Paul H. Nitze Oral History Interview, August 4, 1975

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.

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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 It may not be published in full except by permission of the Harry S. Truman Library.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 July, 1990
Harry S. Truman Library
Independence, Missouri

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Third Oral History interview with Paul Nitze, August 4, 1975, Northeast Harbor, Maine. By Richard D. McKinzie, University of Missouri Kansas City.

MCKINZIE: In the last session, Mr. Nitze, you had talked about four questions that Mr. Truman asked you to address yourself to in this mission to Japan. You had talked about your investigations of the first two questions, namely, why Japan attacked at Pearl Harbor and why Japan surrendered when it did.

NITZE: Well, those four questions were in addition to the basic question of reporting the effects of air power in the Pacific War, and I'd dealt with the first two questions. The third one was the question of the effect of the atomic weapons dropped at Hiroshima and Nagasaki. We had recruited some 250 engineers and scientists to help on that particular job. There had been a preliminary survey done by a very small group, connected with the Manhattan Project, who'd come out immediately after the surrender. They'd done kind of a preliminary survey, but we did the basic, thorough survey of all the effects.

At that time the newspapers treated the atomic weapons at Hiroshima and Nagasaki as being the ultimate weapons of ultimate horror and ultimate effectiveness. We thought our task was to be very precise as to exactly

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what the effects were at what distance and how serious they were in other words, to put calipers on the effects so that you could say that this is what happened and this didn't happen, to really make the precise measurements of what the effects were.

I might start with an episode of when we were just getting ourselves set up. We had these 250 people arriving, and my executive assistant was a Colonel Strickland, who had been, before the war, a vice president of Proctor and Gamble and was a very effective administrative assistant. I sent him out to Hiroshima and Nagasaki from Tokyo, where we were, to see whether we could requisition buildings in which we could house these 250 scientists and engineers. And he came back and said, "I've cased the joint, and there is nothing there. There are no buildings standing to requisition."

I said, "Well, what do you suggest we do?"

He said, "Well, let me go down to see the admiral in command at Yokosuka;" I forget his name now. He went down to Yokosuka, and he came back and said, "I have a list of ships that the admiral makes at your disposal, any or all of them." This included, as I remember it, five aircraft carriers, four battleships, a couple of cruisers, twenty four destroyers, and thirty six destroyer escorts, command ships. Here was this

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terrific navy with nothing to do. They couldn't send all those people back at one time, and here the Admiral had all these ships with no employment for them. He was looking for something useful to do with them, so he gave us the choice of this entire array, a whole fleet, and I guess Strickland and I chose a cruiser to go down to Truk, because we had to examine what happened at Truk. Then we chose five DEs and put one of those in the harbor at Kure, which is close to Hiroshima, and another in a harbor near Nagaski. We put jeeps aboard, and one of these DEs was fitted as a command ship; it had its printing press, and so forth and so on. So we could use these command ships in these two harbors as the place where we could house our scientists and engineers. And we had communications. We took three others of these DEs and sent one of them up to Hokkaido and another one down to the southern islands. But we used these ships as our headquarters, with everything else being destroyed.

Then when we got to Nagasaki, there was a hill in the center of town, and the bomb had gone off a little bit to one side of the hill. So, some of the houses in the town which were shielded from the blast effect by the hill continued to survive. But all that part which had been directly exposed was, in fact, totally

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destroyed. What remained standing was the shape of an old church and some of the steel structure of a steel mill there which was bent and twisted. Then there was a big concrete building where some of the concrete structure had continued to stand, but all the inside part of it had been burned out.

One of the things I remember that impressed me was the fact that about a mile and a quarter, I think it was, from ground zero (directly underneath the explosion), there were some houses standing with tiled roofs. These buildings were still standing with these tiled roofs, but you could see where the tile had boiled. The heat had been so great that you could see these bubbles. There were some gas tanks some distance away, and you could see the reflection of the steel structure in front of them where they had been protected from the direct radiation; the paint was in one color. Where it had been exposed to the flash, it was kind of burnt. So, you could tell what the intensity was of the heat effects at varying distances. You could also clearly measure the blast effects by what had happened to structures of various kinds at various distances. measured all those things out.

Of course, you would also get the statistics from townspeople as to who had died where, and who had

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survived where. There were some really very interesting episodes. For instance, the railroads were running in both Hiroshima and Nagasaki within thirty six hours after the explosion. It was clear the tracks weren't disrupted. It was merely the rolling stock on top of them which was disrupted. There were people who were sitting in a train going through the station at Hiroshima. Those who were sitting next to an open window seemed to be all right, because they weren't cut by broken glass. But they got the full effect of the radiation and they died, while the ones who had been protected from the instantaneous radiation, even though they were cut by the flying glass, survived. It is also noteworthy that some people who were in a tunnel right underneath ground zero survived, even though the tunnel didn't have any doors. It was just a simple tunnel dug into a hill, with kind of a gooseneck end at each end. But this indicated that at ground zero you could survive with that kind of an explosion it was, after all, twelve to twenty KT (kilotons) provided you were protected by the earth above and there was enough attenuation of the blast waves. So, they were not killed by the blast even though they were at ground zero, being in these tunnels.

Well, all these various effects were measured out.

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There was no residual radiation that you could find. But we measured all these things out and then finally tried to compute how many bomber loads of high explosive weapons and fire weapons would have produced the same amount of damage as these atomic weapons did. I forget the exact figures, but, as I remember it, it was about a hundred to one. People had the view that this increased the effectiveness of an air attack or the lethality of an air attack by tens of thousands, while, in fact, the fire raids on Tokyo caused more casualties but they were much bigger raids. With those approximately twenty KT weapons, I think the ratio was about one to a hundred. It was a hundred fold increase in the effectiveness of air power by virtue of these weapons. And all this was written up in the report. Phil Farley was the person who put together all the data which had been collected by these 250 people. This report is quite a long report, and I think it has stood up over time as being the one authoritative document as to what happened as a result of the use of nuclear weapons in wartime there. This is the unique experience.

MCKINZIE: I take it then that this made you less awe inspired by claims of what nuclear weaponry was going to mean.

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NITZE: The deduction therefrom was that with weapons of that size the effects were not infinite; they were finite. Therefore, in order to produce any given military result, you had to count on a certain number of weapons. In other words, a few weapons weren't enough to produce infinite military results which I think certainly wasn't in conformity with public opinion at the time. This wasn't the conventional wisdom. As I said earlier, those were twenty KT weapons. When you've got megaton weapons, you're up another magnitude.

MCKINZIE: They were, in fact, what later became known as "tactical nuclear weapons."

NITZE: That's right.

Let me turn to the fourth problem and that was the problem of the recommendation with respect to the postwar organization of a U.S. defense establishment. One thing seemed to us to be clear, and that was that, over time, other countries would develop nuclear weapons. One could hope for the success of arms control measures, such as the [Bernard] Baruch approach thereafter. But the probability was that one had to look forward to a period at some time when a hostile country or countries would have nuclear weapons and that this would not forever be a U.S. monopoly. In

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considering what the postwar structure of our defense establishment should be, we felt that one had to take into account the prospect that one could be faced with an enemy which possessed weapons of this kind.

The second point that seemed to be clear was that if one faced an enemy with nuclear weapons, or in a world in which there were nuclear weapons which could be used for military purposes, the danger of blitzkrieg tactics was much greater than it even had been in World War II. With a hundred fold increase in the effectiveness of one aircraft, the power of an Air Force equipped with nuclear weapons would be vastly greater, and, therefore, what could be done during the initial phase of the war would be much greater.

At that time, it looked as though the most probable method of delivery was the aircraft, even though it seemed probable that in time missiles of long range would be developed. We had gotten from Speer, during the European part of the U.S. Strategic Bombing Survey, the German drawings for their long range missiles. so, they'd already been thinking of a long range missile. It was a technologically conceivable thing at that time, but it looked as though that was some time off , and that the main problem was probably the problem of air attack using nuclear weapons.

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Clearly, the Air Force felt that air power particularly supported with nuclear weapons would be dominant. Their view was that there should be a unification of the three services, really under the Air Force, and that air power should be the dominant arm because of this increase in effectiveness.

It was our view that was not correct. It was our view that there should be a defense establishment over the three services. Each one of the services should employ whatever weapons were best adapted to carrying out their function, and, therefore, the important thing was to work out what the roles and missions of the three services should be. It was our view that the Army should have the task of holding, capturing, and exploiting control over land. The Navy should have the mission of achieving control over the surface and subsurface of the sea and the air above the sea, and then exploiting that control. The mission of what had been the Air Force should be the mission of strategic warfare in other words, long range warfare devoted not to the frontlines and not to the control of land or sea, but to this potential long range attack upon our homeland and the attack against the homeland of an enemy. This mission should involve both the offense and defense.

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And beyond that, there was a problem of securing control of the air, which was a somewhat different mission than air support of ground operations, and this third service should have that function as well. But the Navy should have whatever it needed in the way of air power to achieve control of the sea, both the surface of the sea, the air above it, and the waters below it. And it should have the right to land based air, if that would help it achieve control of the sea. The Army should be entitled to have such air power as it needed to achieve close support of ground operations. And the strategic command, or the air command, should have the responsibility of doing whatever was necessary both with respect to the defense of our homeland (which would include Civil Defense, Active Air Defense, and, in a missile era, antiballistic missile defense) as well as whatever means were necessary to achieve success in the attack on the other person's homeland. This would mean, if not operational control, a least strategic control over submarines, if they ever developed a capacity for inter continental warfare. In other words, all three services, with this cap of a Defense Department above them, should be devoted toward modern weaponry, including air if that was useful, as well as any other means which might be useful. The important distinction,

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then, would be the functions which each one of the services were to have.

MCKINZIE: But at that time did you envision that only the Air Force would have nuclear weapons?

NITZE: I think at that time it was contemplated that there would be enough nuclear weapons to scatter them around and have them used for tactical purposes as well as strategic purposes.

I took these recommendations up with General Lauris Norstad in the Air Force and his associates, and they hated the whole idea. They didn't want to see the Navy have land based air in support of its operations. The Army didn't want to have anything to do with air support of its operations, so it didn't like the program at all. The Air Force didn't want to take on the job of Civil Defense Active Air Defense, and that kind of thing. I guess the only one of the three services that was happy with our recommendations was the Navy; Admiral Forrest Sherman was in favor of what we suggested in the way of organization. Jim [James V.] Forrestal, who was Secretary of the Navy and later was the first Secretary of Defense, was for our recommendations, but none of the other services were. So our recommendations were not accepted by President Truman because of the opposition

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of the Joint Chiefs thereto; there was only one service in favor of this, the other two being violently opposed. The thing was worked out differently and, I think, unfortunately. I really think it would have been much better if Mr. Truman and the chiefs had adopted those recommendations. This quarrel about roles and missions continued for years thereafter and was never really properly solved. It was too advanced a conception, but at least that's what we recommend in the final report of the U.S. Strategic Bombing Survey.

Well, I think that covers these four special programs. I might talk about one other somewhat special project and that was the question of determining what Japanese ships, both Navy ships and commercial ships, had been sunk by whom, when, and where. Of course, there had been claims made by all three services to having sunk this ship, that ship, and the other ship. And the aggregate of all of the claims on the U.S. side was substantially in excess of the total Japanese Navy and the total Japanese merchant marine. This task wasn't really that difficult to accomplish. We gained access to all the Japanese records of every ship that they had, both commercial and Navy and when it had been built, when they'd lost it, and where they'd thought they'd lost it and how. So, we had all the Japanese

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insurance company records of all the commercial shipping merchants and all the Japanese Navy records as to what happened to their ships. When you put together our claims with the Japanese records of what they'd lost and where and how, it was not a terribly difficult job to match the two up and see what had sunk what and when.

As I remember it, there were only about five ship losses on the Japanese side which were hard to determine. We did our best with those five, and I think it really didn't make much difference with respect to five ships out of the entire panoply of ships that had been lost. But the results were really quite interesting. They showed, as I remember it, that the Japanese losses to mining were greater than we had thought they were. The Japanese losses to submarine torpedoes were approximately what our submarines had claimed; I think a little less. The Navy's claims as to what their aircraft had sunk were high by maybe twenty percent. The Air Force claims as to what they'd sunk were high by maybe 100 percent, double what they actually sunk. In part, this is understandable, because some of the Air Force claims were from long range aircraft, and it was very difficult to be sure. With the carrier air, it was at shorter range, there were other planes there, and it was easier to determine what

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had happened. But I think we finally came up with what the answers were. It was terribly controversial. In fact, it was so controversial that the services wouldn't accept this report on ship losses by what instrument. The Joint Chiefs decided that they would have to have a board to re study all this, and they appointed a board with three three star flag officers and spent two years re studying all this information. They finally switched two of the five ships, that we thought were dubious from one category to another, but, after three years work with an enormous team, that was the end of it.

But there's another story that comes to my mind about this assessment of ship losses. As I remember it, [George] Kinney was the General in command of the Fifth Air Force, which was the Air Force supporting General MacArthur's operation. When we arrived in Japan, General Kinney invited me to come and have dinner one night at this marvelous palace that he'd requisitioned from one of the Japanese noblemen. I found myself sitting next to him at dinner, and he said, "I understand that one of the things you're supposed to do is to assess who sank what ships where and when."

And I said, "Yes."

He said, "Well, I'd like to tell you a story. Down at the time of the battle of the Solomon Islands, there

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was a radio commentator by the name of H.V. Kaltenborn who was out visiting the Pacific theater. He gave a broadcast after the battle of the Solomon Islands casting doubt upon the Air Force claims to having destroyed so and so many Japanese ships in that battle. After he gave that broadcast, I called Kaltenborn and asked him a few questions. I asked him if he knew how many people there were in the Air Force. He said he wasn't quite sure but he imagined it was about three or four million. And I said to him, 'Yes, that's correct. But do you know how many brothers, fathers, sisters there are who are associated with those four million men?'

He said, 'Well, I never thought about that.'

I said, 'Well, that gets you up into the tens or twenties of millions of people who have a personal interest in someone who's involved in the Air Force. These people wouldn't like the idea of having doubt cast upon what their close associates had done in the Air Force.'

You know, Kaltenborn, the next night, gave another broadcast in which he said he'd looked into the matter of the claims of the sinkings of the Solomon Islands and found that his doubts were incorrect."

I was so furious with General Kinney for having

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told me this story, because the purport thereof was clear, and that wasn't what Mr. Truman had asked us to do; Mr. Truman had asked us to find out what the facts were. But there wasn't any point arguing with him. I just turned white with rage and was totally silent. But this ended up in some degree of disagreement between General Kinney and myself. Later, when he came back from Japan, General Kinney got a hold of General Aker, and the two of them went to see Jim Forrestal to propose to Jim Forrestal that I be fired from the U.S. Strategic Bombing Survey not knowing that Jim was one of my closest friends and former business associate. That got them nowhere, at which point General Kinney decided there wasn't any point in trying that technique. So, General Kinney really, he was a very bright fellow became very helpful and cooperative, and we got along just fine. We became close friends after he tried these two ploys and they didn't work; thereafter, he really got down and helped us .

MCKINZIE: I think it's illustrative of the Air Force's strong championing of itself; it has a reputation of having done that for years and years.

NITZE: Well, this was one of the problems in trying to run that Pacific Survey, the rivalry between the Air Force

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and the Navy, in particular. As I'd said earlier, we had military teams as well as the civilians working on the survey, and we had a Navy team, the head of which was [Rear] Admiral [Ralph A.] Ofstie, who had commanded the small aircraft carriers at the battle of Leyte Gulf. Captain Thomas H. Moorer, who later was Chief of Naval Operations, was on that team. It was a very able group of people. Orvil Anderson was head of the Air Force element, and the head of the Army element (I've forgotten his name now) was a very good man.

But one evening coming back to our hotel in Japan (at one time we were staying at the Imperial Hotel in Tokyo; we had our quarters there, not our offices) I could hear this enormous noise coming from the third floor of the Imperial Hotel as we walked into the courtyard. I looked up, and, to and behold, it was my room from which this noise was coming. So, I go up there and I find that Ofstie has accused General Orvil Anderson of having been improperly acquitted in a court martial, that he was really guilty. I didn't know about this episode, but it turned out that Orvil Anderson, at one time, had been a great balloonist. He'd been the expert in the Air Force in balloons. At the time when the Navy was experimenting with dirigibles, the Navy and the Air Force had worked out an arrangement

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under which the Air Force was to help the Navy with respect to this dirigible project. Orvil was assigned as a navigating officer to this particular dirigible, and the Admiral in command of the dirigible had insisted that she be navigated according to the book put out by the Navy on how one navigates dirigibles. Orvil came to the conclusion that the book was wrong and that if you navigated the dirigible that way, it would have an accident and blow the thing up. So, he insisted that she not be navigated that way, but be correctly navigated. And the Admiral said, "No, we will navigate her according to Naval regulations, according to this book." Orvil got so mad about the thing that he refused to go aboard the dirigible if she was going to be navigated this way. He went off and played golf, and he was not aboard when the accident took place; the Shenandoah was the name of this dirigible. So, this accident took place, the dirigible burned, and everybody was killed. And Orvil, who was under orders to have been the navigating officer, had been absent without permission, so he was then court martialed. But the board acquitted him.

But Oftsie was holding this against him and said that the board had incorrectly acquitted him, and Orvil was blasting the Navy for not knowing anything

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about navigation and that the reason the accident had taken place was that the Navy operated by these damn rules and wouldn't pay any attention to what was good common sense. If the Admiral had followed his suggestions and let him navigate it the way it should have been navigated, the accident never would have taken place. You can see the nature of the argument between these two fellows.

MCKINZIE: You can indeed.

Did the team make a report to President Truman when you came back?

NITZE: Well, we may have. I think we did. As I remember it now, Mr. D'Olier and I went and delivered to him the final report. There was a good deal of debate about the final report. The Navy team under Admiral Ofstie had written a report on this Pacific War about the role of the Navy air, and they wanted to publish it. I, as the vice chairman and acting chief of the thing, had said, "No, we don't want any service biased reports of this kind," and told them they couldn't publish an Air Force team report. So, I told the Air Force they couldn't. But they very much wanted to, and they finally persuaded Mr. D'Olier to let them publish the Air Force story of the role of the Air Force in the Pacific War. I know

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that Mr. D'Olier was torn; he knew that I'd made this decision, and he'd granted me authority to make decisions of that kind, so, without telling me, he let the Air Force publish this report. This has been a matter of deep controversy ever since, this Air Force report.

MCKINZIE: Was there a terminal date set for the existence of the Strategic Bombing Survey?

NITZE: No, there wasn't. I decided that the way in which one could get this thing done best was to try to get all the field work done early in December. I'd managed to get a command ship called the Ancon assigned to us, and the Ancon had to be back in the United States by the first of January; she belonged, really, to the Panama Canal Company. She had to leave Japan in the first week of December in order to get back in time, and we arranged to get back in time for Christmas. She was big enough to take some thousand people aboard, so I recruited all these people to work on this Strategic Bombing Survey in the theater. Many of them were officers in the Air Force, Army, Navy, and so forth and so on. And I made them the proposition that if they would work seven days a week, twelve hours a day, we could get the work done by the first week in December,

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all the field work, and they'd get home for Christmas. The upshot was that this group worked seven days a week, twelve hours a day, and we got a tremendous amount of work done. We built this organization up from a handful of people in September, when we started, to three or four thousand by the first of October. We disbanded the whole thing, or most of it, by Christmas time, and then only a small group stayed there to work on the editing and writing of the final reports. We finally got the final reports written in June of '46, but it was only a small group that continued after December of '45. This was one of the few occasions on which one builds up a great big organization and then collapses it right away. I don't think any organization of that size and that talent has existed for as short a period of time as that one did.

One other episode is, I think, worthy of note in connection with this Strategic Bombing Survey, and this bore upon one of the first additional questions President Truman had asked us to investigate. That was the reason for the attack on Pearl Harbor. Somebody back in Washington had decided that we needed assistance on this, and they'd recruited a group of four or five people from the Federal Trade Commission to come out and help on this particular part of it. These four or five

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fellows from the Federal Trade Commission were convinced Marxists, and they came out and wrote a report demonstrating that the origins of the war were to be traced to the Japanese Zaibatzu, the seven leading families of industrialists, and so forth and so on. They, early in the course of the survey, presented this report to me and I read it; it seemed to me to be totally contrary to all the evidence that I'd picked up from Prince [Fumimaro] Konoye and the other people that we had interrogated. Ken [J. Kenneth] Galbraith came out for just a period of three or four weeks because he wanted to see the Pacific and get exposed to it, but he didn't really spend full time on it. But he arrived there, I think, at the end of September or sometime in October, and I turned this report over to Ken and I said, "Look at this. This is what these fellows say, but it seems to me to be totally contrary to all the evidence that I've found. Why don't you look into it and see whether there's anything to this or not?" Ken said he would be delighted to put his hand in this, and Ken disappeared for a week or ten days. And he came back and he said, "I have it."

And I said, "Tell me more."

He said, "Well, I came across a German who was the personal representative of [Joachim] von Ribbentrop in

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the German Embassy in the period prior to Pearl Harbor. He was arrested after the Japanese surrender by our people, and he's been in a prison camp up in Lake Oswego. I've been interrogating this fellow, and I find that he still has all the telegrams that he sent back through back channels to Ribbentrop during the period prior to Pearl Harbor. He has given me this file of telegrams, and these telegrams indicate that he was absolutely persuaded that the real difficulty the Germans were having in getting the Japanese to enter the war were the Zaibatsu, and here it is all spelled out. The Zaibatsu were the ones who were most timid about going to war; didn't want to go to war. The last thing that they wanted to do was go to war. And everything that the Federal Trade Commission fellows said is the reverse of fact."

MCKINZIE: Did you confront them with that?

NITZE: We did, and sent them back home.

I think people today don't recollect anymore the degree to which there really was a group of influential Marxists and Communists in the government during the period of World War II and the immediate postwar years. This has kind of been forgotten. I'm not at all sure that these people in the Federal Trade Commission were Communist, but they were Marxists, and according to

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Marxist doctrine there has to be a class origin to an event like the attack on Pearl Harbor. So, without looking into the facts, they just write this report, and it's totally contrary to the facts.

MCKINZIE: Had you been looking for another job when you came back in December, or before?

NITZE: No, I hadn't. I was annoyed with my former partners in Dillon, Read & Company, because while I was in Germany on the U.S. Strategic Bombing Survey, I got a letter from Charlie [Charles S.] McCain, who was then president of Dillon, Read & Company, commenting on the fact that I'd left my capital in the firm as a special partner. They were paying me five percent interest on that, and said they could borrow money at less than that and were requesting that I withdraw my capital from the firm. That made me so mad that I decided that I would not want to go back to Dillon, Read & Company. And I didn't really have any plans at all as to what I would do after the war.

Then in the spring of '46, when we were winding up the U.S. Strategic Bombing Survey, Jock Whitney got a hold of me. He had decided, on the advice of his lawyer, Bill Jackson, to reorganize his affairs. Bill had advised him to take a third of his assets and put

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them into a charitable foundation, the Green Tree Foundation, take another third and put it into very safe securities and municipal bonds, and take the remainder and use that for a venture capital company, which was to be called J.H. Whitney & Company. Jock and Bill Jackson asked whether I would like to be the managing partner in J. H. Whitney & Company. Jock would put up all the money, and I would have a substantial percentage of the profits, so that it was a very attractive proposition. So I talked to Jock about this, and we decided on three deals that we'd try to do right away. One of them was to acquire the Spencer Chemical Company, which had been created during the war to build ammonia plants. Another was to try to acquire the "big inch" pipeline and convert it into a natural gas pipeline. And the third, which I was for and Jock Whitney was not for, was to try to acquire a substantial interest in the Reynolds Metal Company. The equity was then selling, as I remember it, for twenty million dollars, and I just knew that that was going to be worth more than twenty million dollars. Jock didn't want to go along with that because the Reynolds family owned control and he didn't like the Reynolds family.

In any case, I came back to Washington and reported to my family my wife, three children, and our

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governess that I'd made this decision to move to New York. They all said, "Yes, if that's what you want to do." Then I looked around the room and there were five weeping faces facing me. Then a week after that, Mr. Will Clayton, who was then Under Secretary of State for Economic Affairs, called me up and asked whether I wanted to come up to the State Department and work for him. Considering everything, I decided I would call up Jock Whitney and tell him, "nay." So, I called up Jock and said that no, I wouldn't do this, that I would stay in Washington and work with the State Department.

MCKINZIE: Had you known Will Clayton?

NITZE: Yes, I'd known Will Clayton. During the war, I knew him very well and had the highest regard for him. He was a man of great intelligence, integrity, ability, and wisdom. He'd been a telegraph operator originally, and while being a telegrapher he'd learned how to take shorthand in order to assist himself in recording these messages as they came over. From that, he'd gone into the business of cotton trading and had formed Anderson, Clayton, and Company, which had become quite successful. Then he was one of the first people to interest himself in business abroad, particularly in Latin America, and Anderson Clayton became the major dealers in Brazilian

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products, cotton, grains, and things of that kind. Then they became interested in Egyptian cotton and Peruvian cotton and were one of the first important international traders in commodities. In the course of that, he learned a great deal about how one did business abroad how one organized to do it, how one got along with people in other countries. I remember he was very strong on the importance of wives. He would not only, himself, interrogate the person who was going to go to head this office in Brazil or Peru or wherever it was, he would insist on talking to the wife as well. Unless the wife was interested and prepared to make the effort to understand, be nice to, and work with the people in the country to which they were going, prepared to learn the language, the thing wouldn't work.

He was very much interested in people and how you put people together into an organization that would work happily together, where there was a real esprit de corps. He understood the relationship between men, organizations, women, and, related to it, how people worked together effectively. He was absolutely marvelous in working within the executive branch in Washington. Many people in the executive branch would put importance upon stature and rank and want to talk only to those people whom they felt were of an

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equivalent rank. The first time I ran into the fact that Will Clayton didn't follow that procedure was one day when I happened to see a man who'd been a classmate of mine at school in Chicago and who was in a very junior position in the State Department. He told me that Clayton discussed the statistics of Peruvian and Australian wool with him. "Clayton," he said, "was the most intelligent man I've ever known. He really wanted to know all the facts we had. He was interested in it, and he got them from me."

Then I realized this was Will Clayton's modus operandi. He'd find out who was the person who really knew the facts, just go down to see that person, and try to work it out. If this person was the person who could make the decision, fine. If it was the next echelon up, he'd go to the next echelon up. But he'd always work from the bottom up with people and not just across the top. The result was there was never misunderstanding on the part of other people. If he'd talked directly with the Secretary of the Treasury and he hadn't found out what all the people underneath knew, why, it would have been much more difficult to get the various organizations in Washington to work together.

Will was an absolutely marvelous person. I don't know anybody who worked with him, even in other

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agencies, that didn't have the highest regard for his wisdom and humaneness. I know that today he's the target of many of the revisionist historians I think quite improperly so.

MCKINZIE: I think that he is a target, though, not because of his humane attitudes, but rather because of the implications of his what they call "free trading" philosophy. I understand the argument means that if, at that time, there had been a system of nearly free trade, the United States, by virtue of having the only intact industrial system, would have been in a position of dominance which it would have been hard for other nations to effectively compete with.

NITZE: Well, this really brings us to the origins of the Marshall plan. Did we discuss it?

MCKINZIE: No, indeed we haven't. In fact, you had an unusual, particular assignment in the office of International Trade Policy when you went to work for Will Clayton, which in a sense, brings you into all these considerations. I wonder if you could talk about that a little bit, before we get to the Marshall plan.

NITZE: I think the reason that Will Clayton asked me to come and work in the economic side of the State Department

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was that, at that stage of the summer of 1946, he and the others on the economic side of the State Department were trying to initiate the negotiations for the General Agreement on Trade and Tariffs, GATT. The person who'd been working most closely with him on that was a man by the name of [Clair] Wilcox, who was head of the office of International Trade Policy in the State Department. They arranged for a meeting in Havana at which all the various nations would assemble and begin to discuss the possibility of a general agreement on trade and tariffs. Clair Wilcox was to go off and head the U.S. delegation I don't know if he was going to be heading it he was going to be the working head, at least, of the team that was going to work in Havana. It looked as though this would take a long period of time, which it did. So, they needed somebody, really, to head the office while Clair was away, and that's why Will asked me to come in and be Clair's deputy but, in fact, to be acting head, because Clair would be in Havana. In fact, Clair left for Havana, I think, three days after I had reported for duty in the office of International Trade Policy.

Before Clair left, I saw him off on the plane. He said that there was one problem which was worrying him a great deal, and that was that one of the divisions of this office of International Trade Policy was a division

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which dealt with labor, health, and social affairs. The head of this division was a man by the name of Otis [E.] Mulliken, who'd been a classmate of mine at Harvard. Clair and Otis had some disagreement about how to handle the U.S. relationship to the World Federation of Trade Unions, which was the labor offshoot of the United Nations structure. The CIO [Congress of Industrial Organizations] was a member of the World Federation of Trade Unions. Clair asked me to look into this as a first item on my agenda, which I did. And I came to the conclusion that the correct policy ought to be that either the CIO would make up its mind that it was worth making a fight to challenge the Communist domination of the World Federation of Trade Unions or else that the CIO should leave the World Federation of Trade Unions. Otis Mulliken was of the contrary view. His view was that this organization was part of the UN structure, and that it was important to support the UN and therefore was important to support the World Federation of Trade Unions. In any case, he felt that it was important to support those things that the CIO wanted done, and it was quite wrong to try to suggest to the CIO that they either go in there fighting or that they get out. Otis was not persuadable on this matter, so I suggested to Otis that I had another man in mind who would head the

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division of labor, health, and social affairs, and he would be principle adviser to the division with no reduction in salary. And he said, "Paul, how long have you been in the State Department?"

I said, "Well, I guess it's six weeks."

He said, "How long do you think I've been a division director in the State Department?" He said, "I've been a division director for six years. You can't fire a division director that way, after you've been with the State Department six weeks."

I said, "Well, I don't know why I can't."

He said, "Well, you have to file charges; I'm under Civil Service."

I said, "Well, I will file charges."

He said, " I don't see that you've got any grounds for firing me. I'm one of the hardest working people in the State Department, and everybody knows that."

I said, "Well, it seems to me that when one gets to a position as important as that of division director, then it is important that the division director, and the office director have confidence in one another. I don't have confidence in your views on general policy, and that's all there is to it. I've not got any complaint about anything else."

He said, "Well, you file charges, and I'll file

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countercharges." Then the State Department was inundated with telegrams, letters, telephone calls of every kind. The CIO felt that Otis was their great and good friend, and they mobilized everybody in the world to help him. The Standard Oil Company in New jersey and all the charitable organizations, CARE and all of those people, looked to this organization too. Finally, Mrs. Roosevelt entered the list. This became a cause celebre, and finally it became so hot that Will Clayton and Dean Acheson interested themselves in it; they had to. They finally got a hold of Otis and persuaded him that he'd be happier in the division of UN affairs than he would in the office of International Trade Policy, so Otis was switched out from under my command, and the charges and countercharges were dropped. But this was a rude initiation to the realities of the Civil Service.

After having survived that battle, the next step that comes to my mind is that in the fall of 1946 it suddenly turned out that the Swedes were in deep balance of payments trouble. At that time, the head of their ministry of economic affairs was ["Dag" Hjalmar Agne Carl] Hammarskjold, who came over to the United States to request a renegotiation of the Swedish U.S. Treaty of Commerce and Friendship. They felt that they needed to put discriminatory tariffs against imports from the

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United States in order to help meet their balance of payments problem. Dag Hammaarskjold had a set of twenty or thirty charts with respect to the most important indices having to do with the Swedish economy and its international financial situation. Hammarskjold was really a very good economist, and he had a very good staff working for him. This was my first exposure to really first rate data with respect to national accounts. I think Hammarskjold and his people were ahead of the U.S. economists at that time on national accounts and the various factors that went into them. Hammarskjold and his staff gave me a thorough briefing in what was what with respect to the Swedish economy how they'd gotten into trouble and what they proposed to do in order to get out of it again. I became persuaded that Hammarskjold's statistics were accurate and well thought through, and that Sweden did, in fact, need relief and quite a lot of relief. So, I proposed to Hammarskjold a modification to the Treaty of Friendship, Commerce, and Navigation which was really quite a radical modification. And Hammarskjold said that no, I'd offered too much, that Sweden didn't need that much. And I went back to his own statistics and said, "According to your own data and all these various charts and so forth and so on, this is the way it looks to me."

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He said, "No, we don't need that much; we can do it with less."

I said, "Well, if you won't accept it, I can't force it down your throat."

So, we signed up a modification to the agreement according to the terms that Dag thought were adequate. Then, after six weeks, it turned out that he had underestimated the requirements and that they really did need what his own figures had indicated that they needed. So, he came back again and we had a second negotiation, and finally the second negotiation gave him what I had originally proposed that he get.

Dag and I became very great friends during the course of this. I thought he was an extremely intelligent person and he reciprocated, so we got along beautifully.

But after that negotiation with the Swedes, it then turned out that the Canadians had a serious balance of payment problem. So, they sent down a team of people to negotiate with respect to their situation. They not only wanted to put discriminatory tariffs on imports from the United States, but they wanted to ban importation of certain things from the United States. My plea with them was that this should be an arrangement which could be liquidated as the situation changed. If

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they did it the way they proposed, this would create kind of a vested interest in those Canadian producers which would be then difficult to unwind. Rather than doing it the way they proposed, it would be wise, if they banned the importation from the United States, to also put a high Canadian tax on these things which had a unique market. So then, when the balance of payments situation changed, they could both eliminate the ban on importation from the United States, and the tax. There wouldn't be this vested interest. And they finally agreed to do that after a good deal of negotiations. To my horror, I went up to ski in Canada that winter, and everybody seemed to recognize the name Nitze because these taxes were called the "Nitze taxes."

The point was that after the Swedish episode and the Canadian episode, I began to worry about who's going to be next. So I went over to the Treasury Department and discussed this with the Treasury. They kept all the balance of payments statistics on other countries, and I said, "What is the chain going to be from here on out of the countries that are going to get into trouble? How long is this going to go on?" They said, "Well, the obvious point is that the obverse of our balance of payments surplus has to be a balance of payments deficit someplace in the world. The U. S. is running a balance

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of payments surplus of around five billion a year, and that means that the rest of the world, someplace, is running a deficit of five billion a year. With that five billion a year deficit and with the low foreign exchange reserves in these countries, you can't predict exactly which countries are going to go broke or get into balance of payments difficulties next; but it's perfectly clear that, one after another, they will, unless we do something about it."

Well, this seemed to me to be perfectly clear and logical, so I wrote a memorandum to Will Clayton describing this problem and saying that it seemed pretty clear that we had to have a program of dimensions appropriate to this problem. It would probably take four or five years for the world sufficiently to recover so that these emergency measures would not be necessary. That meant that we had a problem of soma twenty or twenty five billion dollars over a four or five year period. The funds available to the various organizations associated with the UN were nowhere near that order of magnitude, and what this indicated was that we really ought to work out or create a worldwide aid program of the order of magnitude of twenty five billion dollars. otherwise, we were going to see the progressive collapse of one country after another.

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MCKINZIE: Do you recall when this was?

NITZE: I would guess it was in December, '46; might have been January, '47. At that same time or shortly thereafter, the policy Planning Staff under George Kennan became seized of the same problem, but in a different context. I was seized of it in kind of a worldwide context and they became seized of the problem in a European context at least, that's how they addressed the problem. So, they came up with a memorandum suggesting a European aid program of approximately the same order of magnitude. Will Clayton, of course, was the person who was most immediately responsible, being the Under Secretary for Economic Affairs.

And Will wasn't persuaded, at that point, by either my memorandum or George Kennan's papers on the subject, so he went to Europe to look into the question himself on the grounds. While in Europe, he became persuaded of the fact that the problem was real, and it was getting worse. I think the thing that made the greatest impact upon him was that the farmers in Europe were unwilling to sell their farm produce to the cities, because the cities didn't have anything to sell to them. You were getting hoarding of grain and things of that kind on the

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farms, and you were getting starvation in the cities; that this thing was feeding upon itself and was having every kind of bad effect, and you needed something in order to break this vicious cycle. But, as you've suggested, Will Clayton was very much a free trade person. He felt that Europe would be much better off if there were a customs union in Europe. But he sent back some telegrams from Europe at that time indicating that he'd become persuaded that something along the lines of the Policy Planning Staff paper was necessary.

So then Dean Acheson became interested in the problem. He had this man working for him by the name of Joseph Jones. Joe was writing a speech for Acheson which Acheson was to deliver down in Cleveland, Mississippi. Joe was the principle draftsman of that speech. As I remember it, that speech did gain attention and did kind of lay the intellectual ground work for what had to be done. Then, when it came to Secretary Marshall's speech at the Harvard commencement, the crucial paragraphs to the speech were written by Chip [Charles E.] Bohlen. This was addressed against hunger, poverty, and disease, and against no nation. It was open to Eastern European countries as well as the Western European countries; all those ideas were Chip's. When you go through that Marshall plan speech, there are

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really only three paragraphs, a page and a half, that are the guts of it; Chip wrote those three paragraphs.

MCKINZIE: When you wrote the memorandum to Will Clayton in late '46 or early '47, was it your idea that this aid of one sort or another should be limited to what you might call a "democratic capitalist bloc?" Did you think that some kind of program of that nature would further split the great powers?

NITZE: Well, I was addressing myself solely to the problem as I'd seen it after negotiating with the Swedes and the Canadians and having spent some time with the Treasury Department. All I was interested in was getting rid of this problem of the obverse of our five billion a year balance of payments surplus. I don't recollect that I had any political thoughts in my mind. It was just a purely practical problem of here was something going on, the effects of which, you could see, were totally undesirable to everybody, and let's cure it. I didn't have in mind an aid to Europe or any other particular place; it was just to negate, compensate for, our five billion dollars a year balance of payments surplus.

MCKINZIE: Did you talk to George Kennan or other people in the Policy Planning Staff as they were doing their work?

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NITZE: I don't remember that I did. The Policy Planning Staff was created, I think, in march of '47. I can remember why it was created. It was created because, I think, General [George C.] Marshall went to the Moscow Foreign minister's meeting in the spring of '47. He came back with the feeling that the preparation of the meeting had not been adequate and that there hadn't been sufficient long range strategic thought, particularly as to the long term relationships between the West and Moscow. One needed a staff organization to address itself continuously to this range of problems. And he talked to Dean Acheson about it. Dean agreed to do something about it, and Dean, then, was the one who drew up the terms of the Policy Planning Staff and asked George Kennan to head it up. Then George asked me whether I would be his deputy, because he wanted somebody who had some economic expertise to help him in the Policy Planning Staff. He went to see Dean Acheson about it, and Dean, who'd known me for many years, said, "George you don't want that fellow; that fellow's a Wall Street operator. You want some deep thinkers."

It was only after Dean Acheson left the Department for a period of time that George then called me up and asked me if I wanted to come over and be his deputy. During that period I was not really permitted to have

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anything to do with the Policy Planning Staff. But then after Secretary Marshall made that speech at Harvard, and after Ernest Bevin immediately reacted in a positive way, it was clear to everybody in the Department that this was a much more serious prospect than people had really thought up to that time, and that what was needed was a plan rather than just a concept. All that was in the three operative paragraphs in the Harvard speech was all that anybody had in mind; nobody had really done any detailed work on this thing. So, it was decided to set up an organization to try to convert the concept into a plan. "Tic" [Charles] Bonesteel had been a member of the international section of the operation of the plans division of the Army during the war, working under General George A. "Abe” Lincoln. They appointed Tic and me to work this thing out. I recruited from my boys one of the men who had worked most closely with me on the negotiations with Hammarskjold and with the Canadians, a man by the name of Bob [Robert] Tufts who was a P 3, which was the lowest professional rank in the State Department. There was also a fellow by the name of Bill [William T.] Phillips and a fellow by the name of Bill [William H., Jr.] Bray. That was my principal little team. Then, as the organization developed, I got a fellow from the Treasury by the name of Harold Glasser,

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who ran the finance sections, which really dealt with the balance of payments aspects of the Marshall plan. We then, in turn, mobilized groups from the Department of Commerce, Department of Agriculture, Department of Interior, Bureau of Mines, so forth and so on to try to figure out what commodities were needed by each one of these countries how much grain, how much oil, how much of this, that and the other thing were needed, and where it could be gotten.

We had to deal with both the European requirements and the availability of supply, match these requirements and supplies together, and then also work out all the financial transactions in order to get the balance of payments transfers which were necessary. This turned out to be a very complicated job to work out in detail. I think by the time we really got well underway we had at least a thousand people working on this in the various agencies of the Government. Then, having gotten these various computations put together, we got the Army to set it up on their computers. Then we ran the whole thing through the Army computers to see how it all turned out, and it turned out, on the first run, quite wrong. In the first year, the requirement was five billion dollars; in the second year it was eight it went up. Having analyzed this computer run, we then

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quickly saw where our error had been. We had assumed that the objective was the most rapid rate of recovery in Europe that was possible, and in the first year the limiting factor, really, was supply. There wasn't enough stuff in the world to meet Europe's requirements. But all these estimates from the Department of Agriculture, Bureau of Mines, and so forth and so on were that productivity was going to increase in Latin America, Australia, and South Africa, so supplies were going to increase. And we'd assumed, really, unlimited demand. So, as supplies increased, therefore, the amount of aid that could be used went up. Therefore, instead of having what General Marshall wanted, which was a declining requirement, we had an expanding requirement.

So, then, we came to the conclusion that the purpose of this program was not to have Europe recover at the maximum rate possible; the problem was to have Europe recover on a basis of declining requirements for aid from the United States. So, even though more copper, lead, zinc, oil, and so forth and so on could be foreseen to be available, we weren't going to finance more, provided the recovery went along at an appropriate rate. Therefore, we just programmed it for five million the first year, four, three, two, one.

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MCKINZIE: As it turned out, your projection for the first year was about right.

NITZE: Well, our projection for the first year was about right, but that came back from the fact that I knew it had to be close to the U.S. balance of payments surplus. Within a week after Tic Bonesteel and I had been assigned this job, it was decided that we had to have a press conference to describe to the press what it was we were up to. I remember at that press conference Chalmers Roberts asked me the dirty question. The dirty question was, "Paul, what do estimate this will cost the United States in the first year?"

I said, "Five billion dollars."

It turned out finally to be 5.025 billion. The point was that you knew what you were aiming for, so that it wasn't just a guess out of the blue.

One of the most useful and intelligent people on this team was Harold Glasser. Harold came to me one day and he said, "Paul, I have to resign."

I said, "Good God, Harold you can't resign; you're running all this balance of payments part of this thing and you're doing a superb job. You've just got to continue with this. This is the most important thing going."

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Harold said, "No, I just have to."

I said, "What in God's name is it about?"

He said, "Well, it has to do with my relations with Harry White and the Treasury" (White was his boss in the Treasury). He said, " I can't tell you what it's about, but I just have to resign," and so he did. Shortly thereafter, Harry White was called up for investigation by the Un American Activities Committee, I guess, and took the fifth amendment. Then Glasser was called up and, as I remember, took the fifth amendment forty times or something like that; just refused to answer any questions. I've never really been able to understand exactly what had gone on whether Harold Glasser was, in fact, a member of the Communist party or whether he wasn't. All I can say is he was as useful and as competent a fellow on the Marshall plan as you could find. Harry White was a different kind of a fellow, but Glasser I felt very badly about.

MCKINZIE: I'd like to ask you something about that summer you were trying to come up with a figure because the CEEC [Committee for European Economic Cooperation] had its own difficulties trying to get up information to make its proposal.

NITZE: Yes. As I remember it, either we or the CEEC had

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sent a questionnaire to each one of the members of the CEEC asking for a lot of detailed specific information, and much of that information just wasn't available. It was, by and large, available in England. The British had better statistics than, for instance, the French. The French didn't have that kind of statistical apparatus to produce figures of this kind. And my recollection is that a fellow in the French foreign office was assigned the task of coming up with the answer to that questionnaire. He did produce the figures on time, but subsequently he told me that he concocted all the figures out of his head, that there was no real information on which he could base the figures. They just seemed to him to be reasonable. He manufactured the answers to the questionnaire as best he could; didn't do a bad job of it.

But the upshot for all this work that Bill Phillips, Bob Tufts, and Bill Bray, and I had gotten underway was to finally produce what we called the "brown books." There was a brown book for each country that was to receive aid under the Marshall plan. It outlined what kinds of commodities would be sent under the Marshall plan year by year, what would happen to the various indices of industrial and agricultural production and so forth and so on, and, finally, what

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would be their expected balance of payments situation with various parts of the world. After we got all these brown books together, that gets us into the period of justifying the Marshall plan before the Congress.

MCKINZIE: One thing that you might wish to comment on is the extent to which you built in some sort of integration of economy into these brown book proposals. One reads a lot about Clayton's insistence upon some sort of integration being incorporated into the whole program.

NITZE: Well, as we discussed earlier, Mr. Clayton felt strongly that Europe would have a better chance of recovering if there were no tariff barriers between the European countries themselves in other words, if there were a free trade area in the Marshall plan part of Europe.

When the CEEC was first organized, the chairman of the CEEC was Sir Oliver [Shewell] Franks. The meetings of the CEEC were held in Paris. The U. S. was supposed to have no relationship to the CEEC; it was supposed to be a European body quite separate from the U.S. and making its own independent analysis of the situation. But it seemed clear that there ought to be some degree of coordination, that requests from CEEC should not be totally out of line with what we in Washington thought

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might be possible. So, I went over to Paris in the early days of the meetings of the CEEC and stayed at the same hotel that Oliver Franks was staying at. We used to have breakfast every morning and would discuss what was going on. He would tell me what the moves were as they were being debated in the CEEC, and I would tell him what the views were in Washington; this was entirely unofficial. But I did communicate to Oliver, Will Clayton's and it wasn't just Will Clayton's; it was the State Department's view, that if we were going to make this economic sacrifice, then it would be proper for the Europeans to do everything that they could to make the job easier. Certainly, we thought that a customs union would make the job easier, and, therefore, Oliver should propose this to the CEEC.

Oliver Franks finally became persuaded that this was correct, but he said that he had difficulty with his own government, that he would have to go back to London and consult with his government. He spent a weekend back in London with his government, consulting with them, and came back, having obtained a firm decision by the British Cabinet that they could not go along with the customs union because of the impact that it would have on the Commonwealth. Mr. [Winston] Churchill had taken a firm position that he did not propose to preside

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over the liquidation of the British Commonwealth, and even though he was no longer in power, that did constitute a very real political problem for the British. I think if the British had really been prepared to go for a customs union, it might have been possible with respect to the other countries; at least, that was my impression. But the British just felt they couldn't do it, so the Cabinet turned it down.

Should we now go to the problems of getting the Marshall plan approved? Part of the mechanism that was designed this wasn't my doing; I guess it was Bob Lovett's, Lew Douglas', and other's doing was the creation of those three committees. There was the Harriman committee; then there was one on the availability of raw materials, the Krug committee; and then, as I remember it, Mr. Acheson headed a committee to foster public support for the Plan.

Dick Bissell and, I guess, Lincoln Gordon worked with the Harriman committee. I guess I organized a weekly luncheon at the Metropolitan Club every Friday which included Dick Bissell, somebody from the Treasury Department (my recollection is it was Bill Martin, but maybe that was later, because this luncheon group continued all through the early period of the Marshall plan) and others. Every Friday we'd have lunch at the

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Metropolitan Club with a group of about five or six. This also included, generally, Tom [Thomas C., Jr.] Blaisdell from the Department of Commerce and a man whose name I've forgotten from the Department of Agriculture; agricultural problems were very important.

MCKINZIE: This wasn't Dennis Fitzgerald, was it?

NITZE: Well, that isn't the name that comes to my mind, although Dennis Fitzgerald was involved in this. There was another man, but his name now escapes my mind. But we would informally discuss what was going on amongst the group in the State Department, what was going on in the group in the Treasury, so forth and so on. Without any formality no signing of papers, nothing of that kind we would coordinate the inter departmental issues involved. But then, of course, one of the crucial problems was that of how the plan would be organized; what would be the organization of the implementation of the Marshall plan? The Brookings Institution did a report on that, as I remember. But we in the State Department decided that we ought to get busy right away, that time was slipping by, so we put together a group within the State Department to really act as though this group were going to run it. We got up tables of organization and we got up lists of names of people who

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would be, we thought, appropriate for each one of these jobs, and then it seemed to us that if somebody were going to take over and become the administrator of the aid organization, he would need an office building. So, I rented the building on the corner of 17th and H Street, a brand new office building. I rented that and also got all the necessary furniture and telephones and so forth and so on. The thing was already to go, and the problem was one of getting the right person to administer it.

MCKINZIE: May I ask who you had on your list?

NITZE: I don't remember. Somebody else came up with Paul Hoffman's name, and Paul Hoffman was then out in Japan, as I remember it, on a reparations assignment or something like that. In any case, a telegram was sent out to Paul Hoffman asking him whether he would take the job, and, as I remember it, he replied that he would come back to talk about it. I went to the airport to meet Paul Hoffman and took him home to our house on Woodley Road. He had dinner with Phyllis and me, and I did my level best to persuade him to take the job. He tentatively agreed to take it, but he did not approve of the organizational arrangements which I and my boys had worked out.

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MCKINZIE: Was the idea of the special representative your idea?

NITZE: No, I don't think it was. I don't remember who's it was. It may been the political Under Secretary at that period, Bob [Robert A.] Lovett; I think it was probably Bob Lovett's. I think he was handling that part of it, in my recollection. I just don't remember who was worrying about who the administrator should be. But I remember Paul Hoffman saying that he didn't think that our idea that you have an organization which would really manage the full operation was right. He thought what you needed was a committee of maybe I think he had in mind twelve people, who would really just devote themselves to policy. They would then assign the actual operation to the various departments and agencies of government, and most of the work would be done in the Department of Commerce, the Department of Agriculture, the Treasury Department, and so forth and so on. The Committee itself would merely make policy and wouldn't actually sign any detailed documents, issue checks, or anything else of that kind.

It was my view that this wouldn't work, that you had to have a brand new organization, and Paul Hoffman disagreed with this. I remember he went up to talk to

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Honest John Taber and told him that he was dead right, that I was dead wrong, and that the worse thing in the world would be to rent an office building and have all this furniture and equipment. Somehow or other, John Taber had learned of the fact that I'd leased this building and got all this office equipment. Paul Hoffman told me I had to cancel the lease, return all the office equipment and all the telephones, and so forth and so on, which we did. But within three months after Paul took office, he had to have an office building, he had to have all the equipment; he took it all back again after a while. It delayed the operation about three months at least, I think, this idea that Paul really could do it without a real organization.

I think all of that took place after the hearings before the Congress had really begun. I think the first hearing was before the Senate Foreign Relations Committee, and I forget who handled that; it was either Bob Lovett or Lewis Douglas.

MCKINZIE: I thought Lew Douglas came in to do that specific job.

NITZE: I think that's probably right. I think he handled the hearings before the Senate Foreign Relations Committee. The next set of hearings were before the

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House Foreign Affairs Committee, and the two most interesting sets of hearings were before the House Foreign Relations Committee and the House Appropriations Committee; they were much more interesting than the Senate hearings. They went into much greater detail.

MCKINZIE: How did you happen to get tied up with Lewis Douglas on this? Did you seek him out, or was this something that just interested you?

NITZE: No, I didn't seek him out. I think this must have been Bob Lovett who knew Lewis Douglas well, and I think he was the one that brought him for this. Bonesteel, I, and my boys had done all the preparatory work and prepared all of Lew Douglas' testimony for the hearing. I remember that hearing; I went with Lew and sat down next to him. Tom [Thomas T.] Connelly of Texas was really the most fiery and witty participant in those hearings. Those hearings weren't that difficult. They were mainly interested in the organization point, not really so much in the substantive point, it is my recollection. The hearings obviously exist, and they're in the files. My goodness, it's been years since those hearings, and I don't remember those hearings as well as the hearings before the House Committee, because I was really the principal State Department witness, and Ernie

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[Ernest] Gross was with me.

That House committee, the House Foreign Affairs Committee, had as a staff assistant Professor William Yandell Elliott of Harvard "Wild Bill" Elliot, he was known as. Bill Elliot had very firm ideas on all kinds of problems. Another member of that committee's staff was Charles Burton Marshall, whom I had never known before. In a very short period of time, it became clear that the committee itself was in a revolt against Bill Elliot. He was so positive and so intolerant of the views of the members of the committee that they couldn't bear it any longer. They finally fired him, and they then asked Ernie Gross and me whether it would be possible for us to act in a dual role; not just as witnesses in behalf of the State Department, but also as members of the staff of the committee which I think is a unique kind of a thing to have happen. The upshot of all that was that the hearings before that committee dragged on and on. Finally, word came in one Thursday afternoon that the rules committee set the following Monday as the day on which the House would debate the authorization legislation for the Marshall plan. The committee had to have a report in the hands of the members of the House by Monday morning at 9:00, and this was either Thursday or Friday it may have been Friday

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when this word came to the committee.

The committee chairman decided that C.B. Marshall, Ernie Gross, and I should write the draft of the committee's report. So, the three of us assembled in Burt Marshall's office. Burt didn't say anything at all. He got this great big ream of typewriter paper and went down on the floor with some adhesive tape, and he taped all these pieces of paper together in a great long piece of paper at least twenty feet long. I asked him what he was doing, and he said, "Well, I'm going to have to type this; you fellows can't type and I can. What I'll do is put the end of this twenty foot long piece of paper in the typewriter, and I will type this darn thing out as we write it. Then, when we make a correction, I can just retype the insert, and we'll piece it all together again. This way we'll get this draft done fast." He said that he would write the first introductory chapter, that I should then write the draft of the first main chapter, and Ernie Gross would write the draft of the second chapter, etc., etc., etc. So, we sat up all night, each of us writing parts of that committee report. And by morning we had a draft of the committee report. C.B. Marshall was really the person who did most of the work, but the three of us worked together all night long.

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In the morning we got the draft retyped, so that the committee could look at it. The clerk of the committee his name has now escaped my mind was a very good person, but during that Saturday morning session he suddenly had a heart attack in the middle of the session, because he'd also been up all night with us. Doc Judd was a member of the committee, and Doc Judd took him into the next office and took care of him, got him off to a hospital. He finally recovered from the heart attack, but this was a very dramatic day. Finally by the end of the day, the committee made its changes in this committee report and sent it off to the government printing office; it was on the desk of every Congressman by that Monday morning. I think that committee report stands up today as being the best document about the Marshall plan that anybody did. And it was done just overnight, just done right off the cuff; it was an absolutely superb job. But nobody interfered with this, and if there was one man clearly in charge, it was Burt Marshall. And it worked; it was a great job.

I remember another episode during the course of those hearings. That authorization bill, as I remember it, had four titles to it, of which the Marshall plan was only one title. Title Four, I think, dealt with aid for China. The chairman of the committee was Sol Bloom.

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Sol Bloom had adjourned the committee meeting; all the Democrats had left with him, and there were just six of them there. They really didn't pay any attention to us because they considered all three of us, Burt Marshall, Ernie Gross, and me, to be just members of their staff. They were talking about the politics of Title Four, and John Lodge asked the question as to whether or not this wasn't an excessive amount of aid for China that was provided for in Title Four. Doc Judd said that he didn't think that John Lodge understood the politics of the question, and John said, "What do you mean by that?"

Doc Judd said, "Well, the important point is to defeat the Democratic administration in the 1948 election. And the great thing that the Truman administration has going for it is the confidence that the country has in General Marshall. The Republicans are not going to win the 1948 election unless somehow or another we can tarnish General Marshall's image. The way in which we can best do that is through China. If we appropriate more than enough money for the Chinese aid program and the program fails and the Chinese Communists win in China, the responsibility will clearly by General Marshall's, not ours. If, however, we don't appropriate or don't authorize this full amount, then the defense can be made by the Democrats and General

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Marshall that it might have succeeded had the Congress not cut down the amount of money available for Chinese aid." So John Lodge and all the others agreed with Doc Judd on that analysis, and they went forward with the full amount of Title Four.

MCKINZIE: Had you done your work on Chinese needs in the staff work you were doing, prior to the presentation of the bill?

NITZE: I had prior to that time, but after I was assigned to the Marshall plan part of it that became full time, and so I'd given up on all the other things. As I remember it, C. Tyler Wood took over the interim aid, including the China aid program. He was working on that while I was working on the Marshall plan.

MCKINZIE: Did you have any contact with the Herter committee?

NITZE: I did, indeed. In fact, Mrs. [Christian] Herter was going to be here for lunch today, because Mrs. Herter and my wife are first cousins. Chris [Christian] Herter and I used to share a house together in the summertime in Washington. Chris was one of my closest friends. When Chris Herter organized the select committee, as it was called, he appointed Phil Watts to be the

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administrative aid of the select committee. Phil Watts had been a classmate of mine not in the same class, but a great friend of mine at college. I remember that when Phil got back from his trip with the select committee, on its trip to Europe, he talked to me about his experience with all those Congressmen. He had tales of horror about some of the Congressmen, their naiveté, and, in some instances, worse than that, he thought their defects in character. He said he felt that there was one member of that select committee who was absolutely outstanding and was a comer, and his name was Richard Nixon. I forget exactly how the timing of the select committee related to the Alger Hiss affair; I believe that wasn't until 1949 50. So, this was before the Hiss case began, and the Helen Gahagan Douglas campaign wasn't until 1948, the succeeding year, so he wasn't well known at that time.

I think Phil Watts was the first person to tell me that he thought Nixon was a comer, and Phil said, "There's one thing that Nixon doesn't understand much about and wants to understand more about, and that's foreign affairs. He clearly indicated on this trip that he is interested in foreign affairs." And Phil suggested that he might organize a series of dinners where Phil Watts, Nixon, and I would have dinner and

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would discuss various issues of foreign affairs at each one of these dinners, which we subsequently did. But those dinners took place after the Hiss trial, and I think they took place after he'd been elected Senator, so that must have been in '49, later than the period we are discussing now.

I might return to the question of the problems of getting the Marshall plan approved and take up next the House Appropriations Committee. John Taber organized a subcommittee of the House Appropriations Committee of which he was the chairman. I think there must have been ten or twelve members of the special committee on the Marshall plan appropriation. By this time, Paul Hoffman had been appointed designate to be the administrator of the Marshall plan. My recollection is that, at the first hearings before the committee, the witnesses were Paul Hoffman and either Lew Douglas or Bob Lovett; I can't remember which. But that initial hearing took place just in one morning, and then it was decided to turn the hearings over to what was called the "experts," and that consisted of me and my associates.

So, the next morning I appeared with my team before this Taber Committee also, with all those brown books. They'd already been distributed to all the members of the committee, and it was my plea that I would like to

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begin my testimony from those brown books. John Taber said, "We're not going to use your brown books at all. I don't believe in balance of payments justifications, and these brown books of yours are entirely geared around balance of payments problems. What I want to do is to start with the countries in alphabetical order; that means we'll start with Austria. Then we'll take the list of things you've proposed to be delivered to Austria in alphabetical order, and then you, Mr. Nitze, and your associates will justify why each one of these items is necessary in the way of aid to these countries." So, we started off with Austria, and we got along not very well down through the letter P. Under the letter P was an item of 25,000 tons of pulses, which are a variety of beans, which we proposed be sent to Austria under the Marshall plan. When we got to the pulses, John Taber's nose began to quiver and he said, "Mr. Nitze, have you ever grown pulses?"

I said, "No, Mr. Chairman, I have not grown pulses. In fact, I've relied on the Department of Agriculture for these estimates."

And John Taber said, "Well, I'm not interested in what the Department of Agriculture knows about the Marshall plan. I'm interested in what the State Department knows about the Marshall plan and, in

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particular, what you, Mr. Nitze, know about the Marshall plan. So, you will now tell me why it is necessary to deliver 25,000 tons of pulses to Austria? Not only have I grown pulses in my farm in Northern New York, but I've also been to Austria and I've looked into the question as to whether pulses can be grown in Austria. I can guarantee that Austria is a more favorable place to grow pulses than upper New York State. Now, tell me why 25,000 tons of pulses must be delivered to Austria."

So, then I went into a long story about average caloric intake of the people in Austria, why this was insufficient, why, in addition to just carbohydrates, they needed proteins, and that the Department of Agriculture had come up with the estimate that this was the best way to provide a balanced intake as a supplement of what the Austrians would otherwise have.

And Taber said, "This is no explanation of any kind."

I said, "Well, can I call my Department of Agriculture experts over?"

He said, "No, I told you I want to know what you, what the State Department, knows about this." Then he said, "It is perfectly clear that the State Department knows nothing about this plan at all, and there's no earthly way in which we can complete these hearings this

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year. It is clear that the whole program must be postponed for a year, and I am now going to get on the telephone and talk to Bob Lovett about this and tell him that he must postpone the hearings for a year." Taber left the table, went into his back office, closed the door, and nothing happened for a half an hour. Then he came back to the committee room and said, "Mr. Nitze, you can call your experts from the Department of Agriculture. We'll adjourn the hearing now, and you have them here tomorrow morning."

So, then I went back to the State Department and went over to Bob Lovett's office and said, "Tell me what happened over the telephone."

He said, "John Taber described to me all the horror of your presentation, how you didn't know anything about anything. Particularly, you didn't know about pulses; you've never grown pulses and so forth and so on, and you were trying to justify these 25,000 tons of pulses.

"I listened to Taber until he completed his full catalog of horrors, and then I said to John Taber, 'You know, John, I could ask you a question that you couldn't answer.'

"John said, 'What is that?'

"I said, 'Well, how many rivets are there in a B 29 wing?'

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"John Taber said, 'You'd know that, because you used to be a Secretary of the Air Force."'

And Bob Lovett said, "Well, that's just the point; why don't you let Nitze have his experts there?"

Taber just thought about that, and then Bob Lovett said, "I've got a second question in mind."

Taber said, "What's that question?"

Bob said, "If it takes eight yards of pink crepe paper to go around an elephant's leg, how long does it take to kill a fly with a fly swatter?"

Taber said, "Well, that's a nonsensical question."

Bob said, "Well, John, why don't you stop asking Nitze nonsensical questions?"

That really saved the Marshall plan. Bob Lovett had really devoted himself to the understanding of John Taber's mentality. After all, John Taber was essential to the appropriations for the Air Force. He really understood what made John Taber tick and how to handle him, and he had exactly the right answer to persuade John Taber to let these hearings go on and to let me continue to testify.

Those hearings went on, and my recollection is that we had forty six sessions in those hearings before the Taber subcommittee, in which we went into every detail which you could think of. A good deal of it was purely

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acrimonious. Taber was a great person, but he was really what I consider to be narrow minded and very conservative. They had great difficulty understanding what this was all about and why it should be done. Taber, in particular, knew that if his committee approved this, he'd have to make the defense for this before the House. So much of his meanness to us was really trying to get himself in a position so that he could answer all the arguments of those who looked to him to be the watchdog of the public purse. But it was really very tough going for us who were trying to handle the testimony.

MCKINZIE: Did you have any feeling in those hearings that particular Congressmen let's say Congressmen from the wheat area were thinking of how the Marshall plan was going to help their district? There's always that kind of question that comes up when money is involved.

NITZE: I didn't have that feeling so much in the House Appropriations hearings as I did later in the Conference Committee between the House and the Senate. That Conference Committee between the House and the Senate was on the authorizing legislation; the Taber committee was on the appropriations legislation. When the Conference Committee met on the authorizing legislation,

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Senator [Arthur] Vandenberg was then Chairman of the Senate Foreign Relations Committee. I forget the name of the second in command; he was a Senator from Wisconsin. In the final hearings before that, in the final sessions of the Senate Foreign Relations Committee, Vandenberg wanted to have a unanimous vote approving the authorizing legislation, and he had asked me to come and assist in that final meeting of the committee.

MCKINZIE: Which is unusual too, isn't it?

NITZE: Which was unusual. And the Senator from Wisconsin was really having great agony of soul (this man subsequently became Chairman of the Foreign Relations Committee after Vandenberg's demise). In any case, he wouldn't vote in favor of it, and Vandenberg continued to press for a unanimous vote. He suggested to the senator from Wisconsin that he leave the committee session for an hour and wrestle with his soul on the issue. Finally, after wrestling with his soul for an hour, he came back and decided to vote yes.

Then, when the conference took place between the House Committee and the Senate Committee, Vandenberg again asked me whether I would come and be the expert to help the Committee. One of the most difficult problems

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was one raised by [Alben W.] Barkley. Senator Barkley was interested in tobacco, and he wanted to have an amendment to the authorizing legislation which would require of the European recipients that they use a portion of the aid for the purchase of tobacco. Clearly, we in the State Department thoroughly disapproved of that kind of a pork barrel arrangement. And, again, Vandenburg felt that some kind of a compromise was necessary with Barkley, because Barkley
was too important to the Senate to ignore on this issue. So, he asked me to go into a separate room and draft an amendment which would satisfy Barkley but wouldn't damage the Marshall plan. So, I went off into a room and drafted some language which was quite convoluted and involuted and purported to be doing something for the tobacco growers but, in fact, didn't. Barkley read this, and he was satisfied that there was an amendment that he could point to which dealt with tobacco, even if it really didn't do anything for the tobacco growers. It kind of left up in the air as to how much tobacco the European countries would buy, but it did indicate an intent on the part of Congress that some tobacco should be within the materials shipped under the Marshall plan. Then, a year or two later, I got a call from the General Accounting office. A fellow by the name of Campbell

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called me up and said, "We have been trying to determine what the intent of Congress was in the tobacco amendment to the authorizing legislation. In trying to find that intent, we found you were the person that drafted it. What was in your own mind when you drafted it, because that would indicate what the intent of congress was?" And so I told him what the story was, that Vandenberg's intent was to get some language which purported to do something for the tobacco farmers but didn't really nail it down. That was the intent of Congress with respect to that particular part of the legislation.

To go on with the appropriations problems, when we finally completed those forty six sessions and Taber was prepared to take the legislation before the House, I went up and sat in the gallery to watch this debate. Taber started off on his introductory speech in favor of this appropriations bill by denouncing the State Department and pointing his finger up at me and saying, "The State Department knew nothing about this plan at all; it was the most miserable testimony that we got from the State Department. It was only by virtue of these weeks and weeks of hearings that we've gotten this thing straightened out and gotten it into manageable proportion" pointing up at me and denouncing me while he was doing all of this. But the upshot was, of course,

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that he was protected from being outflanked on the other side, and so the thing went through with flying colors; Taber was really quite an operator. During the course of those hearings, I lost fifteen pounds.

Then after the House Appropriations Committee got through with this, then the Senate Appropriations Committee decided that they had to have hearings. The Senator, who was chairman of the Senate Appropriations Committee at that time was Kenneth McKeller. General Marshall called Chip Bohlen and me into his office one day and said that he'd been requested by the chairman of the Senate Appropriations Committee to come up and testify on the Marshall plan. He was to come up the following Monday and give his testimony. He proposed that Chip and I go off and write a statement for him to make; Chip would do the first part of it, which would deal with the political consideration involved, and I would do the second part of it, dealing with the economic situations involved. So, Chip and I stayed up all night, prepared our two drafts, married them in the morning, and went in to see General Marshall with the finished draft. Secretary Marshall read this draft and thought about it for a while, and he said, "Well, you know, I don't think I'll use this statement of yours." I was shocked and Chip was shocked. We didn't know what

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we'd done wrong in these drafts. Marshall felt that we were disappointed and said, "Now, it isn't that I disapprove of what you've written. The problem is a different problem. This committee doesn't really want to intellectually know about the Marshall plan; they want to know whether I know anything about the Marshall plan. If I go up there and deliver this prepared statement that you two have prepared, they will know that this was prepared by the staff in the State
Department and not by me, and this won't help one bit." He said, "I didn't ask to appear before this committee; they've asked me to appear and they've set the hearing for 11:00. As it happens, one of my former associates from the Army, a General, has died today, and his funeral is at 10:00 on Monday. I will go to that funeral, and I will be late appearing at the Senate Appropriations Committee hearing. Everybody will be awaiting me. I will come in, and everybody will expect me to have a prepared statement. I will have no prepared statement. I will say that I have come at their request and I'm prepared to answer any questions that they wish to ask of me. In the meantime, over the weekend I will have studied this paper that you two have drafted for me. And no matter what the questions are, there is some way which I can use all that information in my replies to the questions

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that the Senate has asked me. In this information that is in your document will be my answer to their questions, and this will then satisfy them that I know something about the Marshall plan. If I just read this prepared statement, it won't work at all." And that's the way the hearing went, just an absolute whizz bang; there was just one day's hearing, and that was the end of the Senate Appropriations Committee hearings, because Marshall did such a marvelous job.

McKeller was a difficult person, but Marshall really understood how one handles a McKeller Committee. It was really one of the best pieces of real wisdom as to how to handle a committee that I've ever seen. And when you had to support people like Bob Lovett and Marshall, when you were working for people like that who really devoted themselves to the relationship between the executive branch and the legislative branch with a sense of whatever democracy is about, why it ticks and how it must tick it was just a sheer pleasure.

MCKINZIE: You talked about your statistical study where you ran data through the Army's computers, which is a very early attempt to do something with computers. You also alluded to the politics of the Marshall plan, namely, that you make an appropriation and then you decrease it thereafter. There's perhaps what might be called a

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mythology of how the total aid figure was finally achieved. There is some talk I hear about deciding what Congress would appropriate and then deciding that was what was needed. There is some talk about Europeans coming up with a huge amount and then having to sort of beat them down to what, again, some people thought Congress would ultimately appropriate. Were you involved in any of this kind of discussion and determination?

NITZE: Very much so. But as I've already said, my reasoning on it sprang from my early discussions with the Treasury Department of what was the magnitude of the problem. The other part of this was General Marshall's clear conception that the country at that time was prepared to support a very ambitious and wide ranging foreign policy for the United States. The country could not be expected to be in that mood forever. I remember at one time he recollected to me the days in the '30s, when the mood in the country had been wholly isolationist. As I remember it, he said that the total appropriations for the army as a whole in the '30s was some 300 odd million dollars. He described his life at Fort Sheridan, where he was a major, I believe, and the tenuity in the economy with which everything was done and the inadequate budgetary support for the Army. He said,

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"You know, the country, sometime, is going to return to that kind of an isolationist mood, and it is absolutely essential that these programs that you fellows are now working on be self liquidating. Sure, it's all right to have appropriations of the size that you think is necessary now, but they must be decreasing, and they must work themselves out, because the country won't stand for this over a long period of time." So, it was Marshall who was really insistent that even though you start with what was necessary, five billion a year, you build it down and you pay out of the program over a five year period. It was his insistence that it terminate after five years, that it not be a continuing operation. So, if you were going to phase it down and terminate it after five years, you just had to do it; that had to part of the plan.

My original feeling was that you continue this as long as it was necessary. Marshall was the one who insisted that it go down to zero. And in our studies it seemed probable to us the main countries of Europe France, England, Italy and Germany could make it on that kind of a time schedule. It did not seem to us that Greece, Turkey or Austria could make it in that kind of a time schedule. That committee report that we drafted for the House, as I remember it, says exactly

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that, that the object of this is to get these people on their feet, and we think it can be done with the exception of those three countries, Austria, Greece and Turkey. There, we may need to have some continuing aid after the five year program. I think in another section of that same report we said that one has to anticipate that as the countries of Europe regain their economic health, so will they regain their independence. One cannot expect gratitude after they regain their economic health. This has to be looked at as being for the object of their regaining their independence and economic health, not that there'll necessarily be any continuing benefits to the United States or gratitude from them; I forget exactly how we expressed it in the report, but it's in that report.

MCKINZIE: Did Congress belabor this point in the hearings with you? That is, the decreasing nature of the aid, that this was a one shot affair?

NITZE: Well, I think the Congress was disposed to be wholly in sympathy with us, and we didn't have to argue that point. We would have had real difficulties if that hadn't been part of the plan. I think that I'm correct in my feeling that this was General Marshall's independent view, quite apart from the acceptability of

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the Congress. He thought it a long range interest of everybody involved that it should be a self liquidating program.

There is one other thing I could mention in connection with the Marshall plan that I think is of interest, and that has to do with the issue of whether or not Germany should be a member of the Marshall plan. Early in the considerations of the Marshall plan (I think it must have been June, '47 or sometime in there; in the summer of '47, in any case, when we were still in the initial stages of working up to the plan, as opposed to the Marshall speech), it was decided to have a meeting of the U.S. Ambassadors to the various countries involved in Paris. Mr. Jefferson Caffery was our Ambassador in Paris at that time.

So all these Ambassadors were called in to Paris, and I went over to meet with them. One of the issues we discussed was the question of whether or not Germany should be included in the Marshall plan or not. Bob [Robert D.] Murphy was then political adviser to [Lucius] Clay. He came to this meeting and when this issue was presented to him, I remember Bob Murphy's reaction to it.

He said, "It all depends upon what you want to do. Today, the average caloric intake in Germany is 950

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calories a day. When people are getting 950 calories a day, they're not interested in politics. They haven't got the energy to be interested in politics. If you want to keep Germany in a position of being no political problem, the thing to do is not include Germany in the Marshall plan and leave the German caloric intake at 950 calories a day, because then you won't have any political problems with Germany. If you do include Germany in the Marshall plan, then you have to anticipate that their caloric intake will become adequate; they'll be full of energy, and they are a very energetic people. You'll have all kinds of problems with Germany then. And you shouldn't include Germany in the Marshall plan unless you are prepared to deal with those problems. You've got to then consider all the political problems that are involved in bringing Germany back into full status in the community of nations."

He said, "This is kind of a cold blooded analysis I'm making. My personal view is that the United States people would never tolerate holding a country down to 950 calories of intake; this isn't the kind of a thing that the United States can do. Therefore, you've got to contemplate the Germans will eventually be full of political drive, and therefore, I recommend that you do include Germany. But I just want you to understand that

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if you do include Germany, you're making a decision which goes much further than that and which has all kinds of future political connotations that you must beware of." The group of ambassadors as a whole recommended that it be done.

MCKINZIE: Did you believe that Germany ought to be included for reasons of its revived productive capacity? Acheson once said that talking about a revised Europe without Germany is talking about a body without a heart.

NITZE: This was an additional consideration. But U.S. policy towards Germany hadn't yet sorted itself out from that JCS 1067 document yet, and it was still in part "yes" and in part "no," so that U.S. policy on that wasn't fully clear. Acheson was on the side of Germany being in, I think, although I don't think he was in the State Department during this particular period. But eventually, it crystallized; it was, I think, the consensus of almost everybody that Germany should be in. But it wasn't obvious from the beginning. It was the controversial question and was really decided at that meeting in Paris.

MCKINZIE: Did you have any dealing with the European delegation that came to the United States from the CEEC?

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NITZE: I did indeed. I think I met with all those European delegations that came to the United States. The one that I remember most clearly was the Italian delegation. This was a two man delegation, including Egidio Ortona who was head of the Liberal Party. I found both of them very intelligent. The Italian problems were very intense at that time. Prior to that, we had this Interim Aid Program, which was largely food assistance, and we'd had real difficulty with the Italians on that. This also brings up an interesting recollection. Working with the Department of Agriculture, we determined how much wheat we could afford to make available for interim aid under the Interim Aid Program to the European countries. I guess Clinton Anderson was then the Secretary of Agriculture. We'd allocated that wheat among the various European countries according to some computations made by the Department of Agriculture, various people at the embassies, and so on and so forth. The Italians in turn had sub allocated this wheat amongst the various sections of Italy. It turned out in the middle of the year (I think this must have been '47; it may have been '48; I forget the year) that people around the southern part of Italy had been improvident in their sub allocations to various towns, including Naples. They had, in six months, consumed already more

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than half of the allocation; there was going to be widespread starvation in the southern part of Italy because of over consumption during the first part of the fiscal year.

Of course, the issue was what to do about it. Here, every other one of the recipients had correctly allocated and policed their allocation and were prepared to continue within their allocation for the full year. The northern part of Italy had done the same, but the southern part of Italy had consumed it too fast. What do you do under those circumstances. You are faced, on the one had, with the integrity of the system which needs to be policed and, on the other hand, with the question of widespread need. You've got the practical consideration versus the humanitarian consideration. We finally came to the conclusion that it would be wise to add to the overall amount so that there wouldn't be this starvation in southern Italy. But Anderson was adamant about not making any more wheat available. It was true that a substantial percentage of our grain, including corn, of course, was being used to feed cattle and pigs. In order to increase the allocation to Italy, it would have meant reducing somewhat the amount of grain that was available to feed pigs and cattle. It seemed to me, in particular, that this was the proper thing to do.

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People in the United States could go without some meat and wouldn't starve; they would have a little less protein rich diet for a short period of time. Failure to do it would have important repercussions, both humanitarian and political, in Italy. But I couldn't persuade Anderson to do this. At that point Stuart Alsop came in to see me, and I forget exactly what it was he was interested in; it was some other point in connection with European politics. I guess it had something to do with the relations between Germany and France with the German occupation regime, which I didn't want to discuss with Stuart. So I began to discuss with him this problem of grain allocation to Europe, and my difference of opinion with Secretary Anderson in the Department of Agriculture. Stuart then wrote a column which was entitled, "Gibbon Looks at the History of the Western World from the Year 2000." Everything has gone to hell, and one ties to trace back why everything has gone to hell. The reason why everything has gone to hell was that there was this Secretary of Agriculture who thought it was more important to feed pigs and cattle than it was to feed human beings. This column of Stuart's appeared, and the next day Anderson called me up and said, "Paul, you can have your allocations."

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MCKINZIE: This was '47, early '48?

NITZE: I think so; I'm not sure.

MCKINZIE: That was the winter, I gather, of the voluntary food conservation campaign in the United States, which was designed to make, I think, a hundred million bushels of wheat available to Europe and was achieved, despite all of these "eat a slice of bread less" and all of that, by a brewer's holiday and an agricultural policy, as you have suggested, in which less was allotted to animal production. But that was supposed to have all been voluntary.

MCKINZIE: Well, I don't think much was involved; it think it was maybe five million bushels or something in that order, but Anderson finally managed to make it available.

There is one other point, and that is that I referred to these brown books, which had been worked out with this elaborate care. Even though the aggregate amount expended on the Marshall plan in the first year was almost to the dollar what we'd estimated, the individual components were way off. Some things were much higher and some were much lower; they were offsetting errors. So, even though the aggregate was

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right, the detailed computations that we'd made in those brown books did not stand up that well in practice.

MCKINZIE: Some of the Europeans who were involved in the CEEC are on record as having said, when they were trying to make their case to the CEEC, "we lied like hell" in order to get what they thought was the largest possible initial allocation. Did it ever appear to you that you might have received some false statistics from them?

NITZE: It soon became evident that a lot of this statistical material we got from the Europeans was, in fact, fabricated. I didn't feel that much worried about that part of it, because it seemed to me that, overall, the thing was of the right proportions; not too high, not too low. In the detailed administration of the thing, we would work out these problems, and the important thing was time; the thing to do was to get cracking.

MCKINZIE: Your explanation is almost exclusively economic, and, yet, the thing was sold to the public as political, that is, as anti Communist. Did you have thoughts at the time about the way it was being sold to the people?

NITZE: Well, my view of it clearly is identified with my particular contribution to it. I was, after all, representing the economic side of the State Department

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in working the thing out. Therefore, my attention was focused almost entirely on the economic part of the problem and not on the political part. It was George Kennan and Chip Bohlen and others who were more concerned with the political parts of it than I although I was really chief cook and bottle washer on putting the whole thing together, so that I had to also interest myself in the political things. But my main interest was the part of the organization that I had come from and was primarily interested in at that time.

The question of European integration as a goal, as opposed to economic recovery as a goal, was one that continued to divide the Washington community for some time thereafter. Frankly, my viewpoint was to put first the objective of economic recovery and to look upon European integration as a tool toward that end, insofar as it was feasible, but not as an end in itself. The reason for that goes back a long way. I was working with Nelson Rockefeller in the office of the Coordinator of Inter American Affairs and started to work on the procurement of strategic materials. One of the materials which was shortest in supply appeared to be tin. I guess this was in the spring of '42 after the fall of Malaysia. In any case, one of the people that I negotiated with for the procurement of tin was Don

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Mauricio Hochschild, who was one of the tin magnates in Bolivia. He came to Washington, and Phyllis and I gave a dinner for him. He had a great friend by the name of Count Richard Coudenhave Kalergi. And Count Kalergi was the original inventor of the idea of European integration as an objective. At that dinner we discussed the shape of the postwar world in relationship to Kalergi's ideas of European integration.

As I remember, the substance of the debate at dinner revolved around the question of, how did you achieve integration unless it were around some country that took the lead? You had to have leadership; you couldn't just have cooperation. Somebody had to be the strong element about which you could build a unified and integrated Europe. As one looked at the postwar world, where could one expect to find that leadership? It couldn't be Germany, because that's what the war was about, to keep Germany from establishing hegemony over Europe. Germany, in any case, on the favorable hypothesis that we won the war, would be a defeated country. It didn't look as though the French would be a proper candidate; after all, they've done very badly in the early days of World War II. Then there was some discussion as to whether it might be the Dutch. But then the thought was that Holland was too small a

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country to provide this leadership. Could it be the British? Well, the British were again involved in the Commonwealth problems, and it wasn't clear that England could really do the job. I think somebody suggested, "Well, how about the Poles?" That was thought not practicable, and clearly the Italians didn't seem to have what it took to give that leadership.

So, even in those early days in 1942, you could recognize what the outline of the problem was of really having workable European integration; it required that some one country be primus inter pares, and which one would it be? That problem never did get itself sorted out, even in the postwar years; and it hasn't gotten itself sorted out today. That seemed to me to be kind of an insuperable problem; you couldn't really aspire to real political integration unless you could see someone taking a dominant role, and there wasn't a real candidate for that. But there were others, including Paul Hoffman and George Ball, who really injected this into independent objectives, independent of recovery. Much of the arguments within the executive branch after the initial year of the Marshall plan really evolved around that issue, in which the sides were pretty well drawn. This continued right up through the [Lyndon B.] Johnson administration. Johnson finally liquidated the

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argument, which, in the Johnson administration, had evolved around the question of the multilateral nuclear force. Johnson finally settled that issue. He decided "nix" on the multilateral force and "nix" on the ideas that George Ball and others were still promoting at that time.

MCKINZIE: So then, this business of integration was, as you phrase it, a separate goal from recovery and not to be integral to it?

NITZE: I had the feeling that that was Paul Hoffman's view, and the view of some others, that European integration was an objective in itself, quite unrelated to European economic recovery. It wasn't just a means toward an end; it was an independent end. My view was that it wasn't a practical end in its absolute form. Steps toward integration not unity, but toward greater integration, such as a reduction of tariffs within the European community and so forth was all fine, in making European recovery more practical, faster, and more solid. But it wasn't going to lead toward political unity.

During this same period (I forget exactly what year, but it may have been early '48), another issue came up which related to Czechoslovakia. After Jan

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Masaryk jumped out the window and the Communists took over, the Czechoslovakian Communists nationalized everything there was in Czechoslovakia, including the facilities of certain American industries. The Czechs had bought a steel plant in the United States which hadn't yet been delivered parts of the steel plant. They also had some gold on deposit in the federal reserve system. And we put an export embargo on the steel mill and seized the gold in order to give ourselves trading assets to negotiate a settlement of this seizure of American assets in Czechoslovakia. The Czechs then proposed that there be negotiations as to how to liquidate these unfortunate happenings. And we said, "Fine" we'd like to negotiate a settlement.

So, they sent over a team headed by a man by the name of Eugene Loebl [deputy minister of foreign trade]. Loebl had with him a Czech banker who had run a mortgage bank in the early days of [Eduard] Benes when the Germans had taken over Czechoslovakia; his bank had been merged with some other banks, and he'd been head of that. Then when the Czech Communists took over, they consolidated the entire banking system into one bank, and he became president of that bank. Then there was a Czech foreign office fellow [Dr. Hugo Skala] who was secretary of their delegation. When Loebl and his team

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arrived in New York, this secretary of his delegation appeared that evening in my office in the State Department. He had defected from the Czech side, and he had all the negotiating documents of his team with him, which he turned over to me. Then Loebl appeared in Washington and said that here his miserable, criminal secretary had run off with the money of the delegation and all their records. He didn't have any records (I had all of his records), and it was impossible to conduct the negotiations from that standpoint. He would have to return to Czechoslovakia to get a new file of records and a new delegation, or a new secretary of the delegation. So they returned to Czechoslovakia, and they came back a couple of weeks later with a new set of documents and started these negotiations.

During the course of the negotiations, Loebl, at one point, made the assertion that the United States was deeply unfriendly to Czechoslovakia, and this made me furious with rage. I went through the history of Czechoslovakia as an independent country. This was an idea that President Wilson had had, and Czechoslovakia really owed its independence originally to the United States. We were biased in favor of Czech independence, and the accusation of unfriendliness on the part of the U.S. toward the Czechoslovakian people was totally

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uncalled for. And Loebl didn't really make any real reply to this speech of mine. Finally, Loebl went back to Czechoslovakia to see whether he could get approval of the kind of tentative agreement that we'd worked out. Loebl then disappeared, and nobody knew what had happened to him. Years later I was in Austria talking to the permanent Under Secretary of the Austrian Foreign office and mentioned this episode with Loebl, because he had just returned from Czechoslovakia on some negotiations. I told him about this previous negotiation that I had participated in, and he said, "Well, don't you know what happened to Loebl?"

And I said, "No."

And he said, "Well, let me give you a book." It was entitled , The Slansky Process. It was a book in German written by Loebl. This must have been in 1970, I guess, and it had been written by him just a year or two before. He had been arrested immediately after he got back from this negotiation with me, and he was put into jail in Czechoslovakia and tortured. In order to escape from the torture, he finally denounced Rudolf Slansky, who was one of the leading people in the Czech Communist Party. This trial then took place, and resulted in the decimation of the old time members of the Communist Party in Czechoslovakia and led really to Russian

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domination over the Czech Communist Party. During the days of Dubcek, Loebl was released from jail, and then he wrote the history of his arrest and of his torture and how it came about that he had incorrectly denounced Slansky.

When Loebl had gotten back from this negotiation with us in the State Department, he'd been arrested and put into jail. There were three accusations against him. One of them was that he'd acted in a manner unfriendly to the U.S.S.R. with relationship to the aid which Russia had promised Czechoslovakia when the Russians pressured Czechoslovakia not to participate in the Marshall plan. The Russians had told the Czechs that if they turned down the Marshall plan participation, the Russians would give them the equivalent amount of aid. And he was the person who had gone to Moscow to negotiate this and had refused to accept the inadequate aid that the Russians were prepared to make available. That caused a real flap between Czechoslovakia and the Russians. And this was one of the accusations, that he was basically unfriendly to the Russians. The second accusation was that he had not defended the Communist position adequately in his negotiations with me. I forget what the third accusation was against him, but this is an absolutely

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fascinating book that Loebl writes about the history of all these events and how he happened to be ground up in this meat grinder of these relations in Eastern Europe.

Loebl had been one of the early members of the Czech Communist Party and was a devoted Communist. And even after this experience, he continues to be a dedicated Communist. He ends up this book by asking whether these horrors that took place in Russia during the Stalin period were essential or not essential to the Communist vision of the world and comes to the conclusion that they were not essential, that they were an aberration due to Stalin's peculiar personality; they did not need to have happened. So, he continues his faith in the Communist idea despite the horrors he had gone through.*

MCKINZIE: How was the settlement ever achieved? Did you follow that through?

NITZE: We never did settle it. My recollection is that we never did return the gold or release the plant, although I may be wrong about that. I just don't remember that we did settle it.

MCKINZIE: Did you consider going into the Marshall plan organization?

*NOTE: Loebl emigrated to the United States in 1968.

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NITZE: No, I was never asked to I think in part because of these difficulties that Paul Hoffman and I had run into about the office building, the personnel charts, and the size of his organization, which finally exceeded anything that we had contemplated as being necessary. For six months, there was some degree of coldness between us as a result of that.

MCKINZ IE: Did you know Averell Harriman?

NITZE: Oh, I'd known Averell from my days in Wall Street. He and I'd worked together on various transactions during those days, and I saw Averell again in 1940 when I first came down to Washington. He was in Washington working with the War Production Board in those early days. So, I'd seen Averell all during his various roles of one kind or another.

MCKINZIE: Do you recall how that structure came about whereby there was what might be called "military field authority" for Harriman's office in Paris? He really was just given a mission and didn't have those kinds of reporting responsibilities that the State Department, at least, usually placed upon its operatives.

NITZE: I don't remember that. I used to go over and see Averell often when he was in that Paris office. It was

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a lovely office that he had near the Place Vendome.

Well, that rather concludes my recollections of the Marshall plan, but maybe that might lead to another important matter that has to do with the German economy. The principle problem in Germany was really the problem of inflation. Bill Draper was, I guess, Deputy Secretary of the Army, and the Army was in command of the occupation. Bill Draper interested himself very deeply in the questions of the German economy. There was a host of facets to this question of how one could get the GARIOA [Government Aid and Relief in Occupied Areas] expenses off our necks. So I worked very closely with Bill in trying to meet these German problems. Bill and I finally came to the conclusion that the most important question was that of currency reform. Bill and I worked out that reform of the German currency, and Bill was the one who put the actual horsepower into getting it done. But I was the person in the State Department who worked with him on it and encouraged him to do it. After the success of the German currency reform, I proposed to Bill that we try to work out the same thing in Japan, because we had a similar problem in Japan. Then the question was who was to get to help us do that thing in detail. We chose a fellow by the name of [Joseph] Dodge to go to Japan and try to work out the

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Japanese currency reform on the pattern of the German currency reform. That worked out much better than any of us had expected in fact, too well for the health of the American economy. Japan then turned out to be an excessive competitor. But those two currency reform operations were of very great significance, I would think.

MCKINZIE: It was almost essential that that happened in Germany, was it not, before Germany could really become a participant in the Marshall plan?

NITZE: Well, it was the turning point, the German currency reform.

MCKINZIE: At that time, did you anticipate that the Soviets would simply reject it for the Eastern Zone? Was it envisioned simply that it was ultimately going to be for the three western zones?

NITZE: Well, the problem was complicated by the situation in Berlin. There, that problem was made extremely difficult by Harry Dexter White and the Treasury Department. Harry Dexter White ordered that the plates for the printing of occupation currency be turned over to the Russians, and so the Russians printed unlimited quantities of occupational currency in the Berlin area,

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all of which occupation currency was convertible into U.S. dollars. So, this was a wide open hole in our currency arrangements. When in desperation we made all those occupation dollars unconvertible into U.S. dollars, that's what brought about the first Berlin blockade. And that in turn led to the 1949 Palais Rose conference, because after the airlift the Russians finally agreed to raise the blockade of Berlin, provided that we would agree to a foreign ministers conference. At that point I was working with Deputy Assistant Secretary of State for Economic Affairs, George Kennan, in the Policy Planning Staff. George and I tried to figure what it was that the Russians had in mind for a foreign ministers conference which was so important that they would make it a condition of the lifting of the Berlin blockade. What we thought they might have in mind was a proposal to withdraw their troops from Germany if we would withdraw ours from Europe. The question at issue was whether this would be a good thing or a bad thing from the standpoint of world relations, the security of the West, and so forth and so on. We finally came to the conclusion that perhaps it would be a good thing, provided we could maintain a port at Bremen so that we could have access in case the Russians reintroduced troops into Eastern Europe or into the

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eastern portion of Germany.

So, we worked out plan A and plan B, for either a very radical proposal by the Russians or a less radical proposal by the Russians, and we took these two plans up with Chip Bohlen, who was then kind of the Russian expert in the State Department. Chip said that the whole idea was preposterous, that the Russians would never think of proposing a withdrawal of troops from Germany. So, we then took this up with Dean Acheson, and Acheson thought that Bohlen was probably right and that George and I were wrong about this. So the plan A and plan B were put on the back burner, and we went to this conference in Paris at the Palais Rose without either of these plans being approved. But Acheson suggested to Chip that he have lunch with General V.I. Chuikov, who was one of the Russian high commissioners in Germany, and kind of explore with Chuikov and find out what he could about the Russian position. So, on the very first day Bohlen had lunch with him, Chuikov volunteered that all thoughts of a withdrawal of Russian forces from Eastern Germany were pure poppycock. He said, "The East Germans hate us. It is necessary that we maintain forces in Germany, and it's necessary that you maintain yours." So, that was the end of plan A and plan B.

MCKINZIE: How did you happen to come to join the Policy

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Planning Staff?

NITZE: Well, as I mentioned before, when the Policy Planning Staff was created and George Kennan was asked to head it up, he'd asked me whether I would come and be his deputy. Acheson had vetoed that suggestion. Then when Acheson left the State Department in 1947 [June 30] I became deeply involved in the Marshall Plan and other economic problems, including the Palais Rose Conference, over the next two years. It wasn't until August 1949 after Acheson returned as Secretary of State [January 1949] that I became George's deputy on the Policy Planning Staff. By that time, Acheson had decided that I was not just a Wall Street operator, but might have soma contribution to make.

MCKINZIE: Much of the work of the Policy Planning Staff, as I understand it, while Kennan was still there, concerned itself with Germany.

NITZE: That's correct. Much of it did, although it concerned itself with a lot of different issues. One of the first papers that George worked on was policy vis a-vis the Soviet union. As I remember it, that was NSC 20/4, which was a very thoughtfully prepared document. George also interested himself in the Japanese peace treaty; he did the original work on the ideas for the

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peace treaty. He also interested himself in the problems of Latin America, but he was not sympathetic to Latin America. He felt there was really no community of spirit between the U.S. and Latin America, which had its basic psychological background in Catholicism, Spanish and Portuguese varieties of Catholicism. The concept of the common law and the concepts of the broader range of Western culture were not indigenous to Latin America. And he felt that the spiritual differences between the United States (and the major stream of Western civilization) and Latin America was so deep that it would be hard to work out a real community, not just of interest, but of an approach to life in the world, with Latin America. He wrote a report along those lines after having gone down to Latin American in 1950, I guess it was, which Dean did not find helpful; he found it too negative.

MCKINZIE: Did you talk to George Kennan about that issue? You had quite a bit of knowledge about the area because of your earlier work.

NITZE: Well, George had a particular way of operating the Policy Planning Staff. He was wholly frank in what he said to his associates on the Policy Planning Staff, and he was very much interested in any ideas that any of us

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would propound. But after the discussion had gotten to a point where he felt that he had gotten out of all of us everything that we had to contribute, he would then go off with his secretary to a little office he had in the Library of Congress. There he would draft, undisturbed by anybody, and he would come forward with a report which was beautifully written. George had a marvelous talent with the English language. In fact, he is a great poet, I believe; he writes beautiful poetry. And having once taken the individual pain and effort to write a report of this kind, on which he'd done a great deal of individual research and taped all the ideas of the rest of the staff, he kind of felt that this was locked in concrete; it was the best that he could do. These reports were always interesting, full of insights, and beautifully written. And having once prepared this, he didn't want to tinker with it. He felt that tinkering with it would compromise it; it would lose its essence, would lose its inner worth. Then he would turn that over to the Secretary, and then it was up to the Secretary to either agree or disagree with what was in the report. But he'd done his best and that best was very good. But he didn't really like a team effort of which he was just a member of the team. He liked to have the thing end up with something which was pure

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George Kennan, not a compromise with somebody else's viewpoints.

MCKINZ IE: Well, what did that do to morale on the Policy Planning Staff? Didn't that bother you?

NITZE: Well, it didn't bother me, because, by and large, I got along very well with George and thought very well of him. Our ideas were not that different, but when they were different, I had no hesitations in writing a dissenting report or taking exception of those parts that I disagreed with. The real difficulty arose when Acheson would side with me, as opposed to George; that made life difficult for George. I guess the crucial difference arose after the Russians exploded their first nuclear device in 1949. George had been working hard on the questions of the control of the atom and in working out the various amendments to our agreement with the UK, which were necessary because of changes in congressional attitudes toward nuclear matters.

The question was one of, how do you react to the dual events of the Russians having exploded a nuclear device and simultaneously, not the loss of China to the Communists, but Chinese Communist consolidation of their control of the mainland? On this particular issue, I thought it was necessary for us to not only move forward

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more vigorously in the nuclear field ourselves but also to substantially increase our conventional forces. George was very leery of any increase in the U.S. military components. He rather had the view that two high quality Marine divisions were about what was necessary in order to support the policy of containment; this did not seem realistic to me, nor did it seem realistic to Dean Acheson. So, George felt kind of isolated between Dean Acheson above him and I below him taking a different view from his view. I think that's what caused George to resign from the Policy Planning Staff.

MCKINZIE: Could you talk a little bit about the relation of the Policy Planning Staff with the rest of the Department? In his memoirs, George Kennan says that one of the things that made it exciting work was the fact that you didn't have to take your proposals through assistant secretaries, through the divisions, and through all those country desks and have everyone muck over your work that it was a direct line to the Secretary. He implies that, at some point in 1949, something did get bucked to the European Division and that he was beginning to feel that he was just one more of the line of components.

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NITZE: Well, I forget what that was worrying him at the time, but it is perfectly true that in his method of work it was essential that his product be his product and go straight to the Secretary and not be compromised with anybody, either other members of the Policy Planning Staff or the Bureaus. My view of it was that the important thing was to move foreign policy from where it was to where it ought to be. If it was necessary to work with the Bureau, work with the army, work with the Pentagon, work with the Treasury Department, or work with whomever was involved, that was what was necessary if you want to move this ball. So there were two different conceptions of how you operate in the executive branch.

MCKINZIE: When he was still with the staff, did many of the people in the European Division come in to give opinions on questions. Were they sought out?

NITZE: When you say "sought out," I'm not sure that is the right word; they were consulted, but their views were not necessarily taken very seriously. I must say that when I was running the Policy Planning Staff, maybe the same could be said. I remember, for instance, when [Mohammed] Mossadegh nationalized the oil fields in Iran. This was clearly a responsibility of the Middle

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East Bureau. The people in the Middle East Bureau had a view of the Iranians which may have been perfectly sound from a historical standpoint; they didn't think they were people you could deal with at all. And my view was that this was far too important for the whole economy of the West to just write off that way and say that there's nothing we can do about it, to throw up your hands in agony, and be without ideas as to what ought to be done.

So by virtue of the fact that the Middle East boys didn't really address themselves to the problem, I came to the conclusion that we in the Policy Planning Staff had to, and we did. I forget when George McGhee became Assistant Secretary for Middle Eastern Affairs; I think it was after the initial nationalization. But after he became assistant secretary, obviously he was deeply interested in the problem. So then there wasn't that problem of having nobody you could work with; George you could work with. But the arrangement with George was that George would handle the relations with Iran from the standpoint of trying to maintain as favorable a relationship with Mossadegh as possible; everything that was nasty and unacceptable to Mossadegh would have to be said by me. It worked very well indeed. It meant that the tough work had to be done by us in the Policy Planning Staff, and we did it, but the negotiations were

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formally conducted by George.

MCKINZIE: How was it that Acheson, who had recommended against your membership in the Policy Planning Staff in the first place, then appointed you as chairman when Kennan decided to resign?

NITZE: I think he felt that some of the problem that had caused George to resign was the fact that he had sided with me as opposed to George. He'd come to rely somewhat on my judgment, so that by that time my working relationship with Dean was actually first class. All this prior period had been forgotten.

MCKINZIE: Did you have any different ideas about how the Policy Planning Staff should operate and how far you should project whether you should take up problems as the secretary doled them out or should have a free hand on issues which you thought needed delving into?

NITZE: Well, my view was that the almost universal tendency of governments is to put excessive attention on today's aspects of a problem and too little attention as to the long range implications of today's decisions. But there really wasn't much use trying to think through in advance what decisions might be wise if a contingency arose in the future. What was important was to have

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injected into today's decisions real consideration for their long range implication. Now, if you were going to do that, it seemed to me that the head of the Policy Planning Staff had to be intimately attuned to all the day to day decisions, and to know exactly what it was the Secretary and the President were deciding and why. The members of the staff should devote themselves to thinking about long range problems in the various areas of interest economics, German relations, Berlin problems, atomic problems, this, that, and the other thing.

It was trying to achieve this nexus between the long range implications of today's decisions and thinking about the long range which was the essential task that was needed of the Policy Planning Staff. So most of my time was devoted to being with Dean Acheson. I met with him every morning and several times during the day. And he was perfectly prepared to be wholly frank with me as to what it was he was about and why, what he'd said to the President, and what the President had said to him. So, I kept wholly informed as to what was going on in his mind, and I tried to keep him wholly informed as to what was going on in the mind of the Policy Planning Staff. So we did have this meeting between the longer range consideration and the day to

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day decisions.

Now, many people took exceptions to this. I knew that Scotty Reston felt that I had corrupted the Policy Planning Staff by getting it too deeply involved in day-to day decisions. I thought Scotty was just dead wrong about this; this was a deep difference of viewpoint between Scotty and me. I think it worked; it worked very well indeed. The result of that was that Mr. Truman had no hidden balls from Mr. Acheson, and Mr. Acheson had no hidden balls from Mr. Truman. So, I think everybody in the inner circles of the executive branch realized that when Mr. Acheson said something, the chances were at least 95 percent that he had already discussed this with Mr. Truman and that if they were going to appeal this decision to Mr. Truman, Mr. Truman would side with Mr. Acheson on the issue. They also came to realize when I said something, I had 99 percent of the time discussed it already with Mr. Acheson and that this was probably pretty close to what Mr. Truman would decide if it appealed to him. So one could be really very effective, for instance, in negotiating with the Treasury Department, the Joint Chiefs of Staff, or the Defense Department, because they felt I was informed and, therefore, to be taken seriously. It was possible to take a good portion of the burden off of Mr. Acheson,

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so that he'd just have to be informed rather than having to do it himself. There were a lot of things you could do that wouldn't have been possible if that hadn't been the basic relationship.

MCKINZIE: Well, this must have then brought the Policy Planning Staff into the consideration of all of those crises which erupted so quickly in 1949 and 1950 the problems with China, the Russian bomb, and then, of course, the outbreak of the war in Korea.

NITZE: This was exactly the case, yes. I think we were deeply involved in all of those issues. But we'd rather gotten ahead of ourselves. For instance, we haven't discussed Mr. Truman's speech announcing Point IV. That, as I remember it, was his inaugural address in '49. The background of that really was a visit that I received from General [George A.] Lincoln, who had been head of the International Section of the Operations and Plans Division of the Army during the war and who was then working for General Draper in the Department of the Army. I was then in the economic side; I guess I was then Deputy Assistant Secretary for Economic Affairs. Abe Lincoln came over to see me and was extremely rude; he denounced the State Department and denounced me, in particular, for gross omission of things we should have

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done. He said that we were biased and that I, in particular, was biased in favor of Europe and had ignored the Far East. Here we had cooked up this Marshall plan for Europe, and we had done nothing about the economic situation in the Far East; and the Far East was the place where the real dangers were. And we were totally inadequate representatives of the U.S. Government and I, in particular, was a dreadful person.

I was absolutely incensed by this and called up Bill Draper and said that General Lincoln must apologize to me or I would never speak to General Lincoln again, nor would I speak to Bill Draper again. Bill called General Lincoln, and General Lincoln did apologize. But it seemed to me that there wouldn't be that much on General Lincoln's part unless something was irking him; we had better look at this problem of our economic relations to the Far East again. But it seemed to me wholly out of the question that anything like the Marshall plan would be appropriate to the Far East. We did have the problem with Japan, but we had been working on that in the Japanese currency reform, and a lot of other things were flowing from that. There was nothing that kind of pulled together the other things, and maybe there were soma tools which were lacking. It occurred to me that the boys working in the Latin American field

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had developed what were called the Servicios. The whole theory of the Servicios was that, without impinging in any way on the sovereign decisions of the host country, it was possible to give assistance in the technical field, whether it be agriculture or financial matters or what. Perhaps this technique of the Servicios, which was limited by law to Latin America, should be extended to the countries of the Far East. I went over to the Bureau of the Budget to get an authorization and appropriations request for the same kind of thing that we had in Latin America for the Far East. The Bureau of the Budget sent this issue up to the President, and I guess, to Charlie Murphy and Clark Clifford.

So they sent this up for Clark's opinion and he decided that, hell, this was a great idea. They were looking for a Point IV, and so he dressed up this Servicio idea into Point IV and sent it back to the State Department for the State Department's opinion on this. The issue was referred to Chip Bohlen and to me. Chip and I surveyed this, and I said, "Well in part, this springs from an idea that I'd borrowed from Latin American boys, but the way this is being dressed up is totally improper. To make this one of the four big points in an inaugural address is to really boast politically about something which is going to take a

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long time to do and which has to be built step by step. This is just not the way to do something." And Chip agreed with me on this, so we drafted a memorandum from the State Department to the White House taking a very dim view of Point IV. But Clark decided that this was necessary from the standpoint of that inaugural speech.

MCKINZ IE: Robert Lovett was brought into that someway, wasn't he?

NITZE: Well, I think Robert was the person that Chip and I reported to. It was Robert that signed the memorandum taking a dim view, as I remember it. But this was overruled and it went into the speech. And as I remember it, Willard Thorp was more in favor of it than Chip or I had been. Then the task arose of trying to really translate this into a program.

MCKINZIE: How'd you do that? Somebody told me that probably you were the person who had to go find out what they meant by it.

NITZE: I forget who was appointed to head that thing originally. I did do a lot of work with whomever that fellow was.

MCKINZIE: Well, there was a man named Capus [Miller] Waynick who came in as Ambassador of Honduras or someplace like

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that. He did a lot of early planning work on it.

NITZE: But there were some very good technical fellows involved in that staff that I worked with. And we had an argument again as to ends and means, as to whether technological assistance just for the sake of technological assistance was the end objective, or whether this was part of our foreign policy and should be geared into the other aspects of foreign policy. It was my view that this was a tool of foreign policy, not an independent objective. But those who thought it was an independent objective could point to Point IV in the inaugural address, in which it was made an independent objective like European integration. In some people's minds, it became an independent objective rather than being a tool toward other objectives.

MCKINZIE: Didn't it also get sort of bogged down in theory of development? Could development take place more rapidly through the massive injection of capital in which technological skills would accompany the use of that capital, or did you have to build a kind of technological infrastructure before you could inject capital and make it work? I seem to hear people talking about this difference of opinion.

NITZE: I don't remember that being a very important issue,

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because in certain countries it was reasonably clear that they couldn't use large injections of capital and that they did need prior injection of technological skills to be able to use it at all. In other countries it was perfectly clear that capital was the limiting factor, so it all depended upon which country you were talking about and what the particular field was that you were talking about. So, I didn't think it was an issue of any importance as an issue of principle. It all depended upon the context, as to which side was up and which side was down.

MCKINZIE: Well, it took Point IV a very long time to get off the ground. In fact, I don't think there was an appropriation for it until the spring of 1950, over a year after the thing was proposed in the inaugural address. How far along did you follow that?

NITZE: Well, as I remember, the beginning of this was when I was still over in the economic side of the Department; the initial episode, when the speech was being drafted and so forth, was still in '48. I think it was just about that time that I moved over to the Policy Planning Staff and got involved in other matters, so that I didn't really follow it intensely thereafter.

Let me see if there were any other episodes during

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that period we're talking about, the period of '46, '47, '48, primarily. Clearly, one of the most dramatic episodes was the Greek Turkish aid program. That, in my mind was the turning point of U.S. policy, the Greek Turkish aid program. Up to that point, Dean Acheson had been, in a way, the most articulate man and almost the ringleader of the point of view which dominated policy from the end of the war till the spring of 1947. That was that England could be looked to maintain the balance of power, at least in Western Europe, and could be looked to maintain the balance of power in the Middle East and out through South Asia to Southeast Asia.

The U.N. was the important body which would deal with the East West confrontation and the major issues which arose, and the subordinate bodies of the U.N., including the Bretton Woods agreement institutions, would handle the basic economic affairs. And the United States could withdraw to a role similar to the role that it had held prior to world War II. And that view was not the view of Jim Forrestal; it wasn't really George Kennan's view; nor was it really Will Clayton's view; but we were in the minority. The majority view was that the United States shouldn't be that active; we should leave it to the U.N., to the UK, so forth and so on, and to the international organizations. I think Dean

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Acheson's conversion to the minority view, which then became the majority view, was as a result of the Greek problem. This indicated the incapacity of the UK to carry as large a role as the majority view had assumed that she would be able to carry. It indicated that the East West confrontation was of a more serious nature than could be handled just by the U. N. The U. N. couldn't deal with this; the members of the U.N. had to deal with it, not the U. N. as an organization. No one other than the U.S. was in a position, really, to do what was necessary in order to reverse that Greek-Turkish situation. And Dean clearly saw those points.

I guess Loy Henderson was the fellow who was really seized of the Greek Turkish problem, but Loy had been on that side before. The thing that really changed was when Dean came around to that position. And at least it was my impression that Mr. Truman was disposed to question that kind of majority view earlier than that, but that this Greek Turkish problem was the thing that finally reinforced his normal fighting spirit, so that he got thoroughly behind this. So when Mr. Truman and Mr. Acheson supported that viewpoint, the whole atmosphere in Washington changed overnight. I hadn't been in on the beginnings of the Greek Turkish crisis because it was a political problem; people in the

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political side of the Department were seized of it. When it was decided that something had to be done about it and we were discussing the Greek Turkish aid program and the Truman Doctrine, then I was called in to work on the economic part of the program.

I remember going to the first meeting that I was invited to with Acheson, Loy Henderson, and the others and being thoroughly briefed on what they had in mind and what they wanted us on the economic side of the Department to do. I went back to what was called the "E" area, where all the economic people were, and called a meeting of all hands. I reported on this Greek-Turkish problem, what we had to do next and what we had to work on. I think that fully 90 percent of the people in the "E" area were wholly opposed to the Greek Turkish aid program. I think at least 90 percent of them were.

MCKINZIE: For heaven's sakes, on what grounds?

NITZE: Well, on the grounds that they were behind the Bretton Woods institutions, the U. N. institutions the majority view. Then suddenly the minority view, which they took a dim view of, becomes the majority view, and they were all horrified; not all of them, but I think 90 percent of them were. This really was a revolutionary thought in Washington. Then after the Greek Turkish aid

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program I forget what month that was; it must have been March '47 everything went terribly fast. A lot of things had been in the works, but it really didn't get underway until the stimulus of this switch from a minority to a majority view that the United States really had to do something.

MCKINZIE: Did you go to Greece?

NITZE: No, I didn't. Remember, that Greek Turkish aid program didn't work very well. In fact, my recollection is that only a year and a half after we started on the Greek Turkish aid program, this situation with Greece was worse than it had ever been. If you looked at the maps indicating what sections were in black, indicating that it was under control of the Greek Government, and red, that the guerillas were in control, most of it was red. I think there were 500,000 refugees in Salonika or something like that.

MCKINZIE: There were a lot. I guess it wasn't really until [Josip Broz] Tito quit giving sanctuary to the rebels that the situation improved.

NITZE: That's right. Dean proposed that we in the Policy Planning Staff address the problem of what coordinate policies might be available in the event of the collapse

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of Greece which meant, really, the isolation of Turkey. We worked hard on that problem and finally came to the conclusion that there really wasn't any good alternative, that this was terribly serious. It was after that look at it that it was decided to send General Van Fleet there. General Van Fleet did begin to turn the thing around; it was doing better. But you're quite right that it was Tito's change of mind, Tito's irritation with Moscow, that put the kabosh on the support for the guerillas from Yugoslavia. That's what turned it around overnight. But there was a long period there when it looked very grim indeed.

I guess it was during that same time period also that we had these difficulties with Trieste. Bob Joyce was the member of the Policy Planning Staff who was particularly seized of the Trieste problem. He had been consul in Trieste at one time and knew the area well. He was the one who worked primarily on all those questions of zone A and zone B and so forth and so on. But then, after Tito's rupture with Moscow, the question arose as to whether Moscow might invade Yugoslavia. I called up the boys at the CIA [Central Intelligence Agency] and asked them to give us some estimation on this. They gave us a report in which they said it was possible that Moscow might invade Yugoslavia. I called

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in Sherman Kent, who was then running the Nation Board of Estimates, and told Sherman that “it was possible that wasn’t good enough.” We had to make up our minds in the Policy Planning Staff as to whether we would recommend to Mr. Acheson and whether he would recommend to Mr. Truman that we increase our stockpiles of military equipment in Italy, in order to be able to support Tito with military equipment in the event he was attacked by Moscow. We didn’t really think that ought to be done unless the prospect of Moscow attacking Yugoslavia was of a certain probability. And what probabilities did they think an attack by Moscow would be? Sherman Kent said, “Well, you see, I don’t do that sort of thing.” They avoided attaching percentages to adjectives and adverbs of that kind.

I said, “Well, you know, we’ve got to make a decision, and so I’ll tell you what I’ll do. I’ll tell you what I think the percentage chance is; I think the percentage chance is about twenty percent. I’ll tell you further that if I’m right it’s about twenty percent, then our recommendation to Mr. Acheson will be that we not build up the military supplies in Italy. It is a very expensive thing to do, and on a twenty percent chance we don’t think it ought to be done. Now, since you’ve got from me that way in interpret your report, you

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tell me whether I am high or low. And if you don’t tell me anything, why, I’ll consider that you haven’t got any better judgment than I have; that it’s about twenty percent.” Sherman Kent went back horrified by this. I think a year or two later he wrote a deep think tank piece for the CIA on the question as to whether they should or should not give percentages when they gave estimates as to probabilities.

MCKENZIE: But in the interim, your judgment stood.

NITZE: In the interim, it stood. In fact, there were a number of occasions on which one had to use that technique. I remember when we were working on NSC-68. There was a question as to how effective our aid defenses would be against a Soviet Bomber attack in the event of nuclear war with the Soviet Union. Nobody in the Pentagon was prepared to give an estimate as to what percentage of the Soviet bombers attacking the United States would be shot down by our aid defenses. So I finally said, “Well, I’ll tell you what I think is the number; I think it’s fifteen percent. Now, tell me whether that’s high or low.” The Pentagon when into complete shock, and then never came back with any better figures, so that’s what the estimate was that we used.

I always found it important to be as precise as you

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could be about things, granted that one knew that there wasn't evidence on which one could be precise. But you can't make decisions unless you make a judgment as to what is the range of the best numbers. Maybe you'll know that it's wrong by a factor or two each way that it's either thirty percent or seven and a half percent, but it isn't fifteen percent; it is in that range. Well, that's quite different than if it were in the range of fifty to seventy five percent, quite a different kind of a thing. You make decisions differently, even though there are uncertainties as to how precise this is. You hope that they revolve around this kind of a magnitude rather than that kind of a magnitude. But you've got to put magnitude into things. I think this was one of the differences I had with George, because George wouldn't do that with respect to the military forces necessary to support a policy of containment.

MCKINZIE: As I recall in some of his books, he talks about his belief in sheer economics, that economic development had a certain power into itself, someway, that you didn't need military contingents what you called in those days, "a protective umbrella" and the more the build ups came, the more unhappy he apparently became.

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NITZE: That's quite right. well, I guess we've got to stop here.

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