Just a little history class cause I have seen some false information here and there.
The start Captain von Stephanitz experimented with breeding dogs, taking the best of the shepherd dogs across the country to get the qualities he desired. Grief, a white coated shepherd dog, was one of the shepherds Max often used to generate his idea of the perfect working dog. In 1899, he attended The Karlsruhe Exhibition and bought Hektor Linkrsheim, a grandson of Grief, but Max immediately changed his name to Horand von Grafrath. Because Grief was white and Horand was line related to him, Horand carried the white gene and sired many white pups and many colored pups with the white recessive gene.
On April 22, 1899 the Verein fur Deutsche Shaferhund (the SV) was founded, with Max von Stephanitz as the first president. Horand became the first entry in the newly found SV Stud Book and the first written foundation of the German Shepherd breed. There was another club called the Phalax, but this club only survived for approximately four years.
As German Shepherds grew in numbers and increased in popularity, the SV held dog shows and Max continued to perfect the breed. He wrote and distributed newsletters discussing which dog gave certain qualities and which dogs to breed together. During that era, white-coated German Shepherds were the same in stature and status as a dark-coated German Shepherd. Repeatedly, Max pounded the issue that the German Shepherd was a working breed first and foremost. The beauty is in the working abilities of the dog. He diligently worked to keep the SV (and as such the breeders) on that focus. He created the Koerung, a survey in which the dogs were thoroughly examined, judged, and deemed fit or unfit for breeding. In the beginning, many of these men were idealistic and enthusiastic. Their willingness to follow his orders on breeding largely accounts for the swiftness that the diverse sheep dogs were molded into a distinct and recognizable breed. The turnDuring Winifred Stricklandīs interviews with Herta Von Stephanitz (daughter of Max), she learned some history on why Max gave up. In the 1930īs Nazism started to spread throughout Germany rapidly. They were the "elite" and they had power. At the same time, breeders of "luxury" breeds disputed Maxīs unyielding position that this was a utilitarian breed. They wanted to focus on beauty and less worry about function. The racial views and plans of the Nazis gave them a different view of what the German Shepherd should have been than what Max von Stephanitz' dream of the German Shepherd was. Many SV members were Nazis and intervened in the SV affairs. They continuously attempted to rid Max of his work. They even threatened him with a concentration camp. After thirty-six years of managing the SV, he gave up. He died one year later on April 22, 1936; ironically this was the anniversary of the conception of the SV.
The Nazis, including Hitler, saw the white coat as an undesirable trait, and further assumed that the white coated dogs' genes paled the darker coated dogs' colors. With little knowledge of science, they blamed the whites for many diseases as well. Germany soon barred white German Shepherds from the conformation ring and the breeding pool. The United States followed suit in the late fifties, early sixties. (The exact date is unknown due to lack of finding correct historical documents) While Shepherd enthusiasts in the USA wanted to remove them also from the breeding pool, the AKC refused to withhold them from registration. Hence, the color white is in the top number of colors of GSDīs registered with the AKC today!
History provides us with the factual information that the White German Shepherd was an important aspect in the founding of the German Shepherd breed. History also shows us when and where the discrimination came from. During the time the white coat color was banned, science was lacking the information that we have today, and many false theories (although stated as facts!) were given to the white coat of a German Shepherd. Breeders thought that the white coat caused dark shepherdīs coat to pale into an undesirable light color. (Remember their focus was on beauty in a large way...) They also thought that the white coat was a sign of albinism or disease. Today, science and breeding history has proven that the white recessive gene masks the actual color of the dog, making them appear white, and brings along no health problems: in other words, the gene which causes white does not itself cause any other defect. They are otherwise genetically identical to colored German Shepherds. The geneThere are many misconceptions about white-coated German Shepherd Dogs and the gene that expresses their coat color. First and foremost, white German Shepherd Dogs are NOT albinos. Albinos lack all pigment where white German Shepherd Dogs have brown eyes and black pigment on their noses, around their mouth, on their paw pads, around their eye rims and sometimes have darker skin and nails.
It was once thought that breeding to white German Shepherd Dogs would definitely lead to color paling, but the white gene is not a dilute gene (such as liver and blue) but a masking gene. A masking gene masks the real color and pattern of the dog. A white German Shepherd Dog can be any color and pattern found in the breed including black, black and tan, black and red, black and silver, black and cream, blue, liver, sable, saddled and bi-colored. The only possibility for dilution when using a white dog in a breeding program is if the white is masking a diluted color such as a black and silver, black and cream or is a blue or liver. Because it is unknown what color or pattern a white German Shepherd Dog is masking, it is hard to determine what colors the dog will throw when bred to a non-white German Shepherd Dog.
The white gene is also a recessive gene. The gene ONLY expresses coat color and is not linked to poor health, temperament or any other part of the dog's genetic make-up. The black coat color is also a recessive. A non-white German Shepherd Dog can carry the gene but not express it. When breeding non-white German Shepherd Dogs, the only way the gene can be expressed in some of the offspring is if both parents carry it. When a white dog is bred to a non-white dog that does not carry the gene, none of the offspring will express the white coat but they will be carriers of the white gene. If offspring are bred to a white, some of their offspring will express the white coat color. White bred to white will always produce white offspring.
Many of the misconceptions about the white coat color came into existence before modern genetics research. Many people thought white was linked to albinism and other health issues. Although these thoughts have been found to be untrue, the misconceptions have been hard to correct.
The elite breeders todayWhite German Shepherd Dogs can be found in police forces across the country. They're found in bomb detection squads, drug interdiction units, tracking, attack work, community activities, and other activities required of a dog on any police force. The dogs are also actively involved in search and rescue units, keeping an eye on the family children, herding flocks, guiding the blind, assisting the handicapped, working as therapy dogs, guarding the home, appearing in movies and on television, and doing everything else that the wonderfully versatile German Shepherd Dog is famous for doing.
On many kennel sites that breeds the white coated GSD, they proudly white that they are against the seperation of the breed.
FAQ:
Q: Are white German Shepherds AKC (American Kennel Club) or CKC (Canadian Kennel Club) registerable?
A: Yes. If both of the parents (regardless of color) are registered with the AKC or CKC as German Shepherds, then any resulting puppy would be fully registerable as a German Shepherd Dog. Neither AKC nor CKC restrict registration of a German Shepherd based on its color.
Q: Are white German Shepherds registerable with UKC (United Kennel Club) as German Shepherd Dogs?
A: Yes. While UKC has approved a new breed of dog called the "White Shepherd," your white German Shepherd Dog may still be registered as a German Shepherd Dog with UKC and may be shown in the conformation ring as a German Shepherd Dog.Why the breed should not be seperatedThe WGSDCA (White GSD club of American) is committed to white German Shepherd Dog staying part of the German Shepherd Dog breed versus the dog becoming a separate breed (White Shepherd). The reasons the WGSDCA feels it's important for the dog to stay a German Shepherd Dog as opposed to separating the breed are as follows:
1 The white coat color helped create and has been part of the German Shepherd Dog breed since the inception of the breed.
2 The dog is AKC registered as a German Shepherd Dog.
3 The gene pool for the white German Shepherd Dog is relatively small and inadequate for separation.
4 The white German Shepherd Dog can benefit both structurally, mentally and health wise when bred to "colored" German Shepherd Dogs.
5 Coat color should not be a basis for separating a breed. Varying coat colors in other AKC recognized breeds show as one breed or as a variety.
6 The white recessive gene is carried by some "colored" German Shepherd Dogs. If the white German Shepherd Dog were to be separated into a new breed, white-coated dogs born to "colored" German Shepherd Dogs would not be eligible for AKC registration since they are not the same breed.
7 Separating the breed just to be able to show in AKC conformation events is not a position the WGSDCA feels will ultimately be of benefit to the future of the breed.
Happy white shepherding everyone!

Resources: WGSDCA-white gene
Other colors of the breed that is being discriminated:
These patterns are being overlooked by most GSD breeders cause of the false information that is being spread around these patterns, none of these are unhealthy to the dog.
What has become a dangerous trend though is that some backyard breeders sees these unique colors as an easy way of earning lots of money, thatīs where these dogs get their poor health, it is not due to the color itself, but the breeder.
Dilution- Blue & Isabella. The dilution gene occurs on the D locus. It is recessive, so d is dilute and D is non-dilute, and in order for a dog to be dilute it must have the genotype dd. The dilution gene affects eumelanin (black and liver), although phaeomelanin (red) may be lightened slightly as well. When a dog has two copies of the d gene it impairs its ability to make full-coloured pigment, so the pigment it does produce is paler than on a normal dog. A black dog with the dilution gene becomes blue and a liver dog becomes isabella-
Liver- The liver gene occurs on the B locus. It is recessive, so b is liver and B is non-liver, and in order for a dog to be liver it must have the genotype bb. This means that a liver puppy can be born from black parents if both are carriers of the liver gene (i.e. if both are Bb then at least one pup in four will be bb. The liver gene affects eumelanin (black pigment) only. All of the black in the coat will be turned to liver when a dog is bb on the B locus. This includes saddles, shading, merle etc. It is genetically impossible for a liver dog to have even one black or even grey hair in its coat, or for a black or blue dog to have liver in its coat (although bronzing and seal may appear liver). The entire coat on a liver will be shades of brown, with red (tan) or white according to the other genes present.