Lot 122, Box 13113
The Assistant Chief of the Division of Commercial Policy (Moore) to the Director of the Office of International Trade Policy (Wilcox) at Geneva1
Dear Clair: The “Marshall Plan” has been compared to a flying saucer—nobody knows what it looks like, how big it is, in what direction it is moving, or whether it really exists. Nevertheless, all of us here who must cope with this mysterious phenomenon—Paul, Bob, [Page 240] Joe, Bill Phillips2—feel that you should have a detailed account of the situation insofar as we have been able to follow it.
It gradually became increasingly clear last spring that a new approach would be needed. The balance-of-payments situation was obviously deteriorating. Paul kept pushing for adequate information and analysis of this problem (he sent you a copy of his memorandum). The first comprehensive study in the Department was a report prepared for a special SWNCC subcommittee (copy enclosed)3 which Van Cleveland4 and I pulled together on the basis of such information as we could collect at that time. This report led directly to Acheson’s Mississippi speech (written by Joe Jones) which put the problem clearly before the people and Congres.5
In the meantime, Congressional reaction to the Greek–Turkish program indicated strongly that such a piece-meal approach to the problem of foreign aid could not be continued much longer. The next request would undoubtedly have raised an insistent demand for the total bill. For this reason the Korean legislation, although badly needed, was withdrawn.
The third element was a growing recognition of the serious character of the crisis in Western Europe. When Kennan was first appointed to the Policy Planning job he decided to concentrate on this area. He felt that the failure to reach agreement on Germany at Moscow was due primarily to Soviet anticipation of continued deterioration in France, Italy and Western Germany plus hope for a U.S. depression. It was essential to improve the Western European situation in order to prevent further weakening in our bargaining power.
This was the Departmental frame of mind when Mr. Clayton came back from Geneva. He prepared a memorandum shortly after his return outlining the basic elements of a new approach to the European problem. These were incorporated in a paper which the Planning Staff sent to the Secretary proposing this approach as a basis for further study. Kennan heard nothing further from it until he read the newspapers shortly thereafter, and realized that the basic elements had been presented at Harvard. The Secretary has tremendous power of decision and his batting average is phenomenally high. He made up his mind on most of the major decisions of the war in just as short a time.
[Page 241][Here follow several pages detailing the progress of events and the thinking in the Department of State regarding the Marshall Plan from June 5 to July 28.]
Sincerely,
- Clair Wilcox was vice-chairman of the U.S. Delegation to the trade negotiations then in progress at Geneva.↩
- Probably Paul Nitze, Deputy Director; J. Robert Schaetzel, Special Assistant to the Director; Joseph Coppock, Adviser; all of the Office of International Trade Policy, and William T. Phillips, Special Assistant to the Chief of the International Resources Division.↩
- For text of report, see p. 204.↩
- Harold Van Buren Cleveland, Assistant Chief, Division of Investment and Economic Development.↩
- For text, see Department of State Bulletin, May 18, 1947, pp. 991–994.↩