The Secretary of State to the Minister in the Union of South Africa (MacVeagh)
32. Delay in answering A–522 has been due to conversations between this government and the Union of South Africa government concerning restricting Lend-Lease credit transactions exclusively to military aid. Heretofore basis for determining credit Lend-Lease has been contribution to South Africa’s war effort of material requested. Recent discussions, however, may restrict credit Lend-Lease to military assistance. Distinction between military and nonmilitary goods is being worked out on an item basis. Finished war material will [Page 184]continue to be under credit Lend-Lease basis since it will be used directly in the prosecution of the war. It is not possible at this time to determine eligibility for Lend-Lease upon the basis of consumers. This must be determined by the actual end-use of goods whether purchased for the government or for any other consumer. It is unlikely that material for the sustenance of local economy or of industries which in turn sell their product to this country or United Kingdom for cash would be eligible for Lend-Lease aid. We have had no reply to the suggestion made by this government to the South African government for the reduction in the amount of credit Lend-Lease aid to the South African government in view of the favorable trade position of the South African government. Future discussions here between this government and the South African government with reference to Lend-Lease policy will necessarily be delayed until such response is forthcoming. Lend-Lease mission to South Africa, which is on its way, can fully advise as to the extent of discussions prior to their departure and we will keep you currently advised as they may develop.
- Dated December 18, 1942, noon, not printed.↩