One question, whether the atomic bombs being dropped on Japan ended World War II?

As I saw it, the atomic bombs dropped on Hiroshima and Nagasaki, really gave this... the Japanese an excuse to surrender. They -the Emperor's advisors had determined after the Battle of Saipan that the situation was militarily hopeless, and that they must seek another course to recommend to the Emperor with respect to the war. And they then tried to find ways and means to work out a way in which they could with honor surrender, and they were unable to do so. The... the Army in particular was just dedicated to fighting to the last minute, so that they tried to work something out with the Russians whereby the Russians would intervene and... act as go-betweens in order to enable them to surrender, but the Russians wouldn't do that. The Russians refused to do that. So that they were caught where they just couldn't figure out a way to... to get out of the war. They had to get out of the war. And then when we dropped the bombs on Hiroshima and Nagasaki that gave them an excuse to surrender with some semblance of honor.

Can we just ask you again because there was some interference. I'll ask you once again the conclusions of the bombs being dropped on Japan.

I better start from the beginning. It was my... my view that the atomic bombs dropped at Hiroshima and Nagasaki gave the Japanese a way in which they could surrender. They were seeking a way to surrender, but the problem was one of being able to do that. They tried to get the Russians to help them by acting as intermediaries. And the Russians didn't want them to be able to surrender. They wanted to intervene in the war and take the -- ah, Manchuria and so forth and so on. So this was -- this did give them an excuse and it did result in a surrender. I don't believe it was the military effects of the atomic bombs that caused them to surrender.

can you tell me any stories you remember about the drafting of the NSC-68 and some of the initial policy debate surrounding it? I was thinking how for example there weren't any figures attached to it initially and... anything that would give us some sense of how, how it was before the Korean War broke out? How different it was?

In the period before we drafted NSC-68, there was really a great difficulty between the Department of Defense and the State Department. Ah, Secretary Johnson of the Defense Department was determined to honor his obligation to hold the defense budget down to 12 and a half million dollars. The rest of us had come to the conclusion that this was an impossibility to maintain an adequate deterrent posture, vis-a-vis the Russians within that...that defense budget. Particularly in view of the fact that the Soviets had removed our atomic monopoly. They had just tested an atomic bomb, and the Chinese communists had consolidated their position on the mainland of China. It was also at that time that the scientists talked to me about the possibility of developing a hy -- a hydrogen bomb. And Ed Teller persuaded me that this was in fact a feasible proposition and it could be -- that it might very well be feasible. And I came to the conclusion that the Soviets were undoubtedly working on the same thing and later that was confirmed, and that we would be in a very poor position if we had refused to go forward with research on that, and the Soviets had gone -- had succeeded in producing a thermonuclear weapon. And therefore, I supported the view of the Pentagon that we should go forward with the research in connection with that thermonuclear weapon. But the people in the AEC had quite a different view. In particular Lillian -- Lilienthal. And Lilienthal thought we had not thought through all the consequences ah, the existence of nuclear weapons and their impact upon world politics and the future of the world. And that this would be exacerbated by the development of a thermonuclear weapon, and we really should do, undertake a fundamental review of policy and that's what we did in NSC-68 despite the differences of opinion between the defense department and the state department. And we found that after a short time we got complete collaboration from the Joint Chiefs of Staff and from Louis Johnson's staff, even though he himself thought it was a... merely a conspiracy to upset his 12 and a half billion limitation on the defense budget. So that that was the atmosphere in which that report was written. When we finally got it written it was approved by all the Chiefs of Staff, by all the Service Secretaries, by the Secretary of State and the Chairman of the Joint Liaison Committee which dealt with nuclear matters. And so the -- Secretary Johnson had no alternative really but to sign it and he did sign it.

If you could just tell me about how the figures weren't actually put on NSC-68 until a little later?

Well, one of the -- When we were preparing NSC-68, obviously I was much interested in how much a program of that kind would in fact cost. So I did some work myself in trying to estimate the probably cost of such a program. And in contrast to the 12 1/2 billion dollars which the Secretary of Defense was determined to hold the budget -- the defense budget to, I came to a conclusion it would be of the order of magnitude of $40 billion dollars, an enormous increase. And I talked to Dean Atcheson about that, and he said, well Paul, he said, you've done this study all by yourself. It has not been done in a rigorous way. It hasn't gone through all of the procedures that a budget estimate would have to go through. And why don't you just keep that figure to yourself, I'm glad you told me about it, but the document itself deals really with the policies to be followed, not with detailed budget estimates. And therefore the document went forward without any estimate as to the budgetary cost. And Mr. Truman when he approved NSC-68 did not approve anything having to do with the budget. But he approve -- he approved the conclusions but he directed that the various agencies involved should do a detailed budgetary estimate, and that estimate had not been completed at the time that the North Koreans attacked on a Sunday into South Korea by -- in surprise. And it was only after that attack from North Korea that really people approved that we go forward with real...with a real program.

What difference did the Korean War make to NSC-68 and the decision to go ahead?

Well, it's wholly doubtful as to what would have happened with respect to the concrete recommendations of NSC-68 unless it had been confirmed that it was a military problem not just an economic and political problem in the east-west relationship.

Can you tell me your recollections of President Truman's 1958 press conference, the one where there was the...

I remember it very -- I remember it very well when I was in the State Department and I received a telephone call to come over to the White House immediately. So I rushed across the street. We then had offices right next to the -- to the White House. And I rushed across the street to that room where the Press Conference was holding -- was taking place, and I was told that the president, Mr. Truman, had just said that he had -- would rely upon a recommendation from General McArthur as to whether or not to use nuclear weapons in Korea. And that that was totally contrary to policy. And they asked me what should be done about it. And I said, well, I would suggest that that section of the record of the press conference be excised. And ah, they said, we agree with you. And I suggested some other language which... which would be substituted, that substitute language was that any recommendation for the use of nuclear weapons in Korea would require the president's approval before it could be executed. And that so that's the way the record was changed. Well, the press had been there and they had all heard what the president actually had said, so that ah, by the time the press conference was over, we got word that Mr. Attlee was going to take a plane and was on his way to Washington.

What steps did you take to placate the British prime minister when he arrived?

I was not involved in it. The...the President had...you know, he's just misspoken. He...he, McArthur had never -- no authority had been...had ever been delegated to McArthur to use ah, nuclear weapons. And he had given that impression and he had not intended to. So he assured Mr. Attlee that that was not the intention. The intention was that the final decision would be a presidential def -- decision, with respect to the use of nuclear weapons.

Did you have other personal involvement in the decision whether to use nuclear weapons in Korea? What were the arguments for and against using...

I'd never...I never heard anybody recommend that they be used other than General McArthur indirectly. Everybody else in the Pentagon and in the State Department and the White House were perfectly clear in their minds that this should not be done. Ah, the question as to how many nuclear weapons we had at that time was a very closely held secret. I think there were only three or four people in the Pentagon and I think only two or three of us in the State Department who were aware of that fact. And so that the number of people who could really do any planning with respect to it was very small indeed. And I worked closely with General Loper and Mr. LeBaron who was head of the Joint Liason Committee which dealt with nuclear matters between the AEC and the Pentagon, and we were clear in our minds there was no health at all to using nuclear weapons in... in connection with the Korean War.

This is the final question on Korea. How did the state department see the Korean War? Did they see it as a local conflict or the beginning of a global conflict?

No, it was clear from day one that the Soviet Union and to some degree the Chinese in turn had been behind this surprise attack into South Korea. And that therefore, that it indicated that the Soviet Union was in -- was in fact prepared to use power through -- military power through satellites in order to carry out their objectives. So that this in fact demonstrated that point. Now the other question and issue was, were they prepared to do the same thing elsewhere and when and under what circumstances. Certainly the Europeans by and large thought that this demonstrated the main point that the Soviets were prepared to use military power in support of their objectives if they found it convenient and if they thought the risks were not too great. Therefore, the Europeans became very much troubled at that time, and they urged us then to expand the military assistance program and to go forward with other measures which would give greater security to Europe.

So there was a very real feeling that the Red Army might march across Western Europe?

There was indeed. Unless there was an adequate deterrent. Therefore a great deal of energy went into creating an... an adequate deterrent. Because we'd already gone through the point that with the Soviet Union having broken our monopoly on nuclear weapons, over time they would achieve something close to equality, and that therefore one...the cutting edge of policy had to rely upon conventional el...ah, military forces, not only nuclear military forces.

I'll just ask you about the Berlin Crisis then...

At that time I was working on economic matters. I was Assistant Secretary of State for Economic Affairs. Therefore I was much involved with the currency problem in Berlin. And the Berlin block -- the Berlin crisis arose over a currency problem in Berlin. Ah, we had supplied to the Soviets the plates with which the marks were printed for both their section of Berlin and our section. And they printed an unconscionable number of marks which we then had to redeem in dollars. So it was complete drain into the Treasury. And we then cancelled that, and created our own currency in our section of Berlin. And the Russians were furious that they no longer had this pipeline into the U.S. Treasury. So that then they instituted this blockade. And General Clay who was our Commanding General in Berlin at the time, he ah, declared a counter-blockade without authority from Washington, and he was quite right about doing that. But then the question arose as to whether or not to use military force in order to what was called clarify whether this really was a blockade or not. It really was trying to push aside the roadblocks to the roads and so forth and so on, with the threat behind it that we might go to war in the event that ah, they were thrown back because they had complete military... conventional military superiority in the area. So that it was really the... the background of our nuclear monopoly which was the main thing that we were relying upon at the time. Ah, now the question is still debated as to whether or not Khrushchev would have back -- backed down, ah, Stalin would have backed down, in the event that we had done what General Clay wanted. And we did not, and decided that the airlift was enough. What we did also as I remember is send some 60 B-29s that looked as though they were nuclear capable -- we didn't have that many nuclear weapons -- to Europe, and that I -- seemed to us to be the correct balance between what we could afford to do militarily without too much risk. Now ah, I think probably if we'd followed Clay's advice, Khrush -- ah, Stalin would have backed down, the Russians would have backed down, because they were engaged in quite a different operation. They were engaged in pressure on Tito at the time, and I think that was more important to them than carrying out this ah, blockade operation.