Figure 1.-- |
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The RAF managed to defeat the Luftwaffe and stave off invasion in 1940. But now NAZI Germany dominated virtually all of Western and Central Europe. It seemed that Britain in the long run had little chance of holding out against the economic and industrial resources at Hitler's command. Worse still, Britain was rapidly reaching the point that it could not afford to continue purchasing military equipment and supplies in the United States. Churchill wrote to Roosevelt in a letter he described as the most important he had ever written (Decemnber 1940). Churchill described in stark terms Britain's position and the substantial losses as a result of the Blitz and U-boat attacks. He warned the President, "Unless we can establish our ability to feed this Island, to import the munitions of all kinds which we need, we may fall by the way, and the time needed by the U.S. to complete her defgensive preparations may not be fortcoming." Then Churchill came to the crux of the matter,"The moment approiaches where we shall no longer be able to pay cash for shipping and other supplies. While we shall do our upmost and shrink from no proper sacrifices to make payments across the exchange, I believe you will agree that it would be wrong in principle and mutually disadvantageous in effect if, at the eight of this struggle Great Britain would be divested of all saleable assetts othat after the victory was won with our blood, civilization saved and the time gained for the United States to be fully armed against all eventualities, we hould stand strpped to the bone. Such a course would not be in the moral or economic interests of either if our countries. .... You may be assured that we shall prove ourselves ready to suffer and sacrifice to the utmost to the Cause, and that we shall glory in being its champions. The rest we leave with confidence to you and to your people, being sure that ways and means will be foundwhich future generations on both sides of the Alantic will approve and admire."
The RAF managed to defeat the Luftwaffe and stave off invasion in 1940. It was the first real German defeat of the War. It was still unclear just how significant the RAF victory was. While the FAF had staved off a German invasion, the situation was still serious. RAF fighter strength had forced the Luftwaffe to limit attacks to night raids, but the German bombers were still hammering British cities.
NAZI Germany dominated virtually all of Western and Central Europe. It seemed that Britain in the long run had little chance of holding out against the economic and industrial resources at Hitler's command. The Reich alone had a huge industrial capacity, but now the NAZIs not onluy commanded the industries and resources of most of Europe, but the Soviet Union was a virtually ally, shipping oil and other resources to fuel the NAZI war machine. It looked to most of the world that Britain, even with the Empire could never prevail in a conflict with Germany.
NAZI Germany's financed in 1939 were strained. The NAZIs had been spending huge sums on armaments and the treasury was essentially babkrupt. Without a War, Germany would have gone bankrupt. The War changed the German financial position. Not obly had the War enabled the NAZIS to seize the gold reserves of conquered nations, but the NAZIs could virtually reqesition raw materials and industrial production. In Poland they simply seized whjat they wanted. In France they achieved the same result through war repreations. The Germans were resorting to slave and forced labor. t first it was in Poland, but as the war progressed began conscrioting labor in all the occupied countries. The NAZIs could also dictate wage rates in the occupied countries.
German U-boats were achieving considerable success in the North Atlantic. Merchant vessels were being sunk at a much faster rate than they could be built. British shipyards were needed to build war ships. The situation in the North Atlantic was deteriorating as the Germans developed facilities for U-boats in French Atlantic ports.
Presidential Roosevelt had just won the most hot contested election as presudent. The election and the terrible events of 1940 with a steady stream of NAZI victories had pressed in on the President requiring a variety of very difficult deccisions. Roosevelt with a few close friends ("Pa" Watson, Dr. Ross McIntire, and Harry Hopkins) set out on a Caribbean cruise for a few days away from the pressure of office. Roosevelt told Treassury Secretary Morgenthau in his absence to "use your imagination". The President managed to spend a few relaxing days with his friends. Then a U.S. Navy seaplane reaached the presidential yacht with a letter from Primeminister Churchill (December 9). [McJimsey, p. 132.]
Primeminister Churchill's overiding war goal was to involve the United States. As a result of the early German victories, Hutler now controlled the Continent. And even with the Empire, Britain even if it did survive could never challenge Hitler's mastery of the continent on its own. For this, Britain needed the United States. The Battle of Britain had brought Britain time, now Churchill did all he could to involve the United States. He sent President Roosevelt cables pleading for American assistance. He wanted the United States to go beyond 'cash and carry' neutrality with bady needed military assistance. For Churchill the military situation was pressing and that dominted his thinking. For President Roosevelt although he had been reelected, the calculation was different. He wanted to aid Britain, recognizing that beyond a humanitarian desire to save Britain America needed an ally if it was going to fight Hitler and the NAZIs. He also recognized that while Americans were willing to aid Britain, the overwealming majority of Americans wanted no part of a European war. Even if he could get Congress to declare war, which at this stage of the War he could not, he realized which Churchill did not, that a divided American Republic could never effectivly pursue the massive undertaking that a war against NAZI Germany would involve.
Worse than the military situation, Britain was rapidly reaching the point that it could not afford to continue purchasing military equipment and supplies in the United States. The costs of the War were rapidly depelting the British treasury. British finances had been weakened by World War I and the subsequent Depression. While Germany lost World War I, it did not pay a substantial part of the reparations. Most of the payments were money borrowed from America. And the Germans could finance the War by looting the occupied countries. Britain could not do this. Britain had begun the War with $4.5 billion in foreign reserves (gold, dollars, and American investments). An effort to export luxury items (especially Scotch whiskey) had earned Britain another $2 billion. But Britain as winter approached had paid about $4.5 billion to American arms manufacturers and ship builders. Its remaininging dollar reserves were tied up in iliquid investments. Britain to continue the War needed to import food and raw material in addition to armaments made in America. And the financial capability to do this was ending, both reserves ad the ability to borrow money. British Ambassador Lord Lothian upon returning from a trip to England announced to the American press, "Well boys, Britain's broke," adding rather undiplomatically, "its your money we want" (November 23, 1940) [Kimball, p. 96.]
Churchill and Roosevelt had begun corresponding after Churchill returned to the Admiralty in 1939. Churchill described this letter as the most important he had ever written. Churchill described in stark terms Britain's position and the substantial losses as a result of the Blitz and U-boat attacks. He warned the President, "Unless we can establish our ability to feed this Island, to import the munitions of all kinds which we need, we may fall by the way, and the time needed by the U.S. to complete her defgensive preparations may not be fortcoming." Then Churchill came to the crux of the matter,"The moment approiaches where we shall no longer be able to pay cash for shipping and other supplies. While we shall do our upmost and shrink from no proper sacrifices to make payments across the exchange, I believe you will agree that it would be wrong in principle and mutually disadvantageous in effect if, at the eight of this struggle Great Britain would be divested of all saleable assetts othat after the victory was won with our blood, civilization saved and the time gained for the United States to be fully armed against all eventualities, we hould stand strpped to the bone. Such a course would not be in the moral or economic interests of either if our countries. .... You may be assured that we shall prove ourselves ready to suffer and sacrifice to the utmost to the Cause, and that we shall glory in being its champions. The rest we leave with confidence to you and to your people, being sure that ways and means will be foundwhich future generations on both sides of the Alantic will approve and admire."
Secretary Morgenthau cabeled the President that the United States could continue supplying Britain until January when Congress reconvened (December 10). [McJimsey, p. 133.] Then a decession would have to be made. America would either have to aid Britain or the country could not long continue the War. If America was to aid Britain. how would it be done. Outright grants would be politically unpopular and might be difficult to get through Congress. It was the President who conceived the answet. It was a concept that not only save Britain, but prove popular with the American people as well--Lend Lease.
The definitive study of Lend Lease is the Kimball book, The Most Unsordid Act, the title taken from a Churchill description. The fact is that Lend Lease was not an act of charity. While Britain could never have defeated the NAZIs without America, it is difficult to see how America could have fought the War without Britain. Much of the War was fought largely with British troops. Only after D-Day did the American contribution become the dominant force. Britain was also the unsinkable aircraft carrier in the North Atlantic ftom which the strategic bombing campaign was lost. Even more serious in 1940 was the Royal Navy. If Hitler could have forced a British Vichy, control of the Royal Navy would have lft the Axis with naval superiority. President Roosevelt and Hopkins saw what many Americans did not yet see, Britain's survival was crucial for the security of the United States.
McJimsey, George. Harry Hopkins: Ally of the Poor and Defebder of Liberty (Harvard University Press: Cambridge, 1987), 474p.
Kimball, Warren F. The Most Unsordid Act: Lend Lease, 1938-1941 (Baltimore: Johns Hopkins University Press, 1969).
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