Oral History Interview with
Thomas C. Blaisdell, Jr.
Economist with the United States Government, 1933-51, including service as Director, Bureau of Plans and Statistics, Office of War Mobilization and Reconversion, 1945; Chief, Mission for Economic Affairs (with rank of Minister), London, England, 1945-46; Director, Office of International Trade, Department of Commerce, 1947-49; and Assistant Secretary of Commerce, 1949-51.
Kansas City, Missouri
March 26, 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.
Numbers appearing in square brackets (ex. ) within the transcript indicate
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 It may not be published in full except by permission of the Harry S. Truman Library.
Harry S. Truman Library
[Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed]
Oral History Interview with
Thomas C. Blaisdell, Jr.
Kansas City, Missouri
March 26, 1971
by Richard D. McKinzie and Theodore A. Wilson
WILSON: One of the things I know you will be able to help us on is to give us some idea of how things looked to you, at the time you were in London, about what was going on in Washington in the period late in the war and in the immediate postwar period. What did you feel they knew about the situation? How much awareness did you think Washington had about the problems?
MCKINZIE: Particularly of England's financial difficulties.
BLAISDELL: There were a number of problems here. I think that it's only fair to start this comment, really, in Washington before I went to London, because I'd been working in the War Production Board there as a member of the Planning Committee; and then after the big blowup with Nelson and Charlie Wilson, the Planning Committee was abolished, and the question was whether the individuals were going to be abolished too. I landed as chairman of an interdepartmental review committee and director of the Bureau of Orders and Regulations. I became one of the most violated bureaucrats of Washington, because I was responsible for industrial control orders.
But at the end of that period, just before the last few months of the war in Europe, people were beginning to talk about reconversion.
The Office of War Mobilization and Reconversion was appointed with Jimmy [James F.] Byrnes at the head. A number of people in the War Production Board were going to change positions and I was quickly shifted from the Chief of the Bureau of Orders and Regulations, which were beginning to be out of date then, to be head of the Bureau of Statistics.
Well, that had hardly started, maybe it was a month, when Byrnes and General [Lucius D.] Clay, who was deputy, whom I had worked with in the War Production Board said, "You've got to come over and work with us."
So, I went over there, but in less than 60 days there was another change. This was how fast things were moving. This is important, because many responsible people weren't clear what they were doing. During the Battle of the Bulge they blew hot as to
supply policy until that battle was over.
This was illustrated by my relation to it. I got up one morning, about the first of March, '45, and picked up the Washington Post and read that President Roosevelt had announced that I was appointed as the Chief of the Mission for Economic Affairs in London.
This was the first I had heard of it. I didn't know what was involved, and I had received no notice from the President's office. I called Ed Stettinius, who was the Secretary of State at the time, because this appointment had a certain international importance, though it was not in the Department of State. This was a position that originated with President Roosevelt's appointment of [Averell] Harriman in London, back at the beginning of lend lease. When Harriman was moved from London to Moscow as Ambassador,
Phil Reed was made Chief of the Mission for Economic Affairs.
The story, as I recall it, of Harriman was that he arrived in London as head of the mission and instead of consulting [John G.] Winant, he went directly to [Winston] Churchill. (Winant was the Ambassador.) And from then on the Mission for Economic Affairs dealt directly with the Government, not through the Ambassador on all non military or diplomatic problems.
Harriman, although he had the rank of Minister, which I had later, was the "Ambassador" for working purposes as far as supplies and many other problems were concerned. What the relationship between Harriman and Winant was I never quite knew. Both Harriman and Winant were friends of mine, and this relationship was on a strictly personal basis. We had worked together officially on various things, and
personally I had. great confidence in them. I had worked with Winant when he was Chairman of the Social Security Board and had been able to do a few things that were, I hope, important in that connection; but I felt that I was not going to London without at least Stettinius knowing what I was doing.
So, I called him on the phone and went to talk to him. Stettinius never had a firm hold on the Department of State, but he was a person of great integrity and did have a feel for a lot of things.
And he said, "Well, Tom, the story, briefly, was that we didn't have any intention that there should be another Chief of Mission; but apparently it has been decided that there is to be and if there's going to be there's nobody I would rather have than you, because I know you'll work with Winant and I know you'll
work with Harry Hawkins." Hawkins was the Economic Minister, and when Reed retired, the State Department had agreed with Reed that Hawkins would assume, in addition to his responsibilities as Economic Minister, the direction of the Mission for Economic Affairs.
As I look back on it over the years, that was the right thing to have done at the time. My appointment was a mistake; but I didn't know it then, and the assumption was that if the president said this is what he wanted me to do, well, let's go, and let's do what needs to be done under the circumstances. It's a war. There was another angle to it at the moment, because I had been put in a very difficult position. The UNRRA had recently been established and there's a whole series of other things
that were in the works at .the time.
My wife was an UNRRA officer, in personnel operations, and I watched this develop along with the other postwar agencies that centered around the United Nations, like the Bank, the Fund, and the Food and Agricultural Organization, the World Health Organization, and UNRRA. But the first of these was UNRRA, and it was very clear that there was to be an important operation in the Far East as well as Europe. The essence of this was that we were nearing the end, and [Herbert H.] Lehman, who was the first head of UNRRA, asked me to become the head of the China mission. He knew that I had had some Far Eastern experiences because in addition to three years spent in China, I had previously had three years experience in India. I was not a neophyte as far as the Far East was concerned,
but I certainly was no expert. I knew a little bit and I had a little feel for it. For reasons that are complicated, much too long winded for what we are interested in here, I was still considering this. The Chinese officials that were in Washington were so sure I was to be appointed that they were trying to get me to party this and party that, and I said, "We'll face that when we get to it."
WILSON: You remember saying that to the Chinese Government?
BLAISDELL: Yes. And at this minute, this announcement of what the President had done appeared in the Washington Post, and as I said, I called Stettinius, and he indicated that if he had been doing it he wouldn't have appointed anybody, but it was the other way around.
I said, "Well, now, who is responsible
for this appointment?"
I then learned that apparently it was the people in the Foreign Economic Administration and probably Oscar Cox, who was deputy, because Henry Wallace was out and . . .
WILSON: Leo Crowley.
BLAISDELL: Well, no, Leo Crowley was the head, but Oscar Cox was really running the show, and Stettinius said, "Why don't you call Oscar and he'll probably tell you."
So, I did, I called Oscar and he said, "Well hasn't the White House been in touch with you?"
I said, "No."
He said. "Well, that's surprising."
Anyhow, it was very clear at this time that President Roosevelt had had nothing to do with it, that the "White House" was approving but the President was not being consulted
except on the most important things, of which this was not one.
WILSON; Now, are you suggesting that he was trying to conserve his strength, that he was too ill?
BLAISDELL: That's my present belief; but at that time he was just we11, see, he had returned from Yalta. He'd gone up to the Congress and testified in a wheelchair, which was the first time he had ever done that, before the Congress. There were stories in the papers that the President's health was not good always denied of course but it was reasonably clear that this was the situation, and that was my conviction. So I made no further attempt to consult the "White House" but went directly to Oscar Cox, and said, "If I'm to do this, what am I supposed to do? What am I going over
there for, because I know something about the problem here of lend lease from this end, what's involved and what kinds of things are going, the whole military operation which is concerned with the shipment of all kinds of things," and this was all being taken care of. I didn't give two hoots and a hurrah about the accounting, because whatever the accounting was I was convinced at the time that this was the cheapest expenditure for the most return that the United States had ever gotten, because we got flesh and blood for raw materials.
Talk about saving American lives, the saving of American lives by the expenditure of British and Russian blood was the cheapest thing as a nation that we ever got.
WILSON: Can I ask a question, to try to reveal some of the bafflement that we have about
this problem? There is in this period, this difficulty about British use of lend lease, and the problems before that. People were saying, "The British are using us, using lend-lease to stockpile food and stockpile goods of all kinds, but that goes far beyond what had been the prewar arrangements for normal imports of those items. And other people from the liberated areas by early '45 were saying, "Let's cut into these British reserves and use some of these for Europe now." How should we approach that, all that business about it?
BLAISDELL: Well, I have little clear memory of this, in any form that I would say was authoritative, because I don't remember the data too well. I have a recollection, though, that to some extent there were stockpilings, more than would have been "normal" in peacetime;
however, one must remember this in terms of, "this is war." And while it was true that, from '43 on, there were great declines in the amount of shipping sunk, there were still serious questions of whether these supplies would be needed. Would we have another period when submarine warfare was going to be more effective? You've got to think about this, and I don't think that at any time during that period when you speak of British stockpiles or stockpiles in Britain, is a better way to put it, because this was stockpiles for Europe as well as Britain that
the British people ever had access to foodstuffs, or other supplies anything like what would have been conceived as normal peacetime adequacies.
WILSON: There wasn't in your view any clear British effort to exploit something we might call a
"special relationship," that is to say, that they were attempting to argue that we have a particular kind of relationship with the United States, or you shouldn't be too concerned about the kinds of things that are coming into Britain, how we use them? One of the things that comes up in the correspondence that we've seen that has concerned Congress was the particular allocation of lend lease materials to be used for the war effort. Are we really providing the British with lumber and things like this to rebuild after the war, in a special way that we're not providing other places?
BLAISDELL: Well, I have quite strong feelings about this, because the feeling I got and this came from very shortly after I arrived of what the British were trying to do, and they tried to do it without much success, was to make available from British resources, to
the American troops and American services that were there, something .which they could contribute to us in response for what we were contributing to them.
MCKTNZIE: Reverse lend lease.
BLAISDELL: Reverse lend lease. And we were supplying our own troops so generously that the problem was one that was really in reverse in that the real problem was that here were American troops and American civilians working in Europe, being supplied through military channels, who were being supplied so well that the American GI and the American officer was the ideal to the British soldier. Why couldn't the British soldier get that kind of rations? Why couldn’t he get this kind of care from his government that the American soldier gets from his government? And this
wasn't something somebody told me. This was the feeling that I got from association with British troops and seeing the American troops in relationship with the British troops, and it was this kind of thing that gave one the feeling that, "Gee, here's a bunch of plutocrats that are concerned about the people that are on welfare," and whether the welfare people aren't living too well. That's a psychology that is not unknown today.
WILSON: How widespread was this?
BLAISDELL: I think it was very widespread.
WILSON: How about on the part of American representatives, not that they could do very much about it, I suppose? They had made commitments to maintain post exchange privileges and various other kinds of things, not in Britain, but there was a concern that this was going to
affect the U.S. image?
BLAISDELL: I think there was very little concern on this point. There was very little sensitiveness on this point; not nearly as much sensitiveness as one would expect. I think it's fair to say that when we, as an organized nation, move nationally we take our standards with us. You know, standards are reflected in the military establishment, and having established those standards we accept them as right. If other people can't come up to them, "Gee, that's too bad," rather than it involving any moral judgments of, "This is unfair," or anything like that. That's something that is the other person's reaction rather than ours. I don't think there was very much of this. There are a lot of overtones on this that I can comment on, but I think that you're much more interested in something
else that I wanted to get at, which is the question of the feeling in London vis a vis the immediate postwar relief, basic relief business. This appointment as Chief of Mission, instead of my being able to be briefed and getting a full comprehension of what was going on, was again briefly, almost brutally interrupted, because transportation back and forth between London and the United States, particularly for civilians, was extremely limited. We were shipping military folks by air all the time, and lots of people by ship, jamming them in like sardines during a military movement. And the first question that Cox and the people in FEA faced was, "How are we going to get :our new minister over to London?"
That was a stupid question in one way, but from a bureaucratic standpoint very important. From the standpoint of national
interest it had little importance. And, as I recall, it was about three or four days from the time of this announcement that I had read in the Post, that there was another call and this time it was again from Cox, who said, "Hawkins," who was the economic minister in London, "is here in Washington on consultation with the State Department's Phil [Phillip E.] Mosely," who was Winant's consultant on the European something Commission.
WILSON: Yes, European Advisory Commission.
BLAISDELL: European Advisory Commission. "And they are here with the Ambassador's plane and there is an extra place on the plane and we think that you ought to take it, if you're willing, and get to London as quickly as you can get there."
So, with about 24 hours to get a suitcase packed and learn what I could learn, not
knowing a lot about what .I was up to, I landed in London 48 hours later with Hawkins and Phil Mosely, both of whom I had known, but had not known well up to that time.
I got to London and found that as far as the mission itself was concerned, although everybody had great respect for Hawkins, they felt that they didn't have anybody who really had Washington--their Washington--involved in the interest of the mission. Their Washington had been washed out because Hawkins was responsible to another part of Washington, the State Department. And at this stage, I think you can see clearly what not many people saw then, that there were two State Departments in Washington. One was the Foreign Economic Administration and the other was the State Department. We know this is a matter of history, but at the moment it wasn't very clear,
except in the State Department. And the struggle between what had been Henry Wallace [as former head of FEA] and Cordell Hull as a whole series of issues was strung out and was reflecting itself in this association within the Foreign Economic Administration, which pulled together lend lease, and the combined boards representing a whole series of civilian agencies. The Chief of Mission of Economic Affairs was the U.S. representative of all of these operations. But the operations that should have headed--by all organizational principles into the Ambassador, didn't. They headed into the Chief of Mission for Economic Affairs, and the Ambassador's position was just almost impossible to understand because this outfit was housed in his building but not reporting to him in any way.
WILSON: If I may interrupt again and stop your continuity. This is the most important place for the United States to carry on diplomatic relations; that is the London Embassy has to be the number one Embassy. "How," I suppose, rather than "why?" Is it merely Roosevelt's distaste for the striped-pants boys, his proclivity for getting around normal channels of administration, that brings about something like this? It comes up again and again.
MCKINZIE: Especially in such an important thing as economic affairs where the rebuilding or the re establishment of Great Britain is the keystone to the postwar health of the world.
BLAISDELL: Well, this is a very tough question. All one can do is indicate his own
hunches about it, rather than any, certainly any strong feelings that this is the way it was. My feeling has been that Roosevelt felt that although he and Winant were really quite close, and Winant never had any trouble picking up the telephone and talking to Roosevelt, that Winant somehow or other had one kind of a contribution to make in this U.S. British relationship, but that he couldn't make the relationship which was involved in getting a major economic operation going. That was the Harriman assignment, that if Winant had been able to do this it would have been done. It wasn't done. Why wasn't it done? Roosevelt didn't know so he let Harriman try it.
And so Harriman hopped over. He didn't even see Winant; he went to see Churchill. He established himself with an instinct for the jugular, so to speak,
which is one of his great qualities, at least to my judgment. One of my reasons for having great devotion to him is that he gets to the heart of the problem. So that he and Winant, well the president could put up with this because he talked directly to Winant and Winant had very great contributions to make. Winant had a feel for people down in the street, that when the bombs came over, and the fires were on, who was out there? Winant was there. And everybody knew it. He didn't move out of town, he stayed and took it.
Well, this was something that was worth so much that you can't put a value on it. When it came to his relationship with the military organization, with [Dwight D.] Eisenhower and the military people, Winant had a basic historic grasp of the American Civil War. He knew the literature, he knew the locale, he knew the.
whole series of military moves, the peninsular campaign, and the valley, the Shenandoah campaign, and the Gettysburg battle. In a sense he was a military expert in this field. And people like Eisenhower and the other military fellows respected and trusted him. This was a relationship that was bolstered by such humane and personal relationships as having a cottage out in the country where over the weekends the generals and the colonels would go out and chew the rag with Winant; and he had good cigars, and this helped. He loved good cigars. I mean it was at that level. But when it came to these other economic things somehow or other it took somebody else to do it.
When I landed I found that the mission chief had a personal relationship with a whole lot of people. And my problem, which I learned
the hard way after I got there, was simply to find what's going on, and who's responsible.
Fortunately, there was a wonderful executive officer there, named Winthrop Brown, who later went to the State Department. He was just about to return to Washington. Without him I would have been lost. But he knew the ropes. We got along, we got started and I managed to give a little authority to what he was going to do anyhow, and I began to learn and know the people.
Then, I was staying in an apartment near the Embassy with some friends, other fellows in the Embassy, and the guy that brought our tea in the morning, came in and pulled the curtains and said, "Mr. Blaisdell, poor Mr. Roosevelt is dead."
I had been there, I guess. Well, let's see, when was that, the 15th of April?
WILSON: The 11th of April.
BLAISDELL: The 11th of April? I had been there since the first of March, about six weeks. Well, you can imagine what this all meant to me at that particular point, because President Truman was to take over. None of us knew Truman except as chairman of the Truman Committee in Congress. What a wonderful job he had done there. If anybody had ever been modest as Vice President it certainly was Vice President Truman. What was this going to mean in terms of how we had to operate, in terms of putting things first that are important now. We had gotten through the Battle of the Bulge and all of that terrible business. Troops had moved east. The armies were closing in on Berlin and the bombers that had been coming over London every night no
longer came over. We did have a few V 2s drop in and that sort of thing. And came early May and V E Day was there, and everybody was glad that the European fighting was over; and Churchill came around to the Embassy and talked for a few minutes and ended up an hour by saying, "Now we will show the Japs what kind of people we are." So, we began to think of what's going to be next? This was the thing, that we are coming to, that's really important. I want you to get the background and the feeling that one got at that particular time.
So, V E Day! Where does lend lease, where does the combined boards, where does the UNRRA, where does all this fit into the new situation? What kind of a picture puzzle do you try to pull together out of this?
This was the kind of thing that was going
through my mind, and with my British opposite numbers in the various pieces of this particular puzzle. Interestingly enough, nowadays who remembers the combined boards? They weren't very important, except as symbols; but there were a lot of things that were done together that were important, and UNRRA was at a very interesting stage in disguising the picture of the aid operation. I think that I was not a loner on this. I think a great many people had the idea that, come the end of the war, UNRRA is going to be the important agency in Western Europe for the recovery of Western Europe.
MCKINZIE: Some Congressmen, however, had some other ideas. They wanted the relief phase to be very short. Perhaps they feared it internationalized the goals of the New Deal.
BLAISDELL: That's the kind of picture that appeared, as you say, in certain congressional circles; but I remember the establishment of UNRRA. I was at Atlantic City at the time things were set up, organized. I was interested in an international organization for an international job. I wanted to see what was going on, and to try to keep in touch with it although I had no official responsibility. But I was glad that I had watched it; and the idea that UNRRA was going to function purely as an outpost in Eastern Europe and in the Soviet Union, was something that never occurred to me. That we were to be taking over responsibilities in the Soviet Union and Eastern Europe, just had never occurred to me really.
I hadn't conceived this. This was to be a Western European operation and the lend-lease,
if you please, on its civilian side could very well merge with UNRRA and move right ahead with these programs. But whether Mr. Roosevelt ever had any ideas along this line or not, I don't know. Whether President Truman ever had any such ideas, I don't know. But it became clear, gradually, over these months between April and June, July, and indeed in the post Potsdam era, that the people who held the reins of power were the Army, and the Air Force, which was part of the Army at the time the Navy was busy in the Far East, their war. In this European development, the idea was that UNRRA's function was taking care of DPs. This was something that was new and the Army and other military, who had troops and whose business now was get them to Japan, or shortly thereafter get them home, looked
around for things that they could dump, and the thing that they could dump most easily on UNRRA was DP camps and repatriation of the Russians. And you came up against this terrific problem of what are you going to do with the Russians that don't want to be repatriated? What about the Eastern Europeans? Suppose they don't want to go back if it's going to be a Commie government that's going to run their country. If they didn't want to continue the revolution. But these were the questions. What about supplies?
So, you get into the relief stage here. The beginnings in Germany, Italy, another story in France, to say nothing about Great Britain. Great Britain was still looked upon as a source of supplies rather than a recipient, and there was a lot of the I think this was at the root of part of this question that
you were raising about the Congress and other people in the U.S. thinking, "Well, the British have stocked up quite a store on us and so they can do without." Only a lot of British felt the same way. "We are still the head of the Empire. The Empire is still important." Churchillian--although the British promptly dumped Churchill--the feeling still was that here is a powerful country instead of a country that had been bled white. The essential group that didn't know they had been bled were the British. They didn't know and the British leadership wasn't sensitive to this. So that this became a very, very strange feeling.
I can't remember very well my own feelings about this, except that I had the feeling that the British weren't nearly as potent as they thought they were. This I was sure of,
but when one has this kind of feelings he doesn't go around blurting about how the British have gone down the drain or anything like that; because, after all, you look at the British and they had done quite a job and they still had a lot that was useful to themselves as well as us.
MCKINZIE: In July, August, and September, of 1945 when UNRRA began to become something other than what it was anticipated it would become . . .
MCKINZIE: . . .did you have any sense of apprehension about the immediate future of Britain, since they had evidently been counting upon UNRRA and it obviously wasn't going to deliver? Did it seem to present any kind of immediate economic crisis?
BLAISDELL: No. No. The feeling I had about this though was very clear. V E Day in May came really quicker and more abruptly than was expected. I can't date it now, but it would have been after that, but not very long, and here the record should be checked pretty carefully. Will Clayton, who was Under Secretary of State for Economic Affairs, was in London trying to size things up, and the questions were pending in Washington at that moment. What about the future of lend lease? And Clayton, for whom I have very great respect, had come, and he had talked with Hawkins, and had talked with the Ambassador, and he had talked to people in the Embassy direct, and then he also talked with me, and our people in the Mission for Economic Affairs. And I can remember it as clearly as we three fellows are sitting here. The message that we had had
was that Byrnes' organization in Washington was considering whether lend-lease shouldn’t be terminated.
And that morning Clayton had come in, and we were talking about it and we said there could be nothing more tragic, that this mustn't happen. And Clayton said, in effect, "We must alert Washington on this. We must make it very clear how we feel," and I agreed.
So, we put through a long distance phone call. I don't remember to whom Clayton was talking, whether it was Stettinius or Byrnes or who it was. There probably is a record of it somewhere. Anyhow, Clayton sitting there by my desk and on my phone said, "We can be reasonably sure everything's going to be all right until I get home, because they have agreed they will not act on the cessation of lend lease until I get there, and I'm
leaving tomorrow morning."
The next morning we picked up the London Times to read that lend lease would be finished in 60 days.
WILSON: There are all kinds of problems about this, as you know. One school of thought has it that Leo Crowley gave President Truman very bad advice about this; that Crowley didn't really understand what the impact of the stoppage of lend lease would be. That he was most concerned about the political effects. Congress had been promised that lend lease would not go on past the end of the war and so forth. Is that how you understood it at the time?
MCKINZIE: It was in the law, I guess. The lend-lease law said that.
WILSON: Yes. Well, there were ways around that.
BLAISDELL: Well, at the time I have to confess that I didn't think in those terms at all. The one thing I could think in terms of was, "This is the most unbelievable thing I can imagine, because it shows a complete lack of understanding of the kind of problems we're facing."
But there's another important thing to note about this, that this was not limited to Washington. It was also true in London, in the British Government. They, of course, were shocked; but at that point I have to remember that it was only, oh, a very few weeks before this that I had been talking with various people in the British Treasury about what the U.S. was going to do: what about lend lease, what about the whole series of relationships that had to do with the new International Bank and the Monetary Fund and
how these things were going to be interrelated. The British official who was most responsible in this field (I don't remember whether he was within the Treasury or in the Foreign Office. It didn't make any difference, he was in the heart of the operation) was John Maynard Keynes. And I felt keenly enough about this to say, I think I had better talk with Keynes, which I had never done.
Again, the date of this I can't give you offhand. It would have to show in the record. But I arranged for a lunch with Keynes and one of his associates and one of mine, probably Win Brown (I've forgotten). But the one point that I felt very strongly about was that we were sort of at a point where you had to decide things, and that it was important that strong British representations be made in Washington about what we had been living with
in England. And I said to Keynes, in effect, "Now is the time to go to Washington and talk hard and tough about what it is that we've got to do. I've said this in Washington and now is the time as far as I'm concerned."
And he said, "No, I have planned to go in September, and this is what I expect to do."
Well, this must have been summer because it was prior to the talks that came up with Clayton, and prior to Clayton's phone call to Washington. I didn't put these things together too closely at that time because they were happening so fast. You do what you can as you see the situation at the moment, and I had sensed that it was important to get Keynes to Washington. I couldn't talk for the British. I could talk for us. But his feeling was, "No, he was going to do it when he got good and ready."
Well, he didn't go until September. In the meantime the end of lend lease had been announced. The history of that I'll have to tell you this. You can put it on the record or off, whichever you want, it's kind of amusing and you'll enjoy it.
I went back in October of '46, and the first thing I did when I got back to Washington for any period of time I had been back and forth all the time in between was to get my teeth fixed at the dentist. And the dentist was a great guy. He filled teeth with gold and he believed in the gold standard and these fool economists who wanted to get off the gold standard were silly, because all this meant was the price of gold went up. Anyhow, he'd get me there to fix my teeth and read me a lecture on the gold standard. He said, "Mr. Blaisdell, you know Lord Keynes?"
I said, "Yes, I know him."
"Well, you know, when he was here last time?"
And I said, "Yes, I know, I know very well."
He said, "Well, he has trouble with teeth and continuously failed to fix them. I looked at him and I [the dentist] said, 'Lord Keynes, I think we'd better take this tooth out. It should be extracted. It's causing you trouble.' And Keynes said, "No."
He said, "Well, Lord Keynes, really, it's infected. It's a bad abscess, and I would advise you to have it out."
And Keynes said, "No, please drain it, I will have it taken care of when I get back to London."
Said the dentist, "I told Lord Keynes, 'You let that tooth go and in six weeks you'll
be dead.' "
And, by golly, in six weeks he was dead. He died of heart failure.
As I say, this is one of the most peculiar things, the accidents in a lifetime that one runs into.
But the important thing there was that in this series of events, it seemed to me it was really very, very significant. We were dealing with a major set of problems that, with all integrity in Washington, were being dealt with without the kind of communication that should have been going on, really taking place; and it was really short circuited, at least in part, certainly, because of this double representation. It was complicated because much of the economic information was flowing through our office, and here was the State Department dealing on the political
level, through Winant and his position in the EAC with regard to Berlin and all of these things, which I had nothing to do with at all. Except for this what I regarded as one attempt to breach the gap by talking with Keynes the relationships were almost exclusively with the U.S. Treasury and the U.S. Treasury's representative in London. And this man was more independent of Winant than I was. And to this day, the representatives of the Treasury are an independent voice in that galaxy of representatives of the U.S. throughout the world. They handle their own business between the treasuries and the banks in the different parts of the world, and the Secretary of State has little to say about financial affairs.
MCKINZIE: That does have a considerable amount of foreign policy import.
BLAISDELL: It's unbelievable conduct of foreign policy. It was just as independent as the military was. And the operation and the relationship between the Treasury and the military services are among the most difficult and the most significant which rarely get pulled together. The most tragic case of this kind that I experienced was the handling of exchange rates and the "soft" and