Numbers appearing in square brackets (ex. ) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
Opened August, 1972
August 20, 1968
by Jerry N. Hess
HESS: Mr. Bell, for the record, would you relate a little of your personal background, where were you born, where were you educated, and what positions did you hold prior to your service in the Truman administration?
BELL: I'd be glad to do that. I was born in North Dakota. My folks moved to California when I was about five and I went through primary and secondary school in Palo Alto where my father was on the faculty at Stanford, and I went to college at Pomona College in southern California. I graduated in 1939. I went to Harvard for graduate work in economics, completed the M. A. in June of 1941 and had started to work on a Ph.D. when the war started, and my draft deferment was cancelled, as it should have been. For a few months in early 1942 1 worked as a junior staff
man in the Bureau of the Budget. But in the middle of 1942 I enlisted in the Marine Corps Reserve, as an officer candidate. I was called to active duty and sent to OCS at Quantico in late '42, was commissioned in early '43 and was assigned as an instructor there until '45 when I was assigned to California briefly and then for several months to the G-2 Section at Marine Corps Pacific Headquarters in Hawaii.
After the war ended, I was returned from Hawaii to the States and put on inactive duty in about November or December of 1945. I had acquired a wife and baby during the war and returned to the Budget Bureau in late '45, rather than returning to Harvard to finish my economics Ph.D. In the Budget Bureau I had been assigned in 1942 to work in the War Organization Section, as it was called, which was headed by Bernard Gladieux. When I returned at the end of the war, I was assigned to the division of the Bureau that handled labor and welfare matters, and worked with Dave Stowe and Bob Clark on some of the agencies in the Labor Department and in what was then called the Federal Security Agency and later became the Department of Health, Education and Welfare. I worked with that group through 1946.
In late '46, I think it was, Jim Webb, then Budget Director, sent to Clark Clifford in the White House some ideas on labor legislation which we had been thinking about -- it was a very important issue in those days -- as material for the January 1947 state of the Union message. It happened that Clifford was more impressed by the ideas about labor legislation that came out of our group in the Budget Bureau than he had been by any of the material that he had received from the Labor Department, or the National Labor Relations Board, or any other Government source. So he asked Stowe and me and Ross Shearer to work with him on that section of President Truman's state of the Union message in January 1947.
During early 1947 the Taft-Hartley Act was under consideration, and Clifford used us as his personal staff to keep track of the progress of the legislation, and to analyze the various provisions that were under consideration during the legislative process. And then we assisted him in drafting the Taft-Hartley veto message after the bill had been enacted. All this, incidentally, was and is not extraordinary but a frequent type of service that Budget Bureau staff members become
involved in, because the Budget Bureau is part of the Executive Office of the President and serves as an augmentation staff for the White House. In this way I became known to Clifford and to Charlie Murphy, and in late '47 Murphy asked me to come over full-time on the White House staff working for him.
HESS: As a man who was associated with the Budget Bureau for a number of years, including a period of time as head of that Bureau, I'd like to ask you a few questions about its operation. Just how has the role of the Bureau of the Budget changed since its establishment in 1921?
BELL: Well, as I understand it -- I'm no expert on the detailed history of the Budget Bureau -- in the early days it was thought of primarily as an organization concerned with the efficiency of Government operation. They used to tell a colorful story attributed to Charles Dawes, who was one of the early Budget directors, to illustrate his conception of the Budget Bureau's work. He said, it is alleged, that the Budget Bureau was not concerned with the purpose of governmental activities, it was concerned with whether they were
efficiently executed, and if one of the purposes, for example, of a Government agency was to dump garbage on the steps of the United States Capitol, it would be the Budget Bureau's job to find out whether this garbage was dumped at the least possible cost.
HESS: What was your view of that?
BELL: I think that's silly. I think that Government efficiency is an important part of the interest of the Budget Bureau, but I think that how much money the Government spends is influenced far more by decisions as to what the Government will undertake, and the most important questions that the Budget Bureau is involved in are questions of what the programs of the Government should be, and whether they should be enlarged or diminished. The Dawes view was, by and large, the view through the twenties and thirties.
HESS: The view that was accepted at that time?
BELL: As I understand it. I don't want to minimize the importance of the Budget Bureau in those days. It was a great step forward in the efficiency of the United States Government to have in one place the anticipated
expenditures of the Government all accurately assembled, related to the same time period, and made available where anybody could look at them, compare parts of them, add up the totals, and so on. That had not been possible before the Budget and Accounting Act of 1921, so that it was an important step forward to have a Budget Bureau at all, and to have the President required to submit a single budget to the Congress each year.
But in the late 1930s, with the Brownlow Committee -- Louis Brownlow, Charles Merriman, and Luther Gulick -- that Roosevelt appointed, a new and broader concept of the Budget Bureau came into being, which was that the Bureau ought to be a major staff arm for the President advising him on overall budget questions, policy questions related to the budget, fiscal policy, and matters of the organization of Government, and that it ought to be taken out of the Treasury where it had been up until that time, and put into a new Executive Office of the President, which was invented by the Brownlow Committee. All of this was done in about 1939.
HESS: This was the Reorganization Plan Number One of 1939.
BELL: That's right. And the first director of the Budget Bureau under the new arrangement was Harold Smith, who had been budget director for the State of Michigan. He remained as budget director through World War II, and it was under him that I served first in the Budget Bureau in 1942. He resigned in 1945 -- I think this is right -- and went to work for the World Bank. He died shortly thereafter. He was a very fine man, an excellent budget director, and he established what is essentially the modern view, the modem role, the modern organization, and the modern methods and procedures for the United States Budget Bureau. He was succeeded, I think, immediately by Jim Webb, and later by Frank Pace, and Fred Lawton, all during Mr. Truman's term.
It isn't part of the answer to your immediate question, but it's worthy of note, I think, that in Mr. Eisenhower's two terms, the Bureau declined in importance somewhat because it was placed in the charge of accountants. Accountants are estimable people, but the particular accountants who headed the Budget Bureau during the Eisenhower years did not have the same broad conception of the Budget Bureau and its role as Smith and Webb and the others had had. So
when I became Budget director in 1961 under Mr. Kennedy, we quickly restored the broader view which had been held earlier, which was not a novel view and was a very simple thing to do, as most of the senior staff members felt the same way I did because they had all been there in the Truman days, as I had.
HESS: The four men that you named: Smith, Webb, Pace and Lawton, did they carry out their duties in any noticeably different manner?
BELL: Well, you understand that I was a relatively junior member, first of the Budget Bureau staff and then of the White House staff in those days, and also that this was now twenty years ago. My impression is that Harold Smith had more impact on Government decisions than any of the other three, which is, I'm sure, largely due to the fact that he was in the job a long time, and he established a very intimate and effective relationship with FDR during World War II. There were a lot of issues having to do with the organization and reorganization of Government for war purposes, which were natural issues for the Budget Bureau to take
the lead on, and many issues of war and postwar fiscal policy, on which the Budget Bureau had a good staff, and had a lot to say, so that Smith, and the Budget Bureau in Smith's day, were very significant.
Webb was also a very a