The Economic Cooperation Act funneled American aid into sixteen European nations still reeling from World War II devastation, aiming to prevent economic collapse and the spread of communism. It became one of the most successful foreign aid programs in history, rebuilding infrastructure and cementing transatlantic alliances during the emerging Cold War.
On April 3, 1948, President Harry Truman signed the Foreign Assistance Act, commonly known as the Marshall Plan after Secretary of State George C. Marshall, who had proposed the concept in a 1947 speech at Harvard. The program committed more than $12 billion — roughly $150 billion in today's dollars — to sixteen Western European countries whose factories, railways, and farms lay in ruins three years after the war's end.
Marshall had watched Europe's postwar recovery stall amid brutal winters, food shortages, and currency collapse, conditions ripe for communist parties to exploit, particularly in France and Italy. Rather than simply extending loans, the plan funded machinery, raw materials, and food shipments, while requiring recipient nations to cooperate on removing trade barriers, effectively seeding what became European economic integration.
The results were striking: by 1952, industrial production across participating countries had risen roughly 35 percent above prewar levels. West Germany's economy in particular surged, fueling what Germans would call the Wirtschaftswunder, or economic miracle. Stalin refused Soviet bloc participation and denounced the plan as American imperialism, deepening the continental divide that would define the Cold War. Marshall received the Nobel Peace Prize in 1953, the only general ever so honored.