810.20 Defense/764

Memorandum by the Adviser on Political Relations (Duggan)2

The uncertainty regarding the procedure pertaining to the purchase of military and naval matériel3 by the other American Republics in the United States has been clarified in certain particulars to the extent that it is believed the following steps should be taken:

1. A letter should be sent to the President informing him that the State, War and Navy Departments have agreed that it is essential to the defense not only of the other American countries but also of the United States to furnish those countries during the next few years with military and naval matériel to the value of approximately $400,000,000 and that economic and financial stringency will make it impossible for the other American Republics to pay, whether in raw materials, or cash, or through loans, for all of this matériel. The President, therefore, should be informed that it would obviously be unwise to initiate discussions with the other American Republics for the furnishing of this matériel unless the President were prepared to consider as vital to the defense of the United States, the defense of those countries, thereby enabling them to obtain all of the matériel considered essential to their defense by the Secretaries of War and of the Navy.

I have prepared a draft of such a letter4 which has the approval of Mr. Hackworth.5 With your approval, the draft of this letter will be discussed informally with the proper officers of the War and Navy Departments for their suggestion prior to submitting it to Mr. Stimson and Mr. Knox6 for signature.

2. If the President’s reply is affirmative the next step. would seem to be for each Chief of Mission of the American countries, in Washington, to be informed of the maximum amount of munitions and naval supplies that this Government can undertake to furnish during the next few years. It is suggested that this opportunity be taken to impress upon these diplomatic representatives that, at this juncture, the best defense of the western hemisphere is through the continued [Page 135] resistance of Great Britain; that this country is sending every piece of matériel that it can spare from its own Army and Navy to Great Britain7 for which reason it is unable to furnish more of the supplies requested by the several American countries.

The diplomatic representatives should be furnished a price list of the principal items which this Government is prepared to furnish with the request that they secure from their Governments a list of the items which their Governments desire within the total amount to be made available.

Although at first, I thought that it would be preferable for representatives of the War and Navy Departments to inform the several countries of the amount allocated to each, it seems to me now that it would be better if the Department undertook this task. It is believed that by painting the entire picture to the diplomatic representatives it will be easier to secure acquiescence in the figure allocated to each country than were this job to be handled by military and naval representatives.

3. The preparation of the list of items which each Government desires within the total amount set aside for each will probably result in many questions which can only properly be answered if each Government has some qualified military or naval officer in Washington to handle the discussion with representatives of the War and Navy Departments.

4. Once the tentative list of requests has been agreed upon by the representatives of the other American Governments in Washington and the representatives of the War and Navy Departments, this list should be submitted officially by the Government concerned through the usual diplomatic channels.

5. This list should be communicated by the State Department to the War and Navy Departments. There would be no need, as I see it, for the list to pass through Mr. Curtis’ office. With this, I think Mr. Curtis is in agreement.

The question of payment will probably arise immediately. Although I have not yet definite recommendations regarding the procedure to be followed with regard to negotiating the mode of payment with each country, it seems to me that when the question is raised each country should be informed that this question will be negotiated as and when the definite list of matériel desired is agreed upon with our War and Navy Departments. In the meantime, study should be made to determine in the case of each country what payment can be made in raw materials, what payment can be made in cash, what payment can be made through credits advanced by the Export-Import Bank and what part will have to be covered under the Lend Lease Bill.

Although the determination of the mode of payment is important, it is not as immediately urgent as the determination of the items [Page 136] which each country desires and the placing of those orders. This, in turn, might be preceded by some indication of the President’s views regarding the application of the Lend Lease Bill. If the President does not wish to use the Lend Lease Bill, it would appear necessary drastically to revise the proposed allocation.

Laurence Duggan
  1. Addressed to the Assistant Secretary of State (Acheson) and the Under Secretary of State (Welles).
  2. Besides the documentation herein printed on this phase of the Lend-Lease program, see also an official account in Stetson Conn and Byron Fairchild, The Framework of Hemisphere Defense, in the series United States Army in World War II: The Western Hemisphere (Washington, Government Printing Office, 1960), pp. 217–224. (Hereinafter cited as Framework of Hemisphere Defense.)
  3. Dated April 22, 1941; not printed.
  4. Green H. Hackworth, Legal Adviser.
  5. Henry L. Stimson, Secretary of War, and Frank Knox, Secretary of the Navy.
  6. For correspondence regarding negotiations for Lend-Lease Agreement between the United States and the United Kingdom, see vol. iii, pp. 1 ff.