Numbers appearing in square brackets (ex. ) within the transcript indicate the pagination in the original, hardcopy version of the Armstrong oral history interview.
Opened January, 1976
Oral History Interview with
June 12, 1973
by Richard D. McKinzie
RICHARD D. MCKINZIE: Mr. Armstrong, I think many historians who are studying American economic policy in the Truman administration are going to be interested in the kind of people who participated in those events, and I wonder if you might say something about what motivated you to go into Government service. You apparently didn't start out with exactly that in mind.
WILLIS C. ARMSTRONG: Well, I was originally going to be an academic; I was doing a doctorate at Columbia in Russian history. I got to the point of needing to do research, and my topic was concerned with a subject covered in a good many documents in Russia. My professor at Columbia made a
deal with the State Department to have me appointed as a clerk-translator in the Embassy in Moscow. I went there in the summer of 1939 and I started to do a little research, and then the war started in September of '39 and I was so busy after that I never did finish my research. I came back in 1941 and I stayed in the Government dealing with the Russians during the war. Then I came into the Economic Section of the State Department in 1946, and immediately began to deal with the question of state trading. I was called Adviser on State Trading, because I was dealing with the question of trade with the Soviet Union and other Socialist countries.
MCKINZIE: May I go back and ask you a little bit about the work you did after you came back to Washington in 1941, and worked with the Lend-Lease and the FEA, as I recall?
ARMSTRONG: Yes, it was lend-lease to Russia.
MCKINZIE: May I ask you to probe your memory a little
bit about the specifics of your work with the Soviets? There were some problems with lend-lease in the Soviet Union particularly their reluctance to provide data about their own needs or the data that people in the Lend-Lease wanted in order to make allocations. Were you involved in that work?
ARMSTRONG: Yes, some of us in the Lend-Lease Administration had lived in Russia; we knew the Russians, and we knew why they couldn't provide advance data on requirements, because their system didn't simply permit it. And, therefore, we made up their requirements in advance a year ahead, and we figured out the numbers ourselves and gave them to the War Production Board and that secured their allocation for them. When the time came around, our guesses had turned out to be pretty good, and the Russians said, "Thanks very much." So that wasn't really a problem.
When they wanted something they told us in no uncertain terms what they wanted, and if we
thought it was useful in the war effort we gave it to them, if we had it, within the framework of an annual schedule. We had an annual schedule worked out called the "protocol," which was renegotiated every year; and it was broken down into military end items, raw materials, industrial equipment, food, chemicals, Quartermaster stores, and all that sort of thing.
It worked pretty smoothly, as a matter of fact. Our main governing limitation was the capacity to move the stuff to the U.S.S.R. We had, first, in the beginning of the war, as you know, a shortage of ships. As we began to build more ships we resolved the problem by shipping more over the Murmansk route, but convoys were heavily attacked, we lost a lot of ships, and that proved relatively infeasible. We were using a Persian Gulf route, but it was slow and tedious and limited in capacity, because the stuff had to move over the railroads, or roads, through Iran into Russia. Then we opened up a route across the Pacific, the Russians using their own ships;
and then we began to transfer American ships to them, which they manned themselves, and in which they carried a large quantity of the supplies. I'd say about half the supplies -- we sent about 11 billion dollars worth during the war, and I think about half of them moved across the Pacific. The ships were either Russian or American-built and Russian-manned, and they would go neutral after they got near Japanese waters. They put their lights on and they had "U.S.S.R." on the side in large letters, and flew the Soviet flag, and they went on lit like Christmas trees right through Japanese waters into Vladivostok and unloaded the supplies. That worked very well.
We did this with aviation gasoline tankers right through Japanese waters. Once in a while the Japanese would stop a ship and board it, and the Russians would fill them full of vodka and pour them over the side back into their patrol boats and that would be the end of the Japanese control. So, there wasn't any serious problem, and after a while we got to the point where ships were not
a limiting factor, and where we were beginning to have a better run at the target.
Then our judgment about how long the war would last, and whether the stuff really was needed for the war, became a factor. The Russians were trying to get a great deal of postwar industrial equipment out of us under the provisions of lend-lease, and we had to stop a lot of their orders, because they were trying to get away with a certain amount of murder.
MCKINZIE: I am going to ask if you have any insight into Mr. [Leo T.] Crowley's recommendation to President Truman just after V-E Day to end lend-lease to the Soviets. Mr. Truman has said that this was one of the bad mistakes he made.
ARMSTRONG: Well, we didn't end lend-lease after V-E Day; we seriously diminished it, and I'll speak about that.
MCKINZIE: Yes, please do.
ARMSTRONG: I think you'll find some of this covered
in a book by Mr. [George C., Jr.] Herring, which has just been published. He consulted me on his book and used me to some extent as a source.
What happened in the spring of '45 was that the war was over in Europe, armistice was declared, we had large numbers of ships moving into both Murmansk and the Black Sea, and also the Persian Gulf, because after the Mediterranean was cleared we opened up a fourth route to Russia, which was the Black Sea. I might say, I was in charge of shipping as far as the Lend-Lease office was concerned, so this was very vitally my concern.
What happened immediately after V-E Day was a decision that lend-lease to Russia should be stopped "where physically possible" -- that was the term used -- except where the goods were identifiable in connection with the prospective entry of the USSR into the war with Japan, which the Russians had committed themselves to, and which they were going to undertake within 90 days after V-E Day. The feeling was that they should only get the things that they really needed for the
prosecution of the war out there. And we had a special program for that that we had been working on for some months very surreptitiously, including even military end items which we were shipping right under the noses of the Japanese.
The people who put in the language "to the extent physically possible," fundamentally were responsible for a very literal interpretation; and a lot of us who were doing the staff work on lend-lease felt that "to the extent physically possible" was a very unfortunate term, because this, literally interpreted, meant that you stopped the ships that were enroute, the American-controlled ships, and turned them around. They had already loaded the cargoes for the U.S.S.R. You also stopped loading ships that were on berth.
I would say that the primary responsibility for this, really rather draconian reaction was in the hands of Mr. Averell Harriman, who was then our Ambassador in Moscow, and who was back here at the time. He was feeling particularly tough about the Russians and he was the one who
urged this language.
MCKINZIE: Rather than Mr. Crowley?
ARMSTRONG: Mr. Crowley's role was very limited. The action was taken at a meeting in the Combined Chiefs of Staff Building, and General [C. M.] Wesson, who was the head of our Russian unit in the FEA, was there, and John Hazard and I, and Averell Harriman and people from the Defense Department and from shipping. Some of us said, "Now, are you sure this is what you really want?"
Mr. Harriman said, "Well, this is what the President wants, 'to the extent physically possible."' Mr. Crowley wasn't there, and had really very little to do with it; it was primarily Mr. Harriman. I would expect, frankly, that Mr. Harriman would deny having the intention to produce so drastic an effect. I did know Mr. Harriman fairly well at one time. He was a fine public servant in many capacities, but not a man for precision in the use of words.
Then, of course, we began to get into a
great uproar. Nobody had told the Russians beforehand we were going to do this, and as the Soviet Ambassador said to somebody, "The first we knew anything was happening was when they stopped the hook," meaning the stevedores hook that lifts the cargo off the piers. And the Russians were understandably offended. They thought they were more important to us and bigger than that kind of treatment would imply.
Well then, of course, everybody went into a great huddle and everybody said, "Well, of course, we didn't really mean it that way." Then the fellows down the line, who were Mr. Hazard and I, were blamed for having been too literal in the interpretation of the instructions, and it was agreed that the ships that had been turned around and ordered to sail in this direction, would be reordered to turn around and sail in the other direction. This took about 24 hours, and Mr. Harriman was the man who did this reinterpretation. So he appeared the hero who saved the Russian cause from the errors made by Mr. Crowley and
the staff of FEA; and that is my account of it and I will stand by it.
MCKINZIE: In other words, he was, in fact, rectifying an error that he himself had made.
ARMSTRONG: That he himself was primarily responsible for having perpetrated, not necessarily with intent.
MCKINZIE: Did you deal personally, at your level, with a Russian counterpart here in Washington?
ARMSTRONG: Oh, yes, all the time. We were on the phone with each other constantly, and usually in Russian, because I spoke fairly good Russian at that time. And I had been instructed not to tell anybody what was going on until the policy was settled. The stopping of disbursements in an abrupt way was a very serious tactical error. It was a stupid thing to do, because one could see in advance that you would let the ships go that had been loaded, you would complete loading the ships that were partially loaded, you would not load any new ships after that, and that is
where it came out. All these things were talked about so darkly, and so many things were hinted at by Mr. Harriman and others from the political side, that we in FEA didn't know how to take it. We thought maybe some great catastrophe had taken place in terms of relations between the U.S. and the U.S.S.R. that we weren't privy to. So we sort of took on faith what came from Mr. Harriman and the State Department and the White House at that time. It was Mr. Harriman who was primarily responsible.
MCKINZIE: Let me ask you another question about lend-lease. There were in the economic offices of the State Department during the war, people like William Clayton and, well, I guess Leo Pasvolsky and a number of other people, who thought that after the war there was going to be a great deal of lower trade barriers and a lot of economic integration that had not existed before the war, in fact that was a kind of goal. There was some talk about lend-lease should be continued after the war, military end items should be stopped,
but that a great deal of materials should go through in order to facilitate reconstruction of industrial plants and that kind of thing; and there was some talk about lend-lease materials being continued for that purpose. Do you recall that having been discussed?
ARMSTRONG: That was just a suggestion that people made, but the lawyers felt that the law didn't justify it. I think they were right. The law specified that this was for military purposes during the prosecution of the war, and would stop when the war was over.
MCKINZIE: That was, of course, the position that Mr. Crowley took.
ARMSTRONG: Well, I think it was a position that everybody took. Now, we did have negotiations after the war for what was left in the pipeline.
MCKINZIE: You were a party to that?
ARMSTRONG: I was in the negotiation of that with the
Russians; some lawyers from FEA and I. By that time General Wesson had retired and John Hazard was off helping prepare the Nuremberg indictment, so I was in charge of the Russian section of FEA; and I wasn't dealing with just the shipping, because the shipping had stopped. Remember this was after V-J Day. When we stopped after V-J Day we let ships finish loading that were on berth, so we had a neat and well-understood termination, and the Russians understood it.
So, we did it right in September. Mr. Harriman wasn't here, and this came off fairly well -- and all amicably.
And then we began to negotiate about what to do with the pile of stuff that was on order and on hand. I've forgotten the amount it was, maybe 125 million dollars worth, something like that. We reached an agreement in October of 1945, but before we reached the agreement the Russians tried to pull a fast one: One day they called me up, said, "Have you got any new instructions?"
I said, "New instructions about what?"
They said, "About moving some of the goods that are on hand, because we have some ships here."
I said, "No. I have no new instructions, why do you ask?"