The Marshall Plan

by Benn Steil

  If the Allies were going to consider Soviet proposals, Acheson concluded, Vyshinsky needed to make “himself clear on the substance of what he wanted” to achieve in Germany. Otherwise “this question of control was an idle discussion.”127 Schuman called it “build[ing a] roof without constructing walls.”

  Acheson had previewed his Paris strategy in his candid May 18 briefing. If the conference was to be “another [Russian] propaganda episode in the Cold War,” he told the reporters, “we too will play that game to the hilt.” He would tolerate four weeks at most. “At that point we will pack up our marbles and come home.”

  The Russians, he said, “called this Conference . . . as a face-saver for the bankruptcy of their policy in Eastern Germany. [But] we have 45 million Germans behind us [who] are not going to let . . . Communist stooges in Eastern Germany dominate them.” The United States would “go ahead with the establishment of a Western German government, come hell or high water. Any unification must be on the basis of the Bonn constitution.”128

  The Allies presented this blueprint to Vyshinsky on May 30. It was audacious to the point of provocation, not so much an offer as a surrender demand. They proposed to extend the Bonn constitution country-wide; terminate reparations; establish economic unity on the basis of one currency, free trade, and dissolution of Soviet corporations; and create a new elected German government under four-power supervisory control with majority rule—no Soviet veto.129

  Acheson braced for Vyshinsky’s explosion. But the Russian stayed calm. He merely chided the Allies for “advance agreement” on a plan which “gave [the] impression of fait accompli.” Though it seemed “hardly [a] suitable document for quadripartite agreement,” he said he would study it.130

  Reading the proposal in Moscow, Stalin, however, was not calm. He was livid. Did Vyshinsky not recognize an insult? Or even a threat? “It looks as if you don’t quite understand,” Stalin cabled him, “that the three powers’ proposal boils down to their intent to merge the eastern zone with the western ones on their own terms. . . . [T]hey want to swallow our zone and to tie us to their chariot in Germany, depriving us . . . of those rights to reparations which we received in Potsdam.” It was, he said, “absolutely unacceptable.”131

  Following the lashing from Stalin, Vyshinsky “uncorked his old form.” In Nitze’s words, he turned “extreme, assertive, and nasty.”132 He denounced the Allied plan as “undemocratic” and a blatant contravention of Potsdam (which was itself, of course, undemocratic). He called the Bonn constitution a “secret” document “dictated by the West and designed to dismember rather than unite Germany.” Majority rule in the Allied Control Council was, he said, itself “dictatorial.” The Soviet Union “would never subordinate itself to the rule of the majority.”133 As for reparations, the Allies had no grounds for conflating it with the issue of economic unity. And the proposal to dismantle Soviet companies merely aimed at imposing “American and British monopolistic capitalism” and to “take over all of German industry.” This imperialism, he said, was the essence of the Marshall Plan.134

  Sitting restless hour after hour, day after day, in the “musical comedy setting” of the Hôtel Talleyrand-Périgord’s Palais de Marbre Rose, Acheson felt himself driven “to the limits of human endurance” by Vyshinsky’s “dialectics.” Bevin, for his part, took a more relaxed approach, often napping through them.135

  In the three weeks that followed, no progress was made on German unity. Only cosmetic wording on future cooperation could be agreed. Intense debate over Austria, however, which was divided into occupation zones like Germany, led to a deal through which the Soviets traded away reparations claims, as well as support for Yugoslav territorial and financial claims, for a lump-sum Austrian payment of $150 million ($1.52 billion in today’s money). Remaining details on a peace treaty were to be worked out by deputies, with the aim of reaching agreement by September 1.136 (It would not come until 1955.137) On the most pressing issue, four-power decision making in Berlin, discussions deadlocked.

  The Russians persisted in their demands for veto power in the city, saying it was needed to counteract “hostility to the Soviet Union on the part of the Berlin authorities”138—a striking admission that the locals despised them. Moscow’s stance, Acheson said, “boiled down to a statement that ‘the four powers can do what they like in Berlin so long as it is what the USSR wants.’ ”139 But the Allies preferred no deal to a new Soviet veto.

  Meanwhile, arguments over remaining trade blockages were heated. To keep control over Allied movements in eastern Germany, the Soviets refused entry of western-zone train engineers and crews, demanding a switch at the border to their own trains and crews. They continued to block highway crossings, impose documentation requirements, ban western-licensed publications, and prohibit exports from Berlin. To Allied protests, the Soviets retorted that more tonnage was now entering West Berlin than before the blockade. East Berlin, in contrast, was “receiving nothing but a trickle,” which proved that the Allies “had not really lifted restrictions.”140

  A U.S. intelligence report said that the Soviet blockade “was being raised largely because of bottle-necks in the Eastern zone economy.” The Soviets needed the Allied restrictions lifted. But once their problems were overcome, they would reimpose the blockade, “provided Berlin has not entirely fallen by the autumn.”141 Murphy, a member of the delegation in Paris, revived Clay’s proposal for an armed convoy to challenge any new Soviet obstruction.142 Acheson wanted to treat a new Berlin crisis as “close to [an] act of war.”143 Truman said he would, in the event of a new blockade, back “every possible means of action that would be costly to the Russians.”144

  To Acheson’s surprised satisfaction, however, Vyshinsky accepted his proposal of a simple “modus vivendi” on Berlin—a broad agreement just to restore elements of east-west trade and not to reimpose blockages.145 The clincher came at a private dinner talk in which Acheson suggested that “if the goods coming from the West into East Germany went beyond the Eastern Zone, that was not a matter which need cause us any difficulty.”146 If the Soviets stole goods bound for East Germany, Washington would look the other way.

  Murphy and Jessup decried a lack of specifics on western access rights in the city, but Acheson argued that efforts to define them might be worse than futile. If the United States put specific rights in a draft, and then later agreed to their removal, the Soviets would interpret this agreement as renunciation.147 In any case, given that the blockade had obliterated the rail access the ACC had defined back in 1945, whether such rights were in writing meant little in practice.148 The Soviets never saw hard constraints in mere words. A dozen years later, Stalin’s successor would divide Berlin with a wall, triggering a crisis that would again bring the two sides to the brink of war.149

  AT 7:30 P.M. ON JUNE 20, hours after the meetings had concluded, Acheson was giving a press conference when Bohlen slipped him a note. Vyshinsky wanted to recall the conference communiqué and reconvene. Acheson was astonished.150

  Bevin, who had already fortified himself with Scotch, met Acheson in the elevator back at the Quai d’Orsay.

  “Do you know ‘The Red Flag’?” the inexplicably jolly Englishman asked, referring to the old Labour Party anthem.

  No, a bemused Acheson said, he didn’t.

  “Well, you know ‘Maryland, My Maryland’?”

  “Yes, I know that absolutely,” Acheson said. “It is my native song now.”

  “Well, it’s the same tune!” Bevin said. “So when we get out of the lift, you sing ‘Maryland, My Maryland,’ and I’ll sing ‘The Red Flag.’ ” Acheson agreed.

  The two exited the elevator, arms around each other. They marched down the hall singing, past a startled French diplomatic corps. As they entered the meeting room, the union man bellowed “raise the scarlet standard high!” And the lawyer: “burst the tyrant’s chain!”

  Vyshinsky stared, dumbfounded.

  “Me and my pal,” Bevin explained, “is singin
g the same tune!”151

  No response. “Vyshinsky was in trouble,” Acheson surmised.

  Schuman adviser Alexandre Parodi took the secretary aside. Gromyko, he said, had just savaged Vyshinsky over the phone for his blunders in the agreement on Austria. Called him “a stupid fool” and worse, according to French officials bugging the call.

  When the ministers meeting got under way, Vyshinsky explained that the communiqué had to be amended. He needed words affirming the right of Soviet-owned Austrian properties to export profits or other income. He wasn’t sure what that meant, though he could get “answers from Moscow.”

  Vyshinsky “was floundering badly,” Acheson observed. After responding archly that this was “the shortest-lived agreement the Soviets had made yet,” the American played for time, knowing Bevin would soon have to depart for his train to Calais. When the tipsy foreign secretary rose and made his apologies, Acheson gestured resignedly. Nothing more could be done now, he said to Vyshinsky. “The communiqué has to stand.”152 Thus did the four-power conference, the sixth and final, end in farce.

  ACHESON RETURNED TO WASHINGTON ON the “independence,” the president’s aircraft, to be greeted by a buoyant Truman himself. Both saw the conference as a triumph. The State Department, Acheson recorded, had shown it “could outwork any of them and [knew its] stuff better.” And Acheson had not just commanded the effort, as was General Marshall’s way; he had been in the trenches, monitoring enemy movements and devising tactical options before directing the assault. This was his department now, and he would inspire loyalty as a different type of leader.

  Soviet acceptance of the modus vivendi, Acheson argued, was Stalin’s “tacit abandonment” of the position that the Allies had lost their rights in Berlin. There was no need of a larger agreement. The West could now go its own way. The Soviets had “wanted [a] firm grip on East Germany and [a] free opening in [the] West,” but “our path in Germany must be pursued.”153 Congress and the press embraced this narrative.

  On his departure from Berlin, following the ending of the blockade, General Clay was saluted by eleven thousand U.S. soldiers and dozens of military aircraft—the largest military review the Army ever staged in Germany. Hailed in The Philadelphia Inquirer as the “hero of the American resistance to Soviet siege and pressure,” and The New York Times as “the man who dared to face the showdown and who guided it through to its successful conclusion,” he returned home to be honored by the president and Congress and paraded in New York. Declining solicitations to take command of the Japanese occupation from General MacArthur or run for political office, Clay retired from the Army. On his death three decades later, in 1978, he would be buried in the cadet cemetery at West Point. At the foot of his grave, a marble stone from Berlin would be placed, inscribed with the words

  WIR DANKEN

  DEM BEWAHRER

  UNSERER FREITHEIT

  We thank the defender of our freedom154

  On June 5, 1949, the second anniversary of Marshall’s Harvard speech, Truman, accompanied by a bevy of West European dignitaries, feted George Marshall as “one of the greatest Americans of all time.” Paul Hoffman called him a “military genius” who “knew that freedom could not be maintained by bullets alone.” It was, he said, “through the Marshall Plan” that the general “will live forever in the hearts of free men.”

  “We are winning the ‘cold war’ through ECA and the North Atlantic Pact,” Arthur Vandenberg said. “In my opinion, if it were not for these policies, Soviet Communism would today be in the substantial control of Europe and this would pose the greatest threat to our own national security in the lifetime of the republic.”155 In 1953, Marshall would, in recognition of his efforts to promote European recovery, and in spite of East-West conflict spilling into the Asia-Pacific, receive the Nobel Peace Prize.156

  ON AUGUST 14, 1949, IN a historic event Stalin had been determined to prevent, Adenauer’s CDU/CSU center-right coalition narrowly outpolled Schumacher’s SPD in West Germany’s first popular election. Well short of a majority in the new Bundestag, Adenauer refused to accept a grand coalition, thinking it dangerous for both democracy and capitalism in the fledgling state. Determined not to concede the economics ministry to a Socialist, he negotiated a coalition with the free market FDP (Free Democratic Party) and the small agrarian DP (Germany Party). A month later, on September 15, he was elected federal chancellor by the barest majority of 202 to 200 in the Bundestag, naming free marketeer Ludwig Erhard minister of economic affairs and the FDP’s Franz Blücher minister for matters of the Marshall Plan. The new seventy-three-year-old leader said his doctor had declared him fit to govern “for at least a year, perhaps for two.”157 He would serve for fourteen years.

  Still legally subservient to the supreme authority of the western occupying powers, Adenauer and his top ministers were summoned to receive the “Occupation Statute” from the American, British, and French high commissioners on September 21. Spotlighting their preeminence, the three made their way onto a red carpet. They directed the chancellor-elect to remain just beyond it until André François-Poncet, the French chairman, had proclaimed the statute’s entry into force. Adenauer, who considered the ceremony a “disagreeable” rite of passage for his new government, made a show of displeasure by stepping onto the forbidden surface before the proclamation’s reading. Pained smiles greeted the act of defiance, a sign that the chancellor would assert his country’s democratic legitimacy.158

  Yet the three need not have worried. Adenauer was committed to Franco-German rapprochement and cementing the Federal Republic of Germany’s place in the emerging western alliance. His vision for West Germany was consistent with that embodied in the Marshall Plan, which the country joined through the OEEC. But this conformity also provoked Schumacher to denounce Adenauer as “the chancellor of the Allies.”159

  While McCloy, the new American high commissioner, worried about Adenauer’s “age and dictatorial tendencies,” he also feared Schumacher’s “sensitivity and excitability.”160 Acheson tried to reassure Schumacher, and to contain his nationalist impulse, by stressing that prospects for Germany were vastly better than what they were after World War I. This fact owed to “the new attitude of the U.S.A. to help Europe politically and financially” and “the great change in French sentiment and the willingness of France to cooperate with Germany.”161 The Soviet government, for its part, heaped scorn on the new “marionette ‘state.’ ” It had been formed in violation of Potsdam to act as an “obedient tool of the Western occupation powers for the realization of their aggressive plans in Europe.”162

  Though the 330-member SED-dominated Volksrat (People’s Council) in the Soviet zone had adopted its own constitution a year prior, Stalin refrained from authorizing an East German state as long as he could. He hoped the blockade would stop the Allies from dividing the country. That aim now thwarted, the Volksrat proclaimed the birth of the German Democratic Republic (GDR) on October 7, creating a Volkskammer (People’s Chamber) and Länderkammer (Chamber of the States) to substitute for democracy by choosing the government’s leaders. On October 11, the two chambers unanimously elected longtime Communist stalwart Wilhelm Pieck to the GDR presidency. The following day, former Social Democrat Otto Grotewohl became prime minister after he, together with his proposed cabinet and policy statement, received unanimous votes of confidence from the Volkskammer.

  True power, however, continued to be held by Grotewohl’s deputy, Walter Ulbricht. Ulbricht followed Stalin’s model, seizing power over the state through the party and not the government. Lacking charm or oratory skills, he was content to control the SED apparatus. In 1946 he had let Pieck and Grotewohl risk their necks in elections, wisely avoiding their public disgrace. Only one opinion, Ulbricht knew, counted: Stalin’s. Married to Zhukov’s former secretary and speaking fluent Russian, Ulbricht would have three audiences with the vozhd in Moscow in 1949–50 before the SED elected him to the post created for him: secretary general.163 Beyond political
domination of East Germany through Ulbricht, Moscow retained legal and economic control through the corporations it had created and the GDR’s National Manifesto commitment to discharging reparations claims. Another year would pass before the country would hold its first communist-style public elections, when the SED-controlled National Front list would garner 99.7 percent of the vote.

  Following Pieck’s and Grotewohl’s elections, Stalin sent a letter of congratulations, adding that the German and Soviet peoples together possessed “the greatest potential in Europe for the accomplishment of great acts of world significance.” It was further evidence, the U.S. chargé in Moscow, Wally Barbour, cabled Acheson, of the “Kremlin’s undeviating view that Germany is key to [the] control and Bolshevization of Europe.” The Allied High Commission pronounced the GDR “devoid of any legal basis.”164

  New arenas of confrontation between the Soviet Union and the United States would soon open up around the globe. Stalin had broken the U.S. nuclear monopoly with a test blast on August 29, 1949, three years sooner than most American experts had expected. Future conflicts now threatened to destroy the planet. Yet the world, George Orwell wrote with dark optimism, was probably not headed for imminent annihilation, but rather “an epoch as horribly stable as the slave empires of antiquity.” The atomic bomb, he said, had rendered the two hegemons “at once unconquerable and in a permanent state of ‘cold war’ with their neighbours.”165 Indeed, the boundaries of the conflict in Europe were now set. They would remain so for forty years.

  Stalin and Truman play chess over Germany.

  * * *

  THIRTEEN

  * * *

  SUCCESS?

  ACCORDING TO LEGEND, THE ELEVENTH-CENTURY Islamic poet Muhammad ibn Ammar successfully defended the Kingdom of Seville against the formidable Christian King Alfonso VI of León and Castile. He did so not on the battlefield, but in a game of chess. Whether or not historical fact, the story foreshadows the advent of modern diplomacy, or the idea that nonviolent competition might determine the control of territory and resources.