Foreign Relations of the United States: Diplomatic Papers, The Conference of Berlin (The Potsdam Conference), 1945, Volume II

800.24/8–745

No. 1182
Prime Minister Churchill to President Truman ¹

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[ Babelsberg ,] 24th July, 1945.

My Dear Mr. President, I thank you for your memorandum of 17th July.² I am pleased that you say the Agreement made in Washington last autumn stands. We have never, of course, regarded the munitions schedules as absolutely rigid. Indeed I am told that our munitions requirements have already been scaled down from the 2.8 billion dollars agreed last autumn for the first year of Stage II to 1.8 billion, and that all these items are within the terms then arranged. Unfortunately the Departments in Washington have recently been insisting that nothing can be delivered save what is needed for direct use against Japan, and interpreting this in the narrowest possible sense; this has reduced munitions supplies almost to [the] vanishing point, and has put us in a very difficult position.

Much as I dislike troubling you with technical questions of this kind at the present time, it is urgently necessary for us to find a solution. I attach a note on the position by the Chiefs of Staff, and very much hope that you will find it possible to let me know whether their reading of your intentions, as expressed in paragraph 1 of the note, is correct. If so, I earnestly hope you will be able to see your way to issue the necessary directive to your agencies.

The important financial questions mentioned in your last paragraph are, of course, of a somewhat technical character, and I should hesitate to enter into them deeply at this stage. But I am told that our present gold and dollar balances (1.8 billion dollars) do not exceed what was agreed as reasonable last autumn in Washington by the United States Administration; on the other hand our external liabilities, owing to the prolongation of the war, have increased to 13 billion dollars.

The Chancellor [of the Exchequer]³ asks me to add that, both in the matter of sales of surplus in the Middle East and elsewhere and in the matter of relief to Europe, he has, in an earnest endeavor to meet your wishes, already authorised proposals to the State Department which go a long way beyond what he could have justified on any other ground. In particular we have told the State Department that we are willing to continue relief during the military period in Italy until UNRRA takes over relief there in the early autumn, and to make a further contribution to the general work of UNRRA for the next year. Both of these proposals are at present under discussion with the State Department, though the Chancellor has not yet any Parliamentary authority for this further relief expenditure.

All these questions, of course, are linked up closely with the general post-war economic arrangements which will have to be worked out before the War ends. For this purpose, I should be very glad if you would agree to our sending a special delegation to Washington as soon as convenient—say in September. It will, I am sure, be in our common interest to achieve as soon as possible agreement on these vital post-war issues, so that we can view the economic picture as a whole.

Yours very sincerely,

Winston S. Churchill

[Attachment]

The British Chiefs of Staff to Prime Minister Churchill

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Lend-Lease

Memorandum to the Prime Minister by British Chiefs of Staff

1. The Chiefs of Staff have seen President Truman’s minute of 17th July about Lend-Lease. We note that the President intends to furnish us with Lend-Lease for the prosecution of the war against Japan. We earnestly hope that it is also his intention:

(a) That troops of occupation and other British forces carrying out essential tasks, who now hold American equipment, will continue to receive such equipment and maintenance as they require:[.]

(b) That American components needed for equipment manufactured in the U. K. and Canada will continue to be made available.

(c) That these U. S. items on which, under the agreement reached at Quebec last autumn,⁴ we are counting to supplement our own manufacturing programme of the same articles, will be supplied to us.

2. For (a) above our case is as follows:

By agreement between the two Governments, British forces throughout the world are equipped with certain items of American equipment for which there is no British counterpart, and no possibility of maintenance from British sources. Consequently in the absence of American spares and replacements, such equipment is a wasting asset with the resultant loss of efficiency. Take for example the Jeep. There is no British counterpart, and therefore we maintain our Jeeps in Europe and the Middle East, but also to recondition those which are required to be sent from Europe to South-East Asia Command to take part in the war against Japan [sic]. At present, numbers of these are held up here because spare parts to refit them cannot be shipped from America owing to the freezing of Lend-Lease equipment. As regards the Royal Air Force, the Dakota is a good example. We ourselves do not produce any transport aircraft comparable to this machine; and therefore 15 squadrons, in Europe and the Mediterranean, which are, or are planned to be, equipped with this type of aircraft would be grad-dually demobilized or, alternatively, forced to use obsolescent Halifaxes. It is only by the use of transport aircraft that we can to some extent make good the acute shortage of our manpower in relation to our world-wide military commitments. After the war with Japan, we will be perfectly prepared to return to the Americans any U. S. type transport aircraft which it could be established by agreement were surplus to our military needs as one of the Occupying Powers. The Navy are not greatly affected since so much of the Fleet is, or will be, operating against Japan. But here again, the lack of maintenance stores for ships and equipment of U. S. type, which are now being used for minesweeping and other duties around Europe, would hit us hard.

3. The case for (b) is perhaps best illustrated by the Royal Air Force. For example the Sunderland IV is equipped with American turrets. The necessity for the continuance of the supply of these and similar components require no emphasis.

4. We now turn to (c). In accordance with the agreement reached at Quebec last Autumn, our plans have been based on the assumption that we could count on the supply from America of certain articles of equipment, such as clothing, telephone cables, etc., etc. to supplement the flow of similar articles manufactured by ourselves. Unless the Quebec Agreement, as we read it, is implemented in this respect, we are informed that all the above plans will have to be entirely recast.

5. We beg of you to take up these matters with the President as a matter of urgency. The mere fact that some American equipment has been or is being issued to us, should not limit our ordinary freedom in regard to the use and disposal of British equipment in order to give us more latitude in the disposal of British equipment.

• A.F. Brooke
• C. Portal
• Andrew Cunningham

1. Printed from a copy typed subsequently in the Department of State.
2. Document No. 1181.
3. Sir John Anderson.
4. The records of the Second Quebec Conference are scheduled for subsequent publication in a volume in this series. See H. Duncan Hall, North American Supply (London, 1955), p. 443.