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Notice Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the Livermore oral history interview. RESTRICTIONS Opened October, 1975
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Oral History Interview with
March 4, 1974 by James R. Fuchs FUCHS: Dr. Livermore, I thought we might start by you giving us a little background of where you were born and your education and how you came to work for the Federal Government the first time. LIVERMORE: I was born in Wellesley Hills, Massachusetts in 1902, September; and stayed there until I was 12, when my family moved to Chicago, Illinois. I completed high school in Chicago and my parents sent me back to Dartmouth College, for sentimental reasons, in New England. My brother went to the University of Illinois. I've always been, therefore, a geographically split personality, also because my mother's family were Chicago pioneers in the 1840s: the Ogden and Downs families. Her grandmother was a cousin of the first mayor and "Patriarch" of Chicago, William B. Ogden. She was a pioneer resident of Chicago (1844) and of Lake Forest. Chicago seemed as much home to me, and always has, as New England. FUCHS: What did you study at Dartmouth? LIVERMORE: Well, I was a major in government, as we say today. By temperament I should have been an historian; my son has turned out to be one. He is at the University of Michigan. My daughter is a professor of classics at the University of Maine -- two academic children! I was valedictorian of my class (1922) with an outstanding academic record, but my family were business oriented entirely. They didn't know anything about the academic world even though my mother was Wellesley '95. So, as a compromise I was sent to the Harvard graduate school of business in 1922. Graduate work there for me was exceptionally easy and I had the highest record in the class, especially the first year. But I never wanted to become a business executive. In my subsequent life I think I carried out a basic drive of my nature which has been to experiment with different activities in life; not to be bound down in a lifetime with one corporation or one job. I have had a tremendous diversity of interests and about 15 "permanent" jobs. I had quite a time getting into the academic world. I was nabbed, you might say, after leaving Harvard to work in the securities boom of the late twenties in Boston. However, I had gotten in a single adventurous winter out in Duluth, Minnesota before I came back to Boston. FUCHS: What did you do out there? LIVERMORE: I was doing one of the very earliest marketing surveys of the Northwest, from the Twin Cities to Seattle. In Boston from spring '26 to the fall of '28 I was a combined statistician, economic analyst, trainer of salesmen, and general research and idea man in an active brokerage firm. It was like living in a crazy nightmare or a dream when you look back on it. By late '28 I knew I didn't want to go on with the "Boom" idiocy longer, so I got a job in December of '28, before the boom had broken, to go to the University of Buffalo. It was then a privately endowed institution. It is now the State University of New York at Buffalo. With time out for graduate work I remained there until the spring of 1941, doing a great deal of consulting and writing. All the good writing I've done, or nearly all of it, was in that 12-year period when I was in my thirties. FUCHS: I believe you produced a book in that period which you say still has some sales. LIVERMORE: Yes, the Early American Land Companies book, which was a study of the pioneer corporate character (without state charters) of the early speculative land companies, has had quite a revival in historical interest. Harvard Press handles a hardback reprint of it It's primarily of value to legal historians in law schools, rather than as a general historical work. At Columbia University in the thirties I was allowed to write a thesis that split between economics, history, and law. More than a third of my work was in the Columbia law school rather than in the graduate school of arts and sciences. That is testimony to the liberality of graduate study at Columbia as compared with Harvard or Chicago, at that time. So I've always been a great admirer of Columbia. I wrote a couple of textbooks in that period and a lot of articles. The great break of my life came, of course, in the spring of '41 about eight or ten months before Pearl Harbor. My acquaintance with Eddie George led to that. I was among the first recruits in the spring of '41 in the skeleton war-directing organization that had begun in late 1940. It was the predecessor of the final War Production Board. There were a few business executives there, including Bill [William L.] Batt and Arthur Whiteside of Dun and Bradstreet, Because of Eddie George's connection with Dun and Bradstreet, I was assigned to Arthur Whiteside, president of Dun and Bradstreet. He was then down there as a friend of Don Nelson, in the summer of '41. He remained afterward for a couple of years during the Second War. Well, the summer and early fall of '41 was one of the great periods in my life, because we were asked to work simultaneously on as many as 10 or 12 different problems, according to what came into that little office, long before Pearl Harbor. And it was in that period, in the summer, that I picked up an interest in the mining machinery industry. This remained my favorite industry all during the war, because we were struggling to keep them from converting over to military production. It would have been disastrous for metal and coal production during the later stages of the war in '44 and '45 if we had not preserved those companies as manufacturers of their own products rather than converting over to making naval turrets or artillery(which their owners and directors wanted to do, in 1942 especially). FUCHS: What was your title there? LIVERMORE: We had no titles. We were classified under the Civil Service Commission I believe as "industrial analysts," all of us. It was a very wonderful period because there was no hierarchy. You worked on whatever was pressing, or for whichever one of the top men, like Batt or Whiteside, who had something where he needed help. We also interviewed many businessmen who came down wandering around trying to find how they could secure a little help in getting materials away from the military. The pressure was already on before Pearl Harbor on some of the alloy metals and on certain kinds of machinery. The military were already in their buildup before Pearl Harbor. FUCHS: Now were some of these men, such as Whiteside, dollar-a-year men? LIVERMORE: Oh, yes, all of the ones that I remember. Bill Batt certainly was. He was head of the big roller bearing firm, SKF, and Whiteside was still active in running his own company. He had to go back two days a week to New York. FUCHS: What was your view of the dollar-a-year men? Mr. Truman, as you know, as a Senator had some apprehensions about this. LIVERMORE: That status more or less disappeared, of course, by the end of '43. But in '41 and '42 there were a great many dollar-a-year men. I've often reflected on it. I did at the time. You could get individual cases over the whole spectrum. There were men who used it only for selfish interests in order to find out for their own company's benefit what was going on. I don't think anybody abused the position, in the very narrow selfish sense of grabbing anything for their own company. But they did benefit by having their antennas out and knowing what was coming. On the other hand, at the other end of the spectrum, there were at least a half dozen men that I can think of who gave complete service to the Government, with no thought of personal gain or the interests of their companies. Whiteside was a classic example. His company didn't depend on any allocation or decisions. Dun and Bradstreet was a 100-year old world-famous firm and they weren't going to be injured or helped either way. He was completely free to do as he saw the best interests of the country. Bill Batt was in that status also. His company had sold out their complete capacity for roller bearings for months and years ahead, so he had no problem as far as his own company was concerned. He was a tremendously social-minded man anyway. FUCHS: William L. Batt? LIVERMORE: William L. Batt. FUCHS: What was his position? LIVERMORE: Right-hand man to Nelson, in the fall of 41. He was a great example of the best kind of dollar-a-year man you could hope to find. There were some men in the steel industry, in the steel division later, who were obviously trying to get competitive advantage by their positions. On the other hand, the ablest single man that I worked with in that very high-powered organization we had all through '43 and '44, was Richard F. Sentner. Dick Sentner later became an executive vice-president (marketing) of the United States Steel Corporation. He was then a young sales manager for "the corporation", and he was sent down by his company on a dollar-a-year basis originally. He afterward converted over to a salary basis. He had the ablest mind, in the very intricate problems of allocation and management of resources, that I think we had in the War Production Board. He used to describe himself as a Pennsylvania Dutch steel peddler. For some reason his mind was sensitively adjusted to the problems of war management. He afterward worked with some of us all through the fifties on civilian war planning. He was always very helpful. The thing that's never been brought out, perhaps, is that many of the early dollar-a-year men (and several college presidents, too:) were completely at sea when they got to the War Production Board. They never did catch on to what the Board was trying to do. They were sent home quietly; or went home of their own accord. They were simply lost souls. They were successful salesmen or accounting or production men (or college executives) in their own companies, but they were completely useless for the problems of war direction and allocation. FUCHS: What was the basic problem and the approach of WPB to it? LIVERMORE: It was a delicate balancing of interests; primarily between the military requirements of the country and the necessity for maintaining a strong civilian base for a very large-scale war effort, in which the United States was the key production unit for the Allies. Maintaining this balance between military and civilian bases was the central problem of the years '42, '3, '4, right up until the spring of '45. FUCHS: Those dollar-a-year man never realized that, and were sent home. LIVERMORE: Many certainly never understood this basic problem. Their minds were not flexible. You had to have an extraordinary flexibility of mind: one week you'd be working on electric light bulbs, and the next week on mining machinery, as I had to do; or on leather or shoes, as Eddie George had to do in '43. Things that you never knew anything of in advance. The highest compliment I was paid during the War Production Board years was at lunch one day with a group of mining machinery mea, about early '43 or late '42, and one of them asked me, "Shaw, which company did you come down here from?" He thought I was a mining machinery executive. I had learned enough in a year so that I could talk their own inside problems with them. This was the outstanding requirement, probably, of the top people on the delicate balancing of requirements -- the ability to learn quickly and accurately what the circumstances were in a given industry. Whether it needed control or did not need control. In the case of electric light bulbs we rejected the idea of allocation and control; in other cases, we saw the need to put many industries under control. Well, it was flexibility, curiosity, natural intelligence, skill in finding the key points or problems in a given situation that determined the worth of people. FUCHS: Then you worked principally with overall program requirements? LIVERMORE: In early '42 I switched over partly to Bill Batt's operation, which was the combined international requirements and allocations between Canada, Britain, and the United States. It was a three-cornered arrangement mostly with the British to direct shipments from the available sources that the Allies had. Exactly the right amounts would go to the British and exactly the right amounts would be retained by the United States, and vice versa. This covered as many as 25 different commodities; rubber, leather, and all the metals, zinc and copper, particularly, where part of the supply would be coming either from South America, or from South Africa or other British dominions. Nickel was the most famous, maybe; that was, of course, the great Canadian contribution, and the adjustment of shipments at the source so that you wouldn't have material ending up at the wrong port, was the primary aim of the Board; and also forecasting, we were continually forecasting the situation six months or a year ahead for the benefit of the top political command people in both the British and American governments. The British and ourselves pooled our information on possible increases or decreases in future supplies. This was critically important in '42 because of the submarine sinkings, particularly off the Virginia coast and off South America by the German submarines. This constantly changed the supply outlook, of course, with each cargo sunk a deduction from the potential supply. FUCHS : Was your work all done in this country during this period? LIVERMORE: Yes, I never was sent over to Britain. Bill Batt made several trips to London flying in the underbody of a Mosquito fighter. He nearly froze to death. Eddie George went over on the problem of leather later. But in general we were able to handle most things by cable. The British came to visit quite a bit. FUCHS: From your position, what were your views at the time of the top men like Nelson and his successors? LIVERMORE: Eddie George of whom I was personally so fond, and worked with so closely, was Don Nelson's chief adviser from about September 1941 until well into '42. My views are simply the reflection of Eddies. He died about ten years ago. My memory is always very good and I can recall his various comments at the time, about Don Nelson. He was very fond of him. Nelson was a top-notch type; he was very calm and reflective, never impetuous. He thought of all sides of every problem carefully, and in this sense he was near to the ideal executive. His main failing was some timidity toward the military. He was a little slow in speech and action. For this reason he didn't get along as well as he might have with Harry Hopkins who was, of course, the primary contact between war production management organization and the President. FDR obviously delegated much of the day-to-day reporting about the civilian side of the war to Harry Hopkins. FUCHS: I think it has been charged by some scholars that Nelson, and I'm not sure of the implications of this, failed to use all of the prerogatives of his office. LIVERMORE: That's correct. He hesitated to use "clout," as we say today. He was not by temperament a man that liked to do that. He'd much rather persuade and convince people than to force people. Now this was particularly bad in his conflicts with Bob Patterson. He was the Under Secretary of War and was in the Army the highest official dealing with civilian problems as far as the military had a voice -- which they always tried to have, of course. They were always infesting our committees and our allocations system. Both the Navy and the Army had equal positions with civilian and foreign claimants in allocations. It was a four-cornered struggle you might say. Patterson was a very unpleasant character and a very shortsighted man. We used to call him "hairshirt." He wanted to abolish baseball. He wanted to abolish Coca-Cola. He had a lot of silly ideas about what should be done to make the civilians "suffer" as he put it. He wanted to make them suffer along with the military; which, of course, was ridiculous, when you were trying to get a strong and powerful industrial base at home. What you needed was to keep the workers happy so they'd produce more, not to deprive them of things so they'd sulk. He had a wrongheaded view of the whole delicate allocation problem. This is very harsh on Patterson -- but many other people said the same thing at the time. FUCHS: Very good to get in the record. How did you counteract the Patterson force and pressure on WPB? LIVERMORE: In some of the critical conflicts I'm sure that Hopkins intervened. A great and much abler exponent of the military point of view was General Lucius Clay. He was a skilled debater in our allocation meetings. He had two or three famous debates with Lincoln Gordon who was, of course, the boy wonder of the whole Board. There was about a standoff between the two of them. They debated the philosophy that I just mentioned of how do you maintain that delicate balance of civilian strength and military strength for a very large-scale war that promised to last for several years. FUCHS: What was Gordon's principal job then? LIVERMORE: When Ferdinand Eberstadt came in to set up the CMP system, the basic final allocation system, Lincoln became the chief program planner of CMP. He worked under various chairmen of the Board and various vice chairmen. He was always abler than his superiors, so finally he was made vice-chairman for requirements toward the end of the war in '44. He and I always worked together well. He got me to go over to the Marshall Plan later. We were quite different temperaments. He was younger. I had a range of curiosity and inventiveness which Lincoln liked. I was always giving him new ideas; at the same time I was not ambitious, trying to surpass anybody or steal a job. We made a very interesting working team. I succeeded him as chairman of the two major requirements committees in '44 and '45 after he had led them successfully. FUCHS: I believe Eddie Locke was the principal liaison to the Truman Committee, but did you have any contact with them? What are your views of the Truman Committee? LIVERMORE: Well, we always thought it was a good idea. I think once or twice I was interviewed by staff of the Committee on the mining machinery business. FUCHS: Committee hearings? LIVERMORE: No, no, they used to come down and visit -- some of the staff, some of the Truman Committee staff would be down there. And I remember talking once or twice about coal machinery which, of course, was one of the critical civilian industries. FUCHS: Also, I believe reconversion became a subject which you were interested in later on. Do you recall any anecdotes, or what were the principal problems there? LIVERMORE: Oh, I think the most interesting thing was our early start. We called that early effort "codcave" a coined word -- like a cave for the fish... FUCHS: What was that? LIVERMORE: "Committee on the Demobilization of Controls After VE Day." It spelled codcave. FUCHS: I've never seen that in writing. LIVERMORE: It's in the official WPB history. We started work on that immediately after the invasion of Normandy. That was in July of 1944 after we were certain that we had a foothold in Normandy. We began planning demobilization very early. That, of course, answers the charge of lack of foresight in the Board. We were too farsighted, because through the fall after Eisenhower began to slug it out on the Hindenberg line, just before the Battle of the Bulge, we had to slow down. We weren't going to overthrow Hitler quite as fast as we had figured. In June 144 we anticipated that the war would be over by the end of the year, the end of '44. FUCHS: Oh, you did? LIVERMORE: Actually it wasn't over until May of '45. FUCHS: Yes. LIVERMORE: We had done an immense amount of internal work on reconversion. Paul Homan and Linc Gordon, and myself did a great deal initially. Later, we circulated ideas to the various operating divisions. We gradually accumulated one or two men in each of the major divisions who in the spring of '45 really went to work; I mean we had guys located ahead of time that would work on just how to revoke control orders, the timing, and all that sort of thing. FUCHS: Nelson was succeeded in 1944 by [Julius A.] "Cap" Krug I believe, Do you have any views on Krug? LIVERMORE: He was, of course, a New Dealer who had made quite a reputation in the power industry. He was in many ways an able type, somewhat the same as Nelson in many ways; very flexible, a very good group worker, all that. He wasn't a flashy, outstanding personality. He never had any great ambitions, I think, to be a big tycoon, But he was a marvelous inside manager of the Board. I think Krug's job was made very easy because by the time he came in we had what I would call a high-powered, 16-cylinder organization under him. It didn't need much direction. By '44 WPB was the best human organization I have ever seen or heard of, in terms of the native ability and intellectual skill of the two hundred men who were the key operators in the various divisions. The weaklings had been sluffed off by that time. It was intensely competitive in the best sense: you were dealing with people of equal ability and skill with yourself, so it was a very satisfying kind of job. You never had any dumbheads to deal with, at least inside the Board, by '44. FUCHS: Then you stayed with the Government up through V-J Day? LIVERMORE: Oh, yes, "they" wouldn't let you out. I had been talking about going with Dun and Bradstreet because of my admiration for Whiteside from way back. Of course, Eddie George had been conniving to get me to go up there. That's where I went in the late summer of '45. And from then until the winter of '48-'9 I was out of Government. I was working on a very interesting job in Dun and Bradstreet, doing contract research for clients in business all over the country. We were one of the pioneer firms in consulting, and in marketing research, long before the great development of the last 15 or 20 years. We did a lot of pioneer studies for many well-known firms, had wonderful clients, accumulated a home staff of one hundred or so, and used the Dun and Bradstreet field reporting system. FUCHS: How did you come to leave Dun and Bradstreet? LIVERMORE: Because of the Marshall Plan. As early as July '48 I was discussing a possible job in Europe. I knew so many of the people that were then working to organize the Plan. FUCHS: Who were some of them? LIVERMORE: ...on the Marshall Plan? Well, of course, the most famous was Richard Bissell, who later came a cropper in the Bay of Pigs fiasco, you know. He was an outstanding Government servant in 1947 through 1952, however. He was a major adviser to Paul Hoffman. Linc Gordon was, of course, there also with his keen sense of "where the action was." He was already at work in the spring and summer of '48. As Lincoln will tell you when you interview him, he was one of the original "three wise men" who went over to Europe in the summer of '48 to lay preliminary plans for how you would run a completely new idea, the Marshall Plan. He got hold of me and wanted me to get interested. He said, knowing my footloose love of variety, "You don't want to work for Dun and Bradstreet all your life." Averell Harriman had been selected to head the Paris office, and the problem was to get about a dozen pretty skillful people over there. The big body of Marshall Plan workers were in Washington under [Paul] Hoffman; but they wanted a secondary matching group in the European headquarters in Paris mostly to work with the dozen missions in the participating countries. Linc had strongly indicated that he wanted to head "Planning," because Bissell already had the key job under Hoffman; what is called program or planning was what both were interested in. Linc knew he couldn't push Bissell aside because Bissell had been working on plans ever since the summer of '47. And then Linc said to me; "You come on over and be my deputy." Like we had worked together in the War Production Board; it was a reproduction of our unusual relationship. FUCHS: I see. Harriman was special representative and Ambassador, the head of the Paris office. LIVERMORE: Milton Katz was Harriman's deputy and internal operating chief. FUCHS: What were your views of the Marshall Plan when you first heard of it? What did you think about the whole approach? LIVERMORE: Oh, immediately, tremendous support of course -- from a personal point of view. I had no fears like some people did that it was going to drain the United States of its wheat and its steel, and everything else. There was great fear that we wouldn't have the capacity to share our resources with Europe. Of course way back I'd been a tremendous opponent of the old war loan idea of World War I, and of the attitude of President Coolidge which was: "Well, they rented the money didn't they?" The idea of loans at interest was obviously a misbegotten carryover from the business world. I mean in inter-governmental recovery help from war's impact, you should either give help free of interest, or not give it at all. The Marshall Plan went a great step ahead by saying that we'll make a gift. It takes too long to explain it all here but in the economic sense this is really no different, in the real impact on resources at the time. You might as well make it a gift also, because if you made it a loan the money wouldn't come back until two generations later anyway. So in real economic effect on the 1948 American people there was no difference. I mean the commodities go out of the country no matter whether you give them or loan them. The idea of collecting interest and making repayment at some vague future date is ridiculous. I used to get really hot about this because the American railroads did the same thing. They built railroads by bond sales and have never paid the bonds back. They have just kept renewing the bonds. FUCHS: Would it have been possible to set up the Monetary Fund and the World Bank on a much larger scale, and not had a Marshall Plan? LIVERMORE: They were then too slow and cumbersome. I have followed the International Bank for many years, because I have friends in it, but it's much too slow in acting. You needed in 1948 something dramatic, quick, fast, hard driving. The Bank and the Fund weren't equipped to do something immediate and drastic. FUCHS: Do you recall at this late date if you had apprehensions about the Communist bloc countries coming in to participate? LIVERMORE: Oh, yes. In the thirties, as early as the middle thirties, I'd become a great 'fraidy cat or fearer of Stalin when many Americans didn't really realize what kind of a leader he was. He was a combination of malevolence, intelligence, and imperialism. And after the Russian treason trials around 1936, I wasn't all alone in this. Many people then had the insight to see what Stalin was really like. FUCHS: Well, I was thinking of their participating in the Marshall Plan, as they were asked to do. LIVERMORE: Oh, I don't think anybody really expected that Stalin would ever participate. We would have been astounded if he had participated. Journalists, being naive, thought he might. This would have been a great sign of weakness on the part of Russia, of course. Stalin didn't want to give that sign. He was riding high and full of confidence then; he wasn't going to bow down and join the Marshall Plan. FUCHS: What were your views of the first administrator, Hoffman? LIVERMORE: Oh, excellent. He's a good public relations man. He made scores of speeches to businessmen; he kept the business community behind the Plan in '48, in the beginning. Of course he was a great figure in the Committee for Economic Development, which is one of the American business organizations that I have most admired. He was a founder of it and he used liberal businessmen as the cutting edge to get united support. Of course, Vandenberg's contribution was tremendous in the psychological and political sense, too, because he had a great following among conservative businessmen. It's hard to remember back to the tremendous psychological leadership that Senator Vandenberg had in this country. I used to belong to a little club of businessmen -- I was the only academic in it -- in Buffalo in 1934-40. It was known as the "Marching and Chowder Club." They were a bunch of intelligent western New York businessmen. There was when I first saw how much they admired Vandenberg, in a "grassroots" sense. This was long before he turned internationalist; he was then an isolationist. FUCHS: That's what I'm saying, what do you think caused him to change? LIVERMORE: Those men were willing to follow Vandenberg in the change because they knew he was an honest Michigan Dutchman. So they would go along with him when he changed his views. FUCHS: To what would you attribute his conversion from isolationism to internationalism? LIVERMORE: To his basic intellect, his basic skill in thinking. He was a very great man, I think independent, with a lot of intellectual ability to back it up. FUCHS: What are your views of the special representative in Europe of President Truman, Averell Harriman? LIVERMORE: Personally, I guess I admired him more than any other boss I've ever had. He was terribly poor in the spring of '49 in talking to newsmen. Three or four of us used to go into press conferences with him in order to be able to help him: Remember this was in the spring of '49. When he was told by President Truman that he ought to be a presidential candidate in '52 -- this was about 8 or 10 months later -- he deliberately set out to make himself into at least a passable public speaker. After he became a candidate for the Presidency he improved tremendously. All in a very short period of time. And, of course, he later successfully ran for Governor of New York. FUCHS: You personally entertained him here at your home in Tucson at one time, you told me earlier. LIVERMORE: That was years later in the middle sixties, when he came out to Tucson for United Nations Day. He made a very great impression on my wife and her friends. He had tremendous personal magnetism. He wrote a personal note of thanks to my wife afterwards. He was always very loveable -- a gentleman in the truest sense of that word. FUCHS: What were the principal problems that you immediately faced in the ECA in Paris? LIVERMORE: Well, the central problem with -- what was it, 14 or 15 countries -- was what they would do with the sale proceeds of our gifts. The commodities from us were sold in the regular industrial channels in Europe. We shipped them over to the governments, they received the commercial value, in their own currency. The aim was to avoid the problem of getting dollar exchange. These proceeds were known as "counterpart." The Marshall Plan was an amazing idea in that it provided commodities without foreign exchange, but did not disrupt normal commercial channels in Europe. They didn't have dollars to pay for it; we jumped over that hurdle by landing the stuff free right in Holland or France or England, making it immediately available for commercial sales in the ordinary commercial channels. This made it work fast, quickly and to those who could process and use it normally. The commercial buyers paid for it in English pounds or French francs and this went into each government's treasury. So what do you do with this "counterpart" harvest? We spent some of it running our own offices. I mean the United States retained I think 3 percent or 6 percent of their local expenses. Then all the rest of the money could be used for all sorts of internal, public budget needs. There was thus a double value in the Marshall Plan: the commodities free of exchange barriers first, the internal sales proceeds of the commodities second. The French used their counterpart to rebuild the railroads that the Nazis had viciously destroyed; it was the most critical problem of France -- to get the railroad system running again. In England they used it for a wide variety of Government budget needs. The English national budget was under such pressure that this income of extra pounds in their internal domestic budget was of critical value in avoiding fantastically higher taxes in '49 and '50. In Italy they used it to set up a fund to loan to small businessmen. And so on. We had a great hand in advising them as to what they might do with this local money. That was a big and diverse planning problem. FUCHS: When NATO was coming in, I believe late 1950, you addressed a memo to Katz about the concept of unilateral aid. I wonder about some questions you posed then. How would you look at that now, that is, the basic concept of the NATO treaty versus unilateral aid that we were providing? LIVERMORE: Well, I was temperamentally opposed to trying to use NATO for anything like the Marshall Plan had been. Coupling a purely -- what I considered it -- military agreement with any kind of civilian or temporary assistance, was wrong. That was borne out, I think, later. The Marshall Plan type of aid never amounted to anything in NATO. There was no carry-over really. Some of the early emissaries from NATO clashed with us immediately because they wanted to incorporate some of the Marshall Plan ideas under the NATO treaty. I was very strongly opposed to that whole idea of coupling Marshall Plan ideas with NATO. Of course, it all disappeared three years later. The Marshall Plan was an outstanding and stunning success -- its job was done by early 1952...NATO stood on its own military feet. One of our central problems in Europe in the Marshall Plan was that countries like Portugal and Turkey and Greece had no idea what it was all about. We spent eighty percent of our time as planners and helpers with those countries that had no machinery, really, to make internal use of the aid, particularly Portugal and Turkey. On the other hand, we had countries like Norway that were way out ahead. They knew exactly what they were going to do and received the maximum benefit. The country that benefited the most and used the Marshall Plan help most skillfully was unquestionably Norway; way out ahead of any of the other countries. FUCHS: What kind of a man was Milton Katz? LIVERMORE: Oh, he was tremendously quick, an agile mind, very sensitive about people, very skillful in making use of his assistants, five or six or seven people mostly; very conscientious, not a bit ambitious in a personal aggrandizement sense. He wanted to go back to the Harvard Law School; that's where he is now. Hoffman and Harriman both had tremendous affection for him and tremendous confidence in his ability. He was an ideal second in command. He afterward was in the same role in the Ford Foundation with Hoffman. I greatly enjoyed close working relations with him for 20 months or more. FUCHS: The operation stayed pretty much the same when he succeeded to it? LIVERMORE: Yes. Harriman always had to go back and forth to Washington a lot. He had to meet with many ambassadors, so the actual running of the organization had always been mostly Katz. That was good. Katz was the kind of deputy that would and could really "free" his boss; free him with confidence so that he could spend time away. Harriman didn't have to worry about something happening when he was gone with Milt Katz there. FUCHS: What about the impact of NATO in 1950 and 1951? LIVERMORE: I didn't feel too badly about that. Of course, the thing that impressed us right away from the fall of '49 was the obvious success of the Marshall Plan in curing the immediate difficulties of the European countries. It was unquestionably one of the most successful operations of an international nature that the world has ever seen. You were dealing with intelligent countries, for the most part, that knew how to handle the thing internally; and it had a tremendous psychological effect, that it was supposed to have. I mean it was one of the ideas that worked the way it was conceived to work. So we weren't too disturbed about the coming of NATO -- when you started to divert money to military outlays. Congress, of course, was going to change appropriations over to military aid anyway. The Korean war obviously did that, without any help from NATO. Obviously we had a war with communism on our hands in the Far East. FUCHS: Were you directly involved with planning for NATO's budget? LIVERMORE: No. I didn't want to have anything to do with NATO in Europe at least. I was then more interested in going out to the Rand Corporation in Santa Monica, which was longer-range planning for military-civilian strength in possible nuclear war. FUCHS: Did you feel that, thinking of it as an interested observer, at least, that the NATO method of operations, with security and end-use checks, was infringement on the sovereignty of those nations? LIVERMORE: Well, we didn't know enough about it. We had done a minimum of that in the Marshall Plan, of checking what happened to stuff. We had some minimal protection against fraud and thievery and all that, and the problem of marking the goods as coming from the U.S. That was a public relations problem we had; otherwise the Marshall Plan was not intended to interfere with local country judgment. And, of course, NATO violated that in some degree by sending over teams, you know, American military men telling them what to do with the equipment. FUCHS: In your memo to Lincoln Gordon of October '49, you argued that innovation, know-how, were the keys to European productivity. Do you have a view about that now as against political integration and creation of a larger market area? Do you feel that our efforts to achieve such European integration were overemphasized, such as the European Payments Union? LIVERMORE: I wrote the first cable from Paris asking Hoffman to stress productivity. I don't know if that was in my letter to you or not. That was way back in the spring of '49, urging Hoffman to include it in his speeches as a key idea in the working of the Plan. FUCHS: No, we didn't have that. LIVERMORE: I drafted that first cable, before anybody in Washington had suggested to Hoffman that in his public speeches in Europe he should stress attention to productivity. Well, time has shown that the Germans did just this. They paid attention to individual efficiency and building up industrial productivity in their country. In contrast, the British labor unions opposed this consistently, beginning way back long before 1949. You can see the twenty-five year effects in England as against West Germany; the key answer is what the Japanese and Germans have done in the last twenty years. What were you to do after the Marshall Plan's rebuilding industrial expertise and efficiency, just pay high wages to the labor union members with no gain in per-man output? The only way you get real higher wages is by higher productivity. FUCHS: Your philosophy was that just creating a larger market wasn't going to be a long-range panacea. LIVERMORE: That was like waving a wand, saying "abracadabra." Of course, you could make progress by cutting tariff barriers to some extent. Or you could locate your plants in the most efficient place. There are some advantages of course. The French and Germans were benefited a great deal and the Belgians particularly, under the Common Market. Belgium, I think, is the principal beneficiary of the ECC, because they've attracted the headquarters of many companies that operate in the Common Market. FUCHS: You favored innovation in the industrial system. Did you think ECA could foster that? LIVERMORE: We couldn't do it by any direct intervention. This is why I always stressed publicity, discussion. The way you could do it was only by persuasion, by publicity, by having Hoffman and Harriman stress it. Hoffman did it several times in two or three of his speeches but, of course, he had many other things to talk about. This was a problem of public opinion with the political leaders and the industrial leaders of the country emphasizing this idea. FUCHS: Then by early '51 in February, you severed your connections with ECA? LIVERMORE: Yes, I had been under persuasive pressure from Dave Novick at Rand Corporation to come out. They had been started in '47. They needed people. Charlie Hitch was there, who has been Chancellor of the University of California, and will direct Resources For the Future in 1976. He was a [Robert S.] McNamara man in 1961-65. Rand men were a nice bunch, you know, my kind of people. I'd known Dave very well, all during the Second War. He was one of our really big powerhouses in the War Production Board, an outstanding man. He's retired now from Rand. Well, anyway, he kept writing me letters in Paris saying, "When are you coming out to Los Angeles?" For a few months, when I came back to Washington, I worked with Bill Foster, Hoffman's successor, on the Korean war international allocations. It was about a three-months job. This, by the way, was one of the few cases in Washington history where I, as the executive secretary of an allocations committee in the spring of '51, advocated its abolition: the abolition of my own committee. FUCHS: This was just after you came back from Paris? LIVERMORE: Yes, this was in March '51 and I ran that committee until July, four months, with help from Vincent Rock. We both agreed by June that the thing was no longer necessary. I'll always remember the day we walked in to Bill Foster's office and said, "Mr. Foster, we advocate the committee be abolished." He said, "That's unheard of in Washington." It was one of those inter-governmental committees with 20 major departments represented; one of those big unwieldy committees -- it didn't amount to a row of pins. I always liked that decision: I guess there are very few other examples of executive secretaries advocating their own abolition. Well, right after that I went off to Santa Monica. FUCHS: Well what about the effect of the Korean war on those working in ECA initially? Did you feel that the Marshall Plan might be extended? LIVERMORE: Well, there was a big split in the Paris staff. I was a minority. I said: "I'm through, the Marshall Plan is over. With NATO coming, it's done, let's quit." FUCHS: NATO was a clean break for you... LIVERMORE: Yes. But in Paris there was a die-hard staff group that figured they could link themselves on, or attach themselves onto, NATO; they all came a cropper of course with the beginning of the Eisenhower administration early in 1953 when they were all booted out by the guy who actually wore a size eight hat and perpetually ran for President -- Stassen. FUCHS: Harold Stassen. LIVERMORE: They were "Stassenated." Did you ever hear that word -- it's a good historian's word. Although they didn't lose their civil service status, their jobs in Paris or Washington were "Stassenated," namely the position was abolished. So then the guy had to go and look for another job, with his civil service rating of course. FUCHS: The Marshall Plan had ended in the middle of '52 and they tried to hang on with NATO... LIVERMORE: Yes, but one of the first acts of Eisenhower was to put Stassen on the job of liquidating the remnants of the Marshall Plan. He wanted a different world-wide "effort." FUCHS: Mutual security. LIVERMORE: Mutual security -- mutual security, that was it. Rand was an Air Force contractor. Air Force was very alert, of course, to defense problems. But by the winter around Christmas of '51 and early '52 I was back in the Washington branch of Rand. I had come back after launching a study of the steel industry. It was going well and I was a bit bored with Rand. So in January of '52 I was asked to come over to the White House staff and take the position of representing ODM on the National Security Planning Board. "Electric Charlie" Wilson was then head of ODM, and a member of NSC. FUCHS: Who selected you? LIVERMORE: Oh, four or five of the guys who were all friends of mine, from War Production Board days. FUCHS: That wasn't very formal. LIVERMORE: They merely recommended me, and by that time my Federal "dossier" was thick enough: FUCHS: I see. LIVERMORE: Because it was my kind of work, I mean dealing with different problems everyday, a wide range. They simply knew what I was good at... FUCHS: Who headed the Planning Board of the National Security Council? LIVERMORE: Well, you'll later want to have a careful study of NSC for your records, the NSC group under President Truman, etc. "Jimmie" Lay ran the Security Council then; he was Executive Director, the position Kissinger had in '69. The ODM, the top defense mobilization unit created for the Korean war, was a member of the Security Council by the 1947 act, in place of the old National Resources Board. Therefore, it had to have a representative on the Planning Board which prepared material for the bigwigs to review. President Truman presided as you know, over NSC. He liked the Security Council. He came to routine meetings and tried to make it a major operation in the White House aided especially by Bob Lovett (Defense) and Dean Acheson (State). So the Planning Board of NSC was a very interesting place to work. It had only been running, you know, two to three years. It was building its own ideas of what it should do. It laid down broad national policy determinations. Of course, State had a big interest in it. The Planning Board thus consisted essentially of the Joint Chiefs, and Defense, State, in ODM. You'll want to check the exact membership. All top secret clearances, of course. It was a lot of fun, and we had several subcommittees -- I worked, for instance on the petroleum industry a great deal in the summer of '52 -- on the future of petroleum supply. Our concern then seems now very relevant! FUCHS: Yes, I agree. LIVERMORE: The most important thing I did in that summer of '52 was to begin pioneer work on civilian planning -- way beyond the old simple conception of civil defense. In case Russia attacked us and made a partially successful attack, say wrecked 20 percent of the American economy, how would you run the remaining 80 percent? With the then small supply of A-bombs, the most probable result of attack would be scattered success, bad aiming, and it might only destroy parts of industries and communities. This was before the giant H-bomb became practical. How would you suddenly shift the country over to an 80 percent or 70 percent crippled basis? Well, this was a wholly new idea (like the Marshall Plan had been) and for many years people could never understand what we were doing in ODM. They thought it was just old-fashioned, simple civil defense. Jump in a dugout, you know, or rush into a shelter. They never understood what real war planning for the civilian sector meant. It was in the summer of '52 that I and a couple of other people started this whole new concept. It was later carried on by ODM, then by the Office of Emergency Planning for many years all through the later fifties and early sixties. I remained in contact as an active advisory committee member in OEP, way through until 1963. We had a great advisory committee there in OEP. It was a true planning committee that did much original and difficult conceptual work. Arthur Fleming was a major supporter. Later, various directors followed him. But it was in '52 that we began this pioneer work and I have to say I was a major architect of the final OEP concept. How do you run the banking or insurance industries for instance? What do you do about rationing and price controls? What do you do about schools? Prisons? Adjust everything in a sharply crippled country, under severe crisis conditions? FUCHS: You weren't concerned with how you take care of the people, nuclear fallout, and that sort of thing? LIVERMORE: Not directly in OEP. Civil Defense existed separately all through the period. Shelters and protection were just one special phase of the whole great big problem of how to run a crippled country. So, all through the summer and fall of '52 I worked primarily on defining the problem. That is a good point to end this interview because it brings us to the end of Truman's second administration, you know, the late winter of '52-'53. One day in late September '52 the Security Council was going to meet and at that time John Steelman had been succeeded by Henry Fowler, "Joe" Fowler, who was later Secretary of the Treasury. He was then temporary head of the ODM structure which was then rapidly dying down because Eisenhower had already promised to end the Korean war. He had already announced this in August or September. So September comes along and Security Council meetings were badly attended. The big guys started to send substitutes, a fatal sign. So one day in September, Joe Fowler couldn't go; his deputy couldn't go; and so he said, "Shaw, you go over -- you're on the Planning Board -- and attend the Security Council meeting! Sit in the big chair around the Cabinet table!" It was to be just a routine meeting. So I didn't think much about it. I went across Executive Avenue and up to the meeting room and who should come in but Acheson and Lovett. They had decided to come. I was mildly amazed, listening to them chatting to each other, when in walked President Truman. Apparently they knew he was coming, that's why they came instead of sending deputies. The other guys hadn't been told, so here was little me representing one of the members of the Council. The President sat down right across from me, about ten feet away, looking wonderful, all ruddy and tanned. Acheson and Lovett turned to him and said: "How are you feeling, Mr. President?" and he said, "Feeling great, I've been out campaigning again." I thought that was a nice touch. His face all lit up. He'd been out on the road for Stevenson. He was obviously in a good humor. His voice was a little gravelly; he'd been making a lot of speeches. And so the meeting degenerated, more or less, into badinage about how good it was to get back out on the old campaign trail again, despite his reservations about Stevenson's campaigning style. The actual business was finished in ten minutes, approving some papers. That was, I think, a most entertaining way to observe a President. FUCHS: Had you met him before? LIVERMORE: No, I had never met him. I was a great admirer of him and as I guess I told you before, I remember the week that he had told Harriman in Paris to become a candidate. You know all about that. One other humorous story, a doctor friend of mine told me about the '48 campaign, and we can end with it, I guess. FUCHS: We've got more tape, we don't have to end. What's his name? LIVERMORE: Elmer Yeoman, good old name and a top-notch internest who saved my stepdaughter's life. Well, anyway, he was at Columbus, Ohio being processed out of the Navy to go into private practice in October of '48. He had finished his required stint in the Navy after Med School at Penn. It took two days, you know, for interviews and get checked out, so he had a lot of time on his hands. He went downtown one evening -- remember this was the middle of October of '48. He noticed people sitting on the curbstones on many streets. It was about 8 o'clock in the evening. So he went in and had a couple of beers. When he came out there were even more people sitting on the curbstones. He went into the nearest bar and said, "What are all these people doing out on the streets?" "They're waiting for Truman. His plane is going to land here at two in the morning and they already have got their places on the curb. By 1 o'clock, the streets were absolutely jammed. Now my doctor friend had never thought about '48 politics or the Dewey-Truman campaign. He was basically a Democrat, however, and friendly; so he began talking to some of the curb-sitting people. He told me: "Shaw, I got to thinking about that crowd between midnight and two in the morning and I said to myself I better get some money down on Truman because all these people I saw there had not come out to sit on a curbstone for five hours and see a loser, they had come out to see a winner." That's a beautiful phrase. He looked at their faces waiting to see Truman; he was fresh from the Far East; he hadn't read anything about the campaign. Call it intuition or second sight, he knew right then that Harry S. would win in November. FUCHS: Interesting. LIVERMORE: More than that, it was an amazing story to me. He went in, found where he could bet some money, and put down as much money on Truman as he could, that very night. More later, in Tucson. FUCHS: And he won all those bets. LIVERMORE: And won. That's become one of my favorite political stories. I love to think back about that fall. I was in Ohio the morning after that '48 election, with a lot of Republican clients of Dun and Bradstreet. That was just before I went to Paris. I have never seen such an aggregation of completely crestfallen people. They were all Dewey supporters; we had lunch that day after election. What else did you want to ask me? FUCHS: Well, I was wondering if there was something substantive you might care to say about your work with the National Security Council Planning Board, about the use of your reports. Who determined what subjects you would direct your efforts toward solving, who was your guiding spirit there, so to speak? LIVERMORE: Well, NSC went through a long evolution. In the beginning years, it was more formal and more structured when I was there, and all through the Eisenhower period it remained mostly that way. Its principal purpose was not the meetings or the papers, but the gradual forcing of agreement and mutual thrashing-out of ideas. Everybody could put anything in the pot on the Planning Board. We put in, from ODM, such things as raw material problems -- accessibility to the United States in case of war and what could we do to help protect our sources of overseas supply -- that sort of thing. Then, of course, military people in those years wanted guidance on which countries they should give defense help to in requests to Congress. State, of course, wanted formal policy positions as guidance for their ambassadors. I mean what exactly should our diplomatic attitude be toward Uruguay or Indonesia, or what have you. They wanted something specific, and for scores of countries. It served well for those purposes, I think. But in the sense of top Government policy there was a collision right away, because when you formalized it too much it lost its punch; the President wasn't necessarily bound by the Security Council, he could override it at anytime, or ignore it as Kennedy did. Truman, of course, wanted the help of the Council so he'd know what to think about the details of foreign policy or international policy, on a wide front. It was a statutory body under the 1946 National Security Act, so he felt it had to be kept going and be given his active interest. Today it's a shell, though the statute is still on the books. President Ford has begun using it in the Truman manner. FUCHS: Do you think Truman perhaps used it most effectively? LIVERMORE: Oh, certainly, he did because he liked the idea of a top forum in continuous session so to speak. He found it was a great innovation -- that feeling he had for anything new that would strengthen the Executive Branch operation; he was very fond of it. Obviously, only a voracious reader like Truman could make full use of that mass of NSC documents! FUCHS: Yes, he said that he was glad to have it when the Korean war came along because of the guidance it gave him then... LIVERMORE: Oh, my yes. FUCHS: ...and reinforcement in his own decisions. LIVERMORE: He used to go to all the meetings, practically. That's why he appeared that day I told you about. FUCHS: Well, anything else that you want to say about that period? LIVERMORE: No, I don't think so. I think that's about it. Beginning in the early winter of '53 I began working for the Rockefeller brothers and I was still a working consultant on OEP's civilian war planning until 1963. That's why I went to Thailand. I did the same conceptual job for the Thai Government in '68. FUCHS: You were working for the Thai Government? LIVERMORE: Yes, a consultant to their cabinet, loaned by our Embassy so I could have diplomatic status. The last previous full-time U.S. Government job I had was that fall of '52, you see, when I was working full time in Washington until February '53. Of course, I left as soon as I could, after the Eisenhower election. FUCHS: Where did you go then when you left the Rockefeller brothers in 1957? LIVERMORE: Oh, I came out here right from the Rockefeller brothers. FUCHS: To the University of Arizona. LIVERMORE: Right from Radio City to Tucson, Arizona! FUCHS: Have you enjoyed Arizona? LIVERMORE: I worked as hard as I ever had, the first six years here at the University, as a Dean. FUCHS: Why was that? LIVERMORE: Because the University was growing so fast I tripled the faculty in six years. We had space problems, staff problems. How are you going to get somebody to teach this class? And I then was doing a lot of other things for the University or for its president. FUCHS: Any other final comments? LIVERMORE: I never was a hard driver or anything like that, but I tried to apply my native abilities to things I could do best. But I never worried about getting promoted or getting rich, anything like that. That may be a valuable trait I suppose. FUCHS: I think so. What about Mr. Nixon? Have you any reflections upon his career? LIVERMORE: Oh, we better stay off that, because I'm an old-time Helen Gahagan Douglas follower. I have had a fixed opinion on Nixon from way back in that '48 California campaign -- way, way back: "Tricky Dick" and all, with me goes way back to '47 and '48. None of this has surprised me at all, people of my age. The most famous example of this is David Novick at Rand. I hope you interview him. He and his wife were great friends of Melvyn Douglas and Helen Gahagan. They were a wonderful couple, you know. They are still alive. She is a wonderful woman from a great New England family, and one of Mary Novick's great personal friends. Of course, Mary Novick is as bitter as she can be against Nixon, because she knew in 1948 that Helen Gahagan was one of the really great women who should have been in politics in this country. I mean you don't get a good woman like that very often, even with ERA and Lib. Nixon cut her to pieces with that dirty lying rot he put out about her in that campaign. She never could run again. So, the Novicks' bitterness about Nixon also goes back to the late forties, just as Harry Truman's did. Absolute lack of any moral sense or whatever you want to call it -- or even his peculiar version of it. So, I don't get heated up like some young people do. Old stuff -- Nixon as a despicable character -- we knew that before you were born! FUCHS: It was no surprise to a lot of people. LIVERMORE: Right. To us of my age, like Mary Novick, Dave, and myself, and, also my brother's widow in Chicago, it was the same. They are not a bit surprised, because they could see it way back almost 30 years before. FUCHS: As Jerry Voorhis said: "the chickens are coming home to roost." LIVERMORE: Oh, yes. I mean a man's basic character just unfolds, it never changes, you know. FUCHS: Well, thank you very much, Dr. Livermore. [Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed]
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