Baruch Bernard

Bernard Baruch Discusses Atomic Agreement with Russia and Inflation

"I hardly think they can improve upon our original proposal to Russia."

BERNARD M. BARUCH, Typed Letter Initialed, to Leslie R. Groves Jr., September 5, 1957, New York, NY. 1 p., 7.75" x 9.875". Very good.

Excerpt

"I hardly think they can improve upon our original proposal to Russia. I believe that if we had put that plan forward again, explaining what it means and how it could work, we would have done much better than this hither and thither policy which gets us nowhere. Of course you know of my fight against inflation. We are now suffering not from inflation itself, but its effects. No over-all ceiling would do any good now. The government and the bankers have been the greatest offenders in not having gotten the government out of the clutches of the banks before it reduced taxes."

Historical Background

In June 1946, Baruch introduced what became known as the Baruch Plan for international control of atomic energy at the United Nations Atomic Energy Commission. The Commission passed the plan with little objection, and it was presented to the UN General Assembly and Security Council at the end of 1946.

Despite the international harmony it proposed, the Baruch plan also clearly announced that the United States would maintain its nuclear weapons monopoly until the proposal was fully implemented. The Soviet Union rejected the proposal, believing that the United Nations was dominated by the United States and its allies. It proposed that the United States destroy its nuclear arsenal first, then discuss international controls.

On the eve of both World War II and the Korean War, Baruch predicted that inflation would harm the nation and contribute greatly to the national debt. According to his calculations in the mid-1950s, following his suggestions would have trimmed some $100 billion off the national debt.

Bernard M. Baruch (1870-1965) was born in South Carolina into a Jewish family, but the family moved to New York City in 1881. Baruch graduated from the City College of New York and became a financier and investor. By 1910, he was one of the most well-known financiers on Wall Street. He advised President Woodrow Wilson during World War I on national defense. In 1918, Baruch became chairman of the War Industries Board. During the 1930s, he was an adviser to President Franklin D. Roosevelt, who appointed him as a special adviser to the Office of War Mobilization at the beginning of World War II. Baruch supported a "work or fight bill" and helped American industries mobilize to produce war materials. In 1946, President Harry S. Truman appointed Baruch as U.S. representative to the United Nations Atomic Energy Commission, where he proposed international control of atomic energy, but the Soviet Union rejected the plan. Baruch resigned from the Commission in 1947, but he continued to advise on international affairs until his death.

Leslie R. Groves Jr. (1896-1970) was a United States Army General with the Corps of Engineers who oversaw the construction of the Pentagon and directed the Manhattan Project that developed the atomic bomb during World War II. Born in New York to a Protestant pastor who became an army chaplain, Groves graduated from the United States Military Academy in 1918 in a course shortened because of World War I. He entered the Corps of Engineers and gained promotions to major by 1940. In 1941, he was charged with overseeing the construction of the Pentagon, the largest office building in the world, with more than five million square feet. Disappointed that he had not received a combat assignment, Groves instead took charge of the Manhattan Project, designed to develop an atomic bomb. He continued nominally to supervise the Pentagon project to avoid suspicion, gained promotion to brigadier general, and began his work in September 1942. The project headquarters was initially in the War Department building in Washington, but in August 1943, moved to Oak Ridge, Tennessee. He and physicist J. Robert Oppenheimer selected the site in Los Alamos, New Mexico, for a laboratory, and Groves pushed successfully for Oppenheimer to be placed in charge. Groves was in charge of obtaining critical uranium ores internationally and collecting military intelligence on Axis atomic research. Promoted to major general in March 1944, Groves received the Distinguished Service Medal for his work on the Manhattan Project after the war. In 1947, Groves became chief of the Armed Forces Special Weapons Project. He received a promotion to lieutenant general in January 1948, just days before meeting with Army Chief of Staff Dwight D. Eisenhower, who reviewed a long list of complaints against Groves. Assured that he would not become Chief of Engineers, Groves retired in February 1948. From 1948 to 1961, he was a vice president of Sperry Rand, an equipment and electronics firm. After retirement, he served as president of the West Point alumni association and wrote a book on the Manhattan Project, published in 1962.

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