Cooperation

Trade Links Encourage Expansion:

1. The United States gives dollars to Country A.
2. Country A uses dollars to increase domestic production and pay for imports.
3. Country A’s economy expands by selling more domestic products to, and buying more imports from, other countries.
4. Other economies (including the U.S. economy) expand by selling more domestic products to, and buying more imports from, Country A.
   
   

Noncooperation

Without Trade Links, Economies Miss Out on Expansion:

1. The United States does not provide dollars to Country A.
2. Country A is unable to increase domestic production and unable to afford imports.
3. Country A’s economy fails to expand, with few products to export and little foreign exchange to buy imports.
4. Other economies (including the US economy) fail to expand, unable to sell domestic products to, or buy imports from, Country A.
   
   

US Decision

The Case Against

• The United States could not afford to give away more money to other countries. There were pressing needs at home.
• Existing shortages in the United States would be exacerbated and wholesale prices would rise, causing inflation.
• If the United States did nothing, Europe would solve its own economic problems.

The Case For

• If the United States did not help, Soviet-supported Communists could make inroads into vulnerable Western European countries.
• Innocent people in Europe were suffering from shortages of basic necessities.
• The United States could lose its main export markets if Europe could not find dollars or gold to purchase US products.

"And yet the whole world of the future hangs on a proper judgment...
What are sufferings?
What is needed?
What must be done?"

George C. Marshall,
US Secretary of State
Harvard University,
June 5, 1947