The Jew Who Defeated Hitler Read online

  When Churchill and Roosevelt met, the prime minister immediately stressed that Britain was in perilous financial straits and needed assistance to carry out phase 2 of the war. He handed Roosevelt a document that asked for military donations in the first year of phase 2 to be maintained at their 1944 level and that foodstuffs and raw materials be added. In all, it would amount to $3 billion in additional contribution from the United States, over and above the $3.9 billion payment of 1944.53

  Morgenthau enjoyed tea with Eleanor Roosevelt when he arrived, then met with the president. “Say hello to your Uncle Henry,” Roosevelt told Fala when Morgenthau entered. He asked the secretary to meet with Lord Cherwell, Churchill’s science adviser and confidant, to discuss economic matters and invited him to a dinner of the senior delegates that night. The discussion over dinner began on economic matters, and Churchill again tried to persuade the president that Britain was in dire need of funds. Roosevelt would commit to nothing. “What do you want me to do, stand up and beg like Fala?” Churchill cried in desperation. As the evening wore on, Roosevelt finally asked Morgenthau to outline his plan for Germany, which the secretary was more than eager to do. Soon after he started, the prime minister began to mutter under his breath about the problems and scowl at some of Morgenthau’s points. “After I finished my piece he turned loose on me the full flood of his rhetoric, sarcasm and violence,” Morgenthau dictated into his diary. “He looked on the Treasury Plan, he said, as he would on chaining himself to a dead German. He was slumped in his chair, his language biting, his flow incessant, his manner merciless. I never have had such a verbal lashing in my life.”54

  The president said nothing until Churchill had finished, when he tried to lighten the atmosphere with a joke. Morgenthau believed it suited Roosevelt’s purposes to have his secretary draw Churchill’s wrath, thereby sparing the president himself. Morgenthau said little else and was later unable to sleep, certain he had failed in his effort to demilitarize Germany.

  However, things changed the next day. Morgenthau met Cherwell as instructed and found in him an unlikely ally. An eccentric Oxford don who often served as Churchill’s scientific adviser, Cherwell was known in London to be anti-Semitic, but Morgenthau found him “wonderful to work with.”55 “The Prof,” as he was known, said the prime minister obviously didn't understand Morgenthau’s point and that he himself had been surprised by the prime minister’s response. The Prof supported the Treasury position on Germany, and Morgenthau found they soon reached common ground on the financial questions. The British would receive $3.5 billion in munitions and $3 billion in other material in the first year, all under lend-lease (meaning it didn't have to be repaid).

  At noon, Morgenthau, Cherwell, Eden, and the two leaders met again. No doubt Cherwell had briefed the prime minister on the tentative agreement on financing, and it is likely that Churchill was more pleasant to Morgenthau because of it. Roosevelt lightened the atmosphere with a joke or two, and Churchill allowed Cherwell and Morgenthau to present a policy for Germany together. They produced a framework based on the Treasury proposal, and soon Churchill was dictating a policy in his own words based on Morgenthau’s plan. When he dictated the segment about deindustrializing the Ruhr, Roosevelt insisted he specify that the policy apply to all of Germany, not just the Ruhr.

  “You can't do this,” a shocked Eden said to Churchill. “After all, you and I publicly have said quite the opposite. Furthermore, we have a lot of things in London which are quite different.”

  Churchill and Eden argued about their policy while Morgenthau interjected to back up his newfound comrade, Churchill. FDR sat silently. The prime minister was suddenly adopting Morgenthau’s line that Britain would export more if it no longer had to compete with Germany. “The future of my people is at stake, and when I have to choose between my people and the German people, I am going to choose my people,” Churchill said. Morgenthau was surprised just how nasty he was with the foreign minister, but he himself was delighted. Churchill and Roosevelt initialed the draft, after which Eden sulked for the rest of the day. “Of course, the fact that Churchill has dictated this himself strengthens the whole matter tremendously,” Morgenthau said in his diary. “Naturally, I am terrifically happy over it as we got just what we started out to get.”56

  The next day, the two leaders also signed an agreement that Britain would receive $6.5 billion in aid under lend-lease phase 2. White understood that Churchill had backed the Morgenthau Plan only because he needed the secretary’s support for the lend-lease payments. Morgenthau deluded himself that there was only a slight link between the two agreements. After sitting in the president’s room and chatting with Roosevelt as they had over the years, Morgenthau returned to Washington the next day, where he proudly reported to his staff that the Quebec meeting was the crowning achievement of his career. He had guaranteed that German industrial capacity would be eradicated.

  Four days after the Quebec Conference, Morgenthau’s triumph began to crumble as Washington Post columnist Drew Pearson wrote the cabinet was divided over The Handbook of Military Government and Roosevelt had reprimanded Henry Stimson about the document. Soon, the Washington press corps was focusing on the German policy and the Treasury secretary’s role in the matter. With his office fielding phone inquiries into whether Morgenthau was now overseeing foreign policy, Arthur Krock told his readers the secretary was responsible only for financial matters and the planning for postwar Germany.1

  The Wall Street Journal soon reported the details of the Morgenthau Plan, adding it was not yet official policy and it was creating division within and outside the cabinet. Stimson privately told people that it amounted to Jewish retribution—a view shared by many. “Such a plan as that attributed to Mr. Morgenthau would shatter whatever economic balance will remain in Europe when peace comes,” said Raymond Moley, a former New Dealer who had become a bitter critic of the administration.2 Wall Street Journal columnist Frank R. Kent said Morgenthau has “no conceivable business whatever” dictating policy on what was obviously a military and foreign-affairs brief. A Washington Post editorial called it “the product of a fevered mind.”

  In Berlin, Joseph Goebbels considered the Morgenthau Plan proof the Jews were planning to harm Germany if the country fell. “Roosevelt and Churchill Agree to Jewish Murder Plan!” screamed a headline in the Völkischer Beobachter newspaper. German radio broadcast that Roosevelt’s bosom friend Morgenthau, the “spokesman for world Judaism,” was “singing the same tune as the Jews in the Kremlin”—dismember Germany, destroy her industry and “exterminate forty-three million Germans.”3 Even after it was clear the Morgenthau Plan was not official policy, Goebbels publicized it. “Germany will obtain a peace deserving of the name only if she defeats the plans of an enemy who is determined to convert Europe into a colony of Jewish high finance and bolshevism by crippling and depopulating the heart of the continent,” said the Völkischer Beobachter on October 8, warning that Germany was in a life-and-death struggle against “these cannibals.”4

  In Washington, it was soon clear that Roosevelt was wavering. “Familiar signs point to the abandonment by the President of Secretary Morgenthau’s Carthaginian post-war plan for Germany, which was briefly ascendant here and got much encouragement at Quebec,” said Krock on September 29. The “usual high sources” were passing out word that FDR didn't like the plan after all, he said, and foreign and military policies would be retained by the State and War Departments, respectively.5

  Morgenthau tried for a month to find the source of the leaks with no success. He and Hopkins both believed they came from Stimson and the War Office. The secretary was also furious the president wasn't sticking by him. “This isn't the first time that I have been the whipping boy for the President,” he told his staff after the second story by Krock appeared. Yet he was also confident that the president still agreed with him.

  In no mood to back down, he took his press clippings on the matter and went to the White House, where he was asked to wait
outside the Oval Office. A few minutes later Anna Boettiger appeared and said her father was unable to see him. He pushed the point with the woman he had known since her childhood, asking her to show the clippings to the president. She led him out saying the president didn't want to see him.6

  Later that day, the president told a press conference that there was no breech within cabinet and he had asked trusted New Dealer Leo Crowley to look into postwar Germany. He then told Cordell Hull privately that the State Department alone would deal with the matter. And when he met Stimson on October 3, the president said with a cheeky smirk, “Henry Morgenthau pulled a boner.” According to Stimson’s diary, the president said he had never intended Germany to become a pastoral society. Stimson showed him the paper from Quebec he had initialed, and an astonished Roosevelt said he didn't know how he could have signed it.7

  Morgenthau believed the president had told the press about Crowley simply to quiet things down and decided to remain silent until after the election. “I'd like to mark time and see what happens,” he told his staff on October 5. “I don't want to do much between now and the seventh of November.”8 But he wanted to be prepared, so he ordered Harry Dexter White, Ansel F. Luxford, and Josiah DuBois to draft a book explaining his position and rebutting the perception he was acting out of Jewish vengeance and had bought off Churchill with $6 billion in taxpayer funds.9

  As the Western Allies’ advance toward Germany began to slow, some observers said the Germans were fighting with renewed vigor because they feared defeat would lead to the implementation of the Morgenthau Plan. Republican presidential candidate Thomas Dewey charged the plan “put the fight back into the German Army” and was worth as much as “ten fresh German divisions.” He added that “the blood of our fighting men is paying for this improvised meddling.”10

  The charge shocked Morgenthau. Not only was he a raging patriot, but also his son and namesake was then with Eisenhower’s advance camp heading toward Germany. Henry III had begun to volunteer for dangerous missions whenever possible to prove his mettle and fight his image of being the son of privilege. The Morgenthaus had almost lost Robert with the sinking of the Lansdale, and now young Henry—who bore the same name as the author of the Morgenthau Plan—was in an active theater. Morgenthau worried about what would happen if the boy were captured and what effect the stress of having boys in combat was having on his feeble wife.

  On November 13, Morgenthau asked General Edward Greenbaum if there was any way to change the name on Henry III’s dog tags. “If the Germans captured Henry they undoubtedly would be extremely cruel to him,” he recorded in his diary. The general at first said it would be impossible, that it would contravene the Geneva Convention, but he discussed it with Assistant Secretary of War John J. McCloy. Together, they warned Morgenthau the army would have to disown Henry if he were captured and the Germans realized he had false identification. They proposed transferring him to a less dangerous location. “I said that I would unalterably oppose any such procedure, that Henry would never forgive me and that I would have no part of it,” Morgenthau said, making them promise they would not transfer the lad.11

  Franklin Roosevelt won an unprecedented fourth term as president of the United States on November 7, 1944, defeating Thomas Dewey 432 to 99 in the Electoral College. On November 30, Cordell Hull resigned as the longest-serving secretary of state in the country’s history and claimed the Nobel Peace Prize the next year for his role in the founding of the United Nations. He was succeeded by Edward Stettinius, the former US Steel executive. Morgenthau told Roosevelt that Stettinius was the best man to succeed Hull, and the new secretary of state wrote with profuse thanks when he learned of it.12

  With the election decided, Morgenthau launched his sixth war-bond drive on November 20, aiming to raise $14 billion at interest rates of 2.5 percent or less.13 He had to keep on raising money because the unimaginable costs of World War II would continue mounting for at least another year and a half. “During the first six months following the armistice in World War I, expenditures were slightly greater than in the six months preceding the armistice,” he told the public.14 It was the first Christmas-season bond drive and it was a smashing success, raising $20.4 billion by Christmas Eve. The secretary himself announced the success by calling three wire-service reporters into the corner office to thank them for their diligence in covering the bond drives.15 The final tally in the drive was $21.6 billion—54 percent more than the target.16

  The president’s budget address on January 9, 1945, predicted $70 billion in war expenditures in the fiscal year that would end June 30, 1946, down $19 billion from the previous fiscal year. “The overall cost of the war to this country from 1941 through the 1946 fiscal year was estimated by Mr. Roosevelt at $450 billion,” said the New York Times the next day.17 Morgenthau, days after the address, said the war had already cost $238 billion, a figure due to reach $289 billion by June 30. He noted that 46 percent of the cost was paid through taxes, and the number of taxpayers had increased from four million before the defense program to fifty million in 1945. That means that it went from 3 percent of the total population to 36 percent. “Never before has a democracy taxed itself on such a broad base,” he said, adding more taxes were still needed.18

  Morgenthau pleaded so strongly for more taxation because his office and Congress were once again negotiating a revenue bill. In the middle of these talks, Jimmy Byrnes, head of the Office of Economic Stabilization, introduced his own tax proposal without consulting the Treasury. This time, Byrnes was roundly criticized for interfering when the parties were making progress. “We sincerely hope that Director Byrnes’ ill-timed and unwarranted attempts to put over a tax plan of his own will not upset the new entente cordiale,” said a Washington Post editorial.19

  It was apparent that the war would endure into 1945, so many of the suppositions of the Quebec agreement, which assumed phase 2 of lend-lease would begin in 1944, were no longer valid. That meant Britain and America once again negotiated on lend-lease financing, and Morgenthau in November met with his old antagonist John Maynard Keynes to discuss the matter. Morgenthau told White—who warned of the limitless demands of the British for financial aid—that the United Kingdom had proved a “good moral risk” and it was necessary to help a neighbor who had fought so valiantly. Morgenthau’s vision of the postwar world called for a strong United Kingdom, but the president was growing uncomfortable with the “Spirit of Quebec” and annoyed at Churchill for propping up southern European monarchs. Morgenthau told Stettinius the president was acting as if he had never heard of the Quebec agreement. He vowed to send a delegation to the White House to establish firmly what the Quebec agreement meant.20

  In mid-November, Keynes wrote Morgenthau complaining that no country in the empire except Canada contributed to the British finances, yet the United Kingdom had to support a large military presence in India and in the Middle East. (It was not the best opening argument, for Congress and the administration both cringed at the thought of lend-lease payments supporting the empire.) Keynes argued that these forces had shown their value in North Africa. Meanwhile, the United Kingdom squandered its gold reserves before the United States began lend-lease and withdrew from export markets under the terms of lend-lease. “No doubt, the above makes collectively a story of financial imprudence that has no parallel in history,” wrote Keynes. “Nevertheless, that imprudence may have been a facet of that single-minded devotion, without which the war would have been lost. So we beg leave to think that it was worthwhile—for us, and also for you.”21 But many in Washington called for restraint in helping the Allies, especially the British, who were using their precious finances to maintain the empire. Arthur Krock reported that financier Bernard Baruch had warned the president that Americans may be “weakening ourselves while trying to help the rest of the world.”22

  On November 22, the United States said it would give the British about $5.5 billion in the first year of phase 2, a reduction from the $7 billion agreed to at Q
uebec. What’s more, it demanded the British maintain their export ban, though the two countries had agreed at Quebec it would be relaxed. As part of lend-lease, the British had agreed not to export goods and compete with American industry while the country was receiving US aid. The British obviously wanted the ban ended as soon as possible, and the Quebec talks had produced a relaxation in the policy. But now that looser policy would be delayed. Some in the British government, like Lord Cherwell and John Anderson, nonetheless thanked Morgenthau for his support. Keynes understood that Morgenthau had done his best but failed to budge Roosevelt. “Mr. Morgenthau has easier access to [the president's] presence than to his mind,” he said.23

  The dubious regime of General Chiang Kai-shek, meanwhile, continued to badger Morgenthau and the military for money for such things as its alleged military efforts. In particular, the two sides disputed what the United States owed for the Chengtu airfield, about one hundred miles west of Chungking, and whether the Americans should pay at the official exchange rate. Under Secretary of the Treasury Daniel Bell in July 1944 calculated a $115 million payment would be fair, or a net $90 million since the US Army had already paid $25 million. But Finance Minister H. H. Kung insisted his government had been promised $25 million a month in aid, and that did not include the cost of airfields. In fact, he said Roosevelt had personally promised at Cairo to pay for the Chengtu airstrip, which the Chinese valued at $200 million. The Americans raised their offer to $100 million, then $125 million, then to $185 million in late October. The negotiations became acrimonious and extended for months as economic conditions deteriorated in China. They agreed to the last American offer in December 1944.24