Foreign Relations of the United States: Diplomatic Papers, 1944, The British Commonwealth and Europe, Volume III

841.24/3–2244

The Secretary of War (Stimson) and the Secretary of the Navy (Knox) to the Secretary of State

[Washington,] March 22, 1944.

Dear Mr. Secretary: As you know, the agencies of the War and Navy Departments dealing with lend-lease matters have recently reached an understanding with the representatives of the United Kingdom regarding the supply of certain rifles to Saudi Arabia.⁶⁹

During the course of discussions on this matter, the United Kingdom representatives took the position, in meetings of the Munitions Assignments Board⁷⁰ and in conferences with the State Department, that their Government was free, without obtaining the concurrence of the United States, to dispose of any weapons having a United Kingdom origin, even though the availability of such weapons for disposition resulted directly from the transfer on lend-lease of substantial amounts of identical, or similar, articles. This view—which makes the sole criterion the country of origin of the particular article in question—was emphatically rejected by the War and Navy Departments. It was, and is, the considered view of both Departments that the United Kingdom’s obligation to obtain United States concurrence to transfers of military and naval items, as provided in MBW⁷¹ 67/8, should be applied equally to articles of United States origin and articles similar thereto, up to the amounts transferred on lend-lease.

Such a position is regarded by the War Department and the Navy Department as the only one consistent with the underlying principles of the Lend-Lease Act,⁷² the Master Lend-Lease Agreement⁷³ and the White Paper published by the British Government on 10 September 1941.⁷⁴

There is enclosed herewith a memorandum which states briefly the premises upon which this conclusion is grounded.

It seems of some importance, to us, moreover, to suggest that this would also be the Congressional and the public view in this country. We fear that both Congress and the public would react most adversely to the suggestion that the United Kingdom is free to retransfer without obtaining the concurrence of the United States, any weapons or other items which have become available for such disposition as a direct result of similar lend-lease shipments from the United States. We cannot believe that the determining factor should be the question of whether the particular items were actually of United States origin.

It is, therefore, the earnest desire of the War Department and the Navy Department that the State Department adopt the position expressed herein as the declared policy of the United States Government and that appropriate notice thereof be given to the Government of the United Kingdom.

Sincerely yours,

Henry L. Stimson
Frank Knox

[Enclosure]

Application of Retransfer Principle of MBW 67/8 to Military and Naval Items Similar to Those Supplied on Lend-Lease

The Munitions Assignments Board in MBW 67/8, after recommending that the President be requested to delegate appropriate authority to the Secretary of War and the Secretary of the Navy, clearly announced it to be:

“… a matter of fundamental policy that no lend-lease government shall be permitted to retransfer military or naval lend-lease items without the consent of the Secretary of War or the Secretary of the Navy.”

This policy rests upon the firm foundation of Section 4 of the Lend-Lease Act which provides that:

“All contracts or agreements made for the disposition of any defense article … shall contain a clause by which the foreign government undertakes that it will not, without the consent of the President, transfer title to or possession of such defense article … by gift, sale or otherwise …”.

In the Master Lend-Lease Agreements, the several lend-lease nations have agreed in specific terms, in accordance with Section 4, that they will not retransfer defense articles without the consent of the President. This is the substance of Article III of the Master Agreement between the U.S. and the U.K. dated 23 February 1942.

It is therefore clear beyond any question that military or naval equipment of any kind which originated in the U.S. and was thereafter assigned to the U.K. cannot be retransferred except with the express consent of the U.S.

In the British White Paper of 10 September 1941, the principle is announced that the obligations which the U.K. may have with respect to the use and export of material of U.S. origin applies equally to “materials similar to those supplied under lend-lease”.

The White Paper was adopted by the U.K. in order to forestall certain criticisms and to allay certain fears which had arisen in the U.S. as a result of the increasing amounts of lend-lease goods being sent to England. Hence, it must have seemed clear to the British that, as a matter of fair dealing and equity, “materials similar to those being transferred under lend-lease” and “materials of a type the use of which is being restricted within the U.S. on the grounds of short supply, and of which we (the U.K.) obtain supplies from the U.S.” should be governed by the same restrictions as materials of U.S. origin.

The principle of the paper is simply that whether particular materials were actually of U.S. origin should not, and could not equitably, be the determining factor as to whether the U.K. would be free to dispose of such materials without the concurrence of the U.S. The only fair criterion is whether the materials have become available for distribution as a result of lend-lease transfers. No distinction in this respect ought to be made between military or naval equipment and materials of other types.

It is submitted that the two principles outlined above—the retransfer principle and the “similar materials” principle announced in the White Paper—lead inevitably to the conclusion that military or naval equipment of a type (and within the quantities) which has been transferred to the U.K. under lend-lease, should not be transferred by the British to other governments except with the consent of the U.S.

69. For correspondence relating to aid extended to Saudi Arabia, see vol. v, pp. 670 ff.
70. Established in January 1942 as a result of the First Washington Conference, December 22, 1941–January 14, 1942. Correspondence on this Conference is scheduled for publication in a subsequent volume of Foreign Relations.
71. Munitions Assignments Board (Washington).
72. Approved March 11, 1941; 55 Stat. 31.
73. Preliminary Agreement between the United States and the United Kingdom signed at Washington, February 23, 1942; for text, see Department of State Executive Agreement Series No. 241, or 56 Stat. (pt. 2) 1433. For correspondence on negotiation of the Agreement, see Foreign Relations, 1942, vol. i, pp. 525 ff.
74. British Cmd. 6311, United States No. 2 (1941): Correspondence respecting the Policy of His Majesty’s Government in the United Kingdom in Connexion With the Use of Materials Received Under the Lend-Lease Act.