Foreign Relations of the United States Diplomatic Papers, 1941, The British Commonwealth; The Near East and Africa, Volume III

841.24/1388

The British Prime Minister (Churchill) to President Roosevelt¹

January 2, 1941

I agree with your proposal to stave off our difficulties by sending a warship to Cape Town to collect the gold at our disposal there amounting, I believe, to about 30 million sterling. I ought to let you know that this transaction will almost certainly become known to the world with varying reactions.

Meanwhile I learned with pleasure from Mr. Purvis² of his talk with you and Mr. Morgenthau³ on Monday.⁴ Instructions have been given to furnish you with any further figures about our requirements which you may seek.

We are deeply grateful for all your understanding of the problems which will be thrown up in the interval before Congress approves your proposals.⁵ It is not only a question of total amounts but of how we are to live through a period which may perhaps extend to February 15th. What would be the effect upon the world situation if we had to default on payments to your contractors who have their workmen to pay? The idea that in the interval we shall either have to default or be stripped bare of our last resources is full of danger and causes us profound anxiety. I feel sure this will be ever in your thoughts.

Furthermore apart from the general totals and interim period there arises a group of problems about the scope of your plan after being approved by Congress. What is to be done about the immensely heavy payments still due to be made under existing orders before delivery is completed? Substantial advance payments on these same orders have already denuded our resources. We have unceasing need for various American commodities not definitely weapons: for instance raw materials and oil. Canada and other Dominions, Greece and also Poland and Czechoslovakia, have clamant dollar needs to keep their war effort alive. I do not seek to know immediately how you will solve these later questions. We shall be entirely ready for our part to lay bare to you all our resources and liabilities around the world, and we shall seek no more help than the common cause demands. We naturally wish to feel sure that the powers with which you propose to arm yourself will be sufficiently wide to deal with these larger matters, subject to all proper consideration. Without prompt and effective solution of these problems Hitlerism cannot be extirpated from Europe, Africa and Asia.

1. Transmitted to the President by Mr. Nevile Butler, Counselor of the British Embassy, on January 2, 1941.
2. Arthur Purvis, Chairman of the British Supply Council in North America.
3. Henry Morgenthau, Jr., Secretary of the Treasury.
4. December 30, 1940.
5. The proposals referred to related to President Roosevelt’s decision to lease goods to the British rather than demand dollar payment for them. See address by the President, December 29, 1940, Department of State Bulletin, January 4, 1941, p. 3.