Amazing USA/Australia Treaty 1946

[Lang]

In this amazing treaty USA and Australia resolved finally and completely for not only all the Lend Lease and Reverse Lend Lease agreements for the entire WW2 period but for every supply, service and loan either way.

It was all done on ONE PAGE ending with nobody owing anybody anything. You will note the Australian Government gave the US Government property to pay for some of their debts which in turn the US Government gave back to the Australian Government to pay for their debts!

The agreement also includes the continued production and delivery of all the stuff in the pipeline Australia ordered - this in itself must have run to many millions of dollars - I suspect this is why hundreds of Studebakers, among many other things kept arriving after the war and were placed in long term storage immediately.. 3 USD equalled 1 Australian Pound in 1945.

I read somewhere that the British and Americans finally closed the books on their Lend Lease only recently - 70 years later.

This is the guts of it:

c) In consideration of the mutual undertakings described in this Agreement, and with the objective of arriving at as comprehensive a settlement as possible and of obviating protracted negotiations between the two Governments, all other financial claims whatsoever of one Government against the other which arose out of lend-lease or reciprocal aid, or otherwise arose on or after 3 September 1939 and prior to 2 September 1945, out of or incidental to the conduct of World War II, and which are not otherwise dealt with in this Agreement, are hereby waived, and neither Government will hereafter raise or pursue any such claims against the other.

If only our politicians could be as practical and sensible now. The same agreement today would not only have taken several years of conferences and jet-setting by politicians and public servants but instead of being written in plain English as below would have been rendered unreadable with weasel words and legal speak in a 50 page document with 300 annexes.

Australian Treaty Series 1946 No 6

DEPARTMENT OF FOREIGN AFFAIRS AND TRADE
CANBERRA


Agreement between the Government of the Commonwealth of Australia and the Government of the United States of America on Settlement for Lend-Lease, Reciprocal Aid, Surplus War Property, and Claims


(Washington-New York, 7 June 1946)


Entry into force: 7 June 1946


AUSTRALIAN TREATY SERIES
1946 No. 6 (electronic)

(c) Commonwealth of Australia 1996
AGREEMENT BETWEEN THE GOVERNMENT OF THE COMMONWEALTH OF AUSTRALIA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA ON SETTLEMENT FOR LEND-LEASE, RECIPROCAL AID, SURPLUS WAR PROPERTY, AND CLAIMS

THE GOVERNMENT OF THE COMMONWEALTH OF AUSTRALIA (hereinafter referred to as the Commonwealth of Australia) AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA have reached agreement as set forth below regarding settlement for lend-lease, reciprocal aid, and surplus war property located in Australia and for the financial claims of each Government against the other arising as a result of World War II. This settlement is complete and final. Both Governments, in arriving at this settlement, have taken full cognizance of the benefits already received by them in the defeat of their common enemies, and of the aid furnished by each Government to the other in the course of the war. No further benefits will be sought as consideration for lend-lease, reciprocal aid and surplus war property, or for the settlement of claims or other obligations arising out of the war, except as herein specifically provided.

1. (a) The term "lend-lease article" as used in this Agreement means any article transferred by the Government of the United States under the Act of 11 March 1941

(i) to the Commonwealth of Australia, or

(ii) to any other government and retransferred to the Commonwealth of Australia.

(b) The term "reciprocal aid article" as used in this Agreement means any article transferred by the Commonwealth of Australia to the Government of the United States under reciprocal aid.

2. In recognition of the mutual wartime benefits received by the two Governments from the interchange of lend-lease and reciprocal aid, neither Government will make any payment to the other for lend-lease and reciprocal aid articles and services used in the achievement of the common victory.

3. The Commonwealth of Australia, in discharge of its pre-existing commitment to compensate the Government of the United States for the postwar value of machine tools transferred during the war to the Commonwealth of Australia by the Government of the United States under lend-lease, and in consideration of the postwar value of other capital equipment transferred during the war under lend-lease, including the non-combat aircraft and spare parts therefor described in the Annex of this Agreement, and the transfer of the surplus property described in paragraph 8(a) hereof, and in order to further educational and cultural relationships between the two countries by means of scholarships or otherwise in a manner mutually agreeable, will pay to the Government of the United States the sum of $27,000,000 as follows:

(a) $20,000,000 in United States dollars within ninety days from the effective date of this Agreement; and

(b) $7,000,000 by any of the following methods, or any combination thereof designated by the Government of the United States (employing the rate of exchange between United States dollars and Australian pounds now in effect):

(i) By delivery to the Government of the United States by the Commonwealth of Australia of title to real property and improvements of real property in Australia, as selected and determined by agreement between the two Governments, aggregating in value not more than $2,000,000;

(ii) by establishment of a fund in Australian pounds for expenditure by the Government of the United States, in accordance with agreements to be reached between the two Governments for carrying out educational and cultural programs of benefit to the two countries; or

(iii) in the event that, after three years from the date of this Agreement, the two Governments should mutually agree that the purposes described in subsections (i) and (ii) above cannot be carried out to the full extent now contemplated, and residue will be paid by the Commonwealth of Australia in United States dollars.

4. (a) The Commonwealth of Australia hereby acquires, and shall be deemed to have acquired as of 2 September 1945, full title, without qualification as to disposition or use, to all lend-lease articles in the possession of the Commonwealth of Australia, its agents or distributees, on 2 September 1945, and not subsequently returned to the Government of the United States, other than lend-lease articles on that date in the possession of the armed forces of the Commonwealth of Australia, but including the non-combat aircraft and spares described in the Annex to this Agreement.

(b) The Government of the United States agrees to complete as early as possible the transfer (which term, except as hereinafter provided, shall include delivery aboard ocean vessel in a United States port) of the articles selected by the Commonwealth of Australia which were covered by lend-lease requisitions filed by the Commonwealth of Australia with the United States Foreign Economic Administration and which were under contract, or were completed, but had not been transferred, on 2 September 1945, and such other articles and services as have been designated by agreement between the two Governments for inclusion in the lend-lease pipeline of the Commonwealth of Australia. Such transfer will be made in the quantities and according to the specifications and other conditions, except as to time of delivery, set forth in the covering requisitions, to the extent that such articles are or will be available to the Government of the United States for transfer to the Commonwealth of Australia. Title to the articles covered by this paragraph shall pass to the Commonwealth of Australia immediately upon loading of the articles on board ocean vessel in a United States port, provided that risk of loss not recoverable from the supplier, carrier or other third party, shall be assumed by the Commonwealth of Australia upon shipment from the factory or other premises of the supplier. Title to any articles that shall not have been loaded on board ocean vessel in a United States port prior to midnight on 31 July 1946, or two months after receipt by the Commonwealth of Australia of notice of availability, whichever is later, shall be deemed to have been transferred as of such later date, and thereafter the Commonwealth of Australia shall be responsible for storing and moving such articles within the United States and for delivering such articles aboard ocean vessel in a United States port. The Government of the United States will pay the cost of ocean transportation to Australia on United States flag vessels only of such of the articles covered by this paragraph as were loaded aboard ocean vessel berthing in United States ports prior to 1 January 1946.

5. The Government of the United States hereby acquires, and shall be deemed to have acquired as of 2 September 1945, full title, without qualification as to disposition or use (a) to all reciprocal aid articles transferred to the Government of the United States and not subsequently returned to the Commonwealth of Australia or lost, destroyed or consumed, other than reciprocal aid articles which on that date were in the possession of the armed forces of the Government of the United States, and (b), to all reciprocal aid articles transferred to the Government of the United States between 2 September 1945 and 31 December 1945, both dates inclusive, and not subsequently returned to the Commonwealth of Australia.

6. (a) The Government of the United States, with respect to lend-lease articles (other than those described in the Annex to this Agreement), and the Commonwealth of Australia, with respect to reciprocal aid articles, reserve a right to recapture, respectively, at any time after 1 September 1945, any such articles which as of the date upon which notice requesting return is communicated to the other Government, are in the possession of the armed forces of the other Government, although neither Government intends to exercise generally this right of recapture, except that the Commonwealth of Australia will return to the Government of the United States all vessels of the United States Navy transferred under lend-lease and in the possession of the Commonwealth of Australia on 2 September 1945. In respect of cases where either Government wishes from time to time to exercise this right of recapture, each Government will give reasonable notice of its intention and will provide full opportunity to the other Government for discussion of that Government's need for the articles in question, without limiting the right of recapture.

(b) The Commonwealth of Australia may, without restriction, divert any lend-lease articles now held by the armed forces of the Commonwealth of Australia to any uses in or outside Australia, but will not transfer, without the prior consent of the Government of the United States and without payment of any proceeds to the Government of the United States, any lend-lease articles held by the armed forces of the Commonwealth of Australia in the categories of arms, ammunition and other lethal weapons, to any third country.

(c) The Government of the United States may, without restriction, divert any reciprocal aid articles now held by the armed forces of the Government of the United States to any uses in or outside the United States, but will not transfer, without the prior consent of the Commonwealth of Australia and without payment of any proceeds to the Commonwealth of Australia, any reciprocal aid articles held by the armed forces of the Government of the United States in the categories of arms, ammunition and other lethal weapons, to any third country.

7. (a) The Commonwealth of Australia hereby assumes responsibility for the settlement and payment of all claims against the Government of the United States or members of the United States armed forces, arising from acts or omissions occurring before 30 June 1946, in the course of military duties of members of the armed forces of the Government of the United States in Australia.

(b) Financial claims between the two Governments where the liability for payment has heretofore been acknowledged, and the method of computation mutually agreed, are not covered by this settlement, as they will be settled in accordance with such arrangements; the following are examples of such claims, which will be dealt with in accordance with procedures already established or to be established after appropriate discussion:

(i) claims arising out of cash reimbursement lend-lease requisitions filed by the Commonwealth of Australia;

(ii) claims covered by the "Memorandum concerning Disposition of and Payment for Cargoes carried on Twelve Dutch Ships diverted to Australia'' and "Memorandum concerning Disposition of and Payment for Cargoes carried on Certain United States Ships diverted to Australia'', both dated 20 December 1944;

(iii) obligations or claims arising out of the "Knock-for-Knock" Agreement of 8 March 1945,[1] covering the mutual waiver of, and legal aid in connection with, maritime claims;

(iv) the obligation heretofore assumed by the Commonwealth of Australia in connection with silver transferred by the Government of the United States under lend-lease.

(c) In consideration of the mutual undertakings described in this Agreement, and with the objective of arriving at as comprehensive a settlement as possible and of obviating protracted negotiations between the two Governments, all other financial claims whatsoever of one Government against the other which arose out of lend-lease or reciprocal aid, or otherwise arose on or after 3 September 1939 and prior to 2 September 1945, out of or incidental to the conduct of World War II, and which are not otherwise dealt with in this Agreement, are hereby waived, and neither Government will hereafter raise or pursue any such claims against the other.

8. (a) The Government of the United States, in partial consideration of the payments to be made by the Commonwealth of Australia pursuant to section 3 of this Agreement, agrees to transfer property, selected by mutual agreement, located in or outside Australia, heretofore or hereafter declared to the Office of the Foreign Liquidation Commissioner, United States Department of State, as surplus to the requirements of any department or agency of the Government of the United States, of a total value aggregating $6,500,000 computed at prices to be mutually agreed. There shall be included in the property covered by this paragraph

(i) all property so declared as surplus included in sales or agreements to sell heretofore entered into between the two Governments; and

(ii) all such property included in sales or agreements to sell to any firms or individuals in Australia or in Australian territories, heretofore or hereafter made by the Government of the United States, in respect of which import licenses have been or may hereafter be issued by the Commonwealth of Australia;

and the contract value of the property included in such sales or agreements to sell shall be taken into consideration in computing the total value of surplus property transferred hereunder. This Agreement shall govern in any case in which the terms hereof are in conflict with the terms of any of the agreements described in paragraphs (i) and (ii) above.

(b) The amounts paid and to be paid to the Government of the United States for the property included in the sales and agreements to sell described in paragraphs 8(a)(i) and 8(a)(ii) of this Agreement shall, when paid, be treated as payments by the Commonwealth of Australia in partial discharge of the obligation of the Commonwealth of Australia assumed in section 3 of this Agreement to make payments to the Government of the United States.

(c) The Commonwealth of Australia agrees that it will not cause, and will use its best endeavors to prevent, the exportation to the United States, its territories or possessions, of any of the property covered by paragraph (a) above in the same, or substantially the same form, if such property was originally produced in the United States and is readily identifiable as such, and agrees that it will not resell any of such property to any person, firm or government, for the purpose of export to the United States, its territories or possessions, contrary to any statute or regulation of the Government of the United States as notified by the Government of the United States.

9. Both Governments, when they dispose of articles acquired pursuant to sections 4, 5 and 8 of this Agreement, will use their best endeavors to avoid discrimination against the legitimate interests of the manufacturers or producers of such articles, or their agents or distributors, in each country.

10. This Agreement shall take effect on the date of signature.

SIGNED in duplicate, at Washington for the Government of the United States and at New York for the Commonwealth of Australia, this seventh day of June 1946.

FOR THE GOVERNMENT OF THE FOR THE GOVERNMENT OF THE

COMMONWEALTH OF AUSTRALIA: UNITED STATES OF AMERICA:

[Signed:] [Signed:]

H V EVATT JAMES F BYRNES

Minister of External Affairs of Secretary of State of

the Commonwealth of Australia the United States of America

[Lang]

An interesting one I found was a request from the Australian Air Force to the UK Government for clarity on who owned the remaining 65 MKV Spitfires left in Australian service December 1945 as they wanted to scrap them.

Numerous letters and reminders between London and Canberra finally produced an answer nearly a year later that the British couldn't care less and the Australians could do what they liked with them (seeing the Australians had paid for them in the first place!)

It took a year to sort out a handful of obsolete aircraft - luckily we had no billion dollar Lend Lease type arrangement with UK or we would still be talking about it.

[Private_collector]

Perhaps so, but due to short sightedness, where are all those spitfires now!?

[Lang]

While we regret losing various things years later, they do not have such great value at the time eg who cares about the Army saving say 100 Landrovers to bring out in 50 years time?

Where do you start and finish? If every enthusiast had his way we would be saving everything and the country would be full of warehouses and the harbours full of mothballed ships. When do you bring it out - 10, 20, 50 years later.

I think the best we can do is have a few gate guardians and donations to a few museums of items considered of significance and sell the rest to recover some money for the taxpayer.

What is significant? The lowly Hudson is much more significant to Australian history than a Spitfire as are several other types from Kittyhawks to Beauforts.

We can't save everything.

Lang

[Robert Bergeron]

Very nice reading. Thanks for posting this !

Absolutely true about modern politicians. Those were the days.

Cheers from Comox , Canada , North America.

[Ron King]

The Studebakers delivered to Australia at the end of WW2 were not lend lease.
They were in fact purchased out right and were unassembled in crates.
Most likely at near give away prices.

[Lang]

Yes that is what the treaty says. The majority of stuff Australia got from USA during the war was paid for on a commercial basis and those Studebakers were in the pipeline referred to in the treaty.

Australia had a vast fleet of trucks and certainly did not need those extra vehicles without a war going on. The reason they just didn't say we will cancel the orders and give you your money back was the USA had to keep their industry going and not have the rug pulled out from under them with a 90% cancellation of all orders overnight. Also why billions of dollars worth of vehicles and equipment were sold, donated, scrapped overseas and not brought back to USA. The treaty even says that Australia can not sell any American goods it possesses to USA buyers for the same reason.

As can be seen from the treaty Australia got relatively small amounts of Lend Lease which was balanced by the goods and services provided to USA by Australia for the million or so personnel who were stationed or passed through here.

The Lend Lease scheme was negotiated (against serious US opposition) when Britain totally ran out of money. Up to that point USA had demanded full payment ie transfer of British gold reserves, to cover all purchases. Even after the British Empire countries had their gold reserves raided to save the motherland the cupboard was bare. It was undoubtedly Churchill's finest hour when he went to USA and schmoozed Roosevelt to support the cause. There is no doubt that Lend Lease, and its extension to Russia particularly, was a war-winning decision.

Lang

[Mike Kelly]

The Yanks had various Australian made equipment issued, wireless sets and even radar sets . An article in EA magazine explained how the Aust. built radar sets performed better than the contemporary US sets. The yanks did catch quickly though.

I had a AWA built transmitter with "US signal corps" etched into the front panel . AWA had placed a little panel over the US SC writing, the panel read AWA WS made in Australia .AWA also made copies of the classic HRO receiver for the US army, a guy in California has one of these, he was looking for a manual.

I have a Cash horizontal milling machine, made in Richmond, Melbourne . These were initially made for the USAAC during WW2. Another Cash owner has researched all this.

[maple_leaf_eh]

Originally Posted by Lang

.....

The Lend Lease scheme was negotiated (against serious US opposition) when Britain totally ran out of money. Up to that point USA had demanded full payment ie transfer of British gold reserves, to cover all purchases. Even after the British Empire countries had their gold reserves raided to save the motherland the cupboard was bare. It was undoubtedly Churchill's finest hour when he went to USA and schmoozed Roosevelt to support the cause. There is no doubt that Lend Lease, and its extension to Russia particularly, was a war-winning decision.

Lang

It wasn't just Churchill, but a full press of the Royals too. The new king and Queen Mum weren't comfortable out of Europe and weren't sure how they'd be received. Accounts of the day said they found the Americans a funny lot with some peculiar personal and cultural habits, but gracious nonetheless. FDR was no isolationist, which helped greatly.

[Lang]

If you want to read about the British propaganda campaign to overcome US neutrality and get them into the war you should read "Selling the War" by Nicholas John Cull.

Churchill got his Lend Lease in 1941 without an American war committment so he was dancing in the streets when Pearl Harbour happened. His next successful sell was to have a Europe First policy probably against America's real interests in the Pacific.

Lang

[Mike Kelly]

During the later WW2 days, the Americans were pressurising Britain , the US policy was the 'empire' days are over . Colonial territories and mandates were to be given up . FDR was directly cajoling Churchill over this , FDR was very much a anti colonial person.

[Lang]

That's why America took a mandate over the Marshall Islands, American Samoa, Panama Canal Zone and a number of others???