Lend-Lease
Consequences of Lend-Lease
- After re-election FDR found it would be necessary to go beyond the legal make-shifts he’d been using to help GB
- GB needed US war supplies but were running out of money
- Johnson Act 1934 banned loans to states in default of their WWI debts
- Doubtful whether Congress would repeal it without a prolonged fight
- FDR came up with the idea of lending goods not money
- January 1941 he submitted draft of a Lend-Lease Bill authorising him to sell, lease or lend on such terms as he saw fit to any country he deemed vital to US security
- Two months acrimonious debate ensued
- Wheeler, Taft and other isolationists said it was a permit to wage undeclared war
American Viscose Corporation
- To overcome Congress opposition and convince the public that GB on verge of bankruptcy FDR urged the sale of all privately owned GB investments in US
- Churchill reluctantly agreed to sell one asset – the American Viscose Corporation at a price well below its intrinsic value
- Lend-Lease Act passed Congress easily and FDR signed it March 11th 1941
- Churchill described Lend-Lease as “the most unselfish act of any country in all history”
- This didn’t represent his true feelings
- He resented the forced sale as an unnecessary political manoeuvre
- He ultimately saw it as a small price to pay for $7,000 million of aid
Protecting the Sea Lanes
- By spring 1941 German U-boats sinking 500,000 tons of shipping a month
- This was twice as much as GB and US ship yards were turning out
- FDR took steps that gradually edged USA into Battle of the Atlantic
- Showed lack of candour in justifying his actions
- Some historians say he “lied the country into war”
- March 1941 he allowed damaged British warships to be repaired in US docks and RAF pilots trained in Florida
- April he extended the hemisphere neutrality zone (proclaimed at Panama 1939) halfway across the Atlantic
- US naval patrols to comb area for U-boats and report their presence to Royal Navy
- Sent US forces to Greenland
- June froze German and Italian assets in USA
- July (by agreement with Icelandic government) sent US marines to Iceland to forestall German occupation
- September convoyed US vessels as far as Iceland
Atlantic Charter
- Meanwhile an informal Anglo-American alliance taking shape
- Spring 1941 secret talks in Washington between British and US officers
- Made an agreement on strategy to be followed if US entered war
- August FDR and Churchill held their first wartime meeting at Newfoundland
- FDR made no military commitments
- Joined Churchill in issuing a press release that became known as the Atlantic Charter
- It was a declaration of general principles: national self-determination; equal access to trade and raw materials; international collaboration for economic advancement and social security; freedom from fear and want; freedom of the seas; disarmament
- Despite the publicity attending Atlantic Charter it had no influence on post-war settlement
- It was unprecedented for a neutral country to join a belligerent in issuing such a document however vague and innocuous
Hostilities
- FDR hesitated to take any step that would commit US to full belligerency
- Held back due to isolationist sentiment and his own indecision
- Just as Lend-Lease led to convoying so latter led to open hostilities
- September 4th 1941 U-boat fired two torpedoes at US destroyer “Greer” (missed) – latter dropped depth charges
- FDR hid fact that “Greer” had reported the U-boat’s position to Royal Navy
- He interpreted the incident as an act of piracy
- Ordered that Axis subs be sunk on sight in US-patrolled waters
- October 9th FDR asked Congress to revise Neutrality Act to arm American merchantmen and allow them to sail to belligerent ports
- During the Congressional debate the US destroyer “Kearney” was attacked (October 17th) – 11 killed
- October 31st US destroyer “Reuben James” sunk with 115 killed
- Week later Congress abolished Neutrality Act except: ban on loans to belligerents and travel on belligerent ships
- US merchant ships could now carry any cargo to combat zones
- Autumn 1941 US in undeclared naval war with Germany
- Hitler would have been justified in taking counter-measures – he didn’t though
- Invaded USSR in June – anxious to avoid US belligerents
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