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Author:  Barry Machado
Publisher: George C. Marshall Foundation



In Search of a Usable Past:
The Marshall Plan and 
Postwar Reconstruction Today
by
Barry Machado
GEORGE C. MARSHALL FOUNDATION
LEXINGTON, VIRGINIA
2007


Copyright © 2007 by The George C. Marshall Foundation
P. O. Drawer 1600
VMI Parade Avenue
Lexington, Virginia 24450
All rights reserved.
Printed in the United States of America
by The Sheridan Press
ISBN 0-935524-06-1
Barry F. Machado is emeritus Professor of History at Washington and Lee
University in Lexington, Virginia, where he taught from 1971 through
2005. He received his B.A. from Dartmouth College and his M.A. and Ph.D.
from Northwestern University. His teaching areas included recent U.S. his-
tory, U.S. foreign and military affairs, and the history of American business.
Writing and publication of this volume were made possible
by a grant from the Smith Richardson Foundation.


For Anice
Lighter of Candles
and Molder of Many Lives
Especially My Own



Contents
Summary
vii
Acknowledgments
ix
Glossary
xi
Illustrations
xii
Preface
xiii
PART ONE: A VERIFIABLE PAST
I. Conceptualizing the Marshall Plan
3
II. Selling the Marshall Plan
15
III. Analyzing the Marshall Plan
31
IV. Implementing the Marshall Plan
57
Greece
58
Italy
73
Turkey
86
Bizonia and West Germany
96
PART TWO: A CONTINGENT AND RELEVANT PAST
V. An Unusable Marshall Plan?
113
VI. A Usable Marshall Plan
125
Appendices
137
Notes
143
Bibliography
163
Index
183
v


00ixiv001002FrontMatter-6_1

The European Backdrop


Summary
In recent years the Marshall Plan has been invoked on numerous occa-
sions as a solution for problems domestic and foreign. This study aims to
establish the relevance for contemporary postwar reconstruction projects of
an experimental foreign policy conceived and executed back in the late
1940s and early 1950s.
The monograph clarifies why and how the Marshall Plan was adopted,
what its essential features were, and why it succeeded in western Europe,
concluding that it had important and mutually reinforcing aspects—political,
psychological, and economic. Fear of Communist expansion westward and
the resulting containment doctrine energized its American proponents and
European beneficiaries. Its principal architects were realists, motivated by
enlightened self-interest. The strengths, weaknesses, and one major myth of
their realism are analyzed. Features of great solidity and current relevance
include the partnership of the Economic Cooperation Administration (ECA)
with Congress and the American people; a multilateral, regional approach
that treated western Europe as a unit; an insistence on European self-help
and mutual aid; restriction of the ECA’s role to a “catalytic agent” rather
than a “driving force”; imposition of the highest standards for recruitment
and hiring of personnel; creation of the ECA as a small, autonomous, and
unbureaucratic agency; popularization of economic growth as a national pri-
ority; freedom from corruption and scandal; and an understanding of the
requirements of world leadership. Further examples are provided through-
out the text. Some weaknesses discovered were abuses of quantification and
language, interagency feuding, and, most importantly, oversimplification of
the root causes of Communist popularity in parts of western Europe.
Through the prism of four country studies—Greece, Italy, Turkey, and
West Germany—the author examines how the Plan was actually implement-
ed, demonstrating the practical limitations of conventional theories and gen-
eralizations about its impact. They were chosen for their resonance with
conditions facing present-day policymakers. Such autopsies of recipient
nations with different economic and political problems, and in diverse cul-
tural regions of Europe, reveal the Marshall Plan’s fundamental flexibility, its
rejection of a one-size-fits-all approach, and its mixed results. While its
grand intention was to promote a more cooperative and interdependent
“New Europe,” various relief, reconstruction, reform, and development
progams encountered local resistance and failure as well as collaboration
and success. Sometimes, as in Turkey, mistakes were made despite the best
intentions. Or, as happened in southern Italy, the cultural challenge was too
vii


Summary
formidable for Marshall Planners. In the case of West Germany the national
will to self-renewal probably determined that country’s ensuing “economic
miracle” more than did the amount or kind of American foreign aid. Greece
was, in some respects, sui generis but also a practicum in workable and
unworkable theories and methods of postwar reconstruction today.
Finally, for the benefit of contemporary policymakers, the monograph
extracts unusable, avoidable, and usable elements from the historical record
of the Marshall Plan. Arguments against its replication are also explored. Of
largely antiquarian interest, the unusable characteristics involve luck, tim-
ing, and unintended consequences. The large role of seven historical contin-
gencies is identified as contributing to the Marshall Plan’s success. The
avoidable features pertain to mistakes that ought not to be repeated in the
future. The usable past recommends itself for incorporation by the shapers
of postwar reconstruction programs today.
viii


Acknowledgments
Many contributed to the final version of this monograph. In February
2006 in the first of two vetting sessions, American scholars provided valu-
able commentaries on the initial draft. Later, they read carefully its revision,
from which I profited as well. For their oral and written critiques, special
thanks go to participants in that two-day review in Arlington, Virginia:
Ambassador James Dobbins of the Rand Corporation; John Bledsoe Bonds of
the History Department at the Citadel; William H. Becker, Professor of
History and International Affairs in the Elliott School of International
Affairs, George Washington University; Jacqueline McGlade, Provost at Penn
State University, Shenango; Jerry Rosenberg, Professor of Management,
Rutgers University Business School; and Olin Wethington, former Counselor
to the Treasury Secretary and Trustee of the George C. Marshall Foundation
who did double duty, participating in the second session with the same
insightfulness and incisiveness he brought to the first.
A second, two-day retreat took place in June 2006 in Paris, France, at an
appropriate setting, Hotel de Talleyrand, one-time headquarters of the
Economic Cooperation Administration (ECA) in Europe. There, European
scholars passed their judgments on the revised draft, offering helpful sugges-
tions and constructive criticisms. For enriching the document in numerous
additional ways, my appreciation goes out to: Luciano Segreto, Professor of
History, University of Florence; John Killick, former Lecturer in Economic
History at the University of Leeds in England, who must be singled out for
an extra acknowledgment for also providing me with copies of unpublished
papers delivered at a fiftieth anniversary conference on the Marshall Plan
held at Leeds in 1997; Athanasios Lykogiannis, historian and researcher at
the Bank of Greece, Athens; and Odd Arne Westad, Professor of
International History and Co-Director of the Cold War Studies Centre,
London School of Economics and Political Science.
Though invited, Apostolos Vetsopoulos could not attend but kindly sent
me a copy of his fine dissertation on the Marshall Plan in Greece. James
Lowenstein, an old Marshall Planner, shared his recollections, and Fred
Morefield, a member of the Marshall Foundation’s council of advisers, sharp-
ened my focus. Colonel George F. Oliver, Professor of Joint Operations at the
Naval War College, who worked on an early alternative draft, supplied
important ideas and suggested sources. I am also in their debt. Because of
their gracious hospitality at the American Embassy and the Organization for
Economic Cooperation and Development (OECD) while the “monograph
team” was in Paris, Ambassador Craig R. Stapleton and Ambassador
Constance Morella deserve the warmest gratitude.
ix


Acknowledgments
Other big debts were accumulated at the George C. Marshall Foundation.
Larry I. Bland, editor of The Papers of George Catlett Marshall and editori-
al supervisor, copy editer, indexer, and prepress producer of the monograph,
contributed understanding and guidance in an optimal blend. The leader-
ship of Brigadier General Wesley B. Taylor, President of the Foundation, has
been admirable. Brian Shaw, Executive Vice President and Director of
Development and Communications, extended an offer I could not resist. To
preserve the memory of George C. Marshall, my retirement could wait.
Together, Robert B. James, Vice President and Director of Outreach
Programs, and K. Jane Dunlap, Associate Director of Development and
Director of Corporate Relations, made the vetting sessions on two conti-
nents, and much more, possible. Jane excelled in checking the project’s cen-
trifugal forces, and I dubbed her affectionately “the indispensable one.” Her
knowledge of the relevant manuscript collections and literature made
Joanne D. Hartog, Director of Research and Scholarly Programs, my valuable
shepherdess while working in the George C. Marshall Library. Three
Trustees—Ambassador Thomas Pickering, Dr. Thomas Henricksen, and
Lieutenant General Charles W. Dyke—offered thoughtful ideas about how to
improve the monograph’s organization and style. Anne S. Wells thoroughly
proofed the manuscript, offering numerous suggestions.
Finally, I have benefited greatly from the research conducted by my old
student, previously at the Paul H. Nitze School of Advanced International
Studies and currently at the University of Virginia Law School, Eric Klingel-
hofer. His work in the ECA’s Turkish mission records at the National
Archives and Records Administration, and the provisional analysis of his
findings, were first-rate and of great help. James C. Warren’s unflagging sup-
port for the project (I have a folder stout with his special brand of correspon-
dence) kept my own spirits high. He attended both vetting sessions and has
his fingerprints all over these pages. Not only was he a Mississippi River, in
flood-stage, of information and interpretation, he knew what he was talking
about. How fortunate I was to reach for the hand he extended. As another
old Marshall Planner, Warren served as my constant reminder of why
Emerson thought that an organization is the lengthened shadow of human
beings.
x


Glossary
AFL
=
American Federation of Labor
AMAG
=
American Mission for Aid to Greece
CASA
=
Cassa per il Mezzogiorno (The Southern Fund, Italy)
CCMP
=
Citizens’ Committee for the Marshall Plan to Aid European Recovery
CDU
=
Christian Democratic Union (West Germany)
CED
=
Committee for Economic Development
CEEC
=
Committee for European Economic Cooperation
CIA
=
Central Intelligence Agency
CIO
=
Congress of Industrial Organizations
DC
=
Christian Democrats (Italy)
DSE
=
Democratic Army of Greece
ECA
=
Economic Cooperation Administration
EPU
=
European Payments Union
ERP
=
European Recovery Program
GARIOA
=
Government and Relief in Occupied Areas (Germany)
GDP
=
Gross Domestic Product
GNA
=
Greek National Army
GNP
=
Gross National Product
HICOG
=
U.S. High Commission for Germany
JUSMAPG =
Joint U.S. Military Advisory and Planning Group (Greece)
KKE
=
Greek Communist Party
MIT
=
Massachusetts Institute of Technology
MSA
=
Mutual Security Agency
NATO
=
North Atlantic Treaty Organization
OECD
=
Organization for Economic Cooperation and Development
OEEC
=
Organization for European Economic Cooperation
OMGUS
=
Office of Military Government, U.S. (Germany)
OSR
=
Office of the Special Representative [of the ECA], Paris
OSS
=
Office of Strategic Services
OWI
=
Office of War Information
PA
=
Procurement Authorization
PCI
=
Italian Communist Party
SPD
=
Social Democratic Party (West Germany)
UNRRA
=
United Nations Relief and Rehabilitation Administration
USTAP
=
United States Technical Assistance and Productivity Program
WFTU
=
World Federation of Trade Unions
Abbreviations used only in endnotes:
FAOHP
=
Foreign Affairs Oral History Project, Georgetown University, Washington, D.C.
GCML
=
George C. Marshall Library, Lexington, Virginia
HSTL
=
Harry S. Truman Library, Independence, Missouri
LC
=
Library of Congress, Washington, D.C.
NARA
=
National Archives and Records Administration II,
College Park, Maryland
NSA,GWU=
National Security Archive, George Washington University
Washington, D.C.
RG
=
Record Group
xi


Illustrations
page
vi
Pirmassas, Germany, March 22, 1945. (George C. Marshall Library [GCML] Photo #2277)
4
Vienna, Austria, food protest, May 14, 1947. (GCML Photo #3141)
6
Marshall speaking on the Moscow Conference, April 28, 1947. (GCML Photo #1081C)
9
William D. Clayton. (C. Tyler Wood Papers, 37/2, GCML); George F. Kennan. (GCML
Photo #3237); Marshall at Harvard University, June 5, 1947. (GCML Photo #2045)
11
President Truman signs the Marshall Plan bill, April 3, 1948. (The Marshall Plan at
the Mid-Mark, W. C. Foster Papers, Box 56, GCML)
19
Marshall and Lovett testify on emergency aid for Europe. (GCML Photo #704)
23
Soviet anti–Marshall Plan cartoon, mid-1947. (Pravda)
25
Truman, Marshall, Hoffman, and Harriman at the White House. (GCML Photo #2876)
27
Marshall Plan float in Netherlands parade. (GCML Photo #3068)
43
(top, left) First ship of grain to France. (GCML Photo #177); (top, right) Rebuilding
Aunay-sur-Odon. (U.S. Information Agency photo 54-8214); Paris rail yards. (The Marshall
Plan at the Mid-Mark)
45
Austrian engineers at General Electric. (The Marshall Plan at the Mid-Mark)
56
ECA Organization Chart, March 15, 1949
61
Clearing the Corinth Canal. (GCML Photo #3083)
63
Workmen grade street; new apartments. (GCML Photo #3077)
65
Bridge repair, Macedonia. (GCML Photo #3078)
68
Hoffman views Greek ECA display. (The Marshall Plan at the Mid-Mark)
70
Greek Army minesweeper. (J. A. Van Fleet Photographs, Box 18, Album 29, GCML)
71
Greek Army engineers repairing a road. (Ibid.)
75
Hoffman visits de Gasperi. (C. T. Wood Papers, 37/15, GCML)
78
Land restoration in Italy. (The Marshall Plan at the Mid-Mark)
81
Italian apartment building. (GCML Photo #3074)
82
Power plant, Lardarello, Italy. (GCML Photo #3125)
84
Repairing the road to Palermo. (The Marshall Plan at the Mid-Mark)
89
Explaining new equipment, Turkey. (GCML Photo #3130)
92
Hoffman and Turkish minister. (C. T. Wood Papers, 37/14, GCML)
98
Shipyard welder, Germany. (GCML Photo #3147)
99
Ships in German shipyard. (GCML Photo #3146)
103
Germans shoveling debris. (GCML Photo #179); Nürnberg housing. (GCML Photo #3174)
107
German coal miners. (GCML Photos #185 and 185A)
115
Robert Marjolin and colleagues. (Robert Marjolin, Architect of European Unity:
Memoirs, 1911–1986 [London: Weidenfeld and Nicolson, 1989], following p. 220)
116
U.S. coal arrives in the Netherlands. (GCML Photo #176)
119
British auto for export. (GCML Photo #3155)
124
Hamburg, Germany’s Mönckebergstrasse, 1945 vs. 1950.
136
Marshall Plan U.S. commemorative first-class stamp, 1997.
xii


Preface
Admiration for the Marshall Plan has spanned generations. Just after
Congress passed legislation in the spring of 1948 creating the European
Recovery Program (ERP), its official name, the usually reserved Economist
of London called it “an act without peer in history.”1 Many years later, a cen-
tral figure in the reconstruction of western Europe concurred, rating the
American undertaking as “one of the great things in human history,” as well
as the “pivotal event” between 1914 and 1990, because it forged a “pattern
of cooperation” without precedent.2 Seven years ago, the Brookings
Institution surveyed over one thousand American college professors, mem-
bers of either the American Historical Association or the American Political
Science Association. The Washington-based think tank asked them to select
the American government’s most important achievements in the last one
hundred years. Nearly half the historians and political scientists responded.
They put the Marshall Plan at the top of their list, grading it as Washington’s
greatest public policy of the past century.
One might reasonably assume that the Marshall Plan and its meaning
have been and still are being taught on most American college campuses as
the yardstick with which to evaluate all federal programs. With widespread
academic and popular acclaim, however, have come grand expectations.
Ever since the United States helped to rebuild western Europe after World
War II, calls for a “new,” or a “second,” or a “present day” Marshall Plan
have been incessant. Those invoking it, mantra-like, have done so on the
assumption of its near-universal application. A mere sampling of the range of
invocations includes Latin America, the Third World, global poverty,
American inner cities, eastern Europe, the former Soviet Union, the Balkans,
the Middle East, and, finally, Iraq.3
Given the lofty esteem in which the Marshall Plan is held in circles both
scholarly and lay, given the many enthusiastic hopes for its reincarnations,
one should be clear as to what, in its essence, the original and experimental
Marshall Plan was and was not. What were its origins and genesis? How did
it gain public and congressional approval? How was it actually implement-
ed? In contrast to what was attempted, what was achieved? Notwithstanding
its encomiums, to what extent did it fall short of its aims? What character-
istics of the Plan best explain its successes and failures? In what ways have
myths encrusted the Plan with the passage of time? Are there, upon close
and careful examination, principles, values, methods, and practices around
which the Marshall Plan was constructed that have relevance for postconflict
reconstruction and stabilization today? These are the overriding concerns
of this monograph. Each raises larger issues.
xiii


Preface
Historians have long disagreed about history’s meaning. For some prac-
titioners, recovering and verifying a factual past are all that matter. The anti-
quarians and chroniclers, for example, study the past primarily for its own
sake. Reconstructing what took place, but in the context of what might have
happened, holds greater appeal for others. Human agency is their central
focus and determinism their philosophical foe. For such theorists, historical
contingencies are forever beckoning counterfactual analyses. A third school,
less enamored by the subjunctive, comprehends the past as an elusive yet
erudite teacher, providing useful instruction and guidance to the present in
its preparations for the future. Its adherents assume that the road illumi-
nated by history can be a shortcut to enlightened contemporary policies.
Such justifications for “doing history” need not be mutually exclusive.
Nor should contingency necessarily imply yesteryear’s irrelevance. Uniting
all three goals, this monograph is a quest for evidence of a provable, contin-
gent, and relevant Marshall Plan. It rejects, forcefully, both a narrow utilitar-
ianism and reductive thinking in its approach to the connection between
past and present. Part One reconstructs an empirical Marshall Plan with
many implicit lessons worth learning. Part Two makes the most valuable of
those lessons explicit.
xiv


PART ONE:
A VERIFIABLE PAST