The Chairman

by Kai Bird

  McCloy too thought Khrushchev was a formidable opponent. When, at one point during the reception, Khrushchev warned, “You had better write off the socialist countries from your balance sheet,” McCloy shot back, “Are you ready to write off the rest of the world from your balance sheet?” Ever “quick on his feet,” Khrushchev diverted attention from the question and, more or less as a “ward politician would do,” gave McCloy an “evasive” answer.154 But the exchange gave McCloy the impression that this was a Soviet leader with whom the United States could negotiate. Khrushchev seemed to imply that all the Soviets wanted was an assurance of nonintervention in their bailiwick, a “sphere of influence” that McCloy himself had recognized in the wake of Yalta.

  Khrushchev had actually been much more explicit with Harriman three months earlier. Only on the issue of Allied rights in West Berlin, which he said he would someday unilaterally terminate, did Khrushchev talk tough. On the broader issues of peaceful coexistence and arms control, he made it clear that he sought to work out some kind of détente with Washington. Referring to the start of the Cold War, he said, “We don’t consider Stalin without blame. . . . In the last years he had a bad influence both internally and in international affairs.” The Soviets were willing to prohibit all nuclear explosions, arld he pointed out that the technical experts at Geneva had found no obstacle to verifying a test-ban treaty. He wanted to sign a nonaggression pact with the United States and afterward negotiate a “reduction in forces” with “the most thorough control with inspection by both armies.” When Harriman asked him why he hadn’t accepted Eisenhower’s 1955 “Open Skies” proposal, Khrushchev replied that it was not “realistically fair,” because the United States had so many military bases outside its borders. However, if this was such a good idea, the Soviets “would agree to air reconnaissance but not as a start.” Khrushchev also brought up the subject of George Kennan’s Reith Lectures and confessed that the ideas outlined by Kennan “coincided with his own.” Harriman’s confidential notes of the meeting reported, “He [Khrushchev] liked particularly the idea of a gradual with-drawal in Central Europe.”155

  This extraordinary interview with the Soviet premier convinced Harriman that the next administration, if not Eisenhower’s, would probably have the opportunity to achieve a major breakthrough in relations with Moscow. As for McCloy, his exchange with Khrushchev in 1959 merely reinforced his gut feeling not only that arms-control treaties were a desirable necessity in the nuclear age, but also that the Soviets had come to the same conclusion. The Geneva negotiations had a future.

  Early in 1960, McCloy went to Gordon Gray, the president’s special assistant, to express his concern about all the talk of an alleged “missile gap.” Ever since the leaking of the Gaither Report a year earlier, a number of newspaper columnists had been emphasizing the report’s assumptions regarding Soviet ICBM capabilities. This theme was about to become a major element in the presidential campaign of Senator John F. Kennedy. “Mr. McCloy had said,” Gray reported to the president, “he was getting increasing reports from around the country and from prominent and responsible people that they were confused and in some cases concerned.” Gray said he thought Eisenhower “should take seriously the concern of such individuals as Jack McCloy as distinguished from much of the political talking that is going on.”156 Eisenhower knew these concerns to be groundless, because photointelligence obtained during U-2 overflights of the Soviet Union demonstrated that the Soviets were, in fact, way behind the Americans in deployment of ICBMs.157 The president felt he could not reveal the existence of the top-secret U-2 program. But, on hearing about the worries of men like McCloy, Eisenhower acknowledged to Gray that he would have to do something to respond to his critics.

  Two days later, at a press conference, Eisenhower once again denied that there was a missile gap and then made a dramatic announcement: he now favored a test-ban treaty covering nuclear explosions in the air, in the sea, in outer space, and those among the underground tests “which can be monitored.” Five weeks later, the Soviets said they would agree to such a treaty, including on-site inspection, if the United States would also agree to an indefinite moratorium on low-kiloton, unverifiable underground tests. Eisenhower’s critics reacted in near hysteria to the prospect of such an agreement with the Soviets. The New York Times suggested that such an unverifiable test-ban treaty would “leave the Soviets free to continue experiments behind the Iron Curtain to develop Premier Khrushchev’s fantastic weapons.” Eisenhower’s AEC chief, John McCone, bluntly told him that such an agreement “was a surrender of our basic policy.” But men like Herter and McCloy encouraged the president, whose last ambition before leaving office was to negotiate a test ban. So, at the end of March, Eisenhower suggested a compromise proposal for a limited two-or-three-year moratorium on such unverifiable testing, to be followed by further negotiations. The Soviets indicated their agreement, and an Eisenhower-Khrushchev summit meeting was scheduled for that May.158

  The president’s commitment on this issue was such that he now wanted to set up within the bureaucracy an autonomous unit devoted to the control of armaments. He felt there was such opposition to disarmament talks among the military establishment that such an arms-control agency should be located within the State Department. But he wanted a man to head it who “would have stature roughly equivalent to that of the Secretary of Defense.” In short, he wanted McCloy. Once again an effort was mounted to persuade the Chase chairman to come back to Washington. Eisenhower, Herter, and Gruenther all talked to McCloy, who acknowledged that he was “tremendously interested” in the disarmament job. Under Chase’s rules, he was supposed to have retired on March 31, 1960, his sixty-fifth birthday. But because of an unresolved dispute between David Rockefeller and George Champion on the division of their responsibilities in the wake of McCloy’s departure, the Chase chairman had agreed to stay on for another six months. In the end, McCloy called the president back to say “that overriding personal considerations, along with his Bank commitments, would make it impossible for him to take on a full-time job before the first of the coming year.”159 The creation of the Arms Control and Disarmament Agency would have to wait until the next administration.

  On the eve of what Eisenhower thought was to be a major triumph for his administration, the president committed a most serious blunder. Pressed by the CIA to authorize one more U-2 overflight, Eisenhower agreed, provided no flights occurred past May 1, 1960, two weeks before his scheduled departure for the Paris summit. On that day, Gary Powers took off from a U.S. base in Turkey, and shortly later a Soviet anti-aircraft missile shot his U-2 down.160 Had Eisenhower acknowledged responsibility for the flight, and explained to the American people the existence of the U-2 project (which the Soviet government had known since 1956), the summit might still have proceeded. All Khrushchev needed was a bland statement of regret for the flight, the kind of statement the administration had in fact made on previous overflight incidents. But Eisenhower engaged in a cover-up, thinking that the downed U-2 had been destroyed and its pilot with it. The president denied that there had been any spy plane and suggested that the plane shot down had been a weather aircraft that accidentally drifted off course. Within days, Khrushchev caught him in this lie, producing not only a very much alive Powers, but also reams of the plane’s surveillance photos.

  The severely embarrassed president had been caught lying to his own people. To make matters worse, the administration now issued a series of conflicting nondenial denials. Admitting that the plane was equipped for photosurveillance, the State Department denied that the president himself had authorized the flight. James Reston concluded the next day in The New York Times that Washington was “caught in a swirl of charges of clumsy administration, bad judgment and bad faith.” Eisenhower finally held a press conference and admitted to the whole project, but refused to offer the Soviets any apologies. Spying, he said, “is a distasteful but vital necessity.”161

  Khrushchev was certainly angry about the whol
e incident, but in retrospect some historians have suggested that as a matter of political necessity the Soviet premier needed to carry back an official apology to his own military establishment.162 Equally compelling political factors precluded Eisenhower from dramatizing his humiliation by bringing any kind of apology to Paris. The summit was therefore doomed even before it began, and with it any hopes for a test-ban treaty. Before finally walking out, Khrushchev savaged the Americans and ridiculed the president in the most personal manner.

  McCloy was extremely upset by these developments. As the U-2 crisis unfolded in early May, he talked with a variety of administration officials on how to limit the damage. When Khrushchev verbally assaulted the president in Paris, McCloy quickly cabled Eisenhower, “I do not know when I have been more distressed over anything than the news of the treatment you received at the hands of the Soviet President in Paris. . . . To have him deliver the invectives that he did against you angered and saddened me. You behaved with the greatest dignity and restraint.”163 Later, Ike sent a note to McCloy, referring to his “amazing experience in Paris,” and thanked him for his “extremely heart-warming” message, which arrived “at a most opportune moment.”164

  The president was shaken by his encounter with the temperamental Khrushchev, and his critics at home had a field day. Many of them, including Democratic presidential candidate John F. Kennedy, blamed the president for the collapse of the summit. Kennedy said that Ike had “let the risk of war hang on the possibility of an engine failure,” and that he should have “expressed regret” for the overflight if that would have kept the summit talks alive.165 McCloy quickly responded to Kennedy’s comments in a commencement speech a few days later. He complained that a “spate of gratuitous and inappropriate comments” had been made by “some political aspirants.”166

  Nevertheless, it was true that the Eisenhower presidency was terribly wounded by the disastrous collapse of the summit and its bitter aftermath. Eisenhower himself complained how the “stupid U-2 mess had ruined all his efforts” to end the Cold War with a test-ban treaty. The president even told one aide that he saw “nothing worthwhile left for him to do now until the end of his presidency.”167

  McCloy too was disappointed that nothing was going to come of all his efforts in the disarmament committee, and he was disturbed by the general drift in the administration. With the election just a few months away, Eisenhower was a lame-duck executive, and he acted the part. McCloy did not play any public role in the presidential campaign that year, feeling the same ambivalence about Nixon as did Eisenhower himself; both men just hoped the vice-president had matured during the last eight years. McCloy was willing to vote for Nixon, mainly out of loyalty to the Republican Party and Eisenhower. (He contributed $500 to the Nixon campaign.) He was partisan enough to dislike Kennedy’s attacks on Eisenhower’s handling of the failed summit, but, on the other hand, many in McCloy’s circle of friends at the Council on Foreign Relations and on Wall Street were working for the Massachusetts senator. At the end of August, Kennedy announced the formation of a bipartisan panel of consultants to advise him on national-security issues. He cited Franklin Roosevelt’s and Harry Truman’s appointment of “many outstanding Republicans” to positions of influence on foreign-policy matters, and specifically mentioned McCloy, Lovett, and Stimson. Eisenhower, he pointed out, had not appointed many Democrats to his administration. Kennedy proposed to “start the renewal of that tradition right now,† and therefore he was naming to his panel of advisers Paul Nitze, David Bruce, Roswell L. Gilpatric, and James Perkins.168 All of these individuals, of course, had worked with McCloy in various capacities and considered themselves good friends of the Chase chairman.

  Soon after Kennedy won the election by a paper-thin margin, Drew Pearson reported that McCloy was being considered for a Cabinet post.169 The Eisenhower administration was seeing its last days, but McCloy’s influence in Washington, particularly on the central issue of nuclear warfare and arms control, was actually on the rise.

  * * *

  I. Other members included Henry T. Heald, the president of the Ford Foundation; Joseph Johnson, president of the Carnegie Endowment for International Peace; Don Price, in charge of the Ford Foundation’s international program; Dean Rusk, president of the Rockefeller Foundation; petroleum consultant Walter J. Levy; David Lilienthal; publicist Herbert Bayard Swope (the man who coined the phrase “Cold War”); Arthur Hays Sulzberger, publisher of The New York Times; authors and journalists William L. Shirer, Theodore H. White, and James P. Warburg; Adolph Berle; Nelson Rockefeller; John D. Rockefeller III; and business tycoons like Najeb Halaby, Harold K. Hochschild, Henry Luce, Harry F. Guggenheim, Roger Blough, Marshall Field, and John Whitney.49

  II. The Soviet proposal, outlined by Polish Foreign Minister Adam Rapacki, envisioned a demilitarized zone consisting of the two Germanys, Poland, and Czechoslovakia. Rapacki floated his plan in various forms from 1957 through March 1962. But the Western powers repeatedly rejected the plan, even though it provided for on-site inspection and a phased reduction of both conventional and nuclear forces.120

  BOOK V

  The Kennedy Administration

  CHAPTER 23

  Arms Control Czar

  “. . . the only way you can make a man trustworthy is to trust him.”

  HENRY STIMSON

  Having won the presidency, John F. Kennedy thought he would take great satisfaction in naming his Cabinet. But in the weeks after the election, he found the process an exercise in frustration. He was particularly annoyed by “the loud claque of Stevenson’s liberal admirers who wanted Adlai to head the State Department.”1 Stevenson, he thought, had shown himself to be indecisive, and the most he would offer the former presidential nominee was the ambassadorship to the United Nations. He would give the liberals some of the minor Cabinet posts. But for the three most powerful positions—State, Defense, and Treasury—Kennedy wanted the best-qualified men he could find. And by this he meant men of Henry Stimson’s stature, men whose experience in the New York financial community and the country’s legal establishment afforded them, he thought, a certain soundness of mind and bipartisan common sense.

  Given the narrow margin of Kennedy’s election mandate, it made political sense, of course, to reach out beyond the Democratic Party’s liberal constituency. But, then, it was also clear that John Kennedy was essentially a much more cautious and conservative politician than either his supporters or his detractors thought. The forty-three-year-old president-elect had reached adulthood at a time when men like Henry Stimson, John McCloy, and Robert Lovett were running a global war, the war in which Kennedy became a hero. He felt a certain awe for these Stimsonians; they were men of substance who had made commanding decisions in the greatest war of all time. He also knew from his father, who had been almost a pariah on Wall Street, that people like McCloy and Lovett were Wall Street insiders. Indeed, part of his attraction to these men stemmed from the fact that they came from an elite slice of society from which the Irish Catholic Kennedys had always been excluded.

  So Kennedy’s good Irish American friend and aide, Kenneth O’Donnell, was somewhat taken aback one day in late November when the president-elect remarked that he wanted to become acquainted with Lovett. O’Donnell argued that Lovett and others in his crowd were Republicans, and certainly not liberals. But Kennedy responded, “Henry Stimson was one of those New York Republicans, and Roosevelt was glad to get him. I’m going to talk with Lovett and see what he can do for me. . . . I can use a few smart Republicans. Anyway, we need a Secretary of the Treasury who can call a few of those people on Wall Street by their first names.”2

  Kennedy may have wanted them, but men like Lovett and McCloy had only skepticism for the new regime. Lovett had a positive dislike for Kennedy’s father, dating back to his knowledge of the financier’s questionable practices on Wall Street during the 1920s. McCloy associated the elder Kennedy with pre-World War II appeasement and isolationism. And as for his son, he knew the young
senator had made no effort to institute any connections to the Council on Foreign Relations or other Establishment institutions. All in all, the president-elect seemed to be a man of little experience or substance.

  Kennedy approached Lovett first, phoning the investment banker at a corporate board meeting in New York on the morning of December 1, 1960. Invited to lunch, Lovett caught the next plane for Washington and within hours found himself shouldering past a crowd of reporters outside Kennedy’s tiny town house at 3307 N Street in Georgetown. Inside, he was first greeted by three-year-old Caroline Kennedy, carrying a football and dressed in overalls bearing the letter “H.” Lovett turned to Kennedy as he walked in and said, “That’s a hell of a way to treat a Yale man.” The ice broken, the two men took to each other surprisingly well, considering their differences in age, background, and politics. Lovett saw that the younger man was as much a skeptic as himself. Kennedy, in turn, was charmed by Lovett’s bluntness and wit. He just grinned when Lovett immediately volunteered that he had not voted for him. And when the president-elect asked what the New York financial community thought of John Kenneth Galbraith, Lovett wryly said his colleagues believed the Harvard professor to be a fine novelist.3 Unlike most of the men Kennedy had been seeing since the election, this one sought no favors and wanted no office.