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2 December 2020

From the NS archive: Marshall Plan report

31 January 1948: Why should the US give Europe its dollars?

By Richard Strout

After the end of the Second World War, the Marshall Plan was enacted and $15bn flowed from the US to Europe to help the continent rebuild. In early 1948, however, the outcome was far from certain and Richard Strout wrote for the magazine about the challenges the Plan faced in its passage through Congress. Much of America wanted to return to the pre-war state of affairs and a degree of isolation. “Great masses of the public have no real conception of Europe’s plight, or America’s concern with it,” Strout wrote, “and they do not see the reason for the Marshall Plan. ‘Why should we give Europe our dollars?’ they ask, with simple suspicion, from Medicine Hat to Aroostook County, ‘What will they give us in exchange?’”  Those arguing for the Plan knew that America could not retreat from being a global player and, though it might not like its role as “global Croesus”, it nevertheless had to embrace it.


It is still too early to say what Congress will do on the Marshall Plan. There are a number of hopeful signs, and some evidences of a crystallisation of support among hitherto doubtful Republican elements. At the same time a new and evident crisis is appearing in the progress of the United States from former isolationism to the new ground of international responsibility.

Nobody can doubt that, when the war ended, Americans wanted to relax, shrug off global burdens and get back to the old, happy peacetime basis as fast as possible. Economic controls were thrown overboard with a rapidity which now, at long last, is almost universally agreed to have been too abrupt. Simultaneously another process was going on: Americans were cheerfully scrapping mental responsibilities. This development wasn’t visible, but it was there, just the same. It was the same great retreat from foreign cares that came after the First World War. Now it is evident that here, too, the happy release was unrealistic: America can’t break away from the power vacuum in Europe or from its new, uncomfortable role of global Croesus.

Americans thought that European recovery would be much faster than it was, and they cherished the illusion that Russia would cooperate. Well, a good deal of water has run under the bridge. Since hostilities ended a great change has come in the United States. Much that she has been doing in international affairs has been done, perhaps, for the wrong reasons. But of the change there can be no question. No other nation in history has ever come so far, so fast. The woes of the postwar world are coming to be understood, shipments of goods and relief are increasing, and a vague realisation is evident of the connection between American economic conditions and world affairs.

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There are, however, vast hinterlands in the United States where this change is not yet pronounced. That statement is made advisedly. My colleagues are the peripetetic political correspondents who cover Washington and move back and forth over America – a continent that takes three days and two nights to cross by train – and their report is still almost unanimous, and depressing. Great masses of the public have no real conception of Europe’s plight, or America’s concern with it, and they do not see the reason for the Marshall Plan. “Why should we give Europe our dollars?” they ask, with simple suspicion, from Medicine Hat to Aroostook County, “What will they give us in exchange?” It is no use to criticise the attitude. As General Marshall used to say in the war, it does little good to “fight the problem”.

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[see also: From the NS archive: Reconstructing Britain]

There it is, and Congressional developments hinge largely upon it. Sooner or later the question will certainly arise whether the changed attitude among leaders in Washington and in the Eastern seaboard will win out, or the mood of reluctance in many other parts of the country.

It is important to emphasise the transitional nature of America’s thinking in presenting the story of the Marshall Plan debate. So far, in Congress, it is still in the preliminary committee stage, and hearings are being held simultaneously in both Houses. Secretary Marshall was the first witness. He spoke with simple dignity and sincerity. It was a Hollywood spectacle of motion picture cameras, television sets, radios and flood lights, all focused on one towering personality, with prestige second to none in Congress. The publicity was valuable in carrying his message out over America. Perhaps he brought most to the programme by fixing his sights so high. Nothing like it in history has ever been proposed.

Mr Marshall, unfortunately, also brought into the opulent, marble-walled Senate caucus room a rather tactless “all-or-nothing” declaration that sounded like an ultimatum, and brought immediate irritated response from some Senators. Mr Marshall is a massive, direct person who, his friends feel, has one fault – a too great trust in the efficacy of logic and a belief in the efficacy of proving that two-plus-two equals four, a theory that the world is as rational as he is. It is not a completely wise assumption in dealing with Congressmen. Perhaps it was a second-day irritation that resulted in a rather hard “going over” at the next session for Ambassador Douglas, who used the college lecturer approach, with statistical charts and pointer.

The most effective witness to date has been John Foster Dulles, US delegate to the United Nations and Foreign Affairs adviser to Governor Dewey and Senator Vandenberg. Mr Dulles is a quiet, steady talker, and it was evident that his unequivocal support of the programme was having an effect on Republican Senators, who hold its fate in their hands. Mr Dulles’s emphasis was on the support which the Plan might give to cooperative action among European nations and to their financial and economic integration. Those who are suspicious of American goals might note the Dulles testimony and the constantly repeated thought of European unity. A phrase Americans can understand is “United States of Europe”, and the concept which it holds is frequently discussed. I have not attended a Congressional meeting yet in which the Benelux Customs agreement was not mentioned, or the possibility of some further European economic step of similar nature hopefully discussed. There is an unexpected moral fervour roused by this thought of helping to produce European unity and its genuineness cannot be doubted. In fact, every evidence of a willingness of European nations to cooperate at this time helps the passage of ERP [European Recovery Programme].

The Marshall Plan is under sharp attack now from two quarters – the perfectionist school of Henry Wallace, who calls the proposal insufficiently internationalist, and the quasi-isolationist school of Senator Taft, who denounces it for going too far in the opposite direction. The second group is far the more dangerous. Mr Taft, in interviews and speeches, is telling the country that Europe’s plight is really not so desperate, that there is no need to hurry aid, and that the size of the appropriation is too vast, and should be slashed by one-third. Taft’s attitude may bring a Republican Party split, with Vandenberg taking the other side. More likely some compromise will be worked out. In the meantime, Taft is himself under attack from “middle roaders” for advocating “watered-down ERP”, which sounds like a very repulsive mess indeed.

[see also: From the NS archive: The challenge to Prohibition]

The lack of enthusiasm over the country as a whole is now the major factor in the whole affair. The Marshall programme may be an effort to “enslave” a prostrate Europe, as communists and some liberals charge, but few campaigns of aggrandisement have ever started with such dragging feet. The so-called “reactionaries” in Congress are just the ones who are most opposed to any plan at all. The danger to the project, it must still be maintained, comes not from imperialism but from American apathy and indifference.

This situation raises a real temptation for the State Department. That is, to try to stampede Congress and the public by a scare technique, such as was used in putting over the Greek-Turkish aid programme. Realistically, this is probably the most effective short-run propaganda there is, however dangerous in its final results. There is plenty of substance, too, in the picture of America’s possible isolation, if the economy of Western Europe collapses, and Moscow moves in. Administration officials have stressed this point to some degree, and have painted a picture of increased expenditures on armaments and even conscription. A great speaker like Roosevelt could have sold the programme, perhaps, simply on its constructive aspects, but Truman is one of the poorest speakers ever to sit in the White House – to the world’s loss.

One more point must be bluntly stated: the proposed Plan involves real discomfort and sacrifices for Americans, and I know of no Senator or Representative – for or against, who doesn’t feel this to be true. Voters are increasingly disturbed by spiralling prices and taxes, and Congressmen who vote on the Plan are entering an election where they will have to justify an Act that will almost certainly make scarce goods scarcer, and tax reduction more difficult. Under these circumstances, does the Marshall Plan run a chance of success? The answer is, I believe, “Yes,” though the result is still in doubt. America wants peace and security, and will pay a big price for them. There are plenty of other motives mixed in, from simple idealism to hatred of Russia, and nobody can strike an exact balance. But if this appraisal is correct, the real driving force is a national yearning for a peaceable, stable world – a world in which all the little Main Streets can get on with their particular American dream of lots of cars, high schools, and television sets, no universal military training, and nice long foreign vacation trips, from Anne Hathaway’s cottage to the delightful sense of the proximity of sin, in wicked Paris. Under such complex circumstances, it is my impression that ERP is gaining strength. The big struggle will come not in the Senate but in the House of Representatives, and the climax is still probably a couple of months off.

Meanwhile, the Marshall Plan debate is having a profound educational value in itself. Administration leaders are taking the lead in trying to show Congress and America that it is impossible to coerce Europe; only the other day Mr Marshall issued a categorical denial that he is making the granting of military bases a condition for granting aid under the Plan. And the State Department, a little later, issued a formal statement explaining that European socialists are “among the strongest bulwarks in Europe against communism”. This declaration is something of a landmark, and comes at a time when even such a man as presidential candidate Stassen still seems unable to differentiate between the British type of Labour government and totalitarian control in Moscow.

Read more from the NS archive here and sign up to the weekly “From the archive” newsletter here. A selection of pieces spanning the New Statesman’s history has recently been published as Statesmanship” (Weidenfeld & Nicolson)e