On this day in 1948 the Marshall Plan came into effect. Much of Europe was devastated with millions killed and wounded during World War II. Fighting had occurred throughout much of the continent, and sustained aerial bombardment meant that most major cities had been badly damaged, with industrial production especially hard-hit. Many of the continent’s greatest cities lay in ruins. The region’s economic structure was also ruined, and millions had been made homeless. Especially damaged was transportation infrastructure, as railways, bridges, and roads had all been heavily targeted by air strikes, while much merchant shipping had been sunk. Although most small towns and villages in Western Europe had not suffered as much damage, the destruction of transportation left them economically isolated. None of these problems could be easily remedied, as most nations engaged in the war had exhausted their treasuries in its execution.

The only major power whose infrastructure had not been significantly harmed in World War II was the United States (it had entered the war later than most European countries, and had only suffered limited damage to its own territory). American gold reserves were still intact as was its massive agricultural and manufacturing base, the country enjoying a robust economy. The war years had seen the fastest period of economic growth in the nation’s history, as American factories supported both its own war effort and that of its allies. After the war, these plants quickly retooled to produce consumer goods, and the scarcity of the war years was replaced by a boom in consumer spending. The long term health of the economy was dependent on trade, however, as continued prosperity would require markets to export these goods. The Marshall Plan aid would largely be used by the Europeans to buy manufactured goods and raw materials from the United States.

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Images: Marshall Plan poster (created by the Economic Cooperation Administration, an agency of the U.S. government, to sell the Marshall Plan in Europe—the blue and white flag between those of Germany and Italy is an incorrect iteration of the flag of the Free State of Trieste, a City state created by the United Nations Security Council in 1947); Burned out buildings in Hamburg after the bombing (taken in 1945 or 1946 by the UK government).