Foreign Relations of the United States: Diplomatic Papers, 1945, General: Political and Economic Matters, Volume II

800.24/8–945: Telegram

The Secretary of State to the Ambassador in the United Kingdom (Winant)

Washington, August 9, 1945.

6739. For Clayton and Collado.⁷⁸ Following is revised text of memo and attached annex on subject of financial arrangements governing provision of relief supplies to Europe outside UNRRA program. This text was handed to British and Canadian Embassy this afternoon.

“Memorandum: Reference is made to the aide-mémoire presented to the Department of State by the British Embassy on May 15, 1945 proposing that negotiations be undertaken immediately by the British, Canadian, and United States Governments with regard to the financial arrangements to be made in connection with the future provision of relief to liberated and conquered areas of Europe on a combined basis in so far as such relief lies outside the scope of the United Nations Relief and Rehabilitation Administration. An aide-mémoire of similar tenor was presented to the Department of State by the Canadian Embassy on May 17, 1945.

During the past several months, representatives of the three governments have discussed in detail the problems involved in the future provision of relief both through combined military channels and through the United Nations Relief and Rehabilitation Administration.

The United States Government now desires to propose the following arrangements with regard to the financing of relief shipments on a combined or other agreed basis to liberated and conquered areas of Europe which fall outside the scope of the United Nations Relief and Rehabilitation Administration:

1. The agreement between the three governments which is contained in the British Embassy’s memoranda of June 8, 1944⁷⁹ and February 8, [12?] 1945, to the State Department, the State Department’s replies of June 8, 1944⁸⁰ and March 3, 1945, the Canadian Embassy’s memorandum of June 2, 1944⁸¹ and letter of June 17, 1944⁸¹ and the State Department’s reply of September 12, 1944,⁸¹ the State Department’s memorandum of March 3, 1945 to the Canadian Embassy⁸² and the Embassy’s reply of April 28, 1945, and in substantially similar communications between the British and Canadian Government, should, subject to certain modifications set forth below, continue to apply to the following:

a) Military relief supplies furnished on a combined basis to France, Belgium (including supplies for Luxembourg), Norway, Denmark, and The Netherlands until the termination of military supply responsibility for these countries, subject to paragraph 2 below.

b) Relief supplies delivered to Italy under a combined or an agreed program, whether or not such supplies are furnished through military channels.

2. The arrangements set forth in the previous paragraph will not apply to the portion attributable to the United States of the following supplies in so far as the United States Government desires to furnish such supplies on a lend-lease basis:

a) Petroleum, oil and lubricants delivered to France, Belgium (including supplies for Luxembourg), or the Netherlands on or after July 1, 1945.

b) Coal delivered to France on or after August 1, 1945.

c) Any other supplies delivered to Belgium (including supplies for Luxembourg) or the Netherlands on or after August 1, 1945.

3. Such amounts as prove to be irrecoverable from recipient governments or authorities in excess of a total sum of $400,000,000 shall be borne by the three supplying governments as follows:

• by the United States—74 percent of such amount
• by the United Kingdom—21 percent of such amount
• by Canada—5 percent of such amount

Receipts collected from the recipient governments or authorities shall be divided as may be necessary in order that the ultimate deficit be shared in the proportions set forth above. The three governments shall proceed jointly in the collection of such receipts in accordance with the understandings set forth in the exchange of letters of April 4 and April 24, 1944 [1945]⁸³ between the State Department and the Canadian Embassy, and related communications with the British Embassy.

4. The foregoing relates solely to the financial arrangements which will govern such relief supplies as are furnished by the three governments and does not affect the scope of the supply programs to be undertaken which will be agreed by the three governments through appropriate channels from time to time.

The United States Government will make proposals separately with regard to the financial arrangements in connection with civilian supplies furnished by the three governments to Germany and Austria. Meanwhile, any such supplies furnished these countries by the three governments in accordance with mutual agreement shall be regarded as falling within the terms of the foregoing arrangements, but this understanding shall in no event extend beyond October 1945 loadings.

For purposes of convenience, there is set forth in the attached annex the substance of the agreement between the three governments as it would be amended by the foregoing proposals.

Annex: The following provisions shall apply to the furnishing of relief supplies by the United States, the United Kingdom and Canada on a combined or other agreed basis to liberated and conquered areas of Europe outside their own territories, in so far as the burden for furnishing such supplies does not fall upon the United Nations Relief and Rehabilitation Administration:

1. The arrangements herein set forth shall apply to supplies furnished as designated below:

(a) Supplies furnished to France, Belgium (including supplies for Luxembourg), The Netherlands, Norway, Denmark, Greece, Albania, and Yugoslavia: Until the termination of combined military supply responsibility, except as provided in paragraph 3.

(b) Supplies delivered to Italy under a combined or an agreed program, whether or not such supplies are furnished through military channels.

2. The initial financing of supplies procured for such relief shall be undertaken as follows:

(a) In the United States, by the United States Government.

(b) In the British Commonwealth except Canada, by the Government of the United Kingdom.

(c) In Canada, by the Canadian Government.

(d) In other areas, 50 percent by the United States Government and 50 percent by the British Government, in the case of supplies which are to be furnished on a combined basis.

3. The provisions of paragraph 1 shall not apply to the portion attributable to the United States of the following supplies in so far as the United States Government desires to furnish such supplies on a lend-lease basis:

(a) Petroleum, oil and lubricants delivered to France, Belgium (including supplies for Luxembourg), or the Netherlands on or after July 1, 1945.

(b) Coal delivered to France on or after August 1, 1945.

(c) Any other supplies delivered to Belgium (including supplies for Luxembourg) or the Netherlands on or after August 1, 1945.

4. Unless other arrangements are mutually agreed upon, payment in full shall be requested of all governments or authorities of liberated or conquered areas to which such supplies are furnished.

5. Such amounts as prove to be irrecoverable from such governments or authorities shall be borne by the supplying governments in the following proportions:

(a) Up to a total of $400,000,000:

• by the United States—67percent
• by the United Kingdom—25 percent
• by Canada—8 percent

(b) In excess of $400,000,000:

• by the United States—74 percent
• by the United Kingdom—21 percent
• by Canada—5 percent

6. Receipts collected from the recipient governments or authorities shall be paid to the three governments jointly under arrangements to be agreed upon from time to time. Such receipts shall be divided as may be necessary in order that the ultimate deficit be shared in the proportions set forth in the previous paragraph.

7. The three governments shall consult together from time to time in order to decide whether a claim shall be maintained against any government or authority which at any time indicates its inability to meet any request for payment.

8. The arrangements set forth above shall also apply to supplies furnished by the three governments to Germany and Austria in accordance with mutual agreement, but shall in no event apply beyond October 1945 loadings.

9. The foregoing provisions shall apply only to supplies furnished through military channels, except that in the case of Italy they shall apply to all supplies which are furnished by the three governments on a combined or agreed basis.”

Please furnish copies of the foregoing urgently to Pearson at Canada House and Hasler at Foreign Office. British and Canadians are not telegraphing text.

Byrnes

78. Emilio G. Collado, Director of the Office of Financial and Development Policy, was in London as adviser to the United States delegation, at the Third Session of the Council, United Nations Relief and Rehabilitation Administration.
79. Foreign Relations, 1944, vol. ii, p. 312.
80. Ibid., p. 313.
81. Not printed.
81. Not printed.
81. Not printed.
82. See footnote 29,p. 1073.
83. Not printed.