Banking on the Cold War

ON SEPTEMBER 21, 1945—five months after Franklin Roosevelt’s death— President Harry Truman assembled his cabinet for a meeting that one historian has called “a turning point in the American century.” The purpose of the meeting was to discuss Secretary of War Henry Stimson’s proposal to share atomic bomb information with the Soviets. Stimson, who had directed the Manhattan Project, maintained that the only way to make the Soviets trustworthy was to trust them. In his proposal to Truman, he wrote that not sharing the bomb with the Soviets would “almost certainly stimulate feverish activity on the part of the Soviets … in what will in effect be a secret armament race of a rather desperate character.”

Henry Wallace, the secretary of commerce and former vice president, agreed with Stimson, as did Undersecretary of State Dean Acheson (though he later changed his position), but Secretary of the Navy James Forrestal laid down the definitive opposition. “The Russians, like the Japanese,” he argued, “are essentially Oriental in their thinking, and until we have a longer record of experience with them … it seems doubtful that we should endeavor to buy their understanding and sympathy. We tried that oncewith Hitler. There are no returns on appeasement.” Forrestal, a skilled bureaucratic infighter, had made his fortune on Wall Street and frequently framed his arguments in economic terms. The bomb and the knowledge that produced it, Forrestal argued, was “the property of the American people”—control over it, like the U.S. seizure of Japan’s former Pacific Island bases, needed to be governed by the concept of “sole Trusteeship.”

Truman sided with Forrestal. Stimson retired that very same day, his swan song ignored, and Wallace, soon to be forced out of the Truman administration for his left-wing views, described the meeting as “one of the most dramatic of all cabinet meetings in my fourteen years of Washington experience.” Forrestal, meanwhile, went on to be the country’s first secretary of defense in 1947 and is the man who illustrates perhaps more than anyone else how Cold War militarism achieved its own coherence and legitimacy by adopting economic logic and criteria—that is, by envisioning military power as an independent domain of capital expenditure in the service of a political economy of freedom. From his pivotal work in logistics and procurement during World War II, to his assiduously cultivated relationships with anti–New Deal congressmen and regional business leaders sympathetic to the military, Forrestal both helped to fashion and occupied the nexus of an emerging corporate-military order. He only served as defense secretary for eighteen months (he committed suicide under suspicious circumstances in 1949), but on the day of that fateful cabinet meeting, he won the decisive battle, advocating for what he once called a state of ongoing “semi-war.”