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Dr. Grover W. Ensley Oral History Interview

Oral History Interview with
Dr. Grover W. Ensley

Fiscal analyst, U.S. Bureau of the Budget, 1941-47; technical adviser, Senator Ralph Flanders, 1947-49; executive director, Joint Economic Committee, U.S. Congress, 1949-57.

Washington, D.C.
October 7, 1977
by James R. Fuchs

See also Grover W. Ensley Papers finding aid

See also Grover W. Ensley Oral History, by Richard A. Baker of the Senate Historial Office.

[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 It may not be published in full except by permission of the Harry S. Truman Library.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 December, 1979
Harry S. Truman Library
Independence, Missouri

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Oral History Interview with
Dr. Grover W. Ensley

Washington, D.C.
October 7, 1977
by James R. Fuchs

 

[1]

FUCHS: Mr. Ensley, to start would you give a short resume of your background; when and where you were born, and your educational background, and how your career went until you reached the Government part of it?

ENSLEY: All right. I was born on a wheat ranch in eastern Washington -- that's Washington State -- in 1915. I rode a horse four miles to a one-room elementary school. I went through high school in Colfax, Washington and then worked my way through the University of Washington during the depression 1933-38, receiving first a

 

[2]

bachelor of arts degree, a master of business administration degree, and finally a five-year certificate in Government service. I was trained for the public service. I went from Seattle to the University of Denver under a Sloan scholarship and where I, in 18 months, received another master's degree in Government management in 1940. It was at the University of Denver that I met my future wife, Creta Mabie.

FUCHS: Government was more your major than economics, then?

ENSLEY: Yes. Upon completing my work at the University of Denver, I went to Tax Foundation in New York City, where I worked on government budgeting problems. I attended New York University, in evenings. I eventually received my Ph.D. in economics, studying under Dr. Paul Studenski. The degree was awarded in 1947. In the spring of 1941 I was invited to go to

 

[3]

Washington for an interview at the Treasury Department, Debt Management Division. But while in Washington for the interview I went to see Donald Stone at the Bureau of the Budget, who I had known earlier. He was Assistant Director for Administrative Management. Knowing my academic background, and experience, he sent me to see Weldon Jones who was Assistant Director of the Fiscal Division of the Bureau. I was impressed with the Division and its leadership and I accepted a position as a fiscal analyst.

These were the days before the Council of Economic Advisers and other White House apparatus that has since been created to help coordinate and assist the President in formulating economic policy. I worked at the Budget Bureau until I went into the service late in the war.

I suppose my most interesting experience while at the Bureau of the Budget, was in the spring of 1942. Roosevelt was the President,

 

[4]

of course, and we were experiencing substantial inflation with shortages and rising income. There was no coordinated anti-inflation machinery or program. I'll never forget, Secretary of the Treasury Morgenthau went to Congress and advocated a harness of direct controls -- price and wage controls, rationing, and so forth. The next day, Leon Henderson, who was in charge of war allocations, testified that the way to stop inflation was to have tax increases. Well, that hit me as rather ironic, as a junior economist.

So, that weekend I wrote a one and a half page memorandum on the need for a coordinated stabilization program coming down from the very top, from the President. I brought it in and circulated it to the senior people at the Bureau of the Budget. The memorandum recommended that the President appoint a committee to develop a comprehensive stabilization program. In those days you didn't send President Roosevelt anything

 

[5]

longer than a page and a quarter memorandum. You could attach all you wanted to it, but in terms of what you wanted him to read, a page and a quarter was it. After some editing the memorandum was sent to the President over the signature of Harold Smith, the Director of the Bureau of the Budget. The very next day, the same memorandum came back with a handwritten note: “Okay. Work fast. FDR."

It gave Smith the authority to call in Henry Wallace, who was then the Vice President, and the other people that we had suggested to have on this committee. Out of it came the appointment by Roosevelt of Jimmy Byrnes who was brought off the Supreme Court to head this stabilization program. I'm very proud of that memorandum.

FUCHS: You did that on your own?

ENSLEY: Yes, I initiated the memorandum. As a young, green economist without knowing much about

 

[6]

protocol or anything else; I just wrote it and brought it in, and Gerhard Colm and other colleagues of mine at the Budget Bureau brushed it up and we worked pretty hard on it for one or two days before Harold Smith sent it to Roosevelt. But it was just at the right time and it did bring about a comprehensive stabilization program.

In 1944 I went. into the service as a naval officer. Just before I went into the service, the Pabst Brewing Company was celebrating its hundredth anniversary. During the war there was considerable discussion of the prospect of postwar unemployment. There was a general feeling that once the war was over we would revert back to the type of under-employment and under-utilization of resources that we had all during the 1930s. The Pabst Brewing Company, as an advertising gimmick in connection with their hundredth anniversary created 17 prizes for the best postwar employment plans. The first prize was $25,000, the second

 

[7]

prize was $15,000 and then 15 $1,000 prizes. I went home one evening and wrote a brief essay on how we could achieve and maintain reasonably full employment and stability after the war, and submitted it.

About a month later, I received a call from a public relations agency wanting to take my picture. I found that about twelve other people in Washington had also received calls, including Leon Keyserling, who later became chairman of President Truman's Council of Economic Advisers; and Herbert Stein who was with the War Production Board, and later became Nixon's chairman of the Council of Economic Advisers. Out of the 17 potential winners, about 12 were located in Washington. Of course, for about ten days the big question was, who was going to win the $25,000 and who the $15,000 and who the $1,000.

Well, to make a long story short, Herb

 

[8]

Stein won the $25,000, Leon Keyserling the $15,000 and the rest of us received $1,000 prizes. A volume of the winning essays was published.

I mention this only because it indicated the intense interest on the part of responsible Americans, during the war, to start planning then for a better America after the war.

FUCHS: Do you recall the year of that contest?

ENSLEY: The spring of 1944.

FUCHS: What were your days like, as a fiscal analyst in the Bureau of the Budget?

ENSLEY: My chief job in the Budget Bureau was to analyze trends in defense expenditures and their impact upon the economy. We talked about and tried to measure the inflationary gap that was developing as a result of rapidly accelerating war expenditures. I thought at the time that we should have had higher taxes to reduce inflationary

 

[9]

pressures. I'll come back to this World War II tax deficiency when we get into the Korean war. Fiscal policies were much more intelligently managed in the Korean war. I think that was, in part, because of President Truman's experience as Chairman of the Senate Committee during World War II.

You'll recall, President Truman made his name in World War II when he was Chairman of a special committee on defense expenditures. He watched not just the waste that there might be -- and there was plenty as there always are wastes in war -- but also the overall magnitudes and the implications of those magnitudes for the economy.

As I mentioned earlier I went into the Navy and served on Guam during the last days of the war. I came back with a doctoral dissertation nearly written. It called for an effective national employment program. I was pleased, when I returned in the spring of 1946, to find that

 

[10]

on February the 20th, President Truman had signed the Employment Act of 1946.

FUCHS: When did you say you returned?

ENSLEY: I came back to the Budget Bureau in April of 1946.

FUCHS: He called for this, I believe in his 21-point message to Congress.

ENSLEY: I believe in '45. Jumping ahead 20 years, on the occasion of the 20th anniversary of the Employment Act, the Congress and the White House made me Chairman of a special committee to commemorate the 20th anniversary of the Act. We had three Presidents still living in 1966 -- Truman, Eisenhower, and of course, Johnson. I got a very nice letter from Truman, who was not in a position to come to the big celebration that we had in Washington.

FUCHS: How did that come about? You were no longer

 

[11]

with the Government then.

ENSLEY: No, I was with the savings bank industry in 1966, but Congressman [Wright] Patman was Chairman of the Joint Economic Committee and he remembered me from the days when I was with the Joint Economic Committee. I was rather close to Gardner Ackley who was Chairman of the Council of Economic Advisers under [Lyndon Baines] Johnson. I wrote a letter to both of them, oh, a year before and said, "Look, we should do something rather substantial on the occasion of the 20th anniversary of the signing of that act on February 20th."

It ended up, as I say, with them making me chairman of a small committee to put on that commemorative program. I think it was the first time in history that a non-member of Congress presided over what were, in effect, congressional proceedings. But that is getting ahead of our story.

 

[12]

When I returned to the Budget Bureau in the spring of 1946, it became clear to me that the action in the Budget Bureau was not going to be as interesting to me as it was in the past, because there had been created a Council of Economic Advisers -- in the Executive Office under the Employment Act of 1946 to take over much of the work of the old Fiscal Division of the Bureau.

FUCHS: Did you think that the Council of Economic Advisers, which of course, was instituted by the Employment Act, was a good idea?

ENSLEY: Oh, absolutely. And its counterpart on the Hill was the Joint Economic Committee, seven Congressmen and seven Senators. The Committee didn't get organized in 1946. It wasn't organized till January of '47, and in the election of '46, you will recall, the Republicans won.

 

[13]

In the fall of 1946 President Truman appointed Senator [Warren Robinson] Austin of Vermont, a great Senator, to be our first Ambassador to the United Nations, creating a vacancy in the Senate from Vermont.

Senator [Ralph E.] Flanders, a Republican, was appointed by the Governor of Vermont to fill out the remaining two months term of Senator Austin. He was then elected to a full six year term in November of 1946. He didn't know me from Adam but he did contact some people in Washington. He had been active in the Committee for Economic Development, and he wanted a young man that understood Washington to be his assistant. I was approached by the Executive Director of the CED who arranged a visit with Flanders. Economic Policy action appeared to be moving towards the Council of Economic Advisers and to the Joint Economic Committee and since Flanders was being appointed to the Joint Economic

 

[14]

Committee, I accepted the appointment offered me b