No. 1181
President Truman to Prime Minister Churchill

Memorandum for the Prime Minister

I have gone into the question that you raise in your telegram of May 281 in regard to Lend-Lease during the Japanese War. We intend to furnish Lend-Lease to the British Commonwealth for the prosecution of the war against Japan generally in accord with the schedules of requirements for the first year following the defeat of Germany and other terms worked out between British and American supply representatives in October and November 1944.

You, of course, realize that the policy I have indicated does not necessarily mean that either the munitions or the non-munitions program for the present year will be equal in total or individual items to the Lend-Lease requirements as estimated in the meetings of last fall. Those estimates were subject to changing strategic demands as well as to supply, procurement, and allocation considerations, and to the provision of the necessary funds by the Congress. Individual requisitions are of course handled by the usual administrative and allocation channels, with full discussion between our supply representatives.

In connection with the foregoing, it has come to my attention that the British gold and foreign exchange holdings are now considerably higher than was anticipated at the time of the Phase II discussions. I do not wish to propose reopening the Phase II discussions on this account. However, I would like to request that your Government relax its position with respect to permitting dollar payments on certain items, particularly those where the unwillingness of your Government to make payments leads to political criticism in the United States. For example, it would be of considerable assistance if your Government relaxed its restrictions on dollar payments for the proceeds of property sales in the Middle East and elsewhere; if the United Kingdom continued [Page 1180] to take its share of the burden of the military relief and UNRRA programs in Europe; and if dollar payments were allowed on other items which arise from time to time in our relationships. I urge that you provide this flexibility in the long-term interests of both your country and mine.

[Harry S. Truman]