840.50/2832b

The Under Secretary of State (Stettinius) to President Roosevelt 14

My Dear Mr. President: Following our conversation of October 13 [12],15 I am sending you a memorandum on the scope of the United Nations Relief and Rehabilitation Administration. The position taken in this memorandum follows an exchange of views with Mr. Richard Law, in which Governor Lehman participated, and I believe it represents the consensus of thinking on this subject.16 If it meets with your approval, we will proceed accordingly to draft for your consideration instructions to Mr. Dean Acheson, whom you have designated as the U.S. representative to UNRRA.17

I am enclosing also a memorandum on finance, the result of discussions between the Department of State and the Treasury Department. I gave you the gist of this on Tuesday.18 If it meets with your general approval, I shall have appropriate legislation, together with a message to Congress, drafted for your consideration.19

Faithfully yours,

E. R. Stettinius, Jr.
[Page 1025]
[Enclosure 1]

Memorandum on the Scope and Operations of UNRRA

A. Principles.

[Here follows seven-paragraph section substantially the same as section “A. Principles” of the British memorandum of October 5, printed on page 1015.]

B. Procedure.

UNRRA should be closely associated with the wartime machinery charged with the allocation of supplies and shipping. This centers in the Combined Boards and the various Supply Agencies in Washington and London. UNRRA must be in constant touch with these Boards and Agencies, and with the field staffs of the latter, to present the case for the supplies needed in the territories for which it has responsibility on comparable terms to the cases presented for other territories.

Before the occupied territories are actually liberated, it will greatly assist both UNRRA and the national Supply Agencies to have reasonably complete estimates of the requirements of those territories, both individually and in a group. During this preinvasion period particular supplies should not be earmarked for each territory to be liberated and the Governments of these territories should not be able to take unregulated action themselves to secure supplies. In formulating plans it will be necessary, therefore, for UNRRA to act for all liberated territories and to collaborate both with the U.S. and U.K. military and supply authorities in the presentation of estimates of requirements and in securing by the national agencies the necessary procurement action.

Once a territory has been liberated, more accurate requirements programs will have to take the place of the advance estimates. These may be developed to some extent during military control. Once UNRRA’s representatives are established in the territory, they will participate, in collaboration with the local authorities and with the military or civilian officers of the liberating powers, in the preparation of these programs. Such collaboration will require the formation of some kind of joint office or programming authority, the form of which will no doubt vary from country to country according to local circumstances such as the ability of the local government to formulate its own requirements program, to distribute or control the distribution of supplies and to pay for what it gets.

If there is no local government, or if the local government is not able to prepare a program the responsibility for such preparation will fall for the most part upon UNRRA’s representatives, with the [Page 1026] collaboration of national Supply Agencies through their representatives attached to diplomatic missions in the area. Where the local government has administrative services sufficiently well established to do its own programming, UNRRA and the Supply Agencies will require only a few representatives in the field. In either event such a unit, consisting of representatives of UNRRA, the Supply Agencies, and the local government, will be required if a fair allocation of supplies is to be obtained, and if the allocating authorities are to be satisfied that the supplies and shipping requested are genuinely required and properly used.

Where a local government cannot pay for its imports, it will have to make application to UNRRA for its needs, and its requirements program should go to UNRRA for action. The overall supply authorities should be simultaneously informed of the program although they would take no action until authority was received from UNRRA. Where the local government is able to pay for its imports it would still be necessary for UNRRA to receive complete information about the import programs and to have an opportunity to veto excessive demands to assure a fair distribution of supplies between paying and non-paying countries.

It will be desirable for recognized local authorities to undertake as much as possible the distribution of goods within liberated territories. However, in some countries severe dislocation, epidemics or other special conditions may make it essential for some outside authority to provide technically trained personnel to assist or to handle completely distribution of relief goods. The provision of such assistance after the emergency military period would be for discussion between UNRRA and the local government and/or the military authorities. UNRRA must be able to supervise distribution of supplies which it has itself financed to make certain that they are being properly used.

So far as they are able, and in so far as conditions permit, local governments should likewise be encouraged to undertake as much of the work of procurement and handling of goods as is possible without disrupting existing machinery.

In cases in which UNRRA is providing the finance, it might be arranged, where necessary, that the appropriate Agency of the supplying government procure and handle the goods and be reimbursed through UNRRA from the credit or fund opened in that country for UNRRA.

Similar considerations would apply as regards shipping, since the various supplying Governments have established procedures for the handling and loading of ships and for synchronizing the movement of goods to the ports with the arrival of vessels for loading.

[Page 1027]

C. Finance.

The Treasury Department has submitted certain proposals with regard to arrangements for the financing of UNRRA. A preliminary memorandum on these proposals is attached, and a fuller report is being prepared.

[Enclosure 2]

Memorandum on a Tentative Plan for Financing UNRRA

The purpose of this plan is two-fold: First, to provide a yardstick which can be used in discussions with member Governments to indicate the extent of the relief contribution desired from them; second, to provide credits in a large number of countries which can be used to pay for goods or services purchased on behalf of UNRRA.

Wherever possible, liberated countries will pay in gold or foreign exchange for supplies imported from abroad. Many liberated countries may not have gold or foreign exchange with which to do this. They may be asked to pay to some extent in their own currency for such supplies, but this will obviously not provide the foreign exchange necessary to purchase them abroad. It becomes necessary to obtain this foreign exchange, and the following plan is provided to do this.

1.
A “donor” country is considered to be a member of UNRRA which has not been occupied by the enemy. Liberated countries will not be asked to be donors, but of course they may donate if they so desire.
2.
The goal will be to have each donor country contribute as a once-for-all relief contribution 1% of its national income for the fiscal year 1942–3 (or for the most recent year for which figures are available). At a later date, it may be necessary to reconsider the necessity for further requests, but this proposal is based on one contribution.
3.
Each donor country will be asked to make the contribution in its own currency with the expectation that the funds will be spent in that country, except that where a country is able to do so it will be asked to make available 10% of its contribution in gold or foreign exchange for purchases outside of its territory.
4.
With these contributions, UNRRA will pay for all supplies and services it obtains in local currency up to the amount of the contribution of the country involved, and when that contribution is exhausted will make use of the gold or foreign exchange available to UNRRA.
5.
A country which prefers because of short supplies within its own territory to pay more than 10% of its contribution in gold or foreign exchange will be free to do so.
6.
In terms of the request to be made of Congress, this would mean that Congress would be asked to authorize or appropriate approximately $1,400 millions. It would be explained to Congress that this contribution would be handled through agencies of the United States Government as follows: In respect of commodities which are rationed or are in short supply in the United States, purchases out of the United States contribution would be made abroad wherever possible. In respect of other supplies or services, purchases would be made in the United States. Such a proposal would be, in effect, that, up to the amount indicated, a contribution would be made in kind of American supplies and services, but where such contributions would unduly impinge upon local consumption, they would be purchased abroad.

It is contemplated that the United States’ share of the administrative expenses will be contained within the above contribution.

  1. The following marginal notation appears on copy of this letter which was returned to Mr. Stettinius on October 26. “E.R.S. Jr. OK FDR.” (840.50/3252)
  2. Mr. Stettinius’ conference with President Roosevelt was summarized in a memorandum of telephone conversation by the Under Secretary of State with Judge Rosenman on October 12; not printed.
  3. For text of resolution No. 1, Relating to the Scope of the Activities of the Administration, adopted by the First Session of the Council, see Department of State publication No. 2040, First Session of the Council …, p. 27.
  4. Memorandum of October 12 regarding Mr. Acheson’s appointment, not printed.
  5. October 19.
  6. For messages to Congress by President Roosevelt and the Secretary of State concerning proposed legislation on U.S. participation in UNRRA, see Department of State Bulletin, November 20, p. 372, and ibid., December 11, p. 416. For text of resolution No. 14, Relating to a Financial Plan for the Administration, see First Session of the Council …, p. 44.