William K. Divers Oral History Interview, March 12, 1970

Notice
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened September 1971
Harry S. Truman Library
Independence, Missouri

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HESS: Mr. Divers, in our last interview you mentioned that you told Mr. Wilson Wyatt that you'd like to be his representative with the private building and housing interests. Just how did you carry out those duties?

DIVERS: Well, I think that it's desirable to review briefly what conditions were at that time. The greatest war in history was just over. The young men who had been in the armed services were coming back and were being demobilized, were anxious to get married, to go to school, to go back to work, to find a job, and there was probably a greater mobility to the country than there had ever been before, and a pent up demand for housing, because there had been little housing built during the war and not too much built during

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the thirties.

In addition to that, the money was available because people had saved money during the war, they had not been able to spend it on traveling or on luxury items, so they had accumulated savings and they had substantial money available for down payments. This money had been accumulated in financial institutions, and the financial institutions were in fairly good shape in terms of money available for lending. So, the money was available, and the land was available, but materials were very scarce.

One of the things I undertook was to try to work with the homebuilders and the financial institutions in breaking bottlenecks in connection with the production of housing.

There were some financial bottlenecks, too, because a lot of the veterans wanted to get their loans under the GI program, which was a

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very low interest rate. It was 4 percent to start with. And sometimes the procedures would be so cumbersome that it would be desirable to unravel them and try to streamline them in that effort to encourage the financial institutions to make these 4 percent loans rather then the 5 or 5-1/2 percent they could get on conventional mortgages.

There were a number of materials that were scarce. Just such things as nails were very scarce, and sometimes we'd, get reports that nails were in ample supply, and we'd find out that they were the kind of nails that were not useful for building small homes. And other materials of the same sort.

So, my assistant, John Sink, and I served as liaison between the homebuilders and the home financing institutions and the various Government agencies that worked with the housing expeditor in trying to provide the materials that were

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necessary for the builders. I don't remember the figures now, but I'd say that the acceleration in the rate of home building was probably the greatest that the world's ever seen because we went from almost a standing start up to a couple of million units a year. Does that answer your question?

HESS: Yes.

DIVERS: I really think that I might add one thing, Mr. Hess, and that's this, that I've always been interested in private enterprise. I've always felt that the future of housing in this country and that the possibility of reaching our objective of decent housing for every American citizen, depended 90 percent on private enterprise and I felt, frankly, that I could do a lot more for the housing program by working with the private builders, the Home Builders Association

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and the real estate boards and the U.S. Savings and Loan League and the National League, I could do lot more there than I could by fostering some more Government regulations or getting embedded in red tape.

HESS: Did you feel that you were successful in what you were trying to do?

DIVERS: Partially. I think that John and I were successful in eliminating a lot of roadblocks, and possible roadblocks.

On the other hand, we were continually frustrated because there were things from time to time that we couldn't get done or couldn't get done as rapidly as we thought we should be able to do them. In addition to that we were frustrated because we felt that the that some of the staff were more interested in theory than they were in practical solutions to some of

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these problems.

HESS: Who?

DIVERS: Oh, I don't--I don't know that I can even remember their names now, I haven't seen them for so long. But there were a few people on the staff who were recruited from the academic community and who had never been engaged in business and they seemed to think that it was useful to indulge in debate for a month over what should be done rather than to do something immediately.

HESS: I believe that the goal was for a two million seven hundred thousand new homes to be built within two years. Is that correct, do you recall that?

DIVERS: I believe there was something like that, yes.

HESS: Was that a realistic goal?

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DIVERS: Well, it probably was unrealistic based upon conditions at the time, but Wyatt almost made it, so that I guess you must say that it was a possibility.

HESS: Did he come close to meeting that goal with his completions? Or was it mainly starts that . . .

DIVERS: Well, if the starts were principally privately financed you didn't have to worry about whether they would be completed or not, they were going to be completed, they were going to be completed as rapidly as possible, and usually for building a home that means ninety days or less. So that--I wouldn't say that his efforts failed because he just had starts instead of completions. I'm just looking at the record(Savings and Loan Fact Book '69, United States Savings and Loan League, 1968.) here and I see that in 1946--well, in 1946 there were one million fifteen thousand starts. In 1947, there were a million two hundred sixty five thousand, or a total of two million two hundred

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and eighty thousand for the two years. And when you consider that there were three hundred and twenty five thousand in '45, you can see the acceleration. And you want to remember that many of the materials for these homes came from factories that had to be converted from war production over to civilian production after the end of the war so that there were and some of the factories that converted had difficulty getting machinery because the machine tool producers had to go from producing machine tools for war production over to machine tools for civilian production.

So, there were bottlenecks all the way along the line, but I think that the everybody in Government tried and it was really I think Wyatt's accomplishments were great. The only thing that I regret is that he didn't accomplish more because I think that he could have accomplished

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more.

HESS: How?

DIVERS: Well, probably by listening to some different people.

HESS: Who?

DIVERS: Nor, I think one of his weaknesses was that he listened to politicians. It was no secret that he had a lot of political ambitions and he always had time to visit with the mayor of a city for an hour when--and might not have time to visit with one of the--to meet with one of the top staff members who was postponing some important decisions until he had an opportunity to see Mr. Wyatt or--and I can't, I really can't put my finger on it. I'd say that was more that the that he relied too much upon people who thought that things could be--that the rate of production

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of housing could be increased by more legislation, more regulations, and things of that kind rather than that you could find out more about the problems and get more possible solutions from talking to the people who actually produced the houses, the moneylenders, the--I mean the financial institutions, the architects, the engineers, and the builders, and the people who produced the materials that went into the houses.

HESS: To bring up the terms, liberal and conservative, did you think that Mr. Wyatt was perhaps a little too liberal?

DIVERS: I don't know. I mean that he probably was in the center of the administration at that time. In other words, I think that I would not put him either to the right or to the left within the Truman administration. I think that some of his ideas might have been a little impractical,

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or impossible, but he had a million ideas and a lot of them were good, and were productive. I mean there was no doubt about it and I don't want to give the impression that I'm trying to undercut his great accomplishments because he did accomplish a lot of things. He may have been influenced too much by people who were too liberal. I think that he probably was.

HESS: Who were some of those advisers?

DIVERS: Well, Keyserling was one of them--and I don't even remember the names of these people. Maybe you, if you have a list of the people that were there, then I could refresh my recollection, but all I remember is that there were several of them who came from colleges and had never worked in a factory, never worked in an office, and he seemed to put too much store in their advice. I mean they had some fancy

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theories that would never work and by the time they got through trying them out, why it was too late to do anything about it.

Sometimes I felt that the great surge of the home building that we had at that time was in, almost in spite of some of the efforts of the housing expediter, rather than because of him. And, as you know, this question finally came up when the War Production Board, or whatever the name of it was then, took the priorities off of materials, took the controls off, wanted to go back into free economy, and Wilson Wyatt wanted to keep them on for housing only. And I'm sure that Mr. Truman made the right decision by taking them off for housing too.

HESS: What would you list as Mr. Wyatt's greatest accomplishment at this time?

DIVERS: Well, I think that he focused the attention of a lot of people on the desirability of producing

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great quantities of materials for home building.

Without somebody to constantly keep the public aware of the housing shortage and of the tremendous needs for material and furniture and everything that was needed to overcome this shortage, I think that the rate of production might have been substantially lower and there might have been more disappointment over the housing facilities and the housing supply in the Nation.

HESS: Now, did he have some difficulty with some of the other people in the Government who wanted materials used for other things besides housing?

DIVERS: Oh, yes. I don't remember who they were, but I know that they were . . .

HESS: The one I had in mind was John Small.

DIVERS: Well, there were two philosophies. I mean

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one of them was that the greatest need of the returning soldier was for a job, that was John Small's philosophy.

HESS: He was Civilian Production Administrator.

DIVERS: Yes. And Wyatt's philosophy was that they needed housing and I suppose that both of them were right.

You want to remember that a lot of these men who came back married immediately, or had married while they were in the service, and when they came back they moved in with his folks or her folks, and it was all right as a temporary arrangement, but certainly it was not all right as a permanent arrangement. And many of them were going to college. And the colleges had the accommodations for single people, but they didn't have the accommodations for married people.

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And, in thinking back, it's possible that the use of the war housing for married couples at colleges may have been one of the bigger accomplishments. Because we took a lot of trailers and dormitories and picked them up and moved them to the colleges and provided a lot of accommodations at the colleges both for single and married GIs, which was very necessary and very useful, and was used for eight or ten, twelve years probably even though it was temporary housing.

HESS: When I attended Kansas University in 1956 and '57, Sunflower Village was still at the foot of the hill, which was dormitories that were brought in after the war.

What do you recall about the Lustron Company's attempt to produce inexpensive assembly line steel homes?

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DIVERS: I never sat in on any of the negotiations with Lustron, and had little knowledge of it until it hit the headlines because of a high level quarrel that was going on, high level negotiations. As I recall there was a war plant out in a suburb of Chicago that had been used for making airplane engines during the war.

HESS: Willow Run, is that right?

DIVERS: No. No, it wasn't Willow Run, it was south of Chicago.

HESS: Oh.

DIVERS: Willow Run was out west of Detroit. And this was a big plant that had been used for I think for airplane engines and it was declared idle so it was available for private purchase or lease, and Lustron applied for this plant and also for a loan to provide housing. As I

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recall, Mr. Wyatt had authority to make or to guarantee loans for the production of housing. And some other people were interested in getting the plant, but I don't think that that interfered with the Lustron plans because I feel sure that I think Wyatt had the priority for the use of this plant. But some questions came up about the experience of the Lustron organization. They did have a metal panel that they proposed to use in the assembly of these houses. It had not been tested in the field as I recall. Nobody had ever lived in a house that or there had never been any small pilot project in the production of such houses. The people who were to produce them had had little experience in providing housing, finished housing, and the Government was considering putting a lot of Government assets into this project and was at that time some question was raised about whether too much

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influence was being brought to bear on some of the public officials to get this done, and I don't exactly recall what the--who was involved particularly. I think that, if I recall correctly, that David Krooth was one of the people on the staff of Wyatt who were negotiating with Luston. Who else was I don't know. But I had had a call from somebody who was interested in pushing it and I referred them to Krooth and that was all I knew about it.

HESS: Did you mention, in one of our previous interviews, that you went up to the, what used to be the Truman Committee, the Senate Committee to Investigate the National Defense Program?

DIVERS: Yes.

HESS: To testify about Lustron.

DIVERS: Yes, I did, but I think that, as I recall,

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the extent of it was that I told them that I had one call and I told them who it was from and told them how I handled it and that I was not handling the Lustron negotiations, had no part to play in them, I was intensely interested in it as a possible answer to the housing problem, but . . .

HESS: Did you think it was feasible?

DIVERS: I didn't--I hoped it would be feasible. I was anxious to see some effort made to produce housing on an assembly line, but I was not convinced of the--I didn't know enough about it really to make a--to arrive at a conclusion because other people in the office were handling all the negotiations and I never had seen any plans, specifications, or anything.

I think that my greatest interest was this: I had been interested in housing for a long

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time. I had been interested in the materials that go into housing. I had been interested in cutting costs. And when we look at a wall that's built in a brick house or a frame house, there's been very little improvement or change in it in centuries, so that a lot of us in housing were looking for some wall material that could be assembled in a factory instead of on a site that would have the characteristics of the brick and/or wood covering, insulating qualities, the effect of the air space that's in the wall now, possibly vermin proof, and insect proof. It would not—it would have a lack of conductivity. In other words, it wouldn't let the cold come in and wouldn't let the heat go out. It would provide an insulating barrier without providing the moisture that comes with many of the insulating materials that have been proposed, and would have exterior surface that would be readily cleaned

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and wouldn't require painting or maintenance, and an interior surface that would meet those same requirements. And this is what people had hoped that Lustron might be providing. But I suspect that if it met all of these requirements, that it probably would have been done privately by now.

HESS: What went wrong with the Lustron plans?

DIVERS: I don't know. I only--I'd have to reconstruct it, but what I would say is this, that Lustron didn't have any money to back him up. He didn't have any financial capital. He wanted the Government really, as I recall, to put up practically all of the money for him and as soon as the Government starts putting up all the money for anything there is a lot of competition.

HESS: Well, the first time that he went to the

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Government he tried to get a $52,000,000 loan, but that was blocked by George Allen who was on the RFC. Do you recall that? Do you recall any of Mr. Allen's involvements?

DIVERS: As I recall, and this has been many years ago, the RFC was supposed to be the source of funds for housing, for projects that Mr. Wyatt approved. If there was a shortage in some particular material for example, and a supplier was willing to double his capacity but needed money for it, why, Wyatt would so certify to the RFC and the RFC would get them a loan from a bank or lend them the money. And I think that there were probably very few loans. There probably was little need for such loans because money was not tight at that time and banks were willing to make loans wherever it seemed to be of business-like purpose, so I don't think there was any real need for it,

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HESS: As I understand, after Allen left, and was not longer there to block it, Lustron did get a thirty-seven and a half million dollar loan some time later.

DIVERS: They got a commitment. I don't think they ever got the loan. They got a commitment for the loan, conditioned, as I recall it, it was upon getting the production facilities, the plant. So, until they had the plant they didn't have the loan and that enabled the people when they were going to do some--I think that what they really did was they wanted to second-guess the desirability of this thing, by holding back the plant they were able to cancel the commitments of the loan.

HESS: At the time that you were up on the Hill testifying before the committee was, of course, when Mr. Truman was in the White House and

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he was no longer with the committee. Who do you recall as being there that day that you testified before the committee that used to be the Truman Committee?

DIVERS: I don't remember. I'd have to look up the hearings to find out. Do you remember? Have you looked at the hearings?

HESS: No, but James Mead was chairman from October the he was chairman after Mr. Truman left, until October the 1st of '46.

DIVERS: He wasn't chairman, he was the counsel for the committee, wasn't he?

HESS: George Meader was chief counsel.

DIVERS: Oh, yeah, that's right. You're right.

HESS: Then Harley Kilgore came in and served as chairman from October of '46--October the lst until

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January the 6th of '47. He was in there just a short while and then Owen Brewster was the last chairman.

DIVERS: Yeah, I don't remember any of them. My appearance was very brief. I was only there for five minutes as I recall, and I answered a few questions. Most of the questions involved a call that I had had from Ted Granik as I recall. Granik was a Washington lawyer who had been Theodore Granik--he had been in housing, he'd been in housing with me and he was producer of this radio and television program titled something like "America Wants to Know" or something like that, but it was one of the early discussion programs and was very well known, and very successful for a time. It was a predecessor of a lot of these other Sunday afternoon discussion programs.

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HESS: What was the nature of his inquiry? He was just trying to find out what was going on?

DIVERS: No, he, as I recall, he was financially interested. Either had a piece of the action or was an attorney fox Lustron or both, so that he was very much interested and would have been happy if I had been willing to do what I could to push it, but I didn't know enough about it and I knew that he knew Dave Krooth and Dave Krooth was handling it and I suggested to him that he talk to Krooth.

HESS: And during this period of time, in about November of 1946, was the Republican victory at the polls when the 80th Congress came in. Did that cause any particular difficulties or call for any changes?

DIVERS: No, I don't think it made any changes at all in terms of the operations of Wyatt's office.

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That was when?

HESS: '46.

DIVERS: '46. No . . .

HESS: November of '46.

DIVERS: No, that made no changes. I guess that it may have been the occasion for closer scrutiny on Capitol Hill of what was going on in every Government agency, particularly in some of these emergency agencies. But in terms of staff, our relations with other Government agencies, our relations with the public, that had no effect at all.

HESS: In a letter that I found in your scrapbooks dated December 10 of '46 from Wilson Wyatt to you at just about the time that you were both leaving, he said:

I want to take this opportunity to express my thanks to you for the truly splendid

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job that you have done during the last year. You handled a very delicate relationship with tact and poise and have been a great credit to the program and a source of personal satisfaction to me. I know that your interest in the program continues as does mine. Best of luck for the future. Wilson W. Wyatt.

Just what was that very delicate relationship that he referred to? Was that working with the homebuilders?

DIVERS: I think that he meant working with the homebuilders and the home financing institutions, and real estate boards and so on and so forth because none of them had ever had any Government regulation you might say, prior to World War II. And most of them were not active during the war, so that when they began to go in and they had to get priorities for earthmoving equipment to get a site cleared, and then priorities for reinforcing rods to lay foundations, and priorities for pipe and so on and so forth, it

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was a whole new ball game for them and they brought their--all their grips to Frank Cortright who was the executive vice-president of the National Association of Homebuilders, and Frank would take them directly, usually to Small's office and then if he didn't get a satisfactory response, then he'd come to me and I'd try to get Wilson Wyatt to get a satisfactory answer from Small's office. It's hard to imagine, but one of the most difficult jobs that we had to do as I recall, was to get chicken wire for home building. None of the smart people in Washington knew that chicken wire ever went into homebuilding and they . . .

HESS: The college professors did not know that.

DIVERS: Well, it wasn't only the college professors, it was architects and engineers and so on and so forth. But it seems that there is a large

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section of the South where they use it as reinforcing for stucco, the stucco facing that they put on the houses and it had been used that way for decades and it's the best material that's available for the purpose, it's the cheapest material if it's available, and if they were going to continue to construct houses in the traditional way, they needed chicken wire. And we couldn't get any priorities for chicken wire, and Small's office wouldn't give them any, and of course, wire of any kind was short at that time. And finally, some place, Z mean after a lot of meetings and conferences and everything, we finally got them a supply of chicken wire.

HESS: Were there ever any times when John Small and Wilson Wyatt were successful in working together?

DIVERS: Well, their staffs recognized the necessity for working together and . . .

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HESS: Who did you work with the most on Small's staff?

DIVERS: Well, I don't remember . . .

HESS: One man was C. Ray Davisson. Do you recall him?

DIVERS: Yeah. He had a job, as I recall his job was somewhat similar to mine, working with the homebuilders, and I think he was the gentleman who went with me and people from the homebuilders to meet with homebuilders in some of the larger cities of the country and he was--he represented Small's office at these meetings. He understood most of the problems, but I'm afraid that he didn't carry too much weight when he got back to the office.

HESS: Do you think that perhaps in the same way that you carried more weight with Wyatt than he did

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with Small?

DIVERS: Well, I suspect that I did because I've always been independent and I have always tried to tell the man I was working for exactly what conditions were whether he liked to hear them or not, and as a result, I mean my reports to Wyatt were never glowing. I was usually the bringer of bad news. I didn't bother him unless there was something that I thought was important that needed to be done, and tried to do it myself and if I couldn't do it myself then I called it to his attention. I guess that on my infrequent visits with him, and they were infrequent because I didn't want to bother him, I guess that he knew that it was worthwhile to listen, and he usually agreed with me and tried to accomplish what I proposed.

HESS: Why did Mr. Wilson Wyatt resign?

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DIVERS: Oh, he resigned because he didn't get his way I guess, that he wanted to--wanted President Truman to continue giving priorities on materials for construction of homes and Mr. Truman thought the time had come to end controls, and I agreed with Mr. Truman. I think that one of the people who were ready to end controls was Ray Foley who was then Administrator of the FHA.

HESS: All right, we'll get into Mr. Foley's episode in just a second, but why did you leave as Assistant to the Housing Expediter? You left around December 10 of '46 I believe.

DIVERS: Well, after Wyatt left, Ray Foley was appointed as Housing Expediter in addition to a--he was appointed as a successor to Wyatt as the head of the housing agency.

HESS: Administrator of the National Housing Agency.

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DIVERS: That's right. And also as the successor as expediter as I recall.

HESS: Did Mr. Frank Creedon . . .

DIVERS: No, I guess Creedon was in the . . .

HESS: He came in, I don't think that Mr. Foley did, but I think they split the two.

DIVERS: Creedon was from Small's staff I think, and Foley offered me a job as Assistant Administrator to the National Housing Agency, which I had formerly been. I don't know whether I held that title while I was with Wyatt or not. I don't think so. And along about that time the Housing and Home Finance Agency was created, a few months later. So, the post-World War II housing seemed to be with the--critical jobs seemed to be fairly well accomplished and it looked like more of a long term job, and Mr. Foley asked me

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to go with him and I told him I would.

HESS: Do you know why Mr. Foley was chosen to be the Administrator at this time?

DIVERS: Well, I think it probably, he represented Mr. Truman's views better than anybody else who was on the horizon. I mean that--it's a funny thing--I mean I used to go up before committees of Congress and I would speak very glibly about what the views of Mr. Truman were on the subject of housing even though I had never discussed it with him and it had always seemed to go over real well and I never got called down for anything I said about it. But I always had the impression that he wanted to do everything that he possibly could do with private financing and with private enterprise and that he only wanted the Government to go in where there was some major problem or some major purpose that

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could be accomplished by going in and that was my philosophy and that was Ray Foley's philosophy.

HESS; What special qualifications did Mr. Foley bring to the job and just what had been his background?

DIVERS: Well, Mr. Foley had been--and I want to quit pretty soon incidentally, because my voice is getting tired.

HESS: O.K.

DIVESS: Mr. Foley had been the FHA commissioner and prior to that he had been the FHA State Director out in Michigan, and prior to that he had been a newspaper editor out in Flint, Michigan, I believe, or Pontiac, I forget where. He was very knowledgeable about the private financing and private production of homes. Michigan had been one of the states where there had been a great surge of private homebuilding before the

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war. He was politically astute. He was--he is a man of courage, he's a man with a--he has an unblemished reputation and I think that he was kind of appreciated by the mortgage bankers, other groups and the homebuilders.

HESS: Why?

DIVERS: Well, because he took the time to understand their problems and to try to make it easier for them to operate while he was still looking out for the public interests. So, I had known Mr. Foley when he was the State Director in Michigan. And, as a matter of fact when Abner Ferguson, I think it was, resigned as the FHA Commissioner here in Washington, I recommended Ray Foley for the job. He might have gotten it anyway, but anyway I was the--at that time I was the regional representative of the National Housing Agency and was theoretically supposed to

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coordinate the activities of the Federal Home Loan Bank system and the FHA and the HOLC and other housing agencies within my district, which was a good part of the Middle West including Michigan, and Ray Foley and I met frequently in Detroit. We fought the battle of Willow Run together, and we usually saw eye-to-eye and respected each others' views, so I thought he was a good choice for FHA commissioner, a good choice for administrator to the Housing and Home Finance Agency and this is--if you want to interview him I can tell you where to find him.

HESS: All right, where could I find him?

DIVERS: He is now out in a suburb of Detroit and he's president of a savings and loan association. He's still pretty active. He's president of the Colonial Federal Savings and Loan Association in Grosse Pointe Woods, Michigan.

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HESS: That sounds like a high rent district.

DIVERS: Well, he was on their Board of Directors and the manager went to Florida to attend a
meeting and had a heart attack and died, so they asked Mr. Foley to take it over, You notice I still refer to him as Mr, Foley because he was my boss for a while . . .

HESS: Do you want to cut it off?

DIVERS: . . . for some time.

HESS: Want to shut if off for today?

DIVERS: Yes, I'd like to.