Henry Morgenthau, Jr.

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Henry Morgenthau Jr.

Henry Morgenthau, Jr. (IPA: /ˈmɔrgənθɔː/; May 11, 1891 – February 6, 1967) was Secretary of the Treasury of the United States during the administration of Franklin D. Roosevelt. He was also the father of Robert M. Morgenthau, the current District Attorney of New York County.

[edit] Early life

Morgenthau was born to Jewish parents in New York City, the son of Henry Morgenthau Sr., a prominent 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 U.S. Farm 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.

[edit] New Deal

In 1933, Roosevelt became President and appointed Morgenthau governor of the Federal Farm Board. In 1934, when William H. Woodin resigned because of ill-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, but he was a Roosevelt loyalist and retained his office until 1945. To finance World War II, he initiated an elaborate system of marketing war bonds.

[edit] Fiscal responsibility

Morgenthau's signature, as used on American currency

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. His biggest success was the new Social Security program; he managed to reverse 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^[1].

[edit] Jewish refugees

Confronted by the Holocaust, the Anglo-American Alliance moved slowly to meet this tragedy during World War II. 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. The World Jewish Congress' subsequent plan to rescue Jews through the use of blocked accounts in Switzerland received the US Treasury Department's approval in mid-1943, but the State Department and the British Foreign Office procrastinated further. Jewish groups failed at times to measure up to the catastrophe, but it has been argued that the fundamental obligation lay with the Allied councils of war, which discriminated in their unwillingness to save a powerless European Jewry. The persistence of Morgenthau and his staff in bypassing State and ultimately confronting Roosevelt in January 1944, along with increasing calls from Congress and the public for a presidential rescue commission, resulted in the executive creation of the US War Refugee Board in January 1944. The lateness of the hour and Hitler's ruthless determination to complete the murder of all the Jews of Europe made the odds for the new board's success more than questionable. However, it 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 (Penkower 1980).

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 16 January 1944, Morgenthau presented President 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 murder of European Jewry.

In the aftermath of World War Two, some have wondered what the main cause for the creation of the WRB was, and whether it was the actions of Treasury, or the resolution in Congress that led to its creation. Those who claim that the congressional resolution was the decisive factor assert that Roosevelt feared a confrontation with Congress over this issue. However, there is no evidence that such was Roosevelt's reasoning. In truth, there are many indications that Congress in those years was both anti-refugee and passive to the plight of European Jewry. Others suggest, thus, that Roosevelt's primary motivation must have come from the Treasury Department's prompting.

[edit] Morgenthau Plan

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 an agrarian economy. The Morgenthau plan is by some thought to have been devised by Morganthau's deputy, Harry Dexter White. At the Second Quebec Conference on September 16 1944 U.S. President Franklin D. Roosevelt and Morgenthau persuaded the initially very reluctant British Prime Minister Winston Churchill to agree to the plan, likely using a $6 billion Lend Lease agreement to do so.^[2] 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.^[2] 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 (see also his memorandum), and the leakage of the plan to the press resulted in public criticism of Roosevelt.[1] The President's response to press inquiries was to deny the press reports.[2] As a consequence of the leak Morgenthau was in bad favor with the President 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". (See also this OSS report.) General George Marshall complained to Morgenthau that German resistance had strengthened.^[3] Hoping to get Morgenthau to relent on his plan for Germany, President 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 the city of Aachen and complained to him that the Morgenthau Plan was "worth thirty divisions to the Germans." Morgenthau refused to relent.^[4]

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."^[5] 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".^[6]

In occupied Germany Morgenthau left a direct legacy through what in OMGUS commonly were called "Morgenthau boys". These were US 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".^[7] 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.^[8] (see also The industrial plans for Germany)

In October 1945 Morgenthau published a book^[9] in which he described and motivated the Morgenthau plan in great detail. FDR 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.^[10] 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.^[11]

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. ^[12]

[edit] Bretton Woods

Morgenthau was a leading participant in the Bretton Woods Conference that established the Bretton Woods system, under which the International Monetary Fund and the International Bank for Reconstruction and Development (the precursor to the World Bank) were created. He resigned in mid-1945, when Truman became President and Morgenthau's advice was no longer sought.

[edit] Legacy

Morgenthau devoted the remainder of his life to philanthropy, 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.

[edit] External links

• Time Magazine Oct. 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 Sep. 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

[edit] Notes

[edit] References

• Beschloss, Michael. The Conquerors: Roosevelt, Truman and the Destruction of Hitler's Germany, 1941-1945. Simon & Schuster. 2002. ISBN 0-684-81027-1. Devotes much attention to Morgenthau Plan
• Hurwitz, Ariel. "The Struggle over the Creation of the War Refugee Board (WRB)" Holocaust and Genocide Studies 1991 6(1): 17-31. ISSN 8756-6583
• Penkower, Monty Noam. "Jewish Organizations and the Creation of the U.S. War Refugee Board." Annals of the American Academy of Political and Social Science 1980 (450): 122-139. ISSN 0002-7162 Fulltext in Jstor
• Julian E. Zelizer; "The Forgotten Legacy of the New Deal: Fiscal Conservatism and the Roosevelt Administration, 1933-1938." Presidential Studies Quarterly. Volume: 30. Issue: 2. 2000. pp 331+.
• Vladimir Petrov, Money and conquest; allied occupation currencies in World War II. Baltimore, Johns Hopkins Press (1967)

[edit] Primary sources

• Blum, John Morton, ed. From the Morganthau Diaries, a 3 volume narrative of Morganthau'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 (1972)

v • d • e United States Secretaries of the Treasury Hamilton • Wolcott • Dexter • Gallatin • Campbell • Dallas • Crawford • Rush • Ingham • McLane • Duane • Taney • Woodbury • Ewing • Forward • Spencer • Bibb • Walker • Meredith • Corwin • Guthrie • Cobb • Thomas • Dix • Chase • Fessenden • McCulloch • Boutwell • Richardson • Bristow • Morrill • Sherman • Windom • Folger • Gresham • McCulloch • Manning • Fairchild • Windom • Foster • Carlisle • Gage • Shaw • Cortelyou • MacVeagh • McAdoo • Glass • Houston • Mellon • Mills • Woodin • Morgenthau • Vinson • Snyder • Humphrey • Anderson • Dillon • Fowler • Barr • Kennedy • Connally • Shultz • Simon • Blumenthal • Miller • Regan • Baker • Brady • Bentsen • Rubin • Summers • O'Neill • Snow • Paulson

v • d • e Cabinet of President Franklin D. Roosevelt (1933-1945) Vice President John Nance Garner (1933-1941) • Henry A. Wallace (1941-1945) • Harry S. Truman (1945) Secretary of State Cordell Hull (1933-1944) • Edward Stettinius, Jr. (1944-1945) Secretary of War George Dern (1933-1936) • Harry Hines Woodring (1936-1940) • Henry L. Stimson (1940-1945) Secretary of the Treasury William Hartman Woodin (1933-1934) • Henry Morgenthau, Jr. (1934-1945) Attorney General Homer Stille Cummings (1933-1939) • Frank Murphy (1939-1940) • Robert H. Jackson (1940-1941) • Francis Biddle (1941-1945) Postmaster General James Farley (1933-1940) • Frank Comerford Walker (1940-1945) Secretary of the Navy Claude A. Swanson (1933-1939) • Charles Edison (1940) • Frank Knox (1940-1944) • James Forrestal (1944-1945) Secretary of the Interior Harold L. Ickes (1933-1945) Secretary of the Agriculture Henry A. Wallace (1933-1940) • Claude R. Wickard (1940-1945) Secretary of Commerce Daniel Calhoun Roper (1933-1938) • Harry Hopkins (1939-1940) • Jesse Holman Jones (1940-1945) • Henry A. Wallace (1945) Secretary of Labor Frances Perkins (1933-1945)