Memorandum for the Prime Minister with Attachments

COP y THE WHITE HOUSE WASHINGTON July 17, 1945 MEMORANDUM FOR THE PRIME MINISTER I have gone into the question that you raise in your tele- gram of May 28 in regard to Lend-Lease during the Japanese War. We intend to furnish Lend-Lease to the British Commonwealth for the prosecution of the war against Japan generally in accord with the schedules of requirements for the first year follow- ing the defeat of Germany and other terms worked out between British and American supply representatives in October and November 19440 You, of course, realize that the policy I have indicated does not necessarily mean that either the munitions or the non-munitions program for the present year will be equal in total or individual items to the Lend-Lease requirements as- estimated in the meetings of last fall. Those estimates were subject to changing strategic demands as well as to supply, procurement, and allocation considerations, and to the provision of the nec- essary funds by the Congress. Individual requisitions are of course handled by the usual administrative and allocation chan- S. nels, with full discussion between our supply representatives. 17 U.S. In connection with the foregoing, it has come to my atten- tion that the British gold and foreign exchange holdings are now considerably higher than was anticipated at the time of the Phase II discussions. I do not wish to propose reopening the Phase II discussions on this account. However, I would like to request that your Government relax its position with res- pect to permitting dollar payments on certain items, particular- ly those where the unwillingness of your Government to make payments leads to political criticism in the United States. For example, it would be of: considerable assistance if your Government relaxed its restrictions on dollar payments for the proceeds of property sales in the Middle East and elsewhere; if the United Kingdom continued to take its share of the burden of the military relief and UNRRA programs in Europe; and if dol- lar payments were allowed on other items which arise from time to time in our relationships. I urge that you provide this flex- ibility in the long-term interests of both your country and mine. Harry S. Truman