Changes

Six years of total war in Europe, 1939-1945, brought destruction and economic ruin to both victors and vanquished.  Only the United States emerged from World War II without domestic damage and stronger economically than before the war.  The armadas of heavy bombers that night and day had blasted every industrial area and transportation center in Europe had done a thorough job; recovery was painfully slow.  Economic output in 1948 was 13% below 1938 levels; in Germany it was 55% lower. America, in startling contrast, was 65% higher.   

Six years of total war in Europe, 1939-1945, brought destruction and economic ruin to both victors and vanquished.  Only the United States emerged from World War II without domestic damage and stronger economically than before the war.  The armadas of heavy bombers that night and day had blasted every industrial area and transportation center in Europe had done a thorough job; recovery was painfully slow.  Economic output in 1948 was 13% below 1938 levels; in Germany it was 55% lower. America, in startling contrast, was 65% higher.   

Signs of permanent stagnation were pervasive, coupled with growing frustration and pessimism about the future.  Millions of refugees lived in squalid camps.  Britain had won the war, and it had  received billions of dollars in postwar loans, but its economy was shattered; bread had to be  rationed.  Former prime minister [[Winston Churchill]] said Europe was "a rubble-heap, a charnel house, a breeding ground of pestilence and hate."  Conditions were even worse in the Soviet Union, but Stalin’s army and secret police were everywhere and he used the vacuum in eastern Europe expand Soviet his domains influence and control.  By 1946 Churchill warned that the Soviet Union had drawn an "iron curtain" which divided Europe between rival alliances and ideologies.  Sensing that his dreaded enemy capitalism was collapsing, he Stalin ordered the Communist parties in every country to shift to the left and fight the class enemy.  The danger he saw was that America the American juggernaut would impose its hated values, promoting liberalism, free speech, free elections, and capitalism.   

Signs of permanent stagnation were pervasive, coupled with growing frustration and pessimism about the future.  Millions of refugees lived in squalid camps.  Britain had won the war, and it had  received billions of dollars in postwar loans, but its economy was shattered; bread had to be  rationed.  Former prime minister [[Winston Churchill]] said Europe was "a rubble-heap, a charnel house, a breeding ground of pestilence and hate."  Conditions were even worse in the Soviet Union, but Stalin's army and secret police were everywhere and he used the vacuum in eastern Europe expand Soviet his domains influence and control.  By 1946 Churchill warned that the Soviet Union had drawn an "iron curtain" which divided Europe between rival alliances and ideologies.  Sensing that his dreaded enemy capitalism was collapsing, he Stalin ordered the Communist parties in every country to shift to the left and fight the class enemy.  The danger he saw was that America the American juggernaut would impose its hated values, promoting liberalism, free speech, free elections, and capitalism.   

In 1947 the [[Truman Doctrine]] of military support saved Greece from a Communist takeover (and aided Turkey too), but Americans feared that the Communists had a good chance to seize political power in Italy and France, shutting out American trade, cultural exchanges and political values in a victory for totalitarianism over democracy.   

In 1947 the [[Truman Doctrine]] of military support saved Greece from a Communist takeover (and aided Turkey too), but Americans feared that the Communists had a good chance to seize political power in Italy and France, shutting out American trade, cultural exchanges and political values in a victory for totalitarianism over democracy.   

In addition to the $12.4 billion Marshall plan money, the U.S. gave an additional $20 billion in grants and net credits from 1945 through 1951. They were aimed at short-term needs and did not carry the long-terms modernization goals of the Marshall Plan, but they did pump very large sums into war-torn economies.<ref>Historians who downplay the size of the Marshall money usually ignore the other $20 billion, a sum that had considerable impact.</ref> In 1945-47, before the Marshall Plan started, American aid amounted to $13.1 billion.  Postwar relief through the UN (UNNRA) came to $3.5 billion. Britain received a long-term loan of $3.75 billion in 1946. West Germany (that is the Allied-occupied part of the country) received U.S. goods through the GARIOA program (Government and Relief in Occupied Areas) valued at $1.7 billion. Aid to Greece and Turkey began in 1947 with the Truman Doctrine's allocation of $650 million.<ref>See [http://www2.census.gov/prod2/statcomp/documents/1952-12.pdf ''U.S. Statistical Abstract: 1952'' (1953) table 1000 p. 830 online]</ref>

In addition to the $12.4 billion Marshall plan money, the U.S. gave an additional $20 billion in grants and net credits from 1945 through 1951. They were aimed at short-term needs and did not carry the long-terms modernization goals of the Marshall Plan, but they did pump very large sums into war-torn economies.<ref>Historians who downplay the size of the Marshall money usually ignore the other $20 billion, a sum that had considerable impact.</ref> In 1945-47, before the Marshall Plan started, American aid amounted to $13.1 billion.  Postwar relief through the UN (UNNRA) came to $3.5 billion. Britain received a long-term loan of $3.75 billion in 1946. West Germany (that is the Allied-occupied part of the country) received U.S. goods through the GARIOA program (Government and Relief in Occupied Areas) valued at $1.7 billion. Aid to Greece and Turkey began in 1947 with the Truman Doctrine's allocation of $650 million.<ref>See [http://www2.census.gov/prod2/statcomp/documents/1952-12.pdf ''U.S. Statistical Abstract: 1952'' (1953) table 1000 p. 830 online]</ref>

===Long-term solution===

===Long-term solution===

In 1948 State department official Will Clayton found a long-term umbrella solution, named the “European Recovery Program” or ERP.  He envisioned gigantic American gifts of billions of dollars that would never have to be repaid, combined with specific European initiatives that would put the continent’s industry, transportation, finance and farming on a sound basis. That would promote free trade and a healthy environment for economic and political freedoms, and in the long run, lead to the sort of unity that was eventually reached by the European Union.   

In 1948 State department official Will Clayton found a long-term umbrella solution, named the “European Recovery Program” or ERP.  He envisioned gigantic American gifts of billions of dollars that would never have to be repaid, combined with specific European initiatives that would put the continent's industry, transportation, finance and farming on a sound basis. That would promote free trade and a healthy environment for economic and political freedoms, and in the long run, lead to the sort of unity that was eventually reached by the European Union.   

The Administration requested $14.2 billion; Congress authorized $13.4 billion, and $12.5 billion was spent by the time the plan officially ended (and was replaced by another aid program that stressed military support.) The sum of $14 billion is sometimes cited, for it included aid to Japan and other Asian countries given on similar terms (but with a different administrative structure).  In Europe, the largest grants went to Britain ($3.4 billion), France ($2.7 billion), Italy ($1.5 billion), West Germany ($1.4 billion), Netherlands ($1.1 billion), Greece ($796 million), Austria ($678 million), andf Belgium ($559 million).  Spain was excluded because of lingering resentment regarding the Spanish Civil War.

The Administration requested $14.2 billion; Congress authorized $13.4 billion, and $12.5 billion was spent by the time the plan officially ended (and was replaced by another aid program that stressed military support.) The sum of $14 billion is sometimes cited, for it included aid to Japan and other Asian countries given on similar terms (but with a different administrative structure).  In Europe, the largest grants went to Britain ($3.4 billion), France ($2.7 billion), Italy ($1.5 billion), West Germany ($1.4 billion), Netherlands ($1.1 billion), Greece ($796 million), Austria ($678 million), andf Belgium ($559 million).  Spain was excluded because of lingering resentment regarding the Spanish Civil War.

Success required the use of Secretary of State [[George Marshall]]’s enormous prestige, evident in his speech<ref>For text see [http://www.loc.gov/exhibits/marshall/mars1.html "Marshall Announces His Plan"]</ref> at Harvard University in June 1947 and of course in the informal name of the whole program. Even more essential was close collaboration with the Republicans who controlled Congress, especially their foreign policy leader, Senator [[Arthur Vandenberg]].  Vandenberg, who had shepherded the Truman Plan through Congress in 1947, was a critical supporter and  won Congressional approval for the much more expensive Marshall Plan. All of Europe was invited to join, along with much of Latin America.<ref>Switzerland did not officially join, in order to preserve its neutrality. However it was at least partly incorporated into the ERP economic system through the 1949 off-shore trade agreement.</ref>

Success required the use of Secretary of State [[George Marshall]]’s enormous prestige, evident in his speech<ref>For text see [http://www.loc.gov/exhibits/marshall/mars1.html "Marshall Announces His Plan"]</ref> at Harvard University in June 1947 and of course in the informal name of the whole program. Even more essential was close collaboration with the Republicans who controlled Congress, especially their foreign policy leader, Senator [[Arthur Vandenberg]].  Vandenberg, who had shepherded the Truman Plan through Congress in 1947, was a critical supporter and  won Congressional approval for the much more expensive Marshall Plan. All of Europe was invited to join, along with much of Latin America.<ref>Switzerland did not officially join, in order to preserve its neutrality. However it was at least partly incorporated into the ERP economic system through the 1949 off-shore trade agreement.</ref>

American and European newspapers, political parties, businesses, labor unions, and intellectuals supported a massive promotional campaign that warned that the isolationist mistakes following World War I must not be repeated. In the United States some critics complained about a "global WPA" (see [[WPA]]) but little organized opposition emerged, apart from [[far-left]] elements in some labor unions.  Most Americans were exhausted from war and wanted to return to domestic concerns, and reduce heavy wartime taxes; vast new spending programs threatened these goals. ERP supporters answered that America’s national security was at stake, and rebuilding Europe now would be far cheaper than fighting a third world war.  The isolationism  among conservative Republicans crumbled when the Stalinist seizure of Czechoslovakia in February 1948 showed time was running out.   

American and European newspapers, political parties, businesses, labor unions, and intellectuals supported a massive promotional campaign that warned that the isolationist mistakes following World War I must not be repeated. In the United States some critics complained about a "global WPA" (see [[WPA]]) but little organized opposition emerged, apart from [[far-left]] elements in some labor unions.  Most Americans were exhausted from war and wanted to return to domestic concerns, and reduce heavy wartime taxes; vast new spending programs threatened these goals. ERP supporters answered that America's national security was at stake, and rebuilding Europe now would be far cheaper than fighting a third world war.  The isolationism  among conservative Republicans crumbled when the Stalinist seizure of Czechoslovakia in February 1948 showed time was running out.   

===Building support in Europe===

===Building support in Europe===

At first most European leaders embraced the plan, but the Communists swung into opposition once Stalin signaled his opposition. However the socialist movements endorsed and supported the ERP as did business and liberal elements.  A European organization was formed, the ''' Organization for European Economic Cooperation''' ('''OEEC''') to coordinate policies, and at all times the details and operations of the program was negotiated between the U.S. and European nations.

At first most European leaders embraced the plan, but the Communists swung into opposition once Stalin signaled his opposition. However the socialist movements endorsed and supported the ERP as did business and liberal elements.  A European organization was formed, the ''' Organization for European Economic Cooperation''' ('''OEEC''') to coordinate policies, and at all times the details and operations of the program was negotiated between the U.S. and European nations.