[Congressional Record (Bound Edition), Volume 145 (1999), Part 11]
[Extensions of Remarks]
[Pages 15381-15382]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    CONGRATULATIONS TO KELLY PHIPPS

                                 ______
                                 

                           HON. RALPH REGULA

                                of ohio

                    in the house of representatives

                         Thursday, July 1, 1999

  Mr. REGULA. Mr. Speaker, the United States Institute of Peace held 
its twelfth annual National Peace Essay Contest and I am proud to 
announce that Ms. Kelly Phipps of my district won first place in Ohio. 
Ms. Phipps is a student at Jackson High School in Massillon, Ohio. 
Students are asked to write about the different measures that can be 
taken to prevent international conflicts.
  The Peace Essay Contest is designed to encourage young people to 
think about international conflict management and resolution. Ms. 
Phipps wrote her essay on ``Economics in Preventive Diplomacy: The 
Treaty of Versailles vs. The Marshall Plan.''
  I include a copy of her essay for my colleagues to review:

 Economics in Preventative Diplomacy: The Treaty of Versailles vs. the 
                             Marshall Plan

       When desire for revenge clouds rational policy making, the 
     results are disastrous. A comparison between the Treaty of 
     Versailles and the Marshall Plan demonstrates effects of 
     vengeance in foreign affairs and the need for nurturing 
     economic policies to prevent conflict. After World War I, the 
     harsh measures imposed upon Germany through the Treaty of 
     Versailles not only failed to prevent future conflicts, but 
     fueled the rise of the Third Reich. Under similar 
     circumstances, the Marshall Plan created after World War II 
     successfully rebuilt Western Europe, deterring threats on two 
     fronts and proving that measures to strengthen economies are 
     crucial to prevent hostility.
       After an armistice was reached on November 11, 1918, Lloyd 
     George of Great Britain, Georges Clemenceau of France, and 
     Woodrow Wilson of the United States led the Peace Conference 
     in Paris ending World WAr I (A.A.I.R. 3, Goodspeed 269). 
     Because of Germany's 1914 declarations of war on Russia and 
     France, fear of further German aggression guided the 
     conference (A.A.I.R. 3, Goodspeed 270). To prevent another 
     widespread conflict, the conference produced the punitive 
     Treaty of Versailles and created the League of Nations for 
     enforcement.
       The treaty signed on June 28, 1919, devastated the German 
     Empire. Articles 118 and 119 stripped Germany of all overseas 
     possessions, turning them over to the Allied and Associated 
     Powers (A.A.I.R 84). Based on declarations of war on France 
     and Russia in 1914, Articles 231 and 232 held Germany 
     independently accountable for the war and forced compensation 
     for all damages in foreign territories (A.A.I.R. 123). The 
     Treaty required Germany to pay 20 billion gold marks as an 
     initial installment (Goodspeed 273). The total cost of 
     reparations was 132 billion marks, to be paid over 35 years 
     (Watt 503).
       ``It does much to intensify and nothing to heal the old and 
     ugly dissensions between political nationalism and social 
     democracy,'' warned the editors of the New Republic, claiming 
     the Treaty was ``bound to provoke the ultimate explosion of 
     irreconcilable warfare (``Peace at Any Price'' 184). As the 
     value of the mark plummeted under austere economic penalties, 
     desperation and resentment spread among the German people, 
     setting the stage for the conflict between ultranationalists 
     and democratic Western Europe. By 1923, the mark devalued to 
     5 million for every American dollar (Goodspeed 278-79). 
     Devastating inflation consumed the saving of the German 
     workers, creating disillusionment in Weimar Germany and a 
     base of support for Nazism within the middle class (Pennock 
     and Smith 562). A few months before the Treaty of Versailles 
     was adopted, nationalistic parties accounted for a mere 15% 
     of the German vote. By 1924, inflation had skyrocketed and 
     nearly 39% of Germans were voting Nationalist (Pennock and 
     Smith 567).
       In 1924, the United States funded the Dawes Plan, offering 
     limited loans to Germany (Goodspeed 286). The Dawes Plan both 
     reduced the harshness of the Treaty of Versailles and eased 
     Germany's nationalistic tendencies. After 1924, support for 
     these parties decreased from 39% to 30%, illustrating the 
     ties between economics and militant nationalism (Pennock and 
     Smith 567). However, the withdrawal of German nationalism was 
     only temporary; at the onslaught of the great Depression, the 
     festering humiliation from the early 1920's resurged without 
     restraint (Goodspeed 287).
       The German elections of 1930 revealed increasing Nazi 
     support. Party membership grew from 400,000 to 900,000, and 
     Nazis claimed over a third of the seats in the Reichstag 
     (Goodspeed 295). Nazi leaders such as Hitler used the 
     humiliation and hardship caused by the Treaty of Versailles 
     as a flash point for inciting German supremacy and desire for 
     revenge among the German people (Goodspeed 273). The Nazi 
     Secret Service offered employment to the nearly 6 million 
     unemployed Germans who were turning to Nazism as a more 
     secure alternative to the status quo (Goodspeed 295). 
     Finally, the Enabling Act of 1933 passed in the Reichstag, 
     giving Hitler absolute power for four years. With the entire 
     nation under his whim, the Fuhrer could enact his dreams of a 
     master race and German expansionism (Goodspeed 297).
       While vengeance motivated the Treaty, moral concerns 
     prevented the absolute destruction of Germany. Incidentally, 
     it may have been this compromise that allowed Germany to 
     reemerge as a global threat. As Machiavelli explains to 
     Lorenzo De' Medici in The Prince, ``Whoever becomes the 
     master of a city accustomed to freedom and does not destroy 
     it may expect to be destroyed himself . . . In republics 
     there is more life, more hatred, a greater desire for 
     revenge; the memory of their ancient liberty does not and 
     cannot let them rest . . .'' (48-49; ch. VI). The Treaty was 
     enough to spark indignation in Germany, but not strong enough 
     to prevent revenge. While annihilation of an enemy may be key 
     to retaining power, reducing the humiliation of the enemy 
     through reconstruction is morally superior and can ensure 
     lasting peace.
       After World War II, the Third Reich was disbanded, leaving 
     the German in the hands of the Allies for the remainder of 
     the year (Shirer 1139-40). The situation resembled the period 
     following WWI, with the addition of threats of Communist 
     aggression from the newly empowered Soviet Union. 
     Reconstruction was necessary, but U.S. funds were scattered 
     among the International Monetary Fund (IMF), the Export-
     Import Bank and the United Nations. Two years and $9 billion 
     later, exports were still down 41 percent from 1938 levels 
     (Hogan 29-30).
       In 1947, Secretary of State George C. Marshall introduced a 
     plan ``directed not against any country or doctrine, but 
     against hunger, poverty, desperation and chaos . . .'' 
     (Marshall 23). In his speech, Marshall explained that lasting 
     peace required a cohesive aid program to solve the economic 
     roots of conflict (Marshall 23-24). The Marshall Plan was 
     intended to avoid another German nationalist backlash and to 
     create a stable democratic Europe to deter Soviet expansion 
     (Hogan 27). Both objectives were well-founded in history. 
     First, as a proven by the reduction of militarism in Germany 
     after the Dawes Plan, economic stability checks the threat of 
     militant nationalism. Also, just as German aggression in WWII 
     occurred while Europe suffered from depression, economically 
     weak nations are more likely to be attacked. Finally, 
     Marshall aid would create confidence in capitalism, 
     countering Soviet influence (Mee 248). With the intentions of 
     Marshall Plan logically devised, economic success was all 
     that was needed for the prevention of conflict.
       The Foreign Assistance Act of 1948 began U.S. action on 
     Marshall's recommendations (Hogan 89). The Economic 
     Endorsement Act made an international economic infrastructure 
     a prerequisite for American aid; so the Committee for 
     European Economic Cooperation was formed to develop a plan 
     for European self-sufficiency (Hogan 124). Discussion in the 
     16-nation panel included the agriculture, mining, energy and 
     transportation sectors of the economy, as well as 
     recommendations for a more permenant regulatory body (Hogan 
     60-61). The resulting Organization for European Economic 
     Cooperation (OEEC) included all Western European nations 
     except Germany and directed the use of U.S. aid (Hogan 125-
     126).
       Under OEEC, the United States poured aid dollars into 
     Europe while increasing international trade through most-
     favored-nation agreements. The U.S. spent over $13 billion on 
     aid--1.2 percent of the U.S. GNP (Mee 258, Wexler 249). 
     Efficient use of funds made economic improvements drastic and 
     swift. Between 1947 and 1951, Western Europe's GNP increased 
     by nearly $40 billion, a 32 percent

[[Page 15382]]

     increase, and industrial production grew 40 percent above 
     1938 levels (Wexler 250-51). With Western Europe fortified, 
     aid could safely be extended to Germany (Mee 239).
       In addition to combating nationalism, German reconstruction 
     created a buffer to communist East Germany and added 
     industrial resources to the European economy. Still scarred 
     from past invasions, France refused to allow Germany to sign 
     the OEEC protocol in April 1948. Later, with U.S. pressure, 
     Germany has included in trade and was given funds, making 
     German reintegration a common goal (Hogan 129-130). By the 
     fall of 1948, many issue shad been resolved and the Allies 
     began to draft a framework for an independent, democratic 
     West Germany. By 1964, Marshall aid increased foreign trade 
     by 100 percent, boosted industrial production by 600% and 
     reduced unemployment to a mere 0.4%. In Germany, the 
     Marshall Plan had become more than just an aid package; it 
     had jump-started production, preventing the conditions 
     that spawned the Third Reich after W.W.I (Mee 256-57).
       Today, American preventive action largely consists of 
     sanctions to debilitate enemies or diluted aid policies that 
     rely on handouts alone. The current situations of America's 
     Cold War adversaries demonstrate the inadequacies of both 
     policies. Like the Treaty of Versailles, America's continuing 
     vendetta against Fidel Castro has produced decades of 
     embargoes and hardship, but no signs of capitalist reform 
     (Leeden 24). In the economically unstable Russia, current 
     policies of IMF aid may seem similar to the Marshall Plan, 
     but missing components will allow the ruble to continually 
     devalue. Increased trade and regulatory body could 
     permanently stimulate production, but dumping aid into a 
     faulty infrastructure is temporary and wasteful (``Other 
     Marshall Plan'' 29).
       While the iron first of the Treaty of Versailles dragged 
     the world into a second World War, the Marshall Plan broke 
     the cycle of German aggression. Additionally, the 
     reconstructed nations created a power balance that helped 
     keep the Cold War from igniting a full-blown conflict. While 
     they may intimidate some countries, harsh economic measures 
     punish innocent civilians and will always pose the risk of a 
     backlash. Nourishing free-trade policies address the root 
     causes of many conflicts, promoting more permanent peace. 
     History demonstrates the need to remove vengeance from 
     preventative diplomacy and address the world's problems with 
     a more wholistic, stabilizing approach.


                              Works Cited

       American Association for International Reconciliation. 
     Treaty of Peace with Germany. New York: American Association 
     for International Reconciliation, Sept. 1919.
       Goodspeed, D.J. The German Wars: 1914-1945. Boston: 
     Houghton, 1977.
       Hogan, Machael J. The Marshall Plan. New York: Cambridge 
     UP, 1987.
       Leeden, Michael, ``The Trade Weapon and Other Myths.'' The 
     American Spectator. Feb. 1998: 22-27.
       Machiavelli, Niccolo. The Prince. Trans. George Bull. 1961, 
     New York: Penguin, 1981.
       Marshall, George C. Address. Harvard university, 5 June 
     1947. Rpt. in Documents in World History, 1945-1967. W. Bruce 
     Lincoln, ed. San Francisco; Chandler, 1968. 22-24.
       Mee, Charles L., Jr. The Marchall Plan. New York: Simon, 
     1984.
       ``The Other Marshall Plan.'' The Economist 7 June 1997: 29.
       ``Peace at Any Price.'' Editorial. The New Republic 24 May 
     1919. Rpt. in World War and Prosperity. Chicago: Encyclopedia 
     Britannica, 1968. Vol. 14 of The Annals of America. 18 vols. 
     183-87.
       Pennock, J. Ronald, and David G. Smith. Political Science: 
     An Introduction. New York: Macmillan, 1964.
       Shirer, William L. The Rise and Fall of Nazi Germany. New 
     York: Simon, 1960.
       Watt, Richard M. The Kings Depart. New York, Simon: 1968.
       Wexler, Immanuel. The Marshall Plan Revisited. Westport: 
     Greenwood, 1983.

     

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