Joseph C. Grew, Acting Secretary of State; Henry
Morgenthau, Jr., Secretary of the Treasury, and Leo T. Crowley, Foreign
Economic Administrator, acting for the Government of the United States
on lend-lease and reverse lend-lease discussions with Jean Monnet, representative
of the Provisional Government of the French Republic, made the following
Three agreements relating to lend-lease and reverse
lend-lease aid have been concluded with the French: (1) A master agreement
identical with those entered into with the United Kingdom, China, the
Soviet Union and other countries; (2) a reciprocal aid agreement similar
to those entered into with the United Kingdom, Australia, New Zealand
and others; and (3) an agreement under section 3(C) of the Lend-Lease
The first two agreements with the French are based
on the same principles as the lend-lease and reverse lend-lease agreements
made by the United States with our other Allies. The third agreement
is the first to be concluded with any of the United Nations. A similar
agreement is in negotiation with the Soviet Union.
The underlying fundamental principle of the lend-lease
agreements is the one previously laid down by the President of the United
States: "Until the unconditional surrender of both Japan and Germany,
we should continue the lend-lease program on whatever scale is necessary
to make the combined striking power of all the United Nations against
our enemies as overwhelming and as effective as we can make it."
All of the supplies, services and information covered
by the agreements with the French Provisional Government are directly
connected with the prosecution of the war. The basic purpose of the
whole program is to enable all French resources and the whole French
nation-soldiers, producers and farmers-to be mobilized and used for
the war against the common enemy.
Supplies, services and information solely for reconstruction
or rehabilitation purposes are excluded from these agreements. Supplies
required by the French solely for post-war purposes will have to be
handled by other means since the Lend-Lease Act is, and is being administered
as a war supply measure.
Economic and financial cooperation by all the United
Nations in many different ways will doubtless be required to meet such
post-war problems. Effective action in this field will require both
international and national action by the respective Governments, including
in many cases legislative action.
As in the case of other lend-lease countries, the
amounts and types of materials, services, etc., which are to be supplied
under these lend-lease agreements continue to be subject, as always,
to adjustment from time to time in accordance with the changing conditions
of the war.
When finished munitions are produced and available
for delivery, they are assigned by the Munitions Assignments Board under
the direction of the combined Chiefs of Staff in the light of the strategic
considerations prevailing at the time of the assignment. Similar procedures
are and will continue to be in effect for other war supplies that each
country may make available to the other.
The United States has already furnished France, under
lend-lease, with guns, ammunition, tanks and other finished munitions
and supplies for eight French divisions, and 300 supporting units, aggregating
in all zones 225,000 men, in addition to a French air force of about
In the words of Secretary of War Stimson:
"During the past year of operations some of those
French divisions fought superbly by the side of our American troops
in the Fifth Army in the very difficult campaign up through the Italian
peninsula. Thereafter, these French troops took an indispensable part
in the landing in southern France in support of our invasion of Normandy,
resulting in the capture of the ports of Marseilles and Toulon, the
triumphant march up the Rhone Valley through Lyons, and the successful
junction with General Eisenhower's forces on the German frontier.
"It is proper to say 'indispensable' because without
those French divisions the American forces alone could not have carried
through that campaign with any comparable saving of losses on our side.
As it was, those losses were at a minimum. Subsequently, as members
of the French First Army, these same French troops have helped effectuate
the rescue of the Province of Alsace, including Strasbourg and the present
holding of the upper Rhine boundary."
Supplies to equip additional French divisions and
units will be furnished under lend-lease pursuant to the terms of these
War production materials and other vital supplies
and services will be furnished by the United States to the French under
these agreements on lend-lease until a determination by the President
that they are no longer necessary for the prosecution of the war.
After this determination, the French may, under the
3(C) agreement, continue to receive the undelivered balances of certain
supplies in the program and to pay for them on specified credit terms,
with the reserved right to have the program or contracts canceled upon
paying the United States its out-of-pocket costs. The United States
agrees to deliver the programmed supplies to the French, after this
determination by the President, unless the President determines that
it is not in our national interest to do so.
The maximum aid to be furnished the French by the
United States under the 3(C) agreement is specified in two schedules.
The articles and services in Schedule 1 and their
estimated maximum cost are as follows:
Raw materials for war use and essential civilian
supply (cotton, metals, steel, chemicals, synthetic
rubber, drugs, medical supplies, etc.) .................. $840,000,000
Food (milk, pulses, edible oils, oil seed, seeds) ....... 185,000,000
Petroleum supplies ...................................... 132,000,000
French prisoner-of-war supplies ......................... 48,000,000
Short-life manufacturing equipment for war production ... 250,000,000
Freight charges (rental and charter of vessels) ......... 220,000,000
The supplies and services to be furnished under Schedule
1 include such items as cotton for the production of cotton duck for
tents and other textiles for the armed forces, rubber for the production
of tires for military vehicles, and similar war production materials.
They also include other vital supplies such as petroleum, hand tools
and trucks for war production and other essential operations, and food
and medical supplies for war workers and others of the French people
so that they can fight, produce and work most effectively in the winning
of the war.
Supplies and services under Schedule 1 do not include
finished armament, etc., for the use of French military forces. Up to
the extent that they are not found to be necessary in the joint war
effort by the President, any undelivered balances of Schedule 1 items
may, subject to the reservation of the President to withhold in the
national interest, be acquired by the French. Such items are to be paid
for by the French in thirty annual installments, beginning July 1, 1946,
or on the first day of July following delivery with interest at 2 3/8
per cent per annum.
In addition to these supplies and materials provided
under Schedule 1, certain categories of long-life capital goods will
be provided under Schedule 2 to enable France to produce and transport
military equipment and other war goods for our combined forces. This
will reduce the burden on our own output of such goods and will save
These long-life capital goods which have a war-connected
use are to be supplied to the French who agree to pay for them in full
against 20 per cent down payment on delivery and the balance in equal
annual installments within not to exceed thirty years, with interest
at 2 3/8 per cent per annum.
The articles and services in Schedule 2 and their
estimated maximum cost are as follows:
Locomotives ............................................. $200,000,000
Railroad cars ........................................... 120,000,000
Merchant marines ........................................ 140,000,000
Harbor watercraft ....................................... 32,000,000
Fishing fleet ........................................... 8,000,000
Inland watercraft (barges) .............................. 50,000,000
Metal-working machinery ................................. 100,000,000
Industrial equipment .................................... 150,000,000
Machinery for mines, arsenals, etc. ..................... 100,000,000
These long-term articles are being furnished under
Section 3(C) of the Lend-Lease Act and are put on these terms because,
while they have an important and useful part to play in the war, a large
part of their usefulness may also serve post-war purposes.
Under the agreement, production and delivery will
not have to stop on these goods even though the war should end before
they were finished. The French agree to take and pay for such goods
and the United States Government can proceed with an orderly liquidation
of the lend-lease contracts in the manner provided for under Section
3(C) of the Lend-Lease Act. The program for long-life equipment of this
character is subject to substantially the same limitations as apply
to Schedule 1.
Both of these programs are subject to periodic review
in the light of the war conditions and particularly after the end of
the European war.
Such reviews will have as their central objective
the carrying out of the intent of the Lend-Lease Act. From the beginning
of the program in March of 1941, lend-lease aid has been extended for
one purpose-and for one purpose only-the defense of the United States
and to enable our Allies to bring the full weight of their men and resources
to bear against our common enemies.
Accordingly, it is understood between the two Governments
that the United States has a broad power to cancel or revoke procurement
programs or contracts if the President determines that it is in our
national interest to do so. Actual delivery will always be subject to
the development of the military situation, and the changing demands
of strategy, as well as to economic and financial factors which affect
our national interest.
The reciprocal aid agreement the second of the agreements
noted above has been made retroactive to D-day in order to cover supplies
and services provided to the armed forces of the United States by the
French since that time and without payment by us.
The supplies and services being furnished to us by
the French under reverse lend-lease include textiles, military vehicle
tires, batteries, telephone wire, chemicals and other vital war materials,
railroad and port facilities and services, hotels, warehouses and other
facilities and services. The French have placed their industrial production,
in so far as it can be brought into operation, at the service of the
common war effort.
The reciprocal aid agreement reaffirms the central
principle that the French are to render us benefits on reverse lend-lease,
thus putting into effect the kind of combined war supply operations
which have previously been so effective in aiding the United Nations
to progress to victory over the common enemies.