Financial History Issue 112 (Winter 2015) | Page 29
Britain for armaments. He speculated on
confiscating Bermuda, the British West
Indies, British Honduras and British Guiana. But he could not decide whether
acquiring poor colonies would be “something worthwhile or a distinct liability.
If we can get our naval bases, why, for
example, should we buy with them two
million headaches, consisting of that
number of human beings who would be a
definite economic drag on this country?”
Similarly with a number of small, lonely
British dependencies in the Pacific, “the
islands south of Hawaii (Canton, Enderbury, Christmas, the Phoenix group, etc.
down to Samoa) and the islands southwest
of Hawaii and south of the Japanese mainland.” Roosevelt told Hull, “If we owned
them, they would be difficult to defend
against Japan.”
Eventually, Britain also ran out of ready
cash, and it became clear that Roosevelt
would have to find a way to circumvent
the Neutrality Acts. As always when he
wanted time to brood on an apparently
insoluble problem, Roosevelt booked
himself onto a US Navy ship, to sail up
and down the eastern seaboard while he
was given time to think.
On Thanksgiving 1940, Roosevelt asked
his cabinet to ponder in his absence how,
in the circumstances of Britain no longer being able to pay for war materiel,
America could continue to supply the last
bastion of democracy against the dictators without having to run the gauntlet
of Congress, which would find endless
reasons to delay the provisions. Then, taking with him his close aide Harry Hopkins
and a couple of other chums to make up a
hand of cards, Roosevelt, in Frankfurter’s
words, “in a deep Lincolnesque mood,”
departed Washington for the naval dock
in Miami to sail the high seas aboard the
USS Tuscaloosa.
Roosevelt fished by day, sipped martinis
at sunset, played poker by night and otherwise let it be known that he wanted time
alone to ponder. A naval flying boat regularly delivered mail to the Tuscaloosa, and
on December 11 a long dispatch arrived
from Churchill. The President retreated
from the rest of the party for the duration
of the cruise.
For two days he lolled in a deck chair,
reading and re-reading the letter that
Churchill later recorded was “one of the
most important I ever wrote.” It suggested
that Roosevelt’s re-election the previous
month confirmed that “the vast majority
of American citizens” now believed that
“the future of our two democracies and
the kind of civilization for which they
stand are bound up with the survival and
independence of the British Commonwealth” and that “control of the Pacific by
the United States Navy and of the Atlantic
by the British Navy is … the surest means
to preventing the war from reaching the
shores of the United States.”
Until America and Britain were fully
rearmed, which Churchill thought would
take at least two more years, it had fallen to
Britain “to hold the front and grapple with
Nazi power until the preparations of the
United States are complete.” Then came
the nub. “The more rapid and abundant
the flow of munitions and ships which
you are able to send us, the sooner will
our dollar credits be exhausted,” Churchill
wrote. The current orders for arms “many
times exceed the total exchange resources
remaining at the disposal of Great Britain.
The moment approaches when we shall no
longer be able to pay cash for shipping and
other supplies.”
While Britain was happy to foot the
bill, Churchill said he hoped the President
would agree that “it would be wrong in
principle … if, at the height of the struggle, Great Britain were to be divested of
all saleable assets so that after victory was
won with our blood, civilization saved,
and time gained for the United States to
be fully armed against all eventualities, we
should stand stripped to the bone.”
Roosevelt returned to the White House
on December 14. He told the waiting press,
“I don’t think there is any particular news,
except possibly one thing that I think is
worth my talking about.” He continued:
There is absolutely no doubt in the
mind of a very overwhelming number
of Americans that the best immediate
defense of the United States is the success of Great Britain in defending itself
and that, therefore, quite aside from
our historic and current interest in the
survival of democracy in the world as
a whole, it is equally important from
a selfish point of view of American
defense that we should do everything to
help the British Empire to defend itself.
At first, he said, he thought the only way
to allow Britain to continue investing and
ordering supplies from American factories was to repeal the neutrality laws and
lend the Brits cash. An alternative would
be for America to make a gift of “all these
munitions, ships, plants, guns, etc.” He
also ruled that out. “I am not at all sure
that Great Britain would care to have a gift
from the taxpayers of the United States,”
he said.
But there was another way, he said, that
did not involve money or mortgages or
gifts. “What I am trying to do is to eliminate the dollar sign,” he said.
Suppose my neighbor’s home catches
fire, and I have a length of garden hose
four or five hundred feet away. If he
can take my garden hose and connect
it up with his hydrant, I may help him
to put out his fire. Now, what do I do? I
don’t say to him before that operation,
‘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.
If it goes through the fire all right,
intact, without any damage to it, he
gives it back to me and thanks me very
much for the use of it. But suppose it
gets smashed up — holes in it — during the fire. We don’t have to have
too much formality about it, but I say
to him, ‘I was glad to lend you that
hose. I see I can’t use it any more. It’s
all smashed up.’ …He says, ‘All right,
I will repla