Tuesday, 2 May 2017

THE IMPACT OF FRANKLIN ROOSEVELT’S LEND-LEASE

US President Franklin Roosevelt signing the
Lend-Lease Act in 1941 (US Public Domain)
The 1930s were a scary time. Both Japan and Germany removed themselves from the League of Nations within a year of each other. It was only the beginning. A global confrontation loomed with Germany’s Adolf Hitler razing hell with armament buildup, and overrunning Czechoslovakia and Austria without so much as firing a shot. The West did nothing. In the Far East, Japan engaged in similar aggressive maneuvers against China. Meanwhile, in the United States, President Franklin Delano Roosevelt, in power since 1933, was very much aware what was happening overseas on these two vital fronts.

During the decade, US Congress passed a series of Neutrality Acts in order to stay out of any more foreign conflicts, except, of course, if a direct attack was made on the US homeland. Many Americans felt that their involvement in World War I--remember the war to end all wars--was bad enough. No more. The first act was enforced August 31, 1935, and lasted for six months, an embargo on trading items of war with any party engage in a military-style conflict. It also declared that any American citizens travelling abroad on warring ships did so at their own risk.

The next act, in February 1936, added a clause that forbade loans and credits given to warring nations. This didn’t cover the shipment of trucks, oil, or any civil wars, such as the Spanish Civil War from 1936-1939. Several large US companies such as Ford, GM, and the Rockefeller family’s Standard Oil took advantage of the ruling. By the conflict’s end, General Francisco Franco won the Spanish rebellion, but owed American companies a combined $100 million-plus: a cool $1.7 billion today.

In January 1937, a joint resolution was passed in Congress that prohibited trade with Spain. In May of the same year came another Neutrality Act. This one included all previous provisions, including coverage of civil wars, with no expiration date. In addition, US citizens were forbidden from travelling on ships of countries at war.

All of a sudden, everything changed when Hitler attacked Poland on September 1, 1939, launching World War II. With France and Britain officially at war with Germany, Congress passed the “Cash-and-Carry” policy which allowed America to supply--but no war material--those fighting Hitler as long as they would use their own ships and paid immediately in cash. They also had to assume all risk in route. This ended the arms embargo put in place during the first Neutrality Act of 1935 and led directly to a brilliantly conceived bill in early 1941 that allowed US President Roosevelt to zigzag around all the previous Congress-conceived neutrality acts.

By this time, Britain and the other Allied countries were running out of money to purchase war material and other supplies from the United States. As a result, President Roosevelt devised a plan where the countries fighting Japan and Germany would be “lent” what they needed in their continued fight for freedom. Roosevelt, himself, stated the general idea best through an analogy before the press when he said his plan was likened to a person lending his neighbor a garden hose to put out a fire in his home.

“What do I do in such a crisis?” he asked the news people. “I don’t say, ‘Neighbor, my garden hose cost me $15. You have to pay me $15 for it.’ I don’t want $15. I want my garden hose back after the fire is over.”

World War II Bell Aircraft assembly plant near Niagra Falls, New York (US Public Domain)

Formally titled “An act to promote the Defense of the Unites States,” Lend-Lease was ratified March 11, 1941, after the House of Representatives voted 260-165 and the Senate 60-13 in favor of it. In the House, the Democrats voted 238-25 to the Republicans 24-135; while the Senate saw a 49-13 Democrat favor to the Republicans 10-17. In April, Lend-Lease included aid to China, then two months later to Russia, once Germany attacked them on June 22, 1941. With all previous neutrality act restrictions lifted, those countries friendly to America received warships, fighter and bomber aircraft, tanks, along with arms of all sorts, oil, and food, to name only a few products.

There’s an interesting story in the summer of 1941, when a young man on an assembly line in a US war factory received his first weekly check for $100, the equivalent of $1700 today. After experiencing the terrible Great Depression for a number of years, he had never seen that much money before. He held the check in his fist, then uttered, “Thank God for Hitler!” before walking off.

When Lend-Lease ended after the war in 1945, only some ships were returned stateside. The majority of goods were thought to be free because America had been in the war for nearly four years following the December 7, 1941 attack on Pearl Harbor.  By then nobody, including Congress, cared too much about any neutrality laws.

In all, Lend-Lease cost the United States just under $51 billion. That’s over $800 billion in 2017 money. Of the top four recipients, Great Britain received $31.2 billion worth, Soviet Union $11.2 billion, China $1.5 billion, and France $3.2 billion. Thirty-four countries received the rest, approximately $4 billion. To visualize an example of the massive global project, the Americans sent the Russians 430,000 trucks, 37,000 bomber and fighter aircraft, 7,000 tanks, 35,170 motorcycles, 1,911 steam locomotives, 66 diesel locomotives, 4.4 billion tons of foodstuffs and 340,000 field telephones.

There were some exceptions to the so-called “free stuff” handed out by the Americans. Several countries, especially England and Russia incorporated a payback method known as “Reverse Lend-Lease” by sending the US such raw materials and products sometimes not that readily available in America at certain periods of time such as uranium, chrome, tin, platinum, rubber, asbestos, cocoa, fruit, vegetables, meat, eggs, and cheese. This amount totaled $10 million. Britain did eventually pay back most of their millions in other ways, but it cost them dearly. For one thing, they had to sell a good stock of their assets in the United States at below-market value. As part of the deal, they also rented out a number of their overseas air bases to the Americans.


The United States was the “Arsenal of Democracy” during the Second World War, back when “America was great!” Lend-Lease made that happen.

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