System promulgated by Pres. Franklin Roosevelt to give aid to U.S. allies in World War II. Faced with Britain's inability to pay cash for war materials and food, as required by U.S. law, Roosevelt asked Congress to allow repayment “in kind or property” from countries vital to U.S. defense. The Lend-Lease Act was passed in March 1941, despite arguments that it led the U.S. closer to war. Much of the $49 billion in aid went to British Commonwealth countries; the Soviet Union, China, and 40 other countries also received assistance. U.S. troops stationed abroad received about $8 billion in aid from the Allies.
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Lend-Lease (Public Law 77-11) was the name of the program under which the United States of America supplied the United Kingdom, the Soviet Union, China, France and other Allied nations with vast amounts of war materiel between 1941 and 1945 in return for, in the case of Britain, military bases in Newfoundland, Bermuda, and the British West Indies. It began in March 1941, over 18 months after the outbreak of the war in September 1939.
A total of $50.1 billion (equivalent to nearly $700 billion at 2007 prices) worth of supplies were shipped: $31.4 billion to Britain, $11.3 billion to the Soviet Union, $3.2 billion to France and $1.6 billion to China. Reverse Lend Lease comprised services (like rent on air bases) that went to the U.S. It totaled $7.8 billion, of which $6.8 billion came from the British and the Commonwealth. Apart from that, there were no repayments of supplies that arrived before the termination date, the terms of the agreement providing for their return or destruction. (Supplies after that date were sold to Britain at a discount, for £1,075 million, using long-term loans from the U.S.) Canada operated a similar program that sent $4.7 billion in supplies to Britain and Soviet Union.
This program is seen as a decisive step away from American non-interventionism since the end of World War I and towards international involvement. In sharp contrast to the American loans to the Allies in World War I, there were no provisions for postwar repayments. However, some historians are of the opinion that it was an attempt to bolster Britain and the other allies as a buffer to prevent the necessity of America becoming involved against Nazi Germany.
Earlier, there was an entirely different program in 1940, the Destroyers for Bases Agreement whereby 50 USN destroyers were transferred to the Royal Navy and the Royal Canadian Navy in exchange for basing rights in the Caribbean and Newfoundland.
Everett Dirksen, at the time a Republican U.S. Representative, was able to secure the passage of an amendment to the Lend-Lease bill by introducing the resolution while 65 of the House's Democrats were at a luncheon. Section (3)(c) of the Act thus provided that "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 subsection (a)"
Lend-Lease aid to Russia was nominally managed by Stettinius. Roosevelt's Soviet Protocol Committee, dominated by Harry Hopkins and General John York, who were totally sympathetic to the provision of "unconditional aid." Until 1943, few Americans objected to Russian aid.
Lend-Lease was a critical factor in the eventual success of the Allies in World War II, particularly in the early years when the United States was not directly involved and the entire burden of the fighting fell on other nations, notably those of the Commonwealth and, after June 1941, the Soviet Union. Although Pearl Harbor and the Axis Declarations of War brought the US into the war in December 1941, the task of recruiting, training, equipping U.S. forces and transporting them to war zones could not be completed immediately. Through 1942, and to a lesser extent 1943, the other Allies continued to be responsible for most of the fighting and the supply of military equipment under Lend-Lease was a significant part of their success. In 1943-44, about a fourth of all British munitions came through Lend-Lease. Aircraft (in particular transport aircraft) comprised about one-fourth of the shipments to Britain, followed by food, land vehicles and ships.
Even after the United States forces in Europe and the Pacific began to reach full-strength in 1943–1944, Lend-Lease continued. Most remaining allies were largely self-sufficient in front line equipment (such as tanks and fighter aircraft) by this stage, but Lend-Lease provided a useful supplement in this category even so, and Lend-Lease logistical supplies (including trucks, jeeps, landing craft and, above all, the Douglas C-47 transport aircraft) were of enormous assistance.
Much of the aid can be better understood when considering the economic distortions caused by the war. Most belligerent powers cut back on production of nonessentials severely, concentrating on producing weapons. This inevitably produced shortages of related products needed by the military or as part of the military/industrial economy.
For example, the USSR was highly dependent on trains, yet the desperate need to produce weapons meant that only about 92 locomotives were produced in the USSR during the entire war. In this context, the supply of 1,981 US locomotives can be better understood. Likewise, the Soviet air force was enhanced by 18,700 aircraft, which amounted to about 14% of Soviet aircraft production (19% for military aircraft).
Although most Red Army tank units were equipped with Soviet-built tanks, their logistical support was provided by hundreds of thousands of US-made trucks. Indeed by 1945 nearly two-thirds of the truck strength of the Red Army was U.S.-built. Trucks such as the Dodge ¾ ton and Studebaker 2.5 ton, were easily the best trucks available in their class on either side on the Eastern Front. US supplies of telephone cable, aluminium, canned rations and fur boots were also critical, the latter providing a crucial advantage in the winter defence of Moscow.
Lend Lease was a critical factor that brought the US into the war, especially on the European front. Hitler cited the Lend-Lease program and its significance in aiding the Allied war effort when he declared war on the US on 11 December 1941.
The original size of the debt and repayment terms (including deferments) can be ascertained from the debates in the Commons on 28 February 2002 and House of Lords on 8 July 2002 as recorded in Hansard:
"Bob Spink: To ask the Chancellor of the Exchequer (1) what outstanding liabilities there are to the United Kingdom of lend-lease loan facilities arranged during the Second World War; …" "Ruth Kelly: The information is as follows..." "Under the Agreement, the loans would be repaid in 50 annual installments commencing in 1950. However the Agreement allowed deferral of annual payments of both principal and interest if necessary because of prevailing international exchange rate conditions and the level of the United Kingdom's foreign currency and gold reserves. The United Kingdom has deferred payments on six occasions. Repayment of the war loans to the United States Government should therefore be completed on 31 December 2006, subject to the United Kingdom not choosing to exercise its option to defer payment. As at 31 March 2001, principal of £243,573,154 [$346,287,953 at the exchange rate on that day] was outstanding on the loans provided by the United States Government in 1945. The Government intends to meet its obligations under the 1945 Agreement by repaying the United States Government in full the amounts lend [sic] in 1945."Similarly, Hansard records from a debate that took place in the House of Lords on 8 July 2002:
"Lord Campbell of Croy: My Lords, is this payment part of the lend-lease scheme under which the United States supplied munitions, vehicles and many other requirements including food and other provisions that were needed badly by us in the last part of the war? Lord McIntosh of Haringey: My Lords, I referred to lend-lease in the context of the generosity of the United States throughout that period. However, the debt that we are talking about now is separate; it was negotiated in December 1945.Lord Stoddart of Swindon: My Lords, will the noble Lord remind me as to exactly how much the loan was, and how much we have repaid since then in principal and interest?Lord McIntosh of Haringey: My Lords, the loan originally was £1,075 million, of which £244 million is outstanding. The basis of the loan is that interest is paid at 2 per cent. Therefore, we are currently receiving a greater return on our dollar assets than we are paying in interest to pay off the loan. It is a very advantageous loan for us."
American deliveries to the Soviet Union can be divided into the following phases:
|Building equipment valued||$10,910,000|
|Railroad freight cars||11,155|
|Food supplies||4,478,000 tons|
|Machines and equipment||$1,078,965,000|
|Non-ferrous metals||802,000 tons|
|Petroleum products||2,670,000 tons|
|Army boots||15,417,001 pairs|
Delivery was via the Arctic Convoys, the Persian Corridor, and the Pacific Route. The Pacific Route was used for about half of Lend-Lease aid: by convoy from the US west coast to the Soviet Far East, via Vladivostok and the Trans-Siberian railway. After America’s entry in the war, only Soviet (or Soviet-flagged) ships were used, and there was some interference by Japan with them. The Alaska-Siberia Air Route, known as Alsib, was used for air deliveries and passengers from 7 October 1942.
"The cooperation that was built up with Canada during the war was an amalgam compounded of diverse elements of which the air and land routes to Alaska, the Canol project, and the CRYSTAL and CRIMSON activities were the most costly in point of effort and funds expended. [...] The total of defense materials and services that Canada received through lend-lease channels amounted in value to approximately $419,500,000. [...] Some idea of the scope of economic collaboration can be had from the fact that from the beginning of 1942 through 1945 Canada, on her part, furnished the United States with $1,000,000,000 to $1,250,000,000 in defense materials and services. [...] Although most of the actual construction of joint defense facilities, except the Alaska Highway and the Canol project, had been carried out by Canada, most of the original cost was borne by the United States. The agreement was that all temporary construction for the use of American forces and all permanent construction required by the United States forces beyond Canadian requirements would be paid for by the United States, and that the cost of all other construction of permanent value would be met by Canada. Although it was not entirely reasonable that Canada should pay for any construction that the Canadian Government considered unnecessary or that did not conform to Canadian requirements, nevertheless considerations of self-respect and national sovereignty led the Canadian Government to suggest a new financial agreement. [...] The total amount that Canada agreed to pay under the new arrangement came to about $76,800,000, which was some $13,870,000 less than the United States had spent on the facilities.