The Marshall Plan

by Benn Steil

  The Truman administration organized grassroots campaigns to build awareness of the program and to explain to Americans how they could help. “The way Mother can have an effective hand in accomplishing this important part of the United States foreign policy,” Agriculture under secretary Norris Dodd told the Women’s National Democratic Club, “is to buy closely, figure out ways to make tasteful meals from the less choice but nonetheless nutritious foods, and put left-overs into tempting dishes instead of into the garbage can.”96 Marshall, speaking at the National Garden Conference, called on Americans to plant twenty million “freedom gardens” to supplement the aid program. Never in history, he said, had it been more important to raise as much food as possible. “And I don’t speak from a desk in the State Department,” he added. “I ordered my seeds and settings ten days ago.”97

  Spontaneous public initiatives sprang up to supplement the Marshall Plan. Responding to a suggestion from syndicated columnist Drew Pearson for a “Friendship Train” to travel the country collecting goods and food for Europe, restaurants, schools, and private societies such as the Kiwanis Club donated tons’ worth. Greeted by banners and parades as it passed through cities and towns—its 214 boxcars painted with slogans such as Vive la France! and Viva l’Italia!—the train arrived in New York on November 18.98 Following more fanfare, the supplies were then shipped to Europe on donated commercial liner space. The first shipments arrived one month later, on December 17, in Le Havre, France, at docks decorated in Stars and Stripes and the Tricolore.99 Dockworkers donating their time unloaded them, one week after they had been on strike against American imperialism.100

  As the belief took hold among the American public that the epic European aid initiative would soon become reality, grand new applications of its thinking began to emerge. In December, a group of economists from the American South, in collaboration with experts from various government departments, prepared a report for the House Agriculture Committee arguing that the South needed its own “Marshall Plan” to address endemic underdevelopment, rooted in a rutted agrarian economic system. It suggested that “the staggering sum of approximately 13.4 billion dollars [$145 billion in today’s money] is required for [technological] investment in the South during the next 20 years,” much of which would need to be federally funded.101 In February 1948, the American Society for the Prevention of Cruelty to Animals even demanded a Marshall Plan for Europe’s pets and strays.102 No problem of deprivation and suffering, it seemed, was too big, or too small, for a Marshall Plan.

  IF THE SPIRIT OF YALTA died in Paris in July 1947, it looked set to be buried in London in November. The four-power meeting had been on the calendar since April,103 but differences over Germany had hardened so much, and were of such consequence, that there seemed little left for the two sides to do but posture. Though the administration’s position was “not [to] admit having established a political structure” for western Germany, Ambassador Robert Murphy argued in October that they had to be ready to move forward with one after the conference broke down—as he expected it to do.104 The United States would inevitably be accused of splitting Germany, but that could not stand in the way.

  Marshall told the cabinet on November 6 that the Soviets would use “various ruses . . . to try to get us out of western Germany under arrangements which would leave that country defenseless against communist penetration,” but that the United States had to ensure the opposite: that Germany become “better integrated into Western Europe.”105

  Over in Moscow, Molotov prepped for the conference with a memorandum from Andrei Smirnov, head of the Foreign Ministry’s most important European department. Smirnov chronicled shifts in the western stance on Germany over the past eighteen months. Molotov, blue pencil in hand, underlined passages suggesting Allied guilt.

  The western position had “fundamentally changed.” In 1946, they wanted a settlement “quickly built on the basis of the Potsdam decisions.” By “the beginning of 1947,” however, they were seeking “a substitute for the peace settlement”—one that “relieved the German government . . . of the responsibility of carrying out the conditions.” Then, after the Moscow Council of Foreign Ministers conference in March, there was “further deviation from the Potsdam decisions”—efforts aimed at “a separate resolution of the German problem,” without the Soviet Union. The American position now “stood in complete opposition to that which Byrnes defended in . . . 1946.”

  Molotov thickly underlined “complete opposition,” adding in the lower margin: “Is that so?” And later: “Byrnes? What did he say?”

  “On May 29,” 1947, the memo continued, “the Anglo-American agreement on the creation of an ‘Economic Council’ was concluded, closing out the formulation of West Germany into a separate political unit.” And “on July 11, the U.S. government sent General Clay a new directive . . . at odds with the Potsdam decisions and . . . focused mainly on the attraction of West Germany to the implementation of the Marshall Plan.” Then, “from August 22 to 27, negotiations between the representatives of the U.S., UK and France, regarding the industrial production level for the Anglo-American zone of Germany, took place in London. Also addressed was the management of the Ruhr mines and control over them. As a result of these negotiations, the British and the Americans have created a new plan for the zone’s level of industrial production, overturning decisions made by the Allied Control Council in March 1946.”106

  Thus armed with a history of Allied betrayal since 1946, Molotov warily agreed to receive the French ambassador, Georges Catroux, for a discussion of German matters on November 5. Catroux, Molotov reported to Stalin, said he wanted to “try to move the Soviet and French position closer together.” In particular, he wished to explore what it might take for Moscow to come nearer “to the French view on international administration of the Ruhr.” The Frenchman stressed that “he was acting on his own initiative, without any sort of orders from his government.”

  Clay would have seen Catroux’s behavior as predictable Gallic duplicity; Molotov certainly did, but from the opposing lens. “The meeting with Catroux,” he told Stalin, “demonstrated that the Americans and the English are now trying to use the French to feel out our position on the German question.”107

  Molotov distrusted the British even more deeply than he did the French. When in London to negotiate an Anglo-Soviet treaty in May 1942, he surrounded himself with bodyguards and slept with a revolver by his bed.108 Now, back in London on November 25, 1947, Molotov entered the gilded salon of Lancaster House in a chary mood.

  The fifth meeting of the Council of Foreign Ministers opened precisely where the Moscow gathering had left off—in acrimony over Germany. Abandoning his usual poker face for an air of impatience, Molotov reprised Moscow’s familiar demands for $10 billion in reparations. Marshall, however, had even less room for manuever than in March. With Congress watching over his shoulder, any concession would threaten prospects for aid legislation. With the discussion thus deadlocked from the start, Bevin felt he had nothing to lose in a frank personal appeal. He invited Molotov to his flat on December 2.

  “When our government was trying to stamp out your Revolution,” Bevin asked him, “who was it that stopped it? It was I,” he said emphatically:

  I called out the transport workers and they refused to load the ships. . . . Now again I am speaking as a friend. . . . You are playing with fire, Mr. Molotov . . . if war comes between you and America in the West, then we shall be on America’s side. . . . That would be the end of Russia and of your Revolution. So please stop sticking out your neck in this way and tell me what you are after.

  “I want a unified Germany,” replied his stony-faced guest.

  “Why do you want that?” Bevin retorted. “A unified Germany might pretend to go communist. But, in their hearts, they would be longing for the day when they could revenge their defeat at Stalingrad. You know that as well as I do.”109

  Molotov was immovable. As French diplomat René Massigli characterized it,
it was “only by espousing German unity” that the Soviet Union “obtains [the] means of extending its influence throughout Germany.”110

  Actions by both sides on the ground, however, made unity impossible. While invoking Potsdam to demand their rights in western Germany, the Soviets fell back on its exceptions relating to “local variations” in each occupation zone to assert exclusive powers in the East.111 Operating through the KPD Communist Party, they had radically transformed their zone, seizing landholdings and nationalizing firms. Meanwhile, the British and Americans acknowledged privately that preparations for implementing the Marshall Plan had deepened “the economic split in Germany.” Unification was unacceptable, as it would have allowed the Soviets “to siphon out Marshall Plan assistance through reparations claims.”112

  Meeting with Marshall on December 6, Bevin suggested they lay out for Molotov requirements for Germany’s political organization in such a way as to provoke him into revealing, for the record, “that the Soviet objective was a Communist-controlled Germany.” Then the rupture would be his doing. Marshall, however, waved him off. Yes, it would be “popular” with the American people just to “break off and tell the Russians to go to the devil,” but it was unwise. It was better to assure Molotov “that we were not permanently breaking” with them, that cooperation was possible if “differences on matters of real substance” could be resolved down the road. Marshall was proposing to behave as Stalin had in April, cloaking unwillingness to collaborate further in hollow expressions of hope.

  Yet after several further days of fruitless conferencing, Marshall could see no way of winding matters down amicably. He cabled Lovett with a message for the president: “It is plainly evident that Molotov is not only playing for time but . . . endeavoring to reach agreements which really would be an embarrassment to us in the next four to six months.”113 Marshall requested permission to end the talks.

  “We are all with you,” Truman responded.

  The tone of the meetings now hardened toward mutual contempt. On December 12, Molotov charged that the aim of American aid was to “enslave Germany” and to make it “a strategic base against the democratic states of [eastern] Europe.” Marshall’s team had been waiting for such a tirade, and began scribbling responses to pass on to him. He ignored them all, telling the Russian that his words were self-evidently “not intended to be used as a basis for Council discussion but . . . solely for propaganda purposes.” That Molotov would offer them in such a context, he added, “reflected on the dignity of the Government of the Soviet Union.”

  Molotov grimaced. Clay had never seen him so angry.

  Bevin piled on: Molotov’s “insults,” he said, “would be resented throughout the British Commonwealth.” He should have “ended his speech by thanking his colleagues for listening to the end.”114

  On December 15, Marshall told Molotov he was done discussing German reparations. They had reached an impasse; the problem, as ever, was “Soviet obstructionism.” No, Molotov shot back, it was Marshall who was subverting the talks “to give the U.S. a free hand to do as it pleased in its zone of Germany.”115 Bidault interjected: It was better, he said, after seventeen sessions in which they had “accomplished practically nothing,” to adjourn than to “further aggravate relations.” And so they did, with no mention of future meetings.116

  “The age of Yalta has come to an end,” declared the New York Herald Tribune.117 Clay saw in that moment the ominous beginnings of “a competitive struggle, not with arms but with economic resources, with ideas and with ideals.”118

  OVER THE NEXT THREE DAYS, Clay and Robertson mapped out plans to transform the Frankfurt-based Bizonal Economic Council, comprised of West German representatives, into a true provisional government. Clay’s enthusiasm showed a stunning change in mind-set; in the spring he had blasted moves to split the country.

  Though Clay had earlier argued that compromise with Russia would spread democracy and U.S. influence to eastern Germany,119 he now argued for a unilateral posture to keep communism out of the West: “We cannot and we must not take the risk of losing western Germany and having all of Germany become a satellite of the USSR. As powerful as we are, it would be almost impossible for us to resist communism in the face of a Russo-German agreement.”120 The United States was “engaged in political warfare,” and had “to attack communism and the police state before the German people.”121

  Clay’s conversion from dove to hawk had been inevitable in Bohlen’s view, only belated. Back in June 1945, Clay had told Bohlen that Stimson had it right: to gain Soviet trust, the United States would have to show trust. Bohlen responded that “within a year, [Clay] would become one of the officials in the American government most opposed to the Soviets.”122 He was off by a year.

  Clay’s actions in suspending reparations and initiating bizonal fusion had stoked Soviet hostility, which in turn pushed him to end his campaign of opposition against Marshall’s go-it-alone strategy. “Our work in London has brought us into a very close relationship with State Department personnel concerned with occupation policy,” he reported to Army under secretary William Draper on December 20, 1947, “and there appears to be little real difference in our thinking as to the future.”123

  Marshall, however, seems to have felt otherwise. With no warning to Clay or the War Department, he would announce a few weeks later, on January 8, 1948, that the State Department would assume full control of the German occupation from July 1—a move that had been urged by Lovett and Kennan. Marshall’s intention was to replace Clay with Bedell Smith, one of the secretary of state’s few close friends. General Smith, for his part, was anxious to leave Moscow and gain his fourth star by moving to Berlin as military governor.

  Clay was surprised to learn of the impending switch from Smith himself, but professed to be happy to return home. When an angry Byrnes learned of the move, however, he successfully maneuvered (without Clay’s knowledge) to line up Senate committee leaders and block confirmation. “I don’t think General Marshall or General Smith recognized that the appointment as Military Governor required Senate confirmation,” Clay reflected years later.124 He would, over the year after he was supposed to have returned home, face his greatest challenge yet in Berlin.

  Murphy had anticipated this challenge back in October. He had warned that any move to refashion the Bizonal Economic Council into a West German government would transform Berlin, 120 miles to the east of the bizone border, into “an island in the heart of the Soviet zone” in which the Russians “could easily make our lives unbearable.”125 Following the collapse of the London CFM, the CIA warned of the “possibility of steps being taken in Berlin by the Soviet authorities to force the other occupying powers to remove from Berlin.”126 Clay acknowledged there might be “difficulties” in the city, but thought he could manage them. This would prove shortsighted.

  Marshall was now convinced that “unless Western Germany . . . is effectively associated with Western Europe nations, first through economic arrangements, and ultimately perhaps in some political way there is a real danger that the whole of Germany will be drawn into [the] Eastern orbit.”127 Bevin, too, was sure of the need for action to prevent “the emergence of a Communist controlled Germany.” The two endorsed the Clay-Robertson plans on December 18.128

  The seventy-two-year-old U.S. chief of staff to the commander in chief, Admiral William Leahy, backed the step, but not without deep reservations over where he was sure it would lead. The Soviets, he noted in his diary, “would offer violent objection”; they would use “military power if necessary” to protect their interests. The United States therefore needed to “begin a partial mobilization of forces of defense without any delay.”129 It was becoming clear that the Marshall Plan and mobilization were not alternatives. To the contrary, Washington might need the second to ensure the success of the first.

  THE NEXT DAY, DECEMBER 19, the Kremlin-backed Tägliche Rundschau Berlin daily insisted that quadripartite control in the city could only be justified
as long as the country as a whole remained under four-power rule. Three weeks later it declared that the Anglo-American initiative to create a West German state “nullified” western rights in Berlin.130

  Within western Germany itself, there was growing realization that self-government in the western zones was the best that could be hoped for at this stage. “None of our people will say so openly,” said a German official to The New York Times, “but they realize that the only hope for rehabilitation is an unhampered program for Western Germany with United States aid. Eastern Germany must be written off and all we can do is feel sorry for the Germans caught behind the Russian-orientation line.”131

  The State Department had no doubt that German public opinion would be important to the success of their efforts to revive western Europe’s war-shattered economy. Germans would obviously welcome aid, but their cooperation could not be taken for granted. Most still did not want their country split, and knew that a hostile Russian reaction to the Marshall Plan made such a split more likely. Since the Allies controlled the flow of news within western Germany, the conditions were not present for a free and informed public debate. Nonetheless, western Germans were broadly aware of the American initiative and the Soviet reaction to it.

  On July 22, 1947, three weeks after Molotov’s walkout in Paris, the newly formed Economic Council (Wirtschaftsrat) of the bizone had issued a public statement praising the Marshall Plan as an effort to “achieve the solidarity of the peoples in economic life.” Konrad Adenauer, Christian Democratic Union (CDU) chairman in the British occupation zone, welcomed the plan as Germany’s only chance to improve its standing and influence.132 He would over the next months also come to see it as the touchstone for judging the wisdom of the entirety of the Allies’ occupation strategy.