The Marshall Plan

JUN 05 1947 · 12:00

Secretary of State George C. Marshall, whose 5 June 1947 Harvard commencement speech proposed the European Recovery Program. Place: Memorial Church, Harvard Yard, Cambridge, Massachusetts Figures: George C. Marshall, Secretary of State · Will Clayton, Under-Secretary for Economic Affairs (the plan's principal drafter) · Ernest Bevin, British Foreign Secretary (who calls Marshall's speech a lifeline to sinking men) · V. M. Molotov, Soviet Foreign Minister (who walks out of the Paris conference on 2 July) Harvard Commencement Marshall speaks for eleven minutes at the Harvard commencement on 5 June 1947. The address is short on specifics by design: the United States stands ready to assist any European government willing to coordinate a recovery program. The offer is, formally, open to the Soviet Union and its satellites. Molotov attends the Paris organizing conference of 27 June, finds the conditions (open economic data, joint planning, integration into a Western trade system) unacceptable, and walks out on 2 July. The Soviets compel Czechoslovakia and Poland (both initially interested) to withdraw. The plan becomes, by Soviet refusal, a Western-bloc instrument. Sixteen states form the Committee of European Economic Co-operation by September 1947 (later the OEEC, eventually the OECD). The Economic Cooperation Act passes Congress on 3 April 1948 after the Czechoslovak coup of February has concentrated Republican minds. Paul Hoffman runs the Economic Cooperation Administration from Washington; Averell Harriman runs the Paris counterpart. Thirteen Billion Dollars and a Continent Over four years (April 1948 to June 1952) $13.3 billion in grants and loans flows to sixteen Western European countries (roughly $173 billion in 2024 dollars, or about 5 percent of US GDP for 1948 alone). The United Kingdom receives the largest share, France the second, West Germany the third. The aid is conditioned on internal liberalization, removal of trade barriers between recipients, and rejection of communist participation in government. The French and Italian communist parties (the largest in non-Soviet Europe and credibly contesting for power in both countries in 1947) are excluded from coalition cabinets by mid-1947, a condition the United States makes explicit through diplomatic channels. The Plan is Westphalian state-rebuilding undertaken at the expense of one Westphalian sovereign for the benefit of sixteen others. It is also the precondition for the European Coal and Steel Community (1951) and the Treaty of Rome (see [[treaty-of-rome-1957]]). The OEEC, created to administer Marshall aid, becomes the institutional habit of European cooperation that the EEC will inherit. By 1952 Western European industrial production stands 35 percent above 1938 levels. The recovery is r Video: Secretary of State George C. Marshall's Harvard commencement address proposing the European Recovery Program, 5 June 1947. Audio from the Marshall Foundation archive.