Clarence Douglas Dillon
was born in Geneva, Switzerland, on 21st August, 1909. His father,
Clarence Dillon, was the head of a leading Wall Street investment
firm.
After Dillon graduated
from Harvard University in 1931 his father
gave him $185,000 to buy a seat on the New
York Stock Exchange. In
1936 he became a director of United States and Foreign Securities
Corporation. Two years later he became a Vice President and Director
of Dillon, Read and Company.
Dillon saw active service
in the United States Navy during the Second
World War. During the last few months of the conflict he was in
the Pacific and his ship survived several
attacks by Japanese suicide bombers.
On his return from the
war he became chairman of Dillon, Read and Company. A member of the
Republican Party Dillon was a major
contributor to the presidential campaign of Dwight
D. Eisenhower. In February 1953 Eisenhower appointed Dillon as
his Ambassador to France. This created a great deal of controversy.
As one journalist commented: "As
a major contributor to President Eisenhower's 1952 campaign (and seemingly
because his family owned the Haut-Brion vineyards in Bordeaux), he
was made ambassador to France. Since he had no diplomatic experience
and spoke execrable French, there was a predictable row about his
appointment."
Dillon served as Ambassador
to France until being appointed Under Secretary of State for Economic
Affairs in 1959. He was therefore responsible for the economic policies
and programs of the Department of State and for coordinating the Mutual
Security Program. Dillon attended several Foreign Ministers meetings.
In 1959 he was one of the founders of the Inter-American Development
Bank.
On the recommendation of
Philip Graham President John
F. Kennedy appointed
Dillon as Secretary of the Treasury in January, 1961. Dillon was the
United States spokesman for the Kennedy Administration's program of
aid for the economic development of Latin America under the Alliance
for Progress Program in 1961. The work continued under President Lyndon
B. Johnson, who had pledged his support for continuing aid for
the Alliance for Progress. Dillon left office in April, 1965.
Dillon continued to be
a major contributor to the funds of the Republican
Party. He also donated $20m to New
York Metropolitan Museum. He helped raise another $100m for its
refurbishment. He also served as chairman of the Rockefeller Foundation,
was president of the Harvard board of overseers, chairman of the Brookings
Institution and vice-chairman of the US council on foreign relations.
Clarence Douglas Dillon
died on 10th January, 2003.
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(1)
Katharine
Graham, Personal History (1997)
Right after the election,
he started talking to and writing the president-elect about appointments
to the new administration. Both Phil and Joe Alsop thought Kennedy
ought to appoint our friend Douglas Dillon as secretary of the Treasury.
Dillon was a liberal Republican who had served as undersecretary of
state in the Eisenhower administration and had contributed to the
Nixon campaign, so this didn't seem like a strong possibility. Arthur
Schlesinger and Ken Galbraith had dinner with us one evening, and,
as Arthur noted in his book A Thousand Days, "we were
distressed by (Phil's) impassioned insistence that Douglas Dillon
should and would-be made Secretary of the Treasury. Without knowing
Dillon, we mistrusted him on principle as a presumed exponent of Republican
economic policies." But as Arthur also wrote, "When I mentioned
this to the President-elect in Washington on December, he remarked
of Dillon, "Oh, I don't care about those things. All I want to
know is: is he able and will he go along with the program?'"
What a refreshing thought
- if only more presidents felt that way! In fact, the president-elect
called. Joe about the liberals wanting Albert Gore (father of the
Clinton administration vice-president, Al Gore) for the position,
but he told Joe that he wanted Dillon. Joe recalls Kennedy saying,
"They say that if I take Doug Dillon he won't be loyal because
he's a Republican." Joe responded that it would be very hard
to imagine a man less likely to be disloyal than Dillon. He also added,
"And if you take Albert Gore you know perfectly well, a) he's
incompetent; b) you'll never be able to hear yourself think, he talks
so much; c) when he isn't talking your ear off, he'll be telling the
New York Times all." I'm sure this whole conversation with Kennedy
was recalled in Alsopian terms, but I'm also sure that some such conversation
did indeed take place.
(2)
Harold Jackson, Douglas
Dillon, The Guardian (24th February, 2004)
President-elect
Kennedy was pragmatic about his choice of cabinet officers in December
1960. Warned that the man he wanted as treasury secretary had given
large campaign contributions to his opponent Richard Nixon, Kennedy
responded: "Oh, I don't care about those things. All I want to
know is: is he able?"
And so Douglas Dillon,
who has died aged 93, became the second Republican recruit to the
new Democratic administration (the other was the defence secretary
Robert McNamara). His selection was ensured once he told Kennedy that
he would go quietly if he ever disagreed with administration policy.
The central economic issue
facing Kennedy was the need to increase economic growth after the
stagnant years of the Eisenhower administration; the new president
wanted expansion to reach 5% a year. Dillon said that this could be
achieved by aiming for "the largest deficit that will not frighten
foreigners" - a figure he calculated at $5,000m a year. Since
this was the best estimate of an already inescapable fiscal shortfall,
it was a neat political judgment.
In public, however, Dillon
constantly propounded the need to balance the US budget. The economist
John Kenneth Galbraith later observed that the treasury secretary
had managed to develop the best economic policy America had experienced
for generations - but had only achieved it by acting like the courtesan
"who, at any critical moment in the conversation, insists on
the absolute importance of chastity".
The eventual outcome of
Dillon's running deficit, which fluctuated between $3,900m and $6,300m,
was significantly to exceed the Washington government's original growth
target; it reached a consistent annual rate of 5.6%, and gave America
what was then the longest peacetime expansion for a century. This
ensured that even a die-hard Democrat like Lyndon Johnson would keep
Dillon in office after Kennedy's assassination.
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