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Dr. John Parke Young Oral History Interview

 

Oral History Interview with
Dr. John Parke Young

Chief of the Division of International Finance, U.S. Dept. of State, 1943-65, and a member of official delegations to several international conferences. Also attended the inaugural meet-ing of the International Bank for Reconstruction and Development and the International Monetary Fund in Savannah, Ga. (1946).

Pasadena, California
February 21, 1974
by James R. Fuchs

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

 


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 It may not be published in full except by permission of the Harry S. Truman Library.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 December, 1975
Harry S. Truman Library
Independence, Missouri

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

 



Oral History Interview with
Dr. John Parke Young

 

Pasadena, California
February 21, 1974
by James R. Fuchs

 

[1]

FUCHS: I wonder, Mr. Young, if to begin you might not give us a little bit of your background, where you were born and your education and then how you happened to become associated with the Federal Government?

YOUNG: Well, I was born in Los Angeles just before the turn of the century, and educated in Occidental College. Then I went to Princeton University for a Ph.D. in economics. After taking my degree I stayed there for a couple of years and taught. Then from there I became Director of the Foreign Currency and Exchange Investigation of the United

 

[2]

States Senate. I spent about two years, part of it in Europe, studying the post-World War I currency problems, the hyper-inflation in Europe and the effect upon the United States. I visited 15 European countries interviewing leading economists, bankers and government officials. That was where I first became acquainted with Keynes. We had a staff of economists in Washington and published a two-volume report. This contained articles by leading economists and bankers, such as Keynes, Irving Fisher, Gustav Cassel, etc., who put their views in writing for our report.

After that I became chairman of the Department of Economics at Occidental College and in order to supplement my academic income organized an investment counsel firm, which turned out to be quite successful. And then I was invited by Professor [Edwin W.] Kemmerer of Princeton to join a Commission of Financial Experts to the National Government of China. The National Government wanted someone to come out there, a group of us, to help organize

 

[3]

their finances.

FUCHS: What year was this, Dr. Young?

YOUNG: We spent the year '29, a little over a year, in Shanghai and traveling throughout China; traveling part of the time with T.V. Soong, the Minister of Finance, helping to organize the finances. After the year I became sick with hepatitis and my wife had typhoid, so we came home, back to Occidental College.

When the war broke out, the Second World War, I was invited to go to the Department of Commerce, as liaison with the Board of Economic Warfare. So, on about a week's notice I packed up and we moved to Washington right after Pearl Harbor, between Christmas and New Years.

I was with the Board of Economic Warfare for a short time. I found that very disillusioning; there was chaos and nobody knew clearly what his functions were or assignments. Leo Pasvolsky,

 

[4]

Assistant to Secretary of State Hull, pulled me out of that mess. I had known Leo before and was telling about the mess in the Board of Economic Warfare and he said, "Well, why don't you come over to the State Department, we could use you here." So, I did; I was delighted to go.

Leo was organizing a group for postwar planning. There were two groups, one on political studies and one on economic studies, and I was in the group on economic studies. In that group I was concerned particularly with postwar financial problems. My early assignment, I guess the first one, was to work out something on what we would do about reparations after the war. We did not want reparations, but we knew other countries would, our Allies.

Julian Wadleigh and I worked together for a couple of months on this project. Later Julian left the Department and confessed to his Communist connections, which I believe had been broken some

 

[5]

years earlier than my association with him. I think he was disillusioned with the Communists. But anyway he disappeared from the scene after his confession.

FUCHS: Did you have any idea when you were working with him prior to his confession that he had had Communist leanings?

YOUNG: No, none at all. Julian was very careless about his person. He would come to the office unshaven, with baggy clothes, and shoes that probably hadn't been shined for months; but he was an agreeable fellow and we got along very well. I never had any hints of his communism, and I think he had completely broken with the Communists at that time. But he did tell me once that when he first came to the Department he had almost nothing to do and he spent a lot of time going over documents, records and so on; but that gave no intimation that he was a Communist. I don't think he was at that time in fact.

 

[6]

FUCHS: Was Leo Pasvolsky your immediate superior?

YOUNG: No, Leo Pasvolsky was the Special Assistant to Secretary of State Cordell Hull, and he was very close to Cordell Hull. He had an office next door, was in and out all day long. It was said that he was so close to Cordell Hull that Hull wouldn't lift a finger without first speaking to Leo. In other words, Leo was a very influential person in the State Department.

I had known Leo for a good many years. The immediate person in charge of our group was Leroy Stinebower and a very competent high type person. And my assignment became (after my work with Wadleigh), in the financial and economic development field. At that time the Treasury, under the direction of Harry White, had prepared a plan for

 

[7]

an International Monetary Fund and a World Bank. They were combined into one document; later he separated the Fund document from the Bank plan. His main interest was in the Fund. He was chairman of an inter-departmental committee called the American Technical Committee, and we met, oh, I suppose once or twice a week over a period of a good many months. The membership of that committee changed from time to time. It had the senior people from different branches of the Government, Federal Reserve and so on, and we put together the original charter, or Articles of Agreement for the IMF and the Bank -- the International Bank for Reconstruction and Development.

Leo Pasvolsky was not satisfied with this committee's emphasis on the Fund, and the Treasury leadership. He asked if we could have a State Department plan for a Bank. Harry White's interest was in the Fund.

I was asked if I would put together a plan for an international bank. So I did. I spent quite a

 

[8]

bit of time preparing plans for a Bank. It was designed to help finance postwar reconstruction, and also aid the less developed nations. It was called at that time in the State Department an International Investment Agency. My proposal was transmitted to Secretary [Henry, Jr.] Morgenthau of the Treasury by Adolph Berle, the Assistant Secretary of State, who was interested in the subject.

My plan was similar in some respects to the Treasury plan, but it differed such as in proposing a special fund for rehabilitation and reconstruction; a fund that would be available on different and more lenient terms from the normal lending terms of the Bank. We felt that the immediate need after the war was for funds, and that these countries were broke, devastated, and couldn't borrow on normal terms, as was provided in the Treasury plan. This was an important difference. The work of Harry White's committee went forward

 

[9]

actively. I think I might say here a little bit about the personality of Harry White.

FUCHS: Yes, I'd like that.

YOUNG: He was very anti-State Department, as is well known. The story which I heard, which I gather was correct, as to the origin of this anti-State Department attitude was that soon after he joined the Treasury Department he persuaded Morgenthau to send him to London. He went over to London and was calling on the Bank of England people, the British treasury, and elsewhere, and not reporting or keeping in adequate touch with the American Embassy in London. He was independent operator, and the London Embassy couldn't control him. The upshot of it was the Embassy asked to have him recalled to Washington, which was done. And, of course, Harry White was furious about being recalled at the request of the Embassy. That was the story I heard and I believe it was probably

 

[10]

correct.

Well, Harry White was a difficult person, a very rude person, and rather slippery. You couldn't rely on what he would tell you. You thought he'd agreed to something and a few days later he would deny that he agreed to that: "You must have misunderstood me." It was very difficult to do business with him. He was a very competent person, extremely competent and very good to his own people in the Treasury. So, my work on the committee with Harry White was interesting. Put it that