May 11, 2010 <Back to Index>
|
Henry Morgenthau, Jr. (May 11, 1891 – February 6, 1967) was the U.S. Secretary of the Treasury during the administration of Franklin D. Roosevelt. He was also the father of Robert M. Morgenthau, who was the District Attorney of New York County from 1975 to 2009. 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. Later, he studied architecture and agriculture at Cornell University. In 1913, he met and became friends with Franklin and Eleanor Roosevelt. During World War I, he worked for the Farm Security Administration. 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. 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 drive down the value
of the dollar, thereby raising the price of all goods — especially farm
goods. The idea came from Professor George Warren of Cornell
University, and despite the opposition to the idea, Morgenthau was
willing to help him. 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. 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. 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. 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. He is quoted in doubting the huge spending schemes in The New Deal that haven't reduced unemployment and only added debt. 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 Board 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. 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. In 1944, Morgenthau proposed the Morgenthau Plan for
postwar Germany, calling for Germany to be dismembered, partitioned
into separate independent states, stripped of all heavy industry and
forced to return to a pre-Industrial Revolution agrarian economy. The
Morgenthau plan is thought by a few to have been devised by
Morgenthau's deputy, Harry Dexter White, who was later accused of being a Soviet agent. 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 Morganthau plan, likely using a $6 billion Lend Lease agreement to do so. 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. 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 the leakage of the plan to the press resulted in public criticism of Roosevelt. The President's response to press inquiries was to deny the press reports. 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." General George Marshall complained to Morgenthau that German resistance had strengthened. 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." Roosevelt's election opponent in late 1944, Thomas Dewey, said it was worth "ten divisions". Morgenthau refused to relent. 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." 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". 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 resignation of Morgenthau
in mid 1945 and some time later also of their leader Colonel Bernard Bernstein, who was "the repository of the Morgenthau spirit in the army of occupation". 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." In October 1945 Morgenthau published a book in
which he described and motivated the Morgenthau plan in great detail.
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. 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. Following his resignation, and in company of other prominent individuals such as the former first lady Eleanor Roosevelt, Morgenthau remained for several years an active member of the campaign group for a "harsh peace" for Germany. 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. The 378-foot (115 m) United States Coast Guard Cutter Morgenthau is named in his honor. |