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
February 4, 1969
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 It may not be published in full except by permission of the Harry S. Truman Library.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
February 4, 1969
By Jerry N. Hess
Twenty-seventh Oral History Interview with John W. Snyder, Washington, D.C., February 4, 1969. By Jerry N. Hess, Harry S. Truman Library.
HESS: Secretary Snyder, in his book, The Truman Presidency, pages 196 and 197, Cabell Phillips states that in the fall of 1947, President Truman offered to step aside for General Eisenhower, if the General would accept the Democratic nomination for President, while he, Mr. Truman, would take the number two position on the ticket as Vice President. Do you believe the incident as related by Phillips is correct?
SNYDER: Mr. Hess, I never heard Mr. Truman even discuss taking a second place in the administration after he had become President. I do not believe that he ever entertained such a thought of serving as Vice President under another President, after he had once served as President.
HESS: All right. Getting into our discussion of the
morning on foreign aid, what do you recall about the background of the development of the Truman policy towards foreign aid, including the decision to aid Greece and Turkey and the formation of the Truman doctrine?
SNYDER: As Mr. Truman took over the duties of President, following the death of President Roosevelt, he was faced with a gigantic problem of what would be the role of the United States in reestablishing the world economy following the devastating destruction and disruption of World War II. And as he studied the problem, he found that the foreign aid programs of the United States, after the Second World War, would fall into probably three categories by their objectives. He found that they must do that in order to get a proper perspective and a proper approach to the affective aid that the United States could afford to offer in the form of foreign aid.
There was a series of programs designed to relieve the hardship and the misery left by the war. These programs many of them initiated while the war was still in progress, aimed at preventing starvation and pestilence in countries that had been the scene of war operations. A number of them were carried out by occupation forces and were undertaken in accordance with international law obligations.
The second category of foreign aid programs had the objective of assisting recovery from the war, and of developing the economies of friendly nations to the point where they would be self-sufficient again.
The third category of programs marked a return to the defense foreign aid. Programs of the third category were designed to strengthen the military forces of friendly nations in order that they might successfully resist threatened
aggression. There was an overlapping in time of these types of programs, particularly in the case of the latter two where the United States sought to strengthen its friends both economically and militarily at much the same time. The necessity for the United States to supply funds for foreign relief became apparent during the latter part of the Second World War with the first major rollback of the enemy forces. The invasion of North Africa gave the United States control of a large area with a sizable, civilian population, which was dependent on temporary, outside aid for the very necessities of life. Lend-lease which poured billions of dollars overseas for war purposes provided only a trickle of money for relief, and to fill this need there was established the civilian supplies program, which was known as GARIOA, that is, Government And Relief In Occupied Areas. GARIOA was a stopgap measure, however, but it
provided for the civilian populations of formerly occupied areas for the six months that they ordinarily remained under military control. In the cases of Germany and Japan, GARIOA constituted almost the sole assistance from the United States, and it extended throughout the period of occupation of these two countries. Germany received U.S. grants of $3,428,732,.000, from 1946 to 1951, and of that amount, $2,079,000 came through GARIOA. In Japan, of the $2,105,996,000 of grants through 1951, all but $178,000 came from the civilian supplies programs. When the GARIOA program ended in the various parts of the world, that is, with the exception of Germany and Japan, the United Nations Relief and Rehabilitation Administration, known as UNRRA, moved in to take up the relief burdens. UNRRA was a multilateral relief program administered by the United Nations organization which made contributions totaling $3,663,000,000
to liberated countries, which did not have enough money to buy relief items. This restriction eliminated Great Britain and some of the Western European countries from the UNRRA program. Of its total relief contributions, UNRRA derived 73 percent of its funds from the United States. Private relief agencies also contributed to relieving the suffering in Europe and Asia, and the United States made sizable sums of money available to organizations such as the International Childrens' Emergency Fund, and the International Refugees' Organization. My personal interest in relief programs antedated my entrance into the Treasury. In 1945, while Director of the Office of War Mobilization and Reconversion, I had at the President's request, traveled through Europe studying economic problems. The sight of a Europe nursing its war wounds with its basic industries disrupted, its transportation system
obliterated, its agriculture producing only a fraction of its food needs, was a terrible and frightening sight to me. I later referred to this trip as the most heart-rending experience I had ever witnessed. I returned to America to urge that the United States' war surplus property abroad be used, when possible, for relief purposes, and I was instrumental in organizing emergency food shipments to Europe to help its people get through the winter of 1945 and '46. In March of 1946, I was among those who urged the appointment by President Truman of former President Herbert Hoover, who had won a great reputation in relief work after the First World War, and I recommended him as head of Mr. Truman's Famine Emergency Committee in 1946. UNRRA, civilian supplies, and other relief programs, were humanitarian measures which did much to alleviate the sufferings of the immediate postwar
period. However, they did not, and because of their limited resources, could not answer the long-run problems of the war-stricken countries. These programs were largely successful in staving off starvation in the winter of 1945-46, but they did little to put the European and Asiatic economies back in running order so that a starvation situation would not recur. But this fact was scarcely realized until the winter of 1946-47, when really the big problem fell on Europe. Until then, it had seemed probably that the economies of the battlefield countries needed only time to get themselves into working order. European recovery did not come up to expectations in 1946, and this basic weakness was clearly demonstrated by the bitter winter of that year, the most bitter in Europe in nearly a century. Snow and ice storms and floods battered Western Europe that winter with unprecedented ferocity,
and the bitter weather lasted well into the spring. When the winter was over, one frightening fact stood out, the European economy had been operating on such a narrow margin that floods and storms could completely disrupt their progress. The severe winter also had destroyed that operating margin, and the situation had reverted to practically the same situation that prevailed immediately after the end of the war. Recovery affected in the year and a half of peace had completely been wiped out, and there apparently was little prospect of future efforts at recovery without further outside assistance. Weary and battered Europe lacked hope and direction. In addition, Russia's control of the countries in Eastern Europe had closed off a portion of the market and resources of Western Europe. This then was the foreign economic situation which confronted the Truman administration in the
spring of 1947, as the early relief programs were grinding to a halt. The catastrophe was not limited to European countries, however, for those nations were the principal users of raw materials for Asia. Therefore, Asian countries suffered too from the economic breakdown in Europe. The political implications of this economic breakdown were staggering for the United States. Western Europe was wobbly, drained of all real strength, while the Soviet Union stood anxiously awaiting the proper moment to stretch its sphere of control all the way to the Atlantic. The decision made by the strategists in the Truman administration led by General George C. Marshall, who early in 1947 became Mr. Truman's Secretary of State, was that this could not be allowed to happen. Russian control of the economic resources and the technical skill of Western Europe would heavily tip the world balance of
power to the Communists. The winter of 1946-47 made it clear that this disaster might occur unless the United States lent a hand to its allies and friends. The economic situation varied somewhat from one European country to another, so that there was, initially at least, a tendency to approach the problem of European recovery on a country-wide, rather than a continent-wide basis. In Great Britain the situation was serious but not yet acute. That country, which had borrowed $3,750,000,000 from the United States in 1946 improved its trade position somewhat in 1946. Although the winter of that year dampened some optimism about British recovery, Britain was not on the brink of collapse, and its internal political situation was of course somewhat stable. France and Italy were different matters. Both of these countries were in disastrous conditions.
Economically, they were in ruins. Politically, both had large domestic Communist parties, which actively obstructed government programs and were in a position to create widespread civil disorders. Austria was on this critical list. Approximately half of the country was controlled by Russian troops and the other half by American troops. Germany, of course, was prostrate, dependent almost entirely on the aid from the occupying powers. Concerning the smaller European countries such as Belgium, the Netherlands, and Luxembourg, there was not so much concern at the time. They were stable politically, and had set up recovery programs of their own which had done much to restore their economies. However, those smaller countries could have been greatly influenced by the course of events in the larger nations around them. Greece was actively fighting a civil war against Communist insurgence. The British maintained
some forces there, but the economy was devastated. Political pressures by the Soviet Union against Turkey had been increasing since the war and was apparently headed in 1947 toward the catastrophic climax centered around control of the Bosporus Straits. With a feeble economy and an obsolete army, Turkey was in a poor position to defend itself. In February of 1947 an event occurred which made it certain that the latter two countries, Greece and Turkey, would be the subject of the first major effort of the Truman administration, directed towards welding together this country's economic power and its desire to contain communism. The result was the Truman doctrine, and the Greek-Turkish aid program.
In February of 1947, the British government handed to the State Department in Washington two brief notes. One of these notes concerned
Greece and it recalled that in the previous summer that the then Secretary of State, James F. Byrnes, and the British Foreign Secretary, Ernest Bevin, had informally agreed that Britain would chiefly furnish military assistance to Greece while the United States would furnish economic aid. The note pointed out that Greece was then in desperate straits, and it suggested that the United States decide how much and what kind of economic assistance it could give to that country. The British Government, the note said, would be unable to give Greece further economic assistance after May 31st. The second note stated that Britain was unable to give further financial assistance to Turkey, but it recognized that Turkey needed to conduct both an economic development program and modernize its armed forces at the same time in order to defend itself. It was recognized that Turkey could not accomplish these things
without outside aid, therefore, the question was raised as to how much assistance the United States could give. Putting aside the reference in the notes to previous informal agreements and the offers of Britain to give military aid if the United States could finance the economic programs, the substance of the two notes was very disturbing. Great Britain recognizing that its burdens in two countries that had been considered part of its area of interest were too great for it to maintain any longer, asked the United States to assume a great part of that burden. The British admission that she needed help in Greece and Turkey was not startling to informed officials, but the British notes setting a deadline for ending British economic assistance to Greece, and outlining the desperate situation in Turkey, gave the problem great, immediate requirement of attention. The British notes
left President Truman with two alternatives: He could take up the burdens that Britain was being forced to throw down, or he could see the Communists almost certainly win their civil war in Greece, and perhaps see Russia obtain control of the Bosporus.
On March 12, 1947, Mr. Truman addressed a joint session of Congress, and called for a Greek-Turkish aid program of four hundred million dollars, and then he enunciated what has come to be known as the Truman doctrine:
I believe that it must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures.
I believe that we must assist free peoples to work out their own destinies in their own way.
I believe that our help should be primarily through economic and financial aid which is essential to economic
stability and orderly political processes.
In the Government deliberations and the preliminary work that led to the President's speech, I had the privilege of playing really a larger part personally than I did in my position as Secretary of the Treasury. The amount of financial aid offered to Greece and Turkey was not so great that it called for particularly special measures from the Treasury. The President and I, in our frequent conferences, discussed the Greek and Turkish problems prior to the President's address, and I was convinced that steps had to be taken and taken promptly. At a Cabinet meeting on March 7th, the President asked me to head a committee consisting of Secretary of Commerce Averell Harriman; Secretary of War Robert Patterson; Secretary of the Navy James
Forrestal; Secretary of Agriculture Clinton Anderson; Secretary of Labor Lewis Schwellenbach; Under Secretary of State Dean Acheson; and OWMR Director John Steelman; which had the job of contacting leaders throughout the country, particularly industrial and financial leaders, and informing them of the necessity of the aid program and of the general foreign economic picture. This committee was also to study the best means of presenting the program to the American people, and on the following day it recommended that the gravity and importance of the program would be demonstrated if the President appeared before Congress to outline his plans. This Mr. Truman did four days later. Execution of the program outlined by the President was left in the State, War and Navy Departments. Congress approved a four hundred million dollar request for aid to Greece and Turkey on May 22,
1947, and more funds were appropriated in later years. Military aid to the two countries was continued after 1948 under the Mutual Defense Assistance Program, and later the Mutual Security Program. Economic assistance to Greece and Turkey embarked the United States on a new course in foreign political and economic affairs, but it was only the beginning. It left unanswered the major question of what was to be done to help these nations of Europe whose positions were only slightly less critical than those of Greece and Turkey. Consideration of this question was the logical step, and the State Department took it before even the President announced the Truman doctrine. The result, and one of the major foreign policy achievements of the Truman administration, was the Marshall plan. The genesis of the Marshall plan is familiar to most students of international affairs. Policy planners in the State Department, assured by
the public and congressional reception of the Greek-Turkish aid program that they were not undertaking an impossible task, faced up to the problem of getting United States aid to Europe. The idea of broaching each country's problems separately was discarded in favor of the continent-wide approach, and the offer of large scale foreign aid of a substantial nature was given its first public tryout by Dean Acheson in a speech at Cleveland, Mississippi on May 8, 1947. The Under Secretary of State outlined what the United States was already doing in foreign aid. He said that America had already contributed nearly three billion dollars in foreign aid, had taken the lead in the International Bank and International Monetary Fund, and had subscribed a billion dollars to those organizations, had increased the lending capacity of the Export-Import Bank by about
three billion dollars, loaned Great Britain three and three quarter billion dollars, was proposing to contribute half a billion dollars that year to the Philippines, a billion dollars to relief to occupied areas, and the President had recommended four hundred million dollars to Greece and Turkey, plus post-UNRRA relief of some three hundred fifty million dollars. All of this, Acheson says, was but piecemeal and temporary in its operation. It would suffice to close most of the eight billion dollar gap between what foreign countries would buy from us that year, and what they would sell to us. And he added:
But what of next year and the year after that.
Quoting from his speech:
The facts of international life also mean that the United States is going to have to undertake further emergency financing of foreign purchases if foreign countries
are to continue to buy in 1948 and 1949, and commodities which they need to sustain life and at the same time rebuild their economies...we know now that further financing, beyond existing authorizations, is going to be needed.
This speech of Acheson's, noteworthy as it was, contained no mention of specific plans that the Government might have had in mind, and it made no specific offers of new aid. Its impact on the public was thus somewhat lessened.
The next step was carried out by Secretary of State Marshall in his speech at Harvard University on June 5, 1947. The Secretary's speech was a justly famed one, but it would be worthwhile to look back from a point years later to see exactly what it was that he said. The core of it was, to quote from the speech:
The truth of the matter is that Europe's requirements for the next three or four years of foreign food and other essential products -- principally from America -- are so much greater than her present ability to pay that she must have substantial
additional help or face economic, social, and political deterioration of a very grave character...
It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace. Our policy is directed not against any country or doctrine but against hunger, poverty, desperation, and chaos. Its purpose should be the revival of a working economy in the world so as to permit emergence of political and social conditions in which free institutions can exist. Such assistance, I am convinced, must not be on a piecemeal basis as various crises develop. Any assistance that this Government may render in the future should provide a cure rather than a mere palliative...
It is already evident that, before the United States Government can proceed much further in its efforts to alleviate the situation and help start the European world on its way to recovery, there must be some agreement among the countries of Europe as to the requirements of the situation and the part those countries themselves will take in order to give proper effect to whatever action might be undertaken by this Government. It would be neither fitting nor efficacious for this Government to undertake to draw up unilaterally a program designed to place Europe on its feet economically. This is the business of the Europeans. The
initiative, I think, must come from Europe. The role of this country should consist of a friendly aid in the drafting of a European program and of later support of such a program so far as it may be practical for us to do so. The program should be a joint one, agreed to by a number, if not a1l, European nations.
These were the statements which formed the basis of the Marshall plan. Secretary Marshall did not spell out a new, broad-scale, foreign aid program in his speech, but he held out the prospect of assistance from this country if the European nations would first help themselves as much as possible. The genius of the Marshall plan was contained in the Secretary's short statement that: "The initiative, I think, must come from the Europeans." This simple sentence reaped a large profit, both politically and economically for the United States. Politically it pulled the rug from under much of the Communist propaganda, which maintained that the United States foreign aid was imperialism aimed at subjugating
independent people who really wanted only to be left alone. Economically it assured the United States that this aid would go into planned enterprises of a productive nature, which the Europeans themselves considered to be of the greatest importance. In a sense, Secretary Marshall was asking the Europeans to exercise debtor responsibility.
Also to be found in Marshall's speech, was an intimation that the Secretary of State was aware of and was forewarning the Europeans about the necessary limitations that would have to be imposed on any program of American foreign aid. "The role of this country," Marshall said, "should consist of friendly aid in the drafting of a European program and of later support of such a program so far as it may be practical for us to do so." This does not mean, however, that Secretary Marshall or anyone in the Truman
Cabinet was certain of how much aid the European countries would need, or how much the United States could give. These limitations had to be settled later. When Marshall made his speech, a number of figures had been suggested, but none had been definitely accepted.
My close friend, William L. Clayton, Under Secretary of State for Economic Affairs, had returned from Europe in the spring of 1947, and he was convinced that Europe would need from six to seven billion dollars for each of the next three years. However, no decision was reached until, in line with Marshall's suggestion, the European countries themselves got together and decided how much they could do, and how much they would like for the United States to do. What Secretary Marshall's Harvard speech amounted to was a statement that the United States could undertake large scale economic aid to Europe,
only if the European nations themselves first agreed on what was to be done, and contributed as much as they could. But the United States would promise to assist in working out such a plan and would, when the plan was completed, contribute as much as it considered practical to the accomplishment of the program. It may be seen that the speech of the Secretary of State was general in its language, and beyond suggesting that there was a limit to the amount that the United States could contribute, it did not set out such a limit. This method of launching the Marshall plan enabled the enthusiasm and energy of the Europeans to work freely, but it did create a situation which might have resulted in many misunderstandings and possibly much bitterness.
Following Acheson's speech at Cleveland, Mississippi, in which he predicted that foreign
aid would come to five billion dollars a year, the question of how much the European Assistance Program would cost had been taken up by commentators and political and business leaders. Some of the guesses that resulted were rather high. It was not surprising that Henry Wallace recommended expenditures of ten billion dollars a year for five years, with half of the amount to go to Eastern Europe and Russia. But it may be surprising to find that Harold Stassen, who later became disarmament adviser to President Eisenhower in 1953, made a speech on May 21, 1947 in which he proposed that the United States set aside 10 percent of its production for each of the next ten years for a "production for peace" program. In return Stassen said that the United States should not look for a return in money, but partially in raw materials, guarantees of liberal trade policies, and in
the accomplishment of other political and economic objectives. This was about as sound as most of Stassen's pronouncements throughout his lifetime, that is, in my opinion. Since national production then stood at $210,000,000,000 a year, and assuming that it did not greatly decline within ten years, Stassen's proposal would have meant an outlay of more than $200,000,000,000. However, if Stassen's program had been undertaken, and if the great expansion of national production that took place in the next decade had occurred, then Stassen's proposal would have meant a far greater expenditure for the United States.
This is just to give you an idea of some of the limits to which proposals were suggested, and how far afield some of them went.
HESS: Before we go further into this, Mr. Secretary, I'd like to ask you a question. You mentioned Will Clayton, and as you know, he has been
credited by some historians as originating the idea of what came to be known as the Marshall plan. What is your opinion of that?
SNYDER: I am convinced that the report which Will Clayton submitted after his return from a survey of the economic and military conditions in Europe following V-E Day, that the statistics, the background of that report, formed the basis on which Mr. Acheson and Secretary Marshall later developed their proposals.
HESS: Would you go so far as to say that he was the father of the Marshall plan?
SNYDER: Well, the seed came from him, so I would think that credit should go to Will Clayton for producing the nucleus around which was built the later proposals for such a plan as the Marshall plan.
HESS: All for one morning?
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