Joseph Dodge

the American legal academic

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 economic stabilization programs in Germany and Japan, headed the American delegation to the Austrian Advisory commission, and worked as President Dwight D. Eisenhower's director of the Bureau of the Budget. Dodge formed economic reconstruction plans for West Germany after World War II, and implemented financial reforms in 1948. He later moved to Japan, having drafted another economic stabilization plan, widely known as the "Dodge Line", in December 1948, as the financial adviser to the Supreme Commander for the Allied Powers (SCAP), General Douglas MacArthur. 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. After graduating from Detroit Central High School in 1908, Dodge worked at the Standard Accident Insurance Company as a clerk until 1909, when he began work at the Central Savings Bank. 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." 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. His position, granted by President Truman, carried the personal rank of Minister. 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."

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 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, 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 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.

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 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 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.

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's finance director for American forces in Germany, Dodge was awarded the Medal of Merit on September 18, 1946. Later, he was awarded the Exceptional Civilian Service Medal in 1950, by the Department of the Army, "for making possible a stabilization program unparalleled in modern history," i. e. 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 by Emperor Hirohito on the tenth anniversary of Japan's postwar independence, on April 28, 1962, in recognition of his services.