Lauchlin Currie

Lauchlin Currie was born in 1902 in West Dublin, Canada. His father was a merchant fleet operator and his mother, a schoolteacher. After two years at St. Francis Xavier University in Nova Scotia (1920-1922), he moved to England to study at the London School of Economics (LSE) where he came under the influence of left-wing economists such as Graham Wallas, Hugh Dalton, Richard Tawney and Harold Laski. Currie was also introduced to the theories of John Maynard Keynes.

In 1925 Currie moved to Harvard University. Currie lost most of his and his family’s money in the Wall Street Crash in October 1929. His Ph.D. thesis, Bank Assets and Banking Theories was completed in January 1931. According to Svetlana Chervonnaya, in two articles published in 1933 The Treatment of Credit in Contemporary Monetary Theory and Money, Gold and Incomes in the United States, 1921-32 , "Currie stressed the importance of control over the quantity of money, as opposed to the quantity or quality of credit or loans, and computed the first estimate of the income velocity of money in the United States." One of his students was Paul Sweezy.

Marriner Eccles, who worked under the treasury secretary Henry Morgenthau, was greatly influenced by the ideas of Currie, who worked for him as an advisor. Eccles went before the Senate Finance Committee in 1933. According to Patrick Renshaw, the author of Franklin D. Roosevelt (2004): "Though the young Mormon banker from Utah claimed never to have read Keynes he had nevertheless jolted Senate finance committee hearings in 1933 by urging that the federal government forget about trying to balance budgets during the depression and instead spend heavily on relief, public works, the domestic allotment plan and refinancing farm mortgages, while cancelling what remained of war debt."

Currie published The Supply and Control of Money in the United States in 1934. In November, 1934, President Franklin D. Roosevelt appointed Marriner Eccles as Governor of the Federal Reserve Board. As William E. Leuchtenburg, the author of Franklin D. Roosevelt and the New Deal (1963), has pointed out: "Eccles had hardly taken office when he helped draft a new banking bill which called for the first radical revision of the Federal Reserve System since its adoption in 1913. Eccles wished to lodge control of the system in the White House; lessen the influence of private bankers, who he believed had taken over the system; and use the Reserve Board as an agency for conscious control of the monetary mechanism. The 20,000-word banking bill introduced in February, 1935, reflected the thinking of Eccles and of certain members of his staff, especially the Keynesian Lauchlin Currie."

In 1935 Currie and Eccles drafted a new banking bill to secure radical reform of the central bank for the first time since the formation of the Federal Reserve Board in 1913. It emphasized budget deficits as a way out of the Great Depression and it was fiercely resisted by bankers and the conservatives in the Senate. The banker, James P. Warburg commented that the bill was: "Curried Keynes... a large, half-cooked lump of J. Maynard Keynes... liberally seasoned with a sauce prepared by professor Lauchlin Currie." With strong support from California bankers eager to undermine New York City domination of national banking, the 1935 Banking Act was passed by Congress.

In July 1939, President Franklin D. Roosevelt appointed Currie as his special adviser on economic affairs and became the first White House economist. On 28th January, 1941, Currie was sent on a mission to Chungking, China to meet Chiang Kai-shek. On his return, Currie recommended that China should be included in the government’s Lend-Lease program. He was put in charge of the program’s administration from 1941 to 1943. He was also involved in setting up the American volunteer air force as the Flying Tigers to fight for China in the war against Japan.

After the death of Franklin D. Roosevelt Currie did not join the Harry S. Truman administration. Instead he established his own import-export business, Lauchlin Currie & Company in New York City. This venture was not very successful and his situation was not helped when Elizabeth Bentley and Whittaker Chambers both claimed that Currie had been part of an espionage ring headed by Nathan Gregory Silvermaster. Currie appeared before the House of Un-American Activities Committee (HUAC) on 13th August, 1948. He denied these claims and no criminal charges were ever brought against him.

In 1950 he was asked to head the first of the World Bank’s general country surveys, in Colombia. After is publication he was invited by the Colombian government to return as adviser on implementing the report’s recommendations. He accepted the post and in 1954 married a local woman. Currie was called to appear before the McCarran Committee and when he refused to testify he lost his American citizenship.

The claims of Elizabeth Bentley and Whittaker Chambers were investigated by a former KGB officer, Julius Kobyakov: "I understand that Currie or Harry Dexter White, who were branded as subversives in the McCarthy era and stigmatised again by the VENONA cables, would hardly be considered heroes by the present day American historical establishment. But if a professional opinion is called for, as to whether those people were Soviet agents, my answer is no. It is easy to badmouth the people who no longer can defend themselves, and to overlook the fact that they in their own way may have helped the anti-Hitler coalition to win the bloodiest war in history."

Lauchlin Currie died of a heart attack in Bogota, Colombia, on 23rd December, 1993.

Primary Sources

(1) Julius Kobyakov, KGB Major General, letter to Roger Sandilands, Professor of Economics at Strathclyde University (22nd December, 2003)

Back in the late 80s I did an extensive research on the archive materials related to our intelligence work in the U.S. in the 30s and the 40s. From the scientific/historical point of view that was virtual “terra incognita”, but my interest was not purely academic. At that time as the deputy head of the American department I was interested in utilizing whatever positive experience could be gained from studying those archives. At the top of my list were, naturally, cases of our “penetration” of the White House, the State, the Treasury, etc. In this connection I examined the files on Lauchlin Currie (PAGE) and Harry Dexter White (LAWER/YURIST) and was disappointed.

There was nothing in the PAGE file to suggest that he had ever wittingly collaborated with the Soviet intelligence. The file itself was put together in the late 40s when the damage, wrought by defections of Bentley and Chambers, was being accessed.

In fact, Currie was no more than a sub-source (if my memory serves me right – in the orbit of Nathan Silvermaster). However, in the spirit of machismo, many people claimed that we had an “agent” in the White House. I believe, Akhmerov like anybody else was prone to that weakness. Hence, Gordievsky’s reference to his conversations with Akhmerov on that subject should be taken with a spade of salt.

Equally unimpressive was a file on White. There was no record that someone had pitched or otherwise recruited him and set the terms of his cooperation with the Soviet intelligence. There was nothing in the way of clandestine communications arrangements, etc. White for all practical purposes might be categorized as a sub-source, which not necessarily denigrates the quality and value of the information that was attributed to him.

But to categorize an individual as an agent or a spy we need to prove that he “wittingly” cooperated with the “foreign intelligence service”, and “fulfilled the tasks”, assigned to him. That’s how the Soviet intelligence defines its agents, and, I believe, that American intelligence works along the same lines.

Among the members of my profession there is a sacramental question: “Does he know that he is our agent?” There is very strong indication that neither Currie nor White knew that.