The Marshall Programme and Postwar Economic Recovery

The Marshall Program was a massive commitment to European recovery later World War II that was largely supported past Americans.

Top image:Marshall Programme logo, courtesy of the George Marshall Foundation.

On May 8, 1947, Under Secretary of State Dean Acheson stood before a lath of farmers and businessmen gathered in a small town in the middle of the Mississippi Delta, ready to unveil the pattern for one of the most significant strategic actions of the early Cold War: The Marshall Plan. Acheson traveled to Delta State Academy in Cleveland, Mississippi to attend the almanac meeting of the Delta Quango that has drawn representatives every year since 1935 from the far reaches of the Delta region to discuss crops, finances, and social activities.

Just the poplin and seersucker-suited men of the Delta Council were about to be treated to a clarification of an aggressive economic plan designed to assistance Europeans with economical recovery following the devastation of World War Ii. During his spoken language, Acheson stressed that "the ultimate recovery of Europe and Asia depended on the reconstruction of Frg and Japan," the "great workshops" of their respective continents, that would require international assistance to restore prewar levels of economic stability.

Acheson stressed, still, that this form of "emergency assistance" would not but be for the rebuilding of Germany and Japan–before long to exist US allies in a new Common cold State of war club dominated by the United states and Soviet Union–but for "building world political and economic stability, in promoting human freedom and Democratic institutions, in fostering liberal trading policies, and in strengthening the authority of the Us." And he needed the support of all Americans, including the local farmers and businessmen of the Mississippi Delta, to strengthen America's part in securing peace and prosperity in an increasingly insecure world.

The following month during a first speech delivered to the graduating class of Harvard University, and then Secretary of Land and former Regular army Chief of Staff George Marshall revealed a rough outline of Acheson'southward Delta Quango proposition. Marshall alluded to the need for the U.s. to create a program for European economic recovery "and so far equally it may be practical for us to do so" and to make information technology a joint endeavour between the Us and European nations. There was little denial amongst Marshall or other American leaders that Europe was struggling to rebuild and the economic state of affairs away was deteriorating.

While industrial output was rebounding to prewar levels (peculiarly in western Germany), this did non transfer into rapid economical growth for Europe, every bit most of the recovery came from borrowing against stocks and strange assets, and merchandise consisted mainly of importing food for hungry people. There was also a growing dollar arrears in Europe, something that Acheson explained to the Delta Council was too negatively influencing the American economy: without enough dollars to pay for imports, European nations would be prohibited from trading with the United States, creating financial difficulties for farmers and businessmen.

George C. Marshall

George C. Marshall (third from left, front row) receiving an honorary caste at Harvard University, June v, 1947, courtesy of the George C. Marshall Center for Security Studies.

The economic threat was also an indicator of brewing strategic troubles for the Us. During the early on years of the Cold War, the fear that economical struggles could lead to political instability and open the door for communist and Soviet influences in Europe characterized a new approach to foreign affairs. Tensions between the United States and the Soviet Union over postwar geopolitical influence in Europe signaled a growing conflict between the ii superpowers.

American leaders, particularly Acheson, diplomat and director of policy planning for the State Department George Kennan, Marshall, and President Harry Truman feared that parties and organizations backed by the Soviet Marriage could arise to ability in the vulnerable European nations. This would allow the Soviets to establish a foothold that would spell trouble for American economic and political interests in an increasingly polarizing Europe.

Truman and his advisors pointed to instability in Greece and Turkey following the war as proof of a demand for American intervention. Ceremonious State of war in Greece between the communist-backed National Liberation Front and the British-supported Greek monarchy challenged Britain's already strained power to support anti-communist forces while trying to rebuild later on the war.

Soviet pressure on Turkey to grant the USSR special privileges for using the Turkish Straits for trade also strained Great britain's ability to militarily bolster Turkey. The British formally requested that the Us take over supporting Turkey and Greece in February 1947, prompting Truman to phone call for a programme of economic and armed forces aid to "support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures." This became known equally the Truman Doctrine.

In response, Congress approved $400 one thousand thousand in assistance to Hellenic republic and Turkey with broad back up from the American public, followed by success in pushing back the communist forces in Greece. Only the Truman Doctrine provided strong rhetoric for continuously assisting in the fight against communism rather than a policy that set articulate guidelines for what came next. From July 1945 through Dec of 1947, the $400 million dedicated to supporting anti-communist forces under the Truman Doctrine was part of approximately $xi billion in assistance to Europe, much of which was intended for more than immediate humanitarian relief from social, economic, and political challenges to Europe, rather than longterm plans for stability.

As economic conditions in Europe continued to stagnate while the fright of communist political infiltration increased, many in Truman's administration recognized a need for a more structured plan that would straight accost the underlying condition–economical instability. Ideally, a more comprehensive plan would besides call for joint cooperation between the Usa and European nations in solving economic challenges rather than simply an injection of help by the U.s.. These ideas would grade the footing of the European Recovery Program (ERP), or the Marshall Plan.

While Marshall is the human associated with the ERP as a issue of his Harvard commencement spoken communication, historians take noted that many in Truman'due south administration contributed to the plan's overall objectives. Marshall and Kennan criticized Truman's reliance on superficial rhetoric rather than clear, extended economic plans for European recovery, which prompted both to investigate what the best forms of aid would be.

Acheson besides recognized a need for a more than comprehensive and detailed recovery plan and, as a result, charged Kennan with preparing a study early in 1947 that clearly outlined the difficulties with trade, imports, and recovery in Europe. But subsequently in his memoirs, Acheson explained that it was Truman's Under Secretary of Land for Economical Affairs, William Clayton, who had the most influence on the last iteration of the Marshall Plan.

Born in Tupelo, Mississippi, Clayton was a partner in a successful cotton house based in Oklahoma before entering a life of civil service. During World War I, he served on the Cotton Distribution Committee of the War Industries Board and continued to advise Presidents Roosevelt and Truman on economic matters during the war before obtaining his position equally Nether Secretary, which he held from 1946 through 1947. In this part, he traveled to Europe during the postwar period and witnessed first hand the continent's struggles to overcome wartime destruction and economical instability.

As a businessman, Clayton was concerned about trade relations betwixt the United States and European nations, merely likewise warned of the political dangers and threats from communism that could be found in the ruins of World War 2. In March of 1947, Clayton wrote a memo to Truman expressing his business near European economic atmospheric condition. He considered Great britain's inability to maintain economic support for Greece and Turkey and urged his colleagues to take seriously his worries about what this meant for the political time to come of Europe and the globe:

"The reins of world leadership are fast slipping from Great britain'due south competent, but now very weak hands. These reins will be picked up either by the United states of america or by Russia. If by Russia, there will almost certainly exist a state of war in the adjacent decade or so, with the odds against usa. If by the United States, state of war can nearly certainly exist prevented."

Later on attending the Un Economic Commission for Europe in Geneva in May 1947, Clayton submitted a report, "The European Crisis," directly to Marshall. Clayton argued that the economical state of affairs was far worse than anyone could imagine, and that "without farther prompt and substantial aid from the United States, economic, social and political disintegration will overwhelm Europe."

Marshall's attendance of the Moscow Conference in Apr 1947 further solidified Clayton's concerns as well equally Marshall'south conventionalities that the Soviet Wedlock could not be entrusted to cooperate with the United States or other European nations in developing an economic recovery plan. The conference called together the "Big Iv" (British Foreign Government minister Ernest Bevin, Marshall, Soviet Foreign Government minister Vyacheslav Molotov, and French Foreign Minister Georges Bidault) to discuss an official peace treaty afterwards the war betwixt the Soviets and Germany and Austria and the reconstruction of Deutschland. Marshall non only blamed the Soviets for stalling the peace talks, just also recounted later in an interview that information technology was at that moment that he realized Clayton's reports rang true:

The Marshall Plan was an outgrowth of the disillusionment over the Moscow Conference which proved conclusively that the Soviet Wedlock was not negotiating in proficient faith and could not exist induced to cooperate in achieving European recovery.

Marshall later used his commencement address at Harvard to introduce a broad proposal–rather than a program–to the attendees and ultimately the public:

"It is logical that the United States should do whatever it is able to exercise to aid in the render of normal economic health to the world, without which there can exist no political stability and no assured peace. Our policy is not directed against whatsoever country, but against hunger, poverty, agony and chaos. Any government that is willing to aid in recovery volition discover full co-functioning on the part of the United States. Its purpose should be the revival of a working economy in the globe and then as to permit the emergence of political and social conditions in which free institutions can be."

Marshall's speech called on European nations to work with each other and the United States on economic recovery, rather than to but receive an injection of fiscal assistance to rebuild Europe. In return, it was believed democracy every bit well as peace and prosperity would flourish worldwide. Marshall did not desire to outright exclude the Soviet Matrimony, but wanted to create a spirit of open up cooperation for the greater proficient while besides recognizing America'southward growing international, anti-communist part in the new Cold War world lodge.

With the general goals introduced, Marshall and others in Truman'south administration prepare to work figuring out how this plan would be different from previous forms of postwar aid. The group decided that in gild for the plan to exist successful, participating European nations must assist in developing the plan for recovery which would, every bit Marshall indicated, "provide a cure rather than a mere palliative" for economic distress, 1 that would promote long term economical growth. Also, Marshall and Truman wanted the plan to be approved with bipartisan support from Congress and wide blessing from the American public.

President Harry S Truman, General George Marshall, Paul Hoffman and Averell Harriman in the Oval Office

From left to right, President Harry S Truman, General George Marshall, Paul Hoffman and Averell Harriman in the Oval Office discussing the Marshall Plan, Nov. 29, 1948, courtesy of the National Archives and Records Administration.

On July 12, 1947, representatives from 16 European nations met in Paris to discuss the economic issues they faced every bit well as potential solutions–a required grade of self-sufficiency for receiving assistance under the proposed programme. From this meeting emerged the Commission of European Economic Cooperation (CEEC), a collaborative group of participating members who agreed to create a four-year program that would address challenges in production and economic stability within and across their respective nations. Marshall did not exclude any European nations from joining the group, including the Soviet Union.

The USSR and its satellites, nonetheless, rejected the conditions of the plan for fear of limits to their economic sovereignty–further supporting Marshall's convictions that there was no interest in cooperation amidst the Soviets and raising concerns near the USSR's motives in Europe and beyond. In one case the CEEC presented its cocky-determined plan to Marshall, Truman and his administration worked closely with Congress, likewise as diverse federal agencies, including the Council of Economic Advisers. The latter produced a study of the impact of exportation demands under the proposed program on production and supplies.

Past early 1948, the Truman Administration had hammered out the multi-stepped Economic Recovery Plan; it now needed to go before Congress. Just Truman and his assistants as well knew that in that location would be challenges. While Americans overwhelmingly supported the assistance under the Truman Doctrine, in that location was more hesitancy to support nearly $13 billion in taxpayers' money for an extended, peacetime foreign aid program, something unprecedented in American history.

With Republicans in accuse of Congress, the President and his Democratic supporters faced a challenge in winning approval for the proposed program, especially during an election year in 1948. Some in Congress argued that rather than combating communism, the Marshall Programme was "a socialist blueprint" itself, threatening to waste product money on other nations rather than build upwards the United states' own defenses. The toll of supporting Europe would likewise come at the price of inflation and higher taxes.

Rather than securing economical prosperity for all, Representative Charles Westward. Vursell argued that the Marshall Plan would "wreck the financial solvency of this Government, engulfing the nation in poverty and chaos." And the constituents they represented were also not entirely convinced of the demand for more European spending. Marshall later recalled that his "greatest fear" in getting this programme passed was the "adverse reaction from the Mid-Westward[sic]" and its residents who represented the "average" American from the Heartland.

Though Marshall explained that the "selling of the ERP to the American people was an exacting task" and that he "traveled so widely in this regard that it almost seemed as if I were running for part," past December of 1947, Americans were widely supportive of the programme thank you to public relations undertakings by members of the Assistants and various Congressional committee members.

Former Secretary of State of war Henry Stimson spearheaded the popular Citizens' Committee for the Marshall Program, consisting of nearly 300 well-known Americans from industry, politics, and the military who criss-crossed the nation delivering pro-Marshall Program speeches. The system circulated petitions and financially supported grassroots women's groups who drummed upward support among suburban housewives for European economic recovery, explaining that it was the best way to promote commonwealth and go on America and the world rubber from economic disruption that could lead to another war.

Acheson'south earlier discussion of an economic recovery plan for Europe during the Delta Council meeting was a straw of the blazon of support that would exist required for such a programme. Because of Volition Clayton's Mississippi connections and the representative nature of the Council, Acheson recognized that winning the back up of America's businessmen and farmers by arguing that the plan would heave sales through exports and trade was crucial.

Merely the plan was non without its critics.

Some still clung to the notion that this was an oversized amount of support for unstable nations the United States had just rescued from the clutches of fascism. Others, like quondam Vice President Henry Wallace, argued that the regimes that would exist supported with Marshall Plan funds were rather authoritarian themselves and such a drastic economic action would further polarize the earth.

Yet, thanks to bipartisan support from Congress and cooperation between the Executive and Legislative branches of the authorities (and a niggling political pork to persuade representatives and senators with farmers and industrialists as constituents that this would do good them as well) Congress passed the plan on March 13, 1948, allocating well-nigh $13 billion in foreign aid over a four-yr menses.

Past the time Marshall Plan assistance expired in June of 1952, the program had largely achieved its goals of creating some economic self-sufficiency among the xvi European nations who participated. The US-managed Economic Cooperation Administration (ECA) and the European-run Organisation for European Economical Cooperation (OEEC) oversaw the implementation of the aid allocated under the Marshall Plan.

The OEEC guaranteed that all participating nations upheld their end of the bargain in enacting policies that would boost trade and industrial and agricultural production, while the ECA administered the fiscal aid for nations to purchase nutrient, fuel, and machinery from the United States and also develop and consummate infrastructure programs including highways and railroads. Aid was not always distributed evenly among the nations, and it did not solve all political or economic problems.

Scholars oftentimes suggest that the Marshall Plan only further intensified tensions between the The states and the Soviet Union and likewise point out that five percent of Marshall Programme help went to the newly-formed Central Intelligence Agency to behave intelligence collection abroad. Many historians, however, agree that the Plan was successful in restoring agricultural and industrial production and some level of self-sufficiency in European nations as well as preventing the implementation of damaging austerity measures to annul failing economic conditions.

Rebuilding in Germany, circa 1948

Rebuilding in Frg, circa 1948. The sign on the wall says "Berlin Emergency Program, with Marshall Programme help," courtesy of the National Athenaeum and Records Administration.

From its get-go unveiling in Cleveland, Mississippi to an aggressive program of economic help to bolster Europe, the Marshall Programme signaled a new era of global responsibility for the United States and a new emerging post-state of war order.

Contributor

Stephanie Hinnershitz, PhD

Stephanie Hinnershitz is a historian of twentieth century US history with a focus on the Home Front and civil-war machine relations during World War Two.

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