Henry l stimson, p.12
Henry L. Stimson, page 12
The coming of the Great Depression and the international economic collapse of 1931 completely changed the context for American foreign policy and introduced a host of new crises and challenges. The failure of the central banks of Austria and Germany plunged Europe into an economic crisis that destroyed the agreements of the prior decade, led to rising nationalism, and returned the danger of international conflict to the fore. With the growing political crisis in Germany and the rise of the Nazis came the twin dangers of war and revolution. The rapid drop of world prices for raw materials created economic problems throughout Latin America that stimulated new political upheaval and growing opposition to American intervention in the region. These conditions raised the question of the most effective means for the United States to protect its interests while promoting stability and preventing the spread of Communism in the region. In the Far East, fighting broke out in 1931 with Japan’s invasion of Manchuria. Japan’s aggression threatened the political integrity of China, stability throughout all of East Asia, and America’s Open Door policy and interests in the region.
Although these problems were unexpected, Stimson responded to them in a manner consistent with his past actions and his views of America’s proper role in the world. He continued to push for disarmament, debt reduction, and the upholding of treaties in Europe, ended the use of American forces in Latin America, and led the international condemnation of and opposition to Japan’s aggression in China. Yet Stimson was frustrated time and again by what he saw as Hoover’s unwillingness to exercise the necessary world leadership and by the constraints of U.S. public opinion that supported only policies he deemed too limited and misguided.
Stimson’s years at Foggy Bottom were, therefore, difficult and often unhappy ones because of the international crises, the domestic depression, and his often tense relationship with Hoover. Still, he took solace in the effective work of his staff, in his enjoyment of his Washington estate Woodley, in his confidence that the policies he pursued were the correct ones for the nation and the world and that he had achieved as much as he could given the president’s timidity and the nation’s isolationism. Stimson maintained the principle of debt reduction and fought for disarmament as he upheld international commitments and continued efforts at negotiated settlements in Europe. He implemented what would be termed the Good Neighbor policy under Franklin Roosevelt in Latin America and established a long-standing U.S. policy with his refusal to recognize Japanese aggression in Manchuria. Still, only in Latin America did Stimson believe he was able to carry out his policies fully and achieve complete success. Not until the outbreak of World War II were the positions and policies Stimson advocated as secretary of state adopted as the official policy of the United States in Europe and Asia.
A Bath of Ink
The key problem that faced American foreign policymakers in the wake of World War I was how to create stability and order in the world, particularly Europe, while promoting and protecting American trade and investments. The United States had emerged from the Great War as the world’s leading creditor, greatest industrial producer, and its most powerful nation. Republican officials drew several lessons from World War I that guided the formulation of their policies. They did not believe that the League of Nations was adequate to deter future aggression and wars. The only means to peace were political stability and economic prosperity that would allow the great powers to cooperate and recognize their common goals. The war proved the interdependence of the world’s economies and that American prosperity was, therefore, tied to the economic recovery of Europe. As Hughes stated in 1921, “The prosperity of the United States largely depends upon the economic settlements which may be made in Europe.” The next year he noted that “the economic conditions in Europe give us the greatest concern. . . . It is idle to say that we are not interested in these problems . . . as our credits and markets are involved. . . . We cannot dispose of these problems by calling them European, for they are world problems and we cannot escape the injurious consequences of a failure to settle them.”1 Central to European economic health was a revived and vital German economy. This meant that there would have to be economic adjustments to the punitive reparations imposed by the Treaty of Versailles to facilitate German recovery. In addition, European nations owed billions of dollars in war debts to the United States that were proving to be a significant drain on their economies. These debts, although never directly linked to reparations payments, would be lowered along with reparation payments to promote economic recovery. Although Republican leaders continued to reject political involvement in the affairs and disputes of Europe, the 1920s were characterized by vigorous American efforts to use its economic power to assist Europe’s economic recovery and create a cooperative international system on the continent while continuing to isolate the Soviet Union.
The main problems blocking Europe’s and Germany’s recovery were the agreements in the Treaty of Versailles and France’s intransigence regarding any revisions that aided Germany. Republican officials saw the Versailles settlement, in particular, the high reparations payments, as too harsh on Germany. They feared that Germany would never be able to recover fully from the war if it met its full obligations, and that this would not only hold up European recovery, but create political instability and the possibility of revolution. This anxiety was compounded by France’s policies of enforcing the Treaty of Versailles while simultaneously spending enormous sums on defense and forming hostile alliances to encircle Germany. In the face of Paris’s refusal to entertain any treaty revisions and its efforts to collect Germany’s full payments, there was little the United States could do. Germany, however, was unable to make all of its scheduled payments, and France, strapped by its military overspending, moved to force German compliance in 1923 by sending its forces into the Saar Basin to collect at bayonet point. The Germans responded with passive resistance, and the French occupation had disastrous consequences for both the French and German economies, with France losing its credit due to a drastic devaluation of the franc and Germany beset by hyperinflation.
This crisis allowed the United States to take action and impose a settlement on American terms. An American delegation, headed by the banker Charles Dawes, traveled to Europe with the goal of stabilizing French and German finances and setting up arrangements to promote economic recovery. For any plan to work, France would have to accept a downward revision in reparations payments. In order to gain agreement from Paris, American bankers extended loans to France to restore the value of its currency and to offset its loss in revenues from scaling back the reparations. Moreover, American officials promised to negotiate a reduction in the debts owed to the United States once the economies of Europe were stabilized. American loans were made available to Germany as well to finance recovery, spur investments, and increase German imports.
The Dawes Plan worked as it was expected to. Between 1924 and 1929, Germany’s economy recovered—and with it the rest of Europe—and Berlin resumed its reparation payments. The United States negotiated agreements with all of the European nations to lower the war debts owed it, based on a formula of capacity to pay. By 1925, U.S. trade with Europe was up to $2.6 billion annually, and in the first five years of the Dawes Plan, American bankers lent Germany over $1.3 billion. That plan was quickly followed by the Locarno Pact that guaranteed respect for all existing political borders in Western Europe. In 1929, a second American delegation, headed by Owen D. Young, negotiated a second series of reparation and war-debt reductions and new loans designed to fine tune the 1924 arrangements. These two plans together appeared to demonstrate that prosperity and security were best secured in a cooperative, integrated economic system.
In addition to these financial arrangements, the United States promoted disarmament after World War I as a means to solve various problems, particularly in Asia. Through the so-called Washington System, the United States negotiated a series of treaties that limited naval shipbuilding, sought to protect China’s territorial integrity and the Open Door policy, and attempted to integrate Japan into a Western-led international system. It was hoped that disarmament would reduce the amount of capital used for weapons and lessen the chances of international conflict. The money saved on armaments would help promote economic recovery, while the reduction in military forces would persuade nations to settle their differences through negotiation and arbitration rather than conflict. By disengaging Japan from China, while providing for Japan’s economic and security needs and eliminating her efforts to expand, East Asian political stability could be achieved.
In 1922, Secretary of State Hughes opened the first Washington Naval Conference with the pledge that the United States would scuttle all the ships it was currently building and called upon the other leading naval powers to take similar steps. The results of these negotiations were that the allowed tonnage of capital ships was fixed at the ratio of U.S. and U.K. 5: Japan 3: France and Italy 1.25. The Washington Naval Treaty was followed by the Nine-Power Treaty that provided for formal recognition of the Open Door and China’s control over its territory through the elimination of the extraterritorial arrangements of various powers. Throughout the 1920s, China’s Kuomintang Party struggled to unite China under its rule, with the protection of the Washington System, while the United States continued to promote China’s independence and efforts at international cooperation in the Pacific.
Stimson had closely followed the development of these policies throughout the decade and found no pressing international issues that demanded his immediate attention. He, therefore, delayed his departure from the Philippines to oversee a special session of the Philippine Congress. Stimson finally arrived in Washington, D.C., on March 26 and was sworn in as secretary of state on March 28. The Colonel was determined to continue the well-established policies of his predecessors in Europe and Asia, and further American efforts at debt reduction, disarmament, and international cooperation. Only in Latin America did he seek any fundamental changes in policy, but he believed there was plenty of time to act. His first order of business was to get to know Hoover better. Stimson spent his first ten days as secretary of state living at the White House and meeting with the president. Stimson was quickly impressed with Hoover’s intellectual prowess and “capacity for assimilating and organizing information.”2 They talked over a wide range of issues, found themselves in general agreement on the major points, and grew to trust each other’s words and intentions. The two men would soon discover, however, that they were temperamentally different, had conflicting ideas on leadership, and, when the series of international crises brought about by the Great Depression erupted in the next few years, often disagreed over policy.
Stimson was by nature and training an advocate and one who sought to study a problem and then take action, “confident that aggressive executive leadership would win followers.” Hoover, on the other hand, tended to study problems for longer periods of time, and as Stimson noted, had a tendency toward “seeing the dark side first.” Stimson once lectured Hoover, an engineer, that political leadership was “not like building a bridge” in that not every stress could be calculated. “In the movements of the great currents of human opinions . . . you could make your plans only for a certain distance. . . .” Trying to consider all angles led to vacillation and weakness. When in doubt, Stimson argued, you “march toward the guns.”3 Given these differences, their relationship, and Stimson’s term as secretary of state, survived only because of the fundamental trust established between the two men and Hoover’s confidence in Stimson’s unwavering loyalty.
Secretary of State Stimson, 1930. Henry Lewis Stimson Papers, Manuscripts and Archives, Yale University Library
While Stimson was settling in on his new job, he had to organize his office and find a suitable place to live in Washington. Unlike all his other positions, here Stimson had far less control over selecting his staff. Still, he did insist on appointing his own undersecretary of state, naming the attorney and his long-time friend Joseph Cotton to the position. Cotton served Stimson well as both an advisor and confidant until his untimely death in March 1931. Cotton was replaced by William Castle, a career officer and a friend of Hoover’s whom the president had strongly urged Stimson to appoint. This was a decision Stimson quickly regretted. He could never fully trust Castle to carry out his instructions or to demonstrate loyalty to him, and he suspected that Castle was talking to Hoover behind his back. Stimson, therefore, had to rely on others for counsel. The rest of the senior administration was made up of career officers until 1931, when Stimson appointed a number of new men to assist him with the economic collapse in Europe. Most important, to replace Cotton as his personal confidant, he named his law partner Allen Klots as a special assistant. To provide him with economic advice, Stimson brought in Harvey Bundy, a Boston attorney with experience in finance as an assistant secretary, and the economist Herbert Feis as his economic advisor.
Stimson’s search for a home lasted until summer, when he purchased the Woodley estate in the Rock Creek Valley for $800,000. Woodley, the former summer home to four presidents, was a large southern colonial house situated on twenty acres that provided the Colonel a commanding view of Washington, D.C., and plenty of opportunity for riding. This was the closest the Stimsons could come to their beloved Highhold estate and still live in the city. Stimson would spend many hours of his workweek at Woodley playing paddle tennis with various staff members as they discussed the issues confronting them. Stimson kept the house until 1946 when, upon his final retirement, he donated it to Andover.
Stimson’s first year in office was dominated by his preparation for and participation in the London Naval Conference of 1930. This meeting was critical for two reasons. First, Stimson saw it as a means to address the shortcomings of the Washington Treaty and to build on the achievements of the past decade. Second, it could further peaceful international cooperation, particularly between the United States and Great Britain, and, along with the Young Plan, create a context for a more comprehensive settlement of Europe’s remaining problems. As he began planning for this meeting in 1929, Stimson could not know that the crash of the American stock market and the ensuing international financial crisis would make London’s the last disarmament agreement of the post–World War I period.
Although the parties to the Washington Treaty had honored their commitments, competition reappeared in new categories of ships, the most important among them the heavy cruisers of 10,000 tons with 8-inch and 6-inch guns and great speed, which were not covered in that agreement. On five different occasions after 1922 negotiators had failed to solve this problem, and the construction of these cruisers continued to threaten a renewal of naval rivalries and another round of arms buildups. The London meeting convened on January 17 and lasted until April 22. Agreement was quickly reached between the United States and Great Britain on the limitation of cruisers with 8-inch and 6-inch guns. Having accomplished his first and primary goal of improved relations with London, Stimson turned his attention toward Japan. Tokyo was demanding concessions that raised its Washington treaty ratio of battleship strength vis-à-vis the United States and Great Britain to 7:10. Stimson considered this demand an unacceptable threat to the whole structure of disarmament, and held to the 6:10 ratio in heavy cruisers and battleships. To gain Japanese agreement, Japan was granted its desired ratio in other naval categories and, for submarines, parity. Moreover, the United States agreed not to complete its heavy cruiser program until 1936, after the treaty’s expiration date. This allowed for a reopening of the question before Japan faced the complete buildup of the American Navy.
Stimson was not concerned that the meeting failed to reach a settlement on the size of the French and Italian navies. He had accomplished in London all that he set out to do. The specific reductions were not so important to him as the fact that there was an agreement to control building by the three leading powers, and that a first step toward greater international cooperation had been taken. Most important, for Stimson, was the improvement of relations with Great Britain. He saw the London Naval Conference “as a method of bringing the British and the Americans together.” Stimson was always a “confirmed believer in the vital importance of firm Anglo-American friendship,” and the improvement of relations between London and Washington was “a cardinal objective” of his service as secretary of state.4 It was also, however, the last time that Stimson would achieve complete success in his European policy.
The beginning of the depression elicited new efforts to, in the words of one of the promoters of a new tariff, make the nation’s economy “self-contained and self-sustaining.” Recalling the difficulties that tariff policy had caused President Taft, Stimson stayed out of the public debate over the Hawley-Smoot Tariff Act of 1930. Although Stimson completely opposed the excessively high barriers the tariff established, the most restrictive in the nation’s history, he did not want to spend his prestige and influence over this volatile political issue. He understood that shutting off American markets from foreign trade, while politically attractive at the outset of the Great Depression, would make it more difficult for other nations to earn dollars to pay back their debts and for American producers to sell their goods abroad. Stimson attempted to persuade Hoover to veto the bill, but his arguments concerning the tariff’s damage to international finances failed to persuade the president to oppose this popular protectionist measure.5
At the same time, Stimson sought to impose his own values on the conduct of American foreign policy. The Colonel had long acted on the principle that the only way to make people trustworthy was to trust them. He was, therefore, surprised to learn that the State Department, through its so-called Black Chamber, was routinely reading the communications between foreign embassies and their home governments. For a man who held trust as the highest value, these actions were inexcusable, and Stimson closed down the State Department’s code-breaking office. He thought this was necessary to demonstrate his commitment to international cooperation and good will. Stimson would later defend his action by stating that “gentlemen do not read each other’s mail.”6
