lend-lease

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lend-lease,

arrangement for the transfer of war supplies, including food, machinery, and services, to nations whose defense was considered vital to the defense of the United States in World War II. The Lend-Lease Act, passed (1941) by the U.S. Congress, gave the President power to sell, transfer, lend, or lease such war materials. The President was to set the terms for aid; repayment was to be "in kind or property, or any other direct or indirect benefit which the President deems satisfactory." Harry L. Hopkins was appointed (Mar., 1941) to administer lend-lease. He was replaced (July) by Edward R. Stettinius, Jr., who headed the Office of Lend-Lease Administration, set up in Oct., 1941. In Sept., 1943, lend-lease was incorporated into the Foreign Economic Administration under Leo T. Crowley. In Sept., 1945, it was transferred to the Dept. of State. Lend-lease was originally intended for China and countries of the British Empire. In Nov., 1941, the USSR was included, and by the end of the war practically all the allies of the United States had been declared eligible for lend-lease aid. Although not all requested or received it, lend-lease agreements were signed with numerous countries. In 1942, a reciprocal aid agreement of the United States with Great Britain, Australia, New Zealand, and the Free French was announced. Under its terms a "reverse lend-lease" was effected, whereby goods, services, shipping, and military installations were given to American forces overseas. Other nations in which U.S. forces were stationed subsequently adhered to the agreement. On Aug. 21, 1945, President Truman announced the end of lend-lease aid. Arrangements were made—notably with Great Britain and China—to continue shipments, on a cash or credit basis, of goods earmarked for them under lend-lease appropriations. Total lend-lease aid exceeded $50 billion, of which the British Commonwealth received some $31 billion and the USSR received over $11 billion. Within 15 years after the termination of lend-lease, settlements were made with most of the countries that had received aid, although a settlement with the USSR was not reached until 1972.

Bibliography

See W. F. Kimball, The Most Unsordid Act (1969).

Lend-Lease

 

a system whereby the United States of America lent or leased armaments, ammunition, strategic raw materials, foodstuffs, and various goods and services to the Allied countries of the anti-Hitler coalition during World War II. The Lend-Lease Act was adopted by the US Congress on Mar. 11, 1941. Initially deliveries for lend-lease were to cease on June 30, 1943, but the act was extended yearly until June 30, 1946. The announcement on the discontinuance of deliveries under the LendLease Act was made by the USA on Aug. 21, 1945 (deliveries to Kuomintang China continued for a number of years).

From Mar. 11, 1941, until Aug. 1, 1945, lend-lease cost the USA $46 billion (13 percent of all US military expenditures during the war years and more than 50 percent of exports). Deliveries under lend-lease to the British Empire (basically to Great Britain) amounted to $30,269,000,000, with $9.8 billion going to the USSR, $1.406 billion to France, $631 million to China, $421 million to Latin American countries, and $424 million to other countries. The USA in turn received $7.3 billion in goods and services in repayment of the lend-lease deliveries from the Allies during the war years. The lend-lease agreements stipulated the basic principles for the settlement of further accounts: materials destroyed, lost, or used during the war are not subject to repayment; the property remaining after the war and suitable for civilian use must be paid for in full or in part under long-term credit repayment conditions; unused military materials remaining in the country that received them were subject to a demand for their return by the US government (although it was understood that the government would not exercise this right); and equipment that was unfinished at the end of the war and materials located in the warehouses of the US government agencies could be acquired by the countries through American longterm credit facilities.

The deliveries made under lend-lease spurred US production during the war and promoted the enrichment of the monopolies at the expense of the government. After the war, the USA used lend-lease and the settlement of lend-lease accounts for the economic and political penetration of many countries of Europe and Asia.

On Oct. 15, 1945, a Soviet-American agreement on deliveries to the Soviet Union was signed under long-term credit conditions to cover equipment already on hand or on order under lend-lease but not yet delivered (the total amount being $244 million). However, in December 1946 the USA, which had already begun to display open hostility toward the USSR, unilaterally discontinued operations under the agreement. In 1947 and in 1960 the USSR and the USA undertook negotiations to settle accounts opened under lend-lease. The USSR returned some property (for example, seagoing ships) to the USA and declared its willingness to make the necessary payments for the rest. But the parties could not agree on the amount of the compensation. The USA asked $1.3 billion, overestimating expenditures in comparison to accounts with other countries (for example, with Great Britain). In addition, the American government refused to discuss or take appropriate action on the settlement of accounts and on the normalization of economic and trade relations between the USSR and the USA, questions dealt with in the lend-lease agreement, as well as the question of allocating credits to the USSR. On the initiative of the USA, the negotiations were broken off in 1960. They were renewed in 1972. The USA agreed to cut significantly the amount of payments and to link them to the ongoing development of economic relations of the parties concerned. On Oct. 18, 1972, three agreements between the USSR and the USA were simultaneously signed in Washington, dealing with settlement of lend-lease accounts, the development of trade, and the mutual granting of credits.

D. ASANOV