Roosevelt Papers: Telegram

The Acting Secretary of the Treasury ( Bell ) to the Secretary of the Treasury ( Morgenthau )1

Status of French lend lease negotiations on September 14.

1.
The French have been told that the basic question of the scope and time limit of the Lend Lease Agreement has been placed before the President for decision.
2.
The State Department and FEA have agreed on a draft (6th draft, dated September 11)2 of a lend lease agreement which permits
(a)
Long life industrial reconstruction goods to go to the French under long term credits (Section 3c of the Lend Lease Act). This provision permits requisitions to be accepted by FEA until at least the end of the war with Japan and provides that the requisitions once accepted would be filled regardless of the end of the war with Japan. This would obviously enable a large scale program of reconstruction for France. (Monnet has a program ready of $2 billion for which he proposes to have requisitions placed immediately.)
(b)
The agreement permits giving the French on a straight Lend Lease basis, short-lived industrial goods and materials purportedly for French war production until at least the end of the war with Japan.
3.
Secretary Hull has sent a memorandum to the President3 through Harry Hopkins pointing out
(a)
This draft lend lease agreement goes beyond the July 15 memorandum which the President approved.4
(b)
This memorandum proposes that the possibility of excessive leniency in the administration be controlled by requiring FEA to submit to someone in the White House all programs and proposals for lend lease assistance before requisitions are accepted by FEA.
This memorandum to the President is now before the President at Quebec for his approval. State Department has not given us a copy of this memorandum although the State Department promised to clear this memorandum with us before it went to the President.
4.
As you know the original memorandum which went to the President during the French negotiations on July 15 was designed to limit lend lease to France to the end of hostilities in Europe. Mr. McCloy and General Hilldring of the War Department have definitely stated that French industrial production will be of no help in fighting the war in Europe and that the help which a reconstructed French industry will give to us in fighting the war with Japan can be “put in your right eye”.
The importance of the phrase which will limit the scope of the program to the end of the war is that the immediate set of requisitions for aid will be much greater in volume under the prospect of a long war against Japan than it would be under the certainty of a short war in Europe.
5.
The argument used to justify broadening the scope of the Lend Lease Agreement is that we should give the fullest discretion possible [Page 422] to the President. This argument has no basis in fact. The President already has all the discretion he needs under the Lend Lease Act. If after the war in Europe comes to an end, the President feels that France is making a contribution to the war in the Pacific or should for other reasons be entitled to reconstruction under Lend Lease, he can enter into a new agreement at that time. The only additional “discretion” gained by signing the agreement, as recommended by State and FEA, and immediately making large supply commitments thereunder, is to present Congress and the public with a fait accompli when the war in Europe is over. If the Congress should cut off Lend Lease following the end of hostilities in Europe, any attempt to rely on large requisitions placed under a previously existing agreement with the French (having no relation to the war in Europe) as permitting the reconstruction of France would be politically impossible and highly undesirable.
6.
As we see it, the broadened scope of the memorandum will have the following effects:
(a)
Since the French have already been presented with a memorandum limiting the scope of lend lease to hostilities in Europe, the change to permit lend lease at least until the end of the war with Japan will obviously lead the French to believe that the President has agreed to a reconstruction program for France. This is particularly true in the light of informal commitments which have been made to the French by various people in FEA and State to this effect. It follows that this will be construed by the French as being a major political victory arising from their strategy of playing one department of the United States Government against another on financial questions.
(b)
Although the program being presented to the President provides for approval by the White House of the implementation of this agreement, it is obvious that the White House is not and should not be placed in a position to police detailed supply programs. The door will be wide open for reconstructing France under the Lend Lease Act without understandings as to the role of France in the future of Europe and of the world, and particularly of French participation in the war against Japan.
7.
In conclusion, quite contrary to the avowed purpose of the proposal to give discretion to the President, its practical effect will be to tie his hands with respect to our dealings with the French at the termination of the war in Europe much more than would otherwise be the case.
Dan Bell
  1. Sent to the White House Map Room, which transmitted it to Morgenthau at Quebec as telegram No. MR-out -404. Morgenthau had telephoned Bell from Quebec to ask for a report on this subject. See Foreign Relations, The Conferences at Malta and Yalta, 1945, p. 139.
  2. Not printed.
  3. Ante, p. 419.
  4. See ante, p. 419, fn. 3.