Lauchlin Currie
Encyclopedia
Lauchlin Bernard Currie (October 8, 1902 – December 23, 1993) was a Canadian
-born U.S.economist
from New Dublin, Nova Scotia
, Canada
, and allegedly an agent of espionage for the Soviet Union
.
As a naturalized
American
citizen, Currie served as White House
economic adviser to President
Franklin Roosevelt during World War II
(1939 to 1945). From 1949 to 1953, he directed a major World Bank
mission to Colombia
and related studies. Information from the VENONA project
references him in nine partially decrypted cables. He became a Colombian citizen
after the United States refused to renew his passport
in 1954.
where most of his schooling was done. He later attended schools in Massachusetts
and California
where he had relatives. In 1922, after two years at Saint Francis Xavier University in Nova Scotia, Currie moved to the United Kingdom
to study at the London School of Economics
under Edwin Cannan
, Hugh Dalton
, A. L. Bowley, and Harold Laski
.
From the LSE, Currie moved to Harvard University where his chief inspiration was Allyn Abbott Young
, then president of the American Economic Association
. At Harvard, he earned his Ph.D.
in 1931 for a dissertation on banking theory.
, John H. Williams, and Joseph Schumpeter
. Paul Sweezy
was one of his students in money and banking at Harvard.
In 1934, Currie constructed the first money supply
and income velocity series for the United States. He blamed the government's "commercial loan theory" of banking for monetary tightening in mid-1929
, when the economy was already declining, and then for its passivity during the next four years in the face of mass liquidations and bank failures. Instead, he advocated control of the money supply to stabilize income and expenditures. In a January, 1932 Harvard memorandum
on antidepression policy, Currie and fellow instructors Harry Dexter White
and Paul T. Ellsworth urged large fiscal deficits coupled with open market
operations to expand bank reserves, as well as the lifting of tariff
s and the relief of interallied debts.
's "freshman brain trust" at the U.S. Treasury
where he outlined an ideal monetary system for the United States which included a 100-percent reserve banking plan to strengthen central bank control by preventing member banks from lending out their demand deposit liabilities, while removing reserve requirements on savings deposits with low turnover. Later that year, Marriner Eccles moved from the Treasury to become governor
of the Federal Reserve Board. He took Currie with him as his personal assistant. Harry Dexter White
, another "freshman brain trust" recruit, became a top adviser to Secretary of the Treasury
Henry Morgenthau
, and for some years White and Currie worked closely in their respective roles at the Treasury and the Federal Reserve.
Soon afterwards, Currie drafted the Banking Act of 1935 which reorganized the Federal Reserve and strengthened its powers. He also constructed a "net federal income-creating expenditure series" to show the strategic role of fiscal policy
in complementing monetary policy
to revive an economy in exceptionally acute, persisting depression. After four years of recovery, the economy declined sharply in 1937. In a four-hour interview with President Roosevelt, he was able to explain that the declared aim of balancing the budget "to restore business confidence" had damaged the economy. This was part of the "struggle for the soul of FDR" between the cautious Morgenthau and the expansionist
Eccles. In April 1938, the president asked Congress
for major appropriations for spending on relief and public works. In May 1939, the rationale was explained in theoretical and statistical detail by Currie ("Mr. Inside") and by Harvard's Alvin Hansen
("Mr. Outside") in testimony before the Temporary National Economic Committee to highlight the role of government deficits in the recovery process.
, and the speeding up of peacetime and wartime production plans. In January 1941, he was sent on a mission to China
for discussions with Generalissimo
Chiang Kai-shek
and Chou En-lai, the Communist representative in the Chinese wartime capital of Chungking. On his return in March, he recommended that China be added to the lend-lease
program. He was put in charge of its administration under the overall direction of FDR's special assistant Harry Hopkins
.
Currie was also assigned to expedite the American Volunteer Group
(Flying Tigers), in which U.S. military pilots were released for combat under Claire Chennault, an adviser to the Chinese Air Force
against Japan
. Currie also organized a large training program in the United States for Chinese pilots. In May 1941, he presented a paper on Chinese aircraft requirements to General
George C. Marshall
and the Joint War Board. The document, accepted by the Board, stressed the role of an air force in China could play in defending Singapore
, the Burma Road
, and the Philippines
against Japanese attack. It also pointed to its potential for strategic bombing of targets in Japan itself. These activities, together with Currie's work in helping to tighten sanctions against Japan, are said to have played a part in provoking Japan's attack
on Pearl Harbor
.
Currie returned to Chungking in July 1942 to try to patch up the strained relations between Chiang and General Joseph W. Stilwell, commander of U.S. forces
in China. Currie was one of several of FDR's envoys who recommended Stilwell's recall and reassignment. Back in Washington
, Roosevelt asked Currie to put his case to General Marshall, but the General dismissed the idea. Only much later did Marshall concede that his protégé's continued presence in China was indeed a mistake. Stilwell was recalled in October 1944.
Currie appears to have been involved in carrying out orders from Roosevelt to get U.S. intelligence services to return Soviet cryptographic
documents to the Soviet Union and to cease decoding operations.
From 1943 to 1944, Currie ran the Foreign Economic Administration
where he played a major role in recruiting or recommending economists and others throughout the Washington administration. Prominent examples are John Kenneth Galbraith
, Richard Gilbert, Adlai Stevenson, and William O'Dwyer
. In early 1945, Currie headed a tripartite (U.S., British, and French
) mission to Bern to persuade the Swiss
to freeze Nazi
bank balances and stop further shipments of German
supplies through Switzerland to the Italian
front. He was also involved in loan negotiations with the British and the Russians, and in preparations for the 1944 Bretton Woods conference
(staged mainly by Harry Dexter White
), which led to the creation of the International Monetary Fund
and the World Bank
.
After the war, Currie was one of those blamed for "losing" China. As far back as 1939, Currie had been identified by Communist defector, Whittaker Chambers
, in a meeting with Roosevelt security chief Adolf Berle, as a Soviet agent. Elizabeth Bentley
, like Chambers, a former Soviet espionage agent, had claimed in Congressional testimony in 1948 that Currie and Harry Dexter White had been part of the Silvermaster ring
. Though she had never met Currie and White personally, Bentley testified to receiving information through cutouts (couriers) who were other Washington economists (later determined to be Soviet agents). White and Currie appeared before the House Committee on Un-American Activities in August 1948 to rebut her charges. White, who was also implicated as a source of Soviet intelligence (later confirmed in VENONA intercepts and review of Soviet KGB notes of NKVD
official Gaik Ovakimian
) had a serious heart problem, and died three days after his appearance at the hearings.
Currie was not prosecuted and in 1949 he was appointed to head the first of the World Bank's comprehensive country surveys in Colombia
. After his report was published in Washington in September 1950, he was invited by the Colombian government to return to Bogotá
as adviser to a commission established to implement the report's recommendations. In December 1952, Currie gave evidence in New York
to a grand jury
investigating Owen Lattimore
's role in the publication of secret State Department
documents in Amerasia
magazine.
However, when Currie, as a U.S. citizen, tried to renew his passport in 1954, he was refused, ostensibly on the grounds that he was now residing abroad and married to a Colombian. However, he may have in fact been identified with the then-secret VENONA project
, which had decrypted wartime Soviet cables where Currie was identified as a source of Soviet intelligence. He appears in the VENONA cables under the cover name 'PAGE', and in Soviet intelligence archives as 'VIM' and an unwitting source for the Golos
and Bentley spy networks.
After a military coup
in Colombia in 1953, Currie retired from economic advisory work and devoted himself to raising Holstein cattle
on a farm outside Bogotá, and developed the highest-yielding dairy herd in the country. With the return of civilian government in 1958, President Alberto Lleras personally conferred Colombian citizenship
upon him and Currie returned to advisory work for a succession of Colombian presidents. Between 1966 and 1971, he went abroad as a visiting professor in North America
n and British universities: Michigan State
(1966), Simon Fraser
(1967–1968 and 1969–1971), Glasgow
(1968–1969) and Oxford
(1969). He returned permanently to Colombia in May 1971 at the behest of President Misael Pastrana Borrero
to be the architect of a new "Plan of the Four Strategies", with focus on urban housing and export diversification. The plan was implemented, with new institutions playing a major role in accelerating Colombia's urbanization.
Currie was chief economist at the Colombian National Planning Department from 1971 to 1981, followed by twelve years at the Colombian Institute of Savings and Housing until his death in 1993. There he doggedly defended the unique housing finance system (based on "units of constant purchasing power" for both savers and borrowers) established in 1972. The system significantly boosted Colombia's growth. He also advised on urban planning and played a major part in the first United Nations
Habitat
conference in Vancouver
in 1976. His "cities-within-the-city" urban design and financing proposals (including the public recapture of land's socially created "valorización" or "unearned land value increments" as cities grow) were explained in Taming the Megalopolis published in 1976. He was also a professor at the National University of Colombia
, the Javeriana University, and the University of the Andes. His writings were heavily influenced by his Harvard mentor Allyn Young. An important paper on Youngian endogenous growth theory
was published posthumously in History of Political Economy (1997). On the day before he died, President Cesar Gaviria
awarded him Colombia's highest honor, the Cruz de Boyaca, for services to his adopted country.
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
-born U.S.economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
from New Dublin, Nova Scotia
Nova Scotia
Nova Scotia is one of Canada's three Maritime provinces and is the most populous province in Atlantic Canada. The name of the province is Latin for "New Scotland," but "Nova Scotia" is the recognized, English-language name of the province. The provincial capital is Halifax. Nova Scotia is the...
, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, and allegedly an agent of espionage for the Soviet Union
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
.
As a naturalized
Naturalization
Naturalization is the acquisition of citizenship and nationality by somebody who was not a citizen of that country at the time of birth....
American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
citizen, Currie served as White House
White House
The White House is the official residence and principal workplace of the president of the United States. Located at 1600 Pennsylvania Avenue NW in Washington, D.C., the house was designed by Irish-born James Hoban, and built between 1792 and 1800 of white-painted Aquia sandstone in the Neoclassical...
economic adviser to President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Franklin Roosevelt during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
(1939 to 1945). From 1949 to 1953, he directed a major World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
mission to Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...
and related studies. Information from the VENONA project
Venona project
The VENONA project was a long-running secret collaboration of the United States and United Kingdom intelligence agencies involving cryptanalysis of messages sent by intelligence agencies of the Soviet Union, the majority during World War II...
references him in nine partially decrypted cables. He became a Colombian citizen
Colombian nationality law
Colombian nationality is typically obtained by birth in Colombia, birth abroad when at least one parent was born in Colombia, or by naturalization, after five years of permanent residence and meeting specific requirements...
after the United States refused to renew his passport
Passport
A passport is a document, issued by a national government, which certifies, for the purpose of international travel, the identity and nationality of its holder. The elements of identity are name, date of birth, sex, and place of birth....
in 1954.
Formative years
He was born to Lauchlin Bernard Currie, an operator of a fleet of merchant ships, and Alice Eisenhauer Currie, a schoolteacher. In 1906, at the age of four, Currie's father died and his family moved to nearby BridgewaterBridgewater, Nova Scotia
Bridgewater is a town in Lunenburg County, Nova Scotia, Canada, at the navigable limit of the LaHave River. It is the largest town in the South Shore region. While the majority of the South Shore's economy is based upon the tourist trade, Bridgewater is more a commercial and industrial centre and...
where most of his schooling was done. He later attended schools in Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
and California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
where he had relatives. In 1922, after two years at Saint Francis Xavier University in Nova Scotia, Currie moved to the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
to study at the London School of Economics
London School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
under Edwin Cannan
Edwin Cannan
Edwin Cannan was a British economist and historian of economic thought. He was a professor at the London School of Economics from 1895 to 1926....
, Hugh Dalton
Hugh Dalton
Edward Hugh John Neale Dalton, Baron Dalton PC was a British Labour Party politician who served as Chancellor of the Exchequer from 1945 to 1947, when he was implicated in a political scandal involving budget leaks....
, A. L. Bowley, and Harold Laski
Harold Laski
Harold Joseph Laski was a British Marxist, political theorist, economist, author, and lecturer, who served as the chairman of the Labour Party during 1945-1946, and was a professor at the LSE from 1926 to 1950....
.
From the LSE, Currie moved to Harvard University where his chief inspiration was Allyn Abbott Young
Allyn Abbott Young
Allyn Abbott Young was a celebrated American economist. He was born into a middle-class family in Kenton, Ohio on September 19, 1876 and died aged 52 in London on March 7, 1929, his life cut short by pneumonia during an influenza epidemic. He was then at the height of his intellectual powers and...
, then president of the American Economic Association
American Economic Association
The American Economic Association, or AEA, is a learned society in the field of economics, headquartered in Nashville, Tennessee. It publishes one of the most prestigious academic journals in economics: the American Economic Review...
. At Harvard, he earned his Ph.D.
Doctorate
A doctorate is an academic degree or professional degree that in most countries refers to a class of degrees which qualify the holder to teach in a specific field, A doctorate is an academic degree or professional degree that in most countries refers to a class of degrees which qualify the holder...
in 1931 for a dissertation on banking theory.
Early professional life
Currie remained at Harvard until 1934 as a lecturer and assistant to, successively, Ralph HawtreyRalph George Hawtrey
Sir Ralph George Hawtrey was a British economist, and a close friend of John Maynard Keynes.He studied at Eton, then Cambridge, where he graduated in 1901 with first-class mathematics honours. He spent the rest of his working life in the study of economics. Between 1904 and 1945 he worked in the...
, John H. Williams, and Joseph Schumpeter
Joseph Schumpeter
Joseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...
. Paul Sweezy
Paul Sweezy
Paul Marlor Sweezy was a Marxist economist, political activist, publisher, and founding editor of the long-running magazine Monthly Review...
was one of his students in money and banking at Harvard.
In 1934, Currie constructed the first money supply
Money supply
In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time. There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits .Money supply data are recorded and published, usually...
and income velocity series for the United States. He blamed the government's "commercial loan theory" of banking for monetary tightening in mid-1929
Wall Street Crash of 1929
The Wall Street Crash of 1929 , also known as the Great Crash, and the Stock Market Crash of 1929, was the most devastating stock market crash in the history of the United States, taking into consideration the full extent and duration of its fallout...
, when the economy was already declining, and then for its passivity during the next four years in the face of mass liquidations and bank failures. Instead, he advocated control of the money supply to stabilize income and expenditures. In a January, 1932 Harvard memorandum
Memorandum
A memorandum is from the Latin verbal phrase memorandum est, the gerundive form of the verb memoro, "to mention, call to mind, recount, relate", which means "It must be remembered ..."...
on antidepression policy, Currie and fellow instructors Harry Dexter White
Harry Dexter White
Harry Dexter White was an American economist, and senior U.S. Treasury department official, participating in the Bretton Woods conference...
and Paul T. Ellsworth urged large fiscal deficits coupled with open market
Open market
The term open market is used generally to refer to a situation close to free trade and in a more specific technical sense to interbank trade in securities.-Use of the term in economic theory:...
operations to expand bank reserves, as well as the lifting of tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
s and the relief of interallied debts.
Freshman brain trust
In 1934, Currie became a naturalized United States citizen and joined Jacob VinerJacob Viner
Jacob Viner was a Canadian economist and is considered with Frank Knight and Henry Simons one of the "inspiring" mentors of the early Chicago School of Economics in the 1930s: he was one of the leading figures of the Chicago faculty.- Biography :Viner was born in 1892 in Montreal, Quebec to...
's "freshman brain trust" at the U.S. Treasury
United States Department of the Treasury
The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
where he outlined an ideal monetary system for the United States which included a 100-percent reserve banking plan to strengthen central bank control by preventing member banks from lending out their demand deposit liabilities, while removing reserve requirements on savings deposits with low turnover. Later that year, Marriner Eccles moved from the Treasury to become governor
Chairman of the Federal Reserve
The Chairman of the Board of Governors of the Federal Reserve System is the head of the central banking system of the United States. Known colloquially as "Chairman of the Fed," or in market circles "Fed Chairman" or "Fed Chief"...
of the Federal Reserve Board. He took Currie with him as his personal assistant. Harry Dexter White
Harry Dexter White
Harry Dexter White was an American economist, and senior U.S. Treasury department official, participating in the Bretton Woods conference...
, another "freshman brain trust" recruit, became a top adviser to Secretary of the Treasury
United States Secretary of the Treasury
The Secretary of the Treasury of the United States is the head of the United States Department of the Treasury, which is concerned with financial and monetary matters, and, until 2003, also with some issues of national security and defense. This position in the Federal Government of the United...
Henry Morgenthau
Henry Morgenthau, Jr.
Henry Morgenthau, Jr. was the U.S. Secretary of the Treasury during the administration of Franklin D. Roosevelt. He played a major role in designing and financing the New Deal...
, and for some years White and Currie worked closely in their respective roles at the Treasury and the Federal Reserve.
Soon afterwards, Currie drafted the Banking Act of 1935 which reorganized the Federal Reserve and strengthened its powers. He also constructed a "net federal income-creating expenditure series" to show the strategic role of fiscal policy
Fiscal policy
In economics and political science, fiscal policy is the use of government expenditure and revenue collection to influence the economy....
in complementing monetary policy
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
to revive an economy in exceptionally acute, persisting depression. After four years of recovery, the economy declined sharply in 1937. In a four-hour interview with President Roosevelt, he was able to explain that the declared aim of balancing the budget "to restore business confidence" had damaged the economy. This was part of the "struggle for the soul of FDR" between the cautious Morgenthau and the expansionist
Expansionism
In general, expansionism consists of expansionist policies of governments and states. While some have linked the term to promoting economic growth , more commonly expansionism refers to the doctrine of a state expanding its territorial base usually, though not necessarily, by means of military...
Eccles. In April 1938, the president asked Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
for major appropriations for spending on relief and public works. In May 1939, the rationale was explained in theoretical and statistical detail by Currie ("Mr. Inside") and by Harvard's Alvin Hansen
Alvin Hansen
Alvin Harvey Hansen , often referred to as "the American Keynes," was a professor of economics at Harvard, a widely read author on current economic issues, and an influential advisor to the government who helped create the Council of Economic Advisors and the Social security system...
("Mr. Outside") in testimony before the Temporary National Economic Committee to highlight the role of government deficits in the recovery process.
White House
Named FDR's White House economist in July 1939, Currie advised on taxation, social securitySocial security
Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...
, and the speeding up of peacetime and wartime production plans. In January 1941, he was sent on a mission to China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
for discussions with Generalissimo
Generalissimo
Generalissimo and Generalissimus are military ranks of the highest degree, superior to Field Marshal and other five-star ranks.-Usage:...
Chiang Kai-shek
Chiang Kai-shek
Chiang Kai-shek was a political and military leader of 20th century China. He is known as Jiǎng Jièshí or Jiǎng Zhōngzhèng in Mandarin....
and Chou En-lai, the Communist representative in the Chinese wartime capital of Chungking. On his return in March, he recommended that China be added to the lend-lease
Lend-Lease
Lend-Lease was the program under which the United States of America supplied the United Kingdom, the Soviet Union, China, Free France, and other Allied nations with materiel between 1941 and 1945. It was signed into law on March 11, 1941, a year and a half after the outbreak of war in Europe in...
program. He was put in charge of its administration under the overall direction of FDR's special assistant Harry Hopkins
Harry Hopkins
Harry Lloyd Hopkins was one of Franklin Delano Roosevelt's closest advisers. He was one of the architects of the New Deal, especially the relief programs of the Works Progress Administration , which he directed and built into the largest employer in the country...
.
Currie was also assigned to expedite the American Volunteer Group
Flying Tigers
The 1st American Volunteer Group of the Chinese Air Force in 1941–1942, famously nicknamed the Flying Tigers, was composed of pilots from the United States Army , Navy , and Marine Corps , recruited under presidential sanction and commanded by Claire Lee Chennault. The ground crew and headquarters...
(Flying Tigers), in which U.S. military pilots were released for combat under Claire Chennault, an adviser to the Chinese Air Force
Chinese Air Force
The phrase Chinese Air Force may refer to one of two modern bodies; a third historical unit can also be referred to as a part:*Republic of China Air Force: The air force of China from 1920 to 1949, operating from Taiwan only post-1949....
against Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
. Currie also organized a large training program in the United States for Chinese pilots. In May 1941, he presented a paper on Chinese aircraft requirements to General
General
A general officer is an officer of high military rank, usually in the army, and in some nations, the air force. The term is widely used by many nations of the world, and when a country uses a different term, there is an equivalent title given....
George C. Marshall
George Marshall
George Catlett Marshall was an American military leader, Chief of Staff of the Army, Secretary of State, and the third Secretary of Defense...
and the Joint War Board. The document, accepted by the Board, stressed the role of an air force in China could play in defending Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, the Burma Road
Burma Road
The Burma Road is a road linking Burma with the southwest of China. Its terminals are Kunming, Yunnan, and Lashio, Burma. When it was built, Burma was a British colony.The road is long and runs through rough mountain country...
, and the Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
against Japanese attack. It also pointed to its potential for strategic bombing of targets in Japan itself. These activities, together with Currie's work in helping to tighten sanctions against Japan, are said to have played a part in provoking Japan's attack
Attack on Pearl Harbor
The attack on Pearl Harbor was a surprise military strike conducted by the Imperial Japanese Navy against the United States naval base at Pearl Harbor, Hawaii, on the morning of December 7, 1941...
on Pearl Harbor
Pearl Harbor
Pearl Harbor, known to Hawaiians as Puuloa, is a lagoon harbor on the island of Oahu, Hawaii, west of Honolulu. Much of the harbor and surrounding lands is a United States Navy deep-water naval base. It is also the headquarters of the U.S. Pacific Fleet...
.
Currie returned to Chungking in July 1942 to try to patch up the strained relations between Chiang and General Joseph W. Stilwell, commander of U.S. forces
Military of the United States
The United States Armed Forces are the military forces of the United States. They consist of the Army, Navy, Marine Corps, Air Force, and Coast Guard.The United States has a strong tradition of civilian control of the military...
in China. Currie was one of several of FDR's envoys who recommended Stilwell's recall and reassignment. Back in Washington
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
, Roosevelt asked Currie to put his case to General Marshall, but the General dismissed the idea. Only much later did Marshall concede that his protégé's continued presence in China was indeed a mistake. Stilwell was recalled in October 1944.
Currie appears to have been involved in carrying out orders from Roosevelt to get U.S. intelligence services to return Soviet cryptographic
Cryptography
Cryptography is the practice and study of techniques for secure communication in the presence of third parties...
documents to the Soviet Union and to cease decoding operations.
From 1943 to 1944, Currie ran the Foreign Economic Administration
Foreign Economic Administration
In the administration of Franklin Delano Roosevelt, the Foreign Economic Administration was formed to relieve friction between US agencies operating abroad. As described by the biographer of the FEA's chief, Leo Crowley, the agency was designed and run by "The Nation's #1 Pinch-hitter".S. L...
where he played a major role in recruiting or recommending economists and others throughout the Washington administration. Prominent examples are John Kenneth Galbraith
John Kenneth Galbraith
John Kenneth "Ken" Galbraith , OC was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism...
, Richard Gilbert, Adlai Stevenson, and William O'Dwyer
William O'Dwyer
William O'Dwyer was the 100th Mayor of New York City, holding that office from 1946 to 1950.-Biography:O'Dwyer was born in County Mayo, Ireland and migrated to the United States in 1910, after abandoning studies for the priesthood...
. In early 1945, Currie headed a tripartite (U.S., British, and French
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
) mission to Bern to persuade the Swiss
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
to freeze Nazi
Nazi Germany
Nazi Germany , also known as the Third Reich , but officially called German Reich from 1933 to 1943 and Greater German Reich from 26 June 1943 onward, is the name commonly used to refer to the state of Germany from 1933 to 1945, when it was a totalitarian dictatorship ruled by...
bank balances and stop further shipments of German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
supplies through Switzerland to the Italian
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
front. He was also involved in loan negotiations with the British and the Russians, and in preparations for the 1944 Bretton Woods conference
United Nations Monetary and Financial Conference
The United Nations Monetary and Financial Conference, commonly known as the Bretton Woods conference, was a gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire, to regulate the international monetary and financial order after...
(staged mainly by Harry Dexter White
Harry Dexter White
Harry Dexter White was an American economist, and senior U.S. Treasury department official, participating in the Bretton Woods conference...
), which led to the creation of the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
and the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
.
Allegations of Soviet intelligence activity
Whittaker Chambers
Whittaker Chambers was born Jay Vivian Chambers and also known as David Whittaker Chambers , was an American writer and editor. After being a Communist Party USA member and Soviet spy, he later renounced communism and became an outspoken opponent later testifying in the perjury and espionage trial...
, in a meeting with Roosevelt security chief Adolf Berle, as a Soviet agent. Elizabeth Bentley
Elizabeth Bentley
Elizabeth Terrill Bentley was an American spy for the Soviet Union from 1938 until 1945. In 1945 she defected from the Communist Party and Soviet intelligence and became an informer for the U.S. She exposed two networks of spies, ultimately naming over 80 Americans who had engaged in espionage for...
, like Chambers, a former Soviet espionage agent, had claimed in Congressional testimony in 1948 that Currie and Harry Dexter White had been part of the Silvermaster ring
FBI Silvermaster File
The FBI’s Silvermaster file is a 162-volume compendium of some 26,000 pages of documents relating to the Bureau’s investigation of Communist penetration of the Federal government during the Cold War....
. Though she had never met Currie and White personally, Bentley testified to receiving information through cutouts (couriers) who were other Washington economists (later determined to be Soviet agents). White and Currie appeared before the House Committee on Un-American Activities in August 1948 to rebut her charges. White, who was also implicated as a source of Soviet intelligence (later confirmed in VENONA intercepts and review of Soviet KGB notes of NKVD
NKVD
The People's Commissariat for Internal Affairs was the public and secret police organization of the Soviet Union that directly executed the rule of power of the Soviets, including political repression, during the era of Joseph Stalin....
official Gaik Ovakimian
Gaik Ovakimian
Haik Badalovich Ovakimian , Major General, USSR , better known as "the puppetmaster" in intelligence circles, was a leading Soviet NKVD spy in the United States....
) had a serious heart problem, and died three days after his appearance at the hearings.
Currie was not prosecuted and in 1949 he was appointed to head the first of the World Bank's comprehensive country surveys in Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...
. After his report was published in Washington in September 1950, he was invited by the Colombian government to return to Bogotá
Bogotá
Bogotá, Distrito Capital , from 1991 to 2000 called Santa Fé de Bogotá, is the capital, and largest city, of Colombia. It is also designated by the national constitution as the capital of the department of Cundinamarca, even though the city of Bogotá now comprises an independent Capital district...
as adviser to a commission established to implement the report's recommendations. In December 1952, Currie gave evidence in New York
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
to a grand jury
Grand jury
A grand jury is a type of jury that determines whether a criminal indictment will issue. Currently, only the United States retains grand juries, although some other common law jurisdictions formerly employed them, and most other jurisdictions employ some other type of preliminary hearing...
investigating Owen Lattimore
Owen Lattimore
Owen Lattimore was an American author, educator, and influential scholar of Central Asia, especially Mongolia. In the 1930s he was editor of Pacific Affairs, a journal published by the Institute of Pacific Relations, and then taught at Johns Hopkins University from 1938 to 1963...
's role in the publication of secret State Department
United States Department of State
The United States Department of State , is the United States federal executive department responsible for international relations of the United States, equivalent to the foreign ministries of other countries...
documents in Amerasia
Amerasia
Amerasia was a journal of Far Eastern affairs best known for the 1940s "Amerasia Affair" in which several of its staff and their contacts were suspected of espionage and charged with unauthorized possession of government documents.-Publication:...
magazine.
However, when Currie, as a U.S. citizen, tried to renew his passport in 1954, he was refused, ostensibly on the grounds that he was now residing abroad and married to a Colombian. However, he may have in fact been identified with the then-secret VENONA project
Venona project
The VENONA project was a long-running secret collaboration of the United States and United Kingdom intelligence agencies involving cryptanalysis of messages sent by intelligence agencies of the Soviet Union, the majority during World War II...
, which had decrypted wartime Soviet cables where Currie was identified as a source of Soviet intelligence. He appears in the VENONA cables under the cover name 'PAGE', and in Soviet intelligence archives as 'VIM' and an unwitting source for the Golos
Golos
Golos may refer to the following:* Jacob Golos, a Ukrainian-born Bolshevik revolutionary and Soviet secret police operative in the USSR* Golos, a Russian 1982 psychological drama set in Russia...
and Bentley spy networks.
After a military coup
Coup d'état
A coup d'état state, literally: strike/blow of state)—also known as a coup, putsch, and overthrow—is the sudden, extrajudicial deposition of a government, usually by a small group of the existing state establishment—typically the military—to replace the deposed government with another body; either...
in Colombia in 1953, Currie retired from economic advisory work and devoted himself to raising Holstein cattle
Holstein (cattle)
Holstein cattle is a breed of cattle known today as the world's highest production dairy animal. Originating in Europe, Holsteins were bred in what is now the Netherlands and more specifically in the two northern provinces of North Holland and Friesland...
on a farm outside Bogotá, and developed the highest-yielding dairy herd in the country. With the return of civilian government in 1958, President Alberto Lleras personally conferred Colombian citizenship
Colombian nationality law
Colombian nationality is typically obtained by birth in Colombia, birth abroad when at least one parent was born in Colombia, or by naturalization, after five years of permanent residence and meeting specific requirements...
upon him and Currie returned to advisory work for a succession of Colombian presidents. Between 1966 and 1971, he went abroad as a visiting professor in North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
n and British universities: Michigan State
Michigan State University
Michigan State University is a public research university in East Lansing, Michigan, USA. Founded in 1855, it was the pioneer land-grant institution and served as a model for future land-grant colleges in the United States under the 1862 Morrill Act.MSU pioneered the studies of packaging,...
(1966), Simon Fraser
Simon Fraser University
Simon Fraser University is a Canadian public research university in British Columbia with its main campus on Burnaby Mountain in Burnaby, and satellite campuses in Vancouver and Surrey. The main campus in Burnaby, located from downtown Vancouver, was established in 1965 and has more than 34,000...
(1967–1968 and 1969–1971), Glasgow
University of Glasgow
The University of Glasgow is the fourth-oldest university in the English-speaking world and one of Scotland's four ancient universities. Located in Glasgow, the university was founded in 1451 and is presently one of seventeen British higher education institutions ranked amongst the top 100 of the...
(1968–1969) and Oxford
University of Oxford
The University of Oxford is a university located in Oxford, United Kingdom. It is the second-oldest surviving university in the world and the oldest in the English-speaking world. Although its exact date of foundation is unclear, there is evidence of teaching as far back as 1096...
(1969). He returned permanently to Colombia in May 1971 at the behest of President Misael Pastrana Borrero
Misael Pastrana Borrero
Misael Pastrana Borrero , was a Conservative Party politician and President of Colombia from 1970 to 1974, the last presidential period of the National Front. Misael Pastrana became President after a close election campaign against Gen. Gustavo Rojas Pinilla, a former dictator. Mr...
to be the architect of a new "Plan of the Four Strategies", with focus on urban housing and export diversification. The plan was implemented, with new institutions playing a major role in accelerating Colombia's urbanization.
Currie was chief economist at the Colombian National Planning Department from 1971 to 1981, followed by twelve years at the Colombian Institute of Savings and Housing until his death in 1993. There he doggedly defended the unique housing finance system (based on "units of constant purchasing power" for both savers and borrowers) established in 1972. The system significantly boosted Colombia's growth. He also advised on urban planning and played a major part in the first United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
Habitat
United Nations Human Settlements Programme
The United Nations Human Settlements Programme is the United Nations agency for human settlements. It was established in 1978 and has its headquarters at the United Nations Office at Nairobi, Kenya...
conference in Vancouver
Vancouver
Vancouver is a coastal seaport city on the mainland of British Columbia, Canada. It is the hub of Greater Vancouver, which, with over 2.3 million residents, is the third most populous metropolitan area in the country,...
in 1976. His "cities-within-the-city" urban design and financing proposals (including the public recapture of land's socially created "valorización" or "unearned land value increments" as cities grow) were explained in Taming the Megalopolis published in 1976. He was also a professor at the National University of Colombia
National University of Colombia
The Universidad Nacional de Colombia , also called UNAL or just UN, is a public, national, coeducational, research university, located primarily in Bogotá, Medellín, Manizales and Palmira, Colombia...
, the Javeriana University, and the University of the Andes. His writings were heavily influenced by his Harvard mentor Allyn Young. An important paper on Youngian endogenous growth theory
Endogenous growth theory
Endogenous growth theory holds that economic growth is primarily the result of endogenous and not external force. In Endogenous growth theory investment in human capital, innovation and knowledge are significant contributors to economic growth. The theory also focus on positive externalities and...
was published posthumously in History of Political Economy (1997). On the day before he died, President Cesar Gaviria
César Gaviria
César Gaviria Trujillo is a Colombian politician and a Latin American statesman. He served as President of Colombia from 1990 to 1994, and Secretary General of the Organization of American States from 1994 until 2004.-Early life:...
awarded him Colombia's highest honor, the Cruz de Boyaca, for services to his adopted country.
Publications
- The Supply and Control of Money in the United States. 1934. Harvard Univ. Press. His influential early work on monetary theory and policy.
- History of Political Economy 32. 2002. His 1932 Harvard memorandum on antidepression policy. With a foreword by David LaidlerDavid LaidlerDavid Ernest William Laidler has been one of the foremost scholars of monetarism. He published major economics journal articles on the topic in the late 1960s and early 1970s...
and Roger Sandilands explaining its influence on the Chicago School monetary tradition.
Currie's papers
-
- General: Duke University's Special Collections Library.
- China: Hoover Institution, Stanford University.
Biography
- Roger Sandilands, 1990. The Life and Political Economy of Lauchlin Currie: New Dealer, Presidential Adviser, and Development Economist. Duke University Press. ISBN 0-8223-1030-9.
- The New York TimesThe New York TimesThe New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
30 December 1993; - The TimesThe TimesThe Times is a British daily national newspaper, first published in London in 1785 under the title The Daily Universal Register . The Times and its sister paper The Sunday Times are published by Times Newspapers Limited, a subsidiary since 1981 of News International...
of London, 10 January 1994.
On Currie and the New Deal
- Herbert SteinHerbert SteinHerbert Stein was a senior fellow at the American Enterprise Institute and was on the board of contributors of The Wall Street Journal. He was chairman of the Council of Economic Advisers under President Nixon and President Ford. From 1974 until 1984, he was the A...
, 1969. The Fiscal Revolution in America. - Ronnie J. Phillips, 1995. The Chicago Plan and New Deal Banking Reform.
- 2004. Special issue of the Journal of Economic Studies 31. Contains some of his hitherto unpublished FRB and White House memoranda.
On the allegation that Currie was a Soviet spy
- John Earl Haynes and Harvey Klehr, 1999. Venona: Soviet Espionage in America in the Stalin Era.
- Roger Sandilands, 2000, "Guilt by Association? Lauchlin Currie's Alleged Involvement with Washington Economists in Soviet Espionage," History of Political Economy 32:
- James Boughton and Roger Sandilands, 2003, "Politics and the Attack on FDR's Economists: From Grand Alliance to Cold War," Intelligence and National Security 17.
Further reading
- Haynes, John E. and Klehr, Harvey, 2000. Venona: Decoding Soviet Espionage in America. Yale University Press.
- Haynes, John E. and Klehr, Harvey, 2003. In Denial: Historians, Communism, & Espionage. Encounter Press.
- Schecter, Jerrold and Leona, 2002. Sacred Secrets: How Soviet Intelligence Operations Changed American History. Potomac Press.
- Weinstein, Allen, and Vassiliev, Alexander, 2000. The Haunted Wood: Soviet Espionage in America—The Stalin Era. Modern Library Press.
- Alexander Vassiliev, "Notes on Soviet SVR archives."
- Robert J. Hanyok, "Eavesdropping on Hell: Historical Guide to Western Communications Intelligence and the Holocaust, 1939-1945. Ft. Meade, MD: National Security AgencyNational Security AgencyThe National Security Agency/Central Security Service is a cryptologic intelligence agency of the United States Department of Defense responsible for the collection and analysis of foreign communications and foreign signals intelligence, as well as protecting U.S...
, Center for Cryptologic History, 2005; "Currie, known as PAZh (Page) and WhiteHarry Dexter WhiteHarry Dexter White was an American economist, and senior U.S. Treasury department official, participating in the Bretton Woods conference...
, whose cover names were YuRIST (Jurist) and changed later to LAJER (Lawyer), had been used as sources of information by Soviet agents since the 1930s, though there has been much dispute as to whether their involvement was witting or otherwise. They had been identified as Soviet sources in Venona translations and by other agents turned witnesses or informants for the FBI and Justice Department. From the Venona translations, both were known to have been sources of information for their so-called "handlers", notably the Silvermaster network." - United States. National Counterintelligence Center. A Counterintelligence Reader. NACIC, no date. vol. 3, chap. 1, pg. 31.
- File card of Patterson contacts in regard Silvermaster, box 203, Robert P. Patterson papers, Library of Congress
- General Bissell to General Strong, 3 June 1942, Silvermaster reply to Bissell memo, 9 June 1942, Robert P. Patterson to Milo Perkins of Board of Economic Warfare, 3 July 1942, all reprinted in Interlocking Subversion in Government Departments, 30 August 1955, 84th Cong., 1st sess., part 30, 2562–2567.
- Lauchlin Currie testimony, 13 August 1948, U.S. Congress, House of Representatives, Committee on Un-American Activities, 80th Cong., 2d sess., 851–877.
- Underground Soviet Espionage Organization (NKVD) in Agencies of the United States Government, 21 February 1946, FBI Silvermaster file, serial 573.
- Report on Currie interview, 31 July 1947, FBI Silvermaster file, serial 2794.
- Michael Warner and Robert Louis Benson, Venona and Beyond: Thoughts on Work Undone, Intelligence and National Security 12, no. 3 (July 1997), 10–11.
- Anonymous Russian letter to Hoover, 7 August 1943, reproduced in Robert Louis Benson and Michael Warner, eds., Venona: Soviet Espionage and the American Response, 1939–1957 (Washington, D.C.: National Security Agency, Central Intelligence Agency, 1996), 51–54. https://www.cia.gov/csi/books/venona/part1.htm
External links
- Venona: Soviet Espionage and the American Response, 1939-1957
- Politics and the Attack on FDR's Economists
- Annals of the Flying Tigers
- Lauchlin Bernard Currie Fonds at Duke University
- FBI file on Currie in four parts, released under the Freedom of Information Act