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schools, where he was not an exceptional student. His mother had died when he was aged just nine. His father Jacob was a peddler who made a living dealing in hardware and crockery. Through hard work and thrift, the family had eventually come to own four hardware stores by the time Jacob died, just two months after Harry graduated from high school. After school, he initially worked as a clerk in the family business, but upon President Woodrow Wilson's declaration of war on Imperial Germany in April 1917, the 25-year-old Harry White enlisted in the US Army and was commissioned as an infantry first lieutenant.

Stationed in France in training and supply camps, White had an uneventful war and returned home in November 1918. However, no longer satisfied by the life of a small businessman, he set his sights on an academic career and enrolled at Columbia University in 1922 to study government. He transferred the following year to Stanford, from which he graduated ‘with great distinction’ in economics.⁸ From Stanford, he moved on to pursue a PhD at Harvard and it was there that he appeared to develop a fascination for the relationship between the workings of the international monetary system and the performance of the real economy. He taught for six years at Harvard but, aged 40 and unable to secure a tenured position, he took up an assistant professorship at Lawrence College in Appleton, Wisconsin in 1933.

Harry White's path from Wisconsin to the US Treasury came via an invitation in the summer of 1934 from Jacob Viner, a respected University of Chicago economics professor. Viner was at the time advising Treasury Secretary Henry Morgenthau and asked White to assist him on a three-month study of monetary and banking legislation and institutions. Once in Washington, White never looked back. Following completion of the Viner study, he took another temporary position with the US Tariff Commission but returned to the Treasury just three weeks later when a position as principle economic analyst in the Division of Research and Statistics opened up. This was again a temporary position paid for, fatefully, out of profits from an emergency fund set up to stabilise the dollar's exchange rate. Remarkably, White's employment at the Treasury would continue on this tenuous ad hoc basis for another 12 years until he was finally made a fully-fledged civil servant in 1945.⁹

In the early 1930s, the world was mired in the Great Depression and the prevailing monetary orthodoxy for countries to tie the value of their currencies to a fixed quantity of gold had broken down. With great reluctance, Britain had abandoned the gold standard in September 1931 and devalued sterling. Twenty-five other nations followed suit shortly thereafter. The US held out for a time but was ultimately forced to give up the dollar's fix to gold in April 1933, shortly after President Franklin D. Roosevelt took office. There followed a period during which the dollar's exchange rate seemed to fluctuate arbitrarily, as the President took to setting a target exchange rate from his bed each morning, mostly based on whim rather than scientific method. While the thought of befuddled bankers rather tickled Roosevelt's sense of humour, concerns were raised from within the Federal Reserve and the Treasury, where some considered FDR to be acting beyond his presidential authority in buying gold at a price above the level fixed by statute. Roosevelt ultimately relented and, under the Gold Reserve Act, re-fixed the dollar's exchange rate to gold in January 1934 at $35 per ounce, 59.06 percent below its previous level.¹⁰

      As countries battled with the Depression era's high unemployment, they turned to competitive devaluations and tariff barriers in an effort to make their exports more competitive and to limit imports. These ‘beggar-thy-neighbour’ policies led to a collapse in global trade, significantly worsening the economic hardship. In the subsequent years and decades, the international trade and monetary policies of the interwar years became widely viewed as a major factor contributing to the outbreak of WW2.

At the Treasury, Harry White gained a reputation as an able economist and carved out a critical role for himself in international policy. He was also known to be quick-tempered and impatient, though he ‘was meticulously civil to anyone in a position to afford him access to the powerful’.¹¹ The focus of his work reflected the major trade and monetary issues of the time, into which he threw himself energetically. Competitive currency devaluations and their impact on global trade was an issue with which he concerned himself especially. He argued that a stabilisation in international monetary policy was required to increase foreign trade, which was an important factor in achieving the economic recovery that the Roosevelt Administration sought to bring about. This would require a new form of international monetary diplomacy. Competition between the Treasury and the State Department over control of this function was to open to White a huge opportunity.

Henry Morgenthau Jr. was a long-time friend and neighbour of FDR at his Hyde Park estate in upstate New York. He had no background in economics and, upon his appointment as Treasury Secretary in 1934, the prominent New York donor Gladys Straus quipped that Roosevelt had managed to find ‘the only Jew in the world who doesn't know a thing about money’.¹² White rapidly made himself indispensable as the intellectual force behind Morgenthau's expanding power base, while Morgenthau served as a powerful patron for the ambitious White.

      In 1935, Morgenthau despatched White on a trip to Europe to engage in fact-finding and exploratory talks on the matter of exchange rate stabilisation. This trip was to have great significance in Harry White's career, as his meetings with politicians, businessmen, bankers, civil servants and economists would help to position him later as the obvious candidate to coordinate and lead America's international negotiations on the post-war monetary system. It was also on this trip that he first met John Maynard Keynes, the famed British economist with whom he would later joust in the run-up to and during the 1944 Bretton Woods conference.

The Barbarous Relic

In contrast to Harry White, Maynard Keynes had a privileged upbringing. Born into an affluent academic family in Cambridge, his father Neville was a lecturer in moral sciences and a fellow of Pembroke College, while his mother, who had been educated at Newnham College, became the city's first female mayor. Educated at Eton, he had gone on to study mathematics at King's College Cambridge, where he was elected to a lifetime fellowship in 1908, at the age of 26. A liberal with a mischievous anti-establishment streak, he was a leading member of the Bloomsbury Set that included intellectuals and artists such as Leonard and Virginia Woolf, as well as Duncan Grant, Keynes’ one-time lover.

During WW1, Keynes served in the British Treasury and had a front row seat in the 1919 Paris Peace Conference, where the terms of the peace were hammered out. He quit in disgust three weeks before the Versailles Treaty was signed and went on to publish a highly critical account of those negotiations under the widely acclaimed title The Economic Consequences of the Peace. In this book, he painted withering portraits of the three leading figures of the conference – American President Woodrow Wilson, British Prime Minister David Lloyd George, and French Prime Minister Georges Clémenceau. Among Keynes’ key criticisms of Versailles was the high level of war reparations imposed. He had argued that, if the defeated Germany was ‘to be “milked”’, then she ‘must first of all not be ruined’.¹³ Indeed, popular resentment of the economic hardship that reparations imposed on the German population was later exploited by the Nazis in their rise to power in the 1930s.

Keynes had seen the question of reparations as being inextricably tied to the debts that the European Allies had taken on to finance the war. He had therefore proposed that the peace treaty include a financial package that would have linked the reparations paid by Germany to the level of repayments by the Allies to each other and to the US. The US had lent $12 billion to the Europeans during WW1, of which around $5 billion was owed by Great Britain and $4 billion by France. In turn, Britain was owed $11 billion by 17 countries, including some $3 billion due from France and $2.5 billion due from Russia, which had become uncollectible following the Bolshevik revolution

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