Some suggest that the term may have been first coined by Queen Elisabeth of the Belgians to describe the situation between Belgium and Germany, in 1914 after World War I. An Iron Curtain, or eisener Vorhang, was an obligatory precaution for all German theaters to prevent a possible fire from spreading from the stage to the rest of the theater. These fires were rather common since the decor was often very flammable. In case of fires, a metal wall would separate the stage and theater, secluding the area ablaze to be extinguished by firefighters.
Joseph Goebbels coined the phrase in anti-Soviet propaganda, and it was picked up by German politician Count Lutz Schwerin von Krosigk who referred to the 'Iron Curtain' coming down. This phrase was later popularized by Winston Churchill and used in a long speech on March 5, 1946 at Westminster College in Fulton, Missouri: After the fall of the Berlin Wall a section of it was transported to and erected at Westminster College.
"From Stettin in the Baltic to Trieste in the Adriatic an iron curtain has descended across the Continent. Behind that line lie all the capitals of the ancient states of Central and Eastern Europe. Warsaw, Berlin, Prague, Vienna, Budapest, Belgrade, Bucharest and Sofia; all these famous cities and the populations around them lie in what I must call the Soviet sphere, and all are subject, in one form or another, not only to Soviet influence but to a very high and in some cases increasing measure of control from Moscow." The phrase had been used a year earlier, in an article on "The Year 2000" by the Nazi leader Joseph Goebbels:
"If the German people lay down their weapons, the Soviets, according to the agreement between Roosevelt, Churchill and Stalin, would occupy all of East and Southeast Europe along with the greater part of the Reich. An iron curtain would fall over this enormous territory controlled by the Soviet Union, behind which nations would be slaughtered. The Jewish press in London and New York would probably still be applauding." Allen Dulles used the term in a speech on December 3, 1945, referring to only Germany:
It is difficult to say what is going on, but in general the Russians are acting little better than thugs. They have wiped out all the liquid assets. No food cards are issued to Germans, who are forced to travel on foot into the Russian zone, often more dead than alive. An iron curtain has descended over the fate of these people and very likely conditions are truly terrible. The promises at Yalta to the contrary, probably 8 to 10 million people are being enslaved. While the exact origins of the phrase are not known for certain, it was Churchill's speech that popularized the phrase and made it known to much of the public.
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Wikipedia - Iron Curtain