Numbers appearing in square brackets (ex. ) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
Opened June, 1983
Oral History Interview with
July 9, 1971
by Theodore A. Wilson and Richard D, McKinzie
WILSON: One of the topics that has engaged our attention has been the role of the Office of War Mobilization and Reconversion in all this. It seems to be rather a crucial agency in postwar planning and in the immediate postwar period. You were involved in that. How did you happen to that agency?
BISSELL: I had been working in Washington during the war in the War Shipping Administration and in the fall of 1945 a neighbor of mine in Washington by the name of Hans Klagsbrun, a lawyer, was the deputy director of the Office of War Mobilization
and Reconversion under John Snyder. He approached me and asked if I would be interested in shifting from the War Shipping Administration which was clearly nearing the end of its activities to OWMR. I said I was and did so forthwith.
My predecessor was Robert Nathan who was a very well-known economist. I had known him personally -- not terribly well, but moderately well. And he had decided to leave. His position, I think, was really senior economist on the staff. Klagsbrun knew of my background in economics and in effect I became Bob Nathan's successor. I think it was about three months after I joined the agency that Klagsbrun himself resigned and John Snyder then asked me to take over his position. I joined the office in the autumn, possibly in September. My recollection is that Klagsbrun left in January, and I was in effect the deputy until the following summer, when I left to rejoin the faculty at MIT. My main concern while I was there was with the price stabilization program, most of the issues
which arose seemed to involve that in one way or another. As I'm sure you're more clearly aware than I (because I assume you're much fresher on the history), it was a period when wage controls had crumbled or legally had been abolished, but price controls still were being maintained, and this gave rise to a whole succession of official policy conflicts. The War Production Boards interest at that phase was to accelerate civilian production in every way possible; the price control agency was trying still to keep a lid on prices. And this meant that every major wage negotiation threatened in effect to shut down an industry. Employers couldn't grant wage increases without a change in price ceilings. The unions wouldn't accept wage stabilization imposed through price controls and through the employer. So all of these disputes ended up in Washington and a good many of them came to our office. It was a time when there were not only in effect these conflicting policy objectives of accelerating production on one hand and price control on the other,
but of vigorous personality conflicts as well.
I happened to know Chester Bowles well, had known him well before the war, and when I first joined OWMR, Bowles was director of Price Stabilization (he was the head of the OPA). Sometime that winter he became director of Economic Stabilization, a position that Vinson had held for a time. Because I had known Bowles very well, I was in contact with him and in effect found myself often having to be the only communications link between Snyder and Bowles. They got along very poorly. They disagreed on most major issues, and they disliked one another personally. When Bowles moved from OPA and became director of Economic Stabilization, he asked me if I would move over and join his staff.
I did not think that was wise, but with John Snyder's consent, I became one of Bowles' deputies. So I was a kind of personal interlocking directorate. I was working as Snyder's deputy part-time and part-time as Bowles' deputy. As they were hardly speaking to one another, this
was quite an interesting period in my life.
WILSON: What was your feeling about the President's position? Was he primarily concerned with the political effects?
BISSELL: I think so. Let me put it this way. I not only knew Bowles well, I came to know a lot of the men who worked for him, his close associates. I had a great deal of sympathy for their objectives at this point. I thought that as a group they were rather more idealistic and rather more dedicated than, for instance, the men remaining at that stage in the War Production Board. Very often the conflicts were between those two groups, with the War Production Board people acting as the spokesmen for avoiding strikes and accelerating production. This left the OPA and the Department of Labor in a kind of peculiar position because the WPB became to some extent the spokesman for the claims of the unions. The group around Bowles had become deeply dedicated to their goal of price stabilization, and when I say
deeply dedicated, I really mean emotionally involved in that goal. Rather more emotionally involved than I think any other similar group in the administration became in any other objective (although Wilson Wyatt and Coombs, who worked for him in housing, had a somewhat similar emotional involvement in their program). My feeling is that the President, although loyal to Bowles, appreciating Bowles' loyalty to him, and giving him a good deal of backing, fundamentally did not share the same emotional involvement in price stabilization as an end in itself. I think, therefore, that if one had got him to examine the issues and express his innermost views at that time, they would have been rather more on the other side than they were in back of Bowles.
This may have been a form of wisdom. With hindsight, I think it's clear that the stabilization of the price level roughly at its wartime level couldn't be maintained indefinitely. The cost-push spring was coiled up by years of cost
increases, and there was going to be a significant price inflation at some point. I'm not at all clear, with hindsight, that much would have been gained by keeping that lid on any longer than it actually was. I think Paul Porter, Bowles' successor at the OPA, ultimately came to feel that himself, but at the time when I was deeply involved in it, this was still a very emotional issue in Washington.
WILSON: This is perhaps a minor issue, but was there involved in this emotional attachment a recognition that rapid rises in prices for American-produced goods would be very harmful to the positions of other nations who were dependent upon these goods?
BISSELL: Most of the debates I heard focused on the domestic issues and these were emphasized rather than the implications for the export situation.
MCKINZIE: Did you have any sense of OWMR's desire to continue into the postwar period as some sort of
modified agency, with a continuing role?
BISSELL: There were a number of its staff who believed (as I was inclined to believe) that it could have played for a considerable period a useful role. As a matter of fact, that is a view that I really haven't ever changed, with hindsight. It was then a mercifully small organization. I can see the danger that if it continued semi-permanently, it would have grown very greatly. To see it become a large organization I now feel would have been unfortunate and on the whole the better course may have been to abolish it. But as it did function at that time with about a dozen senior professional people, the whole variety of disputes, most of them on one aspect or another of domestic economic policy, could be staffed and resolved in most cases without requiring the President's personal attention or intervention.
When I was in the office, John Snyder was, of course, the head of it, and I believe he shared no part of the view that it ought to continue.
I think at the time, and subsequently, his feeling was that it should be wound up as an office just as soon as possible. Moreover, that feeling of his was not unrelated to his view as to his function while he was serving as director. He wished to make as few decisions in that position as he possibly could; he wished to interfere just as little as he could with the normal departmental machinery. I confess that I think the value of the office depended on the willingness of its director to take the responsibility and to make decisions without referring them openly or, in any except perhaps the most informal fashion, to the President. It seemed to me that its usefulness was as an organization which could take quite a lot of business off the President's desk or that of other parts of the White House staff.
Currently there is, of course, a much larger White House staff than there was in those days, and the staff I'm sure does perform many of the functions of the Departments. But the fact
that OWMR was a statutory organization with well-defined powers meant that, as with Mr. Vinson for instance, the President could place there a man of stature and distinction and could make a real delegation of authority to him. As a part of the White House staff, it seemed to me that it was well-designed for its purpose.
WILSON: That's very interesting. May I inject the issue of full employment into this? Did OWMR become deeply involved in the debate over the full employment program?
BISSELL: As I look back, I'm really not conscious of there having been much debate over this issue at the time. Remember, this was the immediate postwar. It was a period when there was considerable transitional unemployment, when the main preoccupations in the area of domestic economic affairs were inflation and production bottlenecks. There was plainly excess demand for almost everything, and so the problem was really to stimulate the expansion of production. And as of
that time at least, it was quite clear that the only acceptable way to reduce inflationary pressure was to expand production. It was clear that the very things that you did to increase the supplies of goods would at the same time take up the slack of unemployment; and so there were really not perceived conflicts of the sort that there are today between price stability as a goal and full employment as a goal. The perceived conflict of goals is the one I've already referred to - between the freeing of the economy, the acceleration of production, and the maintenance of price stability through direct controls.
MCKINZIE: There was apparently some concern in a long-term sense about the economy once this transitional period had ended, once this pent-up demand had been satisfied. How much emphasis should we give to this as a motive? I'm thinking about the search for markets, and so on. This is perhaps too general a question.
BISSELL: Well, you're certainly right, of course.
There was a great deal of concern, because at that juncture nobody had seen full employment or even reasonably full employment in the United States for fifteen years except in wartime; and there was, therefore, a great deal of concern as to whether the stagnation, which is the best you can say for the late thirties, would reappear and quite a widespread fear that it would in a relatively few years. I think one has to give emphasis to that as a state of mind which had a great deal to do with the full employment act. But my recollection is that it didn't have very much to do with day-to-day decisions for the reasons I've already given. As of that moment, the obvious way to attack unemployment was to expand production; inadequate demand was not as yet a limiting factor. I don't think anyone thought it would be for three or four years at least.
WILSON: John Steelman came in then as director and we've gathered that his role was to wrap up the
operation and he did that, I understand, with dispatch.
BISSELL: Yes, he did. I think that's true. I was still there when he took office but left fairly soon afterwards. I don't think I served actively for more than a few weeks after he was in office.
WILSON: His role in the Truman administration is a little confusing to us, partly because as historians we rely on records and his records are either closed, not available, though they are at the Truman Library, or they are not very complete. There is some suggestion that he played a very important role later as an economic adviser to the President. In practical ways. Is that correct?
BISSELL: My impression is that he did play quite an important role. My feeling is also that it was not really the role of an economic adviser, even though that might have been the way it would have been described as an official title. I have the impression that the President had come to know him well and that their relationship was a very
informal one, as the President's relationship with John Snyder had always been, a close and rather personal one. My surmise, and this is really only surmise, is that especially after the Office of War Mobilization and Reconversion was