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Thursday, November 20, 2008

The 1947 Marshall Plan

By Rocky Wilson
Author of Sharene:
Death: A Prerequisite For Life

The 1947 Marshall Plan

Thanks in large part to U.S. Secretary of State George C. Marshall, who birthed the idea, the 1947 Marshall Plan offered about $13 billion in aid to 17 European countries physically, economically, and politically devastated during World War II.

Those countries receiving reparation aid from 1948 until 1952 were:

* Austria
* Belgium
* Denmark
* France
* Germany
* Great Britain
* Greece
* Iceland
* Ireland
* Italy
* Luxembourg
* the Netherlands
* Norway
* Portugal
* Sweden
* Switzerland
* Turkey

George C. Marshall’s plan, first introduced in a June 5, 1947, commencement address at Harvard University, suggested that the European nations themselves establish a plan for reconstruction, with the U.S. offering assistance.

Key dates for the Marshall Plan include:

* July 12, 1947, commencement of a two-month, 17-country European conference in Paris to draft a reparation plan

* April 2, 1948, U.S. Congress, with some revisions to the European plan, passes act authorizing the Marshall Plan

* April 3, 1948, U.S. President Harry S. Truman signs the legislation into law

* December 31, 1951, due to escalation of the Korean War, the planned four-year Marshall Plan concludes six months early

The problems facing European countries immediately following World War II were widespread and shared:

* capital equipment, if not obsolete, was in need of wholesale repair

* depleted gold and dollar reserves made it difficult, if not impossible, to import essential items

* food shortages and inflation demoralized work forces

* coal, steel, and other basic resources were in short supply

* the European winter of 1946-1947 was said to be the most severe in 100 years

The American aid shared through the Marshall Plan to the 17 European nations was given in dollar grants, grants-in-kind, and loans. The two countries receiving the largest percentage of funds distributed through the Marshall Plan were Great Britain (23 percent) and France (20 percent.)

Ways in which Marshall Plan funds were spent included:

* the purchase and shipment of surplus American agriculture products, most notably wheat

* the purchase and shipment of capital goods

* financing a program that sent European businessmen to the U.S. to study American production techniques

* distributing information and holding counseling sessions for owners of small businesses

* conducting economic surveys of infrastructure needs in different countries and implementing some of those findings

The success of the Marshall plan can be charted mathematically:

* Western Europe’s aggregate gross national product increased 32 percent

* Western Europe’s aggregate agricultural production jumped 11 percent above prewar levels

* Western Europe’s industrial output exceeded 1938 figures by 40 percent

Sir Winston Churchill, a man of much wisdom, described the Marshall Plan as “the most unsordid act in history.”

Possibly the most important lesson learned from the 1947 Marshall Plan is how economic weapons can help solve diplomatic problems, even develop newer and stronger allies in the process.

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