Mr. Cox. Not completely.

Mr. STETTINIUS. Not completely, sir. There are a few contracts, for some items not lend-leasable.

Senator ADAMS. Is it true, then, that everything covered by the categories of the lend-lease bill, after its passage, was put under contract by the United States and no further such contracts by Great Britain? Mr. Cox. No.

Mr. STETTINIUS. No, sir.

Mr. Cox. There have been some cases where the articles were covered by the categories in the Lend-Lease Act as a legal matter, but as a matter of policy it was deemed wise not to extend the aid. I can give you one illustration. The British wanted equipment to expand their oil facilities in the British West Indies and other parts of the world. We felt-not as a legal matter-because the oil was going to be used for the operation of combat planes, and so forth, and was clearly a defense article, but as a matter of policy, that if these particular facilities were to be expanded, they ought to be expanded in this country, rather than in other parts of the world. The net result of it was that the British used their own dollars to buy equipment in this country to expand their own oil facilities. The expenditure within that category was all right as a legal proposition, but as a policy matter it was determined not to do it.

Senator ADAMS. What did that amount to, in money?

Mr. Cox. In one case, as I remember offhand, it ran into $36,000,000.

ALLOCATIONS, OBLIGATIONS, AND EXPENDITURES UNDER PRIOR LEASELEND APPROPRIATION

Senator THOMAS. Referring specifically to the top chart on exhibit A, that refers to the appropriation made in the first lend-lease bill, which was a little over $7,000,000,000.

Mr. STETTINIUS. Yes, sir.

Senator THOMAS. According to this chart, that money was practically all allocated?

Mr. STETTINIUS. Approximately 95 percent.

Senator THOMAS. And something over $4,000,000,000 has been contracted?

Mr. STETTINIUS. That is substantially correct. The exact figure on obligations as of September 30, 1941, was $4,343,591,569.28. Senator THOMAS. And that only about $500,000,000 has been actually expended?

Mr. STETTINIUS. The exact figure on expenditures as of September 30, 1941 was $589,811,239.17.

Senator THOMAS. So it is true at this time that only the funds necessary to meet the expenditures have been raised under the financing program of the Government?

Mr. STETTINIUS. That is right.

AS OBLIGATIONS BECOME DUE TREASURY FINANCES THE PAYMENTS

Senator THOMAS. We haven't raised the 7,000,000,000, but only the 500,000,000?

Mr. STETTINIUS. That is correct.

Senator THOMAS. And as the obligations accrue and become due, the Treasury will finance the payments?

Mr. STETTINIUS. That is right.

Senator THOMAS. Some people may think, when we appropriate 5 or 7 billion, that that money is raised immediately, and we begin paying interest on it immediately. But it may be some time before we begin to pay interest on all these funds which are appropriated. Mr. STETTINIUS. That is correct.

Senator THOMAS. I think the record ought to show that.

Mr. STETTINIUS. Mr. Chairman, I have distributed another table, exhibit B, at which I think probably you gentlemen would like to glance, which shows the period up to September 30, and which substantiates the figures shown on the chart that has been distributed earlier.

SENSE IN WHICH WORD "TRANSFERRED" IS USED

Senator ADAMS. When you use the term "transferred," that means "delivered"?

Mr. STETTINIUS. That means the item is delivered to a ship, at Halifax or New York Harbor.

Senator ADAMS. Yes.

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USE OF WORDS 'ALLOCATION" AND "OBLIGATION"

Mr. STETTINIUS. When we use the word "allocation," that is an item allocated to the War Department in favor of the British, for example, for the War Department to buy something. An "obligation" is when the War Department contracts for that item.

Senator ADAMS. Of course, the allocations are subject to your control always?

Mr. STETTINIUS. That is correct; yes, sir.

Senator ADAMS. That is, it is a sort of a budgeting of prospective expenditures?

Mr. STETTINIUS. Yes, sir; and we can always change our minds, up to the very last moment.

Senator ADAMS. Up until it is obligated?

Mr. STETTINIUS. Oh, no-until the ship leaves.

Senator ADAMS. I was thinking of the term "obligated" in this sense, that if you make a contract with a manufacturer for so many tanks, that money has been obligated.

Mr. STETTINIUS. Yes, sir.

Senator ADAMS. Even though you might change your mind as to whether you will give those tanks to Britain.

Mr. STETTINIUS. Or keep them ourselves; yes, sir.

Senator ADAMS. You have allocated on your books your plan that you are going to use so much for airplanes and so much for tanks; but until it is actually obligated, it is subject to your control? Mr. STETTINIUS. That is correct, sir.

AMOUNT OF $7,000,000,000 LEASE-LEND APPROPRIATION UNOBLIGATED

Senator ADAMS. How much is unobligated at this time, of the $7,000,000,000?

Mr. STETTINIUS. Four billion three was obligated, sir; as of October 1.

Senator ADAMS. Then that would leave two billion seven unobligated?

Mr. STETTINIUS. That is right.

MORE FOOD HAS BEEN DELIVERED THAN ANY OTHER COMMODITY OR

ARTICLE

Senator MCKELLAR. Mr. Stettinius, in reference to the expenditures already made, where you have delivered the goods, what article leads in those deliveries? Is it oil? I am just wondering how they are divided. Have you shipped them more oil than any other one article, or more guns?

Mr. STETTINIUS. In the shipments up to the present time, more food has gone than any other one item.

Senator MCKELLAR. Have you a statement, or is there one in the House hearings-and if there is, I don't recall it as to such articles? Mr. STETTINIUS. The total transfers up to October 1, that is, deliveries and these are confidential figures

(Discussion off record.)

Mr. STETTINIUS. Mr. Chairman, the additional appropriation as now requested we feel is quite important, as the procurement agencies and the manufacturers cannot start and maintain the production necessary for the swift flow of production until the funds are in hand.

PREVIOUS LEASE-LEND APPROPRIATION PRACTICALLY ALL ALLOCATED

Senator THOMAS. If I may interrupt, there is one other question I think should be made a little plainer. Chart No. 1 shows you have obligated the first $7,000,000,000 appropriation to the extent of over $4,000,000,000, and then there is the allocation of it. But the testimony shows only a little over $4,000,000,000 have been obligated and, as it stands now, there is a little doubt as to how it is tied up, if at all. I would like for you to show what that means, for the record.

Mr. STETTINIUS. "Allocation" means we allocate, say, $10,000,000 to the Army to buy a thousand implements of war. The "obligation" is a contract the Army signs with the manufacturer to have those items manufactured.

Senator THOMAS. Then as far as you are concerned, the whole fund has been handled and prorated and is where you can't very well change it?

Mr. STETTINIUS. Unless the scene changes and we take it away from England to give it to China.

Senator THOMAS. While not obligated or contracted for, the money is there available.

Mr. STETTINIUS. Yes, sir.

Senator THOMAS. So the whole fund is committed or used?

Mr. STETTINIUS. Committed; yes, sir.

Senator THOMAS. So that the money is all gone, in a sense. All of it may not be contracted for, but it is all prorated, and the word "obligated" means exactly what it is presumed to mean.

Mr. STETTINIUS. And, of course, you understand that allocations for the balance are well along in every case.

REASON ADDITIONAL APPROPRIATION IS REQUESTED NOW

Senator THOMAS. And the reason you are asking for this new appropriation is that you have no more funds which are unobligated. Mr. STETTINIUS. When we left the office this morning we had approximately $600,000,000 of lend-lease requisitions that should go into the works that can't because the funds are not available.

HOW ESTIMATES OF NEEDED APPROPRIATIONS ARE MADE

Senator LODGE. What procedure do you follow in order to arrive at these figures? How do you arrive at the decision that you are going to spend so much of that for aircraft?

Mr. STETTINIUS. That is the result of long, long negotiations between the foreign governments and the War Department and the Navy Department and the Maritime Commission and the Department of Agriculture and the Treasury, with our own experts, as to the production facilities, as to what can be produced, and what portion of it can be allowed to go to another country and what portion of it we can keep. It is a matter of strategy that General Marshall and the members of his staff go into. Then we come up with an end figure that the President reviews, and the program is made up. When General Marshall and some of his aides appear before you, Senator, I think you might want to put that question to them specifically, because, after all, 21⁄2 billion of this 6 billion we are discussing now is to be handled by the War Department.

Senator LODGE. When you speak of negotiations with foreign governments, why should we negotiate? Why should we not decide it ourselves?

Mr. STETTINIUS. Well, we do. It is on their request.
Senator LODGE. And we decide?

Mr. STETTINIUS. Yes, sir; absolutely so. We decide. A better word would be consultation, rather than negotiation.

Senator MCKELLAR. Does the President have to go into each one of these items?

PRESIDENT HAS AUTHORIZED LEASE-LEND ADMINISTRATOR TO MAKE ALLOCATIONS AND TRANSFERS UP TO $300,000,000

Mr. STETTINIUS. The President has delegated to me the power up to $300,000,000; and I should like to put a copy of that delegation into the record, if you desire, as I did in the House.

Senator ADAMS. No; we take your word for it.

Mr. STETTINIUS. Thank you.

Senator MCKELLAR. I thought that might put a load on the President which would be pretty hard to bear.

Mr. STETTINIUS. Yes, sir.

COUNTRIES WITH WHICH CONSULTATIONS WERE CARRIED ON RELATIVE TO ADDITIONAL LEASE-LEND APPROPRIATION

Senator BROOKS. When you talk about our experts, and of going into the matter with these foreign countries, so far as these appropriations are concerned, with the experts of what countries have we had discussions?