The Mutual Security Act of 1951 launched a major American foreign aid program, 1951–61, of grants to numerous countries. It largely replaced the Marshall Plan. The main goal was to help underdeveloped US-allied countries develop and to contain the spread of communism. It was signed on October 10, 1951, by President Harry S. Truman. Annual authorizations were about $7.5 billion ($91 billion today), out of a GDP of $340 billion in 1951 ($4.1 trillion today), for military, economic, and technical foreign aid to American allies. The aid was aimed primarily at shoring up Western Europe as the Cold War developed. In 1961 it was replaced by a new foreign aid program, the Foreign Assistance Act of 1961, which created the Agency for International Development (AID), and focused more on Latin America.
The Mutual Security Act also abolished the Economic Cooperation Administration, which had managed the Marshall Plan and transferred its functions to the newly established Mutual Security Agency (MSA). The Agency was established and continued by acts of October 10, 1951 (65 Stat. 373) and June 20, 1952 (66 Stat. 141) to provide military, economic, and technical assistance to friendly nations in the interest of international peace and security, but was abolished by Reorganization Plan No. 7 of 1953, effective August 1, 1953, and its functions were transferred to the Foreign Operations Administration. The act however, was extended by appropriators each fiscal year until the early 1960s.
