Joseph Morrell Dodge (November 18, 1890 – December 2, 1964) was a chairman of the Detroit Bank, now
Comerica. He later served as an economic adviser for
postwar
In Western usage, the phrase post-war era (or postwar era) usually refers to the time since the end of World War II. More broadly, a post-war period (or postwar period) is the interval immediately following the end of a war. A post-war period c ...
economic stabilization programs in
Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
and
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
, headed the American delegation to the
Austrian Advisory commission, and worked as President
Dwight D. Eisenhower
Dwight David "Ike" Eisenhower (born David Dwight Eisenhower; ; October 14, 1890 – March 28, 1969) was an American military officer and statesman who served as the 34th president of the United States from 1953 to 1961. During World War II, ...
's director of the
Bureau of the Budget.
["Dodge, Joseph Morrell." ''American National Biography'' 6, (1999): 690-692.]
Dodge formed
economic reconstruction
Economic reconstruction is a process for creating a proactive vision of economic change. The most basic idea is that problems in the economy, such as deindustrialization, environmental decay, outsourcing, industrial incompetence, poverty and ad ...
plans for
West Germany
West Germany is the colloquial term used to indicate the Federal Republic of Germany (FRG; german: Bundesrepublik Deutschland , BRD) between its formation on 23 May 1949 and the German reunification through the accession of East Germany on 3 O ...
after
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
, and implemented financial reforms in 1948. He later moved to Japan, having drafted another economic stabilization plan, widely known as the "
Dodge Line
The Dodge Line or Dodge Plan was a financial and monetary contraction policy drafted by American economist Joseph Dodge for Japan to gain economic independence and stamp out inflation after World War II. It was announced on March 7, 1949. The Dod ...
", in December 1948, as the
financial adviser
A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory ...
to the
Supreme Commander for the Allied Powers
was the title held by General Douglas MacArthur during the United States-led Allied occupation of Japan following World War II. It issued SCAP Directives (alias SCAPIN, SCAP Index Number) to the Japanese government, aiming to suppress its "milit ...
(SCAP), General
Douglas MacArthur
Douglas MacArthur (26 January 18805 April 1964) was an American military leader who served as General of the Army for the United States, as well as a field marshal to the Philippine Army. He had served with distinction in World War I, was C ...
.
[Thorsten, Marie. and Yoneyuki Sugita. "Joseph Dodge and the geometry of power in US-Japan relations." ''Japanese Studies: 1981-2012.'' Vol. 19. no. 3 (1999):297-314. doi:10. 1080/10371399908727684.] Arriving in February 1949 to implement these reforms, Dodge served as a "lightning-rod" to redirect fiscal criticism away from MacArthur and chose to keep a low profile.
Personal life and career
Dodge was the first of three children born to Joseph Cheeseman Dodge, a poster artist, and Gertrude Hester Crow.
He grew up with his brother and sister on middle-class Kirby Street in Detroit, Michigan.
Inspired by the hiking and camping trips his father often took him on, Dodge's earliest ambition was to be a forest ranger. His mother knew better stating, "I'm sure Joseph is going to be a banker. He is the only boy of his age who doesn't like to get his hands dirty."
["World Trade- Man with a Puzzle." ''Times Magazine,'' Jan. 24, 1995] After graduating from
Detroit Central High School
Central High School, previously Central Collegiate Academy and originally named Central High School, is the oldest public secondary school in Detroit, Michigan; it is part of the Detroit Public Schools Community District.
The school's student bod ...
in 1908, Dodge worked at the Standard Accident Insurance Company as a clerk until 1909, when he began work at the Central Savings Bank.
He quickly rose through the ranks, starting as a messenger boy, then bookkeeper (while teaching himself accounting), then Michigan's youngest state bank examiner (at age 20).
For five years Dodge excelled at his post so well as to attract the attention of Bank Commissioner Edward Doyle, who appointed him as his assistant.
In 1916, Dodge married Julia Jane Jeffers and was offered a job by Michigan's banker-Senator
James Couzens
James J. Couzens (August 26, 1872October 22, 1936) was an American businessman, politician and philanthropist. He served as mayor of Detroit (1919–1922) and U.S. Senator from Michigan (1922–1936). Prior to entering politics he served as vice ...
at the Bank of Detroit as an operating officer. Shortly thereafter, in 1917, Dodge's previous employer Bank Commissioner Doyle asked him to assist his son Tom Doyle in running the nation's largest
Dodge
Dodge is an American brand of automobiles and a division of Stellantis, based in Auburn Hills, Michigan. Dodge vehicles have historically included performance cars, and for much of its existence Dodge was Chrysler's mid-priced brand above P ...
auto agency (Joseph Dodge was no kin to the car-making family).
During his time as vice president and general manager of the Thomas J. Doyle Company, Dodge took up boxing. On one occasion, Dodge sought out and questioned a spare-parts dealer who had previously spoken scornfully of him. As his secretary recorded in her notebook, "The dealer made a wrong move and was suddenly flat on his back."
Dodge's boxing coach later remarked, "If Mr. Dodge had only stuck to boxing instead of becoming a bank president, he might have made something of himself."
["World Trade-Budget Observer." ''Times Magazine,'' 12-1-1952]
As discussed in a 1952 edition of ''Times Magazine'' - "Budget Observer", Dodge's personality could be described as "Unbending (he is 'Mr. Dodge' even to the Detroit Bank's vice president), outspoken (he told MacArthur: 'I'm no colonel bucking to be a brigadier-I can be objective, because the most I'll get out of this is a kick in the pants'), indefatigable ('my hobby is work'), Banker Dodge is an implacable anti-inflationist."
Great Depression
In 1932, Dodge resigned due to the Great Depression, having bluntly stated, "Tom, there isn't enough money coming in to keep both of us. I'm leaving."
He returned to banking as vice president of the First National Bank, which failed in 1933 with the national banking crisis. Despite this, Dodge helped organize the creation of the
National Bank of Detroit
The National Bank of Detroit (NBD), later renamed NBD Bank, was a bank that operated mostly in the Midwestern United States. Following its merger with First National Bank of Chicago, the bank was ultimately acquired and merged into Bank One, at w ...
and became president of the
Detroit Bank
Detroit ( , ; , ) is the largest city in the U.S. state of Michigan. It is also the largest U.S. city on the United States–Canada border, and the seat of government of Wayne County. The City of Detroit had a population of 639,111 at ...
in 1933. He remained president of the Detroit Bank until January 1953.
Dodge stuck to his ideals and business sense when running his new bank, even when it meant treading on toes here or there. "He once turned down a prominent businessman for a small loan when he learned that the man held some stock shares in margin. 'Anyone who
buys on margin is a poor financial risk,' said Dodge, thus losing the loan applicants big corporate account."
Nevertheless, his tight-shipped business archetype expanded the Detroit Bank's assets by ten times and drew in 380,000 accounts.
World War II
During World War II, Dodge worked as the director of the headquarters staff division of Army Service Forces in 1941.
[Hannan, Caryn. "Dodge, Joseph Morrell." ''Volume 1 of Michigan Biographical Dictionary.'' Vol. 1. North American Book Dist LLC, 1998: 207] He first began his work for the government acting as a price adjuster by monitoring defense contractors to prevent unnecessary government spending through price gougers and profiteers.
In 1942, he served in this post first for the Army Air Force Price Adjustment Board for the Central Procurement District in the Midwest.
Again in September 1943
Dodge worked shortly for the War Department, renegotiate war contracts.
Later that year, Dodge was chairing the "Pentagon's topmost War Contracts Board",
of whom "regulated the costs of defense procurement for six federal agencies, including the armed forces."
Germany
After World War II, Dodge left for Berlin in August 1945 under General
Lucius D. Clay
General Lucius Dubignon Clay (April 23, 1898 – April 16, 1978) was a senior officer of the United States Army who was known for his administration of occupied Germany after World War II. He served as the deputy to General of the Army Dwight D ...
as a financial expert and adviser to the U.S. military government in Germany.
The first of Dodge's accomplishments in Germany was his reorganization of the banking system, effective in the U.S. occupation zone in 1947.
Perhaps his most remarkable improvements was his plans for stabilization of the German currency. Dodge "proposed a 90% currency reduction, coupled with capital levies on real property to even out the burden of defeat."
Dodge's plans were only ever partially implemented in the British, French, and U.S. zones in June 1948, after two years of delay. This was due to disagreement among German occupying powers. These new implementations were meant to discourage hoarding and bartering, consequently stimulating consumption. The reforms had the additional effect of advancing the Soviet's
Berlin Blockade
The Berlin Blockade (24 June 1948 – 12 May 1949) was one of the first major international crises of the Cold War. During the multinational occupation of post–World War II Germany, the Soviet Union blocked the Western Allies' railway, road ...
, as they considered these new changes were further steps toward amalgamation of western occupation zones into a state matching western ideals.
Austria
Once the
Austrian Peace Treaty
Austrian may refer to:
* Austrians, someone from Austria or of Austrian descent
** Someone who is considered an Austrian citizen, see Austrian nationality law
* Austrian German dialect
* Something associated with the country Austria, for example: ...
was convened upon, an advisory commission was established in order to resolve the disputes over reparation, frontier, and disposition of German assets in Austria.
Before the implementation of either the banking or currency reforms in Germany, Dodge's attention was turned to Austrian affairs. President
Harry S. Truman
Harry S. Truman (May 8, 1884December 26, 1972) was the 33rd president of the United States, serving from 1945 to 1953. A leader of the Democratic Party, he previously served as the 34th vice president from January to April 1945 under Franklin ...
assigned Dodge to head the American delegation to the
Austrian Advisory commission in May 1947, with a personal rank of Minister. Dodge also found himself serving as deputy of Austrian affairs to the
Secretary of State George C. Marshall
George Catlett Marshall Jr. (December 31, 1880 – October 16, 1959) was an American army officer and statesman. He rose through the United States Army to become Chief of Staff of the United States Army, Chief of Staff of the US Army under Pre ...
,
at the London meeting of the
Council of Foreign Ministers
Council of Foreign Ministers was an organisation agreed upon at the Potsdam Conference in 1945 and announced in the Potsdam Agreement and dissolved upon the entry into force of the Treaty on the Final Settlement with Respect to Germany in 1991.
T ...
.
In January 1948, he resigned from this post and from 1948 to 1951 "Dodge served as a member of the advisory committee on fiscal and monetary problems of the
Economic Cooperation Administration
The Economic Cooperation Administration (ECA) was a U.S. government agency set up in 1948 to administer the Marshall Plan. It reported to both the State Department and the Department of Commerce. The agency's first head was Paul G. Hoffman, a fo ...
, which directed the original
Marshall Plan
The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative enacted in 1948 to provide foreign aid to Western Europe. The United States transferred over $13 billion (equivalent of about $ in ) in economic re ...
."
Financial adviser to MacArthur
Perhaps Dodge's most significant and noteworthy accomplishment was that of his work with the economic revitalization of Japan.
He first arrived in Japan February 1949, leading a U.S. mission to rehabilitate the Japanese economy, as the financial adviser to the
Supreme Commander for the Allied Powers
was the title held by General Douglas MacArthur during the United States-led Allied occupation of Japan following World War II. It issued SCAP Directives (alias SCAPIN, SCAP Index Number) to the Japanese government, aiming to suppress its "milit ...
.
[杉田米行 Sugita, Yuneyuki, and Marie Thorston. ''Beyond The Line: Joseph Dodge and the Geometry of Power in the US-Japan Relations, 1949-1952.'' Tokyo: University Education Press, 1999.] His position, granted by President Truman, carried the personal rank of Minister.
Despite his relative success in Germany, prior to this Dodge had declined the role as SCAP financial adviser two times even after a heated meeting with President Truman. He confessed, "I see no quick or easy answers. They are inherently missing."
The U.S. mission was oriented away from liberal "oppression", through "recognition of the equality of women, new laws supporting labor unions and the right to strike, and educational reforms, among other challenges".
Japanese foreign exchange earnings were drastically limited by high priced exports, making them uncompetitive in world marketing. The ''
zaibatsu
is a Japanese language, Japanese term referring to industrial and financial vertical integration, vertically integrated business conglomerate (company), conglomerates in the Empire of Japan, whose influence and size allowed control over signi ...
'' were able to pay off company debts and more easily acquire smaller competing companies, due to the devaluing of the yen through runaway inflation. This also, consequently, priced them out of exportation marketing. From September 1945 to August 1948 prices rose by 700% primarily due to, as Dodge suspected, deliberate policies of postwar Japanese governments.
[Schonberger, Howard B. ''Aftermath of War: Americans and the Remaking of Japan, 1945-1952.'' Kent, OH: Kent State University Press, 1989]
The Dodge mission, as a product of American ambitions in Japan,
was to alleviate Japan from their rapid inflation rates by imposing a regime of fiscal austerity to balance the Japanese budget, establish a single exchange rate for the yen, and abolish the black market.
A month after his arrival in Tokyo, Dodge submitted his revised proposal for economic stabilization. "
The Dodge Line was cast; it centered on the following four objectives:
#balancing the consolidated national budget;
#establishing the U.S. Aid Counterpart Fund in place of the lending operations of the RFB;
#establishing a single foreign exchange rate; and
#decreasing government intervention into the economy, especially through subsidies and price controls."
United States Budget Director
After President Eisenhower's election in 1952, Dodge was appointed his director of the
Bureau of Budget in 1953 with cabinet-level status,
the two having met through General Lucius Clay. Dodge attributed his new job as Budget director to "being taken by the scruff of the neck and thrown into a basket of snakes."
Dodge and Eisenhower shared paralleled priority to curbing inflation by reducing government spending. Prior to the revised budget for fiscal year 1954, that Dodge helped formulate, former president
Harry S. Truman
Harry S. Truman (May 8, 1884December 26, 1972) was the 33rd president of the United States, serving from 1945 to 1953. A leader of the Democratic Party, he previously served as the 34th vice president from January to April 1945 under Franklin ...
had a projected deficit of $10 billion. Dodge was able to reduce this deficit by half during the fifteen months he was in office.
Dodge accomplished this by making use of every conceivable revenue, no matter how supposedly insubstantial. For one, he required all government agencies rank proposed programs and cut low-priority spending.
Additionally, Dodge rose the rent in Government housing, admissions to national parks, and even told agencies to charge for supplying copies of records. He forbade government agencies and departments from filling vacant positions unless absolutely necessary. Construction work was reduced to only that which was critical. He even refused to replace government cars unless they were six years old and had 60,000 miles of service. Dodge himself never replaced his own official car.
"This is something you do all the time in business. But the subtractive process had all but disappeared in the government until we restored it." The
New Look was the administration department's attempt to balance national defense needs with those of a healthy economy. Dodge, being the first director of budget to also hold a membership in the cabinet and
National Security Council
A national security council (NSC) is usually an executive branch governmental body responsible for coordinating policy on national security issues and advising chief executives on matters related to national security. An NSC is often headed by a na ...
, strongly supported the New Look.
Ultimately, Dodge successfully removed $12 billion of extraneous government spending.
Despite his apparent success, Dodge was unable to meet the balanced budget goals he had aimed for. 70% of government spending was devoted toward national security programs such as the
United States Department of Defense
The United States Department of Defense (DoD, USDOD or DOD) is an executive branch department of the federal government charged with coordinating and supervising all agencies and functions of the government directly related to national secu ...
, the
mutual security pacts, and atomic energy. Similarly, existing legislation claimed another 20% of funds. Finally, the government had to continue paying interest on their national debt, another 8%. The last federal budget Dodge attempted to balance, before his resignation in March 1954, was fiscal 1955, which he was ultimately unable to balance even with a $5 billion reduction in defense spending through the New Look. Regardless, many considered his work a reassertion of control over the federal budget.
Final work and resignation
Dodge returned as chairman to the Detroit Bank briefly before accepting several presidential delegations to both government committees and advisory boards.
Dodge was reviewing long-range American plans for foreign economic aid programs in September 1954 and reappointed as President Eisenhower's special assistant three months later. As such, he was appointed the new cabinet-level position as chairman of the
Council on Foreign Economic Policy
The U.S. Council on Foreign Economic Policy (CFEP) was a high-level organization created by President Dwight D. Eisenhower in December 1954 to coordinate the development of the foreign economic policy of the United States.
History
On July 12, 19 ...
from 1954 to 1956.
In June 1956, Dodge became chairman of the reorganized
Detroit Bank and Trust Company who had merged with three local financial institutions and whose assets exceeded $1 billion.
Under request of Eisenhower, he served as a member of the
Special Committee to Study the Military Assistance Program
Special or specials may refer to:
Policing
* Specials, Ulster Special Constabulary, the Northern Ireland police force
* Specials, Special Constable, an auxiliary, volunteer, or temporary; police worker or police officer
Literature
* Specials ( ...
from 1958 to 1959 as well as a consultant to the National Security Council in 1959.
Dodge's final public service was in the
Tractors for Freedom Committee, who tried to trade farm equipment as ransom for prisoners from the Bay of Pigs invasion, acting as their treasurer in 1961.
Awards
Despite never pursuing post-secondary education, Dodge was awarded Honorary Doctorates of Law from Wayne and Michigan Universities.
Also, for his accomplishments as financial adviser to the
Office of Military Government in Berlin and as General
Lucius D. Clay
General Lucius Dubignon Clay (April 23, 1898 – April 16, 1978) was a senior officer of the United States Army who was known for his administration of occupied Germany after World War II. He served as the deputy to General of the Army Dwight D ...
's finance director for American forces in Germany, Dodge was awarded the
Medal of Merit Several countries award a military or civil medal called Medal of Merit:
* Medal of Merit (Czech Republic)
* Medal of Merit (Denmark)
* Medal of Merit of the Dominican Woman
* Medal of Merit of the National People's Army (East Germany)
* Medal o ...
on September 18, 1946.
Later, he was awarded the
Exceptional Civilian Service Medal in 1950, by the
Department of the Army
The United States Department of the Army (DA) is one of the three military departments within the Department of Defense of the U.S. The Department of the Army is the federal government agency within which the United States Army (U.S.) is org ...
, "for making possible a stabilization program unparalleled in modern history"
(more specifically for his economic stabilization plans in Japan).
Three years before his death, Dodge was decorated with the Grand Cordon
Order of the Rising Sun
The is a Japanese order, established in 1875 by Emperor Meiji. The Order was the first national decoration awarded by the Japanese government, created on 10 April 1875 by decree of the Council of State. The badge features rays of sunlight ...
by Emperor Hirohito on the tenth anniversary of Japan's postwar independence, on April 28, 1962, in recognition of his services.
References
External links
Papers of Joseph M. Dodge, Dwight D. Eisenhower Presidential Library
{{DEFAULTSORT:Dodge, Joseph
1890 births
1964 deaths
American bank presidents
Businesspeople from Detroit
Directors of the Office of Management and Budget
Eisenhower administration cabinet members
American expatriates in Japan
Grand Cordons of the Order of the Rising Sun
20th-century American businesspeople
American expatriates in Germany