Potsdam Conference (TERMINAL)

29 
841.24/5-2945

The Secretary of State to the President

[Undated]
Secret

Memorandum for the President

  1. I have had prepared a new draft reply from you to the Prime Minister’s telegram of May 28 regarding Lend-Lease during the Japanese War. It would assure the Prime Minister that it is your intention that deliveries should be made for the prosecution of the war against Japan in accordance with schedules and other terms prepared by Army, Navy, and FEA supply officers in consultation with British representatives last November as modified in the light of changing strategic plans as well as of supply, procurement, and allocation considerations. It would remind the Prime Minister that the British dollar position remains at a reasonable level which should permit some relaxation of the exceedingly tight policy of the British with respect to dollar payments.

  2. The schedules prepared last November and modified continuously in the light of changing circumstances are based solely on the efficient prosecution of the war against Japan and have been so presented to the Congress on three occasions: (1) Last November on the conclusion of the Phase II discussions and prior to the release of a statement by Secretary Morgenthau and Messrs. Stettinius and Crowley in the United States and of an address by the Prime Minister before the House of Commons; (2) Last March and April in hearings on the extension of the Lend-Lease Act; and (3) Three weeks ago in hearings on the Lend-Lease appropriation.

  3. The munitions schedules are in three parts: ground forces, air, and naval. The ground forces schedules and conditions were originally signed on October 23, 1944, by Under Secretary Patterson and Generals Somervell and Clay. The air and fleet air arm schedules and conditions were originally signed on October 31, 1944 by Under Secretary Patterson, Assistant Secretaries Lovett and Gates, General Arnold and Vice-Admiral Fitch. The naval schedules and conditions were originally signed on November 10, 1944, by Vice-Admiral Home. As indicated above, these schedules are constantly subject to strategic and supply decisions of the Joint Chiefs of Staff.

  4. The non-munitions schedules were worked out by Mr. Crowley with representatives of appropriate civilian and military agencies and are also subject to changing strategic and supply considerations. They include only items for the support of the British civilian population in the effective prosecution of the war against Japan, and in no case items relating to rehabilitation and reconstruction of Britain, nor items for export or export manufacture. The principal items are: (1) food; (2) raw materials (cotton, pulp and paper, timber, and synthetic rubber which is matched by reverse lend-lease of crude rubber); (3) petroleum; and (4) shipping services.

  5. Mr. Crowley in the Jane hearings on the Lend-Lease appropriation spelled out in some detail the non-munitions or FEA schedules, and the Congress appropriated the funds as requested.

  6. I believe that these schedules have been prepared and are being handled in accord with the letter of the Lend-Lease Act and with the intent of the Congress and of yourself that Lend-Lease shall be used only in the prosecution of the war against Japan. The Congress has recently had an opportunity to examine the matter in connection with the appropriation bill and has signified its concurrence by making the funds available.

  7. I therefore recommend that Lend-Lease deliveries to the British Commonwealth proceed in accordance with the above, and that you reply to the Prime Minister as suggested in the attached draft memorandum.