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Michael J. Dux Oral History Interview

 

Oral History Interview with
Michael J. Dux

Economist, Office Financial and Developmental Affairs also Office German Affairs, State Department, 1946-55; member, United States Delegation, Far Eastern Commission, Japan, 1947-49; joined United States Foreign Service, 1955; consul, Madras, India, 1955-57, economic officer, New Delhi, India, 1957-59; with trade agreements division of the State Department, 1960-64, assistant chief division, 1964; first secretary of Embassy, Bonn, Germany, 1964-67; consul, Duesseldorf, Germany, 1967-70; deputy permanent representative of the United States to ECAFE, Bangkok, Thailand, 1970-.

Washington, D.C.
July 14, 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, hard copy 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 It may not be published in full except by permission of the Harry S. Truman Library.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 J. Dux

 

Washington, D.C.
July 14, 1975
by Richard D. McKinzie

[1]

MCKINZIE: Mr. Dux, I'd like to begin by asking you to talk about what prompted you to go into Government service.

DUX: Well, this is a decision which I made fairly early in my schooling, in college. After a false start in a pre-engineering course and a year of calculus, I decided that wasn't for me. Having lived abroad a few years, I was naturally interested in foreign affairs and decided to concentrate on that. So I studied political

[2]

science, with a good deal of economics thrown in, and then applied for a job in the State Department and started here, actually, in late '41. I graduated in June, '41, and started in the State Department in December. And a few months later I was drafted in the Army, spent three and a half years in the Air Force, and came back to the job in January of '46.

MCKINZIE: When you were in your college years at Miami University, did you have a particular world view? Did you approach that first job, when you came in 1941, with some idea about how the world community ought to be?

DUX: Well, I was very much interested in the Union Now concept -- Clarence Streit impressed me a great deal. The fact that I had a chance to meet him at one point may have helped a little. I was not completely sold on the idea; I was

[3]

skeptical whether it would really work, but I was certainly interested in a much closer association between Europe and the United States.

MCKINZIE: Were you an enthusiast for the United Nations?

DUX: Yes, very much. I regretted the passing of the League of Nations, although that was before my time; and, yes, I thought the United Nations was a good idea. I was not too happy about some of the provisions in the Charter, the fact that the veto was built in the way it was, and the three votes for the USSR. But on the whole I thought that something like that was necessary.

MCKINZIE: Did anything happen to you during the war to affect your view of the postwar period?

[4]

Did you have a vision of what reconstruction would be like? Did you anticipate a prolonged period of Soviet-American-Chinese- British-French friendship, as evidently Franklin Roosevelt anticipated, or were you thinking in those terms in the war?

DUX: No, I was more in agreement with [Winston] Churchill, who was very skeptical of the alliance of our strategy of going through Italy rather than the Balkans. I sided with him on that question, partly because I, even at that time, thought that leaving the Balkans to the Soviets and not establishing ourselves there would bring too much Soviet influence into that area.

MCKINZIE: When you came back from the war and came back then to the State Department on a fulltime basis, were you able to pick up where you had

[5]

left off, or did you consider it almost like starting all over?

DUX: I really started all over, because I started in an entirely different bureau and a much more interesting job. It had to do with postwar occupation policy of Europe, mainly reparations, including the question of the gathering up of German external assets as a means of obtaining reparations.

MCKINZIE: Mr. Dux, in that whole business of reparations and handling of the former enemy countries, there was some point at which opinion turned around; that is, it changed, from a point of extracting reparations and of conscious efforts to reduce those societies to harmless ones, to a position of building them back up, not only to take the monetary

[6]

load off the United States, but to make them viable forces in a new coalition. Do you recall your own thinking about that transition? Was that a difficult one for you to make, and do you remember at what point you made that?

DUX: Yes, I think so. Of course, there was from the beginning, I think, the general feeling, certainly in this country, that reparations can be more harmful than beneficial, and that it was one of the mistakes we made after World War I. And for that reason, I think, the Potsdam Agreement was very ambivalent on reparations. What we were doing at that time in my office was really concentrating on German external assets, with the thought that here was something which, in effect, represented a safe haven for some German industry which had escaped the damage which Germany had suffered

[7]

internally. And it also represented a kind of economic penetration by Germany in other countries, particularly strong in Latin America, and this was a source which we could tap, without directly affecting the conditions in Germany -- of the average German and of German industry within Germany. We recognized that some rebuilding had to take place; we could not just reduce Germany to an agrarian state. The Morgenthau plan under Roosevelt was not very popular, but we looked at external assets as something that would provide a source of reparations without affecting the prospect for rebuilding.

MCKINZIE: Were there a number of proposals for the handling of external assets? For example, was it ever proposed to liquidate them all and then simply take the proceeds and divide them according to the…

[8]

DUX: Oh, yes, it was proposed and the process was begun. We liquidated most of them in this country. The major exception was the General Analine and Film Corporation, GAF, which we said was owned by I.G. Farben, the German dye trust, but which the Swiss claimed belonged to them. This argument went on for many years and was finally settled out of court, so to speak. We did keep control of the company and did eventually sell it. We had several conferences with the Latin-American countries in which we all agreed that we would liquidate the German assets. We made agreements with the neutral countries to pick up German assets there -- in Spain, Switzerland, and Portugal -- with varying degrees of success. The Swiss realized shortly after they had signed the agreement that this would eventually get them into a lot of trouble with their neighbor and

[9]

began to drag their feet almost immediately. And that wasn't resolved until we made the debt settlement with Germany, which, I think, was about 1954. A compromise agreement was reached, with German consent, so that the Swiss felt they were not harming German interests since the Germans had agreed to the process.

MCKINZIE: Where did Argentina fit into all these things, because Argentina had such a different situation at the end of the war?

DUX: Argentina, as I recall, did quite a bit -- undertook quite a few liquidations of German assets there. It didn't complete the process; they also stopped about half way through, looking ahead to eventual resumption of a normal, close relationship with Germany.

[10]

MCKINZIE: In those early days, did this work take you into what someone has called "intellectual reparations?" The Soviets always contended that while they withdrew a lot of machinery, the United States got a lot of patents or a lot of industrial processes as the result of the investigation, if not dismantling, of German industry. Was there a conscious effort to get at those things in these German industries that were scattered….

DUX: Oh, yes, there was a special office through which these German patents were made available to American industry, free of charge. Of course, all that was overtaken by the fact that the patents were running out anyway, and that the technology became obsolete. But for some time at the beginning, I think there was some valuable intellectual property

[11]

that was being made available to American industry -- another form of reparations.

MCKINZIE: With this special concern, then, for German assets outside of Germany, did you have any dealings at all with the [Edwin] Pauley mission that went to Germany -- and there was a mission to Japan too -- to have a look a sort of on-the-ground assessment of what could be dismantled in the way of reparations?

DUX: The Pauley mission was concerned with removals from Germany and Japan. We took nothing from there, and most of the industry that was dismantled actually went to the Soviets. I'm not sure it ever did them much good; I think most of it was never assembled in any useful way. It sat at railway sidings here and there and didn't really fit together, I think. The Soviets didn't know

[12]

how to put it together at the time.

What it did, in the long run, was to clear out a lot of obsolete machinery in Germany and allow them to replace it with newer technology.

MCKINZIE: In both