The Plan

In the final, scurrying hours before adjournment, President Harry Truman last week sent to Congress his specifications for restoring peace & prosperity to Western Europe under the European Recovery Program. It was a momentous document. In 9,000 sober, deliberate words, the President asked the U.S. to pit its full economic strength against the destruction of war and the disruptive forces of aggressive Communism.

For Europe, the U.S. decision would be of critical importance. Said the President: "Our decision will determine in large part the future of the people of that continent. It will also determine in large part whether the free nations of the world can look forward with hope to a peaceful and prosperous future as independent states, or whether they must live in poverty and in fear of selfish totalitarian aggression."

For the U.S., it was a scarcely less critical step. "If Europe fails to recover, the peoples of these countries might be driven to the philosophy of despair--the philosophy which contends that their basic wants can be met only by the surrender of their basic rights to totalitarian control. Such a turn of events would constitute a shattering blow to peace and stability in the world. It might well compel us to modify our own economic system and to forgo, for the sake of our own security, the enjoyment of many of our freedoms and privileges."

The plan, considerably expanded and revised since its germ was first proposed by Secretary Marshall at Harvard last June, took into account the use of Western Europe's last unexpended cash & credits, and the possibility of aid from other sources. But it frankly recognized that the U.S. would have to pay most of the bill. Its main points:

Cost: $17 billion between April 1948 and June 1952 (including $600 million for Western Germany). Initial appropriation: $6.8 billion for the first 15 months.

Repayment: Dollars would be supplied as outright grants or as loans (through funds supplied to the Export-Import Bank) according to each nation's ability to repay. One possible asset for the U.S.: a chance to get and stockpile such critical raw materials as tin, natural rubber, industrial diamonds, quinine, manganese, chromium, copper, lead, zinc.

Administration: By an Economic Cooperation Administration, headed by a $20,000-a-year administrator, a deputy administrator and a $25,000-a-year roving ambassador for liaison work abroad. ECA would be responsible for continuing reassessment of each nation's needs, would "work with rather than supplant existing agencies" such as State (on foreign policy), Agriculture (food), Commerce (allocation of items in short supply), the National Advisory Council (financial policy).

Participants: The 16 Paris conferees* Western .Germany. The door was left open for other European nations which might subscribe to the plan. A special plan for China aid would be presented during the next session of Congress.

Conditions: The Paris conferees had already agreed to take steps toward closer cooperation and greater self-help (TIME, Oct. 6). Now each participant would also be bound by bilateral treaties with the U.S. to boost production, stabilize finances, cut trade barriers, provide the U.S. with regular progress reports.

This was no short-term relief program. It was a plan for long-term recovery, based on Western Europe's most strenuous efforts to help itself. The planners counted on reviving trade between Eastern and Western Europe, on exports from other Western Hemisphere nations* to provide many of the goods Europe would need.

But the U.S. itself would have to supply a large share of the goods as well as the dollars. A sampling of the goods: 29 million tons of grain (worth $2.5 billion), 2 million tons of cotton ($1.9 billion), 6.5 million tons of finished steel ($719 million), 152,000 trucks; 26,000 freight cars, 200 merchant ships (and 300 more under charter).

Stupendous as this plan was, it had been trimmed, said the President, to a bony minimum.

If the U.S. provided less, "our efforts will be dissipated and the chances for political and economic stability in Europe are likely to be lost."

Self-Denial. Could the U.S. afford it? The President insisted that every report he had studied showed that the U.S. could. Since V-J day, the U.S. had already poured out $15 billion in gifts and loans to the victims of World War II. The full cost of finishing the job, he said, would amount to less than 3% of the national income (and 5% of the bill for World War II), would not boost exports above present levels.

The President did not, however, minimize the difficulties. The plan would admittedly call for sacrifice and self-denial from the U.S. It would encounter many obstacles abroad. Said the President: "We must not be blind to the fact that the Communists have announced determined opposition to any effort to help Europe get back on its feet. There will unquestionably be further incitements to strike . . . for the purpose of bringing chaos in the hope that it will pave the way for totalitarian control."

But, said Harry Truman: "If confidence and optimism are re-established soon, the spark they provide can kindle united efforts to a degree which would substantially accelerate the progress of European recovery. . . ."

Few Congressmen last week had time to listen to these words. Senator Arthur Vandenberg, an old newsman himself, had released the text of the President's message to the press before it had been read on Capitol Hill. In the Senate, only a handful sat through the clerk's reading. In the House, only the introduction was read.

Congress was scrambling pell-mell for its Christmas vacation. But the lines of battle were already being drawn. One indication of the sharpshooting ahead came from quick-firing Senator Bob Taft, who has long protested that the U.S. economy could not stand any such load as the President proposed. As for Europe, he said: "People don't completely collapse. They go on living anyway."

When Congress returned in January, the most critical debate since the end of the war would begin.

* Australia, Belgium, Denmark, France, Greece, Iceland, Ireland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, Britain.

* For ERP's effect on the rest of the Western Hemisphere, see LATIN AMERICA and CANADA.

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