In the 1930s, McCloy headed Cravath's Paris office and spent several years representing Bethlehem Steel in the "Black Tom" case, in which the company sought and eventually obtained (in 1939) $20 million in damages from the German government for sabotaging an American munitions plant during World War I. The case made McCloy the leading American expert on German sabotage and enhanced his interest in international politics, giving him insights into the darker machinations of espionage and warfare as World War II approached.
In 1940, McCloy joined U.S. Secretary of War Henry L. Stimson as a consultant, his remit being to help his elderly superior run the department, and in 1941, he became assistant secretary of war. Immensely energetic, equable, and personable from then until leaving office in November 1945, McCloy was involved in virtually every major political and military wartime decision. In 1941, he and his French friend Jean Monnet devised the phraseology used by President Franklin D. Roosevelt in announcing that the United States would serve as the "arsenal of democracy," furnishing Lend-Lease aid to its Allies.
McCloy staunchly advocated the wartime internment of Japanese Americans, citing national security reasons, and for the rest of his life would claim that adequate justification had existed for the consequent infractions of civil liberties. In 1944, on the advice of various Jewish associates who believed reports of concentration camp atrocities must have been exaggerated, McCloy advised against aerial bombing of the railway lines leading to the Auschwitz camp, on the grounds that this would divert scarce resources from the main war effort. He supported War Department proposals envisaging Germany's economic reintegration into Europe, in opposition to Treasury Department plans to break that country into smaller states and destroy its industry. In 1945, McCloy attempted to persuade other American officials to seek a peace settlement with Japan, rather than using atomic weapons against Japanese cities—a move he always believed was unnecessary.
McCloy left the War Department in 1945, but from 1949 to 1952, he served as the U.S. high commissioner in the Federal Republic of Germany, responsible for gradually implementing its return to independence. Controversially, he decided to pardon various German industrialists convicted of wartime crimes, including Alfred von Krupp.
McCloy staunchly backed Monnet's efforts for West European political and economic integration. From 1961 to 1974, he was a presidential adviser on arms control. Until the 1980s, he remained one of the "wise men,"—the recognized foreign policy experts with whom successive presidents consulted on a wide range of international issues. McCloy died in Stamford, Connecticut, on 11 March 1989.
Bird, Kai. The Chairman: John J. McCloy and the Making of the American Establishment. New York: Simon and Schuster, 1992.; Isaacson, Walter, and Evan Thomas. The Wise Men: Six Friends and the World They Made. New York: Simon and Schuster, 1986.; Schwartz, Thomas A. America's Germany: John J. McCloy and the Federal Republic of Germany. Cambridge, MA: Harvard University Press, 1991.; Witcover, Jules. Sabotage at Black Tom. Chapel Hill, NC: Chapel Hill Press, 1989.