The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

In December 1940, with his third election safely out of the way, Franklin Roosevelt proclaimed the United States the “arsenal of democracy.” In March 1941, Lend Lease was instituted, which removed the problem of finance—or, as Roosevelt put it, “the silly, foolish old dollar sign”—as a constraint on American supply to Britain. Among those things to be “lent,” for repayment at some indefinite time in the future, was American oil. The neutrality legislation, which restricted the ability to ship supplies to Britain, was progressively loosened. And, in the spring of 1941, when oil supplies began to plummet in the United Kingdom, fifty American oil tankers were switched from supplying the American East Coast ports to carrying oil for transshipment to England. Thus, by late spring 1941, important steps had been taken to weld together the American and British supply systems and put the United States in position to fuel England’s lonely stand. In fact, the United States had a surplus, unused oil production capacity of about one million barrels per day. That was equivalent to about 30 percent of the 3.7 million barrels per day production that year. The extra capacity, a result of the federal-state prorationing system set up in the 1930s, turned out to be an invaluable security margin, a strategic resource of immense significance. Without it, the course of World War II might well have been different.