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Charles P. Kindleberger Oral History Interview

OH226 Charles Kindleberger Interview Excerpt

Please note: Interviewees were given the opportunity to edit their transcripts before their approval. In places where the sound recording and the transcript differ, the written transcript should be considered the official historical record. This five-minute excerpt is all that exists of the Charles Kindleberger oral history sound recording.

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Oral History Interview
with Charles P. Kindleberger

Economist with the Office of Strategic Services, 1942-44, '45; chief, Division German and Austrian Economic Affairs, Department of State, Washington, 1945-48; and Intelligence Officer, 12th U.S. Army group, 1944-45.
July 16, 1973
by Richard D. McKinzie

See also Charles P. Kindleberger Papers finding aid

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


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.

As an electronic publication of the Truman Library, users should note that features of the original, hardcopy version of the oral history interview, such as pagination and indexing, could not be replicated for this online version of the Kindleberger transcript.

The Charles P. Kindleberger Papers finding aid is also available online.

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 It may not be published in full except by permission of the Harry S. Truman Library.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, 1977
Harry S. Truman Library
Independence, Missouri

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


Oral History Interview with
Charles P. Kindleberger


Cambridge, Massachusetts
July 16, 1973
by Richard D. McKinzie


MCKINZIE: Professor Kindleberger, maybe a place to start would be to ask you why and how you entered the Government service in the 1930's, It would appear that you had specifically trained yourself for an academic career, and then, as I recall, in 1936 you began to work for the Federal Government. Had you had that in mind during the course of your training?

KINDLEBERGER: Well, let me try to recall to you the position in the 1930's. I heard later that at Harvard one job for a Ph.D. in economics came in in



1935, and in 1936 one job came in. As far as I know there was nobody looking for academic jobs at Columbia where I trained because there weren’t any academic jobs. Very early I decided I wanted to get into the Federal Reserve Bank of New York to learn more about foreign exchange from the factual point of view. I met Randolph Burgess at a party at Jim [James] Angell's house, or maybe it was at Arthur Burns', and asked him whether they had any jobs?

He said, "Come down and see me," I went down to see him and it turned out that I arranged in the June of ‘36 to take a job in October, not before. I was still working on my thesis. I hadn't finished the thesis. I decided to go down to Washington, and then I got a job with Harry White and Frank Coe, two people who later had career troubles, and



worked the summer of ‘36 with them in the Treasury on purchasing power parity calculations. It’s a technical kind of question about the foreign exchange rates. I studied particularly France. I have in my files quite a number of papers, I think, would show what I was doing there. Later on, that association turned up to haunt me. And particularly it was said by George Sokolsky that I was one of (Henry, Jr,) Morgenthau's men put into the State Department to carry out the Morgenthau plan. You can see how it’s easy to draw that inference, but it was erroneous. At the end of the summer I told Harry White I was leaving to go to the Federal Reserve Bank where I had this job arranged.

He said, "Do you want to stay?"

I said, I didn't know whether I wanted to stay. I was really quite interested in this foreign exchange question. On the other hand, if



you would raise me to a full P-2 -- I was getting $2400 -- and I said, "If you'll raise it to $2600, I’ll stay."

And he said, "No, I guess not." And I have recounted this story in the preface of my book on the world depression. I went then to the Federal Reserve Bank of New York. In the Federal Reserve Bank of New York I worked with Emile Despres half time and with Louis Galantiere half time. Louis Galantiere ran the Foreign Research Department, and Emile Despres was interested in foreign exchange transactions. He wrote a weekly letter to the Secretary of the Treasury on what was happening in the foreign exchange market. When he went to Littauer School in 1938, I think it was, I took that over from him. So Despres and I had been associated as early as '36, a long and intimate, and very fruitful association for me.

A little later on the Bank of International



Settlement said they wanted some young American economist to work on their staff. They asked the Federal Reserve Bank in New York to nominate somebody, and they asked I think through Leon Frazer who was then the President of the First National Bank, and Allen Sproul -- I think probably Allen Sproul not Werner Knohe, or not Randolph Burgess, Sproul asked me. I thought that would be a good experience. Fairly stupid of me to do that, because a man with broader vision could have seen a war was coming, but I couldn't. I agreed in February of '39 to go to Europe to work for three years. It happened that with the fall of Czechoslovakia I didn’t see how I could change that arrangement. I was then beginning to be quite discouraged. I went to Europe with my wife. We had no children at the time. After the fall of Paris though I decided I wanted to get out. Either the war would be short and the wrong people would win, or



it would be long and it was a poor place to be. So Emile Despres, who was then with the Federal Reserve Board in Washington, and I corresponded with each other. He would write telegrams to Mr. McKittrick urging me to come back signed (Marriner S.) Eccles. I should perhaps note that Mr. Eccles really signed them, but they were drafted by my friend, Despres.

The Federal Reserve Board paid my way back and that of my furniture, which in a lighthearted moment I'd taken over. This cost a couple thousand dollars which I didn't have. That's how I got back to work at the Federal Reserve Board with Despres. Now I worked directly under Walter Gardner who was the head of the Foreign Research Division. I was in on the lend-lease negotiations just briefly, as a ‘fly in the wall’ with Walter Gardner. Eddie Playfair and Roy Allen were the low level negotiators for the British and I worked with them on the balance



payments estimates. I saw Harry White and saw something of his unpleasantness when he forced the British to sell American Viscose, if you recall that episode.

It wasn't winning the war much that I could see. Still it was better than sitting in Basel doing nothing. And then bit by bit, OSS got formed.

MCKINZIE: Wasn't there an interim period where you were sort of the Secretary of the Joint Economic Commission of the United States and Canada?

KINDLEBERGER: That's true, yes. I forgot to indicate that. Alvin Hansen who was working on the staff of the Federal Reserve Board in Washington was appointed by Mr. Roosevelt, the American head of the Joint Economic Committee for Canada and the United States, and he asked me to be Secretary, and I was. Then we saw White and Coe again there. And as a matter of fact, I was



questioned later on by the FBI about some Canadians who were regarded as suspicious characters. This was a Committee which didn't really do much in the long run. What it essentially did was to introduce people to each other. Once the people who were doing, say, price control in Canada met the people who were doing price control in the United States they didn't want us sitting around listening to them all day, They wanted to get on with the business. Initially the War Production people had to meet and then the power people always met, and the fiscal people had always met, and working on a similar problem Bureaucrats on both sides would work close together. In a war situation there were some that hadn’t joined up and found the modus operandi. Once that was done we really had very little to do.

MCKINZIE: I talked to a lot of people who contend that



that those very early cooperative endeavors with the Canadians and with the British, and a number of other bilateral things, and lend-lease itself, were not simply a matter of winning the war. That they had in mind, conceivably, a different kind of world after the war. That lend-lease, for example, was not just a system of providing material to Allies, but that the provisions of it were consciously for the creation of a different kind of economic world after the war. Did you see that at the time?

KINDLEBERGER: Well, there were aspects of that. As Secretary of the American side my counterpart was a man named Skelton. Sandy Skelton, the son of the former Foreign Affairs Permanent Secretary in Canada (a Civil Service Canadian type). He and I wrote a long paper on postwar plans. Once you got a certain number of things going there was a



question as to what one would expect of postwar plans. I never was really very sold on that -- that struck me as a make-work. You were too far away to see what the end situation would be. So much of what went into the Canadian agreements were ad hoc.

The Hyde Park agreement of '41, for example. The Hyde Park agreement was in fact a way to finance Canada by helping it to finance Britain. We would lend-lease certain things to Britain, but give them to Canada.

To a certain extent the Canadians didn't want any help from the United States, that was a matter of pride, and I thought that to a certain extent we were window dressing. The Canadians always had this special relationship with the United States and with Britain, and they always played it carefully. It wasn't that they really didn't want to have a close tie with the United



States. They wanted to stay right in the middle the way they always did. And I thought that when they needed help from us -- they wanted it both ways, of course, as everybody does, They wanted to be a big independent country that grants aid, but doesn’t receive it. This meant that we needed some devices by which the United States would help them to help Britain by putting things through. I don't mean to make too much of that, but the special situation of Canada involved a great deal of ad hoc things. 1 don't think I have a copy of that memorandum I wrote with Skelton anymore. A lot of other postwar work was being done by [Leo] Pasvolsky in the State Department.

MCKINZIE: Yes, indeed.

KINDLEBERGER: I can't remember that I took it very seriously. I ground it out. No problem to grind out memoranda, but obviously nobody paid any attention



to it later on.

MCKINZIE: The question is prompted by the contention by some writers that there was a kind of "Hullian vision" of an integrated economic world after the war. And that from the very early days of the war all U.S. assistance to Allies, and all planning for treaties was directed toward that kind of integration of economies.

KINDLEBERGER: I think that's fair enough. That certainly is in Article 7 of lend-lease, and in the Atlantic Charter, and its in the Hot Springs meeting of FAO, and it's in a great many aspects. But the Canadian business was really rather separate and very much ad hoc, I think. It involved a special relation not the universal, not the multilateral. By the way it is of some amusement to me that a young man named Preeg came by the other day from the



National Planning Association with a manuscript, which he asked me to comment on -- talking about the world's being regionalized and Canada is in the United States orbit.

I said, "Aye, I have read that book fifteen years ago when William Yandell Elliot wrote it with a study group on postwar economic foreign policy for the United States." (It was written [Theodore] Geiger and [H. van B] Cleveland) "and I didn’t believe it then, and I don't believe it now, because the Canadians don't want it like that. They have their pride and their independence, and they want to be at a certain amount of arms length. They need the favors and they’ll take the favors, but they want it dressed up so they don't seem to be taking them," and so on. But I would have thought that the Canadian case was an exception. By the way, in my book in the depression Hull comes out looking rather poorly