[Congressional Record Volume 143, Number 68 (Wednesday, May 21, 1997)]
[House]
[Pages H3106-H3108]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 REAFFIRMING COMMITMENT OF UNITED STATES TO PRINCIPLES OF THE MARSHALL 
                                  PLAN

  Mr. GILMAN. Mr. Speaker, I move to suspend the rules and agree to the 
concurrent resolution (H. Con. Res 63) expressing the sense of the 
Congress regarding the 50th anniversary of the Marshall plan and 
reaffirming the commitment of the United States to the principles that 
led to the establishment of that program.
  The Clerk read as follows:

                            H. Con. Res. 63

       Whereas on June 5, 1947, in a speech at Harvard University, 
     then-Secretary of State George C. Marshall proposed the 
     establishment of a joint American-European program to provide 
     assistance, ``so far as it may be practical for us to do 
     so,'' to assist the countries of Europe to recover from the 
     devastation of World War II, and that program was 
     subsequently called ``The Marshall Plan'' in recognition of 
     the pivotal role of Secretary of State Marshall in its 
     establishment;
       Whereas then-President Harry S Truman had earlier 
     enunciated the principle of assisting democratic countries 
     which faced the threat of communist aggression and thus laid 
     the foundation for the Marshall Plan with the ``Truman 
     Doctrine'' which provided economic and military assistance to 
     Greece and Turkey, and this farsighted policy represented a 
     reversal of longstanding United States policy of avoiding 
     peacetime involvement in foreign military and political 
     affairs;
       Whereas the Marshall Plan was developed, refined, and 
     enacted with the broad bipartisan involvement of the Congress 
     of the United States, including in particular the efforts of 
     Senator Arthur H. Vandenberg of Michigan and Congressman 
     Christian A. Herter of Massachusetts;
       Whereas the Congress provided an estimated $13,300,000,000 
     to assist the sixteen European countries which participated 
     in the Marshall Plan during the four-year period of its 
     existence, and this material contribution represented a 
     significant sacrifice by the American people;
       Whereas the assistance provided under the Marshall Plan 
     served to ``prime the pump'' to stimulate the economies of 
     the participating European countries and resulted in an 
     average growth of 41 percent in industrial production and an 
     average growth of 33.5 percent in per capita gross national 
     product during the four years of the program;
       Whereas the spectacular economic revival of the countries 
     of Western Europe would not have been possible without the 
     creativity, technical skills, managerial competence, and hard 
     work of the European peoples; nevertheless, the Marshall Plan 
     was a vital element in assisting the European peoples in the 
     postwar economic recovery;
       Whereas the multinational economic cooperation required and 
     encouraged by the Marshall Plan was a significant impetus in 
     fostering transnational European economic cooperation and 
     unity which ultimately helped to pave the way for the North 
     Atlantic Treaty, in developing the multifaceted relationship 
     between the United States and the countries of Europe, and in 
     contributing to the establishment of the European Union; and
       Whereas 1997 marks the 50th anniversary of the original 
     speech by Secretary of State George C. Marshall calling for 
     the establishment of the Marshall Plan: Now, therefore, be it
       Resolved by the House of Representatives (the Senate 
     concurring), That the Congress--
       (1) urges all Americans on the 50th anniversary of the 
     Marshall Plan to reflect upon the significance of this 
     program as a concrete embodiment of the commitment of the 
     United States to fostering peaceful relations with the 
     economic prosperity of the countries of Europe;
       (2) reaffirms the commitment that was expressed in the 
     original Marshall Plan (``Economic Cooperation Act of 1948,'' 
     sec. 102, Public Law 80-472) was enacted--namely, that 
     ``intimate economic and other relationships exist between the 
     United States and the nations of Europe,'' that extensive and 
     friendly relations with the nations of Europe and with the 
     community of European nations is vital to the promotion of 
     ``the general welfare and national interest of the United 
     States'' and that the prosperity and security of Europe are 
     essential to ``the establishment of a lasting peace''; and
       (3) acknowledges and commends the efforts of those 
     countries which originally participated in the Marshall Plan 
     to assist the countries of Central and Eastern Europe and the 
     newly independent republics of the former Soviet Union in 
     their efforts to develop market economies and democratic 
     political systems as a reflection of the same generous spirit 
     that motivated the people of the United States to help these 
     Western European countries fifty years ago.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York [Mr. Gilman] and the gentleman from Indiana [Mr. Hamilton] each 
will control 20 minutes.
  The Chair recognizes the gentleman from New York [Mr. Gilman].
  (Mr. GILMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. GILMAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this timely resolution draws our attention to the 50th 
anniversary of the Marshall plan which will be celebrated on June 5. It 
reminds us of the grand commitment made by Secretary of State George 
Marshall and President Harry Truman, supported by a farsighted 
bipartisan group of Congressmen and Senators. It was this commitment 
that made possible the economic prosperity which we have now come to 
take for granted in Western Europe and allowed democratic institutions 
to develop and thrive.
  Most importantly, it allowed the peoples of Western Europe, who are 
now our closest allies, to emerge from the ashes of the Second World 
War and to rebuild their lives anew.
  As we reflect back on those troubled and uncertain times that 
followed the end of World War II, we should renew the commitment to the 
principles that underlaid our actions at that time, and remember that 
there remain people in Central and Eastern Europe as well as the former 
Soviet Union who were prevented from benefiting from the Marshall plan, 
and who now look to us to do for them what was done for the Europeans 
some 50 years ago.
  Fortunately, today it is not up to our Nation alone to perform that 
task, a task made even more daunting by the legacy of the Communist 
system that prevailed for all the years that Western Europe was 
developing and getting back on its feet. Today we can count on the 
support of those very same nations that benefited from the vision that 
gave birth to the Marshall plan to do for the New Independent States 
what was done for them half a century ago.
  This resolution rightfully acknowledges and commends the efforts of 
our friends and allies to assist the newly independent nations of 
Central and Eastern Europe and of the former Soviet Union to develop 
free market economies and democratic political systems.
  I want to commend the gentleman from California [Mr. Lantos] for his 
good work in seeing to it that we accord this important anniversary its 
due recognition, and I am pleased to have been an original cosponsor of 
this resolution. I also commend our ranking minority member, the 
gentleman from Indiana [Mr. Hamilton] in helping us bring this measure 
to the floor at this time. I ask the House to lend itself unanimous 
support to this measure.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HAMILTON. Mr. Speaker, I yield myself such time as I may consume 
and I rise in support of the resolution.
  Mr. Speaker, I simply want to underline the importance of 
commemorating the 50th anniversary of the Marshall plan. The Marshall 
plan laid the groundwork for the strong and close postwar political, 
economic, and military relationship between the United States and 
Europe. And, of course, that relationship remains the cornerstone of 
our security policy today.
  I think, without any question, the Marshall plan was one of the 
greatest events in American political history and American diplomatic 
history. I want especially to thank my friend and colleague from 
California, Mr. Lantos, for his leadership and for his foresight in 
bringing this resolution before us. And of course, I am grateful to the 
gentleman from New York [Mr. Gilman] and the other cosponsors of House 
Concurrent Resolution 63, but it is really the gentleman from 
California [Mr. Lantos] who deserves the chief credit, I think, for 
bringing this resolution forward.
  It is a very important resolution. It not only underscores the close 
transatlantic relationship that exists today, it comes at a time when 
many Europeans are anxious to underscore the importance of the 
transatlantic tie, at least as we talk about the enlargement of NATO 
and some of the concerns that our European friends have about the 
growing isolationist tendencies in this country and in the Congress.

[[Page H3107]]

  It is also important, I think, that we express our support now for 
the aspect of the resolution calling for efforts by the European 
beneficiaries of the Marshall plan to turn now to help the emerging 
democracies in Central and Eastern Europe. This is an important 
resolution, and I urge its support.
  Mr. Speaker, I yield 5 minutes to the gentleman from California [Mr. 
Lantos].
  Mr. LANTOS. Mr. Speaker, I want to thank my friend from Indiana, Mr. 
Hamilton, for yielding me the time, and I want to thank the 
distinguished gentleman from New York, Mr. Gilman, and the 
distinguished Democratic ranking member, Mr. Hamilton, for supporting 
my resolution.
  Mr. Speaker, the end of the Second World War found Europe at a hinge 
of history. And had it not been for the Marshall plan and related 
events, the whole history of mankind during the last half century and 
beyond could have turned out in a totally different and in a totally 
ugly fashion.
  The Soviet empire was ready to expand its control and influence 
beyond Eastern and Central Europe to Western Europe, and it was the 
incredible vision and courage and determination of U.S. bipartisan 
foreign policy leadership that stood in the way. It began with 
President Truman's enunciation of the Truman Doctrine, which provided 
economic and military assistance to Greece and Turkey at a most 
critical moment, followed by, 50 years ago this summer, the historic 
remarks of Secretary of State Marshall calling for the nations of 
Europe to come together, rebuild their devastated economies, and forge 
the framework for political democracy.
  I was a young student in Budapest at that time, Mr. Speaker, and it 
was my privilege on Radio Budapest to call on the Government of Hungary 
to join the Marshall plan because the Marshall plan was open to the 
countries of Central and Eastern Europe. But of course, the Soviet 
Union vetoed any such attempt. And we have seen over the last half a 
century a differential development in Europe, spectacular economic 
growth in Western Europe, and devastation, destruction and backwardness 
in Central and Eastern Europe until the collapse of the wall in the 
last few years.
  I think it is important to underscore, Mr. Speaker, that in today's 
dollars, the Marshall plan represented a commitment of some $135 
billion by the United States to help the Nations of Western Europe to 
rebuild their economies. This was the largest philanthropic enterprise 
in the history of the world. We went in to do good, and we did well.
  Europe's prosperity contributed enormously to our own prosperity. And 
Europe's ability to develop Democratic societies has enabled us first 
to prevent Soviet expansion and, with the creation of NATO, to see the 
disintegration of the Soviet empire.
  We now are at phase 2. We are now asking the question, are we going 
to have anywhere near the comparable, vis-a-vis Central Europe, Eastern 
Europe and the former Soviet Union, to see to it that these countries 
and these peoples will also have the opportunity of developing viable 
economies and strong and Democratic societies.
  This is the opportunity for our Western European friends to show a 
forward-looking outlook with respect to the European Union to open up 
the European Union to the countries of Central and Eastern Europe, just 
as we provided the Nations of Western Europe with the aid and 
assistance to rebuild their economies.
  It is our joint opportunity, Mr. Speaker, to see to it that as the 
various countries of the region qualify for NATO, we in fact open the 
doors of NATO so we expand the arena of peace, stability, democracy, 
and respect for human rights throughout the European Continent.
  Mr. Speaker, I think it is extremely important to underscore that 
while in 1947 we were a country enormously limited in resources, we had 
unlimited vision on the part of our political leadership, and what we 
have to hope for now is that our political leadership on a bipartisan 
basis recognizes the same opportunities with respect to Central and 
Eastern Europe and the former Soviet Union that the leadership 50 years 
ago recognized in the Marshall plan.
  Mr. GILMAN. Mr. Speaker, I yield 5 minutes to the distinguished 
gentleman from Texas [Mr. Paul].
  (Mr. PAUL asked and was given permission to revise and extend his 
remarks.)
  Mr. PAUL. Mr. Speaker, I rise to make some comments about the 
Marshall plan because my interpretation is somewhat different than the 
conventional wisdom of the past 50 years.
  I happen to believe the understanding of the Marshall plan is 
probably one of the most misunderstood economics events of the 20th 
century. The benefits are grossly overstated. The Marshall plan through 
these many years has been used as the moral justification for all 
additional foreign aid. And once I hear it, I assume we are on the 
verge of extending and expanding our foreign aid overseas.
  When we look at the total amount of money that flowed into Europe 
following World War II, the amount that came from the American 
taxpayers was not large. The large amount came from corporations and 
investors who believed that Europe would be safe and secure, so the 
large number of dollars then flowed into Europe.
  It was interesting that the conditions were improved in Europe not so 
much because of America but sometimes in spite of America, because many 
of our economists went to Europe at this time and advised them that the 
most important thing that they do, especially in Germany, was to 
maintain price controls. Here in this country we did not learn, and 
hopefully we have finally learned the lesson, but we had not learned 
until at least 1971 that wage and price controls were not a good idea.

                              {time}  1315

  Yet Ludwig Erhard at that time defied the strong advice by the 
American advisers and took off wage and price controls, kept taxes low, 
kept regulations low, produced political conditions which were very 
conducive to investment, and this is what caused the real recovery in 
Europe.
  Political assistance, funds flowing into a country through political 
maneuvers, are never superior to those funds that flow into a country 
for reasons of the political stability. Because Europe did invite 
capital, this was the real reason why Europe recovered.
  Foreign aid is used frequently throughout the world to help people. 
But if we look at Zaire and Rwanda and the many countries of the world, 
foreign aid has really been a gross failure. As a matter of fact, it 
does harm because it encourages the status quo. The market is much 
smarter than we as politicians, because if the market and the political 
conditions are not right, that country that wants capital must improve 
those conditions to invite the capital. A good example might be in 
Vietnam at the current time. They changed their conditions to invite 
capital. So there must be an incentive for those countries to change 
their condition.
  Foreign aid very often and very accurately, I believe, is a condition 
of taking money from the poor people in a rich country and giving it to 
the rich people of a poor country. I think there is a lot of truth to 
that, because the burden of taxation and inflation and the many things 
that our average citizen and our middle-class citizen suffer comes from 
overexpenditures and good intentions whether they are here at home or 
overseas. We believed at that time, and strongly so, I guess, still, 
that the government's responsibility, whether it is through government 
expenditures or through the inflationary machinery of the Federal 
Reserve, that if we stimulate an economy, if we prime the pump, so to 
speak, that we can stimulate the economy. This was the argument after 
World War II, that we would prime the pump. That is not a free market 
notion, that is a Keynesian notion. There has been no proof that this 
is beneficial. Really what counts is a sound currency. Germany after 
World War II and even to this date is known to have a harder and 
sounder currency than any other currency in Europe. Political stability 
is what is necessary, not taking money from taxpayers of one country 
and shifting it to another one.
  Foreign aid very often, not so much the foreign aid that went to 
Europe, and I would grant my colleagues, the other conditions 
compensated and did not allow the foreign aid to be damaging so much as 
the foreign aid, say, to

[[Page H3108]]

a country like Rwanda. That was so destabilizing, because the 
politicians get hold of the money and they use it for political 
reasons. Money to help a country must go in because conditions are 
beneficial, that encourage investment, that encourage the market to 
work.
  Mr. Speaker, I would argue that there is a different interpretation, 
but I know that the support for this measure is justified.
  Mr. LANTOS. Mr. Speaker, I yield 3 minutes to the gentleman from 
Connecticut [Mr. Gejdenson].
  Mr. GEJDENSON. Mr. Speaker, I cannot help but respond to my 
colleague's comments. While I think he is well-intentioned, there are 
some issues that I think have to be addressed.
  The United States, at the end of World War II, spent $16 billion in 
1950's dollars in western Europe because we understood that while the 
best avenue may be the private-sector initiatives and other issues at 
hand, the reality was that without that economic assistance, there was 
a danger that western Europe would destabilize and that much of it 
would be taken over by Soviet influence. We recognized that short-term 
expenditure was the right thing to do for human rights, for economic 
opportunity, for political rights. I think to say that that model only 
worked about one time in history frankly does not meet the historical 
test.
  If we take a look at the countries that are our biggest purchasers of 
grain products today, they are many of the countries that started off 
under a PL-480 program. To argue that there are still some countries in 
the world that have not recovered is not, frankly, an astounding 
argument. When we look at any program, it works best on certain areas, 
and other areas are more difficult to get to. It does not mean that 
there is not a benefit to us in that area.
  Let me finish with these two points, and I will yield to the 
gentleman from Texas.
  That is, every place we have played a major role in establishing 
democratic governments, governments that respect human rights, not only 
have we done the right thing, we then turn out to have the best markets 
there; but it has taken a cooperation between government and the 
private sector, and we cannot do it without both.
  I would say the same thing has happened in agricultural sales: that 
in the countries where we have provided the most generosity of the 
American people to providing assistance, those are the countries that 
have turned out to be the largest purchasers of American agricultural 
products, which helps our trade balance immensely.
  Lastly, I would say that if the gentleman thinks the tax burden in 
this country is distributed badly, I agree with that. Let us vote for a 
progressive tax. There is a very easy solution to that.
  Mr. PAUL. Mr. Speaker, will the gentleman yield?
  Mr. GEJDENSON. I yield to the gentleman from Texas.
  Mr. PAUL. Mr. Speaker, I would vote to change the taxes, but mainly 
to lower them for everybody. The point that I am trying to make is that 
the large amount of capital that helped Europe recover did not come 
from the taxpayers. That was a small amount. There were a lot of other 
investors that went into Europe. The key reason was the political 
stability and the good economic climate which Erhard helped to 
introduce. I think that is much important.
  There is a difference between what happened in Europe versus the 
waste that we had in Rwanda. We did not do the people, the poor people 
of Rwanda, very many favors by sending money down there that became a 
political weapon to suppress the poor.
  Mr. LANTOS. Mr. Speaker, I yield myself such time as I may consume to 
respond to some of the observations the gentleman from Texas made.
  I think the gentleman from Texas is correct in recognizing the 
importance of private investment flows to Europe. I think they played 
an absolutely critical role in European recovery. But I wonder whether 
he would not agree with me that without creating the framework of 
political stability, military security, the rebuilding of the 
infrastructure, the absolutely indispensable achievements of the 
Marshall plan, none of that capital would have flowed into Europe.
  I was in Europe in 1945 and in 1946 and in 1947 and it was a 
continent of devastation, destruction, hopelessness and despair. No 
American company was interested in investing in a battlefield, which 
Europe was at the end of the Second World War. It was the creativity 
and the vision of American political leadership on a bipartisan basis 
that created the framework for all of the subsequent investments and 
trade which flowed after the basic preconditions were created by the 
Marshall plan.
  My friend from Texas should rejoice with us that this was a shining 
moment of American history. It was one of the most beautiful moments of 
American history when we went in to do good and succeeded in doing well 
for us and for our European friends.
  I do not see any point in diminishing this achievement of President 
Truman and Secretary of State Marshall and Senator Vandenberg and 
Congressman Christian Herter, who served in this body and who as a 
Republican did so much to support these measures. When the history of 
this century is written, there will be a shining moment of American 
bipartisan political leadership which is represented as we celebrate it 
with the Marshall plan.
  What is called for now is a recognition that the Marshall plan, 
because of Soviet occupation of central and eastern Europe, could only 
do half the job. It could only do the job in western Europe. We along 
with our European friends now have an opportunity to complete the job.
  Mr. PAUL. Mr. Speaker, will the gentleman yield?
  Mr. LANTOS. I yield to the gentleman from Texas.
  Mr. PAUL. I thank the gentleman for yielding.
  Mr. Speaker, I think that there could not be an argument made that 
every dollar that we sent to Europe did not have some beneficial 
effect. Quite possibly it did. But my point is that if that money from 
the taxpayer had not been sent, there is nothing that says it might not 
have been sent through the investors, but it depended on the political 
climate and what they did. I do not want to deemphasize that. That is 
the important reason why this foreign aid was not as harmful as it 
usually is, and it had some benefits, mainly because of the political 
climate.
  Mr. LANTOS. If I may reclaim my time, not only was it not harmful, it 
was the inevitable precondition of development. The gentleman should be 
open-minded enough to admit that this was an enormously statesmanlike 
and incredibly successful measure, and I have difficulty visualizing 
the need 50 years later, looking at a success story, trying to 
denigrate it.
  Mr. Speaker, I yield back the balance of my time.
  Mr. GILMAN. Mr. Speaker, I yield myself such time as I may consume.
  I want to thank the distinguished gentleman from Texas for his 
important, constructive contributions to this debate. I would like to 
note to our colleagues, in our proposed Foreign Policy Reform Act, we 
are trying to move from government-to-government aid to aid that 
benefits the private and voluntary sectors. We are involved in trying 
to reform foreign aid and to encourage and stimulate private investment 
in the developing world.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  The SPEAKER pro tempore (Mr. Barrett of Nebraska). The question is on 
the motion offered by the gentleman from New York [Mr. Gilman] that the 
House suspend the rules and agree to the concurrent resolution, House 
Concurrent Resolution 63.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the concurrent resolution was 
agreed to.
  A motion to reconsider was laid on the table.

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