At the same time the UNRRA and private relief was being extended to Europe, the U.S. government was attempting to help repair war torn economies. In 1946 and ’47, the U.S. approved nearly $20 billion in long-term, low interest loans. But the loans weren’t enough. European economies still struggled to rise anywhere close to their former levels.
Former Army General George Marshall was now the U.S. Secretary of State, and he was also concerned with the expanding influence of the Soviet Union in Europe. Marshall decided decisive action was needed.
What he proposed in June 1947 was that the nations of Europe get together and devise a rational, multilateral approach to their common economic problems. Helping only one nation at a time was not working. He said that if Europe could come up with a coordinated plan, the U.S. would give them billions of dollars in aid, but only for a limited, four year period. After that the European nations were on their own.
One month after Marshall’s proposal, 16 European nations met in Paris to work out their plan. The nations included Austria, Belgium, Denmark, France, Great Britain, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Sweden, Switzerland and Turkey.
Germany was not included in the conference because it had no government, yet. Germany was being ruled by the conquering powers of Russia, the U.S., France and Great Britain. But everyone agreed that the economic health of Germany was key to the revitalization of Europe.
Spain was also not included because Fascist Gen. Francisco Franco ruled the country and the west had isolated him politically.
Russia walked out of the meeting and prevented any of the eastern European countries behind the Iron Curtain from participating.
The group’s first request from the U.S. was for food. As Allen W. Dulles (who later became director of the CIA) argued, “What do we contribute? In first line, it will be food, fuel and fertilizer, to keep body and soul together, so that there will be men and women in Europe with the strength and the will to work. And then they will be given some of the tools so that they can increase their own production of food, fuel, and fertilizer.”
At first, the nations at the Paris conference came up with a plan that totaled $29 billion. Through some quiet diplomacy, the U.S. scaled that figure down to a $22 billion request over four years. The request included foodstuffs, fuel, cotton, agricultural and mining machinery, transportation equipment, iron and steel manufacturing equipment, and tobacco. Combining the food, fuel, cotton and tobacco products totaled over 75 percent of all requests for assistance.
Three-quarters of the proposed plan would go to buy products from American farmers. The proposal came at a good time because, in 1947, U.S. farmers had harvested the greatest wheat crop in history. Many agricultural commodities were in excess supply, and Europe didn’t have the money to buy them.
The European proposal was on the table, and Gen. Marshall had to sell the plan to the American public. He approached the task as if it were a campaign for the presidency. In December 1947, President Truman submitted a $17 billion plan before Congress – scaled down from the European proposal.
Marshall crisscrossed the country speaking to the National Cotton Council, the National Farm Institute, House and Senate committees, chambers of commerce, women’s clubs and the nation as a whole over radio.
By the spring of 1948, both houses of Congress approved what had become known as the Marshall Plan by surprisingly wide margins. Food and fuel began poring across the Atlantic soon after. Over the next four years, $11.8 billion in aid and another $1.56 billion in loans were extended to Europe.
Once again, the American farmer was feeding the world. George Marshall received the Nobel Peace Prize in 1953 although he claimed his only real contribution was in convincing the American people that a secure and stable Europe was good for America.