Development of the Marshall Plan

As Secretary of State, General George C. Marshall had an enlightened and visionary attitude toward dealing with Europe after World War Two. The world wanted to punish and punish harshly - particularly Germany. Yet Marshall believed that in order to support and stabilize Europe, a conciliatory approach to reconstruction, including that of Germany, was absolutely necessary. At the time devastated European countries were being tempted by communism because it represented hope from post-war economic, political, and social despair. To ensure freedom, Marshall and others began imagining a program that would restore the economic health of Europe - a program that would rely on countries acting cooperatively with the aid and assistance of the United States.

What is now known as the Marshall Plan was broad-based, and dealt with critical issues such as trade agreements, loan repayments, and financial aid. It was not unanimously embraced. Many Americans, including some members of Congress, favored isolationism. The Soviets did not want to reveal their needs to other countries or accept east-west trade, which would ruin their plan to control the commerce of the Eastern Bloc. And France, which had been invaded three times in a century, did not want a strong Germany. Again and again, however, Marshall communicated that a strong Germany was a strong Europe. By December, 1947 Congress approved a $600 million measure to provide temporary aid to Western Europe. A few days later President Truman sent the European Recovery Program (the Marshall Plan) to Congress for its approval.

By the time the plan had been administered in 1951, more than $13 billion had been distributed to the 16 participating countries. Europe's Gross National Product rose 32.5 percent, industrial production increased 40 percent, and by 1953, trade between European countries increased almost 40 percent.

The Marshall Plan laid the groundwork for the modern European Union, and is considered by many to be the most successful foreign aid program of the 20th century.