Treasury Files

Memorandum by the Secretary of the Treasury’s Assistant (White)

Memorandum for the Secretary’s Files

This was the meeting which the President had suggested the Secretary have with Lord Cherwell.2 Lord Cherwell had asked to bring along Mr. MacDougall.

The Secretary asked Cherwell which of the two subjects before them for discussion would he like to take up first. Cherwell replied that he would like to take up the lend-lease program first since he thought that would be simpler to dispose of than the question of policy toward Germany. Cherwell went into some detail on the need for getting to work quickly on a lend-lease program for England during the period after the defeat of Germany and before the defeat of Japan. He outlined British views of what would be appropriate for England to receive in the way of lend-lease aid. He described England’s need for increasing her exports and relaxing on the home working front. He expressed the view that a cut of 27 percent in our lend-lease to the British Empire would appear reasonable to the British.3 In general, he repeated the gist of what was in the memorandum of the State Department to the President.4

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When he got through, the Secretary said that he had heard all that before from the Exchequer and others when he was in England. He then told Cherwell about his conversation with the Exchequer and with the President5 and said that it was now up to Churchill. If Churchill thought that the idea of forming a committee to handle the whole problem was a good one, it was up to Churchill to suggest it to the President.

The Secretary also said that he didn’t like the approach of determining the amount of lend-lease aid that Britain was to get that Cherwell presented. In his (the Secretary’s) opinion, the question should be approached from the point of view of just how much munitions the British need in the role that they are to play in the Pacific. The Secretary thought that food shipments could be handled all right but he felt that commercial goods could not appropriately go into exports.

In any case, the Secretary stressed the need for its being handled by a joint committee of British and Americans. Cherwell liked the idea of the committee and asked whether the Secretary would head it up. The Secretary replied that he didn’t know; that that was up to the President. The Secretary told Cherwell that the President had given him (Morgenthau) for his comment a memorandum prepared by the State Department6 and that the President might want somebody from State Department or possibly the Treasury to head up the committee. Cherwell suggested that White and MacDougall attempt to draft a directive setting up such a committee so that if the Prime Minister and the President did agree on the idea they might get it out then and there. The Secretary agreed.

The Secretary then took up the question of Germany. He handed Cherwell the book on Germany7 to read and explained that it was compiled on a day’s notice. Cherwell read hurriedly through the first part and expressed skepticism as to whether Organized Labor in the United States would approve a program so drastic in character. Secretary Morgenthau thought that it would. Cherwell commented that he didn’t understand why Churchill had taken so contrary a position on the program the evening before. He (Cherwell) was surprised at Churchill’s attitude and thought possibly that it was due to the fact that Churchill did not wholly understand what the Secretary was driving at.

The Secretary told Cherwell that Secretary Hull was in general agreement with the views expressed by the Treasury8 and that he [Page 330] was of the opinion that Eden would be likewise. He said that the question came down to a choice of: “Do you want a strong Germany and a weak England or a weak Germany and a strong England?” The Secretary said that he preferred to rely on a strong England and a weak Germany.

Cherwell thought that the proposal could be dressed up in a way to be more attractive to the Prime Minister and the Secretary said that he would be very glad to have Cherwell try it.

After the Secretary and Cherwell left to see the President and Churchill to report on the morning’s conversation, I talked at length with MacDougall on the merits of the Treasury’s proposed program and MacDougall appeared to be in agreement. Later MacDougall, a Mr. Weeks of the British Government, and I met to draft the directive suggested by Cherwell.9

When the Secretary returned with Cherwell from the President and the Prime Minister, he reported that both Churchill and the President had liked the idea of creating a committee. They wanted to set up one on an informal and ad hoc basis, to formalize it after the election.

The Secretary told me after the others had gone that when it came to the question of who should be the chairman of the joint committee that Churchill had said, “Plow about Harry Hopkins?” But the President had replied, “No, I want Morgenthau to be chairman.”

H. D. White
  1. The date “9/25/44”, which appears at the end of the memorandum, is presumably the date of typing.
  2. See ante, pp. 323, 325.
  3. It was probably at this meeting that Cherwell gave Morgenthau a copy of the British Treasury memorandum of September 4, 1944, ante, p. 169.
  4. See ante, p. 177.
  5. See Blum, pp. 307–309.
  6. The reference is presumably to Hull’s memorandum to Roosevelt of September 8, 1944, ante, p. 177.
  7. Ante, p. 128.
  8. For Hull’s own account of his attitude toward the views of the Treasury Department, see Hull, pp. 1602–1611.
  9. For the paper referred to, see post, p. 468.