The Chairman

by Kai Bird

  31. Wyden, Day One, p. 173.

  32. Alperovitz, Atomic Diplomacy, p. 37.

  33. Wyden, Day One, p. 173.

  34. Toland, Rising Sun, vol. II, p. 945; Wyden, Day One, pp. 172–74; McCloy, Challenge, pp. 40–43.

  35. In a private meeting with Joseph Grew the same morning, Truman said he favored the acting secretary of state’s suggestion to issue a similar explanation of what the United States meant by “unconditional surrender.” But he told Grew that he wished to delay any such statement until the Big Three meeting at Potsdam. (See Grew, Turbulent Era, vol. 11, p. 1437.)

  36. Minutes of meeting of the Committee of Three, 6/19/45, ASW 334.8, Committee of Three Minutes, box 19, RG 107, NA.

  37. Minutes of meeting of the Committee of Three, 6/26/45, ASW 334.8, box 19, RG 107, NA.

  38. McCloy to Colonel Stimson, 6/29/45, ASW 387, Japan, box 38, RG 107, NA.

  39. Toland, Rising Sun, vol. II, p. 946.

  40. McCloy to Colonel Stimson, 6/29/45, ASW 387, Japan, box 38, RG 107, NA.

  41. George L. Harrison to McCloy, 7/2/45, ASW 387, Japan, box 38, RG 107, NA.

  42. Nuel Pharr Davis, Lawrence and Oppenheimer (New York: Simon & Schuster, 1968), p. 247. Discouraged by his lack of influence, and tired of his four-year service as undersecretary of the navy, Bard resigned on July 1, 1945.

  43. Charles L. Mee, Jr., Meeting at Potsdam (New York: Evans, 1975), pp. 4–5.

  44. Harry S. Truman, Year of Decisions, p. 87.

  45. Alperovitz, Atomic Diplomacy, p. 43.

  46. Ickes diary, 7/8/45, LOC.

  47. Cordell Hull, The Memoirs of Cordell Hull (New York: Macmillan, 1948), vol. II, p. 1594.

  48. David Kahn, The Codebreakers: The Story of Secret Writing, p. 610; Richard Rhodes, The Making of the Atomic Bomb, p. 685.

  49. Walter Isaacson and Evan Thomas, The Wise Men: Six Friends and the World They Made, pp. 299–300.

  50. McCloy to Grew, 7/5/45, ASW 387, Japan, box 38, RG 107, NA.

  51. McCloy to chief of staff, 7/17/45; memorandum for the president, 7/16/45, ASW 387, Japan, box 38, RG 107, NA.

  52. Rhodes, Atomic Bomb, pp. 685–86.

  53. McCloy diary, 7/16/45, 7/23/45, DY box 1, folder 18, JJM.

  54. Mee, Meeting at Potsdam, p. 88.

  55. Alperovitz, Atomic Diplomacy, p. 32; Herbert Feis, Japan Subdued (Princeton, N.J.: Princeton University Press, 1961), p. 59.

  56. Alperovitz, Atomic Diplomacy, p. 33.

  57. McCloy diary, 7/16–17/45, DY box 1, folder 18, JJM; Gar Alperovitz, “Did We Have to Drop the Bomb?” NYT, Aug. 3, 1989. On July 17, McCloy wrote in his diary, “The delivery of a warning now would hit them at the moment. It would probably bring what we are after—the successful termination of the war. . . .” Stalin himself had told Harry Hopkins as early as May 30, 1945, “the Japs were on the verge of collapse and know they are doomed; they were putting out peace feelers. . . .” As Hopkins paraphrased Stalin, “Perhaps we [the U.S.] can get a surrender without using the words ‘unconditional surrender’ but give them ‘the works’ once we get to Japan.” (McCloy memo to the secretaries of war and navy, 6/10/45, no. 2698, reel 116, GCM.)

  58. Churchill noted on July 23, 1945, at Potsdam: “It is quite clear that the United States do not at the present time desire Russian participation in the war against Japan.” (See Alperovitz, “Drop the Bomb?”)

  59. McCloy diary, 7/23/45, DY box 1, folder 18, JJM.

  60. Alperovitz, Atomic Diplomacy, p. 54. A California oil man and Democratic Party treasurer, Pauley was in Potsdam to negotiate German reparation payments with the Soviets.

  61. Isaacson and Thomas, Wise Men, p. 304.

  62. Allen Dulles’s foreword to Per Jacobsson’s pamphlet The Per Jacobsson Mediation, Basle Centre for Economic and Financial Research, ser. C, no. 4, published about 1967, on file in Allen Dulles Papers, box 22, folder John J. McCloy 1945, PU.

  63. McCloy diary, 7/20/45, DY box 1, folder 18, JJM.

  64. McCloy diary, 7/27/45, DY box 1, folder 18, JJM.

  65. Alperovitz, Atomic Diplomacy, p. 30.

  66. McCloy to Ellen McCloy, n.d. (July), Potsdam, JJM.

  67. W. Averell Harriman and Elie Abel, Special Envoy (New York: Random House, 1975). p. 48.

  68. Rhodes, Atomic Bomb, p. 688. Eisenhower probably made the same pitch to Truman, but the president brushed aside what he thought were familiar arguments. In the words of his brother, Milton, Eisenhower thought that for the United States to introduce atomic weapons into the war as late as Aug. 1945 might be viewed by the Soviets as a “supreme provocation.” (See David Eisenhower, Eisenhower at War, p. 692.)

  69. Margaret Truman, Harry S. Truman (New York: William Morrow, 1973), p. 280; John McCloy to Ellen McCloy, two undated letters written from Potsdam, n.d. (July 1945), McCloy scrapbooks, JJM.

  70. Isaacson and Thomas, Wise Men, p. 306.

  71. McCloy to Ellen McCloy, n.d., Potsdam, JJM. Papers.

  72. McCloy diary, 7/25/45, DY box 1, folder 18, JJM; Isaacson and Thomas, Wise Men, p. 305.

  73. McCloy to Ellen McCloy, n.d., Potsdam, JJM.

  74. Ibid.

  75. Alperovitz, Atomic Diplomacy, pp. 216–18.

  76. Isaacson and Thomas, Wise Men, p. 306. “I feel that this situation [a divided Germany] is better than the constant distrust and difficulty we would have with the Russians over their being in our zones. . . .” (McCloy diary, 7/23/45, DY box 1, folder 18, JJM.)

  77. Walter Lippmann made some of these arguments in a series of articles shortly after the war. See Alperovitz, Atomic Diplomacy, p. 56.

  78. Isaacson and Thomas, Wise Men, p. 306

  79. McCloy to Ellen McCloy, n.d., Potsdam, JJM.

  80. Harriman and Abel, Special Envoy, p. 488.

  81. McCloy diary, 7/16/45, DY box 1, folder 18, JJM.

  82. McCloy diary, 7/28/45, DY box 1, folder 18, JJM.

  83. Gabriel Kolko, The Politics of War: The World and United States Foreign Policy, 1943–1945, p. 561; Mee, Meeting at Potsdam, p. 209.

  84. Sherwin, World Destroyed, p. 227; McCloy diary, 7/25/45, DY box 1, folder 18, JJM.

  85. Alperovitz, Atomic Diplomacy, p. 108.

  86. McCloy diary, 7/20/45, DY box 1, folder 18, JJM; Isaacson and Thomas, Wise Men, p. 303.

  87. Mee, Meeting at Potsdam, pp. 235–36.

  88. “Biweekly Political Analysis of the Far East,” 7/26/45, ASW 371.1, Service of Information Alpha, box 34, RG 107, NA; see also Colonel Truman Smith to Brigadier General John Weckerling, chief, Intelligence Division, G-2,7/3/51, file: Russian Declaration of War on Japan, Truman Smith Papers, HH.

  89. After the war, Lewis L. Strauss wrote in a private letter that he thought Forrestal hoped these intercepts would convince Truman and Byrnes that “the war was essentially over and that little more than a question of semantics separated the terms which the victors would impose and those which the vanquished were eager to accept.” (Lewis Strauss to Dr. Robert G. Albion, 12/19/60, Agro-American Committee on United Europe, Strauss Papers, HH.)

  90. McCloy diary, 7/30/45, DY box 1, folder 18, JJM.

  91. Mee, Meeting at Potsdam, p. 247.

  92. Ibid., p. 272.

  93. Isaacson and Thomas, Wise Men, p. 308.

  94. McCloy to Ellen McCloy, n.d., Potsdam, JJM.

  95. Kolko, Politics of War, pp. 449, 498.

  96. Isaacson and Thomas, Wise Men, p. 315; Wyden, Day One, p. 289.

  97. “Note Received from Swiss Government August 10, 1945,” ASW 387, Japan, box 38, RG 107, NA.

  98. Rhodes, Atomic Bomb, pp. 733–34, 740.

  99. Ibid., p. 742.

  100. John Morton Blum, ed., The Price of Vision: The Diary of Henry A. Wallace, 1942–1946 (Boston: Houghton Mifflin, 1973), p. 474.

  101. Byrnes-McCloy telcon, 8/11/45, ASW 387 Japan, box 38, RG 107, NA; Henry Stimson diary, 8/11/45, LOC.

  102. Rhodes, Atomic Bomb, p. 743.

  103. Blum, ed., Price of Vision, p. 474. It is interesting to note that at the
end of this Cabinet meeting Henry Wallace concluded that Truman, Byrnes, Stimson, and Forrestal were already moving away from strengthening the U.S.-Soviet relationship. “Their attitude,” he warned, “will make for war eventually.” (Ibid., p. 475.)

  104. Harriman, Kennan, Stalin, Molotov memorandum of conversation, 8/8/45, AH.

  105. Stimson and Bundy, On Active Service, p. 641; McCloy interview, Sept. 14, 1984.

  106. McCloy diary, 9/2/45, box 1, folder 18, JJM; Henry Stimson diary, 8/12–9/3/45, LOC.

  107. McCloy diary, 9/2/45, box 1, folder 18, JJM.

  108. Henry Stimson diary, 8/12–9/3/45, with attached phone records, LOC.

  109. Stimson and Bundy, On Active Service, p. 642.

  110. Memorandum for the president, “Proposed Action for Control of Atomic Bombs,” signed by Henry Stimson, 9/11/45, found in McCloy diary, 9/2/45, DY box 1, folder 18, JJM.

  111. Alperovitz, Atomic Diplomacy, p. 55.

  112. James F. Byrnes, Speaking Frankly (New York: Harper & Brothers, 1947), p. 203.

  113. Millis, ed., Forrestal Diaries, p. 70. After Hiroshima, the Truman administration did everything it could to control the history of the bomb decision. Henry Stimson and McGeorge Bundy, for instance, agreed to eliminate several paragraphs from their 1948 book, On Active Service in Peace and War, which explicitly discussed the bomb “as a diplomatic weapon.” They rewrote this and several other critical passages at the urging of George Kennan and General Marshall, who by then was secretary of state. Kennan explained to Bundy that these passages “would play squarely into the hands of the Communists who so frequently speak of our ‘atomic diplomacy’ . . .” (George Kennan to McGeorge Bundy, 12/2/47, box 86, folder 17, GCM.)

  114. McCloy interview, Sept. 14, 1984.

  115. McCloy diary, 7/20/45, DY box 1, folder 18, JJM.

  116. McCloy interview, Sept. 14, 1984.

  117. McCloy diary, 7/21/45, DY box 1, folder 18, JJM.

  118. “Dr. Freeman’s Impressions,” McCloy diary, box DY 1/3, folder 19, JJM; McCloy interview, Sept. 14, 1984.

  119. Isaacson and Thomas, Wise Men, p. 336.

  120. McCloy diary, 9/30/45, box DY 1/3, folder 19, JJM.

  121. Isaacson and Thomas, Wise Men, p. 330.

  122. Ibid., p. 331.

  123. McCloy to George Wharton Pepper, 10/15/46, box PA 1, folder 69, JJM.

  124. McCloy diary, 10/22–25/45, JJM.

  125. McCloy cable to secretaries of war and state, n.d., box DY 1/3, folder 19, JJM.

  126. Isaacson and Thomas, Wise Men, p. 335.

  BOOK THREE

  THIRTEEN: A BRIEF RETURN TO WALL STREET

  1. Walter Isaacson and Evan Thomas, The Wise Men: Six Friends and the World They Made, p. 336.

  2. Paul Hoffman, Lions in the Street: The Inside Story of the Great Wall Street Firms, p. 10.

  3. Maurice “Tex” Moore interview, Oct. 21, 1983.

  4. Isaacson and Thomas, Wise Men, pp. 335–36.

  5. James B. Stewart, The Partners: Inside America’s Most Powerful Law Firms (New York: Simon & Schuster, 1983), p. 288.

  6. Alexander Forger, speaking at McCloy Memorial Service, March 21, 1989.

  7. Harrison Tweed, “Extra Curricular Opportunities and Activities of Lawyers,” New Jersey State Bar Association Yearbook, 1947, pp. 84–85 (speech, Jan. 18, 1947).

  8. George Martin, Causes and Conflicts: The Centennial History of the Association of the Bar of the City of New York 1870–1970 (Boston: Houghton Mifflin, 1970), p. 249.

  9. Hoffman, Lions in the Street, p. 19.

  10. Ibid., p. 77.

  11. John D. Rockefeller, Jr., to Tom Debevoise, 2/24/47, Rockefeller Family Collection, RG 2 OMR, ser. 87.1S4, box 122, folder Standard Oil / Davies-Ickes, RF.

  12. Robert Engler, The Politics of Oil (Chicago: University of Chicago Press, 1961), p. 288.

  13. Thomas M. Debevoise to Albert G. Milbank, 3/26/46; memo, “Twenty-five Largest Stockholders as of April 10, 1946,” Rockefeller Family Collection, RG 2 OMR, box 122, folder Standard Oil / Davies-Ickes, RF. A close inspection of these documents shows that the Rockefeller family or the Rockefeller Foundation owned at least 12 percent of Standard Oil of California shares in 1946. Most stock analysts would regard this share as a controlling interest.

  14. Frankfurter to McCloy, 2/6/46, Frankfurter Papers, LOC.

  15. McCloy to Frankfurter, 2/13/46, Frankfurter Papers, LOC.

  16. Robert D. Schulzinger, The Wise Men of Foreign Affairs: The History of the Council on Foreign Relations (New York: Columbia University Press, 1984), p. 120.

  17. Isaacson and Thomas, Wise Men, p. 337.

  18. Schulzinger, Wise Men of Foreign Affairs, p. 121.

  19. E. J. Kahn, Jr., The World of Swope (New York: Simon & Schuster, 1965), p. 405.

  20. J. Edgar Hoover to George E. Allen, 5/29/46, PSF, HST.

  21. John Newhouse, War and Peace in the Nuclear Age (New York: Alfred A. Knopf, 1989) p. 61.

  22. Dean Acheson oral history, PPS Files, HST; Newhouse, War and Peace, p. 62.

  23. Dean Acheson, Present at the Creation (New York, W. W. Norton, 1969), p. 153.

  24. McCloy to Frankfurter, 2/13/46, Frankfurter Papers, LOC.

  25. J. Robert Oppenheimer, “Atomic Explosives,” 4/6/46, PU.

  26. Gregg Herken, The Winning Weapon: The Atomic Bomb in the Cold War, 1945–1950 (New York: Alfred A. Knopf, 1980), pp. 155–57.

  27. Joseph I. Lieberman, The Scorpion and the Tarantula: The Struggle to Control Atomic Weapons, 1945–1949 (Boston: Houghton Mifflin, 1970), pp. 253, 255; Acheson, Present at the Creation, p. 152; Herken, Winning Weapon, p. 158.

  28. Herken, Winning Weapon, p. 158.

  29. Frankfurter to McCloy, 4/5/46, Frankfurter Papers, LOC; Herken, Winning Weapon, pp. 159–60.

  30. Herken, Winning Weapon, p. 171; Daniel Yergin, Shattered Peace: The Origins of the Cold War and the National Security State (Boston: Houghton Mifflin, 1978), p. 238.

  31. Herken, Winning Weapon, p. 366.

  32. Ibid., p. 162.

  33. Ferdinand Eberstadt diary, 3/25/46, Truman Library.

  34. J. Anthony Panuch memorandum to Mr. Russell, 11/14/45, Papers of J. Anthony Panuch, HST.

  35. Ibid.

  36. Acheson, Present at the Creation, pp. 161–62.

  37. Athan G. Theoharis and John Stuart Cox, The Boss: J. Edgar Hoover and the Great American Inquisition (Philadelphia: Temple University Press, 1988), pp. 199–200.

  38. J. Edgar Hoover to George E. Allen, 5/29/46, PSF, FBI Atomic Bomb, HST. In 1945, Elizabeth Bentley told the FBI that Nathan Gregory Silvermaster, a Department of Agriculture economist, was the ringleader of an intelligence-gathering group in Washington.

  39. Herken, Winning Weapon, p. 162.

  40. Searls admitted to Lilienthal that he thought the resource survey could serve as a cover for espionage. “Searls said that in this way we would find out what was going on in Russia. And if the Russians refused to accept this proposal, then we would know that they would not go along on any international scheme, and . . . he didn’t finish the statement, but his eyes indicated what he thought should then be recommended, and it was anything but pleasant.” (Ibid., p. 165.)

  41. Lieberman, Scorpion and Tarantula, pp. 282–83; Frankfurter to McCloy, 5/14/46, Frankfurter Papers, LOC.

  42. Acheson oral history, n.d., PPF, HST.

  43. For further discussion of the Baruch Plan, see D. F. Fleming, The Cold War and Its Origins: 1917–1960 (Garden City, N.Y.: Doubleday, 1961), vol. I, pp. 370–75.

  44. McCloy to Eugene Meyer, 6/13/46, box 35, Meyer Papers, LOC.

  45. Merlo J. Pusey, Eugene Meyer; pp. 352–53.

  46. Russell C. Leffingwell to Meyer, 12/23/46, box 32, Meyer Papers, LOC.

  47. Financial Times, Dec. 9, 1946.

  FOURTEEN: THE WORLD BANK: “MCCLOY ÜBER ALLES”

  1. Emilio Collado oral history, p. 48, HST.

  2. Emilio “Pete” Collado interview, Aug. 18, 1982.

  3.
Mrs. Frederick Warburg interview, April 10, 1984.

  4. Robert W. Oliver, International Economic Cooperation and the World Bank (London: Macmillan, 1975), p. 239.

  5. Robert L. Garner diary notations, 2/13/47, 2/15/47 2/16/47, HST.

  6. Time, Feb. 17, 1947.

  7. Oliver, International Economic Cooperation, p. 237.

  8. Edward S. Mason and Robert E. Asher, The World Bank Since Bretton Woods (Washington, D.C.: The Brookings Institution, 1973), p. 46.

  9. Eugene Black interview, July 24, 1984.

  10. Grigg cable to British Foreign Office, 2/18/47, Assumption of Presidency, PRO.

  11. Minister of state to foreign secretary, 2/21/47, PRO.

  12. Financial Times, Feb. 24, 1947.

  13. Robert W. Oliver, “Early Plans for a World Bank,” unpublished paper, Princeton University International Finance Section, Department of Economics, 1971, pp. 4–5, 17, 45.

  14. Bolton to Mr. Rowe-Dutton, 5/13/47, PRO.

  15. New York Herald Tribune, Feb. 28, 1947.

  16. Hugh Dalton, M.P., to John Snyder, 3/3/47, Snyder Papers, HST.

  17. Washington to London, 3/27/47, PRO.

  18. Parsons to Foreign Office, 4/8–9/47, PRO.

  19. Eugene Black interview, July 24, 1984.

  20. Ibid.; Robert L. Garner diary, 3/17/47, HST.

  21. Oliver, International Economic Cooperation, p. 238.

  22. NYT, March 1, 1947.

  23. Time, Feb. 17, 1947; Oliver, International Economic Cooperation, p. 241.

  24. James Morris, The Road to Huddersfield: A Journey to Five Continents (New York: Pantheon, 1963), p. 24.

  25. Herald Tribune, April 1947; Oliver, International Economic Cooperation, p. 249; Eugene Black interview, July 24, 1984.

  26. NYT, May 27, 1947.

  27. Harry S. Truman, Years of Trial and Hope, 1946–52 (Garden City, N.Y.: Doubleday, 1956), p. 106.

  28. Fleming, Cold War and Origins, vol. I, p. 443.

  29. David Mayers, George Kennan and the Dilemmas of U.S. Foreign Policy (New York: Oxford University Press, 1988), p. 109.

  30. Oliver, International Economic Cooperation, p. 260.

  31. Mason and Asher, World Bank Since Bretton Woods, pp. 51–52.

  32. Robert L. Garner diary, 3/19/47, HST.

  33. Oliver, International Economic Cooperation, p. 242.

  34. Charles L. Mee, Jr., The Marshall Plan: The Launching of the Pax Americana (New York: Simon & Schuster, 1984), pp. 118–19; Daniel Yergin, Shattered Peace: The Origins of the Cold War and the National Security State, p. 312; see also Catherine Gavin, Liberated France (New York: St. Martin’s Press, 1955), pp. 167, 177.