Foreign Relations of the United States, Conference at Quebec, 1944

Hopkins Papers

Memorandum Prepared in the British Treasury¹

top secret

[London, September 4, 1944.]

Lend-Lease Supplies for Britain in Stage II

1. The President, in transmitting to Congress the Sixteenth Quarterly Report on Lend-Lease Operations, has recommended that “until the unconditional surrender of both Japan and Germany, (the United States) should continue the Lend-Lease programme on whatever scale is necessary to make the combined striking power of all the United Nations against our enemies as overwhelming and as effective as we can make it”.² There are several problems concerned with the application of this policy which require decision at the forthcoming Conference.

2. The object of Lend-Lease assistance hitherto has been to satisfy our justifiable requirements in excess of those which we can furnish ourselves in conditions of full mobilisation of manpower for war purposes. In other words, Lend-Lease has been treated hitherto as residual. If it is accepted that during Stage II the continuance of Lend-Lease assistance should be compatible with some appropriate degree of war demobilisation in the United Kingdom below the 1944 level, the above criterion of Lend-Lease availability will no longer be applicable. The appropriate criterion henceforward must necessarily be one of what absolute amount of assistance is appropriate to the changed conditions. The President will be asked to recognise this new situation by agreeing to the preparation of a firm agreement specifying the amount and character of the assistance on which we can rely.

3. Until strategical plans are completed, Britain’s requirements for munitions in Stage II cannot be stated with precision. Our production plans are for the moment based on the estimate that the strategy will require the provision for the Forces under British supply responsibilities of something over 60 per cent of the present volume of munitions over the first year, as a whole, falling to something over 50 per cent by the end of the year.

4. The munitions supplies of the British Empire have been drawn during the German war from a number of sources. A little under 60 per cent has come from Britain; about 27 per cent has come from the U.S.A.; about 10 per cent has come from Canada; the remainder has been drawn from other countries in the British Empire. If the total of British munitions requirements had to be provided from British Empire sources, there could be little if any reduction from the present output of munitions in the United Kingdom, even if production could be switched to other types of munitions in time to make them effective.

5. At the end of five years of war, some relaxation in the pressure on British civilian standards of life is necessary. It is necessary also to begin to rebuild the damaged cities, to devote more work to the overdue repairs to industry and public utilities, and to make first steps towards restoring our export trade; without exports Britain can neither meet her immediate obligations nor assure her purchases of necessary imports. These needs cannot be further deferred.

6. In working out the assistance to be afforded, a simple principle, which in practice would probably yield the minimum required—and might at the same time be regarded as rough justice—would be that the proportion of our total munitions supplies furnished on Lend-Lease should be the same in Stage II as it has been in 1944. If, for example, our munition needs from all sources are reduced by, say, one third, the amount of munitions furnished on Lend-Lease should also be reduced in the same proportion of one third.

7. The President will be asked for a firm commitment that we shall be given munitions on Lend-Lease terms on some such scale; this would either fix the total volume of munitions assistance in Stage II or would endorse the principle outlined above. It would then be possible for our respective officers to work out the detailed programme of supply correspondingly.

8. The amount of non-munitions assistance covering food, shipping, oil, raw materials, etc., which we shall continue to require would not depend to any great extent on the degree of our domestic reconversion, since only a small part of such assistance has been concerned with goods which we are in a position to produce. Some reduction is, however, possible in so far as such supplies have been for the purposes, not of civilian consumption, but of armed forces. For this reason the aggregate requirements of the United Kingdom are put at about $3 billions during the first year of Stage II compared with $3.9 billions in the programme for the current year.

9. To sum up, Britain’s needs can only be met by a continuance of Lend-Lease through Stage II. The result of our examination is to show that we shall need:—

(a) Lend-Lease for munitions on a scale to be defined at the Conference.

(b) Lend-Lease for foodstuffs, raw materials, oil, shipping, etc., sufficient to meet the reasonable needs in these respects of the United Kingdom for supplies from U.S. sources.

10. In order to give effect to those decisions it is suggested that the President and the Prime Minister should appoint a Committee with power to appoint technical Sub-Committees which would of course report to the main Committee. One Sub-Committee would, as a matter of urgency, consider the proposals of the British Government’s representatives for the munitions asked for under Lend-Lease, with the aim of reaching agreement as to:—

(a) the amount involved by the application of the principle of proportionate aid (unless this has been determined at the Conference itself).

(b) the most appropriate sub-division of that amount between the various broad classes of equipment for each of the Services.

(c) the arrangement for settling the details of the munitions programme as quickly as possible within that broad pattern.

11. The instructions to the main Committee should, of course, cover the whole ground of Lend-Lease Munitions and Non-Munitions, Re verse Lend-Lease and Export Policies and might be somewhat as follows:—

(a) So far as munitions are concerned, it would be the duty of the Committee to approve a report of the Sub-Committee mentioned above embodying a programme capable of fulfilling the agreed conditions in the manner most convenient and efficient from the point of view of the Government.

(b) So far as non-munitions are concerned, the Committee, through such Sub-Committees as might be found convenient, would examine the British position with a view to determining the appropriate scale of assistance and should in this connection consider the advisability of possible modification in the fields to be covered by Lend-Lease and Reverse Lend-Lease respectively with a view to simplification and concentration.

(c) So far as exports are concerned, it should be an instruction to the Committee to propose the principles which should govern hence forth the relationship between Lend-Lease and Reverse Lend-Lease assistance and the export policies of the two countries, with a view to minimising the measures of restriction and regulation.; and in arranging in detail the character of the aid to be furnished under the above Lend-Lease programme they should bear in mind the object of facilitating and simplifying the application of the principles, which they are proposing, in a manner likely to interfere with the respective export programmes of the two Governments to the least possible extent.

(d) Thus, generally the Committee and its Sub-Committees would be charged with the task of drawing up and agreeing [upon] programmes which would implement the decisions reached by the Conference. It would not be competent for them to reopen these decisions.

12. Since it is unlikely that the Committee could complete its de liberations, except on munitions, before, say, November, it is essential that a Directive should be given meanwhile which would prevent any steps being taken during the intervening weeks likely to be prejudicial to the carrying out, should they be approved, of any proposals which are brought before the Committee.

4th September, 1944.

1. In the Hopkins Papers this memorandum, which bears the typed notation “Note for President of U.S.A.”, is filed with the following typed note dated September 10, 1944: “This was handed to me today by Sir Ronald Campbell and indicates what Churchill is going to say, at Quebec, to the President about Lend Lease. H[arry] L. H[opkins].” Cherwell gave another copy of this memorandum to Morgenthau at Quebec, as indicated by the following memorandum from Morgenthau to Roosevelt dated September 25, 1944: “While at Quebec, Lord Cherwell handed me the enclosed memorandum from the British Treasury. I only noted the other day that it was addressed to you, so I am sending it to you for your records.” (841.24/9–2944)
2. For the text of Roosevelt’s letter of transmittal, dated August 23, 1944, see Department of State Bulletin, vol. xi, August 27, 1944, p. 205.