WW2 USA/Australia Lend Lease

Much discussion on Lend Lease regarding Australian WW2 road construction.

There is so much confusion on this subject and so many uninformed stories about American wastefulness.

Of all Churchill's leadership during WW2 nothing comes near to his trip to USA to plead for American assistance. This trip saved UK from destruction (or at least defeat).

By the summer of 1940, only a year after the start of the war Britain was broke. The neutral Americans had agreed to supply Britain but only on a "cash and carry" basis. As a result all their reserves were used up plus a big portion of the reserves of the dominions, particularly Australia and Canada who, in those UK-groveling days were prepared to go broke on her behalf.

Churchill, by some miracle of salesmanship convinced Roosevelt to give him vast amounts of stuff on a buy now pay later deal. Roosevelt had a very hard time convincing congress this was a good thing as everyone in the USA, as a result of Joe Kennedy's defeatist reports, thought Britain was a lost cause. (Kennedy was US Ambassador to UK and later President Kennedy's father). The deal just got across the line.

The Lend-Lease Act stated that the U.S. government could lend or lease (rather than sell) war supplies to any nation deemed “vital to the defense of the United States.” Under this policy, the United States was able to supply military aid to its foreign allies during World War II while still remaining officially neutral in the conflict. Most importantly, passage of the Lend-Lease Act enabled a struggling Great Britain to continue fighting against Germany virtually on its own until the United States entered World War II late in 1941.

Australia was a participant in the Lend Lease program but two things saved us. Firstly we had considerable financial reserves for a small country and still had an export capacity to supplement those reserves (wool, wheat, canned meat etc). Secondly we were fortunate to be situated on the edge of the Pacific battlefield and became the main base. Millions of American soldiers passed through Australia, many spending years here, training, re-equipping and supplying.

The Americans were fed and supplied in the vast majority of cases from Australian resources. Huge amounts of basic goods came from Australian manufacturers and of course their accommodation, roads, water, electricity, train travel was charged out by the Australian Government.

The agreement below is to this day used as an example of how two nations with goodwill and particularly common sense with a "can-do" attitude can come to a final decision and an agreement that makes everybody happy.

There are a couple of points needing explanation to do with the American economy. Firstly no US goods whether purchased outright or on Lend Lease could ever be returned to USA and secondly all orders Australia had with US manufacturers had to be completed.

This last point was why Australia got a thousand Studebaker 6x6 trucks in 1946/47 when the Army had trucks running out their ears. They were mothballed and not issued to the Army until the 60's. The same reason the production lines in USA kept rolling with say, aircraft, which were flown to a storage field and eventually scrapped without ever doing a second flight. If all the war contracts were cancelled on the day the war ended the US economy would have collapsed overnight. This gave the manufacturers time to do an orderly change-over to normal civilian production. It is also the reason billions of dollars of brand new equipment was thrown into the ocean all over the world and not released on the civilian market.

Here is the agreement - if we only had such politicians and public servants today! And it is written in plain English not weasel-words and lawyer speak that infests our official documents today. The highlighted bits were from a bit of research I was doing not cross-outs, just ignore the marking.

It took Britain 60 years to clear the debt with USA and it heavily impacted their economy for all that time. Australia was free and clear only a few months after the war finished.

The Annex on the Treaty just list a few hundred DC3 and Catalina aircraft with spare engines and parts that the Americans threw into the deal. You can see in the Treaty either party could ask for stuff they had put in returned or paid for (neither ever did). This actual naming the aircraft for the RAAF as an outright purchase gave them absolute ownership without the possibility of the USA asking for them back at some inconvenient time.

The thousands of other aircraft the RAAF had on charge had all been actually paid for and wholly owned by Australia so were not subject to the Treaty conditions. There were some Spitfires not owned by the RAAF that had been in a few British RAF squadrons operating in Australia but after a couple of letters back and forward the Poms said just keep them so they went straight to Oakey with all the Australian Spitfires and were chopped up and sent to Japan to be made into saucepans.

Lang

Further explanation of the Treaty.

The $20,000,000 Australia owed USA in the wash-up was specifically identified as being for capitol equipment "machine tools". This means the big stuff in the factories to enable production into the future not just supplies and equipment used during the war.

The vast majority of this big machinery was in the GMH, Ford, International and Chrysler factories and boosted Australian vehicle production into first-world status. It also enabled the production of the first Holden.

Part of the $20,000,000 was also to pay for those aircraft identified in the Treaty annexe and commented upon to give the RAAF full ownership with no American interest remaining in them.

Lang