Marshall Plan

Origins of the Plan

The U.S. wartime lend–lease program had pumped $3.7 bil-lion into France, the Netherlands, Belgium, Greece, Norway, and Iceland, plus much more into Great Britain, mostly for war-related materials, but a significant amount was granted for civilian supplies. That program ended shortly after victory was declared in Europe, and subsequent U.S. foreign aid was negotiated with European nations bilat-erally. Between July 1945 and March 1948, the United States gave or lent $7.3 billion to 11 West European nations, including Austria and Germany. In addition, money for vari-ous civilian relief purposes in the U.S. occupation zones of Austria and Germany came from the U.S. Army's budget.

Despite American aid, Europe continued to deteriorate economically. France argued for detachment from Germany of the key industrial areas of the Ruhr, Saar, and Rhineland. The key source of energy, coal (especially from German mines), was in short supply. Farmers had no confidence in the value of local currencies, had few consumer goods avail-able to purchase, and were consequently reluctant to supply food. Western European economies were running serious balance of payments deficits, and their citizens' ability to trade internationally was rapidly declining.

Soviet–American relations had deteriorated after 1945, and the United States felt compelled to step in when Great Britain announced in February 1947 that it could no longer afford to support the governments of Greece (involved in a civil war with communist rebels) and Turkey (being threatened by the Soviet Union). “It is not alarmist,” Marshall told a February 27 meeting of congressional leaders, “to say that we are faced with the first crisis of a series which might extend Soviet domination to Europe, the Middle East and Asia.” (Department of State, 5:61.) Pres. Harry S. Truman's March 12 Truman Doctrine speech resulted in a congressional appropri-ation of $400 million in U.S. aid for Greece and Turkey. After 43 fruitless meetings in Moscow between March 10 and April 24 with the foreign ministers of Britain, France, and the Soviet Union, Marshall came away with a greater appreciation of the political and economic plight of most of Europe and a convic-tion that the Soviets were expecting to reap political benefits from the increasing social and economic misery.

By the spring of 1947, many American observers (e.g., George F. Kennan, head of the State Department's new Policy Planning Staff, and William L. Clayton, under secre-tary of state for economic affairs) had to admit that they had grossly underestimated the degree of destruction Europe's economy had suffered from the war. By the end of May, Marshall's advisers agreed on three points: (1) the United States had to commit a large amount of grant funds over sev-eral years; (2) the European nations had to take collective ini-tiative to identify needs and coordinate policies; (3) the offer had to be made to all European states to avoid the implica-tion that the United States sought to divide Europe into American and Soviet blocs, although the assumption was that the Soviets would never accept economic conditions such as openness, free trade, and American supervision.

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