In a now-celebrated speech delivered at the Harvard University commencement on June 5, 1947, Secretary of State George Catlett Marshall (1880–1959) proposed a solution to the wide-spread hunger, unemployment, and housing shortages that faced Europeans in the aftermath of World War II. Marshall's address was the culmination of increasing U.S. concern over the disintegrating European situation. The physical destruction of the war and the general economic dislocation threatened a breakdown of moral, social, and commercial life. Raw materials and food were in short supply, and war-damaged industries needed machinery and capital before production could be resumed.
Marshall suggested that the European nations themselves set up a program for reconstruction, with United States assistance. This speech marked the official beginning of the Economic Recovery Program (ERP), better known as “The Marshall Plan.” Under the plan, the United States provided aid to prevent starvation in the major war areas, repair the devastation of those areas as quickly as possible, and begin economic reconstruction. The plan had two major aims: to prevent the spread of communism in Western Europe and to stabilize the international order in a way favorable to the development of political democracy and free-market economies.
European reaction to Marshall's speech was quick and positive. The British and French foreign ministers met and issued a joint communiqué inviting twenty-two European nations to send representatives to Paris to draw up a cooperative recovery plan. Sixteen of the invited countries accepted—all except the Soviet Union and areas under its power—and met in Paris in July 1947. The Paris Conference led to the establishment of the Committee for European Economic Cooperation that drew up a proposal for the planned European reconstruction and presented it to the U.S. government in September 1947.
Although others helped draft the Economic Assistance Act of 1948 that established the ERP, the plan was named for George C. Marshall because of his indispensable role, his influence, and his extraordinary prestige with Congress and the American people. A graduate of the Virginia Military Institute, Marshall was by World War II army chief of staff, a post he held throughout the war. He exerted tremendous influence during the war years and afterwards assumed key civilian posts in the Truman Administration. He became secretary of state in 1947 and later served as secretary of defense. For his efforts in reviving Europe, Marshall won the 1953 Nobel Peace Prize, the first professional soldier to receive it.
Over the four-years during which the Marshall Plan was formally in operation, Congress appropriated $13.3 billion for European recovery. Although modest in terms of Europe's total gross national product, the aid supplied critically needed materials to get production operating again. The United States also benefitted from the plan by developing valuable trading partners and reliable allies among the West European nations. Even more important were the many ties of individual and collective friendship that developed between the United States and Europe.
The plan was the boldest, most successful, and certainly the most expensive foreign policy initiative ever attempted in peacetime. A milestone in the growth of U.S. world leadership, the Marshall Plan has had far-reaching consequences. In the short run, it relieved widespread privation and averted the threat of a serious economic depression. In the long run, it enabled the West European nations to recover and maintain not only economic but political independence. It also paved the way for other forms of international cooperation such as the Organization for Economic Cooperation and Development (OCED), the North Atlantic Treaty Organization (NATO) and today's European Union.
The United States has offered a helping hand for European recovery: supplies of money and machinery flood accross the Atlantic. A long line of tractors forms an encouraging sight. Photo: OECD
“Churchill’s words won the war, Marshall’s words won the peace.”
Dirk
Stikker, Dutch Minister of Foreign Affairs, 1948-1952
The Need
Europe was devastated by years of conflict during World War II. Millions of people had been killed or wounded. Industrial and residential centers in England, France, Germany, Italy, Poland, Belgium and elsewhere lay in ruins. Much of Europe was on the brink of famine as agricultural production had been disrupted by war. Transportation infrastructure was in shambles. The only major power in the world that was not significantly damaged was the United States.
Aid to Europe
From 1945 through 1947, the United States was already assisting European economic recovery with direct financial aid. Military assistance to Greece and Turkey was being given. The newly formed United Nations was providing humanitarian assistance. In January 1947, U. S. President Harry Truman appointed George Marshall, the architect of victory during WWII, to be Secretary of State. Writing in his diary on January 8, 1947, Truman said, “Marshall is the greatest man of World War II. He managed to get along with Roosevelt, the Congress, Churchill, the Navy and the Joint Chiefs of Staff and he made a grand record in China. When I asked him to [be] my special envoy to China, he merely said, ‘Yes, Mr. President I’ll go.’ No argument only patriotic action. And if any man was entitled to balk and ask for a rest, he was. We’ll have a real State Department now.”
In just a few months, State Department leadership under Marshall with expertise provided by George Kennan, William Clayton and others crafted the Marshall Plan concept, which George Marshall shared with the world in a speech on June 5, 1947 at Harvard. Officially known as the European Recovery Program (ERP), the Marshall Plan was intended to rebuild the economies and spirits of western Europe, primarily. Marshall was convinced the key to restoration of political stability lay in the revitalization of national economies. Further he saw political stability in Western Europe as a key to blunting the advances of communism in that region.
The European Recovery Program
Sixteen nations, including Germany, became part of the program and shaped the assistance they required, state by state, with administrative and technical assistance provided through the Economic Cooperation Administration (ECA) of the United States. European nations received nearly $13 billion in aid, which initially resulted in shipments of food, staples, fuel and machinery from the United States and later resulted in investment in industrial capacity in Europe. Marshall Plan funding ended in 1951.
Results
Marshall Plan nations were assisted greatly in their economic recovery. From 1948 through 1952 European economies grew at an unprecedented rate. Trade relations led to the formation of the North Atlantic alliance. Economic prosperity led by coal and steel industries helped to shape what we know now as the European Union.
Source: George C. Marshall Foundation
The Netherlands and the Marshall Plan
The Netherlands received $ 1.127 billion in Marshall Aid. With $ 109 per capita, the Netherlands belonged to the group of countries in Western Europe that received the most Marshall aid.
The Marshall Plan enabled the receiving countries to import goods. The largest contributions for industry went to food production (for example, the flour factories of Koopmans in Leeuwarden), textile (TenCate in Nijverdal, Spanjaard in Borne and Van Heek in Enschede) and the aviation industry (KLM, Fokker). Steel producer Hoogovens in IJmuiden could purchase special equipment. In Geertruidenberg, Noord Brabant, the new Amer power plant was built to supply the nation with energy. ENCI (Eerste Nederlandse Cement Industrie) in Maastricht, was able to expand in order to keep up with increasing demands in the building industry. In total, half a million dollars were invested in the cement industry. Therefore, the production level could rise with 70 %. The Dutch State Mines were enabled to expand their chemical industries. The electrification of the Dutch railway system could grow rapidly.
Poster by Dutch artist Ies Spreekmeester (1914-2000): The flags of European nations form the blades of a windmill while the American flag forms the tail.
Marshall funds were used for the reconstruction of houses in Limburg, Walcheren, de Betuwe, Arnhem, Nijmegen and Rotterdam (400 million guilders). A large number of smaller projects was also financed by the Marshall Plan, for example the repair of the port of Rotterdam, the construction of the Velsertunnel and other infrastructural works, and the expansion of the Delft Technical Hogeschool (now University), the Bouwcentrum Rotterdam and the Krasnapolsky Hotel in Amsterdam. Also, the the damaged Grand Hotel in Scheveningen was repaired with Marshall Aid. was In total, about 4,100 predominantly smaller companies, benefited from the Marshall Plan.
The Marshall Plan also had a major impact on Dutch agriculture. In the early years, the Marshall Plan was needed for the purchase of wheat and agricultural equipment. Marshall funds were spent on the repair of agricultural soil, the reclamation of land in the IJsselmeer and the mechanization and rationalization of agriculture. The showcase villages of Rottevalle (Friesland) and Kerkhoven Oisterwijk (Noord Brabant) were modernized with Marshall aid.
In order to stimulate tourism to the Netherlands, hotels were renovated with Marshall Aid, for instance four hotels in Arnhem and the Grand Hotel Krasnapolsky in Amsterdam, which opened in 1952.
About one percent of the money was used for Technical Assistance. Although that is not a lot financially, the activities that aimed to improve productivity in the Netherlands have been of great importance in the longer term. In the center of the Dutch productivity actions stood the “Contactgroep Opvoering Productiviteit” (COP), a cooperation between employers, employees, the Dutch government and specialized advisory and research organizations. The COP coordinated and stimulated the productivity actions in the Netherlands. Within that framework, more than 150 Dutch delegations, with more than 1,200 participants of various backgrounds in society, went on study tours to the United States.
The studies varied from a study on company organization, packaging methods and supermarkets, to technical education, improving the fruit production and artificial insemination in cattle. More than 100 study reports gave insights for those who stayed at home. Based on these studies, follow-up activities were organized such as conventions, courses and the founding of productivity centers for various branches of industry. Many American consultants also visited the Netherlands. This resulted in the development of a new industrial mentality in 1950s Netherlands, based on increase of productivity, efficiency and management.
A good example of “Marshall Plan in action” are Piet and Reinier Dobbelmann from a soap and toothpaste company in Nijmegen, who completed a study tour to the U.S. in 1948. Whilst in the U.S., they became enthusiastic about American machines, that they purchased with the aid of the Marshall Plan. This led to an enormous increase in productivity.
Source: De Marshall-hulp: Studiebrief 25 van de Atlantische Commissie, januari 1997; Het Marshallplan – NAIL Newsletter Special, 1997 – translation: U.S. Embassy, The Hague
Prime Minister Willem Drees wrote in 1954: “It has rarely occurred in history that an entirely new experiment in the way of international relations has enjoyed such
demonstrable success as the Marshall Plan…
“Let us not forget the Marshall Plan, because it is a symbol of what the effect of real co-operation can be for peaceful purposes in the world.”