The Foreign Economic Administrator ( Crowley ) to the Under Secretary of State ( Stettinius )

Dear Mr. Stettinius: It is my information that the British Government has, during the course of the war, invested substantial sums in the construction of war plants and other capital facilities within the United States. It is also my information that the British Government has already disposed of the bulk of these plants and facilities by selling them or leasing them to the United States Government.

The original decision of the United States Government to purchase and lease these plants and facilities from the British Government was made at a time when the British acutely needed additional dollar exchange for the effective prosecution of the war. The purchase of these plants and facilities was at that time an excellent means of supplying the British Treasury with the necessary dollar exchange and aiding in the prosecution of the war. Since that time, however, the British dollar position has steadily improved and the British Treasury is no longer in urgent need of dollar relief. Accordingly, the emergency situation which justified the United States’ purchase of these British war plants, in my opinion, no longer exists.

In view of the foregoing, I feel it would be wise to reconsider whether it would not be more in keeping with the principle of a maximum pooling of resources—which principle, in the last analysis, must be the guide in the lend-lease relations between Great Britain and the United States—to place the transfer of the British war plants in this country on a reverse Lend-Lease basis. As you know, the White House recently approved a proposal that the War Department should negotiate with the British to get the remainder of the war [Page 32] plants in this country on a reverse-lend-lease basis.62 It seems to me that the facilities which have already been paid for or listed should be brought within the scope of such arrangements.

The United States Government has furnished to the United Kingdom as Lend-Lease aid numerous capital facilities constructed in the United Kingdom with Lend-Lease funds, such as yards, docks and other permanent installations. A mutual pooling of resources would, therefore, seem to call for a reverse lend-leasing of comparable capital facilities in this country whenever such facilities are turned over to us by the United Kingdom.

I would appreciate your views on this matter.

If you wish to discuss with me more fully both the facts and the policy considerations involved, I should be very happy to do so at your earliest convenience.

Sincerely yours,

Leo T. Crowley
  1. This subject had been brought to the attention of President Roosevelt in a memorandum from Under Secretary of War Robert P. Patterson on November 6, 1943. The President referred it to Mr. James F. Byrnes, Director of the Office of War Mobilization, who authorized Mr. Patterson on November 18, 1943, to proceed with negotiations to secure the munitions facilities as reciprocal aid. Mr. Patterson was to consult and inform the Foreign Economic Administration and the Department of State. (841.24/2182)