Oral History Interview with
Willard L. Thorp
Deputy Assistant Secretary of State for Economic Affairs, 1945-46, and Asst. Secretary, 1946-52. Member of U.S. delegation serving as special adviser on economic matters, Paris Peace Conference, 1946; special adviser on economic matters, New York meeting of the Council of Foreign Ministers, 1946; American representative to the United Nations General Assembly, 1947-48; and chairman, U.S. delegation to the Ruhr Coal Production Talks, Washington, D.C., 1947.
July 10, 1971
by Richard D. McKinzie and Theodore A. Wilson
[Notices and Restrictions | Interview Transcript | List of Subjects Discussed]
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.
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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 It may not be published in full except by permission of the Harry S. Truman Library.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 January 1978
Harry S. Truman Library
[Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed]
Oral History Interview with
Willard L. Thorp
July 10, 1971
by Richard D. McKinzie and Theodore A. Wilson
WILSON: Mr. Thorp, would you describe, please, the circumstance of your
appointment as the Deputy Assistant Secretary of State for Economic Affairs
THORP: I suppose I should go back to when I was born, but I'll talk primarily
about my entry into international affairs.
This goes back to 1933. Until that time I had been largely involved in
such fields as
business cycles, corporation finance, and money and banking. For a period
I was on the staff of the National Bureau of Economic Research, but, since
1927, I had been a professor in Amherst College.
In 1933 suddenly I got a call from the head of the American Statistical
Association. He asked me if I would go to Washington to be a member of
a group provided by the Association to advise Mr. Roosevelt and his Cabinet
about how to reconstruct the statistical services of the Government. These
had been substantially cut back in 1930, '31 and '32 by the Hoover administration,
as part of the general effort to keep the deficit down.
I had been a member of a group which had met at Princeton and had already
sent to Washington a strong protest about what had been happening
in the statistical field.
When I arrived in Washington that summer -- I went there as soon as the
college year ended -- I was assigned to review the statistical activity
of Commerce. I started circulating around in the Department. At that time
the head of it was Daniel Roper, a political appointee, but the operating
head was a man named John Dickinson, a lawyer from the University of Pennsylvania.
After I had been working on this job about a month I was called in by
Dickinson who said, "We have a very difficult situation. There's
building up a great pressure to appoint a Southern candy manufacturer
as head of the Bureau of Foreign and Domestic Commerce. From my point
of view this is the most important bureau in the Department. We've got
to fill the post as quickly as possible. Will you take it?"
Here was I 34 years old, never having run anything except during the war,
when I had been personnel officer in a training camp. Luckily, I had a
very able chief sergeant who knew the ropes and really ran the office
(I was 18 years old at the time). Except for that and one year as chief
statistician for the New York State Board of Housing, I had been in research
work, I had been teaching at Amherst, and suddenly was invited to become
head of a large and important bureau. It included all the commercial attaches,
or what was left of them (there had already been a hatchet man named Amory,
who had fired a great many people in the period from March to June). It
was the contact with businessmen. It also operated regional offices around
the country and published voluminous reports.
I became the head of that bureau almost at
once and found myself deeply involved in foreign commerce. This meant
that whenever any international policy problems came up, of which there
weren't very many in 1933, I was pulled in on it not to mention the continuing
responsibility for the commercial attaché apparatus.
I was one of the group that drafted the reciprocal Trade Agreements Act,
along with Rex [Rexford G.] Tugwell, Herbert Feis, and others. I was also
involved in the whole problem of how alcohol was to be treated after the
ending of the prohibition, which again had a foreign angle. Most important
was the whole question, since foreign trade was going to hell very rapidly,
of what could be done about it.
This lasted until May, 1934, when through a series of circumstances that
we don't need to go into, the President withdrew my name. Political opposition
had come from Senator
[Hubert Durrett] Stephens of Mississippi, who was essentially responsible,
because I had not appointed a client of his to a job. At any rate, this
was my initiation into foreign affairs in the Government.
While I was head of the bureau, the State Department made a big drive
to take over the commercial attaches. I made a successful resistance to
this so that things went on as before. Parenthetically, when I was back
in the Department of Commerce in '38 or '39, the State Department again
made a drive for this. I abetted it on the grounds that the State Department
appeared to be much freer of political choosing and handling of personnel
than the Commerce Department. I had watched this whole operation now for
five years and was prepared to arrange a transfer over the protests of
a great many commercial attaches who said, "We will just be second-rate
citizens, we will not be absorbed. We will just be frozen, with no chance,
no opportunity." It turned out in the end that a number of these
fellows wound up being ambassadors. Walt [W. Walton] Butterworth is probably
the best known one. He was one of the commercial attaches that I "sold
down the river to the State Department."
During this period I had worked rather closely with a man in the Treasury
Department: Dean Acheson. I met him on one of those lovely Government
yachts which served to make sure that all ships in the Chesapeake were
behaving properly, a job frequently done by high officials! I think within
the next week I got a call from him saying, "On my desk there's an
enormous pile of stuff having to do with the problem of dumping. I don't
know anything about dumping. I wonder if you'd be willing to take all
this and look it over and see what action the Treasury ought
to take on this problem." From then on when he got involved with
a foreign problem, he was very likely to call me and ask if I would help
him out. So that I came to know Mr. Acheson fairly well, on a working
After the Bureau of Foreign and Domestic Commerce and a few brief assignments,
I became head of the NRA Policy Board, and was there for a while. I then
went up to Dun and Bradstreet and was its chief economist. Dun and Bradstreet
had never had an economist before. The head of it, Arthur Whiteside, had
been a member of the group heading the NRA and felt that a lot of its
material might have economic use. I was very happily functioning there
when I got involved again in Washington. Harry Hopkins, who was Secretary
of Commerce, became sick and was limited in his activity. Three of us
a triumvirate that ran the Department of Commerce. I think I spent two
days a week in New York at Dun and Bradstreet and the rest of the week
in Washington for that period. That involved also being the Commerce man
on the TNEC (the Temporary National Economic Commission) which was a terribly
exciting job. It unfortunately was reaching a point of conclusion when
the war came along and we never really made use of all the work that was
Hopkin's illness brought me back into the Commerce Department again because
I had to do everything that was substantive; from advising Mr. Hopkins
whether or not to approve the form for the 1940 census, telling the railroad
industry, "For heaven's sakes, buy a lot of freight cars and get
the economy going. That's a good opportunity that you've got and you'll
need it." But mostly I was still at Dun and
Then suddenly I got a call from a Federal judge to come and see him.
It turned out to be about one of the two biggest crooks of the twenties,
Howard Hobson. Hobson had gone to jail, his enormous empire was in bankruptcy.
The judge wanted to know if I would come and be a trustee of this.
It turned out later, to my surprise, that one of the people who had suggested
me was Acheson. This judge had offered the post to Acheson and Acheson
had said, "Well, if I do it, I'll do it only if a fellow named Willard
Thorp would come and be my assistant on it," or something to that
For the whole war period I headed this utility system, the third largest
in the country. When I say I "headed it," I must modify that.
I had a co-trustee who was twenty years older than I. He was a lame duck
congressman who left it all to me to do.
MRS. THORP: His claim to fame was that he had uncovered the fact that
the letters against the proposed Public Utility Holding Company Act with
which the Congress had been inundated were shams. They were letters with
names taken from cemeteries and what have you.
THORP: It was a little more obvious than that. They tended to be letters
from people whose names began with A, B, and C. Nobody whose name began with T or W sent
in a letter!
MRS. THORP: Dennis Driscoll was an enchanting loveable man, but of course,
the whole outfit needed somebody with brains and drive. The financial
community bet that it was going to
take twenty years to get this mess straightened out. It was out of re-organization
in six years.
THORP: The re-organization of the Associated Gas and Electric Company
was an education in law and business operation. There were some very difficult
law suits against accountants and banks, and very lively tax problems
to be settled. Many of the properties had to be sold. Besides all of this
was under the jurisdiction of a Federal judge; whenever you wanted to
hire a stenographer you had to go and ask permission and so forth and
Incidentally I don't know whether it is typical or not, but since he
knew something about the market for stenographers, it was harder to get
the judge to approve a stenographer than to approve the refunding of a
bond issue that might involve ten million dollars.
MRS. THORP: This was also because he was a political appointee. All of
this was much too complicated for him to comprehend.
THORP: To try to keep a small international thread in this, and this
is a very gossamer thread, I should mention that this system had been
built up by accumulating existing properties. This was, of course, a very
essential way in which the country shifted from local electric light companies
to large systems. Systems in the twenties were primarily built up by buying
a company, floating bonds of greater value than were paid for it, and
then using that money to buy another company.
One of the things the Associated owned was the Manila Electric Company.
I was therefore actually involved in operating a foreign electric light
and power company. I must say, however,
that the problem of operating a Philippine company in the early forties
was never challenging. It finally had to be sold under S.E.C. orders.
Now to get back to your original question. I got a phone call in the
spring of '45 from Ed [Edward S.] Mason, an old friend of mine, and a
professor at Harvard. At that time he was Will [William C.] Clayton's
assistant. The State Department had never had an economic staff of any
significance. Herbert Feis had been there; as a matter of fact, he was
there, as far as I know, back in 1933. When they passed the Reciprocal
Trade Agreements Act, the problem of negotiating these was put on the
State Department. Henry Grady came in and built up a group for this which
included people who came later to be of considerable importance, like
Leroy Stinebower. But, the weakness of the Department is evidenced by
the fact that
there had to be a separate Foreign Economic Administration set up during
the war. There was just very little to build on.
Will Clayton, who came into the State Department in December, 1944 and
Ed Mason decided that the Department was going to be faced after the War
with a tremendous variety of problems beyond the trade policy problem,
and that it must build up a substantial staff.
MCKINZIE: Do you think Secretary [Cordell] Hull had anything to do with
THORP: I wouldn't know. I would rather doubt it. My earlier contacts
with Secretary Hull did not suggest that he was a very imaginative person.
Anyway, Hull was out and Stettinius came in, in December, 1944.
MRS. THORP: I think it was Will Clayton who telephoned Willard. He didn't
find out until afterwards
that Ed Mason had suggested him to Will Clayton.
I happened to be sitting in Willard Thorp's office when the call came
from Will Clayton asking him if he would take this on. He turned absolutely
silver-color, really grayish. At this time he had a wife (not this one)
and three children who were naturally a major expense -- adolescent children.
When he got off the phone and told me what the invitation was, I said,
"Well, you just can't do this." He had parents also, his father
was a retired minister and clearly didn't have very much to live on. I
said, "You just cannot afford, with all the requirements on you,
to take on a job like this in Washington."
He looked at me -- there was nobody else present, and no heroics about
him -- and said, "What kind of citizen would I be if I refused to
go broke to serve my country?" I knew what he was talking
about, because he had already gone broke once in the New Deal days.
THORP: Yes, that's right. In '33-'34 I ended up going up to Dun and Bradstreet
having borrowed on my life insurance.
WILSON: Why did this remarkable group of people come into the Government,
or stay on, at a great personal sacrifice?
MRS. THORP: I have a thing about this. I get absolutely enraged when
people go into hysterical kudos for someone like [Robert] McNamara or
George Romney from American Motors. These and other people gave up a million
dollars worth of securities and turned it into some form of trust. It's
one thing for people whose fortunes are absolutely assured; it's quite
something else for somebody who says, "I will wear a hair shirt
for the rest of my life because I love my country." This is what
no one has an appreciation of. Willard gave up 60 thousand dollars a year
and took ten.
THORP: I think it was eighty-five hundred a year when I went down as
Will Clayton's deputy. This was tough because I did have a certain number
MCKINZIE: At the time you went down, did you have some idea of Will Clayton's
position and of the position of the economic affairs staff in the Department?
Did you think you weren't going to be able to do anything once you got
THORP: I had a little sense of this because of my experience earlier,
having been in the Commerce Department, and having dealt with the State
Department. But I did realize that the postwar
period would have economic problems like no other postwar period. The
level of destruction and its global character were new conditions. I had
a vague sense that there would have to be much improvisation.
Will Clayton was a tremendous person. I think he was an outstanding individual;
people respected him all through the Government. In most areas in which
he dealt he was thinking in policy terms, so that I was tremendously attracted
by him. A number of people I knew were already in the Department. There
was also the possibility that in the dissolution of FEA we might pick
up a lot of added people. We had major negotiation about that, turning
to a large extent on trying not to get a lot of deadheads; to get the
best people. Commerce took some, we took some. As still other war agencies
disbanded, we picked up more top-level
economists. During this period, as a result of the character of the postwar
problems and the fact that so many economists had worked together during
the depression, in the War Production Board, the OSS, and other agencies
in the government, it became a relatively easy thing to build up a magnificent
staff. I felt that the postwar period saw the State Department as having
the best economic staff in Washington. One particularly interesting thing
was that the Department had little authority to do anything. I spent more
time negotiating with the rest of the U.S. Government than negotiating
with foreign governments, and my staff almost never left Washington, except
when there was something like a trade negotiation, which required the
participants to stay indefinitely in Geneva or Havana or Paris waiting
for instructions from Washington or for others to get theirs from their
MCKINZIE: The War Production Board and the Office of War Mobilization
and Reconversion and several other agencies all had their plans about
how the United States should approach foreign economic policies after
the war. I assume that it fell upon your office to do something with all
of those things. Do you recall anything about those?
THORP: There were a certain number of people and agencies who brought
in suggestions. Many were political or very short-run in terms of immediate
needs. My office operated on the principal that the more flow of ideas
that came in the better. It was up to my office to sort them out and blow
on the occasional one that had a spark in it and stamp on the others.
I got an awful lot of crazy stuff, but we managed not to be hung up. However,
in the early postwar stage, we had relatively little to do with German
or Japanese policy, though that soon changed. I would say that the only
area in which I really
felt we were hung up was Latin American. For a long time, our policy had
involved a lot of goodwill but was without very much action. Our European
allies were of primary concern and we dealt with Latin America by talking
and not doing very much. This wasn't entirely true. After all, technical
assistance programs had been developed in Latin America before they developed
anywhere else. But that was a matter of certain special cooperative programs
in agriculture, health, and education. I must say that a good many of
the most basic policies (the kind of thing that delights George Kennan,
for instance) were in the hands of the political officers in the Department.
They might have had some economic overtones, but frequently I wouldn't
be involved in it at all. I always attended the Secretary's meeting in
the morning when I was Assistant Secretary. Even when I was Deputy, Clayton
away a good deal of the time, so that I attended in his place and had
a chance to make suggestions or argue things.
On the point about our having people who didn't carry their share of
the load it may have been that the fellows down below had a problem about
this. I didn't have. I don't recall having anybody in a division chief
position that -- I really ought to check this name by name -- but off-hand
I don't recall having anybody whom I just thought was hoisted on me that
I hated to have, who was a deadhead and so forth. I would insist that
at the Division Chief's level, at any rate , this was really an outstanding
group of people. To illustrate -- when I set up a special unit on Germany
(before the Department had any such political unit) who was it? -- Ken
[Kenneth] Galbraith, Walt Rostow, and Emile Despres.
I came in to the Department in July 1945, at the point when Potsdam and
the U.N. San
Francisco meeting were in motion. I had to run awfully fast to even get
caught up. I didn't know about most of these problems in depth. Who could
from the outside?
MRS. THORP: I recall (obviously, not of my own knowledge, but what I
remember of what Willard commented on) that down the line there were people
inherited from these other organizations, about whom the topflight people
were not too happy.
One of the sad things that happened in the great exodus in '52 (because
people wouldn't care to work in the kind of intellectual and moral slum
that anything headed by John Foster Dulles would become) was that the
people who got promoted were the type that were only tolerated when the
Department was a first class institution. This did damage to the United
States for which the Republicans must take full blame and which has not
yet been cured.
THORP: It was harder to keep people as we got along into the fifties.
I was already losing people for two reasons: one, I would say our problems
were gradually getting less crisis-seeming; and, secondly people wanted
to go outside either to get back into academic posts or business. The
latter was beginning to have international interests and couldn't find
better trained people. The forties and the thirties produced almost no
graduate students in international affairs. Unemployment, labor problems,
and the business cycle were the key subjects and graduate students went
into them. When the companies and the banks began to want people who could
help them work through the currency maze, for example, I lost person after
person out of the financial side, starting with Pete
As Clarice says, the departments were even greater after 1952. Up till
then there was another reason as to why people stayed, and that was [Senator
Joseph R.] McCarthy. His efforts to clean out the Department meant that
few left. Mr. Dulles discouraged the economic staff by saying that he
didn't want an economist to head the economic work. He brought in Sam
[Samuel Clark] Waugh. I'm very fond of Sam as a person, but Sam ran a
trust company out in Nebraska and I doubt if he had ever analyzed a balance
of payments before he came to the State Department. Anyway, people left.
Even in the Dulles period, I tried to persuade some to stay.
I asked one fellow why he was leaving, who said, "You know, I used
to write a memorandum
outlining an idea and send it upstairs, feeling sure that it would be
reviewed in terms of the broader picture. It would be used or not used.
Now I send a memorandum upstairs and it's always approved. I don't know
the total picture well enough to have my memoranda automatically approved.
This is giving me a kind of responsibility where I don't have the vision
to see the total picture and so I've got to pull out."
WILSON: There are thousands of boxes of records, FEA records, in a warehouse
out in Suitland, Maryland. They put them in vaults. There are just enormous
numbers of policy studies and background papers and what the United States
is going to do after the war, and I don't think [Leo T.] Crowley was saying,
"Okay write a background study." A number of people seemed
to think that the FEA would be an agency which would carry over from the
war period, and yet it was so amorphous. You came in just at the time
when everything was coming together, with the end of lend lease and immediate
dissolution of FEA and Crowley's resignation...
MCKINZIE: I particularly remember one study the War Production Board-not
the FEA, did where they said that if something wasn't done about foreign
economic policy as soon as reconversion occurred we would find ourselves
with all the pent-up demands for products to be filled in a year or two.
Then we are going to be faced with this terrible problem of what to do.
THORP: There is no doubt but that proposals for postwar policies and
programs were developed in many places. We inherited most of the plans
and many of the people who had worked on them earlier in other places.
The decision to dismantle the FEA was very important in clearing the way
for the State Department to emerge in a leadership position. As to the
sources of ideas, I can only say that they came from inside and outside
the Government, often from several sources simultaneously. Often a program
took bits and pieces from various sources, including Congress, of course.
Even if you could find the earliest time it was put on paper, it still
might have been the product of much talk among a number of people.
But as to overall program-making in the economic field, particularly
when foreign and domestic considerations overlapped, the problem might
move to the Council of Economic Advisers. The whole questions about domestic
policy, production, and so forth was quite an undertaking. In its most
formal aspect there
was the Council of Economic Advisers' Economic Report. The Council did
some first drafting, but the proofs relating to international affairs
would come over to me then to the Treasury. I would rush an answer back
with whatever my people thought (we'd all looked at it) would be the appropriate
thing. Then when this got boiled down as much as possible we'd have a
final meeting with the President. People would appeal there and argue
it out with him. This would be a half day meeting which happened each
year, and this was where the problem of finance, production, and foreign
trade programs got pulled together.
Now, this frequently meant that things got omitted. The central problem
might be something that I'd have no interest in, like how much housing
shall we finance or something of that sort. Nevertheless this was an integrating
process. The Budget Bureau also had a job of integration, so that all
departments would take the same policy position. Everything we sent to
Congress had to go to the Budget Bureau first. If you sent a letter up
to Congress it had to be cleared by the Budget Bureau. However, if I went
up to testify, it didn't get cleared. It was a very funny kind of business.
In a sense, I was an odd man on everything under the sun, and the economic
report was one of the things that seems to me to have been very important
in forcing a degree of coordinated economic policy. We would have meeting
after meeting about it. On the first draft somebody down the line would
work with the Council. The Council of Economic Advisors had usually one
person in charge of a small staff. Walter Salant was the staff man at
As to Crowley, he left to run a railroad,
but he was still around Washington to some extent, as I recollect.
MCKINZIE: Is it fair to say that the vast number of reports from the
FEA were pretty much shelved, put in their boxes, and not used?
THORP: I would have to say that the reports as such were probably not
used, but that ideas float around. You quickly lose track if the source
of ideas so that whether they got into the general stream or not I don't
know. Probably some did and most didn't. Of course, some of those people
who came into the State Department must have brought some of their ideas
with them. And if an idea's time has come, it may occur to several persons
MCKINZIE: Some in FEA had some very ambitious ideas -- The Industrialization
of China, a five volume
study of how the United States was going to industrialize China.
THORP: They may have been responsible for the Yangtze River proposal.
That is the only specific Chinese project I remember that came up: an
effort to take the Yangtze River and do a TVA with it.
MCKINZIE: Is it fair to say also that if there was any one theme at the
time when you came in, it was the theme of expansion and freeing trade.
Was this, perhaps, the dominant idea in all these agencies?
THORP: I don't know about all the agencies, but certainly it was important
in ours, the State Department, especially as a long-run objection. In
the short run, there were postwar problems of rehabilitation and settlement
of accounts and
the establishment of international economic agencies. I would say that
the economic group in the State Department was operating on a "one
world" kind of concept.
We had learned during the war all sorts of difficulties about working
with the Russians. I remember sitting in on one of the so-called Soviet
protocol sessions, where the Soviets came in and asked for this many oil
rigs, and this many machineguns, and so forth, I was just there representing
the Department, but as a listener rather than an active participant. The
main actors were the Defense Department, the War Production Board, and
the Lend-Lease Administration. I learned how little the Russians were
willing to discuss their plans and programs, as compared with getting
a justification for our supplies to the British. When we wanted to know
exactly what they (the British) were going to do, we found out. It really
was all worked out jointly. The Russians
case was really one of demand by them, "We need this for our program,
period," and very little supporting evidence was forthcoming as to
the actual program. Nevertheless, stemming I guess from Mr. Roosevelt's
hopes, and from the hopes of everybody, there was a real hope that we
could go ahead as to plans and operations. It shows up in the Bretton
Woods negotiations, it shows up in lots of places, that we were trying
very much to find a way of working with the state trading countries; and
that perhaps on economic goals, at any rate, we could work together. No,
I don't think there's any question about the long-run goals. Every time
we made an agreement with anybody, like the British loan agreement, or
the Marshall plan, the preamble always outlined this happy economic future
of stability, growth and non-discrimination. Many governments were so
I would say that this was the direction in which we were working (at least
as far as my end of the State Department is concerned). Even the Greek-Turkish
program did not shift as to a dominating cold war policy. But the conditions
which led to NATO brought us to a second-best position of not "one-world"
but as much of the world as possible.
MRS. THORP: I would suggest just one thing. I think nothing shows how
optimistic the Government was about its relations with Russia more than
the fact that the Marshall plan was offered to include Russia, as well
as everybody else.
THORP: Where I first came directly into the problem of dealing with Russia
was in the controversy in connection with UNRRA funds, as to whether or
not some of the funds should go to the Soviet Union. That was an area
which Mr. Clayton handled
himself. I only picked up bits and pieces in my morning conferences with
him. I went to one or two UNRRA meetings when he was out of the country,
but this was his project and he worked on it with Tyler Wood, who had
been brought in to handle UNRRA. He gradually emerged as the person who
was closer to operations in the assistance field, not always at the policy
level, but the operations, than any other human being. He was my deputy
during the period, and incredibly meticulous. He worked day and night
to check over every figure and make sure that this and that made sense,
and was magnificent in terms of working with congressional committees,
though not so good at working with the European representatives. They
wanted to work with me or with Will Clayton (they always wanted to work
with as high level people as possible). On the UNRRA-Russia issue there
was real trouble as to whether or not they should get four hundred
million or not.
MCKINZIE: When you were planning for Marshall plan aid and for other
aid programs, did you think back consciously of the UNRRA experience,
that this was a sort of indication of how difficult it would be to work
with the Russians.
THORP: We had plenty of problems in working with them, but we were prepared
to tackle this. I don't think we realized, and it wasn't true at that
time, that this would have inevitably led to a terrific congressional
difficulty; it would have ended the Marshall plan, or prevented the Marshall
plan from going through (if the Russians had been in it). At that time
we weren't recognizing that the Congress probably had much stronger anti-Communism
concerns that the administration.
MCKINZIE: Was there some feeling that by offering this Marshall plan aid,
and if the Soviets did accept it, that it would have beneficial effect
on the U.S.-Soviet relations?
THORP: Not so much on U.S.-Soviet relations as on the keeping of the
U.S.S.R. within the "one-world" concept. It was another aspect
of the theory that led us to resist the establishment of the Common Market.
The Common Market was opposed by the economic staff on the theory that
we believed still in non-discrimination. This was too large a change to
come within the Custom's Union exception. I would say the economists didn't
argue for Russian inclusion or Common Market opposition very aggressively
since they recognized that political consideration were more important
than economic on such matters. If we could pick out one political reason
for supporting the Common Market, it was
that this would bring Germany in close, continuing touch with the West.
We would also have liked to bring the Soviet Union into a working relationship
with us. I don't know the extent to which there was any discussion with
the Europeans about this. Will Clayton was the chief contact with the
Europeans during the development of the Marshall plan, and I've always
suspected that he may have discussed this with them and they said, "Oh,
well, if they want to come in, we've got to bring them in." It would
seem to be logical that that was the case.
MCKINZIE: There is a temptation on the part of some historians to make
an equivalency between Will Clayton the cotton broker and Will Clayton
the representative of the United States; to suggest a kind of unsophisticated
businessman who looked very narrowly to the interests of
the cotton brokerage community. Could you comment on that?
THORP: When I came into the State Department, one of the first things
Will Clayton said to me was, "This is an absolute instruction. If
anything comes into the Department bearing on cotton, you will handle
it. I'm not to know about it. If you cannot handle it, take it to the
Now I said to him, in parallel, "If anything comes in on the Philippines,
since I've had this utility connection, I can't have anything to do with
There's a very interesting bit that I should add to this fact. I was
called up on the Hill by the conference of cotton Senators. They wanted
to discuss sales of cotton to Japan. Japan normally had bought its cotton
It's very short staple they used to get, and it's a kind of cotton we
didn't actually have to sell. At any rate, the Senators felt that since
we won the war we should take over the Japanese cotton market.
When I arrived and walked in, there were about 20 Senators in this office.
One said, "Where's Will Clayton?"
I said, "Well, Mr. Clayton feels that any problem connected with
cotton should not be handled by him because of his interest. Therfore,
I represent the State Department for this."
Whereupon one Senator said, "What have we got him in the State Department
Well, this is the answer about Will Clayton. He clearly was concerned
with American interests. He recognized the danger of a conflict of interest,
so he never touched any cotton matter. He knew a great deal about other
commodities, and would be called from all over the Government
on questions about other commodities. He would talk freely about them,
but never about cotton.
MRS. THORP: Will Clayton was really a man of thought, of great sophistication,
in the pleasant sense of the word, and a man of wide-ranging knowledge,
and poise. There's just nothing of the hillbilly, the narrow businessman.
I'm not meaning to suggest that he wasn't a man who had faults, from my
point of view. (His wife must have been mentally ill. She would insult
and badger him in public, diplomatic situations). He was such a damned
fool about his wife and what he put up with that it was incredible, but
she was otherwise really an extraordinary person.
THORP: He was a favorite guest in Washington circles. There's nothing
which indicates this more clearly than the fact that I had fewer invitations
to dinner as long as Will Clayton was in town. Obviously we wouldn't both
be invited to the same one. When I became Assistant Secretary in charge
of the economic affairs, and the Marshall plan went into operation, our
social life became even more strenuous as economic and finance ministers
came to Washington. Of course, I must say that my wife was also an attraction,
which made a difference.
But to come back to Mr. Clayton. He was a very successful businessman
but paid no attention to his business. I saw him day and night -- my office
was next to his, I knew who came and went, what went on -- and there was,
as far as I could tell, absolutely no private operation in his own interest.
MCKINZIE: It appears that there might have been some conflict between
the status of Mr. Clayton and Mr. Acheson, both as Under Secretaries in
this earlier period, because of Acheson's previous interest in economic
affairs. Was that a smooth working relationship?
THORP: It was an extremely good working relationship. As a matter of
fact, I've heard their report on how well they worked together calling
on members of Congress, which was, after all, a very important part of
what they did. I have no sense of there ever being conflicts between these
two. I doubt very much if there was even much disagreement between them.
They thought very much along the same line, and I would have great trouble
in sorting out which one of them thought what. So many things float around,
and so many things are in the atmosphere that who picks it out of the
atmosphere is just a random chance. I think that's true of the Marshall
MCKINZIE: We would like to ask you about your
experience at the Paris Peace Conference. The National Advisory Committee
for International Monetary and Financial Affairs seemed to be designed
to play a very important role. Did you have anything to do with this?
THORP: The Paris Peace Conference is a story quite apart from the second
part of your question. I think you refer to what I call the National Advisory
Council of which the Secretary of the Treasury, at this time Fred Vinson,
was the chairman. It was set up originally for the purpose of giving instructions
to our representatives on the International Bank and the International
Monetary Fund, on the theory that they were sort of Ambassadors. They
couldn't be Ambassadors from the State Department or from the Treasury,
they had to represent a group and so this was set up for that purpose.
It was very active for awhile because both of these new
organizations had a lot of early problems. It gradually expanded as a
place for reviewing various particular matters. It reviewed the loans
of the Export/Import Bank. Theoretically, it reviewed them from the point
of whether or not they had adequate security. Occasionally, the State
Department and the Treasury would argue over the application of the term
"security." However, this was really a cover for other considerations
and reflected different attitudes in particular cases. The NAC was the
Treasury's best entrance to foreign economic policies -- and there would
be times when it would be quite active. The NAC had a number of subcommittees,
and every Export/Import Bank loan was reviewed by a subcommittee which
had an interest in the issue involved. Technically the Secretary of State
was a member of the NAC, just as technically he was a member of the Export/Import
but he did not usually attend either, and I sat in his chair. There
were occasional problems where the National Advisory Council got used
as a way of either resolving a difficulty, or of the Treasury imposing
a position. But as a general matter, I wouldn't regard it as an important
center for policy. It had nothing to do with trade policy. It was strictly
financial and its main activity was the backstopping of the Bank and the
WILSON: Was it the sense of the State Department that Europe's problems
were basically problems that could be handled through the Ex/Im Bank,
the IBRD loans, and other long-term plans?
THORP: Well, I would say our concept, which wasn't entirely carried out
(obviously couldn't be; we had to use whatever resources we had) was
that the banks were for long-term growth and development purposes, the
Export/Import Bank had the added function of facilitating American exports.
The other necessity -- relief and reconstruction -- should be handled
by separate congressional appropriations. I think we had a pretty clear
notion about this, although at times we had to amend this idea. For instance,
we didn't have any money for Yugoslavia since it was not eligible for
Marshall plan aid. We had to pound the Export/Import Bank over the head.
No sensible banker would make a loan to Yugoslavia when Tito first thumbed
his nose at Russia. I can remember this as one case where I had to twist
the Export/Import Bank's arm around to the back of the neck in order to
get them to release 40 million dollars for Yugoslavia. We had no other
place to get money quickly.
Also, the immediate French postwar needs were handled through the Export/Import
Bank, from which they got a billion dollars.
It was our policy that the International Bank should handle everything
it could and the Export/Import Bank should pick up the cases that the
International Bank couldn't or wouldn't handle. There were a number of
countries that didn't belong to the International Bank. In this early
period Argentina didn't belong, Israel didn't belong, Yugoslavia didn't
belong. There were a number of countries where we had to do it through
the Export/Import Bank if it was to be done at all.
I don't know how many representatives of governments who came to my office
to borrow wanted to go to the Export/Import Bank, whose interest rates
were lower. They always wanted to go to the Export/Import Bank. I'd just
say, sorry, the door that's open to you is the International
Bank, and that's where they had to go.
WILSON: In our interview with Mr. Collado I gathered that in the early
period at the International Bank there were some difficulties about leadership.
Eugene Meyer was there and I gather that this was a major reason for Mr.
Collado's leaving the Government.
THORP: Mr. Meyer was not at the Bank very long. There was quite a little
shifting around there for a while. Collado was a key man in the State
Department in the very early period but he left shortly after I came to
go over to the Bank as the American director. After Collado and Clayton
left, the Treasury took over the backstopping. The State Department lost
control over the directorship on the Bank. I suspect that Standard of
New Jersey had something to do in getting Collado away from Washington.
He became one of its top officials.
MRS. THORP: This was a little bit of cronyism, I'm sorry to say. I think
that all of this happened because of [John] Snyder, in Treasury. It's
embarrassing, he was so bad and so ignorant; often drunk.
THORP: At a number of dinner parties in Washington, especially in the
Marshall period, (Marshall wouldn't go out except for a head of government
and Bob Lovett had only one kidney so he wouldn't go out much), I was
the third ranking man in State and I was young and vigorous, and had all
my kidneys and all my possessions otherwise, had a wife who was a plus,
and so I was elected to attend these affairs. It was not my charm but,
of course, I was the first man wanted because the foreign visitors for
whom the dinners were given were usually on economic
business. They wanted to have somebody from the Treasury, somebody from
the ECA, and somebody from the State Department. Over and over again we
went to dinner parties where Snyder was also. He liked to go to these
things. Sometimes it was very embarrassing because he did drink much too
MRS. THORP: When he was sober he really had nothing to offer.
THORP: The people under him also were problems to us, but maybe they
should have been; that's the function of the Treasury. George Willis was
WILSON: How much business was actually transacted at these social affairs?
THORP: Very often there would be a dinner to introduce me to the man
that I was going to meet
formally the next day, at an official meeting. My wife hated these dinner
parties, because as soon as we got through eating the men went off. She
was stuck with the women, which wasn't always an attractive thing. These
meetings would range all the way from our getting a little feeling of
personalities to the actual moving in on the problems we were concerned
about. I would say that this was often very valuable. These visitors were
often cabinet line people -- particularly if they were from the Marshall
plan countries. There were other countries where a particular problem
might be important, say, in aviation. But Mrs. Thorp and I hardly touched
Latin America socially. The danger was that if we started in that circuit,
it was hard to discriminate, and they all were socially active. Once in
a while we'd go to Pan American Union for a concert or to the Cuban or
Embassy for a very small affair. We touched only an occasional country
which was secondary in the economic sense at that time. Mostly we saw
Europeans. These were top-level people, because they had to be. Their
wives were frequently much more interesting than generals' or Senators'
wives. These dinners were of number one importance.
Now the number two social burden was the cocktail party. The cocktail
party, I would say, had only occasional value, but then it was really
important. It might be that I would have raised a question formally with
an Ambassador such as, "As to this problem on our aviation agreement;
when is your group coming over?"
Then two weeks later I'd run into him at a cocktail party. I wouldn't
want to call him and question his government's efficiency
by saying, "Look, it's been two weeks; I haven't heard from you."
At a cocktail party I could just say, "By the way, have you had any
word yet?" I would say that this was valuable. Such parties also
gave me the chance to talk with somebody from another U.S. department
inconspicuously. I wouldn't have wanted to go to his office, and he might
not have wanted to come to mine. That might have raised questions. At
a party, I could run into Brannan and talk with him about some agriculture
problem whereas we would have had to discuss it with our staffs present
if it had been an appointment in his office.
MRS. THORP: I think a great many important things happened on social
occasions, and sometimes not directly. Willard's told you about those
that were quite direct, but often somebody will say
something to somebody's wife because he wants it to be taken back to the
husband. They pick and choose pretty carefully, and there were at least
two occasions when people who wanted to defect spoke to me about it. I
was personally responsible for the first reply by anybody in the administration
to McCarthy. There were a number of things of this sort, and they usually
started at a social event.
THORP: On the Economic and Social Council, Clarice was a regular channel
to me of information.
MRS. THORP: Probably the most unusual intelligence "officer."
WILSON: The first instance that you mentioned would seem to have a semi-official
character. How would this be arranged?
THORP: An important guest, say the Finance Minister
of France, would come to Washington for conversations. The Ambassador
would set up a dinner several weeks ahead if he knew the man was coming.
A typical dinner would be one in which I would be there, the political
officer from the Department would be there, somebody from the Treasury
would be there, along with a couple of members of Congress (this would
depend on the problem they wanted to talk about), and three or four people
from the Embassy staff. It would be a dinner party most often of twenty
or twenty-two people, I suppose though sometimes they were much bigger.
I remember the first dinner given by the new Yugoslav Ambassador, Vladimir
Popovij. He dearly wanted to have a private conversation. In this kind
of situation it's very likely that when you leave the dining room, the
Ambassador will suggest where people go and even where they
sit. In the Popovij case, which was the first time we went to the Yugoslav
Embassy, there was a little round table off by itself in the drawing room,
at which the Ambassador and I sat afterwards. Nobody around anywhere near
the two of us, you know.
This kind of thing was fairly standard at the time, but we got other
chances to talk with them that aren't planned this way. For example, I
sat next to [Alcide] de Gasperi at a banquet in New York, where I was
to make a little farewell speech. He was at the time the Italian Prime
Minister, and I had a long conversation with him during dinner. All of
a sudden he leapt up, hastened down from the head table, and disappeared.
The Ambassador, [Alberto] Tarchiani, immediately followed him to see what
was wrong. All of us were wondering what had happened. We knew that he
had had a very strenuous day in
New York; they had given him a program of being in two places at once,
on the hour every hour. The poor man was very tired. He finally came back
to the table and I whispered to Tarchiani, "What's wrong, is he all
"Oh, he popped a button in his dress shirt."
We've probably spent more time on this subject than we should, but I
wouldn't want to leave the matter of dinners and cocktail parties without
adding that Mrs. Thorp and I both enjoyed the experience hugely. To be
sure, there were days when we might have to appear at as many as four
cocktail parties and weeks when we had only one free evening. But this
was high caliber company. It was not always business. There might be a
performance by some distinguished musician or musical group. And -- there
was extraordinarily good food and drink.
WILSON: One of your most interesting experiences must have been attendance
at the Paris Peace Conference in '46. Could you comment on that? We might
start with reparations.
THORP: The problems raised at the Peace Conference were extremely varied.
In the first place, the propositions in the proposed treaties were assigned
to a political or an economic committee, and obviously there were problems
of overlap. For example, the political group decided to set up Trieste
as a separate little area.: This raised a host of economic problems. And
there also was confusion because a number of the specialized problems
were handled by different people. I don't know why the Danube was regarded
as an economic problem, but it did come to the Economic Committee and
Senator [Arthur H.] Vandenberg was in charge of that.
Vandenberg and [Tom] Connally were both there for a good deal of the time.
They were very good friends of Secretary [James F.] Byrnes who also was
there for an appreciable amount of the time. I don't need to remind you
that they were two very powerful Senators. I think Byrnes wanted them
there because the treaties had to have Senate approval. Vandenberg was
assigned to keep an eye on me and sat next to me at many meetings. I must
say no one has ever pointed out the significance of the fact that Vandenberg
and Connally spent a number of weeks in Paris in 1946, where there wasn't
much electricity and there wasn't much food variety. Top people from all
the allied countries were there, and the Senators got a tremendous picture
of the European postwar situation. This was well before the Marshall plan.
The Europeans were excited about them.
I can remember the first time Connally was scheduled to make a speech.
The word went around and everybody came in to listen. Of course, he spoke
with the old Southern flowery ardor. They talked about him for days.
MRS. THORP: It educated both ways; it educated them, and it educated
the Europeans about us and our problems. Senator Vandenberg was more of
a counterpart of the Southern Senator Klaghorn.
THORP: A great deal of preparatory work had been done on the peace treaties
in the Council of Foreign Ministers. Jacques Reinstein, who was the key
American on the economic side at the Council Meetings, sent thousands
of hours trying to muster the facts and discussing the problems with his
opposite numbers, especially the British. When we came to the larger meetings
on the Paris treaty, there was a draft which
represented the approximate agreement by the Four Powers. No one was always
sure what any agreed set of words actually meant. I was, for instance,
at the Council meeting when the so called final agreement on the Danube
was reached. Up to that point every time that the Danube question had
come up (the way they were working on the treaty was going round and round
Article 1 to Article 79 or whatever it is, and then they started with
Article l again), Mr. [Vyacheslav Mikhailovich] Molotov would say, "It's
not appropriate for us to discuss this, because many countries who border
on the Danube and who are concerned are not sitting here at the table."
That was true of most every other article, too, but in this case he would
say, "We do not discuss it," and it was not discussed. The article
consisted of a sentence-long proposal by the U.S. which said that the
Danube should be ruled
by a commission and should be opened for nondiscriminatory traffic or
words to that effect. One day when they reached this number, Mr. Molotov
said, "I agree."
Well, everybody's jaws fell open. There had been no discussion, no hammered
out explanations, no actual record except the brief statement. Not even
a discussion of who should be on the commission.
When we got to the subject of reparations, there had been no similar
prior agreement among the Four, and this subject was hammered out at the
peace conference itself.
WILSON: We have an impression that this idea of international patrol
of the Danube was one of President Truman's own projects.
THORP: I haven't the slightest idea, but it wouldn't surprise me. Let
me tell you why it wouldn't surprise me. Truman knew his rivers. There
was once a proposal to bring more copper eastward
to the ocean from Central Africa. The proposal involved building a railroad
from Lourenyo Marques up through Mozambique into Kenya. At any rate, the
complicating point was that it involved the cooperative effort of the
Portuguese. Since there was some question of how much we should cooperate
with the Portuguese in the Portuguese colonies, this issue was finally
referred to Mr. Truman. I went over to outline this proposal to Mr. Truman
and asked him whether we should go ahead with it or not. To my great surprise,
he said to me, "is it to follow the course of the Limpopo River?"
The Limpopo River to me was Kipling's invention; "the great, grey
green Limpopo River all set about with fever-trees" in the "Just
So" stories which I was brought up on. It never occurred to me that
there actually was such a thing as the Limpopo River. My surprise must
because he then got up and went over to the big globe that he kept in
his office. He whirled it around, found and pointed out to me the Limpopo
River. The route did go up the valley of the Limpopo River. This was one
indication of the fact that on geographical issues he had an interest.
The other was a time that I went into his office with a group to talk
about the way in which the lander in Germany were to be realigned. He
asked the State Department political officer, who was presenting the program,
if he had a map of prewar Germany. The fellow blushed and said no, he
had just brought a map showing the new boundaries, but he'd send for one
Mr. Truman said, "Oh, don't bother." He went to the bottom
right hand drawer of his desk which had nothing in it but folded maps.
He thumbed through these maps, pulled out
a map of prewar Germany, and went on with the discussion.
These two stories suggest a geographical interest and perhaps why the
Danube problem would have specially appealed to him. However, I do not
remember ever hearing of his interest.
MRS. THORP: He certainly has always been terribly interested in history
and reading history. The Danube has always figured so large in what Americans
have learned of European history, that it's very well-known and his interest
was probably awakened as he read.
THORP: I don't intend to say that the peace treaties operation was one
in which, on the economic side, I did all the work. I had a good staff.
However, I sat at the table, did all the speaking and arguing as well
as the negotiating outside. Mr. Byrnes was in Paris for most
of the time and I checked with him from time to time, but I'm not aware
of this being more than asking for general approval.
On the reparations issue we brought in people who made guesses about
capacity to pay, helped work out speeches, and then I argued them. I remember
one speech on Rumania or Hungary, in which I had a very elaborate statistical
presentation of its capacity to pay and so forth. I must have taken about
an hour to present it. At the Peace Conference there was consecutive translation
so it took the whole morning to be translated into French and then into
Russian. The Russian reply came the next day. This was an important enough
issue to bring [Andrei Y.] Vishinsky in. Vishinsky started his speech
by saying, "I'd like to say something about the American delegate.
You may not all know that he's the
president of the American Statistical Association," which I happened
to be that year. "We all know that statisticians are liars and we
know American statisticians are especially liars, and the president of
the American Statistical Association must be about the biggest liar in
the world. Therefore, how can we give any weight to this presentation
which he made yesterday. And anyway, what does all this matter when one
takes into account the damage which Russia suffered during the war? No
amount of reparations can be adequate." Then he went on for an hour
with no reference to the other countries, talking about Russians killed,
houses burned down etc. This was just a standard speech which they made.
MRS. THORP: This made headlines in all the New York papers, this attack
on Willard Thorp. At
this point I was practicing law in New York and the afternoon papers were
out (at that time there were afternoon papers). Willard's best friend
telephoned me and said, "Clarice, have you seen the afternoon papers?"
I said, "No."
He said, "Well, there's no hope for our getting along with the Russians."
I thought he was really out of his mind, and I said, "Why?"
He told me about this attack, and I said, "Well, don't you think
you're exaggerating Willard's importance? Do you think this is really
going to cause a breakdown in our relations with the Russians?"
He said, "No, don't you understand me at all. I just think that
if anybody who is dealing with Willard (who is so mild mannered, never
loses his temper, never is unpleasant) attacks
him in this fashion, it shows that they don't want to get along with us."
I think there was really something in that.
THORP: As a matter of fact, they did get along with us to some extent.
One of my minor diplomatic procedures that turned out well was that I
would go to Arutinian, my Russian opposite number, and say, "I think
you've really got something on this point. So I have redrafted our proposal
and I wish you'd look at it. See if it doesn't meet your position."
It really was just a paraphrase of our earlier position. It wouldn't be
any change in principle, but it might actually soften a word or something.
He would take it to Mr. Molotov and tell Mr. Molotov, "Well, we've
really won this one. The Americans are proposing to change it." Three
or four times we
settled a problem on the basis of my redrafting.
MRS. THORP: Willard, you haven't finished the Vishinsky story.
THORP: I should say that when Vishinsky finished his speech, when he
reached me on his way out of the room, he reached down to shake hands
with me before he left, after calling me the biggest liar in the world.
WILSON: What attitudes did you personally bring to the conference about
THORP: My heart was in what we were putting forward because I felt that
these countries should pay reparations. About some parts of it, like the
restitution of artistic property and the like, there was no argument in
my mind. I did feel that the basic reparations had to be in a form which
did not involve currency transactions,
because of the post World War I problems, and that's what we worked out.
I felt that they should transfer amounts of product related to past records
of production in the countries, thus being non-destructive but nevertheless
a burden. We didn't try to get the very last ounce, but on the other hand
we didn't want it to be just symbolic. It was to be thought of as a significant
payment made in terms of native products. Incidentally, we were not seeking
payments to the United States but to the Allies who had themselves suffered
destruction. I should like to interject another point here.
Just as in domestic controversies a great deal depends on the interpretation
of the language, internationally it does too. In a substantial number
of cases I have seen this come about, two of which are connected with
the peace treaties. I won't give you the full
details but one stemmed out of the fact that the Russians (having only
governmental aviation) had no word or even concept for civil aviation
treaties. We thought we had an agreement and the Russians almost knocked
out the treaty when they discovered that this meant that Mr. A and his
private plane could land in Trieste. The words didn't mean that to them.
Similarly, when reparations came up and the Greeks at the final meeting
asked if they could get sulphur. The Russians said, "No," and
I said, "Yes," because as we drafted it, mineral products were
permissible. According to the Russian's translation, sulphur is not a
mineral product, because their word for mining involves going down into
a hole in the ground; surface stripping is not mining. Therefore, we had
a hassle for a little while, though we had no basic disagreement. We had
to work out a new phrase, I don't remember what it was, but it's something
like "products extracted from the soil." If five years later
the Greeks had asked for sulphur from Italy and Italy had said, "No,"
we would have been mad. If Italy had said, "Yes," the Russians
would have been mad, and everybody just would have said this is dirty
dealing. We just happened to catch it at the time. I don't know how often
this happens, but I'm sure it underlies many international disputes.
WILSON: Was there at this time any substantive difference in the American
position with regard to reparations from Germany and Italy? Was there
a partiality on the American side with regard to Germany and Italy?
THORP: Oh, yes. Germany was really regarded as a bitter enemy. At the
end of the war, there
was the Morgenthau plan which aimed to reduce Germany to a third-class
country in economic terms, unable ever to start a war again. Italy on
the other hand, had come around finally, and was not a real threat to
the future. To cite differences, reparations were set on Finland; we had
not wanted to go through with it at all, but the Russians were insistent
on Finnish reparations. That's the one case where we really argued for
inability to make any substantial payments.
Another thing that is interesting is essentially a technical matter.
The final session to approve the draft treaty was set, and we hadn't yet
arrived at a reparations figure for one country, for Hungary I think.
It may have been one of the other countries. We started two days before
with this on the agenda, and the Russian had just been stalling. It was
that they were going to stall this meeting so we'd not reach a vote in
time to be considered at the final session. The meeting started in the
morning and it wasn't until the next afternoon that (through some parliamentary
maneuver which I've now forgotten) we finally brought it to a vote. I
was in the chair one day, one night, and most of the next day.
Mr. Vandenberg came in the next morning looking nice and fresh and I
had been there all night. I think the important thing, the new thing about
the making of these treaties, would be the presence of Connally and Vandenberg
actively participating. In our hotel (we had the Maurice Hotel for the
whole U.S. delegation) we had electricity seven days and nights, and we
had heat, for this conference went on until the end of October. This was
not true anywhere else in Paris. On food, for instance, or
alcohol, you were out of luck. There was virtually no wine as of that
time, and no desserts except the seasonal fruits. You had a couple of
weeks when they gave you a pear, a couple of weeks when you had cherries,
and so forth. It was really an important experience. Of course we didn't
just sit in Paris. Life was active. The negotiators were there, the British
were there, the French were there. My opposite number from France was
[Herve] Alphand and [Maurice] Couve de Murville was the French representative
in the political group.
WILSON: I asked that previous question in part because of the possibility
of domestic political pressure on people like Vandenberg and Connally
even though they didn't have many Italian-Americans in their constituencies.
Did you have any sense that they were conscious of the
necessity to give Italy certain treatment, or to treat Germany harshly.
THORP: There was something on which Vandenberg insisted on making a speech
because it related to people in his constituency. I wonder if that was
the Danube by any chance?
MCKINZIE: Did you go directly from Paris to your work on the Ruhr question?
THORP: No. That was, I think, an intervening question. I was in and out
of Germany on various problems. I can give you some atmosphere but not
much detail. Germany was run largely by the occupying generals. General
[Lucius] Clay of the U.S. was the one I saw most often. Back in Washington
[Patrick] Hurley was the key fellow for some time. When, after much debating.,
Clay, the British, and the French would be unable
to agree, the issue would be sent to the diplomatic group. There must
have been three or four times, in varying degrees of formality, when a
sort of commission was set up. If it was political I wouldn't be in on
it, but if it was an economic problem, for instance, the currency problem,
I would either go to Berlin or we'd have the meeting somewhere else. I
don't think any of these were actually resolved in Berlin. I think we
wanted to be away from the generals to resolve them. We would work out
some solution and, of course, the generals would make it work (cursing
all of us madly for giving away the positions that they fought for). Our
job was to resolve it somehow. I was in and out of Germany in that sense,
although initially I was as concerned about the whole development of German
policy as anyone. The problems continued. There was the problem of getting
Germany into the Marshall
plan, for example.
WILSON: General Clay and his assistants undertook a very strong program,
not on their own entirely, which often contrasted with the official policy
of the United States Government. While they were doing these things there
was a continuing debate about the military giving over the occupation
to the State Department.
In this relation were they sincere about it or did they want to get Germany
off their hands?
THORP: For a considerable period, the State Department regarded the fact
of occupation as placing Germany in the Army's hands. After the war, it
was very slow in setting up a German unit in its geographical structure.
This was very unsatisfactory on the economic side so, before the political
boys acted, I set up a small unit to concern itself with Germany's
economic problems. It consisted of Walt Rostow, Kenneth Galbraith, and
Emile Despres. How's that for State Department quality?
By and large the State Department became more and more distressed about
the status of Germany and the situation there. The Berlin Airlift crisis
was an indication of weakness: I think every government felt that Berlin
was one of our vulnerable spots. Those people that were worried about
the Russians felt that we were giving them a great opportunity to put
us in a difficult spot. The State Department was trying more and more
to take over the responsibility, but it was tempered by the fact that
the War Department was able to get GARIOA funds out of Congress, half
a billion dollars a year, and while it wasn't all for Germany (some was
for Japan and other countries),
I've always wondered why the Army didn't make major efforts to get out.
One important element was probably the fact that common action was required,
involving the military of the U.K. and the military of France. Our military
was not going to get out if the other military were still there. It really
wasn't an economic problem. The economic problems were day-to-day puzzles:
what do you do about American property in Germany, and how do you handle
restitution. Who controls monetary policy, etc. I also had something to
do with the effort to get the principles underlying earlier reparations
programs shifted to an unstable base. The Morgenthau plan was a program
for which I had no sympathy, because it just couldn't work. I had no expectations
that removing factories was feasible and I learned later that most of
what Russia got was never reconstructed. I think the
U.S. got one factory for making silver foil. In Washington, one of my
greatest problems was that Congress isn't willing to have a person who
really knows about something come and testify. They want a person of sufficient
rank. And, therefore, the amount of time I had to spend testifying about
things which I'd only learned about during the previous 24 hours was just
fantastic. Committees of Congress would insist and so you would do it.
I visited in Amherst a year or two after I had been in Washington, and
in a speech congratulated the faculty on the perfect training they had
given me for my job. Everyone in the faculty seemed to be very pleased
until I said, "What you did was make it possible for me to pass the
test after having learned all that I knew about it in the previous 24
WILSON: You were involved throughout your period in the Truman administration
with the ITO and the negotiations for GATT?
THORP: No, that isn't quite right. This was Will Clayton's specialty
-- Will Clayton, working with Clair Wilcox, [Louis Joseph, Jr.] Halle,
and then with Ray Vernon. He also handled the ITO negotiations. I was
familiar with it all, and I was involved in a certain number of
specific things. I was in on several sessions, but I didn't go to the
Havana Conference, for instance, which set up the Charter. I was involved,
once they had the draft charter, in some of the hearings that were held
around the country. The creation was primarily Mr. Clayton's affair.
Once the GATT was set up and operating I became more involved; and was
the U. S.
representative to GATT sessions. By that time, Mr. Clayton had left the
Department. I was in charge of the Torquay negotiations and headed the
delegation, but I was only there a week or ten days when I got a cable
that I must return. The French had a financial problem and the Department
wanted me to handle it; [Henri] Bonnet was coming over. So I left the
conference after the initial go-round of speeches.
It's only fair to say that the original GATT negotiations and any later
tariff reductions are the kind of thing in which there must be almost
resident representatives, who are waiting most of the time either for
their own government to tell them what to do, or for the government they
are negotiating with to tell its representatives what to do. Win [Winthrop
G.] Brown and people like that were there to handle these things. I got
involved in it occasionally.
I did go to the regular GATT meetings, as distinct from GATT negotiations.
I also had to handle trade problems at home. Senator [Wayne Lyman] Morse,
for example, was all steamed up about the possibility of a tariff cut
on Italian maraschino cherries. He took the position that it's all right
to talk about people being able to shift from one industry to another,
but you can't shift a cherry tree anywhere. Therefore, trees, fruits,
and nuts ought to be something in which a person who plants one is assured,
for the life of the tree, that the market conditions will not be changed
by the government. The issue went all the way to the White House and the
tariff was cut.
At GATT I had probably the most difficult problem that any American has
ever handled in international negotiations. That was when quotas on cheese
were established in an amendment
to the National Defense Act. I had to explain to the other countries just
why the United States believed that imports of cheese were being restricted
on the grounds of national defense. That was rather difficult. This had
been an amendment that was put on at late midnight. We had become a cheese
eating nation during the war; we doubled our per capita consumption of
cheese. Of course, there were no cheese imports during the war. When the
imports started again, it was regarded by American cheese producers as
a very improper thing for these foreigners to do. There was a market which
they had built up, so they said. Before the cheese imports had even reached
the cheese imports level of before the war, they began to be very steamed
up about it. A quota requirement was then tacked on to legislation which
the President couldn't veto.
Under one GATT commitment, you could do this sort of thing, but if you
did it then other countries were entitled to raise a tariff against you
as an offset.
At the next GATT meeting, I explained the background of this and how
the Executive Branch would try very hard to get it adjusted. I put on
a great deal of weight because I ate cheese at every luncheon and dinner,
demonstrating my great love for cheese. We finally got an agreement giving
us a year to correct the situation, but we were not able to. I remember
testifying later before the House Agricultural Committee about this, and
having a member from Minnesota inform me that Minnesota had developed
blue cheese. What right did these Danes have to come in with blue cheese
since Minnesota was the real source of blue cheese.
The GATT was a real addition in the trade
field because you could not only try to work these things out, but on
a number of situations it really was a judicial problem. For instance,
the Germans lowered the tariff on Norwegian sardines, not on Portuguese
sardines. Are these like commodities? Are they different commodities?
This gets resolved in GATT to the delight of everybody, including my wife.
At GATT cocktail parties she served both kinds of sardines with labels.
I would say that on the trade side, I was completely enthusiastic about
the ITO charter. All of us had been moving in this direction, but much
of this now is gone. The most favored nation business is pretty completely
lost. We have reached a point where tariffs are so low that the problems
are shifting; other kinds of problems are developing. I made lots
of speeches all over the country about trade and the importance of expansion
MCKINZIE: What sort of reaction did you get when you would go into Milwaukee,
Wisconsin or wherever you went?
THORP: This was a very favorable period, and we were all completely misled
about potential reactions to imports. The Reciprocal Trade Agreements
Act was passed in 1934. Trade was minimal at that time because of the
depression. Nobody was greatly concerned with competitive foreign trade
at that point, and there was no feeling that foreign markets offered as
any hope. The war completely shut off foreign trade. After that countries
concentrated on their reconstruction, so they used their resources (n
domestic rebuilding. In the late forties we all thought that the battle
of free trade was won. There were few objectors, with a very few outstanding
exceptions. The case that I remember best concerned Swiss watches. That's
when a labor leader, marched up and down in front of the White House with
a Roman toga on, and a sign saying, "Rome burns while Byrnes roams."
In fact, Byrnes was off to the U.N. or somewhere.
The import of Swiss watches far exceeded our domestic production. The
Waltham Watch Company went to pieces but other American watch companies
were prospering. I suppose there was no single item in the trade field
in which the State Department was more involved than in the demand for
increasing the tariff on watches. The defense people said they had to
have the watch industry because they were the only people that could make
the minute kinds (no pun intended) of equipment required
for fuses. When we looked into that, other manufacturers like General
Electric said, "Well, we can do it too." In any event, it turned
out that you didn't need the whole industry to do it. This was a continuing
squabble long after I left the Department. The Swiss Minister, Mr. Charles
Bruggmann, who was married to Henry Wallace's sister, pursued everybody
-- a sweet person, but a sincere nuisance on this issue. I did get into
an appreciable number of trade problems, particularly after Mr. Clayton
WILSON: Is it fair to say that the principle in the Department and in
general was that the U.S. economy was officially competitive and would
be able to adjust to any situation.
THORP: Oh, sure. I would say that the problem didn't really become major
until the sixties when
foreign production was again in good shape. Certainly through the fifties
I don't think it was except for a limited number of special cases. After
all, the Reciprocal Trade Agreements Act was regularly extended.
MRS. THORP: I'd like to add that the cheese lobby has never given up.
There were characters -- whose names I don't remember -- who used to telephone
at home to castigate him for fighting for free trade, and when
they wouldn't find him at home they'd castigate me. Very incredible lunatics.
THORP: One of our biggest problems in the Marshall plan was the tobacco
group, and that wasn't import, that was export.
WILSON: I talked to the Greek representative to the old ECD this summer.
He spelled out quite clearly that the occupation authorities in Germany
were able to bring in tobacco, and Greece had great difficulty in that.
THORP: You could have gotten the same story from Turkey, but I would
say we had surprisingly little of this. I think the tobacco case was probably
the worst one and the export of cotton was always around to worry about.
MCKINZIE: You alluded a few moments ago to the "buy American"
problem that began in the 1930s, very early in the depression. It obviously
was in conflict with the Department position that you have to increase
imports in order to expand exports as well as to revive European countries'
economies. How did you deal with these Congressmen when they came up with
THORP: This wasn't so much Congressmen. As a matter of fact, the case
I remember best was an Army purchase of microscopes. Japan, which is very
good on optical goods, insisted that it should have been given more consideration.
The problem of "buy American" is that it was on the books, but
the law did not set the percentage which you had to allow the domestic
offered price to be above the foreign one. Could the Americans have the
sale if his price were 50 percent more or 75 percent, or how much? The
big battle was with the Defense Department as to what this percentage
should be on a number of items. The microscope issue was brought right
up to the Secretary of Defense. Finally he bought half from Japan and
half from an American firm.
WILSON: One discordant note in this period was the
arrangements and the encouragement given to what was a regional situation
under the European Recovery Program. There was a serious difference in
principle between what I suppose was the State Treasury approach, commitment
to the ITO charter in GATT and the sort of things that went on in 1948,
'49 and '50 under the ECA and their encouragement of a discriminatory
arrangement on a regional basis, the efforts to bring about European integration,
economic integration. How serious was that?
THORP: We were very insistent in connection with the Marshall plan that
barriers to trade should be lowered and we argued for "most-favored-nation"
terms. However, the initial obstacle was the unusual use of quotas in
Europe -- not so much tariffs. The integration problem was one about which
we in the economic side did
worry a good deal. The members of the Common Market were to give each
other more favorable treatment than they gave the rest of the world.
On that there were two answers to our position that came through. One
was, to hell with the economics of this, this is an important political
move. That easy answer eliminates an economist, who hasn't got much more
to say except, "Okay, but there's a price you're going to pay."
Sometimes we got a chance to say that and sometimes we didn't.
The other answer was to obtain a commitment that this would not lead
to an increasing of tariffs against the outside. It would lower the tariffs
inside; the tariffs outside would become identical for the Common Market
members and would start at the average of all the existing tariffs. Depending
on the product, it meant
increasing the tariffs for some countries, and lowering them for others.
Tariffs would be set at their average. The Market would go on as a unit
in the GATT, negotiating lower tariffs on a reciprocal basis. The individual
countries were all committed to lowering tariffs outside, as a general
principle. Our great worry was that it would build up a higher and higher
fence and so forth.
Theoretically, this argument happened to come along in writings by Jacob
Viner about whether or not a common market was trade diverting or trade
creating. It gave a possible theoretical justification of a customs union
under the kind of circumstances which we had. The economic opposition,
for these two reasons, was not one hundred per cent effective. I don't
remember ever forwarding a memorandum that was anti-European integration
economic side of the Department. We had our worries about it, but these
two things kind of took care of us. One took care of us as honest economist
(the Viner analysis) and the other took care of in terms of saying it
was none of our business. I would say on this basis we were unhappy about
it, but not aggressively so. I shouldn't say "we." We did have
some people who were so strongly ITO charter minded but I must say when
people have said to me, "Look, you've got 48 states," and go
on, "You've got 48 states with no trade barriers, you've got a Custom's
Union in your county. What's the difference if we have some sub-areas
too, within a total? It's kind of difficult because after all the Common
Market didn't add up to as much trade as our 48 states added up to.
The ECA itself wasn't entirely sure about
pushing integration. It was quite a shock when Eisenhower made that speech
in London at the Pilgrim Club. He really pushed for it, and then it gradually
grew as a means of tying Germany to the West.
MCKINZIE: May I just take it back a little bit before the creation of
the ECA, and talk a little bit about 1946 and the early part of 1947.
So far as the American public was concerned, Europe existed but in a kind
of great gray kind of zone and then suddenly in the middle of 1947 it
was discovered all at once by, say the man on the street, that Europe
was just in a hell of a shape, that recovery had not occurred, that the
kind of development which had been anticipated simply wasn't even about
to happen. What I would be interested in is your impressions of the Department's
and the Department's awareness of Europe's failure to recover before all
of this sudden Marshall plan business came out of that.
WILSON: Could you give a narrative of your involvement in the
European recovery plans of 1947?
THORP: I was in Europe in '46; peace treaties consumed quite a chunk
of the latter part of '46, so I can't talk about the Department. I would
say that we became aware of the degree of difficulty pretty early, largely
because we were involved in it. Europe was in our hands. We early on discovered
the things one doesn't have in mind -- a company's factory may still be
there, but all of its records were bombed. The manager doesn't know who
his customers were, and he doesn't get back the people that were in its
sales department. How does this get going again? It was this kind
of disorganization that was the surprise. We did know, from the bombing
surveys and things of that sort, something about the amount of destruction,
but we didn't have any idea about the destruction in terms of foreign
assets and ways of earning foreign exchange.
I wasn't involved in UNRRA very much. UNRRA didn't cover the whole area
anyway. I was involved, before UNRRA was over, in the British loan problem.
I was involved in the GARIOA problem. That's the amount of funds required
in Germany run by the Defense Department, and a post-UNRRA program for
poverty states which I administered. That was in the State Department,
the early '47 appropriation.
There was what I call post-UNRRA, and after that was interim aid. Interim
aid was to keep you going until the Marshall plan took
over. So after UNRRA, the short-term aid programs were run in my shop,
and that meant very close attention to the situation in the countries
involved. The fellow directing it was Ty [C. Tyler] Wood.
An even more pressing source was the fact that during the period of ’46
and building up to '47 we had this steady stream of visitors from Europe
coming over with their appeals. People like de Gasperi and [Georges] Bidault
came over to Washington and outlined their difficulties. Certainly we
were very much aware of the economic mess that Europe was in, though not
in terms of sitting down and drawing up a financial statement about just
what was required. We were struggling with all the European countries
to get more exact knowledge about their financial affairs. We were pretty
insistent about that from the countries getting aid.
In two cases we got excellent information. One was Keynes' presentation
to putting forward the British loan. That was done in the Federal Reserve
Board Room ( it took two days) and was a perfectly magnificent outline,
statistical where necessary, of British obligations, capacities and requirements.
It came out with a need for more than the final figure and that was on
an assumption, which he didn't live to see whether or not he could bring
it about. He hoped to negotiate substantial reductions with the countries
holding blocked sterling claims. These were amounts owed item -- India,
Egypt, and others -- in payment for services and goods which they had
provided the Allies during the war. Keynes felt that this should be their
in the postwar situation, or that payments should be scheduled
over a long period of time. He was convinced that he would be able to
work this out. What he didn't know was that he wouldn't live, and furthermore
that you couldn't go with this request to India, which was the biggest
claimant, as I recall it, under the political circumstances which had
developed. Then it would look like a deal for freedom to India. This reduction
in sterling claims was an assumption underlying the loan which would have
made a good deal of difference.
As a matter of fact, most of the loan went right through England and
on to other countries to meet demands for unblocking sterling claims.
You may remember that the loan also had a provision requiring the U.K.
to make sterling convertible. They tried but it created such a run that
they had to shut the doors again.
The other perfect presentation was by Dag Hammarskjold who came over because
of an odd Swedish problem. The Swedes ended the war with lots of gold
and European currencies. Immediately people in Sweden started buying from
the U.S. boatloads of all kinds of stuff -- things that they hadn't had
and wanted like citrus fruit. The problem was that in our trade agreement
with Sweden, there was no way in which they could manage to limit the
purchases from the U.S. and permit whatever they could buy from England,
France, Switzerland, anywhere else. He and I had one of the most interesting
negotiations I've ever had in trying to decide how to fit this odd set
of circumstances into a boiler plate, most-favored-nations. His knowledge,
and the data that he had on Sweden, was something like Keynes' knowledge
On the other hand, the French never could give us any decent information
about anything. The French had no balance of payments estimates. When
you think about it, they don't today. The French overseas territories
are involved, lumped in. There are the franc areas and so forth and so
We had, I would say, a pretty good picture, but no overall view. Things
came in bit by bit and I think one of the real contributions to the Marshall
plan was the fact that we had to take this material up to Congress. We
went up in '46 for UNRRA, for GARIOA, for the Philippines, and for the
British loan, perhaps more. We went up first thing in '47 for the post-UNRRA,
and for Greek-Turkish aid. I showed up there before the four committees
insisted on these needs over and over. Then of course, the proposed authorization
and appropriation had to be debated and finally
voted by Congress. This steady stream of demands brought the reaction
which anyone would expect -- sort of a "you here again? Why don't
you come up once and for all and tell us what the problem is in total
and what it is going to look like. How long before they can take care
of themselves?" It was just an automatic consequence of that situation.
As far as Congress was concerned they had to have something like the Marshall
plan or else they were just sick and tired about this kind
of performance. I was getting more and more tired about it, after all,
this was no fun for me. But it did convince me that our method of short-term
limited aid wouldn't do. Even in that, it was hard to make estimates of
need if you didn't have an overall picture. The countries were normally
quite interdependent and what each did affected all the rest.
WILSON: Yes, did you think you could do it?
THORP: Yes. Obviously we were getting at the end of that road and had
to take another tack.
MRS. THORP: He had been talking about it for months, so he could.
THORP: As for Congress again, this isn't just a matter of going and testifying.
In those days you went and sat down with the committee in the executive
session day after day and talked about it. We had very good working arrangements
with these committees. I would spend hours with them, and I'd sit with
them when they'd mark up the bill. Ty Wood would do the same. And remember,
here was a constant flood of officials from European countries coming
over to tell us what their troubles were.
WILSON: One of the things that doesn't quite ring true is an often repeated
story that somebody in the spring of 1947 said, "My God, look at
the situation Europe is in, we must do something." In two or three
days there came Acheson's speech, or there came Mr. Clayton's trip around
Europe and a memorandum he wrote.
THORP: This calendar might be true. This series of events was itself
a demonstration of the problem. Mr. Clayton was our leading observer;
his observations were the most important with respect to the situation
in Europe. There also had been two (there still was one more to
come) terrible winters.
The first year the Marshall plan got completely screwed up by the weather.
We had to provide winter wheat when we wanted to provide the machinery
set out in our beautiful
first year program, Congress wanted to know every item. We had to prepare
for Congress a complete program of what was to be purchased and sent,
as far as we could see it. It was over a million items on the computer
(the kind of computer there was then, the punch card thing), put together
to create these black books.
WILSON: Was there confidence at the time of the speeches that you could
get the kind of information from Europe which was necessary; that European
nations would come together and cooperate?
THORP: It was expected. I don't think anyone really visualized it in
detail, except maybe Mr. Clayton. This is an unknown to me. What happened
in Europe was directed by him. I am sure that he had a great deal to do
with what came out of it, but the questions of whether or not the Russians
should be invited, and just what form the OEEC should take. I'm sure he
did some consulting with them. I'm also sure that he gave them some notion
of possible limits of amounts, because God knows you could make this an
We didn't have any questions about the European side on this. As a matter
of fact (having put the finger on Congress as one source), I would certainly
put the finger on the European countries themselves. Everybody thinks
Marshall came up, Bevin started galloping and the Europeans suddenly saw
the light. The Europeans for months had been talking about their
problem of how to answer our questions if they didn't know what
other Europeans were going to do. After all, their lives were mostly integrated
with each other economically. The
French, the Germans and the Italians bought and sold from each other.
The Dutch wouldn't buy any French wine because the French wouldn't buy
any Dutch tulips. The only way to get this going was to get them each
buying from the other. Everybody that came into my office raised this
problem with respect to the European picture. They were forced into a
recognition of dependence on each other, and the terrific problem of the
quota system and everything. Quotas could only be reduced on some sort
of simultaneous basis, but Europe had no machinery for this and apparently
it didn't occur to them to try to somehow set up their own operation.
There was the hope that the new U.N. ECE would become such. One of the
interesting early questions about the machinery for the Marshall plan
was whether it shouldn't be put under the
U.N. ECE, rather than be handled outside of it. The problem, fortunately,
was settled by the fact that the Russians wouldn't agree on who the director
was to be and the ECE didn't really get organized until after the Marshall
plan was going. It wasn't there at that time so we were hung up about
it as a possible organization. I doubt very much if it would have happened
anyway, but it was at least one of the things which was explored.
MCKINZIE: After the Marshall plan and the ECE were created, some people
tried to bring the two into an orderly relationship. There wasn't much
THORP: The memberships weren't the same, but they did develop a sort
of a division of labor. The ECE took care of most problems that were
East-West problems; so, if it was a matter of Czechoslovakian cement being
shipped into West Europe this got discussed there.
MCKINZIE: You say, "fortunately." I assume by that you mean
that it would have been a kind of hard program to sell if it had gone
under the ECE .
MRS. THORP: Harder to operate even.
THORP: It would have been harder to operate and harder to sell the aid
program under ECE. I find it hard to visualize it moving as quickly as
it did under those circumstances. We had had trouble operating UNRRA because
the Russians were both difficult and slow. Somehow, they didn't seem to
know what discussion meant. To move quickly, it had to have some
kind of power center. Of course, the Marshall plan had the U.S. as a power
center with Canada.
We should give Canada a lot of credit in this. Canada is forgotten; nobody
remembers that Canada had anything to do with the Marshall plan. Canada
made a substantial contribution, and was an observer -- the same status
that we had -- in the OEEC.
MRS. THORP: Marvelous people represented them here.
THORP: The Canadians were, in this period of time, the conscience of
the international community in the trade field. They were tougher than
the U.S. about the proprieties and what should happen, and really served
a terribly useful purpose there. They've been forgotten here, also.
WILSON: One of the things that has come up is the contrast between the
kind of information which the United States had about the state of the
U.S. economy, the kind the European governments had about :their own.
One Greek said, "Well, the Americans were asking us for information.
Necessarily asking us for information we could not give, and we made it
up." I'm not sure whether he believed that he had fooled Americans
THORP: I think one of our worst problems was with the Yugoslav case.
(That wasn't a Marshall plan country, so it had to be handled differently
when it broke with Russia). They had a planning commission and would give
us their plans for the year. We discovered after about two years that
what ended up at the end of the year had no similarities to the Planning
Commission expectations. We really got into
trouble when our assistance moved into less developed countries like Saudi
Arabia where the head just hands out a bag of gold to somebody and there
are no pluses or minuses or even numbers in their accounts.
MCKINZIE: Did the increasing tendency to blame everything on "the
communists" and to justify actions on ground that they were "anti-Communist"
erode the influence of the economic people in State?
THORP: On our economic side, I don't think this had very much to do with
it. We would give our best to keep it minimized as far as we could. Of
course, the Communists were terribly helpful in taking over Czechoslovakia
just when the Marshall plan was coming along, a godsend from the point
of view of convincing Congress. We had to battle Congress and the Defense
Department considerably not to be too tough with respect to trade with
the Soviet Union. This was at one time a very serious threat; my spies
came to me and said that the Defense Department was going to propose in
the Cabinet meeting that the U.S. should refuse aid to any country that
sold anything to the Communists. I remember my wife and I had a dinner
date that night. I got all my fellows together and they worked all evening
on what was the right position to take. After dinner, I went back to the
office and worked it over. I didn't like what they had but we finally
came up with a limited program which the Secretary of State, took to the
next Cabinet meeting, the one before Defense's plan was to be brought
up, and got it through. The Defense program was never submitted. I think
it was Acheson that
got it through. Then the Battle Act: I remember going and calling on Congressman
Battle and saying, "Look, here's a big gap in legislation. Would
you be willing to help us try to fill in with something that we can live
with?" And so we got real legislation, which leaves a loophole for
the President and which we could live with.
WILSON: Could you talk about one of the committees that you chaired,
the committee in the summer of 1947.
THORP: The Marshall speech, as you know, was not really a joint plan
or complete in any detail, but this is the normal Government process.
Whenever the President or the Secretary of State is making an important
speech he searches through the Government to find an idea from somebody
that will be fresh. I've sometimes thought that
probably the best way to move an administration on was to get the President
to speak to the U.N. or the A.F. of L., or at a commencement. This forces
him to search for something that gets you out of the rut.
In the case of Lend-Lease, the Marshall plan, Point IV (and I'm sure
that one could find a number of others), there was nothing but just a
gleam in the eye that was presented. Even thought it might have been perfectly
right and absolutely essential, it immediately goes back to the working
stiffs, to find a specific skeleton and then put some flesh on the skeleton.
The Marshall plan was really very much that way. In general concept it
was spelled out by Marshall, although he left it to the Europeans to develop.
Just what the U.S. Government was to do and how it was to be
organized is not included in the Marshall speech.
At first it was all hypothetical because no one was sure as to whether
the Europeans would really go through with what seemed logical for them
to do or whether they would be stymied by some such superficial diplomatic
problem like where to meet, or run into some basic difficulty. In spite
of this uncertainty, we felt that we ought to start to do something. We
started meetings of what we called the Board of Directors on June 25.
It met then July 1st, again July 3rd, and rather intermittently. I think
my last record of a meeting is October 28th.
Some of this time I wasn't even in Washington, although I do find that
I came back three or four times for meetings of the group.
MRS. THORP: You got married.
THORP: Yes, that's right.
There was a British financial crisis right in the middle of it all. That
almost prevented my getting married but the British crisis got solved
just in time. At any rate, this Board of Directors met regularly. It had
one person assigned to it full time, Charlie Kindleberger, who would presumably
prepare a memorandum. We would meet and go on from there and debate about
it. This was, in a sense, a very real preliminary effort to think about
how this thing should operate.
The Board of Directors included C. Tyler Wood and Dal [Dallas W.] Dort,
who were the two doing the interim aid program and were right in the middle
of the operating problem. Harry Labouisse had been involved in the occupied
territories work. Bonesteel came into it representing the Defense people
a key figure in the thing, and Paul Nitze was there from the start.
It always met at night; it was not to interfere with the daily work although
Kindleberger was taken off all his other work. As a matter of fact, one
of the interesting aspects of the Marshall plan is that, like anything
new in the Government, there was no provision in the budget or the personnel
for developing anything new. Therefore, this all had to be done with people
doubling up; either doing this and their regular job or doing a person's
job for him, or by borrowing people from other places to fill in. It was
all done that way. In a speech I made, my presidential address to the
American Statistical Association (it's in the American Statistical
Quarterly) on international statistics or something of that sort,
I gave some data about the magnitude of the statistical job that was involved
The Board of Directors worked on ideas like counterpart funds, what should
be in the agreements between countries, and so forth. It was not something
that went up at that point for higher consideration. We felt "who
else was going to put this together?" This was a natural continuation
of operating in the field. Of course, various other problems emerged that
had to be taken by the people at higher levels; by political officers
or by the organizational people. We were talking at lunch about who should
administer this. Our original thought was to continue with the same group
that was doing it. But when this idea went to Congress it got shifted
over to having separate administrations. Then the amusing thing was that
when Mr. Hoffman came in he took all my gang over to ECA so that
the State Department personnel actually carried out the program.
MCKINZIE: Could you tell us something about the importance of food in
the beginning of the supply program to Europe?
THORP: Yes. There were a number of different commodities of which there
are special stories and special relationships. One could talk about tobacco,
where there was special effort to develop a market through the use of
the Marshall plan. I don't think this happened with very many commodities.
That's a very conspicuous case. The oil problem had to do with moving
foreign exchange around from country to country, which was really quite
important to the petroleum companies. The motion picture situation was
one in which suddenly a number of countries began to ration
screen-time. Foreign movies could only have a certain number of hours
each week in a particular theater.
As to food, the problem became a very real one. I think the best demonstration
of that is by looking at the Marshall plan expenditures and comparing
them with the program that had been worked out in the black book for the
first year. If you do that, you'll find that much more food was going
to Europe than had been planned and the net result was a cutback in the
amount of machinery and equipment which was sent. This was made necessary
by the failure of the winter wheat crop and the general food shortage,
all of which in turn reflected the fact that the so-called breadbasket
of Europe was no longer in existence in that form.
Now, having said this in general, I think one can bring this down to
the Washington scene
and I'd like to ask Mrs. Thorp to just tell you about how this worked
from the point of view of the French Embassy.
MRS. THORP: Madame Bonnet, the wife of the French Ambassador, was a handsome,
charming, bright, woman, Greek by birth and French by adoption. She was
very popular in Washington, and went to every cocktail party that entire
winter season in the same black Dior dress, thus indicating that France
could not afford her a proper wardrobe. She gave at least one dinner party,
quite large, to Senators, Congressmen, and other high officials. Everybody
left that party hungry because she served foie gras and French bread of
the kind that would be eaten in France, (that gray, miserable, hard French
bread) but the wine was excellent. I think we had a salad along with it,
and I don't remember what
the desert was, but everybody left hungry. The object of the game was
to show that everybody was hungry in France and they certainly needed
THORP. I can tell an opposite story. When de Gasperi was in Washington,
January of '47, the Italian Ambassador gave a big party for him. I happened
to leave the party at the same time Senator Connally left, and he turned
to me and growled, "If they can afford this kind of party, I don't
see why we need give them any aid."
That visit of de Gasperi reminded me of one other thing that would give
you a little feeling about that period. He obviously had come over to
get some kind of help from the U.S. We searched every cupboard and we
couldn't find anything that was available. We couldn't build up an Export/Import
there wasn't a penny left in our aid programs, and this was very embarrassing.
De Gasperi was highly thought of; he worked well in his government, and
was giving some real stability to Italy. Finally we did succeed in finding
something that he could take back. The Army decided that they had underpaid
the Italian prisoners of war and there was a back payment to be made.
De Gasperi announced it when he returned.
WILSON: Was there any indication that the British felt that they had
a special relationship with the United States that they didn't need to
go to these extremes?
THORP: I think the British were in an embarrassing position. They had
gotten this loan, which had been negotiated, approved by Congress, and
contained a substantial sum of money. It was
embarrassing for them to come back in the matter of a few months and say
that they were in any difficulty. The British were in a very special situation
On the other hand, they were a leading party in the whole thing. Ernest
Bevin was the one who picked up the ball first and started running with
it, and they were the people that it was easiest for us to work with.
When Congress had finally approved, and it came to getting the Marshall
plan going, shipments could be made for one month, but would then have
to be discontinued unless agreements had been reached as to the general
intent, procedures, and conditions under which aid was being provided.
The European countries set up a committee with Oliver Franks, the new
British Ambassador to Washington, as chairman. I represented the U.S.
We had one month to do it.
I'm not sure whether we did it in a month or it took a month and one day.
This was a very difficult thing to work out. Congress had defined in the
law a number of things to which the recipients. had to: commit themselves.
These were not written in the form that made them easily translated into
an agreement. On top of that all the departments in the U.S. Government
rushed forward with proposals of what additional things it would be nice
to have incorporated. For example, they were all to adopt antitrust laws
like the American anti-trust laws. The biggest difficulty was that Mr.
Hoffman, who had now been designated as head of the organization, brought
in as his lawyer Alex Henderson from New York who was used to drawing
to things like bond indentures. What he had in mine was that the agreement
should cover every possible contingency.
In international affairs these are the difficult things to handle, and
since they are not likely to happen, you'd say, "Well, let's hope
it doesn't happen, and if it does we'll try to deal with it." An
international agreement becomes, to some extent, a "best efforts"
kind of thing. It can't possibly contain protections and indications of
what's to be done in everything that may happen. My problem was to get
an agreement that was at all possible for the other governments to sign,
and at the same time not to have Henderson feeling this was absolutely
Franks was a wonderful person to work with; he had no experience in working
between governments. He had been in the British Government during
the war, and he would often come to me with a cable from his government.
We'd read it and he would say
"Now, why do you suppose they want that word changed? That doesn't
make any sense to me. Do you see any reason why it should be changed?"
We would struggle with the problem, not on behalf of either country's
position but in trying to get a workable agreement, and this was a time
consuming and difficult affair. Everything had to be referred back to
London. Luckily, while the Congress had defined certain things, they still
left a whole series of things unresolved. For instance, in an agreement
dictated by Congress everything had to be labeled "from the U.S.A."
How do you label a chunk of coal? How do you label a surgical needle,
and so forth? The general principles oftentimes can't be applied completely.
Still, we got this negotiated and an agreement worked out.
WILSON: Would it be fair to say that the ECA tended
to be fairly rigid and tried to push through things with regards to Great
Britain or the entire OEEC that weren't very easily translated into practice
and weren't perhaps politically feasible?
THORP: I don't believe I can answer that. At this early point, the ECA
hardly existed. Of course, it did develop its own character later. I'd
have to think about individual situations. There were periods in which
we in State were very concerned for this or that aspect of the ECA's operation.
Then it would run on and I wouldn't know anything for weeks about what
the ECA was doing. There would be people down the line, our commodity
people in the State Department and other people, that would only call
it to my attention if they were disturbed about something. I would say
that I probably
knew more about the Export/Import Bank operations during most of this
period. I was in on more decisions in the Export/Import Bank than I was
on ECA, because this was a separate organization. Congress expected it
to be. But for the Bank, State was represented on its Board of Directors.
Every once in a while we'd get steamed up about ECA once we set up a committee.
Defense had somebody and I was there and we were supposed to meet once
a week for a policy review. We did this about three weeks. There had been
concern in the State Department by the political officers that ECA was
running way off in the wrong direction. There was feeling on the part
of the political officers that they were isolated from it; that judgments
were being made that they should know about. There was less problem on
the economic side because this staff I had was good and kept
track of what was going on.
To illustrate the sort of political problem: The question came up about
using the Marshall plan to get freedom for Indonesia. We told the Dutch
we were going to stop their aid unless they gave freedom to Indonesia,
and told Indonesia they could have a hundred million dollars credit at
the Export/Import Bank if they got their freedom. We felt that using both
a stick and a carrot we could get things done. I was in the discussions
about that, but again I would regard it as primarily a political kind
As the record shows perfectly clearly, McCarran tried year after year
to get Spain involved in the Marshall plan. Still, the Marshall plan said,
"You've got to be a member of the OEEC," and the other countries
wouldn't take Spain in. There were strong anti-Spain
feelings in enough countries so that it was impossible.
It is true that we finally did get some other countries into the aid
bill. Yugoslavia never was a member. In the Spanish case McCarran finally
managed to get a total of 100 million dollars (the first time was 50 million
dollars) in an amendment for aid to Spain.
The morning after the act was passed, the Spanish Ambassador came to
my office and said, "Where do I go to get my 50 million dollars?"
I said to him, "I'm sorry, but what's appropriated to you is in the
Foreign Aid Act." (I never was sure that I was on good solid legal
grounds about all of this). "We provide money for payment for particular
programs and projects. We never give cash out to anybody; we make
payments on specific requirements.
The first thing you have to do is to develop a program of what you're
going to do with the 50 million dollars and bring it back to my office."
He developed a program of 50 million which was very simple. "We'd
like 50 million dollars worth of wheat." He came in with this program
and I said, "I'm sorry, that won't satisfy the United States Government.
You don't need 50 million dollars worth of wheat. You didn't import that
much last year and you don't need it. This is supposed to be for your
development, and in a country that has one railroad wreck a day,
you ought to be able to find other things more useful to do."
He went away again, and the next call I had was from McCarran. "Why
isn't the Spanish Ambassador getting his 50 million dollars?"
I said, "Well, we're very eager to give it
to him, but he's got to come up with a satisfactory program." He
finally came in with a program we could accept, although there was one
item in it which worried us greatly at the time. That was an appropriation
for oak barrel staves, to be charred and used in aging sherry. We weren't
sure whether the American public would realize that this was going to
increase its export proceeds and was a fine thing to do, as opposed to
those who thought that we shouldn't finance the production of sherry.
I must say this is a special case in the aid program, and it's a rather
The problem of Yugoslavia was a special one, and it came very suddenly
upon us. Here was a country which had broken with the Russians, almost
all of whose external economic life was turned towards Eastern Europe.
It was suddenly
finding itself with a solid iron curtain blocking the ways by which it
had made its living, sold its goods, as well as the source where it bought
much of its requirements. We in turn found ourselves without any way of
dealing with this, because even though this was 1949 or '50, they were
not members of the OEEC. We couldn't give them any Marshall plan aid,
and we had no easy technique for dealing with this. The only immediate
possibility was to give them an Export/Import Bank loan.
I can remember this as being very difficult because the Export/Import
Bank in general didn't like to move for political reasons. In this case
they did, and we were able to get congressional action in 1950 providing
What I remember particularly about the situation was the fact that the
U.S. was trying hard to get the British and French to join. We
had a tripartite group. I represented the U.S., there was a French diplomat,
and a very stuffy Englishman. (Once when my wife and I were in Pakistan,
we found a barber shop named after him.) The problem was to get the three
countries and the Yugoslavs to agree on what the program should be. This
was very difficult, because Yugoslav programming was very ineffective
and sketchy to say the least.
We worked out a program in 1951, and it was good enough that then we
were able to get the World Bank to move in and help support Yugoslavia.
In '51 we also got them into the general overall aid fund. This was a
very interesting case because these people were Communists. It always
left me with a personal question as to what it was that people were so
steamed up about, when the Congress (where Communism was a fighting word)
would vote 50
million dollars for aid to Yugoslavia in spite of the fact that Russia
was so unpopular. I must say that the Yugoslavs were very clever. The
first Ambassador that they sent to the United States after they became
independent was a man named Vladimir Popovitch, and we were both at the
first dinner that he gave for me. After dinner he and I sat down together
and he asked me a question. I had spent a great deal of time with Communists,
and this is almost the first time anyone ever asked me a question rather
than just lectured to me. His question to me was why we had not had a
depression after the end of the war. He listened while I answered and
while I don't think he ever became very popular, at least he and his staff
had quite a lot to do with the fact that we were able to work out a program
which kept them afloat. Probably if they hadn't been this kind of
Communist group in Washington, our work with them would have been so unsatisfactory
in so many ways that we would have had to drop it entirely.
It was decided before the war as to when the Philippines would become
independent. Immediately at the end of the war was the date that had previously
been decided. Everybody agreed that this was most unfortunate when the
time approached. It would have been much better for them if they could
have continued under American aegis until they'd been reconstructed and
then become independent. We didn't dare suggest that they postpone the
date, they didn't dare suggest that we postpone the date; so they became
independent. We paid them tremendous sums which we owed them: we paid
back pay for the entire period for all surviving members of their military
forces and we paid them an
enormous amount for destruction that took place in the Philippines,
as though this were part of the U.S. (and in a sense it was). We taught
them a whole lot of things, improved education and road building, but
we handled their finances and then they suddenly had to handle their own
finances at a point where they just were flooded with funds. They had
some economic problems.
MRS. THORP: They all got rich, no doubt, personally.
THORP: No, that isn't the way it worked. They would've gotten rich personally
except that the funds in this case were distributed to all of these individual
ex-soldiers. They personally didn't get very rich but I'm sure there were
many clever entrepreneurs who ended up with fortunes. Of course, the country
had no foreign exchange problems but there was a substantial inflation.
The trouble is that this is a period when everything under the sun was
going on. Economic problems were everywhere. We haven't talked at all
about Latin America. There's another all night session I had once with
Latin-Americans, who were very outraged because of the fact that we had
been unwilling to sell them stuff during the war. They piled up dollar
deposits, and then we finally were willing to sell to them after the prices
had gone up substantially.
MCKINZIE: Did the Latin Americans get very upset about being excluded
from the ECA?
THORP: They had funds but were upset over the availability of goods and
the adverse terms of trade. As to supplies, for example, they wanted power
plants, but so did the U.S. electric companies and the Europeans. As to
financial aid, the Export-
Import Bank filled in with quite a substantial amount. It had already
started before the war, making loans for development purposes. During
the war it started the big steel plant in Brazil and I think we managed
through Export-Import Bank loans to keep quite a flow going. After all
most of these countries were rich at the end of the war, just as Sweden
was, so that it wasn't immediate.
I would say that there was a growing feeling that we were giving preferences
to Europe, though we tried to convince them that Europe was an important
market for them as well as a source of goods which they needed. This feeling
got greatly exacerbated by the fact that Africa received preferences from
the Common Market, and this more than any other one thing has irritated
them no end. They feel they ought to at least have that same situation
with us. In that case,
the world would have been really frozen into a pretty bad pattern, so
that I don't think it's likely to happen. Nevertheless they've got a point
with respect to giving permanent preferences to colonies.
People don't realize that a colony is actually part of the metropolitan
power. It doesn't have any tariffs, it's part of the country with just
a little ocean in between. If it suddenly becomes independent and has
to jump to a foreign power status, this would be very disruptive. That's
why we worked out a 20-year gradual adjustment on the Philippine tariff.
In economic terms the Philippines become a foreign country after 20 years.
Bit by bit each year they become more foreign as far as trade is concerned.
MCKINZIE: That leads naturally into the business of Point IV which is
a strange mixture of economics
WILSON: I gather this was no more than a gleam in the eye when President
Truman made his speech, so it must have been one of your more interesting
MRS. THORP: It's also a great question as to whether that was thrown
on him or from him. It certainly can't be more than six or eight months
since Ernie Gross said to me, "I am so outraged at all the people
who take credit for the Marshall plan, when I know it was your
husband's idea." Much the same could be said about Point IV.
THORP: I think that one can't help thinking and talking and if one is
in a central position like I was, he tries to spell out all sorts of possible
ideas. The situation requires it. This is why I find it so futile to try
credit individuals. You don't know whether "A" thought of this
or whether "A" got it from "B". By the time you chased
it all around, "B" got it from someone else and it changes as
each person passes it on. Everybody's got something to do with it. There
probably are cases where you can blame it on a single individual, but
I must say it doesn't happen very often.
Before the Point IV program, I had connection with the inter-American
operation, the services and so forth. This was excellent technical assistance
outside of any national frame. The United Nations specialized agencies
were essentially technical assistance centers. It became increasingly
apparent that we were not dealing with competent countries like the Europeans
in the Marshall plan, but with many backward areas. You couldn't solve
their problem with the
formulae which related output to capital. There was a knowledge requirement.
To my surprise when I started work on Point IV I discovered that this
was done all over the Government; there were lots of technical assistance
projects not thought of as more than a kind of extension work. Some country
asked the Library of Congress if they'd help to set up a cataloging system,
because most libraries around the world aren't cataloged in any kind of
system. One of our great contributions, which nobody ever gives us credit
for, is the number of libraries that are usable now that weren't before.
When we were in Japan in '55 the U.S. had a little library school there.
At the University of Tokyo library books were on the shelves as they had
been bought, and the professors liked this; they were the only people
who could use the library. It was a
beautiful library but there was no way of finding anything in it; it was
just a pile of books.
When Mr. Truman made his speech. Clarice and I were sitting 20 feet away
from him there at the Capitol. I don't know just how I managed to stay
in my chair. This came as a complete surprise to me, this Point IV proposal.
I think it was to virtually everybody.
The next day after the inauguration Mr. Truman sent Mr. Acheson an instruction
that he would move ahead on this. Mr. Acheson sent Willard Thorp an instruction
he would move ahead on this, and I did.
MRS. THORP: The buck stopped there.
THORP: The difference between Point IV and the Marshall plan, not only
as a concept in scope and everything, is that nobody upstairs paid much
attention from then on. In other words,
this was just left to me to do, although I may have once or twice gone
and talked with Mr. Truman about it. Even he didn't have any particular
ideas as to just how he wanted it; certainly the people in the department
didn't. I got Sam Hayes and a couple of other people, and we went to work.
The first thing we did was to call a Government conference. I sent out
invitations to all agencies that were engaged in any foreign technical
assistance to come to this meeting on February 9th. Over 20 agencies showed
up, and I discovered that the Government had already been very busy. When
you begin to think about it, you realized that this was true the Department
of Agriculture had various experimental stations all through Latin America.
The Health people had various outposts around the world for one reason
or another. The Bureau of Public
Roads already had a big summer school which brought in people from foreign
countries ending up with a tour of American road building equipment manufacturers'
places. Most of the time was spent in showing them how Americans built
roads. The Census Bureau helped many countries to plan and carry out a
national census. There was quite a lot already going on, but it never
had been a matter of general public policy.
We thought we were supposed to rush this and get it along, so we put
together a program. I had to check with Mr. Truman once to make sure that
my interpretation was right, that Point IV was technical assistance, and
that his speech was written on the assumption that capital was taken care
of. I later made that point in the U.N. and got clobbered by all sorts
of people that it wasn't being taken care of. However, the International
Bank and the Export/Import
Bank were supposed to be a source of capital, but there wasn't anything
like this to supply technical assistance.
We got a program together and got it up to the Congress. Mr. Truman sent
it with a message in June. Since there was nobody specially pushing it,
hearings were badly delayed. I came in and testified about it and then
nothing much happened. I suddenly got a call from Chris Herter, who was
on the committee. He said, "Look I don't think you're going to get
anywhere with that bill. I don't want the thing to die, so I'm going to
put in an alternative bill. The committee can sort of puzzle about what
it wants to do and this may be helpful." At any rate, nothing was
passed in either the House or the Senate that year.
An embarrassing thing developed that year in that, the President having
spoken in January,
I was expected at the summer ECOSOC to make a proposal applying Point
IV internationally. We had interdepartmental meetings. This involved us
in an unusually difficult problem; because (a) we had to decide how it
should operate having all the specialized agencies in mind, and (b) how
the deuce was the money to be handled; not to mention where it was to
We had meetings and then I flew over to Geneva for ECOSOC. They had me
scheduled for the next day to make the presentation of Point IV. I got
there and discovered that nobody had sent over any speech for me to deliver.
It was supposed to have been written for me by the people in Washington,
on the basis of a committee meeting which we just held.
On top of flying over and that was more strenuous then, I spent the night
writing a speech. I gave it the next day. Almost that
whole session was devoted to development of the details of the U.S. proposal.
We finally had to resort almost to a jury system. The problem was how
to divide the money among the specialized agencies. Each country had a
different idea of what was important: this one wanted most to go to health,
this one wanted most to go to agriculture. We finally had everybody put
his figures in an envelope, and give them to the chairman. He averaged
the percentages proposed by all the members and that was that. Given the
situation, it was as good as any method I guess.
I came back to America and we went to work again. We redid the whole
proposal, worked more closely with Congress, and got an authorization
bill through the House. When it came to the Senate I got clobbered first
by McCarran: "Where do you find this in the
constitution?" (We spent a lot of time on that). "What do you
mean, going to the U.N. and proposing a program there when the U.S. doesn't
have any such program? By what right do you suggest all this at the U.N.?"
We went on with the hearings and when we'd completed this the program
moved on through the committee. Finally the committee brought it out to
the floor. The lobbyist experts on the Hill informed me that it wasn't
going to pass the Senate. I then met with a liberal lobbyist group, composed
of trade unionists and church members, if one can call them that. They
sent out word and in two weeks time managed to get enough support behind
the bill so that it was finally passed, I think, by one vote. That's the
story of the Point IV program.
WILSON: How did Henry G. Bennett come into it all?
THORP: I don't remember how the administrator got chosen or anything about
it. He wasn't part of the planning.
Incidentally, I might say that among the group that we brought into Washington
to consult on this was Margaret Mead. People who say "all you economists"
don't ever realize that other people know something about what are normally
called economic problems.
MRS. THORP: She wasn't the only one. You had anthropologists, sociologists,
and you had some linguists.
THORP: We tried to cover the waterfront on people who might be expert
on this even in the very early period -- within the first three or four
WILSON: The popular view is that the Point IV idea
touched a nerve, and elicited considerable sympathy from the public.
MRS. THORP: It touched a nerve by stimulating the people of good will,
the church people, and the trade unionists, who stimulated their people
and made sure that their nerves were touched. They touched the Congressmen
where it hurt.
THORP: This was a natural and it would have surprised me tremendously
if it had not become a part of the aid program. It's more like sending
missionaries than sending goods, somehow.
MCKINZIE: The slowness of getting it through Congress, then, was due
to congressional conditions at the time?
THORP: First, we had to formulate it and then, since it was a new program,
it had to run the Congressional
gauntlet. At that time, it had no enthusiasts in Congress to push for
it. I think we did awfully well in putting the program together. The message
went up on June 24th with the whole program. Having in mind that this
was a period when lots else was happening, this was pretty good. We proposed
45 million dollars and finally Congress gave us 35 million. The Congress
also, when it came around to pledging for the U.N., approved a pledge
so that we got out of that situation.
WILSON: I wonder if you might discuss the last year, at the time of the
changeover of administrations.
THORP: I think to some extent any changeover must have a dismal period,
for the obvious reason that a very large part of foreign affairs involves
interdepartmental work, and interdepartmental
work involves people developing some degree of trust in each other.
That takes time.
I had reached the :point with, let's say, Charlie Brannan in Agriculture
where if we had a problem, I could go to Brannan and work out something
with him. If however, we had been new people coming into a government
we would feel that we had to demonstrate our loyalty and strength to our
own departments, and our own juniors. We would be much less likely to
compromise, and the problem would be much more likely to go to the White
House. While many problems between departments did get settled at high
levels, we did have to go to the White House on some of them. I went to
the White House more often on aviation problems than on any other single
subject. I think the reason is that I was in a Government department dealing
with an independent administrative agency.
It wasn't willing to compromise at all with me. It would have been different
in going to Treasury or Agriculture, where if I knew the people and had
a, good case I could usually work out some settlement.
At any rate, there is that inevitable difficulty of shifting personnel.
I did have the feeling that Mr. Dulles, with his initial testimony on
being examined for Secretary of State, demonstrated his complete ignorance
of anything economic. The whole economic problem after the war, according
to him, was that everybody wanted dollars. Nobody wanted dollars,
they wanted goods, and it was all completely wrong to put it in currency
terms as he did. In fact, he said that he didn't want an economist as
Assistant Secretary for Economic Affairs.
One other thing ought to be in the record. Mr. Dulles was asked by Mr.
Truman and Mr.
Acheson to work out a Japanese peace treaty. After this had gone some
distance I saw the draft as it then stood, and discovered that the economic
matters which are normally covered in a peace treaty were not there. There
was nothing about trade; there was nothing about reparations, except that
reparations were to be negotiated afterwards. Negotiating reparations
is a very hard thing, and I went and protested to Mr. Dulles and said,
"Look, when are we going to get at the economics?"
He said, "My instructions are to get a peace treaty and that if
there are things that look as if they would delay it, I'm to leave them
out." He did get a peace treaty, but should get no credit as an expert
negotiator for doing it. I think the political reason for doing it was
that we were very eager to bring to an end a situation in which we were
to join with other countries, including the Russians, in the administration
of Japan. This may well have been an overriding reason that justified
leaving all these things out. But, if one goes that far then one should
say this is a phony kind of treaty. It isn't to be regarded as a great
WILSON: You are one of the few to serve as Assistant Secretary under
all four Secretaries of State in the Truman administration. It would be
very helpful to have your evaluation.
THORP: There was a very high rate of turnover at both Secretary and Assistant
Secretary level. Eleven months after I became Assistant Secretary, every
other one had left and I became the senior. I think there were something
like 32 others during the entire period I was there. It's interesting
to note that the turnover was
greatly reduced towards the end of the session rather than the early period.
I don't think this was because they finally got people who were more set
in their ways; it was merely that we felt that if we left the State Department
it might be suggested that Senator McCarthy was responsible for our leaving.
We used to meet at the morning session and there'd be a headline in the
newspaper that McCarthy says tomorrow he'll announce two new top people
in State who were Communists. We'd look around and point the finger at
each other and so forth.
I came in when Stettinius was Secretary but we didn't overlap very long.
I did see him on several occasions and he always was not only friendly
but quite enthusiastic. His reaction was "That's a wonderful idea,
we ought to do it," but somehow I didn't get a feeling that he was
going to help me very much in getting it done. He didn't seem to be an
action person. Perhaps it was because his experience had been at the second
level in a large corporation. He had dealt with the financial problems
of U.S. Steel, but they had had almost no international relations in the
thirties and early forties. It may be that at that time his mind was largely
focusing on the U.N. San Francisco session, which was to come shortly
thereafter. While I don't know it directly, I'm told that he was active
in determining the decor with respect to this session. Gossip had it that
U.N. blue may be explained by the fact that he felt that this was a most
becoming color in front of which he might sit with his silver white hair
as chairman of the conference
Senator [James F.] Byrnes, the next Secretary under whom I served, was
quite a different sort of person. Mr. Byrnes knew the Government
very well; he had a number of close friends, many of them in the Senate.
He was inclined to make quick judgments on problems which were likely
to be quite complicated, relying either on his own intuition or upon the
advice of this or that friend of his. As one thinks about it, this is
almost the inevitable way in which a Senator must operate. No Senator
has a staff that can begin to cover the hundreds of problems on which
he has to make a decision. He must vote over and over again, and his voting
becomes more and more a matter of what his friends decide to do or what
he just feels is the right thing to do based on such knowledge as he may
have. In our end of the Department, we had an informal spy system which
tried to keep track of what was coming to Mr. Byrnes' attention so that
we could get there before he asked anyone else about how to handle
a problem. We
tried hard to get him to take advantage of having a staff of experts.
This doesn't mean that 90 percent of the work of the State Department
didn't go on perfectly normally. As a matter of fact, my theory about
the way in which something like the State Department works is that 90
percent of the problems can be and are handled by the people at the expert
level. This is because existing policy and precedent are sufficient guides.
The 10 percent of more difficult cases have to come up to someone like
myself, an Assistant Secretary, and maybe I can dispose of half of those
problems, maybe 8 percent of them. This leaves two percent which may require
interdepartmental action or probably can be settled by the Secretary.
This is all he has to bother about. To be sure that 2 percent is often
the most important problems, but the flow into the Department gets sorted
out in the process.
When it reaches the Secretary, he can settle some and then take some fraction
of 1 percent over to the President. This is the inevitable way that it
has to: work. It fails when a person holds onto a problem without either
settling it or passing it on. The volume of individual problems coming
into the State Department everyday from foreign governments, from American
citizens, and other parts of the American Government, was tremendous.
Mr. Byrnes sometimes came to very quick decisions. I remember his reacting
very strongly and instructing us to cancel a loan to Czechoslovakia because
he saw the Czechoslovakian delegation applauding a speech by the Russians
in the Paris Peace Conference. It took two days to get this straightened
out as a gesture with very little meaning. In general one has to think
of him as not used to working with
a staff; though he was not as bad as Mr. Dulles by any means. Dulles also
was used to a one-man operation and did not begin to use his staff effectively.
He was one of those people who rely on their own capacities for handling
problems which clearly are more than any one person can handle.
General Marshall was the extreme opposite. He used his staff almost to
the maximum. In the first place, General Marshall was the only Secretary
of State who left his office at 4 o'clock every afternoon. This itself
was an indication of reliance on his staff. Of course, he also had an
extremely able person under him. Bob Lovett was extremely able and one
can easily think of him as a possible Secretary of State. General Marshall's
contact with the staff was largely through memoranda. General Marshall's
requirement was that any matter coming
to him would be put on one sheet of paper, single-spaced. At the bottom
right-hand corner, you typed "approved" or "disapproved"
with two nice lines so he could initial whichever one he agreed to. This
was very difficult for us because up to that time we had been used to
writing quite complete memoranda on each problem. (We salved our consciences
by producing the one page memo but then adding appendixes when we thought
more detail should be available to him.) I think the memorandum process
is one of the ways in which one can keep the level of staff work high.
If a memorandum came up which I thought was undergraduate level, it went
back and had to be redone. The present tendency not to have such a requirement,
it seems to me, lets down the standard, makes a much poorer record, and
does not provide proper staff assistance to the higher-ups. It's very
hard to maintain
standards unless you've got some continual examination, even though it
may not have been set in the academic form.
Mr. Marshall was used to using his staff in Army style. At the Council
of Foreign Minister's meeting, where there were the four foreign ministers
sitting around the table (each one had a couple of people behind him),Mr.
Marshall usually would not speak even in reply to a question unless one
of the staff had written out a suggested reply and passed it to him on
a little piece of paper, He did not like to extemporize. I'm not saying
that he was unwilling to move ahead without the staff's concurrence, but
that he did give the staff a full opportunity to advise him. He did not
make a practice of having conferences with the interested people on a
particular problem. In the office, he had a pretty dignified and cold
manner, but outside
he could relax and be a very pleasant companion. He was to give a speech
somewhere and was to go in a private car, when it was suddenly brought
to my attention that a paragraph in the speech was way out of line. I
tried to catch him in his office but he had already left. My wife and
I chased down to the railroad yards and found his private car in which
he was sitting all alone. The business took little time and then he insisted
that we stay on. He was obviously delighted to have company and I don't
think we've had a more interesting evening of listening to someone tell
stories about people and subjects about which we had a real interest.
MRS. THORP: He was a man of the utmost charm.
THORP: This had no similarity to the man that I often saw in his office
where his personality was
impersonal and very businesslike., I've heard him chew out his messenger
boy in rage in what everybody would regard as normal Army vocabulary because
he didn't answer the bell quickly enough.
Mr. Acheson functioned in a way decidedly different from any others.
He was a man who liked to talk with the experts, sit around the table,
review the problem, and use his own mind to make suggestions and test
whether everything has been considered. He was great at cross-examination,
but his thinking was positive. It was a delight to work with him. You
felt that if the problem was one of great concern to you and your group,
you would be given a full chance to present it. This would usually be
after you had sent a memorandum, so he wouldn't come into it blind, but
already had some background to work on. The discussion
technique helped to assure us that he really understood the issue, whatever
it might be.
So, you have four people of entirely different procedures involved here.
WILSON: How much involved was this leadership in shaping of Department
morale or Department attitudes. Was that at all important?
THORP: I suppose Mr. Acheson saw the largest number of people in the
Department, at least they personally were in contact with him, as compared
with the others. The operating leadership within the Department turns
a great deal on the Under Secretary. This was very true in the period
that I'm talking about. I don't remember who was Mr. Byrnes' Under Secretary.
But I do remember Bob.Lovett and Jim Webb.
Jim Webb was the only driver of the whole
lot. He would say, "When are you going to get this memorandum in?
What's the date?" And when the date came, "Where is it?"
He was a real management character. He tried very hard to understand most
of the things, but he frequently didn't. He had one unfortunate characteristic
which a good many people have. When he was testifying at the hearing and
he wasn't sure of something, he'd prefer to go ahead and take his chances
rather than to turn and say, "Now, Mr. Thorp, will you answer that
because you're familiar with it?" Most experienced witnesses would
have done that, but Jim Webb wouldn't. In spite of what I have said about
individual secretaries, in my days the Department was much more a group
operation in which no one felt that somebody in particular was running
the Department, or somebody was a morale builder. To be sure the political
economic officers did not always agree, but the organization held us all
together. My impression is that morale ran rapidly down hill under Mr.
Within the Department we had the whole miserable security problem. That
was a force which united us against outside attack but also raised fears
and doubts. After a bit it got taken away and largely concealed from the
rest of us. It became apparent to all the security people that the minute
they charged "x", if he or she was in the economic department
they had me to question them as to what was wrong, what kind of evidence,
and so forth and so on. They solved the problem by seeing that I didn't
know anything other than that "x" had left. While I knew about
a few cases I'm sure that I didn't begin to know them all. I think because
I made such a stink about the first one that
I ever heard about that they concealed as many as possible. But it was
a great strain. I was called as a witness in a few cases, and Mrs. Thorp
sat on the front row whenever one of our people was being tortured by
the Committee on the hill. She had many ways of demonstrating our support.
WILSON: What you said earlier suggests that there was a remarkably high
level of morale, in that you could sit around in the morning and say,
"Okay, we're going to stick this out, because we're not going to
give the people the pleasure."
THORP: There was more personal loyalty to Mr. Acheson than to any of
the others. And he was the one who really stuck it out.
MRS. THORP: I think there's no question about it. I could have seen Jimmy
Byrnes burned at the
stake, and I wouldn't have batted an eyelash, but I think I would have
bled to death for Dean Acheson. This is in spite of disagreeing with him
on many things. He is the kind of person you have to admire for the breadth
and the scope of his intellect and for his strength of character. I certainly
disagree with him now as much as I don't, but I just will never stop admiring
[Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed]
List of Subjects Discussed
Acheson, Dean G., 7, 8, 10,
44, 45, 112,
121, 122, 154,
166, 177, 178,
Agriculture, Department of, 155, 164,
Alphand, Herve, 79
American Statistical Association, 2, 70,
Amherst College, 2, 4, 85
Associated Gas and Electric Company, 11-14
Battle Act, 122
Bennett, Henry G., 160, 161
Berlin, Germany, 81, 83
Bevin, Ernest, 114, 133
Bidault, Georges, 105
Bonesteel, C.H., 125, 126
Bonnett, Henry, 87
Bonnett, Mrs. Henry, 130
Brannan, Charles F., 56, 164
Bretton Woods Conference, 35
British loan of 1946, 35, 106,
107, 109, 133
Brown, Winthrop G., 87
Bruggmann, Charles, 94
Budget, Bureau of the, 31
Butterworth, W. Walton, 7
"Buy American" policy, 96, 97
Byrnes, James F., 62, 68, 69,
93, 169-173, 181,
Census, Bureau of the, 156
Central Africa, 66
China, 32, 33
Clay, Lucius D., 80, 82
Clayton, William C., 14, 15, 16,
18, 19, 22, 23,
36, 37, 40, 41-44,
45, 51, 86, 87,
Collado, Emilio, 26, 51
Commerce, Department of, 3, 6, 7,
8, 9, 18, 19
Commercial attaches, 6, 7
Common Market, 30, 99-101, 149
European Recovery Program, and the, 110, 111,
113, 114, 127,
Connally, Tom, 62, 63, 78,
Marshall Plan, and the, 133, 134
Point IV Program, authorizes, 159-163
Soviet Union, and trade with, 120, 121
testimony before, 110, 111
Yugoslavia, votes aid to, 144, 145
Council of Economic Advisors, 29, 30,
Council of Foreign Ministers, 63, 64,
Couve de Murville, Maurice, 79
Crowley, Leo T., 27, 28, 31,
Czechoslovakia, 120, 172
Danube River, 61, 64, 65,
Defense, Department of, 34, 97,
104, 120, 121,
125, 126, 138
de Gasperi, Alcide, 59, 60, 105,
Despres, Emile, 23, 83
Dickinson, John, 3
Dort, Dallas W., 125
Driscoll, Dennis, 11
Dulles, John F., 24, 26, 165,
166, 173, 180
Dun and Bradstreet, 8, 9, 10,
Dutch East Indies, 139
Economic Cooperation Administration, 98, 101,
102, 127, 128,
Economic Report of the Council of Economic Advisors, 30,
Economic and Social Council, 57, 158
Eisenhower, Dwight D., 102
England, 108, 132, 133,
European Recovery Program, 98, 102-104
Export-Import Bank, 47-50, 131,
138, 139, 143,
148, 149, 156,
Federal Reserve Board, 106.
Feis, Herbert, 5, 14
Food Commodities, 129
Foreign Aid Act, 140
Foreign and Domestic Commerce, Bureau of, 3, 4,
5, 6, 8
Foreign Economic Administration, 15, 19,
Foreign economic policy, 21, 22
Four Powers, 64
France, 50, 84, 108,
109, 115, 143,
Franks, Oliver, 133, 135, 136
Free trade, 93, 95
Galbraith, Kenneth, 23, 83
GARIOLA, 83, 104, 109
General Agreement on Tariffs and Trade (GATT), 86,
87, 88, 90, 91,
General Electric Company, 94
Geneva, Switzerland, 158
Germany, 23, 40, 67,
68, 76, 77, 80,
96, 102, 104,
Grady, Henry, 14
Greek Turkish aid, 109
Gross, Ernest, 151
Halle, Louis J., Jr. 86
Hammarskjold, Dag, 108
Havana Conference, 86
Hays, Samuel, 155
Henderson, Alex, 134, 135
Herter, Christian, 157
Hobson, Howard, 10
Hoffman, Paul G., 127, 134
Hopkins, Harry, 8, 9
House Agricultural Committee, 90
Hull, Cordell, 15
Hurley, Patrick J., 80
Imports, 92, 93, 96,
India, 41, 106, 107
International Bank and Monetary Fund, 46, 48,
50, 51, 156
International Trade Organization, 86, 91,
Italy, 76, 77, 80,
115, 131, 132
Japan, 41, 42, 97,
Japanese Peace Treaty, 166, 167
Kennan, George F., 22
Keynes, John M., 106, 107, 108
Kindleberger, Charles, 125, 126
Labouisse, Harry, 125
Latin America, 22, 54, 148-150,
Lend lease, 34, 35, 123
Library of Congress, 153
Limpapo River, 66, 67
Loans to foreign nations, 47-51
London, England, 136
Lourenco Marques, 66
Lovett, Robert A., 52, 173, 178
McCarran, Pat, 139-141, 159,
McCarthy, Joseph R., 26, 57, 168
McNamara, Robert, 17
Manila Electric Company, 13, 14
Marshall, George C., 114, 122,
Marshall Plan, 35, 36, 38,
40, 44, 45, 49,
54, 81, 82, 95,
98, 104, 109,
110, 112, 115,
116, 118, 119-120,
122-124, 126, 128,
129, 133, 139,
143, 151, 152,
Mason, Edward S., 14, 15, 16
Maurice Hotel, 78
Mead, Margaret, 161
Meyer, Eugene, 51
Molotov, Vyacheslav M., 64, 65,
Morgenthau Plan, 77, 84
Morse, Wayne L., 88
National Advisory Council, 46-48
National Bureau of Economic Research, 2
National Defense Act, 89
National Recovery Administration Policy Board, 8
New York State Board of Housing, 4
Nitze, Paul H., 126
North Atlantic Treaty Organization (NATO), 36
Office of Strategic Services, 20
Office of War Mobilization and Reconversion, 21
Organization for European Economic Cooperation, 114,
118, 137, 139,
Pan American Union, 54
Paris Peace Conference, 46, 61-65,
Philippines, 41, 109, 146,
Pilgrim Club, 102
Point IV, 123, 150-163
Popovic, Vladimir, 58, 59, 145
Portuguese East Africa, 66
Presidential transition, 163-165
Public Utility Holding Company Act, 11
Public Roads, Bureau of, 155, 156
Reinstein, Jacques, 63
Reparations, 69, 70, 73-77,
Reciprocal Trade Agreements Act, 5, 14,
Romney, George, 17
Roosevelt, Franklin D., 2, 35
Roper, Daniel, 3
Rostov, Walter, 23, 83
Salant, Walter S., 31
San Francisco UN Conference, 169
Saudi Arabia, 120
Secretaries of State, evaluation of, 167-179
Securities and Exchange Commission, 14
Snyder, John W., 52, 53
Social functions, 52-60, 130, 131
Berlin airlift crisis, and the, 83
Congressional trade policy toward, 120, 121
general comments on, 36, 37, 38,
Japan, and U.S. occupation of, 167
Marshall Plan, and the, 36, 38-40,
reparations, and, 70., 75-77, 84
UNECE, and the, 116
UNNRA, and the, 117
Yugoslavia, and, 119, 142, 143
Standard Oil of New Jersey, 51
"Board of Directors," 124, 125,
Stephens, Hubert D., 6
China, and aid to, 32, 33
Clayton, William C., avoids conflict of interest in, 40-44
Commercial attache, and, 6, 7
economic staff of, 14, 15, 19,
20, 23, 24-27
European Cooperation Administration, and the, 138,
European Recovery Program, and the, 103, 105
Foreign Economic Administration, and the, 32
foreign economic policy, 21, 22,
Germany, economic policy. toward, 80-84
lend lease, and, 34, 35
loyalty of employees, 180, 181
Marshall Plan, and the, 36, 38,
social functions, 52-60
tariff policy, and, 93, 94
Thorp, Willard, appointed Assistant Secretary for Economic Affairs,
1, 15-18, 19
trade barriers, policy toward, 101
Treasury Department, working relationship with, 47,
UNRRA, and, 36-38
West Germany, and occupation status of, 80-84
Stettinius, Edward R., 15, 168, 169
Stinebower, Leroy, 14
Suitland, Maryland, 27
Sweden, 108, 149
Swiss watches, 93
Tarchiani, Alberto, 59, 60
Tariffs, 86-88, 90, 91,
93, 94, 98-100
Temporary National Economic Commission, 9
Thorp, Clarice (Mrs. Willard), 26, 54,
57, 60, 70-72,
130, 154, 181
Tito, Josip B., 49
Torquay negotiations, 87
Trade barriers, 99-101
Treasury Department, 7, 8, 46-48,
52, 53, 58
Trieste, Italy, 61, 75
Truman Doctrine, 36
Truman, Harry S.:
Dulles, John F., given State Department appointment by, 165,
Tugwell, Rexford G., 5
Economic Report of the CEA, and the, 30
geography, knowledge of, 65-68
Point IV, and, 151, 154, 156,
United Kingdom, 84
United Nations, 152, 160, 163,
United Nations Rehabilitation and Relief Administration (UNRRA), 36-38,
104, 105, 109,
U.S. Steel Corporation, 169
University of Pennsylvania, 3
University of Tokyo, 153, 154
Vandenberg, Arthur H., 61, 62,
63, 78, 79, 80
Vernon, Raymond, 86
Viner, Jacob, 100, 101
Vinson, Fred M., 46
Vishinsky, Andrei Y., 69, 70, 73
Wallace, Henry A., 94
Waltham Watch Company, 93
War Department, 83
War Production Board, 20, 21, 28,
Waugh, Samuel C., 26
Webb, James E., 178, 179
economic policy toward, 80-84
White House, 164
occupation status of, 80-84
Whiteside, Arthur, 8
Wilcox, Clair, 86
Willis, George, 53
Wood, C. Tyler, 37, 105, 111,
World Bank, 144
Yangtze River, 33
Yugoslavia, 49, 50, 119,
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