by Benn Steil
The second effect is that promotion of economic recovery and rehabilitation in Europe, and later Japan, emerged as a central element of containment on the grounds that it would be far less costly than military readiness and engagement. These ideas had been already been brewing in 1945. At Potsdam, Stimson and McCloy had called for the creation of a “completely coordinated plan to be adopted for the economic rehabilitation of Europe as a whole.” Harriman, a Russia hawk after his war years dealing with the Kremlin, had urged massive European reconstruction aid to both FDR and Truman.30 But by 1947 the ideas were ready to take centerstage.
“Our resources are not unlimited,” Truman would state six months after ushering in his namesake doctrine. “We must apply them where they can serve most effectively to bring production, freedom, and confidence back to the world.” By the summer of 1948, Robert Lovett, who would succeed Acheson, would restate the Truman Doctrine with as much force as Truman had stated it over a year prior. “[T]he line must be drawn somewhere or the United States would find itself in the position of underwriting the security of the whole world. . . . We lack sufficient . . . resources simultaneously to finance the economic recovery of Europe, to furnish arms and equipment to [the] countries which request them, and to build up our own military strength.”31 Army Secretary Royall insisted he would need a 20 percent boost to the military budget if Congress voted down a European aid plan.32
Forrestal characterized American priorities in Europe as “economic stability, political stability and military stability . . . in about that order.” He even bluntly stated that the government was “keeping its military expenditures below the levels which our military leaders must in good conscience estimate as the minimum which would in themselves ensure national security.” U.S. defense expenditures had fallen from $83 billion in fiscal year 1945 to $42.7 billion in 1946 and $12.8 billion in 1947. Over that period, the armed forces of the United States had shrunk from 12 million to 1.6 million personnel. Military parsimony was allowing the government “to increase [its] expenditures to assist in European recovery.” It was, he concluded, “a calculated risk” that would offer “a prospect of eventually achieving national security.”33 For his part, Truman thought it was only common sense to “spend twenty or thirty billion dollars to keep the peace” over the coming four years than to spend multiples of that annually fighting a war.34
What made economic and financial aid such a radical alternative to a military buildup, however, was that the former had never been tried on such an enormous scale, and in such a critical diplomatic confrontation. The administration knew from experience how to prepare for, fight, and win wars, but it was basing its new economic strategy on informed supposition and conviction. Who could say what it took to resuscitate economies in war-ravaged countries run by weak and embattled governments?
Kennan, however, always emphasized that what the United States needed above all was a psychological advantage over the Soviet Union in the countries it targeted for assistance. Economic aid, he felt, was at least as much intended to revive a sense of purpose and self-reliance in recipient nations as it was to improve material conditions.
Though administration policy would be resolute in opposing communism it would not seek to impose an American orientation in return for assistance. But opposing communism could still be read as a hypocritical denial of choice. Acheson rationalized it: “I remember when it was accepted doctrine to say in the United States, ‘We don’t care if another country wants to be communist, that is all right, that is an internal matter, that is a matter for them to decide.’ It was only as we had more and more experience with communism that we learned it was not a doctrine which people picked up and looked over and either adopted or rejected. . . . They were being coerced.” Foreign coercion, however, did not imply that the United States itself needed to coerce. The conviction was widespread within the State Department that the ability of countries to resist Soviet pressure depended on their being “independent and self-confident centers of power” in their own right, and not wards of Washington.35
How, though, would the United States deal with governments that were communist but unallied with Moscow? This question would take on importance in the matter of Tito and communist Yugoslavia in 1948. Acheson would assert that it was in the “obvious interest” of the United States that “ ‘Titoism’ [be] an erosive and disintegrating force in [the] Sov[iet] sphere.” The administration’s East European chiefs of mission would conclude that “any and all movements within world communism which tend to weaken and disrupt the Kremlin’s control within the communist world represent forces which are operating in the interests of the West and therefore should be encouraged and assisted.” These statements made clear that it was Soviet influence, rather than communism as such, that the United States would oppose through the use of economic and political levers.36
ACHESON’S MOST PUBLIC ROLE IN defining the truman Doctrine came at the behest of the president. On April 7, 1947, Truman asked the under secretary for a “favor.” He had some time ago agreed, as a gesture to his wife’s friends in Mississippi, to speak on foreign affairs at the Delta State Teachers College. But with the state’s senior senator, Democrat Theodore Bilbo, fighting for reinstatement in the face of corruption charges, the president hoped to stay out of heated local politics. Marshall was unavailable as a substitute; Acheson was the hosts’ third choice.
Cleveland, Mississippi, may not have been a hub for major foreign policy addresses, but Churchill had shown the year prior, in Fulton, Missouri, that locality was no barrier to being heard nationally—or indeed, globally. Acheson was anxious for a forum in which he could, invoking Clayton’s word, help to “shock” the country into recognizing the economic crisis unfolding in Europe and America’s self-interest in reversing it. Deputizing for the president on May 8 was as good an opportunity as he was ever going to get.37
Before leaving Washington, Acheson briefed British newsmen Leonard Miall, Malcolm Muggeridge, and René MacColl over lunch, off the record, on the significance of what they would hear in Mississippi. His aim was to confront the growing fear in Britain and western Europe that the United States had become misguidedly transfixed on the continent’s southeast, blinded by the more overt military and political aspects of the conflicts there. Henry Wallace’s campaign against the Truman Doctrine was making this task harder and more urgent. Acheson needed to reassert the president’s broader message.
It had been Acheson’s idea for Truman’s congressional address to be global in scope but for his aid request to be limited to two countries: Greece and Turkey. Yet the drawbacks of this approach were by this time evident. “The President’s Doctrine of March 12 had been broad enough in conception to contain the floodwaters,” Jones noted, “but the specific project of aid to Greece and Turkey had sandbagged only a tributary to the main stream, which was now out of banks.” France, Italy, and Britain were themselves falling into dire circumstances. Reconstruction was “grinding to a halt.”38 Food was no longer reaching the cities from the country; factories were scrounging for vital raw materials. Gold and dollars with which to import essentials such as fuel were nearly evaporated. Strikes were spreading. Inflation was mounting. And as the Moscow foreign ministers conference slogged on through April, it became clear that the Soviets were going to be part of the problem, and not the solution.
The starched patrician Acheson was not the natural envoy to send out into the cotton fields and cattle pastures of Mississippi, yet he took to his assigned role ably. As he ambled out onto the hot, crowded college basketball court, listeners overflowing onto the grass outside, the under secretary removed his coat, rolled up his sleeves, and, using only notes he had scribbled onto the backs of his speech pages, looked directly into the sea of faces around him as he spoke. This contrivance lent his address the desired impromptu air, though he had memorized and barely deviated from the prepared text, conscious as he was of having a much wider audience.
Acheson began by tying the rapid
ly deteriorating economic situation in Europe to “elementals” that were well understood “in this rich agricultural region” of the American heartland. “[H]ow short,” he said, “is the distance from food and fuel to peace or to anarchy.” With “factories destroyed, fields impoverished and without fertilizer or machinery to get them back in shape, transportation systems wrecked, populations scattered and on the borderline of starvation, and long-established business and trading connections disrupted,” Europe was in danger. And “the lack of a peace settlement”—particularly as regards Germany, the great “workshop of Europe”—was holding back vital reconstruction. With Europe short on material and monetary resources to import even the most basic provisions essential to survival and rebuilding, American assistance efforts had been “only in part suggested by humanitarianism.” They were “a matter of national self-interest. For . . . until the various countries of the world get on their feet and become self-supporting there can be no political or economic stability in the world and no lasting peace or prosperity for any of us.” Hopeless and hungry people, Acheson warned, “often resort to desperate measures.” The United States government therefore needed the authority and resources to act forcefully and expeditiously.
Acheson spelled out how large the gap would be in the coming years between Europe’s basic needs and its capacity to pay in dollars or gold. He then shepherded his listeners to the inevitable conclusion that they would have to accept more goods from abroad, and to make sacrifices in consumption at home, to ensure that the country could supply Europeans with items necessary “to maintain their physical strength and . . . carry on essential measures of reconstruction.”
Furthermore, the United States needed to take “whatever action is possible immediately, even without full Four Power agreement, to effect a larger measure of European, including German, recovery.” This was code for saying that Soviet objections would not impede American action. “European recovery,” he insisted, “cannot await ‘compromise through exhaustion,’ ” and recovery could not take hold “until the various parts of Europe’s economy are working together in a harmonious whole.” A “coordinated European economy” was therefore “a fundamental objective of our foreign policy.”
Using American economic might to support “human dignity, human freedom, and democratic institutions,” he said in closing, is “necessary if we are to preserve our freedoms and our own democratic institutions. It is necessary for our national security. And it is our duty and our privilege as human beings.”39
The applause from the assembled was “standing, generous, and polite,” though it is doubtful that many understood the importance the administration vested in the speech.40 Truman later referred to it as “the prologue to the Marshall Plan.” Indeed, Acheson developed several of its essential elements here for the first time. In particular, the idea that Europe, or at least the western part of it, needed to work as “a harmonious whole” was consequential. To that point, reconstruction efforts, such as they were, were uncoordinated and almost entirely national in scope. Acheson’s emphasis on German industrial recovery was also a stark repudiation of the Morgenthau Plan.41
Soon after the speech, the Times’ James Reston, one of Acheson’s favored newsmen, asked the under secretary to clarify whether his speech represented “new policy” or just “kite flying.” Acheson told him confidently to “ask the president”—which he did.
“Yes,” Truman responded. The under secretary spoke for him.
ALARMED BY ACHESON’S SPEECH, VANDENBERG demanded to see Marshall and the president. How could Acheson, he asked, call for a massive new foreign aid progam?
Marshall assured him that no new request for aid money would be forthcoming during the current session of Congress. But he wasn’t going to lie. An aid bill would be coming his way in due course.
This was not what the senator wanted to hear. He spoke regularly of “bipartisan foreign policy” as something precious and fragile,42 and he expected the president to do his part to keep it alive. “Harry,” he said to Truman, “I want you to understand from now on that I’m not going to help you with crash landings unless I’m in on the takeoff.” The two former Senate colleagues, who had never been close, would thereafter form a powerful political bond. Without it, the coming historic repositioning of U.S. foreign policy would not have been possible.
Born forty-seven days apart in 1884, sixty-three-year-old Vandenberg and Truman came from similar modest Midwestern backgrounds. Both saw their fathers’ finances ruined at a young age, obliging them to work hard to keep their families fed. They were smart and loved words, but in different ways—Truman reading them, Vandenberg writing and speaking them. Truman boasted of reading all three thousand books in the local library by the age of fourteen. Vandenberg was vice president of his high school literary society, winning the silver prize in the Michigan State Oratorical Contest.43 Truman took no interest in writing or reciting.
Their political careers followed different paths. Vandenberg, always passionate about foreign affairs, was a full-throated isolationist through the 1930s, right up until December 1941. He supported the Neutrality Acts prior to the war and opposed Lend-Lease aid to Britain after it broke out. “We have tossed Washington’s Farewell Address into the discard,” he wrote in March 1941, after the aid bill passed the Senate. “We have thrown ourselves squarely into the power politics and the power wars of Europe, Asia and Africa. We have taken the first step upon a course from which we can never hereafter retreat.”44 But everything changed in December. “My convictions regarding international cooperation and collective security for peace,” he later wrote, “took firm form on the afternoon of the Pearl Harbor attack. That day ended isolationism for any realist.”45
Truman, in contrast, never experienced an epiphany in worldview. His passion in the Senate was rooting out domestic corruption. Having been a compromise candidate for the vice presidency, he was hurled onto the front lines of foreign affairs after FDR’s death, just months after reluctantly assuming the job. But he was a quick learner. And though legend would label him decisive, it is perhaps more accurate to say he did not second-guess himself after deciding.46 He hated the job of president, but carried it out without regret or doubling back.
Vandenberg had coveted the presidency for years. FDR introduced him to Britain’s King George VI in 1939 saying, unsmilingly, “Here’s a chap who thinks he’s going to succeed me in the White House; but he isn’t.” Though he had enormous policy differences with FDR, particularly over what he saw as the president’s coddling of the belligerent Soviet government, Vandenberg still admired him as a “gallant soul” and “a superb example of personal courage.”47 Truman had no more in common with Vandenberg temperamentally than did FDR, yet there was a complementarity—an absence of clashing egos—that allowed them to work together with ease. The country would be fortunate in the pairing.
KENNAN PRODUCED AN IMPORTANT MEMO for Acheson on may 16, 1947, a dry run for the Policy Planning Staff paper (PPS/1) requested by Marshall. He began by paying obeisance to the “high quality and value” of the SWNCC work on European recovery, before delicately indicating that he would be making suggestions “which will affect the assumptions and points of departure on which the [SWNCC] is proceeding.” Kennan then laid out the principles on which his staff was working, creating a shining contrast with the verbose jumble emanating from the SWNCC.
A four- to five-year “schedule of American aid,” Kennan said, would supplement “a program of intramural economic collaboration among the western European countries.” (Walter Lippmann, when visiting Kennan at the War College in April, had suggested inviting the Europeans to draw up such a plan, and this may have had some influence on Kennan’s thinking.)48 Notably, no mention was made, in contrast to the SWNCC report, of any “requirement” for trade with eastern Europe; participation would merely be left open for “states within the Russian orbit,” which would first have to “guarantee that their participation will be constructive.” A
s for the Western countries, no aid could be forthcoming without “guarantees [that] preclude communist sabotage or misuse.” Western Europe as an organized political and economic construct was here taking shape, its boundaries marked by willingness and ability to participate in an American-led recovery program, its outlook marked by resistance to Communism.
Foreshadowing the emergence of a new West German state, Kennan said that occupation policies in Germany would have to be altered to ensure that the western zone made “the maximum contribution to the economic restoration of western Europe.” The French, he argued, would have to be forced to accept a revitalized Germany and the British to accept an integrated western Europe. Outside of such a new construct, Britain “would appear to have no future,” and the United States would have to consider “abandoning her strategically and politically.”49 This refrain would be replayed by American observers of Britain’s testy relationship with the European continent repeatedly over the coming decades.
Equally notable was Kennan’s insistence that the administration “be careful not to talk in terms of loans when there is no plausible prospect of repayment.” Assistance needed to take the form of “outright grants.” This was a further slap at Morgenthau’s legacy: loans to bankrupt Britain to tide it through a postwar transition, and loans to Allied nations through a new IMF to restart global trade—loans that in theory cost America nothing, and in practice achieved nothing. It was time for the U.S. government, in Kennan’s rendering, to level with the American heartland, speaking frankly about the requirements for peace and prosperity. It would need to articulate what forms of engagement were required and what it would cost.