Marshall Plan
1
Marshall Plan
The Marshall Plan (officially the European Recovery
Program, ERP) was the American program to aid
Europe where the United States gave monetary support
to help rebuild European economies after the end of
World War II in order to prevent the spread of Soviet
Communism.[1] The plan was in operation for four
years beginning in April 1948. The goals of the United
States were to rebuild a war-devastated region, remove
trade barriers, modernize industry, and make Europe
prosperous again.[2]
The initiative was named after Secretary of State
George Marshall. The plan had bipartisan support in
Washington, where the Republicans controlled
Congress and the Democrats controlled the White
House. The Plan was largely the creation of State
Department officials, especially William L. Clayton
and George F. Kennan. Marshall spoke of urgent need
to help the European recovery in his address at Harvard
University in June 1948.[2][3]
The Labeling used on Marshall Plan aid packages.
The reconstruction plan, developed at a meeting of the
participating European states, was established on June 5, 1947. It offered the same aid to the Soviet Union and its
allies but they did not accept it,[4][5] as to do so would be to allow a degree of US control over the Communist
economies.[6] During the four years that the plan was operational, US $13 billion in economic and technical
assistance was given to help the recovery of the European countries that had joined in the Organization for European
Economic Co-operation. This $13 billion was in the context of a U.S. GDP of $258 billion in 1948, and was on top
of $13 billion in American aid to Europe between the end of the war and the start of the Plan that is counted
separately from the Marshall Plan.[7] The Marshall Plan was replaced by the Mutual Security Plan at the end of
1951.[8]
The ERP addressed each of the obstacles to postwar recovery. The plan looked to the future, and did not focus on the
destruction caused by the war. Much more important were efforts to modernize European industrial and business
practices using high-efficiency American models, reduce artificial trade barriers, and instill a sense of hope and
self-reliance.[9]
By 1952 as the funding ended, the economy of every participant state had surpassed pre-war levels; for all Marshall
Plan recipients, output in 1951 was at least 35% higher than in 1938.[10] Over the next two decades, Western Europe
enjoyed unprecedented growth and prosperity, but economists are not sure what proportion was due directly to the
ERP, what proportion indirectly, and how much would have happened without it. The Marshall Plan was one of the
first elements of European integration, as it erased trade barriers and set up institutions to coordinate the economy on
a continental level—that is, it stimulated the total political reconstruction of western Europe.[11]
Belgian economic historian Herman Van der Wee concludes the Marshall Plan was a "great success":
"It gave a new impetus to reconstruction in Western Europe and made a decisive contribution to the renewal of
the transport system, the modernization of industrial and agricultural equipment, the resumption of normal
production, the raising of productivity, and the facilitating of intra-European trade."[12]
Marshall Plan
2
European Recovery Program expenditures by country.
Wartime destruction
By the end of World War II much of Europe was devastated. Sustained aerial
bombardment had badly damaged most major cities, and industrial facilities were
especially hard-hit.[13] The region's trade flows had been thoroughly disrupted;
millions were in refugee camps living on aid from United Nations Relief and
Rehabilitation Administration and other agencies. Food shortages were severe,
especially in the harsh winter of 1946–1947.
Especially damaged was transportation infrastructure, as railways, bridges, and
docks had been specifically targeted by air strikes, while much merchant
shipping had been sunk. Although most small towns and villages in Western
Europe had not suffered as much damage, the destruction of transportation left
them economically isolated. None of these problems could be easily remedied, as
most nations engaged in the war had exhausted their treasuries in its
execution.[14]
1960 West German stamp honoring
George Marshall
The only major powers whose infrastructure had not been significantly harmed in World War II were the United
States and Canada. They were much more prosperous than before the war but exports were a small factor in the
American economy. Much of the Marshall Plan aid would be used by the Europeans to buy manufactured goods and
raw materials from the United States and Canada.[15]
Marshall Plan
Initial post-war events
Slow recovery
Europe's economies were recovering very slowly, as
unemployment and food shortages led to strikes and
unrest in several nations. In 1947 the European
economies were still well below their pre-war levels
and were showing few signs of growth. Agricultural
production was 83% of 1938 levels, industrial
production was 88%, and exports only 59%.[16] In
Britain the situation was not as severe.[17]
In Germany in 1945-46 housing and food conditions
were bad, as the disruption of transport, markets and
finances slowed a return to normal. In the West,
The hunger-winter of 1947, thousands protest in West Germany
bombing had destroyed 5,000,000 houses and
against the disastrous food situation (March 31, 1947). Sign: We
apartments, and 12,000,000 refugees from the east had
want coal, we want bread
crowded in.[17] Food production was only two-thirds of
the prewar level in 1946-48, while normal grain and meat shipments no longer arrived from the East. Furthermore
the large shipments of food from occupied nations that had sustained Germany during the war ended. Industrial
production fell more than half and reached prewar levels only at the end of 1949[18]
In May 1947 communist ministers were abruptly expelled from the French and Italian governments.
During the first three years of occupation of Germany the UK and US vigorously pursued an industrial disarmament
program in Germany, partly by removal of equipment but mainly through an import embargo on raw materials and
deliberate economic neglect.[19] As a consequence of the industrial disarmament of Germany, whose economy by
mid-1947 was deteriorating rapidly, the economic stagnation of Europe became inevitable.[20] By shutting down the
German industry the Allies disrupted intra-European trade, a trade that was vital for European recovery, and they
thereby delayed European economic recovery.[20]
Nicholas Balabkins concludes that "as long as German industrial capacity was kept idle the economic recovery of
Europe was delayed" and that "To nurse Europe back to economic health the Marshall Plan scrapped the early
postwar economic chains of Germany."[21] Vladimir Petrov concludes that as a result of the early punitive
occupation of Germany the Allies "delayed by several years the economic reconstruction of the wartorn
continent".[22]
By July 1947 Washington realized that economic recovery in Europe could not go forward without the
reconstruction of the German industrial base, deciding that an "orderly, prosperous Europe requires the economic
contributions of a stable and productive Germany."[23] Unless West Germany became the engine of growth the
economic stagnation of Europe became inevitable.[20]
In addition, the power and popularity of indigenous communist parties in several Western European states worried
the United States. In both France and Italy, the crisis of the postwar era had provided fuel for their Communist
Parties, which had become well organized in the resistance movements of the war. These parties had seen significant
electoral success in the postwar elections. Though today many historians feel the possibility of France and Italy
falling to the communists was remote,[24] it was regarded as a very real possibility by American policy makers at the
time.
The American administration of Harry Truman began to believe this possibility in early March 1946, with the
Soviets' violation of the withdrawal deadline in Iran, and Churchill's Iron Curtain speech, given in Truman's presence
a few days later. In the administration's view, the United States needed to adopt a definite position on the world
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Marshall Plan
scene or fear losing credibility. The emerging doctrine of containment (as opposed to rollback) argued that the
United States needed to substantially aid non-communist countries to stop the spread of Soviet influence. There was
also some hope that the Eastern European nations would join the plan, and thus be pulled out of the emerging Soviet
bloc, but that was not to happen.
In January 1947, Truman appointed retired General George Marshall as Secretary of State. In July 1947 Marshall
scrapped JCS 1067 which had decreed "take no steps looking toward the economic rehabilitation of Germany [or]
designed to maintain or strengthen the German economy." Thereafter, JCS 1067 was supplanted by JCS 1779,
stating that "an orderly and prosperous Europe requires the economic contributions of a stable and productive
Germany."[25] The restrictions placed on German heavy industry production were partly ameliorated, permitted steel
production levels were raised from 25% of pre-war capacity to a new limit placed at 50% of pre-war capacity.[26]
With a Communist insurgency threatening Greece, and Britain financially unable to continue its aid, the President
announced his Truman Doctrine on 12 March 1947, "to support free peoples who are resisting attempted subjugation
by armed minorities or by outside pressures", with an aid request for consideration and decision, concerning Greece
and Turkey. Also in March 1947, former U.S. President Herbert Hoover, in one of his reports from Germany, argued
for a change in U.S. occupation policy, amongst other things stating:
There is the illusion that the New Germany left after the annexations can be reduced to a 'pastoral state'. It
cannot be done unless we exterminate or move 25,000,000 people out of it.[27]
Hoover further noted that, "The whole economy of Europe is interlinked with German economy through the
exchange of raw materials and manufactured goods. The productivity of Europe cannot be restored without the
restoration of Germany as a contributor to that productivity."[28] Hoover's report led to a realization in Washington
that a new policy was needed; "almost any action would be an improvement" on current policy."[29] In Washington,
the Joint Chiefs declared that the "complete revival of Germany industry, particularly coal mining" was now of
"primary importance" to American security.[25]
The United States was already spending a great deal to help Europe recover. Over $14 billion was spent or loaned
during the postwar period through the end of 1947, and is not counted as part of the Marshall Plan. Much of this aid
was designed to restore infrastructure and help refugees. Britain, for example, received an emergency loan of $3.75
billion.[30]
The United Nations also launched a series of humanitarian and relief efforts almost wholly funded by the United
States. These efforts had important effects, but they lacked any central organization and planning, and failed to meet
many of Europe's more fundamental needs.[31] Already in 1943, the United Nations Relief and Rehabilitation
Administration (UNRRA) was founded to provide relief to areas liberated from Germany. UNRRA provided billions
of dollars of rehabilitation aid, and helped about 8 million refugees. It ceased operations in the DP camps of Europe
in 1947; many of its functions were transferred to several UN agencies.
Soviet negotiations
After Marshall's appointment in January 1947, administration officials met with Soviet Foreign Minister Vyacheslav
Molotov and others to press for an economically self-sufficient Germany, including a detailed accounting of the
industrial plants, goods and infrastructure already removed by the Soviets in their occupied zone.[32][33] The Soviets
took a punitive approach, pressing for a delay rather than an acceleration in economic rehabilitation, demanding
unconditional fulfillment of all prior reparation claims, and pressing for progress toward nationwide socioeconomic
transformation.[34]
After six weeks of negotiations, Molotov rejected all of the American and British proposals.[32][34] Molotov also
rejected the counter-offer to scrap the British-American "Bizonia" and to include the Soviet zone within the newly
constructed Germany.[34] Marshall was particularly discouraged after personally meeting with Stalin to explain that
the United States could not possibly abandon its position on Germany, while Stalin expressed little interest in a
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Marshall Plan
solution to German economic problems (see pre-war Molotov-Ribbentrop pact of non aggression between Germany
and the Soviet Union).[32][34]
The speech
After the adjournment of the Moscow conference following six weeks of failed discussions with the Soviets
regarding a potential German reconstruction, the United States concluded that a solution could not wait any
longer.[32]
To clarify the U.S.'s position, a major address by Secretary of State George Marshall was planned. Marshall gave the
address to the graduating class of Harvard University on June 5, 1947. Standing on the steps of Memorial Church in
Harvard Yard, he offered American aid to promote European recovery and reconstruction. The speech described the
dysfunction of the European economy and presented a rationale for U.S. 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 U.S.A. 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.
Marshall was convinced that economic stability would provide political stability in Europe. He offered aid, but the
European countries had to organize the program themselves.
The speech, written by Charles Bohlen, contained virtually no details and no numbers. More a proposal than a plan,
it was presented vaguely and made little impact in America. Eight weeks after the Harvard speech, the State
Department wrote in a confidential memorandum that "The Marshall Plan has been compared to a flying saucer —
nobody knows what it looks like, how big it is, in what direction it is moving, or whether it really exists."[35] The
most important element of the speech was the call for the Europeans to meet and create their own plan for rebuilding
Europe, and that the United States would then fund this plan. The administration felt that the plan would likely be
unpopular among many Americans, and the speech was mainly directed at a European audience. In an attempt to
keep the speech out of American papers journalists were not contacted, and on the same day Truman called a press
conference to take away headlines. In contrast, Dean Acheson, an Under Secretary of State, was dispatched to
contact the European media, especially the British media, and the speech was read in its entirety on the BBC.[36][37]
Rejection by the Soviets
British Foreign Secretary Ernest Bevin heard Marshall's radio broadcast speech and immediately contacted French
Foreign Minister Georges Bidault to begin preparing a quick European response to (and acceptance of) the offer. The
two agreed that it would be necessary to invite the Soviets as the other major allied power. Marshall's speech had
explicitly included an invitation to the Soviets, feeling that excluding them would have been too clear a sign of
distrust. State Department officials, however, knew that Stalin would almost certainly not participate, and that any
plan that would send large amounts of aid to the Soviets was unlikely to be approved by Congress.
5
Marshall Plan
Initial reactions
Whilst the Soviet ambassador in Washington suspected that the Marshall Plan could lead to the creation of an
anti-Soviet bloc, Stalin was open to the offer.[38] He directed that - in negotiations to be held in Paris regarding the
aid - countries in the Eastern Bloc should not reject economic conditions being placed upon them.[38] Stalin only
changed his outlook when he learned that (a) credit would only be extended under conditions of economic
cooperation and,(b) aid would also be extended to Germany in total, an eventuality which Stalin thought would
hamper the Soviets' ability to exercise influence in western Germany.[38]
Initially, Stalin maneuvered to kill the Plan, or at least hamper it by means of destructive participation in the Paris
talks regarding conditions.[38] He quickly realized, however, that this would be impossible after Molotov reported following his arrival in Paris in July 1947- that conditions for the credit were non-negotiable.[38] Looming as just as
large a concern was the Czechoslovak eagerness to accept the aid, as well as indications of a similar Polish
attitude.[38]
Stalin suspected a possibility that these Eastern Bloc countries might defy Soviet directives not to accept the aid,
potentially causing a loss of control of the Eastern Bloc.[38] In addition, the most important condition was that every
country choosing to take advantage of the plan would need to have its economic situation independently assessed - a
level of scrutiny to which the Soviets could not agree. Bevin and Bidault also insisted that any aid be accompanied
by the creation of a unified European economy, something incompatible with the strict Soviet command economy.
Compulsory Eastern Bloc rejection
Soviet Foreign Minister Vyacheslav Molotov left Paris, rejecting the plan.[39] Thereafter, statements were made
suggesting a future confrontation with the West, calling the United States both a "fascizing" power and the "center of
worldwide reaction and anti-Soviet activity," with all U.S.-aligned countries branded as enemies.[39] The Soviets also
then blamed the United States for communist losses in elections in Belgium, France and Italy months earlier, in the
spring of 1947.[39] It claimed that "marshallization" must be resisted and prevented by any means, and that French
and Italian communist parties were to take maximum efforts to sabotage the implementation of the Plan.[39] In
addition, Western embassies in Moscow were isolated, with their personnel being denied contact with Soviet
officials.[39]
On July 12, a larger meeting was convened in Paris. Every country of Europe was invited, with the exceptions of
Spain (a World War II neutral that had sympathized with Axis powers) and the small states of Andorra, San Marino,
Monaco, and Liechtenstein. The Soviet Union was invited with the understanding that it would likely refuse. The
states of the future Eastern Bloc were also approached, and Czechoslovakia and Poland agreed to attend. In one of
the clearest signs of Soviet control over the region, the Czechoslovakian foreign minister, Jan Masaryk, was
summoned to Moscow and berated by Stalin for thinking of joining the Marshall Plan. Polish Prime minister Józef
Cyrankiewicz was rewarded by Stalin for the Polish rejection of the Plan. Russia rewarded Poland with a lucrative
five-year trade agreement, the equivalent of 450 million 1948 dollars in credit, 200,000 tons of grain, heavy
machinery, and factories.[40]
The Marshall Plan participants were not surprised when the Czechoslovakian and Polish delegations were prevented
from attending the Paris meeting. The other Eastern European states immediately rejected the offer.[41] Finland also
declined in order to avoid antagonizing the Soviets (see also Finlandization). The Soviet Union's "alternative" to the
Marshall plan, which was purported to involve Soviet subsidies and trade with western Europe, became known as the
Molotov Plan, and later, the COMECON. In a 1947 speech to the United Nations, Soviet deputy foreign minister
Andrei Vyshinsky said that the Marshall Plan violated the principles of the United Nations. He accused the United
States of attempting to impose its will on other independent states, while at the same time using economic resources
distributed as relief to needy nations as an instrument of political pressure.[42]
Stalin immediately sought to take stronger control over the Eastern Bloc countries, abandoning the prior appearance
of democratic institutions.[43] When it appeared that, in spite of heavy pressure, non-communist parties might receive
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Marshall Plan
in excess of 40 percent of the vote in the August 1947 Hungarian elections, an all-out repression was instituted to
suppress independent political forces.[43] In that same month, total annihilation of the opposition in Bulgaria began
on the basis of continuing instructions by Soviet cadres.[43][44]
Szklarska Poręba meeting
In late September, the Soviet Union called a meeting of nine European Communist parties in southwest Poland.[45] A
Communist Party of the Soviet Union (CPSU) report was read at the outset to set the heavily anti-Western tone,
stating now that "international politics is dominated by the ruling clique of the American imperialists" which have
embarked upon the "enslavement of the weakened capitalist countries of Europe."[46] Parties were to struggle against
the U.S. presence in Europe by any means necessary, including sabotage.[47] The report further claimed that
"reactionary imperialist elements throughout the world, particularly in the U.S.A., in Britain and France, had put
particular hope on Germany and Japan, primarily on Hitlerite Germany — first as a force most capable of striking a
blow at the Soviet Union."[48]
Referring to the Eastern Bloc, the report stated that "the Red Army's liberating role was complemented by an
upsurge of the freedom-loving peoples' liberation struggle against the fascist predators and their hirelings."[48] It
argued that "the bosses of Wall Street" were "tak[ing] the place of Germany, Japan and Italy."[48] The Marshall Plan
was described as "the American plan for the enslavement of Europe".[48] It described the world now breaking down
"into basically two camps—the imperialist and antidemocratic camp on the one hand, and the antiimperialist and
democratic camp on the other".[48]
Although the Eastern Bloc countries except Czechoslovakia had immediately rejected Marshall Plan aid, Eastern
Bloc communist parties were blamed for permitting even minor influence by non-communists in their respective
countries during the run up to the Marshall Plan.[43] The meeting's chair, Andrei Zhdanov, who was in permanent
radio contact with the Kremlin from whom he received instructions,[46] also castigated communist parties in France
and Italy for collaboration with those countries' domestic agendas.[49] Zhdanov warned that if they continued to fail
to maintain international contact with Moscow to consult on all matters, "extremely harmful consequences for the
development of the brother parties' work" would result.[49]
Italian and French communist leaders were prevented by party rules from pointing out that it was actually Stalin who
had directed them not to take opposition stances in 1944.[49] The French communist party, as others, was then to
redirect its mission to "destroy capitalist economy" and that the Soviet Communist Information Bureau (Cominform)
would take control of the French Communist Party's activities to oppose the Marshall Plan.[47] When they asked
Zhdanov if they should prepare for armed revolt when they returned home, he did not answer.[47] In a follow-up
conversation with Stalin, he explained that an armed struggle would be impossible and that the struggle against the
Marshall Plan was to be waged under the slogan of national independence.[50]
Negotiations
Turning the plan into reality required negotiations among the participating nations, and to get the plan through the
United States Congress. Sixteen nations met in Paris to determine what form the American aid would take, and how
it would be divided. The negotiations were long and complex, with each nation having its own interests. France's
major concern was that Germany not be rebuilt to its previous threatening power. The Benelux countries, despite
also suffering under the Nazis, had long been closely linked to the German economy and felt their prosperity
depended on its revival. The Scandinavian nations, especially Sweden, insisted that their long-standing trading
relationships with the Eastern bloc nations not be disrupted and that their neutrality not be infringed.[51]
The United Kingdom insisted on special status as a longstanding belligerent during the war, concerned that if it were
treated equally with the devastated continental powers it would receive virtually no aid. The Americans were
pushing the importance of free trade and European unity to form a bulwark against communism. The Truman
administration, represented by William L. Clayton, promised the Europeans that they would be free to structure the
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Marshall Plan
plan themselves, but the administration also reminded the Europeans that implementation depended on the plan's
passage through Congress. A majority of Congress members were committed to free trade and European integration,
and were hesitant to spend too much of the money on Germany.[51] However, before the Marshall Plan was in effect,
France, Austria, and Italy needed immediate aid. On December 17, 1947, the United States agreed to give $40
million to France, Austria, China, and Italy.[52]
Agreement was eventually reached and the Europeans sent a reconstruction plan to Washington. In the document the
Europeans asked for $22 billion in aid. Truman cut this to $17 billion in the bill he put to Congress. The plan
encountered sharp opposition in Congress, mostly from the portion of the Republican Party led by Robert A. Taft
that advocated a more isolationist policy and was weary of massive government spending. The plan also had
opponents on the left, Henry A. Wallace notably among them. Wallace saw the plan as a subsidy for American
exporters and sure to polarize the world between East and West.[53]
Wallace, the former vice president and secretary of agriculture, mockingly called this the "Martial Plan," arguing that
it was just another step towards war.[54] However, opposition against the Marshall Plan was greatly reduced by the
shock of the Communist coup in Czechoslovakia in February 1948. Soon after, a bill granting an initial $5 billion
passed Congress with strong bipartisan support. The Congress would eventually allocate $12.4 billion in aid over the
four years of the plan.[55]
On 17 March 1948, President Harry S. Truman addressed European security and condemned the Soviet Union before
a hastily convened Joint Session of Congress. Attempting to contain spreading Soviet influence in Eastern Europe,
Truman asked Congress to restore a peacetime military draft and to swiftly pass the Economic Cooperation Act, the
name given to the Marshall Plan. Truman’s speech also offered strong criticism of the Soviet Union. “The situation in
the world today in not primarily the result of the natural difficulties which follow a great war,” Truman declared. “It
is chiefly due to the fact that one nation has not only refused to cooperate in the establishment of a just and
honorable peace but—even worse—has actively sought to prevent it.”[56]
Members of the Republican-dominated 80th Congress (1947–1949) were skeptical. “In effect, he told the Nation that
we have lost the peace, that our whole war effort was in vain,” noted Representative Frederick Smith of Ohio. Others
thought he had not been forceful enough to contain the USSR. “What [Truman] said fell short of being tough,” noted
Representative Eugene Cox, a Democrat from Georgia. “There is no prospect of ever winning Russian cooperation.”
Despite its reservations, the 80th Congress implemented Truman’s requests, further escalating the Cold War with the
USSR.[56]
Truman signed the Economic Cooperation Act into law on April 3, 1948; the Act established the Economic
Cooperation Administration (ECA) to administer the program. ECA was headed by economic cooperation
administrator Paul G. Hoffman. In the same year, the participating countries (Austria, Belgium, Denmark, France,
West Germany, the United Kingdom, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway,
Sweden, Switzerland, Turkey, and the United States) signed an accord establishing a master
financial-aid-coordinating agency, the Organization for European Economic Cooperation (later called the
Organization for Economic Cooperation and Development, OECD), which was headed by Frenchman Robert
Marjolin.
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Marshall Plan
Implementation
The first substantial aid went to Greece and Turkey in January 1947,
which were seen as the front line of the battle against communist
expansion, and were already receiving aid under the Truman Doctrine.
Initially Britain had supported the anti-communist factions in those
countries, but due to its dire economic condition it decided to pull out
and in February 1947 requested the U.S. to continue its efforts.[57] The
ECA formally began operation in July 1948.
The ECA's official mission statement was to give a boost to the
European economy: to promote European production, to bolster
European currency, and to facilitate international trade, especially with
the United States, whose economic interest required Europe to become
wealthy enough to import U.S. goods. Another unofficial goal of ECA
(and of the Marshall Plan) was the containment of growing Soviet
influence in Europe, evident especially in the growing strength of
communist parties in Czechoslovakia, France, and Italy.
The Marshall Plan money was transferred to the governments of the
First page of the Marshall Plan
European nations. The funds were jointly administered by the local
governments and the ECA. Each European capital had an ECA envoy,
generally a prominent American businessman, who would advise on the process. The cooperative allocation of funds
was encouraged, and panels of government, business, and labor leaders were convened to examine the economy and
see where aid was needed.
The Marshall Plan aid was mostly used for the purchase of goods from the United States. The European nations had
all but exhausted their foreign exchange reserves during the war, and the Marshall Plan aid represented almost their
sole means of importing goods from abroad. At the start of the plan these imports were mainly much-needed staples
such as food and fuel, but later the purchases turned towards reconstruction needs as was originally intended. In the
latter years, under pressure from the United States Congress and with the outbreak of the Korean War, an increasing
amount of the aid was spent on rebuilding the militaries of Western Europe. Of the some $13 billion allotted by
mid-1951, $3.4 billion had been spent on imports of raw materials and semi-manufactured products; $3.2 billion on
food, feed, and fertilizer; $1.9 billion on machines, vehicles, and equipment; and $1.6 billion on fuel.[58]
Also established were counterpart funds, which used Marshall Plan aid to establish funds in the local currency.
According to ECA rules 60% of these funds had to be invested in industry. This was prominent in Germany, where
these government-administered funds played a crucial role in lending money to private enterprises which would
spend the money rebuilding. These funds played a central role in the reindustrialization of Germany. In 1949–50, for
instance, 40% of the investment in the German coal industry was by these funds.[59]
The companies were obligated to repay the loans to the government, and the money would then be lent out to another
group of businesses. This process has continued to this day in the guise of the state owned KfW bank. The Special
Fund, then supervised by the Federal Economics Ministry, was worth over DM 10 billion in 1971. In 1997 it was
worth DM 23 billion. Through the revolving loan system, the Fund had by the end of 1995 made low-interest loans
to German citizens amounting to around DM 140 billion. The other 40% of the counterpart funds were used to pay
down the debt, stabilize the currency, or invest in non-industrial projects. France made the most extensive use of
counterpart funds, using them to reduce the budget deficit. In France, and most other countries, the counterpart fund
money was absorbed into general government revenues, and not recycled as in Germany.
A far less expensive, but also quite effective, ECA initiative was the Technical Assistance Program. This program
funded groups of European engineers and industrialists to visit the United States and tour mines, factories, and
9
Marshall Plan
smelters so that they could then copy the American advances at home. At the same time several hundred American
technical advisors were sent to Europe.
German level of industry restrictions
Even while the Marshall Plan was being implemented, the dismantling of German industry continued, and in 1949
Konrad Adenauer wrote to the Allies requesting that it end, citing the inherent contradiction between encouraging
industrial growth and removing factories and also the unpopularity of the policy.[60] Support for dismantling was by
this time coming predominantly from the French, and the Petersberg Agreement of November 1949 reduced the
levels vastly, though dismantling of minor factories continued until 1951.[61] The first "level of industry" plan,
signed by the Allies on March 29, 1946, had stated that German heavy industry was to be lowered to 50% of its 1938
levels by the destruction of 1,500 listed manufacturing plants.[62]
In January 1946 the Allied Control Council set the foundation of the future German economy by putting a cap on
German steel production—the maximum allowed was set at about 5,800,000 tons of steel a year, equivalent to 25%
of the pre-war production level.[63] The UK, in whose occupation zone most of the steel production was located, had
argued for a more limited capacity reduction by placing the production ceiling at 12 million tons of steel per year,
but had to submit to the will of the U.S., France and the Soviet Union (which had argued for a 3 million ton limit).
Steel plants thus made redundant were to be dismantled. Germany was to be reduced to the standard of life it had
known at the height of the Great Depression (1932).[64] Consequently, car production was set to 10% of pre-war
levels, and the manufacture of other commodities were reduced as well.[65]
The first "German level of industry" plan was subsequently followed by a number of new ones, the last signed in
1949. By 1950, after the virtual completion of the by then much watered-out "level of industry" plans, equipment
had been removed from 706 manufacturing plants in western Germany and steel production capacity had been
reduced by 6,700,000 tons.[66] Vladimir Petrov concludes that the Allies "delayed by several years the economic
reconstruction of the war-torn continent, a reconstruction which subsequently cost the United States billions of
dollars."[67] In 1951 West Germany agreed to join the European Coal and Steel Community (ECSC) the following
year. This meant that some of the economic restrictions on production capacity and on actual production that were
imposed by the International Authority for the Ruhr were lifted, and that its role was taken over by the ECSC.[68]
Expenditures
The Marshall Plan aid was divided amongst the participant states on a roughly per capita basis. A larger amount was
given to the major industrial powers, as the prevailing opinion was that their resuscitation was essential for general
European revival. Somewhat more aid per capita was also directed towards the Allied nations, with less for those
that had been part of the Axis or remained neutral. The table below shows Marshall Plan aid by country and year (in
millions of dollars) from The Marshall Plan Fifty Years Later. There is no clear consensus on exact amounts, as
different scholars differ on exactly what elements of American aid during this period were part of the Marshall Plan.
10
Marshall Plan
11
Country
1948/49
1949/50
1950/51 Cumulative
($ millions) ($ millions) ($ millions) ($ millions)
232
166
70
468
Luxembourg 195
222
360
777
Austria
Belgium and
Denmark
103
87
195
385
France
1085
691
520
2296
Germany
510
438
500
1448
Greece
175
156
45
376
Iceland
6
22
15
43
Ireland
88
45
0
133
594
405
205
1204
Netherlands
471
302
355
1128
Norway
82
90
200
372
Portugal
0
0
70
70
Sweden
39
48
260
347
0
0
250
250
Turkey
28
59
50
137
United Kingdom
1316
921
1060
3297
Italy and
Trieste
Switzerland
Totals
4,924
3,652
4,155
12,731
Loans and Grants
The Marshall plan, just as GARIOA, consisted of aid both in the form of grants and in the form of loans.[69] Out of
the total, 1.2 billion USD were loan-aid.[70]
Ireland which received 146.2 million USD through the Marshall plan, received 128.2 million USD as loans, and the
remaining 18 million USD as grants.[71] By 1969 the Irish Marshal plan debt, which was still being repaid, amounted
to 31 million pounds, out of a total Irish foreign debt of 50 million pounds.[72]
The UK received 385 million USD of its Marshall plan aid in the form of loans.[70] Unconnected to the Marshall
plan the UK also received direct loans from the US amounting to 4.6 billion USD.[70] The proportion of Marshall
plan loans versus Marshall plan grants was roughly 15% to 85% for both the UK and France.[73]
Germany, which up until the 1953 Debt agreement had to work on the assumption that all the Marshall plan aid was
to be repaid, spent its funds very carefully. Payment for Marshall plan goods, "counterpart funds", were administered
by the Reconstruction Credit Institute, which used the funds for loans inside Germany. In the 1953 Debt agreement
the amount of Marshall plan aid that Germany was to repay was reduced to less than 1 billion USD.[74] This made
the proportion of loans versus grants to Germany similar to that of France and the UK.[75] The final German loan
repayment was made in 1971.[76] Since Germany chose to repay the aid debt out of the German Federal budget,
leaving the German ERP fund intact, the fund was able to continue its reconstruction work. By 1996 it had
accumulated a value of 23 billion Deutsche Mark.[77]
Marshall Plan
Effects and legacy
The Marshall Plan was originally scheduled to end in 1953. Any effort
to extend it was halted by the growing cost of the Korean War and
rearmament. American Republicans hostile to the plan had also gained
seats in the 1950 Congressional elections, and conservative opposition
to the plan was revived. Thus the plan ended in 1951, though various
other forms of American aid to Europe continued afterwards.
The years 1948 to 1952 saw the fastest period of growth in European
history. Industrial production increased by 35%. Agricultural
production substantially surpassed pre-war levels.[55] The poverty and
starvation of the immediate postwar years disappeared, and Western
Europe embarked upon an unprecedented two decades of growth that
saw standards of living increase dramatically. There is some debate
among historians over how much this should be credited to the
Marshall Plan. Most reject the idea that it alone miraculously revived
Europe, as evidence shows that a general recovery was already
One of a number of posters created to promote
underway. Most believe that the Marshall Plan sped this recovery, but
the Marshall Plan in Europe. Note the pivotal
did not initiate it. The United States worked to direct the Marshall Plan
position of the American flag. The blue and white
towards children and an increase of nutritional material for all citizens
flag between those of Germany and Italy is a
within western Europe so as to shed a positive light on its goals as it
version of the Trieste flag with the UN blue
rather than the traditional red.
worked to effectively defeat communist threats. One effect of the plan
was that it subtly “Americanized” countries, especially Austria, who
embraced United States’ assistance, through popular culture, such as Hollywood movies and rock n’ roll (Bischof,
Pelinka and Stiefel 174-175).
The political effects of the Marshall Plan may have been just as important as the economic ones. Marshall Plan aid
allowed the nations of Western Europe to relax austerity measures and rationing, reducing discontent and bringing
political stability. The communist influence on Western Europe was greatly reduced, and throughout the region
communist parties faded in popularity in the years after the Marshall Plan. The trade relations fostered by the
Marshall Plan helped forge the North Atlantic alliance that would persist throughout the Cold War. At the same time,
the nonparticipation of the states of Eastern Europe was one of the first clear signs that the continent was now
divided.
The Marshall Plan also played an important role in European integration. Both the Americans and many of the
European leaders felt that European integration was necessary to secure the peace and prosperity of Europe, and thus
used Marshall Plan guidelines to foster integration. In some ways this effort failed, as the OEEC never grew to be
more than an agent of economic cooperation. Rather it was the separate European Coal and Steel Community, which
notably excluded Britain, that would eventually grow into the European Union. However, the OEEC served as both a
testing and training ground for the structures that would later be used by the European Economic Community. The
Marshall Plan, linked into the Bretton Woods system, also mandated free trade throughout the region.
While some historians today feel some of the praise for the Marshall Plan is exaggerated, it is still viewed favorably
and many thus feel that a similar project would help other areas of the world. After the fall of communism several
proposed a "Marshall Plan for Eastern Europe" that would help revive that region. Others have proposed a Marshall
Plan for Africa to help that continent, and U.S. vice president Al Gore suggested a Global Marshall Plan.[78]
"Marshall Plan" has become a metaphor for any very large scale government program that is designed to solve a
specific social problem. It is usually used when calling for federal spending to correct a perceived failure of the
private sector.
12
Marshall Plan
Repayment
The Organization for European Economic Cooperation took the leading role in allocating funds, and the ECA
arranged for the transfer of the goods. The American supplier was paid in dollars, which were credited against the
appropriate European Recovery Program funds. The European recipient, however, was not given the goods as a gift,
but had to pay for them (usually on credit) in local currency. These payments were kept by the European government
involved in a special counterpart fund. This counterpart money, in turn, could be used by the government for
further investment projects. 5% of the counterpart money was paid to the U.S. to cover the administrative costs of
the ERAP.
The Marshall Plan money was in the form of grants that did not have to be repaid.[79] In addition to ERP grants, the
Export-Import Bank (an agency of the U.S. government) at the same time made long-term loans at low interest rates
to finance major purchases in the U.S., all of which were repaid.
In the case of Germany there also were 16 billion marks of debts from the 1920s which had defaulted in the 1930s,
but which Germany decided to repay to restore its reputation. This money was owed to government and private
banks in the U.S., France and Britain. Another 16 billion marks represented postwar loans by the U.S. Under the
London Debts Agreement of 1953, the repayable amount was reduced by 50% to about 15 billion marks and
stretched out over 30 years, and compared to the fast-growing German economy were of minor impact.[80]
Areas without the Plan
Large parts of the world devastated by World War II did not benefit from the Marshall Plan. The only major Western
European nation excluded was Francisco Franco's Spain, which did not overtly participate in World War II. After the
war, it pursued a policy of self-sufficiency, currency controls, and quotas, with little success. With the escalation of
the Cold War, the United States reconsidered its position, and in 1951 embraced Spain as an ally, encouraged by
Franco's aggressive anti-communist policies. Over the next decade, a considerable amount of American aid would go
to Spain, but less than its neighbors had received under the Marshall Plan.[81]
While the western portion of the Soviet Union had been as badly affected as any part of the world by the war, the
eastern portion of the country was largely untouched and had seen a rapid industrialization during the war. The
Soviets also imposed large reparations payments on the Axis allies that were in its sphere of influence. Austria,
Finland, Hungary, Romania, and especially East Germany were forced to pay vast sums and ship large amounts of
supplies to the USSR. These reparation payments meant the Soviet Union received about the same itself as 16
European countries received in total from Marshall Plan aid.[82]
In accordance with the agreements with the USSR shipment of dismantled German industrial installations from the
west began on March 31, 1946. Under the terms of the agreement the Soviet Union would in return ship raw
materials such as food and timber to the western zones. In view of the Soviet failure to do so, the western zones
halted the shipments east, ostensibly on a temporary basis, although they were never resumed. It was later shown that
the main reason for halting shipments east was not the behavior of the USSR but rather the recalcitrant behavior of
France.[83] Examples of material received by the USSR were equipment from the Kugel-Fischer ballbearing plant at
Schweinfurt, the Daimler-Benz underground aircraft-engine plant at Obrigheim, the Deschimag shipyards at
Bremen-Weser, and the Gendorf powerplant.[84][85]
The USSR did establish COMECON as a riposte to the Marshall Plan to deliver aid for Eastern Bloc countries, but
this was complicated by the Soviet efforts to manage their own recovery from the war. The members of Comecon
looked to the Soviet Union for oil; in turn, they provided machinery, equipment, agricultural goods, industrial goods,
and consumer goods to the Soviet Union. Economic recovery in the east was much slower than in the west, and the
economies never fully recovered in the communist period, resulting in the formation of the shortage economies and a
gap in wealth between East and West. Finland, which did not join the Marshall Plan and which was required to give
large reparations to the USSR, saw its economy recover to pre-war levels in 1947.[86] France, which received billions
13
Marshall Plan
of dollars through the Marshall Plan, similarly saw its average income per person return to almost pre-war level by
1949.[87] By mid-1948 industrial production in Poland, Hungary, Bulgaria, and Czechoslovakia had recovered to a
level somewhat above pre-war level.[88]
Aid to Asia
From the end of the war to the end of 1953, the U.S. provided grants and credits amounting to $5.9 billion to Asian
countries, especially China/Taiwan ($1.051 billion), India ($255 million), Indonesia ($215 million), Japan ($2.44
billion), South Korea ($894 million), Pakistan ($98 million) and the Philippines ($803 million). In addition, another
$282 million went to Israel and $196 million to the rest of the Middle East.[89] All this aid was separate from the
Marshall Plan.
Canada
Canada, like the United States, was little damaged by the war and in 1945 was one of the world's largest economies.
It operated its own aid program. In 1948, the U.S. allowed ERP aid to be used in purchasing goods from Canada.
Canada made over a billion dollars in sales in the first two years of operation.[90]
World total
The total of American grants and loans to the world, 1945–53, came to $44.3 billion.[91]
Criticism
Early criticism
Initial criticism of the Marshall Plan came from a number of economists. Wilhelm Röpke, who influenced German
Minister for Economy Ludwig Erhard in his economic recovery program, believed recovery would be found in
eliminating central planning and restoring a market economy in Europe, especially in those countries which had
adopted more fascist and corporatist economic policies. Röpke criticized the Marshall plan for forestalling the
transition to the free market by subsidizing the current, failing systems. Erhard put Röpke's theory into practice and
would later credit Röpke's influence for West Germany's preeminent success.[92]
Henry Hazlitt criticized the Marshall Plan in his 1947 book Will Dollars Save the World?, arguing that economic
recovery comes through savings, capital accumulation and private enterprise, and not through large cash subsidies.
Ludwig von Mises also criticized the Marshall Plan in 1951, believing that "the American subsidies make it possible
for [Europe's] governments to conceal partially the disastrous effects of the various socialist measures they have
adopted".[93] Some critics and Congressmen at the time believed that America was giving too much aid to Europe.
America had already given Europe $9 billion in other forms of help in previous years. The Marshall Plan gave
another $13 billion, equivalent to about $100 billion in 2010 value. Critics did not think that it was necessary for
Americans to be using so much money to help nations they had already assisted in many ways before.[94]
Modern criticism
Criticism of the Marshall Plan became prominent among historians of the revisionist school, such as Walter LaFeber,
during the 1960s and 1970s. They argued that the plan was American economic imperialism, and that it was an
attempt to gain control over Western Europe just as the Soviets controlled Eastern Europe. In a review of West
Germany's economy from 1945 to 1951, German analyst Werner Abelshauser concluded that "foreign aid was not
crucial in starting the recovery or in keeping it going". The economic recoveries of France, Italy, and Belgium,
Cowen found, also predated the flow of U.S. aid. Belgium, the country that relied earliest and most heavily on free
market economic policies after its liberation in 1944, experienced the fastest recovery and avoided the severe
housing and food shortages seen in the rest of continental Europe.[95]
14
Marshall Plan
Former U.S. Chairman of the Federal Reserve Bank Alan Greenspan gives most credit to Ludwig Erhard for
Europe's economic recovery. Greenspan writes in his memoir The Age of Turbulence that Erhard's economic policies
were the most important aspect of postwar Western Europe recovery, far outweighing the contributions of the
Marshall Plan. He states that it was Erhard's reductions in economic regulations that permitted Germany's miraculous
recovery, and that these policies also contributed to the recoveries of many other European countries. Japan's
recovery is also used as a counter-example, since it experienced rapid growth without any aid whatsoever. Its
recovery is attributed to traditional economic stimuli, such as increases in investment, fueled by a high savings rate
and low taxes. Japan saw a large infusion of US investment during the Korean War.[96]
Criticism of the Marshall Plan also aims at showing that it began a legacy of disastrous foreign aid programs. Since
the 1990s, economic scholarship has been more hostile to the idea of foreign aid. For example, Alberto Alesina and
Beatrice Weder, summing up economic literature on foreign aid and corruption, find that aid is primarily used
wastefully and self-servingly by government officials, and ends up increasing governmental corruption.[97] This
policy of promoting corrupt government is then attributed back to the initial impetus of the Marshall Plan.[98]
Noam Chomsky wrote that the amount of American dollars given to France and the Netherlands equaled the funds
these countries used to finance their military actions against their colonial subjects in East Asia, in French Indochina
and the Netherlands East Indies respectively. The Marshall Plan was said to have "set the stage for large amounts of
private U.S. investment in Europe, establishing the basis for modern transnational corporations".[99] The Netherlands
used a significant portion of the aid it received to re-conquer Indonesia in the Indonesian National Revolution and
was forced into joining the Korean War in 1950 after threats the project would end if it did not comply.[100]
In popular culture
Alfred Friendly, press aide to the U.S. Secretary of Commerce W. Averell Harriman, wrote a humorous operetta
about the Marshall Plan during its first year; one of the lines in the operetta was: "Wines for Sale; will you swap / A
little bit of steel for Chateau Neuf du Pape?"[101]
Notes
[1] "Most importantly, these efforts were designed to prevent the spread of international communism," says Alexander DeConde et al, eds.
Encyclopedia of American foreign policy (2002) Volume 1 p. 95
[2] Hogan (1987)
[3] http:/ / www. marshallfoundation. org/ library/ doc_marshall_plan_speech. html
[4] Geoffrey Roberts (December 2000). "Historians and the Cold War" (http:/ / www. historytoday. com/ MainArticle. aspx?m=14080&
amid=14080). History Today. . Retrieved 2009-02-15.
[5] Robert J. McMahon (2003-03-27). The Cold War. Very Short Introductions. Oxford University Press. p. 30.
[6] Volkogonov, Dmitri. Stalin: Triumph and Tragedy. Forum, 1996, p.531.
[7] Milward (1984) p 46
[8] Mills, Nicolaus (2008). Winning the peace: the Marshall Plan and America's coming of age as a superpower. Wiley. p. 195.
ISBN 978-0-470-09755-7.
[9] Hogan (1987) p. 427-45; Barry Eichengreen, The European Economy since 1945: Coordinated Capitalism and Beyond, (2008) pp 64-73
[10] Barry Eichengreen, The European Economy since 1945: Coordinated Capitalism and Beyond, (2008) p. 57; West Germany was 6% higher,
the other countries 45% higher.
[11] Milward (1984) p. 466
[12] Herman Van der Wee, Prosperity and Upheaval: The World Economy, 1945-1980 (1984) p. 44
[13] Tom Buchanan, Europe's Troubled Peace 1945–2000, (2006) ch 1
[14] Tony Judt, Postwar: a History of Europe since 1945 (2005) ch 1
[15] James T. Patterson (1997). Grand expectations: the United States, 1945-1974. Oxford University Press. ISBN 0-19-507680-X.
[16] Michael J. Hogan, The Marshall Plan, pg. 30.
[17] Deither Raff, A History of Germany (1988) p 335
[18] Alan S. Milward, The Reconstruction of Western Europe: 1945-51 (1984) pp. 356, 436
[19] Nicholas Balabkins, "Germany Under Direct Controls: Economic Aspects of Industrial Disarmament 1945 - 1948", Rutgers University
Press, 1964 p. 207
15
Marshall Plan
[20] Nicholas Balabkins, "Germany Under Direct Controls: Economic Aspects of Industrial Disarmament 1945 - 1948", Rutgers University
Press, 1964 p. 208, 209
[21] Nicholas Balabkins, "Germany Under Direct Controls: Economic Aspects of Industrial Disarmament 1945 - 1948", Rutgers University
Press, 1964 p. 209
[22] Vladimir Petrov, Money and conquest; allied occupation currencies in World War II. Baltimore, Johns Hopkins Press (1967) p. 263
[23] Pas de Pagaille! (http:/ / www. time. com/ time/ magazine/ article/ 0,9171,887417,00. html) Time 28 July 1947.
[24] Gaddis, We Now Know.
[25] Beschloss 2003, p. 277
[26] Pas de Pagaille! (http:/ / www. time. com/ time/ magazine/ article/ 0,9171,887417,00. html) Time Magazine, Jul. 28, 1947.
[27] Erik Reinert, Jomo K. S. The Marshall Plan at 60: The General's Successful War On Poverty (http:/ / www. un. org/ Pubs/ chronicle/ 2008/
webarticles/ 080103_marshallplan. html), UN Chronicle (accessed 2008-05-20)
[28] Michael Wala, The Council on Foreign Relations and American Foreign Policy in the Early Cold War, 1994, Berghahn Books, ISBN
1-57181-003-X pp.104-105
[29] Michael J. Hogan The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952, 1987, Cambridge
University, ISBN 0-521-37840-0 pp.34-35
[30] Statistical Abstract of the United States: 1949 p. 846 online (http:/ / www2. census. gov/ prod2/ statcomp/ documents/ 1949-12. pdf)
[31] Tony Judt, in The Marshall Plan: Fifty Years After, edited by Martin Schain, pg. 4.
[32] Miller 2000, p. 16
[33] Wettig 2008, p. 116
[34] Wettig 2008, p. 117
[35] Bailey, Thomas Andrew. The Marshall Plan Summer: An Eyewitness Report on Europe and the Russians in 1947. Stanford, Calif.: Hoover
Institution, 1977. 10.
[36] Charles L. Mee, (1984). The Marshall Plan. New York: Simon & Schuster. p. 99. ISBN 0-671-42149-2.
[37] "BBC Correspondent Leonard Miall and the Marshall Plan Speech: An Interview" (http:/ / www. marshallfoundation. org/ library/
oral_histories_miall_interview. html). The Marshall Foundation. September 19, 1977. . Retrieved 2007-08-15.
[38] Wettig 2008, p. 138
[39] Wettig 2008, p. 139
[40] "Carnations — TIME" (http:/ / www. time. com/ time/ magazine/ article/ 0,9171,855998,00. html). TIME. 1948-02-09. . Retrieved
2009-02-01.
[41] Schain, p.132
[42] "Vyshinsky Speech to U.N. General Assembly" (http:/ / isc. temple. edu/ hist249/ course/ Documents/ vyshinsky_speech_to_un. htm).
Temple University. . Retrieved 2009-03-03.
[43] Wettig 2008, p. 148
[44] Wettig 2008, p. 149
[45] Behrman, Greg. Most noble adventure the Marshall plan and the time when America helped save Europe. New York: Free P, 2007.
[46] Wettig 2008, p. 140
[47] Wettig 2008, p. 146
[48] Wettig 2008, p. 142
[49] Wettig 2008, p. 145
[50] Wettig 2008, p. 147
[51] Cini, p.24 in Schain
[52] Sorel, Eliot, and Pier Carlo Padoan. The Marshall Plan: Lessons Learned for the 21st Century. Paris: OECD, 2008. 15-16. Print.
[53] Hogan, p.93.
[54] Nash, Gary B., and Julie Roy. Jeffrey. "Chills and Fever During the Cold War, 1945-1960." The American People: Creating a Nation and a
Society. 6th ed. New York: Pearson Longman, 2008. 828.
[55] Grogin, p.118
[56] "President Harry S. Truman's March 17, 1948 address to a Joint Session" (http:/ / clerk. house. gov/ art_history/ highlights.
html?action=view& intID=345). Clerk.house.gov. . Retrieved 2011-12-09.
[57] Alan Bullock, Ernest Bevin: Foreign Secretary (1983) pp 368-9; Arnold Offner, Another Such Victory (2002) p 197; Denise M. Bostdorff,
Proclaiming the Truman Doctrine (2008) p 51
[58] Hogan, p.415
[59] Crafts, Toniolo, p.464
[60] Dennis L. Bark and David R. Gress. A history of West Germany vol 1: from shadow to substance (Oxford 1989) p259
[61] Dennis L. Bark and David R. Gress. A history of West Germany vol 1: from shadow to substance (Oxford 1989) p260
[62] Henry C. Wallich. Mainsprings of the German Revival (1955) pg. 348.
[63] "Cornerstone of Steel" (http:/ / www. time. com/ time/ magazine/ article/ 0,9171,934360,00. html), Time (magazine) magazine, January 21,
1946
[64] Cost of Defeat (http:/ / www. time. com/ time/ magazine/ article/ 0,9171,852764,00. html), Time (magazine) magazine, April 8, 1946
16
Marshall Plan
[65] The President's Economic Mission to Germany and Austria, Report 3 (http:/ / www. trumanlibrary. org/ whistlestop/ study_collections/
marshall/ large/ documents/ index. php?pagenumber=10& documentid=22& documentdate=1947-03-24& studycollectionid=mp& nav=OK)
Herbert Hoover, March, 1947 pg. 8
[66] Frederick H. Gareau "Morgenthau's Plan for Industrial Disarmament in Germany" The Western Political Quarterly, Vol. 14, No. 2 (Jun.,
1961), pp. 517-534
[67] Vladimir Petrov, Money and conquest; allied occupation currencies in World War II. Baltimore, Johns Hopkins Press (1967) p. 263
[68] Information bulletin Frankfurt, Germany: Office of the US High Commissioner for Germany Office of Public Affairs, Public Relations
Division, APO 757, US Army, January 1952 "Plans for terminating international authority for the Ruhr" , pp. 61-62 (http:/ / digicoll. library.
wisc. edu/ cgi-bin/ History/ History-idx?type=article& did=HISTORY. 0057. 0400. 0023& isize=M) ( main URL (http:/ / digital. library.
wisc. edu/ 1711. dl/ History. omg1952Jan))
[69] Timothy W. Guinnane, FINANCIAL VERGANGENHEITSBEWÄLTIGUNG: THE 1953 LONDON DEBT AGREEMENT, p.17
[70] John Agnew, J. Nicholas Entrikin, The Marshall Plan today: model and metaphor, p.110
[71] Gary Murphy, In search of the promised land: the politics of post-war Ireland, p.70
[72] James F. Lydon, The making of Ireland: from ancient times to the present, p.391
[73] Timothy W. Guinnane, FINANCIAL VERGANGENHEITSBEWÄLTIGUNG: THE 1953 LONDON DEBT AGREEMENT, p.28
[74] "The Marshall Plan and the ERP" (http:/ / www. kfw. de/ kfw/ en/ KfW_Group/ About_KfW/ Identity/ History/ Themenschwerpunkte/
Marshallplan_und_ERP. jsp). Kfw.de. . Retrieved 2011-12-09.
[75] Timothy W. Guinnane, FINANCIAL VERGANGENHEITSBEWÄLTIGUNG: THE 1953 LONDON DEBT AGREEMENT, p.28
[76] Joseph A. Biesinger, Germany: a reference guide from the Renaissance to the present, p.556
[77] Detlef Junker, The United States and Germany in the Era of the Cold War, 1945-1990: 1945-1968, p.306
[78] Marshall Plan style proposals for other parts of the world have been a perennial idea. For instance, Tony Blair and Gordon Brown have
referred to their African aid goals as "a Marshall Plan". Guardian.co.uk (http:/ / www. guardian. co. uk/ g8/ story/ 0,13365,1498591,00. html)
After the end of the Cold War many felt Eastern Europe needed a rebuilding plan.
[79] Harry Bayard Price, The Marshall Plan and its Meaning (1955), p. 106
[80] Timothy W. Guinnane, "Financial Vergangenheitsbewältigung: The 1953 London Debt Agreement" (Economic Growth Center, Yale
University, 2004) pp 17. 20, 21, 27-8, 30 online (http:/ / ssrn. com/ abstract=493802)
[81] Crafts, Toniolo, p.363
[82] Zwass, Adam (1989). The Council for Mutual Economic Assistance: the thorny path from political to economic integration (http:/ / books.
google. co. uk/ books?id=2db3MMq1W70C& pg=PA16& dq="soviet+ union"+ "marshall+ plan"+ reparations& lr=& client=firefox-a&
cd=19#v=onepage& q="soviet union" "marshall plan" reparations& f=false). M.E. Sharpe. p. 16. ISBN 978-0-87332-496-0. .
[83] John Gimbel, "The American Reparations Stop in Germany: An Essay on the Political Uses of History"
[84] "GHDI — Document — Page" (http:/ / germanhistorydocs. ghi-dc. org/ docpage. cfm?docpage_id=3403). Germanhistorydocs.ghi-dc.org. .
Retrieved 2010-03-07.
[85] "WISC.edu" (http:/ / images. library. wisc. edu/ History/ EFacs/ GerRecon/ omg1946n039/ reference/ history. omg1946n039. i0007. pdf)
(PDF). . Retrieved 2011-12-09.
[86] "Economy — Finland" (http:/ / www. nationsencyclopedia. com/ Europe/ Finland-ECONOMY. html). Nationsencyclopedia.com. .
Retrieved 2009-02-01.
[87] De Long, J.; Barry Eichengreen (1993). "The Marshall Plan" (http:/ / books. google. co. uk/ books?hl=en& lr=& id=kGCfmmlGtPEC&
oi=fnd& pg=PA189& dq="marshall+ plan"+ france+ recover+ pre-war+ & ots=Kx_HrsmbWs&
sig=EMSTnL2S6vwHCrzOYiQJJDNCpGw#PPA202,M1). Postwar Economic Reconstruction and Lessons for the East Today. p. 202. .
[88] "Economic Changes in Eastern Europe Since the War" (http:/ / links. jstor. org/ sici?sici=0020-5850(194904)25:2<157:ECIEES>2. 0.
CO;2-7). Royal Institute of International Affairs. . Retrieved 2010-02-11.
[89] All data from the official document: U.S. Bureau of the Census, Statistical Abstract of the United States: 1954 (1955) table 1075 pp 899-902
online edition file 1954-08.pdf (http:/ / www2. census. gov/ prod2/ statcomp/ documents/ 1954. zip)
[90] Bothwell, p. 58
[91] U.S. Bureau of the Census, Statistical Abstract of the United States: 1954 (1955) table 1075 p. 899
[92] Erhard, p. 22; also, Zmirak
[93] "von Mises" (http:/ / www. mises. org/ story/ 2321). Mises.org. . Retrieved 2009-08-18.
[94] Schain, Martin. The Marshall Plan: Fifty Years after. New York: Palgrave, 2001. 1-3. Google Books. Web. 28 April 2010.
[95] "A Marshall Plan for Iraq?" (http:/ / www. cato. org/ research/ articles/ vasquez-030509. html). Cato.org. 2003-05-09. . Retrieved
2009-02-01.
[96] Forsberg, Aaron (2000). America and the Japanese miracle: the Cold War context of Japan's postwar economic revival, 1950-1960. UNC
Press. p. 84. ISBN 978-0-8078-2528-0.
[97] Alesina and Weder, pp. 1126–1137.
[98] Tucker, 15:9.
[99] Chomsky, p. 9.
[100] Nationalism and revolution in Indonesia — Google Books (http:/ / books. google. com/ books?id=WDgBBzWQ2DAC& pg=PA403&
dq=Netherlands+ Marhsall+ plan+ aid+ indonesia& sig=sQ3KNTs6jfaa_ceWBW9B_9DO-6Q). Books.google.com.
ISBN 978-0-87727-734-7. . Retrieved 2009-08-18.
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Marshall Plan
[101] Richard D. McKinzie (July 17, 1975). "Oral History Interview with Lincoln Gordon" (http:/ / www. trumanlibrary. org/ oralhist/ gordonl.
htm). Truman Library. . Retrieved December 2, 2008.
References
• Alesina, Alberto and Weder, Beatrice, "Do Corrupt Governments Receive Less Foreign Aid?" American
Economic Review 92 (4): (September 2002)
• Beschloss, Michael R (2003), The Conquerors: Roosevelt, Truman and the Destruction of Hitler's Germany,
1941-1945, Simon and Schuster, ISBN 0-7432-6085-6
• Bischof, Gunter, Anton Pelinka, and Dieter Stiefel. "Contemporary Austrian Studies." The Marshall Plan in
Austria. New Brunswick, NJ: Transaction, 2000. 174-75.
• Bothwell, Robert. The Big Chill: Canada and the Cold War. Canadian Institute for International Affairs/Institut
Canadien des Affaires Internationales Contemporary Affairs Series, No. 1. Toronto: Irwin Publishing Ltd., 1998.
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and the contradictions of U.S. policy, Seven Stories Press, 2002 ISBN 1-58322-547-1
• Cini, Michelle, in Schain, Martin, (ed.) "From the Marshall Plan to the EEC", in The Marshall Plan: Fifty Years
After, New York: Palgrave, 2001
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Marburg, Rechts-und-Staatswissenschaftlice Fakultät,
• Ericson, Edward E. (1999), Feeding the German Eagle: Soviet Economic Aid to Nazi Germany, 1933–1941,
Greenwood Publishing Group, ISBN 0-275-96337-3
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• Gaddis, John Lewis. We Now Know: Rethinking Cold War History. New York: Oxford University Press, 1997
• Grenville, John Ashley Soames (2005), A History of the World from the 20th to the 21st Century, Routledge,
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Century: A History and Guide with Texts, Taylor & Francis, ISBN 0-415-23798-X
• Grogin, Robert C. (2001), Natural Enemies: The United States and the Soviet Union in the Cold War, 1917-1991,
Lexington Books, ISBN ISBN 0739101609
• Hogan, Michael J. The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947–1952.
Cambridge: Cambridge University Press, 1987.
• Miller, Roger Gene (2000), To Save a City: The Berlin Airlift, 1948-1949, Texas A&M University Press,
ISBN 0-89096-967-1
• Milward, Alan S. The Reconstruction of Western Europe 1945-51 (Berkeley: University of California Press,
2006)
• Nekrich, Aleksandr Moiseevich; Ulam, Adam Bruno; Freeze, Gregory L. (1997), Pariahs, Partners, Predators:
German–Soviet Relations, 1922–1941, Columbia University Press, ISBN 0-231-10676-9
• Peterson, Harold F., Argentina and the United States II. (1914–1960)
• Roberts, Geoffrey (2006), Stalin's Wars: From World War to Cold War, 1939–1953, Yale University Press,
ISBN 0-300-11204-1
• Schain, Martin, ed. The Marshall Plan: Fifty Years After. New York: Palgrave, 2001.
• Shirer, William L. (1990), The Rise and Fall of the Third Reich: A History of Nazi Germany, Simon and Schuster,
ISBN 0-671-72868-7
• Stern, Susan, Marshall Plan 1947–1997 A German View" "German Missions in the United States — Home"
(http://www.germany.info/relaunch/culture/history/marshall.html). Germany.info. Retrieved 2009-08-18.
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Marshall Plan
19
• Stueck, William Whitney, ed. The Korean War in World History. Lexington, Ky.: University Press of Kentucky,
2004.
• Tucker, Jeffrey, "The Marshall Plan Myth" The Free Market 15:9 (Sept 1997)
• Turner, Henry Ashby (1987), The Two Germanies Since 1945: East and West, Yale University Press,
ISBN 0-300-03865-8
• Van Meter Crabb, Cecil, American foreign policy in the nuclear age, Harper & Row, New York, 1965
• von Mises, Ludwig, "Profit and Loss" presented to the Mont Pèlerin Society held in Beauvallon, France,
September 9 to 16, 1951; reprinted in Planning for Freedom, South Holland, Ill., Libertarian Press, 1952 "Profit
and Loss — Ludwig von Mises — Mises Institute" (http://www.mises.org/story/2321). Mises.org. Retrieved
2009-08-18.
• Wettig, Gerhard (2008), Stalin and the Cold War in Europe, Rowman & Littlefield, ISBN 0-7425-5542-9
• Woods, Thomas E., The Politically Incorrect Guide to American History, . ISBN 0-89526-047-6
Further reading
• Agnew, John and Entrikin, J. Nicholas eds. The Marshall Plan Today: Model and Metaphor Routledge. (2004)
online version (http://www.questia.com/PM.qst?a=o&d=108516906)
• Arkes, Hadley. Bureaucracy, the Marshall Plan, and the National Interest (1972).
• Behrman, Greg, The Most Noble Adventure: The Marshall Plan and the Time When America Helped Save Europe
(2007) ISBN 0-7432-8263-9
• Bonds, John Bledsoe. Bipartisan Strategy: Selling the Marshall Plan (2002) online version (http://www.questia.
com/PM.qst?a=o&d=102124797)
• Esposito, Chiarella. America's Feeble Weapon: Funding the Marshall Plan in France and Italy, 1948–1950
(1994) online version (http://www.questia.com/library/book/
americas-feeble-weapon-funding-the-marshall-plan-in-france-and-italy-1948-1950-by-chiarella-esposito.jsp)
• Djelic, Marie-Laure A. Exporting the American Model: The Post-War Transformation of European Business
(1998) online version (http://www.questia.com/library/book/
exporting-the-american-model-the-post-war-transformation-of-european-business-by-marie-laure-a-djelic.jsp)
• Fossedal, Gregory A. Our Finest Hour: Will Clayton, the Marshall Plan, and the Triumph of Democracy. (1993).
• Gimbel, John, The origins of the Marshall plan (1976) ( reviewed (http://www.jstor.org/pss/2701645))
• Jackson, Scott. "Prologue to the Marshall Plan: The Origins of the American Commitment for a European
Recovery Program," Journal of American History 65#4 (1979), pp. 1043-1068 in JSTOR (http://www.jstor.org/
stable/1894559)
• Kipping, Matthias and Bjarnar, Ove. The Americanisation of European Business: The Marshall Plan and the
Transfer of Us Management Models (1998) online version (http://www.questia.com/library/book/
the-americanisation-of-european-business-the-marshall-plan-and-the-transfer-of-us-management-models-by-ove-bjarnar-matthiasjsp)
• Lewkowicz, Nicolas. The German Question and the International Order, 1943-48 (Palgrave Macmillan:
Basingstoke and New York) (2010)
• Lewkowicz, Nicolas. The German Question and the Origins of the Cold War (IPOC: Milan) (2008)
• Mee, Charles L. The Marshall Plan: The Launching of the Pax Americana (1984).
• Milward, Alan S. The Reconstruction of Western Europe, 1945–51. (1984).
• Röpke, Wilhelm, Humane Economist, "Biography of Wilhelm Röpke (1899–1966): Humane Economist" (http://
www.mises.org/about/3241). Mises.org. Retrieved 2009-08-18.
• Vickers, Rhiannon. Manipulating Hegemony: State Power, Labour and the Marshall Plan in Britain (2000)
online edition (http://www.questia.com/library/book/
manipulating-hegemony-state-power-labour-and-the-marshall-plan-in-britain-by-rhiannon-vickers-andrew-gamble.
jsp)
Marshall Plan
• Wallich, Henry Christopher. Mainsprings of the German Revival (1955)
• Wasser, Solidelle F. and Dolfman, Michael L., "BLS and the Marshall Plan: The Forgotten Story: The Statistical
Technical Assistance of BLS Increased Productive Efficiency and Labor Productivity in Western European
Industry after World War II; Technological Literature Surveys and Plan-Organized Plant Visits Supplemented
Instruction in Statistical Measurement", Monthly Labor Review, Vol. 128, 2005
• Wend, Henry Burke. Recovery and Restoration: U.S. Foreign Policy and the Politics of Reconstruction of West
Germany's Shipbuilding Industry, 1945–1955 (2001) online version (http://www.worldcat.org/oclc/44728190)
• Zmirak, John, Wilhelm Röpke: Swiss Localist, Global Economist (ISI Books, 2001)
External links
•
•
•
•
George C. Marshall Foundation (http://www.marshallfoundation.org)
The German Marshall Fund of the United States (http://www.gmfus.org)
The Marshal Plan documents collection at MCE (http://www.ena.lu?lang=2&doc=261)
Marshall Plan from the National Archives (http://www.archives.gov/exhibits/featured_documents/
marshall_plan/index.html)
• Excerpts from book by Allen W. Dulles (http://www.spartacus.schoolnet.co.uk/USAmarshallP.htm)
• United States Secretary of State [[James F. Byrnes (http://usa.usembassy.de/etexts/ga4-460906.htm)] famous
Stuttgart speech, September 6, 1946] The speech marked the turning point away from the Morgenthau Plan
philosophy of economic dismantlement of Germany and towards a policy of economic reconstruction.
• Marshall Plan Commemorative Section: Lessons of the Plan: Looking Forward to the Next Century (http://www.
foreignaffairs.org/1928/3.html)
• U.S. Economic Policy Towards defeated countries (http://www.ndu.edu/library/ic1/L46-070.pdf) April,
1946.
• "Pas de Pagaille!" (http://www.time.com/time/archive/preview/0,10987,887417,00.html), Time magazine
July 28, 1947
• Luis García Berlanga's critique of the Marshall Plan in a classic Spanish film: Welcome Mr. Marshall!
• Marshall Plan Still Working, 60 Years Later (http://news.enquirer.com/apps/pbcs.dll/article?AID=/
20061210/EDIT02/612100471/-1/back01) Cincinnati Enquirer December 10, 2006
• Economist Tyler Cowen questions the conventional wisdom surrounding the Plan (http://www.gmu.edu/
centers/publicchoice/faculty pages/Tyler/Marshall_Plan.pdf)
• Truman Presidential Library online collection of original Marshal Plan documents from the year 1946 onwards
(http://www.trumanlibrary.org/whistlestop/study_collections/marshall/large/index.php)
• "The Marshall Plan as Tragedy", comment on Michael Cox and Caroline Kennedy-Pipe, "The Tragedy of
American Diplomacy? Rethinking the Marshall Plan", both published in the Journal of Cold War Studies, vol. 7,
no. 1 (Winter 2005) ( text of comment on pdf (http://www.polisci.ucla.edu/faculty/trachtenberg/cv/
jcws(marshall plan).pdf)) ( text of original article on pdf (http://www.polisci.ucla.edu/faculty/trachtenberg/
cv/jcws(marshall orig).pdf))
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Article Sources and Contributors
Article Sources and Contributors
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