Henry
Morgenthau, Jr.
Henry Morgenthau, Jr. (pron.: /ˈmɔrɡənθɔː/; May 11, 1891 – February 6, 1967) was the U.S.
Secretary of the Treasury during the
administration of Franklin D.
Roosevelt. He played a major role in
designing and financing the New Deal.
After 1937, while still in charge of the Treasury, he played the central role
in financing US participation in World War II. He also played an increasingly
major role in shaping foreign policy, especially with respect to Lend Lease,
support for China, helping Jewish refugees, and (in the "Morgenthau Plan")
preventing Germany from ever again being a military threat.[1]
Early life
Morgenthau was born into
a prominent Jewish family in New York City, the son of Henry Morgenthau, Sr., a real estate mogul
and diplomat, and Josephine Sykes. He had three sisters. He attended what is
now the Dwight School, then studied architecture and
agriculture at Cornell University. In 1913, he met and became
friends with Franklin and Eleanor
Roosevelt. He operated a farm near the Roosevelt estate in upstate New
York, specializing, like FDR, in growing Christmas trees.[2]
He was concerned about distress among farmers, who comprised over a fourth of
the population. In 1922 he took over the American Agriculturalist
magazine, making it a voice for reclamation, conservation, and scientific
farming.[1]
In 1929, Roosevelt, as Governor of New York, appointed him chair of
the New York State Agricultural Advisory Committee and to the state
Conservation Commission.
[edit] New Deal
In 1933, Roosevelt
became President and appointed Morgenthau governor of the Federal Farm Board. Morgenthau was nonetheless
involved in monetary decisions. Roosevelt adopted the idea of raising the price
of gold to inflate the currency and reverse the debilitating deflation of prices.
The idea came from Professor George Warren of Cornell University. When
Roosevelt told Morgenthau he was thinking of raising the price of gold by 21
cents, his entourage asked him why. "It's a lucky number", Roosevelt
said. "Because it's three times seven." As Morgenthau later wrote,
"If anybody knew how we really set the gold price through a combination of
lucky numbers, etc., I think they would be frightened." [3]
In 1934, when William
H. Woodin resigned because of poor health, Roosevelt appointed Morgenthau Secretary of the Treasury (an act that
enraged conservatives).
Morgenthau was an orthodox economist who opposed Keynesian economics and disapproved of some
elements of Roosevelt's New Deal. To finance World War II, he initiated an
elaborate system of marketing war
bonds.
To protect the New Deal,
in 1934, President Franklin D. Roosevelt asked Morgenthau to
examine the taxes of William Randolph Hearst because FDR was
"advised that Hearst was planning to use his newspapers to launch a major
attack on the New Deal and its economic policies."[4]
Treasury Secretary Morgenthau explained that he examined the taxes of William Randolph Hearst and actress Marion
Davies and "advised FDR to mount a preemptive attack on both her and
Hearst."[4][5]
The Great Depression and
its rampant unemployment were of primary focus for Morgenthau. And after almost
two terms served by Roosevelt, Morgenthau assessed the federal effort to
relieve economic conditions by proclaiming, "We have tried spending money.
We are spending more than we have ever spent before and it does not
work....After eight years of this administration we have just as much
unemployment as when we started...and an enormous debt to boot!"[6]
Indeed, the unemployment rate for 1939 was higher than the unemployment rate
for 1931, but lower than 1932.[7]
[edit] Campaign against corruption
Morgenthau used his
position as Treasury chief to investigate organized crime and government corruption.
Treasury Intelligence and other agencies (the notoriously fragmented US federal
law enforcement system had five in the Treasury Department alone) were
uncoordinated in their efforts; efforts to create a super-agency were stalled
by J. Edgar Hoover, who feared his FBI would be
overshadowed. Nevertheless, Morgenthau created a coordinator for the Treasury
agencies; although the coordinator could not control them, he could move them
to some cooperation. Former head of IRS' criminal investigators Elmer Lincoln Irey who had directed major
investigations including the successful prosecution of Al Capone
assumed the position in 1937. Investigations of official corruption caused the
fall of political boss Thomas "Big Tom" Pendergast of Kansas
City. A Mafia-related shootout and massive official corruption led to
successful investigations against the local Mafia head Charles
Carrollo and Tom Pendergast.[8]
Other officials — as well as gangsters, in a few rare cases — were convicted
because of Morgenthau's investigations.
[edit] Fiscal responsibility
Morgenthau believed in balanced budgets, stable currency,
reduction of the national debt, and the need for more private
investment. The Wagner Act regarding labor unions met Morgenthau's
requirement because it strengthened the party's political base and involved no
new spending. Morgenthau accepted Roosevelt's double budget as legitimate —
that is, a balanced regular budget, and an "emergency" budget for
agencies, like the Works Progress Administration (WPA), Public Works Administration (PWA) and Civilian Conservation Corps (CCC), that
would be temporary until full recovery was at hand. He fought against the
veterans’ bonus until Congress finally overrode Roosevelt's veto and gave out
$2.2 billion in 1936. In the 1937 "Depression within the Depression",
Morgenthau was unable to persuade Roosevelt to desist from continued deficit
spending. Roosevelt continued to push for more spending, and Morgenthau
promoted a balanced budget. In 1937, however, Morgenthau successfully convinced
Roosevelt to finally focus on balancing the budget through major spending cuts
and tax increases; Keynesian economists have argued that this new attempt by
Roosevelt to balance the budget created the Recession
of 1937.[9]
On November 10, 1937, Morgenthau gave a speech to the Academy of Political
Science at New York's Hotel Astor, in which he noted that the Depression had
required deficit spending, but that the government needed to cut spending to
revive the economy. In his speech, he said:[10]
"We
want to see private business expand. … We believe that one of the most
important ways of achieving these ends at this time is to continue progress
toward a balance of the federal budget."
His biggest success was
the new Social Security program; he
reversed the proposals to fund it from general revenue and insisted it be
funded by new taxes on employees. Morgenthau insisted on excluding farm workers
and domestic servants from Social Security because workers outside industry
would not be paying their way.[11]
He questioned the value of the deficit spending that had not reduced
unemployment and only added debt:[6]
"We
have tried spending money. We are spending more than we have ever spent before
and it does not work. And I have just one interest, and if I am wrong …
somebody else can have my job. I want to see this country prosperous. I want to
see people get a job. I want to see people get enough to eat. We have never
made good on our promises. … I say after eight years of this Administration we
have just as much unemployment as when we started. … And an enormous debt to
boot."[12]
To reduce the deficit he argued for increased taxes, particularly on the
wealthy.
"We have never
begun to tax the people in this country the way they should be..... I don't pay
what I should. People in my class don't. People who have it should pay."[12]
[edit] Jewish refugees
Once confronted by the Holocaust,
the Allied
Powers reacted slowly. Refusing the initial appeal of Jewish organizations
for Allied countries to deliver food and medicine to the ghettos of Europe,
the British and U.S. governments argued that supplies would be diverted for the
Germans' personal use or would be granted to the Jews just to free the Third Reich
from its "responsibility" to feed them. A license granted in December
1942 for such shipments had minimal effect. In 1943, the Treasury Department
approved the World Jewish Congress' plan to rescue Jews
through the use of blocked accounts in Switzerland, but the State Department and the British Foreign Office procrastinated
further. Morgenthau and his staff persisted in bypassing State and ultimately
confronting Roosevelt in January 1944, along with increasing calls from
Congress and the public for a presidential rescue commission; the eventual
result was the executive creation of the US War
Refugee Board in January 1944. The "Bergson Group" led by Hillel Kook
was the most vocal group of activists calling for rescue, had considerable
support in Congress and Senate as well from Eleanor Roosevelt and prepared the
ground for Roosevelt's eventual decision. The Board sponsored the Raoul
Wallenberg mission to Budapest and allowed an increasing number of Jews to
enter the U.S. in 1944 and 1945; as many as 200,000 Jews were saved in this way.[13]
Hurwitz
(1991) argues that in late 1943, the Treasury Department drafted a report
calling for the creation of a special rescue agency for European Jewry. At the
same time, several congressmen connected with the "Bergson Boys" introduced a resolution also
calling for the creation of such an agency. On January 16, 1944, Morgenthau presented
Roosevelt with the Treasury report, and the president agreed to create the War
Refugee Board (WRB), the first major attempt of the United States to deal
with the annihilation of European Jews.
[edit] Execution of Nazi criminals
Morgenthau advocated the
summary execution without trial of the top 50 or 100 alleged Nazi criminals[14]
and had some success, but in the end the Nuremberg
trials became the chosen option.
[edit] The Morgenthau Plan
Main article: Morgenthau
Plan
In 1944, Morgenthau proposed
the Morgenthau Plan for postwar Germany, calling for Germany to lose the heavy
industry, and the Ruhr area "should not only be stripped of all presently
existing industries but so weakened and controlled that it can not in the
foreseeable future become an industrial area".[15]
Germany would keep its rich farmlands in the east. However Stalin insisted on
the Oder-Neisse border, which moved those farming areas out of Germany.
Therefore the original Morgenthau plan had to be dropped, Weinberg argues,
because it was "too soft on the Germans, not too hard as some still
imagine."[16]
At the Second Quebec Conference on September 16,
1944, Roosevelt and Morgenthau persuaded the initially very reluctant British
Prime Minister Winston Churchill to agree to the Morgenthau
plan, likely using a $6 billion Lend Lease
agreement to do so.[17]
Churchill chose however to narrow the scope of Morgenthau's proposal by
drafting a new version of the memorandum, which ended up being the version
signed by the two statesmen.[17]
The gist of the signed memorandum was "This programme for eliminating the
war-making industries in the Ruhr and in the Saar is
looking forward to converting Germany into a country primarily agricultural and
pastoral in its character."
The plan faced opposition in
Roosevelt's cabinet, primarily from Henry
L. Stimson, and when the plan was leaked to the press, there was public
criticism of Roosevelt.[18]
The President's response to inquiries was to deny the press reports.[19]
As a consequence of the leak, Morgenthau was in bad favor with Roosevelt for a
time.
German Propaganda Minister Joseph
Goebbels used the leaked plan, with some success, to encourage the German
people to persevere in their war efforts so that their country would not be
turned into a "potato field." [20]
General George Marshall complained to Morgenthau that
German resistance had strengthened.[21]
Hoping to get Morgenthau to relent on his plan for Germany, Roosevelt's
son-in-law, Lt. Colonel John Boettiger, who worked in the United States War Department,
explained to Morgenthau how the American troops that had had to fight for five
weeks against fierce German resistance to capture Aachen and
complained to him that the Morgenthau Plan was "worth thirty divisions to
the Germans." In late 1944, Roosevelt's election opponent, Thomas
Dewey, said it was worth "ten divisions". Morgenthau refused to
relent.[22]
On May 10, 1945, Truman
signed the U.S. occupation directive JCS 1067.
Morgenthau told his staff that it was a big day for the Treasury, and that he
hoped that "someone doesn't recognize it as the Morgenthau Plan."[23]
The directive, which was in effect for over two years directed the U.S. forces
of occupation to "...take no steps looking toward the economic
rehabilitation of Germany".[24]
In occupied Germany
Morgenthau left a direct legacy through what in OMGUS commonly were
called "Morgenthau boys". These were U.S. Treasury officials whom
General Dwight D. Eisenhower had "loaned" in
to the Army of occupation. These people ensured that JCS 1067 was interpreted
as strictly as possible. They were most active in the first crucial months of
the occupation, but continued their activities for almost two years following
the resignations of Morgenthau in mid-1945, and some time later, of their
leader, Colonel Bernard Bernstein, who was "the repository
of the Morgenthau spirit in the army of occupation".[25]
They resigned when, in July 1947, JCS 1067 was replaced by JCS 1779 which instead stressed that
"An orderly, prosperous Europe requires the economic contributions of a
stable and productive Germany."
Morgenthau's legacy was also
seen in the plans for preserving German disarmament by significantly reducing
German economic might.[26]
(see also The industrial plans for Germany)
In October 1945, Morgenthau
published a book titled Germany Is Our Problem
in which he described and motivated the Morgenthau plan in great detail.[27]
Roosevelt had granted permission for the book the evening before his death,
when dining with Morgenthau at Warm Springs. Morgenthau had asked Churchill
for permission to also include the text of the then still secret
"pastoralization" memorandum signed by Churchill and FDR at Quebec but permission was denied.[28]
In November 1945 General Dwight D. Eisenhower, the Military Governor of
the U.S. Occupation Zone, approved
the distribution of 1000 free copies of the book to American military officials
in occupied Germany. Historian Stephen
Ambrose draws the conclusion that, despite Eisenhower's later claims that
the act was not an endorsement of the Morgenthau plan, Eisenhower both approved
of the plan and had previously given Morgenthau at least some of his ideas on
how Germany should be treated.[29]
Following his resignation,
along with other prominent individuals such as the former first lady, Eleanor
Roosevelt, Morgenthau remained for several years an active member of the
group campaigning for a "harsh peace" for Germany.[30]
[edit] Bretton Woods
Morgenthau was a leading
participant in the Bretton Woods
Conference, which established the Bretton Woods system, the International Monetary Fund and the International
Bank for Reconstruction and Development (the World Bank).
[edit] Later career and legacy
Morgenthau resigned in
mid-1945, when Truman became President and Morgenthau's advice was
no longer sought. He devoted the remainder of his life to working with Jewish
philanthropies, and also became a financial advisor to Israel. Tal Shahar,
an Israeli moshav
(agricultural community) near Jerusalem, created in 1948, was named in his honor
(Morgenthau means "morning dew" in German,
and so does the Hebrew
name "Tal Shahar").
Morgenthau died in Poughkeepsie, New York, in 1967. His
son Robert M. Morgenthau was the District
Attorney of New York County from 1975 to 2009.
The 378-foot (115 m) United States Coast Guard Cutter Morgenthau
is named in his honor.
[edit] Other information
As Secretary of the Treasury,
Morgenthau was the first person in the presidential line of succession from
June 27 to July 3, 1945, between the resignation of Secretary of State Edward
Stettinius and the U.S. Senate confirmation of James
Byrnes to said office. Had President Truman died, resigned, or been removed
from office during those seven days, Morgenthau would have become Acting President of the United
States until the end of the presidential term in 1949.
Notes
1. ^ a
b May 2000.
2.
^ Goldberg, Richard Thayer (1981). The
making of Franklin D. Roosevelt: triumph over disability. p. 116. ISBN 978-0-89011-564-0. LCCN 81017555.
3.
^ Shlaes 2007,
p. 163, 148.
4.
^ a
b Thorndike,
Joseph J. (AUGUST 23, 2012). "TAX TROUBLES OF THE RICH AND FAMOUS, 1930S
EDITION - 2012 TNT 166-3". Tax Analysts.
5.
^ Nasaw, David (September 6, 2001). The
Chief: The Life of William Randolph Hearst. 500: Mariner Books.
pp. 704. ISBN 978-0618154463.
6.
^ a
b Blum, John Morton
(1970). Roosevelt and Morgenthau. Boston, Massachusetts: Houghton
Mifflin Harcourt. p. 256. LCCN 75096063. OCLC 68158.
7.
^ Folsom,
Burton W., Jr. (2008). New
Deal or Raw Deal?: How FDR's Economic Legacy Has Damaged America. Simon
& Schuster. ISBN 978-1-4165-9222-8. LCCN 2008020381. http://books.google.com?id=HwTPk00QMHIC&printsec=frontcover.
8.
^ Repetto 2004.
9.
^ Krugman, Paul
(November 8, 2008). "New
Deal economics". The New York Times. http://krugman.blogs.nytimes.com/2008/11/08/new-deal-economics/. Retrieved 2012-04-30.
10.
^ Shlaes 2007,
p. 341–342.
11.
^ Zelizer 2000.
12.
^ a
b Morgenthau, Henry, Jr. (May 9 1939) (PDF, 1.9 MB). Henry
Morgenthau Diary, Microfilm Roll #50. http://www.burtfolsom.com/wp-content/uploads/2011/Morgenthau.pdf.
13.
^ Penkower 1980.
14.
^ Askin, Kelly Dawn (1997). War
Crimes Against Women: Prosecution in International War Crimes Tribunals.
Martinus Nijhoff Publishers.
p. 105. ISBN 978-90-411-0486-1. LCCN 97035851. http://books.google.com/?id=ThfzGvSvQ2UC&pg=PA105&dq=morgenthau+%22firing+squad%22&cd=4#v=onepage&q=morgenthau%20%22firing%20squad%22&f=false.
15.
^ Morgenthau. "Suggested
Post-Surrender Program for Germany". http://docs.fdrlibrary.marist.edu/psf/box31/t297a01.html.
16.
^ Gerhard L. Weinberg (2005). Visions of
Victory: The Hopes of Eight World War II Leaders. Cambridge University
Press. p. 183. http://books.google.com/books?id=0eYhHoIPEm4C&pg=PA183.
17.
^ a
b Chase, John L. (May 1954). "The
Development of the Morgenthau Plan Through the Quebec Conference". The Journal of Politics 16 (2):
324–359. doi:10.2307/2126031. http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=6326320.
18.
^ "The Policy of
Hate". Time.
October 2, 1944. http://www.time.com/time/magazine/article/0,9171,933072-1,00.html. Retrieved 2012-04-30.
19.
^ "The Battle for Peace
Terms". Time.
October 9, 1944. http://www.time.com/time/magazine/article/0,9171,803331,00.html. Retrieved 2012-04-30.
"Office of
Strategic Services — Official Dispatch, Ref. No. 250". Franklin D.
Roosevelt Presidential Library and Museum, Marist
College. http://www.fdrlibrary.marist.edu/psf/box32/t298m06.html.
Retrieved 2012-04-30.
·
^ Report
on the Morgenthau Diaries, p. 41ff[title incomplete]
·
^ Beschloss 2002,
p. 172–173.
·
^ Beschloss 2002,
p. 233.
· ^ "CONFERENCES: Pas de
Pagaille!". Time.
July 28, 1947. http://www.time.com/time/magazine/article/0,9171,887417,00.html. Retrieved 2012-04-30.
· ^ Gareau, Frederick H. (June 1961). "Morgenthau's Plan for
Industrial Disarmament in Germany". The Western Political Quarterly
(University of Utah) 14 (2): 517–534. doi:10.2307/443604. JSTOR 443604. http://www.jstor.org/stable/443604.
· ^ Ambrose, Stephen E.
(1983). Eisenhower: Soldier, General of the Army, President-Elect (1893-1952).
New York: Simon & Schuster. p. 422. ISBN 978-0-671-44069-5. LCCN 83009892.
· ^ Casey, Steven (2005). "The
campaign to sell a harsh peace for Germany to the American public, 1944–1948"
(PDF, 0.4 MB). History.
Volume 90, Issue 297, pages 62–92, January 2005 90 (297): 62–92. doi:10.1111/j.1468-229X.2005.00323.x. http://eprints.lse.ac.uk/736/1/Campaign_Harsh_Peace_History.pdf.
[edit] References
- Beschloss, Michael (2002). The
Conquerors: Roosevelt, Truman and the Destruction of Hitler's Germany,
1941-1945. Simon & Schuster. ISBN 978-0-684-81027-0. LCCN 2002030331. Devotes much attention
to Morgenthau Plan
- Hurwitz,
Ariel (1991). "The Struggle over the Creation of the War Refugee
Board (WRB)". Holocaust and Genocide Studies
6 (1): 17–31. doi:10.1093/hgs/6.1.17.
- Irey, Elmer Lincoln (1948). The Tax
Dodgers: The Insider Story of the T-Men's War with America's Political and
Underworld Hoodlums. Greenburg. ASIN B002DIUAAW.
- May,
Dean L. (1981). From New Deal to New Economics: The American
Liberal Response to the Recession of 1937. ISBN 978-0-8240-4862-4. LCCN 80008466.
- May,
Dean L. (2000). Morgenthau,
Henry, Jr.. American National Biography.
Oxford University Press. http://www.anb.org/articles/06/06-00452.html.
- Penkower, Monty Noam
(1980). "Jewish Organizations and the Creation of the U.S. War
Refugee Board". Annals
of the American Academy of Political and Social Science 450
(1): 122–139. doi:10.1177/000271628045000111.
- Petrov, Vladimir Nikolayevich
(1967). Money and Conquest: Allied Occupation Currencies in World War
II. Baltimore, Maryland: Johns Hopkins Press. ISBN 978-0-8018-0530-1. LCCN 66026685. OCLC 186795.
- Repetto,
Thomas (2004). The American Mafia: A History of Its Rise to Power.
Henry Holt & Company. ISBN 978-0-8050-7210-5. LCCN 2003056736.
- Shlaes,
Amity (2007). The Forgotten Man. HarperCollins. pp. 163,
148. ISBN 978-0-06-621170-1. LCCN 2006049761.
- Schlesinger, Arthur M., Jr.
(1957–1960). The Age of Roosevelt, vol. I–III. LCCN 56010293.
- Zelizer,
Julian E. (June 2000). "The Forgotten Legacy of the New Deal: Fiscal
Conservatism and the Roosevelt Administration, 1933-1938". Presidential
Studies Quarterly 30 (2): 331–358. doi:10.1111/j.0360-4918.2000.00115.x.
JSTOR 27552097.
·
[edit] Primary sources
- Blum, John Morton, ed. From
the Morgenthau Diaries, a 3-volume narrative of Morgenthau's New Deal
years (1928–45) based very closely on his diary.; abridged edition: Roosevelt
and Morgenthau: A Revision and Condensation of From the Morgenthau
Diaries (1970)
[edit] External links
- Time
Magazine October 15, 1945 Morgenthau's Hope Reaction to the
publication of Morgenthau's book "Germany is Our Problem"
where he promotes the "Morgenthau Plan".
- Time
Magazine September 22, 1967 Vengeance v. Vision Review of Years
of War, 1941-1945; From the Morgenthau Diaries by John Morton Blum.
- U.S.
Treasury - Biography of Secretary Morgenthau
- Stay the
Hand of Vengeance by Gary Bass
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Preceded by
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- 1891 births
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1 comment:
Not one word about bankruptcy, the state of emergency, nor the theft of all gold and silver from we the people.
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