Bermuda is a self-governing island Overseas Territory of the United Kingdom,
situated in the Atlantic Ocean. The capital is Hamilton.
In the early 20th century, as modern transportation and communication
systems developed, Bermuda became a popular destination for wealthy US,
Canadian, and British tourists. In addition, the tariff enacted by the
United States against its trading partners in 1930 cut off Bermuda's
once-thriving agricultural export trade--primarily fresh vegetables to the
US--spurring the overseas territory to develop its tourist industry, which
is second behind international business in terms of economic importance to
During World War II, Bermuda became important as a military base because of
its location in the Atlantic Ocean. In 1941, the United States signed a
lend-lease agreement with the United Kingdom giving the British surplus U.S.
Navy destroyers in exchange for 99-year lease rights to establish naval and
air bases in Bermuda. The bases consisted of 5.8 square kilometers (2.25 sq.
mi.) of land largely reclaimed from the sea. The US Naval Air Station was on
St. David's Island, while the US Naval Air Station Annex was at the western
end of the island in the Great Sound.
Effective September 1, 1995, both bases were closed, as were British and
Canadian bases on the island. Unresolved issues concerning the 1995
withdrawal of US forces-- primarily related to environmental
factors--delayed the formal return of the base lands to the Government of
Bermuda. The United States formally returned the base lands in 2002.