Office of the Historian

740.00119 (Potsdam)/5–2446

No. 536
Briefing Book Paper
top secret
[Undated.]

A 3 (c) Agreement on Lend-Lease With the United Kingdom

No 3 (c) Agreement1 for post-war deliveries of lend-lease has been made with the British, principally because the British, when approached informally in 1944 indicated that they were unwilling to enter into any commitment to make post-war financial settlement for lend-lease goods. This position was taken because the United Kingdom will emerge from the war in a difficult financial position, and with limited supplies of gold and dollar exchange.

The British should, however, be asked to reconsider their position, particularly in view of the present policy of the United States that lend-lease is not to be used for post-war purposes. Under this policy lend-lease transfers to the British of items in inventory or under contract would be interrupted on, or shortly after, V–J Day, unless some provision were made for financial settlement. Disruption of supply arrangements for such items as petroleum, foodstuffs, and raw materials would be disadvantageous both to the United Kingdom and to the United States. A 3 (c) Agreement, providing an orderly and efficient interim plan of agreed deliveries on known terms of payment of items contracted for by the United States, or in inventory in the United States, offers a better alternative.

Since the British are not now receiving any appreciable quantities of long-life industrial equipment, a 3 (c) Agreement with them would be relatively simple, (covering only such items as petroleum products, foodstuffs, and raw materials), and it would not need to cover transfers beyond a relatively short period—approximately six months. A rough estimate of the transfers for such a period would be approximately $500–700 million. The terms of payment to be offered the [Page 806] British should be approximately the same as those in the French,2 Belgian,3 and Dutch4 3 (c) Agreements.

A draft aide-mémoire proposing such a 3 (c) arrangement has been prepared in the Department of State, and after clearance with FEA, it is intended to present this to the Government of the United Kingdom.

  1. i. e., an agreement under section 3 (c) of the Lend-Lease Act of March 11, 1941 (55 Stat. 31), as amended April 16, 1945 (59 Stat. 52).↩
  2. Executive Agreement Series No. 455; 59 Stat. (2) 1304.↩
  3. Executive Agreement Series No. 481; 59 Stat. (2) 1642.↩
  4. Executive Agreement Series No. 480; 59 Stat. (2) 1627.↩