Question in The Great Debate
all the world’s nations, only the United States
emerged from the war in a strong economic position,
and thus the responsibility to end the suffering of
its allies - and even of its former enemy - fell to
the U.S. Two years after Germany’s defeat, the
devastation of World War II was still exacting its
toll throughout Europe. Factories that had been bombed
or shuttered were still closed down. Raw materials
were unavailable. There seemed to be no way out of
the economic swamp left by the war.
June 5, 1947, Secretary of State George Catlett Marshall,
speaking at Harvard University, proposed an economic
stimulus plan for Europe that was unprecedented in
its scope and intent. Known officially as the European
Economic Recovery Program, but immediately called the
"Marshall Plan,” the United States was offering Europe
$13 billion - an almost unimaginable sum in 1947 -
to reconstruct its economy and feed and house its people.
policy is directed not against any country or doctrine
but against hunger, poverty, desperation, and chaos,” Marshall
said. "Its purpose should be the revival of a
working economy in the world so as to permit the emergence
of political and social conditions in which free institutions
Marshall invited all European countries to participate
in the new rebuilding program, the Soviet Union almost
immediately reacted angrily to the idea, rejecting
economic assistance as no more than an American plot
to undermine European independence.
plan actually had many authors. Besides Marshall, its
main architects were Under Secretary of State Dean
Acheson, and President Truman himself. As developed,
the plan had three main purposes:
aid in the financial recovery of western Europe (including
Germany), all of whose economies were reeling;
• to ensure a demand for American goods overseas;
•to prevent the expansion of pro-Soviet governments in Europe.
both a public official and a private citizen, Alger
Hiss frequently took anti-Soviet positions. In 1939,
in response to the Nazi Soviet Pact - in which Germany
and Russia pledged not to invade each other - Hiss
argued for immediate assistance to Britain and France
so they could prepare for war against Hitler. Later,
at the Yalta Conference, Hiss opposed a 1945 Soviet
scheme to give themselves two extra votes in the United
Nations (President Roosevelt overruled him). Alger
Hiss, who had left the State Department in early 1947,
quickly became a leading proponent of the Marshall
Plan to rebuild Europe. Hiss was enthusiastic about
the plan’s broad humanitarian purposes – and
this once again brought him into direct conflict with
1947, the Marshall Plan faced not only Soviet bitterness
and suspicion but also strong opposition in Congress.
Members of Congress were not inclined to back major
spending bills, especially at a time when isolationist
feeling was on the rise.
Truman lobbied hard for Congressional support. In the
last week of November 1947, an article appeared in The
New York Times Magazine, setting out the administration’s
arguments. The plan’s potential, as the article
stressed, included putting Europe on a firm anti-communist
footing. The article’s author was Alger Hiss,
by then president of the Carnegie Endowment for International
article was introduced as a defense exhibit at Hiss’s
perjury trial to give the jury some insight into Hiss’s
political outlook (Whittaker Chambers had testified
that Hiss might still be a communist). It was placed
in evidence during the direct examination of Clark
M. Eichelberger, a former colleague of Hiss’s
in the State Department, who was then working for the
United Nations. Eichelberger testified that he, former
Secretaries of War Robert Patterson and Henry L. Stimson,
and Hiss had formed the Committee to Aid the Marshall
Plan to garner popular support for the bill. Hiss’s
article was subsequently distributed by the committee.
congressional debate in November, the bill was approved
by Congress in the spring of 1948. Over the next four
years, the Marshall Plan proved a resounding success,
providing vital funds for Europe’s recovery and
reaffirming the continent’s economic and political
ties to the United States. In 1953, Marshall was awarded
the Nobel Peace Prize. In awarding the prize, the Nobel
Committee said, “The organs which have grown
from the Marshall Aid have, more than anything else
in these difficult years, contributed to what Nobel
termed ‘the idea of a general peace in Europe’ and
to a realistic materialization of the idea Nobel in
his testament called brotherhood among nations.”
spirit of the Marshall Plan lives on: cooperation among
the 16 countries that received Marshall Plan aid led
first to the European Common Market, which was set
up in the 1950s, and, decades later, to today’s
European Union, a unique partnership which now unites
New York Times Magazine, November 16, 1947
great debate over the Marshall Plan is about to begin
- a debate comparable in importance and intensity with
the discussions of the neutrality and lend-lease issues.
It will take place in the Congress which convenes tomorrow
and it will echo to all corners of the country.
plan - officially called the European Recovery Program
- merits all the consideration it will receive. It
involves great issues and the expenditure of billions
of dollars to purchase the economic and political health
of Europe, on which depends world well-being and hence
our own peace and prosperity.
evidence of general support for the basic ideas behind
the program, there are substantial sectors of the nation
in which deep doubts exist. Many questions are being
asked and with increasing insistence. Of the questions
raised these five are the fundamental ones:
Won't American aid to Europe be pouring money down
a rat hole?
Isn't Europe's trouble simply that Europeans don't
want to work?
Can we afford to give more billions to Europe without
wrecking our economy?
Can't we get along without Europe anyway?
Why should we support Socialist governments?
and fiscal experts will ask many other questions. How
many dollars will be needed to provide food and fuel
for Europe this winter? How many for the materials
required over a longer period for the restoration of
European economy? How much wheat, steel, coal and fertilizer
can the United States spare without jeopardizing its
economic stability? What controls can be devised to
insure that the funds made available will not bring
inflation here and will not be wasted abroad? How rigid
shall be our supervision?
must seek answers to such questions before a practicable
program of aid can be worked out. But large sections
of the general public demand simple answers to the
five simple questions cited above. These are not concerned
with the details of effective help but with underlying
uncertainties as to whether any aid should be given.
What follows is an attempt to answer these questions.
American aid to Europe be pouring money down a rat
who ask this question either assume that Europe is
finished economically and beyond repair or that European
governments will waste whatever aid is given them.
Those who make the first assumption point to the economic
havoc done to Europe by two world wars. They conclude
that this damage is irreparable, even with the vast
resources at the command of the United States.
these questioners ignore the resources of Europe and
the strides toward recovery already made.
sixteen European countries included in the Marshall
Plan, together with western Germany, contain 270 million
of the world's most highly industrialized and industrious
people. Before World War II these people had, despite
the losses of World War I, achieved a standard of living
comparable with our own. Their international trade
in 1938 accounted for almost half of the world's total
trade: they had over 60 per cent of the world's shipping
we assume that all the world outside our borders is
beyond hope of future economic health, surely Europe
Is not incapable of revival.
Europe has already demonstrated its capacity to recover.
In spite of war fatigue, restricted rations and unparalleled
devastation, the countries of western Europe
have made a better record of regained production than
they did in the first two years after the first World
War. Pre-war production in Europe after World War I
was not reached far six years. Today, production in
France, Belgium and the Netherlands has climbed to
approximately 90 per cent of 1938 levels. Scandinavian
production is above the 1938 level; so is British,
except for certain critical items, such as coal.
who speak of "chronic European waste" point
to the billions we have made available in recent years
for relief and reconstruction - through UNRRA, American
Military Government in occupied areas, the British
loan, the International Bank, the Export-Import Bank,
lend-lease settlements and disposal of surplus property,
and direct appropriations. If this aid has not averted
crisis, the argument runs, it must have been wasted.
those who believe Europe is finished, these critics
overlook the really substantial recovery in Europe.
This recovery is strong proof that our aid has been
put to effective use. These critics likewise overlook
the extent of Europe's devastation. And they disregard
her wartime increase of 24,000,000 in population, her
unforeseeable blizzards and droughts.
factor is also overlooked - that recent rises in our
own prices have greatly reduced the value of our past
aid to Europe. Our loan to Britain is a case in point.
By last summer its value had been reduced by nearly
40 per cent.
terms of Europe's demonstrated needs in recent years,
our aid to date has been inadequate rather than excessive.
there is no reason to assume the impossibility of
contriving reasonable and adequate safeguards to insure
proper use of future relief funds. It is our responsibility
to devise such safeguards. This problem will undoubtedly
receive the most careful scrutiny of a Congress not
distinguished for improvidence. Aid to Europe in our
own interest need not be palsied by the fear of European
Europe's trouble simply that the Europeans don't
want to work?
its extreme form this question reveals a provincial
outlook. It appeals to isolationist sentiments of scorn
for the "furriner." It is buttressed by the
opinion of many observers that aspects of the social
legislation of many European countries - the five day
week, costly public housing schemes, generous health
benefit systems - represent luxuries which impede recovery.
Or in other words, that Europeans should forego some
of the benefits of their social laws and work longer and harder.
is apparent that European labor could produce more
if more efficient machinery and work habits were adopted.
Europeans should be enabled to work better. But this
is a far cry from saying that the European economic
crisis is the result of laziness. It is, indeed, apparent
that the war left Europe with inadequate industrial
capacity - even assuming maximum labor efficiency -
to supply essential goods and materials needed for
was not unwillingness to work which produced last winter's
blizzards, estimated to have cost England alone $800,000,000,
or which caused two successive crop failures in western
Europe. It is not laziness that has made France's current
grain harvest the smallest since Napoleon's time. The
rate of recovery compared to World War I is evidence
that there has been no serious slackening of effort.
eventual recovery, of course, depends fundamentally
upon European self-help. Yet, that self-help is impossible
unless there is access to non-European sources for
food and fuel to replace losses caused by natural disaster
and unless there are forthcoming certain materials
for reconstruction which only the United States can
we afford to give away billions to Europe without
wrecking our economy?
is the most plausible of the questions. Our vast outpouring
of national resources to stem Nazi and Japanese aggression
severely strained our economy. Our burden of debt and
consequently of taxation, the depletion of our minerals
and soil fertility, the deferment of needed plant renovation,
our unbalanced price structure, all testify to this.
But what are our resources for if not for utilization?
And what effective utilization can we foresee in a
world in which economic chaos is the rule beyond our
test is not so much whether we can afford further strains
upon our economy but whether we can from a long-range
view afford not to give aid required to prevent a world
situation that would seriously impair our own well-being.
in terms of Europe's requests and of our resources,
it is apparent that the question, when stated broadly,
is an unreal one. Our national income is currently
at a level of over $200 billions a year, the highest
In our history. Our exports of goods and services in
the first half of this year were at the rate of over
$20.5 billions. The American people spend $8.75 billions
annually for alcoholic beverages, about $3.5
billions for tobacco, about $1.68 billions for theatre
and movie tickets, about $1.5 billions for jewelry
and watches and one billion dollars or more for cosmetics.
Our standard of living is the highest we have ever
that the need for Marshall Plan dollars will range
between $15 and $20 billions, this would mean an average
of something like $4 billions a year for four years.
Amounts well in excess of the average would, of course,
be needed in the first year, with considerably less
than the average needed in the fourth year. This is
not aid of a magnitude to raise the specter of a wrecked
United States economy. No net increase in our total
exports, no great part of our product is required.
real issue of what we can and cannot afford involves
a few articles in great demand in Europe and in short
supply here - wheat, coal, steel, fertilizer, for example.
The basic problem is to find ways and means of protecting
our price structure against continued demand for these
may be asked: Aren't dollars merely a hunting license
for scarce commodities? Will not the dollar needs for
such commodities continually mount as prices rise so
that the cost of aid abroad and inflation at home will
engage in a disastrous race?
are very real questions. But they are manageable questions.
They relate to details of the Marshall Plan, to techniques
of aid to Europe, to measures for preventing additional
inflationary pressures. They do not raise the issue
of the feasibility of any assistance at all.
questions have been the subject of exhaustive study
by the Krug Norse and Harriman committees and by Congressional
groups which recently visited Europe. They can safely
be left to Congress.
we get along without Europe anyway?
get along without Europe would in an economic sense
come close to getting along without the rest of the
world. In the first place, the 21 per cent of our imports
which in 1938 came from the sixteen Marshall-Plan countries
include many manufactured articles we could not easily
do without. More important, although Europe is not
the source of many of our essential raw-material imports,
its colonies are. Their exports to us would be disrupted
in the event of a collapse of the mother countries.
the non-colonial areas of South America, Africa and
Asia have always carried on a large part of their foreign
trade with Europe. The Continent has taken large quantities
of those of their primary products for which we have
little need - or, in the case of raw materials important
to us, of which even our large purchases represent
only part of their total production. Thus, the collapse
of Europe, which our "getting along without" would
entail, would have grave repercussions in these non-European
areas and impair the flow of the rest of our raw-material
the export side, getting along without Europe would
mean pretty much getting along without exports. In
the period 1921-1925, about 22 per cent of our exports
went to the United Kingdom; approximately 20 per cent
to Germany, France and Italy. The world-wide depression
of the Nineteen Thirties reduced our exports to Europe,
but from 1936 to 1938 the United Kingdom, still our
leading customer, took 17 per cent. And the Marshall
Plan countries together took 35 per cent of our total
exports in 1938.
economic dislocation of Europe would also cut heavily
our exports to non-European countries, whose ability
to buy our products would be sharply reduced by the
inability to acquire dollar exchange from the sale
of commodities to Europe. It need hardly be said that
an area normally responsible for more than half the
world's trade could not be eliminated without a major
disruption in world economy - a disruption from which
we would suffer.
1925 to 1937, more than half our cotton crop, 38 per
cent of our refined copper, 35 per cent of our leaf
tobacco, 31 per cent of our typewriters, 28 per cent
of our crude sulphur, 24 per cent of our airplanes
and airplane parts, 21 per cent of our lard, nearly
20 per cent of our agricultural implements and machinery,
plus great quantities of automobiles, industrial machinery,
wheat, rice, fruit and other products were sold abroad.
Today, with our greatly expanded productive capacity,
loss of export markets would have still greater impact
on our economy than occurred when the vast surpluses
and idle plants of the early Nineteen Thirties produced
the political point of view, getting along without
Europe would mean the jettisoning of our firmest
and potentially strongest allies. It would mean abandoning
the Continent from which we drew our ideals of freedom
and democracy, and the disappearance of a cultural
center that enriches the world.
our abandonment of Europe would expose 270 million
people and the world's second greatest industrial complex
to absorption in the vast area already dominated by
Communist ideology and by Soviet interests.
should we support Socialist European governments?
is the least rational and therefore the most elusive
of the basic questions, yet it is one to which answers
readily suggest themselves.
because it is to our interest to assist the present
governments of western Europe whether or not they are
socialistic; second, because our traditional policy
is that it is none of our business what form of government
other peoples may freely choose for themselves.
these ready answers, it is important that erroneous
assumptions implicit in the question should be pointed
out. No country of western Europe is at present fully
socialistic or even 50 per cent socialistic in its
control of economic life. Moreover, our aid is quite
as likely to reduce as to accelerate developments which
have evoked certain measures of a socialistic nature.
who express doubt about the wisdom of aiding Socialist
governments most frequently cite England as their prime
example. They forget the stark necessity, recognized
by Conservatives as well as by Laborites, for governmental
control of an economic nature. Were the Conservatives
to come into power in England tomorrow, they would
not denationalize the coal mines, which could not operate
without government subsidy. Nor would they abandon
rationing or export controls. Britain's economic stringency
compels a rigid conservation and allocation of assets.
extensive controls in England are far from constituting
full socialism. Coal and electric power are the only
nationalized industries in England - apart from communication
and transportation services which for long have been
traditional areas for nationalization by European governments
not remotely socialistic in outlook.
recent municipal election victory of the Conservatives
shows how little the English people relish controls,
even though dictated by necessity. There is little
evidence of popular appetite for doctrinaire application
of Socialist theory.
the answer to this fifth question lies in the fact
that the freely chosen governments of western Europe
are the governments with which we must deal if we are
to prevent economic chaos. We have no alternative.
want to make Europe self-sustaining as promptly as
possible. We want our aid to be limited in amount and
terminable in time, not a draft against us of indefinite
duration and hence of indefinite size. Clearly there
can be no stability for Europe unless the European
peoples cooperate fully In the recovery effort. This
can best be encouraged if European statesmen and business
and financial leaders are relied upon to carry out
details of activities financed by us and thus maintain
the confidence of their countrymen.
management practice and common sense as to the best
means of accomplishing our objectives call for leaving
operational methods in the hands of those who in the
long run will necessarIly be responsible for results.
Back-seat driving is neither good business nor acceptable
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