W. Averell Harriman Oral History Interview

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

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[1]

WILSON: We'd like to get at some of the questions relating to your experiences, to your career. You may recall at the time we gave the presentation at the last Library board meeting, we tried to describe some of the problems we'd encountered, particularly the problem of how the written record has led us astray or can lead historians astray on occasion. We thought that perhaps to pose you the question that bothered us most: One of the most voluminous subject files of information about the wartime planning for the postwar world and the immediate postwar period deals with this question of the State Department's efforts, and the effort of the

[2]

Treasury Department, to create an economic open world--Cordell Hull's idea. We'd like to have you react to that--describe how that might have come to you.

HARRIMAN: I think there are telegrams that may or may not be available, which indicated that I very much had in mind the need to give Europe substantial aid after the war, after Lend-Lease was over. As the matter of fact, I felt it should also include countries not involved in Lend-Lease--whose economies would be completely disorganized. UNRRA was not enough. Europe would need not just food, but also raw materials and working capital to get the wheels of commerce going again. It wasn't just rebuilding factories; it was getting all the machinery of trade and commerce going again. Since they were without any foreign exchange, I felt it necessary for us to do something. I was particularly conscious of it, because I knew the condition Britain would be in, converting from wartime to peacetime economy.

I was very much concerned over our failure to

[3]

come to an agreement with the British on continuing Lend-Lease assistance after the war was over. In fact, when Oliver Littleton was in the United States, I think it was around 1943, I urged him to consider the needs of the postwar period, but apparently he was under instructions from [Sir Winston] Churchill not to do it, or didn't want to do it. He had immediate wartime emergency needs. This was the period when I used all the influence I had to get the British to abandon their export trade, and as much as possible convert all of their manufacturing facilities to the immediate needs of the war, including civilian, as well as military requirements.

I felt a certain responsibility to help the British, as I had urged the British to abandon their export trade and convert to war production. You will remember, the British got most of their raw materials and half their food from abroad. Their ability to buy necessities from abroad was essential. We did give the British a three billion seven or eight hundred million dollar loan. But I was very much upset that we didn't extend the principle of Lend-

[4]

Lease into the postwar period.

As far as the Russians were concerned, I felt the reverse; they had adequate gold, if they wanted to buy, and they weren't dependent upon international trade. I felt they were more self-sufficient. The Russians obtained a number of plants under Lend-Lease, which had been authorized by Washington, that I thought were not justified for their war effort. They wanted them for postwar use. I had a friendly feeling towards the Russians, but I felt they didn't need these plants. The Russians often took advantage of Lend-Lease. On one occasion, I think it was the time [Henry] Wallace came to the Soviet Union when we went to the Kolyma gold fields, Wallace discovered a dredge which we were supposed to have given the Russians to deepen one of the harbors in the Pacific. But, we found the Russians using it to dredge for gold. Well, they received this dredge under Lend-Lease.

It didn't rest well with me that they had deceived us in that way. We never knew fully what they were doing. The British we knew; and it was

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very clear that the whole of Europe would be weakened, and that communism--without help--would take over. I'm sure that was one of the reasons why [Joseph] Stalin broke his agreements, because the situation looked too good in Western Europe for a Communist takeover. I think Stalin was convinced he could move into Western Europe. He was undoubtedly told by leaders in the Communist Parties in Italy and France that their organizations were very strong; that with some help they would be able to take over Italy and France; and I think they would have done so if it hadn't been for the Marshall Plan.

So, my reports to Washington started in the autumn of ‘44 and ‘45, with some telegrams, in which my general point of view was directed toward the above. It never occurred to me that we would have as grandiose a program as the Marshall Plan, but I felt that we had to do something to save Europe from economic disaster which would encourage the Communist takeover.

[6]

MCKINZIE: You did not then get a great deal of Cordell Hull's view that after the war there would be a remarkable amount of commerce--normal commerce?

HARRIMAN: No. My views were just the reverse. I was not at all in sympathy with this idea. You know, I ran the Marshall Plan in Paris. I and a small staff had control of the operations in Europe. We were pressing for EPU, European Payments Union. We had a lot of opposition from the Treasury Department on this and not much cooperation from State. I think their economic approach was just the reverse of ours. We were talking about really getting Europe on its feet. It was our hope that there would be a breakdown of trade barriers in Europe first, and then eventually a breakdown internationally, which would help increase trade with Europe.

I knew this would mean a temporary sacrifice for the United States to some extent. We had a lot of trouble with the Department of Treasury; they were not particularly keen on the European Payments

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Union. Our whole concept of the unification of Europe was that it would first contribute to economic unification. Then, we hoped to secure an economic-military unity and finally a political unity. In the first instance, it was obvious that theoretically at least there would be some sacrifice in trade to the United States, but in the long run the buying power of Europe would increase so greatly that we would gain.

WILSON: How are we to explain the continuation of this universalist philosophy in places like the Treasury? Was it because they were idealists or unrealistic, or was it because . . .

HARRIMAN: Well, they were working on GATT [General Agreement on Trade and Tariffs]. Everybody seemed concerned about GATT. That's one trouble with bureaucracy. Bureaucrats are like hunting dogs. They are down a certain scent, and they stick to that scent, even though there may be some better scents in one direction or another. I use the word "scents" in a double meaning.

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WILSON: Yes.

HARRIMAN: I was all for the ideals, but I knew we were not in a position to get the ideal in the European Recovery Program. I was quite ready to accept certain restrictions on the United States. After all, there was a great dollar shortage. It was quite clear that the more prosperous Europe became, the more business there would be in the United States. My whole experience in banking showed me that. The biggest trade that Germany and Britain had was with each other, in the prewar period; I think I'm right in that. Two highly industrialized nations had the most trade with each other, and it wasn't tariff policies alone that made trade relations better for both of them. So, I had a different view than this idealistic theory of simply breaking down barriers. I was much more involved in the practical problem of getting Europe back on its feet, and giving it an opportunity to move ahead--move forward--and everything we did was in that direction. EPU

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was an example; we had a lot of troubles with the Treasury in putting EPU through, the European Payments Union . . .

MCKINZIE: Yes.

HARRIMAN: . . . and yet the European Payments Union, I'm satisfied, was a thing which made the Marshall Plan a success and made it possible for Europe to move rapidly after the Marshall Plan was finished. And I think in a sense it was one of the things that made it possible for Europe to become viable more rapidly. I was fighting for EPU; it had a good deal of support from the French, the Italians, and the Belgians.

The British were very much opposed to it; they had a great deal of difficulty. Sir Stafford Cripps was adamantly against it. They thought it would interfere with their sterling area; there were a lot of complications. It was hard to fully understand why they were opposed to it. One thing about Cripps was that after he made an agreement he always did a little better than he said he would.

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It was very tough to get him to agree to something, but after he came to an agreement he was very cooperative.

I look upon these theories, which were held in the Treasury and to some extent in the Department of State, as irritants against doing the job which we were trying to do and which we did in spite of their positions. I think the record shows that EPU was the most specific case. Yet the whole preamble of the second authorization act for the Marshall Plan showed the direction Congress was ready to take about breaking down barriers within Europe. I was anxious that it shouldn't be just a customs union--a customs union which would exclude the United States. I wanted to see more fundamental understandings about greater integration than simply a customs union. That I think is happening, although some people call European integration more of a customs union than I do. I think it's more fundamental. The military aspects are also very important.

Actually I'd had a certain amount of experience

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in Europe in the inter-war period, as a banker, and I was also a member of the Board of Directors of the International Chamber of Commerce. I remember meeting in one of the executive committee meetings in Paris. I went there because I happened to be there; I was the only American of any prominence there--of any of the directors. They had a staff. One evening I remember that I met with the leading bankers and industrialists of the principal countries. I remember the British and German, the French--I can't remember who else was there. It was quite a small dinner--it was a private dinner. Yet, they took the International Chamber of Commerce more seriously than we did, and there were very important men present. I asked them why they thought that the United States was moving ahead as we were in the mid-twenties, you remember, whereas Europe was stagnant with built-in unemployment. They said it was because we had a continent of free trade.

And I said, "Well, if that's the case, why

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don't you with all your influence in different countries make the changes that are necessary to get freer trade in Europe?"

The answer was that unless there was a military understanding, freedom of trade could not exist. Because there wasn't a military understanding of some kind, every country, for its own security, demanded to be as autarkic as possible. And I think one man said, "From castings to forged big guns, to buttons on the uniform." I remember some of the details.

So, I went into the Marshall Plan with the idea that both economic and military considerations had to be taken into account. This is one of the differences I had with [Paul] Hoffman. He wanted to limit it to economic goals alone, and I was very keen to see the NATO treaty become more of a reality, remembering this experience in the inter-war period. Now that isn't an answer directly to your question, but it does show that we looked upon military integration and economic integration as supporting each other.

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We did everything we could, of course, to develop the OEEC as a vital organization. We were--I think I can use the word "I"--was determined that we would get the Europeans to divide aid. I had a horror of fourteen countries coming to the United States with their front feet in the trough. I thought the net result of that would be that we would have fourteen enemies of the United States and fourteen enemies among each other, because of the jealousy that would come.

How could you justify giving Holland twice the amount of money that you gave Belgium? Well, finally, I put it up to them. They said that they couldn't do it; it would destroy them. I said they had to do it. And I finally got support from Hoffman on it. We did get them to divide the aid, and that was one of the things that made the organization successful. We were dealing with the practical realities of the ghastly situation that existed in Europe when we took over. I don't know if you've ever had a full picture of what Europe was in the winter of 1947.

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MCKINZIE: We have done some considerable work on it.

HARRIMAN: Well, you know how desperate the situations were. I didn't get into it until April. I went over there the first part of May, and I discovered the British had been very successful in laying down the organization of the OEEC. A young, brilliant economist, Robert Marjolin, headed OEEC, but he had little political prestige in the beginning. It took me a year to get an agreement on a permanent chairman of the ministerial committee of OEEC. We wanted to get [Paul-Henri] Spaak, but we got [Dirk U.] Stikker who was a fine fellow and a very able fellow. (Spaak was a little too active. The British opposition to him was mostly because he was a Socialist.) Everything we did was to strengthen European unity. The European Payments Union was an effective move. It was very much in the direction of the integration of Europe.

On the sidelines we had Jean Monnet, who worked on the specifics of the coal and steel community. I kept in touch with him. Any agreement between

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[Robert] Schuman and [Dr. Konrad] Adenauer was of major significance. I was never directly involved in what they were doing, but these were related to what we were trying to do. So these were the things that interested us, and not the ideological trade concepts advanced by Mr. Hull. I'm very much in favor of as much free trade as you can get in the world, but I've never looked upon it as an ideological concept. You've got to move in that direction, but also deal with realities.

WILSON: We have the impression from the documentation that a tinge of this ideological idealism may have crept into the Washington office of the ECA--about how to proceed with European integration. That is, there was pressure for rather large scale commitments on the part of the European nations to work together, and that perhaps you were rather more interested in going a step at a time again. Is that correct?

HARRIMAN: Well, I think it was true. ECA was separate from State. We didn't clash so much with State as we did with Treasury. Of course you had to get

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Treasury's agreement on some of these things--God knows why--but we did. The economic side of State was not tough; the financial side of the Treasury was tough. General Marshall and Bob [Robert] Lovett, and Acheson were all for the Marshall Plan, and offered to give us cooperation. One man in the Treasury with whom we had the most difficulty was kept on by Eisenhower when he took over. I've forgotten his name. Perhaps you can find out who he was.

MCKINZIE: [Lieutenant Colonel C. H.] Bonesteel?

HARRIMAN: No, no, no. This is Treasury. Assistant Secretary of the Treasury. No, no, Bonesteel was all right. He was with me in Paris. We got full cooperation from Bob Lovett when he was Under Secretary, from General Marshall, of course, and from Dean Acheson, when he became Secretary of State in 1949.

I'm making myself plain that these economic theories were not actually the main consideration, whereas in the Treasury, they were.

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WILSON: What about the role of Will [William L.] Clayton, at the time of the origins of the Marshall Plan?

HARRIMAN: I never had very much to do with him, as related to the Marshall Plan. I don't know what role he played. I was Secretary of Commerce at that time. What contacts I had with State, and the Marshall Plan in those days, were with Dean Acheson. I had a certain amount to do in connection with Greece and Turkey. I remember the Marshall Plan came along very fast after that.

WILSON: Yes, yes.

HARRIMAN: I've heard other people speak about the role that Clayton played. I think the

book by [Joseph M.] Jones is probably about as accurate as anything available on the Marshall Plan.

MCKINZIE: Fifteen Weeks.

HARRIMAN: Fifteen Weeks. As Secretary of Commerce, I had many talks with Acheson, but there are very

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few records of our conversations. We talked about Greece and Turkey, and I was in agreement with a good many things on it all. But I've no records of it, because they were talks among two friends.

I was a couple years ahead of Dean in school, in college, and we knew each other very well. He was one of the driving forces in developing the Truman Doctrine first, and then the Marshall Plan.

General Marshall was one of the slowest to recognize we were going to have difficulties with the Soviet Union. He, as well as General [Dwight D.] Eisenhower, tried his best to get along with Stalin. One of the most important facts to discredit the revisionists who contended we were responsible for the cold war was the attitude of General Marshall and General Eisenhower. It's very interesting that these two men were among the last to agree that we couldn't get along with Stalin. General Marshall didn't come to that conclusion until after he made his terrific effort at the Moscow Conference in ‘47.

[Walter] Bedell Smith, who was my successor as Ambassador to the Soviet Union, was very close to

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Marshall during the war. He told me about his talk with General Marshall in the winter of 1946, before he [Smith] went to Moscow, when he was reviewing with General Marshall the list of people he ought to see. General Marshall then, of course, was--I guess he was still Chief of Staff of the Army, or was he in ‘46?

WILSON: No. He just retired.

HARRIMAN: Just retired. Well anyway, he didn't call anybody by his first name. He said, "Of course, you've got to see Harriman, and he will have a lot to tell you about them. But he had such a rough time there, you want to discount a bit his appraisal of the situation." That was in ‘46. It wasn't until March-April of 1947 at the Foreign Ministers' Moscow Conference which he attended that General Marshall finally gave up hope for coming to an understanding with Stalin.

I tell the story, not to gossip, but to show you we had very important sources within our

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Government that were still determined. And it's interesting . .

MCKINZIE: Determined for conciliation?

HARRIMAN: Yes. It's still '47. I've never gone over the records of that meeting, but I guess he had a pretty rough time didn't he?

MCKINZIE: Oh, yes.

WILSON: Very frustrating time.

HARRIMAN: It was the same way with General Eisenhower. The reason for it was that Stalin kept his military commitments, and neither Marshall nor Eisenhower were involved in the political phase. As you know, Stalin attacked the Germans after the Normandy landing, and if the Russians hadn't attacked at that time we would have been in real trouble, because there were some two hundred German divisions on the Russian front, and about thirty mobile divisions in Western Europe. In addition, there were about fifty satellite divisions on the Russian

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front, and thirty-odd mobile German divisions. This made a deep impression on Marshall and Eisenhower. They were convinced that since Stalin kept his word on vital military commitments held keep his word on the political matters.

You asked what my relation with Wallace was: Henry Wallace, when he was Secretary of Agriculture, came to Russia while I was Ambassador. We were good personal friends, but I disagreed with him on many things. But he was made Secretary of Agriculture. In any event, I was working for the NRA and we had common problems in the early thirties. Anyway, I got one of the nicest letters I've ever gotten from anybody when I took his place as Secretary of Commerce in 1946. There was no personal vindictiveness or negative feeling towards me at all.

WILSON: Yes.

HARRIMAN: Wallace was very sincere. He was very much of a dreamer about communism, and about the Russians

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and about other things. He was very sincere in his convictions. He had some people around him that may have been misguided or that were misguided. Whether they were fellow travelers or Communist Party members, I have no idea. But his attitudes were very sincere. How much of Wallace's Madison Square Garden foreign policy speech Mr. Truman read or took in, I have no idea. I've never really been able to find that out.

MCKINZIE: Well, we had various people look at this speech--scan it--but we can't tell how much the President actually saw.

HARRIMAN: But why weren't some of the differences with [James F.] Byrnes' policies noticeable by that time? Byrnes was very strongly suspicious of the Russians. In the beginning, in early meetings, he learned the hard way from making certain mistakes that dealing with the Russians was quite different from what he first thought. I don't know why the White House staff didn't realize what his speech was, do

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you? I never tried to find out.

MCKINZIE: There was a little bit of fuzziness about lines of responsibility, I think, in the White House staff on such matters as that. It wasn't until much later that the White House staff got very concerned about the content of speeches. I think they did appoint someone after that.

WILSON: But it is also suggested that Byrnes overreacted to this, because he felt unsure about it.

HARRIMAN: Byrnes may have overreacted; again, let's read that speech over and think about it--the Wallace speech. I think you will find that it wasn't all that bad or all that at variance with Truman's policy. I think that's what may be true; I'd like to check that, and if I have an opinion on it I'll get it to you.

MCKINZIE: Very good.

HARRIMAN: Now you go back to the next question you asked.

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WILSON: What were the circumstances of your taking on the Harriman Committee [President's Committee on Foreign Aid] assignment?

HARRIMAN: I know that the President wanted to have a thorough analysis. He knew how to deal with Congress. Everybody gives General Marshall credit for the Marshall Plan. I don't want to take one iota of credit for the Marshall Plan, but there is one man who is responsible for the Marshall Plan and that was Harry S. Truman, because he developed the plan and got it through Congress. He got vigorous support but he got it through Congress. Anyway, I have no idea exactly how these three committees were developed.

There was the [Edwin] Nourse Committee, which was the Committee of Economic Advisers. Then there was the Committee on Resources, which was headed by . . .

MCKINZIE: Julius Krug.

HARRIMAN: . . . who was then Secretary of the Interior.

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This [the Harriman Committee] was a very strangely organized committee, because you had a Secretary of Commerce as Chairman of it, with all the other members being private citizens drawn from industry, commerce, banking, finance, the intellectual world, labor, Congress. It was a group with very wide opinions. Who got the idea of putting me in as Chairman, I don't know; you'll have to find that out from somebody else. I think at the time, you see this was 1947, I was still considered more of a businessman than a politician. I don't know why. I don’t know who was the man that made the decision, maybe Dean Acheson. I don't know. Have you seen anything?

WILSON: We've seen some early memoranda on the development of the idea. One, there is a Policy Planning Staff memorandum, apparently responding to a speech by [Senator Arthur H.] Vandenberg on or about the 14th of June, in which he says the Marshall speech was a fine idea and now we need a bipartisan group--a blue-ribbon group--to see whether it's feasible or not.

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HARRIMAN: I know Vandenberg was called in on the composition of this group. I got along very well with Vandenberg. We were very good friends. I had respect for him. I think it really was mutual. He was responsible for the additions of two men. One was Owen D. Young and the other was Bob [Senator Robert M., Jr.] La Follette. He felt the selection was not sufficiently wide or popular. He knew the people; he didn't question their ability or anything.

WILSON: Yes, yes.

HARRIMAN: He was looking for people whose names would carry with them a stamp of public approval--the stamp that would gain public approval. So, I remember he added those two names, Young and LaFollette. He told me he thought it wasn't quite representative enough. They were very capable men, all of them. He always told me that it was that rapport that made it possible for him to get the legislation through Congress.

[27]

WILSON: Yes.

HARRIMAN: I was very lucky in getting Dick [Richard M., Jr.] Bissell as Executive Secretary. He was one of the most outstanding economists I've ever known. He had the courage of his convictions. To put forward such fantastic conclusions as Dick did was a tremendously courageous thing to do. I'd say it turned out right; we actually hit well within the figures. We had a very good group and we divided up in seven different committees. Bob LaFollette wrote the chapter on America's interest in Europe. I don't know why it received as much acceptance as it did, except that it was written in layman's language, so that the . . .

WILSON: Yes. Very clear.

HARRIMAN:. . . press understood what we were talking about. We had a press conference which went very well, in which Bissell and Bob LaFollette and I talked to the press together. Bissell had a very skillful way of making very complicated things

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simple. Most of Congress could make very simple things complicated (but that's not on the record).

My contribution to the Committee was that I was the Chairman and tried to keep people's nerves down, because there were some people opposed to it. They just couldn't believe that we would spend 17 billion, which was fantastic to them. We never got a vote on the report as a whole. Agreement was obtained from the seven subcommittees, covering seven aspects of the report. We had to get this report out fast, because Congress was about to meet in a session.

So, I called up each one of the men, and I said, "We're going to issue this report. You haven't had a chance to read it, but each one of you has agreed to your segment of it." A number of members, including Bob LaFollette, read the whole report and approved it. Then I said, "We'll have to send this forward as the report of the committee and if there is any aspect of it that any member does not approve when he reads

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it, he can make a minority objection."

Well, the press reaction was so tremendously favorable that the opponents who disagreed didn’t come to the last meeting. By the way, I said this at the last meeting--none of the had a chance to read it all, or I should say some of them had. That’s the way we got it through.

Vandenberg later told me that it was that report that was really more help than anything else in getting legislation on the Marshall Plan through Congress. There was a lot of work done in our State Department, subsequently. But the important fact was that the report was adopted by our members without any objection by an outside group. For some reason or other, even though I was Secretary of Commerce, I had not been contaminated, sufficiently contaminated, to be excluded. I was, of course, one of the many people who had worked for the Government in wartime, you know . . .

MCKINZIE: Oh, yes.

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HARRIMAN: . . . that wartime service wasn’t considered as tarring you with the political brush.

MCKINZIE: Governor Harriman, we don’t want to go longer than the time you had allotted for us ...

Acheson, Dean, 16, 17, 18
Adenauer, Konrad, 15

Belgium, 9, 13
Bissell, Richard M., Jr., 27
Bonesteel, Charles H., 16
Byrnes, James F., 22, 23

Churchill, Winston, 3
Clayton, Will, 17
Council of Economic Advisers, 24
Cripps, Sir Stafford, 9, 10

Eisenhower, Dwight D., 18, 20, 21
Europe, economic aid to, 2, 6, 8, 11
Europe, unification of, 6, 7, 10, 12, 14, 15
European Cooperation Administration, 15
European Payments Union, 6-10, 14
European Recovery Program, 5, 6, 8-13, 15

Fifteen Weeks, 17
Foreign Ministers meeting, Moscow, 1947, 18, 19
France, 5, 9, 11

General Agreement on Tariffs and Trade (GATT), 7
Germany, 8, 11
Golena gold fields, USSR, 4
Great Britain, 2, 3, 8, 9, 11, 14
Greece, 17, 18

Hoffman, Paul G., 12, 13
Hull, Cordell, 2, 6, 15

International Chamber of Commerce, 11
Italy, 5, 9

Jones, Joseph M., 17

Krug, Julius A., 24

LaFollette, Robert M., Jr., 26, 27, 28
Lend-Lease, 2, 3, 4
Littleton, Oliver, 3
Lovett, Robert A., 16

Marjolin, Robert, 14
Marshall, George C., 16, 18-21, 24
Marshall Plan, 5, 6, 8-10, 12, 13, 16-18, 24, 29
Monnet, Jean, 14
Moscow Conference, 1947, 18, 19

Netherlands, 13
North Atlantic Treaty Organization (NATO), 12

Organization for European Economic Cooperation (OEEC), 13, 14

President's Committee on Foreign Aid, 24-29

Schuman, Robert, 15
Smith, Walter Bedell, 18, 19
Soviet Union, 4, 18, 20-22
Spaak, Paul H., 14
Stalin, Joseph V., 5, 18, 19, 20, 21
Stikker, Dirk V., 14

Treasury, Department of the, 16
Truman Doctrine, 18
Turkey, 17, 18

United Nations Rehabilitation and Relief Agency (UNNRA), 2

Vandenberg, Arthur H., 25, 26, 29

Wallace, Henry A., 4, 21-23

Young, Owen D., 26