A Spy in the Treasury

The case of the late Harry Dexter White boiled up in the nation's headlines, touching off the sharpest political controversy since the 1952 elections. Attorney General Herbert Brownell, in a Chicago speech last week, revived the charges that White, Assistant Secretary of the Treasury and an important policymaker of the Roosevelt and Truman Administrations, was a spy for Russia. Brownell added a new and serious accusation: President Truman had promoted White after the White House had received two written FBI reports saying that White was a spy.

The case was even more grave than the exposure of Alger Hiss, inasmuch as 1) White held higher positions in the Government, and 2) it was never alleged that a President of the U.S. had been officially informed that Hiss was a spy.

To the Brownell charge, Harry Truman reacted promptly--perhaps hastily. He said: "I know nothing about any such FBI report ... As soon as we found out White was disloyal, we fired him." At the White House, Press Secretary James Hagerty refuted from the record Truman's statement that White had been fired. White resigned, and got a laudatory letter from President Truman. When this was put up to Truman, he said: "White was fired by resignation."

Party Orders. Before the Brownell speech, neither Truman nor any other leader of his Administration had ever publicly suggested that White was fired, or that they believed him to be disloyal. In fact, White, who died on Aug. 16, 1948, apparently of a heart attack, three days after being questioned by the House Un-American Activities Committee, has been considered in pro-Truman quarters as an innocent martyr to "witch hunters."

White's suspected pro-Communist activities fall into two groups: espionage and influencing policy.

Elizabeth Bentley testified that White was part of an espionage ring headed by his friend and fellow Government official, Nathan Gregory Silvermaster. Documents in White's handwriting were among Whittaker Chambers' "pumpkin papers."

As to policy, Elizabeth Bentley testified that White, carrying out Communist Party orders, was the architect of the Morgenthau plan for the postwar emasculation of Germany. White's boss, Henry Morgenthau Jr., carried this plan to the 1944 Quebec Conference between Roosevelt and Churchill. It called for the dismantling of German industry and the creation of a "pastoral" Germany. Witness Bentley said that this plan was espoused by Communist grand strategy to create a power vacuum between Russia and a weakened Western Europe, so that the whole Continent would be subject to the weight of Russian power.

In his testimony to the House committee, White neither admitted nor denied a connection with the Morgenthau plan, but he did deny espionage activity and swore that he had never been close to the Communist Party or its ideas.

Sincere Regret. In reviving the case, Brownell said that the FBI in December 1945 sent to President Truman, through his aide, Brigadier General Harry Vaughan, a written report saying that former Communist Elizabeth Bentley had said that White was spying for the Russians. The next month Truman promoted White to executive director for the U.S. in the International Monetary Fund.

The FBI then ran a detailed investigation of White. This made White's espionage activities an "established fact," Brownell said. A second report went to the White House (again to Vaughan) on Feb. 4, 1946.

The next day a Senate committee recommended White's confirmation, and the day after, the Senate, in ignorance of the reports, confirmed him in his job with the Monetary Fund. On April 30, White's last day at the Treasury, President Truman wrote White accepting the resignation "with regret," saying: ". . . You will have increased opportunity for the exercise of your wide knowledge and expertness in a field which is of utmost importance to world peace and security . . . In your new position, you will add distinction to your already distinguished career . . ."

In April 1947, White left his Monetary Fund job in a hurry; Harry Truman accepted the resignation "with, sincere regret and considerable reluctance." Later that year, White was called to testify before a New York grand jury. After the Bentley and Chambers charges against White and others were made public in 1948, Harry Truman tried to shrug off the accusations as "Red herring."

"A Sweetheart." Democrats responded to last week's Brownell shellburst with a scattershot of contradiction and cries of "politics"; they said that Brownell was merely trying to divert attention from the recent by-election results.

The Attorney General retorted by publishing the entire distribution list of the first FBI report, as recorded in his department's files. On Dec. 4, 1945: General Vaughan (marked for the President's attention), Attorney General Tom Clark, Secretary of State James Brynes; on Dec. 7: Navy Secretary (later Defense Secretary) James Forrestal, Assistant Secretary of State Spruille Braden; on Feb. 20, 1946: the President's Chief of Staff, Fleet Admiral William Leahy; on Feb. 26: War Department G-2 (later Chief of Air Staff) Lieut. General Hoyt Vandenberg; on March 5: Treasury Secretary (later U.S. Chief Justice) Fred Vinson; on March 15: the chief State Department security officer. Fred Lyon. Brownell also produced a note from the FBI, which accompanied Tom Clark's copy of the second report on White. Said the note: "... I have taken the liberty to similarly inform Brigadier General Harry Hawkins Vaughan ... of the information with respect to White."

Dramatic support for Brownell's story came from a surprising quarter. Democrat T. Lamar Caudle, the onetime Assistant Attorney General who rocked Washington with his frank and ingenuous accounts of tax-case fixing, told the Des Moines Register that he had given a copy of the FBI report on White, marked for the White House, to his boss, Attorney General Clark, now a Supreme Court Justice. Drawled Caudle: "It was a sweetheart. I jumped when I read that thing ... I said, Tor God's sake, Tom, don't let that appointment go through. It will come out some day and ruin us.' "

This week the Brownell revelation continued to produce news as ex-Diplomat Braden said he did indeed get his copy of the first FBI report. While he recalled no references to White in the report, Braden said: "I darn well took care that anyone mentioned . . . was not in my office. The White part would have been up to the Secretary of the Treasury and the President . . . There were a flock of Communists in the Government then, and my guess is that there are today."

Braden remembered seeing Alger Hiss's name in the report. He added an item of interest: "All that made a deep impression on me. Subsequently, I had a run-in with Hiss over Panama bases, and I could see how he was playing the Communist game."

Then came former Secretary Byrnes with a circumstantial story flatly contradicting Truman. Byrnes said he read the report on White and asked the President what would be done about it. Truman said he had read the report. "I asked him the status of Mr. White," Byrnes reported. "He said it was still pending in the Senate. I told him ... I thought he should . . . withdraw the nomination. The President had a member of his staff telephone Mr. Leslie Biffle, Secretary of the Senate . . . Mr. Biffle stated that the nomination had been favorably acted on that afternoon."

Byrnes said he suggested that the President ask a Senator to move to reconsider the confirmation of White. "He did not think well of that suggestion," said Byrnes.

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