Lend–Lease Act [1940] - History

Lend–Lease Act [1940] - History


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Be it enacted That this Act may be cited a, "An Act to Promote the Defense of the United States."

(a) Notwithstanding the provisions of any other law, the President may, from time to time, when he deems it in the interest of national defense, authorize the Secretary of War, the Secretary of the Navy, or the head of any other department or agency of the Government— (I) To manufacture in arsenals, factories and shipyards under their jurisdiction, or otherwise procure, to the extent to which funds are made available therefor, or con tracts are authorized from time to time by the Congress, or both, any defense article for the government of any country whose defense the President deems vital to the defense of the United States.

(2) To sell, transfer title to, exchange, lease, lend, or otherwise dispose of, to any such government any defense article, but no defense article not manufactured or procured under paragraph (1) shall in any way be disposed of under this paragraph, except after consultation with the Chief of Staff of the Army or the Chief of Naval Operations of the Navy, or both. The value of defense articles disposed of in any way under authority of this paragraph, and procured from funds heretofore appropriated, shall not exceed $1,300,000,000. The value of such defense articles shall be determined by the head of the department or agency concerned or such other department, agency or officer as shall be designated in the manner provided in the rules and regulations issued here under. Defense articles procured from funds hereafter appropriated to any department or agency of the Government, other than from funds authorized to be appropriated under this Act, shall not be disposed of in any way under authority of this paragraph except to the extent hereafter authorized by the Congress in the Acts appropriating such funds or otherwise.

(3) To test, inspect, prove, repair, outfit, recondition, or otherwise to place in good working order, to the extent to which funds are made available therefor, or contracts are authorized from time to time by the Congress, or both, any defense article for any such government, or to procure any or all such services by private contract.

(4) To communicate to any such government any defense information, pertaining to any defense article furnished to such government under paragraph (2) of this subsection.

(5) To release for export any defense article disposed of in any way under this subsection to any such government,

(b) The terms and conditions upon which any such foreign government receives any aid authorized under subsection (a) shall be those which the President deems satisfactory, and the benefit to the United States may be payment or repayment in kind or property, or any other direct or indirect benefit which the President deems satisfactory.

(c) After June 30, 1943, or after the passage of a concurrent resolution by the two Houses before June 30, 1943, which declares that the powers conferred by or pursuant to subsection (a) are no longer necessary to promote the defense of the United States, neither the President nor the head of any department or agency shall exercise any of the powers conferred by or pursuant to such section (a) ; except that until July 1, 1946. any of such powers may be exercised to the extent necessary to carry out a contract or agreement with such a foreign government made before July 1, 1943, or before the passage of such concurrent resolution, whichever is the earlier.

(d) Nothing in this Act shall be construed to authorize or to permit the authorization of convoying vessels by naval vessels of the United States.

(e) Nothing in this Act shall be construed to authorize or to permit the authorization of the entry of any American vessel into a combat area in violation of section 3 of the Neutrality Act of 1939.

Section 8

The Secretaries of War and of the Navy are hereby authorized to purchase or otherwise acquire arms, ammunition, and implements of war produced within the jurisdiction of any country to which section 3 is applicable, whenever the President deems such purchase or acquisition to be necessary in the interests of the defense of the United States.

Section 9

The President may, from time to time. promulgate such rules and regulations as may be necessary and proper to carry out any of the provisions of this Act; and he may exercise any power or authority conferred on him by this Act through such department, agency, or officer as he shall direct.


Cash and carry (World War II)

Cash and Carry was a policy by US President Franklin Delano Roosevelt announced at a joint session of the United States Congress on September 21, 1939, subsequent to the outbreak of war in Europe. It replaced the Neutrality Acts of 1937, by which belligerents could purchase only nonmilitary goods from the United States as long as the recipients paid immediately in cash and assumed all risk in transportation using their own ships. [1] A 1939 revision allowed the sale of military arms to belligerents on the same cash-and-carry basis. [2]


Lend-Lease

Early in World War II the United States devised a plan, dubbed Lend-Lease, to assist the nations that were then fighting the Axis powers (Germany, Japan and Italy). Roosevelt began talking about the plan at a news conference on December 17, 1940, and expanded on the idea during a Fireside Chat on December 29. During the news conference, he commented:

We can be very sure that the devious diplomatic, economic, and political methods which Germany has employed toward all the countries near her would also in the future be employed in the regions to the south of us. First would come economic penetration, near economic dependence, then political immigration and political interference. After that we would see the establishment of puppet regimes under Nazi or native control, and finally the arming of those countries and their military domination by Nazis .

I believe that our people now are determined to put forth their full efforts for saving Britain and thus saving themselves from the burdens of future militarism and war and from an overturn of American life.


Lend‐Lease Act and Agreements

Lend‐Lease Act and Agreements (1941).When the British could no longer pay cash for arms and munitions in December 1940, after the presidential election Franklin D. Roosevelt suggested leasing or lending war supplies to those fighting the Axis. He likened it to lending a garden hose to a neighbor whose house was burning. Once the fire was out, said FDR, “he gives it back to me and thanks me very much,” or, if damaged, he replaced it. For three months Americans debated the Lend‐Lease bill in Congress. Isolationists condemned it as leading America into another European war, as in World War I. But many Americans saw the need to aid Britain and China against Germany and Japan. Numbering the bill H.R. 1776 gave it a patriotic aura, and Lend‐Lease eventually passed by a 60� vote in the Senate and 317� in the House.

Signed into law on 11 March 1941, Lend‐Lease permitted the president to “sell, transfer title to, exchange, lease, lend, or otherwise dispose of” defense articles to 𠇊ny country whose defense the President deems vital to the defense of the United States.” Congress initially appropriated $7 billion, with a total expenditure of more than $50 billion by the end of World War II. The British received the lion's share, $31.6 billion in Lend‐Lease aid. After the German invasion of the Soviet Union in June 1941, Roosevelt provided Lend‐Lease to the USSR, $11 billion, without which “the war would have been lost,” as Josef Stalin admitted. That “most unsordid act,” as Winston S. Churchill called Lend‐Lease, turned the United States into the 𠇊rsenal of democracy” that forged victory in World War II.
[See also Isolationism World War II: Military and Diplomatic Course.]

Warren F. Kimball , The Most Unsordid Act: Lend‐Lease, 1939� , 1969.

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Document Category

After two months of hearings and debate, the House of Representatives passed this bill, H.R. 1776, “An Act to Promote the Defense of the United States,” which became known as the Lend–Lease Act.

Embroiled in war with Nazi Germany, Great Britain sustained heavy military and financial losses during the early years of World War II. The United States furnished Great Britain and other allies with military supplies and equipment through a “cash and carry” system permitted by the Neutrality Act of 1939. This arrangement required the purchasers to pay in cash and transport the goods themselves, allowing the United States to maintain the appearance of neutrality in the conflict. Concerned that his country would soon be unable to pay for supplies, Prime Minister Winston Churchill appealed to the United States for additional assistance for Great Britain. President Franklin Roosevelt proposed a lend–lease system that distributed military aid to “the government of any country whose defense the President deems vital to the defense of the United States.” The President also determined the appropriate repayment. This plan allowed the United States to continue to support the war against the Axis powers without involving American troops in a foreign war.

Roosevelt reasoned that, “We cannot, and we will not, tell them that they must surrender, merely because of present inability to pay for the weapons which we know they must have.” Congressional isolationists, who opposed intervention in the war, asserted that a lend–lease policy disregarded American neutrality and gave the President “practically unlimited” authority. After much debate, the House and the Senate passed the act, and President Roosevelt quickly signed it into law on March 11, 1941.


Marshall Myths: “The Most Unsordid Act in History”

The phrase “the most unsordid act in history” is correctly attributed to the ever eloquent Winston Churchill, but a great deal of confusion persists about what Churchill was referring to when he bestowed this title. Sadly, those who believe that Churchill used this phrase to describe the Marshall Plan are perpetuating another Marshall myth. Tracing Churchill’s use of the phrase in his speeches reveals that it was used to describe Lend-Lease, not the Marshall Plan.

If you incorrectly attributed “the most unsordid act in history” to the Marshall Plan, don’t be too hard on yourself. A President, a prime minister, an ambassador, journalists, and countless publications have all made the same mistake.

The original misattribution of Churchill’s quote appears in the book Sketches from Life of Men I Have Known by Dean Acheson, which was published in 1960. The incorrect attribution of the quote can also be found in a February 26, 1969, oral history interview by John W. Snyder, Treasury Secretary under President Harry Truman. From these two sources the mistake of identifying the Marshall Plan as “the most unsordid act in history” has greatly multiplied and has contributed to the confusion surrounding the quote that exists today.

The earliest documented use of “the most unsordid act in history” appears in Churchill’s speech at the Mansion House in London on November 10, 1941. In the speech Churchill states, “The Lease-Lend Bill must be regarded without question as the most unsordid act in the whole of recorded history.” Churchill used this quote again when speaking in the House of Commons after President Franklin Roosevelt’s death, when he remarked, “At about that same time he devised the extraordinary measure of assistance called Lend-Lease, which will stand forth as the most unselfish and unsordid financial act of any country in all history.”

Both Lend-Lease and the Marshall Plan involved the provision of significant amounts of aid to foreign countries, so the past confusion about the Churchill quote is understandable. The original speeches in which the Churchill quote appeared leave no doubt that it was made in reference to Lend-Lease.

President Franklin Roosevelt signed Lend-Lease into law on March 11, 1941. The anniversary of the establishment of Lend-Lease seemed like the appropriate time to revisit Churchill’s statement calling it “the most unsordid act in history” in hopes of finally stopping its continued misattribution to the Marshall Plan.


Key Facts & Information

Background

  • In April 1940, Adolf Hitler invaded and gained control over Norway, Denmark.
  • In May 1940, Winston Churchill became the British Prime Minister and appointed William Stephenson as British Security Coordination.
  • US President Franklin Roosevelt sought ways to aid Great Britain against losing the war against the Germans. Roosevelt supplied the US weapons and ammunition and authorized its shipment to Britain.
  • In June 1940, during the outbreak of war in Europe, as part of the “Cash and Carry Program”, the British were allowed to buy non-war materials with gold.
  • In September 1940, The Tizard Mission (British Technical and Scientific Mission) was sent to the United States.
  • On December 17, 1940, Roosevelt made a speech to the American republic, proclaiming the USA would be the Arsenal of Democracy. Roosevelt also proposed the selling of munitions to Britain and Canada.
  • In early February 1941, it was revealed on a poll made by the George H. Gallup’s organisation that only 22% were unqualifiedly against President Roosevelt’s proposal and 54% of Americans were in favor of giving aid to Britain.
  • In February 1941, 69% of Democrats were in favor of the lend-lease act, whereas only 38% of Republicans favored the bill.
  • In March 1941, 79% of Senate Democrats voted “aye” and 37% Senate Republicans sided with the passing of the Lend-Lease Act.

The Lend-Lease Act of 1941

  • On March 11, 1941, President Franklin Roosevelt signed the Lend Lease bill into law which permitted the US to “sell, transfer title to, exchange, lease, lend, or otherwise dispose of, to any such government whose defense the President seems vital to the defense of the United States.”
  • The Lend Lease Act was extended to China, Commonwealth countries and the Soviet Union. It was intended to assist the nations that were then fighting the Axis powers (Germany, Japan, and Italy).
  • The United States provided goods and services in the fight against Nazi Germany and Italy. In return, it’s allies would repay the United States by returning the goods or using them in support of the cause, or by a similar transfer of goods.
  • “Destroyers for Bases” called for 50 American US Navy destroyers to be exchanged for the use of 8 British Naval bases along the North Atlantic coast.
  • On August 14, 1941, US President Franklin D. Roosevelt and British Prime Minister Winston Churchill agreed to defend democracy, economic advancement, and free trade. This agreement was known as the Atlantic Charter, a joint declaration at Naval Station Argentia.
  • On September 4, 1941, the USS destroyer greer (DD-145) was fired at by a German submarine (U-boat) U-652 in North Atlantic.
  • On September 11, 1941, on a national radio address, Roosevelt ordered the US navy to fire on German warships in the West Atlantic.
  • In December 7, 1941, the master lend-lease agreement was signed by the United States and fourteen of its allies.
  • The Act made it possible to lend or lease supplies to any country whose interests were vital.
  • Article VII of the master lend-lease act was drafted by the negotiators stating that:
    “the terms and conditions thereof shall be such as not to burden commerce between two countries but to promote mutually advantageous economic relations between them and the betterment of world-wide economic matters.”
  • It provided that the US could ship weapons, food, or equipment to any country that was struggling against the Axis countries (Germany, Italy, and Japan).
  • The British provided supplies and bases for American forces, gave them Rolls Royce Merlin engines for the P-51 Mustang fighter, atomic bomb information, and proximity fuze blueprints.

Commonwealth and Administration

  • The opposition ceased when Adolf Hitler violated the terms of the Molotov-Ribbentrop pact.
  • The USSR benefited from the US war materials during the war against the German Wehrmacht.
  • The United States approved $1 billion in Lend-Lease loans to the Soviet Union, with return terms of 5 years starting after the war was over, with no interest or repayments before then.
  • Lauchlin Bernard Currie, Administrative Assistant to President Franklin Roosevelt, was a Soviet spy, and was deputy for Lend-Lease aid to the Chinese KMT (Kuomintang). Currie was sent to China hoping he would enable the Chinese to tie down large Japanese armies.
  • Hugh Woods and William L. Boyd of the China National Air Corporation (CNAC) made the first flight over the Hump, the China-Burma air supply route.
  • Franklin Roosevelt informed George Marshall that he was going to approve the supplies Chiang Kai Shek requested without any caveats, which included 500 planes and 10,000 tons of supplies to be delivered over the Hump.
  • President Roosevelt appointed Edward R. Stettinius as Steel Executive Head and, on September 1943, Stettinius was promoted to Under Secretary of State.
  • Harry Lloyd Hopkins was the Chief diplomatic adviser and troubleshooter for Roosevelt. During World War II, he was assigned to deal with Soviet officials.
  • Hopkins’ counterpart, Anastas Mikoyan was responsible for USSR’s Lend Lease.

Phases of deliveries to the Soviet Union

  • From June 22 to September 30, 1941, the pre-Lend Lease period allowed for gold and mineral payments.
  • During the first protocol period from 1 October 1941 to 30 June 1942, the USSR was supplied with 400 aircraft, 500 tanks, and 10,000 trucks a month with US credit financing. These supplies were manufactured and delivered by the UK.
  • During the second protocol period from 1 July 1942 to 30 June 1943 (signed 6 October 1942), the US and Britain were committed to the delivery of the massive tonnage of allied shipments to the USSR.
  • The third protocol period was from 1 July 1943 to 30 June 1944 (signed 19 October 1943).
  • The fourth protocol period from 1 July 1944 to May 12, 1945 has continued deliveries for the duration of the war with Japan under the “Milepost” agreement.
  • American Lend-lease deliveries to Russia:
    • 400,000 trucks, 12,000 tanks, 13,000 locomotives and railway cars, 32,000 motorcycles, 8,000 anti-aircraft cannons and machine-guns, 400,000 metal cutting machine tools, 40,000 field radios, 135,000 submachine guns, 400 radar systems, 300,000 tons of explosives, 2,670,371 tons of petroleum products (gasoline and oil), 4,478,116 tons of foodstuffs (canned meats, sugar, flour, salt, etc.), and 9,920 flat cars.
    • On June 27, 1942, with the Anglo-Soviet Military Supplies Agreement, the military aid during the war was entirely free of charge.
    • The first British aid convoy set off along the dangerous Arctic sea routes to Murmansk. They were known as the Arctic convoys. The returning ships carried the gold that the USSR was using to pay the US.Delivered aids were: 3,000+ Hurricanes, 4,000 other aircrafts, 2,560 bren carriers, 5,000+ anti-tank guns, 5,218 tanks, 4,020
    • ambulances and trucks, 1,721 motorcycles, 323 machinery trucks, £1.15bn worth of aircraft engines, and 15 million pairs of boots. In total, it was 4 million tonnes of war materials.

    Canadian aid to the Allied effort

    • For shipment to Britain, China, and Russia, President Roosevelt allowed Lend-Lease to purchase supplies from Canada.
    • During the war, Canada gave Britain gifts totaling $3.5 billion to buy Canadian food and war supplies with a $1 billion zero-interest loan.
    • For 99 years, the Gander Air Base (RCAF Station Gander) located at Gander International Airport, built in 1936 in Newfoundland, was leased by Britain to Canada.
    • In 1949, the lease became redundant when Newfoundland became Canada’s tenth province.

    Anglo-American Loan

    • After the cut-off date, the US charged them at a 90% discount because the Congress had not authorized the gift of supplies delivered to the USSR.
    • Large quantities of undelivered goods and supplies were in transit when the Lend Lease Act was terminated.
    • The Lend Lease items remaining were sold at 10% nominal value with an initial loan value of £1.075 billion to Britain.
    • The payment was at 2% interest starting in 1951, with five years of deferred payments.
    • On December 29, 2006, the final payment of $83.3 million was made.

    Lend Lease Termination

    • In September 1945, US President Harry S. Truman terminated the Lend Lease Act.
    • The USSR and Britain was severely upset with the unexpected termination.
    • Truman ended the program for postwar relief and loans.
    • In 1945, the US loaned $3.75 billion to Britain and $500 million to France at 2% interest.
    • Stalin requested for a $6 billion loan, but President Truman rejected his request.
    • Reverse Lend Lease from the UK to the US included the following:
      • £163,944,000 shipping services
      • £48,496,000 inland transport
      • £222,800,000 UK capital installations
      • £117,341,000 US Air Force airfields

      Effects Of The Act:

      • During the war, the US continued to aid the Allied Power countries (United Kingdom, France, Soviet Union, and China).
      • Many nations had taken advantage of the Lend Lease act to receive more supplies from the US.
      • The Soviet Red army had received from America two-thirds of their Dodges and Studebakers trucks.
      • The USSR had received 2,000 locomotives.
      • The Lend Lease had sent the USSR 4,292 British tanks, 3,734 American tanks, and 1,400 Canadian tanks.
      • Stalin focused on the USSR’s need for food and industrial supplies (metals) as the USSR had their own factories to produced their own battle equipment.

      Lend-Lease Act Worksheets

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      • Lend-Lease Act Facts
      • The Lend-Lease Act of 1941
      • Big Three Allied Forces
      • Lend-Lease Allied and Axis Countries
      • Effects of Lend-Lease Act
      • Lend-Lease Act Word Search
      • Political Cartoon Analysis
      • Vocabulary
      • Web Mapping
      • Poster Making

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      The Lend-Lease Act

      The Senate passed a $5.98 billion supplemental Lend-Lease Bill on October 23, 1941, bringing the United States one step closer to direct involvement in World War II. The Lend-Lease Act, approved by Congress in March 1941, had given President Roosevelt virtually unlimited authority to direct material aid such as ammunition, tanks, airplanes, trucks, and food to the war effort in Europe without violating the nation&rsquos official position of neutrality. The supplemental bill brought the amount of available aid to nearly $13 billion. This aid was intended to assist in the defense of nations whose security was deemed vital to the security of the United States. President Roosevelt, who favored U.S. intervention in WWII, advocated creating the program as a way to provide indirect support for the Allies without engaging the U.S. in a war for which there was not yet overwhelming public support.

      Lend-Lease to Britain. English Girls, Members of the Auxiliary Territorial Service, Move Armfuls of American Rifles Just Arrived from the United States under Lend-Lease. United States. Office of War Information, [between 1940 and 1946]. Farm Security Administration/Office of War Information Black-and-White Negatives. Prints & Photographs Division

      &ldquoAnd so our country is going to be what our people have proclaimed it must be-the arsenal of democracy.&rdquo

      President Franklin D. Roosevelt, Speech on Lend-Lease Act, March 15, 1941

      The United States formally entered the war itself in December 1941, following the Japanese attack on Pearl Harbor.

      President Roosevelt Signing the Declaration of War against Japan. United States. Office of War Information, Dec. 1941. Farm Security Administration/Office of War Information Black-and-White Negatives. Prints & Photographs Division

      Initially created to help Great Britain, within months, the Lend-Lease program was expanded to include China and the Soviet Union. By the end of the war, the United States had extended over $49 billion in Lend-Lease aid to nearly forty nations.

      Lend-Lease to Britain. A Shipment of 155 mm. Howitzers Just Arrived from the United States under Lend-Lease is Prepared for Service at an Ordnance Depot in England. United States. Office of War Information, [between 1940 and 1946]. Farm Security Administration/Office of War Information Black-and-White Negatives. Prints & Photographs Division

      Baby Betty Rothwell Loves her Orange Juice. She was very thin and ailing until Lend-Lease Concentrated Orange Juice arrived in England&hellip. United States. Office of War Information, April 1943. Farm Security Administration/Office of War Information Black-and-White Negatives. Prints & Photographs Division


      The Lend-Lease Act of 1941

      Seeking to move the nation towards a more active role in the conflict, Roosevelt wished to provide Britain with all possible aid short of war. As such, British warships were permitted to make repairs in American ports and training facilities for British servicemen were constructed in the U.S. To ease Britain's shortage of war materials, Roosevelt pushed for the creation of the Lend-Lease Program. Officially titled An Act Further to Promote the Defense of the United States, the Lend-Lease Act was signed into law on March 11, 1941.

      This act empowered the president to "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." In effect, it allowed Roosevelt to authorize the transfer of military materials to Britain with the understanding that they would ultimately be paid for or returned if they were not destroyed. To administer the program, Roosevelt created the Office of Lend-Lease Administration under the leadership of former steel industry executive Edward R. Stettinius.

      In selling the program to a skeptical and still somewhat isolationist American public, Roosevelt compared it to loaning a hose to a neighbor whose house was on fire. "What do I do in such a crisis?" the president asked the press. "I don't say. 'Neighbor, my garden hose cost me $15 you have to pay me $15 for it' - I don't want $15 — I want my garden hose back after the fire is over." In April, he expanded the program by offering lend-lease aid to China for their war against the Japanese. Taking swift advantage of the program, the British received over $1 billion in aid through October 1941.


      FDR approves Lend-Lease aid to the USSR

      On October 30, 1941, President Roosevelt, determined to keep the United States out of the war while helping those allies already mired in it, approves $1 billion in Lend-Lease loans to the Soviet Union. The terms: no interest and repayment did not have to start until five years after the war was over.

      The Lend-Lease program was devised by President Roosevelt and passed by Congress on March 11, 1941. Originally, it was meant to aid Great Britain in its war effort against the Germans by giving the chief executive the power to “sell, transfer title to, exchange, lease, lend, or otherwise dispose of” any military resources the president deemed ultimately in the interest of the defense of the United States. The reasoning was: If a neighbor was successful in defending his home, the security of your home was enhanced.

      Although the Soviet Union had already been the recipient of American military weapons, and now had been promised $1 billion in financial aid, formal approval to extend the Lend-Lease program to the USSR had to be given by Congress. Anticommunist feeling meant much heated debate, but Congress finally gave its approval to the extension on November 7.

      By the end of the war, more than $50 billion in funds, weapons, aircraft, and ships had been distributed to 44 countries. After the war, the Lend-Lease program morphed into the Marshall Plan, which allocated funds for the revitalization of 𠇏riendly” democratic nations𠅎ven if they were former enemies.


      Watch the video: The Difference Between Cash u0026 Carry u0026 Lend-Lease: Accounting u0026 Finance