In 1933, Roosevelt became president of the United States and appointed Morgenthau to head the Farm Credit Association. A year later, Morgenthau became secretary of the treasury, a position he retained until Roosevelt's death in April 1945, serving as one of the president's most trusted advisers on both domestic and international affairs.
An early and tenacious opponent of fascism, Morgenthau argued from the mid-1930s that the United States could not remain aloof from international affairs, and he urged forceful U.S. action in both Europe and Asia. He supported economic sanctions against aggressor nations, and in 1937, he prevailed on Roosevelt to assist China financially against Japan. In 1941, when Japan occupied bases in southern French Indochina, Morgenthau advocated a complete American economic embargo of Japan. He likewise urged the imposition of economic sanctions on Germany, and following the September 1938 Munich crisis, he even suggested that Roosevelt launch an American "defensive war" against Adolf Hitler's Germany. Understandably, Morgenthau was also a leading advocate of massive increases in U.S. defense spending.
Almost a year before Pearl Harbor, the Treasury Department was heavily involved in developing the Lend-Lease program of military assistance to Great Britain and other nations, which had been passed by Congress in spring 1941. Morgenthau successfully financed the extremely costly U.S. war effort while keeping inflation and interest rates low. Under his direction, well-organized campaigns persuaded the American public to purchase over $12.9 billion in war bonds.
Morgenthau headed the U.S. delegation to the 1944 Bretton Woods Conference, where proposals were drafted for two financial institutions to fund postwar reconstruction—the International Monetary Fund and the International Bank for Reconstruction and Development. He also strongly supported the creation of the United Nations, an agency he anticipated would enable rich states to facilitate development in poorer nations.
In early 1944, Morgenthau complained to Roosevelt of the State Department's disinterest in assisting Jewish Holocaust survivors in Europe, impelling Roosevelt to create the War Refugee Board. Later that year, hoping to destroy defeated Germany's future war-making potential, Morgenthau drafted a harsh proposal to divide that country into separate states and dismantle its industrial capacity. At the September 1944 Quebec Conference, he initially persuaded Roosevelt and British Prime Minister Winston L. S. Churchill to accept this plan, a decision State and War Department officials subsequently succeeded in reversing.
After Roosevelt's death in April 1945, Morgenthau's influence quickly declined. Three months later, he resigned and returned to his farm. For the next decade, he energetically chaired Jewish philanthropic organizations, raising funds for Israel. Morgenthau died at Poughkeepsie, New York, on 6 February 1967.
Beschloss, Michael R. The Conquerors: Roosevelt, Truman, and the Destruction of Hitler's Germany, 1941–1945. New York: Simon and Schuster, 2002.; Blum, John Morton. From the Morgenthau Diaries. 3 vols. Boston: Houghton Mifflin, 1959–1967.; Blum, John Morton. Roosevelt and Morgenthau. Boston: Houghton Mifflin, 1970.; Kimball, Warren F. Swords or Ploughshares? The Morgenthau Plan for Defeated Nazi Germany, 1943–1946. Philadelphia: Lippincott, 1976.; Morgenthau, Henry, III. Mostly Morgenthaus: A Family Story. New York: Ticknor and Fields, 1991.