Reading Red Spy Queen, a biography of Elizabeth Bentley, I find the text as reliable as any, and more than many others. Follows what I do not quite understand. — (WPT)

From Elizabeth Bentley, Kathryn S. Olmsted

. . . Jordan claimed that the Soviets ha used Lend-Lease shipments to ferry stolen documents, uranium ore, and the printing plates for German occupation currency.¹²⁷

The occupation money scandal had been a hot topic in the American press a few years earlier. In 1945, the United States had given [?*] templates for occupation currency to the Soviets, who had proceeded to print millions of dollars worth of new German marks and distribute them to their soldiers. Because the U.S. Army had foolishly decided to redeem the marks with hard currency, the Russians� lack of restraint at the printing presses ended up costing the American taxpayers a quarter of a billion dollars.¹²⁸

* Who exactly "had given" the templates to the Soviets and in what manner ? — (WPT).

A 1947 congressional investigation blamed the army for the fiasco. Jordan and Stokes, however, wanted to revive the issue— . . .

Stokes met Bentley that summer of 1950 as they worked on their manuscripts. When he asked her if she knew anything about the currency scandal, she �was generous enough to drop work on a book of her own� to help him research . . .¹²⁹ . .

. . . Elizabeth inserted into Out of Bondage a paragraph alleging that she had been �able through Harry Dexter White to arrange that the United States Treasure Department turn the actual printing plates over to the Russians!�¹³⁰ . . .

But she had never told this story to the FBI¹³¹ She had not mentioned it to congressional investigators [etc.]. There is not documentary evidence from Venona or from the Soviet archives that she had anything to do with the decision to transfer the plates. . . . Bruce Craig has thoroughly examined this issue and determined that Harry White himself did not play a �decisive� role in shaping the policy, either.¹³²

---

    127. See Jordan with Stokes, From Major Jordan�s Diaries, 49-65, 126-37.
    128. See Craig, �Treasonable Do7ubt,� chap. 5.
    129. Richard Stokes, �The Quarter-Billion Occupation Mark Swindle,� Freeman, November 17, 1952, 121.
    130. Bentley, Out of Bondage, 241.
    131. Memo, Hennrich to Belmont, October 23, 1953, Bentley file, 134-435-84. [ Note that is, the FBI had (or, could find) no record of her telling them about the matter ; this much I gather from "Treasonable Doubt" by Bruce Craig. (WPT)]
    132. Craig, �Treasonable Doubt,� 245. Like many officials, White did not foresee the disastrous consequences of the decision to share the plates. But there is no evidence that he acted on Soviet orders. [ Note 'According to Morgenthau, it was he, not Harry Dexter White, who ultimately decided to provide the Soviets with the plates.' (Craig, p. 134). Did not Harry Dexter White have influence on Morgenthau ? What did that matter in the end that it was Morgenthau's decision -- who was "the boss" ? (WPT)]

University of North Carolina Press, 2002, pages 169 - 171.

Comment one can hardly see fault except : all this could be used by the specialists in disinformation.

Apparently the book authored by Ms. Bentley was not meant as an exact statement of the historic record but rather as a personal story by an author who had been there and who, apparently, would not shy from embellishing the story a little bit. Personal vanity would seem likely to have been present, itself not much of a vice.

A few data have proved troublesome. The paragraphs in question stand :

�Lud Ullman had wormed his way into the good graces of high-up Air Corps officers in the Pentagon, and from them he was able to find out the date of D-day four days ahead of time ; I remember him chuckling because he had been able to win a bet from a fellow worker. �The guy didn�t have a chance,� he said. �I knew the date and he didn�t.�

Around this time he also brought me samples of the marks the United States was preparing for use in the German occupation. The Russians were delighted, as they were planning to counterfeit them. However, due to a complicated ink process this proved impossible—until I was able through Harry Dexter White to arrange that the United States Treasury Department turn the actual printing plates over to the Russians!� (Out of Bondage, pp. 240-241).

A question : what exactly could have been �invented out of whole cloth� in this case ?

There is no doubt that there was some irregularity with the occupation currency. So far, I find that the plates were indeed given the Soviets, upon insistence from Gromyko and Molotov, in order to maintain "good relations" with the ally.

Apparently, the Soviets had printed inordinate amounts of money. Gives Bruce Craig, "Treasonable Doubt" : �White, and other Treasury officials were certainly well aware that inflation could result from the distribution of large amounts of occupation-currency, and neither White nor anyone else in the Treasure Department could possibly have anticipated the enormous temporary drain on the U.S. Treasury caused by the failure of the War Department to establish a sound currency redemption policy.� (page 127).

Would not the �ally� tell the Americans how much money they printed ? Just as silly a question as silly seems the placing of blame on the War Department for failure to establish a sound currency redemption policy.

What may have been invented by Ms. Bentley was the extent to which she herself was responsible for the affair. Looking through "Treasonable Doubt" by Bruce Craig I feel inclined to suspect that her story (as in "Out of Bondage") was actually more nearly true than I had thought before.

* * *

Some writers would try to infer anything from all this or such like representations, and then amplify. Witness the title given (by the author? by an editor?) to the chapter under consideration (Chapter 7), or the as-if conclusion at the end of the chapter.

An example of ambiguity : � . . . there is no evidence that [Harry D. White] acted on Soviet orders.� —

That could be easily construed as his exoneration. The facts apparently were : "Since White was not a party member, but a fellow traveler, I could only suggest or urge, not give orders. This distinction White understood very well, and he thoroughly enjoyed the sense of being in touch with the party, but not in it, courted, by it, but yielding only as much as he chose.� (Whittaker Chambers, Witness).

WPT

Olmsted, Kathryn S. Title Red spy queen : a biography of Elizabeth Bentley / Kathryn S. Olmsted. Publisher Chapel Hill : University of North Carolina Press, c2002. Description xiv, 268 p. : ill. ; 23 cm. ISBN 0807827398 (cloth : alk. paper) Language English Note Includes bibliographical references (p. [245]-255) and index. Subject Bentley, Elizabeth.

Olmsted, Kathryn. Title Challenging the secret government : the post-Watergate investigations of the CIA and FBI / Kathryn Olmsted. Publisher Chapel Hill : University of North Carolina Press, c1996. Description xiii, 255 p. : ill. ; 25 cm. ISBN 080782254X (cloth : alk. paper) 0807845620 (pbk. : alk. paper) Language English Note Includes bibliographical references (p. 195-247) and index. Subject United States. Central Intelligence Agency.

Olmsted, Kathryn Signe. Title Challenging the secret government : congress and the press investigate the intelligence community, 1974-76. Publisher [Davis, Calif.] 1993. Description 376 leaves. Language English Note SPEC. COLL. HAS ARCHIVAL COPY; MICRO. ROOM HAS MICROFICHE COPY (4 SHEETS). Typescript. Degree granted in History. Note Thesis (Ph.D.)--U. of Calif., Davis.