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FDR INTRODUCES HIS LEND-LEASE IDEA -
1940
Lend-Lease Press Conference
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Franklin D. Roosevelt.
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Roosevelt's Lend-Lease Press
Conference.
It follows the full text transcript of
FDR's Lend-Lease Press Conference, delivered at
the White House in Washington D.C. - December 17, 1940.
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THE PRESIDENT:
When I came back yesterday I began to note
intimations that this inaugural party was
getting out of hand—all these chairmen, et
cetera, trying to make a real party out of it,
and I was trying not to. |
In other words,
simplicity, I still think, should be the
keynote; and I am trying to catch up and find
out what people have been doing while I was
away.
Outside of that I have been trying to catch up
on quite a number of other things.
I don't think there is any particular news,
except possibly one thing that I think is worth
my talking about. In the present world situation
of course there is absolutely no doubt in the
mind of a very overwhelming number of Americans
that the best immediate defense of the United
States is the success of Great Britain in
defending itself; and that, therefore, quite
aside from our historic and current interest in
the survival of democracy, in the world as a
whole, it is equally important from a selfish
point of view of American defense, that we
should do everything to help the British Empire
to defend itself.
I have read a great deal of nonsense in the last
few days by people who can only think in what we
may call traditional terms about finances. Steve
[Mr. Early] was asking me about it this morning,
and I thought it was better that I should talk
to you than for Steve to talk to you; but I gave
him one line which he would have used this
morning if anybody had asked him, and that was
this: In my memory, and your memory, and in all
history, no major war has ever been won or lost
through lack of money.
I remember 1914 very well, and I will give you
an illustration: In 1914 I was up at Eastport,
Maine, with the family the end of July, and I
got a telegram from the .Navy Department that it
looked as if war would break out in Europe the
next day. Actually it did break out in a few
hours, when Germany invaded Belgium. So I went
across from the island and took a train down to
Ellsworth, where I got on the Bar Harbor
Express. I went into the smoking room. The
smoking room of the Express was filled with
gentlemen from banking and brokerage offices in
New York, most of whom were old friends of mine;
and they began giving me their opinion about the
impending world war in Europe. These eminent
bankers and brokers assured me, and made it good
with bets, that there wasn't enough money in all
the world to carry on a European war for more
than three months-bets at even money; that the
bankers would stop the war within six
months—odds of 2 to 1; that it was humanly
impossible-physically impossible- for a European
war to last for six months—odds of 4 to 1; and
so forth and so on. Well, actually, I suppose I
must have won those- they were small,
five-dollar bets— I must have made a hundred
dollars. I wish I had bet a lot more.
There was the best economic opinion in the world
that the continuance of war was absolutely
dependent on money in the bank. Well, you know
what happened.
Now we have been getting stories, speeches, et
cetera, in regard to this particular war that is
going on, which go back a little bit to that
attitude. It isn't merely a question of doing
things the traditional way; there are lots of
other ways of doing them. I am just talking
background, informally; I haven't prepared any
of this—I go back to the idea that the one thing
necessary for American national defense is
additional productive facilities; and the more
we increase those facilities—factories,
shipbuilding ways, munition plants, et cetera,
and so on—the stronger American national defense
is.
Orders from Great Britain are therefore a
tremendous asset to American national defense;
because they automatically create additional
facilities. I am talking selfishly, from the
American point of view—nothing else. Therefore,
from the selfish point of view, that production
must be encouraged by us. There are several ways
of encouraging it—not just one, as the
narrow-minded fellow I have been talking about
might assume, and has assumed. He has assumed
that the only way was to repeal certain existing
statutes, like the Neutrality Act and the old
Johnson Act and a few other things like that;
and then to lend the money to Great Britain to
be spent over here—either lend it through
private banking circles, as was done in the
earlier days of the previous war, or make it a
loan from this Government to the British
Government.
Well, that is one type of mind that can think
only of that method somewhat banal.
There is another one which is also somewhat
banal—we may come to it, I don't know—and that
is a gift; in other words, for us to pay for all
these munitions, ships, plants, guns, et cetera,
and make a gift of them to Great Britain. I am
not at all sure that that is a necessity, and I
am not at all sure that Great Britain would care
to have a gift from the taxpayers of the United
States. I doubt it very much.
Well, there are other possible ways, and those
ways are being explored. All I can do is to
speak in very general terms, because we are in
the middle of it. I have been at it now three or
four weeks, exploring other methods of
continuing the building up of our productive
facilities and continuing automatically the flow
of munitions to Great Britain. I will just put
it this way, not as an exclusive alternative
method, but as one of several other possible
methods that might be devised toward that end.
It is possible—I will put it that way—for the
United States to take over British orders, and,
because they are essentially the same kind of
munitions that we use ourselves, turn them into
American orders. We have enough money to do it.
And thereupon, as to such portion of them as the
military events of the future determine to be
right and proper for us to allow to go to the
other side, either lease or sell the materials,
subject to mortgage, to the people on the other
side. That would be on the general theory that
it may still prove true that the best defense of
Great Britain is the best defense of the United
States, and therefore that these materials would
be more useful to the defense of the United
States if they were used in Great Britain, than
if they were kept in storage here.
Now, what I am trying to do is to eliminate the
dollar sign. That is something brand new in the
thoughts of practically everybody in this room,
I think—get rid of the silly, foolish old dollar
sign.
Well, let me give you an illustration: Suppose
my neighbor's home catches fire, and I have a
length of garden hose four or five hundred feet
away. If he can take my garden hose and connect
it up with his hydrant, I may help him to put
out his fire. Now, what do I do? I don't say to
him before that operation, "Neighbor, my garden
hose cost me $15; you have to pay me $15 for
it." What is the transaction that goes on? I
don't want $15—I want my garden hose back after
the fire is over. All right. If it goes through
the fire all right, intact, without any damage
to it, he gives it back to me and thanks me very
much for the use of it. But suppose it gets
smashed up—holes in it—during the fire; we don't
have to have too much formality about it, but I
say to him, "I was glad to lend you that hose; I
see I can't use it any more, it's all smashed
up." He says, "How many feet of it were there?"
I tell him, "There were 150 feet of it." He
says, "All right, I will replace it." Now, if I
get a nice garden hose back, I am in pretty good
shape.
In other words, if you lend certain munitions
and get the munitions back at the end of the
war, if they are intact haven't been hurt—you
are all right; if they have been damaged or have
deteriorated or have been lost completely, it
seems to me you come out pretty well if you have
them replaced by the fellow to whom you have
lent them.
I can't go into details; and there is no use
asking legal questions about how you would do
it, because that is the thing that is now under
study; but the thought is that we would take
over not all, but a very large number of, future
British orders; and when they came off the line,
whether they were planes or guns or something
else, we would enter into some kind of
arrangement for their use by the British on the
ground that it was the best thing for American
defense, with the understanding that when the
show was over, we would get repaid sometime in
kind, thereby leaving out the dollar mark in the
form of a dollar debt and substituting for it a
gentleman's obligation to repay in kind. I think
you all get it.
Q. Mr. President, that suggests a question, all
right; Would the title still be in our name?
THE PRESIDENT: You have gone and asked a
question I have told you not to ask, because it
would take lawyers much better than you or I to
answer it. Where the legal title is would depend
largely on what the lawyers say. Now, for
example, if you get mixed up in the legal end of
this, you get in all kinds of tangles. Let me
ask you this simple question: You own, let us
say, a house, a piece of property, a farm, and
it is not encumbered in any way—there is no
mortgage on it rebut you have had some troubles,
and you want to borrow four or five thousand
dollars on it. You go to the bank and you say,
"I want to borrow four or five thousand dollars
on my house or my farm." They say, "Sure; give
me a mortgage."
You give them a mortgage, if you think you will
be able to pay it off in three or four years. In
your mind you still think you own your own
house; you still think it is your house or your
farm; but from the strictly legalistic point of
view, the bank is the owner. You deed your house
over to the bank; you pledge it, like going to
the pawnbroker. Let's take the other side of it:
The title to your gold watch is vested in the
pawnbroker. You can redeem it; you can pay off
your mortgage and get title to your house.
On this particular thing—let's say it's a ship—I
haven't the faintest idea at this moment in whom
the legal title of that particular ship would
be. I don't think that makes any difference in
the transaction; the point of the transaction is
that if that ship were returned to us in
first-class condition, after payment of what
might be called a reasonable amount for the ship
during that time—the other people might have had
a legal title or the title might have remained
in us; I don't know, and I don't care.
Q. Let us leave out the legal phase of it
entirely; the question I have is whether you
think this takes us any more into the war than
we are?
THE PRESIDENT: No, not a bit.
Q. Even though goods that we own are being used?
THE PRESIDENT: I don't think you go into a war
for legalistic reasons; in other words, we are
doing all we can at the present time.
Q. Mr. President, did you mean naval craft?
THE PRESIDENT: No, no! I am talking about
merchant ships.
Q. It is my understanding that this is all for
purposes of background, but at one point here I
was wondering whether you would attribute this
to the necessity for facilities and for
encouragement of production?
THE PRESIDENT: I think you can attribute
this—what we have been talking about— to me.
Q. Mr. President, would we take our own goods
abroad?
THE PRESIDENT: What do you mean—take our own
goods?
Q. As long as this is being made to our account
and we are lending it to Great Britain, would we
deliver the goods in Great Britain that are
going to be used in that way?
THE PRESIDENT: Oh, I suppose it would depend on
what flag was flying at the stern of the ship.
You can work it out any way you want. It might
be even a Bolivian flag. That question is a
detail.
Q. Would it be an American flag?
THE PRESIDENT: Not necessarily. That would bring
up another subject; that would bring up a
subject which might be a dangerous one, quite
frankly, of American sailors and American
passengers, et cetera, taking the American flag
into a war zone. You need not worry about that
one bit, because you don't have to send an
American flag and an American crew on an
American vessel.
Q. I was backing into the question that this
whole theory of yours doesn't involve amendment
of the Neutrality Act.
THE PRESIDENT: Right!
Q. You referred to future orders in this
connection; as I understand it, the orders the
British have given would go ahead on the basis
of existing contracts and would be paid for?
THE PRESIDENT: Yes, I think so. They have plenty
of exchange, you know. There doesn't seem to be
very much of a problem about payment for
existing orders, but there might be a problem
about paying for additions to those orders or
for replacement of those orders now.
Q. Is this a safe conclusion on what you have
said, that what the British are interested in is
to have us lend them the supplies?
THE PRESIDENT: That's the point. I am trying to
eliminate the dollar mark.
Q. Does this require Congressional approval?
THE PRESIDENT: Oh, yes, this would require
various types of legislation, in addition to
appropriation. Let me give you an example: Let's
take anything—a shell factory; and the present
shell factories are all filled up with orders a
year-two years—ahead; but the British need more
shells now, and the shell manufacturers say,
"that is all very well, but we have got to get a
new factory." And the United States Government
has ordered several new factories and put up the
money through the R.F.C. or some other way for
the capital. Well, if the British wanted a new
factory for additional shells, or went above
present orders, if we take that order over we
would do the financing of the factory just the
way we have done it for ourselves, thereby
increasing the productive capacity for turning
out shells.
Q. Mr. President, before you loan your hose to
your neighbor you have to have the hose. I was
wondering, have you any plans to build up
supplies? There has been a good deal of
discussion about lack of authority to tell a
manufacturer he should run two or three shifts a
day. There is no one now that has that
authority.
THE PRESIDENT: Isn't there?
Q. I don't believe so.
THE PRESIDENT: I think so, yes. After all, you
have to follow certain laws of the land. Of
course the law is, and always was that contracts
by the Navy, for instance (I used to place a
great many of them in the World War) —should be
signed by the Secretary of the Navy or the
Assistant Secretary of the Navy. Never, in the
history of the United States, has that power
been taken away from the two main contracting
departments.
That is a pretty important thing to remember. A
lot of people in the last week or two have
forgotten that fact. There never has been one
individual in this country, outside of the Army
or Navy, who could do anything more than
recommend very strongly that they do thus and
so, and supervise it—supervise keeping the
program up to date. If the program is not kept
up to date, there are lots of things that have
been done in the past, and would be done in the
future. That is what was done in the World War.
The number of perfectly crazy assertions that
have been made in the last couple of weeks by
some people who didn't grow up until after the
World War is perfectly extraordinary. They have
assigned all kinds of authorities and powers to
people in the World War that never existed,
except in the figment of their imagination. I
went through it; I happen to know.
Q. Mr. President, on your statement that we
never would get into war for legalistic
reasons—would you amplify that a little?
THE PRESIDENT: Only this, that I would not try,
from what I have said, to make it appear—who was
it who asked that question a while ago?
MR. EARLY: Jim Wright.
THE PRESIDENT: Jim Wright asked whether any of
these steps would be a greater danger to the
United States of getting into war than the
existing situation, and the answer is: "No, of
course not." In other words, we are furnishing
everything we possibly can at the present
moment. This will make easier a continuation of
that program. That's all there is to it.
Q. Mr. President, it is interesting about taking
over the future orders for the British, but Mr.
Knudsen says that the first half of that is
crucial. Can you do anything more than you are
doing?
THE PRESIDENT: Except efficient people; that's
what he is trying to do—push them.
Q. Mr. President, has the division of orders
been changed? It was 50-50 the last time.
THE PRESIDENT: That was a rule of thumb. In some
places it is 40-60, and in others 60-40.
Q. Mr. President, do any production delays at
the present time indicate any need for authority
to take over plants?
THE PRESIDENT: That is a thing I asked Steve
[Mr. Early] to lookup this morning.
MR. EARLY: No one is reporting today, sir.
THE PRESIDENT: That is a thing I asked Steve to
report on. No one reported today. But I think it
is fair to say there are two or three companies
under investigation.
Q. Mr. President, do you expect to place this
general idea before this session of Congress?
THE PRESIDENT: Either that or something similar.
Q. Within a few days?
THE PRESIDENT: No, probably not until the 3rd,
because the thing has not only to be worked out
here, but in London too.
Q. Mr. President, is there any plan under
consideration for building up our Defense
Program because of this?
THE PRESIDENT: Well, that's a pretty general
question; on what, for example?
Q. I wondered if you had any specific program
for building up any phase of defense.
THE PRESIDENT: You can't answer a general
question like that. If you ask about an article
that is coming along in good shape, the answer
is No. It depends on what you are talking about.
Before I left, I think we talked about the Navy
destroyer program which, in my judgment, was
completely insufficient because a lot of the
planned destroyers could not be laid down except
in turn. In other words, after No. 1 Destroyer
had been built and launched from the ways, then
they would start No. 31 of the destroyers on the
same ways, build that and launch it, and after
that was launched they would put No. 61 on the
same ways, so that No. 61 would not be launched
for perhaps four years from now.
Well, now, the answer to that program, which was
laid down by the Navy Department, was that in my
judgment it was too darned slow. And how can you
speed it up? By building more ways. So that was
an illustration of how the program as laid down
proved insufficient, and we are now studying how
we can build more destroyer ways.
Q. Mr. President, Mr. Knudsen said the whole
Defense Program was lagging pretty severely; do
you see anything in this picture that would
require you to extend the present limited
emergency?
THE PRESIDENT: No; that again is largely a
legalistic problem. It is a great question
whether it would speed it up or not—a great
technical question.
Q. Mr. President, when the Government refuses to
take in a union man on a defense project, don't
you think it is because the unions ask
exorbitant fees?
THE PRESIDENT: You would have to give me the
name of the man and information about the case.
Q. How about eliminating the Friday to Monday
blackout?
THE PRESIDENT: It depends entirely on the
particular type of industrial plant and the
conditions in the locality, and the type of
workmen that are used. There is no
generalization that is possible; and the one
thing we have to avoid, all of us, is
generalization. Now for example- you take down
here in the Washington Navy Yard, there are
certain very, very skilled trades; and there is
a shortage of labor in those trades. Because
there is a shortage, because there is no relief,
no additional labor in that trade, we probably
have to employ the people in that particular
trade, more than 40 hours; and for the extra
hours they will get time and a half for
overtime.
You take the other extreme— common labor;
there's plenty of it. For common labor it is not
necessary in that particular yard to work men
overtime; and yet you can run the yard six days
a week, or even seven days a week. It takes a
lot more planning on the part of management to
work it out, but you can employ one group of
common laborers the first five days in the week,
40 hours—that is, 8 hours a day; and then
another group you can employ on Tuesday,
Wednesday, Thursday, Friday and Saturday and
give them Sunday and Monday off; and another
group you can employ Wednesday, Thursday,
Friday, Saturday and Sunday and give them Monday
and Tuesday off; and in that way you can keep a
plant going seven days a week if you want to. It
takes a little more-what shall I say?—figuring
out on a sheet of paper, a little more trouble.
In that way some people will get their holiday
in the middle of the week for a while, and
others will get it at the end of the week; but
it can be done, and it is being done-that is the
point of it—in a great many plants in the United
States. It is being done; and that can be
extended to a great many other plants. It is a
nuisance from the point of view of plant
management; we all know that.
There is still another point to consider—there
are plants which obviously could not run seven
days a week; the plant that has to be laid up
for repairs one day out of seven; or a part of a
particular plant that has to be laid up for
repairs and closed down one day out of seven.
You see you can't apply a general rule. It's
just plain immature to try to do it. The people
that understand manufacturing will be the first
to say you can't apply a general rule to this
question.
Q. Mr. President, one argument that is advanced
is where it is necessary for a man to work 55
hours a week, a trained man, and he can't be
replaced; and since the public is begging for
this armament, that is putting undue stress on
the public's shoulders—time and a half.
THE PRESIDENT: In the case of that particular
man that is irreplaceable working 55 hours a
week, we are trying, as you know, to train other
people to fit into those positions. It takes
time to do it, but gradually we are getting a
large number of people trained to do these
specialized jobs.
Q. Mr. President, on this defense setup, do we
understand you to mean that you are not
interested in appointing a chairman of the
national defense?
THE PRESIDENT: I would not draw any inferences
on a detail. That is a pure detail.
Q. One more question: I believe Mr. Knudsen
referred to the blackout of machine time rather
than human time. I believe he was referring
quite specifically to the fact that the machines
were shut down between Friday and Monday.
THE PRESIDENT: You have to tell me the machine,
and the trade that runs the machine.
Q. He didn't say.
THE PRESIDENT: In some cases, yes; in some
cases, no. The objective is to keep all the
machines that will run seven days a week in
operation seven days a week.
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