855.24/10–1845

Memorandum by the Secretary of State to President Truman 46

Up to VJ–Day, Belgium provided at least $90 million more in goods and services as reverse lend-lease than it had received from the United States under lend-lease. This excess of reciprocal aid is largely the result of the very cooperative attitude of Belgium in unstintingly furnishing from its own limited resources whatever was requested by our armed forces after liberation. The goods and services which the Belgians provided went directly to U.S. troops. This aid was an important factor in the prosecution of the war against Germany, in the support of the U.S. occupation forces in Germany, and in the redeployment and evacuation of U.S. troops and equipment from Europe. The Belgian Government has agreed to continue to provide such aid for cash payment to the extent that U.S. armed forces may call for it during the coming months until all U.S. forces are withdrawn from Belgium.

The 3(c) Agreement between the United States and Belgium contemplated the transfer to Belgium of goods and services for which Belgium had and still has an urgent need up to a dollar value of $325,000,000. As of September 2, Belgium had received goods and services under the agreement at a presently estimated value of about $70,000,000. As of August 17, in conformity with your directions concerning the termination of lend-lease aid, the Belgian Government was informed that it would receive on payment terms, the articles already contracted for under the 3(c) Agreement (amounting to about $42,000,000) but that no new contracts would be let to provide the other goods specified in that Agreement. In effect, Belgium has ceased to receive lend-lease aid on straight lend-lease terms, and will in the last analysis received under the authority of the Lend-Lease Act about a third of the total contemplated in the 3(c) Agreement.

It should be pointed out that approximately $60,000,000 of the reciprocal aid furnished by Belgium went to American forces of occupation in Germany. Furthermore, the State Department, previous to the signing of the 3(c) Agreement with Belgium on April 18 [17], 1945, had informed the Belgian Government in writing on October 16, 194447 when reciprocal aid arrangements were under discussion, that if reciprocal aid required current replacement by purchase abroad by Belgium, the United States would either replace or refund in dollars the cost of these foreign purchases. In view of the [Page 110] complexity of administering this provision, it was stricken out of the final agreement, but Secretary Stettinius, in a letter of April 18 [17], 1945,48 to the Belgian Ambassador, stated that final action in regard to replacement of such imported items would be deferred until final settlement was reached. It was understood in the discussion between the U. S. and Belgian representatives at that time, that if direct lend-lease were not in excess of reciprocal aid, some adjustment would be made in accordance with Secretary Stettinius’ letter. No replacements or refunds in dollars have been made.

This expectation cannot be realized unless the directive of August 17 is modified in such a way as to reduce the payment obligation of the Belgian Government for lend-lease goods and services transferred after VJ–Day and to permit the further transfer of defense articles to Belgium pursuant to lend-lease authority both in the interest of national defense and in fulfillment of the schedule of the 3(c) Agreement with Belgium.

It is, therefore, recommended that, acting pursuant to the powers vested in you by the Lend-Lease Act, you direct that the following steps be taken:

(1) The Belgian Government be assured that its obligations under the 3(c) Agreement to pay for the articles transferred to it after VJ–Day in accordance with your Directive of August 17 will be considered to be satisfied by reason of the excess of reciprocal aid.

This step can be taken by virtue of the authority of Section 3(b) of the Lend-Lease Act which includes the right to fix or modify the terms on which foreign governments receive lend-lease aid. This step will provide Belgium with supplies valued at approximately $42,000,000, consisting of articles contracted for but not yet transferred to Belgium as of September 2, 1945.

(2) The War Department be directed to transfer to Belgium, pursuant to the authority granted to it in Section 14 of the Military Appropriation Act of 1946,49 defense articles of civilian utility to Belgium which are no longer required by the War Department for its own uses up to the amount of $48,000,000.

It should be noted that the transfer of such articles will not involve the making of new contracts of procurement under lend-lease authority, and that in large measure such transfer can be made pursuant to the contract for the delivery of such articles contained in the 3(c) Agreement between the two governments. The only articles to be transferred, which do not fall expressly within the terms of the 3(c) Agreement, are locomotives and railroad rolling stock owned by the U. S. Army and of the type now being used by the U. S. Army in [Page 111] Belgium. This equipment is necessary to the functioning of the Belgian railways which have been and continue to be a vital factor in supplying U. S. troops in Germany. Transferring this equipment to Belgium will enable the Belgian railways to continue their support of the U. S. occupation forces, and will, therefore, be in the interest of national defense, and within the scope of the Lend-Lease authority.

James F. Byrnes
  1. At the end of this memorandum there appears the stamp, “Approved Oct. 18, 1945” and President Truman’s signature.
  2. No record of this document of October 16, 1944, found in Department files.
  3. Text printed in Department of State Executive Agreement Series No. 481, and in 59 Stat. (pt. 2) 1655.
  4. Act approved by President Truman on July 3, 1945; 59 Stat. 384.