A number of reports which have appeared in the press recently have
suggested that the reciprocal aid being granted by Australia to
the United States Forces is now outstripping the Lend-Lease aid
granted to Australia by the United States Government. The first
suggestions of this kind were contained in press messages cabled
from Washington. While, as far as I am aware, these suggestions
have never received any support or encouragement in Ministerial or
informed official circles in Australia, there is no doubt that
they have led to widespread misconception (even among some
officials) of the relative magnitude of Lend-Lease and reciprocal
Lend-Lease transactions.

The press reports have caused some concern to the U.S. Army
representatives here and the matter was raised by Colonel Kramer
at the 15th Meeting of the Allied Supply Council [1], held on June
1st, 1943.

U.S. Army officers constantly come up against the statement that
Australian aid to the United States is greatly in excess of the
aid we are receiving from the United States, and, while they do
not wish to stress the aspect of money values, they are forced
into the invidious position of having themselves to attempt to
correct such misconceptions.

While deprecating any comparison of Lend-Lease and reciprocal
Lend-Lease from the basis of money values, the Council agreed that
the Director of the Division of Import Procurement, Mr. A. C.

Moore, should confer with Colonel Kramer with a view to assembling
the best information available.

The fundamental conception behind the Lend-Lease Act was, of
course, to take the dollar sign out of the aid given by the United
States to foreign Governments prosecuting the war against the Axis
powers, and the whole basis of the mutual aid arrangements now
operating between the United States and Australia is that each
country should provide the other with such goods and services as
it may be in a position to supply without reference to money
values. Money values do not enter into these transactions except
to the extent that each Government maintains records for its own
purposes of the value of the aid which it renders to the other
country.

There is, however, no measuring stick other than money values
which could be used to estimate the relative contribution made by
each country. Any such comparison would have to be based on the
United States official records of the value of Lend-Lease aid
granted to Australia and the Australian official records of the
value of reciprocal aid granted to the United States Forces.

Colonel Kramer and Mr. Moore, who have conferred on this matter,
agree that this is the only basis on which any comparison could be
made.

The Australian records of reciprocal aid granted to the United
States Forces are maintained by the Director of Reciprocal Lend-
Lease Finance in the Department of the Treasury, Mr. W. E. Dunk,
and the latest available figures were presented to War Cabinet by
the Treasurer early this month (Agendum No. 94/43 [2]). This
report covered the period up to April 30th, 1943, and gave the
total recorded reciprocal Lend-Lease expenditure to that date as
A48,200,000. However, as the report points out, there is
substantial unrecorded expenditure resulting from:-

(a) services not apportioned as between Departmental and
reciprocal Lend-Lease expenditure;

(b) the time lag in transferring expenditure which is apportioned.

This is offset, however, by the inclusion in the reciprocal Lend-
Lease figure of expenditure on joint works, a proportion of which
will be transferred to Australian Departmental votes at a later
stage.

So far as the value of Lend-Lease aid granted to Australia is
concerned, the United States Government has kept the dollar sign
in the background and has not communicated any money values to us.

The only figure we have is one which was included in the 8th
Quarterly Report to Congress on Lend-Lease Operations. This report
covered the period from March 11th, 1941 (the date of the passage
of the Lend-Lease Act) to March 1st, 1943, and gave the total
figure for Lend-Lease aid granted to Australia at $452,000,000
(A141,000,000). No breakdown of this figure was given but, as it
was embodied in a formal report to Congress, it must be taken as
representing the value which the United States Government places
on the aid in the form of goods and services which it has made
available to the Australian Government.

Colonel Kramer has been asked by Mr. Moore whether he desires to
submit any other or more detailed figures for the information of
the Australian Government.

As matters stand the latest available records show the value of
Lend-Lease aid to Australia at A141,000,000 up to March 1st,
1943, and the value of reciprocal aid by Australia at A48,200,000
up to April 30th 1943.

This cannot, of course, be regarded in any sense as a true
comparison of the amount of aid given by each country to the
other. Many forms of assistance do not lend themselves to
expression in money values and I feel it is against the whole
spirit of Lend-Lease that money value comparisons should be made.

I am confident that this viewpoint would be shared by the U.S.

Government.

It is, however, most desirable that the existing misconception
should be corrected and I think the most effective way of
achieving this would be for you to issue a public statement on the
matter. It would not be necessary to quote any actual money
values.

I have had a suitable statement drafted and am enclosing it
herewith for your consideration. [3]

R. V. KEANE