Mole suspect 'busted'

In August 1948, Harry Dexter White, Bretton Woods conference supremo and former Assistant Treasury Secretary, appeared before a hostile House Un-American Activities Committee to defend his reputation. Two former spies, Elizabeth Bentley and Whittaker Chambers, alleged that he had spied for Russia. Bentley had never met White, but said his colleagues had passed information to her from him. Chambers claimed that White gave him documents for the Soviet underground in the 1930s. White, though recovering from a series of heart attacks, passionately defended his reputation as a champion of democracy and peace. His performance impressed even his interlocutor, Congressman Richard Nixon. But the strain was too great. He died three days later, and a contrite Huac retreated from the case.

But J. Edgar Hoover refused to retreat. He had opposed White's appointment as US executive director of the International Monetary Fund and knew, from the secret "Venona" project, that his name appeared in Soviet cables. The case was resurrected and White's bronze bust was removed to an IMF basement. When "Venona" was declassified in 1995, there was a recrudescence of neo-McCarthyite triumphalism: "Now we know," declared prominent historians.

Meanwhile, Bruce Craig had acquired an encyclopaedic knowledge of White and was alarmed at the partisan literature spawned by Venona. With overwhelming evidence of espionage by some of White's friends, guilt by association is easy to assign. And for those seeking to justify the Cold War, the more spies "unmasked" the better.

But Craig shows that the more lurid allegations do not stand up: White was not responsible for provoking the attack on Pearl Harbor to divert the Japanese from Soviet borders; he did not subvert US policy when in 1944 the Soviets were given occupation currency plates; he was not acting on Soviet instructions when discussing the possible pastoralisation of Germany; and his advice on China was designed to keep the Kuomintang fighting Japan, not to promote Communist revolution.

Philosophically, he was a Keynesian New Dealer, not at all attracted to the Communist creed. As a dedicated Rooseveltian internationalist, his energies were directed at continuing the Grand Alliance and maintaining peace through a liberal trade regime. He believed that powerful multilateral institutions could avoid the mistakes of Versailles and another world depression. Nothing supports Robert Skidelsky's claim, in his Keynes biography, that White wanted to cripple Britain to help the Soviets.

According to Craig, White's passionate commitment to the noble ideals of Bretton Woods and the United Nations led him to talk too freely to the Russians - in particular to a special Soviet agent with whom he socialised openly at Bretton Woods and later in private - to try to keep them on board. Craig believes this was a "species of espionage", but espionage nonetheless.

He thus arrives at a strange "treasonable doubt" about a man striving to give a Rooseveltian New Deal to the whole world. Bentley was a liar, Chambers a chronic fantasist and the Venona decrypts fragmentary and ambiguous. Nevertheless, Craig thinks they could provide sufficient corroboration to convict White in a court of law. But as his actions were all consistent with administration policy, Craig clears him of disloyalty.

Happily, White's bust now sits alongside Keynes' in the IMF boardroom.

Roger Sandilands is professor of economics, Strathclyde University.