Throughout the spring and early summer of 1940 Germany threatened to conquer all of Europe. During that time Germany's army invaded and conquered the countries of Belgium, Luxembourg, the Netherlands and France, and it's luftwaffe and navy stepped up their attacks on Britain. The smaller number of ships in the Royal Navy at that time was not equal to the task facing Britain. The construction of new British warships, begun at the outset of the war, had not yet been completed. Prime Minister Churchill, desperate for destroyers, turned to the United States for aid. Following months of negotiations the United States government agreed to give Britain fifty old destroyers in return for the right to lease land in various parts of the British Empire so that the U.S. could build military bases. Britain accepted the deal and offered to the United States, in addition the right to lease land for a period of ninety-nine years in Newfoundland and in Bermuda as a free gift, not contingent upon the delivery of the destroyers.
Although the official agreement between the two governments was not signed until March 27, 1941, Argentia with its good, ice free harbour and its strategic position, had already been chosen by an American Military Survey team in the fall of 1940 as a site for a military base. By the end of December 1940 construction of the base there had begun. Because of its strategic position it was quickly realized that Argentia would be one of the key bases for the Allied Forces in the North Atlantic during World War II. The mammoth U.S. Military Base which was subsequently established at Argentia was the most expensive of the American overseas bases built during World War II, costing over $45,000 000.00. When completed it consisted of a Naval Operating Base and a Naval Air Station with three runways on the north side of Argentia harbour and a U.S. Army Base known as Fort McAndrew on the south side of the harbour. The Naval Operating Base and Air Station at Argentia served throughout World War II as a base for both United States and Allied Forces, anti-submarine air patrols and task force escorts. The largest single United States task force in the Atlantic, consisting of six escorts carriers and fifty destroyers based there. Fort McAndrew was used as the base for a sea coast artillery group, an anti-motor torpedo boat battalion and an infantry company. There were also searchlight positions at Fox Island, Dunville and the base itself. In addition Army personnel regularly patrolled the east side of Placentia Bay and in 1942 a road was built from Argentia to Holyrood to improve war-time transporation and communications. In a 12,403 military personnel were stationed at Argentia by 1943.
The establishment of the Argentia base affected those who lived on the site prior to 1941. In fact, the whole community of Argentia was dismantled and its inhabitants moved to other communities in the area, nevertheless, the overall economic benefit which resulted from the base's activities compensated for this inconvenince to the Argentia area, which like the rest of the western world had just come through a long and hard economic depression. Although detailed statistics do not exist on the subject, a few indications of the benefits resulting from the establishment are available. Probably the most frequently recognized effect of the base's presence was the creation of a large number of jobs for civilians. Estimates have been made which place the number of Newfoundland civilians working on the base during construction between 10 000 and 15 000. Certainly large numbers of men were employed there. Entire communities even as far away as the west side of Placentia Bay became dependent on the base for their livelihood. Following construction Newfoundlanders continued to be employed at the base, and as late as the mid-1950's payroll for civilians working at Argentia amounted to approximately $400 000.00 a month.
The impact that Argentia and the other U.S. bases made on Newfoundland's economy may also be gauged by the increase in total imports for the civilian population of Newfoundland from 1940 to 1944. In the former year $28.4 million worth of commodities for civilians were imported into Newfoundland; by 1944 figure had risen to $46.6 million. It has also been stated that certain businesses, such as dairies, soft drink factories and retail outlets near Argentia and other bases experienced significant increases in sales following the establishment of U.S. bases in Newfoundland .
Since World War II a number of changes have occurred at the base. Fort McAndrew, which had become an Air Force Base in 1948, was given to the Navy in 1955 prior to the establishment of an Atlantic Barrier Force and an Airborne Early Warning Wing at the Naval Station that year. A Naval Facility was commissioned in 1959 to begin oceanographic studies for the U.S. Navy and by 1965, following the disestablishment of the Airborne Early Warning Wing at Argentia the Facility was the largest tenant command on the base. In 1974 the Air Station was abandoned and in the following year the Naval Station was disestablished.
In 1980 the Naval Facility, manned by both Canadians and Americans, still conducted oceanographic studies. A Navy Commissary Store, a detachment of the United States Air Force and a radio station, the Navy Broadcasting Service Det One(AFRS), were also operating on the base at that time. In 1980 there were approximately four hundred male and female personal of the U.S. U.S. and Canadian Forces stationed at Argentia and approximately three hundred Newfoundland civilians employed at the base.
Besides use of the base by military personnel, commercial airlines, operating in Newfoundland, periodically used the Argentia airstrips after World War II when weather in St. John's was too poor to land there. This practice ended in 1974 when the Air Station was abandoned by the military .