Our Finest Hour

Will Clayton, the Marshall Plan, and the Triumph of Democracy

Gregory A. Fossedal

• Publisher: Hoover Institution Press
• Year: 2021
• Print ISBN: 9780817992019
• eBook ISBN: 9780817992033
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

William L. Clayton was "the principal architect of American post-war foreign economic policy" ( Newsweek), yet his seminal contributions to the General Agreement on Tariffs and Trade (GATT), the Marshall Plan, and the Truman Doctrine have been largely ignored over the past four decades. This gap in the story of free-world cooperation is filled by Gregory Fossedal's vivid biography.

1. An Offer Declined

Mr. President, I can see where you are heading,” Will Clayton said, “but I just can’t. My family. . . .” Uncharacteristically his voice trailed off. Harry Truman repeated that he was talking about the job of secretary of state. “I need the best man available,” he said, and in his opinion that meant Clayton. Truman knew about Clayton’s problems with his vociferous, strong-willed wife, Sue. Even before the end of World War II, she had wanted them to leave Washington, where she felt her husband was overworked and where she had become exhausted. But this was a matter of national interest.

No, Clayton insisted. He had promised his wife they would soon be going back home to Houston. Washington and the war had taken more than five years of their lives, and Clayton, age sixty-six, was not a young man.

“We shouldn’t pursue this any further,” Clayton told the president. Truman later told Senator Claude Pepper that Clayton “said it reluctantly and fast, like he was getting something out he had to say before he changed his mind.”¹

* * *

We can’t know what other words passed between Truman and Clayton, so it is difficult to say just how far matters would have gone if Clayton had responded differently to Truman’s probe.* History records few examples of a presidential offer to serve as secretary of state being declined. It may be equally rare to find a case where the family considerations so often professed as a reason for refusing high office actually were the actor’s prime motive.

But Clayton’s family problems were real. His wife of more than forty years was suffering from arteriosclerosis, causing her an exasperating loss of memory. She desperately wanted to leave Washington and regain her husband’s full attention. Within a few years, she would (briefly) divorce him.

On at least two recorded occasions, Truman confirmed the essence of this remarkable story.⁶ As a Truman aide recorded on April 19, 1949, the day a story on Mrs. Clayton’s divorce action ran in the New York Times,

At our staff meeting the President mentioned the story and said that if it had not been for Mrs. Clayton, her husband would have been secretary of state. Clayton served the government for several years in several posts and, although wealthy and the head of one of the largest cotton merchandising firms in the world, gave unstintingly of his time and energy.

The President said that he wanted to appoint Clayton secretary of state at the time Marshall was named and that it was due to Mrs. Clayton that the appointment was not made. I recall that about that time there was mention on one or two occasions of her efforts to have Clayton get out of the government and return to their home in Texas and it was my understanding that that was the principal reason for his refusal to take any other government post.⁷

Historians must devote their primary energies to what did happen, not to history’s might-have-beens. Will Clayton did not become secretary of state. He did act as a participant, catalyst, and in some cases prime mover of such critical acts of statecraft as the Bretton Woods agreement on international monetary policy and trade cooperation, the Marshall Plan, and the Truman Doctrine to aid freedom fighters in Greece and Turkey when those countries were pressured by Soviet-backed rebels and Soviet military threats in the late 1940s.

In this instance, however, what Clayton did not do—sacrifice his wife’s peace of mind to move up another rung on the political ladder—gives us a measure of the man. It suggests someone serious about the sanctity of marriage, which for too many leaders has been merely a pious platitude. Nor did he reject Truman’s offer because he was slowing down with age; he was famous for his fourteen-hour days and his long, energetic strides through the State Department’s corridors. Slender and tall (six feet, three-and-one-half inches), he was strikingly handsome, with an olive complexion, dark, partially gray hair, and alert hazel eyes. He felt he had contributed his talents to the nation’s war effort and was content with his place in history.

In fact, he was one of the few men who served in Washington, D.C., in those critical years who did not write his memoirs or cultivate a biographer.⁸ The deeds of Dean Acheson, Cordell Hull, Henry L. Stimson, Charles Bohlen, Jesse H. Jones, George C. Marshall, George F. Kennan, James A. Forrestal, Paul H. Nitze, Edward R. Stettinius, David E. Lilienthal, Harold M. Ickes, Harry L. Hopkins, Henry Morgenthau, Bernard M. Baruch, James F. Byrnes, W. Averell Harriman, and Henry A. Wallace are deservedly collected and recorded. Clayton, by contrast, although certainly proud of his service, showed little anxiety about having his own historical niche preserved.

This book is meant to be Will Clayton’s memoirs. The author is not a historian but an avid student of history, hoping to fill a gap left by historians. There is more at stake, however, than the recognition of Clayton’s role in history. A full understanding of any event depends on a complete account of those who shaped it; what their aims, motives, and strategies were; and how they succeeded or were frustrated in their designs.

Consider the Truman Doctrine, which promised U.S. support for all countries struggling for democracy and offered a rationale for the program of U.S. aid to postwar Greece and Turkey. Historians, and even a few of the principals, have made two common assumptions about the Truman Doctrine’s evolution. The first concerns the sheer chronology of events. It is widely assumed, perhaps chiefly because of Dean Acheson’s dramatic and eloquent account, that the doctrine was a case of crisis management at its best, emerging in the aftermath of a stunning British decision to cut off aid to the Greek government—a decision announced so as to give the United States only a few weeks to act if it meant to fill the vacuum.⁹

This assumption lends credence to a second stream of thought about the doctrine as such—a stream that, being broad and contemporary in nature, may greatly undermine the cause of clear thinking about the principles of strategy. Its champion is one of the principals, George F. Kennan, a respected expert on Soviet affairs at the time the doctrine was enunciated; soon to be head of the new Policy Planning Staff at the State Department. Kennan argues that the Truman Doctrine was something of an afterthought, the creation of a few zealots trying to devise a broad rationale for opposing communism. “I believe,” Truman told a joint session of Congress in March 1947, “it must be the policy of the United States to support free peoples who are resisting subjugation by armed minorities or by outside pressures.” From this statement, and buttressed by the general consensus that the doctrine was indeed promulgated amid a crisis-management background, Kennan concludes that “all another country had to do, in order to qualify for American aid, was to demonstrate the existence of a Communist threat.”¹⁰

To consider Clayton’s contribution to the process, however, is to view the meaning of the Truman Doctrine in a revised light. He had taken action pointing toward the policy at least as early as August 1946. On August 23, he received a memorandum from the Joint Chiefs of Staff outlining the growing threat to Greece and Turkey from Soviet-backed forces and the weakening will of the British to intervene decisively.¹¹ He promptly put a pair of study teams on the problem, and soon a stream of reports flowed from Clayton and his assistants: “a succession of state papers and despatches,” as the British historian Alan Bullock wrote, that served as “a preliminary sketch of the Truman Doctrine.”¹²

Less than three weeks later, Clayton submitted a recommendation (with the agreement of the secretary of war and under secretary of the navy) for an immediate relaxation of U.S. restrictions on arms exports to the embattled countries. Byrnes approved.¹³ Within weeks, Clayton had consulted with Greek and Turkish officials about expanding credits to them. On September 25, 1946, he met with the secretaries of war and navy to discuss integrating the supply of arms and emergency materials with a broad program of European recovery.

“Here was the concept,” historian Walter Millis writes, “of giving political precision to our use of our economic and military resources; a concept that first took important shape in the ‘Truman Doctrine’ of the Greek-Turkish aid, and was to broaden very rapidly thereafter.”¹⁴ By October, Bullock concludes, Clayton and such key colleagues as Byrnes, Forrestal, and Loy W. Henderson had achieved “a reversal of earlier American policy and tacit acceptance of [the British] argument that the USA had as great an interest as Britain in seeing the buffer zone of the Northern Tier preserved intact.”¹⁵

If the conventional understanding of an improvised policy is wrong, then Kennan’s complaint—that U.S. foreign policy had become unconsciously or unduly messianic—may be overstated. It detracts nothing from Kennan’s achievements, for example, to note that he had not been in the State Department at the time Clayton, as acting secretary, lay the groundwork for what became the doctrine or to note that Kennan was out of town the weekend the British surprised Acheson with their cable about rapidly withdrawing their support from Greece and Turkey. Kennan evidently did not know that Clayton had promoted something like Kennan’s preferred, more limited doctrine in a memorandum to Byrnes the previous September 12:

You will, of course, understand that it is not our idea that we should begin to sell military-type equipment immediately in large quantities to various countries subject to external pressure. We feel, however, that the new policy should enable us, with the discretion and restraint required by the circumstances, to supply military-type equipment to countries such as those in the Near and Middle East, the maintenance and integrity of which are considered to be of important interest to the United States.¹⁶

Having tried to rally support in the bureaucracy, the Congress, and the public, however, Clayton witnessed firsthand some of that doctrine’s crippling limitations. For one thing, the discretion for maneuver opened up by such cautious and limited rhetoric was itself limited. American aid in such small amounts failed to turn the tide in either Greece or Turkey over the following six months. It also failed to generate the interest of the U.S. electorate.

By the spring of 1947, Europe was on the brink of collapse, and a policy of half-measures—aid and credits through competing agencies, arms sales to Greece and Turkey—had been tried and found insufficient. It was in this environment that Clayton joined those, including Truman, who felt U.S. policy ought to involve bold action and be articulated in the broadest possible terms. As Clayton wrote in a March 5, 1947, memorandum:

The United States must take world leadership and quickly, to avert world disaster.

But the United States will not take world leadership, effectively, unless the people of the United States are shocked into doing so.

To shock them, it is only necessary for the President and the Secretary of State to tell them the truth and the whole truth.¹⁷

Thus where Kennan complained of the “congenital aversion of the Americans to taking specific decisions on specific problems,” Clayton saw a government and a public able to act with alacrity if given a policy that might reasonably be expected to succeed.¹⁸ Where Kennan saw the idea that we should assist those seeking to “work out their own destiny in their own way” as an open-ended commitment to total victory everywhere, Clayton distinguished sharply between levels of assistance. After all, the United States might support the aspirations of all people to be free but do so in very different ways as prudence governs. We might fight a war with some countries, as we just had in Europe. We might offer massive economic aid to other countries or in other circumstances, as we did repeatedly after the war, most notably through United Nations relief agencies in 1945 and 1946, in the Marshall Plan, and through such U.S. and international agencies as the Export-Import Bank, the International Monetary Fund, and the World Bank throughout the entire postwar era.

We might in other cases limit our assistance to mere rhetorical support or public diplomacy. Even as Truman spoke, a much smaller U.S. intervention, limited chiefly to diplomatic pressure and threatening troop and naval movements, had apparently succeeded in prompting the withdrawal of Soviet troops from Iran. Clayton’s March 5 memorandum, picking up on a suggestion by Paul H. Nitze, proposed an effort to rebuild all of Europe on $5 billion a year—not a negligible figure but hardly unbearable, as Clayton noted, considering that “the war cost us over three hundred billion dollars.”¹⁹

Besides, one can sometimes avoid large exertion later by means of a small effort now. “It will be said,” Clayton wrote, that the broad strokes of a U.S. doctrine “will involve us in the affairs of foreign countries and lead us eventually to war. The answer to this is that if we do not actively interest ourselves in the affairs of foreign countries, we will find such affairs will become . . . hopeless.”

Finally, Clayton drew a sharp distinction that Kennan failed to draw, even in his memoirs. Kennan wrote: “It [the Truman Doctrine] implied that what we had decided to do in the case of Greece was something we would be prepared to do in the case of another country, provided only that it was faced with the threat of ‘subjugation by armed minorities or outside pressures.’”²⁰ But Truman had spoken of “free peoples” resisting subjugation, not merely any country that claims to be anticommunist.

Moreover, Kennan was not even in the State Department when Clayton, Nitze, Henderson, George McGhee, Emilio Collado, and others were busy collecting and crafting much of the material that later emerged as the Truman Doctrine. The tendency in many recent historical writings—to minimize or ignore the contributions of Clayton and his talented staff—is thus damaging to a clear understanding of the events and their significance.

Another example of this neglect can be seen in accounts of the Marshall Plan, possibly the finest hour of U.S. diplomacy. Clayton’s memorandums of March 5 and May 27, 1947, each proposing a vast European recovery program, were two key documents leading to George C. Marshall’s June 4 speech at Harvard and the successful negotiation with the Europeans that followed that summer and fall. The other key document was Kennan’s May 23 draft, written a few weeks after he began studying Europe’s economic crisis for Secretary Marshall as head of the Policy Planning Staff. In The Fifteen Weeks, Joseph Jones, then a speechwriter at the State Department, wrote: “Acheson promptly sent the [Clayton] memorandum into the Secretary and arranged a meeting for that day. Th...

Table of contents

• Cover
• Contents
• Foreword
• Acknowledgments
• 1. An Offer Declined
• 2. From forth War's Bosom
• 3. To Dare Mighty Things
• 4. Into the Arena
• 5. Waging the Warehouse Wars
• 6. The War within the War
• 7. Economic Statecraft: Crafting Bretton Woods
• 8. Between Taft and Keynes: Selling Bretton Woods
• 9. Year of Nondecisions: The Road to Hiroshima
• 10. Potsdam and the Morgenthau Plan
• 11. The Battle of (Lending) Britain
• 12. Marshall's Team and the Greek Crisis
• 13 The Fifteen Weeks: Clayton's Memorandums
• 14. Summer 1947: From Marshall's Speech to a Plan
• 15. Final Challenges
• 16. Will Clayton's Legacy
• Photograph Section
• Notes
• Bibliography
• About the Author