Lauchlin Currie: a spy at the heart of the AVG?Few men did as much for the American Volunteer Group as Laughlin Currie of the White House staff. As befits an economist, he's a bit dull on the outside. What lifts him out of the ordinary is the possibility that he was a Russian spy, who spent the war years snugly ensconced at the heart of the American war effort.
Currie was born in Nova Scotia in 1902. He studied at Oxford, the London School of Economics (famous for turning out left-wing economists), and finally Harvard, where like most doctoral students he was also an instructor. Among his associates in Cambridge was Abraham Silverman of MIT, who was or would become a Russian agent. Currie was enough of a capitalist, however, that he invested his own and his family's money in the stock market, managing to lose most or all of it in the crash of October 1929. Not surprisingly, he chose the Great Depression, and more particularly the role of the Federal Reserve in causing it, as his PhD thesis. This was published as The Supply and Control of Money in 1934.
About the same time, he was tapped by Roosevelt's treasury secretary, Henry Morgenthau, to sketch a monetary system for the country. He had significant influence on how the Federal Reserve Board of Governors is designed; on the 1935 Banking Act (Glass-Steagal) that would guide American banking for half a century; and indeed on the whole notion of budget deficits as a means out of the Great Depression.
In July 1939, Currie was drafted as the first White House economist--the task that would later become enshrined as the president's Council of Economic Advisors. He brought Canada into the supply chain for American military production, and he directed American military and economic aid to China, where he spent more than a month in the late winter of 1941. (Above: Currie having tea with Soong Mei-ling, the wife of Chiang Kai-shek.)
When he returned to Washington, Currie naturally became the president's point man in setting up an American volunteer air force for China. As originally conceived, this was to have consisted of 500 planes in one bomber and two fighter groups, though the Japanese breakout of December 1941 canceled all but the 1st AVG. (The story is told that Britain's Air Marshal Harris once got on the phone to Currie, complaining that the P-40s that had been diverted to the AVG: "See here, you can't do that. We bought those planes with our own money.") This work continued after the U.S. entered the war and the army tried to reclaim the AVGs for itself. I was continually impressed, when researching Flying Tigers: Claire Chennault and the American Volunteer Group, how often and how quickly Currie was able to find just what Chennault needed and, more often than not, find a way to get it to him.
Currie went on a second mission to China in the summer of 1942, this time as the president's personal representative. By this time "Vinegar Joe" Stilwell was in residence, and in his venomous diary he gave the economist the nickname of "Cutie." For his part, Currie did his best to get Stilwell relieved, along with the American ambassador to China. (Currie himself was bruited as a possible replacement for the ambassador.)
Postwar, Currie found no place in the Truman administration, so he went to New York and established Lauchlin Currie & Co., a not very successful attempt to strike it rich in the export-import business. (A bicycle plant in Shanghai was one of his projects.) In 1949 he went back into the public sector, surveying Colombia's economy for the World Bank. In time he went to work for the Colombian government, married a Colombian woman, and was granted Colombian citizenship. With the exception of two short periods--as a visiting professor in Canada and Britain, and as a diary farmer in Colombia--he worked for that country's government until he died in 1993.
His expatriation was in large part the result of two unhappy experiences during the Red Scare that accompanied the start of the Cold War. In 1948 he appeared before the House Committee on Un-American Activities to answer charges that he had served as a Russian spy during his White House years. In 1953 he appeared before a grand jury investigating the same charges. Presumably as a result, his passport was not renewed in 1954. Under the laws then applying to naturalized citizens--Currie of course was Canadian-born--he thereby lost his U.S. citizenship as well. However, no legal charges were ever brought against him.
Currie-as-spy was first bruited by FBI director Edgar Hoover in November 1945. He told President Truman, through his military aide, that Currie was one of many persons within the federal government who "have been furnishing data and information to persons outside the Federal Government, who are in turn transmitting this information to agents of the Soviet Government." Nothing came of it, however, until Elizabeth Bentley--a Russian agent who turned against her employers--gave varying accounts of Currie's role in her testimony in 1948. At most, Currie appears to have been a friend in court, who may or may not have passed White House messages to communist friends like Abraham Silverman. You can read the FBI files on Currie here.
Being a communist, of course, was not at all a Bad Thing in the 1930s and early 1940s, especially when Russia was fighting the good fight against Germany. As General Julius Kobyakov, deputy director of the KGB's American Division in the late 1980s, stated in 2003: "In the spirit of machismo, many [KGB officers] claimed that we had an `agent' [Currie] in the White House." More recently, Kobyakov wrote:
"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."
In short, Lauchlin Currie wasn't a spy ... but if he was, it was in a good cause--from the Russian point of view!