CHAPTER XIII

THE NEW PROPORTIONS
OF THE WAR

(i)

Economic Aspects of the New Alliances

Up to June 1941 the British had shouldered the main strategical and economic burdens of the war. In December 1941 they were still shouldering the main economic burden. However, from that time onwards, 'World War II', as the Americans named it, began really to live up to its name. It encircled the whole earth. In this global war, Britain maintained still a prominent, but no longer dominant position. The present chapter will outline in broad economic terms what this new position was.

The Second World War never became completely 'one war'. Between China and Germany there were never active hostilities; between Soviet Russia and Japan there was a pact of neutrality which lasted up to the very eve of Japan's overthrow. Even in Europe, there was  marked separateness between the operations in the east and those in the south and west. Thanks chiefly to the persistent efforts of Mr. Churchill and President Roosevelt, person contact was established with the Soviet leaders and some degree of coordination was achieved between the Russian and British-American offensives; but Moscow remained aloof—even further aloof than geography dictated—from the concerted war-planning of Washington and London.

If this were a military history, it would lay the heaviest possible stress upon Soviet Russia's military services to Britain; but, since it is an economic history, it must review, even if briefly, Britain's economic services to Soviet Russia. Russian resistance to German attack brought an immense easement of the strategical burden the British were carrying, but added to the economic burden. Supplies to Russia became an urgent British commitment and large quantities were promptly despatched, including 450 aircraft, 22,000 tons of rubber, three million pairs of boots and considerable stocks of tins, aluminium, jet, lead and wool—all these before the end of September. In that month, British and American delegations went to Moscow to receive a more formal statement of Russian requirements and to assess their combined capacity to supply them.

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A study of the the routes by which British and American supplies reached Russia would make in itself, if space permitted, a fascinating chapter of this history. The Arctic convoys to the White Sea ports underwent the most dramatic vicissitudes of fortune. In these convoys British merchant ships predominated at the beginning and American merchant ships at the end; from the beginning to the end the escorting warships were British. Up to the early days of March 1942, only one merchant ship was lost out of 110 despatched; at that time the deficiencies of Russian port capacity were a greater hindrance to the flow of supplies than were the German surface vessels, submarines and aircraft based in Norway. This situation changed when the days grew longer and when the size of convoys was increased through American anxiety to made good their backlog of deliveries. The famous convoy P.Q.17, which sailed for the White Sea ports at the time of almost continuous Arctic daylight at the end of June, lost twenty-two of its thirty-three merchant ships. The next convoy, postponed until mid-September, lost thirteen of its forty ships, though the Germans also lost heavily in aircraft.¹ Thereafter, shipping requirements for the invasion of North Africa necessitated an interruption of the Arctic convoys until mid-December. Such an interruption meant that a sizeable amount of tonnage lay idle for months in Russian ports; for there was a two-way convoy movement and ships leaving Murmansk had to meet those leaving Scotland and Iceland somewhere off the North Cape. The Russian convoys were suspended at times in later years, in 1943 for the invasion of Italy, in 1944 for the invasion of Normandy; but German interference was never again a major cause of loss and dearly. From November 1943 to February 1944, five convoys were run with the loss of only three ships out of a total of 191,² and, when activity on the northern route was resumed after the invasion of Normandy, convoys of between thirty and forty ships were run virtually without loss at regular intervals of from four to five weeks.

The drama of the Persian Gulf supply route to Russia was of a different kind; here there was no need for fighting, but great need for constructional work to increase the capacity of Persian ports, railways and roads. For the first twelve months, the burden of this work was carried out by the British; but by an agreement of September 1942 the United States Persian Gulf Service Command took over the greater part of it. Interruptions on the Arctic route were a powerful stimulus to American and British efforts to develop the Persian Gulf route to its maximum capacity at the greatest possible speed; at the same time, a balance had to be struck between Russian requirements.

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and those of the Persian population and of the British Tenth Army, which was guarding that important strategical area. The achievement was impressive. In the summer of 1942 clearance of supplies to Russia over the Persian route was 15,000 tons a month. By the end of year it had risen to 45,000 tons. By the summer of 1943 it had risen to 170,000 tons. In the summer of 1944 it reached the peak figure of 290,000 tons a month.

Other Middle Eastern supply route were experimentally tried, or at least explored; but they were all of minor importance. In North Pacific water, however, there was a third supply route of very great importance. Its existence gives striking illustration both of the global nature of the war and of its curious incompleteness. It was the pact of neutrality, maintained almost until the end of the war between Japan and the U.S.S.R., which gave full value to Vladivostok as a port of entry for American and also (in minor degree) Australian supplies. At the beginning, the supplies were carried chiefly in United States ships; but the risk of loss through Japanese interception³ prompted the Americans to transfer large numbers of ships to the Soviet flag, which gave immunity from Japanese attack.⁴ By the last quarter of 1944, United States and Canadian supplies were travelling along this route at the rate of 297,000 tons a month. Meanwhile, the close neighbourhood of Soviet and United States territory was demonstrated through the delivery of combat aeroplanes by direct flight from Nome in Alaska to airfields in eastern Siberia. This was the main air route used by the Americans in fulfilment of their protocol commitments; in addition they made use of the air route via the Atlantic and Africa.

In the total of supplies delivered over all routes to Russia, the shares of Britain and the United States were at the beginning approximately equal; but the American share progressively increased until it became in the end by far the larger one. What Russia required and what the Western Allies were able to supply were defined in a series of Protocols. The first Protocol, signed at Moscow early in October 1941, ran from that date until the following June; the later Protocols ran from 1st July each year until the end of June in each following year. Each Protocol listed the specific supplies to be delivered, the monthly rates of delivery to be aimed at and the totals for the whole period. There were, however, various reservations which gave some flexibility to the engagements that had been undertaken. For example, the first Protocol bound the supplying countries to provide the goods that were specified, not the shipping to carry them. Russia however

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proved unable to provide merchant ships or escorts; Britain and the United States therefore supplied both.⁵ The first Protocol also made provision for consultation between the three countries if any change in the war situation or shift in the borders of defence should make necessary a readjustment of the arrangements that had been made. Clauses which were similar in principle, if not in detail, were embodied in the later Protocols also.

What the Russians needed most urgently in the autumn of 1941 was quick and effective reinforcement of their fighting equipment. At that time, four of their large aircraft factories, two from the Ukraine and two from the Leningrad area, were being evacuated and erected elsewhere; in a message to the Prime Minister, Marshal Stalin stated that they would not be in production again for seven or eight months at the earliest. Russian production about this time was down from seventy to eighty aircraft a day to approximately thirty a day. Aircraft took first place among Russian requirements and Britain and America undertook to supply them, on a fifty-fifty basis, at the rate of 400 a month, in the ration of three bombers to one fighter.⁶ The Russians were also in urgent need of tanks which the two western powers, again on a fifty-fifty basis, agreed to supply at the rate of 500 a month;⁷ in addition, the British agreed to supply 'tankettes' (bren gun carriers) at the rate of 200 monthly. Of materials, the Russians were in special need of aluminium; the Americans undertook to supply 23,000 tons of it during the Protocol period and the British 18,000 tons, which would be procured for the most part from Canada.⁸ The American commitment for machine tools was considerably higher than the British and in the event the Americans supplied 2,562 machines during the nine-months period while the British supplied 1,210. Both countries undertook extensive miscellaneous commitments for the supply of raw materials, food-stuffs and medical supplies. These were besides various supplementary requirements which did not figure in the Protocol; for example, the Russians made an unexpected request for anti-gas respirators. A million and a half

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half were promptly despatched from Britain. And the provision of spare parts became increasingly important.

After Pearl Harbor, some of the engagements listed in the Protocol were modified; for example, by arrangement with the Combined Raw Materials Board and with Russian agreement, the monthly quotas of rubber and tin were reduced from 6,000 and 1,500 tons to 2,000 and 1,000 tons respectively. It seemed for a time as if the whole programme might fail; on the morrow of pearl Harbor the Americans suspended all deliveries and, although they soon resumed them, it was some months before they caught up with the target rates of delivery. But in the end they made good most of the lost time. By and large, the programme of the first Protocol was fulfilled.

When the time approached for negotiating the second Protocol, the British would have wished to apply to Russia the same methods of allocation to which they themselves were subjected—that is, to get the Russians to justify their requirements by submitting facts and figures, whether through the mechanism of the Combined Boards or in some other way. The Americans thought that for political reasons this procedure would not work. In the end, both countries made a joint approach to the Soviet Government with separate but coordinated schedules of supplies. The British offer was prepared in the knowledge that the Russians would have to bear the brunt of Germany's attack in the coming summer and that any slackening of aid might impair their will to fight; it might also impair the will of British workers to produce. So far as possible, aid should take the form of the most efficient weapons and it should arrive in time for the impending battles. In view, however, of the limitations of shipping and of Russian port and inland-clearance capacity, the joint British-American lists added up to 8,000,000 tons, from which the Russians were invited to select 4,400,000. The Russians scaled down the lists chiefly by sacrificing foodstuffs and oil products. They put the heaviest emphasis upon their need for tanks, aircraft, aluminium and industrial equipment.

During the period of the second Protocol, the Americans took the leading place as suppliers of Russian needs. Whereas, for example, the British could not raise the rate of their delivery of tanks above 250 per month, the Americans undertook to deliver 3,000 in the first half of the period while in the second half they raised the figure to 4,500—a total of 7,500 for the whole twelve months, in comparison with the British total of 3,000. For aircraft, British and American offers were more nearly equal; for the first six months the British promised

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delivery at the rate of 200 monthly while the American promise for the same period was 212 monthly. This undertaking was in fact modified by a series of British-American agreements whereby American aircraft were made available to fulfil the British commitment to Russia in return for British aircraft supplied to the United States Army Air Force in Britain. As for aluminium, the amount supplied by the United States (49,225 tons) was four times the amount of British supplies, which were in any case chiefly procured from Canada. The Americans also out-distanced the British in the supply of industrial materials and equipment.

At the end of the second Protocol period, both countries had fallen short of their targets. Owing chiefly to the interruptions of the Arctic convoys, the total supplies despatched (2,972,000 tons) were nearly 1½ million tons short of the figure set out in the Protocol. However, when the time came to negotiate the third Protocol, there was a very different war situation. In the east the Russians had begun their campaigns of reconquest; in the west, the British-American assault in Europe was impending. Henceforward, the Russians were far less preoccupied in securing military equipment. Industrial equipment, of which the Americans were the largest suppliers, became the most heavily accented requirement of the third and fourth Protocols.⁹

The official American estimate in money terms of the total of United States aid to Russia up to 31st August 1945 is $10,670 millions—about one quarter of the total lend-lease aid rendered to all countries. the official estimate in money terms of the total of British aid, excluding the value of supplies sent before the signature of the first Protocol was given by the Prime Minister in the House of Commons on 16th April 1946: 'In the period from 1st October 1941 to 31st March 1946 … the total value of military supplies despatched amounts to approximately £308 million. We have also sent about £120 million of raw materials, foodstuffs, machinery, industrial supplies and hospital equipment'.¹⁰ No attempt will be made here to

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adjust the dollar figures to the sterling ones nor to estimate the comparative effort and sacrifice involved in British and American aid to Russia; in so far as comparisons of this kinds are necessary for taking the measure of British economic effort during the war, they will be made below in considerably broader context. Here it need only be repeated that the volume of American aid over the whole period far outdistanced the volume of British aid, though in the first Protocol period and the first half of the second Protocol period—the supplies sent from the United Kingdom, despite its much smaller resources and the much greater strain imposed upon them, were very closely comparable with those sent from the United States.

The material is not available and probably never will be available for a detailed comparative study of the war economies of Britain and Soviet Russia; but there is a great volume of precise data which could be used for the comparative study of the British and American war economies. In the present book, however, the temptation to go too deeply into this inquiry must be resisted. The series in which the book has its place deals with the United Kingdom at war; international comparisons must be no further employed than is necessary for getting the British economic effort into proper focus. Nor is it possible to devote much space to the study of the combined planning whereby the British and American Governments endeavoured to make efficacious their concept of the pooling of resources. That story could not be adequately told except in a complete book as long as the present one. Nevertheless, the story must at least be sketched in outline; for after Pearl Harbor the war efforts of the two countries were so closely interlocked that neither can be properly understood if it is viewed in isolation from the other. The view of British war economy, in particular, would be quite out of perspective if it were not seen against the common British-American background.

It is desirable, first of all, to get a reasonably correct impression of the comparative war-making strengths of Britain and America. A good practical way of opening the inquiry is to compare the size of proportionate employments of the fighting and working populations of the two countries. The following table gives the comparison, as agreed by British and American statisticians,¹¹ for the summer of the invasion of Normandy.

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Mobilisation of the Labour Force aged 14 and over of each Country for War, June 1944

		Million persons
	United Kingdom	United States
A. Armed forces	5.2	11.5
B. Civilian war employment	7.8	13.4
C. Total A+B	13.0	24.9
D. Other employment	10.4	36.3
E. Unemployed	0.1	1.0
F. Total Labour Force aged 14 and over	23.5	62.2

The first fact which emerges from the table is that the United States armed forces in the summer of 1944 were rather more than double the size of the United Kingdom armed forces. Obviously, this does not mean that from the time of Pearl Harbor onwards the Americans did twice as much fighting as the British. In the summit of 1942 their armed forces were still appreciably smaller than those of the British and though their heavy drafts in the following twelve months gave them by June 1943 a lead of four millions,¹² a very large proportion of their total strength was still in home bases. It was for example not until just before D-Day in June 1944 that the numbers of American soldiers in fighting contact with the enemy exceeded the number of British Empire soldiers so employed. This clearly demonstrated by the graph on page 367.

The immensely greater fighting strength of the United States—potential at first—became actual at the time of culminating impact upon the enemy.

A similar conclusion emerges from the comparative study of munitions production. In the report already quoted, munitions production indices are given for the United Kingdom, the United States and Canada covering the years 1940-44. The indices demonstrate the immense acceleration of American output, which in 1944 was almost eight times as great as in 1941. Of course, American effort during the period of comparison started from a very much lower base than the British one; but again, this is for the present purposes not the main

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point. What is wanted is not merely a measurement of the comparative rates of growth, but an estimate of comparative productive strength at the different points in time. Up to the early months of 1942, the volume of British munitions production was still greater than the American volume; but in 1943, the ration of the American output to the British was nearly four to one. The Americans achieved this fourfold superiority

NUMBER OF ARMY DIVISIONS IN FIGHTING CONTACT WITH THE ENEMY
(Western and Eastern¹³ War Theatres)

This graph was made at the request of the authors by their military colleagues in the Historical Section. It has a very precise statistical basis, which however does not exactly fit the facts of United Kingdom deployment, because Dominion, Indian and European Allied formations in the Western and Eastern theatres are included. On the other hand, British Empire Forces in the Pacific theatre (e.g. the Australians in New Guinea) are excluded.

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with a civilian war employment not quite double the British figure—in mid-1944 13.4 millions compared with 7.8 millions.

These figures of comparative productive strength must not be regarded as an estimate of comparative efficiency in war, still less of comparative efficacy in war, still less of comparative war effort. War efficacy and effort signify not merely the accumulation of men and material but the intensity of their use in combat with the enemy. This point has already been made with reference to the deployment of armed forces and in certain circumstances it is no less valid for war production: for example, a 'mulberry' harbour produced in United States ports would probably have had no war-winning efficacy at all. A higher rate of production in areas thousands of miles distant from the battle fronts may have smaller value than a lower rate of output in an advanced base; indeed, if there should be insuperable difficulties of transportation, the higher rate of output in the distant country will have no military value at all. Throughout the war, the value of British production was in the military sense maximised because Britain was an advanced base, an 'arsenal of democracy' which saved distance and also, in the earlier years of the war especially, saved the time that enabled the New World democracies to 'tool up' their own factories.

Inevitably, war production in an advanced base has to struggle against acute difficulties which depress the rate of output. The direct destruction of materials and plant by air bombardment, the dispersal of production units, interruption of the flow of production through damage to the transport system, exhaustion of the workers through the black-out conditions in the factories and through the extra strain of night duty in the Home Guard or Civil Defence—all these drawbacks have to be set against the advantages of producing weapons close to the front line, or int it. There is another factor to be considered: when weapons produced in the factories must be used immediately in battle, they have to be modified continuously in order to keep pace with battle experience. This was the situation of the United Kingdom, particularly in the early years of the war. The advanced base was itself under menace of invasion; in consequence, the methodical tooling-up that would have given a larger output of standardised weapons in future years had frequently give a larger output of standardised weapons in future years had frequently to be sacrificed for the sake of flexibility and immediate use in battle. In comparing British and American production it must also be remembered that in the early stages of the war a large proportion of British production consisted of defensive weapons to safeguard the United Kingdom. Even from the start a large proportion of American supplies were 'offensive'. This in part explains why when it came to the assaults of 1944 a large proportion of both British and American troops in action were using American munitions. Of course, American industry had a big initial superiority in higher productivity per man. This superiority was

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increased by the particular character of the war effort demanded respectively from each of the two countries.

The study of comparative war effort merges also into the study of comparative sacrifice. This is a difficult and sometimes disputations problem and the present writers have no wish to prove into it too deeply; but some use may be made of two measuring-rods which have been already employed in purely national context. In the United States, the measuring rod of national income accountancy has more than once been authoritatively recommended as the most useful means of estimating the comparative effort and sacrifice of the nations allied in war. In the Twentieth Report to Congress on Lend-Lease Operations, presented in August 1945, President Truman declared: 'To the extent that the cost of each nation's contribution to the war

WAR EXPENDITURES IN PERCENT OF NATIONAL INCOME

National income statistics are for net national income, at market prices

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can be measured in financial terms, probably the best measurement is the proportion of its national income which each of the United Nations is devoting to the war.'¹⁴

The report illustrated this principle in the case of six nations by means of the graph which is reproduced on p. 369.

The report goes on to point out that the accuracy of such measurements varies from year to year and from country to country and that, in view of the great imperfections in the basic data, the ratios in the chart should be regarded, not as exact statistical measurements, but as general ratios and trends. It also emphasises the truth that money can never measure all the costs of the war. 'They must be and have been met in blood and toil, in lives lost and men maimed, in the immeasurable wreckage of human lives and happiness and the destruction of homes and cities.' No person possessing either military or economic knowledge would be rash to declare the war-effort of devastated Russia inferior to that of Britain or Canada, simply because the lines on the chart show that Russia—with its much lower national income per head of the population—devoted a small proportion of the total to direct war purposes. At the same time, no well-informed person can deny the significance of the contrast between the lines plotted for British and American war expenditures; for they clearly demonstrate that, of these two countries, the one which was subjected to direct attack and possessed besides the lower national income per head of the population, put forth an effort which was not only much longer sustained, but was also more intense in the period of climax.

When the measuring rod of manpower is used, the same conclusion emerges. This will at once became plain if the totals that were set down in the table on p. 366 for June 1944 are now stated as percentages of the labour force in each of the two countries.

Mobilisation of the Labour Force of each Country for War, June 1944

		Percentages
	United Kingdom	United States
A. Armed forces	22	18½
B. Civilian war employment	33	21½
C. Total A+B	55	40
D. Other Employment	45	58
E. Unemployed	—15	2
F. Total Labour Force	100	100

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These figures demonstrate the more intensive mobilisation of British manpower. An equally striking demonstration could be achieved by translating the comparative totals into rations. The American population of working age was nearly three times as large as the British; but the ration of the American to the British armed forces was no more than 2.2:1. When the figures of civilian war employment are added to those of military service, the ration of American superiority is appreciably less than 2:1.

Viewed as a whole, the American task of mobilising its manpower was far lighter than the British task.¹⁶ In 1939, the American population of working age (i.e.) fourteen to sixty inclusive) was about 91,300,000; by 1943, the total had risen to 94,900,000—a rate increase of about 900,000 annually. Moreover, the American before the war had 8¾ millions unemployed. With so large a spring of natural increase and so large a pool of unused resources to draw upon, they were less dependent upon emergency recruitment, which was, besides, much easier for them, because of the very large numbers of young people who could be drawn into industry from colleges and universities. For all these reasons, it was for them a smaller effort to build up their total employed labour force from forty-three millions in 1939 to sixty-two millions in 1944 than it was for the British to build up their total labour force from 19½ millions in 1939 to 23½ millions in 1944. During the war the United Kingdom's population of working age (fourteen to sixty-four inclusive) was practically stationary at about thirty-four millions, its reserve of unemployed workers at mid-1939 was 1.4 millions and its so-called 'unoccupied' population was for the most part busily engaged in household tasks.

The manpower situation of the United States was easy enough to permit an extraordinary expansion of the armed forces and war industry without diversion of labour in a scale that would have stopped the expansion of American standards of living.¹⁷ To the historian of British war economy, the realisation that manpower was never the most critical American shortage comes almost as a shock. 'At no time', an American official historian has written, 'were labor shortages so critical as the shortages of raw materials, machine tools, components, ships, freight cars, and other items which necessitated

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tight control programs in those fields.'¹⁸ The strategically central control over American industry was exercised through allocation of materials and distribution of component parts. The Americans got through the war without a National Service Act. They never really needed one. If the war had lasted much longer, manpower would probably have become their most troublesome shortage and they would have been compelled to choose between industrial conscription and a failing war effort; but, as things turned out, their situation in 1945 was rather like Britain's situation in 1918. They had been able to achieve victory without submitting their economic and social system to this ultimate strain.

What impresses the economic historian is the contrast between the lavishness of American and the scantiness of British resources in relation to the challenges that the two countries respectively had to face. Because of this contrast, the tasks of American and British economic statesmanship were in some respects different. It did not matter very much of the Americans spilt a cupful or two from their gallon pot; what mattered most was that they should achieved unprecedented speed in filling their pot and pouring it out. This they did. But the British had to get a full pint out of their pint pot and if possible a bit more; they could hardly afford to spill a single drop. By 1943 manpower had become their basic shortage and they had to exercise the most parsimonious calculation in allocating it amongst alternative uses. It is significant that, out of a 2.8 million increase¹⁹ in their total of gainfully occupied persons, 2.2 millions were women; the demands of the war upon the women of American, though substantial, were far less urgent.²⁰ Moreover, the hours of labour were lengthened far more drastically in Britain than in American.²¹ Most significant of all was the ruthless diversion of British labour from peace employment to war employment. Whereas in American the switch of labour made a subsidiary contribution to war mobilisation, in Britain it made the chief contribution. With only forty-five percent of the British labour force remaining in 'other

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employment', the British people were compelled to undergo, irrespective of the shipping shortage, a sharp decline in their domestic standard of living, their export trade and their capital inheritance. The price paid in over-strain of this intense British mobilisation will become apparent in some of the following chapters.²²

The strain would have been beyond bearing; indeed, the task would have been beyond the bounds of physical possibility, had it not been for the aid rendered by the United States through lend-lease. While the British mobilised fighting forces out of all proportion to the size of their population, American industry took over part of the task of equipping those forces. British-American war plans in the autumn of 1942 were based on the assumption that the United States would provide almost 100 percent of the joint requirements of transport aircraft, self-propelled guns, forty-ton tank transporters, and ten-ton lorries, together with very high proportions of landing craft, auxiliary aircraft carriers, light bombers and tanks. An index compiled by Professor R. G. D. Allen reveals the increasing American contribution to the munitioning of British Commonwealth forces.

British Empire Munitions Supplies from all Sources²³

		Sept.–Dec. 1939 and 1940	1941	1942	1943	1944	First half 1945	Total
Total supplies ($ millions)		9,200	13,000	19,900	24,800	24,700	9,300	100,900
Percent from:
	U.K.	90.7	81.8	72.6	62.4	61.2	66.1	69.5
	Canada	2.6	5.2	8.6	8.8	8.9	10.0	7.9
	Eastern Group (mainly Australia, New Zealand and India)	1.1	1.5	1.9	1.9	1.2	1.7	1.6
	Purchases in U.S.	5.6	9.1	4.7	2.4	1.5	1.2	3.7
	U.S. Lend-Lease	—	2.4	12.2	24.5	27.5	21.0	17.3

It is doubtful whether a completely satisfactory index could be compiled. Nevertheless, it may be accepted that the United States, whose contribution of munitions up to Pearl Harbor had been negligible, were by 1942 supplying approximately one-tenth of the munitions requirements of British Empire armed forces and by 1943-44 over a quarter. The United Kingdom in the culminating period of the war, was called upon to supply over sixty percent of the total munitions becoming available for Empire countries. This was a heavy burden for so small a population and it could not have been

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borne without a disproportionate concentration of British industrial manpower in the war factories; in June 1944, as we have seen, thirty-three percent of the total labour force in the United Kingdom was in civilian war employment as against 21½ percent in the United States. But this concentration would itself have been beyond attainment had it not been for the large deliveries to British war industry of lend-lease materials and tools and the large deliveries of food to the British civilian population. If, to quote one example out of many, Britain had been compelled to make current payment for the larger part of her essential imports, she would have been quite unable to cut by seventy percent or so the volume of her production for export.²⁴

The narrative therefore returns from comparative effort, which is in this chapter the minor theme, to the major theme of comparative strength. What calls for most emphasis here is the American achievement of raising its armed forces from 1.7 millions in the year of Pearl Harbor to 11.5 millions in the year of Normandy, producing the equipment for these immense numbers, producing on top of that large masses of equipment for the British and other Allied nations, reinforcing the war industries of its Allies with materials and plant and contributing large quantities of essential civilian supplies—not to mention the shipping turned out in American yards to carry all these cargoes overseas. To the British inquirer, perhaps the most impressive demonstration of American strength is the fact that the aid which so decisively reinforced the war effort of his own people was only a subsidiary element in the American war effort. In terms of dollars, lend-lease aid to the whole British Empire in the period January 1942 to June 1945 amounted to no more than eleven percent of the total United States war expenditure. Some more specific examples may be given for 1944, the peak year. The deliveries of food which meant so much to the United Kingdom in that year amounted to little more than five percent of American food output. The deliveries of metals to the British Empire were 3.4 percent of American output; of machinery, 7.1 percent; of ships (including the work of ship repair in United States ports), 6.7 percent; of ordnance and ammunition, 8.8 percent; or aircraft, 13.5 percent. Vehicles and their equipment at 29.4 percent of American output, topped the list in 1944. In the two years 1943-44, deliveries of all types of military equipment amounted to approximately 11½ percent of American output. These were the year of decisive military impact and the years when lend-lease reached its maximum volume; after that, deliveries of almost every kind fell steeply down until lend-lease was once and for all cut off.²⁵

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The examples given above are quoted from Table 15 of Professor R.G.D. Allen's paper to the Royal Statistical Society.²⁶ Readers who desire a comprehensive and careful analysis of mutual aid between the United States and the British Empire are referred to that paper. No attempt can be made here to enter into refinements of the statistical calculations, but the salient conclusions must be set down.

Before this summary is given, reference must be made and tribute paid to the financial aid granted by Canada to the United Kingdom. from the outset of the war, the Dominion had shown itself resolved not to allow the rapidly growing British shortage of Canadian dollars to create a corresponding shortage of the munitions and agricultural produce which Canadian producers could supply. By the time lend-lease came into operation, the British Government had run through its means of payment and the Canadian Government was holding sterling balances in excess of £200 million. In April 1942, the Dominion disposed of the past by means of an interest-free loan of $700 million which extinguished the accumulated sterling balances; it provided for the future by a free gift of $1,000 million. This gift covered United Kingdom requirements up to January 1943, when deficits on payment were covered for a month or two by a number of transitional improvisations.²⁷ In April 1943 the first Mutual Aid Bill was introduced into the Dominion Parliament; it appropriated $1,000 million, most of which covered supplies to Britain. The next appropriation for $800 million, which was made in the spring of 1944 and was supplemented later in the year, by special manipulations to increase British holdings of Canadian dollars.²⁸ Finally in the spring of 1945, the Canadian Government decided to make an interim war appropriation of $2,000 millions to cover all war expenditure, including Mutual Aid, during the next five months. After VJ-Day a new chapter opened and the British deficit was financed by overdraft pending negotiation of an agreement to meet the needs of peace. The needs of war had been met from beginning to end without hesitation or stint.

To return now to American lend-lease: the outline from March 1941 to the end of August 1945, is as follows²⁹:

	$ millions
To the British Empire	30,073
To Russia	10,670
To other countries	2,872
Total lend-lease aid	43,615

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The British Empire's share in the total is approximately seventy percent. It is a complicated business to determine precisely how the $30,073 millions were divided among the constituent Governments of the Empire, but Professor Allen gives $27,025 millions as the figure of lend-lease aid to the United Kingdom. Australia ($1,570 millions) received the second largest share of aid rendered to the Commonwealth countries.

There is, of course, another side to the mutual aid account, namely, lend-lease in reverse or reciprocal aid, granted chiefly in the form of facilities and supplies for American forces overseas and raw materials for the use of American industry. Professor Allen estimates the total of British Empire reciprocal aid to the United States at £1,605 millions sterling. To make an appropriate translation of sterling value into dollar value is a very complicated business;³⁰ by Professor Allen's calculation,m the reciprocal aid provided by the whole British Empire to the United States had a value between twenty-five and thirty percent of the United States lend-lease aid to the Empire. Some countries of the Empire came fairly close to an evening of account; New Zealand actually gave as much as she got and Australia's contribution of reciprocal aid amounted to about seventy percent of the lend-lease aid she received. These estimates are for total sums; if the mutual aid account were calculated in relation to national incomes and total war expenditures, both Australian and New Zealand would be credited with contributions of reciprocal aid very much above their receipts of lend-lease aid.³¹

The favourable American balance in mutual aid accountancy with the British Empire occurred primarily in the account with the United Kingdom. As against the estimated $27,025 millions of lend-lease aid which the United Kingdom received, its total contribution of reciprocal aid to all countries was £1,896 millions. This total was made up as follows:

	£ millions
To the United States	1,201.2
To Russia	312.0
To other countries (provisional figures)	382.8
Total U.K. reciprocal aid	1,896.0

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This table shows a sharing out of British reciprocal aid among the various foreign recipients that is rather different from the allocation of American lend-lease aid. Russia received a smaller proportion of the British than of the American total; other European countries received a larger proportion. But the broad division of United Kingdom aid between the United States  and all other countries (sixty-five percent and forty five percent respectively) is similar to the broad division of United States aid—seventy percent to the British Empire, thirty percent to other countries.

At the rates of conversion that have been explained above, the £1,201 millions of aid to the United States would be equivalent to $5,667 millions. This is between one fifth and one quarter of the estimated $27,023 millions of lend-lease aid to the United Kingdom. As a proportion of national resources, Britain's contribution of reciprocal aid to the United States came 'within hailing distance' of the lend-lease aid that she received. Professor Allen suggests eleven percent of war expenditure as America's lend-lease contribution to the British Empire and nearly nine percent of war expenditure as the United Kingdom's reciprocal aid to the United States. Almost identical proportions of the national income—approximately 4¾ percent—were devoted over the whole period to lend-lease in the United States and reciprocal aid in the United States.

It would, however, be injudicious to place too much emphasis upon the accountancy of mutual aid. In particular, so far as the United Kingdom is concerned, the main balancing act is the more intensive mobilisation and deployment of British military manpower, the more intensive concentration of the British labour force in war industry, and the corresponding sacrifices of the nation's living standards and its capital inheritance. It must be admitted that the theory of mutual aid was never completely coherent. Lend-lease was introduced originally as a policy 'for the defense of the United States' when the United States were not yet at war. This was strategical theory, whereby the United Kingdom and the other fighting democracies gave their return for American aid by keeping the war away from American shores. Side by side with this theory, however, the original Act of Congress asserted United States property rights in the defence articles and services that were transferred and looked forward to some kind of repayment. When the United States became an active partner in the war, some people (e.g. Monnet) argued that the theory of proprietary rights was now inappropriate and that the theory of strategical solidarity should henceforward dominate all lend-lease transactions. The American Congress and public opinion would not, however, have accepted any change in the terms of the original act. On the other hand, the theory of reciprocal

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aid (as first set out in the Mutual Aid Agreement of February 23rd 1942 between the United Kingdom and United States) was entirely strategical. This Agreement was the model of the others subsequently signed between the United States and the other Governments of the United Nations.

To attempt in terms of distributive justice a general balancing of the manifold items in the real British-American war account would be quite hopeless. The statesmen and peoples were not thinking in terms of distributive justice between themselves and their Allies when they were fighting the war. The terminus of their thought and action was victory. Mutual aid should be primarily be regarded as one of the essential mechanisms for the international division of economic power and effort whereby victory was achieved.

The allocation of economic resources on an inter-Allied basis was not left to the free play of the market. Planning and conscious control were no less essential in this wider sphere than they were in the sphere of the national war economies. Deliberate decisions had constantly to be taken and carried through if strategical requirements and economic resources were to be brought into conformity with each other. The following section will therefore survey the methods of British-American planning for global war.

(ii)

British-American Procedure

Despite what has been said earlier about the continuity of experience connecting the Anglo-French and Anglo-American war partnerships,³² the present survey must begin by emphasising some important contrasts between the earlier partnership and the later one. Before September 193, Britain and France had bound themselves by treaty under certain clearly specified eventualities to wage war as Allies; they had defined with precision the military support which they would give to each other; they had specified the combined machinery through which their combined war effort would be conducted. At the apex of this machinery was a well-tested institution of the previous war, the Supreme War Council. Such gaps as existed in September 1939 on the economic side were soon filled in during the following months. In short, before there was any serious fighting, the Anglo-French alliance had provided itself with an excellent paper constitution. But the constitution did not work very well; the excellence of its outline had not sufficiently been filled

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in by detailed preparatory planning and mutual confidence between British and French administrators. These are the bricks and mortar of international administration and without them the best architectural plan cannot be made effective. They were still scarce when the incomplete edifice of the Anglo-French alliance came crashing down.

The foundations of the British-American alliance were laid down in exactly the opposite way. Its operation detail was being tried and tested before its obligations and principles were defined or avowed; its bricks were being made and cemented before there was any agreed design for the complete edifice.

As I see it [the Prime Minister wrote in the spring of 1941] we are confronted with the singular situation of two Great Powers entering upon an association before any attempt has been made by either to define the objective or the articles of the association.

The observation was just. The British Commonwealth was at war, America was at peace. The United States Government and Congress had accepted no contractual high-political obligations of any kind towards the United Kingdom. They were still insisting upon their full freedom of action when their action was determined for them by the Japanese attack upon Pearl Harbor and the German and Italian declarations of war. From the passing of the Lend-Lease Act right up to Pearl Harbor, the limits of British-American collaboration were set by the sovereign decisions of American democracy to keep out of the war.

So far [the Prime Minister said] all that has been agreed in effect is that Great Britain and her Allies shall be used as the agent to do the fighting, while American furnishes the means in the form of material and money.

Practical collaboration, however, extended far beyond the boundaries of this tacit agreement. Within the limits of 'all aid short of war', the United States Administration intermeshed its policies with British policies with a comprehensiveness which has seldom been surpassed by full military allies and which at that very time as not even approached by the formally Allied Governments of London and Moscow. As will soon be seen, the intermeshing was most striking in the sphere of economic action; but it also too place even within the politically difficult sphere of strategical planning. For the United States had to reckon with the possibility that they might sooner or later become entangled in the war, either by their own decision or by decision of the totalitarian dictatorships. In shaping their plans for defending the still-neutral American democracy, they found themselves inevitably and immediately entangled with the war-torn British democracy. From the summer of 1940 onwards, the British were making available to the Americans, just as if they were allies, full

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information about their military and scientific secrets. The Americans on their side were supporting the British with such military supplies as they could spare and were looking for ways and means of freeing themselves from the 'cash and carry' policy which set sharp limits to the growth of this support. Meanwhile, the United States Service Chiefs became convinced that it would be advantageous to discuss with British experts the higher strategy of a war in which America might possibly become involved. The approaches from the American side were at first hesitant; but, in the end, the British-American staff conversations were held at Washington between 29th January and 27th March 1941.

Out of these conversations came the first basic document of British-American strategical planning. It was an hypothetical document. It neither stated nor implied any American commitment nor implied any American commitment, but merely outlined an appropriate combined strategy 'should the United States be compelled to resort to war'. This outline of strategy was a compromised which in one important matter failed to satisfy the British. Whereas both parties were agreed upon the need to 'concentrate on the defeat of Germany and Italy and subsequently to deal with Japan', the British were afraid that an excessively home-keeping policy of United States naval forces in the Pacific might leave too much scope for Japanese initiative in the opening phases of the war. The British would have liked to gain an assurance of American help in defending the 'Malaysian barrier' pivoted upon Singapore—that 'indispensable card of re-entry' whose loss, they argued, would be 'a disaster of first magnitude, second only to the loss of the British Isles'. The Americans were unwilling to give any such assurance. They were not even planning to hold the Philippines in strength. They were determined to resist any appreciable dispersal of their naval strength in the Pacific beyond the defensive zone of the Pearl Harbor base. However, the British cherished a hope that they might persuade the Americans, later on, to change their minds. For it was agreed that the contact which had been made during the conversations of January to March should thereafter be maintained. A further conference on Pacific and Far Eastern Defence would be held later in the year with Dutch participation. Meanwhile, a British Joint Staff Mission would be sent to Washington as soon as possible and a corresponding American Mission to London, so that the polices and plans of combined strategy might be worked out in further detail and put 'smoothly and rapidly' into effect in the event of the United States joining the war.

Under elaborate 'cover',³³ the two Joint Staff Missions were in due course established. They did not at the time achieve very much. In

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particular, they did nothing to fill the dangerous gap in defensive plans against the Japanese. They did, however, have opportunity for exercising important influence in the zone where strategy overlaps production.³⁴ It had been resolved in the January-March military conference to establish 'a method of procedure which will ensure the allocation of military material, both prior to and after the entry of the United States into the war, in the manner best suited to meet the demands of the military situation'. In this recommendation, the thought of the Service Staffs merged with the theory of lend-lease. From the union of strategical and economic planning was born a fundamental principle of the British-American war partnership—the principle of a combined pooling of war-making resources.

The same principle had already begun to emerge, at a lower level, through the day-to-day collaboration of the two national administrations in their policies of supply. Raw materials policy offers some good illustrations. In this field, the needs of the British and the Americans and their capacity to render each other reciprocal service were very evenly balanced. The British, after the fall of France, had increasingly switched their import programmes to North America and were particularly dependent upon American supplies of iron and steel;³⁵ nevertheless, they still remained dependent upon other overseas territories of their own Empire, for the larger part of their material requirements. The Americans, despite the great resources of their own country and their close interlocking with Canada, required from the sterling area imports of raw materials no less important than those that they could themselves offer to the United Kingdom. Interwoven with this reciprocal dependence of supply interests was the interdependence of supply and blockade policies: if in some parts of the world the Americans could strengthen British efforts to cut off Axis imports at the source, in other parts British action could secure for the Americans materials that were essential for their 'war-preparedness programme'. Moreover, both countries had a common interest in preventing market prices from being raised against them. Within their own Empire and wherever possible elsewhere, the British had entered into long-term agreements which assured regularity of supply at stable prices; they could not tolerate the disruption of these arrangements through the growth of uncontrolled American competition. The Americans, on their side, saw the advantage of coordinating their buying policies

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with those of the British; failing this, the two countries would bid up prices one against th other and in the end each would be left shot of some raw commodities. For all these reasons, the elements of a combined raw materials policy began to be assembled, by one particular transaction after another, long before a Combined Raw Materials Board was thought of. The United Kingdom bought the whole crop of Egyptian flax and made an allocation sufficient for American needs. The United States bought the whole crop of manilla hemp and made an allocation sufficient for British needs. The British were already sole purchasers of many important staples produced within their own Empire; the Americans became sole purchasers of the exportable surpluses of Mexico and Brazil. The two countries, acting together, dominated the raw materials markets of the world. Each country, from its own stock pile, made provision for its partner's needs. Coordinated purchase, price control, allocation from one country to the other in accordance with the statistical demonstration of need—all these principles of a combined raw materials plan were clearly emergent before Pearl Harbor. What was still lacking was the central design of the plan and conscious avowal of its theory and purpose.

In the field of industrial production, there had begun to occur before Pearl Harbour a similar intermeshing of policies and mingling of personalities, although the difficulties were great and the opportunities for reciprocity of service less striking. It was predominantly the British role to be takes of munitions, not givers; according to lend-lease theory, they made their return by fighting rather than by producing. Nevertheless, their experience of fighting and in producing weapons to suit the requirements of their own fighting forces had taught them lessons which could profitably be absorbed by American war industry; if the flow of munitions was from America to Britain, the flow of operational of experience was from Britain to America. In the technique of war production, each had something to teach the other.³⁶ At the beginning, it is true, neither country had made full use of these opportunities. By the theory of 'cash and carry' the British were free to go shopping in the United States as if it were a vast Woolworth store. Provided they were able to pay on the nail, their purchases were of no concern to the United States Administration. In consequence, the British Purchasing Commission had established its headquarters in New York and staffed itself chiefly with commercial men. The placing of British war contracts during the

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first period of the war was of indirect value to American defence because it laid foundations for the expansion of American war industry; but it involved little contact between British and American Service personnel, administrators and technicians. It was not until the fall of France that a new situation began to arise. The United States Government then initiated a modest programme of rearmament and established the National Defense Advisory Commission to coordinate it. The N.D.A.C. decided to set a limit to the value of the contracts that the British might place without official authorisation. The purpose of this control was to prevent the British from buying up supplies and absorbing industrial facilities which the Americans might need for their own defence; its effect was to compel British procurement officials to argue their case with American officials. The advent of lend-leaes carried the process a great deal further, since the procurement of all lend-lease supplies was placed completely in the hands of American Departments—the War Department, the Navy Department and the Treasury. These Departments established 'Defense Air Committees' to handle the various categories of lend-lease supplies invited the British to accept representation on these committees. This made it necessary for the British Purchasing Commission, the British Air Commission and the rest to shift the focus of their activities from New York to Washington and to change the character of their staffs. The change did not occur all at once, for there was still plenty of work to do in handling the old contracts; but the new work coming in necessitated continuous administrative and technical collaboration with American officials. Moreover, there arose on the American side an increasing demand for 'user' justification of British munitions requirements. This meant that British Service personnel had to be associated with the British civilian officials who were handling the supply problems. Both the military men and the civilians became absorbed in practical day-to-day business with their opposite numbers among the Americans.

There was, of course, some discordance as well as harmony in these close relationships. Even on the British side,³⁷ there were some divergences of outlook between Service representatives and Supply representatives; for while the former were apt to put their main emphasis upon allocations of American output for the battles that British forces would have to fight in the near future, the latter looked forward to the output that would come from American production lines many months and years ahead. Fortunately, the task of holding a fair balance between these two points of view was a manageable one; the close coordination of Service and Supply policy by the

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War Cabinet, reflected as it was in Washington by the quasi-federalistic organisation of the British Supply Council and the brilliant leadership of Mr. A. B. Purvis, was sufficient guarantee that rough justice would be done to both side. Here is is the production side that needs to be examined. British policy in Washington, formulated in large measure by Monnet's planning mind and propagated by the persistence and persuasiveness of Purvis, made demands upon American industry that were far in advance of contemporary American opinion. The British put forward the idea of a 'Victory Programme' which would stretch American industry as it had never been stretched before. The process whereby Americans in key positions became converts to the idea and, in a collaboration which cut right across national divisions, worked with their British colleagues to transform it into an effective policy, would make—if there were time to tell it—a fascinating chapter of this history. Time must at least be found to explain the concept of a Victory Programme; for it was destined to occupy a central and permanent place in the foundations of British-American economic planning.³⁸

One cardinal element in the concept may be illustrated by two rows of figures chose at random from a long statistical document composed in London during August 1941.

United States, United Kingdom and Canada: Output and Supplies of War Equipment

Item	Output		Supplies
	July–September 1941	October–December 1942	Stocks at June 30, 1941	Stocks at June 31, 1941, plus total output July 1941 to December 1942
AIRCRAFT 14 A HEAVY BOMBERS
United States	55	770	119	2,112
U.K. and Canada	198	1,023	154	3,646

The document of which these figures are an exemplar was given various names. Sometimes it was called the Stacy May document; sometimes the Stimson Balance Sheet. These titles did justice to the important part played by two Americans in bringing the document to birth. But it might with equal justice have been called the Purvis document—since it represented a climax of Purvis's labours—or the Monnet Balance Sheet—since it embodied a technique that Monnet had been using far back in the days of the Anglo-French alliance

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the best name of all is the one which ultimately stuck—the Anglo-American Consolidated Statement.

It was a statistical fact. It made no attempt to set targets for production, but restricted itself to realistic forecasts of output under existing programmes and of stocks up to the end of 1942. Under each head, its estimates were comparative: on one line the figures for the United States, on the next the figures for the United Kingdom and Canada.³⁹ The contrasts that these figures illuminated were in part contrasts of military experience and Service policy. The Americans, for example, were producing a lower ration of ammunition per gun for field artillery than were the British, but a higher ration per gun for anti-aircraft artillery. They were planning to produce large quantities of light tanks while the British and Canadians were switching over completely from light tanks to medium and heavy tanks; they were specialising on light and medium bombers while the British were specialising on heavy bombers; they were aiming at producing large quantities of small bombs while the British were concentrating increasingly on large bombs. It was useful to put a spotlight upon these qualitative differences in production trends. But it was still more useful to demonstrate the quantities. In some items—for example, medium and light bombers, merchant ships, light tanks, army artillery—American output for the eighteen months from June 1941 to December 1942 would exceed British and Canadian output: in a second group—e.g. fighter aircraft, A.A. ammunition, machine guns—the two outputs would be approximately equal: in a third group—e.g. heavy guns, heavy and medium tanks, tank and anti-tank guns—British and Canadian output would exceed American. In overall production, Britain and Canada would throughout the greater part of the period still be ahead of the United States; but towards the end of 1942 the United States would take the lead. However, since they had so much leeway to make up, their stocks of war material would be considerably lower, even at the end of 1942, than the stocks possessed by Britain and Canada.

These cold rows of figures were not very flattering to the United States. Their population was more than 2½ times the size of the combined British and Canadian populations and their superiority of productive capacity was even greater; but they were not as yet seriously fulfilling their promise to be 'the arsenal of democracy'. The Anglo-American Consolidated Statement punctured a good deal of facile oratory. And this precisely was what its authors,

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American no less than British, had intended. Purvis had designed it as a lever for shifting the obstacles to the expansion of American war industry and as an aid in securing the allocation of American munitions in accordance with strategic need; Secretary Stimson and his American allies had designed it as a new and effective weapon in a campaign that they had been waging in Washington throughout the summer. Hitherto, the expansion of American war production had been achieved almost entirely by new additions to American productive capacity rather than by switching over existing capacity to the tasks of war; in consequence, the flow of war output was postponed while civilian production boomed. The Office of Production Management,⁴⁰ which exercised some rudimentary control over American industry through the instrumentality of a primitive priority system, was in the main reluctant to impose restrictions upon the civilian boom; but Secretary Stimson argued that such restrictions were immediately necessary if war production was to be expanded to the level of war needs. But how were war needs to be measured? The disposition hitherto had been to restrict them to the requirements of visible military manpower in the United States—approximately two million men in training—plus the appropriations for lend-lease aid authorised by Congress. Such measurements were not in any way related to the strategical facts. If the United States, in combination with the fighting democracies, were to produce the tools 'to finish the job', it was necessary to take the measure of the job. What was wanted was a statement of production requirements to outmatch the Axis powers.

This conception found expression on the highest political level in a personal message from the Prime Minister to the President on 25th July 1941.

We have been considering our war plans [Mr. Churchill wrote[ not only for the fighting of 1942 but also for 1943. After providing for the security of essential bases, it is necessary to plan on the largest scale needed for victory.

Victory, he said, might conceivably come by an internal convulsion or collapse of the enemy, brought about by blockade, bombing and propaganda; but plans must also be made to liberate Europe by force of arms.

If you agree [the Prime Minister continued] with this broad conception …, we should not lose a moment in

1. framing an agreed estimate as to our joint requirements of the primary weapons of war, e.g. aircraft, tanks, etc.
2. thereafter considering how these requirements are to be met by our joint production.'

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These sentences contained the complete conception of a Victory Programme. To establish the facts about existing production and stocks, the statisticians of the two countries had already been called in. To determine the extra output required to outmatch the Axis powers, the military planners must now be called in. To fill the gap between existing production and the requirements for victory, orders must thereafter be given to government departments and industry by the highest political authorities of the associated democracies.

The United States Government endorsed this conception. On 3rd September, Mr. Winant, writing from the American Embassy in London, gave the Prime Minister the names of the Americans who would be going on the Anglo-American mission to Moscow and informed him at the same time that high-ranking staff officers would attend a preliminary conference in London to discuss with their British colleagues long-term production requirements and the allocation of existing production. It had not been part of the original plan to telescope discussions on the Victory Programme with the discussions on aid to Russia; but the two projects fell conveniently together. The new and heavy commitment to sustain Russian resistance⁴¹ underlined the need for a rational procedure of allocating resources from the combined British-American pool and for planning a productive effort which would make the pool large enough to satisfy the three major claimants upon it—belligerent Britain, belligerent Russia and rearming America.

The work achieved in the London and Moscow discussions fell short of full comprehensiveness. The supplies to be made available for Russia up to 30th June 1942 were listed in the first Moscow Protocol. As an outcome of the London conference, military requirements in the British sphere of strategical responsibility (as defined in the Washington Staff Conference of January–March ) were enumerated up to the end of 1942 in four annexes: (1) Royal Navy and Fleet Air Arm, (2) Army, (3) Air Force, (4) Merchant Shipping. The missing element in the Victory Programme was a statement of the requirements in the United States sphere of strategical responsibility. The United States representatives at the London conference were not ready to submit figures; it was in consequence decide that the American requirements should be worked out subsequently in Washington.

Even with this notable gap, the demands that the military planners made upon British and American war industry were truly formidable. And, since the limit of the upward climb of British industrial production could already be forecast, these demands were predominantly a challenge to American industry to launch itself at last upon the strenuous whole-hearted mobilisation of its war strength. This was

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precisely what the apostles of the Victory Programme, both American and British, had from the very beginning intended.

It seemed for a time as if their hopes would be disappointed. Autumn drew into winter and nothing new or important seemed to be happening at Washington. Then came Pearl Harbor. The faith and works which had brought the Victory Programme to birth achieved their reward on 6th January 1942, when the President announced to Congress the 'letter of directive' that he had sent to the responsible departments and agencies of the United States Government—to produce in 1942 60,000 airplanes, 45,000 tanks, 20,000 anti-aircraft guns, 8,000,000 deadweight tons of merchant shipping: in 1943 to produce 125,000 airplanes, 75,000 tanks, 35,000 anti-aircraft guns, 10,000,000 deadweight tons of merchant shipping. The production targets for American democracy, the greatest industrial power on earth, were at last set high.

The British-American partnership could not indefinitely have survived on the basis of the limited liability of one partner and the unlimited liability of the other; had it not been completed, it must sooner or later have been relaxed. However, when Pearl Harbor did complete it, its structure took shape with a rapidity which would have been quite inconceivable had it not been for the work of preparation—in part an unconscious growth, in part the product of conscious planning—which has been reviewed above. To consider further the example that was last discussed: 'victory programming' ceased henceforward to be the tactical weapon for a specific occasion and became instead a continuous activity of the associated Governments. Each of its three elements endured in permanence. On the side of supply, the Anglo-American Consolidated Statement, amplified and kept up to date under the oversight of the Combined Production and Resources Board, provided the objective data which were indispensable for allocating munitions in accordance with strategical need and for controlling realistic production programmes. On the requirements side, the Combined Chiefs of Staff, with their ancillary organisations continuously at work, defined the strategical requirements, or for lowering requirements to the level of production possibilities (no to mention the reshuffling of output that was necessary to meet the rapidly changing conditions of warfare) the two administrations maintained continuous contact with each other at all levels, both through the mechanism of the Combined Boards and otherwise. The final decisions were, of course, taken by the supreme executive authority in each country.

Naturally, it is not suggested that perfect institutions and procedures of inter-Allied collaboration were achieved all at once or, indeed,

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that they were ever achieved. Three things need to be stated in rather crowded juxtaposition with each other: first, that invaluable, preparatory work had been done before Pearl Harbor; secondly, that Pearl Harbor, by a decisive stroke, pushed this work a long way further forward; thirdly, that the work, even then, needed to be expanded and deepened in a continuing process of effort and experiment amidst the tests of war.

The interweaving of these strands may possibly best be made clear by reverting to simple narrative. For starting point, we may take the embarkation of the Prime Minister at a Scottish port on 13th December 1941. It was from a Scottish port that he had embarked four months earlier on the Prince of Wales for his Atlantic Charter meeting with President Roosevelt at Placentia Bay in Newfoundland. But the Prince of Wales was now lying at the bottom of the sea off the east coast of Malaya; it was her sister ship, the Duke of York, that he made his December journey. This time his appointment with the President was in Washington. He was accompanied by Lord Beavorbrook, the Chiefs of Staff, and a party of experts larger than that of the previous voyage. The Prime Minister and his party constituted in fact, a kind of itinerant Defence Committee of the War Cabinet, competent to handle the problems both of operations and supply.

By the time they reached the United States they had got through a great deal of work. They had, to begin with, produced a document which the American Chiefs of Staff discussed paragraph by paragraph with their British colleagues. From these discussions emerged the combined war plan of the new alliance. For Germany, it not for Japan, this plan was destined to be carried out in subsequent year almost to the letter. They, moreover, outlined a complete design of the machinery whereby the new alliance would order its business. Each of the two combining countries, they believed, needed to equip itself with an adequate national organisation complete in its component parts, both strategical and economic and properly coordinated under responsible political authority. The interweaving of these national organisations could then be achieved through a series of joint organisations, some for action in short term, other for long-term preparations. The institutions to be set up on a combined British-American basis were listed as follows:

1. Permanent joint planning organisation (all Services).
2. Joint supply board, to deal with production, raw materials, allocation, etc.
3. Joint allocation committee to deal with naval, military and air weapons.
4. Joint shipping committee.
5. Perhaps some other joint bodies, e.g. for economic warfare.
   

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The decisions taken at the Washington Conference embodied a significant modification of terminology: the word 'joint' was restricted to inter-Services collaboration within one nation; for international and specifically for British-American collaboration, the word 'combined' was chosen. In substance, the structure of 'combination' that was agreed upon followed the British proposals very closely. Most important of all was the emergence of the Combined Chiefs of Staff as practical working institution. For a time, the British proposal for a single combined strategical directorate was deflected by an American proposal to establish an 'appropriate joint body' to supervise strategy in one area only, the short-lived ABDA area;⁴² but it was in the end agreed that there would be danger in building 'a pyramid of authorities' to oversee operations in separate areas. The unity and balance of combined effort in a global war would be ruined if strategical planning and direction were parcelled out among a number of ad hoc bodies, each imprisoned within its own partial view of the war and each fighting for its own hand. It was instead judged essential to impose upon a single body, the Combined Chiefs of Staff, undivided responsibility for advising the associated Governments on war policy in all areas.

The Combined Chiefs of Staff rapidly developed a sound working practice. There was no fusion of the two national Staff organisations; each continued to act as before within its own government framework. The two national bodies came fully into combination only when they were assembled in the periodical conferences which became for the remainder of the war the landmarks of strategical decision. At each of these conferences, the Combined Chiefs examined in joint session papers originating from the planning staff of one nation or the other. Between each conference and its successor there was an organised continuity of thought and decision. It was centred upon Washington. This was a reversal of the arrangements foreshadowed before Pearl Harbor; for at the conference of January–March 1941 it had been agreed that strategical control of the combined war effort—should American join the war—ought to be double-centred, in Washington and London. However, it would in practice have been impossible to carry on strategical discussion in two places at the same time; one place or the other had to be chosen and the decision to choose Washington was a wise one, seeing that the British were always readier to delegate authority to their overseas representatives than the Americans were. The Joint Staff Mission in Washington, representing the British Chiefs of Staff. This weekly conference was the embodiment, between full conferences, of the Combined

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Chiefs of Staff. It had common offices, a combined secretariat and a combined planning staff—though the latter was seldom employed to capacity except during full conferences, when it submitted papers along with those of the national planning organisations.

Three other combined institutions emerged from the Washington Conference of December—January 1942.⁴³ First, there was a Munitions Assignment Board, operating under the Combined Chiefs of Staff but divided into a Washington committee and a London committee, each of which was put under a civilian chairman. The Munitions Assignment Board was established to give effectiveness to the principle that 'the entire munitions resources of Great Britain and the United States will be deemed to be in a common pool' from which assignments must be made, both in quantity and priority, in accordance with strategic needs. The second new institution was a Combined Shipping Adjustment Board, which will be discussed in the next chapter. Finally, it was agreed at the Washington Conference to establish a Combined Raw Materials Board with headquarters in Washington. It would be the function of the Board to plan the development, expansion and use of all raw material resources under the jurisdiction or control of the two Governments and to make such recommendations as were necessary for executing the plans: these recommendations, it was stated, 'shall be carried out by all parts of the respective Governments'. Outside the limits of direct British or American legal control, the Combined Raw Materials Board was instructed to pursue by 'collaboration' the same objectives of developed raw material resources and procuring them to serve the combined war effort.

The Washington Conference had established a good part of the machinery outlined in the British proposals; but it had left certain gaps. If one looks at the general picture from the point of view of shipping—which up to the early spring of 1943 was the most dangerous British-American shortage—there was need for a Combined Food Board alongside the Combined Raw Materials Board; for food and raw materials together constituted the overwhelming bulk of United Kingdom import needs. From 1943 onwards the need for a Combined Food Board would be even greater; for in that later period food shortages were destined to reflect not merely a scarcity of shipping but an insufficiency of production at source. However, the failure to institute combined planning for food was not the only, nor the chief omission of the Washington Conference. There was a big gap in the arrangements made for planning war production. As the

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British Supply Council soon pointed out, effective 'victory programming' contained the following elements:

determination of strategic concept and its expression in military requirements—translation into terms of raw materials necessary for their production—production itself—assignment of finished weapons—shipping.

At Washington, all these elements except one had been recognised. In the institutional structure that had been set up there was a gap between the Combined Raw Materials Board and the Munitions Assignment Board. 'Production itself' had not been provided for in the system of combined organisations.

In circumstances that will be explained below, these two gaps were filled a few months later. A Combined Food Board and a Combined Production and Resources Board were established in June 1942. Thereby, the proposals for combined organisation that had been drafted on board the Duke of York were completed in full.

It must not, however, be imagined that the working constitution of the British-American alliance (if the phrase may be allowed) was merely of chiefly the product of a single well-drafted paper plan. Once again, it is necessary to recall the long period of trial and error ,of natural growth and deliberate planning, during the eighteen months before Pearl Harbor. To cite once more the example of raw materials: on the eve of the Washington Conference and while it was in session, the British and American officials who, in one particular transaction after another, had already carried so far the principles of combined procurement and allocation, were at work on schemes designed to give full regularity and formality to their hitherto unsystematised collaboration. What they had in mind was the idea of a permanent Raw Materials Conference. However, the idea which took shape at the higher level was better than this. The Conference would have been unwieldy; but the two-man Board possessed an almost inspired simplicity, which was in no way impaired when three-man Boards were created later on by calling in Canada. In the sphere of raw materials policy as elsewhere, this streamlined construction quickly became an assembly point for all the techniques that had been proved and all the experience that had been gained during the past months of preparation.

In one important respect, the new institutions took shape in a manner that was less logical and tidy than the British planners had forecast. As a preliminary to the dovetailing of British and American organisations, they had assumed the establishment of a complete and well coordinated system of organisation within each of the two countries. Here, of course, they were reasoning from British experience; for, as has already been seen, a mature and effective system of War

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Cabinet control had been established before Pearl Harbor.⁴⁴ To adapt this system to the requirements of the American alliance, it was sufficient to make the newly established Ministry of Production the focal point of business within the sphere of the Combined Board. It might have seemed that the Minister (Mr. Lyttelton) would find his opposite number in Mr. Nelson, the Chairman of the War Production Board; but this expectation would have under-rated the vigour of jurisdictional conflict between the departments and agencies at Washington and overrated the capacity of any single authority to make its nominal powers effective.

It is for American historians to tell the story of how coordination began to be achieved amidst the interdepartmental struggles that were rife in Washington during 1942:⁴⁵ here it need only be pointed out that the orderly pattern of the Combined Boards was at best an anticipation, rather than an expression, of a similar order within the American Administration. All the same, the Combined Boards offered levers which could be used by those Americans who saw the need for a more comprehensive and balanced system of planning for their own war economy. The studies instituted by one Board or another frequently identified dangerous frictions, unbalances or shortcomings of the common war effort which could only be rectified by action taken in Washington. When Washington did decide to take such action, it was sometimes able to make good use of British war experience: for example, that experience was drawn upon in November 1942 for establishing the Controlled Raw Materials Plan⁴⁶—the first effective instrument that the Americans discovered for allocating their economic resources amongst the competing claims of war.

At this point it will be useful to pause for some reflection upon the real terms of the British-American war partnership. In one sense, it contained an inequality reminiscent of the Anglo-French alliance. The United States possessed over Britain an even greater superiority of potential war-making resources than Britain had possessed over France. Washington, therefore, took the place that London had earlier held as the headquarters of inter-Allied planning and decision. The British, like the French before them, became 'the visiting team'. There were, however, some important weights in the opposite scale. The British war economy was highly developed when the American one was still primitive. Even when the effort of both countries was at peak, the British were more tightly mobilised than the Americans; if their resources were smaller, they were making more intensive use of them. This extra effort produced its effect on

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the battle-fronts. As we saw, almost until the end of the long period now under review, British army deployment was roughly at parity with American; at the beginning of the period it was, of course, very much greater.⁴⁷ Finally, there was the advantage that has already been pointed out in the British machinery of planning and government coordination.⁴⁸ All these considerations together may help to explain what otherwise might have seemed paradoxical—that, while Washington was chosen as the planning centre, the initiative in such plans as have so far been described came chiefly from the British side.

However, in tracing the evolution of the Combined Boards as working institutions, it would be difficult and positively misguided to attempt to disentangle British from American initiative and action. More important than the separate national influences was the growth of a common attitude to the salient problems which the official staffs of the Boards—working together in the same offices with common terms of reference—were called upon to handle. Illustration may be given from the operations of the Munitions Assignment Board. It was the body most closely linked with the central institution for strategical planning, the Combined Chiefs of Staff. At the same time, its decisions were of immediate and great consequence to the war-economic structure of Britain, since the disposition of British manpower was bound in large measure to be governed by the assignment of munitions out of the common pool.⁴⁹

The pool was not placed under a single centralised management. The assignment of munitions could only be satisfactorily achieved on the basis of very full information about the operational situation, the state and equipment of the troops, the requirements for training in each separate theatre of war, and so on. To have gathered all this mass of information into one centre would have necessitated an immense staff largely duplicating the work of the Service Departments both in Britain and the United States. The facts of geography demanded that the Munitions Assignment Board should be split into two parts. There was a Board in Washington and another in London. Later on, a separate Board for the assignment of Canadian production was established in Ottawa. Assignment committees were also established in Australia and India when these countries began to

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produce disposable surpluses of weapons or ammunition. On these committees, British and United States representatives sat with representatives of the producing country.

However, it was the Boards in Washington and London that counted for most. There were about forty claimants upon the Washington-London pool of weapons. Since endless confusion would have arisen if each claimant had been free to submit his requirements in both places, the whole body of claimants was divided into groups, a British group and an American group. With some exceptions,⁵⁰ the members of the British Empire and the European Allies fell naturally into the British group because they were equipped for the most part with weapons of British type, and in addition, were closely associated with British forces in the field. Equally naturally, the South American Republics and China fell in the American group. Russia, as has been seen, was a special case; her claims were separately negotiated and defined in a series of Protocols.

The procedure of the London and Washington Boards was as follows:

1. Each of them ascertained the requirements of all members within its own group.
2. Each of them, so far as it was able, satisfied these requirements from the stocks of munitions produced at home.
3. Each of them thereafter approached its partner with the purpose of making good the deficiency in its own resources.

Between the London and Washington Boards there was a genuine two-way traffic of assignment. From time to time Britain was able to supply important items of equipment in which the United States was deficient—for example, radar equipment. A pleasant exchange of compliments took pace between the London and Washington Boards after the successful invasion of North Africa: the Americans thanked their British friends for supplies furnished to the United States Forces; the British thanked their American friends for the Sherman tanks and other equipment which had helped the British Army to win its final Libyan campaign. Moreover, the constant and pressing necessity for stringent economy in shipping space was the occasion for very strenuous British efforts to supply the growing American forces in the United Kingdom with maximum quantities of general engineering goods, constructional material,

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accommodation, stores, clothing and other equipment. It was here that reciprocal aid found its greatest scope.

When all this had been said, it remains true that the balance of munitions assignment was heavily in favour of the Washington Board; for it controlled the total surplus on which the United Nations as a body and the United Kingdom itself had need to draw.⁵¹ But in 1942 it might well have seemed mockery to talk of a surplus. It was hardly possible in that year to raise the horizon of munitions assignment more than a month or two ahead. There was fierce day-to-day competition for supplies which everywhere seemed inadequate in relation to need. Nor was the definition of need an easy matter. The American Service Departments were naturally anxious to build up as rapidly as possible the military, naval and air power which ultimately would exercise the predominant weight against German-dominated Europe and Japanese-dominated Asia. There was, however, real danger that Germany and Japan might win the decisive battles while the Americans were still building up their predominance of power. The British representatives on the Washington Board and the British Chiefs of Staff continually maintained that the first charge on the munitions pool must be

the provision of full equipment for existing units in available and active theatres of war with such orders of priority as may be assigned to these theatres.

This was an argument for giving priority to the immediately impending battles rather than to the more distant campaigns. It was at the same time an argument for British claims as against American claims. The argument was not one that could win easy success in Washington. For a time after Pearl Harbor, the British cash contracts and lend-lease follow-up orders⁵² were mainly diverted to the use of the United States.

The Munitions Assignment Board in Washington, like its counterpart in London, did most of its business in committees—particularly the three big standing committees for ground forces, navy and air. The American Service representatives on these committees expected their British colleagues to justify in meticulous detail every statement of British requirements; consequently there had to be a constant cabling to London for information wherewith to answer the innumerable American questions. There was another and more deep-seated impediment—the lack of continuous and concrete strategical guidance. For although a general strategical plan had been agreed in the Washington Conference and although the Washington Board had

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received a general instruction to make assignments in the light of strategic policy, changing operational conditions and realities of production, a good deal of time elapsed before strategic policy was closely defined in terms of time and place, or before the realities of production were adequately assessed. By April 1942 the British were ready to submit their Order of Battle for 1943; but at the end of 1942 the Americans were still not ready to submit theirs.⁵³ The instruction to assign munitions in the light of strategic policy itself remained so largely undefined. There were times when the British took almost a despairing view of the munitions assignment procedure and felt tempted to conclude that Washington would never to justice to the immediate and urgent requirements of British forces deployed on active fronts. But, by the time the Board had completed its first year of life, it had by its own good performance effectively answered this pessimism.l At the beginning of 1943, the British representative on the ground forces committee in Washington reported to London that reasonable British claims were almost always satisfied, provided they were given a convincing operational backing.

The chairman of the Washington Board was Mr. Harry Hopkins. His personality and close association with the President no doubt contributed a good deal to the equitable and efficient operation of the Board. Another factor in its growing success was the work of its Statistical Analysis Branch under the direction of Mr. Lubin, who had in time past worked on close association both with Mr. Hopkins and the President.  At each weekly meeting of the Board Mr. Lubin presented statistical data relating to stocks, production, and requirements of munitions. It was his practice to concentrate every week on a single outstanding problem—small-arms ammunition, changes in tank programme, changes in aircraft programmes, the use of shipping, etc., etc. His golden rule was simply to set out the facts clearly in his tables and graphs, to put the spotlight on the discrepancies and the disparities, but never to propose a remedy. That was a matter for the chairmen to take up subsequently with the departments and other interests.

The Munitions Assignment Board did its work well and introduced an essential element of order into the conduct of the war. The intensity of British mobilisation, the proportions in which British manpower was to be divided between the Services and industry, could not have been determined in advance without reasonably firm knowledge of the

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supplies that would be allocated to Britain from the Washington pool.

But allocations from the pool were themselves ultimately governed by the quantity and quality of the inflow into the pool. Underlying the problem of munitions assignment was the problem of munitions production. It will be recalled that the institutional structure erected at Washington in January 1942 contained a gap on the side of production. A Combined Raw Materials Board had been set up, but nothing else. The lack of an agreed forum for the joint examination of production programmes soon made itself felt.

The British already had much experience of the problems involved in translating strategical plans into military requirements, in adjusting these requirements to the possibilities of production, and in achieving thereby a production programme that was well-balanced in its component elements and feasible in its total. Even before Pearl Harbor, the machinery for handing these problems was rendering good service; after Pearl Harbor it was further improved through the Joint War Production Staff, a committee of Service and supply ministers meeting with their experts under the chairmanship of the Minister of Production. On the American side, there was no comparable organisation or experience. The problems were new, the machinery for handling them still undeveloped.

There was, at first, no more definite guidance to the American effort of production than that given in the famous 'objectives' announced by the President in January 1942. By this announcement, the sights were at last set high for American war industry. This was precisely what the planning minds in Washington, British and American alike, had long been working for. Nevertheless, the same people—for example, Mr. Stacy May and his colleagues in the Statistics and Programmes Division of the War Production Board—were very soon working to get the 'objectives' scaled down. In their change of emphasis there was no real inconsistency. Before Pearl Harbor American industry was falling short of the needs of war because it was attempting too little. After Pearl Harbor a different danger arose. American war industry began to attempt too much.⁵⁴

A war effort may fail either because the production sights are set too low or because they are set too high. For example, it was calculated by the Ministry of Production in the autumn of 1942 that the United States and the United Kingdom were committed between them to produce in 1943 enough tanks to equip 200 armoured divisions, with 100 percent of reserves for each division. It was calculated that they were planning to produce in the same year 22,000 million rounds of ball ammunition—although the Desert

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Armies of the British Empire, in all their Egyptian and Libyan campaigns from 1940 to 1942 expended only 200 million rounds.⁵⁵ If the combined resources of the United Kingdom and the United States (including their resources of ocean-going tonnage) had been unlimited, such profusion of specialised output might have done little harm, provided it was not bought at the expense of quality. But, since industrial capacity and manpower were not unlimited, since rubber and some other essential materials were critically deficient, since ships were scarce, the super-abundance of tanks and ball ammunition and all the rest of the over-produced items must inevitably be paid for by a deficiency of ships or landing craft or other essential equipment. The immense expansion of United States Army programmes, in particular, was threatening to engulf vast resources in the production of equipment which would not be required for years to come and which it might never be possible to ship overseas. Meanwhile, in the campaigns immediately ahead, the fighting forces of America and the British Empire were likely to find that they had been deprived of urgently necessary equipment through the waste of resources caused by misguided efforts to provide them with 'the maximum of everything'.

These were predominantly American problems, and it is for American historians to explain in detail how they were tackled. But indirectly they were British problems also; since the allocation of resources in the British war economy could be given its final shape only within the context of a combined British-American war-economic plan. The most effective way of making that plan realistic would have been to define for specific periods ahead the Combined Order of Battle and the combined production programme necessary for its realisation. As has been seen, attempts were made to do this; but in 1942 they did not succeed.⁵⁶ However, in partial compensation for the failure, and in the hope of winning success later on, a new British-American institution was created. The Combined Production and Resources Board was set up in June 1942. It was a two-man Board, composed of Mr. Lyttelton, the Minister of Production, and Mr. Nelson, chairman of the War Production board. It was located in Washington, where Mr. Lyttelton was permanently represented by Sir Robert Sinclair.⁵⁷ The directive issue to it by the President and the Prime Minister gave it two duties to perform: first, to combine the two production programmes of the two countries into a single programme

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adjusted to all the relevant production factors and to the strategic requirements of the war as indicated by the Combined Chiefs of Staff: secondly, in collaboration with the Combined Chiefs of Staff, to assure the continuous adjustment of this combined programme to the changing military requirements.

The establishment of the C.P.R.B. did not magically solve the intractable problems discussed above. The duties laid upon the new Board, if read literally, could not possibly be fulfilled; for, like all the other Combined Boards, it had power merely to make recommendations, not to take decisions nor to issue orders. It was only be decision and command of the two sovereign Governments that the two national production programmes could be combined in a single programme realistically related to strategical plans. So long as the two Governments postponed their task, the Board was compelled to limit the scope of its work. It focussed attention upon major 'unbalances' of the production programmes and suggested remedies for the most dangerous 'bottlenecks', thereby providing a lever for those British and American reformers who were struggling to bring order out of disorder. Sometimes it prepared the way for direct inter-government discussions on a high political level. For example, when the President took direct action in October 1942 to cut back the inflated programmes of the American Service departments, the British Minister of Production crossed the Atlantic in the hope of achieving definite enough agreements—about production programmes, the assignment of munitions, and shipping—to enable the British finally and irrevocably to allocate between 'fighting and fabrication' their last reserves of manpower. Agreement was reached. It was confirmed in an interchange of messages between the President and the Prime Minister. Thereafter, it had, if possible, to be speeded 'down the line' in Washington. Here again the C.P.R.B. was called upon to provide 'leverage'. Its work was valuable, but should not over-valued. If difficulties which in 1942 had sometimes seemed insuperable began in 1943 to be overcome, this was due above all to the immensely swelling flood of American production.

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