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Frank W. Fetter Oral History Interview

 

Oral History Interview with
Frank W. Fetter

Worked with Office of the Lend-Lease Administration, 1943-44; Department of State, 1944-46.

Hanover, New Hampshire
July 22, 1974
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 It may not be published in full except by permission of the Harry S. Truman Library.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 March, 1979
Harry S. Truman Library
Independence, Missouri

 

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

 



Oral History Interview with
Frank W. Fetter

 

Hanover, New Hampshire
July 22, 1974
by Richard D. McKinzie

[1]

MCKINZIE: Professor Fetter, perhaps to begin I could ask you how an established academician happened to go into Government service in 1942?

FETTER: I had had some experience both with the U.S. Government and foreign governments before. When I'd just finished my graduate work at Princeton and Harvard, I went with Professor Kemmerer's financial commission to Chile in 1925, and then was with him on other commissions in Poland, in Ecuador, and in Bolivia in the

[2]

late 1920's. I then spent a year with his mission in China in 1929, when the Chiang Kai-shek government had just come to power.

I have one impression about that that might be worth mentioning. We were employees of the Chiang Government. How much of this we -- because I think I didn't differ much in my opinion with the others -- sensed at the time and how much was good second-guessing, I don't know, but certainly, as I look back on it, Chiang missed a great opportunity. Nominally, he had a unified China, probably on paper a China more unified than it had been for centuries. Although we didn't have proof at the time, I think we rather sensed the way in which his wife's relatives were simply looting the country. In retrospect, if there's any causality in historical development, the Chinese Communists deserved

[3]

to win, not in the sense that we'd like them to win; but that in view of the way in which the Chiang government behaved; it would have been very surprising if the Communists or somebody like the Communists hadn't taken over. The opinion I got -- and this was all secondhand -- of the crowd that was around Madame Chiang Kai-shek was an extremely unfavorable one.

Then I went back to teaching at Princeton. In 1934, the summer that I moved to Haverford College, I had an experience that I smile about when I reflect on it. The Foreign Policy Association, with the friendly cooperation of the Cuban Government of the day, sent a mission to Cuba which presented an extended report called, Problems of the New Cuba. It was published both in English and in a Spanish translation. The head of

[4]

that mission was Raymond Buell, an extremely able person who died some 25 years ago. One of the other members of the mission, whose name came to mind only a few weeks ago when I read of his death, was Ernest Gruening, later Governor of Alaska and United States Senator, who handled one of the sections of our work. I handled the work on the public debt and on public finance.

As I recall it, and I can't be sure on this, this was when [Fulgencio] Batista was just coming to power, and he was looked upon as the hope of liberation and freedom, a better day for Cuba.

In 1939, I went to Ecuador for the Export-Import Bank and spent about two months there, making a recommendation as to which of the proposals that the Ecuadorians had made for Export-Import Bank funds were worthwhile, and I made my report to the Export-Import Bank.

[5]

That's when I first met Warren Lee Pearson, who at that time was the head of the Bank. As I'll mention later, I met him again some 12 years later when he was the head of the German debt settlement commission in London.

The following year, I went back to Ecuador with the title of Advisor to the Central Bank of Ecuador. And this was to me, a very fruitful experience, and also it showed me the intricacies of Government.

There was, at that time, a piece of legislation (I think it was called, "Public 63"), which authorized the American Government to lend officials to South American governments to help them in various measures of administrative reform and economic policy. And as I got the story from my friends in Washington, the Ecuadorian Government had asked for two men, one in the field of public finance and one in

[6]

the field of monetary and banking policy. The Government said they would be quite prepared to send a man in public finance. Harold Glasser was his name; he was the assistant director of the Division of Monetary Affairs in the Treasury Department under Harry White. .And Glasser went down there for a year. The Government -- and again this is what I was told, and I think circumstantial evidence indicates it's correct -- said they were not in a position to send down anyone on monetary matters. I suspect it was that the Government did not want at that time to take a position on monetary policy for Ecuador. But they suggested to the Ecuadorian authorities that they get in touch with the Federal Reserve Bank of New York to see whether the Federal Reserve could recommend anyone. And, at the same time, the State Department called the Federal Reserve

[7]

and said in effect, "Fetter would be quite an acceptable person for us." So, I was sent down there and spent the better part of two and a half months with an office in the Central Bank.

One of the men I came in touch with there is a person who has since figured quite prominently in Ecuadorian history, Galo Plaza, whose father had been President of Ecuador at an earlier date and, like more than one South American President, had spent some of his time in exile. His son, Galo Plaza, who at that time was a man of probably not more than 35, was prominent in the government; later he became the President.

I remember Galo Plaza telling me of his experience in this country. I met his father at one time, and his father was an imperious type. You could well believe the story, as

[8]

his son told it to me, that he went to the University of California and played football, and at the end of the year he had pretty good grades. His father asked him how a boy like him could have gotten such good grades.

And the son said, "Well, they're pretty easy on football players here," whereupon the father exploded and said that if this was it, he wouldn't spend his money sending his son to the University of California.

The son also told me -- and again this is something I was not able to document -- that not only did he play football at the University of California, but he played either with or against Red Grange on Red Grange's first barnstorming tour in '25 or '26; and I could well believe it. Galo Plaza was a tremendous fellow, physically. Either he or one of his friends told me he had broken both of his arms, as a boy, bullfighting.

[9]

MCKINZIE: When you met him there and you were in this position as advisor to the Bank, was there any feeling at that time that somehow the world situation was going to require some kind of massive American assistance to get things on an even keel or was that not?

FETTER: I wasn't conscious of it. We were very conscious, certainly, of the German penetration there, and again, although I didn't have firsthand information, I could sense the split between the three German communities, the old German community, the refugees, and what you might call the Nazi representatives there. There were many stories that were told about that.

I remember one. There was a very offensive young secretary of the Hitler type in the German legation. There was a very fine restaurant run by a German refugee. (A number of small businesses in Ecuador were run by Italian

[10]

and German refugees) It was generally believed that the man who was running this restaurant had been hit by the German ethnic laws. In the lobby to his restaurant was a picture of a beautiful blonde woman, and the story was that one day this arrogant young Nazi attaché was coming to dine and he said to the proprietor, "May I ask, who is this lovely blonde lady?"

The reply was, "Why, Mr. Minister, that is our Aryan grandmother."

One had the feeling that the new groups -- there were some Italians there; too -- were making a real contribution to the economic life of Ecuador. You asked the question as to whether there was a sensing of the American struggle; I would say only in a most general way. But there is one thing that I remember very clearly, and the fact that almost no one knows anything about this today shows how much

[11]

strategic concepts have changed.

One of the great problems then, diplomatically, with Ecuador was the possibility of buying or at least getting bases in the Galapagos Islands; that's all water over the dam.

I also remember the tremendous shock in Ecuador -- this was on my second trip there, 1940 -- when Paris fell, because Ecuador had been culturally tied with France in a way that it had not been with any other country. The wealthy cocoa planters had sent their wives and their children to Paris to live and to be educated. It was a statement which I heard many times, and I think it was substantially correct, that you could recognize if an Ecuadorian woman or young man belonged to the real aristocracy because he or she spoke Spanish with a notable French accent.

[12]

This reminds me of one other thing about the old general, the father of Galo Plaza. Years earlier I happened to have crossed on the same boat on which he was going to Europe, and I had just come back from spending three or four months with the Kemmerer commission in Ecuador, so I introduced myself to the general. And we had interesting conversations and he said to me (this conversation was in Spanish, as I recall it), "America is a very fine place to educate boys, but not girls." He added, "Non es buena per las ninas porque devoelven demasiado independientes."

MCKINZIE: He preferred Paris.

FETTER: He sent his daughters to Paris, but he sent his sons to the United States.

There is one other little thing that might be of interest in connection with my second visit to Ecuador, when I was advisor of the

[13]

Central Bank. The man who was with me was Harold Glasser. Glasser later came into some unfavorable publicity, because he was charged with having some Communist connections, and also he took the 5th Amendment one time. I was very much interested in this when I read about it, because, as far as my contacts with Glasser were concerned, he was an extremely conscientious, almost meticulous public servant. One of the great problems that I discussed with him (great from his point of view) before we went down was where could he get a portable pasteurizer to prepare the milk for his children. Our contacts down there were probably a couple times a week; we'd get together and generally the theme of it was, how can we help these Ecuadorians when the government is so corrupt? And so, several years later I was quite amazed when I read that he had been asked by one of the

[14]

committees if he had engaged in espionage for a foreign power while he was in Ecuador, and he took the 5th Amendment. I suspect that this was done, not to the fact that he had been engaged in such espionage, but that he was a pretty stiff-necked fellow and had a very strong feeling on some things. But certainly in my connections with him, I never got the slightest indication that this is what he may have been doing when we weren't together.

MCKINZIE: What you've indicated so far is that you had built up quite a few contacts in the State Department by the time the U.S. entered the war in 1941. It was not then a bolt out of the blue when this business of the lend-lease came up.

FETTER: No. Sometime in the fall of '42 I got a call from someone in Washington, asking me

[15]

whether I might be free to go on leave from Haverford and do some work with lend-lease. I went down, and details are a little blurred after more than 30 years, but we had a discussion and it ended up that I was to go to India as a member of the lend-lease mission which was headed by Fred Ecker. He was then vice-president of the Metropolitan Life Insurance Company. And for approximately six weeks to two months, I went down two or three days a week getting my preliminary training and briefing, and doing odd jobs around the lend-lease. Then from the end of January on, I was waiting to leave when the first plane could take us. And it was nearly eight weeks after we were cleared and ready to go before we could get transportation to India.

One thing I remember in that period was how little information there was in Washington about the problems of India and the Near East.

[16]

It apparently had been the assumption, as I get it, that anything connected with India (probably the same went for Burma) was handled through London.

As I say, I had a number of weeks there when I was, in effect, on my own. My instructions were, "Do what you can to be useful." I helped on a few things on lend-lease, but I was free to go to other agencies and see what I could find out that would be useful for the work in India. I went to the Fed, I went to the State Department, I went to the Bureau of Foreign and Domestic Commerce, and literally what I could learn about India from them was no more than anyone could have gotten from clipping the New York Times for the previous year. The only place that did have any background was in the Office of Strategic Services. And curiously enough, this was not the dirty

[17]

tricks end of it; this was the research end. I found a most penetrating, comprehensive study of the political and the economic problems of India in a study that was done, as I recall it, by Professor Brown of the University of Pennsylvania, who was a Sanskrit scholar and who had spent some years in India. And I can say, literally, that he knew more about India than all the other offices of the Government put together, as far as I could find out.

MCKINZIE: When you were doing this casting about for information and familiarizing yourself with lend-lease, was there much talk about what long-range effect lend-lease was going to have on the recipients? There were clauses in the lend-lease agreement which required postwar cooperation, particularly in matters