Lend-Lease Act (1941)
Lend-Lease Act (1941)
Warren F. Kimball
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.
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."
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.
Dobson, Alan P. US Wartime Aid to Britain, 1940–1946. New York: St. Martin's, 1986.
LEND-LEASE, a program of providing U.S. military and economic assistance to nations fighting the Axis powers in World War II. After the fall of France in June 1940, President Franklin D. Roosevelt worried that if Great Britain were defeated by Nazi Germany, the United States would stand virtually alone against the fascist powers. Isolationist sentiment and unpreparedness for war discouraged American entry into the conflict directly, while U.S. law (the Johnson Debt-Default Act of 1934) required nations at war to pay cash for American military supplies. When Prime Minister Winston Churchill warned Roosevelt that Britain would not survive without further military assistance but was running out of funds, Roosevelt developed the idea of "lending" the British the necessary supplies. On 17 December 1940 he explained the
principle to newsmen using the famous analogy of lending one's garden hose to a neighbor whose house is on fire, before the fire should spread. On 29 December he sought to build public support by arguing in a national radio address that America should become "the great arsenal of democracy." Congress debated the Lend-Lease Act, named House Resolution 1776 to lend it a patriotic aura, and passed the measure on 11 March 1941.
The Lend-Lease Act greatly increased executive power by authorizing the president to "sell, transfer title to, or otherwise dispose of" military supplies to countries selected by the president. Roosevelt had sought such broad language in order to be able to extend the program to the Soviet Union, which his cabinet expected would soon be attacked by Germany. Repayment was to be in kind or in the form of any "indirect benefit" to the United States. By eliminating the need for cash payments, Lend-Lease made it possible to deliver large quantities of vital matériel for the fight against the Axis powers while avoiding the kind of recriminations over unpaid war debts that lingered after World War I.
Under the Lend-Lease program, from 1941 to 1945 the United States provided approximately $50 billion in military equipment, raw materials, and other goods to thirty-eight countries. About $30 billion of the total went to Britain, with most of the remainder delivered to the Soviet Union, China, and France. The program was administered by top Roosevelt aide Harry L. Hopkins until October 1941, then formalized under the Office of Lend-Lease Administration under Edward R. Stettinius. In September 1943, Lend-Lease was placed under the Foreign Economic Administration, headed by Leo T. Crowley. The program was terminated by President Harry S. Truman in August 1945 at the end of the war, an action resented by Soviet leaders, who believed the cutoff in aid was intended to gain diplomatic concessions.
The provision of large quantities of aid to Great Britain accelerated American involvement in the conflict with Germany because it constituted a declaration of economic warfare against Germany, and it led to the organization of naval convoys to deliver the aid, convoys that came into direct confrontation with German submarines. Whether this was Roosevelt's secret intention is a subject of debate. While Churchill gratefully described Lend-Lease as "the most unsordid act in the history of any nation," the program clearly served American interests by allowing other countries to do the actual fighting against the Axis while the United States improved its own military readiness.
The Lend-Lease program substantially bolstered the military efforts of both Britain and the Soviet Union, although in the Soviet case, the overall importance of Lend-Lease has been disputed. Soviet histories tend to play down the value of the American contribution, while some American histories have argued that the Soviet Union would have been defeated without Lend-Lease aid (even though the threat of collapse was greatest in 1941–1942, before the bulk of Lend-Lease aid arrived). Whether or not American assistance was indispensable to Soviet survival and success on the battlefield, it does seem to have improved Soviet offensive capabilities against the German military after 1942.
The United States negotiated on a bilateral basis with individual countries to determine the form of repayment, if any, for Lend-Lease aid. Approximately $10 billion in goods, in kind and in cash, was repaid to the United States, chiefly by Great Britain. The Roosevelt and Truman administrations considered the fighting carried out by their allies to have been sufficient "indirect" repayment for the bulk of the assistance, and the cost of other aid was simply written off. Lend-Lease assistance was provided to some countries for political ends, as in the case of those Latin American nations that were not directly involved in the war effort but received limited quantities of military equipment as an inducement to side with the Allies. With its conversion of loans to grants and the use of aid for diplomatic or political purposes, Lend-Lease helped create a precedent for U.S. foreign aid programs in the postwar era.
Dobson, Alan P. U.S. Wartime Aid to Britain, 1940–1946. New York: St. Martin's Press, 1986.
Kimball, Warren F. The Most Unsordid Act: Lend-Lease, 1939– 1941. Baltimore: Johns Hopkins University Press, 1969.
Van Tuyll, Hubert P. Feeding the Bear: American Aid to the Soviet Union, 1941–1945. New York: Greenwood Press, 1989.
In 1941, much of the world was engaged in World War II (1939–45). In the United States, there was a lot of pressure on President Franklin D. Roosevelt (1882–1945; served 1933–45) to avoid involvement: World War I (1914–18) was still fresh in the memories of the citizens, and few were willing to go through the horrors of war again.
In 1934, the U.S. Congress had passed the Johnson Debt-Default Act, which required nations at war to pay cash for any goods purchased in the United States. During World War II, Great Britain and China were both struggling to get the cash needed to purchase supplies for their forces. By 1940, Roosevelt was determined to find a way to provide assistance to the Allies without risking public outrage or direct U.S. involvement in the war. His answer was the Lend-Lease program.
The Lend-Lease Act gave the president power to sell, transfer, lend, or lease supplies to nations whose defense was vital to U.S. interests. President Roosevelt explained the act by comparing it to lending a garden hose to a neighbor to enable him to extinguish a house fire. The public supported this concept, and Congress passed the Lend-Lease Act in March 1941.
Under the program, the United States provided economic and military aid by lending food, tanks, airplanes, weapons, and raw materials to Allied countries. Repayment for this aid was to be decided by the president. In the end, many of the debts were forgiven without being paid. After the United States entered the war, Allied nations gave U.S. troops abroad about $8 billion in aid. After the war, President Harry S. Truman (1884–1972; served 1945–53) considered the military efforts of the recipients as fair trade for the lend-lease assistance they had received.
The Lend-Lease program ended in 1945. Over the course of the program's four-year existence, the United States provided more than forty countries with aid. Most of it went to Great Britain, the Soviet Union, and China. By the end of the war, the United States had given more than $49 billion in aid to support the Allied efforts through the Lend-Lease program.
Enacted by Congress in 1941 the Lend-Lease Act empowered the president to sell, transfer, lend, or lease war supplies—such as equipment, food, and weapons—to American allies during world war ii. In exchange for the valuable assistance provided under the Lend-Lease Act (55 Stat. 31 ), the Allies were to comply with the terms set by the president for repayment. The Office of Lend-Lease Administration was created pursuant to the act to oversee the implementation of the program, but this function was later transferred to the state department.
Although the Lend-Lease Act was enacted to provide aid to China and the British Empire, eligibility under its provisions was expanded to include all Allies who were essential to the maintenance of the security of the United States. Subsequent reciprocal agreements with countries
where American troops were stationed provided that the troops would receive comparable aid while stationed there.
President harry truman ended the lend-lease program in 1945.