This nickname for the U.S.A. comes from the early
Second World War. The U.S. was not yet directly involved in the conflict, but sympathized strongly with the
Allies. As a result, various legal and
fiscal means were employed to ship enormous quantities of
arms and materièl overseas to allied (
democratic, in some cases) nations. Programs such as
Lend-Lease and large loan funds were set up.
When the U.S. finally did enter the war, it did so with technologically inferior weaponry. However, the retooling of the U.S. economy to a war footing allowed the country to produce a simply staggering amount of military supplies and weapon systems. The constant flow of arms and ammunition and other sundries from the U.S. was so large, German soldiers were known to poke through captured American troops' belongings in awe. It was this huge outflow of materials that caused the phrase Arsenal of Democracy to become popular. It allowed Americans to feel as if they were contributing even before the nation entered the war officially, and it was used to motivate production workers once the country actually sent forces abroad.