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APPROPRIATION BILL FOR 1942

HEARINGS

BEFORE THE

SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS

UNITED STATES SENATE

SEVENTY-SEVENTH CONGRESS

FIRST SESSION

ON

H. R. 5788

A BILL MAKING SUPPLEMENTAL APPROPRIATIONS FOR THE
NATIONAL DEFENSE FOR THE FISCAL YEARS ENDING
JUNE 30, 1942, AND JUNE 30, 1943, AND FOR

OTHER PURPOSES

PART 1

DEFENSE AID-LEND-LEASE

Printed for the use of the Committee on Appropriations

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON : 1941

63857

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SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS

ALVA B. ADAMS, Colorado, Chairman CARTER GLASS, Virginia

GERALD P. NYE, North Dakota KENNETH MCKELLAR, Tennessee

HENRY CABOT LODGE, JR., Massachusetts CARL HAYDEN, Arizona

RUFUS C. HOLMAN, Oregon
MILLARD E. TYDINGS, Maryland

C. WAYLAND BROOKS, Illinois
RICHARD B. RUSSELL, Georgia
JOHN H. OVERTON, Louisiana
ELMER THOMAS, Oklahoma

EVERARD H. Smith, Clerk

II

SECOND SUPPLEMENTAL NATIONAL DEFENSE APPRO

PRIATION BILL FOR 1942

TUESDAY, OCTOBER 14, 1941

UNITED STATES SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D. C. The subcommittee met at 10:30 a. m., Senator Alva B. Adams, chairman of the subcommittee, presiding.

Present: Senators Adams, Glass, McKellar, Thomas of Oklahoma, Nye, Lodge, and Brooks.

LEND-LEASE ADMINISTRATION

STATEMENT OF EDWARD R. STETTINIUS, JR., LEND-LEASE AD

MINISTRATOR, ACCOMPANIED BY PHILIP YOUNG, ACTING EXECUTIVE OFFICER, DIVISION OF DEFENSE AID REPORTS; OSCAR S. COX, GENERAL COUNSEL; AND JAMES C. BUCKLEY ASSISTANT TO MR. YOUNG

Senator ADAMS. Gentlemen, we have before us this lend-lease bill, H. R. 5788. The bill has two parts-title I, which contains the leaselend items, and title II, which has some deficiency items. I assume the committee would want to take up the lend-lease items first. Mr. Stettinius is the Administrator of the Lend-Lease Administration, I think you can give us a general view of it, first, Mr. Stettinius.

Mr. STETTINIUS. All right, sir.

Senator ADAMS. You may follow your own course. Then if I might inquire, I should like to have the foundation laid as to the 7-billion appropriation and the progress made as to the use of that $7,000,000,000.

Mr. STETTINIUS. Right, sir.
Senator ADAMS. If that fits in with your plan.

Mr. STETTINIUS. It does. I think you, Mr. Chairman, and you other gentlemen are familiar with our testimony on the House side. We had a very thorough 8 days, the record of which has been laid

We have come here prepared this morning to give you gentlemen any information you want on the first appropriation and the pending bill now before you. I am rather new in the lend-lease game.

Senator ADAMS. You are twice as old in it as when you appeared before the House committee.

Mr. STETTINIUS. That is right. I was in it 10 days, and am now something approaching a month.

I have with me Mr. Philip Young, the acting executive officer; Mr. Oscar Cox, the general counsel; and Mr. James Buckley, assistant

before you.

to Mr. Young. With your permission to call upon these gentlemen, I think there is information they may have as to background on which you may wish to quiz them when you have finished with me.

NO CHANGES REQUESTED IN TITLE I OF BILL

Senator MCKELLAR. To start with, before you begin your state1:11. I would like to ask the general question I asked off the record a minute ago. Are you satisfied with the bill as passed by the House, or have you any changes you wish to make?

Mr. STETTINIUS. We are satisfied with the bill, Senator McKellar, as it passed the House.

PCXCTIONS OF LEASE-LEND ADMINISTRATION AND LEASE-LEND

PROCEDURE

Our organization, Mr. Chairman, is a coordinating, record-keeping, and policy-making agency, All actual procurement, after clearance of requisitions submitted by foreign governments, is conducted by the War Department, the Navy Department, the Maritime Commission, the Treasury Department, and the Department of Agriculture. They are the five agencies of the Government who actually do the procuring. Each of the procuring agencies carries on negotiations with representatives of the various governments and with the members of our organization, and we participate in this with them only up to the point of clearance.

ALLOCATIONS AND EXPENDITURES UNDER $7,000,000,000 LEASE-LEND

APPROPRIATION

Of the original $7,000,000,000, when I left the office this morningand this is the result of a quick tabulation-$6,635,000,000 had been allocated out of the first appropriation, with only some 5 percent of the funds then appropriated now left unallocated; these are reserved for current requirements of an urgent, emergency nature.

Expenditures to September 30 were approximately $590,000,000. The relatively small size of this amount is due to the fact that goods, as you all recognize, cannot be produced as fast as the contracts are let. Expenditures in September were approximately $201,000,000 as compared with about $389,000,000 during the previous 54 monthsthat is, $201,000,000 for the month of September and a total of $389,000,000 for the preceding 5% months.

Senator Adams. Those amounts making up the total expenditure of $590,000,000 up to this month?

Mr. STETTINIUS. That is right, sir, and I will submit a chart giving this in a little more detail. We feel these expenditures will increase at an accelerated rate now that we have gotten out of the engineering and into the actual production stage. Many facilities have had to be created to produce these armaments.

AMOUNT OF LEND-LEASE AID TO GREAT BRITAIN AND OTHER COUNTRIES

AND EXTENT OF BRITISH PURCHASES FROM BRITISH FUNDS

I fear there is a bit of misunderstanding as to the amount of aid being currently rendered Great Britain and the other democracies under lend-lease at the present time. I think sometimes we lose

sight of the fact that since the war began and up to this time approximately $5,000,000,000 of goods or armaments have gone from this side of the ocean under contracts of the British placed with their own money. With your permission, Mr. Chairman, I have a chart I would like to pass around to the members of the committee.

Senator ADAMS. Yes, sir.

Mr. STETTINIUS. I would like to call your attention particularly at this point to the bottom chart. You will note in the shaded area the direct-purchase exports and, in the black area, the lend-lease exports. Gradually the lend-lease exports—and that black area is just up to September 1-gradually that black area will grow, and their own exports under their own contracts will diminish, probably.

Senator ADAMS. Mr. Stettinius, in this shaded part-not the black part-it shows the line running up to $350,000,000. That represents their purchases per month?

Mr. STETTINIUS. Per month.
Senator Adams. Will that line probably continue to rise for a time?
Mr. STETTINIUS. They will both rise for a time, sir.

Senator Adams. How far would you estimate—and of course you can't know—but how far do you estimate that line of British purchases will reach?

Mr. Cox. The $350,000,000 is an all-time high; but it is almost impossible to predict what it might be in the future.

Senator ADAMS. I just asked you to guess. Mr. STETTINIUS. We will try to get an estimate. I am sure it will climb. How many months before it drops down, Senator, I wouldn't venture a guess.

EXTENT OF BRITISH PURCHASES UNDER THEIR OWN CONTRACTS

Senator NYE. Are we to understand that by the time shown as the peak of that line, by August 1941, there had been expenditures and exports of approximately $5,000,000,000?

Mr. STETTINIUS. Approaching 5 billion, under their own contracts, Senator Nye.

Senator Nye. Isee.
Mr. STETTINIUS. Yes, sir-since the beginning of the war.

Senator MCKELLAR. These figures here apply only to war materials?

Mr. STETTINIUS. That is right, sir.
Senator McKELLAR. And not to other exports to Great Britain?
Mr. STETTINIUS. Oh, yes.

Senator MCKELLAR. So that the line--not the black part of it but the other-constitutes or represents all exports of every kind to Great Britain?

Mr. STETTINIUS. That is correct, sir.
Senator MCKELLAR. All right.

UNDER

THEIR

BRITISH CONTINUING TO MAKE CERTAIN PURCHASES

OWN CONTRACTS

Senator Adams. Following the passage of the lend-lease bill, have the British ceased to make contracts, and all contracts since that time have been made by the United States?

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