Harry Dexter White

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Harry Dexter White (October 9, 1892 – August 16, 1948) was an American economist and senior U.S. Treasury department official. He was a primary mover behind the Bretton Woods agreement and the formation of the International Monetary Fund and the World Bank. A number of sources, including the FBI and Soviet archives, suggest that he engaged in espionage activity for the Soviet Union.

Contents 1 Early life 2 Political activities 3 Treasury Department 4 Accusations of espionage 5 Death 6 Venona project revelations 7 References 8 External links

[edit] Early life

Harry Dexter White was born in Boston, Massachusetts, the seventh and youngest child of Lithuanian Jewish immigrants, Jacob Weit and Sarah Magilewski, who had settled in America in 1885. In 1917 he enlisted in the U.S. army, was commissioned as lieutenant and served in France in a non-combat capacity in World War I. He did not begin his university studies until age 30, first at Columbia University, then at Stanford, where he earned a first degree in economics. After completing a Ph.D. in economics at Harvard University at 38 years of age, White taught four years at Lawrence University in Appleton, Wisconsin. Harvard University Press published his Ph.D. thesis in 1933, as The French International Accounts, 1880–1913.

[edit] Political activities

Outwardly, White was a Keynesian New Deal Democrat, though he had an affinity for fellow-travellers on the Stalinist left. As Senator William Jenner wrote after 1953 hearings on subversion in government departments, White hired Communist Party members and promoted them within the government. As head of the independently-funded Office of Monetary Research, White was able to hire staff without the normal civil service regulations or background enquiries. Some of those he hired had previously experienced security-clearance trouble in other government positions.^[1]

As a dedicated Rooseveltian internationalist, his energies were directed at continuing the Grand Alliance and maintaining peace through a liberal trade regime. He believed that powerful, multilateral institutions could avoid the mistakes of Versailles and prevent another worldwide depression. His political views were close to that of Henry A. Wallace and he was considered a progressive.

[edit] Treasury Department

In 1934, Jacob Viner, a professor at the University of Chicago working at the Treasury Department, offered White a position at the Treasury, which he accepted. Within a few years, White met with John Maynard Keynes and other leading international economists.

After the December 1941 attack on Pearl Harbor, White was appointed assistant to Henry Morgenthau, Jr., the Secretary of the Treasury, to act as liaison between the Treasury and the State Department on all matters bearing on foreign relations. He was also made responsible for the "management and operation of the Exchange Stabilization Fund without a change in its procedures." White eventually came to be in charge of international matters for the Treasury, with access to extensive confidential information about the economic situation of the USA and its wartime allies.

According to Henry Morgenthau's son, White was the principal architect behind the Morgenthau Plan.^[2] The Morgenthau postwar plan, as authored by White, was to take all industry out of Germany, eliminate its armed forces, and convert the country into an agricultural community, in the process eliminating most of Germany's economy and its ability to defend itself if attacked. A version of the plan, limited to turning Germany into "a country primarily agricultural and pastoral in its character", was signed by President Franklin D. Roosevelt and the British Prime Minister Winston Churchill at the Second Quebec Conference in September 1944. However, someone in White's department with access to details of the plan leaked it to the press, and White himself provided an advance copy to Soviet intelligence.^[3] Public protests forced Roosevelt to publicly backtrack. The Nazis and Joseph Goebbels were ecstatic at the revelations, using the Morgenthau Plan as a propaganda coup to encourage their troops and citizens to fight on and to nullify emerging German criticism of the war and arguments for a separate peace with Western governments. White's actions also benefited the Soviet Union, virtually ensuring that the Nazi government or its successors would not negotiate a separate peace with the West. In the end Morgenthau still did manage to influence the resulting occupation policy^[4], particularly through the Occupation Directive JCS 1067, which was in effect until the summer 1947, and which forbade activities designed for economic reconstruction in Germany. In a report on the German situation after 2 years of occupation, President Herbert Hoover would in March 1947 remark:

:'There is the illusion that the New Germany left after the annexations can be reduced to a 'pastoral state'. It cannot be done unless we exterminate or move 25,000,000 people out of it.'[1].

Dismantling of German heavy industry in the west, agreed upon at the Potsdam Conference, continued until 1951.

White was the senior American official at the 1944 Bretton Woods conference, which he and Keynes dominated. After the war, White was closely involved with setting up what were called the Bretton Woods institutions - the International Monetary Fund (IMF) and the World Bank. These institutions were intended to prevent some of the economic problems that had occurred after World War I, and help ensure that capitalism became the dominant post-war economic system. As late as November 1945, White continued to argue for improved relations with the Soviet Union.^[5] White later became a director and U.S. representative of the IMF.

On June 19, 1947, White abruptly resigned from the International Monetary Fund, vacating his office the same day.

[edit] Accusations of espionage

On September 2, 1939 — two days after the signing of the Hitler-Stalin pact — Assistant Secretary of State and Roosevelt's adviser on internal security Adolf Berle had a meeting, arranged by journalist Isaac Don Levine, with defecting Soviet agent Whittaker Chambers. In his notes of that meeting, written later that night, Levine listed a series of names, including a 'Mr. White'.^[6] Berle's notes of the meeting contain no mention of White.^[7]. Berle drafted a 4-page memorandum on the information which he then passed to the President, who dismissed the idea of espionage rings in his administration as 'absurd'. The director of the FBI, Edgar J.Hoover also dismissed Chambers' revelations as 'history, hypothesis, or deduction' as late as 1942.^[8]

On March 20, 1945, State Department security officer Raymond Murphy interviewed Chambers. His notes record that Chambers identified White as 'a member at large but rather timid,' who had brought various members of the American communist underground into the Treasury.^[9]

On November 7, 1945, defecting Soviet spy Elizabeth Bentley told investigators of the Federal Bureau of Investigation (FBI) that in late 1942 or early 1943 she learned from Soviet spies Nathan Gregory Silvermaster and Ludwig Ullmann that one source of the government documents they were photographing and passing on to her and NKVD spymaster Jacob Golos was Harry Dexter White.^[10]

The next day, FBI Director J. Edgar Hoover sent a letter to Truman's Military Aide, Gen. Harry Vaughan, at the White House, reporting information that 'a number of persons employed by the government of the United States have been furnishing data and information to persons outside the Federal Government, who are in turn transmitting this information to espionage agents of the Soviet government.'^[11][12] The letter listed a dozen Bentley suspects, the second of whom was Harry Dexter White. The FBI summarized the Bentley information and in its follow-up investigation on the suspects she named, again included White, in a report entitled 'Soviet Espionage in the United States', which was sent to the White House, the Attorney General and the State Department on December 4, 1945.^[13] Six weeks later, on January 23, 1946, Truman nominated White U.S. Director of the International Monetary Fund. The FBI responded with a 28-page memo specifically on White and his contacts, received by the White House on February 4, 1946.^[14] White's nomination was approved by the Senate on February 6, 1946, but, as Truman later testiified in 1953, on receipt of the information White was 'separated from the Government service promptly', first from the Treasury, and then from the IMF.^[15]

On July 31, 1948 Bentley told the House Committee on Un-American Activities that White had been involved in espionage activities on behalf of Soviet Union during World War II,^[16] and had passed sensitive Treasury documents to Soviet agents. Bentley said White's colleagues passed information to her from him. Bentley also said that White was responsible for passing Treasury plates for printing Allied military marks in occupied Germany to the Soviets, who thereupon printed currency with abandon,^[17] sparking a black market and serious inflation throughout the occupied country,^[18] costing the U.S. a quarter of a billion dollars.^[19]

Bentley wrote in her 1951 autobiography that she had been 'able through Harry Dexter White to arrange that the United States Treasury Department turn the actual printing plates over to the Russians'.^[20] Bentley had not previously mentioned this to the FBI or to any of the committees, grand juries or prosecutors before whom she had testified earlier, and there was no evidence at the time that Bentley had any role in this transfer. Some questioned Harry Dexter White's role in it.^[21]

In her 1953 testimony before Joseph McCarthy's Senate subcommittee, she elaborated, testifying that she was following instructions from NKVD New York rezident Iskhak Abdulovich Akhmerov (who operated under the cover name “Bill”) to pass word through Ludwig Ullmann and Nathan Gregory Silvermaster for White to 'put the pressure on for the delivery of the plates to Russia.'^[22]

This is the only case in which Bentley biographer Kathryn Olmstead concluded that Bentley 'was lying about her [own] role,'^[23] citing historian Bruce Craig's conclusion 'that the whole 'scheme' was a complete fabrication.'^[24]

But Bentley's testimony would later be corroborated in dramatic fashion by a memorandum found in Soviet archives after half a century. In it, Gaik Ovakimian, head of the American desk of the NKVD (for which Bentley worked)^[25], cites a report from New York (where Bentley was based)^[26] from April 14, 1944 (when Bentley was running the Silvermaster group)^[27][28] reporting that, 'following our instructions' via Silvermaster, White had obtained 'the positive decision of the Treasury Department to provide the Soviet side with the plates for engraving German occupation marks.'^[29]

Whittaker Chambers, an admitted former Soviet espionage agent, subsequently testified on August 3 to his association with White in the Communist underground secret apparatus up to 1938.^[30] Chambers produced documents he had saved from his days as a courier for the Soviets' American spy-ring. Among these was a handwritten memorandum that he testified White had given him. The Treasury Department identified this document as containing highly confidential material from the State Department, while the FBI laboratory established that it was written in White's handwriting.^[31] Chambers stated, however, that White was the least productive of his contacts.

[edit] Death

On August 13, 1948, White testified before HUAC. Recovering from a series of heart attacks, he denied being a Soviet agent. Three days later, he was dead of a heart attack at his home in Fitzwilliam, New Hampshire.^[32][33]

Senator William Jenner's Interlocking Subversion in Government Departments Investigation by the Senate Internal Security Subcommittee (SISS) looked extensively into the problem of unauthorized and uncontrolled powers exercised by non-elected officials, specifically White. Part of its report looked into the implementation of Roosevelt administration policy in China and was published as the Morgenthau Diary.^[34] The report stated,

'The concentration of Communist sympathizers in the Treasury Department, and particularly the Division of Monetary Research, is now a matter of record. White was the first director of that division; those who succeeded him in the directorship were Frank Coe and Harold Glasser. Also attached to the Division of Monetary Research were William Ludwig Ullman, Irving Kaplan, and Victor Perlo. White, Coe, Glasser, Kaplan, and Perlo were all identified as participants in the Communist conspiracy ...'

The committee also heard testimony by Henry Morgenthau’s speechwriter, Jonathan Mitchell, that White had tried to persuade him that the Soviets had developed a system that would supplant capitalism and Christianity.

In 1953, Senator Joseph McCarthy and Eisenhower administration Attorney General Herbert Brownell, Jr. revealed that the FBI had warned the Truman White House about White before the President appointed him to the IMF. Brownell made public the FBI's November 8, 1945 letter to the White House warning about White and others, and revealed that the White House had received the FBI report on "Soviet Espionage in the United States," including the White case, six weeks before Truman nominated White to the IMF.^[35]

Although he does not dispute that the FBI sent these and other warnings to Truman, Sen. Daniel Patrick Moynihan wrote in his introduction to the 1997 Moynihan Commission report on government secrecy that Truman was never informed of Venona.^[36] In support of this, he cited a statement from the official NSA/CIA history of Venona that 'no definitive evidence has emerged to show' that Truman was informed of Venona.^[37]

[edit] Venona project revelations

NSA cryptographers identified Harry Dexter White as the Soviet agent denoted in the Venona decrypts at various times under the code names “Lawyer,”^[38] “Richard,”^[39] and "Jurist"^[40]Two years after his death, in a memorandum dated 15 October 1950, White was positively identified by the FBI, through evidence gathered by the Venona project, as a Soviet source, code named "Jurist".^[41] Years later, the Justice Department publicly disclosed the existence of the Venona project which deciphered Soviet cable traffic naming White as 'Jurist', a Soviet intelligence source. As reported in the FBI Memorandum on White:

You have previously been advised of information obtained from [Venona] regarding Jurist, who was active during 1944. According to the previous information received from [Venona] regarding Jurist, during April, 1944, he had reported on conversations between the then Secretary of State Hull and Vice President Wallace. He also reported on Wallace's proposed trip to China. On August 5, 1944, he reported to the Soviets that he was confident of President Roosevelt's victory in the coming elections unless there was a huge military failure. He also reported that Truman's nomination as Vice President was calculated to secure the vote of the conservative wing of the Democratic Party. It was also reported that Jurist was willing for any self-sacrifice in behalf of the MGB but was afraid that his activities, if exposed, might lead to a political scandal and have an effect on the elections. It was also mentioned that he would be returning to Washington, D. C., on August 17, 1944. The new information from [Venona] indicates that Jurist and Morgenthau were to make a trip to London and Normandy and leaving the United States on August 5, 1944.

Another example of White acting as an agent of inflence for the Soviet Union was his obstruction of a proposed $200 million loan to Nationalist China in 1943, which he had been officially instructed to execute^[42], at a time when inflation was spiraling out of control.^[43]

Other Venona decrypts revealed further damaging evidence against White, including White's suggestions on how to meet and pass information on to his Soviet handler. Venona Document #71 contains decryptions of White's discussions on being paid for his work for the Soviet Union.^[43][44]

In 1997, the bipartisan Moynihan Commission on Government Secrecy, chaired by Democratic Senator Daniel Patrick Moynihan, stated in its findings,

The complicity of Alger Hiss of the State Department seems settled. As does that of Harry Dexter White of the Treasury Department.^[45]

Further evidence of White’s complicity as a Soviet agent was gleaned from Soviet archives and KGB operative Alexander Vassilev. In a book by Allen Weinstein and Alexander Vassiliev, The Haunted Wood: Soviet Espionage in America — the Stalin Era, Vassiliev, a former Soviet journalist and KGB operative, reviewed Soviet archives dealing with White's actions on behalf of the Soviet Union. White assisted Harold Glasser, a Treasury executive and NKVD spy, 'in obtaining posts and promotions at Treasury while aware of his Communist ties.' Because of White’s backing, Glasser survived an FBI background check. In December 1941 the Secret Service forwarded a report to Harry White indicating that it had evidence Glasser was involved in Communist activities. White never acted on the report. Glasser continued to serve in the Treasury Department, and soon began recruiting other agents and preparing briefing reports on Treasury personnel and other potential espionage agents for the NKVD. After America became involved in World War II, Glasser received appointments to several higher-level positions in the government on White's approval.^[46]

According to Soviet archives, White's other MGB code names were “Richard,” and “Reed.” In order to protect their source, Soviet intelligence repeatedly changed White's code name.

White's family still protests his innocence.^[3] Stephen C. Schlesinger writes: 'Among historians, the verdict about White is still unresolved, but many incline toward the view that he wanted to help the Russians but did not regard the actions he took as constituting espionage.'^[47]. Robert Skidelsky, in reviewing the evidence, concludes that:-

'A combination of naivity, superficiality and supreme confidence in his own judgement - together with his background - explains the course of action White took. There is no question of treachery, in the accepted sense of betraying one's country's secrets to an enemy. But there ncan be no doubt that, in passing classified information to the Soviets, White knew he was betraying his trust, even if he did not thereby think he was betraying his country'^[48]

[edit] References

[edit] External links

• Broughton, James M. "Harry Dexter White and the International Monetary Fund", Finance & Development, International Monetary Fund, September 1998. 
• Wikisource:FBI Memorandum identifying Harry Dexter White as agent Jurist