Chapter 26: The End of the Common Pool
American moves to restrict the scope of military lend-lease to Britain in the latter stages of the war with Germany fall into better perspective when viewed in the light of plans for a more drastic curtailment after V-E Day. In American military planning for the period between the defeat of Germany and the defeat of Japan (in U.S. terminology Period I, in British Stage II), the basic assumption was that the common pool arrangement would no longer apply, even theoretically.
It was assumed that other nations would support their own war effort against Japan to the maximum extent possible and that lend-lease would be confined to quantities absolutely necessary to meet marginal requirements of forces actively engaged against Japan, with decisions on allocations to be made unilaterally by the JCS. This proposed policy was in keeping with the feeling, openly expressed in Congress and strong in the military services, that during the last phase of the war the American taxpayer should be relieved as far as possible of the burden imposed by foreign aid.1 Within the AAF and the Navy there was also the feeling, scarcely concealed, that curtailment of lend-lease would be an effective method of limiting British participation in the main drive against Japan in the Pacific where neither General Arnold nor Admiral King wished to have anything more than token British forces.
The JCS “Corollary Principle”
When, in the fall of 1943, the ASF began compilation of a special Army Supply Program to cover requirements for the first year of a one-front war, the formula adopted for the lend-lease portion was that after V-E Day shipments should be made only to China, India, Australia, New Zealand, the USSR (to fulfill the Third Protocol), and Latin American countries; those to inactive areas in Europe, Africa, and the Middle East would be stopped. This formula, approved by OPD, was recognized as being not entirely realistic, since much
would depend on both Soviet and British intentions and plans with regard to the war against Japan. And the International Division was specifically forbidden, until May 1944, to undertake negotiations with lend-lease nations in order to get a better idea of their post V-E Day needs.2
Meanwhile, the AAF proposed gradual curtailment of aircraft production as the day of the defeat of Germany approached, and got JCS approval for the policy. It would serve, as one air officer bluntly put it, to eliminate surpluses—“the best method of anticipating Russian and British requests, and thus in turn limiting their potential capabilities in the Pacific.”3 As a corollary, General Arnold asked the JCS on 15 March 1944 to adopt a policy stating that:
Upon the defeat of Germany, Lend-Lease military aircraft and related equipment should be assigned only to those nations who will effectively employ their air forces against Japan and who do not possess or have access to adequate production facilities of their own to maintain that part of the air forces so equipped.4
Since there seemed little point in adopting such a policy for aircraft alone, the Joint Logistics Committee was instructed to produce a broader set of principles to cover the entire field of military lend-lease. The committee’s report, presented on 2 May 1944, called for a “strict policy on assignments of Lend-Lease material” to be administered by the JCS rather than the MAB:
a. Assignment of Lend-Lease munitions will be based on the assumption that after the defeat of Germany, each Allied Nation will maintain its forces to the fullest extent from its own stocks and production, and will make full use of such forces against Japan in so far as they can be effectively employed in accordance with our agreed strategy.
b. Upon the defeat of Germany, assignment of Lend-Lease munitions will be limited to those materials which are not available to the Allied Nations concerned, and which are necessary to support that portion of the forces of such nations as, in the opinion of the United States Joint Chiefs of Staff, can and will be profitably employed against Japan in furtherance of our agreed strategy.
c. It is contemplated that on the request of the United States Government, Allied nations will make available for return immediately after the defeat of Germany any munitions furnished by the United States which are not required by such nations for their use against Japan in accordance with our agreed strategy and which are desired by the United States.5
The first of these principles did provide that lend-lease should be used to promote a maximum and not a minimum participation by Allied countries in operations against Japan—a viewpoint
championed by General Somervell. Yet even Somervell, although he recognized some of the problems of rehabilitation that Britain, the USSR, and other nations would face, was reluctant to suggest that the American contribution to their military effort against Japan might be increased to ease the burden, and neither this question nor that of the support of occupation armies was even discussed in the JCS.6
When the JLC report was considered by the JCS on 9 May, decision was deferred mainly because Admiral Leahy felt the timing was wrong as it was just in advance of OVERLORD and a Soviet drive on the Eastern Front. The JCS did agree at that meeting on a memorandum to the President informing him of the proposed gradual curtailment of aircraft production and asking him to approve the “corollary principle” as a guide to future procurement planning for Period I: “That Lend-Lease munitions will be limited to materials not available to nations concerned and which can be profitably employed against Japan in accordance with agreed strategy.”7 Roosevelt approved on the following day, though later events indicate that he was hardly aware of the full implications. Then on 30 May 1944 the JCS definitely put their seal of approval on the first two JLC recommendations and tentatively accepted the third with some minor changes, instructing the JLC at the same time to explore further this matter of return of lend-lease munitions on the defeat of Germany.8
The JCS policy, apparently accepted as national policy, rested on the dubious assumption that military lend-lease could be treated as a separate entity apart from the broader problem of the role American aid should play in the readjustment and rehabilitation of European economies following the defeat of Germany. Neither the State Department nor the Foreign Economic Administration had been consulted during its formulation.
Of greater significance, the military leaders had taken no cognizance at all of the plight of their wartime partner, Great Britain, a country nearing exhaustion after five years of all-out war and dependent upon U.S. aid if it was to make any kind of start during Period I on the extremely difficult adjustment of its economy.
By tight mobilization of all resources, human and material, and with the aid
of lend-lease and Canadian mutual aid, the United Kingdom had been able to generate military power beyond its ostensible capabilities. It was achieved at the expense of disruption of Britain’s normal economy and by imposing on the British people sacrifices that could not be borne indefinitely. Both men and women were impressed into national service; hours of labor averaged more than fifty per week; higher taxes were imposed than anywhere else in the world; capital equipment deteriorated without normal maintenance or replacement; the aerial blitz and the buzz bombs took their toll of houses, industrial plants, and human lives. The British by 1944 were a war-weary people, accepting their sacrifices in the hope of better things to come. Yet the decision to devote all resources to the war without regard to economic consequences threatened to postpone indefinitely the realization of those better things.
Britain’s prewar position had been built on overseas trade and overseas investment, and both had to be sacrificed during the war in the interests of survival. Before lend-lease, the British had exhausted almost all their dollar reserves, real and potential, to obtain supplies from the United States and Canada. A large part of British overseas investments and holdings, a major source of prewar income, was liquidated. Lend-lease brought a measure of relief, but it could not, nor was it intended to, restore assets already lost. Moreover, it led to a further drastic reduction in British export trade in order that all British resources could be concentrated on the war effort. It did not end the drain on British financial resources. The United Kingdom continued to pay in sterling for certain imports from some of the Dominions and colonies, for supplies and services for British troops in those areas, and for much of the reciprocal aid furnished American forces in various parts of the Empire, in India, and in countries of the Middle East and Africa. Without the normal offset of exports to balance these payments, British sterling assets in many areas of traditional British influence were turned to liabilities.
The British therefore faced a bleak outlook in the postwar world, even if they could recoup some of their losses during the last phase of the war. This, at least, they hoped to do, and their program for what they designated as Stage II called for some easement of civilian living standards, some rebuilding of capital equipment, and some expansion of exports (to two-thirds the 1938 level). These goals, the British Cabinet knew, could not be attained without continuation of American lend-lease on a generous scale if British forces were to participate in the war against Japan and fulfill their continuing commitments in the occupation of Germany and the maintenance of order in the Middle East. Neither the Prime Minister nor the Opposition had any intention of allowing either of these obligations to go by default.9
In their own planning for Stage II, consequently, the British presupposed that civilian lend-lease would continue on at least as generous a basis as during the two-front war, and that American military supplies would continue to be furnished in at least as large a proportion of total British requirements. Yet they, like the Americans, did their
planning in secret and considered the truth about their own plight as information too dangerous to be communicated to anybody. There seems to have been little appreciation of the true nature of the British position at any level in Washington. Even Secretary of the Treasury Henry Morgenthau, a long-standing advocate of British aid, viewed with suspicion the gradual growth of British dollar reserves to the point where, in early 1944, they had reached over a billion dollars—large in American eyes perhaps, but considered by the British to be but meager insurance against the day when they would have to pay for their imports from the United States. In spring 1944, Treasury and FEA, with support from the Army, undertook to reduce those dollar balances by removing industrial equipment, machine tools, and other items having possible postwar uses from lend-lease, making the British pay for them in cash. The British were also asked to include under reciprocal aid raw materials and petroleum products that they procured from their colonies and from such independent nations as Iran and Saudi Arabia, items that the Americans had themselves formerly paid for in cash. Under the circumstances, the British could hardly refuse.10
All these straws in the wind undoubtedly disturbed the British, but they were not aware of the policy adopted by the JCS. After the President had given his approval to that policy, however, the ASF was finally given the go-ahead signal for negotiations on lend-lease requirements to be included in the special ASP for Period I. On 18 May 1944 Somervell asked General Macready for the British figures for the first year of Period I, assuming that it would begin 1 October 1944. “The requirements so stated,” he wrote, “should be for the support of British forces which would be used in the war against Japan.”11 The British promised, with evident reluctance, to try to assemble such figures, protesting all the while that there were too many uncertainties, strategic and otherwise, about Stage II to arrive at more than tentative conclusions. As for the basis on which Somervell proposed that the requirements be calculated, British spokesmen asserted they were “instructed by London to say that we are not authorized to accept such a policy,” that it might “render it impossible for us to exert against Japan the full military effort of which we might be capable.”12
Subsequent conferences with the British Army Staff produced no agreement and the requirements finally presented in late July 1944 were, in the words of Sir Walter Venning, “based on assessment of our entire needs during Stage II and not confined to operations in any particular theater of war.” This basis, Venning insisted, had to be used if the British were to carry out cutbacks in military production requisite to making “some approach to a level of existence which could be regarded as even tolerable in a civilized country.”13 The final
British presentation the ASF found too close to the program presented earlier on the assumption that the war with Germany would continue. “We do not anticipate any serious question as to our ability to produce the quantities requested,” General Edgerton of the International Division admitted, “the question is entirely one of the validity of the requirements in the light of U.S. policy set forth in J.C.S. 771.”14
The Americans refused to accept the British requirements as stated and the matter soon came to an impasse. Finally, on 21 August, General Lutes returned the British statement to Sir Walter Venning and the ASF went ahead to make its own approximate calculations of British needs for the war with Japan. There the matter rested until shortly before the President and his military advisers departed for Quebec to meet with the British in September 1944.15
The President Intervenes
On 9 September, the day before his departure for Quebec, Roosevelt abruptly called a halt to the military planning for the future of lend-lease. He wrote General Marshall:
There has been a good deal of discussion within the several Government Departments relative to our Lend-Lease policy after the collapse of Germany.
It is my wish that no Department of the Government take unilateral action in regard to any matters that concern Lease Lend, because the implications of such action are bound to affect other Departments of the Government, and, indeed, our whole national policy. I am particularly anxious that any instructions which may have been issued, or are about to be issued regarding Lend Lease material or supplies to our allies after the collapse of Germany be cancelled and withdrawn. I intend to give instructions to all Departments relative to the Lease Lend policy of this government at an early date. ...16
According to the best information the War Department could obtain, the State Department had learned of tentative orders issued by the Transportation Corps halting lend-lease shipments to Europe on V-E Day and had protested through Hopkins to the President. The President, having been apprised unofficially of the British position, had decided he must take a strong hand.17 In any case, the JCS had to recognize that this directive rendered Roosevelt’s approval of the “corollary principle” in May a dead letter, and all JCS papers on the subject were withdrawn along with all the various tentative instructions issued by the ASF.18
The sequel followed at Quebec a few days later. The British had taken their position in negotiations with the ASF during July and August in anticipation of a direct appeal from the Prime Minister to the President. At Quebec Mr. Churchill made that appeal, marshaling
all the powers of his rhetoric and baring every secret of the British financial balance sheets. In the end he prevailed and the President accepted the British Stage II program in all its essentials, initialing an agreement with the Prime Minister to that effect on 14 September 1944. The British would continue to get “food, shipping, etc.” during the war with Japan to meet “reasonable needs”; lend-lease munitions would continue on such a basis as to permit “proportionate and equitable conversion” in the United States and United Kingdom; the British would be permitted to take steps to reestablish their export trade and the Americans would not impose restrictions on lend-lease supplies that would jeopardize British progress in this direction. To work out detailed plans for carrying out these agreements, a combined committee of American and British members would be formed to meet in Washington under the chairmanship of Henry Morgenthau.19
The Anglo-American committee held its meetings during October and November 1944. The official American members were Henry Morgenthau, Edward R. Stettinius, and Leo Crowley. The British delegation was headed by Lord John Maynard Keynes, Mr. Ben Smith, and Sir Ronald Campbell. A special military subcommittee was set up to consider naval, air, and ground army programs with Generals Somervell and Macready as prominent members. Initially, the War Department proposed that the basis of negotiation should be the military formula that supplies should be furnished only for the war against Japan, but Morgenthau ruled it “too rigid to fall within the general understanding reached by the President and Mr. Churchill at Quebec.” Other “reasonable needs,” Morgenthau said, must also be included.20 Under this dispensation, the military subcommittee proceeded to draw up programs for air, naval, and ground army equipment that were in general satisfactory to the British. The ground army program for the year following V-E Day was to total $828,256,066 in dollar value, a figure somewhere between the British presentation in July and the separate calculations made by the ASF. In the broader field, continuance of civilian lend-lease was agreed upon, though it was to be somewhat restricted by the further removal from lend-lease eligibility of many articles that entered into the British export trade—the price Britain had to pay for an American promise to free British exports from the restrictions of the White Paper of 1941.21
Despite this concession, the British, by all outward appearances, had won their point. The principle of proportionate and equitable conversion had been accepted. But the agreements tentatively reached were not set down in any binding documents to which both
countries subscribed. The Americans really accepted them for planning purposes only. Ground army requirements, for instance, were placed in the special Army Supply Program with the usual stipulation that assignment would depend upon strategic justification before the MAB. The British did not get what they really thought most desirable: a supply protocol on the Soviet pattern to cover the period after the defeat of Germany. This failure was to have unfortunate consequences for them.
Planning in the fall of 1944 was originally undertaken on the assumption that the war in Europe would end within a month or two. This assumption proved erroneous, and the Stage II Agreements remained on the shelf while U.S. supply agencies were absorbed in the manifold problems of continuing to support a two-front war. Attention was not specifically turned to the problem of post-V-E Day lend-lease again until February 1945. Meanwhile, in allocation of material by the MAB, the British were forced to accept many cutbacks because of the dominant strategic need of U.S. forces deployed in such large numbers in both Europe and the Pacific. While the war in Europe wore on, the Lend-Lease Act came up for its biennial renewal, and this time Congress wrote into it a proviso that lend-lease should not be used for “postwar relief, postwar rehabilitation, and postwar reconstruction” except under specific restrictions.22 The then Vice President, Harry S. Truman, played a significant role in shepherding this final version of lend-lease through the Congress.
The ailing President, meanwhile, did not issue any further instructions to follow up his “cease and desist” order of 9 September 1944 except to authorize negotiations with the USSR on a Fifth Protocol, nor did he indicate any positive confirmation of the Stage II Agreements. The ASF, therefore, when it did turn its attention to Period I planning again in February 1945, had to assume that the Presidential injunction of the previous September remained in force. Finally, on 27 March 1945 Assistant Secretary of War Robert Patterson formally asked the President to remove his prohibition on lend-lease planning, but Roosevelt died on 12 April without having answered Patterson’s letter. Five days after Roosevelt’s death, the new President, Harry S. Truman, told the War Department to go ahead with its planning; but he laid down no policy, merely intimating that the agreements reached with the British and under negotiation with the Russians should serve as guides, and instructing that any problems be taken up with Judge Fred M. Vinson, Byrnes’ successor as Director of the Office of War Mobilization and Reconversion.23
American policy thus drifted without any positive direction as V-E Day approached. The military staff once again grabbed the reins and were soon urging a return to the principles enunciated by the JCS in May 1944. The crux of the question was whether the tentative
agreements of October and November 1944 constituted official commitments. Somervell queried Morgenthau, who ruled that they did not, that they had only been accepted as “a suitable basis for this government’s budgetary and production planning.”24 Based on this assurance, when the final surrender of Germany came on 8 May 1945, the military departments were prepared to act on the assumption that further assignments of American material to Britain would be made only for active operations against Japan; the British, on the contrary, still assumed that the Stage II Agreements would go into effect.
The British were soon disillusioned by the actions of the MAB and MAC (G) in May and June 1945. Most of the material previously assigned and awaiting shipment to the United Kingdom was repossessed on 10 May. Subsequent assignments of ground equipment to the British during May and June totaled only $20 million in dollar value and were limited entirely to materials that the British could not make for themselves—such as DUKW’s, light tanks, and carbines—and that the U.S. commander in India approved as necessary for the campaign in Burma under the SEAC screening procedure. What the British considered even more serious was that assignments of almost all kinds of air matériel except special types of naval aircraft were denied mainly as a result of cutbacks in American production schedules. As of 27 June 1945, Maj. Gen. F. H. N. Davidson of the British Army staff claimed that since V-E Day only 20 percent of the quantities bid for by the British had been assigned. In several stormy sessions of the MAB, the Americans made it plain that they would not make assignments on the basis of the Stage II Agreements, but solely on that of strategic necessity, and that in applying the latter criterion they conceived that the British should produce for themselves everything of which they were in any way capable. Under this policy no allocations could be made for the later stages of the campaign in SEAC or for British operations in the final phase of the Pacific war until the operations had been specifically approved by the CCS. Thus bids for matériel for the so-called increment forces forming in the British Isles and elsewhere in the Empire for participation in the war against Japan were turned down. In addition, when queried specifically, Maj. Gen. John Y. York, acting chairman of the MAB, said that no assignments for Allied occupation forces in Germany could be made until policy on this point had been clarified.25
On 28 May 1945 Churchill cabled President Truman protesting the standstill to which the MAB had come, citing particularly the damaging effect it was having on the British air program. He told Truman of the agreement he had reached with Roosevelt at Quebec and expressed hope that these “principles your predecessor and I agreed on
... still hold.”26 Churchill’s cable arrived while a heated debate was in progress within the administration over lend-lease policy, with the service departments taking the lead in urging restriction of lend-lease to materials for the war against Japan, the civilian officials for the most part holding that the Stage II Agreements must be honored. On 15 May 1945 Secretary of War Stimson presented the War Department’s views to Judge Vinson, stipulating that certain of the British requirements already accepted in the Army Supply Program as a result of the Morgenthau committee’s work might stand, but asking that, apart from these,
matériel already in the possession or control of the British Empire be employed to the maximum possible extent in satisfaction of its requirements and that remaining requirements that may be referred to the War Department be considered for supply ... only if such requirements (1) appear necessary in order to carry out our agreed strategy, (2) are beyond the supply capabilities of the British Empire, and (3) can be obtained only from United States sources.27
After conferences with War, State, and FEA officials, Vinson replied on 13 June:
It was agreed that the tentative principles enunciated in your letter were not broad enough to cover the understanding reached between the late President and Prime Minister at Quebec. In general, it was agreed that, in accordance with those understandings, lend-lease should be furnished on a basis which would permit proportional and equitable reconversion in the United Kingdom. It was further agreed that the requirements estimated in the meetings held in October and November 1944 should be accepted as the basis for present requirements. Such estimates, however, are always subject to change in the light of strategic demands and supply considerations. I assume, of course, that the War Department’s budget requests appropriations adequate to fulfill these commitments.28
The State Department drafted a reply for the President to send to Churchill generally along this line.29 In the event the draft was never used. On 19 June, Stimson informed Vinson and the Secretary of State that the War Department budget estimates for fiscal year 1946 had not, in fact, been framed in terms of the Stage II Agreements, but instead had been based on “policies considered appropriate by the Joint Chiefs of Staff.” If Vinson’s instructions were to be carried out, Stimson said, the War Department would have to ask for additional funds.30
The JCS policies to which Stimson referred had not in reality taken final shape, but their general tenor was already sufficiently clear to justify the secretary’s statement. On 11 May General Arnold asked the JCS to reaffirm the policy adopted a year earlier and withdrawn at Roosevelt’s direction. In the Joint Logistics Committee this recommendation was modified, at the behest of General Somervell, to permit use of military lend-lease for occupation forces and “exceptional military programs”
within the discretion of the JCS.31 Somervell now foresaw that it would be practically impossible to cut off all support—rations, POL, and maintenance—for French, British, and other units in Germany that had previously been almost completely dependent upon American support. It was only a minimum of support pending placing occupation forces of Allied nations on financial arrangements other than lend-lease that he proposed, but when the matter was discussed in the JCS Admiral Leahy objected strenuously to even that minimum as being clearly illegal under the latest extension of the Lend-Lease Act.
Leahy’s views soon proved to be those of the President. On 5 July Truman issued a directive to the JCS that settled the issue:
Now that the war in Europe has terminated ... and in order to follow accurately the letter and spirit of the Lend-Lease Act, the following policy is established. ...
Approval of the issue to Allied Governments of Lend-Lease munitions of war and military and naval equipment will be limited to that which is to be used in the war against Japan, and it will not be issued for any other purpose.32
Truman’s positive declaration clearly ruled out lend-lease for occupation armies, but it did not specifically accept the premise, on which the JCS was proceeding, that assignments to the British should be limited to material for the war with Japan that they could not provide for themselves. To this extent, it still left the way open for a limited application of the principle of equitable and proportionate conversion, and on this line the State Department again drafted the long-delayed reply to Churchill’s cable of 28 May. The new draft was rather vague. It still purported to accept the Stage II Agreements but laid considerable stress on the possibility of scaling down British requirements because of of changed conditions and on the improved ability of the British to pay cash for more of the material furnished them, particularly articles which might evoke criticism in Congress if supplied under lend-lease, in the light of an improvement in their dollar reserves since November 1944. The President presented this reply to Churchill at Potsdam on 17 July 1945. The private British reaction was that their over-all financial position had never been worse but, making the best of a bad situation, they prepared to make a final fight to salvage as much as they could of the Stage II Agreements at the Potsdam Conference.33
Sometime earlier, on 2 July 1945, the British presented a paper to the CCS in an effort to get the MAB out of its stall, reiterating their understanding of the Stage II Agreements and asking that their programs, now revised, be accepted within the framework of the agreements as a guide to assignments. A few days
later, in order to establish the strategic basis of their need, the British Chiefs also outlined their ideas on the contribution they should make in the final phase of the war. They proposed that three to five British Commonwealth divisions participate in the main attack in the Pacific together with sections of the British Fleet and ten to twenty VLR squadrons of the RAF. They would also undertake operations in the “Outer Zone” to maintain pressure on the Japanese across the Burma-Siam frontier while studying operations against Siam, Java, Sumatra, and Hong Kong. Exact dates and detailed plans for these operations would be presented at a later date.34
Though the British ideas on strategy were tentatively accepted with some modification in the size of forces to be employed in the Pacific, the pleas for the Stage II Agreements left both the War Department and the JCS still unmoved.35 The issue was finally joined at Potsdam. At that conference the British Chiefs, supported wholeheartedly by the Prime Minister, argued forcefully that the wartime partnership should continue in the occupation and rehabilitation of Europe and that supplies and shipping for these purposes should continue to be allocated on a combined basis and on a reasonably high priority in relation to the war against Japan. The U.S. Chiefs insisted on the narrower view that only the pursuit of the war against Japan should be continued as a combined military undertaking, that occupation and rehabilitation were not matters for a combined military commitment. In response to the direct pleas of Churchill, however, on the subject of continuing lend-lease for the occupation and for equitable and proportionate conversion in the United Kingdom, President Truman promised to do the best he could for the British within the limitations imposed by Congress on his action:
... he was handicapped in his approach to this matter by the latest renewal of the Lend-Lease Act. As Vice-President he had worked out its clauses together with Senator George, who had explained to the Congress that the act was intended to be a weapon of war only. The President was now striving to give to the Act the broadest interpretation possible and he had no intention of causing the British any embarrassment in the matter of furnishing supplies to British troops or maintenance thereof. However, he must ask the Prime Minister to be patient as he wished to avoid any embarrassment with Congress over the interpretation of the Act and it might be necessary for him to ask for additional legislation in order to clear up the matter.36
Following Potsdam, Truman laid down a specific policy in detail indicating the extent to which this “broadest interpretation possible” would go. He reaffirmed that supplies should be furnished only for the war against Japan, but accepted the principle of proportionate and equitable conversion insofar as it was compatible with this dictum, thus overruling the JCS position that
supplies should be limited to those the British could not possibly make for themselves. He ruled out supplies for armies of occupation, but he authorized them for any purposes that would further redeployment of U.S. troops, thus providing a measure of flexibility. Such other maintenance as the British or others requested for their armies in Europe and the Middle East was authorized only in return for cash payment and was to be handled through FEA.37
The British had finally won a partial confirmation of the Stage II Agreements, although hedged about in many ways. And, since the British strategic plans (with some modifications) were approved at Potsdam, the MAB was at last in a position to proceed with assignments for British forces in the war against Japan. In the meantime, however, on the recommendation of the JCS Truman had proposed to Churchill that the time had come to end the system of assignments by combined bodies, that the MAB should be abolished and its functions turned over to the Joint Munitions Allocation Committee. The British reply, from Clement Attlee, the newly elected Prime Minister, suggested that the subcommittees at least should continue in existence to consider those few remaining cases where scarcities of specific items were still involved.38
The war against Japan moved so swiftly and unexpectedly to its end that events overtook the new policy before it could be placed into practical effect and made any further discussion of the future of the combined munitions assignments boards unnecessary. In an effort to avoid the confusion on lend-lease policy that had followed the fall of Germany, the Joint Logistics Committee hastily completed a study on post-V-J Day policy, which the JCS approved on 11 August 1945. Its main point was a recommendation to the President that lend-lease of munitions terminate immediately on the surrender of Japan, “except for assistance to Allied forces engaged against Japanese forces which have not surrendered, and in certain unavoidable cases where the abrupt termination of aid already in programs would be unreasonable or would cause undue hardship.”39 The President approved this policy, and on 24 August officially announced that lend-lease would end effective on V-J Day.
Whatever the JCS influence may have been, Truman undoubtedly felt obliged to adopt this line because of promises made to Congress in connection with the last lend-lease appropriations in July. On 5 September 1945 he issued more formal instructions to the JCS indicating the cases where the flow of aid would be allowed to continue even though Allied forces were not engaged in subduing any continuing Japanese resistance. Rations, shelter, medical supplies and services, petroleum products, fuel, and transportation would be allowed when they could not reasonably be furnished by the government concerned and when denial would work immediate hardship; but they were to be eliminated at the earliest practicable date,
The Big Three and their advisers in the palace garden during the Potsdam Conference
Seated, Prime Minister Attlee, President Truman, Premier Stalin. Standing, Admiral Leahy and Foreign Ministers Ernest Bevin, James Byrnes, and Vyacheslav M. Molotov.
and in no case were to be extended beyond six months after the formal Japanese surrender. Maintenance items might also be furnished for U.S. equipment in possession of Allied forces against payment on terms to be decided by the State Department and FEA. Maintenance, repair, training, transportation, and other services already undertaken would be continued to the nearest practicable stopping point as determined by the U.S. theater commander in the area concerned. A special exception was made of the Chinese forces sponsored by the Americans who were to continue to receive aid essential for the reoccupation of all of China then occupied by the Japanese, though not for “fratricidal war.”40
As a result of these exceptions, a small trickle of lend-lease continued to flow to the United Kingdom and other countries for some months, but to all intents and purposes the surrender of Japan signaled the end of lend-lease. In actual fact, the flow of military materials had been almost entirely cut off earlier in anticipation of the surrender. The Munitions Assignments Board held its last meeting on 8 August, though it was not formally allowed to expire until November. Its residual functions, as expected,
were turned over to the Joint Munitions Allocation Committee.41
To the British, the sudden end of lend-lease was a virtual catastrophe, coming as it did at the end of a four-month period when they had received few items from the United States that they could make for themselves. They were plummeted into the harsh realities of postwar readjustment without the cushion they had hoped American aid would provide. Their dollar reserves were totally inadequate to meet the cost of American supplies for which they had a continuing need; and there was little prospect that they could, for many years to come, build up their export trade to the point where they could pay for needed imports from either the United States or elsewhere.
In the postwar period the United States was to be forced to resort to new devices to maintain a going British economy and to bolster British military strength, starting with a loan in 1946 and progressing through the Marshall Plan and the Mutual Security Program. A forthright approach to the problem in 1945 might have saved much lost time and have been more economical in the end. Certainly the restrictive attitude of the JCS played some part in preventing such a forthright approach to a situation in which Presidential direction was uncertain and a practical policy vacuum existed.
It seems evident that both Roosevelt and Truman, the latter perhaps belatedly after Potsdam, saw the need for helping the British in their postwar economic adjustment, but Roosevelt’s hand was faltering in the last six months of his life and he did not take the necessary steps either to lay down a clear policy for the executive branch to follow or to secure the legislative authority that would have made the course of his successor easier. Without legislative authority, Truman felt his hands were tied, and lend-lease was allowed to lapse without any real consideration of how it might be used as an effective instrument of U.S. policy in promoting postwar adjustments—just as it had been used during hostilities as an extremely effective means for fighting a coalition war.