U.S. Secretary of State George C. Marshall initiated the European Recovery
Program to rehabilitate the economies of a Europe devastated by war. Speaking at
Harvard's June 1947 commencement, he outlined the program that came to be known
as the Marshall Plan.
The Marshall Plan speech
I'm profoundly grateful and touched by the great distinction and honor and
great compliment accorded me by the authorities of Harvard this morning. I'm
overwhelmed, as a matter of fact, and I'm rather fearful of my inability to
maintain such a high rating as you've been generous enough to accord to me. In
these historic and lovely surroundings, this perfect day, and this very
wonderful assembly, it is a tremendously impressive thing to an individual in my position.
But to speak more seriously, I need not tell you that the world situation is
very serious. That must be apparent to all intelligent people. I think one
difficulty is that the problem is one of such enormous complexity that the very
mass of facts presented to the public by press and radio make it exceedingly
difficult for the man in the street to reach a clear appraisement of the
situation. Furthermore, the people of this country are distant from the troubled
areas of the Earth and it is hard for them to comprehend the plight and
consequent reactions of the long-suffering peoples, and the effect of those
reactions on their governments in connection with our efforts to promote peace
in the world.
In considering the requirements for the rehabilitation of Europe, the
physical loss of life, the visible destruction of cities, factories, mines, and
railroads was correctly estimated, but it has become obvious during recent
months that this visible destruction was probably less serious than the
dislocation of the entire fabric of European economy. For the past 10 years
conditions have been abnormal. The feverish preparation for war and the more
feverish maintenance of the war effort engulfed all aspects of national
economies. Machinery has fallen into disrepair or is entirely obsolete. Under
the arbitrary and destructive Nazi rule, virtually every possible enterprise was
geared into the German war machine.
Long-standing commercial ties, private institutions, banks, insurance
companies and shipping companies disappeared through loss of capital, absorption
through nationalization, or by simple destruction. In many countries, confidence
in the local currency has been severely shaken. The breakdown of the business
structure of Europe during the war was complete. Recovery has been seriously
retarded by the fact that two years after the close of hostilities a peace
settlement with Germany and Austria has not been agreed upon. But even given a
more prompt solution of these difficult problems, the rehabilitation of the
economic structure of Europe quite evidently will require a much longer time and
greater effort than has been foreseen.
There is a phase of this matter which is both interesting and serious. The
farmer has always produced the foodstuffs to exchange with the city dweller for
the other necessities of life. This division of labor is the basis of modern
civilization. At the present time it is threatened with breakdown. The town and
city industries are not producing adequate goods to exchange with the
food-producing farmer. Raw materials and fuel are in short supply. Machinery is
lacking or worn out. The farmer or the peasant cannot find the goods for sale
which he desires to purchase. So the sale of his farm produce for money which he
cannot use seems to him an unprofitable transaction. He, therefore, has
withdrawn many fields from crop cultivation and is using them for grazing. He
feeds more grain to stock and finds for himself and his family an ample supply
of food, however short he may be on clothing and the other ordinary gadgets of
civilization. Meanwhile, people in the cities are short of food and fuel, and in
some places approaching the starvation levels. So the governments are forced to
use their foreign money and credits to procure these necessities abroad. This
process exhausts funds which are urgently needed for reconstruction. Thus a very
serious situation is rapidly developing which bodes no good for the world. The
modern system of the division of labor upon which the exchange of products is
based is in danger of breaking down.
The truth of the matter is that Europe's requirements for the next three or
four years of foreign food and other essential products -- principally from
America -- are so much greater than her present ability to pay that she must
have substantial additional help or face economic, social and political
deterioration of a very grave character.
The remedy lies in breaking the vicious circle and restoring the confidence
of the European people in the economic future of their own countries and of
Europe as a whole. The manufacturer and the farmer throughout wide areas must be
able and willing to exchange their product for currencies, the continuing value
of which is not open to question.
Aside from the demoralizing effect on the world at large and the
possibilities of disturbances arising as a result of the desperation of the
people concerned, the consequences to the economy of the United States should be
apparent to all. It is logical that the United States should do whatever it is
able to do to assist in the return of normal economic health in the world,
without which there can be no political stability and no assured peace.
Our policy is directed not against any country or doctrine but against
hunger, poverty, desperation and chaos. Its purpose should be the revival of a
working economy in the world so as to permit the emergence of political and
social conditions in which free institutions can exist. Such assistance, I am
convinced, must not be on a piecemeal basis as various crises develop. Any
assistance that this government may render in the future should provide a cure
rather than a mere palliative. Any government that is willing to assist in the
task of recovery will find full cooperation, I am sure, on the part of the
United States government. Any government which maneuvers to block the recovery
of other countries cannot expect help from us. Furthermore, governments,
political parties, or groups which seek to perpetuate human misery in order to
profit therefrom politically or otherwise will encounter the opposition of the
United States.
It is already evident that, before the United States government can proceed
much further in its efforts to alleviate the situation and help start the
European world on its way to recovery, there must be some agreement among the
countries of Europe as to the requirements of the situation and the part those
countries themselves will take in order to give proper effect to whatever action
might be undertaken by this government. It would be neither fitting nor
efficacious for this government to undertake to draw up unilaterally a program
designed to place Europe on its feet economically. This is the business of the
Europeans. The initiative, I think, must come from Europe. The role of this
country should consist of friendly aid in the drafting of a European program and
of later support of such a program so far as it may be practical for us to do
so. The program should be a joint one, agreed to by a number, if not all,
European nations.
An essential part of any successful action on the part of the United States
is an understanding on the part of the people of America of the character of the
problem and the remedies to be applied. Political passion and prejudice should
have no part. With foresight, and a willingness on the part of our people to
face up to the vast responsibility which history has clearly placed upon our
country, the difficulties I have outlined can and will be overcome.
I am sorry that on each occasion I have said something publicly in regard to
our international situation, I've been forced by the necessities of the case to
enter into rather technical discussions. But to my mind, it is of vast
importance that our people reach some general understanding of what the
complications really are, rather than react from a passion or a prejudice or an
emotion of the moment. As I said more formally a moment ago, we are remote from
the scene of these troubles. It is virtually impossible at this distance merely
by reading, or listening, or even seeing photographs or motion pictures, to
grasp at all the real significance of the situation. And yet the whole world of
the future hangs on a proper judgment. It hangs, I think, to a large extent on
the realization of the American people, of just what are the various dominant
factors. What are the reactions of the people? What are the justifications of
those reactions? What are the sufferings? What is needed? What can best be done?
What must be done?
