The Jew Who Defeated Hitler Page 14

  Usually so jocular, Ambassador William Bullitt’s tone was desperate as it reached Morgenthau through a crackling undersea cable on May 20, 1940, and described the horrors in France. Between three and five million refugees were trudging from the German frontier to Paris, the ambassador said. The French army was too busy fighting a rear-guard action to defend its citizens. Bullitt’s report that German soldiers were willfully machine-gunning children confirmed what Americans read in the newspapers. The American press had more reporters in France than in Poland, and the reports of German atrocities against America’s oldest ally resonated with the public. “The German tactical plan is manifestly to sow terror everywhere,” said the New York Times on May 21. Motorized units dashed into towns to create panic, wreaked havoc, then retreated. The Luftwaffe spread its bombs over a wide expanse—rather than in concentrated areas—simply to muddle the enemy. The result was massive civil upheaval and slaughter.1 Morgenthau had erected a map of Europe in the corner office and could see how the Nazis were now advancing. The British Expeditionary Force was pinned against the English Channel at Dunkirk, and the Germans were breaking through the resistance in Belgium and heading for virtually undefended Paris. “All this does is make me sick at my stomach,” Morgenthau dictated into his diary that evening. “What’s a person going to do? Got hard enough times here.”2

  Already overworked, Morgenthau responded with a flurry of tasks. He had J. Edgar Hoover, the young head of the Federal Bureau of Investigation, ensure wire taps were installed at the German embassy.3 He fielded a French request to assume an order of 144 Vanguard planes bound for Sweden—not a popular country as it supplied iron ore to the Germans.4 He moved immediately to get $20 million to the French and increase the shipment of goods. He initiated the new standards for airplane makers. All the while, as the Nazis poured deeper into France, he and Roosevelt negotiated with Congress on the 1941 budget and the arms-appropriation bill. Roosevelt offhandedly told him one day there was no hurry on some matter with the airplane program because “after all we will not be in it for 60 or 90 days.” In his notes, Morgenthau underlined the final four words. The president believed the country would be at war as early as mid-August 1940.5

  The vicious German advance began to erode isolationist sentiment across the country, even in the Midwest, which felt buffered from European and Asian strife. “There may be little left in the Middle West of the comfortable idea that this is merely another European war that can have little effect upon us,” wrote syndicated journalist Raymond Clapper.6 When famed aviator Charles Lindbergh told a radio audience the United States was in no danger of an assault from Europe, isolationists like Republican presidential aspirant Robert Taft applauded the speech, but moderates scoffed.7 “I am absolutely convinced that Lindbergh is a Nazi,” Roosevelt told Morgenthau a few days later.8 It all meant Roosevelt had actually underestimated popular sentiment when he submitted his military-appropriations bill. Congress began to proceed rapidly in approving the president’s request.

  America could not help but notice the Germans’ vast military superiority. Hitler on May 20, 1940, had invited three American journalists, including Pulitzer Prize–winner Louis P. Lochner of the Associated Press, to witness his air assault from the German side of the front. Lochner’s report said the Germans proved “war has been revolutionized by the air force.” The methodical German assault began with aerial-surveillance planes that returned with photographs to determine Allied troop strength, armaments, and movement. The Germans immediately responded by bombing key points, including towns, if necessary, to disrupt the troops and destroy infrastructure. Amid the resulting confusion, motorized ground forces attacked to add to the chaos and inflict casualties.9 Legislators in Washington now focused on the need for more planes. “As the debates proceed, the emphasis shifts more and more to air defenses, and it is obvious that this phase of the European war has captured the imagination of Congress,” said the New York Times.10

  On May 24, the British cabinet approved a massive evacuation at the Belgian port of Dunkirk, hoping to remove about forty-five thousand of its stranded troops. By June 2, a flotilla of small and large craft had evacuated almost 340,000 troops, converting an unqualified debacle into a qualified debacle, then into a propaganda boon. Though the Brits boasted of the miracle of the little boats, its army had lost thousands of men and the Germans had captured a trove of arms. Italy, led by Benito Mussolini, finally declared war on both France and Britain, posing new threats to British control of the Mediterranean. On June 5, the Germans outflanked the Maginot Line and began their final assault on France. Hitler’s empire would soon stretch from Poland to the Atlantic with a strong ally in Italy and a sympathetic government in Spain. All of Washington was galvanized into action. “Not since the United States entered the [First] World War has an American President been so completely supported by all political interests, with the possible exception of the days of economic emergency when this President first entered office,” wrote Arthur Krock in the New York Times.11 Most important for Morgenthau, the Battle of France transformed the entire budgetary debate in the United States.

  Morgenthau was the key administration official in both the budget and the young aircraft program. The president wanted to accelerate fundraising and arms production but still stressed that he wanted no millionaires created through the arms industry.12 He worked to bar legislation that would severely loosen the restrictions on profits in naval contracts.13 The president, Morgenthau, and congressional leaders admitted they would have to raise taxes, which would prove difficult in an election year and also risked quashing the nascent recovery. By the time Belgium collapsed, Morgenthau had agreed with Senate Finance Committee Chairman Pat Harrison to raise the debt limit with both the administration and Congress sharing the blame.14

  Congress set the military spending levels for 1941 with alacrity and far outdid Roosevelt’s request for an additional $895 million. By the time various revisions were added, the appropriation for the War Department soared to $1.8 billion and passed in the Senate on May 23 by a vote of seventy-four to zero. But that was only army funding.15 The next day, in a seventy-eight–to–zero vote, the Senate approved a $1.5 billion appropriation for the navy. Congress—which had been the main stumbling block to an ambitious armament program—had unanimously voted to spend $3.3 billion on its military, or almost 40 percent of the $8.4 billion budget FDR had submitted five months earlier. Hitler’s spring offensive sank Denmark, Norway, Belgium, the Netherlands, and France in short order, but it mobilized the US government, the most powerful financial apparatus in the world, with the full backing of the American people. Soon, Republican newspaper editor William Allen White, a Kansan known as the spokesman for Middle America, wrote Roosevelt: “As an old friend, let me warn you that maybe you will not be able to lead the American people unless you catch up with them. They are going fast.”16

  The president wanted to resurrect the excess-profits tax, knowing it would play well in an election year. But the Treasury omitted the tax when it proposed increasing personal, corporate, and alcohol taxes by 10 percentage points and adding a few cents to the gasoline tax, aiming to raise an additional $656 million annually. Gallup polls showed the public would accept higher taxes for national defense, so Harrison and Ways and Means Committee Chairman Robert Lee Doughton supported the Treasury plan.17 Morgenthau appeared before the Ways and Means Committee on May 31 to outline a financing program that called for a $3.7 billion deficit and requested a $3 billion increase in the borrowing limit. “What we had in mind is that the people would like to pay for the extraordinary armament program, that they would like to be taxed,” said the secretary at a press conference.18

  Morgenthau in late May proposed that all manufacturers standardize military aircraft to allow more large-scale production. Problems such as the retooling of secondary plants and the training of skilled labor remained, but production overall was expected to increase dramatically. “Officials of the United Aircraft Corp. state that i
n their conferences in Washington recently they had found Secretary Morgenthau highly sympathetic to their problems,” said the Wall Street Journal on May 24, reporting all major manufacturers supported the proposal.19 At Morgenthau’s suggestion, Roosevelt on June 3 appointed William B. Knudsen, president of General Motors, as the coordinator of machine tooling for the defense industries—one of the key shortfalls in the program. The media speculated Knudsen would eventually take over more of the aircraft and arms production brief. The secretary became so impressed with Knudsen’s efficiency that he put his name forward for War secretary. Roosevelt was dubious, telling Morgenthau the man spoke “in broken English” (which must have been truly dreadful, as FDR had tolerated Morgenthau’s parlance for so many years).20 By early June, automobile companies—which had so far remained sidelined from the aircraft program—agreed to investigate whether they could manufacture airplane engines. “We moved awful fast in the past 10 days,” Morgenthau told a press conference June 3, adding that he had almost taken care of all the problems associated with aircraft production.21

  Budget problems occurred when Doughton warned the new budget would not raise enough money to cover the increased arms production and Roosevelt wanted the new excess-profits tax included in the revenue bill. The president had called in New York tax lawyer Randolph Paul—who he'd tapped previously on tax matters—to devise a “most marvelous scheme” for a progressive tax on corporate profits based on the declared value of a company’s stock. Profits would be tax-free on the first 4 percent of the declared value. Then there would be a 1 percent tax imposed on profits up to 10 percent of the declared value of the stock. Once profits exceeded 14 percent of the declared value of the stock, the tax rate would be 99 percent.

  Morgenthau explained the scheme to his exhausted staff on the evening of June 3. The problems extended beyond the fact that it had come so late in the budget process. The declared value of stock was usually far less than a stock’s actual value. Under Paul’s model, almost all profits would be severely taxed. Even the Treasury’s liberal brain trust considered the plan punitive. It could endanger the entire tax bill in Congress and could offend arms producers, just as Morgenthau was finally winning over a broad range of manufacturers to the arms program. The Treasury was worried about punishing manufacturers when they were needed to win the most mechanized war in history. But Morgenthau intended to follow the chief’s orders.

  “I am sick and tired of the President giving orders and the people giving him the run around,” he told his staff, “and he is entitled to having his wish carried out, and this is the wish, and God damn it I am going to give it to Pat [Harrison] just the way I got it and to old Doughton too, and we will have to shout it four times, and I am going to give it.”22

  As usual, the length of a sentence indicated the strength of his fervor, and the Treasury staff prepared a proposal. Harrison advocated omitting the excess-profits tax for the time being and lowering exemptions on personal income tax instead. Roosevelt agreed but ordered Morgenthau to continue talks on excess profits and—once again—to ensure there were no war millionaires. The bill moved through Congress and passed both houses by overwhelming margins in mid-June, just as the Germans were entering Paris.

  The questions about war leadership that summer extended beyond whether Roosevelt would reoffer and encompassed the entire structure of the administration.

  “The critical problem at the moment in Washington is the organization of what may be called the high command, where decisions of transcendent political importance will have to be made almost immediately,” wrote the syndicated columnist Walter Lippmann. He argued that the presidency was not a man but an office, and without the proper structure the president lacked the power to ensure he carried out his duties.23 Roosevelt had to replace Harry Woodring and Charles Edison (who had decided to run for governor of New Jersey) and was under pressure to form an effective purchasing commission. There were only the Council of National Defense, which was a group of business executives with little more than titular authority, and the National Defense Advisory Commission, a loosely knit collaboration of cabinet members whose duties were never defined and which rarely met.24 Frank R. Kent said three critical departments had been effectively headless for two years—the navy because Edison was a stopgap appointment, the War Department because of the internal bickering, and the Commerce Department because Hopkins had been sick so often. He concluded that the situation “clearly cannot continue without lending color to the charges of fumbling incompetency which are made against the administration.”25

  Hopkins had served Roosevelt faithfully through tragedy and crisis. His wife, Barbara, had died of stomach cancer, then he was diagnosed with the same affliction, after which he suffered the effects of malnutrition. Though regarded as Roosevelt’s closest adviser, he had never fully performed his role as commerce secretary because he was too sick or he was acting as Roosevelt’s personal representative in foreign capitals. After war broke out, Hopkins had moved into the White House to help the chief plan for war. Roosevelt reportedly had considered placing him in charge of military production but scrapped the plan when advisers protested.26 In the summer of 1940, Roosevelt told Morgenthau that Hopkins would resign in a month, adding, “Well, you know, Hopkins is not well enough to go to the office.” When Morgenthau dictated this into his diary, he added, “I felt like saying I had known that for two years.”27 He refrained. He would bad mouth Hull, Woodring, and other insiders in front of the president, but he never did so with Hopkins.

  Woodring’s career finally ended in early June. The final incident began when Admiral John H. Towers, the chief of naval air, told Morgenthau the navy could spare fifty Curtiss-Wright Scout dive bombers for Britain and France, as it lacked the pilots to fly them. But the army—which was realizing the importance of dive bombers in the French campaign—had asked for them.

  “Nuts on the Army!” replied Morgenthau, asking if the navy could ship the planes to the Allies if he reached an arrangement with the manufacturers.

  “Of course, you realize we are subject to attack on the Hill,” replied Towers.

  “So are we all,” said the secretary. “Look what I went through a year ago.”

  Roosevelt signed off on the deal that afternoon and Morgenthau arranged to have the planes shipped to Halifax, Nova Scotia, where they would be picked up by a British aircraft carrier. Then on June 9, Morgenthau located 750 bombs to go with the planes. But Woodring and Johnson refused to release their bombs until they had direct orders from Roosevelt. At 7:25 that night, Morgenthau cabled Roosevelt aboard the USS Potomac seeking authorization. “Sorry to bother you at this time but we ought to have an answer tonight,” he said. “The French say they need seven-hundred fifty bombs which will be enough to last them for fifteen days.”

  “It seems obvious that bombs are a necessary part of plane equipment and should go along with the 50 Navy bombers,” replied Roosevelt in a cable the next day. “Show this to Woodring as authority to release.”28

  The next night, Morgenthau was able to call Arthur Purvis and tell him the order was going through. “Had the darnedest time,” he said.

  “You can't tell what this means abroad,” said a relieved Purvis. “It just means everything to them.”29

  The partnership of Morgenthau and Purvis was gaining recognition in the British government at this critical juncture in the island nation’s history. The “Morgenthau-Purvis channel” was regarded as the most effective means of getting what Britain desperately needed. When Lord Beaverbrook, head of British aircraft production, urged Lord Lothian, the British ambassador in London to go directly to the State Department to speed plane deliveries, Lothian replied that he and Purvis felt they should use “the Morgenthau channel,” which had worked so well in the past.30 And the British came to regard Morgenthau as a unique being in Washington. “He was sometimes referred to in the early correspondence as ‘our friend,’” said the British government’s official history of the war. “He was pr
epared to move heaven and earth when approached with a reasonable request.” One British official said Morgenthau was always ready “to work far into the night, every day, for us.”31 Even within the establishment circles in Washington, Morgenthau was known as Britain’s champion within the cabinet. “The Treasury, under Secretary Henry Morgenthau Jr., has always thought first of the broader aspects of the President’s foreign policy,” wrote columnists Joseph Alsop and Robert Kintner in the Washington Post. Morgenthau “hates to be taken in, and has never been soft with the British, but his strongest emphasis is on quick aid to Britain.”32 Purvis was also gaining more clout in Britain and was now regarded as something akin to an ambassador, only with greater practical power. “Never have wider powers to commit this country been delegated to any Mission, and indeed it is true to say that no Mission has ever carried so grave a responsibility,” one British minister told the House of Lords, referring to Purvis’s mission.33 Morgenthau described Purvis as “one of the rarest persons” he had ever known. “He had a pleasant Scotch burr and a whole chain of anecdotes about the Scot triumphing over the Englishman,” said Morgenthau. “‘It always takes a Scotsman to pull England out of a hole,’ he used to say.”34 They dined together often, and Purvis continually reminded his host that Britain’s problems were multiplying.