Frank Pace Jr. Oral History Interview, January 17, 1972

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 It may not be published in full except by permission of the Harry S. Truman Library.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 June, 1974
Harry S. Truman Library
Independence, Missouri

[1]

HESS: To begin, Mr. Pace, and for the record, will you give me just a little of your background?

PACE: Well, I was born in Little Rock, Arkansas in 1912, son of two citizens of Arkansas, both born and raised in northwest Arkansas. My father was a distinguished lawyer and my mother had been president of a bank at 27.

I was an only child, and moved very rapidly through school, finished high school when I was fourteen. My mother very wisely didn't allow me to go to college, I went to preparatory school and then on to Princeton and Harvard Law School. From there I returned to my native heath of Little Rock, Arkansas and became an Assistant District Attorney and served in that capacity for two years and then I became a General Counsel for the Revenue Department of the State of Arkansas. I tried a great many cases in the Supreme Court of our state and a couple in the Supreme Court of the United States.

[2]

Then came the war, I was in the Air Force, at home and abroad, and after the war I came back to Washington and went into the Federal Government in the Department of Justice, in the Tax Division, as an Assistant Attorney General. After that I became Executive Assistant to the Postmaster General; Assistant Director of the Budget; Director of the Budget; Secretary of the Army. Later I became executive vice president and then president and chairman of the board of General Dynamics Corporation. Today I am president of the International Executive Service Corps, an organization that sends retired businessmen to the developing countries on a non-profit basis to upgrade the management capabilities of developing countries. And I am chairman of the board of the Corporation for Public Broadcasting.

HESS: Very good. We'll elaborate on a good many of those points, but what are your earliest recollections of Mr. Truman?

PACE: Well, I had met Mr. Truman when I was in the Department of Justice, but I had only met him. I had been recommended for the Department of Justice by Senator [John L.] McClellan, who was an old friend of Mr. Truman's and of course, Attorney General Tom Clark, who also was a friend of Mr. Truman's. While I had met him, it was not until I went into the Post

[3]

Office Department that I really first came to know Mr. Truman more than casually. I was selected for this position by Postmaster General [Robert E.] Hannegan, who was also chairman of the Democratic Party. And he said, "I need someone who has the ability to keep his hands on the administrative functions of the Post Office, because a great deal of my time will be addressed to the requirements of the Democratic Party."

When Mr. Hannegan left as Postmaster General, he evidently had spoken to President Truman about me as to his own sense that I might possibly make a further contribution in Government. And during that period, James Webb, who was the Director of the Budget, had spoken to me about becoming the number two man in the Budget.

President Truman called me over one day and offered me the position of Chairman of the Civil Aeronautics Board. I'm sure this was as a result of a conversation between him and Mr. Hannegan, although Bob never said anything to me about it. I told him that Mr. Webb had talked to me about the other position, and said I'd like the opportunity to think about it. He said, "Fine." And I returned two days later and said that I felt I preferred to be the Assistant Director of the Budget.

"Well," he said, "your choice surprises me Frank."

I said, "I thought it might, Mr. President, but I believe

[4]

the Budget will give me an almost X-ray view of the whole governmental process. Chairmanship of the CAB is a more glamorous, but in my estimation a more specialized assignment, and I prefer the more fundamental."

"Well," he said, "you made a wise choice."

HESS: Going back just a little bit, were you familiar with Mr. Truman's handling of the Truman Committee?

PACE: Not really, no, I did not know him during that period.

HESS: Did you attend the Democratic National Convention in 1944, that was held in Chicago?

PACE: I did not.

HESS: What was your reaction when Mr. Truman was selected for the second spot on the ticket, any particular reaction at that time?

PACE: Not really, I didn't know Mr. Truman that well at that time. Mr. Roosevelt was such an overpowering figure as President that the selection of the Vice President seemed almost inconsequential, and since I wasn't in on the infighting involving Mr. [Henry] Wallace, it really did not make a deep impression on me.

[5]

HESS: When did you become aware that President Roosevelt's health was failing seriously?

PACE: I think very much towards the end of his life. People whom I knew discussed it, I didn't know it personally, but it was quite clear that he only had a limited period of time to continue as President.

HESS: Where were you when you heard of his death and just what were the impressions that went through your mind at that time?

PACE: Well, I must say to you I can't tell you where I was when I heard of his death. I think I felt the shock that every concerned American citizen felt.

Here was a man who had moved us through possibly the greatest crisis of our entire national history. He had brought us out of one of the most difficult periods in history. He had an absolutely pervasive personality, and one tended to equate the future of the U.S. with Mr. Roosevelt. And therefore, I guess I had the same sense that a great deal of the things you had counted on were now gone.

HESS: What kind of a job did you think Mr. Truman would do?

PACE: You know, I have now known six Presidents, some of them quite well, but I don't think anyone can predict in advance what kind of a President a man will be. The Presidency is

[6]

essentially a rack on which a man is either stretched or strained. If he has stretch, those qualities show; if he doesn't, the strain likewise shows.

I had no way of knowing the really enormous amount of stretch that existed in Mr. Truman and I had no real way of realizing his potential, and I doubt that the people that knew him much more intimately than I fully realized what he could be.

HESS: One further question about Mr. Truman's earlier years, but you had graduated from Princeton in '33 and from Harvard in '36 and then you went back to Arkansas. You were going back to Arkansas just about the same time that Mr. Truman was elected Senator and coming to Washington, but do you recall anything about his particular associations in Missouri with the Pendergast machine or any of that?

PACE: Well, I didn't know anything about that. My family as I said came from northwest Arkansas which borders on Missouri. Members of my mother's family lived in Joplin, Missouri, they knew Mr. Truman quite well, and thought very highly of him. My uncle, Grover James, was one of Missouri's most distinguished attorneys and he told me that he held Mr. Truman in very high regard.

[7]

Now, if you think well of a man in a state when he's in politics, and you are somewhat a politician as my uncle was, you can be reasonably sure that the assessment is a sound one, because you know men very well in states like Missouri and Arkansas. So, I came forward with an impression of quality.

HESS: Two other gentlemen from Arkansas, such as yourself, who played prominent roles in the Government during the Truman administration, were John Snyder and Leslie Biffle. Did you have any association with those gentlemen in the early years?

PACE: Oh, yes, very intimate association. Of course, John being Secretary of the Treasury when I was Director of the Budget, we were opposite sides of the same course. We had an excellent relationship, never a difficulty between us. I think our points of view were really quite similar. And I would say that we worked very effectively in harness.

Les Biffle was very special, he had known my father very intimately, and Les made my path in the Congress a very simple and easy one. I believe he was one of the most respected men in the whole Congress and if you were treated well and thought of well by Les Biffle, your capacity to be effective in the congressional scene was indeed very great and I can't tell

[8]

you how many times Les, had me out for lunch with top Senators and top Congressmen and my relationship with the Congress over my years in Washington was of the highest order.

HESS: Jumping ahead just a little bit, but do you recall in the 1948 campaign when Mr. Biffle dressed as a chicken farmer and went out around the country. Did you ever hear him tell about that trip?

PACE: Oh, yes, indeed I did. Les had a great human touch. You look in any room and Les would be in the last seat in there, an enormously modest man, but a man of great intuition. When he went out on such a tour he got a clear sense of farmer reaction.

Of course, Mr. Truman was very special. Particularly as Assistant Director and Director of the Budget I came to know him very well. There was always a warmth between himself and his associates. You were very sure he would never let you down, in fact you had exactly the opposite problem. If you were in difficulty, your job was to keep Mr. Truman from rushing out and taking up the cudgels on your behalf, and to remind him that he was President and you were there to take the blows.

HESS: He was a little prone to do that.

[9]

PACE: Very prone, but believe me, that permitted you, when you were working for him, to go to lengths that you would not go with other Presidents. In other words, you knew he would understand the integrity of your position, and you got way out on the end of the limb for Mr. Truman, and never felt any concern when you did.

Speaking of that campaign, I remember an occasion when I was Assistant Director of the Budget. Since Jim Webb was out of town, and I had to call Mr. Truman on a major matter relating to the Budget. When we finished, I remember his saying, "We've got 'em on the run Frank, we're going to take 'em."

And I thought, "Boy, what kind of stuff is Mr. Truman shooting into his veins," because I was reading those eastern papers. And really he knew, he sensed when there was this real switch to him, and I just happened to have caught him right at a point where he had the feeling that the tide had really swung.

HESS: Do you think Mr. Truman really had confidence that he would win the election?

PACE: Oh yes, there wasn't any doubt about it.

I remember a marvelous story. I have a friend named Bill Milton who represented General Electric in Washington.

[10]

He invited my wife Peg and myself to an election eve party. And he said, "Frank, we're fond of you, but we must be frank, you're the only Democrats we know that we can gloat over."

So I told Mr. Truman about this. Mr. Truman reached down in his drawer and pulled out a red tie with a battery, a bow tie, and when you pressed the battery, a light came on that said, "Elect Truman," and he said, "Frank, on election evening, you go with those people, and you wear that tie," and he said, "At the beginning of the evening Mr. Dewey will be ahead and they will be exhilarated, and they will probably have a couple of more drinks. But," he said, "as the returns begin to come in the tide will turn," and he said, "without saying anything, just let them have at you. At just about 12 o'clock, you get out in the middle of the room, don't say anything, just press that button and have that tie light up, and those people will all pick up and leave." And it worked just exactly as he said.

HESS: You did that, did you?

PACE: I did just exactly that, and it worked just the way he said it would.

HESS: Were they rather surprised when Mr. Truman won?

PACE: Oh! Oh, surprised! They were appalled, literally. They

[11]

were so sure Mr. Dewey would win, that they honestly asked Mrs. Pace and myself to be there so they'd have somebody to tell them, "Isn't it just too bad."

HESS: All right, now moving back just a little bit, in 1946 you were appointed a Special Assistant to the Attorney General, U.S. Taxation Division.

PACE: That's right.

HESS: Why were you selected for that appointment?

PACE: Well, as you remember I had been General Counsel for the Revenue Department of my state. My background was taxes, I was a lawyer, I'd been experienced both in trial and appellate work and I think I was a very logical candidate for it. My credentials in my own state were well recognized and it was something I very much wanted to do. I really was terribly happy in the assignment and enjoyed it thoroughly.

HESS: Now, Mr. Tom Clark was Attorney General at that time.

PACE: That is correct.

HESS: What do you recall about Mr. Clark. What were his strengths and what were his weaknesses?

[12]

PACE: Well, his strengths involved a vast amount of commonsense. Tom Clark, given any problem, would apply a very practical commonsensical ruler to it. Also he had great human qualities. He loved people and he made it very clear he loved people, he trusted people, people were prepared to make an effort for him. He never had any big shot complex at all. I would not have thought that Attorney General Clark would think of himself, or was, an intellectual giant. That wasn't his forte. His quality was practicality in getting things done. He had another asset, he had a great wife. Mary was just a superb person and I came, along with my wife, to know them well, and enjoy them thoroughly.

HESS: Any particular weaknesses, that he may have had in administering the Department of Justice?

PACE: I wouldn't have thought that he was an outstanding administrator and I don't think management was basically his long suit. But I think in the Department of Justice most of all you want a man whose integrity you have confidence in. Also confidence in his humanity, because there's great power in the Department of Justice. And you need an essentially human Attorney General. You don't want the greatest lawyer that ever came down the pike because managing the Department of

[13]

Justice requires far more than just the ability to assess the law, it has great administrative requirements, but it has great human requirements also.

HESS: And then you moved over to the Post Office Department as Executive Assistant, we have discussed that briefly.

PACE: I was recommended for that by Tom Clark, to Bob Hannegan, as well as by John McClellan.

HESS: Mr. Hannegan had been Chairman of the Democratic National Committee during the 1944 campaign.

PACE: That's correct.

HESS: Do you recall anything in particular about the role that he may have played in seeing that Mr. Truman was placed on the ticket?

PACE: Yes. Yes, my memory is a little vague on that. Bob talked to me a number of times about that very fascinating period. And my recollection is that Bob did really feel that Mr. Truman had great qualities for the assignment. I believe that the potential contenders were Mr. Justice Douglas, and Henry Wallace, as well as Mr. Truman. Bob Hannegan felt that of the three men, the man who had the best qualities for the Presidency was

[14]

Mr. Truman, and I think he played some role in identifying Mr. Truman to Mr. Roosevelt and in participating in his selection.

HESS: Mr. Hannegan resigned in 1947.

PACE: That's right.

HESS: Do you know why he resigned, any particular reason?

PACE: You remember he had a very, very severe operation, from which he subsequently died. He and Senator [Stuart] Symington had almost identical operations.

HESS: High blood pressure operations.

PACE: High blood pressure of a very severe nature.

HESS: Removed the ribs.

PACE: They removed the ribs. Stu was unaffected by it, but Bob deteriorated and very shortly thereafter passed on.

HESS: Jesse M. Donaldson became the next Postmaster General.

PACE: Jesse M. Donaldson was old-line postal, deeply respected by everyone. There was a decision at that time that the Post Office should be separated from the Democratic chairmanship,

[15]

a decision of which I highly approved. I saw no reason at all why the two should be related.

HESS: What was Mr. Truman's view on that? As you know the Postmaster General had often been a political appointee. James A. Farley of course had been Democratic National Chairman. It had always been the spot to move into.

PACE: That's right. I think Mr. Truman felt that it should be separated.

HESS: It should be made a professional post.

PACE: ...it should be a professional post and the relationship at that time was really historical rather than logical. There wasn't any reason why the head of the Democratic Party should head the postal service.

The Post Office was really a very, very interesting place. Very little happened in the nation that one way or another didn't reflect itself in the Post Office and I think that its eventual progress where today it has been placed on a so-called private basis, is a very logical progression from the time when it was separated from the chairmanship of the party.

HESS: And then you moved from there over to the Bureau of the Budget.

[16]

PACE: That's right.

HESS: First as Assistant Director and then as Director and you have mentioned how you came to be selected for that particular move.

PACE: That's right.

HESS: As you headed that bureau later on, could you tell me just how the role of the Bureau had changed as established in 1921?

PACE: Right.

HESS: Just why was it first established and how has it evolved?

PACE: Well, obviously you had to have some means of controlling the expenditures of the Federal Government and the Bureau of the Budget emerged as the controlling factor.

Its position was established in the original determination to separate it from the Treasury and place it in under the President. I think that was a very wise decision. It made a great deal of sense. The raising of money through taxes, and issues of Federal bonds, etc., is quite a different requirement than that of the control of expenditures. They are two sides of the same coin, but they need to be handled

[17]

separately, I approve of it very highly.

HESS: Roosevelt had taken it out of the Treasury Department, is that correct?

PACE: That's correct. I believe that the Budget reached its peak--well certainly one of its highest periods under Mr. Truman. He relied on it very heavily and believed in it very strongly.

Truman was the first man who really created the institution of the Presidency. Prior to Mr. Roosevelt the Federal Government had not been large enough to think of it in institutional terms. Mr. Roosevelt was not the kind of man who thought of Government in institutional terms, he thought of it in personal terms. He was competent enough and self-reliant enough to continue to manage even the largest government on a non-institutional basis. I think it could have been managed better by him had his decisions been affected before they were made, rather than after they were made, which was the process in Mr. Roosevelt's Presidency. But Mr. Truman deeply believed in the institution of the Presidency. He revered the Presidency as such, and he was a modest enough man not to think of himself as essential to the process.

It took such a man to really build the institution of

[18]

the Presidency, and under the very dynamic leadership of Jim Webb, Mr. Truman built the institution of the Presidency. It was in this period that the National Security Council emerged, it was in this period that all the basic institutional functions of the President began. And again, it took just such a person as Mr. Truman to permit it to happen. He always felt that as a person he was subject to any form of attack, but as a President, he was entitled and should receive respect. And he believed that one of his great contributions was his capacity to institutionalize what had been in the United States of America essentially a personal function up to that time.

HESS: Did you hear Mr. Truman articulate those views?

PACE: Oh, yes. Oh yes, not once but any number of times. He talked about how the Presidency had to emerge, what was necessary to permit a President to function in the enormously complicated circumstances of a modern world. You see Mr. Truman was the first President who really had to manage a government in peacetime with enormous international responsibilities. And no President had ever previously managed this country with the scope and requirements that were placed on Mr. Truman. And the need for institutionalizing to

[19]

meet those requirements was very clear and always uppermost in his mind.

HESS: There were four gentlemen who served as Director of the Bureau of the Budget, first Harold Smith, and then James Webb, and then yourself and then Frederick J. Lawton. Did you four men use any noticeably different management techniques and did you operate in any significantly different manner?

PACE: Well, I didn't know Harold Smith. I have a sense that Harold Smith had done a great deal to build the Budget to its position of pre-eminence.

Jim Webb was really a driving management genius, that is his mind ran very deeply in the management process. He also had excellent quality in human relations, and he, I believe, played a great role in the development of the institution of the Presidency.

I was essentially a doer. It was less my role to model, than it was to shape, beyond model.

My relationships with the Congress were excellent. Mr. Truman had me work very closely with Mr. Hoover in the whole program of the Hoover Commission, and I think my relationships in Congress enabled us to get a great deal of the Hoover Commission recommendations adopted.

[20]

A further evidence of Mr. Truman' s real love of the institution of the Presidency was his treatment of Mr. Hoover, which was exemplary. He really gave Mr. Hoover all of the honors and attentions due a former President. And I think later Mr. Truman deeply resented the fact that Mr. Eisenhower did not similarly accord him that kind of treatment. I know that Mr. Hoover was most appreciative of it. Although they were quite different kinds of men, I know how deeply Mr. Truman' s treatment affected him.

HESS: Did you ever hear Mr. Hoover say anything along those lines?

PACE: Oh, yes, Once when I met with Mr. Hoover at the Waldorf, he indicated at length his own feelings about the President.

Mr. Truman had recognized the dignity of the Presidency both present and past and its need to be reorganized. I believed in the Hoover Commission recommendations and felt that bringing them to fruition was of the greatest importance.

When I was Director of the Budget, I created the Budget in Brief. I felt that the budget was a thoroughly non-understandable document, a great big tome, and yet in essence this more than the State of the Union message or anything else, told the people what was happening to their country

[21]

and so we produced the Budget in Brief and I think we sold it for a dollar. We sold a half a million copies and this was very pleasing to Mr. Truman. It was during this period that you began to have the President establish the "pie" chart and let people begin to have a sense of where...

HESS: Where the money's going.

PACE: ...where the money's going. Many people thought of the budget as a purely fiscal document; it was anything but that. It was essentially a social document with priorities established in dollar terms and therefore, a very finite and meaningful social document.

I paid a great deal of attention to recruiting personnel for the Budget Bureau. I personally recruited, because I felt that the quality of young men coming into that organization would decide its contribution over a period of time.

HESS: Who did you obtain for the Budget Bureau?

PACE: Well, mostly these were young people. I went to the colleges and there I recruited against...

HESS: General Motors, IBM...

PACE: ...IBM, General Motors, Time-Life, and...

[22]

HESS: Were they interested? What was the attitude of the...

PACE: Young people?

HESS: ...students.

PACE: Oh, very much so, yes. We drew the bright ones and I wasn't just interested in drawing the ones with a high IQ. I wanted to draw the ones who were practical because Government like academia can sometimes founder on intellectualism, so we got the very solid ones.

HESS: You've got to get people in there that are going to do something.

PACE: They've got to do something.

But all through this, Mr. Truman maintained a great interest in the budget. And he was very tough, very tough, on himself, in sustaining the budget.

I think the time when I really made up my mind when Mr. Truman was a great man, was one day when I brought over a project called the Central Arizona Project. It was addressed to the transfer of water from the Colorado River to Arizona, and in those countries it was said, "You can take my wife, but for God's sake leave my water alone," and this wasn't just a joke, it was a fact.

[23]

When I went in to Mr. Truman I never, as Director of the Budget, presented him with a decision. I always undertook to present him with alternatives. I remember one day he said to me, "Frank, you never have made a specific recommendation, why not?"

I said, "Very simple, sir, I wasn't elected President of the United States."

"Well," he said, "that's a refreshing point of view." But…

HESS: He was used to having people come in and tell him what they thought he should do.

PACE: Well, I wouldn't say that, but at least I don't think it was normal for him to be presented consistently with options.

In this case, I said, "From a purely financial point of view, Mr. President, I can't recommend this. And the benefit that will come from it is not comparable with the benefit that you could achieve spending that same amount of money elsewhere. But I know it has very great political implications for the State of Arizona and I know that Carl Hayden is one of your oldest friends and [Ernest William] McFarland has been one of your staunchest supporters."

"Well," he said, "Is the decision close?"

[24]

And I said, "No sir, frankly there are a great many other projects that from a purely fiscal standpoint, have a greater priority."

"Well," he said, "would you tell that to Senators McFarland and Hayden?"

I said, "Certainly I would, sir."

"Well," he said, "they'll be here this afternoon."

And they came and I told them and they were really stunned. McFarland was defeated I think as a result of it. But Mr. Truman stuck it out and right then I knew that here was a man who would pick the hard right against the easy wrong, despite the fact that he was known as a politician. Despite the record, I always thought he was a better administrator than he was a politician.

I remember one time saying to Mr. Truman, "Mr. Truman, by and large we're the majority party. If we give the people good Government, we'll go on being re-elected." I said, "Why do we fool around with these city bosses? Why don't we shed them?"

He said, "Frank, you're a splendid Director of the Budget, but you're a lousy politician."

And I said, "Yes, sir. I'll get back to my subject."

[25]

He said, "I think you better."

HESS: He had to get along with some of those city bosses.

PACE: He had to get along with all those city bosses.

HESS: I'll just read a couple paragraphs that Mr. Truman has in his Memoirs, pertaining to the budget. This is on page 33 of Volume II:

President Roosevelt had removed the budget operation from the Treasury Department during his administration and had moved it into the Executive Office of the President, under the supervision of a Director of the Budget. Before I began to work on my first budget, however, I decided to make a change, and with this in mind I called in Budget Director Harold Smith.

'I want this to be a tripod,' I told him, 'with the Secretary of the Treasury assisting you and me in building up the budget.'

And that is the way it was done in all eight budgets I made out as President.

Did you work closely with the Secretary of the Treasury as the President mentioned in the quote?

PACE: Oh, yes. Very well. There never was a basic decision that the Secretary of the Treasury was not privy to. In this case the Director of the Budget made the ultimate decision. I don't mean minor, I mean anything that was deeply fundamental.

[26]

Another interesting thing was, Mr. Truman called me to ask me if I would become Director of the Budget, I was recovering from an appendectomy. I said, "Of course, I'm honored Mr. President, I have only one request."

He said, "What's that?"

I said, "That you not make a major fiscal decision without at least giving me a chance to state my position."

"Well," he said, "that goes without saying, Frank." And he never violated it. Never violated it.

I cannot imagine a more satisfactory relationship than I had with the President in this job.

HESS: You mentioned a few moments ago that John Snyder's general viewpoint essentially was, the same as your own, or something to that effect.

PACE: I said to a high degree, yes.

HESS: To a high degree. Mr. Snyder is usually regarded as being quite conservative.

PACE: I was too.

HESS: Would you agree with that, and would you also characterize yourself in that manner?

PACE: Yes, I was basically conservative by nature.

[27]

HESS: Would that be a fiscal conservative?

PACE: I would say...

HESS: How would you describe yourself?

PACE: Well, I certainly am a fiscal conservative. But it is my belief that the great sweep of human events are liberal. I mean, the thrust of humanity is in that direction. I think that my concern is that the forces back of that thrust are always greater than the forces opposed to it. They are more articulate, they are stronger, particularly in a democratic society. And therefore, I feel that it is very important that people, even of liberal tendencies, accept a conservative responsibility.

I've always been impressed by Voltaire who said that "freedom is only the opportunity for self-discipline." And I think to a high degree that would describe my own sense of a democratic society, and whether you would call me conservative or not (I'm certainly fiscally conservative), I think my nature runs towards a support of liberal positions in social matters, but with an insistence on the importance of some measure of control.

HESS: A good many of the measures during the New Deal and then

[28]

Mr. Truman's Fair Deal, were described as liberal; better housing, more money for housing; more money for welfare. What were your views on such proposals? Were you opposed to them?

PACE: Well, my views on that were that the President of the United States decided the national direction. It was then my duty within the policies that he laid down, to see that they were administered with effective fiscal controls.

I have to say that in the area of social legislation I felt that the country had, by reason of the war, had been deprived of social advances, and I had a concern that there might be a tendency to move too quickly to satisfy the problem. I think Mr. Truman understood my point of view rather clearly.

HESS: In Mr. Truman' s Memoirs he went on to say:

The Budget Director called on Cabinet members and heads of government agencies and discussed with them their requirements. The Defense Department, which was the biggest spender, was the first department on which the Director called.

Is that correct?

PACE: Well, it really worked a little differently, they called on us. The Budget Director really sat in judgment on each department's budget, It was in the period that I was

[29]

Director, that a program was established whereby our budget people were actually working in the Defense establishment. I felt that to try to consider the Defense budget annually and with no more background to make actual decisions on so basic a problem as Defense was unwise, you have to have day-to-day and month-to-month knowledge of the requirements for sound decision making.

HESS: While it was being formulated.

PACE: While it was being formulated or the judgment was no good. And, fortunately, the Defense Department agreed with me, because otherwise you were forced into the position of meat ax cuts that were neither good for Defense or good for the nation.

HESS: One further point on Defense: Mr. Truman went on to say:

It was inevitable many pressures were brought to get me to approve larger appropriations. This was particularly true of the military. The military frequently brought pressure to force me to alter the budget which had been carefully worked out to achieve balance with other needs of government and our economy as a whole.

All of them made excessive demands but the Navy was the worst offender.

What do you think about that? Was the Navy the worst offender?

[30]

PACE: I would say that by and large, the Navy is more politically oriented than any of the other three services.

HESS: Why does that seem to be the case?

PACE: The Army, of course, has always been a very large institution, it has had to carry out a great many difficult domestic functions--when I was Secretary of the Army we were given the responsibility of running the railroads. Thus the Army has been forced to take a broader national view. The Navy has been more elite, smaller, and I believe more politically oriented than the Army.

Don't let me give you the impression that I don't respect the Navy, they are superb people.

The Air Force, of course, grew out of the Army. It was the youngest of all the services and it had not developed quite the capacity to make itself felt at that point.

HESS: At the time that you were Director of the Bureau of the Budget did you find that the Navy gave you somewhat more trouble than the Army did, or perhaps the Air Force?

PACE: I can't really say that, no. They addressed their efforts directly to the President.

I have to say in this regard, mind you, that the military did this because they believed that the country needed it.

[31]

Their concern lay less with a balanced budget than with the needs of the country. And having been on the other side of the fence, I have to say I have some sympathy for their concerns in this regard.

HESS: At the time of the Korean invasion, our armed forces had been greatly reduced and perhaps their effectiveness was reduced also. I believe the armed forces had been cut back to such a point to where they couldn't function effectively, why were those cut backs made?

PACE: Well, you know, in these matters you are talking about generalizations that are hard to specifically identify. I mean by that, I think Mr. Truman at this juncture in history, felt that the great requirement was social development internally in this country. The mood of this country was in that direction.

I don't believe that you will ever have what anyone would describe as adequate defense and therefore it becomes a matter of judgment how far you cut back..

We had finished World War II, small wars had never occurred, we didn't realize that international leadership was very likely to bring us into contact with problems we hadn't faced before. Whenever a war comes you've always

[32]

cut back too far. Nobody is ever going to be ready for any kind of a war. And so it is clear that we had cut back too far. But I have to say to you when a war comes, you've always cut back too far.

HESS: And you never know when they are going to come.

PACE: That's right and I will also say that once one, come you almost inevitably over-organize yourself for it.

HESS: All right, we are about down to the end of this reel of tape. Is it about five?

PACE: It's about three of five.

HESS: All right, shall we shut it off?