Battle of Titans

THE ADMINISTRATION

Pride & joy of Henry Wallace is the Board of Economic Warfare. Last week he found it in mortal danger from Jesse Jones, the Administration’s Old Man of the Sea. Like a mother bear with a cub in trouble, Henry Wallace attacked in full fury.

Jesse Jones had never been reconciled to letting control of wartime stockpiles pass to BEW from his own Reconstruction Finance Corp. Up & down Capitol Hill Jesse Jones went, working steadily on his wide circle of friends and debtors, even hinting publicly that he considered BEW an irresponsible one-man show. A whispering campaign started in Congress: BEW was giving away U.S. money to build postwar industries in Russia and South America; it was trying to introduce bathtubs to the Amazon jungles.

Last week Henry Wallace discovered that the Senate Appropriations Committee was about to scuttle BEW by 1) cutting out its funds for traveling expenses, 2) giving Jesse Jones veto power over its foreign purchases.

Henry Wallace’s attack was a public statement that made banner lines from one end of the country to the other. By making it he specifically broke the President’s directive of August 1942 against public airing of Administration quarrels. He charged:

“On April 13, 1942, the President vested in BEW complete control of all public-purchase import operations. Mr. Jones has never been willing to accept that fact. He has instead done much to harass the administrative employes of the board in their single-minded effort to help shorten this war. . . .

“The BEW has tried for over a year now to do its job in spite of the obstructionist tactics Mr. Jones has employed. . . For all the full power the President has given the BEW over imports, we are helpless when Jesse Jones, as our banker, refuses to sign checks in accordance with our directives. . . .

“[Our] purposes have been in large measure accomplished—but only in the face of an exasperating rear-guard action by RFC officials who are still fighting the war with peacetime red tape, corporate technicalities, and . . . unnecessary caution. . . . All this, and I want to emphasize it, is bureaucracy at its worst; it is utterly inexcusable in a nation at war. . . .”

Fact & Figure. Because of these quotable insults, most of Henry Wallace’s 28-page statement went largely unprinted or unread. But the rest of it actually constituted a chilling indictment of a public official.

For nearly two years, beginning in the summer of 1940, Jesse Jones had been charged with the duty of importing stock piles of materials vital to war production. Item by item, Henry Wallace went down the list, showing how many tons the war production agencies wanted, how much Jesse Jones had bought in his two-year tenure, how many tons BEW had then bought in the following nine months. His figures looked damning:

Product Tons asked by OPM-WPB Contracted for by Jones BEW

Beryl Ore …….. 3,000 300 4,118

Castor Seeds ….. 178,571 None 293,799

Cobalt ……….. 2,500 159 876

Corundum ……. 6,000 None 12,000

Fats & Oils …….317,499 2,200 776,622

Palm Oil …… 30,000 None 23,928

Flax Fiber….. 6,500 None 8,000

Jute ….. 80,000 1,210 88,000

Sisal………… 100,000 33,600 310,000

Tantalite …….. 500 None 161

Zirconium …….. * None 21,575

Quinine & Quartz. On the subject of Jesse Jones’s activities since BEW took over, Henry Wallace had this story to tell:

On one of the last U.S. planes to leave the Philippines, General Douglas MacArthur put 2,000,000 high-grade cinchona seeds (for quinine to combat malaria), urging that they be planted “without delay” to augment the skimpy U.S. stockpile. General MacArthur had watched men die for lack of quinine. BEW worked out, for formal War Department approval, a plan to grow the trees in Costa Rica. But, Wallace charged, RFC held up the project for months.

Said Henry Wallace: “Mr. Jones . . . takes pride in the profits of RFC. . . . If [these] cinchona trees have to be stripped after two and one-half years because of desperate military needs for quinine, they will yield about 10,000 oz. of quinine—and a $125,000 loss to the RFC. . . .”

Pot & Kettle. For four days Jesse Jones roared publicly and privately. He demanded a formal investigation. He called up friendly Senators and shouted: “That damned liar has called me a liar three times. I’m going to call him one ten times.” Once he said: “I’m 69 now, but if I can’t handle that little —from Des Moines I’m older than I think and maybe I ought to go back to Houston. But I don’t intend to. I know what the people think of me and what they think of Wallace.”

This week he reduced his anger to a 30-page statement and a five-page letter to the Senate Appropriations Committee. Said Jesse Jones:

“Reluctant as I am to burden the Congress and the public with a detailed reply to Mr. Wallace, his tirade is so filled with malice, innuendo, half-truths and no truths at all, that considerations of self-respect and of common justice to my associates force me to expose his unscrupulous tactics. . . .

“That I have harassed administrative employees of BEW . . . is as silly and ridiculous as it is false.

“The record . . . reveals that of RFC foreign purchases and commitments totaling $3,500,000,000 made since the middle of 1940, not more than 10% has been acquired under programs initiated since BEW took the field . . . and that of $1,600,000,000 in foreign materials already paid for by RFC, less than 5% has come from such programs; and this after 15 months during which time BEW has frantically sent at great expense many ‘missions’ composed mostly of inexperienced men to all parts of the world. . . .”

Malice & Mischief. In regard to the strategic materials, from beryl ore to zirconium, of whose purchase he had been accused of laxity, Jesse Jones insisted that he had built up the stockpiles as fast as the various war agencies wanted them — in effect, that if this was a slow process, the blame lay not with him but with his marching orders.

On quinine, Jesse Jones said he had built up a large stockpile, had advanced money for the BEW cinchona tree program as soon as possible. “This credit would have been established many months earlier if the BEW had acted promptly,” he said. “The BEW’s handling of the procurement of cinchona bark has been vacillating . . . and disorderly in administration. . . . A very small quantity of cinchona bark has been produced as a result.”

Patriotic or Profligate? Jesse Jones scorned all of BEW’s methods. He asserted:

“RFC believes that a maximum of production and procurement can be obtained in a minimum of time and at a minimum of expense without resorting to methods bordering on the hysterical. . . .

“As for the charge which Mr. Wallace appears to regard as a major crime, that I have attempted to safeguard the taxpayers’ money, I must plead guilty.

“Squandering the people’s money even in wartime is no proof of patriotism. . . .Our immediate efforts in the foreign field should be concentrated on war procurement needs, and not on postwar ideologies.”

Henry Wallace kept mum to all comers and callers, at week’s end was invited to the White House.

Cause without Cure. At the bottom of this bitter dogfight were three basic factors: 1) Jesse Jones’s great urge to hold on to his vast powers, 2) the never-settled, equivocal division of authority between Jones and Wallace, 3) the inevitable conflict over business method between banker-minded Jesse Jones and war-worried Henry Wallace.

No man could question cither’s patriotism. By all standards of ordinary procedure it seemed inconceivable that both could now remain in their administrative jobs. If Henry Wallace’s indictment was right, Jesse Jones had been guilty of abysmal blundering. If Henry Wallace was wrong, then the Vice President had been guilty of irresponsible mischief.

War Mobilizer James F. Byrnes called the two battlers to his White House office —not to fire them but to urge them to try to patch up their quarrel. Congressional committees carefully shied away from an investigation. No Congressman wanted to embarrass Jesse Jones further, and there seemed little honest chance on this occasion to take a whack at Henry Wallace.