848A.24/7–644

The Acting Secretary of State to the South African Minister ( Gie )

My Dear Mr. Minister: I refer to Mr. Jordaan’s letter of July 6, 1944, to Mr. Achilles,10 concerning the problem of Lend-Lease equipment furnished through the United Kingdom to South African forces under British operational control. As you know, this matter was discussed by Dr. Holloway,11 Mr. Jordaan and Mr. Andrews12 with representatives of the Foreign Economic Administration and this Department on July 29.13 We have given careful and sympathetic consideration to the position of your Government as set forth in that letter and as explained by Dr. Holloway, and I wish to outline in this letter the position as we see it.

Agreement has been reached in principle that the Union Government should go on a strictly cash basis in its relations with my Government. The question of Lend-Lease equipment furnished through the United Kingdom to South African troops is only one practical detail to be settled within this principle.

We understand that the present arrangement between your Government and the Government of the United Kingdom whereby your Government pays the United Kingdom the arbitrary figure of £1,000,000 a month for the equipment and maintenance of South African forces in the Mediterranean-European Theater is not intended to cover Lend-Lease equipment furnished to those forces. It therefore seems to us that it would be equitable if a similar payment, the amount to be subject to agreement, were to be made to this Government in respect of Lend-Lease equipment furnished to such forces.

In view of South Africa’s exceptionally strong financial position, one of the strongest of the United Nations, we have difficulty in believing that such a payment would exceed the financial capacity of the Union.

I hope that it may be possible to reach agreement on this matter in the near future and would suggest that, in any event, arrangements [Page 262] be completed for the transfer to a cash basis of all other Lend-Lease equipment currently being furnished to the Union or to Union forces in South Africa without awaiting agreement on this one point, and I am making a suggestion to this effect to the Secretary of War.14

Sincerely yours,

Edward R. Stettinius, Jr.
  1. Not printed.
  2. John E. Holloway, South African Secretary for Finance.
  3. Harry T. Andrews, Head of the South African Supply Mission in Washington.
  4. Memorandum of conversation not printed.
  5. Letter dated August 3, 1944, not printed.