Little Bits of History

Marshall Plan

Posted in History by patriciahysell on April 3, 2014
Harry S Truman signing the Marshall Plan

Harry S Truman signing the Marshall Plan

April 3, 1948: President Harry S Truman signs the Marshall Plan. Officially known at the European Recovery Program or ERP, it was a bid to help Europe recover from the devastation caused by World War II. The hope was to help rebuild Europe and stop or hinder the spread of Soviet Communism.  The plan was developed at a meeting of affected European states which took place in June 1947. Aid was also offered to the Soviet Union and her allies, but it would have given control to the US over their economies and so it was declined. The plan was in operation for four years.

Looking at the obstacles encountered as post-war Europe struggled to recover, the ERP focused funding on problematic areas. The US contributed $15 billion (~ $258 billion in today’s money) to help with reconstruction. This was on top of the $15 billion spent between the end of the war and the beginning of the plan’s implementation. The goal was to lead Europe into the future and not just to deal with the destruction caused by the war. Efforts were put into modernizing European business and industrial practices using high-efficiency American models. There was also a removal or reduction of artificial trade barriers and  the hope for instilling a sense of self-reliance.

The myriad bombing runs of World War II had devastated many large cities and their industrial facilities. Trade flow had been severely impacted by both the war effort and the altered political climate of the war years. Food shortages were particularly severe after an extraordinarily harsh winter in 1946-47. The transportation infrastructure was left in a shambles as railways, bridges, and docks had been major air strike targets. Even though many small towns and villages had not been impacted by the fighting itself, they were left isolated by the no longer passable roads. The only nations with very limited infrastructure damage due to the war were Australia, Canada, South Africa, and the US.

Because accepting American aid also meant the US had some control over the monies being spent, the Soviets were not willing to accept the terms. Soviet Foreign Minister Vyacheslav Molotov wanted to take a punitive stance against Germany and the US was willing to help rebuild. This ideological difference led to further complications. Stalin was open to the offer and went into talks until he heard the terms included conditions of economic cooperation and would include Germany. At that point he did his best to kill the Plan. His next worry was that it would help solidify a split between East and West Europe and that the Eastern Bloc countries would have to be made to reject the offer of help. He did manage to keep countries under his influence to deny the offer of aid.

The modern system of the division of labor upon which the exchange of products is based is in danger of breaking down. . . .

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 to the world, without which there can be no political stability and no assured peace. Our policy is not directed against any country, but against hunger, poverty, desperation and chaos.

Any government that is willing to assist in recovery will find full co-operation on the part of the USA. 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. – speech from Secretary of State George Marshall

Also on this day: A new boxing record set – In 1936, a new record for shortest fight.
Cunard Line – In 1929, the shipping company announced a new ship to be built.
Speedy Snail Mail – In 1860, The Pony Express began service.
 Old Smokey – In 1936, Bruno Hauptmann was executed.

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