History from 1945-Present Discussion week 1

The Marshall Plan, from Sage American History, is available under a Creative Commons Attribution -

THE MARSHALL PLAN

From the Congressional Record: Remarks by the Honorable George C. Marshall, Secretary of State, at

Harvard University on June 5, 1947.

I need not tell you gentlemen that the world situation is very serious. That must be apparent to all

intelligent people. I think one difficulty is that the problem is one of such enormous complexity that the

very mass of facts presented to the public by press and radio make it exceedingly difficult for the man in

the street to reach a clear appraisement of the situation. Furthermore, the people of this country are

distant from the troubled areas of the earth and it is hard for them to comprehend the plight and

consequent reactions of the long- suffering peoples, and the effect of those reactions on their

governments in connection with our efforts to promote peace in the world.

In considering the requirements for the rehabilitation of Europe the physical loss of life, the visible

destruction of cities, factories, mines, and railroads was correctly estimated, but it has become obvious

during recent months that this visible destruction was probably less serious than the dislocation of the

entire fabric of European economy. For the past 10 years conditions have been highly abnormal. The

feverish preparation for war and the more feverish maintenance of the war effort engulfed all aspects of

national economics. Machinery has fallen into disrepair or is entirely obsolete. Under the arbitrary and

destructive Nazi rule, virtually every possible enterprise was geared into the German war machine.

Long- standing commercial ties, private institutions, banks, insurance companies and shipping companies

disappeared, through loss of capital, absorption through nationalization or by simple destruction. In

many countries, confidence in the local currency has been severely shaken. The breakdown of the

business structure of Europe during the war was complete. Recovery has been seriously retarded by the

fact that 2 years after the close of hostilities a peace settlement with Germany and Austria has not been

agreed upon. But even given a more p rompt solution of these difficult problems, the rehabilitation of

the economic structure of Europe quite evidently will require a much longer time and greater effort than

had been foreseen.

There is a phase of this matter which is both interesting and serious. The farmer has always produced

the foodstuffs to exchange with the city dweller for the other necessities of life. This division of labor is

the basis of modern civilization. At the present time it is threatened with breakdown. The town and city

indus tries are not producing adequate goods to exchange with the foodproducing farmer. Raw materials

and fuel are in short supply. Machinery is lacking or worn out. The farmer or the peasant cannot find the

goods for sale which he desires to purchase. So the sale of his farm produce for money which he cannot

use seems to him an unprofitable transaction. He, therefore, has withdrawn many fields from crop

cultivation and is using them for grazing. He feeds more grain to stock and finds for himself and his

family an ample supply of food, however short he may be on clothing and the other ordinary gadgets of

civilization.

0014 Meanwhile people in the cities are short of food and fuel. So the governments are forced to use their

foreign money and credits to procure these necessities abroad. This process exhausts funds which are

urgently needed for reconstruction. Thus a very serious situation is rapidly developing which bodes no

good for the world. The modern system of the division of labor upon which the exchange of products is

based is in danger of breaking down.

The truth of the matter is that Europe's requirements for the next 3 or 4 years of foreign food and other

essential products -principally from America- are so much greater than her present ability to pay that she

must have substantial additional help, or face economic, social, and political deterioration of a very

grave character.

The remedy lies in breaking the vicious circle and restoring the confidence of the European people in the

economic future of their own count ries and of Europe as a whole. The manufacturer and the farmer

throughout wide areas must be able and willing to exchange their products for currencies the continuing

value of which is not open to question.

Aside from the demoralizing effect on the world at large and the possibilities of disturbances arising as a

result of the desperation of the people concerned, the consequences to the economy of the United

States should be apparent to all. It is logical that the United States should do whatever it is able to do to

assist in the return of normal economic health in the world, without which there can be no political

stability and no assured peace. Our policy is directed not against any country or doctrine but against

hunger, poverty, desperation, and chaos. 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.

Such assistance, I am convinced, must not be on a piecemeal basis as various crises develop. Any

assistance that this Government may render in the future should provide a cure rather than a mere

palliative. 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. 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.

It is already evident that, before the United States Government can proceed much further in its efforts

to alleviate the situation and help start the European world on its way to recovery, there must be some

agreement among the countries of Europe as to the requirements of the situation and the part those

countries themselves will take in order to give proper effect to whatever action might be undertaken by

this Government. 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 initiative, I think, must come from Europe. The role of this country should co nsist 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.

0015 An essential part of any successful action on the part of the United States is an understanding on the

part of the people of America of the character of the problem and the remedies to be applied. Political

passion and prejudice should have no part. With foresight, and a willingness on the part of our people to

face up to the vast responsibility which history has clearly placed upon our country, the difficulties I

have outlined can and will be overcome.

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