Courtesy Reuters

Economic Problems in the Settlement

Implications of Lend-Lease

LEND-LEASE is an emergency system of supplying war materials to countries whose defense against their Axis enemies is deemed necessary to the defense of the United States. Before the United States entered the war it could be described as a modern form of the subsidies that powerful countries have often in history given to their allies or potential allies. Britain from the outbreak of war gave the same sort of assistance, and on a comparable scale, to many other of the United Nations. Since Pearl Harbor, reciprocal or "reverse" lend-lease has developed on a considerable scale to meet the needs of United States troops on foreign territory. Thus the lend-lease system has become a means of pooling the resources of the United Nations in a common war effort. It is an essential mechanism for the conduct of the war. If the powers granted by Congress to the President to conduct lend-lease transactions should lapse, an elaborate system of inter-Allied financial agreements would have to be created in their place. Such a change-over would cause confusion and probably would seriously handicap war operations.

In its essence, lend-lease is an emergency program of economic warfare. It may have to be continued for a brief period after the end of hostilities in order to cope with the confused and urgent necessities of relief and rehabilitation. But this is a very different thing from reorganizing postwar international trade on a permanent lend-lease basis. There has been a good deal of loose talk implying that this might be done, as though lend-lease were a great economic discovery with long-range applicability. It has been suggested vaguely, for example, that exports for reconstruction and international economic development might be made on a lend-lease basis, instead of in the normal way against payment which must ultimately be made by imports. Such suggestions are perhaps responsible for the apprehension with which the whole lend-lease procedure is viewed in some quarters. They tend to create an impression that foreign consumers may

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