The Department of State to the British Embassy 94


Reference is made to the memorandum from the British Embassy dated September 14, 1945, to the letters from Mr. R. W. Jackling of the British Embassy to Mr. George F. Luthringer of the Department of State dated October 9, 1945, and October 25, 1945,95 and to the memoranda from the Canadian Embassy dated September 11 and September 17, 1945,96 all on the subject of financial arrangements to govern the provision of civilian supplies on a combined or other agreed program to the liberated and conquered areas of Europe outside the scope of the United Nations Relief and Rehabilitation Administration.

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The United States Government takes note of the statement in the British Embassy’s memorandum respecting the distribution of responsibility for losses under the program in the light of the present financial position of the United Kingdom Government. This Government also takes note of the statements in the Canadian Embassy’s memorandum of September 11, 1945 respecting the inability of the Canadian Government to continue sharing in the loss responsibility for Italy in view of the termination of combined military supply responsibility for the liberated areas or loss responsibility for Germany and Austria after the completion of August, 1945 loadings. In view of the accounting and other difficulties involved, the United States Government suggests that the precise date and manner of the Canadian Government’s withdrawal from the loss sharing arrangements and the precise arrangements applicable to Germany and Austria during the period between the Canadian Government’s withdrawal and the termination of combined military supply responsibility as fixed by the Combined Chiefs of Staff in CCS 933, be made subject to future determination. Subject to these qualifications and those outlined below, the United States Government is prepared to accept the modifications proposed by the United Kingdom and Canadian Governments to the arrangements set forth in the memorandum of August 9, 1945 from this Government.97

With respect to the Italian program, this Government understands the reservation made by the United Kingdom Government to be that subsequent to August loadings, the United Kingdom Government will bear loss responsibility equivalent to 21 percent of the amount of the supplies furnished for which payment is not received from the Italian Government, provided that the amount of such supplies for which payment is not received does not exceed the agreed Italian program for September and October 1945. In view of the decision of the Canadian Government to withdraw from the Italian program after August loadings, the Government of the United States will regard its own portion of the agreed program for September and October as 79 percent.

The United States Government’s memorandum of August 9, 1945 contains a provision exempting from the arrangements set forth therein such supplies delivered to France, Belgium, and The Netherlands on or after August 1, 1945 as this Government desires to furnish on a lend-lease basis. At the time this provision was drafted and the date of August 1, 1945 was selected, it was intended by this Government to leave open the possibility of furnishing to the Governments in question on a lend-lease basis the equivalent of several months supplies forwarded through combined channels from United States [Page 1116] sources. Representatives of this Government endeavored to make this intention clear to the appropriate representatives of the United Kingdom and Canadian Governments in previous conversations on this subject. The rapid conclusion of the war in the Pacific and the consequent termination of lend-lease made it necessary to shift the date in question from August 1, 1945 to July 1, 1945 if the original intention of this Government was to be realized. This Government is, therefore, reserving the right to make available to the Governments of France, Belgium, and The Netherlands on a lend-lease basis all or part of the contribution of the United States after July 1, 1945 to the civilian supplies furnished them by the combined military authorities of the United States, the United Kingdom, and Canada. The United States Government will not, however, transfer such supplies on lend-lease terms to the French, Belgian, and Netherlands Governments to an amount in excess of $75 million in the aggregate without further consultation with the United Kingdom and Canadian Governments. The United States Government wishes at this time to amend in this sense paragraphs 2(b) and (c) of its memorandum of August 9, 1945 and paragraphs 3(b) and (c) of the annex appended thereto.

The Combined Chiefs of Staff paper mentioned above (CCS 933) provides that financial settlement for stocks on hand or in the process of shipment to any zone in Germany or Austria upon the termination of combined military supply responsibility will be the subject of intergovernmental negotiation. This Government is prepared to discuss the financial settlement alluded to therein at any mutually agreeable time.

  1. An identical memorandum was addressed to the Canadian Embassy on the same day.
  2. Neither printed.
  3. Memorandum of September 17, not printed, but see footnote 86, p. 1108.
  4. For text, see telegram 6739, August 9 to London, p. 1103.