TRAGEDY AND HOPE Chapters XVII-XVIII by Dr. Carroll Quigley ISBN 0913022-14-4
XVII. NUCLEAR RIVALRY AND COLD WAR, AMERICAN NUCLEAR SUPERIORITY 1950- 1957 XVIII. NUCLEAR RIVALRY AND COLD WAR, RACE FOR THE H-BOMB 1950-1957
CHAPTER XVII: NUCLEAR RIVALRY AND THE COLD WAR: AMERICAN ATOMIC SUPREMACY 1945-1950
Page 873 The period 1945 to early 1963 forms a unity during which a number of factors interacted upon one another to present a very complicated and extraordinarily dangerous series of events. That mankind and civilized life got through the period may be attributed to a number of lucky chances rather than to any particular skill among the two opposing political blocs. The Cold War is almost always described in terms which put minor emphasis or even neglect the role of technological rivalry because most historians do not feel competent to discuss it but chiefly because much of the evidence is secret. Because of such secrecy, the story of this rivalry falls into two quite distinct and even contradictory parts: 1) what the real situation was; and 2) what prevalent public opinion believed the situation to be. For example, the Soviet Union had an H-bomb many months before we did when public opinion believed the opposite; the 1960 believe throughout the world of a so-called "missile gap" or American inferiority in nuclear missiles when no such inferiority existed.
Page 875 The balance of nuclear weapons was the central factor in the Cold War. Cessation on nuclear testing came close to achievement in 1950 when both sides had atomic weapons but was destroyed at that time by President Truman's order to proceed with the development of the hydrogen bomb. By 1963, both sides had these weapons and the balance of terror had been achieved.
Page 879 The party struggle in the U.S. found the intellectuals (including scientists), the internationalists, the minorities and the cosmopolitans in the Democratic Party with the businessmen, bankers and clerks in the Republican Party. The Republicans had fallen into the control (represented by Senators Taft, Wherry, Bridges and Jenner) of those who were most ignorant of the real issues and were most remote from any conceptions of national political responsibility.
Page 880 This group, to whom we often give the name "neo-isolationist," knew nothing of the world outside the U.S., and generally despised it. Thus, they gave no consideration to our allies or neutrals, and saw no reason to know or to study Russia, since it could be hated completely without need for accurate knowledge. All foreigners were regarded as unprincipled, weak, poor, ignorant and evil, with only one aim in life, namely, to prey on the United States. These neo-isolationists and unilateralists were equally filled with suspicion or hatred of any American intellectuals, including scientists, because they had no conception of any man who placed objective truth higher than subjective interests since such an attitude was a complete challenge to the American businessman's assumption that all men are and should be concerned with the pursuit of self-interest and profit. Neo-isolationism had a series of assumptions which could not be held by anyone who had any knowledge of the world outside U.S. middle- class business circles. These beliefs were seven in number: 1) Unilateralism: that the U.S. should and could act by itself without need to consider allies, neutrals or the Soviet Union; 2) National omnipotence: that the U.S. is so rich and powerful that no one else counts and that there is no need to study foreign areas, customs, policies;
Page 881 3) Unlimited goals (or utopianism): the belief that there are final solutions to the world's problems. Upholders of this view refused to accept that constant danger and constant problems were a perpetual condition of human life except in brief and unusual circumstances. Dulles insisted that the Truman policy of containment must be replaced by a policy of "liberation." These policies were not designed to win conclusively and did not seek to solve the problem of the Soviet Union but to live with it, "presumably forever." He did accept preventive war in the form of massive retaliation if the Communists made any further advances. 4) The neo-isolationist belief that continuance of the Soviet threat arose from internal treason within America.
Page 882 5) Since the chief "high moral principle" which motivated the neo- isolationists insisted that Soviet Russia and Democrats were engaged in a joint tacit conspiracy to destroy America by high taxes by using the Cold War to tax America into bankruptcy 6) Since neo-isolationists rejected all partial solutions, there was little they could do but talk loudly and sign anti-communist pacts. 7) The unrealistic and unhistoric nature of neo-isolationism meant that it could not actually be pursued as a policy. It was pursued by John Foster Dulles with permanent injury to our allies. When Senator McCarthy turned his extravagant charges of subversion and treason from the State Department to the army, his downfall began. The neo- isolationist forces still continue in an increasingly irresponsible form under a variety of names including John Birch Society members or more generally as the "Radical Right."
Page 885 Robert Oppenheimer was on a total of thirty five government committees. There was a shadow on Oppenheimer's past. In his younger and more naive days, he had been closely associated with Communists. Certainly never a Communist himself, and never, at any time, disloyal to the U.S., he had nonetheless associated with Communists. His brother Frank and his wife were Communist Party workers while Oppenheimer's own wife was an ex-Communist, widow of a Communist who had been killed fighting Fascism in Spain in 1937. The Oppenheimers continued to have friends who were Communists and contributed money until the end of 1941.
Page 886 All this derogatory information was known to General Groves and to Army Intelligence and used in 1953-1954 to destroy his reputation. It was an essential element in the neo-isolationist McCarthyite, Dulles interregnum of 1953-1957.
THE ORIGINS OF THE COLD WAR, 1945-1949
Page 891 IN the Soviet system, while most Russians lived in poverty, a privileged minority, buying in special stores with special funds and special ration cards, had access to luxuries undreamed of by the ordinary person.
Page 900 In 1944, Secretary of the Treasury Morgenthau took advantage of his close personal friendship with Roosevelt to push forward his own pet scheme to reduce Germany to a purely agricultural state by almost total destruction of her industry, the millions of surplus population to be, if necessary, deported to Africa. The secretary, supported by his assistant secretary, Harry Dexter White, was deeply disturbed by Germany's history of aggression. The only way to prevent it was to reduce Germany's industry and thus her warmaking capacity as close to nothing as possible. The resulting chaos, inflation, and misery would be but slight repayment for the horrors Germany had inflicted on others over many years. By personal influence, Morgenthau obtained acceptance of a somewhat modified version of this plan by both Roosevelt and Churchill at the Quebec conference of September 1944. The error at Quebec was quickly repudiated but no real planning was done and the Morgenthau Plan played a considerable role in the JCS 1067, the directive set up to guide the American military occupation of Germany. It proposed reparations be obtained by dismantling Germany industry. The JCS 1067 directive ordered that Germany be treated as a defeated enemy and not as a liberated country. No steps were taken to secure its economic recovery.
Page 901 At the Potsdam conference, it was agreed that the German economy should not be permitted should not be permitted to recover higher than the standard of living of 1932, at the bottom of the depression, the level, in fact, which had brought Hitler to power in 1933. It took more than two years of misery for Germany to secure any changes in these American objectives. Hunger and cold took a considerable toll, and the Germans, for two years, experienced some of the misery they had inflicted on others in the preceding dozen years. The Germany currency reform of 1948 is the fiscal miracle of the post-war world. From it came (1) an explosion of industrial expansion and economic prosperity for West Germany; (2) they tying of the West Germany economy to the West; (3) an example for other western European in economic expansion; and (4) a wave of prosperity for western Europe as a whole.
AMERICAN CONFUSIONS, 1945-1950
Page 909 The American response to the Soviet refusal of postwar cooperation was confused and tentative. Winston Churchill in June 1946 spoke of the "Iron Curtain" which Staling was lowering between the Soviet bloc and the West. Lasting from 1947-1953, the chief characteristics of "containment" were economic and financial aid to other nations to eliminate the misery and ignorance which fosters communism.
Page 910 Americans, when goals are established as they are in war, work together very effectively, but political work in peacetime, with its ambiguous goals, is relegated to rivalry, bickering, and total inability to relate means to goals. As a result, the means themselves tend to become goals.
Page 911 Each service has alliances with the industrial complexes which supply their equipment. These complexes not only supply funds for each service to carry its message to the Congress but also exert every influence to retain equipment by dangling before the high officers who can influence contracts, offers of future well-paying consultant positions with the industrial firms concerned. Most high officers retired and then took consultant jobs with those firms.
Page 912 Four-star general Somervell retired on a disability salary of $16,000 to join a number of firms which paid him R$125,000 a year; three-star general Campbell retired on a disability salary of $9,000 and became an executive at $50,000 a year of firms from whom he had previously purchased $3 billion in armaments; four-star general Clay retired on $16,000 a year but signed up at over $100,000 a year. These are but a few of more than a hundred general officers whose post retirement alliances with industrial firms encouraged their successors, still on active service, to remain on friendly terms with such appreciative business corporations.
Page 919 Pearl Harbor was a total surprise. This last point was so hard to believe, once the evidence was available, that the same groups who were howling about Soviet espionage in 1948-1955 were also claiming that Roosevelt expected and wanted Pearl Harbor. Both these beliefs, if they were believed, were based on gigantic ignorance and misconceptions about the nature of intelligence.
Page 921 A great deal of nuclear information (whether secret or not is unknown) as well as uranium metal, went to the Soviet Union as part of Lend-Lease in 1943. Major George Racey Jordan, USAAF, tried in vain to disrupt these shipments at the time. While most of Jordan's evidence is unreliable, the shipment of uranium to Russia is corroborated from other sources. The export licenses for such shipments were granted at the request of General Groves. Jordan's other evidence, most of which was very discreditable to the New Deal (since he testified that he, Groves, and others were under direct pressure from Harry Hopkins to allow export of nuclear materials) was subsequently shown to be false.
Page 923 Much of the evidence on the Communist movement came from ex- Communists such as Elizabeth Bentley, Louis Budenz, Whittaker Chambers, John Lautner and others. The first three names mentioned are known because they dramatized, distorted and manipulated evidence for their own private purposes. This is particularly true of Elizabeth Bentley who exaggerated her role.
Page 925 The House Un-American Committee was aimed more at partisan advantage than ascertaining the nature of the Communist conspiracy. the truth cannot now be ascertained. Numerous other accused Communists, both in government and out, whose names were given to the committee in the same breath as Hiss or Lattimore were almost totally ignored.
Page 927 Others called before the committee who refused to give evidence under the Fifth Amendment which protects against self-incrimination were in fact Communists and Bentley and Chambers knew them as such.
Page 938 The revelation of Communist influence in the U.S. was undoubtedly valuable but the cost in damage to reputations of innocent persons was very high. Much of this damage came from the efforts of Senator Joseph McCarthy, Republican, of Wisconsin to prove that the State Department and the army were widely infiltrated with Communists.
Page 939 McCarthy was not a conservative, still less a reactionary. He was a fragment of elemental force, a throwback to primeval chaos. He was the enemy of all order and all authority, with no respect, or even understanding, for principles, laws, regulations, or rules. As such, he had nothing to do with rationality or generality. Concepts, logic, distinctions of categories were completely outside his world. It is clear he did not have any idea what a Communist was, still less Communism itself, and he did not care. This was simply a term he used in his game of personal power. Most of the terms which have been applied to him, such as "truculent," "brutal," "ignorant," "sadistic," "foul-mouthed," "brash," are quite correct but not quite in the sense that his enemies applied them, because they assumed that these qualities and distinctions had meaning in his world as they did in their own. They did not, because his behavior was all an act, the things he did to gain the experience he wanted, that is, the feeling of power, of creating fear, of destroying the rules, and of winning attention and admiration for doing so. His act was that of Peck's Bad Boy but on a colossal scale. He sought fame and acclaim by showing an admiring world of schoolmates what a tough guy he was, defying all the rules, even the rules of decency and ordinary civilized behavior. But like the bad boy of the schoolyard, he had no conception of time or anything established, and once he had found his act, it was necessary to demonstrate it every day. His thirst for power, the power of mass acclaim and publicity, reached the public scene at the same moment as television, and he was the first to realize what could be done by using the new instrument for reaching millions. His thirst for power was insatiable because like hunger, it was a daily need. It had nothing to do with the power of authority or regulated discipline, but the personal power of a sadist. All his destructive instincts were against anything established, the wealthy, the educated, the well-mannered, the rules of the Senate, the American party system, the rules of fair play. As such, he had no conception of truth or the distinction between it and falsehood, just as he had no conception of yesterday, today, tomorrow as distinct entities. He simply said whatever would satisfy, momentarily, his yearning to be the center of the stage surrounded by admiring, fearful, shocked, amazed people. He did not even care if their reaction was admiration, fear, shock, or amazement and he did not care if they, as persons, had the same reaction or a different one the next day or even a moment later. He was exactly like an actor in a drama, one in which he had made the script as he went along, full of falsehoods and inconsistencies, and he was genuinely surprised and hurt if a person whom he had abused and insulted for hours at a hearing did not walk out with him to a bar or even to dinner the moment the hearing session was over. He knew it was an act; he expected you to know it was an act. There was really no hypocrisy in it, no cynicism, no falsehood, as far as he was concerned, because he was convinced that this was the way the world was. Everyone he was convinced, had a racket; this just happened to be his, and he expected people to realize this and to understand it.
Page 930 Of course, to the observant outsider who did not share his total amorality, it was all false, invented as he went along, and constantly changed, everything substantiated by documents pulled from his briefcase and waved about too rapidly to be read. Mostly these documents had nothing to do with what he was saying; mostly he had never looked at them himself; they were merely props for the performance, and to him, it was as silly for his audience to expect such documents to be relevant as it would be for the audience in a theater to expect the food that is being eaten, the whiskey that is being drunk, or the documents which are read in that play to be relevant to what the actor is saying. Every time he spoke, with each version he became a larger more nonchalant hero. In 1952, he intimidated the Air Force into awarding him the Distinguished Flying (given for twenty five combat missions) although he had been a grounded intelligence officer who took occasional rides in planes. Since laws and regulations were, for McCarthy, nonexistent, his business and financial affairs are, like his life, a chaos of illegalities.
Page 931 He seized upon Communism. "That's it," he said. "The government is full of communists. We can hammer away at them." Without any real conception of what he was doing, and without any research or knowledge of the subject, on February 9, McCarthy waved a piece of paper and said "I have here in my hand a list of 205 members of the Communist Party still working and shaping the policy of the State Department.
Page 932 On Feb 20th, in an incoherent speech in the Senate was six hours of bedlam, as case after case was presented filled with contradictions and irrelevancies. According to Senate Republican Leader Taft, "It was a perfectly reckless performance." Nevertheless, Taft and his colleagues determined to accept and support these charges since they would injure the Administration. Few people realize that in five years of accusations, McCarthy never turned up a Communist in the State Department although undoubtedly there must have been some.
Page 933 He claimed that "the top Russian espionage agent" in the U.S., Alger Hiss's boss in the State Department, "the chief architect of our Far Eastern policy" was Professor Owen Lattimore. The trouble was Lattimore was not a Communist, not a spy, and not employed by the State department. In July, the Tydings subcommittee condemned McCarthy for a "fraud and a hoax." McCarthy had the power of an inflamed and misled public opinion. Tydings was beaten in Maryland in 1950. Benton from Connecticut who introduced the resolution to expel McCarthy from the Senate in 1951 and whose charges were fully supported by the Senate's investigation of McCarthy's private finances, was defeated in 1952. During this period, McCarthy violated more laws and regulations than any previous senator in history. When a reporter once said "Isn't that a classified document?" McCarthy said, "It was. I just declassified it."
Page 934 Eisenhower was soon boasting that 1,456 Federal workers had been "separated" in the first four months of the Eisenhower security program. 2,200 at the end of the first year. Nixon said "We're kicking the Communists and fellow travellers and security risks out of the Government by the thousands." It was soon clear that no Communists were kicked out and that security risks included all kinds of persons. For a while, the Administration tried to outdo McCarthy by demonstrating in hearings that China had been "lost" to the Communists because of the careful planning and intrigue of Communists in the State Department. But they failed to prove their contention.
Page 935 There is considerable truth in the China Lobby's contention that the American experts on China were organized into a single interlocking group which had a general consensus of a Leftish character. It is also true that this group, from its control of funds, academic recommendations, and research of publication opportunities, could favor persons who accepted the established consensus and could injure, financial or in professional advancement, persons who did not accept it. It is also true that the established group, by its influence on book reviewing in the New York Times, the Herald Tribune and the Saturday Review, a few magazines including the "liberal weeklies" and in the professional journals, could advance or hamper any specialist's career. It is also true that these things were done in the United States by the Institute of Pacific Relations, that this organization had been infiltrated by Communists, and by Communist sympathizers, and that much of this group's influence arose from its access to and control over the flow of funds from financial foundations to scholarly activities. All these things were true, but they would have been true of many other areas of American scholarly research and academic administration. On the other hand, the charges of the China Lobby that China was "lost" because of this group is not true. Yet the whole subject is of major importance in understanding the twentieth century.
Page 936 Lattimore, because he knew Mongolian, tended to become everybody's expert. Many of these experts which were favored by the Far East "establishment" in the Institute of Pacific RElations were captured by Communist ideology. Under its influence, they propagandized, as experts, erroneous ideas and sought to influence policy in mistaken directions. Behind this unfortunate situation lies another, more profound, relationship, which influences matters much broader than Far Eastern policy. It involves the organization of tax-exempt fortunes of international financiers into foundations to be used for educational, scientific, and "other public purposes." Sixty or more years ago, public life in the East was dominated by the influence of "Wall Street" referring to international financial capitalism deeply involved in the gold standard, foreign exchange fluctuations,floating of fixed-interest securities and shares for stock-exchange markets.
Page 937 This group, which in the United States, was completely dominated by J.P. Morgan and Company from the 1880s to the 1930s was cosmopolitan, Anglophile, internationalist, Ivy League, eastern seaboard, high Episcopalian and European-culture conscious. Their connection with the Ivy League colleges rested on the fact that large endowments of these institutions required constant consultation with the financiers of Wall Street and was reflected in the fact that these endowments were largely in bonds rather than in real estate or common stocks. As a consequence of these influences, J.P. Morgan and his associates were the most significant figures in policy making at Harvard, Columbia and Yale while the Whitneys and Prudential Insurance Company dominated Princeton. The chief officials of these universities were beholden to these financial powers and usually owed their jobs to them. The significant influence of "Wall Street" (meaning Morgan) both in the Ivy League and in Washington explains the constant interchange between the Ivy League and the Federal Government, and interchange which undoubtedly aroused a good deal of resentment in less-favored circles who were more than satiated with the accents, tweeds, and High Episcopal Anglophilia of these peoples. Poor Dean Acheson, in spite of (or perhaps because of) his remarkable qualities of intellect and character, took the full brunt of this resentment from McCarthy and his allies. The same feeling did no good to pseudo-Ivy League figures like Alger Hiss.
Page 938 In spite of the great influence of this "Wall Street" alignment, an influence great enough to merit the name of the "American Establishment," this group could not control the Federal Government and, in consequence, had to adjust to a good many government actions thoroughly distasteful to the group. The chief of these were in taxation law, beginning with the graduated income tax in 1913, but culminating above all else with the inheritance tax. These tax laws drove the great private fortunes dominated by Wall Street into tax- exempt foundations which became the major link in the Establishment network between Wall Street, the Ivy League and the Federal government. Dean Rusk, Secretary of State after 1961, formerly president of the Rockefeller Foundations, is as much a member of this nexus as Alger Hiss, the Dulles brothers, Jerome Green, etc. More than fifty years ago, the Morgan firm decided to infiltrate the Left-wing political movements of the United States. This was relatively easy to do since these groups were starved for funds and eager for a voice to reach the people. Wall Street supplied both. The purpose was not to destroy, dominate, or take over but was really three-fold: 1) to keep informed about the Left-wing or liberal groups; 2) to provide them with a mouthpiece so they could blow off steam; 3) to have a final "veto" on their actions if they ever went radical. There was nothing really new about this decision, since other financiers had talked about it and even attempted it earlier. The best example of the alliance of Wall Street and Left-wing publication was "The New Republic" a magazine founded in 1914 by Willard Straight using Payne Whitney money. The original purpose for establishing the paper was to provide an outlet for the progressive Left and to guide it in an Anglophile direction. This latter task was entrusted to Walter Lippmann. Willard Straight, like many Morgan agents, was present at the Paris Peace Conference in 1919.
Page 940 The first New Republic editor,Herbert Croly wrote, "Of course, the Straights could always withdraw their financial support if they ceased to approve of the policy of the paper;and in that event, it would go out of existence as a consequence of their disapproval." The chief achievement of The New Republic in 1914-1918 and again in 1938- 1948 was for interventionism in Europe.
Page 942 Straight allowed the Communists to come into the New Republic. The first to arrive was Lew Frank.
Page 944 Frank joined a "Communist Research Group" which met in the Manhattan home of the wealthy "Wall Street Red," Frederick Vanderbilt Field.
Page 945 To Morgan, all political parties were simply organizations to be used, and the firm always was careful to keep a foot in all camps. Like the Morgan interest libraries, museums and art, its recognition of the need for social work among the poor went back to the original founder of the firm, George Peabody. To this same figure may be attributed the use of tax-exempt foundations for controlling these activities as in the use of Peabody foundations to support Peabody libraries and museums. Unfortunately, we do not have space here for this great and untold story, but it must be remembered that what we do say is part of a much larger picture. Our concern at the moment is with the links between Wall Street and the Left, especially the Communists. Here the chief link was the Thomas W. Lamont family. Tom Lamont was brought into the Morgan firm, as Straight several years later, by Henry P. Davison, a Morgan partner. Each had a wife who became a patroness of Leftish causes and two sons, of which the elder was a conventional banker, and the youngest was a Left-wing sympathizer and sponsor. HUAC files show Tom Lamont, his wife Flora, and his son Corliss as sponsors and financial angels to almost twenty extreme Left organizations, including the Communist Party itself.
Page 946 In 1951, the McCarran Committee sought to show that China had not been lost to the Communists by the deliberate actions of a group of academic experts on the Far East and Communist fellow travellers whose work in that direction was controlled and coordinated by the Institute of Pacific Relations (IPR). The influence of the Communists in the IPR is well established but the patronage of Wall Street is less well known. The IPR was a private association of ten independent national councils in ten countries concerned with affairs in the Pacific. Money for the American Council of the IPR came from the Carnegie Foundation and the Rockefeller Foundation. The financial deficits which occurred each year were picked up by financial angels, almost all with close Wall Street connections. There can be little doubt that the IPR line had many points in common both with the Kremlin's party line on the Far East and with the State Department's police line in the same area. Clearly there were some Communists, even party members, involved but it is much less clear that there was any disloyalty to the U.S. There was a great deal of intrigue both to help those who agreed with the IPR line and to influence U.S. government policy in this direction, but there is no evidence of which I am aware of any explicit plot or conspiracy to direct American policy in a direction favorable either to the Soviet Union or to international Communism.
Page 948 It must be confessed that the IPR had many of the marks of a fellow traveller or Communist "captive" organization. But this does not mean that the Radical Right version of these events is accurate. For example, Elizabeth Bentley testified on the IPR and identified almost every person associated with the organization as a Communist.
Page 949 This Radical Right fairy tale, which is not an accepted folk myth in many groups in America, pictured the recent history of the United States as a well-organized plot of extreme Left-wing elements, operating from the White House itself and controlling all the chief avenues of publicity in the United States. This plot, if we are to believe the myth, worked through such avenues as the New York Times, Herald Tribute, Christian Science Monitor, Washington Post, Atlantic Monthly, and Harper's Magazine and had at its core the wild-eyed and bushy-haired theoreticians of Socialist Harvard and the London School of Economics. It was determined to bring the U.S. into World War II on the side of England (Roosevelt's first love) and Soviet Russia (his second love) and, as part of this consciously planned scheme, invited Japan to attack Pearl Harbor all the while undermining America's real strength by excessive spending and unbalanced budgets.
Page 950 This myth, like all fables, does in fact have a modicum of truth. There does exist and has existed for a generation, an international Anglophile network which operates to some extent in the way the Radical Right believes the Communists act. In fact, this network, which we may identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. I have objected, both in the past and recently, to a few of its policies but in general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known. The Round Table Groups have already been mentioned several times. At the risk of some repetition, the story will be summarized here because the American branch of this organization (sometimes called the "Eastern Establishment) has played a very significant role in the history of the United States in the last generation. The Round Table Groups were semi-secret discussion and lobbying groups whose original purpose was to federate the English-speaking world along lines laid down by Cecil Rhodes. By 1915, Round Table groups existed in seven countries including England, South Africa, Canada, Australia, New Zealand, India and the United States.
Page 951 Money for their activities originally came from Cecil Rhodes, J.P. Morgan, the Rockefeller and Whitney families and associates of bankers Lazard Brothers and Morgan, Grenfell and Company. The chief backbone of this organization grew up along the already existing financial cooperation running from the Morgan Bank in New York to a group of international financiers in London led by Lazard Brothers. Lionel Curtis established in England and each dominion a front organization to the existing local Round Table Group. This front organization called the Royal Institute of Public Affairs, had as its nucleus in each area the existing submerged Round Table Group.
Page 952 In New York, it was known as the Council on Foreign Relations and was a front for J.P. Morgan and Company in association with the very small American Round Table Group. The American organizers were dominated by the large number of Morgan "experts" including Lamont and Beer, who had gone to the Paris Peace Conference and there became close friends with the similar group of English "experts" which had been recruited by the Milner group. In fact, the original plans for the Royal Institute and the Council on Foreign Relations. In 1928, the Council on Foreign Relations was dominated by the associates of the Morgan bank. Closely allied with this Morgan influence were a small group of Wall Street lawyers whose chief figures were Elihu Root, John W. Davis, the Dulles Brothers, John J. McCloy.
Page 953 On this basis, there grew up in the 20th century a power structure between London and New York which penetrated deeply into university life, the press, and the practice of foreign policy. The American branch of this "English Establishment" exerted much of its influence through five American newspapers (New York Times and Herald Tribune, Christian Science Monitor, Washington Post, Boston Evening Transcript). It might be pointed out that the existence of this Wall Street Anglo-American axis is quite obvious once it is pointed out. It is reflected by the fact that such Wall Street luminaries such as John W. Davis, Lewis Douglas, Jock Whitney and Douglas Dillon were appointed to be American ambassadors in London. This double international network in which the Round Table groups formed the semi-secret or secret nuclei of the Institutes of International Affairs was extended into a third network for Pacific Affairs in 1925 by the same people for the same motives.
Page 954 The chief aims of this elaborate, semi-secret organization were largely commendable: to coordinate the international activities and outlooks of all the English-speaking world into one; to work to maintain peace; to help backward, colonial, and underdeveloped areas toward prosperity along the lines somewhat similar to those taught at Oxford and the University of London. These organizations and their financial backers were in no sense reactionary or Fascistic persons, as Communist propaganda would like to depict them. Quite the contrary, they were gracious and cultured gentlemen who were much concerned with the freedom of expression of minorities and the rule of law for all and who were convinced that they could forcefully civilize the Boers, the Irish, the Arabs, and the Hindus, and who are largely responsible for the partitions of Ireland, Palestine, and India. If their failures now loom larger than their successes, this should not be allowed to conceal the high motives with which they attempted both. It was this group of people, whose wealth and influence so exceeded their experience and understanding, who provided much of the framework of influence which the Communist sympathizers and fellow travellers took over in the United States in the 1930s. It must be recognized that the power of these energetic Left-wingers exercised was never their own power or Communist power but was ultimately the power of the international financial coterie, and, once the anger and suspicions of the American people were aroused as they were in the 1950s, it was a fairly simple matter to get rid of the Red sympathizers. Before this could be done, however, a congressional committee, following backward to their source the threads which led from the admitted Communists like Whittaker Chambers, through Alger Hiss, and the Carnegie Endowment to Thomas Lamont and the Morgan Bank, fell into the whole complicated network of the interlocking tax-exempt foundations. The Eighty-third Congress set up in 1953 a Special Reece Committee to investigate Tax-Exempt Foundations. It soon became clear that people of immense wealth would be unhappy if the investigation went too far and that the "most respected" newspapers in the country, closely allied with these men of wealth, would not get excited enough about any revelations to make the publicity worthwhile. An interesting report showing the Left-wing associations of interlocking nexus of tax-exempt foundations was issued in 1954 rather quietly.. Four years later, the Reece Committee's general counsel, Rene A Wormser, wrote a shocked, but not shocking, book on the subject called "Foundations: Their Power and Influence."
Page 956 Jerome Green is a symbol of much more than the Wall Street influence in the IPR. He is also a symbol of the relationship between the financial circles of London and those of the eastern U.S. which reflects one of the most powerful influences in 20th century American and world history. The two ends of this English-speaking axis have sometimes been called, perhaps facetiously, the English and American Establishments. There is, however, a considerable degree of truth behind the joke, a truth which reflects a very real power structure. It is this power structure which the Radical Right in the U.S. has been attacking for years in the belief they are attacking the Communists. These misdirected attacks did much to confuse the American people in 1948-1955. By 1953 most of these attacks had run their course. The American people, thoroughly bewildered at the widespread charges of twenty years of treason and subversion, had rejected the Democrats and put into the White House a war hero, Eisenhower. At the time,two events, one public and one secret, were still in process. The public one was the Korean War; the secret one was the race for the thermonuclear bomb.
CHAPTER XVIII: NUCLEAR RIVALRY AND COLD WAR, RACE FOR THE H-BOMB 1950-1957
Page 965 On March 1, 1954, we exploded our first real thermonuclear bomb at Bikini atoll. It was a horrifying device which spread death-dealing radioactive contamination over more than 8,000 square miles and injurious radiation over much of the world.
Page 968 To prepare public opinion to accept use of the H-bomb, if it became necessary, Strauss sponsored a study of radioactive fallout whose conclusion was prejudged by calling it "Project Sunshine." By selective release of some evidence and strict secrecy of other information, they tried to establish in public opinion that there was no real danger to anyone from nuclear fallout even in all-out nuclear war. This gave rise to controversy between the scientists and the Administration on the danger of fallout. The Eisenhower through the Dulles doctrine of "massive retaliation" was so deeply committed to nuclear war that it could not permit the growth of public opinion which would refuse to accept the use of nuclear weapons because of objections to the danger of fallout to neutrals and non-combatants. By 1953, this struggle became so intense that supporters of massive retaliation decided they must destroy the public image and public career of Oppenheimer.
THE KOREAN WAR AND ITS AFTERMATH, 1950-1954
Page 970 The emphasis on nuclear retaliation to Communist aggression anywhere in the world made it necessary to draw a defence perimeter over which such aggression would trigger retaliation. At the insistence of MacArthur, that perimeter was drawn to exclude Korea, Formosa and Mainland China; accordingly, all American forces had been evacuated from South Korea in June 1949.
Page 971 The Soviet Union interpreted this to mean that the U.S. would allow South Korea to be conquered by the North. Instead, when Russia, through its satellite North Korea, sought to take Korea, this game rise to an American counteraction.
Page 972 For forty-eight hours after the Korean attack, the world hesitated, awaiting America's reaction. Truman immediately committed American air and sea forces in the area south of 38 degrees and demanded a UN condemnation of the aggression. Thus, for the first time in history, a world organization voted to use collective force to stop armed aggression. This was possible because the North Korean attack occurred at a time when the Soviet delegation was absent from the UN Security Council, boycotting it as a protest at the presence of the delegation from Nationalist China. Accordingly, the much-used Soviet veto was unavailable.
Page 974 The frontier was reached by UN forces as the month ended. The Red Chinese decision to intervene was made nine days after American troops crossed the 38th parallel into North Korea. It was inevitable as Red China could hardly be expected to allow the buffer North Korean state to be destroyed and American troops to occupy the line of the Yalu. As soon as it became clear that American forces would continue past the 38th parallel to the Yalu, the Chinese intervened, not to restore the 38th parallel frontier but to clear the U.N. forces from Asia completely.
Page 975 The Truman Administration, after the victory at Inchon, did not intend to stop at the 38th parallel and hoped to reunite the country under the Seoul government. It is probable that this alone triggered the Chinese intervention. On October 9, 1950, two of MacArthur's planes attacked a Russian air base sixty-two miles inside Russian territory.
Page 977 After Truman removed MacArthur, Republican leaders spoke publicly of impeaching the President. Senator William Jenner said: This country today is in the hands of a secret inner coterie which is directed by agents of the Soviet Union. We must cut this whole cancerous conspiracy out at once. Our only choice is to impeach the president and find out who is the secret invisible government which has so cleverly led our country down the road to destruction."
Page 979 On the whole, neo-isolationist discontent was a revolt of the ignorant against the informed or educated, of the nineteenth century against the insoluble problems of the twentieth, of the Midwest of Tom Sawyer against the cosmopolitan East of J.P. Morgan and Company, of old Siwash against Harvard, of the Chicago Tribune against the Washington Post or New York Times, of simple absolutes against complex relativisms, of immediate final solutions against long-range partial alleviations, of frontier activism against European though, a rejection, out of hand, of all the complexities of life which had arisen since 1915 in favor of a nostalgic return to the simplicities of 1905, and above all a desire to get back to the inexpensive, thoughtless, and irresponsible international security of 1880.
Page 980 This neurotic impulse swept over the U.S. in a great wave in the years 1948-1955, supported by hundreds of thousands of self-seeking individuals, especially peddlers of publicity and propaganda, and financed no longer by the relatively tied-up funds of declining Wall Street international finance, but by its successors, the freely available winnings of self-financing industrial profits from such new industrial activities as air power, electronics, chemicals, which pretended to themselves that their affluence was entirely due to their own cleverness. At the head of this list were the new millionaires led by the Texas oil pluggers whose fortunes were based on tricky tax provisions and government-subsidized transportation systems.
Page 982 The Kremlin was quite wiling to keep America's men, money, and attention tied down in Korea.
Page 985 During Truman's last four budgets, expenditures on national security increased from $13 billion in 1950 to $50 billion in 1953.
THE EISENHOWER TEAM, 1952-1956
Page 986 The Korean War disrupted the pleasures of the postwar economic boom with military service, shortages, restrictions and cost-of-living inflation which could not help but breed discontent. And through it, all the mobilized wealth of the country, in alliance with most of the press, kept up a constant barrage of "Communists in Washington," "twenty years of treason." In creating this picture, the leaders of the Republican Party totally committed themselves to the myths of the neo-isolationists and of the Radical Right. In June 1951, Senator McCarthy delivered a speech in the Senate of 60,000 words attacking General Marshall as a man "steeped in falsehood" who has "recourse to the lie whenever it suits his convenience," one of the architects of America's foreign policy made by "men high in Government who are concerting to deliver us to disaster, a conspiracy so black that when it is finally exposed, its principals shall be forever deserving of the maledictions of all honest men."
Page 987 Eisenhower had no particular assets except a bland and amiable disposition combined with his reputation as a victorious general. He also had a weakness, one which is frequently found in his profession, the conviction that anyone who has become a millionaire, even by inheritance, is an authoritative person on almost any subject.
Page 988 If elected, he would go to Korea to make peace. Although himself not a neo-isolationist or a reactionary, Eisenhower had few deep personal convictions and was eager to be president. When his advisers told him that he must collaborate with the Radical Right, he went all the way, even to the extent of condoning McCarthy's attack on General Marshall when he, under McCarthy's pressure, removed a favorable reference to Marshall from a Wisconsin speech. Eisenhower allotted the functions of government to his Cabinet members ("eight millionaires and a plumber").
Page 991 Attorney General Herbert Brownell confided to a businessmen's luncheon in Chicago that President Truman, knowing that Harry Dexter White was a Russian spy, had promoted him from assistant secretary of the treasury to executive director of the U.S. Mission to the International Monetary Fund in 1946. The House Committee on Un- American activities at once issued a subpoena to the ex-President to testify which was ignored. McCarthy's attacks on the U.S. Information Agency overseas libraries led to burning of books like Tom Sawyer and Robin Hood as subversive (Robin Hood stole from the rich and gave to the poor, clearly a Communist tactic).
Page 992 Dulles publicly announced the conception of "massive retaliation" before the Council on Foreign Relations on January 12, 1954.
Page 995 W.L. Borden wrote a letter to J. Edgar Hoover stating that "J. Robert Oppenheimer is an agent of the Soviet Union." This charge was supported by a biased rehash of all the derogatory stories about Oppenheimer and was made up of wild charges which no responsible person has ever been willing to defend." On the basis of this letter and at the direct order of President Eisenhower, Chairman Strauss suspended Oppenheimer's security clearance.
Page 998 Broadest of the three narrowing circles of outlook was a violent neurotic rebellion of harassed middle-class persons against a long- time challenge to middle-class values arising from depression, war, insecurity, science, foreigners, and minority groups of all kinds. Public opinion always supported large defence forces. Public opinion gave much less support to foreign aid. These statements based on public opinion polls.
THE RISE OF KHRUSHCHEV, 1953-1958
Page 1009 Immediately after Stalin's death, the "collective leadership" was headed by Malenkov, Beria and Molotov. Malenkov supported a policy of relaxation with increased emphasis on production of consumers goods and rising standards of living, as well as increased efforts to avoid any international crises which might lead to war; Beria supported a "thaw" in internal matters, with large-scale amnesties for political prisoners as well as rehabilitation of those already liquidated; Molotov continued to insist on the "hard" policies of Stalin with no relaxation of domestic tyranny.
Page 1010 Wild rumors and and some relaxation, at Beria's behest, in East Germany, gave rise to false hopes and on June 16, 1953, these workers rose up against the Communist government. These uprising were crushed with the full power of the Soviet occupation armored divisions. Using this as an excuse, the Kremlin leaders suddenly arrested Beria and shot him. The overthrow of the master of terror was followed by an extensive curtailment of the secret police and its powers. Secret courts were abolished.
Page 1011 The gradual elimination of Molotov found Khrushchev as the champion of "thaw" in the Cold War.
Page 1012 Khrushchev's six-day visit to Tito is of great importance because it showed Russia in an apologetic role for a major past error and because it reversed Stalin's rule that all Communist parties everywhere must follow the Kremlin's leadership such that "differences in the concrete application of Socialism are the exclusive concern of individual countries." En route home, he stopped in Sofia and place the fuse in another, even larger, stick of dynamite, by a secret denunciation of Stalin personally as a bloodthirsty tyrant. Back in Moscow, Khrushchev won over the majority by arguing that the loyalty of the satellites, and especially their vital economic cooperation, could be ensured better by a loose leash than by a club.
Page 1013 The Russians spoke favorably about disarmament which, to them, meant total renunciation of nuclear weapons and drastic cuts in ground forces, a combination which would make the United States very weak against Russia while leaving Russia still dominant in Europe.
Page 1012 The Geneva Conference discussions were conducted in an unprecedented atmosphere of friendly cooperation which came to be known as the "Geneva spirit" and continued for several years and was never completely overcome even when matters were at their worst following the U-2 incident of 1960 and the Cuban crisis of 1962.
Page 1016 At the Twentieth Party Congress in February 1956, the first speech of 50,000 words delivered by Khrushchev over seven hours urged the need for coexistence with the West and references to the possibility of peaceful rather than revolutionary change from capitalism to Socialism. The real explosion came at a secret all-night session on July 24 in a 30,000 word speech where Khrushchev made a horrifying attack on Stalin as a bloodthirsty and demented tyrant who had destroyed tens of thousands of loyal party members on falsified evidence. The full nightmare of the Soviet system was revealed.
Page 1017 A few passages from this speech: "This concept "enemy of the people" eliminated any possibility of rebuttal. Usually, the only evidence used, against all the rules of modern legal science, was the confession of the accused, and as subsequent investigation showed, such "confessions" were obtained by physical pressure on the accused. The formula "enemy of the people" was specifically introduced for the purpose of physically annihilating these persons. How is it that a person confesses to crimes that he has not committed? Only in one way - by application of physical pressure, tortures, taking away of his human dignity.
Page 1019 The "secret speech" also destroyed Stalin's reputation as a military genius: "Stalin said that the tragedy of the war resulted from the unexpected attack by the Germans. This is completely untrue. Churchill warned Stalin that the Germans were going to attack. Stalin took no had and warned that no credence be given to information of this sort not to provoke a German invasion. Had our industry been mobilized properly and in time to supply the army, our wartime losses would have been decidedly smaller. Very grievous consequences followed Stalin's destruction of many military commanders during 1937-1941 because of his suspiciousness and false accusations. During that time, leaders who had gained military experience in Spain and the Far East were almost completely liquidated.
Page 1021 Stalin's 1948 "Short Biography" is an expression of most dissolute flattery, making a man into a god, transforming him into an infallible sage, "the greatest leader and most sublime strategist of all times and nations." We need not give examples of the loathsome adulation filling this book. They were all approved and edited by Stalin personally. He added "Although he performed his task of leader of the people with consummate skill and enjoyed the unreserved support of the whole Soviet people, Stalin never allowed his work to be marred by the slightest hint of vanity, conceit, or self-adulation." I'll cite one more insertion by Stalin: "Comrade Stalin's genius enabled him to divine the enemy's plans and defeat them. The battles in which Comrade Stalin directed the Soviet armies are brilliant examples of operational military skill." "
Page 1022 By directing all the criticism of Stalin personally, he exculpated himself and the other Bolshevik survivors who were fully as guilty as Stalin was - guilty not merely because they acquiesced in Stalin's atrocities from fear, as admitted in Khrushchev's speech, but because they fully cooperated with him. A study of Khrushchev's life shows that he defended Stalin's acts which caused the deaths of millions. The fault was not merely with Stalin; it was with the system, it was with Russia. The more completely total and irresponsible power is concentrated in one man's hands, the more frequently will a monster of sadism be produced. The very structure of Russian life drove Khrushchev, as it had driven Stalin, to concentrate all power in his own hands. Neither man could relax halfway to power for fear that someone else would continue on, seeking the peak of power. The basis of the whole system was fear and like all neurotic drives in a neurotic system, such fear could not be overcome even by achievement of total power. That is why it grows into paranoia as it did with Ivan the Terrible, Peter the Great, Paul I, Stalin and others.
Page 1031 Having failed to block Khrushchev's economic plans, his rivals in the Presidium were reduced to a last resort, they had to get rid of the man himself. At a Presidium meeting on June 18, 1957, the motion was made to remove Khrushchev as the first party secretary. The discussion grew violent with Malenkov and Molotov attaching and Khrushchev defending himself. He was accused of practicing a "cult of personality" and of economic mismanagement. The vote was 7-4 against him with Mikoyan, Kirichenko and Suslov his only supporters. He was offered the reduced position of minister of agriculture.
Page 1032 Khrushchev refused to accept the result, denying that the Presidium had the authority to remove a first secretary, and appealing to the Central Committee. The members of this larger group joined in the discussions as they arrived while Khrushchev's supporters sought to delay the vote until his men could come in from the provinces. Marshall Zhukov provided planes to bring in the more distant ones. The discussion became bitter when Zhukov threatened to produce evidence that Malenkov and Molotov had been deeply involved in the bloody purges of 1937. Madame Furtseva, an alternate member of the Presidium, filibustered with a speech for six hours. Eventually, there were 309 members present. When the vote was finally taken, Khrushchev's supporters voted for him solidly and his removal, already voted by the Presidium, was reversed. Khrushchev at once counterattacked. He moved and carried the expulsion from the Presidium of Malenkov, Molotov, Kaganovich and Shepilov for "anti-party" activities. Then came the election of a new Presidium with fifteen full members instead than the previous eleven, and nine alternates instead of the previous six. This change was Khrushchev's most smashing personal victory and the most significant event in Russia's internal history. It led Khrushchev to a position of political power more complete than Stalin's had been although it was clear that Khrushchev would never be allowed to abuse his power the way Stalin had done.
Page 1033 Khrushchev did not rest on his oars. During the summer of 1957, he made notable concessions to the peasants (ending compulsory deliveries from products of their personal plots), slammed down the lid on freedom of writers and artists, pushed vigorously both the "virgin lands" scheme and the decentralization of industry, and worked to curtail the growing autonomy of the armed forces and revived trade unions into the new regional economic councils.
Page 1034 Russian objection to city-bombing or to strategic terror of the V-2 kind as ineffective and a waste of resources was undoubtedly sincere. The Soviet Union has no idea of being able to achieve military victory over the United States simply because they have no method of occupying the territory of the United States at any stage in a war.
Page 1035 They are unlikely to use nuclear weapons first although fully prepared to resort to them once they are used by an enemy.
Page 1036 However such a war is regarded by the Soviet leaders as highly undesirable while they, in a period of almost endless cold war, can seek to destroy capitalist society by nonviolent means. This theory of "nibbling" the capitalist world to death is combined with a tactic which would resist "capitalist imperialism" by encouraging "anti- colonialism." Stalin and Dulles saw the world largely in black-and-white terms: who was not with them was obviously against them.
Page 1037 Stalin did not see the possibility of colonial areas becoming non-Communist and non-colonial independent states and rebuffed the local native groups. Khrushchev did the opposite.
Page 1038 This shift in the Soviet attitude toward neutralism was helped by Dulles' refusal to accept the existence of neutralism. His rebuffs tended to drive those areas which wanted to be neutral into the arms of Russian because the new nations of the developing Buffer Fringe valued their independence above all else. The Russian acceptance of neutralism may be dated about 1954 while Dulles still felt strongly adverse to neutralism four or five years later. This gave the Soviet Union a chronological advantage to compensate for its many disadvantages in the basic struggle to win the favor of the neutrals.
THE COLD WAR IN EASTERN AND SOUTHERN ASIA, 1950-1957
Page 1039 By 1939, there was only one independent state in southeast Asia: Siam. Thus all southeast Asia, except Thailand, was under the colonial domination of five Western states in 1939. French Indochina emerged from Japanese occupation as the three states of Vietnam, Laos, and Cambodia, each claiming independence. Efforts by the European Powers to restore their prewar rule led to violent clashes with the supporters of independence. These struggles were brief and successful in Burma and Indonesia but were very protracted in Indochina.
Page 1042 In all these areas, native nationalists were inclined to the political Left, if for no other reason than the fact that the difficulties of capital accumulation and investment to finance economic improvements could be achieved only under state control. In some cases, such Communism may have been ideological but inmost cases, it involved little more than the desire to play off the Soviet Union and China against the Western imperialist Powers.
Page 1042 A communist revolt in the Philippines had already begun and was joined by similar uprisings in Burma, Indonesia, and Malaya. Most of these revolts took the form of agrarian agitations and armed raids by Communist guerrilla jungle fighters. Since the operated on a hit-and- run basis and had to live off the local peasantry, their exploitation of peasant life eventually made them decreasingly welcome to this very group for whom they pretended to be fighting. In the Philippines, the rebels were smashed in 1953. In Indonesia, Sukarno repressed the insurrection and executed its leaders. In Malaya, the Communists were systematically hunted down and destroyed by British troops. In Burma, they weren't eliminated until 1960. The real problem was Indochina. There, the French Army was uncompromising and Communist leadership was skillful. As a result, the struggle became part of the Cold War. The Malay peninsula is dominated by a series of mountain ranges with their intervening rivers running southward from Chinese Yunnan. These rivers fan out into fertile alluvial deltas which produce surplus foods for undemanding peoples.
Page 1043 Indochina brought considerable wealth to France. After the Japanese withdrawal, the Paris government was reluctant to see this wealth, chiefly from the tin mines, fall into native groups and by 1949, decided to use force to recover the area. Opposed to the French effort was Ho Chi Minh, a member of the French Communist Party. Ho had set up a coalition government under his Viet Minh Party and proclaimed independence for Vietnam (chiefly Tonkin and Annam) in 1945, while French troops, in a surprise coup, seized Saigon in the south. Ho received no support from the Kremlin. At first, Ho sought support from the United States but after the establishment of Red China in 1949, he turned to that new Communist state for help. Mao's government was the first state to give Vietnam diplomatic recognition (January 1950) and at once began to send military supplies and guidance. Since the U.S. was granting extensive aid to France, the struggle in Vietnam became, through surrogates, a struggle between the United States and China. In world opinion, this made the U.S. the defender of European imperialism against anti- colonial native nationalism. During this turmoil, independent neutralist governments came into existence in Laos and Cambodia. Both states accepted aid from whoever would give it and both were ruled by an unstable balance of pro- Communists, neutralists, and pro-Westerners, all with armed supporters. On the whole, the neutralist group was largest and the pro-Western was the smallest but could obtain support from America's wealth. The decisive influence was that the Communists were prepared to accept and support neutralism years before Dulles would condone it.
Page 1044 The readiness of Dulles and the French Army to force a showdown in Vietnam was unacceptable to the British and many in France. Out of this came a Soviet suggestion for a conference on Indochina in Geneva. By early 1954, the Communist guerrillas were in control of most of northern Indochina, were threatening Laos, and were plaguing villages as far south as Saigon. About 200,000 French troops and 300,000 Vietnamese militia were tied in knots by about 335,000 Viet Minh guerrillas. France was being bled to death with nothing to show for it. By the end of March 1953, the outer defences of the French strong point at Dien Bien Phu were crumbling. The French chief of staff found Dulles ready to risk all-out war with Red China by authorizing direct American intervention in Indochina. As usual, Dulles thought that wonders could be achieved by air strikes alone against the besiegers of Dien Bien Phu and for a few day, at Dulles' prodding, the United States tottered "on the brink of war." Dulles proposed "a united action policy:" "If Britain would join the United States and France would agree to stand firm, the three Western states could combine with friendly asian nations to oppose communist forces.
Page 1045 President Eisenhower agreed but his calls to Churchill and Eden found the British government opposed to the adventure because the Sino-Soviet Treaty of 1950 bound Russia to come to the assistance of China if it were attacked by the United States as Dulles contemplated. During the 1954 Far Eastern Geneva Conference, two American aircraft carriers, loaded with atomic weapons, were cruising the South China Sea, awaiting orders from Washington to hurl their deadly bombs at the Communist forces besieging the 15,000 exhausted troops trapped at Dien Bien Phu. In Washington, Admiral Radford was vigorously advocating such aggressive action on a generally reluctant government. In Paris, public outrage was rising over Indochina where the French had expended 19,000 lives and $8 billion without improving matters a particle. The fall of Dien Bien Phy on May 7th led to the fall of the French government. The new prime minister promised a cease-fire or his own retirement within 30 days. He barely met the deadline. The Indochinese settlement of July 20, 1954 was basically a compromise, some of whose elements did not appear in the agreement itself. A Communist North Vietnam state was recognized north of the 17th parallel and the rest was left in three states: Laos, Cambodia and South Vietnam. The new state system was brought within the Dulles network of trip-wire pacts on September 8, 1954 when Britain, France, Australia, New Zealand, Pakistan, Thailand, Philippines and the U.S. formed the South-East Asia Treaty Organization (SEATO) and extended their protection to Laos, Cambodia and South Vietnam. The Geneva agreement was to neutralize the Indochina states but was apparently not acceptable to the Dulles brothers and any possible stability in the area was soon destroyed by their activities, especially through the Central Intelligence Agency (CIA) seeking to subvert the neutrality of Laos and South Vietnam by channeling millions in American funds to Right-wing army officers, building up large military forces, rigging elections, and backing reactionary coups d'etat.
Page 1046 These techniques might have been justified in the eyes of the CIA if they had been successful but, on the contrary, they alienated the mass of the natives in the area, brought numerous recruits to the Left, gave justification for Communist intervention from North Vietnam, disgusted our allies in Britain, France, Burma, India and elsewhere, and by 1962 had almost destroyed the American image and position in the area. In Laos, the chief political figure was Prince Phouma, leader of the neutralist group, who tried to keep a balance between the Communist Pathet Lao on his Left and the American-subsidized politicians and militarists led by General Nosavan on his Right. American aid was about $40 million a year of which about $36 million went to the army. This was used, under American influence, as an anti- neutralist rather than an anti-Leftist influence culminating in a bungled army attack on two Pathet Lao battalions in 1959 and openly rigged elections in which all the Assembly seats were won by Right- wing candidates in 1960. In August 1960, an open revolt in behalf of the neutralist Phouma game rise to a Right-wing revolution led by General Nosavan. This drove the neutralists in the arms of the Pathet Lao. The SEATO Council refused to support the American position, the Laotian army was reluctant to fight, and the American military mission was soon involved in the confused fighting directly. The American bungle in Laos was repeated, with variations, elsewhere in southern and southeastern Asia. In South Vietnam, American aid, largely military, amounted to about two thirds of the country's budget, and by 1962, it had reached $2 billion. Such aid, which provided little benefit for the people, corrupted the government, weakened the swollen defense forces, and set up a chasm between the rulers and people which drove the best of the latter Leftward, in spite of the exploitative violence of the Communist guerrillas. A plebiscite in 1955 was so rigged that the American- supported candidate won over 98% of the vote. The election of 1960 was similarly managed, except in Saigon, the capital, where many people refused to vote. As might have been expected, denial of a fair ballot led to efforts to assassinate the American-sponsored President, Diem, and gave rise to widespread discontent which made it possible for the Communist guerrillas to operate throughout the country. The American- sponsored military response drove casualties to a high sustained figure by 1962 and was uprooting peasantry throughout the country in an effort to establish fortified villages which the British had introduced with success in Malaya.
Page 1047 These errors of American policy, which were repeated in other places, arose very largely from two factors: 1) American ignorance of local conditions which were passed over in animosity against Russia and China; 2) American insistence on using military force to overcome local neutralism which the mass of Asiatic people wanted. The American militarization of both Thailand and South Vietnam was used to increase pressure on Cambodia which was driven to seek support for its independence from China and Russia. North Vietnam had a deficiency of food while South Vietnam, like all delta areas, is a zone of rice surplus and thus a shining target for North Vietnamese aggression. The collapse of the world price of rice at the end of the Korean War left Burma with an unsellable surplus of almost two million tons. Within the next three years, Burma signed barter agreements with Red China and Soviet Europe by which Burma got rid of a third of its surplus each year in return for Communist goods and technical assistance. These returns were so poor in quality, high in price and poorly shipped that Burma refused to renew the agreements in 1958.
SOUTHERN ASIA Farther west, in southern Asia (correctly called the Middle East from the Persian Gulf to Burma) American bungling also opened may opportunities for Soviet penetration which the Soviets failed to exploit.
Page 1048 India was determined to be neutral; Pakistan was willing to be an ally of the United States.
Page 1049 The partition of India before independence in 1947, as in Palestine and earlier in Ireland, received strong impetus from the Round Table Group, and in all three cases, it led to horrors of violence. In India's case, the partition was a butchery rather than a surgical process. Imposed by the British, it cut off two areas in northwestern and northeastern India to form a new Muslim state of Pakistan (cutting right through the Sikhs in the process). The two new nations began under two new leaders. In the post-partition confusion, minorities on the wrong sides of the lines sought to flee, as refugees, to India or Pakistan, while the Sikhs sought to establish a new homeland by exterminating Muslims in East Punjab. In a few weeks, almost 200,000 were killed and twelve million were forced to flee as refugees. The two sections of Pakistan were separated from each other by 1,100 miles of India territory, its boundaries irrational, its economic foundations torn to shreds by the partition.
Page 1050 In 1958, martial law was established and General Khan became president. Under military rule, a sweeping land-reform program restricted owners to 500 irrigated or 1000 non-irrigated acres with the surplus distributed to existing tenants or other peasants. Former landlords received compensation in long-term bonds.
Page 1052 The American insistence on the non-committed nations adopting anti-Soviet lines opened the way for the Soviet to pose as the friend of such nations by supporting their neutralism.
Page 1053 At the end of World War II, about 80 percent of Iran's population were peasants. Four fifths of the land was almost entirely useless, being either mountainous or arid. Moreover, the peasants who tilled the land were much oppressed by heavy rents to absentee landlords who also controlled, as separate rights, essential access to water. Only about a seventh of the land was owned by peasants who worked it. Peasants retained little more than a fifth of what they produced. The shah has shifted the basis of his support from the elite landed group to this growing middle class. Before 1914, the shah sought to raise funds for his personal use by selling concessions and monopolies to foreign groups. Most of these were exploitive of the Iranian peoples. Of these, the most important was the concession for petroleum which came into possession of the new Anglo-Persian Oil Company which came to be controlled, through secret stock ownership, by the British government.
Page 1054 At the end of World War I, Iran was a battleground between Russian and British armed forces. By 1920, the withdrawal of British forces left the anti-Bolshevik Russian Cossack Brigade as the only significant military force in the country. The chief Iranian officer in that force, Reza Pahlavi, in the course of 1921-1925 gradually took over control of the government and eventually deposed the incompetent 28-year-old Shah Ahmad. Pahlavi's chief aim was to break down tribalism and localism. To this end, he defeated the autonomous tribes, settled nomadic groups in villages, shifted provincial boundaries to break up local loyalties, created a national civil service and police force, established national registration with identity cards for all, and used universal conscription to mingle various groups in a national army. All these projects needed money and the chief resource, oil, was tied up completely in the concession held by the AIOC with the inevitable result that it became the target of the Iranian nationalist desire for traditional development funds. The older Iranian elite would have been satisfied with a renegotiated deal but the newer urban groups demanded the complete removal of foreign economic influence by nationalization of the petroleum industry.
Page 1056 By 1950, the Shah put his prime minister in to force through the supplemental agreement. Opposing groups introduced nationalization bills. Gradually, the nationalization forces began to coalesce about a strange figure, Mr. Muhammad Mossadegh, with a doctorate in Economics. Politically, he was a moderate but his strong emotional appeal to Iranian nationalism encouraged extreme reactions among his followers. The company insisted that its status was based on a contractual agreement which could not be modified without its consent. The British government maintained the agreement was a matter of international public law which it had a right to enforce. The Iranian government declared it had the right to nationalize an Iranian corporation operating under its law on its territory, subject only to adequate compensation. The nationalist arguments against the company were numerous: 1) It had promised to train Iranians for all positions possible but had only used them in menial tasks, trained few natives and employed many foreigners. 2) The company had reduced its payments to Iran, which were based on profits, by reducing the amount of its profits by bookkeeping tricks. It sold oil at very low prices to wholly-owned subsidiaries outside Iran or to the British Navy, allowing the former to resell at world prices so that AIOC made small profits, while the subsidiaries made large profits not subject to the Iranian royalty obligations. Iran believe that all profits should fall under the obligations. but as late as 1950, AIOC admitted that the accounts of 59 such dummy corporations were not included in AIOC accounts. 3) AIOC generally refused to pay Iranian taxes, especially income tax but paid such taxes to Britain; at the same time, it calculated the Iranian profit royalties after such taxes so that the higher British taxes went, the less the Iranian payment became. Thus, Iran paid income tax to Britain. In 1933, AIOC paid #305,000 in British taxation and #274,000 in Iranian taxes. In 1948, the two figures were #28.3 million to Britain and #1.4 million to Iran.
Page 1057 4) The payment to Iran was also reduced by putting profits into reserves or into company investments outside Iran, often in subsidiaries, and calculating the Iranian share only on the profits distributed as dividends. Thus in 1947, when profits were really #40.5 million, almost #15 million went to British income taxes, over #7 million to stockholders, and only #7 million to Iran. If the payment to Iran had been calculated before taxes and reserves, it would have received at least #6 million more that year. 5) AIOC's exemption from Iranian customs deprived Iran of about #6 million a year. 6) The company drew many persons to arid and uninhabited areas and then provided very little of the costs of housing, education, or health. 7) AIOC as a member of the international oil cartel reduced its oil production and thus reduced Iran's royalties. 8) AIOC continued to calculate its payments to Iran in gold at #8.1 per ounce for years after the world gold price had risen to #13 an ounce while the American Aramco in Saudi Arabia raised its gold price on demand. 9) AIOC's monopoly prevented Iran developing other Iranian oil fields. As a consequence of all these activities, the Iranian nationalists of 1952 felt angered to think that Iran had given up 300 million tons of oil over fifty years and obtained about #800 million in profits. The Iranian opposition to nationalization was broken in 1951 when the prime minister was assassinated. The nationalization bill was passed and at the request of the Majlis, the shah appointed Mossadegh prime minister to carry it out. This was done with considerable turmoil which included strikes by AIOC workers against mistimed British wage cuts, anti-British street riots and the arrival of British gun-boats at the head of the Persian Gulf. Rather than give up the enterprise or operate it for the Iranian government, AIOC began to curtail operations and ship home its engineers. In May 1951, it appealed to the International Court of Justice in spite of Iranian protests that the case was a domestic one, not international. Only in July, 1952, did the court's decision uphold Iran's contention by refusing jurisdiction.
Page 1058 At first, the U.S. supported Iran's position fearing British recalcitrance would push Iran toward Russia. However it soon became apparent that the Soviet Union, while supporting Iran's position, was not going to interfere. The American position then became increasingly pro-British and anti-Mossadegh. This was intensified by pressure from the international petroleum cartel comprising the seven greatest oil companies in the world. As soon as Britain lost its case in the International Court of Justice, it put into effect a series of reprisals against Iran which rapidly crippled the country. Iranian funds were blocked; its purchases in British controlled markets were interrupted; its efforts to sell oil abroad were frustrated by a combination of the British Navy and the world oil cartel (which closed sales and distribution facilities to Iranian oil). These cut off a substantial portion of the Iranian government's revenues and forced a drastic curtailment of government expenditures.
Page 1059 Mossadegh broke off diplomatic relations with the British, deported various economic and cultural groups, and dismissed both the Senate and the Iranian Supreme Court which were beginning to question his actions. By that time, almost irresistible forces were building up against Mossadegh, since lack of Soviet interference gave the West full freedom of action. The British, the AIOC, the world petroleum cartel, the American government and the older Iranian elite led by the shah combined to crush Mossadegh. The chief effort came from the CIA under the personal direction of Allen Dulles, brother of the Secretary of State. Dulles, a former director of the Schroeder Bank in New York. It will be remembered that the Schroeder Bank in Cologne helped to arrange Hitler's accession to power as chancellor in January 1933. In the Near East, the mobs are easily roused and directed by those who are willing to pay and Dulles had the unlimited secret funds of the CIA. From these he gave $10 million to Colonel H. Norman Schwartzkopf who was in charge of training the Imperial Iranian Gendarmerie and this was judiciously applied in ways which changed the mobs tune. The whole operation was directed personally by Dulles from Switzerland. In August Mossadegh held a plebiscite to approve his policies. The official vote was about two million approvals against twelve hundred disapprovals but his days were numbered. On August 13th, the Shah precipitated the planned anti-Mossadegh coup by naming General Zahedi as prime minister and sent a messenger dismissing Mossadegh. The latter refused to yield and called his supporters into the streets where they rioted against the Shah who fled with his family to Rome. Two days later, anti-Mossadegh mobs, supported by the army, defeated Mossadegh supporters. He was forced out of office and replaced by General Sahedi. The shah returned from Italy on August 22nd.
Page 1060 The fall of Mossadegh ended the period of confusion. From 1953 on, the shah and the army, backed by the conservative elite, controlled the country and the docile Majlis. Two weeks after the shah's countercoup, the U.S. gave Iran an emergency grant of $45 million, increased its economic aid payment to $23 million and began to pay $5 million a month in Mutual Security funds. In return, Iran became a firm member of the Western bloc. The Communist Tudeh Party was relentlessly pursued after 1953. By 1960, the shah tried a program of agrarian reform which sought to restrict each landlord's holdings to a single village, taking all excess lands for payments spread over 10 years and granting the lands to the peasants who worked them for payments over 15 years. The shah's own estates were among the first to be distributed but by the end of 1962 over 5000 villages had been granted to their peasants. In the meantime, the oil dispute was settled and the incomes to Iran were considerably increased averaging about $250 million or more a year.
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