The Chairman

by Kai Bird

  As 1940 came to a close, the secretary and his newly appointed special assistant already felt at war. Lying ahead was the first major battle: Lend-Lease.

  The day after his fireside chat, the president asked Henry Morgenthau to draft a Lend-Lease bill. Roosevelt sensed that the moment had arrived to obtain blanket authority from Congress to produce weapons necessary for the defense of America, Britain, and any of her allies. He wanted the authority up front, and told Morgenthau, “. . . no R.F.C. [Reconstruction Finance Corporation], no monkey business . . . no corporations . . . We don’t want to fool the public, we want to do this thing right out and out.”26

  Over the next few weeks, McCloy made himself invaluable to both Morgenthau and Stimson in the Lend-Lease fight, rewriting testimony, lobbying, and keeping them informed of who was saying what on Capitol Hill. Everyone realized that there would be strong opposition. Senator Robert Taft was ridiculing the idea that one could “lend” military hardware; he said it was like chewing gum: “Once it had been used, you didn’t want it back.”27 McCloy wrote Stimson’s testimony for his appearance before the House Foreign Relations Committee, and sat next to him at the witness table during the four-hour ordeal.

  When the Senate threatened to water down the president’s basic control over Lend-Lease, McCloy used his “yellow-padding” skills to rewrite the measure. The new language turned the amendment on its head: instead of Congress’s having to approve the disposal of each batch of defense supplies overseas, the president could make those decisions on his own—unless Congress imposed a specific restriction. The key figure in the Senate on this issue, Senator James F. Byrnes of South Carolina, accepted this language grudgingly, and agreed that McCloy should spend the rest of the week on the Hill answering “any questions of a technical character.”28

  McCloy set up a cot in the offices of the Senate Foreign Relations Committee so he could be on hand at any hour. Over the next couple of days, he worked with Byrnes to fend off any other amendments to the bill. At one point in the debate, as Byrnes stood in the Senate chamber, he signaled to McCloy to join him. Only senators are allowed a seat in the Senate chamber, so McCloy had stationed himself nearby, in a section reserved for the page boys. For the remainder of the debate, reporters in the press gallery were amused at the spectacle of the balding lawyer popping up from his page-boy pew to whisper suggestions into the ear of the distinguished senator from South Carolina.

  All but one amendment was voted down by 10:00 P.M. on Friday, March 7, and on that one McCloy quickly drafted alternative language so diluting the amendment that Stimson called it harmless. The next morning, Washington woke up to the heaviest snowfall in years. The Senate nevertheless met and finally passed Lend-Lease by a margin of sixty to thirty-one. The same day, Senator Pat Harrison of Mississippi called on Stimson, who recounted in his diary, “He wanted to know who the very useful and energetic man was that I had sent up to the Senate to help them on the Lease and Lend Bill and then I told him the history of John McCloy. I found thus that he [McCloy] had made his usual impression on his new job in the Senate.”29

  Both Stimson and McCloy considered Lend-Lease an important precedent, a victory for everyone who believed the modern presidency should possess powers commensurate with America’s new role as a global power. Influenced by his peers in the Century Group and the Council on Foreign Relations, McCloy felt the time had come for the United States to replace Great Britain as the world’s foremost power. Through Lend-Lease, the White House acquired the kind of broad executive powers normally exercised only during war. McCloy and others in the Roosevelt administration justified such sweeping powers on grounds of national security. Congress, they argued, could not quickly carry out the day-to-day decisions necessary to defend the country’s security. The president could always report to Congress on what had been done, but, in order to achieve the objectives of Lend-Lease, the chief executive had to be able to plan and redirect large resources within the domestic economy. All this constituted an extraordinary grant of power to the Executive.30 Lend-Lease was only the beginning. Soon the umbrella of national security would justify the construction of a powerful national-security bureaucracy.

  On a personal level, the Lend-Lease battle won McCloy important contacts on Capitol Hill; he was now a familiar figure to dozens of congressmen and senators. Stimson began to use him to explain War Department actions to the key congressional leaders, and before long the Washington press corps recognized him as an authoritative source of news out of the War Department. Eugene Meyer, the publisher of the Washington Post, made it a habit to drop by McCloy’s office as often as twice a month for an off-the-record chat on the war. With a man like Meyer, McCloy could be blunt about stories he would rather not see in print. In return, what the Post publisher learned from McCloy “was enormously helpful in guiding the Post’s general policies,” according to Meyer’s biographer.31

  As a rule, McCloy didn’t like dealing with the press, and he wasn’t so expert at using them as men like Harold Ickes, Henry Morgenthau, or Tommy “The Cork” Corcoran, the consummate New Dealer and influential Washington lawyer. But on a one-on-one basis he established a rapport with a few reporters working for the best papers. In 1941, James Reston returned from The New York Times ’London bureau and moved into a Georgetown house across the street from McCloy. Soon it became clear that McCloy was a frequent, though unnamed, source in Reston’s stories. Joe Alsop was another reporter McCloy counted as a friend. “If you lived in Washington,” McCloy recalled, “he tried to pump you all the time by inviting you to dinner. Anyone who was doing any [war] planning had someone on a newspaper as an ally, to leak.”32

  Drew Pearson was one columnist McCloy came to avoid. He thought Pearson a “blackmailer” who would routinely “call you up and threaten to publish a document unless you talked to him.”33 Walter Lippmann was a different matter. McCloy did not always agree with the senior columnist’s views, but he trusted him enough to pass him Army G-2 intelligence reports.34 They corresponded frequently, and Lippmann was careful to respect McCloy’s wish not to be cited as a source in his columns. Arthur Krock was another reporter who cultivated McCloy, though their relationship cooled in early 1941, when Justice Frankfurter warned McCloy that the acerbic New York Times bureau chief was hostile to the administration.

  Frankfurter was a constant and powerful influence on McCloy and, for that matter, Ellen. The justice always made a point of cultivating the wives of his numerous contacts. One evening in 1941, when Joe Rauh’s wife observed that she hadn’t heard from Frankfurter for some time, Ben Cohen, one of FDR’s braintrusters, remarked, “Well, I guess it’s Mrs. McCloy now.”35

  Since the Frankfurters lived around the corner from the McCloys’ Georgetown home, the two couples frequently invited each other over for dinner. Their wives were shopping companions about town; in the evenings, the two men regularly took walks together around Georgetown, discussing the day’s events. Frankfurter wrote McCloy brief notes and on occasion lengthy memos on everything from administration appointments to comments on the European war. Stimson encouraged these visits with the justice, visits he labeled to the “caves of Abullum,” as a means of keeping himself abreast of thinking among inner-circle New Dealers.36 As a result, McCloy became Frankfurter’s eyes and ears within the War Department.

  Throughout the first half of 1941, McCloy used his influence to put the country on a war footing. He became a fervent advocate of air power, and tried to convince Chief of Staff General Marshall that the air weapon had been misused during the last war. He and Lovett fought to win the Army Air Corps a good measure of autonomy, if not actual independence. For the moment, Marshall blocked this move. But they did persuade the president to expand production of heavy bombers—only nine were scheduled for delivery in June 1941—to some five hundred a month.37

  McCloy and Lovett worked well together, though they constantly teased each other and openly competed for Stimson’s affections. One day Lovett walked into Stimson’s
office and interrupted “the Colonel,” who promptly roared at him to get back to his own work. Out in the hallway, he bumped into McCloy and mischievously told him, “Stimson wants to see you right away.”38 But McCloy was now close enough to “Stimmie” to be able to respond in kind to the elder man’s fits of temper. Once, when Stimson called from the White House and shouted over the phone, “Where are my goddam papers?,” McCloy coolly replied, “I haven’t got your goddam papers,” and hung up.39

  Stimson’s style was to find reliable men to whom he could delegate enormous authority, men whose “zealous omniscience” for detail would allow him the time to concentrate on larger policy issues. In McCloy and Lovett, his “heavenly twain,” Stimson had found the men he needed.40 He decided to promote both to positions as assistant secretaries. On April 22, 1941, they were sworn into office. The next day, in the Washington Post, Leon Pearson, the columnist Drew Pearson’s brother, noted that McCloy had initially been hired to investigate German sabotage, and reported, “He believes present-day German sabotage has much more finesse than the sabotage of World War I. Instead of blowing up munitions arsenals . . . the Germans are using ‘more ingenious devices of destruction.’ McCloy declines to be very specific about this, but he intimates that the corruption of labor leaders and the strengthening of the Communist hand are part of the new pattern.”41

  McCloy was still obsessed with the sabotage issue. Throughout early 1941, he was forever passing on to army intelligence rumors about various suspected saboteurs and their possible connection to a rash of strikes in American defense factories. One Saturday at the end of April, he visited J. Edgar Hoover and told the FBI director there might be “foreign money, either Nazi or Communist,” behind the strikes. Hoover agreed, but said it was impossible to obtain evidence of this without employing extraordinary investigative methods, which were prohibited by the attorney general. Bringing up the Black Tom case, McCloy suggested that the only evidence of any use in the old sabotage cases came from either confessions or what he termed “second-story methods.” Hoover agreed “emphatically” and said that, if he could obtain the “authority to organize what he termed a ‘suicide squad,’ created exclusively for the purpose of seeking evidence of foreign stimulation of sabotage of any form, whether direct or indirect, he knew he could accomplish results.” McCloy endorsed the idea and said Stimson had already “gotten clearance” from both the president and Attorney General Robert Jackson that morning to see that the FBI was released from “certain restrictions.” McCloy said he was to meet with the attorney general on Monday to “get his confirmation” of this fact.42

  What they wanted from the attorney general was authorization for wiretapping. The law on this investigative practice had recently changed. Supreme Court decisions in 1937 and 1939 had led Attorney General Jackson to issue an order on March 15, 1940, prohibiting all FBI wiretapping. But two months later, the president told Jackson he thought the court “never intended” to prohibit wiretapping in “grave matters involving the defense of the nation.” Citing the danger of sabotage and fifth-column activities, he authorized Jackson “to secure information by listening devices” in cases involving “persons suspected of subversive activities . . . including spies.” Roosevelt emphasized, however, that wiretapping should be kept to “a minimum” and limited “insofar as possible to aliens.”43

  When McCloy and Undersecretary of War Robert P. Patterson saw Jackson late on Monday afternoon, they urged the formation of a special FBI unit to use wiretapping and other “second-story” tactics against strike leaders in munitions plants. McCloy used Hoover’s term “suicide squad” to describe the unit to Jackson. He argued that, to obtain results, agents “must be given the authority to use any methods, except personal violence. . . .”44 Jackson was not persuaded. And after the two men left, the more he thought about it, the angrier he got. The next day, he wrote a tough memorandum to the president, objecting in the most strenuous terms to the entire project. He reported that McCloy and Patterson “stated you had given a ‘green light’ to a proposition which seems to me extremely dangerous.” He argued that such “lawless methods” as McCloy was requesting, which he described as wiretapping, “stealing of evidence,” “breaking in to obtain evidence,” and “unlimited search and seizures,” would quickly become known, causing “bitter controversy” and “permanent” damage to the FBI.45

  Despite this broadside, McCloy did not change his mind. In a memo to Stimson, he defended his position and even went on the offensive against the attorney general. With Stimson’s approval, he sent Jackson a sharp letter asserting that it was “fanciful” to suppose that foreign agents were not behind the recent strikes. Not backing down an inch, he reiterated the necessity for such measures as the “interception of messages by mail, wire, etc.—methods, in short, without which both Mr. Hoover and Mr. Tamm [Assistant Director Edward Tamm] stated most explicitly to me before our talk, that the F.B.I. cannot obtain proof of foreign activity.”46

  Ten days later, Jackson replied in a letter that indicated that McCloy’s tough-minded pragmatism was beginning to wear the attorney general down. He defended himself by observing that he was trying to persuade congressional committees to legalize such investigatory practices. Regarding interception of the mails, Jackson said he had modified postal regulations so that suspected letters could be held “long enough to obtain a search warrant. . . .” He suggested that to resort now to means outside the law “would certainly prejudice our chance to get the many improvements in the law which I am seeking.” Still, having conceded this much to McCloy, Jackson ended with this warning: “. . . the unrestricted investigation methods you advocated could not be used with the type of young college men, mostly lawyers, who now compose the F.B.I. . . . Frankly, I would be afraid of any other kind of men. The man who today will rifle your desk for me, tomorrow will rifle mine for someone else.”47

  McCloy was stymied for the moment. But in the early summer of 1941, a wiretap bill came before Congress that would authorize most of what he wanted. Roosevelt, who had let his subordinates argue among themselves in the spring, now tacitly gave the bill his support. So did Jackson and Hoover, who on the evening before the congressional vote chose to announce the arrest of thirty-three German spies in New York.48

  The timing of Hoover’s spy roundup was intended to sway votes on Capitol Hill. For McCloy, the arrests were proof that he was not mistaken that there were espionage rings operating in America similar to those funded by the Germans in 1915–16. At least one member of the ring had been involved in sabotage operations during World War I.49

  It would become clear in the trial that the FBI was capable of catching foreign agents without wiretapping. One of the group’s early recruits, William G. Sebold, was an FBI double agent. As the radio operator for the ring, Sebold had been able to give the FBI a chance to screen every bit of intelligence sent back to Hamburg. There had been no need, therefore, to break this particular spy ring. In short, Hoover had been running a classic counterintelligence operation which he decided to compromise for the twin political objectives of demonstrating the Bureau’s prowess and trying to persuade Congress to add wiretapping to his investigative arsenal.50

  He lost his gamble. On June 29, despite the torrent of publicity given the arrests in New York, the House turned the measure back by a vote of 154 to 146. This did not stop the FBI from wiretapping suspected alien spies and some individual labor leaders such as Harry Bridges. Jackson and his successor, Francis Biddle, both maintained they had the right to authorize wiretaps in specified sabotage and espionage cases. Although the wholesale use of wiretapping by the kind of “suicide squad” proposed by McCloy and Hoover was blocked, the seed had been planted. In the years to come, the arguments McCloy had advanced in behalf of such extraconstitutional tactics would be resurrected repeatedly to justify a broad range of covert activities carried out in the name of the national-security state.

  If the FBI was to be forbidden certain activities, McCloy determine
d that the creation of a centralized intelligence agency—an idea he had been working on since the previous autumn—was a top priority. In the summer of 1941, he wrote Mayor Fiorello H. La Guardia of New York, “I am somewhat obsessed with the necessity of establishing a propaganda or information bureau for our defense. . . . It is more essential than artillery. . . .”51

  He was not the only one obsessed with such things. Partly at the instigation of William Stephenson, a millionaire Canadian businessman who was sent to New York in 1940 by Churchill as chief of British Security Coordination, Bill Donovan was now pressing the administration to set up a central intelligence organization. At one point, a British intelligence officer, Commander Ian Fleming—who later wrote the James Bond spy thrillers—sent Donovan a memo urging him to obtain the services of McCloy as his “chief of staff.” Donovan knew Stimson was unlikely to release his trusted aide, but he was already using McCloy to advance his plans. Sometime in the spring of 1941, the two men met and discussed how best to “sell” the proposed intelligence agency. No record of this meeting has been found, but it is known that McCloy made “certain suggestions” to Donovan, possibly including the idea that the head of such an agency should be given the seemingly harmless title of “coordinator of information.” Donovan’s proposal received formal presidential backing on April 4, 1941.52

  McCloy had proposed just such a “coordinator” of intelligence the previous autumn. Since then, there had been more reasons than ever before to appoint a “referee” between the three intelligence groups. In February 1941, J. Edgar Hoover and General Sherman Miles had such a violent falling out that for a time the two men weren’t on speaking terms. Hoover accused Miles of extending his G-2 surveillance of subversives into civilian defense plants, a territory Hoover considered his own.53