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History of Political Economy 33.2 (2001) 219-239
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The Case against Harry Dexter White:
Still Not Proven
James M. Boughton
Harry Dexter White, arguably the most important U.S. government economist of the twentieth century, acquired a bifurcated reputation by the end of his short life in 1948. On the positive side, he was recognized along with John Maynard Keynes as the architect of the postwar international economic system. On the negative, he was accused of betraying U.S. national interests and spying for the Soviet Union before and during World War II. Although he was never charged with a crime and defended himself successfully both before a federal grand jury and through open testimony before the House Un-American Activities Committee (HUAC), the accusations were revived five years later, in the late stages of the McCarthy era, and never quite died away.
Four recently published books have once again focused attention on the espionage charges against White.1 The new allegations are based primarily [End Page 219] on a series of cables sent between Soviet intelligence agents in the United States and Moscow. Many of those cables were intercepted by U.S. intelligence, were partially decoded in the years after the war through the then-secret and now famous Venona project,2 and have recently been declassified and released to the public. Selected other cables and documents from the Soviet-era KGB files were made available for a fee to two writers, Allen Weinstein and Alexander Vassiliev, by the Russian government. Far more extensive data from those files were smuggled out of Russia in the 1990s by a former agent, Vasili Mitrokhin. On first reading, these various releases appear to offer damning new evidence. On closer inspection, however, they reveal only how shallow the case against White and other prominent New Deal economists has always been.3 That conclusion is reinforced by even more recent evidence that has emerged from grand jury records of 1948 that were declassified and released in October 1999.
An evaluation of the record must be made in context. Harry White, the son of Jewish Lithuanian immigrants, was born in Boston in October 1892. He served in the United States Army during World War I, graduated from Stanford University when he was thirty-one years old, and earned a Ph.D. in economics from Harvard University in 1930. After teaching for four years, first at Harvard and then at Lawrence College in Wisconsin, he responded to a call from Jacob Viner to work at the U.S. Treasury in the new administration of Franklin Roosevelt. There he spent most of his career and eventually rose to the highest level of responsibility, that of assistant secretary.4
Although White published very little, the range of his economic contributions was extensive, and an analysis of it would be beyond the scope [End Page 220] of this paper. Especially during his first six years at the Treasury (1932–38), he wrote a large number of internal reports and memoranda on domestic and international monetary issues that showed him to be a pragmatic New Dealer and a committed internationalist. (Later, his administrative responsibilities would make it difficult for an outsider to separate White's own thinking from that of his staff, several of whom were distinguished economists in their own right.) He had a Keynesian fiscal instinct but took a more conservative view of monetary policy. He argued against a return to the international gold standard on the grounds that it afforded too little flexibility and had not succeeded in stabilizing prices except over very long periods. The dollar, however, should be linked to gold in some less rigid manner, to instill confidence and prevent policy excesses. He argued in favor of giving financial assistance to needy countries, but only if they could demonstrate an ability to use it properly and maintain policy discipline.
When the United States entered the war in December 1941, Treasury Secretary Henry Morgenthau Jr. put White in charge of all international economic analysis. White almost immediately produced a plan, on which...