Library of Congress Prints and Photographs Division
President Franklin D . Roosevelt delivering a Fireside Chat , 1937 .
Basil Catterns , deputy governor of the Bank of England , supervised Operation Fish . of the United Kingdom passing through my very hands .”
The pool of assets was not bottomless , however . Churchill later reflected , “ Up till November 1940 we had paid for everything … We had already sold $ 335 million worth of American shares … We had paid out $ 4,500 million in cash . We had only $ 2,000 million left , the greater part in investments , many of which were not marketable .”
Many members of the American Congress — the “ isolationists ”— were opposed to getting involved in the war , and many were not convinced that the British were running out of money . Cash-and-Carry was still the policy , they insisted . President Roosevelt , an old Navy man , knew that American control of the Atlantic would be jeopardized if the British navy fell into the hands of the Germans . During the presidential election campaign of 1940 , however , Roosevelt shrewdly avoided alienating the many isolationist voters by not advocating for a change in policy .
Roosevelt won a third term in early November , and he began to lobby on behalf of a new policy . It would be called Lend-Lease , under which the British would be allowed to borrow the money to pay for their American-made armaments .
At a press conference in mid-December , the President made his case : “ Suppose my neighbor ’ s house catches fire and I have a length of garden hose 400 or 500 feet away . If he can take my garden hose and connect it up with his hydrant , I may help him to put out the fire … I don ’ t say
to him before that operation , ‘ Neighbor , my garden hose cost me $ 15 ; you have to pay me $ 15 for it .’ No !… I don ’ t want $ 15 — I want my garden hose back after the fire is out .” On December 30 , during one of his Fireside Chats , the President reasoned that , “ If Britain should go down , all of us in all the Americas would be living at the point of a gun … We must be the great arsenal of democracy .”
The wheels of Congress ground slowly towards a vote on the proposal . While Congress debated , the British were irked when the American arm of Courtaulds , the venerable British textile conglomerate , was sold to a group of New York bankers at a highly discounted price to raise money for Britain . The bankers quickly re-sold it at a tidy profit . In January 1941 , some $ 500 million in stocks and bonds were sent from Montreal to Washington to secure an emergency loan of $ 375 million from the US government .
Congress finally passed Lend-Lease on March 9 . Churchill had often privately expressed frustration with American politicians during these debates , but after passage he called Lend-Lease “ the most unsordid act in the history of any nation .” The day after Senate passage , $ 7 billion in loans were approved to finance British war needs .
Britain ’ s financial emergency was over . The war would be quite another matter : Victory over Germany was finally achieved in May 1945 .
Winston Churchill is justifiably famous for his turns of phrase . He announced over the wireless on August 20 , 1940 , “ Never in the field of human conflict was so much owed by so many to so few .” He was referring to those few daring British pilots who held the German Luftwaffe at bay in the air war then raging over Britain . He might just as easily have been referring to those intrepid Royal Navy seamen and those tireless British and Canadian bank and brokerage employees who had secretly spirited all that wealth to Canada during that same summer of 1940 . For it was they — just like those pilots — who allowed Britain to survive the German onslaught until the Americans could come to their financial and , later , their military rescue .
Daniel C . Munson enjoys reading and writing economic and scientific history . His writings have appeared in Barron ’ s , Financial History and other publications .
Sources Churchill , Winston . The Second World War :
Volume II . Cambridge . 1949 .
Draper , Alfred . Operation Fish : The Race to Save Europe ’ s Wealth , 1939 – 1945 . Cassell : London . 1979 .
MacDonogh , Giles . 1938 : Hitler ’ s Gamble . Basic Books : New York . 2009 .
Shenker , Israel . “ Washington Note is Shown in Bank .” The New York Times . November 1 , 1970 .
Shirer , William L . The Rise and Fall of the Third Reich . Simon & Schuster : Connecticut . 1960 .
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