Paul Nitze Interview (page: 4 / 9) Presidential Medal of Freedom	Print Interview

You mentioned two or three times that there were things that interested you, but that you decided you weren't talented enough in that area. Did you often approach something and decide it wasn't right for you because your aptitude wasn't good enough to succeed in that area?

Paul Nitze: Yes, that did strike me from time to time. I was interested in too many things and therefore I wasn't concentrating enough on one thing. With respect to that mathematics and physics problem, it wasn't that I wasn't good at math. I really was quite good at mathematics, but I found that with integral calculus, you really had to do some work. It didn't just come off the top of your head the way differential calculus did. I was not in a mood at that particular time to do the necessary kind of work over a long period of time.

Have you ever regretted that, or thought that you might have been a scientist?

Paul Nitze: Yes I have. I used to think that. I've always been very interested in science. I learned enough about science so that I've always been able to talk coherently to the great mathematicians and the great physicists. Many of them have become my friends.

What about your parents? Did they have a sense of where they wanted you to head in your life?

Paul Nitze: I think my father would have liked me to have become a great philologist, a philosopher, a teacher, an academic type. But he understood early that it wasn't my nature. He didn't try to make me do something that I wasn't really equipped to do. My mother left it up to me. I had a feeling that I didn't get enough guidance from my parents. Perhaps it was good for me, I don't know. But at the time I was unhappy with it. I would have liked more advice.

Were there teachers that had more of an influence on your life?

Paul Nitze: When I was in high school in Chicago, there was a professor, Barnard, who taught us Greek Literature and History. He had an enormous influence on me and upon others in that class. He was a first class professor, and he inspired us with an admiration for Greek culture and the great Greek authors which stuck with us forever after. And there was a mathematics professor -- he made mathematics much clearer than anyone else had. Then there was a professor at Harvard by the name of Rafael Demos who taught Plato. His lectures were so moving, I can remember weeping at the end of a lecture because it was so moving. Then there was a professor of sociology by the name of Carver. Some of the ideas he started with, he would then carry to a point where the limits of their applicability became clear. That taught me that truth is finite and definable within a given area, but when you carry it too far out, it breaks down. You saw what the consequences were of an intellectually consistent set of ideas. It's true, for example, in physics. Classical physics is still true, except when you get out to very high velocities and very small things, and very great distances. But in everyday life, Newtonian mechanics works perfectly. It's only when you get way out to the extremes that it doesn't work. That is true of many things, where you have to be careful if you carry logic out too far. You have to bring it back to reality from time to time.

When did you become interested in business, finance and economics?

Paul Nitze: I had that in the back of my mind since the time I was at Harvard. I started work as a cost accountant in a paper mill, and then moved to office manager of a box factory in Bridgeport. I finally resigned from that and did a study on whether or not to invest money in Germany in 1929, and came back from that having determined that anyone who invested money in Germany in those days should have his head examined. That report impressed Mr. Clarence Dillon of Dillon, Read and Company, and he hired me. I began to work on Wall Street on October 1, which was just three weeks before the great stock market crash, which began the Great Depression. I lived through the worst part of the economic situation in the United States and in the world, and came out alive financially, having learned a great deal.

How much role do you think luck has played in what you have done and what you have accomplished?

Paul Nitze: Enormous role. My father, being a philologist, had looked into the origins of our name, Nitze, and came to the conclusion that it came from the same Sanskrit root that the word nike in Greek comes from, which means victory. So we were brought up with the tradition that Nitze meant victory, and that luck was on our side. That's a great belief to have. I do believe it to be true that luck has been on my side. Many of the things that seemed to be totally unfortunate at the time turned out, in hindsight, to have been very fortunate developments.

Get the Flash Player to see this video. When I was a senior at college I became ill with infectious jaundice and was very ill and couldn't go to graduate school. The fact that I went straight into business and learned something about accounting and running an office early in life, when you can really absorb it fast, turned out to be very fortunate indeed. I've never regretted not having gone straight to graduate school, thereafter. Having entered Wall Street just days before the Great Depression, I lost my shirt right away of course, as far as assets in hand. Boy, that was great experience, to live through all of the disasters that can befall one in the economic world, and see it happen to others. How do you weave through those kinds of economic difficulties? Learned there is an invaluable lesson in learning how to deal with complicated financial problems. So, those of us who had jobs during the Great Depression, I think we learned more and learned it faster than one could have learned otherwise. So that generation of Wall Street fellows, we all ended up knowing something about not just economics in practice, but world finance as well.

[ Key to Success ] Preparation

Were there people outside of academia who taught you things in life?

Get the Flash Player to see this video. Paul Nitze: Mr. Clarence Dillon, who was my first real boss on Wall Street, was the most brilliant man I've ever worked with or for. I think he had an extremely intelligent mind, and I learned a great deal about analyzing situations. Well, the main lesson that I learned from him was that there was a contrast between analyzing a situation, and then doing something about it. Those were two different worlds. When you are analyzing something, you want to be coldly objective. You want to try to find the facts, find everybody's advice about it. Look at it without prior bias of any kind. But, then once you'd made up your mind, what needed to be done, then you wanted to change your personality. You didn't want to be disturbed by re-thinking it, you wanted to act. And, you want to act decisively, and produce the intended result without deviation, and only if you got way off, if it turned out that you were way wrong, did you want to reconsider what you had made your decision on.

[ Key to Success ] Preparation

Was there anything else about your philosophy, your attitude toward life, that was changed by those Depression years?

Paul Nitze: I don't believe so really. There was the temptation to change it. I can remember having a long discussion one day in the very depths of the Depression with two of my friends, both of whom had joined the Communist party. Wasn't it true that things had to be changed? The old pattern of doing things had led to this horrible situation, with 20 million unemployed in the United States, with people starving. Clearly, things did have to be changed. But should one go all the way to adopting the Communist idea? They thought one should, and that it was merely lack of courage that kept me from becoming a Communist. I could not accept the idea of the total unification of people's minds to one set of ideas, laid down by some dictator. Is that what life is all about? I came to the conclusion that it was not. So I would not join the Communist party and condemned them for so doing. But I gained a certain certainty about that judgment, which I think stood me in good stead thereafter.

There are some things you have mentioned reading that influenced your thinking. Spengler's Decline of the West for instance.

Paul Nitze: I read that later. It appeared clear from where I was in Wall Street, that things were going on in Europe -- in Germany and in the USSR and Italy -- which seemed to be extremely dangerous, things that I didn't fully understand. I thought the way to learn more about them was to go back to Harvard for graduate school. So I resigned from Dillon, Read and Company to see whether I couldn't find out more about those things. Amongst other things, I studied Spengler. One of the courses I took was a course given my a man named Sorokin, who had been Minister of Labor in the Kerensky government in Moscow. He told me that in this course I would learn what was wrong with Spengler. The truth of the matter was, Spengler was a much greater man than Sorokin. And Sorokin himself on the last day of the course admitted that. He said, "You know Mr. Nitze, Spengler was a great man. I am merely trying to make this course interesting."

A lot of people have brains and potential and work hard, and yet don't succeed as much as you have in your chosen areas. Why do you think you have succeeded where others have not?

Paul Nitze: Well, I did give myself lots of chances to succeed. I didn't have much money, so the risks that I could take in the financial world were small, but I tried to find those risky, high-growth ventures that I could make some real money in. I guess 90 percent of them failed, perhaps 95 percent. But I finally hit on one or two that really did work and became tremendous successes, so I made a lot of money early.

What do you draw from that? You have to take a lot of chances?

Paul Nitze: That was certainly true in my case. But when you do find something that looks as though it is going to turn out well, not to get out on a minor profit. Stay with it and build on it. I stuck with this first one. It was a vitamin company called U.S. Vitamin and Pharmaceutical. My partners in that business sold out after a period of time, but I didn't. I stayed with it right straight through, and the result was we finally sold it to Revlon for a tremendous profit.

Would you say the first big break in your life was meeting Mr. Dillon?

Paul Nitze: That was the first big break. The second was that...

Get the Flash Player to see this video. I lost a lot of money for the firm quite soon. And he (Clarence Dillon) ceased to know who I was. I was a non-person. So, after he threw me out -- I was his personal assistant for some years -- and then suddenly I was a non-person. But, then all the other partners in Dillon Read, who had hated me when I was the boss's white-haired boy, they suddenly decided, "Maybe there is some virtue in this fellow that Dillon has stepped upon mightily." So, they took me up and I became a friend of Jim Forrestal's and Dean Mathey's. And then when he (Forrestal) went to Washington, he took me with him to Washington. That's how I ended up in Washington.

[ Key to Success ] Perseverance

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