Churchill. So on the occasion of Truman's birthday party, included in the speech that I made, I said the following:

As I left Los Angeles I brought with me on my flight here an interesting and intriguing book, which I commend to your attention. This book which I just finished is called simply Churchill, and has been taken largely from the diaries of Lord Moran who served as Churchill's personal physician

[37]

for more than twenty-five years. From this absorbing book I recall my own personal experiences as an economic adviser to the President during the trying and difficult days of the famous Potsdam Conference in July of 1945. This was the first critical meeting between President Truman, who had advanced to the Presidency just weeks before, and Prime Minister Winston Churchill and Marshal Stalin. Rather than describe my own deep affection for the man we honor today, permit me to review for you a few passages from this book which describes the initial impact President Truman made on the great Churchill, one of the twentieth century's outstanding leaders and statesmen. I'm sure you will agree with me that Churchill's first reactions in his own words perhaps describe President Truman as well as is humanly possible, and I quote this account of their first meeting at Potsdam: 'As Winston was in good humor I asked him about Truman. Had he real ability? Looking down at me as if he were saying something that he did not want to be repeated, the Prime Minister said, "I should think he has," he said. "At any rate, he's a man of immense determination. He takes no notice of delicate ground. He just plants his foot down firmly on it."' Churchill's high regard and esteem for President Truman mounted as the conference progressed.

Here are a few additional comments from Churchill concerning President Truman as reported in Lord Moran's diaries from the Potsdam meeting: 'He seems a man of

[38]

exceptional charm and ability, with an outlook exactly along the lines of Anglo-American relationships as they have developed. He has direct methods of speech and a great deal of self-confidence and resolution.' Lord Moran candidly comments: 'Winston has fallen for the President. Truman's modesty and simple ways are certainly disarming.' And finally, as the Potsdam Conference neared a close Churchill is quoted by Lord Moran, 'The President is not going to be content to feed out of anyone's hand. He intends to get to the bottom of things, and when Stalin gets tough, Truman at once makes it plain that he too can hand out the rough stuff.'

You will agree with me that Churchill quickly and accurately diagnosed those attributes which history is recording made President Truman one of our greatest Presidents.

Then I reached down and wished him a happy birthday and many, many more of them. He told me later that he liked this very much.

FUCHS: Mr. Pauley, I have a few additional questions about 1944. First, Sam Rosenman in his book, Working With Roosevelt, said that he had been alerted to attend this meeting in the White House on July 11, 1944, to more or less hash out

[39]

with the President who would be the vice-presidential nominee. He then was not invited. Do you know anything of that, sir?

PAULEY: I heard that same thing, but I have no personal knowledge beyond the statement that you just made.

FUCHS: There is another account that Frank Walker was told by President Roosevelt at this meeting that he should the next day advise Jimmy Byrnes that it was not to be him, but it was to be Senator Truman who would be the vice-presidential nominee. Do you have a recollection of this?

PAULEY: No, I don't.

FUCHS: There is another account that says that on Saturday, July 14th, prior to the opening of the convention, when the presidential train

[40]

pulled into the yards in Chicago, that [Mayor Edward J.] Kelly did not get on the train, but that he later told Jimmy Byrnes that he was on the train. Do you know if he was there?

PAULEY: I'm sure he wasn't. At least I know he wasn't during the time that Hannegan and I were on the train. I think the only appointment that President Roosevelt had was that one with Hannegan and me, but he might have had others and I wouldn't have known it.

FUCHS: Another matter I'd like to have you remark about is that on July 18th, which would have been the Tuesday, prior to the convention opening on Wednesday, FDR was supposed to have told Hannegan, "Clear it with Sidney." This was in regard to whether Jimmy Byrnes would be okay for the vice-presidential nominee. Hannegan

[41]

was supposed to have told Kelly this. Byrnes, quotes this in his book, All In One Lifetime. Do you know if this is fact?

PAULEY: Well, I would believe it a fact, because Roosevelt was anxious that Sidney Hillman not oppose the nominee. Now whether or not he took that means of going about it, I’m not sure.

FUCHS: I believe this was when Byrnes was reconstructing the story to the tenor that Hannegan was exercising a certain amount of duplicity with him, making him think that he was for Byrnes but knowing all along that he was trying to get Byrnes out of the picture. Do you believe Byrnes' interpretation of this to be correct?

PAULEY: I know that there was some duplicity in Hannegan's attitude on various occasions, but I think it was justified by the circumstances.

[42]

FUCHS: On the second day of the convention, the day on which, originally, Mr. Truman or some candidate was to be nominated for Vice President, it is said there was a phone call made from the Blackstone Hotel to President Roosevelt, by Hannegan and in the presence of Senator Truman. Although there has been different accounts of this, it is said that Senator Truman did not personally talk to Roosevelt, but that he listened and could hear because of FDR’s booming voice. Do you know of this phone call, personally?

PAULEY: Yes, I do. And I think that's right. I don't think he talked personally to Roosevelt.

FUCHS: Were you in the room at the time, sir?

PAULEY: Yes, if it's the conversation I think you mean.

FUCHS: This is the one where Roosevelt is said to have said, "Well, all right, have you lined that

[43]

son-of-a-gun up?"

And Hannegan said, "No, he's the contrariest guy.”

Then Roosevelt said, "All right, tell him if he wants to bust up the Democratic Party in the middle of the war, that's his responsibility."

And then Truman is said to have said, "My God."

PAULEY: I think that's true.

FUCHS: I've been told that, after the nomination, you thought Mr. Truman ought to spruce himself up a bit as the vice-presidential nominee.

PAULEY: I think that was the unanimous concern of all of us. We persuaded him to go to New York and flew him up. Jack Frye had a plane at the time, and it was available, so we flew up

[44]

in that and he went to my tailor and shirt maker and dolled himself up as a vice-presidential candidate should look.

FUCHS: Getting into the campaign, what part do you recall playing in the campaign in '44?

PAULEY: Well, of course, I was the treasurer of the committee, and then because of the inattention of the finance chairman, who was supposed to raise the money, I found myself raising money. I paid particular attention to the Truman phases of the campaign. For instance, when the President came to the West Coast, my brother at that time was still alive and I asked him if he would play an assistant role to George Allen in seeing that his campaign was well attended, and also that everyone that did attend was given the opportunity to make a contribution. My brother did a fine job on that. He sponsored

[45]

most of the dinners that were given here. I say sponsored, but I mean he encouraged the individual hosts, and Truman worked very hard while he was here.

FUCHS: Do you know who wrote the speeches for Truman in that campaign?

PAULEY: Yes, George Allen had a fellow, named Irwin Reynolds.

FUCHS: Do you know of any others?

PAULEY: Also Paul A. Porter and a couple of his assistants. And, of course, Leonard Reinsch pitched in from time to time.

FUCHS: Were these gentlemen traveling on the train?

PAULEY: From time to time they were.

FUCHS: His speeches, then, weren't emanating from the Democratic National Committee as a good many

[46]

of President Roosevelt's were?

PAULEY: Other than Paul Porter was an employee of the National Committee, and Leonard Reinsch, although not an employee, had the title of Director of Radio and Television. The campaign was fairly well coordinated by the National Committee.

FUCHS: You said before we started that you wanted to mention, in connection with the nomination of Senator Truman, a column that Walter Lippmann had written that was printed in the Chicago Sun (for one paper) on July 13th.

PAULEY: Yes. I was an avid reader of Walter Lippmann and I hardly ever missed his column. He wrote a particularly appropriate column on the Wallace versus Truman thing, and it was very temperate in his condemnation of Wallace. It happened to fit my own estimate of the situation,

[47]

and so I used this column to great advantage among the delegates to the convention. It's worth everybody's reading, although rather long.

FUCHS: Did you have it reprinted? What did you do to get it before the proper people?

PAULEY: I did everything that a man could do. I had it reprinted by the thousands. I called it to everybody's attention that I could; but it did more than any article I've seen to do away with Mr. Wallace's ambitions to be the re-elected Vice President. I'll read the last sentence. He goes on to speak of Mr. Wallace, calling attention to some of his merits, but he ends up this way:

Many of the voters, too many to be disregarded, would feel, I think, that his elevation to the Presidency would produce a profound, perhaps an unreasonable sense of anxiety and loss of confidence in the conduct of the Government.

[48]

This would arise, I think, not because Mr. Wallace is not a good man. On the contrary, he is an exceptionally fine human being. It would arise from an intuitive realization that his goodness is unworldly, that his heart is so detached from the realities that he has never learned to measure, as a statesman must, the relation of good and of evil in current affairs.

I think that Mr. Lippmann had in mind in his whole column the disclosure that Charlie Michaelson had made on Wallace's communion with the stars that be and the yogis who live around in the atmosphere. You're familiar with that?

FUCHS: And the guru letters.

PAULEY: Yes.

FUCHS: Are there any events that stand out in your memory, sidelights on history, after the nomination of Mr. Truman?

PAULEY: When we flew the Vice President-to-be to New York we used a suite I kept at the

[49]

Sherry-Netherland Hotel. Another fellow and I owned most of the bonds in the Sherry-Netherland, and as a result, we kept one of the top suites there all during the war because I was back and forth on lend-lease. It occupied a whole floor; the Sherry-Netherland is very narrow at the top and there were only three bedrooms. We got the suite below mine for Truman. As usual, when Truman wasn't busy with official appointments he liked to play cards, and very often the game was poker. He delighted, I think, in that, more than any other relaxation he had. He used to do pretty well at it, particularly when he played games which he invented.

FUCHS: How's that?

PAULEY: I don't think they have an official title, but sometimes you'd play them with two and sometimes three decks, and then by the time you got

[50]

through naming the wild cards, you didn't know what the hell you were playing. But he enjoyed it, and so did Hannegan and Jack Frye and myself.

When I took him down to my tailor one morning, I said, "You've never eaten at the "21 Club" have you?"

He said, "No."

I said, "Do you want to?"

He said, "Sure, whatever you want me to do."

So we went by and you know where "21" is in New York, don't you?

FUCHS: I've been by it, sir.

PAULEY: Well, during prohibition it was a speakeasy, so its reputation wasn't the greatest; although after prohibition it became quite a famous restaurant because only famous people could get in the speakeasy when it was operating, and so it

[51]

build a top list of clientele. He enjoyed that very much. I didn't tell him until we got to it what it had been, although I don't think it would have made a great deal of difference.

FUCHS: Do you wish to say anything else in regard to the campaign or the election?

PAULEY: No, as you know, the election came off very serenely, and there was actually no real contest in that election to the point that it wasn't a certainty that the Democratic ticket would win.

FUCHS: This column by Lippmann seemed to me to be saying that there was a good chance that Roosevelt would not live. Was that your interpretation?

PAULEY: Yes.

FUCHS: Was this common in the papers at that time?

[52]

I know the story is that a lot of people such as yourself were thinking this.

PAULEY: It was among knowledgeable people such as Lippmann.

FUCHS: The inauguration in '44, of course, was rather a simple affair. Do you recall anything about that?

PAULEY: No, it was a simple, modest affair, and there was not a great deal of celebration. There are no vivid items that I immediately think about.

FUCHS: What contacts did you have with Vice President Truman from January 20th to April 12th? Is there anything that comes to mind that might be of interest?

PAULEY: There isn't. Remember, during all this time, I was sandwiching in European work on lend-lease, so I didn't devote as much time as I

[53]

normally would to the Vice President, or the President for that matter. It was perfectly obvious to Truman that Roosevelt wouldn't live his term out. He never said so, but you could tell by his actions that he did realize that.

FUCHS: Do you think he did anything that he wouldn't normally have done to prepare himself for the Presidency during that period as a Vice President?

PAULEY: Well, that came automatically. People kept referring things to Truman that would ordinarily have gone to Roosevelt, except for his health; and Truman's visiting pouch to the White House I'll guarantee you was very large with important things to be done by the President. More and more you found Roosevelt relying on Truman's advice and he was actually putting Truman forward toward the last.

[54]

FUCHS: You think, then, those who said that Vice President Truman didn't have much access to President Roosevelt are probably in some degree of error?

PAULEY: Well, certainly he did have access toward the last, more than you would think. Roosevelt asked for aid and assistance. Ed Flynn, who was national chairman in the early days, became ill during that period and they appointed Frank Walker, and then Bob Hannegan. Both of them used to clear a great many things with Truman rather than Roosevelt because of Roosevelt's health. For a long time I was the acting chairman, not by any title given me by the National Committee, but I just acted as such. It had been the custom for the President to see the chairman on Tuesday mornings, I believe, of every week, and I used to keep those early morning appointments: That's the reason I knew that Roosevelt

[55]

was failing rapidly. He kept many of the appointments in his bedroom, and he used to have a trapeze arrangement, like I have over my bed on account of my back. He had tremendous strength in his arms, you know, from using these things. He would stay in bed just as long as he could. The people that he knew well he'd have come to his bedroom for appointments.

FUCHS: Another story generally agreed upon is that as a Senator, and even when head of the so-called Truman Committee, Mr. Truman did not see President Roosevelt much. Mr. Truman has since said that he saw him a great deal more than people knew by going in the back door for off-the-record appointments. Do you know whether or not this was a fact?

PAULEY: I'm sure of that. I used to have access to his so-called "secret passage" myself. I

[56]

never made any front-door appearances; I always used to go in the back way. That's the reason I think that Roosevelt, and later Truman, would see certain people as often as they saw me, because they could be counted on to go in through the back door, and not make a point of it, not announce it, and not say what happened.

FUCHS: Do you recall your immediate thoughts when you heard of the death of President Roosevelt? Did you have any trepidation about what Mr. Truman's handling of the Presidency might be, or did you feel fully confident that he was equal to the task?

PAULEY: I felt confident that he could handle it. I wasn't a great admirer of Roosevelt's frankly. I was a staunch Democrat and believed that Roosevelt did a fine job domestically when he

[57]

first went in as President, and that most of his reforms were good ones, but not all of them. But I looked forward to the transition to the Truman administration, and felt that it would be a great improvement, which it was.

FUCHS: This is a little bit off the subject, but as the Petroleum Coordinator for supplies to England and Russia in the years '41 to '45, did you have doubts about Russia's postwar cooperation?

PAULEY: I did from the beginning, and I felt that Roosevelt was being fed a lot of bunk about Stalin's so-called cooperation. I'm sure that I could have been just as popular as Roosevelt if I had the billions of dollars that he put out. It makes a lot of difference. I think he was under the complete idea that his personality would take care of Stalin, and not the money. It was perfectly obvious that

[58]

the deals that he made were based upon his own self-assurance.

FUCHS: Then as early as 1944 you sensed that Russia would be obdurate about a lot of things. Can you recall anything that you might have construed as obstructionism on their part in regard to what you were trying to do in coordinating petroleum supplies?

PAULEY: Well, they wouldn't do anything, except take. They wouldn't give anything, and even at the Potsdam Conference, after Truman was President, I tried to get them to give our troops the Austrian oil or a fair share of it, to save tankers for us. We were shipping our own petroleum to the Soviet Union, to Murmansk and the other big northern port up there, Archangel. We at that time, of course, were tying our boats up in the Pacific fighting the Japanese war. Under lend-lease, the original

[59]

concept that Roosevelt sold the American people and the Congress was that you were lending it to them, you were leasing it to them, and that there would be an obligation to pay it back when they were able to do it. Their contention always was that they weren't able to do it, although they were. On reparations, Roosevelt was pretty well committed to the principle that mainly reparations should replace things destroyed by the enemy. I didn't have that feeling at all about destruction. I claimed that the United States, although I knew that I'd never put my point across totally, had given them on lend-lease things that were irreplaceable, such as petroleum, iron, steel, fabricated products, and electronic goods. Whereas, if they lost a building, all you had to do is add up the brick and mortar and add on some labor; and the brick and mortar you could get, and that wasn't depletion of an irreplaceable resource.

[60]

But they had sold Roosevelt on that idea. All his discussions with them were along that line. I fought it only by asserting claims that I knew I could never get, but they then acknowledged in principle that part of my contention was logical. Truman got it right away; he realized that. Compared to Roosevelt, who had said that as a basis of discussion we will use the Soviet Union's figure of twenty billion dollars in machinery and whatnot. At the same time, anything that was worth a damn, Stalin took away. He just took it. Roosevelt never got the approval of anybody, not a single Cabinet member, nobody in the Senate. All these deals that were made at that time, would have been an unthinkable thing for Truman to do. Truman was faced with the rebuilding of occupied Europe. Of course, most ridiculous was the division of the territories surrounding Japan. That is Stalin's taking Korea north of the 38th

[61]

parallel, taking the Manchurian railroad, and I guess he took practically everything that was worth a darn out of Manchuria. The Kurile Islands, all of these things. There wasn't a single person in Washington that knew about any of this. I found out about it on my own through the "black book." You've heard about it, haven't you?

FUCHS: Yes, I have. I assume, of course, that the State Department got it, or Mr. Truman has it in the things that he hasn't turned over to the Library. [It hasn’t been found among the things that have been turned over to the Library subsequent to this interview.]

PAULEY: When they handed me that, I should have just locked it up, and told them what was in it, and not handed it back. I told them it was something that couldn't circulate; but that will tell you everything, and it's not complimentary at all to Roosevelt.

FUCHS: Whom did you receive this from, and when?

[62]

PAULEY: Admiral Leahy.

FUCHS: When did you get that book from Leahy?

PAULEY: The day of the Roosevelt funeral it was mentioned to me, and I received it the day afterwards at the White House.

FUCHS: What was the first thing you did when you got back to Washington after the death of President Roosevelt? Did you try to get in touch with Mr. Truman?

PAULEY: Yes, he came by the suite in Washington that I kept with Bob Hannegan. It was in the Mayflower Hotel, 736, 7 and 8. I got a little bit of sleep and Truman came by that morning. He had already talked to Mrs. Roosevelt and we talked briefly. I then met him on the train.

FUCHS: On April 26th, according to our appointment

[63]

book, you had your first official appointment with President Truman, and that was with Frank Walker and Bob Hannegan. Do you recall anything about that?

PAULEY: My memory fails me on that.

FUCHS: The next day you had a meeting with Isador Lubin and received word of your appointment in relation to reparations. What do you recall about that?

PAULEY: Lubin was always a very disappointed man that he was not the chief man on reparations, and I think that his relationship with Harry Hopkins indicated to Lubin that he would be the head man; but you can see how ridiculous in light of the present circumstances it would be to put a Jew in that job. The Jews all liked Stalin because Stalin was anti-Hitler, but they weren't fooling me. The Soviets didn't like the

[64]

Jews any better than Hitler did, and that's demonstrated now.

FUCHS: Did Lubin evidence this in any way to you? Did you ever feel like you had less than full cooperation from him?

PAULEY: Always during the first part of the reparations mission, I got no cooperation from the staff that Lubin had recruited before I came onto the scene. I superimposed this great delegation and, if I do say so myself, there was never one formed that was any more able to handle the job than I formed. I got every cooperation from Truman. But Lubin was the sort of fellow that if there was a headline in the New York Times he’d come up to you on a confidential basis and say, "I just found out from the Secret Service (or some damn thing) that such and such was happening." And hell,

[65]

here was the whole thing in the newspapers.

FUCHS: A little bit more about reparations. There is a letter in the files that some of the people you wanted to tap for the job were working for big companies, and the companies wanted them to go with you as dollar-a-year men. You wrote a memorandum to the President on May 10, 1945, saying that they would prefer to be loaned on that basis, and President Truman approved it. Do you recall any conversation about this? What I'm trying to bring out, is that Mr. Truman as chairman of the Truman Committee had very much opposed the dollar-a-year men idea at that time.

PAULEY: I think he did this time, too, but I wouldn't go along with it, because I myself never received any salary. There were many reasons and a lot of people I got, I couldn't have gotten if I hadn't gotten them on that basis.

[66]

FUCHS: But you think he was still against the principle then, even though now he was looking at it from a different chair?

PAULEY: I think he was, but yielded.

FUCHS: Did you feel that you had opposition from some of the other departments in, more or less, requisitioning some of their personnel to assist you on this mission?

PAULEY: No. Perhaps I used the authority that was contained in my letter of appointment by Truman in that I had Truman assign things without going through the War Department channels. In fact, I had Truman send Eisenhower a letter directly from the White House asking for the services of Buddy Fogelson, who was my military aide; and it put Truman in the position of corresponding directly with Eisenhower, who was still in the military at that time. There

[67]

were little things that I did that was because of ignorance on my part. I soon got in the scheme of things and didn't do it anymore.

FUCHS: In May you requested an appointment with the President so that your personal economist, Fred Schuster could confer with him, and you did have an appointment on May 16, off-the-record, to see the President, and Mr. Schuster accompanied you. Do you recall anything of that? What ideas you wanted him to present?

PAULEY: Yes. Schuster was one of the best economists at that time that came down the pike; and he was great on the analysis of market trends -- and you are going to get into grain speculation later, I know -- but he was my adviser on grain speculation. So I had him come in with me, and we spent an hour and a half with the President. We went over his charts, predictions, the theories of what should be done.

[68]

FUCHS: Did you have the feeling that President Truman had a quick grasp of such things as Schuster might have been presenting?

PAULEY: Yes, he did, very. He was a very keen observer of economics.

FUCHS: At Potsdam, Mr. Truman gained the knowledge that the A-bomb was a success: I am wondering if you have some remarks about that whole period there; your taking over as Ambassador for reparations, and then meeting Mr. Truman in Potsdam, and, of course, the conference from July 17th to August 3, 1945?

PAULEY: I had talked to Truman off and on about the A-bomb, the Manhattan Project, and so forth; and of course, it was settled right there at the Potsdam Conference, as to whether or not we would drop the bomb. We decided that we would, both bombs. I'd been working on this

[69]

super-secret enemy fuel supply report most of the time during the war. While I never made any great objection that the atomic bomb not be dropped, I did point out the fact that Japan was about out of petroleum, in fact they were out, and that it might not be necessary. But all the military were so anxious to save the lives of American men that they wanted to go ahead and drop it.

FUCHS: Now, this was at Potsdam that you pointed this out?

PAULEY: Yes.

FUCHS: But you had not talked prior to that of the project to Mr. Truman; but you had earlier knowledge of the Manhattan Project. How did you come into that, sir?

PAULEY: Well, in the first place, the University of California was then, and is now, in charge

[70]

of all experimental work in the atomic energy field, including the hydrogen bomb; and when the Manhattan Project started, it was so hush-hush that all the people were recruited for this work by the University of California. There were only three regents of the University and the secretary of the regents, who did all of the negotiating with the Army; and we disbursed all the funds, and most of the time I was one of the three. That includes the Lawrence Radiation Laboratory at Berkeley, the Livermore Laboratory of Livermore, California, and the Los Alamos Laboratory in Los Alamos, New Mexico. Did I leave something out?

FUCHS: Did it take in the Metallurgical Laboratory in Chicago?

PAULEY: No, but we had a deal with the University of Chicago wherein we farmed a great deal of the experimentation out to them. That's the way the

[71]

University picked up Oppenheimer. I don't want to forget to give the Oppenheimer chapter.

FUCHS: Mr. Pauley, why not give us that story now?

PAULEY: You probably know the characters, most of them notable scientists such as Ernest Lawrence and other people that have worked on nuclear physics. For a long time we had developed an H-bomb, which materially reduces the radioactive effects of the nuclear bomb. Oppenheimer was one of those, let me repeat, only one, who worked on that project. I think in placing credit where it's due, Edward Teller and Ernest Lawrence deserved it largely. Now, the bomb was fully developed so far as manufacturing was concerned several years before the first was fired. I was among those who had followed this development from its inception, and I became very impatient that we develop this great

[72]

bomb that would have very little radioactivity. I was very anxious to get that brought about. Dr. Ernest Lawrence, who was the father of all study of radioactivity at the University and was the inventor of the original cyclotron, which is the basis of this work in atomic energy, was my great friend. (His brother John still is my great friend.) He was an associate, also, in the Lawrence Radiation Laboratory. Ernest Lawrence used to come down and visit me at Palm Springs, where I had a house, when I went down there every winter over Easter time. He'd bring one of his boys and stay there with us. On one of these trips, the year that Oppenheimer was ousted, Ernest came down and spoke to me about what was then my favorite subject, the H-bomb. He said, "Well, you know, that's being held up by just one man, and that's

[73]

Oppenheimer."

I said, "Someway I picked that up before, but tell me about it."

He said, "Well, it's so secret, we better take some chairs and go out in the middle of the desert and talk out there. These fellows that work around the radiation laboratory have some strange ideas of humor. They've all got microphones that they carry around and plant here and there. So, be very careful about it."

I said, "Fine."

So we went out, virtually in the middle of the desert, and talked this thing out. He told me the story of Oppenheimer and how he had, by one ruse or other, physically delayed the development phases of the bomb, and convinced me beyond any question that it was Oppenheimer who was delaying the explosion of the bomb.

[74]

There had been some ugly rumors around University circles about Oppenheimer's complete loyalty to the United States in this nuclear race. I don't think beyond that it amounted to any-thing, but Lawrence convinced me that he was the wrong man to be in the key position that he was. At that time he was on leave from the University on loan to the Federal Government agency that had to do with this subject. So, I said, "Well, Ernest, I'm not going to waste any time. I'm going to see Truman tomorrow morning."

He said, "My God, you've got to go back to Los Angeles and all that."

I said, "It doesn't make any difference" -- I had my own plane there then. I said, "I'll go back to Los Angeles and get a transport, non-stop, to Washington."

I made an appointment with President Truman's

[75]

naval aide, Admiral Dennison, who was also a very good friend of mine, and I had about a two-hour session with him. I asked him to make an appointment with President Truman following our conversation. And I gave him a hint of what it was about. I said, "I can explain in detail only to President Truman as to why I know these things to be a fact." Admiral Dennison, incidentally, was my naval aide, too, at one time.

FUCHS: Oh?

PAULEY: Yes, on reparations. I was the one who got Truman to take him, first, as skipper on the battleship that went down to South America, you know.

FUCHS: Yes, when he went to Rio de Janeiro.

PAULEY: Yes. He took him on that and he liked him so much he made him his naval aide. I said,

[76]

"You take this fellow," and the President selected him. When he was naval aide to me he was only a commander.

We then had a 2 o'clock appointment with Truman and I told Dennison, "Now, you better just let me handle this. The only thing you do is to say that you heard the story and that you believed that it was correct because you had heard it before." It was getting pretty well spread around by that time. By 4 o'clock that night there was no Oppenheimer. As they say in Spanish, se fue. He's gone.

FUCHS: The Oppenheimer loyalty case then arose sometime after this in the Eisenhower administration, of course. They didn't pronounce him a loyalty risk but a security risk. Did you talk to Lawrence about this after your meeting?

[77]

PAULEY: I phoned him. He's like I am, he speaks a little pigeon Spanish, and I said, "You want to know what happened to Oppenheimer?" I said, "Se fue!"

He said, "You mean he's gone?"

I said, "Yes."

FUCHS: Did you know at Potsdam that the Russians were going to enter the war, and if so, did you interpose any objections with President Truman, that it might be to our advantage to not encourage them?

PAULEY: Yes, I warned him about the whole thing in detail. This was my message to the President, and I am now reading from a top secret document -- which has since been declassified -- dated August 11, 1945. It was sent from my office in Moscow over the private wire that I had to the President of the United States. It's entitled,

[78]

"Reparations Message - Pauley - Urgent - Top Secret - To the President and Secretary of State from Ambassador Pauley. Signed General [John R.] Deane, Military Commander."

Conclusions I have reached through discussions on reparations and otherwise, I repeat, otherwise lead me to the belief that our forces should occupy quickly as much of the industrial areas of Korea and Manchuria as we can, starting at the southerly tip and progressing northward. I am assuming all of this will be done at no risk of American lives, and after organized hostilities have ceased and occupancy to continue only until satisfactory arrangements have been reached between the nations concerned, with respect to reparations and territorial rights and other concessions.

This is directly in point in answer to your question. I knew what was going to happen. I knew what they were going to do. I knew that they were going to move in north of the 38th parallel and never give it back. I knew they were going to take over the Kurile Islands and never give them back; I knew they were going to take over

[79]

the Manchurian railroad and, of course, all the rest of the territory that they took over everything that was worth a damn in China or that Japan had occupied. With Russia it was not a question of reparations, they just took it, and the Soviet Union had a cute little way of saying, "that's war booty."

And you'd say, "Well, what do you mean?"

"Well, the victor's entitled to war booty, that's all. You take what you want."

You take what's left for reparations.

FUCHS: They included everything under war booty?

PAULEY: That's right.

FUCHS: Do you recall other specific problems that you had in studying the reparations situation in Germany?

PAULEY: Have you read the protocol pronouncement that was made by Roosevelt and Stalin concerning

[80]

the twenty billion dollars?

FUCHS: Yes, sir.

PAULEY: My first problem was to rationalize that: How do you get twenty billion dollars after all the assets have been taken out of a country? How do you get twenty billion or any part of it? I found out that no matter what I tried to rationalize they couldn't support. I gave them a few things to think about; and that is that all our losses in natural resources were reimbursable items from war booty. It was more important than anything that they had. As far as I was concerned we were going to start on that, and I said, "I positively will not talk about the twenty billion dollars. You talk about it if it's something you want, but we'll talk about something we want." They gave feeble answers and gestures: "It will be

[81]

forthcoming sometime, someway," they said.

So I said, "Well, we're not going to talk about it." They didn't like that at all. They said, "But your President put it down this way?"

And of course there was one word in there in President Roosevelt's draft of the thing. I've forgotten what it said. Well, at any rate, there was a word which I claimed let me off the hook. They never did agree to it.

FUCHS: There was something about all this being subject to later agreement by the Allies? I know what you're referring to.

PAULEY: I went over this with President Truman, and I said, "The only way I can see that we can come out, is by assessing each person's claim to reparations and dividing it up and putting it on a percentage basis." I said,

[82]

"Is that agreeable with you?"

He said, "Yes."

FUCHS: Did Mr. Truman object to your departing, in a sense, from some of the things that President Roosevelt agreed to? What I'm saying is, Mr. Truman, in the beginning at least, made such a point of following Mr. Roosevelt right down the line, and I am wondering if you got some objection from the President where you felt that logic didn't dictate that you would follow Mr. Roosevelt's policy?

PAULEY: Yes, I did, but I have here a release of April 27, 1945. It is a copy of a release that I made at that time. It's quite a long statement; but boiling it down to one paragraph, I quote:

We [the late President Roosevelt, Prime Minister Churchill, and Marshall Stalin] have considered the question of the damage caused by Germany be obligated to make

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compensation for damage in kind to the greatest extent possible. A commission for the compensation of damage will be established. The commission will be instructed to consider the question of the extent and methods for compensating damage caused by Germany to the Allied countries. The commission will work in Moscow.

Well, if I said that once, I said it a hundred times, that that was the extent of Roosevelt's commitment.

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Third Oral History Interview with Mr. Edwin W. Pauley, Los Angeles, California, March 9, 1971. By. J. R. Fuchs, Harry S. Truman Library.

FUCHS: Do you recall anything about the speech that was drafted for President Truman to make to the joint session of Congress on Monday, April 16th?

PAULEY: The President asked me to assist him with his speech and George Allen had told me that he had also been asked by the President to assist the President on the speech and that he had his man working on it. There also were previous Roosevelt speechwriters working on it. I read it quickly and said it was too much in the vernacular of Roosevelt and I did not think that Truman should set out with that much of a pro-Roosevelt philosophy.

FUCHS: Do you recall anything in particular about it?

PAULEY: No.

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FUCHS: In further regard to reparations, did you feel that I. M. Maisky, chairman of the Allied Commission on Reparations, was an obstructionist?

PAULEY: Personally, he's one of the most agreeable Russians that you'll ever meet. He had served his country as Ambassador from Moscow to Great Britain with great ability and dignity, and fortunately I had met him before when I was working on petroleum lend-lease. So it was easy for us to pick up our conversation concerning reparations from there on. He was, however, a devout follower of the leadership of the Soviet Union and he would refuse to do anything or act upon anything that was in opposition to their views. Although he never actually admitted it, I came to the conclusions that it was he who was more responsible than anyone for the writing of the memo that was the basis of discussion for reparations.

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FUCHS: You thought this was largely Maisky's own work rather than just his acting under orders from his superiors in the Soviet Government?

PAULEY: Well, it was Maisky who wrote the document and it follows pretty well his own ideas, as well as those of other people in the Soviet Union; but he, when shown the obvious futility of pressing this cause, didn't acquiesce to my schemes or formulas, but withdrew his own somewhat. Maisky, to sum him up, was a likeable but not a strong man.

FUCHS: Did you ever arrive at a happy solution over the definition of war booty?

PAULEY: War booty was primarily that what any individual wanted that didn't rightfully belong to him, but that accrued to him by mere virtue of having taken the country and accepting the surrender of the country's leaders. Again, it

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was something that had no legal precedent, although it had been used in other wars and by the Soviet Union in countries that they had overcome. But there was never any legal sanctity behind the seizure. We carefully examined its legal status, but with a mere shrug of shoulders it became profoundly legal to the Russians by the simple statement that it was war booty. In other words, it was a big catchall. On my way with my mission to Moscow we landed in Germany and dispatched contingents to all parts of Germany to see what had been going on since the Soviet occupation. We saw hundreds of trucks and other motor vehicles loaded with household goods, clothes, uniforms, furniture, pretty lighting fixtures, and everything that I would classify as loot, which was claimed by the Soviet Union and taken indiscriminately at the direction of the individual Soviets in command. The members of my mission made careful notes of this, and in each instance the only

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legal rights that they claimed to the properties was it was war booty. Certainly it had no legal definition in the American dictionary.

FUCHS: Another facet of the reparations problem was the attitude in relation to control of German external assets, and the reaching of an agreement on that with the Allied Powers. Would you comment on that?

PAULEY: We had a whole section that dealt with German assets abroad. We had the same thing in Japan, and of course, the Reparations Commission dealt with not only reparations but also restitution, such as several thousand bicycles which were taken out of Belgium and Holland. Most of them had been thrown into the canals by the Dutch to prevent their capture by the Germans, and they ended up in Soviet hands. We couldn't classify it as

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reparations because we couldn't verify ownership. I hope they have straightened that out and everybody's got their own bicycle now.

FUCHS: What was the Soviet attitude about it?

PAULEY: War booty.

FUCHS: I believe a matter came up about the Rumanian and German oil assets. What stands out in your memory about that.?

PAULEY: Germany had some petroleum production at the time of the American and Soviet invasion of Germany. Germany had the very valuable field in Austria, and we, of course, tried to get the petroleum from Germany and Austria, which at that time was in the hands of the Soviets, but we were unsuccessful in doing it. We did it on the basis that most of the petroleum that we were supplying to the Soviet Union was now to the U.S.'s disadvantage because of the

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transportation problems. We were using our valuable tankers to ship this oil to the Soviets, and yet the Soviets were continuing to use these newly acquired oil outputs from Austria and not only that, but some of their own. But we were unsuccessful in getting any of this.

FUCHS: What about the problem of reparations from Italy? How was that resolved?

PAULEY: Theoretically my appointment included Italian reparations, but Italy, obviously, had no surplus of any kind to give to the other Allies, so we made no point of it. There was very little good that could come about by taking reparations from a country that you again would have to turn around and support economically. You'd be paying yourself back.

FUCHS: Did the Russians acquiesce in this?

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PAULEY: They never did acquiesce. They took all they could out of Italy, and when they found they couldn't get any more, then they just left it.

FUCHS: Were you generally satisfied with what you got written into the Potsdam agreements in regard to reparations or were you unhappy about some things?

PAULEY: Well, I was satisfied that we got what we did in light of what the Soviet Union wanted, but it soon became apparent both in Germany and Japan that the Soviets were going to take what they wanted irrespective of whether we agreed to it or not, and they did.

FUCHS: I noted that in 1947, when you were resigning your position as an adviser to Royall, you wrote a letter taking exception to a plan that former President Hoover had, which in gist, I believe,

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was that the heavy industry in Germany should be built back up a little faster. Do you recall that matter and do you have any comments on it?

PAULEY: No, but I always felt about German reparations that you had two big natural resources in Germany, which were coal and steel. I felt that rather than remove the equipment necessary to exploit the oil and the steel, that a certain percentage of the manufacturing capacity should be devoted to pay people reparations out of German production. If we took the plants out, and gave those as reparations payments to our Allies, then we would have nothing left to exploit the coal, iron and steel. In other words, we have to leave the equipment there in order to get anything in reparations. That's pretty well what happened.

FUCHS: In October of 1947, Mr. Truman gave a talk about the economic situation in the country and

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asked for some powers to control the commodity exchange -- in essence he was speaking against grain speculation. Subsequently in January, when you were a Special Assistant to Secretary of the Army Royall, the Senate Appropriations Committee learned of some grain speculation activities of President Truman's physician, General Graham, and of yourself. Why did that matter make such a big headline?

PAULEY: Well, of course, being a grain speculator was not a new role for me. I have been a speculator in real estate, commodities, stocks, bonds, etc. When I took the job with Royall I told him of my heavy, long position in all kinds of commodities, grains, wools, lard, and most everything, and I had been doing rather well in my activities. Some people call it grain speculation, other people say "your investment in the farmers' future." It. all means

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the same thing, and people who regard speculation as being a horrible thing haven't paid careful attention to the economics of the thing., because you actually do the farmer, the producer, a great favor when you buy his material today that he won't be able to deliver for a year. You have assured him of his market. He can go out and borrow, do his farming, increase his crops, and so forth. That's the way I describe my activity in the matter. The mere fact that you do this on the open market creates the feeling that you're doing it as a speculator, and that speculation in, say, commodities is wrong. It's not true, otherwise, they should completely outlaw it. It's a major function that serves the farmer and the consumer well.

Insofar as General Graham is concerned, I don't know whether General Graham had any idea that I was speculating or not, if that's

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the word to use. In doing that, I gave the farmer, the producer of the commodity, an opportunity to hedge; if he wanted to sell it now, he could. He didn't have to. I was just providing him an option to sell it, and he could lock in his profits right now. I don't know about General Graham. I just know he may have heard some of my conversations about it, as did many other people. But at any rate, if you followed the grain hearings, there was one that summed up my total profits to a certain date, and my activity in that regard was most successful. But I have no apology to make to anyone about speculation in commodities. I'm very proud of what I did. I wish somebody was providing that opportunity for me in petroleum right today, that I could sell various degrees of gravity of petroleum for delivery a year from now, five years from now, and so

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forth. But we don't have it in our business.

FUCHS: I don't pretend to understand the economics of this, but Mr. Truman claimed that speculation or dealing in commodity futures was driving down the price. Is that correct? Then, of course, there was an implication that this was some sort of manipulation of the market by investors. Do you think he had poor economic advice on this?

PAULEY: The very nature of a purchase of future commodities, whether it's grain or what, would elevate the price, the sale would depress the price. Now, somebody has to benefit in a free and open market, whether it be the farmer or the consumer. It's which way do you want to go.

FUCHS: After Truman left office, I believe he paid a visit to you on Coconut Island. What do you recall of that?

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PAULEY: I have the fondest of memories of the visit. President Truman, Mrs. Truman and their daughter Margaret were all along and it was Easter; I don't know what year?

FUCHS: It was 1953, sir.

PAULEY: We did everything, swim, sailing, powerboat riding, and even to Easter egg dyeing with my kids, which the President and Mrs. Truman were very interested in. They were all just at the impressionable age. He was so friendly that he made a great hit with our kids. In fact, he formed an organization which he called "The Coconut Cabinet" and all the kids were made an important secretary of the Coconut Cabinet. For instance, the one that is now running for office, Robert, he made "Secretary of Mischief." Steve he made "Secretary of State;" various ones he made other secretaries. I think we have copies around here. They're very cleverly done.

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He did them all himself. Nobody put him up to it.

FUCHS: Just where is Coconut Island?

PAULEY: The island is on the windward side of the Island of Oahu, and it is in a bay called Kaneohe Bay. From the main island of Oahu to the Coconut Island pier is only about a five-minute ride. At the time he came there it was about a twenty-minute ride because the Oahu pier was at a different location. That's the only way you can get to the island. Of course, it was guarded all the time of the President's visit by the Marine Corps. But he enjoyed it very much. In fact, he stayed on a month after I left.

I've had Lyndon Johnson out there, also; and President Nixon when he was a Senator. Many distinguished people have been there. We

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have had Jacqueline Kennedy, and many nobilities from Europe and Asia. It's an easy place at which to entertain.

FUCHS: Do you recall any conversations you had with former President Truman in 1960, when John Kennedy was running for President?

PAULEY: Well, I talked to him at great length about it, and as a matter of fact, I did not support President Kennedy at the convention; I supported Lyndon Johnson. Mr. Truman was always on the same side of the fence as I was about that. I afterwards supported Kennedy very vigorously and so did Truman.

FUCHS: In conclusion, do you have comments about Mr. Truman in general as a Senator and as a President? How do you feel he measured up to the other Presidents of the generation?

PAULEY: Well, I've already compared him with

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Roosevelt and we followed Lord Moran's statement on that, with which I agreed. That leaves only Eisenhower to compare him to, and Kennedy. I'm sure that history will record President Truman as I regard him, as one of the greatest, and I repeat, greatest Presidents we've ever had. He was forthright, determined, but had a nice manner about him. I only wish he were in the White House now.

FUCHS: Thank you very much, Mr. Pauley.

PAULEY: Thank you.

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List of Subjects Discussed

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