The Marshall Plan 

When the war came to an end in 1945 America had develop a growing distrust of Russia. Communism was the opposite of what the American system of Capitalism stood for.

In the Russian system private property had been banned and all production was organised by the state. Americans believed that not only was this system wrong but the Russians wanted to spread it throughout the world. President Harry Truman argued that he had a mission to stop the spread of this system.

Some of the first Marshall Aid is sent to Europe 

How could he do this?

The Marshall Plan was one way. Europe was in ruins, its production was down due to the massive war damage many European countries suffered. Truman saw that in such conditions countries would be open to outside influences. It would be a disaster, from his viewpoint if Europe fell under the influence of Russia. On the 12th March 1947 Truman made a speech that communism would "flourish in the misery and want" left over from the war. Marshall aid was set up to ensure tat it was America that was the country that helped with rebuilding, finance and general investment. If you get help like this it was thought you would then feel obliged towards the USA.

The USA were already owed $12 billion by European countries but they still lent out another $13 billion from 1948 and 1952. 

Here you can see who gained from the aid.

Truman said that he was happy to give this aid to any nation without strings. He said that even those countries that did not share the views of the United States could get money. Stalin was very suspicious and claimed the whole system was just a plan to isolate the Soviet Union and spread American ideas. He then forbade any communist country from taking this aid. In January 1949 the Soviet union tried to set up its own version of Marshall aid, called Comecon (Council for Mutual Economic Aid). 

However, the money that the Russians had available was nowhere near the same and it couldn't even begin to compete.

Because of this development the Cold War escalated and Stalin was determined to make sure that Europe did not fall to Americas influence.

The next key event in the story of the Cold War was the Berlin Airlift. For details of this event click here.