Lin Hui: Soviet spies in the U.S. Treasury Department did the CCP a big favor | The Epoch Times

[The Epoch Times, November 21, 2023]Not long ago, I saw a Twitter account certified online as “Zhang Muzhi” saying something like this: Descendants of Xie Chi, the former Secretary-General of the Republic of China, believe that during the civil war between the Kuomintang and the Communist Party of China, The main reason for the economic collapse was not the huge financial and material resources consumed by the war against Japan, but two other key factors. One is that Soviet spies within the US government did the CCP a big favor. The other is Ji Chaoding, who advocated the issuance of gold yuan bonds and the abolition of the legal currency of the Republic of China, and was a member of the Communist Party of China.

The Secretary-General of the Republic of China is equivalent to the current President of the Executive Yuan and the Premier of the State Council of the Communist Party. If Xie Chi’s descendants have this view, they should be informed by their ancestors who know the inside story. So, what’s going on inside?

Soviet spies who helped the CCP a lot

According to Xie Chi’s descendants, in 1945, that is, after the end of the Anti-Japanese War, everything was in ruins, and the government of the Republic of China requested economic assistance from the United States. U.S. Treasury Secretary Morgenthau agreed to provide $7 million in aid. After the Republic of China government learned of the news, it immediately sold all its gold reserves to stabilize the economy.

However, until 1947, U.S. aid was still delayed. The CCP spreads the propaganda that US aid was corrupted by the four major families of Jiang, Song, Kong and Chen in order to stir up hatred. Later, the Republic of China sent someone to ask the U.S. Treasury Secretary, and Morgenthau was also puzzled as to why the aid had not been received. After investigation, it was discovered that Harry Dexter White, then the U.S. Deputy Secretary of the Treasury, was a Soviet spy who had secretly withheld the aid.

White was born on October 29, 1892 in Boston, Massachusetts. He is a descendant of Lithuanian Jewish immigrants. He joined the U.S. Army in 1917 and served in France during World War I with the rank of lieutenant. It was not until the age of 30 that he began to attend college, first at Columbia University and then at Stanford University, where he received his first degree in economics. At the age of 38, he received a PhD in economics from Harvard University and taught for four years.

In 1934, White got a position in the Treasury Department and gradually became Treasury Secretary Morgenthau’s top adviser. Especially in terms of international financial affairs with China, Japan, Latin America and the United Kingdom, Morgenthau was very willing to listen to his opinions. He also participated in the formulation of the U.S. financial policy against the allies during World War II, and participated in and led the Bretton Woods Conference in 1944 to establish the post-war economic order. The conference adopted his vision of the post-war financial system and abandoned the vision of the British representative Keynes. At Bretton Woods, White was the chief architect of the International Monetary Fund and the World Bank.

Why did such an elite who received higher education in the United States and enjoyed the American democratic system become a Soviet spy? How was it exposed?

White’s identity was exposed by Elizabeth Terrill Bentley, a Soviet spy who defected to the United States. On November 7, 1945, Bentley told an FBI investigator about the Communist Party’s intelligence network in Washington that in late 1942 or early 1943 she learned from two Soviet spies that they were filming and One of the sources of intelligence passed through her to the KGB chief was White.

FBI Director Hoover, who learned of this inside information, sent a report to General Harry H. Vaughan, then President Truman’s military assistant, the next day, stating that “a series of U.S. government employees have Personnel are providing data and intelligence to persons outside the federal government, who in turn pass this information on to Soviet government espionage agents.” The letter listed a dozen suspects provided by Bentley. That person was Harry Decter White.

In fact, information shows that as early as March 1945, during a meeting with another defected Soviet spy, Whittaker Chambers, the U.S. State Department security officer Raymond Murphy recorded Chambers’ comments to Whittaker. He was identified as “a rather cowardly party member who escaped” and he brought many underground operatives into the Ministry of Finance. But such rhetoric did not attract the FBI’s attention.

It was not until Bentley provided the intelligence network of the US Communist Party that exposed White’s identity that the FBI began to investigate. Based on the cables deciphered by the “Winona Project”, the FBI determined the list of American communist spies and obtained evidence of White’s espionage activities. The Venona project was a long-term secret intelligence collection and analysis mission conducted by the United States and British intelligence agencies to intercept and decipher messages sent by Soviet intelligence agencies (mostly during World War II). .

The FBI wrote a report titled “Soviet Espionage in the United States” and submitted it to the White House, Attorney General, and State Department on December 4, 1945. However, for unknown reasons, six weeks later, on January 23, 1946, Truman nominated White to serve as the United States Director of the International Monetary Fund. The FBI responded by submitting a 28-page memorandum specifically targeting White and his contacts. The White House signed it on February 4, but White’s nomination was not withdrawn and was removed by the Senate on February 6. Approved, the Senate was unaware of the charges against White at the time.

Six years later, Truman testified about the nomination that White had been “immediately removed from official government duties” after receiving the intelligence, first from the Treasury Department and then from the International Monetary Fund.

But in fact, White served at the IMF until June 19, 1947—more than two years after the FBI alerted the White House about him. He abruptly resigned that day and quickly emptied his office, just as Attorney General Tom C. Clark ordered a federal grand jury investigation into Bentley’s allegations.

White was arrested in 1948. On August 13, White testified before the House Un-American Activities Committee, denying that he was a member of the Communist Party or a Soviet spy. Because the most critical evidence at the time could not be made public because it involved the Soviet Union’s vast intelligence network in the United States, White was able to defend himself and temporarily acquit himself.

Oddly enough, after concluding his testimony, White suffered his first heart attack. So he left Washington to recuperate on his farm in New Hampshire. However, as soon as he arrived, he suffered another heart attack. Two days later, on August 16, 1948, White died at the age of 55. The autopsy revealed that he had overdosed on digitalis (a drug used to treat heart disease).

At that time, some people suspected that the cause of White’s death was a silence operation carried out by Soviet agents, but due to lack of evidence, the investigation was ultimately closed.

After White’s death, the results of the declassification of the “Venona Project” revealed that White was indeed crucial to the development of the Soviet espionage network in American politics and that there was political leakage, that is, the leaking of Treasury Department documents to the Soviet Union. In Bentley’s 1953 testimony, she claimed that White was responsible for the Treasury Department’s move to hand over to the Soviet Union military mark printing plates used by Allied forces in occupied Germany, so that the Soviets could use waste paper to print currency. The occupied territories created a black market phenomenon and caused severe inflation, causing US$250 million in losses to the United States.

In addition, White’s identity as a spy can be found in Soviet KGB files. White’s specific activities are listed in “Alexander Vassiliev’s Notes and Harry Dexter White”, a record of KGB chief Vassiliev. It is reported that he was the Soviet Union’s highest-ranking spy within the U.S. government.

In the book “The Venona Project” written by American historian John Earl Haynes and published in China in 2004, it was mentioned that during White’s tenure at the Treasury Department, at least 11 people in the Treasury Department A Soviet spy. Isn’t it horrifying that the U.S. government has been infiltrated to such a terrifying extent?

It is said that White was willing to serve as a spy for the Soviet Union because he admired the Soviet Union. Historian Sam Tanenhaus wrote of his spying for the Soviet Union: “White’s character was a mixture of arrogance and timid fear, and he was more willing to submit grand memos on monetary policy… …rather than the usual reports on high-level conversations at the Treasury Department available to Bykov[a GRU agent]and his superiors in Moscow.”

Interestingly, the book “The Relationship between the Kuomintang and the Communist Party in the Grand Chess Game” published in mainland China also clearly pointed out that White was a Soviet spy. On page 69 of the book, quoting English information, there is this statement: Morgenthau sent representatives to Yan’an to create cooperation between the Communist Party and the United States, and White, the senior official in the Ministry of Finance responsible for aid to China, was a Soviet spy. Under the influence of this group of communists, Morgenthau had long believed that the Kuomintang was hopeless and the CCP was full of vitality. Therefore, the Ministry of Finance tried its best to delay the realization of the US$500 million in aid funds passed by Congress in early 1943. So far, only US$19 million worth of gold has been shipped, which is a drop in the bucket and cannot have the effect of rescuing the market at all. The National Government’s gold reserves are already exhausted. All. “We delayed it as long as our authority allowed,” White said proudly.

This shows that it is true that White, as a Soviet spy, helped the CCP and harmed the Republic of China government, and that White should have acted under instructions from the Soviet Union. It is also a high probability that White died in a KGB assassination.

White also did one thing to help the CCP and destroy the economy of the Republic of China government, which was to recommend Ji Chaoding, an underground member of the CCP, to the Republic of China government to be in charge of the economy. This is another reason mentioned by Xie Chi’s descendants. We will talk about the story of Ji Chaoding in the next article.

Editor in charge: Pushan