The Marshall Plan

by Benn Steil

  Stalin, too, liked the Morgenthau Plan, but in contrast to Mrs. Roosevelt found Marshall’s speech far more menacing than Truman’s. As Kennan had anticipated, the initiative took the Soviet leader by surprise. At the time, Stalin had, unlike Marshall, not yet concluded that cooperation—or his version of it—was at an end. To the contrary, while Marshall’s program was taking shape Stalin was still talking optimistically, both to American visitors and the Russian public, about progress on “the German problem.” A May 16 editorial in a hard-line anti-Western journal highlighted “the value of the Moscow conference [in] clear[ing] the way—given good will on all sides—to the necessary, if exacting, work of reconciling the different points of view and arriving at agreed decisions.”98 Stalin would not have disseminated such a message had he thought negotiations over Germany were at an end.

  Stalin further believed that cooperation should be pushed forward more broadly. Talks over Korea, where two years earlier the Americans had taken the Japanese surrender in the south and the Soviets in the north, were making progress. In May, Stalin instructed his delegates to reach an agreement with the Americans over forming an interim government if sufficient representation could be secured for “leftist” South Korean groups.99

  But the Marshall Plan was about to change everything.

  Soviet Foreign Minister Vyacheslav Molotov (center) speaking with French Foreign Minister Georges Bidault (right) through an interpreter, Paris, 1946 or 1947.

  * * *

  FIVE

  * * *

  TRAP

  MOLOTOV PORED OVER THE RUSSIAN translation of Marshall’s speech, underlining phrases suggesting American intent:

  “very serious situation”

  “bodes no good for the world”

  “clear to everyone what effects this could have on the economy of the United States”

  “must do everything within its power so as to assist in the return of normal economic conditions”

  And most importantly:

  “[governments] which seek to perpetuate human misery in order to profit therefrom politically or otherwise will encounter the opposition of the United States”

  He added margin scribbles on the structure of the plan, noting in particular Marshall’s insistence that aid would be limited to supporting a progam Europeans would develop in concert.1

  Molotov was looking for evidence, certain it was there, of impending American economic crisis and imperialist animus. Determined to avoid a trap, he was also alert to the opportunity for setting one. Ambassador Novikov was as well. Five thousand miles away in a hostile foreign capital, however, he was doubtless conscious of the need to demonstrate his fealty to the Kremlin through a muscular display of vigilance. In a cable to Molotov from Washington on June 9, 1947, he asserted that Marshall’s plan contained menacing “outlines of a Western European bloc” that was “directed against us.”2 But that did not mean that Moscow should reject it—to the contrary. He surmised that the State Department did not want Soviet participation: Moscow should therefore participate in order to undermine its aims.

  This was Marshall’s fear. Had Kennan miscalculated, then, in betting that Moscow would recoil from their overture? At this point, it seemed so.

  On June 18, Bevin and Bidault met with Jefferson Caffery, the American ambassador to Paris. They presented him with an advance copy of an invitation they intended to deliver to the Soviet chargé that evening, inviting Molotov to three-way talks in Paris over Marshall’s proposal during the week of June 23. Caffery reported to Marshall that the two had told him, separately, that they hoped the Soviets would “refuse to cooperate.”3

  The Kremlin followed public and private reports on the meetings among the western allies in Paris, combing for signs of duplicity. Molotov’s aides warned him of evidence “to conceal from the Soviet Union the already-reached agreement on a number of issues,” such as the establishment of a new European Economic Commission “related to the implementation of the Marshall Plan.” The Americans were trying to bribe France “toward the Anglo-Saxons,” in particular to force the Soviet Union “to accept serious concessions on the resolution of the German problem.” Furthermore, plans were in place “to represent the USSR as an enemy of the reconstruction and stabilization of Europe” if it rejected the terms of the Plan. Moscow would then be “the party guilty of the division of Europe into two adversarial blocs.” For Paris, this would “justify France’s transition into the camp of the Anglo-Saxons.”4

  Molotov was not about to let the western schemers off easily. “At first I agreed to participate,” he reflected years later, referring not just to the talks but to the Marshall Plan itself. Three days later, the Politburo Central Committee ratified his decision to join the talks. He cabled his acceptance on June 23.

  Molotov also instructed the Soviet ambassadors in Warsaw, Prague, and Belgrade to direct their host governments to “ensure their own participation in the elaboration of the economic measures under consideration and make their own claims.”5 The governments in Warsaw and Prague each responded to Molotov’s cable with enthusiasm, beyond what was required or prudent.6

  The Polish ambassador to Moscow replied immediately, saying his “government is very interested in the current discussion of the aid plan [and] ready to participate in the exchange of opinions on this question.” He emphasized that “the stabilization of Poland is imperative to the conditions of stabilizing Europe.”7 Czechoslovak foreign minister Jan Masaryk, son of the country’s post–World War I founder, unaffiliated with any party in the coalition government, was overjoyed upon learning by radio of Molotov’s decision to attend the conference.8 “Czechoslovakia is ready to cooperate completely,” he cabled, “in the cause of creating the prerequisites for the provision of the American assistance [and] to propose Czech projects at an appropriate time.”9 National Socialist trade minister Hubert Ripka called Molotov’s unexpected move “a good omen.”10 The Yugoslav government affirmed its readiness “to take part in the preliminary negotiations” provided that the initiative “is based on the principles of the United Nations Charter.”11

  Yet Molotov never intended to let them negotiate terms. Suggesting the confrontational stance he would take on behalf of the eastern bloc, the Soviet press termed the American plan “the Marshall Doctrine.” It was, Pravda said, part of Washington’s “campaign against the forces of world democracy and progress.” Its aim was the “quick formation of a notorious western bloc under the unconditional and absolute leadership of American imperialism.”12 It was a “plan for political pressures with dollars and a program for interference in the internal affairs of other states.”13

  On June 24, Molotov gave Stalin a draft of the instructions he intended to deliver to the Soviet delegation in advance of the talks. It suggests he intended to bargain hard over terms, but not to strangle the initiative. Stalin scribbled edits that show the same intent, but a more emollient tone.

  “Before consideration of any concrete proposals related to American aid to Europe,” Molotov wrote, “the Soviet delegation must contest any terms of aid that may lead to infringement upon the sovereignty of European countries or their economic enslavement.” Stalin crossed out the words “their economic enslavement,” writing in the more anodyne “disruption of their economic independence.” The edits suggest he did not want to poison the well prematurely.

  Molotov delimited how far the Soviet delegation could go to reach agreement with the French and British. He insisted that they must block any plan that would “strengthen the pre-war relations between economically separate European countries”—a condition that undermined the American objective of integrating Europe.

  Molotov also outlined terms related to Germany. Its resources, he said, could not be utilized for “stabilization of the European economy” without first reaching agreement on the country’s “economic unity” and its “reparation obligations.” Stalin’s edits suggest a harder line here. Changing “economic unity” to “political and economic
unity,”14 he would have had in mind Marshall’s resistance to a strong German central government—resistance that served to keep the country’s larger and more industrialized western territory under American control. Stalin would not abide a plan that abetted this.

  Also on June 24, Novikov cabled Molotov expressing deeper concerns than he had previously. “[T]he ‘Marshall Plan,’ ” he said, makes it appear “as if the United States has decided to give the European states themselves the initiative in establishing a program of economic reconstruction for Europe.” Its content, however, would be largely dictated by Washington. “It is to this end that [Clayton’s present] talks in London are directed.” Washington’s aim, Novikov explained, was the “subordination of the European countries to American capital and the creation of anti-Soviet groupings.”15

  Stalin’s economic adviser, the Hungarian-born Evgeny Varga,16 also wrote to Molotov, arguing that Marshall’s scheme aimed to forestall America’s “imminent economic crisis, the approach of which no one in the USA denies.” Washington must, “in its own interest,” he explained, “grant much greater credits than it has done heretofore—just to rid itself of surplus goods at home.” Though it “knows in advance that part of those credits will never be repaid,” it hoped thereby to forge a “bloc of bourgeois countries under U.S. domination.”17 Still, Varga, like Novikov, backed Molotov’s participation in Paris, no doubt in part because the Central Committee had already done so.

  Over in London that day, as Novikov had noted, Clayton was meeting with Bevin. The two discussed how American aid could be used to undermine Soviet influence in Europe—even in the East. The Marshall Plan was, Bevin enthused, “the quickest way to break down the iron curtain.” Russia, he wagered, could “not hold its satellites against the attraction of fundamental help toward economic revival in Europe.”18

  ON JUNE 26, MOLOTOV’S PLANE set down on a baking tarmac at paris’ Le Bourget Airport. The city was in the midst of an oppressive heat wave, a mirror-image of the bitter cold that had destroyed millions of acres of winter wheat earlier that year. The size of Molotov’s entourage, eighty-nine-strong, suggested he intended either to engage seriously or to rouse the French Communists if he were disappointed.19 Despite being booted from the French government by a center coalition in May, the Communists had more parliamentary seats than any other party; and with 90 percent of the public saying things were going “badly or rather badly” in France, they were still a political force.20

  Arriving in the early evening at the Quai d’Orsay, home of the French Foreign Ministry since 1853, Molotov wasted little time before probing Bidault for conspiratorial intent. What, he asked, had Paris and London learned from Washington about Marshall’s initiative? “Perhaps the two ministers prepared whatever is required,” Molotov suggested obliquely.

  “[We] did not prepare anything,” Bidault protested. “The English government, of course, has its own proposals, and the French government prepared a bit of something from its side as well.”

  “[Then] the time,” Molotov observed, “was not spent in vain after all.”

  No, Bidault agreed. “The time was, of course, not lost,” he said, mirroring the Russian’s gentle sarcasm, “because Mr. Molotov was invited.”21

  Molotov knew from British ambassador Sir Maurice Peterson in Moscow that Bevin had brought economic experts to Paris to discuss the plan with Bidault over a week ago.22 Bidault’s protestations confirmed for him that he was walking into a stitch-up.

  The official business began the following day, June 27. The three delegations assembled in the elegant but intimate Salon des Perroquets, named for the ancient tapestries on the wall. Exercising his prerogative as host, Bidault rose to deliver the formal opening statement.

  A founding figure of the Christian Democrat MRP party, forty-seven-year-old Georges Bidault was uniquely positioned to navigate France through the delicate shoals of joining an American-led alliance. The Communists to his left would never have crossed Moscow; the Gaullists to his right would never have trusted Washington. De Gaulle himself, Bidault later observed, “never said a word about the Marshall Plan, but accused the Americans of being opportunists, ignoramuses and exploiters.” Whatever “legitimate grudges against the Americans” the French people might harbor, however, nothing, to Bidault’s mind, could “do justice to General Marshall and to the generosity of the American people.”23 He would not let the present opportunity slip.

  Hailing Marshall’s speech for its acuity in identifying “the nature and origins” of Europe’s economic plight, Bidault wasted no time highlighting for Molotov what would be the insurmountable block to Russian cooperation: that to “enlist the interest of the greatest creditor nation of the world,” Europe’s aid request would “have to follow a coherent programme” drawn up in “concert” based on its combined “balance sheet.” To this end, a steering committee of participating governments should be established, he said, with the aim of completing a comprehensive report by the first of September. This was, in Bidault’s rendering, to be no reprisal of wartime Lend-Lease, under which the Soviets simply submitted demands to Washington for expeditious fulfillment.

  Bidault’s tone was confident, his reasoning clear and fluid—until he turned to “the problem of Germany.” It was here that he sounded less like a statesman in control of his brief and more like a spokesman awaiting one. Germany’s reconstruction, he said, “raises precisely all the questions upon which it has so far been impossible to reach an agreement,” such as “the level of German industry, reparations, the regime for the Ruhr, etc. It is true, this presents a difficulty which cannot be denied.” Indeed, Bidault’s own government was in a muddle on these matters. The September report should, he concluded, be “drawn up . . . without prejudice to our decisions as regards the final statute of Germany.”24

  Molotov responded with the official Soviet opening statement the following day, June 28. The contrast to Bidault’s gloss was stark. Concurring only that “reconstruction [and] the subsequent economic development of the countries of Europe” would be “facilitated” if the United States “could provide these countries with the economic assistance which they need,” he framed Marshall’s proposal as an American response to an American problem. “[I]t is to the interest of the United States . . . to make use of the possibilities of their credit to enlarge their foreign markets, especially in view of the approaching crisis”—that being the inevitable and imminent crisis of capitalism. The Soviet government had nonetheless accepted the Franco-British invitation to discuss the proposal, “notwithstanding the fact that the planning which is the basis of the socialist economy of the Soviet Union excludes the danger of the crises and economic troubles which are the theme of the American Minister’s speech.”

  As for the “plan of work drawn up by the French government, and supported by the British government,” however, Molotov’s government had “serious doubts.”

  “It seemed perfectly clear that questions of internal economy were a matter concerning the sovereignty of the peoples themselves.” France had “her own economic plan,” as did Britain. “The Soviet people,” for their part, were at present “engaged in the successful execution of their STALIN Plan, a five-year plan [that] ensures a steady increase in the material and cultural prosperity of the Soviet people.” For “the countries of Europe [to] decide for themselves what American aid they require” was, therefore, all well and good; each country knew its needs and interests. But “attempts made from without to intervene in the economic life of various countries have not had nor can have any positive effects.” Thus “the [present] attempts made to force the Conference to proceed to perfect a general economic programme for the European nations—which would inevitably involve the intervention of certain states—could not serve as a basis for collaboration.”

  Through a strategy of imposing bilateral trade agreements on eastern European countries, Moscow had, since the war, redirected trade patterns in the region toward the Soviet Union. This was i
ntegral to its ambition of creating a permanent security zone between itself and Germany. Anglo-French support for an American plan to reintegrate the eastern economies with those of the West therefore represented a threat to Soviet economic and political control over this zone.

  As for “the problem of Germany,” Molotov continued, it “is a problem quite apart.” The various unresolved questions should not be discussed in Paris, but should remain the exclusive purview of the Council of Foreign Ministers.25

  The floor was now Bevin’s. In spite of Molotov’s disparaging of the French and British plans, which confirmed Bevin’s beliefs about Moscow’s unwillingness to cooperate, he was determined to test the limits of his diplomatic powers before conceding what would be a risky breakdown in Anglo-Soviet relations.

  The son of a farm laborer’s widow, father unknown, the sixty-six-year-old Bevin began life the unlikeliest of prospects to become his country’s chief diplomat. “He murdered the King’s English,” observed Clay, who marveled at witnessing him address George VI as plain “King.”26 Presented once with draft text intended to bear his name, he shook his head no: “It’s just not me,” he said. “You won’t mind if I take it away and de-grammaticize it?”27

  Orphaned at the age of eight, a school dropout at eleven, Bevin toiled in hard manual labor jobs until in 1911, at age thirty, becoming a full-time union officer. He rose steadily through the ranks, working to create what would by the late 1930s become the world’s largest trade union: the Transport and General Workers’ Union. It was his role as general secretary that led Churchill to invite him, in 1940, to become minister of labour in the wartime coalition government. Bevin became one of the Tory prime minister’s most trusted Labour Party figures. He played a vital role in mobilizing British industry and the workforce to supply the mammoth war effort.