Marshall Plan

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In the early years of the Cold War, the United States was interested not only in containing the
threat of Soviet expansion but also in expanding its own foreign policy and economic influence
particularly in Western Europe. In the years before the building of the Berlin Wall and the
completion of what former British prime minister Winston Churchill dubbed the "iron curtain"
dividing Eastern and Western Europe, there was a real danger that such nations as France, Italy,
and even Great Britain might fall under Moscow's influence. That would have been a devastating
blow not just to U.S. diplomatic interests but to its economy as well.
President Harry Truman's secretary of state, George C. Marshall, a career military officer who
served as U.S. Army chief of staff during World War II, revealed Washington's response to that danger in a June 1947
speech at Harvard University. The proposal that would jump-start European reconstruction and restore the superpower
balance of power came in Marshall's graduation address following his acceptance of an honorary degree. What Marshall
termed the European Recovery Plan, the press soon renamed the Marshall Plan.
World War II had left Europe in political and economic chaos. Following the surrender of Nazi Germany in the spring of
1945, the Soviet Union occupied the Eastern European territory its troops had taken control of on the long march to
Berlin. Despite Soviet promises of national self-determination for nations freed from Nazi rule, Moscow was determined
to control its western flank. Western European nations, whose economies had been devastated by a decade of
depression followed by six years of war and occupation, were ripe for political dissent. The Soviet Union was eager to
take advantage of that dissent by supporting indigenous communist movements in the West.
In Washington, D.C., Truman, in the White House only because of the death of Franklin D. Roosevelt and lacking his
predecessor's political strength, had to deal with the remnants of isolationism in Congress. It was Congress that forced
him to cut off Lend-Lease payments to the Allies less than a week after victory in Europe was achieved in May 1945, but
that only helped to precipitate the European economic difficulties that would promote a political result antithetical to
U.S. interests. In the months that followed, that is exactly what happened. Meanwhile, the Soviet Union cemented its
hold over Eastern Europe and began to make threats in the eastern Mediterranean and the oil-rich Middle East.
By the end of the particularly difficult winter of 1946-1947, Western Europe was in serious
economic distress. Food reserves in Germany were as low as they had been during the
chaos of 1919 that had very nearly brought revolution, and communist political parties
were gaining strength rapidly in France and Italy.
By early 1947, Truman felt he had the support on Capitol Hill as well as the strong evidence
of an expanded Soviet threat to fight back. In March, he asked Congress for a $400 million
appropriation specifically to combat communism in Turkey and Greece. Turkey was being pressured by Moscow to
relinquish control of the Dardanelles, the narrow sea passage connecting the Mediterranean Sea with Soviet ports on
the Black Sea; and in Greece, the monarchy was fighting the Greek Civil War against communist rebels.
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The president outlined the justification for his request in what became known as the Truman Doctrine when he told
Congress: "It must be the policy of the United States to support free peoples who are resisting attempted subjugation by
armed minorities or by outside pressures . . . primarily through economic and financial aid, which is essential to
economic stability and orderly political processes." Despite the protests of such critics as Roosevelt's former adviser
Bernard Baruch, who described Truman's speech as "tantamount to a declaration of . . . an ideological or religious war,"
Congress approved the appropriation.
Truman's success in March 1947 gave him the confidence to suggest extending the policy of
economic aid for political stability to the rest of Europe. That is what Marshall proposed at
Harvard in June. Marshall outlined a comprehensive aid package for Europe "directed not
against any country or doctrine, but against hunger, poverty, desperation, and chaos." Even
the Soviet Union was invited to participate, but Soviet leader Joseph Stalin declined because
the terms would force a reduction of the Kremlin's influence in Eastern Europe. Poland,
Czechoslovakia, and Hungary also declined in response to pressure from Moscow.
Despite Marshall's characterization of the recovery plan as not being directed against a
particular country, clearly the intent was to limit Soviet influence in Western Europe by improving economic conditions;
at the same time, however, the plan would have a powerful stimulating influence on the U.S. economy. Much of the aid
would ultimately return to the United States in the form of orders for American goods.
In his speech, Marshall proposed that the nations of Europe outline a comprehensive plan for their own economic
recovery with U.S. financial support. In July 1947, the Conference (later Committee) of European Economic Cooperation
met in Paris to begin drafting a plan in response to Marshall's offer. By September, they had completed a detailed, fouryear program and submitted it to Washington.
Throughout the fall of 1947 and into the winter of 1948, Truman and Marshall campaigned in Washington and
throughout the country for support for the measure. Many in Washington were strongly opposed to providing further
aid to Europe after the expense and sacrifice of the war. That isolationist sentiment was strongest in the conservative
wing of the Republican Party, led by Senator Robert Taft of Ohio, the son of former president and chief justice William
Howard Taft. Despite the fact that the Republicans controlled both the Senate and the House of Representatives,
Marshall's argument for the economic benefit the plan promised the United States gained support.
A Soviet-supported communist coup in Czechoslovakia in February 1948 convinced more Americans of the necessity of
strong measures. Czechoslovakia was the country that the West was unable or unwilling to protect from Nazi expansion
in 1938, a fact that the Marshall Plan supporters pointed out. In mid-March, the Senate passed the Economic
Cooperation Bill by a margin of 69 to 17, and on April 2, 1948, the House passed it 329 to 74; the following day, Truman
signed it. In the same month, Truman appointed auto executive Paul G. Hoffman of Studebaker Corporation to head the
Economic Cooperation Administration, the agency charged with overseeing the plan.
A total of 16 countries took part in the Marshall Plan. Virtually all non-Soviet bloc European nations (except Spain)
received aid. West Germany became a participant when it gained self-government in 1949. By the time it was brought to
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a close in December 1951 (six months ahead of schedule because of the Korean War), the
plan saw the transfer of some $12 billion in grants and $1.5 billion in repayable loans.
Unlike more modern foreign aid, the Marshall Plan was aimed not at initial building in
largely undeveloped economies but at rebuilding a well-developed but heavily damaged
economy. It was particularly focused on such basic structural elements as the energy
sector and heavy industry. It was also contingent on international cooperation among the
nations receiving the aid. In the eyes of many observers, that was the prime reason for its
success.
The largest beneficiary of the Marshall Plan not including the United States itself was Great Britain. British interests
received more than $3 billion in grants and loans. France followed with $2.7 billion, Italy received $1.5 billion, and West
Germany received almost $1.4 billion. The plan was clearly a success; it greatly increased production levels in Europe
and enhanced trade not just between Europe and the United States but also among the nations of Europe. It also helped
bring about economic cooperation within Europe and reduced barriers to trade. Perhaps most important, it helped
stabilize pro-Western administrations in Western European nations and greatly reduced the threat of Soviet influence.
Because the Marshall Plan demonstrated the direct link between aid-supported economic
development and pro-Western political stability, it soon became the model for the bulk of
U.S. foreign policy throughout the Cold War. By 1949, Truman was able to propose an
expanded version of the plan to benefit other, less developed regions of the world. In
what became known as the Four Point Plan, President Truman proposed to extend the
benefits of the Marshall Plan; relieve hunger in other, war-torn areas of the world; provide
U.S. support for the United Nations; and strengthen "freedom-loving nations against the
dangers of aggression."
Although Marshall steadfastly refused to take credit for the plan that bore his name, in December 1953, he was awarded
the Nobel Peace Prize for his role in rebuilding Europe and promoting peace around the world. He is the only
professional soldier ever to be awarded that prestigious prize.

Further Reading
Cray, Ed. General of the Army: George C. Marshall, Soldier and Statesman. New York: Norton, 1990; Hogan, Michael J.
Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952. New York: Cambridge University
Press, 1987; Kindleberger, Charles P., Marshall Plan Days. Boston: Allen and Unwin, 1987; Schain, Martin, ed. The
Marshall Plan: Fifty Years After. New York: Palgrave, 2001.

MLA Citation
Cole, Curtis. "Marshall Plan." American History. ABC-CLIO, 2015. Web. 11 Feb. 2015.

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