The Jew Who Defeated Hitler Page 13

  By 2:45 that afternoon, FDR had signed off on Morgenthau’s financing plan.

  Morgenthau had fought off the New Dealers, but the problems with the War Department showed no sign of abating. The Army Appropriation Bill had been handed over to a congressional committee for study, and General Hap Arnold and other military spokesmen frankly testified that they believed the foreign orders were interfering with the domestic-airplane program. Several congressmen said that the foreign orders were creating demand, which in turn was driving up labor costs at some plants—a claim denied by several administration officials. On March 12, Morgenthau marched into the Oval Office armed with aircraft-production statistics and told the president point-blank that Johnson and Arnold were ruining his effectiveness. The statistics showed how dramatically production had risen, and they included the number of people now employed in airplane manufacturing. And Morgenthau quoted Lauchlin Currie as saying the aircraft program was “the most important thing in Washington” not just in military terms but also as an instrument of economic growth.

  Morgenthau told his staff the president was impressed with the stats. FDR called in Pa Watson and Steve Early and said Morgenthau would head the aircraft program because he, the president, didn't have the time to meet with all the parties involved. “The fellows Johnson and Arnold don't like it and they are doing everything they can to sabotage it and they have to stop it,” said Roosevelt. When Steve Early, who'd worked in the War Department, warned of how obstructionist Arnold could be, Roosevelt replied: “If Arnold won't conform, maybe I will have to move him out of town.” FDR instructed Early and Watson to order Johnson to say publicly that he approved of the aircraft program, of the foreign participation in it, and of having the secretary of the Treasury in charge of it. And Arnold was no longer allowed to speak to the press.29

  “Well, the President was swell,” Morgenthau told his staff. “It shows that when the President wants to he can take two hours and get a thing straightened out. That’s what he can do when he wants. He did not do that for me last year.”30

  The staff filed out, and only Henrietta Klotz remained behind to record Morgenthau’s final thoughts on the day. In confidence, he revealed he had also told the president that day all that he had gone through for him with the French Mission fiasco and how he “got crucified up on the hill for a month” because of it. He said he never understood why the president had been angry with him for a month or two after the plane crash in California.

  When Morgenthau finished, Roosevelt had looked at him and said: “Well, you would have to give me more details. I can't remember.”

  It was the first time Morgenthau had brought up his rough patch with FDR a year earlier, and the only response he got from his best friend was that he did not remember.31

  Louis Johnson agreed to reign in Hap Arnold and to go to Capitol Hill to explain the benefits of the airplane program. Early advised the Treasury secretary to use “a little soft soap” in his dealings with Johnson, who he believed sincerely wanted to work together on the armament program.32 The War Department that afternoon put out a statement saying the Curtiss P-40 pursuit ship, powered by its sophisticated Allison liquid-cooled engine, would be sold to Britain and France. The New York Times said the result was “a political tempest of the first magnitude.”33 The House Veteran and Military Affairs Subcommittee immediately announced hearings on the purchases, calling Woodring, Johnson, Marshall, and Arnold to testify. Morgenthau publicly said he welcomed the inquiry, adding that his relationship with the military was “perfectly all right.” He hosted Woodring and Secretary of the Navy Charles Edison at lunch on March 14, and the latter publicly stated the foreign orders had neither interfered with nor raised the price of his domestic orders.

  The controversy lingered until Roosevelt a week later publicly praised the purchase of aircraft by the foreign powers. He told a press conference that the Allied airplane program was primarily responsible for tripling capacity for airplane production in the past year. The next day, the congressional committee ended its hearings, mainly influenced by the president’s support of the purchasing program.34 By mid-April, the public was well aware of the foreign purchases, and the Associated Press reported that the British and French together had placed an order for more than 1,500 planes at a cost of more than $120 million. Purvis also told the news service that additional contracts would be signed in the near future.35

  Given their partnership in crushing Poland, the Soviet Union and Germany were largely considered as allies, so the pending collapse of Finland was perceived to be simply another democratic country being flattened by the superior totalitarian force. “I don't know where we could spend $50 million to better advantage than to give it to the Finns to fight our battle to keep these fellows from getting to the Atlantic,” Morgenthau told his staff early in January. “Because once they get to the Atlantic God help England and then we are in the soup.”36 Working with Roosevelt, who publicly condemned the Soviets’ “dreadful rape of Finland,” he planned to lend $50 million to the Finns and forgive any outstanding debts they had. However, he soon learned there was not enough support on the Hill for a loan to Finland. Roosevelt asked for congressional support, but Congress dithered as Finland weakened. The Finns officially surrendered on March 13, 1940. In five years, the aggressors had consumed the Rhineland, Austria, Czechoslovakia, Spain, Poland, and Finland, and had eaten into huge swaths of China.

  Six days after Finland surrendered, Morgenthau sat down to lunch with Roosevelt and the president broached a subject he admitted might sound a little “cockeyed.” He wanted the Treasury to devise a program that would give one dollar a day to everyone over sixty years old or who became sick. He said it would cost about $2 billion and could be financed by an increase in the payroll tax. “It may be cockeyed,” Morgenthau quoted him as saying later that day. “I don't say there is anything to it, but I want you to study it.” He added: “We have to do something like this.”37

  Nothing became of the matter. But it’s worth noting that as the world inched ever closer to a global conflict, Roosevelt was asking his financial and procurement czar to sidetrack himself with an election-year social program that would have increased the $8.4 billion budget being debated in Congress by 24 percent and increased the taxation on businesses.

  Roosevelt told Morgenthau he chatted with Woodring on March 19 and that the War secretary vowed to withhold secret devices from the Allies. When Roosevelt asked him to name the devices, Woodring could come up with only bomb sites, and Roosevelt let him have it “with both guns.”38 While Morgenthau was vacationing at the Cloister, a luxurious resort in Sea Island, Georgia, Roosevelt told him during a March 31 phone call that “Pa had to get very angry and tell them [obviously Woodring and Johnson] that if they did not get together some of them would have to leave Washington.” He also told Morgenthau that he was very pessimistic about the situation in Europe and that something would likely happen within thirty days.39

  It took only ten days for that prophesy to be fulfilled. On April 9, Hitler seized Denmark and began an initial assault on Norway. Within twenty-four hours, the Nazis had captured most of the Norwegian ordnance and had a firm hold of southern Norway and all of Denmark. It allowed Germany unfettered supply routes from iron mines in neutral Sweden, from which the German forces received most of their iron ore. To challenge the Nazi occupation, the Allies landed forces in northern Norway on April 14.

  Roosevelt was outraged—“hopping mad,” as Morgenthau repeatedly dictated into his diary—that the Brits had not prevented the Germans from marching into Norway. As he had with the previous acts of aggression, the Treasury secretary responded by freezing the assets of the occupied countries to make sure the Nazis couldn't get them. He also ordered customs to hold in port all ships due to sail to Scandinavia. He worked with his liaison committee on a new DuPont powder plant, reversing a decision by Collins to locate the plant in Canada.40 They had gone through these defeats before, but there was something different about
this one. The smaller countries were fast being gobbled up by Germany and the Soviet Union, and it was only a matter of time until it was the turn of Britain and France.

  On the night of April 18, Morgenthau had a drink with Franklin and Eleanor Roosevelt in honor of his twenty-fourth wedding anniversary. They had good reason to celebrate for the French and British that day had finally announced their order for 1,500 warplanes. There is no record of Elinor joining them—it may have been that she stayed home because of her declining health. Four days later she would check in to the hospital under an assumed name and undergo surgery.41 But during drinks, the war in Europe dominated the conversation.

  “If things get worse I suppose you have to wait until after the convention to get rid of Harry Woodring,” Morgenthau said, according to his diary.

  “No, if things get worse I will form a national cabinet,” replied the president, surprising his guest. A national cabinet would involve bringing Republicans into cabinet.

  They bandied about names. Roosevelt said he was thinking about appointing John Gilbert Winant, a former Republican governor of New Hampshire who was more enthusiastic about the New Deal than many Democrats. William Bullitt could be the secretary of the navy, and Frank Knox, another Republican from New Hampshire, would run the Commerce Department.42 It was obvious that Roosevelt had decided finally to get rid of Woodring and possibly Edison in the navy. One name that was not on his list of people to fire was Louis Johnson. As the weeks went on and the crisis deepened, the president and the secretary bandied about names. Morgenthau thought Winant a poor choice for War secretary and suggested Interior Secretary Harold Ickes or New York mayor Fiorello La Guardia. Roosevelt kept casting his net wider and wider, proposing the name of someone called “Simpson.” Morgenthau responded with disbelief and later dictated into his diary: “I mentioned this at home to Mrs. Morgenthau and Ruth Schmuck is a great friend of Simpson and she told Mrs. Morgenthau that he is violently anti-Roosevelt and makes the most sneering, dirty remarks about him whenever he gets the chance.” The suggestions kept coming but there was still no action, and by the end of April the British were evacuating their troops from Norway. “You just got to do something about your War Department,” Morgenthau told Roosevelt at lunch on April 29.

  “You are right,” said the president. “You are right.”43

  The retreat from Norway was the final political crisis of the Chamberlain government. Neville Chamberlain won a vote of nonconfidence in the Commons but by such a slim margin that it was clear his government could not go on. He invited the Labour Party leader Clement Atlee to form a national government with him, but Atlee declined. On the night of May 9, Chamberlain resigned and the nation learned he would be succeeded by the sixty-five-year-old Winston Churchill, a pugnacious veteran of so many governments that his tenure in the Commons stretched back to Gladstone. He had previously held such posts as first lord of the admiralty and chancellor of the exchequer, and he was best known for his unwavering opposition to the Nazis. Hours after he was sworn in by King George, the Germans launched a devastating attack on neutral Netherlands and Belgium. The western front was finally erupting into warfare.

  Roosevelt called together representatives from the military and the State and Treasury Departments a few hours after the German tanks began to rumble into the low countries. Morgenthau came to the “somber” meeting armed with the data on the Dutch, Belgian, and Luxembourgian holdings in the United States. He also had other loose sheets showing the various expenditures needed to equip the armed forces. He and the military had begun to examine what it would cost to fully clothe, arm, and pay an army, and he had preliminary figures showing that it would cost about $30 million to pay for fifteen thousand enlisted men. Still other loose sheets of information detailed figures such as the number of blankets in the Civilian Conservation Corps. (Morgenthau thought these blankets, 400,000 in stock and 855,000 on order, could be given to the army.) But he understood that there were too many scattered pieces of information being fed to the president. He needed to get the big picture on how to equip and pay for an army that could combat the three million German soldiers that were involved in the offensive in the Low Countries.

  After the meeting, Morgenthau approached General George Marshall and asked him a pointed question that arose from the data that had been trickling into his office: “I understand that you could put into the field today, fully equipped, 75,000 troops.”

  “That’s absolutely wrong,” shot back Marshall.

  “Well, how many could you put in the field?”

  “Eighty thousand.”44

  Morgenthau arranged to meet with Marshall the next day, a Saturday, so they could go over a budget for the army. He was less accommodating when Woodring approached to say he would help the Treasury secretary in any way possible. Morgenthau knew the War secretary’s days in his post were numbered, and he was brutal with his old nemesis. He asked if Woodring was criticizing him and then told Woodring that the War secretary’s own budget officer didn't know what he, Woodring, was talking about.45

  Morgenthau and Budget Director Harold Smith spent the weekend cloistered with Marshall on a military budget. The general had assembled plans for an $850 million budget to recruit, clothe, and equip a 750,000-man regular army. The figure was equivalent to about 10 percent of the entire 1941 budget the president had submitted to Congress five months earlier and was in addition to the government’s multi-billion-dollar airplane program. But Morgenthau, like Marshall, believed it was entirely appropriate given the strength and experience of the enemy. He also learned over that weekend that Woodring, Johnson, and Marshall had brought a similar proposal to Roosevelt in September, in the days after the Polish invasion, and the president had brushed them off. “The President has to take a great deal of responsibility that the Army is in as bad shape as it is,” Morgenthau dictated into his diary.46

  On Monday, May 13, Smith and Morgenthau accompanied the senior War Department personnel to the White House to present Marshall’s plan to the president. It did not take long for Johnson and Woodring to bicker over the funding, and Roosevelt rejected the proposal quickly. Morgenthau got the impression the president simply was not familiar with the problems facing the regular army and began to argue in favor of Marshall’s proposal. After he mounted what he described as a strong argument, Roosevelt suggested he butt out. When he persisted, the president turned to him with a mixture of a smile and a sneer and said, “I am not asking you. I am telling you.”

  “Well, I still think you are wrong,” said Morgenthau.

  “Well, you filed your protest.”

  Marshall held his ground, and eventually Roosevelt began to see the logic of his argument. It was a victory for both the military and Morgenthau. Between the meetings throughout the day, the brass approached Morgenthau constantly, with Marshall asking for advice on future dealings with the president. And at one point, Woodring, Johnson, and Smith all called on Morgenthau to take the lead in cobbling together the financial plans in the arms program.

  “You better do this, because after all you really are the Assistant President,” Johnson said to him.

  Morgenthau replied that if Johnson wanted to ruin his effectiveness completely, all he had to do was to say that out loud.

  “Oh, I won't say it to anybody, but that’s what you are.”

  Protest as he might, Morgenthau did dictate the incident into his diary the next day and also revealed he was considering recommending to the president that he strike a committee made up of senior army, navy, and commerce personnel to oversee the arms program. And Roosevelt could “possibly make me Chairman so I can make sure the program is coordinated with the Allied Program.”47 Yet he had grave doubts about the president’s airplane program.

  “He has come up again with the idea nobody is ready for,” he told William McReynolds, a Treasury official who had been seconded to the White House. “He wants 50,000 planes a year, just like that, which means, according to the War Department’s first fi
gures, building thirty plants of a million square feet each.” He then launched into a long rant about the need for a committee on aviation, the difficulty in getting machine-tool producers on board, and the fact that not a single US plane at the time could take on a German plane. “I have never seen such a mess,” he concluded.48

  By this time, the Allied program was thrown into doubt because no one knew if the Allies would exist much longer. The Germans were marching steadily westward, taking the Netherlands. On May 13, Churchill told the British people in a BBC address that he had nothing to offer them but “blood, sweat, toil and tears.” He also said his government’s policy would be to “wage war against a monstrous tyranny, never surpassed in the dark, lamentable catalogue of human crime.”49

  With his masterful political judgment, Roosevelt sensed the collapse of the smaller democracies was increasing American hostility to German aggression. On May 16, just three days after he had argued against Marshall and Morgenthau’s rearmament plan, the president sent a message to Congress requesting an appropriation of $896 million for an accelerated arms program. It was an astonishing figure, given that only five months earlier the president had submitted a budget that had asked for $1.8 billion in military expenditures, and that had been interpreted by most pundits as an excessive amount. “The ground forces of the Army require the immediate speeding up of last winter’s program to procure more equipment of all kinds, including motor transport and artillery, tanks, antiaircraft guns and full ammunition supplies,” Roosevelt said. “It had been planned to spread these requirements over the next two or three years. We should fill them at once.”50

  Morgenthau that night told his staff he felt good about the president’s message, but he was tired of having to fight everyone to get anything done. Johnson and he had had a harsh exchange after the president’s address, with the assistant secretary for War making it clear he would cooperate with Morgenthau but only because the president told him to.51 “You have to fight Woodring, Edison, Johnson, [Under Secretary of the Navy Lewis] Compton and all the rest of the stuff,” Morgenthau told his staff, explaining that he couldn't simply give the president a plan while the military people just talk about getting things done. “And if he had a Secretary of War and Navy, I would not have to do it.” He added that Roosevelt wanted him to continue to do the things he had been doing, such as coordinating the aircraft program and the orders from the allies. He asked his staff to give some consideration to one matter that had been bothering him: private manufacturers held the patents on their designs, so the production of each plane was limited to the capacity of the designer’s factory. Morgenthau asked his staff to look into whether the manufacturers could license out their patents and thereby increase capacity.52 All these tasks were taking on a new urgency. For by this time, the German army was advancing again, and it was doing so against the perilous democracies of Western Europe.