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This meets one type of opposition to gold purchases. (Hansen to White, 11 June 1943)59 Despite some divergence in their perspectives, Hansen and the other Fed specialists shared the same anxiety about the dangers connected with unlimited gold purchases on the part of the Treasury, which could cause worldwide depression as well as inflation in the United States. But White and Morgenthau were immovable on this point, and refused to grant the fund any real power to limit American gold policy (Eckes, 1975, p.
Moreover it set out the sort of post-war economic order the United States had to fight for. In EFG analysis and recommendations, short-term and long-term objectives were strictly related. American foreign policy had to be oriented to the attainment of a new world order consistent with its liberal-democratic creed and designed to serve its national economic interest. The Grand Area project seemed to satisfy both of these requirements. 18 The EFG itself took the initiative. 19 After the Great Depression, laissez-faire and free trade had lost their shine and a novel economic program was needed to be championed against the Nazis’ ‘new order’.
53). The apparent implication that White was reluctant to use the ESF for this purpose is belied by the archival record, since it clearly was White who proposed the idea in the first instance. Memorandum from White (and drafted by White) to Morgenthau, ‘Chile’s Request for Assistance’ (12 September 1940); and untitled memorandum from White to Morgenthau (drafted by a member of White’s staff, Frank O. Southard) dated 27 May 1942; College Park, Boxes 3 and 7, respectively. The proposal for Chile was a repurchase arrangement similar to those used earlier in Mexico and other countries.