Clayton Yeutter

Position Held: Professor, Agricultural Economics, UNL, 1960s; Chief of Staff, Gov. Norbert Tiemann, 1967 - 1969; Secretary of Agriculture, President George H.W. Bush, 1989 - 1991

Interviewer: Jim Barr

Interviewer: Dayle Williamson

Associated NRDs:



MR. WILLIAMSON: -- Clayton, and, gosh, we've got two young people in here that set us up. It's really something for two old Nebraska farm boys to be in a place like this, I tell you.

MR. YEUTTER: It's really great. I can barely hear you, Dayle, so I hope they can adjust things so --

MR. WILLIAMSON: Oh, you can't? Okay, they'll turn it up a little bit, okay. Hearing any better?

MR. YEUTTER: Still about the same. MR. WILLIAMSON: I'll try again. Jim's going to do most of the interview, but I was going to start out here with a few things.


MR. WILLIAMSON: And, gosh, thanks so much for taking the time to do this. This is wonderful. Now, I got cut off. Can you hear me?

MR. YEUTTER: I can hear you fine.

MR. WILLIAMSON: Okay. Jim's been leading this effort and several of us that were around at the time of the NRDs, but we always start off, and would you give some of your early history, where you came from in Nebraska and your work at college, and then I'm sure you were in the Ag/Ec Department at the time you enthused us about the NRDs, so I'll ask you about that. It wasn't about the NRDs, but about multiple government organizations. So, kind of give us your background, would you please?

MR. YEUTTER: Sure. I was born and raised on a farm in west central Nebraska six miles north of Eustis, 12 miles south of Cozad, in Dawson County, Nebraska. It was a pretty typical Nebraska farming operation with corn, wheat, and beef cattle, basically. I grew up there and did my undergraduate work at Nebraska, majoring in animal science with a minor in agronomy. And then, since the Korean War was on, I joined the Air Force and spent about five years on active duty, followed later by another 20 years or so in the Air Force Reserve. After finishing my active duty tour in the Air Force, I came back to the farm, took over total management responsibilities from my father at that time, increased it in size, and developed it quite a bit over the ensuing three-year (1957-1960) period. Then Jeanne, my wife, persuaded me that if I were ever going to obtain additional education, I'd better get at it. So, after visiting potential major professors in colleges of agriculture throughout the Midwest, I finally decided to combine a Ph.D. in agricultural economics with a law degree. At that time there were only two of us in the United States who had ever even attempted the PhD/J.D. combination. One was Neil Harl, who was then doing the PhD at Iowa State and the J.D. at University of Iowa, and I was doing it at Nebraska. Since that was a legal/economic academic program, I began to get involved in water issues. That, of course, leads us to today’s interview. I'll mention some names now that you all will remember from way back then. My major professor was Dr. Loyd Fischer at the UNL Department of Ag Economics, whose area of interest was resource economics. Loyd, who was an undergraduate at about the same time I was some years earlier, persuaded me that I should do my Ph.D. in the resource economics area with a focus on water issues. We ultimately decided I would do my Ph.D. dissertation on water law and water administration in the central United States with Nebraska being one of the states in that study. I eventually published a 500-page Ph.D. dissertation covering many of the issues that are still important today. Some of the conclusions reached in those years have since then proven relevant in “the real world” and some of the follow-up recommendations have proven to be prescient. While I was working on these degrees, I also began to do some extension programs at the University of Nebraska, with one of my colleagues at that time being Deon Axthelm who was a true expert in Nebraska water issues and a wonderful colleague. Deon and I began to work together on extension programs in the water area, and that brought us into contact with Dayle Williamson and Warren Fairchild, who was then Dayle’s boss at the Nebraska Soil and Water Conservation Commission. That effort also brought us in contact with people like Senator Maurice Kremer in the Nebraska Legislature and Ralph Raikes, a prominent farmer who was very interested in all this, and, of course, Dr. Fischer as well. So we had a talented, committed crew of people who began to confront some of Nebraska’s water problems, way back in the '60s.

MR. WILLIAMSON: That's a great background and as I recall, you were giving a seminar out at Ag Economic Department, and Warren Fairchild said, “Dayle, we've got to go out and hear Clayton, because he's talking about” -- I think you were focusing quite a little on all the multiple districts in California, how they're overlapping, but maybe it wasn't California, but we decided, boy, that's really happening in the state of Nebraska also, because we had conservancy districts overlapping soil and water districts and drainage districts that weren't active, and so on. So, can you say -- I'm sure that was part of your studies at that time.

MR. YEUTTER: It was, as a matter of fact, because my doctoral dissertation focused on Nebraska, Kansas, Iowa, and Colorado. And every one of those states had this problem of duplicative, overlapping regulatory entities (not just in water , but in a whole host of areas). It was getting worse by the day, so the Midwest and Western states all needed to confront this issue. Some did so; some did very little. And nobody did it with the imagination and the vision that Nebraska demonstrated before we were through.

MR. WILLIAMSON: Well, that's great. I think I'll turn it over to Jim now. He's going to talk about your next move as you worked in the Governor's Office and some of the things that happened there and the great support we received from your boss, Norbert Tiemann, and yourself.

MR. BARR: Well, I might start even earlier than that. I think, as I recall, I came back from the Air Force about the time they had repealed the state property tax, and then maybe there was a petition drive and all of that, and as I recall, you were kind of leading an education effort there.

MR. YEUTTER: Yes, I was in the middle of that tax battle which as, you know, was a huge fight within the state of Nebraska. It primarily pitted our upper income citizens against the farm population, which had long felt that it was
bearing an inordinate share of the state’s tax burden. The Nebraska Farm Bureau and other agricultural organizations all wanted reform of our tax system and they asked me to draft LB797 which would have been one of the first broad-based income tax regimes in the U. S. As you may recall, we (the Farm Bureau and a host of other agricultural organizations and I) lobbied LB797 through the Nebraska Legislature, securing its passage by a one-vote margin. That, of course, set off the upper income folks who commenced a referendum signature drive to have LB797 put to a vote. That precipitated a counter drive by the Farm Bureau, via an initiative petition, to bring all state property taxes to a vote. Both passed in the next election! That meant that in the Tiemann administration we were suddenly faced with the prospect of having no tax revenue coming to the state except for sin taxes, and they weren't going to last very long. We received a lot of national publicity at that time (some humorous, some not so humorous) for being the only state in the nation without a tax system! And, of course, that necessitated a special session of the Legislature to deal with the issue. By then some of us had put together a combination sales/income tax proposal, which by a substantial margin passed and which has in my view served Nebraska well in the succeeding half century.

MR. BARR: Yes, and as I recall, you were kind of deeply involved in the public education program during that -- prior to the election, as I recall, is that --

MR. YEUTTER: Yes, because by that time I had finished my doctoral dissertation. This was in 1965, and I immediately joined the University of Nebraska faculty, (the agricultural economics faculty) in a combination teaching/research/extension position. Much of my extension activity at that point was on taxes, as a result of the major controversy we just discussed. But I also continued to work on water issues, and I carried that interest into the Tiemann administration when I became the Governor’s Chief of Staff (in January 1967). Nobby Tiemann, having an agricultural background, and I were totally on the same wavelength on all of these issues. As you may remember, he had been an assistant county agent years before in Dawson County, my home area. So I first got to know him during my 4-H days.

MR. WILLIAMSON: Yeah, he worked for Harold Stevens, and you were one of his -- probably a good 4-H student.

MR. YEUTTER: Yes. This is self-serving, but I suppose I was Harold Stevens' first 4-H star, if you will.

MR. WILLIAMSON: All right, well --

MR. YEUTTER: I was the first Dawson County 4-H'er to have won a lot of awards at the State Fair and Aksarben in showing beef cattle, in beef showmanship, livestock judging and several other 4-H programs.

MR. WILLIAMSON: You set the standards high in Dawson County. That was always great. I was a county agent way back then, too.

MR. YEUTTER: Where were you then?

MR. WILLIAMSON: I was in Jefferson County. I was the county agent down in Jefferson County, so I knew Harold really well. He always spoke up well in all of our meetings.

MR. YEUTTER: He was a dynamo. If there were a better overall county agent in the United States, I'm not sure who it would be. He just did a phenomenal job in Dawson County.

MR. WILLIAMSON: That's for sure. MR. BARR: What were some of the other water issues you worked on while you were up at the University?

MR. YEUTTER: Well, most of it was resource organization, if you will, because that fit within my doctoral dissertation. Issues such as how do we handle water law and water administration more efficiently and effectively than we have been? There was then so much controversy, and so much ambiguity in water law, so much regulatory overlap, so much inept administration. The list of shortcomings just went on and on, not just in Nebraska, but everywhere. So this was an opportunity to say: “There has to be a better way to do this. Let's figure it out.” What I used to say in meetings around the state, (Deon Axthelm did so as well as did Dayle and Warren), is that water does not flow down county lines! The problem was that we, and many other states, were making regulatory resource decisions (even water allocations) on a county-by-county basis or state-by-state basis, Water doesn't flow down state lines any more than it flows down county lines. That led, of course, to the ultimate conclusion that within the U.S. we ought to be regulating water on a watershed basis. That's the way water flows! And we finally got there. That really became the foundation of the Nebraska regulatory structure, the most innovative, and most sensible, of any in the U.S.. MR. BARR: What were some of the issues in the gubernatorial -- '66, I guess it was, gubernatorial race, and did any of them touch into agriculture and water and that sort of thing?

MR. YEUTTER: I don't recall that water became an issue in that election at all. There was much more attention on taxes and other controversial issues like state aid to education. We also faced major organizational issues within state government. After the 1966 election, Governor Tiemann asked me to work on reforming the Department of Institutions in Nebraska. And, as you may recall, we also created a Telecommunications Commission at that time, as well as a Department of Economic Development. There were other actions as well (all taken in collaboration with the State Legislature) to modernize the entire structure of state government. And we worked awfully hard at that. I remained on the Governor's staff as his Chief of Staff for only two years, and in those two years we passed a whole lot of legislation that has been in the forefront of governance in Nebraska ever since. Fortunately, all that Executive/Legislative activity seemingly has met the test of time in Nebraska. I don't believe there is a single law passed during the Tiemann administration that has since been repealed. Very few have been amended significantly.

MR. BARR: The only thing I remember offhand is the State Office Planning and Programming.

MR. YEUTTER: Is that right? MR. BARR: Yeah, they kind of switched it around a little bit, but --

MR. WILLIAMSON: That was because of the guys in

MR. YEUTTER: Yeah, no doubt. MR. WILLIAMSON: No, I'm just kidding, Jim Barr, and W. Don Nelson, and Doug Bereuter.

MR. YEUTTER: Warren Fairchild and Dayle Williamson did wonderful jobs in the Department of Water Resources, and they were great allies in all of our institutional reform efforts. In retrospect I'm not sure whether they were Axthelm/Yeutter allies, or we were Fairchild/Williamson allies. Either way, the four of us worked mighty hard on all these water issues, with a lot of help, incidentally, (as Dayle would also suggest), from Senator Kremer. We could never have done all this without exceptional Legislative leadership on the part of Maurice Kremer.

MR. WILLIAMSON: That's for sure. He was our hero on the legislative side.

MR. BARR: Do you have any other recollections about the legislative activity and water during those years?

MR. YEUTTER: Not particularly. In general, all of us had done a good job of laying the groundwork for change by the time Senator Kremer was ready to move things along legislatively The senator was a circumspect, cautious, conservative individual who simply did not move a legislative proposal forward unless he was comfortable that he had a first rate work product to sell to his fellow legislators. That meant the public groundwork had to have been laid for that bill to become law. Hence, on water, great credit goes to everybody who worked so hard in seminars and symposia around the state, in writing papers and op-eds, and just doing whatever was necessary in laying the groundwork for a legislative package on water law and is regulatory administration. Finally, the public support was there. I don't recall what the votes were on Senator Kremer’s reform bills, but you could easily find that in the record. My recollection is that they passed by substantial margins. By the way, we sensed then that groundwater was going to be a major issue in the future. I emphasized this in my doctoral dissertation as well. Certainly surface water administration needed to be improved; people can readily see that surface water does not flow down county lines. But people cannot see where groundwater is flowing, or where it is stored. Dayle and Warren Fairchild had far more expertise in that area than did I. They knew that even though Nebraska was sitting on the finest groundwater aquifer in the country (and maybe the world), it might not last forever. In time, as deep well irrigation expanded in Nebraska, there might well be a need for groundwater regulation, in addition to surface water regulation. If and when that time came, it would be advantageous to have an institutional structure that would make reasonable and rational regulation feasible. I believe Nebraska’s foresight on groundwater regulation was, and is, essentially comparable to what was achieved with surface water.

MR. BARR: One of our supporters has been the University of Nebraska Water for Food Institute and one of the questions that they are concerned about is, is there a way -- well, one is that natural resources districts were established in Nebraska. There's been interest in other states, but it's never materialized in other states. That's -- and I was going to get any kind of thoughts you might have on why it might have succeeded in Nebraska and not in other attempts.

MR. YEUTTER: In these situations, it's always a question of leadership. Fortunately, we had a lot of very effective leadership at a crucial point in time, and that is what made this legislation possible. The legislation itself and its administrative structure have worked well, perhaps better than what is now in effect in other states in the U. S. Personal leadership was at the heart of Nebraska’s effort. That included leadership from the University, (especially from Deon Axthelm and Dr. Loyd Fischer), the Nebraska Soil and Water Conservation Commission (meaning Warren and Dayle), from the Governor, from key legislators like Maurice Kremer, and from key farm organization leaders like Ralph Raikes. On policy issues like this timing is everything, and it all came together in the 1960s. That proved to be the right time to move ambitious, aggressive water legislation through the Nebraska Legislature. One reason for that is that not much had happened in any of these areas in the preceding decade, in the '50s. That was a very quiet time, with very little in the way of passage of controversial legislation, or even uncontroversial legislation. It was a dead period, not only in water, but in a lot of other areas. That began to change in the '60s. Nobby Tiemann recognized the need for ambitious change and he led that charge in his campaign for governor and then in his governorship. The state was ready for change. As you know, Nebraska traditionally is a very conservative state, so passing controversial legislation is never easy. But in 1967 the time was ripe for a hard-charging, young, aggressive governor to select a number of these issues and do something about them. Water was ripe for reform and water made the Governor’s priority list. And that's what really brought it about. We had a lot of good people working on water and other key issues, and a lot of leadership in the state, a lot of folks very committed to reforms in this and other areas. That coalesced in several major legislative achievements in the Tiemann administration, something that just hasn't happened in many other states. In my view, the chief explanation is lack of leadership either in the legislature, the governor's office, or both, in many states. Having a unicameral legislature helped in that regard. As you know, nobody else has a unicameral. Many state legislatures are just much, much larger than Nebraska's, and it's hard for water to climb to the top of the priority scale in that situation. Many legislatures are also urban-dominated, with minimal interest in rural issues. In addition, until the last 20 years or so, we haven't seen many aggressive governors emerge throughout the nation in either political party. Fortunately, that's begun to change. We're seeing some first rate governors emerge and have over the last 20 years or so, maybe even 30 years. But nothing happens on water law reform unless there's a crisis (such as drought in the Far West) or personal leadership by either the legislature or the governor of a particular state. Until recently, we just haven't seen much of that. MR. WILLIAMSON: I was going to say, Clayton, it's just -- it's really something to think back at the Tiemann administration and how strong the Governor supported this with all of the other things that were on the table to get done at that time, so it's, you know, it probably would have been really easy to let the water issue drop by and do some of these other things, but it's really great that this happened as we look back.

MR. YEUTTER: It is. Nobby was willing to tackle tough issues (sometimes the tougher the better). We didn't drop anything from his legislative agenda. As you remember, I was one of what was then called the Tiemann Whiz Kids, and we thought through our legislative priorities even during the campaign, so we had a strong idea of what we wanted to accomplish. But the Governor himself had to decide whether to take them all on. And he chose to do so. He did it willingly and actively, with a lot of personal participation and personal arm-twisting on many of the proposals. Few governors have agricultural backgrounds, so it's hard to get them interested in a subject like water. But it wasn't hard to get Governor Tiemann interested. He came from the northeastern part of the state which gets more rain than we get in Dawson County, so he didn't have as great an interest in irrigated agriculture as some of the rest of us did. But a lot of people in Nebraska agriculture recognized then that there'd be a heck of a lot more irrigation wells dug in the state in the next half century than had been dug in the previous half century and from a regulatory standpoint that people would have to pay some attention to that development. And, of course, that's precisely what has happened with the immense development of center pivot irrigation throughout the state over the past half century.

MR. WILLIAMSON: To add a little levity here, Clayton, you know, Governor Tiemann had a lot of us agency heads travel around with him and late-night meetings. And one night we stopped to have coffee and probably a piece of pie in Grand Island on our way back to Lincoln, and so I was paying my bill and the lady at the checkout counter said, “Okay, now I've got to add the Tiemann tax.” And I said, “Oh, okay.” And Nobby Tiemann was right near, and I said, “Well, now I'd like to have you meet the Governor.” And man, I tell you, she just darn near -- I don't know what to say, but it was unreal.(Laughter.)

MR. YEUTTER: That's funny. I have a hunch that happened to Nobby more than once.

MR. BARR: I'm sure it did.

MR. WILLIAMSON: Oh, I'm sure, you know. And I know he had a good comeback for her. He made her feel very comfortable about it. He was such a good guy. But he -- yeah. So, I'm sure she was a little careful after that.

MR. YEUTTER: I bet she was, because I heard that quite often too. As his Chief of Staff, I often got the first onslaught of complaints about controversial actions by the Governor.

MR. WILLIAMSON: Well, Jim, do you have anything else? We don't want to take too much of your time. MR. BARR: Well, I was just going to -- one thing. Or a couple things, one is just, any other thoughts you might have had about being Chief of Staff in the administration, and then just any overall reflections on that period of time.

MR. YEUTTER: Well, sure. It was a great time in the history of Nebraska. Governor Tiemann was terrific and his personal leadership was just off the charts. (He had the best memory for names of anyone I have ever known.) He was clearly one of the most active, vigorous governors in the U.S. at that time, and certainly was one of the most outstanding governors that the State of Nebraska has ever had. I doubt that the four-year time frame of any Nebraska governor has ever produced achievements that would match those of Governor Tiemann in the four-year period in which he served. It was just an incredibly productive time. The proof of the pudding is in the eating. We've had a half century since then, and it's been a most rewarding half century in economic development for the state of Nebraska. A lot of that groundwork was laid during the Tiemann years, so it was a real thrill for me to be his young Chief of Staff at that time. After I spent two years in that post Cliff Hardin, then Chancellor at UN-L, took a great chance on me as a young former faculty member who really hadn't run any major entities of any kind, and made me Director of the University of Nebraska Mission in Colombia, South America. That challenge, which had such a good outcome, laid the groundwork for everything I've done since. So I owe an enormous debt to Dr. Hardin, because he picked me out as a youngster who had only been on the Nebraska staff for a very short time (before joining the Governor's staff), brought me back to academia and took me to Colombia, South America. That assignment was a great learning experience for me, managerially and in adapting to work in a foreign setting. Dr. Hardin then brought me to Washington, D.C. to fill a regulatory post in the Department of Agriculture. Subsequently, I've been in and around Washington for more than 40 years, the exception being the seven years I spent as CEO of the Chicago Mercantile Exchange. But I will never forget those years in Nebraska. I was there just two years on the Tiemann staff. I was not there for the final two years of his administration, because that's when Secretary Hardin stole me back from Governor Tiemann and sent me on to Bogota, Colombia. If we have a minute, Dayle was adding some humor based on the Tiemann tax,so I'll add another anecdote that you might enjoy. You may remember Nebraska had to put in place Daylight Saving Time or lose its highway funds from the federal government. So, we reluctantly added Daylight Saving Time to the Tiemann legislative agenda. That didn't excite me at all for I thought we had much better issues on which to work. I didn't really care whether we did or didn't have Daylight Saving Time. But, I lobbied it through the legislature, though not by a huge margin. Lots of other Nebraskans weren’t much enthused about Daylight Savings Time either. On the very next day after we passed the legislation, my phone rang at 4:00 in the morning. The man on the other end of the line said, “I just want you to know that if I have to get up an hour earlier this morning to go to work, you're going to have to get up a few hours earlier, too. Good-bye.”(Laughter.)

MR. WILLIAMSON: Oh, my gosh. And I suppose you had a few poultry producers calling you and say, “Hey, the chickens don't know when to lay their eggs.”

MR. YEUTTER: I got so many phone calls over Daylight Saving Time I got tired of answering them. I can remember -- another one that I can remember is somebody called and said, “This is un-Christian. Don't you folks realize that God made the sun to shine above us at 12:00 noon Central Standard Time?”(Laughter.)

MR. WILLIAMSON: Oh, boy, that is something. Well, Clayton, no interview would be complete without really commending you for getting -- kind of pushing us and looking at the idea of combining some districts. I can remember your lecture so well that day, and it's funny, that's a long time ago, but I just -- I really commend you for doing all that work and getting us thinking about that.

MR. YEUTTER: Thanks, Dayle. It sure turned out well, I'll tell you that. A lot of the credit for that goes to you.

MR. WILLIAMSON: Well, no. I had to implement them after Warren moved to Washington. So, that was my job. All of you other guys, you were the persons that really had the idea. I just work here.

MR. YEUTTER: You work well. Jim, is that what you need?

MR. BARR: That does it, and I really thank you for doing this and really appreciate it. And thank you again, very much.