Numbers appearing in square brackets (ex. ) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
Opened July, 1979
Oral History Interview with
July 16, 1974
Richard D. McKinzie
MCKINZIE: General Clay, in December, 1944, you joined the organization of James F. Byrnes, the Office of War Mobilization and Reconversion. Do you recall how you happened to get such an assignment?
CLAY: I was sent over to France to help General [Dwight D.] Eisenhower break up the blockade, if you want to call it that, at the ports. We were unloading equipment from ships much faster than we could move it forward, and the result was that we had a huge build-up of supplies
which couldn't be used by anybody. While I was assigned to Cherbourg, in command of all of the port area, General Eisenhower found out that his supply of heavy ammunition was not enough to meet the new demands that were being placed on our heavy artillery. Our soldiers had found out that by using heavy artillery we saved lives. With the greater mobility of the heavy artillery of World War II we were able to move it faster, supply it with ammunition faster, and fire it at a rate that had never been heard of before.
He felt that I was, because of my experience in logistics, the one that could convince the War Department of this need. He sent me back home to do it on the basis of that I would return to my overseas assignment.
When I got back and made the report I found that, by what we called "squeezing the pipeline," we could meet his immediate needs, but that we would have to cut back at the
production. This task fell upon Mr. Byrnes, primarily. It was his responsibility and he immediately made a condition that I would come over as his deputy to help get that program going. I was to serve as his deputy for the whole program of war mobilization.
I had no desire for that job at all; this was not a job for an officer in wartime. I had no choice, though, and General [George C.] Marshall very quickly rejected my plea. I wound up as Mr. Byrnes' deputy.
During the period that I was with OWMR I became very intimately acquainted with him. We became very close friends. As a matter of fact, I went to Columbia just not long ago to deliver his funeral eulogy in the state capital.
I held him in great respect and I was always very sorry of the difficulties that came between Mr. Brynes and President Truman, I had great respect for President Truman too. I was
closer to Justice Byrnes than I was to President Truman, but I'm a great admirer of President Truman and have a tremendous respect for his judgment, particularly in the foreign relations field.
MCKINZIE: When you were with OWMR, solving this wartime problem, were you aware that there were lots of people in OWMR then who were planning for the peace? They had the idea that the kind of planned and ordered economy that had existed during the war was going to be necessary for some time on into the peacetime period.
CLAY: I knew the people that believed that we have to have all of this planning for reconversion. I didn't believe them, and I perhaps persuaded Justice Byrnes that we had enough built-up demand in this country that this reconversion problem was not going to be anywhere nearly the disastrous problem that was being predicted.
I think I was proven right on that.
MCKINZIE: I understand from reading Mr. Murphy's book and some other things, that you weren't too happy at first when you were appointed as deputy director of the office.
CLAY: I think that President Truman would have understood that, because he did his very best to get into active military service. Here I was, a man who had spent my entire life in the Army. The major war of all times comes along, and instead of being a soldier, I'm on a civilian job the whole time. I would have given my eyeteeth to have commanded a division and had an opportunity in combat. Both my job in production in the Army and with Justice Byrnes ruled that out. When I went to Germany, it ruled out any possibility that I could do it in the war against Japan.
MCKINZIE: When you first went you were, technically
at least, under General [Joseph T.] McNarney. I understand that General McNarney had little to do with the actual operations of this.
CLAY: I was technically under General Eisenhower at first. He stayed until October or November, and then he was succeeded by General McNarney. I don't think there was any difference in the relationship between General Eisenhower and myself and between McNarney and myself, inasfar as the official relations were concerned. They were both the representatives on the Control Council and they would come to Berlin periodically. I would brief them, sit with them and help them with that work. Other than that they gave me a very broad delegation of authority in military government.
There is one big difference. General Eisenhower was one of the top two or three who was publicity-minded and regarded by the public as an ideal. Whatever happened in Germany they
attributed to General Eisenhower. Poor General McNarney didn't have that kind of a chance. The responsibility, then, was pretty much delegated to me. Never was General McNarney not informed and fully advised. He kept informed on what was going on.
MCKINZIE: Do you have any thoughts after this passage of time as to what went wrong with the European Advisory Commission? Should it have existed in the first place?
CLAY: It was created in the first place at a period when some of the Allies, and particularly the British, felt that there was a real prospect that the Russians would meet us on the English Channel; that the subdivision of Germany and establishing of boundaries for withdrawal would in effect save Western Europe from being run over by the Russians. Mr. [Winston] Churchill had grave misgivings about the English Channel. He wanted to come up through the Mediterranean
and that soft underbelly. The result was that he was very desirous of creating these boundaries. It is interesting that in '44 before the European Commission was ever formed, the British already had maps showing the boundary line between East and West Germany.
At that stage we were also very much influenced by the fact that we felt we would still be fighting a war against Japan. We might have a very real battle to land in and conquer Japan. We didn't realize that the bombing was going to make the Japanese quit. We felt that they would stay until the last Jap.
For this reason, we didn't want to get too involved in Europe. I think we were willing to settle for much less than we would have if it hadn't been for this particular factor.
I think President Roosevelt really felt that he knew how to get along with Premier [Joseph] Stalin. I am sure that at Potsdam
President Truman very definitely made up his mind that there wasn't any hope for a real agreement with Stalin.
MCKINZIE: Do you think that if Ambassador [John G.] Winant had pushed a little harder in the beginning, there could have been a more solid arrangement?
CLAY: I think it would have been helpful if there had been a specific arrangement in writing as to which roads and railroads going into Berlin were under the control of the Allies, and which were under the control of the Russians. But, remember this, when the war ended and we were sitting over there with the greatest army that had ever been seen, nobody was concerned about anybody blocking us on roads and railroads.
We went through two things: one, we never did have to move these troops to Japan. The Japs surrendered and then the demand for
bringing the troops home was great. Within a relatively short period of time our military forces had deteriorated until they were nothing but young high school boys not wanting to be there. It was pretty sad. It was under these conditions that I am sure the Russians made up their mind that it was time to push; that our actions didn't indicate any desire on our part to stay in Europe.
MCKINZIE: With all due honor to some very capable people who served under you in Germany, how did you assess the quality of the Armed Forces in 1946, 1947, and 1948? There are those people who say that the Civil Affairs Branch particularly was .
CLAY: This depends on your definition. We certainly went in there with a great number of people who were either members of the Communist party or tended in that direction. This was not the
place nor the time for them. It did create some problems that took a long time to correct. Many of these men had come to us on Treasury teams. We ran into a tremendous opposition on the part of the Treasury if we attempted to change or remove any of these people.
How serious it was in the long run, I don't know. I think it was an inevitable thing that we had to go through. After all, we had spent a couple of years convincing everybody what a wonderful thing it was that we and the Russians were fighting together. How, overnight, could we turn around and convince people that they were a threat to our national security? It was a very difficult thing to do. If the Russians hadn't taken the steps they did, I don't know that we would have done it at all. If they had been more subtle they might indeed have gained Western Europe before we realized what was happening.
MCKINZIE: When you say if they had been more subtle, do you mean if they had conducted themselves in some way other than they did in the Allied Control Council meetings?
CLAY: Not only that, but also the way they conducted themselves in Eastern Europe. We had these treaties pushed through and they were a great achievement. We wanted the treaties at an early date. The terms of the treaties called for coalition governments; governments from those exiles that had gone to the West and those exiles that had gone to Russia. After a very suitable period of time it would have called for constitutional conventions, elections, and so forth. The Russians moved in almost over night to take over those countries and governments. If they had done it over a two or three year period, I don't think we would have realized it was happening until it was too late.
MCKINZIE: While all that was going on you were faced with the problem of denazification, and keeping alive a population that was on the verge of starvation, and numerous other problems.
CLAY: We had also a change of administration. The people who had had the greatest influence and developed the occupational powers went out, and Mr. Truman's administration came in with the people that he brought to run the Government. I don't think that the so-called "destroy Germany" policy was ever one that President Truman personally believed in. He had nothing to do with its creation and I don't think he ever believed in it.
On the food proposition he sent former President [Herbert] Hoover over to look at the whole European situation. Mr. Hoover came back with the recommendations that we supply food for Western Europe, including West Germany, and Mr. Truman backed him completely. If it
hadn't been for this we would have had mass starvation. Mr. Truman didn't hesitate one minute in backing Hoover, and I think it was a very wise decision on his part to send him. Not only was Hoover a great expert in this field, after his actions following World War I, but he also had the respect of everybody in the country and was a Republican. This got Republican support for it.
MCKINZIE: General Eisenhower said that he wanted the Army to get out of Germany as soon as possible, yet no one in the State Department wanted in evidently. Would you talk on that point?
CLAY: I urged General Eisenhower to get out as quickly as he could. I didn't see how he could possibly add to his stature by staying there as Military Governor. I wanted him to get out and I'm glad he did; I think that this was fundamental. However, there wasn't anybody of requisite size
that would volunteer to take the job or would take it, except an Army officer whom you could tell to take it. There wasn't anybody in the State Department that wanted the job. Four years later, when there was reasonable order and the economy was back, they found civilian administrators that were perfectly willing to take it. They got one of the finest. when they got Jack McCloy to go. He had turned it down when they first wanted him to go over, before I went.
MCKINZIE: It also makes it difficult, doesn't it, in matters of policy setting, because you had JCS-1067, which was as I understand it, a compromise between the War Department and the Department of State on how...
CLAY: JCS-1067 would have been extremely difficult to operate under. If you followed it literally you couldn't have done anything to restore the German economy. If you couldn't restore the
German economy you could never hope to get paid for the food that they had to have. By virtue of these sort of things it was modified constantly; not officially, but by allowing this deviation and that deviation, et cetera. We began to slowly wipe out JCS-1067. When we were ordered to put in a currency reform this was in direct controvention of a provision of JCS-1067 that prohibited us from doing anything to improve the German economy. It was an unworkable policy and it wasn't changed just without any discussion or anything by those of us who were in Germany. It was done by gradual changes in its provision and changes of cablegrams, conferences, and so on.
MCKINZIE: You must have had some backstopping in Washington to be able to do that.
CLAY: At that time I happened to have been very close to Mr. Byrnes, having worked for him. I could
go to Mr. Byrnes (he was very close to the President), and he would go to the President. We'd get this thing resolved in short order.
MCKINZIE: Did you discuss with Mr. Byrnes the deteriorating situation with the Soviets before he made his very famous speech, now called the Stuttgart speech, in September of 1946?
CLAY: I urged him in the first place to come to Stuttgart. I had written him a letter about my own views of the situation and it was that letter which he used as the basis for this speech. He visited me in Berlin and we went over together. He had that passage in there, "as long as any other foreign country's troops are in Germany we're going to be there," which was the most important part of the speech. He tried all of that morning to get hold of the President by telephone to get his approval, and then left word that he was going to put
this in if he didn't hear anything to the contrary. I'm sure that whatever he said there he had assurance that President Truman approved.
At that time their relationships were very close.
MCKINZIE: Had you come to the conclusion that the only way to serve U.S. interest was to take a much firmer stand against the Soviets?
CLAY: Yes. I learned that from the way they were removing equipment, without any kind of accounting, from East Germany where they were in occupation, and still putting in their claims for reparations from West Germany. They were not abiding by the general rules that all of this would be done by the Reparations Commission, representing all of the countries that had suffered damage from Germany. This was the beginning of my concern. I also realized we couldn't possibly work together on the question of currency reform. They wouldn't even consider
it unless there were two sets of plates for the same currency, one that they would control, and one that the other Allies would control. We had given them the military currency plates, and they just glutted the country with it.
MCKINZIE: To what extent did you and your people try to get East-West trade going?
CLAY: We tried very hard to get East-West trade going. The initial effort was to get a common utilization of the food supplies, because East Germany was a surplus food production area.
When we couldn't get any food out of East Germany, it was quite obvious that there was nothing else to divide. I mean that we would have been foolish to open up trade in the things that they wanted when we couldn't get out of them the food that we had to have. We couldn't get any willingness on their part to share in the food production of East Germany. I think this was
another one of the fundamentals which led us to believe that we couldn't possibly get together.
At Potsdam I think President Truman began to realize that it was no longer any use of sitting there and negotiating; they weren't getting anywhere. There wasn't any real way of working out an agreement with Stalin, and the Potsdam Conference resulted in really nothing.
MCKINZIE: In the winter of 1946-47, you were under a directive that the German standard of living couldn't be any higher than that of France, in particular. Do you recall when you began to think in terms of rebuilding Germany as a part of solving a larger problem?
CLAY: In 1946 we got authority, as we brought food into Germany, to sell it to the Germans for German marks. We could use this money as we saw fit; for our own support, but also to aid and help the German economy. When we put
in the currency reform in 1948, I saw a Germany where the people were working; which was going to come back quicker than the rest of Western Europe. I, of course, saw that that would never be allowed to happen.
My interest in having a revived Western Europe came from my realization that we could not have an economic recovery in Germany unless it was done as a part of all of Western Europe. It was about this time that the congressional committee came over studying the Marshall plan, the Herter Committee. We preached this to this committee all the time. As a matter of fact, one of the members of that committee, who spent a whole month in Germany at that time, was Everett Dirksen. He came back a very strong supporter of an economic program that would apply to all of Western Europe, including West Germany.
I would say that this came to me, in a
reverse sense, in '46. I began to realize that we couldn't develop Germany faster than Western Europe. On the other hand, if we left an economic vacuum in Germany, Western Europe could never come back.
MCKINZIE: When they finally did get around to establishing a Marshall plan and developing the OECD, they had to come up with country requirements. At one point you argued that what they really were doing was trying to rebuild other nations first, at Germany's expense.
CLAY: I put up quite an argument, because the initial reaction of the Americans in charge of the Marshall plan was that they were going to say what Germany could get. Germany was not going to be allowed to express a voice. My contention was that we as military government had to speak as a government, and eventually transfer that right to the Germans.
As a matter of fact, as the first European committees were set up, we as military government became members. They wouldn't let Germans become members, but we went down with our German experts with our own people actually being the delegates.
MCKINZIE: It must have put you in an unusual situations since you have a client which is the German people. It raises the immediate question of conflict of interest or dual loyalty.
CLAY: I don't think so. It was not too long after that before Europe began to realize that this economic vacuum would have destroyed any hopes of real economic recovery in all of West Europe. You couldn't have the most productive area of Europe out of production and still expect to have prosperity.
MCKINZIE: The Marshall plan, of course, was designed to bring about a certain amount of European
integration. Were you personally a strong believer in an integrated Europe, economically if not politically?
CLAY: I was a strong believer in both a political and economical federation, a setting up of such things as the payments committee and so forth. They could take into account the differences in exchange and arrange the transfer of funds and all that sort of thing. All of these things were far short of integration, but they provided a sufficient amount of cooperation to prevent conflicts bred in nationalism and competition. Those might have greatly reduced the effectiveness of the Marshall plan in its early stages.
It didn't take the experts on these various and sundry committees too long to be talking directly to their German opposites. Within a very short order they were, even though they didn't recognize them as delegates, talking back and forth with each other. These Germans
were pretty expert. They were high quality men.
MCKINZIE: One of the initial problems you faced was that you had to do something with all of those people who were members of the Nazi party.
CLAY: We were in a difficult position on this, because with the exception of the few notorious leaders, neither the British nor the French cared a thing about denazification. We were pursuing a policy in our zone that was not being pursued anywhere else.
When we joined together into a single economic unit, I couldn't accept some of the officials that had been in their zones and had done very good work. They had been members of the party, although they had not been very active. That was one thing of which our Government was adamant. We never were able to make Herman Epps the financial minister, as we would
have. We were able finally to put him in charge of Reconstruction Finance Corporation, which was somewhat outside of Government.
MCKINZIE: When you say our Government was adamant are you speaking about both the Defense Department and the State Department?
CLAY: I don't know whether it ever really got beyond the Defense Department or not. I didn't push it too far, because I wasn't too anxious to use them myself.
MCKINZIE: A lot of people are studying what the State Department had done in the way of postwar planning. There were plans devised by an outfit under Leo Pasvolsky to rebuild Germany and slowly integrate it into the family of nations. The Treasury Department had its own ideas about how reform should be pursued, and so did the Commerce Department on some matters. The Army was in a position of having to carry out these plans. The
question is, bluntly, whose show was it?
CLAY: I think that it was something that I had to grab and do. I couldn't have done it if I had not had the very full support of Judge [Robert] Patterson and [Kenneth] Royall in the Defense Department, of Byrnes and General Marshall in the State Department, and of the President. We were initiating the things that had to be done, but without Washington approving and supporting them we would not have been able to do them.
MCKINZIE: In 1970 there was, at the Truman Library, a conference of scholars on the subject of "Administration of Occupied Areas." One of the young scholars who was there made this comment, and I wonder if I could get you to react to it. He said, "I think that Generals Clay and MacArthur influenced the course of occupation policy and the effects of the occupation. Sometimes in my research on Germany I used to wonder what might
have happened if not a man like General Clay had been in charge, but someone like J. Edgar Hoover or General Hodge. Would that significantly have changed things?"
He goes on to say in this comment, "I frequently thought that if somebody else but a man of the talent of Clay had been in charge, the result might have been disastrous."
CLAY: I think I had to take it and do it. That was the case. Nobody had had any experience in this kind of a job. After all, we hadn't had this kind of occupation of a major country. We may have had it back in the Spanish-American War and the Philippines, but they weren't really an enemy country. We had theoretically given them their liberation. They didn't think they were liberated, but we thought they had been liberated.
In Germany we had no background, because after World War I, there was always a German government; occupying troops were there for
We had a very unusual situation; even more so than Japan. Japan did, at least theoretically, still have the Emperor and some semblance of government. We had nothing. We had to improvise, we had to make decisions on the spot. I think this is the way it should have been.
Let me put it another way. I appreciate the references there all right, but the fact remains; what would have happened if somebody had gone in there and messed it up? Mr. Byrnes, General Marshall, and Mr. Truman wouldn't have let it happen too long. They would have had them out of there and somebody else in.
MCKINZIE: Did you feel reluctant about having to accommodate or squelch the people who offered you all of these conflicting theories?
CLAY: I didn't pay very much attention to them. They were always coming in, but as suggestions;
they weren't coming in as orders. At that stage of the game I took my orders from Mr. Royall, Mr. Byrnes, General Marshall, and of course, the President. When we got to the final reconstruction of Germany it was General Marshall that gave me the instructions in London, and also coming back from Moscow as he came through Berlin. He told me to get busy on the economic reconstruction of Germany.
He also said we should push our bizonal effort. We had been working on a joint effort with the British. That fall I met with General [Sir Brian] Robertson, my British opposite, at Hugh Douglas' house where he was the Ambassador. General Marshall and Ernie [Ernest] Bevin were present, and we drew up a letter right then and there which gave us the authority to go ahead with the unification of the British and American zones.
You know, so many of these changes were done
by meetings like that, that when you read history there's no orders out, and it looks like this was done without any discussion or reason. But these were all reasonable men and I had too much respect for the people that I worked for to leave them out on a limb. I think they had enough confidence in me that they were willing to listen to my recommendations, and almost invariably approved them.
MCKINZIE: Mr. Truman got vitally interested in German affairs at the time of the blockade. How important, do you think, was the evolution of Germany to the President?
CLAY: That's very difficult for me to answer. I'm sure though that he recognized the necessity of a revived Western Germany if there was to be a revived Western Europe.
MCKINZIE: Did you have contact with President Truman prior to the Berlin...
CLAY: I saw him several times at Potsdam in the early stages. I was one of those who wanted Mr. Byrnes to be sure that the President also agreed on the holding of troops in Germany. My actual contacts with him were indirect. I know on several occasions when my cable authorities would say that this had been talked over at a Cabinet meeting and had received approval. They didn't say that the President approved this, but it had been brought up and discussed at a Cabinet meeting and was okay. This was like on the bringing of food over in the Division of Food.
MCKINZIE: One thing that I think no Army officer, maybe no diplomat, can really be prepared for is the problem of Congress and how it will affect policy. Before 1948 how did you handle the dignitaries, the junketing Congressmen, etc?
CLAY: I paid a great deal of attention to them; we had a great many of them that visited Germany. I always arranged to house them, put them up properly, give them all of the facilities they needed, and let them go anywhere they wanted to go. I also was completely available to them whether it was to have dinner or lunch, or meet in the office. I knew a good many Congressmen because I had sat at the desk in the chief engineer's office for a good many years where I had had contact with a good many Congressmen. By and large, I think our relations with the Congress were very good.
Of course, Senator [Tom] Connally and Senator [Arthur] Vandenberg came over with Secretary Byrnes when he made the Stuttgart speech. They stayed in Germany, spent some time there, and were very helpful in supporting German policy. I don't think they were very helpful in creating policy or proper relationships between the Secretary
and the President. I think they were part of the problem. They kept insisting that the Secretary exercise more personal authority. They were really thinking of the Secretary as being a part of the Congress rather than a part of the executive branch.
MCKINZIE: When Congressman [Christian] Herter's committee on foreign aid came over, was your approach to talk up or did you let them ask the questions and simply respond?
CLAY: That's a very difficult thing to answer because it depended much on who the Congressman was and what his capacity was. Some Congressmen came over with chips on their shoulders (not many, but some), and those you couldn't treat the same way. But men like [Francis] Case, Everett Dirksen, and Herter himself were highly intelligent people. They were looking for the right answer and you
really told them what you thought, not being either tough or otherwise.
When they went down and looked at the idle German plants, the condition of the housing of the people, they came to a pretty quick realization that we were creating a very dangerous vacuum.
MCKINZIE: Did you think that the refugee problem was contributing to that vacuum?
CLAY: I felt that the refuge problem made it very much more difficult and added to our own responsibilities. We had allowed these refugees to be kicked out of countries where they had been for years. I'm talking about the German refugees; the Swabians from Hungary and the Sudetens; a million and a half, two million people. On the other hand, I thought it was a good thing for Germany; they were going to need them. They had suffered such huge losses
and manpower during the war that they really, to get anything going for them, needed this additional stimulus. That's turned out to be the case. I could remember telling the people in our zone that they had to take care of these people. They were horrified, with their load already as heavy as it was, that they. had this to do. I told them, "You've got no choice, you've got it to do. One day you'll be glad you did it."
MCKINZIE: Was it hard for them at the time to find the housing and that kind of thing?
CLAY: I think it was almost impossible; on food and everything else.
MCKINZIE: While the main concern politically was to remove the influence of Naziism, there was a problem with the rise of some Marxism. What kinds of instructions did you give your people regarding that?
CLAY: At that time we didn't give them any because the Communist party was not outlawed in the United States at that time, and I wasn't about to outlaw something in Germany that wasn't outlawed at home. However, the labor unions, which had been taken over by Communist leaders and were in danger of becoming Communist, were handled in a different manner. We got Joe Keenan over there from AF of L with several of the really good organizers from American labor. We put them down there to work and in very short order they had the things moving. In a year or two they had elections. The Communists were thrown out and Social Democrats elected, and there were no trade union problems from then on.
Of course, after the Berlin blockade there wasn't any problem anyway; hardly anyone dared to be a Communist after that. The labor people, our own labor people, did a hell of a good job for us.
MCKINZIE: Could you talk about your conversations and contact with President Truman at the time of the Berlin blockade?
CLAY: My first contacts with him were indirect; primarily through the Department and through Bob [Robert] Lovett, who was then the Under Secretary of State. My first direct contact with him was when I came back to talk about the airlift and to secure his approval on it