He called on Rowan Gaither, a wealthy San Francisco lawyer whom Collbohm had met during the war when Gaither was business manager of the MIT Radiation Lab. Gaither sat down with Collbohm, systematically listed the pros and cons of various ways to set up a reborn RAND, and concluded that the best technique was to establish RAND as an independent, non-profit corporation.
The idea met with Don Douglas’ approval, and on January 26, 1948, Arthur Raymond and Larry Henderson of RAND asked for the legal consent of the Air Force general counsel. Raymond had been with Douglas since the war, had worked on the B-29 Special Bombardment Project with Collbohm. Henderson, another of the original RAND staff and now its Washington representative, had been in the Office of Scientific Research and Development as well as the MIT Rad Lab during the war and, before that, had picked up legal and business experience at Harvard Law School, Harvard Business School and, just before the war broke out, as assistant to the vice-president for foreign affairs at Chase National Bank.
After discussions with the RAND guardians, Air Force Chief of Staff General Carl Spaatz wrote to Douglas on February 10, granting consent “when we are satisfied that the new corporation is in existence and is capable of discharging the contract obligations as effectively as the Douglas Company.”
Gaither advised Collbohm, Henderson and Raymond that they would need about $1 million to start a corporation. With the respectable Rowan Gaither as an active backer, they were promised a $600,000 line of credit from the Wells Fargo Bank of California as long as RAND came up with an initial $400,000.
Around this time, the Ford Foundation was in a state of flux, going through a major reorganization. Gaither knew this because of his connections with the foundation. (He would later become its chairman.) One Ford trustee, Donald David, was dean of the Harvard Business School and a former professor of Larry Henderson’s. Gaither, Collbohm and Henderson traveled to Cambridge, Massachusetts, and persuaded David and a much more influential Ford trustee, Dr. Karl Compton, a famed MIT physicist, of their cause.
As a result of this lobbying effort, a meeting was arranged with Henry Ford II himself. Ford was enthusiastic and promised a $100,000 interest-free loan (which was later converted to an outright grant) and an additional $300,000 credit guarantee. They then returned to the Wells Fargo Bank, which now reduced its offer of credit from $600,000 to $150,000. Still, it was enough. An eminent board of trustees was established, chaired by Rowan Gaither. On May 14, 1948, RAND became an independent, nonprofit corporation, but of a rather strange breed—all of its contracts would still come from the Air Force. Collbohm, for the time being anyway, resisted suggestions even to broaden RAND’s base to include contracts from the Office of the Secretary of Defense.
“Civilians come and go,” Collbohm said. “The Air Force stays forever.”
Even while RAND was still operating under Douglas Aircraft, even when things were far from smooth for top management, the civilian analysts of Project RAND were having a wonderful time. By the fall of 1947, they numbered 150. For anyone interested in some vague combination of mathematics, science, international affairs and national security, RAND offered a nearly ideal setting. There was an intense intellectual climate, but no teaching obligations or boring faculty meetings. There was access to military secrets, but no military officers from whom to take direct orders. There were brilliant minds working to solve fascinating problems. It was freewheeling, almost anarchic, virtually without hierarchy or separation among disciplines. One man invited to RAND in 1947 wrote in a memo, “I have been at RAND for three exciting days and I would like to become part of it. Right now RAND is part solid, part liquid, and part gas….” It was run under Air Force contract, but that was all right. The Air Force was the only service that had the atom bomb; American security policy was based almost entirely on the bomb; therefore, Air Force policy essentially was national security policy, and Project RAND was the Air Force center of ideas.
Early in 1947, Olaf Helmer of the RAND mathematics division came up with an idea that would change the complexion of the Project. Helmer was a German refugee with two Ph.D.s, in mathematics and in logic, who emigrated to the United States in 1936, taught mathematical logic at the New School for Social Research and City College of New York, and during the war worked for a group on 57th Street in New York called the Applied Mathematics Panel, the OR unit of the Office of Scientific Research and Development. Helmer had been at RAND for a short time when he reflected on the possibility that RAND might be too limited in its outlook. Military problems, after all, were not just engineering or mathematical or physics problems; they involved questions that might better be investigated by economists or political scientists as well.
John Davis Williams, head of RAND’s math division and a former colleague on the Applied Mathematics Panel, liked Helmer’s idea, made it his own and set off to persuade Frank Collbohm that RAND should have two new divisions, one in economics and the other in social science.
Williams had come to RAND in 1946—he was the fifth RAND employee—on the recommendation of Warren Weaver, director of the Applied Math Panel during the war and social science chairman of the Rockefeller Foundation shortly after.
John Williams weighed close to 300 pounds. Trained as an astronomer, he was also an excellent pool shark, he would later write an article on TV wrestling for the promotional issue of Sports Illustrated, and he loved to supercharge and drive fast cars. He had loaded a Cadillac engine in his brown Jaguar sports coupe, and relished few things more than taking it out on midnight test runs at 155 miles per hour. (Williams might also be credited as the man who first applied radar to automobiles, building his very own “fuzz buster.”)
Williams loved mathematical games and had for some time been particularly keen on a new chain of ideas called the “theory of games” or “game theory,” devised by a mathematician named John von Neumann. Von Neumann was possibly the most brilliant man of the twentieth century. He was a cheery, roly-poly man, short and round-faced like a cherub. As a teenager, he was known to his friends as “Mr. Miracle” because of his great love for inventing mechanical toys. During World War II, he was chief mathematical wizard at the Manhattan Project. After the war, he taught at Princeton, but remained at Los Alamos as a consultant in the Theoretical Division, or T-Division, where—along with Edward Teller, Enrico Fermi, Lothar Nordheim and others—he became enraptured with the problems and principles of fusion energy and the hydrogen bomb.
Von Neumann grew up in Hungary, coming to the United States in the 1930s, retaining a bitter hatred of Communism, an uncharacteristically fervid emotion about the subject which lasted the rest of his days and which also allowed him—in contrast with J. Robert Oppenheimer and many other leading scientists of the day—to work enthusiastically on the H-bomb project with no moral qualms. “I think,” von Neumann wrote to Lewis Strauss in November 1951, “that the USA-USSR conflict will very probably lead to an armed ‘total’ collision, and that a maximum rate of armanent is therefore imperative.”
In 1951, fusion experiments were bogged down by the almost impossibly complicated mathematical calculations that the scientists had to work out. For assistance, they had only the ENIAC computer, whose memory could hold a mere 27 words and which was constantly on the blink. Von Neumann invented a new electronic computer that could hold 40,000 bits of information, recall them later, identify errors in the instructions that anyone fed it and correct the errors. When von Neumann displayed the machine to the Atomic Energy Commission, he gave it the high-sounding name of “Mathematical Analyzer, Numerical Integrator and Computer.” Only later did officials see that von Neumann, forever the practical joker, had dubbed the machine with a name whose acronym spelled MANIAC.