CANADA: The Rub

During World War II, the U.S. rated its bases in Newfoundland as the strongest outpost in North America's Atlantic defense. Nearly $400 million was pumped into Newfoundland during the war years to build air and naval installations on the rugged island. In peacetime an average of $30 million a year continued to flow from Washington to keep the bases in first-rate shape and, incidentally, provide Newfoundland with the equivalent of an important industry.

On the human side, the U.S. deal with Newfoundland looked every bit as sound. In 1940 President Roosevelt, announcing the 99-year lease of the bases from England, had...

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