[Notices and Restrictions | Interview Transcript | List of Subjects Discussed]
Numbers appearing in square brackets (ex. ) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
See also: Edwin G. Nourse Papers
Opened June, 1974
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Oral History Interview with
March 7, 1972
by Jerry N. Hess
HESS: All right, Doctor, to begin this morning, would you relate just a little of your personal background; tell me where you were born and raised and a little about yourself?
NOURSE: I was born in Lockport, New York, and both my father's family and my mother's family were New York State families. But I couldn't have been more than four months old, I think, when my mother took me out to Chicago, and I, by rearing, am a midwesterner and Illinoisan. My father was a supervisor of public school music in Chicago and we lived in a suburb on the west side. I went to a small, but fairly good for its time, high school, and had one year at Louis Institute, now a part of Illinois Institute of Technology, there in Chicago.
HESS: What were your favorite subjects in high school? What did you like to do, what did you like to study?
NOURSE: I liked it all, but I think that my chief interests centered on history classes and English classes. And I had some very good teachers of English along, and my family's been a writing family. My sister became a novelist you know, Alice Tisdale Hobart, has written thirteen books, ten bestselling novels.
I began then, what has carried through Cornell and my later work as a historian. I remember that I was chatting with Arthur Schlesinger, Sr. one time at a meeting of the Social Science Research Council, and he said, "Well, if ever there was a historian, you're..."
"Oh," I said, "hold on Arthur, I'm not a historian, I'm an economist."
He said, "Oh, yes, you're a historian. We accept you."
Some people have objected to my insistence in discussing economic, or broader social problems, in going back and getting historical perspective on them. So, clearly, my life's interest has centered around a literary and historical background, with particular studies in economics.
And that, if you want me to continue, has a story of its own. I went to Cornell with the idea of becoming
a civil engineer, because I had a strong mechanical twist, but I had this other interest so strong that I, in spite of my financial limitations, dreamed of a six-year course leading to an A.B. and also an engineering degree. But I was one of the victims of the typhoid fever epidemic that hit Cornell in 1903. And so when I came back I dropped my engineering interests and went straight for an A.B. degree.
But then, again, a special interest emerged on the agricultural side. If my father had been an Illinois farmer instead of a supervisor of public school music, I'd have been a farmer, but he had no assets or substantial income, so I compensated by becoming a pioneer in the development of agricultural economics; there was no such subject before. (You might be interested to look at a paper I wrote, a pioneer discussion, "What is Agricultural Economics?" in the Journal of Political Economy, written about 1917 or 1918.)
When I went back to Cornell after the fever I elected several courses in the college of agriculture. But I couldn't get into farming when I graduated, I had to work to help my sisters get their education.
So I taught in high school for two years, and then went on to a year of graduate work. I then went on to college teaching. This was at the Wharton School of Commerce and Finance, University of Pennsylvania.
HESS: That was 1909 and 1910.
NOURSE: That's right. And I conceived the idea of agricultural economics then. But I saw in that year what they had done in developing economics on its business side and I said to myself, "Well, farming is a business and it should have the benefit of this same sort of analytical and constructive treatment that business is getting in the schools of business."
And so I, with the assistance of J. Russell Smith, I switched, I dropped the Wharton thing and went pioneering out in the University of South Dakota, which was an agricultural college, and there was a sequence from there, you see, to the University of Arkansas and then the Iowa State College which was founded as an agricultural college. So, I went through developing, wrote the first real treatise on agricultural economics, which was my University of Chicago first book publication.
Now agricultural economics has developed with [Albert Gain] Black and [George Frederick] Warren and Cornell; Warren and Cornell as the farm management approach of the production side of economics, and Black at Minnesota as a more systematic economic treatment of the production time. I was on the other side of the tracks, making the marketing approach to agricultural economics. My doctor's dissertation, University of Chicago, was entitled, "Market Mechanism as a Factor in Price Determination."
And there, again, I had something of a pioneer development of my concept of the market mechanism as mediating between supply factors and demand factors to develop actual prices.
Here again we have a split, because there was a market mechanism which was particularly indigenous to agriculture, that is agricultural cooperation. So I became a pioneer and the first theoretician of the cooperative movement, publishing an article, the lead article, in the American Economic Review in December of '22, which started out, "Agricultural cooperation has been long on practice, but short on theory." And so I made a little treatise there of
what was the theoretical concept of the cooperative as contrasted with the corporate scheme of business and organization commensurate with the larger size of our American problems. So, from that article here we come to Brookings.
HESS: You came to Brookings in 1923, is that correct?
NOURSE: I was a charter member of the Institute of Economics. Harold Moulton, the first president, was an old friend of mine and he drafted me to develop the agricultural side. He of course, was a money and banking man himself and then trying to round out the Institute's program, to get a balanced staff, he got me on the agricultural side.
HESS: Who did you select as staff members for Brookings at that time to help you?
NOURSE: I brought two men with me from Iowa State College, Claude Benner, who had been in the banking department at the University of Michigan, I showed him my little fast footwork and…
HESS: Sometimes it's necessary to get good men that way isn't it?
NOURSE: Yes. The other one was Elmer Working, who had taken his doctorate at the University of Illinois, where they were also expanding farm management into agricultural economics. Then I later brought in Russell Engberg, who was a graduate student, I guess, at Iowa State University. Also when we came to our AAA study I brought in Harold Rowe, who had taken his doctorate, who had been a student, a senior student in my last year at Iowa State College, taken his degree at Minnesota, had gone to Massachusetts in agricultural economics work: Black had got acquainted with him there, and so between Black and me we brought him down into the working staff.
HESS: And then in 1929 you became director of the Institute of Economics, is that correct? 1929 to '42.
NOURSE: Yes, when the Institute of Economics was merged with the Institute for Government Research and the graduate school, the fellowship training branch, Moulton became president of the merged Brookings Institution and he designated me as the director of the Institute of Economics and I moved on so I was vice president of Brookings when I resigned to go on the Council.
HESS: You were vice president from 1942 until '46, and…
NOURSE: I resigned…
HESS: That's right.
NOURSE: …as vice president to become chairman of the Council.
HESS: Chairman of the Council of Economic Advisers.
NOURSE: You see, we had an obligatory retirement age of 65 and I was 63 at that time, so it wasn't too difficult to make the break, although I dropped a book that I had well underway, entitled Business Executives as Professional Men, growing out of my Price Making In A Democracy and that price series I had been working on.
HESS: How many books have you written; how many books and articles, approximately?
NOURSE: I have no idea how many articles, but they range from Quarterly Journal of Economics, to the farm magazines, Wallace's Farmer and Prairie Farmer and the like, and other popular publications. There must be several hundred of them. And books, I think, I have written
HESS: How many books did you start and not finish?
HESS: Two. All right now, before we proceed on with the Council of Economic Advisers, let's move back just a little bit. Doctor, what are your earliest recollections of Mr. Truman? When did he first come into the picture?
NOURSE: I don't think that I had ever followed his career. In those years I was very much absorbed in the work that I was doing at Brookings, growing out of our study of income there, the four books that we had, America's Capacity to Produce and Consume and so forth, and then going into this Price Making In A Democracy and then the one I was in the midst of, so he wasn't in my sights at that time and I think that the first time that I had met him, on a shake hands basis, was when Charlie Ross brought me into his office to answer the question whether I would become a member of the Council of Economic Advisers.
HESS: That's the first time that you had met him, is that