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American History - The Marshall Plan


The winter of 1946-47 was one of the bitterest Europe had known for decades. The cold weather intensified the severe economic and social dislocation that plagued the Continent following the long and destructive war. The great personal suffering and internal upheavels threatened chaos.

Belgium
The average European worker was eating far less than he needed. Despite the tremendous loss of skilled workers due to the war, there was virtually no training going on.

There was a lack of coal, steel, electric power, railroad cars, locomotives, trucks, oil, and grains. Inflation was rampant. Foreign exchange was exhausted.

All of the West European countries suffered political instability.

Denmark
This was the Europe General of the Army George C. Marshall, recently named Secreatary of State, saw when he attended a meeting of Foreign Ministers in Moscow on March 1, 1947. The meeting had been called to ease growing tensions. There, with John Foster Dulles, Benjamin V. Cohen, and Ambassador Walter Bedell Smith, Secretary Marshall became increasingly disillusioned over the prospects of cooperation with the Soviet Union, the only other country capable of leadership. Following a private and stormy interview with the Russian dictator, Marshall became even more certain that Joseph Stalin meant to profit from Europe's maladies rather than seek a program of healing and reconstruction.

France
It was a frightening prospect. After viewing conditions in Europe first hand, Marshall was convinced that the only hope for Europe's recovery lay with America. Aside from the moral considerations, he could see that the reconstruction and economic stability of Europe were clearly in the interests of the United States.

Germany
Upon his return from Europe in April 1947, Marshall gave top priority in the State Department to the problem of Europe's needs. He envisioned a plan that would rescue Europe and, at the same time, be acceptable to the American people. In addition to his own observations, the ideas which resulted in his classic speech at Harvard University on June 5, 1947, and the ensuing Marshall Plan, came from many sources.

Greece
Marshall had directed that a Policy Planning Staff be created in the State Department. Upon his return from Europe, he gave it the task of recommending a program for the future of the Continent. His charge to George F Kennan, head of the Staff, was urgent. As a solution, the Planning Staff conceived an assistance program, not directed to combating communism, but to restoring the economic health and vigor of European society. The key, agreed to by all American foreign policy experts, and backed enthusiastically by President Truman, was that the initiative for the reconstruction program had to come from the joint action of the participating West European countries.

Iceland
Marshall decided that he would make the announcement in a speech. For a pronouncement of such significance, it was short, but to the point. In keeping with his character, there were no oratorical flourishes. He repeated his view that for the present, Europe must have "substantial additional help," mainly from the United States, "or face economic, social, and political deterioration of a very grave character." He deemed it logical "that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace."

Ireland
His appeal was put on a broad base. "Our policy," he declared, "is directed not against any country or doctrine but against hunger, poverty, desperation, and chaos." It was not to be something imposed by the United States. "The initiation, I think, must come from Europe. The role of this country should consist of friendly aid in the drafting of a European program and of later support of such a program so far as it may be practical for us to do so. The program should be a joint one, agreed to by a number of, if not all, European nations."

Italy
Thus, out of General Marshall's address evolved the European Recovery Program of 1948. It concluded four years later, its mission accomplished. Through the Economic Cooperation Administration, the United States provided the participating West European countries with $13.3 billion for economic reconstruction. Besides the rehabilitation of these countries and the strengthening of economic, social, and political structures, the Marshall Plan sparked a new spirit of cooperation and mutual help among Western nations. For the United States, the Marshall Plan represented the new responsibilities of the leading world power. The self-help principle embodied in the Marshall Plan encouraged the continuance of foreign assistance programs as an integral part of United States foreign policy.

Luxembourg
Before the plan could be put into action, the necessary legislation had to surmount strong opposition in Congress. Marshall's greatest contribution came in his efforts to get his program adopted. With the aid of many people in government, education, and industry, he helped sell the citizens of the United States on the European Recovery Program. During the legislative battle in 1948, he worked closely with congressional leaders, particularly Senator Arthur Vandenburg, chairman of the powerful Foreign Relations Committee. Strong support came from President Truman as well as other individuals like Averill Harriman, Paul G. Hoffman, and Christian Herter. General Marshall toured the country, appearing before business organizations, labor groups, farm federations, and various women's organizations. Assessing his own role in later years, he believed this effort was his most important contribution to the adoption of the European Recovery Program.

Netherlands
The Program officially ended on December 31, 1951, forty-five months after its inception. Aid rendered to Europe during the life of the Marshall Plan amounted to roughly 1.2 percent of the gross national product (GNP) of the United States. It produced astounding results. Europe's GNP rose from $119.6 billion in 1947 to almost $159 billion in 1951 - an increase of 32.5 percent. Industrial production increased 40 percent over 1938 levels and agricultural output exceeded the prewar figure by 11 percent. In 1950, the volume of intra-European trade stood at 24 percent above the 1938 level and by 1953, it had topped 40 percent. It may be truly said that the European Recovery Program provided Europe with the momentum it needed to achieve economic viability.

Norway
In formulating and funding the European Recovery Program, the United States responded not only to humanitarian concerns, but to considerations of self-interest as well. First, an economically healthy Europe would be, as it had been prior to World War II, America's best customer. Second, as long as Europe's economy remained disorganized and anemic, the Continent could not act as an effective bulwark against Soviet imperialism and communist subversion, but would constitute a continuing drain on the financial and material reserves of North America. In creating and implementing the Marshall Plan, its architects encountered two major obstacles; isolationism and economic nationalism in the United States, and parochialsim in Europe. An appeal to humanitarian hopes and anti-Communist fears were sufficient to overcome the first, while the leverage of American aid and the political benefits that would accrue to those European leaders who obtained it were enough to overwhelm the second.

Portugal
By raising living standards and increasing productivity in Western Europe, the Marshall Plan curbed Communism, stimulated trade and economic growth, helped preserve political stability, and made possible a vigorous and enduring North Atlantic Treaty Organization. Given its objectives, it was the most successful foreign aid program in American history.