s now and find individuals for whom loyalty to party or an individual leader is the only thing that matters.

But today's guest tells us of another time when service to the nation was the highest service in public life.

He's historian Richard Aldous, this week on "Story of The Public Square."

(upbeat music) (upbeat music continues) Hello and welcome to "Story in the Public Square" where storytelling meets public affairs.

I'm Jim Ludes from the Pell Center at Salve Regina University.

- And I'm G. Wayne Miller, also with Salve's Pell Center.

- And our guest this week is Richard Aldous, the Eugene Meyer Professor of British history and Culture at Bard College.

He's also the author of a new book, "The Dillon Era: Douglas Dillon in the Eisenhower, Kennedy, and Johnson Administrations."

He joins us today from New York.

Richard, thank you so much for being with us.

- Jim, thanks so much for having me.

- You know, I told you before we started taping here today that I was thrilled by this book, I also felt woefully unprepared as a historian who's actually written about the Eisenhower era, that I didn't know more about Douglas Dillon.

For folks at home who are maybe as in the dark as I was, could you tell us just briefly, who was Douglas Dillon and why is he important?

- So Douglas Dillon was the Treasury Secretary in the Kennedy and Johnson administrations.

But crucially, he was also an important figure in the Eisenhower administration because he was actually a Republican.

So he's one of those figures who serves in a Republican and Democratic administration, somebody who I think we can agree would be quite rare today.

His great achievements are as Treasury Secretary, he introduces what were then the biggest tax cuts in American history and in the Eisenhower administration, he's important because he develops a whole new way of thinking about economic foreign policy.

So he's a really serious figure, but exactly as you say, he's one of those characters who's somewhat, if not forgotten, then underappreciated, and perhaps somebody who has not been seen as being at the center of things as he was seen at the time.

- Well, and we're gonna dive into some of those specific examples in just a moment, but do you have a sense now having written this book about him, why has he been overlooked by historians and by just sort of the popular understanding of those eras?

- I think it's a couple of things, to be honest with you, I mean, first of all, he is a very discreet, low key kind of character, in some ways, that's part of his conservatism, that he's somebody who eschews the kind of display and pushing himself forward and brashness.

But I think there are other reasons as well.

Partly it's because so much about the Kennedy administration, and even to some degree the Eisenhower administration, just gets swept aside by the assassination of President Kennedy in 1963.

The whole myth of Camelot, then what some historians have called the dark side of Camelot, and then of course his successor, Kennedy's successor, as well, those issues around Vietnam and Civil Rights.

So a lot of the important work that was done before then tended to just get swept away in the avalanche of those really major events.

- So let's go back to the before then, and to 1953, very early, of course, in the Eisenhower administration, and just eight years since the end of the Second World War, Dillon goes to Paris, he's the US Ambassador.

What were the issues facing the Franco-US relationship at that time, eight years after the end of the war?

- Yeah, I think it's worth saying as well that when Dillon goes to Paris, he really is a neophyte in terms of politics.

He's got this job primarily because his father, who was one of the richest men in the United States, had been a major donor to Eisenhower.

So he goes to Paris as someone who's not really very experienced in politics at a time, as your question points out, when American-French relations were really, at a very difficult period, there were arguments about defense, there was the economic relationship, there's also a cultural element to this, that I think that France, going through a very difficult time politically, really feels a certain resentment about what it sees as the kind of heavy handed attitude that the Americans have in the way that they deal with the French.

So part of Dillon's job is to try and smooth over relations to try to facilitate a much closer relationship between the two countries.

- So you describe him as a neophyte at that time, and that of course, is a correct description.

Do you have any sense of how he assumed that job?

What was going through his head?

Was he nervous?

Was he thinking, I might fail, I got this job because of dad?

Any sense of that?

I don't know if you were able to talk to people who knew him at that time, and it's always hard to get into someone's head, but it must have been frightening on some level, I'm guessing, right?

- Well, yeah, I was lucky enough to be able to speak to his two daughters, and I had access to the Dillon Private Papers when I was working on this book.

And there's an odd combination that Dillon has, that on the one hand, there is this kind of Olympian quality that he has, as someone who's grown up in a very privileged background, Groton and Harvard as his education, then onto Wall Street.

So he has this self-confidence about himself, but also accompanying that is this kind of nervousness to his character.

So you are right that on the one hand, he goes, and he's very earnest in the way that he approaches it.

He's very hardworking, he's somebody who really puts in the hours, although this is a political appointment by Eisenhower, he's kind of somebody who has the kind of work ethic that you would expect of a career diplomat.

So I think that's how he squares that particular circle.

- Yeah, and just the sheer number and complexity of the issues that he confronted as ambassador in Paris.

This is the era of the fall of fu, the rise of a European Defense Community, you've got the war in Algiers and not least of which certainly is the Suez Canal Crisis.

And one of the things that I really appreciated about your telling of this history is that there were mistakes that Douglas Dillon made as an ambassador, as the Secretary of the Treasury, in his various roles in Washington that you don't shy away from.

And one of those came around the crisis diplomacy around the Suez Canal crisis.

What was the gaff that Dillon made and how did he react to it?

- Yeah, you are right that he has this element of doing some things very well, and then making some really rookie errors.

And the Suez Canal Crisis is one of those.

Effectively, a junior member of the French government takes Dillon out to lunch shortly before the Suez crisis and says to him in effect, look, we know there's a presidential election coming up in the United States, France, we are not gonna do anything in terms of Egypt and Nasser and the nationalization of the Suez Canal.

He completely fools him because Dillon passes this information back to Washington.

And then literally within a week, the French and the British and the Israeli governments coordinate and go into Egypt to try to retake the Suez Canal.

Of course, that proves to be a huge misstep for all of those governments because Eisenhower is livid that this has happened just before an election.

It comes not long after the Soviets had invaded Hungary.

And so he pulls support and threatens to withdraw American economics and financial support for those economies.

So yeah, Dillon is effectively a stooge at that moment, and he learns an important lesson from it.

- Well, one of the things that I find remarkable too is that neither the president nor the Secretary of State, John Foster Dulles, seemed to have lost any faith in Dillon at that moment.

Is there anything that explains that continued confidence in him, and not just his confidence as ambassador, but eventually they're gonna bring him back to Washington for senior level of responsibility at the State Department?

- I think on one level it's that an experienced diplomat like John Foster Dulles, the Secretary of State, understands that things happen, that mistakes happen in diplomacy, that diplomacy is a high stakes game, particularly when it involves war, and that sometimes you're gonna get things wrong.

But just as importantly, Dillon had a long-term relationship with John Foster Dulles.

Dulles was friends with Dillon's father.

His earliest political contacts had been with Dulles.

And so Dulles really appreciates the kind of the skills that Dillon has, but he also takes a benevolent view of him.

And so you are absolutely right, not long after this moment, Dulles will bring Dillon back to Washington, install him at the State Department, and effectively give him control over the economic foreign policy, which is the mainstay of Eisenhower's foreign policy in that second term, effectively governing or running what we know as the Eisenhower Doctrine.

- Well, and this was a pretty transformational change in American foreign policy.

My own scholarship on Eisenhower's focused on the use of political warfare in Eastern Europe.

But this economic approach to foreign policy is one of the signature elements of Eisenhower, but it's not without dissent.

And Dillon finds himself in the midst of that debate about the appropriate use of economic instruments, of financial instruments, in American foreign policy.

Could you just sketch for us what those competing viewpoints were and how did Dillon navigate that?

- Yeah, because as you know as well as anybody, Jim, the Treasury Secretaries in the Eisenhower Administration, George Humphrey and Robert Anderson, these are people who do not want to spend money on things like development loans, they do not want the Cold War to become a vehicle for massive spending in terms of loaning money.

Dillon on the other hand, is somebody who becomes an advocate for spending money in what today we would call the Global South, in order effectively not just for the good of those countries, but also as a weapon in fighting the Cold War.

That if you want those countries not to go into the orbit of the Soviet Union, then you have to help them politically, economically, financially, we have to help their infrastructure.

And so things like, for example, the Act of Bogota, which lays out a massive spending program in Latin America, that's something that Dillon is spearheading within the administration.

- So in 1959, there's another one of those moments where Dillon does not get it right, and it involves an invitation to Soviet Premier Nikita Khrushchev to visit the US.

Tell us about that.

What happened and how did he miss that mark?

- So throughout the late '50s there were constant efforts to try and get the leaders of the four great powers, but particularly Khrushchev and Eisenhower together for a summit meeting.

The back and forth on this, Eisenhower always said he would only have Khrushchev coming to the United States if Khrushchev made concessions on the future of Berlin.

But the message to Khrushchev effectively got mangled, and so the idea that Khrushchev would have to make concessions got lost in translation.

So as soon as the invitation went, Khrushchev said, yes, I'd be delighted to come to the United States.

Eisenhower is furious.

He calls Dillon and Christian Herter and reams them out for the way in which this has been done.

But it's another example of the complexities of diplomacy and how things can go wrong so easily on simple things like a message going from the Oval Office to the State Department to the embassy, and then to the relevant person.

- You know, I'm curious, Richard, the whole idea that economic instruments were a tangible part of national security, do you have a sense of where that originates in the Eisenhower administration?

Is it Ike himself?

Is it Dulles?

Is it Dillon?

Where where does the impulse to begin using America's economic power for development assistance in the developing world originate?

- I mean, in some ways, of course, they already had a blueprint for this because post-Second World War, the Marshall Plan had done precisely this in Europe, again, as you know.

But I think that in some ways the Suez Crisis is actually quite important in this, because when the United States effectively comes down on the side of Egypt, it electrifies what then they called the third world.

And the Eisenhower Administration realizes there's an opportunity here, that there's a certain amount of goodwill, and that if we can build on that, then we might be able to tip the Cold War in our direction.

So that's where the kind of the thinking comes.

And it is Dulles who recognizes that this is a way to do things, but he also, in a way that I think shows what a magnificent Secretary of State he was, he recognizes that he's not the right man to do it.

And that's one of the reasons why he brings Dillon in, because he thinks that Dillon has the kind of economic, financial expertise, the trust of Wall Street, and understands the kind of global economic infrastructure, so he thinks that he's the right person to do it.

- Well there's so much that you're gonna have to, in the interest of time, skip over from just the Eisenhower years.

But what's really interesting to me is that you get to the end of the campaign of 1960, and President Elect John Kennedy is interested in bringing Dillon into his administration, crossing party lines as Secretary of the Treasury.

A lot of questions there that I wanna unpack, but let's start with what attracted Kennedy to Dillon as a candidate for that role?

- And I think it's worth saying as well, that it's not just an attraction to Kennedy, that it's almost certain that if Nixon had won that election, that Dillon probably would've been Secretary of State in that administration.

But Kennedy had seen Dillon in action, when Kennedy was on the Senate Foreign Relations Committee.

So things like the Act of Bogota, the Inter-American Development Bank, these kind of things had gone through the Senate Foreign Relations Committee in order to get the funding.

And so the two men had actually worked together.

They also shared a kind of a certain kind of background that their fathers were kind of very similar, in being self-made multi-millionaires, in today's money, billionaires.

So they shared that kind of background.

They were both Harvard men.

But they both also had a kind of a sensibility that at the time would've kind of been described as civilized, they were kind of people who had a sense of humor, who were not necessarily tribal by nature.

So there was a sense of meeting of mind.

But the thing that Kennedy wanted most of all, was that sense of bringing Dillon in, a Republican, to an administration that had won an election on a very narrow majority, and understanding that Dillon would reassure Wall Street, he would reassure the markets, he'd reassure the global economic figures.

And so it was really that, that Kennedy wanted to bring on board.

Kennedy also believed in balance, so he appointed Dillon as his Treasury Secretary from the right, but then appointed Walter Heller as his chairman of the Council of Economic Advisors from the left.

So always this kind of sense of balancing the arguments out, of course, leaving him then as the decision maker.

- So here you have a man who has been in a Republican administration, now he's in a Democratic administration, so he served with presidents of both parties.

Did he pay any price for being, by either party, for being part of the others' administration?

- I think that there was initially a resentment within the Republican party.

Eisenhower tried to persuade Dillon not to take the job.

Christian Herter, who was Secretary of State at the end of the Eisenhower Administration, took it very personally when Dillon took the job as Treasury Secretary.

Interestingly, Robert Anderson, Eisenhower's Treasury Secretary, said, you have to take this job for the American interest.

On the other side, there were some Democrats, Al Gore Senior, was very critical of Dillon, but Dillon swung people around.

Arthur Schlesinger, who I've worked on before, he's actually one of the reasons that I came to Dillon in the first place, because I was intrigued by why Dillon had actively campaigned to keep Dillon outta that job.

And yet within a year, he was describing himself as Dillon's greatest fan.

So I think that because of his sense of loyalty, the way in which he did the job, he very quickly won over the administration.

And it is noticeable that Bobby Kennedy, the president's brother, said that Dillon was one of the absolute closest advisors that the president had, and that he relied on him as much as anybody within his cabinet.

- So a very quick question, when he voted, did he vote as a registered Republican or Democrat?

- He never left the Republican party.

By 1964, of course, after the death of John F. Kennedy, he felt able to vote for Lyndon Johnson because Barry Goldwater was the nominee for the Republican party.

And he felt that that was a reckless choice by his own party, but he was always a Republican and proudly so, and one of the deals that he did with Kennedy when he took the job in 1961, was that the Treasury Secretary, like the Secretary of State, once you got into the election period, was able to effectively go into Purdah.

And so therefore was able to stand above the politics of the day.

- Richard, again, this is a richly researched and exquisitely told history, and we're gonna have to skip a lot of it again, because of the time.

But I wanna make sure that we talk about maybe the two defining moments in the Kennedy presidency, the Cuban Missile Crisis, and the assassination in November of 1963.

In both cases, what struck me was that not just was Dillon part of the EXCOM in the Cuban Missile Crisis, part of the president's cabinet in the aftermath of the assassination, but he's also managing global economic systems and having to think about what is this gonna mean for markets?

Can you talk a little bit about the role of Douglas Dillon in that moment, in those moments, where he's thinking about these massive threats to America, to the survival of the Republic in the aftermath of the president's assassination, while he's still responsible for managing the nation's economy and the global economy?

- Yeah, and it's one of the nice things, of course, is that viewers can listen to Douglas Dillon in action, because we have the tapes from those EXCOM meetings in the Cuban Missile Crisis.

So they can hear for themselves how Dillon responds in the moment.

He's a hawk during the Cuban Missile Crisis, believes that America's nuclear superiority will always stop Russia, the Soviet Union from taking that ultimate step.

But you are right, this is one of those moments that we were talking about before, where Dillon's role is underappreciated.

That when he came into the Treasury, he was shocked by the lack of planning for emergency, for a crisis.

And so he put in place a number of protocols, not just within the United States, but globally, working with other central banks like the Bank of England, for example, putting together the gold pool.

That would always mean that at a moment of crisis, these countries could work together and coordinate their efforts.

And the proof of the pudding there was that when it came to something like the Cuban Missile Crisis, the system held, that there wasn't a global financial meltdown or an American financial meltdown.

The procedures that he'd put in place worked.

The same thing happened after the assassination.

And it is also a good example of where Dillon as an insider is able to kind of play the system to the advantage of the United States.

He had been long-term friends, school friends with the Rockefellers, and so he was able to persuade Nelson Rockefeller, the governor of New York, to close the markets, not just immediately after the assassination, but including the following Monday when the funeral of the dead President took place.

Thereby giving just that little bit more time for everything to calm down so that when the markets reopened, there was a sense of calmness and control within the system.

- So we only have about a minute, excuse me, left.

But very quickly, this is a work of history, but it speaks to today.

Can you just briefly tell us how this relates to today when partisan politics have this country so bitterly divided?

- Well, I think that this period that we've been looking at was an age of equipoise, in some ways, one of the last ages of equipoise where there real balance within politics.

And there's good and bad that kind of came outta that, but this kind of sense of putting the national interest above sectional interests is also a kind of conservatism that perhaps has gone out of fashion today, and it's reflected not just in Dillon's politics, but also in his personality, this kind of personality that doesn't push himself forward, that sees working across party lines as something that is implicit in that conservative vision where the past, the present, and the future have to work together.

So I think that there is something to be learned from looking back at that.

As I say, this this is not a period without its faults, but it is definitely something where we can look back to a time when politics and conservatism was done differently.

- Richard, the book is "The Dillon Era," it's outstanding.

Richard Aldous, thank you so much for spending some time with us today.

That is "Story in the Public Square" this week.

If you wanna know more, you can catch us on social media or visit pellcenter.org, where you can always catch up on previous episodes.

He's Wayne, I'm Jim, asking you to join us again next time for more "Story in the Public Square."

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