Oral History Interview with
Secretary of the Treasury in the Truman Administration,
1946-53. Other Federal positions once held include Executive Vice-President
and Director, Defense Plant Corporation, 1940-43; Assistant to the Director
of the Reconstruction Finance Corporation, 1940-44; Federal Loan Administrator,
1945; Director, Office of War Mobilization and Reconversion, 1945-46.
Secretary Snyder has been a longtime close friend of Harry S. Truman beginning
with their service in the U.S. Army Reserves after World War I.
John W. Snyder
October 30, 1968
By Jerry N. Hess
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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. ) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
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 It may not be published in full except by permission of the Harry S. Truman Library.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 September, 1970
Harry S. Truman Library
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Oral History Interview with
John W. Snyder
October 30, 1968
By Jerry N. Hess
Twenty-third Oral History Interview with John W. Snyder, Washington, D.C., October 30, 1968. By Jerry N. Hess, Harry S. Truman Library.
HESS: Secretary Snyder, we'll continue on with the statement that you were reading last week.
SNYDER: The Reorganization Plan Number One of 1952 had, as you have seen, been put into effect before I left the Treasury in January of 1953. It was the fruition of my hopes and efforts for the Bureau. The presidential campaign of 1952, in which the Republicans were victors, had as one of its features, charges of corruption and cries of scandal in the Truman administration. The campaign charges and cries insofar as the Treasury Department was concerned were based in great part on the investigation of the congressional committees, which had been concerned with situations that had existed in the Bureau of Internal Revenue a number of
years earlier and which had been corrected by this time. The time element and the subsequent correction of these situations were almost completely ignored by those who made political capital out of the difficulties that had beset the Internal Revenue Service. The campaign kept alive old accusations and obscured the far-reaching reforms that I had effected in the Bureau before I left office.
In the light of this campaign it is interesting to note how few basic changes in the reorganized Bureau, which I had conducted and advanced, were made by the succeeding Republican administration. The name of the Bureau was changed to the Internal Revenue Service, but that was simply a sign painter's job. It didn't basically change anything in the reorganization plan. Other than that, the major change was a reduction in the number of district offices from seventeen to nine on the
premise that it would be more economical and more efficient. I did not disagree at all with this move. I had always regarded the reorganization plan as an effective guide in the hands of the Secretary and the Commissioner, and not as a finished program. The changes that were made by me were not considered final by any means, and if I had continued in office, undoubtedly I would have made further changes as they appeared advisable and expedient. But in addition to the few organizational changes effected by the Republicans, we must consider how the Internal Revenue Service fares under their administration. In 1955, two years after they took over the Treasury, the advisory group to the Joint Committee on Internal Revenue Taxation made a study of the service and reported on its findings. This was a Republican dominated subcommittee, I might point out, Mr. Hess. The report sought to assess
the effect of the reorganization plan, and in so doing, it furnished interesting comparisons between the performance of the Internal Revenue system under my direction and under my successor. In general, the report found that morale in the service had grown considerably lower, and that enforcement activities were at a very low ebb, and that revenue was suffering through a lack of vigorous enforcement. I point out that this was two years after the new administration had come in. Such conclusions, of course, reflect some objective factors which may be beyond the control of the responsible officials, but they do serve to inform the public that Internal Revenue problems are not the sole affliction of a single political party. Indeed, such problems have a knack of being decidedly bipartisan, as we have seen through the stories in history of the problems of
administration in Government. It seems a safe conjecture that any man, from any political party, who took control of the Internal Revenue system at the time and under the circumstances that I did, would have faced the same problems that I faced. It also seems manifest that I met those problems, and I say this maybe a little immodestly, but I think I met them realistically, energetically, and as ably as I could when they came to my attention. My problems, such as they were, can be clearly traced to a system that I inherited, a system which deprived me of effective control over many branches of a bureau for which I was responsible. It was an antiquated system of political appointments that had been prolonged into a period in which it had been ineffectual. Nor should it be forgotten that the eventual elimination of such a system, founded so firmly on patronage, must be accounted a major
accomplishment for any administrator at any time.
When I became Secretary of the Treasury I found the Bureau of Internal Revenue in very poor health. Even a cursory examination revealed that it was suffering from administrative obsolescence. This ailment could be treated by a corrective dosage, and this I did, I think, successfully. By a second ailment, political poisoning, required more drastic treatment that could not be undertaken until there was general agreement that drastic steps were necessary to the survival of the patient. The corruption charges that buffeted the Internal Revenue while I was Secretary of the Treasury, were painful to me, since politics dictated that I, as a member of the Truman administration, responsible for the Bureau, be the target of those who hoped for self-gain politically from
these charges. But the charges did finally free me and the Truman administration to undertake the drastic treatment for the Internal Revenue system that we believed the situation required. I myself would be the first to deny that the administrative changes that I made, or the reorganization plan for that matter, completely cured the Bureau of Internal Revenue of its old ailments. But the record would indicate that despite the handicaps and in the midst of a painfully obnoxious situation, our accomplishments along that road were noteworthy. In June of 1952, I received a letter which gave me great pleasure, not only because it gave informed support to my belief that the reorganization of the Bureau of Internal Revenue was a great step forward, but because it also gave expert testimony to the great difficulty involved in taking that step. As such, it summed up my
hopes for the reorganized Bureau, and was witness to the progress that had already been made. The letter was from T. D. Morris, a senior partner in the firm of Cresap, McCormick & Paget, which had been hired to perform management studies of the Bureau, and of the reorganization plan. It said in part:
I will not attempt in this covering letter to comment on any of the details of the progress in the Bureau of Internal Revenue, other than to say that an excellent job is being done, and that the challenge which the reorganization poses to the personnel of the Treasury and the Bureau of Internal Revenue is second to none in the Federal Government, possibly surpassing in the details of its effectuation, the unification of the military services. I want to pass on to you personally our feeling that the results being obtained in the Bureau of Internal Revenue are in large measure attributable to the fine leadership which you and other capable Treasury personnel have given, and to the enlightened use which you have made of outside specialists both in and outside of Government. My firm is indeed proud to have shared in planning these improvements, and is convinced that under the continued leadership and interest which
has been displayed by you and other officials of the Treasury Department, a record will be made in which all personnel of the Treasury Department can take equal pride.
That letter was written just about the time that this group of specialists had completed their report, and had approved the plan, and made such suggestions as they thought necessary, and we were in the midst of pressing all these things to get them accomplished. Of course, the plan was not actually approved by Congress until about six months later, but we lost no time in going ahead with everything we could. And that is what he is reflecting in this letter.
Mr. Hess, I think that somewhat gives the story of the Internal Revenue part of the Treasury during my administration. If you have any questions, I would be very happy to try to address myself to them.
HESS: All right, what do you recall about the
difficulty revolving around the case of Matthew Connelly, T. Lamar Caudle, Irving Sachs, and Harry Schwimmer?
SNYDER: Mr. Hess, those details only came to me in passing. Those are operative details down in the investigative section, which were not in themselves administrative or policy-making. Of course, most of these investigations, as you recall, came after I had left the Treasury, and therefore I was not in position to follow the day-to-day details that I would have done, had I been in a position where I could get accurate copies of testimony and procedures. But my impression was, and from the information that I received from good sources, that a tremendous effort, an undue amount of effort was made in prosecuting these cases, and that the investigators in the Justice Department, largely, had spent a tremendous amount of funds
and energy and usage of valuable personnel of the Justice Department and the Treasury, in running down all these various avenues to come up with what their final end result was. I'm not defending in any way any misdemeanors, if there were any, on the part of the individuals, but I am pointing out, that it was so particularly political in its purport, and was shown up to be how shallow it was when we recall later how carefully they avoided even more gross misdemeanors in the Republican Party at a later time, for the very same accusations that they put against these people you have just mentioned. I have always felt, as I've said, that it was a tremendous effort of the mountain laboring and bringing forth a mouse, when compared with the excellent uses to which these same forces could have been used to improve the Justice Department and the Internal Revenue operations.
I understand that at one time there were some forty Revenue investigators from the Treasury working on running down these various rumors and charges. Again, in closing that question, I don't pretend to try, and I don't want to leave the impression that I'm trying to justify any misconduct on the part of individuals in any administration.
HESS: Do you believe there was misconduct in this case?
SNYDER: Yes, probably there was. I think some pressures had been brought to bear that would have been better handled in a different way. As to the monetary awards that were given these people for what they did, I can't speak for some of them, but I think particularly in Mr. Connelly's, what they found in their final findings were, I think, a present of a suit of
clothes and possibly an overcoat. That I think is pretty minor when it comes to the tremendous number of cases that were glibly passed by later by the Republicans when it concerned members of their own party. So, the only point that I'm making here is, the inequity of an incoming party's attempt to blacken the outgoing administration's reputation with matters which are against the greater good for administrative operations, would indicate that they spent a lot of time on something that wasn't very productive. I can't look back and see any great continuing good that was done from these investigations that they made, and the prosecutions that they conducted. Of course, if you want to be strait-laced about it, you can say that misdemeanors in Government are reprehensible and should not be countenanced and should be properly punished. I can't go against that,
although I do feel like sometimes we must take a degree of judgment in deciding what is the best long-range view of the good that's going to be accomplished before we spent tremendous amounts of money for trivial matters which ought to be normally disciplinary actions on the part of the Government. Again, I want to be very cautious about this, I never at any time, tried to soften or to change the course of any investigation while I was in office. Does that answer your question, Mr. Hess?
HESS: Yes sir, but I have a couple of other questions on this matter. Here we have a case where a man accepted, among other things, as I understand it, a suit and a topcoat. In the following administration there were some vicuna coats, and some oriental rugs. Why in one administration did the person that accepted it go to jail and the next administration, Mr. Sherman Adams, just
departed from the White House?
SNYDER: That's the question that I raised regarding the bias that was shown there was so grossly political and costly that I couldn't measure the extent to which these prosecutions were actually persecutions.
HESS: One other point. I have heard that Herbert Brownell, Mr. Eisenhower's attorney general, set up a special unit in the Department of Justice to find charges that might embarrass Mr. Truman. Is that true?
SNYDER: Yes, there's no question about that. I don't recall the names of those, but there was one chap, I think, from California, who was one of the deputy attorney generals, I believe. There were three or four who were specifically charged with trying to find something that would cast reflection on the Truman administration.
I think that can be easily established.
HESS: I have one other question on this general subject. In one of the cases involving the Bureau of Internal Revenue, a Chicago lawyer, named Abraham Teitelbaum, stated that two men by the name of Drank Nathan and Burt Naster, told him they could fix a tax case for him, and that the men in Washington who could arrange the fix were T. Lamar Caudle, the Assistant Attorney General in charge of the Tax Division; Charles Oliphant, General Counsel of the Bureau of Internal Revenue; and Jess Larson, Chief of the General Services Administration. What do you recall about that episode?
SNYDER: I frankly did not know a great deal about those charges. I was not informed. I doubt the accuracy of the accusation, but I can't speak with authority.
HESS: The names of several of these gentlemen have been brought up previously in our interview, such as Charles Oliphant and T. Lamar Caudle, but Jess Larson's name has not been.
SNYDER: I do not know of any actual proof that Jess Larson ever violated propriety in his administration of his duties. I'm unaware of any misconduct on his part. I think that the accusations against Mr. Oliphant are grossly overstated. It may have been a matter of misjudgment on his part in accepting airplane rides, or dinner entertainments, or certain extensions of credit, but I think it was not an attempt at accepting remuneration for what he did, but as I say, a misjudged acceptance of friendship.
HESS: One other question on this. We had mentioned that George Schoeneman was connected with the
Bureau of Internal Revenue, and you mentioned last week about his resignation. Just what was your working relationship with Mr. Schoerieman at the time that he was in that position?
SNYDER: We were very close, but I put him in there and charged him with doing everything within his official power to reorganize the Internal Revenue operation, upgrade its efficiency, and to clear up the reports that we were receiving of misconduct. He attempted to do that with what vigor he had. Unhappily because of his long experience in Civil Service, it was difficult in the earlier days for him to face up to the fact that some of the people that he had worked with could possibly be guilty of some very wrongful acts and make some very wrongful decisions in office, and take some very erroneous steps. And when these truths began to dawn on him, it had a very, very detrimental effect on his own efficiency and his
own vigor with which he could approach these problems, which were rather devastating. And it began to affect his health, and for that reason, upon his request to step out, I accepted his resignation and replaced him with Mr. Dunlap.
HESS: Mr. Secretary, what can you tell me about the activities of the committee headed by Congressman Robert W. Kean of New Jersey, shortly after the end of the Truman administration?
SNYDER: I think the best way to get an appraisal of what was done by the Kean committee is for me to hand you a memorandum that was prepared on the activities of that committee largely. It was a reorganization of the old King committee that had wound up and turned in its final report in December of 1952, but when the Republican administration came in, they reactivated that
subcommittee and pursued the investigations into the administration of the Internal Revenue laws. Robert W. Kean, a Republican representative from New Jersey, was made chairman of this House subcommittee. This study was made by a professor of economics and political science at Georgetown University, and he turned this report into me covering the operation of this committee, and the type of investigation and reporting that they did during some eleven months in 1953. This report was written and prepared in June of 1957, and I'm going to hand this to you, and make it a part of our procedures.
HESS: What is your opinion as to its accuracy and thoroughness?
SNYDER: I think that insofar as reporting accurately what was put in the report and the accuracy of the refuting statements, that they are accurate.
The thoroughness of the report, this report, this memorandum, I think that there could possibly have been greater research into the operation, but I must always point out that this was an attempt to examine into a hostile committee and the reviewer here, the researcher, had difficulty in getting at certain records and so forth. As to the thoroughness of the Kean committee, I think that there is no doubt but what they were seeking only one end result, and it was not a thorough investigation in any sense. They never gave me an opportunity to testify, although I offered several times to submit testimony. I was never called at any time on any of these six cases, on which Kean himself stated that they had based their entire eleven month's investigation.
HESS: What can you tell me about the circumstances surrounding the background of the writing of this report?
Did you talk to Colonel [Charles H.] Kraus while he was writing this report?
SNYDER: Yes, I talked to Mr. Kraus several times. I was indignant over the manner in which the Kean committee had operated, and he volunteered to make an investigation, which I was pleased to have done. I think I've mentioned to you several times in our interview, Georgetown has worked with me very closely in many areas, therefore we did have a very warm rapport with the various university departments, so it was pleasing to me when the professor of political science offered to do such an investigation, and I felt that such research would definitely be a third party investigation of the matter, and should be an unbiased report.
HESS: We can include the report as Appendix A to our oral history transcript.
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