Part Seventeen— Nuclear Rivalry and the Cold War: American Atomic Supremacy: 1945-1950
Chapter 62—The Factors
Part Seventeen—
Nuclear Rivalry and the Cold War:
American Atomic Supremacy: 1945-1950
Chapter 62—The Factors
Historically, the period 1945 to early 1963 forms a unity. During this period a number of factors
interacted upon one another to present a very complicated and extraordinarily dangerous series of
events. That mankind and civilized life got through the period of almost two decades may be attributed
to a number of lucky chances rather than to any particular skill among the two opposing political blocs
or among the neutrals.
The period as a whole is so complex that no successful effort has been made by any historian to present
it as a unity. Instead, it is usually treated as a series of separate, relatively isolated, developments, such
as events in the Far East, United States domestic history, Soviet domestic history, developments in
science and technology, the rise of the neutrals, and other developments. Such a presentation is not
adequate because it falsifies the historical fact that these (and other) developments occurred
simultaneously, and constantly reacted upon one another. Moreover, the central fact of the whole
period, and the one which dominated all the others, was the scientific and technological rivalry between
the United States and the Soviet Union, because this rivalry formed the very foundation and core of the
Cold War, which was recognized by everyone to be the dominant political factor of the period.
Unfortunately, the Cold War is almost always described in terms which put minor emphasis on, or
which may even neglect, the role of Soviet-American technological rivalry. This is done because most
historians do not feel competent to discuss it; but chiefly it is done because much of the evidence is
secret. Because of such secrecy, the story of this Soviet-American technological rivalry falls into two
quite distinct, and even contradictory, parts:
(1) what the real situation was and
(2) what prevalent public opinion believed the situation to be.
For example, in 1954-1955 the Soviet Union had a thermonuclear so-called H-bomb many months
before we did, when public opinion believed the opposite; again, in late 1960 there was a widespread
belief throughout the world in a so-called "missile gap," or American inferiority in nuclear missile
weapons, when no such inferiority existed; and finally, for a period of several years, from 1957 to about
1960, the Russians were in advance of the United States and the free world generally in missile
technology and in missile-guidance mechanisms, although this was not reflected, then or later, in any
superiority in nuclear missile weapons, because of their simultaneous inferiority in nuclear warheads
for missiles, an inferiority by a wide margin both in numbers and in variety of such explosive weapons.
In dealing with this central factor of the world situation, the historian is prevented by secrecy on both
sides from making any assured or final judgments, and must simply make a judicious estimate of the
situation on the basis of available information. Unfortunately, the influence of this factor is so central,
and thus so all-pervasive, that inability to be sure of the facts on this matter brings a fair amount of
uncertainty into many other areas, such as, for example, the foreign policy of John Foster Dulles or the
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Chapter 62—The Factors
real significance of the so-called "atomic espionage cases." Such uncertainty, however, is always
present in historical analysis of the recent past, and most historians, knowing that the documents and
thus the facts are unavailable for contemporary history (say, the last twenty years), usually leave the
most recent past to others, to political scientists, journalists, or biographers.
In the history of the period 1945-1963 there are six chief factors:
(1) the Cold War and the nuclear balance;
(2) demobilization and re-mobilization, with special emphasis on inter-service rivalries and the
pressures from industrial complexes;
(3) partisan political struggles in the United States, centering on the rise and decline of
unilateralism;
(4) personal political struggles in the Soviet Union, centering on the succession to Stalin;
(5) intra-bloc discords, centering on the relations between the United States and its allies on one
side and the relations between the Soviet Union and its satellites on the other side; and
(6) the role of neutralism, revolving around backward nationalisms and anti-colonialism.
The history of the period can be understood only in terms of the interplay of these six factors, in all
their complexities, treated simultaneously, but before we attempt to do this we must make a brief
examination of each factor separately in order to define our terms and to establish secondary
chronological sequences.
The Cold War, as we shall see in the next chapter, was an inevitable consequence of the defeats of
Germany, Japan, France, and Italy, and the collapse of Nationalist China, but it was raised to an acute
and sustained crisis by the existence of nuclear weapons and the development of rocket missiles. The
combination threatened the survival of man as a civilized being, although it probably did not threaten
his continued existence, after a nuclear holocaust, on a degraded social level as a distinct species of
living being. The fear of human extermination was spread by many well-intentioned, mistaken, or
mercenary people, and reached its peak, perhaps, in the commercial success of Nevil Shute's On the
Beach, both as novel and as motion picture. The annihilation of man, as shown in such works, is
technically possible, but will certainly not result from the weapons which would be used in total
thermonuclear war. However, there is always a remote possibility that a madman such as Hitler might
decide to destroy the human race as revenge for the frustration of his insane ambitions. This could be
done in a number of ways, of which the simplest would be to encase a large number of thermonuclear
bombs in thick layers of cobalt; the ensuing fallout of radioactive cobalt 60 could extinguish all animal
life on earth (excluding most plants, insects, and other invertebrates). No sane policy would use such a
bomb, since cobalt 60 is 320 times as radioactive as radium, and it would require at least four hundred
such bombs, each at least one ton in weight, to release enough radioactivity to extinguish all animal life
on earth.
However, even without a cobalt bomb, any extensive nuclear war would kill hundreds of millions of
human beings and would release sufficient radioactivity to inflict such extensive genetic damage that
subsequent generations of human beings would produce a substantial percentage of monsters; this fact,
added to the genetic damage to bird-life, might create a situation where men would be unable to
compete successfully with insects (who are much more immune to genetic damage from radioactivity).
The balance of nuclear weapons is a central factor in the Cold War, since no agreement on cessation of
Part Seventeen— Nuclear Rivalry and the Cold War: American Atomic Supremacy: 1945-1950
Chapter 62—The Factors
nuclear testing, nuclear disarmament, conventional disarmament, or relaxation of tension can occur
until both sides recognize that a nuclear balance of equilibrium (the so-called "nuclear stalemate") has
been achieved. This came close to achievement early in 1950, when both sides had atomic weapons,
but was destroyed at that time by President Truman's order to proceed with the development of the
hydrogen bomb. It was not achieved again until the end of 1962, because when both sides had achieved
the H-bomb by 1956, that balance was disturbed by the missile race, which reached its widest
disequilibrium with the Soviet success with "Sputnik" in October 1957. This led to the subsequent race
to obtain an intercontinental ballistic missile with nuclear warhead (ICBM) in 1957-1962.
By 1963, w hen both sides had these weapons, the balance of terror was established and negotiation
was possible. As a matter of fact, the balance was not equal, since the American total capability in
nuclear war was far superior to that of the Soviet Union in 1963, but weapons development had reached
approximately the same point; the United States was more vulnerable to Russia's fewer weapons
because a larger part of its population was industrial and urban, and the Soviet Union had growing
problems in other areas, notably its alienation from Communist China. At the same time, gross fissures
began to appear in the Western bloc from De Gaulle's efforts to turn Europe out of the American camp
and into a Third ("neutralist") Force. About the same time, the Cuban Crisis of October 1962,
somewhat like the Fashoda Crisis of 1898, by bringing the United States and the Soviet Union to the
edge of a war that neither wanted, revealed to both the mutual balance of error and the need to do
something about it. All this marked the end of the historical period which began in 1945.
The chief subdivisions of the history of nuclear balance over the period 1945-1963 are as follows:
1. The American Atomic Monopoly from Alamogordo in June 1945 to the first Soviet atom
bomb ("Joe I") in August 1949.
2. A brief nuclear balance from 1949 to 1950.
3. The Race for the Hydrogen Bomb from January 1950 through the first American hydrogen
fusion at Eniwetok in November 1952 and the first Soviet H-bomb explosion of August 1953 to
the American achievement of a practical thermonuclear weapon in March 1954. This contest
continued for two more years as each side tried to perfect the new weapon as an aerial bomb.
The United States made its first successful air drop of a fusion bomb on May 21, 1956—almost
certainly later than the comparable Soviet test.
4. The Race for the ICBM from 1956 to 1962 has been widely misunderstood because
propaganda falsehoods from both sides sought to conceal the true situation and often confused
even themselves.
Basically the problem was, at the beginning, how to combine the American Nagasaki bomb, which
weighed 9,000 pounds, with the German V-2 rocket, which carried a warhead of 1,700 pounds only 200
miles. The Soviet government sought to close the gap between rocket power and nuclear payload by
working toward a more powerful rocket, while the Americans, over the opposition of the air force and
the aviation industry, sought to close the gap by getting smaller bombs. The result of the race was that
the Soviet government acquired a series of very powerful rocket boosters ranging in thrust from
800,000 pounds to l.5 million pounds, and capable of hurling capsules from one to over seven tons in
weight. These were demonstrated to an astonished world from October 1957 onward.
Part Seventeen— Nuclear Rivalry and the Cold War: American Atomic Supremacy: 1945-1950
Chapter 62—The Factors
These Soviet successes in space made the American effort in rocket boosters look very second-rate, but
this impression was rather misleading. It was perfectly true that the United States in 1957-1960 had no
powerful rocket boosters capable of hurling large space vehicles into orbit or past the moon (as was
done with the 3,245-pound Soviet Lunik I in January 1959), but the United States in this period had a
large number of fission and fusion warheads in a great variety of sizes, and was rapidly developing
moderately powerful rockets able to carry these great distances. In fact, the first American ICBM was
fired from Cape Canaveral in December 1957, two months after Sputnik I, and went full range in
November 1958.
By 1961 the United States had a varied assortment of missiles, troth solid- and liquid fueled, some able
to be fired in minutes, and capable of carrying nuclear warheads, whose explosive power was
equivalent to as little as 750,000 tons of TNT (thus forty three times the force of the Hiroshima Abomb) to 5,000,000 or more tons of TNT. These could be delivered distances from 1,000 to over 6,000
miles and with such accuracy that at least half could be landed in a circle within 3 miles of a target.
These developments left the Soviet Union with a much smaller number of giant rockets able to carry
20-megaton (20,000,000 tons of TNT) warheads, but so large that their locations were soon spied out
by American high-flying U-2 photographic planes. To remedy this overemphasis on size, the Soviet
Union, in October 1962, broke the moratorium on nuclear explosive testing which had existed since
October 1958, and exploded a great variety of small bombs from 1 to 5 megatons, as well as a gigantic
one of 25 megatons and a colossal one of 58 megatons; the latter, the largest bomb ever exploded, was
equal to one-third the total of all previous nuclear explosions from 1945 to the end of previous testing
in December 1958.
Even before these final tests, in 1960 elaborate calculations on the giant electronic computers in the
Pentagon were estimating the consequences of a hypothetical total nuclear war in June 1963. Two
answers were:
(1) If the Soviet Union struck first and the United States retaliated, the war would be over in a
single day with a Russian victory in which they lost 40 million of their 220 million population
dead and 40 percent of their industrial capacity, while America would have 150 million of its
195 million people dead and 60 percent of its industry destroyed.
(2) If the United States struck first with a nuclear attack, in reply to a Soviet advance of ground
troops into Germany, 75 million Russians and 110 million Americans would be killed, half the
industry of both would be destroyed, and neither could win.
On this basis, some relaxation of tension became imperative, as soon as the Soviets could be satisfied
they had achieved stalemate by their 1961-1962 nuclear tests.
Closely related to this four-stage sequence of nuclear capability is the quite different four-stage
sequence of strategic planning. This is concerned with what we plan to do as distinct from what we are
able to do. From the American side it has four stages, as follows:
1. "Great Power Cooperation" within the United Nations Organization, 1945-1946
2. "Containment of" Soviet expansion by all means available, including economic aid to others (the
Marshall Plan), conventional forces (as in NATO), and nuclear weapons, 1946-1953.
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Chapter 62—The Factors
3. "Liberation," "Massive Retaliation," and the "New Look," 1953-1960. This period, associated with
the influence of Secretary of State John Foster Dulles, sought to deal with foreign crisis by the use of
slogans and quite unrealistic policies which could never have been used. Our allies, the neutrals, and
even the Russians were ignored and often despised, while the State Department engaged in what Dulles
himself called, in January 1956, "going to the brink" of war. This policy sought to reduce government
spending and balance the budget by reducing expenditures for all local or conventional wars and to
base our strategy and our foreign policy on the threat that any Soviet advance of any kind anywhere of
which we disapproved would be stopped by our "massive retaliation" with all-out nuclear attack
anywhere we judged appropriate, on a unilateral (without consultation with our allies) and on a "firststrike" basis (that is, we would do this even if the Soviet Union had not attacked us and had not used
nuclear weapons). This policy was hopelessly irresponsible and not only alienated allies (such as
France) and neutrals (such as India), but could not be used, since we would never adopt such suicidal
and ineffective tactics to reply to a Communist local advance in Korea, southeast Asia, Tibet,
Afghanistan, Iran, Egypt, Yugoslavia, or most other places on the periphery of the Soviet bloc. This
policy abandoned NATO, in fact if not in theory, and meant that we had publicly adopted a policy we
would never carry out; because even if we were willing to accept the full consequences of the Soviet
nuclear counter-blow to our "massive retaliation" we could not ever win in such a war, since Soviet
ground forces, with their 125 divisions in Europe, could easily overrun NATO's 25 divisions and would
occupy all Europe except Britain and Spain. The Kremlin leaders, moving to Paris or Rome (perhaps in
the Vatican) would be beyond our reach and could hold London under nuclear threat, while both the
United States and the Soviet Union were devastated. The Dulles doctrine was not a doctrine of action
but solely a doctrine of threats, since it expected that the threat alone would stop Soviet advances and
that it would never he necessary to carry out the threat. The policy worked, in the sense that the world
and the United States lived through it, only because the Soviet Union, at the same time. was in the
"interregnum" between the death of Stalin (March 5, 1952) and the accession to full power of
Khrushchev (July 4, 1957 to March 27, 1958). The last two years were occupied by the Eisenhower
administration's efforts to get back to a more workable defense policy based on a variety of responses
to Soviet actions and to do so without either repudiating Dulles or excessively unbalancing the budget.
4. "Graduated deterrence," from 1960 onward, was really an effort to get back to the polices of 1950 as
advocated by the National Security Council paper NSC 58 of March 1950, and generally to the advice
given by Robert Oppenheimer before his public career had been destroyed by the "massive retaliation"
advocates in 1953. This revived doctrine called for a graduated and varied strategic response to Soviet
aggression combined with cooperation with our allies, recognition of the rights of neutrals to be
neutral, increased economic and cultural aid to both groups, and relaxation of tension with the Soviet
Union by cultural and scientific cooperation. This broad and varied program had at its core
development of at least four levels of possible war:
(1) war with conventional weapons;
(2) addition of tactical nuclear weapons;
(3) strategic nuclear attack on a "no cities" basis (with attacks aimed only at Soviet military
bases and installations); and
(4) the "total devastation response."
Each of these had sub-gradations and gave rise to unsolved problems such as "escalation," that is, the
possibility that one level would develop gradually into a more intense level in the heat of combat.
Part Seventeen— Nuclear Rivalry and the Cold War: American Atomic Supremacy: 1945-1950
Chapter 62—The Factors
Moreover, such complex responses required immense outlays of money, even if the achievement of the
whole was spread over many years. But this cost, it was felt, would be worthwhile, since nuclear
warfare on a "no cities" basis would save about 100 million American lives in the first week of war in
comparison with war on the "total-devastation" level. One element in this whole strategic shift was the
shift of the emphasis of our response from Strategic Air Command (SAC) nuclear bombing to
conventional army forces and to the navy's nuclear submarines with Polaris missiles. The former would
reduce the temptation to the Soviet Union to instigate local "brush-fire" wars, while the latter would be
even more successful in preventing any Soviet nuclear "first strike," since such an attack would be
much less able to find and destroy Polaris submarines than it would be to wipe out fixed SAC bases.
The next great aspect of postwar history was the partisan political struggles within the United States,
centering on the rise and decline of unilateralism and neo-isolationism. As we shall see in a later
chapter, the party struggle in the United States took the form of a struggle between the party of the
middle classes, the Republicans, and the party of the fringes, the Democrats. This lineup, with its
multitude of exceptional cases, found the intellectuals (including the scientists), the internationalists,
the minorities, and the cosmopolitans in the Democratic Party, with the businessmen, bankers, and
clerks in the Republican Party. The isolationism of the latter, combined with their inability to cope with
the world depression or with the international crisis arising from Hitler, kept the Democrats in the
White House for twenty years (1933-1953). The defeat of Dewey by Truman in 1948 was a particularly
bitter pill, and the Republican partisans after that event were ready to adopt any weapon which could be
used to discredit the Democratic administration. They found such a weapon ready at hand in the neoisolationist forces within the Republican Party which were entrenched in the Congress by the seniority
system of committee controls which operated there. Since either party in the United States wins a
presidential election on a national (and not on a local) basis and by appealing to the moderate middlegroup people who are willing to shift their vote and to consider the issues presented, a party which is
long out of the White House will be reduced to the control of its local, narrow, ignorant, and extremist
core which is unwilling to consider issues or the national welfare, or to shift their party stand and votes.
For these reasons, the Republican Party had fallen into congressional control (represented by Senate
figures such as Senators Robert Taft, Kenneth Wherry, Styles Bridges, and William Jenner) ....
This group, to whom we often give the name "neo-isolationist," knew nothing of the world outside the
United States, and generally despised it. Thus, they gave no consideration to our allies or neutrals, and
saw no reason to know or to study Russia, since it could be hated completely without need for accurate
knowledge. All foreigners were regarded as unprincipled, weak, poor, ignorant, and evil, with only one
aim in life, namely, to prey on the United States. These neo-isolationists and unilateralists were equally
filled with suspicion or hatred of any American intellectuals, including scientists, because they had no
conception of any man who placed objective truth higher than subjective interests, since such an
attitude was a complete challenge to the American businessman's assumption that all men are and
should be concerned with the pursuit of self-interest and profit.
At the end of the war, it was but natural that many Americans should seek to return from foreign and
incomprehensible matters, including countries, peoples, and problems which were a standing refutation
of the American neo-isolationist's ideas of human nature, of social structure, and of proper motivations.
Neo-isolationism had a series of assumptions which explain their statements and actions and which
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Chapter 62—The Factors
could not possibly be held by anyone who had any knowledge of the world outside American lowermiddle-class business circles. These beliefs were at least seven in number:
1. Unilateralism: the belief that the United States should and could act by itself without need to
consider allies, neutrals, or the Soviet Union.
2. National omnipotence: the belief that the United States is so rich and powerful that no one else
counts and that there is, accordingly, no need to study foreign areas, customs, or policies, since
America's policies can be based exclusively on its own power and its own high moral principles (which
have no real meaning to anyone else).
3. Unlimited goals (or utopianism): the belief that there are final solutions to the world's problems. This
assumes that American power permits it to do what it wishes and that demonstration of this power to
trouble-making foreigners will make them leave the United States alone and secure forever. This idea
was reflected in its crudest form in the belief that America's power could be applied to the world in one
final smash after which everything would be settled forever. Upholders of this view refused to accept
that America's security in the nineteenth century had been an untypical and temporary condition and
that constant danger and constant problems were a perpetual condition of human life except in brief and
unusual circumstances. This kind of impatience with foreign problems and danger was clearly stated by
Dulles in his article "A Policy of Boldness" in Life magazine, May 19, 1952. There he insisted that the
Truman policy of containment must be replaced by a policy of "liberation," since the former was based
on "treadmill policies which at best might perhaps keep us in the same place until we drop exhausted."
These policies, he argued, would lead to financial collapse and loss of civil liberties, were "not
designed to win victory conclusively," and did not seek to solve the problem of the Soviet Union but to
live with it, `'presumably forever." His solution was to refuse to recognize Communist control either in
the European satellites or in China, to deny the existence of the Iron Curtain, and to free millions
enslaved by Communism. Although the only way these millions could be freed was by war, Dulles
refused to advocate preventive war, and established no method of achieving his goals except his belief
that, if he refused to face reality, reality would change. However, he did accept preventive war in the
form of massive retaliation if the Communists made any further advances, and he established the
argument that the Truman policy of containing the Communists was a policy of refusing to defeat them,
from softness or fear or sympathy. This became the basis for future partisan Republican charges that
Democratic administrations were "soft on Communism" and pursued "no-win" policies.
4. The neo-isolationist belief in American omnipotence and foreign inferiority led, almost at once, to
the conclusion that continuance of the Soviet threat arose from internal treason within America and that
the Russian nuclear successes must be based on treason and espionage and could not possibly be based
on foreign science or Soviet industrial capability. The neo-isolationists were convinced that the only
threat to America came from internal subversion, from Communist sympathizers and "fellow travelers,"
since no foreign threat could harm our omnipotence. All opposition to neo-isolationist views was
branded as "un-American," and was traced to low motivations or corruption of American life by such
non-American innovations as economic planning, social welfare, or concern for foreigners. Henry
Wallace and Mrs. Roosevelt, who were the special targets of these isolationists, were accused of
conspiring to give away America's wealth (in order to weaken it): "a quart of milk to every Hottentot."
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5. Since the chief "high moral principle" which motivated the neo-isolationists was their own economic
self-interest, they were especially agitated by high taxes, and insisted that Soviet Russia and the
Democrats were engaged in a joint tacit conspiracy to destroy America by high taxes by using Cold
War crisis to tax America into bankruptcy.
6. Since the neo-isolationists rejected all partial solutions or limited goals, and were unwilling to pay to
increase America's military power (since they insisted it was already overwhelmingly powerful), there
was little they could do in foreign affairs except to talk loudly and sign anti-Communist pacts and
manifestos. This explains Dulles's verbal bluster and "missile rattling" and his pactomania which kept
him running about the world signing documents which bound people to pursue anti-Communist
policies.
7. The unrealistic and un-historic nature of neo-isolationism meant that it could not actually be pursued
as a policy. It was pursued by John Foster Dulles, with permanent injury to our allies, the neutrals, and
the personnel of American government, but it was not followed in the Pentagon and was followed only
halfheartedly by Eisenhower in the White House. The President sought to keep the moderate middle
group of voters in his camp by radiating his personal charm around the country, but the Pentagon
refused to follow Dulles's tactics of appeasing the neo-isolationists by refusing to defend their
departmental employees. When Senator McCarthy turned his extravagant charges of subversion and
treason from the State Department to the army, the employees of the latter were defended by Secretary
Robert Stevens, and McCarthy's downfall began. The neo-isolationist forces, although defeated at the
ballot box in 1960 and 1962, still continue in an increasingly irresponsible form under a variety of
names....
Much less obvious to the public eye than neo-isolationism, but equally in creating the history of 19451963, was the struggle within the American defense services as to what use would be made of the
nuclear weapon. In 1945 the atom bomb was at once hailed as the "absolute weapon" against which
there was "no defense." If true, this would have meant the end of the army and navy, since the existing
bomb, shaped like a hen's egg, 10 feet 8 inches long, 5 feet in diameter, and weighing 10,000 pounds,
could be handled in the B-29 only by modifying its bomb drop to widen the opening, and could not be
handled by the ground forces or by navy guns or carrier planes. Moreover, the range and intensity of its
destruction gave rise to immediate claims from the advocates of air power that massed ground forces,
slow-moving armored equipment, and all naval vessels, especially the expensive carriers and capital
ships, were made obsolete by the new weapon. These extravagant claims were made more critical in
their impact by the Strategic Bombing Surveys of World War II and the demobilization problems at the
war's end.
The advocates of air power from at least 1908 had made extravagant claims, usually based on future
rather than on presently available equipment, that the airplane provided the final supreme weapon
which made all other methods of warfare unnecessary. This was seen in the arguments of General
Giulio Douhet of Italy, General "Billy" Mitchell of the United States, and the refugee Russian airplane
designer Alexander de Seversky. Douhet as early as 1921 preached that the next war would be ended in
the first twenty-four hours by the total destruction of all enemy cities from the air; Mitchell in the mid1920's raised a great furor with his claims that land-based planes had made battleships and lesser naval
vessels obsolete; and Seversky, before, during, and after World War II, claimed that air power had made
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other arms needless. We have seen how these claims had a considerable and pernicious influence on
men's actions before and during World War II. Many airmen who did not believe these claims
nevertheless felt that they had to support them in order to obtain a large slice of their country's defense
funds from civilian politicians who were in no position to judge the merits of such claims.
The experience of World War II did not, at first glance, support the claims of the advocates of air
power. On November 3, 1944, the United States Secretary of War, on order of the President, set up a
committee of twelve to conduct a Strategic Bombing Survey to examine the contribution of strategic
bombing to final victory by evaluating bomb damage, assessing captured German and Japanese
documents, and interviewing the leaders of the defeated countries. The German survey, which came out
in 208 parts over several years, beginning in 1945, did not, on the whole, support the claims of the air
enthusiasts, but rather showed that the air-force contribution was much less than had been anticipated
or hoped and had become substantial, chiefly in transportation and in gasoline supplies, only after
October 1944, when Germany was already beaten (with tactical air force help) on the ground.
These conclusions were very unwelcome to the army air-force officers devoted to strategic bombing,
and especially to the airplane-manufacturing industry, which had reached the multi-billion dollar size
and hoped to retain at least some of its market after the war's end. In the last few months of the war
against Japan, at least $400 million worth of Boeing B-29's and parts were in action in the Pacific. Loss
of faith in strategic bombing would expose air-force officers and the air-force industry to a grim and
poverty stricken postwar world. Accordingly, it became necessary to both groups to persuade the
country that Japan had been defeated by strategic air power. The Strategic Bombing Survey of Japan
did not support this contention, although by concentrating on strategic bombing it helped to cover up
the vital role played by submarines in the destruction of the Japanese merchant marine, the equally vital
role played by the early Marine Corps work in amphibious warfare, and, above all, in the magnificent
job done by naval supply forces for all arms, including the strategic bombing bases themselves. The
protection and supply of these bases in the Marianas was in sharp contrast with the loss of B-29 bases
in continental China to Japanese ground forces, and showed to any unbiased outsider the need for a
balanced distribution of all arms in any effective defense system. In such a balanced system the role of
strategic bombing and of large long-range planes in general (as contrasted with tactical planes and
fighters) would obviously be less than either the air-force officers or the airplane industrialists
considered satisfactory.
Accordingly, it became urgent for these two groups and their supporters to convince the country
(1) that the atom bomb was not "just another" weapon but was the final, "absolute," weapon;
(2) that the atom bomb had been the decisive factor in the Japanese surrender; and
(3) that nuclear weapons were fitted only for air-force use and could not be, or should not be,
adapted for naval or ground-force use.
The first two of these points were fairly well established in American public opinion in 1945-1947, but
the third, because of atomic secrecy, had largely to be argued out behind the scenes. All three points
were largely untrue (or true only if hedged about with reservations which would largely destroy their
value as air-force propaganda), but those who used them were defending interests, not truth, even when
they insisted that the interests they were defending were those of the United States and not merely
those of the air force. In this controversy, the scientists, most of whom were naively defending truth,
were bound to be crushed. On the other hand, any dissident scientist could obtain access to money and
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support by making an alliance with the air force.
At the center of this problem was the struggle for control of nuclear reactions within the United States,
but the ultimate objective of the struggle was the right to exercise influence on the subdividing of the
national defense budget. Thus, the struggle centered on the personnel of the Atomic Energy
Commission (AEC) and especially of its scientific advisory panel of outstanding scientists, the socalled General Advisory Committee (GAC) of the AEC. And at the center of the whole struggle was
Robert Oppenheimer.
Robert Oppenheimer, wartime director of the Los Alamos laboratory which made the A-bombs, was
not a great scientist of the class including Einstein, Bohr, or Fermi, but his knowledge of the subject
was profound, and wider than most. He was very well educated in cultural matters, especially literature
and music, and could quote Homer in Greek and the Bhagavad-Gita in Sanskrit at appropriate
occasions. His social and, to a greater extent, his political education did not begin until about 1935,
when he was thirty-one and already a full professor at California Institute of Technology and at the
University of California. His political naivete continued until after the war. He had always been a
persuasive talker, got along very well with a wide diversity of people, and during the war he
discovered he was an excellent administrator. By 1947 he was the chief scientific adviser to most of the
important agencies of the government, informally, if not formally, since other scientists frequently
consulted with him before giving their decisions on problems. From 1947 on, he was chairman of the
GAC, as well as a member of the Atomic Energy Committee of the Defense Department's Research and
Development Board; of the National Science Foundation; of the President's Scientific Advisory Board;
chairman of the board of the Bulletin of Atomic Scientists; and consultant on atomic energy to the CIA,
to the State Department, to the National Security Council, to the American delegation to the United
Nations, and to the Joint Congressional Committee on Atomic Energy (the congressional watchdog
over the AEC)—in all, he was on a total of thirty-five government committees..
In spite of Oppenheimer's exalted positions in 1947-1953, which included the directorship of the great
Institute for Advanced Study in Princeton (American copy of All Souls College at Oxford), there was a
shadow on Oppenheimer's past. In his younger and more naive days he had been closely associated
with Communists. Certainly never a Communist himself, and never, at any time, disloyal to the United
States, he had, nonetheless, had long associations with Communists. Partly this arose from his political
inexperience, partly from the prevalence of Communists among the intellectual circles of the San
Francisco Bay region where he spent the years 1929-1942 as a professor, and partly from his sudden
and belated realization of the terrible tragedy of the world depression and of Hitler about 1936. At any
rate, his brother, Frank Oppenheimer, and the latter's wife were Communist Party workers in San
Francisco at least from 1937 to 1941, while Oppenheimer's own wife, whom he married in 1940, was
an ex-Communist, widow of a Communist who had been killed fighting Fascism in Spain in 1937.
The Oppenheimers continued to have friends who were Communists, and Oppenheimer contributed
money until the end of 1941, through Communist channels, to Spanish Refugee Relief and to aid for
migratory farm workers in California. As late as 1943 he had some kind of remote emotional
relationship with a girl, daughter of a fellow professor, who was a Communist. All of this "derogatory"
information was known to General Groves and to Army Intelligence, G-2, before Oppenheimer was
made head of Los Alamos in 1942. The appointment was made because his talents were urgently
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Chapter 62—The Factors
needed, and there was no reason to feel that he was a Communist himself or that he had ever been, or
would ever be, disloyal to the United States.
For the next four years Oppenheimer was kept under constant surveillance by M-2; his conversations
secretly recorded, telephone calls and letters monitored, and all his movements shadowed. In 1954,
under oath, General Groves testified to his belief in Oppenheimer's discretion and loyalty, and he
repeated this in his memoirs, published in 1962. The significance of all this is that this ancient
evidence, plus Oppenheimer's alleged opposition to efforts to make the H-bomb in 1946-1949, was
used by the advocates of air power, the neo-isolationists, the exponents of massive retaliation, and the
professional anti-Communists in 1953-1954 to destroy Oppenheimer's public reputation, to end his
opportunity for continued public service, and to discredit the preceding Democratic administration in
Washington. It was an essential element in the massive retaliation, neo-isolationist, McCarthyite,
Dulles interregnum of 1953-1957, which ran almost exactly parallel to the post-Stalin interregnum in
the Soviet Union during the same years.
The last significant factor in this postwar period of eighteen years was provided by the events in the Far
East. In this factor also there are three sub-periods, of which the most significant was the middle one
from "the loss of China" to the Communists late in 1949 to the Geneva "Summit Conference" of July
1955. In this period the Far East was in confusion over the Chinese victory in mainland China; the
outbreak of war in Korea in June 1950; the Korean armistice of July 1953; the Indo-Chinese war and
armistice in 1953-1954; and the threatened Chinese Communist attack on Quemoy, if not on Formosa,
in the winter of 1954-1955. The earlier period of Far Eastern history saw the slow decay of the
Nationalist Chinese regime of Chiang Kai-shek and the revival of Japan, while the later, third, period
centered upon the growing strength and dangerous pugnacity of "Red" China. This third period ended
with the Chinese attack on India in October 1962 and the break between Communist China and the
Soviet Union at the end of 1962.
The interweaving of these six factors makes up a major part of the history of the period 1945-1963. In
each case we can discern three stages, of which the middle one is the most critical. The dates of these
stages are not, of course, the same for all six factors, but they are close enough so that the whole
eighteen years can be examined successfully as three consecutive sub-periods organized around the
central core of the nuclear rivalry between the United States and the Soviet Union. Accordingly, we can
examine this whole period in the three stages:
(1) American atomic supremacy, 1945-1950;
(2) the race for the H-bomb, 1950-1957; and
(3) the race for the Intercontinental Ballistic Missile (IBM) from 1957 to early 1963.
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Chapter 63—The Origins of the Cold War, 1945-1949
Chapter 63—The Origins of the Cold War, 1945-1949
The surrender of Japan left much of the world balanced between the mass armies of the Soviet Union
and the American nuclear monopoly. It was an unequal balance, because the United States would not
have used its atomic weapon against the Russians for anything Russia was likely to do. Stalin realized
this, and largely ignored the atom bomb, although his designer, Andrei Tupolev, successfully copied
four B-29's captured by the Russians in the Far East in 1944 and brought these to production (as Tu-4's)
in 1947. Otherwise, the Kremlin's assessment of the situation was quite mistaken.
Stalin assumed that the United States would soon relapse into isolationism, as it had done after World
War I, and would be fully occupied with a postwar economic collapse like that of 1921. Accordingly,
he regarded Britain as the chief obstacle to his plans, and, seeing that it was both small and weak, with
most unpromising economic prospects, he proceeded to carry out his designs with relatively little
attention to the reactions of either English-speaking Power. These plans involved the creation of a
Soviet-controlled buffer fringe of satellite states on the Soviet frontiers in all areas occupied by Soviet
armies, and Communist coalition governments beyond these areas. In both cases the local Communists
would be controlled by leaders of their own nationality who had been trained under Comintern auspices
in the Soviet Union. In some cases, these Communist leaders had been exiles in Russia for more than
twenty years.
The chief error in Stalin's postwar strategy was his total misjudgment of President Truman and, on a
wider stage, of the American people as a whole. Some of this error undoubtedly arose from Stalin's
ignorance of the world outside Russia and from the fact that his terrorist tactics in Russia in the 1930's
had made it difficult for him to get reliable foreign information from his diplomatic corps, which was
shielded from contact with foreigners and was more concerned with sending Stalin the information he
expected than with that derived from independent observations. In any case, the Kremlin misjudged
both Truman and the American people.
Truman, in spite of a natural suspicion of the Russians, ended the war with every intention of trying to
carry out Roosevelt's original plans for postwar cooperation with the Soviet Union. In addition, having
learned much from the 1920's, he intended to make every effort to avoid either a postwar economic
depression or a relapse into isolationism. His success in avoiding these events made it possible to
reverse his inherited policy of cooperation with Russia when Stalin's actions in 1946-1947 made it clear
that cooperation was the last thing the Kremlin wanted. These actions appeared most clearly in regard
to Germany.
We have already noted the Soviet subversion of Poland, Romania, and Bulgaria by native Communists
returning from Russia under the protection of the Soviet armies. The same thing occurred, but more
gradually, in eastern Germany. There the Communists at first pretended to cooperate with any "antiFascist" groups, but their unwillingness to cooperate with the Western Powers in the administration of
Germany appeared almost at once. They gradually closed off their occupation zone and refused to carry
out the earlier agreements to treat Germany as a single administrative and economic unit. This meant
that the usual economic exchange within Germany of food from the agricultural eastern portion of the
country for the industrial products of western Germany was broken.
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Chapter 63—The Origins of the Cold War, 1945-1949
Instead, East German food was drained to the Soviet Union. To prevent starvation of the West
Germans, the United States and Britain had to send in hundreds of millions of dollars' worth of food
and other supplies. On May 3, 1946, General Lucius D. Clay, head of the American Military
Government in Germany, informed the Russians that no future agreements would be made to ship West
German industrial equipment as reparations to Russia until the Russians agreed to treat Germany as an
economic unit and to give some accounting of their reparations plundering of East Germany. Both
points referred to open violations of the Potsdam Agreement regarding the treatment of Germany.
The Soviet Union justified these and other violations of earlier agreements on the urgent need for their
own economic rehabilitation. There can be no doubt that the Soviet Union had suffered great economic
damage from the war, possibly the loss of a quarter of its prewar wealth, more than all the other victor
countries combined, but the Kremlin could have obtained much more by continued cooperation with
the United States than it did from its postwar policy of studied enmity. This enmity was based on a
number of factors: In the first place, Stalin was misled by the false ideology of Marx and Lenin which
spoke of the inevitable struggle of capitalism and Communism, of the inevitable economic breakdown
of the capitalist system, and of the capitalist endeavor to avoid such a breakdown by militarist
aggression. On this basis, Stalin could not believe that the United States was prepared to be generous
and cooperative toward the Soviet Union.
Moreover, Stalin was worried by the weakness in depth of the Soviet system from economic damage
and from ideological dissent. The war had been fought on an ideology of patriotism and nationalism,
not as a Communist ideological struggle, and the Kremlin by 1946 was eager to get back to its
Communist ideology, partly as justification of the new hardships of reconstruction under the fourth
Five-Year Plan (March 13, 1946) and partly to overcome the Russian soldiers' admiration for what they
had seen of the West. These soldiers, for example, were amazed to discover that the "exploited"
German workers of whom they had heard so much had standards of living several times higher than
those of the ordinary Russian. The discovery that ordinary Germans had watches, even wristwatches,
was an astounding revelation to the Russian soldiers, who proceeded to seize these wherever they saw
them.
A third factor guiding Soviet behavior was the discovery that there was no mass support for Russia or
for Communist ideology in eastern and central Europe, especially among the peasants, and that the
buffer of Communist states along Russia's western border would have to be built on force and not on
consent. The governments of these states could be recruited from men of the respective nations who
had been living in the Soviet Union for years under endless Communist indoctrination, but the unindoctrinated masses in each country would have to be held in bondage by Soviet military forces, at
least until local Communist parties and local secret-police organizations subservient to Moscow's
orders could be built up. The urgent need for this, from the Kremlin's point of view, was shown, when
Austria and Hungary, although under Soviet military occupation, were permitted relatively free
elections in November 1945. Both resulted in sharp defeats for the local Communist parties. Because
such an outcome could not be permitted in the buffer satellites farther east, elections there had to be
postponed until the local governments were sufficiently communized and entrenched to be able to
guarantee a favorable outcome to any election.
It was this situation which made it impossible, in Russia's view, to carry out the promises made at Yalta
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Chapter 63—The Origins of the Cold War, 1945-1949
and elsewhere about free elections in Poland or other countries neighboring on Russia. The United
States, through Secretary of State Byrnes, assured the Kremlin that it wanted these neighboring states
to have "democratic" governments "friendly" to the Soviet Union. The Kremlin knew, although Byrnes
apparently did not, that these were mutually exclusive terms. They insisted these governments must be
"friendly," while he insisted that they must be "free" and "democratic" in the Western sense. Since the
Kremlin assumed that Byrnes knew as well as they did of the contradiction in terms here, they assumed
that his insistence on "democratic" governments in eastern Europe indicated that he really wanted
governments unfriendly to the Soviet Union. They were willing to call any governments which were
friendly "free" and "democratic," but Byrnes refused to accept this reversal of the ordinary American
meaning of these words..
These disputes over Germany and eastern Europe, which were regarded in the West as Soviet violations
of their earlier agreements at Yalta and Potsdam, were regarded in Moscow as evidence for Stalin's
conviction of the secret aggressive designs of the West. By the winter of 1945-1946, the Russian
peoples were being warned of the dangers from the West. This began in 1945 with attacks on
''cosmopolitanism'' and prohibitions of Soviet soldiers "fraternizing" with aliens, especially soldiers of
the United States or Britain, in the course of their occupation duties. Early in November 1945, Molotov
warned the Moscow Soviet that Fascism and imperialist aggression were still loose in the world.
Similar speeches were made by other Soviet leaders, including Stalin. By the spring of 1946,
xenophobia, one of the oldest of Russian culture traits, was rampant again. In September 1946, and
again in September 1947, Andrei Zhdanov, the Kremlin's leader of the international Communist
movement, made speeches which were simply declarations of ideological war on the West. They
presented the Soviet Union as the last best hope of man, surrounded by prowling, capitalist beasts of
prey seeking to destroy it. On this basis the Soviet Union found it impossible to cooperate with the
West or to accept the American economic assistance in reconstruction which was offered. The
American Congress in the last renewal of the Lend-Lease Act in 1945 had forbidden use of these funds
for postwar rehabilitation, but other funds were made available. For the transitional period these
amounted to about $9 billion. These transitional funds were made available on a humanitarian and
economic basis and not on political or ideological grounds. Accordingly, they were available to the
Soviet Union and other areas under Communist control in accordance with the provisions of each fund.
For example, the United Nations Relief and Rehabilitation Administration (UNRRA), was an
international organization which handled goods worth $3,683 million, of which 65 percent was
provided from the United States, 15 percent from Britain, and 3.5 percent from Canada. Its grants went
to 17 countries with China first ($518 million), Poland next ($478 million), Italy with $418 million,
Yugoslavia with $416 million, and the Ukraine, seventh, with $188 million.
Beyond the primary, humanitarian aim of most United States assistance was the desire to get local
economies functioning, and efforts to further America's basic conviction of the value of a high level of
international trade on a multilateral basis. The United States was opposed to all restrictive trade
measures such as autarchy, bilateralism, or quotas, and had as its ultimate aim the restoration of
multilateral trade at the highest possible level, with freely convertible international monetary
exchanges. It was convinced that such a system would be advantageous for all peoples, and did not see
that it was anathema to the Soviet system, which had restrictions and quotas on economic life, even
within the country, so that, while most Russians lived in poverty, a privileged minority, buying in
special stores with special funds and special ration cards, had access to luxuries undreamed of by the
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ordinary person.
In the American plans for economic recovery, Great Britain, as the world's greatest trader, had a special
role. The United Kingdom could not exist without very large imports, but it could not pay for these
without large exports. Such exports had to be much larger than before the war, even to pay for the
prewar level of imports, because many of Britain's prewar sources of overseas incomes from
investments, shipping, insurance, and so on, had been drastically reduced by the war. In 1945 the
British balance-of-payments deficit was about 875 million pounds sterling, and in 1946 it was still 344
million pounds. To tide over this deficit until British exports could recover, the United States in July
1946 provided Britain with a credit of $3,750 million, with interest at 2 percent and repayment in fifty
annual installments to begin on December 31, 1951. The interest was to be waived whenever the
British trade balance would not pay for imports on her 1936-1938 level. In return for this, Britain gave
rather indefinite promises to work to reduce its bilateralism in trade, especially imperial preference, and
to release, as soon as feasible, its blocked sterling accounts.
Lend-Lease was ended in September 1945, with the Japanese surrender, and all claims were settled
with Britain under an agreement of December 1945. This canceled the American grants under LendLease of over $30,000 million and gave Britain permanent establishments on British soil, with supplies
in Britain or en route, for a settlement of $650 million payable on the same terms as the British loan
just mentioned.
Assistance similar to these was available to the Soviet Union but was generally rebuffed. Even in 1945,
efforts to establish international emergency committees for coal, transportation, and economic recovery
in Europe were boycotted by the Soviet Union, with the exception of the one on transportation, which
was necessary to supply the Russian troops. Little cooperation could be obtained from Soviet
authorities for handling or aiding refugees, except for their demands for the return, to concentration
camps or slave labor, of those who had fled from eastern Europe. On October 15, 1945, Moscow signed
an agreement similar to Britain’s by which they agreed to pay, after July 1954, for the quarter-billion
dollars’ worth of goods on their final Lend-Lease demands yet unfilled when Lend-Lease ended; but
they refused to discuss any general Lend-Lease settlement and they refused to negotiate for a general
loan, similar to that made to Britain, although Stalin had asked for one of $6 billion as early as January
1945. An American offer to discuss such a credit was rejected by Russia as “financial aggression” in
March 1946.
The offer was renewed in April and again in September 1946, but the American aims of multilateral
trade free of artificial restraints except tariffs, like the American insistence on free elections, were
regarded in Moscow as clear evidence of America’s aggressive aims. One significant, but perhaps not
essential, factor in the deterioration of the relations of the Big Three in 1945 and 1946 lies in the
provincial ignorance of the three foreign ministers, Byrnes, Bevan, and Molotov, who conducted the
negotiations. All three were men of limited background and narrow outlook who saw the world from a
narrow nationalistic point of view and were incapable of appreciating the outlook of different cultures
or the different values and verbal meanings to be found in alien minds. Nevertheless, it does seem clear
that the postwar breakdown of cooperation was inevitable in view of the conceptions of public
authority, state power, and political security to be found in all three countries.
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Chapter 63—The Origins of the Cold War, 1945-1949
On the whole, if blame must be allotted, it may well be placed at the door of Stalin's office in the
Kremlin. American willingness to cooperate continued until 1947, as is evident from the fact that the
Marshall Plan offer of American aid for a cooperative European recovery effort was opened to the
Soviet Union, but it now seems clear that Stalin had decided to close the door on cooperation and
adopted a unilateral policy of limited aggression about February or March of 1946. The beginning of
the Cold War may be placed at the date of this inferred decision or may be placed at the later and more
obvious date of the Soviet refusal to accept Marshall Plan aid in July 1947. The significance of the
latter date is revealed by the fact that Czechoslovakia, which accepted on July 7th, was forced by
Stalin's direct order to Prime Minister Gottwald to reverse this decision on July 10th.
One significant encouragement to Soviet aggression came from the almost total demobilization of the
American war effort. Pressure from special-interest groups such as business, labor unions, and
cattlemen, aroused public opinion for the ending of price controls and rationing and obtained
cooperation from an anti-New Deal coalition in Congress to end most of the nation's economic controls
in 1946. At the same time came almost total military demobilization. In spite of Ambassador
Harriman's explicit warnings from Moscow in April 1945, and Stalin's declaration of cold warfare in
February 1946, the American government carried out the demobilization plan of September 1943,
which was based on individual rather than on unit discharges. This destroyed the combat effectiveness
of all units by the end of 1945, when almost half the men had been demobilized, and every unit, as a
result, was at 50 percent. The army's 8 million men in August 1945 was at 4 1/4 million by the end of
the year and reached 1.9 million by July 1946. The air force fell from 218 combat groups to 109 groups
in the last four months of 1945. The navy fell from 3.4 million men in August 1945 to 1.6 million in
March 1946.
The most critical example of the Soviet refusal to cooperate and of its insistence on relapsing into
isolation, secrecy, and terrorism is to be found in its refusal to join in American efforts to harness the
dangerous powers of nuclear fission. Long before the test at Alamogordo, some of the nuclear
scientists, spurred on once again by Szilard, were trying to warn American political leaders of the
unique character of the dangers from this source. Centered in the Chicago Argonne Laboratories, this
group wished to prevent the use of the bomb on Japan, slow up bomb (but not general nuclear)
research, establish some kind of international control of the bomb, and reduce secrecy to a minimum.
Early in April 1945, Szilard wrote to President Roosevelt to this effect, and, on the latter's death, sought
out Byrnes and repeated his views verbally. The future secretary of state found difficulty in grasping
Szilard's arguments, especially as they were delivered in a Hungarian accent, but the new President
Truman soon set up an "Interim" Committee to give advice on nuclear problems. This committee, led
by Secretary of War Stimson, was dependent on its scientific members, Bush, Conant, and Karl T.
Compton, for relevant facts or could call on its "scientific panel" of Oppenheimer, Fermi, Arthur H.
Compton, and E. O. Lawrence for advice. All these scientists except Fermi were "official" scientists,
deeply involved in governmental administrative problems involving large budgets and possible grants
to their pet projects and universities, and were regarded with some suspicion by the agitated, largely
refugee, scientists in the Manhattan District laboratories. These suspicions deepened as the "official"
scientists recommended use of the bomb on Japan "near workers' houses."
At Chicago seven of the agitated scientists, led by James Franck of Göttingen (Nobel Prize, 1925) and
including Szilard and Eugene Rabinowitch, sent another warning letter to Washington. They forecast
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Chapter 63—The Origins of the Cold War, 1945-1949
the terror of a nuclear arms race which would follow use of the bomb against Japan. Later, in July
1945, they presented a petition seeking an international demonstration and international control of the
new weapon. Szilard obtained sixty-seven signatures to this petition before it was blocked by General
Groves and Arthur Compton, using military secrecy as an excuse. After Hiroshima this group formed
the Association of Atomic Scientists, later reorganized as the Federation of Atomic Scientists, whose
Bulletin (BAS) has been the greatest influence and source of information on all matters concerned with
the political and social impact of nuclear weapons. The editor of this amazing new periodical was
Eugene Rabinowitch..
The energetic lobbying of this group of atomic scientists had a considerable influence on subsequent
atomic history. When the "official scientists," late in 1945, supported the administration's May-Johnson
bill, which would have shared domestic control of atomic matters with the armed services, the BAS
group mobilized public opinion behind the junior senator from Connecticut, Brian McMahon, and
pushed through the McMahon bill to presidential signature in August 1946. The McMahon bill set up
an Atomic Energy Commission (AEC) of five full-time civilian commissioners, named by the
President, with David Lilienthal, former TVA czar, as chairman. This commission, from August 1946,
had ownership and control of all fissionable materials (uranium and thorium) from the mine to the final
disposal of atomic wastes, including control of all plants and process patents, with the right to license
private nuclear enterprises free of danger to society. The AEC as it functioned was a disappointment to
the BAS scientists. They had sought freedom from military influence and reduced emphasis on the
military uses of nuclear fission, free dissemination of theoretical research, and a diminution of the
influence of the official scientists. They failed on all these points, as the AEC operated largely in terms
of weapons research and production, remained extravagantly secretive even on purely theoretical
matters, and was, because of the scientific ignorance of most of the commissioners, inevitably
dominated by its scientific advisory committee of "official" scientists led by Oppenheimer.
To the BAS group and to a wider circle of non-scientists, the AEC was a more or less temporary
organization within the United States, whose work would be taken over eventually by a somewhat
similar international organization. As a first step in this direction, the United Nations, at the suggestion
of Bush and Conant and on the joint invitation of three heads of English-speaking governments
(President Truman, Prime Minister Attlee, and Prime Minister Mackenzie King of Canada), set up a
United Nations Atomic Energy Commission (UNAEC) of all members of the Security Council plus
Canada (January 1946). A State Department committee led by Undersecretary Dean Acheson and
David Lilienthal and a second committee of citizens led by Bernard Baruch spent much of 1946 in the
monstrous task of trying to work out some system of international control of nuclear energy. The task
of educating the non-scientists generally fell on Oppenheimer, who gave dozens of his brilliant,
extemporaneous, chalk-dusted lectures on nuclear physics The final plan, presented to the UN by
Baruch on June 14, 1946, provided an international control body similar to the AEC. It would own,
control, or license all uranium from the mine through processing and use, with operation of its own
nuclear facilities throughout the world, inspection of all other such facilities, absolute prohibition of
nuclear bombs or diversion of nuclear materials to non-peaceful purposes, and punishment for evasion
or violation of its regulations free from the Great Power veto which normally operated in the Security
Council of UN. The vital point in Baruch's plan was that it would go into effect by stages so that
inspection and monopoly of nuclear materials would be operative before the American atomic plants
were handed over to the new international agency and before the American stockpile of nuclear bombs
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was dismantled.
This extraordinary offer, an offer to give up the American nuclear monopoly, technical secrets, and
weapons to an international agency, in return for a possibly ineffective system of international
inspection, was brusquely rejected by Andrei Gromyko on behalf of the Soviet Union within five days.
The Soviet spokesman demanded instead a reverse sequence of stages covering
(1) immediate outlawing and destruction of all nuclear weapons, with prohibition of their
manufacture, possession, or use;
(2) a subsequent agreement for exchange of information, peaceful use of atomic energy, and
enforcement of regulations; and
(3) no tampering whatever with the Great Power veto in the UN.
Since only the United States had the atom bomb at the time, the adoption of this sequence could require
the United States to give up the bomb without any assurance that anyone else would do anything, least
of all adopt any subsequent control methods, methods which might allow the Soviet Union to make its
own bombs in secret after the United States had destroyed its in public. The nature of this Soviet
suggestion shows clearly that the Soviet Union had no real desire for international control, probably
because it was unwilling to open the secret life of the Soviet Union, including bomb-making, to
international inspection.
The Soviet refusal of the American efforts at international nuclear control, like their refusal of
American loans and economic cooperation, provides some of the evidence of the Kremlin's state of
mind in 1946. This evidence became overwhelming in 1947 and 1948, when Soviet aggression
appeared along the whole crescent from Germany, across Asia, to the Far East.
In Germany, as we have seen, the area under Soviet occupation was increasingly isolated from the West
and increasingly communized internally. The Soviet military forces encouraged the formation of a
dominant German Socialist Unity Party (SED) under Communist control. Local provincial elections in
the winter of 1946-1947 gave victory to the SED in the Soviet zone and to democratic parties, the
Christian Democrats and Social Democrats, in the provinces of the three Western zones.
Austria was also divided into four areas of military occupation, except that it had a single central
government of its own under the old Social Democrat leader, Karl Renner, who had also been
chancellor in 1919. While the Anglo-Americans supported the Austrians against starvation by the use
of UNRRA assistance, the Soviet zone was systematically ransacked. This destroyed all Communist
influence in the country, as was clear when the election of November 1945, reduced them to four seats
in an assembly of 165 members. Only in May 1955, two years after Stalin's death, was it possible to get
Soviet consent to a peace treaty and withdrawal of all four occupying forces (October 1955).
Even the friends of Russia suffered from Stalin's pressure and his insistence that the Kremlin must
remain the center for Communist decisions throughout the world. In Yugoslavia, where Tito was
originally as anti-Western as Stalin himself, Moscow's efforts to dominate Yugoslavia alienated Tito
completely by a combination of economic, diplomatic, and propaganda pressure. The rivalry between
the two Slavs came to a head at the end of 1947 when Tito tried to build up a non-Russian Communist
bloc by signing friendship treaties with Bulgaria, Hungary, and Romania. By March 1948, a complete
break between Belgrade and Moscow was reached. Tito took his place next to Trotsky in Stalin's list of
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Chapter 63—The Origins of the Cold War, 1945-1949
the damned, and the next few years were filled with efforts to overthrow Tito, and the purging of Tito
sympathizers by Stalin's cooperative jackals in the other Communist satellites.
Farther east, strong Soviet pressure had been put on Greece, Turkey, and Iran since 1945. On Greece
this pressure came through the Communist regimes in Albania, Yugoslavia, and Bulgaria, but in Turkey
and Iran it came from the Soviet Union directly. These pressures were probably designed to bring into
power in the three countries governments relatively favorably inclined toward the Soviet Union to the
extent that the latter could obtain a veto power over any collaboration of the three with the Western
Powers, especially with Great Britain. This was an effort in which Stalin had few good cards and which
showed his ignorance of political conditions in countries outside his own. In these three, as in other
countries, most people desired two things: political independence and economic aid. Neither of these
could be or would be obtainable from Stalin, the first because it violated his imperious nature and the
second because of economic scarcity in the Soviet Union itself.
Nevertheless, the effort was made. In Greece the election of March 31, 1946 gave the Popular Party
(which supported the king) 231 out of 354 seats in the Chamber. The following September a plebiscite
on the return of the monarchy gave 69 percent favorable votes. The Communist groups refused to
accept these results and by 1946 were carrying on guerrilla warfare in the mountains, using the three
adjacent Communist states as bases for supplies, training, and rest areas. A commission of the Security
Council of the UN studied the situation in the early months of 1947 and condemned Greece's three
northern neighbors, but a Soviet veto stopped any further action by the UN.
Instead, the guerrilla leader "General Markos" set up a Greek Provisional government in the mountains,
but alienated much support among Greece's impoverished peasants by the banditry of his guerrillas and
especially by their kidnapping of thousands of peasant children who were smuggled into the three
Communist countries for Communist indoctrination. Many of these children did not return for eight or
ten years, and hundreds vanished forever. Large groups returned from Albania as late as 1963.
The Soviet pressure on Turkey was uncalled for and totally unremunerative. We have already noted
that the Soviet-German accords of 1940-1941 showed Soviet ambitions for bases "on the Bosporus and
the Dardanelles" and for a sphere of political influence "south of Batum and Baku in the general
direction of the Persian Gulf." Thus in this area, as in the Far East, Stalin resumed the expansionist
aims of czarist Russia. At Potsdam, Stalin had looked even farther afield by asking for a trusteeship in
the former Italian colony of Libya and a less definite influence in Eritrea on the western shore of the
Red Sea. These aims were formally demanded by Moscow in September 1945 and in April 1946
(Conference of Foreign Ministers in Paris).
As early as March 19, 1945, Russia denounced its treaty of friendship with Turkey and within a few
months made demands, both official and unofficial, for Kars, Trebizond, and other areas of
northeastern Turkey. Anti-Turkish agitation was encouraged among the Kurds (a non-Turkish people
living at the base of the Anatolian peninsula and divided among Turkey, Iran, and Iraq), and the
Georgia Socialist Soviet Republic demanded eight Turkish provinces covering much of the Black Sea
coast and Kurdistan. On August 8, 1946, Molotov demanded a joint Soviet-Turkish defense of the
Straits. Only after Stalin's death, on May 30, 1953, did the Kremlin renounce the earlier territorial
demands on Turkey, but by that time the alienation was complete: Turkey had been driven into the
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Western camp, soon allied with Greece and Yugoslavia in a defensive alignment against the north
Balkan Soviet satellites (August 1954), and became the eastern pillar of NATO.
The Soviet aggressions on Iran began in 1945 when Soviet-sponsored Communists, under the
protection of the Russian armies occupying northern Iran, set up "independent" Communist
governments at Tabriz and in Iranian Kurdistan. These were apparently intended to be incorporated into
Soviet Azerbaidzhan with the Kurdish areas to be taken from Turkey, but the failure of the latter
scheme made this impossible. Nevertheless, the Russian Army refused to evacuate northern Iran in
March 1946, as it was bound to do by the agreement of January 29, 1941, which had admitted it. Only
in May did Iran win Soviet evacuation of its forces by agreeing to form a joint Soviet-Iranian oil
company to exploit the petroleum resources of northern Iran (a project which never was fulfilled).
By the end of 1946 Britain found the burden of providing military and economic aid to Greece and
Turkey too heavy for its over-strained resources. It was, moreover, eager to overcome the American
aloofness in the Near East, where it felt it was bearing much of the Soviet pressure alone. Accordingly,
in February 1947, it threatened to withdraw completely from Greece and Turkey by April 1st. On
March 12th the American President enunciated the "Truman Doctrine" to a joint session of Congress.
This stated that "it must be the policy of the United States to support free peoples who are resisting
attempted subjugation by armed minorities or by outside pressures." He asked for financial assistance
to "free peoples to work out their own destinies in their own way." His request for $400 million for aid
to Greece and Turkey was granted, after considerable debate, in May 1947. Two weeks later, at
Harvard's commencement, Secretary of State General George C. Marshall enunciated the "Marshall
Plan," which offered American economic support for a European Recovery Program which would
include the Soviet Union and other Communist states. Once again Stalin's ignorance committed him to
an unrewarding path. He rejected this offer, and forced Czechoslovakia, which had previously
accepted, to do the same.
The path Stalin was following took a more aggressive turn in 1947 and 1948. This involved complete
Soviet domination of the area already under Communist control, the shift of Communist parties from
coalition to opposition in other areas, the instigation of Communist outbreaks in "colonial" areas
(especially in the Far East), and the expulsion of the Western Powers from their enclave in Berlin. All
this was to be achieved while avoiding an open clash with the United States. As part of this process,
which was badly bungled everywhere except in Czechoslovakia, the Communists withdrew from the
"bourgeois" coalition governments which they had joined in 1944-1945: in Belgium in March 1947, in
France and Italy in May, and in Austria in the autumn. At the same time, agitation from Communistdominated trade unions was increased, and the first postwar large-scale strikes began at the end of the
year. As part of this same harassment, the Soviet Union in the UN vetoed applications for membership
by Italy and Finland.
In the states already under Communist control, the Soviet influence was intensified by efforts to
establish a system in which the local parties and secret police were controlled by Soviet agents in the
Russian embassies. As part of this effort, the Third International, or Comintern, which had been
dissolved in theory by Stalin in December 1943 (but had continued to operate secretly out of Moscow),
was reestablished under the new name "Cominform." This was done under Zhdanov's direction at a
meeting of representatives of the Communist parties of France, Italy, Poland, Bulgaria, Romania,
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Chapter 63—The Origins of the Cold War, 1945-1949
Yugoslavia, Hungary, and Czechoslovakia held in Poland in September 1947. The delegates were told
by Zhdanov and Georgi Malenkov of the Soviet Union that the world was now divided into two
antithetical forces—the "imperialist group" headed by the United States and the "peace-loving" group
headed by the Soviet Union—and that it was necessary to reestablish direct operational control of the
Communist parties.
The Soviet effort to obtain operational control of the party in Yugoslavia was vigorously resisted by
Tito. As a final effort in this direction, Stalin in February 1948 tried to force Yugoslavia into a
federation with more docile Bulgaria. Tito flatly refused. As a result, Yugoslavia was expelled from the
Cominform in June 1948, and all-out economic, propaganda, ideological, and political warfare was
begun by the Soviet bloc against Tito. The conflict was used by Stalin as an excuse to purge all
oppositionist Communists within the bloc as "Titoists." As part of this struggle, Tito closed the
Yugoslav border to the Greek guerrillas, with the result that they, with General Markos, ended their
disturbances in 1949, and Tito, became a recipient of American economic aid which eventually reached
$700 million. This process reached its climax with the achievement of a Greek-Yugoslav alliance in
1954.
A parallel effort by Stalin to take Czechoslovakia completely into the Communist camp was more
successful, and was, in fact, the most successful of his numerous efforts to increase his power in the
last six years of his life. In Czechoslovakia the Russian trained Communist Klement Gottwald had
become prime minister in a coalition government in July 1946. In February 1948, the Communist
minister of the interior replaced eight Prague police officials by Communists, was overruled by the
Cabinet, but refused to back down, calling out into the streets the workers' militia, armed factory
workers, and the police (all three under Communist control) to sustain his refusal. When the nonCommunist ministers protested and some threatened to resign, Gottwald threatened the ill President
Beneš with civil war if he did not dismiss twelve non-Communist ministers. Beneš, who had been
determined to seek support from Russia and not from the Western Powers since his unhappy
disillusionment with the latter at Munich in September 1938, yielded to Gottwald's demands on
February 25, 1948; he himself resigned on May 4th and died in September 1948. His friend, Foreign
Minister Jan Masaryk, son of the founder of Czechoslovakia, and the chief Czech advocate of a proWestern policy, died mysteriously by a fall from a window on May 10th. The Communist control of
Czechoslovakia was then complete.
Stalin's victory in Czechoslovakia was followed by an even more dramatic defeat, in an effort to eject
the United States, France, and Britain from their sectors in West Berlin. Apparently he believed that the
United States was considering a withdrawal from Berlin and that a Soviet push would hasten that event.
The former belief may have been based on good evidence, but the latter inference from it was quite
mistaken.
American policy in Germany for almost three years (April 1945-April 1948) was a confusion of
conflicting and ambiguous objectives. The basic idea, going back to 1942, was to make it impossible
for Germany to wage aggressive war again, but no plans had been made, even on a tentative basis, as to
how this goal should be sought. Two decisions left unsolved were whether Germany would be broken
up and how reparations might be obtained from her without building the country up economically to
provide these. Efforts by the State Department to settle these questions were blocked by other
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Chapter 63—The Origins of the Cold War, 1945-1949
departments, notably by the Civil Affairs Division of the War Department, which wanted them left
unsettled, and by the Treasury Department, which had totally different aims from State.
In a farsighted message from London in August 1944, Ambassador John Winant warned that lack of an
agreed reparations policy would inevitably lead to a breakdown of joint Allied control of Germany and
to a struggle with Russia for control of Germany. These wise words were ignored, and President
Roosevelt, to stop the bickering, postponed all decisions. Secretary of the Treasury Morgenthau took
advantage of this lacuna and of his close personal friendship with Roosevelt to push forward his own
pet scheme to reduce Germany to a purely agricultural state by almost total destruction of her industry,
the millions of surplus population to be, if necessary, deported to Africa! The secretary, supported by
his assistant secretary, Harry Dexter White, was deeply disturbed by Germany's history of aggression
and by her efforts to annihilate other "races," and was fairly certain that an American relapse into
isolationism would make it possible for Germany to try again. The only way to prevent such an
attempt, he felt, was to reduce Germany's industry, and thus her war-making capacity, as close to
nothing as possible. The resulting chaos, inflation, and misery would be but slight repayment for the
horrors Germany had inflicted on others over many years.
By personal influence Morgenthau obtained acceptance of a somewhat modified version of this plan by
both Roosevelt and Churchill at the Quebec Conference of September 1944. There is little doubt that
Churchill's approval had been won by his scientific adviser, Lord Cherwell, who had personal
animosities against Germany and had been the chief civilian advocate of indiscriminate bombing of
German cities.
The error at Quebec was quickly repudiated, but no real planning was done, and the Morgenthau Plan
played a considerable role in JCS 1067, the directive set up to guide the American military occupation
of Germany. In the same context the vague and unsettled reparations discussions at Yalta proposed that
reparations of $20,000 million, of which half to go to Russia, be obtained by the dismantling of
German industry. The JCS 1067 directive ordered that Germany be treated as a defeated enemy and not
as a liberated country, with the chief objective that of preventing future German aggression; no steps
were to be taken to secure its economic recovery. At the Potsdam Conference it was agreed that the
German economy should not be permitted to recover higher than a level which would sustain the
occupation forces and displaced refugee persons, with standards of living for the German people
themselves no higher than the average standards of living of other European countries. This rather
ambiguous level was subsequently defined as equal to the German standard of living of 1932, at the
bottom of the depression, the level, in fact, which had brought Hitler to power in January 1933.
It took more than two years of misery for Germany and frustrating relations with the Soviet occupation
forces to secure any change in these American objectives. During these two years, lack of equipment,
of fertilizers, and of encouragement to enterprise made German economic and social conditions worsen
until the end of 1947. Much of the country was still in ruins, housing was lacking, production of food
and coal were in almost total collapse, unemployment was very high, inflation was rampant, crime
(especially from bands of displaced persons, ex-Nazis, and juvenile delinquents) was widespread, and
the black market, using cigarettes as a monetary standard, was flourishing. Hunger and cold in the
winter took a considerable toll, and the Germans, for two years, experienced some of the misery they
had inflicted on others in the preceding dozen or more years.
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Chapter 63—The Origins of the Cold War, 1945-1949
Without a revival of industry, which was hampered by disarmament, reparations, and war damage, it
was impossible to resume the two vital necessities of recovery, increased mining of coal and export of
industrial products to pay for food imports. By the end of 1947, the Americans and British were
thoroughly tired of paying astronomical sums each year to keep food flowing to western Germany. All
efforts to make an economic reunion with eastern Germany failed because of Soviet insistence that
such a reestablishment of interchange of food for industrial products between the two halves of
Germany must be tied in with recognition of renewed Soviet claims for $10 billion in reparation
payments to be taken from current production, two points which had been unsettled by the wartime
agreements.
To revive German industry so that it could pay for imports of food, the Anglo-Americans devised a
reform of the German currency. The Soviet government objected violently to this, because it might
work but also because it would inevitably bind West Germany economically to the West: if the products
of a revived West German industry could not be exchanged for eastern European food, they would have
to be exchanged for food and raw materials from the West.
The German currency reform of 1948 is the fiscal miracle of the postwar world. From it came
(1) an explosion of industrial expansion and economic prosperity for West Germany;
(2) the tying of the West German economy to the West;
(3) an example and model for other western European countries (and for Japan) in economic
expansion; and
(4) a wave of prosperity for western Europe as a whole which continued year after year and
refuted completely the claims of Communists (or even Socialists) and, to a lesser extent, the
claims of American businessmen that they held the sole key to prosperity.
The reform, which went into effect on June 1, 1948, drastically reduced the volume of money in
western Germany by exchanging new Deutschemarks for the current Reichsmarks on a one-to-one
basis for the first 60 but on a 6.5-to-100 basis for all over 60. The new marks were blocked in banking
accounts in complicated ways which encouraged their use for production.
The Soviet Union used the monetary reform in West Germany as an excuse for its blockade of Berlin
which lasted in extreme form from June 24, 1948, to May 12, 1949 (although it had begun, on a partial
basis, on March 31st). It began in an atmosphere of rapidly rising East-West tension. In December
1947, the King of Romania was forced into abdication and exile. Shortly after the new year, the SED in
East Germany was purged of any leaders likely to show independence toward Stalin. The Czech
takeover in February 1948 was preceded by Soviet invitations to Bulgaria, Romania, Hungary, and
Finland to sign military alliances with Russia. All did so, but the Finnish delegates (in February) flatly
refused Stalin's demand that the Soviet have the right to move troops into Finland on its own decision.
In Italy, on April 18, 1948, desperate Communist efforts to get a strong foothold in the Italian
government were defeated in the first general elections under the new Republican constitution. This
election marks the turning point in postwar Italian history just as the simultaneous Berlin crisis and
monetary reform mark the turning point in postwar German history. The Communists had participated
in all three of Italy's postwar governments, under the Christian Democrat Prime Minister Alcide De
Gasperi, but went into opposition in his fourth government, set up on May 31, 1947 (as they did in all
countries of western Europe about the same time). The new constitution of January 1, 1948, required a
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Chapter 63—The Origins of the Cold War, 1945-1949
new election during which the fate of newly democratic Italy hung in the balance. The results were a
great defeat for the Communists, who obtained only 182 seats in their Popular Front alliance with the
Left-wing Socialists, compared to 307 Christian Democrat members in the Assembly of 570 seats.
The Soviet decision to push the Western Powers out of their occupation sectors in western Berlin was
part of this general Soviet movement. It was accompanied by claims that the whole city was an integral
part of the Soviet occupation zone of eastern Germany and that the Western Powers were present there
only on sufferance. To this the Western Powers answered that their presence in Berlin was on exactly
the same basis as that of the Russians—the right of conquest. The Kremlin at no time admitted that it
was establishing a blockade or that its aim was to eject the Western Powers. Its aims, rather, were to
close access to smugglers, criminals, and eventually to the new "illegal" marks introduced by the
monetary reform.
As we have seen, through the neglect of General Lucius Clay, as Eisenhower's deputy in 1945, the
Western Powers had obtained no Soviet recognition of their access rights to Berlin from the western
occupation zones of Germany. Rail, canal, road, and air traffic to the west were under Soviet control
and were constantly harassed by shifting regulations, delays, and open obstacles. By the early months
of 1948, rail and road routes were tied in knots, and air traffic along the recognized corridor was
jeopardized by trespassing Soviet fighter planes, intruding barrage balloons, and unannounced aircraft
gunfire. On May 5th a Russian fighter pilot, buzzing a British transport plane as it approached Berlin,
collided with it and killed himself and the fifteen persons on the British plane. On June 24th all traffic
by ground to Berlin from the west was closed, on a variety of excuses, and only the harassed air
corridor was open. Hopes of supplying the 2,000,000 persons in the western sectors of the city by air
were dim, as the population's need for food was over 2,000 tons a day and the need for coal for power
would be about 5,000 tons a day, excluding home heating. Nevertheless, the attempt began. Day after
day the operation became more intense and more efficient, with planes landing, originally at two, later
at three, airports, as fast as they could act in. This continued night and day, reached 3,000 tons in 362
planes on July 5th and erratically crept upward, in spite of deteriorating weather conditions and
lengthening darkness, through the winter.
In September the city government, broken up by Communist mobs, moved from the Soviet sector to the
western part of the city, but was replaced by a new, completely Communist city government in the
eastern sector. The Western Powers stopped all goods flowing between zones to the east and began to
merge the three zones of the Western Powers and took steps to create a Western German government to
rule over them in succession to the military occupation regime. To indicate the temporary nature of the
new system, until the reunion of eastern Germany could permit establishment of a permanent
government, the new regulations were called a Basic Law rather than a constitution, and were drawn up
by a council of delegates from the provincial assemblies rather than by an elected constituent assembly.
The new West German regime began to operate in May 1949, in the same month as the ending of the
Berlin blockade..
The Berlin blockade was won by the West because of the tireless efficiency of the airlift and the
resolute determination of the Berliners themselves to undergo any personal hardships or death rather
than to submit to another despotic government. Food was scarce, other supplies nonexistent, and heat
almost totally lacking through the winter of 1948-1949. Some starved, and many froze, but the
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Chapter 63—The Origins of the Cold War, 1945-1949
resistance did not waver, and the airlift went on. Night and day, in spite of weather, weariness, and
accidents (which killed 61 airmen), the planes roared in and out again. Soviet harassment of the airlift,
by night flying on instrument in the air corridor, was never sufficient to stop it, as the Soviet clearly
feared to push the dispute to open conflict. By September, planes were landing, around the clock, every
three minutes. Daily tonnage crept slowly upward, passed 5,000 tons a day as the New Year opened,
and by April passed 8,000 tons a day. One day that month, 1,398 planes, landing every 62 seconds,
delivered 12,941 tons of supplies. The Soviet blockade had been defeated.
On May 12th, after elaborate negotiations, the ground routes to the city were reopened. In eleven
months the American airlift had landed more than 1.6 million tons of freight in about 200,000 flights, a
demonstration which undoubtedly awed even the Russians. And, in the interval, West Germany had
been united from three zones to one and had obtained its own German government. The West German
elections of August 14, 1949, gave the Christian Democrats 31 percent of the vote, with 139 seats in the
Parliament. The chief opposition party, the Social Democratic, had 29 percent, with 131 seats. The
Communists, with 5 percent and 15 seats, were in fifth place, after two other minority groups, the
conservative, centralist Free Democrats with 52 seats, and the moderate, anti-Prussian, federalist
German Party with 17 seats. Though the first chancellor, Konrad Adenauer, an anti-Nazi who had been
imprisoned by Hitler, won his post by only a single vote, he kept it until 1963.
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Chapter 64—The Crisis in China, 1945-1950
Chapter 64—The Crisis in China, 1945-1950
The critical year 1949, which showed so clearly that the Kremlin's influence in Europe was severely
limited within the area of control of the Soviet armies, saw also a shift of Stalin's activity to the Far
East, where he tried new tactics in new circumstances. In Europe, outside the area of Soviet military
occupation, even in West Berlin, Stalin had met a series of defeats in Austria, Germany, Yugoslavia,
Greece, Turkey, Iran, and even Finland. In the Far East, where there was no extensive area of Soviet
military control, different tactics were both necessary and possible. There also Stalin was largely
defeated, although it took many years to demonstrate this fact. His defeat arose from his failure to
recognize that Communism could advance in backward areas only so long as it was anti-colonial rather
than Communist and worked to further local interests rather than those of Moscow. Stalin did not
recognize these truths, and Soviet success in adopting tactics based on them was largely reserved for
his successors after 1953.
At first glance the Communist success in ejecting the Nationalist government of Chiang Kai-shek from
China does not seem to support these remarks.... Stalin was like a shrewd old wolf of the north Siberian
forest. Understanding nothing outside his own experience, he never forgot what had happened to
himself. Stalin had been involved once before, in 1927, in an effort to communize China, and had
failed ... in the attempt.... [In] the Far East ... he wanted a weak China surrounded by small states in
which American influence was minimal. Such a weak China could be guaranteed by continued rule
under the Nationalist government, possibly with the Communists playing a role in a coalition, as the
United States seemed to wish. Through such a weak and divided China, Stalin could anticipate no
threat to himself either from American efforts or from China itself. To reduce the danger of either of
these alternatives, Stalin would have welcomed Communist or largely Communist regimes in Japan,
Korea, southeast Asia, and Indonesia, with an autonomous or independent Communist Chinese regime
in control of northwestern China, and possibly even Manchuria, as a buffer to the Soviet Union's own
territory.
At the end of the war in the Far East in 1945, it was clear to most observers that Roosevelt's pretense
that Nationalist China was a great Power, like his equally confused pretense that France was not a
significant Power, was mistaken. China's war effort against Japan weakened fairly steadily from Pearl
Harbor to the end. This decline resulted, very largely, from the almost total corruption of the regime,
which left the Chinese peasant in sullen discontent and roused open disfavor among many urban
groups, notably students. Many portions of the huge area of China were only nominally subject to
Chiang Kai-shek's rule, and a very considerable extent in the western and northwestern far interior
were subjected to the Communist regime of Mao Tse-tung and Chou En-lai, operating out of Yenan, in
barren northern Shensi Province.
Chiang Kai-shek was a man of considerable ability and experience, and ... was deeply involved ... with
cliques [Warlords and landlords] ... whose chief aims were to profit from their public positions and
from their close associations with Chiang and to resist, by any means, efforts to reform or strengthen
China which might reduce their opportunities for .. [personal gain]. These relationships, in 1945, in
some cases had continued for almost twenty years. American aid and the contributions of the Chinese
themselves disappeared in the network of ... mutually beneficial relationships which were spread
throughout the system and which made it impossible for the Chiang regime to provide a decent living
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Chapter 64—The Crisis in China, 1945-1950
for the people of China or even to defend itself against possible enemies, internal or external. Arms and
supplies from abroad were dissipated, vanishing in one way or another, sometimes forever; but on other
occasions they turned up subsequently in the hands of guerrillas or of the Communist enemies of
Chiang's regime. An enormous and incompetent army drained from the peasants, at low prices, large
requisitions which were sold, usually for private profit, at high prices into urban black markets. In the
two years following the defeat of Japan, $1,432 million in American assistance to China vanished in
one way or another, and at the end the Chinese Army and the Chiang regime was weaker than ever.
[The aid was secretly diverted to the communists.].
In spite of this weakness ... the Nationalist government refused to obey American advice either to
reform or simply to consolidate itself in the parts of China it still controlled. It was determined to
destroy the Communist regime, especially when Mao began to take steps to consolidate the buffer area
which he and Stalin wished to establish in northwestern and northern China. This determination
became a panic to prevent the Russian forces in Manchuria from turning over that rich area to the
Communist units. The Soviet forces there, after looting the area under the guise of reparations from
Japan, began to withdraw early in 1946. By a simple process of informing Mao and not informing
Chiang of their withdrawal schedules, they ensured that the abandoned areas should be occupied
immediately by Communist forces. The United States, which had been engaged in evacuating three
million Japanese from China, moved fourteen Nationalist Chinese armies, most of which had been
trained and equipped by the United States, to North China and Manchuria to block the Communist
takeover. After the defeat of the Communist forces in the north, however, the Nationalists, contrary to
American advice, attempted to crush the Communist forces everywhere. They did succeed in capturing
the Communist capital of Yenan in March 1947, but, as the effort continued, their own forces were
dispersed and defeated, while the Chinese forces, supported by disgruntled peasants, took over much of
rural China.
General Marshall, on a mission from President Truman, spent much of 1946 in China. At first he hoped
to work out some kind of coalition regime which would stop the civil war by taking Communists into
the Chiang government in a minority role. Because this was not acceptable to either side, Marshall, and
later (1947) General Wedemeyer, tried to get Chiang to reform and to consolidate in the areas he still
controlled. Promises were free, but efforts to carry them out were insignificant. In an attempt to force
the Nationalist government to stop the civil war and carry out the American program of reform,
consolidation, and coalition with the Communists, an American embargo on arms shipments to China
existed for eleven months, from August 1946 to July 1947.
Unfortunately, this was just the period in which the Communists were expanding their forces with
captured Japanese arms obtained from the Russians and with large acquisition of earlier American arms
shipments to the Nationalists which were ... allowed to go to the Reds. To stop this ... it would have
been necessary to allot at least 10,000 American officers to Chiang's forces, attached to every unit
down to company level. Neither side wanted to do this, as the problems of language translation, of
inability to enforce recommendations, or to overcome personal Chinese resentment against such
interference by foreigners were almost insuperable.
Marshall, in 1946, became convinced that the Nationalist regime was hopeless and that it could
overcome the Communists only if the United States took actual control by American personnel and
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Chapter 64—The Crisis in China, 1945-1950
fought the Communists with American troops. [Actually his mind was already made up at this time and
he was secretly working with those in Washington, D. C. and elsewhere who were planning the betrayal
of the Chinese people and the forces of Chiang Kai-shek.] He was unwilling to do this because he felt
that the Chinese would resent it themselves, and it would make impossible any American effort to save
Europe from direct Soviet control. Since there could be no question that Europe was more significant
by an immense margin, he made the choice, represented by the Marshall Plan, to save Europe. [The
Marshall Plan was a gigantic American taxpayer supported build up of the German Industrial machine.]
He did not regard the Chinese position as total loss because he was convinced that any Chinese regime,
Nationalist or Communist, would find it almost impossible to create a strong and prosperous China.
General Wedemeyer, whose report was submitted to Washington in 1949 ... felt that large American aid
and control should be extended, as a method of delaying the Communist advance. However,
Wedemeyer, unlike Marshall, gave less consideration either to Europe or to political possibilities in
Washington.
The policy adopted in the Truman Administration was something of a compromise between the
Marshall and Wedemeyer recommendations. On the whole, the administration secretly adjusted its
outlook to the hopelessness of the Chiang regime and its future, but it did continue assistance by
appropriating $400 million in Chinese aid in 1948. [In reality the opposite was true, the Truman
Administration, like the Roosevelt Administration was upholding the secret agreements it had made
with Stalin to turn over China to the communists.] The inability of the Chiang government to make any
substantial use of such aid continued to be revealed in 1947-1949. The printing of paper money for the
government's expenses continued until the Chinese paper dollar became almost valueless. In August
1948, a new yuan currency replaced the previous Chinese dollar at a rate of one yuan to $3 million, but
the new money was decreased in value by deflation as the old had been. [Actually the forces of Chiang
Kai-shek were opposed at every conceivable way to ensure the victory of Mao and his forces.]
... On November 6th the American military mission decided unanimously that the situation could not be
saved without the use of American ground forces and that "no amount of military assistance would save
the present situation." At mid-January 1949, the main field armies north of the Yangtze were destroyed
by Communist forces. By that time, Mao's successes were going far beyond the limits expected ...
Soviet agents from central Asia took over Sinkiang Province, but in China itself Mao's advance ...
could be financed from Chinese areas already controlled and could be fought with weapons captured
from National forces to add to the captured Japanese weapons obtained from Soviet sources earlier.
The Communist victories were carried to conclusion in 1949. In January, Peiping was captured from
the Nationalists and, three months dater, the Yangtze River was crossed, and Nanking fell (April, 3rd).
In the course of the summer, all the south fell, and the Nationalist government, eight years to the day
after Pearl Harbor, fled from the mainland to Taiwan (Formosa), where they were protected from
Communist pursuit by the United States Seventh Fleet.
In December 1949 Mao Tse-tung and Stalin met in Moscow .... These led to a mutual assistance treaty
signed on February 14, 1950. By this agreement Mao sought economic and technical assistance which
he needed to build up China, while Stalin sought to use these needs to turn China's unexpected
developments in directions he desired. Most of the agreements remained secret, but the chief included a
defensive military alliance, detailed agreements by which most of the railways and ports controlled by
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Chapter 64—The Crisis in China, 1945-1950
the Russians in the north would be turned over to the Red Chinese by the end of 1955 (these included
Port Arthur), and a loan to China of 560 million a year for five years at 1 percent interest (much less in
total than China had sought). Less tangible agreements left Outer Mongolia and Chinese Tannu-Tuva in
Soviet control, set up a condominium in Sinkiang, left North Korea in the area of Soviet control, and
turned China's expansionist ambitions southward. At the same time, a secret agreement may have been
made to support the projected North Korean attack on South Korea, as 50,000 Koreans in the Chinese
Communist forces were weeded out and transferred to the North Korean Army in the next five months.
One consequence of the Sino-Soviet agreements of February 1950 was a mass influx of Soviet advisers
and technicians into China to guide their allies in use of the new equipment and methods made possible
by the Soviet loan. These rose to scores of thousands, of which about half were military. At the same
time, about 6,000 Chinese students were admitted to university study in Russia....
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Chapter 65—American Confusions, 1945-1950
Chapter 65—American Confusions, 1945-1950
The American response to the Soviet refusal of postwar cooperation was confused and tentative. For
months after the Truman Administration recognized the situation, it was reluctant to make any public
announcement of this fact because our military demobilization could not be reversed until it had run its
course in 1947 and until a new strategic system and consequent military organization could be reached.
For this reason, the first announcement came from Winston Churchill in his speech in Fulton, Missouri,
in June 1946. In this he spoke of the "Iron Curtain" which Stalin was lowering between the Soviet bloc
and the West. It was also British initiative over Greece and Turkey at the end of the year which led to
the "Truman Doctrine" of March 1947.
Truman could not get any constructive help from the leaders of the armed forces in establishing a new
strategy (they were much too busy fighting each other in protection of the vested interests surviving
from World War II), so he was forced to fall back on other forms of resistance, particularly economic,
diplomatic, and ideological. The resulting strategy is known as "containment." It lasted from early 1947
to 1953, and was resumed gradually after 1958. Its chief characteristics were economic and financial
aid to other nations, to eliminate the misery and ignorance which fosters Communism, and acceptance
of the rights of neutrals and allies to follow their own policies and to be consulted on our policies,
without primary reliance on our military force.
As early as August 1945, Truman asked the Joint Chiefs of Staff (JCS) to draw up recommendations for
America's postwar security needs. The bitter rivalries among the three services made it impossible for
the JCS to agree on a common strategy, and thus they could not ascertain the country's weapons needs.
At the time, the air force was convinced that the next war would be very brief and would be settled by
the Strategic Air Command dropping atom bombs on enemy cities. In its view the army and navy's
roles would be restricted to mopping up after SAC had defeated the enemy. Accordingly, it wanted 70
air groups of the new 6-engine, propellered B-36 bombers (Convair), which flew in prototype in 1946
after six years' work but which would not be available in quantity until 1949 (when jet propulsion made
them obsolete).
The navy in 1945 was much larger than all other navies of the world combined—"a five-ocean navy to
fight a no-ocean opponent," said the air force—but its future had been placed in great jeopardy by the
atom-bomb tests staged at Bikini Atoll in the Pacific in 1946. These tests showed that a fleet would
suffer very great damage, unless widely dispersed, from atomic explosions in the air, while a blast
under water would drench it with almost irradicable radioactivity. Nonetheless, the navy had to seek a
role in the growing rivalry with Russia, and pinned its hopes on its ability to reach the enemy with
atom-armed planes flown from the deck of a 65,000 ton "super-carrier" of astronomical cost.
The army, almost eclipsed by the plans of its more glamorous rivals, wanted Universal Military
Training (UMT) leading to highly trained reserve units, in spite of the air force's insistence that World
War III would be over before ground forces could be mobilized. These disagreements between services
made it impossible for the JCS to achieve any agreement on strategy or on weapons needs in answer to
Truman's request of 1945. Accordingly, in June 1946, they informed the President that a unified
strategy could be reached only after achievement of a unification of the three services into a single
organization. For this reason, it was not until April 1950, that the United States obtained a strategic
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Chapter 65—American Confusions, 1945-1950
military policy to underlie Truman's policy of containment, which was then three years old. The new
strategic policy was embodied in NSC 68, which, despite its code identification, did not come from the
National Security Council, but was the child of the Policy Planning Staff of the State Department, led
by Paul Nitze.
The inability of the armed services to provide the country with a defense policy, because of interservice rivalries, is a consequence of the fact that military leaders are specialists and technicians,
concerned with means rather than with goals, and, like all technicians, need guidance (or goals) set by
other persons with larger perspectives. This weakness is more obvious in peacetime than in war, and is
more common among Americans than among some others. Americans work together best when the
organization's goal is explicitly established. In this they differ from the British, who can work together
perfectly well in organizations without any apparent goals and are, indeed, suspicious of any desire to
establish explicit goals or overriding policy. Americans, when goals are established (as they are in
business in peacetime by the balance sheet or as they are in war by the desire for victory) work together
very effectively, but political work in peacetime, with its ambiguous goals, is relegated to rivalry,
bickering, and total inability to relate means to goals. As a result, the means themselves tend to become
goals.
It was the emphasis upon means rather than goals, and the compromises between conflicting means,
which led to the National Security Act of 1947. This sought to evade the need for clear hard thinking
about goals and the subordination of means to goals by reorganization of the top levels of governmental
operation concerned with security. It set up a system based on secrecy and anonymity which may, in
time, revolutionize the whole American system of government. In this reorganization there were at least
three major parts:
(1) unification of the armed services;
(2) creation of the National Security Council as an advisory board to the President; and
(3) reorganization of the whole system of intelligence and spying, through the Central
Intelligence Agency (CIA) and the code breaking National Security Agency (NSA)..
Basically, rivalry among the American armed services was a rivalry for congressional appropriations, a
struggle over slicing the annual budget. In this struggle each service sought to convince congressmen
that its particular weapons provided the best defense for the United States. The air force, which in 1946
was still a branch of the army, touted the claims of the manned bomber; the navy, only recently
disillusioned with its old love, the battleship, had now shifted its affections to the aircraft carrier; the
army had to stick with the humble foot soldier but almost concealed him from view with its insistence
on trucks, tanks, and cannon. As a matter of fact, the manned bomber, the aircraft carrier, and the tank
were all obsolescent in 1946, but their supporters were unwilling to concede this, since such a
concession would, they thought, shift appropriations to the other services.
The manned bomber was threatened by rockets with homing devices which would bring such rockets,
at speeds higher than manned bombers could ever reach, in for the kill by seeking out the plane's
engine exhaust heat or by use of radar and electronic-eye devices. The aircraft carrier was threatened by
atomic bombs, since it was too vulnerable to these to justify its cost of over $100 million. The tank
was threatened by shaped charges, and, in general, the whole tactical outlook of ground forces, with
their traditional emphasis on mass and concentration, was challenged by nuclear, biological, and
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Chapter 65—American Confusions, 1945-1950
chemical weapons which put great value on dispersal.
In these struggles between the services, the clashes are particularly bitter in a period of demobilization,
and this bitterness is accentuated by the fact that each service has alliances with the industrial
complexes which supply their equipment. These complexes not only supply funds, such as advertising,
for each service to carry its message to the Congress and the people, but also exert every influence to
retain equipment and tactics in obsolescent modes and types (but newer models) by dangling, before
the high officers who can influence contracts, offers of future well-paying consultant positions with the
industrial firms concerned. Most high officers of the American armed forces in the war and postwar
period retired before the fixed age of sixty-two, often on a disability basis (which exempted retirement
pay from income taxes), and then took consultant jobs with industrial firms whose chief business was
in war contracts.
Thus, four-star general Brehon B. Somervell, chief of Army Service Forces in World War II, retired on
a disability salary of $16,000 a year at the age of fifty-four to join a number of industrial firms,
including Koppers, which paid him $125,000 a year; three star general L. H. Campbell, chief of
ordnance in World War II, retired on disability at $9,000 a year at age fifty-nine and became an
executive, at $50,000 a year, of firms from whom he had previously purchased $3 billion in armaments.
Four-star General Clay retired at fifty-two on $16,000 a year, but signed up at once with General
Motors and Continental Can at over $100,000 a year. Three-star air-force General Ira C. Eaker left the
service at age fifty with $9,000 a year and joined Hughes Tool Company at $50,000. Another three-star
air-force general, Harold C. George, went with Eaker to Hughes, at $40,000. General Joseph T.
McNarney, in 1952, took his four stars, and $16,000 a year, to join Consolidated Vultee at $100,000.
These are but a few of more than a hundred general officers whose post-retirement alliances with
industrial firms encouraged their successors, still on active service, to remain on friendly terms with
such appreciative business corporations. These connections undoubtedly inhibit officers of the armed
services in their efforts to obtain fresh ideas, fresh tactics, and fresh equipment for America's defense.
In this struggle there occurs rivalry between the services to secure larger shares of existing budgets, but
there also occurs cooperation to increase the total joint budget. The best way to do the latter is by war
scares, which undoubtedly increase appropriations for all services. The spectacular increase in the joint
defense budget of the United States from about $14 billion in the late 1940's to about $60 billion in the
early 1960's is partly caused by a [pretended] Soviet threat to the United States, but it is also partly
caused by a scare engendered by the armed services. If the Soviet Union has been deterred from
aggression by those expenditures, the money was well spent, but, since the Soviet Union never has had
any intention of engaging the United States in open war, it is legitimate to believe that many of the
billions spent could have been used to fight the Soviet Union in more remunerative ways than by the
purchase of manned bombers, aircraft carriers, or tanks.
The struggles between the services in the United States after 1945 have been vigorous and often
unscrupulous. They have involved putting pressure on administrators in the executive branch from the
President down, and especially on the high civilian heads in the Pentagon, of misleading congressmen,
and of propagandizing the public.
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Chapter 65—American Confusions, 1945-1950
The air force, for a variety of reasons, was the most successful of the three services in this propaganda
war. After all, flyers had plenty of experience, since they had been propagandizing the world since
about five years after the first plane flew, without benefit of publicity, in 1903. The air force was
interested only in strategic bombing, and had little interest in tactical work under command of ground
forces which, the flyers insisted, hampered their special genius. To get free of the army and become a
separate service, coequal with the navy and army, the army air forces in 1946 put their full pressure
behind legislation to "unify" the armed services. "Unify" here really meant change two into three. This
was done by reducing the two Cabinet posts for war and navy to a single post for defense, with three
equal secretaries for army, navy, and air outside the Cabinet. The "unity" presumably was to be
obtained from the secretary of defense's control over the three service secretaries, but this was
impossible since they were named by the President, not by the secretary of defense, and they had little
influence over their services, each of which looked to its chief commander on the Joint Chiefs of Staff.
The fact that the Joint Chiefs had operational command of their departments meant that they had to
defend the diverse interests of these, and could contribute little to unity or to any general ideas, even
strategic ones; while if they had been separated from their actual commands in order to be free to reach
a general consensus on strategic ideas they would have retained no control over their services. The only
real lines of authority in the whole system were those in the hands of the President himself and those
lines of command going downward from the Joint Chiefs to their own services. There were only very
weak lines between the secretary of defense and the Joint Chiefs or to his service secretaries, or
between the latter and the services for which they were responsible. As a result, very little unification
was achieved, even after amendments to the Act, and in 1949 the inter-service rivalries reached their
most intense peak. By the end of that year UMT, the super-carrier, and the 70-group air force were all
dead, killed off by inter-service rivalries, in spite of the fact that all public-opinion polls showed strong
support for all of them.
James Forrestal, who had been secretary of the navy since 1944, and who, on behalf of the navy, had
emasculated the unification bill, was made first secretary of defense, and was called upon to administer
it in 1947. Within a year he had reversed his opinions and was demanding amendments to strengthen
the Act, especially the powers of his own post. His mind collapsed under the strain, and he resigned in
1949, committing suicide shortly afterward. Although public-opinion polls showed that two-thirds of
Americans approved UMT and only a quarter or less opposed it, the air force in 1948 was able to
persuade the Congress that there was a necessary choice between UMT and the 70-group air force;
accordingly, the air-force budget was raised $822 million and UMT was buried in committee.
Forrestal was replaced as secretary of defense by Louis Johnson, onetime national commander of the
American Legion, who favored the air force, as Forrestal had favored the navy, in these intramural
battles. Although the super-carrier had been authorized and appropriated for, and although construction
had begun under Forrestal, Johnson used a vote of two to one in JCS against it (Admiral Louis Denfeld
in the minority) as excuse for canceling the contract. The subsequent "Admirals' Revolt" took the form
of anonymous letters to Congress charging corruption on the B-36 contract, as well as public charges,
which were quite correct, that the plane was already obsolete. The whole scandal received a full-scale
congressional investigation, the "B-36 affair," as a result of which the B-36 was discredited, Admiral
Denfeld was removed from the JCS, and Johnson, having alienated everyone by his efforts to save
money, was replaced by General Marshall (1950).
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Chapter 65—American Confusions, 1945-1950
The Unification Act had excluded retired officers from the post of secretary of defense, but this clause
was made un-applicable to General Marshall so that he could succeed Johnson in 1950. Thus, the
supporters of each of the three services held the position successively in less than a two-year period.
Marshall said that he took the job to get UMT, but the act, as passed in 1951, was in a form which
allowed the Administration to prevent its execution, and it never went into effect. In its place, troops
were raised for the services, chiefly the army, by successive extensions of the wholly unsatisfactory
Selective Service Acts.
The inter-service battles of 1945-1950 were largely a victory for the air force, which got rid of the
super-carrier and UMT, and thus obtained the biggest bite from the budget. Much of this bite went to
SAC, which had been created in March 1946, and Noms taken over from General George Kenney by
General Curtis E. LeMay in October 1948. At the time, SAC was really SAD. Starting in 1946 with
only a single group able to deliver the atom bomb, for most of this period it struggled along with the
300-mph B-29. "It lacked planes, bases, equipment, and trained men." Above all, it still operated on the
old premise that the outbreak of war would be preceded by negotiations and mobilization. LeMay
changed all that. He was not a desk soldier, nor was he a paper pusher. Ruthless, efficient, and singleminded, he flitted about from base to base in a self-piloted plane, a big cigar clamped at a belligerent
angle in his set jaw. He gave SAC a single purpose ("mission"), isolated it from everything else in the
defense chaos by moving its headquarters from Washington to Nebraska, and demanded immediate and
efficient war readiness.
With sufficient funds LeMay would have kept a third of SAC in the air at all times, ready to go; another
third at "war readiness" for quick takeoff; and the final third on call within a few hours. Until 1952,
when he began to get the new eight-jet intercontinental B-52's, he bridged the gap with modified B-36's
and medium-range, six-jet, B-47's. With the support of Air Secretary Thomas K. Finletter, he
established bases within range of the Soviet Union, in Europe, Greenland, North Africa, and Okinawa.
By 1955 he had a force of remarkable efficiency and high morale, a success resulting from three factors
which provide a lesson for all organizational success: a clear-cut mission, leadership, and continuity.
The last quality was achieved by retaining LeMay in command of SAC for eight years, in violation of
the established armed services practice of three- to four-year periods of rotation of duty.
In all this turmoil of controversy in 1947-1950, the army had not been idle. Its struggles for
promotions, pay increases, perquisites, and assignments were ensured success to some extent by
creating a new kind of army, an army top-heavy with officers and paper pushers who worked from 8:00
A. M.. to 4:00 P. M., five days a week, and had very little fighting effectiveness. This was done by
setting up a structure of officers and auxiliary activities which absorbed almost the total budget of the
department in noncombat lines and filled the combat units with a small number of short-term draftees
of very little combat value. In January 1952, for example, the Department of Defense had 5 million
employees, of which 3.7 million were in uniform and 1.3 million were civilians. Those in uniform used
up $37 billion for pay, food, housing, and clothing—that is, $10,000 per head—in a total defense
budget of $46 billion. The 1.3 million civilians cost $5.2 billion, or $4,000 a year each, leaving only $3
billion in the total defense budget for equipment, research, and other costs which contribute directly to
defense. The army's share of the 3.7 million uniformed personnel was 2 million, but that provided only
12 divisions, at most 150,000 men, for combat.
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Chapter 65—American Confusions, 1945-1950
In spite of these enormous expenditures, the puny combat effectiveness of the "standing army" was
shown in the Korean War when nine-tenths of the officers in combat were Reserves who had to be
called from their peacetime activities to fight. The army solution to the disappointments of Korea was
more of the same; in June 1951, the Selective Service Act of 1948 was amended to drop the draft age
from 19 to 18 and raise the authorized limit on the men in active service from over 2 million to 5
million. That is, the qualitative deficiencies of Korea were to be solved by quantitative increases of the
same inadequate quality, a step which might not improve America's defense position but could justify
increasingly rapid promotion for officers.
The last few months of 1949 include the major turning points in the whole period 1947-1963. Three
events which marked this were the well-publicized B-36 crisis, the loss of China, and the secret Hbomb crisis which followed the explosion of the Soviet Union's first A-bomb in August. Another
significant event of the period was the organization of NATO (North Atlantic Treaty Organization)
following the treaty of April 4, 1949, signed in Washington. This mutual defense pact "to safeguard the
freedom, common heritage, and civilization of their peoples, founded on the principles of democracy,
individual liberty, and the rule of law," had, as signers, the United States, Canada, and ten West
European countries (Iceland, Norway, Denmark, the Netherlands, Belgium, Luxembourg, France, the
United Kingdom, Portugal, and Italy). In February 1952, Greece and Turkey joined the pact, and in
May 1955 the West German Federal Republic became a member. The agreement was largely anchored
on Germany: it flowed out of the threat provided by the Berlin blockade, and directly implied the
merging of West Germany into the Western camp. As the chief step in this process, the three western
zones of Germany were merged into one, and, in September 1949, the military rule of Germany was
replaced by the Adenauer regime.
Throughout this period, fear of communism was growing within the United States.... The Soviet and
Communist hatred of the American way of life is well established, and the existence of the American
Communist Party as a willing tool of an international Communist conspiracy directed from Moscow is
also beyond dispute. Such Communists were undoubtedly engaged in subversion and espionage, and
were assisted in these efforts by "fellow travelers" and other sympathizers. Moreover, some
Communists and fellow travelers were undoubtedly present in government and, to a greater degree, in
some other areas, notably certain labor unions, higher education, and especially in the more creative
end of the entertainment field, such as the theater, writing, and Hollywood scenario production. On the
other hand, the number of Communists in the United States, according to the FBI, was only about
75,000 in 1945 and fell steadily to 50,000 in 1950 and to 3,000 in 1960.
... The Communist Party of the United States (CPUS), like others throughout the world, was always,
from its founding in 1919, a tightly disciplined body of conspirators whose primary allegiance was to
the Soviet Union and whose secondary aim, after the preservation of the Soviet Union itself, was to
establish a similar regime in the United States. Tactics varied from year to year, and the party line
shifted with changing political and world conditions without, however, ever abandoning these two
goals. In 1935, with the threat of Fascism spreading through the world, the Communist International
(Comintern) adopted a "Popular Front" tactic which was, essentially, a temporary alliance of all nonFascist groups to oppose Nazi aggression and to support the Soviet Union against German attack. In
this period the Communist Party of the United States was a relatively open group, with openly
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Chapter 65—American Confusions, 1945-1950
available headquarters and telephone numbers, and with a good deal of cooperation and free exchange
through a broad spectrum of political and social activities, and cooperation from the political Center to
the extreme political Left. There was, at that time, widespread disillusionment with the existing
structure of society because of enormous unemployment, pervasive poverty, and bourgeois paralysis in
the face of economic stagnation and Fascist aggression. Communist insistence that something be done
about these things won widespread sympathy, even in circles which were totally non-Communist. The
Communists themselves took full advantage of this atmosphere by establishing Communist front and
fellow-traveler organizations of all kinds, and the distinction between party members and fellow
travelers became very free, confused, and blurred. The Communist command system, however,
remained fully aware of who were devoted to their permanent goals and who were not, and retained
general control, under cover, of all organizations they regarded as important. .
This ambiguous situation of Left-wing fellowship began to break down in 1938-1940 as the complete
dominance of Soviet national selfishness within Communist parties everywhere became evident, at first
in Spain, later in the Nazi-Soviet Pact of August 1939, and in the Soviet-Finnish War the following
winter.
For the American Communist Party the chief turning point here was the enactment of the Foreign
Agents Registration Act in 1940. The United States Communist Party broke its affiliation with the
Comintern and instead established a secret link between the Comintern and the United States party,
chiefly through Gerhart Eisler (who was finally deported in 1949 and became an official of the East
German Communist regime). In 1943 the Comintern itself was officially dissolved by the Soviet
Government, although secretly it continued to exist. As part of this same process, in a sort of wartime
common front, the United States party itself was dissolved in 1944 and reappeared at once as the
Communist Political Association. Earl Browder, who personified the Popular Front tactic of the 1930's,
continued as the head of the Political Association and the common-front tactic until July 1945, when he
was removed as a traitor to the Marxist-Leninist ideology and replaced by William Z. Foster. At the
same time, the Communist Party of the United States was reestablished to pursue a more aggressive
and narrower policy.
The abandonment of the United Front approach in 1945 was a gross tactical error which almost totally
destroyed the party in the next fifteen years. It had been ordered from Moscow through the French
Communist leader, Jacques Duclos, and was, like other mistakes of the Kremlin at the same time, based
on a totally mistaken conception of what the postwar world would be like. This misconception was
firmly rooted in the greater misconceptions of Marxist-Leninist doctrine, and assumed
(1) that there would be a postwar economic depression;
(2) that the United States would relapse into isolationism; and
(3) that the United States and Europe, especially Britain, would engage in an imperialist rivalry
for markets and economic advantages.
Just as the new Soviet foreign policy prepared to exploit this anticipated chaos, so the CPUS was
reorganized to profit from the same chaos. Instead, it committed suicide.
This collapse of the CPUS from 75,000 members with ample funds in 1945 to less than 3,000 members
with hardly a dime fifteen years later was assisted by the actions of the United States government, the
attacks of party members who were leaving it in droves, and the efforts of ex-members, political
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leaders, and intellectual bellwethers to strike at the CPUS in substitute for their inability to strike at the
USSR. Many of these ... [individuals] were fighting for their convictions, but at least an equally large
number were fighting for their personal profit or their personal partisan advantage. In this effort to win
personal advantage from a worthy struggle, leadership was taken by some of the ex-Communists, the
FBI, and the House Committee on Un-American Activities. These anti-Communists, some of them
professionals, ... demonstrate[d] that the CPUS, by its penetration into the Federal government under
the New Deal, into labor unions or education, and into entertainment, especially Hollywood, had
gravely endangered the nation....
Espionage is another matter, but this is more from the nature of espionage than the nature of
Communism, except for the very significant fact that the ideological appeal of Communism to the half
educated makes it possible for the Soviet Union to obtain secrets without financial payments. In
general, the nature of espionage is totally ignored by most people, and this ignorance was only
increased by the activities of the anti-Communist spy agitations of the 1949-1954 period. All past
history shows that espionage has been generally successful and intelligence has been generally a
failure. By this I mean that no country had much success in keeping secrets, in the twentieth as in all
earlier centuries, but neither has any other country had much success in evaluating or in interpreting the
secrets it obtained. The so-called "surprises" of history have emerged not because other countries did
not have the information but because they refused to believe it. The date of Hitler's attack on the West
in May 1940 had been given to the Netherlands by the German Counterintelligence Office as soon as it
was decided; the Western countries refused to believe it. The same was true of every one of Hitler's
surprises. Stalin was given the date of the German attack on the Soviet Union by a number of
informants, including the United States Department of State, but he refused to believe. Both the
Germans and the Russians had the date of D-Day, but ignored it. The United States had available all the
Japanese coded messages, knew that war was about to begin, and that a Japanese fleet with at least four
large carriers was loose (and lost) in the Pacific, yet Pearl Harbor was a total surprise. This last point
was so hard to believe, once the evidence was available, that the same groups who were [focusing
on] ... Soviet espionage in 1948-1955 were also claiming that President Roosevelt expected and wanted
Pearl Harbor.... [Actually this is true. Roosevelt had been conspiring for some time to get the U. S.
involved in World War II. The President and others devised a plan by leaving Pearl Harbor open to
attack, knowing that this would arouse the American people and he could declare war on Japan and
thus enter the war. The collusion of the President with Marshall and others has been well documented
today with irrefutable evidence.]
The whole purpose of secrecy in government should not be to keep information from other states (this
is almost impossible) but to make it as difficult as possible for other states to get certain information, so
that, when they do get such restricted information, it wil1 be so intermingled with other information
and misinformation that it cannot be evaluated promptly enough to do them much good. Any espionage
system gets more information than it can handle rapidly. Any country should assume that the enemy
has all its own secret information. The lessons of past history fully support this assumption.
Following every war the discovery is made that the enemy, during the war, had every other state's most
cherished secrets. In fact, the most successful kind of counterespionage work is achieved, not by
preventing access to secrets, but by permitting access to information which is not true. This was done
most successfully in 1943 in preparing the American invasion of Sicily, which was a surprise to the
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Germans because they had been provided, through their espionage in Spain, with false information
about an invasion of the Balkans. The Germans had a somewhat similar success through their
Operation North Pole by which the Germans successfully took over and operated the French
Underground and the associated British espionage net in a large part of France for about a year. Finally,
it is not generally recognized by outsiders that almost all the information gathered by any espionage net
is non-secret material fully available to anyone as public information. Even in work against a supersecret area like the Soviet Union or in nuclear "secrets" this is true. Allen Dulles said that more than 80
percent of the information which the CIA gathers on the Soviet Union is non-secret. Soviet espionage
reports on the United States must contain at least 97 percent non-secret material.
Many, if not most, of the "spies" and "atomic spies" apprehended, with high-powered publicity, by the
FBI and the Un-American Activities Committee in 1948-1954 (to the great alarm of the American
people) were not concerned with secrets, while some of them were not engaged in espionage at all, and
almost none of them had anything to do with nuclear secrets (contrary to the publicity releases of the
agencies who accused them). There was nuclear espionage, and it was successful, but almost nothing
was achieved by any spy chasers in the United States either to reveal the culprits or to punish them.
Fuchs and Nunn May were real nuclear spies for the Soviet, but others at least equally important are
hardly ever mentioned. For example, Frédéric Joliot-Curie, the greatest French nuclear physicist (Nobel
Prize, 1935) and an admitted member of the Communist Party, knew as much about our nuclear work
as anyone in Europe, Britain, or Canada. His chief associates fled from France (he did not) in 1940 and
worked on the nuclear project in England and Canada until they returned to France after that country's
liberation. Some of these associates, notably Hans von Halban and Lew Kowarski, certainly knew as
much as Nunn May and may have known as much as Fuchs, and unquestionably told all they knew to
Joliot-Curie, a Communist, in 1944. Or again, as an example of numerous unexplored paths by which
nuclear information went to Russia, an outstanding Polish nuclear physicist who studied with JoliotCurie was Ignace Zlotowski. He was in the United States in the critical years during the Soviet race to
make the atom bomb as a member of the Polish Embassy staff and Poland's representative on the UN
Atomic Energy Commission. He sent large quantities of nuclear information behind the Iron Curtain
and was present as an observer at the Bikini bomb tests in 1946.
Finally, it is evident that a great deal of nuclear information (whether secret or not is unknown), as well
as uranium metal, went to the Soviet Union as part of Lend-Lease in 1943. Major George Racey
Jordan, USAAF, tried in vain to disrupt these shipments at the time. [The] ... shipment of uranium to
Russia is corroborated from other sources. The significance of such shipments is still unknown, since
the export license permitting them was granted at the request of General Groves. Jordan's other
evidence, most of which was very discreditable to the New Deal (since he testified that he, Groves, and
others were under direct pressure from Harry Hopkins and Vice-President Henry Wallace to allow
export of nuclear materials, radar, and other secrets to Russia) was subsequently shown to be ...
[true] ... [and] his statements were given nationwide publicity by news commentators like Fulton
Lewis, Jr., by Life magazine, and by the House Un-American Activities Committee, and are still widely
believed.
Most of the "atomic spy" cases are similar to this. The earliest of these was the arrest of Soviet naval
Lieutenant Redin by the FBI on March 26, 1946, on charges that a Seattle naval engineer, Herbert
Kennedy, had sold Redin "secrets" about the Bikini test ship Yellowstone for $250. This case was a
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forerunner of others in respect to two false assertions in news releases:
(1) claims by the FBI that information leading to the apprehension of Redin had come from the
Gouzenko "atomic spy" case in Canada (February 1946) and
(2) claims by the HUAC that it had unearthed this significant case.
Redin was eventually acquitted when his defense showed that Kennedy had been paid for research he
did for Redin in the Seattle Public Library. Neither Gouzenko nor HUAC had anything to do with it.
The change in the climate of American opinion (and thus in the attitudes of American juries) over four
years may be observed in the contrast between the acquittal of Redin in 1946 and the conviction of
Abraham Brothman in 1950. The FBI publicity and the universal belief of the American press, both at
Brothman's arrest in July 1950 and at his trial in November 1950, was that he was "part of a Soviet spy
apparatus under a Russian trade organization chief working to ferret out atomic secrets" (The New York
Times, July 30, 1950) or that the trial was an "ATOMIC SPY CASE" (all New York newspaper
headlines, November 8-23, 1950). In fact, Brothman and his secretary (Miss Moskowitz) were the only
defendants in a trial for conspiracy to persuade a third person, not on trial (Harry Gold), to commit
perjury in July 1947. Undoubtedly, Brothman and his secretary had discussed together what they could
do about the testimony to be given by the semi-moronic Gold before a grand jury. Their purpose, in
which they clearly failed, was to keep Brothman from being involved in any charges of giving secrets
to Communists.
Technically they were guilty of conspiracy, were so found, and were sentenced to a total of nine years'
imprisonment. In spite of the fact that the trial clearly showed that Brothman had nothing to do with
espionage, secrets, or atomic research, the mistaken impression that he did was never removed by the
press, and remained in the public mind as an established truth, so that United States Attorney Irving
Saypol, who prosecuted this case in November 1950, referred to Brothman as convicted of "espionage"
when he prosecuted the Rosenberg case before the same judge in April 1951. The true story, as far as
Brothman was concerned, seems to be quite different.
Brothman was an industrial chemist and chemical inventor who owned a number of chemical
laboratories and factories held as subsidiaries of his Pennsylvania Sugar Company. His chief concern
was in industrial solvents in which he held patents on processes and equipment. In 1940, when
Brothman was seeking orders for his products, he was approached by a Russian, Jacob Golos, then
proprietor of World Tourists, a Communist-front travel agency but previously employed by the Soviet
Trade commission (AMTORG) and its Purchasing Commission. Brothman offered Golos 10 percent
commission on any orders he could place with either agency for Brothman's products or processes. We
now know that Golos was a high official in the Soviet secret police, a major Soviet spy, and one of the
three-man Control Commission of the American Communist Party. Brothman knew none of this and
was not himself a Communist, although in 1940 he regarded the Soviet Union as the chief obstacle to
world Fascism. For several months in 1940, Brothman gave to Golos, both directly and through Golos's
mistress, Elizabeth Bentley, blueprints and descriptions of the chemical processes he had for sale. All of
these were available to any prospective purchaser and had been written up and advertised by Brothman
in the regular chemical journals, and many were his own inventions. When Brothman objected to
talking to Golos or Miss Bentley on the ground that they knew no chemistry, Golos sent him another
agent, a chemist, Harry Gold, who had been doing industrial research (which gradually developed into
industrial espionage) for AMTORG for several years. Although Brothman got little or no business from
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the Russians, he hired Gold as a chemist in one of his laboratories in 1943. Four years later, after Gold,
unknown to Brothman, had become an atomic spy contact with Fuchs, Brothman discussed with his
secretary how Gold's testimony before a grand jury might be given to prevent unfavorable inferences
regarding Brothman's contacts with Golos in 1940. In view of the changed American attitude toward
such Russian contacts from 1940 to 1947, this is not, perhaps, a surprising reaction, but in the
increasingly tense situation of 1950 it won Brothman a seven-year prison sentence for conspiring with
his secretary to persuade Gold to commit perjury. (Gold was not tried either for the conspiracy or for
perjury.)
The changed atmosphere of American public opinion from 1947 on was greatly intensified by the
increasingly strained world conditions, and by the growing public knowledge of the nature of the
Communist movement, its connections with Soviet Russia, and their joint conspiracy against the West.
Much of this evidence came from ex- Communists, such as Elizabeth Bentley, Louis Budenz,
Whittaker Chambers, John Lautner, and others. All of these undoubtedly were ex-Communists and,
equally undoubtedly, revealed much valuable information about the Communist conspiracy and
properly roused the American public to the danger of this conspiracy....
When the wholesale revelations of ex-Communists began in 1947, the New Deal and its successor had
been in the White House for more than fourteen years. The Republicans, especially the congressional
delegations, were prepared to ... [expose the secret agreements at Yalta, the deliberate loss of American
lives at Pearl Harbor and the betrayal of the America and Chinese people by] ... President Truman
and ... Franklin Roosevelt in order to win the presidential election of 1948. They were offered a great
opportunity to do so when the Republicans won control of both Houses of Congress in the
congressional elections of 1946. This effort was spearheaded, in 1947 and 1948, by the House
Committee on Un-American Activities....
The HUAC in 1947-1948 had nine members of which the chief were J. Parnell Thomas, of New Jersey
(Chairman); Karl E. Mundt, of South Dakota; and Richard M. Nixon, of California, on the Republican
side, and four southern democrats, led by John S. Wood, of Georgia, and John E. Rankin, of
Mississippi, on the Democratic side. The value of the publicity gained by the committee in these two
years may be judged from the fact that it carried both Mundt and Nixon to the Senate in 1948 and 1950
and the latter to the Vice-Presidency and close to the Presidency itself in 1952 and 1960. There can be
no doubt that the Republican members of the Committee realized the value of the publicity to be gained
by membership on it and that their actions were consistently aimed more at partisan advantage for
themselves and the discrediting of previous Democratic incumbents in the White House than they were
directed to ascertaining the nature and functioning of the Communist conspiracy in the United States.
Other legislative committees occasionally copied these tactics. It was this partisan, rather than
investigatory, bias in the behavior of such committees which reduced so much of this investigation of
Communism into personal vendettas such as those between Hiss and Chambers, between Remington
and Bentley, and between Lattimore and Budenz. In these battles of personalities, charges and countercharges flew about so freely at hearings, in the press, over the airwaves, and occasionally in judicial
proceedings, that the truth cannot now be ascertained. There can be no doubt that falsehood and even
perjury were to be found on both sides. What is equally regrettable is that numerous other accused
Communists, both in government and out, whose names were given to these committees on the same
basis. and sometimes in the same breath, as Hiss, Remington, or Lattimore were almost totally ignored
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and lost in the personal controversies aroused over these three, largely because of the partisan handling
of the investigatory committees. These revelations began in January and February 1947, when Budenz
identified Gerhart Eisler as a Communist leader in the United States. Within a few weeks President
Truman gave the investigators a prime weapon when he issued an order (March 21, 1947) requiring a
loyalty oath from all government workers. The significance of this was that any Communists in the
government could be prosecuted for perjury unless they had admitted the fact.
In the course of the summer the FBI arrested a half-dozen individuals at various times and announced
that they "had stolen vital atomic bomb secrets from the heart of the atomic bomb project at Los
Alamos." This alarming news was reinforced by a number of press releases from the HUAC. When the
accused were brought to trial, however, it developed that they had been guilty of insignificant and
technical infractions of the law, such as taking snapshots of each other while serving as soldiers at Los
Alamos or pilfering of government property there. Eventually two were given suspended sentences,
one was sentenced to eighteen months, a fourth got six months, and a fifth paid a fine of $250. The
original charges of atomic espionage were in headlines; the final disposition of the cases, if recorded at
all, appeared as insignificant items on a back page, unconnected with "atomic espionage."
In February 1948, Representative Thomas, chairman of the HUAC, was seeking from the Congress the
largest appropriations his committee had ever obtained. Apparently to bolster this request, on the last
day of the month, from his hospital bed he issued a six page report on Dr. Edward U. Condon, Director
of the National Bureau of Standards. Condon, one of the world's great authorities on quantum
mechanics, had been attacked by Thomas for about a year, chiefly in press releases and in two articles
in national magazines, apparently because of animosity over Condon's opposition to the Johnson-Mays
bill for atomic-energy control. The report of February 1948 said flatly, "Dr. Condon is one of the
weakest links in our atomic security." This charge was based on a mishmash of falsehoods,
irrelevancies, and incorrect inferences. It was charged that Condon had obtained his job from the favor
of Henry Wallace, then secretary of commerce, with the implication that Condon must be a Left-winger
if Wallace was. In fact, Wallace did not even know Condon, and appointed him only for the
administrative reason that the Bureau of Standards was a part of the Commerce Department. Or again,
the HUAC report quoted from a letter of J. Edgar Hoover to W. Averell Harriman when the latter was
secretary of commerce in May 1947. This letter had been stolen from the FBI loyalty report on Condon
and was merely a history of unevaluated reports of Condon's actions as reported to the FBI. As
published in the HUAC report it was edited to cut out (without any indication) sentences favorable to
Condon. It was charged that Condon's passport was taken up by the State Department when he planned
to go to Russia in 1946. The fact was that this plan was a government-sponsored project to fly about
two dozen American scientists to Russia in an army plane, and Condon's participation was canceled by
the army because it regarded him as too valuable a nuclear physicist to be risked behind the Iron
Curtain, where he might be kidnapped. The HUAC report said that Condon recruited members to join
an organization listed as "subversive" by the attorney general, the American-Soviet Science Society. It
later developed that this organization, which existed for the purpose of translating scientific reports
from Russian to English, using funds from the Rockefeller Foundation, had never been listed as
subversive by the attorney general, but on the contrary had been encouraged by the United States
government as a method of finding out what the Russians were doing in science. The HUAC had
simply confused this society with an entirely different organization, which the attorney general had
listed.
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On this kind of evidence the HUAC demanded Condon's removal from the government and ominously
reported that "the situation as regards Dr. Condon is not an isolated one . . . there are other Government
officials in strategic positions who are playing Stalin's game to the detriment of the United States.”
Condon's repeated requests for an opportunity to appear before the committee to refute its charges
under oath were ignored. The committee, especially its chairman, continued to harass Condon so that it
was impossible for him to do his work in the Bureau of Standards. This was done by subjecting him to
one loyalty investigation after another (each takes a great deal of work, by the FBI and the accused, and
requires months). These investigations, one after another, cleared Dr. Condon, but each clearance was
followed by new charges and a new investigation. After the fourth clearance, and the opening of a fifth
investigation, Condon resigned from the government in 1954. This fifth investigation was demanded by
Vice-President Nixon, who seems to have felt that his original participation in the unjustified smearing
of Condon six years before had to be sustained by continued persecution. By that time Chairman
Thomas, who was the director of this persecution in 1947-1949, had been sent to prison as a common
criminal for making the employees in his congressional office, paid from government funds, secretly
give back substantial parts of their salaries to him. Thomas should have restricted his efforts for
additional money to smearing innocent scientists in paid articles in national magazines.
The Condon case was still in its early full publicity in July and August 1948, when the Thomas
committee hit the headlines for weeks, day after day, with the testimony of Louis Budenz, Elizabeth
Bentley, Whittaker Chambers, and other "experts" on Communists. They listed several dozen names of
Communists in government in the 1930's, organized in formal groups or cells, and generally paying
dues and sending information through "couriers" like Miss Bentley. Most of those named ignored the
charges or simply made a denial to the press, but a few, such as Hiss, who sought to refute the charges,
were met by new ones. Eventually, as we have seen, Remington and Hiss were both jailed for perjury,
the former for denying he had been a Communist and the latter for denying he gave government
documents to Chambers. Both cases required two trials before convictions were obtained.
Others of these named were called before the committee and refused to give evidence under the Fifth
Amendment to the Constitution, which protects against self-incrimination. Little was done about these,
but it is clear that many of them were in fact Communists and that Bentley and Chambers knew them
as such, by hearsay at least. Bentley's original evidence in 1948 gave a score of names of Communists
she had "known" in the government. More than two years passed before it became clear that she did not
"know" them at all, had never met them, and could not identify them by sight, but had merely gathered
their names from her contacts with the few Communists who reported directly to her and whom she
knew well. Similarly, she indicated in her original evidence that she broke with the Communists and
went to the FBI, for patriotic reasons, in August 1945. Only in 1953, when the Eisenhower
Administration was still trying to make a major issue of the Communists in the New Deal, did Attorney
General Brownell, in publishing a letter of J. Edgar Hoover, inadvertently reveal that Miss Bentley's
revelations to it did not begin until November 8, 1945, the day after the newspapers revealed that
Budenz had been giving names. Miss Bentley's earlier visit to the FBI in New Haven in August 1945
had nothing to do with her desire to give information or with Communists, but was simply her desire to
find out if a man who had dated her was an employee of the FBI. The most sensational evidence from
the HUAC was released in the late summer of 1948 just in time to influence the presidential election in
November. Apparently it did not have the influence expected, since Truman was elected. The
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controversy from its revelations continued for years, and the charges, both from HUAC and from other
sources, increased in violence. Few of the revelations after 1948 were ever sustained in court. For
example, two separate "atomic espionage" cases involving Clarence F. Hiskey at Argonne Laboratory
in Chicago and Joseph W. Weinberg at Berkeley Radiation Laboratory were played up by HUAC in
1949. Eventually Hiskey refused to answer questions before HUAC, was prosecuted for contempt, and
was acquitted in 1951. Weinberg, accused by HUAC of giving "atomic secrets" to a well-known
Communist, Steven Nelson, eventually was prosecuted for perjury at the committee's insistence, and
was acquitted in 1953. Both scientists found their careers injured by the committee's charges. There
were many similar cases.
The revelation of Communist influence in the United States was undoubtedly valuable.... ... Senator
Joseph R. McCarthy, Republican, of Wisconsin ... [documented] that the State Department and the
army were widely infiltrated with Communists and [that] ... the efforts of the neo-isolationists and the
"China lobby" ... [in support of ] Mao[‘s] conquest of China was entirely due to the treasonable acts of
Communists and fellow travelers in the State Department and the White House.
For a while, the new Administration tried to outdo McCarthy, chiefly by demonstrating in committee
hearings that China had been "lost" to the Communists because of the careful planning and intrigue of
Communists in the State Department. The chief effort in this direction was done by a well-organized
and well-financed "China Lobby" radiating from the activities of Alfred Kohlberg, a wealthy exporter
who had had business interests in China. This group, with its allies, such as McCarthy, mobilized a
good deal of evidence that Communists had infiltrated into various academic, journalistic, and research
groups concerned with the Far East. But they failed to prove their contention that a conspiracy of these
Communists and fellow travelers, acting through the State Department, had given China to Mao. Mao
won out in China because of the incompetence and corruption of the Chiang Kai-shek regime, and he
won out in spite of any aid the United States gave, or could give, to Chiang, because the latter's regime
was incapable of holding out against Mao, without drastic reforms, whatever the scale of American aid
(without American military intervention to make war on Mao, which very few desired). The China
Lobby's version was based on two contentions:
(1) that there were Communists in significant positions close to the agencies which helped to
form American academic and public opinion on the Far East and
(2) that there were frequent agreements between known Communists and known formulators of
American policy and opinion on China.
This whole subject is too complex for adequate discussion here, but the situation must be outlined.
There is considerable truth in the China Lobby's contention that the American experts on China were
organized into a single interlocking group which had a general consensus of a Leftish character. It is
also true that this group, from its control of funds, academic recommendations, and research or
publication opportunities, could favor persons who accepted the established consensus and could
injure, financially or in professional advancement, persons who did not accept it. It is also true that the
established group, by its influence on book reviewing in The New York Times, the Herald Tribune, the
Saturday Review, a few magazines, including the "liberal weeklies," and in the professional journals,
could advance or hamper any specialist's career. It is also true that these things were done in the United
States in regard to the Far East by the Institute of Pacific Relations, that this organization had been
infiltrated by Communists, and by Communist sympathizers, and that much of this group's influence
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arose from its access to and control over the flow of funds from financial foundations to scholarly
activities. All these things were true, but they would have been true of many other areas of American
scholarly research and academic administration in the United States, such as Near East studies or
anthropology or educational theory or political science. They were more obvious in regard to the Far
East because of the few persons and the bigger issues involved in that area.
... [C]harges of the China Lobby ... that China was "lost" because of this group, or that the members of
this group were disloyal to the United States, or engaged in espionage, or were participants in a
conscious plot, or that the whole group was controlled by Soviet agents or even by Communists, is ...
[true]. [The] ... whole subject is of major importance in understanding the twentieth century.
In the first place, because of language barriers, the number of people who could be "experts" on the Far
East was limited. Most of these, like Pearl Buck, Professor Fairbank of Harvard, or Professors
Latourette and Rowe of Yale, and many others, were children or relatives of people who originally
became concerned with China as missionaries. This gave them a double character: they learned the
language and they had a feeling of ... mission about China. When we add to this that they were, until
after 1950, few in numbers and had access, because of the commercial importance of the Far East, to
relatively large amounts of research, travel, and publication funds on Far East matters, they almost
inevitably came to form a small group who knew each other personally, met fairly regularly, had a
fairly established consensus (based on conversations and reading each other's books) on Far East
questions, and generally had certain characteristics of a clique.
Lattimore, for example, because he knew Mongolian and the others did not, tended to become
everybody's expert on Mongolia, was rarely challenged on Mongolia or northwest interior China, and
inevitably became rather opinionated, if not conceited, on the subject. Moreover, many of these experts,
and those the ones which were favored by the Far East "establishment" in the Institute of Pacific
Relations, were captured by Communist ideology. Under its influence they propagandized, as experts,
erroneous ideas and sought to influence policy in mistaken directions. For example, they sought to
establish, in 1943-1950, that the Chinese Communists were simple agrarian reformers, rather like the
third-party groups of the American Mid-west; or that Japan was evil and must be totally crushed, the
monarchy removed, and (later) that American policy in Japan, under General MacArthur, was a failure;
they even accepted, on occasion, the Stalinist line that Communist regimes were "democratic and
peace-loving," while capitalist ones were "warlike and aggressive." For example, as late as 1951 the
John Day Company (Richard J. Walsh, president) published an indictment of MacArthur's policies in
Japan by Robert Textor. The book, called Failure in Japan, had an introduction by Lattimore and
sought to show that our occupation policy led to "failure for democratic values in Japan and a situation
of strategic weakness for the West." This childish libel was propagated by the IPR, which mailed out
2,300 postcards advertising the book. The Eastern Establishment in the U.S.
Behind this unfortunate situation lies another, more profound, relationship, which influences matters
much broader than Far Eastern policy. It involves the organization of tax-exempt fortunes of
international financiers into foundations to be used for educational, scientific, "and other public
purposes." Sixty or more years ago, public life in the West was dominated by the influence of "Wall
Street." This term has nothing to do with its use by the Communists to mean monopolistic
industrialism, but, on the contrary, refers to international financial capitalism deeply involved in the
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gold standard, foreign exchange fluctuations, floating of fixed-interest securities and, to a lesser extent,
flotation of industrial shares for stock-exchange markets. This group, which in the United States, was
completely dominated by J. P. Morgan and Company from the 1880's to the 1930's was cosmopolitan,
Anglophile, internationalist, Ivy League, eastern seaboard, high Episcopalian, and European-culture
conscious. Their connection with the Ivy League colleges rested on the fact that the large endowments
of these institutions required constant consultation with the financiers of Wall Street (or its lesser
branches on State Street, Boston, and elsewhere) and was reflected in the fact that these endowments,
even in 1930, were largely in bonds rather than in real estate or common stocks. As a consequence of
these influences, as late as the 1930's, J. P. Morgan and his associates were the most significant figures
in policy making at Harvard, Columbia, and to a lesser extent Yale, while the Whitneys were significant
at Yale, and the Prudential Insurance Company (through Edward D. Duffield) dominated Princeton.
Presidents of Harvard, Yale and Columbia Were Beholden to the Financial Powers
The names of these Wall Street luminaries still adorn these Ivy League campuses, with Harkness
colleges and a Payne Whitney gymnasium at Yale, a Pyne dormitory at Princeton, a Dillon Field House
and Lamont Library at Harvard. The chief officials of these universities were beholden to these
financial powers and usually owed their jobs to them. Morgan himself helped make Nicholas Murray
Butler president of Columbia; his chief Boston agent, Thomas Nelson Perkins of the First National
Bank of that city, gave Conant his boost from the chemical laboratory to University Hall at Harvard;
Duffield of Prudential, caught unprepared when the incumbent president of Princeton was killed in an
automobile in 1932, made himself president for a year before he chose Harold Dodds for the post in
1933. At Yale, Thomas Lamont, managing partner of the Morgan firm, was able to swing Charles
Seymour into the presidency of that university in 1937.
The Domination of the Ivy League and the National Government by Wall Street
The significant influence of "Wall Street" (meaning Morgan) both in the Ivy League and in
Washington, in the period of sixty or more years following 1880, explains the constant interchange
between the Ivy League and the Federal government, an interchange which undoubtedly aroused a
good deal of resentment in less-favored circles, who were more than satiated with the accents, tweeds,
and High Episcopal Anglophilia of these peoples. ... Dean Acheson ... took the full brunt of this
resentment from McCarthy and his allies in 1948-1954. The same feeling did no good to pseudo-Ivy
League figures like Alger Hiss.
The American Establishment
Because of its dominant position in Wall Street, the Morgan firm came also to dominate other Wall
Street powers, such as Carnegie, Whitney, Vanderbilt, Brown-Harriman, or Dillon-Reed. Close
alliances were made with Rockefeller, Mellon, and Duke interests but not nearly so intimate ones with
the great industrial powers like du Pont and Ford. [Because] ... of the great influence of this "Wall
Street" alignment, an influence great enough to merit the name of the "American Establishment," this
group could ... control the Federal government and, in consequence, had to adjust to a good many
government actions ... [which they had secretly supported ]. The chief of these were in taxation law,
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beginning with the graduated income tax in 1913, but culminating, above all else, in the inheritance tax.
These tax laws drove the great private fortunes dominated by Wall Street into tax-exempt foundations,
which became a major link in the Establishment network between Wall Street, the Ivy League, and the
Federal government. Dean Rusk, Secretary of State after 1961, formerly president of the Rockefeller
Foundation and Rhodes Scholar at Oxford (1931-1933), is as much a member of this nexus as Alger
Hiss, the Dulles brothers, Jerome Greene, James T. Shotwell, John W. Davis, Elihu Root, or Philip
Jessup.
The J. P. Morgan Firms Infiltrate and Control Left-Wing Political Movements in U.S.
More than fifty years ago the Morgan firm decided to infiltrate the Left-wing political movements in
the United States. This was relatively easy to do, since these groups were starved for funds and eager
for a voice to reach the people. Wall Street supplied both. The purpose was not to destroy ... or take
over but was really threefold:
(1) to keep informed about the thinking of Left-wing or liberal groups;
(2) to provide them with a mouthpiece so that they could "blow off steam," and
(3) to have a final veto on their publicity and possibly on their actions, if they ever went
"radical."
There was nothing really new about this decision, since other financiers had talked about it and even
attempted it earlier. What made it decisively important this time was the combination of its adoption by
the dominant Wall Street financier, at a time when tax policy was driving all financiers to seek taxexempt refuges for their fortunes, and at a time when the ultimate in Left-wing radicalism was about to
appear under the banner of the Third International.
The New Republic
The best example of this alliance of Wall Street and Left-wing publication was The New Republic, a
magazine founded by Willard Straight, using Payne Whitney money, in 1914. Straight, who had been
assistant to Sir Robert Hart (Director of the Chinese Imperial Customs Service and the head of the
European imperialist penetration of China) and had remained in the Far East from 1901 to 1918,
became a Morgan partner and the firm's chief expert on the Far East. He married Dorothy Payne
Whitney whose names indicate the family alliance of two of America's greatest fortunes. She was the
daughter of William C. Whitney, New York utility millionaire and the sister and co-heiress of Oliver
Payne, of the Standard Oil "trust." One of her brothers married Gertrude Vanderbilt, while the other,
Payne Whitney, married the daughter of Secretary of State John Hay, who enunciated the American
policy of the "Open Door" in China. In the next generation, three first cousins, John Hay ("Jock")
Whitney, Cornelius Vanderbilt ("Sonny") Whitney, and Michael Whitney ("Mike") Straight, were allied
in numerous public policy enterprises of a propagandist nature, and all three served in varied roles in
the late New Deal and Truman administrations. In these they were closely allied with other "Wall Street
liberals," such as Nelson Rockefeller.
Walter Lippman Was a Member of the Mysterious Round Table Group
The New Republic was founded by Willard and Dorothy Straight, using her money, in 1914, and
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continued to be supported by her financial contributions until March 23, 1953. The original purpose for
establishing the paper was to provide an outlet for the progressive Left and to guide it quietly in an
Anglophile direction. This latter task was entrusted to a young man, only four years out of Harvard, but
already a member of the mysterious Round Table group, which has played a major role in directing
England's foreign policy since its formal establishment in 1909. This new recruit, Walter Lippmann,
has been, from 1914 to the present, the authentic spokesman in American journalism for the
Establishments on both sides of the Atlantic in international affairs. His biweekly columns, which
appear in hundreds of American papers, are copyrighted by the New York Herald Tribune which is now
owned by J. H. Whitney. It was these connections, as a link between Wall Street and the Round Table
Group, which gave Lippmann the opportunity in 1918, while still in his twenties, to be the official
interpreter of the meaning of Woodrow Wilson's Fourteen Points to the British government.
Mike Straight Appointed to State Department
Willard Straight, like many Morgan agents, was present at the Paris Peace Conference but died there of
pneumonia before it began. Six years later, in 1925, when his widow married a second time and
became Lady Elmhirst of Dartington Hall, she took her three small children from America to England,
where they were brought up as English. She herself renounced her American citizenship in 1935.
Shortly afterward her younger son, "Mike," unsuccessfully "stood" for Parliament on the Labour Party
ticket for the constituency of Cambridge University, an act which required, under the law, that he be a
British subject. This proved no obstacle, in 1938, when Mike, age twenty-two, returned to the United
States, after thirteen years in England, and was at once appointed to the State Department as Adviser on
International Economic Affairs. In 1937, apparently in preparation for her son's return to America,
Lady Elmhirst, sole owner of The New Republic, shifted this ownership to Westrim, Ltd., a dummy
corporation created for the purpose in Montreal, Canada, and set up in New York, with a grant of $1.5
million, the William C. Whitney Foundation of which Mike became president. This helped finance the
family's interest in modern art and dramatic theater, including sister Beatrix's tours as a Shakespearean
actress.
Mike Straight Takes Over The New Republic
Mike Straight served in the Air Force in 1943-1945, but this did not in any way hamper his career with
The New Republic. He became Washington correspondent in May 1941; editor in June 1943; and
publisher in December 1946 (when he made Henry Wallace editor). During these shifts he changed
completely the control of The New Republic, and its companion magazine Asia, removing known
liberals (such as Robert Morss Lovett, Malcolm Cowley, and George Soule), centralizing the control,
and taking it into his own hands. This control by Whitney money had, of course, always existed, but it
had been in abeyance for the twenty-five years following Willard Straight's death.
The New Republic Was a Vehicle for Advancing the Designs of International Bankers
The first editor of The New Republic, the well-known "liberal" Herbert Croly, was always aware of the
situation. After ten years in the job, he explained the relationship in the "official" biography of Willard
Straight which he wrote for a payment of $25,000. "Of course they [the Straights] could always
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withdraw their financial support if they ceased to approve of the policy of the paper; and, in that event,
it would go out of existence as a consequence of their disapproval." Croly's biography of Straight,
published in 1924, makes perfectly clear that Straight was in no sense a liberal or a progressive, but
was, indeed, a typical international banker and that The New Republic was simply a medium for
advancing certain designs of such international bankers, notably to blunt the isolationism and antiBritish sentiments so prevalent among many America progressives, while providing them with a
vehicle for expression of their progressive views in literature, art, music, social reform, and even
domestic politics. In 1916, when the editorial board wanted to support Wilson for a second term in the
Presidency, Willard Straight took two pages of the magazine to express his own support for Hughes.
The chief achievement of The New Republic, however, in 1914-1918 and again in 1938-1948, was for
interventionism in Europe and support of Great Britain.
A New Magazine Is Created to Support the United Nations
The role of "Mike" Straight in this situation in 1938-1948 is clear. He took charge of this family fief,
abolished the editorial board, and carried on his father's aims, in close cooperation with labor and Leftwing groups in American politics. In these efforts he was in close contact with his inherited Wall Street
connections, especially his Whitney cousins and certain family agents like Bruce Bliven, Milton C.
Rose, and Richard J. Walsh. They handled a variety of enterprises, including publications, corporations,
and foundations, which operated out of the law office of Baldwin, Todd, and Lefferts of 120 Broadway,
New York City. In this nexus were The New Republic, Asia, Theatre Arts. The Museum of Modern Art,
and others, all supported by a handful of foundations, including the William C. Whitney Foundation,
the Gertrude Vanderbilt Whitney Foundation, the J. H. Whitney Foundation, and others. An interesting
addition was made to these enterprises in 1947 when Straight founded a new magazine, the United
Nations World, to be devoted to the support of the UN. Its owners of record were The New Republic
itself (under its corporate name), Nelson Rockefeller, J. H. Whitney, Max Ascoli (an anti-Fascist Italian
who had married American wealth and used it to support a magazine of his own, The Reporter), and
Beatrice S. Dolivet. The last lady, Mike Straight's sister, made her husband, Louis Dolivet,
"International Editor" of the new magazine.
The United Nations World
An important element in this nexus was Asia magazine, which had been established by Morgan's
associates as the journal of the American Asiatic Society in 1898, had been closely associated with
Willard Straight during his lifetime, and was owned outright by him from January 1917. In the 1930's it
was operated for the Whitneys by Richard J. Walsh and his wife, known to the world as Pearl Buck.
Walsh, who acted as editor of Asia, was also president of the holding corporation of The New Republic
for several years and president of the John Day publishing company. In 1942, after Nelson Rockefeller
and Jock Whitney joined the government to take charge of American propaganda in Latin America in
the Office of the Coordinator of Inter-American Affairs, Asia magazine changed its name to Asia and
the Americas. In 1947, when Mike Straight began a drive to "sell" the United Nations, it was
completely reorganized into United Nations World.
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The Relationship of Mike Straight and Communists
Mike Straight was deeply anti-Communist, but he frequently was found associated with them,
sometimes as a collaborator, frequently as an opponent. The opposition was seen most clearly in his
efforts as one of the founders of the American Veterans Committee (AVC) and its political sequel, the
Americans for Democratic Action (ADA). The collaboration may be seen in Straight’s fundamental
role in Henry Wallace’s third party campaign for the Presidency in 1948.
The relationship between Straight and the Communists in pushing Wallace into his 1948 adventure may
be misjudged very easily. The anti-Communist Right had a very simple explanation of it: Wallace and
Straight were Communists and hoped to elect Wallace President. Nothing could be further from the
truth. All three—Straight, Wallace, and the Communists, joined in the attempt merely as a means of
defeating Truman. Straight was the chief force in getting the campaign started in 1947 and was largely
instrumental in bringing some of the Communists into it, but when he had them all aboard the Wallace
train, he jumped off himself, leaving both Wallace and the Communists gliding swiftly, without
guidance or hope, on the downhill track to oblivion. It was a brilliantly done piece of work.
Communists Oppose the Truman Doctrine
The Communists wanted a third party in 1948 because it seemed the only way to beat Truman and
destroy the Marshall Plan. They hated the President for the "Truman Doctrine" and his general
opposition to the Soviet Union, but, above all, because he had prevented the postwar economic collapse
and the American relapse into isolationism, both of which the Communists had not only expected but
critically needed. It was obvious to everyone that a two-party campaign in 1948 would give the vote of
the Right to the Republicans and the vote of the Left to the Democrats, with the victory decided by
where the division came in the Center. In such a situation neither Straight nor the Communists could
influence the outcome in any way. But a third party on the Left, by taking labor and other Left-wing
votes from Truman, could reduce the Democratic totals in the major states enough to throw those states
and the election to the Republicans. Why Straight wanted to do this in the critical months from
September 1946 to April 1948 is unknown, but he clearly changed his mind in the spring of 1948,
abandoning poor, naïve Henry Wallace to the Communists at that time. A possible explanation of these
actions will be given later.
Mike Straight Supports Henry Wallace
What is clear is that Mike Straight had a great deal to do with Wallace in the autumn of 1946 when the
former Vice-President broke with Truman and was fired from the Cabinet. The break came over a
Wallace speech, very critical of American policy toward Russia, given before a wildly biased proSoviet audience in Madison Square Garden on September 12, 1946. At the time Truman told reporters
he had approved the speech before delivery (a version which Wallace still upholds), but within a few
days, Secretary of State Byrnes forced the President to make a choice between him or Wallace. and the
latter was dismissed from the Cabinet.
Out of the government, without a platform from which to address the public, Wallace's political future
looked dim in the early autumn of 1946. Straight provided the platform, by giving him his own
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editorial chair at The New Republic (announced October 12, 1946). For the next fifteen months the
Wallace campaign was a Straight campaign. The latter supplied speech-writers, research assistants,
editorial writers, office space, money, and The New Republic itself. Technically Wallace was editor, but
the magazine staff and expenditures steadily increased in directions which had little to do with the
magazine and everything to do with Wallace's presidential campaign, although this effort was not
announced to the public until a year later, in December 1947.
The Admission of the Communists
In the meantime, from the spring of 1947 onward, the Communists came in. It would not be strictly
true to say that Straight ''brought them in," but I believe it is fair to say that he "let them in." For
example, one of the first to arrive was Lew Frank, Jr., brought in by Straight, who later insisted that he
did not realize that Frank was a Communist. As a matter of fact, there was no evidence that Frank was a
member of the Communist Party, but Straight knew exactly where Frank stood politically since they
had engaged, on opposite sides, in a bitter struggle between Communists and anti-Communists for
control of AVC. In this, Frank had been a member of the Communist caucus within AVC's national
planning committee (as Straight told David A. Shannon in 1956), and followed every twist of the party
line in this whole period. This party line became the pattern for Wallace's formal speeches, since Frank
was his most important speech-writer over a period of eighteen months from early 1947 to October
1948. More than this, Frank accompanied Wallace on his endless travels during this period. In the
autumn of 1947 these three, Wallace, Frank, and Straight, made a trip to the Mediterranean and were
given an audience together by the Pope on November 4, 1947. On his return from this journey, Wallace
was a changed man; his mind was made up, to run against Truman on a third-party ticket. The
announcement was made public in The New Republic in December.
The End of Communism in the U.S. as a Significant Political Force
Straight continued to work for Wallace for President, and The New Republic remained the center of the
movement for almost four more months, but something had changed. While he was still working for
Wallace as President and allowing the Communists into the project, he was simultaneously doing two
other things: working openly, and desperately, to prevent the new third party from campaigning on any
level other than the presidential, by blocking everywhere he could Communist efforts to run third-party
candidates for state or congressional offices in competition with the Democrats; much less publicly, he
worked with his anti-Communist friends in labor, veteran, and liberal groups to prevent endorsement of
the Wallace candidacy. As a consequence, the Communists were destroyed and eventually driven out of
such organizations, notably from the CIO-PAC (the great political alignment of labor and progressive
groups). As David Shannon wrote in The Decline of American Communism (1959), "The Communists'
support of Wallace shattered the 'left-center' coalition in the CIO; for the Communist unions, the
Wallace movement was the beginning of the end. The coalition began to dissolve almost immediately
after Wallace's announcement." What this means is that Wallace's campaign to defeat Truman destroyed
completely the remaining vestiges of the Popular Front movement of the 1930's, drove the Communists
out of the unions and all progressive political groups, and drove the Communist unions out of the labor
movement of the country. This ended Communism as a significant political force in the United States,
and the end was reached by December 1948, long before McCarthy or J. Edgar Hoover or HUAC did
their work. The men who achieved this feat were Wallace and Straight....
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Communist Research Group Publishes Plans in The New Republic
During the winter of 1947-1948, Lew Frank recognized that he was incapable of handling the complex
issues raised in Wallace's many speeches. Accordingly, he joined a "Communist research group" which
met in the Manhattan home of the wealthy "Wall Street Red," Frederick Vanderbilt Field. The chief
members of this group, probably all Communists, were Victor Perlo and David Ramsay. This pair drew
up for Wallace an attack on the Marshall Plan and an alternative Communist plan for European
reconstruction, which was published in The New Republic on January 12, 1948, was presented by
Wallace to the Marshall Plan "Hearings" of the House Foreign Affairs Committee on February 24th, but
was subsequently repudiated by Straight. In the three months following the Perlo article, Straight was
busy sawing off the limb on which Wallace now sat with the Communists. He discharged from The
New Republic payroll all those who were working for the campaign rather than for the magazine, and
the office on East Forty-ninth Street once again settled down to publishing a "liberal" weekly. In protest
at this reversal, his managing editor, Edd Johnson, resigned.
If Mike Straight planned to do what he did do to the Communists in 1946-1948, that is, to get them out
of progressive movements and unions, he pulled off the most skillful political coup in twentieth century
American politics. It is not clear that he did plan it or intend it. But as a very able and informed man, he
must have had some motivation when he began, in 1947, the effort which he knew might defeat
Truman in 1948. While the evidence is not conclusive, there are hints that another, more personal,
motive might have been involved, at least partly, in building up the Wallace threat to Truman's political
future. It concerns the Whitney family interest in overseas airlines.
The Whitney Family
The Whitney family were deeply involved in airlines. Sonny Whitney was a founder of Pan-American
Airlines and chairman of its board of directors from its establishment in 1928 until he went to military
service in 1941. Mike's brother, Air Commodore Whitney Willard Straight, C.B.E., was even more
deeply involved on the British side. Big brother Whitney (born in 1912) had been in civil aviation in
England from the age of twenty-two, and by 1946-1949, was not only a director of the Midland Bank,
one of the world's greatest financial institutions, but was also a director of Rolls-Royce and of BOAC,
as well as chairman of the board of directors of BEA (British European Airways). In the years
following the end of the war, a violent struggle was going on, within aviation circles and the United
States government, over the future of American trans-ocean air services. Before the war, these had been
a monopoly of Pan-Am; now, at the end of the war, the struggle was over how the CAB would divide
up this monopoly and what disposition would be made of the enormous air-force investment in
overseas bases. Apparently the White House was not cooperative in these matters at first, but late in
1947 C. V. Whitney was made, by presidential interim appointment, Assistant Secretary of the new
Department of the Air Force and, eighteen months later, after Truman's inauguration, was made
Assistant Secretary of Commerce for Aeronautics. This was the most important post concerned with
civil aviation in any Federal department. The connection, if any, between these appointments and Mike
Straight's original support and later abandonment of Wallace has never been revealed.
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J. P. Morgan Felt that All Political Parties Were to Be Used
The associations between Wall Street and the Left, of which Mike Straight is a fair example, are really
survivals of the associations between the Morgan Bank and the Left. To Morgan all political parties
were simply organizations to be used, and the firm always was careful to keep a foot in all camps.
Morgan himself, Dwight Morrow, and other partners were allied with Republicans; Russell C.
Leffingwell was allied with the Democrats; Grayson Murphy was allied with the extreme Right; and
Thomas W. Lamont was allied with the Left. Like the Morgan interest in libraries, museums, and art, its
inability to distinguish between loyalty to the United States and loyalty to England, its recognition of
the need for social work among the poor, the multi-partisan political views of the Morgan firm in
domestic politics went back to the original founder of the firm, George Peabody (1795-1869). To this
same seminal figure may be attributed the use of tax-exempt foundations for controlling these
activities, as may be observed in many parts of America to this day, in the use of Peabody foundations
to support Peabody libraries and museums. Unfortunately, we do not have space here for this great and
untold story, but it must be remembered that what we do say is part of a much larger picture.
The Chief Links Between Wall Street, the Left and Communists
Our concern at the moment is with the links between Wall Street and the Left, especially the
Communists. Here the chief link was the Thomas W. Lamont family. This family was in many ways
parallel to the Straight family. Tom Lamont had been brought into the Morgan firm, as Straight was
several years later, by Henry P. Davison, a Morgan partner from 1909. Lamont became a partner in
1910, as Straight did in 1913. Each had a wife who became a patroness of Leftish causes, and two sons,
of which the elder was a conventional banker, and the younger was a Left-wing sympathizer and
sponsor. In fact, all the evidence would indicate that Tom Lamont was simply Morgan's apostle to the
Left in succession to Straight, a change made necessary by the latter's premature death in 1918. Both
were financial supporters of liberal publications' in Lamont's case The Saturday Review of Literature,
which he supported throughout the 1920's and 1930's, and the New York Post, which he owned from
1918 to 1924.
The Files of the House Un-American Activities Committee
The chief evidence, however, can be found in the files of the HUAC which show Tom Lamont, his wife
Flora, and his son Corliss as sponsors and financial angels to almost a score of extreme Left
organizations, including the Communist Party itself. Among these we need mention only two. One of
these was a Communist-front organization, the Trade Union Services, Incorporated, of New York City,
which in 1947 published fifteen trade-union papers for various CIO unions. Among its officers were
Corliss Lamont and Frederick Vanderbilt Field (another link between Wall Street and the
Communists). The latter was on the editorial boards of the official Communist newspaper in New York,
the Daily Worker, as well as its magazine, The New Masses, and was the chief link between the
Communists and the Institute of Pacific Relations in 1928-1947. Corliss Lamont was the leading light
in another Communist organization, which started life in the 1920's as the Friends of the Soviet Union,
but in 1943 was reorganized, with Lamont as chairman of the board and chief incorporator, as the
National Council of American-Soviet Friendship.
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Corliss Lamont Was One of the Chief Spokesmen for the Soviet Point of View in
America
During this whole period of over two decades, Corliss Lamont, with the full support of his parents, was
one of the chief figures in "fellow traveler" circles and one of the chief spokesmen for the Soviet point
of view both in these organizations and also in connections which came to him either as son of the most
influential man in Wall Street or as professor of philosophy at Columbia University. His relationship
with his parents may be reflected in a few events of this period.
Lamont Refuses to Testify Before Congress
In January 1946, Corliss Lamont was called before HUAC to give testimony on the National Council
of American-Soviet Friendship. He refused to produce records, was subpoenaed, refused, was charged
with contempt of Congress, and was so cited by the House of Representatives on June 26, 1946. In the
midst of this controversy, in May, Corliss Lamont and his mother, Mrs. Thomas Lamont, presented
their valuable collection of the works of Spinoza to Columbia University. The adverse publicity
continued, yet when Thomas Lamont rewrote his will, on January 6, 1948, Corliss Lamont remained in
it as co-heir to his father's fortune of scores of millions of dollars.
The McCarran Committee Shows that China Was Lost to the Communists by the
Deliberate Actions of the State Department and the Institute of Pacific Relations
In 1951 the Subcommittee on Internal Security of the Senate Judiciary Committee, the so-called
McCarran Committee, sought to show that China had been lost to the Communists by the deliberate
actions of a group of academic experts on the Far East and Communist fellow travelers whose work in
that direction was controlled and coordinated by the Institute of Pacific Relations (IPR). The influence
of the Communists in IPR is well established, but the patronage of Wall Street is less well known.
The IPR Was Financed by the Carnegie and Rockefeller Foundations
The IPR was a private association of ten independent national councils in ten countries concerned with
affairs in the Pacific. The headquarters of the IPR and of the American Council of IPR were both in
New York and were closely associated on an interlocking basis. Each spent about $2.5 million dollars
over the quarter-century from 1925 to 1950, of which about half, in each case, came from the Carnegie
Foundation and the Rockefeller Foundation (which were themselves interlocking groups controlled by
an alliance of Morgan and Rockefeller interests in Wall Street). Much of the rest, especially of the
American Council, came from firms closely allied to these two Wall Street interests, such as Standard
Oil, International Telephone and Telegraph, International General Electric, the National City Bank, and
the Chase National Bank. In each case, about 10 percent of income came from sales of publications
and, of course, a certain amount came from ordinary members who paid $15 a year and received the
periodicals of the IPR and its American Council, Pacific Affairs and Far Eastern Survey.
Large Funds Were Given to IPR by Wall Street and the Large Foundations
The financial deficits which occurred each year were picked up by financial angels, almost all with
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close Wall Street connections. The chief identifiable contributions here were about $60,000 from
Frederick Vanderbilt Field over eighteen years, $14,700 from Thomas Lamont over fourteen years,
$800 from Corliss Lamont (only after 1947), and $18,000 from a member of Lee, Higginson in Boston
who seems to have been Jerome D. Greene. In addition, large sums of money each year were directed
to private individuals for research and travel expenses from similar sources, chiefly the great financial
foundations.
The IPR Line Was Parroted by the State Department, Ivy League Schools and Scholars
Funded by Wall Street
Most of these awards for work in the Far Eastern area required approval or recommendation from
members of IPR. Moreover, access to publication and recommendations to academic positions in the
handful of great American universities concerned with the Far East required similar sponsorship. And,
finally, there can be little doubt that consultant jobs on Far Eastern matters in the State Department or
other government agencies were largely restricted to IPR-approved people. The individuals who
published, who had money, found jobs, were consulted, and who were appointed intermittently to
government missions were those who were tolerant of the IPR line. The fact that all these lines of
communication passed through the Ivy League universities or their scattered equivalents west of the
Appalachians, such as Chicago, Stanford, or California, unquestionably went back to Morgan's
influence in handling large academic endowments.
IPR Scholars, the State Department and the Kremlin Promote the Same Viewpoint
There can be little doubt that the more active academic members of IPR, the professors and publicists
who became members of its governing board (such as Owen Lattimore, Joseph P. Chamberlain, and
Philip C. Jessup of Columbia, William W. Lockwood of Princeton, John K. Fairbank of Harvard, and
others) and the administrative staff (which became, in time, the most significant influence in its
policies) developed an IPR party line. It is, furthermore, fairly clear that this IPR line had many points
in common both with the Kremlin's party line on the Far East and with the State Department's policy
line in the same area. The interrelations among these, or the influence of one on another, is highly
disputed. Certainly no final conclusions can be drawn.
There Was a Great Deal of Intrigue Used to Influence U.S. Policy
Clearly there were some Communists, even party members, involved (such as Frederick Vanderbilt
Field).... Furthermore, there was a great deal of intrigue both to help those who agreed with the IPR
line and to influence United States government policy in this direction., but there is no evidence of
which I am aware of any explicit plot or conspiracy to direct American policy in a direction favorable
either to the Soviet Union or to international Communism. [The evidence alluded to here exists,
however, the real aim of these individuals and groups was to betray China into the hands of the
communists in order to build a new Imperial System. The Soviet Union is a part of this secret Imperial
Order and was set up by the Money Power in 1917. They planned to support and build Communist
China into a new Super Power to rule Asia.]....
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Many People in the U.S. Accept the Communist Ideology
The true explanation of what happened is not yet completely known and, as far as it is known, is too
complicated to elucidate here. It is, however, clear that many persons who were born in the period
1900-1920 and came to maturity in the period 1928-1940 were so influenced by their experiences of
war, depression, and insecurity that they adopted, more or less unconsciously, certain aspects of the
Communist ideology (such as the economic interpretation of history, the role of a dualistic class
struggle in human events, or the exploitative interpretation of the role of capital in the productive
system and of the possessing groups in any society). Many of these ideas were nonsense, even in terms
of their own experiences, but they were facile interpretative guides for people who, whatever their
expert knowledge of their special areas, were lacking in total perspective on society as a whole or
human experience as a whole.... This outlook was, for example, prevalent in that ubiquitous intriguer,
Lionel Curtis, who was the original guide and parent of the IPR and of many similar organizations....
The Right’s Fairy Tale
The ... Right[‘s] version of these events as written up by John T. Flynn, Freda Utley, and others ... had a
tremendous impact on American opinion and American relations with other countries in the years 19471955. This ... Right fairy tale, which is now an accepted folk myth in many groups in America, pictured
the recent history of the United States, in regard to domestic reform and in foreign affairs, as a wellorganized plot by extreme Left-wing elements, operating from the White House itself and controlling
all the chief avenues of publicity in the United States, to destroy the American way of life, based on
private enterprise, laissez faire, and isolationism, in behalf of alien ideologies of Russian Socialism and
British cosmopolitanism (or internationalism). This plot, if we are to believe the myth, worked through
such avenues of publicity as The New York Times and the Herald Tribune, the Christian Science
Monitor and the Washington Post, the Atlantic Monthly and Harper's Magazine and had at its core the
wild-eyed and bushy-haired theoreticians of Socialist Harvard and the London School of Economics. It
was determined to bring the United States into World War II on the side of England (Roosevelt's first
love) and Soviet Russia (his second love) in order to destroy every finer element of American life and,
as part of this consciously planned scheme, invited Japan to attack Pearl Harbor, and destroyed Chiang
Kai-shek, all the while undermining America's real strength by excessive spending and unbalanced
budgets.
The Right’s Fairy Tale Does Have a Modicum of Truth
This myth, like all fables, does in fact have a modicum of truth. There does exist, and has existed for a
generation, an international Anglophile network which operates, to some extent, in the way the ... Right
believes the Communists act. In fact, this network, which we may identify as the Round Table Groups,
has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I
know of the operations of this network because I have studied it for twenty years and was permitted for
two years, in the early 1960's, to examine its papers and secret records. I have no aversion to it or to
most of its aims and have, for much of my life, been close to it and to many of its instruments. I have
objected, both in the past and recently, to a few of its policies (notably to its belief that England was an
Atlantic rather than a European Power and must be allied, or even federated, with the United States and
must remain isolated from Europe), but in general my chief difference of opinion is that it wishes to
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remain unknown, and I believe its role in history is significant enough to be known.
The Round Table Groups Have Played a Very Significant Role in the History of the U.S.
The Round Table Groups have already been mentioned in this book several times, notably in
connection with the formation of the British Commonwealth in chapter 4 and in the discussion of
appeasement in chapter 12 ("the Cliveden Set"). At the risk of some repetition, the story will be
summarized here, because the American branch of this organization (sometimes called the "Eastern
Establishment' ) has played a very significant role in the history of the United States in the last
generation.
The Original Purpose of the Round Table Groups
The Round Table Groups were semi-secret discussion and lobbying groups organized by Lionel Curtis,
Philip H. Kerr (Lord Lothian), and (Sir) William S. Marris in 1908-1911. This was done on behalf of
Lord Milner, the dominant Trustee of the Rhodes Trust in the two decades 1905-1925. The original
purpose of these groups was to seek to federate the English-speaking world along lines laid down by
Cecil Rhodes (1853-1902) and William T. Stead (1849-1912), and the money for the organizational
work came originally from the Rhodes Trust. By 1915 Round Table groups existed in seven countries,
including England, South Africa, Canada, Australia, New Zealand, India, and a rather loosely organized
group in the United States (George Louis Beer, Walter Lippmann, Frank Aydelotte, Whitney
Shepardson, Thomas W. Lamont, Jerome D. Greene, Erwin D. Canham of the Christian Science
Monitor, and others). The attitudes of the various groups were coordinated by frequent visits and
discussions and by a well informed and totally anonymous quarterly magazine, The Round Table,
whose first issue, largely written by Philip Kerr, appeared in November 1910.
The Leaders of the Round Table Groups
The leaders of this group were: Milner, until his death in 1925, followed by Curtis (1872-1955), Robert
H, (Lord) Brand (brother-in-law of Lady Astor) until his death in 1963, and now Adam D. Marris, son
of Sir William and Brand's successor as managing director of Lazard Brothers bank. The original
intention had been to have collegial leadership, but Milner was too secretive and headstrong to share
the role. He did so only in the period 1913-1919 when he held regular meetings with some of his
closest friends to coordinate their activities as a pressure group in the struggle with Wilhelmine
Germany. This they called their "Ginger Group." After Milner's death in 1925, the leadership was
largely shared by the survivors of Milner's "Kindergarten," that is, the group of young Oxford men
whom he used as civil servants in his reconstruction of South Africa in 1901-1910. Brand was the last
survivor of the "Kindergarten"; since his death, the greatly reduced activities of the organization have
been exercised largely through the Editorial Committee of The Round Table magazine under Adam
Marris.
Financial Backers of the Found Table Groups
Money for the widely ramified activities of this organization came originally from the associates and
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followers of Cecil Rhodes, chiefly from the Rhodes Trust itself, and from wealthy associates such as
the Beit brothers, from Sir Abe Bailey, and (after 1915) from the Astor family. Since 1925 there have
been substantial contributions from wealthy individuals and from foundations and firms associated with
the international banking fraternity, especially the Carnegie United Kingdom Trust, and other
organizations associated with J. P. Morgan, the Rockefeller and Whitney families, and the associates of
Lazard Brothers and of Morgan, Grenfell, and Company.
The Existing Financial Network in New York and London
The chief backbone of this organization grew up along the already existing financial cooperation
running from the Morgan Bank in New York to a group of international financiers in London led by
Lazard Brothers. Milner himself in 1901 had refused a fabulous offer, worth up to $100,000 a year, to
become one of the three partners of the Morgan Bank in London, in succession to the younger J. P.
Morgan who moved from London to join his father in New York (eventually the vacancy went to E. C.
Grenfell, so that the London affiliate of Morgan became known as Morgan, Grenfell, and Company).
Instead, Milner became director of a number of public banks, chiefly the London Joint Stock Bank,
corporate precursor of the Midland Bank. He became one of the greatest political and financial powers
in England, with his disciples strategically placed throughout England in significant places, such as the
editorship of The Times, the editorship of The Observer, the managing directorship of Lazard Brothers,
various administrative posts, and even Cabinet positions. Ramifications were established in politics,
high finance, Oxford and London universities, periodicals, the civil service, and tax-exempt
foundations.
Front Organizations Established in Key Countries
At the end of the war of 1914, it became clear that the organization of this system had to be greatly
extended. Once again the task was entrusted to Lionel Curtis who established, in England and each
dominion, a front organization to the existing local Round Table Group. This front organization, called
the Royal Institute of International Affairs, had as its nucleus in each area the existing submerged
Round Table Group. In New York it was known as the Council on Foreign Relations, and was a front
for J. P. Morgan and Company in association with the very small American Round Table Group. The
American organizers were dominated by the large number of Morgan "experts," including Lamont and
Beer, who had gone to the Paris Peace Conference and there became close friends with the similar
group of English "experts" which had been recruited by the Milner group. In fact, the original plans for
the Royal Institute of International Affairs and the Council on Foreign Relations were drawn up at
Paris. The Council of the RIIA (which, by Curtis's energy came to be housed in Chatham House, across
St. James's Square from the Astors, and was soon known by the name of this headquarters) and the
board of the Council on Foreign Relations have carried ever since the marks of their origin. Until 1960
the council at Chatham House was dominated by the dwindling group of Milner's associates, while the
paid staff members were largely the agents of Lionel Curtis. The Round Table for years (until 1961)
was edited from the back door of Chatham House grounds in Ormond Yard, and its telephone came
through the Chatham House switchboard.
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Chapter 65—American Confusions, 1945-1950
The Council on Foreign Relations in New York Was Dominated by J. P. Morgan
The New York branch was dominated by the associates of the Morgan Bank. For example, in 1928 the
Council on Foreign Relations had John W. Davis as president, Paul Cravath as vice-president, and a
council of thirteen others, which included Owen D. Young, Russell C. Leffingwell, Norman Davis,
Allen Dulles, George W. Wickersham, Frank L. Polk, Whitney Shepardson, Isaiah Bowman, Stephen P.
Duggan, and Otto Kahn. Throughout its history the council has been associated with the American
Round Tablers, such as Beer, Lippmann. Shepardson. and Jerome Greene.
Wall Street Contacts
The academic figures have been those linked to Morgan, such as James T. Shotwell, Charles Seymour,
Joseph P. Chamberlain, Philip Jessup, Isaiah Bowman and, more recently, Philip Moseley, Grayson L.
Kirk, and Henry M. Wriston. The Wall Street contacts with these were created originally from Morgan's
influence in handling large academic endowments. In the case of the largest of these endowments, that
at Harvard, the influence was usually exercised indirectly through "State Street," Boston, which, for
much of the twentieth century, came through the Boston banker Thomas Nelson Perkins.
Wall Street Law Firms
Closely allied with this Morgan influence were a small group of Wall Street law firms, whose chief
figures were Elihu Root, John W. Davis, Paul D. Cravath, Russell Leffingwell, the Dulles brothers and,
more recently, Arthur H. Dean, Philip D. Reed, and John J. McCloy. Other nonlegal agents of Morgan
included men like Owen D. Young and Norman H. Davis.
J. P. Morgan and Company Were the Center of the Round Table Group in America
On this basis, which was originally financial and goes back to George Peabody, there grew up in the
twentieth century a power structure between London and New York which penetrated deeply into
university life, the press, and the practice of foreign policy. In England the center was the Round Table
Group, while in the United States it was J. P. Morgan and Company or its local branches in Boston,
Philadelphia, and Cleveland. Some rather incidental examples of the operations of this structure are
very revealing, just because they are incidental. For example, it set up in Princeton a reasonable copy of
the Round Table Group's chief Oxford headquarters, All Souls College. This copy, called the Institute
for Advanced Study, and best known, perhaps, as the refuge of Einstein, Oppenheimer, John von
Neumann, and George F. Kennan, was organized by Abraham Flexner of the Carnegie Foundation and
Rockefeller's General Education Board after he had experienced the delights of All Souls while serving
as Rhodes Memorial Lecturer at Oxford. The plans were largely drawn by Tom Jones, one of the
Round Table's most active intriguers and foundation administrators.
The American Branch Exerted Its Influence Through Five American Newspapers
The American branch of this "English Establishment" exerted much of its influence through five
American newspapers (The New York Times, New York Herald Tribune, Christian Science Monitor, the
Washington Post, and the lamented Boston Evening Transcript). In fact, the editor of the Christian
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Science Monitor was the chief American correspondent (anonymously) of The Round Table, and Lord
Lothian, the original editor of The Round Table and later secretary of the Rhodes Trust (1925-1939)
and ambassador to Washington, was a frequent writer in the Monitor. It might be mentioned that the
existence of this Wall Street, Anglo-American axis is quite obvious once it is pointed out. It is reflected
in the fact that such Wall Street luminaries as John W. Davis, Lewis Douglas, Jock Whitney, and
Douglas Dillon were appointed to be American ambassadors in London.
The Double International Network Extended into New Countries through Institute of
International Affairs
This double international network in which the Round Table groups formed the semi-secret or secret
nuclei of the Institutes of International Affairs was extended into a third network in 1925, organized by
the same people for the same motives. Once again the mastermind was Lionel Curtis, and the earlier
Round Table Groups and Institutes of International Affairs were used as nuclei for the new network.
However, this new organization for Pacific affairs was extended to ten countries, while the Round
Table Groups existed only in seven. The new additions, ultimately China, Japan, France, the
Netherlands, and Soviet Russia, had Pacific councils set up from scratch. In Canada, Australia, and
New Zealand, Pacific councils, interlocked and dominated by the Institutes of International Affairs,
were set up. In England, Chatham House served as the English center for both nets, while in the United
States the two were parallel creations (not subordinate) of the Wall Street allies of the Morgan Bank.
The financing came from the same international banking groups and their subsidiary commercial and
industrial firms. In England, Chatham House was financed for both networks by the contributions of
Sir Abe Bailey, the Astor family, and additional funds largely acquired by the persuasive powers of
Lionel Curtis. The financial difficulties of the IPR Councils in the British Dominions in the depression
of 1929-1935 resulted in a very revealing effort to save money, when the local Institute of International
Affairs absorbed the local Pacific Council, both of which were, in a way, expensive and needless fronts
for the local Round Table groups.
The Chief Aim of the Elaborate and Semi-secret Organization
The chief aims of this elaborate, semi-secret organization were ... to coordinate the international
activities and outlooks of all the English-speaking world into one (which would largely, it is true, be
that of the London group); to work to ... help backward, colonial, and underdeveloped areas to advance
toward stability, law and order, and prosperity along lines somewhat similar to those taught at Oxford
and the University of London (especially the School of Economics and the Schools of African and
Oriental Studies). [Democratic socialism, finance capitalism, monopoly capitalism, secularism,
internationalism, etc.]
These organizations and their financial backers were in no sense reactionary or Fascistic persons, as
Communist propaganda would like to depict them. Quite the contrary. They were gracious and cultured
gentlemen of ... social experience who were much concerned with the freedom of expression of
minorities and the rule of law for all, who constantly thought in terms of Anglo-American solidarity, of
political partition and federation, and who were convinced that they could gracefully civilize the Boers
of South Africa, the Irish, the Arabs, and the Hindus, and who are largely responsible for the partitions
of Ireland, Palestine, and India, as well as the federations of South Africa, Central Africa, and the West
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Indies. Their desire to win over the opposition by cooperation worked with Smuts but failed with
Hertzog, worked with Gandhi but failed with Menon, worked with Stresemann.... If their failures now
loom larger than their successes, this should not be allowed to conceal the high motives with which
they attempted both. [Contrary to published claims, the real goal of these individuals and organizations
is to further the development of a New Imperial Order and World Empire.]
Round Table Groups Jettison Communists When Congress Discovers Their Activities
It was this group of people, whose wealth and influence so exceeded their experience and
understanding, who provided much of the framework of influence which the Communist sympathizers
and fellow travelers took over in the United States in the 1930's. It must be recognized that the power
that these energetic Left-wingers exercised was never their own power or Communist power but was
ultimately the power of the international financial coterie, and, once the anger and suspicions of the
American people were aroused, as they were by 1950, it was a fairly simple matter to get rid of the Red
sympathizers.
The Reece Committee to Investigate Tax Exempt Foundations
Before this could be done, however, a congressional committee, following backward to their source the
threads which led from admitted Communists like Whittaker Chambers, through Alger Hiss, and the
Carnegie Endowment to Thomas Lamont and the Morgan Bank, fell into the whole complicated
network of the interlocking tax-exempt foundations. The Eighty-third Congress in July 1953 set up a
Special Committee to Investigate Tax-Exempt Foundations with Representative B. Carroll Reece, of
Tennessee, as chairman. It soon became clear that people of immense wealth would be unhappy if the
investigation went too far and that the "most respected" newspapers in the country, closely allied with
these men of wealth, would not get excited enough about any revelations to make the publicity worth
while, in terms of votes or campaign contributions. An interesting report showing the Left-wing
associations of the interlocking nexus of tax-exempt foundations was issued in 1954 rather quietly.
Four years later, the Reece committee's general counsel, René A. Wormser, wrote a shocked, but not
shocking, book on the subject called Foundations: Their Power and Influence. [See the Staff Reports
prepared by the Committee under the direction of Norman Dodd.]
Jerome D. Greene Is One of the Key Figures in the Establishment of the Council on
Foreign Relations
One of the most interesting members of this Anglo-American power structure was Jerome D. Greene
(1874-1959). Born in Japan of missionary parents, Greene graduated from Harvard's college and law
school by 1899 and became secretary to Harvard's president and corporation in 1901-1910. This gave
him contacts with Wall Street which made him general manager of the Rockefeller Institute (19101912), assistant to John D. Rockefeller in philanthropic work for two years, then trustee to the
Rockefeller Institute, to the Rockefeller Foundation, and to the Rockefeller General Education Board
until 1939. For fifteen years (1917-1932) he was with the Boston investment banking firm of Lee,
Higginson, and Company, most of the period as its chief officer, as well as with its London branch. As
executive secretary of the American section of the Allied Maritime Transport Council, stationed in
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Chapter 65—American Confusions, 1945-1950
London in 1918, he lived in Toynbee Hall, the world's first settlement house, which had been founded
by Alfred Milner and his friends in 1884.
This brought him in contact with the Round Table Group in England, a contact which was strengthened
in 1919 when he was secretary to the Reparations Commission at the Paris Peace Conference.
Accordingly, on his return to the United States he was one of the early figures in the establishment of
the Council on Foreign Relations, which served as the New York branch of Lionel Curtis's Institute of
International Affairs.
Green Sells Fraudulent Securities of Ivor Kreuger
As an investment banker, Greene is chiefly remembered for his sales of millions of dollars of the
fraudulent securities of the Swedish match king, Ivar Kreuger. That Greene offered these to the
American investing public in good faith is evident from the fact that he put a substantial part of his own
fortune in the same investments. As a consequence, Kreuger's suicide in Paris in April 1932 left Greene
with little money and no job. He wrote to Lionel Curtis, asking for help, and was given, for two years,
a professorship of international relations at Aberystwyth, Wales. The Round Table Group controlled
that professorship from its founding by David Davies in 1919, in spite of the fact that Davies, who was
made a peer in 1932, had broken with the Round Table because of its subversion of the League of
Nations and European collective security.
Greene Returns to America
On his return to America in 1934, Greene also returned to his secretaryship of the Harvard Corporation
and became, for the remainder of his life, practically a symbol of Yankee Boston, as trustee and officer
of the Boston Symphony Orchestra, the Gardner Museum in Fenway Court, the New England
Conservatory of Music, the American Academy in Rome, the Brookings Institution, the Rockefeller
Foundation, and the General Education Board (only until 1939). He was also director of the Harvard
Tercentenary Celebration in 1934-1937.
Greene Was Wall Street's Chief Conduct of Funds for the IPR
Greene is of much greater significance in indicating the real influences within the Institute of Pacific
Relations than any Communists or fellow travelers. He wrote the constitution for the IPR in 1926, was
for years the chief conduit for Wall Street funds and influence into the organization, was treasurer of
the American Council for three years, and chairman for three more, as well as chairman of the
International Council for four years.
There Is a Very Real Power Structure in Existence
Jerome Greene is a symbol of much more than the Wall Street influence in the IPR. He is also a symbol
of the relationship between the financial circles of London and those of the eastern United States which
reflects one of the most powerful influences in twentieth-century American and world history. The two
ends of this English-speaking axis have sometimes been called, perhaps facetiously, the English and
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American Establishments. There is, however, a considerable degree of truth behind the joke, a truth
which reflects a very real power structure. It is this power structure which the ... Right in the United
States has been attacking for years in the belief that they are attacking the Communists. This is
particularly true when these attacks are directed, as they so frequently are at "Harvard Socialism," or at
"Left-wing newspapers" like The New York Times and the Washington Post, or at foundations and their
dependent establishments, such as the Institute of International Education.
Misdirected Attacks by the Right
These misdirected attacks by the ... Right did much to confuse the American people in the period 19481955, and left consequences which were still significant a decade later. By the end of 1953, most of
these attacks had run their course. The American people, thoroughly bewildered at widespread charges
of twenty years of treason and subversion, had rejected the Democrats and put into the White House the
Republican Party's traditional favorite ... Dwight D. Eisenhower. At the time, two events, one public
and one secret, were still in process. The public one was the Korean War of 1950-1953; the secret one
was the race for the thermonuclear bomb.