Oral History Interview with
Dr. Isador Lubin
Economist and statistician. Commissioner of Labor Statistics, U.S. Dept. of Labor, 1933-46; U.S. associate representative (with rank of U.S. Minister) on the Allied Reparations Commission at Moscow, 1945; U.S. representative to the Economic and Employment Commission, U.N. Economic and Social Council, 1946-49; special assistant to the Asst. Secretary of State, 1949-50; and U.S. representative (with rank of Minister), U.N. Economic and Social Council, 1950-53.
New York, New York
June 26, 1974
by Richard D. McKinzie
[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.
Numbers appearing in square brackets (ex. ) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
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 It may not be published in full except by permission of the Harry S. Truman Library.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 January, 1976
Harry S. Truman Library
[Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed]
Oral History Interview with
Dr. Isador Lubin
New York, New York
June 26, 1974
by Richard D. McKinzie
RICHARD D. MCKINZIE: Doctor Lubin, how did you become involved with the Harry S. Truman administration? You have one career as an academician and an economist, and I think many scholars would be interested to know how you happen to make the decision.
ISADOR LUBIN: I knew the President when he was Vice President. I met him the morning after the election. He was sitting in the hall at the west wing of the White House and I had my office in the west wing. I was then working with Roosevelt and I stayed with him until he died.
We just passed the time of day for a minute
or two and he seemed a bit nervous. I think he was waiting to see Harry Hopkins to try and get a lead on what his job was going to be.
My first real contact with President Truman was in 1945, after a trip to Europe. We had taken Stohlberg and Aachen, the only German territory we had, in the late spring or early summer.(These two cities were actually captured by Allied forces in the fall of 1944.) I happened to be in Paris and I called on General [Dwight D.] Eisenhower and told him I wanted to see something of an occupied territory. That is, how we operated in such areas.
He replied, "I don't want any visiting firemen up there, but if you'll undertake to do a job for me I'll let you go." An arrangement was made whereby I went up there. I sat in court at several trials. One of the things that a German girl could be guilty of was associating with an American soldier, and things of that kind. When I came back I gave General Eisenhower a report on the general situation, that is, some of the problems that they were having in running an occupied territory.
While I was in the occupied territory I got a cable from the President [Roosevelt]. I don't know where it was sent from. It was sent during the conference at Yalta with Stalin. In the cable he appointed me head of the Reparations Commission to meet in Moscow. I cabled back and said that I'd rather not have the appointment, that I have a daughter who has no mother, her mother died in childbirth, and secondly my health was not too good, being a diabetic, and I didn't want to go to Moscow and be away from my daughter and at the same time worry about my health.
The next thing I knew was that I got a reply cable from Hopkins telling me to imagine myself ten years younger and subject to draft, and that he was arranging with Averell Harriman, who was our Ambassador to Moscow, to have the necessary drugs and medical facilities available for me. Under those conditions I could not say "No." And so I cabled back to Washington and said, "Okay." I came back to Washington a couple of weeks later and
proceeded to develop a staff, collect information on reparations, and build up the machinery that was necessary to do the job.
A couple of weeks later, Truman was already President and sent for me. He said that one of the most important problems facing the U.S, was the handling of reparations. How we handled reparations would determine the future of Germany and a good part of Europe. He felt, therefore, that the man who headed the reparations delegation should be able to throw his weight around. He felt that he would like to have somebody of Cabinet rank as head of the delegation. I told him about the staff that I had developed and the materials I had collected. He said, "Well, I want you to go ahead, go with them." And I hemmed and hawed. By the way, he did name the person he wanted to send; it was the then Postmaster General Frank C. Walker.
The reason why he wanted to name him was the importance of the job to be done and Walker had cabinet rank. So I said, "Mr. President,
there's a war still on, you are Commander in Chief and I obey your orders." He was very, very grateful; thanked me and asked me to get in touch with Walker.
Walker and I had a long talk and Sam Rosenman's name was mentioned as General Counsel to the Reparations Commission. It looked very much as if my staff and the materials I collected would be the basis of negotiations with the U.S.S.R., that we should go ahead as we had planned and that I would be number two instead of number one in the delegation.
About three weeks later, I got a telephone call saying that the President wanted to see me. I came in, and he said that he had a problem; that the gentleman on whom he had figured as being head of the delegation was getting cold feet because of the fact that the Russians had been talking about using German labor to rebuild the destroyed parts of the U.S.S.R., which in effect was equivalent to slave labor, and he just would not have anything
to do with any organization that considered such a course.
Consequently, he had decided to have somebody else rather than Walker. I asked him who it was going to be and he said it was Ed Pauley. Well, I knew Ed, he had been treasurer of the Democratic Committee. I had met him in Washington at Miss Perkins’ house. I said to the President, "You are still Commander in Chief. If that's what you want, I'll be glad to do it."
Then he got up, shook my hand, opened the drawer of the desk and took out a bottle of bourbon and he said, "Let's celebrate."
I had a drink with him, and I said, "Mr. President, I still have a bottle of whiskey that was distilled before prohibition. It was medical whiskey and I'd like to give it to you as a present before I go."
Later on I brought it in to him. He looked at me and thanked me and said, "Would you object if I gave this to Mama? She always takes a teaspoonful before dinner." The
incident gives you the picture of the man himself.
MCKINZIE: Did President Truman seem to have a clear grasp of the problems of postwar reparations?
LUBIN: No. He had no conception of the problems that we would run across with the Russians.
So, we had our bourbon and I said goodbye and went back to my office, got hold of Pauley, discussed how we would set this thing up. Pauley immediately told me that he was going to hire four or five other people to join him. They were all oil men with the exception of the president of the University of California. I later found out that the real difficulty had been that the boys behind the President wanted to vacate the office of Postmaster General so that [Robert E.] Hannegan from St. Louis could get the job. They were manipulating the situation so they could get rid of the current Postmaster General and get Hannegan in. I knew nothing of the politics of it at that time.
I learned all that a lot later. At the same time, my agreeing to withdraw made it possible to give a job to Pauley who wanted recognition for the good job he had done during the election and getting Truman nominated as Vice President.
Several weeks later, about a month later, when we were ready to leave for Moscow, I dropped in to visit the President. At that time he was living across the street at the Blair House. I went there to say goodbye to him. He expressed his thanks for what I was doing for him. He walked out of the main door to the top of the steps that go up to the Blair House, shook my hand, and said, "I'll never forget what you've done for me." And he meant that: After that, anytime I wanted to see him, I could just call [Matthew J.] Connelly and say I wanted to see the President and there was no trouble at all in getting an appointment.
As I have said, Pauley added various people to the staff. We left shortly thereafter and went on to Paris. In Paris we broke up to visit
the various parts of Germany to get some conception of what would be involved in reparations. Interestingly enough, Pauley's people were interested in gasoline and oil. And there was one particular gasoline plant that they wanted to bring to the United States that had some technological significance to them as oil people. On our return we visited a good deal around Berlin, and other nearby places and then went on to Moscow.
The mission to Moscow was a complete failure. We got nowhere at all. The Russians had already begun to take their reparations by removing stuff from the occupied area, and in Potsdam, for example, at the railroad siding, you could see freight cars loaded up with all kinds of stuff. You could see factories with the walls broken out so they could get the machinery out; and they really made a good start on reparations before the commission ever met.
We were in Moscow about four weeks and
then the Potsdam meeting was held. We went on to Potsdam and I saw the President there for only a minute or two. Jimmy Byrnes was running his life for him at the time. We decided that we weren't getting anywhere and agreed that we would recommend to Jimmy Byrnes that the Russians take for themselves anything they wanted in the occupied are--the area occupied by them--and that we would take any reparations we might want from the area that we occupied. We took nothing, really, from Germany in reparations, but the Russians took all of East Germany in effect.
MCKINZIE: Well, Mr. Lubin, did the Russians ever say anything to you about what they called intellectual reparations, that there were patents and even scientific personnel that did come to the United States?
When we arrived at Potsdam we made our suggestion to Byrnes and the Russians were
told, "This is it." They were terribly shocked when they were told that they would have to get their reparations from the area they occupied. There was a lot they wanted to get out of West Germany. They were told that this is where we stand, and we went back to Moscow at the end of the Potsdam meeting to get our things together so that we could go on home.
Our attitude was just the reverse of the Russians. We wanted to help rebuild Germany as fast as we could, economically. They wanted to drain everything they could out of Germany.
MCKINZIE: How wide was that view about rebuilding Germany? Mr. Morgenthau’s plan of pastoralization had not been completely repudiated at that point, had it?
LUBIN: No, it hadn't been. As a matter of fact, one of the things that bothered me was that I felt we were overdoing the economic redevelopment of Germany. I happened to be in one town where there was a big coal mine, and was informed
that the manager of the mine was a Nazi. He had managed it before the war. When talking about this Nazi to our Army officers in charge, they said, "Goddamn it, we've got to have coal. Now, you're not going to bring it from the United States. We're going to have to get it here, and we're going to get it as fast as we can, and we'll keep our eye on this guy."
But the general feeling during the latter part of '45, particularly, was, "Let's get them on their feet as fast as we can, otherwise, we're going to have to support them; we're going to have to build them up." That meant instead of getting reparations out of Germany, we had to make contributions to the German economy.
Now, I think part of that was due to the attitude of the Russians. As far as they were concerned they were going to get any damn thing they could get out of Germany; and we felt that they were overdoing it.
MCKINZIE: I want to fully understand. The U.S. position on reparations was in part influenced by the realization that Germany was going to be an economic, as well as a military, burden in the future if it weren't rebuilt?
MCKINZIE: Did the refugee problem at all enter into your deliberations--wherein great thousands of people came into West Germany in the summer and fall of 1945?
LUBIN: That wasn't discussed at all.
So we returned to Moscow from Potsdam, packed up our papers and clothes, and went home. This was in July.
One thing that I distinctly remember about the entire reparations experience was a remark made by a member of our commission who had been appointed by Pauley. As we got on the plane to go home he boastfully said to me, "Lube, the only thing that I have here, in this suitcase,
is one: suit. Everything else I brought here, I've sold."
We had been permitted to bring anything in because we had diplomatic passports. We paid no duties on anything we brought in. There was a black market for everything in Moscow; and this chap had sold virtually everything he had brought into the U.S.S.R. except the clothes on his back.
At the Potsdam meeting, some of the boys on our staff sold watches to the Russian soldiers and got paid in American currency. The Russians just went wild over any kind of a watch. The value of the dollar meant nothing to them; they were soldiers stationed in a part of the world where there was nothing available at the time.
But to me it was scandalous to see responsible people selling clothing which they brought in as diplomats, or selling watches.
When we got home I wrote a report on what had happened and where we stood. Most of the
work on that report was done by Tommy Wilson on our staff.
I brought the report into the President and after a few minutes of talk with him, he said, "You know, we also have to send somebody over to Japan now, and get reparations out of Japan. And I want you to go with Mr. Pauley to Japan."
I told him I was terribly sorry. My health wasn't very good and I'd appreciate it if he would excuse me from going. I just didn't want to go with that same crowd."
He said, "okay," and added that he was sorry about it all. He then stated, "Well, how about going back with the Department of Labor as Commissioner of Labor Statistics? They need you over there." My job there had never been filled, I'd been on loan from the Department of Labor to Roosevelt.