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Last Updated on May 7, 2015, by eNotes Editorial. Word Count: 2224

The premise of this earnestly written, well-researched book is that during the middle decades of the twentieth century an elite group of Wall Street insiders known as the Establishment came to wield great political power, especially over the nation’s foreign policy. In order to win the Cold War and expand the international operations of America’s most powerful corporations, these self-proclaimed public servants helped transform their country (to its ultimate detriment, Bird believes) into a national security state, with most important operations carried out unobserved and uncontrolled by the larger body politic. They were dedicated to creating a counterrevolutionary world order, one that John J. McCloy labeled Pax Americana.

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In May of 1962, journalist Richard Rovere published a satirical article in Esquire that used the word “Establishment” to describe a group of moderate Republicans who played a prominent role (official and unofficial) in Democratic administrations going back to 1940. Liberal economist John Kenneth Galbraith dubbed John J. McCloy “chairman of the Establishment.” Although his name was little known to the general public, McCloy exerted more influence than most contemporary congressional or cabinet members. “Alone among his peers,” writes Bird, “he managed to straddle for nearly five decades the interlocking directorships of corporate America, the federal government, and the country’s leading public-policy and philanthropic foundations.” Neither intellectually brilliant nor an original thinker, McCloy was a practical, persistent, uncharismatic conciliator (Henry Kissinger called him a genial gnome), frank and unafraid to tackle problems, with an open mind and yellow pad at the ready.

McCloy’s portfolio came to include chairmanships of the Chase Manhattan Bank, the Council of Foreign Relations, the Ford Foundation, and the Advisory Committee on Arms Control and Disarmament. Among his corporate clients were the leading steel, insurance, automobile, and oil companies. They got their money’s worth, as McCloy saw no conflict of interest in merging government and business, believing quite literally that what was good for Chase Manhattan Bank was good for the country.

The Chairman is a remarkably dispassionate, fair-minded, and even-handed “life and times” biography. Ten years in the making, it demonstrates the author’s mastery over the burgeoning historical literature on such germane subjects as the internment of Japanese Americans, postwar Germany, McCarthyism, the Cuban Missile Crisis, and the Iran hostage crisis. The only primary topic getting short shrift is disarmament.

Bird does not probe deeply into the inner man, nor is McCloy’s private life examined beyond occasional references to hunting and fishing trips, tennis matches, and demonstrations of marital compatibility. An assimilator possessing fewer insecurities than most social climbers, McCloy apparently was a solid family man and loyal friend, but his prejudices and degree of acquisitiveness could bear more scrutiny. How wealthy was McCloy? Did he become one of America’s super-rich or remain merely their steward? These questions need to be answered before one can assess how disinterested was his public service.

Not quite the epitome of the Horatio Alger rags-to-riches American success myth, McCloy grew up on the wrong side of Philadelphia’s “Chinese Wall,” a Pennsylvania railroad viaduct separating the common people from their “betters.” His father, a high-school dropout, rose to a chief clerkship at Penn Mutual Life Insurance Company but was himself denied a policy because of a heart murmur. His untimely death forced his widow, Anna, into a career as a hairdresser. Anna’s wealthy clientele included the family of George Wharton Pepper, a prominent Main Line attorney who would become young McCloy’s first role model.

With frugal planning, Anna was able to launch her son on a path of upward mobility. The first stop was New Jersey’s Peddie Prep School, then on to Amherst College and Harvard Law School, with the summers of 1915 and 1916 spent with the right people at Plattsburg military training camp. Returning home after World War I, during which he missed most of the action, McCloy was advised by George Wharton Pepper to practice law in New York City, where his plebeian blood lines would not be so much a liability.

During the 1920’s and 1930’s, McCloy specialized in helping corporate clients avoid governmental regulations and, in some instances, file dubious bankruptcy claims that fleeced independent stockholders. When some of his colleagues were hauled before Senator Burton K. Wheeler’s Committee on Interstate Commerce, it appeared to McCloy that big business was unfairly being scapegoated as criminally responsible for the Great Depression. No New Dealer, he helped prepare the Schechter “sick chicken” brief that nullified Franklin D. Roosevelt’s National Recovery Administration.

The case that most enhanced McCloy’s reputation and in many ways was the formative experience of his life was a decade-long effort to recover damages from the so-called Black Tom disaster. In 1916, at a munitions terminal located in New York harbor, German secret agents had blown up wagons full of high explosives awaiting shipment to France. McCloy’s relentless pursuit of clues paid off in a lucrative 1939 settlement from the Mixed Claims Commission. Thereafter, he was an advocate of effective American intelligence capabilities.

In the fall of 1940, with sabotage stories in the news, McCloy became a consultant on Army intelligence under Secretary of War Henry Stimson, who would become even more a role model to him than Senator Pepper. An ardent interventionist, McCloy helped lobby for the Lend-Lease Act and put together the decoding operation that led to the MAGIC interceptions of Japanese secret messages. He also worked on contingency plans for creating a ten-million-man army and for coordinating strategy with the British. On September 19, 1941, he told the Michigan Bar Association, “We have as much chance of ignoring this war as a man has of ignoring an elephant in his parlor.”

Moving up to a position as assistant secretary of war and operating as a virtual commissar, McCloy played a key role in the internment of more than 110,000 Japanese Americans living on the West Coast. McCloy later tampered with evidence sent to the Supreme Court to forestall an adverse ruling on the constitutionality of the concentration camps. The ease with which McCloy wielded power led Secretary of the Interior Harold Ickes to describe him as likable but “more or less inclined to be a Fascist.”

McCloy supported opening a diplomatic dialogue with the French Fascist Vichy regime but dragged his feet at African American demands to desegregate the armed forces. Most egregiously, he turned a deaf ear to pleas to alter military policies in order to aid Holocaust victims. It would have taken little effort to bomb rail lines leading to Auschwitz, for example, but McCloy was skeptical of evidence that “pushy” Jews presented to him of Hitler’s so-called final solution.

On the other hand, McCloy opposed dropping the atomic bomb on Hiroshima without first warning the Japanese. He believed that the Japanese were on the verge of surrendering but needed assurance that Emperor Hirohito would not be treated as a war criminal. McCloy’s views on atomic diplomacy were influenced by Robert Oppenheimer, whom he deeply admired. McCloy would later lament the Red Scare excesses that resulted in the scientist’s classification as a security risk.

McCloy was instrumental in the building and design of the Pentagon and the launching of the Central Intelligence Agency (CIA). Infatuated with covert operations, he later used his banking connections to set up conduits for the CIA. His advocacy of an independent CIA earned him the enmity of J. Edgar Hoover, director of the Federal Bureau of Investigation (FBI).

McCloy turned down President Harry S. Truman’s offer to become ambassador to Moscow, but after a short stint as a partner in the Rockefeller family law firm, he accepted the presidency of the World Bank. He frugally augmented the bank’s bond rating, but during his watch most loans to underdeveloped countries were rejected.

More controversial was McCloy’s tenure as West German high commissioner. He got along well with the austere, authoritarian Chancellor Konrad Adenauer, who paid lip service to reunification but, like McCloy, was more interested in containing communism. Former Nazis such as Klaus Barbie were employed in clandestine activities and then spirited out of the country. McCloy granted clemency to industrialists such as Alfred Krupp, who had employed slave laborers, and physicians who had conducted experiments on death camp victims.

In 1953, McCloy became chairman of the newly merged Chase Manhattan Bank but remained, in Bird’s words, “Ike’s hidden vizier.” His White House connections brought him into contact with Texas businesspeople who were keeping the president’s freezer well stocked, buying him expensive suits, and even building him a summer cabin in Augusta, Georgia. McCloy helped two of them achieve a hostile takeover of the New York Central Railroad, a takeover that ultimately led to the Penn Central’s bankruptcy.

President-elect John F. Kennedy sought McCloy’s advice in making key cabinet choices, but the only assignment that McCloy would accept was as a part-time arms control czar. When the Russians would not forgo nuclear testing, McCloy urged a resumption of U.S. tests, not for scientific reasons but to avoid appearing weak. He shrugged off critics, saying “I don’t believe in world opinion. The only thing that matters is power.”

One of Kennedy’s inner circle during the Cuban Missile Crisis, McCloy initially favored air strikes but came around to supporting the naval quarantine. Even though he did not believe that the offensive missile sites would significantly alter the military balance of power, he worried about maintaining America’s credibility with its allies and adversaries.

McCloy’s first assignment for Lyndon B. Johnson (the only Democratic president he voted for other than Roosevelt in 1944) was to serve on the Warren Commission. Skeptical of the information provided by the FBI and CIA, whose investigations were slanted toward portraying Lee Harvey Oswald as the lone assassin, McCloy realized that the commission’s unwritten purpose was to reassure the public that there had not been a conspiracy, foreign or domestic, rather than to solve the case.

An overconfident supporter of American military action in Vietnam, McCloy was offered the ambassadorship to Saigon. When he and other assembled “wise men” lost faith in the attrition strategy after the 1968 Tet offensive and recommended a negotiated settlement, President Johnson complained that “the establishment bastards have bailed out.” McCloy appeared more perturbed by the disruptions of decorum at college graduations and monthly meetings of his beloved Council on Foreign Relations than by the continuation of the war under Richard M. Nixon. What he really lamented was how Vietnam shattered the bipartisan Cold War consensus.

During the 1970’s, McCloy used his clout to get the so-called Seven Sisters oil companies exempted from antitrust prosecution, supposedly so that they could deal more effectively with the members of the Organization of Petroleum Exporting Countries (OPEC). The result was that the oil companies made windfall profits from skyrocketing oil prices, which were blamed on OPEC. After the fall of the shah of Iran, McCloy, Henry Kissinger, and David Rockefeller orchestrated a pressure campaign to persuade President Jimmy Carter to allow the shah to come to the United States. Against his better judgment, Carter gave in, because he needed Establishment support on such other matters as a second Strategic Arms Limitation Treaty (SALT II). During the Iran hostage crisis, McCloy cynically blamed Carter for being caught off guard and said, “National honor is more important than American lives.”

During the 1980’s, McCloy endorsed the Ronald Reagan Administration’s enormous defense buildup. He was a close friend of CIA director William Casey but worried that too much attention was being given to Central America and not enough to Europe. He was made an honorary German citizen in 1985 at a White House ceremony. Mourners at his funeral four years later included former German chancellor Helmut Schmidt and Secretary of State James Baker, who read a testimonial from President George Bush.

Ideally, the Establishment was a meritocracy and its leaders possessors of what McCloy calledgravitas—probity of character, weightiness of judgment, and a balanced, realistic, practical understanding of life’s complexities. The reality was less exalted. During the mid-1960’s, for example, McCloy negotiated with Brazil’s left-wing President Joao Goulart on behalf of a corporate client, all the while privy to a CIA “destabilization” campaign that would ultimately topple him.

Bird’s book is a welcome antidote to the recent wave of nostalgic books about the Establishment. For example, Walter Isaacson and Evan Thomas’ The Wise Men: Six Friends and the World They Made (1986) laments the passing of those good old days when statesmanlike captains of industry steadied the ship of state by their wise counsel. The Establishment’s Cold War legacy, Bird concludes, was a costly national security state that left America “with an uncompetitive economy burdened with debt, high unemployment, low growth, and income levels more unevenly divided than at any time since the beginning of the Cold War.”

Sources for Further Study

Commentary. XCIV, September, 1992, p. 58.

Foreign Affairs. LXXI, Fall, 1992, p. 194.

Los Angeles Times Book Review. April 19, 1992, p. 1.

The Nation. CCLIV, May 25, 1992, p. 694.

The New Republic. CCVI, May 11, 1992, p. 40.

The New York Review of Books. XXXIX, October 8, 1992, p. 22.

The New York Times Book Review. XCVII, April 12, 1992, p. 1.

Political Science Quarterly. CVII, Fall, 1992, p. 544.

Publishers Weekly. CCXXXIX, February 17, 1992, p. 52.

The Wall Street Journal. April 16, 1992, p. A22.

Washington Monthly. XXIV, March, 1992, p. 53.

The Washington Post Book World. XXII, April 12, 1992, p. 1.

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