MARSHALL PLAN

At the Harvard University commencement exercises on June 5, 1947, Secretary of State George C. Marshall proposed that the United States undertake a vast program of postwar economic aid to assist the countries of Europe to rebuild from world war ii. Neither Secretary Marshall nor President harry s. truman offered any constitutional authority for such a program, although some members of Congress, led by Senator robert a. taft of Ohio, contended that the expenditure could not be justified under either the foreign affairs power or the taxing and spending power. Acting on the initiative of the United States, sixteen European nations formed the Organization of European Economic Cooperation (OEEC) which in turn issued a report setting forth Europe's collective needs and resources. The Soviet Union and other East European countries were invited to participate, but declined. Thereafter, on April 3, 1948, following the Soviet-sponsored coup in Czechoslovakia, which turned the tide of congressional opinion and caused the Marshall Plan expenditures to be justified as a national defense measure, the United States Congress passed the Economic Cooperation Act, to be administered by the Economic Cooperation Administration. Within four years and after the expenditure of $12-$13 billion in American loans and grants-in-aid, Europe made tremendous strides toward economic recovery. Coupled with increased military security (evidenced primarily in the signing of the north atlantic treaty in 1949 and formation of the North Atlantic Alliance), this extensive economic recovery helped quell fears of Soviet expansion into Western Europe. The Marshall Plan and the OEEC resulting from it also created a precedent for further economic integration among the participating states of Western Europe.

Burns H. Weston
(1986)

Bibliography

Price, Harry Bayard 1955 The Marshall Plan and Its Meaning. Ithaca, N.Y.: Cornell University Press.