On April 3, 1948, President Harry Truman singed the Economic Recovery Act of 1948, which has become known as the Marshall Plan. The Marshall Plan is named after Truman’s Secretary of State, George Marshall, who envisioned and proposed the plan in an effort to provide economic assistance to postwar Europe.

After World War II ended in 1945, Europe’s economy was in ruins. Cities were devastated by bombing, citizens faced famine, and the Soviet Union posed a threat to many vulnerable European nations. In this dangerous and weak postwar Europe, Secretary of State George Marshall proposed that Europe create a plan to rebuild its economies and that the United States provide economic aid.

President Truman believed in Marshall’s ideas and presented the message to Congress in December 1947. Congress overwhelmingly supported President Truman and Marshall in a bipartisan effort and passed the Economic Cooperation Act of 1948. Then, on April 3, 1948, President Truman signed the Economic Cooperation Act, which is generally referred to as the Marshall Plan.

Over the next four years, Congress spent over $13 billion on the Marshall Plan to aid Europe’s economic recovery. The aid went to capital, materials, goods, and many other resources to help rebuild European nations. The Marshall Plan also helped to provide markets for US exports, create reliable European trading partners, and support the development of democratic governments in Europe.

Marshall argued that his plan was simply directed against hunger, poverty, and despair in Europe. He stated that his plan was not directed against the Soviet Union and he actually encouraged the Soviet Union’s support in the plan. However, the Soviet Union refused to assist in the Marshall Plan and instead began to tighten its control over Eastern European nations which paved the way for the Cold War between the US and the Soviet Union. The Soviet Union believed that the US simply wanted to use its economic power to undermine the Soviet Union’s control in Eastern Europe.

The Marshall Plan has been recognized as one of the greatest humanitarian efforts in the 20th Century and Marshall became the only general ever to receive a Nobel Prize for peace (as Marshall was a former general). The Marshall Plan also set the foundation for the US’s modern foreign policy by legitimizing the concept of providing foreign aid to countries if such aid could benefit US interests.

The Marshall Plan did play a key factor in reviving and stabilizing Europe’s postwar economy and political structures, and US production rose rapidly to meet many of Europe’s needs.