Numbers appearing in square brackets (ex. ) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
The Library also has available through interlibrary loan a separate 21 page oral history interview with W. Averell Harriman conducted by the Iroquois Research Center.
Opened June 1983
Oral History Interview with
WILSON: We'd like to get at some of the questions relating to your experiences, to your career. You may recall at the time we gave the presentation at the last Library board meeting, we tried to describe some of the problems we'd encountered, particularly the problem of how the written record has led us astray or can lead historians astray on occasion. We thought that perhaps to pose you the question that bothered us most: One of the most voluminous subject files of information about the wartime planning for the postwar world and the immediate postwar period deals with this question of the State Department's efforts, and the effort of the
Treasury Department, to create an economic open world--Cordell Hull's idea. We'd like to have you react to that--describe how that might have come to you.
HARRIMAN: I think there are telegrams that may or may not be available, which indicated that I very much had in mind the need to give Europe substantial aid after the war, after Lend-Lease was over. As the matter of fact, I felt it should also include countries not involved in Lend-Lease--whose economies would be completely disorganized. UNRRA was not enough. Europe would need not just food, but also raw materials and working capital to get the wheels of commerce going again. It wasn't just rebuilding factories; it was getting all the machinery of trade and commerce going again. Since they were without any foreign exchange, I felt it necessary for us to do something. I was particularly conscious of it, because I knew the condition Britain would be in, converting from wartime to peacetime economy.
I was very much concerned over our failure to
come to an agreement with the British on continuing Lend-Lease assistance after the war was over. In fact, when Oliver Littleton was in the United States, I think it was around 1943, I urged him to consider the needs of the postwar period, but apparently he was under instructions from [Sir Winston] Churchill not to do it, or didn't want to do it. He had immediate wartime emergency needs. This was the period when I used all the influence I had to get the British to abandon their export trade, and as much as possible convert all of their manufacturing facilities to the immediate needs of the war, including civilian, as well as military requirements.
I felt a certain responsibility to help the British, as I had urged the British to abandon their export trade and convert to war production. You will remember, the British got most of their raw materials and half their food from abroad. Their ability to buy necessities from abroad was essential. We did give the British a three billion seven or eight hundred million dollar loan. But I was very much upset that we didn't extend the principle of Lend-
Lease into the postwar period.
As far as the Russians were concerned, I felt the reverse; they had adequate gold, if they wanted to buy, and they weren't dependent upon international trade. I felt they were more self-sufficient. The Russians obtained a number of plants under Lend-Lease, which had been authorized by Washington, that I thought were not justified for their war effort. They wanted them for postwar use. I had a friendly feeling towards the Russians, but I felt they didn't need these plants. The Russians often took advantage of Lend-Lease. On one occasion, I think it was the time [Henry] Wallace came to the Soviet Union when we went to the Kolyma gold fields, Wallace discovered a dredge which we were supposed to have given the Russians to deepen one of the harbors in the Pacific. But, we found the Russians using it to dredge for gold. Well, they received this dredge under Lend-Lease.
It didn't rest well with me that they had deceived us in that way. We never knew fully what they were doing. The British we knew; and it was
very clear that the whole of Europe would be weakened, and that communism--without help--would take over. I'm sure that was one of the reasons why [Joseph] Stalin broke his agreements, because the situation looked too good in Western Europe for a Communist takeover. I think Stalin was convinced he could move into Western Europe. He was undoubtedly told by leaders in the Communist Parties in Italy and France that their organizations were very strong; that with some help they would be able to take over Italy and France; and I think they would have done so if it hadn't been for the Marshall Plan.
So, my reports to Washington started in the autumn of 44 and 45, with some telegrams, in which my general point of view was directed toward the above. It never occurred to me that we would have as grandiose a program as the Marshall Plan, but I felt that we had to do something to save Europe from economic disaster which would encourage the Communist takeover.
MCKINZIE: You did not then get a great deal of Cordell Hull's view that after the war there would be a remarkable amount of commerce--normal commerce?
HARRIMAN: No. My views were just the reverse. I was not at all in sympathy with this idea. You know, I ran the Marshall Plan in Paris. I and a small staff had control of the operations in Europe. We were pressing for EPU, European Payments Union. We had a lot of opposition from the Treasury Department on this and not much cooperation from State. I think their economic approach was just the reverse of ours. We were talking about really getting Europe on its feet. It was our hope that there would be a breakdown of trade barriers in Europe first, and then eventually a breakdown internationally, which would help increase trade with Europe.
I knew this would mean a temporary sacrifice for the United States to some extent. We had a lot of trouble with the Department of Treasury; they were not particularly keen on the European Payments
Union. Our whole concept of the unification of Europe was that it would first contribute to economic unification. Then, we hoped to secure an economic-military unity and finally a political unity. In the first instance, it was obvious that theoretically at least there would be some sacrifice in trade to the United States, but in the long run the buying power of Europe would increase so greatly that we would gain.
WILSON: How are we to explain the continuation of this universalist philosophy in places like the Treasury? Was it because they were idealists or unrealistic, or was it because . . .
HARRIMAN: Well, they were working on GATT [General Agreement on Trade and Tariffs]. Everybody seemed concerned about GATT. That's one trouble with bureaucracy. Bureaucrats are like hunting dogs. They are down a certain scent, and they stick to that scent, even though there may be some better scents in one direction or another. I use the word "scents" in a double meaning.
HARRIMAN: I was all for the ideals, but I knew we were not in a position to get the ideal in the European Recovery Program. I was quite ready to accept certain restrictions on the United States. After all, there was a great dollar shortage. It was quite clear that the more prosperous Europe became, the more business there would be in the United States. My whole experience in banking showed me that. The biggest trade that Germany and Britain had was with each other, in the prewar period; I think I'm right in that. Two highly industrialized nations had the most trade with each other, and it wasn't tariff policies alone that made trade relations better for both of them. So, I had a different view than this idealistic theory of simply breaking down barriers. I was much more involved in the practical problem of getting Europe back on its feet, and giving it an opportunity to move ahead--move forward--and everything we did was in that direction. EPU
was an example; we had a lot of troubles with the Treasury in putting EPU through, the European Payments Union . . .
HARRIMAN: . . . and yet the European Payments Union, I'm satisfied, was a thing which made the Marshall Plan a success and made it possible for Europe to move rapidly after the Marshall Plan was finished. And I think in a sense it was one of the things that made it possible for Europe to become viable more rapidly. I was fighting for EPU; it had a good deal of support from the French, the Italians, and the Belgians.
The British were very much opposed to it; they had a great deal of difficulty. Sir Stafford Cripps was adamantly against it. They thought it would interfere with their sterling area; there were a lot of complications. It was hard to fully understand why they were opposed to it. One thing about Cripps was that after he made an agreement he always did a little better than he said he would.
It was very tough to get him to agree to something, but after he came to an agreement he was very cooperative.
I look upon these theories, which were held in the Treasury and to some extent in the Department of State, as irritants against doing the job which we were trying to do and which we did in spite of their positions. I think the record shows that EPU was the most specific case. Yet the whole preamble of the second authorization act for the Marshall Plan showed the direction Congress was ready to take about breaking down barriers within Europe. I was anxious that it shouldn't be just a customs union--a customs union which would exclude the United States. I wanted to see more fundamental understandings about greater integration than simply a customs union. That I think is happening, although some people call European integration more of a customs union than I do. I think it's more fundamental. The military aspects are also very important.
Actually I'd had a certain amount of experience
in Europe in the inter-war period, as a banker, and I was also a member of the Board of Directors of the International Chamber of Commerce. I remember meeting in one of the executive committee meetings in Paris. I went there because I happened to be there; I was the only American of any prominence there--of any of the directors. They had a staff. One evening I remember that I met with the leading bankers and industrialists of the principal countries. I remember the British and German, the French--I can't remember who else was there. It was quite a small dinner--it was a private dinner. Yet, they took the International Chamber of Commerce more seriously than we did, and there were very important men present. I asked them why they thought that the United States was moving ahead as we were in the mid-twenties, you remember, whereas Europe was stagnant with built-in unemployment. They said it was because we had a continent of free trade.
And I said, "Well, if that's the case, why
don't you with all your influence in different countries make the changes that are necessary to get freer trade in Europe?"
The answer was that unless there was a military understanding, freedom of trade could not exist. Because there wasn't a military understanding of some kind, every country, for its own security, demanded to be as autarkic as possible. And I think one man said, "From castings to forged big guns, to buttons on the uniform." I remember some of the details.
So, I went into the Marshall Plan with the idea that both economic and military considerations had to be taken into account. This is one of the differences I had with [Paul] Hoffman. He wanted to limit it to economic goals alone, and I was very keen to see the NATO treaty become more of a reality, remembering this experience in the inter-war period. Now that isn't an answer directly to your question, but it does show that we looked upon military integration and economic integration as supporting each other.
We did everything we could, of course, to develop the OEEC as a vital organization. We were--I think I can use the word "I"--was determined that we would get the Europeans to divide aid. I had a horror of fourteen countries coming to the United States with their front feet in the trough. I thought the net result of that would be that we would have fourteen enemies of the United States and fourteen enemies among each other, because of the jealousy that would come.
How could you justify giving Holland twice the amount of money that you gave Belgium? Well, finally, I put it up to them. They said that they couldn't do it; it would destroy them. I said they had to do it. And I finally got support from Hoffman on it. We did get them to divide the aid, and that was one of the things that made the organization successful. We were dealing with the practical realities of the ghastly situation that existed in Europe when we took over. I don't know if you've ever had a full picture of what Europe was in the winter of 1947.