TRAGEDY AND HOPE Chapters XVII-XVIII
by Dr. Carroll Quigley
ISBN 0913022-14-4
CONTENTS
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
THE FACTORS
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.
Send a comment to John Turmel
Home