Foreign Relations of the United States: Diplomatic Papers, 1943, The British Commonwealth, Eastern Europe, the Far East, Volume III

800.24/1053

The British Embassy to the Department of State

Aide-Mémoire

On June 3rd Sir Frederick Phillips received from Mr. White a letter⁹⁹ stating that one of the questions before the Interdepartmental Committee dealing with matters of financial assistance to the Allies was the advisability of bringing within the scope of the Reciprocal Aid Programme purchases of certain goods being made by the United States in British Empire countries. On June 26th Mr. Stettinius sent to Sir Frederick Phillips approximate estimates of the value of purchases by United States government agencies from the British Empire (excluding Canada) of which a copy is attached for convenience of reference.¹

2. On June 29th Mr. Acheson left with Mr. Opie for His Majesty’s Ambassador a memorandum expressing the hope of the United States Government that His Majesty’s Government would find it possible to assemble and, to the extent compatible with military security, to make public figures with respect to the coat of goods and services delivered as Reciprocal Lend Lease. The object of these figures would be to indicate the impressive scope of the Reciprocal Aid extended to the United States by the United Kingdom.

3. His Majesty’s Government have given careful consideration to these issues. In their view the principle of the unstinted pooling of resources, namely that in a common war all shall give all they can to the common task, which has been adopted by the Governments of the United States and the United Kingdom, clearly goes far beyond the sharing of production and raw materials. Lend Lease and Reciprocal Aid form one element in a larger whole and are one illustration of a significant doctrine. It is with the desire to cooperate with the United States Government in the furtherance of this conception of pooled resources and in the confident belief that that Government will do everything possible to the same end, that His Majesty’s Government have considered the requests put forward in Washington for the publication of Reciprocal Aid figures and for the supply of raw materials as Reciprocal Aid.

4. As regards the publication of Reciprocal Aid figures, His Majesty’s Government have devoted much thought to devising a way in which the object that the United States Government has in mind could be achieved without incurring the dangers which His Majesty’s Government have hitherto felt in the publication of figures. Their feeling has been that there is a risk of serious misunderstanding in valuing in terms of money the goods and services provided in the pooling of resources. They have felt that the publication of monetary values involves bringing back the dollar and sterling signs into these transactions and furthermore that it would be difficult to establish comparative values without controversy. Moreover, they have throughout been impressed with the fact that keeping of detailed accounts must involve for them a diversion of man-power from other war duties which they feel they cannot afford.

5. His Majesty’s Government understand that the United States War Department issued instructions in June to all theatre Commanders to report all monetary values of Reciprocal Aid received, these instructions to go into force officially on July 1st. For His Majesty’s Government to keep values of all items on the lines contemplated by these instructions would require several thousands of clerks and accountants whom they are unable to spare for the purpose. Further, the Reciprocal Aid furnished by His Majesty’s Government does not consist of large block shipments centrally procured and centrally financed but of a wide field of items given in the daily intercourse of the war effort by complete decentralisation of administrative responsibility. Whatever the American forces ask for His Majesty’s Government give if they have it and often to the deprivation of the civil population, but they do not enter all these gifts in an exact ledger account.

6. Nevertheless, for the reasons explained in paragraph 3 above, His Majesty’s Government are prepared to meet the suggestion that they should announce monetary figures for Reciprocal Aid. They accordingly propose during the week commencing August 1st to present to Parliament a White Paper describing the general principles of Lend Lease and Reciprocal Aid, illustrating the range of help given and containing global valuations for each of the main groups of such services and assistance as can be valued. This paper will set out what His Majesty’s Government give to the United States and also what they give to the other United Nations. The contribution is on a very substantial scale especially in the case of Russia. As soon as the White Paper has been presented to Parliament its text will be communicated to the United States Government.

7. It will of course be understood that the White Paper can only deal with the contribution of His Majesty’s Government in the United Kingdom, and His Majesty’s Government assume that the United States Government is asking Dominion Governments in the sterling area and the Government of India for similar material. In the meantime His Majesty’s Government are informing these Governments of the action they themselves are taking.

8. In return for this action on their part His Majesty’s Government hope that the War Department will find it possible to withdraw the instruction mentioned above. They hope that the United States Government will understand that for the reasons given in paragraph 5 above, they cannot give itemised valuations of reciprocal aid in the way the War Department’s instructions would imply.

9. His Majesty’s Government have in the light of the principle of the pooling of resources given the most careful and sympathetic consideration to the more important request made by the United States Government for the supply by His Majesty’s Government, as Reciprocal Aid, of raw materials to a total value of about two hundred million dollars a year. On the assumption that the list and valuation accompanying the letter from Mr. Stettinius referred to above represents roughly the effect of what is proposed and that no major item will be added, His Majesty’s Government have taken the decisions recorded in the following three paragraphs.

10. His Majesty’s Government will supply as Reciprocal Aid and at the expense of the United Kingdom Government the raw materials called for from the United Kingdom, Southern Rhodesia and the Colonies which are purchased by the United States Government. It is understood that the United States Administration agree that this shall not apply to purchases made through private trade channels. It is proposed that this arrangement shall apply to contracts for the supply of such materials which are made on or after the 1st October, 1943.

11. Australia,² New Zealand,³ South Africa⁴ and India⁵ either have separate reciprocal aid agreements with the United States or are negotiating them. His Majesty’s Government therefore suggest that the United States Government may wish to approach directly the Governments of each of these countries. For their part His Majesty’s Government will inform the latter of their decision and of their general policy.

12. In addition His Majesty’s Government will defray at their own expense the cost of British shipping services for these materials from all parts of the Commonwealth.

Washington , August 2, 1943.

99. Not found in Department files.
1. Not printed.
2. For text of the agreement with Australia, effected by exchange of notes signed September 3, 1942, see Department of State Executive Agreement Series No. 271.
3. For text of the agreement with New Zealand, effected by exchange of notes signed September 3, 1942, see Executive Agreement Series No. 272.
4. For correspondence regarding the conclusion of a reciprocal aid agreement between the United States and the Union of South Africa, see pp. 173 ff.
5. For correspondence concerning the consideration of proposal for a lend-lease agreement between the United States and India, see vol. iv, pp. 246 ff.; for related correspondence, see ibid., pp. 283 ff.