Foreign Relations of the United States: Diplomatic Papers, 1945, The British Commonwealth, The Far East, Volume VI

800.24/8–2045: Circular telegram

The Secretary of State to Certain American Diplomatic Missions and Consular Offices ³

Washington, August 20, 1945—9 p.m.

Sec. 1. From FEA Crowley. The President has directed that following action be taken in regard to future lend-lease operations:

a. No new contracts will be entered into for goods to be furnished under Lend-Lease except for such items as the Joint Chiefs of Staff may approve for payment out of military appropriations.

b. Countries with which 3(c) agreements are in effect will take and pay for goods involved in contracts yet to be completed, goods awaiting shipment, those in transit, and inventories abroad.

c. Countries which have not entered into 3(c) agreements may obtain goods now in process of manufacture, in storage, awaiting shipment, being shipped, or in inventory abroad, upon their agreement to pay for them on such terms as may be determined by this Government.⁴

d. All uncompleted contracts for goods not to be delivered under (b) and (c) above shall be immediately reviewed to determine whether their completion would be in the best interest of the US Government and, unless so determined, such contracts will be cancelled.

Each of the foreign governments concerned will be informed of the action taken and no release of the information outlined herein should be made, of course, until official notification has been received by such governments.

This action does not pertain to cash reimbursement transactions. Requisitions on a cash reimbursement basis may be processed to procurement agencies for sixty days following V–J Day.

Sec. 2. A letter from FEA has been sent to the Chairman of the British Supply Council in Washington⁵ reading as follows:

“In view of the termination of hostilities, the Foreign Economic Administration is desirous of entering into discussions and negotiations immediately with you and members of the British Supply Council relating to the discontinuance of its lend-lease aid to the British Commonwealth in an expeditious manner which will best promote our mutual interests and which will be consistent with the provisions of the Lend-Lease Act. I suggest in connection with such discussions and negotiations with respect to the lend-lease programs undertaken by the Foreign Economic Administration that the following general principles should apply:

• “(a) No new contracts should be entered into for goods or services to be furnished on lend-lease terms.
• “(b) Supplies which are now in the process of manufacture, in storage, awaiting shipment, or not yet transferred and services within presently agreed programs, may be obtained by the British Commonwealth to the extent that they are available against payment on appropriate terms and conditions.
• “(c) All existing supplies which have been transferred on lend-lease terms and which are in shipment or under the control of the British Commonwealth in inventory may be retained by the British Commonwealth against payment on appropriate terms and conditions.
• “(d) Cash reimbursement lend-lease will be available for sixty days after V–J Day during which time requisitions within presently agreed programs may be filed with the Foreign Economic Administration.

“It will be necessary in the course of our discussions to have an inventory of lend-lease supplies furnished by the Foreign Economic Administration still under the control of the British Commonwealth. It is requested, therefore, that you furnish, as soon as possible an inventory listing as of V–J Day, all articles that have been transferred to the British Commonwealth by the Foreign Economic Administration on lend-lease terms and that have not been lost, destroyed or consumed. I will be glad to discuss with you and the members of the British Supply Council the principles upon which such inventory should be prepared.

“I am transmitting copies of this letter to the heads of the Supply Missions of the Australian, Indian, New Zealand and South African Governments.”

Sec. 3. Negotiations referred to in above letter will be carried on in Washington and you will be advised of developments. Meantime, this will enable you to answer in general way any questions, but you should refer specific questions and those involving negotiations promptly to Washington.

You can best assist these important negotiations by exerting every effort to bring up to date all available information on inventories of lend-lease supplies.

We have already cabled you as to form in which inventories should be taken as at V–J Day.⁶

Byrnes

3. Sent to London, Calcutta, New Delhi, Sydney, and Wellington.
4. For correction of the portion of this paragraph relating to the terms for payment, see supra. The memorandum of telephone conversation by Mr. Brown, August 19, p. 105, had also indicated even prior to the Clayton—Byrnes telephone conversation (see footnote 99, p. 106) that the terms for so-called pipeline goods for the United Kingdom were to be agreed upon, as contrasted with unilateral determination by the United States Government. There was still some uncertainty on this subject, however, for some days to come, as subsequent documents indicate.
5. Letter from Mr. Crowley to Mr. Brand, dated August 18, was not actually delivered until August 20. See memorandum of telephone conversation by Mr. Brown, August 19, p. 105; also R. S. Sayers, Financial Policy, 1939–45 (London, Her Majesty’s Stationery Office, 1956), p. 479.
6. Telegram 7244, August 24, 5 p.m., to London, indicated that this last paragraph had been included inadvertently and should be omitted for the United Kingdom, since it applied only to the Dominions, Colonies, and India (103.9169). The last paragraph was included with appropriate changes in this circular telegram as sent to Johannesburg, Nairobi, and Accra.