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Role of Marshall Plan in European Recovery

Monday, November 15th, 2021

The Marshall Plan, officially known as the European Recovery Program (ERP), was an American initiative to help Western Europe rebuild its economies in the aftermath of World War II. It was named after the United States Secretary of State, George C.. Marshall and consisted of aid both in the form of grants and loans. The Plan was in effect for four years, starting on 3 April 1948. It was based on a report written by Lewis H. Brown at the request of General Lucius D. Clay. The report was entitled “A Report on Germany.”

Purpose of the Marshall Plan

The purpose of the Plan was not to counteract the destruction caused by WWII as much as it looked toward the future. The Marshall Plan was designed to stimulate economic recovery of the nations severely impacted by the war. Plan proponents believed that modernization of industrial and business practices was needed along with removal of trade barriers, increased productivity and prevention of the spread of Communism.

General George C. Marshall, author of the Marshall Plan, photo taken in 1947, courtesy of Wikimedia Commons. www.walled-in-berlin.com

Recipients of Marshall Plan Aid

The United States provided in excess of $12 billion in economic assistance. Of the eighteen countries receiving aid, the largest recipient was the United Kingdom securing $3,297 billion. France received $2,296 billion, West Germany received $1,448 billion, Italy $1,203 billion and the Netherlands $1,128 billion. Although eligible for aid, the Soviet Union chose not to participate because it did not want the US to get any kind of control over communist economies. The Soviet Union also denied Eastern Bloc countries the opportunity to participate.

Effectiveness of the Plan

By 1952, the year the funding ended, the economy of every participating country had surpassed pre-war levels. Output was at least 35% higher than in 1938. However, most historians reject the idea that the Marshall Plan alone was responsible for European recovery. Most believe that it sped European recovery, but did not initiate it.

Germany and the Marshall Plan

In West Germany, bombing had destroyed 5,000,000 houses and apartments, and 12,000,000 refugees from former eastern territories added to the crisis. In 1945–1946 housing and food were difficult to impossible to obtain. And the disruption of transportation, infrastructure, markets and finances slowed a return to normality even more. In addition, in January 1946, the Allied Control Council placed a cap on German steel production. The maximum allowed was set at about 5,800,000 tons of steel per year, the equivalent to 25% of the pre-war production level. Many steel plants were dismantled. The plan was to reduce Germany to the standard of living it had known at the height of the Great Depression in 1932.

Germany Linked to Recovery of All of Western Europe

By mid-1947, the U.S. realized that economic recovery in Europe could not go forward without the reconstruction of the German industrial base because the entire economy of Europe was interlinked. To reduce Germany to a “pastoral state,” as proposed by Henry Morgenthau, would be a mistake. Instead, the “complete revival of German industry, particularly coal mining” became of primary importance to American security. Former US Chairman of the Federal Reserve Bank, Alan Greenspan, gives most credit to German Chancellor Ludwig Erhard for Europe’s economic recovery.

The Soviet Union and the Marshall Plan

The Soviet Union had been ravaged by WWII as much as Western Europe and imposed large reparation payments on Austria, Finland, Hungary, Romania and especially East Germany. These countries were forced to pay vast cash sums and ship large amounts of supplies to the USSR. In essence, the Soviet Union received reparations in the form of monies and goods that were equivalent in value to what the eighteen Western European countries received in the form of Plan aid. To reduce the effects of the Marshall Plan, the USSR developed its own economic plan, known as the Molotov Plan.

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Walled-In is my story of growing up in Berlin during the Cold War. Juxtaposing the events that engulfed Berlin during the Berlin Blockade, the Berlin Airlift, the Berlin Wall and Kennedy’s Berlin visit with the struggle against my equally insurmountable parental walls, Walled-In is about freedom vs. conformity, conflict vs. harmony, domination vs. submission, loyalty vs. betrayal.

Tags: A Report on Germany, Alan Greenspan, Allied Control Council, European Recovery Program, George Marshall, Henry Morgenthau, Lewis H. Brown, Lucius D. Clay, Ludwig Erhard, Marshall Plan, Molotov Plan
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Berlin Blockade and the Cold War

Monday, April 25th, 2016

Until the Berlin Blockade began in 1948, the United States had no intention of occupying West Berlin beyond the establishment of a new West German government in 1949. But the subsequent Berlin Blockade and ensuing Cold War kept the U.S. in West Berlin until 1994.

An important omission in the Potsdam Agreement

In the summer of 1945, in the aftermath of World War II, the three victorious powers (the United States, Great Britain and the Soviet Union) signed the Potsdam Agreement. This document laid down the legal framework for the occupation of Germany and re-affirmed rules previously hammered out at the Yalta Conference. Specifically, the Potsdam Agreement addressed the terms of the military occupation, division, territorial changes, reparations and reconstruction of Germany. Accordingly, Germany was divided into three zones. Berlin, the capital, was also divided into three sectors, despite the fact that the city was located 100 miles inside Soviet occupation territory. Three air corridors from West Germany to West Berlin had been negotiated in the Potsdam Agreement, but rail, road and water access were never discussed. This omission was to be the basis for endless frustration.

Quadripartite administration of Germany and Berlin

The Allies established the Allied Control Council http://walled-in-berlin.com/j-elke-ertle/allied-control-council-governs-germany/ to execute resolutions concerning Germany and the Allied Kommandatura http://walled-in-berlin.com/j-elke-ertle/allied-kommandatura-governs-berlin/ to implement resolutions concerning Berlin. When France joined the Allies as the fourth occupation power, its territories of Germany and Berlin were carved from the American and British occupation zones and sectors. The four Allies agreed to govern their respective zone and sector as they deemed fit, but unanimous agreement would be required in matters that concerned all of Germany or all of Berlin.

Events leading up to the Berlin Blockade

By 1948, the relationship between the four powers had gone sour. The three western powers wanted to help rebuilt Germany to stabilize the European continent, with the hope that it would prevent Communism from spreading. The Soviets preferred a weak Germany and an unstable continent, with the hope that it would provide fertile ground for the spread of Communism. It did not take long before the Soviets regretted having agreed to share the city of Berlin with the Western Allies. Now they wanted nothing more than for the three western powers to get out of West Berlin. Quadripartite control became unworkable. On 20 March 1948, the Allied Control Council met for the last time. On 16 June 1948, the Allied Kommandatura assembled for the last time. The Soviet delegation walked out for good.

After the Soviets had left the table, the three Western Allies made decisions concerning their occupation territories without Soviet input. On 21 June 1948, the Western Allies introduced a new currency in the western zones and sectors. They introduced the Deutsche Mark. The Soviets, who had not been consulted, objected vehemently. On 22 June 1948, the Soviets also introduced their own new currency in the eastern zone.

From Berlin Blockade to Berlin Airlift

On 24 June 1948, The Soviets blocked all rail, road and water connections between West Germany and West Berlin. They offered to lift the blockade only if the Western Allies agreed to withdraw the Deutsche Mark from West Berlin. The Western Allies refused. The Soviets stopped supplying agricultural goods to West Berlin and cut off the electricity generated in the Soviet zone and relied upon by the three western zones of Berlin. There was only enough food to last for 35 days and enough coal to last for 45 days.

With surface traffic between West Germany and West Berlin severed and in the absence of negotiated ground access rights to the city, the only remaining possibility was to try to supply West Berlin from the air. On June 26, 1948, American military commander Lucius D. Clay http://walled-in-berlin.com/j-elke-ertle/lucius-d-clay-berlins-defender-of-freedom/ had the first planes in the air. The Berlin Airlift began and the Cold War heated up. The Berlin Blockade lasted from 24 June 1948 to 12 May 1949.

Tags: Allied Control Council, Allied Kommandatura, Berlin Blockade, Cold War, Deutsche Mark, Lucius D. Clay, Potsdam Agreement, quadripartite administration
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Lucius D. Clay – Berlin’s defender of freedom

Monday, April 18th, 2016

General Lucius D. Clay died in 1978. At his gravesite at West Point you’ll see a memorial. It was erected by the people of West Berlin and reads: Wir danken dem Bewahrer unserer Freiheit (We thank the defender of our freedom). Those words were spoken from the heart because General Clay literally saved West Berlin from starvation during the Berlin Blockade. I was only three years old when the blockade started in 1948, but I am keenly aware that I would not write about it today, had it not been for the actions of General Lucius D. Clay. Years later, when President John F. Kennedy dispatched Vice President Lyndon B. Johnson together with Lucius D. Clay to Berlin to shore up the spirits of Berliners during the Berlin Wall crisis, it was Clay whom we went to see. It was Clay whom we trusted.

General Lucius D. Clay and the Berlin Blockade

So how did the Berlin Blockade come about and what did General Lucius D. Clay do to earn the respect and the hearts of West Berlin’s population? Following World War II, Germany and the city of Berlin were divided into four sectors and occupied by British, French, American, and Soviet forces. On 23 June 1948, in an attempt to revive the German economy, the three western Allies issued a new currency, the Deutsche Mark. The Soviets vehemently opposed this action and in return blockaded all land and water access routes to West Berlin. With this move, they hoped to force the Western Allies take back the new currency and subsequently hand West Berlin to the Soviets. By blocking all deliveries of food and electricity they hoped to starve West Berliners into submitting to Soviet control.

At that time, Clay was military governor of the American section of occupied Germany. He decided to supply Berlin by air. Lucius D. Clay gave orders even before having received authorization from President Harry S. Truman. Within three days of the start of the Berlin Blockade, the Berlin Airlift started. It was an incredible logistical feat because never before had a population of 2 million been supplied from the air. But with the help of a man by the name of William H. Tunner, Clay fine-tuned the Airlift until planes landed every three minutes, twenty-four hours a day. Over the course of the next eleven months, General Clay directed some 277,800 flights, carrying 2.3 million tons of food and fuel to West Berlin. http://www.u-s-history.com/pages/h1793.html.

The Berlin Airlift lasted 324 days. When the Soviets realized that the Western Allies could supply West Berlin indefinitely, they threw in the towel. The Berlin Blockade ended on 12 May 1949. It was Clay’s decisiveness and tenacity that saved Berliners from starvation.

General Lucius D. Clay (1898 to 1978)

Who was this man, General Lucius D. Clay?

Born in 1898 in Georgia to U.S. Senator Alexander Stephens Clay and Sarah Francis, Lucius DuBignon Clay was the youngest of six children. He graduated from West Point in 1918, became a military engineer and held various civil and military engineering posts during the 1920s and 1930s. During that time, he earned the reputation of being a hard-charging, chain-smoking, tireless and decisive worker who could turn chaos into order.

From 1947 to 1949, Clay was commander in chief of the U.S. Force in Europe and the military governor of war-torn Germany’s American Zone. General Lucius D. Clay also directed “A Report on Germany,” which became one of the source documents for The Marshall Plan. After retiring as a four-star general in 1949, Clay went into the private sector and became a successful business executive. Over time, he served on 18 corporate boards and became the principal architect of our Interstate highway system.

Tags: A Report on Germany, Berlin Airlift, Berlin Blockade, currency reform, Deutsche Mark, Lucius D. Clay, Marshall Plan, We thank the defender of our freedom, West Berlin, William H. Tunner
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