In the late 1940s, western Europe faced the daunting task of reconstruction after the devastation of World War II. It was also concerned about the threat of communism: the Soviet Union had established control of central and eastern Europe, while domestic communist parties seemed on the verge of electoral success.
The only two powers capable of keeping Europe out of the Soviet orbit were Britain and the United States. Britain had contributed large numbers of troops to the continent, but was barely solvent, so the primary economic responsibility for saving Europe would fall on America.
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Marshall's proposals, formally known as the European Recovery Program, were approved by Congress in March 1948, and signed into law on 3 April. Over the next three years the US gave $12.7bn ($258bn in today's money), mostly in the form of grants.
The biggest beneficiaries were Britain, France, West Germany, Italy and Holland. Money was spent on everything from infrastructure to food. As well as providing vital support while the countries rebuilt, it has been credited with maintaining Western unity during this period.
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