The Economic Recovery Plan
"United States of Europe"
Plan was as much a plan for American business as it was a plan to
rebuild Europe. From the point of view of businessmen, countries,
cultures and borders are a hindrance to the pursuit of profit. For
the United States, World War II and post war reconstruction served as a
precedent for public policy for private profit on "humanitarian" grounds.
And we've been at war ever since.
The following are excerpts from a Congressional Research
Report published in 1997:
The Marshall Plan:
Design, Accomplishments, and Relevance to the Present1
The Plan was a joint effort between the
United States and Europe and among
European nations working together. Prior to formulation of a
program of assistance,
the United States required that European nations agree on a
including a plan of action committing Europe to take steps
toward solution of its
economic problems. The Truman Administration and the Congress
to formulate the European Recovery Program, which eventually
$13.3 billion of assistance to 16 countries.
Two agencies implemented the program, the U.S. Economic
Administration (ECA) and the European-run Organization
for European Economic
Cooperation. The latter helped insure that participants
fulfilled their joint obligations
to adopt policies encouraging trade and increased production.
The ECA provided
dollar assistance to Europe to purchase commodities - food,
fuel, and machinery and
leveraged funds for specific projects, especially those to
develop and rehabilitate
infrastructure. It also provided technical assistance to promote
guaranties to encourage U.S. private investment, and approved
the use of local
currency matching funds.
Integration. The United States had a view of itself as a model for
the development of Europe, with individual countries equated with
American states. As such, U.S. leaders saw a healthy Europe as one in
which trade restraints and other barriers to interaction, such as the
inconvertibility of currencies, would be eliminated. The ERP required
coordinated planning for recovery and the establishment of the OEEC for
this purpose. In 1949, the ERP Authorization Act was amended to make it
the explicit policy of the United States to encourage the unification of
Europe.25 Efforts in support of European integration,
integral to the original Plan, were strengthened at this time.
declassified State Department report titled, Summary
of the Department's Position on the Content of a European Recovery Plan
provides an overview of objectives, requirements and issue areas for the
reorganization of the economic and political systems of Europe.
of the Department's Position on the Content of a
European Recovery Plan3
- Essential Elements.
Concrete proposals for area-wide recovery of
agriculture and basic industries -- coal, steel,
transport, and power -- which are fundamental to
viable European economy.
- Progressive replacement of
bilateral trading arrangements by more effective
multilateral arrangements for expanding
intra-European trade, looking if possible, toward an
eventual European Customs Union.
- "While in many respects the
long-run gains of European economic integration in
terms of specialization of production and economic
location -- achieved ideally through both a customs
and a currency union -- would be the most beneficial
consequences of a recovery program, these goals must
be put in perspective in relation to more urgent
- Role of the UN.
"Department supports fullest practicable use of
United Nations bodies and specialized agencies in
carrying out of program. This includes continued
international allocation of coal through ECE Coal
Committee and food through IEFC Committees, and
technical planning work in ECE Committees on
transport and power. Sympathetic to assignment to
ECE of additional functions related to program. But
Dept recognizes that coordination of European
program and integration of UN activities with needs
of this special program will probably have to be
retained in organization composed only of
participants (including bizonal Germany). In view
possibilities systematic obstruction to ECE
effectiveness, special European recovery
organization must be able to handle entire program
and must be prepared to assume promptly functions
assigned to other organizations if they prove
- Continuing Organization.
Dept recognizes that present Conference cannot
possibly make complete blueprint for European
recovery over next several years. Initial program
must conform to all above elements, but many details
of its application will remain for further study.
Modifications are also to be expected during
negotiations with the U.S. before acceptance and in
continuing development of any accepted program.
Emphasis should be given to major role of continuing
organization of participating countries (plus
bizonal German area), both in implementing and in
progressively refining any agreed program.
A more detailed view of the State
Department's Blueprint for European Recovery is contained in a document
that was in the files of John Snyder of the Treasury Dept. This
document is titled, "The
Marshall Proposal of Assistance to Europe", dated July 10, 1947.
Marshall Proposal of Assistance to Europe4
flow of goods may be impeded by insurmountable obstacles
to trade. These problems are being dealt with by the
I.T.O., but it is possible that specific regional
arrangements applicable to certain parts of Europe
may establish definite areas of "freer trade". This
cannot, however, be a short-run development; and then
it is well not to forget that today the most formidable
hindrances to normal trade are found in the foreign
exchange regulations and the dwindling monetary
reserves, necessitating a cut in imports - hindrances
which should be partially, if not wholly, removed by the
application of the Marshall programme.
Objectives of American Policy:
Restore an international monetary system of
sufficient stability for the most rigid controls to
Reduce trade barriers to foreign trade, in
particular quantitative restrictions and various
obnoxious forms of discrimination (one of the
provisions of the lend-lease agreements and now the
principal objective of the International Trade
contribute by sound loans to the reconstruction of
war-stricken countries (one of the objectives of the
International Bank for Reconstruction and
[Different Stages of Tackling the problem.] The methods
of coordination applied by the European countries
participating in the Marshall programme will be decided
upon at the July meetings in Paris. The first task will
be to prepare a plan for action in the autumn of 1947.
But only a limited number of problems will find their
solution at so early a date. There are, of course,
greater tasks confronting the European countries,
including such questions as a
freer movement of population, which may more easily be
solved on a regional basis for Europe than for the world
as a whole.
What is the
How the European Union Works
Congressional Research Service, Curt Tarnoff, January 6, 1997, The
Marshall Plan: Design, Accomplishments and Relevance to the Present,
pages 2 and 22
U.S. Information Agency of the State Department, David W. Ellwood,
Marshall Plan - A Strategy that Worked, The original link no longer
works but a copy of the article was found on an American Embassy
Original article captured in pdf format,
3 Truman Library and Museum online, August 26, 1947, Summary of the
Department's Position on the Content of a European Recovery Plan,
4 Truman Library and Museum online, July 10, 1947, The Marshall
Proposal of Assistance to Europe,