Office of the Historian

841.24/11–2544

Memorandum to President Roosevelt55

[Washington,] November 25, 1944.

In accordance with your instructions following your conversations in Quebec with Mr. Churchill last September, Mr. Crowley, Mr. Stettinius and I, together with the appropriate officials of Army, Navy, FEA, State, Treasury and other agencies, have been meeting with the British representatives to examine their requests for lend-lease assistance for the first year following the defeat of Germany (and prior to the defeat of Japan).

1.
The lend-lease requirements presented by the British for the U.K. and the Empire consisted of approximately $3.2 billion for munitions, $3 billion for non-munitions and some $800 million of special military and non-military items or an aggregate of $7 billion. After screening these requests on the basis of anticipated war strategy, availability of supplies and other needs the agencies concluded that they could recommend to you as part of the program for budgetary and production planning the following: Approximately $2.7 billion for munitions; $2.8 billion for non-munitions or a total of $5½ billion. This represents roughly a 50 percent cut from the 1944 level of lend-lease aid to the British Empire.
This program which we recommend for your consideration would not constitute any commitment. All schedules, both munitions and non-munitions, are subject to the changing demands of strategy as well as to supply considerations and the usual considerations of procurement and allocation.
2.
This lend-lease program consists of articles and services which either cannot be produced at all in the United Kingdom in time for war needs or which, as a result of past decisions about specialization, [Page 78] can be more effectively produced in the United States. However, this program, coupled with decreased munitions and manpower requirements in Stage II, will make it possible for Britain and the United States, to release some manpower and resources for reconversion, easement of living standards and a partial revival of exports.
3.
We have considered the British proposal to modify their export policy, and we are prepared to recommend that:
a.
No change in the present export policy be made until V–E Day, and thereafter:
1.
The Eden White Paper of 1941 continue to prohibit the re-export of goods delivered under Lend-Lease;
2.
The British be allowed to re-export goods purchased for cash in the United States, and manufactures of them;
3.
The British reserve exclusively for war purposes any stocks built up by Lend-Lease shipments.
b.
Mr. Crowley should advise the appropriate Committee of Congress about the foregoing principles which will apply after V–E Day.
Mr. Crowley has stated that he will go as far as practicably possible to make such administrative arrangements, under the terms of the White Paper, as will not hinder unduly certain minor British exports prior to V–E Day.
The British also wished to be able after V–E Day to sell munitions of British manufacture for cash to the Allies. The American group could not see its way clear to recommending such action to you and the matter has been dropped for the time being.
4.
Assurances have been received from the British and the Dominions that the flow of supplies and services to the United States and its military forces as mutual aid will be continued as in the past Detailed arrangements are still under consideration.
5.
Though discussions are still going forward with the British at the operating level which may slightly modify the estimates given in 1 above, the American members of this committee consider that the task assigned to it at Quebec is completed with the presentation to you of this memorandum of recommendations. Unless we hear from you to the contrary we will consider the committee dissolved.
Henry Morgenthau
E. R. Stettinius, Jr.
Leo T. Crowley
  1. Prepared by the Secretary of the Treasury, the Acting Secretary of State, and the Foreign Economic Administrator.↩