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Paul H. Nitze Oral History Interviews, June 11 and June 17, 1975

 

 

Oral History Interview with
Paul H. Nitze

From 1941 to 1944, Mr. Nitze served as Financial Director for the Coordinator of Inter American Affairs; Chief, Metals and Minerals Branch, Board of Economic Welfare; Director, Foreign Procurement and Development Branch, Foreign Economic Administration; and, as special consultant to the War Department. He served during the Truman administration as Vice-Chairman, U.S. Strategic Bombing Survey, 1944-46; Deputy Director, Office of International Trade Policy, U.S. Department of State, 1946; Deputy to the Assistant Secretary of State for Economic Affairs, 1948-49; and, Director, Policy Planning Staff, U.S. Department of State, 1950-53.

Arlington, Virginia
June 11 and June17, 1975

and

Northeast Harbor, Maine
August 4, August 5, and August 6, 1975

by Richard D. McKinzie

[Notices and Restrictions | Interview Transcript | List of Subjects Discussed | Additional Nitze Oral History Transcripts]


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 It may not be published in full except by permission of the Harry S. Truman Library.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 July, 1990
Harry S. Truman Library
Independence, Missouri

 

[Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed | Additional Nitze Oral History Transcripts]



Oral History Interview with
Paul H. Nitze

 

Arlington, Virginia
June 11, 1975
by Richard D. McKinzie

Summary Description:

Topics discussed include the Dillon, Read, and Company; administrative assistants to President Roosevelt in World War II; Office of Coordinator of Inter American Affairs; International Basic Economy Corporation; conscription law; Board of Economic Welfare; Combined Raw Materials Board; War Production Board; Reconstruction Finance Corporation; procurement of strategic materials in World War II; Foreign Economic Administration; foreign property disposal; Strategic Bombing Survey; Lend lease program; Quartz crystals for military radio communication; Joint Strategic Target Selection Group; the decision to use the atomic bomb on Japan; Japan's decision to attack Pearl Harbor; surrender of Japan; effects of atomic bombing of Hiroshima and Nagasaki; postwar missions of American armed forces; Office of International Trade Policy; U.S. State Department Policy Planning Staff; Marshall plan; balance of payments policy; Committee for European Economic Cooperation; origins of Point IV program; Truman Doctrine; Trieste question; NSC-68; Joint Strategic Survey Committee; nuclear war strategy; Korean War; dismissal of General MacArthur; North Atlantic Treaty Organization; German rearmament; French Indo China; Middle East oil development; Iran oil controversy; transition to Eisenhower administration; defense budget in Eisenhower administration; and Spain and NATO.

Names mentioned include James Forrestal., Paul Shields, Franklin D. Roosevelt, Thomas Corcoran , Benjamin Cohen, James Rowe, Oscar Cox, August Belmont, Cordell Hull, Henry Wallace, Henry Morgenthau, Jr., Harry Hopkins, Leo Pasvolsky, Arthur Krock, Will Clayton, Ferdinand Eberstadt, Nelson Rockefeller, Donald Nelson, William Burden, Charles Harding, Josh Figueres, William Knox, William Draper, George C. Marshall, Henry Stimson, Jesse Jones, Carl Spaeth, Milo Perkins, Cresswell Maku, Morris Rosenthal, Monroe Oppenheimer, Temple Bridgeman, Alan Bateman, Theodore Kreps, Willard Wirtz, Pierre de Lagarde Boal, George Ball, Leo Crowley, Harold Starr, Lucius Clay, Guido Perera, Franklin D'Olier, Henry Alexander, Victor Emanuel) Henry Riley, Don Hochschild, Simon Strauss, Harry S. Truman, Leon Pearson, Charles Thornton, Henry H. Arnold, J. Fred Searls, Muir Fairchild, Orvil Anderson, Frederick Castle, Carl Spaatz, Walter Rostow, Solly Zuckerman, Philip Farley, Rensis Likert, Albert Speer, Wolfgang Sklarz, J. Kenneth Galbraith, Burton Klein, Trevor Roper, Rolf Wagenfuehr, Phyllis Nitze, James F. Byrnes, William Leahy, Joseph Alsop, Albert Wedemeyer, Douglas MacArthur, Charles Willoughby, Robert Richardson, Prince Fumimaro Konoye, Marquis Kido, Lauris Norstad, Forrest Sherman, H.V. Kaltenborn, Ralph Ofstie, Thomas Moorer, Charles McCain, Jock Whitney, William Jackson, Clair Wilcox, Otis Mulliken, Dag Hammarskjold, Joseph Jones, Dean Acheson, Charles Bohlen, George Kennan, Charles Bonesteel, George Lincoln, Robert Tufts, William Phillips, William Bray, Harold Glasser, Oliver Franks, Richard Bissell, Thomas Blaisdell, Paul Hoffman, Robert Lovett, John Taber, Ernest Gross, Thomas Connelly, William Y. Elliott, Charles Burton Marshall, Walter Judd, Sol Bloom, John Lodge, Christian Herter, Phil Watts, Robert Lovett, Arthur Vandenberg, Alben Barkley, Kenneth McKeller, Jefferson Caffery, Robert Murphy, Mauricio Hochschild, Richard Coudenhave Kalergi, Eugene Loebl, W. Averell Harriman, William Draper, Harry Dexter White. V.I. Chuikov, George Kennan, George McGhee, James Reston, Clark Clifford, Loy Henderson, Robert Joyce, Sherman Kent, Robert Le Baron, J. Robert Oppenheimer, Edward Teller, David Lilienthal, Ernest Lawrence, Louis Johnson, H. Freeman Matthews, Truman Landon, Alexander Sachs, John Muccio, John Foster Dulles, John Ferguson, John Paton Davies, Dwight D. Eisenhower, Andrew Corry, Samen Tsarapkin, Jacob Malik, Forrest Sherman, Niles Bond, C. Turner Joy, Arleigh Burke, Chester Clifton, Omar Bradley, Arthur C. Davis, Joseph Collins, Frank Nash, Royden E. Beebe, John McCloy, Robert Schuman, Ernest Bevin, Herve Alphand, Charles E. Wilson, Emmett Hughes, Bedell Smith, Milton Eisenhower, Everett DeGolyer, Walter Levy, Calouste Sortis Gulbenkian, Richard Wigglesworth, Mohammed Mossadegh, John W. Snyder, William Martin, J. Howard McGrath, Leonard Emmerglick, Henry Fowler, Clement Attlee, Harold Linder, Kennett Love, Herbert Hoover, Jr., Henry Cabot Lodge, Robert Cutler, Alfred McCormack, Frank Wisner, Henry Owen, Tom Mann, and Francisco Franco.

 

[1]

MCKINZIE: Mr. Nitze, maybe one place we could start is, how you came into Government service. We want to start at a very early stage in your career, and you might want to talk about some of your background before coming into Government.

NITZE: I might begin with an episode in the spring of 1940. I think it was about the time the French collapsed at Lyons and the Germans were clearly going to move through France and that France was finished. It was about that time that I was a partner in Jim [James T.] Forrestal's Dillon, Read & Company and Jim Forrestal asked me to come into his office; he had something he wanted to discuss with me. And what he had to discuss was the fact that Paul Shields, who was the senior partner of Shields & Co., had been in to see him after having talked with Franklin Roosevelt in Washington. Mr.

 

[2]

Roosevelt had said it appeared as though the United States might be in danger: that Hitler might be able to consolidate his position in Europe, that the position of England was uncertain, that Hitler might decide to go down through Spain into Africa, and that we might be involved in the war, or at least in a very serious confrontation with Hitler. In the past, he [Roosevelt] established his political position by being against Wall Street and the monied interests and had taken the position that they were the "they" and he was representing the "we" against that "they," the monied interests in the United States. Now, the potential enemy was Hitler; this would require greater national unity.

Roosevelt wanted to build a bridge with his former opposition in order to decrease the tension and friction within the United States. In order to do so, he wanted to have a man who was highly respected by the Wall Street community, who also was a Democrat, to come and be a member of his staff, one of the "silent six" administrative assistants to the President. The Congress had authorized six administrative assistants to the President with the proviso that they would not be entitled to have any staff of their own except a secretary, and that he [Roosevelt] had asked Paul Shields his advice as to who would be the best man to

 

[3]

fit that role. Shields had suggested to him that the best man he knew of was Jim Forrestal, who was highly regarded by the Wall Street community and was a Democrat. Forrestal's question to me was, should he or should he not do it? The first question that I asked Forrestal was, did he think he would be any good if he went down to Washington? He said he wasn't at all sure that he would be. He said that he understood the Wall Street business but he'd never had had any experience at all in Washington and wasn't at all sure that he would be effective there or could be effective. The second question I asked him was, if you go down there and find that it's an ambience in which you can't be effective, what happens next?

He said, "Well, under those circumstances I guess I would return to Dillon, Read & Company."

I said, "Well, that wouldn't be so bad, would it?" Then the third question I asked him was, "If you turn this offer down, will you ever have any feeling of regret that you failed to give yourself a chance at working in a wider framework?"

He said, "Yes, I think I will have that feeling."

I said, "Under those circumstances, it seems to me you've answered your own question." "If you go down to Washington and it doesn't work, you don't lose anything.

 

[4]

If you turn the offer down, you do lose something because you will always have this feeling of regret that you haven't given yourself the chance."

The upshot of that was that he accepted Roosevelt's invitation to come down as one of his six administrative assistants, along with the others who were [Thomas G.] Corcoran and [Benjamin A.] Cohen and Jim [James H., Jr.] Rowe and Oscar [S.] Cox; and I forget who the others were.

MCKINZIE: Steve [Stephen T.] Early, was he ...

NITZE: I don't remember whether he was there then or not. I'm not 100 percent sure whether Oscar Cox was really one of the administrative assistants or whether he was in the Department of justice, but in any case, he was around the White House a great deal.

So, Jim went off to Washington and I continued to work on Dillon, Read & Company's business and was down in Louisiana with a man by the name of August Belmont, working out some financing for the United Gas Company. We got that deal all worked out and then went fishing, bass fishing, in a lake north of Shreveport, Louisiana, that Sunday and came back to the hotel that night and there was a telegram from Forrestal which said, "Be in Washington Monday morning. Forrestal." So, I took the

 

[5]

plane to Washington and appeared in Forrestal's office, which was in the Old State War Navy Building which is now the Executive Office Building and he had a very fine office on the first floor there with one secretary, a Miss Reynolds. I asked him what this was all about and he said, "I want you to sit at that desk over there and help me."

I said, "Well, on who's payroll will I be?"

He said, "Well, I'm not authorized by law to have any assistants, but I need help. I want you to sit at that desk and help me."

I said, "Well, on who's payroll will I be?"

He said, "Well, Dillon, Read & Company will continue to pay."

I said, "Is that proper?"

He said, "It doesn't make a damn bit of difference whether its proper, this has to be done."

Then I said, "Well, where do I live?"

And he said, "Well, I've just rented a house on Woodland Drive and you come and live with me in that house."

So I did. But it turned out that Roosevelt was not really using Forrestal in the function that he had gotten Forrestal down for. An issue had arisen with respect to Latin America. Cordell Hull had one view

 

[6]

with respect to Latin America; his principal policy interest was beneficial mutual multi lateral trade and his deepest antagonism was against the Argentinians because they were not cooperating on anything.

Henry Wallace had an entirely different view. Henry Wallace felt that the future lay to the left; that the United States had to take leadership toward the left in order to be in the forefront of the evolving world situation.

[Henry, Jr.] Morgenthau had still a different point of view. His central interest, of course, was the defeat of Hitler and the rescue of the Jews, and penalties to the Germans for their treatment of the Jews.

MCKINZIE: Is it also safe to say that Morgenthau was extremely conservative, financially and economically, in the kind of advice he was giving the President?

NITZE: I don't think that was the deciding principle about Morgenthau. I think that it was basically a hatred for Hitler and his group. The differences between these three were so great. Harry Hopkins was then, I guess, Secretary of Commerce and living in the White House but acting as Secretary of Commerce. And Harry was unable to resolve these differences between Hull, Wallace, and<