Numbers appearing in square brackets (ex. ) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
Opened January, 1972
Oral History Interview with
September 11, 1970
by Jerry N. Hess
HESS: Mr. Bean, to begin, will you give me a little of your personal background: Where were you born, where were you educated, and what are a few of the positions that you have held?
BEAN: Well, I was born way back in 1896 in Lithuania, came over to the United States in 1906 following my father's migration here a year earlier.
I like to say that the reason why I'm here in your presence is the Russo-Japanese war, as my father migrated as a result of that war. And if that hadn't happened I don't know where I'd be today. But we came to the United States, settled in New England.
I entered first grade at the age of ten, because I'd had no schooling prior to that except lessons in the Old Testament, that's all of the education that we had at that time. Went to the schools of Laconia, New Hampshire;
grade school, high school; graduated in 1916.
From there I went on to the University of Rochester, New York, entered the class of 1920, and graduated in 1919 a year ahead of my class, in part because I had a little bit of military service which gave me some credits, and partly because I felt I wanted to get through with my education as soon as possible, which is the effect the war had I think, on some of us youngsters of that day.
My interests, professional interests, at that time were unsettled in a sense, because I didn't know whether I wanted to go into business, or science, or law, or what, so I took courses that would permit me to go into any direction I chose. I concentrated in chemistry partly because I needed -- I felt if I could pass all of the exams in chemistry I would have enough credits to graduate in less than three years, and I did. But I dropped chemistry and went into -- as a livelihood after college, into the labor management field.
HESS: What attracted you to that field?
BEAN: Well, it is partly economics and partly because it had to do with one of the low income groups of the country, a little bit of sociological interest. And to prepare myself more thoroughly for that new profession
that was opening up known as labor management, I decided to go to the Harvard Business School because it had a course in factory management.
While I was at the Harvard Business School the depression of 1920-21 developed and this new activity known as labor management got a setback because management became less interested in dealing with labor unions, more interested in mere employment problems and that didn't appeal to me. So, at that juncture a classmate at Harvard who was destined to go to the Bureau of Agricultural Economics in Washington, induced several of us in that class to take Civil Service examinations.
HESS: What was his name?
BEAN: Schoenfeld, William A. Schoenfeld. He later became our agricultural attache in Germany, he was Assistant Chief of the Bureau of Agricultural Economics for a little while. But anyway, as a result of taking examinations in agricultural economics, for which I had no background whatever, I found myself at the top of the list, one of three at the top and was invited to come down here, and given a job and I took it and stayed on that job for thirty years; 1923 to 1953. I started out as a junior assistant agricultural economist.
HESS: What were your duties at first?
BEAN: Well, I was going to say I worked for awhile under that title and then a little later got a raise and a promotion, and a year or two later another raise and another promotion; after each promotion you dropped one of the words in the title. You dropped the "Junior," then you dropped the "Assistant," and then you dropped the "Agricultural," and you became a pure Economist. And finally came the Republican administration in 1953 and they dropped the "Economist." In other words, at that time I was Economic Adviser to Secretary [Charles F.] Brannan, having been Economic Adviser previously to Secretary [Clinton P.] Anderson, and before his day to Secretary [Henry Agard] Wallace. But the new administration felt that it wanted an economist of its own. So, my job was rewritten so they could bring in somebody else and I decided to leave the Government, which I did.
Now, the work that I was engaged in was agricultural economic research for the first ten years, with specialization in the interrelations between agriculture and business. By the time I came to the Department in 1923, the Bureau of Agricultural Economics was already fairly well organized, a new postwar entity, and most of the
jobs were already filled in research in commodities. The one spot that was still to be filled had to do with the relation of business conditions, the general economic conditions of the country to agriculture. And since I had just come from the Harvard Business School it was assumed that I was the person to fill that spot. So, that opened up for me a wide range of interests because agriculture touches the rest of the world in many ways.
So, in the pursuit of relations between agriculture and the rest of the economy, I was able to get involved in business cycles, in wage levels, in general income, farm income, price movements, export-import trade, financial conditions, stock market, weather conditions, all of the things that could possibly have a bearing on agricultural prices, became part of my terrain.
If you were to ask what were specific accomplishments in those first ten years, I was one of the men involved in what has since become known as the agricultural outlook. Once a year the Department of Agriculture gathers together economists, extension officers from all over the country, for a few days. An attempt is made to foresee what the agricultural developments would be for the next year so that farmers can gauge their acreage programs. And that service to farmers was
initiated almost the day when I joined the Department in 1923.
The first conference was held within the first month, and my assignment that year was to draw up a report on the balance of international payments as one of the items for understanding what kind of business activity the country would be in in the coming year.
For the first conference chiefly experts from the outside were brought in. One of the experts happened to be a young man by the name of Henry Wallace. There were economists from western banks, New York City banks, from industry and colleges and so on. But after that first year or so, the experts in the Department took over. We all developed our own sense of competence in our specialization, and ever since then the outlook conferences have been held by experts in the Department, commodity experts primarily, with the guidance and discussions of outsiders as well. It has become a well established, well recognized service, a contribution to economic understanding of farm problems and related general problems.
HESS: What other accomplishments come to mind?
BEAN: The next one that comes to my mind is the preparation of an index of agricultural prices. The Department at
that time had no general measure of what prices farmers received for their products. There was information which was gathered once a year as of December 1. But I was asked to construct a monthly index of prices received by farmers. That led me to scouting around the country to see where we could obtain records of prices that farmers received, and one of the contacts that that led me to was Henry Wallace in Iowa. I bring in this name here because from then on I had an almost continuous association with him and it meant a great deal to me.
HESS: When did you first meet Mr. Wallace?
BEAN: It must have been in 1923. I don't recall whether I had already gone out to check with him on the availability of local prices in Iowa as they might have been published in his paper, his father's paper, called Wallace Farmer, or whether I met him at the end of the year at a meeting here in Washington of the American Statistical Association.
From then on he used to come to Washington quite regularly during the years when his father was Secretary of Agriculture. He was then interested in statistics, agricultural prices. He had written a book on the corn-hog price ratio, as a determinant of hog production, a forecaster of hog production. So he used to look us up and visit around the Department of Agriculture with fellow statisticians
and I was fortunate enough to be one of them. So, I originated that particular index and it is still going today. As you read it in the press, the farm index has gone up so many points, and the index of prices the farmers pay and it's paid in a certain manner. The first of these indexes I take credit for.
That was followed by initiating a series known as "Farm Income." We had no adequate measure of what farmers were getting for their crops. In those days the Department used to tally, at the end of the year, the value of crops produced in terms of prices prevailing in December of each year. No recognition of the fact that farmers probably sold their stuff at either lower or higher prices before that. And the livestock was nothing more than the value of livestock inventory as of January 1. Neither of these were good measures of farmer's income. So, my next assignment was to develop an annual report on farmer's income. That's still alive, it has been greatly expanded. This led to estimating farmer's expenditures as well. So now when you read that the farmer's net income has gone up, say, from sixteen billion dollars a year, to seventeen billion dollars a year, it's based on that work we did in the late 1920s.
The next item of contribution had to do with
establishing fairly definite evidence of the interplay between agricultural income and non agricultural income. The dependence of, say, the dairy farmers, on factory payrolls. That type of relationship I developed in the late '20s, and that also has been substantially expanded so that the Department publishes currently, comparisons between farmer's income per capita with non-agricultural income per capita.
As a result of working in this field of statistical relationships, I developed an improvement on what was known then as multiple correlation. I don't know whether you are at all statistically inclined. Today if you knock on the Government door and ask for a job and you use certain phrases like "computers," "programming," and model-building," you're readily accepted. In the early 1920s if you approached a statistical office in a government agency and you said, "multiple correlation," you were almost in, because those were the key marks of standing in the profession. Well, I did quite a bit of work in that corner of statistical analysis, and developed what has now become known as the Bean Shortcut Graphic Method of Multiple Curvilinear Correlation.
HESS: Got your name on the title.
BEAN: And that field has since been greatly elaborated with the advent of high speed computers, but there's
much that lends itself better to graphic correlation, as against the highly technical, sophisticated electronic computer operations. And it is, I think, being used by many statisticians and researchers in government and business. But I rather think that my work is partly responsible for that. I published articles on the subject in December 1929 , and December 1930, and recently these articles and associated articles have appeared in book form (Kelley Publishers, N.Y.).
Well, this takes us to about 1929, 1930, '31. Then came the great depression, and maybe I ought to mention one item by tooting one's horn. As Mr. Paul Appleby, the administrative assistant to Henry Wallace and later Under Secretary, once said, "Louis, if you don't toot your own horn, who will?"
In January of 1929, in connection with our annual agricultural outlook, I was about the only one in the Department of Agriculture who argued that come the fall of 1929, in other words the crop season of 1929-30, farmers would be experiencing a letdown in business activity and in the demand for their products. I was not able to say that the recession would be a minor one or a deep one.
HESS: But you did look for a recession at that time? What
were the indicators that you saw?
BEAN: Well, let me first say that, from the standpoint of Government, I, through the Department of Agriculture, was the only voice that prophesied a downturn. It was unusual for a government agency to allow that kind of a forecast to get into print.
The factors that led me to that conclusion were, first, a familiarity with certain studies the Harvard Economic Committee had been publishing. In those days there was a group of Harvard economists who had studied economic statistics and economic history, had put together various indicators which they called the A, B, C curves. The A group represented speculation, typified by the stock market index. The B group represented current business activities, industrial production, employment, and that sort of thing. And the group C represented financial operations, bank credits, interest rates and so on. So there were available to us in those days, three indexes which the Harvard people used to put out in the form of a monthly letter, to business subscribers, called the A B C Curves. A preceded B and B preceded C, so that you could then, using the stock market index, predict the rest.
By the end of 1928 these three curves became
useless because the speculative curve, the stock market curve, had gotten way out of historical terrain. But I was able to modify the Harvard speculative curve, or rather to analyze it in a way that the Harvard people were not. I recognized that this upsweep that represented the speculative boom of the late '20s...
HESS: People buying on margin.
BEAN: People buying on margins, and all kinds of speculation. I recognized that this speculative index had two elements in it, a longtime trend and a cyclical component. And viewing it in that way, I recognized a combination of speculation, business activity, and finance, that looked very much like the combinations that prevailed preceding earlier depressions, or recessions; that of 1926, that of 1923, that of 1919.
So that was the main prop in my thinking. There were some others. I studied the course of certain industries, the automobile industry I remember particularly struck me because the prices of, stocks of, automobile companies, showed a decline in 1928 as against the continued rise in the rest of the stock market. And that I interpreted to be a foreshadowing of a general decline in the market, that we were at the peak of a business situation and that the next move would be down.
I probably ought to say also that by following this kind of analysis I was a year too soon in forecasting the upturn. I thought we were going to get it in 1931-32 and it didn't come until 1932-33.
So, we are now somewhere at the bottom of the depression, the arrival of the New Deal, and in that connection I perhaps ought to mention the fact that I used to be visited not only by Henry Wallace, but also by M. L. Wilson. He became Under Secretary under Henry Wallace and then later, head of the Extension Service. But in the middle of '32 he was one of the "John the Baptists" of the New Deal. He went around the country explaining what the depression was doing to farmers and what kind of measures were required to get farmers out of the depression. I think it led him to visiting with Governor Roosevelt in Albany, because Roosevelt was then looking for bright ideas for farm programs that he could talk about in the campaign in farmer's language. The reason I mentioned M. L. Wilson at this juncture is that he came to me one day for certain information that he could use in his talks over the country. And one of the items I gave him had to do with a chart demonstration of the piling up of agricultural surpluses, of stocks abroad, which of course, affected agricultural prices abroad, which
in turn led these countries, especially Germany and other European countries to erect tariffs against our exports.
Well, Wilson was able to make use of this illustration of one of the farmer's problems, the piling up of surpluses. The reason I think of Wilson at this juncture is because after I gave him this material which I worked up for our use in the Department as well as part of the Department's publications, I could tell where he was traveling over the country giving speeches -- I would get letters asking me for the chart that M. L. Wilson used in his talk. He probably used to tell them, "This is the chart that Louis Bean prepared, and you write him and get a copy," or something like that. So, I was able to follow that campaign a little bit.
HESS: Follow his progress around the country.
BEAN: Yes. With the New Deal having arrived in 1933 and agricultural programs having been launched, at that juncture Wallace had asked me to come out of the Bureau of Agricultural Economics to become part of his main office. He had then, as Economic Adviser, an associate of mine, Mordecai Ezekiel. The two of us had the same office and we both served Wallace directly. I became, for purposes of payroll, Economic Adviser to the
Agricultural Adjustment Administration, but housed in the Secretary's office with Ezekiel.
Thinking of your question: What contributions you made at that juncture, my mind turns to one of the early legal cases that came up as a result of the farm programs, and it was necessary to present materials supporting the agricultural legislation. And Ezekiel and I were asked to prepare an economic document which we called the Economic Bases of the Agricultural Adjustment Act. So, students who look back now at the early developments of the agricultural segment of the New Deal find that particular document useful as a point of reference.
I also developed a bulletin on the relation between agricultural and non-agricultural income for the Agricultural Adjustment Administration. At that time in the late and middle 1930s I also developed the first index of national income. Since I was free to develop material as required for understanding the agricultural situation, the national income was of great interest to us because that was the source of the purchasing power that the farmers depended upon.
In those days all that the country had in the way of measuring national income were annual estimates put
out by economist and statistician Dr. W. I. King, for the National Bureau of Economic Research, and that work was taken over by the Department of Commerce, still on an annual basis. We wanted something more current, so I constructed, on the basis of three segments of information, factory payrolls, railroad payrolls, construction payrolls, the equivalent of a national index of national income month by month.
HESS: One question at this juncture: One of the methods that was employed by the Agriculture Department as you will recall was a method of killing every third pig and plowing under every third row of corn. What was your view on that?
BEAN: Well, in the first place, I think the plowing under of every third row, that bright idea I think was already launched in the latter days of the Hoover administration. I think it was proposed in connection with cotton, not corn. The so-called slaughter of little pigs that you referred to, came a little later, and I personally had no responsibility for it. Wallace has been charged with that enormous crime of killing pigs at the weight of eighty pounds instead of a hundred and eighty pounds! I don't know whether the crime is greater as the weight goes down or not. But that was really a proposal forced
on Wallace by the farm organizations, he didn't propose it. But it's gone down in history as part of the Wallace program.
But in terms of economics, and I don't know whether you'd say, the humanitarian aspects of killing pigs, I sense no crime, because there was no dearth of food in those days. There was a dearth of dollars rather than food. As I say, I see no greater evil in killing a two hundred pound pig as against a hundred pound pig. Some pigs are allowed to grow to even heavier weights, maybe four hundred pounds. But anyway, my personal preference would be, as a matter of fact, no pigs at all, because I'm not sure that mankind needs pigs, or meat, in its diet.
HESS: You think we'd all be better off as vegetarians?
BEAN: Probably, no worse off. The economy would be better off. And having worked on other problems in recent years, especially having to do with world problems of food, hunger and malnutrition, I think a great disservice is being done. I mean if you look at the world as a whole, in terms of what it is producing for mankind, I would say a great disservice is being done by channeling certain of our food products through inefficient "processing factories," known as animals, in order for the
human being to get a certain amount of, say, protein. We are in effect feeding -- the land devoted to agriculture is really feeding two populations, animals, four-legged creatures, and man, two-legged creatures. We feed animals in order to derive from them something that man can then chew on. But in that process we lose 3/4th, approximately, of the valuable food element, protein.
If you give an animal, say a hundred pounds of protein in the course of a year, what we get back in the form of meat, eggs, milk, contains only about a fourth or a fifth of what the animals had to use for its own bones, for its own meat, for its own muscle, for its own hair, for its own teeth. It has to use up that much, and then have left about twenty, twenty-five percent for man.
So, it's a very wasteful process, a very costly one, and it just doesn't make sense. I mean if the world were properly organized, as a factory, to produce food for humans to use, with an eye towards doing away with protein malnutrition, this indirect way of obtaining protein would be a crime, because we don't need animals for food, and using animals just means that we're just not utilizing food resources most efficiently. In recent
years a great deal of progress has been made by food processors in converting soybean meal, cottonseed, peanuts, etc., into a large variety of meat substitutes and beverages bypassing the animal.
I'd like to claim a little bit of credit for trying to popularize this notion that we are wasting food when we are processing it through the animal for our own use. I have written on this subject, and even presented testimony before a congressional committee in 1961 entitled, "Closing the World's Nutritional Gap," with emphasis on the availability of foods and liquids from oil seeds. Because the animal has to absorb three fourths of the oil seed protein for its own needs, the cost of the products is very high. Protein derived from beef may cost as much as forty times, if not more, than the same quantity that you get out of soybeans. Now soybeans happens to be very rich in protein. Forty some odd percent of the soybean is protein. The only other commodity that beats it in terms of availability of protein, is fish. And so the world now is really beginning to pay more and more attention to fish protein, fish meal, and protein from the oil seeds, with soybeans as the prime vegetable protein source.
We today feed most of our soybeans to animals. As
I said, we get back only a fraction of what we feed and the enormity of what we do is exemplified by the fact that soybeans is now one of our largest cash crops. During the past thirty, forty years, we've built up our soybean crop to be one of the top three cash crops of the country; more than a billion bushels a year. Most of it going into feed. And worse than that, if I can continue giving you a sort of Sunday school lecture, we are the awful example, awful in my terms, to the rest of the world, because the rest of the world, seeing what we've been able to do in the way of feeding our protein and cottonseed meals to hogs, to poultry, are beginning to do likewise. In India they are beginning to learn how to produce soybeans. We've sent teams over there from the University of Illinois to teach them. They are developing their soybean production, still small, but as it expands I'm convinced that most of the soybeans will go primarily into live-stock, rather than directly into human food. And they're going to become, in the use of that commodity, I'm afraid, as wasteful as we are.
Now this is perhaps a digression but let me justify it by saying that the President's Science Committee on Food and Population published a report on that subject
two or three years ago, and in dealing with proteins, it included in that report, some of the material that I had developed, illustrating how wasteful we are, or the world is, in diverting protein into animals in order to get human food, and pointing up the high cost of protein obtained through meat, as compared with protein directly from soybeans, from sunflower seeds, from peanuts, from cottonseed. Well, so much for an interest that I've developed in recent years rather than an interest that I had while in the Department of Agriculture.
Then came the middle and late 1930s, and as I said, Ezekiel and I were in the office of the Secretary of Agriculture. My mind turns to the situation at the end of 1936 or '37. In those days Wallace began considering not only the immediate farm situation, but what it was likely to be in the next five years, and that led to our interest in projecting the national economy for the next five years, the national income, the stock market, commodity prices and so on, and I prepared a report on that subject. And in 1935 or '36, maybe '35, I predicted that the economy would rise to a peak by March, or the spring of 1937. We would then have a letdown in business and a decline in the stock market, which we did get. And I also projected the recovery for subsequent years. Whether that is a contribution or not, I don't know. All I know at the moment
is that it was, what shall I say, a contrary view.
Roosevelt was then, by "then" I mean the spring and summer of 1937, being advised with regard to the business situation by [James A.] Farley the Postmaster General, that things looked very nice. There was no evidence of a business recession as he saw it.
Now Farley saw the world, or the American world, through his economic sights, consisting of postal receipts. He got reports currently from the various cities, the volume of mail handled and the number of stamps sold, were holding up very well. On the other hand, we, looking at the business situation quite differently in terms of industrial production, agricultural and non-agricultural manufacturers, and employment, saw a recession developing.
Now the difference between us, and by "us" I mean Ezekiel and myself, versus Farley, was that Farley was dealing with an aspect of business which lags after developments in the rest of economy in terms of production and employment. Because people do not curtail sending letters as soon as they lose a job, or as soon as industrial activity has declined five or ten percent. In the same way retail sales in general hold up for some time after a recession has started so there was a
diversity of opinions that Roosevelt got, one represented by Farley, the other represented by the Department of Agriculture.
Perhaps I should backtrack a moment and mention the NRA, the National Recovery Administration, which came into being in 1934. We had very little to do with it except, one day [Rexford Guy] Tugwell came back from the White House and said that they had discussed creating an industrial recovery agency. Now that we had the programs for agriculture, could we give them some ideas for programs for industry. And he said there is a young man by the name of Strauss working for Morley over in the Treasury and he was being asked to put together some ideas too, so we should get together with him. Well, Ezekiel and I drafted a memorandum for Tugwell's use, in which we argued that whereas in agriculture it was necessary to restrain production, because we had surpluses which were responsible for the low level of farm prices and income on the industrial side, we had a surplus of unemployment and a shortage of industrial activity. What was needed then was to raise industrial production while holding down agricultural. Anyway, that was the point of view that we held.
The sequel to that particular episode of our meeting with Strauss -- he was at the same professional level of
activity in the Treasury as we in Agriculture -- had to do with the establishment in the Department of Agriculture of the office of the Consumer Counsel. The Consumer Counsel was an idea which Henry Wallace developed. I remember clearly our walking across the street from the south building to the Administrative Building one day after lunch and said, "I think it would be a good idea if we had a Consumer Counsel in the Department of Agriculture." Why? Because he felt that he was going to be so pressured by agricultural organizations, the Farm Bureau and others, that he would need some kind of protection against them in behalf of consumers. So, a few days later the Department's lawyer, Jerome Frank, came out of a meeting in Wallace's office and sat down at my desk and said, "We've just been talking about appointing a Consumer Counsel, and somebody recommended Stuart Chase for that job."
And I said, "No, I don't think Stuart Chase is the man you want. You want Frederick Howe."
And as soon as I said, "You want Frederick Howe," Jerome Frank jumped out of his chair as if he had been sitting on a tack, and said, "Why, of course, that's the man we want. I know Frederick Howe, he lives right across the street from me," (in someplace outside of New York City).
Now, why did I mention Howe at that juncture? It was because when we went over to the Cosmos Club one evening to meet young Strauss on this question of ideas for industrial recovery for the NRA, there sat not far from us, Frederick Howe, and another person who was involved in consumer organizations. As I looked at Frederick Howe I remembered his name, way back in the 1910-14 period, as being the head of a movement to keep down the HCL, the high cost of living, of that period. You see there had been rising prices all the way from 1896 to 1910, so consumers were concerned about inflation and he was involved in that effort to check inflation. That's how he happened to come to my mind. That's how I happened to pass his name on to Jerome Frank, and that's how he was appointed, and became quite a figure on behalf of consumers in the Department of Agriculture for several years. So, I'll claim a bit of credit for that.
What else -- what else comes to mind? In '38, '39, '40, we got involved in the early stages of our involvement in the war. Henry Wallace I think took the position in those days that, "Yes, there is a war in Europe and we don't want to get involved in it. Therefore, we should modify our agricultural programs in
the light of not having that market." So, in those early days, Wallace really sort of held back from our participation in World War II. I think that position probably came natural to him coming out of the Midwest where people are not as international-minded as those in the East and Far West.
HESS: Isolationist sentiment was rather strong.
BEAN: Yes, although basically Wallace was not an isolationist. He wrote a booklet in early 1933, We Must Choose, a plea really for lowering tariffs, for expanding international trade.
Well, we come to about 1940. About that time, just before the election, I think Henry Wallace (I suspect, although he never said it to us), had some concern about the future of some of the men that he had drawn in around him. There was created in the Bureau of Agricultural Economics a group of economic counselors, and two of us were transferred from the Secretary's office to this group in the Bureau of Agricultural Economics. There were five of us: "Buck" [Foster F.] Elliot, and Jack Fleming, and O.V. Wells, and Howard Tolley, and Tolley I guess was then Chief of the Bureau. So, I became one of the economic counselors in the Bureau of Agricultural Economics up to the time when Wallace,
as Vice President, was put in charge of the Board of Economic Warfare.
Wallace asked me one day whom should he put in as head of the Board of Economic Warfare. I said, "Why, the man that you want to put in there is Milo Perkins."
Milo Perkins was a very close friend of Wallace's and an assistant in the Secretary's office. Wallace had put him in charge of the surplus food distribution program and the development of the food stamp program, which has remained since, as a national program. But he had done such a good job of working that program out with the business community, particularly the grocery industry, that he had excellent standing in the business community. For that reason I suggested that he put Milo Perkins at the head of the Board of Economic Warfare, as his administrator, which he did.
I then went over to the Board of Economic Warfare, because of Wallace, and stayed there for a couple years until the BEW got into trouble with Jesse Jones (head of Reconstruction Finance), and was reorganized, part of it transferred to Commerce and part of it to State. At that juncture, Henry Wallace and Harold Smith, who was then Budget Director, worked out an arrangement for me to go over to the Bureau of the Budget to serve Harold Smith in much the same way as I had served Wallace. In
other words I became one of the Fiscal Analysts in the Bureau of the Budget, with the understanding that Wallace was free to call on me any time he wanted something that I could do for him.
HESS: What kind of a man was Harold Smith?
BEAN: Harold Smith I didn't know too well, but I have a very favorable impression of him as a person and administrator. I guess he was very close to Roosevelt, and must have been very close to Wallace, since they were able to enter into this kind of an understanding. No, I can't elaborate on him because I don't know enough about him except that the contacts that I had with him left me with a sense of a very decent, able, concerned person.
While at the Bureau of the Budget, one of the activities that I engaged in, somebody reminded me of the other day, I had completely forgotten it, I used to hold luncheons every Tuesday, consisting of some key people from the various departments interested in economic planning.
There had been a National Resources Board under [Frederic A.] Delano in the New Deal days, which later sort of died out. Several of us, while I was still in the Department of Agriculture, used to hold meetings in the Department to try to keep a "planning" group together,
one or two men from the Labor Department, somebody from Commerce Department, one or two from other agencies. We used to meet every week and discuss the broader questions of the economy. I think out of that group interest grew the development in the Department of Commerce of the Business Advisory Council. I can't document that, but that's my suspicion that out of our trying to maintain an interest in planning, and having in that group, one or two men from the Department of Commerce, the Department of Commerce was able then to build on it.
So, I used to carry a similar activity in the Bureau of the Budget. That led me into an interest in postwar planning, postwar problems, and it led also to my being one of the several people around town who was brought together by a fellow by the name of Bertram Gross who was then working with Senator -- Senator from Montana, what is his name, Thomas -- no...
HESS: Thomas was from Utah.
BEAN: Utah. Now who is the Senator from Montana? Oh, I should know his name [Senator James E. Murray]. Anyway, this young man, seeing that the work on the committee that he was on, for the Senator, would terminate with the end of the war, developed an interest in planning, postwar planning, and planning for maintaining full
So, he brought together a group of us from various departments and we used to meet and discuss, and out of that activity grew, finally, the Employment Act of 1946. And one of my tangible activities shows up in the pamphlet which was submitted to the Senate committee on the subject, which presented a lot of the basic longtime economic records to justify an interest in greater stability after the war, in price level movements in the construction industry activities and various other economic indicators. So, there is a compilation, I forget now what it is called, Facts related to full employment or something like that. Sam Thompson of the National Planning Association and I brought this material together, securing the cooperation of all departments concerned.
Then the Council of Economic Advisers was organized under that act and two men from the Bureau of the Budget were scheduled to join the new unit, Gerhard Colm and myself. Gerhard Colm had developed the system of national income, the gross national product, so that he was the logical person for that new agency. I was supposed to go over with him, but Dr. [Edwin G.] Nourse, called me in one day and said that he couldn't take me in because he was being watched very closely, and there was a great
deal of concern about subversive characters in the Government.
HESS: They didn't think you were a subversive character did they?
BEAN: Well, no, but I think in those days when the Bureau of the Budget came to the Congress with its budget, they were asked certain questions: Do you still have Gardiner Means on your staff? Do you still have Alvin Hansen on your staff? I mean they would ask -- they would probe to that silly extent as to who was employed in various agencies. Well, since Nourse had already hired Colm, who had come to this country as a German refugee in 1933, or 1934, he said he couldn't take another person with a foreign background, (I was born in Lithuania and came to this country at the subversive age of 10!).
HESS: This was even a couple of years before McCarthy wasn't it?
BEAN: 1946 this was. Which reminds me of an episode which I pe