Cablegram 250  LONDON, 19 September 1944, 2.08 p.m.
Lend Lease in Stage II.
My telegram of 14th September Australia No. 243, New Zealand
No. 191. 
1. The Prime Minister and the President have discussed at Quebec
the question of scope and scale of Lend Lease and Mutual Aid after
the defeat of Germany and during the war with Japan. They have
agreed that a joint United Kingdom - United States Committee
should be set up to consider this question. United States members
will be Morgenthan, Stettinius and Leo Crowley.  The Committee
will agree and recommend to their Governments the amount of Mutual
Aid in munitions, non-munitions and services which is to be
provided for the most effective prosecution of the war. Pending
its recommendations no major decisions are to be taken by either
Government without the approval of the Committee as to programmes
of Lend Lease Aid.
2. The Committee is to be guided by conclusions reached in
conversation between the Prime Minister and President of which the
following are salient points-
(a) The President agreed with the suggestion of the Prime Minister
that during Stage II we should continue to get food, shipping
etc., from the United States on Lend Lease to cover our reasonable
(b) As regards the suggestion that Lend Lease for munitions should
be on a proportional basis (see my telegram under reference
paragraph 1(a)) the President at first indicated assent but
Morgenthau then suggested that it would be better to work on
definite figures, to which the President agreed. This point will
need further clarification.
(c) The President agreed that no conditions should be attached to
delivery of supplies under Lend Lease which would jeopardise
reestablishment of our export trade provided that no articles
obtained on Lend Lease or identical thereto were exported or 'sold
for profit' (i.e. for more than the price at which they are
entered in United States books plus reasonable allowance for
transport and similar charges).
3. We are now engaged in rapid preparation of estimates for the
Committee, using as a starting point figures of manpower which we
shall have to devote to non-munitions production and the fighting
services in Stage II. As to non-munitions we are told that
Morgenthau has shown a desire to take account of the amount of
Reciprocal Aid when determining Lend Lease assistance to be given.
4. A fresh meeting of United Kingdom-United States Committee is
due to take place on Wednesday 20th September in Washington.
Although this meeting will, no doubt, be concerned mainly with
questions of procedure we expect that the Committee will soon get
down to the business of detailed estimates.
5. We are anxious that the Committee should pay full regard to the
needs of Australia and New Zealand and the most convenient way of
ensuring this would seem to be that it should be furnished with
estimates of your munitions production and requirements in Stage
II in a form which will enable them to be fitted into estimates
for other parts of the Empire. (We have already repeated to our
representatives estimates as regards non-munitions contained in
Commonwealth Government telegram 226  and New Zealand 200.) We
suggest, however, as a first step that authority should be given
to your representatives in Washington to place themselves in touch
with United Kingdom Minister Resident for Supply immediately so
that early discussions can take place as to best procedure for
enabling Australian and New Zealand position to be taken fully
into account. Meanwhile we are considering urgently who United
Kingdom members of proposed committee should be and will telegraph
further as to this as soon as decision has been taken.
6. It is specially desired that these arrangements should be kept
very secret at this stage.