Marshall Plan

In 1947, Europe was still devastated from the ravages of World War II (1939–45). In addition, the previous winter had been one of the worst in European history. Eighteen million soldiers and an even larger number of civilians had been murdered or died, and life for the survivors was one of starvation and desperation.

As part of a graduation speech at Harvard University in June 1947, Secretary of State George C. Marshall (1880–1959) outlined what became known as the Marshall Plan, or the European Recovery Plan. It was one of the most generous financial aid programs in world history. The United States was prepared to offer the equivalent of $109 billion in aid if the European nations could develop a plan on how the money would be used.

The Marshall Plan forced the European nations to act as a single economic unit for the first time ever. Marshall even offered aid to the Soviet Union (modern-day Russia), but dictator Joseph Stalin (1879–1953) refused to accept the offer, calling it a trick. In hindsight, it was probably Stalin's refusal that allowed for the passage of the Marshall Plan. The United States and the Soviet Union were competing superpowers; they looked upon one another as the enemy. Had the Soviet Union participated in the program, it is likely that Congress would not have passed the plan.

A conference was held in Paris in 1947, and sixteen European nations agreed to participate in the four-year program. In April 1948, President Harry S. Truman (1884–1972; served 1945–53) signed the first check, written for more than $5 billion. By the end of the plan in 1951, industrial production in western Europe had increased by an amazing 30 percent since the beginning of World War II.

The Marshall Plan benefited the economy of the United States as well. All the goods bought by Europe with the donated money came from America and had to be shipped overseas on American merchant vessels.

Although the Marshall Plan was actually President Truman's idea, Truman's popularity among the public was so low (mostly related to the war) by 1947 that he knew no program with his name on it would ever get the support of Congress. Marshall had a solid reputation as a war general and a diplomat with integrity and honor. So while Marshall is the man who gets most of the credit for the program, Truman was the silent partner who came up with the original idea.