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Notice Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview. RESTRICTIONS Opened January, 1976 [Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed]
Oral History Interview with
July 17, 1973 By Richard D. McKinzie
RICHARD D. MCKINZIE: Professor Mason, perhaps the place to start would be to ask you how you became interested in Government service in the 1930's. I notice that you had already well established yourself at Harvard by 1937. I think that year you became a full professor and shortly thereafter began to do work for the Government. Could you narrate how all of that occurred? EDWARD S. MASON: Yes, my first Government assignment was as the co-director for the Labor Department's studies for the Temporary National Economic Committee. The TNEC, as it was called, was a
congressionally authorized commission set up to study economic concentration in American industry and problems of monopoly and competition. The Labor Department contributed some five or six studies and I was the co-director of those studies. That was my first Government assignment. MCKINZIE: Do you recall, had you known a number of people in Washington who recommended you for the position? Did you have a particular personal contact that got you into this kind of work? MASON: Well, of course, I knew a great many people in Washington. A lot of graduate students from Harvard had gone to Washington during the New Deal days to work for Government agencies. But I think that this particular assignment was a result of work that I had done on problems of monopoly and competition which was then my special field of interest. My second assignment was just before the United States entered the war when I served for a period as a
consultant to the Office of Production Management working particularly on raw material problems. I didn't go down to Washington on a permanent basis until 1941, as I remember it, when I joined the Office of Strategic Services. The OSS was divided, really, into three main sections; a research section, a secret intelligence section, and a section of "dirty tricks" or whatever you want to call it. And I was the deputy director of the Research and Analysis Branch, the Director of which was William Langer a Professor of History at Harvard. MCKINZIE: Did he convince you to join the OSS or did you volunteer for that service? MASON: No, he convinced me to join the OSS, and by the end of the war the Research and Analysis Branch was quite a sizeable organization with six or seven hundred professional people, and the position I held might well be called the position of chief economist of the OSS.
I also represented the OSS on the joint intelligence staff of the Army, Navy, Air Force, State Department, etc. I also represented the OSS on the Strategic Bombing Survey. So, those were my governmental connections before I moved to the State Department in December, 1944, to be deputy to Will Clayton, who was Assistant Secretary of State for Economic Affairs. MCKINZIE: Had you known Will Clayton before this? MASON: Just briefly, I hadn't known him very well. I had been on a few committees in which he was present. But I didn't know him particularly well. MCKINZIE: You were, of course, aware of his views about economics? MASON: Yes, and I had a tremendous admiration for Will Clayton. He's one of the really remarkable people I've met in the course of my life. And there's one episode during the six or seven months when I was his deputy that I remember very well. It was three or four days after
Roosevelt's death that Clayton had an opportunity of talking with President Truman and I remember his coming back and telling me, "I think this fellow is going to be all right." I had not met President Truman myself before I went into the State Department, and I did not see him many times in the course of my life. Usually, it was when I was on a commission appointed by him that I had one or two meetings with him. So. I did not know the President at all well. MCKINZIE: Might I ask you about what some historians are now calling the Hullian view of the post-war world, with which, I guess, Will Clayton could be associated. The view that the world we wanted at the end of the war was quite a different one from the one that existed before the war, economically. One in which there would be a great deal of economic integration, multilateral reduction of tariffs, that kind of thing. Was that the view, so far as you could perceive at
that time, generally shared by the economists that came into the Government during the war? Did you share it with Will Clayton, and to what extent could you at that time go to make some kind of reality out of it? MASON: Well, Will Clayton had very strong views on the tariff question. He was a free-trader from way back, and the Department at that time -- the economic side of the Department at that time -- took a very strong free trading position A position probably stronger than I would have taken myself, though, in general, I was quite sympathetic with his views. And outside of the trade area, of course, there occurred during the war 1941, '42, '43, '44, a great deal of thought and preparation for what later became the Bretton Woods Conference, dealing with the International Bank for Reconstruction and Development, and dealing with the questions of monetary policy later handled by the IMF. So, in general, Will Clayton was a "one
worlder," there was no doubt about that, strongly in favor, of increasing ties that would integrate the world economy and make it easy for money, capital, goods, and so on, to move freely from one country to another. And, in general, I found myself very sympathetic with those views. MCKINZIE: Do you recall having had any discussions with Will Clayton, or anyone else for that matter, about the role that the soon to be created United Nations might play in bringing that all about? Was there any hope, as you recall, that the United Nations might serve as some sort of a forum through which the "one world" of William Clayton could be realized? MASON: Yes. There was a good deal of discussion. You know Will Clayton, early in the war, had changed from a position in which he was a really strong supporter of the America First group of people and had been converted, I have heard, partly through the influence of his wife, to the position that he later espoused. Now, I can't
remember talking with him in any great detail about the United Nations; of course, we were both aware but had not participated in the Dumbarton Oaks discussion. He was invited to attend the San Francisco Conference, and since he couldn't go for the first week or so, I took his place there. I think I felt myself a little skeptical about what the United Nations would be able to accomplish. I felt that it would inevitably be dominated by a "large power" group and that everything depended on how the Soviet Union and the United States in particular would be able to get along after the war. I think that Clayton probably shared those views, too. He was devoted to the notion of a United Nations but perhaps somewhat skeptical as to what an organization would be likely to be able to accomplish. MCKINZIE: So then one could conclude from that that he believed that if his goal were to be realized it would have to be done either through
bilateral negotiations or some other multilateral economic system. MASON: I think he had more confidence in what you might call "functional relationships" among countries. Relationships dealing with trade, money, banking, foreign investment; international organizations having to do with a range of practical problems rather than an overall umbrella organization that would be mainly concerned with political relationships. MCKINZIE: When you came into that office, there should have been -- I hope perhaps you recall whether there were -- a great number of background papers. That is, work which had been done by various postwar planning groups within the State Department. Leo Pasvolsky headed up a large group during the war, and there were some contradictory plans. You had to deal with the Morgenthau plan, for example, on Germany, on the one side, and the plans that Pasvolsky's
group generated, on the other. And they weren't very compatible. Do you recall those kinds of papers? MASON: Well, neither Clayton nor I were at all sympathetic with the Morgenthau plan. I remember Clayton coming back from a talk with Roosevelt in a very distressed frame of mind. Roosevelt was, at that stage, a devotee of the Morgenthau plan and he told a story about his youth in Germany when in going around the countryside he had seen salt being made by sticks being dipped in brine and then the brine being shaken off from the sticks. And he said to Clayton that "Germany's got to go back to that kind of an economy." This horrified Clayton, and it horrified me. And I don't think I would hold that against Roosevelt particularly. He was then obviously in a state of extreme ill health and probably was not paying a great deal of attention to what he was saying.
MCKINZIE: When you left Will Clayton's service in July of 1945, did you still believe that there could be some kind of accommodation with the Soviet Union so far as economic settlements in Europe were concerned? Questions of reparations? Questions of restitution of property? MASON: No. I think that I would have to say that I was already becoming very skeptical? MCKINZIE: Were there any particular events that contributed to that skepticism, that you recall? MASON: Well, only reports that I had heard from people in the State Department and elsewhere about the difficulties of dealing with the Russians on shipments of lend-lease articles and things of that sort. And I believe there were already coming into the Department reports from Averell Harriman, who, if I remember rightly, was then U.S. Ambassador in Moscow, as to the difficulties of dealing with the Soviet Union.
MCKINZIE: And you did see those papers? MASON: Well, at least I knew what they were about. MCKINZIE: Why did you decide to leave Government Service in July of '45? MASON: Well, I'd already been in Washington a little over four years and I think it is extremely difficult for an academic person, if he wants to continue to be an academic person, to be away from it for much longer than that. Besides, living in Washington in that period was not particularly pleasant. I had a much larger and more pleasant house in Cambridge, and my wife certainly wanted to return to it and so did I. MCKINZIE: What induced you to return to Washington the following summer? MASON: The fact that I came back to Cambridge did not mean that I ceased to have an interest in the foreign economic problems and foreign policy
problems. And when I was asked by the State Department to go, along with my colleague J. K. Galbraith, to Germany to see General Clay and to write a couple of papers on U.S. policy towards Germany, I jumped at the chance. I, of course, had not been to Germany since the war and I wanted very much to see what the situation was like. MCKINZIE: What kind of background, do you recall, did you get before you made that special mission? MASON: Well, of course, I had read the State Department briefing documents on Germany. At that time, James Byrnes was Secretary of State, and Ben [Benjamin] Cohen was his principal advisor. Ben had written a good many documents about U.S. policies toward Germany, and when Galbraith and I were in Germany we talked with him, and also attended the conference at Stuttgart in which Byrnes spoke about U.S. policy toward Germany.
MCKINZIE: Well, the question I was going to ask you was whether or not any of your investigations could perceivably have had anything to do with the content of that Stuttgart speech. MASON: Well, possibly, because we, both Galbraith and I, had talked at length with Ben Cohen, who was the author of that speech. So, possibly our thinking and the memoranda that we were writing may have had some influence. MCKINZIE: Could you address yourself to your activities in Germany that summer -- discussions with General Clay and, I assume, quite a number of other people. MASON: Yes, though I'm hard put to tell you who I did talk to. I remember General Clay very well, because he's a very strong personality; and we saw him several times and spent perhaps two weeks in Berlin before going to Frankfurt and then on to Stuttgart, where Secretary Byrnes made his speech. We also went to Munich. And I
remember meeting at that time Ludwig Erhard who was not in any particularly important position, but I forget what position he was in at that stage. I also met Willy Brandt in Berlin. He had just come back from Sweden or Norway to Berlin and was trying to reestablish his contacts with the Social Democratic party. He made a very strong impression on me. Of course, all the Germans that one met at that particular time were not particularly aggressive. They were all laboring under the aura of defeat and that certainly had an effect on the impressions that they made on one. MCKINZIE: Could you talk a little bit about General Clay and his views as they pertained to the future of Germany? He had, as I recall, his own economic advisor, a man from the State of Michigan, James K. Pollock. MASON: Yes, I remember. He was a political advisor I believe. I think that his main economic advisor was Will Draper. And Draper had as
his advisor a chap named Don Humphrey, who is professor at Tufts University. Pollock was a political scientist and did not, I think, concern himself so much with economic problems. But, of course, Clay had a large number of advisors people working in Government affairs in general, including my colleague Robert Bowie, Laird Bell, and a number of others. MCKINZIE: Did you find any reason to take exception to their recommendations? MASON: No. I think that my views at that time were coming very much to the position that Clay was coming to, that it was going to be impossible to work out a satisfactory relationship with the Soviet Union. Clay was unalterably opposed to the Morgenthau plan, and the problem that he was wrestling with was how to get the German economy back on its feet. And I thought myself that that was the problem that we ought to concern ourselves with.
MCKINZIE: Of course, it wasn't just the problem of the Soviet Union, it was the problem of France at that early point. MASON: Yes, although that didn't loom anywhere near as large. There were difficulties but it was thought that in the course of time those difficulties could be overcome. But it was beginning to be difficult to see how any satisfactory arrangement with the Soviet Union could be made. MCKINZIE: Do you recall that you discussed with Clay, or any of Clay's advisors, the necessity of integrating the German economy with the economy of the rest of Europe; or was the discussion along the lines of just the rebuilding and allowing the level of industry to reach a certain point in Germany; or was it perceived to be a part of a larger problem? MASON: I don't believe it was perceived then to be part of a larger problem. I think that the immediate question was how to get Germany in
a sufficiently viable shape to be able to support its citizenry. MCKINZIE: Could you talk about the aftermath of those papers that were generated? Do you feel they had some effect? MASON: I just can't tell you about that. I know that they were read widely in the State Department, and I heard one or two people express their approval. But I don't know whether they had any significant influence or not. MCKINZIE: Again you returned to Harvard. MASON: Yes, I did. MCKINZIE: Do you recall the circumstances under which you were recalled back to Washington and put on the team to go to the Moscow Foreign Ministers Conference? MASON: Yes. When I left the State Department, I advised Will Clayton to persuade Willard Thorp to take my place, and he did take my
place and later became Assistant Secretary of State for Economic Affairs when Will Clayton became Deputy Secretary of State for Economic Affairs. And since Willard Thorp felt that he could not get away from Washington for a two month period during the spring of '47, he asked me to do what otherwise he would have done. MCKINZIE: So then you went to Washington for reading of background papers before you left? MASON: Yes, I went to Washington for perhaps a week of consultation with the people who were going to make up the team and then went on to Moscow for most of March and April, 1947. MCKINZIE: Were you aware at the time that that foreign ministers' meeting might have been a watershed in U.S.-Soviet relations? Secretary [George] Marshall came back in a very depressed frame of mind; apparently having given up. MASON: Well, that meeting was a watershed. There was one more meeting of the Council of Foreign
Ministers in London a few months later; but it was really at Moscow in 1947 that the view became almost inevitable among the American leaders that separation of Germany into two parts was necessary. I think that Council of Foreign Ministers was a watershed with respect to that particular decision. MCKINZIE: Could you describe your own negotiations with the Soviet representatives to that meeting? MASON: I had negotiations with them; what these negotiations were about I really don't remember. All that I remember in great detail was the difficulty of getting agreement. That in order to get an agreed paper, one had to agree sentence by sentence. One didn't write a paragraph and then have a discussion of it. You agreed sentence by sentence and that's the only way that these documents could be negotiated. I also remember that General Clay was the chairman of one set of meetings in which the Russian representative was [Andrei] Vishinsky.
And Clay showed himself to be fully competent to deal with Vishinsky in a very difficult series of negotiations. Clay was a tough fellow. MCKINZIE: Well, that leads me to ask about your reflections on General Marshall as a statesman; his intellectual capacity, the way he used his staff, his manner as a negotiator? MASON: Well, let me say first that Marshall made on me a very deep impression. He was a rather stern man, with piercing blue eyes and a no-nonsense kind of person. Avery strong personality. I don't think that as a negotiator in a meeting of that sort you could say that he was topnotch. I don't think his mind moved with tremendous agility. He certainly didn't disgrace himself, but on the other hand I don't think he distinguished himself. I though that as a negotiator Ernest Bevin, who was the British representative, was superior. Bevin made a very considerable impression on me
at that meeting. The French representative was Bidault, and he was drunk a good deal of the time and obviously was an emotionally disturbed man. Of course, as far as the accomplishments of the conference went, they were negligible. Agreement could not be reached on any important set of issues; and it was a failure to reach agreements that led, I think, the Americans and the British, and undoubtedly the French, too, to a conclusion that their three areas in Germany would have to be separated from the Soviet areas. MCKINZIE: Do you recall the delegation meetings that occurred periodically in Moscow -- whether that conclusion was reached there so far as you recall, or was that something that came after the fact. MASON: Oh, I think the decisions came afterward. But the general meetings of the delegation were pretty gloomy. You know one of the U.S. representatives was John Foster Dulles. Dulles was
a Republican but the Republicans at that stage were in control of Congress, as I remember it, and Dulles threw his weight around to a very considerable extent taking the view that, well, the administration might be negotiating here, but he represented the majority party in Congress that would have to deal with this later. I didn't have a very favorable impression of Dulles. Although, he later asked me to become Assistant Secretary of State. When I told him that I was a good Democrat, however, he withdrew that offer. MCKINZIE: How did Secretary Marshall handle Mr. Dulles? MASON: He handled him very well. Marshall was a man who couldn't be shoved around, and Dulles didn't try to shove him around. MCKINZIE: Did you have anything to do with the radio address that Marshall made when he returned after the Moscow Foreign Ministers Conference
or his decision to call George Kennan from the War College, as I recall, and set up the Policy Planning Staff? MASON: No. Marshall asked me to become a member of the Policy Planning Staff. He did that at the Moscow conference because, I gather he'd already appointed George Kennan before he left Moscow to be head of that planning staff. And he asked me to be the economic member but I preferred to come back to Cambridge. MCKINZIE: At that time did he tell you that they were going to take up as their first problem the question of American aid to Western Europe? MASON: If he did, I don't remember it. MCKINZIE: But you didn't have very much rest as you came back to Cambridge then, did you? MASON: Well, I just went right back into my classes, then, and finished out the year. MCKINZIE: Then you immediately went back to Washington
to serve on the Harriman committee? MASON: Yes, I went up to my country place in Vermont, but I didn't stay there more than a couple of weeks before I went back to Washington again. MCKINZIE: To whom did you owe the honor of that position? MASON: I really don't know. I would say by that time I was a fairly well-known figure in the field of foreign economic affairs and might naturally be one of the people to be thought of for that commission. MCKINZIE: Had you known Averell Harriman before? MASON: Yes, I'd known him but not very well. I'd seen him a little bit in Washington and later became really quite a close friend. But at that stage I hadn't known him very well. MCKINZIE: There have been some people who have argued that the Harriman committee -- the citizens
committee to study the feasibility of the Marshall plan -- was in a sense a loaded committee, even though it was bipartisan, at the pleasure of Arthur Vandenberg. That it contained internationalist Republicans of the Dulles complexion and Vandenberg complexion, as well as internationalist Democrats, so that the conclusions of the Harriman committee were foregone. Would you comment on that? MASON: That may well be. I don't remember anyone in the committee who was seriously opposed to assistance for Europe. I think it probably was a stacked committee. Presidential committees often are, you know. They're designed to get the kind of view that the President wants. This was, I thought, a very good committee and it had a top-notch staff member in Richard Bissell; and the report was really written by Bissell, but with Harriman playing a great role in shaping what Bissell wrote. MCKINZIE: Do you recall your own involvement; your
own specialization in that work? MASON: Well, of course, it was right down the line of my work for the previous few years. I was a fairly active member of that Commission and thinking about it, it may well have been the fact that I knew Bissell well, that may have been the reason that I was a member of the Committee. Bissell may well have suggested to Harriman that I be a member. He probably knew what my views were, and, as you say, the Committee was stacked to bring out those views. MCKINZIE: Do you recall the nature of the meetings of that committee; the presentation of papers and kinds of discussions that took place? MASON: There were, of course, a number of people called before the Commission including General Marshall; a fair amount of presentation of the necessity for assistance to Europe. The discussions, I think, were intelligent. They were not particularly acrimonious. I don't remember that
there was a sizeable minority view in the Committee, and it obviously came out with the kind of position that the Secretary of State and the President wanted it to come out with. MCKINZIE: There were a number of other committees about the same time. MASON: There were two other committees in particular. There was the [Christian A.] Herter committee which was a congressional committee, and then there was the so-called Krug committee headed by Cap [Julius] Krug, who was Secretary of the Interior, that was supposed to concern itself with the question would the U.S. have enough raw materials to supply Europe. MCKINZIE: Did you have any dealings personally with members of the staff or chairman of either of those committees? William Y. Elliot? MASON: Yes, William Y. Elliot worked extensively with the Herter committee. And since he was a colleague of mine, and a close friend of mine, I used to see
him and talk with him about problems. MCKINZIE: And what about the State Department itself? Do you recall the accessibility of information from the State Department; the kind of liaison the Committee had? MASON: No, that was done largely through the staff. I believe that Bissell also had Max Millikan as an assistant working with him on that. And there undoubtedly was a lot of contact between the staff and the State Department, but I don't remember that the Committee members had much contact with the State Department. MCKINZIE: As an economist, I'd be interested in what you thought at the time of the proposition that the Marshall plan and the aid program to Europe was necessary to correct earlier errors in economic thinking? Namely, that the international financial institutions that had been created during the war, the International Bank, the Fund, the increase in the capitalization of the Export-
Import Bank were inadequate for the job at hand? That they were not capitalized at a higher enough level and that, therefore, the Marshall plan was necessary to correct those earlier errors in thinking? MASON: I happen to know quite a lot about it since I've just finished writing a book on the World Bank. So, I've gone over that particular period. At Bretton Woods and later at Savannah when the World Bank was set up, it was the view, at least in Congress, that if these Bretton Woods organizations were accepted, they were going to be enough to do the job, except for the temporary assistance that would have to be given to UNRRA, the United Nations Relief and Rehabilitation Agency. That was perhaps a 3 billion dollar job. But it was thought that with that assistance then the Bank and the Fund could handle the matter. But it became very clear, of course, by the summer of 1945 that this would not be possible, because the British came over and borrowed
3 ¾ billion dollars from us and 1 ¼ billion dollars from the Canadians -- 5 billion in all -- for their immediate economic needs; and this 5 billion dollars disappeared very shortly without a trace. So, by the spring of 1946, I think, it was beginning to become clear that Europe would have to have a good deal more assistance. MCKINZIE: Was this clear to you at the time? MASON: Well, by 1946 I think it was becoming clear. Now, of course, Marshall did not make his speech at Harvard until, I guess it was June, 1947. But Acheson had already indicated in his speech at Cleveland, Mississippi a good many months earlier, that this was going to be the situation. So. I think, probably at least by the fall of 1946, it was pretty clear to me that Europe was going to need a good deal more in the way of assistance. MCKINZIE: Do you recall whether the Harriman committee
ever considered the idea of using something like the United Nations as a disbursing agent for this kind of assistance. MASON: Oh, it had become clear, I think, by then that any organization that the Soviet Union belonged to would not be an appropriate agency. MCKINZIE: Do you recall any of the discussions about whether or not the Soviet Union would wreck the program by participating in it? MASON: I don't recall in detail such discussions, but I'm sure the general feeling was that the Soviet Union would not be an appropriate participant in this kind of Western European exercise. That if it did come in, it would be for the purpose of wrecking the program rather than assisting the program. MCKINZIE: But would it be fair to say that the general feeling was that the Soviet Union would not?
MASON: Yes, I think the view was that it would not come in. After all, you know, this was after Bretton Woods. The Soviets had sent a delegation to Bretton Woods; the delegations had agreed with the articles of agreement but the Soviet Government then turned it down. So it was clear that the Soviet Government was not going to participate in the Bank and the Fund, and that was part of the evidence that led to that kind of a conclusion. MCKINZIE: I think in May, 1947 the Bank made its first substantial loan. I might be off a month or two, but the Bank had not really made a lot of loans until that time. MASON: That's right, it made four loans in the spring of 1947 -- to France, Luxembourg, Holland, and Denmark, all for reconstruction purposes. MCKINZIE: In these discussions in the Harriman committee, do you recall whether or not there were discussions about dovetailing, in a sense,
U.S, assistance with the amount that someone projected the Bank would be making? MASON: Well, it was clear by then that the Bank did not have enough money to do the job. France asked for 500 million dollars and it got 250 million. Denmark asked for twice of what it got, and there were other requests for sums that the Bank simply was incapable of handling. And, of course, when the Marshall plan was announced, then the Bank simply withdrew from economic assistance to Western Europe in favor of the Marshall plan. They made loans for specific purposes, but they did not make any so-called program loans for rehabilitation purposes. Their loans to Western Europe, henceforth, were for specific projects. MCKINZIE: But, you don't recall, then, any particular discussions with people of the Harriman committee about how that would turn out so far as the Bank was concerned?
MASON: Well, I don't recall, but I'm sure the view was that the Bank simply did not have enough money. You know, the only money that the Bank had that it could lend was the U.S. contribution, and that amounted to 577 million dollars. And these four loans to Europe totaled something like 500 million dollars. MCKINZIE: By this time you were, as you pointed out, a major economic figure. Do you recall anyone approaching you about becoming a member of the President's Council of Economic Advisers? MASON: Oh, yes, I was approached not directly by the President, but I was asked by a number of people whether I would consider becoming chairman of the Council of Economic Advisers. This was after the [Edwin G.] Nourse period, though. This was when it became clear that Nourse was going to retire. MCKINZIE: In 1949?
MASON: Yes, in 1949. MCKINZIE: Would you comment on why you declined? MASON: Because I did not want a fulltime job in Washington. I was very anxious to maintain connections with Washington and to serve as a consultant; but in 1947 I had become Dean of the School of Public Administration at Harvard, and I was just too heavily engaged here to make it possible to get up and leave. MCKINZIE: Did you feel that the Council of Economic Advisers had any "clout" in the White House in making economic policy? MASON: I don't think it had much clout during the Nourse period. I think it had quite a lot during the Keyserling period, and I think at various later stages its had a great deal of clout. No. I don't think that that entered into my decision. I'd just taken on the job as Dean of the School of Public Administration. I didn't think it was fair to the University
and I didn't particularly want to undertake a fulltime Washington job. MCKINZIE: Would you talk about your work with Gordon Gray in the winter and summer of 1950? MASON: Well, I never met Gordon Gray. I suppose my name was just referred to him by people who knew me in Washington. I was then fairly well-known in the field of foreign economic policy, and I suppose I was one of the natural candidates to be considered by him. Gray was appointed by the President before the Korean war and the program of the Gray commission, if you want to call it that, was very much altered by the advent of the Korean war. MCKINZIE: You had done a great deal of work almost up to the point of drafting the report, had you not? MASON: That's right. So the report was a very different one and probably would have been prepared if the Korean war had not come into
being. We had organized, for example, a number of commissions that were going to interview businessmen around the country and so on, and get a feel of what various parts of the country thought about questions of foreign economic policy; and all that fell by the wayside when the Korean war came along. And as a result, we put together as rapidly as we could a report that we thought would answer as best we could what the President had in mind. MCKINZIE: You say "as best you could." What were some of the problems? MASON: Well, what was going to happen to our economic relations with Europe after the Marshall plan? How long was the Marshall plan likely to continue? Could it terminate when it was supposed to terminate? What would then be our trade policy and our policy with respect to foreign investment, and so on, in Western Europe? We, of course, spent a lot of time writing about and thinking about the newly
emerging problems of the less developed world. Truman had announced his Point IV program: I guess in 1949, something like that. So, the question was is technical assistance going to be enough, or wouldn't capital assistance to less developed countries be necessary in order to permit them to develop? As I remember it, the report was quite a far-reaching one covering, really, all aspects of foreign economic policy towards Western Europe and towards the less developed world. MCKINZIE: At the outbreak of war in Korea, there was a lot of pressure from the military establishment to channel very much U.S. aid away from economic development into rearmament. Do you recall coping with that problem in the summer of 1950? MASON: I don't recall coping with that problem, but I do recall, quite definitely, coping with the State Department. The Under Secretary of State was then Jim Webb; and the State Department had
views that did not see eye to eye with at least the staff members of the Gray report. And I remember on one occasion going over to the State Department, and Jim Webb turning to one of his people and saying, "Well now we don't like this report. Can't you rewrite this report for them within a few days?" Of course this was unacceptable to Gordon Gray and to me. I think one of the major differences at that stage was that -- you remember that the State Department in the early years of the Economic Cooperation Administration didn't have a great deal of influence; ECA was organized as more or less an independent agency and it thought in regional terms. The State Department tended to think in global terms with respect to trade policy. And the Gray staff was much closer to ECA than it was to the State Department in its thinking. MCKINZIE: There was a huge argument over whether or not there should be one agency to handle all
foreign aid. Whether the TCA, Technical Cooperation Administration, ought not to be taken out of the State Department, and merged into one agency independent or in the office of the President; and that, in fact, should be combined with the military aid. Is that an in-house, bureaucratic issue or is it a substantive thing? MASON: No. I think that's a really substantive issue. I don't recall what my attitude or the attitude of Gordon Gray was towards the combining of military and economic assistance. I suspect I would have been in favor of taking TCA out of the State Department. But, I don't remember, really, the position. MCKINZIE: There were a number of other agencies which took exception with the draft that you circulated of the Gray Report. The Agriculture Department, for example, had some objection to the language. Were you at all upset by this inability of the agencies to agree upon the Report?
MASON: I don't recall that at all, no. We had a very good staff for that Gray Report. Kermit Gordon was a member, and Phil [Philip H.] Tresize, and Ray [Raymond F.] Mikesell. It was a good staff. MCKINZIE: By the time that the work was being concluded, did you feel that it was going to have any effect? MASON: I felt that it was not going to have much effect. Largely on account of the Korean war and the inability of the people to see beyond that very much. And I don't think it did have much effect. MCKINZIE: You became a member of the Materials Policy Commission in 1951. MASON: Yes, that was the so-called [William S.] Paley commission. Yes, there have been two Presidential commissions that I was a member of that I thought had significant effect. One was the Harriman committee and the other was the
Paley commission. I've been a member of four or five more Presidential commissions that were, in my opinion, pretty much window dressing. But, the Paley commission report, I think, had a good deal of influence. Now, the Paley commission was set up partly as a result of the Korean war; the enormous consumption of raw materials during that war made some people believe that the U.S. was running out of materials, and so on. By the time the report was finished, the Korean war was over. Those pessimistic views had diminished to some extent. But I think that the main finding of the Paley commission was that the raw materials problem is really a question of real costs. Are the real costs of materials in the United States likely to increase? And the principal finding of the Paley commission was that over the next decade or so there was no real reason to believe that with respect to most materials consumed in the United States
this would be true. Lumber and timber was an exception to that. But that was, I think, the principal finding of the commission, that over the next decade or as far as one could see ahead, there wasn't a serious materials problem confronting the United States. MCKINZIE: That was somewhat different from some of the other reports that had been coming out of various branches of the State Department, that of all the major raw materials required in manufacturing, the United States was only self-sufficient in 9 or 33 or some such number. MASON: Yes, that's right; but, of course, we looked abroad at the possible sources. We looked at the possibilities of substituting one material for another. We looked at the possibilities of recycling materials. And all things considered, we came to the conclusion that there really wasn't a materials problem of any great significance.
MCKINZIE: How in a direct way did this have an effect? MASON: Well, it allayed opinions that were really pretty pessimistic on this particular subject. And I would say that the Paley commission had an effect only over a long run. It had a very significant influence on the study of materials problems, It led to the setting up of what is by far the best research institute in this field, Resources for the Future, which was a direct outgrowth of the Paley commission. And, of course, the nature of the materials problem now is quite different. Now in the center of attention is the question of pollution -- air pollution, water pollution, etc., etc. Plus the fact that for certain materials, in particular oil -- energy sources -- there does seem to be over the next two or three decades a critical problem. But in 1951 the conclusion was and it was a correct conclusion that this was not a serious problem.
MCKINZIE: This question you do not have to answer if you don't want to. Did the Truman administration make any grievous economic errors, or some that were less than grievous? Looking back in retrospect, did the economic policy of the United States, particularly foreign economic policy, make good sense? MASON: Well, it was a policy that I supported. I think on the whole it was a very sensible set of policies and I would be hard put to it to point to any really egregious errors of foreign policy. MCKINZIE: Thank you very much. [Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed]
Acheson, Dean, 31 Bevin, Ernest, 21 Clay, Lucius D., 13, 14, 15, 16, 20, 21 Denmark, 33, 34 Economic Cooperation Administration, 40 France, 17, 22, 34 Galbraith, John Kenneth, 13, 14
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