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149-555: The Mutual Security Act also abolished the Economic Cooperation Administration, which had managed the Marshall Plan and transferred its functions to the newly established Mutual Security Agency (MSA). The Agency was established and continued by acts of October 10, 1951 (65 Stat. 373) and June 20, 1952 (66 Stat. 141) to provide military, economic, and technical assistance to friendly nations in

298-802: A "stable and productive Germany" and were soon followed by the Marshall Plan . When the Morgenthau Plan was published by the US press in September 1944, it was immediately seized upon by the Nazi German government and used as part of propaganda efforts in the final seven months of the war in Europe that aimed to convince Germans to fight on. The original memorandum, written some time between January and early September 1944, signed by Morgenthau, and headed "Suggested Post-Surrender Program for Germany",

447-773: 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. 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

596-590: A change of policy was required. After lobbying by the Joint Chiefs of Staff , and Generals Clay and Marshall , the Truman administration realized that economic recovery in Europe could not go forward without the reconstruction of the German industrial base on which it had previously been dependent. In July 1947, President Truman rescinded on "national security grounds" the punitive JCS 1067, which had directed

745-640: A concern was the Czechoslovak eagerness to accept the aid, as well as indications of a similar Polish attitude. Soviet Foreign Minister Vyacheslav Molotov left Paris, rejecting the plan. After that, 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. The Soviets blamed

894-474: A consequence of the Potsdam Conference , the occupation forces of all nations were obliged to ensure that German standards of living could not exceed the average level of European neighbors with which it had been at war, France in particular. Germany was to be reduced to the standard of life it had known in 1932. The first "level of industry" plan, signed in 1946, stated that German heavy industry

1043-435: A day for one year to 300 million people. Especially damaged was transportation infrastructure, as railways, bridges, and docks had been specifically targeted by airstrikes, while much merchant shipping had been sunk. Although most small towns and villages 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

1192-699: A detailed recommendation for the reconstruction of post-war Germany and served as a basis for the Marshall Plan. The initiative was named after United States Secretary of State George C. Marshall . The plan had bipartisan support in Washington, where the Republicans controlled Congress and the Democrats controlled the White House with Harry S. Truman as president. Some businessmen feared

1341-455: A few Nazis are responsible. That unfortunately is not based on fact. The German people must have it driven home to them that the whole nation has been engaged in a lawless conspiracy against the decencies of modern civilization. A new document was drafted, the Joint Chiefs of Staff directive 1067 (JCS 1067), which directed the US forces of occupation in Germany to "take no steps looking toward

1490-450: 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. Congress, under the control of conservative Republicans, agreed to the program for multiple reasons. The 20-member conservative isolationist Senate wing of the party, based in the rural Midwest and led by Senator Kenneth S. Wherry (R-Nebraska),

1639-587: A government's war debts (as in Great Britain); and the payments of the goods in local currencies helped to limit inflation by taking these funds temporarily out of circulation while they were held in the Special Accounts. Morgenthau Plan The Morgenthau Plan was a proposal to weaken Germany following World War II by eliminating its arms industry and removing or destroying other key industries basic to military strength. This included

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1788-587: A just and honorable peace but—even worse—has actively sought to prevent it. Members of the Republican-controlled 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 ,

1937-561: A larger meeting was convened in Paris. Every country in Europe was invited, with the exceptions of Spain (a World War II neutral that had sympathized with the 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

2086-511: A number of deliberate loopholes, limiting any action to short-term military measures and preventing large-scale destruction of mines and industrial plants, giving wide-ranging discretion to the military governor and Morgenthau's opponents at the War Department. An investigation by Herbert Hoover concluded the plan was unworkable, and would result in up to 25 million Germans dying from starvation. From 1947, US policies aimed at restoring

2235-530: A number of matters, including a plan for Germany, based on Morgenthau's original proposal. The memorandum drafted by Churchill provided for "eliminating the warmaking industries in the Ruhr and the Saar ... looking forward to converting Germany into a country primarily agricultural and pastoral in its character". However, it no longer included a plan to partition the country into several independent states. This memorandum

2384-561: A personal conviction that Germany must be treated harshly. In an August 26, 1944, letter to Queen Wilhelmina of the Netherlands , Roosevelt wrote that "There are two schools of thought, those who would be altruistic in regard to the Germans, hoping by loving kindness to make them Christians again   and those who would adopt a much 'tougher' attitude. Most decidedly I belong to the latter school, for though I am not bloodthirsty, I want

2533-455: A proposal than a plan, it was a challenge to European leaders to cooperate and coordinate. It asked Europeans to create their own plan for rebuilding Europe, indicating 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

2682-636: A quick European response to (and acceptance of) the offer, which led to the creation of the Committee of European Economic Co-operation . 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 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

2831-544: A sense of hope and self-reliance. 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. 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. A common American interpretation of

2980-501: A standing NATO force further antagonized congressional conservatives and exacerbated their fears that European nations were not doing enough for their own defense. Congress thus reduced the administration's request for Mutual Security funds by 15 percent and authorized $ 5.998 billion and $ 1.486 billion, respectively, for military and economic assistance. The deepest cuts were in economic aid, thus ensuring its subordination to military assistance as "defense support." The Mutual Security Act

3129-526: A strategic partner, and in exchange, the Federal government would purchase stock in the US businesses to reimburse them. In this way, Europe would receive the aid it needed, American businesses would receive capital investment, and the federal government would make a profit when the stock was sold. British Foreign Secretary Ernest Bevin heard Marshall's radio broadcast speech and immediately contacted French Foreign Minister Georges Bidault to begin preparing

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3278-639: Is also referred to as the Morgenthau Plan. The fact that Morgenthau was able to present his plans in Quebec despite the great resistance within the US government is precisely due to Hull's poor health. In fact, Roosevelt had asked Hull to accompany him to Quebec, but he was unable to do so for health reasons. It was only at the last minute, when the conference was on, that Roosevelt asked Morgenthau to follow him to Quebec. Ultimately, Roosevelt's motivations for agreeing to Morgenthau's proposal may be attributed to his desire to be on good terms with Joseph Stalin and to

3427-631: Is counted separately from the Marshall Plan. The Marshall Plan was replaced by the Mutual Security Plan at the end of 1951; that new plan gave away about $ 7.5 billion annually until 1961 when it was replaced by another program. 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, reducing artificial trade barriers, and instilling

3576-401: 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

3725-462: Is preserved at the Franklin D. Roosevelt Presidential Library and Museum . According to Morgenthau's son, senior U.S. Treasury Department official and alleged Soviet spy Harry Dexter White was influential in drafting the memorandum. The main provisions can be summarized as follows: It is anticipated that the stripping of this area would be accomplished in three stages: The Morgenthau Plan, in

3874-653: The Neue Zürcher Zeitung . So far, the Allies have not offered the opposition any serious encouragement. On the contrary, they have again and again welded together the people and the Nazis by statements published, either out of indifference or with a purpose. To take a recent example, the Morgenthau plan gave Dr. Goebbels the best possible chance. He was able to prove to his countrymen, in black and white, that

4023-498: The Völkischer Beobachter stated, "Roosevelt and Churchill Agree to Jewish Murder Plan!" The Washington Post urged a stop to helping Dr. Goebbels: if the Germans suspect that nothing but complete destruction lies ahead, then they will fight on. Republican presidential candidate Thomas Dewey complained in his campaign that the plan had terrified the Germans into fanatical resistance: "Now they are fighting with

4172-695: The Axis or remained neutral . The largest recipient of Marshall Plan money was the United Kingdom (receiving about 26% of the total). The next highest contributions went to France (18%) and West Germany (11%). Some eighteen European countries received Plan benefits. Although offered participation, the Soviet Union refused Plan benefits and also blocked benefits to Eastern Bloc countries, such as Romania and Poland . The United States provided similar aid programs in Asia, but they were not part of

4321-603: 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 a relief to needy nations as an instrument of political pressure. Although all other communist European countries had deferred to Stalin and rejected

4470-509: The European Recovery Program , ERP ) was an American initiative enacted in 1948 to provide foreign aid to Western Europe . The United States transferred $ 13.3 billion (equivalent to $ 173.8 billion in 2024) in economic recovery programs to Western European economies after the end of World War II . Replacing an earlier proposal for a Morgenthau Plan , it operated for four years beginning on April 3, 1948, though in 1951,

4619-620: The Saarland and the Ruhr from Germany in order to remove much of the remaining industrial potential. As late as March 1947 there were still active plans to let France annex the Ruhr, noted by Charles P. Kindleberger of the United States Department of State , who said: "The Times' article and editorial on the breach in the U.S. ranks on the subject of the Ruhr were accurate, and the latter excellent. I have been disturbed over

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4768-492: The "Speech of hope", it set the tone of future US policy as it repudiated the Morgenthau Plan economic policies and with its message of change to a policy of economic reconstruction gave the Germans hope for the future. The most notable example of this change of policy was that the Marshall Plan was extended to West Germany , although in the form of loans instead of the free aid granted to other countries. It took over two months for General Clay to overcome continued resistance to

4917-643: The American and British proposals. During negotiations with the French and the British, Molotov received a ciphered telegram from Vyshinsky, Soviet Minister of Foreign Affairs. The official position of the Soviet Union, on Stalin's orders, had changed dramatically, and now Moscow's representatives in Paris were forcefully rejecting the Marshall Plan. Due to this change, Molotov rejected the counteroffer to scrap

5066-599: The American economy as well. Major newspapers were highly supportive, including such conservative outlets as Time magazine . Vandenberg made sure of bipartisan support on the Senate Foreign Relations Committee. The Solid Democratic South was highly supportive, the upper Midwest was dubious, but heavily outnumbered. The plan was opposed by conservatives in the rural Midwest, who opposed any major government spending program and were highly suspicious of Europeans. The plan also had some opponents on

5215-502: The Army of occupation. These people ensured that JCS 1067 was interpreted as strictly as possible. They were most active in the first crucial months of the occupation, but continued their activities for almost two years following the resignation of Morgenthau in mid-1945 and, some time later, also of their leader Colonel Bernard Bernstein , who was "the repository of the Morgenthau spirit in the army of occupation". The problems brought on by

5364-613: The British-American "Bizonia" and to include the Soviet zone within the newly constructed Germany. 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 solution to German economic problems. After the adjournment of the Moscow conference following six weeks of failed discussions with

5513-605: The Czechoslovakian and Polish delegations were prevented from attending the Paris meeting. The other Eastern Bloc states immediately rejected the offer. Finland also declined, 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,

5662-493: The East. The drop in food production can be attributed to a drought that killed a major portion of the wheat crop while a severe winter destroyed most of the wheat crop the following year. This caused most Europeans to rely on a 1,500-calorie-per-day diet. Furthermore, the large shipments of food stolen from occupied nations during the war no longer reached Germany. Industrial production fell more than half and reached pre-war levels at

5811-627: The Eastern Bloc, Truman asked Congress to restore a peacetime military draft and to swiftly pass the Economic Cooperation Act , the name given to the Marshall Plan. Of the Soviet Union Truman said, "The situation in the world today is not primarily the result of the natural difficulties which follow a great war. It is chiefly due to the fact that one nation has not only refused to cooperate in the establishment of

5960-486: The European economy and presented a rationale for US 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

6109-474: The European recovery in his address at Harvard University in June 1947. The purpose of the Marshall Plan was to aid in the economic recovery of nations after World War II and secure US geopolitical influence over Western Europe. To combat the effects of the Marshall Plan, the USSR developed its own economic recovery program, known as the Molotov Plan . However, the plan was said to have not worked as well due to

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6258-654: The Financing of Post-War Business and Industry in the United Kingdom and Republic of France." Crawford's thesis was read by future Supreme Court Justice Abe Fortas and presented to President Truman as the solution for Marshall's proposal. It was Crawford's thesis which provided the key to selling the Marshall Plan to Congress by laying out the idea of "strategic partnerships." Instead of the Federal government granting money directly to Europe, American businesses would provide technology, expertise, and materials to Europe as

6407-826: The Foreign Affairs Committee, noted that the Mutual Security Act was intended "not to fight a war" but "to prevent a war." The Mutual Security Act of 1951 was the successor to the Mutual Defense Assistance Act and the Economic Cooperation Act of 1949, which administered the Marshall plan. It became law on 10 October 1951, and created a new, independent agency, the Mutual Security Administration, to supervise all foreign aid programs including military assistance and economic programs that bolstered

6556-499: The German economy." The new plan JCS 1779 stated that "an orderly and prosperous Europe requires the economic contributions of a stable and productive Germany." 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. With a communist, although non-Soviet, insurgency threatening Greece, and Britain financially unable to continue its aid,

6705-475: The Germans to know that this time at least they have definitely lost the war". Churchill was not initially inclined to support the proposal, saying "England would be chained to a dead body". Roosevelt reminded Churchill of Stalin's comments at the Tehran Conference , and asked "Are you going to let Germany produce modern metal furniture? The manufacture of metal furniture can be quickly turned into

6854-519: The House, meeting resistance from fiscal conservatives along the way. Republicans were divided about the cost of the expenditures; nevertheless nearly half (80) joined the overwhelming majority of Democrats to pass the measure 260 to 101 on August 17. John M. Vorys of Ohio summed up GOP support for the measure, noting that military aid to "nations who will fight on our side" is "sound economy." Representative James P. Richards of South Carolina, chairman of

7003-572: The Kremlin from whom he received instructions, also castigated communist parties in France and Italy for collaboration with those countries' domestic agendas. 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. Party rules prevented Italian and French communist leaders from pointing out that it

7152-571: The Marshall Plan was largely replaced by the Mutual Security Act . The goals of the United States were to rebuild war-torn regions, remove trade barriers , modernize industry , improve European prosperity and prevent the spread of communism . The Marshall Plan proposed the reduction of interstate barriers and the economic integration of the European Continent while also encouraging an increase in productivity as well as

7301-616: The Marshall Plan, unsure whether reconstructing European economies and encouraging foreign competition was in the US' best interests. The plan was largely the creation of State Department officials, especially William L. Clayton and George F. Kennan , with help from the Brookings Institution , as requested by Senator Arthur Vandenberg , chairman of the United States Senate Committee on Foreign Relations . Marshall spoke of an urgent need to help

7450-507: The Marshall Plan. Its role in rapid recovery has been debated. The Marshall Plan's accounting reflects that aid accounted for about 3% of the combined national income of the recipient countries between 1948 and 1951, which means an increase in GDP growth of less than half a percent. Graham T. Allison states that "the Marshall Plan has become a favorite analogy for policy-makers. Yet few know much about it." Some new studies highlight not only

7599-468: The Marshall Plan. Italy and Belgium would follow by the end of 1948. In Germany in 1945–46 housing and food conditions were bad, as the disruption of transport, markets, and finances slowed a return to normality. In the West, the bombing had destroyed 5,000,000 houses and apartments, and 12,000,000 refugees from the east had crowded in. Food production was two-thirds of the pre-war level in 1946–48, while normal grain and meat shipments no longer arrived from

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7748-650: The Military Government of Germany" specified the Allied objective as being "to prevent Germany from ever again becoming a threat to the peace of the world", including, as an essential step, "the industrial disarmament and demilitarization of Germany". As Secretary of the Treasury , Morgenthau was initially not involved in the drafting of the plans for Germany. On a trip to Europe at the beginning of August, Harry Dexter White , his most trusted collaborator in

7897-549: The Morgenthau Plan set aside in Britain. Journalist Drew Pearson publicized the plan on 21 September 1944. Although Pearson himself was sympathetic to it, more critical stories in The New York Times and The Wall Street Journal quickly followed. Joseph Goebbels used the Morgenthau Plan in his propaganda . Goebbels said that "The Jew Morgenthau" wanted to make Germany into a giant potato patch. The headline of

8046-448: 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. The United Kingdom insisted on special status as a longstanding belligerent during the war, concerned that if it were treated equally with

8195-526: The President announced his Truman Doctrine on March 12, 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. Herbert Hoover noted that "The whole economy of Europe is interlinked with the German economy through the exchange of raw materials and manufactured goods. The productivity of Europe cannot be restored without

8344-474: The President. The lecture did not miss its aim. Morgenthau's explanations persuaded Roosevelt to write to Hull and Stimson that US occupation policy, which anticipated that "Germany is to be restored just as much as the Netherlands or Belgium ", was excessively lenient. A better policy would have the Germans "fed three times a day with soup from Army soup kitchens", so "they will remember that experience

8493-487: The Soviet Union called a meeting of nine European communist parties at the resort town of Szklarska Poręba in southwest Poland. 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". Communist parties were to struggle against

8642-548: 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. 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. 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

8791-414: The Soviets in their occupied zone. Molotov refrained from supplying accounts of Soviet assets. 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. After six weeks of negotiations, Molotov rejected all of

8940-408: The Soviets regarding a potential German reconstruction, the United States concluded that a solution could not wait any longer. To clarify the American position, a major address by Secretary of State George Marshall was planned. Marshall gave the address at Harvard University on June 5, 1947. He offered American aid to promote European recovery and reconstruction. The speech described the dysfunction of

9089-495: The Soviets was unlikely to get Congressional approval. Speaking at the Paris Peace Conference on October 10, 1946, Molotov had already stated Soviet fears: "If American capital was given a free hand in the small states ruined and enfeebled by the war [it] would buy up the local industries, appropriate the more attractive Romanian, Yugoslav ... enterprises and would become the master in these small states." While

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9238-465: The Soviets' ability to exercise influence in western Germany. Initially, Stalin maneuvered to kill the plan, or at least hamper it using destructive participation in the Paris talks regarding conditions. 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. Looming as just as large

9387-663: The Treasury Department, presented him the memorandum from the State Department . This memorandum left Morgenthau with the impression that the main aim was to rebuild Germany economically to such an extent that after a few years they would be able to pay reparations . For him, it came down to the supposition that after 10 years they would be ready to start World War III. After his return from Europe, Morgenthau informed Secretary of State Cordell Hull that he would immediately take care of Germany's affairs with

9536-531: The US forces of occupation in Germany to "take no steps looking toward the economic rehabilitation of Germany". It was replaced by JCS 1779, which instead stressed that "[a]n orderly, prosperous Europe requires the economic contributions of a stable and productive Germany". JCS 1067 had then been in effect for over two years. The change was heralded by Restatement of Policy on Germany , a famous speech by James F. Byrnes , then United States Secretary of State , held in Stuttgart on September 6, 1946. Also known as

9685-453: The US presence in Europe by any means necessary, including sabotage. The report further claimed that "reactionary imperialist elements throughout the world, particularly in the United States, 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". Referring to the Eastern Bloc, the report stated that "the Red Army's liberating role

9834-582: The US zone (although attempts had been made to get the other Allies to accept it). The occupation directive remained secret until October 17, 1945. It was made known to the public two months after the US had succeeded in incorporating much of it into the Potsdam Agreement . Morgenthau had been able to wield considerable influence over JCS 1067 and, like the Morgenthau Plan, intended to reduce German living standards . The production of oil , rubber , merchant ships, and aircraft were prohibited. Occupation forces were not to assist with economic development apart from

9983-437: The USSR particularly having been hit hard by the effects of World War II . The phrase "equivalent of the Marshall Plan" is often used to describe a proposed large-scale economic rescue program. The reconstruction plan, developed at a meeting of the participating European states, was drafted on June 5, 1947. It offered the same aid to the Soviet Union and its allies , but they refused to accept it, under Soviet pressure (as

10132-411: The United States and Canada. Most of Europe's economies were recovering slowly, as unemployment and food shortages led to strikes and unrest in several nations. Agricultural production was 83% of 1938 levels, industrial production was 88%, and exports 59%. Exceptions were the United Kingdom, the Netherlands and France, where by the end of 1947 production had already been restored to pre-war levels before

10281-410: The United States donated $ 17 billion (equivalent to $ 240.95 billion in 2023) in economic and technical assistance to help the recovery of the European countries that joined the Organisation for European Economic Co-operation . The $ 17 billion was in the context of a US GDP of $ 258 billion in 1948, and on top of $ 17 billion in American aid to Europe between the end of the war and the start of the plan that

10430-455: The United States for communist losses in elections in Belgium, France, and Italy months earlier, in the spring of 1947. It claimed that "marshallization" must be resisted and prevented by any means and that French and Italian communist parties were to make maximum efforts to sabotage the implementation of the plan. In addition, Western embassies in Moscow were isolated, with their personnel being denied contact with Soviet officials. On July 12,

10579-439: The United States, which was provided by the United Nations Relief and Rehabilitation Administration and other agencies. Food shortages were severe, especially in the harsh winter of 1946–47 . From July 1945 through June 1946, the United States shipped 16.5 million tons of food, primarily wheat, to Europe and Japan. It amounted to one-sixth of the American food supply and provided 35 trillion calories, enough to provide 400 calories

10728-496: The United States. 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 at Marshall's request and guidance by Charles Bohlen contained virtually no details and no numbers. More

10877-496: 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. 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

11026-471: The adoption of modern business procedures. The Marshall Plan aid was divided among the participant states roughly on a per capita basis. A larger amount was given to the major industrial powers, as the prevailing opinion was that their resuscitation was essential for the general European revival. Somewhat more aid per capita was also directed toward the Allied nations , with less for those that had been part of

11175-583: The agricultural sector. Ignoring the amendments to JCS 1067 that had been inserted by John J. McCloy of the War Department , Morgenthau told his staff that it was a big day for the Treasury, and that he hoped that "someone doesn't recognize it as the Morgenthau Plan". In occupied Germany, Morgenthau left a direct legacy through what in OMGUS commonly were called "Morgenthau boys". These were US Treasury officials whom Dwight D. Eisenhower had "loaned" to

11324-487: The aid, the Yugoslavs, led by Josip Broz (Tito), initially went along and rejected the Marshall Plan. However, in 1948 Tito broke decisively with Stalin on other issues. Yugoslavia requested American aid. American leaders were internally divided, but finally agreed and began sending money on a small scale in 1949 and on a much larger scale in 1950–53. The American aid was not part of the Marshall Plan. In late September,

11473-399: The arena in which the debate has been carried out. Clay and Draper claim that Germany will go communist shortly after any proposal to infringe on its sovereignty over the Ruhr is carried out." The Saar Protectorate , another important source of coal and industry for Germany, was likewise to be lost by the Germans. It was cut out from Germany and its resources put under French control. In 1955,

11622-399: The average kilocalorie intake per day in Germany was only 1,080, an amount insufficient for long-term health. Other sources state that the kilocalorie intake in those years varied between as low as 1,000 and 1,500. William Clayton reported to Dean Acheson in Washington on May 27, 1947: "Millions of people in the cities are slowly starving." The Western powers' worst fear by now was that

11771-493: The book was important to the survival of the American people and would help prevent World War III . A review by Orville Prescott on October 5, 1945, in the same newspaper concluded that the whole world would benefit if copies of the book reached the key US decisionmakers responsible for policy about Germany. In November 1945, General Dwight D. Eisenhower , the military governor of the US Occupation Zone , approved

11920-403: The city of Aachen had complained to him that the Morgenthau Plan was "worth thirty divisions to the Germans". Morgenthau refused to relent. On December 11, 1944, OSS operative William Donovan sent Roosevelt a telegraph message from Bern, warning him of the consequences that the knowledge of the Morgenthau plan had had on German resistance. The message was a translation of a recent article in

12069-438: The country could be rebuilt after Nazi rule. Above all, the American business elite, which was still closely intertwined with German companies during the war, was interested in getting back to business as soon as possible. Hull, on the other hand, was outraged by Morgenthau's "inconceivable intrusion" into foreign policy. Hull told Roosevelt that the plan would inspire last-ditch resistance and cost thousands of American lives. Hull

12218-551: The currency reform of 1948, Germany eventually made an impressive recovery, later known as the Wirtschaftswunder ("economic miracle"). 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 25% of the prewar production level. Steel plants thus made redundant were dismantled. Also as

12367-540: The defense capability of U.S. allies globally. Submitted on 24 May 1951, President Harry S. Truman 's omnibus foreign aid bill got a hostile reception on Capitol Hill. Rapid expansion of national security expenditures during the Korean War had produced alarm over high taxes, large deficits, government controls, and a possible "garrison state" among such prominent conservatives as Senator Robert A. Taft (R‐Ohio). Truman's decision to send U.S. troops to Europe as part of

12516-466: 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 plan themselves, but the administration also reminded the Europeans that implementation depended on

12665-434: The distribution of 1,000 free copies of the book to American military officials in occupied Germany. Historian Stephen Ambrose draws the conclusion that, despite Eisenhower's later claims that the act was not an endorsement of the Morgenthau plan, Eisenhower both approved of the plan and had previously given Morgenthau at least some of his ideas on how Germany should be treated. A Handbook for Military Government in Germany

12814-472: The dollar value of the goods in local currency ("counterparts") into so-called ERP Special Accounts that were set up at the country's central bank. This way of operation held three advantages: the provision of U.S. goods to Europe without European dollar payments helped to narrow the dollar gap that strangled European reconstruction; the accumulated funds could be used for investments in long-term reconstruction (as happened in France and Germany) or for paying off

12963-518: The drafting of the plans. Morgenthau now tried to achieve his objective in another way. In a meeting with Secretary of War Henry L. Stimson shortly thereafter, he suggested that a committee consisting of Stimson, Hull, and himself should meet to work out a memorandum for the upcoming conference in Quebec. In his next attempt at the President, he once again made clear that implementing the plan as it stood would have undesirable consequences. He also exclusively showed excerpts that he knew would displease

13112-422: The economic recovery of Europe was delayed." 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." In addition, the strength of Moscow-controlled communist parties in France and Italy worried Washington. In

13261-446: The economic rehabilitation of Germany [nor steps] designed to maintain or strengthen the German economy". It was also ordered that starvation, disease and civil unrest were to be kept below such levels where they would pose a danger to the troops of occupation. The directive was approved by President Truman on May 10, 1945, then formally issued to Eisenhower, and was the basis for US occupation policy until July 1947. It applied only to

13410-470: The economy on a continental level—that is, it stimulated the total political reconstruction of Western Europe. 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,

13559-503: The end of 1949. While Germany struggled to recover from the destruction of the War, the recovery effort began in June 1948, moving on from emergency relief. The currency reform in 1948 was headed by the military government and helped Germany to restore stability by encouraging production. The reform revalued old currency and deposits and introduced a new currency. Taxes were also reduced and Germany prepared to remove economic barriers. During

13708-402: The enemy planned the enslavement of Germany. The conviction that Germany had nothing to expect from defeat but oppression and exploitation still prevails, and that accounts for the fact that the Germans continue to fight. It is not a question of a regime, but of the homeland itself, and to save that, every German is bound to obey the call, whether he be Nazi or member of the opposition. Following

13857-944: The execution of these types of policies were eventually apparent to most US officials in Germany. Germany had long been the industrial giant of Europe, and its poverty held back the general European recovery. The continued scarcity in Germany also led to considerable expenses for the occupying powers, which were obligated to try to make up the most important shortfalls through the GARIOA (Government and Relief in Occupied Areas) program. General Lucius D. Clay , US High Commissioner, later wrote in his 1950 book Decision in Germany , "It seemed obvious to us even then that Germany would starve unless it could produce for export and that immediate steps would have to be taken to revive industrial production". Lewis Douglas , chief adviser to General Clay, denounced JCS Directive 1067 saying, "This thing

14006-491: The expected consequences: There are several illusions in all this "war potential" attitude. There is the illusion that the New Germany left after the annexations [of the Saar and Ruhr] can be reduced to a "pastoral state". It cannot be done unless we exterminate or move 25,000,000 people out of it. This would approximately reduce Germany to the density of the population of France. According to Alan S. Milward, in 1946–1947

14155-472: The first three years of occupation of Germany, the Allied occupational authorities vigorously pursued a military disarmament program in Germany , partly by removal of equipment but mainly through an import embargo on raw materials, part of the Morgenthau Plan approved by President Franklin D. Roosevelt . Historian Nicholas Balabkins concluded that "as long as German industrial capacity was kept idle

14304-587: The following words: "I appreciate the fact that this isn't my responsibility, but I'm doing this as an American citizen, and I'm going to continue to do so, and I'm going to stick my nose into it until I know it is all right." He right away informed the President of his observations and the dangers he saw in the existing memorandum drawn up by Hull. The President showed increased interest in what had been accomplished, but despite all of Morgenthau's hopes, Roosevelt initially did not officially invite him to take part in

14453-441: The form of the Soviet Union's offer of a lucrative trade agreement lasting for five years, a grant amounting to the approximate equivalent of $ 450 million (in 1948; the sum would have been $ 4.4 billion in 2014 ) in the form of long-term credit and loans and the provision of 200,000 tonnes of grain, heavy and manufacturing machinery and factories and heavy industries to Poland. The Marshall Plan participants were not surprised when

14602-406: The four years of the plan. Congress reflected public opinion, which resonated with the ideological argument that communism flourishes in poverty. Across America, multiple interest groups, including business, labor, farming, philanthropy, ethnic groups, and religious groups, saw the Marshall Plan as an inexpensive solution to a massive problem, noting it would also help American exports and stimulate

14751-401: The frenzy of despair." General George Marshall complained to Morgenthau that German resistance had strengthened. Hoping to get Morgenthau to relent on his plan for Germany, President Roosevelt's son-in-law Lt. Colonel John Boettiger, who worked in the War Department , explained to Morgenthau how the American troops who had to fight for five weeks against fierce German resistance to capture

14900-517: The gigantic sums of money would be handled efficiently. Turning the plan into reality required negotiations among the participating nations. 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 level of might. The Benelux countries (Belgium, Netherlands, and Luxembourg), despite also suffering under

15049-580: The headings of "pastoral state" and "war potential". The original of these policies apparently expressed on September 15, 1944, at Quebec, aimed at: "converting Germany into a country principally agricultural and pastoral," and included, "the industries of the Ruhr and the Saar would therefore be put out of action, closed down..." (quotation marks from original source) All armaments plants, including some that could have been converted to civilian operation, were dismantled or destroyed. A large proportion of operational civilian plants were dismantled and transported to

15198-576: The interest of international peace and security, but was abolished by Reorganization Plan No. 7 of 1953, effective August 1, 1953, and its functions were transferred to the Foreign Operations Administration . The act however, was extended by appropriators each fiscal year until the early 1960s. As the Marshall Plan was ending, Congress was in the process of piecing together a new foreign aid proposal designed to unite military and economic programs with technical assistance. In

15347-576: The left, led by Henry A. Wallace , the former vice president. He said the plan was hostile to the Soviet Union, a subsidy for American exporters, and sure to polarize the world between East and West. However, opposition against the Marshall Plan was greatly reduced by the shock of the communist coup in Czechoslovakia in February 1948. The appointment of the prominent businessman Paul G. Hoffman as director reassured conservative businessmen that

15496-469: The manufacture of armament." The meeting broke up on Churchill's disagreement but Roosevelt suggested that Morgenthau and White continue to discuss with Lord Cherwell , Churchill's personal assistant. Lord Cherwell has been described as having "an almost pathological hatred for Nazi Germany, and an almost medieval desire for revenge was a part of his character". Morgenthau is quoted as saying to his staff that "I can't overemphasize how helpful Lord Cherwell

15645-416: The most evident signs and reflections of tight Soviet control and domination over the region, Jan Masaryk , the foreign minister of Czechoslovakia, was summoned to Moscow and berated by Stalin for considering Czechoslovakia's possible involvement with and joining of the Marshall Plan. The prime minister of Poland, Józef Cyrankiewicz , was rewarded by Stalin for his country's rejection of the plan which came in

15794-673: The negative public reaction to the publishing of the Morgenthau plan, President Roosevelt disowned it, saying "About this pastoral, agricultural Germany, that is just nonsense. I have not approved anything like that. I am sure I have not. ... I have no recollection of this at all". According to Stimson, the President said that he just wanted to help Britain get a share of the Ruhr and denied that he intended to fully deindustrialize Germany. Stimson replied, "Mr. President, I don't like you to dissemble to me" and read back to Roosevelt what he had signed. Struck by this, Roosevelt said he had "no idea how he could have initialed this". The theory that Roosevelt

15943-477: The new directive JCS 1779, but on July 10, 1947, it was approved at a meeting of the SWNCC (State-War-Navy Coordinating Committee). The final version of the document "was purged of the most important elements of the Morgenthau plan". The "Morgenthau boys" resigned en masse when JCS 1779 was approved, but before they went, the Morgenthau followers in the decartelization division of OMGUS accomplished one last task in

16092-425: The one hand, and the anti-imperialist and democratic camp on the other". 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. The meeting's chair, Andrei Zhdanov, who was in permanent radio contact with

16241-475: The operation of displaced persons camps in Europe in 1947; many of its functions were transferred to several UN agencies. 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

16390-681: The place of the heavy industrial products which formed most of Germany's pre-war exports. By February 28, 1947, it was estimated that 4,160,000 German former prisoners of war, by General Dwight D. Eisenhower relabeled as Disarmed Enemy Forces in order to negate the Geneva Convention , were used as forced labor by the various Allied countries to work in camps outside Germany: 3,000,000 in Russia, 750,000 in France, 400,000 in Britain, and 10,000 in Belgium. Meanwhile, in Germany large parts of

16539-399: 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. 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. Agreement

16688-419: The plan, and thus be pulled out of the emerging Soviet bloc, but that did not happen. In January 1947, Truman appointed retired General George Marshall as Secretary of State. In July 1947 Marshall scrapped Joint Chiefs of Staff Directive 1067 , which was based on the Morgenthau Plan which had decreed "take no steps looking toward the economic rehabilitation of Germany [or] designed to maintain or strengthen

16837-465: The population were starving at a time when, according to a study done by former US President Herbert Hoover , the nutritional condition in countries in Western Europe was nearly pre-war normal. German prisoners engaged in dangerous tasks, such as clearing mine fields. A draft report from The President's Economic Mission to Germany and Austria stated: there have been general policies of destruction or limitation of possible peaceful productivity under

16986-455: The poverty and hunger would drive the Germans to Communism . General Lucius Clay stated "There is no choice between being a communist on 1,500 calories a day and a believer in democracy on a thousand". In view of the continued poverty and famine in Europe, and with the onset of the Cold War which made it important not to lose all of Germany to the communists , it was apparent by 1947 that

17135-439: The program he had initialed". In October 1945, Harper and Brother published Morgenthau's book Germany is Our Problem , where Morgenthau described his plan and the rationale for it in greater detail. President Franklin D. Roosevelt had granted permission for the publication of the book the evening before his death, when dining with Morgenthau at Warm Springs . A review in The New York Times on October 7, 1945, felt that

17284-404: The program's role in European recovery was expressed by Paul Hoffman, head of the Economic Cooperation Administration, in 1949 when he told Congress Marshall aid had provided the "critical margin" on which other investment needed for European recovery depended. The Marshall Plan was one of the first elements of European integration , as it erased trade barriers and set up institutions to coordinate

17433-565: The removal or destruction of all industrial plants and equipment in the Ruhr . It was first proposed by United States Secretary of the Treasury Henry Morgenthau Jr. in a 1944 memorandum entitled Suggested Post-Surrender Program for Germany . While the Morgenthau Plan had some influence until July 10, 1947 (adoption of JCS 1779) on Allied planning for the occupation of Germany, it was not adopted. US occupation policies aimed at "industrial disarmament", but contained

17582-425: The rest of their lives". In addition, Roosevelt officially set up a committee consisting of Morgenthau, Stimson, and Hull to deal with the future of Germany. However, due to serious disagreement, the committee was unable to draw up a collaborative memorandum. Morgenthau on one side was drafting plans for how Germany could be ruined industrially, while other parts of the US government were already forging plans for how

17731-464: The restoration of Germany as a contributor to that productivity." 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." In Washington, the Joint Chiefs declared that the "complete revival of German industry, particularly coal mining" was now of "primary importance" to American security. The United States

17880-462: The resumption of normal production, the raising of productivity, and the facilitating of intra-European trade. By the end of World War II, much of Europe was devastated. Sustained aerial bombardment during the war had badly damaged most major cities, and industrial facilities were especially hard-hit. Millions of refugees were in temporary camps. The region's trade flows had been thoroughly disrupted; millions were in refugee camps living on aid from

18029-423: The role of economic cooperation but approach the Marshall Plan as a case concerning strategic thinking to face some typical challenges in policy, as problem definition, risk analysis, decision support to policy formulation, and program implementation. In 1947, two years after the end of the war, industrialist Lewis H. Brown wrote, at the request of General Lucius D. Clay , A Report on Germany , which served as

18178-474: 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 . In the audience at Harvard was International Law and Diplomacy graduate student Malcolm Crawford, who had just written his Master's thesis entitled "A Blueprint for

18327-647: 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 Organisation for European Economic Co-operation (later called the Organisation for Economic Co-operation and Development or OECD ), which

18476-532: The sense of the plan drafted by Morgenthau or the plan initialed by Roosevelt, was never implemented. Germany was not made "primarily agricultural and pastoral in its character". However, some commentators, such as Gareau, extend the term to mean "any postwar program designed to effect and preserve German disarmament by significantly reducing German industrial might". JCS-1067, the April 1945 "Directive to Commander-in-Chief of United States Forces of Occupation Regarding

18625-414: The spring of 1947: the destruction of the old German banking system. By breaking the relationships between German banks, they cut off the flow of credit between them, limiting them to short-term financing only, thus preventing the rehabilitation of German industry and with immediate adverse effects on the economy in the US occupation zone. With the change of occupation policy, most significantly thanks to

18774-542: The victorious nations, mainly France and Russia. As Germany was allowed neither airplane production nor any shipbuilding capacity to supply a merchant navy, all facilities of this type were destroyed over a period of several years. A typical example of this activity by the allies was the Blohm & Voss shipyard in Hamburg, where explosive demolition was still taking place as late as 1949. Everything that could not be dismantled

18923-488: The view of the State Department under President Harry S Truman , the United States needed to adopt a definite position on the world 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 Bloc nations would join

19072-460: The war had exhausted their treasuries in the process. 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 their economy. Much of the Marshall Plan aid would be used by the Europeans to buy manufactured goods and raw materials from

19221-477: The words of Secretary of State Dean Acheson , who testified before Congress, Western Europe needed assistance against Soviet "encroachment." The measure was intended to signal Washington's resolve to allies and to the Kremlin that the United States was capable of and committed to containing communism globally, even while it fought a protracted land war in Korea. The measure took about two months to work its way through

19370-613: Was Stalin who had directed them not to take opposition stances in 1944. The French communist party, like 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. When they asked Zhdanov if they should prepare for armed revolt when they returned home, he did not answer. In

19519-441: 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. The United Nations also launched a series of humanitarian and relief efforts almost wholly funded by

19668-589: Was assembled by economic idiots. It makes no sense to forbid the most skilled workers in Europe from producing as much as they can in a continent that is desperately short of everything". Douglas went to Washington in the hopes of having the directive revised but was unable to do so. However, American policy slowly drifted away from "industrial disarmament". Herbert Hoover 's situation reports from 1947, and " A Report on Germany " also served to help change occupation policy, among other things through speaking frankly of

19817-414: Was because he could advise how to handle Churchill". In any case, Cherwell was able to persuade Churchill to change his mind. Churchill later said that "At first I was violently opposed to the idea. But the President and Mr. Morgenthau from whom we had much to ask   were so insistent that in the end we agreed to consider it". Some have read into the clause "from whom we had much to ask" that Churchill

19966-406: Was being drawn for a population of 66,500,000. On that basis, he said, the nation will need large imports of food and raw materials to maintain a minimum standard of living. General agreement, he continued, had been reached on the types of German exports – coal , coke , electrical equipment, leather goods, beer , wines , spirits, toys, musical instruments, textiles and apparel – to take

20115-516: Was blown up or otherwise destroyed. A small-scale attempt to revive the company in 1948 ended with the owners and a number of employees being thrown in jail by the British. It was not until 1953 that the situation gradually started to improve for Blohm & Voss, thanks in part to repeated pleas by German Chancellor Konrad Adenauer to the Allied High Commissioners. Early US plans for "industrial disarmament" included detaching

20264-580: Was bought off, and note a September 15 memo from Roosevelt to Hull stating that "Morgenthau has presented at Quebec, in conjunction with his plan for Germany, a proposal of credits to Britain totalling six and half billion dollars". Hull's comment on this was that "this might suggest to some the quid pro quo with which the Secretary of the Treasury was able to get Mr. Churchill's adherence to his cataclysmic plan for Germany". At Quebec, White made sure that Lord Cherwell understood that economic aid to Britain

20413-808: Was brought about by "the Morgenthau business". So it came about that the Cabinet Committee on Germany met with Roosevelt on September 6, 1944, and discussed three different memoranda prepared by the State, War, and Treasury Departments. At the Second Quebec Conference , a high-level military conference held in Quebec City , September 12–16, 1944, the British and United States governments, represented by Winston Churchill and Franklin D. Roosevelt respectively, reached agreement on

20562-430: Was complemented by an upsurge of the freedom-loving peoples' liberation struggle against the fascist predators and their hirelings." It argued that "the bosses of Wall Street" were "tak[ing] the place of Germany, Japan, and Italy". The Marshall Plan was described as "the American plan for the enslavement of Europe". It described the world now breaking down "into basically two camps—the imperialist and antidemocratic camp on

20711-414: Was dependent on British approval of the plan. During the signing of the plan, which coincided with the signing of a loan agreement, President Roosevelt proposed that they sign the plan first. This prompted Churchill to exclaim: "What do you want me to do? Get on my hind legs and beg like Fala ?" Anthony Eden expressed his strong opposition to the plan and, with the support of some others, was able to get

20860-498: Was eventually reached, and the Europeans sent a reconstruction plan to Washington, which was formulated and agreed upon by the Committee of European Economic Co-operation in 1947. In the document, the Europeans asked for $ 22 billion in aid. Truman cut this to $ 17 billion in the bill he put to Congress. On March 17, 1948, Truman addressed European security and condemned the Soviet Union before a hastily convened Joint Session of Congress . Attempting to contain spreading Soviet influence in

21009-482: Was headed by Frenchman Robert Marjolin . According to Armin Grünbacher: The U.S. government did not give money directly to the participating countries so that they could buy whatever they thought they needed. Instead the U.S. delivered the goods and provided services, mainly transatlantic shipping, to the participating governments, which then sold the commodities to businesses and individuals who had to pay

21158-593: Was no certainty that the plan would succeed, but said it would halt economic chaos, sustain Western civilization, and stop further Soviet expansion. Senator Robert A. Taft (R-Ohio) hedged on the issue. He said it was without economic justification; however, it was "absolutely necessary" in "the world battle against communism." In the end, only 17 senators voted against it on March 13, 1948 A bill granting an initial $ 5 billion passed Congress with strong bipartisan support. Congress eventually allocated $ 12.4 billion in aid over

21307-402: Was not truly rejecting the plan is supported by later remarks by Eleanor Roosevelt , who stated that she never heard him disagree with the basics of the plan, and who believed that "the repercussions brought about by the press stories made him feel that it was wise to abandon any final solution at that time". However, other sources suggest that Roosevelt "had not realized the devastating nature of

21456-445: Was outmaneuvered by the emerging internationalist wing, led by Senator Arthur H. Vandenberg (R-Michigan). The opposition argued that it made no sense to oppose communism by supporting the socialist governments in Western Europe; and that American goods would reach Russia and increase its war potential. They called it "a wasteful 'operation rat-hole'" Vandenberg, assisted by Senator Henry Cabot Lodge Jr. (R-Massachusetts) admitted there

21605-521: Was ready in August 1944: it advocated a quick restoration of normal life for the German people and reconstruction of Germany. Henry Morgenthau Jr. brought it to the attention of President Franklin D. Roosevelt who, after reading it, rejected it with the words: Too many people here and in England hold the view that the German people as a whole are not responsible for what has taken place – that only

21754-639: Was renewed each year until 1961, and it annually produced struggles over the size of the foreign aid budget, and the balance between military and economic aid. The US foreign aid program was then reorganized under new Kennedy Administration legislation, with signing of the Foreign Assistance Act and Executive Order 10973 on 3 November 1961, which established the United States Agency for International Development (USAID). Marshall Plan The Marshall Plan (officially

21903-416: Was so upset over the plan that he suffered from insomnia and eating problems and was hospitalized. He said that nothing would be left to Germany but land, and only 60% of the Germans could live off the land, meaning 40% of the population would die. Stimson expressed his opposition even more forcefully to Roosevelt. Hull later resigned for health reasons, though there were anecdotal reports that his resignation

22052-401: Was the case for Finland's rejection) as doing so would allow a degree of US control over the communist economies. Secretary Marshall became convinced Stalin had no interest in helping restore economic health in Western Europe. President Harry Truman signed the Marshall Plan on April 3, 1948, granting $ 5 billion in aid to 16 European nations. During the four years that the plan was in effect,

22201-548: Was to be lowered to 50% of its 1938 levels by the closing of 1,500 manufacturing plants . On February 2, 1946, a dispatch from Berlin reported: Some progress has been made in converting Germany to an agricultural and light industry economy, said Brigadier General William H. Draper, Jr. , chief of the American Economics Division, who emphasized that there was general agreement on that plan. He explained that Germany's future industrial and economic pattern

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