Published Date

January 1, 1945

Resource Type

GI Roundtable Series, Primary Source

From GI Roundtable 13: How Shall Lend-Lease Accounts Be Settled? (1945)

A program such as lend-lease, which means the spending of many billions of dollars, has naturally come in for criticism and misunderstanding.

Lend-lease deals with broad international questions and vast, sometimes complicated and technical operations. Many people have misunderstood its purpose; others seem to be ignorant of its accomplishments. As late as November 12, 1943, almost three years after the beginning of the lend-lease debate, the Gallup Poll disclosed that “In spite of the bil­lions involved in the biggest interchange of goods and services of all time, nearly 9 in every 10 Americans either have incorrect ideas as to the repayment terms of the deal, or frankly admit they don’t know its basic principles.”

What principal criticisms have been voiced? What main objections have been raised?

Fears have been expressed that we are contributing more than our fair share to the cost of the war. Another criticism is that we are not getting the proper credit for our generosity. Some people believe that we are not exercising proper control over the use o£ some of the supplies sent abroad. It is also asserted that foreign governments are being led to believe that the United States will continue assisting there on a scale that will bankrupt the United States. And some charge that the wide powers granted by the Lend-Lease Act give excessive authority to the executive branch of the government.


How much is our fair share?

The question of paying our fair share of the cost of the war, since it involves the extent of lend-lease aid, may be approached through the words of the Lend-Lease Act itself. Aid may legitimately be provided to any country whose defense is “vital to the defense of the United States.” To determine how vital may be the aid granted is the job—a difficult one—of those in charge of our foreign relations and military operations.

Decisions have to be weighed and considered in the light of the particular political, economic, and military problems involved. This must be done, sometimes long in advance, sometimes in immediate response to a sudden need or opportunity. Being at war, we must be prepared constantly to deal with emergencies. In various cases, all departments of government must be consulted. To determine how vital to our national defense a particular form of aid to a particular country at a particular time may be, constitutes a major test of statesmanship.

Are we contributing more than our share and are our allies contributing less than theirs? The over-all figures for each nation’s war expenses are not comparable. We have been in the war for a shorter time than most of our allies, but, in general, our soldiers are better paid and our equipment is more costly. Our Army and Navy are larger, both in numbers of men and quantities of equipment than, for example, the British. We can come closer to a real measure of financial effort if we see what proportion of its national income each nation is putting into war production.

What do we get out of it?

It was estimated early in 1944 that the United States was turning out about one-half the total United Nations production of munitions (ships, planes, tanks, guns, shells, and the like). It is up to us to decide how and for what purpose that half will be used.

To win the war all the resources of the United Nations must be used effectively. If for lack of supplies the war effort were to slacken on any front, those who grumble at the cost of our lend-lease bill doubtless would be as quick as anyone to regret the slackening.

In helping the United Nations to check the Axis and then to take the offensive, lend-lease has not only helped our own defense, but has saved many American lives. As Senator George said during the consideration of the Fourth Lend-Lease Appropriation Bill in June 1943:

“I am convinced that if we had not made the preparations which we made in those precious months when we were buying time, this war would continue a year longer. Even if we have shortened this war by only six months, we have cut down our expenditures, at the present rate, by 48 billion; and in the blood of our men, in the tears of their mothers, we have saved more than can ever be estimated.”

Is our sacrifice too heavy?

How much of our war sacrifices are we putting into lend-lease? As we have seen, lend-lease accounted for 15 percent of all our war expenditures through June 30, 1944. The proportion of British war costs devoted to aiding her allies has amounted to about 10 percent (late 1943 figures). In the middle of 1944 Australia and New Zealand were both putting 18 percent of their war budgets into reverse lend-lease for United States forces alone.

Equality of sacrifice among allies implies an equality of effort in proportion to the resources of the nation. The British, Russians, and Chinese have had greater casualties, both military and civilian, and far greater losses of property from enemy bombardment and vandalism than we have. By the late summer of 1944, the Russians had over 5,000,000 casualties, Great Britain about 1,000,000, and the United States over 300,000. These burdens are heavy. They constitute losses of manpower, capital, and income. They create tremendous tasks of rebuilding after the war.

To compare all these losses would be impossible. They cannot be measured in dollars and cents. And if, for the sake of balancing the accounts, a monetary value could be placed on lives lost, the United States would doubtless be deeply in debt. Yet many observers believe that it would be unfair not to consider such costs when lend-lease accounts are settled and the contribution of each of the United Nations to the defeat of the Axis is evaluated. What is your opinion?

Have errors been made?

The delivery to the British, Australians, and others, of such “civilian” items as trucks and agricultural machinery “while American farmers in many places were going without” has come in for much unfavorable comment. Has this comment been justified?

Agricultural machinery, as well as food, was provided to the British at a time when the food situation in the British Isles was particularly critical because of submarine warfare. Britain was close to famine, and the sending of more food in 1941 and 1942 probably would have meant increased losses through sinking s in proportion to the increased shipping tonnage used. If, however, we were to send agricultural machinery to England—where factories had been converted to munitions production and available labor was badly needed for war work—more of the needed food could be grown on British soil. Thus it was believed that there was a distinct advantage in shipping machinery.

The British Isles have been an important base for our military operations, and our soldiers in Britain have been supplied with large amounts of food under reverse lend-lease. Some part of this food has come from the lawns and playing fields—where crops had not grown for centuries—that the British plowed up with the aid of American machinery:

The same has been true of our shipments of farm equipment to Australia and New Zealand, shipments which have figured in criticisms of lend-lease.

What does the record show?

Considering the speed with which enormous quantities of materials have been handled, as well as the competing requirements of our allies and our own civilian and military needs, few critics deny that the lend-lease record is a good one. Every request for lend-lease aid has first been carefully investigated by the Lend-Lease Administration and its successor, the Foreign Economic Administration, or by the War or Navy Departments, Maritime Commission, War Shipping Administration, or War Food Administration. Material subject to the jurisdiction of the War Production Board then has to meet that agency’s test of relative urgency. Other agencies have had a chance to examine requests for goods of which there is a shortage in the United States. No request has been approved until the-needs of all claimants, including our own civilians, were studied.

There have been cases, of course, in which wrong goods have been sent under lend-lease, the right goods were sent to the wrong place, or articles were put to wrong uses. Defenders of lend-lease point out, however, that such cases have been very few compared to those in which the right goods have gone to the right place at the right time. Most of those who have studied the administration of lend-lease believe that it has been well handled, taking into account the stress of the times. A ship sometimes sails in a hurry; sometimes it is delayed or does not sail at all. In some degree, such losses and waste are a part of lend-lease because they are a part of war.

What is fact and what is fiction?

There has been much honest criticism of lend-lease. There has also been a crop of rumors, some amusing and far fetched, others perhaps aimed at planting seeds of dissension between the allies.

The most persistent of the rumors have centered around butter. As the ration point value of butter rose, the rumors became more extravagant. It was said that we shipped so much butter to the U.S.S.R. that Soviet soldiers were using it to grease their boots. But actually the butter that went to the Soviets—desperately short in dairy products—was relatively small in volume and was used largely in hospitals.

In the summer of 1943 a story was being spread in upper New York State about a man who went hunting in the North Woods. He couldn’t find any butter in the local stores. When he crossed the border into Canada, however, he could buy two pounds of butter at a time, according to the story—the packages being marked “Lend-Lease.” This tale has been found to be baseless. No lend-lease butter has been shipped to Canada or to any other country except the U.S.S.R.

Rumors have been recurrent that lend-lease was footing the bill for a host of frivolous things, ranging from nylon stockings, Scotch whisky, and traveling cases to gowns for a noted duchess and a dinner party in a fashionable Washington hotel for a member of an allied mission. To check off the last items first, all procurement of lend-lease goods and services is made by requisition, and there is no way by which anyone can requisition a dinner party or an evening gown. No requests for dinner parties or gowns have ever been made by foreign governments.

As for the nylon hose, a Sydney, Australia, paper in November 1943 reported that American nylon hose would go on sale in local stores. Upon investigation, however, it was found that the story was planted by political opponents of an Australian member of Parliament who was up for re-election. It had no foundation in fact, and was promptly repudiated by the embarrassed Australian government.

The allegation that whisky, traveling cases, and other luxury items were provided under lend-lease had at least a kernel of truth. Such articles were once requested by officers of a British battleship being overhauled in an American Navy yard. The officers asked for something customarily supplied in their own navy yards. Since whisky and traveling cases are not issued to American personnel, the Navy Department turned down the request.

One story that pops up with unusual persistence is about gasoline. In varied versions it relates that the American forces in the field sold a large amount of gasoline to the British at such and such a place. The price was 2 cents a gallon or 9 cents a gallon or thereabouts. Later, the supply situation at that spot was reversed and we had to buy gas from the British. It cost us—sometimes the story says for the same gas—anywhere from 36 to 45 cents a gallon.

The way exact figures are mentioned in these stories make them sound as if they must be correct. Actually the alleged prices are the giveaway. The fact is that the United States does not sell gasoline to the British and the British do not resell it to us. We supply it to them under lend-lease without cost to them and they supply it to its under reverse lend-lease without cost to us. Each government keeps records of how much it originally spent for the gasoline, but money never changes hands in lend-lease transfers.

More sinister was the rumor that the Soviets were trading some of the lend-lease planes obtained from us to the Japanese for rubber and that the planes were being used later—allegedly—against our forces in the Pacific. Rumors of this kind, frequently heard on Axis radio broadcasts, have been investigated and found baseless by the State Department and other agencies.

To such malicious tales the truth is a good and sufficient answer. But the truth doesn’t always catch up in time to prevent injury to interallied unity. However, there is evidence on the other side too. Many a GI has seen with his own eyes the effect against the enemy of lend-lease weapons in the hands of allied fighters. Or he may have known the comforts of eating food and wearing clothes supplied under reverse lend-lease.

Are our allies ungrateful?

No discussion of lend-lease would be complete without some attention to a particularly sensitive point sometimes raised in the controversy. Mutual trust and loyalty are “musts” between allies, but from time to time it has been suggested that our allies are not showing sufficient gratitude for the help we are granting them under lend-lease. A vigorous American protest in Moscow gave expression to this sentiment in 1943 and the Russians gave the matter immediate attention.

It has been asserted that Great Britain was putting her own labels on goods coming from the United States and was sending them to other countries. Complaints have also been heard that lend-lease materials were used by the British to manufacture goods later sold abroad—or sometimes sold in the United States.

Criticism of our allies should be met in a spirit of fairness. If mistakes occur, their source should be eliminated and investigations carried on. But isolated incidents should not obscure the principles of cooperation that have been established. Conclusions based on exaggerated misunderstandings are dangerous to the present conduct of the war and to future collaboration among the United Nations to insure the peace.

The facts themselves provide no genuine basis for friction. The Soviet government has enlarged the space given in its press and radio to recognition of American aid and the respective contributions of all other allies. This appreciation has been stressed in speeches and statements by the highest Soviet officials, including Premier Stalin. Similar expressions of gratitude have been voiced by Prime Minister Winston Churchill, Ambassador Halifax, and other high ranking Britons.

Are they chiseling on us?

What about the alleged sale of lend-lease goods by our allies and the resale of articles made with materials imported under lend-lease? The sale of some articles obtained under lend-lease has been regarded as necessary for the conduct of the war. The most important example is that of food shipped to Britain.

In Britain food raised at home and that brought from overseas is all handled by the Ministry of Food. The ministry sells the food obtained from us to processors and distributors and the money so realized is used for the prosecution of the war.

If the food were distributed free to the British people it would disrupt the entire distribution system.

Some critics have said that Britain should turn over to us the proceeds from the sale of lend-lease food. But this is not in the spirit of the Lend-Lease Act. The basic idea of lend-lease is not to attach consideration of monetary payments to articles supplied to our allies that are vital to their defense. If Britain gave us the money from sales of food instead of putting it into her treasury, her ability to finance the costs of the war would be that much less.

The governments of the United Nations, as part of over-all planning, have endeavored to prevent lend-lease articles from being used in ways that might injure American commerce and trade. Special provisions against such possibilities have been set up.

By common agreement, in fact, recipients of lend-lease goods do not re-export them to other nations except in rare cases where the war makes it necessary. In a White Paper of September 10, 1941, Britain guaranteed us that lend-lease articles would not even indirectly enter commercial channels.

Next section: What Principles Should Govern the Final Settlement?