[TAPE 1, SIDE A]

JAMES E. HOLSHOUSER JR.:

A) the medical school has been a good asset for the state and B) we ran a serious risk that by fighting that fight and losing we might have a serious chink in the armor of the structure open up; fortunately it didn't.

JACK FLEER:

What do you see, if any, disappointments in your administration?

JAMES E. HOLSHOUSER JR.:

We didn't get the mountain area management act through. Because of the Watergate timing, we really weren't able to lay the groundwork for immediate competitive challenge by the Republicans for the governorship in 1976. David Flaherty ran a good campaign and is good a guy; but nobody could have won that year. I was disappointed about that. At the same time, you know I have a different perspective after twenty years. It certainly laid the groundwork. When we got past that, North Carolina went to Reagan in 1980 and 1984, we elected Jim Martin in 1984, and elected the Republican legislature in 1994. It has taken time, but we have crossed over barriers and you have to feel good about that. And again, not that I view myself as the builder of the Republican party so much as hopefully the builder of a two party system which is good for the state. And I feel pretty good about the fact that we did some, a second stage, jump start for the community college system with the extra capital dollars that was there and has carried over some practice to keep that energized. We are still ahead of a lot of states although we could do more out there.

JACK FLEER:

So the mountain area management bill would be your major sort of substantive disappointment. Why did that happen?

JAMES E. HOLSHOUSER JR.:

Lost the Republicans from the mountains. Could not hold the coalition together. Didn't have any from the coast to start with on the coastal bill. We got the

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Piedmont from both parties. The Republicans from the mountains passed that and the Piedmont people stayed in place on the mountain act. The coastal people weren't going to vote for any more than they did for their own because they were mad. I said mad, they already had a mind set against it and the mountain people just had that populist thing about a man doing what he wanted to with his own land.

JACK FLEER:

A man's home is his castle.

JAMES E. HOLSHOUSER JR.:

That is right. And I look back. It is hard to know how much overall impact there is on things. We set up because what we called people's days to go around once a month to some place and just listen to people come in, first come first serve. Early on that had some good things but as it went on the last couple of years I say it seemed to be more people wanting their road paved or a son out of prison or wanted you to take out the plate that the FBI put in there and was listening to every thought they had. You had those three categories that seemed to become more and more of the thing. I didn't feel as good about it later on. It was a good ombudsman approach to give people a chance to get heard if they were just getting lost in the system.

JACK FLEER:

Other than the people's day that was a program of your going out to various communities, you did set up the ombudsman's office within the Office of the Governor. Did you feel that it functioned better than the people's days in that regard?

JAMES E. HOLSHOUSER JR.:

Yes, very much so. Of course the staff in that office went out for people's day and they had the job of following up on that. Anything that came into the governor's office that looked like a prior complaint hadn't been responded to at all went over there. They had to contact the cabinet people. That is probably, you were talking earlier about not necessarily a conflict, a control in the administration. I think the folks in that office

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were genuine young and energetic go getters. Don Quixote types almost, partner like place, who kept a lot of things from slipping in the cracks. That helped as much as anything probably in terms of public attitudes about the administration.

JACK FLEER:

One could argue that given the declining trust, in a sense faith, that people have had in government over the last say twenty or twenty five years that having that kind of an office with, even some energetic Don Quixotes, becomes an important antidote to that feeling.

JAMES E. HOLSHOUSER JR.:

That is right and there needs to be the right kind of attitude. You have got legal services set up in regions across the state who end up suing the government. I have always thought that some how that was wrong, to take public dollars and sue yourself. But at the same time you have got people who can be part of the administration in the broadest kind of sense but really have the sole purpose of keeping track of the problems that are just getting lost out there. Or in a few cases where somebody who was just, in one of the departments who was deliberately sitting on something because they just didn't want to do it. That wasn't often but sometimes.

JACK FLEER:

I want to talk finally about the impact of being governor on you as a person and on your family. What do you see has been the impact of being governor? What was it while you were governor and what has it been since on you as an individual?

JAMES E. HOLSHOUSER JR.:

Well during the governorship you move from being just one of the fellows to being the guy in the fish bowl all of the time and the family in the fish bowl all the time. It has a serious impact on the wife and kids. That is an impact that probably will last with them for a lifetime. In one sense, it gives the governor something that you can't lose, unless you throw it away and nobody can take away from you by the fact that

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you got elected even if it is a total accident. And that gives you I think a confidence. I think whether it is deserved or not, it lets you see life in a little bit different perspective. It has people seeing you in somewhat of a different perspective. If you leave office and go out and get yourself convicted of embezzling an investment of $100,000 from somebody or get charged with sexual molestation of minors or whatever, you are going to lose that. You have some potential to lose some of it if you come back and try to run again and lose as Bob [Scott] did, against Jim Hunt. Although I find for the most part those scars are probably felt just inside of him and I am not sure that they are there. I think that most people have sort of forgotten that; but it is just not in front of their minds all of the time. They just view Bob as the former governor. I think he is just as well regarded as others in spite of that loss. Hadn't changed the fact that he knows a lot about government, knows an awful lot of people, that kind of thing. Just the sheer fact of running, if you run right, gives you a whole new perspective on the state, how big it is and how long it is, all different parts of it. Serving heightens that I think. It is nice to know that if my car breaks down somewhere in the night any place, there is going to be somebody out there I know who can come give me a place to spend the night. I think it gives you a sense of public duty that doesn't stop when you leave office. Part of it won't let you. Dan Moore told me one time you can't ever quit being Governor. A lot of people who helped you along the line still call and ask for you to do something. You just can't say no. I am going over to Rowan County next Saturday night to a Republican dinner, post primaries, I think. There is not a single thing that says I should do that, except I just know inside, I can't not do it.

JACK FLEER:

You said it has a serious impact on family. Can you talk about that a little bit more?

JAMES E. HOLSHOUSER JR.:

Well, I think wives have the hardest time during the administration. The governor has lots of people pulling and tugging and people wanting him to do things. You have got things to keep you busy. When the newspapers shoot at you you either address that or ignore it whatever. But the wife can't do a thing but just sit there and take it. It is harder having somebody say something about the person you love than having it said about you in a way, at least that is how I feel. I haven't had many people say bad things about Pat so I'll speak from experience. That is how it seems. Over the years I have watched spouses have much more a difficult time with events than the people who are directly involved. For our daughter, the four years was a lot of good things. She got to see parts of the country and the world that she couldn't see otherwise. Had a whole different perspective about the highway patrol because they were around all the time. She considers them her best buddies. She also has no hesitancy about walking up to any state agency and walking through the front door or calling and saying I have got to come see you about something.

JACK FLEER:

Now.

JAMES E. HOLSHOUSER JR.:

Yes. And she would not hesitate to pick up the phone and call Carolyn Hunt about something. I am not sure she has but I know she wouldn't hesitate.

JACK FLEER:

It is the confidence to do that.

JAMES E. HOLSHOUSER JR.:

And yet she endured some things during those four years just because she was always the governor's daughter wherever she went to school and that set her apart. There were some down sides to that that weren't serious fortunately. But it is things that I

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think parents have to work really hard not to let kids get sort of lost in all of this that is going on.

JACK FLEER:

I remember you saying earlier that whenever you finally decided to run for the office of governor you said to your wife, you either have to run for governor or get out of politics, things had come to that level. So I assume that your wife and by extension that your daughter was part of the decision to run for the office.

JAMES E. HOLSHOUSER JR.:

Well Ginny wasn't. Pat definitely was and she had been supportive all the way through. And my father, even though he didn't think I stood a prayer I don't think, once I decided that I was going to do it, supported me all the way. When I say all the way he signed a second mortgage on our house and he signed a note.

JACK FLEER:

On the line for it?

JAMES E. HOLSHOUSER JR.:

That is right. Put your money where your mouth is or a risk of losing money. He and my mother looked after Ginny during the time that Pat and I were both on the road during the campaign. I am not sure that we appreciated how much effort that they put in during that year. Even after it was over with. It was one of those things that you do inside the family, just a normal thing that was happening. But looking back, they probably did as much for that campaign as anybody just in terms of looking after our daughter and looking after all the things that I couldn't look after and Pat couldn't look after because we were gone.

JACK FLEER:

Did you take any special measures or decisions to try to maintain some kind of "normal" family life?

JAMES E. HOLSHOUSER JR.:

Well I suspect that Pat probably did more thinking about that than I did. We made a point of having breakfast every morning together. That wasn't the case at

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dinners that you attended where you had people coming in and Ginny couldn't be part of that. And we made a point of marking on the calendar when she was going to have some kind of event at school so that I wasn't off in Charlotte or Timbuktu. Because you have got some places you can go every night you just have to schedule those that you have to work around with all the rest. And it is, I think Pat was relieved to get out of the spotlight fish bowl and she would not be enthusiastic if I decided I wanted to run again. She would probably say I have been there and I didn't particularly enjoy it the first time and I know I don't want to do it again. She would probably do it if I really got my heart into it. She probably would do it with enthusiasm to help win once we got into it. But up until I decided she would be encouraging me not to do it probably. Ginny on the other hand I think if the situation arrived would love to run for office.

JACK FLEER:

Herself.

JAMES E. HOLSHOUSER JR.:

Yes. And I don't think that she had thought of herself as the first female governor. But I think she would love to run for the legislature.

JACK FLEER:

So it did not create in her a negative attitude towards public life?

JAMES E. HOLSHOUSER JR.:

No. I have seen those tracks around. She has been involved in four or five nonprofits in Surrey, Stokes and Forsyth counties. Some of my Republican friends in Stokes say, "Boy your daughter is just a natural. She comes before the county commission for her agency. She is always the one they send over there and she says she gets up and makes her pitch. You just can't say no."

JACK FLEER:

Isn't that wonderful. She learned from the experience.

Did you take any special efforts to, let's say for example, guarantee vacation time or things of that type?

JAMES E. HOLSHOUSER JR.:

Yes, we always left North Carolina the day after Christmas and went to Ft. Lauderdale and spent from Christmas to New Years as a family. We took two weeks off in the summertime and went to the western residence. When we went to Florida, we didn't have any security people, no staff or anything, just the three of us got on the airplane and went. When I say the airplane, commercial flight, probably could have got away with the other, just didn't. And Ned Cline of the Greensboro paper one time got on to a rumor that some business man was setting us up at his private abode down in Florida, thought we were on the take about something and snooped around and snooped around. I finally said, Ned I am not going to tell you where I go because I don't want any phone calls ever down there. But I can tell you this, we flew commercial, we stayed in a commercial motel, we have paid for ourselves, paid for the plane flight, paid for the meals and there is just nothing to it. He had traveled enough with me during the campaign that he knew if I had told him that it was so.

JACK FLEER:

Is it the lack of privacy that you think is the most serious "negative," if there is a negative, or is it something else?

JAMES E. HOLSHOUSER JR.:

Well, for the wife there is going to be about as many demands on her. Plus, she has always got the governor's staff calling over saying you need to do this and you need to do that and most of the time…

JACK FLEER:

Public functions she should perform?

JAMES E. HOLSHOUSER JR.:

Yes, or something that she ought to do. She probably knows as well as they know whether she should do it or not. And when she gets criticized and she got criticized a few times, three or four times in the four years about something. Really upset her and it upset me too. Those were just passing things. You just said. "It's a bad

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editorial," go on to tomorrow. If you think you did the right thing don't second guess yourself. I think the overall experience for all three of us though is that we look at life a different way. Now she has still got the same core of interests that she had before I ever got involved with politics, before we ever got engaged, this nursing. And while she focused in on Hospice over the last decade or so, that has always been her first love in a sense. While there was a lot about politics she enjoyed and we both made a lot of friends, I think she has been glad to get back to that.

JACK FLEER:

It was not something that she could continue while she was in the office?

JAMES E. HOLSHOUSER JR.:

That is right.

JACK FLEER:

The "office" that she occupied while you were in office.

JAMES E. HOLSHOUSER JR.:

She went back to nursing school the last quarter we were in Raleigh because I had dragged her out of nursing school and up to Appalachian when we got engaged. So she hadn't got her nursing degree.

JACK FLEER:

Oh I didn't realize she had not completed.

JAMES E. HOLSHOUSER JR.:

Right. So she started then and finished that during the first year we were out of office and later got her masters in nursing in Chapel Hill, commuting back and forth.

JACK FLEER:

My wife did something like that, it is not easy. Did she, let me rephrase this.

You mentioned it was the demands on the time. Were there other aspects of it that made it difficult?

JAMES E. HOLSHOUSER JR.:

Well, you really don't have a personal life during that stretch of time and I think that is one of those things that I may have said before. I learned during the campaign that I could push myself beyond the limits that I thought I could go once as

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long as I knew that it was going to end. That it was a short-term thing. You could see the light at the end of the tunnel whether it was a train or whatever. That win or lose on election day that pace was going to stop and I think that is how we both felt about the four years. That we had to give our best for four solid years because you couldn't run for reelection. You didn't have to worry about that. We were both figuring on going back to Boone. Turned out we didn't. I believe that is what makes that manageable. I think the lack of that is what makes so many marriages go bad in Congress because that just goes on and on and on. I think there are a lot of marriages that would survive had they not had that strain on them in Congress. A lot of marriages have survived but it is because somewhere a long the line I think the couples make a pact that this is something that they are going to agree to do forever.

JACK FLEER:

You in a sense were on call for twenty four hours as governor.

JAMES E. HOLSHOUSER JR.:

That is right.

JACK FLEER:

and in a sense your wife and probably not your daughter since she was so young. Is there anything that can be done about that to make being governor somewhat more possible?

JAMES E. HOLSHOUSER JR.:

I don't think so. I mean you don't have but one guy who is head of the national guard, head of the highway patrol, so to speak, if something is to happen. That is the reason that it never bothered me much about taking a state plane or the highway patrol wherever I was going even if it was for a political event. You can't do that anymore I don't think because people fuss at you. But they didn't fuss then. Jim Martin over did it. He said if there were any politics involved in any part of the trip, the campaign fund had to apy for all of it. Where I didn't even stop at the other extreme of saying that if any part

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of it was government then government could pay for it. No part of it was government I still had to pay for it and I still don't think that was wrong. But I know I would get some disagreement on that today.

JACK FLEER:

So the job just has this sort of full time expectations and necessity.

JAMES E. HOLSHOUSER JR.:

That is right. There are things that you can do. There are times you would have appointments in the afternoons. Somebody would call in and say they had gotten tied up. All of sudden your afternoon opens up and you say lets run down to Pinehurst and play eighteen holes. And there was always something on the desk; the desk was never empty. But you do have the flexibility to get up and do that. And there is nothing says that you have to go to the office at all. It is not in the constitution. Lauch Faircloth when he was secretary of transportation swore you could do the job working three days a week.

JACK FLEER:

I didn't realize that. His job or the governor's?

JAMES E. HOLSHOUSER JR.:

I said transportation. It was when he was in commerce he said that, that the secretary's job only took three days a week. And of course Lauch had been sort of a unique kind of individual all the time any way because he is always, he sort of knew what he could do and what he couldn't do and he just did it.

JACK FLEER:

Would the addition of staff to the governor's office help in making it a more manageable responsibility?

JAMES E. HOLSHOUSER JR.:

I'm probably speaking out of ignorance now. It is hard to know how much is coming into the Governor's office that has to get into a funnel somehow and then come back out at the other end. When I was there, Phil Kirk had all the mail sit on his desk that came in there everyday. Some of it just needed an automatic response that

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worked out to a mail processing thing, word processing. Some had to be sent over to a cabinet secretary. He would just sort it out. Then eventually some of it would have to have a letter from me back that he would draft. Most of the time we would just talk through and I didn't even sign it. I had a couple of gals who were good forgers. You know the White House has always had machines. We never signed, I mean I always signed executive orders and things like that. I don't believe more staff is the answer. I think more staff has more potential for games for people to play and other people's agenda to get involved. You have more pull and tug between personalities. I think you need to keep that staff pretty lean and mean. Now the budget office has been added to that staff which makes it look a lot bigger than it is right now as opposed to what it was. That could have been a mistake rather than having it in the Department of Administration.

JACK FLEER:

Moving it over to the Governor's office?

JAMES E. HOLSHOUSER JR.:

Yes. The Department of Administration always had the reputation of being sort of professional and insulated from politics. When they moved it to the governor's office I think it became the governor's tool in the minds of the legislature and made it, not less effective is the wrong word, it just changed how people perceived it.

JACK FLEER:

Although actually prior to that move, the legislature had set up its own fiscal research

JAMES E. HOLSHOUSER JR.:

And I guess if you look at which came first that may have been a response to the legislative move rather than the other way around.

JACK FLEER:

What about the first lady, should she be a publicly paid official?

JAMES E. HOLSHOUSER JR.:

Been a lot of talk about that particularly with Hilary Clinton.

JACK FLEER:

Yes. I am talking about of course the governor's first lady.

JAMES E. HOLSHOUSER JR.:

Right. I am inclined to think not. You can make an awfully good argument about the fact that she is on duty full time too. She doesn't have to be. And I think Carolyn Hunt has spent a fair amount of time of the farm down at Rock Ridge particularly during the first Hunt administration. Don't really know that, I just have heard that. I think you can make a pretty strong argument for saying that if it is because her work is there and it has to be done as part of the governor's office that she could be paid out of the governor's office. It may change how she is perceived and may change it for the worse. The strongest arguments you are making for doing that is that it treats her as an individual apart from the governor and says that her role is defensible. You can make that pretty legitimate now.

JACK FLEER:

Would it be politically difficult to make such a recommendation?

JAMES E. HOLSHOUSER JR.:

Actually from a legal and political standpoint, the governor could put her on payroll from the governor's office. It would have to come out of his/her budget. And it wouldn't be anything illegal. You might get a few quips editorially when you first started but I think if the governor just said this lady is working 56 hours on an average a week for the state and she is due to be paid. Now the political side of that is it looks like you are feathering your own nest as a couple. That would be the only down side.

JACK FLEER:

What were the most difficult times you had personally as governor?

JAMES E. HOLSHOUSER JR.:

We went through a stage, it seemed like to me about the last six months, where it seemed like the media got much move inclined to not give you the benefit of the doubt, that they assumed you were guilty until proven innocent kind of thing and decisions got questioned.

JACK FLEER:

Got questionable?

JAMES E. HOLSHOUSER JR.:

Got questioned. I mean the head of the highway patrol got stopped by one of his own folks for speeding coming back from Asheville. Some thought I should fire him but I didn't. And that kind of thing just made it hard. I found early on, this is getting a little on the side of it when I told the media I wasn't going to answer any questions starting with if because we cross the bridges, as they came. That cut off about three-fourths of questions that they normally ask. One said to me later we use to sit up nights drinking beer just trying to think how you could reword these questions trying to get the answers without saying if. But most of the times you don't have to cross those bridges, you don't try to guess what is going to happen here and say if this happens I will do this and if this happens I will do that. That was particular true in trying to deal where the legislature is concerned. You couldn't use that vehicle to say that if the legislature will do this then I'd be willing to give on this. That is better said in private anyway.

JACK FLEER:

In negotiations with the legislature publicly. Any other difficult times?

JAMES E. HOLSHOUSER JR.:

Well the last six months looking back I know my hemoglobin was dropping because of the kidney disease and I was more tired than I realized physically. I had that accident right after I left office and they came in and took a quick blood run and saw the hemoglobin and thought that I had some internal bleeding going on and got scared to death. At the same time looking back I don't think the schedule slowed down a bit because I have been very much involved in trying to help Gerry Ford. Of course once the election is over, you start trying to focus on what you are going to do with yourself and also trying to make sure that the people in administration got help if they needed it in terms of locating out of the government. Because I told them that Bob Scott had asked all

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of his cabinet people to resign as a courtesy to me before he went in. I felt like that was a good thing and we ought to do the same thing. So everybody in the governor's office, except the girls who had been there forever running the machines and stuff, were pretty well set by the time the administration was over. Almost all but a few exceptions. The cabinet people were all ready to get home. But I think the time of losing the primary, Ford losing to Reagan in the primary, that didn't have anything to do with North Carolina state government. It hurt a good bit but I thought we were going to win kosher.

JACK FLEER:

So it was a personal and political disappointment.

JAMES E. HOLSHOUSER JR.:

Yes and I had put out and pulled out all the stops in trying to help. That was really disappointing.

JACK FLEER:

What is the most satisfying thing about being governor?

JAMES E. HOLSHOUSER JR.:

Well I told people that it probably is pulling the car right up in front of Reynolds Coliseum or Kenan Stadium and getting out and walking in. Actually that is not so; although it is pretty satisfying. I think being able to get some things done that I wanted to do as a legislator but couldn't which is the reason I ran to start with. I didn't really run just to be the first Republican governor, given that little clip about I thought they needed me and I think, that part was just really good. Got to do a lot of travelling, saw a lot of the country, going to governors' conferences. The Irish Government invited the governors to the First Church bicentennial. Being part of the bicentennial was also a very special thing that nobody but me got to do as governor. That had a lot of meaning particularly the time in the last year of the administration when you were moving into serious lame duck status. That was something that was energizing in itself and I really enjoyed that. We had the national governor's conference in Hershey a week before the

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bicentennial and all the governors went down to Washington to see Queen Elizabeth out on her boat that she had pulled over and got back in town to do the things in Raleigh. That was a really good part.

JACK FLEER:

Some perquisites of the position that offset the lack of privacy and the demands of time.

JAMES E. HOLSHOUSER JR.:

Yes. They are because you have got all of these planes and helicopters and patrol cars that you can use to go places. You have got things that people do for you because of the office, not because of you, because of the office that are just always very genuine. I am not talking about the …sort of giving you themselves in a way just makes you feel good. It was satisfying in being able to say let's do this and seeing it happens. Because if you say it to the legislature let's do this you have got to go and persuade at least 61 people in the house and 26 in the Senate to do that and it still may not come out like you want it depending on how it gets implemented.

JACK FLEER:

But you have numerous occasions you are implying where you could say we are going to do it and it happens?

JAMES E. HOLSHOUSER JR.:

That is right.

JACK FLEER:

Policy and governmental.

JAMES E. HOLSHOUSER JR.:

Well, and little things. I had always thought it was crazy to have new license plates every year and so now you get that little sticker and of course that cuts down on the number of plates that were made by the inmates. The correctional people were saying what are we going to do with all those people all the day and there is always the argument against that. I thought we had a disjointed way of handling the budget in

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some ways. We have changed some of that. I wanted to do a program budget. We did that one year and the legislators just hated it.

JACK FLEER:

I remember that.

JAMES E. HOLSHOUSER JR.:

I still think that is a good thing but I don't think you will ever see the legislature relinquish their right to line item.

JACK FLEER:

I was thinking the other day I don't know whether I mentioned to you before but I am trying to accumulate a list of the "firsts" each governor had done. I put down that you were the first and the last governor to ever have a program budget.

JAMES E. HOLSHOUSER JR.:

That is right. I believe you have got that right. It will have to be after everybody who was there at the time has died before anybody would even try that again.

JACK FLEER:

And there is no such time, or not likely anyway. Well Governor we have reached the end of what has been a wonderful set of interviews. I feel like you have made a real contribution to our understanding of the office and I know you made a real contribution as Governor of North Carolina. I thank you very much.

JAMES E. HOLSHOUSER JR.:

Well I told you before and I will say it again. I have enjoyed it and the visiting has been good just with you personally. Governors and past governors always like to talk about how great they were and that part has been fun too.

JACK FLEER:

Thanks a lot. [Recorder is turned off and then back on.]

JAMES E. HOLSHOUSER JR.:

At that point you had a fairly well defined model of when—of people who came out of the mountains and went way back as Republicans, but for different reasons than those who came in later. It wasn't just the mountains; you go down to Wilkes and Yadkin counties. You had Sampson County with its own peculiar thing down east. You had the people who came into the party from the north—they moved into the state as industry came in. That's one of the legacies that Luther Hodges and Terry Sanford started; they brought in industry, and they brought Republicans in, too. Not that that's what they intended [Laughter] . Then you had a group of people who had a harder edge on their politics than others of us did. Today it's a whole different set of circumstances. You've got social conservatives and economic conservatives; you've got Libertarians. We don't have many liberal Republicans in North Carolina. You've got a few, but the line moves generally from the middle [to the] right. That tends to be true of the Democrats as well, except that they move from the middle left, because most of the conservative Democrats have switched. As a result, it gets much harder for a moderate in either party to be elected statewide. That's probably not particularly good, in that I think that the state tends to be moderate to moderate-conservative by its nature. The country has become more conservative, and I think North Carolina has become more conservative since I was governor. Since the sixties just a tide of things, and I'm not sure I know why all that was. I expect that a certain amount of it had to do with Reagan's four—eight

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years in Washington. I think regardless of whether you are for or against Ronald Reagan or his approach to government. I think he changed the agenda in Washington from what it had been since the thirties. All of a sudden it was just a whole bunch of different questions that were on the table. It wasn't as much a matter of expanding government as it was a matter of how much you were going to retrench it, so to speak.

JACK FLEER:

How important was it for you to control the party itself? You mentioned earlier the well-publicized row over the selection of the state chair, and obviously you wanted to have your chair in there. How important was that effort to control the organization of the party?

JAMES E. HOLSHOUSER JR.:

Probably not nearly as much as it appeared from the effort that went into getting it; more personality conflicts there between the state chairman's office and the people who were involved in the administration. I'm not sure I'd do it again, looking back. It's hard to say, because you don't know. Sometimes memory tends to get a little blurred as to exactly why you decided this needed to be done. [Recorder is turned off and then back on.]

JACK FLEER:

…Other than having in the chair a person who was sympathetic to your administration—or compatible, let's say, to your administration and your way of leading the Republican party, what other aspects of the party organization and resources were you able to try to control as governor?

JAMES E. HOLSHOUSER JR.:

Of course, at that time the party was a different creature than it is now. You didn't have the tax check-off, or a significant source of on-going funds. So the party organization as such really wasn't much of an organization as such. It was almost totally volunteers, including the chairman. From my recollection, when I became state chairman

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in the sixties, we had one employee, secretary who got the mailings out, and that sort of thing. We had either a one office or a two-office suite in the Carolina Hotel in Raleigh. It was just a minimal, minimal budget; the party was $50,000 in debt, which was enormous for that time. We spent two years just getting that paid off. That is the hardest money you ever raise because it didn't go into anybody's campaign. Campaign techniques and the party's ability to function have come a long way since then in terms of being able to use direct mail, for fundraising being able to…

[TAPE 1, SIDE B]

JAMES E. HOLSHOUSER JR.:

…So both parties are better funded now than they were in the sixties, I think. It's usually easier for the party that's in control of the governor's office, to have the governor's presence help the party draw a crowd at fundraising dinners and that sort of thing. But both parties have gotten much more sophisticated (Republicans may still be a little more sophisticated) in terms of fundraising and campaign techniques. [Recorder is turned off and then back on.]

JACK FLEER:

We were discussing the ability of the governor to control the resources of the party, and you were saying that parties are much better off today, and that the Republican party might well be more sophisticated than the Democrats.

JAMES E. HOLSHOUSER JR.:

And there's another factor in this, too. When a new administration comes in, invariably the people who had been involved in the campaign and got their adrenaline running come to Raleigh. Well, that political adrenaline doesn't automatically turn off when they become a state employee. With both parties having their state headquarters in

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Raleigh, I suspect it's pretty usual that some of those people end up volunteering for things on nights and weekends with the party. If you watch campaigns in the off-year elections, you will see people moving in and out of the government fairly frequently into campaigns; somebody will leave this position in this department and go into the campaign for Joe Blow who's running for Congress, or the US Senate, or something. After the elections, however, he's right back over there—particularly if they lost.

JACK FLEER:

How important would an ability to be re-elected have been in your control of the party? In other words, would your relationship with the party have been different if you had been able to be re-elected?

JAMES E. HOLSHOUSER JR.:

Yes, I think so. I know I agreed to co-chair the drive for the constitutional amendment on second terms, partly because I felt like it would keep the governor from being a lame duck while still in office. That goes right over into activities with the party. If the governor is getting ready to run for re-election, he probably has a stronger tie, although he probably shouldn't, if he faces a primary in particular. If he doesn't that's a different matter. But you don't find many governors or many presidents who don't control the party at the level that they are involved in. Now sometimes you have states where there's no governor and have a United States senator. They'll be the ones to control the party, although it's been my experience that people in Washington don't want to be bothered with the state party.

JACK FLEER:

Was that your experience with Senator Helms?

JAMES E. HOLSHOUSER JR.:

Yes. Some of his supporters in-state were involved and interested, and have been since that time. At the same time, the role of the party has been diluted so badly by the formation of PACs—and when I say PACs I mean political PACs, not R. J. Reynolds

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PACs. David Broder has written column after column on how the important parties are not being treated right, and that the system is being hurt by that. I think he's right, and that has carried over into the Congress with the change of the seniority system. The party as a vehicle in Congress quit being nearly as effective, because now you've got umpteen zillion caucuses up there and they've all got different agendas. So trying to build a consensus is just a lot harder than when Sam Rayburn and Lyndon Johnson were running things.

JACK FLEER:

You mentioned PACs, and you were talking primarily about what you referred to as political PACs. I guess this means PACs of political leaders rather than PACs of industrial groups or labor unions, or whatever they might be. Do you think that's become an important factor in North Carolina politics. Was it whenever you were governor?

JAMES E. HOLSHOUSER JR.:

It was nonexistent when I was governor; it's very important today. I mean, you see the president pro tempore of the senate, you see the speaker of the house, you see several members of the house and senate having separate PACs. They get people to give money to that, which they can either use in their own campaigns or in somebody else's campaign. It definitely allows money to become the vehicle through which individuals gain political power within the spectrum through which they are working at the moment. I suspect it's much easier now for a political leader in the legislature to stay in that position of leadership than it ever has been in years past. Of course, we had traditions for a long time—you weren't speaker but one term, for example. That changed during Mr. Ramsey's time, and I think it's changed for the worse, probably.

JACK FLEER:

Many people say it's changed at least in part—maybe a major part—because the governor can now serve a longer term.

JAMES E. HOLSHOUSER JR.:

That's when it happened. When gubernatorial succession came in the legislature decided if they're going to do it on the executive side we ought to do it on the legislative side, or we'll be at a disadvantage.

JACK FLEER:

But you said it may well have been for the worse. Could you talk about that a little bit?

JAMES E. HOLSHOUSER JR.:

Well, I believe that to the extent we've moved away from a true citizen legislature, it's removing the possibility for a great many people who would be good legislators to be able to run and serve. It's not just what we've been talking about. It's also the length of terms and the amount of service between them. I was talking to a legislator this past week, and I think she said she was on thirteen interim committees and commissions. She was spending about half of every week in Raleigh.

JACK FLEER:

When the legislature is not in session, you mean.

JAMES E. HOLSHOUSER JR.:

That's right, when the legislature's not in session. I mean, you can't hold a regular job back in your home county and be in the legislature anymore. Most lawyers can't do that. When I was in the legislature, I went to Raleigh five months and then was home the rest of the two years, with rare exceptions. We had probably twenty-five percent of the legislature who were lawyers. Right now we don't have enough lawyers to staff a judiciary committee, even though you've got bill drafting going on and even though you've got draftsmen to help individual legislators who want to write amendments. When you've got someone sitting down, scribbling one out and sending it up on the floor on the spur of the moment or in committee, the absence of lawyers who

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have an understanding about the law and the general statutes causes the legislative process to suffer. That's my own particular perspective on it. But it's keeping out not just lawyers, but a lot of people who would be good senators. I doubt, for instance, that Archie Davis would have felt like he could have afforded the time to be in the senate as he did when he ran back in the 1960s. And so you end up having legislators who have to fit a certain sort of generic situation career-wise before they can run for the legislature.

JACK FLEER:

Have that dispensable time that they otherwise would not have?

JAMES E. HOLSHOUSER JR.:

That's right. It doesn't mean that there aren't some good people there, and there are certain companies that encourage employees to run if they want to. In fact, that's part of not only their need to be publicly involved but it also means that their approach to things gets heard. You have teachers who run and take leaves of absence; you have university employees who run and take leaves of absence, and some of them are very articulate. Like Paul Luebke from Durham, who teaches over at UNC-G. His philosophy and mine are not the same at all, but to the extent that the legislature needs good minds, that's an example of a good mind.

JACK FLEER:

In terms of the legislature's relationship with the governor, many would argue that this makes the legislature a more effective partner with the governor. In that sense, it provides a kind of restraint on excessive executive power. Is that a fair statement?

JAMES E. HOLSHOUSER JR.:

It could be. It's a little. It may be that my whole thinking about this is simply an intellectual effort to hold back the wave of the future. Modern society has gotten much more complex. It may be that volunteers can't deal with those problems anymore; that there's not enough time to stay up to snuff. Some of them—you take Betsy Cochran. She doesn't have a job she has to go to everyday, but she works almost

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full time on issues and keeping up. That's the kind of legislator who's just invaluable. But then you only have so many of those. The legislature has not changed in one regard; about ten percent do most of the work. That's the way it is in most organizations. That probably isn't going to change, regardless.

JACK FLEER:

Let's sort of reflect on this idea regarding the role of the governor and his relationship with the political party. Has the Republican Party in North Carolina evolved sort of the way you anticipated it would when you were governor, or has it not done as well—or gone in different directions—from what you thought?

JAMES E. HOLSHOUSER JR.:

Let me back up on one thought. I think the Republicans have not accepted the Democrat tradition of having the governor simply name the state chairman. Legally it's done by the state executive committee. But when Jim Hunt says who he wants to be chairman, that's who becomes chairman. Jim Martin and I both had to fight for our selections as chairman, and that's probably just the difference in the backgrounds. How the parties are run. Moving on to your other question, it's a little hard to know… [Recorder is turned off and then back on.]

JAMES E. HOLSHOUSER JR.:

Anybody who thinks about it for very long realizes that if you're going to have a viable party, you've got to have a big enough umbrella to have varying philosophies under that umbrella. If you don't, you're just not big enough to win. We still have a coalition put together that's not that different than it was in the sixties and early seventies. It's just gotten larger. You've got the business Republicans. You've got the country club Republicans—and there's a lot of overlap there. You've got the Populist Republicans who grew up in the mountains; and rural Republicans, who have a mixture of Populism and social conservatism. You also have a group of intellectual

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conservatives. I guess if I'm fair I say that it concerns me when either party gets dominated by intellectuals who never run for office, have never served, and who haven't had to go through the ordeal of trying to get elected and trying to build consensus for ideals as opposed to just getting out and fighting for them. There's a lot more subtlety in how you build consensus than trying to beat the other guy on the head with your ideas. That makes challenges in both parties. One of the reporters told me one time that the Democrats have their lettuce pickers and the Republicans have their Neanderthals, and it always makes for interesting conventions. I guess that's probably true.

JACK FLEER:

And good reporting, probably. [Laughter]

JAMES E. HOLSHOUSER JR.:

That's right.

JACK FLEER:

Has the party made as much progress here in the 1990s as you would have expected in the 1970s?

JAMES E. HOLSHOUSER JR.:

More, I think. I always thought the hardest thing to do would be to get a majority in the legislature. Frankly, when I was talking with the state chairman about one o'clock in the morning on election night in '94 and he told me we were going to take the House, I just really couldn't believe it. I told a lot of people in Raleigh that I thought that was a much more important step as a party than if I had been elected governor. It might not have happened if I had not gotten elected governor. You never know about these things. I think the state is a two party system. It's not to parity on registration yet, but that's about the only place. The delegation in Washington is split right down the middle, while we've got two Republican senators now. The fact that the state can elect Terry Sanford and Jesse Helms to the Senate says that it's still a state that you can't exactly put

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your finger on. I think that's sort of intriguing, because it's still up for grabs for idealists all the time.

JACK FLEER:

And that's healthy for the state?

JAMES E. HOLSHOUSER JR.:

I think it is.

JACK FLEER:

Certainly part of what you hoped for when you started building the two-party system back in the 1960s?

JAMES E. HOLSHOUSER JR.:

That's right, because it wasn't to build a one party Republican state, it was to have a state where people got to listen to different ideas. I have to admit, though, that listening to them in thirty-second commercials is not the best way to get them. I also know that as much as that gets criticized, if you do a thirty-minute talk to the people—you look at the Nielsens on that and the numbers go way down in terms of people who will watch that long.

JACK FLEER:

That's amazing, and somewhat disappointing.

When you look back over your administration as Governor of North Carolina, how much were you in control of the administration?

JAMES E. HOLSHOUSER JR.:

Well, it's a little hard looking back to know for sure. We did some things that were deliberately set up to keep control programmatically in that we had what we called a policy council where all the legislative proposals had to sift before they went to the legislature. The budget, too. I think I talked about this before, but I'll get on with it and say that I might take a different view today, but probably not. I took the view that these people [Council of State members] were constitutionally elected by the people, and they were the ones that had constitutional responsibilities. The place where that runs into joint interests is with the Department of Public Instruction, because you can't be governor

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and not have an interest in public schools. And yet the superintendent is constitutionally elected and the governor appoints the state board. You've got this crazy government system that's—well, dysfunctional is the wrong word, but you work against that system instead of having that system help you. In terms of the people in the cabinet, I think for the most part the people worked as a team. You certainly had people with different ideas. Jim Harrington, for example, thought the inventory tax ought to be repealed. People in his department thought that, and frankly I thought that, too. But I told him I didn't want him over there in the legislature lobbying for that because we'd taken a firm ‘no tax repeals’ stand. We just sort of stonewalled the whole thing for fear that the legislature would start trying to decide about taking tax cuts. The first thing you knew the whole budget's blown. Since the Advisory Budget Commission had recommended some onetime tax rebate, it was a live issue at the time. We had four different secretaries of transportation in four years, which is not a good way to do things but is the way things worked out. I suspect that people were hired that the governor's office didn't know about. That probably still goes on today. Joe Pell is probably the best of anybody of keeping his fingers on that. You've got to have a certain amount of confidence in the people that you put in cabinet positions. At the same time, none of ours had ever had any government experience in the state government. It probably meant that our administration was more cautious than most administrations, and less aggressive in some ways. Frankly, when I look back at accomplishments that you can check off, it's remarkably good given the fact that we hadn't been there and we were trying not to make any more mistakes than a naive new administration had the potential to. We didn't turn the secretaries loose with everything, so to speak.

JACK FLEER:

You mentioned the policy council, and then the sort of control in so far as you could over appointments. Would those be the two principal mechanisms that enabled you to maintain some kind of control, or were there others?

JAMES E. HOLSHOUSER JR.:

That's the main thing. We had a cabinet social about once a month that'd rotate from house to house. Never had it at the mansion as I recall. Each cabinet member would be host. I think that was very important, looking back, in terms of building that sense of camaraderie and teamwork. So it wasn't a sense of control—governor's office versus the departments—as much as it was everybody feeling like they were part of the same team. You didn't have circumstances for the most part where a cabinet member says, ‘I think we ought to do this,’ and the governor saying, ‘No, we're not going to.’ It was pretty much—it wasn't an administration that had seriously different points of view. So there wasn't a lot of pull and tug. You had some things on personnel that were either changes that needed to be made or cabinet members who didn't feel the time was right for them.

JACK FLEER:

What about beyond the administration to the state government? You were obviously in a position as the first Republican governor to come into a governing structure—a bureaucracy, if I may use that term—where people had gone about their business to the tune of Democratic governors. Did you feel that you could control that larger government?

JAMES E. HOLSHOUSER JR.:

Well, I went in nervous about that because of an experience I had had in the previous four years sitting in the Oval Office. President Nixon would give a direct order to the secretary of HEW, and her field man in Wilmington six weeks later would say just the opposite. That sort of reminded you of Eisenhower's statement that ‘You push the

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button on the desk and wonder if it goes anywhere; if there's a wire under there or not.’ I had the good fortune of having at least the key department and division heads have a chance to see me in the legislature. I knew most of the budget people on a first-name basis. I think there was a lot of nervousness, despite the fact that I'd been to the state employees' convention, and did the same way with the NCAE folks. I did more than just put in an appearance. The day after the election at the news conference I told the reporters that state employees—unless they had gotten their jobs through total politics—didn't have anything to worry about. I had one of our economic developers tell me somewhere in the third or fourth year that he was in New York on an industry recruiting trip on the day of the election. Well, his wife called him about one o'clock and said, ‘You better get your tail home. We've done elected a damn Republican!’ [Laughter] So there had to be a certain amount of that. Newspapers had these stories about state employees running out to the parking lot the next morning and tearing the Bowles' stickers off their car. There was some interesting things about that. But for the most part what you found was that people generally have a regard for the office of the governor. That was true with the legislature and Council of State as well. Folks tend to—because of that respect for the office, folks tend to sort of try to get along. I heard after I left office that people in the ABC system were lining up raids to do on places where I had been the night before, so that it looked like I had put them on them, so to speak. Of course, that was also influenced by the fact that the guy who headed up the ABC board was a Holshouser from Rowan County. He had been the chairman of the State Association of ABC Boards, and they had recommended him. And I said, "I am not going to appoint someone named Holshouser. He's got to be kin to me. You prove to me

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that he's not close kin and maybe I'll look at it." So he got a genealogist, and showed that the closest relative we had was the original Holshouser who came down from Pennsylvania in 1750. That was the only common connection. So I went ahead and appointed him. He did a good job, and looking back, I wish his name hadn't been Holshouser. [Laughter] But I think those situations were exceptions rather than the rule. I think most people tried hard to do their job. We weren't out there trying to crucify any one department or division. There wasn't any reason. You invariably have the hassles that you go through in terms of moving people out who had been political hacks, so to speak, in various departments. It's amazing to me. Some cabinet officials were so adept at not only doing it without ripples on the water, but also in a way where you respected the other person. Gave them time to find another job; helped them find another job. That's probably one of the most important attributes for somebody who's going to head up a state department; that is to have an ability to manage that particular transition.

JACK FLEER:

You said at one time that everyone should be subject to summary dismissal by a president or a governor, although you do see a down side to this. Could you talk about this a little? You said this in an interview that you did in a volume called, On Being a Governor. Could you talk about that?

JAMES E. HOLSHOUSER JR.:

Well see, at the time I was in the legislature we had a state employees' personnel system that had appeals from dismissals that ended up in the governor's office. There weren't many of those cases that got hauled into court, because there weren't any rules. That changed during the time I was governor. I think that was a mistake in that despite the fact that it sounds logical. None of those people got elected by anybody. When the governor gets elected, you may have people not deliberately disobeying orders

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but just dragging their feet all the time. You can't just document them as being a worthless employee who barely gets to work and that's all. Those cases are easy. But there are cases over here where you've got a dedicated employee—it's easy on the other side. It's just the ones in the middle that are always hard. I've just come to the conclusion that public schools, state universities, state government—I've concluded that it's all—it's not necessarily bad, but it keeps the system from functioning as it should. And it may well be one of those things that if you did away with it, then in thirty years you'll want to go back to it. I don't know.

JACK FLEER:

Let's in these final minutes reflect on the legacy of the Holshouser administration. What do you think, looking over twenty-some years, are the most important accomplishments of the Holshouser gubernatorial administration?

JAMES E. HOLSHOUSER JR.:

Well, the passing of years probably gives you a different perspective. If you'd ask me in 1977, I would have said the Seven Year Transportation Plan was one of the most important things we did. I find if I look at what's out there today in terms of transportation that even though it's on paper and more public than it was in 1972, that you've got umpteen zillion projects in that plan that can't be funded anytime in the next ten years. That's exactly what we'd been trying to get away from. For awhile I thought it worked pretty well. It's hard to say how it has changed and who's responsible. I have a feeling that what's happened is that legislators and DOT members, influential campaign people, want a project. Rather than saying no, they just put them into an early phase in the plan. This isn't necessarily bad because eventually it's got to start some place. But when you put more in the front than you're ever going to be able to put out the back, that leads to a lot of disillusioned people. So I discount that. Rural health centers have

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probably been a good part of something we started. They're still out there helping folks. They changed. We have had a lot of local hospitals close. That's made them more important. You've got HMO's getting put together all over the place, and you've got regional hospitals, and this makes regional health centers potentially more a wing of a regional hospital than they were intended to be. But they are out there, anyway, and I think they've done a lot. Some of the environmental stuff we did has obviously lasted; the Coastal Area Management Act was important, and I've always agreed with the decisions of the commission staff. I think it has certainly helped us protect the coastline. Every governor can look back on the industry that they brought to the state, and every governor builds on what the previous governor did. We had the first million dollar investment—capital investment for new industry, which looks small by today's standards and that is good for the state that it does. I guess I feel good about the fact that we came out of four years with polls showing that they thought the administration had not only done a decent job, but it had also been pretty clean. Sometimes things happen beyond your control. We've seen that in Washington with people in the administration just doing bad things. It taints the administration to a certain degree, so sometimes you're lucky if you don't have anything happen. That's particularly true when the talent pool from which you're selecting is pretty small. I still feel pretty good about that, and I'm always pleased that a number of people still come up to me and thank me for my service to the state.

JACK FLEER:

You mentioned things that motivated you to be governor—and things that you sort of wanted to accomplish—in an earlier interview. You mentioned that maintaining the university system was a very important goal that you had. And

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obviously, you did maintain it. Was that a difficult thing to maintain during your term? Was it under duress?

JAMES E. HOLSHOUSER JR.:

Let me say one thing to follow up on previous things. I think North Carolina has not been plagued like other states. I think we've had a history of good government, Democrats or Republicans, and that's been helpful for that state. It probably—when you've had somebody who has had a decent four years with little scandal, it gets easier to build on that. Now, it was very clear in documents that came out with the highway contractors during Jim Hunt's term that some of that had been going on—price fixing—during my term, and Bob Scott's term before me; maybe even in the term before him, to be honest. It didn't look to me like it had much to do with the administration; there wasn't anything showing state officials were involved in any of that collusion. That was something that was an exception to the rule at that time. Now, let me come back to the question you asked.

JACK FLEER:

The question I asked was that whenever you were reflecting about what you wanted to accomplish as governor, you wanted to maintain the university system.

JAMES E. HOLSHOUSER JR.:

I'm sure I said in an earlier interview that I thought my involvement with the creation of the university in 1971 was more important than anything I did as governor. I may be overestimating my own role in that, but that's how I felt. I thought it was good from the standpoint of the university that you had this governor from 1972 through 1977, those first five years, somebody that knew not only the history of why it was created, but knew some of the nuances and players, and pitfalls. Even though we lost the battle on the East Carolina Medical School, being able to get through that four year period with the university structure intact. I'm not sure if I look back in 1976, I did a television speech

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right before the election in 1976 that talked about what we'd done, and I don't remember saying a whole lot about that. But I do expect that that was one of the most important things that happened for the long term of the state. It helped to provide some underpinning for keeping it on solid ground.

JACK FLEER:

Maybe I'm reading you wrong, but are you implying that there were efforts to try to undermine that system?

JAMES E. HOLSHOUSER JR.:

No, I don't think there were. Part of that was in sort of using the pulpit with the legislature; you know, saying ‘Let's give this thing time to work. Don't be meddling around like we've done for the last decade or so.’ I may have been seeing a shadow that wasn't out there, but it had been so frequent a problem since I had been involved that I thought it could be.

JACK FLEER:

And I know that you and others who were involved in getting that legislation certainly had to fight hard to get that legislation in the earlier General Assembly.

JAMES E. HOLSHOUSER JR.:

It was a very difficult. It's still just a miracle that that legislation passed, because there were just so many competing voices there. If you had a concept that you were trying to hold in place and yet build a consensus behind it, it meant that you had to have your core theme but also you had to keep fringe issues mediated. As long as you could keep mediating those issues rather than losing the core, you were okay. I still think that will be one of the most important chapters in the history of the state.

JACK FLEER:

You mentioned that you'd lost the East Carolina issue, talking about the medical school at East Carolina. Did you see that as an attack on the core of the university system?

JAMES E. HOLSHOUSER JR.:

Yes. Yes, although you had to put an asterisk by that before calling it an attack. That was something that predated the creation of the single university…