On this day in 1948, President Harry S. Truman signs the Economic Assistance Act, which authorized the creation of a program that would help the nations of Europe recover and rebuild after the devastation wrought by World War II. Commonly known as the Marshall Plan, it aimed to stabilize Europe economically and politically so that European nations would not be tempted by the appeal of communist parties.
U.S. Secretary of State George C. Marshall made his famous call for American assistance to Europe in a speech at Harvard University on June 5, 1947. He proposed that the European states themselves draw up a program for economic recovery, which the United States would help fund. In mid-June 1947, Britain and France invited European nations to send representatives to Paris in order to draw up a cooperative recovery plan. The Soviet Union declined to attend the meeting; the Soviet-influenced nations of Hungary, Czechoslovakia and Poland also excluded themselves. The Committee of European Economic Cooperation (CEEC) eventually presented a unified plan before Congress, which authorized the Economic Cooperation Act on April 2, 1948. President Truman signed the act into law the following day.
Under the Marshall Plan, the Economic Cooperation Administration (ECA) distributed $13 billion in aid over four years (1948-51). Most of the funds were given in direct grants, and the rest in loans. Seventeen nations in western and southern Europe received assistance, including the United Kingdom, Austria, Belgium, the Netherlands, Denmark, France, Sweden, Iceland, Ireland, Greece, Italy, Luxembourg, Norway, Portugal, Switzerland, Turkey and West Germany. The plan aided both agricultural and industrial productivity in Europe, and helped rejuvenate ailing industries like chemicals, engineering and steel. Participating countries saw their gross national products go up by 15 to 25 percent.
Rebuilding post-war Europe was just one of many serious foreign-policy challenges faced by President Truman, who became president in April 1945 after the death of Franklin D. Roosevelt during World War II. Just months after he took office, he made the decision to drop atomic bombs on the Japanese cities of Hiroshima and Nagasaki. In the so-called Truman Doctrine, he asked Congress to provide economic and military aid to Turkey and Greece after the two countries came under Soviet and communist pressure in 1947. Truman was also responsible for the massive airlift that supplied West Berlin in 1948 and the negotiation of a military alliance that became the North Atlantic Treaty Organization (NATO) in 1949. During his second term, Truman sent U.S. military forces to defend against a communist invasion of Korea, but struggled to keep the war limited, rather than come into direct conflict with China or even Russia. In 1952, Truman declined to run for another term in office; he retired to his home state of Missouri and lived there until his death in 1972, at the age of 88.