The Lend-Lease Act was the system by which the U.S. gave away $50 billion in military aid in 1941-45 (during World War II) so that the Allies could better fight Germany and Japan. There was no repayment required. $31 billion went to Britain, $11 billion to the Soviet Union, $3 billion to France, and $1.6 billion to China. In addition, Canada operated a similar program of aid to Britain, and Britain had its own program of aid to others, especially the Soviets.
It was a system of mutual and reciprocal aid which gave the U.S. about xx billions of services in return (especially rental of military bases on Allied soil). More broadly it meant the pooling of the resources, the man power, and the inventive genius of every Allied power. The original Lend Lease Act was An Act to Promote the Defense of the United States passed by Congress in March 1941 (8 months before Pearl Harbor), and though it furnished by far the largest contribution measured by monetary standards, lend-lease was a two-way affair, each nation giving to the common cause according to its resources. President Franklin D. Roosevelt determined that the defense of Britain against aggression was vital to the defense of the United States; Presidential confidant Harry Hopkins had general oversight on Roosevelt's behalf.
The Arsenal of Democracy
The United States, by adopting lend-lease became what FDR called, "The Arsenal of Democracy." The U.S. dedicated its economic resources to the smashing of Nazi Germany. Lend-lease was the logical outgrowth of the cash purchases which the Allies, and Britain in particular, had made in the United States since the beginning of the war. President Roosevelt had referred to the United States in this role as the "arsenal of democracy." With their dollar balances in 1940 approaching zero, the British could not continue purchasing vital war materials in America. The Lend-Lease Act, passed by Congress seven months after the destroyer transfer, authorized the President to procure from government facilities or elsewhere "any defense article for the government of any country whose defense the President deems vital to the defense of the United States." The term "defense article" included nearly everything directly or indirectly used for war purposes. The President was also given broad power not only to sell, transfer, exchange, or lease any such article, including "defense information," but also to prescribe any kind of payment he deemed satisfactory. These flexible and general provisions, allowing the bill to be adjusted to the changing circumstances of war, were later found to be highly important to Allied strategy. Winston Churchill called it "the most unsordid act."
Master Lend-Lease Agreements
After Pearl Harbor (Dec. 7, 1941), when it became a full belligerent, the United States and fourteen of its allies signed master lend-lease agreements providing for reciprocal aid and the pooling of human and material resources directed and coordinated toward the common goal. From that date forward the United States furnished nearly every kind of material and service to its allies, and received in return much the same kind of aid. Mindful of the World War I debt fiasco, as a result of American loans to its allies and the hard feelings that followed, the negotiators drafted Article VII of the master lend-lease agreements to provide 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." The British provided numerous bases and supplies for American forces, and furthermore gave the Americans the Rolls Royce Merlin engine for the P-51 Mustang fighter, the blueprints for the proximity fuze, and vital information on the atomic bomb.
The official Soviet position and that of its Comintern allies prior to June 22, 1941 was in direct and vocal oppostition to Lend-Lease. Once the German Chancellor Adolf Hitler violated the terms of the Molotov-Ribbentrop pact, oppostition ceased.
As the war progressed the Soviet Union became locked in a struggle with the invading German Wehrmacht and greatly benefited from the US war materials; they were delivered via Arctic seaports of Archangel and Murmansk, over land across Persia (Iran), and via Vladivostok. While Soviets historians downplayed the importance of the aid, recent scholarship has discovered how essential it was to the Soviet war effort.
Shortly before Pearl Harbor, Hopkins took on President Franklin Delano Roosevelt's adviser Lauchlin Currie as deputy for Lend-Lease aid to the Chinese KMT. The hope was that Lend-Lease aid would enable the Chinese to tie down large Japanese armies. Some 5000 Studebaker 2.5 ton trucks carried supplies along the Burma Road into China from India.
As a war measure, Lend-Lease was terminated by President Harry S. Truman in September 1945. Termination was hasty and unexpected and severely upset the Soviet Union and Britain; however the U.S. had also started up an entirely separate program of postwar relief and loans. Thus the U.S. loaned France $500 million in 1945 and Britain $3.75 billion at 2% interest, three years before the Marshall Plan aid started. Truman ignored Stalin's request for a $6 billion loan.
The United States delivered material valued at more than $50 billion and had received in reverse lend-lease material valued at less than $8 billion. Reverse lend-lease from the UK included worldwide shipping services amounting to £163,944,000, and inland transport of £48,496,000; capital installations in the United Kingdom came to £222,800,000, of which £117,341,000 was spent on air fields for the U.S. Air Force. (The rate of exchange was £1 to $4).
No repayment was required of aid given during the war. Originally ships were to be returned to the U.S., but in practice the U.S. had a huge surplus of ships and did not ask for them to be returned. Supplies that were en-route when the program ended were sold to the Allies on favorable terms at low prices and long-term loans.
Gaddis Smith, A. J. P Taylor, Warren Kimball, and David Reynolds have speculated at length on Roosevelt's motives in the lend-lease matter. British historian Taylor implies that the U.S. intended from the first to use Britain's predicament to drain it of gold and dollars, weaken its overseas financial position, and undermine its capacity to compete with the United States in the markets of the world. Others argue that, while Britain's replacement by the United States as the dominant economic power in the world was a result of lend-lease, it was not a cause. The president concluded that the European members of the Axis alliance were bent on world domination and that, after the fall of France, Hitler posed a direct threat to the Western Hemisphere. Quite aside from a natural sympathy for Britain and a desire to see it survive, Roosevelt, Secretary of State Cordell Hull, Secretary of the Treasury Henry Morgenthau, Secretary of War Henry Stimson, and FDR advisor Harry Hopkins company saw Britain in early 1941 as America's first line of defense. These historians admit that Morgenthau forced the sale of American Viscose Corporation, a subsidiary of the British textile combine, Courtalds, at approximately half its market value of $56 million, but point out that this was trivial compared to the reduction of British holdings the U.S. could have demanded. Morgenthau believed that Congress would never agree to the unprecedented subsidy that lend-lease involved unless the administration could neutralize widely held notions of British opulence by demonstrating that the Exchequer was out of dollars and gold. These latter scholars tend to neglect an important point, however.
- Allen, R. G. D. "Mutual Aid Between the U.S. and The British Empire, 1941-45" Journal of the Royal Statistical Society Vol. 109, No. 3 (1946), pp. 243–277. detailed statistical report; on JSTOR
- Coakley, Robert W. and Richard M. Leighton. Global Logistics and Strategy, 1943-1945 (1968), 889pp, perspective of U.S. Army* Dawson, Raymond H. The Decision to Aid Russia, 1941: Foreign Policy and Domestic Politics (1959) online edition
- Dobson, Alan P. U.S. Wartime Aid to Britain, 1940-1946. London, 1986.
- Hall, H. Duncan. North American Supply (1955) 559pp, official British war history that deals largely with lend-lease.
- Herring Jr., George C. Aid to Russia, 1941-1946: Strategy, Diplomacy, the Origins of the Cold War (1973) online edition
- Herring Jr., George C. "The United States and British Bankruptcy, 1944-1945: Responsibilities Deferred," Political Science Quarterly Vol. 86, No. 2 (Jun., 1971), pp. 260–280 in JSTOR
- Hill, Alexander. "British Lend-Lease Aid and the Soviet War Effort, June 1941-June 1942," The Journal of Military History 71 #3 (July 2007) pp. 773–808. in Project Muse
- Jones, Robert Huhn. The Roads to Russia: United States Lend-lease to the Soviet Union (1969), adds little original
- Kimball, Warren F. The Most Unsordid Act: Lend-lease, 1939-1941 (1969) 292 pages
- Kimball, Warren F. "Lend-Lease and the Open Door: The Temptation of British Opulence, 1937-1942," Political Science Quarterly Vol. 86, No. 2 (Jun., 1971), pp. 232–259 in JSTOR
- Langer, William L., and S. Everett Gleason. The Undeclared War, 1940-1941 (1953) online edition
- Langer, John Daniel. "The Harriman-Beaverbrook Mission and the Debate over Unconditional Aid for the Soviet Union, 1941." Journal of Contemporary History 14, no. 3 ( July 1979): 463-82.
- Louis, William Roger. Imperialism at Bay: The United States and the Decolonization of the British Empire, 1941-1945. 1977.
- Martel, Leon. Lend-Lease, Loans and the Coming of the Cold War: A Study in the Implementation of Foreign Policy. 1979.
- Munting, Roger. "Lend-Lease and the Soviet War Effort," Journal of Contemporary History Vol. 19, No. 3 (Jul., 1984), pp. 495–510 in JSTOR
- Munting, Roger. "Soviet Food Supply and Allied Aid in the War, 1941-45" Soviet Studies Vol. 36, No. 4 (Oct., 1984), pp. 582–593 in JSTOR
- Patterson, James T. "Alternatives to Globalism: Robert A. Taft and American Foreign Policy, 1939-1945." The Historian 36, no. 4 ( August 1974): 670-88.
- Reynolds, David. The Creation of the Anglo-American Alliance 1937-1941: A Study of Competitive Cooperation. 1981.
- Weiss, Stuart L. The President's Man: Leo Crowley and Franklin Roosevelt in Peace and War (1996) online edition
- Woods, Randall Bennett. A Changing of the Guard: Anglo-American Relations, 1941-1946 (1990) online edition
- Weeks, Albert Loren. Russia's Life-Saver: Lend-Lease Aid to the U.S.S.R. in World War II (2004) excerpt and text search
- The U.S. GDP was about $200 billion a year.
- Woods (1990) pp 9-10.