Mr. President, Dr. Conant, members of the Board of Overseers, Ladies
I'm profoundly grateful and touched by the great distinction and
honor and great compliment accorded me by the authorities of Harvard this
morning. I'm overwhelmed, as a matter of fact, and I'm rather fearful of
my inability to maintain such a high rating as you've been generous enough
to accord to me. In these historic and lovely surroundings, this perfect
day, and this very wonderful assembly, it is a tremendously impressive
thing to an individual in my position.
But to speak more seriously, I need not tell you that the world situation
is very serious. That must be apparent to all intelligent people. I think
one difficulty is that the problem is one of such enormous complexity that
the very mass of facts presented to the public by press and radio make
it exceedingly difficult for the man in the street to reach a clear appraisement
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 governments in connection with our efforts
to promote peace in the world.
In considering the requirements for the rehabilitation of Europe,
the physical loss of life, the visible destruction 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 abnormal. The feverish preparation
for war and the more feverish maintenance of the war effort engulfed all
aspects of national economies. Machinery has fallen into disrepair or is
entirely obsolete. Under the arbitrary and destructive Nazi rule, virtually
every possible enterprise was geared into the German war machine.
Long-standing commercial ties, private institutions, banks, insurance
companies, and shipping companies disappeared through loss of capital,
absorption through nationalization, or by simple destruction. In many countries,
confidence in the local currency has been severely shaken. The breakdown
of the business structure of Europe during the war was complete. Recovery
has been seriously retarded by the 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 has 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 and city industries are not producing adequate goods
to exchange with the food-producing farmer. 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 desires to purchase. So the sale
of his farm produce for money which he cannot use seems to him an unprofitable
transaction. He, therefore, has withdrawn many fields from crop cultivation
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, and in some places approaching
the starvation levels. So the 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 developing which bodes no good for the world. The
modern system of the division of labor upon which the exchange of products
is based is in danger of breaking down.
The truth of the matter is that Europe'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 character.
The remedy lies in breaking the vicious circle and restoring the
confidence of the European people in the economic future of their own countries
and of Europe as a whole. The manufacturer and the farmer throughout wide
areas must be able and willing to exchange their product for currencies,
the continuing value of which is not open to question.
Aside from the demoralizing effect on the world at large and the
possibilities 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 United 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 peace.
Our policy is directed not against any country or doctrine but against
hunger, poverty, desperation, and chaos. Its purpose should be the revival
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 piecemeal basis as various crises develop.
Any assistance that this Government may render in the future should provide
a cure rather than a mere palliative. Any government that is willing to
assist in the task of recovery will find full cooperation, I am sure, on
the part of the United States Government. Any government which maneuvers
to block the recovery of other countries cannot expect help from us. Furthermore,
governments, political parties, or groups which seek to perpetuate human
misery in order to profit therefrom politically or otherwise will encounter
the opposition of the United States.
It is already evident that, before the United States Government can
proceed much further in its efforts to alleviate the situation and help
start the European world on its way to recovery, there must be some agreement
among the countries of Europe as to the requirements of the situation and
the part those countries themselves will take in order to give proper effect
to whatever action might be undertaken by this Government. It would be
neither fitting nor efficacious for this Government to undertake to draw
up unilaterally a program designed to place Europe on its feet economically.
This is the business of the Europeans. The initiative, I think, must come
from Europe. The role of this country should consist of friendly aid in
the drafting of a European program and of later support of such a program
so far as it may be practical for us to do so. The program should be a
joint one, agreed to by a number, if not all, European nations.
An essential part of any successful action on the part of the United
States is an understanding on the part of the people of America of the
character of the problem and the remedies to be applied. Political passion
and prejudice should have no part. With foresight, and a willingness on
the part of our people to face up to the vast responsibility which history
has clearly placed upon our country the difficulties I have outlined can
and will be overcome.
I am sorry that on each occasion I have said something publicly in
regard to our international situation, I've been forced by the necessities
of the case to enter into rather technical discussions. But to my mind,
it is of vast importance that our people reach some general understanding
of what the complications really are, rather than react from a passion
or a prejudice or an emotion of the moment. As I said more formally a moment
ago, we are remote from the scene of these troubles. It is virtually impossible
at this distance merely by reading, or listening, or even seeing photographs
or motion pictures, to grasp at all the real significance of the situation.
And yet the whole world of the future hangs on a proper judgement. It hangs,
I think, to a large extent on the realization of the American people, of
just what are the various dominant factors. What are the reactions of the
people? What are the justifications of those reactions? What are the sufferings?
What is needed? What can best be done? What must be done?
Thank you very much.
Secretary of State, George C. Marshall - June