Harry S. Truman Presidential Library & Museum

Oral History Interview with
John W. Snyder

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.

Washington, D.C.,
January 15, 1969
By Jerry N. Hess

[Notices and Restrictions | Interview Transcript | Additional Snyder Oral History Transcripts]

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.

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 It may not be published in full except by permission of the Harry S. Truman Library.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
Independence, Missouri

[Top of the Page | Notices and Restrictions | Interview Transcript | Additional Snyder Oral History Transcripts]

Oral History Interview with
John W. Snyder

Washington, D.C.,
January 15, 1969
By Jerry N. Hess



Twenty-fifth Oral History Interview with John W. Snyder, Washington, D.C., January 15, 1969. By Jerry N. Hess, Harry S. Truman Library.

HESS: Secretary Snyder, in George Kennan's Memoirs pages 458 to 462, he speaks with considerable directness of the involvement of the Treasury Department, and yourself in particular, in the matters pertaining to the possible devaluation of the pound in 1949. After having reviewed those pages, what are your comments?

SNYDER: Mr. Hess, there's no question in my mind but what Mr. Kennan is a very capable career man, trained in the State Department of the United States. His performance of his duties with the State Department has made a very good record. The only problem that we find is that Mr. Kennan's education and training did not also include matters of finance. They were largely diplomatic and it appears that Mr. Kennan,



like a great number of his confreres was somewhat of an Anglophile. He had the apparent notion that the resources of the United States were inexhaustible and that they should be employed to the greatest extent to relieving some of the economic and financial problems of Great Britain and particularly England. He takes up the matter in his book in regard to the talks that came up -- which were called financial, economic talks by everyone -- that those were matters of diplomatic settlement and arrangement, not on the basis of any sound structure for the future, but meeting the present situation in which Great Britain's government found itself. There's no question in my mind, and we made it clear continuously, from the time I went into the Treasury, up until the time I left, that we were most sympathetic, we had the warmest feelings towards Great Britain and the respect



for the part they had played in World War II. We can go back even further, as I had that feeling in World War I, because I was a participant in that conflict; and without doubt, Great Britain took a very valued and effective part in World War I, and certainly repeated that tremendous showing of great courage and great tenacity in World War II. But we were now approaching a time of trying to straighten out the problems that were brought on by World War II, and chiefly among them were some very intricate and difficult economic and financial problems. Actually, the conferences and discussions that Mr. Kennan approaches in his book, in the pages to which you refer, really started back in 1947. The problem probably started in 1946 when the United States made a loan of three and three quarters billions of dollars to the British. The loan was very controversial. We had many of our bankers,



our Congressmen, and our businessmen who were not at all pleased with the manner in which the loan was set up. There were some, however, in our Government, who felt that it should have been much larger, and there were some, including me, who had doubts about the structure of the loan that was finally made. I had had some experience and certainly a great deal of research on the manner in which the settlements were made after World War I, and those countries with whom we made many of the settlements had been devastated by the war, and were left flat on their backs. To make loans to nations under such circumstances was not realistic, and many of those loans, none of which were paid, except Finland, actually caused a lack of concerted work in later years, and caused many hard feelings between countries, and finally most of them have been disposed of one way or another, without actual payment.



HESS: On the subject of the 1946 loan, I have read that some people in the United States opposed that loan to Britain because the Labor government was in power in Britain and was asserting greater state control over the economy and narrowing the area of free enterprise. How did you feel about that matter?

SNYDER: That was definitely the thought of a great many of our businessmen, our bankers, and a great many of our Congressmen too. Of course, at the time, we must go back to the time now that we are discussing and place ourselves in a position in 1945 and '46. We must remember that the Labor government was as of then untried, and it had not had an opportunity to demonstrate its capacity for national leadership, much less world leadership. Of course, we must recall that Great Britain, the British Empire, was an international power as well as a national one when the Labor



government took charge in the summer of 1945. There were those that had grave doubts that from the philosophy and the policies that they had announced in their campaigns and in their assumption of the government, that their views were workable, particularly their advocacy of nationalization of industry and finance.

HESS: What was your view in 1946?

SNYDER: My view in 1946 was that the loan probably was as much as we should have made them, but I felt, and very strongly, and the record shows that I felt that a good part of the loan should have been an outright grant with no repayment problem, but I also felt that there should have been a greater pre-planning of how the money was to be used, because it was later provided that it was from poor planning that their great troubles came. Because Hugh Dalton, who was the Chancellor of the Exchequer of the Labor government at that



time, used very poor judgment in pouring out the proceeds of the loan to the British colonial countries that had built up large pound debts that Great Britain owed to them, and in a moment of great largess he paid off two or three of them which exhausted to a great extent the entire loan, and built up no good will as it turned out with those countries; and so therefore, I think that the principal expenditures of the three and three quarter billion dollar loan was very unhappily squandered.

Then we came to 1947, at the time that we held a World Bank and Fund meeting in London. Hugh Dalton brought this matter up at the time and said it looked like they were going to have to have further financial assistance, even before they had yet spent the funds of the first loan. He began to see it was going to take a greater amount of funds, subsequently, to



meet their, I would say, grandiose idea of paying off some of these debts that they had. They began to again approach the idea that they wanted to fall back on the multilateral exchange rates that had been so prevalent prior to the war. So our first talks then actually started in 1947. The British muddled through until the spring of 1949. That year the World Bank meeting was to be held in the United States and there was no doubt but what a great deal of discussion would come up on the European financial and economic situation, and among these, chiefly, Great Britain's problem. Sir Stafford Cripps was Chancellor of the Exchequer at the time, and he began to make statements and word was leaked out that he planned to lay the whole cold matter of the British economic plight before parliament. We had made a study over here of the situation. The National Advisory Council of the United



States Government made a very careful study on the international monetary and financial problems, and presented a report to President Truman in the summer of 1947 which he sent up to Congress. The contents of that study became known, and this accelerated Sir Stafford Cripps' intent to place the economic condition of Great Britain before Parliament. At that time, in order to lay plans and to agree on some policies for guidance in our discussions in the World Bank and Monetary Fund meetings, which were to be held in Washington in September, I planned a trip to Europe in July to talk to our own Treasury representatives and to see how things were moving in the various member countries in Europe, and to particularly talk with Maurice Petsche, who was the Minister of Finance of France at the time, and was to be the joint chairman of the meetings of the Bank and Fund in the United States



in September. It was a preparatory program to try to have our meetings run more smoothly and more productively that caused this trip to be planned.

HESS: What were your findings from that trip?

SNYDER: Well, I want to go just a little bit further here. Again, Sir Stafford Cripps accelerated his program and by the time I arrived in Paris, which was my first stop, we were having frantic calls from London to please come there on our next stop and discuss these matters with Sir Stafford Cripps and Mr. [Ernest] Bevin, the Foreign Minister at that time, and with the Bank of England. I think before we get into any discussions back and forth I want to point out that the papers, both here and in Europe, took a great deal of space to thrash this all out before I ever got over there, and after I



arrived. It had been my plan to go to Paris and London, Brussels, Stockholm, Geneva, Rome, Athens, Ankara, and Cairo, and get a pretty good view of conditions by talking with ECA representatives, our ambassadors, and with our Treasury representatives in those countries. The matter got into such a turmoil, I would say, because there were statements back and forth, most of them coming from some of our own United States representatives, who were pressing for these to be diplomatic discussions, rather than financial and economic. If you go through the newspaper clippings which I have laid out here for you, Mr. Hess, you will see that the papers did not take, generally speaking, anywhere near the attitude that Mr. Kennan took. As a matter of fact, some of our papers here were extremely complimentary of the manner in which the meetings were held, and were not nearly as critical of the incapacity of the Treasury



to handle financial affairs, as was Mr. Kennan. Now, in order to get this picture somewhat organized I would like to read into the record a paper that I have prepared on this subject, if that's agreeable with you. And then we'll discuss any questions, if you'll just keep notes as we go along; if there are any questions that subsequently we want to go into, we will.

In the years from 1947 through 1949, Great Britain went through a series of crises in her economic life. These crises occupied much of my time and attention and were a major item of concern to the Western World. To some nations it appeared that the United States showed favoritism by conducting extensive, bilateral financial negotiations with the United Kingdom, while at the same time urging other European countries to settle their problems through the Organization for European Cooperation, which



grew out of the earlier CEEC. France was in this position, but the United States explained its position by saying that relationships between the sterling and dollar areas were the concern of first importance to the governments which are the centers of the two currency systems. To understand the postwar financial situation of Britain, we must glance briefly back to the period before World War II. There we find that Britain was still a powerful creditor nation, with a huge empire to which it acted as banker and financial manager. The war put a critical strain on Britain's financial resources, leaving her with a rundown economy which needed American goods in order to rehabilitate itself. As we recall, England, particularly, was an entrepreneur nation. They had great skills, they had great banking facilities, great insurance facilities, and they had great industrial



facilities, but they had no raw materials, and so they used to import raw materials, process them, and then market them throughout the world.

In the postwar period, Britain was a debtor to the United States, but its position at the head of an empire dictated that so long as possible, it remain a creditor to its dominions and colonies. This split financial personality had its effect on Britain's postwar situation as I mentioned just a moment ago. When the Anglo-American loan was closed in 1946, amounting to three billion, seven hundred and fifty million dollars, it had only been a matter of months since lend-lease had ended. Great Britain was a major beneficiary of lend-lease, but an American public and government, which had been willing to undertake these wartime grants was not willing to do the same immediately after the war to a nation which was not only a trade competitor but



which still possessed an apparently rich empire. The United States properly insisted not only on offering aid only through a loan, but wrote into the loan agreement requirements that Britain assume the obligations of correcting multilateral exchange rates. One of our prime foreign economic objectives in setting up the Fund was to try to get a better exchange position between the trading nations, and this included convertability of currency and the lowering of trade restrictions. It was the United States' position that we should only help them through a loan. Personally, as I mentioned a while ago, I had a feeling that a considerable part of that initial loan should have been a grant. What happened in the succeeding months is an unhappy story in which there is no blameless hero or a completely evil villain. There is enough blame to go around for all of us. With the end of



1946, Britain took steps to develop a system of sterling convertibility, that is, to allow holders of sterling to convert it to other currencies, primarily dollars, as required by the loan agreement. A deadline was fixed as of July 15, 1946 when convertibility would be inaugurated. Events up until that time had filled leaders of both governments with optimism. The dollar deficit in the last quarter of 1946 was one and a half billion dollars annual rate, which was not considered a very serious amount at the time, but with the elimination of discriminatory import controls, there was a sharp rise in the demand for dollar goods, and the dollar drain in the first quarter of 1947 grew to two billion, seven hundred millions of dollars. The rate increased to three billion, eight hundred million dollars in the second quarter of the year. To meet these growing deficits the British increased their drawings



on the loan. The July 15th deadline on convertibility and trade restrictions brought the British dollar crisis to a head. In the weeks following, the drain on Britain's reserves to pay for dollar purchases reached alarming proportions. By August 16, 1947, only eight hundred fifty million dollars of the Anglo-American loan remained, and at the then current rate, that would have lasted only about another month. Thus, in a little more than a year and a half, a loan that had been intended to last five years, had been largely exhausted. It was clear that Britain was not in a position to carry out all the multilateral trade obligations it had reluctantly assumed in the loan agreement. But there was another side to the story. One of the major drains on the loan was the war-created, sterling balances held in commonwealth countries of the British Empire which the government allowed



to be converted into dollars. This was in conformity to Britain's position as head of a great empire, but it did not conform to the realities of her economic situation. It was my opinion that the loan agreement requirements referred only to future transactions and thus Britain could have frozen the war-created, sterling balanced held by her dominions and colonies without violating the loan agreement. In addition I felt that the London government had been dilatory in getting its affairs in order before putting into effect the multilateral provisions of the loan agreement. The principal figure in these British attitudes was Hugh Dalton, the Chancellor of the Exchequer of the Labor government. He, along with many others, had been misled by the events of 1946 into thinking that Britain could successfully withstand multilateralism. Events later proved this



opinion to be wrong. In my dealing with Dalton I found him far more of a doctrinaire socialist and much less of a realist. These attitudes were reflected in the British government's actions and reactions during this period. On the American side, I also found ample grounds for criticism. The loan agreement negotiated by my predecessor [Fred M.] Vinson, had been too rigid in its details to be adapted easily to later situations. The American insistence on inclusion of multilateral obligations in the agreement was consistent, but it failed to take account of Britain's economic and political situation as the head of an empire. I was also of the opinion that the Americans had been wrong in insisting on the entire three and three quarter billion dollar amount be placed on a loan basis. I mentioned that previously. At least part of this, if not all, I thought, should have been a



more realistic attitude and the one that would have shown the most profit in the long run. However, I did point out that it might have been impossible to have foreign grants of any magnitude approved by the Congress in 1946 just after we came out of the great expenditures of the war, and before we had a full understanding of the problem of reconstruction and rehabilitation.

In mid-August of 1947, the British, taking alarm at their grave situation, sent a delegation to Washington headed by Dalton's assistant, Sir Wilfred Eady, to discuss matters with the United States representatives. The result of these conferences was the suspension of the convertibility privileges and the halting of further withdrawals on the loan. On December 5, 1947, the two governments agreed after an exchange of letters between Dalton and me to resume withdrawals on the loan, and I expressed at that time an



understanding that Britain's serious economic conditions would delay the restoration of full convertibility, which we all regretted very much. The Eady mission to Washington was only the first of a number of such conferences in which I was the leading United States representative. Such meetings were touch matters in the extreme, due largely to the fact that a segment of public opinion in the United States was opposed to any and all assistance to Britain and to the fact that a segment of the public opinion in Great Britain apparently thought their country was due unlimited aid from America, but that it was a reflection on the British character to have to accept it. In the United States, a number of newspaper editorials declaimed against allowing the British to suspend the multilateral provisions of the loan, and one newspaper cartoon depicted me as acting as a



waiter on Eady and his companions who were showing a sort of lethargy towards the whole problem. In Britain, where word was circulated via the press that I was a thorn in the side of Eady and his delegations, a popular image of mine at the time was an iron-bound, midwestern conservative, with traces of Anglophobia, and this sort of image was built up generally in the British press, at the time. In this respect, it is pleasant to note that at least one British public opinion organ, and it wasn't the only one in any degree, the influential The Economist, a short time later after these meetings, reversed its earlier stand and in effect apologized to me for the position it had taken. In its issue of September 13, 1947, The Economist said:

Mr. Snyder has in fact been unjustly represented to the British public. For the first few days of Sir Wilfred Eady's negotiations in Washington last month, the press dispatches reported that he was meeting with difficulties at the hands of the Secretary of the Treasury.



This led The Economist in the issue of August 23 to take Mr. Snyder as representative of that section of American public opinion which still cannot see the degree of America's responsibility for what is falsely called 'the sterling crisis.’ But within a day or two the earlier reports were reversed and it became apparent as our correspondents from Washington emphasized in the following issue that in fact the Secretary of the Treasury had been the most understanding and helpful of the American officials with whom the British delegation had to deal. The point is perhaps a small one: There are unfortunately all too many Americans, even if Mr. Snyder is not among them, who persist in regarding the world's economic crisis merely a contrast between wise virgins and foolish virgins. But since injustice was done to an individual it is right and proper that it should be corrected.

The position of the American public in regard to offering additional assistance to Britain was complicated by the fact that Britain's government was a Socialist-Labor one. To one group in the United States this meant that no help should be given unless and until the Labor government was deposed. To another group it meant that all possible assistance should be given to keep the Labor



government from falling. I was not a member of either faction, and this, of course, made me a target from both sides. It was my duty and my personal preference to regard the Labor government as the representative of the British nation and not as the representative of socialism. As to the effectiveness of the Labor government, I at the time expressed no opinion. However, I did point out later that the ascendancy of the Labor Party after the war was not an instantaneous phenomena and should not have been a surprising one. The war itself had delayed the rise of the Labor Party to power, a rise that had evidently been coming on in the late thirties. The Conservative Party with a generally poor record in the economic field between the two wars had allowed the British economy to become out-dated. In my opinion it was inevitable that the Labor Party should be allowed to get their



feet wet in the government and be forced to mold their Socialist doctrines to fit reality. Without this opportunity there would have been a possibility that the Labor Party would have been indifferent to the conduct of public affairs. Since the Labor Party was, in general, representative of the British working man, this would have been a very serious development.

Marshall plan aid in 1948 and early 1949, contributed significantly to the recovery of the British economy, but it did not solve the country's basic difficulties in trade. Britain continued to need to import great amounts of goods from the United State, and its efforts to earn the dollars necessary to pay for these purchases by sales of its own products abroad were not wholly successful. The situation again became grave in the late spring of 1949 when it became evident that Great Britain's gold and dollar reserves were being depleted rapidly. On top of this, it



was known that ECA aid would be reduced that year. The new dollar crisis in Britain, as it was popularly known, crystallized for the world an economic problem that had been evident to economists since the early postwar days. This was the world-wide problem of effective and realistic exchange rates between currencies. After the war, the purchasing power of the currencies of the countries hardest hit by the war declined substantially. A situation where countries attempted to maintain the purchasing power of their currencies through artificially high exchange rates was an unstable one for world trade, and the United States under my leadership had for some time directed the attention of the Bank and Fund members to the problem. And that was brought out more clearly in that report that we made for the President in the National Economic Council in 1947, which



he sent up to the Congress later. We had seen that problem as early as 1948 when we advised Congress that some exchange alterations could be expected in the course of the European Recovery Program. However, the United States, while anxious to see realistic exchange rates adopted, insisted that the matter should be worked out between the various countries and the International Monetary Fund, and not on bilateral agreements between member countries of the Fund. In spite of this, it was generally recognized that the key to the exchange rate problem lay in the British pound-American dollar area, and thus it was that the actions of Great Britain and the United States were looked upon as, and in truth were, more able to bring about widespread adjustment in exchange rates than the Fund. That was the conclusion of a great many of the financial students at the time.



In the postwar period, the British pound was in an unenviable position. Its official value was set at four dollars and three cents, but this was clearly far above its real value. Such an inflated exchange rate was reflected in the prices set for exported British goods. They were not competitive, and for a country which desperately needed to sell more and more abroad, this was a deplorable situation. Once the sellers market, which prevailed in the first years after the war, had disappeared as a result of increased production world-wide, the situation became critical. Devaluation of the pound sterling was widely discussed in the months leading up to the summer of 1949. But insofar as the discussions were held they were strictly unofficial. The United States, and of course it was my position, retained a discrete silence on the matter. In making a tour of various treasury offices in Europe in 1949, I spent



three days in confidential financial discussions with British officials. The talks were described accurately as exploratory aiming towards further conversations where concrete decisions might be made. In these exploratory conferences it was intimated quite broadly that I recommended devaluation, although I assure you that I did not discuss the matter directly in any fashion. I might say that the British apparently, beginning in early 1949, had been trying to get the United States to insist on devaluation but we had carefully avoided doing so, and published articles in the newspapers to the effect that president Truman advocated devaluation were not true, but were just rumors that had been published through planted stories.

The London meetings led to considerable technical and fact-finding discussions between representatives of Britain, Canada and the United



States in Washington the following August, and were followed by ministerial discussions in September at the Bank-Fund meeting. At the beginning of the September meetings at which I participated, the British representatives announced that the pound would be devalued. They did this without any pressure from the United States. The new rate was fixed in the course of the discussions at two dollars and eighty cents, and the decision was later announced to the world. The devaluation of the pound sterling was one of the major economic reorganizations of the postwar period. The question must be, "What was my role and that of the United States Government in accomplishing this?" I can say to you that there can be no doubt that the British reached their own decision without dictation or outside interference. I was most careful in all these conferences never to



urge devaluation upon the British, although I believed that it was a necessary step to economic stability in that country. However, there is little question as to my attitude. This was an attitude of waiting for the British to come forward with their own suggestions and plans rather than to offer plans to them to contribute to a decision by them. The British thus came to realize that it was up to them to take whatever steps they could to ease their position before appealing to the United States. Now this was the point where Mr. Kennan took his great exception. He felt, as his book clearly shows, that the United States should propose a plan to Great Britain, and say, "Here is the way to work it out, and we will help you do it." That would never have worked, and we know it wouldn't. Our Congress would not have accepted such a proposal. We would have had great opposition from Congress. This was a



financial and monetary matter that had to be worked out, and not a diplomatic one, solely, as Mr. Kennan so frequently says in his book. Frankly, I think that the very foresight that some of us took in measuring the situation at that time and particularly as to the capacity of the Labor government to perform as world leaders and as domestic leaders, has certainly been more than confirmed by history in later years, because their whole aspect and performance and negotiations were such that have brought about the partial dissolution of the British Empire. It was most interesting in connection with this, that an article was written by one of the New York Times columnists at the time. Columnist Arthur Krock in his column of September 20, 1949, gave an illuminating account of the pressures that had been brought on me in these meetings, and of British reactions to



me. His column, which shows the benefit of extensive contacts among high level Government officials, both in this country and in Great Britain, is quoted here in part:

The British came to their hard and reluctant decision on their own and in submission to realities of their situation which no amount of ‘Government planning' could remove. The United States, spoken for by Mr. Snyder, made no attempt to do more than give its view of these realities and only when that view was sought... In the nature of things the State Department attracts political and economic theorists who, impatient of the restraints implicit in a two-party system, in the executive-legislative partnership of the United States Government, and in the principle of an orderly budget evolve grandiose plans to dispose of every trouble that afflicts the solutions of the British issue that rose above such other considerations. And when it inevitably developed that the Treasury could not sensibly go along with them, the paperwads began to fly at Mr. Snyder's head.

He was, in publications sympathetic to these plans and planners, 'tightlipped.' He was 'narrow.' He was 'timid.' He was urging devaluation on the British. If the whole business were not turned over to Mr. Acheson the United States would be



saddled with the heavy burden of interfering in the internal affairs of the United Kingdom with the consequent plunge of the non-Soviet world into bitter dollar-sterling warfare in which American free enterprise and British socialism would badly damage each other to the benefit of the Kremlin.

None of these things happened. The British representatives went home purged of the suspicion or belief that the Administration's economic policy has as its sine qua non the downfall of political socialism in the United Kingdom. And they came here with the devaluation of sterling already decided, to reach in friendly conference a conclusion as to the point to which they could lower the international pound. Sir Stafford Cripps [head of the British delegation] in his radio talk yesterday [at the Press Club] spoke from the written and unwritten record of the Washington conferences when he called them the 'most frank and comparative talks in which I have ever taken part.'

Our decisions were reached at the Washington conference, but devaluation overshadowed them all. Five months later devaluation had spread throughout the sterling area and into many other countries as well. Twenty-eight nations had lowered the exchange rates of their



currencies, except Russia chose this occasion to push its exchange rate up, which was meaningless, of course. That this devaluation was needed and beneficial cannot be doubted. From 1949 until the middle of 1950 when the Korean war broke out, world trade showed promise of stabilizing itself and devaluation must get a share of the credit. Yet, devaluation in itself was not the complete answer, as I believed it was a first and necessary step and it had to be taken before other problems could be solved. But if it had not been followed up with other economic measures the end result would not have been so impressive. That my decision that devaluation was correct is proved by the improvement in world trade patterns, and by the improvements in the situations of individual countries that took place in the period following the meetings in September 1949.



HESS: All right. Now, I have several questions about what we have covered. You stated that a group believed that all possible assistance should be given to the British to keep the Labor Party from falling. What group did you have in mind?

SNYDER: Well, we had quite a number of our diplomats in the State Department who felt that it was incumbent upon the United States to keep the Labor Party afloat. I had no more notion of that sort than is my belief that it is incumbent upon the Labor Party or the Tory Party of Great Britain to bolster the United States and keep it going, which of course has never been dreamed of in all history.

HESS: Why was that their view? Why did they think we should help the Labor Party in that way?

SNYDER: It was probably the seedlings of the great



liberal movement that developed in this country later.

HESS: You mentioned that a segment of public opinion in the United States was against the assistance to Britain. Just where did that segment of public opinion seem to center? Was it in banking centers?

SNYDER: It broke out first in our industrial areas, then it got into the banks, the banks wavered back and forth; one time they were opposed, another time they felt like we should help out in financial adjustment when they began to find that it was going to weaken the currencies of other countries with which they were having financial dealings. In Congress there was some considerable opposition to our taking any position of this sort. People were beginning too to awaken to the fact that we had



great obligations of our own, and we had to start getting our own production in motion on a profitable basis, and that we had our own economy to support and our own tax burdens to meet. So the majority felt, frankly, the majority in the United States felt, that we should go very slow on too grandiose assistance to Great Britain at the time. It was strictly felt that Great Britain ought to step in and do more for herself.

HESS: You mentioned that Mr. Dalton was quite a doctrinaire socialist. Could we develop that just a little by an example, or two, perhaps?

SNYDER: Oh, by all of his statements. You'd have to go back and read his speeches, his statements before the Parliament, you'd have to read the proposals that he made to the Parliament for action by the government both in economic, monetary and political matters.



HESS: Did you have very many dealings with him during that period of time?

SNYDER: Well, of course. At that time, I as the Secretary of the Treasury was having considerable contact with all of the member countries' ministers of finance. And as Great Britain had been one of our very closest allies during the World War II, it was very necessary that we have close and continuous conversations between the ministers of finance of the two countries.

HESS: Was he a difficult man to get along with?

SNYDER: Oh, he was impossible. I mean, he was very smiling, and open-armed, very openly congenial, and yet he would do some very unexpected and believable things when it came to our relations. And he would take steps that made it impossible at times to go along with him. He had no



sense of balance or reality, as I put it awhile ago.

HESS: What was President Truman's view about the devaluation of the pound?

SNYDER: Mr. Truman did not express any views at any time. He kept completely removed from it, and I do not want at this time to put words into Mr. Truman's mouth. I do want to state though that certainly not up until the decision was made by the British did Mr. Truman ever make any statement as to his views, one way or the other.

HESS: On the subject of who should conduct the meetings, the Treasury Department or the State Department (we have mentioned that several times this morning), but I want to read one sentence from Kennan's book and get your view on that. He says:



For obscure reasons of domestic politics which to me remained unfathomable, it was decided that the talks should be conducted not by the Secretary of State but by the Secretary of the Treasury, Mr. John W. Snyder.

Did "reasons of domestic politics" enter in at all?

SNYDER: A very important reason was that President Truman insisted that those conferences be conducted by me with the assistance and cooperation of Secretary Acheson.

HESS: Did politics enter into that decision?

SNYDER: If you call Mr. Truman's decision political. He made the decision himself, and not after conferences or discussions or debate. He made the decision himself that I as Secretary of the Treasury -- you see, we forget the fact that I was the chairman of the National Economic Council, and quite properly, these things came under the



purview of that Council's deliberation. I had no problem with Secretary Acheson regarding this matter. He was most cooperative, and if he ever took offense at the setup of the meetings, I was unaware of it. We did run into some real problems there initially; it was the British that were cold and aloof when the meeting started. The expressions that Mr. Kennan referred to as my outrage at the very thought of the State Department having a part in this is somewhat ridiculous compared with the actual public statements that were made, and at no time did I oppose a warm reception for the British. I did not want to leave any impression that we were just waiting for them to come over for us to offer to solve their problem. I felt that it was necessary for the future, for the future welfare of the relations between the two countries and the United States' position in world affairs,



that the British should come up with a solution to their problem which they had carefully thought out and which they could decide that they could do, rather than for the United States to offer a solution without knowledge as to their capacity to do it, and certainly we shouldn't offer a solution that was all favorable to the British. If we had offered a solution that was too restrictive, we would have been at fault. If we had gone too far, our own people would have found fault with it. So it seemed to me only a very realistic position to take, and sympathetic at the time with the problems, because we gave full consideration at all times to the British view, as was demonstrated by Sir Stafford Cripps' statement at the Press Club, that he couldn't have had a better reception, and I've just quoted what he said that was one of the most constructive to the discussions on the subject



that he had ever attended.

HESS: On the subject of the reception that the British delegation received, Kennan mentions a speech which the President gave in which he referred to the forthcoming arrival of the British statesmen, and that was a speech before the American Legion convention in Philadelphia in August of 1949, he said that he suggested some wording for the speech, and then stated in his book:

When this speech appeared in the papers, on August 30th, the general reception was highly favorable, but I later heard that it was the occasion of much anguish, and even phone calls of protest to the President, on the part of Secretary Snyder, to whom a friendly word of this sort appeared to harbor sinister dangers.

SNYDER: Well, this is ridiculous on the face of it. There was no such resentment on my part. The statement was kind and warm and hospitable. It didn't affect what I had just told you of my



attitude one bit, and I had no opposition for the President to make a friendly gesture of that sort. I was delighted to have it, frankly.

HESS: Did you phone the President regarding that speech?

SNYDER: Not that I remember.

HESS: Just one question on Kennan's attitude at that time. Recalling back to 1949, you mentioned that Secretary Acheson was quite cooperative. What seemed to be Kennan's attitude at that time?

SNYDER: Mr. Kennan's attitude, as we found was true with a great many people, was one of extreme pro-British attitude, and they wanted to do everything for the British. Of course, their long years of training in the career diplomatic service had led them to believe that



they were better informed and more capable in dealing with foreign matters than anyone else in our country, and I think that is indicated, more than any other place in his writings, on page 461 of his book, down toward the end of the page. He says that finally after great efforts on his part, that his recommendations were "followed with the greatest fidelity in all the practical aspects of the talks." Well, that in itself showed that the basic of why the talks were successful, because his recommendations were "followed with greatest fidelity in all the practical aspects of the talks." Well, actually any positions that were taken were followed because they were the proper steps to take, and whether it was exactly with the great fidelity of his recommendations in a matter that I have long-since forgotten, but we did conduct the meetings, I continued to chair the meetings, and



we got along splendidly.

HESS: On that same page he mentions a position paper which he completed on September 2.

SNYDER: That's what he's talking about.

HESS: That's right.

SNYDER: That's what I was just referring to.

HESS: What do you recall about that position paper?

SNYDER: It was a good technical paper and was certainly given consideration. It wasn't ignored as he said. He wasn't sitting with us who were dealing with this matter, constantly; he didn't know whether we considered it or not. This was just a conclusion that it suited him to make.

HESS: Were there any other members of the Department of State, besides Acheson and Kennan, that were working on this matter at this time that comes



to mind?

SNYDER: Oh, yes, quite a number. I don't remember exactly who they were, but it was quite a task force who were working on it as it was a very important matter. I remember that Ambassador [Averell] Harriman had a great deal to do with it; Lew [Lewis Williams] Douglas was our ambassador to the Court of St. James at that time, and I consulted him at great length about these matters; Ambassador Dave [David K.E.] Bruce was in Paris at the time, and subsequently went to the Court of St. James. I went into this matter at great length with him on this subject. Yes ,there were quite a number of people who were active. Bob [Robert A.] Lovett was consulted at times regarding this particular situation.

HESS: One final question on the subject: What is your



evaluation of the results of the actions that were taken?

SNYDER: I said that in the statement. I think I made it pretty clear that because of the action taken that the subsequent reconversion, world-wide world trade, was significant.

HESS: Enough for one morning?

SNYDER: I think so.

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