Spy Who Tilted Economic Policy

Article excerpt


That Treasury Department official Harry Dexter White was a Soviet agent - perhaps the most important one in the Red-riddled Roosevelt administration - has been well-documented in defector reports and intercepted intelligence cables. Now startling new evidence has emerged on an attempt by White to tilt international economic policy in favor of the Soviet Union during the postwar Bretton Woods Conference in New Hampshire.

The material is contained in an undated, unpublished essay on yellow-line paper buried in a large folder of miscellaneous scribbling in White's archives at Princeton, according to Benn Steil, an economist at the Council on Foreign Relations. According to Mr. Steil, who came across the essay while researching this book, Apparently missed by his chroniclers, it provides a fascinating window into the grand schemes of this intellectually ambitious overachiever at the height of his stature towards the end of World War II.

White, the son of Lithuanian refugees, was the top deputy to aging Treasury Secretary Henry J. Morgenthau. A skilled bureaucrat, White dominated the crafting of international economics, running roughshod over his supposed superior. Morgenthau would lament at one point that White was quick-tempered, overly ambitious, and power went to his head.

White had also been a witting Soviet agent since the early 1930s, according to Whittaker Chambers, who was the chief courier for a wide ring of USSR agents in the FDR administration.

The paper found by Mr. Steil shows the pro-Soviet mindset of White as he represented the United States at Bretton Woods, a conference tasked with establishing a stable global monetary system.

In the paper, White wrote that the biggest threat to the successful establishment of a postwar alliance was U.S. isolationism and its twin brother, rampant imperialism. Such imperialism, he charged, urges the U.S. to make [the] most of our financial domination and military strength and become the most powerful nation in the world.

As an alternative, White would have had the United States share world leadership with the USSR. Such was unlikely, White wrote, because there existed a very powerful Catholic hierarchy who well may find an alliance with Russia repugnant, and other groups which are fearful that any alliance with a socialist economy cannot but strengthen socialism and thereby weaken capitalism.

White then pursued the theme that the United States and its Western allies were hypocritical in their attitudes toward the USSR. For instance, he took issue with claims that religious freedom suffered under communism. In a display of unbelievable naivete, he wrote, Contrary to popular opinion, the right of a person to worship as he pleases has never been abrogated in Russia. The constitution of the USSR guarantees the right. What about Moscow's promotion of socialist revolutions abroad? The demise of the [Third International] and the policy pursued by present- day Russia of not actively supporting such movements in other countries should greatly help eliminate that source of friction. (What happened soon thereafter in Eastern Europe refuted White's contention. …