Roosevelt Papers
Memorandum by the British Paymaster-General (Cherwell)1
Record of Conversation Between the President and Prime Minister at Quebec on September 14, 1944
The Prime Minister said that when Germany was overcome there would be a measure of redistribution of effort in both countries. He [Page 345] hoped that the President would agree that during the war with Japan we should continue to get food, shipping, etc., from the United States to cover our reasonable needs. The President indicated assent.
He hoped also that the President would agree that it would be proper for Lend/Lease munitions to continue on a proportional basis even though this would enable the United Kingdom to set free labour for re-building, exports, etc., e.g., if British munitions production were cut to three-fifths, U.S. assistance should also fall to three-fifths. The President indicated assent. Mr. Morgenthau however suggested that it would be better to have definite figures. He understood that munitions assistance required had been calculated by the British at about 3½ billion dollars in the first year on the basis of the strategy envisaged before the Octagon Conference. The exact needs would have to be recalculated in the light of decisions on military matters reached at the Conference. The non-munitions requirements had been put at 3 billion dollars gross against which a considerable amount would be set off for reverse Lend/Lease. The President agreed that it would be better to work on figures like these than on a proportional basis.
The Prime Minister emphasized that all these supplies should be on Lease/Lend. The President said this would naturally be so.
The Prime Minister pointed out that if the United Kingdom was once more to pay its way it was essential that the export trade, which had shrunk to a very small fraction, should be re-established. Naturally no articles obtained on Lend/Lease or identical thereto would be exported;2 but it was essential that the United States should not [Page 346] attach any conditions to supplies delivered to Britain on Lend/Lease which would jeopardize the recovery of her export trade. The President thought this would be proper.
To implement these decisions the Prime Minister suggested there should be a joint committee.3 It was held that it would be better to appoint an ad hoc committee for this purpose on an informal basis in the first instance which could be formalized in due course. Pending its report the United States departments should be instructed not to take action which would pre-judge the committee’s conclusions, e.g., production should not be closed down without reference to Lend/Lease supplies which it might be held should be supplied to Britain. The President thought that the committee should be set up and suggested that Mr. Morgenthau should head it representing him, and that Mr. Stettinius, who had taken such a large part in Lend/Lease, should also be a member.4
- Morgenthau handed the source text to the President’s Naval Aide (Brown) at Quebec on September 15. Roosevelt telegraphed the text of this memorandum, with the final sentence omitted, to Hull and Stettinius via the White House, which transmitted Roosevelt’s message to Hull on September 16. Morgenthau handed the full text to Hull on the morning of September 20, at which time it became apparent that the text received on September 16 not only omitted the final sentence but also contained an important garble—“32 billion dollars” instead of “3½ billion dollars”—in the second paragraph (740.0011 EW/8–1843).↩
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On the source text the words “or sold for profit” have been inserted between the word “exported” and the semicolon. The words “or sold” are clearly in Roosevelt’s handwriting, and the words “for profit” may be in his handwriting also. (Morgenthau told members of his staff in Washington on September 19 that the “President wrote in his own handwriting that they couldn’t export or sell for profit”. See Morgenthau Diary, vol. 772.) The change is initialed in the left margin by both Roosevelt and Churchill and in the right margin by Churchill only.
It is not entirely clear exactly when the words “or sold for profit” were added to the text. From Morgenthau’s diary entry for September 15 (post, p. 361), it would appear that Roosevelt suggested inserting all four words during his meeting with Churchill which began at noon on September 15. From an explanation which Morgenthau gave to a group of American officials in Washington on September 20, however, it would appear that the words were added in two stages and that Morgenthau “went back” to the President twice regarding them. The verbatim report of this explanation is as follows:
↩“[Morgenthau:] They added ‘or sold’—that was the President. Then I had to go back the second time and say, ‘for profit,’ and that was the President.
“Mr. Currie: He meant that, ‘or commercially.’
“H. M. Jr.: No, we told them they could sell. What they were trying to get—this was the President’s contribution—he didn’t want this stuff—the President said politically it would be unwise. He first said ‘identical thereto would be exported.’ They asked him what he meant. He said ‘exported or sold.’ That wasn’t clear. Then he said, ‘exported or sold for profit.’ That wasn’t clear. They wanted me to [go] back a third time and I refused to. I said we would exchange letters on it. I said we wanted them to continue as they have in the past, but I wouldn’t go back a third time.” (Morgenthau Diary, vol. 773)
For the letter which Cherwell wrote to Morgenthau at Quebec on September 16, 1944, to clarify this matter, see post, p. 395.
- Morgenthau told Hull and Stimson in Washington on September 20, 1944, “that the President was about to approve of the request which the British made for lend-lease aid when he [Morgenthau] interposed and recommended that a committee be appointed to consider the matter. The Secretary [Morgenthau] pointed out that he was successful in getting the matter turned over to a committee though the committee would have to act in accord with the oral conversations between Roosevelt and Churchill on the matter. The Secretary said that if he had not been there that a decision would have been made right there, without being referred to a committee.” (Memorandum by White, printed in Foreign Relations, The Conferences at Malta and Yalta, 1945, p. 137)↩
- When Roosevelt and Churchill reviewed this memorandum during their meeting at noon on September 15, 1944, the following endorsements were added at the end: “OK FDR” in Roosevelt’s handwriting and “WSC 15.9” in Churchill’s handwriting.↩