by Tony Judt
One ground for initial optimism was the widely held view that Stalin had no interest in provoking confrontation and war. As General Eisenhower himself put it to President Truman and his Joint Chiefs of Staff in June 1946, ‘I don’t believe the Reds want a war. What can they gain now by armed conflict? They’ve gained just about all they can assimilate.’ In a limited sense Eisenhower was correct: Stalin was not about to go to war with the USA (although the reasonable conclusion to be drawn, that the Soviet Union thus had an interest in cooperating fully with its erstwhile ally, did not in fact follow). And in that case the US, which had a monopoly of atomic weapons, risked little by keeping communications open with the Soviet Union and seeking mutually compatible solutions to common problems.
Another element in US policy in the initial post-war period were the new international institutions that the Americans had helped bring about and whose success they sincerely desired. Of these the United Nations, whose Charter was ratified on October 24th 1945 and whose General Assembly first met in January 1946, is obviously the best known; but it was the financial and economic agencies and agreements associated with ‘Bretton Woods’ which perhaps mattered more to policymakers at the time.
The economic meltdown of the inter-war years seemed to Americans especially to be the root source of the European (and world) crisis. Unless currencies were convertible and nations stood to benefit mutually from increased trade, there was nothing to prevent a return to the bad days of September 1931, when the post-World War One monetary system fell apart. Led by Maynard Keynes—the moving spirit behind the July 1944 meeting at the Bretton Woods conference center in New Hampshire—economists and statesmen sought an alternative to the international financial system of pre-war days: something less rigid and deflationary than the gold standard, but more reliable and mutually sustaining than a floating-rate currency regime. Whatever this new regime was to be, it would need, Keynes argued, something resembling an international bank, functioning rather like the central bank of a domestic economy, to administer it: to maintain the fixed exchange rate while at the same time encouraging and facilitating foreign exchange transactions.
That, in essence, is what was agreed at Bretton Woods. An International Monetary Fund was set up (with US cash) ‘to facilitate the expansion and balanced growth of international trade’ (Article I). The initial Executive Board, modeled on the UN Security Council, had representatives from the US, UK, France, China and the USSR. An International Trading Organisation was proposed, which would eventually take shape in 1947 as the General Agreement on Trade and Tariffs (later the World Trade Organisation). Members agreed to tariff and other concessions for contracting partners, as well as codes for trade practices and procedures for handling breaches and disputes. All of this was in itself a dramatic break from earlier ‘mercantilist’ approaches to trade and was intended, in due course, to inaugurate a new age of open commerce.
Implicit in the Bretton Woods goals and institutions, which also included a new ‘World Bank’, was an unprecedented degree of external interference in national practices. Moreover currencies were to become convertible, a necessary condition for sustained and predictable international commerce, on the basis of their relationship to the US dollar. In practice this proved problematic: both Britain and France resisted convertibility, the British because of their protected ‘sterling area’23 and the weakness of their post-war economy, the French through a longstanding obsession with a ‘strong franc’ and their wish to preserve multiple exchange rates for different sectors and products, the neo-Colbertian heritage of a bygone era. Full convertibility took over a decade to achieve, with the franc and the pound finally joining the Bretton Woods system in 1958 and 1959 respectively (they would be followed by the Deutschmark in May 1959 and the Italian lira in January 1960).
Thus the post-war Bretton Woods system did not come about all at once. The participants at Bretton Woods had anticipated universal international convertibility by the end of the 1940s, but their calculations did not allow for the political and economic consequences of the coming of the Cold War (or, indeed, of the Marshall Plan). Put differently, the high ideals of those setting out plans and institutions for a better international system presumed a stable era of international cooperation from which all would gain. The Soviet Union was originally integral to the financial system proposed at Bretton Woods—it was to be the third-largest contributor to the International Monetary Fund quota. It was perhaps naïve for the Americans (and some British) to imagine that these proposals would be acceptable to Russian—or indeed French—policy-makers; in any case, they got around this impediment by the simple expedient of drawing up their plans without consulting the Russians or the French or anyone else.
Nevertheless, they sincerely expected that the mutual benefits to be had from an increase in international commerce and financial stability would eventually overcome national traditions and political mistrust. So when the Soviet Union abruptly announced, at the beginning of 1946, that it would not be joining the Bretton Woods institutions, the United States Treasury Department was genuinely bewildered; and it was to explain the thinking that lay behind Stalin’s move that George Kennan sent from Moscow, on the night of February 22nd 1946, his famous Long Telegram, the first significant move in America’s acknowledgement of the coming confrontation.
Putting the matter thus has the effect of depicting the makers of US foreign policy, Kennan aside, as remarkably innocent. And so, perhaps, they were, and not only those like Senator Estes Kefauver or Walter Lippmann, who simply refused to believe what they were told about Soviet actions in eastern Europe and elsewhere. At least through mid-1946, many US leaders spoke and acted as though they truly believedin the continuation of their wartime partnership with Stalin. Even Lucretius Patrascanu, a senior figure in the Romanian Communist leadership (and later victim of a show trial in his own country), was moved to comment, at the time of the Paris Peace Treaty negotiations in the summer of 1946, that ‘[t]he Americans are crazy. They are giving even more to the Russians than [they] are asking and expecting. ’ 24
But there was more to American policy than innocence. The United States in 1945 and for some time to come seriously expected to extricate itself from Europe as soon as possible, and was thus understandably keen to put in place a workable settlement that would not require American presence or supervision. This aspect of American post-war thinking is not well remembered or understood today, but it was uppermost in American calculations at the time—as Roosevelt had explained at Yalta, the US did not expect to remain in occupation of Germany (and thus in Europe) more than two years at most.
There was strong pressure on Truman to fulfill this undertaking. The abrupt ending of Lend-Lease was part of a general cutting back of economic and military commitments to Europe. The American defense budget was reduced by five-sixths between 1945 and 1947. At the end of the war in Europe the US had 97 combat-ready ground divisions in place; by mid-1947 there were just twelve divisions, most of them under strength and engaged in administrative tasks. The rest had gone home and been demobilized. This met the expectations of American voters, only 7 percent of whom in October 1945 placed foreign problems ahead of domestic concerns; but it played havoc with America’s European allies, who began seriously to fear a reprise of inter-war isolationism. They were only half-mistaken; as the British knew, in the event of a Soviet invasion of western Europe after 1945 American strategy consisted of an immediate retreat to peripheral bases in Britain, Spain and the Middle East.
But even as they were reducing their military commitment to Europe, American diplomats were being taken through a steep learning curve. The same Secretary Byrnes who had initially placed his faith in wartime accords and Soviet goodwill gave a speech at Stuttgart, on September 6th 1946, in which he sought to reassure his German audience: ‘As long as an occupation force is required in Germany, the Army of the United States will be a part of that occupation force.’ It was hardly a ringing commitment to European defense but, prom
pted perhaps by a letter from Truman in June (‘I’m tired of babying the Russians’), it reflected growing US frustration at the difficulty of working with the Soviet Union.
The Germans were not the only people who needed reassuring—the British especially were anxious at the Americans’ apparent desire to escape their European encumbrance. Britain was not universally loved in Washington. In a speech on April 12th 1946, Vice-President Henry Wallace reminded his audience that ‘aside from our common language and common literary tradition, we have no more in common with Imperialistic England than with Communist Russia’. Wallace, of course, was notoriously ‘soft’ on Communism, but his distaste for American involvement with Britain and Europe was widely shared across the political spectrum. When Winston Churchill gave his famous ‘iron curtain’ speech in Fulton, Missouri, in March 1946, the Wall Street Journal acidly commented: ‘The country’s reaction to Mr Churchill’s Fulton speech must be convincing proof that the US wants no alliance, or anything that resembles an alliance, with any other nation.’
Churchill above all would not have been surprised, either by Wallace or the editorialist of the Wall Street Journal. As early as 1943 he had taken the full measure of Roosevelt’s desire to see the liquidation of the British Empire—indeed, there were times when Roosevelt seemed at least as concerned with reducing post-war Britain as with containing Soviet Russia. If it is possible to speak of a coherent US strategy spanning the years 1944-47 it would be this: reach a continental European settlement with Stalin; pressure Britain to abandon its overseas empire and embrace open trade and sterling convertibility; and withdraw from Europe with all due speed. Of these, only the second objective was achieved—the third falling victim to the impossibility of the first.
The British perspective was quite different. A Cabinet sub-committee in 1944 listed four areas of primary concern to be borne in mind when dealing with the Soviet Union: i) Middle-Eastern oil; ii) the Mediterranean basin; iii) ‘vital sea communications’; iv) the maintenance and protection of British industrial strength. None of these, it might be noted, directly concerned Europe proper—except the second point, which explains British engagement in Greece. There was no mention of eastern Europe. If British leaders were wary in their dealings with Stalin it was not from any anxiety over his plans in central Europe but rather in anticipation of future Soviet moves in Central Asia and the Near East.
This made sense in the light of Britain’s continuing priorities—in East Asia, India, Africa and the Caribbean. But those selfsame Imperial illusions (as some, and not only in Washington, were already calling them) made British strategists much more realistic than their American allies when it came to Europe. From London’s point of view, the war had been fought to defeat Germany, and if the price for this was a Soviet imperium in eastern Europe, then that was how things would be. The British continued to see European affairs in terms of a balance of power: in the words of Sir William Strang, of the Foreign Office, ‘[i]t is better that Russia should dominate eastern Europe than that Germany should dominate western Europe’.
Strang was writing in 1943. By 1945, when the extent of Russian domination was becoming clear, British leaders were less optimistic than their American counterparts. Following the Russian-engineered coup in Bucharest in February 1945, and subsequent heavy-handed Soviet pressure in both Romania and Bulgaria, it was obvious that the local price of Soviet hegemony was going to be high. But the British harboured no fond hopes for improvement in the region—as Foreign Secretary Ernest Bevin put it to his US counterpart Byrnes: ‘In these countries we must be prepared to exchange one set of crooks for another.’
The real British fear in Europe was not that the USSR might control eastern Europe—by late 1944 that was a fait accompli—but that it might draw a prostrate, resentful Germany into its orbit as well and thus establish mastery over the whole continent. To prevent this, as the British Chiefs of Staff concluded in the autumn of 1944, it would probably be necessary to divide Germany and then occupy the western part. In that case, as a confidential British Treasury Paper of March 1945 concluded, one answer to the German problem might be to forget about an all-German resolution and instead incorporate such a western German Zone fully into the western European economy. As General Alan Brooke, Chief of the Imperial General Staff, had confided to his diary on July 27th 1944, ‘Germany is no longer the dominating power in Europe. Russia is . . . She . . . cannot fail to become the main threat in fifteen years from now. Therefore, foster Germany, gradually bring her up and bring her into a Federation of Western Europe. Unfortunately, all this must be done under the cloak of a holy alliance of Russia, England and America.’
This, of course, is more or less what happened four years later. Of all the Allied powers it was Britain which came closest to anticipating and even seeking the settlement that finally emerged. But the British were in no position to impose such an outcome, nor indeed to impose very much at all, on their own. By the end of the war it was obvious that London was no match for Washington and Moscow. Britain had exhausted itself in the epic struggle with Germany and could not much longer sustain even the outer trappings of a great power. Between Victory-in-Europe Day in 1945 and the spring of 1947 British forces were reduced from a peak of 5.5 million men and women under arms to just 1.1 million. In the autumn of 1947 the country was even forced to cancel naval manoeuvres in order to save fuel oil. In the words of the American Ambassador William Clayton, a far from unsympathetic observer, ‘the British are hanging in by their eyelashes to the hope that somehow or other with our help they will be able to preserve the British Empire and their leadership of it.’
In these circumstances the British were understandably concerned not that the Russians would attack—British policy was predicated on the assumption that Soviet aggression might take any form except war—but that the Americans would retreat. A minority within the governing British Labour Party would have been happy to see them go, placing their post-war faith instead in a neutrally-inclined European defense alliance. But Prime Minister Clement Attlee had no such delusions and explained why, in a letter to his Labour Party colleague Fenner Brockway:
‘Some [in the Labour Party] thought we ought to concentrate all our efforts on building up a Third Force in Europe. Very nice, no doubt. But there wasn’t either a spiritual or a material basis for it at that time. What remained of Europe wasn’t strong enough to stand up to Russia by itself. You had to have a world force because you were up against a world force . . . Without the stopping power of the Americans, the Russians might easily have tried sweeping right forward. I don’t know whether they would, but it wasn’t a possibility you could just ignore.’
But could the Americans be counted on? British diplomats had not forgotten the 1937 Neutrality Act. And of course they understood very well the American ambivalence about overseas engagement, for it was not so different from their own stance in earlier days. From the mid-eighteenth century through to the dispatch of the British Expeditionary Force to France in 1914, the English had preferred to fight by proxy, maintaining no standing army, avoiding protracted continental engagements and keeping no permanent force on European soil. In the past, a maritime power seeking to fight a European war with someone else’s soldiers could look to the Spanish, the Dutch, the Swiss, the Swedes, the Prussians and of course the Russians for allies. But times had changed.
Hence the British decision, in January 1947, to go ahead with their own atomic weapons programme. The significance of that choice lay in the future, however. In the circumstances of the initial post-war years Britain’s best hope lay in encouraging continued American engagement in Europe (which meant publicly espousing the American faith in a negotiated settlement) while collaborating with the Soviets in so far as this was still realistic. So long as the fear of German revanchism took precedence over anything else, this policy could just about be sustained.
By early 1947, however, it was clearly crumbling. Whether or not the Soviet Union constituted a real and present danger
was unclear (as late as December 1947 even Bevin though Russia less of a threat than a future, resurgent Germany). But what was painfully clear was that the limbo in Germany, where the country’s economy was held hostage to unresolved political discussions and the British were footing enormous bills in their zone of occupation, could not long continue. The German economy needed to be revived, with or without Soviet agreement. It was the British—who had fought two long wars against Germany from beginning to end and had been brought low by their hard-won victories—who were thus most keen to close that chapter, establish some modus vivendi in continental affairs and move on.
In better times the British would have retreated to their Isles, much as they suspected the Americans of wanting to retreat to their continent, and left the security of western Europe to its traditional guardians, the French. As recently as 1938 this had been the basis of British strategic calculation: that France, the strongest military power on the continent, could be relied on as a counterweight not just to German ambitions in central Europe but even against future Soviet threats further east. This image of France as a—the—European Great Power was shaken at Munich, but outside the chancelleries of Eastern Europe it was not yet broken. The seismic shock that ran through Europe in May and June 1940, when the great French army collapsed and fell apart before the Panzer onslaught across the Meuse and through Picardy, was thus all the greater for being so unexpected.
In six traumatic weeks, the cardinal reference points of European inter-state relations changed forever. France ceased to be not just a Great Power but even a power, and despite De Gaulle’s best efforts in later decades it has never been one since. For the shattering defeat of June 1940 was followed by four years of humiliating, demeaning, subservient occupation, with Marshall Pétain’s Vichy regime playing Uriah Heep to Germany’s Bill Sikes. Whatever they said in public, French leaders and policymakers could not but know what had happened to their country. As one internal French policy paper put it, a week after the Liberation of Paris in 1944: ‘If France should have to submit to a third assault during the next generation, it is to be feared that . . . it will succumb forever.’
