Oral History Interview with Arthur N. Young


Excerpt of Transcript of Oral History Interview with Arthur N. Young

Arthur Young

An economist and financial expert, beginning in 1912, principally as an adviser to the U.S. Government and to the governments of various other countries, including service as an economic adviser in the U.S. Dept. of State, 1922-28; financial adviser to the Chinese Government and to the Central Bank of China, 1929-46; a member of the Chinese delegation to Bretton Woods financial conference, 1944; director of Point IV program in Saudi Arabia, 1951-52; and financial adviser and chief of financial mission to Saudi Arabia, 1951-52.

Pasadena, California 

February 21, 1974 

James R. Fuchs




One point on which Acheson differed from Truman, and I think Acheson was one hundred percent right, was in the Middle East policy. I give President Truman very high marks for many of the things that he did; for his aid to Greece and Turkey; for intervening in Korea; for starting the Point IV program, although on that I think Dean Acheson deserves quite a lot of the credit for really putting the thing over in the first instance, and selling it to Marshall and getting Marshall to get back of it. I give Truman high marks for all those things.


But his Middle Eastern policy I think was a disaster, and will probably rank as one of the most serious blunders in American diplomacy and foreign policy--in backing Israel the way we have done. Our real interests lie more with the Arabs, who not merely have the oil, and the geography, and the numbers, but they have the ethics on their side, because they were robbed of their homeland quite unnecessarily. And I think the United States getting in on the wrong side, for which we are now paying so heavily, will rank as a major blunder. It is hard for Americans to get at the facts, because of the media being so slanted on the thing, and our people have been brainwashed. Right now most people blame the Arabs, and the oil companies, and almost everybody else for this crisis, when really they should look back and blame the policy, starting right at the end of World War II, to back Israel and not have an evenhanded policy.

We've lost much of the Arab friendship, they wanted to be friends with us and we had high prestige in the Middle East. We couldn't have done more if we had tried, so far as I can figure it out, to help Russia to gain its ambitions of an entry into the Middle East. It's been a disaster, and those in authority will not come out and say that because they are afraid of the media which are partly Jewish controlled and they are afraid of losing the votes and political contributions of Beverley Hills and New York City; but someone in authority should come out and say just about what I have said. Not as a matter of anti-Semitism - 've got many Jewish friends, and…


FUCHS: Which is the charge you get right away.


YOUNG: That's right. I'm not anti-Semitic. I have many Jewish friends. But the interests of the United States are not the interests of Israel. Somebody should come out and say all these things; and sooner or later there is a severe risk that anti-Semitism in the bad sense of the word will come out of this thing, if and when people get to realize what has been the American policy--that we've asked for this. The Europeans know that. It hurts our cooperation with Europe. It gives the Russians an opening. It's bad from so many points of view, but people just won't come out and recognize that.


FUCHS: What do you think Lord [Arthur] Balfour really intended in his declaration in respect to a home-land?


YOUNG: The part that has been ignored in the Balfour declaration is that the home for the Jews should be done in a manner consistent with the rights of the people living in the area.

My parents on their honeymoon visited the Holy Land in 1889 and they told about the Jews and the Arabs living together in harmony there in Israel, in the letters that my mother wrote, which we have. If you go back to the time of the Balfour declaration the Jews were only about a fifth of the population of the area, and they were getting on fine with the Arabs. The Arabs had most of the business then. They had, I think it was 95 percent of the olive groves, and 50 percent of the orange groves, which were the biggest things there. They had thousands of businesses in Jerusalem and in the area, and they greatly outnumbered the Jews in their economic weight and their numbers.

Now that thing has been completely turned around. It is now mostly forgotten that the Jews relied much on terrorism in their drive for an independent Israel after World War II--terrorists assassinated the UN representative, and their violence contributed to the British giving up their mandate. Now Israel denounces terrorists (quite properly) when used against them, but they forget their past.

For the first twelve or fifteen years of the State of Israel, in effect for every Jewish refugee taken in an Arab was driven out as a refugee. And nothing has really been done effectively yet for these Arab refugees. The Arabs are partly at fault, because they've tried to use them as a bargaining point and many Arab governments have resisted doing anything for the refugees apart from a settlement of the whole Middle East situation, so you can fault them for that. But it is a sore spot there, and we had better get on with doing something now, and bring the necessary pressure on Israel. We've got means of pressure on Israel through the arms and finances, and if we don't put the pressure on them and tell them they've got to make a reasonable settlement, and that soon, if we don't do that we will be in trouble. We'll never have a better chance than we have right now, and it really ought to be done. Time works against Israel and they can have no long-time security from a purely military solution. Of course things have gone so far now that Israel should be assured of security in the pre-1967 territory.


I hope that the Watergate business doesn't put the Administration in so much trouble that they can't sufficiently press Israel. Perhaps if Mr. [Henry] Kissinger sees the light on it, and I imagine he may have, maybe he can do it. But it is hard because our people have been so brain-washed by years of propaganda and seem still to want to back Israel, although almost all the rest of the world does not like our policy. And the oil embargo has made it harder to see the basic justice of the Arab cause--not to speak of the terrorism.


FUCHS: It's a strange situation.

YOUNG: It's a terrible situation, and if I should write anything about it, it wouldn't be published. It would be rejected by the media, because of their fear for the advertisers and the support of the Jews and their sympathizers. The only way it could be done would be by someone in high authority coming out and saying these things. Some of the professors have said it. There is a very good article in the current Reader's Digest by Professor Griffith of MIT on this situation. That has wide circulation, and perhaps will do some good. You'll find the State Department people--at least the Middle East experts--probably agreeing substantially with what I've just said. But repeatedly they have been rebuffed at the White House.

I have been told that Mrs. Roosevelt had Loy Henderson of the State Department removed from handling Middle East matters and Russian matters. I think it was Russian matters at that time, because she thought he didn't have sufficient trust of the Russians--he knew them all too well. Loy Henderson also had trouble in having influence under Dean Acheson, although Dean Acheson trusted him.

The people in the State Department who try to get these things done if they are too active

risk being removed. There were indications that we almost lost Assistant Secretary [Joseph J.] Sisco for that reason. He was going to become president of Hamilton College, I don't know the ins and outs of it, but it looked as if he was unhappy about the failure to bring sufficient pressure on Israel. It was a good sign that he stayed in the Department and became Under Secretary. A very able man who understands the situation very well.

FUCHS: I wonder what would have happened if in '48 when we so, you could almost say, precipitately, recognized Israel, if Dean Acheson had been Secretary as he was the following year?


YOUNG: Well, he couldn't get anything done because it was done unilaterally by President Truman. As I understand it, what took place was that they were debating this thing at Lake Success, and someone brought in word that the United States was in the course of recognizing Israel. And the American delegates who were trying to negotiate a plan for Palestine said, "Well that can't be. That isn't in line with our instructions or our policy." And then they went out to check and found out it was true. That was most unfortunate. So with all my admiration for the good things that President Truman did I think that this is a very dangerous minus on the record.

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