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Michael H. Cardozo Oral History Interview

Oral History Interview with
Michael H. Cardozo

With United States Lend-Lease and Foreign Economic Administration, 1942-45; Lend-Lease Representative in Turkey, 1943-44; with Office of Legal Adviser, Department of State, 1945-52; Assistant Legal Adviser for Economic Affairs, 1950-52.

Washington, D.C.
May 29, 1975
by Richard D. McKinzie

[Notices and Restrictions | Interview Transcript | List of Subjects Discussed]

 


Notice
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. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

RESTRICTIONS
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 It may not be published in full except by permission of the Harry S. Truman Library.

Opened October, 1978
Harry S. Truman Library
Independence, Missouri

 

[Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed]

 



Oral History Interview with
Michael H. Cardozo

 

Washington, D.C.
May 29, 1975
by Richard D. McKinzie

[1]

MCKINZIE: Mr. Cardozo, I think many historians, as they look back to people who served in Government during and after World War II, ask, "Why'd you go into that in the first place?" When you were a young man preparing for law did you anticipate a career in Government service?

CARDOZO: Well, I didn't when I was in college or law school. I didn't really know what I was

[2]

going to do, but I assumed I was going to be in a law firm, probably in Wall Street. That's where I went after I left law school. I didn't take a course in international law at law school or anywhere else, so I didn't necessarily prepare for a Government career. It's true, though, that the atmosphere at the Yale Law School in those days was very likely to encourage somebody to get into Government. William [Orville] Douglas, Thurman [Wesley] Arnold, Charles [Edward] Clark and Walton [Hale] Hamilton were all people who, at one time or another, had a lot to do with Government. So, it wasn't surprising that a lot of us did go into it. I got into Government because one of my classmates at the Yale Law School called me one day and said that he had been made Special Counsel to an investigation by the

[3]

SEC [Securities and Exchange Commission] and wanted to build up a staff. He asked if I would come down for a few months to help with that investigation. It was the Temporary National Economic Committee's investigation of life insurance, and Gerhardt Gesell was the Special Counsel. So, I got leave of absence from my firm to do that, and that particular job, instead of lasting a couple of months, lasted 15 months or so. Then the New Deal was in full activity here in Washington, and other jobs showed up for all of us. I was invited to go to the Tax Division of the Justice Department, which was a very interesting thing to do. I was, for two years, arguing cases on appeal in various U.S. Courts of Appeal and still on leave from the New York firm. It was while I was in

[4]

that job that the war started, and at that point I actually got into international affairs. I went upstairs to the Justice Department, to the office of Oscar Cox, whom I knew personally. He was then General Counsel of Lend-Lease, as well as an officer of the Justice Department, and I asked what I could do to help with the war effort. He suggested going into lend-lease. For a couple of months I worked in what was then the War Department, on the relocation of the Japanese and the Italian and German restrictions. Then I went into lend-lease. That's how it came about: instead of being here for two or three months, I was here for 13 years.

MCKINZIE: How did one get assigned to a place like Turkey? Was it just a matter of doling it out or did you have some particular

[5]

expertise of a legal or other nature?

CARDOZO: This was a remarkable quality of Oscar Cox, again. I went to the Lend-Lease Administration, in the Office of the General Counsel. The Lend-Lease Administration was a remarkable conception. Oscar Cox wrote the bill and had the idea as to how it should be run. The Office of Lend-Lease Administration was a small office where the ideas came and the central planning for the thing was handled. The actual carrying out of lend-lease was done in other agencies: Treasury Procurement, military procurement agencies, Agriculture; those organizations actually did the buying and transferring of all articles. Lend-lease was just the office where the requests came from the other countries; where they were screened, decisions were made,

[6]

and then the action was parceled out. And it was an interesting, unusual legal staff. Not only was Oscar Cox interesting in this respect, but he also brought down the Dean of the Cornell Law School. Then we had Myres [Smith] McDougal, who had become famous in international law; Lloyd Cutler; Joe Rauh; and others that were in and out of the office. Just before I went there, Frank Kaufman (another of the young lawyers from various backgrounds; many of them were from Yale Law School) had been sent to Turkey to set up a system of screening the needs of the Turks. Now, one might ask why a lawyer? Well, it was a tricky and novel job that called for an incredible kind of mediation between the State Department, military people, and the Lend-Lease Administration. Somebody was needed who knew how government operated and who could

[7]

get along with people like the Turks, in order to get things going there despite the doubts of all kinds of people. He had to work closely with the British who had dominated the area as far as military aid was concerned. And Oscar would say to one of his staff, "How about going to Turkey?" That’s what he said to Frank Kaufman, and he said the same thing to Lloyd Cutler about North Africa. Cutler went to be the intermediary between General Patton and the civilian people furnishing lend-lease aid in North Africa. So, Frank Kaufman, who is now a judge in Baltimore, had been there for about a year, had already gone to Turkey, and his time to return had come. It was not supposed to be an indefinite assignment, and anyway, in wartime people were restless and wanted to get into

[8]

different things, and so forth. So, they wanted someone to take his place, and I was the next one in line, sort of. Along with a number of the legal staff of lend-lease, I went out to take one of these foreign positions. There were others, Thomas Washington went to Iran and Philip Kidd and others went to various places.

MCKINZIE: Did you have a chance to talk with Mr. Kaufman before you went?

CARDOZO: No, I didn't before I went. He was there though; we were there together for several weeks and I learned some of the ropes from him.

MCKINZIE: So, before you went, you weren't in the position to judge what kind of relationship there would be between people in the

[9]

State Department and people (such as yourself) representing lend-lease, people representing the Treasury, or people representing other agencies of U.S. Government?

CARDOZO: No, it was terra incognita as far as Washington was concerned. Only the people out in the field knew what it was. Frank Kaufman knew the problems, but he was not in a position to send messages because the State Department would probably be involved and would see them anyway.

So, nothing really had come back about the diplomatic problems of relations between the Lend-Lease Administration and the State Department. Of course, you later learn, after you've been in Government long enough, that that kind of inter-departmental relationship is normal. Being able to make Government

[10]

work means that somebody has to "feel" the problem.

I think that what I learned in my first year at lend-lease was to become an expert in how to get Government money spent fast and effectively. This is what all the lend-lease staff learned to do. That was why when I came back and the postwar foreign aid programs came about, I was brought into that. I theoretically knew how to set up a system that would get billions of dollars spent for the Marshall plan. So, my experience in lend-lease was very important to that and also to the intermediate programs.

MCKINZIE: As a man who was, in a sense, walking tightrope in Turkey, you had a number of clients; the Turks, the State Department, your own agency. Did you at all think about what

[11]

was going to happen to Turkey come the end of the war?

CARDOZO: Well, not very much. We had picked up from President Roosevelt the idea that we were now "Mr. Win the War;" that was our job. Everything was aimed at that. The British in Turkey suspected the Americans of planning a postwar situation where, because of our lend-lease shipments during the war, we would set up a dependence of the Turks on American goods. They'd always dealt with the British before and the British were terribly anxious not to let DuPont chemicals take the place of Imperial Chemicals Industries. So, in the question of deciding where the Turks would fill their needs for various kinds of things (such as tires -- Dunlop tires or Goodyear tires) there was a little bit of jockeying over the

[12]

future, a concern for the future position of the trading nations. But on our side we were very pure. In fact, we got the rare praise from the British of being idealists. Frank Kaufman and I were characterized as the most idealistic people they had ever encountered, by the British. And idealism meant that we were there to do the job honestly and not to try to do anything that would just set things up for the future. I think that was addressed to even the commercial attaché in our Embassy, who wasn't able to do his normal kind of thing very much because he was concentrating on the war.

Now, on the other hand, of course, the lend-lease agreement contemplated that we would not ask for a repayment for debts that would cause a postwar situation that would

[13]

be impossible for the country to fulfill. The famous Fifth Report to Congress on lend-lease was released, then withdrawn and rewritten. At first it had had the words in it, "Victory and a sure peace are the only coin in which we expect to be repaid." This caused some troubles back here, because some people thought that we should get paid in more solid coin than that for some of the things. They didn't want to commit us to not getting paid anything for the lend-lease aid. So, they withdrew that first condition of the Fifth Report and put out the other one with those two sentences taken out.

Nonetheless, these reports to Congress on lend-lease contained all these agreements, the so-called "lend-lease agreements." They had an Article 7 which had been drafted by

[14]

Eugene Rostow on the lend-lease legal staff. At the time he also worked for Acheson on lend-lease matters, when Acheson was in the Treasury Department. That was a remarkable section of the agreement, in which it said that "the benefit to the United States shall be such that the President deems appropriate.." I remember the Turks had quite a time in translating the words "benefit to the United States." "Does it mean payment?" "No, it doesn't mean payment." "What does it mean?" "Well, it means the things that make us happy." That was in all the lend-lease agreements.

So, we were looking for a future when the lend lease settlements, which involved billions of dollars, were to be used in a way that would not be an economic burden on the other

[15]

country. The lend-lease settlements of '45 and '46 were models of how to settle what could be called a debt without burdening the rest of the world, unlike the World War I days. In that sense, we were looking into the future, but not much.

MCKINZIE: In speaking with people who were in the economic sections of the State Department and in reading a lot of the recently written literature about World War II diplomacy, I can't help but have the impression that the economists, at least, had a particular hope for the postwar world. The kind of economists who came in during World War II believed in, certainly, economic integration in the postwar period, if not political integration. Was there a kind of mind set of the lawyers who came in? You mentioned that a number of

[16]

people came in from Yale Law School. Would they have been in this internationalist pre-disposition?

CARDOZO: Well, it was not predisposition, but I'm sure that all of us who felt that we came in with the New Deal did have a free trade approach to it rather than protectionists; very much so. This became very much the policy of the whole State Department. Willard Thorp was the Assistant Secretary for Economic Affairs and Acheson was Secretary. As a matter of fact, all of them had that attitude, and the lawyers reflected it. I don't think that any of the lawyers had any personal predilection in favor of trade restrictions -- quite the opposite. As a matter of fact, lawyers who came in through a different route -- such as Walter Surrey and Seymour Rubin (who came in through

[17]

the economic warfare part of the war effort), who were both my predecessors as Assistant Legal Advisor for Economic Affairs -- were architects of free trade. Rubin went through the whole Havana agreement period trying to create a system of free trade. This period led to the gap between different types of trade later on. They were typical of the lawyers who were in the Legal Advisers office at that time. But their clients were their mentors; people like Willard Thorp, Charles Kindleberger, Isaiah Prank, Raymond Vernon and so on. Of course, today, Stanley Metzger is the lawyer who has written a great many things about trade, all carrying on this tradition of free trade. Vernon is another good example of an economist in the State Department who created this atmosphere. And the lawyers learned from them.

[18]

MCKINZIE: I note that when lend-lease was beginning to wind down, you were then working in the FEA [Foreign Economic Administration].

CARDOZO: Yes, the FEA was created while I was in Turkey. I was a lawyer and my job was to approve lend-lease requisitions. As a matter of fact, the day that lend-lease shipments to Russia stopped was the day when I had a phone call from somebody in the Treasury Department who said to me, "Do you think we should stop these shipments or not?"

I said, "I think it's a wise thing to stop the shipments now and find out later whether you were right or wrong." And they stopped as a result of that conversation. Nobody quite knew that what was happening, was Congress was refusing the money to carry on shipments to Russia. At a certain