The Marshall Plan

by Benn Steil

  Contrary to Kennan, and the State Department broadly, Clay held Paris and not Moscow primarily responsible for the breakdown in four-power cooperation over Germany. He considered Kennan dogmatic and dangerous in his writings on Stalin’s government. The two disparaged each other’s intellectual temperament, accusing the other of holding ignorant misapprehensions about the nature of the Soviet government. Clay thought Kennan remote and highbrow, dismissing him as “all theory.” The latter recalled a meeting between the two in Berlin, in the spring of 1946, in which he was “upbraided by the general over what he considered to be our anti-Soviet views” at the State Department.72 For his part, Kennan thought Clay blinkered and naive to Stalin’s agenda, chiding him for having been suckered by “Zhukov’s personality.”73

  Perhaps, but Clay was not dogmatic or ideological in his desire to find a modus operandi with Moscow. He was no Russophile, and insisted on dealing with Stalin from a position of strength. “I don’t think we would have had a Cold War if we’d kept a strong army in Europe in 1945,” he would reflect decades later.74 His prime concern was always restoring the German economy, and he was willing to pursue it with or without Soviet cooperation.75

  Clay’s initial influence on Marshall’s European recovery ideas was modest. Marshall would unveil them without even mentioning a role for Germany. As for Clay himself, Marshall saw him not as part of his team but as a commander suffering from “localitis”—an affliction blinding him to the world beyond his own theater of responsibility.76 Clay saw the problem through the other end of the scope: State was, in his words, “interested in Germany’s relations with other countries [and] not in Germany itself.”77

  But it was also true that to wean Europe off American aid and dollar dependence there was no alternative but to reconstitute Germany’s industrial capacity. Before the war, nearly 60 percent of all German imports came from, and 75 percent of all German exports went to, other European countries. “[U]ntil there is a revival of Western Germany’s capacity to produce and consume at reasonable levels,” a later joint U.S.-U.K. military governors report would argue, “there is little chance of restoring the Western European standard of living to pre-war levels.”78

  Clay’s contribution to a European recovery program would lay in pushing a revivified Germany from its periphery into its core. He accomplished this through dogged persistence over time, chipping away at State’s inclination to keep the French calm even when it meant keeping Germany down.

  MARSHALL ASSEMBLED HIS ADVISERS—ACHESON, CLAYTON, Kennan, Bohlen, and Ben Cohen—on May 27 to review the PPS work. The general, breviloquent and somber, opened the discussion by stating that the administration would not “sit back and do nothing” while Europe faltered.79 Now, what should they do? He stayed silent while each of them had his say.

  Clayton painted a grim portrait of a continent in collapse. Bohlen talked of the need to begin laying the ground for West European economic federation. As for Russia, he said, Kennan had it right. The proposal needed to embrace the whole of Europe, not divide it. Division would be Stalin’s job.

  “Are we safe,” Marshall put back to them, “in addressing this to all of Europe? What if Russia reacts affirmatively and decides to come in?”80

  This question was the heart of the matter for him. “Many people in Europe were very timid about opposing the Soviet Union,” he reflected years later, “and I feared that if we started our plan by throwing the Soviets out it would scare these people and perhaps keep some of the European countries out of the program.”81 Appearing to pick a fight with Moscow would have been a particular problem for France and Italy, where Communist parties were strong and a constant threat to the stability of their weak governments.

  Kennan was keenly aware of the risk that the Soviet Union might “accept” the administration’s plan. The Russians, after all, had cooperated on Bretton Woods for years, but merely as leverage to extract cheap U.S. credits. Stalin only stiff-armed the accords right at the ratification deadline, at the end of 1945, when it was clear that nothing—despite the energetic efforts of Harry Dexter White, his influential source and advocate at Treasury—was forthcoming. Soviet cooperation with an American plan for Europe, Kennan knew, would signal only their interest in the dollars and intelligence-gathering opportunities it might afford, allowing them at the same time to work to undermine the recovery the plan was meant to germinate. Such a scenario assumed, of course, that Congress would even allow an aid scheme to go forward that the Soviets could steer and profit from. But courting Moscow’s embrace was, to Kennan, a necessary, calculated risk.

  Even assuming that the communist movement could be beaten back in western Europe, as Kennan was convinced it would, the reality would still be grim—an East-West economic and political rupture. The only question would then be whether the winds of popular judgment would waft blame toward Washington or Moscow. Kennan was determined that it be Moscow. This objective required that the administration, in his words, “play it straight,” or at least appear to. It had to force Stalin to react.

  Stalin could not opt in without giving up his reparations claims on Germany and opening the country’s financial accounts to foreign scrutiny, both of which seemed unlikely. Still, “if Russia accepted, we should welcome it,” Kennan told Marshall. The United States could then treat Russia not as a beneficiary, but as prospective donor—a supplier of free food and raw materials to western Europe. Stalin would then walk away.

  Stalin could not, however, decline an American aid offer without either loosening his grip on eastern Europe, much of which would embrace the plan, or tightening it by denying its new governments the right to choose. The latter option would come at the cost of revealing his true aims before the world: not to liberate the territories he occupied, but to subjugate and exploit them. “We [would] put Russia over the barrel,” Kennan said. “Either it must decline or else enter into an arrangement that would mean an ending of the Iron Curtain.”82

  Marshall, who made decisions firmly but deliberately, refused to be drawn further at that point. Conscious that any proposal for funding a massive aid program faced the prospect of a devastating congressional defeat, he warned the men against any leaks before excusing them.

  THE NEXT AFTERNOON, MAY 28, Carl Humelsine, director of State’s Executive Secretariat, brought Marshall a stack of papers to sign and reminded him of open issues on which he needed to decide. One was whether he still wished to attend commencement ceremonies at Harvard on June 5. He had turned down invitations to take an honorary degree the past two years, but this year had provisionally agreed. Now Marshall hesitated, reckoning he would have to speechify for his honor. What about that speech on aid to Europe they had been kicking around?, Humelsine suggested.

  Marshall summoned Acheson on May 29: was Harvard the right forum at which to say something on Europe? No, Acheson said: commencement speeches usually get poor news coverage; the speech “might fall flat”—a curious reaction from a man who had just given the speech of his life at a Mississippi teachers college.

  Marshall agreed the address might not make the front pages. But that would not be a bad thing. Let the ideas germinate. The timing was good, the venue was right. He ordered his acceptance cabled to Harvard.

  He wrote to Colonel Carter the next day asking him to have draft text prepared. “It is of tremendous importance that our people understand the situation in Europe,” he explained, “particularly the dominant character of economic factors.” It should emphasize that this was “an extremely critical period through which we are passing,” and that “irritation and passion should have no part” in the policy response. It should be broad but concise: the whole “talk” should be “less than ten minute[s].”83

  Marshall made no mention of Russia. Carter, however, had been on his plane back from Moscow, and knew that the meetings with Molotov and Stalin were impelling his boss. He asked Marshall’s trusted translator, Bohlen, to take the lead in drafting the text.

  Bohlen lacked Kennan
’s skills as a strategic thinker. Yet despite being a wealthy blueblood, who took the name “Chipper” (later Chip) from his fellows in Harvard’s Porcellian Club, he was easygoing and bonded with people naturally.84 His direct language suited Marshall’s style. Closeting himself for two days, he condensed and sharpened Kennan’s and Clayton’s ideas, adapting them as best he could to his master’s voice. The draft then went to Clayton and Acheson for edits before going to the secretary early the following week.85

  Marshall recounts also directing Kennan to draft something independently. The two texts were, in the end, “quite apart,” he judged, and he “cut out” segments of one and the other and blended them with his own thoughts.86 Marshall wrote and rewrote even as he flew to Boston on June 4.

  Truman was aware of the department’s efforts to craft a European aid plan but would, remarkably, not see so much as a draft before the text was made public later that day. Marshall would years hence call this an oversight on his part.87 In any case, Truman kept some distance from the beginning. “Anything going up [to Capitol Hill] bearing my name will quiver a couple of times, turn belly up and die,” he told Clark Clifford, who wanted to call it the Truman Plan. “I’ve decided to give the whole thing to General Marshall. The worst Republican on the Hill can vote for it if we name it after the General.”88

  Given the deliberate lack of fanfare surrounding the speech, pursuant to Marshall’s orders, the American press took little notice of the text. But since Marshall was going to invite Europe to take the initiative, Acheson made sure that the British press would.

  As he had done before his Mississippi speech, Acheson met Miall, Muggeridge, and MacColl for lunch shortly before the speech. The three British correspondents had by this time virtually assumed the status of the under secretary’s foreign press office. Accounts of the timing and content of their discussions differ. Miall said he and his colleagues had invited Acheson on June 2, with the latter never mentioning Marshall’s speech. Jones said that Acheson had invited them on June 4, and had specifically told them of Marshall’s speech. Acheson said he talked about the speech on June 5. What is clear, however, is that Acheson told them Marshall was inviting Europe to present Washington with a compelling, cooperative request for aid. He asked the men to telephone or cable Marshall’s text to London and to make sure it got into Bevin’s hands without delay: “it will not matter what hour of the night it is; wake Ernie up.”89

  ON THE MORNING OF THE Commencement Exercises, June 5, Miall phoned his editor at the BBC in London, Tony Wigan, telling him that the text of Marshall’s imminent speech was “extremely important.” Wigan suggested they could broadcast it, but Miall argued against—“his voice is so poor.” Miall said he would read the words himself; he was afraid Britons would miss the message if the transmission were left to Marshall.

  Indeed, the Harvard audience of fifteen thousand hearing Marshall that afternoon, delivering the speech in his characteristic unemotional, clipped, bright-voweled voice, must have been at least as conscious of the limitations of the orator as they were of the importance of the oration.90 Acheson called the speech “short, simple, and altogether brilliant,”91 but only the first two would have been apparent to most listeners.

  Setting reading glasses on his nose, Marshall began with the undirected observation that “the world situation is very serious.” But “the problem,” he said, “is one of such enormous complexity that the very mass of facts presented to the public . . . make it exceedingly difficult for the man in the street to reach a clear appraisement of the situation.” Furthermore, being remote from the troubled areas, “it is hard for [Americans] to comprehend the plight and consequent reactions of the long-suffering peoples, and the effect of those reactions on their governments.”

  This served as Marshall’s jumping-off point for introducing Clayton’s thoughts on why the vast “visible destruction of factories, mines, and railroads,” as terrible as it was, was so much less serious than what was not visible: “the dislocation of the entire fabric of the European economy.”

  “Long-standing commercial ties, private institutions, banks, insurance companies and shipping companies,” Marshall said, had “disappeared, through loss of capital, absorption through nationalization or by simple destruction.” People were losing confidence in their national currencies. In consequence, “the division of labor [which] is the basis of modern civilization . . . is threatened with breakdown.” Fields are being withdrawn from cultivation, creating shortages of food in towns and cities. Governments, in consequence, are being forced to spend their scarce foreign money on vital necessities from abroad, exhausting funds “urgently needed for reconstruction.” Europe’s needs “for the next three or four years” vastly exceed her ability to pay, and without “substantial additional help” she faces “economic, social, and political deterioration of a very grave character.

  “The remedy,” Marshall said, “lies in breaking the vicious circle and restoring the confidence” (a more prosaic rendering of Kennan’s “spiritual vigor”) “of the European people in the economic future of their own countries and of Europe as a whole.” Here, Marshall was adumbrating Clayton’s idea that revival would require not just national recovery but advances toward “European economic federation.” Given the obvious “consequences to the economy of the United States” of the failure to break this circle, Marshall said, again channeling Clayton, it was only “logical that the United States should do whatever it is able to do to assist” in this crisis.

  Then, in a now famous line whose inspiration was Kennan’s but whose dramatic rendering was Bohlen’s, Marshall stated: “Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos.” The phrase had been crafted so as to mark the Soviets, if they rejected the plan, as “partisans of hunger, poverty, and chaos.”92 Marshall continued: “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 can exist.” That is, the policy was not directed against the only country it could have been directed against, the Soviet Union, but toward the advancement internationally of the “free institutions” which that country opposed as a matter of ideology.

  Then, in Marshall’s first statement to elicit a reaction from the assembled, he said:

  Any government that is willing to assist in the task of recovery will find full cooperation, I am sure, on the part of the United States Government. Any government which maneuvers to block the recovery of other countries cannot expect help from us.

  Vigorous applause drowned Marshall out, forcing him to restart his subsequent sentence:

  Furthermore [applause] . . . Furthermore, governments, political parties or groups which seek to perpetuate human misery in order to profit therefrom politically or otherwise will encounter the opposition of the United States.

  Again, applause.

  Marshall’s audience had not been moved to respond to his rendering of the varieties or causes of Europe’s suffering. Nor had they been so moved by his calls for American action to ameliorate it. But they had been stirred by his allusions to Soviet obstructionism.

  Marshall’s final statements of substance were those bringing forth the admonitions of both Kennan and Clayton, highlighted for the British journalists by Acheson, that the initiative must now come from “the countries of Europe” acting in concert:

  It would be neither fitting nor efficacious for this Government to undertake to draw up unilaterally a program designed to place Europe on its feet economically. This is the business of the Europeans. . . . 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, if not all European nations.

  At this point, Marshall had only the haziest of templates for what a successful program should look like. He would describe it shortly after his
speech only as being “somewhat along [the] lines [of the] Monnet Plan but on [a] much larger scale”93 In ad-libbed words, he ended by emphasizing his belief that “the whole world of the future hangs on a proper judgment” as to what “must be done” by the United States to bring about Europe’s recovery, concluding only that the judgment had to be rendered without “passion,” “prejudice,” or “the emotion of the moment.”

  The speech was more understated than Truman’s had been, and certainly less bellicose. The American press, now conditioned to the “give ’em hell, Harry” approach to serious initiatives, hardly took notice. The next day’s flaccid New York Times headline on the speech said it all: “Marshall Pleads for European Unity.” (The full text of Marshall’s speech is provided in Appendix B.)

  Over in London, though, the speech had scored a bull’s-eye on Acheson’s target. Bevin, who had listened to Miall’s reading on the BBC, said it was “like a lifeline to a sinking man. It seemed to bring hope where there was none.” He cabled the State Department to inform them he was “taking the initiative” and heading off to Paris to get Bidault on board.94 “I may do Bevin an injustice,” Marshall later commented, “but I had the impression at the time that part of his initiative stemmed from an ambition to be the European leader for the plan.” As for Bidault, he was “certain this accounts for most of [his] contributions.”95

  Bidault insisted that the French and British governments engage the Soviets on Marshall’s initiative. He and Socialist prime minister Paul Ramadier were anxious not to afford the French Communists opportunity to claim they were American stooges, stoking conflict with Moscow. Like Kennan, though, he was determined not to let Moscow delay or obstruct progress.96 Stalin would have to choose between partnership or isolation.

  Eleanor Roosevelt, the most influential and accomplished first lady in American history, had been disappointed with Truman’s speech in March. But Marshall’s speech elated her. This was the right way, she believed, to confront Soviet expansionism without a war of ideologies.97 Having been a passionate supporter of the Morgenthau Plan for pastoralizing Germany, she did not yet grasp how at odds Morgenthau and Marshall would soon be. No doubt Marshall—given the widespread revulsion toward Germany—was not anxious to highlight this.