Here are the reference notes from various sourcesÝdocumenting some ofÝÝBernard Baruch's hidden role in major events of the 20th Century, as discussed on theÝJeff RenseÝprogram with guest Dick Eastman,ÝFebruary 21, 2007. ÝÝNone of these sources areÝavailable on the internet as far as I know.Ý The quotations are organized roughly by the dates of the events described. Together theyÝpiece togetherÝa larger story that none of the quoted biographers, historians, diarists or social scientists quoted here comprehended in fullÝa story theyÝcertainly did not intend to convey.



1907 - 1911

Larry Abraham, Call It Conspiracy (Seattle: Double A Publications, 1985)

[Note: I choose quotations from this source to summarize these early events because it condenses the material so well. The same facts can be found in William Greiderís Secrets of the Temple (New York: Simon and Schuster, 1987) and G. Edward Griffin, The Creature from Jekyll Island; A Second Look at the Federal Reserve 3rd ed. (Westlake Village: American Media, 1998)


By the turn of the century J.P. Morgan was already an old hand at creating artificial panics. Such affairs were well coordinated. Senator Robert Owen, a co-author of the Federal Reserve Act (who later deeply regretted his role), testified before a Congressional Committee that the bank he owned received from the National Bankerís Association what came to be known as the ìPanic Circular of 1893.î It stated: ìYou will at once retire one -third of your circulation and call in one-half of your loans ....î [ House Banking and Currency Committee Hearings on H.R. 7230, 75th Congress, March 2 and 19, 1938, p. 214)

Historian Frederick Lewis Allen tells in Life magazine of April 25, 1949, of Morganís role in spreading rumors about the insolvency of the Knickerbocker Bank and the Trust Company of America, which rumors trigered the 1907 Panic. In answer to the question: ìDid Morgan precipitate the panic?î Allen reports:Ý ìOakleigh Thorne, the president of a particular trust company, testified later before a congressional committee that his banks had been subjected to only moderate withdrawals... that he had not applied for help, and that it was the [Morgansí] ësore pointí statement alone that had caused the run on his bank. From this testimony, plus the disciplinary measures taken by the Clearing House against the Heinze, Morse and Thomas banks, plus other fragments of supposedly pertinent evidence, certain chroniclers have arrived at the ingenious conclusion that the Morgan interests took advantage of the unsettled conditions during the autumn of 1907 to precipitate the panic, guiding it shrewdly as it progressed so that it would kill off rival banks and consolidate the preeminence of the banks within the Morgan orbit.

The ìpanicî which Morgan had reated, he proceeded to end almost single-handedly. He had made his point. Frederick Allen explains:Ý ìThe lesson of the Panic of 1907 was clear, though not for some six years was it destined to be embodied in legislation: the United States gravely needed a central banking system. ...î

The man who was to play the most significant part in providing America with that central bank was Paul Warburg, who along with his brother Felix had immigrated to the United States form Germany in 1902. They left brother Max (later a major financier of the Russian Revolution) at home in Frankfurt to run the family bank (M.N. Warburg & Company).

Paul Warburg married Nina Loeb, daughter of Solomon Loeb of Kuhn, Loeb and Company, Americaís most powerful international banking firm. Brother Felix married Frieda Schiff, daughter of Jacob Schiff, the ruling power behind Kuhn, Loeb. Stephen Birmingham writes in his authoritative Our Crowd: ìIn the eighteenth century the Schiffs and Rothschilds shared a double house: in Frankfurt. Schiff reportedly bought his partnership in Kuhn, Loeb with Rothschild money.

Both Paul and Felix Warburg became partners in Kuhn, Loeb and Company.Ý In 1907, the year of the Morgan-precipitated panic, Paul Warburg began spending almost all his time writing and lecturing on the need for ìbank reform.î Kuhn, Loeb and Company was sufficiently public spirited about the matter to keep him on salary at $500,000 per year while for the next six years he donated his time to ìthe public good.î Working with Warburg in promoting this ìbanking reformî was Nelson Aldrich, known as ìMorganís floor broker in the Senate.î Aldrichís daughter Abby married John D. Rockefeller Jr. (The current Governor of New York [ at the time of this writing, Nelson Aldrich Rockefeller] is named for his maternal grandfather.)

After the Panic of 1907, Aldrich was appointed by the Senate to head the National Monetary Commission. Although he had no technical knowledge of banking, Aldrich and his entourage spent nearly two years and $300,000 of taxpayersí money being wined and dined by owners of Europeís central banks as they toured the Continent ìstudyingî central banking. When the Commission returned from its luxurious junket it held no meetings and made no report for nearly two years. But Senator Aldrich was busy ìarrangingî things. Together with Paul Warburg and other international bankers, he staged one of the most important secret meetings in the history of the United States. Rockefeller agent Frank Vanderlip admitted many years later in this memoirs: ìDespite my views about the value to society of great publicity for the affairs of corporations, there was an occasion, near the close of 1910, when I was as secretive - indeed as furtive - as any conspirator. ... I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System. [Vanderlip, Frank, ìFarm Boy to Financier,î Saturday Evening Post, February 9, 1935, p. 25]

The secrecy was well warrented. At stake was control over the entire economy. Senator Aldrich had issued confidential invitations to Henry P. Davidson of J.P. Morgan & Company; Frank A. Vanderlip, President of the Rockefeller-owned National City Bank; A. Piatt Andrew, Assistant Secretary of the Treasury; Benjamin Strong of Morganís Bankers Trust Company; and Paul Warburg. They were all to accompany him to Jekyll Island, Georgia, to write the final recommendations of the National Monetary Commission report.

At Jekyll Island, writes B.C. Forbes in his Men Who Are Making America:Ý ìAfter a general discussion it was decided to draw up certain broad principles on which all could agree. Every member of the group voted for a central bank as being the ideal cornerstone for any banking system.î

Warburg stressed that the name ìcentral bankî must be avoided at all costs. It was decided to promote the scheme as a ìregional reserveî system with four (later twelve) branches in different sections of the country. Those present knew that the New York bank would dominate the rest, which would be marble ìwhite elephantsî to deceive the public.

Out of the Jekyll Island meeting came the completion of the Monetary Commission Report and the Aldrich Bill. Warburg had proposed the bill be designated the ìFederal Reserve System,î but Aldrich insisted his own name was already associated in the publicís mind with banking reform and that it would arouse suspicion if a bill were introduced which did not bear his name. However, Aldrichís name attacked to the bill proved to be the kiss of death, since any law bearing his name was so obviously a project of the international bankers.

When the Aldrich Bill could not be pushed through Congress, a new strategy had to be devised. The Republican Party was too closely connected with Wall Street. The only hope for a central bank was to disguise it and have it put through by the Democrats as a measure to strip Wall Street of its power. The opportunity to do this came with the approach of the 1912 Presidential election. Republican President William Howard Taft, who had turned against the Aldrich Bill, seemed a sure-fire bet for re-election, until Taftís predecessor, fellow Republican Teddy Roosevelt, agreed to run on the ticket of the Progressive Party.

August Hecksher, Woodrow Wilson; A Biography (New York: Charles Scribnerís Sons, 1991)

P. 238-239 On July 20, 1911, the New York press announced the opening of Wilson headquarters at 42 Broadway. McCombs in an interview indicated that a nationwide drive would be organized, based on the support of Princeton alumni. Wilson was unhappy with the publicity and told a reporter that there was in effect ìno campaign.îÝ The office would merely take care of answering mail and disseminating information. But that summer and fall two figures entered the Wilson circle, far more serious in what they implied for his political fortunes than the establishment of any campaign headquarters.Ý The first was a tall, hatchet-faced Tennesseean who had come to New York to make his way as a businessman. William Gibbs McAdoo was no ordinary businessman, however. ...

[ The 1954 edition of the Encyclopedia Americana, vol. 18, p. 4: McAdoo, William Gibbs, American cabinet officer: b. near Mariett, Ga., 31 Oct. 1863 ... Decended from a distinguished Southern family, ... Was educated at the University of Tennessee, admitted to the bar in 1885 ... practiced law in Chattanooga till 1992, when he came to New York and opened a law office. In 1898 he formed a law partnership with Mr. William McAdoo ( relation) who in 1910-1930 was chief city magistrate, and had been assistant secretary of the Treasury under President Cleveland. The partnership was disolved in 1903. ......... In 1902 he organized the Hudson and Manhattan Railroad Companuy and raised 4 million dollars to connect New York City with New Jersey by tunneling under the Hudson River. ... McAdooís company completed the project; the first tunnel being completed on March 8, 1904, and three more being finished in the next five years ... McAdoo also began participating in activities of the Democratic Party, and supported Woodrow Wilson in the 1910 gubernatorial campaign in New Jersey. He became vice chairman of the Democratic National Committee in 1912 and following Wilsonís election to the presidency became secretary of the Treasury, March 6, 1913. ]

Heckscher, cont., p. 238-239: He [McAdoo] met Wilson at Princeton in 1909, and the two got on well from the start. Wilson counted on him for practical advice, and by the summer of 1911 he was rivaling McCombs for first place in the direction of the embryonic, undeclared campaign. McAdoo was cool while McCombs was subject to wild swings of mood; unshakable where McCombs was easily discouraged; discreet where McCombs was talkative. Above all McAdoo was ambitious for both Wilson and himself. This strangely compounded man would play a leading role in the Wilson administration, dreaming of being his successor. More astonishing, given McAdooís age (he was only seven years younger than Wilson), he became Wilsonís son-in-law.Ý The second recruit was very different from McAdoo and even more important in
the long run. In that autumn of 1911 a wealthy Texan was staying at the Gotham Hotel in
New York, a pause in the trek that took him annually from his home in Austin to the watering places of Europe. Edward Mandell House had always been interested in politics, as a behind-the-scenes participant but not as a candidate. he noted in an unpublished autobiography, ìmy ambition has been so great that it has never seemed to me worth while to try to satisfy it.î A successful businessman, he kept an office which he rarely visited, preferring to have the important men of his day in Texas - the politicians, lawyers, editors, educators - come to talk with him on the shaded verandah of his spacious home. .....

Colonel House had stood aloof from the [William Jennings] Bryan [populist Democrat] movement, awaiting the day when he could play a prominent part in nominating a Democratic candidate more to his liking. In 1910 .... he began to consider the rising star of Woodrow Wilson. A meeting of the two was arranged at his hotel in mid-November 1911. They talked for an hour. The Colonel decided Wilson was the man to serve. ìNever before have I found both the man and the opportunity,î he noted shortly afterwards, and added, with what could only be described with a condescending air, ìI think he is going to be a man we can advise with some degree of satisfaction.î


Bernard M. Baruch, The Public Years (New York: Pocket Books, 1962)Ý Original edition: (New York: Holt, Rinehart, 1960)

p. 5 This was my first convention and I enjoyed the show hugely. Like all conventions, it was an exhausting carnival of sense and nonsense, and like all conventions it had its special touch of drama. In this case the drama lay in the drive to nominate Woodrow Wilson, led by the amateurs Billy McCombs and the tall, explosive, voluble William Gibbs McAdoo. They were the fighting professionals, including the well-organized forces of Congressman Oscar Underwood of Alabama and Congressman Champ Clark of Missouri, the leading contenders for the nomination.

In spite of the maneuvering, however, it soon became clear that one man was the key figure in the convention. Thrice defeated for the Presidency, William Jennings Bryan, in a black alpaca coat, sat with his Nebraska delegation, cooling himself with a palm-leaf fan, aware of everything and waiting for his moment. The Nebraska delegation was pleged to Champ Clark, but everyone knew that the Great Commoner was against the coalition of party bosses and Wall Street financiers who supported Clark and who, according to Bryan, had been having their way in the party and expected to go on having it.

The high point of the convention drama for me, as it was for everyone in the hot and smoky hall, came when Bryan rose to denounce, as of old, the high priests of finance. Charles Hyde, New York Cityís Chamberlain and one of Gaynorís aides, had gotten me a seat behind the rostrum. From that vantage point I heard again the mighty voice pouring out the oratory that was more in the style of my fatherís day than in the manner of the new century. Bryan was absolutely uncompromising. The Democratic Party must not nominate any candidate ìof the privilege-hunting and favor-seeking class,î by whom he meant such as J.B. Morgan, August Belmont, and Thomas Fortune Ryan. I could not see Ryan where he sat in the Virginai delegation, and I wondered how he was taking it. But then I saw him stand up, stretch his long, thin neck, and raise his head in a proud, defiant gesture. Here was a man who had been my good friend and business associate in Wall Street; but now in this political world, so different from the business world I knew well, I heard him being characterized as someone with whom no decent person would be allied.

There is no doubt how the delegates took it. They hooted, howled, moaned, threatened to lynch Bryan, fought in the aisles, and waved fists in his face. Through it all Bryan thundred on, unperturbed, until at last he came back to the platform, retrieved his palm-leaf fan, mopped his brow, and by chance sat down beside me. ìThere, thatíll fix ëem,î I overheard him say.

It did indeed, ìfix ëem.î Bryanís forces refused to give their vote to Clark. As the ballotting went on, Clarkís strength steadily melted away and Wilsonís grew......Ý At last, on the forty-sixth ballot, Wilson went over the top. The amateurs had triumphed; Wilson was the nominee. Utterly weary and impatient to be off, the delegates perfuctiorily nominated Thomas Marshall of Indiana for the Vice-President as a reward to Tom Taggart, the first of the state bosses to switch from Clark to Wilson. Then the convention adjourned.

.....For the first time I had gotten a good close look at a unique political institution - the nominating convention. .... I have attended many since then, and for me the truly amazing thing about them is that despite the circus side show and carnival aspects, despite the second-rate men who at times are selected, so many first-rate, even great men are chose.


Larry Abraham, Call It Conspiracy (Seattle: Double A Publications, 1985)
p. 54-55


The Democratic candidate, Woodrow Wilson, was equally the property of Morgan. Dr. Gabriel Kolko in his The Triumph of Conservatism, reports: ìIn late 1907 he [Wilson] supported the Aldrich Bill on banking, and was full of praise for Morganís role in American society.î According to Lundbert: For nearly twenty years before his nomination Woodrow Wilson had moved in the shadow of Wall Street.î

Woodrow Wilson and Teddy Roosevelt proceeded to whistle-stop the country trying to out-do each other in florid (and hypocritical) denunciations of the Wall Street ìmoney trustî - the same group of Insiders which was financing the campaigns of both. Dr. Kolko goes on to tell us that ,at the begining of 1912, banking reform ìseemed a dead issue. ... The banking reform movement had neatly isolated itslef.î Wilson resurrected the issue and promised the country a money system free from domination by the international bankers of Wall Street. Moreover, the Democrat platform expressly stated:Ý ìWe are opposed to the Aldrich plan for a central bank.î But the ìBig Boysî knew who they had bought. Among the international financiers who contributed heavily to the Wilson campaign, in addition to those already named, were Jacob Schiff, Bernard Baruch, Henry Morgenthau, Thomas Fortune Ryan, and New York Times pulbisher Adolph Ochs.

The Insiderís sheepdog who controlled Wilson and guided the [central bank] program through Congress was the mysteious ìColonelî Edward Mandel House, the Britisheducated son of a representative of Englandís financial interests in the American South.Ý The title was honorary; House never served in the military. He was strictly a behind-thescenes wire-puller and is regarded by many historians as the real President of the United States during the Wilson years. House authored a book, Philip Drew: Administrator, in which he wrote of establishing ìSocialism as dreamed by Karl Marx.î As steps toward his goal, House, both in his book and in real life, called for passage of an income tax and a central bank providing ìa flexible currency.î ....

In his The Intimate Papers of Colonol House, Professor Charles Seymour refers to the ìColonelî as the ìunseen guardian angelî of the Federal Reserve Act. Seymourís work contains numerous documents and records showing constant contact between House and Paul Warburg while the Federal Reserve Act was being prepared and steered through Congress. Biographer George Viereck [ Viereck, George S., The Strangest Friendship in History (New York: Liveright, 1932)]


Alexander L George & Juliette L. George, Woodrow Wilson and Colonel House: A Personal Study, 2nd ed. (New York: Dover Publications, Inc., 1964)

p. 75 Edward Mandell House was born in Houston, Texas, on July 26, 1858. He was the seventh son of one of the wealthiest men in Texas.

Thomas Willima Houseís fortune derived from vast sugar and cotton plantations and banking. Too, during the Civil War, he owned ships which, running the Union blockade both ways, plied between Galveston and nearby West Indian and Central American ports. The cargo from Galveston was usually cotton. The cargo on the return voyage was munitions, clothing and medicine, which Thomas House sold to the Confederate army. Blockade-running was a risky enterprise, but a highly profitable one.

P. 85 [In his political life, before meeting Wilson, Colonel House] assiduously abvoided the official recognition which could have been his at any time during his [political] service in Texas.

With each successful campaign, his stature both in Texas and in the national Democratic Party grew, and so did his desire to move on to the larger stage of national affairs. The difficulty was that during these years and for a decade afterwards, as well (with the interruption in 1904), the Democratic Party in the United States was dominated by William Jennings Bryan.

Bryanís ideas about currency seemed to House unsound. He did not think that Bryan could be elected President, that his election would be a desirable think for the country, or - and this was a crucial consideration - that Bryan would be amenable to his advice. Writing of Bryan, House declared: ìI do not believe that any one ever succeeded in changing his mind upon any subject that he had dtermined upon ... I believe he feels that his ideas are God-given and ar not susceptible to the mutability of those of the ordinary human being.î

By 1896, House was eager to participate in a national election, and the national leaders of the Democratic Party were eager to have him do so. However, he remained aloof from the campaign because Bryan was the Democratic presidential nominee. Bryan lost the election to McKinley.

In 1900, Bryan was nominated once again. By this time, House and the ìPeerless Leaderî were on cordial personal terms, having been next-door neighbors in Austin during the winter of 1898-99. Close personal association with Bryan only confirmed Houseís assessment of the man and his potentialities. He found him ìas wildly impracticable as ever.î Once more he declined invitations to participate in the presidential campaign. Bryan lost again to McKinley.

p. 93 At four oíclock on the afternoon of Novermber 24, 1911, Governor Wilson called on Colonel House at the Hotel Gotham in New York City.

The two men liked each other immediately. ìWe talked and talked. We knew each other for congenial souls at the very beginning,î House later recalled. The conversation was wide-ranging and ìwe agreed about everything. That was a wonderful talk. The hour flew away ... Each of us started to ask the other when he would be free for another meeting, and laughing over our mutual enthusiasm, we arranged an evening several days later when Governor Wilson should and have dinner with me.îÝ The second meeting according to House was even more delightful. There was time for a more detailed exchange of views. ìIt was remarkable. We found ourselves in agreement upon practically every one of the issues of the day. I never met a man whose thought ran so identically with mine ... I cannot tell you how pleased I was with him. He seemed too good to be true.î

The Governor called on House several times that winter, and the initial rapport between them was strengthened. House later wrote:Ý ìWe found ourselves in such complete sympathy, in so many ways, that we soon learned to know what each was thinking without either having expressed himself.Ý ìA few weeks after we met and after we had exchanged confidences with men usually do not exchange except after years of friendship, I asked him if he realized that we had only known one another for so short a time. He replied, ìMy dear friend, we have known one another always. And I think this is true.î

The day after his first meeting with Wilson , House wrote his brother-in-law, Sidney Mezes:

ìWe had a perfectly bully time. ... He is not the biggest man I have ever met, but he is one of the pleasantest and I would rather play with him than any prospective candidate I have seen ...Ý It is just such a chance as I have always wanted, for never before have I found both the man and the opportunity.



This is the year the Federal ReserveÝcentral banking system, [disguised as a populist measure againstÝprivate banking power]Ýand the Income Tax were enacted by Congress and signed by Wilson.


August Hecksher, Woodrow Wilson; A Biography (New York: Charles Scribnerís Sons, 1991)

p. 336-339 For Woodrow Wilson, sitting at the bedside of his daying wife, the war came not entirely as a bolt from the blue. From his London post, Ambassador Walter Hines Page had perceptively analyzed the European scene. The Anglo-German rivalry made war seem inevitable, he wrote the President, except in those moments when he ìshared the feelings of most men that perhaps the terrible modern engines of destruction would not, at the last moment, cause every nation to desist.î Colonel House had been abroad that spring of 1914 on his first fact-finding mission for the President. .. There was bound to be and ìawful cataclysm,î he wrote: ìwhenever England consents, France and Russia will close in on Germany.î ...

The warís outbreak brought many problems that Wilson, under the burden of bereavement, could leave to the initiative of his aides. The Secretary of State [Bryan] dealt with the situation of American citizens stranded in Europe; the Secretary of the Treasury, with the mood of panic in the financial markets. But on the great issue, defining and establishing of Americaís political and moral position, he acted alone. That strict neutrality was essential he never doubted.
So now in the concept of neutrality, a course essentially negative and expedient, he perceived ideal implications for his own country and for a world at war.
To the President and his colleagues it became quickly apparent that neutrality was not merely a posture or a state of mind, but a policy to be defined, a series of measures to be worked out. Was it, for example, within the law and spirit of neutrality to permit private bankers to make loans to belligerent powers? Bryan, convinced that it was not, argued his case so forcibly that for a brief while Wilson went along with him. Under pressure from McAdoo and Houston he then reversed himself. To sell submarines to Britain was plainly unneutral; but did that apply to submarine parts, or to submarines manufactured in sections? After consideration, the Presidentís decision was that it did not.



Hansen W. Baldwin, World War I; An Outline History (New York: Harper & Row, 1962)

p. 57 Winston Churchill, First Lord of the Admiralty, had asked on Christmas Eve, 1914: ìAre there not other alternatives than sending our armies to chew barbed wire in Flanders?î Lord Fisher, the firery First Sea Lord, who had been recalled at seventy-four to replace Prince Louis of Battenberg, also favored ìeccentric strategy,î though his eyes were chiefly on the Baltic.

The concept of forcing the Dardanelles grew in many minds, but Churchill was its most persistent and prominent advocate. The promised rewards were immense: the outflanking of the Central Powersí interior postion; the establishment of a secure supply line via the Black Sea to Russia; virtual elimination of Turkey from the war; the establihsment of a Balkin front; help to Serbia; perhaps collapse of Austria-Hungary.Ý ìThe possession of the Dardanelles would have been the richest prise in the world for the Allies. . . Admiral von Tirpitz (German naval minister) stated in 1915, that should the Dardanelles fall, then the World War has been decided against us.î

Such immense possibilities deserved careful planning and tremendous coordinated effort.
A combined amphibious operation was discussed - and though the concept was never wholly abandoned - it was shelved temporarily to permit the navy to try to force a passage.

P. 60 On March 18, a grand assault was made and almost - but not quite - the thing was done. Before 2 P.M. the Turkish fire slackened and nearly died; the gunners were demoralized, some of the guns had been wrecked, communications destroyed, fire control impaired, ammunition nearly expended, less than thirty armor-piercing shells remained.Ý But with startling reversal fate deserted the English; in quick succession the old French battleship Bouvet was sunk by a mine; Inflexible struck another mine, and Irresistible still another. Later, Ocean was fatally damaged by mine and shell fire. Irristible and Ocean were abandoned in sinking condition in the face of the enemuy, as the British withdrew. March 18, from grand beginning, drew on to puling end, and it was now the armyís turn. A British expeditionary force, hastily assembled, numbered initially about 78,000 men; its backbone, the Anzac (Austrailian-New Zealand) Corps. They were opposed by the newly constituted Turkish Fifth Army (astride the straits) of about 84,000 men, under von Sanders. General Sir Ian Hamilton, an elusive ìBritish poet-general,î commanded the Allied expeditionary force.

P. 61-62 It was to drag on for months, but the first few days determined the campaignís end. The beachheads, commanded by dominating enemy heights, were fire-swept; the outflanking operation intended to bypass the stalemate of the Western Front bogged down in trench warfare. Both sides attacked again and again, with minor gains but major losses. As the hot Mediterranean summer came on, the invaders began to go down with sickness: malaria and dysentery more than decimated the ranks. A Turkish destroyer torpedoed and sank the British battleship Goliath on the night of May 12-13, and a German U-boat torpedoed the Triumph and sank the Majestic. The Daredanelles were becoming an open, seeping wound.

But the British had the bull by the tail; they reinforced defeat and sent three more divisions to Hamilton. The Turks, too, built up; the Turkish Fifth Army numbered thirteen divisions by August when the British Army tried again. The August attacks, with a new landing at Suvla Bay, took place from August 6-10, but the objective - the dominating massif of Sari Bair, which the Anzacs had tried to reach in April - was still denied to the Allies. The rest was aftermath and predicament: how to face defeat and let go of the bull.

In September, one French and two British divisions were shifted to Salonika; in October Hamilton was recalled and relieved by General Charles Monro. But it was not until November 23, with casualties from enemy fire and inexorable nature steadily mounting, that evacuation was decided upon after Lord Kitchener had visited Gallipoli.Ý The evacuation began, in phases, in December, and despite tremendous anticipated losses it was successfully completed by January 8-9, 1916. The evacuation, ironically, was more brilliantly conducted by the British than any other phase of the campaign.Ý But no matter how the cake was sliced, it was a great defeat, ìthe worst British defeat between Saratoga and Singapore.î Some 489,000 Allied soldiers were engaged; 252,000 were casualties. Of half a million Turks, 251,000 were killed, wounded or missing, died of disease, or were evacuated sick. Gallipoli was a maker and breaker of men and reputations: Kitchenerís impeccable fame was tarnished, Lord Fisher resigned in May, Churchill was out soon afterward, Hamilton was done soldiering forever, except for memoirs and memories. But Mustafa Kamalís star was on the rise; he was hailed as the ìSavior of Gallipoli.î .....

P. 72. Nineteen-fifteen was a year of flowing blood and small comfort for the Allies. In Britain, the star of Lloyd George was rising; Herbert Asquith formed a coalition cabinet; Churchill went off to fight in the trenches. Russia suffered her greatest casualties of the war - perhaps two million killed and wounded; another 1,300,000 in German prison pens. Serbia was overrun; the Salonika expedition locked up in what Berlin scornfully called ìtheir largest internment camp.î

The Central Powers had established a secure fortress, a central position with continuous communications and lines of supply from one partner to another. Gallipoli had been a disaster. The Western Front, after more than two million casualties, was still in stalemate . Townshend was beseiged in the blowzy Arab town named Kut that few Englishmen had ever heard of. And the submarine was ravaging the shippoing lanes. It had been a year of missed opportunities and increasing hatred; slowly the comprehension of the meaning of Total War was dawning on the world.



John S. D. Eisenhower, Yanks; The Epic Story of the American Army in World
War I (New York: The Free Press, 2001) p. 299

Planning for mobilization of American industry began gradually starting early in 1916, after the sinking of the Lusitania. At that time the Naval Consulting Board was set up for the Navy and the Kernan Board for the Army. These boards made extensive survey of American industry; the Naval Consulting Board alone surveyed eighteen thousand industrial plants. American industrial leaders, while cooperative, were determined that the needs of war should not be allowed to shut out civilian consumption. The answer therefore, was a partnership between government and industry.

Still a sense of urgency was lacking. The Army Appropriation Act of 1916, which set up the Council of National Defense, did so in the form of a rider to another act, not a main provision. Nevertheless the council did come into existence. It consisted of six cabinet officers who were directed to advise with the Commission of Industrialists. The needs of industry were respected, of course, but the nationís needs came first; even the industrialists appointed to the committee were named by the President.


August Hecksher, Woodrow Wilson; A Biography (New York: Charles Scribnerís Sons, 1991)

p. 397 A more mundane matter of business [than Senate Judiciary Committee backing and full Senate approval of Brandeis as Supreme Court justice] had to be settled before [the 1916 Presidential election] campaign got under way, the question of party chairmanship. McCombs [the pre-McAdoo, pre-House Wilsonian progressive truebeliever] had remained in the post, ineffectual, ill in body and mind; and it was the nightmare of Wilsonís supporters that he should resist efforts to replace him. Wilson was convinced of his lack of fitness, but still hesitated to break with a man who had been one of his first political sponsors. A young Wilson supporter and admirer, a debonair financier who had recently come to Washington and was beginning to make his mark as a Democratic loyalist and a man of princely entertainments, Bernard M. Baruch, was assigned the task of managing McCombís withdrawal. Baruch passed his first test well. In late April McCombs assured the President that he would quietly give way to a successor. He had been got rid of, House remarked jubilantly, ìfor all time.î

Hansen W. Baldwin, World War I; An Outline History (New York: Harper & Row, 1962)

p. 94-96 The year 1916 started with severe Allied reverses in the outer theaters of the war. The Gallipoli evacuation was completed in January; on April 29, Townshend, besieged since early December, 1915 in Kut al Imara in Mesopotamia by Turkish and Arab forces, surrendered. Some 10,000 men - mostly of the Indian Army, but including more than 2,000 Englishmen - were taken prisoner; 1,700 others had died, 2,500 had been wounded during the five-month siege. It had been an epic of defeat; the men, decimated by disease, had been on short rations for weeks, but as always in defeats, there had been mismanagement, poor leadership, little strategic vision. And the epic was tarnished by a last-minute attempt by the British government to raise the siege by attempts to relieve Kut, which started in January under General Fenton Aylmer and continued through April under General George Gorringe, cost the British almost 22,000 casualties - double the strength of the Kut garrison.

For most of the rest of 1916, Mesopotamia was quiescent, as the British built up their strength and their supplies. In August a general named Sir Stanley Maude assumed comand, and at last man and opportunity had met. In December just before the rains came, he started once again - with a superiority over the Turks of more than two to one - a drive to the north toward the magic city of Baghdad.
Meanwhile inthe Suez Canal-Palestine area, raid and counterraid, buildup and construction featured most of 1916. General Archibald Murry assumed command in Egypt in March, 1916; the maximum force there of fourteen divisions was rapidly reduced, however, to four. The British, toiling with intensity, had built another fortified area near the canal, a strategic answer and a needlessly expensive one to the Turkish attack on the canal in 1915. Then, painstakingly, the British forces started to clear the Sinai peninsula of the enemy, a task which had to be preceded and accompanied by immense logistic efforts, including the laying of water pipelines, and the construction of a railway and a road.

But the Germans and Turks were not dismayed. In the caldron of the desert summer, Kress von Kressenstein led 15,000 Turks and Germans across Sinai to Romani near the seacoast. Murray fought a skillful battle (August 3-4) and repulsed the enemy handily, but the Turks made good their retreat.

An Arab revolt against the Turks began in June in Saudi Arabia; on June 9 the Arabs captured Mecca and in September, Taif.

By years end, the British had crossed the shifting sands of Sinai, complete with their pipeline, railroad, and the road , and had taken El Arish, evacuated by the Turks, and on December 23, Magdhaba, with most of its 1,300-man garrison. The British defense of the Suez Canal now stood on its ìnaturalî frontiers - at the eastern boearders of the Sinai peninsula.





. "In March, 1915, the J.P. Morgan interests, the steel, shipbuilding, and powder interest, and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press....They found it was only necessary to purchase the control of 25 of the greatest papers. "An agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies, and other things of national and international nature considered vital to the interests of the purchasers."
- U.S. Congressman Oscar Callaway, 1917


H. W. Brands, Woodrow Wilson (New York: Henry Holt and Company, 2003) p. 52-71

...When the fighting began, Wilson declared American neutrality.

Yet, Wilson couldn't leave things at that. He felt obliged to elaborate, to explain that the neutrality he envisioned was not the narrow neutrality of international law but a higher neutrality of the spirit. "The people of the United States are drawn from many nations, and chiefly from the nations now at war," he told the country. "It is natural and inevitable that there should be the utmost variety of sympathy and desire among them with regard to the issues and circumstances of the conflict. Some will wish one nation, others another, to succeed in the momentous struggle. It will be easy to excite passion and difficult to allay it." ... "I venture, therefore, my fellow countrymen, to speak a solemn word of warning to you aginst that deepest, most subtle, most essential breach of neutrality, which may spring out of partisanship, out of apssionately taking sides. The United States must be neutral in fact as well as in name during these days that are to try men's souls. We must be impartial in thought as well as in action, must put a curb upon our sentiments as well as upon every transaction that might be construed as a preference of one party to the struggle before another."Ý
... the belligerents outlasted the war's first winter, and neither side evinced any imminent need to quit. ... as the casualties mounted, the killed and maimed became arguments not for peace but for fighting on to victory, however distant that might be.
Another reason for the war's surprising duration directly involved the United States. The shjort-war scenario had been based on the belief that when the belligerents ran out of money they would have to put down their emptly guns. In the past this principle had generally held true. But the recent emergence of the United States as an economic power allowed the competing war ministries to hope for American help, in the form of American money. If dollars could be coaxed across the Atlantic, the belligerents might fight on past the time their own resources ran dry.
The French were the first to pursue this strategy. Indeed, the war wasn't a month old before Paris approached J.P. Morgan and Company about selling French bonds in the United States. The Morgan men were tickled at the prospect of the business but decided to check with the State Department to determine whether bonds for belligerents comported with the administration's definition of American national interest.
William Jennings Bryan thought not -- emphatically not. Besides being a populist, and on that ground disinclined to do any favors for the Morgans of the world, the secretary of state was a pacifist. He believed that war was no inevitable aspect of international affairs but the result of specific sins on the part of powerful men. Among the sinners were those who aimed to batten on the misfortunes of war: the arms merchants and their underwriters. International law allowed trade between neutrals and belligerents but barred certain goods as contraband. Bryan now argued to Wilson that the categoy of contraband ought to include money. "Money," Bryan argued, "is the worst of all contrabands because it commands everything else." And leaving aside the question of morality -- which is to say, complicity in butchery -- allowing the loans would endanger American neutrality. The bondholders and their agents would employ their influence to ensure the survival of their debtors. "This influence would make it all the more difficult for us to maintain neutrality," Bryan said, "as our action on various questions that would arise would affect one side or the other, and powerful financial intersts would be thrown into the balance." By contrast, for the United States to deny the loans would have a decidedly pacifying effect. "We are the one great nation which is not involved, and our refusal to loan to any belligerent would naturally tend to hasten a conclusion of the war."
Wilson intitially let himself be persuaded by Bryan's argument and approved a ban on loans to the belligerents. But the belligerents -- the French in particular -- persisted. They applied for credits to be used strictly to purchase American goods. They contended that if trade with the belligerents was legal and proper, was the Wilson administration agreed it was, then credits to facilitate that trade were legal and proper too. Moreover, as credits were a customary means of doing business, to withold them on account of the war might actually be considered unneutral.
Wilson chose to accept this argument even while sticking with the larger ban on regular loans. Yet the distinction proved impossible to maintain. Dollars were dollars whether spent on American goods or something else. In addition, an ineluctable dynamic of trade soon set in. The American economy was in recession when the war began, but the war orders from Europe quickly reeled in the slack and set American industry and agriculture humming. The credits kept the humming at an encouraging pitch -- and much as Bryan predicted, created important constituencies for whatever measures might be necessary to sustain the good times.
By the summer of 1915 it was apparent that these measures included outright loans. Britain and France were financially wracked; only a massive infusion of American money could keep them going. And their collapse, should that occur, would be America's economic disaster. "If the European countries cannot find means to pay for the excess of goods sold to them over those purchased from them, they will have to stop buying and our present export trade will shrink proportionately," wrote Robert Lansing of the State Department, who disagreed with Bryan on the loan question. "THe result would be restriction of outputs, industrial depression, idle capital and idle labor, numerous failures, financial demoralization, and general unrest and suffering among the laboring classes."
It was a sobering prospect, especially for a president who hoped to be reelected in little over a year. Judging that his responsibility to America included ministering to the nation's economic health, Wilson quietly withdrew his objections to belligerent loans. In the interests of continued American neutrality, he made clear that both sides might borrow money in the United States.
Both sides might, but both sides didn't, at least not anywhere near equally. From the start, American loans to the Allied Powers greatly outstripped those to the Central Powers; eventually the ratio reached ten to one. In part the difference owed to the closer ties between American banks and their British and French counterparts, as compared to German and Austrian banks; but to a much larger degree it reflected the pattern of wartime trade.
As soon as the war began, each side apptempted to blockade the other. The Allies had better luck, as a result of Britain's formidable fleet and the general difficulty of maritime access to Germany and Austria. In consequence, while American trade with Britain and France grew rapidly under the spur of the war, American trade with Germany withered.
This wasn't how things were supposed to happen, at least not from the American point of view. As a neutral, the United States should have been free to trade with both sides equally. Although traditional conceptions of contraband would have allowed blockaders to stop shipments of guns and ammunition, other articles of trade should have passed unimpeded.
But the British, who as invertate blockaders, had rarely respected neutral trading rights, showed no desire to start now. They were determined to strangle Germany, and if that required violating the rights of Americans and other neutrals, they were prepared to do so. They defined contraband so broadly as to include almost anything that might support troops in the field, including food. They habitually halted American ships, boarded and searched them, and forced them into British or French ports, where their cargoes were impounded. It was all done in a very civilized manner; no one got hurt, and the owners received their ships back and were typically paid for the confiscated cargoes.
On May 7, 1915, a German submarine sank the British liner Lusitania in the Irish Sea. Nearly 1,200 persons perished, including 128 Americans. The shock of the mass killing was scarcely mitigated by reports (which turned out to be true) that the Lusitania was covertly carrying munitions, nor by a recently renewed warning from Germany about passenger travel in the war zone.
While he was formulating his official reaction, he traveled to Philadelphia to address a group of newly naturalized citizens. There he tested an idea he evidently had been pondering for some time. "Americans must have a consciousness different from the consciousness of every other nation in the world," he said. "The example of America must be the example, not merely of peace because it will not fight, but of peace because peace is the healing and elevating influence of the world, and strife is not. There is such a thing as a man being too proud to fight. There is such a thing as a nation being so right that it does not need to convince others by force that it is right."
For once WIlson's words betrayed him. What did it mean for a nation to be "too proud to fight" when 128 of its people lay dead on the ocean floor? Even the many Americans who still hoped to keep their country clear of the war wondered whether this president was up to the job.
Wilson himself realized he had misspoken. "I have a bad habit of thinking out loud," he confessed to a friend the day after his too-proud-to-fight speech. ...
... Dismissing the idea that the Lusitania's cargo in any way mitigated the crime of its sinking, Wilson dispatched a note to Berlin declaring, "THe principle fact is that a great steamer, primarily and chiefly a conveyance for passengers, and carrying more than a thousand souls who had no part or lot in the conduct of the war, was torpedoed and sunk without so much as a challenge or a warning, and that men, women, and children were sent to their death in circumstances unparalleled in modern warfare." ... "The Government of the United States is contending for something much greater than mere rights of property or privileges of commerce. It is contending for nothing less high and sacred than the rights of humanity." Accordingly, Wilson insisted that Germany change its submarine policy and give assurances that such attacks would not recur.
Berlin mumbled in reply, citing the complexities of submarine warfare and the extenuating circumstances of British malfeasance. Wilson rejected the response as "very unsatisfactory" and sharpened the American position. "Illegal and inhuman acts, however justifiable they may be thoguth to be against an enemy who is believed to have acted in contravention of law and humanity, are manifestly indefensible when they deprive neutrals of the acknowledged rights, particularly when they violate the right to life itself" For Germany to persist in the policies that led to the Lusitania sinking would constitute an "unpardonable offense" against American sovereignty; another such action would be construed as "deliberately unfriendly" to the United States.
This strong wording came at a price to Wilson: the loss of Bryan, who opposed the stern policy to the end. WIlson tried to mollify him. I hope that you realize how hard it goes with me to differ with you in judgment about such grave matters as we are now handling," he told Bryan. "You always have such weight of reason, as well as such high motives, behind what you urge that it is with deep misgiving that I turn from what you press upon me."
But Bryan would not be mollified. He reiterated that the president's message cast American neutrality into serious doubt; he also complained that Wilson paid less heed to him, the secretary of state, than to House, a private citizen. "Colonel House," Bryan told Wilson in what amounted to his exit interview, "has been secretary of state, not I, and I have never had your full confidence."
This was true enough, but it wouldn't help Wilson for it to become public knowledge at this delicate moment. When Bryan formally submitted his letter of resignation, Wilsion replied in rather ungracious language. "My feeling about your retirement from the Secretaryship of State goes much deeper than regret," he wrote. "I sincerely deplore it." And well he might have, for even as he moved closer to war with Germany, Bryan's defection gave the antiwar elements in the country a tested champion.
Wilson had married in 1885. His wife was the former Ellen Axson, the daughter of a Presbyterian minister of Rome, Georgia, where Wilson had relatives. For twenty-nine years after their wedding, Woodrow and Wllen Wilson's marriage proceeded fruitfully -- they had three children, all daughters -- but unremarkably. He confided his hopes and dreams to Ellen, and loved her dearly ... She supported his turn from academics to politics, and she was pleased to become his First Lady in 1913. But during the intitial year of his presidency she developed kidney disease, which was complicated by a bad fall. She declined rapidly during the summer of 1914 and died on August 6.
Wilson remained depressed for months, through the end of 1914 and into the following year. His work would distract him for a time, but then he would slip back into his despair. When finally snapped him out of it was not any insight into the meaning of life and death but a pretty face and an attractive figure. One afternoon in February 1915, as he and Dr. Graysen were riding down Connecticut Avenue, Grayson waved at a woman on the sidewalk. "Who was that beautiful lady?" the president inquired.
She was Edith Bolling Galt, an aquaintance of Grayson's and the widow of a man whose family owned Washington's poshest jewlery store. In the seven years since his death, she had aquired control of the business, which provided her a comfortable independent living and entree to the most exclusive salons of the capital city. She lived in a house near Dupont Circle, from which she ventured forthy by foot and automobile. Driving her own car, she prided herself on being the first Washington woman to indulge such daring.
Out of no disrespect for the memory of Ellen -- only six months dead -- but rather out of concern for the president's emotional health, Grayson arranged an introduction. Wilson found Edith enchanting. A Virginian like himself, she listened avidly while he read poetry to her, discussed affairs of state, and made the small talk that marks the smitten. In April she sat in the presidential box while Wilson threw out the pitch that opened the Washington Senators' home season.
Wilson had been distracted by Ellen's death, but the entry of Edith into his life sent him into a tizzy. He saw her whenever he could, and wrote her when he couldn't -- often two or three times a day. Not even the most pressing public business kept him from his reveries about Edith; if anything, it was the other way around. After his faux pas in the Lusitania crisis, when he talked of being too proud to fight, he explained to Edith that it was the result of a meeting they'd had the day before. "I do not know just what I said at Philadelphia (as I rode along the street in the dusk I found myself a little confused as to whether I was in Philadelphia or New York!) because my heart was in such whirl from that wonderful interview of yesterday and the poignant appeal and sweetness of the little note you left with me." As Bryan was preparing to leave the cabinet, Wilson seemed at least as worried about the arrival of a houseguest at Edith's whose presence would inhibit the intimacy of their moments together. And during the days when he was drafting and dispatching his Lusitania ultimatum to Germany, he put far more of himself into his letters to Edith.
Edith was flattered by the attention--and by access to the inner workings of power. She was fascinated by what Wilson told her of his political and diplomatic affairs, and her fascination caused him to tell her more. He sent copies of government correspondence to her house, for her examiniation. After some initial diffidence, she began offering advice. She didn't like [William Jennings] Bryan, and when he left the administration she was positively gleeful. "Hurrah! old Bryan is out!" she wrote Wilson. "I could shout and sing that at last the world will know just what he is."Ý
Not surprisingly, the unexpected emergence of this newcomer at Wilson's side occasioned concern among the president's associates, every one of whom faced demotion by at least a notch. ... When Wilson mentioned marriage, some of his advisers sought to postpone it till after the 1916 election, lest voters take amiss the rush to remarriage. But once Edith consented, Wilson wouldn't hear of delay. In October 1915 the White House announced the engagement; in December the small wedding was held at Edith's home. ... the end of the honeymoon marked the beginning of Wilson's campaign for a second term. ... Indeed, so interested was Edith in presidential affairs that he would have felt he was letting her down had he not run. And he was still sufficiently infatuated that he would have done nearly anything not to let her down.
Although domestic issues -- especially the New Freedom -- demanded voters' attention in 1916 campaign, from the outset it was apparent that the European war, and America's relation to it, would have much to do with whether Wilson won reelection. And despite genuine outrage that had followed the Lusitania sinking,m it was obvious that the American people wanted to stay clear of war. So did Wilson, even as some of his advisers, particularly House and the new Secretary of State Robert Lansing, were growing convinced that the United States would have to join the fighting. ...
But Wilson had reasons for temporizing. From the standpoint of diplomacy, he had yet to be convinced that was was either inevitable or necessary; from the standpoint of politics, he had no desire to compaign on a war platform until voters were thoroughly ready for war. ...
...His campaign theme was "He kept us out of war," and it sufficed to keep Wilson in the White House." ...

Robert H. Ferrell, Woodrow Wilson and World War I (New York: Harper & Row, 1985) p 102-103

Before April 1917, political leaders and military officers had contemplated industrial mobilization, but it had seemed to theoretical to take seriously. ... The Preparedness movement beginning in 1915 was mostly preparedness for the presidential election the next year. In Washington the Navy Department [Assistant Secretary of the Navy Franklin D. Roosevelt --DE] brought together a Consulting Board of scientists including Thomas A. Edison, Howard E. Coffin, vice president of the Hudson Motor Car Company, became a member of the Edison board and arranged for a public relations man, Grosvenor B. Clarkson, to distribute inventory forms to discover the country's industrial resources. Owners of 30,000 plants returned the forms. Many did not. In August 1916, Congress created the Council of National Defense, a Cabinet committee, with and Advisory Commission of prominent citizens working without pay: Coffin, Bernard Baruch; president of the Drexel Institute of Philadelphia, Hollis Godfrey; president of the Baltimore and Ohio Railroad, Daniel Willard; president of Sears, Roebuck, Julius Rosenwald; president of the American Federation of Labor, Samuel Gompers; secretary-general of the American College of Surgeons, Dr. Franklin H. Martin. The commission met in December of 1916 and appointed as its director a statistician of the American Telephone and Telegraph Company, Walter S. Gifford.




Matthew Josephson, The President Makers; The Culture of Politics and Leadership in an Age of Enlightenment 1896-1919 (New York: Harcourt, Brace and Company, 1940)

p. 534-535 Edward Houise had once observed to Wilson that he thought him too sensitive, too intelligent, and too refined to conduct a war. But Wilson disclosed an unexpected side of his nature when he held himself deaf to all appeals against official injustice during the war. The time comes, he would often say, when one must shut his mind and act.
Although he did not find it necessary to call together a coalition cabinet, embracing leaders of both major parties - holding that this would only hamper and embarrass his efforts - the President did summon the leading financiers, industrialists, administrators, and ìbestî minds to join in directing the hugely expanded action of the war government.Ý These manned the Council of National Defense and its chief subdivisions, the War Industries Board, the National Food Commission and Fuel Commission, the shippling and railroad boeards, and the War Labor Board. Centralized control and integration of our industries and economic resources, under a President who had championed liberal doctrines, was carried out to an extent never before known here, though under conditions which in most cases richly favored their private owners. The railroads passed (temporarily) into government hands, in March, 1918. In other vital industries production schedules and consumption were controlled, prices were fixed, usually at a very high level, by agreements with the ìDollar-Yearí men who directed the governmentís control boards.

The machinery of planning and control assumed a collectivist form, and after a period of preliminary confusion, worked with incredible energy under men like B. M. Baruch, Chairman of the War Industries Board, Herbert Hoover of the Food Commission, Secretary McAdoo, and Daniel Willard of the Railroad Administration, Edward Hurley, Charles M. Schwab, and James Farrell of the Shipping Board, and Dwight Morrow andÝ Thomas W. Lamont, who were detailed to held the Treasury in its huge wartime fiscal operations. Wilson supported his administration ìexpertsî as he supported the army and navy officers he had placed in command. But neither in the military field nor on the economic front at home did his leadership assume any distinctive form, either by striking errors or triumphs of personal command. A collective war machine, patterned after those built up in England as well as in germany, functioned impersonally, sometimes with strange effects. The President would be called in to determine points of policy as they arose; but his main interest lay elsewhere, one might say, beyond the war operations themselves.


John S. D. Eisenhower, Yanks; The Epic Story of the American Army in World War I (New York: The Free Press, 2001) pp.299-

The Council of National Defense wielded almost no power, however, and it was soon succeeded by other, subordinate boards, the most notable of which was the General Munitions Board, set up just before the United States declaration of war. The success of the General Munitions Board, was largely due to the efforts of its chairman, Frank A. Scott, president of a company manufacturing high-grade machine tools for both the Army and the Navy. .....

These preliminary preparations, though a great step forward, proved inadequate to prevent confusion among both the government and industry when war actually came.Ý Much of the problem lay in the old bugaboo, the independent bureaus, which conducted purchasing independently despite progress made in bringing them under the authority of all the chief of staff. No fewer than five (later 9) separate authorities were all bidding against one another. In addition to the Navy, other customers for war-related products included the Shipping Board, the Rialroad Administration, and the Red Cross, among many others.

The solution to the probelm would have to come from a cooperative effort, and to administer the sharing, President Wilson looked to a forty-seven-year-old native of South Carolina, Bernard M. Baruch, much as he looked to George Creel to mobilize public opinion. Baruch and Wilson had been friends for some time. Both were progressives, ambitious men, and Southerners. To Wilson, Baruch combined two ideal qualities: he was a Democrat who was also a Wall Street financier. Since early summer of 1916, Baruch had already been participating in an advisory capacity and by the spring of 1917 he enlisted a group of former business contacts to administer raw material purchases for the military. Soon he was appointed as Commissioner for Raw Materials in the newly formed War Industries Board.Ý The coordination of war purchasing may have evolved slowly, but it was handled with remarkable success. All boards and authorities operated with the power of the President behind them, which included the power of commandeering. They established a Priorities System, a Price-Fixing System, and a Conservation System. So effective was the effort that twelve years later, General Hugh Johnson [ future New Deal NRA leader, and attacker of Long and Coughlin -DE], the officer so closely associated with it , could rhapsodize in a memo to General Pershing:

ìWhole strata of industry were integrated for the first time in our history. Competition was adjourned. Industries learned to operate in vast units. Patents and trade secrets were pooled. Hostility was erased and cooperation was institutied. ...... Cooperation with Government - so suspiciously regarded in the pre-war era - became commonplace.î

Hugh Johnson was an advocate, but he was also an expert. He took great pride in declaring that the American war effort more nearly reached president Wilsonís ideal of an ìentire nation armedî than did that of any other belligerent nation, Germany included. In the accomplishments he described, however, there was one serious caveat. The full power of Americaís industrial mobilization was not geared to take effect until the year 1919.


Robert Lewis Taylor, Winston Churchill; An Informal Study of Greatness (Gerden City: Doubleday & Company, Inc., 1952)

p. 54 A heartening aspect of his ministry [Minister of Munitions] was that upon the first inkling of American intervention in the war, Churchill displayed that practical view of his overseas cousins for which he has always been noted. Ina ringing speech, he cried, ìBring on the American millions! And meanwhile, maintain and active defensive on the Western Front, so as to economize French and British lives and to train, increase, and perfect our armies and our methods for a decisive effort later.î When the United States entered the war, Churchill was given the job of equipping the American millions he had spoken of, and he did it so well that afterwards General Pershing presented him with theÝ Distinguished Service Medal. He was the only Englishman to wear the decoration. His assignemnt to prepare American soldiers for combat brought him into contact with Bernard Baruch, who was then chairman of the War Industries Board at Washington.Ý They developed a close friendship that has continued without interruption to the present.Ý In the last year of the war Churchill committed himself to an ìanti-liberalî action that gave him his envied start toward becoming the premier target of the left-wingers, or plotters against society. ... His first such unpopularity was gained in the strikes of 1918, which were similar to the Communist-planned stoppages that swept Asmerica in the recent war. Like President Truman in the later crisis, Churchill threatened to end the strikersí immunity from military service unless they returned to work. ....Ý When the peace came, it returned Churchill much of his lost favor. ... In the Government he soon consolidated his gains with such speed that, as the Tories blinked, he found himself in the unprecedented position of holding two offices - Secretary for War and Secretary for Air. The protests that arose over this artistic coup shook the Cabinet.Ý The old epithet of ìmedal snatcherî was changed to ìportfolio collector.î A Captain Wedgwood Benn, a Liberal M.P., arose in Parliament and complained so testily that General Seely, the Under-Secretary for Air, was suddenly convinced of Churchillís villainy and resigned. ...

...In the last days of the war he had enjoyed the distinction of crashing twice in the same day, a record still admired in aeronautics circles.


August Hecksher, Woodrow Wilson; A Biography (New York: Charles Scribnerís Sons, 1991)

As the structure of inter-Allied cooperation was being successfully established [by House], Wilson moved to reorganize the war effort at home. ... A moribund Council of National Defense became the crisis oriented War Industries Board, first headed by Frank A. Scott and then, in a dramatic maneuver, put under the direction of Bernard M. Baruch.Ý Overruling doubts, about the administrative capacities of the flamboyant and wealthy speculator, Wilson was rewarded by the serivces of a man intensely loyal and energetic, capable of swift decision and not afraid of responsibility. Baruchís War Industries Board was in overall charge of purchases by the government and the Allies; its business was to see that manufacturers focused on goods essential to the war effort, and, indirectly, to see that goods destined for civilian use were made in ways least wasteful of labor and of scarce raw materials.

McAdoo, in charge of war financing, was most visible in his management of successive war bond drives.


William Dudley, ed., World War I; Opposing Viewpoints (San Diego: Greenhaven Press, 1998)

p. 171 War Bonds Can Be Raised Throught Bonds, William Gibbs McAdoo (1863-1941)

An important question the United States faced after it entered World War I was how to raise the enormous sums of money necessay for its prosecution (the total direct cost of the war would eventually amount to $35.5 billion, a greater sum than the entire expenditures of the U.S. government in the first century of its existence). Americans were divided on how best to raise this money. The approach eventually favored by William Gibbs McAdoo, secretary of the treasury from 1913 to 1918, was to obtain the bulk of the funds through a series of goverment bond drives. McAdoo named the bonds ìLiberty Loansî and orchestrated a massive public relations campaign that included posters, speeches by motion picture stars, and other features designed to raise general public support for the war effort as well as financial backing.

McAdoo announced the first of the Liberty Loans on May 14, 1917; a $2 billion offering of bonds with an interest rate of 3 ‡ percent, exempt from federal taxes, and convertible to a higher rate if the government raised interest rates for future Liberty Loans. The following viewpoint is taken from a speech that McAdoo made one week later before bankers and business executives in Des Moines, Iowa. ... He maintains that such bond measures are the best way to finance both the war effort and the credits and loans America has extended to the Allies. [Reprinted from William Gibbs McAdoo, address entered into S. Doc. 40, 65th Cong., 1st sess., May 21, 1917.

Wars can not be fought without money. The very first step in this war, the most effective step that we could take, was to provide money for its conduct. The Congress quickly passed an act authorizing a credit of $5,000,000,000, and empowered the Secretary of the Treasury, with the approval of the President, to extend to the allied Governments making war with us against the enemies of our country, credits not exceeding $3,000,000,000. Since that law was passed on the 24th of April, less than a month ago - the financial machinery of your Government has been speeded up to top notch to give relief to the allies in Europe, in order that they might be able to make their units in the trenches, their machinery which is there on ground, tell to the utmost, and tell, if possible, so effectively that it might not be necessary to send American soldiers to the battle fields. As a result, we have already extended in credits to these Governments - Great Britain, France, Italy, Russia, and Belgium - something like $745,000,000, and we shall have to extend before this year is out, if the war lasts that long, not $3,000,000,000 of credits, but probably five billions or six billions. But it makes no difference how much credit we extend, we are extending it for a service which is essential ... youíre your own protection, if no other grave issues were involved in this struggle.

Extending Credit

This initial financing was not an easy thing to do. The Congress authorized the Secretary of the Treasury to issue, in addition to bonds, $3,000,000,000 of one-year debt certificates. Their purpose is to bridge over any chasms, so to speak, so that if the Treasury is short at any time, because of extraordinary demands, we can sell these temporary certificates, supply the need, and then sell bonds to take up these certificates. We have been selling temporary debt certificates in anticipation of the sale of these Liberty bonds. The first issue of bonds, - $2,000,000,000, - has not been determined by any arbitrary decision or judgement; it has been determined by the actual necessities of the situation. It is the least possible sum that we can afford to provide for the immediate conduct of the war. We are trying to spread the payment for the bonds over as large a period as possible, so that there shall be no interference with business.Ý This money is not going to be taken out of the country. All of this financing is largely a matter of shifting credits; it is not going to involve any loss of gold; it is not going to involve any loss of values. These moneys are going to be put back into circulation, put back promptly into the channels of business and circulated and recirculated to take care of the abnormal prosperity of the country, a prosperity that will be greater in the present year than ever before in our history.

As we sell these bond, we take back from the foreign governments, under the terms of the act, their obligations, having practically the same maturity as ours, bearing the same rate of interest as ours, so that as their obligations mature the proceeds will be used to pay off the obligations issued by this Government to provide them with credit. So you can see, fellow citizens, that in extending credit to our allies, we are not giving anything to them. So far as that is concerned, for the purposes of this war, I would be willing to give them anything to gain success, but they donít ask that. They are glad and greatful that the American government is willing to give them the benefit of its matchless credit, a credit greater and stronger than any naiton on the face of the globe. We give them credit at the same price our government has to pay you, the people, for the use of its money, because we do not want to make any profit on our allies. We do not want to profit by the blood that they must shed upon the battle field in the same cause in which we are engaged.

What can you do to make this loan a success? You have got to work, gentlemen, to make this loan a success. America never before was offered a $2,000,000,000 issue of bonds. This Government never has had to borrow so much money at one time. The money is in the country and can be had if you men will simply say that the Government can have it. The annual increase of our wealth is estimated to be fifty billions of dollars. You are asked not to give anything to your Government, but merely to invest 4 percent of the annual increase of wealth in this country, to take back from your Government the strongest security on the face of Godís earth, and to receive in return for it 3 ‡ percent per annum, exempted from all taxation, with the further provision that if the Government issues any other bonds during the period of this war at a higher rate of interest than 3 ‡ percent every man who has bought a 3 ‡ percent bond may turn it in and get a new bond at the higher rate of interest. Could anything be fairer than that? Could anything be more secure than an obligation of your Government, an obligation backed not alone by the honor of the American people - which is of itself sufficient - but backed also by the resources of the richest nation in the world, a nation whose aggregate wealth to-day is two hundred and fifty billions of dollars; so that you take no risk, my friends, in buying these bonds.Ý This bond offering is not going to be successful of its own momentum. Every man and woman in this country must realize that the first duty they can perform for their country is to take some of these bonds. Those who are not able to take some of these bonds ought to begin saving monthly to take some of them; and if they can not save monthly, or at all, they ought to make some man or woman who is able to take some of these bonds subscribe. If you do that, my friends, this first issue of $2,000,000,000 will be largely oversubscribed. It depends, however, upon you. Your Government can not do what you can do for your Government. A government is not worth a continental unless it has the support of the people of the country. And one thing that makes me glad - I ought not to be glad that there is a war - but I can not help feeling a certain amount of reverent elation that God has called us to this great duty, not alone to vindicate the ideals that inspire us but also because it has, for the time being, eliminated detestable partisanship from our national life and made us one solid people. As one people, my friends, with such an ideal, the Republic is invincible and irrestible, and there can be no doubt whatever of the outcome. I want you to give a thunderous reply on the 15th of June - Liberty bond subscription day - to the enemies of your country.


Martin Gilbert, Churchill: A Life (New York: Henry Holt and Company, 1991) p.379


Haigís new offensive opened on September 20. Thirteen days later, on October 3, he sent Churchill an urgent appeal for 6-inch howitzer ammunition. Any reduction of supply, he warned would hamper his present advance. Churchill instructed the British Mission in Washington to put the request to the the American War Industries Board. The Commissioner on the Board in charge of raw materials, Bernard Baruch, agreed to provide the shells required. Henceforth Baruch and Churchill were to be in direct telegraphic contact, sometimes daily. They had never met, but through their telegraphic exchanges emerged a close working partnership.


Hansen W. Baldwin, World War I; An Outline History (New York: Harper & Row, 1962)

The dying Turkish empire had one brief respite and tow great defeats in 1917.Ý On the Caucasus front, the Russian pressure ended with the Russian Revolution; from then until warís end, a few feckless Russian soldiers in isolated detachments played inconsequential roles.

But in both Palestine and Mesopotamia the British reinforced success. David Lloyd George, like Winston Churchill, believed in eccentric strategy - attack on an enemy periphery - and in both Palestine and Mesopotamia political objectives superceded military ones.

The Palestine campaign stemmed from the militarily sound concept of defending the Suez Canal by an advance across Sinai to the strategic flanking position near El Arish.Ý This was attained in late 1916 and in the first days of January, 1917. British air reconnaissance, which aided the ground armies greatly in the Palestine theater, placed the retreating Turks in early March in the Gaza-Beersheeba area. Sir Archibald Murray, the British commander in Egypt, was told to undertake a limited holding offensive to keep the Turks busy. He moved to the attack on March 26 in the First Battle of Gaza, with five reinforced divisions opposing about three Turkish divisions. It was a near victory, but bad communications and unwarranted assumptions led to failure, British withdrawal, and 4,000 casualties as against about 2,500 Turkish casualties.

Murray tried again on April 17, but this time against a strengthened Turkish position. Another Turkish division had joined, and Kress von Kressenstein, the wily German, had constructed mutually supporting strong points. The result of a bloody frontal assault was a severe British repulse, 6,400 British casualties, 2,000 Turks. Murray was recalled, and there came to Palestine a redoubtable general, nick-named ìThe Bull,î who had commanded the Third Army at Arras. General Edmund Allenby knew what he was doing, what he wanted to do, and how. He injected new life into the British forces.

Allenby asked and got reinforcements, and spent the summer in careful preparations.Ý He was given two divisions from Salonika, formed another from bits and pieces in the theater, and by fall seven infantry and three cavalry divisions were ready. The Turks, too were reinforced, but not strongly. Turkish divisions freed by the Russian collapse had been formed into the so-called Yilderim (ìLightningî) Force under the German General von Falkenhayn, and some of these had reached the Gaza front. But the British had at least a two-to-one superiority.

Allenby attacked the Beersheba-Gaza position on October 31; Beersheba was captured by dusk after a mounted cavalry charge by an Austrailian brigade, and Gaza fellon the night of November 6-7. It was victory, but incomplete; the Turks held tenaciously to the key communications junctions which covered their retrat. Both retreat and the pursuit were governed by an arid landís most precious commodity - water.

The way to Jerusalem was now open. From a defensive holding operation, the Palestine campaign had grown into a major offensive; Jerusalem had become a glittering political and psychological prize for the war-weary British people. Allenby had brought victory to a people starved for victory; on to Jerusalem!

Supply and communications favored the British. The Turks depended upon a 1,300-mile railroad lifeline, with wood-burning locomotives; the British had organized well their land routes across Sinai, and above all, they possesed the inestimable advantage of command of the sea. The result was inevitable.

On December 8, Allenby launched an assault with four divisions against Turkish positions which stretched from the Mediterranean, north of Jaffa, to angle back southward in the Judean Hills in front of Jerusalem. The Turkish lines bent and brok; on December 9 they retreated from Jerusalem; the Holy City was at last in British hands. In a few days the rains came, and the campaigning season was over.

The Palestinian campaign - fought by illiterate Turkish askars, Indian sepoys, rambunctious Austrailians, Oxford dons, and Prussian junkers, and supplied by manback, donkeys, camels, mules, horses, railroads, pipelines, and ships - was aided by an Arab revolt, incited, inspired, and organized by British pounds and promises, and by the tortured genius of a young British archaeologist, T.E. Lawrence. During 1917 Lawrence and his Arab bands - mostly camel moumnted - harried, cut off, and immobilized Turkish forces along the so-called Hejaz railroad in Arabia. During Allenbyís advance into Palestine, Lawrence and his irregulars covered the British right flank, made raids and reconnoitered, and supplied invaluable information about Turkish dispositions.Ý Lawrence was one of that vanishing breed, an intellectual romantic, who was at the same time a man of rugged action, with a natural eye for terrain and an aptitude for soldiering.Ý The Arab revolt and Lawrence, though important, were ancillary to Allenbyís successí and Lawrence will live more for a book than a battle - his immortal Seven Pillars of Wisdom.

In Mesopotamia, the prize of Bagdad lured British armies ever northeward; Sir Stanley Maude with a quarter of a million men (less than half of them combat troops) far outnumbered the riddled Turks. The battle was as much one of supply as of bullets. River craft in large numbers, laborers, and animals of all kinds formed Maudeís lifeline to the sea.

Maude, after stubborn resistence and delay caused by torrential rains, finally cleared the enemy from Kut al Imara, the Shumran bend and Asiziyeh (March 4), which was developed as an air base for fourteen British planes. Halil had one 11,0000-man corps in front of Baghdad -attempted to make a stand at Diyala, but he was outmaneuvered and far outnumbered.

The city of the Arabian Nights fell after small-scale fighting on March 11, and a dream of ìDrang nach Ostenî - the Berlin-to Baghdad railway - was ended. ........


John Pearson, The Private Lives of Winston Churchill (New York: Simon & Schuster, 1991)

p. 159-160 Ever since childhood, Churchill had been turning to aggression to dispel depression. Now he found in art the ideal way of sublimating his aggression. And he learned, too, to curb his anxieties, to cope with ìBlack Dogî as best he could, and to wait.Ý Then, in the early summer of 1917, patience and painting were rewarded. The new Prime Minister, Lloyd George, summoned his old colleague from misery and exile. On July 12, 1917, Churchill was readmitted to the Cabinet, and his task suited his energies - if hot his original ambitions. The ìman of warî as Baldwin called him, was made Minister of Munitions.




James T. Rogers, Woodrow Wilson; Visionary for Peace (New York: Facts On File, Inc., 1997) Pp 55-56

" December 1917, Wilson took possession of the railroads in the government's name and appointed Treasury Secretary William G. McAdoo to run them. The appointment gave Wilson some angusih, since he disapproved of giving government appointments to relatives and McAdoo was now his son-in-law. But McAdoo already had a government appointment, made before he married Eleanor Wilson. ...

Fuel, which was mostly coal in those days, also presented a problem. It was quickly apparent that fuel supplies could not keep up with both civilian needs and the demands of the war industries. Wislon's advisors told him it would be el consumption by designating "heatless days" and by closing offices and factories from time to time. The president knew that such steps would be hightly unpopular, but he took them anyway. As Wilson predicted, there was a great outcry, but he stood firm. "It is extraordinary," he wrote to Bernard Baruch at the time, "how some people will wince and cry out when they are a little bit hurt."

Criticism came from a more troublesome source in January 1918. The Senate's Committee on Military Affairs, which had been monitoring the munitions program, decided the gap between production goals and actual output was too great. Senator George Chamberlain of Oregon, chairman of the committee, made a speech in New York declaring that "the Military Establishment of America has fallen down" and "has almost stopped functioning ... because of inefficiency in every bureau and in every department of the Government. Conservative Republicans set up a cry for the creation of a War Cabinet, consisting of members of both parties, to take over control of the war.

Wilson thought the criticism was unjustified, but he saw in it a chance to tighten his own control over the war effort. At his urging, Senator Lee Overman of North Carolina introduced a bill that would give the president stronger power to organize and direct government agencies in the conduct of the war. Although opponents in Congress denounced the bill as making the president a dictator, it passed. As the historian Frederick L. Paxson later wrote, "Few statutes have in so few words surrendered so much; and none has vested more discretion in the President.

Wilson used his discretion to vest more power in the War Industries Board, which he had created in the summer of 1917 to supervise war production and control the flow of raw materials. With his new power, Wilson made the board an independent body and named Bernard Baruch as its chairman. Baruch, a man with a strong hand and a wide aquaintance among businessmen, quickly brought order and efficiency to war production.

Pg. 53ÝÝÝ Wilson made a basic decision very early: He would not load the burdens of war onto the existing government departments (other than State, War and Navy), but instead would create new agencies to cope with the problems raised by the war. Among the agencies were the Committee on Public Information, headed by George Creel, and the War Industries Board, headed by Bernard Baruch. Wilson also appointed men who might be described as "czars" to deal with particularly crucial areas. Herbert Hoover (a Republican who was elected President 10 years after the war) became food administrator, and Henry Garfield was fuel administrator. Creel, Baruch, Hoover and Garfield -- along with Secretary of War Newton D. Baker and Secretary of the Navy Josephus Daniels -- formed what came to be known as the "War Cabinet," which met once a week to discuss war policies.
[Wilson's Daughter marries Wm. McAdoo]
During all this activity in Wilson's first two years as president, the Wilson family saw both joy and tragedy. Two of the Wilson daughters were married in the White House. Jessie married Francis B. Sayre, a member of the faculty wat Williams College on November 25, 1913. ... Eleanor married Secretary of the Treasury William G. McAdoo on May 7, 1914. ... The McAdoos [gave Wilson two grandchildren] -- Ellen Wilson McAdoo and Mary Faith McAdoo. The McAdoo marriage did not last. McAdoo, the New York lawyer and businessman who had played a key role in Wilson's nomination, was 26 years older than Eleanor and a widower with six children at the time of the marriage. The McAdoos divorced in 1934, when McAdoo was a Senator from California, and a year later he married a 26-year-old nurse. Eleanor did not marry again.
[Death of the first Mrs. Wilson]
But during the happy times of marrying daughters in the White House, it became increasingly apparent that Ellen Wilson was not well. She moved more and more slowly and became steadily weaker and paler. On March 1, 1914, she fell in her room at the White House. Her recovery from the effects of the heavy fall was very slow. She ate poorly and spent most of her time lying on a sofa or sitting outdoors in a wheelchair watching the gardeners work among her beloved flowers.
It was evidenct to Grayson and her other doctors that she had a serious kidney disease. Wilson however, persisted in believing that she would get better. As late as June, he wrote to Mary Hulbert:
The dear lady is at last beginning to come uphill, and my reassurance lightens my heart immeasurably. For some time I was almost without hope: I thought, with leaden heart, that she was going to be an invalid, another victim of the too great burden that must be carried by the lady of the White House; but that fear, thank God, is past and she is coming along slowly but surely.
It was onlyh a momentary improvement, however, and the "dear lady" grew steadily weaker. Wilson spent much of his time by her bed, holding her hand. That is what he was doing when she died, late in the afternoon of August 6 [1914]. He looked up at Grayson and said, "Is it all over?" Grayson nodded.
Robert H. Ferrell, Woodrow Wilson and World War I (New York: Harper & Row, 1985) p 104-
The inability of the administration and the Army to organize production became apparent in the winter of 1917-18 with a railroad tie-up of massive proportions. ... The railroad supervisory organ, the Railroads' War Board, on July 20, 1917, by Bulletin 22, provided tags for expediting this freight, and its agents tagged everything and sent it to the east coast, causing colossal tie-ups, cars packed up to Buffalo and Pittsburg. The War Department requisitioned warehouse space on docks and even ships. Nothing seemingly could resolve the mess. The Railroads' War Board depended on voluntary measures; each railroad refused to permit its own engines to operate on another railroad's tracks, and hoarded cars. In November roads undertook "revolutionary measures to move engines and cars. President Wilson seized the roads effective January 1, 1918.
All the while coal production went down, supplies 6 million tons short each month. The President had fixed bituminous coal prices at $2 a ton when $3 probably was necessary to operate marginal mines ...
With little coal, a harsh winter, and the railroad tie-up popular attention turned to Washington. At first the problem seemed to be Secretary of War Baker, whom Colonel House schemed to get out of the way, appointed as private secretary to the President. ...
Behind the effort to "get" Baker lay intense feeling about the President himself. Wilson, even the friendly House believed, had allowed industrial mobilization to slip from his hands. "It is one of the things I have feared the President would sometime do. He seems to have done it. I have never heard such a storm of protest." ... "The fact is, [Senator Henry Cabot] Lodge wrote, "that the President has no administrative capacity. He lives in the sunshine. He wants nobody to tell him the truth apparently and he has a perfect genius for selecting little men for important places." Baker handed in his resignation, and the President refused it. House wrote that the Secretary "seems to be getting deeper in the mire, and the President cannot see it. Baker's mind is so sympathetic with that of the President's that the President does not see that he is no more of an administrator than he is himself."
It was at this point that Wilson turned to Baruch, the forty-seven-year-old New York financier ("Hebrew Wall Street speculator," opined House), $50,000 contributor to the Democratic Party in 1916, a handsome man, prematurely white hair parted down the middle, round face, twinkling eyes. In the letter of appointment the President denominated him "the general eye of all supply departments in the field of industry."
In the short time that remained before the war came to its end -- Wilson appointed Baruch on March 4, 1918 -- the new W.I.B. administrator followed the same voluntary procedures of McAdoo and Hoover, seeking to obtain cooperation and good will. Actually, of course, he had no time to assemble a large bureaucracy with wich to compel industrialists to do their part. His staff numbered 750 and included the president of the American Vanadium Company, J. Leonard Replogle; vice president of International Harverster, Alexander Legge; vice president of John Deere and Company, George N. Peek; and Wall Street investment banker Clarence Dillon. The W.I.B. organized the nation into twenty-one production zones, assigning businessmen to resource advisory committees. By the end of the war manufacturing centers were sending lobbyists to Washington to keep in touch. It was efficient use of talent. An unanticipated result of such decentralization was that businessmen obtained intimate views of the government's problems.
The W.I.B. managed some achievements that at the time and later were much celebrated, and doubtless helped the war effort. A key word in its judgement was "essentiality" -- whether a product had immediate war use. It's conservation division set specifications for products that might waste commodities, standardizing baby carriages and coffins, reducing bicycle designs (saving 2,000 tons of steel), taking stays out of corsets (allegedly obtaining enough metal for two warships). It induced tailors to reduce the size of sample wool swatches, saving 450,000 yards; forced substitution of paper wrappers for 141.8 million pasteboard cartons and 500,000 wooden packing cases of hosiery and underwear, freeing 17,321 freight cars; asked threat manufacturers to put 200 yards on each wooden spool (they had reduced yardage to 150 to hold the price during inflation) and saved 600 freight cars.
Baruch technically did not have control of prices, which belonged to a Price Fixing Committee headed by Robert S. Brookings, but he assumed that power to allocate priorities included prices. Whether because of his work or that of Brookings, the commodity price index during the war's last three months did not change. The metals group index, to which Baruch gave special attention, fell from 330 (July 1913 through June 1914 equalled 100) in July 1917 to an average of 211 for 1918. In March 1918 the index for all commodities was 188, at the Armistice, 201.
The W.I.B. acted as purchasing agent for the Allies, and in London created "joint executives" for such items as nitrates, tin, wool, leather, platinum. The executives served as exclusive buyers, and then allocated these commodities.

But behind the facad of achievement, creation of organization, lay the basic unwillingness of the Army to give up procurement. Whatever went on at highter levels in the W.I.B., its major activity ground away on the level of the so-called commodity sections, committees that passed on priorities and production quotas for such basic items as wool, rubber, steel, hardware. In the commodity sections sat representatives of both the W.I.B. and the Army. Here the Army conducted a sort of guerrilla war with the civilians. In the spring of 1918 when the sections were not working well at all, General March relieved their principle military coordinator, General Pierce, and gave coordination to Hugh Johnson. March was contemptuous of the W.I.B. and expected little from his new coordinator, who himself went over to the W.I.B. with intense suspicion of civilians. But unlike March, Johnson's suspicion was not based so much on the supposed superiority of Army professionals as upon, as he later admitted, sheer ignorance. He quickly saw the problem, and also found himself drawn to Baruch and the latter's assistant, Peek, both of whom he came to admire because of their intellectual agility and decisiveness. He created parallel commodity committees within the War Department. And he did his best to bring Army representatives in the W.I.B. commodity section into cooperation with civilian opposites. For a while he thought things were working, and then discovered that there were not, partly because Army representatives had other duties in the War Department, also because in an appraretly sensible effort to assert the primacy of civilians in industrial mobilization Baruch had given paramount authority to the chairmen of the commodity sections, all of whom were civilians. Army representatives had done what came naturally, which was to cease almost all efforts to cooperate, on the theory that the civilian heads were paying no attention to Army needs anyway. It probably was true that the heads were acting arbitrarily. Johnson arranged for decisions to be put back into the sections as a whole, taking them away from the chairmen. Johnson's task again became one of working out cooperation, which he was beginning to accomplish late in the summer of 1918 when he asked for and obtained a brigade command.

In the short time that Baruch had to make changes in industrial mobilization he could not manage enough to dominate the Army. Control worked the other way -- the Army controlled the W.I.B. Under claim of military necessity the Army simply told the W.I.B. what to order. It is illuminating to read how on May 13, 1918, the chairman of the W.I.B. wrote sharply to Edward R. Stettinius, then the War Department's "surveyor general" of purchases. Baruch admonished Stettinius that he had heard the department had placed orders far in excess of reasonable requirements. Five days later, a long time considering that the letter had passed only from one Washington office to another, Stettinius responded that he did not know any specific cases of overproduction in excess of requirements laid down by the General Staff and General Pershing. The response, of course, was no response at all.


Geoffrey C. Ward, A First-Class Temperament; The Emergence of Franklin Roosevelt (New York: Harper & Row, 1989) P. 367 n

According to Alice [Allice Roosevelt Longworth],she and Franklin shared still another secret in wartime Washington. Bernard Baruch, then head of the War Industries Board, was believed to be conducting an affair with May Ladenburg, the beautiful daughter of a senior partner in the German-American banking house of Ladenburg, Thalmann & Company whose loyalties were thought suspect. Because Alice was a friend of hers, she was asked to suggest the best places in Miss Ladenburg's studio to plant microphones. She was happy to oblige: "All I was being asked to do," she said later, "was to look over transoms and peep through keyholes. Could anything be more delightful than that?" A microphone was duly hidden beneath the mattress of a suspended bed in which she entertained her lover.

Franklin was called in to provide a guest staying in the Ladenburg home with a sheaf of false but official-looking documents about the disposition of the fleet, with instructions to leave them around the house in the hope that his hostess might be overheard discussing them with Baruch.

Alice and several Secret Servicemen then gathered in an adjoining stable to listen to the tryst. Nothing momentus was recorded, she remembered, although "We did hear her ask Bernie how many locomotives were being sent to Romania or something like that. In between the sounds of kissing so to speak. ... Of course we were doing the most disgraceful thing in the name of looking after the affairs of our country, but it was sheer rapture!"

It especially pleased Alice that when she and Franklin laughted about the incident in the White House years later, Eleanor said, "You know Alice, I have always disapproved of what you and Franklin were doing!" They had been most unfair to May Ladenburg. Source: Michael Teague, Mrs. L., pages 162-163




John Pearson, The Private Lives of Winston Churchill (New York: Simon & Schuster, 1991)

p. 160-162 On a peaceful afternoon in 1918 a group of Royal Flying Corps mechanics waited by a staff car on the perimeter of a former meadow, now officially a ìflying station,î just outside the Surrey village of Godstone. Less than a hundred miles away across the english Channel the last throw of the German High Command was about to be bloodily repulsed by the Allied armies on the western front, but none of this disturbed the rural calm of a Saturday afternoon in southern England.

......Before the propeller had stopped, a bulky figure in a sheepskin coat had heaved himself out of the passenger cocpit and the car had started off to pick him up. The driver knew from experience that Churchill was invariably in a hurry.

Forty minutes earlier, Churchill had been driven in a very large Rolls-Royce to the aircraft from his headquarters at the Chateau Fouquienberg, just behind the Allied lines near Amiens. Her referred to the place as ìChateau Fuck and Bugger,î and the Rolls had been specially lent him for his spell in France by his great friend ìBenny,î Duke of Westminster. ìYou might tell Winston in answer to his wire that I only have a shut Rolls at present, if thatís any use to him,î Westminster told Churchillís secretary when he asked if he could lend him an open Rolls on his appointment as Minister of Munitions in Lloyd Georgeís government in July 1917.

It seemed a typically casual arrangement, but the use of this personal Rolls- Royce exemplified the optimistic and flamboyant mood with which Churchill undertook his duties as the war was ending. After the personal disaster of Gallipoli, the months spent recovering from deep depression, and active service at the front, he was back where he knew he belonged - in power. His morale and confidence seemed entirely restored now that he was once again in office. His task, as Lloyd George knew when he appointed him, was one that matched his ingenuity and boundless energy.Ý Present at every major battle to ensure that the guns had their munitions, he was a warlord once again. He loved the role, bullying the generals and thriving on the breath of battle. Half seriously, Clementine had called him ìa Mustard Gas fiend, a Tank jugggernaut and a Flying terror,î but at least he was no longer the gray-faced husband she remembered, with the doom of the Dardanelles across his brow.
.....The chance arose to buy a farmhouse of their own in the Sussex farming country near East Grinstead. It was called Lullenden and seemed as peaceful and romantic as its name. ......

........During the two years Churchill actually owned it, it was still very much Lullenden Farm, and Sarah simply called it ìa small farm outside East Grinstead.î But small it was not. ...

.... There were seven bedrooms, a dining room to seat eighteen, and a galleried seventeenth-century drawing room. Lloyd George, Sir Ernest Cassel, the press rporietor Lord Ridell, and the American lawyer, diplomat, and businessman Bernard Baruch were among the weekend visitors.


Lt. Colonel Richard Stockton, 6th, Inevitable War (New York: The Perth Company, 1932)

P. 516-517 .... Speaking of the World War, Mr. Bernard Baruch, Chairman of the 1918 War Industry Board, said, ìHad the war gone on another year our whole civil population would have gradually emerged (as wardrobes and inventories became exhausted) in cheap but servicable uniform. Types of shoes warn were to be reduced to two or three. The manufacture of pleasure automobiles was to cease. Flaps from pockets and unnecessary trim in clothing would have disappeared. Steel had already been taken out of womenís corsets.Ý ìThe conservation program was, of course, much broader than this. It affected practically the whole field of commodities . . . We had gasless, meatless, sugarless, fuelless days, and in ways and methods too numerous to mention we were greatly increasing the supply for essential uses by cutting off supply for nonessentials.î
[Army and Navy Register, June 27, 1931]


Eliot Asinof, 1919; Americaís Loss of Innocence (New York: Donald L. Fine, Inc.,

p. 90-91 Wilson landed in Brest on the thirteenth of the month, exactly as he had arranged in December at his first arrival. (Numbers, it seemed, were one of his more bizarre passions, and thirteen was his favorite. Because of the thirteen original colonies and the stripes of the flag? Because of the thirteen letters in his name? Because others thought it to be unlucky? ) On this thirteenth, however, Wilson took a far greater trouncing than he was prepared for. In his absence, his dear friend, Colonel Edward House, had permitted the detachment of the league from the preliminary treaty as a concession to the other conferees. The preliminary treaty dealt exclusively with economic and military matters. The resolution of the more complicated, and controversial league covenant was to be withheld for the final treaty that would be drafted later.


Wilson was stunned. When he emerged from his cabin after a meeting with House, his wife Edith reported that ìhe had aged ten years. ... I look back on that moment as a crisis in his life .. From it date the long years of illness.î Said Wilson: ìHouse has betrayed everything I have worked for....î
.......The significance of the scene lay in the fact that it could have happened, that the fate of nations lay in the neurotic complexities of such a relationship. What, one might ask, was House doing there in the first place? No one had elected him. He had never held political office. The Senate had not approved his appointment. What forces had arranged that such enormous power be placed in his hands? .....Bernard Baruch, one of Wilsonís highly respected economic advisers ... once heard House ejaculating at the glories of his position: ìIsnít it thrilling to deal with the forces that affect the destiny of the world.!î


ÝThe United Nations Conspiracy

Colonel Edward Mandell House was President Woodrow Wilsonís closest and most influential adviser. A powerful behind the scenes manipulator, House had enormous influence in shaping Wilsonís domestic and foreign policies to support economic collectivism and political internationalism. As noted by one biographer:Ý ìFor all his might, Wilson could not stand alone. In every fruitful enterprise he borowed the Colonelís brain. I shall not impute feet of clay to the idol. I concede they are living flesh. But they are not his own. Woodrow Wilson stalks through history on the feet of Edward Mandell House.î

Colonel House wrote the first draft of the League of Nations covenant and, in September, 1917, convinced President Wilson to commission a group of ìintellectualsî to devise terms for peace and draft a program for a world government. The group, later known as The Inquiry, consisted of some highly talented individuals, many of whose names later became household words as prominent journalists, top government officials and influential academicians. For instance:

ìSidney Menzes, Houseís brother-in-law and president of the City College of New York, was named director. James T. Shotwell was in charge of historical geography and then of the library. There was [sic] Christian A. Herter, later to become Secretary of State, and Norman Thomas, a Marxian Socialist. And the secretary was a gentleman named Walter Lippmann ....

ìAnd then there were a couple of brothers, enterprising chaps - Allen Welsh Dulles (later Director of the Central Intelligence Agency) and John Foster Dulles [later Secretary of State].î

President Wilson drew heavily upon the work of the Inquiry in formulating his famous Fourteen Points program which was presented to Congress on January 18, 1918, as a peace strategy to save the world. The group incorporated various peace proposals and the League of Nations covenant into the document, which the United States rejected first on November 19, 1919, and again on March 20, 1920.

American internationalists expected the frustration and dissruption generated by World War I to condition the American people so the United States could be enticed into the League of Nations as an alleged means of avoiding future wars.

However, by the spring of 1919 it had already become clear that the League would face serious , possibly fata, opposition in the United States Senate. Colonel House and a few of his followers therefore began laying groundwork for a long-range effort to condition Americans to accept eventual United States membership in the supranational organization steeped in their particular brand of collectivist internationalism. If World War I couldnít do it then perhaps some later conflict could, for as Alexander Hamilton had recognized decades earlier:

:Safty from external danger is the most powerful director of national conduct. Even the ardent love of liberty will after a time, give way to its dictates. The violent destruction of life and property incident to war, the continual effort and alarm attendant on a state of continual danger, will compel the nations the most attached to liberty to resort for repose and security to institutions which have a tendency to destroy their civil and political rights. To be more safe, they at length become willing to run the risk of being less free.îÝ On May 30, 1919, Colonel House and his associates met with some like-minded Englishmen at the Majestic Hotel in Paris. The British participants subsequently established the Royal Institute for International Affairs (RIIA), while the Americans returned to the United States and founded the American Institute for International Affairs (AIIA). The AIIA subsequently merged with the Council on Foreign Relations (CFR), a languishing discussion group which had been formed in New York, during the war. The merger was formally incorporated in New York City on July 29, 1921. According to Hamilton Fish Armstrong, who served for fifty years (until October, 1972) As managing editor of the CFRís influential quarterly, Foreign Affairs, ìBesides taking the Councilís name, they gained the financial backing of it s public-spirited membership. They also acquired a locus, something vital if they were to continue functioning collectively and not as individuals dispersed in academic and other centers. .....




Murray Rothbard, Americaís Great Depression, 2nd ed. (Kansas City: Shed and Ward, Inc., 1972)

p. 198-200 The next year, 1921, saw determined and well-organized efforts toward a nationwide cotton cartel. The American Cotton Association, The Cotton News, and other groups urged an acreage reduction of up to 50 per cent for cotton, and South Carolina officially proclaimed a ìCotton Acreage Reduction Day.î Acreage was reduced considerably, and this, joined with a poor crop, lowered the supply greatly; but cotton prices rose less than proportionately to the fall in output, thus frustrating the cartellists once again.
A precedent had been set by the wartime Food Administration Grain Corportaion, which had fixed high prices of wheat in order to stimulate production and had itself distributed the wheat available. Furthermore, the Hoover European food relief program of 1919, widely trumpeted as a humanitarian gesture, was also a means of getting rid of ìsurplusî farm products and thus bolstering food prices. - But the drive for compulsory price support had not begun in earnest. It reached major imporance in the ìequality for Agricultureî movment, launched in the fall of 1921 by george N. Peek and General Hugh S. Johnson and backed by the powerful support of Bernard M. Baruch. The idea was that since industry was protected by tarriffs, agriculture might as well join in mulcting the consumer. The governmetn was to maintain domestic farm prices at a high level, buying the unsold surplus and selling it abroad at lower, wold -market levels. Both Peek and Johnson had direct economic interests in farm subsidies as head of the Moline Plow Company, manufacturers of agricultural machinery.



John Kenneth Galbraith, The Great Crash 1929, 3rd ed. (Boston: Houghton Mifflin Company, 1972)

p. 14Ý In 1925, under the aegis of the then Chancellor of the Exchequer, Mr. Winston Churchill, Britain returned to the gold standard at the old or pre-World War I relationship between gold, dollars, and the pound. There is no doubt that Churchill was more impressed by the grandeur of the traditional, or $4.86, pound than by the more subtle consequences of overvaluation, which he is widely assumed not to have understood. The consequences, nonetheless, were real and severe. Customers of Britain had now to use these costly pounds to buy goods that still reflected wartime inflation. Britain was, accordingly, an unattractive place for foreigners to buy.Ý For the same reason it was an easy place in which to sell. In 1925 began the long series of exchange crises... There were also unpleasant domestic consequences; the bad market for coal and the effort to reduce costs and prices to meet world competition led to the general strike of 1926.

Then, and since, gold when it escaped from Britain or Europe came to the United States. This [flow of gold to the US] might be discouraged if prices of goods were [unattractively high] and interest rates [i.e., returns on investment] were low in this country. [Making the US a poor place in which to buy and invest, i.e., a poor place to purchase with gold or lend gold.] In the spring of 1927, three August pilgrims - Montagu norman, the Governor of the Bank of England, the durable Hjalmar Schact, then Governor of the Reichsbank, and Charles Rist, the Deputy Governor of the Bank of France - came to the United States to urge an easy money policy. The Federal Reserve obliged. The rediscount rate of the New York Federal Reserve Bank was cut from 4 to 3.5 per cent. ... The funds that the Federal Reserve made available were either invested in common stocks or (and more important) they became available to help finance the purchase of common stocks by others [i.e. margin account loans]. So provided with funds, people rushed to the market.


Lionel Robbins, The Great Depression (New York: Macmillian, 1934)

p. 52-53 The situation seems to have been roughly as follows. By the spring of 1927 the upward movement of business in the United States, which started in 1925, showed signs of coming to a conclusion. A moderate depression [ i.e. a recession] was in site. There is no reason to suppose that this depression would have been of very great duratikon or of unusual severity. It was a normal cyclical movement.

Meantime, however, events in England had produced a position of unusual difficulty and uncertainty. In 1925 the British authorities [i.e., Churchillís authority as Chancellor of the Exchequer] had restored the Gold Standard at a parity which, in the light of subsequent events, is now regarded to have been too high. The consequences were not long in appearing. Exports fell off. Imports increased. The Gold Standard was in peril.Ý The effects of over-valued exchange made themselves felt with greatest severity in the coal trade. Throughout 1926 there raged labour disputes, which were the direct consequence of these torubles - first the general strike, then a strike in the coal-fields which dragged out for over six months, still further endangering the trade balance. By 1927 the position was one of great danger. International assistance was sought. And in the summer of that year, partly in order to help us, partly in order to ease the domestic position, the authorities of the Federal Reserve System took the momentous step of forcing a regime of cheap money. A vigorous policy of purchasing securities was initiated [ i.e., ëopen market purchasesí conducted exclusively at the New York Federal Reserve Bank that puts new supply of dollars into the loanable funds market in exchange for the governement securities purchased.]

On this point the evidence of Mr. A.C. Miller, the most experienced ,member of the Federal Reserve Board, before Senate Committee on Banking and Currency, seems decisive:Ý ì In the year 1927 ... you will note the pronounced increase in theseholdings [Federal Reserve holdings of United StatesÝ securities] in the second half of the year. Coupled with the heavy purchases of acceptances [i.e. with more injection of new loanable money as the Fed buys debt instruments] it was the greatest and boldest operation ever undertaken by the Federal Reserve System, and in my judgement resulted in one of the most costly errors committed by it or any other banking system in the last 75 years.
[Senate Hearings pursuant to S.R. 71, 1931, p. 134]

ìWhat was the object of Federal Reserve Policy in 1927? It was to bring down money rates, the call rate among them, because of the international importance the call rate had come to acquire. The purpose was to start an outflow of gold - to reverse the previous inflow of gold into this country. [ibid. P.154]

The policy succeeded. The impending recession was averted. The London position was eased. The reflation succeeded. Production and the Stock Exchange took on a new lease of life. But from that date, according to all evidence, the situation had gotten out of control By 1928 the authorities were thoroughly frightened. But now the forces they had released were too strong for them. In vain they issued secret warnings. In vain they pushed up their own rates of discount. [Note: the discount rate is the rate at which the Fed lends to member banks, it is a much weaker instrument for the control of money supply, available loanable funds, and interest rates than is the more weighty and direct open market purchase or sale of securities by the New York Federal Reserve Bank -DE] Velocity of circulation, the frenzied anticipation of speculators and company promoters, had now taken control. With resignation the best men in the system looked forward to the inevitable smash.

Thus, in the last analysis, it was deliberate co-operation between Central bankers, deliberate ìreflationî on the part of the Federal Reserve authorities, which produced the potential energy that was the worst phase of this stupendous fluctuation. Far from showing the indifference to prevalent trends of opinion, of which they have so often been accused, it seems that they had learnt the lesson only too well. It was not old-fashioned practice but now-fashioned theory which was responsible for the speculative excesses of the American disaster.

Murray Rothbard, Americaís Great Depression, 2nd ed. (Kansas City: Shed and
Ward, Inc., 1972)

[President Herbert] Hoover had been one of the earliest proponents of a Federal Farm Board to aid cooperative marketing associations ... And so it was not surprise, that as Presidential candidate, Hoover advocated support for farm cooperatives and promised the farm block that he would soon institute a farm-price support program. As soon as he took office, he fulfilled both promises. In June 1929, the Agricultural Marketing Act was passed, establishing the Federal Farm Board.

...The Federal Farm Board was furnished with $500 million by the Treasury and was authroized to make all-purpose loans, up to a twenty-year period, to farm cooperatives at low interest rates. The Board could also establish stabilization corporations to control farm surpluses, and bolster farm prices. Essentially it was a Sapiro-type cartel, this time backed by the coercive arm of the federal government. Hoover appointed, as chairman of the FFB, Alexande Legge, president of International Harvester Col and long-time protege of Bernard M. Baruch. International Harvester was one of the leading manufacturers of farm machinery, and therefore Legge, like George Peek, had a direct economic interest in farm subsidization. Other members included .... It is clear that the Board was dominated by representatives of the very farm cooperatives that it was organized to favor and support. Thus, the Hoover Administration established a giant agricultural cartel, directed by government, and run by and for the benefit of the cartellists themselves.



Freidel, Frank, Franklin D. Roosevelt: A Rendevous with Destiny (Boston: Little
Brown and Company, 1990) p. 60ÝÝ With Hoover, "the great engineer," in the
White House, the possibility that Roosevelt might become president seemed remote
indeed. The stock market crash in October, 1929, changed all that. While Roosevelt
had expected a future depression, he had no idea in the summer of 1929 that an
economic crackup was impending. He was aware of the continuing distress of the
farmers, but did not attach significance to the fact that construction had been down
for the three years and freight-car loadings declining, nor did he know that some
insiders like Bernard Baruch, who had been on of the nationís most successful
investors, were quietly liquidating their holdings in the great bull stock market.


John Pearson, The Private Lives of Winston Churchill (New York: Simon &
Schuster, 1991)

p. 225 ... on to Hollywood, where Churchill was feted as something of a star himself.
They were also lavishly entertained by William Randolph Hearst at his legendary castle
at San Simeon. Always thoroughly at home with press proprietors, Churchill made
something of a hit with the megalomaniac publisher, and agreed to write for him.
Randolph took advantage of San Simeon to lose his virginity with some rapdily forgotten
female guest of Hearstís.
If Churchill was aware of Randolphís escapades, he tactfully ignored them, and so,
up to this point, the trip had been a great success. For Churchill, however, this visit to
America had a gloomy ending. Throughnout the summer he had played the stock market,
confident that he would come back with a fortune. Gambler that he was, he was
speculating on tips from one of his millioniare admirers, the financier Bernard Baruch,
and ignoring advice of brother Jack to play it safe. After Hollywood, he also enjoyed
himself visiting battlefields of the Civil War (on which he was something of an expert),
but he reached New York in time to witness a ruined speculator throwing himself from a
window on Wall Street.
The Crash of 1929 had come, and Churchillís savings and his rash investments
vanished overnight. He returned to England not in triumph but on the edge of ruin. He
was to keep himself afloat only by prodigious efforts as an author and journalist, living
over the next few years, "from mouth to hand."


William Manchester, The Last Lion; Winston Spencer Churchill 1874-1932; Visions
of Glory (New York: Dell Trade Paperback, 1984) (Copyright 1983 by William

p.824 On August 3, 1929, the Empress of Austrailia steamed out of Southampton
bound for Quebec. Among its first-class passengers were Churchill; his brother Jack;
Randolph, now eighteen; and Jackís young son Jonny. ... The Daily Telegraph had agreed
to pay him [2,500 pounds] for ten articles on his trip. In additon, [1,000 pounds] in
World Crisis royalties had arrived before he left London, and a sale of utility shares had
brought him another [ 2,000 pounds]. He invested every shilling he could spare in the
New York stock market. Financial security, he wrote Clementine from the ship, was "a
wonderful thing."
........ The Canadian Pacific had put a stenographer-typist at his disposal for the journey
across the continent, and Bernard Baruch had persuaded Charles Schwab to lend
Churchill his private railway car, with double beds, private bathrooms, a parlor, a dining
room (which Winston converted into an office), kitchen, servantís quarters, a refrigerator,
fans, and a radio. ... "The wireless is a great boon, and we hear regularly from [Horace]
Vickers [his broker] about the stock markets. His news has, so far, been entirely


Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst: A Social
History of the Wall Street Crash of 1929 (Garden City, Double Day, 1979)

p. 322 At noon on Sunday, October 6, Bernard Baruchís private rail car, hooked
to the express from Chicago, glided into Grand Central Station in New York.
Baruch had traveled to Chicago to collect the Churchills, all four of whom were now
suntanned following their stay in California. There they had been guests of William
Randolph Hearst, who messmerized them with the opulence and eccentricity of his lifestyle.
In a letter home to Clemmie, Winston Churchill described Hearst to his wife as "a
grave simple child - with no doubt a nasty temper -playing with the most costly toys,"
including two charming wives," a reference to Mrs. Hearst and Marion Davies, Hearstís
As usual, Churchill kept Clemmie fully informed on his financial affairs. In one
"windfall," resulting from his New York broker investing for him on margin instead
of purchasing shares outright as Churchill expected, he made 5,000. In another
whim, he made 1,000 by speculating in the stock of a furniture firm called Simmons;
Churchill was particularly taken by its advertising slogan: "You canít go wrong with a
Simmons mattress."
Between amusing Baruch with his perceptive observations on Hollywood and its stars
- Churchill thought Charlie Chaplin "bolshy in politics and delightful in conversation" -
he carefully questioned his host about dabbling further in the market.
Baruch explained why he ad adopted a cautious position.
And yet, just as Richard Whitney had predicted to the reporter, the Great Bull
Market had now seemingly shaken off its fetters and was rampaging on more strongly
than ever.
On the New York Stock Exchange on Saturday, U.S. Steel had leaped ahead almost
$8 a share. General Electricís surge was even more dramatic; it went up 10 points.
American Tobacco achieved one of the most spectacular rises of all - a wonderous $38 a
share. The Dow Jones industrial average regained more than 16 points during the
dramatic turnabout.
In San Francisco there was near-record trading in Transamerica and other issues. IN
Chicago some brokers were said to have sent their clerks out to buy gargle to ease their
sore throats from shouting. Balimore, Boston, and Hartford were swept by a wave of
trading that often equaled the volume of earlier in the year.
In St. Louis, Los Angeles, Philadelphia, and Minneapolis-St. Paul, the urge "to get
into the market reached what one hard-pressed broker described as "an epidemic."
Along thousands of miles of private wires went the cheerful news "the big boys"
were behind this new wave of buying.
With a flair that few could match, John J. Raskob encouraged the thought.
Throughout Saturday he talked up his media contacts. Percy Rockefeller, the Du
Ponts, Van Sweringens, and Billy Durant helped reinforce his message.
After Saturdayís market closed there were few Americans unaware that, in the
words of one reporter, "a financial revival equal in fervor to anything the Bible Belt can
produce" was under way.
Across the nation, still more hopefuls threw up their jobs, packed their bags, bid their
families and friends fairwell, and headed for New York.
A radio commentator said, with considerable justification, Wall Street had "taken on
the appearance of a Gold Rush."
The train that brought Baruchís private car into Grand Central no doubt carried at
least a few more speculators who quickly headed downtown to get the first glimpse of
their Klondike.
Even an investor as seasoned as Baruch could not but be surprised by the amazing
about-face the market had made.
Some Wall Street brokerage houses called in their staff this Sunday to change the
tone of their market letters from somewhat somber caution to renewed optimism.
And once again the phrase "organized support" was heard in the Street.
P. 359 [Black Thursday, October 24 - 11:45 a.m.: following a brief official
welcome by Richard Whitney (at 9:50 a.m.) Churchill is looking down on NYSE
trading floor from the visitorís gallery. ] Not unaccustomed to being present at
moments of high drama, Churchill cooly observed a scene that seemed to him "one
of surprising calm and orderliness .. There they were ... offering each other
enormous blocks of securities at a third of their old prices and half their present
value, and for many minutes together finding no one strong enought to pick up the
sure fortunes they were compelled to offer." [Letter to wife, Clementine]
- But whatever he thought about the dayís decline in values of the American
stock he himself held or what he may have said about his loss to Percy Rockefeller,
whose guest he now was, Churchill decided never to put into public print.


John Kenneth Galbraith, The Great Crash 1929, 3rd ed. (Boston: Houghton Mifflin
Company, 1972)

p. 74-75 The best reassurance on brokersí loans was in the outlook for the market. If
stocks remained high and went higher, and if they did so because their prospects justified
their price, then there was no occasion to worry about the loans that were piling up.
Accordingly, much of the defense of the loans consisted in defending the levels of the
market. It was not hard to persuade people that the market was sound; as always in such
times they asked only that the disturbing voices of doubt be muted and that there be
tolerably frequent expressions of confidence.
The official optimists were many and articulate. Thus in June, Bernard Baruch
told Bruce Barton, in a famous interview published in The American Magazine that
"the economic condition of the world seems on the verge of a great forward
movment." He pointed out that no bears had houses on Fifth Avenue. .....
pp. 103-106 Thursday, October 24, is the first of the days which history - such as it
is on the subject - identifies with the panic of 1929. Measured by disorder, fright, and
confusion, it deserves to be so regarded. That day 12,894,650 shares changed hands,
many of the at prices which shattered the dreams and hopes of those who had owned
them. Of all the mysteries of the of the stock exchange there is none so impenetrable as
why there should be a buyer for everyone who seeks to sell. October 24, 1929, showed
that what is mysterious is not inevitable. Often there were no buyers, and only after wide
vertical declines could anyone be induced to bid.
The panic did not last all day. It was a phenomenon of the morning hours. The
market opening itself was unspectacular, and for a while prices were firm. Volume,
however, was very large, and soon prices began to sag. Once again the ticker lagged
more and more. By eleven oíclock the market had degnerated into a wild, mad
scramble to sell. In the crowded boardrooms across the country the ticker told of a
frightful collapse. But the selected quotations coming in over the bond ticker also
showed that current values were far below the ancient history of the tape. The
uncertainty led more and more people to try to sell. Others, no longer able to
respond to margin calls, were sold out. By eleven-thirty the market had
surrendered to blind relentless fear. This, indeed, was panic.
Outside the Exchange in Broad Street a weird roar could be heard. A crowd gathered.
Police Commissioner Grover Whalen became aware that something was happening and
dispatched a special police detail to Wall Street to insure the peace. More people came
and waited, though apparently no one knew for what. A workman appeared atop one of
the high buildings to accomplish some repairs, and the multitude assumed he was a
would-be suicide and waited impatiently for him to jump. Crowds also formed around
the branch offices of brokerage firms throughout the city and, indeed, throughout the
country. Word of what was happening, or what was thought to be happening was passed
out buy those who within sight of the board or the Trans-Lux. An observer thought that
peopleís expressions showed "not so much suffering as a sort of horrified incredulity."
Rumor after rumor swept Wall Street and these outlying wakes. Stocks were now selling
for nothing. The Chicago and Buffalo Exchanges had closed. A suicide wave was in
progress, and eleven well-known speculators had already killed themselves.
At twelve-thirty the officials of the New York Stock Exchange closed the visitors
gallery on the wild scenes below. One of the visitors who had just departed was
showing his remarkable ability to be on hand with history. He was the former
Chancellor of the Exchequer, Mr. Winston Churchill. It was he who in 1925
returned Britain to the gold standard and the overvalued pound. Accordingly, he
was responsible for the strain which sent Montagu Norman to plead in New York
for easier money, which caused credit to be eased at the fatal time, which, in this
academy view, in turn cuased the boom. Now Churchill, it could be imagined, was
viewing his awful handiwork.
There is no record of anyoneís having reproached him. Economics was never his
strong point, so (and wisely) it seems most unlikely that he reproached himself.
In New York at least the panic was over by noon. With the gallery closed, "organized
support" now appeared.
At twelve oíclock reporters learned that a meeting was convening at 23 Wall Street
offices of J.P. Morgan and Company. The word quickly passed as to who was there -
Charles E. Mitchell, the Chairman of the Board of the National City Bank, Albert H.
Wiggin, the Chairman of the Chase National Bank, William C. Potter, the President of
the Guaranty Trust Company, Seward Prosser, the Chairman of the Bankers Trust
Company, and the host, Thomas W. Lamont, the senior partner of Morganís. .... The
elder Morgan was dead. His son was in Europe. But equally determined men were
moving in. They were the nationís most powerful financiers. ...
...A decision was quickly reached to pool resources to support the market. Thomas
Lamont met with reporters. .... "There has been a little distress selling on the Stock
Exchange." He added that this was "due to a technical condition of the market" rather
than any fundamental cause, and told the newsmen that things were susceptible to
betterment." The bankers, he let it be known, had decided to better things.


William Manchester, The Last Lion; Winston Spencer Churchill; Alone 1932-1940
(Boston: Little Brown and Company, 1988)

p. 14 -15 ... men who have amassed fortunes while he has struggled year after year
with creditors, hold enormous appeal for him. That was Brackenís charm.
It also explains, in part, Winstonís fondness for Baruch, though Baruchís appeal
is broader. He is American, he is Jewish, he recognizes the menace of an aggressive
Germany, and Churchill is indebted to him for an extraordinary act of shrewdness
and generosity. Winston was badly hurt in the Wall Street Crash three years ago.
Had it not been for Baruch, however, it would have been much worse; he could
have spent the rest of his life in debt. He is not a born gambler; he is a born losing
gambler. In New York at the time, he dropped into Baruchís office and decided to
play the market, and as prices tumbled he plunged deeper and deeper, trying to
outguess the stock exchange just as he had tired to outguess roulette wheels on the
Riviera. In Wall Street, as in Monte Carlo, he failed. At the end of the day he
confronted Baruch in tears. He was , he said, a ruined man. Chartwell and
everything else he possessed must be sold; he would have to leave the House of
Commons and enter business. The financier gently corrected him. Churchill, he
said, had lost nothing. Baruch had left instrucitons to buy every time Churchill sold
and sell whenever Churchill bought. Winston had come out exactly even because,
he later learned, Baruch even paid the commissions.


William Manchester, The Last Lion; Winston Spencer Churchill 1874-1932; Visions
of Glory (New York: Dell Trade Paperback, 1984) (Copyright 1983 by William

p. 826 ..... On the evening of "Black Tuesday," when the stock market, honeycombed
with credit, collapsed of its own weight, sixteen million shares changing hands, he dined
at Bernard Baruchís Fifth Avenue mansion. The other guests were bankers and
financiers. When one rose to toast their British visitor, he adressed the company as
"former millionaires and friends."
The next morning Churchill heard shouts below the Savoy-Plaza apartment and
looked out, he wrote , to find that ëunder my window a gentleman [had] cast himself
down fifteen storeys and was dashed to pieces, causing a wild commotion and the arrival
of the fire brigade." ....
.....Wall Street investors had lost over thirty billion dollars, almost as much as the
United States had spent on World War I. Later he would realize that this "Economical
Blizzard," as he came to call it, was responsible for turning all England into "one vast
soup kitchen," driving the country back off the gold standard, doubling the number of
British unemployed, and radicalizing politics throughout Europe, especially Germany.
Baruchís New York Mansion 1055 Fifth Avenue
Baruch made his initial millions speculating in copper stocks.


John Pearson, The Private Lives of Winston Churchill (New York: Simon &
Schuster, 1991)
p.225 Following the loss of office, the loss of so much money was a bitter blow. The
optimistic years were over, and Churchill was badly hit by a midlife crisis. Harold
Nicholson was shocked when he saw him in January 1930 - very changed from when I
last saw him. A white round face like a blister. Incredibly aged. ... His spirits have also
declined and he sighs that he has lost his old fighting power.î.....



Freedom From Fear, loc. cit.

p. By the spring of 1930 many observers were cautiously optimistic. Hoover himself, in
a statement that would later haunt him, proclaimed to the U.S. Chamber of Commerce on
May 1, 1930: ìI am convinced we have passed the worst and with continued effort we
shall rapidly recover.î The following month he told a delegation from the National
Catholic Welfare Conference that their pleas for further expansion of federal public
works programs were ìsixty days too late. The depression is over.î

Given available information, and given the scale against which the events of late 1929
and early 1930 could then be measured, these statements were not as outrageous as they
appeared in retrospect. The wish for recovery might have been father to the thought, but
circumstances lent the idea a measure of plausibility. The stock market had by Aptril
1930 recouped about one-fifth of its slippage from the speculative peak of the
preceding autumn. Some rural banks had begun to crack, but the banking system
as a whole had thus far displayed surprising resilience in the immediate wake of the
crash; deposits in operating Federal Reserve member banks actually increased
through October 1930. The still sketchy reports on unemployment were worrisome but
not unduly alarming. Major employers were apparently abiding by their pledge to
maintain wage standards, and private industry as well as local and state governments had
publically acceded to Hooverís request to accelerate construction projects.

But the reality, still only obscurely visible in the meager statistical data that the
government could then muster, was that the economy was continuing its mystifying
downward slide. Buy the end of 1930 business filures had reached a record 26,355.
Gross national product had slumped 12.6 percent from its 1929 level. In durable goods
industries especially, production was down sharply: as much as 38 per cent in some steel
mills, and about the same throughout the key industry of automobile manufacturing, with
its huge employment rolls. Despite public assurances, private business was in fact
decreasing expenditures for construction; indeed, in the face of softening demand it had
already cut back construciton in 1929 from its 1928 peak, and it cut still further in 1930.
The exact number laid-off workers remained conjectural; later studies estimated that
some four million laborers were unemployed in 1930..

Yet most Americans in 1930 saw these developments less clearly than did later
analysts and evaluated what they could see against the backdrop of the most recent
experience with an economic recession in 1921. Then GNP had plummeted almost 24
percent in a single year, twice the decline of 1930. Unemployment was somewhat larger
in absolute terms in 1921 than in 1930 (4.9 million versus 4.3 million) and significantly
larger in percentage terms (11.9 percent versus 8.9 percent). Americans could justly feel
in 1930 that they were not - yet- passing through as severe a crisis as the one they had
endured less than a decade earlier. This perception of the gravity of the crisis, joined
with the recurrent belief that its momentum had been arrested and the corner turned, as
had happened so swiftly in 1921, inhibited Hoover from taking any more aggressive
antidepression fiscal action in 1930. Nor was he yet coming under any significant
pressure to do more. He stood securely in mid- 1930 as the leader of the fight against the
depression and he seemed to be winning - or at least not losing. Hoover, predicted the
powerful Democratic financier and economic sage Bernard Baruch in May 1930,
would be ìfortunate enough, before the next election, to have a rising tide and then
he will be pictured as the great master mind who led the country out of tis economic



Murray Rothbard, Americaís Great Depression, 2nd ed. (Kansas City: Shed and
Ward, Inc., 1972)

On all other aspects of the Hoover New Deal, the President blossomed rather than
faltered. The most important plank in his program - the RFC - was passed hurriedly
in January by the Congress. The RFC was provided with government capital
totalling $500 million, and was empowered to issue further debentures up to $1.5
billion. Hoover asked none other than Bernard Baruch to head the RFC, but
Baruch declined. At that point, Hoover turned to name as Chairman one of his
most socialistic advisers, the one who originally suggested the RFC to Hoover,
Eugene Meyer, Jr., and old friend of Baruchís. For the first five months of its life,
the lending activities of the RFC lay shrouded in secrecy, and only determined
action by the Democratic Congress finally forced the agency to make periodic public
reports, beginning at the end of August. The bureaucratic excuse was that FRC loans
should, like bank loans or prvious NCC loans, remain confidential, lest public confidence
in the aided bank or business firm be weakened. But the point is that, since the RFC was
designed to lend money to unsound organizations about to fail, they were weak and the
public deserved t lose confidence, and the sooner the better. Furthermore, since the
taxpayers pay for government and are supposed to be its ìowners,î there is not excuse for
governmental representatives to keep secrets from their own principals. In a democracy,
secrecy is particularly culpable for how can the people possibly make intelligent
decisions if the facts are withheld from them by the government.?
P. 245-247 ...In September [1931], Gerard Swope, head of General Electric, far
surpassed the radicalism of his old public-works proposal by presenting the Swope
Plan to a convention of the National Electrical Manufacturers Association. The
Plan, which garnered a great deal of publicity, amounted to a imitation of fascism
and an anticipation of the NRA. Every industry was to be forcibly mobilized into
trade associations, under Federal control, to regulate and stabilize prices and
production, and to prescribe trade practices. Overall, the Federal Government,
aided by a joint administration of management and employees representing the
nationís industry, would ìcoordinate production and consumption.î ...the U.S.
Chamber of Commerce endorsed this socialistic plan in December by a large majority, as
a means of employing Federal coercion to restrict production and raise prices. Leading
the march for approval was the new President of the U.S. Chamber, Henry I. Harriman,
of the New England Power Company. Harriman wrote, in his report of the Chamberís
Committee on the Continuity of Business and Employment, that ìWe have left the period
of extreme individualism. ... Business prosperity and employment will be best maintained
by an intelligently planned business structure.î With business organized through trade
associations and headed by a National Economic Council, any dissenting businessmen
would be ìtreated like a maverick. ... Theyíll be roped, and branded, and made to run
with the herd.î The president of the National Association of Manufacturers wanted to go
beyond the Swope Plan to forcibly include firms employing less than fifty workers.
Furthermore, former Secretary of the Treasury William G. McAdoo proposed a
Federal ìPeace and Industries Boardî to adjust national production to consumption
..... The historian Charles A. Beard denounced laissez-faire and called for a Five Year
Plan of industrial cartels headed by a National Economic Council. And the popular
philosopher Will Durant called for naitonal planning by a national economic board,
ruling over boards for each industry. Supreme Court Justice Louis Brandeis suggested
complete state control of industry on the legal ground of public convenience and
One of the most important supporters of the cartelization idea was Bernard M.
Baruch, Wall Street financier. Baruch was influential not only in the Democratic
Party, but in the Republican as well, as witness the high posts the Hoover
Administration accorded to Baruchís proteges, Alexander Legge and Eugene
Meyer, Jr. As early as 1925, Baruch, inspired by his stint as chief economic
mobilizer in World War I, conceived of an economy of trusts, regulated and run by
a Federal Commission, and in the spring of 1930, Baruch proposed to the Boston
Chamber of Commerce a ìSupreme Court of Industry.î McAdoo was Baruchís
oldest friend in government; and Swopeís younger brother, Herbert Bayard Swope,
was Baruchís closest confidant.
P.338n Henry I. Harriman, another contributor to the drafting of the NRA, also
turned up as a leader in the agricultural Brain Trust of the New Deal. Another
Baruch disciple, and a friend of Swopeís, General Hugh S. Johnson, was chosen
head of the NRA (with old colleague George Peek as head of the AAA). When
Johnson was relieved, Baruch himself was offered the post. See Margaret Coit, Mr.
Baruch (Boston: Houghton Mifflin Co., 1957), pp. 220-221, 440-442; Loth, op.cit.,
pp. 223ff.


Freidel, Frank, Franklin D. Roosevelt: A Rendevous with Destiny (Boston: Little
Brown and Company, 1990)

p. 103 Others plastered a red label on Rooseveltíís agricultural experts, or denounced
them as professors who had no knowledge of farm realities. They ignored the fact that
while M.L. Wilson, who had developed the domestic allotment idea, did indeed teach at
Montana State, he was also running a Montana wheat ranch. Both Secretary of
Agriculture Wallace and Assistant Secretary Tugwell, incessantly derided as dreamers,
had earlier roots in agricultural business. .. He placated conservatives by announcing in
advance that he would appoint Bernard Baruchíís lieutenant George Peek to be
head of the new Agricultural Administration (AAA).


ÝFreedom From Fear, loc. cit.

p. 118 - 121
If Roosevelt had a plan in early 1933 to effect economic recovery, it was difficult to
distinguish from many of the measures that Hoover, even if sometimes grudgingly, had
already adopted: aid for agriculture, promotion of industrial cooperation, support for the
banks, and a balanced budget. Only the last item was dubious. Roosevelt had pledged
himself in the electoral campaign to fiscal orthodoxy and had denounced Hooverís
budget deficits, but doubts about the strength of Rooseveltís own commitment to fiscal
discipline persisted. Hoover worried that FDR would unleash the hounds of
inflation, inflicting on the United States the kind of monetary calamity that had
befallen defeated Germany scarcely a decade earlier. The German hyperinflation of
1923, as well as the more moderate but still unsettling doubling of American prices
between 1914 and 1920, was still fresh in his memory. Those examples put soundmoney
men on their guard. Moreover, Roosevelt was a Democrat, and the Democratic
Party, since at least the time of William Jennings Bryan in the late nineteenth century,
had been home to a large proinflaitonary constituency. Based mostly in the chronically
indebted agricultural regions of the South and West, the inflationary element in the
Democratic Party was a never-dormant dog roused to noisy life by the Depression crisis.
From all sides pressure played upon FDR to commit himself to this or that Depression
remedy or structural reform. His passive non-committal posture in these preinaugural
days, along with the ever deepening crisis, guaranteed the wild plurality of policies that
would be pressed upon him and the sometimes desperate fervor with which they would
be urged.
Pressure came first of all from his won political staff, the body of economic and legal
experts assembled during the campaign and known colloquially as the Brain Trust
(originally styled as the Brains Trust). .....
Over the course of several weeks, Roosevelt appeared to find the counsel of three of
these academic visitors particularly congenial. In addition to Moley, they were Rexfod
Guy Tugwell, a Columbia University economist, and Adolf A. Berle Jr., a professor at
Columbia Law School. Together with longtime Roosevelt political confidante Samuel I.
Rosenman, cousel to the governor, Basil ìDocî OíConnor, Rooseveltís law partner, and
the financier Bernard Baruchís colorful protege, Hugh Johnson, they constituted what
Roosevelt called his ìprivy councilî until a New York Times reporter coined the name
ìBrains Trustî in September.
....First, the Brain Trusters agreed that the causes as well as the cures of the
Depression lay in the domestic arena. It was futile and pernicious to seek remedies, as
Hoover had done, in the international realm.
Second they all considered themselves inheritors of that tradition of progressive
thought best expressed in Charles Van Hiseís classic work of 1912, Concentration and
Control: A Solution of the Trust Problem in the United States. Both Berle and Tugwell
in 1932 were in the process of making important contributions to that intellectual
tradition with works of their own. Berel, together with Gardiner C. Means, published
The Modern Corporation and Private Property in 1932, a book that argued for a
redefinition of property rights and more vigorous government regulation of the economy.
Tugwellís Industrial Discipline and the Governmental Arts appeared in 1933. The thread
that bound these several treatises together in a common intellectual lineage was the
argument summarized in Van Hiseís title: that concentration of economic power in huge
industrial enterprises was a natural and beneficial feature of modern, advanced societies;
and that these enormous concentrations of private power necessitated the creation of
commensurately powerful public controls, or governmental regulatory bodies. Berle and
Tugwell carried Van Hiseís thinking a step further when they argued that it was
governmentís right and responsibility not merely to regulate discrete economic sectors
but to orchestrate the economyís various parts according to an overall plan.
Third, these ideological commitments implied hostility to what the Brain Trusters
identified as ìthe Wilson-Brandeis philosophyî of trust-busting, or what Moley mocked
as the quaint belief ìthat if America could once more become a nation of small
proprietors, of corner grocers and smithies under spreading chestnut trees, we should
have solved the problems of American life.î
The Brian Trusters regarded Louis Brandeis as Woodrow Wilsonís ìdark angel,î the
man whose trust-busting advice, Tugwell thought, had mischievously derailed the early
twentieth-century reform movement and stalled the development of appropriate industrial
policies for nearly two decades. ...

P. 126 Conspicuous among the conservative voices heard in these weeks was that
of Bernard Baruch, head of the War Industries Board in Woodrow Wilsonís
government and the consumate Democratic Party insider. A fabulously wealthy
Wall Street speculator, Baruch lavished money on Democrats whom he deemed
sympathetic to his own big-business outlook. He was said to have contributed some
$200,000 to the 1932 campaign; Roosevelt thought that he ìownedî at least sixty
congressmen. His advice to FDR was Spartan in its stark simplicity: ìBalance the
budgets. Stop spending money we havenít got. Sacrifice for frugality and revenue.
Cut governmetn spending - cut it as rations are cut in a siege. Tax - tax everybody
for everything.î

Pp. 177 - 180 Recovery remained maddeningly elusive. ìBalanceî still seemed the
key. Following the Hundred Days, Roosevelt counted primarily on two measures to
effect the equilibrium between industry and agriculture thought to be essentail to
economic health. One was an unorthodox and controversial gold-confiscation scheme,
aimed at depreciating the dillar and thus easing debt burdens, particularly for farmers.
The other was an elaborate scheme to micromanage the farm sector through the newly
created Agriculture Adjustment Administration.
For much of 1933 and 1934, however, both monetary and agricultural policy were
overshadowed by the aggressively publicized endeavors of another agency: The National
Recovery Administration. Though it was created virtually as an afterthought on the one
hundredth day of the special congressional session that ended on June 16, 1933, the NRA
almost instantly emerged as the signature New Deal creation. ìIn some peopleís minds,î
Frances Perkins later observed, ìthe New Deal and the NRA were almost the same
The NRA owed much of its towering profile in the public mind to the extravagfantly
colorful personality of its chief, Hugh S. Johnson. Raised in frontier Oaklahoma,
Johnson was fifty-one years old in 1933, a West Point graduate who rose to the rank of
brigadier general before resigning in 1919 to pursue a business career. His seamed and
jowly face floridly testified to the rigors of the professional soldiersís life as well as the
ravages of drink. Melodramatic in his termperament, mercurial in his moods, ingeniously
profane in his speech, Johnson coujld weep at the opera, vilify his enemies, chew out his
underlings, and rhapsodize about the virtues of NRA with equal flamboyance. On
accepting his appointment in June 1933 he declared: ìIt will be red fire at first and dead
cats afterwardî - one of the printable specimens of his sometimes mystifyingly inventive
..... His model was the War Industries Board (WIB) of 1917-1918, chaired by his idol
and business associate Bernard Baruch. Johnson himself had served as director of the
WIBís Purchase and Supply Branch, representing the military purchasing bureaus to the
various commodity sections of the WIB. Frankin Roosevelt had also conjured the World
War experience in announcing the NRAís birth on June 16. ìI had part in the great
cooperation of 1917 and 1918,î the president declared, and he called on the country to
recollect the war crisis and the spirti of national unity it evoked. ìMust we go on in
many groping, disorganized separate units to defeat,î the president asked,. Extending the
military metaphor, ìor shall be move as one great team to victory.?î
But if the NRA was patterned on the War Industries Board, a crucial element was
missing: the war. To be sure, a psychological sense of crisis prevailed in 1933 that was
comparable to the emergency atmosphere of 1917; the difference was not mood but
money. The federal government had borrowed over $21 billion dolalrs in just two years
to fight World War I, a figure that exceeded the sum of New Deal deficits from 1933
down to the eve of World War II. The National Industrial Recovery Act that established
the NRA had also authjorized the Public Works Administration to borrow $3.3 billion for
pump-priming expenditures to infuse new purchasing power into the economy. NRA and
PWA were to be like two lungs, each necessary for breathing life into the moribund
industrial sector. But as Herbert Hoover had discovered, it took time, lots of it, to start
up construction projects of any significant scale - time for site surveys, architectural
designs, and the engineering studies to be completed before actual construction could
start. ....
If Johnson, the would-be maste economic organist, found himself seated at a
magnificent musical instrument that lacked wind-box or bellows, he nevertheless
proceeded to bang away at the keyboard of the NRA with missionary zeal and maniacal
energy. There was no truer believer in the philosophy of industrial coordination that
NRA was charged with implementing. ìI regard NRA as a holy thing,î he said. He
credited his mentor, Bernard Baruch, with the best formulation of the NRAís economic
creed. ìThe government has fostered our over-capacitated industrial combinations, and
even encouraged these combinations to increase production,î Baruch explained to a
Brookings Institution gathering in 1933.
ìBut it seems public lunacy to decree unlimited operation of a system which
periodically disgorges indigestibel masses of unconsummable products. In todayís
desperate struggle for the scant remaining business, cost and price have become such
factors that, in the unstable fringes which surround each industry, a few operations have
taken the last dangerous step in economic retrogression - the attainment of low costs by
the degradation of labor standards .... Lowering wages - lower costs - lower prices - and
the whole vicious cycle goes on.î
The NRA, in Baruchís and Johnsonís view, could arrest thei cycle by governmentsponsored
agreements to curb ruinous overproduction, allocate production quotas, and
stabilize wages. The last item was particularly important. If there was any defensible
economic logic in NRA at all, it consisted in the idea that recovery could not come about
so long as shrinking payrolls continued to leach purchasing power out of the ailing
The essence of Baruchís and Johnsonís thinking resided in their shared hostility to
competition. ìMurderous doctrine of savage and wolfish competition,î Johnson called it,
ìlooking to dog-eat-dog and devil take the hindmost,î had impelled even humane and
fair-minded employers to slash wages and lay off workers by the millions. In contrast,
Johnson intoned, ìthe very heart of the New Deal is the principle of concerted action in
industry and agriculture under government supervision.î

John Pearson, The Private Lives of Winston Churchill (New York: Simon &
Schuster, 1991)
p.268 - 270 The letter [daughter] Sarah had written Clementine had been carefully
worded to appeal to her heart. ìPlease donít be worried - please donít be sad. I will keep
you fully informed of my whereabouts and plans. ... My love to you, darling Mummy.î
She even added a P.S. begging Clemintine to use her calming influence upon her
husband. Please make Papa understand.î
However, once the elopement was splashed across the papers, there was no chance
of Churchill understanding. The battle was joined.
Just as Sarah was steaming off aboard the S.S. Bremen with the scandal in the daily
papers, a far greater scandal was bout to burst. King George V had died in January
1936, and had been succeeded by his son Edward, who was King but had not yet been
crowned. That fall the love affair between Edward VIII of England and his married
mistress Mrs. Wallis Simpson of Baltimore, Maryland, was on the point of turning from
an open society secret into the gravest crisis to afflict the monarcy since the far-off days
of George IV. ...
There was in fact some striking similarities between the royal love affair and
Sarahís: both involved unmarried adults bent on union with twice-married foreigners
who themselves were in the throes of divorce; both marriages, in different ways,
appeared unsuitable, and in both Churchill felt impelled to intervene. What is facinating
is the extraordinary differences in his behavior toward his daughter and his King.
When the story broke in the Express, Churchill was still in France, but he promptluy
ordered Randolph, of all people, to Southampton in his place, sent him a first-class ticket
on the Queen Mary, and told him to bring his sister to her senses and safely home.
......As the Queen Mary docked, he was met by his anxious-looking sister and half the
press corps in New York.
ìIím here to take Sarah home. It simply wonít do,î he blustered.
ìBut does she want to go?î somebody asked.
ìThat makes no difference. Sarahís too young to know her own mind.î
But Sarah emphatically did know her mind - and Randolph returned to England
empty-handed. This did little to affect the resolution of his father, who had now returned
to Chartwell from the fortresses of France; the light of battle in his eye, Churchill was set
to fight this homegrown skirmish to its bitter end.
Through his old New York friend the financier Bernard Baruch, who had been
in touch with Sarah, highly paid lawyers were secretly engaged to set legal barriers
against the marriage, and private detectives started dredging up anything
unpleasant they could find in Vic Oliverís past. Sarahís appeals by telephone to
Clementine - and to her fatherís deeply sentimental nature - made no difference.
Roy Jenkins, Churchill (New York: Farrar, Straus and Giroux, 2001)
p. Neither this nor a potentially highly profitable two-month American lecture tour,
which he was negotiating for the autumn, was sufficient to offset a second series of
devastating New York stock exchange losses wich the recession of 1938 had just cost
Churchill. Stocks which he had bought for over ,18,000 had fallen to a value of barely
,5,700, a loss in modern terms of about ,375,000. In spite of what should have been
expert advice from Bernard Baruch and others, Churchill was a singularly unfortunate
Wall Street speculator.
These losses made him take the grave step of putting Chartwell definitely (as it
appeared) on the market. .....
Happily he was once again spared the trauma. Another ìwhite knightî came over the
horizon. He was Sir Henery Strakosch, like so many of both the good and bad figures of
the first half of the twentieth century, an Anglo_south African financier. He was a near
contemporary of Churchillís who had established himself many years before as a banker
and as a wquiet public figure (member of a Royal Commission in the 1920's , adviser to
several international conferences) and knighted as early as 1921, without any apparent
intervention from Churchill. Later he was the chairman of the Economist .
In 1938, building upon an acquaintanceship with Churchill based mainly on supplying
him by correspondence with detailed and authoritative facts about the effect of
rearmament upon the German economy, and activated, it appears, by no motives beyond
a firm anti-Nazism and personal admiration, he saved Chartwell for Churchill.
Skakosch did this indirectly and in a somewhat complicated way. He arranged
through Brenden Bracken that he would taek over all of Churchillís American stocks at
the price Churchill had originally paid for them (which was nearly three times their
current value) and hold them without risk to Churchill for at least three years, with the
right to make switches and paying Churchill interest at the rate of about ,800 a year.
What happened at the end of three years is not recorded. Skrakosch had recouped some
of the losses which he had voluntarily accepted. By the Spring of 1941 not only was the
main house at Chartwell closed, Churchjill Prime Minister and Britainís position, before
the entry into the war of either the Soviet Union or the United States, still semi-desperate,
but British-owned American assets were (with compensation) requisitioned. IN 1938,
however, Strakoschís intervention was immensely beneficial to Churchill. Chartwell was
again withdrawn from the market.

P. 543 Throughout the late spring and summer of 1939 Churchill was torn by
conflicting desires and thoughts. First he believed that the government had at last
accepted the policy which he had been urgin for several years. Bracken, always the
faithful mouthjpiece, informed Bernard Baruch on 18 April: ìWinston has won his long
fight. Our government are now adopting the policy that he advised three years ago, and
Churchill himself defined this policy (to Lord Lytton) as ëa Grand Alliance on the basis
of the Covenant of the League......


Freidel, Frank, Franklin D. Roosevelt: A Rendevous with Destiny (Boston: Little
Brown and Company, 1990)

p. 192 Roosevelt [in January 1936] faced the prospect of a sharp decline in farm prices,
something that could be fatal to him in the election. Several weeks earlier at Warm
Springs, theinfluential Bernard Baruch had impressed him by remarking that if he could
keep commodity prices up that would do more than anything else to reelect him. The
basic question was what form the new farm program should take. He adapted a relatively
simple device, to modity a little-noticed piece of existing legislation, the Soil
Conservation Act, passed the previous year. Under its authorization, the AAA achieved
the same ends of reducing overproduction by contracting with farmers to take part of
their acreage out of the major crops, ostensibly to improve the fertility of the soil. It was
an effective scheme, and one in keeping with Rooseveltíís fundamental interest in


Encyclopedia of American History (Pleasantville: Reader's Digest Association, Inc., 1975)
1) Nye Committee
2) Neutrality Laws
Nye Committee
Senate Munitions Investigating Committee, chaired by North Dakota Sen. Gerald P. Nye,
1934-1936/ Investigated influence of U.S. munitions makers on U.S. entry into W.W. I
/Major impetus for Neutrality Laws. 1935-37
American isolationism ran at full tide during the mid-1930's as millions of Americans,
remembering the failure of World War I to bring lasting peace in Europe, approved virtually any
legislation that promised to keep the U.S. from being drawn into an overseas conflict. The
findings of the Senate Muntions Investigating Committee (better known as the Nye Committee,
after its chairman, North Dakota Senator Gerald P. Nye) did much to reinforce isolationist views.
Established in April, 1934 to look into rumored abuses by the Munitions Industry during the pre-
World War One period, the Nye Committee held almost two years of headline-producing hearings
that offered dramatic proof that many arms manufacturers had made unconscionably high profits
out of wartime carnage and that some had sought to tilt national policy toward aiding the Allies.
But the Nye hearing produced evidence that was not conclusive in showing that these so-called
merchants of death had unduly influenced President Woodrow Wilson or that the interests of
mysterious "international bankers," lay behind U.S. entry into the war. Nonetheless, the Nye
Committee's findings provided ammunition for those who persuaded Congress to enact the
Neutrality Laws, of 1935, 1936 and 1937 -- designed to preclude any American involvement in a
future global war.
U.S. production of heavy munitions never met demand, and financier Bernard M. Baruch
arranged with Britian's minister of munitions, Winston S. Churchill, that medium and heavy arms
would be supplied by British industry, in an arrangement whereby the British would not take a
profit, but that any and all cost overruns would be paid by the United States.
Long after the fighting ended, the U.S. Senate Munitions Inquiry (the Nye Committee) unearthed
much evidence of war profiteering in the industry. The investigation and its exposes
(add accent mark) strengthened public support of the neutrality laws (1935-39) which prohibited
sales of arms to other nations. But World War II brought the transformation of the U.S. into the
"arsenal of democracy," with virtually every American industry engaged in some way with the war
effort. By the end of the conflict the U.S. had produced some 300,000 airplanes, 86,000 tanks,
71,000 new naval ships and 55 million tons of merchant shipping. Development of nuclear
weapons began with the top-secret Manhattan Project of World War Ii and its awesome
aftermath. Intensive development of nuclear missile systems follow Korean War, beginning in
1953 with the introduction of both the U.S. Army's Nike missile and the Air Force's Matador. Five
years later the first Atlas intercontinental ballistic missile (ICBM) was fired, and the Navy tested its
first Polaris missile, designed to be fired from a submarine. ...
Acts to keep U.S. out of foreign wars; passed, 1935-39/ Banned commerce with
belligerents, abandoning neutral rights/ Provisions eased the permit U.S. aid to Britain and
France at start of W.W. II.
The series of neutrality laws passed between 1935 and 1939 were designed to keep the U.S. out of any
future foreign wars. In large part a response to national disillusionment with World War I, the legislation
was spurred by the findings of the Nye Committee (1934-36), which suggested that U.S. capitalists --
notably munitions makers -- had profited greatly from the horrors of the First World War. If there were not
profits to be made from war, the proponents of the neutrality laws reasoned, thenthe U.S. would not be
drawn into foreign entanglements. Further, if the defense of Neutral Rights would lead the nations into
war, as was the case in World War I, then neutral rights should be abandoned.
The first act was passed after Italy attacked Ethiopia in 1935, in 1935, and new laws followed in 1937 and
1939 with the onset of the Spanish Civil War and World War II. The acts prohibited the shipping of arms
or the granting of loans or credits to belligerents; barred U.S. citizens or vessels from entering designated
combat areas; forbade the arming of merchant ships; and empowered the President to require of transfer of
title and cash payment before the export of any goods to a warring nation.
Critics of the legislation, including President Franklin D. Roosevelt, argued that the acts ecouraged
aggression by failing to distinguish between attacker and attacked. As the Nazis swept across Europe, the
provisions of the 1939 act were eased to permit the sale of arms and munitions to England and France, first
on a "cash and carry" basis, then on credit. American vessels were eventually permitted to enter combat
areas and merchant vessels were armed. In early 1941 the Lend-Lease Act was passed, permitting the
transfer of U.S. weapons food and equipment to the Allies with several naval engagements against German
submarines -- a long step toward American entry into the war later in the year.


Robert A. Divine, The Reluctant Belligerent; American Entry into World War II (New
York: John Wiley & Sons, Inc., 1965)

pp. 34-35
The passage of the Spanish arms embargo was the prelude to full scale Congressional
aciton on neutrality legislation in 1937. The original act, extended in 1936, was due to
expire in 1937. The original act, extended in 1936, was due to expire on May 1, 1937.
Congress had only four months to arrive at a final decision on the complex issues it had
dodged in the last session. The basic goal, keeping the nation out of any major European
war that might occur, had not changed, but there were still a bewildering variety of
solutions being advocated inside and outside of Congress. The basic features of
neutrality adopted in 1935 and 1936 - ht impartial arms embargo, the ban on travel, the
prohibition of loans to belligerent governments - were not in question. The debatable
issue was to what extent the nation was willing to sacrifice its export trade in goods other
than arms if war came to Europe. By early 1937 the United States was slowly climbing
out of the depression and was looking forward to complete economic recovery. The task
confronting Congress was to frame a neutrality act that would insure peace without
endangering prosperity.
It was Bernard M. Baruch, the financier and confidant of presidents, who came up with
the cash-and-carry formula to keep the United State neutral without sacrificing the profits
of foreign trade. In magazine articles in 1935 and 1936 Baruch argued that it was the
shipment of goods to belligerents, not the sale, that involved risk to the nation.
Therefore, he suggested the cash-and-carry principle - ìWe sell to any belligerent
anything except lethal weapons, but the terms are ëcash on the barrel-head and come and
get it.íî [Bernard Baruch, ìNeutrality,î Current History, XLIV (June 1936), 43.]
Baruchís ingenious plan was designed to avoid repetition of the incidents that had let to
the war in 1917. When American goods were sold to a belligerent, title to the exports
would pass immediately into the hands of ht epurchaser, who would not be permitted to
transport them in American ships. By keeping American ships, goods, and citizens off
the high seas in time of war, Baruch hoped to guarantee the continuation of American
foreign trade without the risk of war. His formula was technically neutral, but it would
always operate in favor of the belligerent with large cash reserves and control of the sea.
But this limitation did not bother most Americans, who desired a policy where nothing
was ventured and a great deal could be gained.
The cash-and-carry scheme won the favor of both the administration and the advocates
of strict neutrality. Roosevelt liked the plan because it worked out in favor of England
and France, the nations with sea power, and against Germany. When Senator Pittman
introduced a comprehensive neutrality bill in January 1937, based on cash-and-carry
principle, the administration endorsed it and had a similar measure introduced in the
House. Senator Nye had no objections to the Beruch plan. He preferred a total embargo
on all trade with belligerents, but he realized that such a measure could not be passed and
thus he was willing to accept cash-and-carry as a reasonable compromise. However, Nye
and others who shared his views insisted that the Pittman bill contained too many
provisions granting discretionary power to the President. They pressed for amendments
to the administration measure which would compel the President to impose automatic
restrictions on American trade in time of war. The conflict between discretionary and
mandatory features dominated the debate in Congress.


William Manchester, Alone 1932-1940, loc. cit.

P. 419 Chamberlain believed war ministers unnecessary because he remained
convinced that he had brought Englishmen peace in their time, and this became
clear as debate over establishment of a ministry of supply - first proposed by
Churchill three years earlier, on April 23, 1936 - approached its climax. Without
such a minister, an economic czar empowered to mobilize British industry and provide a
national arsenal, future recruits would lack rifles, even uniforms. It was no longer
enough for a nation to spring to arms. Artillery, tanks, and warplanes, decisive in modern
war, must also be there. ...
To Churchill the need for the new ministry was compelling. That same week he had
risen in the House of Commons to propose an amendment calling for its immediate
establishment: .... The rapid production of munitions, he declared, should have begun
long ago, and on a scale immensely greater than anything the War Office now
contemplated. HMGís reply was that a ministry would seriously dislocate British
industry, that it was wiser ìto trust to cooperation than to compulsion.î The House was
still Chamberlainís and Winstonís rebuff was stunning. Not 50 MPs. But just two -
Bracken and Macmillan - joined him. Berlin rejoiced. ëGREAT DEFEAT OF
CHURCHILL!î read one German headline. Another trumpeted: ìCHURCHILLíS

As late as March 2, 1939, the prime ministerís own secretary for war, Leslie
Hore-Belisha, told him that if the government was serious about defending the
country, something had to be done to arm and equip fighting men, and Britainís
industrial titans would listen to no one without a seat at the cabinet table. Wearily
the P.M. cut him off in mid-argument.
Yet the Ministry of Supply had become inevitable , and presently even
Chamberlain knew it. In April 1939, after the German occupation of Prague, his
panel of industrialists - the men he admired most and had sought to shield from
bureaucracy - reported that their chief recommendation, an urgent question to be
met squarely ìat the first possible opportunity,î was ìthe establishment of a
Ministry of Supply.î Brendan Bracken wrote Bernard Baruch: ìWinston has won
his long fight. . . . No public man of our time has shown more foresight, and I believe
that his long, lonely struggle . . . will prove to be the best chapter in his crowded


Robert E. Sherwood, Roosevelt and Hopkins; An Intimate History (New York:
Harper & Brothers, 1948)

p. 113 ...Near fatal illness drained him of all personal ambition and converted him into
the selfless individual who rendered such great service to the President during the war

Early in March 1939, Hopkins was still feeling worn out and spent from that ìtouch of
fluî and he was glad to accept an invitation from Bernard Baruch to spend a few days at
Hobcaw Barony near Georgetown, South Carolina. Baruchís huge plantation was near
the coast, at the confluence of the Pee Dee and Waccamaw Rivers, a beautiful and largely
wild place, full of live oaks, Spanish moss, magnolias, camellias, azaleas, many kinds of
game and fish - and the serene wisdom, the overwhelming prestige and unshakable selfconfidence
of its owner. In the cultivation of his own political garden, Hopkins could do
no better than seek out the advice and counsel (and, above all, the support) of Bernard
Baruch, who held title of Elder Statesman Number One longer than any man had since
Thomas Jefferson.

But when Hopkins visited Hobcaw, Baruch was not inclined to give much
attention to political prospects or business conditions at home. His concern was
with the gathering calamity abroad. He scoffed at a statement made on March 10
by Neville Chamberlain that ìthe outlook in international affairs is tranquil.î
Baruch agreed passionately with his friend, Winston Churchill, who had told him,
ìWar is coming very soon. We will be in it and you [the United States] will be in it.
You [Baruch] will be running the show over there , but I will be on the sidelines
over here.î (That last prophecy proved inaccurate.) Baruch talked to Hopkins of the
realities of the situation as he had seen them in Europe and reported them privately to
Roosevelt the previous year; he talked of the amount of misinformation that was being
collected and transmitted by our official representatives in Europe; he talked of the
woeful state of our unpreparedness and of the measures that had been taken to meet
production problems in the First World War. Years later, Baruch said: ìI think it took
Harry a long time to realize how greatly we were involved in Europe and Asia - but once
he did realize it, he was all-out for total effort.î



James MacGregor Burns, Roosevelt; The Soldier of Freedom 1940-45 (New York:
Harcourt Brace Jovanovich, Inc., 1970)

The President seemed to retain his usual debonair optimism about the naitonís capactiy to
produce in the pinch. A crucial potential bottleneck was steel. Late in 1940 he asked
Stettinius to assess steel capacity; when Stettiniusís man Gano Dunn, working with the
steel industry predicted a surplus of ten million tons of steel in 1942, Roosevelt
canonized the report by devoting a whole press conference to it and accepting its
findings. Dunn had to issue a more pessimistic report withing five weeks.
Watching these happenings through skeptical pince-nez was a veteran of
World War I mobilization struggles. Bernard Baruch had long enjoyed a friendly
relation with the President, who paid the old Wilsonian every compliment except
following his advice. For months Baruchís advice had been simple and flat:
centralize all controls - allocations, priorities, price-fixing - in one agency, with one
boss. Many editorial writers agreed; so did many high administration officials.
Simson too, had urged this move, on the ground that someone clearly in charge
would feel the ìsting of responsibility.î Morgenthau wanted his chief to set up a
Cabinet-level department of supply to run the whole mobilization program. Everyone
seemed to want a czar - especially if he himself could be the czar.
Roosevelt would have none of it. It was impossible to find any one ìCzarî or
ìPoohbahî or ìAhkoond of Swat,î he had said in explaining the OPM to reporters, and
only amateurs thought otherwise. Under the Constitution only one man - the President -
could be in charge. But as spring 1941 approached, it was clear that the President, with
his other multifarious responsibilities, could not be the co-ordinating head of defense
production. Yet he would not budge. Clearly he had deeper reasons - reasons distilled
from his diverse tactics of moving step by step, avoiding committments to any one man
or program, letting his subordinates fell less the sting of responsibility than the goad of
competition, thwarting one man from getting too much control, preventing himself from
becoming a prisoner of his own machinery, and above all, keeping choices wide in a
world full of snares and surprises ..... Pp. 52-53
Baruch complained that Hopkins was like a jealous woman in keeping others away from
Roosevelt; everyone else had to ìplay him in a triangle.î P. 60
[Roosevelt] corresponded and/or talked with an amazing variety of people .....Bernard
Baruch, of Lafayette Park P.62


Freidel, Frank, Franklin D. Roosevelt: A Rendevous with Destiny (Boston: Little
Brown and Company, 1990)

p. 391 After meeting with Churchill, Roosevelt moved the United States cautiously,
step-by-step, into undeclared naval war against the Germans in the North Atlantic.
At the same time the embargo against Japan was quietly heightening the likelihood
o hostilities in the Pacific. Over several months the nation moved to the brink of
global war. ...Through much of the summer he had been engaged in a crucial and
difficult struggle with the isolationist bloc in Congress to obtain authorization to
keep draftees and others on active service longer than twelve months. ...On the day
after the Atlantic conference ended, Roosevelt was victorious, but only by a single
vote, 203 to 202, in theHouse of Representatives. Draft extension was deeply
unpopular, and polls both before and after the Atlantic conference indicated that
about 75 percent of the American people wanted to stay out of war with Germany
and Japan. Yet Roosevelt seemed to be carrying 60 percent with him in his gradual
moves toward undeclared conflict. Publication of the poll results may in itself have
created something of a "bandwagon effect," intensifying support for him. With opinion
behind him, Roosevelt could grapple through the next month with problems of increasing
defense production. Lord Beaverbrook, the British minister of supply, came to
Washington after the conference and emphasized that American production must
accelerate enormously. Roosevelt, resisting strong pressure to appoint a production
czar -- Baruch or someone like him -- to speed sluggish armament programs, was
receptive to an armed forces proposal urging a threefold increase in production. He
asked Stimson, Knox, and Hopkins to provide him with specifications.


Robert E. Sherwood, Roosevelt and Hopkins; An Intimate History (New York:
Harper & Brothers, 1948)

p. 280 Actually, Lend Lease in itself provided no overwhelming difficulties in the
beginning. ... There were seven billion dollars to spend but the weapons to buy were not
coming off the assembly lines fast enough nor were there enough ships to carry them
overseas even when they did. This was a time when one of the most important words in
the American language was ìbottleneck,î and the most formidable bottleneck of all was
created by the ancient principle that you cannot eat your cake and have it: the nation
could not meet the reality of wartime demands for production while maintaining the
illusion that it was still ìat peace.î There existed an Industrial Mobilization Plan
which, in the words of Bernard M. Baruch, its principle author, was designed to
enable the country ìto pass from a peace to a war status with a minimum of
confusion, waste and loss.î But - the thinking behind this and all other plans before
1940 was based on the assumption that a nation passed from a peace status to a war
status as quickly and as decisively as one passes from one room to another. No
provision whatsoever had beem made for the maze of corridors, blind alleys and
series of antechambers - labeled ìPhony War,î ìcash and carry,î more than mere
words,î ìLend Lease,î etc. - which the United States was compelled for the first
time in its own or any other nationís history to traverse between September 1, 1939,
and December 7, 1941.



Gerhard L. Weinberg, A World at Arms; A Global History of World War II
(Cambridge: Cambridge University Press, 1994) p. 729n

In a letter of July 9, 1941, Bernard Baruch had warned Roosevelt not to trust
Keynes, referring to very bad experiences at the Paris Peace Conference of 1919. In
his reply of July 11, the President, who was generally not inclined to put his
thoughts on paper, wrote, ìI did not have those Paris Peace Conference experiences
with the ìgentî but from much more recent contacts, I am inclined wholly to
agree.î FDRL, PSF Box 177, Bernard Baruch.

The Secret Diary of Harold L. Ickes, loc. cit.

P. 181 -182 I carried to the President a suggestion from Ben Cohen that instead of
setting up something in the nature of a War Insudsries Board of the last war, every
Cabinet officer be left free to select business advisers of his own who would work with
him. This would make these business advisers subservient to the government instead of
the Governmentís being a tail to the businessmanís kite. They would be relatively
ineffective except as advisers because they would not be working together in one group.
The President said that he had to do something to take care of Bernie Baruch, who was to
have lunch with him on Saturday but that he didnít know how he was going to handle
him. The newspapers representing big business have already begun to pound for
ìcompetent, efficientî businessmen being called to Washington and given charge of the
preparedness program. This pressure is going to be terrific and I pointed out to the
President that it was important to get somethign started while there was still time.
Freidel, Frank, Franklin D. Roosevelt: A Rendevous with Destiny (Boston: Little
Brown and Company, 1990)

Pp. 418 , 421-422 [After the Japanese attack on Pearl Harbor] ".... The clashes of the
jousting "war lords of Washington" were spectacular. So too were the related clashes in
Congress, the press, and radio. The struggle was over the drive to meet production goals,
and it also reflected the fundamental schism over the nature of the war. Was it to be
fought to restore the old order, or to attain the idealistic future Rooseveltfrom time to
time proclaimed? ... Roosevelt, who symbolized the issue as the advocate of a better
world, sought nevertheless to bridge the schism by insisting that the immediate
overriding concern of the United States was to win the war ... The specifics of the
postwar world could be thrashed out later. The urgent and instant need was to raise
production as high as possible. Already Roosevelt had proposed figures at what the army
and the Office of Production Management regarded as the upper limit, a total of $55
billion. Lord Beaverbrook, in charge of British production, sat with him on Christmas
night, 1941, until one in the morning, urging still larger output. He talked, Donald
Nelson, in charge of supply allocations, remembers, "in what seemed at the time to be
fantastic figures." Roosevelt accepted them at once, 45,000 tanks and 60,000 planes --
10,000 more than the projection of a year and a half before. The increased output,
Roosevelt told his administrators, must come through curtailing civilian production. Only
35 percent of the steel was going into war use, compared with 75 percent in Britain; he
wanted to take 60 percent of steel, and 50 percent of all industrial capactiy. To achieve
top production, Roosevelt needed to replace the makeshift, inefficient war agencies
with new, more effective ones. A consensus was forming that the nation needed a
single director to serve as Baruch had during the First World War, but possessing
greater power than then. For some days Roosevelt clung to the concept of three
directors, this dispersing power. He was wary and manipulative toward the
prestigious, conservative Baruch, who had headed the War Industries Board under
President Wilson. Throughout World War II, Baruch exercised influence from the
Carlton Hotel and a park bench across Pennsylvania Avenue from the White House.
Roosevelt courted Baruch enough to keep him out of the opposition, and followed
similar tactics with the Republican Willkie. .... ...Roosevelt did establish the War
Production Board (WPB) with a single director, Donald Nelson, an amiable Democrat
and a Sears, Roebuck executive. Nelson, as Roosevelt wished, was sympathetic toward
New Dealers and tried to aid some business, but he could not decide how much steel and
other scarce materials the military should receive compared with the civilian economy
and make his decisionsstick. It was with the Army that Nelsoníís troubles gradually
intensified, and repeatedly more serious conflicts came before the President. Rosenman
witnessed Roosevelt spending hours and days deciding disputes between the WPB and
the army. ... ...With a strong allocation plan and two decisive lieutenants, Nelson by
September 1942, could run the War Production Board more effectively. He brought
in Eberstadt and Charles E. Wilson, president of General Electric. It was not an
entirely effective system, but despite the inevitable minor problems and strident conflicts,
Roosevelt finally had a basic production in place. By 1943 it was so successful that the
focus could turn toward questions of cutbacks and even limited reconversion to civilian
needs. Roosevelt did little more than preside over these changes and insist that the
quarrels not become too public and disruptive. The effective innovations had to come
from below.

When the quarreling became too strident, between the army and the War
Production Board, Roosevelt tried without openly showing his hand, to quiet
difficulties in the WPB between Nelsoníís two deputies. Wilson had threatened to
resign unless he received some of Eberstadtíís powers. Nelson capitulated. The
problem the secretaries and under secretaries of the navy and war felt, was with
Nelson; and together with Byrnes, Hopkins, and Ickes they pressed Roosevelt to
appoint Baruch head of the WPB. Byrnes in February 1943 presented such strong
arguments that the appointment would quiet Congress and win the plaudits of the press,
that Roosevelt agreed and signed a letter making the offer. Roosevelt became swayed by
the misgivings of Director of the Budget Smith that Baruch was too elderly and
perhaps was tied to one of the factions in the dispute. There followed on February
16, 1943 a bizarre episode. At breakfast an assistant informed Nelson that a letter
had been drawn up for Rooseveltíís signature appointing Baruch chairman of the
WPB, and Eberstadt his deputy. The army and navy secretaries and under
secretaries were to meet with Roosevelt at two that afternoon, together with Byrnes,
to urge Roosevelt to sign the letter. Nelson telephoned Stimson who confirmed the
planned meeting. Next he tried, without success, to reach the president, but failed.
He did reach on of the White House staff, who suggested"
"The President expects you to take things in your own hands. . . . This whole row
seems to be centering around Eberstadt -- yet youííve been keeping Eberstadt in
your organization all this time. Do something about that, and then see if the Boss
doesníít invite you in for a chat." Nelson immediately requested Eberstadtís
resignation and designated Wilson as his chief deputy. Rooseveltís meeting with
Stimson and Knox did not take place. ... Later that afternoon Roosevelt told Nelson
he was satisfied with the job he was doing, yet for some days still wavered.
Baruchíís medical tests were negative. He returned to Washington, and expecting
the appointment went to the White House. Roosevelt engaged him in conversation
on numerous topics, but the WPB was not among them. The president changed his
mind. ... .... One day early in the war, Roosevelt, nursing a head cold, lunched with
Baruch, and gave him a feeling of closeness. Roosevelt remarked, "You think I am too
soft." Baruch did not deny it. Yet what Baruch, Stimson and others saw as softness
was Rooseveltíís reluctance to use a bludgeon ... The failure of Baruch to head the
WPB and the sudden departure of Eberstadt were cases in point.


Bruce M. Russet, ìFDR- Unnecessary Intervention and Deception,î in Warren F.
Kimball ed., Franklin D. Roosevelt and the World Crisis, 1937-1945 (Lexington: C. D.
Heath and Company, 1973

p. 36 I have no quarrel with the decisions for rearmament or to institute Selective
Service with revision of the Neutrality Act to permit ìcash and carryî by belligerents
(effectively by allies only), with the destroyers-for-bases exchange, with Lend-Lease, or
with the decision to convoy American vessels as far as Iceland. Even the famous ìshoot-
on-sightî order, even as interpreted to allow American destroyers to seek out the sight of
U-boats, seems necessary if convoys were to be protected on the first state of the critical
lifeline to Britain. ...
Only two major exceptions to the content of American policy in 1941 appear worth
registering. One is the vote by Congress in mid-Novermber 1941, at the Presidentís
behest, removing nearly all the remaining restrictions of the Neutrality Act. It permitted
American ships to carry supplies all the way across the Atlantic, instead of merely as far
as Iceland. ...
The other and more serious exception I take is with President Rooseveltís policy. It
was neither necessary nor desirable for him to have insisted on a Japanese withdrawal
from China. ...



Harold L. Ickes, The Secret Diary of Harold Ickes, (New York: Simon and Schuster,
Inc., 1954)

P. 607
Friday, September 5, 1941
Bernie Baruch tried to get through to me after the new mobilization order was issued and
I called him at Saratoga Springs at a designated hour last Friday. I told him that it
looked as if he had been superseded by Rosenman and he admitted the fact. He also
agreed that Harry Hopkins was now in effect Assistant President. He didnít make any
reproaches but I suspect that he did not like the summary but characteristic way in which
he also had been pushed aside. After all, Rosenman hasnít had the wild experience in
these matters that Bernie has. Bernier has had more of it than any other man in the
country. Moreover, so far as I know, Rosenman has never had any experience in
administration. It looks to me as if he hadtaken the Baruch proposal and pared and
whittled to put it into some form that would be satisfactory to Harry Hopkins. At any
rate, this is my guess. It may have looked for a time as if I would come through merely
by force of circumstances as an important figure in the defense program. But Harry has
seen to it that I havenít.
Bernie said that he wanted to see me as soon as I got back to Washington and before I
went up to testify before any of the Congressional committees. He wants me to show
that, with respect to oil and aluminum, I was trying to anticipate the needs instead of
waiting for the needs to come into being, and to cry out in such loud tones that no one
could ignore them.
I suspect that Bernie thinks that he can get some satisfaction out of the kicks that I can
administer to the pants of OPM. I certainly am willing to do what I can along this line. I
think that the President has given Bernie a particularly rotten deal. He called on him for
help, which was cheerfully and loyally rendered. But the President apparently could not
go along with Bernie and, at the same time, keep certain people, including myself, in
their places. SO he called upon Rosenman to do the kind of job that he and Harry
wanted. .......
P. 614 -616
September 2_, 1941
..... I think that Bernie has undoubtedly been hurt by the Presidentís conduct toward
him. However this was not the first occasion that the President has ridden over him
roughshod. In 1939 Bernie volunteered to set up something in the way of a war
industries board and the President turned him down. Subsequently Lousi Johnson,
Assistant Secretary of War, set up the Stettinius boear, and again Bernie was hurt.
However, I have never known a better soldier. He feels keenly that we have been very
negligent in not putting a ceiling over all prices as well as a ceiling over profits and
wages. He felt that he had to go before the Currency Committee yesterday to make his
position clear, and he made an excellent and convincing statement. He remarked on
Wednesday that he wasnít going to attack the President or be bitter but that when he got
through with the pending bill, there wouldnít be anything left of it except the title. I
think that he as done a brave and much-needed job. A man like Baruch can go on the
witness stand and insist that all profits really ought to be taxed out, but a more radical
person would only arouse the feeling that he was attacking business as such.
Bernie told me about his last talk with the President, following which he had
announced from the White House steps that the seven-man board was a faltering step in
the right direction and that he was going to go after the price-fixing bill. Of course,
Bernie shouldnít have announced this from the White House steps, but I can understand
his very natural reaction after the President had done to him what he had in taking all of
his work and turning it over to Sam Rosenman to play with and distort.
Baruch told me again quite definitely that the President had specifically promised to
put his plan of organization into effect. Baruch feels just as strongly as ever that the
situation calls for one man. He doesnít believe that seven men with equal authority will
be able to do the job effectively. He had even gotten so far with the President as to
suggest two men and the President had agreed to one of them, namely Bill Dougals. I
think that the other one was Under Secretary of War Patterson. The President told Bernie
that he wanted him to be present when he talked with Douglas, but Bernie thought that
this would not be fitting and dissuaded the President. But, according to Bernie, the
President actually called Bill Douglas on the long-distance telephone, apparently with a
view to making a preliminary offer or at least arranging for an interview. Then the
President, without more ado, announced the seven-man board. What happened during
their telephone conversation or what caused the President to change his mind at a stage
like that, Bernie does not know. Bill Douglas got back to Washington on Thursday night
and my plan is to see him early next week and find out what I can from him.
Bernie also told me of his discussion of me with the President. Bernie had been
pressing me for an appointment as Coordinator of Hard Fuels and Power, as well as of
Petroleum. And as such, he thought that I ought to be in what he called the ìWar
Cabinet.î During the discussion the President asked him whether I would be satisfied
with this or with that. Bernie assured him that I would be satisfied with whatever place
the President gave me and that I would be a good soldier. Apparently the President acted
on this assurance, although he ran some risk in doing so.
Baruch feels that we all have to go along and make the best of the situation.
When he lunched again with me on Thursday, he told me that the only thing to do
was to be patient; that the situation would develop in the long run so that I would
get my chance at the defense program. He didnít convince me, but for the time
being there isnít anything to do except go along. Developments in our relationship
with Japan may put a different face on the situation.
Bill Bullit came in late Wednesday afternood and it was a Bill Bullit in distress. He
had seen the President and had finally learned definitely that there was no place for him
in the preparedness organization. Bill was terribly hurt. He was being game about it and
he told about his interview with the President with a laugh, but it wasnít a merry laugh.
It seems that the President has been stringing Bill ever since he resigned as
Ambassador to France. Bill held himself available because the President insisted that it
was his full intention to call him into the service in some important post. ... After
months of this, Bill finally saw the President on Wednesday to force the issue. He had
begun to suspect that he was being given the run-around. The President told him that he
had wanted to use him but that no position had offered that was commensurate with Billís
standing and abilities.
During their interview, Bill told the President that he understood the situation
perfectly: that Harry Hopkins was responsible for his exclusion. The President
vigorously denied this and said that Harry had nothing to do with it. Bill told him that
four people had related to him incidents in connection with Harry, which proved to him
that it was Harryís doing. The President said: ìYou may say to these people that the
President of the United States says that this is a damned lie.î
I asked Bill, as I had already asked Bernie Baruch, to explain the new defense setup
and particularly to give the reason why Stettinius, who has been a failure in every job he
has held so far, has been moved up to the important post of Administrator of the Lend-
Lease Act. Both were of the opinion that all of these moves had been to protect Harry
Hopkins. They believe that Harry is now, in effect, Assistant President, but his standing
on the Hill is such that the need of someone to front for him has to be recognized.
According to Bernard Baruch, Jimmy Byrnes told the President afte Harry was appointed
Administrator of the first Lend-Lease Act that if the Congress had known that this was to
go to Harry, it would not have voted a nickel. Now the President wants some more
money and he dare not go to Congress and ask for it with Harry Hopkins looming as
Lend-Lease Administrator. So Stettinius has been given that title, but he can be
depended upon to do whatever Harry tells him to do. In other directions Harry is also
protected. In other words, here is a man with tremendous power whom Congress and
even public opinion cannot reach. I must confess it is a very clever arrangement.
Bill Bullitt ruefully remarked to me that it seems that the President had to have
someone near him who was dependent upon him and who was pale and sick and gaunt.
He had had such a person in Louis Howe and now another in Harry Hopkins. Bill
insisted that the two resembled each other physically, being cadaverous and bent and
P. 641 Bernie Baruch was in for luncheon yesterday. The President had sent for him
and he seemed to be in a better frame of mind, although I canít say that at any time he
was particulary downcast. He is really quite philosophical, despite which, however, he
felt, and still feels, the summary way in which the President threw his plan for a
reorganization of the defense agencies into the wastepaper basket and substituted one by
Sam Rosenman. Bernie had told me at our last meeting that he would not ask to see the
President but that, of course, if he were sent for he would respond.
Bernie doesnít think that things are going any better. He was glad that I had been
appointed Hard Fuels Coordinator. He referred again to the fact that the President had
categorically promised to put the Baruch plan into effect and I told him that he neednít
urge the matter again.
P. 649 I saw by the newspapers that Bernie Baruch was to be in Washington to appear
as a witness in support of the price control bill and so I asked him to lunch with me. I
asked Jane too. This was fortunate because just before Baruch came in at twelve fortyfive
ìPaî Watson called me up and said that the President would like to have me lunch
with him. I suppose that some other plan and fallen out and that I was chosen to fill in.
So I had just a few minutes with Baruch before I ad to leave for the White House. He
asked me whether I had been consulted with reference to the coal strike and I told him
No. He assured me again that all I ad to do was to exercise patience and that I would be
brought in before long. ....


James MacGregor Burns, Roosevelt; The Soldier of Freedom 1940-45 (New York:
Harcourt Brace Jovanovich, Inc., 1970)
p. 247 Roosevelt was still being urged to set up an integrated super angency under a
real superczar, as Baruch had proposed long before the war, and he was still resisting. In
the spring of 1942 strategic plans were still open; whether or not Russia could survive the
gathering German offensive was still a burning question. .....
Always there was the frantic demands of Allied Nations for supplies, and no one in
authority in Washington was more sensitive to those demands than Roosevelt. The
pressure from abroad itself was institutionalized; uneasily coexisting with the United
States agencies by this time were a host of international organizations for allocation. At
the ARCADIA Conference Roosevelt and Churchill had set up the Combined
Munitions Assignments Board (MAB) in Washington and London, operating under
the Combined Chiefs of Staff ; other combined boards were established for raw
materials, production, shipping, and food during the first half of 1942.
P. 259 Congress forced the Presidentís hand. Impatient for action, fearful of
nationwide gasoline rationing, impressed by the popular demand for czars who
could break through obstacles, the legislature passed a bill establishing a Rubber
Supply Agency under a director with wide powers. Roosevelt vetoed the measure
arguing that it would frustrate centralized control under the WPB. But recognizing by
now, early August, the need for more drastic action, he announced in his veto
message the appointment of a committee of Conant, Compton, and Baruch,
chairman, to investigate the problem, after Chief Justice Stone had turned down a
similar assignment. ìBecause youíre ëan ever present help in time of troubleí will
you ëdo it againí?î he wrote to Baruch in longhand - and by enlisting the old
promoter of tough remedies, Roosevelt knew he would get a recommendation for
drastic action. So he did : rubber and gas rationing, stepped up synthetic-rubber
programs, and a powerful rubber administrator under the WPB.


_________, Freedom frm Fear, loc.cit.

P. 629 ... the WPB found itself under excruciating pressure as the cockpit where all the
controversies between the various services, between the services and the civilians, and
between competing economic sectors, were bitterly contested.
Roosevelt characteristicaly reacted to the rising pressure on the WPB in October 1942
by creating another mobilization body, the Office of Economic Stabilization, which
officially metamorphosed into the Office of War Mobilization (OWM) in May 1943.
Each was headed in itds turn by former South Carolina senator and Supreme Court
justice James Byrnes. .....
With the Appointment of Byrnes, Roosevelt openly acknowledged the political
dimension of economic mobilization. The crooked timber of humanity, not scarce
critical materials, was now recognized as the principal obstacle to efficient production.
Byrnes was no businessman. He had neither executive experience nor technical
expertise. But he was the consummate political operator.
He had begun his long Washington career as a protege of Pitchfork Ben Tillman, South
Carolinaís infamously racist baron, and he enjoyed the lavish patronage of his sometime
fellow Sough Carolinian, Bernard Baruch, the Democratic Partyís multimillionaire gray



James MacGregor Burns, Roosevelt; The Soldier of Freedom 1940-45 (New York:
Harcourt Brace Jovanovich, Inc., 1970)

p.334 ...The arsenal of democracy, he [Roose
velt] said, was making good, and he hit out
at criticism based on guesswork and malicious falsification. But he remained dissatisfied
with war production during early 1943. ìThe war goes on and on-ì he wrote to
Beaverbrok in March, ìand while I think we are gaining, it is difficult for you and me to
curb our impatience, especially when our military and naval friends keep saying that this
cannot be done and that cannot be done and this time schedule seems so everlastingly
slow to us.î A few weeks later Baruch reported that shipbuilding was going well, escort
vessels improving, high-octane gasoline coming along better, but aircraft production
still lagged. ìWe are making planes but not as many as we should.î


The Secret Diary of Harold Ickes, loc. cit.

p. 438 Bernard M. Baruch came in at three oíclock in the afternoon. It seems that he is
down the first of every week, trying to get the defense outfit straightened out. This he is
doing at the request of the President. According to Baruch, things are in pretty bad shape
with the Defense Commission. He philosophically remarked that it was all that we had to
deal with and that we ought to make the best we could of it . I could see that he was
disturbed by the way many of these people are operating. He told the President that the
situation was even worse than he had suspected.
I think that the President made a mistake in not seeking Baruchís advice earlier, but
Baruch also made a mistake in his first suggestion to the President that, in effect, he bring
back into the government service for this period of emergency not only himself but Hugh
Johnson and George Peek. Perhaps if Baruch had volunteered his own services without
trying to take back with him the other two men who are particularly distasteful to the
President, he might have gotten somewhere. And with Baruch at his elbow, I do not
believe that the President would have made some of the mistakes that he has.



John Gunther, Roosevelt in Retrospect; A Profile in History (New York: Pyramid,
[original ed.: New York: Harbor and Brothers, 1950)

p.153 On campaign trips the Presidentís train ran to sixteen or even eighteen cars; on
the runs between Washington and Hype Park or Warm Springs they averaged eight. ...
The train was, as a rule, broken up after each trip, but early in 1944, it stayed intact for
the month that the President was visiting Mr. Baruchís plantation in South
Carolina; there was no telephone in the house, and the train, parked eight miles
away became his office.
James MacGregor Burns, Roosevelt; The Soldier of Freedom 1940-45 (New York:
Harcourt Brace Jovanovich, Inc., 1970)
p. 339- 340 Changes came by fits and starts. A year after Pearl Harbor, Rooseveltís
defense organization was still a public issue. Appointing czars, shoring up the WPB,
making Byrnes Economic Stabilization Director - these and other steps did not long
satisfy the critics. In Congress the Truman and Migration Committees continued to
call for more centralized authority. A Senate Military Affairs Subcommittee
reported that war mobilization was ìin crisis.î .... the WPB was racked by disputes
among its top officials. In the Senate friends of the President sponsored a bill for a
super-superagency that would take over and boss a dozen war agencies. Byrnes,
struggling with a tide of stabilization problems that cut across bureaucratic empires
and their czars, began to lean toward the idea of an office of war mobilization with
broad powers to direct the whole war effort.
For a moment the President toyed with a move he had long resisted - to reestablish
the WPB as the supreme mobilization agency on the model of the War
Industries Bnoard of World War I. And he even decided to appoint the very man,
Bernard Baruch, who had headed the earlier board and had the presitge, status,
and self-assurance to rebuild and command an agency rivaling the White House in
publicity and power. He must have been sorely disturbed by the state of
mobilization and the conflicts between and within his war agencies - especially the
WPB - to appeal to Baruch. But appeal to him he did, in a letter that frankly
admitted that he was ìcoming back to the elder statesman for assistance.î
Surprised and pleased, Baruch debated whether he should give up his freedom - as
symbolized by his ìofficeî on a Lafayette Park bench - and whether he was
physically up to it. He was on his way to New York City to consult his doctor when,
as luck would have it, he fell ill, and it was a week before he returned to Washington
to tell the President he had decided to accept. Roosevelt, leaning back in his chair
and puffing on an uplifted cigarette, greeted him with his usual geniality.
ìMr. President,î Baruch began, ìIím here to report for duty.î Roosevelt did
not reply; he seemed not even to have heard. Baruch knew something had gone
wrong. The President said: ìLet me tell you about Ibn Saud, Bernie.î He chatted a
bit about the Mid-East. Then he abruptly stopped talking, excused hjimself, and
departed for a Cabinet meeting. He never again, mentioned the WPB post to
Baruch. Swallowing his pride, groping for some explanation, Baruch concluded
that there must have been intervention by Hopkins, who seemed to Baruch full of
suspicion and self-protectiveness that grip men so close to the throne.
Doubtless Hopkins did influence Rooseveltís change of heart, but a far more
important factor also intervened. Both the President and his Economic Stabilization
Director were leaning more and more during early 1943 toward the idea of a mobilization
office directlyunder the President rather than in a vast, independent new agency uner a
new superczar. Byrnes had been working in the east wing for some months and was
already dealing with a variety of problems outside his stabilization duties. He proposed a
new office of war mobilization with wide powers ove war production, allocation and
manpower 9except for men in uniform), that he take on thisbroader role, and that his job
as Economic Stabilizer be passed on to Fred M. Vinson, a former Congressman and an
old friend.
It was not easy for Roosevelt to go along with this plan. The press had already
dubbed Byrnes ìAssistant Presidentî and ìChief of Staffî - terms Roosevelt disliked -
and throughout his presidency he had resisted sharing his powers with any rival person or
office of this sort. On the other hand, he trusted Byrnes. The former Justice was not one
to jump onto a white charger and gallop off with the war effort. ... He preferred to deal
with appeals from clashing agencies rather than to issue plans and command from on
high. He proposed to continue to operate with a tiny staff, headed by Rooseveltís old
friend and adviser Benjamin Cohen. Instead of congealing into a whole new bureaucratic
layer, his office would co-ordinate policy among the existing war agencies. And he
would claim the services of the ablest people -even Baruch, who gamely continued
to advise Byrnes and the White House.
P. 352 For Roosevelt it was a question of power. When critics charged that he would
not make Baruch or some other strong man a superczar because he wanted to hoard his
own authority or feared a rival, they were quite right. Partly it was a matter of
temperament; as a prima donna, Roosevelt had no relish for yielding to spotlight for long.
But mainly it was a matter of prudence, experience, and instinct. The President did not
need to read Machiavellian treatises to know that every delegation of power and sharing
of authority extracted a potential price in the erosion of Presidential purpose, the
narrowing of options, the clouding of the appearance of presidential authority, the threat
to his reputation for being on top.
p. 432 Baruch [ opposed to Rooseveltís National service proposal in 1944] argued that
the best way to mobilize and allocate manpower was by allocating materials; men would
shift to high-priority industries to get jobs. ... His mind set, but tired of the endless
debate, Roosevelt, on returning from Teheran, told Rosenman to draft a proposal for a
national-service bill for his State of the Union address, but not to tell a soul about it.
Rosenman was aghast. Not even tell Buyrnes or McNutt or Stimson or ìBernie,î
men who had been laboring on the problem? No, said his chief, he did not want to argue
about it any more. ìI want it keep right here in the room just between us boys and
Grace.î ...
........ A national service law, [Stimson] told the Congressmen, was a question of
responsibility. ìIT is aimed to extend the principles of democracy and justivce more
evenly throughjout our population. . .î Congress did not see it that way; the bill died in
p. 447 Hopkins was critically ill and out of commission all through the winter and
....Marvin McIntyre was dead [a loyal Roosevelt aid for 20 years -DE].
P. 448- 449 The chief of the warriers was sixty-two and in the winter of 1944 he was
ailing and tired. Days after he had recovered from his post-Teheran flu of January he was
complaining of headaches in the evening. Those in the White House who saw him the
most - especially Anna Beottiger and Grace Tully - became more and more alarmed
about his condition. He seemed strangely tired even in the morning hours; he occasionlly
nodded off during a conversation; once he blanked out halfway through signing his name
to a letter, leaving a long scrawl. Finally Anna spoke to Dr. McIntire. The Admiral, an
ear, nose, and throat specialist, seemed concerned, too, but curiously resistant to talking
with the President. Anna pressed him to speak at least to Eleanor. The upshot was that
the President was persuaded to go, on March 27, 1944, to the United States Medical
Hospital at Bethesda, Maryland, for a check-up. Lieutenant Commander Howard G.
Bruenn, a consultant in cardiology who was in charge of the Electro-Cardiograph
Department, was detailed to examine him. ....
It was Bruenn who was first surprised, then disturbed, and finally shocked as he
conducted the examination and then rushed to check the earlier records. Not only was
Roosevelt tired and gray of face, slightly feverish, able to move only with difficulty and
with breathlessness, and coughing frequently - clearly suffering from bronchitis - but his
basic condition was more serious. Rooseveltís heart, Bruenn found a blowing systolic
murmur. The second aortic sound was loud and booming. Blood pressure was was
186/108, compared with 136/78 in mid-1935, 162/98 two years later, and 188/105 in
early 1941. Since 1941 there had been a significant increase in the size of the cardiac
shadow. The enlargement of the heart, which was mainly of the left ventricle, was
evidently caused by a dilated and tortuous aorta; and the pulmonary vessels were
Bruennís findings were grim: hypertension, hypersensitive heart disease, cardiac
Emergency conferences were held among McIntire, Bruenn, and other Navy doctors,
with Drs. James A Paullin and Frank Lahey brought in as consultants. .... Bruenn urged
that at least Roosevelt be digitalized; there was some resistance, but Bruenn insisted that
if that were not done he could take no further responsiblity for the case. The doctors
finally agreed on a program; digitalis, less daily activity, fewer cigarettes, a one hour rest
after meals, a quiet dinner in the White House quarters, at least ten hoursí sleep, no
stimming in the pool, a diet of 2,600 calories moderately low in fat, and mild laxatives to
avoid straining.
The digitalis seemed to bring good results within three days. When Bruenn examined
his patient on April 3, 1944, Roosevelt had had a refreshing ten hourís sleep, his color
was good, his lungs entirely clear, and there was no dyspnea on lying flat. The systolic
murmur persisted however, and his blood pressure was still disturbing. He continued to
improve during the following days, but Bruenn and his colleagues decided that he
needed a real vacation. The President readily agreed to take a long rest in the sun
at Bernard Baruchís plantation, ìHobcaw,î in South Carolina.
The cardinal issue during these alarming days was who should tell the President
about his condition, and in what manner? The doctors agreed that he should be given the
full facts, if only to gain his co-operation. .... Bruenn did not feel it his duty to inform
the President; he was only a lieutenant commander and was a newcomer to the White
House. Everyone evidently assumed that McIntire had the responsiblity and would
exercise it, but there is no indication that he did. ...
P.450 So Roosevelt went to Hobcaw Barony not knowing that he was suffering from
anything more than bronchitis, or the flu. ... He wrote to Hopkins that he had had a really
grand time there - slept twelve hours out of the twenty-four, sat in the sun, never lost my
temper, and decided to let the world go hang.î The President did experience a painful
gall bladder attack at Hobcaw, but medication relieved the pain and there were no cardiac
So it was not really a matter of work. He was tired, Miss Perkins remembered later,
and he could not bear to be tired. Grace Tully still worried about the more pronounced
tremble of his hands as he lit a cigarette, the dark circles that no longer ever seemed to
fade from around his eyes, the slump in his shoulders. ....[Allen] Drury detected a certain
lifelessness, a certain preoccupation, a tired impatience - whether from work or political
opposition, or from age or ill-health, Drury could not tell. ...
P. 451 In his diary Stimson was still railing at the Presidentís ìone man government,î
which helped produce ìthis madhouse of Washington.î IN fact, his chief was running
the White House much as he had in prewar days, while all around him were rising the
huge bureaucratic structures of defense and welfare that would characterize the capital
for decades to come.
The apex of the huge structure was the tiny west wing of the White House. Here
the old hands, including Steve Early and Pa Watson served and protected the President.
Executive clerks, Maurice Latta and William Hopkins sought to keep some control over
the documents and messages that flooded into the White House - no easy job given
Rooseveltís distaste for set communications channels. The White House office had
already begun to spill over into the old State Department Building across the way;
administrative assistants - Jonathan Daniels, Lowell Mellett, Lauchlin Currie, David K.
Niles, and others - occupied the second floor row of offices they called ìDeath Rowî
because of the turnover. The President obtained Blair House across the street, for putting
up distinguished guests. Rosenman was still in charge of the speechwriting team,
because Hopkins was in the Mayo Clinic and Sherwood was in London as head of the
Overseas Branch of OWI.
Over in the east wing, which was in the final stages of building, Byrnes ran an even
smaller shop than Rooseveltís. In a clutter of tiny offices and partitioned cubbyholes -
for a time the news ticker was in the menís room - a small staff struggled with the tide of
problems relentlessly streaming in from the civilian agencies struggling for funds,
authority, manpower, and recognition. Ben Cohen, as incisive and unpretentious as ever,
served as legal adviser; ìspecial adviserí Baruch offered wise, opinionated counsel;
Samuel Lubell and a handful of others made up the rest of the full-time staff. Byrnes set
up a War Mobilization Committee composed of Stimson, Nelson, and other top civilians.


Freidel, Frank, Franklin D. Roosevelt: A Rendevous with Destiny (Boston: Little
Brown and Company, 1990)

p. 508At first, the illness seemed no more threatening than those Roosevelt had
weathered since the spring of 1940, and part of the time he seemed to be on the mend.
Then, in late March, his secretary, William D. Hasset noted: "The President not looking
so well ....Every morning in response to inquiry in response to inquiry as to how he felt, a
characteristic reply has been ëëRotteníí or ëëLike hell.íí" During a weekend in Hyde Park,
Roosevelt had a temperature of 104. Hassett recorded: "Looks ill, color bad; but he is
cheerful in spirit. . . Not inclined, however to take up anything but most pressing
business." During days when illness drained his energy, Roosevelt delegated power even
more than he had earlier in the war. Already he was leaving many domestic problems to
his cabinet and subordinates; now he was remote from them and ill disposed to have their
differences brought to him for solution. Propped up in bed one morning, perusing
memoranda from Morgenthau and Ickes, he remarked "he wished he could get Cabinet
members who would do their own work."
Even in reaching military decisions and keeping up with the incessant correspondence
with Churchill, Roosevelt depended more and more upon his staff. With Hopkins
seriously ailing and absent, Roosevelt relied heavily upon his chief of staff, Admiral
Leahy, his naval aide Captain Wilson Brown, and the offers attached to the White House
map room. ... .... 512 ... In 1944, Rooseveltíís medical problems clearly extended beyond
his nose and throat. His secretry Grace Tully was concerned over the shake in his hand
when he lit a cigarette, and his tendency to not while reading letters or dictating. ...Miss
Tully became so alarmed that she carried her concerns to Anna, who shared them. Anna
already had urged McIntire to look into the presidentíís overall health; McIntire sent him
for a thorough checkup at the naval hospital in Bethesda, Maryland. At Bethesda,
Roosevelt was wheeled into the office of ayoung cardiologist in the Naval Reserve, Dr.
Howard G. Bruenn, and lifted onto the examination table. Dr. Bruenn later recalled that
the president was in good humor, but "appeared . . . very tired, and his face was very
gray. Moving caused considerable breathlessness " Dr. Bruin diagnosed him as suffering
from hypertension, hypertensive heart disease, cardiac failure in the left ventricle of his
enlarged heart, and acute bronchitis. Admiral McIntire, along with Dr. Bruenn, conferred
with leading physicians at the naval hospital. ...Two days later they met with two
consultants, Drs. James A. Paullin and Frank Lahey, who went over the X-rays,
electrocardiograms, and other data. In the afternoon Drs. Paullin and Lahey examined
Roosevelt at the White House. Dr. Lahey, particularly concerned with the gastrointestinal
tract, did not recommend surgery, but felt Rooseveltíís condition was sufficiently grave
that he should be fully informed so that he would cooperate wholeheartedly. After some
debate, Dr. Bruenn finally won support to administer digitalis to Roosevelt. Overall, the
presidentíís ailments were serious but did not seem at the time an immediate threat to his
life. His blood pressure in the months ahead fluctuated considerably in response to his
physical shape and degree of stress. At its high points it indicated severe hypertension, of
a level a patient was not likely to survive for more than a year. ... .... While Roosevelt
from March, 1944, on continued to make only general remarks about his chronic nose
and throat problems, Admiral McIntire was a fount of disinformation, again and again
announcing that Roosevelt was om a fine state of health. The conspiracy of silence was
important if Roosevelt was to run again, as he felt he must, he told his son James in the
summer of 1944, "to maintain a continuity of command in a time of continuing crisis." P.
514 -515 On May 16, 1944, he startled one of his assistants, Jonathan Daniels, by
prefacing an account of his conversations with Stalin on Poland with an ominous phrase:
"Here is something you should write about if I pop off." Whether or not Roosevelt kept
himself closely informed on his medical problems , he was an exemplary patient, cutting
back on his hours of work, increasing his periods of rest, reducing his smoking from a
pack or more a day to about six cigarettes (then back up later to a full pack), exercisingin
the White House swimming pool -- which he enjoyed -- and adhering to a limited lowsalt
diet to bring down his blood pressure andhis weight. This was the standard treatment
for hypertension, which he must have known. Soon his health improved. On April 5 he
told Dr. Bruen he felt fine. Tow days later he was in good humor when he held a pres
conference; correspondents thought he looked better than a week before. Within two
weeks, X-rays and an electocardiogram showed his heart more nearly normal and his
lungs clearing. To speed his recovery, Roosevelt headed south on April 8 for a vacation
at Bernard Baruchíís plantation, Hobcow, in South Carolina. For security reasons his
whereabouts was secret, but three White House correspondents waited and watched
nearby, as they had in Poughkeepsie during his Hyde Park sojourns. He was accompanied
by Admiral McIntire, Admiral Leahy, and the military and naval aides, but took with him
none of the assistants concerned with domestic or foreign policy. While Roosevelt was
there, his medical problems continued. On April 17, Dr. Bruenn arrived ... He found
Roosevelt ... Still suffering from elevated blood pressure; but at the end of April and in
early May Roosevelt went through a fresh ordeal, suffering two acute gallbladder attacks,
which Dr. Bruenn treated with codeine. Admiral McIntire was reassuring at the time,
saying the pain was temporary and not serious. ... The setback contributed to a decision
for Roosevelt to remain at Hobcaw an extra week, until May 6. P. 519 With the
campaign more likely to center upon domestic issues, Roosevelt immediately upon his
return from Hobcow had to confront what had so long been a prime Republican theme --
the charge that he was a tyrannical oppressor of business. The press and radio were filled
in May 1944, with denunciations of a new episode in the ongoing wartime struggle
between business and organized labor, the government seizure of the giant mail-order
and retailing firm, Montgomery Ward. The stringent Smith Connally (War Labor
Disputes) Act ... Roosevelt had sought ... to use the measure while he was at Hobcaw to
discipline Sewell L. Avery, the vehemently antiunion president of Montgomery Ward,
who since 1942 had been defying the War Labor Board.In January 1944, Avery refused
to have further dealings with a CIO union, arguing that a majority of the work force no
longer favor it. ... The president under the Smith -Connally Act had the power to take
over a strikebound plant if it was "useful" to the war effort. Montgomery Ward,
supplying the army and millions of farmers, seemed to Attorney General Francis Biddle
to be within this category. Biddle flew to Chicago to await Avery in the Montgomery
Ward office. Avery arrived and refused to budge, sputtering "to hell with government."
Two military policement then ousted Avery. They picked him up, and as they carried him
out the main door, a news photographer caught a picture that appeared on the front pages
throughout the nation. Roosevelt seemed to be in a trap, but by the time he arrived back
in Washington he had devised a means to wriggle out. The first press conference opened
in cheerful fashion and he kept the reporters laughing all through the session. Roosevelt
declared that the union election was taking place that day, and if the union did not have a
majority, that would end the case; if it did , since management had declared it would be
willing to continue its contract, that too would end the case. The union won its election
that day, so the government withdrew its control, ending the immediate embarrassing
political problem for Roosevelt. Avery continued stubbornly to resist War Labor Board
rulings, but it was not until December 28, 1944, after the election, that Roosevelt
intervened, this time firmly and prevented Avery from running Montgomery Ward. ...


Geoffrey C. Ward, A First-Class Temperament; The Emergence of Franklin Roosevelt (New York: Harper & Row, 1989) P. 777n

Winthrop Rutherford died in 1944, after a long illness. Thereafter, Roosevelt sometimes stopped his train en route to Hyde Park from Washington to visit the Rutherford estate at Allamuchy, New Jersey, and Lucy [Rutherford] spent time with him at Hbocow Barony, Bernard Baruch's South Carolina estate.

During the last, increasingly lonely months of the President's life, she joined the little band of other women -- including Anna, Margaret Suckley, and Laura Delano -- who devoted much of their time to trying to ease his burdens and see to his failing health. Once, home on leave from the Navy, Franklin Jr. bounded into his father's office unannounced to find him having his wasted legs massaged by a strange woman who was introduced to him only as "my old friend, Mrs. Winthrop Rutherford."

She was with him in Warm Springs on April 12, 1945. Hers was the last face he saw before he died. Source: Interview with Franklin D. Roosevelt Jr.


Hugh Gregory Gallagher, FDR's Splendid Deception, (New York: Dodd, Mead & Company, 1985) P. 142

When Lucy's husband died, Roosevelt had his train stopped in New Jersey, had himself lifted by the Secret Service into a waiting car, and paid a call on her at Tranquility Farms. She gave him a cup of tea. When Roosevelt was attempting to recover his failing health at Bernard Baruch's plantation in South Carolina, Lucy drove over to visit, using Baruch's precious ration coupons to obtain the gasoline for the trip. It seems whenever the President and newly widowed Lucy were together, there were others with them -- friends, children, staff, servants. The entire business, Anna protested to biographer Bernard Asbell, was "so open, aboveboard, not hanky-panky or whatever you want to call it."

By 1943, Roosevelt had lost the women who had given him unquestioned love and devotion. These were also the qualities Lucy could offer. She was aboslutely uncritical in her adoration of FDR. He was, she wrote in a letter, "one of the greatest men who ever lived--to me the greatest." ... Lucy was content simply to be with Franklin. She did not harry him, as did Eleanor, with unfulfilled commitments. She simply sat with him and listened, smiled, and said, "Isn't he wonderful."




Fred J. Cook, The Warfare State (New York: Macmillian Company, 1962)

pp. 131 - 139 American policy, whether through design or lack of vision, now became
the creature of devious paradox. Looking back, it seems that it had a double purpose: to
reassure the home folks that we were the great and peace-loving nation we had always
pretended, and at the same time, to avoid giving Russia any choice except complete

The dual motive was most glaringly apparent in the Baruch Plan for control of the
atom, a piece of statesmanship which Americans generally cam to regard as one of
unparalleled generosity on our part, but one which, in any realistic evaluation, must be
judged to have been so heavily loaded in our favor that the Russians never possibly could
have accepted it.

The Baruch Plan, though it has not been generally recognized, represented the fullest
flowering of our first great delusion - that our possession of atomic ìsecretsî gave us a
dominant position as the guardian of the worldís peace. Winston Churchill, with
President Truman sitting on the platform and cheering him on, had awarded us the role of
world arbiter in his speech at Westminster College, Fulton Missouri, on March 5, 1946.
There he had flung down the battle gauge to Stalin and had described the ìiron curtainî
that the Russians had drawn across europe. At the same time, Churchill had pictured the
United States as ìat the pinnacle of world powerî and had expressed the belief that we
could, if no effort was spared, maintain ìformidable superiority.î Truman already had
indicated his readiness to accept the part Churchill allotted us. Immediately after the
explosion of the Hiroshima bomb, in a radio speech on August 9, 1945, he had
proclaimed: ìWe must constitute ourselves the trustees of this new force . . . It is an
awful responsibility which has come to us. We thank God that it has come to usî - and
not to our enemies. He had prayed that God ìmay guide us to use it in His ways and for
His purposes.î What all of this meant was very clear to Stalin at the time, as his promt
response to Churhcill showed. In an interview in Pravda on March 13, 1946, he accused
Churchill of being a warmonger and added: ìActually, Mr. Churchill, and his friends in
Britain and the United States, present to the non-English-speaking nations something in
the nature of an ultimatum: ìAccept our vule voluntarily, and then all will be well;
otherwise war is inevitable.

This was an attitude that foreboded a cold reception for any American-promulgated
plan unless the way for acceptance could be smoothed by deft diplomacy, a weapon
noticeably lacking in the Truman arsenal. In the light of Stalinís explicit ìultimatumî
statement, it would seem elemental that every effort should have been made to avoid the
appearance of ultimatum. Roosevelt almost certainly would have perceived this and
would have tried to engage the Russians in a cooperative effort to draft an acceptable
plan, but then Roosevelt almost certainly would not have sat upon the platform in Fulton
cheering Churchill on. The direct Roosevelt approach, the Roosevelt reliance on
personal contact to banish suspicion, the Roosevelt insistence on a middle course that
would keep America from becoming the committed partisan of English policy in the
conflict of English-Russian interests - all this had been abandoned; and the Truman
Administration, militarily oriented by Leahy and the Joint Chiefs and Forrestal, had
thrown up a cold wall of noncommunication on our side to match the iron curtain of
Stalinís. In this frigid atmosphere, before the sounding board of the United Nations
where the good guys regularly battled the bad guys, America brought forth the Baruch

Bernard Baruch, our chosen spokesman, was the multimillionaire man of Wall Street,
the unofficial elder statesman who had served as adviser to many Presidents and a figure
venerated , sometimes to the point of positive idolatry, by Americaís most eminently
conservative press. From Americaís standpoint he was an ideal choice to present
Americaís position since his name and prestige could be guaranteed to assure an
enormously favorable domestic reception of our proposal, but one has to wonder whether
the choice was so ideal if the object was to gain Russian cooperation, since Baruch
almost certainly would represent in suspicious Russian eyes the very forces of American
capitalism that they already regarded as most inimical.

In any event Baruchís was the chosen voice, and on June 14, 1946 - only a little more
than three months after Churchillís virtual declaration of the Cold War in Fulton - he
presented the American plan before the United Nations Atomic Energy Commission. His
opening phrases were the phrases of ultimatum.

ìWe are here to make a choice between the quick and the dead. That is our business.
ìBehind the black portent of the new atomic age lies a hope, which seized upon with
faith, can work our salvation. It we fail, then we have damned every man to be the slave
of Fear. Let us not deceive ourselves: We must elect World Peace or World Destruction .
. .
ìNow, if ever, is the time to act for the common good. Public opinion supports a
world movemetn toward security. If I read the signs aright, the peoples want a program
not composed merely of pious thoughts but of enforceable sanctions - an international
law with teeth in it. . . .î

Baruch proceeded to describe the molars we had devised. We proposed the creation
of an Internaitonal Atomic Development Authority under the United Nations. This
authority would have absolute control over all phases of atomic energy. It would own
and manage ìall atomic energy activities potentially dangerous to world security.î It
would have the power ìto control, inspect and license all other atomic activities.î Its
duty would be to foster ìbeneficial uses of atomic energy,î and it would be charged with
research and development, coupled with the task of comprehending and detecting
ìmisues of atomic energy.î

This was the broad outline. Baruch spelled out in detail just what it contemplated.
His proposed Authoirty would have supreme powers anywhere in the world. One of its
first tasks would be to obtain complete information on deposits of uranium and thorium,
and these, wherever they might be found, were to be brought under the ìdominionî of the
Authority. ìA keystone of the planî was the tight monopoly the Authority was to
exercise over raw material sources and every phase of the atomic process.
Obviously, if the Authority were to achieve such complete control, its inspectors
would have to be at liberty to poke into any corner of the world, even to the most hidden
recesses of Russia. The inspectors similarly would have to have unlimited reign when
peaceful atomic plants had been constructed, for by relatively simple transition the
peaceful atom might be turned into the destructive atom. Eternal vigilance would be
needed to see that this did not happen. ìAny plant dealing with uranium and thorium
after it once reaches the potential of dangerous use must be not only subject to the most
rigorous and competent inspection by the Authority, but its actual operation shall be
under the management, supervision and control of the Authority,î Baruch declared.
Sweeping as this provision was, ever more sweeping were the provisions that
followed. No phase had been overlooked, and Baruchís explicit language left no doubt.
All states must surrender their rights to research in the atomic field. Only the Authority
would be permitted to find raw materials; only the Authority could build and operate
plants; only the Authority would be permitted to find raw materials; only the Authroity
could build and operate plants; only the Authority could conduct further research. TO
make sure there was no backsliding on any of these provisions, the Authorityís agents
must be guaranteed ìfreedom of access,î defined as ìadequate ingress and egress,î to any
and all areas of the world without exception.

The plan clearly envisioned the establishment, through the medium of atomic energy,
of a virtual super government of the world, for the supreme power of the atom would
repose completely in the hands of this new international Authority. It could go
anywhere, do anything in its field - and its field was so broad as to be virturlly unlimited
- and no state could say it nay. Anyone who appreciated the deep distrust and suspicion
with which pariah Russia for decades had viewed the capitalistic West, anyone who
realized that Russia attrributed her victory over Hitler largely to the secrecy whe had
maintained about her strength and military resources - a secrecy that had led the Nazi
Fuehrer into fatal miscalculations - must have had doubts that Russia would ever
voluntarily throw wide her doors to such an unlimited inspection system. But, supposing
she should agree, the vital question would then become: Who would administer such
sweeping powers?

ìThe personnel of the Authority should be recruited on a basis of proven competence
but also so far as possible on an international basis,î Baruch announced. [Italics added.]
This could hardly be interpreted as reassurance to Russia. The only personnel of
ìproven competenceî was the American-directed team of scientists and engineers who
had manufactured the A-bomb, and the weak concession that ìso far as possibleî
personnel should be recruited on an international basis seemed to suggest by its very
phrasing that not very much along these lines would be found to be possible.
All of these provisons were dubious enough, but worse was to come. When Baruch
came to the biting edge of the molars - the ìteethî he had mentioned to reinforce these
broad provisions - he came to the crux of the demands on which his plan was to founder.
Severe penalties, he said, would have to be imposed for interfering with any activities of
the Authority, for illegal possession and use of the bomb, for the ìillegal possession, or
separation, of atomic material suitable for use in an atomic bomb.î Even an attempt to
make use of atomic energy for peaceful purposes ìin the absence of a license granted by
the international control bodyî would be an international crime.

Such crimes would be summarily punished. Baruch made specific reference to the
precedent set by the Nuremberg trials in which the Allies had tried and executed highranking
Nazis as war criminals. Similarly, he said, the United Nations ìmust provide
immediate, swift and sure punishment. . . . The United Nations can prescribe individual
responsibility and punishment.î Not even chiefs of state would be immune under this
provision, and Baruch made it clear there would be no exceptions because, on this point,
no veto would be permitted.

ìI want to make it very plain,î he said, ìthat I am concerned here with the veto power
only as it affects this particular problem. There must be no veto to protect those who
violate their solemn agreements not to develop or use atomic energy for destructive

The full significance of this provision can be understood only in relation to the voting
split in the United Nations at the time. In this forum, the United States at the head of its
Latin American and British bloc was consistently outvoting the Soviet bloc by a margin
of 46 to 5. Yet this was the lopsided judge and jury that would sit in judgment on any
real or fancied Soviet infringement. Could anyone possibly imagine that Josef Stalin
would agree ever to be judged in such a court? Or, supposing the voting margin had
favored the Soviet bloc by 46 to 5, could anyone ever imagine that the Senate of the
United States would have agreed? The answers, it seems, should have been obvious.
But even this was not the end. Supposing that the Soviets agreed to all this, what
would they get? This was really the best part. This was where we were going to be
unbelievably magnanimous. Baruch said:

ìWhen an adequate system for control of atomic energy, including renunciation of the
bomb as a weapon, as been agreed upon and put into effective operation and condign
punishment set up for violation of the rules of control which are to be stigmatized as
international crimes, we propose that

ì1. Manufacturing of atomic bombs shall stop.
ì2. Existing bombs shall be disposed of pursuant to the terms of the treaty, and
ì3. The Authority shall be in possession of full information as to the know-how for
the production of atomic energy.

ìLet me repeat so as to avoid misunderstanding: my country is ready to make its full
contribution toward the end we seek, subject of course to our constitutional processes,
and to an adequate system of control becoming fully effective, as we finally work it out.î
Further spelling out Americaís attitude, Baruch added a cryptic paragraph which
seemed to say that we might want a 100 percent guarantee against all weapons, against
all war, before we would agree to sever outselves from our A-bombs. This paragraph
read: ìBut before a country is ready to relinquish any winning weapons, it must have
more than words to reassure. It must have a guarantee of safety, not only against the
offenders in the atomic era, but against the illegal users of other weapons -
bacteriological, biological, gas - perhaps - and why not? Against war itself.î

The picture that emerges seems clear beyond dispute. During the time it took to set up
this all-powerful international control system to our satisfaction, we would continue to
manufacture bombs; we would increase and keep our own hoard until some indefinite
future date when we felt 100 per cent assured that the international control system, and
perhaps the ban against war itself, was ironclad. Only then - and even then subject to the
limitation of ìour constitutional processesî (of course the Senate might not agree) -
would we consent to dispose of the bombs and make our knowledge of atomic energy
available to other nations for peaceful purposes. If and when we finally gave up our
ìsecretî the U.N. agency we would still control would determine what nations could have
atomic energy and what could not - and how many palnts each could have and where
they would be located. This would mean that, in the end, after Russiaís complete
submission to all our demands, we would still retain, through our control agency puppet,
the power to deny Russia the uses of atomic energy if we chose. And Russians could
hardly be expected to believe, in the increasingly hostile atmosphere of the times, that we
would choose generously in their favor.

Anyone who tries to do the few simple mental gymnastics required to look at the
Baruch proposal from the Russian standpoint must see that it represented to them the
sorriest of gaudily packaged bargains. We surrendered nothing until we had obtained the
most foolproof guarantees, of whose perfection we were to be the sole judge, and with
these guarantees, almost dictatorial power over the internal systems and lives of other
countries. On the other hand, we expected Russia to reveal to us all her secrets, to waive
her own national sovereignty in vital areas, to put even the lives of her leaders in possible
jeopardy. It is doubtful whether world history in all its long and tortuous course, can
furnish a single example of a major nation willingly acceding to such prepostrously
lopsided conditions.

Henery Wallace, in one of his last acts before being forced out of the Truman Cabinet,
wrote a letter to the President on July 23, 1946, in which he focused sharp criticism on
what he called ìa fatal defectî of the American plan. He wrote:

ìThat defect is the scheme . . . of requiring other nations to enter into binding
commitments not to conduct research into the military use of atomic energy and to
disclose their uranium and thorium resources, while the United States retains the right to
withhold its technical knowledge of atomic energy until the international control and
inspection system is working to our satisfaction.

ìIn other words, we are telling the Russians that if they are ëgood boysí we may
eventually turn over our knowledge of atomic energy to them and to other nations. But
there is no objective standard of what will qualify them as being ëgoodí nor any specified
time for sharing our knowledge.î

Baruch replied that it had ìalways been recognized that the precise content, sequence
and timing of the transition stages would be the subject of detailed negotiation,î but
neither then nor later did we ever indicate what time limit we had in mind; never did we
reduce the vagueness of our ultimate, some-day promise to the concreteness of specific

Under the circumstances - and especially since we had no ìsecret,î since all that
Russia needed was a few years of hard scientific effort to develop her own atomic energy
program with no surveillance and no strings attached - the Baruch plan was foredoomed
to failure. The fact of its failure was not amazing. What was amazing was the persistent
American delusion that we had made an offer unrivaled in its generosity. The American
mind was captured and conditioned by the headline-catching phrases in the Baruch
speech - the choice between ìthe quick and the dead,î and ìinternational law with teeth
in itî - and the sophisticated jokers that were hidden in the details never registered with
any impact. All that registered was that the Russians, by slapping down our extended
hand, were being their usual intransigent and despicable selves.

The American public, sincerely wanting peace, doubtless believed that only the
utmost sincerity motivated its own government; but there are some indications that
powerful forces in the background never wanted the Baruch plan to succeed. David
Lawrence, the dean of conservative columnists, wrote from Washington that those who
had never wanted to disclose our ìsecretî breathed ìquite a sigh of reliefî when Russia
rejected Baruchís proposals. The ìsigh of reliefî seems, under the circumstances, like a
decided malapropism. He had retained our ìsecretî for one fleetingly brief unworthy
moment of time. It was a Pyrrhic victory that was to turn into grim reality that ìsecret
armament race of a rather desperate characterî that Stimson so clearly had foreseen.
P. 208 The succeeding years were full of much sound and fury, signifying nothing. We
continued to berate the Russians over the Baruch Plan we now knew they would never
accept; they continued to growl ìnyetî; and the Cold War tensions steadily mounted.
Then, in 1949, Russia signaled her entrance into the nuclear club; This was followed by
the outbreak of limited war in Korea. And Now, though we had the bomb that we had so
foolishly envisioned as giving us hegemony over the world , we dared not use it for
Russia had it, too.

This was the first dead end to which the military solutions of the Military had brought
us. Confronted with it, we finally modified our policy In a speech in October 1950,
Ptresident Truman called upon the United Nations to form a new, unified Disarmament
Commission to consider all types of arms limitations. This meant that we were now
ready, not just to talk about an impossible Baruch-type plan for nuclear disarmament, but
to couple the nuclear problem with the basic problem that had always disturbed us -
Russians and Chinese preponderance of manpower, the force to which we had thought
the atom bomb would be the answer.

The United Naitons acted on Trumanís suggestion and set up a Disarmament
Commission. To this both the Russians and the Western allies submitted diametrically
opposite proposals. The Russians wanted to begin with an outright prohibition on the use
of all nuclear weapons and all weapons of mass destruction; the British, French and
Americans proposed that conventional forces be cut back first, that nuclear arms
limitations be considered only in the final phase. ....


Arms merchants favor rapid and complete disarmament after each war, it clears the decks
for the next debt-financed arms buildup. The first Secretary of Defense, James T.
Forrestal, was unfortunate enough to make this discovery.

Walter Millis, ed., with collaboration of E.S. Duffield, The Forrestal Diaries (New
York: The Viking Press, 1951)

p. 100 One of the fascinations of the Forrestal diary lies in the extent to which it shows
how many of the problems which were later to become acute were already fully apparent
in these closing days of what many had assumed to be peace. To Foresstal, the country
ìwas going back to bed at a frightening rate, which is the best way I know to be sure of
the coming of World War III. He had started circulating among his friends at this time
copies of Kiplingís celebrated ìTommy Atkins,î on the soldierís lot in peace:
For itís Tommy this, and Tommy that, aní chuck him out, the

But itís ìSavior of ëis countryî when the guns begin to shoot.

..... Bernard Baruch tought it a good pieceî but added pessimistically: ìThis is my
second round trip into war, peace and aftermath, and I can tell you that already I
see nothing but a repetition of what took place after the last war.î Forrestal,
suddenly interested in the arguments which in in the previous ìaftermathî had led
to the decline of American military strength, sent a memorandum to one of his
assistants: ìI want someone to do a research for me on the things that appeared in
The Nation, New Republic and New Masses ten years before the war, against
preparedness.î Now again, a great war machine was being destroyed; the country was
ìgoing to bedî; even from Washington, as he wrote a friend, ìall hands are pulling out,î
and with the early winter he knew he was facing ìa great exodusî from the service of the
ìlawyers, accountants, business people, etc., who had in fact been such vital cogs in the
war effort. Yet the problems and perils were no less than before, and that had to be faced
as they came - from domestic labor policy to Soviet aggression, from dmobilization to
the atomic bomb. Fantastically different was they were upon the surface, all were
intimately interrelated at bottom.

P. 194
To James P. Warburg, 20 August 1946
Dear Jimmy:
Not for publication: I certainly agree with you that the German problem is the key to
the whole question of destruction or peace - although I would probably, as a result of my
revent travels, add China to that category. [ ...Forestall on August 18 and 19 ... left
Norfolk about ten-thirty for Washington and thensce felw to Mitchel Field, Long Island,
where he landed in time to reach Bernard Baruchís house for a luncheon given in honor
of the latterís seventy-sixth birthday. At lunch he sat next to Mrs. Andrei Gromyko (the
wife of the former Soviet Ambassador to the United States recently appointed permanent
delegate to the [UN] Security Council) ...
4 September 1946 State-War-Navy Meeting
.... I mentioned Mr. Baruchís letter to me requesting that the State Department be
informed of our effort to put into effect the eight areas of agreement arrived at by the
Army and Navy ... last spring. Patterson agreed but made the observation that while the
signature was Baruchís, he thought the language was undoubtedly Eberstadtís. [At the
Cabinet on September 6 the President announced that the Joint Chiefs of Staff thad
recommended postponement of the third atomic bomb test firing, originally planned to
follow the first and second Bikini tests. ...
P. 216-217
6 November 1946 State-War-Navy
..... [Sec of State Dean] Acheson said that the U.S. position on disarmament [a
subject the Russians were then vigorously pressing in the United Nations] was
confused and that he was communicating with Byrnes and Baruch [who had been
appointed as the American representative on the United Naitons Atomic Energy
Commission] on it. He thinks that Molatovís proposal on world-wide disarmament can
be used to point up the fundamental obstacles blocking international acceptance, such as
the Russianís position on inspection [of atomic weapon development, exchange of
information etc.] .... Baruch intends to press for a vote on the atomic energy control
to focus attention on the Sovietís stand. I mentioned that satisfactory conclusion of
peace treaties should also be included in any such statement of policy .... Acheson said he
thought the point could be worked in.

Quentin Reynolds, Winston Churchill (New York: Random House, 1963)
In March of 1946 Churchill was invited to Westminster College in Fulton Missouri, to
accept an honorary degree. During his address he said:
From Stettin in the Baltic to Trieste in the Adriatic, an Iron Curtain has descended across
the Continent. Behind that line lie all the capitals of the ancient states of of Central and
Eastern Europe: Warsaw, Berlin, Prague, Vienna, Budapest, Belgrade, Bucharest and
Sofia. All these famous cities and the populations around them lie in what I must call the
Soviet sphere. What is needed is a settlement, and the longer this is delayed, the more
difficult it will be, and the greater our danger will become. From what I have seen of our
Russian friend and ally during the war, I am convinced that there is nothing they admire
so much as strength, and there is nothing for which they have less respect than weakness,
especially military weakness.


Fred J. Cook, The War State (New York: The Macmillian Company, 1962)



Walter Millis, ed., with collaboration of E.S. Duffield, The Forrestal Diaries (New
York: The Viking Press, 1951)

p. 241
29 January 1947 State-War-Navy
.... General Marshall explained that the other members of the Security Council were
unanimous in the belief that the Council should go ahead with the discussion of the
general problem of disarmament. He believed that other nations would take a solid
vote against us should we propose otherwise. He said Senator Austin and Mr.
Baruch shared the view that it would be unwise for us to eliminate the atomic bomb
until other matters in the field of regulation of armaments were well along.
P. 291
15 July 1947 Meeting Bernard Baruch
Met with Mr. Bernard Baruch, Eisenhower, Patterson after lunch. Baruch feels
that we must begin to use immediately all possible economic measures in our
relations with Russia. By this he means pre-emptive and preclusive buying of scarce
commodities. He would, for example, buy the entire surplus of the Cuban sugar
crop. He would also buy coffee and send gold to other countries in exchange for
their raw materials. . .
P. 310
10 September 1947 Lunch with Marshall
Lunch today with Marshall, Harriman, Baruch, Lovett and Kennan. Purpose was
to get Baruchís views on the extension of help to Europe. He expressed a strong
disinclination to continue American aid unless we had more facts and figures on
which to base judgement. He believes both the British and French have assets
which they have not yet disclosed . . .


David McCullough, Truman (New York: Simon & Schuster, 1992)
p. 582 In the summer of 1947, in the journal Foreign Affairs, George Kennan had
published an article in which he intorduced the idea of ìcontainment,î an expression
already in use at the State Department by then. Kennan recommended ìa policy of firm
containment [of Russia] ... with unalterable counterforce at every point where the
Russians show signs of encraochingî - until the Soviet Union either ìmellowsî or
collapses. The article was signed simply ìX,î but the identify of the author was known
soon enough, and in another few months Walter Lippman issued his own strong rebuttal
to the concept in a book called The Cold War, an expression Bernard Baruch had used
earlier in a speech, but that now, like the Iron Curtain, became part of the postwar



Walter Millis, ed., with collaboration of E.S. Duffield, The Forrestal Diaries (New
York: The Viking Press, 1951)

P. 362-264
3 February 1948 Meeting - Franklin D. Roosevelt, Jr.
Visit today from Franklin D. Roosevelt, Jr., who came in with a strong advocacy of
the Jewish State in Palestine, that we whould support the United Nations ìdecision,î and
in general a broad, across-the-board statement of the Zionist position. I pointed ou that
the United Nations had as yet taken no ìdecision,î that it was only a recommendation of
the General Assembly, that any implementation of this ìdecisionî by the United States
would probably result in the need for a partial mobilization, and that I thought the
methods that had been used by people outside of the Executive branch of government to
bring coercion and duress on other nations in the General Assembly bordered closely
onto scandal. He professed ignorance on this latter point and returned to his general
exposition of the case of the Zionists.
He made no threats, but made it very clear that the zealots in this cause had the
conviction of trying to upset the government policy on Palestine. I replied that I had no
power to make policy but that I would be derelict in my duty if I did not point out what I
thought would be the consequences of any particular policy which would endanger the
security of this country. I said that I was merely directing my efforts to lifting the
question out of politics, that is , to have the two parties agree they would not compete for
votes on this issue. He said this was impossible, that the nation was too far committed
and that, furthermore, the Democratic Party would be bound to lose and the Republicans
gain by such an agreement. I said I was forced to repeat to him what I had Senator
McGrath in response to the latterís observation that our failure to go along with the
Zionists might lose the states of New York, Pennsylvania and California - that I thought
it was about time that somebody should pay some consideration to whether we ight not
lose the United States.

[ {Editor Millis:} Here is an excellent statement of Forestalís basic motives in a matter
which was to involve him in more criticism than any other of his actions in his nine years
in Washington. But he went on that same day to lunch with an older, wiser and certainly
far more experienced mind than that of the younger Franklin Roosevelt. Bernard Baruch
in effect warned him to go slow.]

3 February 1948 [ Lunch with Baruch]
Had lunch with B. M. Baruch. After lunch, raised the same question with him. He
took the line of advising me not to be active in this particular matter and that I was
already identified, to a degree that was not in my own interests, with the opposition
to the United Nations policy on Palestine. He said he himself did not approve of the
Zionistís actions, but in the next breath said that the Democratic Party could only
lose by trying to get our governmentís policy reversed, and said that it was a most
inequitable thing to let the British arm the Arabs and for us not to furnish similar
equipment to the Jews. [It was this same day, also, that Forrestal received a telephone
call from Winthrop Aldrich, chairman of the Chase National Bank in New York, who had
been discussing Palestine, evidently at Forrestalís instigation, with Governor Dewey.
Dewey, Aldrich said, was very much interested in Forrestalís campaign on Palestine; he
thought Forrestal was doing just right; he was in entire sympathy and would cooperate in
any way for the best interests of the country. Dewey, Aldrich continued, suggested that
any discussions of cooperation be handled through the Secretay of State [Acheson] and
John Foster Dulles.

p. 427-428
30 April 1948 Cabinet
... I reported to the President that the Armed Services Committee of the House had called
us for hearings on Monday on their Selective Service bill - Chairman Andrews having
stated that they proposed to pass a Selective Service bill as such and then endeavor to bet
the UMT measure before the Hose directly afterward. ...
.... I also referred to themorning-paper comments on the possibility of renewing lendlease
for the Western Union [at this press conference Marshall had revealed that military
lend-lease for Eurpoe was under consideration], and asked whether it might not be wise
to let something get out on this subject to indicate the extent of further demands which
might be imposed on the national economy. The President and Secretary of State thought
this would be premature, although the latter said he realized that his own remarks ... had
already provided the foundation for speculation on the subject ... [There was certainly not
going to be money enough for everything, and in effect UMT here went by the board.
Nor was re-armament (as Forestal well knew) simply a matter of dollar figures in the
budget. To rouse the country and its representatives to a real military effort was a manyfaceted
problem. Bernard Baruch had been campaigning before congressional
committees and elsewhere for the adoption of a ìstand-byî plan for genuine industrial
mobilization, and at the end of April Forrestal was on the telephone with Byrnes about

Telephone Conversation with James F. Byrnes, 28 April 1948
MR. FORRESTAL: Arthur Hill and Eberstadt have worked up a document to go to
the President along the lines of our conversation. ... First the immediate things that
need to be done ... And, second, Bernieís complete control of the economy - which
Bernie is wonderful at advocating ex cathedra, so to speak, but it may not be quite
so easy politically.
MR. BYRNES: It is not. ... Iím sure that B.B.ís statement - so far as Congress is
concerned - made a bad impression.
MR. BYRNES: And you would have a terrible uphill fight. It seems to me that you
have so much trouble with our own crowd that you canít pick on that thing, when it
has already been tried out by him. . .
MR. FORRESTAL: Also, of course, Bernie is very adept at the art of making his
recommendation and advice so global that he can say, ìI told you so.î
MR. BYRNES: Everything. I talked to [Senator] George, and somebody else on the
committee - I think Vandenberg; you remember Van said that heíd covered the
waterfront? .. And B.B. didnít like it.
MR. FORRESTAL: Thatís right ...


Walter Millis, ed., with collaboration of E.S. Duffield, The Forrestal Diaries (New
York: The Viking Press, 1951)
p. 544
On January 8 Symington released his first annual report as Secretary of the Air Force. It
bluntly renewed the demand for a full seventy groups by 1952, thus reopening the
controversy of the previous year and further undercutting Forrestalís position. At the
same time the commentators, with Marshall now out of the cabinet, turned their attention
to the Secretary of Defense. On Sunday, January 9, Walter Winchell, a hostile critic
since the days of the Palestine controversy, broadcast a prediction that the President
would accept Forrestalís resignation within the ensuring week. [New York Times, 11
January 1949] Winchell coupled his prediciton with the bitter allegation that Forrestal
had formed a Canadian corporation in 1929 to reduce his federal income tax in that year,
and with a fevered denunciation of the legislative proposals concerning the National
Security Council as being designed to ìthrow the country into war without even notifying
Next day the White House correspondents asked Charles G. Ross, the Presidentís press
secretary, about the Winchell prediction that Forrestal would be out of office within a
week. Ross said flatly that it was untrue. To avoid misunderstanding , he added that all
Cabinet members customarily submitted their resignations on the advent of a new
administration, but that he did not know whether Forrestalís had been received. Forrestal
was a luncheon guest at the White House that day.
When he returned on Tuesday (January 11) for a private conference with the President,
the correspondents questioned him about his routine resignation. He told them that it had
not yet been submitted, but would be in the Presidentís hands before the inauguration on
January 20. There was a brief interchange:
ìDo you anticipate its acceptance?î
ìDo you want to and expect to continue as Secretary of Defense?î
ìYes, I am a victim of the Washington scene.î
P. 546-547
On the evening of January 16 Drew Pearson renewed the radio attack on Forrestal.
Recalling Winchellís assertion that the President was about to accept Forrestalís
resignation, Pearson insisted that the President would have done so if Winchellís
forecasting of the aciton had not angered him. Pearson also repeated Winchellís attack
on the old Canadian corporation and added to it a trumped-up version of an old robbery
of Mrs. Forrestalís jewels that reflected on Forrestalís personal courage. .....A week after
the Pearson broadcast, when a guest on another radio program erroneously accused
Forrestal of having a major financial interest in a cartel controlling the old pro-Nazi firm
of I.G. Farben, friends of Forrestal secured a retraction and spology for him. These and
other attacks so hurt Forrestal that he confessed to a friend that he could no longer listen
to the popular Sunday night news-commentator broadcasts.
P. 551-552
Johnson wo had been a director of the company manufacturing the B-36s, had asked
Forrestal to make any decisions about that airplane before leaving office, and Forrestal
had promised to do so. On February 28 Foresstal appraently decided the one pending
question about the Air Forceís controversial intercontinental bomber. The Air Force had
been asking for money and authority to add auxiliary jet engines to the big bomber, and
Forrestal finally authorized the modification.
The following day, March 1, saw the beginning of a swift climax in Forrestalís secretly
discussed resignation. His calendar and the log kept by his orderly show that, after a
morning of only two appointments and few telephone calls, none after 10:30 Forrestal
went ot the White House . The entry on his callendar reads, ì12:30: the President (White
House) off-the-record.î He did nto return to his office until 2:20. He then had only four
visitors, the last at 4:15, but he remained in his office alone until 6:35, when he went
home. He left no record of any of this dayís events, but at least one friend came to
understand later that the President at the midday meeting had asked Forrestal to send his
letter of resignation over at once and that this request had been a ìshattering experience.î
p. 553-555
Mr. Johnson was duly appointed and confirmed, and on March 28j, at a brief ceremony
in the central court of the Pentagon Building, Forrestal saw his successor sworn in as
Secretary of Defense. The ex-Secretary drove to the White House to pay his final
respects to the President. There, to his complete surprise, he found that a second
ceremony had been arranged. The Cabinet, the military chiefs and other high officers of
government were waiting for him; in their presence the President himself read a citation
for ìmeritorious and distinguished serviceî and pinned the Distinguished Service Medal
on his civilian coat. ....
.... The effect, unfortunately, was not what had been hoped. With his final departure
from office Forrestal was precipitated into a depression so severe that within a day or two
psychiatriac help seemed imperative. A Navy psychiatrist, Captain George M. Raines,
arrived on the evening of March 31, but did not interview the patient, as he learned that
Eberstadt was due next day, bringing the eminent specialist Dr. William C. Menninger.
It was determined that hospitalization was necessary. On April 2 was flown back to
Washington and admitted that evening to the Naval Hospital at Bethesda, Maryland.
By the end of April he was responding to treatment. He seemed his old self to numbers
of his friends and associates, including the President, whjo visited him. The moods of
depression recurred with decreasing frequency and severity. By the middle of May his
physicians were looking forward to his discharge and as a necessary part of the treatment
they risked relazation of the restraints that had been set around him. ... On the night of
May 22-22 he was reading late in his room on the sixteenth floor; the book was Mark
Van Dorenís Anthology of World Poetry, and he was copying from it William
Mackworth Praedís translation of Sophoclesí ìchorus from Ajax.î

Fair Salamis, the billows roar
Wanders around thee yet,
And sailors gaze upon they shore
Firm Ocean set.
Thy son is in a foreign clime
Where Ida feeds her countless flocks,
Far from they dear, remembered rocks,
Worn by waste of time -
Comfortless, nameless, hopeless save
In the dark prospect of the yawning grave ...
Woe to the mother in her close of day,
Woe to her desolate heart and temples gray,
When she shall hear
Her loved oneís story whispered in her ear!
ìWoe, woe!î will be the cry -

No quiet murmer like the tremulous wail
of the lone bird, the querulous nightingale -
The copying ceased on this word; the sheets were laid in the back of the book and
the book itself set down open at the page. It was three oíclock in the morning.
Forrestal went into a small diet kitchen on the same floor, which he had been
encouraged to use, and fell to his death from its unguarded window.


1950 - 1952
David McCullough, Truman (New York: Simon & Schuster, 1992)
p. 327-328 How Truman honestly felt about Roosevelt can be deduced only from odd
remarks to friends or in his private notes and correspondence, and the picture that
emerges, though incomplete, is not complimentary. He called him Santa Claus. He
called him a prima donna and a fakir. Writing about Bernard Baruch, whom he disliked,
Truman would say, ìThere never was a greater egotist unless it was Franklin D.î
P. 494 His own recent choice as the American representative on the United Naitons
Atomic Energy Commission, Bernard Baruch, was described as wanting ìto run the
world, the moon and maybe Jupiter.î
P. 546 When Bernard Baruch, who had no official position in the Administration, let it be
known that he too wished to have a say in the matter, Truman refused. ìIf you take his
advice,î Truman said, ìthen you have him on your hands for hours and hous, and it is
IhisI policy. Iím just not going to do it. We have a decision to make and weíll make it.î

Roy Jenkins, Churchill (New York: Farrar, Straus and Giroux, 2001)
p. 848 Even in his pre-political days Eisenhower was always a little cold for Churchillís
taste, with the famous smile barely skin-deep. And although Churchill could be ruthless
he was never cold. He preferred Eisenhower with his much wider international
experience to Taft as a 1952 presidential candidate, but he was certainly not a Republican
partisan. On Sunday after the election he told Coville: ìFor your private ear, I am
greatly disturbed . I think that this makes war much more probable. ... Part, but by no
means the whole, of the trouble was John Foster Dulles, the new Secretary of State.
After a dinner with Wisenhower and Dulles at Bernard Baruchís New York apartment on
7 January (1953), the object of which was to promote warm and friendly relations with
the incoming administration, Churchill on going to bed ësaid some very harsh things
about the Republican party in general and Dulles in particular, which Christopher
[Soams] and I [Colville] thought both unjust and dangerous. He said he would have no
more to do with Dulles whose ìgreat slab of a faceî he disliked and distrusted.í....

Ray Howells, Churchillís Last Years (New York: David McKay Company, Inc.,
....The sketches hung either side of the huge open fireplace. Above it was a large
paiting of Lord Randolph Churchill, Sir Winstonís father, sitting at his writing table,
which stood by the window.
Another of the paintings on the walls was a black and white bulldog, really a
symbolic picture of Sir Winston. Above this again hung a pen-and-ink portrait of
Bernard Baruch, a life-long American friend. A large part of two walls was lined with
books, many of them leather bound complete sets.