03 - Marshall Plan [1947-1952] - The Marshall Plan and the Foundations of the Cold War

POST-WAR ECONOMIC AND POLITICAL LANDSCAPE ($1947$)

• State of Post-War Italy: In $1947$, two years after the conclusion of World War II, Italy was characterized by extreme poverty. This environment was described as "fertile ground for communism," as the ideology promised solutions to economic injustice and illness. Witnesses recall a constant need to "tighten your belt" due to scarcity and hunger.

• Growth of the Communist Party: Membership in the Italian Communist Party reached approximately $2,000,000$. The United States government feared this expansion could lead Western Europe to fall under communist control.

• Ideological Foundations of Unrest: American leadership believed that the "seeds of totalitarian regimes" are nurtured by misery, war, and poverty. These regimes are thought to reach full growth when the people's hope for a better life expires.

• Soviet Alternative Model: By May Day in $1947$, the Red Army was recognized as the world's largest fighting force. Joseph Stalin established control over most of Eastern Europe. The Soviet model advocated for public ownership and a centrally planned economy, directly opposing the Western model of mixed economies and free trade.

• Fears of Economic Collapse: Western leaders feared that domestic communists in Western Europe would act disruptively, triggering an economic collapse that would allow the Soviet Union to extend its influence across the continent.

THE TRUMAN DOCTRINE AND THE CONTAINMENT OF COMMUNISM

• Financial Crisis of February $1947$: A major financial crisis forced the British government to inform Washington that it could no longer provide aid to Greece and Turkey. This raised alarms that the Eastern Mediterranean would fall into the Soviet sphere.

• Truman Address to Congress: President Harry S. Truman utilized this shift to take a political offensive. In a historic speech to a concentrated Congress, he proposed that the free peoples of the world look to the United States for support in maintaining freedom.

• Assistance Request: Truman requested authority to provide $400,000,000$ in assistance to Greece and Turkey for the period ending $06/30/1948$.

• Framing the Conflict: Truman pitched the struggle as a binary choice between "freedom and tyranny." The Truman Doctrine aimed to persuade an isolationist Congress to act by emphasizing anti-communism and clean-cut answers to complex global issues.

• Appeal of Communism: After $5.5$ years of fighting fascism, much of Europe was in ruins (industry destroyed, homes in rubble). Communism appealed to youth and students as a vehicle for a classless society and a means to change the world for the better.

GENERAL GEORGE MARSHALL AND THE PREPARATIONS FOR RECOVERY

• Appointment of Marshall: General George Marshall, the wartime military leader, was appointed Secretary of State to handle the Soviet threat. He was described as an "austere and unapproachable" man who exuded leadership and refused to be called by his first name, even by the President.

• Moscow Conference (March $1947$): Marshall met with Soviet Foreign Minister Molotov and representatives from Britain and France to discuss the future of Germany. The meetings were unsuccessful.

• Meeting with Stalin: Marshall met with Stalin at the Kremlin and concluded that the Soviets were "stalling for time." He believed they wanted Western Europe's situation to worsen until communist regimes could seize power naturally without Red Army intervention.

• The Germany Question: At the center of European recovery was the status of defeated Germany. While Stalin wanted to keep Germany economically weak to prevent future threats, the Americans believed Germany had to recover for total European stability.

• Harvard Announcement: Marshall instructed the State Department to draft a rescue plan. He announced the plan on at an awards ceremony at Harvard University. He proposed aid on a vast scale, inviting European nations to design their own response.

THE MARSHALL PLAN PROPOSAL AND SOVIET COUNTERMEASURES

• European Response: Ernest Bevin, the British Foreign Secretary, immediately seized on the speech and collaborated with the French to create the European Recovery Programme.

• Stalin's Suspicion: Initially, the plan was theoretically open to the East. However, Stalin viewed it as a American tactic to "tear the people's democracies" away from the Soviet sphere and infiltrate them.

• The Paris Conference: A foreign ministers' conference was held in Paris. Molotov and a large Soviet delegation attended but remained skeptical of the conditions attached to the aid.

• Intelligence and Withdrawal: Soviet spies in London and elsewhere provided Stalin with documents that confirmed American intentions to exclude or isolate the USSR. Consequently, Stalin ordered Molotov to pull out of the negotiations, accusing the West of dividing Europe into "two hostile camps."

• The Czechoslovakian Ultimatim: The Czechoslovak government, including its communist ministers, initially voted unanimously to attend the Paris conference. Stalin summoned Prime Minister Clement Gottwald and Foreign Minister Jan Masaryk to the Kremlin. Stalin issued an ultimatum: if they did not refuse the aid by $04:00$ AM on $07/11/1947$, there would be serious consequences. Czechoslovakia subsequently rejected the aid.

• Jan Masaryk's Reaction: Masaryk famously stated upon his return from Moscow: "I was going to Moscow as a minister of a free state, and I am returning as Stalin's slave."

THE CZECHOSLOVAKIAN COUP AND THE COMINFORM

• Formalizing the Split: In September $1947$, $16$ European nations requested $20,000,000,000$ in aid, drawing the Cold War battle lines. The Soviet Union viewed this as an aggressive act.

• Cominform and Comecon: Stalin revived the Communist International as the Cominform to control Eastern Bloc politics. He also established Comecon to provide economic assistance, such as grain for Czechoslovakia after a bad harvest, to maintain the Soviet sphere of influence.

• The February $1948$ Coup: In Czechoslovakia, workers' militias marched, non-communists were arrested, and the communists took over the government, police, and unions in only $5$ days. The red flag was raised in Prague.

• Death of Jan Masaryk: Two weeks after the coup, Masaryk fell to his death from his apartment window. While officially a suicide, the event symbolized the end of a free Czechoslovakia.

• Impact on US Congress: The coup shocked Washington and convinced many isolationists to pass the Marshall Plan legislation.

IMPLEMENTATION AND ECONOMIC IMPACT OF THE MARSHALL PLAN

• Approval and Scope: On $04/03/1948$, Congress approved $5,000,000,000$ in aid. Over $4$ years, the Marshall Plan spent $13,500,000,000$ ($13.5 \times 10^9$) across $16$ countries.

• Aid Composition: The aid was structured as $20\%$ loans and $80\%$ grants.

• Specific Shipments: Initial aid consisted of food and fertilizers, followed by machinery to improve agricultural and industrial efficiency.

• Post-War Boom: The program required European countries to focus on American goods, redirecting dollars back to US industry and fueling a domestic economic boom.

CASE STUDIES IN MARSHALL AID: GREECE AND FRANCE

• Greece: Devastated by Nazi occupation and civil war ($2,000$ villages burned). Greece received nearly $700,000,000$ in Marshall aid.

  • Personnel: High responsibility was given to young Americans; one witness was in charge of the Greek import program at age $24$.

  • The Missouri Mules: To replace farm animals destroyed in the war, the US imported Missouri mules. These were significantly larger ($200\,\text{kilos}$ capacity) and more "cantankerous" than local animals. Farmers drew numbered lots to receive them.

• France: In $1947$, Renault factory workers went on strike, supported by communists. Over $3,000,000$ workers participated in street protests.

  • Political Pressure: The US informed the French government that aid would be withheld until the communist threat was controlled.

  • Resolution: After acts of sabotage (including an express train derailment causing $20$ deaths), the strikers lost public support. France eventually received $2,700,000,000$ in aid.

THE YUGOSLAV RIFT AND WESTERN ASSISTANCE

• Tito-Stalin Split: Yugoslav leader Josip Broz Tito maintained an independent stance that angered Stalin. In $1948$, Stalin expelled Tito from the Cominform.

• US Intervention: Following poor harvests, Tito requested and received over $150,000,000$ in American aid in $1950$, effectively moving Yugoslavia from behind the Iron Curtain to a more neutral/western-leaning economic position.

THE ITALIAN GENERAL ELECTION OF $1948$ AND COVERT INTERVENTION

• Political Stakes: The $04/18/1948$ election pitted the Popular Front (Communists under Palmiro Togliatti) against the Christian Democrats (Alcide De Gasperi).

• Letter Campaign: A US-orchestrated campaign prompted Italian-Americans to write approximately $10,000,000$ letters to relatives in Italy, urging them to vote against communists.

• CIA Covert Action: The newly formed CIA conducted its first covert political action program. This involved distributing "bags of money" to democratic politicians for posters, pamphlets, and campaign expenses despite initial training deficits.

• The Role of the Church: Pope Pius XII declared the fight against communism a "holy war." The Church organized mobile cinema units to project electioneering films in rural squares.

• Excommunication: Shortly before the election, the Pope excommunicated communists and their supporters, which prevented believers from being married in church or receiving religious blessings.

• Result: The Christian Democrats won a landslide victory, securing an absolute majority in parliament and keeping Italy in the Western alliance.

ECONOMIC MODERNIZATION AND THE EUROPEAN COMMUNITY

• Industrial Revival: In Turin, the Fiat Motor Company was re-equipped with sophisticated machinery from Detroit and Pittsburgh, fueling Italian industrial revival.

• Americanization of Economies: Success was tied to the adoption of American production and management methods. The goal was to build a "European consumer society" with a free enterprise Western bloc tied to US trade.

• Conclusion: The Marshall Plan successfully pulled Europe out of recession and brought nations closer to each other and the United States, while the Soviet Union was forced to build its own rival bloc.

QUESTIONS & DISCUSSION

• Question from Interviewer/Narrator regarding the nature of aid: Was the generosity of the Americans self-serving?

• Response from Witness: Most people felt that it was self-serving in the sense that Europe was seen as an outlet for American goods and machinery. The US had a vital stake in European recovery to prevent its own economic collapse.

• Question regarding Jan Masaryk's death: Did he jump or was he pushed?

• Response/Observation: The argument still rages. His death symbolized the final end of free Czechoslovakia for the people.

• Question regarding CIA Authority: Did the CIA have legal authority for covert actions?

• Response from CIA Witness: CIA lawyers determined that if specified by the President/National Security Council and funded by Congress, the authority existed under the National Security Act.