World War and the Growth of Global Power 247offered to help Churchill by sending 50 old destroyers and in exchange
received 8 British bases which were important to the Open Door, including
ports at Newfoundland, Antigua, the Bahamas, Jamaica, and Trinidad. In
August 1941, FDR and Churchill met in Newfoundland and devised the
Atlantic Charter, which set the terms for military cooperation and, importantly,
called for equal access to trade and raw materials, an end to trade barriers,
and “open seas,” meaning that the U.S. could have commercial rights in
British territories. Roosevelt and Churchill had a good relationship—“it is
fun to be in the same decade with you,” the president wrote to the Prime
Minister—but it was clear that the U.S. saw a significant opportunity to use
the war against Germany as a way to also break open the British Empire’s
closed trading system. As for the Soviet Union, Stalin had his own goals in
addition to defeating Hitler, especially creating a defensive zone in Europe to
protect against any future invasions, and creating new opportunities for
Communists on the continent.
World War II and the American Economy
While FDR was navigating the politics of neutrality at home while trying to
keep Western Europe out of Nazi hands, the Axis aggression did provide an
important bonus to the U.S.—a way out of the depression. After the
“Roosevelt Recession,” there was a slight improvement in the economy in
1939 often attributed to shifts in “monetary” policy, namely the decision by
the Federal Reserve to go to “easy” on money and credit. The Fed released
much more money into circulation--$45-48 billion in 1938-39 [compared to
$30 billion in 1933]—and now businesses could get credit and reopen or
expand operations, thus creating jobs and consumer demand. But from early
1940 onwards, economic success was based on fiscal more than monetary
issues, and those were connected to a tremendous surge in government spend-
ing on various military projects to help in the fight against fascism. This
military spending buildup showed results almost immediately and, it is crucial
to point out, they began and took hold before the U.S. actually joined the war
after the Japanese attack on Pearl Harbor. Military spending finally put the
depression to rest. This policy was often referred to as Military Keynesianism
because it took the foundation of Keynes’ thought—massive government
spending, and thus debt, to stimulate employment—but attached it to the