The British Ambassador (Halifax) to the Secretary of State


His Majesty’s Ambassador presents his compliments to the Secretary of State and has the honour to refer to the Memoranda transmitted by this Embassy to the State Department on June 8th, 194458 and February 12th, 1945, concerning the provision of relief supplies to liberated and conquered territories in Europe. In accordance with [Page 1091] the terms of these Memoranda it was agreed that the United States, the United Kingdom, and Canadian Governments should share in the provision of relief supplies to liberated and conquered areas outside the scope of the United Nations Relief and Rehabilitation Administration to a total value of $1,000,000,000. and that the burden of such amounts as should prove to be irrecoverable out of this total should be borne by the three Governments in certain agreed percentages. It was further agreed that the position should be re-examined when it appeared that the amount which could not be recovered had reached $400,000,000.
In the light of the information presently available, it appears that the limit of $400,000,000. for irrecoverable expenditure referred to above has been reached, taking into account the forward commitments which have been made or which must immediately be made to meet the current requirements of the theatre commanders. His Majesty’s Government in the United Kingdom do not feel able to agree to the extension of the arrangements hitherto in effect in respect of any additional financial loss. They propose, therefore, that in accordance with the agreed procedure the position should now be re-examined, and revised arrangements agreed.
As it is of the greatest importance that nothing should be done which would prejudice the continued flow of essential supplies to liberated areas and the orderly procurement of those supplies it would appear desirable that discussions as to an appropriate basis for the sharing of any additional financial loss above the present limit should be initiated immediately. His Majesty’s Government hope that a speedy conclusion to those negotiations can be reached.