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CONTENTS
Preface
Introduction • A Memorial
Book I: The Making of a Wall Street Lawyer
Chapter 1 · A Philadelphia Youth: 1895–1912
Chapter 2 · Amherst Years: 1912–16
Chapter 3 · Harvard Law School and the War Years: 1916–21
Chapter 4 · Wall Street: 1921–30
Chapter 5 · Black Tom: McCloy’s Wilderness of Mirrors
Chapter 6 · Cravath, the New Deal, and the Approach of War
Book II: World War II
Chapter 7 · Imps of Satan
Chapter 8 · Internment of the Japanese Americans
Chapter 9 · Political Commissar
Chapter 10 · McCloy and the Holocaust
Chapter 11 · Victory in Europe
Chapter 12 · Hiroshima
Book III: Wall Street, the World Bank, and Germany
Chapter 13 · A Brief Return to Wall Street
Chapter 14 · The World Bank: “McCloy über Alles”
Chapter 15 · German Proconsul: 1949
Chapter 16 · The Dilemma of German Rearmament
Chapter 17 · McCloy and U.S. Intelligence Operations in Germany
Chapter 18 · The Clemency Decisions
Chapter 19 · Negotiating an End to Occupation
Book IV: The Eisenhower Years
Chapter 20 · Chairman of the Chase Manhattan Bank: 1953–60
Chapter 21 · McCloy, McCarthyism, and the Early Eisenhower Presidency
Chapter 22 · Ike’s Wise Man
Book V: The Kennedy Administration
Chapter 23 · Arms Control Czar
Chapter 24 · The Cuban Missile Crisis
Book VI: LBJ’s Wise Man
Chapter 25 · The Warren Commission, a Brazil Coup, Egypt Again, and the 1964 Election
Chapter 26 · McCloy and Vietnam: 1965–68, NATO Crisis, Secret Middle East Negotiations
Book VII: Elder Statesman 1969–89
Chapter 27 · The Establishment at Bay: The Nixon-Kissinger Administration
Chapter 28 · McCloy and the Iran-Hostage Crisis
Twilight Years
Photographs
Acknowledgments
Notes
Picture Credits
Archival Sources
Interviews
Bibliography
Index
FOR SUSAN
“I am not sure who the chairman of the Establishment is today. . . . By a thrust of sheer intuition, though, I did get the name of the 1958 chairman and was rather proud of myself for doing so. In that year; discovered that J. K. Galbraith had for some time been surreptitiously at work in Establishment studies, and he told me that he had found out who was running the thing. He tested me by challenging me to guess the man’s name. I thought hard for a while and was on the point of naming Arthur Hays Sulzberger, of The New York Times, when suddenly the right name sprang to my lips. ‘John J. McCloy,’ I exclaimed. ‘Chairman of the Board of the Chase Manhattan Bank; once a partner at Cadwalader, Wickersham & Taft, and also in Cravath, de Gersdorff Swaine Ó Wood, as well as, of course, Milbank, Tweed, Hope, Hadley and McCloy; former United States High Commissioner in Germany; former President of the World Bank; liberal Republican; chairman of the Ford Foundation and chairman—my God, how could I have hesitated—of the Council on Foreign Relations; Episcopalian.’ “ ‘That’s the one’ Galbraith said.”
RICHARD H. ROVERE, 19611
The American Scholar
PREFACE
This is the first full-scale biography of John J. McCloy. Hundreds of books published in the last thirty years mention McCloy in a paragraph or a footnote. Most books dealing with World War II, postwar Germany, the Kennedy assassination, the Vietnam War, the Cold War, the CIA, or the atomic bomb also mention something of McCloy’s role. Thomas Schwartz’s America’s Germany provides a study of McCloy’s tenure as high commissioner in occupied Germany. And one book, The Wise Men, by Walter Isaacson and Evan Thomas, summarizes his career together with that of five other members of the Establishment. But it is astonishing how little has been published altogether, and how few Americans are familiar with an individual who had so much to do with running the postwar world.
McCloy himself was reluctant to see a biography written, and when I began this project ten years ago, he took the unusual step of sending a letter to the editor of The New York Times Book Review, disavowing the work. He tried to persuade both me and my publisher to abandon the book. Two years later, however, he agreed to a series of meetings, and then interviews. For a brief time, he attempted to write a short memoir of his own, but that project never came to fruition. After nine long interviews during the years 1983–86, he and his family once again made known their desire that no biography be written of him. Because of increasing press criticism for his role in the Japanese American internment and the decision not to bomb Auschwitz, McCloy feared any biography would treat him in a hostile fashion. But his reluctance also came from his deep-seated aversion to seeing himself singled out. Lawyers of his generation and background did not like to see their names in print.
In addition to interviews with McCloy, this book is based on interviews with more than a hundred of his friends and associates. (Some of these interviews were conducted by a former colleague.) Several hundred Freedom of Information Act requests resulted in the release of thousands of pages of formerly classified documents from the State Department, the CIA, the FBI, and many other government agencies. Finally, I gathered more than eighty thousand pages of archival material from the National Archives, the German and British official archives, all eight presidential libraries, and numerous private archives, including McCloy’s own private papers housed at Amherst College.
I hope this book will be read as something more than a conventional biography. McCloy’s life story is also a story of the American Establishment, that elusively defined elite which in many respects still exerts its influence over the democratic polity. McCloy spent his life serving this Establishment, and in most instances he was truly the best representative of this elite club. At the same time, on issues in which the Establishment left a questionable legacy, it can best be examined through the life of one of its more admirable members.
INTRODUCTION: A MEMORIAL
They came quietly, dressed in dark winter overcoats and furs, and crowded into the Brick Presbyterian Church on the fashionable Upper East Side of Manhattan. By 3:00 P.M., there was standing room only inside the church, and some two hundred people, including a throng of reporters, gathered in front of television monitors set up in the basement. Outside, black limousines lined the streets for a block in each direction, and a few policemen stood guard at the doors of the church.
This was an intimate gathering of a self-selected aristocracy of lawyers, bankers, corporate chiefs, and government officials. They were representatives of the old American Establishment, come to pay their respects to the man known as their chairman, John J. McCloy.
They were from institutions he had served for nearly seven decades: lawyers from the Wall Street firms of Milbank, Tweed, Hadley & McCloy, Cravath, Swaine & Moore, and Cadwalader, Wickersham & Taft; investment bankers from Kuhn, Loeb and commercial bankers from Chase Manhattan Bank; and corporate officers from AT&T, Westinghouse, Dreyfus, Squibb, Allied Chemical Co., Metropolitan Life Insurance Co., the Mercedes Benz Corporation, and all the major American oil companies.
Man
y were members of the Council on Foreign Relations, and most belonged to the same clubs he had joined long ago: the New York City Bar Association, the Century Club, the Bond Club, the Links, the Anglers’ Club, and such elusive associations as the discreet Nisi Prius luncheon club, where two members from each of the city’s leading law firms met each month to discuss politics, the law, and business affairs. Former colleagues from the Ford Foundation, the Rockefeller Foundation, the American Council on Germany, the Atlantic Institute, and the Aspen Institute had come. Filling the pews were also men from the World Bank, honoring the man who, forty years ago, had served as midwife to that pillar of the postwar international financial system.
In this crowd, the few politicians and foreign dignitaries seemed almost inconsequential. McCloy would have been amused by the presence of Richard M. Nixon, a man whose bitterness at being shunned for so long by the Establishment had done much to destroy his presidency. But there he was, sitting in the front pew, flanked by the former chancellor of Germany, Helmut Schmidt, and James A. Baker III, the newly sworn-in secretary of state, who would read a letter of homage from President George Herbert Walker Bush.
Despite the resemblance to a state funeral, this was an intimate affair of the Establishment, organized by McCloy’s colleagues from Milbank, Tweed. The ushers were men who, though not always known to the public, ran the country’s leading institutions. There was the former chairman of the Federal Reserve Board, Paul A. Volcker. McGeorge Bundy, the national-security adviser in the Kennedy and Johnson administrations—whom McCloy had selected as president of the Ford Foundation—served as an usher. So too did Perry Richardson Bass, the Texas oil billionaire; Richard M. Furland, the chairman of Squibb Corporation; Peter G. Peterson, once chairman of Lehman Brothers; Shepard Stone, a Ford Foundation and Aspen Institute officer; and Cyrus R. Vance, another corporate lawyer who served as secretary of state in the Carter administration.
When the last available seat had been taken, organ music filled the chamber and the congregation rose to sing the hymn “A Mighty Fortress Is Our God.” Following the reading of McCloy’s favorite Psalm 121, handsome, silver-haired Alexander Forger, the lead partner from Milbank, Tweed, walked briskly to the pulpit and gave the first of nine eulogies. He was followed by former West German President Karl Carstens, former Chancellor Helmut Schmidt, Secretary of State Baker, former Secretary of State Henry Kissinger, David Rockefeller, McCloy’s two young grandsons, and, finally, his only son, John J. McCloy II. They praised a man who, in Forger’s words, “was never impressed with his own self-importance.”
Though he died virtually unknown to most of his countrymen, to these men he was the embodiment of all that was worthy and sound about America. President Bush’s letter, read by James Baker, called him “one of the giants and true heroes in the history of this country. He was a trusted advisor of American Presidents from Franklin Roosevelt to Ronald Reagan.” He never “flagged in pursuing the private and public good. . . . He was a regular presence, always reliable . . . a pioneer in arms control.” The president noted that perhaps his “greatest success” took place in early postwar Germany, where McCloy for three years wielded virtually dictatorial powers over the lives of millions of Germans.
Helmut Schmidt labeled McCloy the “architect of Germany’s rehabilitation from an occupied country to an independent state.” Karl Carstens said he had been “a wise man who had sound judgments about events and men.” David Rockefeller suggested McCloy had been unafraid to take politically unpopular stands, and cited his opposition to the atomic bombing of Hiroshima and his insistence on providing asylum in America for the shah of Iran in 1979.
Kissinger, whose own career owed much to the late “chairman,” compared him to the godfather of a United Europe, Jean Monnet, and observed that McCloy asked of his associates not cleverness, but simple common sense. “John McCloy never served in the Cabinet of any president,” Kissinger said, “and after 1952, never occupied a full-time position in government. Yet few Americans have had a greater impact on their time.”
When the politicians and statesmen had finished speaking, the youngest grandson, Rush Middleton McCloy, a neat, handsome boy who bore a striking resemblance to his grandfather at that age, approached the podium. He remembered how his “Big Papa” had taught him to hunt and fish, and always, always to “run with the swift.” He was, said the boy, “a loving, caring man who always had a lap to crawl into.” And “if Dad and Mom said, ‘No/ I only had to ask Big Papa.”
McCloy’s son, John J. McCloy II, an investment banker, reminded his audience that “Father never liked having attention drawn to himself.” And it was true, the chairman had shunned the limelight. McCloy preferred the shadows of power, the inner recesses of the decision-making process, where men of similar background, usually lawyers like himself, sat in a room together and rationally took the measure of a problem. Rarely in his long career did he attract controversy. Always congenial, he invariably left the impression with his bureaucratic opponents that he was actually sympathetic to their concerns. He could fire a man, and there would be no hard feelings later. As his son now recalled, “Eric Sevareid said Dad had no enemies. . . . He never wanted to take advantage of anything or anyone.”
McCloy had been a lively, athletic man with the chunky body of a wrestler and a bald head. He smiled easily, and with a mischievous gleam in his brown eyes told the kind of stories that made him a popular dinner companion. For almost all of his nearly ninety-four years, he had an abundance of physical energy; on the tennis court he always charged the net. Married to the same woman for fifty-six years, he had been, as David Rockefeller now reminded his audience, “a devoted husband and father.” Kissinger thought him “more like a jovial gnome than a preeminent New York lawyer” To friends and critics, he was an immensely likable man.
No one, however, including McCloy, ever claimed that he was a brilliant jurist or an intellectual. Though he read widely and could “yellowpad” his legal memorandums in half the time it took most lawyers, he was not a man given to introspection. His intelligence was that of a working lawyer, trained in the tradition of Paul Cravath, the creator of the great New York law factories at the turn of the century, to break any problem down into all its pieces and then laboriously put it together again. “Brilliant intellectual powers are not essential/’ Cravath once explained to an audience at Harvard Law School. “Too much imagination, too much wit, too great cleverness, too facile fluency, if not leavened by a sound sense of proportion are quite as likely to impede success as to promote it.” McCloy fit the Cravath mold perfectly.
John J. McCloy’s life mirrored the rise of the American empire. Through his life story as an influential corporate lawyer and presidential adviser, one can understand how power works in the wealthiest and most powerful nation-state created in human history. At one time or another, he was an assistant secretary of war, president of the World Bank, high commissioner to occupied Germany, chairman of Chase Manhattan Bank, chairman of the Ford Foundation, chairman of the Council on Foreign Relations, and chairman of the President’s Advisory Committee on Arms Control and Disarmament. He was legal counsel to all “Seven Sister” oil companies, a board director for a dozen of America’s top corporations, and a private, unofficial adviser to most of the presidents in the twentieth century. He was the ultimate power-broker, a man who was virtually chief counsel to the American century. As John F. Kennedy once described him, he was a “diplomat and public servant, banker to the world, and Godfather to German freedom. . . . He has brought cheerful wisdom and steady effectiveness to the tasks of war and peace.”
His story also encompasses the rise of a new national elite, composed largely of corporate lawyers and investment bankers, who became stewards of the American national-security state. Beginning in the 1920s, these men formed an identifiable Establishment, a class of individuals who shared the same social and political values and thought of themselves as keepers of the public trust. Unlike the British Establishment, from which
the term is borrowed, the American Establishment was dedicated not to preserving the status quo, but to persuading America to shoulder its imperial responsibilities. Most of these men modeled themselves after Henry Lewis Stimson, that paragon of an American lawyer, gentleman, and statesman. One of the country’s earliest corporate lawyers, Stimson served as either war secretary or secretary of state to Presidents William Taft, Herbert Hoover, Franklin Roosevelt, and Harry Truman. His politics became the yardstick by which other members of America’s twentieth-century Establishment judged themselves and the world. A Theodore Roosevelt Republican, Stimson acted out his mentor’s motto to “speak softly and carry a big stick.” A fervent internationalist, Stimson believed America should engage itself with the rest of the world and always be willing to negotiate with its adversaries within forums like the World Court, the League of Nations, and, later, the United Nations. But he also was a founding member, together with another liberal Republican lawyer, Grenville Clark, of the pre-World War I “military-preparedness movement/’ which ingrained in a generation of young Americans, including McCloy, the notion that the peace could only be assured by thoroughly preparing for war. Stimson bequeathed a complicated blend of toughness, idealism, and rationality to the men who considered him their mentor. Like him, they became part American puritan and part imperial warrior, dedicated to building a Pax Americana.
Later in life, McCloy used the Latin word gravitas to describe the few men of sound judgment, men in whom the republic placed its trust, not because of their status or rank, but because they possessed a balanced, centered understanding of the complexities of life. “ ‘Gravitas’ did not imply age or brilliance, and, least of all,” McCloy said, “a style or school of thought. It means a core, a weight of judgment and honest appraisal.” These few men of gravitas were entitled to the public’s trust, for only they were capable of dealing with what McCloy frequently called the “imponderables” of public policy.