Foreign Relations of the United States: Diplomatic Papers, 1942, General; the British Commonwealth; the Far East, Volume I

841.24/1381½

The Secretary of State to President Roosevelt⁴⁰

Washington, May 30, 1942.

My Dear Mr. President: I enclose for your consideration drafts of notes to be exchanged with the British Ambassador and the Australian Minister concerning the principles and procedures applicable to the provision of aid by the Governments of the United Kingdom and Australia to the armed forces of the United States.⁴¹

The essence of the proposed arrangement with the United Kingdom is that the war production and war resources of each contracting nation should be used by the armed forces of each, and of the other United Nations, in ways which most effectively utilize available materials, manpower, productive facilities and shipping space. With respect to financing, the general principle to be applied is to reduce to a minimum the need of each Government for the currency of the other.

In applying these principles the United Kingdom will furnish United States forces with all military equipment, munitions, military and naval stores, supplies, materials, facilities and services for which the United Kingdom or the British colonial empire is the most effective source of supply.

The proposed arrangement with Australia is identical.

These drafts have been approved in substance by the War and Navy Departments, the Office of Lend-Lease Administration, the Treasury and the Board of Economic Warfare as a basis for negotiation with the British and Australians. If you approve them for this purpose, negotiations will be undertaken immediately.

You have recently approved the conclusion of lend-lease agreements with a number of the other United Nations substantially identical to that with the United Kingdom. It is anticipated that such an agreement or arrangement identical in substance will be concluded with Australia before the proposed exchange of notes is carried out.

Faithfully yours,

Cordell Hull

[Enclosure 1]

Draft From the British Ambassador to the Secretary of State

With a view to supplementing Articles II and VI of the Agreement of February 23, 1942 between our two Governments for the provision of reciprocal aid, I have the honor to set forth below my understanding of the principles and procedures applicable to the provision of aid by the Government of the United Kingdom to the armed forces of the United States and the manner in which such aid will be correlated with the maintenance of those forces by the United States Government.

1. Each of our Governments pledged itself in the United Nations Declaration of January 1, 1942⁴² to employ its full resources, military or economic, against those nations with which it is at war. Each Government undertook in the Agreement of February 23, 1942 to provide the other with such articles, services, facilities or information, useful in the prosecution of their common war undertaking, as each may be in a position to supply. The general principle to be followed in providing such aid is that the war production and war resources of both nations should be used by the armed forces of each, and of the other United Nations, in ways which most effectively utilize available materials, manpower, productive facilities and shipping space.

2. Where appropriate, decisions as to the most effective use of resources shall be made in common, pursuant to common plans for winning the war.

3. As to financing the provision of such aid, within the fields mentioned below, it is my understanding that the general principle to be applied is that as large a portion as possible of the articles and services to be provided by each Government to the other shall be in the form of the reciprocal aid so that the need of each Government for the currency of the other may be reduced to a minimum. It is accordingly my understanding that the United States Government will provide, in accordance with the provisions of, and to the extent authorized under, the Act of March 11, 1941,⁴³ the share of its war production made available to the United Kingdom. The Government of the United Kingdom will provide, on the same terms and as reciprocal aid, in accordance with the Agreement of February 27 [23], 1942, the share of its war production made available to the United States.

4. The Government of the United Kingdom will provide the United States or its armed forces with the following types of assistance, as such reciprocal aid, when it is found that they can most effectively be procured in the United Kingdom or in the British colonial empire:

(a) All military equipment, munitions and military and naval stores.

(b) Other supplies, materials, facilities and services for the United States forces, except for the pay and allowances of such forces and such local purchases as its official establishments may make other than through the official establishments of the Government of the United Kingdom as specified in paragraph 5.

(c) Supplies, materials and services needed in the construction of military projects, tasks and similar capital works required for the common war effort in the United Kingdom or in the British colonial empire, except for the wages and salaries of United States citizens.

(d) Supplies, materials and services needed in the construction of such military projects, tasks and capital works in territory other than the United Kingdom or the British colonial empire or territory of the United States to the extent that the United Kingdom or the British colonial empire is a more practicable source of supply than the United States or another of the United Nations.

5. Requests by the United States Government for such aid will be presented by duly authorized authorities of the United States to official agencies of the United Kingdom which will be designated or established in London and in the areas where United States forces are located for the purpose of facilitating the provision of reciprocal aid.

6. It is my understanding that all such aid accepted by the President of the United States or his authorized representatives from the Government of the United Kingdom will be received as a benefit to the United States under the Act of March 11, 1941. In so far as circumstances will permit, appropriate record of aid received under this arrangement, except for miscellaneous facilities and services, will be kept by each Government.

7. The aid to be provided each other by the signatory Governments under the Agreement of February 23, 1942, and as indicated above, will be provided on the same terms by each Government to the forces of such of the other United Nations as shall enter into similar arrangements with them.

If the Government of the United States concurs in the foregoing, I would suggest that the present note and your reply to that effect be regarded as placing on record the understanding of our two Governments in this matter.

I have [etc.]

[Enclosure 2]

Draft From the Secretary of State to the British Ambassador

I have the honor to acknowledge the receipt of your note of today’s date concerning the principles and procedures applicable to the provision of aid by the Government of the United Kingdom to the armed forces of the United States, the terms of which are as follows:

(The British Ambassador’s note is here quoted)

In reply I have the honor to inform you that the Government of the United States agrees with your understanding as expressed in that note and that, in accordance with the suggestion contained therein, your note and this reply will be regarded as placing on record the understanding between our two Governments in this matter.

Accept [etc.]

40. Returned by the President with notation “C. H. OK. FDR”.
41. Drafts of notes pertaining to the British were handed by Mr. Acheson to Mr. Bewley on June 1, 1942, and on the same date drafts of notes substantially the same were handed to representatives of Australia and New Zealand.
42. Ante, p. 25.
43. Lend-Lease Act, 55 Stat. 31.