Financing Britain's War Requirements

January 2, 1941

Report Outline
Problem of Extending Fiscal Aid to Britain
Private and Public Loans to Britain, 1914–18
Policy of Banning Loans to Belligerents
Britain's Resources in United States

Problem of Extending Fiscal Aid to Britain

President Roosevelt's fireside chat of December 29, calling for an increased national effort to make the United States “the great arsenal of democracy,” laid the groundwork for submission to Congress in the annual message, scheduled for delivery January 6, of specific proposals for expanding American aid to Britain and financing an enlarged and uninterrupted flow of war supplies across the Atlantic. It is already indicated that opposition to any plan for rendering early financial aid will be forthcoming from groups that contend Britain has not yet by any means exhausted her financial resources in this country, and that she should be required to do so before asking the United States for assistance along those lines.

It became apparent a month ago that government circles were considering the possibility of recommending reversal of the policy, embodied in the Neutrality and Johnson acts, of withholding financial aid from belligerents and particularly from nations in default on their World War debts to the United States. On December 4 Federal Loan Administrator Jesse Jones told newspapermen he considered Great Britain “a good risk for a loan,” Two days later Secretary of the Treasury Morgenthau opened conversations with Sir Frederick Phillips, Under Secretary of the British Treasury, who was asked to draw up a balance sheet of his nation's holdings in this country. The British were understood to maintain the position that they could not proceed with the placing of large additional war orders unless assured of financial assistance.

President's Plans for Making Loans of War Equipment

Public discussion of the question of financial aid to England took a new turn in mid-December when President Roosevelt, returning from his Caribbean cruise, outlined an unusual plan for financing Britain's war requirements. At his press conference, December 17, the President suggested that the dollar sign be removed from the picture. He proposed that the United States, instead of loaning dollars to Britain, take over a large part of British war orders and then loan or lease to Great Britain, or sell subject to mortgage, the war materials and equipment produced under those orders. After the war, Britain would return the equipment to this country, replacing that lost or damaged with equivalent articles of British production. While the President said this plan would not require revision of the Neutrality or Johnson acts, he pointed out that Congress would have to grant authority and approve appropriations for its execution.

ISSUE TRACKER for Related Reports
United Kingdom
Nov. 05, 2010  U.S.-British Relations
Jan. 30, 1998  U.S.-British Relations
Mar. 08, 1996  The British Monarchy
Sep. 15, 1995  Northern Ireland Cease-Fire
Nov. 17, 1978  New Prospects for Britain
Apr. 08, 1977  Britain: Debtor Nation
Sep. 26, 1975  Britain in Crisis
Jun. 10, 1970  British Election, 1970
Oct. 30, 1968  British Economy Since Devaluation
Sep. 27, 1967  Britain in the 1960s: Descent from Power
Sep. 10, 1964  British Election, 1964
Jun. 24, 1964  British Commonwealth in the Postwar World
Aug. 09, 1961  Socialized Medicine in Great Britain
Jul. 19, 1961  Britain, the United States and the Common Market
Sep. 16, 1959  British General Election
Mar. 13, 1957  American-British Relations
May 10, 1954  Political Trends in Britain
Sep. 13, 1951  British Social Services
May 24, 1950  Sterling Balances
Feb. 08, 1950  British Election, 1950
Jan. 12, 1949  British National Health Service
Mar. 28, 1946  Sterling Area and the British Loan
Jul. 14, 1945  British Export Trade
Jun. 22, 1945  British Election
Jan. 01, 1943  Food Rationing in Great Britain
Apr. 19, 1941  Convoys for Britain
Jan. 02, 1941  Financing Britain's War Requirements
Aug. 26, 1938  Anglo-American Relations
Apr. 28, 1938  Economic Recovery in Great Britain
May 12, 1937  Britain's Intra-Imperial Relations
Sep. 09, 1931  Unemployment Insurance in Great Britain
Aug. 09, 1930  The Protectionist Movement in Great Britain
Sep. 10, 1929  The British Task in Palestine
May 06, 1929  The British General Election of 1929
Jun. 12, 1926  The British Trade and Financial Situation
May 07, 1926  Background of the British Labor Crisis
Oct. 17, 1924  British Electoral System and Political Issues
Feb. 29, 1924  British and French Finances
Jan. 14, 1924  The British Labour Party
BROWSE RELATED TOPICS:
International Economic Development
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U.S. at War: World War II