STATEMENT IN COMMONS BY PRIME MINISTER ATTLEE ON TERMINATION OF LEND-LEASE

August 24, 1945

British Speeches of the Day.

I am informed that the President of the United States has issued a directive exercising his powers under the Lend-Lease Act to order all outstanding Lend-Lease contracts to be canceled and to provide that stocks and deliveries procured under the Act must now be paid for either in cash or through credit arrangements to be negotiated. I understand that this applies to stocks of food and other supplies already in this country, as well as those in transit or to be delivered under existing contracts. There is, however, an indication of a possible continuance of a limited range of Lend-Lease for military purposes.

The system of Lend-Lease from the United States, Mutual Aid from Canada, and the accumulation of sterling by the sterling area countries have been an integral part of the war organization of the Allies. In this way it has been made possible for us in this island to mobilize our domestic manpower for war with intensity unsurpassed elsewhere, and at the same time to undertake expenditure abroad for the support of military operations over a widely extended area, without having to produce exports to pay for our imports of food and raw materials or to provide the cash we were spending abroad. The very fact that this was the right division of effort between ourselves and our Allies leaves us, however, far worse off, when the sources of assistance dry up, than it leaves those who have been affording us the assistance. If the role assigned to us has been to expand our exports so as to provide a large margin over our current needs, which we could furnish free of charge to our Allies, we should of course be in an immeasurably stronger position than we are today.

We had not anticipated that operations under the Lend-Lease Act would continue for any length of time after the defeat of Japan. But we had hoped that the sudden cessation of this great mutual effort, which has contributed so much to victory, would not have been effected without consultation, and prior discussion of the difficult problems involved in the disappearance of a system of so great a range and complication. We can, of course, only demobilize and reconvert gradually, and the sudden cessation of support on which our war organization has so largely depended puts us in a very serious financial position

Excluding altogether the munitions which we have been receiving under Lend-Lease and Canadian Mutual Aid and will no longer require, our overseas out-goings on the eve of the defeat of Japan were equivalent to expenditure at the rate of about 2,000,000,000 a year, including the essential food and other non-munitions supplies which we have received hitherto under Lend-Lease but must now pay for. Towards this total in the present year, 1945, our exports are contributing 350,000,000 and certain sources of income, mainly temporary, such as receipts from the U. S. Forces in this country and reimbursements from the Dominions for war expenditure which we have incurred on their behalf, 450,000,000. Thus the initial deficit with which we start the task of re-establishing our own economy and of contracting our overseas commitments is immense.

As I have said, we have not yet had an opportunity of discussing the resulting situation with the United States Administration. Mr. Brand, Treasury representative in Washington, has, however, received a letter from the Foreign Economic Administrator inviting us to enter into immediate conversations to work things out in the manner which will best promote our mutual interests. I am, therefore, inviting Lord Halifax to return to Washington accompanied by Lord Keynes and Mr. Brand and officials of other Departments to take part in such conversations.

Reciprocal aid on the part of the United Kingdom, or Reverse Lend-Lease, as it is sometimes called, which, according to the Reciprocal Aid Agreement with the United States, is provided on the same terms as Lend-Lease aid, will of course conform to the same dates of partial or complete termination as Lend-Lease. I much hope, however, that the President will accept arrangements by which shipping and food and any other supplies still required by our Forces overseas and by the American Forces overseas can continue to be furnished for a limited period under the Lend-Lease and Reciprocal Aid Agreements respectively. It would seem reasonable to regard such supplies and services arising directly out of the war as belonging to the common war effort, and, as I have said, there is an indication in the communication that has reached us that the American Administration may so regard them.

I earnestly hope that the House, in view of the fact that negotiations on these complicated issues are about to start, will agree that the matter should not be the subject of debate today.


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