Economic Weapons in the European War

February 8, 1940

Report Outline
The Military Importance of Economic Power
Productive Capacity of European Countries
German Resources and Sources of Supply
British Ability to Wage Economic War
Special Focus

The Military Importance of Economic Power

Behind The Scenes of the war in Europe a vital struggle is taking place for trade with the nations which are still neutral. Despite Winston Churchill's appeal to the neutrals to become belligerents, the economic resources of the Scandinavian and South European countries are more important than their possible military participation. If the Maginot and Siegfried lines are as impregnable as is generally supposed, the outcome of the war may depend on Germany's ability to nullify the British naval blockade by obtaining steel from Sweden, and sufficient supplies of oil, foodstuffs and other essentials from Italy, the Balkans, and Russia.

The pre-war calculations of experts have been completely upset by the absence of large-scale military operations on the western front. The anticipated strategy of England and France was to wage a defensive battle while Germany exhausted man-power and resources in a furious assault; it was assumed that unless Germany could win a decisive victory in a comparatively short time, the Allies with their ability to obtain reserves of men and supplies from overseas must eventually prevail. But so long as there is only a “quiet war” German resources are apparently sufficient to last indefinitely—unless supplies from neighboring neutral countries can be almost completely cut off.

Germany has already concluded war-time trade agreements with Hungary, Manchukuo, Russia, and Rumania, and others are being negotiated. The Allies have not yet exerted the full economic and diplomatic pressure of which they are capable; thus far, Germany seems to have been the more successful in commercial negotiations. Unless this trend can be reversed by the Allies, or unless deliveries of supplies to Germany are curtailed by transportation difficulties, the Allied blockade may be largely ineffective under present conditions of military activity. The London Economist has already suggested that England and France will eventually have to undertake a military offensive:

ISSUE TRACKER for Related Reports
World WarII Raw Materials
Oct. 17, 1942  Silver in the War Effort
Oct. 03, 1942  European Food Resources
Sep. 14, 1942  Concentration of Production
Aug. 01, 1942  Rubber Supplies and Replacements
Jun. 05, 1942  Access to Raw Materials
Oct. 30, 1941  Enforcement of World Peace
Sep. 04, 1940  Problems of Tin and Rubber Supply
Feb. 08, 1940  Economic Weapons in the European War
Regional Political Affairs: Europe
U.S. at War: World War II
War and Conflict
World War II