Marshall Plan Announced
George Marshall proposed in a fifteen-minute commencement address at Harvard in June 1947 that the United States should pay to rebuild Europe. The situation he was addressing was worse than the war damage suggested. The winter of 1946 and 1947 had been the coldest in living memory, coal production had collapsed, food rationing in Britain was tighter than during the war, and the fundamental problem was a dollar shortage — Europe needed American machinery, grain and fuel and had nothing to sell that earned dollars. The speech offered aid to any European country that would participate, including the Soviet Union and its neighbours, on condition that the recipients jointly plan how it would be used. That condition was designed to be unacceptable to Moscow, which would have had to open its economy to inspection, and Molotov walked out of the Paris meeting; Czechoslovakia accepted and was made to withdraw. Sixteen countries participated, and some 13 billion dollars was disbursed between 1948 and 1952, about five per cent of American national income in a year. Most of it was grants rather than loans, and most of it was spent on American goods. The economic effect is argued about — European recovery was already beginning and the sums were small beside domestic investment — and the political effect is not. It tied western Europe's recovery to American purposes, forced the recipients to cooperate with each other, and is the ancestor of the institutions that became the European Union. Marshall himself was a soldier who had been army chief of staff through the war and who declined to write memoirs or take a commercial position afterwards. He is the only professional soldier to have won the Nobel Peace Prize, in 1953, for a speech he insisted was the work of his department.
- Year: 1947 CE
- Category: Economic
