Lend-Lease Act (1941)

Lend-Lease Act (1941)

Warren F. Kimball

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Excerpt from the Lend-Lease Act

The President may ... , when he deems it in the interest of national defense, ... sell, transfer title to, exchange, lease, lend, or otherwise dispose of, to any such government [whose defense the President deems vital to the defense of the United States] any defense article.... The terms and conditions ... shall be those which the President deems satisfactory.

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The Lend-Lease Act of 1941 (55 Stat. 31) initiated a program of military aid by which the United States provided goods and services to its allies in the fight against Germany, Italy, and later Japan during World War II. Under the terms of "lend-lease," these allies would repay the United States not in money but by returning the goods or using them in support of the cause, or by a similar transfer of goods.

OPPOSITION TO FOREIGN AID

President Franklin Roosevelt wanted to aid the Western democracies in their fight against the Nazi and Fascist threat, but political and public opinion was opposed. For one thing, World War I had left a legacy of postwar debts. In addition, in the 1920s Americans were critical of the squabbling and colonial expansion of the European powers and were not inclined to aid even friendly nations. Then the Great Depression and the international economic collapse of the 1930s increased American uneasiness about doling out precious resources. In response to growing threats from Nazi Germany and Fascist Italy in the 1930s, Congress passed a series of legislative barriers, particularly the Neutrality Acts, designed to prevent the nation from being drawn into another European war by trade and investment ties with belligerent nations. Americans blamed such ties for U.S. involvement in World War I.

When war broke out in September 1939, Congress modified the prohibitions on arms trading with nations at war. But arms purchasers like Great Britain and France still had to pay cash (gold or dollars), which was in short supply as their economies moved from producing exports to arms production. In November 1940 the British Ambassador to the United States told reporters that "Britain's broke." Then, in early December, Prime Minister Winston Churchill sent President Roosevelt an eloquent plea for help, warning that "the moment approaches when we shall no longer be able to pay cash."

ROOSEVELT'S PLAN

Even before Churchill's message arrived, Roosevelt was ready to act. The German invasion of Britain had been postponed as Hitler began to look to the East. Large scale American aid held out the promise of a successful war effort against Germany without the participation of American ground troops in Europe. On December 17, 1940, Roosevelt suggested a way to give Britain the aid it needed without creating postwar debts. His new idea, he said, would get "rid of the silly, foolish old dollar sign." As he put it, the United States would lend its garden hose to help its neighbor put out the fire, with the understanding that the neighbor would repay in kind rather than receive an invoice for the dollar amount. The United States should become the "Arsenal of Democracy," Roosevelt said, and Americans seemed comfortable with the concept of paying for security while someone else fought for it. Only the so-called "isolationists" objected that Britain alone, even with American aid, could not defeat Hitler. But these isolationists were already seen as unrealistic appeasers (those willing to make concessions to an aggressor, sacrificing principles) or even as pro-Nazi.

Roosevelt had a two-part plan for translating his garden hose concept into legislation. First, the debate in and out of Congress was to appear full and unrestricted, though he himself might not be fully candid about how much aid he planned to give. Only a "Great Debate" would give him the mandate (an authorization to act) that he sought. Second, Roosevelt wanted a bill that gave him the widest possible latitude to decide which nations to aid, what goods to send, and what to ask for as repayment.

The bill that came under debate in Congress was called H.R. 1776, a number chosen by the Parliamentarian of the House so as to make it sound more patriotic. It was long and full and served to heighten public awareness of the geopolitical crisis in Europe. Congress did require lend-lease be carried out through annual appropriations (funds set aside for a specific purpose) and that it should receive regular reports to establish some semblance of oversight. But administration spokesmen refused to discuss certain awkward issues that seemed to move the nation toward war, especially the convoys needed to protect aid shipments from attack by German U-boats. On March 11, 1941, Roosevelt signed the Lend-Lease Act, which had passed easily in votes that generally followed party lines, as Democrats overwhelmingly supported the president.

SUCCESS OF THE PROGRAM

It took nearly two years for America's industrial potential to reach its peak, but lend-lease was a rousing success. Initially it boosted morale amongst the major U.S. allies, but it quickly began to provide the supplies they needed to fight the war. Wartime estimates, including the value of services and technological transfers, came to between $43 and $50 billion (1945 dollars) of aid to America's wartime allies. Some $8 billion of "reverse" lend-lease—mainly technology transfers and raw materials from the British and French empires—came back to the United States.

Even while lend-lease functioned as an aid and exchange program, it took on its second life as a political program. Almost as soon as the bill became law, State Department officials began to use it as a lever to force broad changes in the world's political economy. The negotiation in 1942 of a Master Lend-Lease agreement with the British included requirements for the United Kingdom to open its empire to free trade—later called free markets. American leaders had deep suspicions that Great Britain remained a major economic rival and so lend-lease was not extended into the immediate postwar period.

During the lend-lease debate, opponents had tried to exclude the Soviet Union from the program. But American strategists knew that only the Red Army could defeat Hitler on the ground, and lend-lease would help do just that. U.S. aid constituted only about 7 percent of what the Soviet Union itself produced during the war, but it did allow the Soviets to concentrate their production in the most efficient manner. Lend-lease to Russia was, for Roosevelt, much more than just a wartime aid program. It could demonstrate the benefits of the American system and promote mutual trust, all key elements in Roosevelt's postwar plans. It was, therefore, presidential policy to promise to give the Russians almost everything they requested. Misunderstandings and resentment resulted when supply requirements to other theaters made it impossible to deliver. The Cold War prevented a formal lend-lease settlement with the Russians until June 1990, when, with the Soviet system on the verge of collapse, a repayment agreement (for nonmilitary goods) was reached.

Lend-lease, what Churchill had called "the most unsordid act," was an immensely successful wartime aid program, one that set the stage for the U.S. foreign aid programs that followed. Lend-lease was designed to help win the war without leaving behind a residue of war debts and recriminations, and it did just that.

See also: Neutrality Acts.

BIBLIOGRAPHY

Dobson, Alan P. US Wartime Aid to Britain, 1940–1946. New York: St. Martin's, 1986.

Herring, George C. Aid to Russia, 1941–1946. New York: Columbia University Press, 1973.

Kimball, Warren F. The Most Unsordid Act: Lend-Lease, 1941. Baltimore: Johns Hopkins Press, 1969.