William K. Divers Oral History Interview, April 21, 1970

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 It may not be published in full except by permission of the Harry S. Truman Library.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 September 1971
Harry S. Truman Library
Independence, Missouri

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HESS: All right, to begin today sir, in one of your scrapbooks I found a reference to a letter you wrote to J. Howard McGrath on April 11, 1952 concerning his resignation and I'll quote: "I am disappointed that you are no longer Attorney General of the United States, but I admire you for having the courage of your convictions." And the scrapbook also contains Mr. McGrath's note of thanks in reply to you dated May 1st. What do you recall about the events surrounding the resignation of J. Howard McGrath?

DIVERS: Oh, I think there was some difference of opinion between him and other members of the Cabinet. I don't remember really what the situation was, do you?

HESS: Well, it was the questionnaire by Newbold

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Morris. Newbold Morris had been called down from New York City and had been given, or worked up, a questionnaire on financial matters of a good many members in the Government and they were going to send the questionnaire around and various people in Government did not like that. Do you recall that, Newbold Morris?

DIVERS: Yeah, I recall something about it. I wasn't familiar with the details because Raymond Foley, who was then at the Housing and Home Finance Agency, was very strict about any outside interests of anybody in his organization. He didn't believe in accepting gifts from anyone, or free trips, or . . .

HESS: Hotel bills or anything like that.

DIVERS: . . . family accommodations at the Eden Roc for year after year like Senator [Birch] Bayh had just admitted he accepted. So, we weren't

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particularly interested in this situation. I do think that with such things, that it's better to make them prospective rather than retroactive, and I had the impression that that was Howard McGrath's principal objection to it. In other words, that he thought that after men had been appointed by the president, qualified and possibly confirmed by the Senate, and had been performing for several years, that it was out of order to bring somebody in from the outside to probe into their past almost. And I doubt whether Morris' questionnaire, if it was used, ever accomplished anything. I don't recall any scandals in the Truman administration, there were a couple of little things that were blown up out of all proportion, but, generally speaking, I think it was one of the most honest and conscientious administrations in our national history.

HESS: We mentioned in our last interview that you worked

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with J. Howard McGrath in connection with the Long Beach case. Were there other occasions were there many occasions when you worked with the Attorney General?

DIVERS: No. No, it was primarily confined to litigation like the Long Beach case. That was the principal one I remember, but we did have conferences from time to time. For example, establishing policies with reference to the actions that the Federal Home Loan Bank Board would take when our examiners might find evidence of violation of Federal law, but some of my predecessors had taken it upon themselves to have the staff evaluate the evidence and decide whether or not it should be sent over to the Attorney General. On the other hand, I thought that that was the Attorney General's responsibility and his and he was more expert in the field. And our Board, at my request adopted a policy

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of sending all evidence of violation of Federal law over to the Attorney General and let him decide whether there should be a prosecution or not.

HESS: Now, J. Howard McGrath had been Chairman of the Democratic National Committee in 1948 at the time that he was a Senator from Rhode Island. Do you recall anything in particular about him or were you particularly acquainted with him at this time?

DIVERS: No, I was not closely acquainted with him, but I did know him, because his brother Russell McGrath, was then and is now, a managing officer of a savings and loan association, a Federal savings and loan association in Rhode Island. As a matter of fact, I'm not sure but what I believe Howard McGrath was the managing officer of that association before he became Senator.

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And, in any event, Howard McGrath was came to savings and loan meetings with his brother Russell, and it was there that I met them and their wives, and I really have been closer to Russell McGrath than I have to Howard although Howard did have a home up near Woodrow Wilson High School here in the District which was just a few blocks from where we lived.

HESS: And also in your scrapbooks I found an invitation to you to attend a reception at the White House on May 19th, 1952. Would you recall if you went to that particular reception? Why I ask, this is not too long after Mr. Truman had said at the Jefferson-Jackson Day dinner, that he was not going to run for--that was on March 29th and this was at a period of time that they were having a little difficulty getting someone firmed up for the Democratic nomination. Do you recall if you went that time?

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DIVERS: Well, if I had an invitation I'm sure I went.

HESS: Do you recall the President saying anything about the difficulty they were having getting someone to run for the Democratic nomination?

DIVERS: No, I don't.

HESS: Were you present at the Jefferson Jackson Day dinner at the National Guard Armory that night when he announced that he was not going to be a candidate for re-election in '52?

DIVERS: I certainly was. My wife and I were there and we had I'd made arrangements for a substantial number of people . . .

HESS: Your usual large group.

DIVERS: Yeah, And when Mr. Truman made his

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announcement, there was a pause, a shock. I mean you could just feel the shock going through the crowd and then there were spontaneous cries of, "No! No! No!" all over the auditorium and then there was a buzz of people that I doubt whether they heard the rest of what he had to say almost. It was a memorable evening. I recognize the reasons why he didn't want to run. I think that the principal reason was Mrs. Truman, but I still feel that he would have made an excellent President for another four years.

HESS: After his announcement that he did not intend to run, who do you think would be a strong, or the strongest candidate that the Democrats could put up that year? Do you recall?

DIVERS: I suppose Adlai Stevenson.

HESS: What did you know about Adlai Stevenson at

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that time?

DIVERS: Very little. I wasn't even acquainted with him.

HESS: What was your opinion of Mr. Stevenson after you became more familiar with his background?

DIVERS: Oh, I thought he had a nice personality, and I think that he probably would have made a better than average President. He leaned a little bit more toward the intellectual side than President Truman did, but I guess that the "intelligentsia" should be represented once in a while.

HESS: Were you present at any time that he spoke during the campaign? Did you go to the convention?

DIVERS: No, I didn't go to the convention, but no, I don't--well, I'm sure that I attended affairs

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where he was present, but I don't remember what they were.

HESS: Do you have any other recollections of the campaign of 1952?

DIVERS: No, I don't. I don't have much recollection of that campaign. My only recollection (I don't think I've said this before in our discussions), my only recollection was after the campaign. Well, in the first place, after Mr.--I know I told you about taking my family over to the White House, my daughters, that was after Mr. Truman announced that he was not going to run again, because he had all the cares of the world on his shoulders prior to the day that he announced that he was not going to run. After he announced he was not going to run I didn't feel that I would be imposing on him if I took some of his time, otherwise it was my--I made an effort to relieve him of as much as I could, not bother him.

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HESS: Do you think he appeared--did he appear more relaxed after his announcement, when you saw him?

DIVERS: Yes, I think he did. I think that he was beginning to feel the weight go off of his shoulders.

I started to tell you about after the election, and when President Truman was leaving the White House and going back to Missouri. He went on the B&O Railroad, went through Silver Spring, and John Carroll, Senator John Carroll and his wife Dorothy from Colorado were on the same train. I mean the Trumans knew they were there. I mean they were--and I don't recall any big delegation accompanying the President out there. I mean that I think that it was rather limited. But Senator Carroll knew of my admiration for President Truman, so I took my wife and daughters out to Silver Spring at the

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B&0 station, and when the train stopped there, why Senator Carroll had President Truman wave to me out the window. He tried to get him to the platform, but he didn't have time. So, we got to say good-by.

HESS: In your scrapbook, I've found an invitation from Stephen Mitchell who was Chairman of the Democratic National Committee, for you to attend the meeting at the Mayflower Hotel on election night in 1952. Do you recall if you went there?

DIVERS: No. No, I didn't. I didn't go, I'm sure that invitations were sent out to all of the substantial contributors, probably, and I probably went to bed early that night.

HESS: Were you surprised that General Eisenhower won or not?

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DIVERS: I was surprised that he won by as big a margin as he did, yes. I thought he probably would win, but I didn't think he'd win the way he did.

HESS: What do you recall about the transition from the Truman administration to the Eisenhower administration and how did that affect you?

DIVERS: Well, when General--when President Eisenhower was elected I recognized that there would be some changes in the executive branch of the Government.

HESS: Did you think that you would be replaced as Chairman?

DIVERS: I assumed that I would be and I sent word, I don't know whether I wrote or sent word through one of the presidential assistants, that my resignation would be in the President's [335]

hand any time that he requested it. My resignation as a member of the Board, because the new President had the power to designate any member of our three-man Board as Chairman if he wished without any resignations from me as Chairman. So, a man named Jack Martin, who had been Senator Taft's assistant (that's I. Jack Martin), who was later appointed to one of the Courts by President Eisenhower, Martin was one of the presidential assistants and I told him to tell Sherman Adams or whoever was the appropriate person, that as far as I was concerned, I wanted to cooperate with them in making the change.

HESS: Did you have any dealings at all at this time with Sherman Adams in person, other than this?

DIVERS: Yes, in the spring of 1953, the rumor factory had it that Walter W. McAllister, Sr.

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of San Antonio, Texas had been selected to succeed me. Some question had been raised either formally or informally about his continuation of his relationship with the San Antonio Savings and Loan Association while he would be acting as Chairman of the Federal Home Loan Bank Board. Some people at the White House apparently thought that he should terminate his association completely. Others thought it would be proper for him to take a leave of absence, in effect, but hold on to his position at his association so that he could return to it.

HESS: Which course did he follow?

DIVERS: So far as I know, they finally decided to permit him to retain his position with his savings and loan association, and I must say, from the time I operated with him, that it

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had no influence on his activities or his decisions at all. I mean that he was just as--he was completely honest and aboveboard in all of his decisions and took just as many of them that were probably opposed by the trade associations and were contrary to his former position as a manager of any institution, he took just as many of those as he did in favor. But the period during which McAllister was being considered was unusually long because of this question that had been raised, and it was several months after he was selected by the White House and the rumors were going around, before his name was actually sent up to the Senate.

In the meantime, the members of the Federal Savings and Loan Advisory Council came to Washington for a meeting, and Walter McAllister had made arrangements for them to meet President Eisenhower with him. He was going to introduce

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them, and the White House decided that in view of the fact that this question was still unresolved about whether they would send his name up, they didn't want him to be present at the White House for this meeting with the Advisory Council. So, I had to introduce all of the members of the Federal Savings and Loan Advisory Council to President Eisenhower. And Sherman Adams was present when I took the members of the Advisory Council over and I remember saying to him, "I'm Bill Divers."

And he said, "You don't have to tell me who you are," or something like this.

HESS: He knew who you were?

DIVERS: Yes, I think that he was quite aware of it. Actually I represented the Eisenhower administration on four or five interagency committees. Shortly after President Eisenhower took office they appointed a number of interagency committees

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in order to consider policies, consider possible changes. I'm not sure but what it seems to me that, no I guess that the Hoover report was later, but they--I was representing the Federal Home Loan Bank Board on several committees that were on which the Treasury, the Federal Reserve, the Council of Economic Advisers, and the Controller General and so on were represented, and this was one of the reasons why that I thought that I should resign as a member of the Board. I was concerned that if any information got out that should have been kept confidential and might be important in terms of the Federal Reserve Board policies for example, ox policies of the Treasury, that people would look to me and say, "Well, there's the place where it leaked," whether or not I had anything to do with it. And it was also for this reason that I thought that any President coming in should have his own man

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in a position like this. So, I stayed on at the Board, with McAllister, long enough to acquaint him as well as I could with the staff and the policies, the procedures of the Board, the relations with the other agencies, and as soon as a second Republican member was appointed to the Board, why, I began to make arrangements to get off.

HESS: Now, Mr. [J. Alston] Adams was a Republican, was that correct?

DIVERS: That's right.

HESS: Why wasn't he selected to be Chairman? Any particular reason?

DIVERS: I think that--well, there were several reasons. I mean that I think the principal one probably was that he had been appointed by a Democrat and no person who has ever

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been appointed by Truman would be acceptable as Chairman of the--one of the agencies.

I think that a second consideration may have been that he was--had a mercurial temper, and people knew it. A third factor is that I think that there was a lot of pressure to replace anybody who had had connections with the Long Beach Federal case because the Long Beach Federal was still hoping that they would find somebody that would agree to some spectacular financial settlement of their litigation. And I might add that during the time that McAllister was Chairman, he took the same position that I had taken while I was Chairman with reference to the Long Beach Federal litigation, and although he pledged that he would look into it carefully, and he did, and he pledged that he would try to reach a settlement, and he tried, he wasn't able to make any progress any more than I could,

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because it takes two people to negotiate and when one's adamant and just wants everything, why, it's impossible to do anything, especially when you feel that they're not entitled to anything.

HESS: The Republicans are generally regarded as being somewhat more conservative than the Democrats. After they came in in '53 mere there any conservative policies instituted that affected the Federal Home Loan Bank Board?

DIVERS: No, the only thing that I could see is that I was criticized by my successor for only one thing; he said that I did not have a large enough staff. And the conservative Republican, during the course of the next two years, doubled the staff that the liberal Democrat had had before that.

HESS: Built a little bureaucracy there.

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DIVERS: Well, I think he was probably sold a bill of goods by the staff.

HESS: Oh! Did you have any dealings with the Secretary of the Treasury, Mr. [George M.] Humphrey?

DIVERS: No. No.

HESS: Had you had very many dealings with Mr. Truman's Secretary of the Treasury, John Snyder?

DIVERS: No, not many. We usually did business in connection with our financing with assistant secretaries who were specialists in the financial field. I saw Snyder on some occasions, usually social occasions, both before and after Mr. Truman was in office.

HESS: Now, what was your evaluation of his financial knowledge?

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DIVERS: John Snyder?

HESS: Yes.

DIVERS: Well, I didn't have any--I didn't have any facts on which I could base an opinion. If I had to guess, I would have guessed that he didn't know much about it.

HESS: Why would you make that guess?

DIVERS: Well, from the indications that he pretty much let people on the staff handle all the work and didn't seem to be involved in the decision making process, and I just assumed that he was a real smart man who knew how much that he didn't know about it, and let the professionals take care of it and not interfere with it.

HESS: How would you evaluate the success of the Federal Home Loan Bank Board in terms of its role as a link

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between Government and private business?

DIVERS: Well, I would--I think that it's--it has been very successful in this capacity. You must remember that my predecessor, John Fahey, was doing business as a strong government which had been called upon to revive a dying private business, during the depths of the 1932 and '33 depression, so that people who came from private business into the Federal Government had an attitude that there had to be a lot of changes made, and that the Government should insist on these changes, and the Government made financial assistance available through the Federal Home Loan Bank system on a rather autocratic basis.

By the time I took office, business had resumed part of its respectability and I think that Mr. Truman encouraged this strongly.

I always felt that the--and I made some speeches, especially in Texas, to the effect

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that the savings and loan associations were one of the finest examples of small business in existence, because at that time there was no one association that owned--that had over 1 percent of the business, whereas in the steel field, in the automobile field, in other fields that I could that are too numerous to mention, there would be only four or five companies in the business, whereas here we had six thousand savings and loan associations, none of them large enough to control 1 percent of the assets of the business, so that I felt that we were encouraging a very fine example of private enterprise, small business, and I did everything that I could to unshackle them. And I think it was shown by the fact that the growth between 1947 and 1954, when I got off the Board was very . . .

HESS: This is in the Fact Book?

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DIVERS: Yeah, was great. Just a minute and I’11 find the figures for you.

HESS: All right.

DIVERS: At the end of 1947 when I was appointed Chairman of the Bank Board, the assets of all of the savings and loan associations in the United States were 9.8 billion dollars and at the end of 1954, just seven years later when I left the Board, the assets were 27.3 billion dollars, so that there was a 200 percent growth over a period of seven years, which is about the best performance that the savings and loan business has ever had. Last year they grew about 5 percent.

HESS: One of the men who came on the Board in 1953 was Kenneth G. Heisler. Who was he? What had been his background?

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DIVERS: He was General Counsel of the Federal Home Loan Bank Board at that time. And prior to that he had been on the staff of the Bank Board since the early thirties. He was from Washington State and he had been educated at Harvard. He was--he had a farm up here around Point-of-Rocks, which he sold part of recently for a million dollars cash.

HESS: Oh, boy, some farm! I suppose they are going to build houses on that. Is that right?

DIVERS: Yeah. He saved enough land for the shopping center.

But he had been General Counsel, and without any reflection on him, when there was a vacancy that was caused by the resignation of O.K. LaRoque, we began to look for a replacement, and frankly, we didn't look to the staff. We tried to get Fred Greene who was then president of

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the Federal Home Loan Bank of Des Moines, and his district included the State of Missouri, and who was a long-time friend and admirer of President Truman. The Federal Home Loan--the Des Moines Bank district also contained the Farm and Home Savings Association in Nevada, Missouri for which Mr. Truman used to be a salesman. But Bob Richardson was, I guess in his early sixties at the time and didn't want to make the move to Washington, and Fred Greene was his wife had a terminal case of cancer at the time and we could understand why he didn't want to come. And I think that we sounded out a couple other people and some of them were satisfied that Mr. Truman was going to be succeeded by a Republican and didn't want to make the move for a short time.

So, after making several other selections, why, we looked around and found a gold nugget in our back yard and Mr. Heisler was nominated;

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had general support from the savings and loan business, and from his own state, and took office and served until after President Eisenhower's election, at which time he resigned to become the executive vice-president of the National Savings and Loan League. And it was along about the same time when Mr. Adams resigned to become president of the Federal Home Loan Bank at San Francisco, and I was left to conduct Board meetings with myself until Walter McAllister was appointed, and then there were only two of us on the Board for some time until the next Republican Board member was . . .

HESS: Ira Dixon?

DIVERS: Ira Dixon, who had formerly been a clerk in the Senate Banking and Currency Committee and was a protege of Senator [Homer E.] Capehart of Indiana.

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HESS: He came in in 1954. Do you recall what part of the year it was, how long you worked with Mr. Dixon before you left?

DIVERS: It was toward the end of the year as I recall. I think that Mr. Dixon and I were only on the Board together for two or three months.

HESS: And then you left the--on the last day of December of 1954.

DIVERS: Right.

HESS: And since that time, since January 1, 1955 you have been associated with the Savings and Loan Foundation.

DIVERS: That's right.

HESS: Would you give me a brief description of what the Savings and Loan Foundation is, and

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your evaluation of its importance.

DIVERS: Well, the Savings and Loan Foundation was organized to promote thrift, home ownership and prudent money management. It was organized by people in the savings and loan business who had both a selfish and an unselfish reason for organizing it. The selfish reason was to help their business grow, and the unselfish reason was to--they recognized that by promoting thrift and prudent money management that they wouldn't get all the business that resulted, that a good part of it would go to their competitors, but they thought that it was important from the standpoint of the economy of the United States, and the future of the United States.

The Foundation was organized, largely through the efforts of a man named Ernest T. Trigg who was appointed in 1932 by President Hoover to serve as president of--as Chairman of

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the Board of the Federal Home Loan Bank of Pittsburgh. Mr. Trigg served under Hoover, under Roosevelt, under Truman, and also under President Eisenhower.

To go back a little ways, while I was Chairman of the Federal Home Loan Bank Board, Mr. Trigg came to me and told me that he thought that it would be in the interest of the people at large if the savings and loan business would use national advertising to promote their business as well as the local advertising, to use national media such as magazines and television and network radio. At that time Mr. Trigg was also Chairman of the Federal Savings and Loan Advisory Council. The Council met twice a year with the Federal Home Loan Bank Board. The Council was created by Congress, by Federal legislation, to advise the Federal Home Loan Bank Board on matters current in the savings and loan industry.

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And Mr. Trigg, with whom I had a close relationship, came to me and asked me if I would have any objection if he introduced a resolution in the Advisory Council to this effect. Mr. Trigg had formerly been the executive vice-president of the National Association of Paint, Varnish and Lacquer Dealers and had served on the War Production Board during the war. He was the originator, I think, of the slogan "Save the surface, and you save all," and the "Paint up, Clean up," campaigns. And he was very enthusiastic about the savings and loan business although he had never occupied a paid position in the savings and loan business. I told him I had no objections to the resolution and he introduced it. It was passed by the Federal Savings and Loan Advisory Council, and as so often happens, the man who introduced the resolution was appointed chairman of a special

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committee to

HESS: He asks for trouble doesn't he?

DIVERS: . . . organize the campaign. Mr. Trigg who was then in his eighties, did an almost unbelievable job in getting subscriptions from a thousand savings and loan associations and the Federal Home Loan Banks for six hundred and fifty thousand dollars a year for three years to finance the first three years of this campaign. And in October--no, and the money was--the pledges were in on July 1, 1954. The Savings and Loan Foundation held its first election and the trustees--the trustees of the Foundation held their first--the first elected trustees, held their first meeting in August 1954, and in September 1, '54 they made their first :approach to me asking me whether I would serve as the executive officer of the Foundation.

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I don't know whether you're interested or not, I mean the office was in Philadelphia at the time. I had a home here in Washington, my children were in school here in Washington, and I told them that I would not take the job unless they moved the office to Washington. And in addition to that I didn't care for the salary that they offered me. It was more than I was getting on the Federal Home Loan Bank Board, but it was less than the presidents of the Federal Home Loan Banks were getting and I thought that this job at least should command that salary. So, there was a little negotiation and another meeting of the trustees, and they agreed to my proposals, my counterproposals, to their offers, and in November, in December, early in December I met with them in Philadelphia and I think by that time I had already sent my resignation to the White House and I have a letter on the wall

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here from President Eisenhower thanking me for my services and wishing me well in my undertaking, and I might even read into the record the inscription that he put on the autographed photograph there which reads: "For William K. Divers. With greetings and best wishes to a distinguished American. Dwight D. Eisenhower."

HESS: His letter is dated December 14, 1954.

DIVERS: So, I think that you can see that that is not a customary inscription and that they did feel that I had cooperated with them in making the transition from the Truman administration to the Eisenhower administration.

Actually, so far as the Federal Home Loan Bank Board was concerned, the Federal Reserve, the Treasury, the Controller of the Currency, and so on and so forth, there wasn't

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enough difference to be noticeable. I mean the policies were almost identical.

HESS: Fine. All right, what in your opinion were Mr. Truman's major contributions during his career?

DIVERS: Well, I think in the first place, that everybody recognized that it was possible for somebody with a background of self-education, almost, to reach the highest position in the United States.

I think that he was probably the--he certainly was the most outspoken President that I had--that it has been my experience to know, or not to know, but to know of even.

I think that, probably, he recognized the existence of and cultivated the silent majority long before it was recognized by a lot of other politicians. I think that this was Adlai Stevenson's,

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for example, I mean that he thought that the only people who existed probably were the liberal philosophers, and the young people that he associated with.

I think that--I don't know that I can I felt that he really was an outstanding example of honesty and integrity in Government even though some newspapers thought to the contrary. I think that that would about--were the most outstanding things that I think that he contributed. Of course, I'm not going to go into the other things. There are people that are a lot better qualified than I am probably. I know that as a citizen, I mean, somebody who didn't have anything particular to do with it, that certainly as you look back, that the Truman Doctrine would be the most outstanding accomplishment of the United States during that period, and I think that the outstanding event of his time in office was the

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dropping of the bomb.

HESS: What is your opinion of that? Do you think that the bomb should have been dropped?

DIVERS: I think so. There is no question in my mind but what it saved maybe a hundred thousand lives of people in the United States and I think that's a fair trade.

HESS: What is your estimation of Mr. Truman's place in history? Just, in your opinion, how do you think that he will be regarded about one or two hundred years from now?

DIVERS: Well, that's . . .

HESS: Strictly conjectural.

DIVERS: That's certainly conjectural, because I would there are so many things that can happen in the next hundred or two hundred years. If

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you ask me his place in history among Presidents that we have had, up to and including the present incumbent, President Nixon, my guess would be that Truman, and Roosevelt, and Eisenhower, would probably be listed pretty close to the top of the--of our Presidents at least would have been the top ten of the Presidents that we have had up to the present time.

There's every day (not every day), but very frequently I now hear people say that they recognize that Truman was a very good President and even some of the people who were among his greatest detractors and who made fun of him while he was President, now recognize his qualities.

I think there is one other quality that probably that should be mentioned and that's his leadership. I think that there was no question in the Government, while he was in

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office, as to who was the boss, and no disposition to second-guess him. I mean all that we needed to know, really, was what direction he wanted to go and everybody was happy and willing to go in that direction. Of course, I admired all his policies, I mean, I didn't have any he didn't do anything while he was in office that I disagreed with.

HESS: Now, one general question on General Eisenhower, President Eisenhower: Why would you rate President Eisenhower as high as you do? Why do you have such esteem for Eisenhower?

DIVERS: Well, I--it was--he gave the country what it needed at the time. It was more a matter of timing than anything else. We had to catch up after the war and he gave us an opportunity to kind of lick our wounds and take care of our personal needs and provided a climate in which

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we could consolidate business and get ready for another advance in terms of our standard of living.

HESS: Do you have anything else to add on Mr. Truman, the Truman administration, or the Federal Home Loan Bank Board?

DIVERS: No, except this, that Mr. Truman was my kind of Democrat. I belong to the Democratic Party and supported it, so long as Mr. Truman was there. But the Democratic Party, I think, has grown away from the party of Mr. Truman. And just to show you how far I've gone, I mean that I voted for Mr. [Richard M.] Nixon in the last election, because his--the philosophy of the Republican Party now is closer to that of the Democratic Party of Truman's time.

HESS: You think the present day Democrats are too liberal perhaps?

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DIVERS: Present day Democrats are not--well, in the first place I don't think they know where they're going, I don't think they know how to get there, and I think they'll also change their mind a few times before they get anywhere. I think that President [Lyndon B.] Johnson, and the Democratic Congress, contributed to a very unsafe and unsound condition for the country in terms of our foreign policy, in terms of our financial condition, in terms of our domestic situation, and I just hope that it's not too late for a Republican President and a new Congress (I don't care whether they're Democrats or Republicans, but I'd just as soon get rid of about 80 percent of the members at the present time), would come in and I hope that it's not too late for them to remedy it, because if we don't I can see possibilities of a dictator coming over the hill. And it won't be a

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military man, because I don't think the people would accept that, it would have the support of the military and I've got my man picked, but I won't put him in the record.

HESS: You won't put him in the record?

DIVERS: Oh, I'll tell you, if you want to know.

HESS: All right, who is it?

DIVERS: [Vice President Spiro T.] Agnew.

HESS: You think that he would make a dictator?

DIVERS: Oh, I think that I think that the people who would support a dictator, would probably support him, and I'm not--believe me I'm not saying this lightly, I mean this is--I'm not trying to be flippant.

HESS: You think there is a real danger?

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DIVERS: I've thought about this, and I think that if we continue to have disorder; if we continue to have and permit, an armed revolution, which is going on at the present time, sooner or later the people are going to insist on order, and we'll either have vigilantes or we'll have a dictatorship because people know that that will work. I mean you get a lot of other things you don't like maybe with it, and I'm not saying that I'm in favor of it either, I*mean I'm just or that I would encourage it, but I just think the people in Washington, for example, are not going to tolerate for much longer being robbed on the street or in parking lots or in their homes, all you have to do is to read the account of the previous day's assaults and rapes and robberies and you see that you're not safe anyplace anymore. And this wasn't true when we had a different type Congress and Supreme Court.

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HESS: As a man who is well versed in financial matters, do you see any danger in the present slowdown in business, snowballing and turning into a full-fledged depression?

DIVERS: Yes, I think there is danger. I think that the administration recognizes the danger and also recognizes that there--that they couldn't adopt the policies that they have adopted without it being dangerous. I can see that it would be quite possible that once the deliberate slowdown got to where they wanted it slowed down, that the deceleration would be so great that it would just carry on. But I don't think that that's going to happen. There are a lot of forces in our economy that are just being unleashed, which will, I believe, will pull us through to where we--I still think that the greater danger is inflation than recession. Yes.

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HESS: What forces are being unleashed at the present time that you mentioned?

DIVERS: Well, just one of them for example, the increase in Social Security rates which go into effect this month, I believe, and the retroactive increase, a lump-sum retroactive increase will be paid out later this month. Another force is the built in pay increases that depend upon the consumer index. Another force is the fact that the 95 percent of the people who are working, a good part of them are making more money than they ever did before, and have an inclination to spend it. Their spending has gone more in the direction of vacations and travel and things of this kind rather than conspicuous consumer items. I think this is indicated by the trends toward small cars rather than the large cars.

When I was in my twenties, my greatest aspiration was to own a Cadillac and now that I

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could own any kind of car that I want, I don't have any desire to own a Cadillac anymore. I don't even want to live in a great big home. My wife and I want to live in a modest apartment and have an average car, and if people don't accept us because we don't have a big car or a big home, why, it's all right with us.

HESS: That pretty well bring it to a close?

DIVERS: Yeah.

HESS: Fine. Well, we thank you very much for your interest and your time and your cooperation.

DIVERS: It was a pleasure.