University of Wisconsin Digital Collections
Link to University of Wisconsin Digital Collections
Link to University of Wisconsin Digital Collections
The History Collection

Page View

Military government weekly information bulletin
Number 99 (June 1947)

US proposal for Europe to help self,   p. 12 PDF (652.7 KB)

Page 12

Text of the speech by Secretary of
State Marshall at Harvard University,
proposing that the nations of Europe
agree among themselves on their re-
quirements and on the maximum uti-
lization of the aid which the United
States can extend, follows.
I NEED' not tell you gentlemen
that the world situation is very
serious. That must be apparent to all
intelligent people. I think one diffi-
culty is that the problem is one of
such enormous complexity that the
very mass of facts presented to the
public by press and radio makes it
exceedingly difficult for the man in
the street to reach a clear appraise-
ment of the situation. Furthermore,
the people of this country are distant
from the troubled areas of the earth
and it is hard for them to comprehend
the plight and consequent reactions of
the long-suffering peoples, and the
effect of those reactions on their gov-
ernments in connection with our
efforts to promote peace in the world.
In considering the requirements for
the rehabilitation of Europe the phys-
ical lo sis of life, the visible! delstruic-
tion of cities, factories, mines and
railroads was correctly estimated, but
it has become obvious during recent
months that this visible destruction
was probably less serious than the
dislocation of the entire fabric of
European economy. For the past ten
years conditions have been highly
abnormal. The feverish preparation
for war and the more feverish main-
tenance of the war effort engulfed all
aspects of national economies. Ma-
chinery has fallen into disrepair or
is entirely obsolete. Under the ar-
bitrary and destructive Nazi rule, vir-
tually every possible enterprise was
geared into the German war machine.
Long-standing commercial ties, pri-
vate institutions, banks, insurance
companies, and shipping companies
disappeared, through loss of capital,
.absorption through nationalization, or
by simple destruction. In many coun-
tries, confidence in the local currency
has been severely shaken. The break-
down of the business structure of
Europe during the war was complete.
RECOVERY      has been   seriously
retarded by fact that two years
after the close of hostilities a peace
settlement with Germany and Austria
has not been agreed upon. But even
given a more prompt solution of these
difficult problems, the rehabilitation
of the economic structure of Europe
quite evidently will require a much
longer time and greater effort than
had been foreseen.
There is a phase of this matter
which is both interesting and serious.
The farmer has always produced the
foodstuffs to exchange with the city
dweller for the other necessities of life.
This division of labor is the basis of
modern civilization. At the present
time it is threatened with breakdown.
The town 4nd city industries are not
producing adequate goods to ex-
change with the food-producing farm-
ers. Raw materials and fuel are in
short supply. Machinery is lacking
or worn out.
The farmer or the peasant cannot
find the goods for sale which he de-
sires to purchase. So the sale of his
farm produce for money which he
cannot use seems to him an unpro-
fitable transaction. He, therefore, has
withdrawn many fields from crop cul-
tivation and is using them for grazing.
He feeds more grain to stock and
finds for himself and his family an
ample supply of food, however short
he may be on clothing and the other
ordinary gadgets of civilization.
MEANWHILE people in the cities
are short of food and fuel. So ithe
governments are forced to use their
foreign money and credits to procure
these necessities abroad. This process
exhausts funds which are urgently
needed for reconstruction. Thus a
very serious situation is rapidly de-
veloping which bodes no good for the
world. The modern system of the di-
vision of labor upon which the ex-
change of products is based is in
danger of breaking down.
The truth of the matter is that Euro-
pe's requirements for the next three
or four years of foreign food and
other essential products-principally
from America-are so much greater
than her present ability to pay that
she must have substantial additional
help, or face economic, social, and
political deterioration of a very grave
The remedy lies in breaking the
vicious circle and restoring the con-
fidence of the European people in the
economic future of their own coun-
tries and of Europe as a whole. The
manufacturer and the! farmer through-
out wide areas must be, able and
willing to change their products for
currencies the continuing value of
which is not open to question.
Aside from the demoralizing effect-
on the world at large and the possi-
bilities of disturbances arising as a
result of the desperation of the people
concerned, the consequences to the
economy of the United States should
be apparent to all. It is logical that
the Unlted'States should do whatever'
it is able to do to assist in the return
of normal economic health in the
world, without which there can be no
political stability  and no  assured
Our policy is directed not against
any country or doctrine but against
hunger, poverty, desperation, and
chaos. Its purpose should be the re-
vival of a working economy in the
world so as to permit the emergence
of political and social conditions in
which free institutions can exist. Such
assistance, I am convinced, must not
be on a piece-meal basis as various
crises develop. Any assistance that
this government may render in the
future should provide a cure rather
than a mere palliative.
.(Continued on page 14)
W      e intend to support those
who   are  determined  to
govern themselves in their own
way and who honor the right of
others to do likewise. We intend
to aid those who seek to live at
peace  with  their neighbors,
without coercing or being coer-
ced, without, intimidating or being
President Truman
at Ottawa, 11 June
30 JUNE .1947

Go up to Top of Page