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Morgenthau's influence collapsed very quickly after Truman became President in April 1945. He put in his resignation in protest against not being invited to accompany Truman to Potsdam in July and, probably to his surprise, it was accepted. The rest of his life - he died in 1967 - was devoted to support for the state of Israel. White, however, clung on long enough to be able to deliver one last humiliation to his old sparring partner Keynes through the negotiations for an American loan in December 1945.

We saw previously how Article VII of the Lend Lease agreement negotiated by White and Keynes committed the parties to 'provide against discrimination in either the United States of America or the United Kingdom against the importation of any produce originating in the other country; and they shall provide for the formulation of measures for the achievement of these ends' and how this provoked a stormy reaction in Britain. As a result 'Roosevelt assured Churchill that Article VII wasn't intended as an attack on Imperial Preference and the impact of it was watered down and combined with other, more interesting aims [including the expansion of production and employment] in the "Mutual Aid (Lend Lease) Agreement" finally signed in February 1942.' (6) It did however still entail a commitment 'to the elimination of all forms of discriminatory treatment in international commerce and to the reduction of tariffs and other trade barriers' and this was still opposed by the British Treasury and Bank of England, still anxious to maintain privileged trading relations with the Empire. Now, as a condition of a loan without which Keynes believed the restoration of the British economy was impossible, White demanded not just the dismantling of Imperial preference but also the imminent mutual convertibility of the pound and the dollar. This was part of the Bretton Woods arrangement but it wasn't to be introduced until conditions were ripe, assumed to be several years away. These conditions provoked outrage in Britain and very stormy debates in Parliament.

(6) I'm quoting myself here, from the previous article in this series. The source for the information is Skidelsky, pp.133 and 226.

Skidelsky (p.448) describes the speech Keynes made in the House of Lords in support of the agreement as 'the most courageous and skilful public speech of his life.' But he also describes it as a masterpiece of rhetoric rather than of reasoned analysis. By the time Skidelsky had reached that point in writing his massive biography, he had, as I discussed in the earlier article, been won over to an anti-Keynesian, Friedmanite view of economics (he was reconverted to Keynes by the Great Financial Crash). It could be argued that this final intervention in public life was Keynes arguing against his own life's work and thus contributed to muddying the water of his legacy. He died in April 1946, the month in which the loan he had negotiated was agreed by Congress.