American Red Cross Financial Improvement Report

The Episode

Welcome to this episode of “Now & Then at Dodona Manor.”

You’d think that at the age of 68 in 1949, George Marshall would have been ready to enjoy retirement. After he ended his illustrious military career at the end of World War II, he served as President Harry Truman’s Secretary of State from 1947 until 1949. However, even at that point in his life, he wasn’t ready to kick back, relax, and enjoy the finer things in life. Instead, he took on a new civilian role in October 1949: president of the American Red Cross, the organization that responds to emergencies and disasters around the country with a variety of services and many forms of assistance. 

Questions for Thought and Discussion

When Basil O’Connor, the previous president of the Red Cross, retired, President Harry Truman saw a great opportunity for Marshall – a position that would keep him involved with public affairs, but with fewer burdens than his previous positions in the military and as a statesman. Why not, thought the president, give Marshall the job? Prior to World War II, the Red Cross Board of Governors had been dominated by wealthy and socially prominent Eastern-establishment figures on the Red Cross board. Workers and volunteers in cities and regions nationwide complained that they were not heard or valued in operations. 

Truman knew that the Red Cross would have benefited from someone like George Marshall at the helm. His work on the European Recovery Program was the right kind of medicine needed by the American Red Cross to heal its morale problem. During the war he had sought public support for Red Cross drives, and his postwar reports praised the organization’s service to the men of the armed forces and their families. His 1948 speeches for the Marshall Plan showed his effectiveness in convincing the same types of people who could help the Red Cross. Another factor that made Marshall desirable as O’Connor’s successor was his work as an aide to General John Pershing in World War I, when Marshall dealt with many Eastern establishment figures whose influence was still needed by the Red Cross. With that experience, Marshall was perhaps the one man who could solve these problems.

When Truman asked Marshall to become Red Cross president, the general wrote, “I told the president that I appreciated the compliment he was paying me, and that Mrs. Marshall and I would talk the matter over…” George and Katherine talked it over, and both agreed that the Red Cross was a great humanitarian organization and that if Marshall were to take on active engagement in the world, the presidency of the Red Cross “was by far the most satisfying opportunity.” Marshall credited Katherine with making the final decision. Sitting on boards and commissions was not enough, she reasoned. He needed to be active and needed a new challenge. You might say that she knew her man. In a letter dated March 15, 1949, Marshall told Truman he was prepared to accept the Red Cross appointment, but no word came from the White House until September for a number of reasons, including O’Connor’s reluctance to step down.

On Oct. 3, 1949, a crowd of staffers gathered around the entrance to the white marble headquarters of the Red Cross in Washington, DC. They spotted the general’s car as it came down the street and stopped in front. Marshall stepped out, followed by O’Connor and James Nicholson, the executive vice president of the Red Cross. Marshall’s face broke into a smile as he walked up the steps into the building, where he was greeted with applause and photographers. He continued up the steps to his office and went right to work.

When he took the presidency, according to biographer Forrest Pogue, “Marshall set out to eliminate friction, to fire the workers with enthusiasm, to smooth out dissension.” The Red Cross’s mission after World War II was to provide domestic and international disaster relief, furnish support to the U.S. military, operate a national blood program, and render emergency relief abroad pursuant to the laws of the Geneva Convention. In 1949, the Red Cross had about 5,000 employees, though the bulk of its work depended on the tens of thousands of volunteers. Marshall understood the importance of volunteers and wanted to hear from them directly. 

In the early months of his first year as head of the Red Cross, Marshall traveled cross-country on a “listening trip” with the aim of restoring morale among volunteers and employees. Three weeks into his presidency, he took a six-day, 7,500-mile trip to 15 cities to visit 158 Red Cross chapter houses and meet hundreds of workers. At meetings with chapter leaders, Marshall encouraged them to speak openly about their concerns. He listened and learned, telling the American people the importance of the Red Cross’s work via press conferences at every stop. By all accounts this trip boosted morale of everyone involved and allowed Marshall to advocate for the values of the Red Cross and how it could be improved.

The number of trips Marshall made for the Red Cross surprised just about everyone around him. At the end of 1949, he told Queen Frederika of Greece that he had traveled about 29,000 miles between October 1949 and March 1950. By the time he left office, Marshall logged more than 35,000 miles.

Financially, Marshall saw that the Red Cross needed to limit waste and focus its efforts on humanitarian aid. In April 1950, the Booz, Allen & Hamilton firm compiled a book that detailed administrative and cost improvements for the Red Cross. This report, along with letter from James Nicholson, Red Cross vice president, was sent to Marshall. You can see General Marshall’s name just under the letterhead. Nicholson said that “a number of recommendations have already been put into effect, and considerable progress is being made on others.” According to the report, the Red Cross’s projected annual savings was $633,000 if all improvements were implemented. An estimated reduction of half a million dollars in spending was planned for 1950-51. Much of this report delves into the selling off of unused or dilapidated real estate holdings, rearranging printing and paycheck production, and employee reduction, which brought the Red Cross out of its postwar financial troubles. 

In Marshall’s last few months as president of the Red Cross, with the Korean War looming, much emphasis was placed on the Blood Bank program and the morale-building services concerned with the troops and their families. Marshall, with his military background, was the perfect advocate for these programs and was crucial in getting support for the organization in these endeavors. He was instrumental in having the Red Cross once again partner with the War and Navy departments to deliver blood to soldiers overseas, as they did during World War II. The “Boston Agreement” created cooperation between the Red Cross, other nonprofit blood banks in the U.S. and the American Medical Association to cooperate on blood donation, storage, processing, and preparation for shipment. Marshall’s leadership expanded the mission of the Red Cross National Blood Bank program to include the supply of blood products for civilian and military purposes. On Aug. 26, 1950, the first shipment of blood for soldiers wounded in Korea was shipped to Japan. From then until 1954, more than 340,000 pints were flown to medical units in Korea and Japan.

Overall, while he spent only one year as its head, Marshall was instrumental in rebuilding the Red Cross for domestic purposes, revamping the blood program, disaster relief and volunteer initiatives. The Red Cross needed to overcome the notion that it was primarily a wartime organization, and Marshall made sure to share the important yet little-known work of volunteers, especially in utilizing the Junior American Red Cross. 

You, too, can lead by example like Marshall and join your local Red Cross chapter, donate blood, or simply help a friend in need. It is never too late to engage in selfless service to others.