Well, I said I'd have an update in the next few days, and here it is. I'm a touch disappointed no one noticed, or at least commented on, Otto Skorzeny's cameo appearance in the last update. How times have changed.
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Prophets of a New Order - Part X
It would have been a simple matter for Truman to have declared the election of democratic governments in France and Germany as victories for democracy and the start of a new era in world history. It would have been easy for the President withdraw American troops, demobilize the victorious armies, and gird the Democratic Party for the approaching 1948 elections. No doubt he would have enjoyed the approval of many Americans across the political spectrum for taking such a course. But it was not a course President Harry Truman was going to take.
Peace and democracy were fragile things in the immediate post-war period in Europe. An victory for the moderate political forces of the major nation-states required more than just a single electoral triumph. Cities and homes for millions of displaced refugees needed to be rebuilt, jobs created for the countless wandering demobilized soldiers, food for the hungry, medicine for the sick, and so on. The physical damage to Europe alone staggered the imagination of American occupation authorities. The process of rebuilding broken countries would be a long, hard, and, most importantly, hugely expensive process.
Nor was Europe alone in its misfortunes. The United States, having enjoyed a resurgence of economic vitality unknown since the end of the Great War, was now on the brink of slipping back into its Depression. With the war over, Washington moved quickly to cancel or curtail its innumerable military appropriations contracts. Companies that hard poured millions of dollars investing in vast new industrial complexes to meet the military's enormous demands found themselves in the possession of vast stockpiles of useless equipment and gigantic factories that would need to be retooled for the production of civilian and consumer goods.
But the end of the fighting meant more than the start of the expensive process of demobilizing from a state of total war. Simply put, even if American business could afford the conversion process, there was simply no market available to satisfy the inevitable upswing in supply. The United States had already suffered the debilitating affects of overproduction in the 1920's, as a victorious Germany seized Europe's colonies, muscled American merchants out of their markets, and France and Britain collapsed into anarchy. Unless something were done to prevent a repetition of the past, the Great Depression would return, the specter of mass unemployment would rise up again, and the very fabric of American society might well be threatened again.
President Truman, his advisors, and many Congressmen recognized the dangers immediately. But, as had been the case two decades earlier, there was no clear idea of how to solve the dilemma. Some of the more hawkish officials and private citizens, notably General Curtis LeMay, Pat Hurley, and George Patton argued that continued militarization was key. Having displaced Germany and France as the world's preeminent power, it was imperative that the United States boast a military muscle capable of defending that hegemonic position and enforce American interests. There was some truth to this argument. The responsibilities of policing occupied Europe had clearly overwhelmed the entire military's capacity; in Africa, which was ostensibly placed under American stewardship, was left virtually ungoverned. The American presence in Nigeria alone constituted little more than a hundred American officials, security, and staffers. With an indomitable military force, the United States could then simply force its way into foreign markets as Germany had done previously.
But Truman was not one to readily contemplate the thought of American world empire. Instead, the President turned to a much less aggressive and, as his interpretation of American history claimed, un-American approach than that presented by the government hawks. Though American business continued to struggle despite the years of war-time economic prosperity, the federal government remained arguably the world's strongest, most vital creditor. In the months following Henry Morgenthau's resignation, the new Commerce Secretary, Averell Harriman, had devised a preliminary economic project in conjunction with Dean Acheson, Undersecretary of State since 1944.
The duo envisioned what amounted to a massive American investment in rebuilding Europe. Overseen and coordinated by the federal government and in cooperation with local leaders, the United States would pour billions of dollars in capital, equipment, and supplies into key areas of the European national economies to kick-start reconstruction. At the same time, new, global financial institutions, including a Bank of the World and Reconstruction Bank would be created, establishing a stable system of currency exchange rates supported by the American dollar. A final capstone to this ambitious project would be the elimination of all non-revenue tariffs and an end to protectionism.
Harriman and Acheson's plan was not without its risks. There existed a danger that the United States, already perilously close to a recession, would either fail to provide sufficient relief to stabilize the European economy or over-invest and subsequently unhinge the nascent financial structure. Further, an abrupt end to the program through, for instance, cancellation by a hostile political faction in '48 could provoke disastrous instability. The Commerce Secretary and State Undersecretary nevertheless argued their case persuasively. George Marshall was brought on board in mid-February 1947, and Harriman tapped his pool of friends and associates in the American business community to rally support for the program throughout March. When Harriman and Marshall presented Truman with the proposal on March 31, the President was immediately interested, but recognized the inevitable opposition the proposal would engender from many Congressmen and particularly the hawks.
President Truman with (from left to right) George Marshall, Paul Hoffman, and Averell Harriman, April 1947.
For the next two months, the President moved cautiously forward, beginning by sounding out Senators and businessmen who would support the measure. The whole project was dubbed the Marshall Plan, largely masking Harriman and Acheson's responsibility in favor of the vastly more popular Secretary of State. Truman finally played his hand in early June, enlisting Marshall to speak at the Yale University graduation ceremony. Scant on details, Marshall nevertheless laid out the Plan's overarching premise and underscored the need for quick, decisive action to pull the European economy out of the quagmire. The next day, Truman's plan kicked into high-gear. Fielding questions on Marshall's comments, the President revealed that the United States was preparing to offer a massive economic relief program to the devastated countries of Europe. In the following days and weeks, and flood of support poured in, some orchestrated by Truman, Harriman, or Acheson, others unbidden. Mexico, Cuba, and Brazil all voiced their approval and willingness to contribute, while the Dutch Foreign Secretary van Blokland announced its own reconstruction efforts in Belgium were rapidly running out of steam.
The President's initial surge won the Marshall Plan wide support from the American people, but the abruptness of Truman's approach stiffened opposition within the Senate. Republican Senator Arthur Vandenberg and several of his Republican colleagues gave the proposed bill strong bi-partisan support, but the opposition was just as bi-partisan. Conservative Republicans and former Nationals, lead by Senator Taft, believed that the Marshall Plan threatened to waste the United States' resources getting the country's competitors back on their feet, and would tie American interests too closely with the economies of Europe. Leftists and syndicalists viewed the proposed financial apparatus as 'Wall Street chicanery' and merely a mechanism for American capitalists to squeeze profits out at the expense of hapless European working classes.
Unfortunately for the Marshall Plan's detractors, such opposition could not be organized effectively together in common cause, allowing Truman to dominate the moderate middle-ground. Support from the business community continued to flow in, drawing more Republicans into the President's camp, while the sudden announcement from Bukharin in a speech in Brest-Litovsk revealed Russia's willingness to join the American financial plan silenced many Syndicalist critics. The Marshall Plan was passed, with Congress authorizing a preliminary relief sum of $7.5 billion. Though the long and tedious process of doling out the relief aid and negotiating its use with the provisional European governments remained, the reconstruction of Europe was underway.
