Lend-Lease

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Lend-Lease

This article is about the World War II programme.
For the Australia corporation, see Lend Lease Corporation.

President Franklin D. Roosevelt signs H.R. 1776, the lend-lease bill to give aid to Britain and China.

Lend-Lease was the major United States program 1941-1945 which enabled the United States of America to supply Britain, the Soviet Union, China and other Allied nations with vast amounts of war material (matériel). The supplies were given away with no repayment, so the U.S. would avoid the mistake it made after World War I of demanding later repayment. It began in March 1941, nine months before Pearl Harbor. It ended soon after V-J Day, on 2 September 1945.

[edit] Finances

A total of $50.1 billion worth of supplies were shipped: $31.4 billion to Britain, $11.3 billion to the Soviet Union, $3.2 billion to France (that is, Free France) and $1.6 billion to China. Reverse Lend Lease comprised services (like rent on air bases) that went to the U.S. It totalled $7.8 billion, of which $6.8 billion came from the Britain and the Commonwealth. Apart from that, there were no repayments of supplies that arrived before the termination date. (Supplies after that date were sold to Britain at a 75% discount, or $650 million, using long-term loans from the U.S.) No lend lease money went to Canada, which operated a similar program that sent $4.7 billion in supplies to Britain and Soviet Union. ^[1]

This program was a decisive step away from American isolationism and towards international involvement since the end of World War I. In sharp contrast to the American loans to the Allies in World War I, there were no provisions for postwar repayments.

[edit] Political Background

Lend-Lease came into existence with the passage of the Lend-Lease Act of 11 March 1941, which permitted the President of the United States to "sell, transfer title to, exchange, lease, lend, or otherwise dispose of, to any such government [whose defense the President deems vital to the defense of the United States] any defense article". Roosevelt approved US $1 billion in Lend-Lease aid to Britain on 30 October 1941. Britain did not need to pay any money (it did pay for supplies in the pipeline when Lend-Lease was terminated in 1945).

Earlier, there was an entirely separate program in 1940, the Destroyers for Bases Agreement whereby 50 USN destroyers were transferred to the Royal Navy and the Royal Canadian Navy in exchange for base rights in the Caribbean and Newfoundland.

[edit] Administration

Roosevelt set up the Office of Lend-Lease Administration in 1941, appointing steel executive Edward R. Stettinius as head. In September 1943 he was promoted to Undersecretary of State, and banker Leo T. Crowley became head of Lend Lease which now became part of Crowley's Foreign Economic Administration.

Lend Lease aid to Russia was nominally managed by Stettinius; in fact, it was handled by Roosevelt's Soviet Protocol Committee, dominated by Harry Hopkins and General John York, who were totally sympathetic to the provision of "unconditional aid." Until 1943, few Americans objected to Russian aid, at least not publicly.^[2]

[edit] Significance

This chart shows the relationship in Gross domestic product between the Allied and the Axis during 1938-1945. For more information, see Military production during World War II.

Lend-Lease was a critical factor in the eventual success of the Allies in World War II, particularly in the early years when the United States was not directly involved and the entire burden of the fighting fell on other nations, notably those of the Commonwealth, and after June 1941 the Soviet Union. Although Pearl Harbor and the Axis Declarations of War brought the US into the war in December 1941, the task of recruiting, training, and equipping US forces, and then transporting them to the war zones could not be completed immediately. Through 1942, and to a lesser extent 1943, the other Allies continued to be responsible for most of the fighting, and the supply of military equipment under Lend-Lease was a significant part of their success. In 1943-44, about a fourth of all British munitions came through Lend-Lease. Aircraft comprised about one fourth of the shipments to Britain, followed by food, land vehicles, and ships.

Even after the United States forces in Europe and the Pacific began to reach full-strength in 1943–1944, Lend-Lease continued. Most remaining belligerents were largely self-sufficient in front-line equipment (such as tanks and fighter aircraft) by this stage, but Lend-Lease provided a useful supplement in this category even so, and Lend-Lease logistical supplies (including trucks, jeeps, landing craft, and, above all, the Douglas C-47 transport aircraft) were of enormous assistance.

Much of the aid can be better understood when considering the economic distortions caused by the war. Most belligerent powers cut back on production of nonessentials severely, concentrating on producing weapons. This inevitably produced shortages of related products needed by the military or as part of the military/industrial economy.

For example, the USSR was highly dependent on trains, yet the desperate need to produce weapons meant that fewer than 20 new locomotives were produced in the USSR during the entire war. In this context, the supply of 1,981 US locomotives can be better understood. Likewise, the Soviet air force was almost completely dependent on US supplies of very high octane aviation fuel. Although most Red Army tank units were equipped with Soviet-built tanks, their logistical support was provided by hundreds of thousands of high-quality US-made trucks. Indeed by 1945 nearly two-thirds of the truck strength of the Red Army was US-built. Trucks such as the Dodge ¾ ton and Studebaker 2.5 ton, were easily the best trucks available in their class on either side on the Eastern Front. US supplies of waterproof telephone cable, aluminium, and canned rations were also critical.

[edit] Repayment

Large quantities of goods were in Britain or in transit when Washington suddenly and unexpectedly terminated Lend-Lease on 2 September 1945. These were sold to Britain for about 10 cents on the dollar with payment to be stretched out for 50 years at 2% interest. ^[3] Debate in the Commons on 28 February 2002 shows that Britain expected to complete its repayment of its monetary debt to the USA on 31 December 2006, over 61 years from the conclusion of World War II:

"Bob Spink: To ask the Chancellor of the Exchequer (1) what outstanding liabilities there are to the United Kingdom of lend-lease loan facilities arranged during the Second World War; [38441]…" "Ruth Kelly: The information is as follows..." "Under the Agreement, the loans would be repaid in 50 annual instalments commencing in 1950. However the Agreement allowed deferral of annual payments of both principal and interest if necessary because of prevailing international exchange rate conditions and the level of the United Kingdom's foreign currency and gold reserves. The United Kingdom has deferred payments on six occasions. Repayment of the war loans to the United States Government should therefore be completed on 31 December 2006, subject to the United Kingdom not choosing to exercise its option to defer payment.

As at 31 March 2001, principal of $346,287,953 (£243,573,154 at the exchange rate on that day) was outstanding on the loans provided by the United States Government in 1945. The Government intend to meet its obligations under the 1945 Agreement by repaying the United States Government in full the amounts lend [sic] in 1945."

Similarly, Hansard records from a debate that took place in the House of Lords on 8 July 2002:

"Lord Campbell of Croy: My Lords, is this payment part of the lend-lease scheme under which the United States supplied munitions, vehicles and many other requirements including food and other provisions that were needed badly by us in the last part of the war?

Lord McIntosh of Haringey: My Lords, I referred to lend-lease in the context of the generosity of the United States throughout that period. However, the debt that we are talking about now is separate; it was negotiated in December 1945.

Lord Stoddart of Swindon: My Lords, will the noble Lord remind me as to exactly how much the loan was, and how much we have repaid since then in principal and interest?

Lord McIntosh of Haringey: My Lords, the loan originally was £1,075 million, of which £244 million is outstanding. The basis of the loan is that interest is paid at 2 per cent. Therefore, we are currently receiving a greater return on our dollar assets than we are paying in interest to pay off the loan. It is a very advantageous loan for us."

On 3 May 2006, the British Treasury Minister, Ivan Lewis in a commons reply said "Repayment of the war loans to the US Government is expected to be completed on December 31 2006," The final payment will be £45 million (as reported by the BBC [1]).

[edit] Quotations

Franklin Roosevelt, eager to assure public consent for this controversial plan, explained to the public and the press that his plan was comparable to one neighbor's lending another a garden hose to put out a fire in his home. "What do I do in such a crisis?" the president asked at a press conference. "I don't say... 'Neighbor, my garden hose cost me $15; you have to pay me $15 for it.' …I don't want $15 — I want my garden hose back after the fire is over."

[edit] US deliveries to USSR

The list ¹ below is the amount of war matériel shipped to the Soviet Union through the Lend-Lease program from its beginning until 30 September 1945.

[edit] See also

• Military production during World War II
• Lend-Lease Sherman tanks

[edit] References

• Allen, R.G.D. "Mutual Aid between the US and the British Empire, 1941—5", in Journal of the Royal Statistical Society no. 109 #3, 1946. pp 243-77 online at JSTOR detailed statistical data
• Campbell, Thomas M. and George C. Herring, eds; The Diaries of Edward R. Stettinius, Jr., 1943-1946 1975
• Clarke, Sir Richard. Anglo-American Economic Collaboration in War and Peace, 1942-1949. Oxford, 1982.
• Leo T. Crowley, "Lend Lease" in Walter Yust, ed. 10 Eventful Years (1947) 2: 858-60.
• Dawson, Raymond H. The Decision to Aid Russia, 1941: Foreign Policy and Domestic Politics (1959)
• Dobson, Alan P. U.S. Wartime Aid to Britain, 1940-1946 London, 1986.
• Herring Jr. George C. Aid to Russia, 1941-1946: Strategy, Diplomacy, the Origins of the Cold War (1973)
• Kimball, Warren F. The Most Unsordid Act: Lend-Lease, 1939-1941 (1969).
• Kindleberger, Charles P. A Financial History of Western Europe (1984)
• Langer, William L. and S. Everett Gleason; The Undeclared War, 1940-1941 1953, semi-official US history; ch 8-9
• Louis, William Roger. Imperialism at Bay: The United States and the Decolonization of the British Empire, 1941-1945. 1977.
• Milward, Alan S. War, Economy and Society (1975)
• Reynolds, David. The Creation of the Anglo-American Alliance 1937-1941: A Study on Competitive Cooperation (1981)
• Romanus, Charles F. and Riley Sunderland; Stilwell's Mission to China Office of the Chief of Military History, Dept. of the Army, 1953
• Sayers, R. S. Financial Policy, 1939-45 (1956). One of the official British histories
• Sherwood, Robert E. Roosevelt and Hopkins, an Intimate History (1948). Pulitzer Prize winner.
• Taylor, A. J. P. Beaverbrook 1972.
• Thorne, Christopher. Allies of a Kind: The United States, Britain and the War Against Japan, 1941-1945 1978.
• Weiss, Stuart L.; The President's Man: Leo Crowley and Franklin Roosevelt in Peace and War (1996) Crowley took over in 1943
• Woods, Randall Bennett. A Changing of the Guard: Anglo-American Relations, 1941-1946 (1990)
• Twenty-first Report to Congress on Lend-Lease Operations, pg 25.

[edit] Further reading

George Racey Jordan, USAF (Ret.), with Richard L. Stokes, From Major Jordan’s Diaries (Harcourt, Brace and Company, 1952). Major Jordan was a Lend-Lease expediter and liaison officer with the Russians, from May 1942 to June 1944, at both the Newark Airport, NJ and at Gore Field at Great Falls, Montana. His experiences and records were the focus of Congressional hearings in December, 1949 and March, 1950, since materiels and information were delivered to the Soviet Union which were not directly related to waging war, but rather related to atomic weapons research and building Soviet industry after the war. See, for example, the discussion of Major Jordan and Lend-Lease in: Herbert Romerstein and Eric Breindel, The Venona Secrets: Exposing Soviet Espionage and America’s Traitors (Regnery, 2000) ISBN 0-89526-275-4.

[edit] External links

• Official British history of Lend-Lease
• See [2] for the text of the act.
• More information, and images of the text, from
• [3].

	Preceding:	Cash and carry
	Subsequent:	Atlantic Charter