[David_Hayward (RIP)]

Herewith from two files in fact:

In January 1940 the Canadian Minister of Finance complained bitterly through the High Commissioner in London to the Secretary of State for the Dominions, Anthony Eden, and the Chancellor of the Exchequer that a Ford of Canada order for 2,300 trucks to be supplied through Ford in Bombay had been curtailed [although in fact halved], because of lack of Canadian dollar exchange. To make matters worse Ford at Dagenham had been contracted to provide the vehicles, thus resulting in aggravation of the India-Canada imbalance of trade, and an adverse effect on Ford of Canada. One Civil Servant succinctly announced ‘I am afraid that it is the diversion of the balance of the orders to the Ford Company in England which is the real source of irritation in this case’ . The response also summed up the situation perfectly:

This is an awkward business. There is already a long history, since the outbreak of war, of sensitiveness on Canada’s part and of friction with her in regard to reductions in Canadian exports to this country which have been necessitated by war conditions; and she has argued that her war effort must be adversely affected by interference with her internal economy.

After much discussion at high level the Duke of Devonshire and the Chancellor wrote to explain that the vehicles were for the mechanisation of the army in India, part of a pre-war process, and the British ‘taxpayers’ were footing the bill. Although a proportion of the requirement had been placed with Canada, the rest was intended to obviate the need for redundancies in Dagenham. It was acknowledged though that the matter could have been dealt with more sensitively; this was regrettably indicative of the concerns over dollar exchange that resulted in the blinkered belief in domestic production being able to satisfy requirements, lack of appreciation of continuing Canadian economic assistance to the U.K. and the need to keep the Canadian industries rolling with consecutive orders in addition to Canada’s own. As detailed below, large numbers of Canadian Fords were indeed procured by the British for delivery to Bombay but this was then rescinded possibly because the Indian Army had brought to Egypt a quantity of Chevrolets [1940 Models at least] which then became the responsibility of the W.D. That in turn meant the E.R.C. had to agree to a Ministry of Supply request for dollars to purchase spare parts for them from G.M. Near East and also R.A.O.C., R.A.S.C. and other units that were using Chevrolet trucks as well. Payment in Egyptian Pounds in Egypt required immediate purchase of [U.S.] dollars by Near East and therefore technically this required dollar exchange consent. The reason for this is explained above, namely that all transactions between G.M. subsidiaries had to be made in dollars through New York, and that required dollar purchases. Apart from the £10,000 for the spares for the latter’s vehicles, a running contract of expenditure up to £14,000 per year was agreed to with ‘G.M. Limited’ {sic.) as required by the Army in Egypt. The payments could have been made in pounds in Egypt, or to Southampton who then telegraphed the sums to Alexandria, and then Near East in turn purchased dollars to pay New York! The sum was agreed by the E.R.C. because there was no hope of supplying small quantities of spare parts for these vehicles with ‘any degree of efficiency’.

However by August 1940 and with the entry of the Italians into the war, the Mediterranean was closed to U.S. shipping; Near East could no longer obtain supplies and G.M. required purchases for the Army to be made through the B.P.C. in New York. Impressments increased the number of Chevrolets being used, and $137,000-worth of spare parts covering 5 months’ requirements was purchased from local agents. Further purchases of spares were required and $130,000 was requested to be authorised to purchase 8 months’ worth of stock, at say $16,000 per month, or $200,000 p.a. E.R.C. consent was then requested for the immediate purchase of spares to $130,000 and for purchases to cover monthly demands for spare parts