Editing Marshall Plan (section)

===United Kingdom===
The economy was precarious during the age of austerity, as wartime restrictions and rationing continued, and the wartime bombing damage was slowly being rebuilt at great cost.<ref> David Kynaston, ''Austerity Britain, 1945–1951'' (2008)</ref> The Treasury depended heavily on American money, especially [[Anglo-American loan|the 1946 loan of $3.75 billion]] at a low 2% interest rate.{{Sfn|U.S. Statistical Abstract|1949|p=[http://www2.census.gov/prod2/statcomp/documents/1949-12.pdf 846]}}  Even more helpful was the gift of $2.694 billion in Marshall Plan funds in 1948-1951. Canada also provided gifts and $1.25 billion in loans.<ref>Derek H. Aldcroft, ''The British Economy: Volume 1 The Years of Turmoil, 1920-1951'' (1986) pp.206, 209. [https://archive.org/details/isbn_0710801149 online].</ref><ref>Michael J. Hogan, ''The Marshall Plan: America, Britain and the Reconstruction of Western Europe, 1947-1952'' (Cambridge Up, 1987), pp. 29, 31, 48, 82–84.</ref><ref>Kenneth O. Morgan, ''Labour in Power, 1945-1951'' (1984) pp.270–272, 366.</ref><ref>Norman Moss, ''Picking up the Reins: America, Britain and the Postwar World''(Duckworth, 2008) pp.131–151.</ref>  The Marshall money was a gift but carried requirements that Britain balance its budget, control tariffs, improve management, and maintain adequate currency reserves. The [[Attlee ministry|British Labour government]] under Prime Minister [[Clement Attlee]] was an enthusiastic participant.{{sfn|Newton|1984}}{{sfn|Pelling|1988}}

The American goals for the Marshall plan were to help rebuild the postwar British economy, help modernize the economy, and minimize trade barriers. When the Soviet Union refused to participate or allow its satellites to participate, the Marshall plan became an element of the emerging Cold War.{{sfn|Cromwell|1982}}

There were political tensions between the two nations regarding Marshall plan requirements.{{sfn|Maier|1990}} London was dubious about Washington's emphasis on European economic integration as the solution to postwar recovery. Integration with Europe at this point would mean cutting close ties to the emerging Commonwealth. London tried to convince Washington that American economic aid, especially to the sterling currency area, was necessary to solve the dollar shortage. British economists argued that their position was validated by 1950 as European industrial production exceeded prewar levels. Washington demanded convertibility of sterling currency on 15 July 1947, which produced a severe financial crisis for Britain. Convertibility was suspended on 20 August 1947. However, by 1950, American rearmament and heavy spending on the Korean War and Cold War finally ended the dollar shortage.{{sfn|Newton|1984}} The balance of payment problems that troubled the postwar government was caused less by economic decline and more by political overreach, according to Jim Tomlinson.{{sfn|Tomlinson|2009}}

According to economic historians N.F.R. Crafts and Nicholas Woodward, the Marshall Plan money had a powerful multiplier effect. In 1948-1949 free imports from the United States amounted to 2.4 percent of British GNP. However, they calculate that the multiplier effects increased the 1949 GNP by 10% to 20%.<ref>N.F.R. Crafts and Nicholas  Woodward, ''The British Economy since 1945'' (Clarendon Press, 1991) pp.172–173.</ref>