Erik Visits an American Grave, Part 792

This is the grave of Henry Morgenthau, Jr.

Born into the Jewish elite of New York in 1891, Morgenthau grew up well-connected. His father was a major financier and ambassador to the Ottoman Empire. He went to Exeter Academy and the Dwight School at a time when attending those schools as a Jewish-American was no doubt difficult. He went to Cornell and studied architecture and agriculture (quite a combo!), graduating in 1913. He took agriculture quite seriously, more that you might expect for someone of his financial and urban background. He owned a Christmas tree farm in upstate New York, but was basically a gentleman farmer. Still, he edited American Agriculturalist beginning in 1922 and was a big voice in the call for new conservation measures in American agriculture. A Democrat and close ally of another gentleman farmer, New York Governor Franklin Delano Roosevelt, Morgenthau served on a number of agricultural and conservation commissions in New York.

When Roosevelt went to the White House, he took Morgenthau with him, as head of the Federal Farm Board. In fact, Roosevelt was interested in naming him Secretary of Agriculture, but Henry Wallace had a much more fervent following and so the politics made sense to go in that direction. But he was a key financial advisor more importantly. He was also a close enough advisor that Roosevelt gave him the job of starting to open the path for diplomatic relations with the Soviet Union after the entire State Department leadership opposed the idea. Morgenthau was extremely hesitant here, figuring if he failed his career would be over, but Roosevelt backed him. He started conversations with Maxim Litvinov and once they went well, Roosevelt allowed him to step away and gave the rest of the job to the State Department under William Bullitt’s leadership. In 1934, Roosevelt’s Secretary of the Treasury, William Woodin, stepped down because of failing health. Roosevelt nominated Morgenthau to take his place. This made him only the second Jewish Cabinet official in American history. Serving for 11 years, he would become arguably the most influential Secretary of Treasury in American history.

Morgenthau was not necessarily a liberal. Within the bigger world of the New Deal advisers, he was on the center-right, closer to someone like Jesse Jones than to Rex Tugwell. He was a strong believer in balanced budgets and eliminating the national debt, which made his commitment to the more radical economics of the New Deal pretty limited. It doesn’t mean he was a conservative. For example, he was perfectly happy with the National Labor Relations Act because it strengthened the Democratic Party and didn’t cost the federal government any significant money. But long-term direct employment programs or holding large amounts of debt, these ideas would make Morgenthau distinctly uncomfortable. He was the main reason why Social Security was based on employer and employee contributions and not a government-funded program per se, which is why he supported cutting out farmworkers and other more He opposed the payment of the bonus for World War I veterans that had led to the Bonus Army under the Hoover administration and convinced Roosevelt to veto a renewed bill to pay it early, but then Congress overrode it. Worse, Morgenthau is who deserves the primary responsibility for the secondary depression in 1937-38 when he convinced Roosevelt to cut spending and attempt to balance the budget. On the other hand, there was hardly any bigger proponent of taxing the living hell out of the rich, though for Morgenthau those taxes were to be used for deficit reduction instead of social programs.

As the nation moved toward war, Morgenthau was a strong proponent of the economic embargo against Japan. He was also very bearish toward Germany, actually advocating the U.S. declaring war in 1938, which was certainly before nearly every other American. He was also a major advocate for the Lend-Lease Program. During World War II, Morgenthau was critical in the creation of the war bond system. Many of the Keynesians in the administration wanted to government to engage in deficit spending and tax increases to fight the war, but Morgenthau won that battle. He also angered the Federal Reserve bankers during this by ensuring it would support Treasury borrowing, undermining their traditional independence. Morgenthau also played a critical role in the creation of the postwar economy, chairing the Bretton Woods conference where the World Bank and International Monetary Fund were created. His assistant Harry Dexter White was more on the ground at Bretton Woods than Morgenthau, but that doesn’t mean the Treasury Secretary wasn’t still a critical figure.

Morgenthau used the full power of his office to try and help Jewish refugees, but he was seriously limited by the anti-Semitism within the rest of the American government, particularly the State Department. He appealed directly to Roosevelt for the creation of the War Refugee Board, which probably got about 200,000 Jews out of Europe near the end of the war. He also pushed hard to demilitarize Germany, fighting with generals over it. When news of the Morgenthau Plan, to basically turn Germany into an agricultural nation, it infuriated the military who thought it put the fight into the German soldiers to save their nation. There’s at least some evidence that this is true. But Morgenthau believed it was the correct position and he stuck to his guns. The night before FDR died, Morgenthau visited him in Warm Springs and asked permission to write a book about his plan. Roosevelt agreed and this became Germany is Our Problem, published in late 1945.

After Roosevelt died, Truman got rid of Morgenthau quickly. The Treasury Secretary tried to assert his authority in the government by demanding to be part of the Potsdam Conference and saying he would resign if he wasn’t allowed to attend. Truman basically fired him at that point. Not a good move by Truman. In the aftermath, Morgenthau largely dedicated his remaining years to Jewish charities and worked closely with the Israeli government to help with its finances. He died in 1967 in Poughkeepsie, at the age of 75. He donated the 86 volumes of his diaries to the FDR Library in Hyde Park, where they serve as a critical primary source about the upper echelons of the Roosevelt administration.

Henry Morgenthau, Jr., is buried in Mount Pleasant Cemetery, Hawthorne, New York.

If you would like this series to visit other Secretaries of the Treasury, you can donate to cover the required expenses here. Fred Vinson is in Pine Hill, Kentucky and George Humphrey is in Cleveland. Previous posts in this series are archived here.