United Nations; the liquidation of the war through the Council of Foreign Ministers, involving the Big Four; and, lately diplomatic relations with countries which were neither in the United Nations nor in the Council of Foreign Ministers group; for instance, Franco's Spain (p. 854).

The CHAIRMAN. I would like to make one point here. In relation to your dealings with and the recommendations of the Bureau of the Budget, is it your impression that this same pro-Communist influence might have been there?

Mr. PANUCH. Well, sir, I don't know whether it was pro-Communist or not, but it was certainly pro-Soviet and pro-international (p. 898).

In addition to the infiltration of the State Department through the medium of this merger,36 the subcommittee encountered still other penetration into the State Department. Apart from the agents involved in this consolidation, the subcommittee heard eight other individuals who worked in the State Department identified as Communists in the course of the hearings. The positions that these people held were impressive. Some of their titles were: The Director of Office of Special Political Affairs; State Department representative in conferences regarding the American, British, Japanese Naval Limitation; Chief of the Division of Latin American Affairs; assistant in Division of Research for Europe; Director of the Office of Far Eastern Affairs; and Associate Chief in charge of economic planning in the Division of Special Research.

The subcommittee admitted into evidence, during the course of the Panuch hearing, testimony given by A. A. Berle, Jr., former Assistant Secretary of State.

Mr. MORRIS. Senator Welker made reference to testimony given by Berle before the House Un-American Activities Committee.

Mr. Mandel, would you read that precise portion from that actual testimony? Mr. MANDEL. It is the testimony of Adolf Berlc, Jr., before the House Committee on Un-American Activities, on August 30, 1948, published on page 1296 of the hearings of that body:

Mr. BERLE. As I think many people know, in the fall of 1944 there was a difference of opinion in the State Department. I felt that the Russians were not going to be sympathetic and cooperative. Victory was then assured, though not complete, and the intelligence reports which were in my charge, among other things, indicated a very aggressive policy not at all in line with the kind of cooperation everyone was hoping for, and I was pressing for a pretty clean-cut showdown then when our position was strongest.

"The opposite group in the State Department was largely the men: Mr. Acheson's group, of course, with Mr. Hiss as his principal assistant in the matter. Whether that was a difference on foreign policy, and the question could be argued both ways; it wasn't clean cut, was a problem, but at that time Mr. Hiss did take what we would call today the pro-Russian point of view."

Mr. PANUCH. That is a fair statement of the situation in 1945, 1946, when I was in the Department.

Mr. MORRIS. Based on your experience in the Department?

Mr. PANUCH. Yes (p. 898).

It should be noted that the Ramspeck Act of November 26, 1940, provided additional authority for blanketing in employees from newly created agencies into civil service.

The 58th Annual Report of the U. S. Civil Service Commission for the fiscal year ending June 30, 1941, page 5, declared: "One of the most important statutes in the history of the Federal Civil Service is the Ramspeck Act of November 26, 1940, Public No. 880, 76th Congress, which authorizes the President greatly to extend the scope both of the Civil Service Act and of the Classification Act Under the terms of Executive Order No. 8743 of April 23, 1941, the Civil Service Act will be extended on January 1, 1942 to the great majority of the positions to which the Ramspeck Act authorizes its extension and vacancies occurring in such positions during the period July 1, 1941 to January 1, 1942 must be filled in accordance with the Civil Service Act and rules, unless express permission is given by the Civil Service Commission for appointment without regard to the rules."

Treasury Department recommendation for classification dated January 1, 1942 in the case of Harold Glasser states: "The employee named below, who, on July 1, 1941, occupied a position which has been brought into the classified service by operation of the Ramspeck Act, and Executive Order No. 8743, of April 23, 1941, and who on January 1, 1942, occupied a permanent position, is recommended for classification under section 1 of that order" (p. 94).

Senator WELKER. Mr. Panuch, a moment ago we referred to Mr. Acheson and his pro-Russian group in the State Department. I will ask you whether or not, in your opinion, that Acheson-Hiss pro-Russian group in the State Department contributed to the infiltration of Communists or Communist sympathizers within the State Department?

Mr. PANUCH. It is almost impossible to answer that, sir, responsively.

I would say that the biggest single thing that contributed to the infiltration of the State Department was the merger of 1945. The effects of that are still being felt, in my judgment (p. 899).

THE NET OVER THE TREASURY

Harry Dexter White, Frank Coe, Harold Glasser, Victor Perlo, Irving Kaplan, Sol Adler, Abraham George Silverman and William Ludwig Ullmann were employees of the Treasury Department during part or all of the period studied by the subcommittee.

All these persons were named by both Miss Bentley and Chambers as participants in the Communist conspiracy. Perlo was identified also by Nathaniel Weyl. The names of Perlo, Adler, Silverman, and Ullmann turn up in the Nixon Memorandum of 1945. Several of those named were listed in the telephone finder of Nathan Gregory Silvermaster, identified by Miss Bentley in 1948 as the most important person she dealt with in the Government underground.

The Kaplan story has already shown the interlacing connections with White, Coe, Glasser, Silverman, and Ullmann. Kaplan's tremendous responsibilities for American occupation policy in Germany have also been set forth.

How important were some of the others?

The answer to this question, so far as White is concerned, may be found in three Treasury documents. Here is the first, dated 8 days after Pearl Harbor, and signed by Secretary of the Treasury Morgenthau:

TREASURY DEPARTMENT ORDER NO. 43

DECEMBER 15, 1941.

On and after this date, Mr. Harry D. White, Assistant to the Secretary, will assume full responsibility for all matters with which the Treasury Department has to deal having a bearing on foreign relations. Mr. White will act as liaison between the Treasury Department and the State Department, will serve in the capacity of adviser to the Secretary on all Treasury foreign affairs matters, and will assume responsibility for the management and operation of the Stabilization Fund without change in existing procedures. Mr. White will report directly to the Secretary.

WNT:aja

Secretary of the Treasury.

Here is the pertinent paragraph from the second Treasury document which was dated February 25, 1943 and was sent to White by Secretary Morgenthau:

Effective this date, I would like you to take supervision over and assume full responsibility for Treasury's participation in all economic and financial matters (except matters pertaining to depository facilities, transfers of funds, and war expenditures) in connection with the operations of the Army and Navy and the civilian affairs in the foreign areas in which our Armed Forces are operating or are likely to operate. This will, of course, include general liaison with the State Department, Army and Navy, and other departments or agencies and representatives of foreign governments on these matters.

Here is the third, a compilation of the interdepartmental and international bodies on which Assistant Secretary White was the official Treasury representatives:

The Interdepartmental Lend-Lease Committee

The Canadian-American Joint Economic Committee

The Executive Committee on Commercial Policy

The Executive Committee and Board of Trustees of the Export-Import Bank The Interdepartmental Committee on Inter-American Affairs

The National Resources Committee

The Price Administration Committee

The Committee on Foreign Commerce Regulations

The Interdepartmental Committee on Post-War Economic Problems

The Committee on Trade Agreements

The National Munitions Control Board

The Acheson Committee on International Relief

The Board of Economic Warfare

The Executive Committee on Economic Foreign Policy

The Liberated Areas Committee

The O. S. S. Advisory Committee

The U. S. Commercial Corporation

The Interdepartmental Committee on Planning for Coordinating the Economic Activities of United States Civilian Agencies in Liberated Areas (exhibit 33)

White was also chief architect of the International Monetary Fund 37 as well as its first United States executive director. Miss Bentley gave the subcommittee an extraordinarily revealing glimpse of how White's hands played with the inner levers of American policy.

Miss BENTLEY. No; the only Morgenthau plan I knew anything about was the German one.

Senator EASTLAND. Did you know who drew that plan?

Miss BENTLEY. Due to Mr. White's influence, to push the devastation of Germany because that was what the Russians wanted.

Senator FERGUSON. That was what the Communists wanted?

Miss BENTLEY. Definitely Moscow wanted them completely razed because then they would be of no help to the allies.

Mr. MORRIS. You say that Harry Dexter White worked on that?

Miss BENTLEY. And on our instructions he pushed hard. (IPR p. 419.)

Senator EASTLAND. What you say is that it was a Communist plot to destroy Germany and weaken her to where she could not help us?

Miss BENTLEY. That is correct. She could no longer be a barrier that would protect the Western World.

Senator EASTLAND. And that Mr. Morgenthau, who was Secretary of the Treasury of the United States was used by the Communist agents to promote that plot?

Miss BENTLEY. I am afraid so; yes.

Senator FERGUSON. What do you mean by "I am afraid so"?

Miss BENTLEY. Certainly Secretary Morgenthau didn't fall in with Communist plots.

Senator FERGUSON. But you know it to be a fact?

Miss BENTLEY. I know it to be a fact.

Senator FERGUSON. You do not qualify it, do you?

Miss BENTLEY. No, I don't qualify it. I didn't want to give the thought that he did it knowingly.

Senator SMITH. He was unsuspectingly used.

Senator FERGUSON. So you have conscious and unconscious agents?

Miss BENTLEY. Of course, the way the whole principle works is like dropping

a pebble into a pond and the ripples spread out, and that is the way we work. Senator FERGUSON. Some are conscious and some are unconscious as to what they are doing?

Miss BENTLEY. That is correct. *** (IPR p. 420).

"Post War Foreign Policy Preparation, a State Department publication p. 142.

Five months after the Nixon Memorandum was circulated at top levels in the Government, White resigned his post as Assistant Secretary. He received the following letter:

APRIL 30, 1946.

DEAR MR. WHITE: I accept with regret your resignation as Assistant Secretary of the Treasury.

My regret is lessened, however, in the knowledge that you leave the Treasury only to assume new duties for the Government in the field of international economics as the United States Executive Director of the International Monetary Fund. In that position you will be able to carry forward the work you so ably began at Bretton Woods and you will have increased opportunity for the exercise of your wide knowledge and expertness in a field which is of utmost importance to world peace and security.

I am confident that in your new position you will add distinction to your already distinguished career with the Treasury.

Very sincerely yours,

HARRY S. TRUMAN.

Glasser, as already indicated, went to Moscow with Secretary of State Marshall in March 1946, which was 4 months after the circulation of the Nixon memorandum. It will be recalled that in the same March, Glasser gave an E, for excellent, rating to Kaplan, after Kaplan had come home from Germany. Glasser was also the financial expert of the American delegation which helped form UNRRA. He was Treasury spokesman on this international body "throughout its whole life." In this capacity, he was one of those "with a predominant voice" in determining which countries should receive aid from UNRRA, and which should not. He testified that during this period, he was in constant consultation with Dean Acheson, who spoke for the State Department on UNRRA matters (pp. 63–66). When Glasser left the Government on December 23, 1947, the following letter was written on his behalf by Dean Acheson:

Mr. H. L. LURIE,

Executive Director, Council of Jewish Federation and Welfare Funds, Inc., 165 West 46th Street, New York 19, N. Y.

DEAR MR. LURIE: I knew Harold Glasser during my 7 years in the State Department as Assistant Secretary and Under Secretary. We worked together on the problem of foreign funds control and other economic warfare matters. And he was a member of the United States delegation, of which I was chairman, to the first and second UNRRA Council meetings. During these council meetings I was impressed with his technical competence and his ability to work under the strain of long hours and difficult negotiations, carrying a large part of the burden of the financial committee of the council. He was a good working companion, maintaining an extraordinary evenness of temper and good humor under what were sometimes very trying circumstances. I am sure that he is able to approach problems in a well-organized and analytical manner, and that you will find him a first-rate economist.

Sincerely yours.

DEAN ACHESON.

Frank Coe followed White as Director of the Treasury Department's Division of Monetary Research. A few days after Hitler invaded the U. S. S. R., the Treasury sent Coe to London "to advise and assist Ambassador Winant on financial and other related economic matters" (exhibit 301).

Here is a portion of the testimony given by Coe when he appeared before us last year:

Senator O'CONOR. Mr. Coe, are you presently engaged in subversive activities? Mr. CoE. Mr. Chairman, under the protection afforded me by the fifth amendment, I respectfully decline to answer that question (U. N., p. 24).

Perlo's duties and responsibilities at the Treasury included the following:

To serve as an adviser and be responsible for recommending actions required in the following fields:

(a) Aspects of domestic economy in relation to international financial affairs such as the supply of money and its speed of circulation, bank deposits, and lending activity, the volume of private savings and their absorption through domestic investments, production, and employment trends in industries with important potential export markets.

(b) The effects on domestic economy of current international financial developments and the prospective effects of international financial proposals

402).

(p.

The man who wielded this power in the Government of the United States is now an open propagandist for the Soviet world conspiracy. His book, American Imperialism, was brought out by International Publishers, which is the official Communist Party publishing house in the United States. The book was given the highest praise that communism bestows when the Daily People's World, west coast "mouthpiece" of the party, hailed it with these words: "Perlo brings Lenin on imperialism up to date" (p. 406).

Adler lived with Glasser when both were faculty members at the People's Junior College in Chicago. Adler was representative of the Treasury Department in China after March 1, 1944. He returned to duty in Washington October 5, 1949.38

Adler was nominated by the Treasury in 1942 as the American representative on the American-British-Chinese Stabilization Fund. The function of this fund, presumably, was to save Nationalist China from the inflation that did so much to weaken it as it faced the Communist onslaught.

In this connection, the subcommittee calls attention to a note found among the papers produced by Whittaker Chambers which was written in Harry Dexter White's own hand:

We have just agreed to purchase 50 million more ounces of silver from China. China will have left (almost all in London) about 100 million ounces of silver. Her dollar balances are almost gone.

When Mr. Nixon introduced this note on the floor of the House on January 26, 1950, he said:

I discussed this excerpt with a man whose judgment I value in analyzing such documents, and he informed me that that information in the hands of individuals who desired to embarrass the Chinese Government would be almost invaluable.

THE NET OVER CAPITOL HILL

On February 8, 1947, the late Senator Robert M. La Follette, of Wisconsin, wrote an article for Collier's magazine entitled, "Turn the Light on Communism." Collier's introduced the article with this statement:

The former Senator from Wisconsin speaks as one of America's most noted liberals in outlining his program for fighting a serious menace.

On the basis of what he said in 1947, it had been the subcommittee's intention to ask Senator La Follette to appear before it. His regrettable death interfered with the subcommittee's plan. However, t is pertinent to examine his 1947 article in the light of what has

39 Hearings regarding Communism in the U. S. Government before the House Committee on Un-American Activities (81st Cong., 2d sess., p. 1726).